U. S. SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1998



                        Commission file number - 0-21346


                             TRIANGLE BANCORP, INC.
             (Exact name of registrant as specified in its charter)


         North Carolina                             56-1764546 
  (State or other jurisdiction of                (I.R.S. Employer
  incorporation or organization)                 Identification No.)


                              4300 Glenwood Avenue
                          Raleigh, North Carolina 27612
                    (Address of principal executive offices)
                                   (Zip Code)

                           Telephone: (919) 881-0455 
                         (Registrant's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes _X_  No ___

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

         Common Stock                               21,524,892
             Class                         Outstanding at August 11, 1998


<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements

         The  Consolidated  Balance  Sheets for June 30, 1998 and  December  31,
         1997, the Consolidated Statements of Income for the three and six month
         periods ended June 30, 1998 and 1997, and the  Consolidated  Statements
         of Cash Flows for the six month  periods  ended June 30,  1998 and 1997
         have been included as Attachments to this report.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

         General

         The purpose of this  discussion is to provide the reader with a concise
         understanding  of the performance  and financial  condition of Triangle
         Bancorp,  Inc.  (the  "Company").  The Company is a  multibank  holding
         company  incorporated  in November  1991 under the laws of the State of
         North  Carolina,  with four  wholly-owned  subsidiaries:  Triangle Bank
         ("Triangle");  Bank of Mecklenburg ("Mecklenburg")  (collectively,  the
         "Banks"); Coastal Leasing LLC ("Coastal"); and Triangle Capital Trust.

         Highlights 

         During the second quarter of 1998, Triangle Bancorp, Inc. continued its
         growth   strategy  with  the  acquisition  of  Guaranty  State  Bancorp
         ("Guaranty") on April 16, 1998. Guaranty had $103 million in assets and
         four branch locations in Durham, North Carolina.

         The Company has also entered a definitive  agreement to acquire  United
         Federal  Savings Bank  ("UFSB") in Rocky Mount,  North  Carolina.  UFSB
         operates   thirteen  banking  offices  and  reported  total  assets  of
         approximately  $300 million at June 30, 1998.  It is  anticipated  that
         this  transaction  will be  completed  in  September  1998,  subject to
         regulatory and UFSB shareholder approval.

         Operating Results for the Three Months Ended June 30, 1998 and 1997

         The  Company's  net income for the three months ended June 30, 1998 was
         $4,753,000  compared to earnings of  $5,662,000  for the same period in
         1997,  an decrease of $909,000 or 16.05%.  Diluted  earnings  per share
         were $0.21  compared to $0.26 for the same period in 1997.  The results
         for the three  months  ended June 30, 1998  included  after-tax  merger
         expenses of  $711,000.  The results for the three months ended June 30,
         1997  included a net  after-tax  gain of  $1,200,000 on the sale of two
         branch offices, net of after-tax merger expenses.

         Without the non-recurring  merger expenses and gain on branch sale, net
         income  for the  three  months  ended  June 30,  1998  would  have been
         $5,464,000 versus $4,474,000 for the same period


<PAGE>


         in 1997.  This is an increase of 22%.  Diluted  earnings per share were
         $.25 for the three  months ended June 30, 1998 versus $.20 for the same
         period in 1997.

         For the three  months  ended June 30,  1998 the  annualized  returns on
         average   assets   (ROA)  and  equity  (ROE)  were  1.14%  and  14.16%,
         respectively, compared to 1.62% and 18.52% for the same period in 1997.
         Without  the  non-recurring  items,  ROA would have been  1.31%  versus
         1.28%,  and ROE would  have been  16.28%  versus  14.64%  for the three
         months ended June 30, 1998 and 1997, respectively.

         Core earnings for the period were positively impacted by an increase in
         net interest income due to an increase in the volume of earning assets.
         The net  interest  income for the three  months ended June 30, 1998 was
         $15,663,000  compared to  $14,116,000  for the same period in 1997,  an
         increase of $1,547,000  or 11%. The  increases  from volume were offset
         somewhat  by a  decrease  in the  taxable  equivalent  yield  with  net
         interest margin decreasing to 4.28% for the three months ended June 30,
         1998 from 4.50% for the same period in 1997.

         For the three  months  ended June 30,  1998,  a loan loss  provision of
         $855,000  was made  compared  to a provision  of $978,000  for the same
         period in 1997.

         Recurring  noninterest  income for the three months ended June 30, 1998
         was  $3,976,000  compared to $2,960,000  for the same period in 1997 an
         increase of 34%. This  increase  resulted  from  increases in service
         charges,  fees from the  investment  services  subsidiary  and gains on
         sales of loans over the prior year.  Service charge fees have increased
         as a result of 10 branches  acquired in August 1997 which increased the
         number of transaction  accounts the Company collects fees on. Fees from
         the  investment  services  subsidiary  and  gains  on loan  sales  have
         increased  over  the  prior  year  due to an  increased  focus on these
         services.

         Recurring  noninterest  expenses  increased by $1,449,000 for the three
         months ended June 30, 1998  compared to the same period in 1997.  These
         increases are  primarily  due to the growth of the Company  through the
         August  1997 branch  acquisition  which  added ten  branches  and their
         related  infrastructure  and personnel.  In the branch  acquisition,  a
         deposit  premium  was paid  which is being  amortized  thus  increasing
         amortization  expense for the three months ended June 30, 1998 compared
         to the same period in 1997.

         Operating Results for the Six Months Ended June 30, 1998 and 1997

         The  Company's  net income for the six months  ended June 30,  1998 was
         $9,664,000,  compared to $9,585,000  for the same period in 1997.  This
         represents an increase of $79,000 or 1%. Excluding non-recurring merger
         expenses  in 1998 and the net gain on sale of  branches  in 1997,  core
         earnings for the six months ended June 30, 1998 were $10,497,000, a 25%
         increase  over the  $8,400,000  earned  during the same period in 1997.
         Earnings  per share  were $0.43  ($0.47  without  the merger  expenses)
         compared to $0.44 ($0.38 without the gain) for the same period in 1997.

         For the six  months  ended  June 30,  1998 the  annualized  returns  on
         average assets and equity were 1.16% and 14.54%, respectively, compared
         to 1.40% and 15.88% for the same period in 1997. Without  non-recurring
         items in 1998 and 1997, ROA was 1.26% versus 1.23%,  and ROE was 15.79%
         versus  13.92%  for the six  months  ended  June  30,  1998  and  1997,
         respectively.


<PAGE>


         Core  earnings  for the six  month  period  ended  June 30,  1998  were
         positively  impacted by an increase  in net  interest  income due to an
         increase in the volume of earning  assets.  The net interest income for
         the six  months  ended  June  30,  1998  was  $31,082,000  compared  to
         $27,517,000  for the same period in 1997 an increase of  $3,565,000  or
         13%. The taxable  equivalent net interest  margin declined to 4.26% for
         the six months  ended June 30,  1998 from 4.50% for the same  period in
         1997.

         For the six  months  ended  June 30,  1998,  a loan loss  provision  of
         $2,006,000  was made compared to a provision of $1,569,000 for the same
         period in 1997.

         Recurring noninterest income for the six months ended June 30, 1998 was
         $7,071,000  compared  to  $5,567,000  for the same  period  in 1997 and
         increase of 27%. This increase is  represented  by increases in service
         charges,  fees from the  investment  services  subsidiary  and gains on
         sales of loans over the prior year.  Service charge fees have increased
         as a result of 10 branches  acquired in August 1997 which increased the
         number of transaction  accounts the Company collects fees on. Fees from
         the  investment  services  subsidiary  and  gains  on loan  sales  have
         increased  over  the  prior  year  due to an  increased  focus on these
         services.  These  increases  were offset by a decrease in trading gains
         recognized in 1997. The Company  discontinued  its  investment  trading
         activities in 1997.

         Recurring  noninterest  expenses for the six months ended June 30, 1998
         increased  $2,067,000 over the same period in 1997. These increases are
         primarily  due to the growth of the  Company  through  the August  1997
         branch   acquisition   which  added  ten  branches  and  their  related
         infrastructure  and  personnel.  In the branch  acquisition,  a deposit
         premium was paid which is being amortized thus increasing  amortization
         expense  for the six months  ended June 30,  1998  compared to the same
         period in 1997.


         Financial Condition

         Total assets  decreased $39 million,  or 2%, to $1.673  billion at June
         30, 1998 versus $1.712  billion at December 31, 1997.  The decrease was
         due to the  maturity of a Federal  Home Loan Bank advance in early 1998
         and a corresponding decrease in securities.

         The Company  continued to maintain strong loan loss reserves during the
         period  with the loan loss  reserves  at June 30,  1998 being  1.49% of
         total loans and 197% of  nonperforming  loans.  Nonperforming  loans to
         total  loans plus other real  estate  owned were .76% on June 30,  1998
         compared to .64% as of December 31, 1997. Net charge offs were .21% for
         the six month period ended June 30, 1998 versus .02% in the same period
         in 1997.  A summary  of  certain  information  related to the loan loss
         reserves and nonperforming assets as of June 30, 1998 follows:


<PAGE>


                RESERVE FOR LOAN LOSSES AND NONPERFORMING ASSETS
                             (Dollars in Thousands)

Analysis of Reserve for Loan Losses:

Beginning Balance, January 1, 1998                                      $14,954
                                                                        -------
Deduct charge-offs:
         Commercial financial and agricultural                              653
         Real estate, construction and land development                       0
         Installment loans to individuals                                   422
         Credit card and related plans                                      322
                                                                        -------
                                                                          1,397
Add recoveries:
         Commercial, financial and agricultural                             191
         Real estate                                                         15
         Installment loans to individuals                                    50
         Credit card and related plans                                       32
                                                                        -------
                                                                            288
                                                                        -------
Net charge-offs                                                           1,109

Additions charged to operations                                           2,006
                                                                        -------

Ending Balance,  June 30, 1998                                          $15,851
                                                                        =======
Ratio of net charge-offs to average loans outstanding during the period    0.21%


Analysis of Nonperforming Assets:

Nonaccrual loans:
         Commercial, financial and agricultural                         $ 1,355
         Real estate, construction and land development                   1,202
         Installment loans to individuals                                    69
                                                                        -------
                                                                          2,626
Loans contractually past due 90 days or more
     as to principal or interest                                          4,420
Foreclosed assets                                                         1,002
                                                                        -------
TOTAL                                                                   $ 8,048
                                                                        =======


<PAGE>

         Total  deposits  were $1.321  billion as of June 30,  1998  compared to
         $1.285 billion at December 31, 1997. The increase was primarily in time
         deposits greater than $100,000.

         With the  increase in  deposits,  short term debt has  decreased.  Also
         Federal  Home Loan Bank  borrowings  have been  reduced by $53,200 from
         December 31, 1997 to June 30, 1998.

         Capital

         The  adequacy  of capital is  reviewed  regularly,  in light of current
         plans and economic  conditions,  to ensure that  sufficient  capital is
         available for current and future needs,  to minimize the Company's cost
         of capital and to assure compliance with regulatory  requirements.  The
         Company's capital ratios as of June 30, 1998 are as follows:

                                                   Actual   Required  Excess
                                                   Percent  Percent   Percent
                                                   -------  --------  -------
         Tier 1   Capital to Risk Based Assets     10.91%     4.00%     6.91%
                                                                       
         Total  Capital to Risk Based Assets       12.16%     8.00%     4.16%
                                                                       
         Leverage Ratio                             7.92%     4.00%     3.92%
                                                                     
         Impact of Year 2000 Issue

         The Year 2000 Issue is the result of computer  programs  being  written
         using two digits rather than four to define the  applicable  year. As a
         result,  many automated  applications may fail to function  properly or
         may cease to function unless corrected or replaced.

         The  Company is a "turnkey"  institution;  it does not write or develop
         any of its own computer applications, but instead purchases or licenses
         its  applications  from third party vendors.  The Company has adopted a
         plan which calls for the  Company's  applications  to properly  process
         dates in the year 2000 and  beyond by April 20,  1999.  As a  "turnkey"
         institution,  the Company is in dialogue  with all of its vendors as to
         their preparedness for Year 2000. In addition, the Company has hired an
         independent  consultant  to  assist  it in all  phases of its Year 2000
         plan.

         As of June 30, 1998,  the Company had completed  its  assessment of its
         existing  computer  systems  and  applications  and had  identified  32
         mission  critical  applications.  As of June 30, 1998,  the Company had
         begun  renovation,  validation  and  implementation  of  several of its
         missions  critical  applications.  Renovation for the remaining mission
         critical  applications  is to be completed by December 31, 1998, and by
         March 31,  1999 for  non-mission  critical  functions.  Validation  and
         implementation of all functions,  both mission critical and non-mission
         critical,  are to be completed by April 30, 1999.  As  validation  of a
         function  occurs,  the Company will develop a contingency plan for each
         function.  As of June  30,  1998  the  Company  had  begun  contingency
         planning for several functions.

         The  Company  has  budgeted  $1,000,000  for the Year 2000  plan,  with
         approximately  $50,000 for 1997,  $750,000  for 1998 and  $200,000  for
         1999. As of June 30, 1998, the Company has 


<PAGE>


         spent   approximately   $40,000   and   $210,000   in  1997  and  1998,
         respectively,  on Year 2000  issues.  The  Company  does not expect the
         costs of this  process to be material  to its  financial  condition  or
         results of operations.

         Based on information now available, the Company anticipates its systems
         will properly process dates in the year 2000 and beyond.


                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         There are no material pending legal proceedings involving the Company.

Item 2.  Changes in Securities

         There have been no  changes in the rights of the  holders of the common
         stock of the Company.

Item 3.  Defaults Upon Senior Securities

         Not Applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

         Not Applicable.

Item 5.  Other Information

         The Securities and Exchange Commission recently amended Rule 14a-4
         promulgated under the Securities Exchange Act of 1934, as amended (the
         "Exchange Act"). Pursuant to amended Rule 14a-4, if a shareholder of
         the Company does not submit to the Company at its executive offices in
         Raleigh, North Carolina, by February 8, 1999 a notice of a his or her
         intention to present a matter at the Company's 1999 Annual Meeting of
         Shareholders, all proxies held by management of the Company at the 1999
         Annual Meeting may be voted in the discretion of management of the
         Company when the matter is presented at the Annual Meeting, without any
         discussion of the matter appearing in the proxy materials for the
         Annual Meeting. In accordance with existing regulation and as disclosed
         in the Company's proxy statement dated March 20, 1998, any matter to be
         presented to the Company for inclusion in its proxy materials for the
         1999 Annual Meeting must be presented to the Company in compliance with
         the provisions of Rule 14a-8 promulgated under the Exchange Act.

Item 6.  Exhibits and Reports on Form 8-K

         a)       Exhibits

                  (27)     Financial Data Schedule.

         b)       Reports on Form 8-K

                  On June 17, 1998,  the Company  filed an 8-K to file  restated
                  financial statements to reflect the acquisition of Guaranty as
                  of April 16, 1998.  The  acquisition  was  accounted  for as a
                  pooling-of-interests  and therefore all  historical  financial
                  information was restated.

                  On  August  10,  1998,  the  Company  filed  an 8-K to file an
                  amendment  to  the  March  4,  1998   Agreement  and  Plan  of
                  Reorganization  and Merger  with UFSB which  adopted a revised
                  pricing  structure in the event the average  closing  price of
                  Triangle stock were less than $18.67.


<PAGE>


                     TRIANGLE BANCORP, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                  IN THOUSANDS
                                   UNAUDITED


<TABLE>
<CAPTION>
                                                                           June 30, 1998   December 31, 1997
                                                                           -------------   ------------------
<S>                                                                         <C>              <C>        
ASSETS
Cash and due from banks                                                     $    60,168      $    54,162
Federal funds sold                                                                1,775            4,219
Interest-bearing deposits in banks                                                4,539           23,027
Securities available for sale                                                   394,439          432,722
Securities held to maturity, market value;                                                 
       $83,540 and $95,946                                                       82,336           94,793
Loans and Leases, less allowance for losses of                                             
      $15,851 and $14,954                                                     1,044,864        1,018,556
Premises and equipment, net                                                      36,077           34,541
Interest receivable                                                              14,148           13,416
Deferred income taxes                                                             8,233            6,876
Intangible assets                                                                25,949           27,688
Other assets                                                                        535            1,616
                                                                            -----------      -----------
                        Total Assets                                        $ 1,673,063      $ 1,711,616
                                                                            ===========      ===========

LIABILITIES AND SHAREHOLDERS' EQUITY                                                       
                                                                                           
Deposits:                                                                                  
     Noninterest-bearing demand                                                 195,008          192,997
     Interest-bearing demand                                                    161,943          175,322
     Savings and money market                                                   275,490          268,924
     Large denomination certificates of deposit                                 160,831          120,655
     Other time                                                                 527,792          526,688
                                                                            -----------      -----------
                        Total Deposits                                        1,321,064        1,284,586
                                                                                           
Short-term debt                                                                  40,582           61,506
Federal Home Loan Bank advances                                                 140,300          195,300
Corporation obligated manditorily                                                          
     redeemable securities                                                       19,952           19,951
Interest payable                                                                  7,966            9,125
Other liabilities                                                                 7,622           10,656
                                                                            -----------      -----------
                         Total other liabilties                                 216,422          296,538
                                                                            -----------      -----------
                         Total liablities                                     1,537,486        1,581,124
                                                                            -----------      -----------
Commitments and contingencies*                                                             
                                                                                           
SHAREHOLDERS' EQUITY                                                                       
                                                                                           
Common stock, no par value 50,000                                                          
     authorized;  21,529 shares and                                                        
     21,360 shares outstanding at June 30,                                                 
     1998 and December 31, 1997, respectively                                    82,557           81,290
Undivided profits                                                                55,040           48,899
Accumulated other comprehensive income                                           (2,020)             303
                                                                            -----------      -----------
                        Total shareholders' equity                              135,577          130,492
                                                                            -----------      -----------
                        Total liablities and shareholders' equity           $ 1,673,063      $ 1,711,616
                                                                            ===========      ===========
</TABLE>

Standby  letters of credit  outstanding  at June 30, 1998 amounted to $5,135 
The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.



<PAGE>

                     TRIANGLE BANCORP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                      IN THOUSANDS (EXCEPT PER SHARE DATA)
                                   UNAUDITED



<TABLE>
<CAPTION>
                                                For the three    For the three       For the six       For the six
                                                months ended     months ended        months ended      months ended
                                                June 30, 1998    June 30, 1997       June 30, 1998     June 30, 1997
                                                -------------    -------------       -------------     -------------
<S>                                                 <C>              <C>              <C>              <C>    
INTEREST INCOME
     Interest and fees on loans                     $24,393          $21,847          $48,131          $41,983
     Securities                                       7,100            5,566           14,987           11,226
     Interest bearing deposits                          181              240              436              398
     Federal funds sold                                 117               31              243               92
                                                    -------          -------          -------          -------
          Total interest income                      31,791           27,684           63,797           53,699

INTEREST EXPENSE:
     Large denomination certificates of deposit       2,441            1,703            4,640            3,413
     Other deposits                                  10,628           10,204           21,347           19,828
     Capital securities                                 469              139              938              139
     Short-term debt                                    462              275            1,027              534
     Other borrowed funds                             2,128            1,247            4,763            2,268
                                                    -------          -------          -------          -------
          Total interest expense                     16,128           13,568           32,715           26,182
                                                    -------          -------          -------          -------
Net interest income                                  15,663           14,116           31,082           27,517

Provision for loan losses                               855              978            2,006            1,569
                                                    -------          -------          -------          -------
Net interest income after
     provision for loan losses                       14,808           13,138           29,076           25,948
                                                    -------          -------          -------          -------
NONINTEREST INCOME:
     Service charges on deposit accounts              2,015            1,560            3,832            3,052
     Other commissions and fees                         721              406            1,367              878
     Gain on sale of securities                         433              410              471              493
     Trading gains, net                                --                182             --                492
     Gain on sale of loans                              344              110              543              195
     Gain on sale of branches                          --              2,000             --              2,000
     Other fee income                                   213               41              347              136
     Other operating income                             250              251              511              321
                                                    -------          -------          -------          -------
          Total noninterest income                    3,976            4,960            7,071            7,567
                                                    -------          -------          -------          -------
NONINTEREST EXPENSES:
     Salaries and employee benefits                   4,353            4,009            8,623            8,268
     Occupancy expenses                               1,015              864            2,086            1,702
     Furniture and equipment expenses                 1,045              684            1,923            1,357
     Professional fees                                  434              630              732            1,262
     Advertising and public relations                   385              367              620              679
     Office expenses                                    342              297              736              676
     Telephone and communication                        364              289              679              535
     Merger expense                                   1,167              144            1,361              149
     Amortization of intangible assets                  792              393            1,587              786
     Other operating expense                          1,709            1,457            3,226            2,882
                                                    -------          -------          -------          -------
     Total noninterest expenses                      11,606            9,134           21,573           18,296
                                                    -------          -------          -------          -------
Net income before taxes                               7,178            8,964           14,574           15,219

Income tax expense                                    2,425            3,302            4,910            5,634
                                                    -------          -------          -------          -------
Net income                                          $ 4,753          $ 5,662          $ 9,664          $ 9,585
                                                    =======          =======          =======          =======
Basic income per share data:
     Net income                                     $  0.22          $  0.27          $  0.45          $  0.45
     Average shares outstanding                      21,521           21,251           21,498           21,247
Diluted income per share data:
     Net income                                     $  0.21          $  0.26          $  0.43          $  0.44
     Average common equivalent shares                22,258           21,919           22,275           21,859

Cash dividends declared per share                   $  0.09          $  0.06          $  0.17          $  0.11
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.




<PAGE>

                     TRIANGLE BANCORP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  IN THOUSANDS
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                             JUNE 30,  JUNE 30,
                                                                              1998       1997
                                                                             -------   -------
<S>                                                                          <C>       <C>    
Cash flows from operating activities:
         Net income                                                          $ 9,664   $ 9,585
Adjustments to reconcile net income to net cash provided by (used in)
  operations:
         Depreciation and amortization                                         3,130     1,304
         Accretion of discount on investment securities,
           net of amortization of premiums                                       870       448
         Provision for loan losses                                             2,006     1,569
         Gain on sale of investments                                            (471)     (493)
         Gain on trading securities                                               --      (492) 
         Gain on disposal of premises and equipment                               (4)      119
         Gain on branch divestiture                                               --    (2,000)
         Net change in trading securities                                         --   (10,657)
         Mortgage loans held for sale:
             Originations                                                         --      (948)
             Sales                                                                --     3,716
         (Benefit) for deferred taxes                                            (50)      (25)
         Change in other assets and liabilities:
             Interest receivable                                                (732)   (1,683)
             Other assets                                                      1,080    (1,363)
              Interest payable                                                (1,159)      458
             Other liabilities                                                (2,397)    1,198
         Net cash provided by operating activities                            11,937       736     
                                                                              ------    ------     
Cash flows from investing activities:
         Proceeds from maturities and principal paydowns of securities AFS    44,153    25,957
         Proceeds from maturities and principal paydowns of securities HTM    26,896    23,495
         Proceeds from sales of investment securities AFS                     29,760   112,558
         Purchases of investment securities AFS                              (39,651) (122,083)   
         Purchases of investment securities HTM                              (14,446)  (29,846)
         Net increase in loans made to customers                             (28,314) (101,975)    
         Capital expenditures, bank premises and equipment                    (2,925)   (1,210)    
         Proceeds from sale of premises and equipment                              4       329 
         Net cash disposed in divestiture                                       --     (10,287)
                                                                             -------   -------
         Net cash provided by (used in) investing activities                  15,477  (103,062)
                                                                             -------   -------
Cash flows from financing activities:
         Net increase in deposit accounts                                     36,478    50,821 
         Net decrease in short-term debt                                     (20,923)   18,998 
         Net increase (decrease) in FHLB advances                            (55,000)   23,000
         Proceeds from issuance of corporation obligated securities            --       19,950 
         Deferred debt issuance cost                                           --         (500)
         Repurchase of common stock                                             (846)   (1,374)
         Cash dividends paid                                                  (3,522)   (2,488)
         Cash issued for fractional shares                                       (20)            
         Shares issued under stock plans                                       1,493       716
                                                                             -------   -------
         Net cash provided by financing activities                           (42,340)  109,123
                                                                             -------   -------
         Net increase (decrease) in cash and cash equivalents                (14,926)    6,797

         Cash and cash equivalents at beginning of period                     81,408    49,805
                                                                             -------   -------
         Cash and cash equivalents at end of period                          $66,482   $56,602
                                                                             =======   =======
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements.


<PAGE>

                     TRIANGLE BANCORP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
            For the Three and Six Months Ended June 30, 1998 and 1997
                                   (Unaudited)


1.       Financial statement presentation and management representation

         The consolidated  financial statements include the accounts and results
         of  operations  of Triangle  Bancorp,  Inc.  and its four  wholly-owned
         subsidiaries,  Triangle Bank, Bank of Mecklenburg, Coastal Leasing LLC,
         and Triangle Capital Trust. All significant  intercompany  transactions
         and accounts are eliminated in consolidation.

         The interim  consolidated  financial  statements  as of and for the six
         months  ended June 30, 1998 and 1997 are  unaudited.  In the opinion of
         management,   the  consolidated   financial   statements   contain  all
         adjustments,  consisting of normal recurring adjustments,  necessary to
         present fairly, in all material  respects,  the consolidated  financial
         position  as of June 30, 1998 and 1997,  and the results of  operations
         and cash  flows for the  periods  ended  June 30,  1998 and  1997.  The
         results for the interim periods are not necessarily  indicative of what
         results will be for the year ended December 31, 1998.

2.       Reporting Comprehensive Income

         On January 1, 1998, the Company  adopted the provisions of Statement of
         Financial  Accounting  Standards  No.  130,  "Reporting   Comprehensive
         Income"  ("SFAS No.  130").  As required  by SFAS No.  130,  prior year
         information has been modified to conform with the new presentation.

         Comprehensive  income  includes  net  income  and  other  comprehensive
         income.  Other  comprehensive  income  includes all other changes to an
         entity's equity,  with the exception of transactions with shareholders.
         The Company's only component of other  comprehensive  income relates to
         unrealized gains and losses on available for sale securities.

         The  Company's  total  comprehensive  income for the six month  periods
         ended  June  30,  1998  and  1997  was   $7,007,000   and   $9,461,000,
         respectively.  Information concerning the Company's other comprehensive
         income for the six month  periods  ended  June 30,  1998 and 1997 is as
         follows:

                                                               (In thousands)
                                                               1998       1997
                                                             --------   --------
           Unrealized gains(losses) on available for sale
             securities                                      $(3,543)    $(291)

           Reclassification of gains recognized in 
             net income                                         (310)     (316)

           Income tax benefit relating to unrealized gains
             (losses) on available for sale securities         1,196       (99)
                                                             ---------  --------
           Other comprehensive income                        $(2,657)   $ (124)
                                                             =========  ========


<PAGE>

3.       Accounting for Derivative Instruments and Hedging Activities

         On June 15,  1998,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial  Accounting  Standards No. 133,  Accounting  for
         Derivative  Instruments  and Hedging  Activities  (FAS 133). FAS 133 is
         effective for all fiscal  quarters of all fiscal years  beginning after
         June 15, 1999 (January 1, 2000 for the Company).  FAS 133 requires that
         all  derivative  instruments  be recorded on the balance  sheet at fair
         value.  Changes  in the fair value of  derivatives  are  recorded  each
         period in current earnings or other comprehensive income,  depending on
         whether a derivative is designated as part of a hedge  transaction and,
         if it is, the type of hedge  transactions.  Management  of the  Company
         anticipates that, due to its limited use of derivative instruments, the
         adoption of FAS 133 will not have a significant effect on the Company's
         results of operations or its financial position.

4.       Stock Split

         On June 30, 1998,  the Company had a three for two stock split effected
         in  the  form  of a  50%  stock  dividend.  All  share  and  per  share
         information has been adjusted to reflect the stock split.


<PAGE>


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                  TRIANGLE BANCORP, INC.


Date: August 14, 1998                             /s/ Michael S. Patterson
                                                  ------------------------
                                                  Michael S. Patterson,
                                                  President and CEO


Date: August 14, 1998                             /s/ Debra L. Lee
                                                  -----------------------
                                                  Debra L. Lee,
                                                  Chief Financial Officer





<PAGE>


                             TRIANGLE BANCORP, INC.
                                  EXHIBIT TABLE



                                                                   PAGE

 (27)    Financial Data Schedule