FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-9785
TRI CITY BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1158740
----------------------------- ----------------------
(State or other jurisdiction of (IRS Employer ID Number)
incorporation or organization)
6400 S. 27th Street, Oak Creek, WI 53154
------------------------------------------
(Address of principal executive offices)
(414) 761-1610
--------------------
(Registrant's phone number, including area code)
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
-----
The number of shares outstanding of $1.00 par value common stock, as of
June 30, 1997: 2,495,239
<PAGE>
FORM 10-Q
TRI CITY BANKSHARES CORPORATION
INDEX
PART I - FINANCIAL INFORMATION
Page #
Item 1 Financial Statements (Unaudited)
Consolidated Balance Sheets as of
June 30, 1997 and December 31, 1996 3
Consolidated Statements of Income
for the Three Months ended June 30,
1997 and 1996 4
Consolidated Statements of Income
for the Six Months ended June 30,
1997 and 1996 5
Consolidated Statements of Cash Flows
for the Six Months ended June 30, 1997
and 1996 6
Notes to Unaudited Consolidated Financial
Statements 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II - OTHER INFORMATION
Items 1 - 6 16
Signatures 20
2
<PAGE>
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
ASSETS June 30, December 31,
1997 1996
------------- -------------
Cash and due from banks $ 34,976,502 $ 35,507,815
Federal funds sold 5,375,000 0
------------- -------------
Cash and cash equivalents 40,351,502 35,507,815
Investment securities:
Available-for-sale (at fair value) 9,927,688 10,100,875
Held-to-maturity (fair value of
1997 - 105,581,113
1996 - 115,264,736) 106,657,301 115,374,235
Loans 261,582,305 253,752,225
Allowance for loan losses (3,294,163) (3,010,230)
------------- -------------
NET LOANS 258,298,142 250,741,995
Premises and equipment 18,533,505 18,918,098
Other assets 5,941,004 6,013,142
------------- -------------
$ 439,699,142 $ 436,656,160
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 111,527,047 $ 103,807,536
Interest bearing (over $100,000) 25,756,000 22,037,030
Interest bearing 244,754,350 255,169,111
------------- -------------
TOTAL DEPOSITS 382,037,397 381,013,677
Short-term borrowings:
Federal funds purchased
and securities sold under
agreements to repurchase 0 3,200,000
Other 5,244,910 2,199,957
------------- -------------
5,244,910 5,399,957
Other Liabilities 1,522,463 1,530,864
------------- -------------
TOTAL LIABILITIES 388,804,770 387,944,498
Stockholders' equity:
Cumulative preferred stock,
par value-$1 per share
authorized - 200,000 shares
issued and outstanding-none
Common stock, par value-$1
per share authorized-5,000,000
shares Issued and outstanding:
1997 - 2,495,239 shares;
1996 - 2,486,098 2,495,239 2,486,098
Additional paid in capital 8,990,580 8,750,861
Retained earnings 39,470,912 37,437,024
Net unrealized gains (losses) on
investment securities
available-for-sale (62,359) 37,679
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 50,894,372 48,711,662
------------- -------------
$ 439,699,142 $ 436,656,160
============= =============
See Notes to Unaudited Consolidated Financial Statements.
3
<PAGE>
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
1997 1996
------------- -------------
Interest income:
Loans, including fees $ 6,225,592 $ 5,638,531
Investment securities:
Taxable 1,079,038 1,056,745
Exempt from federal income tax 696,925 607,289
Federal funds sold 6,736 175,782
------------- -------------
TOTAL INTEREST INCOME 8,008,291 7,478,347
Interest expense:
Deposits 2,523,668 2,675,422
Short-term borrowings 121,618 15,283
------------- -------------
TOTAL INTEREST EXPENSE 2,645,286 2,690,705
------------- -------------
NET INTEREST INCOME 5,363,005 4,787,642
Provision for loan losses (150,000) (75,000)
------------- -------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,213,005 4,712,642
Other income:
Service charge income 883,513 842,634
Rental income 217,322 204,387
Other 452,792 395,760
------------- -------------
TOTAL OTHER INCOME 1,553,627 1,442,781
Other expense:
Salaries and employee benefits 2,520,037 2,299,493
Net occupancy 632,831 612,428
Equipment 303,633 301,136
Data processing 167,823 136,653
Advertising 115,436 118,852
Regulatory Agency Assessments 39,148 24,819
Office Supplies 117,599 136,163
Other 687,475 737,516
------------- -------------
TOTAL OTHER EXPENSE 4,583,982 4,367,060
------------- -------------
Income before income taxes 2,182,650 1,788,363
Provision for income taxes 597,700 462,350
------------- -------------
NET INCOME $ 1,584,950 $ 1,326,013
Per share data:
Net income $ 0.64 $ 0.54
Average shares outstanding 2,493,849 2,477,376
See Notes to Unaudited Consolidated Financial Statements.
4
<PAGE>
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
1997 1996
------------- -------------
Interest income:
Loans, including fees $ 12,328,624 $ 11,206,697
Investment securities:
Taxable 2,227,686 2,115,966
Exempt from federal income tax 1,326,973 1,144,695
Federal funds sold 7,525 293,649
------------- -------------
TOTAL INTEREST INCOME 15,890,808 14,761,007
Interest expense:
Deposits 5,006,825 5,265,061
Short-term borrowings 297,750 43,774
------------- ------------
TOTAL INTEREST EXPENSE 5,304,575 5,308,835
------------- ------------
NET INTEREST INCOME 10,586,233 9,452,172
Provision for loan losses (300,000) (150,000)
------------- ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 10,286,233 9,302,172
Other income:
Service charge income 1,677,501 1,663,595
Rental income 436,077 434,220
Other 836,333 760,407
------------- -------------
TOTAL OTHER INCOME 2,949,911 2,858,222
Other expense:
Salaries and employee benefits 5,012,074 4,585,114
Net occupancy 1,292,698 1,280,874
Equipment 624,566 620,956
Data processing 310,563 275,664
Advertising 226,283 211,431
Regulatory Agency Assessments 72,415 48,127
Office Supplies 252,348 267,084
Other 1,217,641 1,386,815
------------- -------------
TOTAL OTHER EXPENSE 9,008,588 8,676,065
------------- -------------
Income before income taxes 4,227,556 3,484,329
Provision for income taxes 1,136,000 894,600
------------- -------------
NET INCOME $ 3,091,556 $ 2,589,729
Per share data:
Net income $ 1.24 $ 1.05
Common stock investment $ 20.42 $ 18.62
Dividends $ 0.425 $ 0.350
Average shares outstanding 2,491,896 2,475,534
See Notes to Unaudited Consolidated Financial Statements.
5
<PAGE>
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
1997 1996
------------- -------------
OPERATING ACTIVITIES
Net income $ 3,091,556 $ 2,589,729
Adjustments to reconcile net
income to net cash provided
by operating activities:
Proceeds from sale of loans
held for sale 3,093,017 3,409,463
Origination of loans held
for sale (3,093,017) (3,409,463)
Amortization of investment
securities premiums and
accretion of discounts 94,151 145,414
Provision for loan losses 300,000 150,000
Provision for depreciation 828,714 796,187
Increase (decrease) in
interest receivable 51,373 (362,121)
Increase in interest payable 50,297 88,918
Other 16,566 (148,344)
------------- -------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 4,432,657 3,259,783
INVESTING ACTIVITIES
Available for Sale:
Proceeds from maturities and
redemptions of investment
securities 0 2,500,000
Held to Maturity:
Proceeds from maturities and
redemptions of investment
securities 9,991,432 16,297,884
Purchase of investment securities (1,350,000) (30,341,691)
Net increase in loans (7,846,147) (6,366,824)
Purchases of premises and equipment (444,121) (559,941)
------------- -------------
NET CASH USED BY INVESTING
ACTIVITIES 351,164 (18,470,572)
FINANCING ACTIVITIES
Sale of Common Stock 248,860 196,311
Net increase in deposits 1,023,720 17,512,380
Net (decrease) increase in
short-term borrowings (155,047) 1,141,808
Cash dividends (1,057,667) (865,188)
------------- -------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 59,866 17,985,311
------------- -------------
INCREASE IN CASH AND
CASH EQUIVALENTS 4,843,687 2,774,522
Cash and cash equivalents at the
beginning of the period 35,507,815 34,725,066
------------- -------------
CASH AND CASH EQUIVALENTS AT
THE END OF THE PERIOD $ 40,351,502 $ 37,499,588
============= =============
See Notes to Unaudited Consolidated Financial Statements.
6
<PAGE>
TRI CITY BANKSHARES CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(A) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. These financial statements
should be read in conjunction with the financial statements and the notes
thereto incorporated by reference in the Annual Report on Form 10-K of Tri
City Bankshares Corporation ("Tri City") for the year ended December 31,
1996. The December 31, 1996 financial information included herein is
derived from the December 31, 1996 Consolidated Balance Sheet of Tri City
which is incorporated by reference in the aforesaid Annual Report on Form
10-K. In the opinion of Tri City's management, the accompanying unaudited
consolidated financial statements contain all adjustments consisting of
normal recurring accruals, necessary to present fairly Tri City's financial
position as of June 30, 1997 and the results of its operations and cash
flows for the three month and six month periods ended June 30, 1997 and
1996. The operating results for the first six months of 1997 are not
necessarily indicative of the results which may be expected for the entire
1997 fiscal year.
7
<PAGE>
(B) EARNINGS PER SHARE
In February, 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share" (Statement 128), which is required to be
adopted on December 31, 1997. Statement 128 may not be adopted early.
Statement 128 modifies the calculation of earnings per share for companies
with common stock equivalents such as stock options and other potentially
dilutive securities. As Tri City does not have any common stock equivalents
or other potentially dilutive securities outstanding, the adoption of
Statement 128 is not expected to be material.
8
<PAGE>
TRI CITY BANKSHARES CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
The following discussion contains certain "forward-looking statements,"
including statements concerning objectives and future events of performance, and
other statements which are other than historical fact. Factors which may cause
actual results to differ materially from those contemplated by such forward-
looking statements include, but are not limited to, the following possibilities:
(i) lower than anticipated loan and deposit growth due to a variety of factors,
including changes in the interest rate environment and an increase in
competitive pressures in the banking and financial services industry; (ii)
insufficient reserves for loan losses; (iii) poorer than expected general
economic conditions; (iv) legislation or regulatory changes which adversely
affect the banking industry; and (v) other unanticipated occurrences.
CHANGES IN FINANCIAL POSITION
Net assets of Tri City Bankshares Corporation (the "Corporation" ) increased
$3.0 million (0.7%) during the first six months of 1997 compared to an increase
of $20.4 million (5.1%) during the first six months of 1996. The Corporation
was able to attract additional deposits to replace matured time deposits and
place these funds into loans rather than purchase investment securities. The
demand for loans has increased during 1997 and management can achieve a better
yield on loans than investment securities. Federal funds sold increased $5.4
million during the first half of 1997 compared to an increase of $7.0 million
9
<PAGE>
during the first half of 1996. Management will invest in Federal funds for the
short term until investments (Securities or Loans) can provide an attractive
yield while not jeopardizing the Corporation's portfolios can be found.
Investment securities decreased $8.7 million (7.6%) during the first six months
of 1997 compared to an increase of $10.7 million (9.7%) during the first six
months of 1996, because management has not found investment securities which can
provide a yield which is comparable or better than the yield attained on loans,
as a result, management has channeled funds into the loan portfolio. During the
first six months of 1997 loans have increased $7.8 million (3.1%) compared to an
increase of 6.7 million (2.9%) during the first six months of 1996. Management
has set high standards for its review of loans. This approach has limited the
growth of the loan portfolio, but has also helped to keep the Corporation's
ratio of non-performing loans to total loans at 0.28% as of June 30, 1997. The
reserve for loans was reduced at the end of 1996 by the charge-off of a non-
performing loan deemed to be uncollectible. Management has thus increased the
provision for loan losses during 1997 in order to build the reserve and maintain
it at approximately 1.25% of total loans.
There has been no expansion or major remodeling to premises and equipment during
1997, and none are planned for the remaining of the year. The decrease in
premises and equipment can be attributed to depreciation expense on existing
buildings and equipment. There have been no unusual changes in other assets.
10
<PAGE>
Deposits during the first half of 1997 increased $1.0 million (0.3%) compared to
an increase of $17.5 million (5.0%) during the first half of 1996. Interest
bearing deposits declined $6.7 million, while non-interest bearing deposits
increased by $7.7 million during the first six months of 1997. The Corporation
is trying to be competitive and offer comparable rates to depositors.
Stockholder's equity has increased $2.2 million (4.5%) for the first six months
of 1997 compared to an increase of $1.8 million (4.0%) in the first six months
of 1996. This continued strong growth has strengthened the Corporation and also
persuaded the Board of Directors to again increase the quarterly dividend from
$0.175 per share in 1996 to $0.2125 per share in 1997.
LIQUIDITY
Management of the Corporation has strived to maintain a strong liquidity
position through monitoring the correlation between interest earning assets and
interest bearing liabilities. Fluctuations in interest rates can be the main
cause for the flow of funds either into or out of a financial institution. As
interest rates rise, depositors seek increased yield's and thus deposits may
increase, while as rates decrease the demand for loans often increases
substantially. Management has been diligent in maintaining a low borrowing
position for the Corporation so that as these fluctuations occur, the
Corporation can respond more readily to these changes.
11
<PAGE>
CAPITAL RESOURCES
On January 19, 1997, a new banking facility was opened inside a Pick'n Save food
store located at Clarke Square on the near south side of Milwaukee, Wisconsin.
The cost of this facility was considered nominal and borne by the Corporation's
banking subsidiary. The Corporation expects this new banking branch to add to
the growth of the Corporation and help establish a banking subsidiary within the
inner boundaries of Milwaukee.
Currently, there are no additional plans for major capital expenditures for the
remainder of 1997. Management, however, will consider any opportunities which
may present themselves for the growth and profitability of the Corporation.
RESULTS OF OPERATIONS
The Corporation s net income for the quarter ended June 30, 1997 increased
$259,000 (19.5%) compared to an increase of $208,000 (18.6%) during the same
period in 1996. Since loan demand has increased, loan interest income and fees
on loans increased $587,000 (10.4%) in the second quarter of 1997 compared to an
increase of $334,000 (6.3%) in the second quarter of 1996. Management has made
an effort to increase the loan portfolio with sound loans which will increase
the Corporation s profitability without exposing it to undo risk.
Investment security interest income, excluding Federal Funds sold, increased
$112,000 (6.7%) for the second quarter of 1997 compared to an increase of
12
<PAGE>
$283,000 (20.5%) for the second quarter of 1996. Even though investment
security balances have declined for 1997, interest income on investment
securities has increased due to the higher yield attained on securities
purchased during the latter part of 1996. Interest income on federal funds sold
decreased $169,000 (96.2%) during the second quarter of 1997 compared to an
increase of $52,000 (41.9%) during the second quarter of 1996. The Corporation
was in a borrowed position for most of 1997 and did not have excess funds to
sell on the federal funds market until the end of the second quarter.
Interest expense on deposits has decreased $152,000 (5.7%) during the three
months ended June 30, 1997 compared to an increase of $365,000 (15.8%) during
the three months ended June 30, 1996. The movement of funds from time deposits
(high yield) to savings deposits (low yield) accounts for this decline in
deposit interest expense. Yields on savings accounts average 2.5% while the
yield on other time deposits (Certificates of Deposit) average approximately
5.5%. Interest expense on short term borrowings increased $106,000 (696.0%) in
the second quarter of 1997 compared to a decrease of $10,000 (40.2%) in the
second quarter of 1996. The Corporation was in a borrowed position for most of
1997 as stated earlier.
Total other income increased $111,000 (7.7%) during the second quarter of 1997
compared to an increase of $167,000 (13.1%) during the second quarter of 1996.
The primary increase came from service charge income and Automatic Teller
Machine (ATM) income. Total other expenses increased $217,000 (5.0%) in the
second quarter of 1997 compared to an increase of $195,000 (4.7%) in the second
quarter of 1996.
13
<PAGE>
A summarized change in income for the quarters appears below :
Three Months Ended June 30, June 30, 1997
1997 1996 Over(Under)
(Unaudited) (Unaudited) 1996
------------- ------------- -------------
Revenue and Expenses: (000 s)
Interest Income $ 8,008 $ 7,478 $ 530
Less: Interest Expense 2,645 2,691 ( 46)
------------- ------------- -------------
Net Interest Income 5,363 4,787 576
Provision for Loan Loss 150 75 75
Other Operating Expense
Net of Other Operating
Revenues 3,030 2,924 106
------------- ------------- -------------
Income Before
Income Taxes 2,183 1,788 395
Tax Provision 598 462 136
------------- ------------- -------------
NET INCOME $ 1,585 $ 1,326 $ 259
======= ======= =======
The Corporation s net income increased $502,000 (19.4%) during the first six
months of 1997 compared to an increase of $31,000 (1.2%) during the first six
months of 1996. This increase can be attributed primarily to interest income
and fees on new loans made during the first half of 1997.
Total interest income increased $1.1 million (7.7%) in the first six months of
1997 compared to an increase of $1.4 million (10.3%) in the first six months of
1996. Interest income on investment securities accounted for only $294,000 of
the total increase in the first six months of 1997, not including federal funds
sold. Total interest expense however, decreased $4,000 (0.01%) during the first
half of 1997 compared to an increase of $906,000 (20.6%) during the same period
in 1996. The switch of funds from certificates of deposits due to maturities,
to regular savings deposits accounts for this difference due to the lower yields
paid on savings deposits.
14
<PAGE>
Total other expense net of total other income increased $241,000 (4.1%) during
the first six months of 1997 compared to an increase of $569,000 (10.8%) during
the first six months of 1996. Management has been trying hard to keep expenses
in line in order to maximize income without having to initiate or raise fees on
services offered to the bank customer.
CAPITAL ADEQUACY
Federal banking regulatory agencies have established capital adequacy rules
which take into account risk attributable to balance sheet assets and off-
balance-sheet activities. All banks and bank holding companies must meet a
minimum risk-based capital ratio of 8.0% of which 4.0% must be comprised of tier
1 capital.
The federal banking agencies also have adopted leverage capital guidelines which
banking organizations must meet. Under these guidelines, the most highly rated
banking organizations must meet a minimum leverage ratio of at least 3.0% tier 1
capital to total assets, while lower rated banking organizations must maintain a
ratio of at least 4.0% to 5.0%.
As of June 30, 1997, the Corporation has attained a tier 1 capital ratio of
17.95%, a total risk-based capital ratio of 19.11% and a leverage ratio of
11.83%.
15
<PAGE>
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 2 Changes in Securities
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Security Holders
On June 11, 1997, Tri City Bankshares Corporation held its annual
stockholders meeting. The only item held for a vote of
stockholders was for the election of Directors for the ensuing
year. The number of shares of common stock represented by proxy
and in person was 2,116,836, which represented approximately 85.0%
of the total outstanding shares entitled to vote for directors.
There was no solicitation in opposition to management's nominees
for directors and all such nominees were elected pursuant to the
following vote:
Director's Name: Frank Bauer
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: Sanford Fedderly
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: William Gravitter
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
16
<PAGE>
Director's Name: Henry Karbiner, Jr.
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: Christ Krantz
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: Rudie Lauterbach
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: William McGovern
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: Robert Orth
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: Ronald K. Puetz
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
17
<PAGE>
Director's Name: John Rupcich
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: David Ulrich, Sr.
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: David Ulrich, Jr.
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: William Werry
For 2,113,565
Against 0
Withheld 3,271
Abstain 0
Broker Non-Vote 0
Director's Name: Scott A. Wilson
For 2,113,285
Against 0
Withheld 3,551
Abstain 0
Broker Non-Vote 0
No other matters were voted on at the annual meeting.
Item 5 Other Information
None
18
<PAGE>
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
(b) Form 8-K
Tri City did not file any reports on form 8-K during the three
month period ended June 30, 1997.
19
<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.
TRI CITY BANKSHARES CORPORATION
DATE: August 11, 1997 /s/Henry Karbiner, Jr.
-------------------- ------------------------------
Henry Karbiner, Jr.
Executive Vice President,
Secretary/Treasurer
DATE: August 11, 1997 /s/Thomas W. Vierthaler
-------------------- -----------------------------
Thomas W. Vierthaler
Vice President and Comptroller
(Chief Accounting Officer)
20
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000313337
<NAME> TRI CITY BANKSHARES CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 34,977
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,375
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,928
<INVESTMENTS-CARRYING> 105,850
<INVESTMENTS-MARKET> 105,581
<LOANS> 262,389
<ALLOWANCE> 3,294
<TOTAL-ASSETS> 439,699
<DEPOSITS> 382,037
<SHORT-TERM> 5,245
<LIABILITIES-OTHER> 1,522
<LONG-TERM> 0
0
0
<COMMON> 2,495
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 439,699
<INTEREST-LOAN> 12,329
<INTEREST-INVEST> 3,555
<INTEREST-OTHER> 7
<INTEREST-TOTAL> 15,891
<INTEREST-DEPOSIT> 5,007
<INTEREST-EXPENSE> 5,305
<INTEREST-INCOME-NET> 10,586
<LOAN-LOSSES> 300
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 9,009
<INCOME-PRETAX> 4,228
<INCOME-PRE-EXTRAORDINARY> 3,092
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,092
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.24
<YIELD-ACTUAL> 5.55
<LOANS-NON> 731
<LOANS-PAST> 772
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,010
<CHARGE-OFFS> 43
<RECOVERIES> 27
<ALLOWANCE-CLOSE> 3,294
<ALLOWANCE-DOMESTIC> 3,294
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
