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 March 31, 1999
[ ]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
(Address of principal executive offices)
53154
Zip Code
(414) 761-1610
(Registrant's telephone 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
March 31, 1999: 2,524,811
<PAGE>
FORM 10-Q
TRI CITY BANKSHARES CORPORATION
INDEX
PART I - FINANCIAL INFORMATION
Page #
Item 1 Financial Statements (Unaudited)
Consolidated Balance Sheets as of
March 31, 1999 and December 31, 1998 3
Consolidated Statements of Income
for the Three Months ended March 31, 1999
and 1998 4
Consolidated Statements of Cash Flows
for the Three Months ended March 31, 1999
and 1998 5
Notes to Unaudited Consolidated Financial
Statements 6
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
Item 3 Quantitative and Qualitative Disclosure
about Market Risk 16
PART II - OTHER INFORMATION
Item 6 17
Signatures 18
<PAGE>
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
ASSETS March 31, December 31,
1999 1998
------------- -------------
Cash and due from banks ..................... $ 34,756,556 $ 44,001,647
Federal funds sold .......................... 6,975,000 32,200,000
------------- -------------
Cash and cash equivalents ................... 41,731,556 76,201,647
Investment securities:
Held-to-maturity (fair
value of ...1999 - 154,658,083
1998 - 136,420,200) ........ 153,515,486 134,537,963
Loans ....................................... 278,400,507 277,184,364
Allowance for loan losses ................... (4,286,224) (4,244,745)
------------- -------------
Net Loans .............................. 274,114,283 272,939,619
Premises and equipment ................. 20,234,786 19,864,590
Other assets ........................... 8,079,705 6,708,412
------------- -------------
TOTAL ASSETS .................. $ 497,675,816 $ 510,252,231
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing ................... $ 121,160,103 $ 133,120,719
Interest bearing (over $100,000) ....... 30,249,000 28,247,266
Interest bearing ....................... 283,152,260 288,167,417
------------- -------------
Total Deposits ..................... 434,561,363 449,535,402
Short-term borrowings ....................... 1,160,753 827,355
Other Liabilities ........................... 2,438,592 1,371,614
------------- -------------
TOTAL LIABILITIES .................. 438,160,708 451,734,371
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:
1999 - 2,524,811 shares;
1998- 2,520,205 shares 2,524,811 2,520,205
Additional paid in capital .................. 9,876,691 9,726,974
Retained earnings ........................... 47,113,606 46,270,681
------------- -------------
TOTAL STOCKHOLDERS' EQUITY ......... 59,515,108 58,517,860
------------- -------------
$ 497,675,816 $ 510,252,231
------------- -------------
See Notes to Unaudited Consolidated Financial Statements.
<PAGE>
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
1999 1998
----------- -----------
Interest income:
Loans, including fees .......................... $ 6,148,030 $ 6,348,450
Investment securities:
Taxable ..................................... 967,013 826,035
Exempt from federal income tax ............... 894,141 840,002
Federal funds sold ............................. 145,010 37,361
----------- -----------
TOTAL INTEREST INCOME ............... 8,154,194 8,051,848
Interest expense:
Deposits ....................................... 2,614,343 2,600,585
Short-term borrowings .......................... 21,813 112,424
----------- -----------
TOTAL INTEREST EXPENSE ............. 2,636,156 2,713,009
----------- -----------
NET INTEREST INCOME ................. 5,518,038 5,338,839
Provision for loan losses ........................ (75,000) (150,000)
----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ........... 5,443,038 5,188,839
Other income:
Service charge income .......................... 769,283 828,164
Rental income .................................. 245,561 237,400
Other .......................................... 595,200 603,889
----------- -----------
TOTAL OTHER INCOME .................. 1,610,044 1,669,453
Other expense:
Salaries and employee benefits ................. 2,711,363 2,723,342
Net occupancy .................................. 682,806 636,712
Equipment ...................................... 365,303 330,304
Data processing ................................ 247,461 144,808
Advertising .................................... 123,300 105,765
Regulatory agency assessments .................. 40,163 37,349
Office supplies ................................ 159,439 136,244
Other .......................................... 682,252 636,163
----------- -----------
TOTAL OTHER EXPENSE ................. 5,012,087 4,750,687
----------- -----------
Income before income taxes ....................... 2,040,995 2,107,605
Provision for income taxes ....................... 442,000 511,300
----------- -----------
NET INCOME .......................... $ 1,598,995 $ 1,596,305
----------- -----------
Per share data:
Net income ................................... $ 0.63 $ 0.64
Common stock investment ...................... $ 23.58 $ 21.80
Dividends .................................... $ 0.30 $ 0.25
Average shares outstanding ................... 2,523,686 2,506,515
See Notes to Unaudited Consolidated Financial Statements.
<PAGE>
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
1999 1998
------------ ------------
OPERATING ACTIVITIES
Net income .................................. $ 1,598,995 $ 1,596,305
Adjustments to reconcile net income to
net cash provided by operating activities:
Proceeds from sale of loans
held for sale ....................... 6,984,590 5,389,806
Origination of loans held
for sale ............................ (6,984,590) (5,389,806)
Amortization of investment
securities premiums and accretion
of discounts ........................ 33,427 31,985
Provision for loan losses ............. 75,000 150,000
Provision for depreciation ............ 477,941 437,725
Decrease in interest receivable ....... (467,224) (584,999)
Increase (decrease) in interest payable (59,476) 557,232
Other ................................. 222,385 287,122
------------ ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES ............. 1,881,048 2,475,370
INVESTING ACTIVITIES
Proceeds from maturities and redemptions
of investment securities ................. 6,968,850 11,401,955
Purchase of investment securities ........... (27,014,533) 0
Net increase in loans ....................... (214,931) (3,695,397)
Purchases of premises and equipment ......... (848,137) (362,269)
------------ ------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES .......... (21,108,751) 7,344,289
FINANCING ACTIVITIES
Net decrease in deposits .................... (14,974,039) (8,351,401)
Net increase (decrease) in short-term
borrowings ............................... 333,398 (3,848,895)
Sale of Common Stock ........................ 154,323 137,517
Cash dividends .............................. (756,070) (625,780)
------------ ------------
NET CASH USED BY
FINANCING ACTIVITIES ............. (15,242,388) (12,688,559)
------------ ------------
DECREASE IN CASH
AND CASH EQUIVALENTS ............. (34,470,091) (2,868,900)
Cash and cash equivalents at the
beginning of the period .................. 76,201,647 44,707,888
------------ ------------
CASH AND CASH EQUIVALENTS
AT THE END OF THE PERIOD ......... $ 41,731,556 $ 41,838,988
------------ ------------
See Notes to Unaudited Consolidated Financial Statements.
<PAGE>
TRI CITY BANKSHARES CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(A) Basis of Presentation
The accompanying audited 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 included in the Annual Report on Form
10-K of Tri City Bankshares Corporation ("Tri City") for the year ended December
31, 1998. The December 31, 1998 financial information included herein is derived
from the December 31, 1998 Consolidated Balance Sheet of Tri City which is
included 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 March 31, 1999 and the
results of its operations and cash flows for the three month periods ended March
31, 1999 and 1998. The operating results for the first three months of 1999 are
not necessarily indicative of the results which may be expected for the entire
1999 fiscal year.
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 or 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
Total assets of Tri City Bankshares Corporation (the "Corporation") decreased
$12.6 million(2.5%) during the first three months of 1999 compared to a decrease
of $10.2 million(2.2%) during the first three months of 1998. This decrease
reflects the normal pay out of funds to cover customer checks which were used to
pay property and income taxes from the previous year end.
Cash and cash equivalents decreased $34.5 million(45.2%) during the first three
months of 1999 compared to a decrease of $2.9 million(6.4%) in the first three
months of 1998. Funds were placed into investment securities and loans, and were
used to cover the loss in deposits. Investment securities increased $19.0
million(14.1%) in the first quarter of 1999 compared to a decrease of $11.4
million(9.3%) during the same period in 1998. Management placed excess funds
into investment securities so that the Corporation could achieve a better return
on its money than leaving it in Federal funds sold. The yield on investment
securities has remained the same, however they are averaging better than the
rate paid on Federal funds sold. Loans increased $1.2 million(0.4%) during the
first quarter of 1999 compared to an increase of $3.7 million(1.4%) in the first
quarter of 1998. While loan demand has remained steady, management has been
cautious and tries to maintain a quality loan portfolio which will continue to
produce a steady income with minimum exposure to non-performing loans. The loan
review committee for the Corporation continues to review loans for
collectibility. Since the quality of the loan portfolio has been maintained and
actual charge-offs were less than expected for the quarter, management has felt
that the Corporation can reduce its provision for loan loss in 1999 and still
maintain an adequate reserve to cover any losses associated with existing or
future loans. The allowance for loan losses has increased $41,500(1.0%) in 1999
compared to an increase of $159,000(4.6%) during the first quarter of 1998.
Total deposits of the Corporation decreased $15.0 million(3.3%) during the first
quarter of 1999 compared to a decrease of $8.4 million(2.1%) during the same
period in 1998. Since interest rates have remained low, customers appear to be
shopping for investments which will give them a higher rate of return even
though the risk may be higher. Since the Corporation has been fortunate to
maintain a good liquidity position, it has not needed to borrow funds in the
federal funds market.
Due to the continued interest in the Corporation's dividend reinvestment
program, the Corporation's equity has grown and helped to provide a sound base
for future investment in property and fixed assets.
LIQUIDITY
Historically the Corporation's liquidity position has been very favorable.
Management continues to monitor the maturity distribution between interest
earning assets and interest bearing liabilities. Fluctuations in interest rates
can be the main cause for the flow of funds into or out of a financial
institution. Since interest rates have remained low, it is important to track
the maturity of loans and investments and match them to the maturity terms of
new time deposits. A sudden rapid rise in rates could trigger a flow of funds
into higher yielding investments which may be offered outside of the
Corporation. Management strives to offer products which are competitive or
better within the banking community in order to retain these deposits.
CAPITAL RESOURCES
During the first quarter of 1999, the Corporation has completed construction of
a new facility to house its growing operations center. The cost of this project
was $2.2 million and was funded by available cash. This facility will enable the
Corporation to provide better service to its banking customers as well as
provide enough room for future expansion. The Oak Creek location of the banking
subsidiary has also been remodeled to enhance its appearance and provide better
service to its customers.
A new banking location in the town of Sturtevant, Wisconsin is also under
construction and should help to service the Corporation's customers in the
Racine county area of Wisconsin which is located south of Milwaukee. The cost of
this project is considered minimal and will be borne by the Corporation's
banking subsidiary.
There are no other major projects scheduled at present, however management is
continually looking for new ways to better serve the Corporation's customers and
expand its operations.
RESULTS OF OPERATIONS
During the first quarter of 1999 net income increased $3,000(0.2%) compared to
an increase of $90,000(6.0%) in the first three months of 1998. Considering that
new equipment was purchased and the Corporation converted to a new data
processing system at the end of 1998, management was pleased with the
Corporation's performance during the first three months of 1999.
Interest income and fees on loans decreased $200,000(3.2%) during the first
quarter of 1999 compared to an increase of $245,000(4.0%) during the first
quarter of 1998. Management strives to build a loan portfolio which has a very
low percentage of non-performing loans. The loan review committee has been very
conservative in its approach to making new loans. This has helped to make the
portfolio more stable with less than 0.5% of loans classified as non-performing;
however, loan growth for the quarter was nominal due to general economic
conditions and competition.
Investment security interest income increased $195,100(11.7%) in the first three
months of 1999 compared to a decrease of $112,700(6.3%) during the same period
in 1998. Management continues to invest excess funds from increased deposits
into instruments which will generate a higher yield than that achieved selling
these funds in the Federal funds market. They continue to look for areas which
will help the Corporation achieve growth in income and assets without subjecting
the Corporation to undo risk. This increase can be attributed to both an
increase in volume as well as rate changes during the year. Interest income on
Federal funds sold increased $107,600 during the first quarter of 1999 compared
to an increase of $36,600 during the first quarter of 1998. This is a short term
investment until these funds can be used for loans or higher yielding investment
securities.
Interest expense on deposits increased $13,800(0.5%) in the first three months
of 1999 compared to an increase of $117,400(4.7%) during the first quarter of
1998. Although deposit balances increased, rates remained low and time deposits
that matured were renewed at a lower rate. Interest on short term borrowings
decreased $90,600(80.6%) in the first quarter of 1999 compared to a decrease of
$63,700(36.2%) in the first quarter of 1998. The provision for loan loss also
decreased since management feels that the allowance for loan loss is adequate to
absorb any losses attributed to the loan portfolio.
Other income decreased $59,400(3.6%) during the first quarter of 1999 compared
to an increase of $273,000(19.6%) during the first quarter of 1998.
Other expenses increased $261,400(5.5%) in the first three months of 1999
compared to an increase of $326,000(7.4%) during the first three months of 1998.
The primary areas of increase include occupancy and equipment expense due to the
addition of plant and equipment; and data processing expense which is due to the
conversion to a new system processing provider.
Non-Performing Loans
March 31, December 31,
1999 1998
------ ------
(000's)
Loans accounted for on a nonaccrual basis ... $ 89 $ 334
Loans contractually past due 90 days or
More as to interest or principal payments ... 4,428 1,848
Ratio of nonaccrual loans to total loans .... 1.62% .12%
<PAGE>
A summarized change in income for the quarters appears below :
Three Months Ended March 31, March 31, 1999
1999 1998 Over(Under)
(Unaudited) (Unaudited) 1998
----------- ----------- -----------
Revenue and Expenses:(000's)
Interest Income $ 8,154 $ 8,052 $ 102
Less: Interest Expense 2,636 2,713 (77)
----------- ----------- -----------
Net Interest Income 5,518 5,339 179
Provision for Loan Loss 75 150 (75)
Other Operating Expense
Net of Other Operating
Revenues 3,402 3,082 320
----------- ----------- -----------
Income Before Income Taxes 2,041 2,107 (66)
Tax Provision 442 511 (69)
----------- ----------- -----------
NET INCOME $ 1,599 $ 1,596 $ 3
=========== =========== ===========
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%.
The risk-based capital ratio for the Corporation is 20.48% and its leverage
ratio is 12.20%.
YEAR 2000 PROBLEM
At midnight on December 31, 1999, unless the proper modifications have been
made, the program logic in many computer systems may produce erroneous results
because, among other things, the systems will incorrectly read the date
"01/01/00" as being January 1 of the year 1900 or another incorrect date. In
addition, certain systems may fail to detect that the year 2000 is a leap year.
Problems can also arise earlier than January 1, 2000 as dates in the next
millennium are entered into non-Year 2000 compliant programs. Like most
financial service providers, the Corporation may be significantly affected by
the Year 2000 Problem due to the nature of financial information.
COMPLIANCE PROGRAM
In order to address the Year 2000 Problem and to minimize its potential adverse
impact, in 1997 the Corporation initiated a corporate-wide project to address
the impact of the Year 2000 Problem on its computer application systems,
information technology (IT) related equipment, system software, building
controls, and non-IT embedded systems found in such equipment as security
systems, currency counters, and elevators. The evaluation of Year 2000 issues
included an assessment of the potential impact of the Year 2000 Problem on the
Corporation including monitoring significant customers, service suppliers and
other parties material to the Corporation's operations; testing changes provided
by these suppliers; and developing contingency plans for any critical systems
that are not effectively reprogrammed. In the course of this evaluation, the
Corporation has sought written assurances from such third parties as to their
state of Year 2000 readiness. The Corporation's Year 2000 Compliance Program is
divided into five phases: (1) awareness; (2) assessment; (3) renovation; (4)
validation; and (5) implementation.
THE CORPORATION'S STATE OF READINESS
Work on the Year 2000 project has been prioritized in accordance with risk. The
highest priority has been assigned to activities that would disrupt the accuracy
and delivery of the Corporation's banking services to its customers. Next is an
assessment of the potential credit risk to the Corporation resulting from its
credit customers' state of Year 2000 readiness, or lack thereof, and the
potential impact of those efforts on the customers' ability to meet contractual
payment obligations. The lowest priority has been assigned to activities that
would cause inconvenience or productivity loss in normal business operations
such as issues related to internal office machinery, heating and air
conditioning systems and elevators.
The Corporation has substantially completed all phases of the plan. Because the
Corporation outsources its data processing, a significant component of the Year
2000 Compliance Program is working with external vendors to test and certify
that their systems are Year 2000 compliant. During the week of November 16,
1998, the Corporation converted to a new primary Data Service provider, which
has completed successfully remediation and 2000 proxy testing. The Corporation
is performing a variety of tests to determine the proper functionality of the
new platform and monitoring the proxy testing performed by the primary Data
Service provider. The Corporation's other external vendors have surveyed their
programs to inventory the necessary changes and have substantially corrected the
applicable computer programs and replaced equipment so that the Corporation's
information systems will be Year 2000 compliant prior to June 30, 1999. This
will enable the Corporation to devote substantial time to the testing of the
upgraded systems prior to the arrival of the new millennium. The Corporation has
a final mission critical system (item processing) to be replaced. The system is
installed and running parallel to existing equipment to allow complete testing.
The Corporation has also conducted an evaluation of its significant credit
customers to determine their state of Year 2000 readiness. Evaluations were
completed for all customers whose outstanding loan balance or loan commitment
exceeded $250,000. In addition, as part of its ongoing credit underwriting
practices, all new and renewed loans must have a Year 2000 risk assessment
completed and reported as part of the loan approval process. Based upon the
information received from these surveys, the Corporation does not expect to
experience any material collection problems resulting from its customers' Year
2000 readiness or lack thereof.
COST TO ADDRESS YEAR 2000 ISSUES
Managing the Year 2000 Project will result in additional direct and indirect
costs to the Corporation. Based upon current internal studies, as well as
recently solicited bids from various computer hardware and software vendors, the
Corporation estimates the total direct cost of remediating the issues discovered
in its assessment of the Year 2000 problem to be $600,000 and $800,000. During
the review of the Corporation's operation, a decision was made to upgrade
hardware and much of the Corporation's dated technology which had been in use
for 8 - 12 years. The upgrades are expected to result in greater employee
efficiencies and enhanced products for the Corporation's customers. The total
costs of upgrades will be $2.0 to $2.2 million. To date, the Corporation has
expended $2.0 million. The majority of the remaining costs related to resolving
the Year 2000 Problem are expected to be expended in 1999. The Corporation
expects to fund these expenditures through internal sources.
The estimated costs of, and timetable for, becoming Year 2000 compliant
constitute "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such estimates are
based on numerous assumptions by management, including assumptions regarding the
continued availability of certain resources, the accuracy of representations
made by third parties concerning their compliance with Year 2000 issues, and
other factors.
RISK OF NONCOMPLIANCE AND CONTINGENCY PLANS
The major applications which pose the greatest Year 2000 risks to the
Corporation if the Year 2000 implementation of the Year 2000 Project is not
successful, are the Corporation's data services systems supported by third-party
vendors, loan customers' ability to meet contractual payment obligations in the
event the Year 2000 Problem has a significant negative impact to their business,
internal computer networks, and item processing equipment which renders
customers' bank statements and banking transactions. The potential problems
which could result from the inability of these applications to correctly process
the Year 2000 are the inaccurate calculation of interest income and expense,
service delivery interruptions to the Corporation's banking customers, credit
losses resulting from the Corporation's loan customers' inability to make
contractual credit obligations, interrupted financial data gathering, and poor
customer relations resulting from inaccurate or delayed transaction processing,
respectively.
Although the Corporation intends to complete substantially all Year 2000
remediation and testing activities by June 30, 1999, and although the
Corporation has initiated Year 2000 communications with significant customers,
key vendors, service providers, and other parties material to the Corporation's
operations and is diligently monitoring the progress of such third parties in
their Year 2000 compliance, such third parties nonetheless represent a risk that
cannot be assessed with precision or controlled with certainty. For that reason,
the Corporation intends to develop contingency plans to address alternatives in
the event that Year 2000 failures of automatic systems and equipment occur.
Preliminary discussions have been held regarding the contingency plan and a
final contingency plan is scheduled to be completed by the end of the second
quarter of 1999.
QUANTITATIVE AND QUALTATIVE DISCLOSURES ABOUT MARKET RISK
The Corporation's Annual Report on Form 10-K for the year ended December 31,
1998, contains certain disclosures about market risks affecting the Corporation.
There have been no material changes to the information provided which would
require additional disclosures as of the date of this filing.
<PAGE>
PART II - OTHER INFORMATION
Item 1 Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K
None
<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: May 12, 1999 /s/Henry Karbiner, Jr.
----------------------------- --------------------------------
Henry Karbiner, Jr.
President,Chief Executive Officer
and Treasurer
DATE: May 12, 1999 /s/Thomas W. Vierthaler
---------------------------- -------------------------------
Thomas W. Vierthaler
Vice President and Comptroller
(Chief Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000313337
<NAME> TRI CITY BANKSHARES CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 34,757
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,975
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 153,515
<INVESTMENTS-MARKET> 154,658
<LOANS> 278,401
<ALLOWANCE> 4,286
<TOTAL-ASSETS> 497,676
<DEPOSITS> 434,561
<SHORT-TERM> 1,161
<LIABILITIES-OTHER> 2,438
<LONG-TERM> 0
0
0
<COMMON> 2,525
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 497,676
<INTEREST-LOAN> 6,148
<INTEREST-INVEST> 1,861
<INTEREST-OTHER> 145
<INTEREST-TOTAL> 8,154
<INTEREST-DEPOSIT> 2,614
<INTEREST-EXPENSE> 2,636
<INTEREST-INCOME-NET> 5,518
<LOAN-LOSSES> 75
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,012
<INCOME-PRETAX> 2,041
<INCOME-PRE-EXTRAORDINARY> 1,599
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,599
<EPS-PRIMARY> 0.63
<EPS-DILUTED> 0.63
<YIELD-ACTUAL> 5.11
<LOANS-NON> 89
<LOANS-PAST> 4,428
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,245
<CHARGE-OFFS> 46
<RECOVERIES> 12
<ALLOWANCE-CLOSE> 4,286
<ALLOWANCE-DOMESTIC> 4,286
<ALLOWANCE-FOREIGN> 0
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</TABLE>
