UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2008
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 000-9785
TRI CITY BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-1158740
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
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
----- ----
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "large accelerated filer," "accelerated filer and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (check one):
Large accelerated filer Accelerated filer
----- -----
Non-accelerated filer Smaller reporting company X
(Do not check if a ----- -----
smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
YES ___ NO X
The number of shares outstanding of $1.00 par value common stock as of May 12,
2008: 8,904,915 shares.
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
The unaudited consolidated financial statements of Tri City Bankshares
Corporation are as follows:
Consolidated Balance Sheets as of
March 31, 2008 and December 31, 2007
Consolidated Statements of Income
for the Three Months Ended March 31, 2008
and 2007
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2008
and 2007
Notes to Unaudited Consolidated Financial
Statements
2
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
ASSETS
March 31,
2008 December 31,
(Unaudited) 2007
Cash and due from banks $ 32,339,207 $ 60,079,747
Federal funds sold 16,794,444 --
------------- -------------
Cash and cash equivalents 49,133,651 60,079,747
Held to maturity securities, fair value of $104,488,048 and
$111,160,170 as of 2008 and 2007, respectively 103,000,733 110,550,652
Loans, less allowance for loan losses of $5,770,811 and
$5,757,927 as of 2008 and 2007, respectively 576,406,188 580,520,538
Premises and equipment - net 20,430,813 20,053,314
Cash surrender value of life insurance 10,708,368 11,622,695
Mortgage servicing rights - net 648,231 658,717
Accrued interest receivable and other assets 6,519,850 6,541,335
------------- -------------
TOTAL ASSETS $ 766,847,834 $ 790,026,998
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits
Demand $ 126,523,927 $ 137,384,198
Savings and NOW 399,760,848 411,900,132
Other time 128,989,919 116,519,450
------------- -------------
Total Deposits 655,274,694 665,803,780
Federal funds purchased -- 12,851,264
Other borrowings 1,359,506 2,170,571
Accrued interest payable and other liabilities 2,330,708 2,434,058
------------- -------------
Total Liabilities 658,964,908 683,259,673
STOCKHOLDERS' EQUITY
Cumulative preferred stock, $1 par value, 200,000 shares
authorized, no shares issued -- --
Common stock, $1 par value,
15,000,000 shares authorized, 8,904,915 and
8,884,045 shares issued and outstanding as of 2008 and 2007,
respectively 8,904,915 8,884,045
Additional paid-in capital 26,543,470 26,160,505
Retained earnings 72,434,541 71,722,775
Total Stockholders' Equity 107,882,926 106,767,325
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 766,847,834 $ 790,026,998
============= =============
See notes to unaudited condensed consolidated financial statements.
3
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
For Three Months Ended March 31, 2008 and 2007
- --------------------------------------------------------------------------------
2008 2007
(Unaudited) (Unaudited)
----------- -----------
INTEREST INCOME
Loans $10,234,669 $ 9,460,447
Investment securities
Taxable 754,441 934,366
Exempt from federal income taxes 343,287 221,765
Federal funds sold 25,698 247,923
----------- -----------
Total Interest Income 11,358,095 10,864,50
----------- -----------
INTEREST EXPENSE
Deposits 2,927,635 3,096,600
Federal funds purchased 65,904 8,139
Other borrowings 7,711 17,196
----------- -----------
Total Interest Expense 3,001,250 3,121,935
----------- -----------
Net interest income before provision for loan losses 8,356,845 7,742,566
Provision for loan losses 185,000 60,000
----------- -----------
Net interest income after provision for loan losses 8,171,845 7,682,566
----------- -----------
NONINTEREST INCOME
Service charges on deposits 2,200,034 2,056,137
Loan servicing income 30,719 56,250
Net gain on sale of loans 119,341 36,424
Increase in cash surrender value of life insurance 125,242 113,281
Life insurance death benefit 606,584 --
Other 432,044 308,128
----------- -----------
Total Noninterest Income 3,513,964 2,570,220
----------- -----------
NONINTEREST EXPENSES
Salaries and employee benefits 4,269,088 3,887,961
Net occupancy costs 806,072 708,871
Furniture and equipment expenses 378,802 386,401
Computer services 625,294 560,419
Advertising and promotional 244,038 245,698
Regulatory agency assessments 61,540 53,307
Office supplies 158,458 187,174
Other 897,317 756,650
----------- -----------
Total Noninterest Expenses 7,440,609 6,786,481
----------- -----------
Income before income taxes 4,245,200 3,466,305
Less: Applicable income taxes 1,220,000 1,186,500
----------- -----------
NET INCOME $ 3,025,200 $ 2,279,805
=========== ===========
Basic earnings per share $ 0.34 $ 0.26
Dividends per share $ 0.26 $ 0.25
Weighted average shares outstanding 8,898,485 8,817,075
See notes to unaudited condensed consolidated financial statements.
4
TRI CITY BANKSHARES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Three Months Ended March 31, 2008 and 2007
- --------------------------------------------------------------------------------
2008 2007
(Unaudited) (Unaudited)
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 3,025,200 $ 2,279,805
Adjustments to reconcile net income to net cash flows provided by operating
activities:
Depreciation 527,580 526,299
Net amortization of servicing rights, premiums and discounts 102,104 66,170
Gain on sale of loans (119,341) (36,424)
Provision for loan losses 185,000 60,000
Proceeds from sales of loans held for sale 9,429,293 2,734,231
Originations of loans held for sale (9,380,304) (2,718,193)
Increase in cash surrender value of life insurance (125,243) (113,281)
Gain on life insurance death benefit (606,584) --
Net change in:
Accrued interest receivable and other assets 496,485 (234,426)
Accrued interest payable and other liabilities (103,350) 727,198
------------ ------------
Net Cash Flows Provided by Operating Activities 3,430,840 3,291,379
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Activity in held to maturity securities:
Maturities, prepayments and calls 47,016,958 10,435,084
Purchases (39,488,305) (5,858,848)
Net decrease in loans 3,454,350 3,433,022
Net purchases of premises and equipment (905,079) (482,559)
Proceeds of life insurance death benefit 1,646,154 --
------------ ------------
Net Cash Flows Provided by Investing Activities 11,724,078 7,526,699
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in deposits (10,529,086) (27,593,241)
Net decrease in federal funds purchased and securities sold under
repurchase agreements (12,851,264) --
Net decrease in other borrowings (811,065) (2,145,406)
Dividends paid (2,313,434) (2,200,459)
Common stock issued 403,835 408,904
------------ ------------
Net Cash Flows Used in Financing Activities (26,101,014) (31,530,202)
------------ ------------
Net Change in Cash and Cash Equivalents (10,946,096) (20,712,124)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 60,079,747 86,183,192
------------ ------------
$ 49,133,651 $ 65,471,068
============ ============
CASH AND CASH EQUIVALENTS - END OF PERIOD
Non Cash Transactions:
Loans Receivable Transferred to Other Real Estate Owned $ 475,000 $ --
Mortgage Servicing Rights Resulting from Sale of Loans $ 70,352 $ 20,386
Supplemental Cash Flow Disclosures:
Cash paid for interest $ 2,999,678 $ 3,115,374
Cash paid for income taxes $ 522,125 $ 418,600
See notes to unaudited condensed consolidated financial statements.
5
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 accounting principles generally accepted in the
United States of America 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 accounting
principles generally accepted in the United States of America for complete
financial statements. These financial statements should be read in conjunction
with the consolidated financial statements and the notes thereto included in the
Annual Report on Form 10-K of Tri City Bankshares Corporation ("Tri City" or the
"Corporation") for the year ended December 31, 2007. The December 31, 2007
financial information included herein is derived from the December 31, 2007
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 consolidated
financial position as of March 31, 2008 and the results of its operations and
cash flows for the three month periods ended March 31, 2008 and 2007. The
preparation of consolidated financial statements requires management to make
estimates and assumptions that affect the recorded amounts of assets and
liabilities and the reported amounts of revenues and expenses during the
reporting period. The operating results for the first three months of 2008 are
not necessarily indicative of the results which may be expected for the entire
2008 fiscal year.
6
(B) Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157 "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in accordance with U.S. GAAP, and expands disclosures about
fair value measurements. The statement clarifies that the exchange price is the
price in an orderly transaction between market participants to sell an asset or
transfer a liability at the measurement date. The statement emphasizes that fair
value is a market-based measurement and not an entity-specific measurement. The
statement establishes a fair value hierarchy used in fair value measurements and
expands the required disclosures of assets and liabilities measured at fair
value. The Corporation adopted SFAS No. 157 effective January 1, 2008. The
adoption of this standard had no effect on the Corporation's consolidated
financial statements.
In February 2007, the FASB issued SFAS No. 159 "The Fair Value Option for
Financial Assets and Financial Liabilities." SFAS No. 159 permits entities to
choose to measure financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. The decision to
elect the fair value option may be applied instrument by instrument, is
irrevocable and is applied to the entire instrument and not to only specified
risks, specific cash flows or portions of that instrument. An entity is
restricted in choosing the dates to elect the fair value option for an eligible
item. The Corporation adopted SFAS No. 159 on January 1, 2008. The adoption of
this standard had no effect on the Corporation's consolidated financial
statements.
In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements." SFAS No. 160 amends Accounting Research
Bulletin No. 51, "Consolidated Financial Statements" to establish accounting and
reporting standards for the non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. The Corporation will be required to adopt SFAS
No. 160 on January 1, 2009. Management is currently evaluating SFAS No. 160 and
the impact the adoption of this standard will have on the Corporation's
consolidated financial statements.
In March 2008, the FASB issued SFAS 161, "Disclosures about Derivative
Instruments and Hedging Activities-an amendment of FASB Statement No. 133." SFAS
161 requires enhanced disclosures about an entity's derivative and hedging
activities and thereby improves the transparency of financial reporting. In
adopting SFAS 161, entities are required to provide enhanced disclosures about
(a) how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under SFAS 133 and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity's financial positions, financial performance and cash
flows. Because this pronouncement affects only disclosures, this pronouncement
will not have an impact on the Corporation's financial condition, results of
operation or liquidity. The adoption of SFAS 161 is effective for fiscal years
beginning after November 15, 2008.
7
ITEM 2
TRI CITY BANKSHARES CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This report contains statements that may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, such as statements other than historical facts contained or incorporated
by reference in this report. These statements speak of the Corporation's plans,
goals, beliefs or expectations, refer to estimates or use similar terms. Forward
looking statements are identified generally by statements containing words and
phrases such as "may," "project," "are confident," "should be," "predict,"
"believe," "plan," "expect," "estimate," "anticipate" and similar expressions.
Future filings by the Corporation with the Securities and Exchange Commission,
and statements other than historical facts contained in this Report and in any
written material, press releases and oral statements issued by, or on behalf of
the Corporation may also constitute forward-looking statements.
Forward-looking statements are subject to significant risks and
uncertainties and the Corporation's actual results may differ materially from
the results discussed in such forward-looking statements. Factors that might
cause actual results to differ from the results discussed in forward-looking
statements include, but are not limited to, the factors set forth in Item 1A of
the Corporation's Annual Report on Form 10-K for the year ended December 31,
2007, which item is incorporated herein by reference, and any other risks
identified in this Report.
All forward-looking statements contained in this report or which may be
contained in future statements made for or on behalf of the Corporation are
based upon information available at the time the statement is made and the
Corporation assumes no obligation to update any forward-looking statement.
CRITICAL ACCOUNTING POLICIES
A number of accounting policies require us to use our judgment. One of the
more significant policies is:
o Establishing the amount of the provision and allowance for loan losses. The
Bank evaluates its loan portfolio at least quarterly to determine the
adequacy of the allowance for loan losses. Included in the review are five
components: (1) historic losses and allowance coverage based on peak and
average loss volume; (2) portfolio trends in volume and composition with
attention to possible concentrations; (3) delinquency trends and loan
performance compared to our peer group; (4) local and national economic
conditions; and (5) quality review analysis of non-performing loans
identifying charge-offs, potential loss after collateral liquidation and
credit weaknesses requiring above-normal supervision. If we misjudge the
adequacy of the allowance and experience additional losses, it could reduce
earnings as a result.
8
FINANCIAL CONDITION
The Corporation's total assets decreased $23.2 million (2.9%) during the
first quarter of 2008. Cash and cash equivalents decreased $10.9 million (18.2%)
during that period, associated with activity normally seen during the first
quarter. The Corporation's banking subsidiary, Tri City National Bank (the
"Bank"), typically experiences a short-term increase in deposits at year-end
associated with municipal deposits of property taxes and commercial deposits
resulting from holiday spending, which deposits typically run off during the
first quarter as such excess deposits are transferred into alternative
investment vehicles.
Investment securities decreased $7.5 million (6.8%) during the first
quarter of 2008. Approximately $46.5 million of the Bank's investment portfolio
was redeemed through normal maturities or scheduled calls and $39.5 million of
new securities were purchased. Management continues to follow its practice of
holding to maturity its investment portfolio.
Loans decreased $4.1 million (0.7%) during the first quarter of 2008.
Commercial loan volume remained sluggish during the first quarter of 2008. New
loan originations did not offset scheduled amortization of principal and payoffs
of portfolio loans contributing to the decrease. Management remains optimistic
that the loan portfolio will increase despite increasing rate pressure and
competition in the market.
The allowance for loan losses remained at $5.8 million during the first
three months of 2008. Asset quality remains strong in the Bank's loan portfolio.
A $0.2 million provision for loan loss was recorded in the first quarter of
2008. Despite the economic slowdown and mortgage foreclosures challenging the
banking industry, the Corporation believes that the Bank's loan portfolio
quality remains high. The Bank's charge offs and the corresponding provision for
loan losses reflect the adverse effects of the downturn in the economy, but
compare favorably to the Bank's peer group. The Bank had 29 properties in
foreclosure at March 31, 2008, up from nine such properties a year earlier. As
of March 31, 2008 the Bank had a base of over 4,000 collateralized real estate
loans in its portfolio.
The allowance for loan losses represents management's estimate of the
amount necessary to provide for probable and inherent credit losses in the loan
portfolio. To assess the adequacy of the allowance for loan losses, management
uses significant judgment focusing on changes in the size and the character of
the loan portfolio, changes in levels of nonperforming loans, risks identified
within specific credits, existing economic conditions, underlying collateral,
historic losses within the loan portfolio, as well as other factors that could
affect probable credit losses. Management continues to monitor the quality of
new loans that the Bank originates each year as well as to review the Bank's
existing loan performance.
Deposits at the Bank decreased $10.5 million (1.6%) during the first
quarter of 2008. As noted above, there is typically a short-term increase in
commercial and municipal deposits in December of each year. These deposits tend
to be transferred to other financial institutions for investment opportunity or
funds management programs after the first of the year.
9
Total borrowings of the Corporation decreased $13.7 million (90.9%) during
the first three months of 2008. As a result of decreases in the investment and
loan portfolio, the borrowing needs of the Bank were reduced. The Bank adjusts
its level of daily borrowing or short term daily investment depending upon its
needs each day. Excess funds or funding requirements are addressed at the close
of each business day. Funding needs are available through the Bank's federal
funds facility through its primary correspondent bank.
The Corporation's equity increased $1.1 million (1.0%) during the first
quarter of 2008. The Corporation posted net income of $3.0 million and received
proceeds of $0.4 million from the sale of common stock through the Dividend
Reinvestment Plan offered to shareholders. The Corporation paid $2.3 million in
dividends during the first quarter of 2008.
LIQUIDITY
The ability to provide the necessary funds for the day-to-day operations of
the Corporation depends on a sound liquidity position. Management has continued
to monitor the Corporation's liquidity by reviewing the maturity distribution
between interest earning assets and interest bearing liabilities. Fluctuations
in interest rates can be the primary cause for the flow of funds into or out of
a financial institution. The Corporation continues to offer products that are
competitive and encourages depositors to invest their funds in the Bank's
products. Management believes that these efforts will help the Bank to not only
retain these deposits, but also encourage continued growth. The Bank has the
ability to borrow up to $85.0 million in federal funds purchased, and an
additional $37.6 million available for short-term liquidity through reverse
repurchase agreements available through its correspondent banking relationships.
Approximately $18.1 million in investment securities are scheduled to
mature during the next nine months. In addition, approximately $27.4 million of
other securities are subject to calls during the same period.
CAPITAL EXPENDITURES
The Bank has one capital project currently in place for 2008, the
relocation of its Brown Deer banking office to a new facility. The original
Brown Deer location, which opened in 1978, was part of the village's approved
redevelopment plan. The projected capital expenditure, net of credits from the
Village of Brown Deer, will be $1.5 million. The Corporation has sufficient
liquidity to internally fund this expenditure.
RESULTS OF OPERATIONS
The Corporation's net income for the first quarter of 2008 was $3.0
million, an increase of $745,400 (32.7%) compared to the first quarter of 2007.
The increase was the result of the net effect of the following:
o an increase of $30,200 (1.3%) in operating income,
10
o extraordinary income of $607,000 resulting from the receipt of non-taxable
Bank Owned Life Insurance (BOLI) death benefit proceeds,
o extraordinary income from a gain of $108,000 due to the redemption of VISA
stock upon that company's initial public offering,
o an increase of $614,300 (7.9%) in net interest income to $8.3 million for
the first quarter of 2008 compared to $7.7 million for the first quarter of
2007. Net interest income increased $489,300 (6.4%) after the provision for
loan losses.
Total interest income on loans increased $774,200 (8.2%) in the first three
months of 2008 compared to the first three months of 2007. Declining rates
during the first quarter of 2008 partially offset volume increases related to
loan growth for the period. Volume contributed $951,500 to the interest income
increase as the loan portfolio increased $51.0 million from March 31, 2007 to
March 31, 2008. Yields declined 16 basis points to 7.06% during the first
quarter of 2008 from 7.22% in 2007. This decrease resulted in reduced interest
income of $177,300 for the period.
Investment security interest income decreased $58,400 (5.1%) during the
first quarter of 2008 compared to the first quarter of 2007. This change is
largely the result of a decrease in the investment portfolio, with a net $10.8
million in U. S. Agency securities maturing offset by a $3.5 million net
increase in municipal securities, further offset by an increase of 18 basis
points in the average tax equivalent year-to-date yield derived from all
investments to 4.75% during the first quarter of 2008 compared to 4.57% in the
first quarter of 2007.
Interest expense decreased $0.1 million (3.9%) during the first quarter of
2008 compared to the first quarter of 2007. This decrease resulted from an
increase in deposit volume which was more than offset by declining rates in the
first quarter of 2008. Volume contributed $0.2 million to the interest expense
increase as deposits increased $21.3 million between March 31, 2007 and March
31, 2008. Annualized yields on interest-bearing deposits declined 26 basis
points to 2.31% for the first quarter of 2008 from 2.57% for the first quarter
of 2007. This decrease resulted in a reduction of interest expense by $0.4
million for the current quarter.
Non-interest income increased $943,700 (36.7%) during the first quarter of
2008 compared to the same period of 2007. This increase is primarily due to
extraordinary income from two sources. The Bank received $108,000 from VISA
stock redeemed in conjunction with that company's initial public offering and
also received non-taxable Bank Owned Life Insurance death benefit proceeds in
the amount of $607,000. The remainder of the increase is due to increased
revenue generated from deposit account service fees.
11
A summary of the change in income for the quarters ended March 31, 2008 and
2007 appears below:
Three Months Ended March 31, March 31, 2008
2008 2007 Over(Under)
(Unaudited) (Unaudited) 2007
Revenue and Expenses: (000's)
Interest income $ 11,358 $ 10,865 $ 493
Interest expense (3,001) (3,122) 121
-------- -------- --------
Net interest income before
provision for loan losses 8,357 7,743 614
Provision for loan losses (185) (60) (125)
-------- -------- --------
Net interest income after
provision for loan losses 8,172 7,683 489
Non-interest income 3,514 2,570 944
Non-interest expenses (7,441) (6,786) (655)
-------- -------- --------
Income from Operations 4,245 3,467 778
Tax Provision 1,220 1,187 33
-------- -------- --------
Net income $ 3,025 $ 2,280 $ 745
======== ======== ========
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 Bank's risk-based capital ratio is 19.3% as of March 31,
2008.
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 Tier 1 capital
to total assets of at least 3.0%, while lower rated banking organizations must
maintain an average ratio of at least 4.0%. The Bank's leverage ratio as of
March 31, 2008 was 14.4%.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Corporation's Annual Report on Form 10-K for the year ended December
31, 2007 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.
12
ITEM 4 - CONTROLS AND PROCEDURES
The Corporation maintains a set of disclosure controls and procedures that
are designed to ensure that information required to be disclosed by it in the
reports filed by it under the Securities Exchange Act of 1934, as amended, is
recorded and processed, summarized and reported within the time periods
specified in the SEC's rules and forms. At March 31, 2008 the Corporation
carried out an evaluation, under the supervision and with the participation of
management, including the Chief Executive Officer and the Chief Financial
Officer of the Corporation, of the effectiveness of the design and operation of
the Corporation's disclosure controls and procedures pursuant to Rule 13a-15(e)
and 15d-15(e) of the Exchange Act. Based on that evaluation, the Chief Executive
Officer and the Chief Financial Officer of the Corporation concluded that the
Corporation's disclosure controls and procedures are effective as of the end of
the period covered by this report.
There have been no changes in the Corporation's internal control over
financial reporting identified in connection with the evaluation discussed above
that occurred during the quarter ended March 31, 2008 that have materially
affected, or are reasonably likely to materially affect, the Corporation's
internal control over financial reporting.
13
PART II - OTHER INFORMATION
Item 1A RISK FACTORS
There have been no material changes to the risk factors previously
disclosed in response to Item 1A to Part I of our 2007 Annual Report on
Form 10-K.
Item 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Except as disclosed in the Registrant's Annual Report on Form 10-K for
the year ended December 31, 2007 under "ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES" which disclosure, to the extent it relates to the
quarter ended March 31, 2008, is incorporated in this Item 2 by
reference.
During the quarter ended March 31, 2008, the Corporation did not sell
any equity securities which were not registered under the Securities
Act or repurchase any of its equity securities.
Item 6 EXHIBITS
31.1 Certification of Ronald K. Puetz, Chief Executive Officer, under
Rule 13a-14(a)/15d-14(a)
31.2 Certification of Scott A. Wilson, Chief Financial Officer, under
Rule 13a-14(a)/15d-14(a)
32.1 Certification of Ronald K. Puetz, Chief Executive Officer,
pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Scott A. Wilson, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
14
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, 2008 /s/Ronald K. Puetz
--------------------- ----------------------------------
Ronald K. Puetz
President, Chief Executive Officer
(Principal Executive Officer)
DATE: May 12, 2008 /s/Scott A. Wilson
--------------------- ----------------------------------
Scott A. Wilson
Executive Vice President, Treasurer
(Chief Financial Officer)
TRI CITY BANKSHARES CORPORATION
INDEX OF EXHIBITS
EXHIBIT No.
31.1 Certification of Ronald K. Puetz, Chief Executive Officer, under
Rule 13a-14(a)/15d-14(a)
31.2 Certification of Scott A. Wilson, Chief Financial Officer, under
Rule 13a-14(a)/15d-14(a)
32.1 Certification of Ronald K. Puetz, Chief Executive Officer,
pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Scott A. Wilson, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002