SHBK Shore Finance Corp (MM)

ONLEY, Va., April 19 /PRNewswire-FirstCall/ -- Shore Financial Corporation (NASDAQ:SHBK) announces a revision to the earnings release from Tuesday, April 17. The previous earnings release had errors in the prior year data. Complete, corrected release follows: Shore Financial Corporation (NASDAQ:SHBK) announced today that quarterly earnings were $637,100, or $0.25 per diluted share, for the three months ended March 31, 2007, compared to earnings of $695,000, or $0.28 per diluted share, for the same period of 2006. The bank's mortgage banking division posted significant gains in fee income during the quarter with an increase from $29,600 during the 2006 quarter to $67,500 during the 2007 comparable quarter. The company's investment subsidiary also realized another strong quarter with commission revenue of $92,000 during the period ended March 2007, compared to $78,400 in 2006. Net interest margin pressure impacted the company's earnings, declining from 3.70% during the first quarter of 2006 to 3.46% during the March 2007 quarter. This 24 basis point decline resulted in $146,000 less net interest income based on average earning assets outstanding during the March 2007 quarter. Net interest income was $2.07 million during the quarter, compared to $2.14 million during the March 2006 quarter. Management continued its efforts to maximize yields on earning assets and minimize funding costs which resulted in gradual margin improvement throughout the March 2007 quarter. The company's noninterest income increased to $829,300 during the March 2007 three month period, compared to $771,500 during the 2006 period. Noninterest income benefited from the growth in investment and mortgage brokerage commissions and $46,600 in gains on the sale of investment securities during the quarter. The company was able to minimize noninterest expense growth during the March quarter with a moderate increase of 4.4% over the March 2006 quarter. Noninterest expense was $1.97 million during the March 2007 quarter, compared to $1.89 million during the 2006 three month period. Compensation and benefits expense accounted for the majority of this increase, including increased commissions paid as a result of the growth in the investment and mortgage brokerage business lines and normal annual salary and benefit adjustments. Overall, the company realized declines in other noninterest expense categories during the quarter when compared to the 2006 period. The company's assets were $266.0 million at March 31, 2007, including $212.9 million in gross loans outstanding at period end. Asset quality remained strong during the quarter. The bank's non current loan to total loan ratio was 1.09% at March 31, 2007, while the bank's allowance for loan losses to period end loans ratio was 1.34%. Management considers these levels manageable and commensurate with the risk existing in the bank's loan portfolio. Shore Financial Corporation is the only publicly traded company with headquarters on the Eastern Shore of Virginia. Its stock is traded on the NASDAQ Global Stock Market under the symbol SHBK. Its banking subsidiary, Shore Bank, serves the Eastern Shore of Maryland and Virginia through seven full-service banking facilities, twenty-three ATMs and twenty-four hour telephone and online banking services. Through banking subsidiaries and affiliated companies, the bank provides title insurance, trust services, and non deposit investment products. For more information on stock, products and services, visit http://www.shorebank.com/ . This press release may contain "forward-looking statements," within the meaning of federal securities laws that involve significant risks and uncertainties. Statements herein are based on certain assumptions and analyses by the company and are factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in economic conditions; significant changes in regulatory requirements; and significant changes in securities markets. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the company's most recent Form 10-K report and other documents filed with the Securities and Exchange Commission. Shore Financial Corporation does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Shore Financial Corporation Earnings Release Financial Highlights: Three Months Ended March 31, 2007 2006 OPERATIONS: Net Interest Income $2,067,900 $2,142,400 Noninterest Income $829,300 $771,500 Loan Loss Provision $600 $16,000 Noninterest Expense $1,973,300 $1,890,700 Income Tax Expense $286,200 $312,200 Net Income $637,100 $695,000 RATIOS AND OTHER: Total Shares Outstanding $2,499,487 $2,491,640 Weighted Avg Shares-Basic $2,498,100 $2,490,200 Weighted Avg Shares-Diluted $2,526,700 $2,520,200 Basic Earnings Per Share $0.26 $0.28 Diluted Earnings Per Share $0.25 $0.28 Total Assets 265,991,400 254,832,300 Gross Loans 212,907,000 203,064,900 Deposits 207,311,700 193,568,700 Total Equity 26,547,600 24,197,700 Average Assets 258,816,200 249,565,700 Average Equity 26,512,900 24,125,100 Net Interest Margin 3.46% 3.70% Return on Average Assets 0.98% 1.11% Return on Average Equity 9.61% 11.52% Efficiency Ratio 66.48% 63.95% DATASOURCE: Shore Financial Corporation CONTACT: Lynn M. Badger of Shore Financial Corporation, +1-757-787-1335, Web site: http://www.shorebank.com/

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