SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
_____________________________________________________________
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
_____________________________________________________________
For Quarter Ended Commission File No. 0-16444
March 31, 1994
SHORELINE FINANCIAL CORPORATION
_______________________________________________________
(Exact name of registrant as specified in its charter)
Michigan 38-2758932
_______________________________ __________________
(State or Other jurisdiction of IRS Employer
incorporation or organization) Identification No.
823 Riverview Drive
Benton Harbor, Michigan 49022 49022
______________________________________ __________________
(address of principal executive office Zip Code
Registrant's telephone number, including area code: (616)927-
2251
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
_________ _________
As of April 30, 1994 there were 3,311,700 issued and
outstanding shares of the registrant's Common Stock.
<PAGE>
SHORELINE FINANCIAL CORPORATION
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet,
March 31, 1994 and December 31, 1993. . . . . 1
Condensed Consolidated Statement of Income,
March 31, 1994 and 1993. . . . . . . . . . . 2
Condensed Consolidated Statement of Cash Flows,
March 31, 1994 and 1993. . . . . . . . . . . 3
Notes to Condensed Consolidated Financial
Statements. . . . . . . . . . . . . . . . . . . 4-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . .7-11
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . .12
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . .13
<PAGE>
<TABLE>
SHORELINE FINANCIAL CORPORATION
<CAPTION> CONSOLIDATED BALANCE SHEET
March 31, December 31,
1994 1993
<S>
Assets <C> <C>
Cash and due from banks $28,083,137 $27,428,786
Federal funds sold 4,200,000 33,600,000
Total cash and cash equivalents 32,283,137 61,028,786
Investment securities (Approximate market
values of $40,608,000 and $122,771,000
at March 31, 1994 and December 31, 1993,
respectively) 39,561,497 118,450,871
Securities available for sale (Approximate market
value of $13,195,000 at December 31, 1993 99,697,236 12,499,969
Loans:
Commercial 199,924,159 194,083,141
Consumer 58,004,816 58,820,606
Real Estate 161,262,376 160,789,531
Total Loans 419,191,351 413,693,278
Less allowance for loan losses 5,680,509 5,586,090
Net loans 413,510,842 408,107,188
Premises and equipment-net 8,986,511 8,924,619
Other assets 11,306,300 11,608,340
Total Assets $605,345,523 $620,619,773
</TABLE>
<TABLE>
Liabilities and Shareholders' Equity
<S> <C> <C>
Liabilities
Deposits:
Non-interest-bearing $62,363,215 $66,991,766
Interest-bearing 477,803,370 490,416,878
Total deposits 540,166,585 557,408,644
Securities sold under agreements to repurchase 2,271,574 2,410,920
Other liabilities 3,023,181 3,193,090
Long-term debt 5,000,000 5,000,000
Total Liabilities 550,461,340 568,012,654
Shareholders' equity
Preferred stock, no par value;
1,000,000 shares authorized;
no shares outstanding
Common stock, par value $1:
5,000,000 shares authorized;
3,311,700 and 3,300,645 shares issued
at March 31, 1994 and December 31, 1993,
respectively 3,311,700 3,300,645
Additional paid-in capital 41,896,228 41,684,562
Unrealized holding gains for available-
for-sale securities 1,239,229
Retained earnings 8,437,026 7,621,912
Total Shareholders' Equity 54,884,183 52,607,119
Total Liabilities and Shareholders' Equity $605,345,523 $620,619,773
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
Page 1
<PAGE>
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31
<CAPTION>
<S> 1994 1993
<C> <C>
INTEREST INCOME
Interest and fees on loans $8,123,185 $7,598,705
Interest on investment securities:
Taxable 1,093,509 1,367,704
Tax-exempt 693,192 786,838
Interest on federal funds sold 118,475 86,798
Total interest income 10,028,361 9,840,045
INTEREST EXPENSE
Interest on deposits 4,239,487 4,208,266
Interest on short-term borrowing 74,217 6,339
Total interest expense 4,313,704 4,214,605
NET INTEREST INCOME 5,714,657 5,625,440
Provision for loan losses 175,000 375,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,539,657 5,250,440
OTHER INCOME
Service charges on deposit accounts 419,373 378,462
Trust income 343,802 292,455
Securities gains 96,972 39,418
Other 353,787 272,411
Total other income 1,213,934 982,746
OTHER EXPENSES
Salaries and employee benefits 2,410,065 2,174,549
Occupancy expense 304,311 298,680
Equipment expense 400,495 301,288
Other 1,574,878 1,467,473
Total other expense 4,689,749 4,241,990
INCOME BEFORE INCOME TAXES 2,063,842 1,991,196
Federal income tax expense 455,000 396,000
NET INCOME $1,608,842 $1,595,196
EARNINGS PER SHARE $0.49 $0.49
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
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<TABLE>
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31
<CAPTION>
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net Income $1,608,842 $1,595,196
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 323,220 270,545
Provision for loan losses 175,000 375,000
Net amortization and accretion on investment securities 200,404 200,040
Net amortization and accretion on securities
available-for-sale 414,136
Amortization of goodwill and related core
deposit intangible 65,578 27,970
Gains on sales of investment securities (39,419)
Gains on sales of securities available-for-sale (96,972)
(Gains)Losses on disposal of premises and equipment 2,575 (1,181)
Decrease in income taxes receivable 441,564 396,000
Increase(Decrease) in deferred loan fees 13,163 30,291
(Increase)Decrease in interest receivable (327,113) (377,677)
Increase(Decrease) in interest payable 77,325 (23,851)
(Increase)Decrease in other assets (494,955) (422,577)
Increase(Decrease) in other liabilities (268,659) (239,741)
Total adjustments 525,266 195,400
Net cash from operating activities 2,134,108 1,790,596
Cash flows from investing activities:
Proceeds from sales of investment securities 0 2,399,419
Proceeds from sales of securities available-for-sale 3,091,539
Proceeds from maturities, calls, and principal
reductions of investment securities 6,898,241 12,639,069
Proceeds from maturities, calls, and principal
reductions of securities available-for-sale 5,781,207
Purchase of investment securities (4,432,518) (14,119,937)
Purchase of securities available-for-sale (18,286,310)
Net (increase)decrease in loans (5,616,325) (4,506,365)
Recoveries on loans charged-off 24,508 66,397
Premises and equipment expenditures (402,597) (286,427)
Proceeds from disposal of premises and equipment 14,910 22,072
Net cash from investing activities (12,927,345) (3,785,772)
Cash flows from financing activities:
Net increase(decrease) in deposits (17,242,059) (4,766,374)
Net increase(decrease) in borrowed funds (139,346) (266,523)
Dividends paid (793,728) (654,008)
Proceeds from shares issued under dividend
reinvestment plan 139,447 88,610
Proceeds from shares issued under stock option plan 83,274 0
Net cash from financing activities (17,952,412) (5,598,295)
Net change in cash and cash equivalents (28,745,649) (7,593,471)
Cash and cash equivalents at beginning of year 61,028,786 44,169,395
Cash and cash equivalents at March 31 $32,283,137 $36,575,924
Cash paid during the year for:
Interest $4,236,379 $4,238,456
Income taxes 13,436 0
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
Page 3
<PAGE>
SHORELINE FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
were prepared in accordance with instructions for Form 10-Q and,
therefore, do not include all disclosures required by generally
accepted accounting principles for complete presentation of financial
statements. In the opinion of management, the condensed consolidated
financial statements contain all adjustments necessary to present
fairly the financial condition of Shoreline Financial Corporation as of
March 31, 1994 and December 31, 1993, and the results of its operation
for the three months ended March 31, 1994 and 1993, and its cash flows
for the three months then ended. The results of operations for the
three months ended March 31, 1994 are not necessarily indicative of the
result to be expected for the full year.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of Shoreline Financial Corporation and its wholly owned subsidiaries,
Inter-City Bank and Citizens Trust and Savings Bank. All material
intercompany accounts and transactions have been eliminated in
consolidation.
Investments in Debt and Equity Securities
As of January 1, 1994, the Corporation changed its accounting for debt
(and equity) securities to adopt new accounting guidance, SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."
Accordingly, securities are classified into held-to-maturity,
available-for-sale, and trading categories. Held-to-maturity
securities are those which the Corporation has the positive intent and
ability to hold to maturity, and are reported at amortized cost.
Available-for-sale securities are those which the Corporation may
decide to sell if needed for liquidity, asset-liability management, or
other reasons. Available-for-sale securities are reported at fair
value, with unrealized gains or losses included as a separate component
of equity, net of tax. Trading securities are bought principally for
sale in the near term, and are reported at fair value with unrealized
gains or losses included in earnings. The Corporation did not hold any
securities considered for this category at any time during the first
quarter of 1994.
The effect of adopting this new accounting guidance was to increase
equity at January 1, 1994 by approximately $2.4 million.
Realized gains or losses are determined based on the amortized cost of
the specific security sold.
During the three month period ended March 31, 1994, the proceeds from
sales of available-for-sale securities were $3,091,539, with gross
realized gains of $96,972, and no realized losses from those sales.
For this period, the change in net unrealized holding gains on
available-for-sale securities was a decrease of $(1.2) million. There
were no sales or transfers of securities classified as held-to-
maturity.
Page 4
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Intangible Assets
Goodwill represents the excess of the purchase price over the net value
of tangible assets acquired and related core deposit intangibles
identified in branch acquisitions. Goodwill is being amortized on a
straight-line basis for a period of 10 years. The related core deposit
intangibles are amortized on an accelerated basis over the estimated
life of the deposits acquired. Goodwill totaled $252,152 and $262,103
at March 31, 1994 and December 31, 1993 respectively. Core deposit
intangibles totaled $2,537,937 and $2,593,564 at March 31, 1994 and
December 31, 1993, respectively. These amounts are included in Other
Assets in the accompanying balance sheet.
Employee Benefits
The Corporation sponsors a postretirement health care plan that covers
both salaried and nonsalaried employees. Effective January 1, 1993,
the Corporation adopted the provisions of Statement of Financial
Accounting Standards No. 106 which requires the accrual, during the
years that employees render the necessary service, of the expected cost
of providing those benefits to employees and their beneficiaries and
covered dependents. The Corporation's postretirement health care plan
provides that retired employees may remain on the Corporation's health
care plan with each retiree's out-of-pocket contribution to the
Corporation equal to their premium expense determined exclusively on
the loss experience of the retirees in the plan.
Income Taxes
Effective January 1, 1993, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. Accordingly, income tax expense for the quarter ended
March 31, 1994 is based upon the liability method. Certain income tax
and expense items are reported in different time periods for tax
purposes. Deferred or prepaid taxes are recorded in the balance sheet
for these temporary differences.
Earnings Per Share
Earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding and common equivalent
shares with a dilutive effect. On February 17, 1993, the Board of
Directors declared a five percent stock dividend payable April 1, 1993
to shareholders of record on March 16, 1993. On February 16, 1994, the
Board of Directors declared a three-for-two stock split, effective May
31, 1994 to shareholders of record on May 16, 1994, subject to
shareholder approval of an increase in authorized capital. (Earnings
and dividends per share have not been restated for the three-for-two
stock split to be effective May 31, 1994.) The average number of
shares was 3,304,348 in the first quarter of 1994, and 3,270,704 in the
first quarter of 1993.
Page 5
<PAGE>
NOTE 2 - Income Taxes
Components for the provision of federal income taxes are as follows:
March 31, 1994
Taxes currently payable $ 500,000
Deferred tax benefit (45,000)
Income tax expense $ 455,000
The deferred income taxes are due primarily to the temporary
differences related to depreciation, bad debt deductions and deferred
loan fees.
The difference between the provision for income taxes shown on the
statement of income and amounts computed by applying the statutory
federal income tax rate to income before tax expense is as follows:
March 31, 1994
Income tax calculated at statutory federal rate of 34% $ 702,000
Increase(decrease) due to tax effect of
Tax-exempt income (272,500)
Nondeductible expense and other 25,500
Income tax expense $ 455,000
Effective January 1, 1993, the Corporation has adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes.
The adjustment to apply the new accounting method was not material.
The components of the net deferred tax asset recorded in the balance
sheet as of March 31, 1994 are as follows:
Total deferred tax liabilities $ (1,062,000)
Total deferred tax assets 2,114,000
Total valuation allowance -0-
Net deferred tax asset $1,052,000
Page 6
<PAGE>
SHORELINE FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition:
On December 31, 1993, Shoreline Financial Corporation held an
unusually high amount of dollars in Federal Funds Sold, totaling $33.6
million. During the first quarter of 1994, these liquid funds were
utilized to fund commercial loan growth, additional investments and to
absorb the reduction in time and savings deposit balances. On March 31,
1994, Federal Funds Sold totaled $4.2 million.
As of March 31, 1994, deposits totaled $540.2 million, which
represents a decrease of $17.2 million from the December 31, 1993 total
of $557.4 million. Time deposits declined $8.2 million during this time
period. A portion of this run-off was anticipated by management as a
significant group of higher rate time deposits acquired in the 1993
Standard Federal branch acquisitions were scheduled to mature during
the first quarter of 1994. In addition to the decrease in time
deposits, declines were noted in non-interest bearing demand deposit
accounts and NOW accounts of $4.6 million and $3.1 million,
respectively, from December 31, 1993 to March 31, 1994. The relatively
modest demand for loans experienced in the first quarter coupled with a
relatively low net interest margin placed Shoreline in a somewhat less
aggressive posture in the short-term in attracting rate sensitive
deposit customers. This is supported by the approximate $3 million
decline from December 31, 1993 to March 31, 1994 in time deposits
greater than $100,000.
Shoreline's loan balances totaled $419.2 million on March 31,
1994, an increase of $5.5 million or 1.3% from December 31, 1993.
Growth of $5.8 million or 3.0% in the commercial loan portfolio
provided all of the increase in total loans. The mortgage loan and
consumer loan portfolios remained relatively unchanged from year end.
The overall reduction in residential mortgage loan refinancing activity
impacted Shoreline's mortgage loan production in the first quarter. On
March 31, 1994, approximately $1.1 million of mortgage loans were
classified as held for sale.
During the first quarter of 1994, Shoreline substantially improved
its non-performing asset position. Non-performing assets (loans on a
non-accrual status, contractually past due 90 days or more, "troubled
debt restructurings" and other real estate owned) totaled $3,386,000
which represented .81% of the total loan portfolio. At December 31,
1993, non-performing assets totaled $5,432,000 and represented 1.31% of
Shoreline's total loan portfolio. The positive disposition of a large
non-accrual loan coupled with a $641,000 reduction in loans past due 90
days or more produced the positive results. During the first quarter,
Shoreline experienced net charge-offs totaling $80,577. This represents
.02% of average total loans during the same time period. As a result of
the positive movement in non-performing assets and modest net charge-
offs, the Corporation reduced its first quarter provision for loan
losses to $175,000 which compares to the fourth quarter of 1993's
provision of $285,000. However, Shoreline's allowance for loan losses
as a percent of total loans remained stable at 1.36% compared to the
1.35% at December 31, 1993.
Page 7
<PAGE>
Total investment securities amounted to $139.3 million at March
31, 1994. Of this total, $99.7 million were classified as available-
for-sale. This represents an increase of $8.3 million in total
investment securities from December 31, 1993. Increased holdings in
State and Political Subdivisions and U.S. Government Treasuries of
$5.5 million and $3.0 million, respectively, accounted for this
increase.
Future Transactions:
On May 5, 1993, Shoreline announced its intention to effect a
merger between its two subsidiary banks, Inter-City Bank and Citizens
Trust and Savings Bank. The resulting single bank will be named
Shoreline Bank. The transaction will be consummated on May 31, 1994.
On December 7, 1993, the Corporation announced an agreement with
Great Lakes Bancorp, Ann Arbor, Michigan under which the Corporation
will purchase and assume from Great Lakes Bancorp certain assets and
liabilities associated with its branch located in South Haven,
Michigan. This branch has deposits totaling approximately $13 million.
The transaction is pending regulatory approval and is anticipated to be
consummated during the second or third quarter of 1994.
On March 25, 1994, the Corporation announced an agreement with Old
Kent Bank, Grand Rapids, Michigan under which Shoreline will purchase
and assume from Old Kent Bank certain assets and liabilities associated
with its branch located in Adamsville, Michigan. This branch has
deposits totaling approximately $12 million. The transaction is subject
to regulatory approvals and other customary conditions and is
anticipated to be completed in the third quarter of 1994.
Liquidity and Rate Sensitivity:
For the first quarter of 1994, Shoreline's average loan to
deposit ratio was 76.0%. This compares with the Corporation's loan to
deposit ratio for 1993 of 75.2%. Federal funds sold, Shoreline's most
liquid investment, averaged $15.4 million during the first quarter of
1994 which represents 2.5% of total average assets for the period.
During 1993, federal funds sold averaged 2.8% of the Corporation's
total average assets. As of March 31, 1994, Shoreline had commitments
to make or purchase loans, including the unused portion of lines of
credit totalling $72.9 million.
As of March 31, 1994, the cumulative funding gaps of interest-
earning assets and interest-bearing liabilities for selected maturity
periods is illustrated as follows:
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<PAGE>
Repriceable or Maturing Within:
0 to 3 0 to 12 0 to 5
(In thousands) Months Months Years
Interest-earning Assets
Loans $186,295 $253,273 $357,850
Investment Securities 20,002 62,230 115,775
Federal Funds Sold 4,200 4,200 4,200
Total 210,497 319,703 477,825
Interest-bearing Liabilities
Time Deposits 62,858 158,089 243,822
Money Market Accounts 68,746 68,746 68,746
Demand and Savings 163,277 163,277 163,277
Other Borrowings 2,272 2,272 7,272
Total 297,153 392,384 483,117
Asset(Liability) Gap $(86,656) $(72,681) $( 5,292)
Interest-bearing demand and savings accounts subject to immediate
withdrawal are included in the 0-3 month category. While these accounts
may be withdrawn at the discretion of the customer and may be repriced
at the discretion of management, it is felt that these type of accounts
are not as sensitive to changes in interest rates in the short term as
this presentation would indicate. Therefore, management believes the
liability GAPs shown in the 3 and 12 month categories above somewhat
distort the more realistic GAP position of the Corporation.
Shoreline's net interest margin for the first quarter of 1994 was
4.33%. This compares with net interest margins of 4.38%, 4.59% and
4.82% in the fourth quarter, third quarter and second quarter of 1993,
respectively. The recent modest upswing in short-term interest rates
should help to stabilize this downward trend in the net interest
margin.
Capital Resources:
Total shareholders' equity amounted to $54.9 million at March 31,
1994. As required, the Corporation adopted SFAS 115, "Accounting for
Certain Investments in Debt and Equity Securities." Under this
pronouncement, securities classified as "available for sale' are
accounted for at fair value with unrealized gains and losses, net of
deferred income taxes, reported as a separate component of
shareholders' equity. At March 31, 1994, this component of
shareholders' equity amounted to $1.2 million. A summary of the
Corporation's capital position follows;
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<PAGE>
March 31, 1994 December 31, 1993
Without With
unrealized unrealized
holding holding
gains gains
Equity to Assets 8.40% 9.07% 8.50%
Leverage Capital Ratio 8.44% 8.65% 8.05%
Risk-based Capital:
Tier 1 Capital 13.15% 13.47% 12.90%
Total Capital 13.95% 14.27% 14.15%
During the first quarter of 1994, the Corporation declared and
paid a cash dividend of $.24 per share. A total of 4,498.00 shares of
common stock were subsequently issued under the Corporation's Dividend
Reinvestment Plan.
Results of Operations:
Net income for the three months ended March 31, 1994 was
$1,608,842, an .85% increase over the same period in 1993. Net interest
income totaled $5,714,657 in the first quarter of 1994, which
represents a modest increase of $89,217 or 1.58% over the first quarter
of 1993. The following table illustrates the effect that changes in
rates and volumes of earning assets and interest-bearing liabilities
had on the level of net interest income in 1994.
THREE MONTHS ENDED MARCH 31, 1994
(Dollars in thousands)
1994 1993
Interest Income (taxable equivalent) $ 10,441 $ 10,304
Interest Expense 4,314 4,215
Net Interest Income $ 6,127 $ 6,089
Average Volume:
Interest-Earning Assets $562,573 $489,749
Interest-Bearing Liabilities 490,644 419,355
Net Differential $ 71,929 $ 70,394
Average Yields/Rates:
Yield on earning assets 7.44% 8.43%
Rate paid on liabilities 3.57% 4.08%
Interest Spread 3.87% 4.35%
Net Interest Margin 4.33% 4.94%
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<PAGE>
The change in net interest income (in thousands) is attributable to the
following:
Net
Volume Rate Inc/Dec
Interest-Earning Assets $ 1,431 $(1,294) $ 137
Interest-Bearing Liabilities 673 ( 574) 99
Net Interest $ 758 $( 720) $ 38
The increase in earning assets of approximately $73 million over
the previous year's quarterly average helped to offset the decline in
the net interest margin from 4.94% in the first quarter of 1993 to
4.33% in the first quarter of 1994.
Total other income for the three months ended March 31, 1994 was
$1,213,934. This compares to the prior year's amount of $982,746 and
represents a 23.5% increase. Service charge income on deposit accounts
contributed approximately $41,000 of this increase resulting, primarily
from the increased level of deposits over the prior year's quarter.
Gains from sale of investment securities amounted to $96,972 in the
first quarter of 1994, an increase of $57,554 over the prior year.
Other operating income totaled $353,787 for the three months ended
March 31, 1994, an increase of $81,376 over the prior year at this
time. Increased credit card fee income and gains on the sale of other
real estate owned contributed toward this increase.
Total other expense amounted to $4,689,749 in the first quarter of
1994. This represents an increase of $447,759 or 10.6% over the
previous year. Personnel expense totaled $2,410,065 as of March 31,
1994. This is an increase of $235,516 or 10.8%. The addition of
approximately 22 full time equivalents associated with the Standard
Federal branch acquisitions in July of 1993 is primarily responsible
for the increase in this area in excess of normal salary increases.
Equipment expense totaled $400,495 as of March 31, 1994, an increase of
$99,207 over the prior year at this time. Increased depreciation and
repairs and maintenance expense produced this increase. Other operating
expense increased 7.3% over the prior year and totaled $1,574,873 at
March 31, 1994. Increased expenses related to FDIC insurance,
amortization of intangible assets (resulting from Standard Federal
acquisition) and professional fees (completion of a non-interest income
study) helped to cause this increase.
In summary, Shoreline's net income for the first quarter of 1994
produced a return on average assets of 1.08%, which compares to the
1.23% earned in the first quarter of 1993. The return on average
shareholders' equity was 12.24% and 13.23% for the first quarter of
1994 and 1993, respectively.
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SHORELINE FINANCIAL CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Shoreline's subsidiaries are parties, as plaintiff
or defendant, to a number of legal proceedings, none
of which is considered material, and all of which
arise in the normal course of their operations.
Item 2. Changes in Rights of Company's Security Holders
Not Applicable
Item 3. Defaults by the Company on its Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Materially Important Events
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Not Applicable
(b) No reports on Form 8-K have been filed during
the quarter.
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SHORELINE FINANCIAL CORPORATION
SIGNATURES
Pursuant to the requirement 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.
Shoreline Financial Corporation
_______________________________
Registrant
May 11, 1994 Dan L. Smith
Date______________ ______________________________________
Dan L. Smith
Chairman, President and CEO
May 11, 1994 James R. Milroy
Date______________ ______________________________________
James R. Milroy
Senior Vice President-Controller
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