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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _____________.
Commission File No. 0-16444
SHORELINE FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN 38-2758932
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
823 RIVERVIEW DRIVE
BENTON HARBOR, MICHIGAN 49022
(Address of Principal Executive Offices) (Zip Code)
(616) 927-2251
(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 ________
As of April 30, 1996, there were 5,240,485 issued and outstanding shares of
the registrant's Common Stock.
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SHORELINE FINANCIAL CORPORATION
FORM 10-Q
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets,
March 31, 1996 and December 31, 1995 3-4
Condensed Consolidated Statements of Income,
Three Months Ended March 31, 1996 and 1995 5
Condensed Consolidated Statements of Cash Flows,
Three Months Ended March 31, 1996 and 1995 6-7
Notes to Condensed Consolidated Financial
Statements 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-16
PART II. OTHER INFORMATION 17-18
Item 1. Legal Proceedings 17
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
-2-
<TABLE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
(unaudited)
<S> <C> <C>
ASSETS
Cash and Due from Banks $ 29,955,019 $ 29,810,198
Federal Funds Sold 14,825,000 12,950,000
Total Cash and Cash Equivalents 44,780,019 42,760,198
Securities Held to Maturity
(Fair values of $46,314,411 and
$45,875,132 on March 31, 1996 and
December 31, 1995, respectively) 45,247,335 44,465,217
Securities Available for Sale
(Carried at fair value) 99,997,027 102,870,733
Total Loans 483,390,795 465,995,264
Less Allowance for Loan Losses 6,687,325 6,600,119
Net Loans 476,703,470 459,395,145
Premises and Equipment-Net 10,231,908 10,143,851
Other Assets 11,551,085 11,537,594
Total Assets $688,510,844 $671,172,738
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Non Interest-Bearing $ 67,381,528 $ 69,236,346
Interest-Bearing 536,005,423 523,063,666
Total Deposits 603,386,951 592,300,012
Securities Sold Under Agreements to
Repurchase 3,573,209 4,690,818
Other Liabilities 4,645,503 4,822,065
Long-Term Debt 12,000,000 5,000,000
Total Liabilities 623,605,663 606,812,895
</TABLE>
-3-
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS - CONTINUED
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
(unaudited)
<S> <C> <C>
Shareholders' Equity
Common Stock:
10,000,000 shares authorized;
5,237,735 and 5,251,018 shares issued
at March 31, 1996 and December 31, 1995,
respectively
Additional Paid-in Capital 50,017,552 50,147,966
Unrealized Gain on Securities
Available for Sale, Net of Tax Effect 1,529,669 2,160,403
Retained Earnings 13,357,960 12,051,474
Total Shareholders' Equity 64,905,181 64,359,843
Total Liabilities & Shareholders' Equity $688,510,844 $671,172,738
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-4-
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
<S> <C> <C>
INTEREST INCOME
Interest and Fees on Loans $10,671,151 $ 9,766,484
Interest on Federal Funds Sold 133,179 292,486
Interest on Investments 2,419,061 2,201,986
Total Interest Income 13,223,391 12,260,956
INTEREST EXPENSE
Interest on Deposits 6,040,498 5,482,037
Other Interest Expense 131,237 86,764
Total Interest Expense 6,171,735 5,568,801
NET INTEREST INCOME 7,051,656 6,692,155
Provision for Loan Losses 150,000 200,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 6,901,656 6,492,155
OTHER INCOME
Service Charges on Deposit Accounts 417,732 457,284
Trust Income 372,688 332,567
Investment Securities Transactions 70,639 (30,856)
Other Operating Income 125,458 289,224
Total Other Income 986,517 1,048,219
OTHER EXPENSES
Personnel 2,641,562 2,450,485
Occupancy 349,672 304,814
Equipment 474,016 426,826
Other Operating Expenses 1,174,365 1,561,708
Total Other Expense 4,639,615 4,743,833
INCOME BEFORE INCOME TAXES 3,248,558 2,796,541
Federal Income Tax Expense 891,000 754,000
NET INCOME $ 2,357,558 $ 2,042,541
EARNINGS PER SHARE $ .45 $ .39
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-5-
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 2,357,558 $ 2,042,541
Adjustments to Reconcile Net Income to
Net Cash from Operating Activities:
Depreciation and Amortization 369,826 353,197
Provision for Loan Losses 150,000 200,000
Net Amortization and Accretion on Securities 179,172 200,001
Amortization of Goodwill and Related Core
Deposit Intangible 70,583 76,342
(Gains)Loss on Sales and Calls of Securities (70,638) 30,856
(Increase)/Decrease in Other Assets (1,646,259) 374,531
Increase/(Decrease) in Other Liabilities 1,710,881 (499,739)
Total Adjustments 763,565 735,188
NET CASH FROM OPERATING ACTIVITIES 3,121,123 2,777,729
CASH FLOWS FROM INVESTING ACTIVITIES:
Net Increase in Loans (17,458,325) (2,057,313)
Securities Available for Sale:
Purchase (4,952,814) (4,146,756)
Proceeds from Sale 701,131 971,488
Proceeds from Maturities, Calls and
Principal Reductions 6,121,737 1,278,592
Securities Held to Maturity:
Purchase (3,115,665) (7,271,354)
Proceeds from Maturities, Calls and
Principal Reductions 2,272,673 1,367,896
Premises and Equipment Expenditures (457,883) (231,320)
NET CASH FROM INVESTING ACTIVITIES (16,889,146) (10,088,767)
</TABLE>
-6-
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
<S> <C> <C>
Cash Flows from Financing Activities:
Net Increase in Deposits 11,086,939 4,334,573
Net Decrease in Short-Term Borrowing (1,117,609) (298,110)
Net Increase in Long-Term Debt 7,000,000 0
Dividends Paid (1,051,070) (898,613)
Net Proceeds from Shares Issued 224,310 180,324
Payments to Retire Common Stock (354,726) 0
NET CASH FROM FINANCING ACTIVITIES 15,787,844 3,318,174
NET CHANGE IN CASH AND CASH EQUIVALENTS 2,019,821 (3,992,864)
Cash and Cash Equivalents at Beginning of
Year 42,760,198 51,637,807
Cash and Cash Equivalents at March 31 $44,780,019 $47,644,943
CASH PAID DURING THE PERIOD FOR:
Interest $ 6,152,866 $ 5,479,514
Income Taxes $ 170,000 $ 0
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
-7-
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 Rule 10-01 of Regulation S-X
and the 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 (consisting only of normal recurring accruals) necessary to
present fairly the financial condition of Shoreline Financial Corporation
as of March 31, 1996 and December 31, 1995, and the results of its
operations for the three months ended March 31, 1996 and 1995, and its cash
flows for the three months then ended. The results of operations for the
three months ended March 31, 1996 are not necessarily indicative of the
results to be expected for the full year.
On January 1, 1996, Shoreline adopted several new accounting
pronouncements. SFAS No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed of," establishes
guidance in determining impairment of long-lived and intangible assets
and related treatment if the value is determined to be impaired. SFAS No.
122, "Accounting for Mortgage-Servicing Rights," changes the accounting
for mortgage servicing rights when servicing rights are retained for
loans originated and subsequently sold. SFAS No. 123, "Accounting for
Stock-Based Compensation," requires disclosure of the fair value and pro
forma net income effect of granting stock options. The effect of adopting
these standards was not material to the consolidated financial statements
of Shoreline Financial Corporation.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the
accounts of Shoreline Financial Corporation and its wholly owned
subsidiary, Shoreline Bank. All material intercompany accounts and
transactions have been eliminated in consolidation.
INVESTMENTS IN DEBT AND EQUITY SECURITIES
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
-8-
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 1996.
Realized gains or losses are determined based on the amortized
cost of the specific security sold.
During the three month period ended March 31, 1996, the proceeds
from sales of available for sale securities were $701,131, with gross
realized gains of $34,763 and gross realized losses of $2,024 from those
sales. For this period, the change in net unrealized holding gains on
available for sale securities was a decrease of $956,000. There were no
sales or transfers of securities classified as held to maturity.
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 ten years. The related core deposit
intangibles are amortized on an accelerated basis over the estimated life
of the deposits acquired. Goodwill totaled $172,524 and $182,477 at March
31, 1996 and December 31, 1995, respectively. Core deposit intangibles
totaled $2,399,287 and $2,459,916 at March 31, 1996 and December 31, 1995,
respectively. These amounts are included in Other Assets in the
accompanying balance sheet.
INCOME TAXES
Income tax expense for the quarter ended March 31, 1996 and 1995
is based upon the liability method, according to Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". 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 is computed by dividing net income by the
weighted average number of common shares outstanding and common equivalent
shares with a dilutive effect. Common equivalent shares are shares which
may be issuable to employees upon exercise of outstanding stock options.
The average number of shares was 5,249,093 in the three months ended March
31, 1996 and 5,242,174 in the three months ended March 31, 1995.
-9-
NOTE 2 - INCOME TAXES
Components for the provision of federal income taxes are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1996
<S> <C>
Taxes currently payable $1,300,000
Deferred tax benefits (409,000)
Income Tax Expense $ 891,000
</TABLE>
The deferred income taxes are due primarily to the temporary difference
related to depreciation, bad debt deductions, mark-to-market of securities
held for sale 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:
<TABLE>
<CAPTION>
MARCH 31, 1996
<S> <C>
Income tax calculated at statutory federal rate of 34% 1,105,000
Increase (decrease) due to tax effect of
Tax-exempt income (241,000)
Nondeductible expense and other 27,000
Income Tax Expense $ 891,000
</TABLE>
The components of the net deferred tax asset recorded in the balance sheet
as of March 31, 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Total deferred tax liabilities $(1,252,000)
Total deferred tax assets 4,208,000
Total valuation allowance 0
Net Deferred Tax Asset $ 2,956,000
</TABLE>
-10-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
Total deposits averaged $594.9 million during the first quarter of
1996. This represents an increase of $16.4 million or 2.8% over the
previous quarter's average of $578.4 million. Approximately $8 million of
this increase resulted from the acquisition of the Adamsville, Michigan
branch from Old Kent Bank. A comparison of the quarterly averages for the
past two quarters follows:
<TABLE>
<CAPTION>
AVG BAL AVG BAL
1ST QTR 96 4TH QTR 95
(000S)
<S> <C> <C>
Non-Interest Bearing Demand Deposits $ 65,158 $ 68,666
Interest-Bearing Demand Deposits 82,067 72,627
Savings Deposits 178,755 177,587
Time Deposits 268,875 259,528
Total $594,855 $578,408
</TABLE>
In comparison to the fourth quarter of 1995, interest-bearing
demand deposits increased $9.4 million. Shoreline Bank's Super Public Fund
NOW account continues to attract increased usage from municipal customers,
accounting for the majority of this increase. The increase in time deposit
average balances during the first quarter reflects both the branch
acquisition in December and a $3.2 million increase in time deposits
greater than $100,000. On March 31, 1996, deposits totaled $603.4 million
which compares with the December 31, 1995 total of $592.3 million.
Total loans averaged $473.7 million during the first quarter of
1996 which compares to the previous quarter's average of $458.5 million.
While all three loan portfolios contributed to this increase, Shoreline's
mortgage loan portfolio provided the majority of the increase. Average
mortgage loans increased $11.3 million caused by a combination of increased
originations, slightly reduced sales to the secondary market and reduced
principal reductions. The commercial and consumer loan portfolios increased
$2.6 million and $1.3 million, respectively, in comparison to the fourth
quarter of 1995. At March 31, 1996, total loans amounted to $483.4
million, an increase of $17.4 million over December 31, 1995.
Total investments averaged $159.2 million in the first quarter of
1996. This compares to the previous quarter's average of $155.9 million.
Increased average federal funds provided the growth in this area. Federal
funds sold averaged $10.2 million or 1.5% of total average assets.
-11-
Total non-performing assets at March 31, 1996 were $1.5 million,
which represented .31% of Shoreline's total loan portfolio at that date.
This level of non-performing assets compares to December 31, 1995's ratio
of .35%. Non-performing assets include loans that are classified for
regulatory purposes as contractually past due 90 days or more, on non-
accrual status or "troubled debt restructurings" and other real estate
owned.
During the first quarter of 1996, Shoreline experienced net loan
charge-offs of $66,826 which represents only .01% of total average loans.
As a result, the Corporation lowered its quarterly provision for loan
losses from $175,000 in the fourth quarter of 1995 to $150,000 in the first
quarter of 1996. At March 31, 1996, Shoreline's allowance for loan losses
amounted to $6,687,325 which represents 1.38% of total loans and provides a
coverage of over 4 times the level of non-performing assets identified at
March 31, 1996. At December 31, 1995, the ratio of the allowance for loan
losses to total loans was 1.42%.
LIQUIDITY AND RATE SENSITIVITY
During the first quarter of 1996, Shoreline's loan to deposit
ratio was 79.6%. This represents a slight increase from the previous
quarter's ratio of 79.3%. As previously noted, during the first quarter,
average federal funds sold represented 1.5% of Shoreline's total assets.
Approximately $100 million or 68.8% of Shoreline's total securities
portfolio was classified as available for sale on March 31, 1996 and
$646,000 of loans were classified as held for sale. On March 31, 1996,
Shoreline had commitments to make or purchase loans, including the unused
portion of lines of credit, totaling $105 million.
-12-
On March 31, 1996, the cumulative funding gaps of interest-
earning assets and interest-bearing liabilities for selected maturity
periods are illustrated as follows:
<TABLE>
<CAPTION>
REPRICEABLE OR MATURING WITHIN:
0 TO 3 0 TO 12 0 TO 5
(000S) MONTHS MONTHS YEARS
<S> <C> <C> <C>
Interest-earning assets
Loans $ 166,901 $ 231,232 $425,674
Securities 14,156 29,789 116,852
Federal funds sold 14,825 14,825 14,825
Total $ 195,882 $ 275,846 $557,351
Interest-bearing liabilities
Time deposits $ 66,726 $ 178,277 $270,252
Demand deposits 89,695 89,695 89,695
Savings deposits 174,738 174,738 174,738
Other borrowings 3,573 7,573 12,573
Total $ 334,732 $ 450,283 $547,258
Asset/(Liability) Gap $(138,850) $(174,437) $ 10,093
</TABLE>
This table indicates that total liabilities maturing or repricing
within one year exceed assets maturing or repricing within one year by
$174.4 million. The same presentation as of December 31, 1995 produced a
liability gap of $156.6 million for the same time period. Competitive
pressures and other influences may cause certain assets and liabilities to
mature or reprice in other periods or at different volumes than indicated
above. Specifically, all demand and savings accounts are presented as
repricing in the 0-3 month period. Management believes that these types of
accounts are not as sensitive to changes in interest rates in the short
term as this presentation would indicate and that the positive funding gap
in the 1-5 year period is more reflective of the Corporation's experience.
CAPITAL RESOURCES
Total shareholders' equity amounted to $64.9 million on March 31,
1996. Included in this total are net unrealized gains on securities
available for sale totaling $1.5 million. During the first quarter of 1996,
Shoreline's Board of Directors approved and paid a cash dividend of $.20
per share. A summary of Shoreline's capital position follows:
-13-
<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
<S> <C> <C>
Equity to assets 9.43% 9.59%
Tier I leverage 8.86% 8.91%
Risk-based:
Tier I Capital 14.22% 14.56%
Total Capital 15.48% 15.81%
</TABLE>
RESULTS OF OPERATIONS
Net income for the quarter ended March 31, 1996 was $2,357,558,
an increase of 15.4% over the same period in 1995. Increased net interest
income resulting from increased volume along with reduced other expenses
produced the increase in earnings over the prior year. The following table
illustrates the effect that changes in rates and volumes of earning assets
and interest-bearing liabilities had on net interest income:
<TABLE>
THREE MONTHS ENDED MARCH 31
<CAPTION>
1996 1995
(000S)
<S> <C> <C>
Interest Income (taxable equivalent) $ 13,508 $ 12,551
Interest Expense 6,172 5,569
Net Interest Income $ 7,336 $ 6,982
Average Volume:
Interest-Earning Assets $632,926 $589,134
Interest-Bearing Liabilities 541,443 507,798
Net Differential $ 91,483 $ 81,336
Average Yields/Rates:
Yield on earning assets 8.56% 8.64%
Rate paid on liabilities 4.57% 4.45%
Interest Spread 3.99% 4.19%
Net Interest Margin 4.65% 4.80%
</TABLE>
-14-
The change in net interest income (in thousands) is attributable to the
following:
<TABLE>
<CAPTION>
VOLUME RATE INC/(DEC)
<S> <C> <C> <C>
Interest-Earning Assets $1,060 $(103) $957
Interest-Bearing Liabilities 428 175 603
Net Interest Income $ 632 $(278) $354
</TABLE>
Shoreline expensed $150,000 for the provision for loan losses in
the first quarter of 1996, reduced from the previous quarter's provision of
$175,000. The provision for loan losses is based upon loan loss experience
and such other factors which, in management's judgment, deserve current
recognition in maintaining an adequate allowance for loan losses.
Total other income for the quarter ended March 31, 1996 amounted
to $986,517, a decrease of $61,702 from the first quarter in 1995.
Increased trust and security transaction income did not offset declines in
service charge and other income. Trust income increased $40,121 or 12.1%
over the first quarter of 1995. Increased trust assets managed helped to
produce this increase. Gains from securities transactions totaled $70,639
during the first three months of 1996 compared to net losses of $30,856
during the three months ended March 31, 1995. Deposit service charge income
declined $39,552 from the prior year. Emphasis on relationship business
contributed to this decline. Other income totaled $125,458 in the first
quarter of 1996 which compares to $289,224 in the first quarter in 1995.
The resulting decline of $163,766 was caused primarily by two items. First,
in the first quarter of 1995, Shoreline recorded $99,419 of income from
credit card activities. However, during this same quarter, Shoreline
discontinued the majority of its credit card operations. The
discontinuance of this operation produced a decline of $90,345 in this
area. Second, Shoreline incurred losses of $61,867 from the sale of
mortgage loans in first quarter of 1996, which compares to net losses of
$9,847 during the same period in 1995.
Total other expense amounted to $4,639,615 for the quarter ended
March 31, 1996. This represents a reduction of $104,218 or 2.2% from the
same period in 1995. A decline of $387,343 in other expense contributed to
the overall decline in overhead expense. Reduced FDIC insurance, marketing
and credit card expense produce the decline in other expense. Personnel
expense increased 7.8% or $191,077 over the first quarter of 1995.
Increased full time equivalent levels resulting in increased salary expense
was the primary contributor to the overall increase in personnel expense.
Total occupancy and equipment expense increased $92,048 or 12.6% in
comparison to the first quarter of 1995. Increased repairs and maintenance
-15-
expense along with increased equipment depreciation expense contributed to
this increase in expense.
Shoreline's ratio of total other expenses to total average assets
decreased from 2.76% during the three months ended March 31, 1995 to 2.60%
in the three months ended March 31, 1996. Over the same period of time,
Shoreline's efficiency ratio has declined from 59.24% to 55.98%.
In summary, Shoreline's net income of $2,357,558 for the first
quarter of 1996 produced a return on average shareholders' equity of 14.45%
and a return on average assets of 1.40%. This compares to the prior year's
ratios of 14.22% and 1.31%, respectively. Earnings per share through March
31, 1996 were $.45 and dividends per share were $.20, which produces a
dividend payout ratio of 44.4%. Earnings per share through March 31, 1995
were $.39 and dividends per share were $.17.
-16-
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Shoreline Bank is a party, as plaintiff or defendant, to a number
of legal proceedings, none of which is considered material, and all of
which arose in the normal course of its operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. The following documents are filed as exhibits to
this report on Form 10-Q:
EXHIBIT
NUMBER DOCUMENT
3.1 Restated Articles of Incorporation. Previously filed as Exhibit
1(a) to the registrant's Quarterly Report on Form 10-Q for the
period ended September 30, 1994. Here incorporated by reference.
3.2 Bylaws. Previously filed as Exhibit 3(b) to the registrant's
Form S-1 Registration Statement filed March 23, 1990. Here
incorporated by reference.
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter covered
by this report.
-17-
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.
SHORELINE FINANCIAL CORPORATION
(Registrant)
Date May 15, 1996 /S/ DAN L. SMITH
Dan L. Smith
Chairman, President and Chief Executive
Officer
Date May 15, 1996 /S/ WAYNE R. KOEBEL
Wayne R. Koebel
Executive Vice President, Chief Financial
Officer, Secretary and Treasurer
-18-
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
3.1 Restated Articles of Incorporation. Previously filed as
Exhibit 1(a) to the registrant's Quarterly Report on Form
10-Q for the period ended September 30, 1994. Here
incorporated by reference.
3.2 Bylaws. Previously filed as Exhibit 3(b) to the
registrant's Form S-1 Registration Statement filed March
23, 1990. Here incorporated by reference.
27 Financial Data Schedule
-19-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF SHORELINE
FINANCIAL CORPORATION FOR THE PERIOD ENDED MARCH 31, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 29,955
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 14,825
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 99,997
<INVESTMENTS-CARRYING> 45,247
<INVESTMENTS-MARKET> 46,314
<LOANS> 483,391
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<DEPOSITS> 603,387
<SHORT-TERM> 3,573
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<LONG-TERM> 12,000
<COMMON> 0
0
0
<OTHER-SE> 64,905
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<INTEREST-LOAN> 10,671
<INTEREST-INVEST> 2,419
<INTEREST-OTHER> 133
<INTEREST-TOTAL> 13,223
<INTEREST-DEPOSIT> 6,040
<INTEREST-EXPENSE> 6,172
<INTEREST-INCOME-NET> 7,052
<LOAN-LOSSES> 150
<SECURITIES-GAINS> 71
<EXPENSE-OTHER> 4,640
<INCOME-PRETAX> 3,249
<INCOME-PRE-EXTRAORDINARY> 3,249
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,358
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
<YIELD-ACTUAL> 4.00
<LOANS-NON> 56
<LOANS-PAST> 5,843
<LOANS-TROUBLED> 0
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<ALLOWANCE-OPEN> 6,600
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<RECOVERIES> 67
<ALLOWANCE-CLOSE> 6,687
<ALLOWANCE-DOMESTIC> 3,551
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 3,136
</TABLE>
