<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 10-Q
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1999
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 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, MI 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, 1999 there were 8,937,811 issued and outstanding shares of
the Registrant's Common Stock.
<PAGE>
SHORELINE FINANCIAL CORPORATION
FORM 10-Q
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets,
March 31, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Income,
Three Months Ended March 31, 1999 and 1998 4
Consolidated Statements of Comprehensive Income,
Three Months Ended March 31, 1999 and 1998 5
Condensed Consolidated Statements of Cash Flows,
Three Months Ended March 31, 1999 and 1998 6
Notes to Condensed Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
FORWARD-LOOKING STATEMENTS
This Form 10-Q Quarterly Report and the documents incorporated in this
report by reference contain forward-looking statements that are based on
management's beliefs, assumptions, current expectations, estimates and
projections about the financial services industry, that economy, and about
Shoreline Financial Corporation (Shoreline) itself. Words such as
"anticipates," "believes," "estimates," "expects," "plans," "projects,"
variations of such words and similar expressions are intended to identify
such forward-looking statements. Year 2000 related remediation, cost and
risk assessments are necessarily statements of belief as to the outcome of
future events, based in part on information provided by vendors and others
that Shoreline has not independently verified. These statements are not
guarantees of future performance and involve certain risks, uncertainties
and assumptions that are difficult to predict with regard to timing,
extent, likelihood, and degree of occurrence. Therefore, actual results
and outcomes may materially differ from what may be expressed, implied, or
forecasted in such forward-looking statements.
Future factors that could cause a difference between an ultimate actual
outcome and a preceding forward-looking statement include changes in
interest rates and interest rate relationships; demand for products and
services; the degree of competition by traditional and non-traditional
competitors; changes in banking regulations; changes in tax laws; and
changes in prices, levies, and assessments. Additionally, the impact of
technological advances; governmental and regulatory policy changes; the
outcomes of pending and future litigation and contingencies; trends in
customer behaviors as well as their ability to repay loans; the ability of
the companies on which Shoreline relies to make their computer systems Year
2000 compliant; the ability to locate and convert all relevant computer
codes and data; the vicissitudes of the national economy; the possibility
that expected cost savings from mergers might not be fully realized within
the expected time frame; and similar uncertainties could also cause a
difference between an actual outcome and a preceding forward-looking
statement. Shoreline undertakes no obligation to update, amend or clarify
the expected time frame or forward-looking statements, whether as a result
of new information, future events, or otherwise.
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
Cash and due from banks $ 37,464,238 $ 35,813,823
Interest earning deposits 18,000,000 20,300,564
Federal funds sold 11,275,000 15,775,000
------------ ------------
Total cash and cash equivalents 66,739,238 71,889,387
Securities held to maturity (fair values of
$24,060,000 and $26,180,000 on March 31,
1999 and December 31, 1998, respectively) 23,158,891 25,166,431
Securities available for sale (carried at fair value) 192,858,886 190,735,213
Total loans 635,909,786 635,159,424
Less allowance for loan losses 7,859,172 7,882,967
------------ ------------
Net loans 628,050,614 627,276,457
------------ ------------
Premises and equipment, net 13,792,633 13,728,130
Intangible assets, net 14,651,710 14,928,455
Other assets 12,048,365 11,540,291
------------ ------------
Total Assets $951,300,337 $955,264,364
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities
Deposits $786,655,604 $795,841,837
Securities sold under agreements to repurchase 19,249,826 18,191,030
FHLB advances 54,377,781 49,478,214
Other liabilities 5,057,736 4,542,157
------------ ------------
865,340,947 868,053,238
------------ ------------
3
<PAGE>
Shareholders' Equity
Common stock: 15,000,000 shares authorized;
8,979,044 and 9,056,769 shares issued
and outstanding at March 31, 1999 and December 31,
1998, respectively - -
Additional paid-in capital 68,327,888 69,759,199
Stock incentive plan (unearned shares) (852,446) (903,119)
Unrealized gain on securities available for sale 921,022 1,717,608
Retained earnings 17,562,926 16,637,438
------------ ------------
Total Shareholders' Equity 85,959,390 87,211,126
------------ ------------
Total Liabilities & Shareholders' Equity $951,300,337 $955,264,364
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
-----------------------------
<S> <C> <C>
INTEREST INCOME
Loans, including fees $13,142,217 $13,459,775
Securities 3,364,973 2,832,669
Money market investments 346,986 383,549
----------- -----------
Total interest income 16,854,176 16,675,993
INTEREST EXPENSE
Deposits 7,222,429 7,609,640
Repurchase agreements 161,420 102,465
Other borrowed funds 727,927 751,997
----------- -----------
Total interest expense 8,111,776 8,464,102
NET INTEREST INCOME 8,742,400 8,211,891
Provision for loan losses 120,000 150,000
----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 8,622,400 8,061,891
NON-INTEREST INCOME
Trust fees 567,611 482,147
Gain on sales and calls of securities 246,489 3,237
Gain on sales of mortgages 362,164 371,986
Other 942,769 954,354
----------- -----------
Total interest income 2,119,033 1,811,724
NON-INTEREST EXPENSE
Personnel 3,430,454 2,966,052
Occupancy 424,647 418,302
Equipment 558,779 546,209
Other 1,799,896 1,606,154
----------- -----------
Total interest expense 6,213,776 5,536,717
----------- -----------
Income before income tax 4,527,657 4,336,898
Federal income tax expense 1,422,324 1,304,450
----------- -----------
Net income $ 3,105,333 $ 3,032,448
=========== ===========
5
<PAGE>
Per share information:
Basic earnings per share $ 0.34 $ 0.34
=========== ===========
Diluted earnings per share $ 0.34 $ 0.34
=========== ===========
Dividends paid $ 0.18 $ 0.16
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
---------------------------
<S> <C> <C>
NET INCOME $3,105,333 $3,032,448
Other comprehensive income:
Unrealized gains/losses on securities arising
during the period 960,522 127,455
Reclassification adjustment for accumulated
gains/losses included in net income 246,426 -
Less: Tax effect 410,362 43,335
---------- ----------
Other comprehensive income 796,586 84,120
---------- ----------
COMPREHENSIVE INCOME $3,901,919 $3,116,568
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<PAGE>
<TABLE>
SHORELINE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
----------------------------
<S> <C> <C>
NET CASH FROM OPERATING ACTIVITIES $ 4,352,694 $ 4,008,747
----------- -----------
Cash flows from investing activities:
Net (increase)/decrease in loans (894,157) (536,755)
Securities available for sale:
Purchase (18,018,384) (19,423,465)
Proceeds from sales 2,482,090 -
Proceeds from maturities, calls and principal reductions 4,850,000 10,844,647
Securities held to maturity:
Purchase - -
Proceeds from maturities, calls and principal reductions 9,405,498 5,351,319
Premises and equipment expenditures (488,862) (271,503)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (2,663,815) (4,035,757)
----------- -----------
Cash flows from financing activities:
Net increase (decrease) in deposits (9,186,233) 27,035,913
Net increase in short-term borrowings 1,058,796 5,574,121
Proceeds from FHLB advances 8,000,000 20,000,000
Repayment of FHLB advances (3,100,433) (13,105,032)
Dividends paid (1,620,729) (1,423,394)
Proceeds from shares issued 328,965 356,431
Payments to retire common stock (2,319,394) (69,863)
----------- -----------
NET CASH FROM FINANCING ACTIVITIES (6,839,028) 38,368,176
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (5,150,149) 38,341,166
Cash and cash equivalents at beginning of year 71,889,387 44,981,440
----------- -----------
CASH AND CASH EQUIVALENTS AT MARCH 31 $66,739,238 $83,322,606
=========== ===========
8
<PAGE>
Cash paid during the year for:
Interest $ 8,450,559 $ 8,559,489
Income Taxes 0 0
</TABLE>
See accompanying notes to condensed consolidated financial statements
9
<PAGE>
SHORELINE FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of Shoreline Financial Corporation and its wholly
owned subsidiary, Shoreline Bank. In the opinion of management, all
adjustments, consisting only of recurring adjustments, considered necessary
for a fair presentation of the corporation's consolidated financial
position, results of operations and cash flows have been included.
Certain information and note disclosures normally included with financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted as allowed by the Securities and
Exchange Commission's interim reporting rules and regulations. The
accompanying condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in Shoreline's Annual Report on Form 10-K for the year ended
December 31, 1998.
NOTE 2 - NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
MARCH 31,
(in thousands) 1999 1998
- -------------------------------------------------------------------------
<S> <C> <C>
Non-accrual loans $ 806,000 $1,217,000
Restructured loans - -
Other real estate owned 659,000 379,000
---------- ----------
Total non-performing loans $1,465,000 $1,596,000
========== ==========
</TABLE>
10
<PAGE>
NOTE 3 - ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
MARCH 31,
(in thousands) 1999 1998
- -------------------------------------------------------------------------
<S> <C> <C>
Beginning balance $7,883,000 $7,588,000
Provision charged against income 120,000 150,000
Recoveries 90,000 104,000
Loans charged off (234,000) (163,000)
---------- ----------
Balance, end of period $7,859,000 $7,679,000
========== ==========
</TABLE>
At March 31, 1999, total loans considered impaired were $211,000 with an
average for the quarter of approximately $211,000. At March 31, 1998,
total loans considered impaired were $1,230,000 with an average for the
quarter of approximately $1,231,000. The allowance for impaired loans was
$106,000 and $615,000 at March 31, 1999 and 1998, respectively.
NOTE 4 - COMMON STOCK AND EARNINGS PER SHARE
A reconciliation of the numerators and denominators of the basic earnings
per share and diluted earnings per share computation follows.
<TABLE>
<CAPTION>
MARCH 31,
1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Basic earnings per share:
Net income available to common shareholders $3,105,000 $3,032,000
========== ==========
Weighted average shares outstanding 9,014,993 $8,894,180
Less: Non-vested stock incentive plan shares (39,278) (30,181)
---------- ----------
Basic weighted average shares outstanding 8,975,715 8,863,999
========== ==========
Basic earnings per share $ 0.34 $ 0.34
========== ==========
11
<PAGE>
Diluted earnings per share:
Net income available to common shareholders $3,105,000 $3,032,000
========== ==========
Basic weighted average shares outstanding 8,975,715 8,863,999
Add: Dilutive effect of stock options 37,144 58,086
Add: Dilutive effect of non-vested stock incentive
plan shares 9,001 11,530
---------- ----------
Diluted average shares outstanding 9,021,860 8,933,615
========== ==========
Diluted earnings per share $ 0.34 $ 0.34
========== ==========
</TABLE>
NOTE 5 - STOCK REPURCHASE PROGRAM
Shoreline's Board of Directors, at its February 1999 meeting, authorized
the purchase of up to 500,000 shares of the Corporation's common stock. It
is anticipated that these shares will be purchased by the Corporation in a
systematic program of open market and privately negotiated purchases, and
that they will be reserved for later reissue in connection with possible
future stock dividends, employee benefit plans, the company's dividend
reinvestment plan, and other general corporate purchases.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected Shoreline's financial condition and
results of operations during the periods specified in the condensed
consolidated financial statements included earlier in this filing.
RESULTS OF OPERATIONS
Shoreline's net income was $3.1 million for the first quarter of 1999, up
2.4% compared with $3.0 million for the same period in 1998. Diluted
earnings per share for both quarters were $.34.
Total assets were $951 million at March 31, 1999 and $955 million at
December 31, 1998. Return on average assets was 1.32% for the first
quarter of 1999 and 1.40% for the same period in 1998. Return on equity,
for the same comparable periods, was 14.50% and 15.73%, respectively.
Shoreline's net interest income on a fully taxable equivalent basis was
$9.1 million, a 6.4% increase over the $8.5 million recorded for the same
quarter of 1998 as the mix within earning assets and deposits was modified
for improved profitability. The net interest margin, annualized, was 4.09%
for the 1999 period and 4.16% for the 1998 period. The main reason for the
net interest margin decline was the lower interest rate environment, which
caused both the yields on earning assets and the rates paid on interest
bearing liabilities to decline.
Asset quality improvement, as indicated by the decrease experienced in the
non-performing assets to loans ratio (.27% versus .43% a year ago),
combined with slower than anticipated loan growth allowed management to
decrease the provision for loan losses to $120,000 from the $150,000
reported for March 31, 1998.
Non-interest income, excluding securities transactions, increased 3.5% over
the year ago quarter as trust income and service charges on deposit
accounts were up $85,000 and $64,000, respectively. Included in 1998's
operating income was a $138,000 gain on the sale of other assets. If this
nonrecurring event were excluded, other income would have increased 12.1%.
Securities gains, net, for the first quarter of 1999 were $246,000 compared
with gains of only $3,000 for the same period a year ago.
Non-interest expense was up 12.2%, as anticipated, for the quarter to
quarter comparison mainly as a result of ongoing investments in technology
and product enhancements to better serve Shoreline's customers. Salary and
benefits were up $464,000 due to normal merit increases and the additional
13
<PAGE>
staff added to support new and expanded product lines. Occupancy costs,
including furniture and equipment, remained basically unchanged from last
year's levels while total other expense increased as a result of higher
advertising, telephone and goodwill amortization expenses.
BALANCE SHEET CHANGES
Total interest earning assets at March 31, 1999 were down from year end as
interest bearing deposits and federal funds sold decreased a combined $6.8
million. Loans, however, increased $750,000 overall.
Total deposits were down $9.2 million primarily from decreases in demand
and time deposits. Savings deposits, however, were up from year-end 1998.
Borrowings increased $6.0 million in order to help fund loan growth and to
allow for investment in various opportunities such as a $5.1 million
portfolio of mortgage loans purchased at the end of February.
LIQUIDITY AND CAPITAL RESOURCES
The maintenance of an adequate level of liquidity is necessary to ensure
sufficient funds are available to meet customers' loan demand and deposit
withdrawals. Shoreline's liquidity sources consist of securities available
for sale, maturing loans and short term investments. Shoreline's liquidity
is also supported by is core deposits base.
At March 31, 1999, shareholders' equity was $86.0 million compared with the
$87.2 million recorded on December 31, 1998. The reasons for the decrease
in shareholders' equity were the repurchase of 89,297 shares of common
stock at an average price of $25.82, the quarterly dividend paid to all
common shareholders on March 15, 1999 and a $797,000 decrease in the
unrealized gain on securities available for sale. See the notes to the
financial statements earlier in this document for additional information
regarding the shares authorized for repurchase.
The table below represents Shoreline's consolidated regulatory capital
position as of March 31, 1999.
<TABLE>
<CAPTION>
Regulatory
Minimum Well-Capitalized March 31, 1999
<S> <C> <C> <C>
Risk based:
Tier 1 capital 4.00% 6.00% 12.13%
Total capital 8.00% 10.00% 13.37%
Tier 1 leverage 4.00% 5.00% 7.50%
</TABLE>
14
<PAGE>
YEAR 2000 READINESS DISCLOSURE
SHORELINE'S STATE OF READINESS - Shoreline does not develop or write its
own software systems. It utilizes off-the-shelf systems developed by
third-party vendors. In addition, it relies on third-party vendors for
various hardware and other services in executing daily operations. A total
inventory of all third-party systems and services has been prepared. Using
this inventory, Shoreline has asked for and received responses from all
third-party software, hardware and service providers as to their Year 2000
readiness and an assessment of those responses has been completed. In the
majority of cases, Shoreline's vendors have indicated their systems or
services to be Year 2000 compliant. Shoreline has successfully completed
comprehensive testing on its mainframe software and hardware systems and
believes that the favorable responses received from the third-party
providers were appropriate. In addition, Shoreline has successfully
completed testing of the majority of the other systems management considers
critical to its Year 2000 state of readiness. It is anticipated that
testing of these systems will be completed during the second quarter of
1999.
COSTS - Shoreline incurred expenses throughout 1998 related to this project
and continues to incur expenses in 1999. Based on available information,
these expenses are not expected to have a materially adverse impact on
operating results, financial condition, or liquidity. Significant portions
of these expenses are represented by existing staffs that have been
redeployed to this project. Estimates of incremental costs for remediation
over the remaining period of this project are $250,000.
RISKS - Shoreline believes its management has taken, and will continue to
take, all prudent actions needed to address Year 2000 issues. In addition,
it is acting to comply with directives provided by its regulators with
respect to the Year 2000 and has received on-site examinations from its
regulators to determine its readiness. While management anticipates
successful implementation of its Year 2000 Readiness Plan and believes its
current estimates of cost reasonable, it cannot guarantee actual results
will not materially differ from those anticipated, as it cannot assure that
all third parties upon which Shoreline relies will not have business
interruptions due to Year 2000 issues.
CONTINGENCY PLANS - Management is in the process of incorporating
contingency plans specific and unique to Year 2000 issues into its overall
disaster recovery plan. It is anticipated that this comprehensive
contingency plan will be completed by the end of the second quarter of
1999.
In addition to reviewing its own computer operating systems and
applications, Shoreline has initiated formal communications with its
15
<PAGE>
significant suppliers and large customers to determine the extent to which
Shoreline's interface systems are vulnerable to those third parties'
failure to resolve their Year 2000 issues. There is no assurance that the
systems of other companies on which Shoreline's systems rely will be timely
converted. If such modifications and conversions are not made, or are not
completed in a timely manner, the Year 2000 issue could have an adverse
impact on the operations of Shoreline.
The costs of the project and the date on which Shoreline believes it will
complete the Year 2000 modifications are based on management's best
estimates. There can be no guarantee that these estimates will be achieved
and actual results could differ from those anticipated. Specific factors
that might cause differences include, but are not limited to, the ability
of other companies on which Shoreline's systems rely to modify or convert
their systems to be Year 2000 compliant, the ability to locate and correct
all relevant computer codes, and similar uncertainties.
This Year 2000 Readiness Disclosure is based upon and partially repeats
information provided by Shoreline's outside consultants, vendors and others
regarding the Year 2000 readiness of Shoreline and its customers, vendors
and other parties. Although Shoreline believes this information to be
accurate, it has not in each case independently verified such information.
The Year 2000 statements contained in this report and in other reports
filed with the Securities and Exchange Commission by Shoreline are "Year
2000 Readiness Disclosures" under the Year 2000 Information and Readiness
Disclosure Act.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information concerning quantitative and qualitative disclosures about
market risk contained in Shoreline's Form 10-K Annual Report for its fiscal
year ended December 31, 1998, is incorporated herein by reference
Shoreline faces market risk to the extent that both earnings and the values
of its financial instruments are affected by changes in interest rates.
Shoreline manages this risk with static GAP analysis and simulation
modeling. Throughout the first three months of 1999, the results of these
measurement techniques were within Shoreline's policy guidelines.
Shoreline does not believe that there has been a material change in the
nature of Shoreline's primary market risk exposures, including the
categories of market risk to which Shoreline is exposed and the particular
markets that present the primary risk of loss to Shoreline. As of the date
of this Form 10-Q Quarterly Report, Shoreline does not know of or expect
there to be any material change in the general nature of its primary market
risk exposure in the near term.
16
<PAGE>
The methods used by Shoreline to manage its primary market risk exposures,
as described in the sections of its annual report incorporated herein by
reference in response to this item have not changed materially during the
current year. As of the date of this Form 10-Q Quarterly Report, Shoreline
does not expect to change its methods used to manage its market risk
exposures in the near term. However, Shoreline may change those methods in
the future to adapt to changes in circumstances or to implement new
techniques.
Shoreline's market risk exposure is mainly comprised of its vulnerability
to interest rate risk. Prevailing interest rates and interest rate
relationships in the future will be primarily determined by market factors
which are outside of Shoreline's control. All information provided in
response to this item consists of forward-looking statements. Reference is
made to the section captioned "Forward-Looking Statements" at the beginning
of this document for a discussion of the limitations on Shoreline's
responsibility for such statements.
17
<PAGE>
PART II. OTHER INFORMATION
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
3.1 to Shoreline's Quarterly Report on Form 10-Q for the period
ended June 30, 1998. Herein incorporated by reference.
3.2 Bylaws. Previously filed as Exhibit 3(b) to Shoreline's Form S-
1 Registration Statement filed March 23, 1990. Herein
incorporated by reference.
11 Statement Regarding Computation of Earnings per Common Share.
The computation of earnings per share is fully described in Note
4 of the Notes to the Condensed Consolidated Financial
Statements.
27 Financial Data Schedule for the Three Months Ended March 31,
1999.
(b) REPORTS ON FORM 8-K. None
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
SHORELINE FINANCIAL CORPORATION
(Registrant)
Date May 7,1999 /S/ DAN L. SMITH
Dan L. Smith
Chairman, President and Chief Executive Officer
Date May 7, 1999 /S/ WAYNE R. KOEBEL
Wayne R. Koebel
Executive Vice President, Chief Financial Officer
and Treasurer (Principal Financial and Accounting
Officer)
19
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
3.1 Restated Articles of Incorporation. Previously filed as Exhibit
3.1 to Shoreline's Quarterly Report on Form 10-Q for the period
ended June 30, 1998. Herein incorporated by reference.
3.2 Bylaws. Previously filed as Exhibit 3(b) to Shoreline's Form S-
1 Registration Statement filed March 23, 1990. Herein
incorporated by reference.
11 Statement Regarding Computation of Earnings per Common Share.
The computation of earnings per share is fully described in Note
4 of the Notes to the Condensed Consolidated Financial
Statements.
27 Financial Data Schedule for the Three Months Ended March 31,
1999.
20
<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, 1999 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-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 37,464
<INT-BEARING-DEPOSITS> 18,000
<FED-FUNDS-SOLD> 11,275
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 192,859
<INVESTMENTS-CARRYING> 23,159
<INVESTMENTS-MARKET> 24,060
<LOANS> 635,910
<ALLOWANCE> 7,859
<TOTAL-ASSETS> 951,300
<DEPOSITS> 786,656
<SHORT-TERM> 29,670
<LIABILITIES-OTHER> 5,058
<LONG-TERM> 43,948
<COMMON> 0
0
0
<OTHER-SE> 85,959
<TOTAL-LIABILITIES-AND-EQUITY> 951,300
<INTEREST-LOAN> 13,142
<INTEREST-INVEST> 3,365
<INTEREST-OTHER> 347
<INTEREST-TOTAL> 16,854
<INTEREST-DEPOSIT> 7,222
<INTEREST-EXPENSE> 81,112
<INTEREST-INCOME-NET> 8,742
<LOAN-LOSSES> 120
<SECURITIES-GAINS> 246
<EXPENSE-OTHER> 6,214
<INCOME-PRETAX> 4,528
<INCOME-PRE-EXTRAORDINARY> 4,528
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,105
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
<YIELD-ACTUAL> 2.80
<LOANS-NON> 806
<LOANS-PAST> 272
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,468
<ALLOWANCE-OPEN> 7,883
<CHARGE-OFFS> 234
<RECOVERIES> 90
<ALLOWANCE-CLOSE> 7,859
<ALLOWANCE-DOMESTIC> 5,305
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,554
</TABLE>
