SHORELINE FINANCIAL CORP, 10-Q, 1999-11-15

SHORELINE FINANCIAL CORP
10-Q, 1999-11-15
NATIONAL COMMERCIAL BANKS

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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 SEPTEMBER 30, 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 Identification No.)
Incorporation or Organization)

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 October 31, 1999 there were 11,001,004 issued and outstanding shares of the Registrant's Common Stock.

SHORELINE FINANCIAL CORPORATION
FORM 10-Q
INDEX

			Page
			Number

PART I. FINANCIAL INFORMATION

	Item 1. Financial Statements (Unaudited)

		Condensed Consolidated Balance Sheets, September 30, 1999 and December 31, 1998	4

		Condensed Consolidated Statements of Income, Three Months and Nine Months Ended September 30, 1999 and 1998	5

		Consolidated Statements of Comprehensive Income, Three Months and Nine Months Ended September 30, 1999 and 1998	6

		Condensed Consolidated Statements of Cash Flows, Nine Months Ended September 30, 1999 and 1998	7

		Notes to Condensed Consolidated Financial Statements	8-9

	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		10-13

	Item 3. Quantitative and Qualitative Disclosures about Market Risk		13

PART II. OTHER INFORMATION

	Item 6. Exhibits and Reports on Form 8-K		14

SIGNATURES			15

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, the 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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SHORELINE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

	September 30,		December 31,
	1999		1998

ASSETS
Cash and due from banks	$ 30,787,000		$ 35,814,000
Interest earning deposits	18,000,000		20,301,000
Federal funds sold	15,675,000		15,775,000
Total cash and cash equivalents	64,462,000		71,890,000
Securities held to maturity (fair values of
$18,854,000 and $26,180,000 on September 30,
1999 and December 31, 1998, respectively)	18,416,000		25,166,000
Securities available for sale (carried at fair value)	206,770,000		190,736,000
Total loans	679,631,000		635,159,000
Less allowance for loan losses	7,893,000		7,883,000
Net loans	671,738,000		627,276,000
Premises and equipment, net	14,759,000		13,728,000
Intangible assets, net	14,594,000		14,928,000
Other assets	13,409,000		11,540,000
Total Assets	$1,004,148,000		$955,264,000

LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities
Deposits	$ 805,041,000		$795,842,000
Securities sold under agreements to repurchase	20,722,000		18,191,000
FHLB advances	91,073,000		49,478,000
Other liabilities	7,174,000		4,542,000
Total Liabilities	924,010,000		868,053,000
Shareholders' Equity
Common stock: 15,000,000 shares authorized;
11,011,432 and 11,320,961 shares issued
and outstanding at September 30, 1999 and December 31,
1998, respectively	-		-
Additional paid-in capital	62,109,000		69,759,000
Stock incentive plan (unearned shares)	(775,000	)	(903,000	)
Unrealized gain on securities available for sale	(2,523,000	)	1,718,000
Retained earnings	21,327,000		16,637,000
Total Shareholders' Equity	80,138,000		87,211,000
Total Liabilities & Shareholders' Equity	$1,004,148,000		$955,264,000

See accompanying notes to condensed consolidated financial statements.

SHORELINE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	1999	1998	1999	1998
Interest income
Loans, including fees	$ 13,835,553	$ 13,496,716	$ 40,405,429	$ 40,472,079
Securities	3,594,913	3,087,835	10,446,674	8,717,655
Money market investments	355,458	685,078	1,039,592	1,647,990
Total interest income	17,785,924	17,269,629	51,891,695	50,837,724

Interest Expense
Deposits	7,143,278	7,673,698	21,347,983	22,855,777
Other	1,317,506	987,867	3,283,948	2,786,178
Total interest expense	8,460,784	8,661,565	24,631,931	25,641,955

Net interest income	9,325,140	8,608,064	27,259,764	25,195,769
Provision for loan losses	120,000	150,000	360,000	450,000
Net interest income after provision for loan losses	9,205,140	8,458,064	26,899,764	24,745,769
Non-interest income
Trust fees	597,817	505,433	1,734,898	1,499,864
Gain on sales and calls of securities	46,909	-	305,187	3,237
Gain on sales of mortgages	119,783	335,631	638,119	1,070,058
Other	1,208,323	980,211	3,474,950	2,987,478
Total non-interest income	1,972,832	1,821,275	6,153,154	5,560,637
Non-interest expense
Personnel	3,383,216	3,173,507	10,109,272	9,119,644
Occupancy	443,483	394,765	1,284,283	1,223,442
Equipment	592,132	525,044	1,731,088	1,593,719
Other	2,016,687	1,782,860	5,849,396	5,236,071
Total non-interest expense	6,435,518	5,876,176	18,974,039	17,172,876
Income before income taxes	4,742,454	4,403,163	14,078,879	13,133,530
Federal income tax expense	1,513,561	1,393,500	4,481,625	4,075,950
Net income	$3,228,893	$3,009,663	$9,597,254	$9,057,580

Per share information:
Basic earnings per share	$ 0.29	$ 0.26	$ 0.86	$ 0.81
Diluted earnings per share	$ 0.29	$ 0.26	$ 0.86	$ 0.81
Dividends paid	$ 0.15	$ 0.14	$ 0.43	$ 0.39

See accompanying notes to condensed consolidated financial statements.

SHORELINE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	1999		1998	1999		1998

Net income	$ 3,229,000		$ 3,010,000	$ 9,597,000		$ 9,058,000
Other comprehensive income:
Unrealized gains/losses on securities arising
during the period	(1,608,000	)	877,000	(7,275,000	)	815,000
Reclassification adjustment for accumulated
gains/losses included in net income	46,000		0	1,019,000		0
Less: Tax effect	(531,000	)	298,000	(2,127,000	)	277,000
Other comprehensive income	(1,031,000	)	579,000	(4,129,000	)	538,000
Comprehensive income	$ 2,198,000		$ 3,589,000	$ 5,468,000		$ 9,596,000

See accompanying notes to condensed consolidated financial statements.

SHORELINE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	September 30,
	1999		1998

Net cash from operating activities	$ 15,112,000		$ 10,209,000

Cash flows from investing activities:
Net (increase)/decrease in loans	(44,820,000	)	(2,504,000	)
Securities available for sale:
Purchase	(60,385,000	)	(77,343,000	)
Proceeds from sales	15,945,000		-
Proceeds from maturities, calls and principal reductions	28,604,000		33,984,000
Securities held to maturity:
Purchase	-		(4,954,000	)
Proceeds from maturities, calls and principal reductions	9,655,000		13,540,000
Premises and equipment expenditures	(2,151,000	)	(1,065,000	)
Net cash (paid)/received in acquisitions	(435,000	)	7,389,000
Net cash used in investing activities	(53,587,000	)	(30,953,000	)

Cash flows from financing activities:
Net increase (decrease) in deposits	(524,000	)	35,069,000
Net increase in short-term borrowings	2,531,000		8,049,000
Proceeds from FHLB advances	45,000,000		25,000,000
Repayment of FHLB advances	(3,406,000	)	(20,431,000	)
Dividends paid	(4,884,000	)	(4,417,000	)
Proceeds from shares issued	1,022,000		1,078,000
Payments to retire common stock	(8,691,000	)	(70,000	)
Net cash from financing activities	31,048,000		44,278,000

Net change in cash and cash equivalents	(7,427,000	)	23,534,000
Cash and cash equivalents at beginning of year	71,889,000		44,981,440
Cash and cash equivalents at September 30	$ 64,462,000		$ 68,515,440

Cash paid during the year for
Interest	$ 24,938,000		$ 25,618,000
Income Taxes	$ 2,050,000		$ 4,035,000

See accompanying notes to condensed consolidated financial statements

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

	September 30,
(in thousands)	1999	1998

Non-accrual loans	$1,296,000	$910,000
Restructured loans	--	--
Other real estate owned	157,000	418,000
Total non-performing loans	$1,453,000	$1,328,000

Note 3 - Allowance for Loan Losses

	September 30,
(in thousands)	1999		1998

Beginning balance	$7,883,000		$ 7,588,000
Provision charged against income	360,000		450,000
Recoveries	194,000		233,000
Loans charged off	(544,000	)	(558,000	)
Balance, end of period	$7,893,000		$7,713,000

At September 30, 1999, total loans considered impaired were $1,824,000 with an average for the quarter of approximately $2,378,000. At September 30, 1998, total loans considered impaired were $1,823,000 with an average for the quarter of approximately $1,985,000. The allowance for impaired loans was $912,000 and $993,000 at September 30, 1999 and 1998, respectively.

Note 4 - Common Stock and Earnings Per Share

Basic earnings per share were computed based on the average common shares outstanding for the periods presented. The calculation for diluted earnings per share further assumes the issuance of potentially dilutive common shares.

	1999	1998
Basic Average Shares Outstanding:
Three months ended September 30	11,028,759	11,361,076
Nine months ended September 30	11,128,067	11,193,454
Diluted Average Shares Outstanding:
Three months ended September 30	11,083,676	11,428,528
Nine months ended September 30	11,182,984	11,260,906

At the May Board of Directors meeting, the Directors approved a 5-for-4 stock split, payable July 2, 1999, to shareholders of record June 18, 1999. All per share information contained in this report has been restated to reflect the stock split.

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.

Note 6 - Branch Acquisition

On September 24, 1999, the acquisition of the Sister Lakes branch was completed. This transaction was accounted for as a purchase and added approximately $9.7 million to period end total deposits.

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

Third quarter net income was $3.2 million, up 7.3% from the $3.0 million earned during the same quarter last year. Diluted earnings per share were $.29 compared with $.26. For the first nine months of 1999, net income was $9.6 million, or $.86 per diluted share, an increase from the $9.1 million, or $.81 per diluted share, reported for 1998.

The return on average assets ratio for the third quarters of 1999 and 1998 were 1.30% and 1.31%, respectively. For year to date 1999 this ratio was 1.33% compared with 1.35% for the same period of 1998.

Shoreline's return on equity ratio for the third quarter of 1999 was 15.48%, up substantially from the 14.08% reported for the third quarter of 1998. The increase in this ratio was due primarily to higher earnings retention and the Company's stock repurchase program initiated last October. Additional information on the Company's stock repurchase program is included in the Notes to the Condensed Consolidated Financial Statements presented earlier in this report. Also affecting the comparison was the acquisition of The State Bank of Coloma on July 31, 1998 as 242,299 shares of Shoreline common stock, with a market value of $7 million, were issued in the transaction. The return on equity ratios for the first nine months of 1999 and 1998, annualized, were 15.06% and 14.95%.

Shoreline's net interest income on a fully taxable equivalent basis was $9.6 million, a 7.9% increase over the $8.9 million recorded for the third quarter of 1998 as the mix within earning assets and deposits was modified for improved profitability. Year to date, net interest income on a fully taxable equivalent basis was up 9.0% to $28.1 million. The net interest margin for both the quarterly and year to date periods remained stable despite the changing interest rate environment encountered over the last year. For the third quarters of 1999 and 1998, the net interest margin was 4.15% and 4.13%, respectively. On a year to date basis, the net interest margin was 4.15% for 1999 and 4.14% for the same period of 1998.

Asset quality remained strong with the non-performing assets to loans ratio improving to .27% from .28% a year ago. The net charge-offs to average loans ratio also improved. For year to date 1999, the net charge-offs to average loans ratio was .07% compared with .08% for the same period of 1998.

Non-interest income for the third quarter of 1999, excluding securities transactions, increased 5.8% over the year ago quarter as service charges on deposit accounts and trust income were up 18.3% and 24.4%, respectively. Year-to-date, non-interest income, excluding securities

transactions, increased 5.2%. Negatively affecting both the quarter and year-to-date comparisons was the decline in mortgage originations this year versus last year. Year-to-date, gains on the sale of mortgages were $638,000 down from the $1.1 million reported for the same period a year ago.

Securities gains, net, for 1999 were $305,000 compared with gains of $3,000 for the same period a year ago.

While non-interest expense was up 9.5% for the quarter to quarter comparison as a result of higher personnel and technology costs, net income per employee continued to improve, indicating that the money spent improved productivity and generated income. Year to date, non-interest expense was up 10.5% with salary and benefits expense up 10.9% due to normal merit increases and the additional staff added to support new and expanded product lines. Additional costs were also incurred during the year for testing and validating all of Shoreline's systems for the Year 2000.

Balance Sheet Changes

Total earning assets at September 30, 1999 were up 5.8% from year-end as loans increased $44.5 million or 7.0%. The increase in loans occurred primarily in the commercial loan portfolio, which increased 12.4% from year-end; however, consumer loans were also up 8.3% over the same time period.

Total deposits were up $9.2 million from year-end primarily as a result of the acquisition of the Sister Lakes branch on September 24, 1999. This transaction was accounted for as a purchase and added approximately $9.7 million to period end deposits.

Over the same time period, Federal Home Loan Borrowings increased $41.6 million. The increase was made to fund the company's loan growth and to enhance the Corporation's Year 2000 liquidity position.

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 its core deposits base.

At September 30, 1999, shareholders' equity was $80.2 million compared with the $87.2 million recorded on December 31, 1998. The decline in shareholders' equity was the result of the repurchase of 351,521 shares of common stock at an average price of $22.28, the quarterly dividends paid to common shareholders and a $4.2 million decrease in the unrealized gain on securities available for sale. See the Notes to the Condensed Consolidated Financial Statements presented 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 September 30, 1999.

	Regulatory
	Minimum	Well-Capitalized	September 30, 1999

Risk based:
Tier 1 capital	4.00%	6.00%	10.81%
Total capital	8.00%	10.00%	12.06%
Tier 1 leverage	4.00%	5.00%	6.98%

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. Testing of these systems was 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 staff that have been redeployed to this project. The estimated incremental cost for remediation over the remaining period of this project is $75,000.

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 has incorporated contingency plans specific and unique to Year 2000 issues into its overall disaster recovery plan. This comprehensive contingency plan was completed during the second quarter of 1999 and was tested during the third quarter of 1999.

In addition to reviewing its own computer operating systems and applications, Shoreline has initiated formal communications with its 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 nine 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.

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.

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 described in Note 4 of the Notes to the Condensed Consolidated Financial Statements.

27	Financial Data Schedule for the Nine Months Ended September 30, 1999.

(b)

Reports on Form 8-K. None

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 November 11, 1999	/s/ Dan L. Smith
	Dan L. Smith
	Chairman and Chief Executive Officer


Date November 11, 1999	/s/ Wayne R. Koebel
	Wayne R. Koebel
	Executive Vice President, Chief Financial Officer
	and Treasurer (Principal Financial and Accounting
	Officer)

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 described in Note 4 of the Notes to the Condensed Consolidated Financial Statements.

27	Financial Data Schedule for the Nine Months Ended September 30, 1999.