DATE: Tuesday, September 2, 1997            TAG: 9709020068

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   53 lines

SHORE BANK EARNINGS UP, INCOME DIPS

Shore Bank, an Eastern Shore thrift in the process of converting to a commercial bank, reported sharply higher earnings for its fourth quarter.

However, the Onley-based thrift said its net income for the fiscal year ended June 30 declined because of a one-time special assessment for deposit insurance.

Shore attributed the improvement in quarterly results to a one-time gain on the sale of a former branch and to growth in its loans.

Earlier this year, Shore disclosed plans to change its charter from an institution that concentrated on making home loans to a commercial bank.

``We've been evolving in that direction for a number of years,'' Scott C. Harvard, Shore's president and chief executive officer, said Friday.

The change would provide Shore with greater lending flexibility because federal banking regulations limit the percentage of assets that a thrift can devote to commercial and consumer loans.

Harvard said Shore expects to complete its conversion to a state-chartered bank by year-end. The proposed change still must be approved by its shareholders and by state and federal regulators.

For the April-through-June period, Shore reported net income of $353,000. That was up 39 percent from $254,000 in the fourth quarter of 1996.

Earnings per share rose to 26 cents from 18 cents.

For the full fiscal year, Shore's net income slipped 3 percent because of a $447,000 assessment paid to the Federal Deposit Insurance Corp. last September.

The one-time assessment, which was imposed on the nation's thrifts last year to bolster their deposit insurance fund, reduced Shore's 1997 net income to $946,000, or 69 cents a share.

That compared with net income of $972,000, or 71 cents a share, for fiscal 1996.

Without the special assessment for deposit insurance, its net income for the fiscal year would have increased 27 percent to $1.23 million, or 90 cents a share, Shore said.

Earlier this month, the thrift raised $3.1 million of fresh capital from the sale of 431,250 additional shares to existing stockholders and to other investors. The sale brought the number of its common shares to 1.8 million.

In a prospectus for the recent offering, Shore said it expected to use some of the proceeds to open another branch in the Salisbury, Md., area later this year and to continue its expansion. The thrift said it expects to have opportunities to buy bank branches and deposits in its Eastern Shore markets.

Shore, which opened for business in 1961, has four branches in Accomack and Northampton counties and one branch in Wicomico County, Md. At the end of June, its assets totaled $104.64 million.

The thrift's stock began trading last week in the Nasdaq National Market under the ticker symbol SHBK. It closed Friday at $11.75, up 37.5 cents for the day.

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