Shore Financial Corporation (Nasdaq: SHBK) announced today that quarterly core earnings were $704,100, or $0.28 per diluted share, for the three months ended March 31, 2008, representing a 16.4% increase over core earnings of $604,900, or $0.24 per diluted share, for the same period of 2007. Impacting earnings was net interest income improvement of 11.1% as a result of a stronger net interest margin and loan growth when compared to the 2007 period.
Core earnings exclude merger related costs of $250,000 incurred in 2008 and gains from investment securities activities of $46,600 realized during the 2007 period. Including merger related costs, net income was $454,100, or $0.18 per diluted share, for the three months ended March 31, 2008.
The company's net interest margin for the 2008 quarter was 3.75%, compared to 3.46% during the March 2007 quarter. This 29 basis point increase resulted from a steeper yield curve existing during the March 2008 period as compared to the prior year period. Additionally, average loans outstanding during the 2008 quarter were $220.9 million, compared to $210.4 million during 2007, representing a 5.0% increase. These factors contributed to the increase in net interest income to $2.30 million during the 2008 quarter, compared to $2.07 million during the March 2007 quarter.
The company's core noninterest income increased to $847,800 during the March 2008 three month period, representing an 8.3% increase over core noninterest income of $782,700 during the 2007 period. Noninterest income benefited from 12.1% growth in deposit fees and a 15.3% increase in investment brokerage sales.
Core noninterest expense was $2.15 million during the March 2008 quarter, compared to $1.97 million during the 2007 three month period. Increased costs associated with adding the bank's eighth banking facility during September 2007 and leasing temporary locations while two new banking facilities are being constructed represented the largest impact on noninterest expense.
The company's assets were $267.1 million at March 31, 2008, including $220.6 million in gross loans outstanding at period end. Asset quality remained strong during the quarter with the bank's non current loan to total loan ratio being 1.05% at March 31, 2008, while the bank's allowance for loan losses to period end loans and to nonaccrual loans ratios were 1.22% and 272.84%, respectively. Management considers these levels manageable and commensurate with the risk existing in the bank's loan portfolio. -- Shore Financial Corporation
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