Shore Community Bank Announces Second Quarter Earnings

The Bank also reported a net loss of $165,958 for the six months ended June 30, 2008, compared to net income of $312,501 reported in the same period a year ago. On a diluted basis, the net loss per share for the first half of 2008 was 10 cents compared to net income per share of 18 cents reported in the first half of 2007.

The Bank's total assets at June 30, 2008 were $211.2 million compared to $190.4 million at June 30, 2007, representing a 10.9 percent increase in total assets. Total loans at June 30, 2008 stood at $160.6 million compared to $146.1 million at June 30, 2007, an increase of 9.9 percent. Total deposits grew 7.2 percent to $176.0 million at June 30. 2008 compared to $164.2 million at June 30, 2007.

Theodore D. Bessler, President & Chief Executive Officer stated, "Our commercial loan portfolio has experienced several loan defaults necessitating charge-offs and write-downs of collateral mortgages to their current value. The Bank contributed $890,000 to the provision for loan losses for the six-month period as compared to $250,000 reported for the same period last year, increasing the provision by an additional $640,000."

As of June 30, 2008 total non-performing loans were $4,662,692, representing 2.9% of total loans outstanding of $160,616,482. Total real estate owned (REO) for the same period was $2,604,633. The Bank is actively seeking and negotiating with parties relating to the sale of these properties.

"We will continue to focus our lending efforts on good quality loans to local businesses within our trade area only. As a result of the challenges presented by present economic conditions, significant changes to our lending operations and policies have been adopted. As of June 30, 2008, the Bank remains in a strong capital position with an equity to asset ratio of 8.18% and is considered to be well capitalized," stated Mr. Bessler.

"Based on information currently available and the collateral position the bank maintains in the half dozen loans classified as non-performing, we anticipate that the bank will return to profitability in the third and fourth quarters of 2008," added Mr. Bessler.

Mr. Bessler further stated, "Our newest office commenced construction in May and we anticipate completion in early fall. This new branch facility should provide a strong local deposit and commercial loan base for the growth and profitability of this organization."

Shore Community Bank is traded on the OTCBB (Over the Counter Bulletin Board) under the symbol "SHRC."

Shore Community Bank operates five banking offices; three located inToms River, one inOrtley Beach, and one inJackson, New Jersey. The Bank was founded in 1997 by a group of local business leaders to return community-based banking to the Toms River,Ocean County, New Jersey area.

Information in this release relating to Shore Community Bank's future prospects which are forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the following: (1) operating, legal and regulatory risks, such as continued levels of loan quality and origination volume, continued relationships with major customers and technological changes; (2) economic, political and competitive forces affecting our banking business, such as changes in economic conditions, especially in our market area, interest rate fluctuations, competitive product and pricing pressures within our market, personal and corporate bankruptcies, monetary policy and inflation; (3) our ability to grow internally or through acquisitions; and (4) the risk that management's analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful. Forward-looking statements may be identified by the use of words such as "expects," "believe," "will," "intends," "will be," or "would." Shore Community Bank assumes no obligation to update the forward looking information in this announcement, except as required under applicable law.

SOURCE Shore Community Bank

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