EXHIBIT 99.1
Filed by Hampton Roads Bankshares, Inc.
pursuant to Rule 425 under the Securities Act of 1933,
as amended, and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934, as amended.
Subject Company: Shore Financial Corporation
Commission File No.: 000-23847
Strong Growth Reported by Hampton Roads Bankshares
NORFOLK, Va., April 28, 2008 (PRIME NEWSWIRE) -- Hampton Roads Bankshares, Inc. (Nasdaq:HMPR), the financial holding company for Bank of Hampton Roads, today announced its financial results for the first quarter of 2008. Although net income for the three months ended March 31, 2008, decreased 4.64% from the comparable period in 2007 to $1,461,279, the Company's total assets as of March 31, 2008, were $583 million or 16.25% ahead of $502 million a year ago. The majority of asset growth occurred in the loan portfolio with total loans increasing 19.86% to $485 million from $404 million a year earlier. Total deposits were also up 21.16% from $374 million a year ago to end the quarter at $453 million. Diluted earnings per share for first quarter of 2008 was $0.14 compared with $0.15 in the first quarter of 2007.
Jack W. Gibson, Vice Chairman, President and Chief Executive Officer, commented, "In 2007, our Company's balance sheet grew at record levels, with loans increasing at an average rate of $24 million each quarter. Funding this growth, especially in conjunction with Federal Reserve interest rate cuts, which totaled 200 basis points in the first quarter of 2008 and 300 basis points since last September, had a significant effect our net interest margin. The composition of our balance sheet with such rapidly falling interest rates has a greater and swifter impact on interest income compared with interest expense. As a result of funding loan growth and the interest rate cuts, our net interest margin decreased from 5.06% in the first quarter of 2007 to 3.98% in the current quarter. While certainly below our Bank's historical standards, I believe our net interest margin remains relatively strong compared to our peers."
Total interest income for the first quarter of 2008 was up 7.55% over first quarter 2007, but the Company's higher cost of funds led to a decrease in net interest income. Interest expense rose 30.02% in the first quarter of 2008 compared with the same period in 2007. Net interest income for first quarter 2008 was $5,386,339 compared to $5,653,601 in the same period last year.
Non-interest income for the first quarter of 2008 was $1,220,725, an increase of 32.12% over first quarter 2007. The increase was primarily attributable to gains from the sale of securities in the Company's investment portfolio. In spite of the Bank opening a new branch in Edinburgh in the first quarter of 2008 and the impact of additional management and compensation changes, non-interest expense increased only 2.04% from first quarter 2007 to $4,116,275.
The company's credit quality continues to remain strong. The nonperforming assets to total assets ratio was 0.32% on March 31, 2008, down slightly from 0.33% on March 31, 2007. To compensate for the strong growth in loans and the current economic environment, $270,000 was allocated to the loan loss reserve in the first quarter of 2008 compared to $222,000 in the first quarter of 2007.
Gibson further commented, "The last three months have likely been the most challenging time in the twenty year history of our Bank. Reporting record earnings to our shareholders each quarter has always been a great source of pride to me. However, what I don't talk about as often, what I am equally proud of and what may be most important is our Bank's commitment to safety and soundness. In particular, the consistent attention we afford to the credit quality of our loan portfolio. We believe that our prudent approach to banking is the right philosophy but even more so given the variable nature of the current economy. Even though our nonperforming assets to total assets ratio actually decreased from first quarter 2007, we increased significantly the provision to our loan loss reserve which stands at a strong 1.10% to total loans. We will continue this approach to ensure that our Bank's capital position is more than adequately protected. Bank of Hampton Roads has been awarded a 5-Star rating by Bauer F inancial for fifty-three consecutive quarters, or just over thirteen years. In addition, we were recently awarded a financial safety rating of 'A' by TheStreet.com Ratings. Both of these ratings signify excellent financial stability for our shareholders, customers and employees."
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. is a financial holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiary is Bank of Hampton Roads, which opened for business in 1987. The Bank engages in general community and commercial banking business, targeting the needs of individuals and small to medium-sized businesses. Currently, the Bank operates 18 banking offices in the Hampton Roads region of southeastern Virginia and is scheduled to open another this year. Shares of Hampton Roads Bankshares common stock are traded on the NASDAQ Global Select Market under the symbol HMPR. Additional information about the Company and its subsidiaries can be found on the Web at www.bankofhamptonroads.com.
Hampton Roads Bankshares Financial Highlights Unaudited Operating Results March 31, 2008 March 31, 2007 ----------------- -------------- -------------- Interest income $ 9,403,906 $ 8,743,551 Interest expense 4,017,567 3,089,950 ---------- ---------- Net interest income 5,386,339 5,653,601 Provision for loan losses 270,000 222,000 Noninterest income 1,220,725 923,976 Noninterest expense 4,116,275 4,033,878 Income taxes 759,510 789,377 ---------- ---------- Net income $ 1,461,279 $ 1,532,322 ========== ========== Earnings per share: Basic $ 0.14 $ 0.15 Diluted 0.14 0.15 Book value per share 7.20 6.92 Balance Sheet at Period-End ---------------- Total loans $484,680,722 $404,378,898 Total investments 32,219,010 58,280,380 Total deposits 453,151,453 374,024,493 Other borrowings 48,000,000 50,500,000 Shareholders' equity 74,631,051 71,038,056 Total assets 583,267,893 501,735,168 Daily Averages -------------- Total loans $480,646,061 $390,409,560 Total investments 45,570,785 58,630,433 Total deposits 442,812,567 366,493,759 Other borrowings 49,483,516 41,567,556 Shareholders' equity 74,107,673 70,422,332 Interest-earning assets 544,239,369 453,507,746 Interest-bearing liabilities 400,053,356 313,793,037 Total assets 573,610,878 484,542,560 Financial Ratios ---------------- Return on average assets 1.02% 1.28% Return on average equity 7.93% 8.82% Net interest margin 3.98% 5.06% Efficiency ratio 62.30% 61.33% Three Months Ended ------------------ Allowance for Loan Losses March 31, 2008 March 31, 2007 ------------- -------------- -------------- Beginning balance $5,042,583 $3,910,943 Provision for losses 270,000 222,000 Charge-offs -- -- Recoveries 7,503 759 Ending balance 5,320,086 4,133,702 Nonperforming Assets -------------------- Nonaccrual loans $1,454,363 $1,583,408 Loans 90 days past due and still 389,518 75,196 accruing interest Other real estate owned -- -- Total nonperforming assets 1,843,881 1,658,604 Asset Quality Ratios -------------------- Nonperforming assets to total assets 0.32% 0.33% Allowance for loan losses to total loans 1.10% 1.02% Allowance for loan losses to nonperforming assets 288.53% 249.23%
Additional Information and Where to Find It
On March 13, 2008, Hampton Roads Bankshares filed a registration statement on Form S-4, including a preliminary joint proxy statement/prospectus constituting a part thereof, with the Securities and Exchange Commission (the "SEC") containing information about Hampton Roads Bankshares' proposed merger with Shore Financial Corporation ("Shore Financial"). On April 17, 2008, Hampton Roads Bankshares filed the final joint proxy statement/prospectus on Form 424(b)(2) with the SEC. Shareholders of Hampton Roads Bankshares and Shore Financial are urged to read the registration statement and final joint proxy statement/prospectus filed with the SEC, and any other relevant materials filed or that will be filed, as they become available, because they will contain important information about Hampton Roads Bankshares, Shore Financial and the proposed merger. The final joint proxy statement/prospectus was first mailed to shareholders of Hampton Roads Bankshares and Shore Financial on or about Apri l 18, 2008. Investors and security holders of Hampton Roads Bankshares and Shore Financial may obtain a free copy of the final joint proxy statement/prospectus and other relevant documents (when they become available) and any other documents filed with the SEC at its website at www.sec.gov. Free copies of the joint proxy statement/prospectus and other relevant documents also may be obtained by directing a request by telephone or mail to the following:
Hampton Roads Bankshares, Inc. Shore Financial Corporation 999 Waterside Drive, Suite 200 25020 Shore Parkway Norfolk, VA 23510 Onley, Virginia 23418 Attention: Jack W. Gibson Attention: Scott C. Harvard Telephone Number: (757) 217-1000 Telephone Number: (757) 787-1335
Certain statements in this report may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts. Although the Company believes that its expectations with respect to certain forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors. For an explanation of the risks and uncertainties associated with forward-looking statements , please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2007, and other reports filed and furnished to the Securities and Exchange Commission.
CONTACT: Hampton Roads Bankshares, Inc. Tiffany K. Glenn, Senior Vice President and Marketing Officer (757) 217-1000