ShoreBank Corporation ended 2004 with $1.7 billion in consolidated assets, up $147 million from year-end 2003. Net loans grew by $105 million, primarily funded by a $102 million increase in deposits. ShoreBank Corporation's consolidated Shareholders' Equity, excluding comprehensive income, grew by $5.8 million to $97 million at year end. Net income accounted for all of the increase.

Consolidated net income for the holding company was $7.5 million, $454,000 more than last year but less than budgeted. ShoreBank Corporation incurred significant unanticipated losses in ShoreBank Advisory Services, which led to a complete strategic reassessment of the company, resulting in a plan to shed its MetroEdge business, simplify its lines of practice, and reduce its operating costs. In addition to this loss, several of the other subsidiaries did not achieve their budgeted net income or required greater holding company contributions than planned. In those companies, major changes are also underway to improve performance.

ShoreBank Corporation's Tier 1 Leverage Ratio was 7.15 percent at year-end, in excess of the 5 percent required to be considered well capitalized by federal bank regulators. ShoreBank Corporation's consolidated Total Capital to Risk-Weighted Assets Ratio ended the year at 11.77 percent, compared to the 10 percent required for well-capitalized bank holding companies. ShoreBank Corporation augmented its regulatory capital ratios in 2003 through the sale of $15 million in trust-preferred securities through a pool organized by Bear, Stearns & Co. Inc.

Certification of Financial Results

I, Ronald Grzywinski, the Chairman of the Board and Chief Executive Officer of ShoreBank Corporation, hereby certify that the information contained in the financial statements fairly presents, in all material respects, the financial position and results of operations of ShoreBank Corporation as of and for the periods presented.

Ronald Grzywinski , Chairman of the Board