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                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                  FORM 10-KSB

[ X ]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
       1934
                     For the year ended December 31, 2000

                       Commission file number 000-23847

                          SHORE FINANCIAL CORPORATION
                          ---------------------------

            Virginia                                             54-1873994
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           (State or other jurisdiction of                  (I.R.S Employer
            incorporation or organization)               Identification No.)

                   25253 Lankford Highway, Onley, VA               23418
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             (Address of principal executive offices)         (ZCip Code)

        Issuer's telephone number, including area code:  (757) 787-1335

  Securities registered pursuant to Section 12(b) of the ExchangeC Act:  None

     Securities registered pursuant to Section 12(g) of the Exchange Act:

                        Common Stock ($0.33 par value)
                        ------------------------------
                               (Title of Class)

Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes  X  No___
                                                                       ---

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  [  ]

State Issuer's Revenues for its most recent fiscal year $9,834,000.

On March 1, 2001, the aggregate market value of the 1,788,367 shares of Common
Stock of the Registrant outstanding on such date, excluding shares held by
affiliates of the Registrant, was approximately $13.1 million.  This figure is
based on the closing price of $7.31 per share of the Registrant's Common Stock
on March 1, 2001.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of March 1, 2001:

                  Class                      Outstanding at March 1, 2001
        -----------------------------------------------------------------
          Common Stock, $0.33 par value               1,788,367

     DOCUMENTS INCORPORATED BY REFERENCE
(1)  Portions of the Registrant's 2000 Annual Report to the Shareholders are
     incorporated by reference in Part
     II hereof.
(2)  Portions of Registrant's 2001 Proxy Statement are incorporated by reference
     in Part III hereof.

Transitional Small Business Disclosure Format     Yes       No   X
                                                                ---

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                                    PART I
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          This Form 10-KSB contains certain forward-looking statements. For this
purpose any statements contained in this Form 10-KSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate" or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of factors.

Item 1.
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                            DESCRIPTION OF BUSINESS

General

          Shore Financial Corporation (the "Company") is a Virginia corporation
organized in September 1997 by Shore Bank (the "Bank") for the purpose of
becoming a unitary holding company of the Bank. The Company's assets consist of
its investment in the Bank and approximately $2.9 million in cash and other
investments.  The business and management of the company consists of the
business and management of the bank.  The Bank is a Virginia chartered, Federal
Reserve member commercial bank whose predecessor began business in 1961.  The
Company and the Bank are headquartered in Onley, Virginia.  The Bank operates
seven banking offices on the Eastern Shore of Virginia and Maryland, including
the counties of Accomack and Northampton in Virginia and Salisbury/Wicomico
County area in Maryland.  The Bank has a 20% market share of the banking
deposits in the Accomack and Northampton Counties in Virginia.  At December 31,
2000, the Company had assets of $139.8 million, Bank deposits of $115.9 million
and stockholders equity of $15.4 million.

          The Bank offers a full menu of banking products and services in the
communities it serves. For business customers, the Bank offers checking, cash
management, credit card merchant services, employee benefits, and a variety of
loan options including operating lines of credit, equipment loans, and real
estate loans. For consumers, the Bank has the only totally free checking account
available in its Virginia market, along with telephone banking services, safe
deposit boxes, a check card and the largest network of ATMs on the Eastern Shore
of Virginia. The Bank is a leading real estate lender in its Virginia markets.

          The Company also offers other services that complement the core
financial services offered by the Bank. The Company has an affiliate
relationship with the only independent trust company in Eastern Virginia that
provides a vehicle to offer trust and asset management services within the
Bank's markets. In March 1999, the Bank activated its subsidiary, Shore
Investments, Inc. (the "Subsidiary"), to provide non deposit investment products
including stocks, bonds, mutual funds, and insurance products through its
banking centers. The subsidiary has also invested in a Virginia title insurance
agency that enables it to offer title insurance policies to its real estate loan
customers.

          The Bank delivers its banking services through seven branch offices.
The Bank provides administrative support to its branch network through an
operations center located in Accomac, Virginia. The facility houses the Bank's
item processing and check imaging functions and enables the Bank to better serve
the Bank's branch network and provide superior customer service. Sixty-four
dedicated employees staff the Bank's facilities.

Market Area

          The Bank's headquarters, operations center, and five banking offices
are located in Accomack and Northampton Counties, which together form the
Eastern Shore of Virginia.  These two counties run approximately seventy miles
from the Maryland state line south and have thousands of miles of coastline on
the Chesapeake Bay and its tributaries on the west and the Atlantic Ocean on the
east.  They represent the southern portion of the DELMARVA (Delaware-Maryland-
Virginia) Peninsula.

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          The Eastern Shore of Virginia is 20 miles by bridge and tunnel from
Hampton Roads, Virginia (Norfolk, Virginia Beach, Portsmouth, Hampton), one of
the largest population centers in the country. Tourism and agriculture, along
with poultry and seafood processing are the predominant industries in the area.
The Nature Conservancy, caretaker of 47,000 acres of ecologically significant
real estate, has recently begun limited development while also acting as a
catalyst for compatible development in the area.

          In Northampton County a recently completed Eco-Industrial Park has
opened adjacent to a deep-water port with railroad access. The park is a model
for environmentally friendly industrial development. In addition, a 3,000 unit
gated community is scheduled to open in spring 2001 with the completion of an
Arnold Palmer designed golf course, to be followed by a second course designed
by golf legend Jack Nicklaus.

          Accomack County Virginia is the home to NASA's Wallops Island Space
Facility and the recently formed Virginia Space Port Authority as well as the
tourist destinations of Chincoteague Island and The Assateague National Wildlife
Refuge that draws over one million visitors annually.

          The Bank also has two banking offices in the Salisbury/Wicomico area
in the center of the Maryland section of the DELMARVA Peninsula. Approximately
175,000 people live within a 30-mile radius of Salisbury, which is the regional
hub for industry, commerce, health care, recreation and the arts. While home to
Perdue Farms, Peninsula Regional Medical Center, and Salisbury State University,
Salisbury's fastest growing industrial sector is the microwave or wireless
communications industry. Along with a strong and diversified industrial base,
wholesalers, retailers, and service firms serving ten counties in three states
have made Wicomico County a regional supply center for the Eastern Shore of
Delaware, Maryland, and Virginia.

Competition

          In its market area, the Bank competes with regional commercial banks
and independent community banks with multiple offices on the Eastern Shore.
These and certain other non-bank competitors may have much greater financial
resources, diversified markets, and branch networks than the Bank and may be
able to offer similar services at varying costs with higher lending limits.
With nationwide banking, the Bank also faces the prospect of additional
competitors entering its market area.

          The Bank faces strong competition both in originating loans and in
attracting deposits. Competition in originating loans comes primarily from
commercial banks and mortgage lenders and to a lesser extent consumer finance
companies, credit unions, and savings institutions. The Bank competes for loans
principally on the basis of the interest rates and loan fees it charges, the
types of loans it originates and the quality of service it provides to
borrowers.

          The Bank faces substantial competition in attracting deposits from
other banks, money market and mutual funds, credit unions and other investment
vehicles. The ability of the Bank to attract and retain deposits depends on its
ability to provide an investment opportunity that satisfies the requirements of
investors as to rate of return, liquidity, risk, convenience and other factors.
The Bank competes for these deposits by offering a variety of deposit accounts
at competitive rates, having convenient business hours, and by marketing its
position as the only locally-owned independent bank on the Eastern Shore of
Virginia.

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Credit Policies

          The principal risk associated with each of the categories of loans in
the Bank's portfolio is the creditworthiness of its borrowers. Within each
category, such risk is increased or decreased, depending on prevailing economic
conditions. The Bank employs extensive written policies and procedures to
enhance management of credit risk. The loan portfolio is managed under a
specifically defined credit process. This process includes formulation of
portfolio management strategy, guidelines for underwriting standards and risk
assessment, procedures for ongoing identification and management of credit
deterioration, and regular portfolio reviews to estimate loss exposure and to
ascertain compliance with the Bank's policies. The largest unsecured and secured
individual lending authority currently granted by the Bank is $50,000 and
$100,000, respectively. The President and the Chief Lending Officer may
individually approve unsecured loans up to $50,000 and secured loans up to
$100,000. The President and the Chief Lending Officer may together approve
unsecured loans between $50,000 and $100,000 and secured loans between $100,000
and $200,000. The Loan Committee approves loan applications in excess of
$200,000 secured and $100,000 unsecured on a weekly basis. The Loan Committee
consists of the President and one additional director, with the directors
rotating their service on this committee on a monthly basis. The Board of
Directors must approve all loan applications in excess of $300,000.

          In the normal course of business, the Bank makes various commitments
and incurs certain contingent liabilities that are disclosed but not reflected
in its annual financial statements, including commitments to extend credit.  At
December 31, 2000, commitments to extend credit totaled $16.7 million.

          One- to Four-Family Residential Real Estate Lending. The Bank's
primary lending program has been the origination of loans secured by one- to
four-family residences, virtually all of which have been located in its market
area. The Bank evaluates both the borrower's ability to make principal and
interest payments and the value of the property that will secure the loan.
Federal law permits the Bank to make loans in amounts of up to 100% of the
appraised value of the underlying real estate. Loans are made with a loan to
value up to 90% for conventional mortgage loans on primary residences. The Bank
generally originates mortgage loans that have an adjustable rate feature in
which the rate changes every one, three or five years. Most adjustable rate
loans are tied to comparable maturity U.S. Treasury Bills. Where loans are not
indexed, they generally have a balloon feature. However, the Bank does offer
fifteen year fixed rate home equity and purchase money mortgages and experienced
significant growth in this product during 2000. There are unquantifiable risks
resulting from potential increased costs to the borrower as a result of
repricing. Accordingly, it is possible that, during periods of rising interest
rates, the risk of defaults on adjustable rate mortgages ("ARMs") may increase
due to the upward adjustment of interest costs to borrowers.

          Construction Lending.  The Bank makes local construction loans,
primarily residential and small commercial loans.  The construction loans are
secured by the property for which the loan was obtained.  At December 31, 2000,
construction loans outstanding were $923,000, or 1.0%, of gross loans. The
average life of a construction loan is less than twelve months and they either
reprice daily based on the prime rate or are fixed during the construction
period. Construction lending entails significant additional risks, compared with
residential mortgage lending. Construction loans involve risks attributable to
the fact that loan funds are advanced upon the security of the home under
construction, which is of uncertain value prior to the completion of
construction. Thus, it is more difficult to evaluate accurately the total loan
funds required to complete a project and related loan-to-value ratios. To
minimize the risks associated with construction lending, the Bank limits loan
amounts to 80% of appraised value, in addition to its usual credit analysis of
its borrowers. Additionally, the Bank's officers make regular inspections of
construction projects prior to disbursement of loan funds. The Bank also obtains
a first lien on the property as security for its construction loans.

          Commercial Real Estate Lending.  The Bank also originates commercial
real estate loans.  Various types of commercial real estate secure these loans,
including multifamily residential buildings,

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commercial buildings and offices. At December 31, 2000, commercial real estate
loans aggregated $21.8 million or 23.5% of the Bank's gross loans. The interest
rates on commercial real estate loans are usually fixed for 1 to 3 years, with
either a balloon feature or an additional rate increase feature. Commercial real
estate loans made by the Bank generally amortize over 5 to 15 years and may have
a call provision of 3 or 5 years. The Bank's commercial real estate loans are
secured by properties in its market area.

          In its underwriting of commercial real estate, the Bank may lend,
under federal regulation, up to 100% of the security property's appraised value,
although the Bank's loan to original appraised value ratio on such properties is
80% or less in most cases. Commercial real estate lending entails significant
additional risk, compared with residential mortgage lending. Commercial real
estate loans typically involve larger loan balances concentrated with single
borrowers or groups of related borrowers.  Additionally, the payment experience
on loans secured by income producing properties is typically dependent on the
successful operation of a business or a real estate project and thus may be
subject to adverse conditions in the real estate market or in the economy
generally. The Bank's commercial real estate loan underwriting criteria require
an examination of debt service coverage ratios, the borrower's creditworthiness
and prior credit history and reputation, and the Bank generally requires
personal guarantees or endorsements of borrowers.

          Commercial Loans. At December 31, 2000, commercial loans aggregated
$5.1 million or 5.5% of the Bank's gross loans. Commercial business loans
generally have a higher degree of risk than residential mortgage loans, but have
commensurably higher yields. To manage these risks, the Bank generally secures
appropriate collateral and carefully monitors the financial condition of its
business borrowers. Commercial business loans typically are made on the basis of
the borrower's ability to make repayment from the cash flow from its business
and are often secured by business assets, such as accounts receivable, equipment
and inventory. As a result, the availability of funds for the repayment of
commercial business loans may be substantially dependent on the success of the
business itself. Further, the collateral for commercial business loans may
depreciate over time and cannot be appraised with as much precision as
residential real estate. The Bank has a credit review and monitoring system to
regularly review the cash flow and collateral of commercial borrowers.

          Consumer Lending. The Bank offers various secured and unsecured
consumer loans, including unsecured personal loans and lines of credit, home
equity lines of credit, automobile loans, deposit account loans, installment and
demand loans, and letters of credit. At December 31, 2000, the Bank had consumer
loans of $17.6 million or 19.1% of gross loans. Such loans are generally made to
customers with whom the Bank has a preexisting relationship and are generally in
amounts of under $75,000. The Bank originates all of its consumer loans in its
market area and intends to continue its consumer lending in this geographic
area.

          Consumer loans may entail greater risk than do residential mortgage
loans, particularly in the case of consumer loans that are unsecured, such as
lines of credit, or secured by rapidly depreciable assets such as automobiles.
In such cases, any repossessed collateral for a defaulted consumer loan may not
provide an adequate source of repayment of the outstanding loan balance as a
result of the greater likelihood of damage, loss or depreciation. The remaining
deficiency often does not warrant further substantial collection efforts against
the borrower. In addition, consumer loan collections are dependent on the
borrower's continuing financial stability, and thus are more likely to be
adversely affected by job loss, divorce, illness or personal bankruptcy.
Furthermore, the application of various federal and state laws, including
federal and state bankruptcy and insolvency laws, may limit the amount which can
be recovered on such loans.

Employees

          At December 31, 2000, the Bank had 53 full-time and 14 part-time
employees.  The Bank considers relations with its employees to be good.

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Regulation and Supervision

          Set forth below is a brief description of certain laws and regulations
that relate to the regulation of the Company and the Bank. The descriptions of
these laws and regulations, as well as descriptions of laws and regulations
contained elsewhere herein, do not purport to be complete and are qualified in
their entirety by reference to applicable laws and regulations.

The Company

          General.  The Company, as a bank holding company, is subject to
regulation under the Bank Holding Company Act of 1956 (the "BHCA") and the
regulation, supervision and examination requirements of the Board of Governors
of the Federal Reserve System (the "Federal Reserve"). Bank holding companies
are subject to extensive regulation by the Federal Reserve as set forth in
Regulation Y, 12 C.F.R. Regulation Y establishes the registration, reporting,
examination, applications, acquisitions, control and divestiture, change in bank
control, appraisals, and change in director and senior executive officers
requirements applicable to bank holding companies. Regulation Y and the
interpretations and rulings issued by the Federal Reserve thereunder identify
various prohibited non-banking activities in which bank holding companies and
their subsidiaries may not engage as well as various exempt activities in which
a bank holding company and its subsidiaries may engage either with or, in some
cases, without prior Federal Reserve approval. Regulation Y further confirms the
authority of the Federal Reserve under the BHCA to impose criminal and civil
penalties for violations of the BHCA and the regulations and orders issued
thereunder and to issue cease and desist orders when necessary in connection
therewith.

          Activities Obligations and Restrictions. There are a number of
obligations and restrictions imposed on bank holding companies and their
depository institution subsidiaries that are designed to reduce potential loss
exposure to the depositors of the depository institutions and to the FDIC
insurance funds. For example, under a policy of the Federal Reserve with respect
to bank holding company operations, a bank holding company is required to serve
as a source of financial strength to its subsidiary depository institutions and
to commit resources to support such institutions in circumstances where it might
not do so absent such policy.  In addition, the "cross-guarantee" provisions of
federal law require insured depository institutions under common control to
reimburse the FDIC for any loss suffered or reasonably anticipated by either the
Savings Association Insurance Fund (the "SAIF") or the Bank Insurance Fund (the
"BIF") as a result of the default of a commonly controlled insured depository
institution or for any assistance provided by the FDIC to a commonly controlled
insured depository institution in danger of default.  The FDIC may decline to
enforce the cross-guarantee provisions if it determines that a waiver is in the
best interest of the SAIF or the BIF or both.  The FDIC's claim for damages is
superior to claims of stockholders of the insured depository institution or its
holding company but is subordinate to claims of depositors, secured creditors
and holders of subordinated debt (other than affiliates) of the commonly
controlled insured depository institutions.

          Banking laws also provide that amounts received from the liquidation
or other resolution of any insured depository institution by any receiver must
be distributed (after payment of secured claims) to pay the deposit liabilities
of the institution prior to payment of any other general or unsecured senior
liability, subordinated liability, general creditor or stockholder. This
provision would give depositors a preference over general and subordinated
creditors and stockholders in the event a receiver is appointed to distribute
the asset of any bank or savings bank subsidiaries.

          The restriction on interstate acquisitions by bank holding companies
was abolished effective September 1995, and bank holding companies from any
state are able to acquire banks and bank holding companies located in any other
state, subject to certain conditions, including nationwide and state imposed
concentration limits. Banks are able to branch across state lines by
acquisition, merger or de novo (unless state law would permit such interstate
branching at an earlier date), provided certain conditions are met, including
that applicable state law must expressly permit such interstate branching.

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The Bank

          General.  As a state chartered commercial bank, the Bank is subject to
regulation, supervision and examination requirements of the Virginia State
Corporation Commission's ("SCC") Bureau of Financial Institutions. The Bank is
also subject to the regulation, supervision and examination requirements of the
Federal Reserve Board and the Federal Deposit Insurance Corporation. State and
federal laws also govern the activities in which the Bank may engage, the
investments it may make and the aggregate amount of loans that may be granted to
one borrower. Various consumer and compliance laws and regulations also affect
the Bank's operations. The Federal Reserve and the SCC conduct periodic
examinations to test the Bank's compliance with various regulatory requirements.
The Federal Reserve completed its most recent examination in June 2000.  In
November 1998, the Federal Reserve completed a compliance examination of the
Bank.

          Insurance of Accounts.  The FDIC up to the limits set forth under
applicable law insures the deposits of the Bank. A majority of the deposits of
the Bank are subject to the deposit insurance assessments of the SAIF. However,
a portion of the Bank's deposits is subject to assessments imposed by BIF. The
FDIC equalized the assessment rates for BIF-insured and SAIF-insured deposits
effective January 1, 1998. The assessments imposed on all FDIC deposits for
deposit insurance have an effective rate ranging from 0 to 27 basis points for
$100 of insured deposits, depending on the institutions capital position and
other supervisory factors. Legislation was enacted in 1997 requiring both SAIF-
insured and BIF-insured deposits to pay a pro rata portion of the interest due
on the obligations issued by the Financing Corporation ("FICO"). The FICO
currently assesses BIF-insured and SAIF-insured deposits an additional 2.12
basis points per $100 of deposits to cover those obligations.

          Regulatory Capital Requirements.  The Company and the Bank are subject
to various regulatory capital requirements administered by the federal banking
agencies. Generally, the Company and the Bank are required to maintain a minimum
ratio of total capital to risk-weighted assets of 8%. Failure to meet minimum
capital requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the Company's financial statements.  Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Company and the Bank must meet specific capital guidelines that involve
quantitative measures of assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices.  The capital amounts
and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.

          Quantitative measures established by regulation to ensure capital
adequacy require the Company and its the Bank to maintain minimum amounts and
ratios of total and Tier I capital (as defined in the regulations) to risk-
weighted assets (as defined), and of Tier I capital (as defined) to average
assets (as defined). Management believes, as of December 31, 2000, that the
Company meets all capital adequacy requirements to which it is subject. In fact,
at December 31, 2000, the Bank exceeded all of its regulatory capital
requirements, with total capital to risk-weighted assets, tier 1 capital to
risk-weighted assets and tier 1 capital to average assets ratios of 14.21%,
14.30% and 9.59%, respectively.

          Capital Distributions. The Bank is subject to legal limitations on
capital distributions including the payment of dividends, if, after making such
distribution, the institution would become "undercapitalized" (as such term is
used in the statute). For all state member banks of the Federal Reserve seeking
to pay dividends, the prior approval of the applicable Federal Reserve Bank is
required if the total of all dividends declared in any calendar year will exceed
the sum of the bank's net profits for that year and its retained net profits for
the preceding two calendar years. Federal law also generally prohibits a
depository institution from making any capital distribution (including payment
of a dividend or payment of a management fee to its holding company) if the
depository institution would thereafter fail to maintain capital above
regulatory minimums. Federal Reserve Banks are also authorized to limit the
payment of dividends by any state member bank if such payment may be deemed to
constitute an unsafe or unsound

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practice. In addition, under Virginia law, no dividend may be declared or paid
that would impair a Virginia chartered bank's paid-in capital. The SCC has
general authority to prohibit payment of dividends by a Virginia chartered bank
if it determines that the limitation is in the public interest and is necessary
to ensure the bank's financial soundness.

     Financial Modernization Legislation. The Gramm-Leach-Bliley Act of 1999
("GLBA") was signed into law on November 12, 1999. The main purpose of GLBA is
to permit greater affiliations within the financial services industry, primarily
banking, securities and insurance. The provisions of GLBA that are believed to
be of most significance to the Company are discussed below.

     GLBA repeals sections 20 and 32 of the Glass-Steagall Act, which separated
commercial banking from investment banking, and substantially amends the BHCA,
which limited the ability of bank holding companies to engage in the securities
and insurance businesses. To achieve this purpose, GLBA creates a new type of
company, the "financial holding company." A financial holding company may engage
in or acquire companies that engage in a broad range of financial services,
including

  .  Securities activities such as underwriting, dealing, brokerage, investment
     and merchant banking; and

  .  Insurance underwriting, sales and brokerage activities.

A bank holding company may elect to become a financial holding company only if
all of its depository institution subsidiaries are well-capitalized, well-
managed and have at least a satisfactory Community Reinvestment Act rating.
However, the Company has not elected to be treated as a financial holding
company under GLBA at this time.

     GLBA establishes a system of functional regulation under which the federal
banking agencies will regulate the banking activities of financial holding
companies and their financial subsidiaries, the Securities and Exchange
Commission ("SEC") will regulate their securities activities and state insurance
regulators will regulate their insurance activities.

     With regard to Federal securities laws, GLBA removes the blanket exemption
for banks from being considered brokers or dealers under the Securities Exchange
Act of 1934, and sets out a number of limited activities, including trust and
fiduciary activities, in which a bank may engage without being considered a
broker, and a set of activities in which a bank may engage without being
considered a dealer.  The Investment Advisers Act of 1940 also will be amended
to eliminate certain provisions exempting banks from the registration
requirements of that statute, and the Investment Company Act of 1940 will be
amended to provide the SEC with regulatory authority over various bank mutual
fund activities.

     GLBA contains extensive customer privacy protection provisions. Under these
provisions, a financial institution must provide to its customers, at the
inception of the customer relationship and annually thereafter, the
institution's policies and procedures regarding the handling of customers'
nonpublic personal financial information. The act provides that, except for
certain limited exceptions, an institution may not provide such personal
information to unaffiliated third parties unless the institution discloses to
the customer that such information may be so provided and the customer is given
the opportunity to opt out of such disclosure. An institution may not disclose
to a nonaffiliated third party, other than to a consumer reporting agency,
customer account numbers or other similar account identifiers for marketing
purposes. GLBA provides that states may adopt customer privacy protections that
are more strict than those contained in the act. The act also contains
requirements for the posting of notices by operators of automated teller
machines regarding fees charged for the use of such machines.

     Many of GLBA's provisions, including the customer privacy protection
provisions, require the Federal bank regulatory agencies and other regulatory
bodies to adopt regulations to implement those respective provisions. Most of
the required implementing regulations have been proposed and/or adopted by the
bank regulatory agencies as of December 31, 2000. Neither the provisions of GLBA
nor the act's

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implementing regulations as proposed or adopted have a material impact on the
Company's or the Bank's regulatory capital ratios (as discussed above) or
ability to continue to operate in a safe and sound manner.

Federal Taxation

     General. The Company and the Bank are subject to the applicable corporate
tax provisions of the Internal Revenue Code of 1986, as amended (the "Code"), as
well as certain additional provisions of the Code that apply to banks and other
types of financial institutions. The following discussion of tax matters is
intended only as a summary and does not purport to be a comprehensive
description of the tax rules applicable to the Company and the Bank.

     Under the applicable statutes of limitation, the Bank's federal income tax
returns for 1995 through 1998 are open to examination by the Internal Revenue
Service (the "Service"). During April 2000, the Service examined the Bank's
December 1997 income tax return. The examination resulted in no significant
adjustments to the 1997 return.

     Historically, the Bank has reported its income and expenses on the accrual
method of accounting and filed its federal income tax returns on a June 30
fiscal year basis. Effective December 29, 1997, the Bank changed its year end to
a calendar year basis for financial and income tax reporting purposes. The
Company's fiscal year end is also December 31.

     Bad Debt Reserves. Prior to 1996, savings institutions such as the Bank
that met certain definitional tests primarily relating to their assets and the
nature of their business ("Qualifying Thrifts") were permitted to establish a
reserve for bad debts and to make annual additions thereto, which additions
could, within specified formula limits, be deducted by the savings institutions
in arriving at their taxable income. For purposes of the bad debt deduction,
loans were separated into "qualifying real property loans" (which are, in
general, loans secured by interests in improved real property or real property
which is to be improved out of the proceeds of the loan) and "nonqualifying
loans" (which are all other loans).

     During 1996, new tax legislation was enacted that repealed the reserve
method of accounting for bad debts of qualified thrift institutions and, for
years after 1995, the Bank will only be eligible to claim tax deductions for bad
debts under the rules for banks. Because the Bank was a small thrift institution
(one with an adjusted basis of assets of less than $500 million) at that time it
is permitted to compute its bad debt deduction using the experience method in
lieu of deducting bad debts only as they occur. Additionally, the new
legislation requires a thrift institution to recapture over a six-year period
its reserve as of December 31, 1995, to the extent it exceeds its reserve
balance at December 31, 1987. As a result of such legislation, the Bank is
recapturing into taxable income approximately $497,000 ratably over six fiscal
years. The income is includable over the third through eighth years following
the fiscal year ending June 30, 1997, since the Bank meets the residential loan
requirement exception in the legislation. See Note 2 of the notes to the
financial statements.

     The Bank's retained earnings at December 31, 2000 included approximately
$783,000 representing that portion of the Bank's reserve for bad debts for which
no provision for income taxes has been made.  Under legislation passed in 1996,
this amount was not subject to federal income taxes upon the Bank converting
from a federal savings bank to a state chartered commercial bank.  However, the
Bank is subject to the same recapture provisions it was subject to as a savings
association.

     Corporate Minimum Tax. The Bank could be subject to an alternative minimum
tax ("AMT") that is imposed to the extent that it exceeds the Bank's regular tax
liability for a year. The alternative minimum tax generally will apply at a rate
of 20% to a base of regular taxable income plus certain tax

                                       9
<PAGE>

preferences and adjustments ("alternative minimum taxable income" or "AMTI"),
less an exemption amount. Currently no more than 90% of the AMTI may be offset
by net operating losses (as determined for AMTI purposes). Payment of the AMT
may be used as a credit against a portion of the regular tax liabilities in
future years. The Code provisions relating to the AMT also: (i) treat as a
preference item interest on certain tax-exempt private activity bonds issued on
or after August 8, 1986; and (ii) include in AMTI (for tax years beginning after
1989) an amount equal to 75% of the amount by which a corporation's adjusted
current earnings exceed its AMTI (determined without regard to this preference
and before reduction for the alternative tax net operating losses). The Bank was
not subject to the AMT in 2000, and does not expect to be subject to AMT in the
foreseeable future.

State and Local Taxation

       The Bank, as a Virginia chartered bank, is subject to Virginia's Bank
Franchise Tax.  Under this system, the Bank's net capital is subject to tax at a
rate of one percent.  Net capital is composed generally of the equity accounts
(common stock, additional paid-in capital, and retained earnings) adjusted for
investments in real and personal property, certain reserves, and certain
securities exempt from state taxation. Additionally, the Bank pays a Maryland
Bank Franchise Tax using a formula based on an allocation of gross income
generated by its Maryland branches.

       The Company is subject to Virginia corporate income taxes.  The Virginia
corporate income tax is imposed at a rate of six percent on a combined net
income of a Virginia corporation and its non-bank subsidiaries as reported for
federal income tax purposes, with certain modifications.


Item 2.
-------
                            DESCRIPTION OF PROPERTY


       The main office of the Bank is located at 25253 Lankford Highway, Onley,
Virginia, a two story colonial brick building built in 1988.  The Bank owns the
building free of any encumbrances, but leases the land under an agreement
expiring in 2004, with three remaining five-year renewals.  During February
1999, the Company entered into a five-year lease agreement (with two five-year
renewals) to lease commercial office space that will accommodate the Company's
administrative operations and enable it to bring the Bank's item processing
function in house.  The Bank operates six other banking offices (4 in Virginia
and 2 in Salisbury, Maryland), with all but the downtown Salisbury branch being
owned free of any encumbrances. The Bank leases the downtown Salisbury branch
location under an agreement expiring in 2002, with three five-year renewals.

                                       10
<PAGE>

Item 3.
-------

                               LEGAL PROCEEDINGS

       In the ordinary course of its operations, the Company is a party to
various legal proceedings. Based upon information currently available,
management believes that such legal proceedings, in the aggregate, will not have
a material adverse effect on the business, financial condition, or results of
operations of the Company.


Item 4.
-------
             SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

       No matter was submitted to a vote of security holders during the fourth
quarter of 2000.


                                    PART II


Item 5.
-------

           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

       The information included under "Market for Registrant's Common Stock and
Related Stockholder Matters" appearing on page 53 of the Annual Report to
Shareholders ("Annual Report") is incorporated herein by reference.


Item 6.
-------

          MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

       The information included under "Selected Financial Highlights" appearing
on page 3 of the Annual Report and under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 6 through 23 of the
Annual Report are incorporated herein by reference.


Item 7.
-------
                             FINANCIAL STATEMENTS

       The Consolidated Financial Statements and the notes thereto on pages 24
through 52 of the Annual Report are incorporated herein by reference.


Item 8.
-------

       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                             FINANCIAL DISCLOSURE

          None.

                                       11
<PAGE>

                                   PART III

Item 9.
------

        DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
               COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

          The following provides information on Executive Officers who are not
directors of the Company and are not included in the Proxy Statement:

                Name                   Age                      Position
     -----------------------------     ---          --------------------

          Steven M. Belote             35        Vice President and Secretary


Item 10.
--------

                            EXECUTIVE COMPENSATION


Item 11.
--------

        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


Item 12.
--------

                CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


      Other than as specified above, and pursuant to General Instructions E (3),
the information called for by Part III, Items 9. through 12., is incorporated
herein by reference from the Company's definitive proxy statement ("proxy
statement") for the Company's Annual Meeting of Shareholders to be held on April
17, 2001, which definitive proxy statement was filed with the Commission
pursuant to Rule 14a-6 on March 20, 2001.

                                       12
<PAGE>

                                    PART IV


Item  13.
---------
                             EXHIBITS AND FORM 8-K


(a)  The following exhibits are filed as part of this Form 10-KSB and this list
     includes the Exhibit Index.

   No.                                 Description
---------------------------------------------------------------

       3.1  Articles of Incorporation of Registrant.*

       3.2  Bylaws of Registrant.*

      10.1  Company's Incentive Stock Option Plan.*

      10.2  Amended and Restated Employment Agreement between the Company and
            Scott C. Harvard.***

      10.3  Management Continuity Agreement between the Company and Scott C.
            Harvard.***

      11.0  Earnings Per Share Computation. **

      13.0  2000 Annual Report to Shareholders.

      21.0  Subsidiaries of the Registrant -- Reference is made to "Item 1.
            Description of Business" for the required information.

     ___________________

*    Incorporated herein by reference from the Company's Registration Statement
     on Form S-4 Company (Registration No. 333-35389) filed by the Company with
     the Commission on September 15, 1997.

**   Information required herein is incorporated by reference from Note 15 on
     page 48 of the financial statements attached hereto to this Form 10-KSB.

***  Incorporated herein by reference from the Company's Annual Report on Form
     10-KSB for the year ended December 31, 1999.

(b)  Reports on Form 8-K.  The registrant filed an 8-K dated November 20, 2000
     disclosing that the registrant's Board of Directors approved the repurchase
     of up to 90,000 shares of its common stock.

                                       13
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                    SHORE FINANCIAL CORPORATION

                                         By: /s/ Scott C. Harvard
                                             --------------------
                                             Scott C. Harvard
                                             President and Chief Executive
                                             Officer

                                         Dated: March 29, 2001

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


          Signature                       Capacity                Date
          ------------------------------------------------------------

/s/ Henry P. Custis, Jr.    Chairman of the Board and          March 29, 2001
--------------------------
Henry P Custis, Jr.         Director

/s/ Scott C. Harvard        President (Principal Executive     March 29, 2001
--------------------------
Scott C. Harvard            Officer) and Director

/s/ Steven M. Belote        Vice President (Principal          March 29, 2001
--------------------------
Steven M. Belote            Financial and Accounting Officer)

/s/ Terrell E. Boothe       Director                           March 29, 2001
--------------------------
Terrell E. Boothe

/s/ D. Page Elmore          Director                           March 29, 2001
--------------------------
D. Page Elmore

/s/ Richard F. Hall, III    Director                           March 29, 2001
--------------------------
Richard F. Hall, III

/s/ Lloyd J. Kellam, III    Director                           March 29, 2001
--------------------------
Lloyd J. Kellam, III

/s/ L. Dixon Leatherbury    Director                           March 29, 2001
--------------------------
L. Dixon Leatherbury

/s/ A. Jackson Mason        Director                           March 29, 2001
--------------------------
A. Jackson Mason

                                       14