U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB


  X     QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
------  ACT OF 1934
               For the quarterly period ended March 31, 2003

        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
------  ACT OF 1934
               For the transition period from _________ to _________

                        Commission file number 000-23847

                           SHORE FINANCIAL CORPORATION

             (Exact name of registrant as specified in its charter)

        Virginia                                             54-1873994
---------------------------------                      ----------------------
(State or other jurisdiction                             (I.R.S. Employer
of incorporation or organization)                      Identification Number)

    25253 Lankford Highway
       Onley, Virginia                                        23418
---------------------------------                      ----------------------
    (Address of Principal                                   (Zip Code)
     Executive Offices)

                    Issuer's telephone number: (757) 787-1335


Check  whether the issuer (1) 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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes ___ No ___

Number of shares of Common Stock outstanding as of May 13, 2003:  1,696,717

Transitional Small Business Disclosure Format:  Yes____        No__X__




<PAGE>


                  SHORE FINANCIAL CORPORATION AND SUBSIDIARIES
                               Index - Form 10-QSB

                         PART I - FINANCIAL INFORMATION

         Item 1 - Consolidated Financial Statements (Unaudited)

                    Consolidated Statements of Financial Condition as of
                    March 31, 2003 and December 31, 2002

                    Consolidated Statements of Income for the Three Months
                    Ended March 31, 2003 and 2002

                    Consolidated Statements of Cash Flows for the Three Months
                    Ended March 31, 2003 and 2002

                    Consolidated Statement of Stockholders' Equity for the
                    Three Months ended March 31, 2003

                    Notes to Unaudited Consolidated Financial Statements

         Item 2 - Management's Discussion and Analysis of Financial Condition
                    and Results of Operations

                    Results of Operations

                    Financial Condition

                    Asset Quality

                    Liquidity and Capital Resources

                    Interest Sensitivity

         Item 3 - Controls and Procedures


                           PART II - OTHER INFORMATION
         Item 1 - Legal Proceedings
         Item 2 - Changes in Securities
         Item 3 - Defaults Upon Senior Securities
         Item 4 - Submission of Matters to Vote of Security Holders
         Item 5 - Other Information
         Item 6 - Exhibits and Reports on Form 8-K

                                   SIGNATURES



<PAGE>
<TABLE>


                                 SHORE FINANCIAL CORPORATION AND SUBSIDIARIES
                                Consolidated Statements of Financial Condition


                                                                           March 31,           December 31,
                                                                             2003                  2002
----------------------------------------------------------------------------------------------------------------
                                                                         (Unaudited)

 <c>
                            ASSETS


Cash (including interest - earning deposits of
     approximately $3,066,100 and $2,532,000, respectively)         $         9,197,200      $        7,534,900
Investment securities:
     Held to maturity (fair value of $5,052,100 and
        $5,069,500, respectively)                                             5,002,700               5,003,800
     Available for sale (amortized cost of $37,026,000 and
        $40,546,900, respectively)                                           38,292,000              41,490,900
     Federal Home Loan Bank stock, at cost                                      795,000                 542,700
     Federal Reserve Bank stock, at cost                                        124,800                 124,800
     Community Bankers' Bank stock, at cost                                      21,100                  21,100
Loans receivable, net                                                       119,522,800             116,809,800
Premises and equipment, net                                                   4,246,000               3,472,200
Other assets                                                                  4,949,400               4,993,100
                                                                    --------------------------------------------

                                                                    $       182,151,000      $      179,993,300
                                                                    ============================================

               LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
        Interest bearing                                            $       141,649,600      $      143,220,500
        Noninterest bearing                                                  17,208,300              15,768,800
Advances from Federal Home Loan Bank                                          3,733,300               2,150,000
Other liabilities                                                               805,900                 636,500
                                                                    --------------------------------------------
            Total liabilities                                               163,397,100             161,775,800
                                                                    --------------------------------------------

Stockholders' equity
     Preferred stock, par value $1 per share, 500,000
        shares authorized; none issued and
        outstanding                                                                -                       -
     Common stock, par value $.33 per share, 5,000,000
        shares authorized; 1,696,717 and 1,695,817 shares
        issued and outstanding, respectively                                    559,900                 559,600
     Additional capital                                                       2,660,700               2,654,500
     Retained earnings, substantially restricted                             14,730,600              14,394,200
     Accumulated other comprehensive income                                     802,700                 609,200
                                                                    --------------------------------------------
            Total stockholders' equity                                       18,753,900              18,217,500
                                                                    --------------------------------------------

                                                                    $       182,151,000      $      179,993,300
                                                                    ============================================


                  The accompanying notes are an integral part of these financial statements.

<page>


                    SHORE FINANCIAL CORPORATION AND SUBSIDIARIES
                          Consolidated Statements of Income



                                                     Three Months Ended March 31,
                                                 -------------------------------------
                                                       2003                2002
--------------------------------------------------------------------------------------

 <c>
Interest and dividend income
     Loans                                       $       1,915,100    $     1,924,000
     Investments
        Taxable interest                                   376,700            309,400
        Tax-exempt interest                                 28,400             34,300
        Dividends                                           29,900             34,000
                                                 -------------------------------------
           Total interest and dividend income            2,350,100          2,301,700
                                                 -------------------------------------

Interest expense
     Deposits                                              888,600            930,600
     FHLB advances                                          13,900             11,900
                                                 -------------------------------------
        Total interest expense                             902,500            942,500
                                                 -------------------------------------

Net interest income                                      1,447,600          1,359,200

Provision for loan losses                                   95,100             76,100
                                                 -------------------------------------

Net interest income after
     provision for loan losses                           1,352,500          1,283,100
                                                 -------------------------------------

Noninterest income
     Deposit account fees                                  248,300            220,800
     Loan fees                                              31,200             46,000
     Commissions on investment brokerage sales              40,500             16,100
     Other                                                  76,700             46,200
                                                 -------------------------------------
        Total noninterest income                           396,700            329,100
                                                 -------------------------------------

Noninterest expense
     Compensation and employee
        benefits                                           540,400            472,800
     Occupancy and equipment                               298,200            265,700
     Data processing                                       106,700            118,400
     Advertising                                            14,700             19,100
     Federal insurance premium                               6,100              6,000
     Other                                                 160,600            128,700
                                                 -------------------------------------
        Total noninterest expense                        1,126,700          1,010,700
                                                 -------------------------------------

Income before income taxes                                 622,500            601,500

Income taxes                                               201,200            192,500
                                                 -------------------------------------

Net income                                       $         421,300    $       409,000
                                                 =====================================

Cash Dividends Declared Per Share                $            0.05   $           0.03
                                                 =====================================

Earnings Per Common Share:
        Basic                                    $            0.25   $           0.24
                                                 =====================================

        Diluted                                  $            0.25   $           0.24
                                                 =====================================



     The accompanying notes are an integral part of these financial statements.

<page>


                                                    SHORE FINANCIAL CORPORATION AND SUBSIDIARIES
                                                   Consolidated Statement of Stockholders' Equity
                                                         Three Months Ended March 31, 2003


---------------------------------------------------------------------------------------------------------------------------------

                                                                                                 Accumulated
                                                                                                    Other
                                 Number of       Common      Additional        Retained         Comprehensive
                                  Shares          Stock        Capital         Earnings            Income            Total
                              -------------  ------------  --------------  ---------------  ------------------  -----------------

 <c>
Balance, December 31, 2002      1,695,817     $  559,600    $  2,654,500    $  14,394,200    $    609,200        $    18,217,500

Common stock cash dividend
     declared                        -              -               -             (84,900)           -                   (84,900)

Exercise of stock options             900            300           6,200             -               -                     6,500

Comprehensive income                 -              -               -             421,300         193,500                614,800
                              ---------------------------------------------------------------------------------------------------


Balance, March 31, 2003         1,696,717     $  559,900    $  2,660,700    $  14,730,600    $    802,700        $    18,753,900
                              ===================================================================================================




                                     The accompanying notes are an integral part of these financial statements.

<page>



                SHORE FINANCIAL CORPORATION AND SUBSIDIARIES
                   Consolidated Statements of Cash Flows



                                                  Three Months Ended March 31,
                                                  ---------------------------
                                                      2003          2002
-----------------------------------------------------------------------------

 <c>
Cash flows from operating activities
    Net income                                    $    421,300    $  409,000
    Adjustments to reconcile to net cash
      provided by operating activities:
         Provision for loan losses                      95,100        76,100
         Depreciation and amortization                  90,100        77,400
         Amortization of premium and accretion
           of discount on securities, net               24,800        17,200
         Loss on sale of investment securities           3,700          -
         Loss on disposal of fixed assets                 -            2,000
         Increase in cash surrender value of
           life insurance                              (39,200)         -

         Changes in:
           Deferred loan fees                           (6,200)      (12,800)
           Other assets                                (46,300)      (20,400)
           Other liabilities                           169,400       197,500
                                                  ---------------------------
           Net cash provided by operating
              activities                               712,700       746,000
                                                  ---------------------------

Cash flows from investing activities
    Purchase of available-for-sale securities          (12,800)   (2,239,000)
    Proceeds from maturities, sales and calls of
      available-for-sale securities                  3,506,300       120,100
    Purchase of held-to-maturity securities               -       (2,986,200)
    Proceeds from maturities, prepayments and calls
      of held-to-maturity securities                      -        2,000,000
    Purchase of Federal Home Loan Bank stock          (252,300)      (32,200)
    Loan originations, net of repayments            (2,801,900)   (1,366,000)
    Purchase of premises and equipment                (863,200)     (335,100)
                                                  ---------------------------
           Net cash used by investing activities     (423,900)    (4,838,400)
                                                  ---------------------------

<page>


                SHORE FINANCIAL CORPORATION AND SUBSIDIARIES
                   Consolidated Statements of Cash Flows


                                                  Three Months Ended March 31,
                                                  ---------------------------
                                                      2003          2002
-----------------------------------------------------------------------------

 <c>
Cash flows from financing activities
    Net increase in demand deposits               $  5,651,900   $ 8,038,600
    Net increase in time deposits                   (5,783,300)    2,450,700
    Proceeds from FHLB advances                      9,900,000     1,500,000
    Repayments of FHLB advances                     (8,316,700)   (1,516,700)
    Repurchase of common stock                            -          (48,300)
    Proceeds from exercise of stock options              6,500          -
    Payment of dividends on common stock               (84,900)      (50,900)
                                                  ---------------------------
           Net cash provided by financing
              activities                             1,373,500    10,373,400
                                                  ---------------------------

Increase in cash and cash equivalents                1,662,300     6,281,000

Cash and cash equivalents, beginning of period       7,534,900     6,605,900
                                                  ---------------------------

Cash and cash equivalents, end of period          $  9,197,200   $12,886,900
                                                  ===========================


Supplemental disclosure of cash flow information

    Cash paid during the period for interest      $    911,800    $  929,600
    Cash paid during the period for income taxes  $       -       $   25,000

Supplemental schedule of non-cash investing and
    financing activities

    Transfers from loans to real estate acquired
      through foreclosure                         $       -       $   41,000


 The accompanying notes are an integral part of these financial statements.

</TABLE>
<page>


                  SHORE FINANCIAL CORPORATION AND SUBSIDIARIES
              Notes to Unaudited Consolidated Financial Statements

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying  unaudited consolidated financial statements of Shore Financial
Corporation  and  Subsidiaries  (the "Company") have been prepared in accordance
with generally accepted accounting principles ("GAAP") and with the instructions
to Form  10-QSB and Item  310(b) of  Regulation  S-B.  Accordingly,  they do not
include all of the  information  and  footnotes  required  by GAAP for  complete
financial  statements  in the  United  States  of  America.  In the  opinion  of
management,  all adjustments (consisting of normal recurring accruals) necessary
for a fair  presentation  of the  consolidated  financial  statements  have been
included.

In preparing the  consolidated  financial  statements in conformity with GAAP in
the United  States of America,  management  is required  to make  estimates  and
assumptions  that affect the  amounts  reported  in the  consolidated  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.  The consolidated  results of operations and other data for the three
month period ended March 31, 2003 are not necessarily  indicative of the results
that may be  expected  for any other  interim  period or the entire  year ending
December 31, 2003. The unaudited  consolidated  financial  statements  presented
herein should be read in  conjunction  with the audited  consolidated  financial
statements  and related  notes  thereto in the  Company's  Annual Report on Form
10-KSB for the year ended December 31, 2002.

Principles of Consolidation

The  consolidated  financial  statements  of the Company  include and  primarily
consist of the accounts of its  wholly-owned  subsidiary Shore Bank (the "Bank")
and the Bank's wholly-owned subsidiary Shore Investments,  Inc.. All significant
intercompany balances and transactions have been eliminated in consolidation.


NOTE 2 - ORGANIZATION

The Company is a Virginia  corporation  organized in September  1997 by the Bank
for the purpose of becoming a unitary  holding  company of the Bank. The Company
became a unitary holding company of the Bank on March 16, 1998. The business and
management of the Company  consists of the business and  management of the Bank.
The Bank became a Virginia chartered, Federal Reserve member, commercial bank on
March 31, 1998. Prior to that the Bank was a federally  chartered  savings bank.
The  Company  and the Bank are  headquartered  on the  Eastern  Shore in  Onley,
Virginia.  During  March,  1999,  the  Bank  activated  its  subsidiary,   Shore
Investments,  Inc.,  to engage in  financial  activities  supporting  the Bank's
operations.  These activities include the selling of investment products,  title
insurance and trust services.

<page>


NOTE 3 - EARNINGS PER SHARE

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted  earnings per share  computations  for the periods ended March
31, 2003 and 2002.

<TABLE>


                                                   Three Months Ended March 31,
                                               -------------------------------------
                                                    2003                 2002
                                               ----------------     ----------------

 <c>

Net income (numerator, basic and diluted)        $     421,300        $     409,000
Weighted average shares outstanding
(denominator)                                        1,696,100            1,696,300
                                               ----------------     ----------------

Earnings per common share - basic                $        0.25        $        0.24
                                               ================     ================

Effect of dilutive securities:

Weighted average shares outstanding                  1,696,100            1,696,300
Effect of stock options                                 18,500                6,600
                                               ----------------     ----------------
Diluted average shares outstanding
(denominator)                                        1,714,600            1,702,900
                                               ----------------     ----------------

Earnings per common share -
assuming dilution                                $        0.25        $        0.24
                                               ================     ================

</TABLE>


NOTE 4 - COMPREHENSIVE INCOME

Total comprehensive  income consists of the following for the three months ended
March 31, 2003 and 2002:

<TABLE>

                                                    Three Months Ended March 31,
                                                 -----------------------------------
                                                       2003              2002
                                                 -----------------  ----------------

 <c>

Net income                                         $      421,300     $     409,000
Other comprehensive income                                193,500          (188,800)
                                                 -----------------  ----------------

Total comprehensive income                         $      614,800     $     220,200
                                                 =================  ================

</TABLE>

<PAGE>

NOTE 4 - COMPREHENSIVE INCOME (concluded)

The following is a reconciliation  of the related tax effects  allocated to each
component of other comprehensive income at March 31, 2003 and 2002.

<TABLE>

                                                    Three Months Ended March 31,
                                                 -----------------------------------
                                                       2003              2002
                                                 -----------------  ----------------

 <c>

Unrealized gains (losses) on
      available-for-sale securities:
Unrealized holding gains (losses)
      arising during the period                    $      318,300     $    (287,000)
Less: reclassification adjustment
      for loss included in income                           3,700              -
                                                 -----------------   ---------------

Total other comprehensive income (loss)
     before tax effect                                    322,000          (287,000)

Tax effect                                               (128,500)           98,200
                                                 -----------------   ---------------

Net unrealized gain (loss)                         $      193,500      $   (188,800)
                                                 =================   ===============

</TABLE>

NOTE 5 - SEGMENT INFORMATION

Segment  information  consists of the following for the three months ended March
31, 2003 and 2002:

<TABLE>


                                                                                                     Elimination of
                                                                                                     Intersegment
(In thousands)                                    Virginia         Maryland           Other          Transactions         Total
                                                ------------     -----------       ------------      ---------------   ------------


 <c>
Net Interest Income:
     Three months ended March 31, 2003           $    1,105       $     189        $       421       $        (267)    $    1,448
     Three months ended March 31, 2002           $      994       $     169        $       367       $        (171)    $    1,359

Assets:
     March 31, 2003                              $  142,303       $  38,597        $    55,010       $     (53,759)    $  182,151
     December 31, 2002                           $  140,389       $  39,060        $    56,774       $     (56,230)    $  179,993

</TABLE>


NOTE 6 - SUBSEQUENT EVENT

During  April  2003,  the  Company  declared  a $0.05 per share  quarterly  cash
dividend on its common stock payable on May 1, 2003 to shareholders of record on
April 21, 2003.

<page>


Item 2 - Management's Discussion and Analysis of
           Consolidated Financial Condition and Results of Operations

Results of Operations

General

Net income for the three months ended March 31, 2003 was  $421,300,  compared to
net income of $409,000 for the same period of the prior year.  Continued  strong
loan growth and asset  quality,  along with record  quarterly  earnings from the
bank's investment  subsidiary,  Shore Investments Inc.,  positively impacted the
quarter's  performance.  The  March  2003  results  reflect  the  impact  of the
Susquehanna  branch  deposit  acquisition  during  December 2002. As a result of
having to invest the deposits  acquired in  investment  securities as opposed to
loans,  the Company's net interest  margin  declined  during the quarter.  Going
forward,  net interest  margin growth will hinge upon the  Company's  ability to
redeploy these funds into loans, particularly in its Maryland market.

Net Interest Income

Net interest  income  increased 6.5% to $1.45 million for the three months ended
March 31,  2003,  compared  to $1.36  million  for the same  period  in 2002.  A
decrease  in net  interest  margin  from 3.94% in 2002 to 3.50%  during the 2003
period, primarily relating to the Susquehanna deposit acquisition,  impacted net
interest income.  Although yields on all earning assets continued to decline, so
did funding  costs.  Additionally,  strong loan  growth  continued  to drive net
interest  income  during the period,  thus  mitigating  the impact of the margin
reduction.

Average  earning assets  increased $27.5 million during the March 2003 period as
compared to the March 2002 period.  Increases in average investment  securities,
primarly due to the deposit acquisition,  accounted for a significant portion of
this growth during the period.  Average investment securities increased by $15.6
million,  while average  loans  experienced  similar  growth with an increase of
$13.3 million during the March 2003 period as compared to the March 2002 period.
The  Susquehanna  deposit  acquisition  also impacted  average  interest-bearing
deposits which increased $26.9 million during the period. Additionally, the Bank
experienced  24.6% growth in average  noninterest-bearing  demand deposits which
increased  to $15.8  million  during the March 2003  period as compared to $12.7
million during the March 2002 period.

Interest  and  dividend  income  increased  2.1% to $2.35  million for the three
months  ended March 31, 2003,  compared to $2.30  million for the same period in
2002.  Market-driven  declines in loan and investment yields continued to impact
interest income,  with decreases in these categories of 83 and 128 basis points,
respectively  from March 2002 to March  2003.  Real  estate and home equity line
lending primarily drove loan growth for the period.

Interest expense decreased 4.2% to $902,500 for the three months ended March 31,
2003,  compared to $942,500 for the same period in 2002. Funding costs continued
to decline with the average rate on interest-bearing liabilities decreasing from
3.21% in 2002 to 2.49% for the March 2003 period. Time deposit costs declined 78
basis points,  while checking and savings deposit costs dropped 38 basis points.
These declines occurred despite purchasing $17.0 million in Susquehanna deposits
and additional growth of $9.9 million in average interest-bearing deposits since
March 2002.


<PAGE>



The  following  table  illustrates  average  balances of total  interest-earning
assets and total interest-bearing liabilities for the periods indicated, showing
the average  distribution of assets,  liabilities,  stockholders' equity and the
related income, expense and corresponding weighted average yields and costs. The
average balances used in these tables and other statistical data were calculated
using daily averages.

<TABLE>

                                 Average Balances, Income and Expenses, Yields and Rates

                                                                    Three Months Ended March 31,
                                         ---------------------------------------------------------------------------------
                                             2003                                      2002
                                         ---------------------------------------    --------------------------------------
                                            Average        Income/     Yield/        Average        Income/      Yield/
(In Thousands)                              Balance        Expense      Rate         Balance        Expense       Rate
                                         ------------  ------------- -----------  -------------  ------------  -----------

 <c>
Assets:
       Securities (1)                    $    44,255    $       442       4.00%   $     28,648   $       378        5.28%
       Loans (net of unearned income):
             Real estate mortgage             68,577          1,089       6.35%         56,960         1,037        7.28%
             Commercial                       35,252            610       6.92%         36,622           672        7.34%
             Home equity lines                13,204            154       4.67%          9,227           117        5.07%
             Consumer                          2,660             62       9.32%          3,617            98       10.84%
                                           ----------     ----------                -----------    ----------
                 Total loans                 119,693          1,915       6.40%        106,426         1,924        7.23%
       Interest-bearing deposits
             in other banks                    3,205              7       0.87%          4,627            18        1.56%
                                           ----------     ----------                -----------    ----------
                 Total earning assets        167,153          2,364       5.66%        139,701         2,320        6.64%
                                           ----------     ----------                -----------    ----------
       Less: allowance for loan losses        (1,637)                                   (1,346)
       Total nonearning assets                14,644                                     8,907
                                           ----------                               -----------
       Total assets                      $   180,160                              $    147,262
                                           ==========                               ===========

Liabilities
       Interest-bearing deposits:
             Checking and savings        $    56,524    $       115       0.81%   $     42,032   $       125        1.19%
             Time deposits                    86,752            773       3.56%         74,323           806        4.34%
                                           ----------     ----------                -----------    ----------

                 Total interest-bearing
                 deposits                    143,276            888       2.48%        116,355           931        3.20%

       FHLB advances                           1,788             14       3.13%            976            12        4.92%
                                           ----------     ----------                -----------    ----------
                 Total interest-bearing
                 liabilities                 145,064            902       2.49%        117,331           943        3.21%
                                                          ----------                               ----------
       Non-interest bearing liabilities:
             Demand deposits                  15,837                                    12,707
             Other liabilities                   829                                       728
                                           ----------                               -----------

       Total liabilities                     161,730                                   130,766
       Stockholders' equity                   18,430                                    16,496
                                           ----------                               -----------

       Total liabilities and
          stockholders' equity           $   180,160                              $    147,262
                                           ==========                               ===========

       Net interest income (1)                          $     1,462                              $     1,377
                                                          ==========                               ==========

       Interest rate spread (1)(2)                                        3.17%                                     3.43%
       Net interest margin (1)(3)                                         3.50%                                     3.94%


(1)      Tax equivalent  basis.  The tax equivalent  adjustment to net interest
         income was $14,000 and $18,000 for the three months ended
         March 31, 2003 and 2002, respectively.
(2)      Yield and rate percentages are all computed  through the  annualization
         of interest  income and expense divided by average daily balances based
         on amortized costs.
(3)      Interest rate spread is the average yield earned on earning assets less
         the average rate incurred on interest-bearing liabilities.
(4)      Net interest  margin is derived by dividing  net interest  income by
         average total earning assets.
</TABLE>
<page>

Noninterest Income

Noninterest income was $396,700 during the three months ended March 31, 2003, as
compared to $329,100 for the same period in 2002,  representing a 20.5% increase
over the  prior  period.  Increases  in the cash  surrender  value of  insurance
income,  deposit account fees and commissions  earned by Shore  Investments Inc.
primarily drove this growth.

Provision for Loan Losses

Provision for loan losses was $95,100 for the three months ended March 31, 2003,
as  compared  to $76,100  for the same  period of 2002.  See Asset  Quality  for
additional discussion relating to the allowance for loan losses.

Noninterest Expense

Noninterest  expenses  were $1.13  million for the three  months ended March 31,
2003, as compared to $1.01 million during the same period of 2002,  representing
an increase of 11.5%.  Increased  employee  compensation  and  benefits  expense
constituted  the  majority  of this  increase,  including a 22.0% rise in health
insurance costs over the 2002 period.

Financial Condition

During the three months ended March 31, 2003, the Company's  assets increased by
$2.2 million from $180.0 million at December 31, 2002 to $182.2 million at March
31, 2003.  Net loans grew $2.7 million and cash and  investments  decreased $1.3
million during the period. A continuing  favorable lending  environment and good
loan officer  production  contributed  to loan  growth,  while the purchase of a
branch building in Salisbury,  Maryland  previously leased and general liquidity
needs drove the declines in cash and investment securities.

Deposits  remained  relatively  flat at $158.9  million  during the three months
ended  March 31,  2003.  Interest-bearing  demand and  savings  deposit  account
balances  increased  $4.2  million  and   noninterest-bearing   demand  deposits
increased  $1.4  million,  while  higher-costing  time deposits  decreased  $5.8
million during the period.  Federal Home Loan Bank advances increased during the
period from $2.2 million at December 31, 2002 to $3.7 million at March 31, 2003.

Stockholders'  equity was $18.8  million at March 31,  2003,  compared  to $18.2
million at December 31, 2002.  Comprehensive  income of $614,800 offset a common
stock dividend payment of $84,900 ($0.05 per share).

During  April  2003,  the  Company  declared  a $0.05 per share  quarterly  cash
dividend on its common stock payable on May 1, 2003 to shareholders of record on
April 21, 2003.

<page>
Asset Quality

Loans are placed on nonaccrual  status when, in the judgment of management,  the
probability  of  interest  collection  is deemed to be  insufficient  to warrant
further  accrual or the loan  reaches  90 days  delinquent  whereby  the loan no
longer accrues interest.

Total  nonperforming  assets,  which consist of nonaccrual  loans and foreclosed
properties,  adjusted  for  estimated  losses upon sale and the related  selling
expenses  and  holding  costs,  were  $675,000  at March 31,  2003,  compared to
$879,000 at December  31, 2002.  As to  nonaccrual  loans  existing at March 31,
2003,  approximately $8,900 of interest income would have been recognized during
the three months then ended if interest  thereon had  accrued.  During the three
months ended March 31, 2003, a loan totaling $368,000  identified as impaired at
December  31,  2002 under the  established  accounting  guidelines  was  brought
current with the principal due being  significantly  reduced through the sale of
assets by the borrower. Approximately $125,000 in principal due remains at March
31, 2003 with sufficient remaining collateral securing it. Accordingly, the Bank
continues to maintain the loan in nonaccrual  status and classify it as impaired
under the guidelines  established  by SFAS No. 114,  Accounting by Creditors for
Impairment  of a Loan,  as amended by SFAS No. 118,  Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures.

At March 31, 2003, all loans 60 days or more delinquent, including nonperforming
loans, totaled $815,000. In addition, other performing loans, totaling $720,000,
existed that were current,  but had other  potential  weaknesses that management
considers to warrant additional monitoring.  Loans in this category,  along with
the delinquent loans, are subject to constant  management  attention,  and their
status is reviewed on a regular basis.

The  following  table details  information  concerning  nonaccrual  and past due
loans, as well as foreclosed assets.

<TABLE>

                                                     Nonperforming Assets


                                                                                 March 31,           December 31,
(In Thousands)                                                                     2003                  2002
                                                                            -------------------   --------------------

 <c>
Nonaccrual loans:
       Commercial                                                              $         -           $         -
       Real estate mortgage                                                               430                   677
       Home equity lines of credit                                                         76                  -
       Consumer                                                                           169                   202
                                                                            -------------------   --------------------

       Total nonaccrual loans                                                             675                   879
Other real estate owned                                                                  -                     -
                                                                            -------------------   --------------------

       Total nonperforming assets                                              $          675        $          879
                                                                            ===================   ====================

Loans past due 90 or more days
       accruing interest                                                                 -                     -
Allowance for loan losses to
       nonaccrual loans                                                                251.56%               182.37%
Nonperforming assets to period end
       loans and other real estate owned                                                 0.56%                 0.74%

</TABLE>
<page>


Set forth  below is a table  detailing  the  allowance  for loan  losses for the
periods indicated.

<TABLE>

                                                   Allowance for Loan Losses


                                                                                    Three Months Ended March 31,
                                                                           -----------------------------------------------
(In Thousands)                                                                    2003                       2002
                                                                           -------------------       ---------------------

 <c>
Balance, beginning of period                                                   $        1,603           $           1,326
Loans charged off:
       Commercial                                                                        -                           -
       Real estate mortgage                                                              -                           -
       Consumer                                                                            (3)                        (11)
                                                                           -------------------       ---------------------

       Total loans charged-off                                                             (3)                        (11)
                                                                           -------------------       ---------------------

Recoveries:
       Commercial                                                                        -                           -
       Real estate mortgage                                                              -                           -
       Consumer                                                                             3                           1
                                                                           -------------------       ---------------------

       Total recoveries                                                                     3                           1
                                                                           -------------------       ---------------------

Net recoveries (charge-offs)                                                             -                            (10)
Provision for loan losses                                                                  95                          76
                                                                           -------------------       ---------------------

Balance, end of period                                                         $        1,698           $           1,392
                                                                           ===================       =====================

Allowance for loan losses to loans
       outstanding at end of period                                                      1.40%                       1.31%

Allowance for loan losses to nonaccrual
       loans outstanding at end of period                                              251.56%                     548.03%

Net charge-offs to average loans
       outstanding during period                                                         0.00%                      -0.01%

</TABLE>

<page>

Liquidity and Capital Resources

Liquidity   represents  the  Company's   ability  to  meet  present  and  future
obligations  through the sale and maturity of existing assets or the acquisition
of additional funds through  liability  management.  Liquid assets include cash,
interest-bearing  deposits with banks,  federal  funds sold,  available-for-sale
investments  and  investments  and loans maturing within one year. The Company's
ability to obtain deposits and purchase funds at favorable rates  determines its
liability liquidity.

At March  31,  2003,  the  Company  had  outstanding  loan  and  line of  credit
commitments  of $28.5 million.  Scheduled  maturities of certificate of deposits
during the twelve months  following  March 31, 2003  amounted to $50.1  million.
Historically,  the Company has been able to retain a  significant  amount of its
deposits  as they  mature.  As a result of the  Company's  management  of liquid
assets  and  the  ability  to  generate  liquidity  through  liability  funding,
management  believes  that  the  Company  maintains  overall  liquidity  that is
sufficient  to satisfy  its  depositors'  requirements  and meet its  customers'
credit needs.

Total cash and cash  equivalents  increased  $1.7  million for the three  months
ended March 31,  2003,  compared  to an  increase of $6.3  million for the three
months  ended March 31, 2002.  Net cash  provided by  operating  activities  was
$712,700 for the three months ended March 31, 2003,  compared to $746,000 during
the same  period of 2002.  This  decrease  reflects  additional  noncash  income
generated from  increases in cash  surrender  values of life insurance and other
fluctuations in normal operating activities.

Net cash used by investing activities was $423,900 during the three months ended
March 31,  2003,  compared  to net cash  used by  investing  activities  of $4.8
million for the three  months  ended March 31,  2002.  Although  loan growth was
stronger during the 2003 period, deposit growth remained flat as compared to the
significant growth experienced in this area during the 2002 period, resulting in
less excess liquidity for investment purposes.

Net cash provided by financing  activities was $1.4 million for the three months
ended March 31, 2003,  compared to net cash provided by financing  activities of
$10.4  million for the three  months ended March 31, 2002.  The  acquisition  of
$17.0 million in deposits  from  Susquehanna  Bank during  December 2002 created
less of a need to aggressively grow deposits during the March 2003 quarter. This
acquisition  provided sufficient liquidity to fund other investing activities of
the Company during the quarter.

<page>

The Company is subject to various regulatory capital  requirements  administered
by the federal banking  agencies.  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 its banking
subsidiary  must meet  specific  capital  guidelines  that involve  quantitative
measures  of  assets,  liabilities,   and  certain  off-balance-sheet  items  as
calculated  under  regulatory   accounting  practices.   Additionally,   certain
restrictions  exist on dividends  paid and loans or advances made by the Bank to
the  Company.  The  total  amount of  dividends  that may be paid at any date is
generally  limited to the retained earnings for the Bank, and loans and advances
are limited to 10 percent of the Bank's  capital and surplus on a secured basis.
During  the three  months  ended  March 31,  2002,  the Bank  paid  $500,000  in
dividends to the Company to fund  operations,  pay shareholder  dividends and to
purchase real estate for the Company's planned  operations  center. The Bank did
not pay  dividends to the Company  during the three months ended March 31, 2003.
At March 31, 2003,  the Bank's  retained  earnings  available for the payment of
dividends was $1.44 million.  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 banking  subsidiary 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).  At March 31, 2003, the Company meets all capital  adequacy
requirements to which it is subject.

The  following  table  details the  components  of Tier 1 and Tier 2 capital and
related ratios at March 31, 2003 and December 31, 2002.

<TABLE>

                                          Analysis of Capital

                                                                     March 31,          December 31,
(In Thousands)                                                         2003                 2002
                                                                 ------------------  -------------------

 <c>
Tier 1 Capital:
       Common stock                                               $            560     $            560
       Additional paid-in capital                                            2,661                2,654
       Retained earnings                                                    14,730               14,394
       Accumulated other comprehensive income                                  803                  609
                                                                 ------------------  -------------------
             Total capital (GAAP)                                           18,754               18,217
       Less: Intangibles                                                      (637)                (650)
       Net unrealized gain on debt and equity securities                      (803)                (609)
       Net unrealized losses on equity securities                             -                     (41)
                                                                 ------------------  -------------------
             Total Tier 1 capital                                           17,314               16,917


Tier 2 Capital:
       Allowable allowances for loan losses                                  1,698                1,366
       Net unrealized gains on equity securities                               221                    8
                                                                 ==================  ===================
             Total Tier 2 capital                                 $         19,233     $         18,291
                                                                 ==================  ===================

Risk-weighted assets                                              $        115,827     $        112,642

Capital Ratios (1):
       Tier 1 risk-based capital ratio                                      14.95%               15.02%
       Total risk-based capital ratio                                       16.60%               16.24%
       Tier 1 capital to average adjusted
             total assets                                                    9.64%               10.72%

</TABLE>

<page>

Interest Sensitivity

An  important  element  of both  earnings  performance  and the  maintenance  of
sufficient  liquidity is proper management of the interest  sensitivity gap. The
interest sensitivity gap is the difference between interest sensitive assets and
interest sensitive  liabilities at a specific time interval. A gap is considered
positive when the amount of interest rate sensitive assets exceeds the amount of
interest rate sensitive liabilities,  and is considered negative when the amount
of interest  rate  sensitive  liabilities  exceeds  the amount of interest  rate
sensitive  assets  during a given period.  Generally,  during a period of rising
interest rates, a negative gap within shorter  maturities would adversely affect
the net interest  income,  while a positive gap within shorter  maturities would
result in an increase in net  interest  income.  Conversely,  during a period of
falling interest rates, a negative gap within shorter maturities would result in
an  increase  in net  interest  income,  while a  positive  gap  within  shorter
maturities would have the opposite effect.  This gap can be managed by repricing
assets or liabilities,  by selling investments  available for sale, by replacing
assets or liabilities at maturity,  or by adjusting the interest rate during the
life of an asset or  liability.  Matching  amounts  of  assets  and  liabilities
maturing in the same time interval  helps hedge the risk and minimize the impact
on net interest income in periods of rising or falling interest rates.

The Company  determines the overall  magnitude of interest  sensitivity risk and
then formulates policies governing asset generation and pricing, funding sources
and  pricing,  and  off-balance-sheet  commitments  in order to reduce  interest
sensitivity  risk. These decisions are based on management's  outlook  regarding
future interest rate movements, the state of the local and national economy, and
other financial and business risk factors.

The following  table  presents the Company's  interest  sensitivity  position at
March 31, 2003 based on the repricing or maturity of interest  sensitive  assets
and liabilities,  whichever is shorter. This one-day position, which continually
is changing,  is not  necessarily  indicative of the  Company's  position at any
other time.

<TABLE>

                                                       Interest Sensitivity Analysis

                                                                               March 31, 2003
                                                 -------------------------------------------------------------------------
                                                    Within        91-365        1 to 5          Over
(In Thousands)                                      90 Days        Days          Years         5 Years         Total
                                                 -------------  -----------  -------------  -------------  ---------------

 <c>
Interest-Earning Assets:
       Loans (1)                                 $     29,013   $   13,190   $     56,744   $     22,273   $      121,220
       Securities                                         996        8,111         31,008          4,121           44,236
       Money market and other
           short term securities                        3,066         -              -              -               3,066
       Bank-Owned Life Insurance                         -           3,039           -              -               3,039
                                                 -------------  -----------  -------------  -------------  ---------------

       Total earning assets                      $     33,075   $   24,340   $     87,752   $     26,394   $      171,561
                                                 =============  ===========  =============  =============  ===============
       Cumulative earning assets                 $     33,075   $   57,415   $    145,167   $    171,561   $      171,561
                                                 =============  ===========  =============  =============  ===============


Interest-Bearing Liabilities:
       Money market savings                      $     16,937   $     -      $       -      $       -      $       16,937
       Interest checking (2)                             -            -            20,462           -              20,462
       Savings (2)                                        713        1,964         17,765           -              20,442
       Certificates of deposit                         11,542       38,582         31,732          1,953           83,809
       FHLB advances                                    3,000         -              -               733            3,733
                                                 -------------  -----------  -------------  -------------  ---------------

       Total interest-bearing liabilities        $     32,192   $   40,546   $     69,959   $      2,686   $      145,383
                                                 =============  ===========  =============  =============  ===============
       Cumulative interest-bearing liabilities         32,192       72,738        142,697        145,383          145,383
                                                 =============  ===========  =============  =============  ===============

       Period gap                                $        883   $  (16,206)  $     17,793   $     23,708   $       26,178
       Cumulative gap                            $        883   $  (15,323)  $      2,470   $     26,178   $       26,178
       Ratio of cumulative interest-earning
           assets to interest-bearing
           liabilities                                 102.74%       78.93%        101.73%        118.01%          118.01%
       Ratio of cumulative gap to total
           earning assets                                0.51%       -8.93%          1.44%         15.26%           15.26%



(1)  Includes nonaccrual loans of $675,000, which are included in the 1 to 5 years category.
(2)  Management has determined that interest  checking and savings  accounts are
     not sensitive to changes in related market rates and,  therefore,  they are
     placed in the 1 to 5 years category.

</TABLE>

<page>

Item 3 - Controls and Procedures

Under the supervision and with the  participation  of our management,  including
our  principal  executive  officer  and  principal  financial  officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  within 90 days of the filing  date of this  quarterly
report. Based on that evaluation,  our principal executive officer and principal
financial  officer  have  concluded  that  these  controls  and  procedures  are
effective.  There were no  significant  changes in our  internal  controls or in
other factors that could  significantly  affect these controls subsequent to the
date of their evaluation.

Disclosure  controls and procedures are our controls and other  procedures  that
are  designed to ensure that  information  required to be disclosed by us in the
reports  that we file or  submit  under  the  Exchange  Act is  accumulated  and
communicated to our management,  including our principal  executive  officer and
principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure.


<PAGE>



                           PART II - OTHER INFORMATION

Item 1 - 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 2 - Changes in Securities

None.

Item 3 - Defaults Upon Senior Securities

Not applicable.

Item 4 - Submission of Matters to a Vote of Stockholders

None.

Item 5 - Other Information

None.

Item 6 - Exhibits and Reports on Form 8-K

(a)      Certifications pursuant to subsections 302 and 906 of the
         Sarbanes-Oxley Act of 2002.
(b)      Form 8-K was filed during April 2003  relative to the  Company's
         March 31, 2003  earnings  release  dated April 15, 2003.


<PAGE>



                                   SIGNATURES

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.


/s/ Scott C. Harvard                                               May 13, 2003
------------------------------------------------------------------
Scott C. Harvard
President and
Chief Executive Officer

/s/ Steven M. Belote                                               May 13, 2003
------------------------------------------------------------------
Steven M. Belote
Vice President and
Chief Financial Officer




<PAGE>



Pursuant to ss. 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350)




I, Scott C. Harvard, certify that:

         1.  I have reviewed this quarterly report on Form 10-QSB of Shore
Financial Corporation;

         2. Based on my knowledge,  this  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
                  (a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
controls and  procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

                  (c) presented in this quarterly  report our conclusions  about
the  effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

                  (a) all significant deficiencies in the design or operation of
internal  controls  which could  adversely  affect the  registrant's  ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

                  (b)  any  fraud,  whether  or  not  material,   that  involves
management or other  employees who have a significant  role in the  registrant's
internal controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this quarterly report whether or not there were significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 13, 2003

                                                     /s/ Scott C. Harvard
                                                     ---------------------
                                                     President and CEO

<page>

Pursuant to ss. 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350)




I, Steven M. Belote, certify that:

         1.  I have reviewed this quarterly report on Form 10-QSB of Shore
Financial Corporation;

         2. Based on my knowledge,  this  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
                  (a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
controls and  procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

                  (c) presented in this quarterly  report our conclusions  about
the  effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

                  (a) all significant deficiencies in the design or operation of
internal  controls  which could  adversely  affect the  registrant's  ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

                  (b)  any  fraud,  whether  or  not  material,   that  involves
management or other  employees who have a significant  role in the  registrant's
internal controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this quarterly report whether or not there were significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 13, 2003

                                                     /s/ Steven M. Belote
                                                     --------------------
                                                     CFO and Vice President

<page>

   Pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350)

The undersigned,  as the chief executive officer of Shore Financial Corporation,
certifies to the best of his knowledge  and belief that the Quarterly  Report on
Form  10-QSB  for the  period  ended  March 31,  2003,  which  accompanies  this
certification fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934 and the information contained
in the periodic report fairly presents, in all material respects,  the financial
condition and results of operations of Shore Financial  Corporation at the dates
and for the periods indicated.  The foregoing  certification is made pursuant to
ss. 906 of the  Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350) and no purchaser
or seller of  securities  or any other person shall be entitled to rely upon the
foregoing certification for any purpose. The undersigned expressly disclaims any
obligation to update the foregoing certification except as required by law.


                                                      /s/ Scott C. Harvard
                                                      ---------------------
                                                      Chief Executive Officer


<PAGE>



   Pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350)

The undersigned,  as the chief financial officer of Shore Financial Corporation,
certifies to the best of his knowledge  and belief that the Quarterly  Report on
Form  10-QSB  for the  period  ended  March 31,  2003,  which  accompanies  this
certification fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934 and the information contained
in the periodic report fairly presents, in all material respects,  the financial
condition and results of operations of Shore Financial  Corporation at the dates
and for the periods indicated.  The foregoing  certification is made pursuant to
ss. 906 of the  Sarbanes-Oxley Act of 2002 (18 U.S.C. ss. 1350) and no purchaser
or seller of  securities  or any other person shall be entitled to rely upon the
foregoing certification for any purpose. The undersigned expressly disclaims any
obligation to update the foregoing certification except as required by law.



                                                        /s/ Steven M. Belote
                                                        ----------------------
                                                        Chief Financial Officer