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Shore Bancshares Inc

Shore Bancshares, Inc. Reports 2025 First Quarter Results

EASTON, Md. , April 29, 2025 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ - SHBI) (the "Company" or "Shore Bancshares"), the holding company for Shore United Bank, N.A. (the "Bank") reported net income for the first quarter of 2025 of $13.8 million, or $0.41 per diluted common share, compared to net income of $13.3 million, or $0.40 per diluted common share, for the fourth quarter of 2024, and net income of $8.2 million, or $0.25 per diluted common share, for the first quarter of 2024.

First  Quarter 2025 Highlights

  • Improved Return on Average Assets ("ROAA") – The Company reported ROAA of 0.91% for the first quarter of 2025, compared to 0.86% for the fourth quarter of 2024 and 0.57% for the first quarter of 2024. Non-U.S. generally accepted accounting principles ("GAAP") ROAA(1) was 1.00% for the first quarter of 2025, compared to 0.94% for the fourth quarter of 2024 and first quarter of 2024.
  • Increased Net Interest Income ("NII") and Net Interest Margin ("NIM") – NII for the first quarter of 2025 increased $2.0 million to $46.0 million from $44.0 million for the fourth quarter of 2024. NIM increased 21 basis points ("bps") to 3.24% during the first quarter of 2025 from 3.03% in the fourth quarter of 2024. Core NIM increased for the comparable periods from 2.85% to 3.02%. Excluding accretion interest, loan yields increased 17 bps and funding costs decreased 10 bps, for the comparable periods. Interest expense for the first quarter of 2025 decreased $2.4 million when compared to the fourth quarter of 2024. All products repriced at favorable rates, and were partially offset by the seasonal run off of municipal deposits. NII and NIM were $41.1 million and 3.08%, respectively, for the first quarter of 2024.
  • Net Income growth – Net income for the first quarter of 2025 increased $482 thousand to $13.8 million from $13.3 million in the fourth quarter of 2024. Net income increased due primarily to higher net interest income, which was partially offset by lower non-interest income due to lower mortgage banking activity and the absence of the one-time gain on sale of other assets in the fourth quarter of 2024. Net income for the first quarter of 2024 was $8.2 million.
  • Stable Asset Quality – Nonperforming assets to total assets were 0.31% for the first quarter of 2025, a decrease from 0.40% for the fourth quarter of 2024 and an increase from 0.28% for the first quarter of 2024. Classified assets to total assets were 0.36% in the first quarter of 2025, a decrease when compared to 0.45% for the fourth quarter of 2024 and an increase when compared to 0.26% for the first quarter of 2024. The allowance for credit losses ("ACL") was $58.0 million at March 31, 2025 compared to $57.9 million at December 31, 2024 and $57.3 million at March 31, 2024. The ACL as a percentage of loans remained flat at 1.21% at March 31, 2025, compared to December 31 and decreased compared to 1.23% at March 31, 2024.
  • Improved Operating Leverage – The efficiency ratio for the first quarter of 2025 was 63.64% when compared to 64.21% in the fourth quarter of 2024 and 76.93% for the first quarter of 2024. The non-GAAP efficiency ratio(1), which excludes amortization, was 59.76% for the first quarter of 2025, compared to 60.28% for the fourth quarter of 2024 and 62.37% for the first quarter of 2024.

"Shore Bank had a good start to 2025 with record net interest income and stable expenses driving improvements in our net interest margin, return on assets and operating leverage," stated James ("Jimmy") M. Burke, President and Chief Executive Officer of Shore Bancshares. "Funding costs have trended lower and are expected to decline further as higher-cost seasonal municipal deposits roll off. Asset yields are expected to continue to increase as loans and securities reprice higher. We remain committed to disciplined expense management to drive sustained improvements in operating efficiency.

"We are also pleased to welcome Charlie Cullum to our executive leadership team as Chief Financial Officer," continued Mr. Burke. "His extensive experience and financial expertise will be a valuable asset to our organization. We also extend our sincere appreciation to Todd Capitani for his outstanding service, exceptional leadership, and unwavering commitment over the years. We wish him the best in his well-earned retirement and future pursuits."

_____________________

(1) See the Reconciliation of GAAP and non-GAAP Measures tables.

Balance Sheet Review

Total assets were $6.18 billion at March 31, 2025, a decrease of $54.2 million, or 0.9%, when compared to $6.23 billion at December 31, 2024. The aggregate decrease was primarily due to the decrease of cash and cash equivalents of $70.8 million and investments held to maturity of $11.5 million, partially offset by an increase of investment securities available for sale of $29.9 million. 

The Company's tangible common equity ratio at March 31, 2025 was 7.46%, compared to 7.17% at December 31, 2024. The Company's Tier 1 and Total Risk-Based Capital Ratios at March 31, 2025 were 10.37% and 12.52%, respectively. The Bank's Tier 1 and Total Risk-Based Capital Ratios at March 31, 2025 were 11.09% and 12.33%, respectively. Non-owner occupied commercial real estate ("CRE") loans as a percentage of the Bank's Tier 1 Capital + ACL at March 31, 2025 and December 31, 2024 were $2.12 billion or 357.37%, and $2.08 billion or 359.52%, respectively. Non-owner occupied construction loans as a percentage of the Bank's Tier 1 Capital + ACL at March 31, 2025 and December 31, 2024 were $365.7 million or 61.69%, and $336.0 million or 57.99%, respectively.

CRE loans at March 31, 2025 were $2.54 billion compared to $2.56 billion at December 31, 2024. The following table provides the stratification of the classes of CRE loans at March 31, 2025.

March 31, 2025



Owner Occupied


Non-Owner Occupied

 ($ in thousands)


Average LTV(1)


Average
Loan Size


Loan
Balance(2)


Average LTV(1)


Average
Loan Size


Loan
Balance(2)

Office, medical


44.65 %


$                598


$          32,316


51.79 %


$             1,900


$        104,520

Office, govt. or govt. contractor


50.74


627


5,015


56.58


2,919


49,622

Office, other


49.13


496


96,259


48.37


1,296


213,758

Office, total


48.27


522


133,590


49.00


1,017


367,900

Retail


50.23


605


62,905


49.60


2,413


456,056

Multi-family (5+ units)


—


—


—


55.69


2,303


271,812

Motel/hotel


—


—


—


44.11


4,092


196,400

Industrial/warehouse


48.54


655


97,645


48.56


1,502


208,714

Marine/boat slips


29.66


1,470


44,109


39.71


2,222


15,553

Restaurant


49.03


1,017


60,018


47.97


1,033


46,470

Church


34.81


894


63,500


13.48


2,408


2,408

Other


41.69


1,006


244,340


54.00


609


553,407

Total CRE loans, gross(3)


44.36


774


$        706,107


51.28


1,251


$     2,118,720



(1)

Loan-to-value ("LTV") is determined based on latest available appraisal against current bank owned principal. Loans without an updated appraisal utilized the original transaction value.

(2)

Loan balance includes deferred fees and costs.

(3)

CRE loans include land and construction.

The Bank's office CRE loan portfolio, which includes owner occupied and non-owner occupied CRE loans, was $501.5 million, or 10.5% of total loans at March 31, 2025. The Bank's office CRE loan portfolio included medical tenants of $136.8 million, or 27.3% of the total office CRE loan portfolio, at March 31, 2025. The Bank's office CRE loan portfolio also included government or government contractor tenants of $54.6 million, or 10.9% of the total office CRE loan portfolio for the same period. At March 31, 2025, the average loan debt-service coverage ratio was 1.8x and the average LTV was 49.00%.

There were 493 loans in the office CRE portfolio with an average loan size of $1.0 million and median loan size of $388 thousand. LTV estimates for the office CRE portfolio at March 31, 2025 are summarized below and LTV collateral values are based on the most recent appraisal, which may vary from the appraised value at loan origination.

LTV Range ($ in thousands)


Loan Count


 Loan Balance


% of Office CRE

Less than or equal to 50%


244


$                    180,087


35.9 %

50%-60%


74


114,897


22.9

60%-70%


92


120,333


24.0

70%-80%


70


75,618


15.1

Greater than 80%


13


10,555


2.1

Grand Total


493


$                    501,490


100.0 %

The Bank had 18 office CRE loans with balances greater than $5.0 million, totaling $163.6 million at March 31, 2025, compared to 18 office CRE loans totaling $164.5 million at December 31, 2024. The decrease in this portfolio segment was the result of normal amortization. Of the office CRE portfolio balance, 74.3% was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 97.1% was secured by properties with five stories or less. Of the office CRE loans, $2.2 million were classified as special mention or substandard at March 31, 2025. The Bank did not have any charge-offs related to the office CRE portfolio during 2025.

At March 31, 2025 and December 31, 2024, nonperforming assets were $18.9 million, or 0.3% of total assets, and $24.8 million, or 0.4% of total assets, respectively. The balance of nonperforming assets decreased $5.9 million, primarily due to a commercial real estate nonaccrual loan and a decrease in repossessed marine assets of $886 thousand. When comparing March 31, 2025 to March 31, 2024, nonperforming assets increased $2.5 million, primarily due to an increase in nonaccrual loans of $2.6 million and an increase in repossessed marine loans of $584 thousand.

Total deposits decreased $68.0 million, or 1.2%, to $5.46 billion at March 31, 2025 when compared to December 31, 2024. The decrease in total deposits was primarily due to a decrease in interest-bearing checking deposits of $125.6 million, partially offset by an increase in time deposits of $60.8 million. The decrease in interest-bearing deposits was primarily driven by seasonal municipal run-offs of deposits. The yield on interest-bearing deposits was 2.94% at March 31, 2025 compared to 3.12% at December 31, 2024.

Total funding, which includes customer deposits, Federal Home Loan Bank ("FHLB") advances and brokered deposits was $5.51 billion at March 31, 2025, compared to $5.58 billion at December 31, 2024. The Bank had a $50.0 million FHLB advance at March 31, 2025 and December 31, 2024. The advance consisted of an 18-month Bermuda Convertible note of $50.0 million. The Bank had zero brokered deposits at March 31, 2025 and December 31, 2024. Total reciprocal deposits were $1.46 billion at March 31, 2025 and $1.65 billion at December 31, 2024. 

The Bank's uninsured deposits were $940.6 million, or 17.2% of total deposits, at March 31, 2025. The Bank's uninsured deposits, excluding deposits secured with pledged collateral, were $775.6 million, or 14.2%, for same period. At March 31, 2025, the Bank had approximately $1.35 billion of available liquidity, including $389.0 million in cash and cash equivalents, $959.5 million in secured borrowing capacity at the FHLB and other correspondent banks and $95.0 million in unsecured lines of credit.

Total stockholders' equity increased $11.4 million, or 2.1%, when compared to December 31, 2024, primarily due to current year earnings and a decrease in accumulated other comprehensive losses, partially offset by cash dividends paid. As of March 31, 2025, the ratio of total equity to total assets was 8.94% and the ratio of total tangible equity to total tangible assets(2) was 7.46%, compared to 8.68% and 7.17%, respectively, at December 31, 2024.

Review of Quarterly Financial Results 

Net interest income was $46.0 million for the first quarter of 2025, compared to $44.0 million for the fourth quarter of 2024 and $41.1 million for the first quarter of 2024. The increase in net interest income when compared to the fourth quarter of 2024 was primarily due to an increase in interest income on loans of $219 thousand, an increase in interest on investment securities of $168 thousand and a decrease in interest expense on deposits of $2.3 million, partially offset by a decrease in interest on deposits at other banks of $728 thousand. The increase in net interest income of $4.9 million when compared to the first quarter of 2024 was primarily due to an increase in interest on deposits at other banks of $2.4 million, an increase in interest and fees on loans of $1.9 million and an increase in interest on investment securities of $582 thousand.

The Company's NIM increased to 3.24% for the first quarter of 2025 from 3.03% for the fourth quarter of 2024, primarily due to higher core interest income. Core NIM increased for the comparable periods from 2.85% to 3.02%. Excluding accretion interest, loan yields increased 17 bps and funding costs decreased 10 bps, for the comparable periods. Interest expense for the first quarter of 2025 decreased $2.4 million when compared to the fourth quarter of 2024. All products repriced at favorable rates, and were partially offset by the seasonal run off of municipal deposits. The Company's NIM increased to 3.24% for the first quarter of 2025 from 3.08% for the first quarter of 2024. The Company's interest-earning asset yields increased to 5.35% for the first quarter of 2025 from 5.32% for the first quarter of 2024, while the cost of funds decreased 11 bps to 2.20% from 2.31% for the same periods.

The provision for credit losses was $1.0 million for the three months ended March 31, 2025. The comparable amounts were $780 thousand for the three months ended December 31, 2024 and $407 thousand for the three months ended March 31, 2024. The increase in the provision for credit losses for the first quarter of 2025 compared to the fourth quarter of 2024 was due higher reserves related to growth in the construction to permanent loan portfolio partially offset by improved economic outlook. Coverage ratios remained flat at 1.21% at March 31, 2025 from December 31, 2024, and decreased from 1.23% at March 31, 2024. Net charge-offs decreased to $554 thousand for the first quarter of 2025 compared $1.3 million for the fourth quarter of 2024 and $565 thousand for the first quarter of 2024.

Total noninterest income for the first quarter of 2025 was $7.0 million, a decrease of $1.9 million from $8.9 million for the fourth quarter of 2024, and an increase of $436 thousand from $6.6 million for the first quarter of 2024. When comparing the first quarter of 2025 to the fourth quarter of 2024, the decrease in noninterest income was primarily due to lower other noninterest income of $847 thousand resulting from the absence of the gain on sale of other assets held for sale recognized in the fourth quarter of 2024 and a decrease in mortgage banking revenue of $531 thousand, driven by decreased mortgage servicing activity primarily related to prepayments. When comparing the first quarter of 2025 to the first quarter of 2024, the increase in noninterest income was primarily due to an increase in mortgage banking activity, driven by increased mortgage servicing activity and lower prepayment rates.

Total noninterest expense of $33.7 million for the first quarter of 2025 decreased $196 thousand compared to the fourth quarter of 2024 expense of $33.9 million, and decreased $3.0 million compared to the first quarter of 2024 expense of $36.7 million. The decrease from the fourth quarter of 2024 was primarily due to lower salaries and employee benefit expenses. The decrease from the first quarter of 2024 was primarily due to the absence of the losses related to the credit card fraud incident in the first quarter of 2024, partially offset by higher salaries and benefits expense and software and data processing costs.

The efficiency ratio for the first quarter of 2025 when compared to the fourth quarter of 2024 and the first quarter of 2024 was 63.64%, 64.21% and 76.93%, respectively. Non-GAAP efficiency ratios(3) for the same periods were 59.76%, 60.28% and 62.37%, respectively. The net operating expense ratio, which is noninterest expense less noninterest income divided by average assets, for the first quarter of 2025 was 1.77%, compared to 1.62% and 2.10% for the fourth quarter of 2024 and the first quarter of 2024, respectively. The non-GAAP net operating expense ratio(1), which excludes core deposit intangible amortization and non-recurring activity, was 1.65% for the first quarter of 2025, compared to 1.50% and 1.62% for the fourth quarter of 2024 and the first quarter of 2024, respectively.

Shore Bancshares Information

Shore Bancshares is a financial holding company headquartered in Easton, Maryland and is the parent company of Shore United Bank, N.A.Shore Bancshares engages in trust and wealth management services through Wye Financial Partners, a division of Shore United Bank, N.A. Additional information is available at www.shorebancshares.com.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions. Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: general economic conditions, (including the interest rate environment, government economic and monetary policies, the strength of global financial markets and inflation/deflation and supply chain issues), whether national or regional, and conditions in the lending markets in which we participate that may have an adverse effect on the demand for our loans and other products, our credit quality and related levels of nonperforming assets and loan losses, and the value and salability of the real estate that we own or that is the collateral for our loans; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; the ability to effectively manage the information technology systems, including third-party vendors, cyber or data privacy incidents or other failures, disruptions or security breaches, and risk related to the development and use of artificial intelligence; the ability to develop and use technologies to provide products and services that will satisfy customer demands; results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for loan losses or to write-down assets; changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, which could lead to restrictions on activities of banks generally, or our subsidiary bank in particular, more restrictive regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products; changes in market rates and prices may adversely impact the value of securities, loans, deposits and other financial instruments and the interest rate sensitivity of our balance sheet; our liquidity requirements could be adversely affected by changes in our assets and liabilities; our ability to prudently manage our growth and execute our strategy; impairment of our goodwill and intangible assets; competitive factors among financial services organizations, including product and pricing pressures and our ability to attract, develop and retain qualified banking professionals; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; the growth and profitability of noninterest or fee income being less than expected; the effect of legislative or regulatory developments, including changes in laws concerning taxes, banking, securities, insurance and other aspects of the financial services industry; the effect of any change in federal government enforcement of federal laws affecting the cannabis industry; the effect of changes in accounting policies and practices, as may be adopted by the Financial Accounting Standards Board, the U.S. Securities and Exchange Commission (the "SEC"), the Public Company Accounting Oversight Board and other regulatory agencies; changes in U.S. trade policies, including the implementation of tariffs and other protectionist trade policies; the impact of governmental efforts to restructure or adjust the U.S. financial regulatory system; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; the impact of recent or future changes in Federal Deposit Insurance Corporation (the "FDIC") insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount, including any special assessments; he effect of fiscal and governmental policies of the U.S. federal government; climate change and other catastrophic events or disasters; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts of terrorism, and/or military conflicts, which could impact business and economic conditions in the United States and abroad; and other factors that may affect our future results. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's 2024 Annual Report on Form 10-K filed with the SEC and available at the SEC's Internet site (https://www.sec.gov).

The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments. 

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited)














Q1 2025 vs.


Q1 2025 vs.

($ in thousands, except per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024


Q4 2024


Q1 2024

PROFITABILITY FOR THE PERIOD















Taxable-equivalent net interest income


$         46,110


$         44,093


$         43,345


$         42,222


$         41,214


4.6 %


11.9 %

Less: Taxable-equivalent adjustment


81


82


82


82


79


(1.2)


2.5

Net interest income


46,029


44,011


43,263


42,140


41,135


4.6


11.9

Provision for credit losses


1,028


780


1,470


2,081


407


31.8


152.6

Noninterest income


7,003


8,853


7,287


8,440


6,567


(20.9)


6.6

Noninterest expense


33,747


33,943


34,114


33,499


36,698


(0.6)


(8.0)

Income before income taxes


18,257


18,141


14,966


15,000


10,597


0.6


72.3

Income tax expense


4,493


4,859


3,777


3,766


2,413


(7.5)


86.2

Net income


$         13,764


$         13,282


$         11,189


$         11,234


$           8,184


3.6


68.2
















Return on average assets


0.91 %


0.86 %


0.77 %


0.77 %


0.57 %


              5 bp


             34 bp

Return on average assets excluding amortization of
intangibles and fraud losses – non-GAAP(1)


1.00


0.94


0.90


0.91


0.94


6


6

Return on average equity


10.20


9.82


8.41


8.70


6.38


38


382

Return on average tangible equity – non-GAAP(1)


13.74


13.37


12.37


12.85


13.39


37


35

Interest rate spread


2.30


2.02


2.06


2.11


2.34


28


(4)

Net interest margin


3.24


3.03


3.17


3.11


3.08


21


16

Efficiency ratio - GAAP


63.64


64.21


67.49


66.23


76.93


(57)


(1,329)

Efficiency ratio - non-GAAP(1)


59.76


60.28


62.10


61.05


62.37


(52)


(261)

Noninterest income to average assets


0.46


0.57


0.50


0.58


0.46


(11)


—

Noninterest expense to average assets


2.23


2.19


2.34


2.31


2.56


4


(33)

Net operating expense to average assets – GAAP


1.77


1.62


1.84


1.73


2.10


15


(33)

Net operating expense to average assets – non-GAAP(1)


1.65


1.50


1.65


1.55


1.62


15


3
















PER SHARE DATA















Basic net income per common share


$             0.41


$             0.40


$             0.34


$             0.34


$             0.25


2.5 %


64.0 %

Diluted net income per common share


0.41


0.40


0.34


0.34


0.25


2.5


64.0

Dividends paid per common share


0.12


0.12


0.12


0.12


0.12


—


—

Book value per common share at period end


16.55


16.23


16.00


15.74


15.51


2.0


6.7

Tangible book value per common share at period end - non-GAAP(1)


13.58


13.19


12.88


12.54


12.24


3.0


11.0

Common share market value at period end


13.54


15.85


13.99


11.45


11.50


(14.6)


17.7

Common share intraday price:















High


$           17.24


$           17.61


$           14.99


$           11.90


$           14.38


(2.1) %


19.9 %

Low


13.15


13.21


11.03


10.06


10.56


(0.5)


24.5

____________________________________

(1)

See the Reconciliation of GAAP and non-GAAP Measures tables.

 

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited) - Continued














Q1 2025 vs.


Q1 2025 vs.

($ in thousands, except per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024


Q4 2024


Q1 2024

AVERAGE BALANCE SHEET DATA















Loans


$     4,784,991


$     4,796,245


$     4,734,001


$     4,706,510


$     4,655,183


(0.2) %


2.8 %

Investment securities


664,655


655,610


656,375


706,079


655,323


1.4


1.4

Earning assets


5,768,080


5,798,454


5,435,311


5,459,961


5,387,782


(0.5)


7.1

Assets


6,129,241


6,163,497


5,810,492


5,839,328


5,774,824


(0.6)


6.1

Deposits


5,417,514


5,461,583


5,086,348


5,064,974


5,142,658


(0.8)


5.3

FHLB advances


50,000


50,000


83,500


143,769


4,000


—


1150.0

Subordinated debt & TRUPS


73,840


73,578


72,946


72,680


72,418


0.4


2.0

Stockholders' equity


547,443


538,184


529,155


519,478


515,976


1.7


6.1
















CREDIT QUALITY DATA















Net charge-offs


$              554


$           1,333


$           1,379


$              886


$              565


(58.4) %


(2.0) %
















Nonaccrual loans


$         15,402


$         21,008


$         14,844


$         14,837


$         12,776


(26.7) %


20.6 %

Loans 90 days past due and still accruing


894


294


454


414


1,560


204.1


(42.7)

Other real estate owned and repossessed property


2,608


3,494


485


1,739


2,024


(25.4)


28.9

Total nonperforming assets


$         18,904


$         24,796


$         15,783


$         16,990


$         16,360


(23.8)


15.6

 

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited) - Continued














Q1 2025 vs.


Q1 2025 vs.

($ in thousands, except per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024


Q4 2024


Q1 2024

CAPITAL AND CREDIT QUALITY RATIOS















Period-end equity to assets


8.94 %


8.68 %


9.01 %


8.92 %


8.84 %


26 bp


 10 bp

Period-end tangible equity to tangible assets - non-GAAP(1)


7.46


7.17


7.39


7.23


7.11


29


35
















Annualized net charge-offs to average loans


0.05 %


0.11 %


0.12 %


0.08 %


0.05 %


           (6) bp


 — bp
















Allowance for credit losses as a percent of:















Period-end loans


1.21 %


1.21 %


1.24 %


1.24 %


1.23 %


— bp


(2) bp

Nonaccrual loans


376.85


275.66


395.24


394.14


448.78


10,119


(7,193)

Nonperforming assets


307.04


233.55


371.72


344.19


350.46


7,349


(4,342)
















As a percent of total loans:















Nonaccrual loans


0.32 %


0.44 %


0.31 %


0.32 %


0.27 %


(12) bp


5 bp
















As a percent of total loans, other real estate owned and repossessed property:















Nonperforming assets


0.40 %


0.52 %


0.33 %


0.36 %


0.35 %


(12) bp


5 bp
















As a percent of total assets:















Nonaccrual loans


0.25 %


0.34 %


0.25 %


0.25 %


0.22 %


(9) bp


3 bp

Nonperforming assets


0.31


0.40


0.27


0.29


0.28


(9)


3

____________________________________

(1)

See the Reconciliation of GAAP and non-GAAP Measures tables.

 

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited) - Continued














Q1 2025 vs.


Q1 2025 vs.

($ in thousands)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024


Q4 2024


Q1 2024

The Company Amounts















Common Tier 1 Capital


$   470,223


$   458,258


$   446,402


$   435,238


$     421,670


2.61 %


11.51 %

Tier 1 Capital


500,149


488,105


476,170


464,554


450,907


2.47


10.92

Total Capital


603,928


591,228


579,664


567,680


552,657


2.15


9.28

Risk Weighted Assets


4,823,833


4,852,564


4,816,165


4,803,230


4,729,930


(0.59)


1.99
















The Company Ratios















Common Tier 1 Capital to RWA


9.75 %


9.44 %


9.27 %


9.06 %


8.91 %


             31 bp


             84 bp

Tier 1 Capital to RWA


10.37


10.06


9.89


9.67


9.53


31


84

Total Capital to RWA


12.52


12.18


12.04


11.82


11.68


34


84

Tier 1 Capital to AA (Leverage)


8.27


8.02


8.31


8.07


7.93


25


34
















The Bank Amounts















Common Tier 1 Capital


$   534,824


$   521,453


$   509,511


$   501,003


$   487,494


2.56 %


9.71 %

Tier 1 Capital


534,824


521,453


509,511


501,003


487,494


2.56


9.71

Total Capital


594,550


580,706


569,317


560,625


545,922


2.38


8.91

Risk Weighted Assets


4,821,975


4,851,903


4,808,058


4,796,512


4,723,872


(0.62)


2.08
















The Bank Ratios















Common Tier 1 Capital to RWA


11.09 %


10.75 %


10.60 %


10.45 %


10.32 %


             34 bp


             77 bp

Tier 1 Capital to RWA


11.09


10.75


10.60


10.45


10.32


34


77

Total Capital to RWA


12.33


11.97


11.84


11.69


11.56


36


77

Tier 1 Capital to AA (Leverage)


8.84


8.58


8.90


8.71


8.58


26


26

 

Shore Bancshares, Inc.

Consolidated Balance Sheets (Unaudited)














March 31, 2025













compared to

($ in thousands, except per share data)


March 31, 2025


December 31, 2024


September 30, 2024


June 30, 2024


March 31, 2024


December 31, 2024

ASSETS













Cash and due from banks


$                  46,886


$                  44,008


$                  52,363


$                  50,090


$                  43,079


6.5 %

Interest-bearing deposits with other banks


342,120


415,843


131,258


88,793


71,481


(17.7)

Cash and cash equivalents


389,006


459,851


183,621


138,883


114,560


(15.4)

Investment securities:













Available for sale, at fair value


179,148


149,212


133,339


131,594


179,496


20.1

Held to maturity, net of allowance for credit losses


469,572


481,077


484,583


499,431


503,822


(2.4)

Equity securities, at fair value


5,945


5,814


5,950


5,699


5,681


2.3

Restricted securities, at cost


20,411


20,253


20,253


21,725


17,863


0.8

Loans held for sale, at fair value


15,717


19,606


26,877


27,829


13,767


(19.8)

Loans held for investment


4,777,489


4,771,988


4,733,909


4,705,737


4,648,725


0.1

Less: allowance for credit losses


(58,042)


(57,910)


(58,669)


(58,478)


(57,336)


(0.2)

Loans, net


4,719,447


4,714,078


4,675,240


4,647,259


4,591,389


0.1














Premises and equipment, net


81,692


81,806


81,663


82,176


83,084


(0.1)

Goodwill


63,266


63,266


63,266


63,266


63,266


—

Other intangible assets, net


36,033


38,311


40,609


42,945


45,515


(5.9)

Mortgage servicing rights, at fair value


5,535


5,874


5,309


5,995


5,821


(5.8)

Right-of-use assets


11,709


11,385


11,384


11,762


12,153


2.8

Cash surrender value on life insurance


105,040


104,421


103,729


102,969


102,321


0.6

Accrued interest receivable


20,555


19,570


19,992


19,641


19,541


5.0

Deferred income taxes


31,428


31,857


32,191


36,078


38,978


(1.3)

Other assets


22,059


24,382


29,698


26,765


28,447


(9.5)

TOTAL ASSETS


$             6,176,563


$             6,230,763


$             5,917,704


$             5,864,017


$             5,825,704


(0.9)

 

Shore Bancshares, Inc.

Consolidated Balance Sheets (Unaudited) - Continued














March 31, 2025













compared to

($ in thousands, except per share data)


March 31, 2025


December 31, 2024


September 30, 2024


June 30, 2024


March 31, 2024


December 31, 2024

LIABILITIES













Deposits:













Noninterest-bearing


$             1,565,017


$             1,562,815


$             1,571,393


$             1,587,252


$             1,200,680


0.1 %

Interest-bearing checking


852,480


978,076


751,533


658,512


1,101,954


(12.8)

Money market and savings


1,800,529


1,805,884


1,634,140


1,689,343


1,712,303


(0.3)

Time deposits


1,242,319


1,181,561


1,268,657


1,213,778


1,169,342


5.1

Total deposits


5,460,345


5,528,336


5,225,723


5,148,885


5,184,279


(1.2)

FHLB advances


50,000


50,000


50,000


81,000


—


—

Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS")


29,926


29,847


29,768


29,316


29,237


0.3

Subordinated debt


44,053


43,870


43,688


43,504


43,322


0.4

Total borrowings


123,979


123,717


123,456


153,820


72,559


0.2

Lease liabilities


12,183


11,844


11,816


12,189


12,552


2.9

Other liabilities


27,586


25,800


23,438


26,340


41,086


6.9

TOTAL LIABILITIES


5,624,093


5,689,697


5,384,433


5,341,234


5,310,476


(1.2)

STOCKHOLDERS' EQUITY













Common stock, par value $0.01 per share


333


333


333


333


332


—

Additional paid in capital


358,572


358,112


357,580


356,994


356,464


0.1

Retained earnings


199,898


190,166


180,884


173,716


166,490


5.1

Accumulated other comprehensive loss


(6,333)


(7,545)


(5,526)


(8,260)


(8,058)


16.1

TOTAL STOCKHOLDERS' EQUITY


552,470


541,066


533,271


522,783


515,228


2.1

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$             6,176,563


$             6,230,763


$             5,917,704


$             5,864,017


$             5,825,704


(0.9)














Period-end common shares outstanding


33,374,265


33,332,177


33,326,772


33,214,522


33,210,522


0.1

Book value per common share


$                    16.55


$                    16.23


$                    16.00


$                    15.74


$                    15.51


2.0

 

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter (Unaudited)














Q1 2025 vs.


Q1 2025 vs.













compared to


compared to

($ in thousands, except share and per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024


Q4 2024


Q1 2024

INTEREST INCOME















Interest and fees on loans


$       67,647


$       67,428


$       69,157


$       67,292


$       65,754


0.3 %


2.9 %

Interest on investment securities:















Taxable


5,001


4,833


4,962


5,230


4,419


3.5


13.2

Tax-exempt


6


6


6


6


6


—


—

Interest on deposits with other banks


3,409


4,137


564


578


960


(17.6)


255.1

Total interest income


76,063


76,404


74,689


73,106


71,139


(0.5)


6.9
















INTEREST EXPENSE















Interest on deposits


28,070


30,363


28,856


27,585


28,497


(7.6)


(1.5)

Interest on short-term borrowings


—


—


491


1,584


56


—


(100.0)

Interest on long-term borrowings


1,964


2,030


2,079


1,797


1,451


(3.3)


35.4

Total interest expense


30,034


32,393


31,426


30,966


30,004


(7.3)


0.1
















NET INTEREST INCOME


46,029


44,011


43,263


42,140


41,135


4.6


11.9

Provision for credit losses


1,028


780


1,470


2,081


407


31.8


152.6
















NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES


45,001


43,231


41,793


40,059


40,728


4.1


10.5
















NONINTEREST INCOME















Service charges on deposit accounts


1,514


1,606


1,543


1,493


1,507


(5.7)


0.5

Trust and investment fee income


823


857


880


896


734


(4.0)


12.1

Gain on sale of loans held for sale


966


1,221


1,961


1,131


708


(20.9)


36.4

Interchange credits


1,577


1,726


1,711


1,717


1,587


(8.6)


(0.6)

Mortgage banking revenue


274


805


(784)


852


93


(66.0)


194.6

Title Company revenue


117


59


100


165


78


98.3


50.0

Other noninterest income


1,732


2,579


1,876


2,186


1,860


(32.8)


(6.9)

Total noninterest income


$         7,003


$         8,853


$         7,287


$         8,440


$         6,567


(20.9)


6.6

 

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter (Unaudited) - Continued














Q1 2025 vs.


Q1 2025 vs.













compared to


compared to

($ in thousands, except share and per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024


Q4 2024


Q1 2024

NONINTEREST EXPENSE















Salaries and employee benefits


$      16,440


$      17,209


$      16,523


$      16,900


$      15,949


(4.5) %


3.1 %

Occupancy expense


2,538


2,474


2,384


2,432


2,416


2.6


5.1

Furniture and equipment expense


853


760


876


900


904


12.2


(5.6)

Software and data processing


4,691


4,512


4,419


4,219


4,021


4.0


16.7

Directors' fees


348


460


443


359


295


(24.4)


18.0

Amortization of other intangible assets


2,278


2,298


2,336


2,569


2,576


(0.9)


(11.6)

FDIC insurance premium expense


1,091


1,013


1,160


1,089


1,150


7.7


(5.1)

Legal and professional fees


1,613


1,521


1,362


1,354


1,599


6.1


0.9

Fraud losses(1)


105


98


673


62


4,502


7.1


(97.7)

Other noninterest expense


3,790


3,598


3,938


3,615


3,286


5.3


15.3

Total noninterest expense


33,747


33,943


34,114


33,499


36,698


(0.6)


(8.0)
















Income before income taxes


18,257


18,141


14,966


15,000


10,597


0.6


72.3

Income tax expense


4,493


4,859


3,777


3,766


2,413


(7.5)


86.2

NET INCOME


$      13,764


$      13,282


$      11,189


$      11,234


$        8,184


3.6


68.2
















Weighted average shares outstanding - basic


33,351


33,327


33,318


33,234


33,189


0.1 %


0.5 %

Weighted average shares outstanding - diluted


33,375


33,364


33,339


33,234


33,191


— %


0.6 %
















Basic net income per common share


$          0.41


$          0.40


$          0.34


$          0.34


$          0.25


2.5 %


64.0 %

Diluted net income per common share


$          0.41


$          0.40


$          0.34


$          0.34


$          0.25


2.5 %


64.0 %
















Dividends paid per common share


$          0.12


$          0.12


$          0.12


$          0.12


$          0.12


— %


— %

____________________________________

(1)

Fraud losses for the third quarter of 2024 and first quarter of 2024 include $337 thousand and $4.3 million in losses related to the one-time online credit card account opening event. The third quarter of 2024 expense of $337 thousand was related to non-recurring data processing charges to close the fraudulent accounts.

 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited)




Three Months Ended



March 31, 2025


March 31, 2024


December 31, 2024

($ in thousands)


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate

Earning assets



















Loans(1), (2), (3)



















  Commercial real estate


$          2,541,527


$              35,889


5.73 %


$          2,518,884


$              35,633


5.69 %


$          2,551,903


$              36,036


5.62 %

  Residential real estate


1,347,035


18,462


5.56


1,276,191


17,241


5.43


1,358,066


18,142


5.31

  Construction


352,323


5,526


6.36


300,117


4,404


5.90


336,094


5,304


6.28

  Commercial


232,900


3,705


6.45


221,356


4,114


7.48


229,676


3,792


6.57

  Consumer


304,520


4,058


5.40


331,178


4,272


5.19


313,686


4,080


5.17

  Credit cards


6,686


86


5.22


7,457


167


9.01


6,820


154


8.98

Total loans


4,784,991


67,726


5.74


4,655,183


65,831


5.69


4,796,245


67,508


5.60




















Investment securities



















Taxable


664,002


5,001


3.01


654,663


4,419


2.70


654,955


4,833


2.95

Tax-exempt(1)


653


8


4.90


660


8


4.85


655


8


4.89

Interest-bearing deposits


318,434


3,409


4.34


77,276


960


5.00


346,599


4,137


4.75

Total earning assets


5,768,080


76,144


5.35


5,387,782


71,218


5.32


5,798,454


76,486


5.25

Cash and due from banks


43,526






49,499






43,444





Other assets


375,929






395,023






380,321





Allowance for credit losses


(58,294)






(57,480)






(58,722)





Total assets


$          6,129,241






$          5,774,824






$          6,163,497





 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited) - Continued




Three Months Ended



March 31, 2025


March 31, 2024


December 31, 2024

($ in thousands)


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate

Interest-bearing liabilities



















Interest-bearing checking


$            859,698


$                7,025


3.31 %


$          1,110,524


$                6,362


2.30 %


$            901,764


$                7,898


3.48 %

Money market and savings deposits


1,799,707


10,015


2.26


1,669,074


10,160


2.45


1,733,934


10,331


2.37

Time deposits


1,208,250


11,030


3.70


1,179,572


11,724


4.00


1,232,480


12,134


3.92

Brokered deposits


—


—


—


20,465


251


4.93


—


—


—

Interest-bearing deposits(4)


3,867,655


28,070


2.94


3,979,635


28,497


2.88


3,868,178


30,363


3.12

FHLB advances


50,000


598


4.85


4,000


56


5.63


50,000


618


4.92

Subordinated debt and Guaranteed
preferred beneficial interest in junior
subordinated debentures ("TRUPS") (4)


73,840


1,366


7.50


72,418


1,451


8.06


73,578


1,412


7.63

Total interest-bearing liabilities


3,991,495


30,034


3.05


4,056,053


30,004


2.98


3,991,756


32,393


3.23

Noninterest-bearing deposits


1,549,859






1,163,023






1,593,405





Accrued expenses and other liabilities


40,444






39,772






40,152





Stockholders' equity


547,443






515,976






538,184





Total liabilities and stockholders'
equity


$          6,129,241






$          5,774,824






$          6,163,497
























Net interest income




$              46,110






$              41,214






$              44,093






















Net interest spread






2.30 %






2.34 %






2.02 %

Net interest margin






3.24






3.08






3.03

Cost of funds






2.20






2.31






2.31

Cost of deposits






2.10






2.23






2.21

Cost of debt






6.43






7.93






6.54

____________________________________

(1)

All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of nondeductible interest expense.

(2)

Average loan balances include nonaccrual loans.

(3)

Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $3.7 million, $4.2 million and $3.2 million of accretion interest on loans for the three months ended March 31, 2025 and 2024, and December 31, 2024, respectively.

(4)

Interest expense on deposits and borrowing includes amortization of deposit discount and amortization of borrowing fair value adjustments. There were $334 thousand, $367 thousand and $412 thousand of amortization of deposits premium, and $232 thousand, $220 thousand, and $232 thousand of amortization of borrowing fair value adjustments for the three months ended March 31, 2025, March 31, 2024 and December 31, 2024, respectively.

 

Shore Bancshares, Inc.

Reconciliation of GAAP and Non-GAAP Measures (Unaudited)


($ in thousands, except per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024














The following reconciles return on average assets, average equity and return on average tangible equity(1):

Net income


$         13,764


$         13,282


$         11,189


$         11,234


$            8,184


Net income - annualized (A)


$         55,821


$         52,839


$         44,513


$         45,183


$         32,916














Net income


$         13,764


$         13,282


$         11,189


$         11,234


$            8,184


Add: Amortization of other intangible assets, net of tax


1,717


1,683


1,746


1,924


1,989


Add: Credit card fraud losses, net of tax


—


—


252


—


3,339


Less: Sale and fair value of held for sale assets, net of tax


(339)


(329)


—


—


—


Net income, excluding net amortization of other intangible assets, credit card fraud losses
and held for sale assets


15,142


14,636


13,187


13,158


13,512


Net income, excluding net amortization of other intangible assets, credit card fraud losses
and held for sale assets - annualized (B)


$         61,409


$         58,226


$         52,461


$         52,921


$         54,345














Return on average assets (GAAP)


0.91 %


0.86 %


0.77 %


0.77 %


0.57 %


Return on average assets excluding net amortization of other intangible assets, credit card
fraud losses and held for sale assets - (non-GAAP)


1.00 %


0.94 %


0.90 %


0.91 %


0.94 %














Average assets


$   6,129,241


$    6,163,497


$    5,810,492


$    5,839,328


$    5,774,824














Average stockholders' equity (C)


$      547,443


$       538,184


$       529,155


$       519,478


$       515,976


Less: Average goodwill and core deposit intangible


(100,514)


(102,794)


(105,136)


(107,594)


(110,167)


Average tangible equity (D)


$      446,929


$       435,390


$       424,019


$       411,884


$       405,809














Return on average equity (GAAP) (A)/(C)


10.20 %


9.82 %


8.41 %


8.70 %


6.38 %


Return on average tangible equity (non-GAAP) (A)/(D)


12.49 %


12.14 %


10.50 %


10.97 %


8.11 %


Return on average tangible equity (non-GAAP) (B)/(D)


13.74 %


13.37 %


12.37 %


12.85 %


13.39 %


 

Shore Bancshares, Inc.

Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued













($ in thousands, except per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024














The following reconciles GAAP efficiency ratio and non-GAAP efficiency ratio(2):

Noninterest expense (E)


$         33,747


$         33,943


$         34,114


$         33,499


$         36,698


Less: Amortization of other intangible assets


(2,278)


(2,298)


(2,336)


(2,569)


(2,576)


Less: Credit card fraud losses


—


—


(337)


—


(4,323)


Adjusted noninterest expense (F)


$         31,469


$         31,645


$         31,441


$         30,930


$         29,799














Net interest income (G)


$         46,029


$         44,011


$         43,263


$         42,140


$         41,135


Add: Taxable-equivalent adjustment


81


82


82


82


79


Taxable-equivalent net interest income (H)


$         46,110


$         44,093


$         43,345


$         42,222


$         41,214














Noninterest income (I)


$           7,003


$            8,853


$            7,287


$            8,440


$            6,567


Investment securities losses (gains)


—


—


—


—


—


Less: Sale and fair value of held for sale assets


(450)


(450)


—


—


—


Adjusted noninterest income (J)


$           6,553


$            8,403


$            7,287


$            8,440


$            6,567














Efficiency ratio (GAAP) (E)/(G)+(I)


63.64 %


64.21 %


67.49 %


66.23 %


76.93 %


Efficiency ratio (Non-GAAP) (F)/(H)+(J)


59.76 %


60.28 %


62.10 %


61.05 %


62.37 %














Net operating expense to average assets (GAAP)


1.77 %


1.62 %


1.84 %


1.73 %


2.10 %


Net operating expense to average assets (Non-GAAP)


1.65 %


1.50 %


1.65 %


1.55 %


1.62 %


 

Shore Bancshares, Inc.

Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued

 


($ in thousands, except per share data)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024












The following reconciles book value per common share and tangible book value per common share(1):

Stockholders' equity (K)


$            552,470


$            541,066


$            533,271


$            522,783


$            515,228

Less: Goodwill and core deposit intangible


(99,299)


(101,577)


(103,875)


(106,211)


(108,781)

Tangible equity (L)


$            453,171


$            439,489


$            429,396


$            416,572


$            406,447












Shares outstanding (M)


33,374


33,332


33,327


33,272


33,211












Book value per common share (GAAP) (K)/(M)


$                 16.55


$                 16.23


$                 16.00


$                 15.71


$                 15.51

Tangible book value per common share (non-GAAP) (L)/(M)


$                 13.58


$                 13.19


$                 12.88


$                 12.52


$                 12.24












The following reconciles equity to assets and tangible equity to tangible assets(1):

Stockholders' equity (N)


$            552,470


$            541,066


$            533,271


$            522,783


$            515,228

Less: Goodwill and core deposit intangible


(99,299)


(101,577)


(103,875)


(106,211)


(108,781)

Tangible equity (O)


$            453,171


$            439,489


$            429,396


$            416,572


$            406,447












Assets (P)


$         6,176,563


$         6,230,763


$         5,917,704


$         5,864,017


$         5,825,704

Less: Goodwill and core deposit intangible


(99,299)


(101,577)


(103,875)


(106,211)


(108,781)

Tangible assets (Q)


$         6,077,264


$         6,129,186


$         5,813,829


$         5,757,806


$         5,716,923












Period-end equity/assets (GAAP) (N)/(P)


8.94 %


8.68 %


9.01 %


8.92 %


8.84 %

Period-end tangible equity/tangible assets (Non-GAAP) (O)/(Q)


7.46 %


7.17 %


7.39 %


7.23 %


7.11 %

____________________________________

(1)

Management believes that reporting tangible equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes.

(2)

Management believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling cash-based operating activities.

 

Shore Bancshares, Inc.

Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued


Regulatory Capital and Ratios for the Company











($ in thousands)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024

Common equity


$            552,470


$             541,066


$             533,271


$             522,783


$             515,228

Goodwill (1)


(61,300)


(61,362)


(61,397)


(61,460)


(61,523)

Core deposit intangible(2)


(27,280)


(28,991)


(30,572)


(32,313)


(34,235)

DTAs that arise from net operating loss and tax credit carry forwards


—


—


(426)


(2,032)


(5,858)

Accumulated other comprehensive loss


6,333


7,545


5,526


8,260


8,058

Common Equity Tier 1 Capital


470,223


458,258


446,402


435,238


421,670

TRUPS


29,926


29,847


29,768


29,316


29,237

Tier 1 Capital


500,149


488,105


476,170


464,554


450,907

Allowable reserve for credit losses and other Tier 2 adjustments


59,726


59,253


59,806


59,622


58,428

Subordinated notes


44,053


43,870


43,688


43,504


43,322

Total Capital


$            603,928


$             591,228


$             579,664


$             567,680


$             552,657












Risk-Weighted Assets ("RWA")


$        4,823,833


$         4,852,564


$         4,816,165


$         4,803,230


$         4,729,930

Average Assets ("AA")


6,050,310


6,083,760


5,729,576


5,756,260


5,684,150












Common Tier 1 Capital to RWA


9.75 %


9.44 %


9.27 %


9.06 %


8.91 %

Tier 1 Capital to RWA


10.37


10.06


9.89


9.67


9.53

Total Capital to RWA


12.52


12.18


12.04


11.82


11.68

Tier 1 Capital to AA (Leverage)(3)


8.27


8.02


8.31


8.07


7.93

 

Shore Bancshares, Inc.

Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued


Regulatory Capital and Ratios for the Bank











($ in thousands)


Q1 2025


Q4 2024


Q3 2024


Q2 2024


Q1 2024

Common equity


$            617,071


$             604,261


$             595,954


$             587,283


$             579,520

Goodwill (1)


(61,300)


(61,362)


(61,397)


(61,460)


(61,523)

Core deposit intangible(2)


(27,280)


(28,991)


(30,572)


(32,313)


(34,235)

DTAs that arise from net operating loss and tax credit carry forwards


—


—


—


(767)


(4,326)

Accumulated other comprehensive loss


6,333


7,545


5,526


8,260


8,058

Common Equity Tier 1 Capital


534,824


521,453


509,511


501,003


487,494

Tier 1 Capital


534,824


521,453


509,511


501,003


487,494

Allowable reserve for credit losses and other Tier 2 adjustments


59,726


59,253


59,806


59,622


58,428

Total Capital


$            594,550


$             580,706


$             569,317


$             560,625


$             545,922












Risk-Weighted Assets ("RWA")


$        4,821,975


$         4,851,903


$         4,808,058


$         4,796,512


$         4,723,872

Average Assets ("AA")


6,050,130


6,077,540


5,721,995


5,750,604


5,679,282

___________________________________

(1)

Goodwill is net of deferred tax liability.

(2)

Core deposit intangible is net of deferred tax liability.

 

Shore Bancshares, Inc.

Summary of Loan Portfolio (Unaudited)

Portfolio loans are summarized by loan type as follows:


($ in thousands)


March 31, 2025


%


December 31, 2024


%


September 30, 2024


%


June 30, 2024


%


March 31, 2024


%

Portfolio Loans by Loan Type





















Commercial real estate


$             2,544,107


53.2 %


$             2,557,806


53.6 %


$             2,535,004


53.5 %


$             2,546,114


54.1 %


$             2,531,076


54.5 %

Residential real estate


1,325,858


27.8


1,329,406


27.9


1,312,375


27.7


1,280,973


27.2


1,256,925


27.0

Construction


366,218


7.7


335,999


7.0


337,113


7.1


327,875


7.0


299,133


6.4

Commercial


234,499


4.9


237,932


5.0


225,083


4.8


218,987


4.6


229,594


4.9

Consumer


300,007


6.3


303,746


6.4


317,149


6.7


324,480


6.9


325,076


7.0

Credit cards


6,800


0.1


7,099


0.1


7,185


0.2


7,308


0.2


6,921


0.2

Total loans


4,777,489


100.0 %


4,771,988


100.0 %


4,733,909


100.0 %


4,705,737


100.0 %


4,648,725


100.0 %

Less: Allowance for credit losses


(58,042)




(57,910)




(58,669)




(58,478)




(57,336)



Total loans, net


$             4,719,447




$             4,714,078




$             4,675,240




$             4,647,259




$             4,591,389



 

Shore Bancshares, Inc.

Classified Assets and Nonperforming Assets (Unaudited)

Classified assets and nonperforming assets are summarized as follows:

 

($ in thousands)


March 31, 2025


December 31, 2024


September 30, 2024


June 30, 2024


March 31, 2024












Classified loans











Substandard


$                   19,434


$                   24,675


$                   22,798


$                   17,409


$                   13,403

Total classified loans


19,434


24,675


22,798


17,409


13,403

Special mention loans


33,456


33,519


14,385


25,549


27,192

Total classified and special mention loans


$                   52,890


$                   58,194


$                   37,183


$                   42,958


$                   40,595












Classified loans


$                   19,434


$                   24,675


$                   22,798


$                   17,409


$                   13,403

Other real estate owned


179


179


179


179


179

Repossessed assets


2,429


3,315


306


1,560


1,845

Total classified assets


$                   22,042


$                   28,169


$                   23,283


$                   19,148


$                   15,427












Classified assets to total assets


0.36 %


0.45 %


0.39 %


0.33 %


0.26 %












Nonaccrual loans


$                   15,402


$                   21,008


$                   14,844


$                   14,837


$                   12,776

90+ days delinquent accruing


894


294


454


414


1,560

Other real estate owned ("OREO")


179


179


179


179


179

Repossessed property


2,429


3,315


306


1,560


1,845

Total nonperforming assets


$                   18,904


$                   24,796


$                   15,783


$                   16,990


$                   16,360

Accruing borrowers experiencing financial difficulty loans ("BEFD")


1,642


1,662


—


—


—

Total nonperforming assets and BEFDs modifications


$                   20,546


$                   26,458


$                   15,783


$                   16,990


$                   16,360












Nonperforming assets to total assets


0.31 %


0.40 %


0.27 %


0.29 %


0.28 %












Total assets


$             6,176,563


$             6,230,763


$             5,917,704


$             5,864,017


$             5,825,704

 

 

 

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SOURCE Shore Bancshares, Inc.