Shore Bancshares, Inc. Reports 2025 First Quarter Results

Rhea-AI Summary

Shore Bancshares reported strong financial results for Q1 2025, with net income reaching $13.8 million ($0.41 per diluted share), up from $13.3 million in Q4 2024 and $8.2 million in Q1 2024. The bank showed improved performance with:

• Return on Average Assets (ROAA) increased to 0.91%
• Net Interest Income grew to $46.0 million, up $2.0 million from Q4 2024
• Net Interest Margin expanded to 3.24%, a 21 basis point improvement
• Efficiency ratio improved to 63.64%

Asset quality remained stable with nonperforming assets at 0.31% of total assets. The bank's total assets were $6.18 billion, with total deposits at $5.46 billion. Notable strength was shown in the CRE portfolio, with careful management of office exposure. The bank maintained strong liquidity with $1.35 billion available and demonstrated solid capital ratios, including a tangible common equity ratio of 7.46%.

Positive

• Net income increased to $13.8M in Q1 2025 from $8.2M in Q1 2024 (+68%)
• Return on Average Assets improved to 0.91% from 0.57% YoY
• Net Interest Income grew to $46.0M, up from $41.1M YoY
• Net Interest Margin increased to 3.24% from 3.08% YoY
• Efficiency ratio improved to 63.64% from 76.93% YoY
• Nonperforming assets decreased to 0.31% from 0.40% QoQ
• Strong liquidity position with $1.35B available

Negative

• Total assets decreased by $54.2M (-0.9%) QoQ
• Total deposits declined by $68.0M (-1.2%) QoQ
• Uninsured deposits at 17.2% of total deposits
• High concentration in CRE loans at 357.37% of Tier 1 Capital + ACL
• Mortgage banking revenue decreased QoQ

Insights

Financial Analyst

Shore Bancshares delivered substantial YoY earnings growth of 68% with expanding margins and improved operational efficiency in Q1 2025.

Shore Bancshares reported impressive Q1 2025 results with net income of $13.8 million ($0.41 per share), representing a 4% increase from Q4 2024 and a remarkable 68% year-over-year growth. This performance was primarily driven by expanded net interest income of $46.0 million, up $2.0 million quarter-over-quarter and $4.9 million year-over-year.

The bank's net interest margin expanded 21 basis points to 3.24%, while core NIM increased 17 basis points to 3.02%. This expansion resulted from higher loan yields (up 17bps) combined with lower funding costs (down 10bps), demonstrating effective balance sheet management. Interest expense decreased $2.4 million from Q4 2024 as all products repriced at favorable rates.

Operational efficiency improved with the efficiency ratio decreasing to 63.64% from 64.21% in Q4 2024 and 76.93% in Q1 2024. Return on Average Assets improved to 0.91% from 0.86% in Q4 and 0.57% a year ago, reflecting better asset utilization.

While non-interest income decreased $1.9 million from Q4 2024, this was primarily due to the absence of a one-time gain on asset sales and lower mortgage banking revenue related to decreased prepayment activity.

The bank maintains strong liquidity of $1.35 billion, despite a slight decrease in total deposits of 1.2% due to seasonal municipal deposit outflows. Capital metrics strengthened with tangible common equity ratio improving to 7.46% from 7.17%.

Banking Industry Expert

Shore Bancshares demonstrates strong risk management with improving asset quality, prudent CRE exposure, and solid capital/liquidity positions.

Shore Bancshares' Q1 results highlight exceptional risk management in today's challenging banking environment. Nonperforming assets improved to 0.31% of total assets, down from 0.40% in Q4 2024, representing a 23.8% reduction to $18.9 million. Net charge-offs decreased to $554 thousand from $1.3 million in the previous quarter, while maintaining an adequate loan loss reserve coverage ratio of 1.21%.

The bank's CRE exposure is well-managed despite regulatory scrutiny in this segment. The office CRE portfolio of $501.5 million (10.5% of total loans) maintains a conservative average LTV of 49.00% and healthy debt-service coverage of 1.8x. Only $2.2 million (0.4%) of office CRE loans were classified as special mention or substandard, with 58.8% of the portfolio having LTVs below 60%. The portfolio is further de-risked through diversification toward medical tenants (27.3%) and government/contractor tenants (10.9%).

The bank's funding profile remains solid with zero brokered deposits and $1.46 billion in reciprocal deposits. Uninsured deposits represent only 17.2% of total deposits, and excluding deposits secured with pledged collateral, just 14.2% - significantly better than many regional peers.

Capital positions are robust with the Bank's Tier 1 and Total Risk-Based Capital Ratios at 11.09% and 12.33% respectively, well above regulatory requirements. Combined with $1.35 billion in available liquidity, the bank is well-positioned to navigate the current interest rate environment while supporting continued growth.

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.

FAQ

What is Shore Bancshares (SHBI) Q1 2025 earnings per share?

Shore Bancshares reported earnings of $0.41 per diluted common share for Q1 2025, up from $0.40 in Q4 2024 and $0.25 in Q1 2024.

How much did Shore Bancshares (SHBI) net income grow in Q1 2025?

Shore Bancshares' net income grew to $13.8 million in Q1 2025, an increase of $482,000 from Q4 2024's $13.3 million, and significantly up from $8.2 million in Q1 2024.

What is Shore Bancshares (SHBI) net interest margin for Q1 2025?

Shore Bancshares' net interest margin increased to 3.24% in Q1 2025, up 21 basis points from 3.03% in Q4 2024, with core NIM improving from 2.85% to 3.02%.

How strong is Shore Bancshares (SHBI) asset quality in Q1 2025?

Shore Bancshares maintained stable asset quality with nonperforming assets at 0.31% of total assets in Q1 2025, down from 0.40% in Q4 2024, and the allowance for credit losses at 1.21% of loans.

What are Shore Bancshares (SHBI) total deposits in Q1 2025?

Shore Bancshares total deposits were $5.46 billion at March 31, 2025, representing a decrease of $68.0 million or 1.2% compared to December 31, 2024.