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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Shore Bancshares Inc | NASDAQ:SHBI | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.04 | -0.24% | 16.44 | 6.58 | 18.40 | 16.715 | 16.40 | 16.64 | 72,186 | 22:30:00 |
From May 2024 to Nov 2024
EASTON, Md., July 25, 2024 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ - SHBI) (the "Company" or "Shore Bancshares"), the holding company for Shore United Bank, N.A. (the "Bank" or "SUB") reported net income for the second quarter of 2024 of $11.2 million or $0.34 per diluted common share compared to net income of $8.2 million or $0.25 per diluted common share for the first quarter of 2024, and net income of $4.0 million or $0.20 per diluted common share for the second quarter of 2023. Net income for the first-half of 2024 was $19.4 million or $0.58 per diluted common share, compared to net income for the first-half of 2023 of $10.5 million or $0.53 per diluted common share. Unless the context clearly suggests otherwise, references to "the merger" refers to the merger of equals which took place on July 1, 2023 between the Company and The Community Financial Corporation ("TCFC").
Second Quarter and First-Half of 2024 Highlights
"Throughout our first post-merger operating year, we have worked to strengthen our balance sheet and streamline our operations. Our second quarter financial results reflect our progress and momentum on both fronts." stated James ("Jimmy") M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. "Stable deposit balances and increasing asset yields drove NIM expansion and improving financial results built capital and supported loan growth. We continue to closely manage expenses and make investments that will improve operating leverage over time. Credit remains broadly stable and economic activity in our markets remains strong. We appreciate the focus and commitment of all our associates who continue to deliver outstanding service to our clients and our communities."
___________________________________ |
(1) Reconciliations of the non–U.S. generally accepted accounting principles ("GAAP") measures are set forth at the end of this press release. |
Balance Sheet Review
Total assets were $5.9 billion at June 30, 2024, a decrease of $145 million or 2.4%, when compared to $6.0 billion at December 31, 2023. The aggregate decrease was primarily due to a decrease in cash and cash equivalents of $233.5 million and investment securities held to maturity of $13.8 million partially offset by an increase in investment securities available for sale of $21.1 million and loans held for investment of $64.7 million. The ratio of the ACL to total loans increased slightly from 1.23% at December 31, 2023 to 1.24% at June 30, 2024.
The Company's tangible common equity ratio(1) at June 30, 2024 was 7.23% compared to 7.11% at December 31, 2023. The Company's Tier 1 and Total Risk-Based Capital Ratios at June 30, 2024 were 9.67% and 11.82%, respectively. The Bank's Tier 1 and Total Risk-Based Capital Ratios at June 30, 2024 were 10.45% and 11.69%, respectively. Non-owner occupied CRE loans as a percentage of the Bank's Tier 1 Capital + ACL at June 30, 2024 and December 31, 2023 were $2.1 billion or 368.7% and $2.0 billion or 382.6%, respectively. Construction loans as a percentage of the Bank's Tier 1 Capital + ACL at June 30, 2024 and December 31, 2023 were $327.9 million or 58.6% and $299.0 million or 56.7%, respectively.
The Bank's office CRE loan portfolio, which includes owner-occupied and non-owner occupied CRE loans, was $504.9 million or 10.7% of total loans of $4.7 billion at June 30, 2024. The Bank's office CRE loan portfolio included $141.1 million or 28.0% of the total with medical tenants and $72.9 million or 14.4% of the total with government or government contractor tenants. There were 507 loans in the office CRE portfolio with an average and median loan size of $1.0 million and $0.4 million, respectively. Loan to Value ("LTV") estimates for the office CRE portfolio are summarized below and LTV collateral values are based on the most recent appraisal, which varies from the initial loan boarding to interim credit reviews:
LTV Range | Loan Count | Loan Balance | % of Total CRE | |||
Less than or equal to 50% | 257 | $ 169,209 | 34 % | |||
50%-60% | 67 | 131,378 | 26 % | |||
60%-70% | 84 | 99,728 | 20 % | |||
70%-80% | 74 | 87,971 | 17 % | |||
Greater than 80% | 25 | 16,583 | 3 % | |||
Grand Total | 507 | $ 504,869 | 100 % |
The Bank had 18 office CRE loans totaling $164.1 million that were greater than $5.0 million at June 30, 2024, compared to 24 office CRE loans totaling $189.8 million at December 31, 2023. The decrease in this portfolio segment was the result of normal amortization and two large loan payoffs in the quarter. For the office CRE portfolio, at June 30, 2024, the average loan debt-service coverage ratio was 2.5x and average LTV was 51.0%. Of the office CRE portfolio balance, 74% is secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 87% is secured by properties with five stories or less. Of the office CRE loans, $5.9 million will mature and $4.1 million of the office CRE loans will reprice prior to December 31, 2024. Of the office CRE loans, $2.1 million were classified as special mention or substandard at June 30, 2024.
Total deposits decreased $237.2 million, or 4.4% to $5.1 billion at June 30, 2024 when compared to December 31, 2023. The decrease in total deposits was primarily due to decreases in demand deposits of $507.0 million and money market and savings of $88.6 million, partially offset by increases in noninterest-bearing deposits of $329.2 million and time deposits of $29.2 million. The decrease in deposits is primarily attributable to seasonal municipal runoff and a decrease in interest rate-sensitive cannabis-related deposits. The increase in noninterest bearing deposits was significantly impacted by a transfer of $399.4 million of demand deposits which carried an average rate of four bps during the second quarter of 2024.
Total funding, which includes customer deposits, Federal Home Loan Bank ("FHLB") short and long-term advances, and brokered deposits remained flat at $5.2 billion at June 30, 2024 and March 31, 2024. The Bank had $81 million in total FHLB advances at June 30, 2024 compared to zero at March 31, 2024. These advances consisted of short-term direct rate credits of $31 million and an 18-month Bermuda Convertible of $50 million. The Bank's uninsured deposits at June 30, 2024 were $948.9 million or 18.43% of total deposits. The Bank's uninsured deposits, excluding deposits secured with pledged collateral, at June 30, 2024 were $819.4 million or 15.91% of total deposits. At June 30, 2024, the Bank had approximately $1.0 billion of available liquidity including: $138.9 million in cash, $894.3 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 $11.6 million, or 2.3%, when compared to December 31, 2023, primarily due to current year earnings, offset by cash dividends paid. As of June 30, 2024, the ratio of total equity to total assets was 8.92% and the ratio of total tangible equity to total tangible assets(1) was 7.23% compared to 8.50% and 6.78% at December 31, 2023, respectively.
Review of Quarterly Financial Results
Net interest income was $42.1 million for the second quarter of 2024, compared to $41.1 million for the first quarter of 2024 and $22.5 million for the second quarter of 2023. The increase in net interest income when compared to the first quarter of 2024 was primarily due to the increase in interest and fees on loans of $1.5 million and interest and dividends on investment securities of $0.8 million, partially offset by an increase in interest expense of $1.0 million. The increase in interest expense in the second quarter of 2024 was the result of carrying short-term advances from FHLB during the quarter to offset seasonal outflows from municipal customers of $1.5 million, partially offset by lower interest expense on deposits of $0.9 million. The increase when compared to the second quarter of 2023 was primarily due to the increase in interest and fees on loans of $34.6 million, interest and dividends on investment securities of $1.5 million and interest on deposits from other banks of $0.4 million, coupled with a decrease in interest on short-term borrowings of $1.9 million. These increases were partially offset by the increase in interest on deposits of $17.7 million and interest on long-term borrowings of $1.0 million all significantly impacted by the merger in the third quarter of 2023.
The Company's net interest margin increased to 3.11% for the second quarter of 2024 from 3.08% for the first quarter of 2024 primarily due to loans and securities repricing at a greater rate than deposits. The Company's cost of funds was positively impacted during the second quarter due to a shift from interest-bearing to noninterest-bearing deposits. Average interest-bearing deposits decreased $395.0 million, or 9.9% which resulted in $0.9 million less interest expense. These interest-bearing deposits were almost entirely replaced with an increase in the average balance on noninterest-bearing deposits of $317.4 million, or 27.3%. The Company's net interest margin increased to 3.11% for the second quarter of 2024 from 2.68% for the second quarter of 2023. Comparing the second quarter of 2024 to the second quarter of 2023, the Company's interest-earning asset yields increased 102 bps to 5.39% from 4.37%, while the cost of funds repriced at a slower pace resulting in an increase of 60 bps to 2.36% from 1.76% for the same period.
The provision for credit losses was $2.1 million for the three months ended June 30, 2024. The comparable amounts were $0.4 million for the three months ended March 31, 2024, and $0.7 million for the three months ended June 30, 2023. The increase in the provision for credit losses for the second quarter of 2024 compared to the first quarter of 2024 was due to new loan growth, a small increase in the Bank's CECL model loss factors and increases in specific reserves and charge-offs in the second quarter of 2024. Coverage ratios were 1.24% and 1.23% at June 30, 2024 and March 31, 2024, respectively. The increase in the provision for credit losses when compared to the second quarter of 2023 was primarily due to an updated CECL model in the third quarter of 2023 due to the merger. Net charge-offs for the second quarter of 2024 were $0.9 million compared to net charge-offs of $0.6 million for the first quarter of 2024 and net charge offs of $50,000 for the second quarter of 2023.
At June 30, 2024 and March 31, 2024, nonperforming assets were $18.4 million, or 0.31% of total assets and $16.4 million, or 0.28% of total assets, respectively. The balance of nonperforming assets increased primarily due to an increase in assets held for sale of $1.1 million and an increase of $1.1 million in loans 90 days past due and still accruing. When comparing June 30, 2024 to June 30, 2023, nonperforming assets increased $13.7 million, primarily due to increases in nonaccrual loans of $11.4 million, an increase in repossessed marine loans and assets held for sale of $2.9 million, and an increase of $0.7 million in loans 90 days past due and still accruing almost entirely impacted by the merger in the third quarter of 2023.
Total noninterest income for the second quarter of 2024 was $8.4 million, an increase of $1.9 million from $6.6 million for the first quarter of 2024 and an increase $3.1 million from $5.3 million for the second quarter of 2023. The increase from the first quarter of 2024 was primarily due to improved mortgage banking revenue. In addition, both Wye Financial Partners, the Bank's wealth management division, and the Mid-Maryland Title Company, Inc. (the "title company") have experienced improved revenue streams due to increased activity. The increase from the second quarter of 2023 was due to higher revenue among almost all revenue line items, a direct result of the merger in the third quarter of 2023.
Total noninterest expense of $33.5 million for the second quarter of 2024 decreased $3.2 million when compared to the first quarter of 2024 expense of $36.7 million and increased $11.9 million when compared to the second quarter of 2023 expense of $21.6 million. The decrease from the first quarter of 2024 was primarily due to a credit card fraud loss of $4.3 million in the first quarter of 2024, partially offset by an increase in salaries and wages of $1.5 million. The increase from the second quarter of 2023 was primarily due to the operation of a larger branch network and employee base due to the merger, which significantly impacted almost all expense line items. In addition, despite the increased size, the Company has prudently reduced its staff by approximately 72 FTE's since the consummation of the merger. The efficiency ratio for the second quarter of 2024 when compared to the first quarter of 2024 and the second quarter of 2023 was 66.23%, 76.93% and 77.76%, respectively. Furthermore, Non-GAAP efficiency ratios(1) for the same periods were 61.05%, 62.37% and 71.75%, respectively. The net operating expense ratio,which is non-interest expense less non-interest income divided by average assets, for the second quarter 2024 was 1.73%, compared to 2.10% and 1.82% for the first quarter of 2024 and the second quarter of 2023, respectively. The Non-GAAP net operating expense ratio, which excludes core deposit intangible amortization and non-recurring activity, for the second quarter 2024 was 1.55%, compared to 1.62% and 1.64% for the first quarter of 2024 and the second quarter of 2023, respectively.
Review of Six Month Financial Results
Net interest income for the first six months of 2024 was $83.3 million, an increase of $35.1 million, or 72.9%, when compared to the first six months of 2023. The increase in net interest income was primarily due to an increase in total interest income of $72.6 million, or 101.2%, which included an increase in interest and fees on loans of $69.5 million, or 109.3%. The increase of interest and fees on loans was primarily due to the increase in the average balance of loans of $2.0 billion, or 75.9%, and an increase in net accretion income of $6.7 million due to the merger. Increases to net interest income were partially offset by increased total interest expense of $37.4 million, or 159.0%, primarily due to increases in the cost of funds and in the average balance of interest-bearing deposits of $1.6 billion, or 76.8%. All of these increases were largely due to the merger.
The Company's net interest margin increased to 3.09% for 2024 from 2.93% for 2023, primarily due to recent loan growth and repricing of earning assets, higher net accretion due to the merger, a positive shift in lower cost deposits and an overall stabilized funding base. The increase in the average balance and yields earned on average earning assets of $2.1 billion and 100 bps, respectively, were partially offset by increases in the average balance and rates paid on interest-bearing deposits of $1.6 billion and 136 bps, respectively. The average balance on noninterest-bearing deposits increased $522.7 million, or 65.4%. Net accretion income impacted the increased net interest margin by 27 bps and five bps for the six months ended June 30, 2024 and 2023, respectively. Until the balance sheet restructuring in the third quarter of 2024, the net interest margin experienced compression due to the Company's liability sensitive position, deposit rate pressures and significantly higher FHLB borrowing rates.
The provision for credit losses for the six months ended June 30, 2024 and 2023 was $2.5 million and $1.9 million, respectively. The increase in the provision for credit losses for 2024 was due to higher levels of reserves required by the Company's CECL model and higher net charge-offs. Net charge offs for the six months ended June 30, 2024 were $1.5 million compared to net recoveries of $70,000 for the six months ended June 30, 2023.
Total noninterest income for the six months ended June 30, 2024 increased $4.4 million or 41.2%, when compared to the same period in 2023. The increase in noninterest income was experienced among almost all revenue line items. These increases were attributable to the increased size and scale of the Company following the merger as well as strategic initiatives to improve business line operations and profitability.
Total noninterest expense for the six months ended June 30, 2024 increased $27.7 million, or 65.2%, when compared to the same period in 2023. Almost all noninterest expense line items increased as a result of the merger and the expanded operations of the newly combined Company. There were no merger-related expenses for the six months ended June 30, 2024, compared to $1.9 million for the six months ended June 30, 2023. The Company continues to focus on streamlining processes to unlock operational efficiencies and reduce overall noninterest expenses.
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 title work related to real estate transactions through its wholly-owned subsidiary, Mid-Maryland Title Company, Inc. and 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: 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; recent 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; changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing wars in Ukraine and the Middle East; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; 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 debt ceiling and the federal budget; the impact of recent or future changes in FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount, including any special assessments; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; the Company's evaluation of the effect of the credit card fraud on the Company's internal controls over financial reporting and its ability to remediate the existing material weakness identified in its internal control over financial reporting; the effectiveness of the Company's internal control over financial reporting and disclosure controls and procedures; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; 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 2023 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") and available at the SEC's Internet site (http://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 (Unaudited) | ||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||
(Dollars in thousands, except per share data) | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||
PROFITABILITY FOR THE PERIOD | ||||||||||||
Net interest income | $ 42,140 | $ 22,494 | 87.3 % | $ 83,275 | $ 48,158 | 72.9 % | ||||||
Provision for credit losses | 2,081 | 667 | 212.0 | 2,488 | 1,880 | 32.3 | ||||||
Noninterest income | 8,440 | 5,294 | 59.4 | 15,007 | 10,628 | 41.2 | ||||||
Noninterest expense | 33,499 | 21,608 | 55.0 | 70,197 | 42,501 | 65.2 | ||||||
Income before income taxes | 15,000 | 5,513 | 172.1 | 25,597 | 14,405 | 77.7 | ||||||
Income tax expense | 3,766 | 1,495 | 151.9 | 6,179 | 3,930 | 57.2 | ||||||
Net income | $ 11,234 | $ 4,018 | 179.6 | $ 19,418 | $ 10,475 | 85.4 | ||||||
Return on average assets | 0.77 % | 0.45 % | 32 bp | 0.67 % | 0.59 % | 8 bp | ||||||
Return on average assets excluding amortization of | 0.91 | 0.59 | 32 | 0.92 | 0.71 | 21 | ||||||
Return on average equity | 8.70 | 4.49 | 421 | 7.54 | 5.83 | 171 | ||||||
Return on average tangible equity - Non-GAAP (1), (2) | 12.85 | 7.16 | 569 | 13.08 | 8.57 | 451 | ||||||
Interest rate spread | 2.11 | 2.04 | 7 | 2.23 | 2.35 | (12) | ||||||
Net interest margin | 3.11 | 2.68 | 43 | 3.09 | 2.93 | 16 | ||||||
Efficiency ratio - GAAP | 66.23 | 77.76 | (1,153) | 71.42 | 72.30 | (88) | ||||||
Efficiency ratio - Non-GAAP (1) | 61.05 | 71.76 | (1,071) | 61.69 | 67.49 | (580) | ||||||
Non-interest income to average assets | 0.58 | 0.59 | (1) | 0.52 | 0.60 | (8) | ||||||
Non-interest expense to average assets | 2.31 | 2.41 | (10) | 2.43 | 2.41 | 2 | ||||||
Net operating expense to average assets - GAAP | 1.73 | 1.82 | (9) | 1.91 | 1.81 | 10 | ||||||
Net operating expense to average assets - Non-GAAP (1) | 1.55 | 1.64 | (9) | 1.58 | 1.65 | (7) | ||||||
PER SHARE DATA | ||||||||||||
Basic and diluted net income per common share | $ 0.34 | $ 0.20 | 69.1 % | $ 0.58 | $ 0.53 | 9.9 % | ||||||
Dividends paid per common share | $ 0.12 | $ 0.12 | — % | $ 0.24 | $ 0.24 | (50.0) % | ||||||
Book value per common share at period end | 15.74 | 18.24 | (13.7) | |||||||||
Tangible book value per common share at period end - Non-GAAP (1) | 12.54 | 14.83 | (15.4) | |||||||||
Market value at period end | 11.45 | 11.56 | (1.0) | |||||||||
Market range: | ||||||||||||
High | 11.90 | 14.45 | (17.6) | 14.38 | 18.15 | (20.8) | ||||||
Low | 10.06 | 10.65 | (5.5) | 10.06 | 10.65 | (5.5) | ||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||
Loans | $ 4,706,510 | $ 2,709,944 | 73.7 % | $ 4,680,846 | $ 2,661,066 | 75.9 % | ||||||
Investment securities | 706,079 | 645,842 | 9.3 | 680,701 | 649,994 | 4.7 | ||||||
Earning assets | 5,459,961 | 3,369,183 | 62.1 | 5,423,871 | 3,324,682 | 63.1 | ||||||
Assets | 5,839,328 | 3,596,311 | 62.4 | 5,807,076 | 3,551,573 | 63.5 | ||||||
Deposits | 5,064,974 | 2,908,662 | 74.1 | 5,103,815 | 2,938,389 | 73.7 | ||||||
Short-term and Long Term FHLB advances | 143,769 | 261,797 | (45.1) | 73,885 | 188,293 | (60.8) | ||||||
Subordinated Debt & TRUPS | 72,680 | 43,185 | 68.3 | 72,549 | 43,147 | 68.1 | ||||||
Stockholders' equity | 519,478 | 363,225 | 43.0 | 517,727 | 362,205 | 42.9 | ||||||
___________________________________ | |
(1) | See the reconciliation table that begins on page 24. |
(2) | This ratio excludes merger related expenses (Non-GAAP) on page 24. |
Shore Bancshares, Inc. | ||||||||||||
Financial Highlights (Unaudited) - Continued | ||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||
(Dollars in thousands, except per share data) | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||
CREDIT QUALITY DATA | ||||||||||||
Net charge-offs | $ 886 | $ 50 | 1,672.0 % | $ 1,451 | $ 70 | 1972.9 % | ||||||
Nonaccrual loans | $ 14,837 | $ 3,481 | 326.2 % | |||||||||
Loans 90 days past due and still accruing | 414 | 1,050 | (60.6) | |||||||||
Other real estate owned and Repossessed Property | 3,126 | 179 | 1,646.4 | |||||||||
Total nonperforming assets | 18,377 | 4,710 | 290.2 | |||||||||
Borrowers experiencing financial difficulty ("BEFDs") | — | — | — | |||||||||
Total nonperforming assets and BEFDs modifications | $ 18,377 | $ 4,710 | 290.2 | |||||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||
Period-end equity to assets | 8.92 % | 9.97 % | (105) bp | |||||||||
Period-end tangible equity to tangible assets - Non-GAAP (1) | 7.23 | 8.26 | (103) | |||||||||
Annualized net charge-offs to average loans | 0.08 % | 0.01 % | 7 bp | 0.06 % | 0.01 % | 5 bp | ||||||
Allowance for credit losses as a percent of: | ||||||||||||
Period-end loans | 1.24 % | 1.05 % | 19 bp | |||||||||
Nonaccrual loans | 394.14 | 833.50 | (43,936) | |||||||||
Nonperforming assets | 318.21 | 616.01 | (29,780) | |||||||||
Accruing BEFDs modifications | — | — | — | |||||||||
Nonperforming assets and accruing BEFDs | 318.21 | 616.01 | (29,780) | |||||||||
As a percent of total loans: | ||||||||||||
Nonaccrual loans | 0.32 % | 0.13 % | 19 bp | |||||||||
As a percent of total loans, other real estate owned, and | ||||||||||||
Nonperforming assets | 0.39 % | 0.17 % | 22 bp | |||||||||
As a percent of total assets: | ||||||||||||
Nonaccrual loans | 0.25 % | 0.10 % | 15 bp | |||||||||
Nonperforming assets | 0.31 % | 0.13 % | 18 | |||||||||
___________________________________ | |
(1) | See the reconciliation table that begins on page 24. |
(2) | This ratio excludes merger related expenses (Non-GAAP) on page 24. |
Shore Bancshares, Inc. | |||||||||
Consolidated Balance Sheets (Unaudited) | |||||||||
June 30, 2024 | June 30, 2024 | ||||||||
compared to | compared to | ||||||||
(In thousands, except per share data) | June 30, 2024 | December 31, 2023 | June 30, 2023 | December 31, 2023 | June 30, 2023 | ||||
ASSETS | |||||||||
Cash and due from banks | $ 50,090 | $ 63,172 | $ 35,423 | (20.7) % | 41.4 % | ||||
Interest-bearing deposits with other banks | 88,793 | 309,241 | 10,404 | (71.3) | 753.5 | ||||
Cash and cash equivalents | 138,883 | 372,413 | 45,827 | (62.7) | 203.1 | ||||
Investment securities available for sale (at fair value) | 131,594 | 110,521 | 78,069 | 19.1 | 68.6 | ||||
Investment securities held to maturity (net of allowance for credit | 499,431 | 513,188 | 536,970 | (2.7) | (7.0) | ||||
Equity securities, at fair value | 5,699 | 5,703 | 1,245 | (0.1) | 357.8 | ||||
Restricted securities | 21,725 | 17,900 | 21,208 | 21.4 | 2.4 | ||||
Loans held for sale, at fair value | 27,829 | 8,782 | 6,845 | 216.9 | 306.6 | ||||
Loans held for investment | 4,705,737 | 4,641,010 | 2,753,223 | 1.4 | 70.9 | ||||
Less: allowance for credit losses | (58,478) | (57,351) | (29,014) | (2.0) | (101.6) | ||||
Loans, net | 4,647,259 | 4,583,659 | 2,724,209 | 1.4 | 70.6 | ||||
Premises and equipment, net | 82,176 | 82,386 | 51,036 | (0.3) | 61.0 | ||||
Goodwill | 63,266 | 63,266 | 63,266 | — | — | ||||
Other intangible assets, net | 42,945 | 48,090 | 4,671 | (10.7) | 819.4 | ||||
Other real estate owned, net | 179 | 179 | 179 | — | — | ||||
Repossessed property, net | 1,560 | — | — | — | — | ||||
Assets held for sale | 1,387 | — | — | — | |||||
Mortgage servicing rights, at fair value | 5,995 | 5,926 | 5,466 | 1.2 | 9.7 | ||||
Right of use assets, net | 11,762 | 12,487 | 9,077 | (5.8) | 29.6 | ||||
Cash surrender value on life insurance | 102,969 | 101,704 | 60,150 | 1.2 | 71.2 | ||||
Accrued interest receivable | 19,641 | 19,217 | 8,778 | 2.2 | 123.8 | ||||
Deferred income taxes | 36,078 | 40,707 | 10,879 | (11.4) | 231.6 | ||||
Other assets | 23,639 | 24,790 | 13,756 | (4.6) | 71.8 | ||||
Total assets | $ 5,864,017 | $ 6,010,918 | $ 3,641,631 | (2.4) | 61.0 | ||||
LIABILITIES | |||||||||
Noninterest-bearing deposits | $ 1,587,252 | $ 1,258,037 | $ 778,963 | 26.2 % | 103.8 % | ||||
Interest-bearing deposits | 3,561,633 | 4,128,083 | 2,158,563 | (13.7) | 65.0 | ||||
Total deposits | 5,148,885 | 5,386,120 | 2,937,526 | (4.4) | 75.3 | ||||
Advances from FHLB - short-term | 31,000 | — | 276,000 | — | (88.8) | ||||
Advances from FHLB - long-term | 50,000 | — | — | — | — | ||||
Guaranteed preferred beneficial interest in junior subordinated | 29,316 | 29,158 | 18,492 | 0.5 | 58.5 | ||||
Subordinated debt | 43,504 | 43,139 | 24,735 | 0.8 | 75.9 | ||||
Total borrowings | 153,820 | 72,297 | 319,227 | 112.8 | (51.8) | ||||
Lease liabilities | 12,189 | 12,857 | 9,392 | (5.2) | 29.8 | ||||
Accrued expenses and other liabilities | 26,340 | 28,509 | 12,346 | (7.6) | 113.3 | ||||
Total liabilities | $ 5,341,234 | $ 5,499,783 | $ 3,278,491 | (2.9) | 62.9 | ||||
STOCKHOLDERS' EQUITY | |||||||||
Common stock, par value $0.01; authorized 50,000,000 shares | $ 333 | $ 332 | $ 199 | 0.3 | 67.3 | ||||
Additional paid in capital | 356,994 | 356,007 | 202,008 | 0.3 | 76.7 | ||||
Retained earnings | 173,716 | 162,290 | 169,494 | 7.0 | 2.5 | ||||
Accumulated other comprehensive loss | (8,260) | (7,494) | (8,561) | (10.2) | 3.5 | ||||
Total stockholders' equity | 522,783 | 511,135 | 363,140 | 2.3 | 44.0 | ||||
Total liabilities and stockholders' equity | $ 5,864,017 | $ 6,010,918 | $ 3,641,631 | (2.4) | 61.0 | ||||
Period-end common shares outstanding | $ 33,215 | $ 33,162 | $ 19,907 | 0.2 | 66.8 | ||||
Book value per common share | $ 15.74 | $ 15.41 | $ 18.24 | 2.1 | (13.7) | ||||
Shore Bancshares, Inc. | ||||||||||||
Consolidated Statements of Income (Unaudited) | ||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||
(In thousands, except per share data) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||
INTEREST INCOME | ||||||||||||
Interest and fees on loans | $ 67,292 | $ 32,729 | 105.6 % | $ 133,045 | $ 63,557 | 109.3 % | ||||||
Interest on investment securities: | ||||||||||||
Taxable | 5,230 | 3,729 | 40.3 | 9,650 | 7,793 | 23.8 | ||||||
Tax-exempt | 6 | 5 | 20.0 | 12 | 12 | — | ||||||
Interest on deposits with other banks | 578 | 170 | 240.0 | 1,538 | 333 | 361.9 | ||||||
Total interest income | $ 73,106 | $ 36,633 | 99.6 | $ 144,245 | $ 71,695 | 101.2 | ||||||
INTEREST EXPENSE | ||||||||||||
Interest on deposits | $ 27,585 | $ 9,914 | 178.2 | $ 56,081 | $ 17,195 | 226.1 | ||||||
Interest on short-term borrowings | 1,584 | 3,449 | (54.1) | 1,641 | 4,810 | (65.9) | ||||||
Interest on long-term borrowings | 1,797 | 776 | 131.6 | 3,248 | 1,532 | 112.0 | ||||||
Total interest expense | $ 30,966 | $ 14,139 | 119.0 | $ 60,970 | $ 23,537 | 159.0 | ||||||
NET INTEREST INCOME | $ 42,140 | $ 22,494 | 87.3 | $ 83,275 | $ 48,158 | 72.9 | ||||||
Provision for credit losses | 2,081 | 667 | 212.0 | 2,488 | 1,880 | 32.3 | ||||||
NET INTEREST INCOME AFTER PROVISION FOR | $ 40,059 | $ 21,827 | 83.5 | $ 80,787 | $ 46,278 | 74.6 | ||||||
NONINTEREST INCOME | ||||||||||||
Service charges on deposit accounts | $ 1,493 | $ 1,264 | 18.1 | $ 3,001 | $ 2,477 | 21.2 | ||||||
Trust and investment fee income | 896 | 399 | 124.6 | 1,630 | 831 | 96.1 | ||||||
Interchange credits | 1,717 | 1,311 | 31.0 | 3,304 | 2,523 | 31.0 | ||||||
Mortgage-banking revenue | 1,983 | 1,054 | 88.1 | 2,783 | 2,031 | 37.0 | ||||||
Title Company revenue | 165 | 186 | (11.3) | 243 | 323 | (24.8) | ||||||
Other noninterest income | 2,186 | 1,080 | 102.4 | 4,046 | 2,443 | 65.6 | ||||||
Total noninterest income | $ 8,440 | $ 5,294 | 59.4 | $ 15,007 | $ 10,628 | 41.2 | ||||||
Shore Bancshares, Inc. | ||||||||||||
Consolidated Statements of Income (Unaudited) - Continued | ||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||
(In thousands, except per share data) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||
NONINTEREST EXPENSE | ||||||||||||
Salaries and wages | $ 13,307 | $ 8,955 | 48.6 % | $ 25,158 | $ 17,639 | 42.6 % | ||||||
Employee benefits | 3,593 | 2,440 | 47.3 | 7,689 | 5,361 | 43.4 | ||||||
Occupancy expense | 2,432 | 1,599 | 52.1 | 4,848 | 3,218 | 50.7 | ||||||
Furniture and equipment expense | 900 | 477 | 88.7 | 1,804 | 1,011 | 78.4 | ||||||
Data processing | 2,978 | 1,739 | 71.2 | 5,845 | 3,537 | 65.3 | ||||||
Directors' fees | 359 | 185 | 94.1 | 654 | 435 | 50.3 | ||||||
Amortization of intangible assets | 2,569 | 435 | 490.6 | 5,145 | 876 | 487.3 | ||||||
FDIC insurance premium expense | 1,089 | 758 | 43.7 | 2,240 | 1,129 | 98.4 | ||||||
Other real estate owned, net | — | — | — | — | (1) | 100.0 | ||||||
Legal and professional fees | 1,354 | 959 | 41.2 | 2,954 | 1,709 | 72.8 | ||||||
Fraud losses (1) | 62 | 47 | 31.9 | 4,564 | 114 | 3903.5 | ||||||
Merger related expenses | — | 1,197 | (100.0) | — | 1,888 | (100.0) | ||||||
Other noninterest expenses | 4,856 | 2,817 | 72.4 | 9,296 | 5,585 | 66.4 | ||||||
Total noninterest expense | $ 33,499 | $ 21,608 | 55.0 | 70,197 | 42,501 | 65.2 | ||||||
Income before income taxes | $ 15,000 | $ 5,513 | 172.1 | 25,597 | 14,405 | 77.7 | ||||||
Income tax expense | 3,766 | 1,495 | 151.9 | 6,179 | 3,930 | 57.2 | ||||||
NET INCOME | $ 11,234 | $ 4,018 | 179.6 | $ 19,418 | $ 10,475 | 85.4 | ||||||
Weighted average shares outstanding - basic and diluted | 33,215 | 19,903 | 66.9 | 33,337 | 19,895 | 67.6 | ||||||
Basic and diluted net income per common share | $ 0.34 | $ 0.20 | 69.1 | $ 0.58 | $ 0.53 | 9.9 | ||||||
Dividends paid per common share | $ 0.12 | $ 0.12 | — | $ 0.12 | $ 0.24 | (50.0) | ||||||
____________________________________ |
(1) Fraud losses includes $4.3 million of credit card fraud losses for the six months ended June 30, 2024. |
Shore Bancshares, Inc. | ||||||||||||||||||||||||
Consolidated Average Balance Sheets (Unaudited) | ||||||||||||||||||||||||
For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||
June 30, 2024 | June 30, 2023 | June 30, 2024 | March 31, 2024 | |||||||||||||||||||||
(Dollars in thousands) | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | ||||||||||||
Earning assets | ||||||||||||||||||||||||
Loans (1), (2), (3) | ||||||||||||||||||||||||
Consumer real estate | $ 1,388,168 | $ 19,278 | 5.59 % | $ 946,545 | $ 10,876 | 4.61 % | $ 1,388,168 | $ 19,278 | 5.59 % | $ 1,361,636 | $ 18,492 | 5.46 % | ||||||||||||
Commercial real estate | 2,738,693 | 39,370 | 5.78 | 1,292,406 | 15,620 | 4.85 | 2,738,693 | 39,370 | 5.78 | 2,722,600 | 38,604 | 5.70 | ||||||||||||
Commercial | 216,809 | 3,926 | 7.28 | 137,554 | 2,177 | 6.35 | 216,809 | 3,926 | 7.28 | 219,884 | 4,097 | 7.49 | ||||||||||||
Consumer | 327,781 | 4,265 | 5.23 | 323,798 | 3,983 | 4.93 | 327,781 | 4,265 | 5.23 | 329,118 | 4,272 | 5.22 | ||||||||||||
State and political | 2,331 | 30 | 5.18 | 900 | 8 | 3.57 | 2,331 | 30 | 5.18 | 1,473 | 16 | 4.37 | ||||||||||||
Credit Cards | 8,378 | 201 | 9.65 | — | — | — | 8,378 | 201 | 9.65 | 7,457 | 167 | 9.01 | ||||||||||||
Other | 24,350 | 302 | 4.99 | 8,741 | 117 | 5.37 | 24,350 | 302 | 4.99 | 13,015 | 183 | 5.66 | ||||||||||||
Total Loans | 4,706,510 | 67,372 | 5.76 | 2,709,944 | 32,781 | 4.85 | 4,706,510 | 67,372 | 5.76 | 4,655,183 | 65,831 | 5.69 | ||||||||||||
Investment securities | ||||||||||||||||||||||||
Taxable | 705,421 | 5,230 | 2.97 | 645,178 | 3,729 | 2.31 | 705,421 | 5,230 | 2.97 | 654,663 | 4,419 | 2.70 | ||||||||||||
Tax-exempt (1) | 658 | 8 | 4.86 | 664 | 9 | 5.42 | 658 | 8 | 4.86 | 660 | 8 | 4.85 | ||||||||||||
Interest-bearing deposits | 47,372 | 578 | 4.91 | 13,397 | 170 | 5.09 | 47,372 | 578 | 4.91 | 77,276 | 960 | 5.00 | ||||||||||||
Total earning assets | 5,459,961 | 73,188 | 5.39 | 3,369,183 | 36,689 | 4.37 | 5,459,961 | 73,188 | 5.39 | 5,387,782 | 71,218 | 5.32 | ||||||||||||
Cash and due from banks | 45,141 | 29,923 | 45,141 | 49,499 | ||||||||||||||||||||
Other assets | 391,854 | 225,935 | 391,854 | 395,023 | ||||||||||||||||||||
Allowance for credit losses | (57,628) | (28,730) | (57,628) | (57,480) | ||||||||||||||||||||
Total assets | $ 5,839,328 | $ 3,596,311 | $ 5,839,328 | $ 5,774,824 | ||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||
Demand deposits | $ 711,138 | $ 5,550 | 3.14 % | $ 685,674 | $ 3,913 | 2.29 % | $ 711,138 | $ 5,550 | 3.14 % | $ 1,110,524 | $ 6,362 | 2.30 % | ||||||||||||
Money market and savings deposits | 1,690,157 | 10,291 | 2.45 | 907,068 | 2,526 | 1.12 | 1,690,157 | 10,291 | 2.45 | 1,669,074 | 10,160 | 2.45 | ||||||||||||
Brokered deposits | 7,753 | 94 | 4.88 | — | — | — | 7,753 | 94 | 4.88 | 20,465 | 251 | 4.93 | ||||||||||||
Certificates of deposit $100,000 or more | 758,211 | 7,581 | 4.02 | 312,367 | 2,337 | 3.00 | 758,211 | 7,581 | 4.02 | 762,210 | 7,675 | 4.05 | ||||||||||||
Other time deposits | 417,331 | 4,069 | 3.92 | 225,495 | 1,139 | 2.03 | 417,331 | 4,069 | 3.92 | 417,362 | 4,049 | 3.90 | ||||||||||||
Interest-bearing deposits (4) | 3,584,590 | 27,585 | 3.10 | 2,130,604 | 9,915 | 1.87 | 3,584,590 | 27,585 | 3.10 | 3,979,635 | 28,497 | 2.88 | ||||||||||||
Advances from FHLB - short-term | 113,549 | 1,584 | 5.61 | 261,797 | 3,449 | 5.28 | 113,549 | 1,584 | 5.61 | 4,000 | 56 | 5.63 | ||||||||||||
Advances from FHLB - long-term | 30,220 | 346 | 4.60 | — | — | — | 30,220 | 346 | 4.60 | — | — | — | ||||||||||||
Subordinated debt and | 72,680 | 1,451 | 8.03 | 43,185 | 776 | 7.21 | 72,680 | 1,451 | 8.03 | 72,418 | 1,451 | 8.06 | ||||||||||||
Total interest-bearing liabilities | 3,801,039 | 30,966 | 3.28 | 2,435,586 | 14,140 | 2.33 | 3,801,039 | 30,966 | 3.28 | 4,056,053 | 30,004 | 2.98 | ||||||||||||
Noninterest-bearing deposits | 1,480,384 | 778,058 | 1,480,384 | 1,163,023 | ||||||||||||||||||||
Accrued expenses and other liabilities | 38,427 | 19,442 | 38,427 | 39,772 | ||||||||||||||||||||
Stockholders' equity | 519,478 | 363,225 | 519,478 | 515,976 | ||||||||||||||||||||
Total liabilities and | $ 5,839,328 | $ 3,596,311 | $ 5,839,328 | $ 5,774,824 | ||||||||||||||||||||
Net interest income | $ 42,222 | $ 22,549 | $ 42,222 | $ 41,214 | ||||||||||||||||||||
Net interest spread | 2.11 % | 2.04 % | 2.11 % | 2.34 % | ||||||||||||||||||||
Net interest margin | 3.11 % | 2.68 % | 3.11 % | 3.08 % | ||||||||||||||||||||
Cost of Funds | 2.36 % | 1.76 % | 2.36 % | 2.31 % | ||||||||||||||||||||
Cost of Deposits | 2.19 % | 1.37 % | 2.19 % | 2.23 % | ||||||||||||||||||||
Cost of Debt | 6.28 % | 5.56 % | 6.28 % | 7.93 % | ||||||||||||||||||||
____________________________________ | |
(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 $4.5 million, $0.3 million and $4.2 million of accretion interest on loans for the three months ended June 30, 2024 and 2023, and March 31, 2024, respectively. |
(4) | Interest expense on deposits and borrowing includes amortization of deposit discount and amortization of borrowing fair value adjustments. There were $(0.4) million, $41,000 and $(0.4) million of amortization of deposits premium, and $(0.2) million, $(47,000), and $(0.2) million of amortization of borrowing fair value adjustments for the three months ended June 30, 2024 and 2023, and March 31, 2024, respectively. |
Shore Bancshares, Inc. | ||||||||||||
Consolidated Average Balance Sheets (Unaudited) | ||||||||||||
For the Six Months Ended June 30, | ||||||||||||
2024 | 2023 | |||||||||||
(Dollars in thousands) | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | ||||||
Earning assets | ||||||||||||
Loans (1), (2), (3) | ||||||||||||
Consumer real estate | $ 1,374,902 | $ 37,770 | 5.52 % | $ 914,351 | $ 21,383 | 4.72 % | ||||||
Commercial real estate | 2,730,646 | 77,974 | 5.74 | 1,286,199 | 30,793 | 4.83 | ||||||
Commercial | 218,346 | 8,024 | 7.39 | 140,161 | 3,997 | 5.75 | ||||||
Consumer | 328,450 | 8,537 | 5.23 | 310,736 | 7,257 | 4.71 | ||||||
State and political | 1,902 | 46 | 4.86 | 939 | 17 | 3.65 | ||||||
Credit Cards | 7,918 | 368 | 9.35 | — | — | — | ||||||
Other | 18,682 | 484 | 5.21 | 8,680 | 199 | 4.62 | ||||||
Total Loans | 4,680,846 | 133,203 | 5.72 | 2,661,066 | 63,646 | 4.82 | ||||||
Investment securities | ||||||||||||
Taxable | 680,042 | 9,650 | 2.84 | 649,329 | 7,793 | 2.40 | ||||||
Tax-exempt (1) | 659 | 15 | 4.55 | 665 | 15 | 4.51 | ||||||
Interest-bearing deposits | 62,324 | 1,538 | 4.96 | 13,622 | 333 | 4.93 | ||||||
Total earning assets | 5,423,871 | 144,406 | 5.35 | 3,324,682 | 71,787 | 4.35 | ||||||
Cash and due from banks | 47,320 | 29,266 | ||||||||||
Other assets | 393,439 | 226,989 | ||||||||||
Allowance for credit losses | (57,554) | (29,364) | ||||||||||
Total assets | $ 5,807,076 | $ 3,551,573 | ||||||||||
Interest-bearing liabilities | ||||||||||||
Demand deposits | $ 910,831 | $ 11,911 | 2.63 % | $ 690,258 | $ 7,149 | 2.09 % | ||||||
Money market and savings deposits | 1,679,615 | 20,451 | 2.45 | 955,541 | 4,899 | 1.03 | ||||||
Brokered deposits | 14,107 | 345 | 4.92 | — | — | — | ||||||
Certificates of deposit $100,000 or more | 760,211 | 15,256 | 4.04 | 277,096 | 3,413 | 2.48 | ||||||
Other time deposits | 417,346 | 8,118 | 3.91 | 216,500 | 1,734 | 1.62 | ||||||
Interest-bearing deposits (4) | 3,782,110 | 56,081 | 2.98 | 2,139,395 | 17,195 | 1.62 | ||||||
Advances from FHLB - short-term | 58,775 | 1,641 | 5.61 | 188,293 | 4,810 | 5.15 | ||||||
Advances from FHLB - long-term | 15,110 | 346 | 4.60 | — | — | — | ||||||
Subordinated debt and Guaranteed preferred beneficial interest in junior | 72,549 | 2,902 | 8.04 | 43,147 | 1,532 | 7.16 | ||||||
Total interest-bearing liabilities | 3,928,544 | 60,970 | 3.12 | 2,370,835 | 23,537 | 2.00 | ||||||
Noninterest-bearing deposits | 1,321,705 | 798,994 | ||||||||||
Accrued expenses and other liabilities | 39,100 | 19,539 | ||||||||||
Stockholders' equity | 517,727 | 362,205 | ||||||||||
Total liabilities and stockholders' equity | $ 5,807,076 | $ 3,551,573 | ||||||||||
Net interest income | $ 83,436 | $ 48,250 | ||||||||||
Net interest spread | 2.23 % | 2.35 % | ||||||||||
Net interest margin | 3.09 % | 2.93 % | ||||||||||
Cost of Funds | 2.34 % | 1.50 % | ||||||||||
Cost of Deposits | 2.21 % | 1.18 % | ||||||||||
Cost of Debt | 6.71 % | 5.53 % | ||||||||||
____________________________________ | |
(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 $8.7 million and $0.7 million of accretion interest on loans for the six months ended June 30, 2024 and 2023, respectively. |
(4) | Interest expense on deposits and borrowing includes amortization of deposit premiums and amortization of borrowing fair value adjustment. There were $(0.8) million of amortization of deposit discounts and $0.2 million of amortization of deposit premium, and $(0.5) million and $(0.1) million of amortization of borrowing fair value adjustment for the six months ended June 30, 2024 and 2023, respectively. |
Shore Bancshares, Inc. | ||||||||||||||
Financial Highlights By Quarter (Unaudited) | ||||||||||||||
2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 6/30/2024 | 6/30/2024 | ||||||||
2024 | 2024 | 2023 | 2023 | 2023 | compared to | compared to | ||||||||
(Dollars in thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2024 | Q2 2023 | |||||||
PROFITABILITY FOR THE PERIOD | ||||||||||||||
Taxable-equivalent net interest income | $ 42,222 | $ 41,214 | $ 41,606 | $ 45,702 | $ 22,545 | 2.5 % | 87.3 % | |||||||
Less: Taxable-equivalent adjustment | 82 | 79 | 81 | 80 | 51 | 3.8 | 60.8 | |||||||
Net interest income | 42,140 | 41,135 | 41,525 | 45,622 | 22,494 | 2.4 | 87.3 | |||||||
Provision for credit losses | 2,081 | 407 | 896 | 28,176 | 667 | 411.3 | 212.0 | |||||||
Noninterest income | 8,440 | 6,567 | 7,548 | 14,984 | 5,294 | 28.5 | 59.4 | |||||||
Noninterest expense | 33,499 | 36,698 | 33,670 | 47,158 | 21,608 | (8.7) | 55.0 | |||||||
Income/(loss) before income taxes | 15,000 | 10,597 | 14,507 | (14,728) | 5,513 | 41.6 | 172.1 | |||||||
Income tax expense/ (benefit) | 3,766 | 2,413 | 4,017 | (4,991) | 1,495 | 56.1 | 151.9 | |||||||
Net income/ (loss) | $ 11,234 | $ 8,184 | $ 10,490 | $ (9,737) | $ 4,018 | 37.3 | 179.6 | |||||||
Return on average assets | 0.77 % | 0.57 % | 0.72 % | (0.67) % | 0.45 % | 20 bp | 32 bp | |||||||
Return on average assets excluding amortization of intangibles, fraud losses and merger related | 0.91 | 0.94 | 0.88 | 0.01 | 0.59 | (3) | 32 | |||||||
Return on average equity | 8.70 | 6.38 | 8.21 | (7.25) | 4.49 | 232 | 421 | |||||||
Return on average tangible equity - Non-GAAP (1), (2) | 12.85 | 13.39 | 12.88 | 1.74 | 7.16 | (54) | 569 | |||||||
Net interest margin | 3.11 | 3.08 | 3.09 | 3.35 | 2.68 | 3 | 43 | |||||||
Efficiency ratio - GAAP | 66.23 | 76.93 | 68.61 | 77.81 | 77.76 | (1,070) | (1,153) | |||||||
Efficiency ratio - Non-GAAP (1) | 61.05 | 62.37 | 61.99 | 47.19 | 71.75 | (132) | (1,070) | |||||||
PER SHARE DATA | ||||||||||||||
Basic and diluted net income/(loss) per common share | $ 0.34 | $ 0.25 | $ 0.32 | $ (0.29) | $ 0.20 | 35.3 % | 69.1 % | |||||||
Dividends paid per common share | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 | — | — | |||||||
Book value per common share at period end | 15.74 | 15.51 | 15.41 | 15.14 | 18.24 | 1.5 | (13.7) | |||||||
Tangible book value per common share at period end - Non-GAAP (1) | 12.54 | 12.24 | 12.06 | 11.70 | 14.83 | 2.5 | (15.4) | |||||||
Market value at period end | 11.45 | 11.50 | 14.25 | 10.52 | 11.56 | (0.4) | (1.0) | |||||||
Market range: | ||||||||||||||
High | 11.90 | 14.38 | 14.51 | 13.37 | 14.45 | (17.3) | (17.7) | |||||||
Low | 10.06 | 10.56 | 9.66 | 10.27 | 10.65 | (4.7) | (5.5) | |||||||
____________________________________ | |
(1) | See the reconciliation table (Non-GAAP) that begins on page 24. |
(2) | This ratio excludes merger related expenses (Non-GAAP) on page 24. |
Shore Bancshares, Inc. | ||||||||||||||
Financial Highlights By Quarter (Unaudited) - Continued | ||||||||||||||
2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 6/30/2024 | 6/30/2024 | ||||||||
2024 | 2024 | 2023 | 2023 | 2023 | compared to | compared to | ||||||||
(Dollars in thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2024 | Q2 2023 | |||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||
Loans | $ 4,706,510 | $ 4,655,183 | $ 4,639,467 | $ 4,562,748 | $ 2,709,944 | 1.10 % | 73.68 % | |||||||
Investment securities | 706,079 | 655,323 | 619,920 | 778,744 | 645,842 | 7.75 | 9.33 | |||||||
Earning assets | 5,459,961 | 5,387,782 | 5,339,833 | 5,404,572 | 3,369,183 | 1.34 | 62.06 | |||||||
Assets | 5,839,328 | 5,774,824 | 5,745,440 | 5,769,312 | 3,596,311 | 1.12 | 62.37 | |||||||
Deposits | 5,064,974 | 5,142,658 | 5,136,818 | 5,066,886 | 2,908,662 | (1.51) | 74.13 | |||||||
Short-term and Long Term FHLB advances | 143,769 | 4,000 | 1,141 | 70,348 | 261,797 | 3494.23 | (45.08) | |||||||
Subordinated Debt & TRUPS | 72,680 | 72,418 | 72,155 | 71,907 | 43,185 | 0.36 | 68.30 | |||||||
Stockholders' equity | 519,478 | 515,976 | 507,040 | 533,114 | 363,225 | 0.68 | 43.02 | |||||||
CREDIT QUALITY DATA | ||||||||||||||
Net charge offs | $ 886 | $ 565 | $ 500 | $ 1,449 | $ 50 | 56.81 % | 1,672.00 % | |||||||
Nonaccrual loans | $ 14,837 | $ 12,776 | $ 12,784 | $ 8,982 | $ 3,481 | 16.13 % | 326.23 % | |||||||
Loans 90 days past due and still accruing | 414 | 1,560 | 738 | 2,149 | 1,065 | (73.46) | (61.13) | |||||||
Other real estate owned and repossessed property | 3,126 | 2,024 | 179 | 179 | 179 | 54.45 | 1,646.37 | |||||||
Total nonperforming assets | $ 18,377 | $ 16,360 | $ 13,701 | $ 11,310 | $ 4,725 | 12.33 | 288.93 | |||||||
Shore Bancshares, Inc. | ||||||||||||||
Financial Highlights By Quarter (Unaudited) - Continued | ||||||||||||||
2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | 6/30/2024 | 6/30/2024 | ||||||||
2024 | 2024 | 2023 | 2023 | 2023 | compared to | compared to | ||||||||
(Dollars in thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2024 | Q2 2023 | |||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||||
Period-end equity to assets | 8.92 % | 8.84 % | 8.50 % | 8.79 % | 9.97 % | 8 bp | (105) bp | |||||||
Period-end tangible equity to tangible assets - Non-GAAP (1) | 7.23 | 7.11 | 6.78 | 6.93 | 8.26 | 12 | (103) | |||||||
Annualized net charge-offs to average loans | 0.08 % | 0.05 % | 0.04 % | 0.13 % | 0.01 % | 3 bp | 7 bp | |||||||
Allowance for credit losses as a percent of: | ||||||||||||||
Period-end loans (3) | 1.24 % | 1.23 % | 1.24 % | 1.24 % | 1.05 % | 1 bp | 19 bp | |||||||
Period-end loans (4) | 1.24 | 1.23 | 1.24 | 1.24 | 1.05 | 1 | 19 | |||||||
Nonaccrual loans | 394.14 | 448.78 | 448.62 | 635.17 | 833.50 | (5,464) | (43,936) | |||||||
Nonperforming assets | 318.21 | 350.46 | 418.59 | 504.43 | 614.05 | (3,225) | (29,584) | |||||||
As a percent of total loans: | ||||||||||||||
Nonaccrual loans | 0.32 % | 0.27 % | 0.28 % | 0.19 % | 0.13 % | 5 bp | 19 bp | |||||||
As a percent of total loans, other real estate owned, and repossessed property | ||||||||||||||
Nonperforming assets | 0.39 % | 0.35 % | 0.30 % | 0.24 % | 0.17 % | 4 bp | 22 bp | |||||||
As a percent of total assets: | ||||||||||||||
Nonaccrual loans | 0.25 % | 0.22 % | 0.21 % | 0.16 % | 0.10 % | 3 bp | 15 bp | |||||||
Nonperforming assets | 0.31 | 0.28 | 0.23 | 0.20 | 0.13 | 3 | 18 | |||||||
____________________________________ | |
(1) | See the reconciliation table (Non-GAAP) that begins on page 24. |
(2) | This ratio excludes merger related expenses (Non-GAAP) on page 24. |
(3) | Includes all loans held for investment, including PPP loan balances for all periods shown. |
(4) | For 2023, this ratio excludes only PPP loans given the Company's adoption of the CECL standard. |
Shore Bancshares, Inc. | ||||||||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||||||
June 30, 2024 | June 30, 2024 | |||||||||||||
compared to | compared to | |||||||||||||
(In thousands, except per share data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | December 31, 2023 | June 30, 2023 | |||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ 50,090 | $ 43,079 | $ 63,172 | $ 68,097 | $ 35,423 | (20.7) % | 41.4 % | |||||||
Interest-bearing deposits with other banks | 88,793 | 71,481 | 309,241 | 40,612 | 10,404 | (71.3) | 753.5 | |||||||
Cash and cash equivalents | 138,883 | 114,560 | 372,413 | 108,709 | 45,827 | (62.7) | 203.1 | |||||||
Investment securities available for sale (at fair value) | 131,594 | 179,496 | 110,521 | 79,143 | 78,069 | 19.1 | 68.6 | |||||||
Investment securities held to maturity (net of allowance for credit losses of | 499,431 | 503,822 | 513,188 | 523,051 | 536,970 | (2.7) | (7.0) | |||||||
Equity securities, at fair value | 5,699 | 5,681 | 5,703 | 5,434 | 1,245 | (0.1) | 357.8 | |||||||
Restricted securities | 21,725 | 17,863 | 17,900 | 13,361 | 21,208 | 21.4 | 2.4 | |||||||
Loans held for sale, at fair value | 27,829 | 13,767 | 8,782 | 14,725 | 6,845 | 216.9 | 306.6 | |||||||
Loans held for investment | 4,705,737 | 4,648,725 | 4,641,010 | 4,617,719 | 2,753,223 | 1.4 | 70.9 | |||||||
Less: allowance for credit losses | (58,478) | (57,336) | (57,351) | (57,051) | (29,014) | (2.0) | (101.6) | |||||||
Loans, net | 4,647,259 | 4,591,389 | 4,583,659 | 4,560,668 | 2,724,209 | 1.4 | 70.6 | |||||||
Premises and equipment, net | 82,176 | 83,084 | 82,386 | 81,149 | 51,036 | (0.3) | 61.0 | |||||||
Goodwill | 63,266 | 63,266 | 63,266 | 63,266 | 63,266 | — | — | |||||||
Other intangible assets, net | 42,945 | 45,515 | 48,090 | 50,685 | 4,671 | (10.7) | 819.4 | |||||||
Other real estate owned, net | 179 | 179 | 179 | 179 | 179 | — | — | |||||||
Repossessed property, net | 1,560 | 1,845 | — | — | — | — | — | |||||||
Assets held for sale | 1,387 | — | — | — | — | — | — | |||||||
Mortgage servicing rights, at fair value | 5,995 | 5,821 | 5,926 | 5,890 | 5,466 | 1.2 | 9.7 | |||||||
Right of use assets, net | 11,762 | 12,153 | 12,487 | 12,741 | 9,077 | (5.8) | 29.6 | |||||||
Cash surrender value on life insurance | 102,969 | 102,321 | 101,704 | 100,950 | 60,150 | 1.2 | 71.2 | |||||||
Accrued interest receivable | 19,641 | 19,541 | 19,217 | 15,683 | 8,778 | 2.2 | 123.8 | |||||||
Deferred income taxes | 36,078 | 38,978 | 40,707 | 45,346 | 10,879 | (11.4) | 231.6 | |||||||
Other assets | 23,639 | 26,423 | 24,790 | 24,392 | 13,756 | (4.6) | 71.8 | |||||||
Total assets | $ 5,864,017 | $ 5,825,704 | $ 6,010,918 | $ 5,705,372 | $ 3,641,631 | (2.4) | 61.0 | |||||||
Shore Bancshares, Inc. | ||||||||||||||
Consolidated Balance Sheets (Unaudited) - Continued | ||||||||||||||
June 30, 2024 | June 30, 2024 | |||||||||||||
compared to | compared to | |||||||||||||
(In thousands, except per share data) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | December 31, 2023 | June 30, 2023 | |||||||
LIABILITIES | ||||||||||||||
Noninterest-bearing deposits | $ 1,587,252 | $ 1,200,680 | $ 1,258,037 | $ 1,211,401 | $ 778,963 | 26.2 % | 103.8 | |||||||
Interest-bearing deposits | 3,561,633 | 3,983,599 | 4,128,083 | 3,897,343 | 2,158,563 | (13.7) | 65.0 | |||||||
Total deposits | 5,148,885 | 5,184,279 | 5,386,120 | 5,108,744 | 2,937,526 | (4.4) | 75.3 | |||||||
Advances from FHLB - short-term | 31,000 | — | — | — | 276,000 | — | (88.8) | |||||||
Advances from FHLB - long-term | 50,000 | — | — | — | — | — | — | |||||||
Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS") | 29,316 | 29,237 | 29,158 | 29,079 | 18,492 | 0.5 | 58.5 | |||||||
Subordinated debt | 43,504 | 43,322 | 43,139 | 42,956 | 24,735 | 0.8 | 75.9 | |||||||
Total borrowings | 153,820 | 72,559 | 72,297 | 72,035 | 319,227 | 112.8 | (51.8) | |||||||
Lease liabilities | 12,189 | 12,552 | 12,857 | 13,082 | 9,392 | (5.3) | 29.8 | |||||||
Accrued expenses and other liabilities | 26,340 | 41,086 | 28,509 | 9,933 | 12,346 | (5.3) | 113.3 | |||||||
Total liabilities | 5,341,234 | 5,310,476 | 5,499,783 | 5,203,794 | 3,278,491 | (3.0) | 62.9 | |||||||
STOCKHOLDERS' EQUITY | ||||||||||||||
Common stock, par value $0.01; authorized 50,000,000 shares | 333 | 332 | 332 | 331 | 199 | 0.3 | 67.3 | |||||||
Additional paid in capital | 356,994 | 356,464 | 356,007 | 355,575 | 202,008 | 0.3 | 76.7 | |||||||
Retained earnings | 173,716 | 166,490 | 162,290 | 155,781 | 169,494 | 6.9 | 2.5 | |||||||
Accumulated other comprehensive loss | (8,260) | (8,058) | (7,494) | (10,109) | (8,561) | (9.5) | 3.5 | |||||||
Total stockholders' equity | 522,783 | 515,228 | 511,135 | 501,578 | 363,140 | 2.3 | 44.0 | |||||||
— | ||||||||||||||
Total liabilities and stockholders' equity | $ 5,864,017 | $ 5,825,704 | $ 6,010,918 | $ 5,705,372 | $ 3,641,631 | (2.5) | 61.0 | |||||||
Period-end common shares outstanding | 33,215 | 33,211 | 33,162 | 33,136 | 19,907 | 0.2 | 66.8 | |||||||
Book value per common share | $ 15.74 | $ 15.51 | $ 15.41 | $ 15.14 | $ 18.24 | 2.1 | (13.7) | |||||||
Shore Bancshares, Inc. | ||||||||||||||
Consolidated Statements of Income By Quarter (Unaudited) | ||||||||||||||
6/30/2024 | 6/30/2024 | |||||||||||||
compared to | compared to | |||||||||||||
(In thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2024 | Q2 2023 | |||||||
INTEREST INCOME | ||||||||||||||
Interest and fees on loans | $ 67,292 | $ 65,754 | $ 65,914 | $ 64,869 | $ 32,729 | 2.3 % | 105.6 % | |||||||
Interest on investment securities: | ||||||||||||||
Taxable | 5,230 | 4,419 | 3,992 | 5,047 | 3,729 | 18.4 | 40.3 | |||||||
Tax-exempt | 6 | 6 | 6 | 27 | 5 | — | 20.0 | |||||||
Interest on federal funds sold | — | — | — | 92 | — | — | — | |||||||
Interest on deposits with other banks | 578 | 960 | 1,224 | 1,213 | 170 | (39.8) | 240.0 | |||||||
Total interest income | 73,106 | 71,139 | 71,136 | 71,248 | 36,633 | 2.8 | 99.6 | |||||||
INTEREST EXPENSE | ||||||||||||||
Interest on deposits | 27,585 | 28,497 | 28,133 | 23,473 | 9,914 | (3.2) | 178.2 | |||||||
Interest on short-term borrowings | 1,584 | 56 | 16 | 692 | 3,449 | 2728.6 | (54.1) | |||||||
Interest on long-term borrowings | 1,797 | 1,451 | 1,462 | 1,461 | 776 | 23.9 | 131.6 | |||||||
Total interest expense | 30,966 | 30,004 | 29,611 | 25,626 | 14,139 | 3.2 | 119.0 | |||||||
NET INTEREST INCOME | 42,140 | 41,135 | 41,525 | 45,622 | 22,494 | 2.4 | 87.3 | |||||||
Provision for credit losses | 2,081 | 407 | 896 | 28,176 | 667 | 411.3 | 212.0 | |||||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 40,059 | 40,728 | 40,629 | 17,446 | 21,827 | (1.6) | 83.5 | |||||||
NONINTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 1,493 | 1,507 | 1,519 | 1,505 | 1,264 | (0.9) | 18.1 | |||||||
Trust and investment fee income | 896 | 734 | 844 | 1,933 | 399 | 22.1 | 124.6 | |||||||
Loss on sales and calls of investment securities | — | — | — | (2,166) | — | — | — | |||||||
Interchange credits | 1,717 | 1,587 | 1,633 | 1,557 | 1,311 | 8.2 | 31.0 | |||||||
Mortgage-banking revenue | 1,983 | 801 | 1,105 | 1,377 | 1,054 | 147.6 | 88.1 | |||||||
Title Company revenue | 165 | 78 | 139 | 89 | 186 | 111.5 | (11.3) | |||||||
Bargain purchase gain | — | — | — | 8,816 | — | — | — | |||||||
Other noninterest income | 2,186 | 1,860 | 2,308 | 1,873 | 1,080 | 17.5 | 102.4 | |||||||
Total noninterest income | $ 8,440 | $ 6,567 | $ 7,548 | $ 14,984 | $ 5,294 | 28.5 | 59.4 | |||||||
Shore Bancshares, Inc. | ||||||||||||||
Consolidated Statements of Income By Quarter (Unaudited) - Continued | ||||||||||||||
6/30/2024 | 6/30/2024 | |||||||||||||
compared to | compared to | |||||||||||||
(In thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2024 | Q2 2023 | |||||||
NONINTEREST EXPENSE | ||||||||||||||
Salaries and wages | $ 13,307 | $ 11,852 | $ 12,823 | $ 14,183 | $ 8,955 | 12.3 % | 48.6 % | |||||||
Employee benefits | 3,593 | 4,097 | 3,389 | 3,607 | 2,440 | (12.3) | 47.3 | |||||||
Occupancy expense | 2,432 | 2,416 | 2,328 | 2,245 | 1,599 | 0.7 | 52.1 | |||||||
Furniture and equipment expense | 900 | 904 | 790 | 750 | 477 | (0.4) | 88.7 | |||||||
Data processing | 2,978 | 2,867 | 2,762 | 2,485 | 1,739 | 3.9 | 71.3 | |||||||
Directors' fees | 359 | 295 | 426 | 295 | 185 | 21.7 | 94.1 | |||||||
Amortization of intangible assets | 2,569 | 2,576 | 2,595 | 2,634 | 435 | (0.3) | 490.6 | |||||||
FDIC insurance premium expense | 1,089 | 1,150 | 1,733 | 618 | 758 | (5.3) | 43.7 | |||||||
Other real estate owned expenses, net | — | — | — | 2 | — | — | — | |||||||
Legal and professional fees | 1,354 | 1,599 | 1,411 | 1,217 | 959 | (15.3) | 41.2 | |||||||
Fraud losses (1) | 62 | 4,502 | 503 | 262 | 47 | (98.6) | 31.9 | |||||||
Merger related expenses | — | — | 602 | 14,866 | 1,197 | — | (100.0) | |||||||
Other noninterest expenses | 4,856 | 4,440 | 4,308 | 3,994 | 2,817 | 9.4 | 72.4 | |||||||
Total noninterest expense | 33,499 | 36,698 | 33,670 | 47,158 | 21,608 | (8.7) | 55.0 | |||||||
Income/(loss) before income taxes | 15,000 | 10,597 | 14,507 | (14,728) | 5,513 | 41.6 | 172.1 | |||||||
Income tax expense/(benefit) | 3,766 | 2,413 | 4,017 | (4,991) | 1,495 | 56.1 | 151.9 | |||||||
NET INCOME/(LOSS) | $ 11,234 | $ 8,184 | $ 10,490 | $ (9,737) | $ 4,018 | 37.3 | 179.6 | |||||||
Weighted average shares outstanding - basic and diluted | 33,215 | 33,337 | 33,322 | 33,246 | 19,903 | (0.4) | 66.9 | |||||||
Basic and diluted net income/(loss) per common share | $ 0.34 | $ 0.25 | $ 0.32 | $ (0.29) | $ 0.20 | 35.3 | 69.1 | |||||||
Dividends paid per common share | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 | — | — | |||||||
____________________________________ | |
(1) | Fraud losses includes $4.3 million of credit card fraud losses for the quarter ended March 31, 2024. |
Shore Bancshares, Inc. | ||||||||||||||||||||||||||||||
Consolidated Average Balance Sheets By Quarter (Unaudited) | ||||||||||||||||||||||||||||||
Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | ||||||||||||||||||||||||||
(Dollars in thousands) | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | Average | Interest | Yield/Rate | |||||||||||||||
Earning assets | ||||||||||||||||||||||||||||||
Loans (1), (2), (3) | ||||||||||||||||||||||||||||||
Consumer real estate | $ 1,388,168 | $ 19,278 | 5.59 % | $ 1,361,636 | $ 18,492 | 5.46 % | $ 1,331,150 | $ 18,653 | 5.56 % | $ 1,141,707 | $ 14,548 | 5.06 % | $ 946,545 | $ 10,876 | 4.61 % | |||||||||||||||
Commercial real estate | 2,738,693 | 39,370 | 5.78 | 2,722,600 | 38,604 | 5.70 | 2,728,094 | 38,730 | 5.63 | 2,831,569 | 40,536 | 5.68 | 1,292,406 | 15,620 | 4.85 | |||||||||||||||
Commercial | 216,809 | 3,926 | 7.28 | 219,884 | 4,097 | 7.49 | 221,342 | 4,295 | 7.70 | 233,756 | 5,315 | 9.02 | 137,554 | 2,177 | 6.35 | |||||||||||||||
Consumer | 327,781 | 4,265 | 5.23 | 329,118 | 4,272 | 5.22 | 333,807 | 3,859 | 4.59 | 332,486 | 4,183 | 4.99 | 323,798 | 3,983 | 4.93 | |||||||||||||||
State and political | 2,331 | 30 | 5.18 | 1,473 | 16 | 4.37 | 1,290 | 13 | 4.00 | 929 | 10 | 4.27 | 900 | 8 | 3.57 | |||||||||||||||
Credit Cards | 8,378 | 201 | 9.65 | 7,457 | 167 | 9.01 | 6,320 | 166 | 10.42 | 6,164 | 149 | 9.59 | — | — | — | |||||||||||||||
Other | 24,350 | 302 | 4.99 | 13,015 | 183 | 5.66 | 17,464 | 277 | 6.29 | 16,137 | 201 | 4.94 | 8,741 | 116 | 5.32 | |||||||||||||||
Total Loans | 4,706,510 | 67,372 | 5.76 | 4,655,183 | 65,831 | 5.69 | 4,639,467 | 65,993 | 5.64 | 4,562,748 | 64,942 | 5.65 | 2,709,944 | 32,780 | 4.85 | |||||||||||||||
Investment securities | ||||||||||||||||||||||||||||||
Taxable | 705,421 | 5,230 | 2.97 | 654,663 | 4,419 | 2.70 | 619,259 | 3,992 | 2.58 | 778,081 | 5,047 | 2.59 | 645,178 | 3,729 | 2.31 | |||||||||||||||
Tax-exempt (1) | 658 | 8 | 4.86 | 660 | 8 | 4.85 | 661 | 8 | 4.84 | 663 | 34 | 20.51 | 664 | 6 | 3.61 | |||||||||||||||
Federal funds sold | — | — | — | — | — | — | — | — | — | 7,533 | 92 | 4.85 | — | — | — | |||||||||||||||
Interest-bearing deposits | 47,372 | 578 | 4.91 | 77,276 | 960 | 5.00 | 80,446 | 1,224 | 6.04 | 55,547 | 1,213 | 8.66 | 13,397 | 170 | 5.09 | |||||||||||||||
Total earning assets | 5,459,961 | 73,188 | 5.39 | 5,387,782 | 71,218 | 5.32 | 5,339,833 | 71,217 | 5.29 | 5,404,572 | 71,328 | 5.24 | 3,369,183 | 36,685 | 4.37 | |||||||||||||||
Cash and due from banks | 45,141 | 49,499 | 63,506 | 51,714 | 29,923 | |||||||||||||||||||||||||
Other assets | 391,854 | 395,023 | 399,409 | 359,726 | 225,935 | |||||||||||||||||||||||||
Allowance for credit losses | (57,628) | (57,480) | (57,308) | (46,700) | (28,730) | |||||||||||||||||||||||||
Total assets | $ 5,839,328 | $ 5,774,824 | $ 5,745,440 | $ 5,769,312 | $ 3,596,311 | |||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||||||
Demand deposits | $ 711,138 | $ 5,550 | 3.14 % | $ 1,110,524 | $ 6,362 | 2.30 % | $ 1,117,117 | $ 6,673 | 2.37 % | $ 1,056,956 | $ 6,659 | 2.50 % | $ 685,674 | $ 3,913 | 2.29 % | |||||||||||||||
Money market and savings deposits | 1,690,157 | 10,291 | 2.45 | 1,669,074 | 10,160 | 2.45 | 1,605,930 | 8,330 | 2.06 | 1,572,920 | 6,810 | 1.72 | 907,068 | 2,526 | 1.12 | |||||||||||||||
Brokered deposits | 7,753 | 94 | 4.88 | 20,465 | 251 | 4.93 | 92,840 | 1,347 | 5.76 | 98,649 | 1,225 | 4.93 | — | — | — | |||||||||||||||
Certificates of deposit $100,000 or more | 758,211 | 7,581 | 4.02 | 762,210 | 7,675 | 4.05 | 701,051 | 6,898 | 3.90 | 706,642 | 6,272 | 3.52 | 312,367 | 2,337 | 3.00 | |||||||||||||||
Other time deposits | 417,331 | 4,069 | 3.92 | 417,362 | 4,049 | 3.90 | 391,820 | 4,885 | 4.95 | 285,743 | 2,507 | 3.48 | 225,495 | 1,138 | 2.02 | |||||||||||||||
Interest-bearing deposits (4) | 3,584,590 | 27,585 | 3.10 | 3,979,635 | 28,497 | 2.88 | 3,908,758 | 28,133 | 2.86 | 3,720,910 | 23,473 | 2.50 | 2,130,604 | 9,914 | 1.87 | |||||||||||||||
Advances from FHLB - short-term | 113,549 | 1,584 | 5.61 | 4,000 | 56 | 5.63 | 1,141 | 16 | 5.56 | 70,348 | 692 | 3.90 | 261,797 | 3,449 | 5.28 | |||||||||||||||
Advances from FHLB - long-term | 30,220 | 346 | 4.60 | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||
Subordinated debt and | 72,680 | 1,451 | 8.03 | 72,418 | 1,451 | 8.06 | 72,155 | 1,462 | 8.04 | 71,907 | 1,461 | 8.06 | 43,185 | 776 | 7.21 | |||||||||||||||
Total interest-bearing liabilities | 3,801,039 | 30,966 | 3.28 | 4,056,053 | 30,004 | 2.98 | 3,982,054 | 29,611 | 2.95 | 3,863,165 | 25,626 | 2.63 | 2,435,586 | 14,139 | 2.33 | |||||||||||||||
Noninterest-bearing deposits | 1,480,384 | 1,163,023 | 1,228,060 | 1,345,976 | 778,058 | |||||||||||||||||||||||||
Accrued expenses and other liabilities | 38,427 | 39,772 | 28,286 | 27,057 | 19,442 | |||||||||||||||||||||||||
Stockholders' equity | 519,478 | 515,976 | 507,040 | 533,114 | 363,225 | |||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ 5,839,328 | $ 5,774,824 | $ 5,745,440 | $ 5,769,312 | $ 3,596,311 | |||||||||||||||||||||||||
Net interest income | $ 42,222 | $ 41,214 | $ 41,606 | $ 45,702 | $ 22,546 | |||||||||||||||||||||||||
Net interest spread | 2.11 % | 2.34 % | 2.34 % | 2.61 % | 2.04 % | |||||||||||||||||||||||||
Net interest margin | 3.11 % | 3.08 % | 3.09 % | 3.35 % | 2.68 % | |||||||||||||||||||||||||
Cost of Funds | 2.36 % | 2.31 % | 2.25 % | 1.95 % | 1.76 % | |||||||||||||||||||||||||
Cost of Deposits | 2.19 % | 2.23 % | 2.17 % | 1.84 % | 1.37 % | |||||||||||||||||||||||||
Cost of Debt | 6.28 % | 7.93 % | 8.00 % | 6.00 % | 5.56 % | |||||||||||||||||||||||||
____________________________________ | |
(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 $4.5 million, $4.2 million, $4.8 million, $6.1 million and $0.3 million of accretion interest on loans for the three months ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively. |
(4) | Interest expense on deposits and borrowing includes amortization of deposit premiums and amortization of borrowing fair value adjustment. There were $(0.4) million, $(0.4) million, $(1.5) million, $(0.5) million and $41,000 of amortization of deposits premium, and $(0.2) million, $(0.2) million, $(0.2) million, $(0.2) million and $(47,000) of amortization of borrowing fair value adjustment for the three months ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively. |
Shore Bancshares, Inc. | ||||||||||||||
Reconciliation of Generally Accepted Accounting Principles (GAAP) and Non-GAAP Measures (Unaudited) | ||||||||||||||
YTD | YTD | |||||||||||||
(In thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | 6/30/2024 | 6/30/2023 | |||||||
The following reconciles return on average assets, average equity and return on average tangible equity (Note 1): | ||||||||||||||
Net income (loss) | $ 11,234 | $ 8,184 | $ 10,490 | $ (9,737) | $ 4,018 | $ 19,418 | $ 10,475 | |||||||
Net income (loss) - annualized (A) | $ 45,183 | $ 32,916 | $ 41,618 | $ (38,632) | $ 16,295 | $ 39,049 | $ 21,124 | |||||||
Net income (loss) | $ 11,234 | $ 8,184 | $ 10,490 | $ (9,737) | $ 4,018 | $ 19,418 | $ 10,475 | |||||||
Add: Amortization of intangible assets, net of tax | 1,924 | 1,989 | 1,876 | 1,741 | 317 | 3,903 | 637 | |||||||
Add: Merger Expenses, net of tax | — | — | 435 | 9,828 | 872 | — | 1,373 | |||||||
Add: Credit Card Fraud Losses, net of tax | — | 3,339 | — | — | — | 3,279 | — | |||||||
Net income, excluding net amortization of intangible | 13,158 | 13,512 | 12,801 | 1,832 | 5,207 | 26,600 | 12,485 | |||||||
Net income, excluding net amortization of intangible | $ 52,921 | $ 54,345 | $ 50,787 | $ 7,268 | $ 21,121 | $ 53,492 | $ 25,177 | |||||||
Return on average assets (GAAP) | 0.77 % | 0.57 % | 0.72 % | (0.67) % | 0.45 % | 0.67 % | 0.59 % | |||||||
Return on average assets excluding net amortization of | 0.91 % | 0.94 % | 0.88 % | 0.01 % | 0.59 % | 0.92 % | 0.71 % | |||||||
Average assets | $ 5,839,328 | $ 5,774,824 | $ 5,745,440 | $ 5,769,312 | $ 3,596,311 | $ 5,807,076 | $ 3,551,573 | |||||||
Average stockholders' equity (C) | $ 519,478 | $ 515,976 | $ 507,040 | $ 533,114 | $ 363,225 | $ 517,727 | $ 362,205 | |||||||
Less: Average goodwill and core deposit intangible | (107,594) | (110,167) | (112,752) | (115,604) | (68,172) | (108,881) | (68,388) | |||||||
Average tangible equity (D) | $ 411,884 | $ 405,809 | $ 394,288 | $ 417,510 | $ 295,053 | $ 408,846 | $ 293,817 | |||||||
Return on average equity (GAAP) (A)/(C) | 8.70 % | 6.38 % | 8.21 % | (7.25) % | 4.49 % | 7.54 % | 5.83 % | |||||||
Return on average tangible equity (Non-GAAP) (B)/(D) | 12.85 % | 13.39 % | 12.88 % | 1.74 % | 7.16 % | 13.08 % | 8.57 % | |||||||
Shore Bancshares, Inc. | ||||||||||||||
Reconciliation of Generally Accepted Accounting Principles (GAAP) and Non-GAAP Measures (Unaudited) - Continued | ||||||||||||||
YTD | YTD | |||||||||||||
(In thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | 6/30/2024 | 6/30/2023 | |||||||
The following reconciles GAAP efficiency ratio and non-GAAP efficiency ratio (Note 2): | ||||||||||||||
Noninterest expense (E) | $ 33,499 | $ 36,698 | $ 33,670 | $ 47,158 | $ 21,608 | $ 70,197 | $ 42,501 | |||||||
Less: Amortization of intangible assets | (2,569) | (2,576) | (2,595) | (2,634) | (435) | (5,145) | (876) | |||||||
Less: Merger Expenses | — | — | (602) | (14,866) | (1,197) | — | (1,888) | |||||||
Less: Credit Card Fraud Losses | — | (4,323) | — | — | — | (4,323) | — | |||||||
Adjusted noninterest expense (F) | $ 30,930 | $ 29,799 | $ 30,473 | $ 29,658 | $ 19,976 | $ 60,729 | $ 39,737 | |||||||
Net interest income (G) | $ 42,140 | $ 41,135 | $ 41,525 | $ 45,622 | $ 22,494 | $ 83,275 | $ 48,158 | |||||||
Add: Taxable-equivalent adjustment | 82 | 79 | 81 | 80 | 51 | 161 | 92 | |||||||
Taxable-equivalent net interest income (H) | $ 42,222 | $ 41,214 | $ 41,606 | $ 45,702 | $ 22,545 | $ 83,436 | $ 48,250 | |||||||
Noninterest income (I) | $ 8,440 | $ 6,567 | $ 7,548 | $ 14,984 | $ 5,294 | $ 15,007 | $ 10,628 | |||||||
Investment securities losses (gains) | — | — | — | 2,166 | — | — | — | |||||||
Less: Bargain purchase gain | — | — | — | (8,816) | — | — | — | |||||||
Adjusted noninterest income (J) | $ 8,440 | $ 6,567 | $ 7,548 | $ 8,334 | $ 5,294 | $ 15,007 | $ 10,628 | |||||||
Efficiency ratio (GAAP) (E)/(G)+(I) | 66.23 % | 76.93 % | 68.61 % | 77.81 % | 77.76 % | 71.42 % | 72.30 % | |||||||
Efficiency ratio (Non-GAAP) (F)/(H)+(J) | 61.05 % | 62.37 % | 61.99 % | 54.89 % | 71.76 % | 61.69 % | 67.49 % | |||||||
Net operating expense to average assets (GAAP) | 1.73 % | 2.10 % | 1.80 % | 2.21 % | 1.82 % | 1.91 % | 1.81 % | |||||||
Net operating expense to average assets (Non-GAAP) | 1.55 % | 1.62 % | 1.58 % | 1.47 % | 1.64 % | 1.58 % | 1.65 % | |||||||
Shore Bancshares, Inc. | ||||||||||
Reconciliation of Generally Accepted Accounting Principles (GAAP) and Non-GAAP Measures (Unaudited) - Continued | ||||||||||
(In thousands, except per share data) | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | |||||
The following reconciles book value per common share and tangible book value per common share (Note 1): | ||||||||||
Stockholders' equity (K) | $ 522,783 | $ 515,228 | $ 511,135 | $ 501,578 | $ 363,140 | |||||
Less: Goodwill and core deposit intangible | (106,211) | (108,781) | (111,356) | (113,951) | (67,937) | |||||
Tangible equity (L) | $ 416,572 | $ 406,447 | $ 399,779 | $ 387,627 | $ 295,203 | |||||
Shares outstanding (M) | 33,215 | 33,211 | 33,162 | 33,136 | 19,907 | |||||
Book value per common share (GAAP) (K)/(M) | $ 15.74 | $ 15.51 | $ 15.41 | $ 15.14 | $ 18.24 | |||||
Tangible book value per common share (Non-GAAP) (L)/(M) | $ 12.54 | $ 12.24 | $ 12.06 | $ 11.70 | $ 14.83 | |||||
The following reconciles equity to assets and tangible equity to tangible assets (Note 1): | ||||||||||
Stockholders' equity (N) | $ 522,783 | $ 515,228 | $ 511,135 | $ 501,578 | $ 363,140 | |||||
Less: Goodwill and core deposit intangible | (106,211) | (108,781) | (111,356) | (113,951) | (67,937) | |||||
Tangible equity (O) | $ 416,572 | $ 406,447 | $ 399,779 | $ 387,627 | $ 295,203 | |||||
Assets (P) | $ 5,864,017 | $ 5,825,704 | $ 6,010,918 | $ 5,705,372 | $ 3,641,631 | |||||
Less: Goodwill and core deposit intangible | (106,211) | (108,781) | (111,356) | (113,951) | (67,937) | |||||
Tangible assets (Q) | $ 5,757,806 | $ 5,716,923 | $ 5,899,562 | $ 5,591,421 | $ 3,573,694 | |||||
Period-end equity/assets (GAAP) (N)/(P) | 8.92 % | 8.84 % | 8.50 % | 8.79 % | 9.97 % | |||||
Period-end tangible equity/tangible assets (Non-GAAP) (O)/(Q) | 7.23 % | 7.11 % | 6.78 % | 6.93 % | 8.26 % | |||||
____________________________________ |
Note 1: Management believes that reporting tangible equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes. |
Note 2: Management believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling cash-based operating activities. |
Shore Bancshares, Inc. | ||||||||||||||||||||
Summary of Loan Portfolio (Unaudited) | ||||||||||||||||||||
Portfolio loans are summarized by loan type as follows: | ||||||||||||||||||||
(Dollars in thousands) | June 30, 2024 | % | March 31, 2024 | % | December 31, 2023 | % | September 30, 2023 | % | June 30, 2023 | % | ||||||||||
Portfolio Loans by Loan Type | ||||||||||||||||||||
Construction | $ 327,875 | 6.97 % | $ 299,133 | 6.43 % | $ 299,000 | 6.44 % | $ 328,750 | 7.12 % | $ 220,228 | 8.00 % | ||||||||||
Residential real estate | 1,539,590 | 32.72 % | 1,515,134 | 32.59 % | 1,490,438 | 32.11 % | 1,439,464 | 31.17 % | 938,151 | 34.07 % | ||||||||||
Commercial real estate | 2,287,497 | 48.60 % | 2,272,867 | 48.90 % | 2,286,154 | 49.27 % | 2,283,521 | 49.45 % | 1,130,346 | 41.06 % | ||||||||||
Commercial | 218,987 | 4.65 % | 229,594 | 4.94 % | 229,939 | 4.95 % | 229,474 | 4.97 % | 138,459 | 5.03 % | ||||||||||
Consumer | 324,480 | 6.90 % | 325,076 | 6.99 % | 328,896 | 7.09 % | 330,411 | 7.16 % | 326,039 | 11.84 % | ||||||||||
Credit Cards | 7,308 | 0.16 % | 6,921 | 0.15 % | 6,583 | 0.14 % | 6,099 | 0.13 % | — | — % | ||||||||||
Total loans | 4,705,737 | 100.00 % | 4,648,725 | 100.00 % | 4,641,010 | 100.00 % | 4,617,719 | 100.00 % | 2,753,223 | 100.00 % | ||||||||||
Less: Allowance for credit losses | (58,478) | (57,336) | (57,351) | (57,051) | (29,014) | |||||||||||||||
Total loans, net | $ 4,647,259 | $ 4,591,389 | $ 4,583,659 | $ 4,560,668 | $ 2,724,209 | |||||||||||||||
Shore Bancshares, Inc. | ||||||||||
Classified Assets and Nonperforming Loans (Unaudited) | ||||||||||
Classified loans and nonperforming loans are summarized as follows: | ||||||||||
(dollars in thousands) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||
Classified Loans | ||||||||||
Substandard | $ 17,409 | $ 13,403 | $ 14,673 | $ 10,888 | $ 13,108 | |||||
Doubtful | — | — | — | — | — | |||||
Loss | — | — | — | — | — | |||||
Total Classified Loans | $ 17,409 | $ 13,403 | $ 14,673 | $ 10,888 | $ 13,108 | |||||
Special Mention Loans | 25,549 | 27,192 | 28,264 | 24,931 | 11,405 | |||||
Total Classified and Special Mention Loans | $ 42,958 | $ 40,595 | $ 42,937 | $ 35,819 | $ 24,513 | |||||
Classified Loans | $ 17,409 | $ 13,403 | $ 14,673 | $ 10,888 | $ 13,108 | |||||
Other Real Estate Owned | 3,126 | 2,024 | 179 | 179 | 179 | |||||
Classified Securities | — | — | — | — | — | |||||
Total Classified Assets | $ 20,535 | $ 15,427 | $ 14,852 | $ 11,067 | $ 13,287 | |||||
Non-accrual Loans | $ 14,837 | $ 12,776 | $ 12,784 | $ 8,982 | $ 3,481 | |||||
90+ Days Delinquent Accruing | 414 | 1,560 | 738 | 2,149 | 1,050 | |||||
Accruing BEFDs Loans ("BEFDs") | — | — | — | — | — | |||||
Other Real Estate Owned ("OREO") | 3,126 | 2,024 | 179 | 179 | 179 | |||||
Total Nonperforming Loans | $ 18,377 | $ 16,360 | $ 13,701 | $ 11,310 | $ 4,710 | |||||
Shore Bancshares, Inc. | ||||||||||||||||||||
Summary of Deposits (Unaudited) | ||||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||||||||
(dollars in thousands) | Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||
Noninterest-bearing demand | $ 1,587,252 | 30.83 % | $ 1,200,680 | 23.15 % | $ 1,258,037 | 23.36 % | $ 1,211,401 | 23.70 % | $ 778,963 | 26.52 % | ||||||||||
Interest-bearing: | ||||||||||||||||||||
Demand | 658,512 | 12.79 % | 1,101,954 | 21.26 % | 1,165,546 | 21.64 % | 1,210,051 | 23.69 % | 694,221 | 23.63 % | ||||||||||
Money market deposits | 1,337,274 | 25.97 % | 1,358,205 | 26.20 % | 1,430,603 | 26.56 % | 1,179,049 | 23.08 % | 600,724 | 20.45 % | ||||||||||
Savings | 352,069 | 6.84 % | 354,098 | 6.83 % | 347,324 | 6.45 % | 371,755 | 7.28 % | 270,884 | 9.22 % | ||||||||||
Certificates of deposit | 1,213,778 | 23.57 % | 1,169,342 | 22.56 % | 1,184,610 | 21.99 % | 1,136,488 | 22.25 % | 592,734 | 20.18 % | ||||||||||
Total interest-bearing | 3,561,633 | 69.17 % | 3,983,599 | 76.85 % | 4,128,083 | 76.64 % | 3,897,343 | 76.30 % | 2,158,563 | 73.48 % | ||||||||||
Total Deposits | $ 5,148,885 | 100.00 % | $ 5,184,279 | 100.00 % | $ 5,386,120 | 100.00 % | $ 5,108,744 | 100.00 % | $ 2,937,526 | 100.00 % | ||||||||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/shore-bancshares-inc-reports-second-quarter-and-first-half-financial-results-302206495.html
SOURCE Shore Bancshares, Inc.
Copyright 2024 PR Newswire
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