Shore Bancshares, Inc. Reports 2025 Third Quarter Results

Rhea-AI Summary

Shore Bancshares (NASDAQ: SHBI) reported Q3 2025 net income of $14.3M or $0.43 per diluted share, down from $15.5M in Q2 2025 but up from $11.2M in Q3 2024. Net interest income rose to $48.7M and NIM expanded to 3.42%. Book value per share grew to $17.27 at September 30, 2025.

Asset quality showed stress: nonperforming assets increased to 0.45% of assets and classified assets rose to 0.83% of assets. Provision for credit losses was $3.0M, including a large marine loan write-off. Tangible common equity ratio was 7.80% and total assets were $6.28B.

Positive

• Nine-month net income +42% to $43.6M year-to-date
• Net interest income of $48.7M in Q3 2025
• Book value per share increased to $17.27 at 9/30/2025

Negative

• Provision for credit losses increased to $3.0M in Q3 2025
• Nonperforming assets rose to 0.45% of total assets
• Substandard loans increased to $48.5M at 9/30/2025

EASTON, Md., Oct. 23, 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 third quarter of 2025 of $14.3 million, or $0.43 per diluted common share, compared to net income of $15.5 million, or $0.46 per diluted common share, for the second quarter of 2025, and net income of $11.2 million, or $0.34 per diluted common share, for the third quarter of 2024.

Third  Quarter 2025 Highlights

• Return on Average Assets ("ROAA") – The Company reported ROAA of 0.95% for the third quarter of 2025, compared to 1.03% for the second quarter of 2025 and 0.77% for the third quarter of 2024. Non-U.S. generally accepted accounting principles ("GAAP") ROAA⁽¹⁾ was 1.05% for the third quarter of 2025, compared to 1.15% for the second quarter of 2025 and 0.90% for the third quarter of 2024.
• Net Income – Net income for the third quarter of 2025 decreased $1.2 million to $14.3 million from $15.5 million in the second quarter of 2025. Net income decreased primarily due to lower noninterest income of $1.6 million driven by reduced mortgage banking activity and a higher provision for loan losses of $1.5 million due to a large marine loan write-off, partially offset by an increase in net interest income of $1.4 million. Net income for the nine months ended September 30, 2025 was $43.6 million, compared to $30.6 million for the nine months ended September 30, 2024. The increase was primarily driven by an increase in net interest income due to loans repricing favorably coupled with a lower cost of deposits during the period.
• Net Interest Margin ("NIM") Expansion – Net interest income for the third quarter of 2025 increased $1.4 million to $48.7 million from $47.3 million for the second quarter of 2025. NIM increased 7 basis points ("bps") to 3.42% during the third quarter of 2025 from 3.35% in the second quarter of 2025. NIM excluding accretion⁽¹⁾ increased for the comparable periods from 3.10% to 3.22%. Excluding accretion interest, loan yields increased 6 bps and funding costs decreased 6 bps for the comparable periods. Net interest income increased due to modest loan growth coupled with a lower cost of deposits. These favorable changes were partially offset by a lower yield on investments and lower average deposits with other institutions.
• Book Value per Share – Book value per share increased to $17.27 at September 30, 2025 from $16.94 at June 30, 2025 and $16.00 at September 30, 2024.
• Asset Quality – Nonperforming assets to total assets were 0.45% at September 30, 2025, an increase from 0.33% at June 30, 2025 and 0.27% at September 30, 2024. Classified assets to total assets were 0.83% at September 30, 2025, an increase when compared to 0.37% at June 30, 2025 and 0.39% at September 30, 2024. The allowance for credit losses ("ACL") was $59.6 million at September 30, 2025, compared to $57.9 million at December 31, 2024 and $58.7 million at September 30, 2024. The ACL as a percentage of loans increased to 1.22% at September 30, 2025 compared to 1.21% at December 31, 2024, and decreased compared to 1.24% at September 30, 2024.
• Operating Leverage – The efficiency ratio for the third quarter of 2025 was 61.00% compared to 60.83% in the second quarter of 2025 and 67.49% for the third quarter of 2024. The non-GAAP efficiency ratio⁽¹⁾, which excludes amortization, was 57.30% for the third quarter of 2025, compared to 56.73% for the second quarter of 2025 and 62.10% for the third quarter of 2024. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.

"We continue to demonstrate resilience and operational strength in the third quarter," stated James ("Jimmy") M. Burke, President and Chief Executive Officer of Shore Bancshares. "Despite a modest decline in net income for the quarter due to a large marine loan write-off and softer noninterest income, we saw meaningful expansion in net interest margin and continued growth in book value per share. Asset quality remains sound, supported by strong collateral and prudent reserve levels, despite a temporary increase in nonperforming and classified assets driven by a few commercial real estate exposures. As we navigate a dynamic environment, we remain focused on enhancing operating leverage through strategic investments in technology and talent. We are confident in our ability to deliver sustainable long-term value."

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

Balance Sheet Review

Total assets were $6.28 billion at September 30, 2025, an increase of $47.7 million, or 0.8%, when compared to $6.23 billion at December 31, 2024. The aggregate increase was primarily due to an increase in our loan portfolio of $111.0 million, partially offset by a decrease in interest-bearing deposits at other banks of $61.6 million and a decrease in our investment securities portfolio of $14.8 million. The decrease in interest-bearing deposits with other institutions was primarily driven by loan growth. Total assets increased $360.8 million, or 6.1%, from $5.92 billion when compared to September 30, 2024.

The Company's tangible common equity ratio at September 30, 2025 was 7.80% compared to 7.17% at December 31, 2024. The Company's Tier 1 and Total Risk-Based Capital Ratios at September 30, 2025 were 10.82% and 12.88%, respectively. Non-owner occupied commercial real estate ("CRE") loans were $2.16 billion and $2.08 billion, and as a percentage of the Bank's Tier 1 Capital + ACL were 348.42% and 359.52% at September 30, 2025 and December 31, 2024, respectively.

CRE loans (excluding land and construction) at September 30, 2025 were $2.64 billion compared to $2.56 billion at December 31, 2024. The following table provides the stratification of the classes of CRE loans at September 30, 2025.

		September 30, 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		43.00 %		$                562		$          31,462		50.82 %		$             1,820		$          98,278
Office, govt. or govt. contractor		53.78		603		4,820		56.48		2,892		49,170
Office, other		48.85		480		91,125		47.72		1,198		198,837
Office, total		47.76		502		127,407		49.07		1,461		346,285
Retail		49.72		614		66,951		49.03		2,510		486,968
Multi-family (5+ units)		—		—		—		55.05		2,412		287,016
Hotel/motel		—		—		—		45.05		4,090		204,511
Industrial/warehouse		48.16		673		96,857		49.59		1,555		211,455
Commercial-improved		40.79		1,161		206,657		49.31		1,266		160,729
Marine/boat slips		29.78		1,512		39,313		35.31		1,647		9,885
Restaurant		48.43		999		59,928		47.34		992		46,602
Church		33.95		863		60,434		13.34		2,383		2,383
Land/lot loans		51.17		660		1,320		49.02		253		86,901
Other		40.15		1,409		114,157		83.01		682		313,150
Total CRE loans, gross(3)		43.52		837		$        773,024		54.25		1,254		$     2,155,885

(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 $473.7 million, or 9.7% of total loans at September 30, 2025. The Bank's office CRE loan portfolio included loans to medical tenants of $129.7 million, or 27.4% of the total office CRE loan portfolio, at September 30, 2025. The Bank's office CRE loan portfolio also included loans to government or government contractor tenants of $54.0 million, or 11.4% of the total office CRE loan portfolio for the same period. At September 30, 2025, the average loan debt-service coverage ratio on the office CRE loan portfolio was 1.8x and the average LTV was 48.40%.

There were 491 loans in the office CRE portfolio, which had an average loan size of $965 thousand and a median loan size of $366 thousand. LTV estimates for the office CRE portfolio at September 30, 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%		242		$                    156,733		33.1 %
50%-60%		78		111,682		23.6
60%-70%		92		132,631		28.0
70%-80%		63		62,485		13.2
Greater than 80%		16		10,161		2.1
Total		491		$                    473,692		100.0 %

The Bank had 16 office CRE loans with balances greater than $5.0 million, totaling $144.7 million at September 30, 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, the payoff of a $5.6 million loan, and the change in purpose of collateral of an $11.8 million loan from office to school. Of the office CRE portfolio balance, 80.1% was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 96.9% was secured by properties with five stories or less. Of the office CRE loans, $13.7 million were classified as special mention or substandard at September 30, 2025. The Bank did not have any charge-offs related to the office CRE portfolio during 2025.

At September 30, 2025 and June 30, 2025, nonperforming assets were $28.1 million, or 0.45% of total assets, and $19.6 million, or 0.33% of total assets, respectively. The balance of nonperforming assets increased $8.5 million, primarily due to commercial real estate and consumer loans. When comparing September 30, 2025 to September 30, 2024, nonperforming assets increased $12.3 million, primarily due to an increase in nonaccrual loans of $9.5 million and an increase in repossessed marine and auto loans of $3.1 million. Substandard loans, which include nonaccrual loans, accruing loans and accruing loans 90 days or more past due were $48.5 million at September 30, 2025 compared to $19.9 million at June 30, 2025 and $22.8 million at September 30, 2024. The increase was primarily due to several commercial non-owner occupied real estate loans, which were downgraded during the current period. All of these loans are well secured by collateral and required minimal individual reserves as of September 30, 2025.

Total deposits increased $214.2 million from June 30, 2025 to $5.53 billion at September 30, 2025 and decreased $171 thousand when compared to December 31, 2024. The third-quarter increase was primarily driven by seasonal growth in municipal deposits, which typically accumulate during this period. The decrease in total deposits year-to-date was primarily due to a decrease in interest-bearing checking deposits of $126.1 million and a decrease in money market and savings of $15.9 million. These decreases were partially offset by an increase in time deposits of $99.6 million. Core deposits, which exclude municipal deposits, increased by $224.2 million, or 5.5%, during the same period which was partially offset by volatility driven by a large client relationship.

Total funding, which includes customer deposits, Federal Home Loan Bank ("FHLB") advances and brokered deposits was $5.58 billion at September 30, 2025, compared to $5.36 billion at June 30, 2025. The Bank had a $50.0 million FHLB advance at September 30, 2025 and June 30, 2025. The advance consisted of an 18-month Bermuda Convertible note of $50.0 million. The Bank had $10.9 million and $10.8 million of brokered deposits at September 30, 2025 and June 30, 2025, respectively. Total reciprocal deposits were $1.48 billion at September 30, 2025 and $1.31 billion at June 30, 2025.

The Bank's uninsured deposits were $936.3 million, or 16.9% of total deposits, at September 30, 2025. The Bank's uninsured deposits, excluding deposits secured with pledged collateral, were $792.2 million, or 14.3% of total deposits, at September 30, 2025. At September 30, 2025, the Bank had approximately $1.37 billion of available liquidity, including $416.5 million in cash and cash equivalents, $950.9 million in secured borrowing capacity at the FHLB and other correspondent banks and $65.0 million in unsecured lines of credit.

Total stockholders' equity increased $36.1 million, or 6.7%, 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 September 30, 2025 and December 31, 2024, the ratio of total equity to total assets was 9.19% and 8.68%, respectively, and the ratio of total tangible equity to total tangible assets⁽¹⁾ was 7.80% and 7.17%, respectively.

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

Review of Quarterly Financial Results 

Net interest income was $48.7 million for the third quarter of 2025, compared to $47.3 million for the second quarter of 2025 and $43.3 million for the third quarter of 2024. The increase in net interest income when compared to the second quarter of 2025 was primarily due to an increase in interest income on loans of $1.2 million and a decrease in interest expense on deposits of $895 thousand, partially offset by a decrease in interest income on deposits at other banks of $373 thousand and a decrease in interest income on investment securities of $295 thousand. The increase in net interest income was $5.4 million when compared to the third quarter of 2024, and was primarily due to a decrease in interest expense on deposits of $2.4 million, an increase in interest and fees on loans of $1.8 million, a decrease in interest expense on long term borrowings of $661 thousand and an increase in interest on deposits at other banks of $651 thousand, partially offset by an increase in interest expense on short-term borrowings of $149 thousand.

The Company's NIM increased to 3.42% for the third quarter of 2025 from 3.35% for the second quarter of 2025, primarily due to higher core interest income. NIM excluding accretion increased for the comparable periods from 3.10% to 3.22%. Excluding accretion interest, loan yields increased 6 bps and funding costs decreased 6 bps, for the comparable periods. Interest expense for the third quarter of 2025 decreased $836 thousand when compared to the second quarter of 2025. All deposit products repriced at favorable rates, coupled with lower interest-bearing deposit balances during the period. The Company's NIM increased to 3.42% for the third quarter of 2025 from 3.17% for the third quarter of 2024. The Company's average interest-earning asset yield decreased to 5.42% for the third quarter of 2025 from 5.47% for the third quarter of 2024, while the average cost of funds decreased 29 bps to 2.09% from 2.38% for the same periods.

The provision for credit losses was $3.0 million for the three months ended September 30, 2025. The comparable amounts were $1.5 million for the three months ended June 30, 2025 and $1.5 million for the three months ended September 30, 2024. The increase in the provision for credit losses for the third quarter of 2025 compared to the second quarter of 2025 was due to higher reserves related to growth in the loan portfolio and higher charge-offs driven by a large marine loan write-off. Coverage ratios increased to 1.22% at September 30, 2025 from 1.21% at June 30, 2025, and decreased from 1.24% at September 30, 2024. Net charge-offs increased to $1.8 million for the third quarter of 2025 compared to $649 thousand for the second quarter of 2025, and increased compared to $1.3 million for the third quarter of 2024. The increase was driven by a large marine loan write-down in the third quarter 2025.

Total noninterest income for the third quarter of 2025 was $7.7 million, a decrease of $1.6 million from $9.3 million for the second quarter of 2025, and an increase of $414 thousand from $7.3 million for the third quarter of 2024. When comparing the third quarter of 2025 to the second quarter of 2025, the decrease in noninterest income was primarily due to a decrease in mortgage banking revenue of $1.1 million and the absence of the one-time credit card incentive in the second quarter 2025. Comparing the third quarter of 2025 to the third quarter of 2024, the increase in noninterest income was primarily due to an increase in interchange credits and an increase in mortgage banking revenue.

Total noninterest expense of $34.4 million for the third quarter of 2025 decreased $31 thousand compared to the second quarter of 2025 expense of $34.4 million, and increased $265 thousand compared to the third quarter of 2024 expense of $34.1 million. The decrease from the second quarter of 2025 was primarily due to lower professional service fees of $236 thousand and other noninterest expense, partially offset by higher salaries and employee benefit expenses of $0.9 million. The increase from the third quarter of 2024 was primarily due to higher salaries and benefits expense of $2.1 million and higher software and data processing costs of $736 thousand, partially offset by the absence of the credit fraud loss-related expenses incurred in the third quarter 2024, lower legal and professional services of $373 thousand and lower amortization of other intangible assets of $297 thousand.

The efficiency ratio for the third quarter of 2025 when compared to the second quarter of 2025 and the third quarter of 2024 was 61.00%, 60.83% and 67.49%, respectively. Non-GAAP efficiency ratios⁽¹⁾ for the same periods were 57.30%, 56.73% and 62.10%, respectively. The net operating expense ratio, which is noninterest expense less noninterest income divided by average assets, for the third quarter of 2025 was 1.76%, compared to 1.67% and 1.84% for the second quarter of 2025 and the third quarter of 2024, respectively. The non-GAAP net operating expense ratio⁽¹⁾, which excludes core deposit intangible amortization and non-recurring activity, was 1.62% for the third quarter of 2025, compared to 1.52% and 1.65% for the second quarter of 2025 and the third quarter of 2024, respectively.

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

Review of Nine  Month Financial Results

Net interest income for the nine months ended September 30, 2025 was $141.9 million, an increase of $15.4 million, or 12.2%, when compared to the nine months ended September 30, 2024. The increase in net interest income was primarily due to an increase in total interest income of $10.9 million, or 5.0%, which included an increase in interest and fees on loans of $6.1 million, or 3.0%, and an increase in interest on deposits with other banks of $4.1 million, or 195.5%. The increase in interest and fees on loans was primarily due to the increase in the average balance of loans of $135.9 million, or 2.9%. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $3.0 million and a decrease in interest expense on borrowings of $1.4 million as a result of lower average FHLB advances and associated rates during the year.

The Company's NIM increased from 3.12% for the nine months ended September 30, 2024 to 3.34% for the nine months ended September 30, 2025. Margins were higher due to a $266.5 million increase in interest-earning asset balances and a 1 basis point increase in interest-earning asset yields. These positive movements were coupled with lower cost interest-bearing deposits. The increase in the average balances of interest-bearing deposits of $75.5 million was offset by a 16 basis point decrease in the associated rates paid, as well as a $26.3 million decrease in the average balance of FHLB advances and a 52 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 23 basis points and 29 basis points for the nine months ended September 30, 2025 and 2024, respectively, which resulted in NIMs excluding accretion of 3.11% and 2.83% for the same periods.

The provision for credit losses for the nine months ended September 30, 2025 and 2024 was $5.5 million and $4.0 million, respectively. The increase in the provision for credit losses during 2025 was due to higher reserves related to growth in the loan portfolio and higher charge-offs, partially offset by an improved economic outlook. Net charge-offs for the nine months ended September 30, 2025 were $3.0 million compared to $2.7 million for the nine months ended September 30, 2024.

Total noninterest income for the nine months ended September 30, 2025 increased $1.7 million, or 7.7%, when compared to the same period in 2024. The increase was primarily due to a $936 thousand increase in mortgage-banking revenue, a $341 thousand increase in other noninterest income and a $208 thousand increase in interchange credits.

Total noninterest expense for the nine months ended September 30, 2025 decreased $1.8 million, or 1.7%, when compared to the same period in 2024. Noninterest expense line items decreased primarily due to the absence of the $4.7 million credit card fraud event during the nine months ended September 30, 2024 and lower amortization of intangible assets of $893 thousand, which was partially offset by higher salaries and employee benefit expenses of $3.5 million and an increase of $2.0 million of software and data processing expense in the nine months ended September 30, 2025.

The efficiency ratio for the nine months ended September 30, 2025 was 61.78% compared to 70.09% for the nine months ended September 30, 2024. Non-GAAP efficiency ratios for the same periods were 57.73% and 61.83%, respectively. The net operating expense ratio, which is noninterest expense less noninterest income divided by average assets, for the nine months ended September 30, 2025 was 1.73% compared to 1.89% for the nine months ended September 30, 2024. The non-GAAP net operating expense ratio⁽¹⁾, which excludes core deposit intangible amortization and non-recurring activity, was 1.59% for the nine months ended September 30, 2025, compared to 1.61% for the nine months ended September 30, 2024.

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

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: the strength of the United States ("U.S.") economy and 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; 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; 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; the effects of federal government shutdowns, debt ceiling standoff, or other uncertainty regarding 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)
												Q3 2025 vs.		Q3 2025 vs.		Nine Months Ended September 30,
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		Q2 2025		Q3 2024		2025		2024		2025 vs. 2024
PROFITABILITY FOR THE PERIOD
Taxable-equivalent net interest income		$         48,738		$         47,333		$         46,110		$         44,093		$         43,345		3.0 %		12.4 %		$      142,180		$      126,780		12.15 %
Less: Taxable-equivalent adjustment		83		81		81		82		82		2.5		1.2		244		242		0.83
Net interest income		48,655		47,252		46,029		44,011		43,263		3.0		12.5		141,936		126,538		12.17
Provision for credit losses		2,992		1,528		1,028		780		1,470		95.8		103.5		5,548		3,958		40.17
Noninterest income		7,701		9,318		7,003		8,853		7,287		(17.4)		5.7		24,021		22,294		7.75
Noninterest expense		34,379		34,410		33,747		33,943		34,114		(0.1)		0.8		102,536		104,311		(1.70)
Income before income taxes		18,985		20,632		18,257		18,141		14,966		(8.0)		26.9		57,873		40,563		42.67
Income tax expense		4,637		5,125		4,493		4,859		3,777		(9.5)		22.8		14,254		9,956		43.17
Net income		$         14,348		$         15,507		$         13,764		$         13,282		$         11,189		(7.5)		28.2		$        43,619		$        30,607		42.51
Adjusted net income – non-GAAP(1)		$          15,889		$          17,215		$          15,481		$          14,636		$          13,187		(7.7) %		20.5 %		$        48,585		$        39,769		22.2 %
Pre-tax pre-provision net income – non-GAAP(1)		$          21,977		$          22,160		$          19,285		$          18,921		$          16,436		(0.8) %		33.7 %		$        63,421		$        44,521		42.5 %
Return on average assets – GAAP		0.95 %		1.03 %		0.91 %		0.86 %		0.77 %		(8) bp		18 bp		0.96 %		0.70 %		26 bp
Adjusted return on average assets – non-GAAP(1)		1.05		1.15		1.02		0.94		0.90		(10)		15		1.07		0.91		16
Return on average common equity – GAAP		9.96		11.13		10.20		9.82		8.41		(117)		155		10.43		7.84		259
Return on average tangible common equity – non-GAAP(1)		11.98		13.50		12.49		12.14		10.50		(152)		148		12.65		9.88		277
Interest rate spread		2.46		2.39		2.30		2.02		2.06		7		40		2.38		2.18		20
Net interest margin		3.42		3.35		3.24		3.03		3.17		7		25		3.34		3.12		22
Efficiency ratio – GAAP		61.00		60.83		63.64		64.21		67.49		17		(649)		61.78		70.09		(831)
Efficiency ratio – non-GAAP(1)		57.30		56.73		59.25		60.28		62.10		57		(480)		57.73		61.83		(410)
Noninterest income to average assets		0.51		0.62		0.46		0.57		0.50		(11)		1		0.53		0.51		2
Noninterest expense to average assets		2.27		2.29		2.23		2.19		2.34		(2)		(7)		2.26		2.40		(14)
Net operating expense to average assets – GAAP		1.76		1.67		1.77		1.62		1.84		9		(8)		1.73		1.89		(16)
Net operating expense to average assets – non-GAAP(1)		1.62		1.52		1.62		1.50		1.65		10		(3)		1.59		1.61		(2)
PER SHARE DATA
Basic net income per common share		$             0.43		$             0.46		$             0.41		$             0.40		$             0.34		(6.5) %		26.5 %		$           1.31		$           0.92		42.39 %
Diluted net income per common share		0.43		0.46		0.41		0.40		0.34		(6.5)		26.5		1.31		0.92		42.39
Dividends paid per common share		0.12		0.12		0.12		0.12		0.12		—		—		0.36		0.36		—
Book value per common share at period end		17.27		16.94		16.55		16.23		16.00		2.0		7.9		17.27		16.00		7.94
Tangible book value per common share at period end – non-GAAP(1)		14.43		14.03		13.58		13.19		12.88		2.9		12.0		14.43		12.88		12.03
Common share market value at period end		16.41		15.72		13.54		15.85		13.99		4.4		17.3		16.41		13.99		17.30
Common share intraday price:
High		$           17.67		$           15.88		$           17.24		$           17.61		$           14.99		11.3 %		17.9 %		17.67		14.99		17.88
Low		14.96		11.47		13.15		13.21		11.03		30.4		35.6		11.47		10.06		14.02

____________________________________

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

 

Shore Bancshares, Inc. Financial Highlights By Quarter and Year (Unaudited) - Continued
												Q3 2025 vs.		Q3 2025 vs.		Nine Months Ended September 30,
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		Q2 2025		Q3 2024		2025		2024		2025 vs. 2024
AVERAGE BALANCE SHEET DATA
Loans		$     4,884,003		$     4,833,558		$     4,784,991		$     4,796,245		$     4,734,001		1.0 %		3.2 %		$   4,834,547		$   4,698,694		2.89 %
Investment securities		664,535		683,680		664,655		655,610		656,375		(2.8)		1.2		670,956		672,533		(0.23)
Earning assets		5,658,981		5,660,409		5,768,080		5,798,454		5,435,311		0.0		4.1		5,694,210		5,427,713		4.91
Assets		6,020,574		6,021,385		6,129,241		6,163,497		5,810,492		0.0		3.6		6,056,883		5,808,153		4.28
Deposits		5,280,252		5,297,567		5,417,514		5,461,583		5,086,348		(0.3)		3.8		5,331,498		5,097,951		4.58
FHLB advances		52,391		50,000		50,000		50,000		83,500		4.8		(37.3)		50,806		77,113		(34.11)
Subordinated debt & TRUPS		74,363		74,102		73,840		73,578		72,946		0.4		1.9		74,103		72,682		1.96
Stockholders' equity		571,247		558,952		547,443		538,184		529,155		2.2		8.0		559,301		521,564		7.24
CREDIT QUALITY DATA
Net charge-offs (recoveries)		$           1,825		$              649		$              554		$           1,333		$           1,288		181.2 %		41.7 %		$          3,028		$          2,739		10.55 %
Nonaccrual loans		$         24,378		$         16,782		$         15,402		$         21,008		$         14,844		45.3 %		64.2 %
Loans 90 days past due and still accruing		153		215		894		294		454		(28.8)		(66.3)
Other real estate owned and repossessed property		3,552		2,636		2,608		3,494		485		34.8		632.4
Total nonperforming assets		$         28,083		$         19,633		$         18,904		$         24,796		$         15,783		43.0		77.9

 

Shore Bancshares, Inc. Financial Highlights By Quarter and Year (Unaudited) - Continued
												Q3 2025 vs.		Q3 2025 vs.		Nine Months Ended September 30,
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		Q2 2025		Q3 2024		2025		2024		2025 vs. 2024
CAPITAL AND CREDIT QUALITY RATIOS
Period-end equity to assets – GAAP		9.19 %		9.36 %		8.94 %		8.68 %		9.01 %		(17) bp		18 bp
Period-end tangible equity to tangible assets – non-GAAP(1)		7.80		7.88		7.46		7.17		7.39		(8)		41
Annualized net charge-offs to average loans		0.15 %		0.05 %		0.05 %		0.11 %		0.11 %		10 bp		4 bp		0.08 %		0.08 %		— bp
Allowance for credit losses as a percent of:
Period-end loans		1.22 %		1.21 %		1.21 %		1.21 %		1.24 %		1 bp		(2) bp
Period-end nonaccrual loans		244.29		348.49		376.85		275.66		395.24		(10,420)		(15,095)
Period-end nonperforming assets		212.06		297.88		307.04		233.55		371.72		(8,582)		(15,966)
As a percent of total loans at period-end:
Nonaccrual loans		0.50 %		0.35 %		0.32 %		0.44 %		0.31 %		15 bp		19 bp
As a percent of total loans, other real estate owned and repossessed property at period-end:
Nonperforming assets		0.57 %		0.41 %		0.40 %		0.52 %		0.33 %		16 bp		24 bp
As a percent of total assets at period-end:
Nonaccrual loans		0.39 %		0.28 %		0.25 %		0.34 %		0.25 %		11 bp		14 bp
Nonperforming assets		0.45		0.33		0.31		0.40		0.27		12		18

____________________________________

(1)     See the Reconciliation of GAAP and N1on-GAAP Measures tables.

 

Shore Bancshares, Inc. Financial Highlights By Quarter and Year (Unaudited) - Continued
												Q3 2025 vs.		Q3 2025 vs.
($ in thousands)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		Q2 2025		Q3 2024
The Company Amounts
Common Equity Tier 1 Capital		$   496,709		$   483,947		$   470,223		$   458,258		$     446,402		2.64 %		11.27 %
Tier 1 Capital		526,794		513,952		500,149		488,105		476,170		2.50		10.63
Total Capital		627,055		618,793		603,928		591,228		579,664		1.34		8.18
Risk-Weighted Assets		4,867,237		4,890,679		4,823,833		4,852,564		4,816,165		(0.48)		1.06
The Company Ratios
Common Equity Tier 1 Capital to RWA		10.21 %		9.90 %		9.75 %		9.44 %		9.27 %		31 bp		94 bp
Tier 1 Capital to RWA		10.82		10.51		10.37		10.06		9.89		31		94
Total Capital to RWA		12.88		12.65		12.52		12.18		12.04		23		85
Tier 1 Capital to AA (Leverage)		8.86		8.65		8.27		8.02		8.31		22		55
The Bank Amounts
Common Equity Tier 1 Capital		$   559,212		$   546,630		$   534,824		$   521,453		$   509,511		2.30 %		9.75 %
Tier 1 Capital		559,212		546,630		534,824		521,453		509,511		2.30		9.75
Total Capital		620,034		607,235		594,550		580,706		569,317		2.11		8.91
Risk-Weighted Assets		4,864,871		4,888,558		4,821,975		4,851,903		4,808,058		(0.48)		1.18
The Bank Ratios
Common Equity Tier 1 Capital to RWA		11.49 %		11.18 %		11.09 %		10.75 %		10.60 %		31 bp		90 bp
Tier 1 Capital to RWA		11.49		11.18		11.09		10.75		10.60		31		90
Total Capital to RWA		12.75		12.42		12.33		11.97		11.84		32		90
Tier 1 Capital to AA (Leverage)		9.41		9.20		8.84		8.58		8.90		21		51

 

Shore Bancshares, Inc. Consolidated Balance Sheets (Unaudited)
												September 30, 2025		September 30, 2025
												compared to		compared to
($ in thousands, except per share data)		September 30, 2025		June 30, 2025		March 31, 2025		December 31, 2024		September 30, 2024		December 31, 2024		September 30, 2024
ASSETS
Cash and due from banks		$                  62,289		$                  54,512		$                  46,886		$                  44,008		$                  52,363		41.5 %		19.0 %
Interest-bearing deposits with other banks		354,224		130,472		342,120		415,843		131,258		(14.8)		169.9
Cash and cash equivalents		416,513		184,984		389,006		459,851		183,621		(9.4)		126.8
Investment securities:
Available for sale, at fair value		181,720		187,679		179,148		149,212		133,339		21.8		36.3
Held to maturity, net of allowance for credit losses		433,440		459,246		469,572		481,077		484,583		(9.9)		(10.6)
Equity securities, at fair value		6,113		6,010		5,945		5,814		5,950		5.1		2.7
Restricted securities, at cost		20,364		20,412		20,411		20,253		20,253		0.5		0.5
Loans held for sale, at fair value		21,500		34,319		15,717		19,606		26,877		9.7		(20.0)
Loans held for investment		4,882,969		4,827,628		4,777,489		4,771,988		4,733,909		2.3		3.1
Less: allowance for credit losses		(59,554)		(58,483)		(58,042)		(57,910)		(58,669)		2.8		1.5
Loans, net		4,823,415		4,769,145		4,719,447		4,714,078		4,675,240		2.3		3.2
Premises and equipment, net		80,812		81,426		81,692		81,806		81,663		(1.2)		(1.0)
Goodwill		63,266		63,266		63,266		63,266		63,266		—		—
Other intangible assets, net		31,722		33,761		36,033		38,311		40,609		(17.2)		(21.9)
Mortgage servicing rights		5,293		5,396		5,535		5,874		5,309		(9.9)		(0.3)
Right-of-use assets		10,896		11,052		11,709		11,385		11,384		(4.3)		(4.3)
Cash surrender value on life insurance		105,055		105,860		105,040		104,421		103,729		0.6		1.3
Accrued interest receivable		20,408		19,821		20,555		19,570		19,992		4.3		2.1
Deferred income taxes		30,328		30,972		31,428		31,857		32,191		(4.8)		(5.8)
Other assets		27,634		24,525		22,059		24,382		29,698		13.3		(6.9)
TOTAL ASSETS		$             6,278,479		$             6,037,874		$             6,176,563		$             6,230,763		$             5,917,704		0.8		6.1

 

Shore Bancshares, Inc. Consolidated Balance Sheets (Unaudited) - Continued
												September 30, 2025		September 30, 2025
												compared to		compared to
($ in thousands, except per share data)		September 30, 2025		June 30, 2025		March 31, 2025		December 31, 2024		September 30, 2024		December 31, 2024		September 30, 2024
LIABILITIES
Deposits:
Noninterest-bearing		$             1,594,212		$             1,575,120		$             1,565,017		$             1,562,815		$             1,571,393		2.0 %		1.5 %
Interest-bearing checking		851,963		763,309		852,480		978,076		751,533		(12.9)		13.4
Money market and savings		1,790,001		1,691,438		1,800,529		1,805,884		1,634,140		(0.9)		9.5
Time deposits		1,281,132		1,273,285		1,242,319		1,181,561		1,268,657		8.4		1.0
Brokered deposits		10,857		10,806		—		—		—		—
Total deposits		5,528,165		5,313,958		5,460,345		5,528,336		5,225,723		—		5.8
FHLB advances		50,000		50,000		50,000		50,000		50,000		—		—
Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS"), net		30,085		30,005		29,926		29,847		29,768		0.8		1.1
Subordinated debt, net		44,409		44,236		44,053		43,870		43,688		1.2		1.7
Total borrowings		124,494		124,241		123,979		123,717		123,456		0.6		0.8
Lease liabilities		11,395		11,541		12,183		11,844		11,816		(3.8)		(3.6)
Other liabilities		37,218		22,940		27,586		25,800		23,438		44.3		58.8
TOTAL LIABILITIES		5,701,272		5,472,680		5,624,093		5,689,697		5,384,433		0.2		5.9
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value per share		334		334		333		333		333		0.3		0.3
Additional paid in capital		359,939		359,063		358,572		358,112		357,580		0.5		0.7
Retained earnings		221,693		211,400		199,898		190,166		180,884		16.6		22.6
Accumulated other comprehensive loss		(4,759)		(5,603)		(6,333)		(7,545)		(5,526)		(36.9)		(13.9)
TOTAL STOCKHOLDERS' EQUITY		577,207		565,194		552,470		541,066		533,271		6.7		8.2
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$             6,278,479		$             6,037,874		$             6,176,563		$             6,230,763		$             5,917,704		0.8		6.1
Shares of common stock issued and outstanding		33,421,672		33,374,265		33,374,265		33,332,177		33,326,772		0.3		0.3
Book value per common share		$                    17.27		$                    16.94		$                    16.55		$                    16.23		$                    16.00		6.4		7.9

 

Shore Bancshares, Inc. Consolidated Statements of Income By Quarter (Unaudited)
												Q3 2025 vs.		Q3 2025 vs.		Nine Months Ended September 30,
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		Q2 2025		Q3 2024		2025		2024		% Change
INTEREST INCOME
Interest and fees on loans		$        70,930		$        69,695		$        67,647		$        67,428		$        69,157		1.8 %		2.6 %		$      208,273		$      202,203		3.0 %
Interest and dividends on taxable investment securities		5,036		5,331		5,001		4,833		4,962		(5.5)		1.5		15,368		14,611		5.2
Interest and dividends on tax-exempt investment securities		6		6		6		6		6		—		—		18		18		—
Interest on deposits with other banks		1,215		1,588		3,409		4,137		564		(23.5)		115.4		6,212		2,102		195.5
Total interest income		77,187		76,620		76,063		76,404		74,689		0.7		3.3		229,871		218,934		5.0
INTEREST EXPENSE
Interest on deposits		26,474		27,369		28,070		30,363		28,856		(3.3)		(8.3)		81,914		84,938		(3.6)
Interest on short-term borrowings		640		605		598		—		491		5.8		30.3		1,843		2,131		(13.5)
Interest on long-term borrowings		1,418		1,394		1,366		2,030		2,079		1.7		(31.8)		4,178		5,327		(21.6)
Total interest expense		28,532		29,368		30,034		32,393		31,426		(2.8)		(9.2)		87,935		92,396		(4.8)
NET INTEREST INCOME		48,655		47,252		46,029		44,011		43,263		3.0		12.5		141,936		126,538		12.2
Provision for credit losses		2,992		1,528		1,028		780		1,470		95.8		103.5		5,548		3,958		40.2
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		45,663		45,724		45,001		43,231		41,793		(0.1)		9.3		136,388		122,580		11.3
NONINTEREST INCOME
Service charges on deposit accounts		1,599		1,519		1,514		1,606		1,543		5.3		3.6		4,632		4,543		2.0
Trust and investment fee income		898		942		823		857		880		(4.7)		2.0		2,663		2,510		6.1
Mortgage-banking revenue		1,278		2,379		1,240		2,026		1,177		(46.3)		8.6		4,897		3,961		23.6
Interchange credits		1,858		1,788		1,577		1,726		1,711		3.9		8.6		5,223		5,015		4.1
Other noninterest income		2,068		2,690		1,849		2,638		1,976		(23.1)		4.7		6,606		6,265		5.4
Total noninterest income		$          7,701		$          9,318		$          7,003		$          8,853		$          7,287		(17.4)		5.7		$        24,021		$        22,294		7.7

 

Shore Bancshares, Inc. Consolidated Statements of Income By Quarter (Unaudited) - Continued
												Q3 2025 vs.		Q3 2025 vs.		Nine Months Ended September 30,
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		Q2 2025		Q3 2024		2025		2024		% Change
NONINTEREST EXPENSE
Salaries and employee benefits		$       18,642		$       17,742		$       16,440		$       17,209		$       16,523		5.1 %		12.8 %		$      52,824		$      49,370		7.0 %
Occupancy expense		2,406		2,472		2,538		2,474		2,384		(2.7)		0.9		7,416		7,232		2.5
Furniture and equipment expense		892		796		853		760		876		12.1		1.8		2,542		2,681		(5.2)
Software and data processing		5,155		4,819		4,691		4,512		4,419		7.0		16.7		14,665		12,658		15.9
Directors' fees		318		219		348		460		443		45.2		(28.2)		885		1,097		(19.3)
Amortization of other intangible assets		2,039		2,272		2,278		2,298		2,336		(10.3)		(12.7)		6,589		7,482		(11.9)
FDIC insurance premium expense		794		1,023		1,091		1,013		1,160		(22.4)		(31.6)		2,908		3,400		(14.5)
Legal and professional fees		989		1,225		1,613		1,521		1,362		(19.3)		(27.4)		3,827		4,315		(11.3)
Fraud losses		45		83		105		98		673		(45.8)		(93.3)		233		5,237		(95.6)
Other noninterest expense		3,099		3,759		3,790		3,598		3,938		(17.6)		(21.3)		10,647		10,839		(1.8)
Total noninterest expense		34,379		34,410		33,747		33,943		34,114		(0.1)		0.8		102,536		104,311		(1.7)
Income before income taxes		18,985		20,632		18,257		18,141		14,966		(8.0)		26.9		57,873		40,563		42.7
Income tax expense		4,637		5,125		4,493		4,859		3,777		(9.5)		22.8		14,254		9,956		43.2
NET INCOME		$       14,348		$       15,507		$       13,764		$       13,282		$       11,189		(7.5)		28.2		$      43,619		$      30,607		42.5
Weighted average shares outstanding – basic		33,419,291		33,374,265		33,350,869		33,327,243		33,317,739		0.1 %		0.3 %		33,381,568		33,247,210		0.4 %
Weighted average shares outstanding – diluted		33,435,862		33,388,013		33,375,318		33,363,612		33,339,005		0.1 %		0.3 %		33,392,298		33,254,706		0.4 %
Basic net income per common share		$           0.43		$           0.46		$           0.41		$           0.40		$           0.34		(6.5) %		26.5 %		$          1.31		$          0.92		42.4 %
Diluted net income per common share		$           0.43		$           0.46		$           0.41		$           0.40		$           0.34		(6.5) %		26.5 %		$          1.31		$          0.92		42.4 %
Dividends paid per common share		$           0.12		$           0.12		$           0.12		$           0.12		$           0.12		— %		— %		$          0.36		$          0.36		— %

 

Shore Bancshares, Inc. Consolidated Average Balance Sheets (Unaudited)
		Three Months Ended
		September 30, 2025						June 30, 2025						September 30, 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		$          2,615,409		$              38,077		5.78 %		$          2,572,931		$              37,276		5.81 %		$          2,522,170		$              36,376		5.74 %
Residential real estate		1,407,076		19,711		5.56		1,378,940		18,986		5.52		1,332,891		19,315		5.76
Construction		347,574		5,848		6.68		352,803		5,697		6.48		336,209		5,307		6.28
Commercial		219,002		3,380		6.12		224,218		3,658		6.54		212,611		3,763		7.04
Consumer		289,729		3,877		5.31		298,544		4,036		5.42		322,988		4,306		5.30
Credit cards		5,213		118		8.98		6,122		121		7.93		7,132		170		9.48
Total loans		4,884,003		71,011		5.77		4,833,558		69,774		5.79		4,734,001		69,237		5.82
Investment securities
Taxable		663,884		5,036		3.03		683,028		5,331		3.12		655,718		4,962		3.03
Tax-exempt(1)		651		8		4.92		652		8		4.91		657		8		4.87
Interest-bearing deposits		110,443		1,215		4.36		143,171		1,588		4.45		44,935		564		4.99
Total earning assets		5,658,981		77,270		5.42		5,660,409		76,701		5.44		5,435,311		74,771		5.47
Cash and due from banks		49,405						46,620						46,996
Other assets		370,952						372,725						386,700
Allowance for credit losses		(58,764)						(58,369)						(58,515)
Total assets		$          6,020,574						$          6,021,385						$          5,810,492

 

Shore Bancshares, Inc. Consolidated Average Balance Sheets (Unaudited) - Continued
		Three Months Ended
		September 30, 2025						June 30, 2025						September 30, 2024
($ in thousands)		Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Interest-bearing liabilities
Interest-bearing checking		$            689,906		$                5,157		2.97 %		$            720,967		$                5,697		3.17 %		$            581,517		$                5,472		3.74 %
Money market and savings deposits		1,714,161		9,277		2.15		1,747,854		9,580		2.20		1,670,210		10,420		2.48
Time deposits		1,277,403		11,935		3.71		1,258,802		12,000		3.82		1,229,273		12,742		4.12
Brokered deposits		10,891		105		3.82		9,720		92		3.80		25,829		222		3.42
Interest-bearing deposits(4)		3,692,361		26,474		2.84		3,737,343		27,369		2.94		3,506,829		28,856		3.27
FHLB advances		52,391		640		4.85		50,000		605		4.85		83,500		1,116		5.32
Subordinated debt and guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS")(4)		74,363		1,418		7.57		74,102		1,394		7.55		72,946		1,454		7.93
Total interest-bearing liabilities		3,819,115		28,532		2.96		3,861,445		29,368		3.05		3,663,275		31,426		3.41
Noninterest-bearing deposits		1,587,891						1,560,224						1,579,519
Accrued expenses and other liabilities		42,321						40,764						38,543
Stockholders' equity		571,247						558,952						529,155
Total liabilities and stockholders' equity		$          6,020,574						$          6,021,385						$          5,810,492
Net interest spread						2.46 %						2.39 %						2.06 %
Net interest margin						3.42						3.35						3.17
Net interest margin excluding accretion(3)						3.22						3.10						2.84
Cost of funds						2.09						2.17						2.38
Cost of deposits						1.99						2.07						2.26
Cost of debt						6.44						6.46						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 $3.3 million, $4.2 million and $5.0 million of accretion interest on loans for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively.
(4)	Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $280 thousand, $435 thousand and $287 thousand of amortization of deposit discounts and $232 thousand, $232 thousand, and $232 thousand of amortization of borrowing fair value adjustments for the three months ended September 30, 2025, June 30, 2025 and September 30, 2024, respectively.

 

Shore Bancshares, Inc. Consolidated Average Balance Sheets (Unaudited) - Continued
		Nine Months Ended September 30,
		2025						2024
($ in thousands)		Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Earning assets
Loans(1), (2), (3)
Commercial real estate		$              2,576,893		$                 111,244		5.77 %		$              2,521,258		$                 108,118		5.73 %
Residential real estate		1,377,904		57,160		5.55		1,305,215		54,494		5.58
Construction		350,883		17,069		6.50		318,574		14,613		6.13
Commercial		225,322		10,743		6.37		217,684		11,833		7.26
Consumer		297,543		11,971		5.38		328,309		12,843		5.23
Credit cards		6,002		325		7.24		7,654		539		9.41
Total loans		4,834,547		208,512		5.77		4,698,694		202,440		5.76
Investment securities
Taxable		670,304		15,368		3.06		671,875		14,611		2.90
Tax-exempt(1)		652		23		4.70		658		23		4.66
Interest-bearing deposits		188,707		6,212		4.40		56,486		2,102		4.97
Total earning assets		5,694,210		230,115		5.40		5,427,713		219,176		5.39
Cash and due from banks		47,752						47,211
Other assets		373,398						391,106
Allowance for credit losses		(58,477)						(57,877)
Total assets		$              6,056,883						$              5,808,153

 

Shore Bancshares, Inc. Consolidated Average Balance Sheets (Unaudited) - Continued
		Nine Months Ended September 30,
		2025						2024
($ in thousands)		Average Balance		Interest		Yield/Rate		Average Balance		Interest		Yield/Rate
Interest-bearing liabilities
Interest-bearing checking		$                 756,235		$                   17,879		3.16 %		$                 800,258		$                   17,384		2.90 %
Money market and savings deposits		1,753,594		28,872		2.20		1,676,457		30,871		2.46
Time deposits		1,248,405		34,966		3.74		1,196,324		36,116		4.03
Brokered deposits		6,911		197		3.81		16,642		567		4.55
Interest-bearing deposits(4)		3,765,145		81,914		2.91		3,689,681		84,938		3.07
FHLB advances		50,806		1,843		4.85		77,113		3,102		5.37
Subordinated debt and Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS")(4)		74,103		4,178		7.54		72,682		4,356		8.01
Total interest-bearing liabilities		3,890,054		87,935		3.02		3,839,476		92,396		3.21
Noninterest-bearing deposits		1,566,353						1,408,270
Accrued expenses and other liabilities		41,175						38,843
Stockholders' equity		559,301						521,564
Total liabilities and stockholders' equity		$              6,056,883						$              5,808,153
Net interest spread						2.38 %						2.18 %
Net interest margin						3.34						3.12
Net interest margin excluding accretion(3)						3.11						2.83
Cost of funds						2.15						2.35
Cost of deposits						2.05						2.23
Cost of debt						6.44						6.65

____________________________________
(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 $11.3 million and $13.7 million of accretion interest on loans for the nine months ended September 30, 2025 and 2024, respectively.
(4)	Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $1.0 million and $1.1 million of amortization of deposit discounts and $695 thousand and $695 thousand of amortization of borrowing fair value adjustments for the nine months ended September 30, 2025 and 2024, respectively.

 

Shore Bancshares, Inc. Reconciliation of GAAP and Non-GAAP Measures (Unaudited)
												YTD		YTD
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		9/30/2025		9/30/2024
The following reconciles return on average assets, average equity and return on average tangible common equity(1):
Net income		$         14,348		$         15,507		$         13,764		$         13,282		$         11,189		$         43,619		$         30,607
Annualized net income (A)		$         56,924		$         62,198		$         55,821		$         52,839		$         44,513		$         58,318		$         40,884
Net income		$         14,348		$         15,507		$         13,764		$         13,282		$         11,189		$         43,619		$         30,607
Add: Amortization of other intangible assets, net of tax		1,541		1,708		1,717		1,683		1,746		4,966		5,646
Add: Credit card fraud losses, net of tax		—		—		—		—		252		—		3,516
Less: Sale and fair value of held for sale assets, net of tax		—		—		—		(329)		—		—		—
Adjusted net income – non-GAAP		15,889		17,215		15,481		14,636		13,187		48,585		39,769
Annualized adjusted net income – non-GAAP (B)		$         63,038		$         69,049		$         62,784		$         58,226		$         52,461		$         64,958		$         53,122
Net income		$         14,348		$         15,507		$         13,764		$         13,282		$         11,189		$         43,619		$         30,607
Less: income tax expense		4,637		5,125		4,493		4,859		3,777		14,254		9,956
Less: provision for credit losses		2,992		1,528		1,028		780		1,470		5,548		3,958
Pre-tax pre-provision net income - non GAAP		$         21,977		$         22,160		$         19,285		$         18,921		$         16,436		$         63,421		$         44,521
Return on average assets – GAAP		0.95 %		1.03 %		0.91 %		0.86 %		0.77 %		0.96 %		0.70 %
Adjusted return on average assets – non-GAAP		1.05 %		1.15 %		1.02 %		0.94 %		0.90 %		1.07 %		0.91 %
Average assets		$   6,020,574		$    6,021,385		$    6,129,241		$    6,163,497		$    5,810,492		$   6,056,883		$    5,808,153
Average stockholders' equity (C)		$      571,247		$       558,952		$       547,443		$       538,184		$       529,155		$      559,301		$       521,564
Less: Average goodwill and core deposit intangible		(96,074)		(98,241)		(100,514)		(102,794)		(105,136)		(98,260)		(107,623)
Average tangible common equity (D)		$      475,173		$       460,711		$       446,929		$       435,390		$       424,019		$      461,041		$       413,941
Return on average common equity – GAAP (A)/(C)		9.96 %		11.13 %		10.20 %		9.82 %		8.41 %		10.43 %		7.84 %
Return on average tangible common equity – non-GAAP (A)/(D)		11.98 %		13.50 %		12.49 %		12.14 %		10.50 %		12.65 %		9.88 %
Adjusted return on average tangible common equity – non-GAAP (B)/(D)		13.27 %		14.99 %		14.05 %		13.37 %		12.37 %		14.09 %		12.83 %

 

Shore Bancshares, Inc. Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
												YTD		YTD
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024		9/30/2025		9/30/2024
The following reconciles GAAP efficiency ratio and non-GAAP efficiency ratio(2):
Noninterest expense (E)		$         34,379		$         34,410		$         33,747		$         33,943		$         34,114		$      102,536		$       104,311
Less: Amortization of other intangible assets		(2,039)		(2,272)		(2,278)		(2,298)		(2,336)		(6,589)		(7,482)
Less: Credit card fraud losses		—		—		—		—		(337)		—		(4,660)
Adjusted noninterest expense (F)		$         32,340		$         32,138		$         31,469		$         31,645		$         31,441		$         95,947		$         92,169
Net interest income (G)		$         48,655		$         47,252		$         46,029		$         44,011		$         43,263		$      141,936		$       126,538
Add: Taxable-equivalent adjustment		83		81		81		82		82		244		242
Taxable-equivalent net interest income (H)		$         48,738		$         47,333		$         46,110		$         44,093		$         43,345		$      142,180		$       126,780
Noninterest income (I)		$           7,701		$            9,318		$            7,003		$            8,853		$            7,287		$         24,021		$         22,294
Less: Sale and fair value of held for sale assets		—		—		—		(450)		—		—		—
Adjusted noninterest income (J)		$           7,701		$            9,318		$            7,003		$            8,403		$            7,287		$         24,021		$         22,294
Efficiency ratio – GAAP (E)/(G)+(I)		61.00 %		60.83 %		63.64 %		64.21 %		67.49 %		61.78 %		70.09 %
Efficiency ratio – non-GAAP (F)/(H)+(J)		57.30 %		56.73 %		59.25 %		60.28 %		62.10 %		57.73 %		61.83 %
Net operating expense to average assets – GAAP		1.76 %		1.67 %		1.77 %		1.62 %		1.84 %		1.73 %		1.89 %
Net operating expense to average assets – non-GAAP		1.62 %		1.52 %		1.62 %		1.50 %		1.65 %		1.59 %		1.61 %

 

Shore Bancshares, Inc. Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
($ in thousands, except per share data)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024
The following reconciles book value per common share and tangible book value per common share(1):
Stockholders' equity (K)		$            577,207		$            565,194		$            552,470		$            541,066		$            533,271
Less: Goodwill and core deposit intangible		(94,988)		(97,027)		(99,299)		(101,577)		(103,875)
Tangible common equity (L)		$            482,219		$            468,167		$            453,171		$            439,489		$            429,396
Shares of common stock outstanding (M)		33,421,672		33,374,265		33,374,265		33,332,177		33,326,772
Book value per common share – GAAP (K)/(M)		$                 17.27		$                 16.94		$                 16.55		$                 16.23		$                 16.00
Tangible book value per common share – non-GAAP (L)/(M)		$                 14.43		$                 14.03		$                 13.58		$                 13.19		$                 12.88
The following reconciles equity to assets and tangible common equity to tangible assets(1):
Stockholders' equity (N)		$            577,207		$            565,194		$            552,470		$            541,066		$            533,271
Less: Goodwill and core deposit intangible		(94,988)		(97,027)		(99,299)		(101,577)		(103,875)
Tangible common equity (O)		$            482,219		$            468,167		$            453,171		$            439,489		$            429,396
Assets (P)		$         6,278,479		$         6,037,874		$         6,176,563		$         6,230,763		$         5,917,704
Less: Goodwill and core deposit intangible		(94,988)		(97,027)		(99,299)		(101,577)		(103,875)
Tangible assets (Q)		$         6,183,491		$         5,940,847		$         6,077,264		$         6,129,186		$         5,813,829
Period-end equity to assets – GAAP (N)/(P)		9.19 %		9.36 %		8.94 %		8.68 %		9.01 %
Period-end tangible common equity to tangible assets – non-GAAP (O)/(Q)		7.80 %		7.88 %		7.46 %		7.17 %		7.39 %

____________________________________
(1)	Management believes that reporting tangible common 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)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024
Common equity		$            577,207		$             565,194		$             552,470		$             541,066		$             533,271
Goodwill(1)		(61,176)		(61,238)		(61,300)		(61,362)		(61,397)
Core deposit intangible(2)		(24,041)		(25,573)		(27,280)		(28,991)		(30,572)
DTAs that arise from net operating loss and tax credit carryforwards		(40)		(39)		—		—		(426)
Accumulated other comprehensive loss		4,759		5,603		6,333		7,545		5,526
Common Equity Tier 1 Capital		496,709		483,947		470,223		458,258		446,402
TRUPS		30,085		30,005		29,926		29,847		29,768
Tier 1 Capital		526,794		513,952		500,149		488,105		476,170
Allowable reserve for credit losses and other Tier 2 adjustments		60,852		60,605		59,726		59,253		59,806
Subordinated debt		39,409		44,236		44,053		43,870		43,688
Total Capital		$            627,055		$             618,793		$             603,928		$             591,228		$             579,664
Risk-Weighted Assets ("RWA")		$        4,867,237		$         4,890,679		$         4,823,833		$         4,852,564		$         4,816,165
Average Assets ("AA")		5,942,911		5,943,124		6,050,310		6,083,760		5,729,576
Common Equity Tier 1 Capital to RWA		10.21 %		9.90 %		9.75 %		9.44 %		9.27 %
Tier 1 Capital to RWA		10.82		10.51		10.37		10.06		9.89
Total Capital to RWA		12.88		12.65		12.52		12.18		12.04
Tier 1 Capital to AA (Leverage)		8.86		8.65		8.27		8.02		8.31

 

Shore Bancshares, Inc. Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
Regulatory Capital and Ratios for the Bank
($ in thousands)		Q3 2025		Q2 2025		Q1 2025		Q4 2024		Q3 2024
Common equity		$            639,670		$             627,838		$             617,071		$             604,261		$             595,954
Goodwill(1)		(61,176)		(61,238)		(61,300)		(61,362)		(61,397)
Core deposit intangible(2)		(24,041)		(25,573)		(27,280)		(28,991)		(30,572)
Accumulated other comprehensive loss		4,759		5,603		6,333		7,545		5,526
Common Equity Tier 1 Capital		559,212		546,630		534,824		521,453		509,511
Tier 1 Capital		559,212		546,630		534,824		521,453		509,511
Allowable reserve for credit losses and other Tier 2 adjustments		60,822		60,605		59,726		59,253		59,806
Total Capital		$            620,034		$             607,235		$             594,550		$             580,706		$             569,317
Risk-Weighted Assets ("RWA")		$        4,864,871		$         4,888,558		$         4,821,975		$         4,851,903		$         4,808,058
Average Assets ("AA")		5,939,890		5,940,411		6,050,130		6,077,540		5,721,995

___________________________________

(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)		September 30, 2025		% of Total Loans		June 30, 2025		% of Total Loans		March 31, 2025		% of Total Loans		December 31, 2024		% of Total Loans		September 30, 2024		% of Total Loans
Commercial real estate		$             2,642,601		54.1 %		$             2,603,974		54.0 %		$             2,544,107		53.3 %		$             2,557,806		53.6 %		$             2,535,004		53.6 %
Residential real estate		1,383,348		28.3		1,349,010		27.9		1,325,858		27.8		1,329,406		27.9		1,312,375		27.7
Construction		352,116		7.2		350,053		7.3		366,218		7.7		335,999		7.0		337,113		7.1
Commercial		221,598		4.5		224,092		4.6		234,499		4.9		237,932		5.0		225,083		4.8
Consumer		278,242		5.7		294,239		6.1		300,007		6.3		303,746		6.4		317,149		6.7
Credit cards		5,064		0.1		6,260		0.1		6,800		0.1		7,099		0.2		7,185		0.2
Total loans		4,882,969		100.0 %		4,827,628		100.0 %		4,777,489		100.0 %		4,771,988		100.0 %		4,733,909		100.0 %
Less: allowance for credit losses		(59,554)				(58,483)				(58,042)				(57,910)				(58,669)
Total loans, net		$             4,823,415				$             4,769,145				$             4,719,447				$             4,714,078				$             4,675,240

 

Shore Bancshares, Inc. Classified Assets and Nonperforming Assets (Unaudited)   Classified assets and nonperforming assets are summarized as follows:
($ in thousands)		September 30, 2025		June 30, 2025		March 31, 2025		December 31, 2024		September 30, 2024
Classified loans
Substandard		$                   48,470		$                   19,930		$                   19,434		$                   24,679		$                   22,798
Total classified loans		48,470		19,930		19,434		24,679		22,798
Special mention loans		70,997		65,564		33,456		33,519		14,385
Total classified and special mention loans		$                 119,467		$                   85,494		$                   52,890		$                   58,198		$                   37,183
Classified loans		$                   48,470		$                   19,930		$                   19,434		$                   24,679		$                   22,798
Other real estate owned		120		179		179		179		179
Repossessed assets		3,432		2,457		2,429		3,315		306
Total classified assets		$                   52,022		$                   22,566		$                   22,042		$                   28,173		$                   23,283
Classified assets to total assets		0.83 %		0.37 %		0.36 %		0.45 %		0.39 %
Nonaccrual loans		$                   24,378		$                   16,782		$                   15,402		$                   21,008		$                   14,844
90+ days delinquent accruing		153		215		894		294		454
Other real estate owned ("OREO")		120		179		179		179		179
Repossessed property		3,432		2,457		2,429		3,315		306
Total nonperforming assets		$                   28,083		$                   19,633		$                   18,904		$                   24,796		$                   15,783
Accruing borrowers experiencing financial difficulty loans ("BEFD")		6,704		6,709		1,356		1,662		—
Total nonperforming assets and BEFDs modifications		$                   34,787		$                   26,342		$                   20,260		$                   26,458		$                   15,783
Nonperforming assets to total assets		0.45 %		0.33 %		0.31 %		0.40 %		0.27 %
Total assets		$             6,278,479		$             6,037,874		$             6,176,563		$             6,230,763		$             5,917,704

 

 

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SOURCE Shore Bancshares, Inc.

FAQ

What did Shore Bancshares (SHBI) report for Q3 2025 net income?

Shore Bancshares reported $14.3M net income (Q3 2025), or $0.43 per diluted share.

How did SHBI's net interest income and NIM perform in Q3 2025?

Net interest income was $48.7M and NIM expanded to 3.42% in Q3 2025.

What caused Shore Bancshares' Q3 2025 earnings decline versus Q2 2025?

The quarter-over-quarter decline was driven by lower noninterest income and a higher provision from a large marine loan write-off.

How did Shore Bancshares' asset quality change by 9/30/2025?

Nonperforming assets increased to 0.45% of assets and classified assets rose to 0.83% of assets as of 9/30/2025.

What is SHBI's capital and liquidity position at 9/30/2025?

Tangible common equity ratio was 7.80%, Tier 1 ratio 10.82%, and available liquidity approximately $1.37B.

Did Shore Bancshares' book value per share change in Q3 2025?

Yes, book value per share increased to $17.27 at September 30, 2025 from $16.94 at June 30, 2025.