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Shore Bancshares Inc

Shore Bancshares, Inc. Reports 2025 Fourth Quarter and Annual Results

EASTON, Md. , Jan. 28, 2026 /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 fourth quarter of 2025 of $15.9 million, or $0.48 per diluted common share, compared to net income of $14.3 million, or $0.43 per diluted common share, for the third quarter of 2025, and net income of $13.3 million, or $0.40 per diluted common share, for the fourth quarter of 2024.

Fourth  Quarter and Full-Year 2025 Highlights

  • Net Income – Net income for the fourth quarter of 2025 increased $1.5 million to $15.9 million from $14.3 million in the third quarter of 2025. Net income increased primarily due to higher net interest income of $1.8 million and higher noninterest income of $966 thousand driven by one-time insurance proceeds, partially offset by higher noninterest expense of $1.1 million. Net income for the year ended December 31, 2025 was $59.5 million, compared to $43.9 million for the year ended December 31, 2024. The annual increase was primarily driven by an increase in net interest income due to loans repricing favorably, coupled with lower cost of deposits during the period. The favorable changes were offset by a higher provision for loan losses, driven by increased charge-offs in 2025.
  • Return on Average Assets ("ROAA") – The Company reported ROAA of 1.02% for the fourth quarter of 2025, compared to 0.95% for the third quarter of 2025 and 0.86% for the fourth quarter of 2024. Non-U.S. generally accepted accounting principles ("GAAP") adjusted ROAA([1]) was 1.11% for the fourth quarter of 2025, compared to 1.05% for the third quarter of 2025 and 0.94% for the fourth quarter of 2024.
  • Net Interest Margin ("NIM") – Net interest income for the fourth quarter of 2025 increased $1.8 million to $50.4 million compared to the third quarter of 2025. NIM increased 1 basis point ("bps") to 3.43% during the fourth quarter of 2025 compared to the third quarter of 2025. NIM excluding accretion(1) increased for the comparable periods from 3.22% to 3.24%. Excluding accretion interest, loan yields increased 2 bps and funding costs decreased 4 bps for the comparable periods. Net interest income increased due to modest loan growth and higher yields on investments, coupled with a lower cost of deposits. These favorable changes were partially offset by lower yields on interest-bearing deposits with other institutions.
  • Book Value per Share – Book value per share increased to $17.65 at December 31, 2025 from $17.27 at September 30, 2025 and $16.23 at December 31, 2024.
  • Asset Quality – Nonperforming assets were 0.69% of total assets at December 31, 2025, an increase from 0.45% at September 30, 2025 and 0.40% at December 31, 2024. Classified assets were 0.96% of total assets at December 31, 2025, an increase when compared to 0.83% at September 30, 2025 and 0.45% at December 31, 2024. The allowance for credit losses ("ACL") was $58.8 million at December 31, 2025, compared to $59.6 million at September 30, 2025 and $57.9 million at December 31, 2024. The ACL as a percentage of loans decreased to 1.20% at December 31, 2025, compared to 1.22% at September 30, 2025 and 1.21% at December 31, 2024.
  • Operating Leverage – The efficiency ratio for the fourth quarter of 2025 was 60.06% compared to 61.00% in the third quarter of 2025 and 64.21% for the fourth quarter of 2024. The non-GAAP efficiency ratio(1), which excludes amortization of intangibles was 56.59% for the fourth quarter of 2025, compared to 57.30% for the third quarter of 2025 and 60.28% for the fourth quarter of 2024. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.

"Our fourth-quarter and full year results underscore the strength and momentum of the bank," stated James ("Jimmy") Burke, President and Chief Executive Officer. "We delivered meaningful quarterly and annual improvements in net income, net interest income, ROAA, and NIM, while controlling expenses and driving operating leverage. Nonperforming and classified assets have increased but overall asset quality remains solid and is supported by strong collateral and reserves.

As we enter 2026, we remain confident in our ability to strengthen core profitability and deliver sustainable long‑term value for our shareholders."

Balance Sheet Review

Total assets were $6.26 billion at December 31, 2025, an increase of $28.1 million, or 0.5%, when compared to $6.23 billion at December 31, 2024. The increase was primarily due to an increase in our loan portfolio of $128.3 million and an increase in our investment securities portfolio of $5.3 million, which were partially offset by a decrease in cash and cash equivalents of $104.3 million.   The decrease in cash and cash equivalents was primarily driven by loan growth. Total assets decreased $19.7 million, or 0.3%, from $6.28 billion when compared to September 30, 2025.

Non-owner occupied commercial real estate ("CRE") loans were $2.15 billion and $2.08 billion, and as a percentage of the Bank's Tier 1 Capital + ACL were 343% and 360% at December 31, 2025 and 2024, respectively.

CRE loans (excluding land and construction) at December 31, 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 (excluding land and construction) at December 31, 2025.

December 31, 2025



Owner Occupied


Non-Owner Occupied

 ($ in thousands)


Average LTV(1)


Average Loan Size


Loan Balance(2)


Average LTV(1)


Average Loan Size


Loan Balance(2)

Office, medical


42.28 %


$                594


$          30,300


49.55 %


$             1,796


$          98,803

Office, govt. or govt. contractor


52.80


590


4,722


56.41


2,924


46,780

Office, other


47.74


472


88,800


47.17


1,342


216,114

Office, total


46.80


501


123,822


48.35


1,559


361,697

Retail


49.74


596


64,988


48.36


2,595


485,267

Multi-family (5+ units)


—


—


—


54.30


2,367


262,788

Hotel/motel


—


—


—


44.03


4,088


196,211

Industrial/warehouse


46.88


657


94,538


48.13


1,472


189,937

Commercial-improved


42.04


1,186


217,092


49.36


1,274


156,753

Marine/boat slips


30.58


1,493


38,812


36.85


1,484


7,421

Restaurant


48.38


985


55,149


49.58


1,039


43,635

Church


34.37


878


59,690


13.26


2,368


2,368

Land/lot loans


46.47


582


1,164


49.68


1,339


1,339

Other


40.20


1,420


149,429


40.85


1,272


131,896

Total CRE loans, gross


43.61


843


$        804,684


47.68


1,886


$     1,839,312



(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.

The office CRE loan portfolio, which includes owner occupied and non-owner occupied CRE loans, was $485.9 million, or 9.9% of total loans at December 31, 2025. The office CRE loan portfolio included loans to medical tenants of $129.1 million, or 26.6% of the total office CRE loan portfolio, at December 31, 2025. The office CRE loan portfolio also included loans to government or government contractor tenants of $51.5 million, or 10.6% of the total office CRE loan portfolio for the same period. At December 31, 2025, the average loan debt-service coverage ratio on the office CRE loan portfolio was 1.7x and the average LTV was 47.55%.

The 481 loans in the office CRE portfolio at December 31, 2025 had an average loan size of $1.0 million and a median loan size of $365 thousand. LTV estimates for the office CRE portfolio at December 31, 2025 are summarized below and LTV collateral values are based on the most recent appraisal, which may vary from the appraised value at loan origination.

LTV Range ($ in thousands)


Loan Count


 Loan Balance


% of Office CRE

Less than or equal to 50%


244


$                    170,536


35.0 %

Greater than 50% and less than or equal to 60%


73


114,510


23.6

Greater than 60% and less than or equal to 70%


92


149,203


30.7

Greater than 70% and less than or equal to 80%


58


42,608


8.8

Greater than 80%


14


9,083


1.9

Total


481


$                    485,940


100.0 %

There were 17 office CRE loans with balances greater than $5.0 million, totaling $166.1 million at December 31, 2025, compared to 18 office CRE loans totaling $164.5 million at December 31, 2024. The increase this portfolio segment was the result of normal amortization, the payoff of a $5.6 million loan, the change in purpose of collateral of an $11.8 million loan from office to school, and a loan opened for $25 million. Of the office CRE portfolio balance, 80.5% was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 97.1% was secured by properties with five stories or less. Of the office CRE loans, $30.7 million were classified as special mention or substandard at December 31, 2025. In the fourth quarter of 2025 there was a charge-off of $2.6 million related to the office CRE portfolio. There were no other office CRE portfolio charge-offs during 2025.

Nonperforming assets were $43.2 million and $28.1 million, or 0.69% and 0.45% of total assets, as of December 31, 2025 and September 30, 2025, respectively. The balance of nonperforming assets increased $15.1 million in the fourth quarter, primarily due to commercial real estate and consumer loans. When comparing December 31, 2025 to December 31, 2024, nonperforming assets increased $18.4 million, primarily due to an increase in nonaccrual loans of $19.0 million and an decrease in repossessed marine and auto loans of $502 thousand. Substandard loans, which include nonaccrual loans, accruing loans and accruing loans 90 days or more past due were $57.4 million at December 31, 2025 compared to $48.5 million at September 30, 2025 and $24.7 million at December 31, 2024. The increase was primarily due to several commercial non-owner occupied real estate loans that were downgraded during the current period. All of these loans are well secured by collateral and required minimal individual reserves as of December 31, 2025.

Total deposits increased $5.7 million from September 30, 2025 to $5.53 billion at December 31, 2025 and increased $5.5 million when compared to December 31, 2024. The increase in total deposits year-to-date was primarily due to an increase in time deposits of $85.9 million, an increase in noninterest-bearing accounts of $25.1 million, an increase in brokered deposits of $10.9 million and an increase in money market and savings accounts of $9.0 million. These increases were partially offset by a decrease in interest-bearing checking deposits of $125.5 million. Core deposits, which exclude municipal deposits, increased by $154.8 million, or 3.8%, 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 $5.53 billion at December 31, 2025, compared to $5.58 billion at September 30, 2025. FHLB advances were $50.0 million at September 30, 2025, which was repaid in the fourth quarter of 2025. Brokered deposits were $10.9 million at December 31, 2025 and September 30, 2025. Total reciprocal deposits were $1.52 billion and $1.48 billion at December 31, 2025 and September 30, 2025, respectively.

Uninsured deposits were $937.2 million, or 16.9% of total deposits, at December 31, 2025. Uninsured deposits, excluding deposits secured with pledged collateral, were $786.5 million, or 14.2% of total deposits, at December 31, 2025. At December 31, 2025, the available liquidity was $1.42 billion, including $355.6 million in cash and cash equivalents, $1.07 billion in secured borrowing capacity at the FHLB and other correspondent banks, and $95.0 million in unsecured lines of credit.

Total stockholders' equity increased $48.8 million, or 9.0%, 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 December 31, 2025 and 2024, the ratio of total equity to total assets was 9.42% and 8.68%, respectively, and the ratio of total tangible equity to total tangible assets([2]) was 8.06% and 7.17%, respectively. The Company's tangible common equity ratio at December 31, 2025 was 8.06% compared to 7.17% at December 31, 2024. The Company's Tier 1 and Total Risk-Based Capital Ratios at December 31, 2025 were 11.15% and 13.61%, respectively.

Review of Quarterly Financial Results

Net interest income was $50.4 million for the fourth quarter of 2025, compared to $48.7 million for the third quarter of 2025 and $44.0 million for the fourth quarter of 2024. The increase in net interest income when compared to the third quarter of 2025 was primarily due to an increase in interest income on deposits at other banks of $1.6 million, an increase in interest income on loans of $1.4 million and a decrease in interest expense on short-term borrowings of $394 thousand. These favorable changes were partially offset by an increase in interest expense on deposits of $815 thousand and an increase in interest expense of long-term borrowings of $763 thousand. The increase in interest expense on long-term borrowings is due to a new debt issuance of $60.0 million during the quarter, which replaced $45 million of subordinated debt that was redeemed at the end of the quarter. The increase in net interest income was $6.4 million when compared to the fourth quarter of 2024, and was primarily due to an increase in interest and fees on loans of $4.9 million and a decrease in interest expense on deposits of $3.1 million. These favorable changes were partially offset by a decrease in interest on deposits with other banks of $1.3 million, an increase in interest expense on short-term borrowings of $246 thousand, and an increase in interest expense on long-term borrowings of $151 thousand.

The Company's NIM increased to 3.43% for the fourth quarter of 2025 from 3.42% for the third quarter of 2025, primarily due to higher core interest income. NIM excluding accretion increased for the comparable periods from 3.22% to 3.24%. Excluding accretion interest income, loan yields increased 2 bps and funding costs decreased 4 bps for the comparable periods. Interest expense for the fourth quarter of 2025 increased $1.2 million compared to the third quarter of 2025, primarily due to write-offs of merger-related interest rate marks on certain deposit products. The Company's NIM increased to 3.43% for the fourth quarter of 2025 from 3.03% for the fourth quarter of 2024. The Company's average interest-earning asset yield increased to 5.45% for the fourth quarter of 2025 from 5.25% for the fourth quarter of 2024, while the average cost of funds decreased 20 bps to 2.11% from 2.31% for the same periods.

The provision for credit losses was $2.8 million for the three months ended December 31, 2025. The comparable amounts were $3.0 million for the three months ended September 30, 2025 and $780 thousand for the three months ended December 31, 2024. The decrease in the provision for credit losses for the fourth quarter of 2025 compared to the third quarter of 2025 was due to lower reserves resulting from favorable economic conditions, partially offset by charge-offs driven by a large commercial real estate loan write-down. Coverage ratios decreased to 1.20% at December 31, 2025 from 1.22% at September 30, 2025, and decreased from 1.21% at December 31, 2024. Net charge-offs increased to $3.6 million for the fourth quarter of 2025 compared to $1.8 million for the third quarter of 2025 and $1.3 million for the fourth quarter of 2024. The increase was driven by a large commercial real estate write-down in the fourth quarter 2025.

Total noninterest income for the fourth quarter of 2025 was $8.7 million, an increase of $1.0 million from $7.7 million for the third quarter of 2025, and a decrease of $186 thousand from $8.9 million for the fourth quarter of 2024. When comparing the fourth quarter of 2025 to the third quarter of 2025, the increase in noninterest income was primarily due to a one-time receipt of insurance proceeds. Comparing the fourth quarter of 2025 to the fourth quarter of 2024, the decrease in noninterest income was primarily due a decrease in mortgage banking revenue, partially offset by an increase in trust and investment fee income, an increase in interchange credits and the absence of the one-time gain on sale of real property in 2024.

Total noninterest expense of $35.5 million for the fourth quarter of 2025 increased $1.1 million compared to $34.4 million for the third quarter of 2025, and increased $1.6 million compared to $33.9 million for the fourth quarter of 2024. The increase from the third quarter of 2025 was primarily due to higher professional service fees of $248 thousand and other noninterest expense of $689 thousand related to writedown of repossessed assets. The increase from the fourth quarter of 2024 was primarily due to higher salaries and benefits expense of $1.4 million and higher software and data processing costs of $685 thousand, partially offset by lower amortization of other intangible assets of $298 thousand and lower legal and professional services of $284 thousand.

The efficiency ratio for the fourth quarter of 2025 when compared to the third quarter of 2025 and the fourth quarter of 2024 was 60.06%, 61.00% and 64.21%, respectively. Non-GAAP efficiency ratios([3]) for the same periods were 56.59%, 57.30% and 60.28%, respectively.

Review of Full-Year Financial Results

Net interest income for the year ended December 31, 2025 was $192.4 million, an increase of $21.8 million, or 12.8%, when compared to the year ended December 31, 2024. The increase in net interest income was primarily due to an increase in total interest income of $14.7 million, or 5.0%, which included an increase in interest and fees on loans of $11.0 million, or 4.1%, an increase in interest on deposits with other banks of $2.8 million, or 44.6%, and an increase in interest income on taxable investments of $934 thousand. The increase in interest and fees on loans was primarily due to the increase in the average balance of loans of $130.3 million, or 2.8%. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $6.1 million and the decrease in interest expense on borrowings of $1.0 million was as a result of lower average FHLB advances and associated rates during the year.

The Company's NIM increased from 3.10% for the year ended December 31, 2024 to 3.36% for the year ended December 31, 2025. Margins were higher due to a $211.0 million increase in interest-earning asset balances and a 5 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 $49.9 million was offset by a 20 basis point decrease in the associated rates paid, as well as a $27.2 million decrease in the average balance of FHLB advances and a 44 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 21 basis points and 27 basis points for the year ended December 31, 2025 and 2024, respectively, which resulted in NIM excluding accretion of 3.15% and 2.83% for the same periods.

The provision for credit losses for the year ended December 31, 2025 and 2024 was $8.4 million and $4.7 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 year ended December 31, 2025 were $6.6 million compared to $4.1 million for the year ended December 31, 2024.

Total noninterest income for the year ended December 31, 2025 increased $1.5 million, or 4.9%, when compared to the same period in 2024. The increase was primarily due to a $344 thousand increase in interchange credits, a $338 thousand increase in trust and investment fee income, and a $622 thousand increase in other noninterest income.

Total noninterest expense for the year ended December 31, 2025 decreased $219 thousand, or 0.2%, 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 that occurred in 2024 and lower amortization of intangible assets of $1.2 million, which was partially offset by higher salaries and employee benefit expenses of $4.8 million and a $2.4 million increase in software and data processing expense in year ended December 31, 2025.

The efficiency ratio for the year ended December 31, 2025 was 61.33% compared to 68.55% for the year ended December 31, 2024. Non-GAAP efficiency ratios for the same periods were 57.43% and 61.43%, respectively. The net operating expense ratio, which is noninterest expense less noninterest income divided by average assets, was 1.73% for the year ended December 31, 2025, compared to 1.82% for the year ended December 31, 2024. The non-GAAP net operating expense ratio([4]), which excludes core deposit intangible amortization and non-recurring activity, was 1.59% for the year ended December 31, 2025, compared to 1.58% for the year ended December 31, 2024.

Dividend Schedule

Beginning this quarter, the Company's Board of Directors will consider regular dividend declarations in February, May, August and November, with dividends, when declared, payable in March, June, September and December, which is one month later than in the past.

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

This news release may contain statements relating to future events or our future results that are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "expect," "anticipate," "plan," "estimate," "intend," "potential," "target," "plan," "goal," or words of similar meaning, or future or conditional verbs such as "could," "would," or "may." Forward-looking statements include statements of our goals, intentions, or expectations; statements regarding our business plans, prospects, growth, or operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.

Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. The factors that could cause actual results to differ materially from those expressed in such forward-looking statements include, but are not limited to, the following: local, regional and global business, economic and political conditions and geopolitical events; changes in laws, rules and regulatory requirements, including capital and liquidity requirements; changes in consumer and business confidence, investor sentiment, and consumer spending and savings behavior; changes in the level of inflation; changes in monetary and fiscal policies; changes in trade policies, including the imposition of tariffs and retaliatory responses; changes in the demand for loans, deposits, and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; changes in FDIC assessments; changes in the interest rate environment; changes in income tax laws and regulations; our ability to manage effectively our capital and liquidity; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; changes in credit ratings assigned to us; competitive pressures among financial services companies; technology changes instituted by us, our counterparties, or competitors; the ability to attract, develop, and retain qualified employees; change in federal government enforcement of federal laws affecting the cannabis industry; our ability to maintain the security of our financial, accounting, technology, data processing and other operational systems and facilities; our ability to effectively defend ourselves against cyber-attacks and other attempts by unauthorized parties to access our information or information of our customers or to disrupt our systems; our ability to withstand disruptions that may be caused by any failure of our operational systems or those of third parties; our ability to control expenses; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; and the impact of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, epidemics or pandemics, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond our control. The Company provides greater detail regarding some of these factors in its Annual Report on Form 10-K for the year ended December 31, 2024, including in the Risk Factors section of that report, and in its other SEC reports. Forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

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

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited)














Q4 2025 vs.


Q4 2025 vs.


Year Ended December 31,

($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


Q3 2025


Q4 2024


2025


2024


2025 vs. 2024

PROFITABILITY FOR THE PERIOD





















Taxable-equivalent net interest income


$        50,533


$        48,738


$        47,333


$        46,110


$        44,093


3.7 %


14.6 %


$      192,712


$      170,874


12.8 %

Less: Taxable-equivalent adjustment


92


83


81


81


82


10.8


12.2


335


325


3.1

Net interest income


50,441


48,655


47,252


46,029


44,011


3.7


14.6


192,377


170,549


12.8

Provision for credit losses


2,827


2,992


1,528


1,028


780


(5.5)


262.4


8,375


4,738


76.8

Noninterest income


8,667


7,701


9,318


7,003


8,853


12.5


(2.1)


32,688


31,147


4.9

Noninterest expense


35,499


34,379


34,410


33,747


33,943


3.3


4.6


138,035


138,254


(0.2)

Income before income taxes


20,782


18,985


20,632


18,257


18,141


9.5


14.6


78,655


58,704


34.0

Income tax expense


4,895


4,637


5,125


4,493


4,859


5.6


0.7


19,149


14,815


29.3

NET INCOME


$        15,887


$        14,348


$        15,507


$        13,764


$        13,282


10.7


19.6


$        59,506


$        43,889


35.6






















Adjusted net income – non-GAAP(1)


$        17,416


$        15,889


$        17,215


$        15,481


$        14,636


9.6 %


19.0 %


$        66,004


$        54,348


21.4 %

Pre-tax pre-provision net income – non-GAAP(1)


$        23,609


$        21,977


$        22,160


$        19,285


$        18,921


7.4 %


24.8 %


$        87,030


$        63,442


37.2 %






















Return on average assets – GAAP


1.02 %


0.95 %


1.03 %


0.91 %


0.86 %


              7 bp


             16 bp


0.98 %


0.74 %


             24 bp

Adjusted return on average assets – non-GAAP(1)


1.11


1.05


1.15


1.02


0.94


6


17


1.08


0.92


16

Return on average common equity – GAAP


10.79


9.96


11.13


10.20


9.82


83


97


10.52


8.35


217

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


14.10


13.27


14.99


14.05


13.67


83


43


14.09


12.21


188

Net interest spread


2.48


2.46


2.39


2.30


2.02


2


46


2.40


2.14


26

Net interest margin


3.43


3.42


3.35


3.24


3.03


1


40


3.36


3.10


26

Efficiency ratio – GAAP


60.06


61.00


60.83


63.64


64.21


(94)


(415)


61.33


68.55


(722)

Efficiency ratio – non-GAAP(1)


56.59


57.30


56.73


59.25


60.28


(71)


(369)


57.43


61.43


(400)

Noninterest income to average assets


0.55


0.51


0.62


0.46


0.57


4


(2)


0.54


0.53


1

Noninterest expense to average assets


2.27


2.27


2.29


2.23


2.19


—


8


2.26


2.34


(8)

Net operating expense to average assets – GAAP


1.72


1.76


1.67


1.77


1.62


(4)


10


1.73


1.82


(9)

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


1.59


1.62


1.52


1.62


1.50


(3)


9


1.59


1.58


1






















PER SHARE DATA





















Basic net income per common share


$           0.48


$           0.43


$           0.46


$           0.41


$           0.40


11.6 %


20.0 %


$           1.78


$           1.32


34.8 %

Diluted net income per common share


0.48


0.43


0.46


0.41


0.40


11.6


20.0


1.78


1.32


34.8

Dividends paid per common share


0.12


0.12


0.12


0.12


0.12


—


—


0.48


0.48


—

Book value per common share at period end


17.65


17.27


16.94


16.55


16.23


2.2


8.7


17.65


16.23


8.7

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


14.87


14.43


14.03


13.58


13.19


3.0


12.7


14.87


13.19


12.7

Common share market value at period end


17.68


16.41


15.72


13.54


15.85


7.7


11.5


17.68


15.85


11.5

Common share intraday price:





















High


$          19.22


$          17.67


$          15.88


$          17.24


$          17.61


8.8 %


9.1 %


19.22


17.61


9.1 %

Low


14.93


14.96


11.47


13.15


13.21


(0.2)


13.0


11.47


10.06


14.0

____________________________________

(1)

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

 

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited) – Continued














Q4 2025 vs.


Q4 2025 vs.


Year Ended December 31,

($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


Q3 2025


Q4 2024


2025


2024


2025 vs. 2024

AVERAGE BALANCE SHEET DATA





















Loans


$   4,909,619


$   4,884,003


$   4,833,558


$   4,784,991


$   4,796,245


0.5 %


2.4 %


$   4,853,469


$   4,723,215


2.8 %

Investment securities


653,639


664,535


683,680


664,655


655,610


(1.6)


(0.3)


666,591


668,279


(0.3)

Earning assets


5,843,816


5,658,981


5,660,409


5,768,080


5,798,454


3.3


0.8


5,731,919


5,520,904


3.8

Assets


6,206,753


6,020,574


6,021,385


6,129,241


6,163,497


3.1


0.7


6,094,659


5,896,931


3.4

Deposits


5,452,082


5,280,252


5,297,567


5,417,514


5,461,583


3.3


(0.2)


5,361,893


5,188,812


3.3

FHLB advances


20,108


52,391


50,000


50,000


50,000


(61.6)


(59.8)


43,068


70,298


(38.7)

Subordinated debt & TRUPS


104,752


74,363


74,102


73,840


73,578


40.9


42.4


81,828


72,907


12.2

Stockholders' equity


584,209


571,247


558,952


547,443


538,184


2.3


8.6


565,579


525,742


7.6






















CREDIT QUALITY DATA





















Net charge-offs


$          3,619


$          1,825


$            649


$            554


$          1,333


98.3 %


171.5 %


$          6,647


$          4,072


63.2 %






















Nonaccrual loans


$        39,960


$        24,378


$        16,782


$        15,402


$        21,008


63.9 %


90.2 %







Loans 90 days past due and still accruing


255


153


215


894


294


66.7


(13.3)







Other real estate owned and repossessed property


2,992


3,552


2,636


2,608


3,494


(15.8)


(14.4)







Total nonperforming assets


$        43,207


$        28,083


$        19,633


$        18,904


$        24,796


53.9


74.2







 

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited) – Continued














Q4 2025 vs.


Q4 2025 vs.


Year Ended December 31,

($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


Q3 2025


Q4 2024


2025


2024


2025 vs. 2024

CAPITAL AND CREDIT QUALITY RATIOS





















Period-end equity to assets – GAAP


9.42 %


9.19 %


9.36 %


8.94 %


8.68 %


             23 bp


             74 bp







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


8.06


7.80


7.88


7.46


7.17


26


89




























Annualized net charge-offs to average loans


0.29 %


0.15 %


0.05 %


0.05 %


0.11 %


             14 bp


             18 bp


0.14 %


0.09 %


                5                bp






















Allowance for credit losses as a percent of:





















Period-end loans


1.20 %


1.22 %


1.21 %


1.21 %


1.21 %


             (2) bp


             (1) bp







Period-end nonaccrual loans


147.24


244.29


348.49


376.85


275.66


(9,705)


(12,842)







Period-end nonperforming assets


136.17


212.06


297.88


307.04


233.55


(7,589)


(9,738)




























As a percent of total loans at period-end:





















Nonaccrual loans


0.82 %


0.50 %


0.35 %


0.32 %


0.44 %


             32 bp


             38 bp




























As a percent of total loans, other real estate owned and repossessed property at period-end:





















Nonperforming assets


0.88 %


0.57 %


0.41 %


0.40 %


0.52 %


             31 bp


             36 bp




























As a percent of total assets at period-end:





















Nonaccrual loans


0.64 %


0.39 %


0.28 %


0.25 %


0.34 %


             25 bp


             30 bp







Nonperforming assets


0.69


0.45


0.33


0.31


0.40


24


29







____________________________________

(1)

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

 

Shore Bancshares, Inc.

Financial Highlights By Quarter and Year (Unaudited) – Continued














Q4 2025 vs.


Q4 2025 vs.

($ in thousands)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


Q3 2025


Q4 2024

The Company Amounts















Common Equity Tier 1 Capital


$   510,729


$   496,709


$   483,947


$   470,223


$     458,258


2.82 %


11.45 %

Tier 1 Capital


540,897


526,794


513,952


500,149


488,105


2.68


10.82

Total Capital


660,451


627,055


618,793


603,928


591,228


5.33


11.71

Risk-Weighted Assets


4,852,573


4,867,237


4,890,679


4,823,833


4,852,564


(0.30)


—
















The Company Ratios















Common Equity Tier 1 Capital to RWA


10.52 %


10.21 %


9.90 %


9.75 %


9.44 %


              31 bp


            108 bp

Tier 1 Capital to RWA


11.15


10.82


10.51


10.37


10.06


33


109

Total Capital to RWA


13.61


12.88


12.65


12.52


12.18


73


143

Tier 1 Capital to AA (Leverage)


8.82


8.86


8.65


8.27


8.02


(4)


80
















The Bank Amounts















Common Equity Tier 1 Capital


$   569,183


$   559,212


$   546,630


$   534,824


$   521,453


1.78 %


9.15 %

Tier 1 Capital


569,183


559,212


546,630


534,824


521,453


1.78


9.15

Total Capital


629,746


620,034


607,235


594,550


580,706


1.57


8.44

Risk-Weighted Assets


4,844,639


4,864,871


4,888,558


4,821,975


4,851,903


(0.42)


(0.15)
















The Bank Ratios















Common Equity Tier 1 Capital to RWA


11.75 %


11.49 %


11.18 %


11.09 %


10.75 %


              26 bp


            100 bp

Tier 1 Capital to RWA


11.75


11.49


11.18


11.09


10.75


26


100

Total Capital to RWA


13.00


12.75


12.42


12.33


11.97


25


103

Tier 1 Capital to AA (Leverage)


9.30


9.41


9.20


8.84


8.58


(11)


72

 

Shore Bancshares, Inc.

Consolidated Balance Sheets














December 31, 2025


December 31, 2025













compared to


compared to

($ in thousands, except per share data)


December 31, 2025


September 30, 2025


June 30, 2025


March 31, 2025


December 31, 2024


September 30, 2025


December 31, 2024



(unaudited)


(unaudited)


(unaudited)


(unaudited)







ASSETS















Cash and due from banks


$                 50,164


$                 62,289


$                 54,512


$                 46,886


$                 44,008


(19.5) %


14.0 %

Interest-bearing deposits with other banks


305,402


354,224


130,472


342,120


415,843


(13.8)


(26.6)

Cash and cash equivalents


355,566


416,513


184,984


389,006


459,851


(14.6)


(22.7)

Investment securities:















Available for sale, at fair value


220,358


181,720


187,679


179,148


149,212


21.3


47.7

Held to maturity, net of allowance for credit losses


414,827


433,440


459,246


469,572


481,077


(4.3)


(13.8)

Equity securities, at fair value


6,186


6,113


6,010


5,945


5,814


1.2


6.4

Restricted securities, at cost


17,989


20,364


20,412


20,411


20,253


(11.7)


(11.2)

Loans held for sale, at fair value


32,540


21,500


34,319


15,717


19,606


51.3


66.0

Loans held for investment


4,900,302


4,882,969


4,827,628


4,777,489


4,771,988


0.4


2.7

Less: allowance for credit losses


(58,836)


(59,554)


(58,483)


(58,042)


(57,910)


(1.2)


1.6

Loans, net


4,841,466


4,823,415


4,769,145


4,719,447


4,714,078


0.4


2.7
















Premises and equipment, net


80,168


80,812


81,426


81,692


81,806


(0.8)


(2.0)

Goodwill


63,266


63,266


63,266


63,266


63,266


—


—

Other intangible assets, net


29,722


31,722


33,761


36,033


38,311


(6.3)


(22.4)

Right-of-use assets


10,523


10,896


11,052


11,709


11,385


(3.4)


(7.6)

Cash surrender value on life insurance


105,839


105,055


105,860


105,040


104,421


0.7


1.4

Accrued interest receivable


18,551


20,408


19,821


20,555


19,570


(9.1)


(5.2)

Deferred income taxes


29,825


30,328


30,972


31,428


31,857


(1.7)


(6.4)

Other assets


31,992


32,927


29,921


27,594


30,256


(2.8)


5.7

TOTAL ASSETS


$            6,258,818


$            6,278,479


$            6,037,874


$            6,176,563


$            6,230,763


(0.3)


0.5

 

Shore Bancshares, Inc.

Consolidated Balance Sheets – Continued














December 31, 2025


December 31, 2025













compared to


compared to

($ in thousands, except per share data)


December 31, 2025


September 30, 2025


June 30, 2025


March 31, 2025


December 31, 2024


September 30, 2025


December 31, 2024



(unaudited)


(unaudited)


(unaudited)


(unaudited)







LIABILITIES















Deposits:















Noninterest-bearing


$            1,587,953


$            1,594,212


$            1,575,120


$            1,565,017


$            1,562,815


(0.4) %


1.6 %

Interest-bearing checking


852,585


851,963


763,309


852,480


978,076


0.1


(12.8)

Money market and savings


1,814,928


1,790,001


1,691,438


1,800,529


1,805,884


1.4


0.5

Time deposits


1,267,487


1,281,132


1,273,285


1,242,319


1,181,561


(1.1)


7.3

Brokered deposits


10,911


10,857


10,806


—


—


0.5



Total deposits


5,533,864


5,528,165


5,313,958


5,460,345


5,528,336


0.1


0.1

FHLB advances


—


50,000


50,000


50,000


50,000


(100.0)


(100.0)

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


30,168


30,085


30,005


29,926


29,847


0.3


1.1

Subordinated debt, net


58,893


44,409


44,236


44,053


43,870


32.6


34.2

Total borrowings


89,061


124,494


124,241


123,979


123,717


(28.5)


(28.0)

Lease liabilities


11,027


11,395


11,541


12,183


11,844


(3.2)


(6.9)

Other liabilities


34,993


37,218


22,940


27,586


25,800


(6.0)


35.6

TOTAL LIABILITIES


5,668,945


5,701,272


5,472,680


5,624,093


5,689,697


(0.6)


(0.4)

STOCKHOLDERS' EQUITY















Common stock, $0.01 par value per share


334


334


334


333


333


—


0.3

Additional paid-in capital


360,554


359,939


359,063


358,572


358,112


0.2


0.7

Retained earnings


233,578


221,693


211,400


199,898


190,166


5.4


22.8

Accumulated other comprehensive loss


(4,593)


(4,759)


(5,603)


(6,333)


(7,545)


(3.5)


(39.1)

TOTAL STOCKHOLDERS' EQUITY


589,873


577,207


565,194


552,470


541,066


2.2


9.0

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$            6,258,818


$            6,278,479


$            6,037,874


$            6,176,563


$            6,230,763


(0.3)


0.5
















Shares of common stock issued and outstanding


33,413,503


33,421,672


33,374,265


33,374,265


33,332,177


0.0


0.2

Book value per common share


$                   17.65


$                   17.27


$                   16.94


$                   16.55


$                   16.23


2.2


8.7

 

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter and Year














Q4 2025 vs.


Q4 2025 vs.


Year Ended December 31,

($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


Q3 2025


Q4 2024


2025


2024


% Change



(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)






(unaudited)





INTEREST INCOME





















Interest and fees on loans


$       72,331


$       70,930


$       69,695


$       67,647


$       67,428


2.0 %


7.3 %


$     280,604


$     269,631


4.1 %

Interest and dividends on taxable investment securities


5,010


5,036


5,331


5,001


4,833


(0.5)


3.7


20,378


19,444


4.8

Interest and dividends on tax-exempt investment securities


6


6


6


6


6


—


—


24


24


—

Interest on deposits with other banks


2,810


1,215


1,588


3,409


4,137


131.3


(32.1)


9,022


6,239


44.6

Total interest income


80,157


77,187


76,620


76,063


76,404


3.8


4.9


310,028


295,338


5.0






















INTEREST EXPENSE





















Interest on deposits


27,289


26,474


27,369


28,070


30,363


3.1


(10.1)


109,203


115,301


(5.3)

Interest on short-term borrowings


246


640


605


598


—


(61.6)


—


2,089


2,131


(2.0)

Interest on long-term borrowings


2,181


1,418


1,394


1,366


2,030


53.8


7.4


6,359


7,357


(13.6)

Total interest expense


29,716


28,532


29,368


30,034


32,393


4.1


(8.3)


117,651


124,789


(5.7)






















NET INTEREST INCOME


50,441


48,655


47,252


46,029


44,011


3.7


14.6


192,377


170,549


12.8

Provision for credit losses


2,827


2,992


1,528


1,028


780


(5.5)


262.4


8,375


4,738


76.8

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES


47,614


45,663


45,724


45,001


43,231


4.3


10.1


184,002


165,811


11.0






















NONINTEREST INCOME





















Service charges on deposit accounts


1,663


1,599


1,519


1,514


1,606


4.0


3.5


6,295


6,149


2.4

Trust and investment fee income


1,042


898


942


823


857


16.0


21.6


3,705


3,367


10.0

Mortgage banking revenue


1,181


1,278


2,379


1,240


2,026


(7.6)


(41.7)


6,078


5,987


1.5

Interchange credits


1,862


1,858


1,788


1,577


1,726


0.2


7.9


7,085


6,741


5.1

Other noninterest income


2,919


2,068


2,690


1,849


2,638


41.2


10.7


9,525


8,903


7.0

Total noninterest income


$         8,667


$         7,701


$         9,318


$         7,003


$         8,853


12.5


(2.1)


$       32,688


$       31,147


4.9

 

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter and Year – Continued














Q4 2025 vs.


Q4 2025 vs.


Year Ended December 31,

($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


Q3 2025


Q4 2024


2025


2024


% Change



(unaudited)


(unaudited)


(unaudited)


(unaudited)


(unaudited)






(unaudited)





NONINTEREST EXPENSE





















Salaries and employee benefits


$       18,582


$       18,642


$       17,742


$       16,440


$       17,209


(0.3) %


8.0 %


$       71,406


$       66,579


7.3 %

Occupancy expense


2,461


2,406


2,472


2,538


2,474


2.3


(0.5)


9,877


9,706


1.8

Furniture and equipment expense


792


892


796


853


760


(11.2)


4.2


3,334


3,441


(3.1)

Software and data processing


5,197


5,155


4,819


4,691


4,512


0.8


15.2


19,862


17,508


13.4

Amortization of other intangible assets


2,000


2,039


2,272


2,278


2,298


(1.9)


(13.0)


8,589


9,779


(12.2)

Legal and professional fees


1,237


989


1,225


1,613


1,521


25.1


(18.7)


5,064


5,836


(13.2)

FDIC insurance premium expense


845


794


1,023


1,091


1,013


6.4


(16.6)


3,753


4,413


(15.0)

Marketing and advertising


367


315


384


254


291


16.5


26.1


1,320


1,319


0.1

Fraud losses


227


45


83


105


98


404.4


131.6


460


4,998


(90.8)

Other noninterest expense


3,791


3,102


3,594


3,884


3,767


22.2


0.6


14,370


14,675


(2.1)

Total noninterest expense


35,499


34,379


34,410


33,747


33,943


3.3


4.6


138,035


138,254


(0.2)






















Income before income taxes


20,782


18,985


20,632


18,257


18,141


9.5


14.6


78,655


58,704


34.0

Income tax expense


4,895


4,637


5,125


4,493


4,859


5.6


0.7


19,149


14,815


29.3

NET INCOME


$       15,887


$       14,348


$       15,507


$       13,764


$       13,282


10.7


19.6


$       59,506


$       43,889


35.6






















Weighted average shares outstanding – basic


33,426,198


33,419,291


33,374,265


33,350,869


33,327,243


— %


0.3 %


33,392,817


33,267,328


0.4 %

Weighted average shares outstanding – diluted


33,446,103


33,435,862


33,388,013


33,375,318


33,363,612


0.0 %


0.2 %


33,407,155


33,285,156


0.4 %






















Basic net income per common share


$           0.48


$           0.43


$           0.46


$           0.41


$           0.40


11.6 %


20.0 %


$           1.78


$           1.32


34.8 %

Diluted net income per common share


$           0.48


$           0.43


$           0.46


$           0.41


$           0.40


11.6 %


20.0 %


$           1.78


$           1.32


34.8 %






















Dividends paid per common share


$           0.12


$           0.12


$           0.12


$           0.12


$           0.12


— %


— %


$           0.48


$           0.48


— %

 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited)




Three Months Ended



December 31, 2025


September 30, 2025


December 31, 2024

($ in thousands)


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate

Earning assets



















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



















Commercial real estate


$       2,624,581


$            38,928


5.88 %


$       2,615,409


$            38,077


5.78 %


$       2,551,903


$            36,036


5.62 %

Residential real estate


1,442,055


19,548


5.42


1,407,076


19,711


5.60


1,358,066


18,142


5.34

Construction


343,796


5,740


6.62


347,574


5,848


6.68


336,094


5,304


6.28

Commercial


219,874


4,337


7.83


219,002


3,380


6.12


229,676


3,792


6.57

Consumer


274,715


3,726


5.38


289,729


3,877


5.31


313,686


4,080


5.17

Credit cards


4,598


142


12.25


5,213


118


8.98


6,820


154


8.98

Total loans


4,909,619


72,421


5.85


4,884,003


71,011


5.77


4,796,245


67,508


5.60




















Investment securities



















Taxable


652,990


5,010


3.07


663,884


5,036


3.03


654,955


4,833


2.95

Tax-exempt(1)


649


8


4.93


651


8


4.92


655


8


4.89

Interest-bearing deposits


280,558


2,810


3.97


110,443


1,215


4.36


346,599


4,137


4.75

Total earning assets


5,843,816


80,249


5.45


5,658,981


77,270


5.42


5,798,454


76,486


5.25

Cash and due from banks


51,611






49,405






43,444





Other assets


371,205






370,952






380,321





Allowance for credit losses


(59,879)






(58,764)






(58,722)





Total assets


$       6,206,753






$       6,020,574






$       6,163,497





 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited) – Continued




Three Months Ended



December 31, 2025


September 30, 2025


December 31, 2024

($ in thousands)


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate

Interest-bearing liabilities



















Interest-bearing checking


$          768,769


$              5,386


2.78 %


$          689,906


$              5,157


2.97 %


$          901,764


$              7,898


3.48 %

Money market and savings deposits


1,784,972


9,373


2.08


1,714,161


9,277


2.15


1,733,934


10,331


2.37

Time deposits


1,277,732


12,425


3.86


1,277,403


11,935


3.71


1,232,480


12,134


3.92

Brokered deposits


10,942


105


3.81


10,891


105


3.82


—


—


—

Interest-bearing deposits(4)


3,842,415


27,289


2.82


3,692,361


26,474


2.84


3,868,178


30,363


3.12

FHLB advances


20,108


246


4.85


52,391


640


4.85


50,000


618


4.92

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


104,752


2,181


8.26


74,363


1,418


7.57


73,578


1,412


7.63

Total interest-bearing liabilities


3,967,275


29,716


2.97


3,819,115


28,532


2.96


3,991,756


32,393


3.23

Noninterest-bearing deposits


1,609,667






1,587,891






1,593,405





Accrued expenses and other liabilities


45,602






42,321






40,152





Stockholders' equity


584,209






571,247






538,184





Total liabilities and stockholders' equity


$       6,206,753






$       6,020,574






$       6,163,497
























Net interest spread






2.48 %






2.46 %






2.02 %

Net interest margin






3.43






3.42






3.03

Net interest margin excluding accretion(3)






3.24






3.22






2.85

Cost of funds






2.11






2.09






2.31

Cost of deposits






1.99






1.99






2.21

Cost of debt






7.71






6.44






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 $4.1 million, $3.3 million and $3.2 million of accretion interest on loans for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.

(4)

Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $1.2 million, $280 thousand and $412 thousand of amortization of deposit discounts and $171 thousand, $232 thousand and $232 thousand of amortization of borrowing fair value adjustments for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.

 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited) – Continued






Year Ended December 31,



2025


2024

($ in thousands)


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate

Earning assets













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













Commercial real estate


$          2,588,913


$              150,171


5.80 %


$          2,528,961


$              144,155


5.70 %

Residential real estate


1,394,073


76,708


5.50


1,318,500


72,636


5.51

Construction


349,097


22,809


6.53


322,978


19,917


6.17

Commercial


223,949


15,081


6.73


220,699


15,625


7.08

Consumer


291,789


15,697


5.38


324,633


16,923


5.21

Credit cards


5,648


467


8.27


7,444


694


9.32

Total loans


4,853,469


280,933


5.79


4,723,215


269,950


5.72














Investment securities













Taxable


665,940


20,378


3.06


667,622


19,444


2.91

Tax-exempt(1)


651


30


4.61


657


30


4.57

Interest-bearing deposits


211,859


9,022


4.26


129,410


6,239


4.82

Total earning assets


5,731,919


310,363


5.41


5,520,904


295,663


5.36

Cash and due from banks


48,725






46,264





Other assets


372,846






387,852





Allowance for credit losses


(58,831)






(58,089)





Total assets


$          6,094,659






$          5,896,931





 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited) – Continued




Year Ended December 31,



2025


2024

($ in thousands)


Average Balance


Interest


Yield/Rate


Average Balance


Interest


Yield/Rate

Interest-bearing liabilities













Interest-bearing checking


$              759,395


$                23,265


3.06 %


$              825,773


$                25,523


3.09 %

Money market and savings deposits


1,761,503


38,245


2.17


1,690,905


41,202


2.44

Time deposits


1,255,797


47,391


3.77


1,205,411


48,566


4.03

Brokered deposits


7,927


302


3.81


12,636


10


0.08

Interest-bearing deposits(4)


3,784,622


109,203


2.89


3,734,725


115,301


3.09

FHLB advances


43,068


2,089


4.85


70,298


3,720


5.29

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


81,828


6,359


7.77


72,907


5,768


7.91

Total interest-bearing liabilities


3,909,518


117,651


3.01


3,877,930


124,789


3.22

Noninterest-bearing deposits


1,577,271






1,454,087





Accrued expenses and other liabilities


42,291






39,172





Stockholders' equity


565,579






525,742





Total liabilities and stockholders' equity


$          6,094,659






$          5,896,931


















Net interest spread






2.40 %






2.14 %

Net interest margin






3.36






3.10

Net interest margin excluding accretion(3)






3.15






2.83

Cost of funds






2.14






2.34

Cost of deposits






2.04






2.22

Cost of debt






6.76






6.63

____________________________________

(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 $15.4 million and $16.9 million of accretion interest on loans for the year ended December 31, 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 $2.2 million and $1.5 million of amortization of deposit discounts and $865 thousand and $926 thousand of amortization of borrowing fair value adjustments for the year ended December 31, 2025 and 2024, respectively.

 

Shore Bancshares, Inc.

Reconciliation of GAAP and Non-GAAP Measures (Unaudited)




Quarter to Date


Year to Date

($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


12/31/2025


12/31/2024

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

Net income


$       15,887


$        14,348


$        15,507


$        13,764


$        13,282


$       59,506


$        43,889

Annualized net income (A)


$       63,030


$        56,924


$        62,198


$        55,821


$        52,839


$       59,506


$        43,889
















Net income


$       15,887


$        14,348


$        15,507


$        13,764


$        13,282


$       59,506


$        43,889

Add: amortization of other intangible assets, net of tax


1,529


1,541


1,708


1,717


1,683


6,498


7,311

Net income excluding amortization of other intangible assets – non-GAAP


17,416


15,889


17,215


15,481


14,965


66,004


51,200

Annualized net income excluding amortization of other intangible assets – non-GAAP (B)


$       69,096


$        63,038


$        69,049


$        62,784


$        59,535


$       66,004


$        51,200
















Net income


$       15,887


$        14,348


$        15,507


$        13,764


$        13,282


$       59,506


$        43,889

Add: amortization of other intangible assets, net of tax


1,529


1,541


1,708


1,717


1,683


6,498


7,311

Add: credit card fraud losses, net of tax


—


—


—


—


—


—


3,484

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


—


—


—


—


(329)


—


(336)

Adjusted net income – non-GAAP


17,416


15,889


17,215


15,481


14,636


66,004


54,348

Annualized adjusted net income – non-GAAP (C)


$       69,096


$        63,038


$        69,049


$        62,784


$        58,226


$       66,004


$        54,348
















Net income


$       15,887


$        14,348


$        15,507


$        13,764


$        13,282


$       59,506


$        43,889

Less: income tax expense


4,895


4,637


5,125


4,493


4,859


19,149


14,815

Less: provision for credit losses


2,827


2,992


1,528


1,028


780


8,375


4,738

Pre-tax pre-provision net income – non GAAP


$       23,609


$        21,977


$        22,160


$        19,285


$        18,921


$       87,030


$        63,442
















Return on average assets – GAAP


1.02 %


0.95 %


1.03 %


0.91 %


0.86 %


0.98 %


0.74 %

Adjusted return on average assets – non-GAAP


1.11 %


1.05 %


1.15 %


1.02 %


0.94 %


1.08 %


0.92 %
















Average assets


$  6,206,753


$   6,020,574


$   6,021,385


$   6,129,241


$   6,163,497


$  6,094,659


$   5,896,931
















Average stockholders' equity (D)


$     584,209


$      571,247


$      558,952


$      547,443


$      538,184


$     565,579


$      525,742

Less: average goodwill and core deposit intangible


(94,059)


(96,074)


(98,241)


(100,514)


(102,794)


(97,201)


(106,409)

Average tangible common equity (E)


$     490,150


$      475,173


$      460,711


$      446,929


$      435,390


$     468,378


$      419,333
















Return on average common equity – GAAP (A)/(D)


10.79 %


9.96 %


11.13 %


10.20 %


9.82 %


10.52 %


8.35 %

Return on average tangible common equity – non-GAAP (B)/(E)


14.10 %


13.27 %


14.99 %


14.05 %


13.67 %


14.09 %


12.21 %

Adjusted return on average tangible common equity – non-GAAP (C)/(E)


14.10 %


13.27 %


14.99 %


14.05 %


13.37 %


14.09 %


12.96 %

 

Shore Bancshares, Inc.

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




Quarter to Date


Year to Date

($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024


12/31/2025


12/31/2024

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

Noninterest expense (F)


$       35,499


$        34,379


$        34,410


$        33,747


$        33,943


$     138,035


$      138,254

Less: amortization of other intangible assets


(2,000)


(2,039)


(2,272)


(2,278)


(2,298)


(8,589)


(9,779)

Less: credit card fraud losses


—


—


—


—


—


—


(4,660)

Adjusted noninterest expense (G)


$       33,499


$        32,340


$        32,138


$        31,469


$        31,645


$     129,446


$      123,815
















Net interest income (H)


$       50,441


$        48,655


$        47,252


$        46,029


$        44,011


$     192,377


$      170,549

Add: taxable-equivalent adjustment


92


83


81


81


82


335


325

Taxable-equivalent net interest income (I)


$       50,533


$        48,738


$        47,333


$        46,110


$        44,093


$     192,712


$      170,874
















Noninterest income (J)


$          8,667


$          7,701


$          9,318


$          7,003


$          8,853


$       32,688


$        31,147

Less: Sale and fair value of held for sale assets


—


—


—


—


(450)


—


(450)

Adjusted noninterest income (K)


$          8,667


$          7,701


$          9,318


$          7,003


$          8,403


$       32,688


$        30,697
















Efficiency ratio – GAAP (F)/(H)+(J)


60.06 %


61.00 %


60.83 %


63.64 %


64.21 %


61.33 %


68.55 %

Adjusted efficiency ratio – non-GAAP (G)/(I)+(K)


56.59 %


57.30 %


56.73 %


59.25 %


60.28 %


57.43 %


61.43 %
















Net operating expense to average assets – GAAP


1.72 %


1.76 %


1.67 %


1.77 %


1.62 %


1.73 %


1.82 %

Adjusted net operating expense to average assets – non-GAAP


1.59 %


1.62 %


1.52 %


1.62 %


1.50 %


1.59 %


1.58 %

 

 

Shore Bancshares, Inc.

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


($ in thousands, except per share data)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024












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

Stockholders' equity (L)


$              589,873


$              577,207


$              565,194


$              552,470


$              541,066

Less: goodwill and core deposit intangible


(92,988)


(94,988)


(97,027)


(99,299)


(101,577)

Tangible common equity (M)


$              496,885


$              482,219


$              468,167


$              453,171


$              439,489












Shares of common stock outstanding (N)


33,413,503


33,421,672


33,374,265


33,374,265


33,332,177












Book value per common share – GAAP (L)/(N)


$                  17.65


$                  17.27


$                  16.94


$                  16.55


$                  16.23

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


$                  14.87


$                  14.43


$                  14.03


$                  13.58


$                  13.19












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

Stockholders' equity (O)


$              589,873


$              577,207


$              565,194


$              552,470


$              541,066

Less: goodwill and core deposit intangible


(92,988)


(94,988)


(97,027)


(99,299)


(101,577)

Tangible common equity (P)


$              496,885


$              482,219


$              468,167


$              453,171


$              439,489












Assets (Q)


$          6,258,818


$          6,278,479


$          6,037,874


$          6,176,563


$          6,230,763

Less: goodwill and core deposit intangible


(92,988)


(94,988)


(97,027)


(99,299)


(101,577)

Tangible assets (R)


$          6,165,830


$          6,183,491


$          5,940,847


$          6,077,264


$          6,129,186












Period-end equity to assets – GAAP (O)/(Q)


9.42 %


9.19 %


9.36 %


8.94 %


8.68 %

Period-end tangible common equity to tangible assets – non-GAAP (P)/(R)


8.06 %


7.80 %


7.88 %


7.46 %


7.17 %

____________________________________

(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)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024

Common equity


$         589,873


$          577,207


$          565,194


$          552,470


$          541,066

Goodwill (1)


(61,123)


(61,176)


(61,238)


(61,300)


(61,362)

Core deposit intangible(2)


(22,566)


(24,041)


(25,573)


(27,280)


(28,991)

DTAs that arise from net operating loss and tax credit carryforwards


(48)


(40)


(39)


—


—

Accumulated other comprehensive loss


4,593


4,759


5,603


6,333


7,545

Common Equity Tier 1 Capital


510,729


496,709


483,947


470,223


458,258

TRUPS


30,168


30,085


30,005


29,926


29,847

Tier 1 Capital


540,897


526,794


513,952


500,149


488,105

Allowable reserve for credit losses and other Tier 2 adjustments


60,661


60,852


60,605


59,726


59,253

Subordinated debt


58,893


39,409


44,236


44,053


43,870

Total Capital


$         660,451


$          627,055


$          618,793


$          603,928


$          591,228












Risk-Weighted Assets ("RWA")


$      4,852,573


$       4,867,237


$       4,890,679


$       4,823,833


$       4,852,564

Average Assets ("AA")


6,129,306


5,942,911


5,943,124


6,050,310


6,083,760












Common Equity Tier 1 Capital to RWA


10.52 %


10.21 %


9.90 %


9.75 %


9.44 %

Tier 1 Capital to RWA


11.15


10.82


10.51


10.37


10.06

Total Capital to RWA


13.61


12.88


12.65


12.52


12.18

Tier 1 Capital to AA (Leverage)


8.82


8.86


8.65


8.27


8.02

 

 

Shore Bancshares, Inc.

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












Regulatory Capital and Ratios for the Bank











($ in thousands)


Q4 2025


Q3 2025


Q2 2025


Q1 2025


Q4 2024

Common equity


$         648,279


$          639,670


$          627,838


$          617,071


$          604,261

Goodwill (1)


(61,123)


(61,176)


(61,238)


(61,300)


(61,362)

Core deposit intangible(2)


(22,566)


(24,041)


(25,573)


(27,280)


(28,991)

Accumulated other comprehensive loss


4,593


4,759


5,603


6,333


7,545

Common Equity Tier 1 Capital


569,183


559,212


546,630


534,824


521,453

Tier 1 Capital


569,183


559,212


546,630


534,824


521,453

Allowable reserve for credit losses and other Tier 2 adjustments


60,563


60,822


60,605


59,726


59,253

Total Capital


$         629,746


$          620,034


$          607,235


$          594,550


$          580,706












Risk-Weighted Assets ("RWA")


$      4,844,639


$       4,864,871


$       4,888,558


$       4,821,975


$       4,851,903

Average Assets ("AA")


6,122,775


5,939,890


5,940,411


6,050,130


6,077,540

___________________________________

(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)


December 31, 2025


% of Total Loans


September 30, 2025


% of Total Loans


June 30, 2025


% of Total Loans


March 31, 2025


% of Total Loans


December 31, 2024


% of Total Loans

Commercial real estate


$    2,643,996


53.95 %


$    2,642,601


54.12 %


$    2,603,974


53.95 %


$    2,544,107


53.25 %


$    2,557,806


53.60 %

Residential real estate


1,414,964


28.88


1,383,348


28.33


1,349,010


27.94


1,325,858


27.75


1,329,406


27.85

Construction


344,903


7.04


352,116


7.21


350,053


7.25


366,218


7.67


335,999


7.04

Commercial


226,006


4.61


221,598


4.54


224,092


4.64


234,499


4.91


237,932


4.99

Consumer


265,912


5.43


278,242


5.70


294,239


6.09


300,007


6.28


303,746


6.37

Credit cards


4,521


0.09


5,064


0.10


6,260


0.13


6,800


0.14


7,099


0.15

Total loans


4,900,302


100.00 %


4,882,969


100.00 %


4,827,628


100.00 %


4,777,489


100.00 %


4,771,988


100.00 %

Less: allowance for credit losses


(58,836)




(59,554)




(58,483)




(58,042)




(57,910)



Total loans, net


$    4,841,466




$    4,823,415




$    4,769,145




$    4,719,447




$    4,714,078



 

 

Shore Bancshares, Inc.

Classified Assets and Nonperforming Assets (Unaudited)

Classified assets and nonperforming assets are summarized as follows:


($ in thousands)


December 31, 2025


September 30, 2025


June 30, 2025


March 31, 2025


December 31, 2024












Classified loans











Substandard


$                  57,366


$                   48,470


$                   19,930


$                   19,434


$                   24,679

Total classified loans


57,366


48,470


19,930


19,434


24,679

Special mention loans


73,401


70,997


65,564


33,456


33,519

Total classified and special mention loans


$                130,767


$                 119,467


$                   85,494


$                   52,890


$                   58,198












Classified loans


$                  57,366


$                   48,470


$                   19,930


$                   19,434


$                   24,679

Other real estate owned


113


120


179


179


179

Repossessed assets


2,879


3,432


2,457


2,429


3,315

Total classified assets


$                  60,358


$                   52,022


$                   22,566


$                   22,042


$                   28,173












Classified assets to total assets


0.96 %


0.83 %


0.37 %


0.36 %


0.45 %












Nonaccrual loans


$                  39,960


$                   24,378


$                   16,782


$                   15,402


$                   21,008

90+ days delinquent accruing


255


153


215


894


294

Other real estate owned ("OREO")


113


120


179


179


179

Repossessed property


2,879


3,432


2,457


2,429


3,315

Total nonperforming assets


$                  43,207


$                   28,083


$                   19,633


$                   18,904


$                   24,796

Accruing borrowers experiencing financial difficulty loans ("BEFD")


5,311


6,704


6,709


1,356


1,662

Total nonperforming assets and BEFDs modifications


$                  48,518


$                   34,787


$                   26,342


$                   20,260


$                   26,458












Nonperforming assets to total assets


0.69 %


0.45 %


0.33 %


0.31 %


0.40 %












Total assets


$            6,258,818


$             6,278,479


$             6,037,874


$             6,176,563


$             6,230,763

 

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SOURCE Shore Bancshares, Inc.