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Shore Bancshares, Inc. Message Board

  • bobby2loaves bobby2loaves Feb 3, 2010 2:19 PM Flag

    the dividend cut

    after making it through 2009, i wonder why they chose to cut the dividend at this moment?

    lousy 2010 ahead?

    more cash to expand the balance sheet?

    it will be interesting how the market takes the bad news here, especially with the stock already trading down 60% from its 2007 highs.

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    • The management of SHBI is very conservative. I believe they are just trying to get a little extra cushion because business has been punk. SHBI has been generous with their dividend policy but with the uncertainty of the economy, I think they would like to raise a little extra capital.

      I have not had a chance to examine all the 2009 numbers but they are down substantially from 2008. Return on average assets is .48% for 2009 as compared to 1.13% for 2008. The return on equity was 4.00% for 2009 as compared to 9.22% for 2008. Earnings are down more than 50%. Write offs were
      much higher than expected. 4th quarter earnings were 20% lower than forcast..

      So, what do I think? I think we are seeing a temporary glich which will take about a year to resolve. You will know in advance when things are getting better when insiders start to purchase stock. In 2009, insiders only purchased 300 shares. Not a ringing indorsement for the stock. Check out the charts of TNCC and SUSQ and when insider purchases occured.. Bankers seldom risk their own money unless it's almost a sure thing.

      I intend to do a little nibbling and may buy a little today.. I still think we will see $11 per share but WTHDIK..

11.76-0.01(-0.08%)Aug 26 4:00 PMEDT