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Shore Bancshares Reports Second Quarter and First-Half Results

EASTON, Md., July 25, 2019 /PRNewswire/ -- Shore Bancshares, Inc. (SHBI) (the "Company") reported net income of $4.224 million or $0.33 per diluted common share for the second quarter of 2019, compared to net income of $3.754 million or $0.29 per diluted common share for the first quarter of 2019, and net income of $4.391 million or $0.34 per diluted common share for the second quarter of 2018.  Net income from continuing operations for the second quarter of 2019 was $4.228 million or $0.33 per diluted common share, compared to net income from continuing operations of $3.828 million or $0.30 per diluted common share for the first quarter of 2019, and net income from continuing operations of $4.192 million or $0.33 per diluted common share for the second quarter of 2018. The Company reported net income of $7.978 million or $0.62 per diluted common share for the first half of 2019, compared to net income of $8.449 million or $0.66 per diluted common share for the first half of 2018. Net income from continuing operations for the first half of 2019 was $8.056 million or $0.63 per diluted common share, compared to net income from continuing operations of $7.654 million or $0.60 per diluted common share for the first half of 2018.

Shore Bancshares Logo (PRNewsfoto/Shore Bancshares, Inc.)

When comparing net income from continuing operations for the second quarter of 2019 to the first quarter of 2019, the increase was primarily the result of higher noninterest income and lower noninterest expenses, partially offset by an increase in interest expense on deposits and an increase in the provision for credit losses. When comparing net income from continuing operations for the second quarter of 2019 to the second quarter of 2018, the slightly better results were attributed to interest and fees on loans, an increase in noninterest income and a lower provision for credit losses, almost entirely offset by an increase in interest expense on deposits and higher noninterest expenses. 

"The second quarter produced positive results as we experienced strong growth in both loans and deposits," said Lloyd L. "Scott" Beatty, Jr., President and Chief Executive Officer.  "During the second quarter loans and deposits grew $28.6 million and $11.7 million, respectively. Loan growth had gotten off to a slow start in 2019, but we experienced a significant amount of growth late in the second quarter and we continue to see steady demand for the last half of 2019.  Our focus on deposit growth has produced very positive results." 

Balance Sheet Review
Total assets were $1.489 billion at June 30, 2019, a $5.5 million, or less than 1.0%, increase when compared to $1.483 billion at the end of 2018.  The increase in total assets included loan growth of $44.9 million which was almost entirely funded by decreases in interest-bearing deposits with other banks of $30.2 million and investment securities (including restricted securities) of $10.5 million.

Total deposits increased $36.7 million, or 3.0%, when compared to December 31, 2018.  The increase in total deposits primarily consisted of increases in time deposits greater than $100 thousand of $20.0 million, noninterest-bearing deposits of $16.5 million, other time deposits of $8.9 million and savings and money market accounts of $1.1 million, partially offset by decreases in interest-bearing checking deposits of $7.7 million and brokered deposits of $2.1 million

Total stockholders' equity increased $8.1 million, or 4.4%, when compared to the end of 2018. At June 30, 2019, the ratio of total equity to total assets was 12.85% and the ratio of total tangible equity to total tangible assets was 11.66%.

Total assets at June 30, 2019 increased $36.8 million, or 2.5%, when compared to total assets at June 30, 2018.  Total assets year over year increased primarily as a result of loan growth of $83.4 million which was partially funded by a decrease in investment securities (including restricted securities) of $32.2 million. In addition, the sale of Avon Dixon resulted in a decrease in assets of $11.3 million.

Total deposits at June 30, 2019 increased $73.9 million, or 6.3%, when compared to June 30, 2018.  The increase in total deposits included growth within interest-bearing checking deposits of $29.0 million, time deposits of $100 thousand or more of $21.0 million, noninterest-bearing deposits of $20.3 million, money market and savings deposits of $7.1 million and other time deposits of $3.8 million.  These increases resulted in a reduced dependence on brokered deposits which experienced a decrease of $7.4 million or 27.0% at June 30, 2019.  Total stockholders' equity increased $23.2 million, or 13.8%, when compared to June 30, 2018. 

Review of Quarterly Financial Results
Net interest income was $12.3 million for the second quarter of 2019, compared to $12.4 million for the first quarter of 2019 and $12.6 million for the second quarter of 2018. The primary reasons for the decrease in net interest income when compared to the first quarter of 2019 and second quarter 2018 were higher interest expense on deposits and lower interest income on taxable securities. Interest income increased when compared to the first quarter of 2019 due to an increase in the average balance on loans of $19.3 million. Similarly, interest income increased when compared to the second quarter of 2018 due to an increase in the average balance on loans of $79.9 million. The Company's net interest margin decreased to 3.54% from 3.61% in the first quarter of 2019 and decreased from 3.79% in the second quarter of 2018.  The decline in net interest margin from the first quarter of 2019 and the second quarter 2018 was the direct result of higher rates paid on interest-bearing deposits and the timing of significant loan growth late in the second quarter of 2019 which had little impact on the average balance on loans and, correspondingly, interest income, partially offset by a decline in the average balance on short-term borrowings. 

The provision for credit losses was $200 thousand for the three months ended June 30, 2019.  The comparable amounts were $100 thousand and $418 thousand for the three months ended March 31, 2019 and June 30, 2018, respectively. The increase in the amount of provision for credit losses from the first quarter of 2019 was due the absence of recoveries experienced in the first quarter of 2019 which totaled $185 thousand. The decrease in the amount of provision for credit losses from the second quarter of 2018 was due to lower loan growth in the second quarter of 2019. Net charge-offs were $313 thousand for the second quarter of 2019, $25 thousand for the first quarter of 2019 and $84 thousand for the second quarter of 2018.  The ratio of annualized net charge-offs to average loans was 0.10% for the second quarter of 2019, 0.01% for the first quarter of 2019 and 0.03% for the second quarter of 2018.  The ratio of the allowance for credit losses to period-end loans was 0.83% at June 30, 2019, lower than the 0.86% at March 31, 2019 and 0.87% at June 30, 2018.

At June 30, 2019, nonperforming assets were $15.6 million, a decrease of $831 thousand, or 5.1%, when compared to March 31, 2019, primarily due to a decrease in nonaccrual loans of $768 thousand, or 5.0%. Accruing troubled debt restructurings ("TDRs") decreased $60 thousand, or 0.8% over the same time period. When comparing June 30, 2019 to June 30, 2018, nonperforming assets increased $7.2 million, or 86.8%, and accruing TDRs decreased $1.9 million, or 19.3%. The increase in nonperforming assets was due to a large nonaccrual loan with an outstanding loan balance of $7.5 million added late in the fourth quarter of 2018, in which the Company does not anticipate any further losses. The ratio of nonperforming assets and accruing TDRs to total assets was 1.56%, 1.63% and 1.24% at June 30, 2019, March 31, 2019 and June 30, 2018, respectively.  In addition, the ratio of accruing TDRs to total loans at June 30, 2019 was 0.63%, compared to 0.65% at March 31, 2019 and 0.83% at June 30, 2018.

Total noninterest income from continuing operations for the second quarter of 2019 increased $421 thousand when compared to the first quarter of 2019 and increased $313 thousand when compared to the second quarter of 2018.  The increase from the first quarter of 2019 and the second quarter of 2018 was the result of an increase in service charges on deposit accounts and additional fees on bank service charges included in other noninterest income.

Total noninterest expense from continuing operations for the second quarter of 2019 decreased $358 thousand when compared to the first quarter of 2019 and increased $132 thousand when compared to the second quarter of 2018.  The decrease in noninterest expense compared to the first quarter of 2019 was primarily due to lower employee benefits and payroll taxes, other real estate owned expenses and legal and professional fees. The increase in noninterest expenses from the second quarter of 2018 was primarily due to increases in data processing fees, other real estate owned expenses and legal and professional fees, partially offset by lower salaries and wages expense. 

Review of Six-Month Financial Results
Net interest income for the first six months of 2019 was $24.7 million, a decrease of $275 thousand, or 1.1% when compared to the first six months of 2018.  The decrease was the direct result of an increase in interest expense on deposits, which was partially offset by an increase in interest and fees on loans. The average balance on loans increased $87.8 million and the yield on loans increased 11bps when comparing the periods.  This increase in volume and yields on loans was offset by an increase in the average balance of interest-bearing deposits of $43.8 million, with an associated increase in rates paid on these deposits of 67bps. This resulted in a net interest margin of 3.57% for the first six months of 2019 compared to 3.80% for the first six months of 2018.

The provision for credit losses for the six months ended June 30, 2019 and 2018 was $300 thousand and $907 thousand, respectively, while net charge-offs were $338 thousand and $567 thousand, respectively.  The decrease in provision for credit losses was the result of improved overall credit quality exclusive of the one large relationship mentioned above and lower net charge-offs for the first six months of 2019 compared to the first six months of 2018.  In addition, loan growth in the first six months of 2019 has lagged the first six months of 2018. The ratio of annualized net charge-offs to average loans was 0.06% for the first half of 2019 and 0.10% for the first half of 2018.

Total noninterest income from continuing operations for the six months ended June 30, 2019 increased $361 thousand, or 8.1%, when compared to the same period in 2018. The increase in noninterest income primarily consisted of increases in service charges on deposit accounts and other fees on bank services. 

Total noninterest expense from continuing operations for the six months ended June 30, 2019 increased $23 thousand, or 0.1%, when compared to the same period in 2018. Despite the insignificant increase in total noninterest expenses, salaries and wages decreased $769 thousand, which was offset by increases in employee benefits of $101 thousand, data processing of $272 thousand, legal and professional fees $225 thousand and other real estate owned expenses of $334 thousand

Shore Bancshares Information

Shore Bancshares is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland's Eastern Shore. It is the parent company of Shore United Bank. Shore Bancshares engages in trust and wealth management services through Wye Financial & Trust, a division of Shore United Bank.  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. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled "Risk Factors".

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

(Dollars in thousands, except per share data)




For the Three Months Ended


For the Six Months Ended




June 30, 


June 30, 




2019


2018


 Change


2019


2018


 Change


PROFITABILITY FOR THE PERIOD


















Net interest income


$

12,293


$

12,633


(2.7)

%

$

24,687


$

24,962


(1.1)

%

Provision for credit losses



200



418


(52.2)



300



907


(66.9)


Noninterest income



2,609



2,296


13.6



4,797



4,436


8.1


Noninterest expense



8,985



8,853


1.5



18,328



18,305


0.1


Income from continuing operations
before income taxes



5,717



5,658


1.0



10,856



10,186


6.6


Income tax expense



1,489



1,466


1.6



2,800



2,532


10.6


Income from continuing operations 


$

4,228


$

4,192


0.9


$

8,056


$

7,654


5.3




















(Loss) Income from discontinued operations

before income taxes



(4)



269


(101.5)



(103)



1,048


(109.8)


Income tax expense (benefit)





70


(100.0)



(25)



253


(109.9)


(Loss) Income from discontinued operations 



(4)



199


(102.0)



(78)



795


(109.8)


Net income


$

4,224


$

4,391


(3.8)


$

7,978


$

8,449


(5.6)




















From Continuing Operations:


















Return on average assets



1.16

%


1.18

%

(2)

bp


1.11

%


1.09

%

2

bp

Return on average equity



8.97



10.10


(113)



8.69



9.31


(62)


Return on average tangible equity (1)



10.31



13.02


(271)



10.02



11.94


(192)


Net interest margin



3.54



3.79


(25)



3.57



3.80


(23)


Efficiency ratio - GAAP



60.29



59.30


99



62.16



62.22


(6)


Efficiency ratio - Non-GAAP (1)



59.09



57.67


142



60.93



61.04


(11)




















PER SHARE DATA


















Basic net income per common share


















Income from continuing operations


$

0.33


$

0.33


%

$

0.63


$

0.60


5.0

%

(Loss) Income from discontinued
operations





0.01


(100.0)



(0.01)



0.06


(116.7)


Net income


$

0.33


$

0.34


(2.9)


$

0.62


$

0.66


(6.1)


Diluted net income per common share


















Income from continuing operations


$

0.33


$

0.33



$

0.63


$

0.60


5.0


(Loss) Income from discontinued
operations





0.01


(100.0)



(0.01)



0.06


(116.7)


Net income


$

0.33


$

0.34


(2.9)


$

0.62


$

0.66


(6.1)




















Dividends paid per common share



0.10



0.08


25.0



0.20



0.15


33.3


Book value per common share at period
end



14.97



13.19


13.5










Tangible book value per common share at
period end (1)



13.40



10.68


25.5










Market value at period end



16.34



19.02


(14.1)










Market range:


















High



16.48



20.09


(18.0)



16.48



20.09


(18.0)


Low



14.84



17.92


(17.2)



14.00



16.28


(14.0)




















AVERAGE BALANCE SHEET DATA


















Loans


$

1,221,215


$

1,141,296


7.0

%

$

1,211,618


$

1,123,852


7.8

%

Investment securities



159,878



186,453


(14.3)



162,429



191,839


(15.3)


Earning assets



1,399,418



1,341,050


4.4



1,397,086



1,327,227


5.3


Assets



1,468,093



1,425,947


3.0



1,464,214



1,411,058


3.8


Deposits



1,233,951



1,161,790


6.2



1,224,876



1,165,184


5.1


Stockholders' equity



189,101



166,480


13.6



187,048



165,778


12.8




















CREDIT QUALITY DATA


















Net charge-offs


$

313


$

84


272.6

%

$

338


$

567


(40.4)

%



















Nonaccrual loans


$

14,592


$

6,757


116.0










Loans 90 days past due and still accruing



439













Other real estate owned



524



1,569


(66.6)










Total nonperforming assets



15,555



8,326


86.8










Accruing troubled debt restructurings (TDRs)



7,768



9,620


(19.3)










Total nonperforming assets and accruing TDRs


$

23,323


$

17,946


30.0














































CAPITAL AND CREDIT QUALITY RATIOS


















Period-end equity to assets



12.85

%


11.58

%

127

bp









Period-end tangible equity to tangible assets (1)



11.66



9.59


207




























Annualized net charge-offs to average loans



0.10



0.03


7



0.06

%


0.10

%

(4)

bp



















Allowance for credit losses as a percent of:


















Period-end loans



0.83



0.87


(4)










Nonaccrual loans



70.62



149.79


(7,917)










Nonperforming assets



66.25



121.56


(5,531)










Accruing TDRs



132.66



105.21


2,745










Nonperforming assets and accruing TDRs



44.18



56.40


(1,222)




























As a percent of total loans:


















Nonaccrual loans



1.18



0.58


60










Accruing TDRs



0.63



0.83


(20)










Nonaccrual loans and accruing TDRs



1.80



1.42


38




























As a percent of total loans+other real estate owned:


















Nonperforming assets



1.25



0.72


53










Nonperforming assets and accruing TDRs



1.88



1.55


33




























As a percent of total assets:


















Nonaccrual loans



0.98



0.47


51










Nonperforming assets



1.04



0.57


47










Accruing TDRs



0.52



0.66


(14)










Nonperforming assets and accruing TDRs



1.56



1.24


32










________________________

(1)  See the reconciliation table on page 16 of 16.


 

 

Shore Bancshares, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)












June 30, 2019




June 30, 


December 31, 


June 30, 


compared to




2019


2018


2018


December 31, 2018


ASSETS













Cash and due from banks


$

18,541


$

16,294


$

19,420


13.8

%

Interest-bearing deposits with other banks



20,739



50,931



24,059


(59.3)


Cash and cash equivalents



39,280



67,225



43,479


(41.6)















Investment securities available for sale (at fair value)



145,410



154,432



175,566


(5.8)


Investment securities held to maturity



5,905



6,043



6,168


(2.3)


Equity securities, at fair value



1,325



1,269



652


4.4


Restricted securities



5,095



6,476



7,578


(21.3)















Loans



1,240,295



1,195,355



1,156,884


3.8


Less: allowance for credit losses



(10,305)



(10,343)



(10,121)


(0.4)


Loans, net



1,229,990



1,185,012



1,146,763


3.8















Premises and equipment, net



22,710



22,711



22,906


(0.0)


Goodwill



17,518



17,518



17,518



Other intangible assets, net



2,540



2,857



4,369


(11.1)


Other real estate owned, net



524



1,222



1,569


(57.1)


Right of use assets, net



3,663







Other assets



14,602



17,678



13,876


(17.4)


Assets of discontinued operations





633



11,270


(100.0)















Total assets


$

1,488,562


$

1,483,076


$

1,451,714


0.4















LIABILITIES













Noninterest-bearing deposits


$

346,916


$

330,466


$

326,634


5.0


Interest-bearing deposits



902,084



881,875



848,465


2.3


Total deposits



1,249,000



1,212,341



1,175,099


3.0















Short-term borrowings



25,508



60,812



102,741


(58.1)


Long-term borrowings



15,000



15,000





Lease liabilities



3,663







Accrued expenses and other liabilities



4,084



8,415



5,117


(51.5)


Liabilities of discontinued operations





3,323



642


(100.0)


Total liabilities



1,297,255



1,299,891



1,283,599


(0.2)















COMMITMENTS AND CONTINGENCIES


























STOCKHOLDERS' EQUITY













Common stock, par value $0.01; authorized 35,000,000 shares



128



127



127


0.8


Additional paid in capital



65,376



65,434



65,562


(0.1)


Retained earnings



125,996



120,574



106,193


4.5


Accumulated other comprehensive (loss)



(193)



(2,950)



(3,767)


93.5


Total stockholders' equity



191,307



183,185



168,115


4.4















Total liabilities and stockholders' equity


$

1,488,562


$

1,483,076


$

1,451,714


0.4















Period-end common shares outstanding



12,780



12,749



12,747


0.2


Book value per common share


$

14.97


$

14.37


$

13.19


4.2


 

 

Shore Bancshares, Inc.

Consolidated Statements of Income

(In thousands, except per share data)




For the Three Months Ended



For the Six Months Ended




June 30, 


June 30, 




2019


2018


% Change


2019


2018


% Change


INTEREST INCOME


















Interest and fees on loans


$

13,749


$

12,631


8.9

%

$

27,248


$

24,675


10.4

%

Interest on investment securities:


















Taxable



887



982


(9.7)



1,885



2,003


(5.9)


Interest on deposits with other banks



113



61


85.2



276



99


178.8


Total interest income



14,749



13,674


7.9



29,409



26,777


9.8




















INTEREST EXPENSE


















Interest on deposits



2,204



580


280.0



4,151



1,128


268.0


Interest on short-term borrowings



145



461


(68.5)



358



687


(47.9)


Interest on long-term borrowings



107






213





Total interest expense



2,456



1,041


135.9



4,722



1,815


160.2




















NET INTEREST INCOME



12,293



12,633


(2.7)



24,687



24,962


(1.1)


Provision for credit losses



200



418


(52.2)



300



907


(66.9)




















NET INTEREST INCOME AFTER PROVISION


















FOR CREDIT LOSSES



12,093



12,215


(1.0)



24,387



24,055


1.4




















NONINTEREST INCOME


















Service charges on deposit accounts



1,028



947


8.6



1,962



1,852


5.9


Trust and investment fee income



385



414


(7.0)



757



814


(7.0)


Other noninterest income



1,196



935


27.9



2,078



1,770


17.4


Total noninterest income



2,609



2,296


13.6



4,797



4,436


8.1






































NONINTEREST EXPENSE


















Salaries and wages



3,792



4,101


(7.5)



7,558



8,327


(9.2)


Employee benefits



1,068



1,045


2.2



2,322



2,221


4.5


Occupancy expense



668



650


2.8



1,359



1,327


2.4


Furniture and equipment expense



295



247


19.4



558



502


11.2


Data processing



919



689


33.4



1,829



1,557


17.5


Directors' fees



116



152


(23.7)



202



266


(24.1)


Amortization of intangible assets



155



228


(32.0)



317



327


(3.1)


FDIC insurance premium expense



181



214


(15.4)



386



419


(7.9)


Other real estate owned expenses, net



60



5


1,100.0



293



(41)


814.6


Legal and professional fees



559



487


14.8



1,160



935


24.1


Other noninterest expenses



1,172



1,035


13.2



2,344



2,465


(4.9)


Total noninterest expense



8,985



8,853


1.5



18,328



18,305


0.1




















Income from continuing operations before income taxes



5,717



5,658


1.0



10,856



10,186


6.6


Income tax expense



1,489



1,466


1.6



2,800



2,532


10.6




















Income from continuing operations



4,228



4,192


0.9



8,056



7,654


5.3




















(Loss) income from discontinued operations before income taxes



(4)



269


(101.5)



(103)



1,048


(109.8)


Income tax (benefit) expense





70


(100.0)



(25)



253


(109.9)




















(Loss) Income from discontinued operations



(4)



199


(102.0)



(78)



795


(109.8)




















NET INCOME


$

4,224


$

4,391


(3.8)


$

7,978


$

8,449


(5.6)




















Weighted average shares outstanding - basic



12,779



12,744


0.3



12,774



12,730


0.3


Weighted average shares outstanding - diluted



12,784



12,757


0.2



12,779



12,743


0.3




















Basic net income per common share


















Income from continuing operations


$

0.33


$

0.33



$

0.63


$

0.60


5.0


(Loss) Income from discontinued operations





0.01


(100.0)



(0.01)



0.06


(116.7)


Net income


$

0.33


$

0.34


(2.9)


$

0.62


$

0.66


(6.1)




















Diluted net income per common share


















Income from continuing operations


$

0.33


$

0.33


-


$

0.63


$

0.60


5.0


(Loss) Income from discontinued operations





0.01


(100.0)



(0.01)



0.06


(116.7)


Net income


$

0.33


$

0.34


(2.9)


$

0.62


$

0.66


(6.1)




















Dividends paid per common share



0.10



0.08


25.0



0.20



0.15


33.3



 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets

(Dollars in thousands)




For the Three Months Ended


For the Six Months Ended




June 30, 


June 30, 




2019


2018


2019


2018




Average


Yield/


Average


Yield/


Average


Yield/


Average


Yield/




balance


rate


balance


rate


balance


rate


balance


rate


Earning assets






















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


$

1,221,215


4.53

%

$

1,141,296


4.45

%

$

1,211,618


4.55

%

$

1,123,852


4.44

%

Investment securities






















Taxable



159,878


2.22



186,453


2.11



162,429


2.34



191,839


2.09


Interest-bearing deposits



18,325


2.47



13,301


1.82



23,039


2.42



11,536


1.72


Total earning assets



1,399,418


4.24

%


1,341,050


4.10

%


1,397,086


4.26

%


1,327,227


4.08

%

Cash and due from banks



17,225





16,905





17,211





16,646




Other assets



61,906





78,185





60,340





77,266




Allowance for credit losses



(10,456)





(10,193)





(10,423)





(10,081)




Total assets


$

1,468,093




$

1,425,947




$

1,464,214




$

1,411,058
















































Interest-bearing liabilities






















Demand deposits


$

234,775


0.65

%

$

204,068


0.21

%

$

237,271


0.63

%

$

210,403


0.22

%

Money market and savings deposits



385,272


0.84



381,047


0.13



384,508


0.84



380,969


0.13


Brokered deposits



20,866


2.52



10,684


1.96



21,470


2.44



5,372


1.96


Certificates of deposit $100,000 or more



107,549


1.54



96,873


0.54



103,067


1.40



99,387


0.52


Other time deposits



145,900


1.31



146,946


0.45



143,226


1.16



149,619


0.46


Interest-bearing deposits



894,362


0.99



839,618


0.27



889,542


0.94



845,750


0.27


Short-term borrowings



21,557


2.70



91,980


2.01



27,239


2.65



74,381


1.86


Long-term borrowings



15,000


2.86






15,000


2.86





Total interest-bearing liabilities



930,919


1.06

%


931,598


0.44

%


931,781


1.02

%


920,131


0.40

%

Noninterest-bearing deposits



339,589





322,172





335,334





319,434




Accrued expenses and other liabilities



8,484





5,697





10,051





5,715




Stockholders' equity



189,101





166,480





187,048





165,778




Total liabilities and stockholders' equity


$

1,468,093




$

1,425,947




$

1,464,214




$

1,411,058


























Net interest spread





3.18

%




3.66

%




3.24

%




3.68

%

Net interest margin





3.54

%




3.79

%




3.57

%




3.80

%

____________________________

(1) All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of the alternative minimum tax rate 
     and nondeductible interest expense.

(2) Average loan balances include nonaccrual loans.

(3) Interest income on loans includes amortized loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations.

 

 

Shore Bancshares, Inc.

Financial Highlights By Quarter

(Dollars in thousands, except per share data)




2nd Quarter


1st Quarter


4th Quarter


3rd Quarter


2nd Quarter


Q2 2019


Q2 2019




2019


2019


2018


2018


2018


compared to


compared to




Q2 2019


Q1 2019


Q4 2018


Q3 2018


Q2 2018


Q1 2019


Q2 2018


PROFITABILITY FOR THE PERIOD





















Taxable-equivalent net interest income


$

12,334


$

12,428


$

12,756


$

12,975


$

12,661


(0.8)

%

(2.6)

%

Less: Taxable-equivalent adjustment



41



34



30



28



28


20.6


46.4


Net interest income



12,293



12,394



12,726



12,947



12,633


(0.8)


(2.7)


Provision for credit losses



200



100



460



307



418


100.0


(52.2)


Noninterest income



2,609



2,188



2,112



2,465



2,296


19.2


13.6


Noninterest expense



8,985



9,343



9,216



9,310



8,853


(3.8)


1.5


Income from continuing operations
before income taxes



5,717



5,139



5,162



5,795



5,658


11.2


1.0


Income tax expense



1,489



1,311



1,309



1,539



1,466


13.6


1.6


Income from continuing operations



4,228



3,828



3,853



4,256



4,192


10.4


0.9























(Loss) Income from discontinued
operations before income taxes



(4)



(99)



104



269



269


96.0


(101.5)


Gain on sale of insurance agency







12,736








Income tax expense (benefit)





(25)



4,599



71



70


100.0


(100.0)


(Loss) Income from discontinued
operations 



(4)



(74)



8,241



198



199


94.6


(102.0)























Net income


$

4,224


$

3,754


$

12,094


$

4,454


$

4,391


12.5


(3.8)























From Continuing Operations:





















Return on average assets



1.16

%


1.06

%


1.04

%


1.16

%


1.18

%

10

bp

(2)

bp

Return on average equity



8.97



8.39



8.83



9.92



10.10


58


(113)


Return on average tangible equity (1)



10.31



9.72



11.34



12.77



13.02


59


(271)


Net interest margin



3.54



3.61



3.58



3.76



3.79


(7)


(25)


Efficiency ratio - GAAP



60.29



64.07



62.11



60.41



59.30


(378)


99


Efficiency ratio - Non-GAAP (1)



59.09



62.81



60.18



58.55



57.67


(372)


142























PER SHARE DATA














...