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

By PR Newswire | January 28, 2026, 4:00 PM

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

 

Cision
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SOURCE Shore Bancshares, Inc.

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