Shore Bancshares, Inc. Reports 2026 Second Quarter Results

By PR Newswire | July 23, 2026, 4:00 PM

EASTON, Md., July 23, 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 second quarter of 2026 of $18.9 million, or $0.56 per diluted common share, compared to net income of $17.1 million, or $0.51 per diluted common share, for the first quarter of 2026, and net income of $15.5 million, or $0.46 per diluted common share, for the second quarter of 2025.

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Second Quarter 2026 Highlights

  • Net Income – Net income for the second quarter of 2026 increased $1.8 million to $18.9 million, from $17.1 million in the first quarter of 2026. Net income increased primarily due to a decrease in interest expense of $1.3 million, an increase in other noninterest income of $1.2 million and a decrease in salaries and employee benefits of $1.2 million. These increases were partially offset by a decrease in interest on deposits with other banks of $858 thousand and a higher provision for credit losses of $811 thousand. Net income for the six months ended June 30, 2026 was $36.0 million, compared to $29.3 million for the six months ended June 30, 2025.
  • Return on Average Assets ("ROAA") – The Company reported ROAA of 1.24% for the second quarter of 2026, compared to 1.12% for the first quarter of 2026 and 1.03% for the second quarter of 2025. Adjusted ROAA – non-U.S. generally accepted accounting principles ("GAAP")(1) was 1.34% for the second quarter of 2026, compared to 1.22% for the first quarter of 2026 and 1.15% for the second quarter of 2025.
  • Net Interest Margin ("NIM") – Net interest income for the second quarter of 2026 increased $364 thousand to $52.9 million compared to the first quarter of 2026. NIM increased 6 basis points ("bps") to 3.70% during the second quarter of 2026 compared to the first quarter of 2026. NIM excluding accretion(1) increased for the comparable periods from 3.35% to 3.45%. Excluding accretion interest, loan yields decreased 1 bp and funding costs decreased 8 bps for the comparable periods. Net interest income increased due to elevated accretion income and interest recoveries from loan payoffs coupled with a lower cost of deposits.
  • Capital Management – Book value per share increased to $18.44 at June 30, 2026 from $18.02 at March 31, 2026 and $16.94 at June 30, 2025. During the quarter ended June 30, 2026, the Company announced a $30 million share repurchase program and repurchased 40,093 shares of its outstanding common stock, or approximately $891 thousand. During the second quarter of 2026, the Company declared a dividend of $0.14 per share, which represents a $0.02, or 16.7% increase from the dividend paid in the prior quarter.
  • Asset Quality – Nonperforming assets were 1.09% of total assets at June 30, 2026, a decrease from 1.10% at March 31, 2026 and an increase from 0.33% at June 30, 2025. Classified assets were 1.41% of total assets at June 30, 2026, an increase when compared to 1.38% at March 31, 2026 and 0.37% at June 30, 2025. The allowance for credit losses ("ACL") was $58.7 million at June 30, 2026, compared to $58.5 million at March 31, 2026 and at June 30, 2025. The ACL as a percentage of loans decreased to 1.20% at June 30, 2026 compared to 1.21% at March 31, 2026 and at June 30, 2025.
  • Operating Leverage – The efficiency ratio for the second quarter of 2026 was 57.76%, compared to 61.97% in the first quarter of 2026 and 60.83% for the second quarter of 2025. The adjusted efficiency ratio – non-GAAP(1), which excludes amortization of intangibles, was 54.49% for the second quarter of 2026, compared to 58.57% for the first quarter of 2026 and 56.73% for the second quarter of 2025. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.

"Our second quarter results reflect the continued strength of our franchise and the progress we are making across the organization," stated James ("Jimmy") M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. "Another quarter of expanding net interest margin, record net interest income and record profitability demonstrates the benefits of disciplined balance sheet management, lower funding costs and our ongoing focus on operational execution.  Our improved earnings and capital generation allowed us to increase our quarterly dividend and launch a share repurchase program, underscoring the confidence our Board has in the long-term value of our franchise and our commitment to disciplined capital allocation.

We continue to closely monitor several commercial real estate relationships, overall asset quality remains supported by conservative underwriting, strong collateral values and solid reserve levels. We remain focused on executing our strategy, enhancing shareholder returns and positioning Shore Bancshares for sustainable long-term growth."

Balance Sheet Review

Total assets were $6.15 billion at June 30, 2026, a decrease of $54.6 million from March 31 ,2026. The decrease was primarily due to a decrease in interest bearing deposits of $92.4 million partially offset by an increase in loans of $29.7 million. Total assets decreased $107.4 million, or 1.7%, when compared to $6.26 billion at December 31, 2025. The decrease was primarily due to a decrease in cash and cash equivalents of $97.9 million and a decrease in our loan portfolio of $22.6 million, which were partially offset by an increase in our investment securities portfolio of $18.4 million. The decrease in cash and cash equivalents was primarily driven by seasonal run-off of municipal deposits.

CRE loans (excluding land and construction) were $2.60 billion at June 30, 2026 compared to $2.64 billion at December 31, 2025. The office CRE loan portfolio, which includes owner occupied and non-owner occupied CRE loans, was $475.9 million, or 9.8% of total loans at June 30, 2026. The following table provides the stratification of the classes of CRE loans (excluding land and construction) at June 30, 2026.





June 30, 2026





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



46.90 %



$          562



$      25,288



46.81 %



$        1,652



$      82,605

Office, govt. or govt. contractor



52.99



956



9,559



54.33



3,123



59,340

Office, other



47.17



474



83,886



49.03



1,328



215,210

Office, total



47.22



506



118,733



48.96



1,546



357,155

Retail



51.46



650



69,502



47.86



2,573



488,866

Multifamily (5+ units)









54.60



2,428



269,458

Hotel/motel









43.81



4,239



211,957

Industrial/warehouse



44.81



677



95,391



46.68



1,427



179,791

Commercial-improved



41.67



1,179



219,347



49.80



1,311



161,291

Marine/boat slips



28.65



758



16,671



36.03



1,459



7,294

Restaurant



49.09



1,012



53,632



48.47



1,020



41,834

Church



31.55



807



51,655



13.10



2,340



2,340

Land/lot loans



21.70



369



369



50.49



481



1,926

Other



39.15



1,290



107,062



31.82



539



148,740

Total CRE loans, gross



43.12



822



$     732,362



44.14



1,613



$   1,870,652

(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 included loans to medical tenants of $107.9 million, or 22.7% of the total office CRE loan portfolio, at June 30, 2026. The office CRE loan portfolio also included loans secured by buildings with government or government contractor tenants of $68.9 million, or 14.5% of the total office CRE loan portfolio at the same date. At June 30, 2026, the average loan debt service coverage ratio on the office CRE loan portfolio was 1.7x and the average LTV was 48.10%.

The 463 loans in the office CRE portfolio at June 30, 2026 had an average loan size of $1.0 million and a median loan size of $389 thousand. LTV estimates for the office CRE portfolio at June 30, 2026 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%



229



$             166,198



34.9 %

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



78



126,619



26.6

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



86



133,440



28.0

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



55



36,539



7.7

Greater than 80%



15



13,092



2.8

Total



463



$             475,888



100.0 %

There were 16 office CRE loans with balances greater than $5.0 million, totaling $147.8 million at June 30, 2026 and totaling $166.1 million at December 31, 2025. The decrease in this portfolio segment was the result of normal amortization and the payoff of one loan. 80.8% of the office CRE loan balance was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 97.0% was secured by properties with five stories or less. $17.6 million of these loan balances were classified as special mention or substandard at June 30, 2026. There were no charge-offs within the office CRE portfolio during the three and six months ended June 30, 2026 and 2025.

Nonperforming assets were $67.2 million and $68.4 million, or 1.09% and 1.10% of total assets, as of June 30, 2026 and March 31, 2026, respectively. Nonperforming assets primarily consist of three large loans with an aggregate loan balance of $44.4 million. These nonperforming loans primarily consist of multifamily and office commercial real estate loans with collateral in North Carolina and Virginia. As of June 30, 2026, these loans are well-secured by collateral and required minimal individual reserves. When comparing June 30, 2026 to June 30, 2025, nonperforming assets increased $47.6 million, primarily due to an increase in nonaccrual loans of $48.0 million, partially offset by a decrease in repossessed marine and auto loans of $274 thousand and a decrease in loans 90 days past due and accruing of $195 thousand. Substandard loans, which include nonaccrual loans and accruing loans 90 days or more past due, were $84.3 million at June 30, 2026 compared to $82.3 million at March 31, 2026 and $19.9 million at June 30, 2025.

Special mention loans decreased to $73.0 million at June 30, 2026 compared to $97.8 million at March 31, 2026 and increased compared to $65.6 million at June 30, 2025. As of June 30, 2026, there were four special mention loans with individual balances greater than $5.0 million, totaling $53.0 million. These loans consist primarily of multifamily commercial real estate and other commercial real estate exposures that are well-collateralized. Management does not currently expect material losses on these credits and is actively engaged in credit oversight and timely execution of workout strategies.

Total deposits decreased $61.9 million from March 31, 2026 to $5.40 billion at June 30, 2026 and decreased $134.1 million when compared to December 31, 2025. The year-to-date decrease in total deposits was primarily due to a decrease in money market and savings accounts of $104.4 million, a decrease in time deposits of $19.5 million and a decrease in interest-bearing checking of $19.0 million. These decreases were partially offset by an increase in noninterest-bearing deposits of $18.9 million. Core deposits, which exclude municipal cannabis deposits, increased by $71.7 million, or 1.7%, during the same period.

Total funding, which includes customer deposits, Federal Home Loan Bank ("FHLB") advances and brokered deposits, was $5.40 billion at June 30, 2026, compared to $5.46 billion at March 31, 2026. The Company had no FHLB advances at June 30, 2026 and March 31, 2026. Brokered deposits were $796 thousand and $11.0 million at June 30, 2026 and March 31, 2026, respectively. Total reciprocal deposits were $1.33 billion and $1.42 billion at June 30, 2026 and March 31, 2026, respectively.

Uninsured deposits were $975.6 million, or 18.1% of total deposits, at June 30, 2026. Uninsured deposits, excluding deposits secured with pledged collateral, were $838.9 million, or 15.5% of total deposits, at June 30, 2026. At June 30, 2026, available liquidity was $1.90 billion, including $911.9 million in secured borrowing capacity at the FHLB, $25.1 million in secured borrowing capacity through the FRB Discount Window, $396.1 million in unsecured lines of credit with other correspondent banks, $314.4 million in unpledged securities and $257.7 million in cash and cash equivalents.

Total stockholders' equity at June 30, 2026 increased $26.2 million, or 4.4%, when compared to December 31, 2025, primarily due to current year earnings, partially offset by cash dividends paid and an increase in accumulated other comprehensive losses. As of June 30, 2026 and 2025, the ratio of total equity to total assets was 10.02% and 9.36%, respectively. As of June 30, 2026, the ratio of total tangible equity to total tangible assets(1) was 8.69%, compared to 8.06% and 7.88% as of December 31, 2025 and June 30, 2025, respectively. The Company's Tier 1 and Total Risk-Based Capital Ratios at June 30, 2026 were 11.71% and 14.17%, respectively.

Review of Quarterly Financial Results

Net interest income was $52.9 million for the second quarter of 2026, compared to $52.6 million for the first quarter of 2026 and $47.2 million for the second quarter of 2025. The slight increase in net interest income when compared to the first quarter of 2026 was primarily due to a decrease in interest expense on deposits of $1.3 million, partially offset by a decrease in interest income on deposits at other banks of $858 thousand and a decrease in interest income on loans of $358 thousand. The increase in net interest income was $5.8 million when compared to the second quarter of 2025, and was primarily due to a decrease in interest expense on deposits of $4.4 million, an increase in interest on loans of $849 thousand and a decrease in interest expense on short-term borrowings of $589 thousand. These favorable changes were partially offset by an increase in interest expense on long-term borrowings of $177 thousand. The decrease in interest expense on deposits is reflective of the rate reductions during 2026.

The Company's NIM increased to 3.70% for the second quarter of 2026 from 3.64% for the first quarter of 2026, primarily due to lower interest expense on deposits, partially offset by lower accelerated accretion related to loan payoffs. NIM excluding accretion increased for the comparable periods from 3.35% to 3.45%. Excluding accretion interest income, loan yields decreased 1 bp and funding costs decreased 8 bps for the comparable periods. Interest expense for the second quarter of 2026 decreased $1.3 million compared to the first quarter of 2026, primarily due to lower rates during the quarter. The Company's NIM increased to 3.70% for the second quarter of 2026 from 3.34% for the second quarter of 2025. The Company's average interest-earning asset yield remained flat at 5.42% for the second quarter of 2026 compared to the second quarter of 2025, while the average cost of funds decreased 36 bps to 1.81% from 2.17% for the same periods.

The provision for credit losses was $896 thousand for the three months ended June 30, 2026. The comparable amounts were $85 thousand for the three months ended March 31, 2026 and $1.5 million for the three months ended June 30, 2025. The increase in the provision for credit losses for the second quarter of 2026 compared to the first quarter of 2026 was due to a higher unfunded commitments, partially offset by favorable credit outlook and lower net charge offs. Coverage ratios decreased to 1.20% at June 30, 2026 from 1.21% at March 31, 2026, and decreased compared to June 30, 2025. Net charge-offs decreased to $123 thousand for the second quarter of 2026 compared to $847 thousand for the first quarter of 2026 and $649 thousand for the second quarter of 2025. The decrease was driven by the consumer loan related write-offs during the first quarter of 2026.

Total noninterest income for the second quarter of 2026 was $8.8 million, an increase of $1.6 million from the first quarter of 2026. The increase in other noninterest income was primarily related to other fees for bank services. Total noninterest income decreased $576 thousand during the second quarter of 2026 when compared to the second quarter of 2025 due to lower mortgage related activity.

Total noninterest expense of $35.7 million for the second quarter of 2026 decreased $1.4 million compared to $37.1 million for the first quarter of 2026, and increased $1.3 million compared to $34.4 million for the second quarter of 2025. The decrease from the first quarter of 2026 was primarily due to a decrease in salaries and employee benefit expenses of $1.2 million and a decrease in professional service fees of $250 thousand. The decrease in salaries and employee benefits was primarily related to lower employee related taxes. The increase from the second quarter of 2025 was primarily due to an increase in salaries and employee benefits expense of $720 thousand and an increase in software and data processing costs of $516 thousand, partially offset by a decrease in amortization of other intangible assets of $297 thousand.

The efficiency ratio for the second quarter of 2026 when compared to the first quarter of 2026 and the second quarter of 2025 was 57.76%, 61.97% and 60.83%, respectively. Adjusted efficiency ratios – non-GAAP(1) for the same periods were 54.49%, 58.57% and 56.73%, respectively.

Review of Six Month Financial Results

Net interest income for the six months ended June 30, 2026 was $105.5 million, an increase of $12.4 million, or 13.3%, when compared to the six months ended June 30, 2025. The increase in net interest income was primarily due to an increase in total interest income of $3.4 million, or 2.2%, which included an increase in interest on loans of $4.1 million, or 3.0%, a decrease in interest on deposits with other banks of $939 thousand, or 18.8%, and an increase in interest income on taxable investments of $169 thousand. The increase in interest on loans was primarily due to the increase in the average balance of loans of $70.6 million, or 1.5%. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $8.2 million and lower short-term borrowings of  $1.2 million. These were partially offset by the increase in interest expense on long-term borrowings of $384 thousand as a result of lower FHLB borrowings and subordinated debt-related expenses that were classified as short term borrowings in 2025.

The Company's NIM increased from 3.28% for the six months ended June 30, 2025 to 3.67% for the six months ended June 30, 2026. Margins were higher due to a $64.8 million increase in interest-earning asset balances and a 6 bp increase in interest-earning asset yields. These positive movements were coupled with a lower cost of interest-bearing deposits. The increase in the average balances of interest-bearing deposits of $4.6 million was offset by a 44 basis point decrease in the associated rates paid, as well as a $49.2 million decrease in the average balance of FHLB advances and a 99 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 27 basis points and 24 basis points for the six months ended June 30, 2026 and 2025, respectively, which resulted in NIM excluding accretion of 3.40% and 3.04% for the same periods.

The provision for credit losses for the six months ended June 30, 2026 and 2025 was $1.0 million and $2.6 million, respectively. The decrease in the provision for credit losses during 2026 was due to improved economic conditions and lower net charge-offs, partially offset by higher reserves related to growth in the loan portfolio. Net charge-offs for the six months ended June 30, 2026 were $970 thousand, compared to $1.2 million for the six months ended June 30, 2025.

Total noninterest income for the six months ended June 30, 2026 decreased $466 thousand, or 2.8%, when compared to the same period in 2025. The decrease was primarily due to an $833 thousand decrease in other noninterest income and a $615 thousand decrease in mortgage banking revenue, partially offset by a $475 thousand increase in trust and investment fee income and a $293 thousand increase in interchange credits.

Total noninterest expense for the six months ended June 30, 2026 increased $4.6 million, or 6.7%, when compared to the same period in 2025. Noninterest expense line items increased primarily due to higher salaries and employee benefit expenses of $3.9 million and a $1.0 million increase in software and data processing expense. These increases were partially offset by lower amortization of intangible assets of $595 thousand during the six months ended June 30, 2026.

The efficiency ratio for the six months ended June 30, 2026 was 59.83% compared to 62.19% for the six months ended June 30, 2025. Adjusted efficiency ratios – non-GAAP(1) for the same periods were 56.50% and 57.95%, respectively.

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 contains 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. We also may make forward-looking statements in other documents filed with or furnished to the Securities and Exchange Commission, and our senior management may make forward-looking statements orally to investors, analysts, representatives of the media, and others. 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. We caution that the forward-looking statements are based largely on our expectations and information available at the time the statements are made and are subject to known and unknown risks and uncertainties that are subject to change based on factors, which in many instances are beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements. You should bear this in mind when reading this news release and not place undue reliance on these forward-looking statements.

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 risks identified in our Annual Report on Form 10-K for the year ended December 31, 2025, and in any subsequent filings with the Securities and Exchange Commission and 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.

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 (Unaudited)



























Q2 2026 vs.



Q2 2026 vs.



Six Months Ended June 30,

($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



Q1 2026



Q2 2025



2026



2025



2026 vs. 2025

PROFITABILITY FOR THE PERIOD









































Taxable-equivalent net interest income



$     53,005



$     52,644



$     50,294



$     48,501



$     47,244



0.7 %



12.2 %



$    105,649



$     93,222



13.3 %

Less: Taxable-equivalent adjustment



86



89



92



83



81



(3.4)



6.2



175



161



8.7

Net interest income



52,919



52,555



50,202



48,418



47,163



0.7



12.2



105,474



93,061



13.3

Provision for credit losses



896



85



2,827



2,992



1,528



954.1



(41.4)



981



2,556



(61.6)

Noninterest income



8,830



7,244



8,906



7,938



9,406



21.9



(6.1)



16,074



16,540



(2.8)

Noninterest expense



35,668



37,056



35,499



34,379



34,410



(3.7)



3.7



72,724



68,157



6.7

Income before income taxes



25,185



22,658



20,782



18,985



20,631



11.2



22.1



47,843



38,888



23.0

Income tax expense



6,320



5,570



4,895



4,637



5,124



13.5



23.3



11,890



9,617



23.6

NET INCOME



$     18,865



$     17,088



$     15,887



$     14,348



$     15,507



10.4



21.7



$     35,953



$     29,271



22.8











































Adjusted net income – non-GAAP(1)



$     20,344



$     18,581



$     17,416



$     15,889



$     17,215



9.5 %



18.2 %



$     38,925



$     32,696



19.1 %

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



26,081



22,743



23,609



21,977



22,159



14.7



17.7



48,824



41,444



17.8











































Return on average assets – GAAP



1.24 %



1.12 %



1.02 %



0.95 %



1.03 %



        12 bp



        21 bp



1.18 %



0.97 %



        21 bp 

Adjusted return on average assets – non-GAAP



1.34



1.22



1.11



1.05



1.15



12



19



1.28



1.09



19

Return on average common equity – GAAP



12.38



11.55



10.79



9.96



11.13



83



125



11.97



10.67



130

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



15.66



14.83



14.10



13.27



14.99



83



67



15.25



14.53



72

Net interest spread



2.85



2.80



2.48



2.45



2.37



5



48



2.82



2.32



50

Net interest margin



3.70



3.64



3.43



3.41



3.34



6



36



3.67



3.28



39

Efficiency ratio – GAAP



57.76



61.97



60.06



61.00



60.83



(421)



(307)



59.83



62.19



(236)

Adjusted efficiency ratio – non-GAAP(1)



54.49



58.57



56.59



57.30



56.73



(408)



(224)



56.50



57.95



(145)

Noninterest income to average assets



0.58



0.48



0.57



0.52



0.63



10



(5)



0.53



0.55



(2)

Noninterest expense to average assets



2.35



2.43



2.27



2.27



2.29



(8)



6



2.39



2.26



13











































PER SHARE DATA









































Basic net income per common share



$       0.56



$       0.51



$       0.48



$       0.43



$       0.46



9.8 %



21.7 %



$       1.08



$       0.88



22.7 %

Diluted net income per common share



0.56



0.51



0.48



0.43



0.46



9.8



21.7



1.07



0.88



21.6

Dividends paid per common share



0.14



0.12



0.12



0.12



0.12



16.7



16.7



0.26



0.24



8.3

Book value per common share at period end



18.44



18.02



17.65



17.27



16.94



2.3



8.9



18.44



16.94



8.9

Tangible book value per common share at period end –

non-GAAP(1)



15.77



15.30



14.87



14.43



14.03



3.1



12.4



15.77



14.03



12.4

Common share market value at period end



22.95



18.68



17.68



16.41



15.72



22.9



46.0



22.95



15.72



46.0

Common share intraday price:









































High



$      23.45



$      20.68



$      19.22



$      17.67



$      15.88



13.4 %



47.7 %



$      23.45



$      17.24



36.0 %

Low



17.91



17.25



14.93



14.96



11.47



3.8



56.1



17.25



11.47



50.4



























(1)

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

 

Shore Bancshares, Inc.

Financial Highlights By Quarter (Unaudited) – Continued



























Q2 2026 vs.



Q2 2026 vs.



Six Months Ended June 30,

($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



Q1 2026



Q2 2025



2026



2025



2026 vs. 2025

AVERAGE BALANCE SHEET DATA









































Loans



$  4,872,566



$  4,887,488



$  4,909,619



$  4,884,003



$  4,833,558



(0.3) %



0.8 %



$  4,879,986



$  4,809,409



1.5 %

Investment securities



684,762



666,376



653,639



664,535



683,680



2.8



0.2



675,620



674,220



0.2

Earning assets



5,731,054



5,823,244



5,843,816



5,658,981



5,660,409



(1.6)



1.2



5,776,894



5,712,117



1.1

Assets



6,080,508



6,174,655



6,206,753



6,020,574



6,021,385



(1.5)



1.0



6,127,321



6,075,339



0.9

Deposits



5,332,544



5,438,914



5,452,082



5,280,252



5,297,567



(2.0)



0.7



5,385,435



5,357,545



0.5

FHLB advances



1,648





20,108



52,391



50,000





(96.7)



829



50,000



(98.3)

Subordinated debt & TRUPS



89,082



89,024



104,752



74,363



74,102



0.1



20.2



89,053



73,971



20.4

Stockholders' equity



611,320



600,212



584,209



571,247



558,952



1.9



9.4



605,797



553,229



9.5











































CREDIT QUALITY DATA









































Net charge-offs



$        123



$        847



$      3,619



$      1,825



$        649



(85.5) %



(81.0) %



$        970



$      1,203



(19.4) %











































Nonaccrual loans



$     64,818



$     64,958



$     39,960



$     24,378



$     16,782



(0.2) %



286.2 %













Loans 90 days past due and still accruing



20





255



153



215





(90.7)













Other real estate owned and repossessed property



2,362



3,414



2,992



3,552



2,636



(30.8)



(10.4)













Total nonperforming assets



$     67,200



$     68,372



$     43,207



$     28,083



$     19,633



(1.7)



242.3













 

Shore Bancshares, Inc.

Financial Highlights By Quarter (Unaudited) – Continued



























Q2 2026 vs.



Q2 2026 vs.



Six Months Ended June 30,

($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



Q1 2026



Q2 2025



2026



2025



2026 vs 2025

CAPITAL AND CREDIT QUALITY RATIOS









































Period-end equity to assets – GAAP



10.02 %



9.71 %



9.42 %



9.19 %



9.36 %



        31 bp



        66 bp













Period-end tangible equity to tangible assets – non-

GAAP(1)



8.69



8.37



8.06



7.80



7.88



32



81























































Annualized net charge-offs to average loans



0.01 %



0.07 %



0.29 %



0.15 %



0.05 %



        (6) bp



        (4) bp



0.04 %



0.05 %



        (1) bp











































Allowance for credit losses as a percent of:









































Period-end loans



1.20 %



1.21 %



1.20 %



1.22 %



1.21 %



        (1) bp



        (1) bp













Period-end nonaccrual loans



90.62



90.03



147.24



244.29



348.49



59



(25,787)













Period-end nonperforming assets



87.41



85.53



136.17



212.06



297.88



188



(21,047)























































As a percent of total loans at period-end:









































Nonaccrual loans



1.33 %



1.34 %



0.82 %



0.50 %



0.35 %



        (1) bp



        98 bp























































As a percent of total loans, other real estate owned and

repossessed property at period-end:









































Nonperforming assets



1.38 %



1.41 %



0.88 %



0.57 %



0.41 %



        (3) bp



        97 bp























































As a percent of total assets at period-end:









































Nonaccrual loans



1.05 %



1.05 %



0.64 %



0.39 %



0.28 %



        — bp



        77 bp













Nonperforming assets



1.09



1.10



0.69



0.45



0.33



(1)



76







































(1)

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

 

Shore Bancshares, Inc.

Financial Highlights By Quarter (Unaudited) – Continued



























Q2 2026 vs.



Q2 2026 vs.

($ in thousands)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



Q1 2026



Q2 2025

Company Amounts





























Common Equity Tier 1 Capital



$ 541,577



$  525,849



$  510,729



$  496,709



$   483,947



2.99 %



11.91 %

Tier 1 Capital



571,904



556,096



540,897



526,794



513,952



2.84



11.28

Total Capital



691,720



674,811



660,451



627,055



618,793



2.51



11.79

Risk-Weighted Assets



4,882,618



4,794,374



4,852,573



4,867,237



4,890,679



1.84



(0.16)































Company Ratios





























Common Equity Tier 1 Capital to Risk-Weighted Assets ("RWA")



11.09 %



10.97 %



10.52 %



10.21 %



9.90 %



         12 bp



       119 bp

Tier 1 Capital to RWA



11.71



11.60



11.15



10.82



10.51



11



120

Total Capital to RWA



14.17



14.08



13.61



12.88



12.65



9



152

Tier 1 Capital to AA (Leverage)



9.52



9.12



8.82



8.86



8.65



40



87































Bank Amounts





























Common Equity Tier 1 Capital



$ 600,541



$  583,733



$  569,183



$  559,212



$  546,630



2.88 %



9.86 %

Tier 1 Capital



600,541



583,733



569,183



559,212



546,630



2.88



9.86

Total Capital



661,531



643,627



629,746



620,034



607,235



2.78



8.94

Risk-Weighted Assets



4,879,247



4,791,223



4,844,639



4,864,871



4,888,558



1.84



(0.19)































Bank Ratios





























Common Equity Tier 1 Capital to RWA



12.31 %



12.18 %



11.75 %



11.49 %



11.18 %



         13 bp



       113 bp

Tier 1 Capital to RWA



12.31



12.18



11.75



11.49



11.18



13



113

Total Capital to RWA



13.56



13.43



13.00



12.75



12.42



13



114

Tier 1 Capital to AA (Leverage)



10.00



9.58



9.30



9.41



9.20



42



80

 

Shore Bancshares, Inc.

Consolidated Balance Sheets



























June 30, 2026



June 30, 2026

























compared to



compared to

($ in thousands, except per share data)



June 30, 2026



March 31, 2026



December 31, 2025



September 30, 2025



June 30, 2025



March 31, 2026



June 30, 2025





(unaudited)



(unaudited)







(unaudited)



(unaudited)









ASSETS





























Cash and due from banks



$           53,335



$            44,054



$            50,164



$            62,289



$            54,512



21.1 %



(2.2) %

Interest-bearing deposits with other banks



204,335



296,768



305,402



354,224



130,472



(31.1)



56.6

Cash and cash equivalents



257,670



340,822



355,566



416,513



184,984



(24.4)



39.3

Investment securities:





























Available for sale, at fair value



287,369



264,026



220,358



181,720



187,679



8.8



53.1

Held to maturity, net of allowance for credit

losses



366,213



393,615



414,827



433,440



459,246



(7.0)



(20.3)

Equity securities, at fair value



6,218



6,195



6,186



6,113



6,010



0.4



3.5

Restricted securities, at cost



18,003



18,003



17,989



20,364



20,412





(11.8)

Loans held for sale, at fair value



30,827



24,034



32,540



21,500



34,319



28.3



(10.2)

Loans held for investment



4,877,749



4,848,030



4,900,302



4,882,969



4,827,628



0.6



1.0

Less: allowance for credit losses



(58,737)



(58,481)



(58,836)



(59,554)



(58,483)



0.4



0.4

Loans, net



4,819,012



4,789,549



4,841,466



4,823,415



4,769,145



0.6



1.0































Premises and equipment, net



79,580



80,137



80,168



80,812



81,426



(0.7)



(2.3)

Goodwill



63,266



63,266



63,266



63,266



63,266





Other intangible assets, net



25,767



27,742



29,722



31,722



33,761



(7.1)



(23.7)

Right-of-use assets



9,691



10,102



10,523



10,896



11,052



(4.1)



(12.3)

Cash surrender value on life insurance



107,724



106,684



105,839



105,055



105,860



1.0



1.8

Accrued interest receivable



20,021



20,676



18,551



20,408



19,821



(3.2)



1.0

Deferred income taxes



30,657



29,752



29,825



30,328



30,972



3.0



(1.0)

Other assets



29,413



31,460



31,992



32,927



29,921



(6.5)



(1.7)

TOTAL ASSETS



$        6,151,431



$        6,206,063



$        6,258,818



$         6,278,479



$        6,037,874



(0.9)



1.9

 

Shore Bancshares, Inc.

Consolidated Balance Sheets – Continued



























June 30, 2026



June 30, 2026

























compared to



compared to

($ in thousands, except per share data)



June 30, 2026



March 31, 2026



December 31, 2025



September 30, 2025



June 30, 2025



March 31, 2026



June 30, 2025





(unaudited)



(unaudited)







(unaudited)



(unaudited)









LIABILITIES





























Deposits:





























Noninterest-bearing



$        1,606,809



$        1,567,425



$        1,587,953



$         1,594,212



$        1,575,120



2.5 %



2.0 %

Interest-bearing checking



833,602



812,847



852,585



851,963



763,309



2.6



9.2

Money market and savings



1,710,570



1,795,619



1,814,928



1,790,001



1,691,438



(4.7)



1.1

Time deposits



1,247,973



1,274,766



1,267,487



1,281,132



1,273,285



(2.1)



(2.0)

Brokered deposits



796



10,963



10,911



10,857



10,806



(92.7)



(92.6)

Total deposits



5,399,750



5,461,620



5,533,864



5,528,165



5,313,958



(1.1)



1.6

FHLB advances









50,000



50,000





(100.0)

Guaranteed preferred beneficial interest in

junior subordinated debentures ("TRUPS"), net



30,327



30,247



30,168



30,085



30,005



0.3



1.1

Subordinated debt, net



58,825



58,782



58,893



44,409



44,236



0.1



33.0

Total borrowings



89,152



89,029



89,061



124,494



124,241



0.1



(28.2)

Lease liabilities



10,199



10,608



11,027



11,395



11,541



(3.9)



(11.6)

Other liabilities



36,255



42,092



34,993



37,218



22,940



(13.9)



58.0

TOTAL LIABILITIES



5,535,356



5,603,349



5,668,945



5,701,272



5,472,680



(1.2)



1.1

STOCKHOLDERS' EQUITY





























Common stock, $0.01 par value per share



334



335



334



334



334



(0.3)



Additional paid-in capital



361,048



361,013



360,554



359,939



359,063





0.6

Retained earnings



260,782



246,636



233,578



221,693



211,400



5.7



23.4

Accumulated other comprehensive loss



(6,089)



(5,270)



(4,593)



(4,759)



(5,603)



15.5



8.7

TOTAL STOCKHOLDERS' EQUITY



616,075



602,714



589,873



577,207



565,194



2.2



9.0

TOTAL LIABILITIES AND STOCKHOLDERS'

EQUITY



$        6,151,431



$        6,206,063



$        6,258,818



$         6,278,479



$        6,037,874



(0.9)



1.9































Shares of common stock issued and outstanding



33,416,336



33,451,063



33,413,503



33,421,672



33,374,265



(0.1) %



0.1 %

Book value per common share at period end



$             18.44



$             18.02



$             17.65



$             17.27



$             16.94



2.3



8.9

 

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter (Unaudited)



























Q2 2026 vs.



Q2 2026 vs.



Six Months Ended June 30,

($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



Q1 2026



Q2 2025



2026



2025



% Change

INTEREST INCOME









































Interest on loans



$    70,456



$    70,814



$    72,092



$    70,693



$    69,607



(0.5) %



1.2 %



$  141,270



$   137,123



3.0 %

Interest and dividends on taxable investment

securities



5,387



5,114



5,010



5,036



5,331



5.3



1.1



10,501



10,332



1.6

Interest and dividends on tax-exempt investment

securities



6



6



6



6



6







12



12



Interest on deposits with other banks



1,600



2,458



2,810



1,215



1,588



(34.9)



0.8



4,058



4,997



(18.8)

Total interest income



77,449



78,392



79,918



76,950



76,532



(1.2)



1.2



155,841



152,464



2.2











































INTEREST EXPENSE









































Interest on deposits



22,943



24,264



27,289



26,474



27,370



(5.4)



(16.2)



47,207



55,440



(14.9)

Interest on short-term borrowings



16





246



640



605





(97.4)



16



1,203



(98.7)

Interest on long-term borrowings



1,571



1,573



2,181



1,418



1,394



(0.1)



12.7



3,144



2,760



13.9

Total interest expense



24,530



25,837



29,716



28,532



29,369



(5.1)



(16.5)



50,367



59,403



(15.2)











































NET INTEREST INCOME



52,919



52,555



50,202



48,418



47,163



0.7



12.2



105,474



93,061



13.3

Provision for credit losses



896



85



2,827



2,992



1,528



954.1



(41.4)



981



2,556



(61.6)

NET INTEREST INCOME AFTER PROVISION

FOR CREDIT LOSSES



52,023



52,470



47,375



45,426



45,635



(0.9)



14.0



104,493



90,505



15.5











































NONINTEREST INCOME









































Service charges on deposit accounts



1,651



1,596



1,663



1,599



1,519



3.4



8.7



3,247



3,033



7.1

Trust and investment fee income



1,103



1,137



1,042



898



942



(3.0)



17.1



2,240



1,765



26.9

Mortgage banking revenue



1,554



1,450



1,181



1,278



2,379



7.2



(34.7)



3,004



3,619



(17.0)

Interchange credits



1,960



1,698



1,862



1,858



1,788



15.4



9.6



3,658



3,365



8.7

Other noninterest income



2,562



1,363



3,158



2,305



2,778



88.0



(7.8)



3,925



4,758



(17.5)

Total noninterest income



$     8,830



$     7,244



$     8,906



$     7,938



$     9,406



21.9



(6.1)



$    16,074



$    16,540



(2.8)

 

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter and Year (Unaudited) – Continued



























Q2 2026 vs.



Q2 2026 vs.



Six Months Ended June 30,

($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



Q1 2026



Q2 2025



2026



2025



% Change

NONINTEREST EXPENSE









































Salaries and employee benefits



$    18,462



$    19,639



$    18,582



$    18,642



$    17,742



(6.0) %



4.1 %



$    38,101



$    34,182



11.5 %

Occupancy expense



2,495



2,567



2,461



2,406



2,472



(2.8)



0.9



5,062



5,010



1.0

Furniture and equipment expense



966



855



792



892



797



13.0



21.2



1,821



1,650



10.4

Software and data processing



5,335



5,140



5,197



5,155



4,819



3.8



10.7



10,475



9,510



10.1

Amortization of other intangible assets



1,975



1,980



2,000



2,039



2,272



(0.3)



(13.1)



3,955



4,550



(13.1)

Legal and professional fees



1,355



1,605



1,237



989



1,225



(15.6)



10.6



2,960



2,838



4.3

FDIC insurance premium expense



968



995



845



794



1,023



(2.7)



(5.4)



1,963



2,114



(7.1)

Marketing and advertising



275



311



367



315



384



(11.6)



(28.4)



586



638



(8.2)

Fraud losses



147



111



227



45



83



32.4



77.1



258



188



37.2

Other noninterest expense



3,690



3,853



3,791



3,102



3,593



(4.2)



2.7



7,543



7,477



0.9

Total noninterest expense



35,668



37,056



35,499



34,379



34,410



(3.7)



3.7



72,724



68,157



6.7











































Income before income taxes



25,185



22,658



20,782



18,985



20,631



11.2



22.1



47,843



38,888



23.0

Income tax expense



6,320



5,570



4,895



4,637



5,124



13.5



23.3



11,890



9,617



23.6

NET INCOME



$    18,865



$    17,088



$    15,887



$    14,348



$    15,507



10.4



21.7



$    35,953



$    29,271



22.8











































Weighted average shares outstanding – basic



33,451,484



33,428,444



33,426,198



33,419,291



33,374,265



0.1 %



0.2 %



33,440,028



33,362,632



0.2 %

Weighted average shares outstanding – diluted



33,478,698



33,447,767



33,446,103



33,435,862



33,388,013



0.1 %



0.3 %



33,462,937



33,377,165



0.3 %











































Basic net income per common share



$      0.56



$      0.51



$      0.48



$      0.43



$      0.46



9.8 %



21.7 %



$      1.08



$      0.88



22.7 %

Diluted net income per common share



$      0.56



$      0.51



$      0.48



$      0.43



$      0.46



9.8 %



21.7 %



$      1.07



$      0.88



21.6 %











































Dividends paid per common share



$      0.14



$      0.12



$      0.12



$      0.12



$      0.12



16.7 %



16.7 %



$      0.26



$      0.24



8.3 %

 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited)







Three Months Ended





June 30, 2026



March 31, 2026



June 30, 2025

($ 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



$    2,586,937



$       38,169



5.92 %



$    2,601,316



$       39,029



6.08 %



$    2,572,931



$       37,240



5.81 %

Residential real estate



1,484,165



20,276



5.46



1,450,114



19,311



5.33



1,378,940



18,959



5.50

Construction



338,695



5,454



6.46



347,973



5,631



6.56



352,803



5,697



6.48

Commercial



208,349



3,041



5.85



221,542



3,296



6.03



224,218



3,654



6.54

Consumer



250,295



3,491



5.59



262,174



3,534



5.47



298,544



4,018



5.40

Credit cards



4,125



110



10.69



4,369



100



9.29



6,122



117



7.66

Total loans



4,872,566



70,541



5.80



4,887,488



70,901



5.86



4,833,558



69,685



5.78







































Investment securities





































Taxable



684,116



5,387



3.15



665,729



5,114



3.07



683,028



5,331



3.12

Tax-exempt(1)



646



7



4.33



647



8



4.95



652



8



4.91

Interest-bearing deposits



173,726



1,600



3.69



269,380



2,458



3.70



143,171



1,588



4.45

Total earning assets



5,731,054



77,535



5.42



5,823,244



78,481



5.44



5,660,409



76,612



5.42

Cash and due from banks



43,885











44,182











46,620









Other assets



364,155











365,971











372,725









Allowance for credit losses



(58,586)











(58,742)











(58,369)









Total assets



$    6,080,508











$    6,174,655











$    6,021,385









 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited) – Continued







Three Months Ended





June 30, 2026



March 31, 2026



June 30, 2025

($ in thousands)



Average

Balance



Interest



Yield/Rate



Average

Balance



Interest



Yield/Rate



Average

Balance



Interest



Yield/Rate

Interest-bearing liabilities





































Interest-bearing checking



$      733,877



$         4,560



2.49 %



$      780,713



$         4,840



2.51 %



$      720,967



$         5,697



3.17 %

Money market and savings deposits



1,744,356



8,079



1.86



1,812,071



8,696



1.95



1,747,854



9,580



2.20

Time deposits



1,258,086



10,288



3.28



1,270,156



10,624



3.39



1,258,802



12,000



3.82

Brokered deposits



4,033



16



1.59



11,107



104



3.80



9,720



92



3.80

Interest-bearing deposits(4)



3,740,352



22,943



2.46



3,874,047



24,264



2.54



3,737,343



27,369



2.94

FHLB advances



1,648



16



3.88









50,000



605



4.85

Subordinated debt and guaranteed

preferred beneficial interest in junior

subordinated debentures ("TRUPS")(4)



89,082



1,571



7.07



89,024



1,573



7.17



74,102



1,394



7.55

Total interest-bearing liabilities



3,831,082



24,530



2.57



3,963,071



25,837



2.64



3,861,445



29,368



3.05

Noninterest-bearing deposits



1,592,192











1,564,867











1,560,224









Accrued expenses and other liabilities



45,914











46,505











40,764









Stockholders' equity



611,320











600,212











558,952









Total liabilities and stockholders' equity



$    6,080,508











$    6,174,655











$    6,021,385















































Net interest spread











2.85 %











2.80 %











2.37 %

Net interest margin











3.70











3.64











3.34

Net interest margin excluding accretion(3)











3.45











3.35











3.09

Cost of funds











1.81











1.90











2.17

Cost of deposits











1.73











1.81











2.07

Cost of debt











7.02











7.17











6.46



























(1)

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

(2)

Average loan balances include nonaccrual loans.

(3)

Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $3.8 million, $4.3 million and $4.2 million of accretion interest on loans for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively.

(4)

Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were zero, zero and $435 thousand of amortization of deposit discounts and $79 thousand, $79 thousand and $232 thousand of amortization of borrowing fair value adjustments for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.

 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited) – Continued







Six Months Ended June 30,





2026



2025

($ in thousands)



Average Balance



Interest



Yield/Rate



Average Balance



Interest



Yield/Rate

Earning assets

























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

























Commercial real estate



$        2,594,087



$           77,198



6.00 %



$        2,557,316



$           73,066



5.76 %

Residential real estate



1,467,234



39,587



5.40



1,363,076



37,391



5.49

Construction



343,308



11,085



6.51



352,564



11,222



6.42

Commercial



214,909



6,337



5.95



228,535



7,349



6.48

Consumer



256,202



7,025



5.53



301,515



8,059



5.39

Credit cards



4,246



210



9.96



6,403



194



6.11

Total loans



4,879,986



141,442



5.83



4,809,409



137,281



5.74



























Investment securities

























Taxable



674,973



10,501



3.11



673,567



10,332



3.07

Tax-exempt(1)



647



15



4.64



653



15



4.59

Interest-bearing deposits



221,288



4,058



3.70



228,488



4,997



4.41

Total earning assets



5,776,894



156,016



5.43



5,712,117



152,625



5.37

Cash and due from banks



44,033











46,912









Other assets



365,058











374,641









Allowance for credit losses



(58,664)











(58,331)









Total assets



$        6,127,321











$        6,075,339









 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets (Unaudited) – Continued







Six Months Ended June 30,





2026



2025

($ in thousands)



Average Balance



Interest



Yield/Rate



Average Balance



Interest



Yield/Rate

Interest-bearing liabilities

























Interest-bearing checking



$         757,165



$            9,400



2.50 %



$          789,949



$           12,722



3.25 %

Money market and savings deposits



1,778,027



16,775



1.90



1,773,637



19,595



2.23

Time deposits



1,264,087



20,912



3.34



1,233,666



23,031



3.76

Brokered deposits



7,461



120



3.24



4,888



92



3.81

Interest-bearing deposits(4)



3,806,740



47,207



2.50



3,802,140



55,440



2.94

FHLB advances



829



16



3.86



50,000



1,203



4.85

Subordinated debt and TRUPS(4)



89,053



3,144



7.12



73,971



2,760



7.52

Total interest-bearing liabilities



3,896,622



50,367



2.61



3,926,111



59,403



3.05

Noninterest-bearing deposits



1,578,695











1,555,405









Accrued expenses and other liabilities



46,207











40,594









Stockholders' equity



605,797











553,229









Total liabilities and stockholders' equity



$        6,127,321











$        6,075,339



































Net interest spread











2.82 %











2.32 %

Net interest margin











3.67











3.28

Net interest margin excluding accretion(3)











3.40











3.04

Cost of funds











1.86











2.19

Cost of deposits











1.77











2.09

Cost of debt











7.09











6.45



























(1)

All amounts are reported on a taxable-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 $8.1 million and $8.0 million of accretion interest on loans for the six months ended June 30, 2026 and 2025, respectively.

(4)

Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were zero and $769 thousand of amortization of deposit discounts and $159 thousand and $463 thousand of amortization of borrowing fair value adjustments for the six months ended June 30, 2026 and 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.

 

Shore Bancshares, Inc.

Reconciliation of GAAP and Non-GAAP Measures (Unaudited)







Three Months Ended June 30,



Six Months Ended June 30,

($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



6/30/2026



6/30/2025

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

Net income



$    18,865



$     17,088



$     15,887



$     14,348



$     15,507



$    35,953



$     29,271

Annualized net income (A)



$    75,667



$     69,301



$     63,030



$     56,924



$     62,198



$    72,502



$     59,027































Net income



$    18,865



$     17,088



$     15,887



$     14,348



$     15,507



$    35,953



$     29,271

Add: amortization of other intangible assets, net of tax



1,479



1,493



1,529



1,541



1,708



2,972



3,425

Net income excluding amortization of other intangible assets –

non-GAAP



20,344



18,581



17,416



15,889



17,215



38,925



32,696

Annualized net income excluding amortization of other

intangible assets – non-GAAP (B)



$    81,600



$     75,356



$     69,096



$     63,038



$     69,049



$    78,495



$     65,934































Net income



$    18,865



$     17,088



$     15,887



$     14,348



$     15,507



$    35,953



$     29,271

Add: amortization of other intangible assets, net of tax



1,479



1,493



1,529



1,541



1,708



2,972



3,425

Adjusted net income – non-GAAP



20,344



18,581



17,416



15,889



17,215



38,925



32,696

Annualized adjusted net income – non-GAAP (C)



$    81,600



$     75,356



$     69,096



$     63,038



$     69,049



$    78,495



$     65,934































Net income



$    18,865



$     17,088



$     15,887



$     14,348



$     15,507



$    35,953



$     29,271

Less: income tax expense



6,320



5,570



4,895



4,637



5,124



11,890



9,617

Less: provision for credit losses



896



85



2,827



2,992



1,528



981



2,556

Pre-tax pre-provision net income – non-GAAP



$    26,081



$     22,743



$     23,609



$     21,977



$     22,159



$    48,824



$     41,444































Return on average assets – GAAP



1.24 %



1.12 %



1.02 %



0.95 %



1.03 %



1.18 %



0.97 %

Adjusted return on average assets – non-GAAP



1.34 %



1.22 %



1.11 %



1.05 %



1.15 %



1.28 %



1.09 %































Average assets



$ 6,080,508



$ 6,174,655



$ 6,206,753



$ 6,020,574



$ 6,021,385



$ 6,127,321



$ 6,075,339































Average stockholders' equity (D)



$   611,320



$   600,212



$   584,209



$   571,247



$   558,952



$   605,797



$   553,229

Less: average goodwill and core deposit intangible



(90,088)



(92,086)



(94,059)



(96,074)



(98,241)



(91,082)



(99,372)

Average tangible common equity (E)



$   521,232



$   508,126



$   490,150



$   475,173



$   460,711



$   514,715



$   453,857































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



12.38 %



11.55 %



10.79 %



9.96 %



11.13 %



11.97 %



10.67 %

Return on average tangible common equity – non-GAAP

(B)/(E)



15.66 %



14.83 %



14.10 %



13.27 %



14.99 %



15.25 %



14.53 %

 

Shore Bancshares, Inc.

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







Three Months Ended June 30,



Six Months Ended June 30,

($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025



6/30/2026



6/30/2025

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

Noninterest expense (F)



$    35,668



$     37,056



$     35,499



$     34,379



$     34,410



$    72,724



$     68,157

Less: amortization of other intangible assets



(1,975)



(1,980)



(2,000)



(2,039)



(2,272)



(3,955)



(4,550)

Adjusted noninterest expense (G)



$    33,693



$     35,076



$     33,499



$     32,340



$     32,138



$    68,769



$     63,607































Net interest income (H)



$    52,919



$     52,555



$     50,202



$     48,418



$     47,163



$   105,474



$     93,061

Add: taxable-equivalent adjustment



86



89



92



83



81



175



161

Taxable-equivalent net interest income (I)



$    53,005



$     52,644



$     50,294



$     48,501



$     47,244



$   105,649



$     93,222































Noninterest income (J)



$      8,830



$      7,244



$      8,906



$      7,938



$      9,406



$    16,074



$     16,540

Adjusted noninterest income (K)



$      8,830



$      7,244



$      8,906



$      7,938



$      9,406



$    16,074



$     16,540































Efficiency ratio – GAAP (F)/(H)+(J)



57.76 %



61.97 %



60.06 %



61.00 %



60.83 %



59.83 %



62.19 %

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



54.49 %



58.57 %



56.59 %



57.30 %



56.73 %



56.50 %



57.95 %

 

Shore Bancshares, Inc.

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



($ in thousands, except per share data)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025























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

Stockholders' equity (L)



$        616,075



$        602,714



$        589,873



$        577,207



$        565,194

Less: goodwill and core deposit intangible



(89,033)



(91,008)



(92,988)



(94,988)



(97,027)

Tangible common equity (M)



$        527,042



$        511,706



$        496,885



$        482,219



$        468,167























Shares of common stock outstanding (N)



33,416,336



33,451,063



33,413,503



33,421,672



33,374,265























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



$           18.44



$           18.02



$           17.65



$           17.27



$           16.94

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



$           15.77



$           15.30



$           14.87



$           14.43



$           14.03























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

Stockholders' equity (O)



$        616,075



$         602,714



$         589,873



$         577,207



$         565,194

Less: goodwill and core deposit intangible



(89,033)



(91,008)



(92,988)



(94,988)



(97,027)

Tangible common equity (P)



$        527,042



$         511,706



$         496,885



$         482,219



$         468,167























Assets (Q)



$      6,151,431



$      6,206,063



$      6,258,818



$      6,278,479



$      6,037,874

Less: goodwill and core deposit intangible



(89,033)



(91,008)



(92,988)



(94,988)



(97,027)

Tangible assets (R)



$      6,062,398



$      6,115,055



$      6,165,830



$      6,183,491



$      5,940,847























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



10.02 %



9.71 %



9.42 %



9.19 %



9.36 %

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



8.69 %



8.37 %



8.06 %



7.80 %



7.88 %



























(1)

Management believes that reporting the non-GAAP measures of tangible common equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes.

(2)

Management believes that reporting the adjusted efficiency ratio – non-GAAP 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)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025

Common equity



$     616,075



$      602,714



$      589,873



$      577,207



$      565,194

Goodwill(1)



(61,000)



(61,061)



(61,123)



(61,176)



(61,238)

Core deposit intangible(2)



(19,587)



(21,074)



(22,566)



(24,041)



(25,573)

DTAs that arise from net operating loss and tax credit carryforwards







(48)



(40)



(39)

Accumulated other comprehensive loss



6,089



5,270



4,593



4,759



5,603

Common Equity Tier 1 Capital



541,577



525,849



510,729



496,709



483,947

TRUPS



30,327



30,247



30,168



30,085



30,005

Tier 1 Capital



571,904



556,096



540,897



526,794



513,952

Allowable reserve for credit losses and other Tier 2 adjustments



60,991



59,933



60,661



60,852



60,605

Subordinated debt



58,825



58,782



58,893



39,409



44,236

Total Capital



$     691,720



$      674,811



$      660,451



$      627,055



$      618,793























Risk-Weighted Assets ("RWA")



$   4,882,618



$    4,794,374



$    4,852,573



$    4,867,237



$    4,890,679

Average Assets ("AA")



6,007,717



6,098,196



6,129,306



5,942,911



5,943,124























Common Equity Tier 1 Capital to RWA



11.09 %



10.97 %



10.52 %



10.21 %



9.90 %

Tier 1 Capital to RWA



11.71



11.60



11.15



10.82



10.51

Total Capital to RWA



14.17



14.08



13.61



12.88



12.65

Tier 1 Capital to AA (Leverage)



9.52



9.12



8.82



8.86



8.65

 

Shore Bancshares, Inc.

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



Regulatory Capital and Ratios for the Bank





















($ in thousands)



Q2 2026



Q1 2026



Q4 2025



Q3 2025



Q2 2025

Common equity



$     675,039



$      660,598



$      648,279



$      639,670



$      627,838

Goodwill(1)



(61,000)



(61,061)



(61,123)



(61,176)



(61,238)

Core deposit intangible(2)



(19,587)



(21,074)



(22,566)



(24,041)



(25,573)

Accumulated other comprehensive loss



6,089



5,270



4,593



4,759



5,603

Common Equity Tier 1 Capital



600,541



583,733



569,183



559,212



546,630

Tier 1 Capital



600,541



583,733



569,183



559,212



546,630

Allowable reserve for credit losses and other Tier 2 adjustments



60,990



59,894



60,563



60,822



60,605

Total Capital



$     661,531



$      643,627



$      629,746



$      620,034



$      607,235























Risk-Weighted Assets ("RWA")



$   4,879,247



$    4,791,223



$    4,844,639



$    4,864,871



$    4,888,558

Average Assets ("AA")



6,002,596



6,093,905



6,122,775



5,939,890



5,940,411



























(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)



June 30,

2026



% of Total

Loans



March 31,

2026



% of Total

Loans



December 31,

2025



% of Total

Loans



September 30,

2025



% of Total

Loans



June 30,

2025



% of Total

Loans

Commercial real estate



$  2,603,014



53.37 %



$  2,599,815



53.62 %



$  2,643,996



53.95 %



$  2,642,601



54.12 %



$  2,603,974



53.95 %

Residential real estate



1,470,401



30.15



1,425,733



29.41



1,414,964



28.88



1,383,348



28.33



1,349,010



27.94

Construction



337,779



6.92



342,835



7.07



344,903



7.04



352,116



7.21



350,053



7.25

Commercial



220,712



4.52



220,833



4.56



226,006



4.61



221,598



4.54



224,092



4.64

Consumer



241,751



4.96



254,478



5.25



265,912



5.43



278,242



5.70



294,239



6.09

Credit cards



4,092



0.08



4,336



0.09



4,521



0.09



5,064



0.10



6,260



0.13

Total loans



4,877,749



100.00 %



4,848,030



100.00 %



4,900,302



100.00 %



4,882,969



100.00 %



4,827,628



100.00 %

Less: allowance for

credit losses



(58,737)







(58,481)







(58,836)







(59,554)







(58,483)





Total loans, net



$  4,819,012







$  4,789,549







$  4,841,466







$  4,823,415







$  4,769,145





 

Shore Bancshares, Inc.

Classified Assets and Nonperforming Assets (Unaudited) 



Classified assets and nonperforming assets are summarized as follows:



($ in thousands)



June 30, 2026



March 31, 2026



December 31, 2025



September 30, 2025



June 30, 2025























Classified loans





















Substandard



$           84,285



$            82,337



$            57,366



$            48,470



$            19,930

Total classified loans



84,285



82,337



57,366



48,470



19,930

Special mention loans



72,957



97,771



73,401



70,997



65,564

Total classified and special mention loans



$          157,242



$          180,108



$          130,767



$          119,467



$            85,494























Classified loans



$           84,285



$            82,337



$            57,366



$            48,470



$            19,930

Other real estate owned





69



113



120



179

Repossessed assets



2,362



3,345



2,879



3,432



2,457

Total classified assets



$           86,647



$            85,751



$            60,358



$            52,022



$            22,566























Classified assets to total assets



1.41 %



1.38 %



0.96 %



0.83 %



0.37 %























Nonaccrual loans



$           64,818



$            64,958



$            39,960



$            24,378



$            16,782

90+ days delinquent accruing



20





255



153



215

Other real estate owned ("OREO")





69



113



120



179

Repossessed property



2,362



3,345



2,879



3,432



2,457

Total nonperforming assets



$           67,200



$            68,372



$            43,207



$            28,083



$            19,633

Accruing borrowers experiencing financial difficulty loans ("BEFD")



140



5,263



5,311



6,704



6,709

Total nonperforming assets and BEFDs modifications



$           67,340



$            73,635



$            48,518



$            34,787



$            26,342























Nonperforming assets to total assets



1.09 %



1.10 %



0.69 %



0.45 %



0.33 %























Total assets



$        6,151,431



$        6,206,063



$        6,258,818



$        6,278,479



$        6,037,874

 

Cision
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SOURCE Shore Bancshares, Inc.

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