Shore Bancshares Reports Third Quarter and Nine-Month Results

EASTON, Md., Oct. 24, 2019 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ - SHBI) (the "Company") reported net income of $4.206 million or $0.33 per diluted common share for the third quarter of 2019, compared to net income of $4.224 million or $0.33 per diluted common share for the second quarter of 2019, and net income of $4.454 million or $0.35 per diluted common share for the third quarter of 2018.  Net income from continuing operations for the third quarter of 2019 was $4.214 million or $0.33 per diluted common share, compared to net income from continuing operations of $4.228 million or $0.33 per diluted common share for the second quarter of 2019, and net income from continuing operations of $4.256 million or $0.33 per diluted common share for the third quarter of 2018. The Company reported net income of $12.184 million or $0.95 per diluted common share for the first nine months of 2019, compared to net income of $12.903 million or $1.01 per diluted common share for the first nine months of 2018. Net income from continuing operations for the first nine months of 2019 was $12.270 million or $0.96 per diluted common share, compared to net income from continuing operations of $11.910 million or $0.93 per diluted common share for the first nine months of 2018.

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

When comparing net income from continuing operations for the third quarter of 2019 to the second quarter of 2019, net interest income increased $387 thousand, offset by an increase in noninterest expenses of $399 thousand.  When comparing net income from continuing operations for the third quarter of 2019 to the third quarter of 2018, the decrease was due to lower net interest income of $267 thousand and higher noninterest expenses of $74 thousand, offset by a lower provision for credit losses of $107 thousand and higher noninterest income of $64 thousand.

"During the third quarter we experienced significant growth in deposits resulting in stable earnings for the quarter," said Lloyd L. "Scott" Beatty, Jr., President and Chief Executive Officer.  "Our loan demand remains strong and the lack of growth in the third quarter was partially a result of deals being delayed into the fourth quarter, coupled with some significant payoffs. During the third quarter, the Company began repurchasing its shares under the stock repurchase plan approved in April of 2019. As of September 30, 2019, the Company had repurchased 36,700 shares for approximately $558 thousand.  As we move forward into the last quarter of the year, we remain focused on continuing to grow our loan portfolio, repurchasing shares and increasing our market share within our footprint."  

Balance Sheet Review

Total assets were $1.562 billion at September 30, 2019, a $78.6 million, or 5.3%, increase when compared to $1.483 billion at the end of 2018.  The increase was primarily due to total deposits increasing $113.1 million or 9.3%.  The significant growth in deposits funded increases in loans of $39.7 million, or 3.3%, interest-bearing deposits with other banks of $29.7 million, or 58.2%, and other assets of $12.9 million, or 72.9%, which includes the purchase of approximately $14 million of bank owned life insurance ("BOLI") during the third quarter of 2019.  In addition, the increase in deposits allowed the Company to decrease its short-term borrowings by $43.5 million or 71.6%.  

Total deposits increased $113.1 million, or 9.3%, when compared to December 31, 2018.  The increase in total deposits primarily consisted of increases in interest-bearing checking deposits of $48.7 million, noninterest-bearing deposits of $32.1 million, time deposits greater than $100 thousand of $25.2 million, other time deposits of $8.8 million and savings and money market accounts of $8.3 million, partially offset by a decrease in brokered deposits of $10.0 million

Total stockholders' equity increased $10.8 million, or 5.9%, when compared to the end of 2018. At September 30, 2019, the ratio of total equity to total assets was 12.42% and the ratio of total tangible equity to total tangible assets was 11.29%.

Total assets at September 30, 2019 increased $88.1 million, or 6.0%, when compared to total assets at September 30, 2018.  The primary reason for the increase was due to total deposits increasing $143.7 million or 12.2%.  The significant growth in deposits funded increases in loans of $54.5 million or 4.6%, interest-bearing deposits with other banks of $50.7 million or 169.4% and other assets of $15.4 million or 102.0%, partially offset by a decrease in investment securities available for sale of $28.8 million or 17.2%. In addition, the increase in deposits allowed the Company to decrease its short-term borrowings by $96.8 million or 84.9%.

Total deposits at September 30, 2019 increased $143.7 million, or 12.2%, when compared to September 30, 2018.  The increase in total deposits primarily consisted of increases in interest-bearing checking deposits of $73.6 million, noninterest-bearing deposits of $30.8 million, time deposits greater than $100 thousand of $26.6 million, savings and money market accounts of $19.2 million, and other time deposits of $4.8 million partially offset by a decrease in brokered deposits of $11.5 million.  Total stockholders' equity increased $22.5 million, or 13.2%, when compared to September 30, 2018. 

Review of Quarterly Financial Results

Net interest income was $12.7 million for the third quarter of 2019, compared to $12.3 million for the second quarter of 2019 and $12.9 million for the third quarter of 2018. The primary reasons for the increase in net interest income when compared to the second quarter of 2019 were loan growth late in the second quarter allowing a full quarter of earning interest, coupled with an extra day of earning interest on legacy loans as well as an increase in interest-bearing deposits with other banks of $59.8 million.  Interest on deposits increased $84 thousand and was partially offset by a decrease in interest on short-term borrowings of $28 thousand when comparing the third quarter of 2019 to the second quarter of 2019. Net interest income decreased when compared to the third quarter of 2018 due to an increase in interest expense of $1.2 million, partially offset by an increase in interest income of $957 thousand. The improvement in interest income was the result of increases in the average balances of loans of $60.9 million or 5.2% and interest-bearing deposits with other banks of $24.1 million or 137.6%. The Company's net interest margin decreased to 3.52% from 3.54% in the second quarter of 2019 and decreased from 3.76% in the third quarter of 2018.  The decline in net interest margin from the second quarter of 2019 was due to a higher average balance in interest-bearing deposits with other banks, which experienced a decrease in yield of 34bps. The decline in net interest margin from the third quarter of 2018 was due to an increase in rates paid on all interest-bearing liabilities, most significantly interest-bearing deposits which experienced an increase in the average balance of $61.7 million and rates paid on these deposits of 62bps, partially offset by an increase in the average balance of total earnings assets $61.7 million and a yield of 9bps. 

The provision for credit losses was $200 thousand for the three months ended September 30, 2019.  The comparable amounts were $200 thousand and $307 thousand for the three months ended June 30, 2019 and September 30, 2018, respectively. The provision for credit losses remained unchanged from the second quarter of 2019 due to stagnant growth within the loan portfolio.  The decrease in the amount of provision for credit losses from the third quarter of 2018 was due to lower loan growth in the third quarter of 2019. Net charge-offs were $67 thousand for the third quarter of 2019, $313 thousand for the second quarter of 2019 and $100 thousand for the third quarter of 2018.  The ratio of annualized net charge-offs to average loans was 0.02% for the third quarter of 2019, 0.10% for the second quarter of 2019 and 0.03% for the third quarter of 2018.  The ratio of the allowance for credit losses to period-end loans was 0.85% at September 30, 2019, slightly higher than the 0.83% at June 30, 2019 and lower than the 0.87% at September 30, 2018.

At September 30, 2019, nonperforming assets were $13.3 million, a decrease of $2.2 million, or 14.4%, when compared to June 30, 2019, primarily due to a decrease in nonaccrual loans of $2.1, or 14.1%. Other real estate owned decreased $450 thousand, or 85.9% and accruing troubled debt restructurings ("TDRs") decreased $180 thousand, or 2.3% over the same time period. When comparing September 30, 2019 to September 30, 2018, nonperforming assets increased $4.4 million, or 49.9%, and accruing TDRs decreased $1.3 million, or 15.1%. The increase in nonperforming assets was due to a large nonaccrual loan with an outstanding loan balance of $7.5 million added late in the fourth quarter of 2018, in which the Company does not anticipate any further losses. The ratio of nonperforming assets and accruing TDRs to total assets was 1.34%, 1.56% and 1.21% at September 30, 2019, June 30, 2019 and September 30, 2018, respectively.  In addition, the ratio of accruing TDRs to total loans at September 30, 2019 was 0.61% at September 30, 2019, compared to 0.63% at June 30, 2019 and 0.76% at September 30, 2018.

Total noninterest income from continuing operations for the third quarter of 2019 decreased $80 thousand when compared to the second quarter of 2019 and increased $64 thousand when compared to the third quarter of 2018.  The decrease from the second quarter of 2019 was the result of a decrease in service charges on deposit accounts and additional fees on bank service charges included in other noninterest income.  The increase from the third quarter of 2018 was due to higher loan fees and additional fees on bank service charges.

Total noninterest expense from continuing operations for the third quarter of 2019 increased $399 thousand when compared to the second quarter of 2019 and increased $74 thousand when compared to the third quarter of 2018.  The increase in noninterest expense compared to the second quarter of 2019 was primarily due to higher employee benefits, which included the funding of a new supplemental executive retirement plan, a write down on an other real estate owned property and other loan expenses, partially offset by lower FDIC insurance premiums for the quarter due to an FDIC assessment credit for banks under $10 billion. The slight increase in noninterest expenses from the third quarter of 2018 was primarily due to increases in employee benefits and other loan and service costs, almost entirely offset by lower salaries and wages, amortization on intangible assets and FDIC insurance premiums.      

Review of Nine-Month Financial Results

Net interest income for the first nine months of 2019 was $37.4 million, a decrease of $542 thousand, or 1.4%, when compared to the first nine months of 2018.  The decrease was the direct result of an increase in interest expense on deposits, which was partially offset by an increase in interest and fees on loans. The average balance on loans increased $78.7 million and the yield on loans increased 10bps when comparing the periods.  This increase in volume and yields on loans was offset by an increase in the average balance of interest-bearing deposits of $49.7 million, with an associated increase in rates paid on these deposits of 66bps. This resulted in a net interest margin of 3.56% for the first nine months of 2019 compared to 3.79% for the first nine months of 2018.   

The provision for credit losses for the nine months ended September 30, 2019 and 2018 was $500 thousand and $1.2 million, respectively, while net charge-offs were $405 thousand and $667 thousand, respectively.  The decrease in provision for credit losses was the result of improved overall credit quality exclusive of the one large relationship mentioned above and lower net charge-offs for the first nine months of 2019 compared to the first nine months of 2018.  In addition, loan growth in the first nine months of 2019 has lagged the first nine months of 2018. The ratio of annualized net charge-offs to average loans was 0.04% for the first nine months of 2019 and 0.08% for the first nine months of 2018.

Total noninterest income from continuing operations for the nine months ended September 30, 2019 increased $426 thousand, or 6.2%, when compared to the same period in 2018. The increase in noninterest income primarily consisted of increases in service charges on deposit accounts and other fees on bank services. 

Total noninterest expense from continuing operations for the nine months ended September 30, 2019 increased $98 thousand, or 0.4%, when compared to the same period in 2018. Despite the insignificant aggregate increase in total noninterest expenses, salaries and wages decreased $1.1 million and FDIC insurance premiums decreased $226 thousand, which were offset by increases in employee benefits of $417 thousand, data processing of $314 thousand, legal and professional fees of $277 thousand and other real estate owned expenses of $301 thousand

Shore Bancshares Information

Shore Bancshares is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland's Eastern Shore. It is the parent company of Shore United Bank. Shore Bancshares engages in trust and wealth management services through Wye Financial & Trust, a division of Shore United Bank.  Additional information is available at www.shorebancshares.com.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions.

Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled "Risk Factors".

The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

 

Shore Bancshares, Inc.

Financial Highlights

(Dollars in thousands, except per share data)









































For the Three Months Ended



For the Nine Months Ended







September 30, 



September 30, 







2019



2018



 Change



2019



2018



 Change



PROFITABILITY FOR THE PERIOD



































Net interest income



$

12,680



$

12,947



(2.1)

%

$

37,367



$

37,909



(1.4)

%

Provision for credit losses





200





307



(34.9)





500





1,214



(58.8)



Noninterest income





2,529





2,465



2.6





7,326





6,901



6.2



Noninterest expense





9,384





9,310



0.8





27,712





27,615



0.4



Income from continuing operations before income taxes





5,625





5,795



(2.9)





16,481





15,981



3.1



Income tax expense





1,411





1,539



(8.3)





4,211





4,071



3.4



Income from continuing operations 



$

4,214



$

4,256



(1.0)



$

12,270



$

11,910



3.0







































(Loss) Income from discontinued operations before income taxes





(10)





269



(103.7)





(113)





1,317



(108.6)



Income tax expense (benefit)





(2)





71



(102.8)





(27)





324



(108.3)



(Loss) Income from discontinued operations 





(8)





198



(104.0)





(86)





993



(108.7)



Net income



$

4,206



$

4,454



(5.6)



$

12,184



$

12,903



(5.6)







































From Continuing Operations:



































Return on average assets





1.10

%



1.16

%

(6)

bp



1.11

%



1.12

%

(1)

bp

Return on average equity





8.66





9.92



(126)





8.68





9.52



(84)



Return on average tangible equity (1)





9.90





12.77



(287)





9.98





12.26



(228)



Net interest margin





3.52





3.76



(24)





3.56





3.79



(23)



Efficiency ratio - GAAP





61.70





60.41



129





62.01





61.63



38



Efficiency ratio - Non-GAAP (1)





60.58





58.55



203





60.81





60.11



70







































PER SHARE DATA



































Basic net income per common share



































Income from continuing operations



$

0.33



$

0.33



%

$

0.96



$

0.93



3.2

%

(Loss) Income from discontinued operations









0.02



(100.0)





(0.01)





0.08



(112.5)



Net income



$

0.33



$

0.35



(5.7)



$

0.95



$

1.01



(5.9)



Diluted net income per common share



































Income from continuing operations



$

0.33



$

0.33





$

0.96



$

0.93



3.2



(Loss) Income from discontinued operations









0.02



(100.0)





(0.01)





0.08



(112.5)



Net income



$

0.33



$

0.35



(5.7)



$

0.95



$

1.01



(5.9)







































Dividends paid per common share





0.10





0.08



25.0





0.30





0.23



30.4



Book value per common share at period end





15.22





13.45



13.2



















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





13.66





10.96



24.6



















Market value at period end





15.41





17.82



(13.5)



















Market range:



































High





17.00





19.84



(14.3)





17.00





20.09



(15.4)



Low





14.90





16.63



(10.4)





14.00





16.28



(14.0)







































AVERAGE BALANCE SHEET DATA



































Loans



$

1,235,374



$

1,174,513



5.2

%

$

1,219,623



$

1,140,925



6.9

%

Investment securities





155,324





178,572



(13.0)





160,035





186,936



(14.4)



Earning assets





1,432,252





1,370,573



4.5





1,408,937





1,341,403



5.0



Assets





1,513,790





1,457,074



3.9





1,480,813





1,426,504



3.8



Deposits





1,280,057





1,192,845



7.3





1,243,472





1,174,505



5.9



Stockholders' equity





193,120





170,299



13.4





189,094





167,288



13.0



 





































CREDIT QUALITY DATA



































Net charge-offs



$

67



$

100



(33.0)

%

$

405



$

667



(39.3)

%





































Nonaccrual loans



$

12,530



$

7,362



70.2



















Loans 90 days past due and still accruing





712





3



23,633.3



















Other real estate owned





74





1,518



(95.1)



















Total nonperforming assets





13,316





8,883



49.9



















Accruing troubled debt restructurings (TDRs)





7,588





8,933



(15.1)



















Total nonperforming assets and accruing TDRs



$

20,904



$

17,816



17.3



























































































CAPITAL AND CREDIT QUALITY RATIOS



































Period-end equity to assets





12.42

%



11.63

%

79

bp

















Period-end tangible equity to tangible assets (1)





11.29





9.69



160























































Annualized net charge-offs to average loans





0.02





0.03



(1)





0.04

%



0.08

%

(4)

bp





































Allowance for credit losses as a percent of:



































Period-end loans





0.85





0.87



(2)



















Nonaccrual loans





83.30





140.29



(5,699)



















Nonperforming assets





78.39





116.27



(3,788)



















Accruing TDRs





137.56





115.62



2,194



















Nonperforming assets and accruing TDRs





49.93





57.97



(804)























































As a percent of total loans:



































Nonaccrual loans





1.01





0.62



39



















Accruing TDRs





0.61





0.76



(15)



















Nonaccrual loans and accruing TDRs





1.63





1.38



25























































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



































Nonperforming assets





1.08





0.75



33



















Nonperforming assets and accruing TDRs





1.69





1.51



18























































As a percent of total assets:



































Nonaccrual loans





0.80





0.50



30



















Nonperforming assets





0.85





0.60



25



















Accruing TDRs





0.49





0.61



(12)



















Nonperforming assets and accruing TDRs





1.34





1.21



13























































(1)

See the reconciliation table on page 17 of 17.



 

 

Shore Bancshares, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

















































September 30, 2019









September 30, 





December 31, 



September 30, 



compared to







2019



2018



2018



December 31, 2018



ASSETS

























Cash and due from banks



$

22,777



$

16,294



$

18,859



39.8

%

Interest-bearing deposits with other banks





80,596





50,931





29,918



58.2



Cash and cash equivalents





103,373





67,225





48,777



53.8





























Investment securities available for sale (at fair value)





138,911





154,432





167,675



(10.1)



Investment securities held to maturity





9,780





6,043





6,037



61.8



Equity securities, at fair value





1,339





1,269





649



5.5



Restricted securities





4,655





6,476





8,110



(28.1)





























Loans





1,235,035





1,195,355





1,180,557



3.3



Less: allowance for credit losses





(10,438)





(10,343)





(10,328)



0.9



Loans, net





1,224,597





1,185,012





1,170,229



3.3





























Premises and equipment, net





23,871





22,711





22,866



5.1



Goodwill





17,518





17,518





17,518





Other intangible assets, net





2,396





2,857





4,088



(16.1)



Other real estate owned, net





74





1,222





1,518



(93.9)



Right of use assets, net





4,908













Other assets





30,257





17,678





15,129



71.2



Assets of discontinued operations









633





10,947



(100.0)





























Total assets



$

1,561,679



$

1,483,076



$

1,473,543



5.3





























LIABILITIES

























Noninterest-bearing deposits



$

362,557



$

330,466



$

331,766



9.7



Interest-bearing deposits





962,934





881,875





850,070



9.2



Total deposits





1,325,491





1,212,341





1,181,836



9.3





























Short-term borrowings





17,263





60,812





114,043



(71.6)



Long-term borrowings





15,000





15,000









Lease liabilities





4,923













Accrued expenses and other liabilities





5,039





8,415





5,893



(40.1)



Liabilities of discontinued operations









3,323





352



(100.0)



Total liabilities





1,367,716





1,299,891





1,302,124



5.2





























COMMITMENTS AND CONTINGENCIES



















































STOCKHOLDERS' EQUITY

























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





127





127





127





Additional paid in capital





64,879





65,434





65,730



(0.8)



Retained earnings





128,924





120,574





109,628



6.9



Accumulated other comprehensive (loss)





33





(2,950)





(4,066)



101.1



Total stockholders' equity





193,963





183,185





171,419



5.9





























Total liabilities and stockholders' equity



$

1,561,679



$

1,483,076



$

1,473,543



5.3





























Period-end common shares outstanding





12,742





12,749





12,748



(0.1)



Book value per common share



$

15.22



$

14.37



$

13.45



5.9



 

 

Shore Bancshares, Inc.

Consolidated Statements of Income

(In thousands, except per share data)









































For the Three Months Ended





For the Nine Months Ended







September 30, 



September 30, 







2019



2018



% Change



2019



2018



% Change



INTEREST INCOME



































Interest and fees on loans



$

14,100



$

13,205



6.8

%

$

41,348



$

37,880



9.2

%

Interest on investment securities:



































Taxable





870





947



(8.1)





2,755





2,950



(6.6)



Interest on deposits with other banks





223





84



165.5





499





183



172.7



Total interest income





15,193





14,236



6.7





44,602





41,013



8.8







































INTEREST EXPENSE



































Interest on deposits





2,288





826



177.0





6,439





1,954



229.5



Interest on short-term borrowings





117





463



(74.7)





475





1,150



(58.7)



Interest on long-term borrowings





108











321









Total interest expense





2,513





1,289



95.0





7,235





3,104



133.1







































NET INTEREST INCOME





12,680





12,947



(2.1)





37,367





37,909



(1.4)



Provision for credit losses





200





307



(34.9)





500





1,214



(58.8)







































NET INTEREST INCOME AFTER PROVISION



































FOR CREDIT LOSSES





12,480





12,640



(1.3)





36,867





36,695



0.5







































NONINTEREST INCOME



































Service charges on deposit accounts





990





982



0.8





2,952





2,834



4.2



Trust and investment fee income





383





383







1,140





1,197



(4.8)



Other noninterest income





1,156





1,100



5.1





3,234





2,870



12.7



Total noninterest income





2,529





2,465



2.6





7,326





6,901



6.2







































NONINTEREST EXPENSE



































Salaries and wages





3,853





4,209



(8.5)





11,411





12,536



(9.0)



Employee benefits





1,299





983



32.1





3,621





3,204



13.0



Occupancy expense





697





646



7.9





2,056





1,973



4.2



Furniture and equipment expense





263





212



24.1





821





714



15.0



Data processing





972





930



4.5





2,801





2,487



12.6



Directors' fees





140





145



(3.4)





342





411



(16.8)



Amortization of intangible assets





144





270



(46.7)





461





597



(22.8)



FDIC insurance premium expense









193



(100.0)





386





612



(36.9)



Other real estate owned expenses, net





133





166



(19.9)





426





125



240.8



Legal and professional fees





495





443



11.7





1,655





1,378



20.1



Other noninterest expenses





1,388





1,113



24.7





3,732





3,578



4.3



Total noninterest expense





9,384





9,310



0.8





27,712





27,615



0.4







































Income from continuing operations before income taxes





5,625





5,795



(2.9)





16,481





15,981



3.1



Income tax expense





1,411





1,539



(8.3)





4,211





4,071



3.4







































Income from continuing operations





4,214





4,256



(1.0)





12,270





11,910



3.0







































(Loss) income from discontinued operations before income taxes





(10)





269



(103.7)





(113)





1,317



(108.6)



Income tax (benefit) expense





(2)





71



(102.8)





(27)





324



(108.3)







































(Loss) Income from discontinued operations





(8)





198



(104.0)





(86)





993



(108.7)







































NET INCOME



$

4,206



$

4,454



(5.6)



$

12,184



$

12,903



(5.6)







































Weighted average shares outstanding - basic





12,764





12,748



0.1





12,771





12,736



0.3



Weighted average shares outstanding - diluted





12,769





12,761



0.1





12,776





12,749



0.2







































Basic net income per common share



































Income from continuing operations



$

0.33



$

0.33





$

0.96



$

0.93



3.2



(Loss) Income from discontinued operations









0.02



(100.0)





(0.01)





0.08



(112.5)



Net income



$

0.33



$

0.35



(5.7)



$

0.95



$

1.01



(5.9)







































Diluted net income per common share



































Income from continuing operations



$

0.33



$

0.33



-



$

0.96



$

0.93



3.2



(Loss) Income from discontinued operations









0.02



(100.0)





(0.01)





0.08



(112.5)



Net income



$

0.33



$

0.35



(5.7)



$

0.95



$

1.01



(5.9)







































Dividends paid per common share





0.10





0.08



25.0





0.30





0.23



30.4



 

 

 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets

(Dollars in thousands)

















































For the Three Months Ended



For the Nine Months Ended







September 30, 



September 30, 







2019



2018



2019



2018







Average



Yield/



Average



Yield/



Average



Yield/



Average



Yield/







balance



rate



balance



rate



balance



rate



balance



rate



Earning assets











































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



$

1,235,374



4.54

%

$

1,174,513



4.47

%

$

1,219,623



4.55

%

$

1,140,925



4.45

%

Investment securities











































Taxable





155,324



2.24





178,572



2.12





160,035



2.30





186,936



2.10



Interest-bearing deposits





41,554



2.13





17,488



1.91





29,279



2.28





13,542



1.80



Total earning assets





1,432,252



4.22

%



1,370,573



4.13

%



1,408,937



4.24

%



1,341,403



4.10

%

Cash and due from banks





18,127









17,790









17,520









17,031







Other assets





73,823









79,065









64,775









78,243







Allowance for credit losses





(10,412)









(10,354)









(10,419)









(10,173)







Total assets



$

1,513,790







$

1,457,074







$

1,480,813







$

1,426,504































































































Interest-bearing liabilities











































Demand deposits



$

252,386



0.70

%

$

221,905



0.32

%

$

242,364



0.66

%

$

214,317



0.26

%

Money market and savings deposits





389,268



0.67





373,357



0.14





386,113



0.79





378,404



0.13



Brokered deposits





14,568



2.29





25,507



2.01





19,144



2.40





12,157



2.09



Certificates of deposit $100,000 or more





119,200



1.78





97,563



0.69





108,504



1.54





98,772



0.58



Other time deposits





149,708



1.49





145,130



0.57





145,381



1.28





148,107



0.50



Interest-bearing deposits





925,130



0.98





863,462



0.36





901,506



0.96





851,757



0.30



Short-term borrowings





17,729



2.64





87,925



2.09





24,034



2.64





78,945



1.95



Long-term borrowings





15,000



2.86











15,000



2.86









Total interest-bearing liabilities





957,859



1.04

%



951,387



0.52

%



940,540



1.03

%



930,702



0.44

%

Noninterest-bearing deposits





354,927









329,383









341,966









322,748







Accrued expenses and other liabilities





7,884









6,005









9,213









5,766







Stockholders' equity





193,120









170,299









189,094









167,288







Total liabilities and stockholders' equity



$

1,513,790







$

1,457,074







$

1,480,813







$

1,426,504



















































Net interest spread









3.18

%







3.61

%







3.21

%







3.66

%

Net interest margin









3.52

%







3.76

%







3.56

%







3.79

%













































(1)

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

(2)

Average loan balances include nonaccrual loans.

(3)

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



 

 

Shore Bancshares, Inc.

Financial Highlights By Quarter

(Dollars in thousands, except per share data)















































3rd Quarter



2nd Quarter



1st Quarter



4th Quarter



3rd Quarter



Q3 2019



Q3 2019







2019



2019



2019



2018



2018



compared to



compared to







Q3 2019



Q2 2019



Q1 2019



Q4 2018



Q3 2018



Q2 2019



Q3 2018



PROFITABILITY FOR THE PERIOD









































Taxable-equivalent net interest income



$

12,724



$

12,334



$

12,428



$

12,756



$

12,975



3.2

%

(1.9)

%

Less: Taxable-equivalent adjustment





44





41





34





30





28



7.3



57.1



Net interest income





12,680





12,293





12,394





12,726





12,947



3.1



(2.1)



Provision for credit losses





200





200





100





460





307





(34.9)



Noninterest income





2,529





2,609





2,188





2,112





2,465



(3.1)



2.6



Noninterest expense





9,384





8,985





9,343





9,216





9,310



4.4



0.8



Income from continuing operations before income taxes





5,625





5,717





5,139





5,162





5,795



(1.6)



(2.9)



Income tax expense





1,411





1,489





1,311





1,309





1,539



(5.2)



(8.3)



Income from continuing operations





4,214





4,228





3,828





3,853





4,256



(0.3)



(1.0)













































(Loss) Income from discontinued operations before income taxes





(10)





(4)





(99)





104





269



(150.0)



(103.7)



Gain on sale of insurance agency

















12,736











Income tax expense (benefit)





(2)









(25)





4,599





71





(102.8)



(Loss) Income from discontinued operations 





(8)





(4)





(74)





8,241





198



(100.0)



(104.0)













































Net income



$

4,206



$

4,224



$

3,754



$

12,094



$

4,454



(0.4)



(5.6)













































From Continuing Operations:









































Return on average assets





1.10

%



1.16

%



1.06

%



1.04

%



1.16

%

(6)

bp

(6)

bp

Return on average equity





8.66





8.97





8.39





8.83





9.92



(31)



(126)



Return on average tangible equity (1)





9.90





10.31





9.72





11.34





12.77



(41)



(287)



Net interest margin





3.52





3.54





3.61





3.58





3.76



(2)



(24)



Efficiency ratio - GAAP





61.70





60.29





64.07





62.11





60.41



141



129



Efficiency ratio - Non-GAAP (1)





60.58





59.09





62.81





60.18





58.55



149



203













































PER SHARE DATA









































Basic net income per common share









































Income from continuing operations



$

0.33



$

0.33



$

0.30



$

0.30



$

0.33



%

%

(Loss) Income from discontinued operations













(0.01)





0.65





0.02





(100.0)



Net income



$

0.33



$

0.33



$

0.29



$

0.95



$

0.35





(5.7)



Diluted net income per common share









































Income from continuing operations



$

0.33



$

0.33



$

0.30



$

0.30



$

0.33







(Loss) Income from discontinued operations













(0.01)





0.65





0.02





(100.0)



Net income



$

0.33



$

0.33



$

0.29



$

0.95



$

0.35





(5.7)













































Dividends paid per common share





0.10





0.10





0.10





0.09





0.08





25.0



Book value per common share at period end





15.22





14.97





14.64





14.37





13.45



1.7



13.2



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





13.66





13.40





13.06





12.77





10.96



1.9



24.6



Market value at period end





15.41





16.34





14.91





14.54





17.82



(5.7)



(13.5)



Market range:









































High





17.00





16.48





16.11





18.32





19.84



3.2



(14.3)



Low





14.90





14.84





14.00





12.95





16.63



0.4



(10.4)













































AVERAGE BALANCE SHEET DATA









































Loans



$

1,235,374



$

1,221,215



$

1,201,913



$

1,189,504



$

1,174,513



1.2

%

5.2

%

Investment securities





155,324





159,878





165,009





177,700





178,572



(2.8)



(13.0)



Earning assets





1,432,252





1,399,418





1,394,728





1,385,368





1,370,573



2.3



4.5



Assets





1,513,790





1,468,093





1,460,291





1,463,839





1,457,074



3.1



3.9



Deposits





1,280,057





1,233,951





1,215,702





1,197,445





1,192,845



3.7



7.3



Stockholders' equity





193,120





189,101





184,972





173,214





170,299



2.1



13.4













































CREDIT QUALITY DATA









































Net charge-offs



$

67



$

313



$

25



$

445



$

100



(78.6)

%

(33.0)

%











































Nonaccrual loans



$

12,530



$

14,592



$

15,360



$

16,655



$

7,362



(14.1)



70.2



Loans 90 days past due and still accruing





712





439





47





139





3



62.2



23,633.3



Other real estate owned





74





524





979





1,222





1,518



(85.9)



(95.1)



Total nonperforming assets



$

13,316



$

15,555



$

16,386



$

18,016



$

8,883



(14.4)



49.9













































Accruing troubled debt restructurings

(TDRs)



$

7,588



$

7,768



$

7,828



$

8,663



$

8,933



(2.3)



(15.1)













































Total nonperforming assets and accruing TDRs



$

20,904



$

23,323



$

24,214



$

26,679



$

17,816



(10.4)



17.3













































CAPITAL AND CREDIT QUALITY

RATIOS









































Period-end equity to assets





12.42

%



12.85

%



12.59

%



12.35

%



11.63

%

(43)

bp

79

bp

Period-end tangible equity to tangible

assets (1)





11.29





11.66





11.39





11.13





9.69



(37)



160













































Annualized net charge-offs to average loans





0.02





0.10





0.01





0.15





0.03



(8)



(1)













































Allowance for credit losses as a percent of:









































Period-end loans





0.85





0.83





0.86





0.87





0.87



2



(2)



Nonaccrual loans





83.30





70.62





67.83





62.10





140.29



1,268



(5,699)



Nonperforming assets





78.39





66.25





63.58





57.41





116.27



1,214



(3,788)



Accruing TDRs





137.56





132.66





133.09





119.39





115.62



490



2,194



Nonperforming assets and accruing TDRs





49.93





44.18





43.02





38.77





57.97



575



(804)













































As a percent of total loans:









































Nonaccrual loans





1.01





1.18





1.27





1.39





0.62



(17)



39



Accruing TDRs





0.61





0.63





0.65





0.72





0.76



(2)



(15)



Nonaccrual loans and accruing TDRs





1.63





1.80





1.91





2.12





1.38



(17)



25













































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









































Nonperforming assets





1.08





1.25





1.35





1.51





0.75



(17)



33



Nonperforming assets and accruing TDRs





1.69





1.88





2.00





2.23





1.51



(19)



18













































As a percent of total assets:









































Nonaccrual loans





0.80





0.98





1.03





1.12





0.50



(18)



30



Nonperforming assets





0.85





1.04





1.10





1.21





0.60



(19)



25



Accruing TDRs





0.49





0.52





0.53





0.58





0.61



(3)



(12)



Nonperforming assets and accruing TDRs





1.34





1.56





1.63





1.80





1.21



(22)



13















































 

(1)

  See the reconciliation table on page 17 of 17.



 

 

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter

(In thousands, except per share data)















































































Q3 2019



Q3 2019





































compared to



compared to







Q3 2019



Q2 2019



Q1 2019



Q4 2018



Q3 2018



Q2 2019



Q3 2018



INTEREST INCOME









































Interest and fees on loans



$

14,100



$

13,749



$

13,499



$

13,452



$

13,205



2.6

%

6.8

%

Interest on investment securities:









































Taxable





870





887





998





1,339





947



(1.9)



(8.1)



Interest on deposits with other banks





223





113





163





103





84



97.3



165.5



Total interest income





15,193





14,749





14,660





14,894





14,236



3.0



6.7













































INTEREST EXPENSE









































Interest on deposits





2,288





2,204





1,947





1,577





826



3.8



177.0



Interest on short-term borrowings





117





145





213





486





463



(19.3)



(74.7)



Interest on long-term borrowings





108





107





106





105







0.9





Total interest expense





2,513





2,456





2,266





2,168





1,289



2.3



95.0













































NET INTEREST INCOME





12,680





12,293





12,394





12,726





12,947



3.1



(2.1)



Provision for credit losses





200





200





100





460





307





(34.9)













































NET INTEREST INCOME AFTER PROVISION









































FOR CREDIT LOSSES





12,480





12,093





12,294





12,266





12,640



3.2



(1.3)













































NONINTEREST INCOME









































Service charges on deposit accounts





990





1,028





934





1,045





982



(3.7)



0.8



Trust and investment fee income





383





385





372





360





383



(0.5)





Other noninterest income





1,156





1,196





882





707





1,100



(3.3)



5.1



Total noninterest income





2,529





2,609





2,188





2,112





2,465



(3.1)



2.6













































NONINTEREST EXPENSE









































Salaries and wages





3,853





3,792





3,766





3,999





4,209



1.6



(8.5)



Employee benefits





1,299





1,068





1,254





797





983



21.6



32.1



Occupancy expense





697





668





691





649





646



4.3



7.9



Furniture and equipment expense





263





295





263





236





212



(10.8)



24.1



Data processing





972





919





910





844





930



5.8



4.5



Directors' fees





140





116





86





145





145



20.7



(3.4)



Amortization of intangible assets





144





155





162





269





270



(7.1)



(46.7)



FDIC insurance premium expense









181





205





159





193



(100.0)



(100.0)



Other real estate owned expenses, net





133





60





233





228





166



121.7



(19.9)



Legal and professional fees





495





559





601





603





443



(11.4)



11.7



Other noninterest expenses





1,388





1,172





1,172





1,287





1,113



18.4



24.7



Total noninterest expense





9,384





8,985





9,343





9,216





9,310



4.4



0.8













































Income from continuing operations before income

taxes





5,625





5,717





5,139





5,162





5,795



(1.6)



(2.9)



Income tax expense





1,411





1,489





1,311





1,309





1,539



(5.2)



(8.3)













































Income from continuing operations





4,214





4,228





3,828





3,853





4,256



(0.3)



(1.0)













































(Loss) Income from discontinued operations before income taxes





(10)





(4)





(99)





104





269



(150.0)



(103.7)



Gain on sale of insurance agency

















12,736











(Loss) Income tax expense (benefit)





(2)









(25)





4,599





71





(102.8)













































(Loss) Income from discontinued operations





(8)





(4)





(74)





8,241





198



(100.0)



(104.0)























































































NET INCOME



$

4,206



$

4,224



$

3,754



$

12,094



$

4,454



(0.4)



(5.6)













































Weighted average shares outstanding - basic





12,764





12,779





12,769





12,749





12,748



(0.1)



0.1



Weighted average shares outstanding - diluted





12,769





12,784





12,773





12,766





12,761



(0.1)



0.1













































Basic net income per common share









































Income from continuing operations



$

0.33



$

0.33



$

0.30



$

0.30



$

0.33







(Loss) Income from discontinued operations













(0.01)





0.65





0.02





(100.0)



Net income



$

0.33



$

0.33



$

0.29



$

0.95



$

0.35





(5.7)



Diluted net income per common share









































Income from continuing operations



$

0.33



$

0.33



$

0.30



$

0.30



$

0.33







(Loss) Income from discontinued operations













(0.01)





0.65





0.02





(100.0)



Net income



$

0.33



$

0.33



$

0.29



$

0.95



$

0.35





(5.7)













































Dividends paid per common share





0.10





0.10





0.10





0.09





0.08





25.0



 

 

 

Shore Bancshares, Inc.

Consolidated Average Balance Sheets By Quarter

(Dollars in thousands)





















































































































Average balance

























































Q3 2019



Q3 2019

























































compared to



compared to







Q3 2019



Q2 2019



Q1 2019



Q4 2018



Q3 2018



Q2 2019



Q3 2018







Average



Yield/



Average



Yield/



Average



Yield/



Average



Yield/



Average



Yield/















balance



rate



balance



rate



balance



rate



balance



rate



balance



rate











Earning assets





























































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





1,235,374



4.54

%

$

1,221,215



4.53

%

$

1,201,913



4.57

%

$

1,189,504



4.50

%

$

1,174,513



4.47

%

1.2

%

5.2

%

Investment securities





























































Taxable





155,324



2.24





159,878



2.22





165,009



2.45





177,700



2.46





178,572



2.12



(2.8)



(13.0)



Interest-bearing deposits





41,554



2.13





18,325



2.47





27,806



2.38





18,164



2.25





17,488



1.91



126.8



137.6



Total earning assets





1,432,252



4.22

%



1,399,418



4.24

%



1,394,728



4.27

%



1,385,368



4.20

%



1,370,573



4.13

%

2.3



4.5



Cash and due from banks





18,127









17,225









17,196









18,204









17,790







5.2



1.9



Other assets





73,823









61,906









58,756









70,858









79,065







19.3



(6.6)



Allowance for credit losses





(10,412)









(10,456)









(10,389)









(10,591)









(10,354)







(0.4)



0.6



Total assets



$

1,513,790







$

1,468,093







$

1,460,291







$

1,463,839







$

1,457,074







3.1



3.9

































































Interest-bearing liabilities





























































Demand deposits



$

252,386



0.70

%

$

234,775



0.65

%

$

239,794



0.61

%

$

218,519



0.53

%

$

221,905



0.32

%

7.5



13.7

































































Money market and savings deposits





389,268



0.67





385,272



0.84





383,738



0.85





378,163



0.68





373,357



0.14



1.0



4.3



Brokered deposits





14,568



2.29





20,866



2.52





22,080



2.37





22,816



2.17





25,507



2.01



(30.2)



(42.9)



Certificates of deposit $100,000 or

more





119,200



1.78





107,549



1.54





98,535



1.24





97,023



0.94





97,563



0.69



10.8



22.2



Other time deposits





149,708



1.49





145,900



1.31





140,523



1.02





141,702



0.80





145,130



0.57



2.6



3.2



Interest-bearing deposits





925,130



0.98





894,362



0.99





884,670



0.89





858,223



0.73





863,462



0.36



3.4



7.1



Short-term borrowings





17,729



2.64





21,557



2.70





32,984



2.62





72,462



2.66





87,925



2.09



(17.8)



(79.8)



Long-term borrowings





15,000



2.86





15,000



2.86





15,000



2.87





14,348



2.89













Total interest-bearing liabilities





957,859



1.04

%



930,919



1.06

%



932,654



0.99

%



945,033



0.91

%



951,387



0.52

%

2.9



0.7



Noninterest-bearing deposits





354,927









339,589









331,032









339,222









329,383







4.5



7.8



Accrued expenses and other liabilities





7,884









8,484









11,633









6,370









6,005







(7.1)



31.3



Stockholders' equity





193,120









189,101









184,972









173,214









170,299







2.1



13.4



Total liabilities and stockholders' equity



$

1,513,790







$

1,468,093







$

1,460,291







$

1,463,839







$

1,457,074







3.1



3.9

































































Net interest spread









3.18

%







3.18

%







3.28

%







3.29

%







3.61

%









Net interest margin









3.52

%







3.54

%







3.61

%







3.58

%







3.76

%







































































(1)

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

(2)

Average loan balances include nonaccrual loans.

(3)

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



 

 

Shore Bancshares, Inc.

Reconciliation of Generally Accepted Accounting Principles (GAAP)

and Non-GAAP Measures

(In thousands, except per share data)

















































































YTD



YTD







Q3 2019



Q2 2019



Q1 2019



Q4 2018



Q3 2018



9/30/2019



9/30/2018

















































The following reconciles return on average equity and return

on average tangible equity from continuing operations (Note

1):



























































































Net income from continuing operations



$

4,214



$

4,228



$

3,828



$

3,853



$

4,256



$

12,270



$

11,910



Net income from continuing operations - annualized (A)



$

16,719



$

16,958



$

15,525



$

15,286



$

16,885



$

16,405



$

15,924

















































Net income, excluding net amortization of intangible assets



$

4,321



$

4,344



$

3,949



$

4,054



$

4,457



$

12,614



$

12,382

















































Net income, excluding net amortization of intangible assets - annualized (B)



$

17,143



$

17,424



$

16,015



$

16,084



$

17,683



$

16,865



$

16,555

















































Average stockholders' equity (C)



$

193,120



$

189,101



$

184,972



$

173,214



$

170,299



$

189,094



$

167,288



Less:  Average goodwill and other intangible assets





(19,991)





(20,138)





(20,281)





(31,410)





(31,810)





(20,136)





(32,203)



Average tangible equity (D)



$

173,129



$

168,963



$

164,691



$

141,804



$

138,489



$

168,958



$

135,085

















































Return on average equity (GAAP)  (A)/(C)





8.66

%



8.97

%



8.39

%



8.83

%



9.91

%



8.68

%



9.52

%

Return on average tangible equity (Non-GAAP)  (B)/(D)





9.90

%



10.31

%



9.72

%



11.34

%



12.77

%



9.98

%



12.26

%















































The following reconciles GAAP efficiency ratio and non-

GAAP efficiency ratio from continuing operations (Note 2):



























































































Noninterest expense (E)



$

9,384



$

8,985



$

9,343



$

9,216



$

9,310



$

27,712



$

27,615



Less:  Amortization of intangible assets





(144)





(155)





(162)





(269)





(270)





(461)





(631)



Adjusted noninterest expense (F)



$

9,240



$

8,830



$

9,181



$

8,947



$

9,040



$

27,251



$

26,984

















































Net interest income (G)





12,680





12,293





12,394





12,726





12,947





37,367





37,909



Add:  Taxable-equivalent adjustment





44





41





34





30





28





119





84



Taxable-equivalent net interest income (H)



$

12,724



$

12,334



$

12,428



$

12,756



$

12,975



$

37,486



$

37,993

















































Noninterest income (I)



$

2,529



$

2,609



$

2,188



$

2,112



$

2,465



$

7,326





6,901



Adjusted noninterest income (J)



$

2,529



$

2,609



$

2,188



$

2,112



$

2,465



$

7,326



$

6,901

















































Efficiency ratio (GAAP)  (E)/(G)+(I)





61.70

%



60.29

%



64.07

%



62.11

%



60.41

%



62.01

%



61.63

%

Efficiency ratio (Non-GAAP)  (F)/(H)+(J)





60.58

%



59.09

%



62.81

%



60.18

%



58.55

%



60.81

%



60.11

%















































The following reconciles book value per common share and

tangible book value per common share (Note 1):



























































































Stockholders' equity (L)



$

193,963



$

191,307



$

187,082



$

183,185



$

171,419















Less:  Goodwill and other intangible assets





(19,914)





(20,058)





(20,214)





(20,383)





(31,706)















Tangible equity (M)



$

174,049



$

171,249



$

166,868



$

162,802



$

139,713





























































Shares outstanding (N)





12,742





12,780





12,780





12,749





12,748





























































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



$

15.22



$

14.97



$

14.64



$

14.37



$

13.45















Tangible book value per common share (Non-GAAP)

(M)/(N)



$

13.66



$

13.40



$

13.06



$

12.77



$

10.96











































































































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



























































































Stockholders' equity (O)



$

193,963



$

191,307



$

187,082



$

183,185



$

171,419















Less:  Goodwill and other intangible assets





(19,914)





(20,058)





(20,214)





(20,383)





(31,706)















Tangible equity (P)



$

174,049



$

171,249



$

166,868



$

162,802



$

139,713





























































Assets (Q)



$

1,561,679



$

1,488,562



$

1,485,799



$

1,483,076



$

1,473,543















Less:  Goodwill and other intangible assets





(19,914)





(20,058)





(20,214)





(20,383)





(31,706)















Tangible assets (R)



$

1,541,765



$

1,468,504



$

1,465,585



$

1,462,693



$

1,441,837





























































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





12.42

%



12.85

%



12.59

%



12.35

%



11.63

%













Period-end tangible equity/tangible assets (Non-GAAP)  (P)/(R)





11.29

%



11.66

%



11.39

%



11.13

%



9.69

%



























































 

Note 1:

 Management believes that reporting tangible equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes.

Note 2:

 Management believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling cash-based operating activities.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/shore-bancshares-reports-third-quarter-and-nine-month-results-300945156.html

SOURCE Shore Bancshares, Inc.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress ReleasesBanking/Financial Services
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!