EASTON, Md., Jan. 30, 2020 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ - SHBI) (the "Company") reported income from continuing operations of $4.014 million or $0.32 per diluted common share for the fourth quarter of 2019, compared to income from continuing operations of $4.214 million or $0.33 per diluted common share for the third quarter of 2019, and income from continuing operations of $3.853 million or $0.30 per diluted common share for the fourth quarter of 2018, which excludes the results of operations and sale of its retail insurance business, Avon Dixon, LLC ("Avon") on December 31, 2018 for net proceeds of $25.2 million and a net gain after tax of $8.2 million, or $0.65 per diluted common share. The Company reported income from continuing operations of $16.284 million or $1.28 per diluted common share for fiscal year 2019, compared to income from continuing operations of $15.763 million or $1.24 per diluted common share for fiscal year 2018, which excludes the results of operations and sale of Avon which totaled $9.234 million, or $0.72 per diluted common share.
When comparing income from continuing operations for the fourth quarter of 2019 to the third quarter of 2019, net income decreased $200 thousand due to an increase in noninterest expenses of $461 thousand, partially offset by increases in net interest income of $84 thousand and noninterest income of $165 thousand. When comparing income from continuing operations for the fourth quarter of 2019 to the fourth quarter of 2018, the improved results were due to an increase in noninterest income of $582 thousand, coupled with a decrease in the provision for credit losses of $260 thousand, partially offset by an increase in noninterest expenses of $629 thousand.
"2019 was a great year for deposit growth and despite a flat yield curve for most of the year, revenues remained strong." said Lloyd L. "Scott" Beatty, Jr., President and Chief Executive Officer. "We experienced deposit growth of nearly 11% in 2019 allowing us to reduce our alternative funding levels. During the year we increased our dividend by 31% and instituted a stock repurchase program through which we acquired 278,700 shares of our common stock. In addition, we hired new lending teams to reach untapped markets. We head into 2020 with a very positive outlook and a strategic focus for growth as we remain committed to providing excellent customer service and maximizing shareholder value."
Balance Sheet Review
Total assets were $1.559 billion at December 31, 2019, a $76.2 million, or 5.1%, increase when compared to $1.483 billion at December 31, 2018. The increase was primarily due to total deposits increasing $129.0 million or 10.6%. The significant growth in deposits funded increases in loans of $53.3 million, or 4.5%, interest-bearing deposits with other banks of $25.6 million, or 50.2%, and other assets of $22.9 million, or 129.5%, which includes the purchase of approximately $26.5 million of bank owned life insurance ("BOLI") during 2019. In addition, the increase in deposits allowed the Company to decrease its short-term borrowings by $59.6 million, or 98.0%.
Total deposits increased $129.0 million, or 10.6%, when compared to December 31, 2018. The increase in total deposits primarily consisted of increases in interest-bearing checking deposits of $62.4 million, noninterest-bearing deposits of $26.2 million, time deposits greater than $100 thousand of $29.7 million, savings and money market accounts of $24.0 million and other time deposits of $8.8 million, partially offset by a decrease in brokered deposits of $22.1 million.
Total stockholders' equity increased $9.6 million, or 5.2%, when compared to the end of 2018. At December 31, 2019, the ratio of total equity to total assets was 12.37% and the ratio of total tangible equity to total tangible assets was 11.24%.
Review of Quarterly Financial Results
Net interest income was $12.8 million for the fourth quarter of 2019, compared to $12.7 million for the third quarter of 2019 and $12.7 million for the fourth quarter of 2018. The primary reason for the increase in net interest income when compared to the third quarter of 2019 was due to the decrease in the average balance in short-term borrowings of $15.8 million, or 89.3%, which resulted in a reduction to interest expense of $111 thousand. Net interest income increased when compared to the fourth quarter of 2018 due to increases in the average balances on loans of $56.9 million, or 4.8% and interest-bearing deposits with other banks of $53.4 million, or 294.1%, resulting in $591 thousand and $192 thousand of additional interest income, respectively. These increases were partially offset by a decline in the average balance in taxable investment securities of $32.2 million, or 18.1%, resulting in a decrease of $512 thousand in interest income. When comparing the fourth quarter of 2019 and 2018 on the liability side of the balance sheet, the average balance on interest-bearing deposits increased $107.4 million, or 12.5%, adding $710 thousand of additional interest expense, partially offset by a decrease in the average balance on short-term borrowings of $70.6 million, or 97.4%, decreasing interest expense by $480 thousand. The Company's net interest margin decreased to 3.47% from 3.52% in the third quarter of 2019 and down from 3.58% in the fourth quarter of 2018.
The provision for credit losses was $200 thousand for the three months ended December 31, 2019. The comparable amounts were $200 thousand and $460 thousand for the three months ended September 30, 2019 and December 31, 2018, respectively. The provision for credit losses remained unchanged from the third quarter of 2019 due to stagnant growth within the loan portfolio during such periods. The decrease in the provision for credit losses from the fourth quarter of 2018 was due to a reduction in net charge-offs. Net charge-offs were $131 thousand for the fourth quarter of 2019, $67 thousand for the third quarter of 2019 and $445 thousand for the fourth quarter of 2018. The ratio of annualized net charge-offs to average loans was 0.04% for the fourth quarter of 2019, 0.02% for the third quarter of 2019 and 0.15% for the fourth quarter of 2018. The ratio of the allowance for credit losses to period-end loans was 0.84% at December 31, 2019, slightly lower than the 0.85% at September 30, 2019 and lower than the 0.87% at December 31, 2018.
At December 31, 2019, nonperforming assets were $12.0 million, a decrease of $1.3 million, or 10.0%, when compared to September 30, 2019, primarily due to a decrease in nonaccrual loans of $1.9 million, or 15.5%. Accruing troubled debt restructurings ("TDRs") decreased $87 thousand, or 1.1%, over the same time period. When comparing December 31, 2019 to December 31, 2018, nonperforming assets decreased $6.0 million, or 33.4%, and accruing TDRs decreased $1.2 million, or 13.4%. The decrease in nonperforming assets was due to diligent workout efforts by the Company to reduce nonaccrual loans and other real estate owned properties. The ratio of nonperforming assets and accruing TDRs to total assets was 1.25%, 1.34% and 1.80% at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. In addition, the ratio of accruing TDRs to total loans at December 31, 2019 was 0.60%, compared to 0.61% at September 30, 2019 and 0.72% at December 31, 2018.
Total noninterest income from continuing operations for the fourth quarter of 2019 increased $165 thousand, or 6.5%, when compared to the third quarter of 2019 and increased $582 thousand, or 27.6%, when compared to the fourth quarter of 2018. The increase from the third quarter of 2019 was primarily the result of additional BOLI income earned in the fourth quarter. The increase from the fourth quarter of 2018 was due to additional income from BOLI purchased during 2019, higher loan and bank service fees and the life insurance proceeds.
Total noninterest expense from continuing operations for the fourth quarter of 2019 increased $461 thousand, or 4.9%, when compared to the third quarter of 2019 and increased $629 thousand, or 6.8%, when compared to the fourth quarter of 2018. The increase in noninterest expense compared to the third quarter of 2019 was the result of higher employee benefits due to an increase in medical claims from the Company's self-funded insurance program and an increase in salaries and wages due to accrued bonus and incentive payouts. These increases were partially offset by a decrease in other real estate owned expenses, net of $134 thousand and lower FDIC insurance premiums of $42 thousand. The increase in noninterest expenses from the fourth quarter of 2018 was primarily due to increases in employee benefits from higher medical claims, the addition of supplemental executive retirement plans ("SERPs") during 2019 and data processing, partially offset by lower FDIC insurance premiums, amortization of intangible assets and other real estate owned expenses.
Review of 2019 Financial Results
Net interest income for 2019 was $50.1 million, a decrease of $504 thousand, or 1.0%, when compared to 2018. The decrease was the direct result of an increase in interest expense $4.4 million, or 82.8%, and a decrease in taxable investment securities of $707 thousand, or 16.5%, which were partially offset by increases in interest and fees on loans of $4.1 million, or 7.9%, interest on deposits with other banks of $508 thousand, or 177.6%, and a decrease in interest expense on short-term borrowings of $1.2 million, or 70.6%. The average balance on loans increased $73.2 million, or 6.3%, and the yield on these loans increased 7bps 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 $64.0 million, or 7.5%, with an associated increase in rates paid on these deposits of 54bps. This resulted in a net interest margin of 3.54% for 2019 compared to 3.74% for 2018.
The provision for credit losses for 2019 and 2018 was $700 thousand and $1.7 million, respectively, while net charge-offs were $536 thousand and $1.1 million, respectively. The decrease in provision for credit losses was the result of improved overall credit quality, lower net charge-offs and lower loan growth for 2019 compared to 2018. The ratio of net charge-offs to average loans was 0.04% for 2019 and 0.10% for 2018.
Total noninterest income from continuing operations for 2019 increased $1.0 million, or 11.2%, when compared to 2018. The increase in noninterest income primarily consisted of increases in BOLI income and higher loan and bank service fees.
Total noninterest expense from continuing operations for 2019 increased $726 thousand, or 2.0%, when compared to the same period in 2018. The increase in noninterest expenses were primarily due to higher employee benefits of $1.3 million, data processing of $459 thousand, legal and professional fees of $242 thousand and other noninterest expenses of $265 thousand, partially offset by decreases in salaries and wages of $1.1 million, amortization of intangible assets of $261 thousand and FDIC insurance premiums of $427 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. | |||||||||||||||||
For the Three Months Ended | For the Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||
PROFITABILITY FOR THE PERIOD | |||||||||||||||||
Net interest income | $ | 12,764 | $ | 12,726 | 0.3 | % | $ | 50,131 | $ | 50,635 | (1.0) | % | |||||
Provision for credit losses | 200 | 460 | (56.5) | 700 | 1,674 | (58.2) | |||||||||||
Noninterest income | 2,694 | 2,112 | 27.6 | 10,020 | 9,013 | 11.2 | |||||||||||
Noninterest expense | 9,845 | 9,216 | 6.8 | 37,557 | 36,831 | 2.0 | |||||||||||
Income from continuing operations before | 5,413 | 5,162 | 4.9 | 21,894 | 21,143 | 3.6 | |||||||||||
Income tax expense | 1,399 | 1,309 | 6.9 | 5,610 | 5,380 | 4.3 | |||||||||||
Income from continuing operations | $ | 4,014 | $ | 3,853 | 4.2 | $ | 16,284 | $ | 15,763 | 3.3 | |||||||
(Loss) Income from discontinued operations | — | 104 | (100.0) | (113) | 1,421 | (108.0) | |||||||||||
Gain on sale of insurance agency | — | 12,736 | (100.0) | — | 12,736 | (100.0) | |||||||||||
Income tax expense (benefit) | — | 4,599 | (100.0) | (27) | 4,923 | (100.5) | |||||||||||
(Loss) Income from discontinued operations | — | 8,241 | (100.0) | (86) | 9,234 | (100.9) | |||||||||||
Net income | $ | 4,014 | $ | 12,094 | (66.8) | $ | 16,198 | $ | 24,997 | (35.2) | |||||||
From Continuing Operations: | |||||||||||||||||
Return on average assets | 1.03 | % | 1.04 | % | (1) | bp | 1.09 | % | 1.10 | % | (1) | bp | |||||
Return on average equity | 8.24 | 8.83 | (59) | 8.56 | 9.34 | (78) | |||||||||||
Return on average tangible equity (1) | 9.43 | 11.34 | (191) | 9.84 | 12.00 | (216) | |||||||||||
Net interest margin | 3.47 | 3.58 | (11) | 3.54 | 3.74 | (20) | |||||||||||
Efficiency ratio - GAAP | 63.69 | 62.11 | 158 | 62.44 | 61.75 | 69 | |||||||||||
Efficiency ratio - Non-GAAP (1) | 62.58 | 60.18 | 240 | 61.27 | 60.18 | 109 | |||||||||||
PER SHARE DATA | |||||||||||||||||
Basic net income per common share | |||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.30 | 6.7 | % | $ | 1.28 | $ | 1.24 | 3.2 | % | |||||
(Loss) Income from discontinued | — | 0.65 | (100.0) | (0.01) | 0.72 | (101.4) | |||||||||||
Net income | $ | 0.32 | $ | 0.95 | (66.3) | $ | 1.27 | $ | 1.96 | (35.2) | |||||||
Diluted net income per common share | |||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.30 | 6.7 | $ | 1.28 | $ | 1.24 | 3.2 | |||||||
(Loss) Income from discontinued | — | 0.65 | (100.0) | (0.01) | 0.72 | (101.4) | |||||||||||
Net income | $ | 0.32 | $ | 0.95 | (66.3) | $ | 1.27 | $ | 1.96 | (35.2) | |||||||
Dividends paid per common share | $ | 0.12 | $ | 0.09 | 33.3 | $ | 0.42 | $ | 0.32 | 31.3 | |||||||
Book value per common share at period | 15.42 | 14.37 | 7.3 | ||||||||||||||
Tangible book value per common share at | 13.84 | 12.77 | 8.4 | ||||||||||||||
Market value at period end | 17.36 | 14.54 | 19.4 | ||||||||||||||
Market range: | |||||||||||||||||
High | 17.90 | 18.32 | (2.3) | 17.90 | 20.09 | (10.9) | |||||||||||
Low | 15.01 | 12.95 | 15.9 | 14.00 | 12.95 | 8.1 | |||||||||||
AVERAGE BALANCE SHEET DATA | |||||||||||||||||
Loans | $ | 1,246,355 | $ | 1,189,504 | 4.8 | % | $ | 1,226,361 | $ | 1,153,169 | 6.3 | % | |||||
Investment securities | 145,544 | 177,700 | (18.1) | 156,383 | 189,879 | (17.6) | |||||||||||
Earning assets | 1,463,490 | 1,385,368 | 5.6 | 1,422,688 | 1,357,755 | 4.8 | |||||||||||
Assets | 1,553,017 | 1,463,839 | 6.1 | 1,498,903 | 1,435,914 | 4.4 | |||||||||||
Deposits | 1,334,047 | 1,197,445 | 11.4 | 1,266,302 | 1,180,288 | 7.3 | |||||||||||
Stockholders' equity | 193,239 | 173,214 | 11.6 | 190,139 | 168,782 | 12.7 | |||||||||||
CREDIT QUALITY DATA | |||||||||||||||||
Net charge-offs | $ | 131 | $ | 445 | (70.6) | % | $ | 536 | $ | 1,112 | (51.8) | % | |||||
Nonaccrual loans | $ | 10,590 | $ | 16,655 | (36.4) | ||||||||||||
Loans 90 days past due and still accruing | 1,326 | 139 | 854.0 | ||||||||||||||
Other real estate owned | 74 | 1,222 | (93.9) | ||||||||||||||
Total nonperforming assets | 11,990 | 18,016 | (33.4) | ||||||||||||||
Accruing troubled debt restructurings (TDRs) | 7,501 | 8,663 | (13.4) | ||||||||||||||
Total nonperforming assets and accruing TDRs | $ | 19,491 | $ | 26,679 | (26.9) | ||||||||||||
CAPITAL AND CREDIT QUALITY RATIOS | |||||||||||||||||
Period-end equity to assets | 12.37 | % | 12.35 | % | 2 | bp | |||||||||||
Period-end tangible equity to tangible assets (1) | 11.24 | 11.13 | 11 | ||||||||||||||
Annualized net charge-offs to average loans | 0.04 | 0.15 | (11) | 0.04 | % | 0.10 | % | (6) | bp | ||||||||
Allowance for credit losses as a percent of: | |||||||||||||||||
Period-end loans | 0.84 | 0.87 | (3) | ||||||||||||||
Nonaccrual loans | 99.22 | 62.10 | 3,712 | ||||||||||||||
Nonperforming assets | 87.63 | 57.41 | 3,022 | ||||||||||||||
Accruing TDRs | 140.07 | 119.39 | 2,068 | ||||||||||||||
Nonperforming assets and accruing TDRs | 53.91 | 38.77 | 1,514 | ||||||||||||||
As a percent of total loans: | |||||||||||||||||
Nonaccrual loans | 0.85 | 1.39 | (54) | ||||||||||||||
Accruing TDRs | 0.60 | 0.72 | (12) | ||||||||||||||
Nonaccrual loans and accruing TDRs | 1.45 | 2.12 | (67) | ||||||||||||||
As a percent of total loans+other real estate owned: | |||||||||||||||||
Nonperforming assets | 0.96 | 1.51 | (55) | ||||||||||||||
Nonperforming assets and accruing TDRs | 1.56 | 2.23 | (67) | ||||||||||||||
As a percent of total assets: | |||||||||||||||||
Nonaccrual loans | 0.68 | 1.12 | (44) | ||||||||||||||
Nonperforming assets | 0.77 | 1.21 | (44) | ||||||||||||||
Accruing TDRs | 0.48 | 0.58 | (10) | ||||||||||||||
Nonperforming assets and accruing TDRs | 1.25 | 1.80 | (55) | ||||||||||||||
(1) See the reconciliation table. | |||||||||||||||||
Shore Bancshares, Inc. | |||||||||
December 31, 2019 | |||||||||
December 31, | December 31, | compared to | |||||||
2019 | 2018 | December 31, 2018 | |||||||
ASSETS | |||||||||
Cash and due from banks | $ | 18,465 | $ | 16,294 | 13.3 | % | |||
Interest-bearing deposits with other banks | 76,506 | 50,931 | 50.2 | ||||||
Cash and cash equivalents | 94,971 | 67,225 | 41.3 | ||||||
Investment securities available for sale (at fair value) | 122,791 | 154,432 | (20.5) | ||||||
Investment securities held to maturity | 8,786 | 6,043 | 45.4 | ||||||
Equity securities, at fair value | 1,342 | 1,269 | 5.8 | ||||||
Restricted securities | 4,190 | 6,476 | (35.3) | ||||||
Loans | 1,248,654 | 1,195,355 | 4.5 | ||||||
Less: allowance for credit losses | (10,507) | (10,343) | 1.6 | ||||||
Loans, net | 1,238,147 | 1,185,012 | 4.5 | ||||||
Premises and equipment, net | 23,821 | 22,711 | 4.9 | ||||||
Goodwill | 17,518 | 17,518 | — | ||||||
Other intangible assets, net | 2,252 | 2,857 | (21.2) | ||||||
Other real estate owned, net | 74 | 1,222 | (93.9) | ||||||
Right of use assets, net | 4,771 | — | — | ||||||
Other assets | 40,572 | 17,678 | 129.5 | ||||||
Assets of discontinued operations | — | 633 | (100.0) | ||||||
Total assets | $ | 1,559,235 | $ | 1,483,076 | 5.1 | ||||
LIABILITIES | |||||||||
Noninterest-bearing deposits | $ | 356,618 | $ | 330,466 | 7.9 | ||||
Interest-bearing deposits | 984,716 | 881,875 | 11.7 | ||||||
Total deposits | 1,341,334 | 1,212,341 | 10.6 | ||||||
Short-term borrowings | 1,226 | 60,812 | (98.0) | ||||||
Long-term borrowings | 15,000 | 15,000 | — | ||||||
Lease liabilities | 4,792 | — | — | ||||||
Accrued expenses and other liabilities | 4,081 | 8,415 | (51.5) | ||||||
Liabilities of discontinued operations | — | 3,323 | (100.0) | ||||||
Total liabilities | 1,366,433 | 1,299,891 | 5.1 | ||||||
COMMITMENTS AND CONTINGENCIES | |||||||||
STOCKHOLDERS' EQUITY | |||||||||
Common stock, par value $0.01; authorized 35,000,000 shares | 125 | 127 | (1.6) | ||||||
Additional paid in capital | 61,045 | 65,434 | (6.7) | ||||||
Retained earnings | 131,425 | 120,574 | 9.0 | ||||||
Accumulated other comprehensive income (loss) | 207 | (2,950) | 107.0 | ||||||
Total stockholders' equity | 192,802 | 183,185 | 5.2 | ||||||
Total liabilities and stockholders' equity | $ | 1,559,235 | $ | 1,483,076 | 5.1 | ||||
Period-end common shares outstanding | 12,500 | 12,749 | (2.0) | ||||||
Book value per common share | $ | 15.42 | $ | 14.37 | 7.3 | ||||
Shore Bancshares, Inc. | |||||||||||||||||
For the Three Months Ended | For the Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||
INTEREST INCOME | |||||||||||||||||
Interest and fees on loans | $ | 14,043 | $ | 13,452 | 4.4 | % | $ | 55,391 | $ | 51,332 | 7.9 | % | |||||
Interest on investment securities: | |||||||||||||||||
Taxable | 827 | 1,339 | (38.2) | 3,582 | 4,289 | (16.5) | |||||||||||
Interest on deposits with other banks | 295 | 103 | 186.4 | 794 | 286 | 177.6 | |||||||||||
Total interest income | 15,165 | 14,894 | 1.8 | 59,767 | 55,907 | 6.9 | |||||||||||
INTEREST EXPENSE | |||||||||||||||||
Interest on deposits | 2,287 | 1,577 | 45.0 | 8,726 | 3,531 | 147.1 | |||||||||||
Interest on short-term borrowings | 6 | 486 | (98.8) | 481 | 1,636 | (70.6) | |||||||||||
Interest on long-term borrowings | 108 | 105 | 2.9 | 429 | 105 | — | |||||||||||
Total interest expense | 2,401 | 2,168 | 10.7 | 9,636 | 5,272 | 82.8 | |||||||||||
NET INTEREST INCOME | 12,764 | 12,726 | 0.3 | 50,131 | 50,635 | (1.0) | |||||||||||
Provision for credit losses | 200 | 460 | (56.5) | 700 | 1,674 | (58.2) | |||||||||||
NET INTEREST INCOME AFTER PROVISION | |||||||||||||||||
FOR CREDIT LOSSES | 12,564 | 12,266 | 2.4 | 49,431 | 48,961 | 1.0 | |||||||||||
NONINTEREST INCOME | |||||||||||||||||
Service charges on deposit accounts | 958 | 1,045 | (8.3) | 3,910 | 3,879 | 0.8 | |||||||||||
Trust and investment fee income | 382 | 360 | 6.1 | 1,522 | 1,557 | (2.2) | |||||||||||
Other noninterest income | 1,354 | 707 | 91.5 | 4,588 | 3,577 | 28.3 | |||||||||||
Total noninterest income | 2,694 | 2,112 | 27.6 | 10,020 | 9,013 | 11.2 | |||||||||||
NONINTEREST EXPENSE | |||||||||||||||||
Salaries and wages | 4,002 | 3,999 | 0.1 | 15,413 | 16,535 | (6.8) | |||||||||||
Employee benefits | 1,662 | 797 | 108.5 | 5,283 | 4,001 | 32.0 | |||||||||||
Occupancy expense | 702 | 649 | 8.2 | 2,758 | 2,622 | 5.2 | |||||||||||
Furniture and equipment expense | 286 | 236 | 21.2 | 1,107 | 950 | 16.5 | |||||||||||
Data processing | 989 | 844 | 17.2 | 3,790 | 3,331 | 13.8 | |||||||||||
Directors' fees | 137 | 145 | (5.5) | 479 | 556 | (13.8) | |||||||||||
Amortization of intangible assets | 144 | 269 | (46.5) | 605 | 866 | (30.1) | |||||||||||
FDIC insurance premium expense | (42) | 159 | (126.4) | 344 | 771 | (55.4) | |||||||||||
Other real estate owned expenses, net | (1) | 228 | (100.4) | 425 | 353 | 20.4 | |||||||||||
Legal and professional fees | 568 | 603 | (5.8) | 2,223 | 1,981 | 12.2 | |||||||||||
Other noninterest expenses | 1,398 | 1,287 | 8.6 | 5,130 | 4,865 | 5.4 | |||||||||||
Total noninterest expense | 9,845 | 9,216 | 6.8 | 37,557 | 36,831 | 2.0 | |||||||||||
Income from continuing operations before income taxes | 5,413 | 5,162 | 4.9 | 21,894 | 21,143 | 3.6 | |||||||||||
Income tax expense | 1,399 | 1,309 | 6.9 | 5,610 | 5,380 | 4.3 | |||||||||||
Income from continuing operations | 4,014 | 3,853 | 4.2 | 16,284 | 15,763 | 3.3 | |||||||||||
(Loss) income from discontinued operations before income taxes | — | 104 | (100.0) | (113) | 1,421 | (108.0) | |||||||||||
Gain on sale of insurance agency | — | 12,736 | (100.0) | — | 12,736 | (100.0) | |||||||||||
Income tax (benefit) expense | — | 4,599 | (100.0) | (27) | 4,923 | (100.5) | |||||||||||
(Loss) Income from discontinued operations | — | 8,241 | (100.0) | (86) | 9,234 | (100.9) | |||||||||||
NET INCOME | $ | 4,014 | $ | 12,094 | (66.8) | $ | 16,198 | $ | 24,997 | (35.2) | |||||||
Weighted average shares outstanding - basic | 12,588 | 12,749 | (1.3) | 12,725 | 12,739 | (0.1) | |||||||||||
Weighted average shares outstanding - diluted | 12,593 | 12,766 | (1.4) | 12,730 | 12,753 | (0.2) | |||||||||||
Basic net income per common share | |||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.30 | 6.7 | $ | 1.28 | $ | 1.24 | 3.2 | |||||||
(Loss) Income from discontinued operations | — | 0.65 | (100.0) | (0.01) | 0.72 | (101.4) | |||||||||||
Net income | $ | 0.32 | $ | 0.95 | (66.3) | $ | 1.27 | $ | 1.96 | (35.2) | |||||||
Diluted net income per common share | |||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.30 | 6.7 | $ | 1.28 | $ | 1.24 | 3.2 | |||||||
(Loss) Income from discontinued operations | — | 0.65 | (100.0) | (0.01) | 0.72 | (101.4) | |||||||||||
Net income | $ | 0.32 | $ | 0.95 | (66.3) | $ | 1.27 | $ | 1.96 | (35.2) | |||||||
Dividends paid per common share | 0.12 | 0.09 | 33.3 | 0.42 | 0.32 | 31.3 | |||||||||||
Shore Bancshares, Inc. | |||||||||||||||||||||
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
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) | $ | 1,246,355 | 4.48 | % | $ | 1,189,504 | 4.50 | % | $ | 1,226,361 | 4.53 | % | $ | 1,153,169 | 4.46 | % | |||||
Investment securities | |||||||||||||||||||||
Taxable | 145,544 | 2.27 | 177,700 | 2.46 | 156,383 | 2.29 | 189,879 | 2.26 | |||||||||||||
Interest-bearing deposits | 71,591 | 1.63 | 18,164 | 2.25 | 39,944 | 1.99 | 14,707 | 1.94 | |||||||||||||
Total earning assets | 1,463,490 | 4.12 | % | 1,385,368 | 4.20 | % | 1,422,688 | 4.21 | % | 1,357,755 | 4.13 | % | |||||||||
Cash and due from banks | 20,382 | 18,204 | 18,241 | 17,327 | |||||||||||||||||
Other assets | 79,586 | 70,858 | 68,399 | 71,110 | |||||||||||||||||
Allowance for credit losses | (10,441) | (10,591) | (10,425) | (10,278) | |||||||||||||||||
Total assets | $ | 1,553,017 | $ | 1,463,839 | $ | 1,498,903 | $ | 1,435,914 | |||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||
Demand deposits | $ | 284,193 | 0.76 | % | $ | 218,519 | 0.53 | % | $ | 252,907 | 0.69 | % | $ | 215,600 | 0.32 | % | |||||
Money market and savings deposits | 397,662 | 0.51 | 378,163 | 0.68 | 389,000 | 0.72 | 378,344 | 0.27 | |||||||||||||
Brokered deposits | 8,135 | 2.15 | 22,816 | 2.17 | 16,369 | 2.37 | 14,844 | 2.12 | |||||||||||||
Certificates of deposit $100,000 or more | 126,411 | 1.85 | 97,023 | 0.94 | 113,017 | 1.63 | 98,331 | 0.67 | |||||||||||||
Other time deposits | 149,197 | 1.58 | 141,702 | 0.80 | 146,344 | 1.35 | 146,492 | 0.57 | |||||||||||||
Interest-bearing deposits | 965,598 | 0.94 | 858,223 | 0.73 | 917,637 | 0.95 | 853,611 | 0.41 | |||||||||||||
Short-term borrowings | 1,889 | 1.26 | 72,462 | 2.66 | 18,453 | 2.61 | 77,311 | 2.12 | |||||||||||||
Long-term borrowings | 15,000 | 2.86 | 14,348 | 2.89 | 15,000 | 2.86 | 3,616 | 2.89 | |||||||||||||
Total interest-bearing liabilities | 982,487 | 0.97 | % | 945,033 | 0.91 | % | 951,090 | 1.01 | % | 934,538 | 0.56 | % | |||||||||
Noninterest-bearing deposits | 368,449 | 339,222 | 348,665 | 326,677 | |||||||||||||||||
Accrued expenses and other liabilities | 8,842 | 6,370 | 9,009 | 5,917 | |||||||||||||||||
Stockholders' equity | 193,239 | 173,214 | 190,139 | 168,782 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,553,017 | $ | 1,463,839 | $ | 1,498,903 | $ | 1,435,914 | |||||||||||||
Net interest spread | 3.15 | % | 3.29 | % | 3.20 | % | 3.57 | % | |||||||||||||
Net interest margin | 3.47 | % | 3.58 | % | 3.54 | % | 3.74 | % | |||||||||||||
(1) All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of the | |||||||||||||||||||||
Shore Bancshares, Inc. | ||||||||||||||||||||
4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | Q4 2019 | Q4 2019 | ||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | compared to | compared to | ||||||||||||||
Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2019 | Q4 2018 | ||||||||||||||
PROFITABILITY FOR THE PERIOD | ||||||||||||||||||||
Taxable-equivalent net interest income | $ | 12,808 | $ | 12,724 | $ | 12,334 | $ | 12,428 | $ | 12,756 | 0.7 | % | 0.4 | % | ||||||
Less: Taxable-equivalent adjustment | 44 | 44 | 41 | 34 | 30 | — | 46.7 | |||||||||||||
Net interest income | 12,764 | 12,680 | 12,293 | 12,394 | 12,726 | 0.7 | 0.3 | |||||||||||||
Provision for credit losses | 200 | 200 | 200 | 100 | 460 | — | (56.5) | |||||||||||||
Noninterest income | 2,694 | 2,529 | 2,609 | 2,188 | 2,112 | 6.5 | 27.6 | |||||||||||||
Noninterest expense | 9,845 | 9,384 | 8,985 | 9,343 | 9,216 | 4.9 | 6.8 | |||||||||||||
Income from continuing operations | 5,413 | 5,625 | 5,717 | 5,139 | 5,162 | (3.8) | 4.9 | |||||||||||||
Income tax expense | 1,399 | 1,411 | 1,489 | 1,311 | 1,309 | (0.9) | 6.9 | |||||||||||||
Income from continuing operations | 4,014 | 4,214 | 4,228 | 3,828 | 3,853 | (4.7) | 4.2 | |||||||||||||
(Loss) Income from discontinued | — | (10) | (4) | (99) | 104 | 100.0 | (100.0) | |||||||||||||
Gain on sale of insurance agency | — | — | — | — | 12,736 | — | — | |||||||||||||
Income tax expense (benefit) | — | (2) | — | (25) | 4,599 | 100.0 | (100.0) | |||||||||||||
(Loss) Income from discontinued | — | (8) | (4) | (74) | 8,241 | 100.0 | (100.0) | |||||||||||||
Net income | $ | 4,014 | $ | 4,206 | $ | 4,224 | $ | 3,754 | $ | 12,094 | (4.6) | (66.8) | ||||||||
From Continuing Operations: | ||||||||||||||||||||
Return on average assets | 1.03 | % | 1.10 | % | 1.16 | % | 1.06 | % | 1.04 | % | (7) | bp | (1) | bp | ||||||
Return on average equity | 8.24 | 8.66 | 8.97 | 8.39 | 8.83 | (42) | (59) | |||||||||||||
Return on average tangible equity (1) | 9.43 | 9.90 | 10.31 | 9.72 | 11.34 | (47) | (191) | |||||||||||||
Net interest margin | 3.47 | 3.52 | 3.54 | 3.61 | 3.58 | (5) | (11) | |||||||||||||
Efficiency ratio - GAAP | 63.69 | 61.70 | 60.29 | 64.07 | 62.11 | 199 | 158 | |||||||||||||
Efficiency ratio - Non-GAAP (1) | 62.58 | 60.58 | 59.09 | 62.81 | 60.18 | 200 | 240 | |||||||||||||
PER SHARE DATA | ||||||||||||||||||||
Basic net income per common share | ||||||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.30 | $ | 0.30 | (3.0) | % | 6.7 | % | ||||||
(Loss) Income from discontinued | — | — | — | (0.01) | 0.65 | — | (100.0) | |||||||||||||
Net income | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.29 | $ | 0.95 | (3.0) | (66.3) | ||||||||
Diluted net income per common share | ||||||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.30 | $ | 0.30 | (3.0) | 6.7 | ||||||||
(Loss) Income from discontinued | — | — | — | (0.01) | 0.65 | — | (100.0) | |||||||||||||
Net income | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.29 | $ | 0.95 | (3.0) | (66.3) | ||||||||
Dividends paid per common share | 0.12 | 0.10 | 0.10 | 0.10 | 0.09 | 20.0 | 33.3 | |||||||||||||
Book value per common share at | 15.42 | 15.22 | 14.97 | 14.64 | 14.37 | 1.3 | 7.3 | |||||||||||||
Tangible book value per common | 13.84 | 13.66 | 13.40 | 13.06 | 12.77 | 1.3 | 8.4 | |||||||||||||
Market value at period end | 17.36 | 15.41 | 16.34 | 14.91 | 14.54 | 12.7 | 19.4 | |||||||||||||
Market range: | ||||||||||||||||||||
High | 17.90 | 17.00 | 16.48 | 16.11 | 18.32 | 5.3 | (2.3) | |||||||||||||
Low | 15.01 | 14.90 | 14.84 | 14.00 | 12.95 | 0.7 | 15.9 | |||||||||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||||||||
Loans | $ | 1,246,355 | $ | 1,235,374 | $ | 1,221,215 | $ | 1,201,913 | $ | 1,189,504 | 0.9 | % | 4.8 | % | ||||||
Investment securities | 145,544 | 155,324 | 159,878 | 165,009 | 177,700 | (6.3) | (18.1) | |||||||||||||
Earning assets | 1,463,490 | 1,432,252 | 1,399,418 | 1,394,728 | 1,385,368 | 2.2 | 5.6 | |||||||||||||
Assets | 1,553,017 | 1,513,790 | 1,468,093 | 1,460,291 | 1,463,839 | 2.6 | 6.1 | |||||||||||||
Deposits | 1,334,047 | 1,280,057 | 1,233,951 | 1,215,702 | 1,197,445 | 4.2 | 11.4 | |||||||||||||
Stockholders' equity | 193,239 | 193,120 | 189,101 | 184,972 | 173,214 | 0.1 | 11.6 | |||||||||||||
CREDIT QUALITY DATA | ||||||||||||||||||||
Net charge-offs | $ | 131 | $ | 67 | $ | 313 | $ | 25 | $ | 445 | 95.5 | % | (70.6) | % | ||||||
Nonaccrual loans | $ | 10,590 | $ | 12,530 | $ | 14,592 | $ | 15,360 | $ | 16,655 | (15.5) | (36.4) | ||||||||
Loans 90 days past due and still | 1,326 | 712 | 439 | 47 | 139 | 86.2 | 854.0 | |||||||||||||
Other real estate owned | 74 | 74 | 524 | 979 | 1,222 | — | (93.9) | |||||||||||||
Total nonperforming assets | $ | 11,990 | $ | 13,316 | $ | 15,555 | $ | 16,386 | $ | 18,016 | (10.0) | (33.4) | ||||||||
Accruing troubled debt restructurings | $ | 7,501 | $ | 7,588 | $ | 7,768 | $ | 7,828 | $ | 8,663 | (1.1) | (13.4) | ||||||||
Total nonperforming assets and | $ | 19,491 | $ | 20,904 | $ | 23,323 | $ | 24,214 | $ | 26,679 | (6.8) | (26.9) | ||||||||
CAPITAL AND CREDIT QUALITY RATIOS | ||||||||||||||||||||
Period-end equity to assets | 12.37 | % | 12.42 | % | 12.85 | % | 12.59 | % | 12.35 | % | (5) | bp | 2 | bp | ||||||
Period-end tangible equity to tangible | 11.24 | 11.29 | 11.66 | 11.39 | 11.13 | (5) | 11 | |||||||||||||
Annualized net charge-offs to average | 0.04 | 0.02 | 0.10 | 0.01 | 0.15 | 2 | (11) | |||||||||||||
Allowance for credit losses as a percent | ||||||||||||||||||||
Period-end loans | 0.84 | 0.85 | 0.83 | 0.86 | 0.87 | (1) | (3) | |||||||||||||
Nonaccrual loans | 99.22 | 83.30 | 70.62 | 67.83 | 62.10 | 1,592 | 3,712 | |||||||||||||
Nonperforming assets | 87.63 | 78.39 | 66.25 | 63.58 | 57.41 | 924 | 3,022 | |||||||||||||
Accruing TDRs | 140.07 | 137.56 | 132.66 | 133.09 | 119.39 | 251 | 2,068 | |||||||||||||
Nonperforming assets and accruing | 53.91 | 49.93 | 44.18 | 43.02 | 38.77 | 398 | 1,514 | |||||||||||||
As a percent of total loans: | ||||||||||||||||||||
Nonaccrual loans | 0.85 | 1.01 | 1.18 | 1.27 | 1.39 | (16) | (54) | |||||||||||||
Accruing TDRs | 0.60 | 0.61 | 0.63 | 0.65 | 0.72 | (1) | (12) | |||||||||||||
Nonaccrual loans and accruing | 1.45 | 1.63 | 1.80 | 1.91 | 2.12 | (18) | (67) | |||||||||||||
As a percent of total loans+other real | ||||||||||||||||||||
Nonperforming assets | 0.96 | 1.08 | 1.25 | 1.35 | 1.51 | (12) | (55) | |||||||||||||
Nonperforming assets and accruing | 1.56 | 1.69 | 1.88 | 2.00 | 2.23 | (13) | (67) | |||||||||||||
As a percent of total assets: | ||||||||||||||||||||
Nonaccrual loans | 0.68 | 0.80 | 0.98 | 1.03 | 1.12 | (12) | (44) | |||||||||||||
Nonperforming assets | 0.77 | 0.85 | 1.04 | 1.10 | 1.21 | (8) | (44) | |||||||||||||
Accruing TDRs | 0.48 | 0.49 | 0.52 | 0.53 | 0.58 | (1) | (10) | |||||||||||||
Nonperforming assets and accruing | 1.25 | 1.34 | 1.56 | 1.63 | 1.80 | (9) | (55) | |||||||||||||
(1) See the reconciliation table. | ||||||||||||||||||||
Shore Bancshares, Inc. | ||||||||||||||||||||
Q4 2019 | Q4 2019 | |||||||||||||||||||
compared to | compared to | |||||||||||||||||||
Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2019 | Q4 2018 | ||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Interest and fees on loans | $ | 14,043 | $ | 14,100 | $ | 13,749 | $ | 13,499 | $ | 13,452 | (0.4) | % | 4.4 | % | ||||||
Interest on investment securities: | ||||||||||||||||||||
Taxable | 827 | 870 | 887 | 998 | 1,339 | (4.9) | (38.2) | |||||||||||||
Interest on deposits with other banks | 295 | 223 | 113 | 163 | 103 | 32.3 | 186.4 | |||||||||||||
Total interest income | 15,165 | 15,193 | 14,749 | 14,660 | 14,894 | (0.2) | 1.8 | |||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Interest on deposits | 2,287 | 2,288 | 2,204 | 1,947 | 1,577 | (0.0) | 45.0 | |||||||||||||
Interest on short-term borrowings | 6 | 117 | 145 | 213 | 486 | (94.9) | (98.8) | |||||||||||||
Interest on long-term borrowings | 108 | 108 | 107 | 106 | 105 | — | 2.9 | |||||||||||||
Total interest expense | 2,401 | 2,513 | 2,456 | 2,266 | 2,168 | (4.5) | 10.7 | |||||||||||||
NET INTEREST INCOME | 12,764 | 12,680 | 12,293 | 12,394 | 12,726 | 0.7 | 0.3 | |||||||||||||
Provision for credit losses | 200 | 200 | 200 | 100 | 460 | — | (56.5) | |||||||||||||
NET INTEREST INCOME AFTER PROVISION | ||||||||||||||||||||
FOR CREDIT LOSSES | 12,564 | 12,480 | 12,093 | 12,294 | 12,266 | 0.7 | 2.4 | |||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Service charges on deposit accounts | 958 | 990 | 1,028 | 934 | 1,045 | (3.2) | (8.3) | |||||||||||||
Trust and investment fee income | 382 | 383 | 385 | 372 | 360 | (0.3) | 6.1 | |||||||||||||
Other noninterest income | 1,354 | 1,156 | 1,196 | 882 | 707 | 17.1 | 91.5 | |||||||||||||
Total noninterest income | 2,694 | 2,529 | 2,609 | 2,188 | 2,112 | 6.5 | 27.6 | |||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Salaries and wages | 4,002 | 3,853 | 3,792 | 3,766 | 3,999 | 3.9 | 0.1 | |||||||||||||
Employee benefits | 1,662 | 1,299 | 1,068 | 1,254 | 797 | 27.9 | 108.5 | |||||||||||||
Occupancy expense | 702 | 697 | 668 | 691 | 649 | 0.7 | 8.2 | |||||||||||||
Furniture and equipment expense | 286 | 263 | 295 | 263 | 236 | 8.7 | 21.2 | |||||||||||||
Data processing | 989 | 972 | 919 | 910 | 844 | 1.7 | 17.2 | |||||||||||||
Directors' fees | 137 | 140 | 116 | 86 | 145 | (2.1) | (5.5) | |||||||||||||
Amortization of intangible assets | 144 | 144 | 155 | 162 | 269 | — | (46.5) | |||||||||||||
FDIC insurance premium expense | (42) | — | 181 | 205 | 159 | — | (126.4) | |||||||||||||
Other real estate owned expenses, net | (1) | 133 | 60 | 233 | 228 | (100.8) | (100.4) | |||||||||||||
Legal and professional fees | 568 | 495 | 559 | 601 | 603 | 14.7 | (5.8) | |||||||||||||
Other noninterest expenses | 1,398 | 1,388 | 1,172 | 1,172 | 1,287 | 0.7 | 8.6 | |||||||||||||
Total noninterest expense | 9,845 | 9,384 | 8,985 | 9,343 | 9,216 | 4.9 | 6.8 | |||||||||||||
Income from continuing operations before income | 5,413 | 5,625 | 5,717 | 5,139 | 5,162 | (3.8) | 4.9 | |||||||||||||
Income tax expense | 1,399 | 1,411 | 1,489 | 1,311 | 1,309 | (0.9) | 6.9 | |||||||||||||
Income from continuing operations | 4,014 | 4,214 | 4,228 | 3,828 | 3,853 | (4.7) | 4.2 | |||||||||||||
(Loss) Income from discontinued operations before | — | (10) | (4) | (99) | 104 | 100.0 | (100.0) | |||||||||||||
Gain on sale of insurance agency | — | — | — | — | 12,736 | — | (100.0) | |||||||||||||
(Loss) Income tax expense (benefit) | — | (2) | — | (25) | 4,599 | 100.0 | (100.0) | |||||||||||||
(Loss) Income from discontinued operations | — | (8) | (4) | (74) | 8,241 | 100.0 | (100.0) | |||||||||||||
NET INCOME | $ | 4,014 | $ | 4,206 | $ | 4,224 | $ | 3,754 | $ | 12,094 | (4.6) | (66.8) | ||||||||
Weighted average shares outstanding - basic | 12,588 | 12,764 | 12,779 | 12,769 | 12,749 | (1.4) | (1.3) | |||||||||||||
Weighted average shares outstanding - diluted | 12,593 | 12,769 | 12,784 | 12,773 | 12,766 | (1.4) | (1.4) | |||||||||||||
Basic net income per common share | ||||||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.30 | $ | 0.30 | (3.0) | 6.7 | ||||||||
(Loss) Income from discontinued operations | — | — | — | (0.01) | 0.65 | — | (100.0) | |||||||||||||
Net income | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.29 | $ | 0.95 | (3.0) | (66.3) | ||||||||
Diluted net income per common share | ||||||||||||||||||||
Income from continuing operations | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.30 | $ | 0.30 | (3.0) | 6.7 | ||||||||
(Loss) Income from discontinued operations | — | — | — | (0.01) | 0.65 | — | (100.0) | |||||||||||||
Net income | $ | 0.32 | $ | 0.33 | $ | 0.33 | $ | 0.29 | $ | 0.95 | (3.0) | (66.3) | ||||||||
Dividends paid per common share | 0.12 | 0.10 | 0.10 | 0.10 | 0.09 | 20.0 | 33.3 | |||||||||||||
Shore Bancshares, Inc. | ||||||||||||||||||||||||||||||
Average balance | ||||||||||||||||||||||||||||||
Q4 2019 | Q4 2019 | |||||||||||||||||||||||||||||
compared to | compared to | |||||||||||||||||||||||||||||
Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2019 | Q4 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) | 1,246,355 | 4.48 | % | $ | 1,235,374 | 4.54 | % | $ | 1,221,215 | 4.53 | % | $ | 1,201,913 | 4.57 | % | $ | 1,189,504 | 4.50 | % | 0.9 | % | 4.8 | % | |||||||
Investment securities | ||||||||||||||||||||||||||||||
Taxable | 145,544 | 2.27 | 155,324 | 2.24 | 159,878 | 2.22 | 165,009 | 2.45 | 177,700 | 2.46 | (6.3) | (18.1) | ||||||||||||||||||
Interest-bearing deposits | 71,591 | 1.63 | 41,554 | 2.13 | 18,325 | 2.47 | 27,806 | 2.38 | 18,164 | 2.25 | 72.3 | 294.1 | ||||||||||||||||||
Total earning assets | 1,463,490 | 4.12 | % | 1,432,252 | 4.22 | % | 1,399,418 | 4.24 | % | 1,394,728 | 4.27 | % | 1,385,368 | 4.20 | % | 2.2 | 5.6 | |||||||||||||
Cash and due from banks | 20,382 | 18,127 | 17,225 | 17,196 | 18,204 | 12.4 | 12.0 | |||||||||||||||||||||||
Other assets | 79,586 | 73,823 | 61,906 | 58,756 | 70,858 | 7.8 | 12.3 | |||||||||||||||||||||||
Allowance for credit losses | (10,441) | (10,412) | (10,456) | (10,389) | (10,591) | 0.3 | (1.4) | |||||||||||||||||||||||
Total assets | $ | 1,553,017 | $ | 1,513,790 | $ | 1,468,093 | $ | 1,460,291 | $ | 1,463,839 | 2.6 | 6.1 | ||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||||||
Demand deposits | $ | 284,193 | 0.76 | % | $ | 252,386 | 0.70 | % | $ | 234,775 | 0.65 | % | $ | 239,794 | 0.61 | % | $ | 218,519 | 0.53 | % | 12.6 | 30.1 | ||||||||
Money market and savings deposits | 397,662 | 0.51 | 389,268 | 0.67 | 385,272 | 0.84 | 383,738 | 0.85 | 378,163 | 0.68 | 2.2 | 5.2 | ||||||||||||||||||
Brokered deposits | 8,135 | 2.15 | 14,568 | 2.29 | 20,866 | 2.52 | 22,080 | 2.37 | 22,816 | 2.17 | (44.2) | (64.3) | ||||||||||||||||||
Certificates of deposit $100,000 or | 126,411 | 1.85 | 119,200 | 1.78 | 107,549 | 1.54 | 98,535 | 1.24 | 97,023 | 0.94 | 6.0 | 30.3 | ||||||||||||||||||
Other time deposits | 149,197 | 1.58 | 149,708 | 1.49 | 145,900 | 1.31 | 140,523 | 1.02 | 141,702 | 0.80 | (0.3) | 5.3 | ||||||||||||||||||
Interest-bearing deposits | 965,598 | 0.94 | 925,130 | 0.98 | 894,362 | 0.99 | 884,670 | 0.89 | 858,223 | 0.73 | 4.4 | 12.5 | ||||||||||||||||||
Short-term borrowings | 1,889 | 1.26 | 17,729 | 2.64 | 21,557 | 2.70 | 32,984 | 2.62 | 72,462 | 2.66 | (89.3) | (97.4) | ||||||||||||||||||
Long-term borrowings | 15,000 | 2.86 | 15,000 | 2.86 | 15,000 | 2.86 | 15,000 | 2.87 | 14,348 | 2.89 | — | 4.5 | ||||||||||||||||||
Total interest-bearing liabilities | 982,487 | 0.97 | % | 957,859 | 1.04 | % | 930,919 | 1.06 | % | 932,654 | 0.99 | % | 945,033 | 0.91 | % | 2.6 | 4.0 | |||||||||||||
Noninterest-bearing deposits | 368,449 | 354,927 | 339,589 | 331,032 | 339,222 | 3.8 | 8.6 | |||||||||||||||||||||||
Accrued expenses and other liabilities | 8,842 | 7,884 | 8,484 | 11,633 | 6,370 | 12.2 | 38.8 | |||||||||||||||||||||||
Stockholders' equity | 193,239 | 193,120 | 189,101 | 184,972 | 173,214 | 0.1 | 11.6 | |||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,553,017 | $ | 1,513,790 | $ | 1,468,093 | $ | 1,460,291 | $ | 1,463,839 | 2.6 | 6.1 | ||||||||||||||||||
Net interest spread | 3.15 | % | 3.18 | % | 3.18 | % | 3.28 | % | 3.29 | % | ||||||||||||||||||||
Net interest margin | 3.47 | % | 3.52 | % | 3.54 | % | 3.61 | % | 3.58 | % | ||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||
(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. | ||||||||||||||||||||||
YTD | YTD | |||||||||||||||||||||
Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | 12/31/2019 | 12/31/2018 | ||||||||||||||||
The following reconciles return on average equity and return | ||||||||||||||||||||||
Income from continuing operations | $ | 4,014 | $ | 4,214 | $ | 4,228 | $ | 3,828 | $ | 3,853 | $ | 16,284 | $ | 15,763 | ||||||||
Income from continuing operations - annualized (A) | $ | 15,925 | $ | 16,719 | $ | 16,958 | $ | 15,525 | $ | 15,286 | $ | 16,284 | $ | 15,763 | ||||||||
Net income, excluding net amortization of intangible assets | $ | 4,121 | $ | 4,321 | $ | 4,344 | $ | 3,949 | $ | 4,054 | $ | 16,735 | $ | 16,408 | ||||||||
Net income, excluding net amortization of intangible assets - | $ | 16,350 | $ | 17,143 | $ | 17,424 | $ | 16,015 | $ | 16,084 | $ | 16,735 | $ | 16,408 | ||||||||
Average stockholders' equity (C) | $ | 193,239 | $ | 193,120 | $ | 189,101 | $ | 184,972 | $ | 173,214 | $ | 190,139 | $ | 168,782 | ||||||||
Less: Average goodwill and other intangible assets | (19,846) | (19,991) | (20,138) | (20,281) | (31,410) | (20,059) | (32,003) | |||||||||||||||
Average tangible equity (D) | $ | 173,393 | $ | 173,129 | $ | 168,963 | $ | 164,691 | $ | 141,804 | $ | 170,080 | $ | 136,779 | ||||||||
Return on average equity (GAAP) (A)/(C) | 8.24 | % | 8.66 | % | 8.97 | % | 8.39 | % | 8.83 | % | 8.56 | % | 9.34 | % | ||||||||
Return on average tangible equity (Non-GAAP) (B)/(D) | 9.43 | % | 9.90 | % | 10.31 | % | 9.72 | % | 11.34 | % | 9.84 | % | 12.00 | % | ||||||||
The following reconciles GAAP efficiency ratio and non- | ||||||||||||||||||||||
Noninterest expense (E) | $ | 9,845 | $ | 9,384 | $ | 8,985 | $ | 9,343 | $ | 9,216 | $ | 37,557 | $ | 36,831 | ||||||||
Less: Amortization of intangible assets | (144) | (144) | (155) | (162) | (269) | (605) | (866) | |||||||||||||||
Adjusted noninterest expense (F) | $ | 9,701 | $ | 9,240 | $ | 8,830 | $ | 9,181 | $ | 8,947 | $ | 36,952 | $ | 35,965 | ||||||||
Net interest income (G) | 12,764 | 12,680 | 12,293 | 12,394 | 12,726 | 50,131 | 50,635 | |||||||||||||||
Add: Taxable-equivalent adjustment | 44 | 44 | 41 | 34 | 30 | 163 | 114 | |||||||||||||||
Taxable-equivalent net interest income (H) | $ | 12,808 | $ | 12,724 | $ | 12,334 | $ | 12,428 | $ | 12,756 | $ | 50,294 | $ | 50,749 | ||||||||
Noninterest income (I) | $ | 2,694 | $ | 2,529 | $ | 2,609 | $ | 2,188 | $ | 2,112 | $ | 10,020 | 9,013 | |||||||||
Adjusted noninterest income (J) | $ | 2,694 | $ | 2,529 | $ | 2,609 | $ | 2,188 | $ | 2,112 | $ | 10,020 | $ | 9,013 | ||||||||
Efficiency ratio (GAAP) (E)/(G)+(I) | 63.69 | % | 61.70 | % | 60.29 | % | 64.07 | % | 62.11 | % | 62.44 | % | 61.75 | % | ||||||||
Efficiency ratio (Non-GAAP) (F)/(H)+(J) | 62.58 | % | 60.58 | % | 59.09 | % | 62.81 | % | 60.18 | % | 61.27 | % | 60.18 | % | ||||||||
The following reconciles book value per common share and | ||||||||||||||||||||||
Stockholders' equity (L) | $ | 192,802 | $ | 193,963 | $ | 191,307 | $ | 187,082 | $ | 183,185 | ||||||||||||
Less: Goodwill and other intangible assets | (19,770) | (19,914) | (20,058) | (20,214) | (20,383) | |||||||||||||||||
Tangible equity (M) | $ | 173,032 | $ | 174,049 | $ | 171,249 | $ | 166,868 | $ | 162,802 | ||||||||||||
Shares outstanding (N) | 12,500 | 12,742 | 12,780 | 12,780 | 12,749 | |||||||||||||||||
Book value per common share (GAAP) (L)/(N) | $ | 15.42 | $ | 15.22 | $ | 14.97 | $ | 14.64 | $ | 14.37 | ||||||||||||
Tangible book value per common share (Non-GAAP) (M)/(N) | $ | 13.84 | $ | 13.66 | $ | 13.40 | $ | 13.06 | $ | 12.77 | ||||||||||||
The following reconciles equity to assets and tangible equity | ||||||||||||||||||||||
Stockholders' equity (O) | $ | 192,802 | $ | 193,963 | $ | 191,307 | $ | 187,082 | $ | 183,185 | ||||||||||||
Less: Goodwill and other intangible assets | (19,770) | (19,914) | (20,058) | (20,214) | (20,383) | |||||||||||||||||
Tangible equity (P) | $ | 173,032 | $ | 174,049 | $ | 171,249 | $ | 166,868 | $ | 162,802 | ||||||||||||
Assets (Q) | $ | 1,559,235 | $ | 1,561,679 | $ | 1,488,562 | $ | 1,485,799 | $ | 1,483,076 | ||||||||||||
Less: Goodwill and other intangible assets | (19,770) | (19,914) | (20,058) | (20,214) | (20,383) | |||||||||||||||||
Tangible assets (R) | $ | 1,539,465 | $ | 1,541,765 | $ | 1,468,504 | $ | 1,465,585 | $ | 1,462,693 | ||||||||||||
Period-end equity/assets (GAAP) (O)/(Q) | 12.37 | % | 12.42 | % | 12.85 | % | 12.59 | % | 12.35 | % | ||||||||||||
Period-end tangible equity/tangible assets (Non-GAAP) (P)/(R) | 11.24 | % | 11.29 | % | 11.66 | % | 11.39 | % | 11.13 | % | ||||||||||||
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. | ||||||||||||||||||||||
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SOURCE Shore Bancshares, Inc.
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