Shore Bancshares, Inc. (NASDAQ – SHBI) (the “Company” or “Shore Bancshares”), the holding company for Shore United Bank, N.A. (the “Bank”) reported net income for the fourth quarter of 2025 of $15.9 million, or $0.48 per diluted common share, compared to net income of $14.3 million, or $0.43 per diluted common share, for the third quarter of 2025, and net income of $13.3 million, or $0.40 per diluted common share, for the fourth quarter of 2024.
Fourth
Quarter and Full-Year 2025 Highlights
—
Net Income – Net income for the fourth quarter of 2025 increased $1.5 million to $15.9 million from $14.3 million in the third quarter of 2025. Net income increased primarily due to higher net interest income of $1.8 million and higher noninterest income of $966 thousand driven by one-time insurance proceeds, partially offset by higher noninterest expense of $1.1 million. Net income for the year ended December 31, 2025 was $59.5 million, compared to $43.9 million for the year ended December 31, 2024. The annual increase was primarily driven by an increase in net interest income due to loans repricing favorably, coupled with lower cost of deposits during the period. The favorable changes were offset by a higher provision for loan losses, driven by increased charge-offs in 2025.
—
Return on Average Assets (“ROAA”) – The Company reported ROAA of 1.02% for the fourth quarter of 2025, compared to 0.95% for the third quarter of 2025 and 0.86% for the fourth quarter of 2024. Non-U.S. generally accepted accounting principles (“GAAP”) adjusted ROAA([1]) was 1.11% for the fourth quarter of 2025, compared to 1.05% for the third quarter of 2025 and 0.94% for the fourth quarter of 2024.
—
Net Interest Margin (“NIM”) – Net interest income for the fourth quarter of 2025 increased $1.8 million to $50.4 million compared to the third quarter of 2025. NIM increased 1 basis point (“bps”) to 3.43% during the fourth quarter of 2025 compared to the third quarter of 2025. NIM excluding accretion(1) increased for the comparable periods from 3.22% to 3.24%. Excluding accretion interest, loan yields increased 2 bps and funding costs decreased 4 bps for the comparable periods. Net interest income increased due to modest loan growth and higher yields on investments, coupled with a lower cost of deposits. These favorable changes were partially offset by lower yields on interest-bearing deposits with other institutions.
—
Book Value per Share – Book value per share increased to $17.65 at December 31, 2025 from $17.27 at September 30, 2025 and $16.23 at December 31, 2024.
—
Asset Quality – Nonperforming assets were 0.69% of total assets at December 31, 2025, an increase from 0.45% at September 30, 2025 and 0.40% at December 31, 2024. Classified assets were 0.96% of total assets at December 31, 2025, an increase when compared to 0.83% at September 30, 2025 and 0.45% at December 31, 2024. The allowance for credit losses (“ACL”) was $58.8 million at December 31, 2025, compared to $59.6 million at September 30, 2025 and $57.9 million at December 31, 2024. The ACL as a percentage of loans decreased to 1.20% at December 31, 2025, compared to 1.22% at September 30, 2025 and 1.21% at December 31, 2024.
—
Operating Leverage – The efficiency ratio for the fourth quarter of 2025 was 60.06% compared to 61.00% in the third quarter of 2025 and 64.21% for the fourth quarter of 2024. The non-GAAP efficiency ratio(1), which excludes amortization of intangibles was 56.59% for the fourth quarter of 2025, compared to 57.30% for the third quarter of 2025 and 60.28% for the fourth quarter of 2024. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.
“Our fourth-quarter and full year results underscore the strength and momentum of the bank,” stated James (“Jimmy”) Burke, President and Chief Executive Officer. “We delivered meaningful quarterly and annual improvements in net income, net interest income, ROAA, and NIM, while controlling expenses and driving operating leverage. Nonperforming and classified assets have increased but overall asset quality remains solid and is supported by strong collateral and reserves.
As we enter 2026, we remain confident in our ability to strengthen core profitability and deliver sustainable long?term value for our shareholders.”
Balance Sheet Review
Total assets were $6.26 billion at December 31, 2025, an increase of $28.1 million, or 0.5%, when compared to $6.23 billion at December 31, 2024. The increase was primarily due to an increase in our loan portfolio of $128.3 million and an increase in our investment securities portfolio of $5.3 million, which were partially offset by a decrease in cash and cash equivalents of $104.3 million. The decrease in cash and cash equivalents was primarily driven by loan growth. Total assets decreased $19.7 million, or 0.3%, from $6.28 billion when compared to September 30, 2025.
Non-owner occupied commercial real estate (“CRE”) loans were $2.15 billion and $2.08 billion, and as a percentage of the Bank’s Tier 1 Capital + ACL were 343% and 360% at December 31, 2025 and 2024, respectively.
CRE loans (excluding land and construction) at December 31, 2025 were $2.64 billion compared to $2.56 billion at December 31, 2024. The following table provides the stratification of the classes of CRE loans (excluding land and construction) at December 31, 2025.
December 31, 2025
Owner Occupied
Non-Owner Occupied
($ in thousands) Average Average Loan Size Loan Average Average Loan Size Loan
LTV(1) Balance(2) LTV(1) Balance(2)
Office, medical 42.28 % $594 $30,300 49.55 % $1,796 $98,803
Office, govt. or govt. contractor 52.80 590 4,722 56.41 2,924 46,780
Office, other 47.74 472 88,800 47.17 1,342 216,114
Office, total 46.80 501 123,822 48.35 1,559 361,697
Retail 49.74 596 64,988 48.36 2,595 485,267
Multi-family (5+ units) 54.30 2,367 262,788
Hotel/motel 44.03 4,088 196,211
Industrial/warehouse 46.88 657 94,538 48.13 1,472 189,937
Commercial-improved 42.04 1,186 217,092 49.36 1,274 156,753
Marine/boat slips 30.58 1,493 38,812 36.85 1,484 7,421
Restaurant 48.38 985 55,149 49.58 1,039 43,635
Church 34.37 878 59,690 13.26 2,368 2,368
Land/lot loans 46.47 582 1,164 49.68 1,339 1,339
Other 40.20 1,420 149,429 40.85 1,272 131,896
Total CRE loans, gross 43.61 843 $804,684 47.68 1,886 $1,839,312
(1) Loan-to-value ("LTV") is determined based on latest available appraisal against current bank owned principal. Loans without an updated
appraisal utilized the original transaction value.
(2)
Loan balance includes deferred fees and costs.
The office CRE loan portfolio, which includes owner occupied and non-owner occupied CRE loans, was $485.9 million, or 9.9% of total loans at December 31, 2025. The office CRE loan portfolio included loans to medical tenants of $129.1 million, or 26.6% of the total office CRE loan portfolio, at December 31, 2025. The office CRE loan portfolio also included loans to government or government contractor tenants of $51.5 million, or 10.6% of the total office CRE loan portfolio for the same period. At December 31, 2025, the average loan debt-service coverage ratio on the office CRE loan portfolio was 1.7x and the average LTV was 47.55%.
The 481 loans in the office CRE portfolio at December 31, 2025 had an average loan size of $1.0 million and a median loan size of $365 thousand. LTV estimates for the office CRE portfolio at December 31, 2025 are summarized below and LTV collateral values are based on the most recent appraisal, which may vary from the appraised value at loan origination.
LTV Range
($ in thousands) Loan Count Loan Balance % of Office
CRE
Less than or equal to 50% 244 $170,536 35.0 %
Greater than 50% and less than or equal to 60% 73 114,510 23.6
Greater than 60% and less than or equal to 70% 92 149,203 30.7
Greater than 70% and less than or equal to 80% 58 42,608 8.8
Greater than 80% 14 9,083 1.9
Total 481 $485,940 100.0 %
There were 17 office CRE loans with balances greater than $5.0 million, totaling $166.1 million at December 31, 2025, compared to 18 office CRE loans totaling $164.5 million at December 31, 2024. The increase this portfolio segment was the result of normal amortization, the payoff of a $5.6 million loan, the change in purpose of collateral of an $11.8 million loan from office to school, and a loan opened for $25 million. Of the office CRE portfolio balance, 80.5% was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 97.1% was secured by properties with five stories or less. Of the office CRE loans, $30.7 million were classified as special mention or substandard at December 31, 2025. In the fourth quarter of 2025 there was a charge-off of $2.6 million related to the office CRE portfolio. There were no other office CRE portfolio charge-offs during 2025.
Nonperforming assets were $43.2 million and $28.1 million, or 0.69% and 0.45% of total assets, as of December 31, 2025 and September 30, 2025, respectively. The balance of nonperforming assets increased $15.1 million in the fourth quarter, primarily due to commercial real estate and consumer loans. When comparing December 31, 2025 to December 31, 2024, nonperforming assets increased $18.4 million, primarily due to an increase in nonaccrual loans of $19.0 million and an decrease in repossessed marine and auto loans of $502 thousand. Substandard loans, which include nonaccrual loans, accruing loans and accruing loans 90 days or more past due were $57.4 million at December 31, 2025 compared to $48.5 million at September 30, 2025 and $24.7 million at December 31, 2024. The increase was primarily due to several commercial non-owner occupied real estate loans that were downgraded during the current period. All of these loans are well secured by collateral and required minimal individual reserves as of December 31, 2025.
Total deposits increased $5.7 million from September 30, 2025 to $5.53 billion at December 31, 2025 and increased $5.5 million when compared to December 31, 2024. The increase in total deposits year-to-date was primarily due to an increase in time deposits of $85.9 million, an increase in noninterest-bearing accounts of $25.1 million, an increase in brokered deposits of $10.9 million and an increase in money market and savings accounts of $9.0 million. These increases were partially offset by a decrease in interest-bearing checking deposits of $125.5 million. Core deposits, which exclude municipal deposits, increased by $154.8 million, or 3.8%, during the same period, which was partially offset by volatility driven by a large client relationship.
Total funding, which includes customer deposits, Federal Home Loan Bank (“FHLB”) advances and brokered deposits was $5.53 billion at December 31, 2025, compared to $5.58 billion at September 30, 2025. FHLB advances were $50.0 million at September 30, 2025, which was repaid in the fourth quarter of 2025. Brokered deposits were $10.9 million at December 31, 2025 and September 30, 2025. Total reciprocal?deposits?were $1.52 billion and $1.48 billion?at December 31, 2025 and September 30, 2025, respectively.
Uninsured deposits were $937.2 million, or 16.9% of total deposits, at December 31, 2025. Uninsured deposits, excluding deposits secured with pledged collateral, were $786.5 million, or 14.2% of total deposits, at December 31, 2025. At December 31, 2025, the available liquidity was $1.42 billion, including $355.6 million in cash and cash equivalents, $1.07 billion in secured borrowing capacity at the FHLB and other correspondent banks, and $95.0 million in unsecured lines of credit.
Total stockholders’ equity increased $48.8 million, or 9.0%, when compared to December 31, 2024, primarily due to current year earnings and a decrease in accumulated other comprehensive losses, partially offset by cash dividends paid. As of December 31, 2025 and 2024, the ratio of total equity to total assets was 9.42% and 8.68%, respectively, and the ratio of total tangible equity to total tangible assets([2]) was 8.06% and 7.17%, respectively. The Company’s tangible common equity ratio at December 31, 2025 was 8.06% compared to 7.17% at December 31, 2024. The Company’s Tier 1 and Total Risk-Based Capital Ratios at December 31, 2025 were 11.15% and 13.61%, respectively.
Review of Quarterly Financial Results
Net interest income was $50.4 million for the fourth quarter of 2025, compared to $48.7 million for the third quarter of 2025 and $44.0 million for the fourth quarter of 2024. The increase in net interest income when compared to the third quarter of 2025 was primarily due to an increase in interest income on deposits at other banks of $1.6 million, an increase in interest income on loans of $1.4 million and a decrease in interest expense on short-term borrowings of $394 thousand. These favorable changes were partially offset by an increase in interest expense on deposits of $815 thousand and an increase in interest expense of long-term borrowings of $763 thousand. The increase in interest expense on long-term borrowings is due to a new debt issuance of $60.0 million during the quarter, which replaced $45 million of subordinated debt that was redeemed at the end of the quarter. The increase in net interest income was $6.4 million when compared to the fourth quarter of 2024, and was primarily due to an increase in interest and fees on loans of $4.9 million and a decrease in interest expense on deposits of $3.1 million. These favorable changes were partially offset by a decrease in interest on deposits with other banks of $1.3 million, an increase in interest expense on short-term borrowings of $246 thousand, and an increase in interest expense on long-term borrowings of $151 thousand.
The Company’s NIM increased to 3.43% for the fourth quarter of 2025 from 3.42% for the third quarter of 2025, primarily due to higher core interest income. NIM excluding accretion increased for the comparable periods from 3.22% to 3.24%. Excluding accretion interest income, loan yields increased 2 bps and funding costs decreased 4 bps for the comparable periods. Interest expense for the fourth quarter of 2025 increased $1.2 million compared to the third quarter of 2025, primarily due to write-offs of merger-related interest rate marks on certain deposit products. The Company’s NIM increased to 3.43% for the fourth quarter of 2025 from 3.03% for the fourth quarter of 2024. The Company’s average interest-earning asset yield increased to 5.45% for the fourth quarter of 2025 from 5.25% for the fourth quarter of 2024, while the average cost of funds decreased 20 bps to 2.11% from 2.31% for the same periods.
The provision for credit losses was $2.8 million for the three months ended December 31, 2025. The comparable amounts were $3.0 million for the three months ended September 30, 2025 and $780 thousand for the three months ended December 31, 2024. The decrease in the provision for credit losses for the fourth quarter of 2025 compared to the third quarter of 2025 was due to lower reserves resulting from favorable economic conditions, partially offset by charge-offs driven by a large commercial real estate loan write-down. Coverage ratios decreased to 1.20% at December 31, 2025 from 1.22% at September 30, 2025, and decreased from 1.21% at December 31, 2024. Net charge-offs increased to $3.6 million for the fourth quarter of 2025 compared to $1.8 million for the third quarter of 2025 and $1.3 million for the fourth quarter of 2024. The increase was driven by a large commercial real estate write-down in the fourth quarter 2025.
Total noninterest income for the fourth quarter of 2025 was $8.7 million, an increase of $1.0 million from $7.7 million for the third quarter of 2025, and a decrease of $186 thousand from $8.9 million for the fourth quarter of 2024. When comparing the fourth quarter of 2025 to the third quarter of 2025, the increase in noninterest income was primarily due to a one-time receipt of insurance proceeds. Comparing the fourth quarter of 2025 to the fourth quarter of 2024, the decrease in noninterest income was primarily due a decrease in mortgage banking revenue, partially offset by an increase in trust and investment fee income, an increase in interchange credits and the absence of the one-time gain on sale of real property in 2024.
Total noninterest expense of $35.5 million for the fourth quarter of 2025 increased $1.1 million compared to $34.4 million for the third quarter of 2025, and increased $1.6 million compared to $33.9 million for the fourth quarter of 2024. The increase from the third quarter of 2025 was primarily due to higher professional service fees of $248 thousand and other noninterest expense of $689 thousand related to writedown of repossessed assets. The increase from the fourth quarter of 2024 was primarily due to higher salaries and benefits expense of $1.4 million and higher software and data processing costs of $685 thousand, partially offset by lower amortization of other intangible assets of $298 thousand and lower legal and professional services of $284 thousand.
The efficiency ratio for the fourth quarter of 2025 when compared to the third quarter of 2025 and the fourth quarter of 2024 was 60.06%, 61.00% and 64.21%, respectively. Non-GAAP efficiency ratios([3]) for the same periods were 56.59%, 57.30% and 60.28%, respectively.
Review of
Full-Year Financial Results
Net interest income for the year ended December 31, 2025 was $192.4 million, an increase of $21.8 million, or 12.8%, when compared to the year ended December 31, 2024. The increase in net interest income was primarily due to an increase in total interest income of $14.7 million, or 5.0%, which included an increase in interest and fees on loans of $11.0 million, or 4.1%, an increase in interest on deposits with other banks of $2.8 million, or 44.6%, and an increase in interest income on taxable investments of $934 thousand. The increase in interest and fees on loans was primarily due to the increase in the average balance of loans of $130.3 million, or 2.8%. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $6.1 million and the decrease in interest expense on borrowings of $1.0 million was as a result of lower average FHLB advances and associated rates during the year.
The Company’s NIM increased from 3.10% for the year ended December 31, 2024 to 3.36% for the year ended December 31, 2025. Margins were higher due to a $211.0 million increase in interest-earning asset balances and a 5 basis point increase in interest-earning asset yields. These positive movements were coupled with lower-cost interest-bearing deposits. The increase in the average balances of interest-bearing deposits of $49.9 million was offset by a 20 basis point decrease in the associated rates paid, as well as a $27.2 million decrease in the average balance of FHLB advances and a 44 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 21 basis points and 27 basis points for the year ended December 31, 2025 and 2024, respectively, which resulted in NIM excluding accretion of 3.15% and 2.83% for the same periods.
The provision for credit losses for the year ended December 31, 2025 and 2024 was $8.4 million and $4.7 million, respectively. The increase in the provision for credit losses during 2025 was due to higher reserves related to growth in the loan portfolio and higher charge-offs, partially offset by an improved economic outlook. Net charge-offs for the year ended December 31, 2025 were $6.6 million compared to $4.1 million for the year ended December 31, 2024.
Total noninterest income for the year ended December 31, 2025 increased $1.5 million, or 4.9%, when compared to the same period in 2024. The increase was primarily due to a $344 thousand increase in interchange credits, a $338 thousand increase in trust and investment fee income, and a $622 thousand increase in other noninterest income.
Total noninterest expense for the year ended December 31, 2025 decreased $219 thousand, or 0.2%, when compared to the same period in 2024. Noninterest expense line items decreased primarily due to the absence of the $4.7 million credit card fraud event that occurred in 2024 and lower amortization of intangible assets of $1.2 million, which was partially offset by higher salaries and employee benefit expenses of $4.8 million and a $2.4 million increase in software and data processing expense in year ended December 31, 2025.
The efficiency ratio for the year ended December 31, 2025 was 61.33% compared to 68.55% for the year ended December 31, 2024. Non-GAAP efficiency ratios for the same periods were 57.43% and 61.43%, respectively. The net operating expense ratio, which is noninterest expense less noninterest income divided by average assets, was 1.73% for the year ended December 31, 2025, compared to 1.82% for the year ended December 31, 2024. The non-GAAP net operating expense ratio([4]), which excludes core deposit intangible amortization and non-recurring activity, was 1.59% for the year ended December 31, 2025, compared to 1.58% for the year ended December 31, 2024.
Dividend Schedule
Beginning this quarter, the Company’s Board of Directors will consider regular dividend declarations in February, May, August and November, with dividends, when declared, payable in March, June, September and December, which is one month later than in the past.
Shore Bancshares Information
Shore Bancshares is a financial holding company headquartered in Easton, Maryland and is the parent company of Shore United Bank, N.A. Shore Bancshares engages in trust and wealth management services through Wye Financial Partners, a division of Shore United Bank, N.A. Additional information is available at www.shorebancshares.com.
Forward-Looking Statements
This news release may contain statements relating to future events or our future results that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “intend,” “potential,” “target,” “plan,” “goal,” or words of similar meaning, or future or conditional verbs such as “could,” “would,” or “may.” Forward-looking statements include statements of our goals, intentions, or expectations; statements regarding our business plans, prospects, growth, or operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.
Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. The factors that could cause actual results to differ materially from those expressed in such forward-looking statements include, but are not limited to, the following: local, regional and global business, economic and political conditions and geopolitical events; changes in laws, rules and regulatory requirements, including capital and liquidity requirements; changes in consumer and business confidence, investor sentiment, and consumer spending and savings behavior; changes in the level of inflation; changes in monetary and fiscal policies; changes in trade policies, including the imposition of tariffs and retaliatory responses; changes in the demand for loans, deposits, and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; changes in FDIC assessments; changes in the interest rate environment; changes in income tax laws and regulations; our ability to manage effectively our capital and liquidity; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; changes in credit ratings assigned to us; competitive pressures among financial services companies; technology changes instituted by us, our counterparties, or competitors; the ability to attract, develop, and retain qualified employees; change in federal government enforcement of federal laws affecting the cannabis industry; our ability to maintain the security of our financial, accounting, technology, data processing and other operational systems and facilities; our ability to effectively defend ourselves against cyber-attacks and other attempts by unauthorized parties to access our information or information of our customers or to disrupt our systems; our ability to withstand disruptions that may be caused by any failure of our operational systems or those of third parties; our ability to control expenses; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; and the impact of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, epidemics or pandemics, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond our control. The Company provides greater detail regarding some of these factors in its Annual Report on Form 10-K for the year ended December 31, 2024, including in the Risk Factors section of that report, and in its other SEC reports. Forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
(1) See the Reconciliation of GAAP and non-GAAP Measures tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited)
Q4 2025 vs. Q4 2025 vs.
Year Ended December 31,
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2025 Q4 2024 2025 2024 2025 vs.
2024
PROFITABILITY FOR THE PERIOD
Taxable-equivalent net interest income $50,533 $48,738 $47,333 $46,110 $44,093 3.7 % 14.6 % $192,712 $170,874 12.8 %
Less: Taxable-equivalent adjustment 92 83 81 81 82 10.8 12.2 335 325 3.1
Net interest income 50,441 48,655 47,252 46,029 44,011 3.7 14.6 192,377 170,549 12.8
Provision for credit losses 2,827 2,992 1,528 1,028 780 (5.5) 262.4 8,375 4,738 76.8
Noninterest income 8,667 7,701 9,318 7,003 8,853 12.5 (2.1) 32,688 31,147 4.9
Noninterest expense 35,499 34,379 34,410 33,747 33,943 3.3 4.6 138,035 138,254 (0.2)
Income before income taxes 20,782 18,985 20,632 18,257 18,141 9.5 14.6 78,655 58,704 34.0
Income tax expense 4,895 4,637 5,125 4,493 4,859 5.6 0.7 19,149 14,815 29.3
NET INCOME $15,887 $14,348 $15,507 $13,764 $13,282 10.7 19.6 $59,506 $43,889 35.6
Adjusted net income - non-GAAP(1) $17,416 $15,889 $17,215 $15,481 $14,636 9.6 % 19.0 % $66,004 $54,348 21.4 %
Pre-tax pre-provision net income - non-GAAP(1) $23,609 $21,977 $22,160 $19,285 $18,921 7.4 % 24.8 % $87,030 $63,442 37.2 %
Return on average assets - GAAP 1.02 % 0.95 % 1.03 % 0.91 % 0.86 % 7 bp 16 bp 0.98 % 0.74 % 24 bp
Adjusted return on average assets - non-GAAP(1) 1.11 1.05 1.15 1.02 0.94 6 17 1.08 0.92 16
Return on average common equity - GAAP 10.79 9.96 11.13 10.20 9.82 83 97 10.52 8.35 217
Return on average tangible common equity - non-GAAP(1) 14.10 13.27 14.99 14.05 13.67 83 43 14.09 12.21 188
Net interest spread 2.48 2.46 2.39 2.30 2.02 2 46 2.40 2.14 26
Net interest margin 3.43 3.42 3.35 3.24 3.03 1 40 3.36 3.10 26
Efficiency ratio - GAAP 60.06 61.00 60.83 63.64 64.21 (94) (415) 61.33 68.55 (722)
Efficiency ratio - non-GAAP(1) 56.59 57.30 56.73 59.25 60.28 (71) (369) 57.43 61.43 (400)
Noninterest income to average assets 0.55 0.51 0.62 0.46 0.57 4 (2) 0.54 0.53 1
Noninterest expense to average assets 2.27 2.27 2.29 2.23 2.19 8 2.26 2.34 (8)
Net operating expense to average assets - GAAP 1.72 1.76 1.67 1.77 1.62 (4) 10 1.73 1.82 (9)
Net operating expense to average assets - non-GAAP(1) 1.59 1.62 1.52 1.62 1.50 (3) 9 1.59 1.58 1
PER SHARE DATA
Basic net income per common share $0.48 $0.43 $0.46 $0.41 $0.40 11.6 % 20.0 % $1.78 $1.32 34.8 %
Diluted net income per common share 0.48 0.43 0.46 0.41 0.40 11.6 20.0 1.78 1.32 34.8
Dividends paid per common share 0.12 0.12 0.12 0.12 0.12 0.48 0.48
Book value per common share at period end 17.65 17.27 16.94 16.55 16.23 2.2 8.7 17.65 16.23 8.7
Tangible book value per common share at period end - non-GAAP(1) 14.87 14.43 14.03 13.58 13.19 3.0 12.7 14.87 13.19 12.7
Common share market value at period end 17.68 16.41 15.72 13.54 15.85 7.7 11.5 17.68 15.85 11.5
Common share intraday price:
High $19.22 $17.67 $15.88 $17.24 $17.61 8.8 % 9.1 % 19.22 17.61 9.1 %
Low 14.93 14.96 11.47 13.15 13.21 (0.2) 13.0 11.47 10.06 14.0
____________________________________
(1) See the Reconciliation of GAAP and Non-GAAP Measures
tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited) - Continued
Q4 2025 Q4 2025
vs. vs.
Year Ended December 31,
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2025 Q4 2024 2025 2024 2025 vs.
2024
AVERAGE BALANCE SHEET DATA
Loans $4,909,619 $4,884,003 $4,833,558 $4,784,991 $4,796,245 0.5 % 2.4 % $4,853,469 $4,723,215 2.8 %
Investment securities 653,639 664,535 683,680 664,655 655,610 (1.6) (0.3) 666,591 668,279 (0.3)
Earning assets 5,843,816 5,658,981 5,660,409 5,768,080 5,798,454 3.3 0.8 5,731,919 5,520,904 3.8
Assets 6,206,753 6,020,574 6,021,385 6,129,241 6,163,497 3.1 0.7 6,094,659 5,896,931 3.4
Deposits 5,452,082 5,280,252 5,297,567 5,417,514 5,461,583 3.3 (0.2) 5,361,893 5,188,812 3.3
FHLB advances 20,108 52,391 50,000 50,000 50,000 (61.6) (59.8) 43,068 70,298 (38.7)
Subordinated debt & TRUPS 104,752 74,363 74,102 73,840 73,578 40.9 42.4 81,828 72,907 12.2
Stockholders' equity 584,209 571,247 558,952 547,443 538,184 2.3 8.6 565,579 525,742 7.6
CREDIT QUALITY DATA
Net charge-offs $3,619 $1,825 $649 $554 $1,333 98.3 % 171.5 % $6,647 $4,072 63.2 %
Nonaccrual loans $39,960 $24,378 $16,782 $15,402 $21,008 63.9 % 90.2 %
Loans 90 days past due and still accruing 255 153 215 894 294 66.7 (13.3)
Other real estate owned and repossessed property 2,992 3,552 2,636 2,608 3,494 (15.8) (14.4)
Total nonperforming assets $43,207 $28,083 $19,633 $18,904 $24,796 53.9 74.2
Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited) - Continued
Q4 2025 vs. Q4 2025 vs.
Year Ended December 31,
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2025 Q4 2024 2025 2024 2025 vs. 2024
CAPITAL AND CREDIT QUALITY RATIOS
Period-end equity to assets - GAAP 9.42 % 9.19 % 9.36 % 8.94 % 8.68 % 23 bp 74 bp
Period-end tangible equity to tangible assets - non-GAAP(1) 8.06 7.80 7.88 7.46 7.17 26 89
Annualized net charge-offs to average loans 0.29 % 0.15 % 0.05 % 0.05 % 0.11 % 14 bp 18 bp 0.14 % 0.09 % 5 bp
Allowance for credit losses as a percent of:
Period-end loans 1.20 % 1.22 % 1.21 % 1.21 % 1.21 % (2) bp (1) bp
Period-end nonaccrual loans 147.24 244.29 348.49 376.85 275.66 (9,705) (12,842)
Period-end nonperforming assets 136.17 212.06 297.88 307.04 233.55 (7,589) (9,738)
As a percent of total loans at period-end:
Nonaccrual loans 0.82 % 0.50 % 0.35 % 0.32 % 0.44 % 32 bp 38 bp
As a percent of total loans, other real estate owned and repossessed property at period-end:
Nonperforming assets 0.88 % 0.57 % 0.41 % 0.40 % 0.52 % 31 bp 36 bp
As a percent of total assets at period-end:
Nonaccrual loans 0.64 % 0.39 % 0.28 % 0.25 % 0.34 % 25 bp 30 bp
Nonperforming assets 0.69 0.45 0.33 0.31 0.40 24 29
____________________________________
(1) See the Reconciliation of GAAP and Non-GAAP Measures
tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited) - Continued
Q4 2025 vs. Q4 2025 vs.
($ in thousands) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2025 Q4 2024
The Company Amounts
Common Equity Tier 1 Capital $510,729 $496,709 $483,947 $470,223 $458,258 2.82 % 11.45 %
Tier 1 Capital 540,897 526,794 513,952 500,149 488,105 2.68 10.82
Total Capital 660,451 627,055 618,793 603,928 591,228 5.33 11.71
Risk-Weighted Assets 4,852,573 4,867,237 4,890,679 4,823,833 4,852,564 (0.30)
The Company Ratios
Common Equity Tier 1 Capital to RWA 10.52 % 10.21 % 9.90 % 9.75 % 9.44 % 31 bp 108 bp
Tier 1 Capital to RWA 11.15 10.82 10.51 10.37 10.06 33 109
Total Capital to RWA 13.61 12.88 12.65 12.52 12.18 73 143
Tier 1 Capital to AA (Leverage) 8.82 8.86 8.65 8.27 8.02 (4) 80
The Bank Amounts
Common Equity Tier 1 Capital $569,183 $559,212 $546,630 $534,824 $521,453 1.78 % 9.15 %
Tier 1 Capital 569,183 559,212 546,630 534,824 521,453 1.78 9.15
Total Capital 629,746 620,034 607,235 594,550 580,706 1.57 8.44
Risk-Weighted Assets 4,844,639 4,864,871 4,888,558 4,821,975 4,851,903 (0.42) (0.15)
The Bank Ratios
Common Equity Tier 1 Capital to RWA 11.75 % 11.49 % 11.18 % 11.09 % 10.75 % 26 bp 100 bp
Tier 1 Capital to RWA 11.75 11.49 11.18 11.09 10.75 26 100
Total Capital to RWA 13.00 12.75 12.42 12.33 11.97 25 103
Tier 1 Capital to AA (Leverage) 9.30 9.41 9.20 8.84 8.58 (11) 72
Shore Bancshares, Inc.
Consolidated Balance Sheets
December 31, 2025 December 31,
2025
compared to compared to
($ in thousands, except per share data) December 31, 2025 September 30, June 30, 2025 March 31, 2025 December 31, 2024 September 30, December 31,
2025 2025 2024
(unaudited) (unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from banks $50,164 $62,289 $54,512 $46,886 $44,008 (19.5) % 14.0 %
Interest-bearing deposits with other banks 305,402 354,224 130,472 342,120 415,843 (13.8) (26.6)
Cash and cash equivalents 355,566 416,513 184,984 389,006 459,851 (14.6) (22.7)
Investment securities:
Available for sale, at fair value 220,358 181,720 187,679 179,148 149,212 21.3 47.7
Held to maturity, net of allowance for credit losses 414,827 433,440 459,246 469,572 481,077 (4.3) (13.8)
Equity securities, at fair value 6,186 6,113 6,010 5,945 5,814 1.2 6.4
Restricted securities, at cost 17,989 20,364 20,412 20,411 20,253 (11.7) (11.2)
Loans held for sale, at fair value 32,540 21,500 34,319 15,717 19,606 51.3 66.0
Loans held for investment 4,900,302 4,882,969 4,827,628 4,777,489 4,771,988 0.4 2.7
Less: allowance for credit losses (58,836) (59,554) (58,483) (58,042) (57,910) (1.2) 1.6
Loans, net 4,841,466 4,823,415 4,769,145 4,719,447 4,714,078 0.4 2.7
Premises and equipment, net 80,168 80,812 81,426 81,692 81,806 (0.8) (2.0)
Goodwill 63,266 63,266 63,266 63,266 63,266
Other intangible assets, net 29,722 31,722 33,761 36,033 38,311 (6.3) (22.4)
Right-of-use assets 10,523 10,896 11,052 11,709 11,385 (3.4) (7.6)
Cash surrender value on life insurance 105,839 105,055 105,860 105,040 104,421 0.7 1.4
Accrued interest receivable 18,551 20,408 19,821 20,555 19,570 (9.1) (5.2)
Deferred income taxes 29,825 30,328 30,972 31,428 31,857 (1.7) (6.4)
Other assets 31,992 32,927 29,921 27,594 30,256 (2.8) 5.7
TOTAL ASSETS $6,258,818 $6,278,479 $6,037,874 $6,176,563 $6,230,763 (0.3) 0.5
Shore Bancshares, Inc.
Consolidated Balance Sheets - Continued
December 31, 2025 December 31,
2025
compared to compared to
($ in thousands, except per share data) December 31, 2025 September 30, June 30, 2025 March 31, 2025 December 31, 2024 September 30, December 31,
2025 2025 2024
(unaudited) (unaudited) (unaudited) (unaudited)
LIABILITIES
Deposits:
Noninterest-bearing $1,587,953 $1,594,212 $1,575,120 $1,565,017 $1,562,815 (0.4) % 1.6 %
Interest-bearing checking 852,585 851,963 763,309 852,480 978,076 0.1 (12.8)
Money market and savings 1,814,928 1,790,001 1,691,438 1,800,529 1,805,884 1.4 0.5
Time deposits 1,267,487 1,281,132 1,273,285 1,242,319 1,181,561 (1.1) 7.3
Brokered deposits 10,911 10,857 10,806 0.5
Total deposits 5,533,864 5,528,165 5,313,958 5,460,345 5,528,336 0.1 0.1
FHLB advances 50,000 50,000 50,000 50,000 (100.0) (100.0)
Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS"), net 30,168 30,085 30,005 29,926 29,847 0.3 1.1
Subordinated debt, net 58,893 44,409 44,236 44,053 43,870 32.6 34.2
Total borrowings 89,061 124,494 124,241 123,979 123,717 (28.5) (28.0)
Lease liabilities 11,027 11,395 11,541 12,183 11,844 (3.2) (6.9)
Other liabilities 34,993 37,218 22,940 27,586 25,800 (6.0) 35.6
TOTAL LIABILITIES 5,668,945 5,701,272 5,472,680 5,624,093 5,689,697 (0.6) (0.4)
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value per share 334 334 334 333 333 0.3
Additional paid-in capital 360,554 359,939 359,063 358,572 358,112 0.2 0.7
Retained earnings 233,578 221,693 211,400 199,898 190,166 5.4 22.8
Accumulated other comprehensive loss (4,593) (4,759) (5,603) (6,333) (7,545) (3.5) (39.1)
TOTAL STOCKHOLDERS' EQUITY 589,873 577,207 565,194 552,470 541,066 2.2 9.0
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,258,818 $6,278,479 $6,037,874 $6,176,563 $6,230,763 (0.3) 0.5
Shares of common stock issued and outstanding 33,413,503 33,421,672 33,374,265 33,374,265 33,332,177 0.0 0.2
Book value per common share $17.65 $17.27 $16.94 $16.55 $16.23 2.2 8.7
Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter and Year
Q4 2025 Q4 2025
vs. vs.
Year Ended December 31,
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2025 Q4 2024 2025 2024 % Change
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
INTEREST INCOME
Interest and fees on loans $72,331 $70,930 $69,695 $67,647 $67,428 2.0 % 7.3 % $280,604 $269,631 4.1 %
Interest and dividends on taxable investment securities 5,010 5,036 5,331 5,001 4,833 (0.5) 3.7 20,378 19,444 4.8
Interest and dividends on tax-exempt investment securities 6 6 6 6 6 24 24
Interest on deposits with other banks 2,810 1,215 1,588 3,409 4,137 131.3 (32.1) 9,022 6,239 44.6
Total interest income 80,157 77,187 76,620 76,063 76,404 3.8 4.9 310,028 295,338 5.0
INTEREST EXPENSE
Interest on deposits 27,289 26,474 27,369 28,070 30,363 3.1 (10.1) 109,203 115,301 (5.3)
Interest on short-term borrowings 246 640 605 598 (61.6) 2,089 2,131 (2.0)
Interest on long-term borrowings 2,181 1,418 1,394 1,366 2,030 53.8 7.4 6,359 7,357 (13.6)
Total interest expense 29,716 28,532 29,368 30,034 32,393 4.1 (8.3) 117,651 124,789 (5.7)
NET INTEREST INCOME 50,441 48,655 47,252 46,029 44,011 3.7 14.6 192,377 170,549 12.8
Provision for credit losses 2,827 2,992 1,528 1,028 780 (5.5) 262.4 8,375 4,738 76.8
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 47,614 45,663 45,724 45,001 43,231 4.3 10.1 184,002 165,811 11.0
NONINTEREST INCOME
Service charges on deposit accounts 1,663 1,599 1,519 1,514 1,606 4.0 3.5 6,295 6,149 2.4
Trust and investment fee income 1,042 898 942 823 857 16.0 21.6 3,705 3,367 10.0
Mortgage banking revenue 1,181 1,278 2,379 1,240 2,026 (7.6) (41.7) 6,078 5,987 1.5
Interchange credits 1,862 1,858 1,788 1,577 1,726 0.2 7.9 7,085 6,741 5.1
Other noninterest income 2,919 2,068 2,690 1,849 2,638 41.2 10.7 9,525 8,903 7.0
Total noninterest income $8,667 $7,701 $9,318 $7,003 $8,853 12.5 (2.1) $32,688 $31,147 4.9
Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter and Year - Continued
Q4 2025 Q4 2025
vs. vs.
Year Ended December 31,
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2025 Q4 2024 2025 2024 % Change
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
NONINTEREST EXPENSE
Salaries and employee benefits $18,582 $18,642 $17,742 $16,440 $17,209 (0.3) % 8.0 % $71,406 $66,579 7.3 %
Occupancy expense 2,461 2,406 2,472 2,538 2,474 2.3 (0.5) 9,877 9,706 1.8
Furniture and equipment expense 792 892 796 853 760 (11.2) 4.2 3,334 3,441 (3.1)
Software and data processing 5,197 5,155 4,819 4,691 4,512 0.8 15.2 19,862 17,508 13.4
Amortization of other intangible assets 2,000 2,039 2,272 2,278 2,298 (1.9) (13.0) 8,589 9,779 (12.2)
Legal and professional fees 1,237 989 1,225 1,613 1,521 25.1 (18.7) 5,064 5,836 (13.2)
FDIC insurance premium expense 845 794 1,023 1,091 1,013 6.4 (16.6) 3,753 4,413 (15.0)
Marketing and advertising 367 315 384 254 291 16.5 26.1 1,320 1,319 0.1
Fraud losses 227 45 83 105 98 404.4 131.6 460 4,998 (90.8)
Other noninterest expense 3,791 3,102 3,594 3,884 3,767 22.2 0.6 14,370 14,675 (2.1)
Total noninterest expense 35,499 34,379 34,410 33,747 33,943 3.3 4.6 138,035 138,254 (0.2)
Income before income taxes 20,782 18,985 20,632 18,257 18,141 9.5 14.6 78,655 58,704 34.0
Income tax expense 4,895 4,637 5,125 4,493 4,859 5.6 0.7 19,149 14,815 29.3
NET INCOME $15,887 $14,348 $15,507 $13,764 $13,282 10.7 19.6 $59,506 $43,889 35.6
Weighted average shares outstanding - basic 33,426,198 33,419,291 33,374,265 33,350,869 33,327,243 - % 0.3 % 33,392,817 33,267,328 0.4 %
Weighted average shares outstanding - diluted 33,446,103 33,435,862 33,388,013 33,375,318 33,363,612 0.0 % 0.2 % 33,407,155 33,285,156 0.4 %
Basic net income per common share $0.48 $0.43 $0.46 $0.41 $0.40 11.6 % 20.0 % $1.78 $1.32 34.8 %
Diluted net income per common share $0.48 $0.43 $0.46 $0.41 $0.40 11.6 % 20.0 % $1.78 $1.32 34.8 %
Dividends paid per common share $0.12 $0.12 $0.12 $0.12 $0.12 - % - % $0.48 $0.48 - %
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited)
Three Months Ended
December 31, 2025
September 30, 2025
December 31, 2024
($ in thousands) Average Balance Interest Yield/ Average Balance Interest Yield/ Average Interest Yield/
Rate Rate Balance Rate
Earning assets
Loans(1), (2), (3)
Commercial real estate $2,624,581 $38,928 5.88 % $2,615,409 $38,077 5.78 % $2,551,903 $36,036 5.62 %
Residential real estate 1,442,055 19,548 5.42 1,407,076 19,711 5.60 1,358,066 18,142 5.34
Construction 343,796 5,740 6.62 347,574 5,848 6.68 336,094 5,304 6.28
Commercial 219,874 4,337 7.83 219,002 3,380 6.12 229,676 3,792 6.57
Consumer 274,715 3,726 5.38 289,729 3,877 5.31 313,686 4,080 5.17
Credit cards 4,598 142 12.25 5,213 118 8.98 6,820 154 8.98
Total loans 4,909,619 72,421 5.85 4,884,003 71,011 5.77 4,796,245 67,508 5.60
Investment securities
Taxable 652,990 5,010 3.07 663,884 5,036 3.03 654,955 4,833 2.95
Tax-exempt(1) 649 8 4.93 651 8 4.92 655 8 4.89
Interest-bearing deposits 280,558 2,810 3.97 110,443 1,215 4.36 346,599 4,137 4.75
Total earning assets 5,843,816 80,249 5.45 5,658,981 77,270 5.42 5,798,454 76,486 5.25
Cash and due from banks 51,611 49,405 43,444
Other assets 371,205 370,952 380,321
Allowance for credit losses (59,879) (58,764) (58,722)
Total assets $6,206,753 $6,020,574 $6,163,497
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) - Continued
Three Months Ended
December 31, 2025
September 30, 2025
December 31, 2024
($ in thousands) Average Balance Interest Yield/ Average Interest Yield/ Average Interest Yield/
Rate Balance Rate Balance Rate
Interest-bearing liabilities
Interest-bearing checking $768,769 $5,386 2.78 % $689,906 $5,157 2.97 % $901,764 $7,898 3.48 %
Money market and savings deposits 1,784,972 9,373 2.08 1,714,161 9,277 2.15 1,733,934 10,331 2.37
Time deposits 1,277,732 12,425 3.86 1,277,403 11,935 3.71 1,232,480 12,134 3.92
Brokered deposits 10,942 105 3.81 10,891 105 3.82
Interest-bearing deposits(4) 3,842,415 27,289 2.82 3,692,361 26,474 2.84 3,868,178 30,363 3.12
FHLB advances 20,108 246 4.85 52,391 640 4.85 50,000 618 4.92
Subordinated debt and guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS")(4) 104,752 2,181 8.26 74,363 1,418 7.57 73,578 1,412 7.63
Total interest-bearing liabilities 3,967,275 29,716 2.97 3,819,115 28,532 2.96 3,991,756 32,393 3.23
Noninterest-bearing deposits 1,609,667 1,587,891 1,593,405
Accrued expenses and other liabilities 45,602 42,321 40,152
Stockholders' equity 584,209 571,247 538,184
Total liabilities and stockholders' equity $6,206,753 $6,020,574 $6,163,497
Net interest spread 2.48 % 2.46 % 2.02 %
Net interest margin 3.43 3.42 3.03
Net interest margin excluding accretion(3) 3.24 3.22 2.85
Cost of funds 2.11 2.09 2.31
Cost of deposits 1.99 1.99 2.21
Cost of debt 7.71 6.44 6.54
____________________________________
(1)
All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of nondeductible interest expense.
(2)
Average loan balances include nonaccrual loans.
(3) Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $4.1 million, $3.3 million and $3.2 million of accretion
interest on loans for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $1.2 million, $280 thousand and $412 thousand of amortization of deposit
discounts and $171 thousand, $232 thousand and $232 thousand of amortization of borrowing fair value adjustments for the three months ended December 31, 2025, September 30, 2025 and December 31, 2024, respectively.
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) - Continued
Year Ended December 31,
2025 2024
($ in thousands) Average Balance Interest Yield/ Average Balance Interest Yield/
Rate Rate
Earning assets
Loans(1), (2), (3)
Commercial real estate $2,588,913 $150,171 5.80 % $2,528,961 $144,155 5.70 %
Residential real estate 1,394,073 76,708 5.50 1,318,500 72,636 5.51
Construction 349,097 22,809 6.53 322,978 19,917 6.17
Commercial 223,949 15,081 6.73 220,699 15,625 7.08
Consumer 291,789 15,697 5.38 324,633 16,923 5.21
Credit cards 5,648 467 8.27 7,444 694 9.32
Total loans 4,853,469 280,933 5.79 4,723,215 269,950 5.72
Investment securities
Taxable 665,940 20,378 3.06 667,622 19,444 2.91
Tax-exempt(1) 651 30 4.61 657 30 4.57
Interest-bearing deposits 211,859 9,022 4.26 129,410 6,239 4.82
Total earning assets 5,731,919 310,363 5.41 5,520,904 295,663 5.36
Cash and due from banks 48,725 46,264
Other assets 372,846 387,852
Allowance for credit losses (58,831) (58,089)
Total assets $6,094,659 $5,896,931
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) - Continued
Year Ended December 31,
2025 2024
($ in thousands) Average Balance Interest Yield/ Average Balance Interest Yield/
Rate Rate
Interest-bearing liabilities
Interest-bearing checking $759,395 $23,265 3.06 % $825,773 $25,523 3.09 %
Money market and savings deposits 1,761,503 38,245 2.17 1,690,905 41,202 2.44
Time deposits 1,255,797 47,391 3.77 1,205,411 48,566 4.03
Brokered deposits 7,927 302 3.81 12,636 10 0.08
Interest-bearing deposits(4) 3,784,622 109,203 2.89 3,734,725 115,301 3.09
FHLB advances 43,068 2,089 4.85 70,298 3,720 5.29
Subordinated debt and Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS")(4) 81,828 6,359 7.77 72,907 5,768 7.91
Total interest-bearing liabilities 3,909,518 117,651 3.01 3,877,930 124,789 3.22
Noninterest-bearing deposits 1,577,271 1,454,087
Accrued expenses and other liabilities 42,291 39,172
Stockholders' equity 565,579 525,742
Total liabilities and stockholders' equity $6,094,659 $5,896,931
Net interest spread 2.40 % 2.14 %
Net interest margin 3.36 3.10
Net interest margin excluding accretion(3) 3.15 2.83
Cost of funds 2.14 2.34
Cost of deposits 2.04 2.22
Cost of debt 6.76 6.63
____________________________________
(1)
All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of nondeductible interest expense.
(2)
Average loan balances include nonaccrual loans.
(3) Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $15.4 million and $16.9 million of accretion interest on loans
for the year ended December 31, 2025 and 2024, respectively.
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $2.2 million and $1.5 million of amortization of deposit discounts and $865
thousand and $926 thousand of amortization of borrowing fair value adjustments for the year ended December 31, 2025 and 2024, respectively.
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited)
Quarter to Date
Year to Date
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 12/31/2025 12/31/2024
The following reconciles return on average assets, average equity and return on average tangible common equity(1):
Net income $15,887 $14,348 $15,507 $13,764 $13,282 $59,506 $43,889
Annualized net income (A) $63,030 $56,924 $62,198 $55,821 $52,839 $59,506 $43,889
Net income $15,887 $14,348 $15,507 $13,764 $13,282 $59,506 $43,889
Add: amortization of other intangible assets, net of tax 1,529 1,541 1,708 1,717 1,683 6,498 7,311
Net income excluding amortization of other intangible assets - non-GAAP 17,416 15,889 17,215 15,481 14,965 66,004 51,200
Annualized net income excluding amortization of other intangible assets - non-GAAP (B) $69,096 $63,038 $69,049 $62,784 $59,535 $66,004 $51,200
Net income $15,887 $14,348 $15,507 $13,764 $13,282 $59,506 $43,889
Add: amortization of other intangible assets, net of tax 1,529 1,541 1,708 1,717 1,683 6,498 7,311
Add: credit card fraud losses, net of tax 3,484
Less: sale and fair value of held for sale assets, net of tax (329) (336)
Adjusted net income - non-GAAP 17,416 15,889 17,215 15,481 14,636 66,004 54,348
Annualized adjusted net income - non-GAAP (C) $69,096 $63,038 $69,049 $62,784 $58,226 $66,004 $54,348
Net income $15,887 $14,348 $15,507 $13,764 $13,282 $59,506 $43,889
Less: income tax expense 4,895 4,637 5,125 4,493 4,859 19,149 14,815
Less: provision for credit losses 2,827 2,992 1,528 1,028 780 8,375 4,738
Pre-tax pre-provision net income - non GAAP $23,609 $21,977 $22,160 $19,285 $18,921 $87,030 $63,442
Return on average assets - GAAP 1.02 % 0.95 % 1.03 % 0.91 % 0.86 % 0.98 % 0.74 %
Adjusted return on average assets - non-GAAP 1.11 % 1.05 % 1.15 % 1.02 % 0.94 % 1.08 % 0.92 %
Average assets $6,206,753 $6,020,574 $6,021,385 $6,129,241 $6,163,497 $6,094,659 $5,896,931
Average stockholders' equity (D) $584,209 $571,247 $558,952 $547,443 $538,184 $565,579 $525,742
Less: average goodwill and core deposit intangible (94,059) (96,074) (98,241) (100,514) (102,794) (97,201) (106,409)
Average tangible common equity (E) $490,150 $475,173 $460,711 $446,929 $435,390 $468,378 $419,333
Return on average common equity - GAAP (A)/(D) 10.79 % 9.96 % 11.13 % 10.20 % 9.82 % 10.52 % 8.35 %
Return on average tangible common equity - non-GAAP (B)/(E) 14.10 % 13.27 % 14.99 % 14.05 % 13.67 % 14.09 % 12.21 %
Adjusted return on average tangible common equity - non-GAAP (C)/(E) 14.10 % 13.27 % 14.99 % 14.05 % 13.37 % 14.09 % 12.96 %
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
Quarter to Date
Year to Date
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 12/31/2025 12/31/2024
The following reconciles GAAP efficiency ratio and non-GAAP efficiency ratio(2):
Noninterest expense (F) $35,499 $34,379 $34,410 $33,747 $33,943 $138,035 $138,254
Less: amortization of other intangible assets (2,000) (2,039) (2,272) (2,278) (2,298) (8,589) (9,779)
Less: credit card fraud losses (4,660)
Adjusted noninterest expense (G) $33,499 $32,340 $32,138 $31,469 $31,645 $129,446 $123,815
Net interest income (H) $50,441 $48,655 $47,252 $46,029 $44,011 $192,377 $170,549
Add: taxable-equivalent adjustment 92 83 81 81 82 335 325
Taxable-equivalent net interest income (I) $50,533 $48,738 $47,333 $46,110 $44,093 $192,712 $170,874
Noninterest income (J) $8,667 $7,701 $9,318 $7,003 $8,853 $32,688 $31,147
Less: Sale and fair value of held for sale assets (450) (450)
Adjusted noninterest income (K) $8,667 $7,701 $9,318 $7,003 $8,403 $32,688 $30,697
Efficiency ratio - GAAP (F)/(H)+(J) 60.06 % 61.00 % 60.83 % 63.64 % 64.21 % 61.33 % 68.55 %
Adjusted efficiency ratio - non-GAAP (G)/(I)+(K) 56.59 % 57.30 % 56.73 % 59.25 % 60.28 % 57.43 % 61.43 %
Net operating expense to average assets - GAAP 1.72 % 1.76 % 1.67 % 1.77 % 1.62 % 1.73 % 1.82 %
Adjusted net operating expense to average assets - non-GAAP 1.59 % 1.62 % 1.52 % 1.62 % 1.50 % 1.59 % 1.58 %
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
($ in thousands, except per share data) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024
The following reconciles book value per common share and tangible book value per common share(1):
Stockholders' equity (L) $589,873 $577,207 $565,194 $552,470 $541,066
Less: goodwill and core deposit intangible (92,988) (94,988) (97,027) (99,299) (101,577)
Tangible common equity (M) $496,885 $482,219 $468,167 $453,171 $439,489
Shares of common stock outstanding (N) 33,413,503 33,421,672 33,374,265 33,374,265 33,332,177
Book value per common share - GAAP (L)/(N) $17.65 $17.27 $16.94 $16.55 $16.23
Tangible book value per common share - non-GAAP (M)/(N) $14.87 $14.43 $14.03 $13.58 $13.19
The following reconciles equity to assets and tangible common equity to tangible assets(1):
Stockholders' equity (O) $589,873 $577,207 $565,194 $552,470 $541,066
Less: goodwill and core deposit intangible (92,988) (94,988) (97,027) (99,299) (101,577)
Tangible common equity (P) $496,885 $482,219 $468,167 $453,171 $439,489
Assets (Q) $6,258,818 $6,278,479 $6,037,874 $6,176,563 $6,230,763
Less: goodwill and core deposit intangible (92,988) (94,988) (97,027) (99,299) (101,577)
Tangible assets (R) $6,165,830 $6,183,491 $5,940,847 $6,077,264 $6,129,186
Period-end equity to assets - GAAP (O)/(Q) 9.42 % 9.19 % 9.36 % 8.94 % 8.68 %
Period-end tangible common equity to tangible assets - non-GAAP (P)/(R) 8.06 % 7.80 % 7.88 % 7.46 % 7.17 %
____________________________________
(1) Management believes that reporting tangible common equity and tangible assets more closely approximates the adequacy of
capital for regulatory purposes.
(2) Management believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling
cash-based operating activities.
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
Regulatory Capital and Ratios for the Company
($ in thousands) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024
Common equity $589,873 $577,207 $565,194 $552,470 $541,066
Goodwill(1) (61,123) (61,176) (61,238) (61,300) (61,362)
Core deposit intangible(2) (22,566) (24,041) (25,573) (27,280) (28,991)
DTAs that arise from net operating loss and tax credit carryforwards (48) (40) (39)
Accumulated other comprehensive loss 4,593 4,759 5,603 6,333 7,545
Common Equity Tier 1 Capital 510,729 496,709 483,947 470,223 458,258
TRUPS 30,168 30,085 30,005 29,926 29,847
Tier 1 Capital 540,897 526,794 513,952 500,149 488,105
Allowable reserve for credit losses and other Tier 2 adjustments 60,661 60,852 60,605 59,726 59,253
Subordinated debt 58,893 39,409 44,236 44,053 43,870
Total Capital $660,451 $627,055 $618,793 $603,928 $591,228
Risk-Weighted Assets ("RWA") $4,852,573 $4,867,237 $4,890,679 $4,823,833 $4,852,564
Average Assets ("AA") 6,129,306 5,942,911 5,943,124 6,050,310 6,083,760
Common Equity Tier 1 Capital to RWA 10.52 % 10.21 % 9.90 % 9.75 % 9.44 %
Tier 1 Capital to RWA 11.15 10.82 10.51 10.37 10.06
Total Capital to RWA 13.61 12.88 12.65 12.52 12.18
Tier 1 Capital to AA (Leverage) 8.82 8.86 8.65 8.27 8.02
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
Regulatory Capital and Ratios for the Bank
($ in thousands) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024
Common equity $648,279 $639,670 $627,838 $617,071 $604,261
Goodwill(1) (61,123) (61,176) (61,238) (61,300) (61,362)
Core deposit intangible(2) (22,566) (24,041) (25,573) (27,280) (28,991)
Accumulated other comprehensive loss 4,593 4,759 5,603 6,333 7,545
Common Equity Tier 1 Capital 569,183 559,212 546,630 534,824 521,453
Tier 1 Capital 569,183 559,212 546,630 534,824 521,453
Allowable reserve for credit losses and other Tier 2 adjustments 60,563 60,822 60,605 59,726 59,253
Total Capital $629,746 $620,034 $607,235 $594,550 $580,706
Risk-Weighted Assets ("RWA") $4,844,639 $4,864,871 $4,888,558 $4,821,975 $4,851,903
Average Assets ("AA") 6,122,775 5,939,890 5,940,411 6,050,130 6,077,540
___________________________________
(1) Goodwill is net of deferred tax liability.
(2) Core deposit intangible is net of deferred
tax liability.
Shore Bancshares, Inc.
Summary of Loan Portfolio (Unaudited)
Portfolio loans are summarized by loan type as follows:
($ in thousands) December 31, 2025 % of Total September 30, % of Total June 30, 2025 % of Total March 31, % of Total December 31, % of Total
Loans 2025 Loans Loans 2025 Loans 2024 Loans
Commercial real estate $2,643,996 53.95 % $2,642,601 54.12 % $2,603,974 53.95 % $2,544,107 53.25 % $2,557,806 53.60 %
Residential real estate 1,414,964 28.88 1,383,348 28.33 1,349,010 27.94 1,325,858 27.75 1,329,406 27.85
Construction 344,903 7.04 352,116 7.21 350,053 7.25 366,218 7.67 335,999 7.04
Commercial 226,006 4.61 221,598 4.54 224,092 4.64 234,499 4.91 237,932 4.99
Consumer 265,912 5.43 278,242 5.70 294,239 6.09 300,007 6.28 303,746 6.37
Credit cards 4,521 0.09 5,064 0.10 6,260 0.13 6,800 0.14 7,099 0.15
Total loans 4,900,302 100.00 % 4,882,969 100.00 % 4,827,628 100.00 % 4,777,489 100.00 % 4,771,988 100.00 %
Less: allowance for credit losses (58,836) (59,554) (58,483) (58,042) (57,910)
Total loans, net $4,841,466 $4,823,415 $4,769,145 $4,719,447 $4,714,078
Shore Bancshares, Inc.
Classified Assets and Nonperforming Assets (Unaudited)
Classified assets and nonperforming assets are summarized as follows:
($ in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024
Classified loans
Substandard $57,366 $48,470 $19,930 $19,434 $24,679
Total classified loans 57,366 48,470 19,930 19,434 24,679
Special mention loans 73,401 70,997 65,564 33,456 33,519
Total classified and special mention loans $130,767 $119,467 $85,494 $52,890 $58,198
Classified loans $57,366 $48,470 $19,930 $19,434 $24,679
Other real estate owned 113 120 179 179 179
Repossessed assets 2,879 3,432 2,457 2,429 3,315
Total classified assets $60,358 $52,022 $22,566 $22,042 $28,173
Classified assets to total assets 0.96 % 0.83 % 0.37 % 0.36 % 0.45 %
Nonaccrual loans $39,960 $24,378 $16,782 $15,402 $21,008
90+ days delinquent accruing 255 153 215 894 294
Other real estate owned ("OREO") 113 120 179 179 179
Repossessed property 2,879 3,432 2,457 2,429 3,315
Total nonperforming assets $43,207 $28,083 $19,633 $18,904 $24,796
Accruing borrowers experiencing financial difficulty loans ("BEFD") 5,311 6,704 6,709 1,356 1,662
Total nonperforming assets and BEFDs modifications $48,518 $34,787 $26,342 $20,260 $26,458
Nonperforming assets to total assets 0.69 % 0.45 % 0.33 % 0.31 % 0.40 %
Total assets $6,258,818 $6,278,479 $6,037,874 $6,176,563 $6,230,763
View original content to download multimedia:https://www.prnewswire.com/news-releases/shore-bancshares-inc-reports-2025-fourth-quarter-and-annual-results-302673086.html
SOURCE Shore Bancshares, Inc.
https://rt.newswire.ca/rt.gif?NewsItemId=PH73312&Transmission_Id=202601281600PR_NEWS_USPR_____PH73312&DateId=20260128
COMTEX_472526593/1005/2026-01-28T16:00:17