0001035092false00010350922025-01-302025-01-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 30, 2025
Shore_Bancshares_Logo.jpg
SHORE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Maryland000-2234552-1974638
(State or other jurisdiction of incorporation or organization)(Commission file number)(IRS Employer Identification No.)
18 E. Dover St., Easton, Maryland 21601
(Address of principal executive offices) (Zip Code)
(410) 763-7800
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common stock, $0.01 par value per shareSHBIThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02. Result of Operation and Financial Condition.
On January 30, 2025, Shore Bancshares, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition for the year ended December 31, 2024. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.
The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits.
The exhibits that are filed or furnished with this report are listed in the Exhibit Index that immediately follows the signatures hereto, which list is incorporated herein by reference.
2

EXHIBIT INDEX
Exhibit Number
Description
104
Cover Page Interactive Data File (embedded within the inline XBRL document)
3

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SHORE BANCSHARES, INC.
Dated: January 30, 2025
By:/s/ James M. Burke
James M. Burke
President and Chief Executive Officer
4

shore_bancsharesxlogo.jpg
18 E. Dover Street
Easton, Maryland 21601
Phone (410) 763-7800
PRESS RELEASE
Shore Bancshares, Inc. Reports 2024 Fourth Quarter and Annual Results
Easton, Maryland (January 30, 2025) - 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 2024 of $13.3 million, or $0.40 per diluted common share, compared to net income of $11.2 million, or $0.34 per diluted common share, for the third quarter of 2024, and net income of $10.5 million, or $0.31 per diluted common share, for the fourth quarter of 2023. Net income for the fiscal year of 2024 was $43.9 million, or $1.32 per diluted common share, compared to net income for the fiscal year of 2023 of $11.2 million, or $0.42 per diluted common share.
Fourth Quarter and Full-Year 2024 Highlights
■Improving Return on Average Assets (“ROAA”) - The Company reported ROAA of 0.86% for the fourth quarter of 2024, compared to 0.77% for the third quarter of 2024 and 0.72% for the fourth quarter of 2023. Non–U.S. generally accepted accounting principles (“GAAP”) ROAA(1) was 0.94% for the fourth quarter of 2024, compared to 0.90% for the third quarter of 2024 and 0.88% for the fourth quarter of 2023.
■Increased Net Income - Net income for the fourth quarter of 2024 increased $2.1 million to $13.3 million from $11.2 million in the third quarter of 2024. Net income increased due to higher net interest income, a lower provision for loan losses, and higher noninterest income driven by higher mortgage servicing valuations and increased income from the sale of assets held for sale. Net income for the fiscal year of 2024 increased $32.7 million to $43.9 million from $11.2 million for the fiscal year of 2023.
■Net Interest Income (“NII”) and Net Interest Margin (“NIM”) - NII for the fourth quarter of 2024 increased $748 thousand to $44.0 million from $43.3 million for the third quarter of 2024. NII increased due to a $363.1 million increase in average interest-earning assets, funded by a seasonal increase in municipal deposits. NIM decreased 14 basis points (“bps”) to 3.03% during the fourth quarter of 2024 from 3.17% in the third quarter of 2024, due to less net accretion interest income. NIM, excluding net accretion interest (“core NIM”), increased to 2.85% in the fourth quarter of 2024 from 2.84% in the third quarter of 2024 as loan yields and deposit costs declined at similar rates during the quarter.
■Improved Funding Costs - Fourth quarter funding costs declined by 7 bps from the third quarter of 2024 supported by stable noninterest-bearing deposits and continued active management of deposit relationships, which resulted in a 15 bps decline in the cost of interest-bearing deposits. The decrease was partially offset by seasonal increase of approximately $300 million of higher cost time and municipal deposits.
■Asset Quality - Nonperforming assets to total assets were 0.40% for the fourth quarter of 2024, compared to 0.27% for the third quarter of 2024 and 0.23% for the fourth quarter of 2023. Classified assets to total assets were 0.45% in the fourth quarter of 2024, compared to 0.39% for the third quarter of 2024 and increased compared to 0.25% for the fourth quarter of 2023. The allowance for credit losses (“ACL”) was $57.9 million at December 31, 2024 compared to $58.7 million at September 30, 2024. The ACL as a percentage of loans decreased to 1.21% for the fourth quarter of 2024, compared to 1.24% for the third quarter of 2024.
■Improved Operating Leverage - The efficiency ratio for the fourth quarter of 2024 was 64.21% when compared to 67.49% in the third quarter of 2024 and 68.61% for the fourth quarter of 2023. The non-GAAP efficiency ratio(1) for the fourth quarter of 2024 was 60.28%, compared to 62.10% for the third quarter of 2024 and 61.99% for the fourth quarter of 2023.
“Increasing net interest income, lower credit provisions and higher noninterest income supported net income growth in the fourth quarter,” stated James (“Jimmy”) M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. “Funding costs decreased due to stable noninterest-bearing deposits and lower rates on interest-bearing deposits. Although we saw a $300 million increase in higher cost seasonal municipal deposits, core NIM increased one bp to 2.85% during the fourth quarter. Overall credit in our loan portfolios remains stable and economic activity in our markets is strong. We continue to focus on controlling expenses to enhance operating leverage and improve our operating efficiency.”
(1) See the Reconciliation of GAAP and non-GAAP Measures tables.
1

Balance Sheet Review
Total assets were $6.23 billion at December 31, 2024, an increase of $219.8 million, or 3.66%, when compared to $6.01 billion at December 31, 2023. The aggregate increase was primarily due to increases in loans held for investment of $131.0 million, cash and cash equivalents of $87.4 million and investment securities available for sale of $38.7 million, partially offset by a decrease in investments held to maturity of $32.1 million. The ratio of the ACL to total loans decreased to 1.21% at December 31, 2024, compared to 1.24% at December 31, 2023.
The Company’s tangible common equity ratio at December 31, 2024 was 7.17%, compared to 6.78% at December 31, 2023. The Company’s Tier 1 and Total Risk-Based Capital Ratios at December 31, 2024 were 10.06% and 12.18%, respectively. The Bank’s Tier 1 and Total Risk-Based Capital Ratios at December 31, 2024 were 10.75% and 11.97%, respectively. Non-owner occupied commercial real estate (“CRE”) loans as a percentage of the Bank’s Tier 1 Capital + ACL at December 31, 2024 and December 31, 2023 were $2.08 billion or 359.52%, and $2.02 billion or 382.57%, respectively. Non owner-occupied construction loans as a percentage of the Bank’s Tier 1 Capital + ACL at December 31, 2024 and December 31, 2023 were $336.0 million or 57.99%, and $299.0 million or 56.68%, respectively.
CRE loans at December 31, 2024 were $2.56 billion compared to $2.54 billion at December 31, 2023. The following table provides stratification of the classes of CRE loans at December 31, 2024.
December 31, 2024
Owner OccupiedNon-Owner Occupied
 ($ in thousands)
Average LTV(1)
Average Loan Size
Loan Balance(2)
Average LTV (1)
Average Loan Size
Loan Balance(2)
Office, medical45.20 %$604 $32,617 52.07 %$1,894 $106,040 
Office, govt. or govt. contractor51.80 642 5,133 57.09 2,934 49,872 
Office, other49.28 492 97,403 48.71 1,279 214,915 
Office, total48.54 520 135,153 49.30 1,010 370,827 
Retail50.35 601 63,696 49.38 2,391 447,038 
Multi-family (5+ units)— — — 54.93 2,248 265,278 
Motel/hotel— — — 43.85 4,161 212,216 
Industrial/warehouse48.43 650 100,731 49.03 1,454 200,623 
Commercial-improved42.16 967 163,405 48.58 1,338 179,254 
Marine/boat slips31.40 1,967 59,005 40.05 2,235 15,643 
Restaurant49.06 1,024 58,347 48.26 1,034 47,553 
Church34.98 886 64,661 13.56 2,421 2,421 
Land/lot loans53.74 913 913 49.95 274 94,245 
Other39.80 1,089 81,655 62.90 590 247,857 
Total CRE loans, gross(3)
44.39 786 $727,566 51.55 1,235 $2,082,955 
(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.
(3)CRE loans include land and construction.
The Bank’s office CRE loan portfolio, which includes owner occupied and non-owner occupied CRE loans, was $506.0 million, or     10.60% of total loans of $4.77 billion, at December 31, 2024. The Bank’s office CRE loan portfolio included medical tenants of $138.7 million, or 27.40% of the total office CRE loan portfolio, at December 31, 2024. The Bank’s office CRE loan portfolio also included government or government contractor tenants of $55.0 million, or 10.87% of the total office CRE loan portfolio, at December 31, 2024.
There were 501 loans in the office CRE portfolio with an average and median loan size of $1.0 million and $375 thousand, respectively. LTV estimates for the office CRE portfolio at December 31, 2024 are summarized below and LTV collateral values are based on the most recent appraisal, which may vary from the appraised value at loan origination.
2

LTV Range ($ in thousands)
Loan Count Loan Balance % of Total CRE
Less than or equal to 50%246$182,284 36.00 %
50%-60%78114,723 22.70 
60%-70%91119,089 23.50 
70%-80%7480,224 15.90 
Greater than 80%129,660 1.90 
Grand Total501$505,980 100.00 %
The Bank had 18 office CRE loans totaling $164.5 million with balances greater than $5.0 million at December 31, 2024, compared to 24 office CRE loans totaling $189.8 million at December 31, 2023. The decrease in this portfolio segment was the result of normal amortization and one loan payoff totaling $10.4 million, and adjustments totaling $13.9 million to exclude non-bank-owned participation balances. At December 31, 2024, the average loan debt-service coverage ratio was 1.9x and the average LTV was 49.30%. Of the office CRE portfolio balance, 74.88% was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 97.05% was secured by properties with five stories or less. Of the office CRE loans, $2.3 million were classified as special mention or substandard at December 31, 2024. The Bank did not have any charge-offs related to the office CRE portfolio during 2024.
At December 31, 2024 and September 30, 2024, nonperforming assets were $24.8 million, or 0.40% of total assets and $15.8 million, or 0.27% of total assets, respectively. The balance of nonperforming assets increased $9.0 million, primarily due to a commercial real estate nonaccrual loan and an increase in repossessed marine assets of $3.0 million. When comparing December 31, 2024 to December 31, 2023, nonperforming assets increased $11.1 million, primarily due to an increase in nonaccrual loans of $8.2 million and an increase in repossessed marine loans of $3.3 million, almost entirely impacted by the merger with The Community Financial Corporation (“TCFC”) in the third quarter of 2023.
Total deposits increased $142.2 million, or 2.64%, to $5.53 billion at December 31, 2024 when compared to December 31, 2023. The increase in total deposits was primarily due to increases in noninterest-bearing deposits of $304.8 million and money market and savings deposits of $28.0 million. These increases were partially offset by decreases in interest-bearing checking deposits of $187.5 million and time deposits of $3.0 million. The increase in noninterest-bearing and overall deposits was due to the Bank’s focus on customer acquisition and retention with superior customer service. During the second quarter of 2024, the Company reclassified $399.4 million of demand deposits, which carried an average rate of 4 bps, to noninterest-bearing deposits.
Total funding, which includes customer deposits, Federal Home Loan Bank (“FHLB”) advances and brokered deposits was $5.58 billion at December 31, 2024, compared to $5.28 billion at September 30, 2024 and $5.39 billion at December 31, 2023. The Bank had a $50.0 million FHLB advance at December 31, 2024 and at September 30, 2024, compared to zero at December 31, 2023. The advance consisted of an 18-month Bermuda Convertible note of $50.0 million. The Bank had zero brokered deposits at December 31, 2024 and at September 30, 2024, compared to $19.4 million at December 31, 2023. Total reciprocal deposits were $1.65 billion at December 31, 2024 and $1.29 billion at September 30, 2024 and at December 31, 2023. 
The Bank’s uninsured deposits were $905.3 million, or 16.38% of total deposits, at December 31, 2024. The Bank’s uninsured deposits, excluding deposits secured with pledged collateral, were $745.1 million, or 13.48% for same period. At December 31, 2024, the Bank had approximately $1.47 billion of available liquidity, including $459.9 million in cash and cash equivalents, $1.01 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 $29.9 million, or 5.86%, when compared to December 31, 2023, primarily due to current year earnings, offset by cash dividends paid. As of December 31, 2024, the ratio of total equity to total assets was 8.68% and the ratio of total tangible equity to total tangible assets(1) was 7.17%, compared to 8.50% and 6.78%, respectively, at December 31, 2023.

(1) See the Reconciliation of GAAP and non-GAAP Measures tables.
3

Review of Quarterly Financial Results
Net interest income was $44.0 million for the fourth quarter of 2024, compared to $43.3 million for the third quarter of 2024 and $41.5 million for the fourth quarter of 2023. The increase in net interest income when compared to the third quarter of 2024 was primarily due to the increase in interest income of $1.7 million, partially offset by an increase in interest expense of $967 thousand. The increase in net interest income of $2.5 million, when compared to the fourth quarter of 2023, was primarily due to increase in interest and fees on loans of $1.5 million and an increase in interest on deposits at other institutions of $2.9 million, partially offset by higher interest expense on deposits and long-term borrowings of $2.8 million.
The Company’s net interest margin decreased to 3.03% for the fourth quarter of 2024 from 3.17% for the third quarter of 2024, primarily due to less net accretion interest income. Core NIM increased for the comparable periods from 2.84% to 2.85%. Excluding accretion interest, loan yields and funding costs decreased similarly at seven bps and nine bps, respectively, for the comparable periods. Interest expense for the fourth quarter of 2024 increased $967 thousand when compared to the third quarter of 2024. Money market and demand deposits repriced at favorable rates, and was partially offset by a large increase in seasonal higher rate municipal interest-bearing deposits. The Company’s net interest margin decreased to 3.03% for the fourth quarter of 2024 from 3.09% for the fourth quarter of 2023. Comparing the fourth quarter of 2024 to the fourth quarter of 2023, the Company’s interest-earning asset yields decreased 4 bps to 5.25% from 5.29%, while the cost of funds increased 6 bps to 2.31% from 2.25% for the same periods.
The provision for credit losses was $780 thousand for the three months ended December 31, 2024. The comparable amounts were $1.5 million for the three months ended September 30, 2024 and $896 thousand for the three months ended December 31, 2023. The decrease in the provision for credit losses for the fourth quarter of 2024 compared to the third quarter of 2024 was due to an improved economic outlook, partially offset by loan growth in the fourth quarter of 2024. Coverage ratios decreased to 1.21% at December 31, 2024, from 1.24% at September 30, 2024 and at December 31, 2023. Net charge-offs remained flat at $1.3 million for the fourth quarter of 2024 compared to the third quarter of 2024, and were $500 thousand for the fourth quarter of 2023.
Total noninterest income for the fourth quarter of 2024 was $8.9 million, an increase of $1.6 million from $7.3 million for the third quarter of 2024, and an increase of $1.3 million from $7.5 million for the fourth quarter of 2023. When comparing the fourth quarter of 2024 to the third quarter of 2024, the increase in noninterest income was primarily due to an increase in mortgage banking revenue of $849 thousand, driven by increased mortgage servicing activity and lower prepayment rates, and higher other noninterest income of $703 thousand resulting from the gain on sale of other assets held for sale. When comparing the fourth quarter of 2024 to the fourth quarter of 2023, the increase in noninterest income was primarily due to an increase in mortgage banking revenue of $921 thousand, driven by increased mortgage servicing activity and lower prepayment rates, and higher other noninterest income of $271 thousand resulting from the gain on sale of other assets held for sale.
Total noninterest expense of $33.9 million for the fourth quarter of 2024 decreased $171 thousand compared to the third quarter of 2024 expense of $34.1 million, and increased $273 thousand compared to the fourth quarter of 2023 expense of $33.7 million. The decrease from the third quarter of 2024 was primarily due to the absence of the one-time data processing costs related to the fraud incident in the first quarter of 2024 and other fraud expenses incurred in the third quarter of 2024, partially offset by higher salaries and employee benefits for year end bonus accruals and an increase in occupancy related expenses. The increase from the fourth quarter of 2023 was primarily due to higher salaries and employee benefits and occupancy related expenses, partially offset by lower FDIC fees and amortization of intangible assets.
The efficiency ratio for the fourth quarter of 2024 when compared to the third quarter of 2024 and the fourth quarter of 2023 was 64.21%, 67.49% and 68.61%, respectively. Non-GAAP efficiency ratios(1) for the same periods were 60.28%, 62.10% and 61.99%, respectively. The net operating expense ratio, which is noninterest expense less noninterest income divided by average assets, for the fourth quarter of 2024 was 1.62%, compared to 1.84% and 1.80% for the third quarter of 2024 and the fourth quarter of 2023, respectively. The non-GAAP net operating expense ratio(1), which excludes core deposit intangible amortization and non-recurring activity, was 1.50% for the fourth quarter of 2024, compared to 1.65% and 1.58% for the third quarter of 2024 and the fourth quarter of 2023, respectively.
(1) See the Reconciliation of GAAP and non-GAAP Measures tables.
4

Review of Full-Year Financial Results
The Company merged with TCFC and its wholly-owned subsidiary Community Bank of the Chesapeake on July 1, 2023 (the “merger”). The merger added $2.4 billion in assets, $454.5 million in investments, $1.8 billion in loans, $2.0 billion in deposits, $150.6 million in brokered deposits, $69.0 million in FHLB advances and $32.0 million in subordinated debt and trust preferred debentures. The larger footprint has accelerated growth in income and has expanded the cost base. Fiscal year 2024 has the full impact of the newly combined company.
Net interest income for the year ended December 31, 2024 was $170.5 million, an increase of $35.2 million, or 26.05%, when compared to the year ended December 31, 2023. The increase in net interest income was primarily due to an increase in total interest income of $81.3 million, or 37.96%, which included an increase in interest and fees on loans of $75.3 million, or 38.74%. The increase in interest and fees on loans was primarily due to the increase in the average balance of loans of $1.08 billion, or 29.79%, and an increase in net accretion income of $5.1 million due to the merger. The increase in net interest income was partially offset by an increase in total interest expense of $46.0 million, or 58.42%, primarily due to increases in the cost of funds and the average balance of interest-bearing deposits of $749.2 million, or 25.09%. All of the increases in average balances were primarily due to the merger.
The Company’s net interest margin decreased from 3.11% for the year ended December 31, 2023 to 3.10% for the year ended December 31, 2024. Margins were flat as more rapid increases in rates on interest-bearing liabilities were offset by increases in interest-earning asset yields and larger balances in noninterest-bearing deposits. The increases in the average balances and rates paid on interest-bearing deposits of $749.2 million and 79 bps, respectively, were partially offset by increases in the average balance and yields earned on average earning assets of $1.16 billion and 44 bps, respectively. Additionally, margins were positively impacted as average balances of noninterest-bearing deposits increased $410.6 million, or 39.35%, from 24.86% of average funding for the year ended December 31, 2023 to 27.27% for the year ended December 31, 2024. Net accretion income impacted net interest margin by 27 bps and 21 bps for the years ended December 31, 2024 and 2023, respectively, which resulted in core NIMs of 2.83% and 2.90% for the same periods.
The provision for credit losses for the years ended December 31, 2024 and 2023 was $4.7 million and $31.0 million, respectively. The decrease in the provision for credit losses was due to higher levels of reserves required by the Company’s CECL model for the acquired portfolio related to the merger in 2023. Net charge-offs for the year ended December 31, 2024 were $4.1 million, compared to $2.0 million for the year ended December 31, 2023.
Total noninterest income for the year ended December 31, 2024 decreased $2.0 million, or 6.07%, when compared to the same period in 2023. The decrease was primarily due to one-time bargain purchase gain of $8.8 million in the third quarter of 2023, partially offset by $2.2 million of losses on the sale of investment securities, which were both a direct result of the merger with TCFC in the third quarter of 2023. These were offset by increases in mortgage banking revenue, interchange fees and gain on sale of other assets
Total noninterest expense for the year ended December 31, 2024 increased $14.9 million, or 12.10%, when compared to the same period in 2023. Noninterest expense line items increased as a result of the $4.7 million credit card fraud event and the expanded operations of the newly-combined larger Company. There were no merger-related expenses and $4.7 million of credit card fraud losses for the fiscal year 2024, compared to $17.4 million of merger-related expenses and no fraud losses for the fiscal year 2023, respectively. The Company continues to focus on streamlining processes to unlock operational efficiencies and reduce the growth rate of noninterest expenses to increase operating leverage.
The efficiency ratio for the year ended December 31, 2024 was 68.55%, compared to 73.21% for the year ended December 31, 2023. Non-GAAP efficiency ratios for the same periods were 61.43% and 61.62%, respectively. The net operating expense ratio, which is noninterest expense less noninterest income divided by average assets, for the year ended December 31, 2024 was 1.82%, compared to 1.93% for the year ended December 31, 2023. The non-GAAP net operating expense ratio(1), which excludes core deposit intangible amortization and non-recurring activity was 1.58% for the year ended December 31, 2024, compared to 1.57% for the year ended December 31, 2023.
(1) See the Reconciliation of GAAP and non-GAAP Measures tables.
5

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 title work related to real estate transactions through its wholly-owned subsidiary, Mid-Maryland Title Company, Inc. and 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
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. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing war in Ukraine and the conflict in the Middle East; the effects of, and changes in, trade, monetary, and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; the impact of governmental efforts to restructure or adjust the U.S. financial regulatory system; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding debt ceiling and the federal budget; the impact of recent or future changes in FDIC insurance assessment rate or the rules and regulations related to the calculation of the FDIC insurance assessment amount, including any special assessments; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; the Company’s ability to remediate the existing material weaknesses identified in its internal control over financial reporting; the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; and other factors that may affect our future results. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company’s 2023 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (https://www.sec.gov).
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.
For further information contact: Todd Capitani, Executive Vice President, and Chief Financial Officer, (240) 427-1068
6

Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited)
Q4 2024 vs. Q4 2024 vs. Year Ended December 31,
($ in thousands, except per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2024Q4 2023202420232024 vs. 2023
PROFITABILITY FOR THE PERIOD
Taxable-equivalent net interest income$44,093$43,345$42,222$41,214$41,6061.73 %5.98 %$170,874$135,56026.05 %
Less: Taxable-equivalent adjustment8282827981— 1.23 32525328.46 
Net interest income44,01143,26342,14041,13541,5251.73 5.99 170,549135,30726.05 
Provision for credit losses7801,4702,081407896(46.94)(12.95)4,73830,953(84.69)
Noninterest income8,8537,2878,4406,5677,54821.49 17.29 31,14733,159(6.07)
Noninterest expense33,94334,11433,49936,69833,670(0.50)0.80 138,254123,32912.10 
Income before income taxes18,14114,96615,00010,59714,50721.21 25.05 58,70414,184313.87 
Income tax expense4,8593,7773,7662,4134,01728.65 20.96 14,8152,956401.18 
Net income$13,282$11,189$11,234$8,184$10,49018.71 26.60 $43,889$11,228290.89 
Return on average assets 0.86%0.77%0.77%0.57%0.72%9 bp14 bp0.74%0.24%50 bp
Return on average assets excluding amortization of intangibles, fraud losses and merger-related expenses - non-GAAP (1), (2)
0.940.900.910.940.884 6 0.920.5834 
Return on average equity 9.828.418.706.388.21141 161 8.352.54581 
Return on average tangible equity - non-GAAP (1), (2)
13.3712.3712.8513.3912.88100 49 13.007.74526 
Interest rate spread2.022.062.112.342.34(4)(32)2.142.42(28)
Net interest margin3.033.173.113.083.09(14)(6)3.103.11(1)
Efficiency ratio - GAAP 64.2167.4966.2376.9368.61(328)(440)68.5573.21(466)
Efficiency ratio - non-GAAP (1)
60.2862.1061.0562.3761.99(182)(171)61.4361.62(19)
Noninterest income to average assets0.570.500.580.460.527 5 0.530.71(18)
Noninterest expense to average assets2.192.342.312.562.33(15)(14)2.342.64(30)
Net operating expense to average assets - GAAP1.621.841.732.101.80(22)(18)1.821.93(11)
Net operating expense to average assets - non-GAAP (1)
1.501.651.551.621.58(15)(8)1.581.571 
PER SHARE DATA
Basic net income per common share$0.40$0.34$0.34$0.25$0.3217.65 %25.00 %$1.32$0.42214.29 %
Diluted net income per common share0.400.340.340.250.3117.65 29.03 1.320.42214.29 
Dividends paid per common share0.120.120.120.120.12— — 0.480.48— 
Book value per common share at period end16.2316.0015.7415.5115.411.44 5.32 16.2315.415.32 
Tangible book value per common share at period end - non-GAAP (1)
13.1912.8812.5412.2412.062.41 9.37 13.1912.069.37 
Market value at period end15.8513.9911.4511.5014.2513.30 11.23 15.8514.2511.23 
Market range:
High17.6114.9911.9014.3814.5117.48 21.36 17.6118.15(2.98)
Low13.2111.0310.0610.569.6619.76 36.75 10.069.664.14 
____________________________________
(1)See the Reconciliation of GAAP and non-GAAP Measures tables.
(2)This ratio excludes merger-related expenses. See the Reconciliation of GAAP and non-GAAP Measures tables.
7

Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited) - Continued
Q4 2024 vs. Q4 2024 vs. Year Ended December 31,
($ in thousands, except per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2024Q4 2023202420232024 vs. 2023
AVERAGE BALANCE SHEET DATA
Loans$4,796,245$4,734,001$4,706,510$4,655,183$4,639,4671.31 %3.38 %$4,723,215 $3,639,058 29.79 %
Investment securities655,610656,375706,079655,323619,920(0.12)5.76 668,279 674,866 (0.98)
Earning assets5,798,4545,435,3115,459,9615,387,7825,339,8336.68 8.59 5,520,904 4,356,855 26.72 
Assets6,163,4975,810,4925,839,3285,774,8245,745,4406.08 7.28 5,896,931 4,663,539 26.45 
Deposits5,461,5835,086,3485,064,9745,142,6585,136,8187.38 6.32 5,188,812 4,029,014 28.79 
FHLB advances50,00083,500143,7694,0001,141(40.12)4282.12 70,298 111,392 (36.89)
Subordinated debt & TRUPS73,57872,94672,68072,41872,1550.87 1.97 72,907 57,708 26.34 
Stockholders’ equity538,184529,155519,478515,976507,0401.71 6.14 525,742 441,790 19.00 
CREDIT QUALITY DATA
Net charge-offs $1,333$1,379$886$565$500(3.34)%166.60 %4,072 2,019 101.68 %
Nonaccrual loans $21,008$14,844$14,837$12,776$12,78441.53 %64.33 %
Loans 90 days past due and still accruing2944544141,560738(35.24)(60.16)
Other real estate owned and repossessed property3,4944851,7392,024179620.41 1,851.96 
Total nonperforming assets $24,796$15,783$16,990$16,360$13,70157.11 80.98 

8

Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited) - Continued
Q4 2024 vs. Q4 2024 vs. Year Ended December 31,
($ in thousands, except per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2024Q4 2023202420232024 vs. 2023
CAPITAL AND CREDIT QUALITY RATIOS
Period-end equity to assets8.68 %9.01 %8.92 %8.84 %8.50 %(33)bp18 bp
Period-end tangible equity to tangible assets - non-GAAP (1)
7.17 7.39 7.23 7.11 6.78 (22)39 
Annualized net charge-offs to average loans0.11 %0.12 %0.08 %0.05 %0.04 %(1)bp7 bp0.09 %0.06 %3 bp
Allowance for credit losses as a percent of:
Period-end loans1.21 %1.24 %1.24 %1.23 %1.24 %(3)bp(3)bp
Nonaccrual loans 275.66 395.24 394.14 448.78 448.62 (11,958)(17,296)
Nonperforming assets 233.55 371.72 344.19 350.46 418.59 (13,817)(18,504)
As a percent of total loans:
Nonaccrual loans 0.44 %0.31 %0.32 %0.27 %0.28 %13 bp16 bp
As a percent of total loans, other real estate owned and repossessed property
Nonperforming assets 0.52 %0.33 %0.36 %0.35 %0.30 %19 bp22 bp
As a percent of total assets:
Nonaccrual loans 0.34 %0.25 %0.25 %0.22 %0.21 %9 bp13 bp
Nonperforming assets 0.40 0.27 0.29 0.28 0.23 13 17 
____________________________________
(1)See the Reconciliation of GAAP and non-GAAP Measures tables.

9

Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited) - Continued

Q4 2024 vs.Q4 2024 vs.Year Ended December 31,
($ in thousands)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2024Q4 2023202420232024 vs. 2023
The Company Amounts
Common Tier 1 Capital to RWA$458,258 $446,402 $435,238 $421,670 $408,3172.66 %12.23 %
Tier 1 Capital to RWA488,105 476,170 464,554 450,907 437,8472.51 11.48 
Total Capital to RWA591,228 579,664 567,680 552,657 539,5721.99 9.57 
Tier 1 Capital to AA (Leverage)488,105 476,170 464,554 450,907 437,8472.51 11.48 
The Company Ratios
Common Tier 1 Capital to RWA9.44 %9.27 %9.06 %8.91 %8.69 %17 bp75 bp
Tier 1 Capital to RWA10.06 9.89 9.67 9.53 9.32 17 74 
Total Capital to RWA12.18 12.04 11.82 11.68 11.49 14 69 
Tier 1 Capital to AA (Leverage)8.02 8.31 8.07 7.93 7.75 (29)27 
The Bank Amounts
Common Tier 1 Capital to RWA$521,453 $509,511 $501,003 $487,494 $470,200 2.34 %10.90 %
Tier 1 Capital to RWA521,453 509,511 501,003 487,494 470,200 2.34 10.90 
Total Capital to RWA580,706 569,317 560,625 545,922 528,786 2.00 9.82 
Tier 1 Capital to AA (Leverage)521,453 509,511 501,003 487,494 470,200 2.34 10.90 
The Bank Ratios
Common Tier 1 Capital to RWA10.75 %10.60 %10.45 %10.32 %10.02 %15 bp73 bp
Tier 1 Capital to RWA10.75 10.60 10.45 10.32 10.02 15 73 
Total Capital to RWA11.97 11.84 11.69 11.56 11.27 13 70 
Tier 1 Capital to AA (Leverage)8.58 8.90 8.71 8.58 8.33 (32)25 
10

Shore Bancshares, Inc.
Consolidated Balance Sheets (Unaudited)
December 31, 2024
compared to
($ in thousands, except per share data)December 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023December 31, 2023
ASSETS
Cash and due from banks$44,008 $52,363 $50,090 $43,079 $63,172 (30.34)%
Interest-bearing deposits with other banks415,843 131,258 88,793 71,481 309,241 34.47 
Cash and cash equivalents459,851 183,621 138,883 114,560 372,413 23.48 
Investment securities:
Available for sale, at fair value 149,212 133,339 131,594 179,496 110,521 35.01 
Held to maturity, net of allowance for credit losses481,077 484,583 499,431 503,822 513,188 (6.26)
Equity securities, at fair value5,814 5,950 5,699 5,681 5,703 1.95 
Restricted securities, at cost20,253 20,253 21,725 17,863 17,900 13.15 
Loans held for sale, at fair value19,60626,87727,82913,7678,782123.25
Loans held for investment4,771,988 4,733,909 4,705,737 4,648,725 4,641,010 2.82 
Less: allowance for credit losses(57,910)(58,669)(58,478)(57,336)(57,351)(0.97)
Loans, net4,714,078 4,675,240 4,647,259 4,591,389 4,583,659 2.85 
Premises and equipment, net81,806 81,663 82,176 83,084 82,386 (0.70)
Goodwill63,266 63,266 63,266 63,266 63,266 — 
Other intangible assets, net38,311 40,609 42,945 45,515 48,090 (20.33)
Mortgage servicing rights, at fair value5,874 5,309 5,995 5,821 5,926 (0.88)
Right-of-use assets11,385 11,384 11,762 12,153 12,487 (8.83)
Cash surrender value on life insurance104,421 103,729 102,969 102,321 101,704 2.67 
Accrued interest receivable19,570 19,992 19,641 19,541 19,217 1.84 
Deferred income taxes31,857 32,191 36,078 38,978 40,707 (21.74)
Other assets24,382 29,698 26,765 28,447 24,969 (2.35)
TOTAL ASSETS$6,230,763 $5,917,704 $5,864,017 $5,825,704 $6,010,918 3.66 

11

Shore Bancshares, Inc.
Consolidated Balance Sheets (Unaudited) - Continued
December 31, 2024
compared to
($ in thousands, except per share data)December 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023December 31, 2023
LIABILITIES
Deposits:
Noninterest-bearing$1,562,815 $1,571,393 $1,587,252 $1,200,680 $1,258,037 24.23 %
Interest-bearing checking978,076 751,533 658,512 1,101,954 1,165,546 (16.08)
Money market and savings1,805,884 1,634,140 1,689,343 1,712,303 1,777,927 1.57 
Time deposits1,181,561 1,268,657 1,213,778 1,169,342 1,184,610 (0.26)
Total deposits5,528,336 5,225,723 5,148,885 5,184,279 5,386,120 2.64 
FHLB advances - short-term— — 31,000 — — — 
FHLB advances50,000 50,000 50,000 — — — 
Guaranteed preferred beneficial interest in junior subordinated debentures (“TRUPS”)
29,847 29,768 29,316 29,237 29,158 2.36 
Subordinated debt43,870 43,688 43,504 43,322 43,139 1.69 
Total borrowings123,717 123,456 153,820 72,559 72,297 71.12 
Lease liabilities11,84411,81612,18912,55212,857(7.88)
Other liabilities25,800 23,438 26,340 41,086 28,509 (9.50)
TOTAL LIABILITIES5,689,697 5,384,433 5,341,234 5,310,476 5,499,783 3.45 
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share333 333 333 332 332 0.30 
Additional paid in capital358,112 357,580 356,994 356,464 356,007 0.59 
Retained earnings190,166 180,884 173,716 166,490 162,290 17.18 
Accumulated other comprehensive loss(7,545)(5,526)(8,260)(8,058)(7,494)(0.68)
TOTAL STOCKHOLDERS’ EQUITY541,066 533,271 522,783 515,228 511,135 5.86 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$6,230,763 $5,917,704 $5,864,017 $5,825,704 $6,010,918 3.66 
Period-end common shares outstanding33,332,17733,326,77233,214,52233,210,52233,161,5320.51 
Book value per common share$16.23 $16.00 $15.74 $15.51 $15.41 5.32 
12

Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter (Unaudited)
Q4 2024 vs. Q4 2024 vs.
compared tocompared toYear Ended December 31,
($ in thousands, except share and per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2024Q4 202320242023% Change
INTEREST INCOME
Interest and fees on loans $67,428$69,157$67,292$65,754$65,914(2.50)%2.30 %$269,631$194,33938.74 %
Interest on investment securities:
Taxable4,8334,9625,2304,4193,992(2.60)21.07 19,44416,83215.52 
Tax-exempt66666— — 2446(47.83)
Interest on federal funds sold—————— — —92(100.00)
Interest on deposits with other banks4,1375645789601,224633.51 237.99 6,2392,770125.23 
Total interest income76,40474,68973,10671,13971,1362.30 7.41 295,338214,07937.96 
INTEREST EXPENSE
Interest on deposits30,36328,85627,58528,49728,1335.22 7.93 115,30168,80067.59 
Interest on short-term borrowings—4911,5845616(100.00)(100.00)2,1315,518(61.38)
Interest on long-term borrowings2,0302,0791,7971,4511,462(2.36)38.85 7,3574,45465.18 
Total interest expense32,39331,42630,96630,00429,6113.08 9.40 124,78978,77258.42 
NET INTEREST INCOME44,01143,26342,14041,13541,5251.73 5.99 170,549135,30726.05 
Provision for credit losses7801,4702,081407896(46.94)(12.90)4,73830,953(84.69)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES43,23141,79340,05940,72840,6293.44 6.40 165,811104,35458.89 
NONINTEREST INCOME
Service charges on deposit accounts1,6061,5431,4931,5071,5194.08 5.73 6,1495,50111.78 
Trust and investment fee income857880896734844(2.61)1.54 3,3673,608(6.68)
Loss on sales and calls of investment securities—————— — —(2,166)100.00 
Interchange credits1,7261,7111,7171,5871,6330.88 5.70 6,7415,71417.97 
Mortgage banking revenue2,0261,1771,9838011,10572.13 83.35 5,9874,51332.66 
Title Company revenue5910016578139(41.00)(57.55)402551(27.04)
Bargain purchase gain—————— — —8,816(100.00)
Other noninterest income2,5791,8762,1861,8602,30837.47 11.74 8,5016,62228.38 
Total noninterest income$8,853$7,287$8,440$6,567$7,54821.49 17.29 $31,147$33,159(6.07)

13

Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter (Unaudited) - Continued
Q4 2024 vs. Q4 2024 vs.
compared tocompared toYear Ended December 31,
($ in thousands, except share and per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023Q3 2024Q4 202320242023% Change
NONINTEREST EXPENSE
Salaries and employee benefits$17,209$16,523$16,900$15,949$16,2124.15 %6.15 %$66,579$57,00316.80 %
Occupancy expense 2,4742,3842,4322,4162,3283.78 6.27 9,7067,79124.58 
Furniture and equipment expense760876900904790(13.24)(3.80)3,4412,55134.89 
Data processing3,0673,0812,9782,8672,762(0.45)11.04 12,3298,78340.37 
Directors’ fees4604433592954263.84 7.98 1,5571,15634.69 
Amortization of intangible assets2,2982,3362,5692,5762,595(1.63)(11.45)9,7796,10560.18 
FDIC insurance premium expense1,0131,1601,0891,1501,733(12.67)(41.55)4,4133,47926.85 
Legal and professional fees1,5211,3621,3541,5991,41111.67 7.80 5,8364,33734.56 
Fraud losses(1)
98673624,502503(85.44)(80.52)4,998879468.60 
Merger-related expenses————602— (100.00)—17,356(100.00)
Other noninterest expenses5,0435,2764,8564,4404,308(4.42)17.06 19,61613,88941.23 
Total noninterest expense33,94334,11433,49936,69833,670(0.50)0.81 138,254123,32912.10 
Income before income taxes18,14114,96615,00010,59714,50721.21 25.05 58,70414,184313.87 
Income tax expense4,8593,7773,7662,4134,01728.65 20.96 14,8152,956401.18 
NET INCOME$13,282$11,189$11,234$8,184$10,49018.71 26.62 $43,889$11,228290.89 
Weighted average shares outstanding - basic33,32733,31833,23433,18933,1530.03 %0.53 %33,26726,57225.20 %
Weighted average shares outstanding - diluted33,36433,33933,23433,19133,3220.07 %0.12 %33,28526,57425.25 %
Basic net income per common share$0.40$0.34$0.34$0.25$0.3217.65 %25.00 %$1.32$0.42214.29 %
Diluted net income per common share$0.40$0.34$0.34$0.25$0.3117.65 %29.03 %$1.32$0.42214.29 %
Dividends paid per common share$0.12$0.12$0.12$0.12$0.12— %— %$0.48$0.48— %
____________________________________
(1)Fraud losses for the third quarter of 2024 and first quarter of 2024 include $337 thousand and $4.3 million in losses related to the one-time online credit card account opening event. The third quarter of 2024 expense of $337 thousand was related to non-recurring data processing charges to close the fraudulent accounts.
14

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited)
Three Months Ended
December 31, 2024December 31, 2023September 30, 2024
($ in thousands)Average BalanceInterestYield/RateAverage BalanceInterestYield/Rate Average BalanceInterestYield/Rate
Earning assets
Loans(1), (2), (3)
  Commercial real estate $2,551,903$36,0365.62 %$2,509,904$35,5615.62 %$2,522,170$36,3765.74 %
  Residential real estate1,358,06618,1425.31 1,242,85217,5125.59 1,332,89119,3155.76 
  Construction336,0945,3046.28 322,2674,5885.65 336,2095,3076.28 
  Commercial 229,6763,7926.57 222,6324,3087.68 212,6113,7637.04 
  Consumer313,6864,0805.17 335,4923,8584.56 322,9884,3065.30 
  Credit cards6,8201548.98 6,32016610.42 7,1321709.48 
Total loans4,796,24567,5085.60 4,639,46765,9935.64 4,734,00169,2375.82 
Investment securities
Taxable654,9554,8332.95 619,2593,9922.58 655,7184,9623.03 
Tax-exempt(1)
65584.89 66184.84 65784.87 
Interest-bearing deposits346,5994,1374.75 80,4461,2246.04 44,9355644.99 
Total earning assets5,798,45476,4865.25 5,339,83371,2175.29 5,435,31174,7715.47 
Cash and due from banks43,44463,50646,996
Other assets380,321399,409386,700
Allowance for credit losses(58,722)(57,308)(58,515)
Total assets$6,163,497$5,745,440$5,810,492
15

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) - Continued
Three Months Ended
December 31, 2024December 31, 2023September 30, 2024
($ in thousands)Average BalanceInterestYield/RateAverage BalanceInterestYield/Rate Average BalanceInterestYield/Rate
Interest-bearing liabilities
Interest-bearing checking deposits$901,764$7,8983.48 %$1,117,117$6,6732.37 %$581,517$5,4723.74 %
Money market and savings deposits 1,733,93410,3312.37 1,605,9308,3302.06 1,670,21010,4202.48 
Time deposits1,232,48012,1343.92 1,092,87111,7834.28 1,229,27312,7424.12 
Brokered deposits——— 92,8401,3475.76 25,8292223.42 
Interest-bearing deposits(4)
3,868,17830,3633.12 3,908,75828,1332.86 3,506,82928,8563.27 
FHLB advances50,0006184.92 1,141165.56 83,5001,1165.32 
Subordinated debt and Guaranteed preferred beneficial interest in junior subordinated debentures (“TRUPS”) (4)
73,5781,4127.63 72,1551,4628.04 72,9461,4547.93 
Total interest-bearing liabilities3,991,75632,3933.23 3,982,05429,6112.95 3,663,27531,4263.41 
Noninterest-bearing deposits1,593,4051,228,0601,579,519
Accrued expenses and other liabilities40,15228,28638,543
Stockholders’ equity538,184507,040529,155
Total liabilities and stockholders’ equity$6,163,497$5,745,440$5,810,492
Net interest income$44,093$41,606$43,345
Net interest spread2.02 %2.34 %2.06 %
Net interest margin3.03 3.09 3.17 
Cost of funds2.31 2.25 2.38 
Cost of deposits2.21 2.17 2.26 
Cost of debt6.54 8.00 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 $3.2 million, $4.8 million and $5.0 million of accretion interest on loans for the three months ended December 31, 2024 and 2023, and September 30, 2024, respectively.
(4) Interest expense on deposits and borrowing includes amortization of deposit discount and amortization of borrowing fair value adjustments. There were $412 thousand, $1.5 million and $287 thousand of amortization of deposits premium, and $232 thousand, $232 thousand, and $232 thousand of amortization of borrowing fair value adjustments for the three months ended December 31, 2024 and 2023, and September 30, 2024, respectively.
16

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) - Continued
For the Year Ended December 31,
20242023
($ in thousands)Average BalanceInterestYield/RateAverage BalanceInterestYield/Rate
Earning assets
Loans (1), (2), (3)
  Commercial real estate $2,528,961$144,155 5.70 %$1,860,517$99,953 5.37 %
  Residential real estate 1,318,50072,636 5.51 981,47350,244 5.12 
  Construction322,97819,917 6.17 284,23815,123 5.32 
  Commercial 220,69915,625 7.08 185,23913,647 7.37 
  Consumer324,63316,923 5.21 324,44415,298 4.72 
  Credit cards7,444694 9.32 3,147315 10.01 
Total loans4,723,215 269,950 5.72 3,639,058 194,580 5.35 
Investment securities
Taxable667,62219,444 2.91 674,20316,832 2.50 
Tax-exempt (1)
65730 4.57 66358 8.75 
Federal funds sold—— — 1,89992 4.84 
Interest-bearing deposits129,4106,239 4.82 41,0322,770 6.75 
Total earning assets5,520,904295,663 5.36 4,356,855214,332 4.92 
Cash and due from banks46,26443,555
Other assets387,852303,906
Allowance for credit losses(58,089)(40,777)
Total assets$5,896,931 $4,663,539 
17

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) - Continued
For the Year Ended December 31,
20242023
($ in thousands)Average BalanceInterestYield/RateAverage BalanceInterestYield/Rate
Interest-bearing liabilities
Interest-bearing checking deposits$825,773$25,523 3.09 %$883,976$20,134 2.28 %
Money market and savings deposits 1,690,90541,202 2.44 1,275,08820,039 1.57 
Time deposits1,212,78248,566 4.00 770,37025,708 3.34 
Brokered deposits5,26510 0.19 56,1012,919 5.20 
Interest-bearing deposits (4)
3,734,725115,301 3.09 2,985,53568,800 2.30 
FHLB advances70,2983,720 5.29 111,3925,518 4.95 
Subordinated debt and Guaranteed preferred beneficial interest in junior subordinated debentures (“TRUPS”) (4)
72,9075,768 7.91 57,7084,454 7.72 
Total interest-bearing liabilities3,877,930124,789 3.22 3,154,63578,772 2.50 
Noninterest-bearing deposits1,454,0871,043,479
Accrued expenses and other liabilities39,17223,635
Stockholders’ equity525,742 441,790 
Total liabilities and stockholders’ equity$5,896,931 $4,663,539 
Net interest income$170,874 $135,560 
Net interest spread2.14 %2.42 %
Net interest margin3.10 3.11 
Cost of funds2.34 1.88 
Cost of deposits2.22 1.71 
Cost of debt6.63 5.90 
____________________________________
(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 $16.9 million and $11.8 million of accretion interest on loans for the years ended December 31, 2024 and 2023, respectively.
(4) Interest expense on deposits and borrowing includes amortization of deposit premiums and amortization of borrowing fair value adjustment. There were $1.5 million of amortization of deposit discounts and $1.8 million of amortization of deposit premium, and $926 thousand and $557 thousand of amortization of borrowing fair value adjustment for the years ended December 31, 2024 and 2023, respectively.
18

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited)
YTDYTD
($ in thousands, except per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 202312/31/202412/31/2023
The following reconciles return on average assets, average equity and return on average tangible equity(1):
Net income (loss) $13,282 $11,189 $11,234 $8,184 $10,490 $43,889 $11,228 
Net income (loss) - annualized (A)$52,839 $44,513 $45,183 $32,916 $41,618 $43,889 $11,228 
Net income (loss) $13,282 $11,189 $11,234 $8,184 $10,490 $43,889 $11,228 
Add: Amortization of intangible assets, net of tax1,683 1,746 1,924 1,989 1,876 7,342 4,254 
Add: Merger expenses, net of tax— — — — 435 — 11,637 
Add: Credit card fraud losses, net of tax— 252 — 3,339 — 3,591 — 
Less: Sale and fair value of held for sale assets, net of tax(329)— — — — (329)
Net income, excluding net amortization of intangible assets, merger-related expenses, credit card fraud losses and held for sale assets14,636 13,187 13,158 13,512 12,801 54,493 27,119 
Net income, excluding net amortization of intangible assets, merger-related expenses, credit card fraud losses and held for sale assets - annualized (B)$58,226 $52,461 $52,921 $54,345 $50,787 $54,493 $27,119 
Return on average assets (GAAP)0.86 %0.77 %0.77 %0.57 %0.72 %0.74 %0.24 %
Return on average assets excluding net amortization of intangible assets, merger-related expenses, credit card fraud losses and held for sale assets - (non-GAAP)0.94 %0.90 %0.91 %0.94 %0.88 %0.92 %0.58 %
Average assets$6,163,497 $5,810,492 $5,839,328 $5,774,824 $5,745,440 $5,896,931 $4,663,539 
Average stockholders’ equity (C)$538,184 $529,155 $519,478 $515,976 $507,040 $525,742 $441,790 
Less: Average goodwill and core deposit intangible(102,794)(105,136)(107,594)(110,167)(112,752)(106,409)(91,471)
Average tangible equity (D)$435,390 $424,019 $411,884 $405,809 $394,288 $419,333 $350,319 
Return on average equity (GAAP) (A)/(C)9.82 %8.41 %8.70 %6.38 %8.21 %8.35 %2.54 %
Return on average tangible equity (non-GAAP) (A)/(D)12.14 %10.50 %10.97 %8.11 %10.56 %10.47 %3.21 %
Return on average tangible equity (non-GAAP) (B)/(D)13.37 %12.37 %12.85 %13.39 %12.88 %13.00 %7.74 %
19

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
YTDYTD
($ in thousands, except per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 202312/31/202412/31/2023
The following reconciles GAAP efficiency ratio and non-GAAP efficiency ratio(2):
Noninterest expense (E)$33,943 $34,114 $33,499 $36,698 $33,670 $138,254 $123,329 
Less: Amortization of intangible assets(2,298)(2,336)(2,569)(2,576)(2,595)(9,779)(6,105)
Less: Merger expenses— — — — (602)— (17,356)
Less: Credit card fraud losses— (337)— (4,323)— (4,660)— 
Adjusted noninterest expense (F)$31,645 $31,441 $30,930 $29,799 $30,473 $123,815 $99,868 
Net interest income (G)$44,011 $43,263 $42,140 $41,135 $41,525 $170,549 $135,307 
Add: Taxable-equivalent adjustment82 82 82 79 81 325 253 
Taxable-equivalent net interest income (H)$44,093 $43,345 $42,222 $41,214 $41,606 $170,874 $135,560 
Noninterest income (I)$8,853 $7,287 $8,440 $6,567 $7,548 $31,147 $33,159 
Investment securities losses (gains)— — — — — — 2,166 
Less: Bargain purchase gain— — — — — — (8,816)
Less: Sale and fair value of held for sale assets(450)— — — — (450)— 
Adjusted noninterest income (J)$8,403 $7,287 $8,440 $6,567 $7,548 $30,697 $26,509 
Efficiency ratio (GAAP) (E)/(G)+(I) 64.21 %67.49 %66.23 %76.93 %68.61 %68.55 %73.21 %
Efficiency ratio (Non-GAAP) (F)/(H)+(J)60.28 %62.10 %61.05 %62.37 %61.99 %61.43 %61.62 %
Net operating expense to average assets (GAAP)1.62 %1.84 %1.73 %2.10 %1.80 %1.82 %1.93 %
Net operating expense to average assets (Non-GAAP)1.50 %1.65 %1.55 %1.62 %1.58 %1.58 %1.57 %
20

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
($ in thousands, except per share data)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023
The following reconciles book value per common share and tangible book value per common share(1):
Stockholders’ equity (K)$541,066 $533,271 $522,783 $515,228 $511,135 
Less: Goodwill and core deposit intangible(101,577)(103,875)(106,211)(108,781)(111,356)
Tangible equity (L)$439,489 $429,396 $416,572 $406,447 $399,779 
Shares outstanding (M)33,33233,32733,27233,21133,162
Book value per common share (GAAP) (K)/(M)$16.23$16.00$15.71$15.51$15.41
Tangible book value per common share (non-GAAP) (L)/(M)$13.19$12.88$12.52$12.24$12.06
The following reconciles equity to assets and tangible equity to tangible assets(1):
Stockholders’ equity (N)$541,066$533,271$522,783$515,228$511,135
Less: Goodwill and core deposit intangible(101,577)(103,875)(106,211)(108,781)(111,356)
Tangible equity (O)$439,489$429,396$416,572$406,447$399,779
Assets (P)$6,230,763$5,917,704$5,864,017$5,825,704$6,010,918
Less: Goodwill and core deposit intangible(101,577)(103,875)(106,211)(108,781)(111,356)
Tangible assets (Q)$6,129,186$5,813,829$5,757,806$5,716,923$5,899,562
Period-end equity/assets (GAAP) (N)/(P)8.68%9.01%8.92%8.84%8.50%
Period-end tangible equity/tangible assets (Non-GAAP) (O)/(Q)7.17%7.39%7.23%7.11%6.78%
____________________________________
(1) Management believes that reporting tangible 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.
21

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
Regulatory Capital and Ratios for the Company
($ in thousands)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023
Common equity$541,066 $533,271 $522,783 $515,228 $511,135 
Goodwill(1)
(61,362)(61,397)(61,460)(61,523)(63,266)
Core deposit intangible(2)
(28,991)(30,572)(32,313)(34,235)(38,069)
DTAs that arise from net operating loss and tax credit carry forwards— (426)(2,032)(5,858)(8,977)
AOCI (gains) losses7,545 5,526 8,260 8,058 7,494 
Common Equity Tier 1 Capital458,258 446,402 435,238 421,670 408,317 
TRUPS29,847 29,768 29,316 29,237 29,530 
Tier 1 Capital488,105 476,170 464,554 450,907 437,847 
Allowable reserve for credit losses and other Tier 2 adjustments59,253 59,806 59,622 58,428 58,586 
Subordinated notes43,870 43,688 43,504 43,322 43,139 
Total Capital$591,228 $579,664 $567,680 $552,657 $539,572 
Risk-Weighted Assets (“RWA”)$4,852,564 $4,816,165 $4,803,230 $4,729,930 $4,697,504 
Average Assets (“AA”)6,083,760 5,729,576 5,756,260 5,684,150 5,649,116 
Common Tier 1 Capital to RWA9.44 %9.27 %9.06 %8.91 %8.69 %
Tier 1 Capital to RWA10.06 9.89 9.67 9.53 9.32 
Total Capital to RWA12.18 12.04 11.82 11.68 11.49 
Tier 1 Capital to AA (Leverage)(3)
8.02 8.31 8.07 7.93 7.75 

22

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) - Continued
Regulatory Capital and Ratios for the Bank
($ in thousands)Q4 2024Q3 2024Q2 2024Q1 2024Q4 2023
Common equity$604,261 $595,954 $587,283 $579,520 $570,100 
Goodwill(1)
(61,362)(61,397)(61,460)(61,523)(63,266)
Core deposit intangible(2)
(28,991)(30,572)(32,313)(34,235)(38,069)
DTAs that arise from net operating loss and tax credit carry forwards— — (767)(4,326)(6,059)
AOCI (gains) losses7,545 5,526 8,260 8,058 7,494 
Common Equity Tier 1 Capital521,453 509,511 501,003 487,494 470,200 
TRUPS— — — — — 
Tier 1 Capital521,453 509,511 501,003 487,494 470,200 
Allowable reserve for credit losses and other Tier 2 adjustments59,253 59,806 59,622 58,428 58,586 
Subordinated notes— — — — — 
Total Capital$580,706 $569,317 $560,625 $545,922 $528,786 
Risk-Weighted Assets (“RWA”)$4,851,903 $4,808,058 $4,796,512 $4,723,872 $4,693,009 
Average Assets (“AA”)6,077,540 5,721,995 5,750,604 5,679,282 5,644,930 
Common Tier 1 Capital to RWA10.75 %10.60 %10.45 %10.32 %10.02 %
Tier 1 Capital to RWA10.75 10.60 10.45 10.32 10.02 
Total Capital to RWA11.97 11.84 11.69 11.56 11.27 
Tier 1 Capital to AA (Leverage)(3)
8.58 8.90 8.71 8.58 8.33 
___________________________________
(1)Goodwill is net of deferred tax liability.
(2)Core deposit intangible is net of deferred tax liability.
(3)Tier 1 Capital to AA (Leverage) has no capital conservation buffer defined. The PCA well capitalized is defined as 5.00%.
23

Shore Bancshares, Inc.
Summary of Loan Portfolio (Unaudited)
Portfolio loans are summarized by loan type as follows:
($ in thousands)December 31, 2024%September 30, 2024%June 30, 2024%March 31, 2024%December 31, 2023%
Portfolio Loans by Loan Type
Commercial real estate$2,557,806 53.60 %$2,535,004 53.55 %$2,546,114 54.10 %$2,531,076 54.45 %$2,536,861 54.67 %
Residential real estate1,329,406 27.86 1,312,375 27.72 1,280,973 27.22 1,256,925 27.04 1,239,731 26.71 
Construction335,999 7.04 337,113 7.12 327,875 6.97 299,133 6.43 299,000 6.44 
Commercial237,932 4.99 225,083 4.76 218,987 4.65 229,594 4.94 229,939 4.95 
Consumer303,746 6.36 317,149 6.70 324,480 6.90 325,076 6.99 328,896 7.09 
Credit cards7,099 0.15 7,185 0.15 7,308 0.16 6,921 0.15 6,583 0.14 
Total loans4,771,988 100.00 %4,733,909 100.00 %4,705,737 100.00 %4,648,725 100.00 %4,641,010 100.00 %
Less: Allowance for credit losses(57,910)(58,669)(58,478)(57,336)(57,351)
Total loans, net$4,714,078 $4,675,240 $4,647,259 $4,591,389 $4,583,659 

24

Shore Bancshares, Inc.
Classified Assets and Nonperforming Assets (Unaudited)
Classified assets and nonperforming assets are summarized as follows:
($ in thousands)December 31, 2024September 30, 2024June 30, 2024March 31, 2024December 31, 2023
Classified loans
Substandard$24,675 $22,798 $17,409 $13,403 $14,673 
Doubtful— — — — — 
Loss— — — — — 
Total classified loans24,675 22,798 17,409 13,403 14,673 
Special mention loans33,519 14,385 25,549 27,192 28,264 
Total classified and special mention loans$58,194 $37,183 $42,958 $40,595 $42,937 
Classified loans$24,675 $22,798 $17,409 $13,403 $14,673 
Other real estate owned179 179 179 179 179 
Repossessed property3,315 306 1,560 1,845 — 
Total classified assets$28,169 $23,283 $19,148 $15,427 $14,852 
Classified assets to total assets0.45 %0.39 %0.33 %0.26 %0.25 %
Non-accrual loans$21,008 $14,844 $14,837 $12,776 $12,784 
90+ days delinquent accruing294 454 414 1,560 738 
Other real estate owned (“OREO”)
179 179 179 179 179 
Repossessed property3,315 306 1,560 1,845 — 
Total nonperforming assets$24,796 $15,783 $16,990 $16,360 $13,701 
Accruing borrowers experiencing financial difficulty loans (“BEFD”)$1,362 $— $— $— $367 
Total nonperforming assets and BEFDs modifications$26,158 $15,783 $16,990 $16,360 $14,068 
Nonperforming assets to total assets0.40 %0.27 %0.29 %0.28 %0.23 %
Total assets$6,230,763 $5,917,704 $5,864,017 $5,825,704 $6,010,918 

25
v3.24.4
Cover
Jan. 30, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 30, 2025
Entity Registrant Name SHORE BANCSHARES, INC.
Entity Incorporation, State or Country Code MD
Entity File Number 000-22345
Entity Tax Identification Number 52-1974638
Entity Address, Address Line One 18 E. Dover St.
Entity Address, City or Town Easton
Entity Address, State or Province MD
Entity Address, Postal Zip Code 21601
City Area Code 410
Local Phone Number 763-7800
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol SHBI
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001035092
Shore Bancshares (NASDAQ:SHBI)
Graphique Historique de l'Action
De Déc 2024 à Jan 2025 Plus de graphiques de la Bourse Shore Bancshares
Shore Bancshares (NASDAQ:SHBI)
Graphique Historique de l'Action
De Jan 2024 à Jan 2025 Plus de graphiques de la Bourse Shore Bancshares