Press release
October 22, 2026
Shore Bancshares, Inc. Reports 2026 Third Quarter Results
Shore Bancshares Inc (SHBI)
EASTON, Md., Oct. 22, 2026 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ: SHBI) (the "Company" or "Shore Bancshares"), the holding company for Shore United Bank, N.A. (the "Bank"), reported net income for the third quarter of 2026 of $16.8 million, or $0.50 per diluted common share, compared to net income of $18.9 million, or $0.56 per diluted common share, for the second quarter of 2026, and net income of $14.3 million, or $0.43 per diluted common share, for the third quarter of 2025.
Third Quarter 2026 Highlights
Pre-tax Pre-provision Income ("PTPP"), a non-U.S. generally accepted accounting principles ("GAAP") (1) financial measure – PTPP for the third quarter of 2026 increased $1.5 million to $27.5 million, from $26.1 million in the second quarter of 2026. PTPP increased primarily due to an increase in interest income of $2.6 million and a decrease in noninterest expense of $405 thousand. The increase in net interest income was partially offset by a decrease in noninterest income of $1.2 million and an increase in interest expense of $390 thousand. PTPP for the nine months ended September 30, 2026 was $76.4 million compared to $63.4 million for the nine months ended September 30, 2025.
Return on Average Assets ("ROAA") – The Company reported ROAA of 1.08% for the third quarter of 2026, compared to 1.24% for the second quarter of 2026 and 0.95% for the third quarter of 2025. Adjusted ROAA – non-GAAP (1) was 1.16% for the third quarter of 2026, compared to 1.34% for the second quarter of 2026 and 1.05% for the third quarter of 2025.
Net Interest Margin ("NIM") – Net interest income for the third quarter of 2026 increased $2.2 million to $55.1 million compared to the second quarter of 2026. NIM increased 8 basis points ("bps") to 3.78% for the third quarter of 2026 compared to the second quarter of 2026. NIM excluding accretion (1) increased for the comparable periods from 3.45% to 3.50%. Excluding accretion interest, loan yields increased 4 bp and funding costs decreased 2 bps for the comparable periods. Net interest income increased due to elevated accretion income from loan payoffs, partially offset by a slightly higher interest expense driven by municipal deposits.
Capital Management – Book value per share increased to $18.59 at September 30, 2026 from $18.44 at June 30, 2026 and $17.27 at September 30, 2025. During the quarter ended September 30, 2026, the Company declared a dividend of $0.14 per share and repurchased 148,006 shares of its outstanding common stock for approximately $3.4 million.
Asset Quality – Nonperforming assets were 1.27% of total assets at September 30, 2026, an increase from 1.09% at June 30, 2026 and an increase from 0.45% at September 30, 2025. Classified assets were 1.61% of total assets at September 30, 2026, an increase when compared to 1.41% at June 30, 2026 and 0.83% at September 30, 2025. The allowance for credit losses ("ACL") was $59.6 million at both September 30, 2026 and September 30, 2025, and $58.7 million at June 30, 2026. The ACL as a percentage of loans increased to 1.21% at September 30, 2026 compared to 1.20% at June 30, 2026 and decreased compared to 1.22% at September 30, 2025.
Operating Leverage – The efficiency ratio for the third quarter of 2026 was 56.15%, compared to 57.76% in the second quarter of 2026 and 61.00% for the third quarter of 2025. The adjusted efficiency ratio – non-GAAP (1) , which excludes amortization of intangibles, was 53.30% for the third quarter of 2026, compared to 54.49% for the second quarter of 2026 and 57.30% for the third quarter of 2025. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.
"Our third quarter reflected very strong core earnings, driven by continued expansion in net interest margin, growth in net interest income and lower noninterest expense, which further improved operating leverage," stated James ("Jimmy") M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. "Pre-tax, pre-provision income increased 5.6% from the prior quarter, reflecting our disciplined approach to balance sheet management, the strength of our deposit franchise and our focus on operational execution.
Net income for the quarter was impacted by a higher provision for credit losses, primarily related to a partial charge-off on a multifamily relationship that we downgraded last year. As we pursued an exit from these credits, updated valuations reflected property-specific issues that reduced collateral values. Our approach is to address potential credit problems as early as possible, and our core performance gives us the flexibility to do so. Capital levels remained strong, book value per share increased and we continued to return capital to shareholders through our quarterly dividend and share repurchases. Going forward, we remain focused on prudent growth, continually managing expenses and creating long-term value for our shareholders."
Balance Sheet Review
Total assets were $6.45 billion at September 30, 2026, an increase of $302.9 million from June 30, 2026. The increase was primarily due to an increase in cash and cash equivalents of $197.4 million, an increase in available for sale securities of $93.5 million and an increase in loans of $24.9 million. Total assets increased $195.5 million, or 3.1%, when compared to $6.26 billion at December 31, 2025. The increase was primarily due to an increase in cash and cash equivalents of $99.5 million and an increase in our investment securities portfolio of $101.7 million. The increases in cash and cash equivalents during the quarter and year were primarily driven by the seasonality of municipal deposits.
CRE loans (excluding land and construction) were $2.58 billion at September 30, 2026 compared to $2.64 billion at December 31, 2025. The office CRE loan portfolio, which includes owner occupied and non-owner occupied CRE loans, was $447.0 million, or 9.1% of total loans at September 30, 2026. The following table provides the stratification of the classes of CRE loans (excluding land and construction) at September 30, 2026.
September 30, 2026
Owner Occupied
Non-Owner Occupied
($ in thousands)
Average LTV (1)
Average
Loan Size
Loan
Balance (2)
Average LTV (1)
Average
Loan Size
Loan
Balance (2)
Office, medical
49.69 %
$ 628
$ 27,643
47.34 %
$ 1,458
$ 68,535
Office, govt. or govt. contractor
52.28
948
9,477
53.94
3,189
57,402
Office, other
48.94
485
85,395
49.06
1,289
198,524
Office, total
49.23
533
122,515
49.07
1,482
324,461
Retail
51.79
668
72,151
47.57
2,453
458,804
Multifamily (5+ units)
—
—
—
54.32
2,452
274,637
Hotel/motel
—
—
—
44.05
4,134
210,818
Industrial/warehouse
45.16
690
95,282
46.59
1,636
204,460
Commercial-improved
41.78
1,170
221,044
49.15
1,328
168,696
Marine/boat slips
28.26
747
16,430
35.66
1,446
7,232
Restaurant
48.10
992
53,584
48.99
1,004
41,164
Church
31.46
801
51,288
13.03
2,326
2,326
Land/lot loans
11.31
192
192
50.16
465
1,861
Other
38.60
1,337
105,626
32.19
541
148,902
Total CRE loans, gross
43.32
834
$ 738,112
44.17
1,607
$ 1,843,361
(1)
Loan-to-value ("LTV") is determined based on latest available appraisal against current bank-owned principal. Loans without an updated appraisal utilized the original transaction value.
(2)
Loan balance includes deferred fees and costs.
The office CRE loan portfolio included loans to medical tenants of $96.2 million, or 21.5% of the total office CRE loan portfolio, at September 30, 2026. The office CRE loan portfolio also included loans secured by buildings with government or government contractor tenants of $66.9 million, or 15.0% of the total office CRE loan portfolio at the same date. At September 30, 2026, the average loan debt service coverage ratio on the office CRE loan portfolio was 1.7x and the average LTV was 49.15%.
The 449 loans in the office CRE portfolio at September 30, 2026 had an average loan size of $1.0 million and a median loan size of $399 thousand. LTV estimates for the office CRE portfolio at September 30, 2026 are summarized below and LTV collateral values are based on the most recent appraisal, which may vary from the appraised value at loan origination.
LTV Range ($ in thousands)
Loan Count
Loan Balance
% of Office CRE
Less than or equal to 50%
216
$ 148,601
33.3 %
Greater than 50% and less than or equal to 60%
77
130,024
29.1
Greater than 60% and less than or equal to 70%
80
113,224
25.3
Greater than 70% and less than or equal to 80%
60
40,307
9.0
Greater than 80%
16
14,820
3.3
Total
449
$ 446,976
100.0 %
There were 14 office CRE loans with balances greater than $5.0 million, totaling $136.1 million at September 30, 2026 and $166.1 million at December 31, 2025. The decrease in this portfolio segment was the result of normal amortization and payoff of one loan. At September 30, 2026, 80.3% of the office CRE loan balance 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. Office CRE loan balances that were classified as special mention or substandard were $8.2 million at September 30, 2026. There were no charge-offs within the office CRE portfolio during the three and nine months ended September 30, 2026 and 2025. During the third quarter of 2026, the Company foreclosed on an office commercial real estate property located in Virginia with a carrying value of $10.8 million. The property had previously been reported as a nonperforming asset in prior periods and was transferred to other real estate owned ("OREO") during the quarter.
Nonperforming assets were $81.8 million and $67.2 million, or 1.27% and 1.09% of total assets, as of September 30, 2026 and June 30, 2026, respectively. Nonperforming assets included three large loans with an aggregate loan balance of $48.2 million. These nonaccrual loans primarily consist of multifamily real estate loans with collateral in Virginia and North Carolina. As of September 30, 2026, these loans had been partially charged-off by $3.9 million, reflecting updated, lower appraisals and carried specific reserves of $3.1 million. The decline in appraised values was driven by property-specific factors, including unanticipated capital investment requirements and financial stress among a tenant base disproportionately affected by inflation. Management believes these conditions are unique to the underlying properties and are not indicative of broader portfolio trends. When comparing September 30, 2026 to September 30, 2025, nonperforming assets increased $53.7 million, primarily due to an increase in nonaccrual loans of $43.8 million, and an increase in other real estate and repossessed marine and auto assets of $9.9 million. Substandard loans, which include nonaccrual loans and accruing loans 90 days or more past due, were $90.3 million at September 30, 2026 compared to $84.3 million at June 30, 2026 and $48.5 million at September 30, 2025.
Special mention loans decreased to $54.6 million at September 30, 2026 compared to $73.0 million at June 30, 2026 and compared to $71.0 million at September 30, 2025. As of September 30, 2026, there were three special mention loans with individual balances greater than $5.0 million, totaling $33.3 million. During the third quarter of 2026, the Company transferred a loan to nonperforming assets that was previously considered a special mention loan of $19.2 million. The remaining loans consist primarily of multifamily commercial real estate and other commercial real estate exposures.
The Bank's loan portfolio remains well positioned to benefit from higher interest rates through ongoing loan repricing. However, while interest rates remain elevated and the potential for additional rate increases persists, such conditions may place pressure on debt service capacity and liquidity for certain borrowers. Management continues to proactively engage with borrowers and, when appropriate may utilize prudent loan modifications to support repayment performance. In addition, the Bank routinely performs portfolio stress testing to evaluate the potential impact of varying interest rate and economic scenarios on borrower performance and overall credit quality. The Bank closely monitors portfolio performance and believes its disciplined underwriting standards, relationship-based lending approach, active credit oversight, and ongoing stress-testing practices provide a strong foundation for managing credit risk throughout changing interest rate environments.
Total deposits increased $296.6 million from June 30, 2026 to $5.70 billion at September 30, 2026 and increased $162.5 million when compared to December 31, 2025. The year-to-date increase in total deposits was primarily due to an increase in interest-bearing checking of $216.9 million and an increase in noninterest-bearing deposits of $29.3 million. These increases were partially offset by a decrease in money market and savings accounts of $56.9 million and a decrease in time deposits of $16.8 million. Core deposits, which exclude municipal and cannabis deposits, increased by $81.9 million, or 1.9%, during the same period.
Total funding, which includes customer deposits, Federal Home Loan Bank ("FHLB") advances and brokered deposits, was $5.70 billion at September 30, 2026, compared to $5.40 billion at June 30, 2026. The Company had no FHLB advances at September 30, 2026 and June 30, 2026. Brokered deposits were $803 thousand and $796 thousand at September 30, 2026 and June 30, 2026, respectively. Total reciprocal deposits were $1.59 billion and $1.33 billion at September 30, 2026 and June 30, 2026, respectively.
Uninsured deposits were $1.04 billion, or 18.3% of total deposits, at September 30, 2026. Uninsured deposits, excluding deposits secured with pledged collateral, were $877.1 million, or 15.4% of total deposits, at September 30, 2026. At September 30, 2026, available liquidity was $2.23 billion, including $912.7 million in secured borrowing capacity at the FHLB, $38.0 million in secured borrowing capacity through the FRB Discount Window, $444.7 million in unsecured lines of credit with other correspondent banks, $379.9 million in unpledged securities and $455.1 million in cash and cash equivalents.
Total stockholders' equity at September 30, 2026 increased $29.4 million, or 5.0%, when compared to December 31, 2025, primarily due to current year earnings, partially offset by cash dividends paid, share repurchase activity and an increase in accumulated other comprehensive losses. As of September 30, 2026 and 2025, the ratio of total equity to total assets was 9.60% and 9.19%, respectively. As of September 30, 2026, the ratio of total tangible equity to total tangible assets ([2]) was 8.36%, compared to 8.06% and 7.80% as of December 31, 2025 and September 30, 2025, respectively. The Company's Tier 1 and Total Risk-Based Capital Ratios at September 30, 2026 were 12.06% and 14.53%, respectively.
Review of Quarterly Financial Results
Net interest income was $55.1 million for the third quarter of 2026, compared to $52.9 million for the second quarter of 2026 and $48.4 million for the third quarter of 2025. The increase in net interest income when compared to the second quarter of 2026 was primarily due to an increase in interest on loans of $2.2 million, an increase in interest on deposits with other banks of $251 thousand, partially offset by an increase in interest expense on deposits of $393 thousand. The increase in net interest income was $6.7 million when compared to the third quarter of 2025, and was primarily due to a decrease in interest expense on deposits of $3.1 million, an increase in interest on loans of $2.0 million and a decrease in interest expense on short-term borrowings of $640 thousand. These favorable changes were partially offset by an increase in interest expense on long-term borrowings of $166 thousand.
The Company's NIM increased to 3.78% for the third quarter of 2026 from 3.70% for the second quarter of 2026, primarily due to higher interest income on loans and investment securities coupled with higher accelerated accretion related to loan payoffs. NIM excluding accretion increased for the comparable periods from 3.45% to 3.50%. Excluding accretion interest income, loan yields increased 4 bp and funding costs decreased 2 bps for the comparable periods. The Company's NIM increased to 3.78% for the third quarter of 2026 from 3.41% for the third quarter of 2025. The Company's average interest-earning asset yield increased to 5.47% for the third quarter of 2026 compared to 5.41% for the third quarter of 2025, while the average cost of funds decreased 29 bps to 1.80% from 2.09% for the same periods.
The provision for credit losses was $5.3 million for the three months ended September 30, 2026. The comparable amounts were $896 thousand for the three months ended June 30, 2026 and $3.0 million for the three months ended September 30, 2025. The increase in the provision for credit losses for the third quarter of 2026 compared to the second quarter of 2026 was due to higher multifamily loan-related charge-offs and specific reserves partially offset by favorable credit outlook. The allowance for credit losses increased to 1.21% of total loans at September 30, 2026 from 1.20% at June 30, 2026, and decreased compared to September 30, 2025. Net charge-offs increased to $4.8 million for the third quarter of 2026 compared to $123 thousand for the second quarter of 2026 and $1.8 million for the third quarter of 2025. The increase was driven by a partial multifamily loan write-off in the third quarter 2026.
Total noninterest income for the third quarter of 2026 was $7.7 million, a decrease of $1.2 million from the second quarter of 2026. The decrease in noninterest income was primarily related to lower banking revenue and fees for other bank services. Total noninterest income decreased $263 thousand during the third quarter of 2026 when compared to the third quarter of 2025 due to lower mortgage-related activity.
Total noninterest expense of $35.3 million for the third quarter of 2026 decreased $405 thousand compared to $35.7 million for the second quarter of 2026, and increased $884 thousand compared to $34.4 million for the third quarter of 2025. The decrease from the second quarter of 2026 was primarily due to a decrease in legal and professional fees of $474 thousand and a decrease in amortization of intangible assets of $234 thousand, partially offset by an increase in software and processing costs of $466 thousand. The increase from the third quarter of 2025 was primarily due to an increase in software and data processing costs of $646 thousand and an increase in other noninterest expense of $500 thousand. These were partially offset by a decrease in amortization of other intangible assets of $298 thousand.
The efficiency ratio for the third quarter of 2026 when compared to the second quarter of 2026 and the third quarter of 2025 was 56.15%, 57.76% and 61.00%, respectively. Adjusted efficiency ratios – non-GAAP ([3]) for the same periods were 53.30%, 54.49% and 57.30%, respectively.
Review of Nine Month Financial Results
Net interest income for the nine months ended September 30, 2026 was $160.6 million, an increase of $19.1 million, or 13.5%, when compared to the nine months ended September 30, 2025. The increase in net interest income was primarily due to an increase in total interest income of $6.5 million, or 2.8%, which included an increase in interest on loans of $6.1 million, or 2.9%, and an increase in interest income on taxable investments of $668 thousand. These were partially offset by a decrease in interest on deposits with other banks of $303 thousand, or 4.9%. The increase in interest on loans was primarily due to the increase in yields of 9 bps. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $11.4 million and lower interest on short-term borrowings of $1.8 million. These were partially offset by the increase in interest expense on long-term borrowings of $550 thousand. The decrease in short-term borrowings is due to lower FHLB borrowings and subordinated debt-related expenses that were classified as short-term borrowings in 2025.
The Company's NIM increased from 3.32% for the nine months ended September 30, 2025 to 3.71% for the nine months ended September 30, 2026. Margins were higher due to a $99.1 million increase in interest-earning asset balances and a 6 bp increase in interest-earning asset yields. These positive movements were coupled with a lower cost of interest-bearing deposits. The increase in the average balances of interest-bearing deposits of $31.7 million was offset by a 43 basis point decrease in the associated rates paid, as well as a $50.3 million decrease in the average balance of FHLB advances and a 103 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 28 basis points and 22 basis points for the nine months ended September 30, 2026 and 2025, respectively, which resulted in NIM excluding accretion of 3.43% and 3.10% for the same periods.
The provision for credit losses for the nine months ended September 30, 2026 and 2025 was $6.2 million and $5.5 million, respectively. The increase in the provision for credit losses during 2026 was due to higher net charge-offs. Net charge-offs for the nine months ended September 30, 2026 were $5.8 million, compared to $3.0 million for the nine months ended September 30, 2025. The increase was driven by a partial multifamily loan write-off in the third quarter 2026.
Total noninterest income for the nine months ended September 30, 2026 decreased $729 thousand, or 3.0%, when compared to the same period in 2025. The decrease was primarily due to a $1.4 million decrease in other noninterest income and a $737 thousand decrease in mortgage banking revenue, partially offset by a $692 thousand increase in trust and investment fee income and a $398 thousand increase in interchange credits. The decrease in other noninterest income is primarily due to valuation adjustments on equity securities and supplemental employee retirement plans.
Total noninterest expense for the nine months ended September 30, 2026 increased $5.5 million, or 5.3%, when compared to the same period in 2025. Noninterest expense line items increased primarily due to higher salaries and employee benefit expenses of $3.8 million and a $1.6 million increase in software and data processing expense. These increases were partially offset by lower amortization of intangible assets of $893 thousand during the nine months ended September 30, 2026.
The efficiency ratio for the nine months ended September 30, 2026 was 58.58% compared to 61.78% for the nine months ended September 30, 2025. Adjusted efficiency ratios – non-GAAP ([4]) for the same periods were 55.41% and 57.73%, respectively.
Shore Bancshares Information
Shore Bancshares is a financial holding company headquartered in Easton, Maryland and is the parent company of Shore United Bank, N.A. Shore Bancshares engages in trust and wealth management services through Wye Financial Partners, a division of Shore United Bank, N.A. Additional information is available at www.shorebancshares.com.
Forward-Looking Statements
This news release contains statements relating to future events or our future results that are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. We also may make forward-looking statements in other documents filed with or furnished to the Securities and Exchange Commission, and our senior management may make forward-looking statements orally to investors, analysts, representatives of the media, and others. Forward-looking statements may be identified by the use of words such as "believe," "expect," "anticipate," "plan," "estimate," "intend," "potential," "target," "goal," or words of similar meaning, or future or conditional verbs such as "could," "would," or "may." Forward-looking statements include statements of our goals, intentions, or expectations; statements regarding our business plans, prospects, growth, or operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.
Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. We caution that the forward-looking statements are based largely on our expectations and information available at the time the statements are made and are subject to known and unknown risks and uncertainties that are subject to change based on factors, which in many instances are beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements. You should bear this in mind when reading this news release and not place undue reliance on these forward-looking statements.
The factors that could cause actual results to differ materially from those expressed in such forward-looking statements include, but are not limited to, the risks identified in our Annual Report on Form 10-K for the year ended December 31, 2025, and in any subsequent filings with the Securities and Exchange Commission and the following: local, regional and global business, economic and political conditions and geopolitical events; changes in laws, rules and regulatory requirements, including capital and liquidity requirements; changes in consumer and business confidence, investor sentiment, and consumer spending and savings behavior; changes in the level of inflation; changes in monetary and fiscal policies; changes in trade policies, including the imposition of tariffs and retaliatory responses; changes in the demand for loans, deposits, and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; changes in FDIC assessments; changes in the interest rate environment; changes in income tax laws and regulations; our ability to manage effectively our capital and liquidity; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; changes in credit ratings assigned to us; competitive pressures among financial services companies; technology changes instituted by us, our counterparties, or competitors; the ability to attract, develop, and retain qualified employees; change in federal government enforcement of federal laws affecting the cannabis industry; our ability to maintain the security of our financial, accounting, technology, data processing and other operational systems and facilities; our ability to effectively defend ourselves against cyber-attacks and other attempts by unauthorized parties to access our information or information of our customers or to disrupt our systems; our ability to withstand disruptions that may be caused by any failure of our operational systems or those of third parties; our ability to control expenses; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; and the impact of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, epidemics or pandemics, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond our control.
Forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
(1) See the Reconciliation of GAAP and Non-GAAP Measures tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter and Year (Unaudited)
Q3 2026 vs.
Q3 2026 vs.
Nine Months Ended September 30,
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2026
Q3 2025
2026
2025
2026 vs. 2025
PROFITABILITY FOR THE PERIOD
Taxable-equivalent net interest income
$ 55,218
$ 53,005
$ 52,644
$ 50,294
$ 48,501
4.2 %
13.8 %
$ 160,867
$ 141,723
13.5 %
Less: Taxable-equivalent adjustment
91
86
89
92
83
5.8
9.6
266
244
9.0
Net interest income
55,127
52,919
52,555
50,202
48,418
4.2
13.9
160,601
141,479
13.5
Provision for credit losses
5,268
896
85
2,827
2,992
487.9
76.1
6,249
5,548
12.6
Noninterest income
7,675
8,830
7,244
8,906
7,938
(13.1)
(3.3)
23,749
24,478
(3.0)
Noninterest expense
35,263
35,668
37,056
35,499
34,379
(1.1)
2.6
107,987
102,536
5.3
Income before income taxes
22,271
25,185
22,658
20,782
18,985
(11.6)
17.3
70,114
57,873
21.2
Income tax expense
5,500
6,320
5,570
4,895
4,637
(13.0)
18.6
17,390
14,254
22.0
NET INCOME
$ 16,771
$ 18,865
$ 17,088
$ 15,887
$ 14,348
(11.1)
16.9
$ 52,724
$ 43,619
20.9
Adjusted net income – non-GAAP (1)
$ 18,082
$ 20,344
$ 18,581
$ 17,416
$ 15,889
(11.1) %
13.8 %
$ 57,007
$ 48,585
17.3 %
Pre-tax pre-provision income – non-GAAP (1)
27,539
26,081
22,743
23,609
21,977
5.6
25.3
76,363
63,421
20.4
Return on average assets – GAAP
1.08 %
1.24 %
1.12 %
1.02 %
0.95 %
(16) bp
13 bp
1.15 %
0.96 %
19 bp
Adjusted return on average assets – non-GAAP
1.16
1.34
1.22
1.11
1.05
(18)
11
1.24
1.07
17
Return on average common equity – GAAP
10.65
12.38
11.55
10.79
9.96
(173)
69
11.52
10.43
109
Return on average tangible common equity – non-GAAP (1)
13.37
15.66
14.83
14.10
13.27
(229)
10
14.60
14.09
51
Net interest spread
2.91
2.85
2.80
2.48
2.45
6
46
2.86
2.37
49
Net interest margin
3.78
3.70
3.64
3.43
3.41
8
37
3.71
3.32
39
Efficiency ratio – GAAP
56.15
57.76
61.97
60.06
61.00
(161)
(485)
58.58
61.78
(320)
Adjusted efficiency ratio – non-GAAP (1)
53.30
54.49
58.57
56.59
57.30
(119)
(400)
55.41
57.73
(232)
Noninterest income to average assets
0.49
0.58
0.48
0.57
0.52
(9)
(3)
0.52
0.54
(2)
Noninterest expense to average assets
2.26
2.35
2.43
2.27
2.27
(9)
(1)
2.35
2.26
9
PER SHARE DATA
Basic net income per common share
$ 0.50
$ 0.56
$ 0.51
$ 0.48
$ 0.43
(10.7) %
16.3 %
$ 1.58
$ 1.31
20.6 %
Diluted net income per common share
0.50
0.56
0.51
0.48
0.43
(10.7)
16.3
1.58
1.31
20.6
Dividends paid per common share
0.14
0.14
0.12
0.12
0.12
—
16.7
0.40
0.36
11.1
Book value per common share at period end
18.59
18.44
18.02
17.65
17.27
0.8
7.6
18.59
17.27
7.6
Tangible book value per common share at period end
– non-GAAP (1)
15.97
15.77
15.30
14.87
14.43
1.3
10.7
15.97
14.43
10.7
Common share market value at period end
22.39
22.95
18.68
17.68
16.41
(2.4)
36.4
22.39
16.41
36.4
Common share intraday price:
High
$ 24.89
$ 23.45
$ 20.68
$ 19.22
$ 17.67
6.1 %
40.9 %
$ 24.89
$ 17.67
40.9 %
Low
21.91
17.91
17.25
14.93
14.96
22.3
46.5
17.25
11.47
50.4
(1)
See the Reconciliation of GAAP and Non-GAAP Measures tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter And Year (Unaudited) – Continued
Q3 2026 vs.
Q3 2026 vs.
Nine Months Ended September 30,
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2026
Q3 2025
2026
2025
2026 vs. 2025
AVERAGE BALANCE SHEET DATA
Loans
$ 4,941,924
$ 4,872,566
$ 4,887,488
$ 4,909,619
$ 4,884,003
1.4 %
1.2 %
$ 4,900,859
$ 4,834,547
1.4 %
Investment securities
687,857
684,762
666,376
653,639
664,535
0.5
3.5
679,744
670,956
1.3
Earning assets
5,825,678
5,731,054
5,823,244
5,843,816
5,658,981
1.7
2.9
5,793,334
5,694,210
1.7
Assets
6,177,210
6,080,508
6,174,655
6,206,753
6,020,574
1.6
2.6
6,144,134
6,056,883
1.4
Deposits
5,416,072
5,332,544
5,438,914
5,452,082
5,280,252
1.6
2.6
5,395,759
5,331,498
1.2
FHLB advances
—
1,648
—
20,108
52,391
(100.0)
(100.0)
550
50,806
(98.9)
Subordinated debt & TRUPS
89,219
89,082
89,024
104,752
74,363
0.2
20.0
89,109
74,103
20.3
Stockholders' equity
624,644
611,320
600,212
584,209
571,247
2.2
9.3
612,148
559,301
9.4
CREDIT QUALITY DATA
Net charge-offs
$ 4,849
$ 123
$ 847
$ 3,619
$ 1,825
3842.3 %
165.7 %
$ 5,819
$ 3,028
92.2 %
Nonaccrual loans
$ 68,214
$ 64,818
$ 64,958
$ 39,960
$ 24,378
5.2 %
179.8 %
Loans 90 days past due and still accruing
80
20
—
255
153
300.0
(47.7)
Other real estate owned and repossessed property
13,475
2,362
3,414
2,992
3,552
470.5
279.4
Total nonperforming assets
$ 81,769
$ 67,200
$ 68,372
$ 43,207
$ 28,083
21.7
191.2
Shore Bancshares, Inc.
Financial Highlights By Quarter And Year (Unaudited) – Continued
Q3 2026 vs.
Q3 2026 vs.
Nine Months Ended September 30,
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2026
Q3 2025
2026
2025
2026 vs 2025
CAPITAL AND CREDIT QUALITY RATIOS
Period-end equity to assets – GAAP
9.60 %
10.02 %
9.71 %
9.42 %
9.19 %
(42) bp
41 bp
Period-end tangible equity to tangible assets – non-
GAAP (1)
8.36
8.69
8.37
8.06
7.80
(33)
56
Annualized net charge-offs to average loans
0.39 %
0.01 %
0.07 %
0.29 %
0.15 %
38 bp
24 bp
0.16 %
0.08 %
8 bp
Allowance for credit losses as a percent of:
Period-end loans
1.21 %
1.20 %
1.21 %
1.20 %
1.22 %
1 bp
(1) bp
Period-end nonaccrual loans
87.30 %
90.62 %
90.03 %
147.24 %
244.29 %
(332) bp
(15,699) bp
Period-end nonperforming assets
72.83 %
87.41 %
85.53 %
136.17 %
212.06 %
(1,458) bp
(13,923) bp
Nonaccrual loans as a percent of total loans
1.39 %
1.33 %
1.34 %
0.82 %
0.50 %
6 bp
89 bp
Nonperforming assets as a percent of total loans, other real
estate owned and repossessed property
1.66 %
1.38 %
1.41 %
0.88 %
0.57 %
28 bp
109 bp
Nonaccrual loans as a percent of total assets
1.06 %
1.05 %
1.05 %
0.64 %
0.39 %
1 bp
67 bp
Nonperforming assets as a percent of total assets
1.27 %
1.09 %
1.10 %
0.69 %
0.45 %
18 bp
82 bp
(1)
See the Reconciliation of GAAP and Non-GAAP Measures tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited) – Continued
Q3 2026 vs.
Q3 2026 vs.
($ in thousands)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2026
Q3 2025
Company Amounts
Common Equity Tier 1 Capital
$ 551,179
$ 541,577
$ 525,849
$ 510,729
$ 496,709
1.77 %
10.97 %
Tier 1 Capital
581,585
571,904
556,096
540,897
526,794
1.69
10.40
Total Capital
700,776
691,720
674,811
660,451
627,055
1.31
11.76
Risk-Weighted Assets
4,822,726
4,882,618
4,794,374
4,852,573
4,867,237
(1.23)
(0.91)
Company Ratios
Common Equity Tier 1 Capital to Risk-Weighted Assets ("RWA")
11.43 %
11.09 %
10.97 %
10.52 %
10.21 %
34 bp
122 bp
Tier 1 Capital to RWA
12.06
11.71
11.60
11.15
10.82
35
124
Total Capital to RWA
14.53
14.17
14.08
13.61
12.88
36
165
Tier 1 Capital to AA (Leverage)
9.52
9.52
9.12
8.82
8.86
—
66
Bank Amounts
Common Equity Tier 1 Capital
$ 609,420
$ 600,541
$ 583,733
$ 569,183
$ 559,212
1.48 %
8.98 %
Tier 1 Capital
609,420
600,541
583,733
569,183
559,212
1.48
8.98
Total Capital
669,663
661,531
643,627
629,746
620,034
1.23
8.00
Risk-Weighted Assets
4,818,352
4,879,247
4,791,223
4,844,639
4,864,871
(1.25)
(0.96)
Bank Ratios
Common Equity Tier 1 Capital to RWA
12.65 %
12.31 %
12.18 %
11.75 %
11.49 %
34 bp
116 bp
Tier 1 Capital to RWA
12.65
12.31
12.18
11.75
11.49
34
116
Total Capital to RWA
13.90
13.56
13.43
13.00
12.75
34
115
Tier 1 Capital to AA (Leverage)
9.99
10.00
9.58
9.30
9.41
(1)
58
Shore Bancshares, Inc.
Consolidated Balance Sheets
September 30,
2026
September 30,
2026
compared to
compared to
($ in thousands, except per share data)
September 30, 2026
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
June 30,
2026
September 30,
2025
ASSETS
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Cash and due from banks
$ 58,235
$ 53,335
$ 44,054
$ 50,164
$ 62,289
9.2 %
(6.5) %
Interest-bearing deposits with other banks
396,816
204,335
296,768
305,402
354,224
94.2
12.0
Cash and cash equivalents
455,051
257,670
340,822
355,566
416,513
76.6
9.3
Investment securities:
Available for sale, at fair value
380,838
287,369
264,026
220,358
181,720
32.5
109.6
Held to maturity, net of allowance for credit
losses
356,183
366,213
393,615
414,827
433,440
(2.7)
(17.8)
Equity securities, at fair value
6,031
6,218
6,195
6,186
6,113
(3.0)
(1.3)
Restricted securities, at cost
18,003
18,003
18,003
17,989
20,364
—
(11.6)
Loans held for sale, at fair value
14,865
30,827
24,034
32,540
21,500
(51.8)
(30.9)
Loans held for investment
4,902,662
4,877,749
4,848,030
4,900,302
4,882,969
0.5
0.4
Less: allowance for credit losses
(59,554)
(58,737)
(58,481)
(58,836)
(59,554)
1.4
—
Loans, net
4,843,108
4,819,012
4,789,549
4,841,466
4,823,415
0.5
0.4
Premises and equipment, net
79,048
79,580
80,137
80,168
80,812
(0.7)
(2.2)
Goodwill
63,266
63,266
63,266
63,266
63,266
—
—
Other intangible assets, net
24,026
25,767
27,742
29,722
31,722
(6.8)
(24.3)
Right-of-use assets
9,322
9,691
10,102
10,523
10,896
(3.8)
(14.4)
Cash surrender value on life insurance
107,162
107,724
106,684
105,839
105,055
(0.5)
2.0
Accrued interest receivable
20,891
20,021
20,676
18,551
20,408
4.3
2.4
Deferred income taxes
32,587
30,657
29,752
29,825
30,328
6.3
7.4
Other assets
43,979
29,413
31,460
31,992
32,927
49.5
33.6
TOTAL ASSETS
$ 6,454,360
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
4.9
2.8
Shore Bancshares, Inc.
Consolidated Balance Sheets – Continued
September 30,
2026
September 30,
2026
compared to
compared to
($ in thousands, except per share data)
September 30, 2026
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
June 30,
2026
September 30,
2025
LIABILITIES
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Deposits:
Noninterest-bearing
$ 1,617,258
$ 1,606,809
$ 1,567,425
$ 1,587,953
$ 1,594,212
0.7 %
1.4 %
Interest-bearing checking
1,069,480
833,602
812,847
852,585
851,963
28.3
25.5
Money market and savings
1,758,063
1,710,570
1,795,619
1,814,928
1,790,001
2.8
(1.8)
Time deposits
1,250,723
1,247,973
1,274,766
1,267,487
1,281,132
0.2
(2.4)
Brokered deposits
803
796
10,963
10,911
10,857
0.9
(92.6)
Total deposits
5,696,327
5,399,750
5,461,620
5,533,864
5,528,165
5.5
3.0
FHLB advances
—
—
—
—
50,000
—
(100.0)
Guaranteed preferred beneficial interest in
junior subordinated debentures ("TRUPS"), net
30,406
30,327
30,247
30,168
30,085
0.3
1.1
Subordinated debt, net
58,893
58,825
58,782
58,893
44,409
0.1
32.6
Total borrowings
89,299
89,152
89,029
89,061
124,494
0.2
(28.3)
Lease liabilities
9,829
10,199
10,608
11,027
11,395
(3.6)
(13.7)
Other liabilities
39,606
36,255
42,092
34,993
37,218
9.2
6.4
TOTAL LIABILITIES
5,835,061
5,535,356
5,603,349
5,668,945
5,701,272
5.4
2.3
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value per share
333
334
335
334
334
(0.3)
(0.3)
Additional paid-in capital
357,207
361,048
361,013
360,554
359,939
(1.1)
(0.8)
Retained earnings
272,851
260,782
246,636
233,578
221,693
4.6
23.1
Accumulated other comprehensive loss
(11,092)
(6,089)
(5,270)
(4,593)
(4,759)
82.2
133.1
TOTAL STOCKHOLDERS' EQUITY
619,299
616,075
602,714
589,873
577,207
0.5
7.3
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$ 6,454,360
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
4.9
2.8
Shares of common stock issued and outstanding
33,305,321
33,416,336
33,451,063
33,413,503
33,421,672
(0.3) %
(0.3) %
Book value per common share at period end
$ 18.59
$ 18.44
$ 18.02
$ 17.65
$ 17.27
0.8
7.6
Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter and Year (Unaudited)
Q3 2026 vs.
Q3 2026 vs.
Nine Months Ended September 30,
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2026
Q3 2025
2026
2025
% Change
INTEREST INCOME
Interest on loans
$ 72,655
$ 70,456
$ 70,814
$ 72,092
$ 70,693
3.1 %
2.8 %
$ 213,925
$ 207,816
2.9 %
Interest and dividends on taxable investment
securities
5,535
5,387
5,114
5,010
5,036
2.7
9.9
16,036
15,368
4.3
Interest and dividends on tax-exempt investment
securities
6
6
6
6
6
—
—
18
18
—
Interest on deposits with other banks
1,851
1,600
2,458
2,810
1,215
15.7
52.3
5,909
6,212
(4.9)
Total interest income
80,047
77,449
78,392
79,918
76,950
3.4
4.0
235,888
229,414
2.8
INTEREST EXPENSE
Interest on deposits
23,336
22,943
24,264
27,289
26,474
1.7
(11.9)
70,543
81,914
(13.9)
Interest on short-term borrowings
—
16
—
246
640
(100.0)
(100.0)
16
1,843
(99.1)
Interest on long-term borrowings
1,584
1,571
1,573
2,181
1,418
0.8
11.7
4,728
4,178
13.2
Total interest expense
24,920
24,530
25,837
29,716
28,532
1.6
(12.7)
75,287
87,935
(14.4)
NET INTEREST INCOME
55,127
52,919
52,555
50,202
48,418
4.2
13.9
160,601
141,479
13.5
Provision for credit losses
5,268
896
85
2,827
2,992
487.9
76.1
6,249
5,548
12.6
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES
49,859
52,023
52,470
47,375
45,426
(4.2)
9.8
154,352
135,931
13.6
NONINTEREST INCOME
Service charges on deposit accounts
1,731
1,651
1,596
1,663
1,599
4.8
8.3
4,978
4,632
7.5
Trust and investment fee income
1,115
1,103
1,137
1,042
898
1.1
24.2
3,355
2,663
26.0
Mortgage banking revenue
1,156
1,554
1,450
1,181
1,278
(25.6)
(9.5)
4,160
4,897
(15.1)
Interchange credits
1,963
1,960
1,698
1,862
1,858
0.2
5.7
5,621
5,223
7.6
Other noninterest income
1,710
2,562
1,363
3,158
2,305
(33.3)
(25.8)
5,635
7,063
(20.2)
Total noninterest income
$ 7,675
$ 8,830
$ 7,244
$ 8,906
$ 7,938
(13.1)
(3.3)
$ 23,749
$ 24,478
(3.0)
Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter and Year (Unaudited) – Continued
Q3 2026 vs.
Q3 2026 vs.
Nine Months Ended September 30,
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2026
Q3 2025
2026
2025
% Change
NONINTEREST EXPENSE
Salaries and employee benefits
$ 18,475
$ 18,462
$ 19,639
$ 18,582
$ 18,642
0.1 %
(0.9) %
$ 56,576
$ 52,824
7.1 %
Occupancy expense
2,366
2,495
2,567
2,461
2,406
(5.2)
(1.7)
7,428
7,416
0.2
Furniture and equipment expense
971
966
855
792
892
0.5
8.9
2,792
2,542
9.8
Software and data processing
5,801
5,335
5,140
5,197
5,155
8.7
12.5
16,276
14,665
11.0
Amortization of other intangible assets
1,741
1,975
1,980
2,000
2,039
(11.8)
(14.6)
5,696
6,589
(13.6)
Legal and professional fees
881
1,355
1,605
1,237
989
(35.0)
(10.9)
3,841
3,827
0.4
FDIC insurance premium expense
805
968
995
845
794
(16.8)
1.4
2,768
2,908
(4.8)
Marketing and advertising
376
275
311
367
315
36.7
19.4
962
953
0.9
Fraud losses
245
147
111
227
45
66.7
444.4
503
233
115.9
Other noninterest expense
3,602
3,690
3,853
3,791
3,102
(2.4)
16.1
11,145
10,579
5.4
Total noninterest expense
35,263
35,668
37,056
35,499
34,379
(1.1)
2.6
107,987
102,536
5.3
Income before income taxes
22,271
25,185
22,658
20,782
18,985
(11.6)
17.3
70,114
57,873
21.2
Income tax expense
5,500
6,320
5,570
4,895
4,637
(13.0)
18.6
17,390
14,254
22.0
NET INCOME
$ 16,771
$ 18,865
$ 17,088
$ 15,887
$ 14,348
(11.1)
16.9
$ 52,724
$ 43,619
20.9
Weighted average shares outstanding – basic
33,382,278
33,451,484
33,428,444
33,426,198
33,419,291
(0.2) %
(0.1) %
33,420,566
33,381,568
0.1 %
Weighted average shares outstanding – diluted
33,417,440
33,478,698
33,447,767
33,446,103
33,435,862
(0.2) %
(0.1) %
33,444,164
33,392,298
0.2 %
Basic net income per common share
$ 0.50
$ 0.56
$ 0.51
$ 0.48
$ 0.43
(10.7) %
16.3 %
$ 1.58
$ 1.31
20.6 %
Diluted net income per common share
$ 0.50
$ 0.56
$ 0.51
$ 0.48
$ 0.43
(10.7) %
16.3 %
$ 1.58
$ 1.31
20.6 %
Dividends paid per common share
$ 0.14
$ 0.14
$ 0.12
$ 0.12
$ 0.12
— %
16.7 %
$ 0.40
$ 0.36
11.1 %
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited)
Three Months Ended
September 30, 2026
June 30, 2026
September 30, 2025
($ in thousands)
Average
Balance
Interest
Yield/Rate
Average
Balance
Interest
Yield/Rate
Average
Balance
Interest
Yield/Rate
Earning assets
Loans (1), (2), (3)
Commercial real estate
$ 2,618,370
$ 38,804
5.88 %
$ 2,586,937
$ 38,169
5.92 %
$ 2,615,409
$ 37,917
5.75 %
Residential real estate
1,515,040
21,674
5.72
1,484,165
20,276
5.46
1,407,076
19,671
5.59
Construction
341,366
5,548
6.45
338,695
5,454
6.46
347,574
5,848
6.68
Commercial
224,741
3,253
5.74
208,349
3,041
5.85
219,002
3,370
6.10
Consumer
239,114
3,372
5.59
250,295
3,491
5.59
289,729
3,858
5.28
Credit cards
3,293
93
11.17
4,125
110
10.69
5,213
110
8.36
Total loans
4,941,924
72,744
5.85
4,872,566
70,541
5.80
4,884,003
70,774
5.76
Investment securities
Taxable
687,213
5,535
3.22
684,116
5,387
3.15
663,884
5,036
3.03
Tax-exempt (1)
644
8
4.97
646
7
4.33
651
8
4.92
Interest-bearing deposits
195,897
1,851
3.75
173,726
1,600
3.69
110,443
1,215
4.36
Total earning assets
5,825,678
80,138
5.47
5,731,054
77,535
5.42
5,658,981
77,033
5.41
Cash and due from banks
48,015
43,885
49,405
Other assets
362,218
364,155
370,952
Allowance for credit losses
(58,701)
(58,586)
(58,764)
Total assets
$ 6,177,210
$ 6,080,508
$ 6,020,574
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Three Months Ended
September 30, 2026
June 30, 2026
September 30, 2025
($ in thousands)
Average
Balance
Interest
Yield/Rate
Average
Balance
Interest
Yield/Rate
Average
Balance
Interest
Yield/Rate
Interest-bearing liabilities
Interest-bearing checking
$ 792,764
$ 5,056
2.53 %
$ 733,877
$ 4,560
2.49 %
$ 689,906
$ 5,157
2.97 %
Money market and savings deposits
1,738,159
8,334
1.90
1,744,356
8,079
1.86
1,714,161
9,277
2.15
Time deposits
1,245,785
9,938
3.16
1,258,086
10,288
3.28
1,277,403
11,935
3.71
Brokered deposits
798
8
4.01
4,033
16
1.59
10,891
105
3.83
Interest-bearing deposits (4)
3,777,506
23,336
2.45
3,740,352
22,943
2.46
3,692,361
26,474
2.84
FHLB advances
—
—
—
1,648
16
3.88
52,391
640
4.85
Subordinated debt and guaranteed
preferred beneficial interest in junior
subordinated debentures ("TRUPS") (4)
89,219
1,584
7.04
89,082
1,571
7.07
74,363
1,418
7.57
Total interest-bearing liabilities
3,866,725
24,920
2.56
3,831,082
24,530
2.57
3,819,115
28,532
2.96
Noninterest-bearing deposits
1,638,566
1,592,192
1,587,891
Accrued expenses and other liabilities
47,275
45,914
42,321
Stockholders' equity
624,644
611,320
571,247
Total liabilities and stockholders'
equity
$ 6,177,210
$ 6,080,508
$ 6,020,574
Net interest spread
2.91 %
2.85 %
2.45 %
Net interest margin
3.78
3.70
3.41
Net interest margin excluding
accretion (3)
3.50
3.45
3.22
Cost of funds
1.80
1.81
2.09
Cost of deposits
1.71
1.73
1.99
Cost of debt
7.04
7.02
6.44
(1)
All amounts are reported on a taxable-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of nondeductible interest expense.
(2)
Average loan balances include nonaccrual loans.
(3)
Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $4.1 million, $3.8 million and $3.3 million of accretion interest on loans for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively.
(4)
Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were zero, zero and $280 thousand of amortization of deposit discounts and $79 thousand, $79 thousand and $232 thousand of amortization of borrowing fair value adjustments for the three months ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Nine Months Ended September 30,
2026
2025
($ in thousands)
Average Balance
Interest
Yield/Rate
Average Balance
Interest
Yield/Rate
Earning assets
Loans (1), (2), (3)
Commercial real estate
$ 2,602,270
$ 116,002
5.96 %
$ 2,576,893
$ 110,983
5.76 %
Residential real estate
1,483,344
61,261
5.51
1,377,904
57,063
5.52
Construction
342,654
16,633
6.49
350,883
17,069
6.50
Commercial
218,223
9,590
5.88
225,322
10,719
6.36
Consumer
250,443
10,397
5.55
297,543
11,917
5.35
Credit cards
3,925
303
10.31
6,002
304
6.76
Total loans
4,900,859
214,186
5.84
4,834,547
208,055
5.75
Investment securities
Taxable
679,098
16,036
3.15
670,304
15,368
3.06
Tax-exempt (1)
646
23
4.80
652
23
4.75
Interest-bearing deposits
212,731
5,909
3.71
188,707
6,212
4.40
Total earning assets
5,793,334
236,154
5.45
5,694,210
229,658
5.39
Cash and due from banks
45,375
47,752
Other assets
364,101
373,398
Allowance for credit losses
(58,676)
(58,477)
Total assets
$ 6,144,134
$ 6,056,883
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Nine Months Ended September 30,
2026
2025
($ in thousands)
Average Balance
Interest
Yield/Rate
Average Balance
Interest
Yield/Rate
Interest-bearing liabilities
Interest-bearing checking
$ 769,162
$ 14,456
2.51 %
$ 756,235
$ 17,879
3.16 %
Money market and savings deposits
1,764,592
25,109
1.90
1,753,594
28,872
2.20
Time deposits
1,257,918
30,850
3.28
1,248,405
34,966
3.74
Brokered deposits
5,215
128
3.28
6,911
197
3.81
Interest-bearing deposits (4)
3,796,887
70,543
2.48
3,765,145
81,914
2.91
FHLB advances
550
16
3.82
50,806
1,843
4.85
Subordinated debt and TRUPS (4)
89,109
4,728
7.09
74,103
4,178
7.54
Total interest-bearing liabilities
3,886,546
75,287
2.59
3,890,054
87,935
3.02
Noninterest-bearing deposits
1,598,872
1,566,353
Accrued expenses and other liabilities
46,568
41,175
Stockholders' equity
612,148
559,301
Total liabilities and stockholders' equity
$ 6,144,134
$ 6,056,883
Net interest spread
2.86 %
2.37 %
Net interest margin
3.71
3.32
Net interest margin excluding accretion (3)
3.43
3.10
Cost of funds
1.84
2.15
Cost of deposits
1.75
2.05
Cost of debt
7.07
6.44
(1)
All amounts are reported on a taxable-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of nondeductible interest expense.
(2)
Average loan balances include nonaccrual loans.
(3)
Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $12.2 million and $11.3 million of accretion interest on loans for the nine months ended September 30, 2026 and 2025, respectively.
(4)
Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were zero and $1.0 million of amortization of deposit discounts and $238 thousand and $695 thousand of amortization of borrowing fair value adjustments for the nine months ended September 30, 2026 and 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited)
Nine Months Ended September 30,
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
2026
2025
The following reconciles return on average assets, average equity and return on average tangible common equity (1) :
Net income
$ 16,771
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 52,724
$ 43,619
Annualized net income (A)
$ 66,537
$ 75,667
$ 69,301
$ 63,030
$ 56,924
$ 70,492
$ 58,318
Net income
$ 16,771
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 52,724
$ 43,619
Add: amortization of other intangible assets, net of tax
1,311
1,479
1,493
1,529
1,541
4,283
4,966
Net income excluding amortization of other intangible assets
– non-GAAP
18,082
20,344
18,581
17,416
15,889
57,007
48,585
Annualized net income excluding amortization of other
intangible assets – non-GAAP (B)
$ 71,738
$ 81,600
$ 75,356
$ 69,096
$ 63,038
$ 76,218
$ 64,958
Net income
$ 16,771
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 52,724
$ 43,619
Add: amortization of other intangible assets, net of tax
1,311
1,479
1,493
1,529
1,541
4,283
4,966
Adjusted net income – non-GAAP
18,082
20,344
18,581
17,416
15,889
57,007
48,585
Annualized adjusted net income – non-GAAP (C)
$ 71,738
$ 81,600
$ 75,356
$ 69,096
$ 63,038
$ 76,218
$ 64,958
Net income
$ 16,771
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 52,724
$ 43,619
Less: income tax expense
5,500
6,320
5,570
4,895
4,637
17,390
14,254
Less: provision for credit losses
5,268
896
85
2,827
2,992
6,249
5,548
Pre-tax pre-provision income – non-GAAP
$ 27,539
$ 26,081
$ 22,743
$ 23,609
$ 21,977
$ 76,363
$ 63,421
Return on average assets – GAAP
1.08 %
1.24 %
1.12 %
1.02 %
0.95 %
1.15 %
0.96 %
Adjusted return on average assets – non-GAAP
1.16 %
1.34 %
1.22 %
1.11 %
1.05 %
1.24 %
1.07 %
Average assets
$ 6,177,210
$ 6,080,508
$ 6,174,655
$ 6,206,753
$ 6,020,574
$ 6,144,134
$ 6,056,883
Average stockholders' equity (D)
$ 624,644
$ 611,320
$ 600,212
$ 584,209
$ 571,247
$ 612,148
$ 559,301
Less: average goodwill and core deposit intangible
(88,226)
(90,088)
(92,086)
(94,059)
(96,074)
(90,119)
(98,260)
Average tangible common equity (E)
$ 536,418
$ 521,232
$ 508,126
$ 490,150
$ 475,173
$ 522,029
$ 461,041
Return on average common equity – GAAP (A)/(D)
10.65 %
12.38 %
11.55 %
10.79 %
9.96 %
11.52 %
10.43 %
Return on average tangible common equity – non-GAAP
(B)/(E)
13.37 %
15.66 %
14.83 %
14.10 %
13.27 %
14.60 %
14.09 %
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Nine Months Ended September 30,
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
2026
2025
The following reconciles efficiency ratio – GAAP and adjusted efficiency ratio – non-GAAP (2), and reconciles net interest margin – GAAP and net interest margin – non-GAAP(3):
Noninterest expense (F)
$ 35,263
$ 35,668
$ 37,056
$ 35,499
$ 34,379
$ 107,987
$ 102,536
Less: amortization of other intangible assets
(1,741)
(1,975)
(1,980)
(2,000)
(2,039)
(5,696)
(6,589)
Adjusted noninterest expense (G)
$ 33,522
$ 33,693
$ 35,076
$ 33,499
$ 32,340
$ 102,291
$ 95,947
Net interest income (H)
$ 55,127
$ 52,919
$ 52,555
$ 50,202
$ 48,418
$ 160,601
$ 141,479
Add: taxable-equivalent adjustment
91
86
89
92
83
266
244
Taxable-equivalent net interest income (I)
55,218
53,005
52,644
50,294
48,501
160,867
141,723
Less: accretion interest income
(4,008)
(3,688)
(4,263)
(2,752)
(2,811)
(11,958)
(9,542)
Adjusted net interest income (J)
$ 51,210
$ 49,317
$ 48,381
$ 47,542
$ 45,690
$ 148,909
$ 132,181
Noninterest income (K)
$ 7,675
$ 8,830
$ 7,244
$ 8,906
$ 7,938
$ 23,749
$ 24,478
Adjusted noninterest income (L)
$ 7,675
$ 8,830
$ 7,244
$ 8,906
$ 7,938
$ 23,749
$ 24,478
Total earning assets (M)
$ 5,825,678
$ 5,731,054
$ 5,823,244
$ 5,843,816
$ 5,658,981
$ 5,793,334
$ 5,694,210
Efficiency ratio – GAAP (F)/(H)+(K)
56.15 %
57.76 %
61.97 %
60.06 %
61.00 %
58.58 %
61.78 %
Adjusted efficiency ratio – non-GAAP (G)/(I)+(L)
53.30 %
54.49 %
58.57 %
56.59 %
57.30 %
55.41 %
57.73 %
Net interest margin – GAAP (I)/(M)
3.78 %
3.70 %
3.64 %
3.43 %
3.41 %
3.71 %
3.32 %
Net interest margin excluding accretion – non-GAAP
(J)/(M) (3)
3.50 %
3.45 %
3.35 %
3.24 %
3.22 %
3.43 %
3.10 %
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
($ in thousands, except per share data)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
The following reconciles book value per common share and tangible book value per common share (1) :
Stockholders' equity (N)
$ 619,299
$ 616,075
$ 602,714
$ 589,873
$ 577,207
Less: goodwill and core deposit intangible
(87,292)
(89,033)
(91,008)
(92,988)
(94,988)
Tangible common equity (O)
$ 532,007
$ 527,042
$ 511,706
$ 496,885
$ 482,219
Shares of common stock outstanding (P)
33,305,321
33,416,336
33,451,063
33,413,503
33,421,672
Book value per common share – GAAP (N)/(P)
$ 18.59
$ 18.44
$ 18.02
$ 17.65
$ 17.27
Tangible book value per common share – non-GAAP (O)/(P)
$ 15.97
$ 15.77
$ 15.30
$ 14.87
$ 14.43
The following reconciles equity to assets and tangible common equity to tangible assets (1) :
Stockholders' equity (Q)
$ 619,299
$ 616,075
$ 602,714
$ 589,873
$ 577,207
Less: goodwill and core deposit intangible
(87,292)
(89,033)
(91,008)
(92,988)
(94,988)
Tangible common equity (R)
$ 532,007
$ 527,042
$ 511,706
$ 496,885
$ 482,219
Assets (S)
$ 6,454,360
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
Less: goodwill and core deposit intangible
(87,292)
(89,033)
(91,008)
(92,988)
(94,988)
Tangible assets (T)
$ 6,367,068
$ 6,062,398
$ 6,115,055
$ 6,165,830
$ 6,183,491
Period-end equity to assets – GAAP (Q)/(S)
9.60 %
10.02 %
9.71 %
9.42 %
9.19 %
Period-end tangible common equity to tangible assets – non-GAAP (R)/(T)
8.36 %
8.69 %
8.37 %
8.06 %
7.80 %
(1)
Management believes that reporting the non-GAAP measures of tangible common equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes.
(2)
Management believes that reporting adjusted efficiency ratio – non-GAAP more closely measures its effectiveness of controlling cash-based operating activities.
(3)
Management believes that reporting net interest margin excluding accretion more closely represents the ongoing earning power of the Company's core loan portfolio.
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Regulatory Capital and Ratios for the Company
($ in thousands)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Common equity
$ 619,299
$ 616,075
$ 602,714
$ 589,873
$ 577,207
Goodwill (1)
(60,938)
(61,000)
(61,061)
(61,123)
(61,176)
Core deposit intangible (2)
(18,274)
(19,587)
(21,074)
(22,566)
(24,041)
DTAs that arise from net operating loss and tax credit carryforwards
—
—
—
(48)
(40)
Accumulated other comprehensive loss
11,092
6,089
5,270
4,593
4,759
Common Equity Tier 1 Capital
551,179
541,577
525,849
510,729
496,709
TRUPS
30,406
30,327
30,247
30,168
30,085
Tier 1 Capital
581,585
571,904
556,096
540,897
526,794
Allowable reserve for credit losses and other Tier 2 adjustments
60,298
60,991
59,933
60,661
60,852
Subordinated debt
58,893
58,825
58,782
58,893
39,409
Total Capital
$ 700,776
$ 691,720
$ 674,811
$ 660,451
$ 627,055
Risk-Weighted Assets ("RWA")
$ 4,822,726
$ 4,882,618
$ 4,794,374
$ 4,852,573
$ 4,867,237
Average Assets ("AA")
6,107,556
6,007,717
6,098,196
6,129,306
5,942,911
Common Equity Tier 1 Capital to RWA
11.43 %
11.09 %
10.97 %
10.52 %
10.21 %
Tier 1 Capital to RWA
12.06
11.71
11.60
11.15
10.82
Total Capital to RWA
14.53
14.17
14.08
13.61
12.88
Tier 1 Capital to AA (Leverage)
9.52
9.52
9.12
8.82
8.86
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Regulatory Capital and Ratios for the Bank
($ in thousands)
Q3 2026
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Common equity
$ 677,540
$ 675,039
$ 660,598
$ 648,279
$ 639,670
Goodwill (1)
(60,938)
(61,000)
(61,061)
(61,123)
(61,176)
Core deposit intangible (2)
(18,274)
(19,587)
(21,074)
(22,566)
(24,041)
Accumulated other comprehensive loss
11,092
6,089
5,270
4,593
4,759
Common Equity Tier 1 Capital
609,420
600,541
583,733
569,183
559,212
Tier 1 Capital
609,420
600,541
583,733
569,183
559,212
Allowable reserve for credit losses and other Tier 2 adjustments
60,243
60,990
59,894
60,563
60,822
Total Capital
$ 669,663
$ 661,531
$ 643,627
$ 629,746
$ 620,034
Risk-Weighted Assets ("RWA")
$ 4,818,352
$ 4,879,247
$ 4,791,223
$ 4,844,639
$ 4,864,871
Average Assets ("AA")
6,102,777
6,002,596
6,093,905
6,122,775
5,939,890
(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)
September 30,
2026
% of Total
Loans
June 30,
2026
% of Total
Loans
March 31,
2026
% of Total
Loans
December 31,
2025
% of Total
Loans
September 30,
2025
% of Total
Loans
Commercial real estate
$ 2,581,473
52.66 %
$ 2,603,014
53.37 %
$ 2,599,815
53.62 %
$ 2,643,996
53.95 %
$ 2,642,601
54.12 %
Residential real estate
1,498,469
30.56
1,470,401
30.15
1,425,733
29.41
1,414,964
28.88
1,383,348
28.33
Construction
352,073
7.18
337,779
6.92
342,835
7.07
344,903
7.04
352,116
7.21
Commercial
236,276
4.82
220,712
4.52
220,833
4.56
226,006
4.61
221,598
4.54
Consumer
231,703
4.73
241,751
4.96
254,478
5.25
265,912
5.43
278,242
5.70
Credit cards
2,668
0.05
4,092
0.08
4,336
0.09
4,521
0.09
5,064
0.10
Total loans
4,902,662
100.00 %
4,877,749
100.00 %
4,848,030
100.00 %
4,900,302
100.00 %
4,882,969
100.00 %
Less: allowance for
credit losses
(59,554)
(58,737)
(58,481)
(58,836)
(59,554)
Total loans, net
$ 4,843,108
$ 4,819,012
$ 4,789,549
$ 4,841,466
$ 4,823,415
Shore Bancshares, Inc.
Classified Assets and Nonperforming Assets (Unaudited)
Classified assets and nonperforming assets are summarized as follows:
($ in thousands)
September 30, 2026
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
Substandard
$ 90,301
$ 84,285
$ 82,337
$ 57,366
$ 48,470
Total classified loans
90,301
84,285
82,337
57,366
48,470
Special mention loans
54,648
72,957
97,771
73,401
70,997
Total classified and special mention loans
$ 144,949
$ 157,242
$ 180,108
$ 130,767
$ 119,467
Classified loans
$ 90,301
$ 84,285
$ 82,337
$ 57,366
$ 48,470
Other real estate owned
10,781
—
69
113
120
Repossessed assets
2,694
2,362
3,345
2,879
3,432
Total classified assets
$ 103,776
$ 86,647
$ 85,751
$ 60,358
$ 52,022
Nonaccrual loans
$ 68,214
$ 64,818
$ 64,958
$ 39,960
$ 24,378
Loans 90 days or more past due and still accruing
80
20
—
255
153
Other real estate owned
10,781
—
69
113
120
Repossessed assets
2,694
2,362
3,345
2,879
3,432
Total nonperforming assets
$ 81,769
$ 67,200
$ 68,372
$ 43,207
$ 28,083
Accruing borrowers experiencing financial difficulty loans
("BEFD")
107
140
5,263
5,311
6,704
Total nonperforming assets and BEFD modifications
$ 81,876
$ 67,340
$ 73,635
$ 48,518
$ 34,787
Total assets
$ 6,454,360
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
Classified assets to total assets
1.61 %
1.41 %
1.38 %
0.96 %
0.83 %
Nonperforming assets to total assets
1.27 %
1.09 %
1.10 %
0.69 %
0.45 %
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SOURCE Shore Bancshares, Inc.