Press release
July 23, 2026
Shore Bancshares, Inc. Reports 2026 Second Quarter Results
Shore Bancshares Inc (SHBI)
Shore Bancshares, Inc. Reports 2026 Second Quarter Results
, /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 second quarter of 2026 of $18.9 million, or $0.56 per diluted common share, compared to net income of $17.1 million, or $0.51 per diluted common share, for the first quarter of 2026, and net income of $15.5 million, or $0.46 per diluted common share, for the second quarter of 2025.
Second Quarter 2026 Highlights
Net Income – Net income for the second quarter of 2026 increased $1.8 million to $18.9 million, from $17.1 million in the first quarter of 2026. Net income increased primarily due to a decrease in interest expense of $1.3 million, an increase in other noninterest income of $1.2 million and a decrease in salaries and employee benefits of $1.2 million. These increases were partially offset by a decrease in interest on deposits with other banks of $858 thousand and a higher provision for credit losses of $811 thousand. Net income for the six months ended June 30, 2026 was $36.0 million, compared to $29.3 million for the six months ended June 30, 2025.Return on Average Assets ("ROAA") – The Company reported ROAA of 1.24% for the second quarter of 2026, compared to 1.12% for the first quarter of 2026 and 1.03% for the second quarter of 2025. Adjusted ROAA – non-U.S. generally accepted accounting principles ("GAAP")(1) was 1.34% for the second quarter of 2026, compared to 1.22% for the first quarter of 2026 and 1.15% for the second quarter of 2025.Net Interest Margin ("NIM") – Net interest income for the second quarter of 2026 increased $364 thousand to $52.9 million compared to the first quarter of 2026. NIM increased 6 basis points ("bps") to 3.70% during the second quarter of 2026 compared to the first quarter of 2026. NIM excluding accretion(1) increased for the comparable periods from 3.35% to 3.45%. Excluding accretion interest, loan yields decreased 1 bp and funding costs decreased 8 bps for the comparable periods. Net interest income increased due to elevated accretion income and interest recoveries from loan payoffs coupled with a lower cost of deposits.Capital Management – Book value per share increased to $18.44 at June 30, 2026 from $18.02 at March 31, 2026 and $16.94 at June 30, 2025. During the quarter ended June 30, 2026, the Company announced a $30 million share repurchase program and repurchased 40,093 shares of its outstanding common stock, or approximately $891 thousand. During the second quarter of 2026, the Company declared a dividend of $0.14 per share, which represents a $0.02, or 16.7% increase from the dividend paid in the prior quarter.Asset Quality – Nonperforming assets were 1.09% of total assets at June 30, 2026, a decrease from 1.10% at March 31, 2026 and an increase from 0.33% at June 30, 2025. Classified assets were 1.41% of total assets at June 30, 2026, an increase when compared to 1.38% at March 31, 2026 and 0.37% at June 30, 2025. The allowance for credit losses ("ACL") was $58.7 million at June 30, 2026, compared to $58.5 million at March 31, 2026 and at June 30, 2025. The ACL as a percentage of loans decreased to 1.20% at June 30, 2026 compared to 1.21% at March 31, 2026 and at June 30, 2025.Operating Leverage – The efficiency ratio for the second quarter of 2026 was 57.76%, compared to 61.97% in the first quarter of 2026 and 60.83% for the second quarter of 2025. The adjusted efficiency ratio – non-GAAP(1), which excludes amortization of intangibles, was 54.49% for the second quarter of 2026, compared to 58.57% for the first quarter of 2026 and 56.73% for the second 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 second quarter results reflect the continued strength of our franchise and the progress we are making across the organization," stated James ("Jimmy") M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. "Another quarter of expanding net interest margin, record net interest income and record profitability demonstrates the benefits of disciplined balance sheet management, lower funding costs and our ongoing focus on operational execution. Our improved earnings and capital generation allowed us to increase our quarterly dividend and launch a share repurchase program, underscoring the confidence our Board has in the long-term value of our franchise and our commitment to disciplined capital allocation.
We continue to closely monitor several commercial real estate relationships, overall asset quality remains supported by conservative underwriting, strong collateral values and solid reserve levels. We remain focused on executing our strategy, enhancing shareholder returns and positioning Shore Bancshares for sustainable long-term growth."
Balance Sheet Review
Total assets were $6.15 billion at June 30, 2026, a decrease of $54.6 million from March 31 ,2026. The decrease was primarily due to a decrease in interest bearing deposits of $92.4 million partially offset by an increase in loans of $29.7 million. Total assets decreased $107.4 million, or 1.7%, when compared to $6.26 billion at December 31, 2025. The decrease was primarily due to a decrease in cash and cash equivalents of $97.9 million and a decrease in our loan portfolio of $22.6 million, which were partially offset by an increase in our investment securities portfolio of $18.4 million. The decrease in cash and cash equivalents was primarily driven by seasonal run-off of municipal deposits.
CRE loans (excluding land and construction) were $2.60 billion at June 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 $475.9 million, or 9.8% of total loans at June 30, 2026. The following table provides the stratification of the classes of CRE loans (excluding land and construction) at June 30, 2026.
June 30, 2026
Owner Occupied
Non-Owner Occupied
($ in thousands)
Average LTV(1)
Average
Loan Size
Loan
Balance(2)
Average LTV(1)
Average
Loan Size
Loan
Balance(2)
Office, medical
46.90 %
$ 562
$ 25,288
46.81 %
$ 1,652
$ 82,605
Office, govt. or govt. contractor
52.99
956
9,559
54.33
3,123
59,340
Office, other
47.17
474
83,886
49.03
1,328
215,210
Office, total
47.22
506
118,733
48.96
1,546
357,155
Retail
51.46
650
69,502
47.86
2,573
488,866
Multifamily (5+ units)
—
—
—
54.60
2,428
269,458
Hotel/motel
—
—
—
43.81
4,239
211,957
Industrial/warehouse
44.81
677
95,391
46.68
1,427
179,791
Commercial-improved
41.67
1,179
219,347
49.80
1,311
161,291
Marine/boat slips
28.65
758
16,671
36.03
1,459
7,294
Restaurant
49.09
1,012
53,632
48.47
1,020
41,834
Church
31.55
807
51,655
13.10
2,340
2,340
Land/lot loans
21.70
369
369
50.49
481
1,926
Other
39.15
1,290
107,062
31.82
539
148,740
Total CRE loans, gross
43.12
822
$ 732,362
44.14
1,613
$ 1,870,652
(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 $107.9 million, or 22.7% of the total office CRE loan portfolio, at June 30, 2026. The office CRE loan portfolio also included loans secured by buildings with government or government contractor tenants of $68.9 million, or 14.5% of the total office CRE loan portfolio at the same date. At June 30, 2026, the average loan debt service coverage ratio on the office CRE loan portfolio was 1.7x and the average LTV was 48.10%.
The 463 loans in the office CRE portfolio at June 30, 2026 had an average loan size of $1.0 million and a median loan size of $389 thousand. LTV estimates for the office CRE portfolio at June 30, 2026 are summarized below and LTV collateral values are based on the most recent appraisal, which may vary from the appraised value at loan origination.
LTV Range ($ in thousands)
Loan Count
Loan Balance
% of Office CRE
Less than or equal to 50%
229
$ 166,198
34.9 %
Greater than 50% and less than or equal to 60%
78
126,619
26.6
Greater than 60% and less than or equal to 70%
86
133,440
28.0
Greater than 70% and less than or equal to 80%
55
36,539
7.7
Greater than 80%
15
13,092
2.8
Total
463
$ 475,888
100.0 %
There were 16 office CRE loans with balances greater than $5.0 million, totaling $147.8 million at June 30, 2026 and totaling $166.1 million at December 31, 2025. The decrease in this portfolio segment was the result of normal amortization and the payoff of one loan. 80.8% of the office CRE loan balance was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 97.0% was secured by properties with five stories or less. $17.6 million of these loan balances were classified as special mention or substandard at June 30, 2026. There were no charge-offs within the office CRE portfolio during the three and six months ended June 30, 2026 and 2025.
Nonperforming assets were $67.2 million and $68.4 million, or 1.09% and 1.10% of total assets, as of June 30, 2026 and March 31, 2026, respectively. Nonperforming assets primarily consist of three large loans with an aggregate loan balance of $44.4 million. These nonperforming loans primarily consist of multifamily and office commercial real estate loans with collateral in North Carolina and Virginia. As of June 30, 2026, these loans are well-secured by collateral and required minimal individual reserves. When comparing June 30, 2026 to June 30, 2025, nonperforming assets increased $47.6 million, primarily due to an increase in nonaccrual loans of $48.0 million, partially offset by a decrease in repossessed marine and auto loans of $274 thousand and a decrease in loans 90 days past due and accruing of $195 thousand. Substandard loans, which include nonaccrual loans and accruing loans 90 days or more past due, were $84.3 million at June 30, 2026 compared to $82.3 million at March 31, 2026 and $19.9 million at June 30, 2025.
Special mention loans decreased to $73.0 million at June 30, 2026 compared to $97.8 million at March 31, 2026 and increased compared to $65.6 million at June 30, 2025. As of June 30, 2026, there were four special mention loans with individual balances greater than $5.0 million, totaling $53.0 million. These loans consist primarily of multifamily commercial real estate and other commercial real estate exposures that are well-collateralized. Management does not currently expect material losses on these credits and is actively engaged in credit oversight and timely execution of workout strategies.
Total deposits decreased $61.9 million from March 31, 2026 to $5.40 billion at June 30, 2026 and decreased $134.1 million when compared to December 31, 2025. The year-to-date decrease in total deposits was primarily due to a decrease in money market and savings accounts of $104.4 million, a decrease in time deposits of $19.5 million and a decrease in interest-bearing checking of $19.0 million. These decreases were partially offset by an increase in noninterest-bearing deposits of $18.9 million. Core deposits, which exclude municipal cannabis deposits, increased by $71.7 million, or 1.7%, during the same period.
Total funding, which includes customer deposits, Federal Home Loan Bank ("FHLB") advances and brokered deposits, was $5.40 billion at June 30, 2026, compared to $5.46 billion at March 31, 2026. The Company had no FHLB advances at June 30, 2026 and March 31, 2026. Brokered deposits were $796 thousand and $11.0 million at June 30, 2026 and March 31, 2026, respectively. Total reciprocal deposits were $1.33 billion and $1.42 billion at June 30, 2026 and March 31, 2026, respectively.
Uninsured deposits were $975.6 million, or 18.1% of total deposits, at June 30, 2026. Uninsured deposits, excluding deposits secured with pledged collateral, were $838.9 million, or 15.5% of total deposits, at June 30, 2026. At June 30, 2026, available liquidity was $1.90 billion, including $911.9 million in secured borrowing capacity at the FHLB, $25.1 million in secured borrowing capacity through the FRB Discount Window, $396.1 million in unsecured lines of credit with other correspondent banks, $314.4 million in unpledged securities and $257.7 million in cash and cash equivalents.
Total stockholders' equity at June 30, 2026 increased $26.2 million, or 4.4%, when compared to December 31, 2025, primarily due to current year earnings, partially offset by cash dividends paid and an increase in accumulated other comprehensive losses. As of June 30, 2026 and 2025, the ratio of total equity to total assets was 10.02% and 9.36%, respectively. As of June 30, 2026, the ratio of total tangible equity to total tangible assets(1) was 8.69%, compared to 8.06% and 7.88% as of December 31, 2025 and June 30, 2025, respectively. The Company's Tier 1 and Total Risk-Based Capital Ratios at June 30, 2026 were 11.71% and 14.17%, respectively.
Review of Quarterly Financial Results
Net interest income was $52.9 million for the second quarter of 2026, compared to $52.6 million for the first quarter of 2026 and $47.2 million for the second quarter of 2025. The slight increase in net interest income when compared to the first quarter of 2026 was primarily due to a decrease in interest expense on deposits of $1.3 million, partially offset by a decrease in interest income on deposits at other banks of $858 thousand and a decrease in interest income on loans of $358 thousand. The increase in net interest income was $5.8 million when compared to the second quarter of 2025, and was primarily due to a decrease in interest expense on deposits of $4.4 million, an increase in interest on loans of $849 thousand and a decrease in interest expense on short-term borrowings of $589 thousand. These favorable changes were partially offset by an increase in interest expense on long-term borrowings of $177 thousand. The decrease in interest expense on deposits is reflective of the rate reductions during 2026.
The Company's NIM increased to 3.70% for the second quarter of 2026 from 3.64% for the first quarter of 2026, primarily due to lower interest expense on deposits, partially offset by lower accelerated accretion related to loan payoffs. NIM excluding accretion increased for the comparable periods from 3.35% to 3.45%. Excluding accretion interest income, loan yields decreased 1 bp and funding costs decreased 8 bps for the comparable periods. Interest expense for the second quarter of 2026 decreased $1.3 million compared to the first quarter of 2026, primarily due to lower rates during the quarter. The Company's NIM increased to 3.70% for the second quarter of 2026 from 3.34% for the second quarter of 2025. The Company's average interest-earning asset yield remained flat at 5.42% for the second quarter of 2026 compared to the second quarter of 2025, while the average cost of funds decreased 36 bps to 1.81% from 2.17% for the same periods.
The provision for credit losses was $896 thousand for the three months ended June 30, 2026. The comparable amounts were $85 thousand for the three months ended March 31, 2026 and $1.5 million for the three months ended June 30, 2025. The increase in the provision for credit losses for the second quarter of 2026 compared to the first quarter of 2026 was due to a higher unfunded commitments, partially offset by favorable credit outlook and lower net charge offs. Coverage ratios decreased to 1.20% at June 30, 2026 from 1.21% at March 31, 2026, and decreased compared to June 30, 2025. Net charge-offs decreased to $123 thousand for the second quarter of 2026 compared to $847 thousand for the first quarter of 2026 and $649 thousand for the second quarter of 2025. The decrease was driven by the consumer loan related write-offs during the first quarter of 2026.
Total noninterest income for the second quarter of 2026 was $8.8 million, an increase of $1.6 million from the first quarter of 2026. The increase in other noninterest income was primarily related to other fees for bank services. Total noninterest income decreased $576 thousand during the second quarter of 2026 when compared to the second quarter of 2025 due to lower mortgage related activity.
Total noninterest expense of $35.7 million for the second quarter of 2026 decreased $1.4 million compared to $37.1 million for the first quarter of 2026, and increased $1.3 million compared to $34.4 million for the second quarter of 2025. The decrease from the first quarter of 2026 was primarily due to a decrease in salaries and employee benefit expenses of $1.2 million and a decrease in professional service fees of $250 thousand. The decrease in salaries and employee benefits was primarily related to lower employee related taxes. The increase from the second quarter of 2025 was primarily due to an increase in salaries and employee benefits expense of $720 thousand and an increase in software and data processing costs of $516 thousand, partially offset by a decrease in amortization of other intangible assets of $297 thousand.
The efficiency ratio for the second quarter of 2026 when compared to the first quarter of 2026 and the second quarter of 2025 was 57.76%, 61.97% and 60.83%, respectively. Adjusted efficiency ratios – non-GAAP(1) for the same periods were 54.49%, 58.57% and 56.73%, respectively.
Review of Six Month Financial Results
Net interest income for the six months ended June 30, 2026 was $105.5 million, an increase of $12.4 million, or 13.3%, when compared to the six months ended June 30, 2025. The increase in net interest income was primarily due to an increase in total interest income of $3.4 million, or 2.2%, which included an increase in interest on loans of $4.1 million, or 3.0%, a decrease in interest on deposits with other banks of $939 thousand, or 18.8%, and an increase in interest income on taxable investments of $169 thousand. The increase in interest on loans was primarily due to the increase in the average balance of loans of $70.6 million, or 1.5%. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $8.2 million and lower short-term borrowings of $1.2 million. These were partially offset by the increase in interest expense on long-term borrowings of $384 thousand as a result of lower FHLB borrowings and subordinated debt-related expenses that were classified as short term borrowings in 2025.
The Company's NIM increased from 3.28% for the six months ended June 30, 2025 to 3.67% for the six months ended June 30, 2026. Margins were higher due to a $64.8 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 $4.6 million was offset by a 44 basis point decrease in the associated rates paid, as well as a $49.2 million decrease in the average balance of FHLB advances and a 99 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 27 basis points and 24 basis points for the six months ended June 30, 2026 and 2025, respectively, which resulted in NIM excluding accretion of 3.40% and 3.04% for the same periods.
The provision for credit losses for the six months ended June 30, 2026 and 2025 was $1.0 million and $2.6 million, respectively. The decrease in the provision for credit losses during 2026 was due to improved economic conditions and lower net charge-offs, partially offset by higher reserves related to growth in the loan portfolio. Net charge-offs for the six months ended June 30, 2026 were $970 thousand, compared to $1.2 million for the six months ended June 30, 2025.
Total noninterest income for the six months ended June 30, 2026 decreased $466 thousand, or 2.8%, when compared to the same period in 2025. The decrease was primarily due to an $833 thousand decrease in other noninterest income and a $615 thousand decrease in mortgage banking revenue, partially offset by a $475 thousand increase in trust and investment fee income and a $293 thousand increase in interchange credits.
Total noninterest expense for the six months ended June 30, 2026 increased $4.6 million, or 6.7%, when compared to the same period in 2025. Noninterest expense line items increased primarily due to higher salaries and employee benefit expenses of $3.9 million and a $1.0 million increase in software and data processing expense. These increases were partially offset by lower amortization of intangible assets of $595 thousand during the six months ended June 30, 2026.
The efficiency ratio for the six months ended June 30, 2026 was 59.83% compared to 62.19% for the six months ended June 30, 2025. Adjusted efficiency ratios – non-GAAP(1) for the same periods were 56.50% and 57.95%, 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," "plan," "goal," or words of similar meaning, or future or conditional verbs such as "could," "would," or "may." Forward-looking statements include statements of our goals, intentions, or expectations; statements regarding our business plans, prospects, growth, or operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.
Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. 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 (Unaudited)
Q2 2026 vs.
Q2 2026 vs.
Six Months Ended June 30,
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Q1 2026
Q2 2025
2026
2025
2026 vs. 2025
PROFITABILITY FOR THE PERIOD
Taxable-equivalent net interest income
$ 53,005
$ 52,644
$ 50,294
$ 48,501
$ 47,244
0.7 %
12.2 %
$ 105,649
$ 93,222
13.3 %
Less: Taxable-equivalent adjustment
86
89
92
83
81
(3.4)
6.2
175
161
8.7
Net interest income
52,919
52,555
50,202
48,418
47,163
0.7
12.2
105,474
93,061
13.3
Provision for credit losses
896
85
2,827
2,992
1,528
954.1
(41.4)
981
2,556
(61.6)
Noninterest income
8,830
7,244
8,906
7,938
9,406
21.9
(6.1)
16,074
16,540
(2.8)
Noninterest expense
35,668
37,056
35,499
34,379
34,410
(3.7)
3.7
72,724
68,157
6.7
Income before income taxes
25,185
22,658
20,782
18,985
20,631
11.2
22.1
47,843
38,888
23.0
Income tax expense
6,320
5,570
4,895
4,637
5,124
13.5
23.3
11,890
9,617
23.6
NET INCOME
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 15,507
10.4
21.7
$ 35,953
$ 29,271
22.8
Adjusted net income – non-GAAP(1)
$ 20,344
$ 18,581
$ 17,416
$ 15,889
$ 17,215
9.5 %
18.2 %
$ 38,925
$ 32,696
19.1 %
Pre-tax pre-provision net income – non-GAAP(1)
26,081
22,743
23,609
21,977
22,159
14.7
17.7
48,824
41,444
17.8
Return on average assets – GAAP
1.24 %
1.12 %
1.02 %
0.95 %
1.03 %
12 bp
21 bp
1.18 %
0.97 %
21 bp
Adjusted return on average assets – non-GAAP
1.34
1.22
1.11
1.05
1.15
12
19
1.28
1.09
19
Return on average common equity – GAAP
12.38
11.55
10.79
9.96
11.13
83
125
11.97
10.67
130
Return on average tangible common equity – non-GAAP(1)
15.66
14.83
14.10
13.27
14.99
83
67
15.25
14.53
72
Net interest spread
2.85
2.80
2.48
2.45
2.37
5
48
2.82
2.32
50
Net interest margin
3.70
3.64
3.43
3.41
3.34
6
36
3.67
3.28
39
Efficiency ratio – GAAP
57.76
61.97
60.06
61.00
60.83
(421)
(307)
59.83
62.19
(236)
Adjusted efficiency ratio – non-GAAP(1)
54.49
58.57
56.59
57.30
56.73
(408)
(224)
56.50
57.95
(145)
Noninterest income to average assets
0.58
0.48
0.57
0.52
0.63
10
(5)
0.53
0.55
(2)
Noninterest expense to average assets
2.35
2.43
2.27
2.27
2.29
(8)
6
2.39
2.26
13
PER SHARE DATA
Basic net income per common share
$ 0.56
$ 0.51
$ 0.48
$ 0.43
$ 0.46
9.8 %
21.7 %
$ 1.08
$ 0.88
22.7 %
Diluted net income per common share
0.56
0.51
0.48
0.43
0.46
9.8
21.7
1.07
0.88
21.6
Dividends paid per common share
0.14
0.12
0.12
0.12
0.12
16.7
16.7
0.26
0.24
8.3
Book value per common share at period end
18.44
18.02
17.65
17.27
16.94
2.3
8.9
18.44
16.94
8.9
Tangible book value per common share at period end –
non-GAAP(1)
15.77
15.30
14.87
14.43
14.03
3.1
12.4
15.77
14.03
12.4
Common share market value at period end
22.95
18.68
17.68
16.41
15.72
22.9
46.0
22.95
15.72
46.0
Common share intraday price:
High
$ 23.45
$ 20.68
$ 19.22
$ 17.67
$ 15.88
13.4 %
47.7 %
$ 23.45
$ 17.24
36.0 %
Low
17.91
17.25
14.93
14.96
11.47
3.8
56.1
17.25
11.47
50.4
(1)
See the Reconciliation of GAAP and Non-GAAP Measures tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited) – Continued
Q2 2026 vs.
Q2 2026 vs.
Six Months Ended June 30,
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Q1 2026
Q2 2025
2026
2025
2026 vs. 2025
AVERAGE BALANCE SHEET DATA
Loans
$ 4,872,566
$ 4,887,488
$ 4,909,619
$ 4,884,003
$ 4,833,558
(0.3) %
0.8 %
$ 4,879,986
$ 4,809,409
1.5 %
Investment securities
684,762
666,376
653,639
664,535
683,680
2.8
0.2
675,620
674,220
0.2
Earning assets
5,731,054
5,823,244
5,843,816
5,658,981
5,660,409
(1.6)
1.2
5,776,894
5,712,117
1.1
Assets
6,080,508
6,174,655
6,206,753
6,020,574
6,021,385
(1.5)
1.0
6,127,321
6,075,339
0.9
Deposits
5,332,544
5,438,914
5,452,082
5,280,252
5,297,567
(2.0)
0.7
5,385,435
5,357,545
0.5
FHLB advances
1,648
—
20,108
52,391
50,000
—
(96.7)
829
50,000
(98.3)
Subordinated debt & TRUPS
89,082
89,024
104,752
74,363
74,102
0.1
20.2
89,053
73,971
20.4
Stockholders' equity
611,320
600,212
584,209
571,247
558,952
1.9
9.4
605,797
553,229
9.5
CREDIT QUALITY DATA
Net charge-offs
$ 123
$ 847
$ 3,619
$ 1,825
$ 649
(85.5) %
(81.0) %
$ 970
$ 1,203
(19.4) %
Nonaccrual loans
$ 64,818
$ 64,958
$ 39,960
$ 24,378
$ 16,782
(0.2) %
286.2 %
Loans 90 days past due and still accruing
20
—
255
153
215
—
(90.7)
Other real estate owned and repossessed property
2,362
3,414
2,992
3,552
2,636
(30.8)
(10.4)
Total nonperforming assets
$ 67,200
$ 68,372
$ 43,207
$ 28,083
$ 19,633
(1.7)
242.3
Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited) – Continued
Q2 2026 vs.
Q2 2026 vs.
Six Months Ended June 30,
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Q1 2026
Q2 2025
2026
2025
2026 vs 2025
CAPITAL AND CREDIT QUALITY RATIOS
Period-end equity to assets – GAAP
10.02 %
9.71 %
9.42 %
9.19 %
9.36 %
31 bp
66 bp
Period-end tangible equity to tangible assets – non-
GAAP(1)
8.69
8.37
8.06
7.80
7.88
32
81
Annualized net charge-offs to average loans
0.01 %
0.07 %
0.29 %
0.15 %
0.05 %
(6) bp
(4) bp
0.04 %
0.05 %
(1) bp
Allowance for credit losses as a percent of:
Period-end loans
1.20 %
1.21 %
1.20 %
1.22 %
1.21 %
(1) bp
(1) bp
Period-end nonaccrual loans
90.62
90.03
147.24
244.29
348.49
59
(25,787)
Period-end nonperforming assets
87.41
85.53
136.17
212.06
297.88
188
(21,047)
As a percent of total loans at period-end:
Nonaccrual loans
1.33 %
1.34 %
0.82 %
0.50 %
0.35 %
(1) bp
98 bp
As a percent of total loans, other real estate owned and
repossessed property at period-end:
Nonperforming assets
1.38 %
1.41 %
0.88 %
0.57 %
0.41 %
(3) bp
97 bp
As a percent of total assets at period-end:
Nonaccrual loans
1.05 %
1.05 %
0.64 %
0.39 %
0.28 %
— bp
77 bp
Nonperforming assets
1.09
1.10
0.69
0.45
0.33
(1)
76
(1)
See the Reconciliation of GAAP and Non-GAAP Measures tables.
Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited) – Continued
Q2 2026 vs.
Q2 2026 vs.
($ in thousands)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Q1 2026
Q2 2025
Company Amounts
Common Equity Tier 1 Capital
$ 541,577
$ 525,849
$ 510,729
$ 496,709
$ 483,947
2.99 %
11.91 %
Tier 1 Capital
571,904
556,096
540,897
526,794
513,952
2.84
11.28
Total Capital
691,720
674,811
660,451
627,055
618,793
2.51
11.79
Risk-Weighted Assets
4,882,618
4,794,374
4,852,573
4,867,237
4,890,679
1.84
(0.16)
Company Ratios
Common Equity Tier 1 Capital to Risk-Weighted Assets ("RWA")
11.09 %
10.97 %
10.52 %
10.21 %
9.90 %
12 bp
119 bp
Tier 1 Capital to RWA
11.71
11.60
11.15
10.82
10.51
11
120
Total Capital to RWA
14.17
14.08
13.61
12.88
12.65
9
152
Tier 1 Capital to AA (Leverage)
9.52
9.12
8.82
8.86
8.65
40
87
Bank Amounts
Common Equity Tier 1 Capital
$ 600,541
$ 583,733
$ 569,183
$ 559,212
$ 546,630
2.88 %
9.86 %
Tier 1 Capital
600,541
583,733
569,183
559,212
546,630
2.88
9.86
Total Capital
661,531
643,627
629,746
620,034
607,235
2.78
8.94
Risk-Weighted Assets
4,879,247
4,791,223
4,844,639
4,864,871
4,888,558
1.84
(0.19)
Bank Ratios
Common Equity Tier 1 Capital to RWA
12.31 %
12.18 %
11.75 %
11.49 %
11.18 %
13 bp
113 bp
Tier 1 Capital to RWA
12.31
12.18
11.75
11.49
11.18
13
113
Total Capital to RWA
13.56
13.43
13.00
12.75
12.42
13
114
Tier 1 Capital to AA (Leverage)
10.00
9.58
9.30
9.41
9.20
42
80
Shore Bancshares, Inc.
Consolidated Balance Sheets
June 30, 2026
June 30, 2026
compared to
compared to
($ in thousands, except per share data)
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2026
June 30, 2025
(unaudited)
(unaudited)
(unaudited)
(unaudited)
ASSETS
Cash and due from banks
$ 53,335
$ 44,054
$ 50,164
$ 62,289
$ 54,512
21.1 %
(2.2) %
Interest-bearing deposits with other banks
204,335
296,768
305,402
354,224
130,472
(31.1)
56.6
Cash and cash equivalents
257,670
340,822
355,566
416,513
184,984
(24.4)
39.3
Investment securities:
Available for sale, at fair value
287,369
264,026
220,358
181,720
187,679
8.8
53.1
Held to maturity, net of allowance for credit
losses
366,213
393,615
414,827
433,440
459,246
(7.0)
(20.3)
Equity securities, at fair value
6,218
6,195
6,186
6,113
6,010
0.4
3.5
Restricted securities, at cost
18,003
18,003
17,989
20,364
20,412
—
(11.8)
Loans held for sale, at fair value
30,827
24,034
32,540
21,500
34,319
28.3
(10.2)
Loans held for investment
4,877,749
4,848,030
4,900,302
4,882,969
4,827,628
0.6
1.0
Less: allowance for credit losses
(58,737)
(58,481)
(58,836)
(59,554)
(58,483)
0.4
0.4
Loans, net
4,819,012
4,789,549
4,841,466
4,823,415
4,769,145
0.6
1.0
Premises and equipment, net
79,580
80,137
80,168
80,812
81,426
(0.7)
(2.3)
Goodwill
63,266
63,266
63,266
63,266
63,266
—
—
Other intangible assets, net
25,767
27,742
29,722
31,722
33,761
(7.1)
(23.7)
Right-of-use assets
9,691
10,102
10,523
10,896
11,052
(4.1)
(12.3)
Cash surrender value on life insurance
107,724
106,684
105,839
105,055
105,860
1.0
1.8
Accrued interest receivable
20,021
20,676
18,551
20,408
19,821
(3.2)
1.0
Deferred income taxes
30,657
29,752
29,825
30,328
30,972
3.0
(1.0)
Other assets
29,413
31,460
31,992
32,927
29,921
(6.5)
(1.7)
TOTAL ASSETS
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
$ 6,037,874
(0.9)
1.9
Shore Bancshares, Inc.
Consolidated Balance Sheets – Continued
June 30, 2026
June 30, 2026
compared to
compared to
($ in thousands, except per share data)
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2026
June 30, 2025
(unaudited)
(unaudited)
(unaudited)
(unaudited)
LIABILITIES
Deposits:
Noninterest-bearing
$ 1,606,809
$ 1,567,425
$ 1,587,953
$ 1,594,212
$ 1,575,120
2.5 %
2.0 %
Interest-bearing checking
833,602
812,847
852,585
851,963
763,309
2.6
9.2
Money market and savings
1,710,570
1,795,619
1,814,928
1,790,001
1,691,438
(4.7)
1.1
Time deposits
1,247,973
1,274,766
1,267,487
1,281,132
1,273,285
(2.1)
(2.0)
Brokered deposits
796
10,963
10,911
10,857
10,806
(92.7)
(92.6)
Total deposits
5,399,750
5,461,620
5,533,864
5,528,165
5,313,958
(1.1)
1.6
FHLB advances
—
—
—
50,000
50,000
—
(100.0)
Guaranteed preferred beneficial interest in
junior subordinated debentures ("TRUPS"), net
30,327
30,247
30,168
30,085
30,005
0.3
1.1
Subordinated debt, net
58,825
58,782
58,893
44,409
44,236
0.1
33.0
Total borrowings
89,152
89,029
89,061
124,494
124,241
0.1
(28.2)
Lease liabilities
10,199
10,608
11,027
11,395
11,541
(3.9)
(11.6)
Other liabilities
36,255
42,092
34,993
37,218
22,940
(13.9)
58.0
TOTAL LIABILITIES
5,535,356
5,603,349
5,668,945
5,701,272
5,472,680
(1.2)
1.1
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value per share
334
335
334
334
334
(0.3)
—
Additional paid-in capital
361,048
361,013
360,554
359,939
359,063
—
0.6
Retained earnings
260,782
246,636
233,578
221,693
211,400
5.7
23.4
Accumulated other comprehensive loss
(6,089)
(5,270)
(4,593)
(4,759)
(5,603)
15.5
8.7
TOTAL STOCKHOLDERS' EQUITY
616,075
602,714
589,873
577,207
565,194
2.2
9.0
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
$ 6,037,874
(0.9)
1.9
Shares of common stock issued and outstanding
33,416,336
33,451,063
33,413,503
33,421,672
33,374,265
(0.1) %
0.1 %
Book value per common share at period end
$ 18.44
$ 18.02
$ 17.65
$ 17.27
$ 16.94
2.3
8.9
Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter (Unaudited)
Q2 2026 vs.
Q2 2026 vs.
Six Months Ended June 30,
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Q1 2026
Q2 2025
2026
2025
% Change
INTEREST INCOME
Interest on loans
$ 70,456
$ 70,814
$ 72,092
$ 70,693
$ 69,607
(0.5) %
1.2 %
$ 141,270
$ 137,123
3.0 %
Interest and dividends on taxable investment
securities
5,387
5,114
5,010
5,036
5,331
5.3
1.1
10,501
10,332
1.6
Interest and dividends on tax-exempt investment
securities
6
6
6
6
6
—
—
12
12
—
Interest on deposits with other banks
1,600
2,458
2,810
1,215
1,588
(34.9)
0.8
4,058
4,997
(18.8)
Total interest income
77,449
78,392
79,918
76,950
76,532
(1.2)
1.2
155,841
152,464
2.2
INTEREST EXPENSE
Interest on deposits
22,943
24,264
27,289
26,474
27,370
(5.4)
(16.2)
47,207
55,440
(14.9)
Interest on short-term borrowings
16
—
246
640
605
—
(97.4)
16
1,203
(98.7)
Interest on long-term borrowings
1,571
1,573
2,181
1,418
1,394
(0.1)
12.7
3,144
2,760
13.9
Total interest expense
24,530
25,837
29,716
28,532
29,369
(5.1)
(16.5)
50,367
59,403
(15.2)
NET INTEREST INCOME
52,919
52,555
50,202
48,418
47,163
0.7
12.2
105,474
93,061
13.3
Provision for credit losses
896
85
2,827
2,992
1,528
954.1
(41.4)
981
2,556
(61.6)
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES
52,023
52,470
47,375
45,426
45,635
(0.9)
14.0
104,493
90,505
15.5
NONINTEREST INCOME
Service charges on deposit accounts
1,651
1,596
1,663
1,599
1,519
3.4
8.7
3,247
3,033
7.1
Trust and investment fee income
1,103
1,137
1,042
898
942
(3.0)
17.1
2,240
1,765
26.9
Mortgage banking revenue
1,554
1,450
1,181
1,278
2,379
7.2
(34.7)
3,004
3,619
(17.0)
Interchange credits
1,960
1,698
1,862
1,858
1,788
15.4
9.6
3,658
3,365
8.7
Other noninterest income
2,562
1,363
3,158
2,305
2,778
88.0
(7.8)
3,925
4,758
(17.5)
Total noninterest income
$ 8,830
$ 7,244
$ 8,906
$ 7,938
$ 9,406
21.9
(6.1)
$ 16,074
$ 16,540
(2.8)
Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter and Year (Unaudited) – Continued
Q2 2026 vs.
Q2 2026 vs.
Six Months Ended June 30,
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Q1 2026
Q2 2025
2026
2025
% Change
NONINTEREST EXPENSE
Salaries and employee benefits
$ 18,462
$ 19,639
$ 18,582
$ 18,642
$ 17,742
(6.0) %
4.1 %
$ 38,101
$ 34,182
11.5 %
Occupancy expense
2,495
2,567
2,461
2,406
2,472
(2.8)
0.9
5,062
5,010
1.0
Furniture and equipment expense
966
855
792
892
797
13.0
21.2
1,821
1,650
10.4
Software and data processing
5,335
5,140
5,197
5,155
4,819
3.8
10.7
10,475
9,510
10.1
Amortization of other intangible assets
1,975
1,980
2,000
2,039
2,272
(0.3)
(13.1)
3,955
4,550
(13.1)
Legal and professional fees
1,355
1,605
1,237
989
1,225
(15.6)
10.6
2,960
2,838
4.3
FDIC insurance premium expense
968
995
845
794
1,023
(2.7)
(5.4)
1,963
2,114
(7.1)
Marketing and advertising
275
311
367
315
384
(11.6)
(28.4)
586
638
(8.2)
Fraud losses
147
111
227
45
83
32.4
77.1
258
188
37.2
Other noninterest expense
3,690
3,853
3,791
3,102
3,593
(4.2)
2.7
7,543
7,477
0.9
Total noninterest expense
35,668
37,056
35,499
34,379
34,410
(3.7)
3.7
72,724
68,157
6.7
Income before income taxes
25,185
22,658
20,782
18,985
20,631
11.2
22.1
47,843
38,888
23.0
Income tax expense
6,320
5,570
4,895
4,637
5,124
13.5
23.3
11,890
9,617
23.6
NET INCOME
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 15,507
10.4
21.7
$ 35,953
$ 29,271
22.8
Weighted average shares outstanding – basic
33,451,484
33,428,444
33,426,198
33,419,291
33,374,265
0.1 %
0.2 %
33,440,028
33,362,632
0.2 %
Weighted average shares outstanding – diluted
33,478,698
33,447,767
33,446,103
33,435,862
33,388,013
0.1 %
0.3 %
33,462,937
33,377,165
0.3 %
Basic net income per common share
$ 0.56
$ 0.51
$ 0.48
$ 0.43
$ 0.46
9.8 %
21.7 %
$ 1.08
$ 0.88
22.7 %
Diluted net income per common share
$ 0.56
$ 0.51
$ 0.48
$ 0.43
$ 0.46
9.8 %
21.7 %
$ 1.07
$ 0.88
21.6 %
Dividends paid per common share
$ 0.14
$ 0.12
$ 0.12
$ 0.12
$ 0.12
16.7 %
16.7 %
$ 0.26
$ 0.24
8.3 %
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited)
Three Months Ended
June 30, 2026
March 31, 2026
June 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
$ 2,586,937
$ 38,169
5.92 %
$ 2,601,316
$ 39,029
6.08 %
$ 2,572,931
$ 37,240
5.81 %
Residential real estate
1,484,165
20,276
5.46
1,450,114
19,311
5.33
1,378,940
18,959
5.50
Construction
338,695
5,454
6.46
347,973
5,631
6.56
352,803
5,697
6.48
Commercial
208,349
3,041
5.85
221,542
3,296
6.03
224,218
3,654
6.54
Consumer
250,295
3,491
5.59
262,174
3,534
5.47
298,544
4,018
5.40
Credit cards
4,125
110
10.69
4,369
100
9.29
6,122
117
7.66
Total loans
4,872,566
70,541
5.80
4,887,488
70,901
5.86
4,833,558
69,685
5.78
Investment securities
Taxable
684,116
5,387
3.15
665,729
5,114
3.07
683,028
5,331
3.12
Tax-exempt(1)
646
7
4.33
647
8
4.95
652
8
4.91
Interest-bearing deposits
173,726
1,600
3.69
269,380
2,458
3.70
143,171
1,588
4.45
Total earning assets
5,731,054
77,535
5.42
5,823,244
78,481
5.44
5,660,409
76,612
5.42
Cash and due from banks
43,885
44,182
46,620
Other assets
364,155
365,971
372,725
Allowance for credit losses
(58,586)
(58,742)
(58,369)
Total assets
$ 6,080,508
$ 6,174,655
$ 6,021,385
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Three Months Ended
June 30, 2026
March 31, 2026
June 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
$ 733,877
$ 4,560
2.49 %
$ 780,713
$ 4,840
2.51 %
$ 720,967
$ 5,697
3.17 %
Money market and savings deposits
1,744,356
8,079
1.86
1,812,071
8,696
1.95
1,747,854
9,580
2.20
Time deposits
1,258,086
10,288
3.28
1,270,156
10,624
3.39
1,258,802
12,000
3.82
Brokered deposits
4,033
16
1.59
11,107
104
3.80
9,720
92
3.80
Interest-bearing deposits(4)
3,740,352
22,943
2.46
3,874,047
24,264
2.54
3,737,343
27,369
2.94
FHLB advances
1,648
16
3.88
—
—
—
50,000
605
4.85
Subordinated debt and guaranteed
preferred beneficial interest in junior
subordinated debentures ("TRUPS")(4)
89,082
1,571
7.07
89,024
1,573
7.17
74,102
1,394
7.55
Total interest-bearing liabilities
3,831,082
24,530
2.57
3,963,071
25,837
2.64
3,861,445
29,368
3.05
Noninterest-bearing deposits
1,592,192
1,564,867
1,560,224
Accrued expenses and other liabilities
45,914
46,505
40,764
Stockholders' equity
611,320
600,212
558,952
Total liabilities and stockholders' equity
$ 6,080,508
$ 6,174,655
$ 6,021,385
Net interest spread
2.85 %
2.80 %
2.37 %
Net interest margin
3.70
3.64
3.34
Net interest margin excluding accretion(3)
3.45
3.35
3.09
Cost of funds
1.81
1.90
2.17
Cost of deposits
1.73
1.81
2.07
Cost of debt
7.02
7.17
6.46
(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 $3.8 million, $4.3 million and $4.2 million of accretion interest on loans for the three months ended June 30, 2026, March 31, 2026 and June 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 $435 thousand of amortization of deposit discounts and $79 thousand, $79 thousand and $232 thousand of amortization of borrowing fair value adjustments for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Six Months Ended June 30,
2026
2025
($ in thousands)
Average Balance
Interest
Yield/Rate
Average Balance
Interest
Yield/Rate
Earning assets
Loans(1), (2), (3)
Commercial real estate
$ 2,594,087
$ 77,198
6.00 %
$ 2,557,316
$ 73,066
5.76 %
Residential real estate
1,467,234
39,587
5.40
1,363,076
37,391
5.49
Construction
343,308
11,085
6.51
352,564
11,222
6.42
Commercial
214,909
6,337
5.95
228,535
7,349
6.48
Consumer
256,202
7,025
5.53
301,515
8,059
5.39
Credit cards
4,246
210
9.96
6,403
194
6.11
Total loans
4,879,986
141,442
5.83
4,809,409
137,281
5.74
Investment securities
Taxable
674,973
10,501
3.11
673,567
10,332
3.07
Tax-exempt(1)
647
15
4.64
653
15
4.59
Interest-bearing deposits
221,288
4,058
3.70
228,488
4,997
4.41
Total earning assets
5,776,894
156,016
5.43
5,712,117
152,625
5.37
Cash and due from banks
44,033
46,912
Other assets
365,058
374,641
Allowance for credit losses
(58,664)
(58,331)
Total assets
$ 6,127,321
$ 6,075,339
Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Six Months Ended June 30,
2026
2025
($ in thousands)
Average Balance
Interest
Yield/Rate
Average Balance
Interest
Yield/Rate
Interest-bearing liabilities
Interest-bearing checking
$ 757,165
$ 9,400
2.50 %
$ 789,949
$ 12,722
3.25 %
Money market and savings deposits
1,778,027
16,775
1.90
1,773,637
19,595
2.23
Time deposits
1,264,087
20,912
3.34
1,233,666
23,031
3.76
Brokered deposits
7,461
120
3.24
4,888
92
3.81
Interest-bearing deposits(4)
3,806,740
47,207
2.50
3,802,140
55,440
2.94
FHLB advances
829
16
3.86
50,000
1,203
4.85
Subordinated debt and TRUPS(4)
89,053
3,144
7.12
73,971
2,760
7.52
Total interest-bearing liabilities
3,896,622
50,367
2.61
3,926,111
59,403
3.05
Noninterest-bearing deposits
1,578,695
1,555,405
Accrued expenses and other liabilities
46,207
40,594
Stockholders' equity
605,797
553,229
Total liabilities and stockholders' equity
$ 6,127,321
$ 6,075,339
Net interest spread
2.82 %
2.32 %
Net interest margin
3.67
3.28
Net interest margin excluding accretion(3)
3.40
3.04
Cost of funds
1.86
2.19
Cost of deposits
1.77
2.09
Cost of debt
7.09
6.45
(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 $8.1 million and $8.0 million of accretion interest on loans for the six months ended June 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 $769 thousand of amortization of deposit discounts and $159 thousand and $463 thousand of amortization of borrowing fair value adjustments for the six months ended June 30, 2026 and 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
6/30/2026
6/30/2025
The following reconciles return on average assets, average equity and return on average tangible common equity(1):
Net income
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 15,507
$ 35,953
$ 29,271
Annualized net income (A)
$ 75,667
$ 69,301
$ 63,030
$ 56,924
$ 62,198
$ 72,502
$ 59,027
Net income
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 15,507
$ 35,953
$ 29,271
Add: amortization of other intangible assets, net of tax
1,479
1,493
1,529
1,541
1,708
2,972
3,425
Net income excluding amortization of other intangible assets –
non-GAAP
20,344
18,581
17,416
15,889
17,215
38,925
32,696
Annualized net income excluding amortization of other
intangible assets – non-GAAP (B)
$ 81,600
$ 75,356
$ 69,096
$ 63,038
$ 69,049
$ 78,495
$ 65,934
Net income
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 15,507
$ 35,953
$ 29,271
Add: amortization of other intangible assets, net of tax
1,479
1,493
1,529
1,541
1,708
2,972
3,425
Adjusted net income – non-GAAP
20,344
18,581
17,416
15,889
17,215
38,925
32,696
Annualized adjusted net income – non-GAAP (C)
$ 81,600
$ 75,356
$ 69,096
$ 63,038
$ 69,049
$ 78,495
$ 65,934
Net income
$ 18,865
$ 17,088
$ 15,887
$ 14,348
$ 15,507
$ 35,953
$ 29,271
Less: income tax expense
6,320
5,570
4,895
4,637
5,124
11,890
9,617
Less: provision for credit losses
896
85
2,827
2,992
1,528
981
2,556
Pre-tax pre-provision net income – non-GAAP
$ 26,081
$ 22,743
$ 23,609
$ 21,977
$ 22,159
$ 48,824
$ 41,444
Return on average assets – GAAP
1.24 %
1.12 %
1.02 %
0.95 %
1.03 %
1.18 %
0.97 %
Adjusted return on average assets – non-GAAP
1.34 %
1.22 %
1.11 %
1.05 %
1.15 %
1.28 %
1.09 %
Average assets
$ 6,080,508
$ 6,174,655
$ 6,206,753
$ 6,020,574
$ 6,021,385
$ 6,127,321
$ 6,075,339
Average stockholders' equity (D)
$ 611,320
$ 600,212
$ 584,209
$ 571,247
$ 558,952
$ 605,797
$ 553,229
Less: average goodwill and core deposit intangible
(90,088)
(92,086)
(94,059)
(96,074)
(98,241)
(91,082)
(99,372)
Average tangible common equity (E)
$ 521,232
$ 508,126
$ 490,150
$ 475,173
$ 460,711
$ 514,715
$ 453,857
Return on average common equity – GAAP (A)/(D)
12.38 %
11.55 %
10.79 %
9.96 %
11.13 %
11.97 %
10.67 %
Return on average tangible common equity – non-GAAP
(B)/(E)
15.66 %
14.83 %
14.10 %
13.27 %
14.99 %
15.25 %
14.53 %
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
6/30/2026
6/30/2025
The following reconciles efficiency ratio – GAAP and adjusted efficiency ratio – non-GAAP(2):
Noninterest expense (F)
$ 35,668
$ 37,056
$ 35,499
$ 34,379
$ 34,410
$ 72,724
$ 68,157
Less: amortization of other intangible assets
(1,975)
(1,980)
(2,000)
(2,039)
(2,272)
(3,955)
(4,550)
Adjusted noninterest expense (G)
$ 33,693
$ 35,076
$ 33,499
$ 32,340
$ 32,138
$ 68,769
$ 63,607
Net interest income (H)
$ 52,919
$ 52,555
$ 50,202
$ 48,418
$ 47,163
$ 105,474
$ 93,061
Add: taxable-equivalent adjustment
86
89
92
83
81
175
161
Taxable-equivalent net interest income (I)
$ 53,005
$ 52,644
$ 50,294
$ 48,501
$ 47,244
$ 105,649
$ 93,222
Noninterest income (J)
$ 8,830
$ 7,244
$ 8,906
$ 7,938
$ 9,406
$ 16,074
$ 16,540
Adjusted noninterest income (K)
$ 8,830
$ 7,244
$ 8,906
$ 7,938
$ 9,406
$ 16,074
$ 16,540
Efficiency ratio – GAAP (F)/(H)+(J)
57.76 %
61.97 %
60.06 %
61.00 %
60.83 %
59.83 %
62.19 %
Adjusted efficiency ratio – non-GAAP (G)/(I)+(K)
54.49 %
58.57 %
56.59 %
57.30 %
56.73 %
56.50 %
57.95 %
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
($ in thousands, except per share data)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
The following reconciles book value per common share and tangible book value per common share(1):
Stockholders' equity (L)
$ 616,075
$ 602,714
$ 589,873
$ 577,207
$ 565,194
Less: goodwill and core deposit intangible
(89,033)
(91,008)
(92,988)
(94,988)
(97,027)
Tangible common equity (M)
$ 527,042
$ 511,706
$ 496,885
$ 482,219
$ 468,167
Shares of common stock outstanding (N)
33,416,336
33,451,063
33,413,503
33,421,672
33,374,265
Book value per common share – GAAP (L)/(N)
$ 18.44
$ 18.02
$ 17.65
$ 17.27
$ 16.94
Tangible book value per common share – non-GAAP (M)/(N)
$ 15.77
$ 15.30
$ 14.87
$ 14.43
$ 14.03
The following reconciles equity to assets and tangible common equity to tangible assets(1):
Stockholders' equity (O)
$ 616,075
$ 602,714
$ 589,873
$ 577,207
$ 565,194
Less: goodwill and core deposit intangible
(89,033)
(91,008)
(92,988)
(94,988)
(97,027)
Tangible common equity (P)
$ 527,042
$ 511,706
$ 496,885
$ 482,219
$ 468,167
Assets (Q)
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
$ 6,037,874
Less: goodwill and core deposit intangible
(89,033)
(91,008)
(92,988)
(94,988)
(97,027)
Tangible assets (R)
$ 6,062,398
$ 6,115,055
$ 6,165,830
$ 6,183,491
$ 5,940,847
Period-end equity to assets – GAAP (O)/(Q)
10.02 %
9.71 %
9.42 %
9.19 %
9.36 %
Period-end tangible common equity to tangible assets – non-GAAP (P)/(R)
8.69 %
8.37 %
8.06 %
7.80 %
7.88 %
(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 the adjusted efficiency ratio – non-GAAP more closely measures its effectiveness of controlling cash-based operating activities.
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Regulatory Capital and Ratios for the Company
($ in thousands)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Common equity
$ 616,075
$ 602,714
$ 589,873
$ 577,207
$ 565,194
Goodwill(1)
(61,000)
(61,061)
(61,123)
(61,176)
(61,238)
Core deposit intangible(2)
(19,587)
(21,074)
(22,566)
(24,041)
(25,573)
DTAs that arise from net operating loss and tax credit carryforwards
—
—
(48)
(40)
(39)
Accumulated other comprehensive loss
6,089
5,270
4,593
4,759
5,603
Common Equity Tier 1 Capital
541,577
525,849
510,729
496,709
483,947
TRUPS
30,327
30,247
30,168
30,085
30,005
Tier 1 Capital
571,904
556,096
540,897
526,794
513,952
Allowable reserve for credit losses and other Tier 2 adjustments
60,991
59,933
60,661
60,852
60,605
Subordinated debt
58,825
58,782
58,893
39,409
44,236
Total Capital
$ 691,720
$ 674,811
$ 660,451
$ 627,055
$ 618,793
Risk-Weighted Assets ("RWA")
$ 4,882,618
$ 4,794,374
$ 4,852,573
$ 4,867,237
$ 4,890,679
Average Assets ("AA")
6,007,717
6,098,196
6,129,306
5,942,911
5,943,124
Common Equity Tier 1 Capital to RWA
11.09 %
10.97 %
10.52 %
10.21 %
9.90 %
Tier 1 Capital to RWA
11.71
11.60
11.15
10.82
10.51
Total Capital to RWA
14.17
14.08
13.61
12.88
12.65
Tier 1 Capital to AA (Leverage)
9.52
9.12
8.82
8.86
8.65
Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Regulatory Capital and Ratios for the Bank
($ in thousands)
Q2 2026
Q1 2026
Q4 2025
Q3 2025
Q2 2025
Common equity
$ 675,039
$ 660,598
$ 648,279
$ 639,670
$ 627,838
Goodwill(1)
(61,000)
(61,061)
(61,123)
(61,176)
(61,238)
Core deposit intangible(2)
(19,587)
(21,074)
(22,566)
(24,041)
(25,573)
Accumulated other comprehensive loss
6,089
5,270
4,593
4,759
5,603
Common Equity Tier 1 Capital
600,541
583,733
569,183
559,212
546,630
Tier 1 Capital
600,541
583,733
569,183
559,212
546,630
Allowable reserve for credit losses and other Tier 2 adjustments
60,990
59,894
60,563
60,822
60,605
Total Capital
$ 661,531
$ 643,627
$ 629,746
$ 620,034
$ 607,235
Risk-Weighted Assets ("RWA")
$ 4,879,247
$ 4,791,223
$ 4,844,639
$ 4,864,871
$ 4,888,558
Average Assets ("AA")
6,002,596
6,093,905
6,122,775
5,939,890
5,940,411
(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)
June 30,
2026
% of Total
Loans
March 31,
2026
% of Total
Loans
December 31,
2025
% of Total
Loans
September 30,
2025
% of Total
Loans
June 30,
2025
% of Total
Loans
Commercial real estate
$ 2,603,014
53.37 %
$ 2,599,815
53.62 %
$ 2,643,996
53.95 %
$ 2,642,601
54.12 %
$ 2,603,974
53.95 %
Residential real estate
1,470,401
30.15
1,425,733
29.41
1,414,964
28.88
1,383,348
28.33
1,349,010
27.94
Construction
337,779
6.92
342,835
7.07
344,903
7.04
352,116
7.21
350,053
7.25
Commercial
220,712
4.52
220,833
4.56
226,006
4.61
221,598
4.54
224,092
4.64
Consumer
241,751
4.96
254,478
5.25
265,912
5.43
278,242
5.70
294,239
6.09
Credit cards
4,092
0.08
4,336
0.09
4,521
0.09
5,064
0.10
6,260
0.13
Total loans
4,877,749
100.00 %
4,848,030
100.00 %
4,900,302
100.00 %
4,882,969
100.00 %
4,827,628
100.00 %
Less: allowance for
credit losses
(58,737)
(58,481)
(58,836)
(59,554)
(58,483)
Total loans, net
$ 4,819,012
$ 4,789,549
$ 4,841,466
$ 4,823,415
$ 4,769,145
Shore Bancshares, Inc.
Classified Assets and Nonperforming Assets (Unaudited)
Classified assets and nonperforming assets are summarized as follows:
($ in thousands)
June 30, 2026
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
Classified loans
Substandard
$ 84,285
$ 82,337
$ 57,366
$ 48,470
$ 19,930
Total classified loans
84,285
82,337
57,366
48,470
19,930
Special mention loans
72,957
97,771
73,401
70,997
65,564
Total classified and special mention loans
$ 157,242
$ 180,108
$ 130,767
$ 119,467
$ 85,494
Classified loans
$ 84,285
$ 82,337
$ 57,366
$ 48,470
$ 19,930
Other real estate owned
—
69
113
120
179
Repossessed assets
2,362
3,345
2,879
3,432
2,457
Total classified assets
$ 86,647
$ 85,751
$ 60,358
$ 52,022
$ 22,566
Classified assets to total assets
1.41 %
1.38 %
0.96 %
0.83 %
0.37 %
Nonaccrual loans
$ 64,818
$ 64,958
$ 39,960
$ 24,378
$ 16,782
90+ days delinquent accruing
20
—
255
153
215
Other real estate owned ("OREO")
—
69
113
120
179
Repossessed property
2,362
3,345
2,879
3,432
2,457
Total nonperforming assets
$ 67,200
$ 68,372
$ 43,207
$ 28,083
$ 19,633
Accruing borrowers experiencing financial difficulty loans ("BEFD")
140
5,263
5,311
6,704
6,709
Total nonperforming assets and BEFDs modifications
$ 67,340
$ 73,635
$ 48,518
$ 34,787
$ 26,342
Nonperforming assets to total assets
1.09 %
1.10 %
0.69 %
0.45 %
0.33 %
Total assets
$ 6,151,431
$ 6,206,063
$ 6,258,818
$ 6,278,479
$ 6,037,874
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SOURCE Shore Bancshares, Inc.