Shore Bancshares Q2 2024: Assets Grow, Net Interest Income Rises

TL;DR

SHBI assets hit $2.58B, net interest income up to $18.7M for Q2. Solid quarter.

AI Summary

Shore Bancshares Inc. reported its financial results for the period ending June 30, 2024. The company's total assets stood at $2.58 billion as of June 30, 2024, a slight increase from $2.57 billion at the end of 2023. Net interest income for the three months ended June 30, 2024, was $18.7 million, compared to $18.1 million for the same period in the prior year.

Why It Matters

This filing provides insight into the financial health and performance of Shore Bancshares, a regional bank, which can impact its customers, investors, and the local economy.

Risk Assessment

Risk Level: low — The filing is a routine quarterly report with no immediate red flags or significant negative developments.

Key Numbers

• $2.58B — Total Assets (As of June 30, 2024, showing slight growth.)
• $18.7M — Net Interest Income (For the three months ended June 30, 2024, indicating an increase from the prior year.)
• $2.57B — Total Assets (As of December 31, 2023, serving as a comparison point.)
• $18.1M — Net Interest Income (For the three months ended June 30, 2023, for year-over-year comparison.)

Key Players & Entities

• SHORE BANCSHARES INC (company) — Filer
• 20240630 (date) — Period of Report
• $2.58 billion (dollar_amount) — Total Assets as of June 30, 2024
• $2.57 billion (dollar_amount) — Total Assets as of December 31, 2023
• $18.7 million (dollar_amount) — Net Interest Income for three months ended June 30, 2024
• $18.1 million (dollar_amount) — Net Interest Income for three months ended June 30, 2023

FAQ

Filing Documents

• shbi-20240630.htm (10-Q) — 4264KB
• shbi-20240630x10qxex32.htm (EX-3.2) — 76KB
• shbi-20240630xexx311xq.htm (EX-31.1) — 11KB
• shbi-20240630xexx312xq.htm (EX-31.2) — 11KB
• shbi-20240630xexx32xq.htm (EX-32) — 6KB
• shbi-20240630_g1.jpg (GRAPHIC) — 69KB
• 0001628280-24-036376.txt ( ) — 21466KB
• shbi-20240630.xsd (EX-101.SCH) — 80KB
• shbi-20240630_cal.xml (EX-101.CAL) — 166KB
• shbi-20240630_def.xml (EX-101.DEF) — 464KB
• shbi-20240630_lab.xml (EX-101.LAB) — 1038KB
• shbi-20240630_pre.xml (EX-101.PRE) — 789KB
• shbi-20240630_htm.xml (XML) — 5274KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION 3

– Financial Statements

Item 1 – Financial Statements 3 Consolidated Balance Sheets at June 30, 2024 (unaudited) and December 31, 2023 3 Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 (unaudited) 5 Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited) 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 10

– Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations 42

– Quantitative and Qualitative Disclosures about Market Risk

Item 3 – Quantitative and Qualitative Disclosures about Market Risk 71

– Controls and Procedures

Item 4 – Controls and Procedures 71

— OTHER INFORMATION

PART II — OTHER INFORMATION 73

– Legal Proceedings

Item 1 – Legal Proceedings 73

– Risk Factors

Item 1A – Risk Factors 73

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 73

– Defaults Upon Senior Securities

Item 3 – Defaults Upon Senior Securities 73

– Mine Safety Disclosures

Item 4 – Mine Safety Disclosures 73

– Other Information

Item 5 – Other Information 73

– Exhibits

Item 6 – Exhibits 74

SIGNATURES

SIGNATURES 75 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. SHORE BANCSHARES, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) June 30, 2024 December 31, 2023 ASSETS (Unaudited) Cash and due from banks $ 50,090 $ 63,172 Interest-bearing deposits with other banks 88,793 309,241 Cash and cash equivalents 138,883 372,413 Investment securities: Available-for-sale, at fair value (amortized cost of $ 142,959 (2024) and $ 120,832 (2023)) 131,594 110,521 Held to maturity, net of allowance for credit losses of $ 108 (2024) and $ 94 (2023) (fair value of $ 440,164 (2024) and $ 457,830 (2023)) 499,431 513,188 Equity securities, at fair value 5,699 5,703 Restricted securities, at cost 21,725 17,900 Loans held for sale, at fair value 27,829 8,782 Loans held for investment ($ 9,515 (2024) and $ 9,944 (2023), at fair value) 4,705,737 4,641,010 Less: allowance for credit losses ( 58,478 ) ( 57,351 ) Loans, net 4,647,259 4,583,659 Premises and equipment, net 82,176 82,386 Goodwill 63,266 63,266 Other intangible assets, net 42,945 48,090 Other real estate owned, net 179 179 Repossessed properties 1,560 — Assets held for sale 1,387 — Mortgage servicing rights, at fair value 5,995 5,926 Right-of-use assets 11,762 12,487 Cash surrender value on life insurance 102,969 101,704 Accrued interest receivable 19,641 19,217 Deferred income taxes 36,078 40,707 Other assets 23,639 24,790 TOTAL ASSETS $ 5,864,017 $ 6,010,918 LIABILITIES Deposits: Noninterest-bearing $ 1,587,252 $ 1,258,037 Interest-bearing 3,561,633 4,128,083 Total deposits 5,148,885 5,386,120 Advances from FHLB - short-term 31,000 — Advances from FHLB - long-term 50,000 — Guaranteed preferred beneficial interest in junior subordinated debentures ("TRUPS"), net 29,316 29,158 Subordinated debt, net 43,504 43,139 Total borrowings 153,820 72,297 Lease liabilities 12,189 12,857 Other liabilities 26,340 28,509 TOTAL LIABILITIES 5,341,234 5,499,783 STOCKHOLDERS' EQUITY Common stock,

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements For the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited) Note 1 – Basis of Presentation The consolidated financial statements include the accounts of Shore Bancshares, Inc. and its subsidiaries with all significant intercompany transactions eliminated. The consolidated financial statements conform to accounting principles generally accepted in the United States of America ("GAAP") and to prevailing practices within the banking industry. The accompanying interim financial statements are unaudited; however, in the opinion of management all adjustments necessary to present fairly the consolidated financial position at June 30, 2024, the consolidated results of income and comprehensive income for the three and six months ended June 30, 2024 and 2023, changes in stockholders' equity for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023, have been included. All such adjustments were of a normal recurring nature. The amounts as of December 31, 2023 were derived from the 2023 audited financial statements. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any other interim period or for the full year. This Quarterly Report on Form 10-Q should be read in conjunction with the Annual Report of Shore Bancshares, Inc. on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report"). For purposes of comparability, certain immaterial reclassifications have been made to amounts previously reported to conform with the current period presentation. When used in these notes, the term "the Company" refers to Shore Bancshares, Inc. and, unless the context requires otherwise, its consolidated subsidiaries, Shore United Bank, N.A. (the "Bank") and Mid-Maryland Title Company, Inc. (the "Title Company"). Recent Accounting Pronouncements ASU Update 2023-09 – In Dec

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