Shore Bancshares(SHBI)2025-03-10 18:54Financial Performance - The Company recorded net income of 11.2 million for 2023, representing a 290.89% increase[242]. - Net income for the year ended December 31, 2024, was reported at 11.23 million in 2023, representing an increase of approximately 290%[363]. - Basic and diluted net income per common share for 2024 was 0.42 in 2023, representing a growth of 214%[411]. - The return on average assets improved to 0.74% in 2024 from 0.24% in 2023, while return on average common equity increased to 8.35% from 2.54%[248]. - Return on average common equity improved to 8.35% in 2024 from 2.54% in 2023, indicating enhanced profitability relative to equity[363]. - The company reported a return on average tangible common equity of 12.21% for 2024, compared to 7.74% in 2023, indicating improved operational efficiency[365]. Asset and Liability Management - Total assets increased by 6.23 billion at December 31, 2024, primarily due to a 189.9 million, or 3.45%, to 29.9 million, or 5.9%, to 43.9 million[246]. - Cash and cash equivalents totaled 372.4 million at December 31, 2023, reflecting a 23.5% increase[263]. - Total deposits increased to 5,386,120 thousand in 2023, reflecting a growth of approximately 2.64%[409]. Income and Expense Analysis - Interest and dividend income increased by 295.3 million for the year ended December 31, 2024[248]. - Net interest income rose by 170.9 million for 2024, primarily due to an increase in interest and fees on loans[249]. - Total noninterest income for 2024 was 2.0 million or 6.1% from 138.3 million in 2024, up 123.3 million in 2023[257]. - The effective tax rate increased to 25.2% in 2024 from 20.8% in 2023, driven by bargain purchase gains and nondeductible merger-related costs[260]. Credit Quality and Risk Management - The provision for credit losses decreased significantly by 4.7 million in 2024[248]. - The allowance for credit losses on loans was 57.35 million in 2023[277]. - Total past due loans decreased to 11.6 million at December 31, 2023, with nonaccrual loans increasing to 24.8 million, an increase of 13.7 million in 2023, with the ratio of nonperforming assets to total assets increasing to 0.40% from 0.23%[305]. - The company continues to prioritize the resolution of nonperforming and problem loans through various strategies, including loan charge-offs and marketing of repossessed assets[306]. Capital and Regulatory Compliance - The Bank was classified as "well-capitalized" under applicable regulatory capital requirements as of December 31, 2024[348]. - The Company maintained a Common Equity Tier 1 ratio of 8.02% and a Total Risk-Based Capital ratio of 12.18% as of December 31, 2024[349]. - The company has no speculative grade HTM securities, maintaining a focus on investment-grade securities rated BBB- or higher[271]. Investment Portfolio - The investment portfolio included 23.7% classified as available-for-sale (AFS) and 76.3% as held-to-maturity (HTM) at December 31, 2024[264]. - As of December 31, 2024, investment securities totaled 9.0 million increase or 1.4% from 149.2 million, up from 481.1 million from $513.2 million in 2023, with 70.0% in mortgage-backed securities and 27.6% in U.S. government agency securities[267]. Operational Efficiency - The company maintained effective internal control over financial reporting as of December 31, 2024, as confirmed by the independent auditor's report[389]. - The independent auditor Crowe LLP provided an unqualified opinion on the financial statements, affirming their conformity with generally accepted accounting principles[389].