Shore Bancshares(SHBI) - 2024 Q2 - Quarterly Report

Financial Performance - Net income for the three months ended June 30, 2024, was $4,018 thousand, compared to $10,475 thousand for the same period in 2023, a decrease of 61.7%[6] - Net income for Q2 2024 reached $11,234,000, a significant increase of 179% compared to $4,018,000 in Q2 2023[8] - Comprehensive income for the first half of 2024 was $18,652,000, up from $10,935,000 in the same period of 2023, reflecting a 70% increase[8] - Basic and diluted net income per common share for the three months ended June 30, 2024, was $0.20, down from $0.53 for the same period in 2023, a decline of 62.3%[6] - The efficiency ratio improved to 66.2% in Q2 2024 from 77.8% in Q2 2023, reflecting better operating leverage and expense management[184] Income and Revenue - Net interest income after provision for credit losses for the six months ended June 30, 2024, was $80,787 thousand, compared to $46,278 thousand for the same period in 2023, an increase of 74.5%[6] - Noninterest income for the six months ended June 30, 2024, totaled $15,007 thousand, compared to $10,628 thousand for the same period in 2023, an increase of 41.5%[6] - Noninterest income for Q2 2024 was $8.4 million, a 59.43% increase from $5.3 million in Q2 2023, driven by higher mortgage-banking revenue[191] - Total interest and dividend income for the three months ended June 30, 2024, was $73,106,000, a 99.56% increase from $36,633,000 in the same period last year[193] Assets and Liabilities - Total assets decreased to $5,864,017 thousand as of June 30, 2024, down from $6,010,918 thousand at December 31, 2023, representing a decline of approximately 2.43%[5] - Total deposits decreased to $5,148,885 thousand as of June 30, 2024, from $5,386,120 thousand at December 31, 2023, a decline of about 4.41%[5] - Total stockholders' equity as of June 30, 2024, was $522,783,000, compared to $363,140,000 as of June 30, 2023, indicating a growth of 44%[11] - Total loans as of June 30, 2024, amounted to $4,705.7 million, an increase from $4,641.0 million as of December 31, 2023[47] Credit Losses and Provisions - The allowance for credit losses increased to $58,478 thousand as of June 30, 2024, from $57,351 thousand at December 31, 2023, reflecting a rise of 1.96%[5] - The provision for credit losses for the first half of 2024 was $2,488,000, compared to $1,880,000 in the same period in 2023, representing a 32% increase[13] - Provision for credit losses increased to $2.1 million in Q2 2024, up 211.99% from $667,000 in Q2 2023, reflecting a cautious approach to potential credit risks[191] Deposits and Funding - Noninterest-bearing demand deposits increased to $1,587,252 thousand, representing 30.83% of total deposits, up from 23.36% at the end of 2023[93] - Total interest-bearing deposits decreased to $3,561,633 thousand, accounting for 69.17% of total deposits, down from 76.64%[93] - The aggregate amount of certificates of deposit exceeding the FDIC insurance limit of $250,000 was $372.7 million as of June 30, 2024, compared to $354.6 million at December 31, 2023[94] Capital Ratios - As of June 30, 2024, the Company reported a Common Tier 1 Capital to Risk-Weighted Assets (RWA) ratio of 9.06%, exceeding the minimum requirement of 7.00%[117] - The Company's Total Capital to RWA ratio stood at 11.82% on June 30, 2024, surpassing the minimum requirement of 10.50%[117] - The Company's Tier 1 Capital to Average Assets (Leverage) ratio was 8.07% on June 30, 2024, above the minimum requirement of 4.00%[117] Loan Performance - Non-accrual loans totaled $14.8 million as of June 30, 2024, with $10.986 million having no allowance for credit loss and $3.851 million with an allowance[49] - The residential real estate loan portfolio increased to $1,539.6 million, representing 32.72% of total loans as of June 30, 2024, up from 32.10% as of December 31, 2023[47] - The total amount of pass loans across all categories was $1,244,438 thousand, an increase from $441,351 thousand, representing a growth of approximately 182%[61] Strategic Initiatives - The company plans to continue focusing on market expansion and new product development to drive future growth[5] - The company plans to expand its market presence through new product offerings and technology advancements in the upcoming fiscal year[64] - The company is focusing on strategic acquisitions to enhance its market position and drive growth[64] Regulatory Compliance - The company maintained compliance with all capital adequacy requirements as of June 30, 2024[114] - The Company expects no material impact from the adoption of ASU 2023-09 regarding income tax disclosures, effective after December 15, 2024[18] - The Company does not anticipate a material impact from the adoption of ASU 2023-07 on segment reporting disclosures, effective after December 15, 2023[19]