Shore Bancshares(SHBI) - 2025 Q3 - Quarterly Results

Financial Performance - Shore Bancshares reported net income of $14.3 million, or $0.43 per diluted common share, for Q3 2025, a decrease from $15.5 million, or $0.46 per share in Q2 2025[3]. - Net income for Q3 2025 was $14,348,000, a decrease of 7.5% from Q2 2025 but an increase of 28.2% compared to Q3 2024[47]. - Adjusted net income (non-GAAP) was $15,889 in Q3 2025, a decrease of 7.7% from Q2 2025 but an increase of 20.5% year-over-year[37]. - Adjusted net income for the nine months ended September 30, 2025, was $48,585,000, up from $39,769,000 in the same period of 2024, reflecting a growth of 22.1%[57]. Income and Expenses - Total noninterest income for Q3 2025 was $7.7 million, a decrease of $1.6 million from Q2 2025, primarily due to a decrease in mortgage banking revenue[24]. - Total noninterest expense for Q3 2025 was $34.4 million, unchanged from Q2 2025, but increased by $265 thousand compared to Q3 2024[25]. - Total noninterest income for the nine months ended September 30, 2025, increased by $1.7 million, or 7.7%, compared to the same period in 2024[30]. - Total noninterest income for Q3 2025 was $7,701,000, a decrease of 17.4% from Q2 2025 but an increase of 5.7% year-over-year[47]. Interest Income and Margin - Net interest income increased by $1.4 million to $48.7 million in Q3 2025, with net interest margin expanding by 7 basis points to 3.42%[6]. - Net interest income for Q3 2025 was $48.7 million, up from $47.3 million in Q2 2025 and $43.3 million in Q3 2024, primarily due to an increase in interest income on loans of $1.2 million[21]. - Taxable-equivalent net interest income for Q3 2025 was $48,738, an increase of 3.0% from Q2 2025 and 12.4% from Q3 2024[37]. - The Company's net interest margin (NIM) increased to 3.42% in Q3 2025 from 3.35% in Q2 2025, driven by higher core interest income[22]. Assets and Liabilities - Total assets reached $6.28 billion at September 30, 2025, reflecting a 0.8% increase from $6.23 billion at December 31, 2024, driven by a $111.0 million increase in the loan portfolio[8]. - Total deposits rose by $214.2 million to $5.53 billion at September 30, 2025, primarily due to seasonal growth in municipal deposits[17]. - Total stockholders' equity increased by $36.1 million, or 6.7%, compared to December 31, 2024, with total equity to total assets ratio at 9.19% as of September 30, 2025[20]. - Total assets increased to $6,278,479 thousand as of September 30, 2025, representing a 0.8% increase compared to June 30, 2025, and a 6.1% increase year-over-year[43]. Credit Quality - Nonperforming assets increased to $28.1 million, or 0.45% of total assets, at September 30, 2025, up from $19.6 million, or 0.33% at June 30, 2025[16]. - The allowance for credit losses was $59.6 million at September 30, 2025, representing 1.22% of loans[6]. - Provision for credit losses was $3.0 million for Q3 2025, up from $1.5 million in both Q2 2025 and Q3 2024, due to higher reserves related to loan portfolio growth[23]. - Nonperforming assets totaled $28,083 thousand in September 2025, up from $19,633 thousand in June 2025, reflecting a 43.1% increase[66]. Efficiency and Ratios - The efficiency ratio for Q3 2025 was 61.00%, compared to 60.83% in Q2 2025, indicating a slight decline in operational efficiency[6]. - The efficiency ratio improved to 61.00% in Q3 2025 from 67.49% in Q3 2024, indicating better cost management[58]. - Return on average assets (GAAP) was 0.95% in Q3 2025, down 8 basis points from Q2 2025 but up 26 basis points from Q3 2024[37]. - The annualized adjusted return on average tangible common equity was 13.27% in Q3 2025, compared to 12.37% in Q3 2024, showing enhanced profitability for shareholders[57]. Capital and Equity - The tangible common equity ratio improved to 7.80% at September 30, 2025, compared to 7.17% at December 31, 2024[9]. - Common Equity Tier 1 Capital reached $496,709 thousand, an increase of 2.64% from Q2 2025 and 11.27% from Q3 2024[42]. - Total Capital rose to $627,055 thousand, reflecting a 1.34% increase from Q2 2025 and 8.18% from Q3 2024[42]. - Total stockholders' equity rose to $577,207 thousand, reflecting a 6.7% increase from June 30, 2025, and an 8.2% increase year-over-year[44].