Shore Bancshares, Inc. Reports 2025 Third Quarter Results

Core Insights - Shore Bancshares reported a net income of $14.3 million for Q3 2025, a decrease from $15.5 million in Q2 2025 and an increase from $11.2 million in Q3 2024 [1][9] - The company demonstrated resilience despite a decline in net income due to a significant marine loan write-off and softer noninterest income, while achieving growth in net interest margin and book value per share [3][9] Financial Performance - 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, driven by an increase in interest income on loans [19][28] - The net interest margin (NIM) increased to 3.42% in Q3 2025 from 3.35% in Q2 2025, with loan yields rising by 6 basis points and funding costs decreasing by 6 basis points [20][9] - Noninterest income decreased to $7.7 million in Q3 2025 from $9.3 million in Q2 2025, primarily due to reduced mortgage banking revenue [22][9] Asset Quality - Nonperforming assets increased to $28.1 million, or 0.45% of total assets, in Q3 2025, up from 0.33% in Q2 2025, attributed to commercial real estate and consumer loans [13][9] - The allowance for credit losses (ACL) was $59.6 million, representing 1.22% of loans, slightly up from 1.21% at the end of 2024 [9][21] Balance Sheet Highlights - Total assets reached $6.28 billion as of September 30, 2025, a 0.8% increase from $6.23 billion at the end of 2024, primarily due to a $111 million increase in the loan portfolio [4][9] - Total deposits increased by $214.2 million to $5.53 billion in Q3 2025, driven by seasonal growth in municipal deposits [14][9] Capital Ratios - The tangible common equity ratio improved to 7.80% at September 30, 2025, compared to 7.17% at the end of 2024 [5][9] - Tier 1 and Total Risk-Based Capital Ratios were 10.82% and 12.88%, respectively, as of September 30, 2025 [5][9] Efficiency Metrics - The efficiency ratio for Q3 2025 was 61.00%, slightly up from 60.83% in Q2 2025 but significantly improved from 67.49% in Q3 2024 [26][9] - Non-GAAP efficiency ratio was 57.30% for Q3 2025, compared to 56.73% in Q2 2025 and 62.10% in Q3 2024 [26][9]