Exhibit 99.1
Shore Bancshares, Inc.
18 E. Dover Street
Easton, Maryland 21601
Phone 410-763-7800
PRESS RELEASE
Shore Bancshares Reports 2010 Results
Easton, Maryland (1/26/2011) - Shore Bancshares, Inc. (NASDAQ - SHBI) reported net income of $850 thousand or $0.10 per diluted common share for the fourth quarter of 2010, compared to a net loss of $1.4 million or $(0.17) per diluted common share for the third quarter of 2010, and net income of $1.2 million or $0.14 per diluted common share for the fourth quarter of 2009. The main contributors to the fluctuations in net income were goodwill impairment charges during the third quarter of 2010 and provisions for credit losses. During the third quarter of 2010, the Company recorded goodwill impairment charges of $3.0 million and other intangible assets impairment charges of $51 thousand. The provision for credit losses was $4.4 million in the fourth quarter of 2010, which was $199 thousand higher than the provision for the third quarter of 2010 and $724 thousand higher than the provision for the fourth quarter of 2009.
The Company reported a net loss of $1.7 million or $(0.20) per diluted common share for 2010, compared to net income of $5.4 million or $0.64 per diluted common share for 2009. The 2010 net loss included the previously mentioned goodwill and other intangible assets impairment charges of $3.051 million. The provision for credit losses was $21.1 million and $9.0 million for 2010 and 2009, respectively. For 2009, net income available to common shareholders was negatively impacted by $1.9 million in dividends and discount accretion associated with the sale and subsequent repurchase of preferred stock under the U.S. Department of the Treasury’s Troubled Asset Relief Program Capital Purchase Program.
“We are proactively managing our way through a very tough operating environment for community banks. At this stage of the persistent cycle, even traditionally resilient markets with the best demographics such as those within our Delmarva footprint are showing strain,” said W. Moorhead Vermilye, chief executive officer.
“Although it was a disappointing year, we produced a modest profit for the fourth quarter. The company’s net interest margin was a respectable 4.09% for the fourth quarter, up 9 basis points over the third quarter and ahead 19 basis points from the final quarter of 2009. We again set aside a substantial provision for credit losses in the fourth quarter, bringing our total provision for the full year to over $21 million, which we believe is prudent given the impact the economic downturn has had on our real estate markets.”
“Our capital ratios continue to remain healthy, with year-to-date average equity to average assets of 11.05% and average tangible equity to average tangible assets of 9.43%. We remain well-capitalized, with our capital ratios continuing to be well in excess of regulatory minimums,” said Vermilye.
The Company’s return on average assets for the fourth quarter of 2010 was 0.30%, compared to (0.49)% and 0.41% for the quarters ended September 30, 2010 and December 31, 2009, respectively. The return on average stockholders’ equity was 2.73% for the fourth quarter of 2010, compared to (4.43)% for the third quarter of 2010 and 3.75% for the fourth quarter of 2009.
The Company’s return on average assets for 2010 was (0.15)%, compared to 0.48% for 2009. The return on average stockholders’ equity was (1.33)% and 4.00% for 2010 and 2009, respectively.
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Total assets were $1.130 billion at December 31, 2010, compared to $1.157 billion at the end of 2009, a decrease of 2.3%. Total loans were $895.4 million, a decrease of 2.3%, and total deposits were $979.5 million, a decrease of 1.2%, when compared to December 31, 2009. At December 31, 2010, total stockholders’ equity was $122.5 million, a decrease of 4.1% from $127.8 million at the end of 2009. At the end of 2010, goodwill reflected the $3.0 million impairment charge and a $724 thousand increase related to a contingent payment to be made to Jack Martin and Associates, Inc. for meeting performance criteria outlined in its acquisition agreement.
Review of Quarterly Financial Results
Net interest income for the fourth quarter of 2010 was $10.9 million, a 1.7% increase from the third quarter of 2010 and a slight increase from the fourth quarter of 2009. The increase in net interest income when compared to the third quarter of 2010 and the fourth quarter of 2009 was primarily due to a decrease in the balances of and rates paid on interest bearing liabilities that more than offset the decline in the balances of earning assets. The Company’s net interest margin was 4.09% for the fourth quarter of 2010, an increase of 9 basis points when compared to the third quarter of 2010 and an increase of 19 basis points when compared to the fourth quarter of 2009.
As previously mentioned, the provision for credit losses was $4.4 million for the three months ended December 31, 2010, compared to $4.2 million and $3.7 million for the three months ended September 30, 2010 and the three months ended December 31, 2009, respectively. The ratio of the allowance for credit losses to period-end loans was 1.59% at December 31, 2010, compared to 1.45% at September 30, 2010 and 1.19% at December 31, 2009. Management believes that the provision for credit losses and the resulting allowance were adequate at December 31, 2010.
The continued large level of provision for credit losses was primarily in response to the overall increase in nonperforming assets and loan charge-offs, as well as overall economic conditions. Net charge-offs were $3.3 million for the fourth quarter of 2010, $4.3 million for the third quarter of 2010 and $3.5 million for the fourth quarter of 2009. The ratio of quarter-to-date annualized net charge-offs to average loans was 1.46% for the fourth quarter of 2010, 1.90% for the third quarter of 2010 and 1.51% for the fourth quarter of 2009. The ratio of nonperforming assets to total assets was 3.53% at December 31, 2010. The comparable nonperforming asset ratio was 3.38% at September 30, 2010, and 1.63% at December 31, 2009.
Total noninterest income for the fourth quarter of 2010 was $3.9 million, a decrease of $695 thousand, or 15.0%, when compared to the third quarter of 2010 and a decrease of $177 thousand, or 4.3%, when compared to the fourth quarter of 2009. Most of the decrease when compared to the third quarter of 2010 was due to a $397 thousand decrease in insurance agency commissions and a $224 thousand gain in the third quarter relating to the surrender of directors’ life insurance policies. The decrease when compared to the fourth quarter of 2009 was mainly due to a decrease in mortgage broker fees of $131 thousand. During 2010, the Company closed its mortgage brokerage subsidiary and now conducts brokerage activities through a minority series investment in an unrelated Delaware limited liability company under the name “Wye Mortgage Group”.
Total noninterest expense for the fourth quarter of 2010 was $9.1 million, a decrease of $3.5 million, or 28.1%, when compared to the third quarter of 2010 mainly due to third quarter goodwill impairment charges of $3.0 million and other intangible assets impairment charges of $51 thousand. Excluding the goodwill and other intangible assets impairment charges, total noninterest expense decreased $496 thousand, or 5.2%, when compared to the third quarter of 2010. When compared to the fourth quarter of 2009, total noninterest expense for the fourth quarter of 2010 decreased $293 thousand, or 3.1%, primarily due to lower salaries and wages expense.
Review of 2010 Financial Results
Net interest income for 2010 was $42.6 million, an increase of 3.0% when compared to 2009. The increase was primarily due to lower rates paid on interest bearing liabilities offsetting the decline in yields on earning assets. The net interest margin increased from 3.90% for 2009 to 4.02% for 2010.
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The provisions for credit losses for 2010 and 2009 were $21.1 million and $9.0 million, respectively. Net charge-offs were $17.8 million and $7.4 million for 2010 and 2009, respectively. The ratio of year-to-date annualized net charge-offs to average loans was 1.96% for 2010 and 0.81% for 2009.
Total noninterest income for 2010 was $18.0 million, a decline of $1.5 million, or 7.7%, when compared to 2009. The decrease in noninterest income was mainly due to a decline in insurance agency commissions of $1.0 million and mortgage broker fees of $666 thousand.
Total noninterest expense for 2010 was $41.7 million, an increase of $1.5 million, or 3.7%, when compared to 2009. The increase in noninterest expense was primarily due to the goodwill and other intangible assets impairment charges and higher expenses related to collection and other real estate owned activities which were partially offset by lower expenses accrued for bonus and profit sharing plans, lower insurance agency commissions expense and lower FDIC insurance premium expense. Excluding the goodwill and other intangible assets impairment charges, total noninterest expense decreased $1.6 million, or 3.9%, when compared to 2009.
Shore Bancshares Information
Shore Bancshares, Inc. is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland’s Eastern Shore. It is the parent company of two banks, The Talbot Bank of Easton, Maryland, and CNB; three insurance producer firms, The Avon-Dixon Agency, LLC, Elliott Wilson Insurance, LLC and Jack Martin and Associates, Inc; a wholesale insurance company, TSGIA, Inc; two insurance premium finance companies, Mubell Finance, LLC and ESFS, Inc; and a registered investment adviser firm, Wye Financial Services, LLC. Shore Bancshares, Inc. engages in the mortgage broker business under the name “Wye Mortgage Group” through a minority series investment in an unrelated Delaware limited liability company. Additional information is available at www.shbi.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but statements about management’s beliefs, plans and objectives. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled “Risk Factors”.
For further information contact: W. Moorhead Vermilye, Chief Executive Officer, 410-763-7800
| Shore Bancshares, Inc. | Page 4 of 10 |
Financial Highlights
(Dollars in thousands, except per share data)
| | | For the Three Months Ended | | | For the Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | % Change | | | 2010 | | | 2009 | | | % Change | |
| PROFITABILITY FOR THE PERIOD | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 10,866 | | | $ | 10,806 | | | | 0.6 | % | | $ | 42,639 | | | $ | 41,378 | | | | 3.0 | % |
| Provision for credit losses | | | 4,392 | | | | 3,668 | | | | 19.7 | | | | 21,119 | | | | 8,986 | | | | 135.0 | |
| Noninterest income | | | 3,948 | | | | 4,125 | | | | (4.3 | ) | | | 18,041 | | | | 19,541 | | | | (7.7 | ) |
| Noninterest expense | | | 9,082 | | | | 9,375 | | | | (3.1 | ) | | | 41,720 | | | | 40,248 | | | | 3.7 | |
| Income (loss) before income taxes | | | 1,340 | | | | 1,888 | | | | (29.0 | ) | | | (2,159 | ) | | | 11,685 | | | | (118.5 | ) |
| Income tax expense (benefit) | | | 490 | | | | 672 | | | | (27.1 | ) | | | (492 | ) | | | 4,412 | | | | (111.2 | ) |
| Net income (loss) | | | 850 | | | | 1,216 | | | | (30.1 | ) | | | (1,667 | ) | | | 7,273 | | | | (122.9 | ) |
| Preferred stock dividends and discount accretion | | | - | | | | - | | | | - | | | | - | | | | 1,876 | | | | (100.0 | ) |
| Net income (loss) available to common shareholders | | $ | 850 | | | $ | 1,216 | | | | (30.1 | ) | | $ | (1,667 | ) | | $ | 5,397 | | | | (130.9 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 0.30 | % | | | 0.41 | % | | | (26.8 | )% | | | (0.15 | )% | | | 0.48 | % | | | (131.3 | )% |
| Return on average equity (1) | | | 2.73 | | | | 3.75 | | | | (27.2 | ) | | | (1.33 | ) | | | 4.00 | | | | (133.3 | ) |
| Net interest margin | | | 4.09 | | | | 3.90 | | | | 4.9 | | | | 4.02 | | | | 3.90 | | | | 3.1 | |
| Efficiency ratio - GAAP based | | | 61.31 | | | | 62.79 | | | | (2.4 | ) | | | 68.75 | | | | 66.07 | | | | 4.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.10 | | | $ | 0.14 | | | | (28.6 | )% | | $ | (0.20 | ) | | $ | 0.86 | | | | (123.3 | )% |
| Basic net income (loss) per common share | | | 0.10 | | | | 0.14 | | | | (28.6 | ) | | | (0.20 | ) | | | 0.64 | | | | (131.3 | ) |
| Diluted net income (loss) per share | | | 0.10 | | | | 0.14 | | | | (28.6 | ) | | | (0.20 | ) | | | 0.86 | | | | (123.3 | ) |
| Diluted net income (loss) per common share | | | 0.10 | | | | 0.14 | | | | (28.6 | ) | | | (0.20 | ) | | | 0.64 | | | | (131.3 | ) |
| Dividends paid per common share | | | 0.06 | | | | 0.16 | | | | (62.5 | ) | | | 0.24 | | | | 0.64 | | | | (62.5 | ) |
| Book value per common share at period end | | | 14.51 | | | | 15.18 | | | | (4.4 | ) | | | | | | | | | | | | |
| Tangible book value per common share at period end | | | 12.32 | | | | 12.64 | | | | (2.5 | ) | | | | | | | | | | | | |
| Market value at period end | | | 10.54 | | | | 14.50 | | | | (27.3 | ) | | | | | | | | | | | | |
| Market range: | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | | 10.73 | | | | 17.71 | | | | (39.4 | ) | | | 14.80 | | | | 24.43 | | | | (39.4 | ) |
| Low | | | 9.25 | | | | 13.52 | | | | (31.6 | ) | | | 9.20 | | | | 11.00 | | | | (16.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| PERIOD-END BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 895,404 | | | $ | 916,557 | | | | (2.3 | )% | | | | | | | | | | | | |
| Securities | | | 105,782 | | | | 106,535 | | | | (0.7 | ) | | | | | | | | | | | | |
| Assets | | | 1,130,311 | | | | 1,156,516 | | | | (2.3 | ) | | | | | | | | | | | | |
| Deposits | | | 979,516 | | | | 990,937 | | | | (1.2 | ) | | | | | | | | | | | | |
| Stockholders' equity | | | 122,513 | | | | 127,810 | | | | (4.1 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| AVERAGE BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 903,075 | | | $ | 921,908 | | | | (2.0 | )% | | $ | 906,732 | | | $ | 913,631 | | | | (0.8 | )% |
| Securities | | | 103,600 | | | | 104,561 | | | | (0.9 | ) | | | 107,242 | | | | 92,354 | | | | 16.1 | |
| Earning assets | | | 1,060,645 | | | | 1,104,919 | | | | (4.0 | ) | | | 1,068,264 | | | | 1,068,601 | | | | - | |
| Assets | | | 1,128,517 | | | | 1,169,337 | | | | (3.5 | ) | | | 1,136,916 | | | | 1,128,912 | | | | 0.7 | |
| Deposits | | | 978,444 | | | | 1,002,982 | | | | (2.4 | ) | | | 980,332 | | | | 949,660 | | | | 3.2 | |
| Stockholders' equity | | | 123,341 | | | | 128,715 | | | | (4.2 | ) | | | 125,586 | | | | 134,978 | | | | (7.0 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL AND CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 10.93 | % | | | 11.01 | % | | | | | | | 11.05 | % | | | 11.96 | % | | | | |
| Annualized net charge-offs to average loans | | | 1.46 | | | | 1.51 | | | | | | | | 1.96 | | | | 0.81 | | | | | |
| Allowance for credit losses to period-end loans | | | 1.59 | | | | 1.19 | | | | | | | | | | | | | | | | | |
| Nonperforming assets to total loans+other real estate owned | | | 4.44 | | | | 2.05 | | | | | | | | | | | | | | | | | |
| Nonperforming assets to total assets | | | 3.53 | | | | 1.63 | | | | | | | | | | | | | | | | | |
| Nonperforming assets+Loans 90 days past due and still accruing to total loans+other real estate owned | | | 4.97 | | | | 2.86 | | | | | | | | | | | | | | | | | |
| Nonperforming assets+Loans 90 days past due and still accruing to total assets | | | 3.95 | | | | 2.27 | | | | | | | | | | | | | | | | | |
(1) Calculation uses net income (loss) available to common shareholders.
| Shore Bancshares, Inc. | Page 5 of 10 |
Consolidated Balance Sheets
(In thousands, except per share data)
| | | | | | | | | Dec. 31, 2010 | |
| | | Dec. 31, | | | Dec. 31, | | | compared to | |
| | | 2010 | | | 2009 | | | Dec. 31, 2009 | |
| ASSETS | | | | | | | | | |
| Cash and due from banks | | $ | 19,680 | | | $ | 14,411 | | | | 36.6 | % |
| Interest-bearing deposits with other banks | | | 21,593 | | | | 598 | | | | 3,510.9 | |
| Federal funds sold | | | 36,691 | | | | 60,637 | | | | (39.5 | ) |
| Investments available-for-sale (at fair value) | | | 99,055 | | | | 97,595 | | | | 1.5 | |
| Investments held-to-maturity | | | 6,727 | | | | 8,940 | | | | (24.8 | ) |
| | | | | | | | | | | | | |
| Loans | | | 895,404 | | | | 916,557 | | | | (2.3 | ) |
| Less: allowance for credit losses | | | (14,227 | ) | | | (10,876 | ) | | | 30.8 | |
| Loans, net | | | 881,177 | | | | 905,681 | | | | (2.7 | ) |
| | | | | | | | | | | | | |
| Premises and equipment, net | | | 14,483 | | | | 14,307 | | | | 1.2 | |
| Goodwill | | | 13,678 | | | | 15,954 | | | | (14.3 | ) |
| Other intangible assets, net | | | 4,840 | | | | 5,406 | | | | (10.5 | ) |
| Other real estate and other assets owned, net | | | 3,702 | | | | 2,572 | | | | 43.9 | |
| Other assets | | | 28,685 | | | | 30,415 | | | | (5.7 | ) |
| | | | | | | | | | | | | |
| Total assets | | $ | 1,130,311 | | | $ | 1,156,516 | | | | (2.3 | ) |
| | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 124,188 | | | $ | 122,492 | | | | 1.4 | |
| Interest-bearing deposits | | | 855,328 | | | | 868,445 | | | | (1.5 | ) |
| Total deposits | | | 979,516 | | | | 990,937 | | | | (1.2 | ) |
| | | | | | | | | | | | | |
| Short-term borrowings | | | 16,041 | | | | 20,404 | | | | (21.4 | ) |
| Accrued expenses and other liabilities | | | 11,309 | | | | 15,936 | | | | (29.0 | ) |
| Long-term debt | | | 932 | | | | 1,429 | | | | (34.8 | ) |
| Total liabilities | | | 1,007,798 | | | | 1,028,706 | | | | (2.0 | ) |
| | | | | | | | | | | | | |
| STOCKHOLDERS' EQUITY | | | | | | | | | | | | |
| Common stock, par value $0.01; authorized 35,000,000 shares | | | 84 | | | | 84 | | | | - | |
| Warrant | | | 1,543 | | | | 1,543 | | | | - | |
| Additional paid in capital | | | 30,242 | | | | 29,872 | | | | 1.2 | |
| Retained earnings | | | 92,458 | | | | 96,151 | | | | (3.8 | ) |
| Accumulated other comprehensive (loss) income | | | (1,814 | ) | | | 160 | | | | (1,233.8 | ) |
| Total stockholders' equity | | | 122,513 | | | | 127,810 | | | | (4.1 | ) |
| | | | | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,130,311 | | | $ | 1,156,516 | | | | (2.3 | ) |
| | | | | | | | | | | | | |
| Period-end common shares outstanding | | | 8,443 | | | | 8,419 | | | | 0.3 | |
| Book value per common share | | $ | 14.51 | | | $ | 15.18 | | | | (4.4 | ) |
Consolidated Statements of Income
(In thousands, except per share data)
| | | For the Three Months Ended | | | For the Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | % Change | | | 2010 | | | 2009 | | | % Change | |
| INTEREST INCOME | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 12,958 | | | $ | 13,837 | | | | (6.4 | )% | | $ | 51,962 | | | $ | 55,209 | | | | (5.9 | )% |
| Interest and dividends on investment securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 804 | | | | 860 | | | | (6.5 | ) | | | 3,209 | | | | 3,184 | | | | 0.8 | |
| Tax-exempt | | | 47 | | | | 60 | | | | (21.7 | ) | | | 212 | | | | 301 | | | | (29.6 | ) |
| Interest on federal funds sold | | | 13 | | | | 23 | | | | (43.5 | ) | | | 60 | | | | 84 | | | | (28.6 | ) |
| Interest on deposits with other banks | | | 7 | | | | - | | | | - | | | | 18 | | | | 11 | | | | 63.6 | |
| Total interest income | | | 13,829 | | | | 14,780 | | | | (6.4 | ) | | | 55,461 | | | | 58,789 | | | | (5.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 2,937 | | | | 3,924 | | | | (25.2 | ) | | | 12,681 | | | | 17,018 | | | | (25.5 | ) |
| Interest on short-term borrowings | | | 15 | | | | 31 | | | | (51.6 | ) | | | 83 | | | | 127 | | | | (34.6 | ) |
| Interest on long-term debt | | | 11 | | | | 19 | | | | (42.1 | ) | | | 58 | | | | 266 | | | | (78.2 | ) |
| Total interest expense | | | 2,963 | | | | 3,974 | | | | (25.4 | ) | | | 12,822 | | | | 17,411 | | | | (26.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME | | | 10,866 | | | | 10,806 | | | | 0.6 | | | | 42,639 | | | | 41,378 | | | | 3.0 | |
| Provision for credit losses | | | 4,392 | | | | 3,668 | | | | 19.7 | | | | 21,119 | | | | 8,986 | | | | 135.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | | 6,474 | | | | 7,138 | | | | (9.3 | ) | | | 21,520 | | | | 32,392 | | | | (33.6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 799 | | | | 866 | | | | (7.7 | ) | | | 3,257 | | | | 3,424 | | | | (4.9 | ) |
| Trust and investment fee income | | | 358 | | | | 350 | | | | 2.3 | | | | 1,503 | | | | 1,100 | | | | 36.6 | |
| Investment securities gains (losses) | | | - | | | | - | | | | - | | | | - | | | | 49 | | | | (100.0 | ) |
| Insurance agency commissions | | | 2,116 | | | | 2,159 | | | | (2.0 | ) | | | 10,113 | | | | 11,131 | | | | (9.1 | ) |
| Other noninterest income | | | 675 | | | | 750 | | | | (10.0 | ) | | | 3,168 | | | | 3,837 | | | | (17.4 | ) |
| Total noninterest income | | | 3,948 | | | | 4,125 | | | | (4.3 | ) | | | 18,041 | | | | 19,541 | | | | (7.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and wages | | | 4,220 | | | | 4,424 | | | | (4.6 | ) | | | 17,477 | | | | 18,488 | | | | (5.5 | ) |
| Employee benefits | | | 893 | | | | 840 | | | | 6.3 | | | | 3,829 | | | | 4,631 | | | | (17.3 | ) |
| Occupancy expense | | | 562 | | | | 572 | | | | (1.7 | ) | | | 2,328 | | | | 2,324 | | | | 0.2 | |
| Furniture and equipment expense | | | 262 | | | | 268 | | | | (2.2 | ) | | | 1,200 | | | | 1,183 | | | | 1.4 | |
| Data processing | | | 620 | | | | 598 | | | | 3.7 | | | | 2,607 | | | | 2,463 | | | | 5.8 | |
| Directors' fees | | | 68 | | | | 84 | | | | (19.0 | ) | | | 412 | | | | 478 | | | | (13.8 | ) |
| Goodwill and other intangible assets impairment | | | - | | | | - | | | | - | | | | 3,051 | | | | - | | | | - | |
| Amortization of intangible assets | | | 129 | | | | 129 | | | | - | | | | 515 | | | | 515 | | | | - | |
| Insurance agency commissions expense | | | 339 | | | | 398 | | | | (14.8 | ) | | | 1,569 | | | | 1,913 | | | | (18.0 | ) |
| FDIC insurance premium expense | | | 445 | | | | 457 | | | | (2.6 | ) | | | 1,834 | | | | 2,078 | | | | (11.7 | ) |
| Other noninterest expenses | | | 1,544 | | | | 1,605 | | | | (3.8 | ) | | | 6,898 | | | | 6,175 | | | | 11.7 | |
| Total noninterest expense | | | 9,082 | | | | 9,375 | | | | (3.1 | ) | | | 41,720 | | | | 40,248 | | | | 3.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 1,340 | | | | 1,888 | | | | (29.0 | ) | | | (2,159 | ) | | | 11,685 | | | | (118.5 | ) |
| Income tax expense (benefit) | | | 490 | | | | 672 | | | | (27.1 | ) | | | (492 | ) | | | 4,412 | | | | (111.2 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) | | | 850 | | | | 1,216 | | | | (30.1 | ) | | | (1,667 | ) | | | 7,273 | | | | (122.9 | ) |
| Preferred stock dividends and discount accretion | | | - | | | | - | | | | - | | | | - | | | | 1,876 | | | | (100.0 | ) |
| Net income (loss) available to common shareholders | | $ | 850 | | | $ | 1,216 | | | | (30.1 | ) | | $ | (1,667 | ) | | $ | 5,397 | | | | (130.9 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - basic | | | 8,443 | | | | 8,419 | | | | 0.3 | | | | 8,442 | | | | 8,414 | | | | 0.3 | |
| Weighted average shares outstanding - diluted | | | 8,443 | | | | 8,421 | | | | 0.3 | | | | 8,442 | | | | 8,417 | | | | 0.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.10 | | | $ | 0.14 | | | | (28.6 | ) | | $ | (0.20 | ) | | $ | 0.86 | | | | (123.3 | ) |
| Basic net income (loss) per common share | | | 0.10 | | | | 0.14 | | | | (28.6 | ) | | | (0.20 | ) | | | 0.64 | | | | (131.3 | ) |
| Diluted net income (loss) per share | | | 0.10 | | | | 0.14 | | | | (28.6 | ) | | | (0.20 | ) | | | 0.86 | | | | (123.3 | ) |
| Diluted net income (loss) per common share | | | 0.10 | | | | 0.14 | | | | (28.6 | ) | | | (0.20 | ) | | | 0.64 | | | | (131.3 | ) |
| Dividends paid per common share | | | 0.06 | | | | 0.16 | | | | (62.5 | ) | | | 0.24 | | | | 0.64 | | | | (62.5 | ) |
| Shore Bancshares, Inc. | Page 7 of 10 |
Consolidated Average Balance Sheets
(Dollars in thousands)
| | | For the Three Months Ended | | | For the Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | |
| | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | |
| Earning assets | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 903,075 | | | | 5.71 | % | | $ | 921,908 | | | | 5.97 | % | | $ | 906,732 | | | | 5.75 | % | | $ | 913,631 | | | | 6.06 | % |
| Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 98,378 | | | | 3.24 | | | | 97,595 | | | | 3.50 | | | | 101,162 | | | | 3.17 | | | | 84,283 | | | | 3.78 | |
| Tax-exempt | | | 5,222 | | | | 5.40 | | | | 6,966 | | | | 4.96 | | | | 6,080 | | | | 5.29 | | | | 8,071 | | | | 5.67 | |
| Federal funds sold | | | 34,018 | | | | 0.16 | | | | 77,782 | | | | 0.11 | | | | 39,770 | | | | 0.15 | | | | 59,416 | | | | 0.14 | |
| Interest-bearing deposits | | | 19,952 | | | | 0.12 | | | | 668 | | | | 0.45 | | | | 14,520 | | | | 0.12 | | | | 3,200 | | | | 0.35 | |
| Total earning assets | | | 1,060,645 | | | | 5.20 | % | | | 1,104,919 | | | | 5.33 | % | | | 1,068,264 | | | | 5.22 | % | | | 1,068,601 | | | | 5.53 | % |
| Cash and due from banks | | | 19,867 | | | | | | | | 17,312 | | | | | | | | 16,567 | | | | | | | | 17,049 | | | | | |
| Other assets | | | 62,305 | | | | | | | | 58,543 | | | | | | | | 65,774 | | | | | | | | 54,016 | | | | | |
| Allowance for credit losses | | | (14,300 | ) | | | | | | | (11,437 | ) | | | | | | | (13,689 | ) | | | | | | | (10,754 | ) | | | | |
| Total assets | | $ | 1,128,517 | | | | | | | $ | 1,169,337 | | | | | | | $ | 1,136,916 | | | | | | | $ | 1,128,912 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 128,592 | | | | 0.22 | % | | $ | 127,537 | | | | 0.26 | % | | $ | 130,297 | | | | 0.24 | % | | $ | 124,758 | | | | 0.25 | % |
| Money market and savings deposits | | | 258,713 | | | | 0.84 | | | | 249,393 | | | | 0.66 | | | | 258,650 | | | | 0.76 | | | | 218,125 | | | | 0.62 | |
| Certificates of deposit $100,000 or more | | | 256,167 | | | | 1.77 | | | | 276,390 | | | | 2.51 | | | | 256,393 | | | | 2.00 | | | | 258,879 | | | | 2.96 | |
| Other time deposits | | | 208,808 | | | | 2.23 | | | | 228,020 | | | | 2.91 | | | | 214,121 | | | | 2.46 | | | | 234,468 | | | | 3.28 | |
| Interest-bearing deposits | | | 852,280 | | | | 1.37 | | | | 881,340 | | | | 1.77 | | | | 859,461 | | | | 1.48 | | | | 836,230 | | | | 2.04 | |
| Short-term borrowings | | | 15,381 | | | | 0.39 | | | | 18,994 | | | | 0.63 | | | | 16,348 | | | | 0.51 | | | | 25,519 | | | | 0.50 | |
| Long-term debt | | | 932 | | | | 4.46 | | | | 1,429 | | | | 5.28 | | | | 1,304 | | | | 4.41 | | | | 4,792 | | | | 5.55 | |
| Total interest-bearing liabilities | | | 868,593 | | | | 1.35 | % | | | 901,763 | | | | 1.75 | % | | | 877,113 | | | | 1.46 | % | | | 866,541 | | | | 2.01 | % |
| Noninterest-bearing deposits | | | 126,164 | | | | | | | | 121,642 | | | | | | | | 120,871 | | | | | | | | 113,430 | | | | | |
| Accrued expenses and other liabilities | | | 10,419 | | | | | | | | 17,217 | | | | | | | | 13,346 | | | | | | | | 13,963 | | | | | |
| Stockholders' equity | | | 123,341 | | | | | | | | 128,715 | | | | | | | | 125,586 | | | | | | | | 134,978 | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,128,517 | | | | | | | $ | 1,169,337 | | | | | | | $ | 1,136,916 | | | | | | | $ | 1,128,912 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest spread | | | | | | | 3.85 | % | | | | | | | 3.58 | % | | | | | | | 3.76 | % | | | | | | | 3.52 | % |
| Net interest margin | | | | | | | 4.09 | % | | | | | | | 3.90 | % | | | | | | | 4.02 | % | | | | | | | 3.90 | % |
Financial Highlights By Quarter
(Dollars in thousands, except per share data)
| | | 4th quarter | | | 3rd quarter | | | 2 nd quarter | | | 1st quarter | | | 4th quarter | | | 4Q 10 | | | 4Q 10 | |
| | | 2010 | | | 2010 | | | 2010 | | | 2010 | | | 2009 | | | compared to | | | compared to | |
| | | (4Q 10) | | | (3Q 10) | | | (2Q 10) | | | (1Q 10) | | | (4Q 09) | | | 3Q 10 | | | 4Q 09 | |
| PROFITABILITY FOR THE PERIOD | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 10,866 | | | $ | 10,687 | | | $ | 10,691 | | | $ | 10,395 | | | $ | 10,806 | | | | 1.7 | % | | | 0.6 | % |
| Provision for credit losses | | | 4,392 | | | | 4,193 | | | | 4,917 | | | | 7,617 | | | | 3,668 | | | | 4.7 | | | | 19.7 | |
| Noninterest income | | | 3,948 | | | | 4,643 | | | | 4,568 | | | | 4,882 | | | | 4,125 | | | | (15.0 | ) | | | (4.3 | ) |
| Noninterest expense | | | 9,082 | | | | 12,629 | | | | 9,688 | | | | 10,321 | | | | 9,375 | | | | (28.1 | ) | | | (3.1 | ) |
| Income (loss) before income taxes | | | 1,340 | | | | (1,492 | ) | | | 654 | | | | (2,661 | ) | | | 1,888 | | | | 189.8 | | | | (29.0 | ) |
| Income tax expense (benefit) | | | 490 | | | | (92 | ) | | | 209 | | | | (1,099 | ) | | | 672 | | | | 632.6 | | | | (27.1 | ) |
| Net income (loss) | | | 850 | | | | (1,400 | ) | | | 445 | | | | (1,562 | ) | | | 1,216 | | | | 160.7 | | | | (30.1 | ) |
| Preferred stock dividends and discount accretion | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Net income (loss) available to common shareholders | | $ | 850 | | | $ | (1,400 | ) | | $ | 445 | | | $ | (1,562 | ) | | $ | 1,216 | | | | 160.7 | | | | (30.1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 0.30 | % | | | (0.49 | )% | | | 0.16 | % | | | (0.55 | )% | | | 0.41 | % | | | 161.2 | % | | | (26.8 | )% |
| Return on average equity (1) | | | 2.73 | | | | (4.43 | ) | | | 1.42 | | | | (4.95 | ) | | | 3.75 | | | | 161.6 | | | | (27.2 | ) |
| Net interest margin | | | 4.09 | | | | 4.00 | | | | 4.03 | | | | 3.95 | | | | 3.90 | | | | 2.3 | | | | 4.9 | |
| Efficiency ratio - GAAP based | | | 61.31 | | | | 82.38 | | | | 63.49 | | | | 67.56 | | | | 62.79 | | | | (25.6 | ) | | | (2.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.10 | | | $ | (0.17 | ) | | $ | 0.05 | | | $ | (0.19 | ) | | $ | 0.14 | | | | 158.8 | % | | | (28.6 | )% |
| Basic net income (loss) per common share | | | 0.10 | | | | (0.17 | ) | | | 0.05 | | | | (0.19 | ) | | | 0.14 | | | | 158.8 | | | | (28.6 | ) |
| Diluted net income (loss) per share | | | 0.10 | | | | (0.17 | ) | | | 0.05 | | | | (0.19 | ) | | | 0.14 | | | | 158.8 | | | | (28.6 | ) |
| Diluted net income (loss) per common share | | | 0.10 | | | | (0.17 | ) | | | 0.05 | | | | (0.19 | ) | | | 0.14 | | | | 158.8 | | | | (28.6 | ) |
| Dividends paid per common share | | | 0.06 | | | | 0.06 | | | | 0.06 | | | | 0.06 | | | | 0.16 | | | | - | | | | (62.5 | ) |
| Book value per common share at period end | | | 14.51 | | | | 14.49 | | | | 14.77 | | | | 14.82 | | | | 15.18 | | | | 0.1 | | | | (4.4 | ) |
| Tangible book value per common share at period end | | | 12.32 | | | | 12.37 | | | | 12.27 | | | | 12.30 | | | | 12.64 | | | | (0.4 | ) | | | (2.5 | ) |
| Market value at period end | | | 10.54 | | | | 9.48 | | | | 11.91 | | | | 14.25 | | | | 14.50 | | | | 11.2 | | | | (27.3 | ) |
| Market range: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | | 10.73 | | | | 12.10 | | | | 14.80 | | | | 14.75 | | | | 17.71 | | | | (11.3 | ) | | | (39.4 | ) |
| Low | | | 9.25 | | | | 9.20 | | | | 11.75 | | | | 10.21 | | | | 13.52 | | | | 0.5 | | | | (31.6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PERIOD-END BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 895,404 | | | $ | 906,490 | | | $ | 905,477 | | | $ | 905,194 | | | $ | 916,557 | | | | (1.2 | )% | | | (2.3 | )% |
| Securities | | | 105,782 | | | | 104,075 | | | | 106,556 | | | | 112,929 | | | | 106,535 | | | | 1.6 | | | | (0.7 | ) |
| Assets | | | 1,130,311 | | | | 1,134,503 | | | | 1,129,196 | | | | 1,146,334 | | | | 1,156,516 | | | | (0.4 | ) | | | (2.3 | ) |
| Deposits | | | 979,516 | | | | 982,428 | | | | 971,608 | | | | 990,750 | | | | 990,937 | | | | (0.3 | ) | | | (1.2 | ) |
| Stockholders' equity | | | 122,513 | | | | 122,355 | | | | 124,666 | | | | 125,108 | | | | 127,810 | | | | 0.1 | | | | (4.1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AVERAGE BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 903,075 | | | $ | 904,293 | | | $ | 909,295 | | | $ | 910,374 | | | $ | 921,908 | | | | (0.1 | )% | | | (2.0 | )% |
| Securities | | | 103,600 | | | | 105,466 | | | | 109,744 | | | | 110,252 | | | | 104,561 | | | | (1.8 | ) | | | (0.9 | ) |
| Earning assets | | | 1,060,645 | | | | 1,066,063 | | | | 1,071,115 | | | | 1,075,425 | | | | 1,104,919 | | | | (0.5 | ) | | | (4.0 | ) |
| Assets | | | 1,128,517 | | | | 1,139,043 | | | | 1,134,662 | | | | 1,145,607 | | | | 1,169,337 | | | | (0.9 | ) | | | (3.5 | ) |
| Deposits | | | 978,444 | | | | 984,018 | | | | 976,749 | | | | 982,265 | | | | 1,002,982 | | | | (0.6 | ) | | | (2.4 | ) |
| Stockholders' equity | | | 123,341 | | | | 125,308 | | | | 125,670 | | | | 128,081 | | | | 128,715 | | | | (1.6 | ) | | | (4.2 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL AND CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 10.93 | % | | | 11.00 | % | | | 11.08 | % | | | 11.18 | % | | | 11.01 | % | | | | | | | | |
| Annualized net charge-offs to average loans | | | 1.46 | | | | 1.90 | | | | 1.95 | | | | 2.54 | | | | 1.51 | | | | | | | | | |
| Allowance for credit losses to period-end loans | | | 1.59 | | | | 1.45 | | | | 1.47 | | | | 1.41 | | | | 1.19 | | | | | | | | | |
| Nonperforming assets to total loans+other real estate owned | | | 4.44 | | | | 4.22 | | | | 4.29 | | | | 3.62 | | | | 2.05 | | | | | | | | | |
| Nonperforming assets to total assets | | | 3.53 | | | | 3.38 | | | | 3.45 | | | | 2.87 | | | | 1.63 | | | | | | | | | |
| Nonperforming assets+Loans 90 days past due and still accruing to total loans+other real estate owned | | | 4.97 | | | | 4.58 | | | | 4.81 | | | | 3.93 | | | | 2.86 | | | | | | | | | |
| Nonperforming assets+Loans 90 days past due and still accruing to total assets | | | 3.95 | | | | 3.67 | | | | 3.86 | | | | 3.11 | | | | 2.27 | | | | | | | | | |
(1) Calculation uses net income (loss) available to common shareholders.
| Shore Bancshares, Inc. | Page 9 of 10 |
Consolidated Statements of Income By Quarter
(In thousands, except per share data)
| | | | | | | | | | | | | | | | | | 4Q 10 | | | 4Q 10 | |
| | | | | | | | | | | | | | | | | | compared to | | | compared to | |
| | | 4Q 10 | | | 3Q 10 | | | 2Q 10 | | | 1Q 10 | | | 4Q 09 | | | 3Q 10 | | | 4Q 09 | |
| INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 12,958 | | | $ | 13,083 | | | $ | 13,047 | | | $ | 12,874 | | | $ | 13,837 | | | | (1.0 | ) % | | | (6.4 | ) % |
| Interest and dividends on investment securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 804 | | | | 677 | | | | 846 | | | | 882 | | | | 860 | | | | 18.8 | | | | (6.5 | ) |
| Tax-exempt | | | 47 | | | | 50 | | | | 56 | | | | 59 | | | | 60 | | | | (6.0 | ) | | | (21.7 | ) |
| Interest on federal funds sold | | | 13 | | | | 21 | | | | 14 | | | | 12 | | | | 23 | | | | (38.1 | ) | | | (43.5 | ) |
| Interest on deposits with other banks | | | 7 | | | | 6 | | | | 4 | | | | 1 | | | | - | | | | 16.7 | | | | - | |
| Total interest income | | | 13,829 | | | | 13,837 | | | | 13,967 | | | | 13,828 | | | | 14,780 | | | | (0.1 | ) | | | (6.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 2,937 | | | | 3,117 | | | | 3,242 | | | | 3,385 | | | | 3,924 | | | | (5.8 | ) | | | (25.2 | ) |
| Interest on short-term borrowings | | | 15 | | | | 17 | | | | 19 | | | | 32 | | | | 31 | | | | (11.8 | ) | | | (51.6 | ) |
| Interest on long-term debt | | | 11 | | | | 16 | | | | 15 | | | | 16 | | | | 19 | | | | (31.3 | ) | | | (42.1 | ) |
| Total interest expense | | | 2,963 | | | | 3,150 | | | | 3,276 | | | | 3,433 | | | | 3,974 | | | | (5.9 | ) | | | (25.4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME | | | 10,866 | | | | 10,687 | | | | 10,691 | | | | 10,395 | | | | 10,806 | | | | 1.7 | | | | 0.6 | |
| Provision for credit losses | | | 4,392 | | | | 4,193 | | | | 4,917 | | | | 7,617 | | | | 3,668 | | | | 4.7 | | | | 19.7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | | 6,474 | | | | 6,494 | | | | 5,774 | | | | 2,778 | | | | 7,138 | | | | (0.3 | ) | | | (9.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 799 | | | | 841 | | | | 831 | | | | 786 | | | | 866 | | | | (5.0 | ) | | | (7.7 | ) |
| Trust and investment fee income | | | 358 | | | | 357 | | | | 372 | | | | 416 | | | | 350 | | | | 0.3 | | | | 2.3 | |
| Investment securities gains (losses) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Insurance agency commissions | | | 2,116 | | | | 2,513 | | | | 2,595 | | | | 2,889 | | | | 2,159 | | | | (15.8 | ) | | | (2.0 | ) |
| Other noninterest income | | | 675 | | | | 932 | | | | 770 | | | | 791 | | | | 750 | | | | (27.6 | ) | | | (10.0 | ) |
| Total noninterest income | | | 3,948 | | | | 4,643 | | | | 4,568 | | | | 4,882 | | | | 4,125 | | | | (15.0 | ) | | | (4.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and wages | | | 4,220 | | | | 4,404 | | | | 4,363 | | | | 4,490 | | | | 4,424 | | | | (4.2 | ) | | | (4.6 | ) |
| Employee benefits | | | 893 | | | | 897 | | | | 758 | | | | 1,281 | | | | 840 | | | | (0.4 | ) | | | 6.3 | |
| Occupancy expense | | | 562 | | | | 547 | | | | 597 | | | | 622 | | | | 572 | | | | 2.7 | | | | (1.7 | ) |
| Furniture and equipment expense | | | 262 | | | | 325 | | | | 313 | | | | 300 | | | | 268 | | | | (19.4 | ) | | | (2.2 | ) |
| Data processing | | | 620 | | | | 696 | | | | 660 | | | | 631 | | | | 598 | | | | (10.9 | ) | | | 3.7 | |
| Directors' fees | | | 68 | | | | 118 | | | | 105 | | | | 121 | | | | 84 | | | | (42.4 | ) | | | (19.0 | ) |
| Goodwill and other intangible assets impairment | | | - | | | | 3,051 | | | | - | | | | - | | | | - | | | | (100.0 | ) | | | - | |
| Amortization of intangible assets | | | 129 | | | | 128 | | | | 129 | | | | 129 | | | | 129 | | | | 0.8 | | | | - | |
| Insurance agency commissions expense | | | 339 | | | | 338 | | | | 464 | | | | 428 | | | | 398 | | | | 0.3 | | | | (14.8 | ) |
| FDIC insurance premium expense | | | 445 | | | | 448 | | | | 460 | | | | 481 | | | | 457 | | | | (0.7 | ) | | | (2.6 | ) |
| Other noninterest expenses | | | 1,544 | | | | 1,677 | | | | 1,839 | | | | 1,838 | | | | 1,605 | | | | (7.9 | ) | | | (3.8 | ) |
| Total noninterest expense | | | 9,082 | | | | 12,629 | | | | 9,688 | | | | 10,321 | | | | 9,375 | | | | (28.1 | ) | | | (3.1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 1,340 | | | | (1,492 | ) | | | 654 | | | | (2,661 | ) | | | 1,888 | | | | 189.8 | | | | (29.0 | ) |
| Income tax expense (benefit) | | | 490 | | | | (92 | ) | | | 209 | | | | (1,099 | ) | | | 672 | | | | 632.6 | | | | (27.1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) | | | 850 | | | | (1,400 | ) | | | 445 | | | | (1,562 | ) | | | 1,216 | | | | 160.7 | | | | (30.1 | ) |
| Preferred stock dividends and discount accretion | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Net income (loss) available to common shareholders | | $ | 850 | | | $ | (1,400 | ) | | $ | 445 | | | $ | (1,562 | ) | | $ | 1,216 | | | | 160.7 | | | | (30.1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - basic | | | 8,443 | | | | 8,443 | | | | 8,443 | | | | 8,436 | | | | 8,419 | | | | - | | | | 0.3 | |
| Weighted average shares outstanding - diluted | | | 8,443 | | | | 8,443 | | | | 8,443 | | | | 8,436 | | | | 8,421 | | | | - | | | | 0.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.10 | | | $ | (0.17 | ) | | $ | 0.05 | | | $ | (0.19 | ) | | $ | 0.14 | | | | 158.8 | | | | (28.6 | ) |
| Basic net income (loss) per common share | | | 0.10 | | | | (0.17 | ) | | | 0.05 | | | | (0.19 | ) | | | 0.14 | | | | 158.8 | | | | (28.6 | ) |
| Diluted net income (loss) per share | | | 0.10 | | | | (0.17 | ) | | | 0.05 | | | | (0.19 | ) | | | 0.14 | | | | 158.8 | | | | (28.6 | ) |
| Diluted net income (loss) per common share | | | 0.10 | | | | (0.17 | ) | | | 0.05 | | | | (0.19 | ) | | | 0.14 | | | | 158.8 | | | | (28.6 | ) |
| Dividends paid per common share | | | 0.06 | | | | 0.06 | | | | 0.06 | | | | 0.06 | | | | 0.16 | | | | - | | | | (62.5 | ) |
| Shore Bancshares, Inc. | Page 10 of 10 |
Consolidated Average Balance Sheets By Quarter
(Dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average balance | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4Q 10 | | | 4Q 10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | compared to | | | compared to | |
| | | 4Q 10 | | | 3Q 10 | | | 2Q 10 | | | 1Q 10 | | | 4Q 09 | | | 3Q 10 | | | 4Q 09 | |
| | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | | | | | |
| | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | | | | | |
| Earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 903,075 | | | | 5.71 | % | | $ | 904,293 | | | | 5.76 | % | | $ | 909,295 | | | | 5.77 | % | | $ | 910,374 | | | | 5.75 | % | | $ | 921,908 | | | | 5.97 | % | | | (0.1 | ) % | | | (2.0 | ) % |
| Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 98,378 | | | | 3.24 | | | | 99,572 | | | | 2.70 | | | | 103,284 | | | | 3.29 | | | | 103,488 | | | | 3.45 | | | | 97,595 | | | | 3.50 | | | | (1.2 | ) | | | 0.8 | |
| Tax-exempt | | | 5,222 | | | | 5.40 | | | | 5,894 | | | | 5.16 | | | | 6,460 | | | | 5.30 | | | | 6,764 | | | | 5.39 | | | | 6,966 | | | | 4.96 | | | | (11.4 | ) | | | (25.0 | ) |
| Federal funds sold | | | 34,018 | | | | 0.16 | | | | 40,638 | | | | 0.20 | | | | 38,001 | | | | 0.15 | | | | 46,553 | | | | 0.11 | | | | 77,782 | | | | 0.11 | | | | (16.3 | ) | | | (56.3 | ) |
| Interest-bearing deposits | | | 19,952 | | | | 0.12 | | | | 15,666 | | | | 0.15 | | | | 14,075 | | | | 0.12 | | | | 8,246 | | | | 0.06 | | | | 668 | | | | 0.45 | | | | 27.4 | | | | 2,886.8 | |
| Total earning assets | | | 1,060,645 | | | | 5.20 | % | | | 1,066,063 | | | | 5.18 | % | | | 1,071,115 | | | | 5.26 | % | | | 1,075,425 | | | | 5.24 | % | | | 1,104,919 | | | | 5.33 | % | | | (0.5 | ) | | | (4.0 | ) |
| Cash and due from banks | | | 19,867 | | | | | | | | 21,865 | | | | | | | | 9,997 | | | | | | | | 14,422 | | | | | | | | 17,312 | | | | | | | | (9.1 | ) | | | 14.8 | |
| Other assets | | | 62,305 | | | | | | | | 65,081 | | | | | | | | 67,860 | | | | | | | | 67,914 | | | | | | | | 58,543 | | | | | | | | (4.3 | ) | | | 6.4 | |
| Allowance for credit losses | | | (14,300 | ) | | | | | | | (13,966 | ) | | | | | | | (14,310 | ) | | | | | | | (12,154 | ) | | | | | | | (11,437 | ) | | | | | | | 2.4 | | | | 25.0 | |
| Total assets | | $ | 1,128,517 | | | | | | | $ | 1,139,043 | | | | | | | $ | 1,134,662 | | | | | | | $ | 1,145,607 | | | | | | | $ | 1,169,337 | | | | | | | | (0.9 | ) | | | (3.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 128,592 | | | | 0.22 | % | | $ | 132,023 | | | | 0.24 | % | | $ | 132,563 | | | | 0.25 | % | | $ | 127,986 | | | | 0.25 | % | | $ | 127,537 | | | | 0.26 | % | | | (2.6 | ) | | | 0.8 | |
| Money market and savings deposits | | | 258,713 | | | | 0.84 | | | | 259,511 | | | | 0.81 | | | | 259,273 | | | | 0.72 | | | | 256,818 | | | | 0.68 | | | | 249,393 | | | | 0.66 | | | | (0.3 | ) | | | 3.7 | |
| Certificates of deposit $100,000 or more | | | 256,167 | | | | 1.77 | | | | 258,542 | | | | 1.91 | | | | 251,340 | | | | 2.09 | | | | 259,538 | | | | 2.24 | | | | 276,390 | | | | 2.51 | | | | (0.9 | ) | | | (7.3 | ) |
| Other time deposits | | | 208,808 | | | | 2.23 | | | | 212,098 | | | | 2.37 | | | | 215,987 | | | | 2.56 | | | | 219,731 | | | | 2.67 | | | | 228,020 | | | | 2.91 | | | | (1.6 | ) | | | (8.4 | ) |
| Interest-bearing deposits | | | 852,280 | | | | 1.37 | | | | 862,174 | | | | 1.44 | | | | 859,163 | | | | 1.51 | | | | 864,073 | | | | 1.59 | | | | 881,340 | | | | 1.77 | | | | (1.2 | ) | | | (3.3 | ) |
| Short-term borrowings | | | 15,381 | | | | 0.39 | | | | 16,092 | | | | 0.38 | | | | 15,771 | | | | 0.48 | | | | 18,032 | | | | 0.71 | | | | 18,994 | | | | 0.63 | | | | (4.4 | ) | | | (19.0 | ) |
| Long-term debt | | | 932 | | | | 4.46 | | | | 1,429 | | | | 4.36 | | | | 1,429 | | | | 4.40 | | | | 1,429 | | | | 4.45 | | | | 1,429 | | | | 5.28 | | | | (34.8 | ) | | | (34.8 | ) |
| Total interest-bearing liabilities | | | 868,593 | | | | 1.35 | % | | | 879,695 | | | | 1.42 | % | | | 876,363 | | | | 1.50 | % | | | 883,534 | | | | 1.58 | % | | | 901,763 | | | | 1.75 | % | | | (1.3 | ) | | | (3.7 | ) |
| Noninterest-bearing deposits | | | 126,164 | | | | | | | | 121,844 | | | | | | | | 117,586 | | | | | | | | 118,192 | | | | | | | | 121,642 | | | | | | | | 3.6 | | | | 3.7 | |
| Accrued expenses and other liabilities | | | 10,419 | | | | | | | | 12,196 | | | | | | | | 15,043 | | | | | | | | 15,800 | | | | | | | | 17,217 | | | | | | | | (14.6 | ) | | | (39.5 | ) |
| Stockholders' equity | | | 123,341 | | | | | | | | 125,308 | | | | | | | | 125,670 | | | | | | | | 128,081 | | | | | | | | 128,715 | | | | | | | | (1.6 | ) | | | (4.2 | ) |
| Total liabilities and stockholders' equity | | $ | 1,128,517 | | | | | | | $ | 1,139,043 | | | | | | | $ | 1,134,662 | | | | | | | $ | 1,145,607 | | | | | | | $ | 1,169,337 | | | | | | | | (0.9 | ) | | | (3.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest spread | | | | | | | 3.85 | % | | | | | | | 3.76 | % | | | | | | | 3.76 | % | | | | | | | 3.66 | % | | | | | | | 3.58 | % | | | | | | | | |
| Net interest margin | | | | | | | 4.09 | % | | | | | | | 4.00 | % | | | | | | | 4.03 | % | | | | | | | 3.95 | % | | | | | | | 3.90 | % | | | | | | | | |
