Exhibit 99.1
28969 Information Lane
Easton, Maryland 21601
Phone 410-763-7800
PRESS RELEASE
Shore Bancshares Reports Second Quarter and First-Half Results
Easton, Maryland (7/21/2016) - Shore Bancshares, Inc. (NASDAQ - SHBI) reported net income of $2.272 million or $0.18 per diluted common share for the second quarter of 2016, compared to net income of $2.460 million or $0.19 per diluted common share for the first quarter of 2016, and net income of $1.627 million or $0.13 per diluted common share for the second quarter of 2015. The Company reported net income of $4.732 million or $0.37 per diluted common share for the first half of 2016, compared to net income of $3.0 million or $0.24 per diluted common share for the first half of 2015.
When comparing the second quarter of 2016 to the first quarter of 2016, the slightly lower result was primarily attributable to slightly lower noninterest income due to insurance agency contingent commissions which are typically received in the first quarter of the year. The timing impact of these contingent commissions was partially offset by an increase in net interest income of $140 thousand over the linked quarter and a decrease in the provision for credit losses of $75 thousand. When comparing the second quarter of 2016 to the second quarter of 2015, improved results were due to increases in net interest income and noninterest income of $700 thousand and $253 thousand, respectively, and a decrease in the provision for credit losses of $165 thousand. When comparing the first half of 2016 to the first half of 2015, improved earnings were due to increases in net interest income and noninterest income of $1.4 million and $709 thousand, respectively, coupled with decreases in both the provision for credit losses of $365 thousand and noninterest expenses of $300 thousand.
“We are happy to report another strong quarter of earnings. In addition, we completed a successful consolidation of our two subsidiary banks, Talbot Bank of Easton and CNB, into Shore United Bank on July 1, 2016,” said Lloyd L. “Scott” Beatty, Jr., president and chief executive officer. “The second quarter results signified a continued emphasis on sustained loan growth and diversifying our loan portfolio. Further, the consolidation of the banks will allow us to execute our Company-wide branding and marketing plan, create efficiencies and cost savings, and enable us to expand our footprint in the Delmarva region.”
Balance Sheet Review
Total assets were $1.126 billion at June 30, 2016, a $9.5 million, or 0.8%, decrease when compared to $1.135 billion at the end of 2015. The decrease in total assets included decreases in investment securities available for sale of $16.5 million, interest-bearing deposits with other banks of $8.8 million and federal funds sold of $4.5 million which was almost entirely offset by an increase in gross loans of $26.0 million, or a 6.5% annualized loan growth rate for the period.
Total deposits decreased $14.4 million, or 1.5%, when compared to December 31, 2015. The decrease in total deposits was mainly due to declines in interest-bearing demand deposits of $25.5 million and time deposits of $10.3 million, which were partially offset by an increase in money market and savings deposits of $19.5 million and non-interest bearing deposits of $1.9 million. Total stockholders’ equity increased $5.4 million, or 3.6%, when compared to the end of 2015. At June 30, 2016, the ratio of total equity to total assets was 13.53% and the ratio of total tangible equity to total tangible assets was 12.52%, higher than the 12.95% and 11.93%, respectively, at December 31, 2015.
Total assets at June 30, 2016 increased $41.3 million, or 3.8%, when compared to total assets at June 30, 2015. The increase in total assets was primarily due to an increase in gross loans of $80.0 million, or 10.8%. The increase was partially offset by a decrease in investment securities available for sale of $32.5 million used to fund loan growth. Total deposits increased $32.2 million, or 3.5%, when compared to June 30, 2015. The increase in total deposits was mainly due to increases in non-interest bearing deposits of $27.9 million, money market and savings deposits of $25.8 million and interest-bearing demand deposits of $14.3 million, partially offset by a decrease in time deposits of $35.8 million. Total stockholders’ equity increased $8.9 million, or 6.2%, when compared to June 30, 2015.
Review of Quarterly Financial Results
Net interest income was $9.4 million for the second quarter of 2016, compared to $9.2 million for the first quarter of 2016 and $8.7 million for the second quarter of 2015. The increase in net interest income when compared to the first quarter of 2016 was primarily due to an increase in average loans of $16.5 million resulting in $156 thousand in additional interest and fees on loans, coupled with a decline in volume of and rates paid on interest-bearing deposits. The increase in net interest income for the second quarter of 2016 when compared to the second quarter of 2015 was primarily due to an increase in average loans of $79.4 million resulting in $536 thousand in additional interest and fees on loans, compounded by lower volumes of and rates paid on time deposits. In addition, the Company was able to change its asset composition by transitioning from lower yielding securities to higher yielding loans which positively impacted net interest income despite a decrease in the overall yield on loans. The Company’s net interest margin increased over each of these periods, amounting to 3.57% for the second quarter of 2016, 3.50% for the first quarter of 2016, and 3.43% for the second quarter of 2015.
The provision for credit losses was $375 thousand for the three months ended June 30, 2016. The comparable amounts were $450 thousand and $540 thousand for the three months ended March 31, 2016 and June 30, 2015, respectively. The lower level of provision for credit losses when comparing the second quarter of 2016 to the first quarter of 2016 was primarily due to declines in net charge-offs. The lower level of provision for credit losses when comparing the second quarter of 2016 to the second quarter of 2015 was primarily due to decreases in both net charge-offs and nonaccrual loans. Net charge-offs were $326 thousand for the second quarter of 2016, $457 thousand for the first quarter of 2016 and $421 thousand for the second quarter of 2015. The ratio of annualized net charge-offs to average loans was 0.16% for the second quarter of 2016, and 0.23% for each of the first quarter of 2016 and the second quarter of 2015. The ratio of the allowance for credit losses to period-end loans was 1.02% at June 30, 2016, lower than the 1.04% at March 31, 2016 and 1.07% at June 30, 2015, which reflects improved credit quality in the loan portfolio.
At June 30, 2016, nonperforming assets were $15.4 million, a decrease of $422 thousand, or 2.7%, when compared to March 31, 2016 and accruing troubled debt restructurings (“TDRs”) decreased $1.4 million, or 9.6% over the same time period. When comparing June 30, 2016 to June 30, 2015, nonperforming assets decreased $1.1 million, or 6.7%, and accruing TDRs decreased $5.0 million, or 27.3%. The positive trend in nonperforming assets and TDRs when comparing June 30, 2016 to June 30, 2015 resulted from the Company’s continued workout efforts. The ratio of nonperforming assets to total assets was 1.37%, 1.40% and 1.53% at June 30, 2016, March 31, 2016 and June 30, 2015, respectively. In addition, the ratio of accruing TDRs to total assets at June 30, 2016 was 1.18%, compared to 1.30% at March 31, 2016 and 1.69% at June 30, 2015.
Total noninterest income for the second quarter of 2016 decreased $500 thousand, or 11.0%, when compared to the first quarter of 2016 and increased $253 thousand, or 6.7%, when compared to the second quarter of 2015. The decrease from the first quarter of 2016 was primarily due to a decline in insurance agency commissions of $818 thousand which was partially offset by an increase in other noninterest income of $248 thousand. Insurance agency commissions for the second quarter of 2016 were lower when compared to the first quarter of 2016 due to the fact that contingency commission payments are typically received in the first quarter of the year. The increase in other noninterest income for the second quarter 2016 was income from an insurance investment of $124 thousand over the linked quarter. The increase from the second quarter of 2015 was mainly due to higher service charges on deposit accounts of $212 thousand, partially offset by a decline in trust and investment fee income of $86 thousand.
Total noninterest expense for the second quarter of 2016 increased $26 thousand, or 0.3%, when compared to the first quarter of 2016 and increased $65 thousand, or 0.7%, when compared to the second quarter of 2015. The increase in noninterest expenses from the first quarter of 2016 was primarily due to an increase in legal and professional fees in connection with the consolidation of our two former bank subsidiaries, The Talbot Bank of Easton and CNB. Offsetting this increase were decreases in salaries and wages and employee benefits which are typically higher in the first quarter of 2016 due to maxing out certain payroll taxes, federal and state unemployment insurance, and 401(k) contributions. The increase compared to the second quarter of 2015 was primarily the result of slightly higher employee related costs and legal and professional fees.
Review of Six-Month Financial Results
Net interest income for the first six months of 2016 was $18.6 million, an increase of 8.2% when compared to the first six months of 2015. The increase was primarily due to significant growth of average loans of approximately $77.7 million and the decline in average interest-bearing deposits of $978 thousand. Although the yield declined on loans, the transition of lower yielding investment securities to loans allowed the overall yield on total earning assets to remain unchanged. This, coupled with the decline on volume of and rates paid on deposits, resulted in a net interest margin of 3.53% for the first six months of 2016 compared to 3.43% for the first six months of 2015.
The provision for credit losses for the six months ended June 30, 2016 and 2015 was $825 thousand and $1.2 million, respectively, while net charge-offs were $783 thousand and $968 thousand, respectively. The ratio of year-to-date annualized net charge-offs to average loans was 0.20% for the first half of 2016 and 0.27% for the first half of 2015.
Total noninterest income for the six months ended June 30, 2016 increased $709 thousand, or 9.0%, when compared to the same period in 2015. The increase in noninterest income primarily consists of increases in service charges on deposit accounts of $391 thousand, insurance agency commissions of $293 thousand and other noninterest income of $229 thousand, partially offset by a decline in trust and investment fee income of $204 thousand. The increase in other noninterest income consisted of bank service and loan fees of $136 thousand.
Total noninterest expense for the six months ended June 30, 2016 decreased $300 thousand, or 1.6%, when compared to the same period in 2015. The decrease was primarily due to a decline in legal and professional fees of $305 thousand and reduced FDIC insurance premiums of $140 thousand, partially offset by an increase in salaries and wages. The increased legal and professional fees in 2015 were the direct result of management outsourcing its internal audit function which resulted in significant implementation costs. In addition, the lower FDIC insurance premiums over the prior period are the direct result of the upgraded regulatory status and financial performance of The Talbot Bank of Easton in the second quarter of 2015.
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 Shore United Bank; one retail insurance producer firm, The Avon-Dixon Agency, LLC (“Avon-Dixon”), with two specialty lines, Elliott Wilson Insurance (Trucking) and Jack Martin Associates (Marine); and an insurance premium finance company, Mubell Finance, LLC (“Mubell”). Shore Bancshares Inc. engages in trust and wealth management services through Wye Financial & Trust, a division of Shore United Bank. Additional information is available atwww.shorebancshares.com.
Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. 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”.
The Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
For further information contact: Edward Allen, Chief Financial Officer, 410-763-7800
| Shore Bancshares, Inc. |
| Financial Highlights |
| (Dollars in thousands, except per share data) |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2016 | | | 2015 | | | Change | | | 2016 | | | 2015 | | | Change | |
| PROFITABILITY FOR THE PERIOD | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 9,383 | | | $ | 8,683 | | | | 8.1 | % | | $ | 18,626 | | | $ | 17,222 | | | | 8.2 | % |
| Provision for credit losses | | | 375 | | | | 540 | | | | (30.6 | ) | | | 825 | | | | 1,190 | | | | (30.7 | ) |
| Noninterest income | | | 4,041 | | | | 3,788 | | | | 6.7 | | | | 8,582 | | | | 7,873 | | | | 9.0 | |
| Noninterest expense | | | 9,365 | | | | 9,300 | | | | 0.7 | | | | 18,704 | | | | 19,004 | | | | (1.6 | ) |
| Income before income taxes | | | 3,684 | | | | 2,631 | | | | 40.0 | | | | 7,679 | | | | 4,901 | | | | 56.7 | |
| Income tax expense | | | 1,412 | | | | 1,004 | | | | 40.6 | | | | 2,947 | | | | 1,865 | | | | 58.0 | |
| Net income | | $ | 2,272 | | | $ | 1,627 | | | | 39.6 | | | $ | 4,732 | | | $ | 3,036 | | | | 55.9 | |
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| Return on average assets | | | 0.81 | % | | | 0.60 | % | | | 21 | bp | | | 0.84 | % | | | 0.56 | % | | | 28 | bp |
| Return on average equity | | | 6.04 | | | | 4.56 | | | | 148 | | | | 6.34 | | | | 4.29 | | | | 205 | |
| Return on average tangible equity (1) | | | 6.67 | | | | 5.08 | | | | 159 | | | | 7.00 | | | | 4.80 | | | | 220 | |
| Net interest margin | | | 3.57 | | | | 3.43 | | | | 14 | | | | 3.53 | | | | 3.43 | | | | 10 | |
| Efficiency ratio - GAAP | | | 69.60 | | | | 74.47 | | | | (487 | ) | | | 68.59 | | | | 75.61 | | | | (702 | ) |
| Efficiency ratio - Non-GAAP (1) | | | 69.35 | | | | 74.20 | | | | (485 | ) | | | 68.35 | | | | 75.35 | | | | (700 | ) |
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| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income per common share | | $ | 0.18 | | | $ | 0.13 | | | | 38.5 | % | | $ | 0.37 | | | $ | 0.24 | | | | 54.2 | % |
| Diluted net income per common share | | | 0.18 | | | | 0.13 | | | | 38.5 | | | | 0.37 | | | | 0.24 | | | | 54.2 | |
| Dividends paid per common share | | | 0.03 | | | | - | | | | 100.0 | | | | 0.06 | | | | - | | | | 100.0 | |
| Book value per common share at period end | | | 12.04 | | | | 11.35 | | | | 6.1 | | | | | | | | | | | | | |
| Tangible book value per common share at period end (1) | | | 11.00 | | | | 10.31 | | | | 6.7 | | | | | | | | | | | | | |
| Market value at period end | | | 11.75 | | | | 9.43 | | | | 24.6 | | | | | | | | | | | | | |
| Market range: | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | | 12.50 | | | | 9.55 | | | | 30.9 | | | | 12.59 | | | | 10.49 | | | | 20.0 | |
| Low | | | 10.23 | | | | 9.43 | | | | 8.5 | | | | 10.23 | | | | 8.57 | | | | 19.4 | |
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| AVERAGE BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 807,231 | | | $ | 727,800 | | | | 10.9 | % | | $ | 799,004 | | | $ | 721,326 | | | | 10.8 | % |
| Investment securities | | | 204,357 | | | | 241,684 | | | | (15.4 | ) | | | 209,672 | | | | 242,985 | | | | (13.7 | ) |
| Earning assets | | | 1,061,645 | | | | 1,016,172 | | | | 4.5 | | | | 1,063,579 | | | | 1,014,838 | | | | 4.8 | |
| Assets | | | 1,122,568 | | | | 1,085,857 | | | | 3.4 | | | | 1,126,403 | | | | 1,086,624 | | | | 3.7 | |
| Deposits | | | 959,397 | | | | 931,637 | | | | 3.0 | | | | 964,194 | | | | 932,045 | | | | 3.4 | |
| Stockholders' equity | | | 151,270 | | | | 143,266 | | | | 5.6 | | | | 150,151 | | | | 142,579 | | | | 5.3 | |
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| CREDIT QUALITY DATA AT PERIOD END | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 326 | | | $ | 421 | | | | (22.6 | )% | | $ | 783 | | | $ | 968 | | | | (19.1 | )% |
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| Nonaccrual loans | | $ | 13,531 | | | $ | 14,009 | | | | (3.4 | ) | | | | | | | | | | | | |
| Loans 90 days past due and still accruing | | | 6 | | | | 35 | | | | (82.9 | ) | | | | | | | | | | | | |
| Other real estate owned | | | 1,897 | | | | 2,498 | | | | (24.1 | ) | | | | | | | | | | | | |
| Total nonperforming assets | | | 15,434 | | | | 16,542 | | | | (6.7 | ) | | | | | | | | | | | | |
| Accruing troubled debt restructurings (TDRs) | | | 13,338 | | | | 18,353 | | | | (27.3 | ) | | | | | | | | | | | | |
| Total nonperforming assets and accruing TDRs | | $ | 28,772 | | | $ | 34,895 | | | | (17.5 | ) | | | | | | | | | | | | |
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| CAPITAL AND CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | |
| Period-end equity to assets | | | 13.53 | % | | | 13.22 | % | | | 31 | bp | | | | | | | | | | | | |
| Period-end tangible equity to tangible assets (1) | | | 12.52 | | | | 12.16 | | | | 36 | | | | | | | | | | | | | |
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| Annualized net charge-offs to average loans | | | 0.16 | | | | 0.23 | | | | (7 | ) | | | 0.20 | % | | | 0.27 | % | | | (7 | )bp |
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| Allowance for credit losses as a percent of: | | | | | | | | | | | | | | | | | | | | | | | | |
| Period-end loans | | | 1.02 | | | | 1.07 | | | | (5 | ) | | | | | | | | | | | | |
| Nonaccrual loans | | | 61.77 | | | | 56.51 | | | | 526 | | | | | | | | | | | | | |
| Nonperforming assets | | | 54.15 | | | | 47.86 | | | | 629 | | | | | | | | | | | | | |
| Accruing TDRs | | | 62.66 | | | | 43.14 | | | | 1,952 | | | | | | | | | | | | | |
| Nonperforming assets and accruing TDRs | | | 29.05 | | | | 22.69 | | | | 636 | | | | | | | | | | | | | |
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| As a percent of total loans: | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | | 1.65 | | | | 1.89 | | | | (24 | ) | | | | | | | | | | | | |
| Accruing TDRs | | | 1.62 | | | | 2.48 | | | | (86 | ) | | | | | | | | | | | | |
| Nonaccrual loans and accruing TDRs | | | 3.27 | | | | 4.37 | | | | (110 | ) | | | | | | | | | | | | |
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| As a percent of total loans+other real estate owned: | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonperforming assets | | | 1.88 | | | | 2.22 | | | | (34 | ) | | | | | | | | | | | | |
| Nonperforming assets and accruing TDRs | | | 3.50 | | | | 4.69 | | | | (119 | ) | | | | | | | | | | | | |
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| As a percent of total assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | | 1.20 | | | | 1.29 | | | | (9 | ) | | | | | | | | | | | | |
| Nonperforming assets | | | 1.37 | | | | 1.53 | | | | (16 | ) | | | | | | | | | | | | |
| Accruing TDRs | | | 1.18 | | | | 1.69 | | | | (51 | ) | | | | | | | | | | | | |
| Nonperforming assets and accruing TDRs | | | 2.55 | | | | 3.22 | | | | (67 | ) | | | | | | | | | | | | |
| (1) | See the reconciliation table on page 12 of 12. |
| Shore Bancshares, Inc. |
| Consolidated Balance Sheets |
| (In thousands, except per share data) |
| | | | | | | | | | | | June 30, 2016 | | | June 30, 2016 | |
| | | | | | | | | | | | compared to | | | compared to | |
| | | June 30, | | | December 31, | | | June 30, | | | December 31, | | | June 30, | |
| | | 2016 | | | 2015 | | | 2015 | | | 2015 | | | 2015 | |
| ASSETS | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 15,753 | | | $ | 15,080 | | | $ | 20,060 | | | | 4.5 | % | | | (21.5 | )% |
| Interest-bearing deposits with other banks | | | 45,455 | | | | 54,223 | | | | 39,696 | | | | (16.2 | ) | | | 14.5 | |
| Federal funds sold | | | 9 | | | | 4,508 | | | | - | | | | (99.8 | ) | | | - | |
| Cash and cash equivalents | | | 61,217 | | | | 73,811 | | | | 59,756 | | | | (17.1 | ) | | | 2.4 | |
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| Investment securities available for sale (at fair value) | | | 195,681 | | | | 212,165 | | | | 228,210 | | | | (7.8 | ) | | | (14.3 | ) |
| Investment securities held to maturity | | | 3,995 | | | | 4,191 | | | | 4,513 | | | | (4.7 | ) | | | (11.5 | ) |
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| Loans | | | 821,079 | | | | 795,114 | | | | 741,030 | | | | 3.3 | | | | 10.8 | |
| Less: allowance for credit losses | | | (8,358 | ) | | | (8,316 | ) | | | (7,917 | ) | | | 0.5 | | | | 5.6 | |
| Loans, net | | | 812,721 | | | | 786,798 | | | | 733,113 | | | | 3.3 | | | | 10.9 | |
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| Premises and equipment, net | | | 16,708 | | | | 16,864 | | | | 16,801 | | | | (0.9 | ) | | | (0.6 | ) |
| Goodwill | | | 11,931 | | | | 11,931 | | | | 11,931 | | | | - | | | | - | |
| Other intangible assets, net | | | 1,145 | | | | 1,211 | | | | 1,264 | | | | (5.5 | ) | | | (9.4 | ) |
| Other real estate owned, net | | | 1,897 | | | | 4,252 | | | | 2,498 | | | | (55.4 | ) | | | (24.1 | ) |
| Other assets | | | 20,395 | | | | 23,920 | | | | 26,266 | | | | (14.7 | ) | | | (22.4 | ) |
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| Total assets | | $ | 1,125,690 | | | $ | 1,135,143 | | | $ | 1,084,352 | | | | (0.8 | ) | | | 3.8 | |
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| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 231,614 | | | $ | 229,686 | | | $ | 203,678 | | | | 0.8 | | | | 13.7 | |
| Interest-bearing deposits | | | 729,480 | | | | 745,778 | | | | 725,231 | | | | (2.2 | ) | | | 0.6 | |
| Total deposits | | | 961,094 | | | | 975,464 | | | | 928,909 | | | | (1.5 | ) | | | 3.5 | |
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| Short-term borrowings | | | 6,868 | | | | 6,672 | | | | 6,629 | | | | 2.9 | | | | 3.6 | |
| Accrued expenses and other liabilities | | | 5,407 | | | | 6,040 | | | | 5,412 | | | | (10.5 | ) | | | (0.1 | ) |
| Total liabilities | | | 973,369 | | | | 988,176 | | | | 940,950 | | | | (1.5 | ) | | | 3.4 | |
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| STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | |
| Common stock, par value $0.01; authorized | | | | | | | | | | | | | | | | | | | | |
| 35,000,000 shares | | | 127 | | | | 126 | | | | 126 | | | | 0.8 | | | | 0.8 | |
| Additional paid in capital | | | 63,995 | | | | 63,815 | | | | 63,725 | | | | 0.3 | | | | 0.4 | |
| Retained earnings | | | 87,071 | | | | 83,097 | | | | 79,531 | | | | 4.8 | | | | 9.5 | |
| Accumulated other comprehensive (loss) income | | | 1,128 | | | | (71 | ) | | | 20 | | | | 1,688.7 | | | | 5,540.0 | |
| Total stockholders' equity | | | 152,321 | | | | 146,967 | | | | 143,402 | | | | 3.6 | | | | 6.2 | |
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| Total liabilities and stockholders' equity | | $ | 1,125,690 | | | $ | 1,135,143 | | | $ | 1,084,352 | | | | (0.8 | ) | | | 3.8 | |
| | | | | | | | | | | | | | | | | | | | | |
| Period-end common shares outstanding | | | 12,655 | | | | 12,631 | | | | 12,630 | | | | 0.2 | | | | 0.2 | |
| Book value per common share | | $ | 12.04 | | | $ | 11.64 | | | $ | 11.35 | | | | 3.4 | | | | 6.1 | |
| Shore Bancshares, Inc. |
| Consolidated Statements of Operations |
| (In thousands, except per share data) |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2016 | | | 2015 | | | % Change | | | 2016 | | | 2015 | | | % Change | |
| INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 9,117 | | | $ | 8,581 | | | | 6.2 | % | | $ | 18,078 | | | $ | 17,072 | | | | 5.9 | % |
| Interest and dividends on investment securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 824 | | | | 932 | | | | (11.6 | ) | | | 1,694 | | | | 1,856 | | | | (8.7 | ) |
| Tax-exempt | | | 2 | | | | 3 | | | | (33.3 | ) | | | 4 | | | | 6 | | | | (33.3 | ) |
| Interest on federal funds sold | | | 2 | | | | - | | | | - | | | | 5 | | | | 1 | | | | 400.0 | |
| Interest on deposits with other banks | | | 58 | | | | 26 | | | | 123.1 | | | | 130 | | | | 52 | | | | 150.0 | |
| Total interest income | | | 10,003 | | | | 9,542 | | | | 4.8 | | | | 19,911 | | | | 18,987 | | | | 4.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 617 | | | | 856 | | | | (27.9 | ) | | | 1,278 | | | | 1,757 | | | | (27.3 | ) |
| Interest on short-term borrowings | | | 3 | | | | 3 | | | | - | | | | 7 | | | | 8 | | | | (12.5 | ) |
| Total interest expense | | | 620 | | | | 859 | | | | (27.8 | ) | | | 1,285 | | | | 1,765 | | | | (27.2 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME | | | 9,383 | | | | 8,683 | | | | 8.1 | | | | 18,626 | | | | 17,222 | | | | 8.2 | |
| Provision for credit losses | | | 375 | | | | 540 | | | | (30.6 | ) | | | 825 | | | | 1,190 | | | | (30.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME AFTER PROVISION | | | | | | | | | | | | | | | | | | | | | | | | |
| FOR CREDIT LOSSES | | | 9,008 | | | | 8,143 | | | | 10.6 | | | | 17,801 | | | | 16,032 | | | | 11.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 870 | | | | 658 | | | | 32.2 | | | | 1,683 | | | | 1,292 | | | | 30.3 | |
| Trust and investment fee income | | | 364 | | | | 450 | | | | (19.1 | ) | | | 715 | | | | 919 | | | | (22.2 | ) |
| Insurance agency commissions | | | 1,941 | | | | 1,932 | | | | 0.5 | | | | 4,700 | | | | 4,407 | | | | 6.6 | |
| Other noninterest income | | | 866 | | | | 748 | | | | 15.8 | | | | 1,484 | | | | 1,255 | | | | 18.2 | |
| Total noninterest income | | | 4,041 | | | | 3,788 | | | | 6.7 | | | | 8,582 | | | | 7,873 | | | | 9.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and wages | | | 4,422 | | | | 4,393 | | | | 0.7 | | | | 8,899 | | | | 8,706 | | | | 2.2 | |
| Employee benefits | | | 964 | | | | 924 | | | | 4.3 | | | | 2,078 | | | | 2,080 | | | | (0.1 | ) |
| Occupancy expense | | | 583 | | | | 611 | | | | (4.6 | ) | | | 1,196 | | | | 1,237 | | | | (3.3 | ) |
| Furniture and equipment expense | | | 248 | | | | 233 | | | | 6.4 | | | | 483 | | | | 488 | | | | (1.0 | ) |
| Data processing | | | 854 | | | | 868 | | | | (1.6 | ) | | | 1,663 | | | | 1,651 | | | | 0.7 | |
| Directors' fees | | | 131 | | | | 116 | | | | 12.9 | | | | 235 | | | | 239 | | | | (1.7 | ) |
| Amortization of intangible assets | | | 33 | | | | 33 | | | | - | | | | 66 | | | | 66 | | | | - | |
| FDIC insurance premium expense | | | 268 | | | | 306 | | | | (12.4 | ) | | | 550 | | | | 690 | | | | (20.3 | ) |
| Write-downs of other real estate owned | | | 66 | | | | 54 | | | | 22.2 | | | | 73 | | | | 81 | | | | (9.9 | ) |
| Legal and professional fees | | | 609 | | | | 573 | | | | 6.3 | | | | 994 | | | | 1,299 | | | | (23.5 | ) |
| Other noninterest expenses | | | 1,187 | | | | 1,189 | | | | (0.2 | ) | | | 2,467 | | | | 2,467 | | | | - | |
| Total noninterest expense | | | 9,365 | | | | 9,300 | | | | 0.7 | | | | 18,704 | | | | 19,004 | | | | (1.6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 3,684 | | | | 2,631 | | | | 40.0 | | | | 7,679 | | | | 4,901 | | | | 56.7 | |
| Income tax expense | | | 1,412 | | | | 1,004 | | | | 40.6 | | | | 2,947 | | | | 1,865 | | | | 58.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INCOME | | $ | 2,272 | | | $ | 1,627 | | | | 39.6 | | | $ | 4,732 | | | $ | 3,036 | | | | 55.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - basic | | | 12,648 | | | | 12,629 | | | | 0.2 | | | | 12,642 | | | | 12,627 | | | | 0.1 | |
| Weighted average shares outstanding - diluted | | | 12,665 | | | | 12,638 | | | | 0.2 | | | | 12,657 | | | | 12,636 | | | | 0.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income per common share | | $ | 0.18 | | | $ | 0.13 | | | | 38.5 | | | $ | 0.37 | | | $ | 0.24 | | | | 54.2 | |
| Diluted net income per common share | | | 0.18 | | | | 0.13 | | | | 38.5 | | | | 0.37 | | | | 0.24 | | | | 54.2 | |
| Dividends paid per common share | | | 0.03 | | | | - | | | | - | | | | 0.06 | | | | - | | | | - | |
| Shore Bancshares, Inc. |
| Consolidated Average Balance Sheets |
| (Dollars in thousands) |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
| | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | |
| | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | |
| Earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 807,231 | | | | 4.56 | % | | $ | 727,800 | | | | 4.74 | % | | $ | 799,004 | | | | 4.57 | % | | $ | 721,326 | | | | 4.78 | % |
| Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 204,147 | | | | 1.61 | | | | 241,254 | | | | 1.55 | | | | 209,462 | | | | 1.62 | | | | 242,554 | | | | 1.53 | |
| Tax-exempt | | | 210 | | | | 5.30 | | | | 430 | | | | 4.21 | | | | 210 | | | | 5.30 | | | | 431 | | | | 4.20 | |
| Federal funds sold | | | 2,910 | | | | 0.34 | | | | 2,931 | | | | 0.09 | | | | 3,275 | | | | 0.34 | | | | 2,866 | | | | 0.09 | |
| Interest-bearing deposits | | | 47,147 | | | | 0.50 | | | | 43,757 | | | | 0.24 | | | | 51,628 | | | | 0.51 | | | | 47,661 | | | | 0.22 | |
| Total earning assets | | | 1,061,645 | | | | 3.80 | % | | | 1,016,172 | | | | 3.77 | % | | | 1,063,579 | | | | 3.78 | % | | | 1,014,838 | | | | 3.78 | % |
| Cash and due from banks | | | 14,776 | | | | | | | | 18,723 | | | | | | | | 15,491 | | | | | | | | 19,989 | | | | | |
| Other assets | | | 54,699 | | | | | | | | 59,045 | | | | | | | | 55,868 | | | | | | | | 59,823 | | | | | |
| Allowance for credit losses | | | (8,552 | ) | | | | | | | (8,083 | ) | | | | | | | (8,535 | ) | | | | | | | (8,026 | ) | | | | |
| Total assets | | $ | 1,122,568 | | | | | | | $ | 1,085,857 | | | | | | | $ | 1,126,403 | | | | | | | $ | 1,086,624 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 186,137 | | | | 0.12 | % | | $ | 171,274 | | | | 0.12 | % | | $ | 189,612 | | | | 0.12 | % | | $ | 174,156 | | | | 0.12 | % |
| Money market and savings deposits | | | 261,495 | | | | 0.13 | | | | 238,173 | | | | 0.14 | | | | 260,105 | | | | 0.13 | | | | 237,965 | | | | 0.14 | |
| Certificates of deposit $100,000 or more | | | 129,544 | | | | 0.69 | | | | 152,478 | | | | 0.97 | | | | 130,978 | | | | 0.70 | | | | 154,306 | | | | 0.99 | |
| Other time deposits | | | 151,577 | | | | 0.68 | | | | 166,277 | | | | 0.85 | | | | 152,675 | | | | 0.71 | | | | 167,921 | | | | 0.88 | |
| Interest-bearing deposits | | | 728,753 | | | | 0.34 | | | | 728,202 | | | | 0.47 | | | | 733,370 | | | | 0.35 | | | | 734,348 | | | | 0.48 | |
| Short-term borrowings | | | 5,792 | | | | 0.24 | | | | 4,872 | | | | 0.23 | | | | 6,017 | | | | 0.24 | | | | 6,100 | | | | 0.25 | |
| Total interest-bearing liabilities | | | 734,545 | | | | 0.34 | % | | | 733,074 | | | | 0.47 | % | | | 739,387 | | | | 0.35 | % | | | 740,448 | | | | 0.48 | % |
| Noninterest-bearing deposits | | | 230,644 | | | | | | | | 203,435 | | | | | | | | 230,824 | | | | | | | | 197,697 | | | | | |
| Accrued expenses and other liabilities | | | 6,109 | | | | | | | | 6,082 | | | | | | | | 6,041 | | | | | | | | 5,900 | | | | | |
| Stockholders' equity | | | 151,270 | | | | | | | | 143,266 | | | | | | | | 150,151 | | | | | | | | 142,579 | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,122,568 | | | | | | | $ | 1,085,857 | | | | | | | $ | 1,126,403 | | | | | | | $ | 1,086,624 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest spread | | | | | | | 3.46 | % | | | | | | | 3.30 | % | | | | | | | 3.43 | % | | | | | | | 3.30 | % |
| Net interest margin | | | | | | | 3.57 | % | | | | | | | 3.43 | % | | | | | | | 3.53 | % | | | | | | | 3.43 | % |
| Shore Bancshares, Inc. |
| Financial Highlights By Quarter |
| (Dollars in thousands, except per share data) |
| | | 2nd quarter | | | 1st quarter | | | 4th quarter | | | 3rd quarter | | | 2nd quarter | | | 2Q 16 | | | 2Q 16 |
| | | 2016 | | | 2016 | | | 2015 | | | 2015 | | | 2015 | | | compared to | | | compared to |
| | | (2Q 16) | | | (1Q 16) | | | (4Q 15) | | | (3Q 15) | | | (2Q 15) | | | 1Q 16 | | | 2Q 15 |
| PROFITABILITY FOR THE PERIOD | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable-equivalent net interest income | | $ | 9,415 | | | $ | 9,273 | | | $ | 9,315 | | | $ | 9,027 | | | $ | 8,701 | | | | 1.5 | % | | 8.2 | % |
| Less: Taxable-equivalent adjustment | | | 32 | | | | 30 | | | | 22 | | | | 17 | | | | 18 | | | | 6.7 | | | 77.8 | |
| Net interest income | | | 9,383 | | | | 9,243 | | | | 9,293 | | | | 9,010 | | | | 8,683 | | | | 1.5 | | | 8.1 | |
| Provision for credit losses | | | 375 | | | | 450 | | | | 475 | | | | 410 | | | | 540 | | | | (16.7 | ) | | (30.6 | ) |
| Noninterest income | | | 4,041 | | | | 4,541 | | | | 3,638 | | | | 3,905 | | | | 3,788 | | | | (11.0 | ) | | 6.7 | |
| Noninterest expense | | | 9,365 | | | | 9,339 | | | | 8,950 | | | | 9,396 | | | | 9,300 | | | | 0.3 | | | 0.7 | |
| Income before income taxes | | | 3,684 | | | | 3,995 | | | | 3,506 | | | | 3,109 | | | | 2,631 | | | | (7.8 | ) | | 40.0 | |
| Income tax expense | | | 1,412 | | | | 1,535 | | | | 1,343 | | | | 1,200 | | | | 1,004 | | | | (8.0 | ) | | 40.6 | |
| Net income | | $ | 2,272 | | | $ | 2,460 | | | $ | 2,163 | | | $ | 1,909 | | | $ | 1,627 | | | | (7.6 | ) | | 39.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.81 | % | | | 0.88 | % | | | 0.76 | % | | | 0.68 | % | | | 0.60 | % | | | (7 | )bp | | 21 | bp |
| Return on average equity | | | 6.04 | | | | 6.64 | | | | 5.93 | | | | 5.23 | | | | 4.56 | | | | (60 | ) | | 148 | |
| Return on average tangible equity (1) | | | 6.67 | | | | 7.34 | | | | 6.58 | | | | 5.81 | | | | 5.08 | | | | (67 | ) | | 159 | |
| Net interest margin | | | 3.57 | | | | 3.50 | | | | 3.45 | | | | 3.43 | | | | 3.43 | | | | 7 | | | 14 | |
| Efficiency ratio - GAAP | | | 69.60 | | | | 67.61 | | | | 69.10 | | | | 72.66 | | | | 74.47 | | | | 199 | | | (487 | ) |
| Efficiency ratio - Non-GAAP (1) | | | 69.35 | | | | 67.37 | | | | 68.84 | | | | 72.39 | | | | 74.20 | | | | 198 | | | (485 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income per common share | | $ | 0.18 | | | $ | 0.19 | | | $ | 0.17 | | | $ | 0.15 | | | $ | 0.13 | | | | (5.3 | )% | | 38.5 | % |
| Diluted net income per common share | | | 0.18 | | | | 0.19 | | | | 0.17 | | | | 0.15 | | | | 0.13 | | | | (5.3 | ) | | 38.5 | |
| Dividends paid per common share | | | 0.03 | | | | 0.03 | | | | 0.02 | | | | 0.02 | | | | - | | | | - | | | 100.0 | |
| Book value per common share at period end | | | 12.04 | | | | 11.88 | | | | 11.64 | | | | 11.55 | | | | 11.35 | | | | 1.3 | | | 6.1 | |
| Tangible book value per common share at period end (1) | | | 11.00 | | | | 10.84 | | | | 10.59 | | | | 10.51 | | | | 10.31 | | | | 1.5 | | | 6.7 | |
| Market value at period end | | | 11.75 | | | | 11.98 | | | | 10.88 | | | | 9.72 | | | | 9.43 | | | | (1.9 | ) | | 24.6 | |
| Market range: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| High | | | 12.50 | | | | 12.08 | | | | 11.00 | | | | 9.72 | | | | 9.55 | | | | 3.5 | | | 30.9 | |
| Low | | | 10.23 | | | | 11.95 | | | | 10.64 | | | | 9.37 | | | | 9.43 | | | | (14.4 | ) | | 8.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AVERAGE BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 807,231 | | | $ | 790,777 | | | $ | 785,572 | | | $ | 763,306 | | | $ | 727,800 | | | | 2.1 | % | | 10.9 | % |
| Investment securities | | | 204,357 | | | | 214,988 | | | | 213,307 | | | | 230,222 | | | | 241,684 | | | | (4.9 | ) | | (15.4 | ) |
| Earning assets | | | 1,061,645 | | | | 1,065,514 | | | | 1,072,728 | | | | 1,044,230 | | | | 1,016,172 | | | | (0.4 | ) | | 4.5 | |
| Assets | | | 1,122,568 | | | | 1,130,238 | | | | 1,137,430 | | | | 1,111,361 | | | | 1,085,857 | | | | (0.7 | ) | | 3.4 | |
| Deposits | | | 959,397 | | | | 968,991 | | | | 978,049 | | | | 953,826 | | | | 931,637 | | | | (1.0 | ) | | 3.0 | |
| Stockholders' equity | | | 151,270 | | | | 149,032 | | | | 146,597 | | | | 144,897 | | | | 143,266 | | | | 1.5 | | | 5.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CREDIT QUALITY DATA AT PERIOD END | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs | | $ | 326 | | | $ | 457 | | | $ | 257 | | | $ | 229 | | | $ | 421 | | | | (28.7 | )% | | (22.6 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 13,531 | | | $ | 11,925 | | | $ | 12,093 | | | $ | 13,143 | | | $ | 14,009 | | | | 13.5 | | | (3.4 | ) |
| Loans 90 days past due and still accruing | | | 6 | | | | 35 | | | | 7 | | | | 4 | | | | 35 | | | | (82.9 | ) | | (82.9 | ) |
| Other real estate owned | | | 1,897 | | | | 3,896 | | | | 4,252 | | | | 2,884 | | | | 2,498 | | | | (51.3 | ) | | (24.1 | ) |
| Total nonperforming assets | | $ | 15,434 | | | $ | 15,856 | | | $ | 16,352 | | | $ | 16,031 | | | $ | 16,542 | | | | (2.7 | ) | | (6.7 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accruing troubled debt restructurings (TDRs) | | $ | 13,338 | | | $ | 14,753 | | | $ | 15,495 | | | $ | 16,431 | | | $ | 18,353 | | | | (9.6 | ) | | (27.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total nonperforming assets and accruing TDRs | | $ | 28,772 | | | $ | 30,609 | | | $ | 31,847 | | | $ | 32,462 | | | $ | 34,895 | | | | (6.0 | ) | | (17.5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL AND CREDIT QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period-end equity to assets | | | 13.53 | % | | | 13.27 | % | | | 12.95 | % | | | 13.05 | % | | | 13.22 | % | | | 26 | bp | | 31 | bp |
| Period-end tangible equity to tangible assets (1) | | | 12.52 | | | | 12.25 | | | | 11.93 | | | | 12.02 | | | | 12.16 | | | | 27 | | | 36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annualized net charge-offs to average loans | | | 0.16 | | | | 0.23 | | | | 0.13 | | | | 0.12 | | | | 0.23 | | | | (7 | ) | | (7 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for credit losses as a percent of: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period-end loans | | | 1.02 | | | | 1.04 | | | | 1.05 | | | | 1.04 | | | | 1.07 | | | | (2 | ) | | (5 | ) |
| Nonaccrual loans | | | 61.77 | | | | 69.68 | | | | 68.77 | | | | 61.61 | | | | 56.51 | | | | (791 | ) | | 526 | |
| Nonperforming assets | | | 54.15 | | | | 52.40 | | | | 50.86 | | | | 50.51 | | | | 47.86 | | | | 175 | | | 629 | |
| Accruing TDRs | | | 62.66 | | | | 56.32 | | | | 53.67 | | | | 49.28 | | | | 43.14 | | | | 634 | | | 1,952 | |
| Nonperforming assets and accruing TDRs | | | 29.05 | | | | 27.15 | | | | 26.11 | | | | 24.95 | | | | 22.69 | | | | 190 | | | 636 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As a percent of total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | | 1.65 | | | | 1.49 | | | | 1.52 | | | | 1.69 | | | | 1.89 | | | | 16 | | | (24 | ) |
| Accruing TDRs | | | 1.62 | | | | 1.85 | | | | 1.95 | | | | 2.11 | | | | 2.48 | | | | (23 | ) | | (86 | ) |
| Nonaccrual loans and accruing TDRs | | | 3.27 | | | | 3.34 | | | | 3.47 | | | | 3.80 | | | | 4.37 | | | | (7 | ) | | (110 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As a percent of total loans+other real estate owned: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonperforming assets | | | 1.88 | | | | 1.98 | | | | 2.05 | | | | 2.06 | | | | 2.22 | | | | (10 | ) | | (34 | ) |
| Nonperforming assets and accruing TDRs | | | 3.50 | | | | 3.81 | | | | 3.98 | | | | 4.16 | | | | 4.69 | | | | (31 | ) | | (119 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| As a percent of total assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | | 1.20 | | | | 1.05 | | | | 1.07 | | | | 1.18 | | | | 1.29 | | | | 15 | | | (9 | ) |
| Nonperforming assets | | | 1.37 | | | | 1.40 | | | | 1.44 | | | | 1.43 | | | | 1.53 | | | | (3 | ) | | (16 | ) |
| Accruing TDRs | | | 1.18 | | | | 1.30 | | | | 1.37 | | | | 1.47 | | | | 1.69 | | | | (12 | ) | | (51 | ) |
| Nonperforming assets and accruing TDRs | | | 2.55 | | | | 2.70 | | | | 2.81 | | | | 2.90 | | | | 3.22 | | | | (15 | ) | | (67 | ) |
| (1) | See the reconciliation table on page 12 of 12. |
| Shore Bancshares, Inc. |
| Consolidated Statements of Operations By Quarter |
| (In thousands, except per share data) |
| | | | | | | | | | | | | | | | | | 2Q 16 | | | 2Q 16 | |
| | | | | | | | | | | | | | | | | | compared to | | | compared to | |
| | | 2Q 16 | | | 1Q 16 | | | 4Q 15 | | | 3Q 15 | | | 2Q 15 | | | 1Q 16 | | | 2Q 15 | |
| INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 9,117 | | | $ | 8,961 | | | $ | 9,142 | | | $ | 8,912 | | | $ | 8,581 | | | | 1.7 | % | | | 6.2 | % |
| Interest and dividends on investment securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 824 | | | | 870 | | | | 854 | | | | 892 | | | | 932 | | | | (5.3 | ) | | | (11.6 | ) |
| Tax-exempt | | | 2 | | | | 2 | | | | 2 | | | | 2 | | | | 3 | | | | - | | | | (33.3 | ) |
| Interest on federal funds sold | | | 2 | | | | 3 | | | | 1 | | | | 1 | | | | - | | | | (33.3 | ) | | | - | |
| Interest on deposits with other banks | | | 58 | | | | 72 | | | | 48 | | | | 30 | | | | 26 | | | | (19.4 | ) | | | 123.1 | |
| Total interest income | | | 10,003 | | | | 9,908 | | | | 10,047 | | | | 9,837 | | | | 9,542 | | | | 1.0 | | | | 4.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 617 | | | | 661 | | | | 750 | | | | 824 | | | | 856 | | | | (6.7 | ) | | | (27.9 | ) |
| Interest on short-term borrowings | | | 3 | | | | 4 | | | | 4 | | | | 3 | | | | 3 | | | | (25.0 | ) | | | - | |
| Total interest expense | | | 620 | | | | 665 | | | | 754 | | | | 827 | | | | 859 | | | | (6.8 | ) | | | (27.8 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME | | | 9,383 | | | | 9,243 | | | | 9,293 | | | | 9,010 | | | | 8,683 | | | | 1.5 | | | | 8.1 | |
| Provision for credit losses | | | 375 | | | | 450 | | | | 475 | | | | 410 | | | | 540 | | | | (16.7 | ) | | | (30.6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME AFTER PROVISION | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FOR CREDIT LOSSES | | | 9,008 | | | | 8,793 | | | | 8,818 | | | | 8,600 | | | | 8,143 | | | | 2.4 | | | | 10.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 870 | | | | 813 | | | | 806 | | | | 769 | | | | 658 | | | | 7.0 | | | | 32.2 | |
| Trust and investment fee income | | | 364 | | | | 351 | | | | 348 | | | | 360 | | | | 450 | | | | 3.7 | | | | (19.1 | ) |
| Other noninterest income | | | 1,941 | | | | 2,759 | | | | 1,760 | | | | 2,107 | | | | 1,932 | | | | (29.6 | ) | | | 0.5 | |
| Total noninterest income | | | 866 | | | | 618 | | | | 724 | | | | 669 | | | | 748 | | | | 40.1 | | | | 15.8 | |
| | | | 4,041 | | | | 4,541 | | | | 3,638 | | | | 3,905 | | | | 3,788 | | | | (11.0 | ) | | | 6.7 | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and wages | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Employee benefits | | | 4,422 | | | | 4,477 | | | | 4,366 | | | | 4,468 | | | | 4,393 | | | | (1.2 | ) | | | 0.7 | |
| Occupancy expense | | | 964 | | | | 1,114 | | | | 890 | | | | 935 | | | | 924 | | | | (13.5 | ) | | | 4.3 | |
| Furniture and equipment expense | | | 583 | | | | 613 | | | | 583 | | | | 600 | | | | 611 | | | | (4.9 | ) | | | (4.6 | ) |
| Data processing | | | 248 | | | | 235 | | | | 215 | | | | 223 | | | | 233 | | | | 5.5 | | | | 6.4 | |
| Directors' fees | | | 854 | | | | 809 | | | | 809 | | | | 800 | | | | 868 | | | | 5.6 | | | | (1.6 | ) |
| Amortization of intangible assets | | | 131 | | | | 104 | | | | 114 | | | | 117 | | | | 116 | | | | 26.0 | | | | 12.9 | |
| FDIC insurance premium expense | | | 33 | | | | 33 | | | | 33 | | | | 34 | | | | 33 | | | | - | | | | - | |
| Write-downs of other real estate owned | | | 268 | | | | 282 | | | | 281 | | | | 243 | | | | 306 | | | | (5.0 | ) | | | (12.4 | ) |
| Legal and professional fees | | | 66 | | | | 7 | | | | 39 | | | | 7 | | | | 54 | | | | 842.9 | | | | 22.2 | |
| Other noninterest expenses | | | 609 | | | | 385 | | | | 440 | | | | 642 | | | | 573 | | | | 58.2 | | | | 6.3 | |
| Total noninterest expense | | | 1,187 | | | | 1,280 | | | | 1,180 | | | | 1,327 | | | | 1,189 | | | | (7.3 | ) | | | (0.2 | ) |
| | | | 9,365 | | | | 9,339 | | | | 8,950 | | | | 9,396 | | | | 9,300 | | | | 0.3 | | | | 0.7 | |
| Income before income taxes | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income tax expense | | | 3,684 | | | | 3,995 | | | | 3,506 | | | | 3,109 | | | | 2,631 | | | | (7.8 | ) | | | 40.0 | |
| | | | 1,412 | | | | 1,535 | | | | 1,343 | | | | 1,200 | | | | 1,004 | | | | (8.0 | ) | | | 40.6 | |
| NET INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | $ | 2,272 | | | $ | 2,460 | | | $ | 2,163 | | | $ | 1,909 | | | $ | 1,627 | | | | (7.6 | ) | | | 39.6 | |
| Weighted average shares outstanding - basic | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding - diluted | | | 12,648 | | | | 12,635 | | | | 12,631 | | | | 12,630 | | | | 12,629 | | | | 0.1 | | | | 0.2 | |
| | | | 12,665 | | | | 12,649 | | | | 12,645 | | | | 12,640 | | | | 12,638 | | | | 0.1 | | | | 0.2 | |
| Basic net income per common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted net income per common share | | $ | 0.18 | | | $ | 0.19 | | | $ | 0.17 | | | $ | 0.15 | | | $ | 0.13 | | | | (5.3 | ) | | | 38.5 | |
| Dividends paid per common share | | | 0.18 | | | | 0.19 | | | | 0.17 | | | | 0.15 | | | | 0.13 | | | | (5.3 | ) | | | 38.5 | |
| | | | 0.03 | | | | 0.03 | | | | 0.02 | | | | 0.02 | | | | - | | | | - | | | | - | |
| Shore Bancshares, Inc. | |
| Consolidated Average Balance Sheets By Quarter |
| (Dollars in thousands) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average balance | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2Q 16 | | | 2Q 16 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | compared to | | | compared to | |
| | | 2Q 16 | | | 1Q 16 | | | 4Q 15 | | | 3Q 15 | | | 2Q 15 | | | 1Q 16 | | | 2Q 15 | |
| | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | Average | | | Yield/ | | | | | | | |
| | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | balance | | | rate | | | | | | | |
| Earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 807,231 | | | | 4.56 | % | | $ | 790,777 | | | | 4.57 | % | | $ | 785,572 | | | | 4.63 | % | | $ | 763,306 | | | | 4.64 | % | | $ | 727,800 | | | | 4.74 | % | | | 2.1 | % | | | 10.9 | % |
| Investment securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 204,147 | | | | 1.61 | | | | 214,778 | | | | 1.62 | | | | 213,097 | | | | 1.60 | | | | 229,979 | | | | 1.55 | | | | 241,254 | | | | 1.55 | | | | (4.9 | ) | | | (15.4 | ) |
| Tax-exempt | | | 210 | | | | 5.30 | | | | 210 | | | | 5.30 | | | | 210 | | | | 5.30 | | | | 243 | | | | 5.01 | | | | 430 | | | | 4.21 | | | | - | | | | (51.2 | ) |
| Federal funds sold | | | 2,910 | | | | 0.34 | | | | 3,640 | | | | 0.33 | | | | 3,886 | | | | 0.12 | | | | 2,341 | | | | 0.10 | | | | 2,931 | | | | 0.09 | | | | (20.1 | ) | | | (0.7 | ) |
| Interest-bearing deposits | | | 47,147 | | | | 0.50 | | | | 56,109 | | | | 0.51 | | | | 69,963 | | | | 0.27 | | | | 48,361 | | | | 0.25 | | | | 43,757 | | | | 0.24 | | | | (16.0 | ) | | | 7.7 | |
| Total earning assets | | | 1,061,645 | | | | 3.80 | % | | | 1,065,514 | | | | 3.75 | % | | | 1,072,728 | | | | 3.72 | % | | | 1,044,230 | | | | 3.74 | % | | | 1,016,172 | | | | 3.77 | % | | | (0.4 | ) | | | 4.5 | |
| Cash and due from banks | | | 14,776 | | | | | | | | 16,205 | | | | | | | | 16,628 | | | | | | | | 17,434 | | | | | | | | 18,723 | | | | | | | | (8.8 | ) | | | (21.1 | ) |
| Other assets | | | 54,699 | | | | | | | | 57,037 | | | | | | | | 56,512 | | | | | | | | 57,891 | | | | | | | | 59,045 | | | | | | | | (4.1 | ) | | | (7.4 | ) |
| Allowance for credit losses | | | (8,552 | ) | | | | | | | (8,518 | ) | | | | | | | (8,438 | ) | | | | | | | (8,194 | ) | | | | | | | (8,083 | ) | | | | | | | 0.4 | | | | 5.8 | |
| Total assets | | $ | 1,122,568 | | | | | | | $ | 1,130,238 | | | | | | | $ | 1,137,430 | | | | | | | $ | 1,111,361 | | | | | | | $ | 1,085,857 | | | | | | | | (0.7 | ) | | | 3.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand deposits | | $ | 186,137 | | | | 0.12 | % | | $ | 193,087 | | | | 0.12 | % | | $ | 190,237 | | | | 0.13 | % | | $ | 184,471 | | | | 0.13 | % | | $ | 171,274 | | | | 0.12 | % | | | (3.6 | ) | | | 8.7 | |
| Money market and savings deposits | | | 261,495 | | | | 0.13 | | | | 258,715 | | | | 0.13 | | | | 255,974 | | | | 0.14 | | | | 242,830 | | | | 0.14 | | | | 238,173 | | | | 0.14 | | | | 1.1 | | | | 9.8 | |
| Certificates of deposit $100,000 or more | | | 129,544 | | | | 0.69 | | | | 132,412 | | | | 0.71 | | | | 139,663 | | | | 0.80 | | | | 148,617 | | | | 0.92 | | | | 152,478 | | | | 0.97 | | | | (2.2 | ) | | | (15.0 | ) |
| Other time deposits | | | 151,577 | | | | 0.68 | | | | 153,774 | | | | 0.74 | | | | 158,011 | | | | 0.80 | | | | 163,224 | | | | 0.82 | | | | 166,277 | | | | 0.85 | | | | (1.4 | ) | | | (8.8 | ) |
| Interest-bearing deposits | | | 728,753 | | | | 0.34 | | | | 737,988 | | | | 0.36 | | | | 743,885 | | | | 0.40 | | | | 739,142 | | | | 0.44 | | | | 728,202 | | | | 0.47 | | | | (1.3 | ) | | | 0.1 | |
| Short-term borrowings | | | 5,792 | | | | 0.24 | | | | 6,242 | | | | 0.24 | | | | 6,199 | | | | 0.23 | | | | 6,501 | | | | 0.24 | | | | 4,872 | | | | 0.23 | | | | (7.2 | ) | | | 18.9 | |
| Total interest-bearing liabilities | | | 734,545 | | | | 0.34 | % | | | 744,230 | | | | 0.36 | % | | | 750,084 | | | | 0.40 | % | | | 745,643 | | | | 0.44 | % | | | 733,074 | | | | 0.47 | % | | | (1.3 | ) | | | 0.2 | |
| Noninterest-bearing deposits | | | 230,644 | | | | | | | | 231,003 | | | | | | | | 234,164 | | | | | | | | 214,684 | | | | | | | | 203,435 | | | | | | | | (0.2 | ) | | | 13.4 | |
| Accrued expenses and other liabilities | | | 6,109 | | | | | | | | 5,973 | | | | | | | | 6,585 | | | | | | | | 6,137 | | | | | | | | 6,082 | | | | | | | | 2.3 | | | | 0.4 | |
| Stockholders' equity | | | 151,270 | | | | | | | | 149,032 | | | | | | | | 146,597 | | | | | | | | 144,897 | | | | | | | | 143,266 | | | | | | | | 1.5 | | | | 5.6 | |
| Total liabilities and stockholders' equity | | $ | 1,122,568 | | | | | | | $ | 1,130,238 | | | | | | | $ | 1,137,430 | | | | | | | $ | 1,111,361 | | | | | | | $ | 1,085,857 | | | | | | | | (0.7 | ) | | | 3.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest spread | | | | | | | 3.46 | % | | | | | | | 3.39 | % | | | | | | | 3.32 | % | | | | | | | 3.30 | % | | | | | | | 3.30 | % | | | | | | | | |
| Net interest margin | | | | | | | 3.57 | % | | | | | | | 3.50 | % | | | | | | | 3.45 | % | | | | | | | 3.43 | % | | | | | | | 3.43 | % | | | | | | | | |
| Shore Bancshares, Inc. |
| Reconciliation of Generally Accepted Accounting Principles (GAAP) |
| and Non-GAAP Measures |
| (In thousands, except per share data) |
| | | | | | | | | | | | | | | | | | YTD | | | YTD | |
| | | 2Q 16 | | | 1Q 16 | | | 4Q 15 | | | 3Q 15 | | | 2Q 15 | | | 6/30/2016 | | | 6/30/2015 | |
| | | | | | | | | | | | | | | | | | | | | | |
| The following reconciles return on average equity and return on | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| average tangible equity (Note 1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 2,272 | | | $ | 2,460 | | | $ | 2,163 | | | $ | 1,909 | | | $ | 1,627 | | | $ | 4,732 | | | $ | 3,036 | |
| Net income - annualized (A) | | $ | 9,138 | | | $ | 9,894 | | | $ | 8,581 | | | $ | 7,574 | | | $ | 6,526 | | | $ | 9,516 | | | $ | 6,122 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income, excluding net amortization of intangible assets | | $ | 2,292 | | | $ | 2,480 | | | $ | 2,183 | | | $ | 1,930 | | | $ | 1,647 | | | $ | 4,772 | | | $ | 3,076 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income, excluding net amortization of intangible | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| assets - annualized (B) | | $ | 9,218 | | | $ | 9,975 | | | $ | 8,661 | | | $ | 7,657 | | | $ | 6,606 | | | $ | 9,596 | | | $ | 6,203 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity (C) | | $ | 151,270 | | | $ | 149,032 | | | $ | 146,597 | | | $ | 144,897 | | | $ | 143,266 | | | $ | 150,151 | | | $ | 142,579 | |
| Less: Average goodwill and other intangible assets | | | (13,096 | ) | | | (13,129 | ) | | | (13,155 | ) | | | (13,182 | ) | | | (13,215 | ) | | | (13,112 | ) | | | (13,231 | ) |
| Average tangible equity (D) | | $ | 138,174 | | | $ | 135,903 | | | $ | 133,442 | | | $ | 131,715 | | | $ | 130,051 | | | $ | 137,039 | | | $ | 129,348 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average equity (GAAP) (A)/(C) | | | 6.04 | % | | | 6.64 | % | | | 5.85 | % | | | 5.23 | % | | | 4.56 | % | | | 6.34 | % | | | 4.29 | % |
| Return on average tangible equity (Non-GAAP) (B)/(D) | | | 6.67 | % | | | 7.34 | % | | | 6.49 | % | | | 5.81 | % | | | 5.08 | % | | | 7.00 | % | | | 4.80 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The following reconciles GAAP efficiency ratio and non-GAAP | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| efficiency ratio (Note 2): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expense (E) | | $ | 9,365 | | | $ | 9,339 | | | $ | 8,950 | | | $ | 9,396 | | | $ | 9,300 | | | $ | 18,704 | | | $ | 19,004 | |
| Less: Amortization of intangible assets | | | (33 | ) | | | (33 | ) | | | (33 | ) | | | (34 | ) | | | (33 | ) | | | (66 | ) | | | (66 | ) |
| Adjusted noninterest expense (F) | | $ | 9,332 | | | $ | 9,306 | | | $ | 8,917 | | | $ | 9,362 | | | $ | 9,267 | | | $ | 18,638 | | | $ | 18,938 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable-equivalent net interest income (G) | | $ | 9,415 | | | $ | 9,273 | | | $ | 9,315 | | | $ | 9,027 | | | $ | 8,701 | | | $ | 18,688 | | | $ | 17,261 | |
| Taxable-equivalent net interest income excluding nonrecurring adjustment (H) | | $ | 9,415 | | | $ | 9,273 | | | $ | 9,315 | | | $ | 9,027 | | | $ | 8,701 | | | $ | 18,688 | | | $ | 17,261 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest income (I) | | $ | 4,041 | | | $ | 4,541 | | | $ | 3,638 | | | $ | 3,905 | | | $ | 3,788 | | | $ | 8,582 | | | $ | 7,873 | |
| Adjusted noninterest income (J) | | $ | 4,041 | | | $ | 4,541 | | | $ | 3,638 | | | $ | 3,905 | | | $ | 3,788 | | | $ | 8,582 | | | $ | 7,873 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Efficiency ratio (GAAP) (E)/(G)+(I) | | | 69.60 | % | | | 67.61 | % | | | 69.10 | % | | | 72.66 | % | | | 74.47 | % | | | 68.59 | % | | | 75.61 | % |
| Efficiency ratio (Non-GAAP) (F)/(H)+(J) | | | 69.35 | % | | | 67.37 | % | | | 68.84 | % | | | 72.39 | % | | | 74.20 | % | | | 68.35 | % | | | 75.35 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| The following reconciles book value per common share and tangible | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| book value per common share (Note 1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Stockholders' equity (K) | | $ | 152,321 | | | $ | 150,109 | | | $ | 146,967 | | | $ | 145,887 | | | $ | 143,402 | | | | | | | | | |
| Less: Goodwill and other intangible assets | | | (13,076 | ) | | | (13,109 | ) | | | (13,142 | ) | | | (13,162 | ) | | | (13,195 | ) | | | | | | | | |
| Tangible equity (L) | | $ | 139,245 | | | $ | 137,000 | | | $ | 133,825 | | | $ | 132,725 | | | $ | 130,207 | | | | | | | | | |
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| Shares outstanding (M) | | | 12,655 | | | | 12,640 | | | | 12,631 | | | | 12,630 | | | | 12,630 | | | | | | | | | |
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| Book value per common share (GAAP) (K)/(M) | | $ | 12.04 | | | $ | 11.88 | | | $ | 11.64 | | | $ | 11.55 | | | $ | 11.35 | | | | | | | | | |
| Tangible book value per common share (Non-GAAP) (L)/(M) | | $ | 11.00 | | | $ | 10.84 | | | $ | 10.59 | | | $ | 10.51 | | | $ | 10.31 | | | | | | | | | |
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| The following reconciles equity to assets and | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| tangible equity to tangible assets (Note 1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Stockholders' equity (N) | | $ | 152,321 | | | $ | 150,109 | | | $ | 146,967 | | | $ | 145,887 | | | $ | 143,402 | | | | | | | | | |
| Less: Goodwill and other intangible assets | | | (13,076 | ) | | | (13,109 | ) | | | (13,142 | ) | | | (13,162 | ) | | | (13,195 | ) | | | | | | | | |
| Tangible equity (O) | | $ | 139,245 | | | $ | 137,000 | | | $ | 133,825 | | | $ | 132,725 | | | $ | 130,207 | | | | | | | | | |
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| Assets (P) | | $ | 1,125,690 | | | $ | 1,131,175 | | | $ | 1,135,143 | | | $ | 1,117,813 | | | $ | 1,084,352 | | | | | | | | | |
| Less: Goodwill and other intangible assets | | | (13,076 | ) | | | (13,109 | ) | | | (13,142 | ) | | | (13,162 | ) | | | (13,195 | ) | | | | | | | | |
| Tangible assets (Q) | | $ | 1,112,614 | | | $ | 1,118,066 | | | $ | 1,122,001 | | | $ | 1,104,651 | | | $ | 1,071,157 | | | | | | | | | |
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| Period-end equity/assets (GAAP) (N)/(P) | | | 13.53 | % | | | 13.27 | % | | | 12.95 | % | | | 13.05 | % | | | 13.22 | % | | | | | | | | |
| Period-end tangible equity/tangible assets (Non-GAAP) (O)/(Q) | | | 12.52 | % | | | 12.25 | % | | | 11.93 | % | | | 12.02 | % | | | 12.16 | % | | | | | | | | |
Note 1: Management believes that reporting tangible equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes.
Note 2: Management believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling cash-based operating activities.
CONTACT: Edward Allen, Chief Financial Officer, 410-763-7800
