Shore Bancshares Reports First Quarter 2016 Financial Results

Shore Bancshares Reports First Quarter 2016 Financial Results

PR Newswire

EASTON, Md., April 21, 2016 /PRNewswire/ -- Shore Bancshares, Inc. (NASDAQ: SHBI) reported net income of $2.460 million or $0.19 per diluted common share for the first quarter of 2016, compared to net income of $2.163 million or $0.17 per diluted common share for the fourth quarter of 2015, and net income of $1.409 million or $0.11 per diluted common share for the first quarter of 2015. 

When comparing the first quarter of 2016 to the fourth quarter of 2015, the primary reason for the improved results was a $903 thousand increase in noninterest income partially offset by an increase in noninterest expense of $389 thousand.  When comparing the first quarter of 2016 to the first quarter of 2015, the primary reasons for the improved results were increases in net interest income of $704 thousand and noninterest income of $456 thousand.  Also contributing to the improved earnings were decreases in noninterest expenses of $365 thousand and provision for credit losses of $200 thousand.    

"We are pleased to report our continuing improved earnings over the linked quarter and the first quarter of 2015," said Lloyd L. "Scott" Beatty, Jr., president and chief executive officer.  "2016 will be an exciting year as we continue to focus on loan and deposit growth as well as revenues of our other fee based businesses."     

Balance Sheet Review
Total assets were $1.131 billion at March 31, 2016, a $4.0 million, or less than 1%, decrease when compared to $1.135 billion at the end of 2015.  The decrease in total assets included a decline in investment securities available for sale of $5.4 million, which funded loan growth of $3.8 million for the quarter.  Other assets declined $1.5 million, primarily in deferred taxes as the Company continued to utilize net operating loss carryforwards to offset taxable earnings. 

Total deposits decreased $5.7 million, or less than 1%, when compared to December 31, 2015.  The decrease in total deposits was mainly due to reductions in municipal deposits impacted by tax collections resulting in declines in checking deposits of $9.2 million and time deposits of $6.9 million, which were offset by an increase in money market and savings deposits of $10.4 million.  Total stockholders' equity increased $3.1 million, or 2.1%, when compared to the end of 2015.  At March 31, 2016, the ratio of total equity to total assets was 13.27% and the ratio of total tangible equity to total tangible assets was 12.25%.

Total assets at March 31, 2016 increased $37.1 million, or 3.4%, when compared to total assets at March 31, 2015.  The increase in total assets was primarily due to significant loan growth of $77.3 million, partially funded by a decrease in investment securities of $33.9 million and cash and cash equivalents of $2.3 million.   

Review of Quarterly Financial Results
Net interest income was $9.2 million for the first quarter of 2016, compared to $9.3 million for the fourth quarter of 2015 and $8.5 million for the first quarter of 2015.  Net interest income when compared to the fourth quarter of 2015 was lower by $50 thousand due to one less earnings day, as well as, lower yields on loans, partially offset by a higher yield on taxable investment securities.  Also impacting the margin was the increase in the federal funds rate of 25bps in late December of 2015 which resulted in a higher yield on deposits with other banks.  The Company's net interest margin improved by 5 basis points to 3.50% over the fourth quarter of 2015.  The increase in net interest income when compared to the first quarter of 2015 was primarily the result of significant loan growth, with average loans increasing $76 million.  The Company's net interest margin when compared to the first quarter of 2015 increased 7 basis points to 3.50%, the result of higher loan volume and higher yields on investment securities, partially offset by a decline in yields on loans.  Additionally, average rates paid on deposits declined 13 basis points primarily related to time deposit repricing.

The provision for credit losses was $450 thousand for the three months ended March 31, 2016.  The comparable amounts were $475 thousand and $650 thousand for the three months ended December 31, 2015 and March 31, 2015, respectively.  The provision for credit losses slightly decreased between the first quarter of 2016 and the fourth quarter of 2015, due to a decline in nonaccrual loans.  The lower level of provision for credit losses when comparing the first quarter of 2016 to the first quarter of 2015 was primarily due to decreases in loan charge-offs and nonaccrual loans.  Net charge-offs were $457 thousand for the first quarter of 2016, $257 thousand for the fourth quarter of 2015 and $547 thousand for the first quarter of 2015.  The ratio of annualized net charge-offs to average loans was 0.23% for the first quarter of 2016, 0.13% for the fourth quarter of 2015 and 0.31% for the first quarter of 2015.  The ratio of the allowance for credit losses to period-end loans at March 31, 2016 was 1.04%, lower than the 1.05% at December 31, 2015 and 1.08% at March 31, 2015.  

Nonperforming assets excluding accruing troubled debt restructurings (TDRs) were $15.9 million at March 31, 2016, $16.4 million at December 31, 2015 and $16.4 million at March 31, 2015. Nonperforming assets including accruing TDRs at March 31, 2016 were $30.6 million, compared to $31.8 million at December 31, 2015 and $33.1 million at March 31, 2015.  The decreases in nonperforming assets and TDRs are the result of the continued work out efforts and charge-offs period over period.  At March 31, 2016, the ratio of nonaccrual loans to total assets was 1.05%, compared to 1.07% and 1.18% at December 31, 2015 and March 31, 2015, respectively.  In addition, the ratio of accruing TDRs to total assets at March 31, 2016 was 1.30%, improving from 1.37% and 1.52% at December 31, 2015 and March 31, 2015.

Total noninterest income for the first quarter of 2016 increased $903 thousand when compared to the fourth quarter of 2015 and increased $456 thousand when compared to the first quarter of 2015.  The increase from the fourth quarter of 2015 was the result of higher insurance agency commissions, mainly from contingency payments which are typically received in the first quarter of each year and are based on the prior year's performance.  The increase from the first quarter of 2015 was due to increases in service charges on deposits and other banking service fees of $179 thousand, an increase in retail insurance commissions of $184 thousand, and an increase in contingency payments of $100 thousand, offset by decline in trust and investment fee income of $118 thousand.

Total noninterest expense for the first quarter of 2016 increased $389 thousand when compared to the fourth quarter of 2015 and decreased $365 thousand when compared to the first quarter of 2015.  The increase in noninterest expense compared to the fourth quarter of 2015 was primarily due to higher costs associated with employee benefits of $224 thousand, which included higher insurance premiums for group insurance and federal unemployment insurance which is usually paid the first two quarters of the year.  Salaries and wages also increased by $111 thousand in the first quarter due to pay increases implemented during the period.  The decrease from the first quarter of 2015 was primarily due to lower legal and professional fees of $340 thousand, lower FDIC insurance premiums of $102 thousand, offset by an increase in salary and wages of $164 thousand due to pay increases. 

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 Maryland chartered commercial banks, The Talbot Bank of Easton, Maryland, and CNB; one retail insurance producer firm, The Avon-Dixon Agency, LLC, with two specialty lines, Elliot Wilson Insurance (Trucking), and Jack Martin and Associates (Marine); and an insurance premium finance company, Mubell Finance, LLC.  Shore Bancshares, Inc. engages in the trust services business through the trust department at CNB under the name "Wye Financial & Trust".  Additional information is available at www.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.

Shore Bancshares, Inc.





Page 4 of 11


Financial Highlights







(Dollars in thousands, except per share data)






















   For the Three Months Ended



March 31,



2016


2015


Change


     Net interest income

$      9,243


$      8,539


8.2

%

     Provision for credit losses

450


650


(30.8)


     Noninterest income

4,541


4,085


11.2


     Noninterest expense

9,339


9,704


(3.8)


     Income before income taxes

3,995


2,270


76.0


     Income tax expense

1,535


861


78.3


     Net income

$      2,460


$      1,409


74.6
















     Return on average assets

0.88

%

0.53

%

35

bp

     Return on average equity

6.64


4.03


261


     Return on average tangible equity (1)

7.34


4.50


284


     Net interest margin

3.50


3.43


7


     Efficiency ratio - GAAP

67.61


76.74


(913)


     Efficiency ratio - Non-GAAP (1)

67.37


76.48


(911)
















PER SHARE DATA







     Basic net income per common share

$        0.19


$        0.11


72.7

%

     Diluted net income per common share

0.19


0.11


72.7


     Dividends paid per common share

0.03


-


100.0


     Book value per common share at period end

11.88


11.31


5.0


     Tangible book value per common share at period end (1)

10.84


10.26


5.7


     Market value at period end

11.98


9.18


30.5


     Market range:







       High

12.08


9.30


29.9


       Low

11.95


9.03


32.3
















AVERAGE BALANCE SHEET DATA







     Loans

$  790,777


$  714,780


10.6

%

     Investment securities

214,988


244,300


(12.0)


     Earning assets

1,065,514


1,013,490


5.1


     Assets

1,130,238


1,087,401


3.9


     Deposits

968,991


932,460


3.9


     Stockholders' equity

149,032


141,884


5.0
















CREDIT QUALITY DATA AT PERIOD END







     Net charge-offs

$         457


$         547


(16.5)

%








     Nonaccrual loans

$    11,925


$    12,913


(7.7)


     Loans 90 days past due and still accruing

35


36


(2.8)


     Other real estate owned

3,896


3,469


12.3


     Total nonperforming assets

15,856


16,418


(3.4)


     Accruing troubled debt restructurings (TDRs)

14,753


16,644


(11.4)


     Total nonperforming assets and accruing TDRs

$    30,609


$    33,062


(7.4)
















CAPITAL AND CREDIT QUALITY RATIOS







     Period-end equity to assets

13.27

%

13.05

%

22

bp

     Period-end tangible equity to tangible assets (1)

12.25


11.98


27









     Annualized net charge-offs to average loans

0.23


0.31


(8)









     Allowance for credit losses as a percent of:







     Period-end loans

1.04


1.08


(4)


     Nonaccrual loans

69.68


60.39


929


     Nonperforming assets

52.40


47.50


490


     Accruing TDRs

56.32


46.85


947


     Nonperforming assets and accruing TDRs

27.15


23.59


356









     As a percent of total loans:







     Nonaccrual loans

1.49


1.79


(30)


     Accruing TDRs 

1.85


2.31


(46)


     Nonaccrual loans and accruing TDRs

3.34


4.10


(76)









     As a percent of total loans+other real estate owned:







     Nonperforming assets

1.98


2.26


(28)


     Nonperforming assets and accruing TDRs

3.81


4.56


(75)









     As a percent of total assets:







     Nonaccrual loans

1.05


1.18


(13)


     Nonperforming assets

1.40


1.50


(10)


     Accruing TDRs

1.30


1.52


(22)


     Nonperforming assets and accruing TDRs

2.70


3.02


(32)









(1)  See the reconciliation table on page 11 of 11.














 

Shore Bancshares, Inc.









Page 5 of 11

Consolidated Balance Sheets











(In thousands, except per share data)








































March 31, 2016


March 31, 2016



March 31,


December 31,


March 31,


compared to


compared to



2016


2015


2015


December 31, 2015


March 31, 2015


ASSETS











    Cash and due from banks

$       14,566


$       15,080


$       24,319


(3.4)

%

(40.1)

%

    Interest-bearing deposits with other banks

58,507


54,223


48,398


7.9


20.9


    Federal funds sold

553


4,508


3,241


(87.7)


(82.9)


  Cash and cash equivalents

73,626


73,811


75,958


(0.3)


(3.1)













    Investment securities available for sale (at fair value)

206,735


212,165


240,111


(2.6)


(13.9)


    Investment securities held to maturity

3,996


4,191


4,515


(4.7)


(11.5)













    Loans

798,921


795,114


721,605


0.5


10.7


    Less: allowance for credit losses

(8,309)


(8,316)


(7,798)


(0.1)


6.6


    Loans, net

790,612


786,798


713,807


0.5


10.8













    Premises and equipment, net

16,813


16,864


16,728


(0.3)


0.5


    Goodwill

11,931


11,931


11,931


-


-


    Other intangible assets, net

1,178


1,211


1,297


(2.7)


(9.2)


    Other real estate owned, net

3,896


4,252


3,469


(8.4)


12.3


    Other assets

22,388


23,920


26,312


(6.4)


(14.9)













                         Total assets

$  1,131,175


$  1,135,143


$  1,094,128


(0.3)


3.2













LIABILITIES











    Noninterest-bearing deposits

$     229,646


$     229,686


$     201,518


(0.0)


14.0


    Interest-bearing deposits

740,087


745,778


739,256


(0.8)


0.1


                Total deposits

969,733


975,464


940,774


(0.6)


3.1













    Short-term borrowings

5,872


6,672


5,098


(12.0)


15.2


    Accrued expenses and other liabilities

5,461


6,040


5,510


(9.6)


(0.9)


                          Total liabilities

981,066


988,176


951,382


(0.7)


3.1













STOCKHOLDERS' EQUITY











    Common stock, par value $0.01; authorized 











       35,000,000 shares

126


126


126


-


-


    Additional paid in capital

63,929


63,815


63,669


0.2


0.4


    Retained earnings

85,178


83,097


77,903


2.5


9.3


    Accumulated other comprehensive (loss) income

876


(71)


1,048


1,333.8


(16.4)


                          Total stockholders' equity

150,109


146,967


142,746


2.1


5.2













                          Total liabilities and stockholders' equity

$  1,131,175


$  1,135,143


$  1,094,128


(0.3)


3.4













Period-end common shares outstanding

12,640


12,631


12,625


0.1


0.1


Book value per common share

$         11.88


$         11.64


$         11.31


2.1


5.0













 

Shore Bancshares, Inc.




Page 6 of 11

Consolidated Statements of Operations






(In thousands, except per share data)



















For the Three Months Ended



March 31,



2016


2015

% Change


INTEREST INCOME






    Interest and fees on loans

$   8,961


$    8,491

5.5

%

    Interest and dividends on investment securities:






        Taxable

870


924

(5.8)


        Tax-exempt

2


3

(33.3)


    Interest on federal funds sold

3


1

200.0


    Interest on deposits with other banks

72


26

176.9


                   Total interest income

9,908


9,445

4.9








INTEREST EXPENSE






    Interest on deposits

661


901

(26.6)


    Interest on short-term borrowings

4


5

(20.0)


                   Total interest expense

665


906

(26.6)








NET INTEREST INCOME

9,243


8,539

8.2


Provision for credit losses

450


650

(30.8)








NET INTEREST INCOME AFTER PROVISION






  FOR CREDIT LOSSES

8,793


7,889

11.5








NONINTEREST INCOME






    Service charges on deposit accounts

813


634

28.2


    Trust and investment fee income

351


469

(25.2)


    Insurance agency commissions

2,759


2,475

11.5


    Other noninterest income

618


507

21.9


                      Total noninterest income

4,541


4,085

11.2








NONINTEREST EXPENSE






    Salaries and wages

4,477


4,313

3.8


    Employee benefits

1,114


1,156

(3.6)


    Occupancy expense

613


626

(2.1)


    Furniture and equipment expense

235


255

(7.8)


    Data processing

809


783

3.3


    Directors' fees

104


123

(15.4)


    Amortization of intangible assets

33


33

-


    FDIC insurance premium expense

282


384

(26.6)


    Write-downs of other real estate owned

7


27

(74.1)


    Legal and professional fees

385


725

(46.9)


    Other noninterest expenses

1,280


1,279

0.1


                      Total noninterest expense

9,339


9,704

(3.8)








Income before income taxes

3,995


2,270

76.0


Income tax expense

1,535


861

78.3








NET INCOME

$   2,460


$    1,409

74.6








Weighted average shares outstanding - basic

12,635


12,625

0.1


Weighted average shares outstanding - diluted

12,649


12,633

0.1








Basic net income per common share

$     0.19


$       0.11

72.7


Diluted net income per common share

0.19


0.11

72.7


Dividends paid per common share

0.03


-

-








 

Shore Bancshares, Inc.







Page 7 of 11


Consolidated Average Balance Sheets









(Dollars in thousands)




























For the Three Months Ended



March 31,



2016


2015



Average


Yield/


Average


Yield/



balance


rate


balance


rate


Earning assets









  Loans

$    790,777


4.57

%

$    714,780


4.83

%

  Investment securities









   Taxable

214,778


1.62


243,869


1.52


   Tax-exempt

210


5.30


431


4.19


  Federal funds sold

3,640


0.33


2,801


0.09


  Interest-bearing deposits

56,109


0.51


51,609


0.20


    Total earning assets

1,065,514


3.75

%

1,013,490


3.79

%

Cash and due from banks

16,205




21,268




Other assets

57,037




60,611




Allowance for credit losses

(8,518)




(7,968)




Total assets

$ 1,130,238




$ 1,087,401






















Interest-bearing liabilities









  Demand deposits

$    193,087


0.12

%

$    177,071


0.13

%

  Money market and savings deposits

258,715


0.13


237,755


0.14


  Certificates of deposit $100,000 or more

132,412


0.71


156,154


1.00


  Other time deposits

153,774


0.74


169,584


0.90


    Interest-bearing deposits

737,988


0.36


740,564


0.49


  Short-term borrowings

6,242


0.24


7,340


0.27


    Total interest-bearing liabilities

744,230


0.36

%

747,904


0.49

%

Noninterest-bearing deposits

231,003




191,896




Accrued expenses and other liabilities

5,973




5,717




Stockholders' equity

149,032




141,884




Total liabilities and stockholders' equity

$ 1,130,238




$ 1,087,401













Net interest spread



3.39

%



3.30

%

Net interest margin



3.50

%



3.43

%










 

Shore Bancshares, Inc.













Page 8 of 11

Financial Highlights By Quarter















(Dollars in thousands, except per share data)














































1st quarter


4th quarter


3rd quarter


2nd quarter


1st quarter


1Q 16


1Q 16



2016


2015


2015


2015


2015


compared to


compared to



(1Q 16)


(4Q 15)


(3Q 15)


(2Q 15)


(1Q 15)


4Q 15


1Q 15


PROFITABILITY FOR THE PERIOD















     Taxable-equivalent net interest income

$       9,273


$      9,315


$      9,027


$      8,701


$      8,560


(0.5)

%

8.3

%

     Less:  Taxable-equivalent adjustment

30


22


17


18


21


36.4


42.9


     Net interest income

9,243


9,293


9,010


8,683


8,539


(0.5)


8.2


     Provision for credit losses

450


475


410


540


650


(5.3)


(30.8)


     Noninterest income

4,541


3,638


3,905


3,788


4,085


24.8


11.2


     Noninterest expense

9,339


8,950


9,396


9,300


9,704


4.3


(3.8)


     Income before income taxes

3,995


3,506


3,109


2,631


2,270


13.9


76.0


     Income tax expense

1,535


1,343


1,200


1,004


861


14.3


78.3


     Net income

$       2,460


$      2,163


$      1,909


$      1,627


$      1,409


13.7


74.6
































     Return on average assets

0.88

%

0.76

%

0.68

%

0.60

%

0.53

%

12

bp

35

bp

     Return on average equity

6.64


5.93


5.23


4.56


4.03


71


261


     Return on average tangible equity (1)

7.34


6.58


5.81


5.08


4.50


76


284


     Net interest margin

3.50


3.45


3.43


3.43


3.43


5


7


     Efficiency ratio - GAAP

67.61


69.10


72.66


74.47


76.74


(149)


(913)


     Efficiency ratio - Non-GAAP (1)

67.37


68.84


72.39


74.20


76.48


(147)


(911)
































PER SHARE DATA















     Basic net income per common share

$         0.19


$        0.17


$        0.15


$        0.13


$        0.11


11.8

%

72.7

%

     Diluted net income per common share

0.19


0.17


0.15


0.13


0.11


11.8


72.7


     Dividends paid per common share

0.03


0.02


0.02


-


-


50.0


100.0


     Book value per common share at period end

11.88


11.64


11.55


11.35


11.31


2.1


5.0


     Tangible book value per common share at period end (1)

10.84


10.59


10.51


10.31


10.26


2.4


5.7


     Market value at period end

11.98


10.88


9.72


9.43


9.18


10.1


30.5


     Market range:















        High

12.08


11.00


9.72


9.55


9.30


9.8


29.9


        Low

11.95


10.64


9.37


9.43


9.03


12.3


32.3
































AVERAGE BALANCE SHEET DATA















     Loans

$   790,777


$  785,572


$  763,306


$  727,800


$  714,780


0.7

%

10.6

%

     Investment securities

214,988


213,307


230,222


241,684


244,300


0.8


(12.0)


     Earning assets

1,065,514


1,072,728


1,044,230


1,016,172


1,013,490


(0.7)


5.1


     Assets

1,130,238


1,137,430


1,111,361


1,085,857


1,087,401


(0.6)


3.9


     Deposits

968,991


978,049


953,826


931,637


932,460


(0.9)


3.9


     Stockholders' equity

149,032


146,597


144,897


143,266


141,884


1.7


5.0
































CREDIT QUALITY DATA AT PERIOD END















     Net charge-offs

$          457


$         257


$         229


$         421


$         547


77.8

%

(16.5)

%
















     Nonaccrual loans

$     11,925


$    12,093


$    13,143


$    14,009


$    12,913


(1.4)


(7.7)


     Loans 90 days past due and still accruing

35


7


4


35


36


400.0


(2.8)


     Other real estate owned

3,896


4,252


2,884


2,498


3,469


(8.4)


12.3


     Total nonperforming assets

$     15,856


$    16,352


$    16,031


$    16,542


$    16,418


(3.0)


(3.4)

















     Accruing troubled debt restructurings (TDRs)

$     14,753


$    15,495


$    16,431


$    18,353


$    16,644


(4.8)


(11.4)

















     Total nonperforming assets and accruing TDRs

$     30,609


$    31,847


$    32,462


$    34,895


$    33,062


(3.9)


(7.4)
































CAPITAL AND CREDIT QUALITY RATIOS















     Period-end equity to assets

13.27

%

12.95

%

13.05

%

13.22

%

13.05

%

32

bp

22

bp

     Period-end tangible equity to tangible assets (1)

12.25


11.93


12.02


12.16


11.98


32


27

















     Annualized net charge-offs to average loans

0.23


0.13


0.12


0.23


0.31


10


(8)

















     Allowance for credit losses as a percent of:















     Period-end loans     

1.04


1.05


1.04


1.07


1.08


(1)


(4)


     Nonaccrual loans

69.68


68.77


61.61


56.51


60.39


91


929


     Nonperforming assets

52.40


50.86


50.51


47.86


47.50


154


490


     Accruing TDRs

56.32


53.67


49.28


43.14


46.85


265


947


     Nonperforming assets and accruing TDRs

27.15


26.11


24.95


22.69


23.59


104


356

















    As a percent of total loans:















    Nonaccrual loans

1.49


1.52


1.69


1.89


1.79


(3)


(30)


    Accruing TDRs

1.85


1.95


2.11


2.48


2.31


(10)


(46)


    Nonaccrual loans and accruing TDRs

3.34


3.47


3.80


4.37


4.10


(13)


(76)

















    As a percent of total loans+other real estate owned:















    Nonperforming assets

1.98


2.05


2.06


2.22


2.26


(7)


(28)


    Nonperforming assets and accruing TDRs

3.81


3.98


4.16


4.69


4.56


(17)


(75)
































    As a percent of total assets:















    Nonaccrual loans

1.05


1.07


1.18


1.29


1.18


(2)


(13)


    Nonperforming assets

1.40


1.44


1.43


1.53


1.50


(4)


(10)


    Accruing TDRs

1.30


1.37


1.47


1.69


1.52


(7)


(22)


    Nonperforming assets and accruing TDRs

2.70


2.81


2.90


3.22


3.02


(11)


(32)

















(1)  See the reconciliation table on page 11 of 11.















 

Shore Bancshares, Inc.













Page 9 of 11

Consolidated Statements of Operations By Quarter














(In thousands, except per share data)
























































1Q 16


1Q 16













compared to


compared to



1Q 16


4Q 15


3Q 15


2Q 15


1Q 15


4Q 15


1Q 15


INTEREST INCOME















    Interest and fees on loans

$  8,961


$  9,142


$  8,912


$  8,581


$    8,491


(2.0)

%

5.5

%

    Interest and dividends on investment securities:















        Taxable

870


854


892


932


924


1.9


(5.8)


        Tax-exempt

2


2


2


3


3


-


(33.3)


    Interest on federal funds sold

3


1


1


-


1


200.0


200.0


    Interest on deposits with other banks

72


48


30


26


26


50.0


176.9


                   Total interest income

9,908


10,047


9,837


9,542


9,445


(1.4)


4.9

















INTEREST EXPENSE















    Interest on deposits

661


750


824


856


901


(11.9)


(26.6)


    Interest on short-term borrowings

4


4


3


3


5


-


(20.0)


                   Total interest expense

665


754


827


859


906


(11.8)


(26.6)

















NET INTEREST INCOME

9,243


9,293


9,010


8,683


8,539


(0.5)


8.2


Provision for credit losses

450


475


410


540


650


(5.3)


(30.8)

















NET INTEREST INCOME AFTER PROVISION















  FOR CREDIT LOSSES

8,793


8,818


8,600


8,143


7,889


(0.3)


11.5

















NONINTEREST INCOME















    Service charges on deposit accounts

813


806


769


658


634


0.9


28.2


    Trust and investment fee income

351


348


360


450


469


0.9


(25.2)


    Insurance agency commissions

2,759


1,760


2,107


1,932


2,475


56.8


11.5


    Other noninterest income

618


724


669


748


507


(14.6)


21.9


                      Total noninterest income

4,541


3,638


3,905


3,788


4,085


24.8


11.2

















NONINTEREST EXPENSE















    Salaries and wages

4,477


4,366


4,468


4,393


4,313


2.5


3.8


    Employee benefits

1,114


890


935


924


1,156


25.2


(3.6)


    Occupancy expense

613


583


600


611


626


5.1


(2.1)


    Furniture and equipment expense

235


215


223


233


255


9.3


(7.8)


    Data processing

809


809


800


868


783


-


3.3


    Directors' fees

104


114


117


116


123


(8.8)


(15.4)


    Amortization of intangible assets

33


33


34


33


33


-


-


    FDIC insurance premium expense

282


281


243


306


384


0.4


(26.6)


    Write-downs of other real estate owned

7


39


7


54


27


(82.1)


(74.1)


    Legal and professional fees

385


440


642


573


725


(12.5)


(46.9)


    Other noninterest expenses

1,280


1,180


1,327


1,189


1,279


8.5


0.1


                      Total noninterest expense

9,339


8,950


9,396


9,300


9,704


4.3


(3.8)

















Income before income taxes

3,995


3,506


3,109


2,631


2,270


13.9


76.0


Income tax expense

1,535


1,343


1,200


1,004


861


14.3


78.3

















NET INCOME

$  2,460


$  2,163


$  1,909


$  1,627


$    1,409


13.7


74.6

















Weighted average shares outstanding - basic

12,635


12,631


12,630


12,629


12,625


0.0


0.1


Weighted average shares outstanding - diluted

12,649


12,645


12,640


12,638


12,633


0.0


0.1

















Basic net income per common share

$    0.19


$    0.17


$    0.15


$    0.13


$      0.11


11.8


72.7


Diluted net income per common share

0.19


0.17


0.15


0.13


0.11


11.8


72.7


Dividends paid per common share

0.03


0.02


0.02


-


-


50.0


-

















 

Shore Bancshares, Inc.























Page 10 of 11

Consolidated Average Balance Sheets By Quarter
























(Dollars in thousands)
































































































Average balance























1Q 16


1Q 16























compared to


compared to



1Q 16


4Q 15


3Q 15


2Q 15


1Q 15


4Q 15


1Q 15



Average


Yield/


Average


Yield/


Average


Yield/


Average


Yield/


Average


Yield/







balance


rate


balance


rate


balance


rate


balance


rate


balance


rate






Earning assets

























  Loans

$    790,777


4.57

%

$    785,572


4.63

%

$    763,306


4.64

%

$    727,800


4.74

%

$    714,780


4.83

%

0.7

%

10.6

%

  Investment securities

























   Taxable

214,778


1.62


213,097


1.60


229,979


1.55


241,254


1.55


243,869


1.52


0.8


(11.9)


   Tax-exempt

210


5.30


210


5.30


243


5.01


430


4.21


431


4.19


-


(51.3)


  Federal funds sold

3,640


0.33


3,886


0.12


2,341


0.10


2,931


0.09


2,801


0.09


(6.3)


30.0


  Interest-bearing deposits

56,109


0.51


69,963


0.27


48,361


0.25


43,757


0.24


51,609


0.20


(19.8)


8.7


    Total earning assets

1,065,514


3.75

%

1,072,728


3.72

%

1,044,230


3.74

%

1,016,172


3.77

%

1,013,490


3.79

%

(0.7)


5.1


Cash and due from banks

16,205




16,628




17,434




18,723




21,268




(2.5)


(23.8)


Other assets

57,037




56,512




57,891




59,045




60,611




0.9


(5.9)


Allowance for credit losses

(8,518)




(8,438)




(8,194)




(8,083)




(7,968)




0.9


6.9


Total assets

$ 1,130,238




$ 1,137,430




$ 1,111,361




$ 1,085,857




$ 1,087,401




(0.6)


3.9




















































Interest-bearing liabilities

























  Demand deposits

$    193,087


0.12

%

$    190,237


0.13

%

$    184,471


0.13

%

$    171,274


0.12

%

$    177,071


0.13

%

1.5


9.0


  Money market and savings deposits

258,715


0.13


255,974


0.14


242,830


0.14


238,173


0.14


237,755


0.14


1.1


8.8


  Certificates of deposit $100,000 or more

132,412


0.71


139,663


0.80


148,617


0.92


152,478


0.97


156,154


1.00


(5.2)


(15.2)


  Other time deposits

153,774


0.74


158,011


0.80


163,224


0.82


166,277


0.85


169,584


0.90


(2.7)


(9.3)


    Interest-bearing deposits

737,988


0.36


743,885


0.40


739,142


0.44


728,202


0.47


740,564


0.49


(0.8)


(0.3)


  Short-term borrowings

6,242


0.24


6,199


0.23


6,501


0.24


4,872


0.23


7,340


0.27


0.7


(15.0)


    Total interest-bearing liabilities

744,230


0.36

%

750,084


0.40

%

745,643


0.44

%

733,074


0.47

%

747,904


0.49

%

(0.8)


(0.5)


Noninterest-bearing deposits

231,003




234,164




214,684




203,435




191,896




(1.3)


20.4


Accrued expenses and other liabilities

5,973




6,585




6,137




6,082




5,717




(9.3)


4.5


Stockholders' equity

149,032




146,597




144,897




143,266




141,884




1.7


5.0


Total liabilities and stockholders' equity

$ 1,130,238




$ 1,137,430




$ 1,111,361




$ 1,085,857




$ 1,087,401




(0.6)


3.9



























Net interest spread



3.39

%



3.32

%



3.30

%



3.30

%



3.30

%





Net interest margin



3.50

%



3.45

%



3.43

%



3.43

%



3.43

%






























Shore Bancshares, Inc.









Page 11 of 11

Reconciliation of Generally Accepted Accounting Principles (GAAP)











  and Non-GAAP Measures











(In thousands, except per share data)


































1Q 16


4Q 15


3Q 15


2Q 15


1Q 15













The following reconciles return on average equity and return on











  average tangible equity (Note 1):






















Net income

$       2,460


$       2,163


$       1,909


$       1,627


$       1,409


Net income - annualized (A)

$       9,894


$       8,581


$       7,574


$       6,526


$       5,714













Net income, excluding net amortization of intangible assets

$       2,480


$       2,183


$       1,930


$       1,647


$       1,429













Net income, excluding net amortization of intangible











  assets - annualized (B)

$       9,975


$       8,661


$       7,657


$       6,606


$       5,795













Average stockholders' equity (C)

$   149,032


$   146,597


$   144,897


$   143,266


$   141,884


Less:  Average goodwill and other intangible assets

(13,129)


(13,155)


(13,182)


(13,215)


(13,248)


Average tangible equity (D)

$   135,903


$   133,442


$   131,715


$   130,051


$   128,636













Return on average equity (GAAP)  (A)/(C)

6.64

%

5.85

%

5.23

%

4.56

%

4.03

%

Return on average tangible equity (Non-GAAP)  (B)/(D)

7.34

%

6.49

%

5.81

%

5.08

%

4.50

%























The following reconciles GAAP efficiency ratio and non-GAAP











  efficiency ratio (Note 2):






















Noninterest expense (E)

$       9,339


$       8,950


$       9,396


$       9,300


$       9,704


Less:  Amortization of intangible assets

(33)


(33)


(34)


(33)


(33)


Adjusted noninterest expense (F)

$       9,306


$       8,917


$       9,362


$       9,267


$       9,671













Taxable-equivalent net interest income (G)

$       9,273


$       9,315


$       9,027


$       8,701


$       8,560


Taxable-equivalent net interest income excluding nonrecurring adjustment (H)

$       9,273


$       9,315


$       9,027


$       8,701


$       8,560













Noninterest income (I)

$       4,541


$       3,638


$       3,905


$       3,788


$       4,085


Adjusted noninterest income (J)

$       4,541


$       3,638


$       3,905


$       3,788


$       4,085













Efficiency ratio (GAAP)  (E)/(G)+(I)

67.61

%

69.10

%

72.66

%

74.47

%

76.74

%

Efficiency ratio (Non-GAAP)  (F)/(H)+(J)

67.37

%

68.84

%

72.39

%

74.20

%

76.48

%























The following reconciles book value per common share and tangible











  book value per common share (Note 1):






















Stockholders' equity (K)

$   150,109


$   146,967


$   145,887


$   143,402


$   142,746


Less:  Goodwill and other intangible assets

(13,109)


(13,142)


(13,162)


(13,195)


(13,228)


Tangible equity (L)

$   137,000


$   133,825


$   132,725


$   130,207


$   129,518













Shares outstanding (M)

12,640


12,631


12,630


12,630


12,625













Book value per common share (GAAP)  (K)/(M)

$       11.88


$       11.64


$       11.55


$       11.35


$       11.31


Tangible book value per common share (Non-GAAP)  (L)/(M)

$       10.84


$       10.59


$       10.51


$       10.31


$       10.26
























The following reconciles equity to assets and











  tangible equity to tangible assets (Note 1):






















Stockholders' equity (N)

$   150,109


$   146,967


$   145,887


$   143,402


$   142,746


Less:  Goodwill and other intangible assets

(13,109)


(13,142)


(13,162)


(13,195)


(13,228)


Tangible equity (O)

$   137,000


$   133,825


$   132,725


$   130,207


$   129,518













Assets (P)

$ 1,131,175


$ 1,135,143


$ 1,117,813


$ 1,084,352


$ 1,094,128


Less:  Goodwill and other intangible assets

(13,109)


(13,142)


(13,162)


(13,195)


(13,228)


Tangible assets (Q)

$ 1,118,066


$ 1,122,001


$ 1,104,651


$ 1,071,157


$ 1,080,900













Period-end equity/assets (GAAP)  (N)/(P)

13.27

%

12.95

%

13.05

%

13.22

%

13.05

%

Period-end tangible equity/tangible assets (Non-GAAP)  (O)/(Q)

12.25

%

11.93

%

12.02

%

12.16

%

11.98

%























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. 













To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/shore-bancshares-reports-first-quarter-2016-financial-results-300255353.html

SOURCE Shore Bancshares, Inc.

Copyright CNW Group 2016