Attached files
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| 8-K - SHORE BANCSHARES INC | v229910_8k.htm |
Exhibit 99.1
Shore Bancshares, Inc.
18 E. Dover Street
Easton, Maryland 21601
Phone 410-763-7800
PRESS RELEASE
Shore Bancshares Reports Second Quarter and First-Half Results
Easton, Maryland (07/26/2011) - Shore Bancshares, Inc. (NASDAQ - SHBI) reported a net loss of $233 thousand or $(0.03) per diluted common share for the second quarter of 2011, compared to a net loss of $1.1 million or $(0.13) per diluted common share for the first quarter of 2011, and net income of $445 thousand or $0.05 per diluted common share for the second quarter of 2010. The Company reported a net loss of $1.3 million or $(0.16) per diluted common share for the first half of 2011, compared to a net loss of $1.1 million or $(0.13) per diluted common share for the first half of 2010.
When comparing the second quarter of 2011 to the first quarter of 2011, the primary reason for the lower net loss was a decrease in the provision for credit losses of $995 thousand and a decrease in noninterest expenses of $697 thousand. Similarly, when comparing the second quarter of 2011 to the second quarter of 2010, the main reason for the current quarter’s loss was a decline in net interest income of $749 thousand and an increase in the provision for credit losses of $478 thousand. When comparing the first half of 2011 to the first half of 2010, the principal factors driving the difference were a decline in net interest income of $1.3 million, partially offset by a decrease in the provision for credit losses of $749 thousand.
“There is considerable uncertainty about where the economy is headed, both nationally and here on the Delmarva peninsula within our markets. We operate in a micro-economy that revolves around the vitality of commercial and residential real estate sales, development, property values, and the trades associated with the real estate industry – all of which are drivers of our credit quality and loan growth,” said W. Moorhead Vermilye, chief executive officer. “While we are cautiously optimistic as a result of seeing some modest periodic examples of improvement among our best customers, the overall local economy remains pervasively soft.”
“Evidence of the resiliency of our company is that we were able to maintain the net interest margin at a level slightly ahead of the first quarter (3.80%) as we both lowered our cost of funds and grew average noninterest-bearing deposits (+5.5% year-over-year). Loan demand from higher quality borrowers generally remains weak and inconsistent, as many of our better customers are also riding out their own difficulties associated with this cycle, or are waiting on the sidelines for stronger signs of stability and economic improvement,” according to Vermilye.
The Company’s return on average assets for the second quarter of 2011 was (0.08)%, compared to (0.39)% and 0.16% for the quarters ended March 31, 2011 and June 30, 2010, respectively. The return on average stockholders’ equity was (0.77)% for the second quarter of 2011, compared to (3.59)% for the first quarter of 2011 and 1.42% for the second quarter of 2010.
The Company’s return on average assets for the first six months of 2011 was (0.24)%, compared to (0.20)% for the first six months of 2010. The return on average stockholders’ equity was (2.18)% for the first half of 2011, compared to (1.78)% for the first half of 2010.
Total assets were $1.124 billion at June 30, 2011, a $6.0 million, or less than 1%, decrease when compared to the $1.130 billion at the end of 2010. Total loans decreased 2.0% to $877.3 million and total deposits decreased slightly to $973.4 million, when compared to December 31, 2010. Total stockholders’ equity decreased 1.3% from the end of 2010. The Company’s year-to-date average equity to average assets was 10.80% and year-to-date average tangible equity to average tangible assets was 9.32%.
Page 2 of 11
Review of Quarterly Financial Results
Net interest income for the second quarter of 2011 was $9.9 million, a slight improvement from the first quarter of 2011 and a decrease of 7.0% from the same period last year. The increase in net interest income when compared to the first quarter of 2011 was primarily due to a decrease in the balances of and rates paid on interest-bearing liabilities offsetting the decline in the balances of and yields earned on average earning assets. The decrease in net interest income when compared to the second quarter of 2010 was primarily due to lower balances of and yields earned on average earning assets. The Company’s net interest margin was 3.80% for the second quarter of 2011, 3.79% for the first quarter of 2011 and 4.03% for the second quarter of 2010.
The provision for credit losses was $5.4 million for the three months ended June 30, 2011. The comparable amounts were $6.4 million and $4.9 million for the three months ended March 31, 2011 and June 30, 2010, respectively. The ratio of the allowance for credit losses to period-end loans was 1.86% at June 30, 2011, compared to 1.97% at March 31, 2011 and 1.47% at June 30, 2010. Management believes that the provision for credit losses and the resulting allowance were adequate at June 30, 2011.
The level of provision for credit losses was primarily in response to loan charge-offs which remain at historically high levels and overall economic conditions which have not improved. Net charge-offs were $6.5 million for the second quarter of 2011, $3.1 million for the first quarter of 2011 and $4.4 million for the second quarter of 2010. The ratio of quarter-to-date annualized net charge-offs to average loans was 2.96% for the second quarter of 2011, 1.44% for the first quarter of 2011 and 1.95% for the second quarter of 2010. In addition, nonperforming assets have increased when compared to the end of June 2010, although they have declined 3.9% since the end of the first quarter of 2011. The most improvement was in the decline of loans 90 days past due and still accruing which was partially offset by an increase in other real estate and other assets owned. The ratio of nonperforming assets to total assets was 7.08% at June 30, 2011. The comparable nonperforming assets to total assets ratio was 7.32% at March 31, 2011, and 4.28% at June 30, 2010.
Total noninterest income for the second quarter of 2011 remained relatively unchanged when compared to the first quarter of 2011 and decreased $187 thousand, or 4.1%, when compared to the second quarter of 2010. The decrease when compared to the first quarter of 2011 was primarily a result of a decrease in investment securities gains and insurance agency commissions which were mainly offset by increases in service charges on deposit accounts and trust and investment fee income. The decline in noninterest income during the second quarter of 2011 when compared to the second quarter of 2010 was primarily due to a decline in insurance agency commissions and service charges on deposit accounts.
Total noninterest expense for the second quarter of 2011 decreased $697 thousand, or 7.0%, when compared to the first quarter of 2011 mainly due to lower salaries, employee benefits and data processing expenses. Employee benefits declined primarily because the Company incurred costs relating to a new wellness program during the first quarter of 2011 and because forfeitures were used to reduce 401K costs during the second quarter of 2011. Data processing expenses decreased mainly because the Company incurred data processing charges relating to the merger of The Felton Bank into CNB during the first quarter of 2011. When compared to the second quarter of 2010, total noninterest expense for the second quarter of 2011 decreased $494 thousand, or 5.1%, primarily due to lower salaries, insurance agency commissions and expenses related to other real estate owned activities. These expenses were partially offset by higher employee benefits which increased because expenses accrued for profit sharing plans were reduced during the second quarter of 2010.
Review of Six-Month Financial Results
Net interest income for the first six months of 2011 was $19.8 million, a decrease of 6.1% when compared to the first six months of 2010. The decrease was primarily due to lower balances of and yields earned on average earning assets. The net interest margin decreased 20 basis points (bp) from 3.99% for the first half of 2010 to 3.79% for the first half of 2011.
The provisions for credit losses for the six months ended June 30, 2011 and 2010 were $11.8 million and $12.5 million, respectively. Net charge-offs were $9.7 million and $10.1 million for the six months ended
Page 3 of 11
June 30, 2011 and 2010, respectively. The ratio of year-to-date annualized net charge-offs to average loans was 2.20% for the first half of 2011 and 2.24% for the first half of 2010.
Total noninterest income for the six months ended June 30, 2011 declined $674 thousand when compared to the same period in 2010. As with the second quarter 2011 results, the decrease in noninterest income was mainly due to a decline in insurance agency commissions and service charges on deposit accounts.
Total noninterest expense for the six months ended June 30, 2011 decreased $924 thousand when compared to the same period in 2010. The primary reason for the decrease was lower expenses related to salaries, which included lower amounts for bonus and stock-based compensation expenses, insurance agency commissions and other real estate owned activities. These expenses were partially offset by higher data processing charges relating to the merger of The Felton Bank into CNB during the first quarter of 2011.
Shore Bancshares Information
Shore Bancshares, Inc. is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland’s Eastern Shore. It is the parent company of two banks, The Talbot Bank of Easton, Maryland, and CNB; three insurance producer firms, The Avon-Dixon Agency, LLC, Elliott Wilson Insurance, LLC and Jack Martin and Associates, Inc; a wholesale insurance company, TSGIA, Inc; two insurance premium finance companies, Mubell Finance, LLC and ESFS, Inc; and a registered investment adviser firm, Wye Financial Services, LLC. Shore Bancshares, Inc. engages in the mortgage broker business under the name “Wye Mortgage Group” through a minority series investment in an unrelated Delaware limited liability company. Additional information is available at www.shbi.com.
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but statements about management’s beliefs, plans and objectives. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled “Risk Factors”.
For further information contact: W. Moorhead Vermilye, Chief Executive Officer, 410-763-7800
Page 4 of 11
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Shore Bancshares, Inc.
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Financial Highlights
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(Dollars in thousands, except per share data)
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For the Three Months Ended
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For the Six Months Ended
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June 30,
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June 30,
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2011
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2010
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Change
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2011
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2010
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Change
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PROFITABILITY FOR THE PERIOD
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Net interest income
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$ | 9,942 | $ | 10,691 | (7.0 | ) % | $ | 19,804 | $ | 21,086 | (6.1 | ) % | ||||||||||||
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Provision for credit losses
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5,395 | 4,917 | 9.7 | 11,785 | 12,534 | (6.0 | ) | |||||||||||||||||
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Noninterest income
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4,381 | 4,568 | (4.1 | ) | 8,776 | 9,450 | (7.1 | ) | ||||||||||||||||
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Noninterest expense
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9,194 | 9,688 | (5.1 | ) | 19,085 | 20,009 | (4.6 | ) | ||||||||||||||||
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(Loss) income before income taxes
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(266 | ) | 654 | (140.7 | ) | (2,290 | ) | (2,007 | ) | (14.1 | ) | |||||||||||||
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Income tax (benefit) expense
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(33 | ) | 209 | (115.8 | ) | (974 | ) | (890 | ) | (9.4 | ) | |||||||||||||
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Net (loss) income
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$ | (233 | ) | $ | 445 | (152.4 | ) | $ | (1,316 | ) | $ | (1,117 | ) | (17.8 | ) | |||||||||
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Return on average assets
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(0.08 | ) % | 0.16 | % | (24 | ) bp | (0.24 | ) % | (0.20 | ) % | (4 | ) bp | ||||||||||||
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Return on average equity
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(0.77 | ) | 1.42 | (219 | ) | (2.18 | ) | (1.78 | ) | (40 | ) | |||||||||||||
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Return on average tangible equity (1)
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(0.60 | ) | 2.01 | (261 | ) | (2.26 | ) | (1.83 | ) | (43 | ) | |||||||||||||
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Net interest margin
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3.80 | 4.03 | (23 | ) | 3.79 | 3.99 | (20 | ) | ||||||||||||||||
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Efficiency ratio - GAAP
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64.19 | 63.49 | 70 | 66.78 | 65.53 | 125 | ||||||||||||||||||
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Efficiency ratio - Non-GAAP (1)
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63.31 | 62.64 | 67 | 66.07 | 64.68 | 139 | ||||||||||||||||||
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PER SHARE DATA
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Basic net (loss) income per common share
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$ | (0.03 | ) | $ | 0.05 | (160.0 | ) % | $ | (0.16 | ) | $ | (0.13 | ) | (23.1 | ) % | |||||||||
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Diluted net (loss) income per common share
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(0.03 | ) | 0.05 | (160.0 | ) | (0.16 | ) | (0.13 | ) | (23.1 | ) | |||||||||||||
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Dividends paid per common share
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0.01 | 0.06 | (83.3 | ) | 0.07 | 0.12 | (41.7 | ) | ||||||||||||||||
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Book value per common share at period end
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14.30 | 14.77 | (3.2 | ) | ||||||||||||||||||||
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Tangible book value per common share at period end (1)
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12.14 | 12.27 | (1.1 | ) | ||||||||||||||||||||
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Market value at period end
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6.98 | 11.91 | (41.4 | ) | ||||||||||||||||||||
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Market range:
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High
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10.21 | 14.80 | (31.0 | ) | 11.11 | 14.80 | (24.9 | ) | ||||||||||||||||
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Low
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6.51 | 11.75 | (44.6 | ) | 6.51 | 10.21 | (36.2 | ) | ||||||||||||||||
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PERIOD-END BALANCE SHEET DATA
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Loans
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$ | 877,331 | $ | 905,477 | (3.1 | ) % | ||||||||||||||||||
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Securities
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113,271 | 106,556 | 6.3 | |||||||||||||||||||||
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Assets
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1,124,191 | 1,129,196 | (0.4 | ) | ||||||||||||||||||||
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Deposits
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973,442 | 971,608 | 0.2 | |||||||||||||||||||||
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Stockholders' equity
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120,941 | 124,666 | (3.0 | ) | ||||||||||||||||||||
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AVERAGE BALANCE SHEET DATA
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Loans
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$ | 881,976 | $ | 909,295 | (3.0 | ) % | $ | 884,738 | $ | 909,831 | (2.8 | ) % | ||||||||||||
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Securities
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111,190 | 109,744 | 1.3 | 108,727 | 109,996 | (1.2 | ) | |||||||||||||||||
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Earning assets
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1,056,658 | 1,071,115 | (1.3 | ) | 1,059,396 | 1,073,257 | (1.3 | ) | ||||||||||||||||
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Assets
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1,125,213 | 1,134,662 | (0.8 | ) | 1,128,115 | 1,140,105 | (1.1 | ) | ||||||||||||||||
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Deposits
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976,840 | 976,749 | - | 979,531 | 979,491 | - | ||||||||||||||||||
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Stockholders' equity
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121,187 | 125,670 | (3.6 | ) | 121,823 | 126,869 | (4.0 | ) | ||||||||||||||||
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CAPITAL AND CREDIT QUALITY RATIOS
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Average equity to average assets
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10.77 | % | 11.08 | % | (31 | ) bp | 10.80 | % | 11.13 | % | (33 | ) bp | ||||||||||||
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Average tangible equity to average tangible assets (1)
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9.29 | 9.38 | (9 | ) | 9.32 | 9.44 | (12 | ) | ||||||||||||||||
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Annualized net charge-offs to average loans
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2.96 | 1.95 | 101 | 2.20 | 2.24 | (4 | ) | |||||||||||||||||
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Allowance for credit losses to period-end loans
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1.86 | 1.47 | 39 | |||||||||||||||||||||
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Allowance for credit losses to nonaccrual loans
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33.74 | 35.45 | (171 | ) | ||||||||||||||||||||
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Allowance for credit losses to nonperforming loans (2)
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22.80 | 28.34 | (554 | ) | ||||||||||||||||||||
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Nonaccrual loans to total loans
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5.53 | 4.14 | 139 | |||||||||||||||||||||
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Nonaccrual loans to total assets
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4.31 | 3.32 | 99 | |||||||||||||||||||||
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Nonperforming assets to total loans+other real estate and
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other assets owned (3)
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8.99 | 5.33 | 366 | |||||||||||||||||||||
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Nonperforming assets to total assets
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7.08 | 4.28 | 280 | |||||||||||||||||||||
(1) See the reconciliation table on page 11 of 11.
(2) Nonperforming loans include nonaccrual, 90 days past due and still accruing and troubled debt restructurings.
(3) Nonperforming assets include nonperforming loans and other real estate and other assets owned.
Page 5 of 11
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Shore Bancshares, Inc.
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Consolidated Balance Sheets
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(In thousands, except per share data)
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June 30, 2011
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June 30, 2011
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June 30,
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December 31,
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June 30,
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compared to
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compared to
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2011
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2010
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2010
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December 31, 2010
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June 30, 2010
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ASSETS
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Cash and due from banks
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$ | 21,234 | $ | 19,680 | $ | 16,645 | 7.9 | % | 27.6 | % | ||||||||||
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Interest-bearing deposits with other banks
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45,598 | 21,593 | 15,652 | 111.2 | 191.3 | |||||||||||||||
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Federal funds sold
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13,881 | 36,691 | 32,372 | (62.2 | ) | (57.1 | ) | |||||||||||||
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Investments available for sale (at fair value)
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106,742 | 99,055 | 98,211 | 7.8 | 8.7 | |||||||||||||||
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Investments held to maturity
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6,529 | 6,727 | 8,345 | (2.9 | ) | (21.8 | ) | |||||||||||||
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Loans
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877,331 | 895,404 | 905,477 | (2.0 | ) | (3.1 | ) | |||||||||||||
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Less: allowance for credit losses
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(16,358 | ) | (14,227 | ) | (13,289 | ) | 15.0 | 23.1 | ||||||||||||
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Loans, net
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860,973 | 881,177 | 892,188 | (2.3 | ) | (3.5 | ) | |||||||||||||
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Premises and equipment, net
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14,377 | 14,483 | 14,924 | (0.7 | ) | (3.7 | ) | |||||||||||||
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Goodwill
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13,678 | 13,678 | 15,954 | - | (14.3 | ) | ||||||||||||||
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Other intangible assets, net
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4,583 | 4,840 | 5,148 | (5.3 | ) | (11.0 | ) | |||||||||||||
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Other real estate and other assets owned, net
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7,877 | 3,702 | 1,428 | 112.8 | 451.6 | |||||||||||||||
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Other assets
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28,719 | 28,685 | 28,329 | 0.1 | 1.4 | |||||||||||||||
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Total assets
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$ | 1,124,191 | $ | 1,130,311 | $ | 1,129,196 | (0.5 | ) | (0.4 | ) | ||||||||||
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LIABILITIES
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Noninterest-bearing deposits
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$ | 130,789 | $ | 124,188 | $ | 121,410 | 5.3 | 7.7 | ||||||||||||
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Interest-bearing deposits
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842,653 | 855,328 | 850,198 | (1.5 | ) | (0.9 | ) | |||||||||||||
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Total deposits
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973,442 | 979,516 | 971,608 | (0.6 | ) | 0.2 | ||||||||||||||
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Short-term borrowings
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18,251 | 16,041 | 17,864 | 13.8 | 2.2 | |||||||||||||||
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Accrued expenses and other liabilities
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10,625 | 11,309 | 13,629 | (6.0 | ) | (22.0 | ) | |||||||||||||
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Long-term debt
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932 | 932 | 1,429 | - | (34.8 | ) | ||||||||||||||
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Total liabilities
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1,003,250 | 1,007,798 | 1,004,530 | (0.5 | ) | (0.1 | ) | |||||||||||||
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STOCKHOLDERS' EQUITY
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Common stock, par value $0.01; authorized
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35,000,000 shares
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85 | 84 | 84 | 1.2 | 1.2 | |||||||||||||||
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Warrant
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1,543 | 1,543 | 1,543 | - | - | |||||||||||||||
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Additional paid in capital
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30,334 | 30,242 | 30,081 | 0.3 | 0.8 | |||||||||||||||
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Retained earnings
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90,551 | 92,458 | 94,021 | (2.1 | ) | (3.7 | ) | |||||||||||||
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Accumulated other comprehensive loss
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(1,572 | ) | (1,814 | ) | (1,063 | ) | 13.3 | (47.9 | ) | |||||||||||
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Total stockholders' equity
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120,941 | 122,513 | 124,666 | (1.3 | ) | (3.0 | ) | |||||||||||||
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Total liabilities and stockholders'
equity
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$ | 1,124,191 | $ | 1,130,311 | $ | 1,129,196 | (0.5 | ) | (0.4 | ) | ||||||||||
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Period-end common shares outstanding
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8,457 | 8,443 | 8,443 | 0.2 | 0.2 | |||||||||||||||
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Book value per common share
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$ | 14.30 | $ | 14.51 | $ | 14.77 | (1.4 | ) | (3.2 | ) | ||||||||||
Page 6 of 11
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Shore Bancshares, Inc.
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Consolidated Statements of Income
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(In thousands, except per share data)
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For the Three Months Ended
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For the Six Months Ended
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June 30,
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June 30,
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2011
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2010
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% Change
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2011
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2010
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% Change
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INTEREST INCOME
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Interest and fees on loans
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$ | 11,896 | $ | 13,047 | (8.8 | ) % | $ | 23,897 | $ | 25,921 | (7.8 | )% | ||||||||||||
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Interest and dividends on investment securities:
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Taxable
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782 | 846 | (7.6 | ) | 1,439 | 1,728 | (16.7 | ) | ||||||||||||||||
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Tax-exempt
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40 | 56 | (28.6 | ) | 78 | 115 | (32.2 | ) | ||||||||||||||||
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Interest on federal funds sold
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5 | 14 | (64.3 | ) | 21 | 26 | (19.2 | ) | ||||||||||||||||
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Interest on deposits with other banks
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12 | 4 | 200.0 | 18 | 5 | 260.0 | ||||||||||||||||||
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Total interest income
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12,735 | 13,967 | (8.8 | ) | 25,453 | 27,795 | (8.4 | ) | ||||||||||||||||
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INTEREST EXPENSE
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Interest on deposits
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2,769 | 3,242 | (14.6 | ) | 5,602 | 6,627 | (15.5 | ) | ||||||||||||||||
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Interest on short-term borrowings
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13 | 19 | (31.6 | ) | 26 | 51 | (49.0 | ) | ||||||||||||||||
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Interest on long-term debt
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11 | 15 | (26.7 | ) | 21 | 31 | (32.3 | ) | ||||||||||||||||
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Total interest expense
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2,793 | 3,276 | (14.7 | ) | 5,649 | 6,709 | (15.8 | ) | ||||||||||||||||
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NET INTEREST INCOME
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9,942 | 10,691 | (7.0 | ) | 19,804 | 21,086 | (6.1 | ) | ||||||||||||||||
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Provision for credit losses
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5,395 | 4,917 | 9.7 | 11,785 | 12,534 | (6.0 | ) | |||||||||||||||||
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NET INTEREST INCOME AFTER PROVISION
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FOR CREDIT LOSSES
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4,547 | 5,774 | (21.3 | ) | 8,019 | 8,552 | (6.2 | ) | ||||||||||||||||
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NONINTEREST INCOME
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Service charges on deposit accounts
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744 | 831 | (10.5 | ) | 1,448 | 1,617 | (10.5 | ) | ||||||||||||||||
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Trust and investment fee income
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418 | 372 | 12.4 | 794 | 788 | 0.8 | ||||||||||||||||||
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Investment securities gains
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2 | - | - | 81 | - | - | ||||||||||||||||||
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Insurance agency commissions
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2,475 | 2,595 | (4.6 | ) | 4,985 | 5,484 | (9.1 | ) | ||||||||||||||||
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Other noninterest income
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742 | 770 | (3.6 | ) | 1,468 | 1,561 | (6.0 | ) | ||||||||||||||||
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Total noninterest income
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4,381 | 4,568 | (4.1 | ) | 8,776 | 9,450 | (7.1 | ) | ||||||||||||||||
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NONINTEREST EXPENSE
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Salaries and wages
|
4,104 | 4,363 | (5.9 | ) | 8,350 | 8,853 | (5.7 | ) | ||||||||||||||||
|
Employee benefits
|
886 | 758 | 16.9 | 2,039 | 2,039 | - | ||||||||||||||||||
|
Occupancy expense
|
568 | 597 | (4.9 | ) | 1,164 | 1,219 | (4.5 | ) | ||||||||||||||||
|
Furniture and equipment expense
|
291 | 313 | (7.0 | ) | 563 | 613 | (8.2 | ) | ||||||||||||||||
|
Data processing
|
680 | 660 | 3.0 | 1,531 | 1,291 | 18.6 | ||||||||||||||||||
|
Directors' fees
|
112 | 105 | 6.7 | 219 | 226 | (3.1 | ) | |||||||||||||||||
|
Amortization of intangible assets
|
128 | 129 | (0.8 | ) | 257 | 258 | (0.4 | ) | ||||||||||||||||
|
Insurance agency commissions expense
|
357 | 464 | (23.1 | ) | 732 | 892 | (17.9 | ) | ||||||||||||||||
|
FDIC insurance premium expense
|
404 | 460 | (12.2 | ) | 864 | 941 | (8.2 | ) | ||||||||||||||||
|
Other noninterest expenses
|
1,664 | 1,839 | (9.5 | ) | 3,366 | 3,677 | (8.5 | ) | ||||||||||||||||
|
Total noninterest expense
|
9,194 | 9,688 | (5.1 | ) | 19,085 | 20,009 | (4.6 | ) | ||||||||||||||||
|
(Loss) income before income taxes
|
(266 | ) | 654 | (140.7 | ) | (2,290 | ) | (2,007 | ) | (14.1 | ) | |||||||||||||
|
Income tax (benefit) expense
|
(33 | ) | 209 | (115.8 | ) | (974 | ) | (890 | ) | (9.4 | ) | |||||||||||||
|
NET (LOSS) INCOME
|
$ | (233 | ) | $ | 445 | (152.4 | ) | $ | (1,316 | ) | $ | (1,117 | ) | (17.8 | ) | |||||||||
|
Weighted average shares outstanding - basic
|
8,446 | 8,443 | - | 8,445 | 8,440 | 0.1 | ||||||||||||||||||
|
Weighted average shares outstanding - diluted
|
8,446 | 8,443 | - | 8,445 | 8,440 | 0.1 | ||||||||||||||||||
|
Basic net (loss) income per common share
|
$ | (0.03 | ) | $ | 0.05 | (160.0 | ) | $ | (0.16 | ) | $ | (0.13 | ) | (23.1 | ) | |||||||||
|
Diluted net (loss) income per common share
|
(0.03 | ) | 0.05 | (160.0 | ) | (0.16 | ) | (0.13 | ) | (23.1 | ) | |||||||||||||
|
Dividends paid per common share
|
0.01 | 0.06 | (83.3 | ) | 0.07 | 0.12 | (41.7 | ) | ||||||||||||||||
Page 7 of 11
|
Shore Bancshares, Inc.
|
|
Consolidated Average Balance Sheets
|
|
(Dollars in thousands)
|
|
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||||||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||||||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||||||||||
|
Average
|
Yield/
|
Average
|
Yield/
|
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||||||
|
balance
|
rate
|
balance
|
rate
|
balance
|
rate
|
balance
|
rate
|
|||||||||||||||||||||||||
|
Earning assets
|
||||||||||||||||||||||||||||||||
|
Loans
|
$ | 881,976 | 5.43 | % | $ | 909,295 | 5.77 | % | $ | 884,738 | 5.46 | % | $ | 909,831 | 5.76 | % | ||||||||||||||||
|
Investment securities
|
||||||||||||||||||||||||||||||||
|
Taxable
|
106,609 | 2.94 | 103,284 | 3.29 | 104,131 | 2.79 | 103,385 | 3.37 | ||||||||||||||||||||||||
|
Tax-exempt
|
4,581 | 5.27 | 6,460 | 5.30 | 4,596 | 5.18 | 6,611 | 5.35 | ||||||||||||||||||||||||
|
Federal funds sold
|
24,310 | 0.09 | 38,001 | 0.15 | 35,499 | 0.12 | 42,253 | 0.13 | ||||||||||||||||||||||||
|
Interest-bearing deposits
|
39,182 | 0.12 | 14,075 | 0.12 | 30,432 | 0.12 | 11,177 | 0.10 | ||||||||||||||||||||||||
|
Total earning assets
|
1,056,658 | 4.86 | % | 1,071,115 | 5.26 | % | 1,059,396 | 4.87 | % | 1,073,257 | 5.25 | % | ||||||||||||||||||||
|
Cash and due from banks
|
18,327 | 9,997 | 18,819 | 12,197 | ||||||||||||||||||||||||||||
|
Other assets
|
68,190 | 67,860 | 66,711 | 67,889 | ||||||||||||||||||||||||||||
|
Allowance for credit losses
|
(17,962 | ) | (14,310 | ) | (16,811 | ) | (13,238 | ) | ||||||||||||||||||||||||
|
Total assets
|
$ | 1,125,213 | $ | 1,134,662 | $ | 1,128,115 | $ | 1,140,105 | ||||||||||||||||||||||||
|
Interest-bearing liabilities
|
||||||||||||||||||||||||||||||||
|
Demand deposits
|
$ | 137,775 | 0.22 | % | $ | 132,563 | 0.25 | % | $ | 134,719 | 0.22 | % | $ | 130,287 | 0.25 | % | ||||||||||||||||
|
Money market and savings deposits
|
261,869 | 0.97 | 259,273 | 0.72 | 261,358 | 0.95 | 258,180 | 0.70 | ||||||||||||||||||||||||
|
Certificates of deposit $100,000 or more
|
244,805 | 1.67 | 251,340 | 2.09 | 251,953 | 1.69 | 255,416 | 2.17 | ||||||||||||||||||||||||
|
Other time deposits
|
206,310 | 2.02 | 215,987 | 2.56 | 207,300 | 2.06 | 217,849 | 2.62 | ||||||||||||||||||||||||
|
Interest-bearing deposits
|
850,759 | 1.31 | 859,163 | 1.51 | 855,330 | 1.32 | 861,732 | 1.55 | ||||||||||||||||||||||||
|
Short-term borrowings
|
15,020 | 0.36 | 15,771 | 0.48 | 14,595 | 0.36 | 16,896 | 0.60 | ||||||||||||||||||||||||
|
Long-term debt
|
932 | 4.51 | 1,429 | 4.40 | 932 | 4.53 | 1,429 | 4.43 | ||||||||||||||||||||||||
|
Total interest-bearing liabilities
|
866,711 | 1.29 | % | 876,363 | 1.50 | % | 870,857 | 1.31 | % | 880,057 | 1.54 | % | ||||||||||||||||||||
|
Noninterest-bearing deposits
|
126,081 | 117,586 | 124,201 | 117,759 | ||||||||||||||||||||||||||||
|
Accrued expenses and other liabilities
|
11,234 | 15,043 | 11,234 | 15,420 | ||||||||||||||||||||||||||||
|
Stockholders' equity
|
121,187 | 125,670 | 121,823 | 126,869 | ||||||||||||||||||||||||||||
|
Total liabilities and stockholders' equity
|
$ | 1,125,213 | $ | 1,134,662 | $ | 1,128,115 | $ | 1,140,105 | ||||||||||||||||||||||||
|
Net interest spread
|
3.57 |
%
|
|
3.76 | % | 3.56 |
%
|
|
3.71 | % | ||||||||||||||||||||||
|
Net interest margin
|
3.80 |
%
|
|
4.03 | % | 3.79 |
%
|
|
3.99 | % | ||||||||||||||||||||||
Page 8 of 11
|
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 11 | 2Q 11 | ||||||||||||||||||||||
|
2011
|
2011
|
2010
|
2010
|
2010
|
compared to
|
compared to
|
||||||||||||||||||||||
| (2Q 11) | (1Q 11) | (4Q 10) | (3Q 10) | (2Q 10) | 1Q 11 | 2Q 10 | ||||||||||||||||||||||
|
PROFITABILITY FOR THE PERIOD
|
||||||||||||||||||||||||||||
|
Net interest income
|
$ | 9,942 | $ | 9,862 | $ | 10,866 | $ | 10,687 | $ | 10,691 | 0.8 | % | (7.0 | ) % | ||||||||||||||
|
Provision for credit losses
|
5,395 | 6,390 | 4,392 | 4,193 | 4,917 | (15.6 | ) | 9.7 | ||||||||||||||||||||
|
Noninterest income
|
4,381 | 4,395 | 3,948 | 4,643 | 4,568 | (0.3 | ) | (4.1 | ) | |||||||||||||||||||
|
Noninterest expense
|
9,194 | 9,891 | 9,082 | 12,629 | 9,688 | (7.0 | ) | (5.1 | ) | |||||||||||||||||||
|
(Loss) income before income taxes
|
(266 | ) | (2,024 | ) | 1,340 | (1,492 | ) | 654 | 86.9 | (140.7 | ) | |||||||||||||||||
|
Income tax (benefit) expense
|
(33 | ) | (941 | ) | 490 | (92 | ) | 209 | 96.5 | (115.8 | ) | |||||||||||||||||
|
Net (loss) income
|
$ | (233 | ) | $ | (1,083 | ) | $ | 850 | $ | (1,400 | ) | $ | 445 | 78.5 | (152.4 | ) | ||||||||||||
|
Return on average assets
|
(0.08 | ) % | (0.39 | ) % | 0.30 | % | (0.49 | ) % | 0.16 | % | 31 | bp | (24 | ) bp | ||||||||||||||
|
Return on average equity
|
(0.77 | ) | (3.59 | ) | 2.73 | (4.43 | ) | 1.42 | 282 | (219 | ) | |||||||||||||||||
|
Return on average tangible equity (1)
|
(0.60 | ) | (3.92 | ) | 3.49 | (1.56 | ) | 2.01 | 332 | (261 | ) | |||||||||||||||||
|
Net interest margin
|
3.80 | 3.79 | 4.09 | 4.00 | 4.03 | 1 | (23 | ) | ||||||||||||||||||||
|
Efficiency ratio - GAAP
|
64.19 | 69.38 | 61.31 | 82.38 | 63.49 | (519 | ) | 70 | ||||||||||||||||||||
|
Efficiency ratio - Non-GAAP (1)
|
63.31 | 68.85 | 60.44 | 62.56 | 62.64 | (554 | ) | 67 | ||||||||||||||||||||
|
PER SHARE DATA
|
||||||||||||||||||||||||||||
|
Basic net (loss) income per common share
|
$ | (0.03 | ) | $ | (0.13 | ) | $ | 0.10 | $ | (0.17 | ) | $ | 0.05 | 76.9 | % | (160.0 | ) % | |||||||||||
|
Diluted net (loss) income per common share
|
(0.03 | ) | (0.13 | ) | 0.10 | (0.17 | ) | 0.05 | 76.9 | (160.0 | ) | |||||||||||||||||
|
Dividends paid per common share
|
0.01 | 0.06 | 0.06 | 0.06 | 0.06 | (83.3 | ) | (83.3 | ) | |||||||||||||||||||
|
Book value per common share at period end
|
14.30 | 14.32 | 14.51 | 14.49 | 14.77 | (0.1 | ) | (3.2 | ) | |||||||||||||||||||
|
Tangible book value per common share at period end (1)
|
12.14 | 12.14 | 12.32 | 12.37 | 12.27 | - | (1.1 | ) | ||||||||||||||||||||
|
Market value at period end
|
6.98 | 9.75 | 10.54 | 9.48 | 11.91 | (28.4 | ) | (41.4 | ) | |||||||||||||||||||
|
Market range:
|
||||||||||||||||||||||||||||
|
High
|
10.21 | 11.11 | 10.73 | 12.10 | 14.80 | (8.1 | ) | (31.0 | ) | |||||||||||||||||||
|
Low
|
6.51 | 9.42 | 9.25 | 9.20 | 11.75 | (30.9 | ) | (44.6 | ) | |||||||||||||||||||
|
PERIOD-END BALANCE SHEET DATA
|
||||||||||||||||||||||||||||
|
Loans
|
$ | 877,331 | $ | 884,715 | $ | 895,404 | $ | 906,490 | $ | 905,477 | (0.8 | ) % | (3.1 | ) % | ||||||||||||||
|
Securities
|
113,271 | 106,920 | 105,782 | 104,075 | 106,556 | 5.9 | 6.3 | |||||||||||||||||||||
|
Assets
|
1,124,191 | 1,131,334 | 1,130,311 | 1,134,503 | 1,129,196 | (0.6 | ) | (0.4 | ) | |||||||||||||||||||
|
Deposits
|
973,442 | 986,486 | 979,516 | 982,428 | 971,608 | (1.3 | ) | 0.2 | ||||||||||||||||||||
|
Stockholders' equity
|
120,941 | 120,926 | 122,513 | 122,355 | 124,666 | - | (3.0 | ) | ||||||||||||||||||||
|
AVERAGE BALANCE SHEET DATA
|
||||||||||||||||||||||||||||
|
Loans
|
$ | 881,976 | $ | 887,531 | $ | 903,075 | $ | 904,293 | $ | 909,295 | (0.6 | ) % | (3.0 | ) % | ||||||||||||||
|
Securities
|
111,190 | 106,235 | 103,600 | 105,466 | 109,744 | 4.7 | 1.3 | |||||||||||||||||||||
|
Earning assets
|
1,056,658 | 1,062,164 | 1,060,645 | 1,066,063 | 1,071,115 | (0.5 | ) | (1.3 | ) | |||||||||||||||||||
|
Assets
|
1,125,213 | 1,131,259 | 1,128,517 | 1,139,043 | 1,134,662 | (0.5 | ) | (0.8 | ) | |||||||||||||||||||
|
Deposits
|
976,840 | 982,249 | 978,444 | 984,018 | 976,749 | (0.6 | ) | - | ||||||||||||||||||||
|
Stockholders' equity
|
121,187 | 122,466 | 123,341 | 125,308 | 125,670 | (1.0 | ) | (3.6 | ) | |||||||||||||||||||
|
CAPITAL AND CREDIT QUALITY RATIOS
|
||||||||||||||||||||||||||||
|
Average equity to average assets
|
10.77 | % | 10.83 | % | 10.93 | % | 11.00 | % | 11.08 | % | (6 | ) bp | (31 | ) bp | ||||||||||||||
|
Average tangible equity to average tangible assets (1)
|
9.29 | 9.35 | 9.50 | 9.33 | 9.38 | (6 | ) | (9 | ) | |||||||||||||||||||
|
Annualized net charge-offs to average loans
|
2.96 | 1.44 | 1.46 | 1.90 | 1.95 | 152 | 101 | |||||||||||||||||||||
|
Allowance for credit losses to period-end loans
|
1.86 | 1.97 | 1.59 | 1.45 | 1.47 | (11 | ) | 39 | ||||||||||||||||||||
|
Allowance for credit losses to nonaccrual loans
|
33.74 | 35.83 | 39.26 | 35.76 | 35.45 | (209 | ) | (171 | ) | |||||||||||||||||||
|
Allowance for credit losses to nonperforming loans (2)
|
22.80 | 22.40 | 22.82 | 28.76 | 28.34 | 40 | (554 | ) | ||||||||||||||||||||
|
Nonaccrual loans to total loans
|
5.53 | 5.51 | 4.05 | 4.06 | 4.14 | 2 | 139 | |||||||||||||||||||||
|
Nonaccrual loans to total assets
|
4.31 | 4.31 | 3.21 | 3.24 | 3.32 | - | 99 | |||||||||||||||||||||
|
Nonperforming assets to total loans+other real estate and
|
||||||||||||||||||||||||||||
|
other assets owned (3)
|
8.99 | 9.31 | 7.34 | 5.20 | 5.33 | (32 | ) | 366 | ||||||||||||||||||||
|
Nonperforming assets to total assets
|
7.08 | 7.32 | 5.84 | 4.16 | 4.28 | (24 | ) | 280 | ||||||||||||||||||||
(1) See the reconciliation table on page 11 of 11.
(2) Nonperforming loans include nonaccrual, 90 days past due and still accruing and troubled debt restructurings.
(3) Nonperforming assets include nonperforming loans and other real estate and other assets owned.
Page 9 of 11
|
Shore Bancshares, Inc.
|
|
Consolidated Statements of Income By Quarter
|
|
(In thousands, except per share data)
|
| 2Q 11 | 2Q 11 | |||||||||||||||||||||||||||
|
compared to
|
compared to
|
|||||||||||||||||||||||||||
| 2Q 11 | 1Q 11 | 4Q 10 | 3Q 10 | 2Q 10 | 1Q 11 | 2Q 10 | ||||||||||||||||||||||
|
INTEREST INCOME
|
||||||||||||||||||||||||||||
|
Interest and fees on loans
|
$ | 11,896 | $ | 12,001 | $ | 12,958 | $ | 13,083 | $ | 13,047 | (0.9 | ) % | (8.8 | ) % | ||||||||||||||
|
Interest and dividends on investment securities:
|
||||||||||||||||||||||||||||
|
Taxable
|
782 | 657 | 804 | 677 | 846 | 19.0 | (7.6 | ) | ||||||||||||||||||||
|
Tax-exempt
|
40 | 38 | 47 | 50 | 56 | 5.3 | (28.6 | ) | ||||||||||||||||||||
|
Interest on federal funds sold
|
5 | 16 | 13 | 21 | 14 | (68.8 | ) | (64.3 | ) | |||||||||||||||||||
|
Interest on deposits with other banks
|
12 | 6 | 7 | 6 | 4 | 100.0 | 200.0 | |||||||||||||||||||||
|
Total interest income
|
12,735 | 12,718 | 13,829 | 13,837 | 13,967 | 0.1 | (8.8 | ) | ||||||||||||||||||||
|
INTEREST EXPENSE
|
||||||||||||||||||||||||||||
|
Interest on deposits
|
2,769 | 2,833 | 2,937 | 3,117 | 3,242 | (2.3 | ) | (14.6 | ) | |||||||||||||||||||
|
Interest on short-term borrowings
|
13 | 13 | 15 | 17 | 19 | - | (31.6 | ) | ||||||||||||||||||||
|
Interest on long-term debt
|
11 | 10 | 11 | 16 | 15 | 10.0 | (26.7 | ) | ||||||||||||||||||||
|
Total interest expense
|
2,793 | 2,856 | 2,963 | 3,150 | 3,276 | (2.2 | ) | (14.7 | ) | |||||||||||||||||||
|
NET INTEREST INCOME
|
9,942 | 9,862 | 10,866 | 10,687 | 10,691 | 0.8 | (7.0 | ) | ||||||||||||||||||||
|
Provision for credit losses
|
5,395 | 6,390 | 4,392 | 4,193 | 4,917 | (15.6 | ) | 9.7 | ||||||||||||||||||||
|
NET INTEREST INCOME AFTER PROVISION
|
||||||||||||||||||||||||||||
|
FOR CREDIT LOSSES
|
4,547 | 3,472 | 6,474 | 6,494 | 5,774 | 31.0 | (21.3 | ) | ||||||||||||||||||||
|
NONINTEREST INCOME
|
||||||||||||||||||||||||||||
|
Service charges on deposit accounts
|
744 | 704 | 799 | 841 | 831 | 5.7 | (10.5 | ) | ||||||||||||||||||||
|
Trust and investment fee income
|
418 | 376 | 358 | 357 | 372 | 11.2 | 12.4 | |||||||||||||||||||||
|
Investment securities gains
|
2 | 79 | - | - | - | (97.5 | ) | - | ||||||||||||||||||||
|
Insurance agency commissions
|
2,475 | 2,510 | 2,116 | 2,513 | 2,595 | (1.4 | ) | (4.6 | ) | |||||||||||||||||||
|
Other noninterest income
|
742 | 726 | 675 | 932 | 770 | 2.2 | (3.6 | ) | ||||||||||||||||||||
|
Total noninterest income
|
4,381 | 4,395 | 3,948 | 4,643 | 4,568 | (0.3 | ) | (4.1 | ) | |||||||||||||||||||
|
NONINTEREST EXPENSE
|
||||||||||||||||||||||||||||
|
Salaries and wages
|
4,104 | 4,246 | 4,220 | 4,404 | 4,363 | (3.3 | ) | (5.9 | ) | |||||||||||||||||||
|
Employee benefits
|
886 | 1,153 | 893 | 897 | 758 | (23.2 | ) | 16.9 | ||||||||||||||||||||
|
Occupancy expense
|
568 | 596 | 562 | 547 | 597 | (4.7 | ) | (4.9 | ) | |||||||||||||||||||
|
Furniture and equipment expense
|
291 | 272 | 262 | 325 | 313 | 7.0 | (7.0 | ) | ||||||||||||||||||||
|
Data processing
|
680 | 851 | 620 | 696 | 660 | (20.1 | ) | 3.0 | ||||||||||||||||||||
|
Directors' fees
|
112 | 107 | 68 | 118 | 105 | 4.7 | 6.7 | |||||||||||||||||||||
|
Goodwill and other intangible assets impairment
|
- | - | - | 3,051 | - | - | - | |||||||||||||||||||||
|
Amortization of intangible assets
|
128 | 129 | 129 | 128 | 129 | (0.8 | ) | (0.8 | ) | |||||||||||||||||||
|
Insurance agency commissions expense
|
357 | 375 | 339 | 338 | 464 | (4.8 | ) | (23.1 | ) | |||||||||||||||||||
|
FDIC insurance premium expense
|
404 | 460 | 445 | 448 | 460 | (12.2 | ) | (12.2 | ) | |||||||||||||||||||
|
Other noninterest expenses
|
1,664 | 1,702 | 1,544 | 1,677 | 1,839 | (2.2 | ) | (9.5 | ) | |||||||||||||||||||
|
Total noninterest expense
|
9,194 | 9,891 | 9,082 | 12,629 | 9,688 | (7.0 | ) | (5.1 | ) | |||||||||||||||||||
|
(Loss) income before income taxes
|
(266 | ) | (2,024 | ) | 1,340 | (1,492 | ) | 654 | 86.9 | (140.7 | ) | |||||||||||||||||
|
Income tax (benefit) expense
|
(33 | ) | (941 | ) | 490 | (92 | ) | 209 | 96.5 | (115.8 | ) | |||||||||||||||||
|
NET (LOSS) INCOME
|
$ | (233 | ) | $ | (1,083 | ) | $ | 850 | $ | (1,400 | ) | $ | 445 | 78.5 | (152.4 | ) | ||||||||||||
|
Weighted average shares outstanding - basic
|
8,446 | 8,443 | 8,443 | 8,443 | 8,443 | - | - | |||||||||||||||||||||
|
Weighted average shares outstanding - diluted
|
8,446 | 8,443 | 8,443 | 8,443 | 8,443 | - | - | |||||||||||||||||||||
|
Basic net (loss) income per common share
|
$ | (0.03 | ) | $ | (0.13 | ) | $ | 0.10 | $ | (0.17 | ) | $ | 0.05 | 76.9 | (160.0 | ) | ||||||||||||
|
Diluted net (loss) income per common share
|
(0.03 | ) | (0.13 | ) | 0.10 | (0.17 | ) | 0.05 | 76.9 | (160.0 | ) | |||||||||||||||||
|
Dividends paid per common share
|
0.01 | 0.06 | 0.06 | 0.06 | 0.06 | (83.3 | ) | (83.3 | ) | |||||||||||||||||||
Page 10 of 11
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Shore Bancshares, Inc.
|
|
Consolidated Average Balance Sheets By Quarter
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(Dollars in thousands)
|
|
Average balance
|
||||||||||||||||||||||||||||||||||||||||||||||||
| 2Q 11 | 2Q 11 | |||||||||||||||||||||||||||||||||||||||||||||||
|
compared to
|
compared to
|
|||||||||||||||||||||||||||||||||||||||||||||||
| 2Q 11 | 1Q 11 | 4Q 10 | 3Q 10 | 2Q 10 | 1Q 11 | 2Q 10 | ||||||||||||||||||||||||||||||||||||||||||
|
Average
|
Yield/
|
Average
|
Yield/
|
Average
|
Yield/
|
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||||||||||||||||||||
|
balance
|
rate
|
balance
|
rate
|
balance
|
rate
|
balance
|
rate
|
balance
|
rate
|
|||||||||||||||||||||||||||||||||||||||
|
Earning assets
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Loans
|
$ | 881,976 | 5.43 | % | $ | 887,531 | 5.50 | % | $ | 903,075 | 5.71 | % | $ | 904,293 | 5.76 | % | $ | 909,295 | 5.77 | % | (0.6 | ) % | (3.0 | ) % | ||||||||||||||||||||||||
|
Investment securities
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Taxable
|
106,609 | 2.94 | 101,625 | 2.62 | 98,378 | 3.24 | 99,572 | 2.70 | 103,284 | 3.29 | 4.9 | 3.2 | ||||||||||||||||||||||||||||||||||||
|
Tax-exempt
|
4,581 | 5.27 | 4,610 | 5.08 | 5,222 | 5.40 | 5,894 | 5.16 | 6,460 | 5.30 | (0.6 | ) | (29.1 | ) | ||||||||||||||||||||||||||||||||||
|
Federal funds sold
|
24,310 | 0.09 | 46,813 | 0.14 | 34,018 | 0.16 | 40,638 | 0.20 | 38,001 | 0.15 | (48.1 | ) | (36.0 | ) | ||||||||||||||||||||||||||||||||||
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Interest-bearing deposits
|
39,182 | 0.12 | 21,585 | 0.12 | 19,952 | 0.12 | 15,666 | 0.15 | 14,075 | 0.12 | 81.5 | 178.4 | ||||||||||||||||||||||||||||||||||||
|
Total earning assets
|
1,056,658 | 4.86 | % | 1,062,164 | 4.88 | % | 1,060,645 | 5.20 | % | 1,066,063 | 5.18 | % | 1,071,115 | 5.26 | % | (0.5 | ) | (1.4 | ) | |||||||||||||||||||||||||||||
|
Cash and due from banks
|
18,327 | 19,316 | 19,867 | 21,865 | 9,997 | (5.1 | ) | 83.3 | ||||||||||||||||||||||||||||||||||||||||
|
Other assets
|
68,190 | 65,426 | 62,305 | 65,081 | 67,860 | 4.2 | 0.5 | |||||||||||||||||||||||||||||||||||||||||
|
Allowance for credit losses
|
(17,962 | ) | (15,647 | ) | (14,300 | ) | (13,966 | ) | (14,310 | ) | 14.8 | 25.5 | ||||||||||||||||||||||||||||||||||||
|
Total assets
|
$ | 1,125,213 | $ | 1,131,259 | $ | 1,128,517 | $ | 1,139,043 | $ | 1,134,662 | (0.5 | ) | (0.8 | ) | ||||||||||||||||||||||||||||||||||
|
Interest-bearing liabilities
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Demand deposits
|
$ | 137,775 | 0.22 | % | $ | 131,628 | 0.22 | % | $ | 128,592 | 0.22 | % | $ | 132,023 | 0.24 | % | $ | 132,563 | 0.25 | % | 4.7 | 3.9 | ||||||||||||||||||||||||||
|
Money market and savings deposits
|
261,869 | 0.97 | 260,841 | 0.93 | 258,713 | 0.84 | 259,511 | 0.81 | 259,273 | 0.72 | 0.4 | 1.0 | ||||||||||||||||||||||||||||||||||||
|
Certificates of deposit $100,000 or more
|
244,805 | 1.67 | 259,179 | 1.70 | 256,167 | 1.77 | 258,542 | 1.91 | 251,340 | 2.09 | (5.6 | ) | (2.6 | ) | ||||||||||||||||||||||||||||||||||
|
Other time deposits
|
206,310 | 2.02 | 208,301 | 2.10 | 208,808 | 2.23 | 212,098 | 2.37 | 215,987 | 2.56 | (1.0 | ) | (4.5 | ) | ||||||||||||||||||||||||||||||||||
|
Interest-bearing deposits
|
850,759 | 1.31 | 859,949 | 1.34 | 852,280 | 1.37 | 862,174 | 1.44 | 859,163 | 1.51 | (1.1 | ) | (1.0 | ) | ||||||||||||||||||||||||||||||||||
|
Short-term borrowings
|
15,020 | 0.36 | 14,165 | 0.37 | 15,381 | 0.39 | 16,092 | 0.38 | 15,771 | 0.48 | 6.0 | (4.8 | ) | |||||||||||||||||||||||||||||||||||
|
Long-term debt
|
932 | 4.51 | 932 | 4.56 | 932 | 4.46 | 1,429 | 4.36 | 1,429 | 4.40 | - | (34.8 | ) | |||||||||||||||||||||||||||||||||||
|
Total interest-bearing liabilities
|
866,711 | 1.29 | % | 875,046 | 1.32 | % | 868,593 | 1.35 | % | 879,695 | 1.42 | % | 876,363 | 1.50 | % | (1.0 | ) | (1.1 | ) | |||||||||||||||||||||||||||||
|
Noninterest-bearing deposits
|
126,081 | 122,300 | 126,164 | 121,844 | 117,586 | 3.1 | 7.2 | |||||||||||||||||||||||||||||||||||||||||
|
Accrued expenses and other liabilities
|
11,234 | 11,447 | 10,419 | 12,196 | 15,043 | (1.9 | ) | (25.3 | ) | |||||||||||||||||||||||||||||||||||||||
|
Stockholders' equity
|
121,187 | 122,466 | 123,341 | 125,308 | 125,670 | (1.0 | ) | (3.6 | ) | |||||||||||||||||||||||||||||||||||||||
|
Total liabilities and stockholders' equity
|
$ | 1,125,213 | $ | 1,131,259 | $ | 1,128,517 | $ | 1,139,043 | $ | 1,134,662 | (0.5 | ) | (0.8 | ) | ||||||||||||||||||||||||||||||||||
|
Net interest spread
|
3.57 | % | 3.56 | % | 3.85 | % | 3.76 | % | 3.76 | % | ||||||||||||||||||||||||||||||||||||||
|
Net interest margin
|
3.80 | % | 3.79 | % | 4.09 | % | 4.00 | % | 4.03 | % | ||||||||||||||||||||||||||||||||||||||
Page 11 of 11
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Shore Bancshares, Inc.
|
|
Reconciliation of Non-GAAP Measures
|
|
(In thousands, except per share data)
|
|
YTD
|
YTD
|
|||||||||||||||||||||||||||
| 2Q 11 | 1Q 11 | 4Q 10 | 3Q 10 | 2Q 10 |
06/30/2011
|
06/30/2010
|
||||||||||||||||||||||
|
The following reconciles return on average equity and return on
|
||||||||||||||||||||||||||||
|
average tangible equity (Note 1):
|
||||||||||||||||||||||||||||
|
Net (loss) income
|
$ | (233 | ) | $ | (1,083 | ) | $ | 850 | $ | (1,400 | ) | $ | 445 | $ | (1,316 | ) | $ | (1,117 | ) | |||||||||
|
Net (loss) income - annualized (A)
|
$ | (935 | ) | $ | (4,392 | ) | $ | 3,372 | $ | (5,554 | ) | $ | 1,785 | $ | (2,654 | ) | $ | (2,253 | ) | |||||||||
|
Net (loss) income, excluding net amortization and
|
||||||||||||||||||||||||||||
|
impairment charges of intangible assets
|
$ | (155 | ) | $ | (1,005 | ) | $ | 928 | $ | (409 | ) | $ | 523 | $ | (1,160 | ) | $ | (961 | ) | |||||||||
|
Net (loss) income, excluding net amortization and
|
||||||||||||||||||||||||||||
|
impairment charges of intangible assets -
annualized (B)
|
$ | (622 | ) | $ | (4,076 | ) | $ | 3,682 | $ | (1,623 | ) | $ | 2,098 | $ | (2,339 | ) | $ | (1,938 | ) | |||||||||
|
Average stockholders' equity (C)
|
$ | 121,187 | $ | 122,466 | $ | 123,341 | $ | 125,308 | $ | 125,670 | $ | 121,823 | $ | 126,869 | ||||||||||||||
|
Less: Average goodwill and other intangible assets
|
(18,334 | ) | (18,465 | ) | (17,877 | ) | (21,016 | ) | (21,178 | ) | (18,399 | ) | (21,243 | ) | ||||||||||||||
|
Average tangible equity (D)
|
$ | 102,853 | $ | 104,001 | $ | 105,464 | $ | 104,292 | $ | 104,492 | $ | 103,424 | $ | 105,626 | ||||||||||||||
|
Return on average equity (GAAP) (A)/(C)
|
(0.77 | ) % | (3.59 | ) % | 2.73 | % | (4.43 | ) % | 1.42 | % | (2.18 | ) % | (1.78 | ) % | ||||||||||||||
|
Return on average tangible equity (Non-GAAP) (B)/(D)
|
(0.60 | ) % | (3.92 | ) % | 3.49 | % | (1.56 | ) % | 2.01 | % | (2.26 | ) % | (1.83 | ) % | ||||||||||||||
|
The following reconciles GAAP efficiency ratio and non-GAAP
|
||||||||||||||||||||||||||||
|
efficiency ratio (Note 2):
|
||||||||||||||||||||||||||||
|
Noninterest expense (E)
|
$ | 9,194 | $ | 9,891 | $ | 9,082 | $ | 12,629 | $ | 9,688 | $ | 19,085 | $ | 20,009 | ||||||||||||||
|
Less: Amortization of intangible assets
|
(128 | ) | (129 | ) | (129 | ) | (128 | ) | (129 | ) | (257 | ) | (258 | ) | ||||||||||||||
|
Impairment charges
|
- | - | - | (3,051 | ) | - | - | - | ||||||||||||||||||||
|
Adjusted noninterest expense (F)
|
$ | 9,066 | $ | 9,762 | $ | 8,953 | $ | 9,450 | $ | 9,559 | $ | 18,828 | $ | 19,751 | ||||||||||||||
|
Net interest income (G)
|
$ | 9,942 | $ | 9,862 | $ | 10,866 | $ | 10,687 | $ | 10,691 | $ | 19,804 | $ | 21,086 | ||||||||||||||
|
Noninterest income (H)
|
$ | 4,381 | $ | 4,395 | $ | 3,948 | $ | 4,643 | $ | 4,568 | $ | 8,776 | $ | 9,450 | ||||||||||||||
|
Less: Investment securities (gains)/losses
|
(2 | ) | (79 | ) | - | - | - | (81 | ) | - | ||||||||||||||||||
|
Other nonrecurring (gains)/losses
|
- | - | - | (224 | ) | - | - | - | ||||||||||||||||||||
|
Adjusted noninterest income (I)
|
$ | 4,379 | $ | 4,316 | $ | 3,948 | $ | 4,419 | $ | 4,568 | $ | 8,695 | $ | 9,450 | ||||||||||||||
|
Efficiency ratio (GAAP) (E)/(G)+(H)
|
64.19 | % | 69.38 | % | 61.31 | % | 82.38 | % | 63.49 | % | 66.78 | % | 65.53 | % | ||||||||||||||
|
Efficiency ratio (Non-GAAP) (F)/(G)+(I)
|
63.31 | % | 68.85 | % | 60.44 | % | 62.56 | % | 62.64 | % | 66.07 | % | 64.68 | % | ||||||||||||||
|
The following reconciles book value per common share and tangible
|
||||||||||||||||||||||||||||
|
book value per common share (Note 1):
|
||||||||||||||||||||||||||||
|
Stockholders' equity (J)
|
$ | 120,941 | $ | 120,926 | $ | 122,513 | $ | 122,355 | $ | 124,666 | ||||||||||||||||||
|
Less: Goodwill and other intangible assets
|
(18,261 | ) | (18,389 | ) | (18,518 | ) | (17,923 | ) | (21,102 | ) | ||||||||||||||||||
|
Tangible equity (K)
|
$ | 102,680 | $ | 102,537 | $ | 103,995 | $ | 104,432 | $ | 103,564 | ||||||||||||||||||
|
Shares outstanding (L)
|
8,457 | 8,443 | 8,443 | 8,443 | 8,443 | |||||||||||||||||||||||
|
Book value per common share (GAAP) (J)/(L)
|
$ | 14.30 | $ | 14.32 | $ | 14.51 | $ | 14.49 | $ | 14.77 | ||||||||||||||||||
|
Tangible book value per common share (Non-GAAP) (K)/(L)
|
$ | 12.14 | $ | 12.14 | $ | 12.32 | $ | 12.37 | $ | 12.27 | ||||||||||||||||||
|
The following reconciles average equity to average assets and
|
||||||||||||||||||||||||||||
|
average tangible equity to average tangible assets (Note 1):
|
||||||||||||||||||||||||||||
|
Average stockholders' equity (M)
|
$ | 121,187 | $ | 122,466 | $ | 123,341 | $ | 125,308 | $ | 125,670 | $ | 121,823 | $ | 126,869 | ||||||||||||||
|
Less: Average goodwill and other intangible assets
|
(18,334 | ) | (18,465 | ) | (17,877 | ) | (21,016 | ) | (21,178 | ) | (18,399 | ) | (21,243 | ) | ||||||||||||||
|
Average tangible equity (N)
|
$ | 102,853 | $ | 104,001 | $ | 105,464 | $ | 104,292 | $ | 104,492 | $ | 103,424 | $ | 105,626 | ||||||||||||||
|
Average assets (O)
|
$ | 1,125,213 | $ | 1,131,259 | $ | 1,128,517 | $ | 1,139,043 | $ | 1,134,662 | $ | 1,128,115 | $ | 1,140,105 | ||||||||||||||
|
Less: Average goodwill and other intangible assets
|
(18,334 | ) | (18,465 | ) | (17,877 | ) | (21,016 | ) | (21,178 | ) | (18,399 | ) | (21,243 | ) | ||||||||||||||
|
Average tangible assets (P)
|
$ | 1,106,879 | $ | 1,112,794 | $ | 1,110,640 | $ | 1,118,027 | $ | 1,113,484 | $ | 1,109,716 | $ | 1,118,862 | ||||||||||||||
|
Average equity/average assets (GAAP) (M)/(O)
|
10.77 | % | 10.83 | % | 10.93 | % | 11.00 | % | 11.08 | % | 10.80 | % | 11.13 | % | ||||||||||||||
|
Average tangible equity/average tangible assets (Non-GAAP) (N)/(P)
|
9.29 | % | 9.35 | % | 9.50 | % | 9.33 | % | 9.38 | % | 9.32 | % | 9.44 | % | ||||||||||||||
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.