Shore Bancshares (SHBI) investor relations material

Executive summary

• Net income for Q2 2026 was $18.9 million ($0.56 per diluted share), up 21.7% year-over-year and 10.5% sequentially, with ROAA of 1.24% and adjusted ROAA of 1.34%.

• Net interest margin rose to 3.70%, reflecting lower funding costs and disciplined balance sheet management.

• Book value per share increased to $18.44, and tangible book value per share to $15.77.

• Asset quality remained strong, with nonperforming assets at 1.09% of total assets and classified assets at 1.41%.

• Management focus includes capital strength, automation, deposit growth, credit quality, expense control, and shareholder returns.

Financial highlights

• Net interest income for Q2 2026 was $52.9 million, up 0.7% sequentially and 12.2% year-over-year; NIM excluding accretion was 3.45%.

• Noninterest income was $8.8 million, up 21.9% sequentially but down 6.1% year-over-year, mainly due to lower mortgage banking revenue.

• Noninterest expense was $35.7 million, down 3.7% sequentially but up 3.7% year-over-year, with lower salaries and professional services costs.

• Efficiency ratio improved to 57.76% (adjusted 54.49%), down 408 bps sequentially.

• For the six months ended June 30, 2026, net income was $36.0 million ($1.07 per diluted share), up 22.8% year-over-year.

Outlook and guidance

• 2026 outlook projects low-single-digit loan growth, mid-single-digit deposit growth, and net interest margin of 3.60–3.70%.

• Efficiency ratio expected in the mid-50% range, with CET1 ratio target of at least 11%.

• Management expects continued improvements in operating leverage through expense management and technology investments.

• Focus remains on disciplined capital allocation, enhancing shareholder returns, and sustainable long-term growth.

• Nonaccrual loans targeted below 1% of loans by year-end.