Shore Bancshares, Inc. · NASDAQ:SHBI
Shore Bancshares — Investor Presentation (November 2020)
33 slides from Shore Bancshares's investor presentation, Nov 6, 2020
Slide 1: Investor Presentation November 2020
1 Investor Presentation November 2020
Slide 2: Forward-looking statements
2 This investor presentation contains, and future oral and written statements of Shore Bancshares, Inc. (the “Company” or “SHBI ”) and its wholly - owned banking subsidiary, Shore united bank (the “Bank”), and its management may contain, statements about future events that constitute forward - looki
Slide 3: Management Team
3 Management Team * Reference Appendix section for biographies Name Title/Function Entity Years in Banking Years with Company Lloyd L. “Scott” Beatty, Jr. President and Chief Executive Officer SHBI, Bank 26 14 Edward C. Allen EVP and Chief Financial Officer SHBI, Bank 42 9 Donna J. Stevens EVP and C
Slide 4: Financial Summary and Key Ratios
4 Financial Summary and Key Ratios Financial Ratio 12/31/19 YTD Ann. 9/30/20 Return on Average Assets 1.03% 0.96% Return on Average Equity 8.24% 7.99% Net Interest Margin 3.47% 3.35% Non - interest Income/Average Assets (1) 0.69% 0.62% Non - interest Expense/Average Assets (1) 2.52% 2.25% Efficiency
Slide 5: Locations
5 Locations SHORE BANCSHARES Headquarters 18 E. Dover St. Easton, MD 21601 BANKING Shore United Bank 18 E. Dover St. Easton, MD 21601 877.758.1600 ShoreUnitedBank.com LOAN PRODUCTION OFFICES Shore United Bank 102 Sleepy Hollow, Unit 204 Middletown, DE 19709 9748 Stephen Decatur Highway, Unit 104
Slide 6: Strategic Direction
6 Strategic Direction Market Expansion LPO’s and Strategic Branching Acquire Banks Contiguous to our Existing Markets Leverage Back Office Capability Additions to Staff Have Been Primarily Production Operating Strategy Drive Profitability Emphasis on Core Deposits & Cost of Funds C
Slide 7: Maryland deposit market rank and share; market highlights
7 Maryland Rank Share Branches Talbot 1 41.49% 4 Queen Anne’s 2 26.25% 5 Caroline 3 15.21% 2 Kent 5 8.92% 1 Dorchester 7 5.52% 1 Worcester 11 0.60% 1 Howard 14 0.39% 1 Baltimore 17 0.79% 2 Delaware Rank Share Branches Kent 6 5.22% 4 Virginia Accomack 6 1.55% 1 Selected SHBI Market Highlights Proje
Slide 8: Market rank and deposit share
8 Market Rank Local Rank Ticker Company Name City (HQ) HQ State Branches 2020 Total Deposits 2020 ($000) ’20 Market Share (%) 1 – BAC Bank of America Corp. Charlotte NC 40 8,014,169 19.5% 2 – MTB M&T Bank Corp. Buffalo NY 56 6,171,860 15.0% 3 – PNC PNC Financial Services Group Inc. Pittsburgh PA 60
Slide 9: Operating in Stable Mid-Atlantic Markets
9 Operating in Stable Mid - Atlantic Markets Source: US Bureau of Labor Statistics Rank State September 2020 Preliminary Unemployment Data Total Deposits (in thousands) Rank State September 2020 Preliminary Unemployment Data Total Deposits (in thousands) 1 Nebraska 3.5 27 Mississippi 7.1 2 South Dak
Slide 10: Recent Developments: Paycheck Protection Program
10 Recent Developments PAYCHECK PROTECTION PROGRAM (PPP) Shore United Bank team responded quickly to identify impacted customers As of August 8, 2020 (end of program)1,525 loans were processed and 1,488 loans were funded for $126,670,423 22% of loans to new customers Funds are provided in th
Slide 11: Targeted, Organic Balance Sheet Growth
11 Total Deposits ($M) Total Assets ($M) Total Gross Loans Held for Investment ($M) NCOs / Avg. Loans Targeted, Organic Balance Sheet Growth 1) Core deposits defined as total deposits less total CDs >$250,000 and brokered deposits (as of September 30, 2020) Source: S&P Global Market Intelligence; Co
Slide 12: Strong, Consistent Historical Profitability
12 Net Income from Continuing Operations ($M) ROAE from Continuing Operations ROAA from Continuing Operations NIM (FTE) Strong, Consistent Historical Profitability (1) Decline was due to Subordinated - debt issued in 3Q2020 of $25.0 million. Note: 2020Q3 metrics are YTD; Yellow dotted lines in 2018
Slide 13: Income Statement (Quarterly)
13 Income Statement (Quarterly) Dollar Value in Thousands 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 Interest and Fees on Loans $14,100 $14,043 $13,795 $13,945 $14,139 Other Interest Income 1,093 1,122 891 649 763 Interest Income 15,193 15,165 14,686 14,594 14,902 Interest on Deposits 2,288
Slide 14: Loan modifications as of 9/30/2020
14 Dollar Value in Thousands Total Loan Balance as of 9/30/2020 Total Loans Modified as of 9/30/2020 Loans Modified to Interest Only Payments (6 months or less) Loans Modified to Payment Deferral (3 months) Percentage of Loans Modified Hospitality Industry $113,832,662 $4,659,324 -- $4,659,324 4.09%
Slide 15: Loan portfolio by type
15 (Dollar Value in Thousands) As of September 30, 2020 Loan Type Balance % of Total Construction $106,040 7.4% 1 - 4 family residential 14,877 Other 91,163 Residential Real Estate 442,140 31.1% Secured by 1 - 4 family - revolving 49,860 Secured by 1 - 4 family - closed end 347,698 Secured by multif
Slide 16: Hospitality loans
16 100% of the portfolio was pass rated Geographically, there is a concentration in hotels based at the beach in Ocean City, MD which has rebounded nicely due to opening back up in June of 2020 20 Hospitality loans comprise of Hotels, Motels and Inns, which make up $113.8mm or 8.0% of the tota
Slide 17: Hotel regions maps
17 MD/DE Beaches Chesapeake Bay Region Myrtle Beach Area
Slide 18: Retail and Restaurant Breakdown
18 Retail and Restaurant Breakdown Total Portfolio Deferred Portfolio Retail Exposure Outstanding ($000) % of Loans (%) LTV (%) Outstanding ($000) % of Portfolio (%) % of Loans (%) LTV (%) Retail Strip Centers – Grocery (Anchor) $22,494 1.6% 41.2% – 0.0% 0.0% – Retail Strip Centers – Multi - use 51,
Slide 19: Non-Owner Occupied Retail Stores
19 $1,814,038 $11,296,397 $88,193,327 $250,000 or less $250,000 - $1mm Over $1 mm $101.3mm Non - Owner Occupied Retail Stores Non - owner occupied retail store loans comprise of $101.3 mm or 7.1% of the total loan portfolio as of September 30, 2020 There were no payment modifications as of Septe
Slide 20: Owner Occupied Retail Stores
20 $2,396,765 $7,344,121 $4,730,383 $250,000 or less $250,000 - $1 mm Over $1mm $14.5mm Owner Occupied Retail Stores Owner occupied retail store loans comprise of $14.5 million or 1.0% of the total loan portfolio as of September 30, 2020 $160 thousand, or 1.1% of the loans have secured a payment
Slide 21: Restaurants
21 $1,789,000 $6,023,259 $1,403,000 $250,000 or less $250,000 - $1mm Over $1 mm $9.2 mm Restaurants 100% of the portfolio was pass rated Owner occupied restaurant loans comprise of $9.2 mm or 0.6% of the total loan portfolio as of September 30, 2020 $220 thousand, or 2.4% of the loans have sec
Slide 22: Restaurants Map
Restaurants Map sasttteresh 22
Slide 23: Credit Quality Statistics
23 Dollar Values in Thousands 9/30/2019 12/31/2019 9/30/2020 Non - performing Assets Nonaccrual Loans $12,530 $10,590 $6,966 90+ or More Days Past Due 712 1,326 1,373 Other Real Estate Owned 74 74 38 Total Non - Performing Assets $13,316 $11,990 $8,377 Performing TDRs $7,588 $7,501 $7,267 Total NPAs
Slide 24: Securities Portfolio
24 (Dollars in thousands) Amortized Cost Gross Unrealized Gains/(Losses) Estimated Fair Value Available - for - sale securities: September 30, 2020 U.S. Government Agencies $24,661 $(29) $24,632 Mortgage - backed 112,068 2,649 114,717 Total $136,729 $2,620 $139,349 Held - to - maturity securities: U
Slide 25: Attractive Deposit Base
25 (Dollar Value in Thousands) September 30, 2020 Deposit Type Balance % of Total Average Rate (%) Noninterest Bearing Demand 465,304 29.2 0.00 Interest Bearing Demand 411,743 25.8 0.30 Money Market & Savings 442,684 27.8 0.29 CDs $100,000 or more 126,704 7.9 1.78 Other Time 147,686 9.3 1.52 Total D
Slide 26: Yield Table with and without excess liquidity
26 Yield Table – 9/30/20 YTD with and without excess liquidity As reported YTD 9/30/2020 Without $100k in excess liquidity YTD 9/30/2020 (Dollars in thousands) Average Balance Interest Yield/rate Average Balance Interest Yield/rate Earnings assets Loans $1,348,362 $41,987 4.16% $1,348,362 $41,987 4.
Slide 27: Strong Capital and Asset Growth
27 Strong Capital and Asset Growth 11.93% 12.32% 10.38% 11.13% 11.24% 9.92% 0% 2% 4% 6% 8% 10% 12% 14% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2015 2016 2017 2018 2019 2020Q3 Total Assets TCE/TA
Slide 28: Capital Ratios (Bank Only)
28 Capital Ratios (Bank Only) 9.79% 10.64% 10.07% 11.84% 13.00% 13.31% 11.84% 13.00% 13.31% 12.73% 13.87% 14.30% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% YE 2018 YE 2019 9/30/2020 Tier 1 Leverage Ratio Common Equity Tier 1 Tier 1 Risk-Based Capital Ratio2 Total Risk-Based Capital Ra
Slide 29: Compelling Investment Considerations
29 Compelling Investment Considerations Excellent Cost of Funds Strategic plan positioned for organic growth and acquisitions Focused on creating sustainable competitive advantages Strengthened noninterest revenue sources Driving a sales culture with both a commercial and retail focus whil
Slide 30: Appendix
30 APPENDIX Appendix
Slide 31: SHBI Management Team biographies
31 SHBI Management Team Talent, depth, unique skills Lloyd L. “Scott” Beatty, Jr ., 68, CPA, President & CEO of Shore Bancshares, Inc. since June 2013, Director of SHBI since December 2000, Director of Shore United Bank (formerly the Talbot Bank and CNB) since 1992. COO from 2006 until 2012 and na
Slide 32: Consolidated Historical Balance Sheet
32 Dollar Values in Thousands 2016 2017 2018 2019 9/30/2020 Assets Cash and Cash Equivalents $75,938 $31,820 $67,225 $94,971 $156,462 Available for Sale Securities 163,902 196,955 154,432 122,791 139,349 Other Securities 1,650 3,735 7,745 5,532 25,196 Total Cash & Securities 248,194 238,757 235,445
Slide 33: Consolidated Historical Income Statement
33 Consolidated Historical Income Statement Note: 9/30/2020 data is YTD Source: S&P Global Market Intelligence Dollar Values in Thousands 2015 2016 2017 2018 2019 9/30/2020 Interest and Fees on Loans $35,126 $37,155 $43,617 $51,332 $55,391 $41,879 Other Interest Income 3,745 3,497 4,184 4,575 4,376
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