Shore Bancshares, Inc. · NASDAQ:SHBI
Shore Bancshares — Investor Presentation (July 2024)
27 slides from Shore Bancshares's investor presentation, Jul 29, 2024
Slide 1: Investor Presentation June 30, 2024
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 June 30, 2024 Investor Presentation
Slide 2: Forward-Looking Statements
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Forward-Looking Statements This investor presentation contains future oral and written statements of Shore Bancshares, Inc. (the “Company” or “SHBI”) and its wholly-owned banking subsidiary, Shore United Bank, N.A. (the “Bank”),
Slide 3: Shore Bancshares, Inc. (NASDAQ: SHBI)
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Shore Bancshares, Inc. (NASDAQ: SHBI) (1) Allowance for Credit Losses ("ACL"), Nonperforming Assets (“NPAs”) includes Other Real Estate Owned ("OREO"), Loan Modifications to Borrowers Experiencing Financial Difficulty ("BEFDs")
Slide 4: Suburban and Rural Branches Support Dominant Maryland Franchise and Growing Presence in Virginia and Delaware
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Suburban and Rural Branches Support Dominant Maryland Franchise and Growing Presence in Virginia and Delaware 4 Branch locations (41 branches) Commercial Lending Centers (4 locations) Mortgage Loan Offices (3 locations) Pennsylv
Slide 5: Investment Opportunity
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Investment Opportunity 2024 Q2 ▪ EPS and ROATCE of $0.34 per diluted share and 8.70%, respectively ▪ ROAA of 0.77% and 0.91% (Non-GAAP) 2024 Q1 ▪ EPS and ROATCE of $0.25 per diluted share and 6.38%, respectively ▪ ROAA of 0.57%
Slide 6: Federal Agency Presence Insulates Economy in Operating Markets
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Federal Agency Presence Insulates Economy in Operating Markets 6 Naval Surface Warfare – Naval Support Facility at Dahlgren Defense Intelligence Agency & Defense Intelligence Analysis Center – Joint Base Anacostia-Bolling Naval
Slide 7: Loan Portfolio Composition
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Construction 7.0% Residential real estate 32.7% Commercial real estate 48.6% Commercial 4.6% Consumer 7.1% Loan Portfolio Loan Composition (June 30, 2024 - MRQ) 7 $4.71 billion Concentrations as a percentage of total capital as
Slide 8: Commercial Real Estate Portfolio Details
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Commercial Real Estate Portfolio Details Average loan size $1.01mm Average LTV* 56.0% DSC (non-owner occupied) 1.70x % with guaranty (by $ / by #) 85% / 84% Past due 30-89 days $1.2mm / 0.04% of total CRE Nonaccrual $6.04mm / 0.
Slide 9: Commercial Real Estate Portfolio Details: Composition and Geography
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Commercial Real Estate Portfolio Details CRE Portfolio Composition (As of June 30, 2024) Multifamily, 9.5% Industrial, 11.8% Office, 17.9% Retail, 18.2% Other, 34.9% Hotel/Motel, 7.6% 9 Geography (As of June 30, 2024) MD, 54.6%
Slide 10: Commercial Real Estate Portfolio Details: Maturity and Repricing
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Commercial Real Estate Portfolio Details 10 $ M ill io n CRE Maturity Schedule (As of June 30, 2024) $207.4 $211.3 $217.2 $212.1 $220.1 7.4% 7.5% 7.7% 7.5% 7.8% Balance ($ Million) % of CRE Loans 2024 2025 2026 2027 2028 $— $50.
Slide 11: Deposit Portfolio Composition
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Interest Bearing, 45.6% Non-Interest Bearing, 30.8% Time Deposits, 23.6% Deposit Portfolio Deposit Composition (June 30, 2024 - MRQ) ▪ Deposit franchise positions Bank to succeed in a variety of rate environments ▪ Non-interest
Slide 12: NIM and Core NIM
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 3.27% 2.94% 3.15% 3.11% 3.09%3.24% 2.91% 3.09% 2.89% 2.82% 3.27% 3.10% 3.37% 3.09% 3.33% 3.21% 3.46% 3.41% NIM Core-NIM Regional Peer National Peer 2020 2021 2022 2023 2024YTD 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00
Slide 13: Balance Sheet Composition and Deposit Betas
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Balance Sheet Composition and Deposit Betas 13 1Non-maturity transaction accounts include both non-interest bearing and interest-bearing deposit accounts Non-maturity deposit1 costs have remained well below market ratesBalance S
Slide 14: Credit Quality Statistics
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Credit Quality Statistics 14 (1) FASB eliminated accounting guidance for troubled debt restructurings ("TDRs") and replaced with the new disclosure loan modifications to borrowers' experiencing financial difficulties ("BEFDs") i
Slide 15: Quarterly Capital Ratios (Bank Only)
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Quarterly Capital Ratios (Bank Only) 15 9.38% 8.17% 8.33% 8.58% 8.71% 12.07% 9.85% 10.02% 10.32% 10.45% 12.07% 9.85% 10.02% 10.32% 10.45% 13.15% 11.09% 11.27% 11.56% 11.69% Total Risk-Based Capital Ratio Tier 1 Risk-Based Capita
Slide 16: Quarterly Capital Ratios (Holding Company)
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Quarterly Capital Ratios (Holding Company) 16 *Decrease in capital ratios due to merger of equals with TCFC on July 1, 2023. 9.09% 7.55% 7.74% 7.93% 8.07% 11.04% 8.49% 8.69% 8.91% 9.06% 11.72% 9.10% 9.31% 9.53% 9.67% 13.69% 11.2
Slide 17: Expense Control Remains a Top Priority
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Expense Control Remains a Top Priority Shore United Bank leadership has a history of careful expense management ▪ Current investments are inflating expenses but are expected to improve operating efficiency over time ▪ Salaries a
Slide 18: Appendix
Appendix Shore Bancshares|)\ | Shore United Bank)
Slide 19: Financial Highlights
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Financial Highlights 19 1 Gross portfolio loans and US SBA loans are inclusive of net deferred costs and fees. 2 Non-GAAP financial measures. Refer to Appendix to this presentation for a reconciliation. 3 NPLs include nonaccrual
Slide 20: Non-GAAP Reconciliation
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Non-GAAP Reconciliation ‘‘Tangible book value per share’’ is defined as tangible stockholders’ equity less preferred equity and intangible assets divided by total common shares outstanding. We believe that this measure is import
Slide 21: Non-GAAP Reconciliation
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Non-GAAP Reconciliation ‘‘Efficiency ratio” is defined as recurring non-interest expense less foreclosed real estate (OREO) expenses and valuation allowances, less merger and acquisition costs, less amortization of intangible as
Slide 22: Non-GAAP Reconciliation
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Non-GAAP Reconciliation We believe core net interest margin, which reflects our net interest margin before the impact of U.S. SBA PPP loan interest and average balances, accretion interest on acquired loans and prepayment penalt
Slide 23: Non-GAAP Reconciliation
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Non-GAAP Reconciliation We believe core net interest margin, which reflects our net interest margin before the impact of U.S. SBA PPP loan interest and average balances, accretion interest on acquired loans and prepayment penalt
Slide 24: Non-GAAP Reconciliation
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Non-GAAP Reconciliation During 2023, our operating results were impacted by one-time expenses related to the merger equal with The Community Financial Corporation ("TCFC"). We believe that investors would benefit from analyzing
Slide 25: Non-GAAP Reconciliation
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Non-GAAP Reconciliation ‘‘Tangible common equity (or “TCE”)” is defined as stockholders’ equity less preferred equity and intangible assets. “Tangible assets (or “TA”)” are defined as total assets less intangible assets. We beli
Slide 26: Non-GAAP Reconciliation
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Non-GAAP Reconciliation We believe that pre-tax pre-provision income, which reflects our profitability before income taxes and loan loss provisions, allows investors to better assess our operating income and expenses in relation
Slide 27: Second Quarter 2024
#006881 #ACC0C6 #83AFB4 #FEBE10 #5F574F #4D4F53 #C75B12 #5B8F22 #593160 Investor Presentation Second Quarter 2024 NASDAQ: SHBI Parent of: Shore Bancshares, Inc. is the largest independent financial holding company headquartered on the Eastern Shore of Maryland. It is the parent company of Shore Unit