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0001035092false00010350922026-07-232026-07-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 23, 2026
Shore_Bancshares_Logo.jpg
SHORE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Maryland
000-22345
52-1974638
(State or other jurisdiction of incorporation or organization)
(Commission file number)
(IRS Employer Identification No.)
18 E. Dover Street, Easton, Maryland 21601
(Address of principal executive offices) (Zip Code)
(410) 763-7800
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common stock, $0.01 par value per share
SHBI
The NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02 Result of Operation and Financial Condition
On July 23, 2026, Shore Bancshares, Inc. (the “Company”) issued a press release announcing its results of operations and financial condition for the three and six months ended June 30, 2026. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.
The information furnished under Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of the Company under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d)Exhibits.
Exhibit Number
Description
104
Cover Page Interactive Data File (embedded within the inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SHORE BANCSHARES, INC.
Dated: July 23, 2026
By:
/s/ James M. Burke
James M. Burke
President and Chief Executive Officer
3
EX-99.1 2 shbi-20260630xexx991.htm EX-99.1 Document
Exhibit 99.1
shore_bancsharesxlogo.jpg
18 E. Dover Street
Easton, Maryland 21601
Phone (410) 763-7800
PRESS RELEASE
Shore Bancshares, Inc. Reports 2026 Second Quarter Results
Easton, Maryland (July 23, 2026) – Shore Bancshares, Inc. (NASDAQ – SHBI) (the “Company” or “Shore Bancshares”), the holding company for Shore United Bank, N.A. (the “Bank”), reported net income for the second quarter of 2026 of $18.9 million, or $0.56 per diluted common share, compared to net income of $17.1 million, or $0.51 per diluted common share, for the first quarter of 2026, and net income of $15.5 million, or $0.46 per diluted common share, for the second quarter of 2025.
Second Quarter 2026 Highlights
•Net Income – Net income for the second quarter of 2026 increased $1.8 million to $18.9 million, from $17.1 million in the first quarter of 2026. Net income increased primarily due to a decrease in interest expense of $1.3 million, an increase in other noninterest income of $1.2 million and a decrease in salaries and employee benefits of $1.2 million. These increases were partially offset by a decrease in interest on deposits with other banks of $858 thousand and a higher provision for credit losses of $811 thousand. Net income for the six months ended June 30, 2026 was $36.0 million, compared to $29.3 million for the six months ended June 30, 2025.
•Return on Average Assets (“ROAA”) – The Company reported ROAA of 1.24% for the second quarter of 2026, compared to 1.12% for the first quarter of 2026 and 1.03% for the second quarter of 2025. Adjusted ROAA – non-U.S. generally accepted accounting principles (“GAAP”)(1) was 1.34% for the second quarter of 2026, compared to 1.22% for the first quarter of 2026 and 1.15% for the second quarter of 2025.
•Net Interest Margin (“NIM”) – Net interest income for the second quarter of 2026 increased $364 thousand to $52.9 million compared to the first quarter of 2026. NIM increased 6 basis points (“bps”) to 3.70% during the second quarter of 2026 compared to the first quarter of 2026. NIM excluding accretion(1) increased for the comparable periods from 3.35% to 3.45%. Excluding accretion interest, loan yields decreased 1 bp and funding costs decreased 8 bps for the comparable periods. Net interest income increased due to elevated accretion income and interest recoveries from loan payoffs coupled with a lower cost of deposits.
•Capital Management – Book value per share increased to $18.44 at June 30, 2026 from $18.02 at March 31, 2026 and $16.94 at June 30, 2025. During the quarter ended June 30, 2026, the Company announced a $30 million share repurchase program and repurchased 40,093 shares of its outstanding common stock, or approximately $891 thousand. During the second quarter of 2026, the Company declared a dividend of $0.14 per share, which represents a $0.02, or 16.7% increase from the dividend paid in the prior quarter.
•Asset Quality – Nonperforming assets were 1.09% of total assets at June 30, 2026, a decrease from 1.10% at March 31, 2026 and an increase from 0.33% at June 30, 2025. Classified assets were 1.41% of total assets at June 30, 2026, an increase when compared to 1.38% at March 31, 2026 and 0.37% at June 30, 2025. The allowance for credit losses (“ACL”) was $58.7 million at June 30, 2026, compared to $58.5 million at March 31, 2026 and at June 30, 2025. The ACL as a percentage of loans decreased to 1.20% at June 30, 2026 compared to 1.21% at March 31, 2026 and at June 30, 2025.
•Operating Leverage – The efficiency ratio for the second quarter of 2026 was 57.76%, compared to 61.97% in the first quarter of 2026 and 60.83% for the second quarter of 2025. The adjusted efficiency ratio – non-GAAP(1), which excludes amortization of intangibles, was 54.49% for the second quarter of 2026, compared to 58.57% for the first quarter of 2026 and 56.73% for the second quarter of 2025. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.
(1) See the Reconciliation of GAAP and Non-GAAP Measures tables.
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“Our second quarter results reflect the continued strength of our franchise and the progress we are making across the organization,” stated James (“Jimmy”) M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. “Another quarter of expanding net interest margin, record net interest income and record profitability demonstrates the benefits of disciplined balance sheet management, lower funding costs and our ongoing focus on operational execution. Our improved earnings and capital generation allowed us to increase our quarterly dividend and launch a share repurchase program, underscoring the confidence our Board has in the long-term value of our franchise and our commitment to disciplined capital allocation.
We continue to closely monitor several commercial real estate relationships, overall asset quality remains supported by conservative underwriting, strong collateral values and solid reserve levels. We remain focused on executing our strategy, enhancing shareholder returns and positioning Shore Bancshares for sustainable long-term growth.”
Balance Sheet Review
Total assets were $6.15 billion at June 30, 2026, a decrease of $54.6 million from March 31 ,2026. The decrease was primarily due to a decrease in interest bearing deposits of $92.4 million partially offset by an increase in loans of $29.7 million. Total assets decreased $107.4 million, or 1.7%, when compared to $6.26 billion at December 31, 2025. The decrease was primarily due to a decrease in cash and cash equivalents of $97.9 million and a decrease in our loan portfolio of $22.6 million, which were partially offset by an increase in our investment securities portfolio of $18.4 million. The decrease in cash and cash equivalents was primarily driven by seasonal run-off of municipal deposits.
CRE loans (excluding land and construction) were $2.60 billion at June 30, 2026 compared to $2.64 billion at December 31, 2025. The office CRE loan portfolio, which includes owner occupied and non-owner occupied CRE loans, was $475.9 million, or 9.8% of total loans at June 30, 2026. The following table provides the stratification of the classes of CRE loans (excluding land and construction) at June 30, 2026.
June 30, 2026
Owner Occupied Non-Owner Occupied
 ($ in thousands)
Average LTV(1)
Average Loan Size
Loan Balance(2)
Average LTV(1)
Average Loan Size
Loan Balance(2)
Office, medical 46.90  % $ 562  $ 25,288  46.81  % $ 1,652  $ 82,605 
Office, govt. or govt. contractor 52.99  956  9,559  54.33  3,123  59,340 
Office, other 47.17  474  83,886  49.03  1,328  215,210 
Office, total 47.22  506  118,733  48.96  1,546  357,155 
Retail 51.46  650  69,502  47.86  2,573  488,866 
Multifamily (5+ units) —  —  —  54.60  2,428  269,458 
Hotel/motel —  —  —  43.81  4,239  211,957 
Industrial/warehouse 44.81  677  95,391  46.68  1,427  179,791 
Commercial-improved 41.67  1,179  219,347  49.80  1,311  161,291 
Marine/boat slips 28.65  758  16,671  36.03  1,459  7,294 
Restaurant 49.09  1,012  53,632  48.47  1,020  41,834 
Church 31.55  807  51,655  13.10  2,340  2,340 
Land/lot loans 21.70  369  369  50.49  481  1,926 
Other 39.15  1,290  107,062  31.82  539  148,740 
Total CRE loans, gross 43.12  822  $ 732,362  44.14  1,613  $ 1,870,652 
(1)Loan-to-value (“LTV”) is determined based on latest available appraisal against current bank-owned principal. Loans without an updated appraisal utilized the original transaction value.
(2)Loan balance includes deferred fees and costs.
The office CRE loan portfolio included loans to medical tenants of $107.9 million, or 22.7% of the total office CRE loan portfolio, at June 30, 2026. The office CRE loan portfolio also included loans secured by buildings with government or government contractor tenants of $68.9 million, or 14.5% of the total office CRE loan portfolio at the same date. At June 30, 2026, the average loan debt service coverage ratio on the office CRE loan portfolio was 1.7x and the average LTV was 48.10%.
The 463 loans in the office CRE portfolio at June 30, 2026 had an average loan size of $1.0 million and a median loan size of $389 thousand. LTV estimates for the office CRE portfolio at June 30, 2026 are summarized below and LTV collateral values are based on the most recent appraisal, which may vary from the appraised value at loan origination.
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LTV Range ($ in thousands)
Loan Count  Loan Balance % of Office CRE
Less than or equal to 50% 229 $ 166,198  34.9  %
Greater than 50% and less than or equal to 60% 78 126,619  26.6 
Greater than 60% and less than or equal to 70% 86 133,440  28.0 
Greater than 70% and less than or equal to 80% 55 36,539  7.7 
Greater than 80% 15 13,092  2.8 
Total 463 $ 475,888  100.0  %
There were 16 office CRE loans with balances greater than $5.0 million, totaling $147.8 million at June 30, 2026 and totaling $166.1 million at December 31, 2025. The decrease in this portfolio segment was the result of normal amortization and the payoff of one loan. 80.8% of the office CRE loan balance was secured by properties in rural or suburban areas with limited exposure to metropolitan cities and 97.0% was secured by properties with five stories or less. $17.6 million of these loan balances were classified as special mention or substandard at June 30, 2026. There were no charge-offs within the office CRE portfolio during the three and six months ended June 30, 2026 and 2025.
Nonperforming assets were $67.2 million and $68.4 million, or 1.09% and 1.10% of total assets, as of June 30, 2026 and March 31, 2026, respectively. Nonperforming assets primarily consist of three large loans with an aggregate loan balance of $44.4 million. These nonperforming loans primarily consist of multifamily and office commercial real estate loans with collateral in North Carolina and Virginia. As of June 30, 2026, these loans are well-secured by collateral and required minimal individual reserves. When comparing June 30, 2026 to June 30, 2025, nonperforming assets increased $47.6 million, primarily due to an increase in nonaccrual loans of $48.0 million, partially offset by a decrease in repossessed marine and auto loans of $274 thousand and a decrease in loans 90 days past due and accruing of $195 thousand. Substandard loans, which include nonaccrual loans and accruing loans 90 days or more past due, were $84.3 million at June 30, 2026 compared to $82.3 million at March 31, 2026 and $19.9 million at June 30, 2025.
Special mention loans decreased to $73.0 million at June 30, 2026 compared to $97.8 million at March 31, 2026 and increased compared to $65.6 million at June 30, 2025. As of June 30, 2026, there were four special mention loans with individual balances greater than $5.0 million, totaling $53.0 million. These loans consist primarily of multifamily commercial real estate and other commercial real estate exposures that are well-collateralized. Management does not currently expect material losses on these credits and is actively engaged in credit oversight and timely execution of workout strategies.
Total deposits decreased $61.9 million from March 31, 2026 to $5.40 billion at June 30, 2026 and decreased $134.1 million when compared to December 31, 2025. The year-to-date decrease in total deposits was primarily due to a decrease in money market and savings accounts of $104.4 million, a decrease in time deposits of $19.5 million and a decrease in interest-bearing checking of $19.0 million. These decreases were partially offset by an increase in noninterest-bearing deposits of $18.9 million. Core deposits, which exclude municipal cannabis deposits, increased by $71.7 million, or 1.7%, during the same period.
Total funding, which includes customer deposits, Federal Home Loan Bank (“FHLB”) advances and brokered deposits, was $5.40 billion at June 30, 2026, compared to $5.46 billion at March 31, 2026. The Company had no FHLB advances at June 30, 2026 and March 31, 2026. Brokered deposits were $796 thousand and $11.0 million at June 30, 2026 and March 31, 2026, respectively. Total reciprocal deposits were $1.33 billion and $1.42 billion at June 30, 2026 and March 31, 2026, respectively.
Uninsured deposits were $975.6 million, or 18.1% of total deposits, at June 30, 2026. Uninsured deposits, excluding deposits secured with pledged collateral, were $838.9 million, or 15.5% of total deposits, at June 30, 2026. At June 30, 2026, available liquidity was $1.90 billion, including $911.9 million in secured borrowing capacity at the FHLB, $25.1 million in secured borrowing capacity through the FRB Discount Window, $396.1 million in unsecured lines of credit with other correspondent banks, $314.4 million in unpledged securities and $257.7 million in cash and cash equivalents.
Total stockholders’ equity at June 30, 2026 increased $26.2 million, or 4.4%, when compared to December 31, 2025, primarily due to current year earnings, partially offset by cash dividends paid and an increase in accumulated other comprehensive losses. As of June 30, 2026 and 2025, the ratio of total equity to total assets was 10.02% and 9.36%, respectively. As of June 30, 2026, the ratio of total tangible equity to total tangible assets(1) was 8.69%, compared to 8.06% and 7.88% as of December 31, 2025 and June 30, 2025, respectively. The Company’s Tier 1 and Total Risk-Based Capital Ratios at June 30, 2026 were 11.71% and 14.17%, respectively.
(1) See the Reconciliation of GAAP and Non-GAAP Measures tables.
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Review of Quarterly Financial Results
Net interest income was $52.9 million for the second quarter of 2026, compared to $52.6 million for the first quarter of 2026 and $47.2 million for the second quarter of 2025. The slight increase in net interest income when compared to the first quarter of 2026 was primarily due to a decrease in interest expense on deposits of $1.3 million, partially offset by a decrease in interest income on deposits at other banks of $858 thousand and a decrease in interest income on loans of $358 thousand. The increase in net interest income was $5.8 million when compared to the second quarter of 2025, and was primarily due to a decrease in interest expense on deposits of $4.4 million, an increase in interest on loans of $849 thousand and a decrease in interest expense on short-term borrowings of $589 thousand. These favorable changes were partially offset by an increase in interest expense on long-term borrowings of $177 thousand. The decrease in interest expense on deposits is reflective of the rate reductions during 2026.
The Company’s NIM increased to 3.70% for the second quarter of 2026 from 3.64% for the first quarter of 2026, primarily due to lower interest expense on deposits, partially offset by lower accelerated accretion related to loan payoffs. NIM excluding accretion increased for the comparable periods from 3.35% to 3.45%. Excluding accretion interest income, loan yields decreased 1 bp and funding costs decreased 8 bps for the comparable periods. Interest expense for the second quarter of 2026 decreased $1.3 million compared to the first quarter of 2026, primarily due to lower rates during the quarter. The Company’s NIM increased to 3.70% for the second quarter of 2026 from 3.34% for the second quarter of 2025. The Company’s average interest-earning asset yield remained flat at 5.42% for the second quarter of 2026 compared to the second quarter of 2025, while the average cost of funds decreased 36 bps to 1.81% from 2.17% for the same periods.
The provision for credit losses was $896 thousand for the three months ended June 30, 2026. The comparable amounts were $85 thousand for the three months ended March 31, 2026 and $1.5 million for the three months ended June 30, 2025. The increase in the provision for credit losses for the second quarter of 2026 compared to the first quarter of 2026 was due to a higher unfunded commitments, partially offset by favorable credit outlook and lower net charge offs. Coverage ratios decreased to 1.20% at June 30, 2026 from 1.21% at March 31, 2026, and decreased compared to June 30, 2025. Net charge-offs decreased to $123 thousand for the second quarter of 2026 compared to $847 thousand for the first quarter of 2026 and $649 thousand for the second quarter of 2025. The decrease was driven by the consumer loan related write-offs during the first quarter of 2026.
Total noninterest income for the second quarter of 2026 was $8.8 million, an increase of $1.6 million from the first quarter of 2026. The increase in other noninterest income was primarily related to other fees for bank services. Total noninterest income decreased $576 thousand during the second quarter of 2026 when compared to the second quarter of 2025 due to lower mortgage related activity.
Total noninterest expense of $35.7 million for the second quarter of 2026 decreased $1.4 million compared to $37.1 million for the first quarter of 2026, and increased $1.3 million compared to $34.4 million for the second quarter of 2025. The decrease from the first quarter of 2026 was primarily due to a decrease in salaries and employee benefit expenses of $1.2 million and a decrease in professional service fees of $250 thousand. The decrease in salaries and employee benefits was primarily related to lower employee related taxes. The increase from the second quarter of 2025 was primarily due to an increase in salaries and employee benefits expense of $720 thousand and an increase in software and data processing costs of $516 thousand, partially offset by a decrease in amortization of other intangible assets of $297 thousand.
The efficiency ratio for the second quarter of 2026 when compared to the first quarter of 2026 and the second quarter of 2025 was 57.76%, 61.97% and 60.83%, respectively. Adjusted efficiency ratios – non-GAAP(1) for the same periods were 54.49%, 58.57% and 56.73%, respectively.
(1) See the Reconciliation of GAAP and Non-GAAP Measures tables.
4

Review of Six Month Financial Results
Net interest income for the six months ended June 30, 2026 was $105.5 million, an increase of $12.4 million, or 13.3%, when compared to the six months ended June 30, 2025. The increase in net interest income was primarily due to an increase in total interest income of $3.4 million, or 2.2%, which included an increase in interest on loans of $4.1 million, or 3.0%, a decrease in interest on deposits with other banks of $939 thousand, or 18.8%, and an increase in interest income on taxable investments of $169 thousand. The increase in interest on loans was primarily due to the increase in the average balance of loans of $70.6 million, or 1.5%. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $8.2 million and lower short-term borrowings of $1.2 million. These were partially offset by the increase in interest expense on long-term borrowings of $384 thousand as a result of lower FHLB borrowings and subordinated debt-related expenses that were classified as short term borrowings in 2025.
The Company’s NIM increased from 3.28% for the six months ended June 30, 2025 to 3.67% for the six months ended June 30, 2026. Margins were higher due to a $64.8 million increase in interest-earning asset balances and a 6 bp increase in interest-earning asset yields. These positive movements were coupled with a lower cost of interest-bearing deposits. The increase in the average balances of interest-bearing deposits of $4.6 million was offset by a 44 basis point decrease in the associated rates paid, as well as a $49.2 million decrease in the average balance of FHLB advances and a 99 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 27 basis points and 24 basis points for the six months ended June 30, 2026 and 2025, respectively, which resulted in NIM excluding accretion of 3.40% and 3.04% for the same periods.
The provision for credit losses for the six months ended June 30, 2026 and 2025 was $1.0 million and $2.6 million, respectively. The decrease in the provision for credit losses during 2026 was due to improved economic conditions and lower net charge-offs, partially offset by higher reserves related to growth in the loan portfolio. Net charge-offs for the six months ended June 30, 2026 were $970 thousand, compared to $1.2 million for the six months ended June 30, 2025.
Total noninterest income for the six months ended June 30, 2026 decreased $466 thousand, or 2.8%, when compared to the same period in 2025. The decrease was primarily due to an $833 thousand decrease in other noninterest income and a $615 thousand decrease in mortgage banking revenue, partially offset by a $475 thousand increase in trust and investment fee income and a $293 thousand increase in interchange credits.
Total noninterest expense for the six months ended June 30, 2026 increased $4.6 million, or 6.7%, when compared to the same period in 2025. Noninterest expense line items increased primarily due to higher salaries and employee benefit expenses of $3.9 million and a $1.0 million increase in software and data processing expense. These increases were partially offset by lower amortization of intangible assets of $595 thousand during the six months ended June 30, 2026.
The efficiency ratio for the six months ended June 30, 2026 was 59.83% compared to 62.19% for the six months ended June 30, 2025. Adjusted efficiency ratios – non-GAAP(1) for the same periods were 56.50% and 57.95%, respectively.
(1) See the Reconciliation of GAAP and Non-GAAP Measures tables.
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Shore Bancshares Information
Shore Bancshares is a financial holding company headquartered in Easton, Maryland and is the parent company of Shore United Bank, N.A. Shore Bancshares engages in trust and wealth management services through Wye Financial Partners, a division of Shore United Bank, N.A. Additional information is available at www.shorebancshares.com.
Forward-Looking Statements
This news release contains statements relating to future events or our future results that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We also may make forward-looking statements in other documents filed with or furnished to the Securities and Exchange Commission, and our senior management may make forward-looking statements orally to investors, analysts, representatives of the media, and others. Forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “intend,” “potential,” “target,” “plan,” “goal,” or words of similar meaning, or future or conditional verbs such as “could,” “would,” or “may.” Forward-looking statements include statements of our goals, intentions, or expectations; statements regarding our business plans, prospects, growth, or operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.
Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. We caution that the forward-looking statements are based largely on our expectations and information available at the time the statements are made and are subject to known and unknown risks and uncertainties that are subject to change based on factors, which in many instances are beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements. You should bear this in mind when reading this news release and not place undue reliance on these forward-looking statements.
The factors that could cause actual results to differ materially from those expressed in such forward-looking statements include, but are not limited to, the risks identified in our Annual Report on Form 10-K for the year ended December 31, 2025, and in any subsequent filings with the Securities and Exchange Commission and the following: local, regional and global business, economic and political conditions and geopolitical events; changes in laws, rules and regulatory requirements, including capital and liquidity requirements; changes in consumer and business confidence, investor sentiment, and consumer spending and savings behavior; changes in the level of inflation; changes in monetary and fiscal policies; changes in trade policies, including the imposition of tariffs and retaliatory responses; changes in the demand for loans, deposits, and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; changes in FDIC assessments; changes in the interest rate environment; changes in income tax laws and regulations; our ability to manage effectively our capital and liquidity; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; changes in credit ratings assigned to us; competitive pressures among financial services companies; technology changes instituted by us, our counterparties, or competitors; the ability to attract, develop, and retain qualified employees; change in federal government enforcement of federal laws affecting the cannabis industry; our ability to maintain the security of our financial, accounting, technology, data processing and other operational systems and facilities; our ability to effectively defend ourselves against cyber-attacks and other attempts by unauthorized parties to access our information or information of our customers or to disrupt our systems; our ability to withstand disruptions that may be caused by any failure of our operational systems or those of third parties; our ability to control expenses; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; and the impact of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, epidemics or pandemics, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond our control.
Forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
For further information contact: Charles S. Cullum, Executive Vice President, and Chief Financial Officer, (410) 260-2042
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Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited)
Q2 2026 vs. Q2 2026 vs. Six Months Ended June 30,
($ in thousands, except per share data) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2026 Q2 2025 2026 2025 2026 vs. 2025
PROFITABILITY FOR THE PERIOD
Taxable-equivalent net interest income $ 53,005 $ 52,644 $ 50,294 $ 48,501 $ 47,244 0.7  % 12.2  % $ 105,649 $ 93,222 13.3  %
Less: Taxable-equivalent adjustment 86 89 92 83 81 (3.4) 6.2  175 161 8.7 
Net interest income 52,919 52,555 50,202 48,418 47,163 0.7  12.2  105,474 93,061 13.3 
Provision for credit losses 896 85 2,827 2,992 1,528 954.1  (41.4) 981 2,556 (61.6)
Noninterest income 8,830 7,244 8,906 7,938 9,406 21.9  (6.1) 16,074 16,540 (2.8)
Noninterest expense 35,668 37,056 35,499 34,379 34,410 (3.7) 3.7  72,724 68,157 6.7 
Income before income taxes 25,185 22,658 20,782 18,985 20,631 11.2  22.1  47,843 38,888 23.0 
Income tax expense 6,320 5,570 4,895 4,637 5,124 13.5  23.3  11,890 9,617 23.6 
NET INCOME $ 18,865 $ 17,088 $ 15,887 $ 14,348 $ 15,507 10.4  21.7  $ 35,953 $ 29,271 22.8 
Adjusted net income – non-GAAP(1)
$ 20,344  $ 18,581  $ 17,416  $ 15,889  $ 17,215  9.5  % 18.2  % $ 38,925  $ 32,696  19.1  %
Pre-tax pre-provision net income – non-GAAP(1)
26,081  22,743  23,609  21,977  22,159  14.7  17.7  48,824  41,444  17.8 
Return on average assets – GAAP 1.24% 1.12% 1.02% 0.95% 1.03% 12  bp 21  bp 1.18% 0.97% 21  bp
Adjusted return on average assets – non-GAAP 1.34 1.22 1.11 1.05 1.15 12  19  1.28 1.09 19 
Return on average common equity – GAAP 12.38 11.55 10.79 9.96 11.13 83  125  11.97 10.67 130 
Return on average tangible common equity – non-GAAP(1)
15.66 14.83 14.10 13.27 14.99 83  67  15.25 14.53 72 
Net interest spread 2.85 2.80 2.48 2.45 2.37 5  48  2.82 2.32 50 
Net interest margin 3.70 3.64 3.43 3.41 3.34 6  36  3.67 3.28 39 
Efficiency ratio – GAAP 57.76 61.97 60.06 61.00 60.83 (421) (307) 59.83 62.19 (236)
Adjusted efficiency ratio – non-GAAP(1)
54.49 58.57 56.59 57.30 56.73 (408) (224) 56.50 57.95 (145)
Noninterest income to average assets 0.58 0.48 0.57 0.52 0.63 10  (5) 0.53 0.55 (2)
Noninterest expense to average assets 2.35 2.43 2.27 2.27 2.29 (8) 6  2.39 2.26 13 
PER SHARE DATA
Basic net income per common share $ 0.56 $ 0.51 $ 0.48 $ 0.43 $ 0.46 9.8  % 21.7  % $ 1.08 $ 0.88 22.7  %
Diluted net income per common share 0.56 0.51 0.48 0.43 0.46 9.8  21.7  1.07 0.88 21.6 
Dividends paid per common share 0.14 0.12 0.12 0.12 0.12 16.7  16.7  0.26 0.24 8.3 
Book value per common share at period end 18.44 18.02 17.65 17.27 16.94 2.3  8.9  18.44 16.94 8.9 
Tangible book value per common share at period end – non-GAAP(1)
15.77 15.30 14.87 14.43 14.03 3.1  12.4  15.77 14.03 12.4 
Common share market value at period end 22.95 18.68 17.68 16.41 15.72 22.9  46.0  22.95 15.72 46.0 
Common share intraday price:
High $ 23.45 $ 20.68 $ 19.22 $ 17.67 $ 15.88 13.4  % 47.7  % $ 23.45 $ 17.24 36.0  %
Low 17.91 17.25 14.93 14.96 11.47 3.8  56.1  17.25 11.47 50.4 
____________________________________
(1)See the Reconciliation of GAAP and Non-GAAP Measures tables.
7

Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited) – Continued
Q2 2026 vs. Q2 2026 vs. Six Months Ended June 30,
($ in thousands, except per share data) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2026 Q2 2025 2026 2025 2026 vs. 2025
AVERAGE BALANCE SHEET DATA
Loans $ 4,872,566 $ 4,887,488 $ 4,909,619 $ 4,884,003 $ 4,833,558 (0.3) % 0.8  % $ 4,879,986  $ 4,809,409  1.5  %
Investment securities 684,762 666,376 653,639 664,535 683,680 2.8  0.2  675,620  674,220  0.2 
Earning assets 5,731,054 5,823,244 5,843,816 5,658,981 5,660,409 (1.6) 1.2  5,776,894  5,712,117  1.1 
Assets 6,080,508 6,174,655 6,206,753 6,020,574 6,021,385 (1.5) 1.0  6,127,321  6,075,339  0.9 
Deposits 5,332,544 5,438,914 5,452,082 5,280,252 5,297,567 (2.0) 0.7  5,385,435  5,357,545  0.5 
FHLB advances 1,648 — 20,108 52,391 50,000 —  (96.7) 829  50,000  (98.3)
Subordinated debt & TRUPS 89,082 89,024 104,752 74,363 74,102 0.1  20.2  89,053  73,971  20.4 
Stockholders’ equity 611,320 600,212 584,209 571,247 558,952 1.9  9.4  605,797  553,229  9.5 
CREDIT QUALITY DATA
Net charge-offs $ 123 $ 847 $ 3,619 $ 1,825 $ 649 (85.5) % (81.0) % $ 970  $ 1,203  (19.4) %
Nonaccrual loans $ 64,818 $ 64,958 $ 39,960 $ 24,378 $ 16,782 (0.2) % 286.2  %
Loans 90 days past due and still accruing 20 — 255 153 215 —  (90.7)
Other real estate owned and repossessed property 2,362 3,414 2,992 3,552 2,636 (30.8) (10.4)
Total nonperforming assets $ 67,200 $ 68,372 $ 43,207 $ 28,083 $ 19,633 (1.7) 242.3 

8

Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited) – Continued
Q2 2026 vs. Q2 2026 vs. Six Months Ended June 30,
($ in thousands, except per share data) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2026 Q2 2025 2026 2025 2026 vs 2025
CAPITAL AND CREDIT QUALITY RATIOS
Period-end equity to assets – GAAP 10.02  % 9.71  % 9.42  % 9.19  % 9.36  % 31  bp 66  bp
Period-end tangible equity to tangible assets – non-GAAP(1)
8.69  8.37  8.06  7.80  7.88  32  81 
Annualized net charge-offs to average loans 0.01  % 0.07  % 0.29  % 0.15  % 0.05  % (6) bp (4) bp 0.04  % 0.05  % (1) bp
Allowance for credit losses as a percent of:
Period-end loans 1.20  % 1.21  % 1.20  % 1.22  % 1.21  % (1) bp (1) bp
Period-end nonaccrual loans 90.62  90.03  147.24  244.29  348.49  59  (25,787)
Period-end nonperforming assets 87.41  85.53  136.17  212.06  297.88  188  (21,047)
As a percent of total loans at period-end:
Nonaccrual loans 1.33  % 1.34  % 0.82  % 0.50  % 0.35  % (1) bp 98  bp
As a percent of total loans, other real estate owned and repossessed property at period-end:
Nonperforming assets 1.38  % 1.41  % 0.88  % 0.57  % 0.41  % (3) bp 97  bp
As a percent of total assets at period-end:
Nonaccrual loans 1.05  % 1.05  % 0.64  % 0.39  % 0.28  % —  bp 77  bp
Nonperforming assets 1.09  1.10  0.69  0.45  0.33  (1) 76 
____________________________________
(1)See the Reconciliation of GAAP and Non-GAAP Measures tables.

9

Shore Bancshares, Inc.
Financial Highlights By Quarter (Unaudited) – Continued

Q2 2026 vs. Q2 2026 vs.
($ in thousands) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2026 Q2 2025
Company Amounts
Common Equity Tier 1 Capital $ 541,577  $ 525,849  $ 510,729  $ 496,709  $ 483,947 2.99  % 11.91  %
Tier 1 Capital 571,904  556,096  540,897  526,794  513,952 2.84  11.28 
Total Capital 691,720  674,811  660,451  627,055  618,793 2.51  11.79 
Risk-Weighted Assets 4,882,618  4,794,374  4,852,573  4,867,237  4,890,679 1.84  (0.16)
Company Ratios
Common Equity Tier 1 Capital to Risk-Weighted Assets (“RWA”) 11.09  % 10.97  % 10.52  % 10.21  % 9.90  % 12  bp 119  bp
Tier 1 Capital to RWA 11.71  11.60  11.15  10.82  10.51  11  120 
Total Capital to RWA 14.17  14.08  13.61  12.88  12.65  9  152 
Tier 1 Capital to AA (Leverage) 9.52  9.12  8.82  8.86  8.65  40  87 
Bank Amounts
Common Equity Tier 1 Capital $ 600,541  $ 583,733  $ 569,183  $ 559,212  $ 546,630  2.88  % 9.86  %
Tier 1 Capital 600,541  583,733  569,183  559,212  546,630  2.88  9.86 
Total Capital 661,531  643,627  629,746  620,034  607,235  2.78  8.94 
Risk-Weighted Assets 4,879,247  4,791,223  4,844,639  4,864,871  4,888,558  1.84  (0.19)
Bank Ratios
Common Equity Tier 1 Capital to RWA 12.31  % 12.18  % 11.75  % 11.49  % 11.18  % 13  bp 113  bp
Tier 1 Capital to RWA 12.31  12.18  11.75  11.49  11.18  13  113 
Total Capital to RWA 13.56  13.43  13.00  12.75  12.42  13  114 
Tier 1 Capital to AA (Leverage) 10.00  9.58  9.30  9.41  9.20  42  80 
10

Shore Bancshares, Inc.
Consolidated Balance Sheets
June 30, 2026 June 30, 2026
compared to compared to
($ in thousands, except per share data) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2026 June 30, 2025
(unaudited) (unaudited) (unaudited) (unaudited)
ASSETS
Cash and due from banks $ 53,335  $ 44,054  $ 50,164  $ 62,289  $ 54,512  21.1  % (2.2) %
Interest-bearing deposits with other banks 204,335  296,768  305,402  354,224  130,472  (31.1) 56.6 
Cash and cash equivalents 257,670  340,822  355,566  416,513  184,984  (24.4) 39.3 
Investment securities:
Available for sale, at fair value 287,369  264,026  220,358  181,720  187,679  8.8  53.1 
Held to maturity, net of allowance for credit losses 366,213  393,615  414,827  433,440  459,246  (7.0) (20.3)
Equity securities, at fair value 6,218  6,195  6,186  6,113  6,010  0.4  3.5 
Restricted securities, at cost 18,003  18,003  17,989  20,364  20,412  —  (11.8)
Loans held for sale, at fair value 30,827  24,034  32,540  21,500  34,319  28.3 (10.2)
Loans held for investment 4,877,749  4,848,030  4,900,302  4,882,969  4,827,628  0.6  1.0 
Less: allowance for credit losses (58,737) (58,481) (58,836) (59,554) (58,483) 0.4  0.4 
Loans, net 4,819,012  4,789,549  4,841,466  4,823,415  4,769,145  0.6  1.0 
Premises and equipment, net 79,580  80,137  80,168  80,812  81,426  (0.7) (2.3)
Goodwill 63,266  63,266  63,266  63,266  63,266  —  — 
Other intangible assets, net 25,767  27,742  29,722  31,722  33,761  (7.1) (23.7)
Right-of-use assets 9,691  10,102  10,523  10,896  11,052  (4.1) (12.3)
Cash surrender value on life insurance 107,724  106,684  105,839  105,055  105,860  1.0  1.8 
Accrued interest receivable 20,021  20,676  18,551  20,408  19,821  (3.2) 1.0 
Deferred income taxes 30,657  29,752  29,825  30,328  30,972  3.0  (1.0)
Other assets 29,413  31,460  31,992  32,927  29,921  (6.5) (1.7)
TOTAL ASSETS $ 6,151,431  $ 6,206,063  $ 6,258,818  $ 6,278,479  $ 6,037,874  (0.9) 1.9 

11

Shore Bancshares, Inc.
Consolidated Balance Sheets – Continued
June 30, 2026 June 30, 2026
compared to compared to
($ in thousands, except per share data) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2026 June 30, 2025
(unaudited) (unaudited) (unaudited) (unaudited)
LIABILITIES
Deposits:
Noninterest-bearing $ 1,606,809  $ 1,567,425  $ 1,587,953  $ 1,594,212  $ 1,575,120  2.5  % 2.0  %
Interest-bearing checking 833,602  812,847  852,585  851,963  763,309  2.6  9.2 
Money market and savings 1,710,570  1,795,619  1,814,928  1,790,001  1,691,438  (4.7) 1.1 
Time deposits 1,247,973  1,274,766  1,267,487  1,281,132  1,273,285  (2.1) (2.0)
Brokered deposits 796  10,963  10,911  10,857  10,806  (92.7) (92.6)
Total deposits 5,399,750  5,461,620  5,533,864  5,528,165  5,313,958  (1.1) 1.6 
FHLB advances —  —  —  50,000  50,000  —  (100.0)
Guaranteed preferred beneficial interest in junior subordinated debentures (“TRUPS”), net 30,327  30,247  30,168  30,085  30,005  0.3  1.1 
Subordinated debt, net 58,825  58,782  58,893  44,409  44,236  0.1  33.0 
Total borrowings 89,152  89,029  89,061  124,494  124,241  0.1  (28.2)
Lease liabilities 10,199  10,608  11,027  11,395  11,541  (3.9) (11.6)
Other liabilities 36,255  42,092  34,993  37,218  22,940  (13.9) 58.0 
TOTAL LIABILITIES 5,535,356  5,603,349  5,668,945  5,701,272  5,472,680  (1.2) 1.1 
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value per share 334  335  334  334  334  (0.3) — 
Additional paid-in capital 361,048  361,013  360,554  359,939  359,063  —  0.6 
Retained earnings 260,782  246,636  233,578  221,693  211,400  5.7  23.4 
Accumulated other comprehensive loss (6,089) (5,270) (4,593) (4,759) (5,603) 15.5  8.7 
TOTAL STOCKHOLDERS’ EQUITY 616,075  602,714  589,873  577,207  565,194  2.2  9.0 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 6,151,431  $ 6,206,063  $ 6,258,818  $ 6,278,479  $ 6,037,874  (0.9) 1.9 
Shares of common stock issued and outstanding 33,416,336 33,451,063 33,413,503 33,421,672 33,374,265 (0.1) % 0.1  %
Book value per common share at period end $ 18.44  $ 18.02  $ 17.65  $ 17.27  $ 16.94  2.3  8.9 
12

Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter (Unaudited)
Q2 2026 vs. Q2 2026 vs. Six Months Ended June 30,
($ in thousands, except per share data) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2026 Q2 2025 2026 2025 % Change
INTEREST INCOME
Interest on loans $ 70,456 $ 70,814 $ 72,092 $ 70,693 $ 69,607 (0.5) % 1.2  % $ 141,270 $ 137,123 3.0  %
Interest and dividends on taxable investment securities 5,387 5,114 5,010 5,036 5,331 5.3  1.1  10,501 10,332 1.6 
Interest and dividends on tax-exempt investment securities 6 6 6 6 6 —  —  12 12 — 
Interest on deposits with other banks 1,600 2,458 2,810 1,215 1,588 (34.9) 0.8  4,058 4,997 (18.8)
Total interest income 77,449 78,392 79,918 76,950 76,532 (1.2) 1.2  155,841 152,464 2.2 
INTEREST EXPENSE
Interest on deposits 22,943 24,264 27,289 26,474 27,370 (5.4) (16.2) 47,207 55,440 (14.9)
Interest on short-term borrowings 16 — 246 640 605 —  (97.4) 16 1,203 (98.7)
Interest on long-term borrowings 1,571 1,573 2,181 1,418 1,394 (0.1) 12.7  3,144 2,760 13.9 
Total interest expense 24,530 25,837 29,716 28,532 29,369 (5.1) (16.5) 50,367 59,403 (15.2)
NET INTEREST INCOME 52,919 52,555 50,202 48,418 47,163 0.7  12.2  105,474 93,061 13.3 
Provision for credit losses 896 85 2,827 2,992 1,528 954.1  (41.4) 981 2,556 (61.6)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 52,023 52,470 47,375 45,426 45,635 (0.9) 14.0  104,493 90,505 15.5 
NONINTEREST INCOME
Service charges on deposit accounts 1,651 1,596 1,663 1,599 1,519 3.4  8.7  3,247 3,033 7.1 
Trust and investment fee income 1,103 1,137 1,042 898 942 (3.0) 17.1  2,240 1,765 26.9 
Mortgage banking revenue 1,554 1,450 1,181 1,278 2,379 7.2  (34.7) 3,004 3,619 (17.0)
Interchange credits 1,960 1,698 1,862 1,858 1,788 15.4  9.6  3,658 3,365 8.7 
Other noninterest income 2,562 1,363 3,158 2,305 2,778 88.0  (7.8) 3,925 4,758 (17.5)
Total noninterest income $ 8,830 $ 7,244 $ 8,906 $ 7,938 $ 9,406 21.9  (6.1) $ 16,074 $ 16,540 (2.8)

13

Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter and Year (Unaudited) – Continued
Q2 2026 vs. Q2 2026 vs. Six Months Ended June 30,
($ in thousands, except per share data) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2026 Q2 2025 2026 2025 % Change
NONINTEREST EXPENSE
Salaries and employee benefits $ 18,462 $ 19,639 $ 18,582 $ 18,642 $ 17,742 (6.0) % 4.1  % $ 38,101 $ 34,182 11.5  %
Occupancy expense 2,495 2,567 2,461 2,406 2,472 (2.8) 0.9  5,062 5,010 1.0 
Furniture and equipment expense 966 855 792 892 797 13.0  21.2  1,821 1,650 10.4 
Software and data processing 5,335 5,140 5,197 5,155 4,819 3.8  10.7  10,475 9,510 10.1 
Amortization of other intangible assets 1,975 1,980 2,000 2,039 2,272 (0.3) (13.1) 3,955 4,550 (13.1)
Legal and professional fees 1,355 1,605 1,237 989 1,225 (15.6) 10.6  2,960 2,838 4.3 
FDIC insurance premium expense 968 995 845 794 1,023 (2.7) (5.4) 1,963 2,114 (7.1)
Marketing and advertising 275 311 367 315 384 (11.6) (28.4) 586 638 (8.2)
Fraud losses 147 111 227 45 83 32.4  77.1  258 188 37.2 
Other noninterest expense 3,690 3,853 3,791 3,102 3,593 (4.2) 2.7  7,543 7,477 0.9 
Total noninterest expense 35,668 37,056 35,499 34,379 34,410 (3.7) 3.7  72,724 68,157 6.7 
Income before income taxes 25,185 22,658 20,782 18,985 20,631 11.2  22.1  47,843 38,888 23.0 
Income tax expense 6,320 5,570 4,895 4,637 5,124 13.5  23.3  11,890 9,617 23.6 
NET INCOME $ 18,865 $ 17,088 $ 15,887 $ 14,348 $ 15,507 10.4  21.7  $ 35,953 $ 29,271 22.8 
Weighted average shares outstanding – basic 33,451,484 33,428,444 33,426,198 33,419,291 33,374,265 0.1  % 0.2  % 33,440,028 33,362,632 0.2  %
Weighted average shares outstanding – diluted 33,478,698 33,447,767 33,446,103 33,435,862 33,388,013 0.1  % 0.3  % 33,462,937 33,377,165 0.3  %
Basic net income per common share $ 0.56 $ 0.51 $ 0.48 $ 0.43 $ 0.46 9.8  % 21.7  % $ 1.08 $ 0.88 22.7  %
Diluted net income per common share $ 0.56 $ 0.51 $ 0.48 $ 0.43 $ 0.46 9.8  % 21.7  % $ 1.07 $ 0.88 21.6  %
Dividends paid per common share $ 0.14 $ 0.12 $ 0.12 $ 0.12 $ 0.12 16.7  % 16.7  % $ 0.26 $ 0.24 8.3  %
14

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited)
Three Months Ended
June 30, 2026 March 31, 2026 June 30, 2025
($ in thousands) Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate
Earning assets
Loans(1), (2), (3)
Commercial real estate $ 2,586,937  $ 38,169  5.92  % $ 2,601,316  $ 39,029  6.08  % $ 2,572,931  $ 37,240  5.81  %
Residential real estate 1,484,165  20,276  5.46  1,450,114  19,311  5.33  1,378,940  18,959  5.50 
Construction 338,695  5,454  6.46  347,973  5,631  6.56  352,803  5,697  6.48 
Commercial 208,349  3,041  5.85  221,542  3,296  6.03  224,218  3,654  6.54 
Consumer 250,295  3,491  5.59  262,174  3,534  5.47  298,544  4,018  5.40 
Credit cards 4,125  110  10.69  4,369  100  9.29  6,122  117  7.66 
Total loans 4,872,566  70,541  5.80  4,887,488  70,901  5.86  4,833,558  69,685  5.78 
Investment securities
Taxable 684,116  5,387  3.15  665,729  5,114  3.07  683,028  5,331  3.12 
Tax-exempt(1)
646  7  4.33  647  8  4.95  652  8  4.91 
Interest-bearing deposits 173,726  1,600  3.69  269,380  2,458  3.70  143,171  1,588  4.45 
Total earning assets 5,731,054  77,535  5.42  5,823,244  78,481  5.44  5,660,409  76,612  5.42 
Cash and due from banks 43,885  44,182  46,620 
Other assets 364,155  365,971  372,725 
Allowance for credit losses (58,586) (58,742) (58,369)
Total assets $ 6,080,508  $ 6,174,655  $ 6,021,385 
15

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Three Months Ended
June 30, 2026 March 31, 2026 June 30, 2025
($ in thousands) Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate
Interest-bearing liabilities
Interest-bearing checking $ 733,877 $ 4,560 2.49  % $ 780,713 $ 4,840 2.51  % $ 720,967 $ 5,697 3.17  %
Money market and savings deposits 1,744,356 8,079 1.86  1,812,071 8,696 1.95  1,747,854 9,580 2.20 
Time deposits 1,258,086 10,288 3.28  1,270,156 10,624 3.39  1,258,802 12,000 3.82 
Brokered deposits 4,033 16 1.59  11,107 104 3.80  9,720 92 3.80 
Interest-bearing deposits(4)
3,740,352 22,943 2.46  3,874,047 24,264 2.54  3,737,343 27,369 2.94 
FHLB advances 1,648 16 3.88  — — —  50,000 605 4.85 
Subordinated debt and guaranteed preferred beneficial interest in junior subordinated debentures (“TRUPS”)(4)
89,082 1,571 7.07  89,024 1,573 7.17  74,102 1,394 7.55 
Total interest-bearing liabilities 3,831,082 24,530 2.57  3,963,071 25,837 2.64  3,861,445 29,368 3.05 
Noninterest-bearing deposits 1,592,192 1,564,867 1,560,224
Accrued expenses and other liabilities 45,914 46,505 40,764
Stockholders’ equity 611,320 600,212 558,952
Total liabilities and stockholders’ equity $ 6,080,508 $ 6,174,655 $ 6,021,385
Net interest spread 2.85  % 2.80  % 2.37  %
Net interest margin 3.70  3.64  3.34 
Net interest margin excluding accretion(3)
3.45  3.35  3.09 
Cost of funds 1.81  1.90  2.17 
Cost of deposits 1.73  1.81  2.07 
Cost of debt 7.02  7.17  6.46 
____________________________________
(1) All amounts are reported on a tax-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of nondeductible interest expense.
(2) Average loan balances include nonaccrual loans.
(3) Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $3.8 million, $4.3 million and $4.2 million of accretion interest on loans for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively.
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were zero, zero and $435 thousand of amortization of deposit discounts and $79 thousand, $79 thousand and $232 thousand of amortization of borrowing fair value adjustments for the three months ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.
16

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Six Months Ended June 30,
2026 2025
($ in thousands) Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate
Earning assets
Loans(1), (2), (3)
Commercial real estate $ 2,594,087  $ 77,198  6.00  % $ 2,557,316  $ 73,066  5.76  %
Residential real estate 1,467,234  39,587  5.40  1,363,076  37,391  5.49 
Construction 343,308  11,085  6.51  352,564  11,222  6.42 
Commercial 214,909  6,337  5.95  228,535  7,349  6.48 
Consumer 256,202  7,025  5.53  301,515  8,059  5.39 
Credit cards 4,246  210  9.96  6,403  194  6.11 
Total loans 4,879,986  141,442  5.83  4,809,409  137,281  5.74 
Investment securities
Taxable 674,973  10,501  3.11  673,567  10,332  3.07 
Tax-exempt(1)
647  15  4.64  653  15  4.59 
Interest-bearing deposits 221,288  4,058  3.70  228,488  4,997  4.41 
Total earning assets 5,776,894  156,016  5.43  5,712,117  152,625  5.37 
Cash and due from banks 44,033  46,912 
Other assets 365,058  374,641 
Allowance for credit losses (58,664) (58,331)
Total assets $ 6,127,321  $ 6,075,339 

17

Shore Bancshares, Inc.
Consolidated Average Balance Sheets (Unaudited) – Continued
Six Months Ended June 30,
2026 2025
($ in thousands) Average Balance Interest Yield/Rate Average Balance Interest Yield/Rate
Interest-bearing liabilities
Interest-bearing checking $ 757,165 $ 9,400  2.50  % $ 789,949 $ 12,722  3.25  %
Money market and savings deposits 1,778,027 16,775  1.90  1,773,637 19,595  2.23 
Time deposits 1,264,087 20,912  3.34  1,233,666 23,031  3.76 
Brokered deposits 7,461 120  3.24  4,888 92  3.81 
Interest-bearing deposits(4)
3,806,740 47,207  2.50  3,802,140 55,440  2.94 
FHLB advances 829 16  3.86  50,000 1,203  4.85 
Subordinated debt and TRUPS(4)
89,053 3,144  7.12  73,971 2,760  7.52 
Total interest-bearing liabilities 3,896,622 50,367  2.61  3,926,111 59,403  3.05 
Noninterest-bearing deposits 1,578,695 1,555,405
Accrued expenses and other liabilities 46,207 40,594
Stockholders’ equity 605,797  553,229 
Total liabilities and stockholders’ equity $ 6,127,321  $ 6,075,339 
Net interest spread 2.82  % 2.32  %
Net interest margin 3.67  3.28 
Net interest margin excluding accretion(3)
3.40  3.04 
Cost of funds 1.86  2.19 
Cost of deposits 1.77  2.09 
Cost of debt 7.09  6.45 
____________________________________
(1) All amounts are reported on a taxable-equivalent basis computed using the statutory federal income tax rate of 21.0%, exclusive of nondeductible interest expense.
(2) Average loan balances include nonaccrual loans.
(3) Interest income on loans includes accreted loan fees, net of costs and accretion of discounts on acquired loans, which are included in the yield calculations. There were $8.1 million and $8.0 million of accretion interest on loans for the six months ended June 30, 2026 and 2025, respectively.
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were zero and $769 thousand of amortization of deposit discounts and $159 thousand and $463 thousand of amortization of borrowing fair value adjustments for the six months ended June 30, 2026 and 2025, respectively. All deposit discounts have been fully amortized as of December 31, 2025.
18

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands, except per share data)
 Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 6/30/2026 6/30/2025
The following reconciles return on average assets, average equity and return on average tangible common equity(1):
Net income $ 18,865  $ 17,088  $ 15,887  $ 14,348  $ 15,507  $ 35,953  $ 29,271 
Annualized net income (A) $ 75,667  $ 69,301  $ 63,030  $ 56,924  $ 62,198  $ 72,502  $ 59,027 
Net income $ 18,865  $ 17,088  $ 15,887  $ 14,348  $ 15,507  $ 35,953  $ 29,271 
Add: amortization of other intangible assets, net of tax 1,479  1,493  1,529  1,541  1,708  2,972  3,425 
Net income excluding amortization of other intangible assets – non-GAAP 20,344  18,581  17,416  15,889  17,215  38,925  32,696 
Annualized net income excluding amortization of other intangible assets – non-GAAP (B) $ 81,600  $ 75,356  $ 69,096  $ 63,038  $ 69,049  $ 78,495  $ 65,934 
Net income $ 18,865  $ 17,088  $ 15,887  $ 14,348  $ 15,507  $ 35,953  $ 29,271 
Add: amortization of other intangible assets, net of tax 1,479  1,493  1,529  1,541  1,708  2,972  3,425 
Adjusted net income – non-GAAP 20,344  18,581  17,416  15,889  17,215  38,925  32,696 
Annualized adjusted net income – non-GAAP (C) $ 81,600  $ 75,356  $ 69,096  $ 63,038  $ 69,049  $ 78,495  $ 65,934 
Net income $ 18,865  $ 17,088  $ 15,887  $ 14,348  $ 15,507  $ 35,953  $ 29,271 
Less: income tax expense 6,320  5,570  4,895  4,637  5,124  11,890  9,617 
Less: provision for credit losses 896  85  2,827  2,992  1,528  981  2,556 
Pre-tax pre-provision net income – non-GAAP $ 26,081  $ 22,743  $ 23,609  $ 21,977  $ 22,159  $ 48,824  $ 41,444 
Return on average assets – GAAP 1.24  % 1.12  % 1.02  % 0.95  % 1.03  % 1.18  % 0.97  %
Adjusted return on average assets – non-GAAP 1.34  % 1.22  % 1.11  % 1.05  % 1.15  % 1.28  % 1.09  %
Average assets $ 6,080,508  $ 6,174,655  $ 6,206,753  $ 6,020,574  $ 6,021,385  $ 6,127,321  $ 6,075,339 
Average stockholders’ equity (D) $ 611,320  $ 600,212  $ 584,209  $ 571,247  $ 558,952  $ 605,797  $ 553,229 
Less: average goodwill and core deposit intangible (90,088) (92,086) (94,059) (96,074) (98,241) (91,082) (99,372)
Average tangible common equity (E) $ 521,232  $ 508,126  $ 490,150  $ 475,173  $ 460,711  $ 514,715  $ 453,857 
Return on average common equity – GAAP (A)/(D) 12.38  % 11.55  % 10.79  % 9.96  % 11.13  % 11.97  % 10.67  %
Return on average tangible common equity – non-GAAP (B)/(E) 15.66  % 14.83  % 14.10  % 13.27  % 14.99  % 15.25  % 14.53  %
19

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Three Months Ended June 30, Six Months Ended June 30,
($ in thousands, except per share data)
 Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 6/30/2026 6/30/2025
The following reconciles efficiency ratio – GAAP and adjusted efficiency ratio – non-GAAP(2):
Noninterest expense (F) $ 35,668  $ 37,056  $ 35,499  $ 34,379  $ 34,410  $ 72,724  $ 68,157 
Less: amortization of other intangible assets (1,975) (1,980) (2,000) (2,039) (2,272) (3,955) (4,550)
Adjusted noninterest expense (G) $ 33,693  $ 35,076  $ 33,499  $ 32,340  $ 32,138  $ 68,769  $ 63,607 
Net interest income (H) $ 52,919  $ 52,555  $ 50,202  $ 48,418  $ 47,163  $ 105,474  $ 93,061 
Add: taxable-equivalent adjustment 86  89  92  83  81  175  161 
Taxable-equivalent net interest income (I) $ 53,005  $ 52,644  $ 50,294  $ 48,501  $ 47,244  $ 105,649  $ 93,222 
Noninterest income (J) $ 8,830  $ 7,244  $ 8,906  $ 7,938  $ 9,406  $ 16,074  $ 16,540 
Adjusted noninterest income (K) $ 8,830  $ 7,244  $ 8,906  $ 7,938  $ 9,406  $ 16,074  $ 16,540 
Efficiency ratio – GAAP (F)/(H)+(J) 57.76  % 61.97  % 60.06  % 61.00  % 60.83  % 59.83  % 62.19  %
Adjusted efficiency ratio – non-GAAP (G)/(I)+(K) 54.49  % 58.57  % 56.59  % 57.30  % 56.73  % 56.50  % 57.95  %
20

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
($ in thousands, except per share data) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025
The following reconciles book value per common share and tangible book value per common share(1):
Stockholders’ equity (L) $ 616,075  $ 602,714  $ 589,873  $ 577,207  $ 565,194 
Less: goodwill and core deposit intangible (89,033) (91,008) (92,988) (94,988) (97,027)
Tangible common equity (M) $ 527,042  $ 511,706  $ 496,885  $ 482,219  $ 468,167 
Shares of common stock outstanding (N) 33,416,336 33,451,063 33,413,503 33,421,672 33,374,265
Book value per common share – GAAP (L)/(N) $ 18.44 $ 18.02 $ 17.65 $ 17.27 $ 16.94
Tangible book value per common share – non-GAAP (M)/(N) $ 15.77 $ 15.30 $ 14.87 $ 14.43 $ 14.03
The following reconciles equity to assets and tangible common equity to tangible assets(1):
Stockholders’ equity (O) $ 616,075 $ 602,714 $ 589,873 $ 577,207 $ 565,194
Less: goodwill and core deposit intangible (89,033) (91,008) (92,988) (94,988) (97,027)
Tangible common equity (P) $ 527,042 $ 511,706 $ 496,885 $ 482,219 $ 468,167
Assets (Q) $ 6,151,431 $ 6,206,063 $ 6,258,818 $ 6,278,479 $ 6,037,874
Less: goodwill and core deposit intangible (89,033) (91,008) (92,988) (94,988) (97,027)
Tangible assets (R) $ 6,062,398 $ 6,115,055 $ 6,165,830 $ 6,183,491 $ 5,940,847
Period-end equity to assets – GAAP (O)/(Q) 10.02% 9.71% 9.42% 9.19% 9.36%
Period-end tangible common equity to tangible assets – non-GAAP (P)/(R) 8.69% 8.37% 8.06% 7.80% 7.88%
____________________________________
(1) Management believes that reporting the non-GAAP measures of tangible common equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes.
(2) Management believes that reporting the adjusted efficiency ratio – non-GAAP more closely measures its effectiveness of controlling cash-based operating activities.
21

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Regulatory Capital and Ratios for the Company
($ in thousands) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025
Common equity $ 616,075  $ 602,714  $ 589,873  $ 577,207  $ 565,194 
Goodwill(1)
(61,000) (61,061) (61,123) (61,176) (61,238)
Core deposit intangible(2)
(19,587) (21,074) (22,566) (24,041) (25,573)
DTAs that arise from net operating loss and tax credit carryforwards —  —  (48) (40) (39)
Accumulated other comprehensive loss 6,089  5,270  4,593  4,759  5,603 
Common Equity Tier 1 Capital 541,577  525,849  510,729  496,709  483,947 
TRUPS 30,327  30,247  30,168  30,085  30,005 
Tier 1 Capital 571,904  556,096  540,897  526,794  513,952 
Allowable reserve for credit losses and other Tier 2 adjustments 60,991  59,933  60,661  60,852  60,605 
Subordinated debt 58,825  58,782  58,893  39,409  44,236 
Total Capital $ 691,720  $ 674,811  $ 660,451  $ 627,055  $ 618,793 
Risk-Weighted Assets (“RWA”)
 $ 4,882,618  $ 4,794,374  $ 4,852,573  $ 4,867,237  $ 4,890,679 
Average Assets (“AA”)
 6,007,717  6,098,196  6,129,306  5,942,911  5,943,124 
Common Equity Tier 1 Capital to RWA 11.09  % 10.97  % 10.52  % 10.21  % 9.90  %
Tier 1 Capital to RWA 11.71  11.60  11.15  10.82  10.51 
Total Capital to RWA 14.17  14.08  13.61  12.88  12.65 
Tier 1 Capital to AA (Leverage) 9.52  9.12  8.82  8.86  8.65 

22

Shore Bancshares, Inc.
Reconciliation of GAAP and Non-GAAP Measures (Unaudited) – Continued
Regulatory Capital and Ratios for the Bank
($ in thousands) Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025
Common equity $ 675,039  $ 660,598  $ 648,279  $ 639,670  $ 627,838 
Goodwill(1)
(61,000) (61,061) (61,123) (61,176) (61,238)
Core deposit intangible(2)
(19,587) (21,074) (22,566) (24,041) (25,573)
Accumulated other comprehensive loss 6,089  5,270  4,593  4,759  5,603 
Common Equity Tier 1 Capital 600,541  583,733  569,183  559,212  546,630 
Tier 1 Capital 600,541  583,733  569,183  559,212  546,630 
Allowable reserve for credit losses and other Tier 2 adjustments 60,990  59,894  60,563  60,822  60,605 
Total Capital $ 661,531  $ 643,627  $ 629,746  $ 620,034  $ 607,235 
Risk-Weighted Assets (“RWA”)
 $ 4,879,247  $ 4,791,223  $ 4,844,639  $ 4,864,871  $ 4,888,558 
Average Assets (“AA”)
 6,002,596  6,093,905  6,122,775  5,939,890  5,940,411 
___________________________________
(1)Goodwill is net of deferred tax liability.
(2)Core deposit intangible is net of deferred tax liability.
23

Shore Bancshares, Inc.
Summary of Loan Portfolio (Unaudited)
Portfolio loans are summarized by loan type as follows:
($ in thousands) June 30, 2026 % of Total Loans March 31, 2026 % of Total Loans December 31, 2025 % of Total Loans September 30, 2025 % of Total Loans June 30, 2025 % of Total Loans
Commercial real estate $ 2,603,014  53.37  % $ 2,599,815  53.62  % $ 2,643,996  53.95  % $ 2,642,601  54.12  % $ 2,603,974  53.95  %
Residential real estate 1,470,401  30.15  1,425,733  29.41  1,414,964  28.88  1,383,348  28.33  1,349,010  27.94 
Construction 337,779  6.92  342,835  7.07  344,903  7.04  352,116  7.21  350,053  7.25 
Commercial 220,712  4.52  220,833  4.56  226,006  4.61  221,598  4.54  224,092  4.64 
Consumer 241,751  4.96  254,478  5.25  265,912  5.43  278,242  5.70  294,239  6.09 
Credit cards 4,092  0.08  4,336  0.09  4,521  0.09  5,064  0.10  6,260  0.13 
Total loans 4,877,749  100.00  % 4,848,030  100.00  % 4,900,302  100.00  % 4,882,969  100.00  % 4,827,628  100.00  %
Less: allowance for credit losses (58,737) (58,481) (58,836) (59,554) (58,483)
Total loans, net $ 4,819,012  $ 4,789,549  $ 4,841,466  $ 4,823,415  $ 4,769,145 

24

Shore Bancshares, Inc.
Classified Assets and Nonperforming Assets (Unaudited)
Classified assets and nonperforming assets are summarized as follows:
($ in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025
Classified loans
Substandard $ 84,285  $ 82,337  $ 57,366  $ 48,470  $ 19,930 
Total classified loans 84,285  82,337  57,366  48,470  19,930 
Special mention loans 72,957  97,771  73,401  70,997  65,564 
Total classified and special mention loans $ 157,242  $ 180,108  $ 130,767  $ 119,467  $ 85,494 
Classified loans $ 84,285  $ 82,337  $ 57,366  $ 48,470  $ 19,930 
Other real estate owned —  69  113  120  179 
Repossessed assets 2,362  3,345  2,879  3,432  2,457 
Total classified assets $ 86,647  $ 85,751  $ 60,358  $ 52,022  $ 22,566 
Classified assets to total assets 1.41  % 1.38  % 0.96  % 0.83  % 0.37  %
Nonaccrual loans $ 64,818  $ 64,958  $ 39,960  $ 24,378  $ 16,782 
90+ days delinquent accruing 20  —  255  153  215 
Other real estate owned (“OREO”)
 —  69  113  120  179 
Repossessed property 2,362  3,345  2,879  3,432  2,457 
Total nonperforming assets $ 67,200  $ 68,372  $ 43,207  $ 28,083  $ 19,633 
Accruing borrowers experiencing financial difficulty loans (“BEFD”) 140  5,263  5,311  6,704  6,709 
Total nonperforming assets and BEFDs modifications $ 67,340  $ 73,635  $ 48,518  $ 34,787  $ 26,342 
Nonperforming assets to total assets 1.09  % 1.10  % 0.69  % 0.45  % 0.33  %
Total assets $ 6,151,431  $ 6,206,063  $ 6,258,818  $ 6,278,479  $ 6,037,874 

25