SHBI

EX-99.1

2 shbi-20260930xexx991.htm

EX-99.1

Document

Exhibit 99.1

18 E. Dover Street

Easton, Maryland 21601

Phone (410) 763-7800

PRESS RELEASE

Shore Bancshares, Inc. Reports 2026 Third Quarter Results

Easton, Maryland (October 22, 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 third quarter of 2026 of $16.8 million, or $0.50 per diluted common share, compared to net income of $18.9 million, or $0.56 per diluted common share, for the second quarter of 2026, and net income of $14.3 million, or $0.43 per diluted common share, for the third quarter of 2025.

Third Quarter 2026 Highlights

•Pre-tax Pre-provision Income (“PTPP”), a non-U.S. generally accepted accounting principles (“GAAP”)(1) financial measure – PTPP for the third quarter of 2026 increased $1.5 million to $27.5 million, from $26.1 million in the second quarter of 2026. PTPP increased primarily due to an increase in interest income of $2.6 million and a decrease in noninterest expense of $405 thousand. The increase in net interest income was partially offset by a decrease in noninterest income of $1.2 million and an increase in interest expense of $390 thousand. PTPP for the nine months ended September 30, 2026 was $76.4 million compared to $63.4 million for the nine months ended September 30, 2025.

•Return on Average Assets (“ROAA”) – The Company reported ROAA of 1.08% for the third quarter of 2026, compared to 1.24% for the second quarter of 2026 and 0.95% for the third quarter of 2025. Adjusted ROAA – non-GAAP(1) was 1.16% for the third quarter of 2026, compared to 1.34% for the second quarter of 2026 and 1.05% for the third quarter of 2025.

•Net Interest Margin (“NIM”) – Net interest income for the third quarter of 2026 increased $2.2 million to $55.1 million compared to the second quarter of 2026. NIM increased 8 basis points (“bps”) to 3.78% for the third quarter of 2026 compared to the second quarter of 2026. NIM excluding accretion(1) increased for the comparable periods from 3.45% to 3.50%. Excluding accretion interest, loan yields increased 4 bp and funding costs decreased 2 bps for the comparable periods. Net interest income increased due to elevated accretion income from loan payoffs, partially offset by a slightly higher interest expense driven by municipal deposits.

•Capital Management – Book value per share increased to $18.59 at September 30, 2026 from $18.44 at June 30, 2026 and $17.27 at September 30, 2025. During the quarter ended September 30, 2026, the Company declared a dividend of $0.14 per share and repurchased 148,006 shares of its outstanding common stock for approximately $3.4 million.

•Asset Quality – Nonperforming assets were 1.27% of total assets at September 30, 2026, an increase from 1.09% at June 30, 2026 and an increase from 0.45% at September 30, 2025. Classified assets were 1.61% of total assets at September 30, 2026, an increase when compared to 1.41% at June 30, 2026 and 0.83% at September 30, 2025. The allowance for credit losses (“ACL”) was $59.6 million at both September 30, 2026 and September 30, 2025, and $58.7 million at June 30, 2026. The ACL as a percentage of loans increased to 1.21% at September 30, 2026 compared to 1.20% at June 30, 2026 and decreased compared to 1.22% at September 30, 2025.

•Operating Leverage – The efficiency ratio for the third quarter of 2026 was 56.15%, compared to 57.76% in the second quarter of 2026 and 61.00% for the third quarter of 2025. The adjusted efficiency ratio – non-GAAP(1), which excludes amortization of intangibles, was 53.30% for the third quarter of 2026, compared to 54.49% for the second quarter of 2026 and 57.30% for the third quarter of 2025. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.

“Our third quarter reflected very strong core earnings, driven by continued expansion in net interest margin, growth in net interest income and lower noninterest expense, which further improved operating leverage,” stated James (“Jimmy”) M. Burke, President and Chief Executive Officer of Shore Bancshares, Inc. “Pre-tax, pre-provision income increased 5.6% from the prior quarter, reflecting our disciplined approach to balance sheet management, the strength of our deposit franchise and our focus on operational execution.

(1) See the Reconciliation of GAAP and Non-GAAP Measures tables.

1

Net income for the quarter was impacted by a higher provision for credit losses, primarily related to a partial charge-off on a multifamily relationship that we downgraded last year. As we pursued an exit from these credits, updated valuations reflected property-specific issues that reduced collateral values. Our approach is to address potential credit problems as early as possible, and our core performance gives us the flexibil

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