Shore Bancshares, Inc. reported significant financial improvements in its third quarter and year-to-date results for 2024, following the completion of its acquisition of The Community Financial Corporation (TCFC) on July 1, 2023. The transaction, valued at approximately $153.6 million, aimed to expand the company's branch network and market share in Maryland, Virginia, and Delaware.

For the three months ended September 30, 2024, Shore Bancshares achieved a net income of $11.2 million, or $0.34 per diluted share, a substantial recovery from a net loss of $9.7 million in the same period of 2023. Year-to-date net income reached $30.6 million, compared to just $738,000 in the prior year. This turnaround was driven by a 53.2% increase in interest income, totaling $218.9 million for the nine months ended September 30, 2024, up from $142.9 million in 2023. However, net interest income for the third quarter decreased to $43.3 million from $45.6 million in 2023, primarily due to increased interest expenses.

Total assets as of September 30, 2024, were $5.92 billion, a slight decrease from $6.01 billion at the end of 2023. Total deposits also fell to $5.23 billion, down 3% from $5.39 billion, attributed to a decline in interest-bearing deposits. Noninterest-bearing demand deposits increased to $1.57 billion, representing 30.1% of total deposits.

The company’s loan portfolio grew to $4.73 billion, up from $4.64 billion at the end of 2023, with notable increases in construction and residential real estate loans. The allowance for credit losses stood at $58.7 million, stable at 1.24% of total loans. Nonaccrual loans increased to $14.8 million, reflecting ongoing challenges in asset quality.

Noninterest income for the third quarter decreased significantly to $7.3 million from $15 million in 2023, primarily due to lower trust and investment fee income and the absence of one-time gains from the previous year. Total noninterest expenses also declined to $34.1 million from $47.2 million, largely due to reduced merger-related costs.

The company’s capital ratios remained strong, with a Common Tier 1 Capital ratio of 9.27% and a Total Capital ratio of 12.04% as of September 30, 2024. Management noted ongoing efforts to address material weaknesses in internal controls, particularly related to the allowance for credit losses and the online credit card account opening process, with remediation expected by the end of 2024.