SHORE BANCSHARES INC
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 4, 2025
SHBI$22.45+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001035092-25-000015
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001035092-25-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 203 previous paragraphs and 202 current paragraphs.
120 unchanged; 67 reworded; 14 added; 13 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 30 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Third Quarter 2025 Highlights
Current report
•Net Income – Net income for the third quarter of 2025 decreased $1.2 million to $14.3 million from $15.5 million in the second quarter of 2025. Net income decreased primarily due to lower noninterest income of $1.6 million driven by reduced mortgage banking activity and a higher provision for loan losses of $1.5 million due to a large marine loan write-off, partially offset by an increase in net interest income of $1.4 million. Net income for the nine months ended September 30, 2025 was $43.6 million, compared to $30.6 million for the nine months ended September 30, 2024. The increase was primarily driven by an increase in net interest income due to loans repricing favorably coupled with a lower cost of deposits during the period.
Current report
(1)ROAA – non-GAAP is computed by dividing i) net income excluding net of tax adjustments for the amortization of other intangible assets, credit card fraud losses and the sale and fair value of held for sale assets by ii) average assets.
Current report
(4)Efficiency ratio – non-GAAP is computed by dividing i) noninterest expense less amortization of other intangible assets and credit card fraud losses by ii) the sum of taxable-equivalent net interest income and noninterest income less the sale and the fair value of held for sale assets.
Current report
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Current report
The Company reported net income for the nine months ended September 30, 2025 of $43.6 million, or $1.31 diluted earnings per common share, compared to $30.6 million, or diluted earnings per share of $0.92, for the nine months ended September 30, 2024.
Current report
Total assets were $6.28 billion at September 30, 2025, an increase of $47.7 million, or 0.8%, when compared to $6.23 billion at December 31, 2024. The aggregate increase was primarily due to an increase in the loan portfolio of $111.0 million, partially offset by a decrease in interest-bearing deposits at other banks of $61.6 million and a decrease in the investment securities portfolio of $14.8 million. The decrease in interest-bearing deposits with other institutions was primarily driven by loan growth. Total assets increased $360.8 million, or 6.1%, from $5.92 billion when compared to September 30, 2024. The ratio of the ACL as a percentage of loans was 1.22% and 1.21% at September 30, 2025 and December 31, 2024, respectively.
Current report
(3)Excludes loans held for sale of $21.5 million.
Current report
(2)Excludes loans held for sale of $21.5 million.
Current report
Loans related to Cannabis business
Current report
Classified assets increased $23.8 million to $52.0 million, or 0.8% of total assets, at September 30, 2025, from $28.2 million, or 0.5% of total assets, at December 31, 2024. Classified assets are substandard loans, repossessed assets and OREO. The increase was primarily due to several commercial non-owner occupied real estate loans, which were downgraded during the current period. All of these loans are well secured by collateral and required minimal individual reserves as of September 30, 2025.
Current report
*Not meaningful for comparative purposes
Current report
Efficiency Ratio – Non-GAAP
Current report
Efficiency ratio – non-GAAP is computed by dividing i) noninterest expense less amortization of other intangible assets and credit card fraud losses by ii) the sum of taxable-equivalent net interest income and noninterest income less the sale and the fair value of held for sale assets, as applicable. Efficiency ratio – non-GAAP may not be comparable to similar non-GAAP measures used by other companies.
Removed paragraphs (13)
Previous report
Second Quarter 2025 Highlights
Previous report
•Net Income Growth – Net income for the second quarter of 2025 increased $1.7 million to $15.5 million, from $13.8 million in the first quarter of 2025. Net income increased primarily due to higher net interest income (“NII”) and noninterest income driven by higher mortgage banking activity, partially offset by higher noninterest expense. Net income for the first half of 2025 was $29.3 million, compared to $19.4 million for the first half of 2024.
Previous report
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
Previous report
The Company reported net income for the six months ended June 30, 2025 of $29.3 million, or $0.88 diluted earnings per common share, compared to $19.4 million, or diluted earnings per share of $0.58, for the six months ended June 30, 2024. The Company’s ROAA, non-GAAP ROAA, ROACE and ROATCE were 0.97%, 1.09%, 10.67% and 13.01%, respectively, for the six months ended June 30, 2025, compared to 0.67%, 0.92%, 7.54% and 9.55%, respectively, for the six months ended June 30, 2024.
Previous report
In July 2013, federal bank regulatory agencies issued a final rule that revised their risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with certain standards that were developed by Basel III and certain provisions of the Dodd-Frank Act. The final rule currently applies to all depository institutions and bank holding companies and savings and loan holding companies with total consolidated assets of more than $3 billion.
Previous report
The Company provides banking services to customers who do business in the cannabis industry. Prior to the second quarter of 2022, the Company restricted these businesses to include only those in the medical-use cannabis industry in the State of Maryland. During the second quarter of 2022, the Company expanded its cannabis banking program to include both medical and adult-use licensees in other states, with an initial offering of the Company’s existing Maryland customers with multi-state operations. While the Company is providing banking services to customers that are engaged in growing, processing, and sales of both medical and adult-use cannabis in a manner that complies with applicable state law, such customers engaged in those activities currently violate federal law. The Company may be deemed to be aiding and abetting illegal activities through the services that it provides to these customers. While we are not aware of any instance of a federally-insured financial institution being subject to such aiding and abetting liability, the strict enforcement of federal laws regarding cannabis would likely result in the Company’s inability to continue to provide banking services to these customers and the Company could have legal action taken against it by the federal government, including imprisonment and fines. There is an uncertainty of the potential impact to the Company’s consolidated financial statements if the federal government takes actions against the Company. As of June 30, 2025, the Company has not accrued an amount for the potential impact of any such actions.
Previous report
The following is a summary of the level of business activities with our cannabis customers:
Previous report
•Interest and noninterest income for the six months ended June 30, 2025, were approximately $2.2 million and $467 thousand, respectively. Interest and noninterest income for the six months ended June 30, 2024, were approximately $2.0 million and $558 thousand, respectively.
Previous report
Total assets were $6.04 billion at June 30, 2025, a decrease of $192.9 million, or 3.1%, when compared to $6.23 billion at December 31, 2024. The decrease was primarily due to decreases in cash and cash equivalents of $274.9 million and held to maturity (“HTM”) securities of $21.8 million, partially offset by increases in loans held for investment of $55.6 million and available for sale (“AFS”) securities of $38.5 million. The ratio of the ACL as a percentage of loans was 1.21% and 1.21% at June 30, 2025 and December 31, 2024, respectively.
Previous report
(3)Excludes loans held for sale of $34.3 million.
Previous report
(2)Excludes loans held for sale of $34.3 million.
Previous report
Nonperforming Assets
Previous report
(1)The Company utilized an effective tax rate of 24.8% and 25.1% for the three months ended June 30, 2025 and 2024, respectively, and 24.7% and 24.1% for the six months ended June 30, 2025 and 2024, respectively.
Reworded paragraphs (67)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements. The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements:
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements. The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, or future or conditional verbs such as “should,” “could,” or “may.” Although forward-looking statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements:
Previous wording
•the effect of fiscal and governmental policies of the U.S. federal government;
Current wording
•the effects of federal government shutdowns, debt ceiling standoff, or other uncertainty regarding fiscal and governmental policies of the U.S. federal government;
Previous wording
Shore Bancshares, Inc. is headquartered on the Eastern Shore of Maryland. It is the parent company of Shore United Bank, N.A. (the “Bank”). The Bank currently operates 40 full-service branches in Maryland, Delaware and Virginia. The Company, through Wye Financial Partners, a division of the Bank, offers full-service investment, insurance and financial planning services through our broker/dealer, LPL Financial. The Company, through Wye Trust, a division of the Bank, offers wealth management, corporate trustee services and trust administration to customers within our market areas and nationwide. The Company offered title services through its wholly-owned subsidiary, Mid-Maryland Title Company, Inc. (the “Title Company”), which engaged in residential and commercial real estate settlement activities and offered title insurance policies, title search and lien satisfaction services. The Title Company ceased conducting real estate closings effective March 31, 2025. Operations will continue for as long as necessary to ensure that work in progress is adequately addressed. Upon successful completion of outstanding matters, the Title Company will complete any regulatory filings necessary to discontinue the business and dissolve the corporation.
Current wording
Shore Bancshares, Inc. is headquartered on the Eastern Shore of Maryland. It is the parent company of Shore United Bank, N.A. (the “Bank”). The Bank currently operates 40 full-service branches in Maryland, Delaware and Virginia. The Company, through Wye Financial Partners, a division of the Bank, offers full-service investment, insurance and financial planning services through our broker/dealer, LPL Financial. The Company, through Wye Trust, a division of the Bank, offers wealth management, corporate trustee services and trust administration to customers within our market areas and nationwide. The Company offered title services through its wholly-owned subsidiary, Mid-Maryland Title Company, Inc. (the “Title Company”), which engaged in residential and commercial real estate settlement activities and offered title insurance policies, title search and lien satisfaction services. The Title Company ceased conducting real estate closings effective March 31, 2025.
Previous wording
The most significant accounting policies that we follow are presented in Note 1 – “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” included in Part II, Item 8. of the 2024 Annual Report. These policies, along with the disclosures presented in the notes to consolidated financial statements and in this management’s discussion and analysis of financial condition and results of operations, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has determined that the accounting policy for the allowance for credit losses (“ACL”) on loans is a critical accounting policy. This policy is considered critical because it relates to an accounting area that require the most subjective or complex judgments, and, as such, could be most subject to revision as new information becomes available.
Current wording
The Company’s most significant accounting policies are presented in Note 1 – “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” included in Part II, Item 8. of the 2024 Annual Report. These policies, along with the disclosures presented in the notes to consolidated financial statements and in this management’s discussion and analysis of financial condition and results of operations, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, management has determined that the accounting policy for the allowance for credit losses (“ACL”) on loans is a critical accounting policy. This policy is considered critical because it relates to an accounting area that requires the most subjective or complex judgments, and, as such, could be most subject to revision as new information becomes available.
Previous wording
The Company’s net income for the second quarter of 2025 was $15.5 million, or $0.46 per diluted common share, compared to $13.8 million, or $0.41 per diluted common share, for the first quarter of 2025. The Company had net income of $11.2 million, or $0.34 per diluted common share, for the second quarter of 2024.
Current wording
The Company’s net income for the third quarter of 2025 was $14.3 million, or $0.43 per diluted common share, compared to $15.5 million, or $0.46 per diluted common share, for the second quarter of 2025. The Company had net income of $11.2 million, or $0.34 per diluted common share, for the third quarter of 2024.
Previous wording
•Improved Return on Average Assets (“ROAA”) – The Company reported ROAA of 1.03% for the second quarter of 2025, compared to 0.91% for the first quarter of 2025 and 0.77% for the second quarter of 2024. Non-U.S. generally accepted accounting principles (“GAAP”) ROAA(1)was 1.15% for the second quarter of 2025, compared to 1.02% for the first quarter of 2025 and 0.91% for the second quarter of 2024.
Current wording
•Return on Average Assets (“ROAA”) – The Company reported ROAA of 0.95% for the third quarter of 2025, compared to 1.03% for the second quarter of 2025 and 0.77% for the third quarter of 2024. Non-U.S. generally accepted accounting principles (“GAAP”) ROAA(1)was 1.05% for the third quarter of 2025, compared to 1.15% for the second quarter of 2025 and 0.90% for the third quarter of 2024.
Previous wording
•Net Interest Margin (“NIM”) Expansion– Net interest income for the second quarter of 2025 increased $1.2 million to $47.3 million from $46.0 million for the first quarter of 2025. NIM increased 11 basis points (“bps”) to 3.35% during the second quarter of 2025 from 3.24% in the first quarter of 2025. NIM excluding accretion(1) increased for the comparable periods from 3.02% to 3.10%. Excluding accretion interest, loan yields increased 2 bpsand funding costs decreased 4 bps for the comparable periods. Net interest income increased due to modest loan growth, slightly higher accelerated accretion income, and loan and securities repricing, coupled with lower cost of deposits during the period.
Current wording
•Net Interest Margin (“NIM”)– Net interest income for the third quarter of 2025 increased $1.4 million to $48.7 million from $47.3 million for the second quarter of 2025. NIM increased 7 basis points (“bps”) to 3.42% during the third quarter of 2025 from 3.35% in the second quarter of 2025. NIM excluding accretion(1) increased for the comparable periods from 3.10% to 3.22%. Excluding accretion interest, loan yields increased 6 bps and funding costs decreased 6 bps for the comparable periods. Net interest income increased due to modest loan growth coupled with a lower cost of deposits. These favorable changes were partially offset by a lower yield on investments and lower average deposits with other institutions.
Previous wording
•Book Value per Share Growth– Book value per share increased to$16.94 at June 30, 2025 from$16.55 at March 31, 2025 and$15.74 at June 30, 2024.
Current wording
•Book Value per Share –Book value per share increased to $17.27 at September 30, 2025 from $16.94 at June 30, 2025 and $16.00 at September 30, 2024.
Previous wording
•Stable Asset Quality– Nonperforming assets to total assets were 0.33% for the second quarter of 2025, an increase from 0.31% for the first quarter of 2025 and 0.29% for the second quarter of 2024. Classified assets to total assets were 0.37% in the second quarter of 2025, an increase when compared to 0.36% for the first quarter of 2025 and 0.33% for the second quarter of 2024. The allowance for credit losses (“ACL”) was $58.5 million at June 30, 2025, compared to $57.9 million at December 31, 2024 and $58.5 million at June 30, 2024. The ACL as a percentage of loans remained flat at 1.21% at June 30, 2025 compared to December 31, 2024, and decreased compared to 1.24% at June 30, 2024.
Current wording
•Asset Quality– Nonperforming assets to total assets were 0.45% at September 30, 2025, an increase from 0.33% at June 30, 2025 and 0.27% at September 30, 2024. Classified assets to total assets were 0.83% at September 30, 2025, an increase when compared to 0.37% at June 30, 2025 and 0.39% at September 30, 2024. The allowance for credit losses (“ACL”) was $59.6 million at September 30, 2025, compared to $57.9 million at December 31, 2024 and $58.7 million at September 30, 2024. The ACL as a percentage of loans increased to 1.22% at September 30, 2025 compared to 1.21% at December 31, 2024, and decreased compared to 1.24% at September 30, 2024.
Previous wording
•Improved Operating Leverage – The efficiency ratio for the second quarter of 2025 was 60.83% compared to 63.64% in the first quarter of 2025 and 66.23% for the second quarter of 2024. The non-GAAP efficiency ratio(1), which excludes amortization, was 56.73% for the second quarter of 2025, compared to 59.25% for the first quarter of 2025 and 61.05% for the second quarter of 2024. Management anticipates ongoing expense management and technology investments will result in continued improvements in operating leverage over time.
Current wording
•Operating Leverage– The efficiency ratio for the third quarter of 2025 was 61.00% compared to 60.83% in the second quarter of 2025 and 67.49% for the third quarter of 2024. The non-GAAP efficiency ratio(1), which excludes amortization, was 57.30% for the third quarter of 2025, compared to 56.73% for the second quarter of 2025 and 62.10% for the third quarter of 2024. Management anticipates ongoing expense management of professional services and technology investments will result in continued improvements in operating leverage over time.
Previous wording
(1) See the Reconciliation of GAAP and non-GAAP Measures tables.
Current wording
(1)See the Reconciliation of GAAP and non-GAAP Measures tables.
Previous wording
A comparison of the results of operations for the three and six months ended June 30, 2025 and 2024 is presented below.
Current wording
A comparison of the results of operations for the three and nine months ended September 30, 2025 and 2024 is presented below.
Previous wording
(1)ROATCE is computed by dividing net earnings applicable to common stockholders by average tangible common stockholders’ equity. ROATCE is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. Refer to Use of Non-GAAP Financial Measures for additional details.
Current wording
(2)ROATCE is computed by dividing net earnings applicable to common stockholders by average tangible common equity. ROATCE is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. Refer to Use of Non-GAAP Financial Measures for additional details.
Previous wording
(2)Efficiency ratio is noninterest expense divided by the sum of net interest income and noninterest income.
Current wording
(3)Efficiency ratio – GAAP is computed by dividing i) noninterest expense by ii) the sum of net interest income and noninterest income.
Previous wording
(3)Net operating expense is the sum of noninterest expense offset by noninterest income.
Current wording
(5)Net operating expense is the sum of noninterest expense offset by noninterest income.
Previous wording
The Company reported net income for the three months ended June 30, 2025 of $15.5 million, or $0.46 diluted earnings per common share, compared to $11.2 million, or diluted earnings per common share of $0.34, for the three months ended June 30, 2024. The Company’s ROAA, non-GAAP ROAA, ROACE and ROATCE were 1.03%, 1.15%, 11.13% and 13.50%, respectively, for the three months ended June 30, 2025, compared to 0.77%, 0.91%, 8.70% and 10.97%, respectively, for the three months ended June 30, 2024.
Current wording
The Company reported net income for the three months ended September 30, 2025 of $14.3 million, or $0.43 diluted earnings per common share, compared to $11.2 million, or diluted earnings per common share of $0.34, for the three months ended September 30, 2024.
Previous wording
Tax-equivalent NII is NII adjusted for the tax-favored status of income from certain loans and investments. As shown in the table below, tax-equivalent NII was $47.3 million for the second quarter of 2025 and $42.2 million for the second quarter of 2024. The increase was primarily due to increases in interest and fees on loans of$2.4 million and interest on deposits at other banks of$1.0 million, as well as a decrease in interest expense on short-term borrowings of $1.0 million.
Current wording
Tax-equivalent NII is NII adjusted for the tax-favored status of income from certain loans and investments. As shown in the table below, tax-equivalent NII was $48.7 million for the third quarter of 2025 and $43.3 million for the third quarter of 2024. The increase was primarily due to increases in interest and fees on loans of$1.8 million and interest on deposits at other banks of$651 thousand, coupled with a decrease in interest expense on deposits of $2.4 million and borrowings of $512 thousand.
Previous wording
(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 $4.2 million and $4.5 million of accretion interest on loans for the three months ended June 30, 2025 and 2024, respectively.
Current wording
(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 $3.3 million and $5.0 million of accretion interest on loans for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $435 thousand and $421 thousand of amortization of deposit discounts, and $232 thousand and $243 thousand of amortization of borrowing fair value adjustments for the three months ended June 30, 2025 and 2024, respectively.
Current wording
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $280 thousand and $287 thousand of amortization of deposit discounts and $232 thousand and $232 thousand of amortization of borrowing fair value adjustments for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
NII was $47.3 million for the second quarter of 2025, compared to $42.1 million for the second quarter of 2024. The increase was primarily due to increases in interest and fees on loans of$2.4 million and interest on deposits at other banks of$1.0 million, as well as a decrease in interest expense on short-term borrowings of $1.0 million.
Current wording
NII was $48.7 million for the third quarter of 2025, compared to $43.3 million for the third quarter of 2024. The increase was primarily due to increases in interest and fees on loans of$1.8 million and interest on deposits at other banks of$651 thousand, as well as an increase in interest expense on short-term borrowings of $149 thousand.
Previous wording
The Company’s NIM increased to 3.35% for the second quarter of 2025 from 3.11% for the second quarter of 2024. Comparing the second quarter of 2025 to the second quarter of 2024, the Company’s interest-earning asset yields increased to 5.44% from 5.39%, while the cost of funds repriced at a faster pace, which resulted in a decrease of 19 bps basis points, from 2.36% to 2.17% for the same period.
Current wording
The Company’s NIM increased to 3.42% for thethree months ended September 30, 2025, from 3.17% for thethree months ended September 30, 2024. Comparing thethree months ended September 30, 2025 to thethree months ended September 30, 2024, the Company’s interest-earning asset yields decreased to 5.42% from 5.47%, while the cost of funds repriced at a faster pace, which resulted in a decrease of 29 bps basis points, from 2.38% to 2.09%for the same period.
Previous wording
Total noninterest income for the second quarter of 2025 was $9.3 million, an increase of $878 thousand from $8.4 million for the second quarter of 2024. The increase was primarily due to an increase in mortgage banking activity, driven by increased mortgage servicing activity and lower prepayment rates.
Current wording
Total noninterest income for the three months ended September 30, 2025 was $7.7 million, an increase of $414 thousand from $7.3 million for the three months ended September 30, 2024. The increase was primarily due to a $101 thousand increase in mortgage banking revenue, driven by increased mortgage servicing activity, and a $147 thousand increase in interchange credits.
Previous wording
Total noninterest expense of $34.4 million for the second quarter of 2025 increased $911 thousand when compared to the second quarter of 2024 total noninterest expense of $33.5 million. The increase in total noninterest expense from the second quarter of 2024 was primarily due to higher salaries and benefits expense and software and data processing costs, partially offset by lower operating expenses in the second quarter of 2025.
Current wording
Total noninterest expense of $34.4 million for the three months ended September 30, 2025 increased $265 thousand when compared to the three months ended September 30, 2024 total noninterest expense of $34.1 million. The increase was primarily due to higher salaries and benefits expense of $2.1 million and higher software and data processing costs of $736 thousand, partially offset by the absence of the credit fraud loss-related expenses incurred in the third quarter 2024, lower legal and professional services of $373 thousand and lower amortization of other intangible assets of $297 thousand.
Previous wording
The Company reported income tax expense of $5.1 million and $3.8 million for the three months ended June 30, 2025 and 2024, respectively. The effective tax rate for the second quarter of 2025 and 2024 was 24.8% and 25.1%, respectively.
Current wording
The Company reported income tax expense of $4.6 million and $3.8 million for the three months ended September 30, 2025 and 2024, respectively. The effective tax rate was 24.4% and 25.2% for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
As shown in the table below, tax-equivalent net interest income increased $10.0 million to $93.4 million for the six months ended June 30, 2025, compared to $83.4 million for the six months ended June 30, 2024. The increase in net interest income was primarily due to an increase in total interest income of $8.4 million, or 5.9%, which included an increase in interest and fees on loans of $4.3 million, or 3.2%, and an increase in interest on deposits with other banks of $3.5 million, or 224.9%. The increase in interest and fees on loans was primarily due to the increase in the average balance of loans of $128.6 million, or 2.7%. The decrease in total interest expense was primarily due to a decrease in interest on deposits of $641 thousand, a decrease in interest expense on long-term borrowings of $488 thousand and a decrease in interest expense on short-term borrowings of $438 thousand. The decreases in borrowings were related to lower FHLB advances in 2025.
Current wording
As shown in the table below, tax-equivalent net interest income increased $15.4 million to $142.2 million for the nine months ended September 30, 2025, compared to $126.8 million for the nine months ended September 30, 2024. The increase in net interest income was primarily due to an increase in total interest income of $10.9 million, or 5.0%, which included an increase in interest and fees on loans of $6.1 million, or 3.0%, and an increase in interest on deposits with other banks of $4.1 million, or 195.5%. The increase in interest and fees on loans was primarily due to the increase in the average balance of loans of $135.9 million, or 2.9%. Thedecrease in total interest expense was primarily due to adecrease in interest on deposits of $3.0 million, adecrease in interest expense on long-term borrowings of $1.1 million and adecrease in interest expense on short-term borrowings of $288 thousand. The decreases in borrowings were related to lower FHLB advances in 2025.
Previous wording
The following table presents the distribution of the average consolidated balance sheets, interest income, interest expense and annualized yields earned and rates paid for the six months ended June 30, 2025 and 2024.
Current wording
The following table presents the distribution of the average consolidated balance sheets, interest income, interest expense and annualized yields earned and rates paid for the nine months ended September 30, 2025 and 2024.
Previous wording
(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 $8.0 million and $8.7 million of accretion interest on loans for the six months ended June 30, 2025 and 2024, respectively.
Current wording
(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 $11.3 million and $13.7 million of accretion interest on loans for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $769 thousand and $788 thousand of amortization of deposit discounts, and $463 thousand and $463 thousand of amortization of borrowing fair value adjustments for the six months ended June 30, 2025 and 2024, respectively.
Current wording
(4) Interest expense on deposits and borrowings includes amortization of deposit discounts and amortization of borrowing fair value adjustments. There were $1.0 million and $1.1 million of amortization of deposit discounts and $695 thousand and $695 thousand of amortization of borrowing fair value adjustments for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
The Company’s NIM increased from 3.09% for the six months ended June 30, 2024 to 3.30% for the six months ended June 30, 2025. Margins were higher due to a $288.2 million increase in interest-earning asset balances and a 5 basis point increase in interest-earning asset yields. These positive movements were coupled with lower cost interest-bearing deposits. The increase in the average balances of interest-bearing deposits of $20.0 million was offset by a 4 basis point decrease in the associated rates paid, as well as a $23.9 million decrease in the average balance of FHLB advances and a 56 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 24 basis points and 27 basis points for the six months ended June 30, 2025 and 2024, respectively, which resulted in NIMs excluding accretion of 3.06% and 2.82% for the same periods.
Current wording
The Company’s NIM increased from 3.12% for the nine months ended September 30, 2024 to 3.34% for the nine months ended September 30, 2025. Margins were higher due to a $266.5 million increase in interest-earning asset balances and a 1 basis point increase in interest-earning asset yields. These positive movements were coupled with lower cost interest-bearing deposits. The increase in the average balances of interest-bearing deposits of $75.5 million was offset by a 16 basis point decrease in the associated rates paid, as well as a $26.3 million decrease in the average balance of FHLB advances and a 52 basis point decrease in the associated rates paid. Net accretion income impacted net interest margin by 23 basis points and 29 basis points for the nine months ended September 30, 2025 and 2024, respectively, which resulted in NIMs excluding accretion of 3.11% and 2.83% for the same periods.
Previous wording
Total noninterest income for the six months ended June 30, 2025 was $16.3 million, an increase of $1.3 million, or 8.8%, when compared to the same period in 2024. The increase was primarily due to higher gains on sales of loans held for sale of $453 thousand, mortgage banking revenue of $383 thousand and other noninterest income of $249 thousand.
Current wording
Total noninterest income for the nine months ended September 30, 2025 was $24.0 million, an increase of $1.7 million, or 7.7%, when compared to the same period in 2024. The increase was primarily due to a $936 thousand increase in mortgage banking revenue, a $341 thousand increase in other noninterest income and a $208 thousand increase in interchange credits.
Previous wording
Total noninterest expense was $68.2 million for the six months ended June 30, 2025, a decrease of $2.0 million, or 2.9%, when compared to the same period in 2024. Noninterest expense decreased primarily due to the absence of the $4.3 million credit card fraud event during the six months ended June 30, 2024, which was partially offset by higher salaries and employee benefit expenses of $1.3 million and an increase of $1.3 million in software and data processing expense in the six months ended June 30, 2025.
Current wording
Total noninterest expense was $102.5 million for the nine months ended September 30, 2025, a decrease of $1.8 million, or 1.7%, when compared to the same period in 2024. Noninterest expense line items decreased primarily due to the absence of the $4.7 million credit card fraud event during the nine months ended September 30, 2024 and lower amortization of intangible assets of $893 thousand, which was partially offset by higher salaries and employee benefit expenses of $3.5 million and an increase of $2.0 million of software and data processing expense in the nine months ended September 30, 2025.
Previous wording
The Company reported income tax expense of $9.6 million and $6.2 million for the six months ended June 30, 2025 and 2024, respectively. The effective tax rate was 24.73% for the six months ended June 30, 2025 and 24.14% for the six months ended June 30, 2024. The 2024 effective tax rate was impacted by nondeductible merger costs incurred.
Current wording
The Company reported income tax expense of $14.3 million and $10.0 million for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate was 24.63% and 24.54% for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Based on management’s going concern evaluation, we believe that there are no conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s or the Bank’s ability to continue as a going concern, within one year of the date of the issuance of the financial statements.
Current wording
Based on management’s going concern evaluation, management believes that there are no conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s or the Bank’s ability to continue as a going concern within one year of the date of the issuance of the financial statements.
Previous wording
We derive liquidity through increased customer deposits, non-reinvestment of the cash flow from the investment portfolio, loan repayments, borrowings and income from earning assets. As seen in the consolidated statements of cash flows, the net decrease in cash and cash equivalents was $274.9 million for the first six months of 2025, compared to a net decrease of $233.5 million for the first six months of 2024. The decrease in cash and cash equivalents in the first six months of 2025 was mainly due to the decrease of $227.5 million in interest-bearing deposits, partially offset by an increase of $12.3 million in noninterest-bearing deposits.
Current wording
The Company derives liquidity through increased customer deposits, non-reinvestment of the cash flow from the investment portfolio, loan repayments, borrowings and income from earning assets. As seen in the consolidated statements of cash flows, the net decrease in cash and cash equivalents was $43.3 million for the first nine months of 2025, compared to a net decrease of $188.8 million for the first nine months of 2024. The decrease in cash and cash equivalents in the first nine months of 2025 was mainly due to the decrease of $32.6 million in interest-bearing deposits and loan growth, partially offset by an increase of $31.4 million in noninterest-bearing deposits.
Previous wording
To the extent that deposits are not adequate to fund customer loan demand, liquidity needs can be met in the short-term fund markets. At June 30, 2025, the Bank had approximately $1.16 billion of available liquidity, including $185.0 million in cash and cash equivalents, $316.5 million in unpledged securities and $740.7 million in secured borrowing capacity at the FHLB of Atlanta, partially offset by FHLB advances and a letter of credit of $50.0 million and $33.1 million, respectively. The Bank has arrangements with other correspondent banks whereby it has $95.0 million available in federal funds lines of credit and a reverse repurchase agreement available to meet any short-term needs which may not otherwise be funded by the Bank’s portfolio of readily marketable investments that can be converted to cash. Through the FHLB, the Bank had available lendable collateral of approximately $740.7 million and $743.6 million at June 30, 2025 and December 31, 2024, respectively. The Bank has pledged, under a blanket lien, all qualifying residential and commercial real estate loans under borrowing agreements with the FHLB of Atlanta. The following table presents the Company’s liquidity in use and liquidity available as of June 30, 2025.
Current wording
To the extent that deposits are not adequate to fund customer loan demand, liquidity needs can be met in the short-term fund markets. At September 30, 2025, the Bank had approximately $1.37 billion of available liquidity, including $416.5 million in cash and cash equivalents, $294.4 million in unpledged securities and $739.6 million in secured borrowing capacity at the FHLB of Atlanta, partially offset by FHLB advances and a letter of credit of $50.0 million and $33.1 million, respectively. The Bank has arrangements with other correspondent banks whereby it has $65.0 million available in federal funds lines of credit and a reverse repurchase agreement available to meet any short-term needs which may not otherwise be funded by the Bank’s portfolio of readily marketable investments that can be converted to cash. Through the FHLB, the Bank had available lendable collateral of approximately $739.6 million and $743.6 million at September 30, 2025 and December 31, 2024, respectively. The Bank has pledged, under a blanket lien, all qualifying residential and commercial real estate loans under borrowing agreements with the FHLB of Atlanta. The following table presents the Company’s liquidity in use and liquidity available as of September 30, 2025.
Previous wording
Cash and cash equivalents totaled $185.0 million at June 30, 2025, compared to $459.9 million at December 31, 2024. Total cash and cash equivalents fluctuate due to transactions in process and other liquidity demands. Management believes liquidity needs are satisfied by the current balance of cash and cash equivalents, readily available access to traditional and wholesale funding sources, and the portions of the investment and loan portfolios that mature within one year.
Current wording
Cash and cash equivalents totaled $416.5 million at September 30, 2025, compared to $459.9 million at December 31, 2024. Total cash and cash equivalents fluctuate due to transactions in process and other liquidity demands. Management believes liquidity needs are satisfied by the current balance of cash and cash equivalents, readily available access to traditional and wholesale funding sources, and the portions of the investment and loan portfolios that mature within one year.
Previous wording
The investment portfolio includes debt and equity securities. Debt securities are classified as either AFS or HTM. AFS investment securities are stated at estimated fair value based on market prices. They represent securities which may be sold as part of the asset/liability management strategy or in response to changing interest rates. Net unrealized holding gains and losses on these securities are reported net of related income taxes as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Investment securities in the HTM category are stated at cost adjusted for amortization of premiums and accretion of discounts and the ACL. We have the intent and ability to hold such securities until maturity. At June 30, 2025, 29.0% of the portfolio of debt securities was classified as AFS and 71.0% was classified as HTM, compared to 23.7% and 76.3% respectively, at December 31, 2024. See Note 2 – “Investment Securities” in the “Notes to Consolidated Financial Statements” included in Part I, Item 1. of this Quarterly Report on Form 10-Q for additional details on the composition of our investment portfolio.
Current wording
The investment portfolio includes debt and equity securities. Debt securities are classified as either AFS or HTM. AFS investment securities are stated at estimated fair value based on market prices. They represent securities which may be sold as part of the asset/liability management strategy or in response to changing interest rates. Net unrealized holding gains and losses on these securities are reported net of related income taxes as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Investment securities in the HTM category are stated at cost adjusted for amortization of premiums and accretion of discounts and the ACL. We have the intent and ability to hold such securities until maturity. At September 30, 2025, 29.5% of the portfolio of debt securities was classified as AFS and 70.5% was classified as HTM, compared to 23.7% and 76.3%, respectively, at December 31, 2024. See Note 2 – “Investment Securities” in the “Notes to Consolidated Financial Statements” included in Part I, Item 1. of this Quarterly Report on Form 10-Q for additional details on the composition of the investment portfolio.
Previous wording
Investment securities, including restricted stock and equity securities, totaled $673.3 million at June 30, 2025, a $17.0 million, or 2.6% increase, compared to $656.4 million at December 31, 2024.
Current wording
Investment securities, including restricted stock and equity securities, totaled $641.6 million at September 30, 2025, a $14.7 million, or 2.2% decrease, compared to $656.4 million at December 31, 2024.
Previous wording
At June 30, 2025, AFS securities, carried at fair value, totaled $187.7 million, compared to $149.2 million at December 31, 2024. At June 30, 2025, AFS securities consisted of 86.6% mortgage-backed, 10.9% U.S. government agencies and 2.5% corporate bonds, compared to 82.0%, 13.5% and 4.4%, respectively, at December 31, 2024. At June 30, 2025, the accumulated other comprehensive loss was $5.6 million, compared to $7.5 million at December 31, 2024.
Current wording
At September 30, 2025, AFS securities, carried at fair value, totaled $181.7 million, compared to $149.2 million at December 31, 2024. At September 30, 2025, AFS securities consisted of 86.1% mortgage-backed, 11.3% U.S. government agencies and 2.6% corporate bonds, compared to 82.0%, 13.5% and 4.4%, respectively, at December 31, 2024. At September 30, 2025, the accumulated other comprehensive loss was $4.8 million, compared to $7.5 million at December 31, 2024.
Previous wording
At June 30, 2025, HTM securities, carried at amortized cost, totaled $459.2 million, compared to $481.1 million at December 31, 2024. At June 30, 2025, HTM securities consisted of 69.9% mortgage-backed, 28.1% U.S. government agencies and 2.0% other debt securities, compared to 70.0%, 27.5% and 2.5%, respectively, at December 31, 2024.
Current wording
At September 30, 2025, HTM securities, carried at amortized cost, totaled $433.4 million, compared to $481.1 million at December 31, 2024. At September 30, 2025, HTM securities consisted of 71.9% mortgage-backed, 26.5% U.S. government agencies and 1.6% other debt securities, compared to 70.0%, 27.5% and 2.5%, respectively, at December 31, 2024.
Showing the first 40 of 67 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
At September 30, 2025, deposit balances related to the cannabis business were $134.3 million, or 2.43% of total deposits. At December 31, 2024, deposit balances were $151.4 million, or 2.74% of total deposits,
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The Bank and the Company are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Previous report — wording carried elsewhere
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum ratios of CET1, Tier 1, and total capital as a percentage of assets and off-balance sheet exposures, adjusted for risk weights ranging from 0% to 12.50%. The Bank is also required to maintain capital at a minimum level based on quarterly average assets, which is known as the leverage ratio.
Previous report — wording carried elsewhere
For information about risks related with our banking services provided to the cannabis industry, see “Risk Factors – Risks Relating to Our Business” included in Part I, Item 1A. in the 2024 Annual Report.