More annual reports from Shore Bancshares Inc.:
2023 ReportPeers and competitors of Shore Bancshares Inc.:
Seacoast Banking of Florida S E L E C T E D F I N A N C I A L D A T A
(Ihllars in thousands, except per shares data)
2006
Years Ended lleccmber 31,
2004
2003
2005
RESULTS OF OPERATIONS:
Interest income
Interest expense
Net interest income
Provision for credit lossos
Net interest incornc alter provision for credit losses
Noninterest income
Noninterest expenses
Incomc before taxe?
Incomc taxes
NET INCOME
PER SIIARE DATA: (1)
Net income -basic
Net incomc - diluted
Dividends paid
Book value (at year end)
Tangible book value (at year end) (2)
FINANCIAI, CONDITION (at year end):
Assets
Dcposils
Total loans, net of unearned income
and allowancc for credit losses
Stockholders' equity
$47,384
u i Y 2
35,485
X I 0
34,675
11,498
25,431
20,742
7,854
$12,888
$38,291
9,0lU
29,281
93 1
28,350
10,224
22,535
16,039
5,841
$10,198
$34,339
9,743
24,596
335
24,261
9,845
10,344
14,762
5,266
$ 9,496
2002
$36,306
12,438
23,868
356
23,512
5,968
15,960
13,520
A.23
8 8,7911
$1 S 5
1.55
.54
12.17
10.51
$1.24
1.23
.48
11.24
9.53
$1.18
1.16
.44
10.3 1
9.37
$1.09
1 .ox
.40
9.68
8.72
$57,971
19.075
38,896
1.493
37,403
12,839
X!am
21,708
1L154
$13,554
$1.62
1.61
.59
13.28
11.67
$945,649
774,182
$851,638
704358
$790,598
658,672
$705,379
592,409
$654,066
545,192
693,419
111,327
622,227
10 1,448
590,766
92,976
470,895
83,527
435,422
78,028
PERFORMANCE KA'I'IOS (for the year):
Return on averagc asscts
Return on average stockholders' equity
Ne1 interest margin
Efficiency ratio(3)
Dividend payout ratio
Average stockholdcrs' equity IO average total asscts
1.52%
12.66%
4.70%
55.15%
36.65%
11.98%
1.51%
13.20%
4.69%
54.13%
34.3 3 Yn
11.86%
1.32%
11.17%)
4.10%
5 7.04%)
38.71%
11.79%
1.40%
11.7OYo
3.91%
56.17%
37.29%
11.96%
1.42%
1 1.79%)
4.12%
53.49%)
36.59%
1z.ooo/u
(1) Per sharc data is adjusred to give retroactive effect ola 3 lor 2 sruck split I n the form of 3 stock dividcnd 1h;it WBS payable to stockholdcrs ofrccord as ofMay 12,2006
(2) Total atoclrholdcrs' equity net of goodwill and othcr inhngiblc asscts, divided hy the number ol aharcs o l common stock outstanding a l year-cnd.
(3) Nonintercst cxpcnsca as a percentage of total revenue (net inlercsl incomc plus total noninterest income). Lowcr ratios indicate improved productivity.
NE'T INCOME
$15
:: $4
LOANS, I)EI'OSITS &TOTAL ASSETS
RKI'UIIN ON AVERAGE EQUITY
RETURN ON AVCKAGI' ASSETS
$1000
$900
12 9
nnn
13.50%
1 1 50%
11 00%
10 50%
10 00%
151
' "
142
1 4 0
1.55%
1 35'16
1 3 0 %
1.25%
2002 2003 2004 2005 2006
7002
2003
2004
2005
2006
2002 2003 2004 2005 2006
2002 2003 2004 2005 2006
L E T T E R T O S H A R E H O L D E R S
'It) Our S1i;ireliolders:
T)urinp 2006, Shore Banushares continued to solid-
ify its position as the letiding independent comniunity
tianking organization headqifiirtered on the Dclmarva
Peninsula.
In a very challenging operating environment, we
rcpnrtcd full-ycat net inconir ol'$13.6 million or $1.61
per diluted sharc, up S.2% over the very strong yrar
that wc enjoyed i n 2005. Wc recently incrensrd the cash
dividend to :in annualized rate of $64 per share, which
results in a payoutol39.5% of2006 earnings and a
yield of slightly more th:m 2.5% based on a stock price
ol$25. We also split the srock 3-for-2 during the srcond
rliiarler.
Our banltiiig performance for the full year was
sirlid, with good luan growth throughout the year and a
healthy 11.7u/0 increase in kr income. Thc net interest
margin during 2006 was consistenl with the prior year
at 4.70%1, despite a tough and vriy prrsistent interest
rate scenario combined wilh inleiise competition for
deposits throughout our markets. We d d e d suhstan-
tially to the provision for credit lossrs, primarily in a n
act ol' prudence to account for licalthy loan growth
across the portfcrlios. Overall credit quality remains
excellent, however, and continues to be ;i hallmark of
this organization.
'I'he Company's return on avcragc assets lor thr
year w;is 1.52% and our rcturti on average stockholdrrs'
equity was 12.66%. Total stoclrholdcrs' equity w:is ovrr
$1 11 million at year-end, advancing liy about 9% and
ciiliancing our strong capital position.
At r)cccmber 31,2006, toh1
lion, m a l deposits weir $774 million and loans totaled
$700 million. At a h i e when the ciitirc industry is
working its way through a very dillicult cyclc, wc arc
pleasrd that thr strength and profitability ol Shore
kincshares and its underlying marlxts havc consistent-
ly cnahlcd 11s to produce a healthy return to our sharc-
holders . . . and also enabled u s to generate good organic
bdancc shcct growth.
Spurry succeeds Granville as Board Chairman;
Duncan and Beatty appointed to senior management
d e s ; Cannon retires
A key to our l'uture succcss is tlic dcvclopment ofn
succcssiun plan lor Board leadership and thc senior
management team.
In May, Christophrr E Spuriy was clcctcd f i r serve
as Chairman of the Board of Shore Kmcshmw, suc-
ceeding Kichard C. Granville, who rctnains a I)ireutor.
Mr. Spurty has t u n ;I director o l the Company sincc
April 2004 and a dit'ccT(>r of 'IBlbcit H d i . of Easton,
Maryland since 199s.
'l'he Hoiii-ds of Directors of Shore Hancshares, Inc.
and its subsidiary 'Ihlhot Bank annnunccd in July that
William W. (Buck) Duncan joined lhlbot Hank as its
new President and ChielExrcutivc Officer arid was
appointed to servr as ii Director of Shnrc Rancsharrs.
In a related move, Vice l'rcsidcnt 1,loyd I ,. "Scott"
Beatty, Jr. was promoted to Chief Operating Officer ol'
the holding company. Hc also has srrvrd as a holding
company Ilireclor siiicr 2000 and a 7Mhot Hank
Lhrcctor sincc 1992.
Mr. Hentty most rccenrly was l'rrsi~lent of
Choptank I'xtnrrs mci Managing T)ircctor/CC)O of
Lkirhy Overseas Investments, LTD. Prcviously, Mr.
Heatty had a long and distinguished cnrccr in puhlic
accounting with the firm Heatty, S;itchcll and Company
in a variety o l capacities, including Managing Partner.
Hc has srrved on the linurds of a vuriety of local and
national organizations inclnding Shore ITcalth Systrms.
Eastern Shore Land Conservancy, Talbot IIospicc and
the United Fund ol'lhlbot County. Mr. Beatty will con-
tinue as a Director ol"lhe 'lalbot Bank and Shore
Rancshares, Inc. He graduated lrom the Salishuty
University and earned his Cl'A license in 1976.
From 2004 and until joining 'I'albot Bank, Mr.
Duncan scivcd as Chairman o l Mercantile Eastern
Shore Bank. From 1982 through 2004 he was President
and Chief Executive C)l'her ol'St. Michaels Bank, St.
Michaels, MT), a Mercantile Hanushares
Corporation affiliate. From 1973
through 1982 he was a vice president
and senior 1v:m ollicer oiFirst National
Bank of Maryland in Salisbury From
2001 through 2004 Mr. Tluncan was a
director of the Federal Rcscrvc Rank of
Kichiiiond. IIc was a former director of
'lhlbot Hospice Foundation, Inc., a for-
mer director aiid vice chairman of Shore
Health Systems, Inc. and a director and
past president o l the Rotary ( I u h of
Easton.
11so served on numerous
area hoards, including rhc Llnited Fund
oC'1albol County, the Maryland I3ankcrs
Association, Memorial Hospital at
Eastcrn, Inc. :is :i director :ind Chairman,
thc Academy Art Museum, the
Chcsapcalrc nay Maritime Museum, the
Talbot YMCA, and the 'IAlhot County Chaiiihcr of
Commerce. IIc holds a Trcenihcr, Daniel T Cannon retired l'rorn the
I3oarcl ol'1)irectors and as Executive Vice I'resident 01-
the Chnpiiiiy m d as President and CEO crl'oitr sub-
sidiary 'I'he (;entrcvillc National Rank ofM;irylmd. IIr
btgan his ckii-eer with the company in 1978. A srarch is
currently undenvay for a new President and CEO to
rcplacc Mr. (Cannon in Centrrville.
Expansion efforts to continue on Dclmarva Peninsula
In 2007, we intend to continur our locus on cxpati-
siori. FlToi-ts lo improve our organic growih will be a t
the forefront olour rxpaiision strategy. In rhis respect,
our goal is to improve our marlrct sharc within our
existing footprint by optimizing custonicr service and
efficiency, expanding [lie scope of our prrrducts and
ubstantivr invcstmcnts i n the
existing infrastructurr. We are now a family of fivr suc-
ccssf~il companies, lour of which arc ovcr 100 years old.
Our growth has produced 27 locations, 17 of which arc
hank branches and 10 arc ntm-hank ollicrs associated
with our fcc-based subsidiary husincsscs. Our geo-
graphic footprint in Maiyland aiid rklawarc is conceii-
trated on what we liclicvc io be the brst strategic, natii-
ral siibniarkrts pockets of oppcrrtunity - where the
small tiusincss and population growth rates, prr capita
income and tinusehold spending lcvcls arc above stair
and national averages.
From time t(-r !imc, mmngrmcnt cxplorcs thr pos-
sihility of strarcgic transactions with wcl I-run, sitcccss-
lul community banks, louiiied within dcfined :ire:is of
the Tklmarva TJcninsula. In addition to our l'ocus on
organic growth, wc intend to continue to leverage our
current position as the largest publicly traded financial
holding company hcadyuartered on 1)elniarva and
cxplnrc strategic opportunities as kind when they arise.
Wc hclicvc that nur organization has :i unique and
healthy internal culture. Ry bccoming the "employer ol'
choice" wirhin thc local markets we seive, and then
sustaining that position, we hope to become the "hink
(of choice" within those smie markcts. Local husincss-
cs, professionals and areii households recognize tlic
quality of our cmployccs and the attitudr they bring to
each customcr's banking experirnce. ,4 welcoming
smile, a warm friendly environment aiid in-depth
knowledge of our basic products and seiviccs awaits
each custonicr at cvcry location.
Management strategy has longer-term cmphasis
We arc managing this organization lor longer-
uggcstcd hy the Board's decision to
increase the common stock dividend as well as our
rcccrit substantial investments in new management tal-
cnt and depth, we are confident in our ability to exe-
cute on our slriitegic growth plan as we move into 2007
and beyond. We believe that our Dclmarva markets :ire
healthy and growing, wc arc clearly frrcuserl on the lun-
damrntiils o l good community banking, anrl we brlieve
we are wrll positioned to take advantage ol'uoiisolida-
tion-related disruption in our industry.
The C o m p n y ' s I3oard ul Directors, matiagcmcnt
teiiiii :ind employccs undcrsrand the challenges, risks
arid crppcirtunities that lie ahcad for our industry and
our Bank. \Ye also believe thal Shorc Bancsharcs, Tnc.
is :i most attractive oppcrrtunity lor investors in the
community hank sccror as wrll :is [lie Drlmarva and
midhtlantic marlrctplacr. As always we remain
enthused, commitrcd anrl optimistic ahout our future.
Siticcrcly,
W. Moorhead Verinilyc, Prcsidcnr .& CEO
I
B O A R D S Q F D I R E C T O R S
SHORE BANCSHARES, INC.
THE TALBOT BANK OF EASTON, MARYLAND
THE AVON-DIXON AGENCY
HERHEITI’ I.. ANDREW, 111
Fanner
BLENIIA W ARMISTEAL)
Investor
1,1.OY13 I.. B E A m , JK.
Vice I’residenl Kc COO, Shore Bancshnrcs, Tnc.
PAUL M. BOWMAN
Arroriicy, Law Ollice of I%ul M. l3owtrlan
I)ANII!I I ‘I: CANNON
Execurivc Vice Pi-csident, Shore Hancsharcs, Inc.
l’residenr & CEO, Thc Cenireville Nariotial B;ink uTMD
WIILlAM W. “I3UCEc’ DUNCAN
I’residcnl iind CEO, The ‘lilhor I3ank oIEaslon, MU
THOMAS H. EVANS
Prcsidcnl and CEO, ‘l‘he Fcl~iin n;inli
MARK M. FREES1
Vice Prcsidcnt, Thc Avon-l)ixon Agcncy, LLC
IUCIIARTI C. CKANVII.I.I!
I tivest iir
W EDWIN WX, J K
I’rinfcawr, Univcrsity of I)elaw~arc ;ind
I’resirlcnt ol&c’s Creek I;nrm
NElL I<. I.ei:OMPTE
Ccrlilicd Puhlic Accoutii;rni, Ollicc of Neil I<. I.ci:ornplc
JliRRY B PIERSON
I’rcsidcnl, Jeriy F I’icrsnn, Jnc.
(:IIRTSTOPHEK E SPURRY CIIAIKMRN
I’residcnl, Spurry md Assncinfcr, Inc.
W. MOORHEAD VERMITYE
I’resiilcnl Kc CEO, Shore I3nnc~hiircs, Inc.
Otliccrs
W. Moiirhc;id Vci-iiiilye
Daniel ‘1: i:annnn
Susnn li. 1.cavcrluii
Carol I. Hrowrlawcll
Lloyd I . . l3c:1~y, Jr.
Timothy J. I3crrig;in
I .auric 11. Yurkilous
I’ameln i:. Ilun1
Prmidcn1 Kr CEO
Excci~IIvc Vice I’residenr
‘lic;isurcr
S c w l a r y
Vice President X: i:OO
Vicc Prcaidcnt, Informaliun
Tcchnology
1)ircctor ot MnrlwtinK
Vice 1’1-csident, I lurri;in
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