Easton-based Shore Bancshares, Inc. reported net income of $4.058 million or $0.32 per diluted common share for the first quarter of 2018, compared to net income of $2.698 million or $0.21 per diluted common share for the fourth quarter of 2017 and net income of $2.8 million or $0.22 per diluted common share for the first quarter of 2017.
Company President and CEO Lloyd L. “Scott” Beatty, Jr. said despite earnings that came in lower than its expectations, the company was able to remove a significant long-standing troubled debt from its books, which resulted in a $379,000 charge-off during the quarter.
Excluding that charge off, the quarter was in line with Shore’s target of $0.35 per share. Loan growth remained strong with $26.4 million added to the portfolio for the quarter, which translates to 9.7 percent annualized growth for 2018. Beatty said the firm remains committed to positioning itself for growth and will continue to seek opportunities to improve earnings.
When comparing the first quarter of 2018 to the fourth quarter of 2017, the main reason for the improved results was a decrease in the federal income tax rate of 35 percent to 21 percent which became effective Jan. 1. This lower enacted tax rate and the one-time adjustment for re-measurement of the net deferred tax assets in the fourth quarter of 2017 resulted in a decrease in income tax expenses of $1.6 million for the first quarter of 2018.
This reduction in income tax expense coupled with an increase of $590,000 in noninterest income, was partially offset by an increase in noninterest expense of $830,000. When comparing the first quarter of 2018 to the first quarter of 2017, the primary reasons for the improved results were the previously mentioned decrease in federal income taxes, increases in net interest income of $2.4 million and noninterest income of $122,000, partially offset by an increase in noninterest expenses of $1.8 million.