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Shore Bancshares net income drops amid losses from credit card fraud
Easton-based Shore Bancshares Inc. Friday reported a drop in net income for the first quarter of 2024 amid unexpected losses incurred from credit card fraud.
Net income dropped to $8.2 million or $0.25 per diluted common share compared from $10.5 million or $0.32 per diluted common share for the fourth quarter of 2023.
On April 2, the bank became aware it had been subjected to fraudulent credit card account openings during the first quarter of 2024 and commenced an investigation. Individuals used stolen personal information to open bank-issued credit cards through its online credit card activation system, costing the bank $4.3 million in unexpected fraud-related expenses in the first quarter of 2024.
The majority of the fraud loss, approximately $3.6 million, or 84%, occurred between March 25 and April 2, but bank officials said they do not anticipate additional losses related to this event.
In coordination with the bank’s credit card processor, management is evaluating the root causes of the fraud event and the preventative and monitoring controls that would have mitigated the fraud loss.
