Shore Bancshares, Inc. · NASDAQ:SHBI

Shore Bancshares — Mid-Atlantic SuperCommunity Bank Conference 2006

32 slides from Shore Bancshares's conference presentation, Nov 6, 2006

  1. Slide 1: Mid-Atlantic SuperCommunity Bank Conference

    Yy \Y, SHORE BANCSHARES, INC. W Banking. Insurance. Investments. Mid-Atlantic SuperCommunity Bank Conference Philadelphia November 6, 2006

  2. Slide 2: SHBI Corporate Overview

    SHBI Corporate Overview Q Family of 5 companies, with FOUR over 100 years old Q Largest Delmarva independent with $934 MM assets, $254.3 MM market cap%, 27 locations (17 bank branches, 10 non-bank offices) Q Weare located in the best strategic, natural submarkets with population growth rates & per c

  3. Slide 3: Presentation Agenda

    Presentation Agenda |. Market Analysis 2. Financial Performance Highlights — Scott Beatty 3. Key Strategic Goals — Scott Beatty 4. Compelling Investment Considerations

  4. Slide 4: SHBI Delmarva Market

    SHBI DELMARVA MARKET New York City Pennsylvania NJ Philadelphiax Baltimore x Je Wash., DC * Baltimore’? mo x ‘ Virginia Washington, DC: Richmond * * Richmond Norfolk*

  5. Slide 5: Locations

    27 LOCATIONS Ox LF) . Felton Milford e DELAWARE y 2 ‘SHORE BANCSHARES, INC, Banking, Insurance, lavestinents, Ga THe TALBOT BANK (4 CENTREVILLE NATIONAL BANK FEY AVON DIXON INSURANCE. Gi Fetron aan GU we trust services, (1 we morrGAce GRour A Loan Production Offices

  6. Slide 6: Vision

    Vision “The strength of our markets has created the opportunity to historically outperform our peers, and we intend to dominate every market within our footprint.”

  7. Slide 7: Current Year Highlights (9/30/06)

    Shore Bancshares, Inc. Current Year Highlights (9/30/06) Return on Average Assets 1.60% Return on Average Equity 13.22% Average Equity/Average Assets 12.07% Net Interest Margin 4.80% Non-interest Income 25.96% Efficiency Ratio 53.89%

  8. Slide 8: ROAE and Equity/Assets vs. peers

    PERCENT ROAE 2002 2003 2004 2008 YEARS SHB! SNL Small Cap (Market Cap $250MM-S1B) BSNL Bank $18-$5B (Assets) CISNL Mid-Atlantic Bank (96 Public Banks in MD, DE, DC, NJ, PA NY) YTD 6-20 PERCENT EQUITY/ASSETS 2002 2003 2008 YEARS 2005 y620

  9. Slide 9: Net Interest Margin

    PERCENT NET INTEREST MARGIN @ SHBI G SNL Small Cap Bank m SNL Bank $1B - $58 O SNL Mid-Atlantic Bank 2002 2003 2004 2005 YTD 6-30 YEARS

  10. Slide 10: Noninterest Income/Operating Revenue

    PERCENT 20 10 NONINTEREST INCOME/OPERATING REVENUE | SHBI BSNL Small Cap Bank Ml SNL Bank $18 -$58 O.SNL Mid-Atlantic Bank 2002 2003 2004 2005 YTD 6-30 YEARS

  11. Slide 11: Efficiency Ratio

    EFFICIENCY RATIO PERCENT SNL Mid-Atlantic Bank SNL Bank $1B - $5B SNL Small Cap Bank 2002 SHBI 2003 5904 6 YTD YEARS S30 @SHBI @ SNL Small Cap Bank @ SNL Bank $1B - $5B O SNL Mid-Atlantic Bank

  12. Slide 12: Key Strategic Goals: Profitability

    Key Strategic Goals Oo Profitability Maintain NIM > 3.50 Maintain core bank efficiency ratio <55% Generate >25% non-interest income as percentage of total revenue Maintain NPAs <1% Maintain dividend payout ratio >40%

  13. Slide 13: Key Strategic Goals: Growth

    Key Strategic Goals Growth Q Make “institutional” branching decisions Q Commitment to invest in infrastructure to support growth Q Execute 3-prong acquisition strategy (insurance, asset management, banks) Q Dominate all sub-markets within our footprint

  14. Slide 14: Focus on Execution Ensures Success

    Focus on Execution Ensures Success » We concentrate only on Delmarva Peninsula » Our Management Team has talent & unique skills » NWe follow a “dynamic” strategic plan » Weare focused on correct elements to execute

  15. Slide 15: Compelling Investment Considerations

    Compelling Investment Considerations » Track record of results v Diversity of revenue sources VY Organizational depth » Focused on creating sustainable competitive advantages » Scarcity of investment opportunities y 5 year total return = 354.28%

  16. Slide 16: Mid-Atlantic SuperCommunity Bank Conference

    Yy \Y, SHORE BANCSHARES, INC. W Banking. Insurance. Investments. Mid-Atlantic SuperCommunity Bank Conference Philadelphia November 6, 2006 16

  17. Slide 17: Addendum

    ADDENDUM qe

  18. Slide 18: SHBI Management Team

    SHBI Management Team Talent, depth, unique skills + W. Moorhead Vermilye, 66, Director of SHBI since December 2000, Director of Talbot Bank since 1977. President & CEO of SHBI + Lloyd L. Beatty, Jr., 54, CPA, Director of SHBI since December 2000, Director of Talbot Bank since 1992. Vice President &

  19. Slide 19: Selected SHBI Market Highlights

    Selected SHBI Market Highlights * Five year population growth in 7-county SHBI footprint to exceed 8.8%, which is double the national growth rate. Projected 5-year population growth in 4 of 7 counties exceeds 14% * Current median age in 7-county market is 40 years old. * {verge household income to i

  20. Slide 20: Market Demographics

    Market Demographics - (Shore Bancshares, Inc.) ‘Shore Bancshares, Inc. (NASDAQ: SHEI) Market: County Delaware (DE) ‘County Market Number of Company Deposit Percent Percent Total Population Projected Median HH Hilincome | Projected ‘ent "Sranches—Depoatain ‘Maret ‘at Population 208 "change Popuation

  21. Slide 21: Deposit Market Share: Kent, DE

    Deposit Market Share ‘Shore Bancshares, Inc. (NASDAQ: SHBI) Kent, DE 2005 2004 natiution (ST) Type 72005 2005 Total 2005 Toul 2004 Total 2008 Total Rank Rank Number of Deposits in Market Deposits in market Branches Market ($000) Share (%)_Market ($000) _Share (%) 71 Wiimington Trost Comp (OE) Bane 5

  22. Slide 22: Deposit Market Share: Sussex, DE

    Deposit Market Share ‘Shore Bancshares, Inc. (NASDAQ: SHB] 2005 2004 stitution (ST) Tee 2005 2005 Total 2005 Total 2004 Total 2008 Total Rank Rank Number of Deposits in Market Doposits in Market Branchos__Markot ($000) __Sharo%)_Markot (S000) __Sharo (%) TT Wairinaton Trost Corp OE Bank 7 735259 29.

  23. Slide 23: Deposit Market Share: Caroline, MD

    Deposit Market Share ‘Shore Bancshares, Inc. (NASDAQ: SHBI) Caroline, MD 2005 2004 stitution (ST) Tee 20052005 Total 2005 Total 2004 Total 2008 Total Rank Rank Numberof Deposits in Market Deposits in Market Branches Market ($000) Share %)__Market (S000) __Share (%) 71 PSS Halaing Com (Dy mae 3 116.2

  24. Slide 24: Deposit Market Share: Dorchester, MD

    Deposit Market Share Shore Bancshares, Inc. (NASDAQ: SHBI) Dorchester, MD 2005 2004 instution (ST) Tyee 70052005 Total 2005 Toul 2008 Total 2008 Tou Rank Rank Number of Deposits in Market Deposits in Market Branches Market (S000) Share (%) __Market (5000) __share (%) 71 Baimarva Bancshares ine (iD)

  25. Slide 25: Deposit Market Share: Kent, MD

    Deposit Market Share Shore Bancshares, Inc. (NASDAQ; SHBI) Kent, MD 2008 2004 natiation (67) Te 2005 2005 Total 2005 Total 2004 Total 2008 Total Rank Rank Number of Doposit in Market Doposits in Market ches Market ($000) _Share('s) _Market $000) _Share ¥) 71 Peoples Bancorp ncorporaed (0) Bank a 162

  26. Slide 26: Deposit Market Share: Queen Anne's, MD

    Deposit Market Share ‘Shore Bancshares, Inc. (NASDAQ: SHBI) Queen Anne's, MD 2005 2004 institution (7) Tyre 2005 2005 Total 2008 Total 2008 Total 2008 Total Rank Rank Numberof Deposits in Market Deposits in Market Branches Market ($000) Share (%)__Market ($000) Share (%) T_T Queenstown Bancorp of ND

  27. Slide 27: Deposit Market Share: Talbot, MD

    Deposit Market Share ‘Shore Bancshares, Inc. (NASDAQ: SHBI) Talbot, MD 2005 2004 ination 67) Wee 2005 2005 Total 2005 Total 2004 Total 2008 Total Rank Rank Number of Deposit in Market Deposits in Branches Market ($000) __Share(%4)__Markot ($000) __Sharo (%) 71 Shore Bancshares ne. (HD) Bank 4 363,60

  28. Slide 28: 2005 Record Year

    DOLLARS IN MILLIONS. 2005 Record Year NET INCOME $14 $12.9 $129 $10.2 J $9.5 $10 $8.0 $8.8 $84 $6 4 $44 $2.4 $0 2001 2002 2003 2004 2005 $900 $800 $700 7 $600 $500 $400 $300 DOLLARS IN MILLIONS $200 $100 Loans |B Deposits $0 Total Assets 2001 2002 2003 LOANS, DEPOSITS & TOTAL ASSETS 7391 2004 2005 2

  29. Slide 29: SHBI vs. SNL Small Cap Bank Index

    SHBI vs. SNL SMALL CAP BANK INDEX §250MM-S1B Market Cap INDEX INDEX SHBI SHBI 2005 Y 06/06. 2005 Y 06/06 @ YTD Period Ended 12/91/2005 6/20/2008 12/91/2008 6/20/2008 Number of Companies 127 144 1 1 ROAA (%) 17 145 1.57 1.70 Core ROAA (%) 118 145 1.57 4.70 ROAE (%) 12.83 12.40 13.20 13.93 Core ROAE (

  30. Slide 30: SHBI vs. SNL Bank Index $1B-$5B Assets

    SHBI vs. SNL BANK INDEX $1B-$5B ASSETS (Asset Size) INDEX INDEX SHBI SHBI (Asset Size) 2005 Y 06106 2005 Y 06/06 @ YTD Period Ended 1281/2005 6/30/2006 12/91/2005 6/30/2006 Number of Companies 153 158 1 1 ROAA (%) 112 112 187 1.70 Core ROAA (94) 447 112 187 4.70 ROAE (%) 1250 12.14 13.20 13.93 Core

  31. Slide 31: SHBI vs. SNL Mid-Atlantic Bank Index

    SHBI vs. SNL MID-ATLANTIC BANK INDEX MD, DC, DE, PA, NJ, NY Public Banks INDEX INDEX SHBI SHBI 2005 Y 06/060 2005 06/06 Q YTD Period Ended 12/91/2008 6/30/2006 1281/2005 6/30/2006 Number of Companies 7 98 1 1 ROAA (%) 140 122 187 4.70 Core ROAA (%) 1.00 1.03 1.87 4.70 ROAE (%) 1673 15.24 13.20 13.93

  32. Slide 32: Shore Bancshares, Inc.

    y VY SHORE BANCSHARES, ING. Banking. Insurance. Investments. Mid-Atlantic SuperCommunity Bank Conference Philadelphia November 6, 2006 32

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