PARENT COMPANY FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2015

NOTE 25. PARENT COMPANY FINANCIAL INFORMATION

The following tables provide condensed financial information for Shore Bancshares, Inc. (Parent Company Only).

Condensed Balance Sheets

December 31,

(Dollars in thousands)	2015		2014
Assets
Cash	$	1,899	$	2,101
Investment securities		12,246		9,723
Investment in subsidiaries		129,353		126,857
Premises and equipment, net		3,598		3,158
Other assets		2,419		1,329
Total assets	$	149,515	$	143,168

Liabilities
Accrued interest payable	$	1	$	1
Other liabilities		1,204		855
Long-term debt		1,343		1,843
Total liabilities		2,548		2,699

Stockholders’ equity
Common stock		126		126
Additional paid in capital		63,815		63,532
Retained earnings		83,097		76,495
Accumulated other comprehensive income (loss)		(71)		316
Total stockholders’ equity		146,967		140,469

Total liabilities and stockholders’ equity	$	149,515	$	143,168

Condensed Statements of Operations

For the Years Ended December 31,

(Dollars in thousands)	2015		2014		2013
Income
Dividends from subsidiaries	$	1,045	$	200	$	2,163
Management and other fees from subsidiaries		8,723		7,933		6,226
Other income		228		110		31
Total income		9,996		8,243		8,420

Expenses
Interest expense		61		80		88
Salaries and employee benefits		5,536		5,321		4,447
Occupancy and equipment expense		325		541		508
Other operating expenses		3,215		2,387		1,853
Total expenses		9,137		8,329		6,896

Income (loss) before income tax benefit and equity in undistributed net income (loss) of subsidiaries		859		(86)		1,524
Income tax benefit		(65)		(107)		(61)
Income before equity in undistributed net income (loss) of subsidiaries		924		21		1,585

Equity in undistributed net income (loss) of subsidiaries		6,184		5,030		(11,219)
Net income (loss)	$	7,108	$	5,051	$	(9,634)

Condensed Statements of Cash Flows

For the Years Ended December 31,

(Dollars in thousands)	2015		2014		2013
Cash flows from operating activities:
Net income (loss)	$	7,108	$	5,051	$	(9,634)
Adjustments to reconcile net (income) loss to cash provided by operating activities:
Equity in undistributed net (income) loss of subsidiaries		(6,184)		(5,030)		11,219
Depreciation and amortization		336		379		386
Stock-based compensation expense		283		87		78
Excess tax benefit from stock-based arrangements		(3)		-		(26)
Net (increase) decrease in other assets		(1,108)		(121)		128
Net increase (decrease) in other liabilities		328		271		(53)
Net cash provided by operating activities		760		637		2,098

Cash flows from investing activities:
Proceeds from maturities and principal payments of investment securities available for sale		1,418		442		-
Purchases of securities		(4,054)		(10,112)		-
Purchases of premises and equipment		(672)		(632)		(307)
Cash received from merged subsidiary		3,349
Investment in subsidiaries		-		(20,000)		(1,650)
Net cash provided by (used in) investing activities		41		(30,302)		(1,957)

Cash flows from financing activities:
Repayment of long-term debt		(500)		(500)		-
Excess tax benefit from stock-based arrangements		3		-		26
Proceeds from issuance of common stock		-		31,279		-
Common stock dividends paid		(506)		-		-
Net cash (used in) provided by financing activities		(1,003)		30,779		26

Net (decrease) increase in cash and cash equivalents		(202)		1,114		167
Cash and cash equivalents at beginning of year		2,101		987		820
Cash and cash equivalents at end of year	$	1,899	$	2,101	$	987