UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM 10-Q/A
AMENDMENT NO. 1
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2004
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 0-22345
-------
SHORE BANCSHARES, INC.
----------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1974638
------------------------------ ------------------
State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
18 East Dover Street, Easton, Maryland 21601
--------------------------------------- ------------------
(Address of Principal Executive Offices) (Zip Code)
(410) 822-1400
--------------
Registrant's Telephone Number, Including Area Code
N/A
------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days Yes X No
---
Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act). Yes X No
---- ------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of September 30, 2004, registrant had 5,513,619 issued and outstanding
--------------------------------------------------------------------------------
shares of common stock.
----------------------
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-Q/A amends the Quarterly Report on Form
10-Q for the quarter ended June 30, 2004 to reflect purchase accounting
adjustments relating to the goodwill and deferred tax assets recognized in the
acquisition of Midstate Bancorp on April 1, 2004. The amounts reported in the
unaudited Condensed Consolidated Balance Sheet for June 30, 2004 for "Goodwill"
and "Other assets" have been adjusted. To preserve the nature and character of
the disclosures set forth in Item 1 of Part 1 as originally filed, this
Amendment No. 1 speaks as of the date of the original filing and the registrant
has not updated the disclosures to speak as of a later date. All information
contained in this Amendment No. 1 is subject to updating and supplementing as
provided in the registrant's reports filed with the Securities and Exchange
Commission subsequent to the date of the original filing of the Quarterly Report
on Form 10-Q. Pursuant to Exchange Act Rule 12b-15, new certifications are
supplied as Exhibits 31.1, 31.2, and 32.1.
- 2 -
INDEX
Part I - Financial Information
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
June 30, 2004 (unaudited) and December 31, 2003 4
Condensed Consolidated Statements of Income -
For the three and six months ended June 30, 2004 and 2003 (unaudited) 5
Condensed Consolidated Statements of Changes in Stockholders' Equity -
For the six months ended June 30, 2004 and 2003 (unaudited) 6
Condensed Consolidated Statements of Cash Flows -
For the six months ended June 30, 2004 and 2003 (unaudited) 7
Notes to Condensed Consolidated Financial Statements (unaudited) 8-10
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 11-12
Signatures 12
- 3 -
Part I
Item 1. Financial Statements
SHORE BANCSHARES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
June 30, December 31,
ASSETS: 2004 2003
------- --------------- --------------
(unaudited)
Cash and due from banks $ 22,779 $ 19,391
Interest bearing deposits with other banks 5,977 9,897
Federal funds sold 32,429 17,443
Investment securities:
Held-to-maturity, at amortized cost (fair value of $15,229,
$15,585, respectively) 15,351 15,313
Available for sale, at fair value 122,389 144,368
Loans, less allowance for credit losses ($4,331,
$4,060, respectively) 547,165 470,895
Insurance premiums receivable 642 845
Premise and equipment, net 12,430 11,302
Accrued interest receivable on loans and investment securities 3,042 3,042
Investment in unconsolidated subsidiary 843 1,203
Goodwill 8,626 5,990
Other intangible assets 2,411 1,581
Other assets 5,892 4,109
----------- -----------
TOTAL ASSETS $779,976 $705,379
======== ========
LIABILITIES:
-----------
Deposits:
Noninterest bearing demand $ 94,937 $ 91,669
NOW and Super NOW 113,565 103,415
Certificates of deposit $100,000 or more 90,295 71,385
Other time and savings 354,497 325,940
------- ---------
Total Deposits 653,294 592,409
Short term borrowings 28,726 20,957
Long term debt 5,000 5,000
Other liabilities 4,098 3,486
--------- ----------
TOTAL LIABILITIES 691,118 621,852
------- --------
STOCKHOLDERS' EQUITY:
--------------------
Common stock, par value $.01; authorized 35,000,000 shares; issued and
outstanding:
June 30, 2004 5,512,309
December 31, 2003 5,400,793 55 54
Additional paid in capital 27,950 24,231
Retained earnings 62,084 58,932
Accumulated other comprehensive income (loss) (1,231) 310
-------- -------
TOTAL STOCKHOLDERS' EQUITY 88,858 83,527
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $779,976 $705,379
======== ========
See accompanying notes to Condensed Consolidated Financial Statements.
- 4 -
SHORE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
Three months ended June 30, Six months ended June 30,
2004 2003 2004 2003
---- ---- ---- ----
INTEREST INCOME
Loans, including fees $8,013 $ 7,362 $15,162 $14,591
Interest and dividends on investment securities:
Taxable 1,099 1,015 2,292 2,147
Tax-exempt 150 142 304 289
Other interest income 83 123 137 242
----- ------- -------- --------
Total interest income 9,345 8,642 17,895 17,269
----- ------ ------ ------
INTEREST EXPENSE
Certificates of deposit, $100,000 or more 584 627 1,141 1,318
Other deposits 1,569 1,787 3,040 3,643
Other interest 105 114 205 223
------ ------- ------- -------
Total interest expense 2,258 2,528 4,386 5,184
----- ------ ------ -----
NET INTEREST INCOME 7,087 6,114 13,509 12,085
PROVISION FOR CREDIT LOSSES 100 70 205 160
-------- ------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES 6,987 6,044 13,304 11,925
----- ------ ------ ------
NONINTEREST INCOME
Service charges on deposit accounts 658 495 1,153 955
Gain (loss) on sale of securities (2) 81 14 358
Insurance agency commissions 1,499 1,520 3,408 3,329
Other noninterest income 497 388 955 781
------ ------ ------ ------
Total noninterest income 2,652 2,484 5,530 5,423
----- ----- ----- -----
NONINTEREST EXPENSE
Salaries and employee benefits 3,530 3,025 6,648 6,074
Expenses of premises and equipment 574 482 1,163 975
Other noninterest expense 1,482 1,227 2,988 2,506
----- ------- ----- -------
Total noninterest expense 5,586 4,734 10,799 9,555
----- ------ ------- -------
INCOME BEFORE TAXES ON INCOME 4,053 3,794 8,035 7,793
Federal and State income taxes 1,453 1,338 2,919 2,816
----- ------- ----- -----
NET INCOME $2,600 $2,456 $5,116 $4,977
====== ====== ====== ======
Basic earnings per common share $.47 $.46 $.94 $.93
Diluted earnings per common share $.47 $.45 $.93 $.91
Dividends declared per common share $.18 $.17 $.36 $.32
See accompanying notes to Condensed Consolidated Financial Statements.
- 5 -
SHORE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
(Dollars in thousands)
Accumulated
Additional other Total
Common Paid in Retained Comprehensive Stockholders'
Stock Capital Earnings Income(loss) Equity
------------------- -----------------------------------------------
Balances, January 1, 2004 $ 54 $ 24,231 $ 58,932 $310 $83,527
Comprehensive income:
Net income - - 5,116 - 5,116
Other comprehensive income, net of tax:
Unrealized loss on available for sale
securities - - - (1,541) (1,541)
--------
Total comprehensive income 3,575
--------
Shares issued 1 3,719 - - 3,720
Cash dividends paid $0.36 per share - - (1,964) - (1,964)
------ -------- -------- --------- --------
Balances, June 30, 2004 $ 55 $ 27,950 $ 62,084 $ (1,231) $ 88,858
====== ======== ======== ========= ========
Balances, January 1, 2003 $ 54 $ 23,837 $ 52,985 $1,152 $78,028
Comprehensive income:
Net income - - 4,977 - 4,977
Other comprehensive income, net of tax:
Unrealized loss on available for sale
securities - - - (614) (614)
--------
Total comprehensive income 4,363
--------
Shares issued - 71 - - 71
Cash dividends paid $0.32 per share - - (1,720) - (1,720)
----- -------- -------- ------- --------
Balances, June 30, 2003 $ 54 $ 23,908 $ 56,242 $ 538 $ 80,742
===== ======== ======== ======= ========
See accompanying Notes to Condensed Consolidated Financial Statements
- 6 -
SHORE BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
For the Six Months Ended June 30,
2004 2003
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 5,116 $ 4,977
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 717 772
Discount accretion on debt securities (51) (21)
Provision for credit losses, net (119) 62
Gain on sale of securities (14) (358)
Loss on other real estate owned - 8
Equity in earnings of unconsolidated subsidiary (20) -
Net changes in:
Insurance premiums receivable 202 (418)
Accrued interest receivable 232 149
Other assets (689) (1,026)
Accrued interest payable on deposits 25 (163)
Accrued expenses 274 (99)
-------- ---------
Net cash provided by operating activities 5,673 3,883
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and principal payments of securities
available for sale 39,360 58,192
Proceeds from sale of investment securities available for sale 7,867 4,685
Purchase of securities available for sale (17,682) (57,318)
Proceeds from maturities and principal payments of securities
held to maturity 1,287 1,145
Purchase of securities held to maturity (1,340) (2,875)
Net increase in loans (38,303) (17,226)
Proceeds from sale of loans - 621
Purchase of premises and equipment (697) (455)
Purchase of other real estate owned (60) -
Proceeds from sale of other real estate owned - 37
Proceeds from sale of investment in unconsolidated subsidiary 380 -
Acquisition, net of stock issued (235) -
--------- -----------
Net cash used in investing activities (9,423) (13,194)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand, NOW, money market and
savings deposits 872 23,574
Net increase (decrease) in certificates of deposit 11,017 (9,783)
Net increase in securities sold under agreement to repurchase 7,768 2,800
Proceeds from issuance of common stock 511 71
Dividends paid (1,964) (1,720)
--------- ----------
Net cash provided by financing activities 18,204 14,942
--------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 14,454 5,631
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 46,731 69,468
--------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 61,185 $ 75,099
========= ==========
See accompanying notes to Condensed Consolidated Financial Statements
- 7 -
Shore Bancshares, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1) The consolidated financial statements include the accounts of Shore
Bancshares, Inc. (the "Company") and its subsidiaries with all significant
intercompany transactions eliminated. The consolidated financial statements
conform to accounting principles generally accepted in the United States of
America and to prevailing practices within the banking industry. The
accompanying interim financial statements are unaudited; however, in the
opinion of management all adjustments necessary to present fairly the
financial position at June 30, 2004, the results of operations for the
three- and six-month periods ended June 30, 2004 and 2003, and cash flows
for the six-month period ended June 30, 2004 and 2003, have been included.
The amounts as of December 31, 2003 were derived from audited financial
statements. All such adjustments are of a normal recurring nature. The
results of operations for the three- and six-month periods ended June 30,
2004 are not necessarily indicative of the results to be expected for the
full year. The consolidated financial statements and related notes
contained herein should be read in conjunction with the audited
consolidated financial statements and related notes included in the
Company's Annual Report on Form 10-K, as amended by Amendment No. 1 on Form
10-K/A, for the year ended December 31, 2003.
2) Year to date basic earnings per share is derived by dividing net income
available to common stockholders by the weighted average number of common
shares outstanding during the period of 5,451,928 shares for 2004 and
5,373,484 shares for 2003. The diluted earnings per share calculation is
derived by dividing net income by the weighted average number of shares
outstanding, adjusted for the dilutive effect of outstanding options and
warrants. Considering the effect of these common stock equivalents, the
adjusted average shares for the six months ended June 30, 2004 and 2003
were 5,497,949 and 5,463,656, respectively. As of June 30, 2004, there were
4,000 shares excluded from the diluted net income per share computation
because the exercise price of related options exceeded the average market
price of those shares and, therefore, their effect would be anti-dilutive.
No shares were excluded from the diluted net income per share computation
as of June 30, 2003.
3) Under the provisions of Statements of Financial Accounting Standards (SFAS)
Nos. 114 and 118, "Accounting by Creditors for Impairment of a Loan", a
loan is considered impaired if it is probable that the Company will not
collect all principal and interest payments according to the loan's
contracted terms. The impairment of a loan is measured at the present value
of expected future cash flows using the loan's effective interest rate, or
at the loan's observable market price or the fair value of the collateral
if the loan is collateral dependent. Interest income generally is not
recognized on specific impaired loans unless the likelihood of further loss
is remote. Interest payments received on such loans are applied as a
reduction of the loans principal balance. Interest income on other
nonaccrual loans is recognized only to the extent of interest payments
received.
Information with respect to impaired loans and the related valuation allowance
is shown below:
June 30, December 31,
(Dollars in thousands) 2004 2003
---------------------------------------------------------------------------------------------------------------------------
Impaired loans with valuation allowance $ 529 $ 729
Impaired loans with no valuation allowance 740 273
------ ---------
Total impaired loans $1,269 $ 1,002
====== =========
Allowance for credit losses applicable to impaired loans $ 318 $ 349
Allowance for credit losses applicable to other than impaired loans 4,013 3,711
------ ---------
Total allowance for credit losses $4,331 $ 4,060
====== =========
Interest income on impaired loans recorded on the cash basis $ 7 $ 26
====== =========
Impaired loans do not include groups of smaller balance homogenous loans
such as residential mortgage and consumer installment loans that are
evaluated collectively for impairment. Reserves for probable credit losses
related to these loans are based upon historical loss ratios and are
included in the allowance for credit losses.
4) In the normal course of business, to meet the financial needs of its
customers, the Company's bank subsidiaries are parties to financial
instruments with off-balance sheet risk. These financial instruments
include commitments to extend credit and standby letters of credit. At June
30, 2004, total commitments to extend credit were approximately
$110,036,000. Outstanding letters of
- 8 -
credit were approximately $5,779,000 at June 30, 2004.
5) The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-based Compensation" and SFAS No. 148 "Accounting for
Stock-Based Compensation - Transition and Disclosure", but applies APB
Opinion No. 25 and related interpretations in accounting for its plans. No
compensation expense related to the plans was recorded during the
three-month periods ended June 30, 2004 and 2003. If the Company had
elected to recognize compensation cost based on fair value at the vesting
dates for awards under the plans consistent with the method prescribed by
SFAS No. 123, net income and earnings per share would have been changed to
the pro forma amounts as follows:
Six-month period ended June 30,
2004 2003
---- ----
Net income:
As reported $5,116 $4,977
Less pro forma stock-based compensation
expense determined under the fair value
method, net of related tax effects (11) (63)
-------- --------
Pro forma net income $5,105 $4,914
======== ========
Basic net income per share:
As reported $0.94 $0.93
Pro forma 0.94 0.91
Diluted earnings per share
As reported 0.93 $0.91
Pro forma 0.93 0.90
Three-month period ended June 30,
2004 2003
---- ----
Net income:
As reported 2,600 $2,456
Less pro forma stock-based compensation
expense determined under the fair value
method, net of related tax effects (5) (33)
------ ---------
Pro forma net income $2,595 $2,423
====== =========
Basic net income per share:
As reported $0.47 $0.46
Pro forma 0.47 0.45
Diluted earnings per share
As reported 0.47 $0.45
Pro forma 0.47 0.44
The pro forma amounts are not representative of the effects on reported net
income for future periods.
6) The Company operates two primary businesses: Community Banking; and
Insurance Products and Services. Through the Community Banking business,
the Company provides services to consumers and small businesses on the
Eastern Shore of Maryland and Delaware through the Company's 14-branch
network. Community banking activities include small business services,
retail brokerage, and consumer banking products and services. Loan products
available to consumers include mortgage, home equity, automobile, marine,
and installment loans, credit cards and other secured and unsecured
personal lines of credit. Small business lending includes commercial
mortgages, real estate development loans, equipment and operating loans, as
well as secured and unsecured lines of credit, credit cards, accounts
receivable financing arrangements, and merchant card services.
- 9 -
Through the Insurance Products and Services business, the Company provides
a full range of insurance products and services to businesses and consumers
in the Company's market areas. Products include property and casualty,
life, marine, individual health and long-term care insurance. Pension and
profit sharing plans and retirement plans for executives and employees are
available to suit the needs of individual businesses.
Selected financial information by line of business for the six months ended
June 30, is included in the following table:
-----------------------------------------------------------------------------------------------------------------------------------
Community Insurance products Parent Intersegment Consolidated
(In thousands) banking and services Company(a) Transactions Total
-----------------------------------------------------------------------------------------------------------------------------------
2004
Net Interest income $ 13,508 $ - $ 1 $ - $ 13,509
Provision for credit losses 205 - - - 205
-------------------------------------------------------------------------------------
Net interest income after provision 13,303 - 1 - 13,304
Noninterest income 1,956 3,537 1,132 (1,095) 5,530
Noninterest expense 8,011 2,766 1,117 (1,095) 10,799
------------------------------------------------------------------------------------
Income before taxes 7,248 771 16 - 8,035
Income tax expense 2,608 305 6 - 2,919
------------------------------------------------------------------------------------
Net income $ 4,640 $466 $ 10 $ - $ 5,116
-----------------------------------------------------------------------------------
Intersegment revenue(expense) $ (978) $ (102) $ 1,080 $ - $ -
Average assets $755,625 $6,830 $3,289 - $765,744
2003
Net Interest income $ 12,087 $ (14) $ 12 $ - $ 12,085
Provision for credit losses 160 - - - 160
--------------------------------------------------------------------------------------
Net interest income after provision 11,927 (14) 12 - 11,925
Noninterest income 1,966 3,377 736 (656) 5,423
Noninterest expense 7,021 2,540 650 (656) 9,555
-----------------------------------------------------------------------------------
Income before taxes 6,872 823 98 - 7,793
Income tax expense 2,452 325 39 - 2,816
------------------------------------------------------------------------------------
Net income $ 4,420 $ 498 59 $ - $ 4,977
-----------------------------------------------------------------------------------
Intersegment revenue(expense) $ (642) $ (14) $ 656 - $ -
Average assets $647,825 $ 6,387 $ 539 - $654,751
(a) Amount included in Parent Company in 2004 relate to services provided to
subsidiaries by the holding company and rental income.
7) On April 1, 2004, the Company completed its merger with Midstate Bancorp,
Inc., a Delaware bank holding company ("Midstate Bancorp"). Pursuant to the
merger agreement, each share of common stock of Midstate Bancorp was
converted into the right to receive (i) $31.00 in cash, plus (ii) 0.8732
shares of the common stock of the Corporation, with cash being paid in lieu
of fractional shares at the rate of $33.83 per share. The Company paid
$2,953,710 in cash and issued 82,786 shares of common stock to stockholders
of Midstate Bancorp in connection with the merger. The Company recorded
approximately $2,636,000 of goodwill and $968,000 of other intangible
assets as a result of the acquisition.
- 10 -
Part II
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits:
3.1 Shore Bancshares, Inc. Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3.1 on Form 8-K filed by Shore
Bancshares, Inc. on December 14, 2000).
3.2 Shore Bancshares, Inc. Amended and Restated By-Laws (incorporated by
reference to Exhibit 3.2 on Form 8-K filed by Shore Bancshares, Inc.
on December 14, 2000).
10.1 Form of Employment Agreement with W. Moorhead Vermilye (incorporated
by reference to Appendix XIII of Exhibit
2.1 on Form 8-K filed by Shore Bancshares, Inc. on July 31, 2000).
10.2 Form of Employment Agreement with Daniel T. Cannon (incorporated by
reference to Appendix XIII of Exhibit 2.1 on Form 8-K filed by Shore
Bancshares, Inc. on July 31, 2000).
10.3 Form of Employment Agreement between The Avon-Dixon Agency, LLC and
Kevin P. LaTulip (incorporated by reference to Exhibit 10.3 of the
Company's Annual Report on Form 10-K for the year ended December 31,
2002).
10.4 Form of Supplemental Retirement Plan Agreement and Life Insurance
Endorsement Method Split Dollar Plan Agreement between The Centreville
National Bank of Maryland and Daniel T. Cannon (incorporated by
reference to Exhibit 10.4 of the Company's Quarterly Report on Form
10-Q for the period ended June 30, 2003).
10.5 Form of Life Insurance Endorsement Method Split Dollar Plan Agreement
between The Centreville National Bank of Maryland and Daniel T. Cannon
(incorporated by reference to Exhibit 10.5 of the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 2003).
10.6 Employment Agreement between The Avon-Dixon Agency, LLC and Steven
Fulwood.*
31.1 Certifications of the CEO pursuant to Section 302 of the
Sarbanes-Oxley Act (filed herewith).
31.2 Certifications of the PAO pursuant to Section 302 of the
Sarbanes-Oxley Act (filed herewith).
32.1 Certifications of the CEO and the PAO pursuant to 18 U.S.C. ss. 1350
(furnished herewith)
99.1 Shore Bancshares, Inc. 1998 Employee Stock Purchase Plan, as amended
and restated (incorporated by reference to Appendix A of the Company's
Definitive Proxy Statement on Schedule 14A for the 2003 Annual Meeting
of Stockholders, filed on March 31, 2003).
99.2 1998 Stock Option Plan (incorporated by reference from the Shore
Bancshares, Inc. Registration Statement on Form S-8 filed on September
25, 1998 (Registration No. 333-64319)).
99.3 Talbot Bancshares, Inc. Employee Stock Option Plan (incorporated by
reference from the Shore Bancshares, Inc. Registration Statement on
Form S-8 filed on May 4, 2001 (Registration No. 333-60214)).
-------------------------------------
* Previously filed with the Quarterly Report on Form 10-Q to which this
Amendment No. 1 on Form 10-Q/A relates.
- 11 -
b) Reports on Form 8-K.
On April 2, 2004, the Company filed a Current Report on Form 8-K
in which it announced in Item 5 the completion of its merger with
Midstate Bancorp, Inc.
On May 7, 2004, the Company filed a Current Report on Form 8-K in
which it furnished in Item 12 the unaudited results of operations
for the quarter ended March 31, 2004.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Shore Bancshares, Inc.
Date: October 26, 2004 By: /s/ W. Moorhead Vermilye
-----------------------------------------
W. Moorhead Vermilye
President and Chief Executive Officer
Date: October 26, 2004 By: /s/ Susan E. Leaverton
----------------------------------------
Susan E. Leaverton, CPA
Treasurer and Principal Accounting Officer
- 12 -
EXHIBIT INDEX
Exhibit Description
------- -----------
3.1 Shore Bancshares, Inc. Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3.1 on Form 8-K filed by Shore
Bancshares, Inc. on December 14, 2000).
3.2 Shore Bancshares, Inc. Amended and Restated By-Laws (incorporated by
reference to Exhibit 3.2 on Form 8-K filed by Shore Bancshares, Inc.
on December 14, 2000).
10.1 Form of Employment Agreement with W. Moorhead Vermilye (incorporated
by reference to Appendix XIII of Exhibit 2.1 on Form 8-K filed by
Shore Bancshares, Inc. on July 31, 2000).
10.2 Form of Employment Agreement with Daniel T. Cannon (incorporated by
reference to Appendix XIII of Exhibit 2.1 on Form 8-K filed by Shore
Bancshares, Inc. on July 31, 2000).
10.3 Form of Employment Agreement between The Avon-Dixon Agency, LLC and
Kevin P. LaTulip (incorporated by reference to Exhibit 10.3 of the
Company's Annual Report on Form 10-K for the year ended December 31,
2002).
10.4 Form of Supplemental Retirement Plan Agreement and Life Insurance
Endorsement Method Split Dollar Plan Agreement between The Centreville
National Bank of Maryland and Daniel T. Cannon (incorporated by
reference to Exhibit 10.4 of the Company's Quarterly Report on Form
10-Q for the period ended June 30, 2003).
10.5 Form of Life Insurance Endorsement Method Split Dollar Plan Agreement
between The Centreville National Bank of Maryland and Daniel T. Cannon
(incorporated by reference to Exhibit 10.5 of the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 2003).
10.6 Employment Agreement between The Avon-Dixon Agency, LLC and Steven
Fulwood.*
31.1 Certifications of the CEO pursuant to Section 302 of the
Sarbanes-Oxley Act (filed herewith).
31.2 Certifications of the PAO pursuant to Section 302 of the
Sarbanes-Oxley Act (filed herewith).
32.1 Certifications of the CEO and the PAO pursuant to 18 U.S.C. ss. 1350
(furnished herewith)
99.1 Shore Bancshares, Inc. 1998 Employee Stock Purchase Plan, as amended
and restated (incorporated by reference to Appendix A of the Company's
Definitive Proxy Statement on Schedule 14A for the 2003 Annual Meeting
of Stockholders, filed on March 31, 2003).
99.2 1998 Stock Option Plan (incorporated by reference from the Shore
Bancshares, Inc. Registration Statement on Form S-8 filed on September
25, 1998 (Registration No. 333-64319)).
99.3 Talbot Bancshares, Inc. Employee Stock Option Plan (incorporated by
reference from the Shore Bancshares, Inc. Registration Statement on
Form S-8 filed on May 4, 2001 (Registration No. 333-60214)).
-------------------------------------
* Previously filed with the Quarterly Report on Form 10-Q to which this
Amendment No. 1 on Form 10-Q/A relates.