My name is Frank Mason, Chairman. It is 11 am, and it is my pleasure to welcome you to the Annual Meeting of Stockholders of Shore Bancshares Incorporated. Our meeting is now officially called to order. I will begin by introducing your Board, Glenda W. Armistead David J.
Bates, Chairman of our Executive Committee Lloyd L. Scott Beatty, Jr, President and CEO R. Michael Plemmer, Jr, Chairman of our and ALCO Committees William E. Eshem, III James A. Judge, Chairman of our Audit Committee Clyde V.
Kelly, III, Chairman of our Governance Committee David W. Moore, Chairman of our Compensation Committee Geoffrey E. Thompson, Chairman of our Trust Committee and Dom M. Willey. Also joining this morning from Shore Bancshares, we have Edward Allen, our Chief Financial Officer Donna Stevens, our Chief Operating Officer David Moores, Corporate Secretary and General Counsel and Tina Connolly, the Secretary of Election.
In addition, we have Brandon Driver, partner at Yount High Barber P. C, our independent auditor and Mr. Kevin Houlihan, partner at Holland and Knight and Corporate Counsel for the company. And now my remarks. Last year, during this meeting, we were in the beginning stages of the global COVID-nineteen pandemic, and as such, we held our 2020 annual meeting virtually.
Our anticipation for this year's meeting was that we could all once again, as in years past, gather in person. That obviously was not to be that we believe we are in the latter stages of a national and regional recovery. So hope springs eternal that next year we can once again gather in person during this annual meeting. I thank everyone for joining today via teleconference. Before I begin my remarks, I would like to officially welcome our 2 newest directors who have joined the Shore Bank Steers Board since our last annual meeting, Will Eshem and Dawn Willey.
Both Mr. Eshem and Ms. Willey bring a tremendous amount of energy, intellect and experience to our board, and they have already made a significant impact. They have hit the proverbial ground running, and we are grateful to have them in our organization. The pandemic has touched all of our lives in 1 form or another over the past 12 months or so and it has certainly impacted our organization.
Our CEO, Scott Beatty, in his remarks today will offer some particulars on how our organization has managed through the pandemic, all the while keeping focus on improving shareholder return. We are all aware of how the pandemic has negatively affected our daily lives. However, your Board of Directors and I are exceedingly proud of our organization's management team and frankly, all of its employees and how they have significantly minimized the negative aspects to our customers of the COVID-nineteen shutdown and in fact created opportunities for growth and improved customer service out of an otherwise difficult set of circumstances. Your Board of Directors and I are particularly proud of how our bank managed the funding of the payroll protection program in our region. With this program and our management of it, many of our commercial customers were able to remain afloat while the storm was weathered.
In addition, we funded many companies and organizations which previously were not Shore United Bank customers. What a fabulous example of turning an otherwise negative situation for a potential customer into a win win situation for not only the new customer, but also to Shore United Bank. In years past, during this message, I have stressed the vital importance for a community bank to have the best in class customer service. In my opinion, it is 1 of the main differentiators among community banks. Over the past year, I've had no less than 2 handfuls of people go out of their way to tell me of their experience with Shore United Bank and having their PPP loans funded.
In every case, the customer was truly overwhelmed with the diligence and speed with which our staff managed the transaction. Most inspiring were the people who shared their experiences with me, while not aware of my affiliation with our organization. I would like to also mention how our wealth management entity, Y Financial, led by Talley Oxnam, were able to allay any potential fears the pandemic may have created among our investors and, in fact, grew its customer base and improved its net income over the previous years. As always, growth and improved shareholder return remain at the forefront of your Board's overarching agenda. Our deposit base has certainly grown over the past year as well as our reach in communities on the Western Shore of Maryland as well as in the Beach region in Maryland.
As a Board, we are constantly aware of the requirement for steady growth and ultimately improved shareholder return. While we continue to grow our branch and customer base organically, we diligently remain on the M and A hunt, which once successful will hopefully result in a significant step change in our share price. Thank you to all of our shareholders for your continued support. And now for our procedural matters. While I act as Chairman of the meeting, Tina Connolly, Executive Assistant of Shore Bancshares, will act as Secretary of Election.
The 2 judges of the meeting are Clyde D. Kelly III and Belinda W. Armistead. Persons owning shares of common stock of Shore Bancshares Incorporated, which are of record on March 15, 2021, are entitled to vote. Will the secretary please report on whether a quorum is present?
Mr. Chairman, 11, 751, 859 shares of common stock were outstanding on the record date. At least a majority of the outstanding shares are represented by proxy and a quorum is present for the transaction of business.
The report indicates a quorum is present. Please file the report with the minutes. Adam's secretary, do you have the minutes of the last meeting of stockholders?
Yes, Mr. Chairman, I do.
I suggest that the reading of the minutes be dispensed. Do I hear a motion?
So moved.
Second. Adam, Secretary, you have Please incorporate them into the minutes of the meeting. Do you have the list of stockholders?
Yes, I do. The list includes all holders of common stock of Shore Bancshares as of the record date. Registered shareholders can submit votes, questions and access the registered shareholder list via the virtual platform.
The first item of business to be considered at this meeting as described in the proxy statement is the election of directors. Our Board of Directors has approved the nomination of David J. Bates, Lloyd L. Beatty, Jr, James A. Judge and R.
Michael Clemmer, Jr. For reelection as Class III directors. The second item of business on the agenda is the ratification of the audit committee's appointment of Yount, Hyde and Barber P. C. As the company's independent registered public accounting firm for 2021.
The 3rd item of business on the agenda is the adoption of the non binding advisory resolution approving the compensation of the company's named executive officers. The 4th item of business on the agenda is the approval of the Shore Bancshares Inc. 2021 employee stock purchase plan. Madam Secretary, please report the results of the vote.
With regard to proxy item number 1, a plurality of the shares voted were voted for each of the Class III directors. And therefore, I'm pleased to announce the election of David J. Bates, Lloyd L. Beatty, Jr, James A. Judge and R.
Michael Klemmer, Jr. As Class III Directors to serve as Directors of Shore Bancshares until 2024. With regard to proxy item number 2, 94.02% of the shares voted were voted for proxy item number 2. And therefore, I am pleased to announce the ratification of the appointment of Yount, Hyde and Barber P. C.
As the company's independent registered accounting firm for 2021. With regard to proxy item number 3, 92.30 percent of the shares voted were voted for proxy item number 3. And therefore, I'm pleased to announce the non binding advisory resolution approving the compensation of the named executive officers was adopted. With regard to proxy item number 4, 91.24 percent of the shares voted were voted for proxy item number 4, And therefore, I am pleased to announce the approval of Assure Bank's shares incorporated 2021 employee stock purchase plan.
And now we will hear from our President and CEO, Scott Beatty.
Thanks, Frank, and welcome, everyone. I'll start with the pandemic and operations update. Our customers continue to have full access to all of our branches. For a short period this summer, our lobbies were only open by appointment. However, since July 1, our lobbies have generally been open.
Occasionally, we have to close the lobby here and there and go to drive thru only. This is primarily due to staffing issues. Staff is either out quarantining as a result of an exposure or we have other PTO issues. The PPP program, as everyone knows, round 2 is now closed. In round 1, we processed 1495 loans totaling $129, 000, 000 In round 2, we processed 9.44 loans totaling $80, 000, 000 To date, we've received about $70, 000, 000 in forgiveness and for the current PPP outstanding balance of about $123, 000, 000 We expect to have a significant amount of forgiveness in the 2nd quarter.
We didn't receive the kind of forgiveness we anticipated in the Q1, largely due, I think, to the fact that there was a second round of PPP. On the deferral front, currently, we only have 12 loans on deferral totaling $16, 000, 000 These are all principal deferrals only. Only 1 loan of $13, 000, 000 is not COVID related. It's a principal deferral that was granted for a rehab of a retail center, and we're going to take this off our COVID deferral list. So we're down to about $3, 000, 000 in total on deferrals related to COVID.
Credit is the best we've ever seen it, with our past dues, non accrual TDRs and OREO at 0.9% of total loans, excluding PPP. As far as lending goes, our loan pipeline is about the highest we've ever seen it. It's been strong across all of our markets, but especially in the Baltimore suburban market. We've hired 3 new lenders in our Central Eastern Shore market, and all are doing quite well. However, we are seeing a lot of payoffs.
This is coming primarily from residential refinancing, an abundance of customer cash and some very aggressive commercial lenders. Given all of that, we still expect to see about 6% loan growth this year, excluding PPP. Regarding the markets stock market generally, our current daily average share volume is about 71, 000 shares. Institutional ownership is now up to about 76%. We will be coming out of the Russell in June.
As everyone knows, the Russell the market cap for the Russell this year is somewhere between $246, 000, 000 279, 000, 000 dollars for what we hear. Last year, as just a point of interest, it was $98, 000, 000 So we'll be coming out. We fully expect some initial pricing pressure on the stock. But with the pending merger with Severin, it's likely that we'll go back into the Russell next year and there may be very little impact. We continue to focus on our growth initiatives.
We recently signed a lease on a vacant P and C branch on 31st Street in Ocean City, Maryland. We think this is a great opportunity for us for several reasons. 1, it solidifies our commitment to that market. 2, it's a wonderful marketing opportunity. It's a It's a high visibility, high traffic counts on the coastal highway where that building is located.
We can also consolidate our LPO office in Ocean City in that branch location, so that will save us some additional money. We have approvals and the branch should be open in the Q1 of 2022. In term, we've been able to take advantage locally of some market disruption in the midshore market. PNC closed a branch in St. Michael's, Maryland, which serviced a significant portion of Talbot County.
We are now the only bank with a branch in that area. Additionally, there was a merger of a bank in the midshore market with a bank on the Western Shore and frankly, the customer conversion was quite a disaster. As a result of these 2 events, we were able to onboard a significant number of new customers. In March alone, we opened 900 new accounts bank wide. Obviously, the big news is the pending merger with Severin.
This will fill a significant gap in our footprint and should push us over $3, 000, 000, 000 in assets. It also gives us a very good residential mortgage platform, which we can expand our current geography. In addition, it increases our legal lending limit to well over $40, 000, 000 We hope to have the legal merger complete in the 3rd quarter and the systems conversion complete mid 4th quarter. Our merger teams have worked have come together and are working through the consolidation process now. In closing, I would just like to acknowledge the outstanding performance of the staff of Assure United Bank.
As management, we asked them to go over and above and normal in a time that was very stressful for both them and their families. They performed beyond anyone's expectation. As a result, we have meaningfully enhanced the reputation of the bank in all of our communities. I'm constantly getting verbal and written expressions of gratitude and appreciation for all the bank and our staff have done for businesses and people throughout this trying time. With that, I will turn it over to Ed Allen, our CFO, for financial highlights.
Thank you, Scott. Good morning, everyone. I'm pleased to bring you the recap of the financial performance of ShoreBank shares for the year 2020. We saw tremendous growth in assets. We ended the year at $1, 933, 000, 000 in assets, a growth of 24% for the year, primarily fueled by deposit growth.
Deposit growth was 27%. There were a lot of factors involved in that, including federal stimulus money, both in the form of direct payments to individuals, PPP loans to small businesses, a new branch and about 30% growth in municipal deposits. Loans grew 16% for the year and excluding PPP loans, the growth was 6.7%. 1 of the best news that we saw was nonperforming assets declining from 2.12% of loans at the end of 2018 to 0.86% at the end of 2020. Those nonperforming assets, which include nonaccrual loans, accruing TDRs, 90 days past due and other real estate owned, went from $26, 600, 000 to $13, 200, 000 a 50% decrease during that time frame.
Looking at the income statement, our earnings have been very consistent for the last 3 years. Earnings per share of 1.24 dollars 1 $0.28 and $1.27 In 2020, net interest income was up 5%. Non interest income was up 7%. Expenses were only up 2.2% from the previous year. The reason that we had slightly less net income for the year was that we added to the loan loss reserve using qualitative factors related to the pandemic as an abundance of caution due to the unknown throughout the year, the extent of the effect of COVID.
So our provision for the year of 2020 was $3, 900, 000 compared to $700, 000 the previous year. I would say that to date, we have not experienced any COVID related losses. That's my report. Thank you.
Thank you, Scott and Ed. There appear to be no questions posted
to the portal.
There being no further business, a motion to adjourn will be heard.