Exhibit 99.1

PRESS RELEASE

For Immediate Release - November 12, 2003

FOR MORE INFORMATION, CONTACT:

W. Moorhead Vermilye - President, Shore Bancshares, Inc.
(410) 822-1400

Thomas Evans, President and CEO, Midstate Bancorp, Inc.
(302) 284-1630

SHORE BANCSHARES AND MIDSTATE BANCORP
ANNOUNCE DEFINITIVE MERGER AGREEMENT

Easton,  Maryland and Felton,  Delaware,  November 12, 2003 - Shore  Bancshares,
Inc. (Nasdaq:  SHBI),  headquartered in Easton,  Maryland, and Midstate Bancorp,
Inc., headquartered in Felton, Delaware,  announced jointly today that they have
signed a definitive  merger  agreement  for the merger of Midstate  Bancorp into
Shore  Bancshares.  The  merger,  which is  expected  to close  during the first
quarter of 2004, is subject to, and requires the approval of,  Midstate  Bancorp
stockholders and regulatory agencies.

Under the terms of the merger  agreement,  each  outstanding  share of  Midstate
Bancorp  common stock will be exchanged for (i) $31.00 in cash plus (ii) between
0.8513 to 0.9015 shares of Shore Bancshares common stock, depending on the price
of Shore Bancshares common stock prior to the merger.  Shore Bancshares will pay
cash in lieu of  fractional  shares  and to  holders  of less  than 50 shares of
Midstate Bancorp common stock.

"We are very pleased to be joining  forces with Midstate  Bancorp and The Felton
Bank,  a bank with a long  history of  community  pride and  customer  service,"
commented W.  Moorhead  Vermilye,  President and CEO of Shore  Bancshares.  "The
merger will permit Shore  Bancshares to expand its  franchise  into Delaware and
will further its status as a premier financial services company in the region."

"Shore  Bancshares  is the right partner for us, with a similar  community  bank
philosophy,"  said Tom Evans,  President  and CEO of  Midstate  Bancorp  and The
Felton Bank. "We will maintain our local name and local decision making, and the
partnership  with Shore Bancshares will increase our ability to meet the growing
banking needs of our customers."

Midstate  Bancorp is the bank  holding  company for The Felton  Bank, a Delaware
commercial  bank,  with assets of  approximately  $51 million and  approximately
96,500  outstanding  shares of common stock.  The Felton Bank,  which operates a
branch office in Felton,  Delaware and one in Milford,  Delaware,  will become a
separate Delaware bank subsidiary of Shore Bancshares as a



result of the  merger.  W. Edwin Kee,  Jr.,  Chairman  of the Board of  Midstate
Bancorp,  will be appointed to the Board of  Directors of Shore  Bancshares  and
Thomas  Evans,  President  of The Felton  Bank,  will  continue to serve in that
capacity.

Shore  Bancshares,  Inc.,  with assets of  approximately  $711  million,  is the
largest  independent  financial  holding company located on the Eastern Shore of
Maryland.  It is the  parent  company of The  Talbot  Bank of  Easton,  Maryland
located  in Easton,  Maryland  and The  Centreville  National  Bank of  Maryland
located  in  Centreville,  Maryland,  which  together  operate  12 full  service
branches in the Maryland  counties of Kent, Queen Anne's,  Talbot,  Caroline and
Dorchester.  Shore  Bancshares  offers a full range of  insurance  products  and
services to its customers  through The Avon-Dixon  Agency,  LLC,  Elliott Wilson
Insurance, LLC, and Mubell Finance, LLC and investment advisory services through
Wye Financial Services, LLC, all of which are wholly owned subsidiaries of Shore
Bancshares. The shares of Shore Bancshares common stock are listed on the Nasdaq
SmallCap Market, trading under the symbol "SHBI".

This press release contains forward-looking statements within the meaning of the
Private  Securities   Litigation  Reform  Act  of  1995.  These  forward-looking
statements include, but are not limited to, statements about (i) the benefits of
a merger (the "Merger") between Midstate Bancorp,  Inc. ("Midstate Bancorp") and
Shore  Bancshares,  Inc.  ("Shore  Bancshares"),  including future financial and
operating  results,  cost  savings  enhancements  to revenue  and  accretion  to
reported  earnings  that may be  realized  from  the  Merger;  (ii)  the  plans,
objectives, expectations and intentions of Shore Bancshares and Midstate Bancorp
and other statements contained in this filing that are not historical facts; and
(iii) other  statements  identified  by words such as  "expects"  "anticipates,"
"intends," "plans," "believes," "seeks," "estimates,"  "targets," "projects," or
words  of  similar  meaning  generally  intended  to  identify   forward-looking
statements.  These forward-looking statements are based upon the current beliefs
and expectations of the respective  managements of Shore Bancshares and Midstate
Bancorp  and are  inherently  subject  to  significant  business,  economic  and
competitive  uncertainties  and  contingencies,  many of which  are  beyond  our
control.  In  addition,   these   forward-looking   statements  are  subject  to
assumptions  with respect to future  business  strategies and decisions that are
subject to change.  Actual results may differ  materially  from the  anticipated
results  discussed  in these  forward-looking  statements  because  of  numerous
possible  uncertainties.  Factors  that could  contribute  to those  differences
include,  but are not  limited  to,  changes in  regulations  applicable  to the
business  of Shore  Bancshares,  Midstate  Bancorp,  and their  affiliates,  the
possibility  of economic  recession  or slow down  (which  could  impact  credit
quality,  adequacy of loan loss reserve and loan growth), changes in the general
interest rate  environment,  competitive  factors in Shore  Bancshares's  and/or
Midstate  Bancorp's  marketplace,  and  business  risk  associated  with  credit
extensions and other banking activities. For a more complete discussion of these
and other risk  factors,  please see "Risk  Factors"  in Part I, Item 1 of Shore
Bancshares's Annual Report on Form 10-K for the year ended December 31, 2002.

Shore Bancshares and Midstate Bancorp caution that the foregoing list of factors
is not exclusive.  All subsequent  written and oral  forward-looking  statements
concerning  the proposed  transaction  or other  matters  attributable  to Shore
Bancshares  or  Midstate  Bancorp  or any  person  acting  on their  behalf  are
expressly qualified in their entirety by the cautionary  statements above.



Shore  Bancshares and Midstate Bancorp do not undertake any obligation to update
any  forward-looking  statement  to reflect  circumstances  or events that occur
after the date the forward-looking statements are made.

ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT:

Shore  Bancshares and Midstate  Bancorp will prepare,  and Shore Bancshares will
file with the SEC, a proxy  statement/prospectus and other relevant materials in
connection with the Merger. The proxy statement/prospectus will be mailed to the
stockholders  of Midstate  Bancorp.  Investors and security  holders of Midstate
Bancorp and Shore  Bancshares  are urged to read the proxy  statement/prospectus
and the other relevant  materials when they become  available  before making any
voting or investment  decision with respect to the Merger,  as they will contain
important information about Midstate Bancorp, Shore Bancshares and the Merger.

This press release is for information purposes only and is not intended as an
offer or a solicitation with respect to the purchase or sale of any security.