Shore Bancshares, Inc.

18 E. Dover Street

Easton, Maryland 21601

Phone 410-822-1400

PRESS RELEASE

Shore Bancshares Reaches $1 Billion in Assets during the First Quarter

Easton, Maryland (04/21/2008) - Shore Bancshares, Inc. (NASDAQ - SHBI) reported net income of $3.372 million or $0.40 per diluted share for the first quarter of 2008, compared to $3.340 million or $0.40 per diluted share for the fourth quarter of 2007 and $3.403 million or $0.41 per diluted share for the first quarter of 2007.

“We are pleased to report that we hit a significant milestone during the first quarter of 2008 in reaching $1 billion in total assets,” said W. Moorhead Vermilye, President and Chief Executive Officer. “Loan growth funded by deposit growth was the primary reason for the increase in total assets. Loan growth continued to be solid during the first quarter with strong demand. Despite Federal Reserve rate cuts of 200 basis points in the first quarter of 2008, for a total of 300 basis points in rate cuts since September 2007, we have maintained a strong net interest margin in 2008. The rate cuts had a significant and immediate impact on the overall yield on earning assets, especially the loan portfolio yield. The overall yield declined 44 basis points to 7.37 % when compared to the first quarter of 2007. On the funding side, it generally takes longer for rate cuts to reduce the overall cost of funds, especially in the time deposit portfolio. However, we do expect significant repricing opportunities in our time deposit portfolio over the next year, as the majority of these deposits mature within a one year time horizon. Deposit gathering continues to be a major challenge in this rate environment, but we are seeing evidence that new customers are coming to us because they prefer to work with a locally managed, locally headquartered company. Additionally, we recently hired several experienced bankers who should further add to our unusual depth of talent and help us bring in additional new commercial relationships. Nevertheless, we do expect continued pressure on our net interest margin in 2008.”

“Growth in noninterest income was good and amounted to 25.7% of total revenue for the quarter. Our capital resources are strong and should permit us to invest in our internal infrastructure as needed, as well as selected acquisition opportunities that may arise.”

“Our nonperforming assets and our loans past due 90 days and still accruing have declined since December 31, 2007 and we feel confident about our overall credit quality at this time.”

“On balance, the Delmarva Peninsula appears to be weathering the economic downturn reasonably well. Shore Bancshares is benefiting from the underlying strengths of our home market and the region’s proximity to many of the major metropolitan areas on the East Coast. As investors analyze where and when to re-enter the community banking sector, we believe they will concur that our franchise represents an attractive opportunity to purchase consistent performance and above-average prospects for future growth,” Vermilye said.

The Company’s return on average assets for the quarter ended March 31, 2008 was 1.38%, compared to 1.40% and 1.43% for the quarters ended December 31, 2007 and March 31, 2007, respectively. The return on average stockholders’ equity was 10.96% for the first quarter of 2008, compared to 11.78% for the fourth quarter of 2007 and 12.09% for the first quarter of 2007.

At March 31, 2008, total assets were $1.004 billion, total deposits were $808.9 million, and total stockholders’ equity was $122.7 million, compared to $956.9 million, $765.9 million and $120.2 million, respectively, at December 31, 2007. The increase in total assets of approximately $47 million since December 31, 2007 was related to growth in deposits, which were invested primarily in loans. The growth in loans totaled $32.2 million during the first quarter of 2008 and were $808.6 million at March 31, 2008.

Review of Financial Results for the Quarter

Net interest income for the first quarter of 2008 was $10.0 million, which represented an increase of 1.3% over the $9.9 million earned during the same period last year. Increased loan volume was the reason for the increase. Net interest income decreased 3.8% from the fourth quarter of 2007 primarily due to decreased rates. The Company’s net interest margin remained relatively flat at 4.42% for the first quarter of 2008 when compared to the first quarter of 2007 but decreased 28 basis points when compared to the fourth quarter of 2007.

The provision for credit losses for the three-month periods ended March 31, 2008 and 2007 was $462 thousand and $242 thousand, respectively. Net charge-offs were $87 thousand for the first quarter of 2008, compared to $36 thousand for the same period in 2007. The increased provision for the first quarter of 2008 when compared to the same period last year reflected the overall growth in the loan portfolio and current economic conditions. The provision for credit losses for the fourth quarter of 2007 was $465 thousand and net charge-offs were $135 thousand. Since December 31, 2007, nonperforming assets decreased $278 thousand and loans past due 90 days or more and still accruing decreased $508 thousand. Management believes that the provision for credit losses and the resulting allowance were adequate at March 31, 2008.

Noninterest income for the first quarter of 2008 increased $1.9 million when compared to the first quarter of 2007. The increase was primarily the result of the acquisition of two insurance agencies during the fourth quarter of 2007. Service charge income increased $182 thousand, insurance agency commissions increased $1.4 million and other noninterest income increased $244 thousand for the first quarter of 2008 when compared to the first quarter of 2007. Noninterest income increased $787 thousand from the fourth quarter of 2007 primarily due to an increase in insurance agency commissions.

Noninterest expense for the first quarter of 2008 increased $1.7 million when compared to the first quarter of 2007. The increase was primarily attributable to the operating expenses of the two insurance agencies acquired during the fourth quarter of 2007. Salaries and benefits increased $1.1 million and other noninterest expenses increased $610 thousand for the first quarter of 2008 when compared to the first quarter of 2007. Noninterest expense increased $289 thousand from the fourth quarter of 2007 primarily due to an increase in salaries and benefits partially offset by a decrease in other noninterest expenses.

Shore Bancshares Information

Shore Bancshares, Inc. is a financial holding company headquartered in Easton, Maryland and is the largest independent bank holding company located on Maryland’s Eastern Shore. It is the parent company of three banks, The Talbot Bank of Easton, Maryland, The Centreville National Bank of Maryland, and The Felton Bank; three insurance producer firms, The Avon-Dixon Agency, LLC, Elliott Wilson Insurance, LLC and Jack Martin and Associates, Inc; a wholesale insurance company, TSGIA, Inc; two insurance premium finance companies, Mubell Finance, LLC and ESFS, Inc.; a registered investment adviser firm, Wye Financial Services, LLC; and a mortgage broker subsidiary, Wye Mortgage Group, LLC.

Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but statements about management’s beliefs, plans and objectives. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled “Risk Factors”.

For further information contact: W. Moorhead Vermilye, President and CEO

Shore Bancshares, Inc.
Financial Highlights
(Dollars in thousands, except per share data)

	1st quarter			4th quarter			1st quarter			1Q 08			1Q 08
	2008			2007			2007			compared to			compared to
	(1Q 08)			(4Q 07)			(1Q 07)			4Q 07			1Q 07
PROFITABILITY FOR THE PERIOD
Net interest income	$	10,030		$	10,426		$	9,905			(3.8	)%		1.3	%
Provision for credit losses		462			465			242			(0.6	)		90.9
Noninterest income		5,502			4,715			3,648			16.7			50.8
Noninterest expense		9,591			9,302			7,891			3.1			21.5
Income before income taxes		5,479			5,374			5,420			2.0			1.1
Income tax expense		2,107			2,034			2,017			3.6			4.5
Net income	$	3,372		$	3,340		$	3,403			1.0			(0.9	)


Return on average assets		1.38	%		1.40	%		1.43	%		(1.4	)%		(3.5	)%
Return on average equity		10.96			11.78			12.09			(7.0	)		(9.3	)
Net interest margin		4.42			4.70			4.47			(6.0	)		(1.1	)
Efficiency ratio - GAAP based		61.75			61.44			58.22			0.5			6.1


PER SHARE DATA
Basic net income	$	0.40		$	0.40		$	0.41			-	%		(2.4	)%
Diluted net income		0.40			0.40			0.41			-			(2.4	)
Dividends paid		0.16			0.16			0.16			-			-
Book value at period end		14.62			14.35			13.54			1.9			8.0
Tangible book value at period end		11.96			11.68			11.94			2.4			0.2
Market value at period end		21.45			21.95			26.45			(2.3	)		(18.9	)
Market range:
High		23.40			24.72			30.76			(5.3	)		(23.9	)
Low		20.00			20.00			23.54			-			(15.0	)


AT PERIOD END
Assets	$	1,003,836		$	956,911		$	960,350			4.9	%		4.5	%
Deposits		808,917			765,895			778,359			5.6			3.9
Loans		808,583			776,350			697,466			4.2			15.9
Securities		99,062			110,033			129,557			(10.0	)		(23.5	)
Stockholders' equity		122,699			120,235			113,382			2.0			8.2


CAPITAL AND CREDIT QUALITY RATIOS
Average equity to average assets		12.56	%		11.91	%		11.87	%
Allowance for credit losses to period-end loans		0.98			0.97			0.93
Nonperforming assets to total assets		0.34			0.39			0.46
Annualized net charge-offs to average loans		0.04			0.06			0.02

Shore Bancshares, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
										March 31, 2008			March 31, 2008
										compared to			compared to
	March 31, 2008			December 31, 2007			March 31, 2007			December 31, 2007			March 31, 2007
ASSETS
Cash and due from banks	$	17,236		$	17,198		$	16,334			0.2	%		5.5	%
Interest-bearing deposits with other banks		6,928			3,036			29,423			128.2			(76.5	)
Federal funds sold		28,313			6,646			51,394			326.0			(44.9	)
Investments available-for-sale (at fair value)		86,056			97,137			115,595			(11.4	)		(25.6	)
Investments held-to-maturity		13,006			12,896			13,962			0.9			(6.8	)

Loans		808,583			776,350			697,466			4.2			15.9
Less: allowance for credit losses		(7,926	)		(7,551	)		(6,506	)		5.0			21.8
Loans, net		800,657			768,799			690,960			4.1			15.9

Premises and equipment, net		15,408			15,617			15,897			(1.3	)		(3.1	)
Accrued interest receivable		5,048			5,008			5,083			0.8			(0.7	)
Goodwill		15,954			15,954			11,939			-			33.6
Other intangible assets, net		6,307			6,436			1,486			(2.0	)		324.4
Other assets		8,923			8,184			8,277			9.0			7.8

Total assets	$	1,003,836		$	956,911		$	960,350			4.9			4.5

LIABILITIES
Noninterest-bearing deposits	$	103,328		$	104,081		$	103,780			(0.7	)		(0.4	)
Interest-bearing deposits		705,589			661,814			674,579			6.6			4.6
Total deposits		808,917			765,895			778,359			5.6			3.9

Short-term borrowings		42,712			47,694			32,815			(10.4	)		30.2
Long-term debt		15,485			12,485			27,000			24.0			(42.6	)
Accrued interest payable and other liabilities		14,023			10,602			8,794			32.3			59.5
Total liabilities		881,137			836,676			846,968			5.3			4.0

STOCKHOLDERS' EQUITY
Common stock, par value $0.01; authorized
35,000,000 shares		84			84			84			-			-
Additional paid in capital		29,578			29,539			29,462			0.1			0.4
Retained earnings		92,076			90,365			84,341			1.9			9.2
Accumulated other comprehensive income (loss)		961			247			(505	)		289.1			290.3
Total stockholders' equity		122,699			120,235			113,382			2.0			8.2

Total liabilities and stockholders' equity	$	1,003,836		$	956,911		$	960,350			4.9			4.5

Period-end shares outstanding		8,395			8,381			8,375			0.2			0.2
Book value per share	$	14.62		$	14.35		$	13.54			1.9			8.0

Shore Bancshares, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)

							1Q 08			1Q 08
							compared to			compared to
	1Q 08		4Q 07		1Q 07		4Q 07			1Q 07
INTEREST INCOME
Interest and fees on loans	$	14,560	$	14,958	$	13,624		(2.7	)%		6.9	%
Interest and dividends on investment securities:
Taxable		1,080		1,205		1,284		(10.4	)		(15.9	)
Tax-exempt		123		124		124		(0.8	)		(0.8	)
Interest on federal funds sold		122		120		520		1.7			(76.5	)
Interest on deposits with other banks		38		46		338		(17.4	)		(88.8	)
Total interest income		15,923		16,453		15,890		(3.2	)		0.2

INTEREST EXPENSE
Interest on deposits		5,343		5,429		5,368		(1.6	)		(0.5	)
Interest on short-term borrowings		366		522		246		(29.9	)		48.8
Interest on long-term debt		184		76		371		142.1			(50.4	)
Total interest expense		5,893		6,027		5,985		(2.2	)		(1.5	)

NET INTEREST INCOME		10,030		10,426		9,905		(3.8	)		1.3
Provision for credit losses		462		465		242		(0.6	)		90.9

NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES		9,568		9,961		9,663		(3.9	)		(1.0	)

NONINTEREST INCOME
Service charges on deposit accounts		871		952		689		(8.5	)		26.4
Investment securities gains (losses)		-		4		-		(100.0	)		-
Insurance agency commissions		3,467		2,694		2,039		28.7			70.0
Other noninterest income		1,164		1,065		920		9.3			26.5
Total noninterest income		5,502		4,715		3,648		16.7			50.8

NONINTEREST EXPENSE
Salaries and employee benefits		5,984		5,520		4,933		8.4			21.3
Occupancy expense		499		518		510		(3.7	)		(2.2	)
Furniture and equipment expense		286		324		322		(11.7	)		(11.2	)
Data processing		470		467		432		0.6			8.8
Directors' fees		165		178		163		(7.3	)		1.2
Amortization of intangible assets		129		130		83		(0.8	)		55.4
Other noninterest expenses		2,058		2,165		1,448		(4.9	)		42.1
Total noninterest expense		9,591		9,302		7,891		3.1			21.5

Income before income taxes		5,479		5,374		5,420		2.0			1.1
Income tax expense		2,107		2,034		2,017		3.6			4.5

NET INCOME	$	3,372	$	3,340	$	3,403		1.0			(0.9	)

Weighted average shares outstanding - basic		8,391		8,380		8,382		0.1			0.1
Weighted average shares outstanding - diluted		8,400		8,391		8,396		0.1			0.0

Basic net income per share	$	0.40	$	0.40	$	0.41		-			(2.4	)
Diluted net income per share		0.40		0.40		0.41		-			(2.4	)
Dividends paid per share		0.16		0.16		0.16		-			-

Maryland	0-22345	52-1974638
(State or other jurisdiction of	(Commission file number)	(IRS Employer
incorporation or organization)		Identification No.)

	SHORE BANCSHARES, INC.


Dated: April 22, 2008	By:	/s/ W. Moorhead Vermilye
		W. Moorhead Vermilye
		President and CEO

Exhibit
Number	Description

99.1	Press release dated April 22, 2008 (furnished herewith).

	(d) Exhibits.

	Exhibit 99.1 Press release dated April 22, 2008 (furnished herewith).