Shore Bancshares, Inc.

18 E. Dover Street

Easton, Maryland 21601

Phone 410-822-1400

PRESS RELEASE

Shore Bancshares Reports Third Quarter and Nine-Month Results

Easton, Maryland (10/26/2010) - Shore Bancshares, Inc. (NASDAQ - SHBI) reported a net loss of $1.4 million or $(0.17) per diluted common share for the third quarter of 2010, compared to net income of $445 thousand or $0.05 per diluted common share for the second quarter of 2010, and net income of $1.951 million or $0.23 per diluted common share for the third quarter of 2009. During the third quarter of 2010, the Company recorded goodwill impairment charges of $3.0 million and other intangible assets impairment charges of $51 thousand. The provision for credit losses was $4.2 million in the third quarter of 2010, which was $724 thousand lower than the provision for the second quarter of 2010 but $2.5 million higher than the provision for the third quarter of 2009.

The Company reported a net loss of $2.5 million or $(0.30) per diluted common share for the first nine months of 2010, compared to net income of $4.2 million or $0.50 per diluted common share for the first nine months of 2009. The 2010 year-to-date net loss included the previously mentioned goodwill and other intangible assets impairment charges of $3.051 million. The provision for credit losses was $16.7 million and $5.3 million for the first nine months of 2010 and 2009, respectively. For the first nine months of 2009, net income available to common stockholders was negatively impacted by $1.9 million in dividends and discount accretion associated with the sale and subsequent repurchase of preferred stock under the U.S. Department of the Treasury’s Troubled Asset Relief Program Capital Purchase Program.

“Our underlying operating performance for the quarter was decent considering the ongoing tough business environment, and would have generated a profit had it not been for the offsetting impact of one-time goodwill impairment charges,” said W. Moorhead Vermilye, president and chief executive officer. “Half of the goodwill impairment charges related to our acquisition in 2004 of The Felton Bank and the other half to our purchase in 2007 of TSGIA, Inc., a wholesale insurance agency. It is important to note that the charge for goodwill impairment is a non-cash accounting entry that does not affect our regulatory capital levels. Further, the goodwill impairment charges were only for a portion of the total goodwill in those entities and 18.8% of the goodwill of the overall Company.”

The Company’s return on average assets for the third quarter of 2010 was (0.49)%, compared to 0.16% and 0.66% for the quarters ended June 30, 2010 and September 30, 2009, respectively. The return on average stockholders’ equity was (4.43)% for the third quarter of 2010, compared to 1.42% for the second quarter of 2010 and 6.03% for the third quarter of 2009.

The Company’s return on average assets for the first nine months of 2010 was (0.30)%, compared to 0.50% for the first nine months of 2009. The return on average stockholders’ equity was (2.66)% and 4.08% for the first nine months of 2010 and 2009, respectively.

Total assets were $1.135 billion at September 30, 2010, compared to $1.157 billion at the end of 2009, a decrease of 1.9%. Total loans were $906.5 million, a decrease of 1.1%, and total deposits were $982.4 million, a decrease of 0.9%, when compared to December 31, 2009. At September 30, 2010, total stockholders’ equity was $122.4 million, a decrease of 4.3% from $127.8 million at the end of 2009.

Page 2 of 10

Review of Quarterly Financial Results

Net interest income for the third quarter of 2010 was $10.7 million, relatively unchanged from the second quarter of 2010 and an increase of 2.5% from the same period last year. The increase in net interest income when compared to the third quarter of 2009 was primarily due to a decrease in the balances and rates paid on interest bearing liabilities that more than offset the decline in the balances and yields on earning assets. The Company’s net interest margin was 4.00% for the third quarter of 2010, slightly lower than the 4.03% for the second quarter of 2010 and 21 basis points higher than the 3.79% for the third quarter of 2009.

As previously mentioned, the provision for credit losses was $4.2 million for the three months ended September 30, 2010, compared to $4.9 million and $1.7 million for the three months ended June 30, 2010 and September 30, 2009, respectively. The ratio of the allowance for credit losses to period-end loans was 1.45% at September 30, 2010, compared to 1.47% at June 30, 2010 and 1.17% at September 30, 2009. Management believes that the provision for credit losses and the resulting allowance were adequate at September 30, 2010.

The continued historically large level of provision for credit losses was primarily in response to the overall increase in nonperforming assets and loan charge-offs, as well as overall economic conditions. Net charge-offs were $4.3 million for the third quarter of 2010, $4.4 million for the second quarter of 2010 and $1.8 million for the third quarter of 2009. The ratio of quarter-to-date annualized net charge-offs to average loans was 1.90% for the third quarter of 2010, 1.95% for the second quarter of 2010 and 0.76% for the third quarter of 2009. The ratio of nonperforming assets to total assets was 3.38% at September 30, 2010. The comparable nonperforming asset ratio was 3.45% at June 30, 2010, and 1.51% at September 30, 2009.

Total noninterest income for the third quarter of 2010 increased $75 thousand when compared to the second quarter of 2010 and decreased $76 thousand when compared to the third quarter of 2009. The increase when compared to the second quarter of 2010 was primarily due to a $224 thousand gain relating to the surrender of directors’ life insurance policies which was partially offset by decreases in mortgage broker fees and insurance agency commissions. The decrease when compared to the third quarter of 2009 was mainly due to decreases in mortage broker fees and insurance agency commissions which were partially offset by the $224 thousand gain from the life insurance policies.

Total noninterest expense for the third quarter of 2010 increased $2.9 million when compared to the second quarter of 2010 mainly due to goodwill impairment charges of $3.0 million and other intangible assets impairment charges of $51 thousand. The increase in noninterest expense was slightly offset by lower expenses related to other real estate owned activities. When compared to the third quarter of 2009, total noninterest expense for the third quarter of 2010 increased $2.3 million primarily due to the goodwill and other intangible assets impairment charges. The increase in noninterest expense was somewhat offset by lower expenses accrued for bonus and profit sharing plans. Excluding the goodwill and other intangible assets impairment charges, total noninterest expense decreased 1.1% and 7.0% when compared to the second quarter of 2010 and the third quarter of 2009, respectively.

Review of Nine-Month Financial Results

Net interest income for the first nine months of 2010 was $31.8 million, an increase of 3.9% when compared to the first nine months of 2009. The increase was primarily due to higher average balances of earning assets and lower rates paid on interest bearing liabilities offsetting the decline in yields on earning assets. The net interest margin increased from 3.90% for the first nine months of 2009 to 3.99% for the first nine months of 2010.

The provisions for credit losses for the nine months ended September 30, 2010 and 2009 were $16.7 million and $5.3 million, respectively. Net charge-offs were $14.5 million and $3.9 million for the nine months ended September 30, 2010 and 2009, respectively. The ratio of year-to-date annualized net charge-offs to average loans was 2.13% for the first nine months of 2010 and 0.57% for the first nine months of 2009.

Page 3 of 10

Total noninterest income for the nine months months ended September 30, 2010 declined $1.3 million when compared to the same period in 2009. The decrease in noninterest income was mainly due to a decline in mortgage broker fees and insurance agency commissions.

Total noninterest expense for the nine months ended September 30, 2010 increased $1.8 million when compared to the same period in 2009. The increase in noninterest expense was primarily due to the goodwill and other intangible assets impairment charges and higher expenses related to collection and other real estate owned activities which were partially offset by lower expenses accrued for bonus and profit sharing plans, lower insurance agency commissions expense and lower FDIC insurance premium expense. Excluding the goodwill and other intangible assets impairment charges, total noninterest expense decreased 4.2% when compared to the first nine months of 2009.

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, CNB, 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; and a registered investment adviser firm, Wye Financial Services, LLC. Shore Bancshares, Inc. engages in the mortgage broker business under the name “Wye Mortgage Group” through a minority series investment in an unrelated Delaware limited liability company.

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, 410-822-1400

Page 4 of 10

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


	For the Three Months Ended									For the Nine Months Ended
	September 30,									September 30,
	2010			2009			% Change			2010			2009			% Change
PROFITABILITY FOR THE PERIOD
Net interest income	$	10,687		$	10,428			2.5	%	$	31,773		$	30,572			3.9	%
Provision for credit losses		4,193			1,702			146.4			16,727			5,318			214.5
Noninterest income		4,643			4,719			(1.6	)		14,093			15,416			(8.6	)
Noninterest expense		12,629			10,297			22.6			32,638			30,873			5.7
(Loss) income before income taxes		(1,492	)		3,148			(147.4	)		(3,499	)		9,797			(135.7	)
Income tax (benefit) expense		(92	)		1,197			(107.7	)		(982	)		3,740			(126.3	)
Net (loss) income		(1,400	)		1,951			(171.8	)		(2,517	)		6,057			(141.6	)
Preferred stock dividends and discount accretion		-			-			-			-			1,876			(100.0	)
Net (loss) income available to common shareholders	$	(1,400	)	$	1,951			(171.8	)	$	(2,517	)	$	4,181			(160.2	)


Return on average assets (1)		(0.49	) %		0.66	%		(174.2	) %		(0.30	) %		0.50	%		(160.0	) %
Return on average equity (1)		(4.43	)		6.03			(173.5	)		(2.66	)		4.08			(165.2	)
Net interest margin		4.00			3.79			5.5			3.99			3.90			2.3
Efficiency ratio - GAAP based		82.38			67.98			21.2			71.16			67.13			6.0


PER SHARE DATA
Basic net (loss) income per share	$	(0.17	)	$	0.23			(173.9	) %	$	(0.30	)	$	0.72			(141.7	) %
Basic net (loss) income per common share		(0.17	)		0.23			(173.9	)		(0.30	)		0.50			(160.0	)
Diluted net (loss) income per share		(0.17	)		0.23			(173.9	)		(0.30	)		0.72			(141.7	)
Diluted net (loss) income per common share		(0.17	)		0.23			(173.9	)		(0.30	)		0.50			(160.0	)
Dividends paid per common share		0.06			0.16			(62.5	)		0.18			0.48			(62.5	)
Book value per common share at period end		14.49			15.23			(4.9	)
Tangible book value per common share at period end		12.37			12.68			(2.4	)
Market value at period end		9.48			16.73			(43.3	)
Market range:
High		12.10			20.72			(41.6	)		14.80			24.43			(39.4	)
Low		9.20			16.64			(44.7	)		9.20			11.00			(16.4	)


PERIOD-END BALANCE SHEET DATA
Loans	$	906,490		$	918,601			(1.3	) %
Securities		104,075			100,772			3.3
Assets		1,134,503			1,157,685			(2.0	)
Deposits		982,428			992,196			(1.0	)
Stockholders' equity		122,355			128,219			(4.6	)


AVERAGE BALANCE SHEET DATA
Loans	$	904,293		$	920,241			(1.7	) %	$	907,965		$	910,842			(0.3	) %
Securities		105,466			97,226			8.5			108,469			88,240			22.9
Earning assets		1,066,063			1,100,538			(3.1	)		1,070,833			1,056,362			1.4
Assets		1,139,043			1,166,587			(2.4	)		1,139,747			1,115,499			2.2
Deposits		984,018			1,001,304			(1.7	)		980,968			931,693			5.3
Stockholders' equity		125,308			128,409			(2.4	)		126,343			137,089			(7.8	)


CAPITAL AND CREDIT QUALITY RATIOS
Average equity to average assets		11.00	%		11.01	%					11.09	%		12.29	%
Annualized net charge-offs to average loans		1.90			0.76						2.13			0.57
Allowance for credit losses to period-end loans		1.45			1.17
Nonperforming assets to total loans+other real estate owned		4.22			1.90
Nonperforming assets to total assets		3.38			1.51
Nonperforming assets+Loans 90 days past due and still accruing to total loans+other real estate owned		4.58			2.89
Nonperforming assets+Loans 90 days past due and still accruing to total assets		3.67			2.30

(1) Calculation uses net (loss) income available to common shareholders.

Page 5 of 10

Shore Bancshares, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)


										Sep. 30, 2010			Sep. 30, 2010
	Sep. 30,			Dec. 31,			Sep. 30,			compared to			compared to
	2010			2009			2009			Dec. 31, 2009			Sep. 30, 2009
ASSETS
Cash and due from banks	$	21,764		$	14,411		$	13,699			51.0	%		58.9	%
Interest-bearing deposits with other banks		18,014			598			1,601			2,912.4			1,025.2
Federal funds sold		35,161			60,637			72,061			(42.0	)		(51.2	)
Investments available-for-sale (at fair value)		96,219			97,595			91,768			(1.4	)		4.9
Investments held-to-maturity		7,856			8,940			9,004			(12.1	)		(12.7	)

Loans		906,490			916,557			918,601			(1.1	)		(1.3	)
Less: allowance for credit losses		(13,153	)		(10,876	)		(10,723	)		20.9			22.7
Loans, net		893,337			905,681			907,878			(1.4	)		(1.6	)

Premises and equipment, net		14,714			14,307			14,012			2.8			5.0
Goodwill		12,954			15,954			15,954			(18.8	)		(18.8	)
Other intangible assets, net		4,969			5,406			5,535			(8.1	)		(10.2	)
Other real estate and other assets owned, net		1,517			2,572			2,062			(41.0	)		(26.4	)
Other assets		27,998			30,415			24,111			(7.9	)		16.1

Total assets	$	1,134,503		$	1,156,516		$	1,157,685			(1.9	)		(2.0	)

LIABILITIES
Noninterest-bearing deposits	$	121,480		$	122,492		$	124,440			(0.8	)		(2.4	)
Interest-bearing deposits		860,948			868,445			867,756			(0.9	)		(0.8	)
Total deposits		982,428			990,937			992,196			(0.9	)		(1.0	)

Short-term borrowings		17,782			20,404			17,673			(12.9	)		0.6
Accrued expenses and other liabilities		10,509			15,936			17,650			(34.1	)		(40.5	)
Long-term debt		1,429			1,429			1,947			-			(26.6	)
Total liabilities		1,012,148			1,028,706			1,029,466			(1.6	)		(1.7	)

STOCKHOLDERS' EQUITY
Common stock, par value $0.01; authorized
35,000,000 shares		84			84			84			-			-
Warrant		1,543			1,543			1,543			-			-
Additional paid in capital		30,173			29,872			29,844			1.0			1.1
Retained earnings		92,115			96,151			96,283			(4.2	)		(4.3	)
Accumulated other comprehensive (loss) income		(1,560	)		160			465			(1,075.0	)		(435.5	)
Total stockholders' equity		122,355			127,810			128,219			(4.3	)		(4.6	)

Total liabilities and stockholders' equity	$	1,134,503		$	1,156,516		$	1,157,685			(1.9	)		(2.0	)

Period-end common shares outstanding		8,443			8,419			8,419			0.3			0.3
Book value per common share	$	14.49		$	15.18		$	15.23			(4.5	)		(4.9	)

Page 6 of 10

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


	For the Three Months Ended								For the Nine Months Ended
	September 30,								September 30,
	2010			2009		% Change			2010			2009		% Change
INTEREST INCOME
Interest and fees on loans	$	13,083		$	14,001		(6.6	) %	$	39,004		$	41,372		(5.7	) %
Interest and dividends on investment securities:
Taxable		677			800		(15.4	)		2,405			2,324		3.5
Tax-exempt		50			77		(35.1	)		165			241		(31.5	)
Interest on federal funds sold		21			31		(32.3	)		47			61		(23.0	)
Interest on deposits with other banks		6			4		50.0			11			11		-
Total interest income		13,837			14,913		(7.2	)		41,632			44,009		(5.4	)

INTEREST EXPENSE
Interest on deposits		3,117			4,368		(28.6	)		9,744			13,094		(25.6	)
Interest on short-term borrowings		17			19		(10.5	)		68			96		(29.2	)
Interest on long-term debt		16			98		(83.7	)		47			247		(81.0	)
Total interest expense		3,150			4,485		(29.8	)		9,859			13,437		(26.6	)

NET INTEREST INCOME		10,687			10,428		2.5			31,773			30,572		3.9
Provision for credit losses		4,193			1,702		146.4			16,727			5,318		214.5

NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES		6,494			8,726		(25.6	)		15,046			25,254		(40.4	)

NONINTEREST INCOME
Service charges on deposit accounts		841			861		(2.3	)		2,458			2,558		(3.9	)
Trust and investment fee income		357			274		30.3			1,145			750		52.7
Investment securities gains (losses)		-			-		-			-			49		(100.0	)
Insurance agency commissions		2,513			2,744		(8.4	)		7,997			8,972		(10.9	)
Other noninterest income		932			840		11.0			2,493			3,087		(19.2	)
Total noninterest income		4,643			4,719		(1.6	)		14,093			15,416		(8.6	)

NONINTEREST EXPENSE
Salaries and wages		4,404			4,765		(7.6	)		13,257			14,064		(5.7	)
Employee benefits		897			1,211		(25.9	)		2,936			3,791		(22.6	)
Occupancy expense		547			616		(11.2	)		1,766			1,752		0.8
Furniture and equipment expense		325			299		8.7			938			915		2.5
Data processing		696			675		3.1			1,987			1,865		6.5
Directors' fees		118			109		8.3			344			394		(12.7	)
Goodwill and other intangible assets impairment		3,051			-		-			3,051			-		-
Amortization of intangible assets		128			128		-			386			386		-
Insurance agency commissions expense		338			428		(21.0	)		1,230			1,515		(18.8	)
FDIC insurance premium expense		448			458		(2.2	)		1,389			1,621		(14.3	)
Other noninterest expenses		1,677			1,608		4.3			5,354			4,570		17.2
Total noninterest expense		12,629			10,297		22.6			32,638			30,873		5.7

(Loss) income before income taxes		(1,492	)		3,148		(147.4	)		(3,499	)		9,797		(135.7	)
Income tax (benefit) expense		(92	)		1,197		(107.7	)		(982	)		3,740		(126.3	)

NET (LOSS) INCOME		(1,400	)		1,951		(171.8	)		(2,517	)		6,057		(141.6	)
Preferred stock dividends and discount accretion		-			-		-			-			1,876		(100.0	)
Net (loss) income available to common shareholders	$	(1,400	)	$	1,951		(171.8	)	$	(2,517	)	$	4,181		(160.2	)

Weighted average shares outstanding - basic		8,443			8,419		0.3			8,441			8,412		0.3
Weighted average shares outstanding - diluted		8,443			8,423		0.2			8,441			8,416		0.3

Basic net (loss) income per share	$	(0.17	)	$	0.23		(173.9	)	$	(0.30	)	$	0.72		(141.7	)
Basic net (loss) income per common share		(0.17	)		0.23		(173.9	)		(0.30	)		0.50		(160.0	)
Diluted net (loss) income per share		(0.17	)		0.23		(173.9	)		(0.30	)		0.72		(141.7	)
Diluted net (loss) income per common share		(0.17	)		0.23		(173.9	)		(0.30	)		0.50		(160.0	)
Dividends paid per common share		0.06			0.16		(62.5	)		0.18			0.48		(62.5	)

Page 7 of 10

Shore Bancshares, Inc.
Consolidated Average Balance Sheets
(Dollars in thousands)


	For the Three Months Ended												For the Nine Months Ended
	September 30,												September 30,
	2010						2009						2010						2009
	Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/
	balance			rate			balance			rate			balance			rate			balance			rate
Earning assets
Loans	$	904,293			5.76	%	$	920,241			6.05	%	$	907,965			5.76	%	$	910,842			6.09	%
Investment securities
Taxable		99,572			2.70			89,101			3.56			102,100			3.15			79,797			3.89
Tax-exempt		5,894			5.16			8,125			5.76			6,369			5.26			8,443			5.87
Federal funds sold		40,638			0.20			81,466			0.16			41,709			0.15			53,227			0.15
Interest-bearing deposits		15,666			0.15			1,605			0.77			12,690			0.12			4,053			0.35
Total earning assets		1,066,063			5.18	%		1,100,538			5.41	%		1,070,833			5.22	%		1,056,362			5.60	%
Cash and due from banks		21,865						20,042						15,455						16,960
Other assets		65,081						57,049						66,942						52,700
Allowance for credit losses		(13,966	)					(11,042	)					(13,483	)					(10,523	)
Total assets	$	1,139,043					$	1,166,587					$	1,139,747					$	1,115,499


Interest-bearing liabilities
Demand deposits	$	132,023			0.24	%	$	125,233			0.26	%	$	130,872			0.25	%	$	123,821			0.25	%
Money market and savings deposits		259,511			0.81			245,801			0.67			258,628			0.73			207,588			0.60
Certificates of deposit $100,000 or more		258,542			1.91			274,580			2.82			256,470			2.08			252,978			3.13
Other time deposits		212,098			2.37			237,757			3.20			215,911			2.53			236,643			3.39
Interest-bearing deposits		862,174			1.44			883,371			1.96			861,881			1.51			821,030			2.13
Short-term borrowings		16,092			0.38			18,373			0.42			16,673			0.55			27,718			0.46
Long-term debt		1,429			4.36			1,947			19.90			1,429			4.40			5,925			5.57
Total interest-bearing liabilities		879,695			1.42	%		903,691			1.97	%		879,983			1.50	%		854,673			2.10	%
Noninterest-bearing deposits		121,844						117,933						119,087						110,663
Accrued expenses and other liabilities		12,196						16,554						14,334						13,074
Stockholders' equity		125,308						128,409						126,343						137,089
Total liabilities and stockholders' equity	$	1,139,043					$	1,166,587					$	1,139,747					$	1,115,499

Net interest spread					3.76	%					3.44	%					3.72	%					3.50	%
Net interest margin					4.00	%					3.79	%					3.99	%					3.90	%

Page 8 of 10

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


	3rd quarter			2nd quarter			1st quarter			4th quarter			3rd quarter				3Q 10			3Q 10
	2010			2010			2010			2009			2009			compared to			compared to
		(3Q 10)			(2Q 10)			(1Q 10)			(4Q 09)			(3Q 09)			2Q 10			3Q 09
PROFITABILITY FOR THE PERIOD
Net interest income	$	10,687		$	10,691		$	10,395		$	10,806		$	10,428			-	%		2.5	%
Provision for credit losses		4,193			4,917			7,617			3,668			1,702			(14.7	)		146.4
Noninterest income		4,643			4,568			4,882			4,125			4,719			1.6			(1.6	)
Noninterest expense		12,629			9,688			10,321			9,375			10,297			30.4			22.6
(Loss) income before income taxes		(1,492	)		654			(2,661	)		1,888			3,148			(328.1	)		(147.4	)
Income tax (benefit) expense		(92	)		209			(1,099	)		672			1,197			(144.0	)		(107.7	)
Net (loss) income		(1,400	)		445			(1,562	)		1,216			1,951			(414.6	)		(171.8	)
Preferred stock dividends and discount accretion		-			-			-			-			-			-			-
Net (loss) income available to common shareholders	$	(1,400	)	$	445		$	(1,562	)	$	1,216		$	1,951			(414.6	)		(171.8	)


Return on average assets (1)		(0.49	) %		0.16	%		(0.55	) %		0.41	%		0.66	%		(406.3	) %		(174.2	) %
Return on average equity (1)		(4.43	)		1.42			(4.95	)		3.75			6.03			(412.0	)		(173.5	)
Net interest margin		4.00			4.03			3.95			3.90			3.79			(0.7	)		5.5
Efficiency ratio - GAAP based		82.38			63.49			67.56			62.79			67.98			29.8			21.2


PER SHARE DATA
Basic net (loss) income per share	$	(0.17	)	$	0.05		$	(0.19	)	$	0.14		$	0.23			(440.0	) %		(173.9	) %
Basic net (loss) income per common share		(0.17	)		0.05			(0.19	)		0.14			0.23			(440.0	)		(173.9	)
Diluted net (loss) income per share		(0.17	)		0.05			(0.19	)		0.14			0.23			(440.0	)		(173.9	)
Diluted net (loss) income per common share		(0.17	)		0.05			(0.19	)		0.14			0.23			(440.0	)		(173.9	)
Dividends paid per common share		0.06			0.06			0.06			0.16			0.16			-			(62.5	)
Book value per common share at period end		14.49			14.77			14.82			15.18			15.23			(1.9	)		(4.9	)
Tangible book value per common share at period end		12.37			12.27			12.30			12.64			12.68			0.8			(2.4	)
Market value at period end		9.48			11.91			14.25			14.50			16.73			(20.4	)		(43.3	)
Market range:
High		12.10			14.80			14.75			17.71			20.72			(18.2	)		(41.6	)
Low		9.20			11.75			10.21			13.52			16.64			(21.7	)		(44.7	)


PERIOD-END BALANCE SHEET DATA
Loans	$	906,490		$	905,477		$	905,194		$	916,557		$	918,601			0.1	%		(1.3	) %
Securities		104,075			106,556			112,929			106,535			100,772			(2.3	)		3.3
Assets		1,134,503			1,129,196			1,146,334			1,156,516			1,157,685			0.5			(2.0	)
Deposits		982,428			971,608			990,750			990,937			992,196			1.1			(1.0	)
Stockholders' equity		122,355			124,666			125,108			127,810			128,219			(1.9	)		(4.6	)


AVERAGE BALANCE SHEET DATA
Loans	$	904,293		$	909,295		$	910,374		$	921,908		$	920,241			(0.6	) %		(1.7	) %
Securities		105,466			109,744			110,252			104,561			97,226			(3.9	)		8.5
Earning assets		1,066,063			1,071,115			1,075,425			1,104,919			1,100,538			(0.5	)		(3.1	)
Assets		1,139,043			1,134,662			1,145,607			1,169,337			1,166,587			0.4			(2.4	)
Deposits		984,018			976,749			982,265			1,002,982			1,001,304			0.7			(1.7	)
Stockholders' equity		125,308			125,670			128,081			128,715			128,409			(0.3	)		(2.4	)


CAPITAL AND CREDIT QUALITY RATIOS
Average equity to average assets		11.00	%		11.08	%		11.18	%		11.01	%		11.01	%
Annualized net charge-offs to average loans		1.90			1.95			2.54			1.51			0.76
Allowance for credit losses to period-end loans		1.45			1.47			1.41			1.19			1.17
Nonperforming assets to total loans+other real estate owned		4.22			4.29			3.62			2.05			1.90
Nonperforming assets to total assets		3.38			3.45			2.87			1.63			1.51
Nonperforming assets+Loans 90 days past due
and still accruing to total loans+other real estate owned		4.58			4.81			3.93			2.86			2.89
Nonperforming assets+Loans 90 days past due
and still accruing to total assets		3.67			3.86			3.11			2.27			2.30

(1) Calculation uses net (loss) income available to common shareholders.

Page 9 of 10

Shore Bancshares, Inc.
Consolidated Statements of Income By Quarter
(In thousands, except per share data)


														3Q 10			3Q 10
													compared to			compared to
		3Q 10			2Q 10		1Q 10			4Q 09		3Q 09		2Q 10			3Q 09
INTEREST INCOME
Interest and fees on loans	$	13,083		$	13,047	$	12,874		$	13,837	$	14,001		0.3	%		(6.6	) %
Interest and dividends on investment securities:
Taxable		677			846		882			860		800		(20.0	)		(15.4	)
Tax-exempt		50			56		59			60		77		(10.7	)		(35.1	)
Interest on federal funds sold		21			14		12			23		31		50.0			(32.3	)
Interest on deposits with other banks		6			4		1			-		4		50.0			50.0
Total interest income		13,837			13,967		13,828			14,780		14,913		(0.9	)		(7.2	)

INTEREST EXPENSE
Interest on deposits		3,117			3,242		3,385			3,924		4,368		(3.9	)		(28.6	)
Interest on short-term borrowings		17			19		32			31		19		(10.5	)		(10.5	)
Interest on long-term debt		16			15		16			19		98		6.7			(83.7	)
Total interest expense		3,150			3,276		3,433			3,974		4,485		(3.8	)		(29.8	)

NET INTEREST INCOME		10,687			10,691		10,395			10,806		10,428		-			2.5
Provision for credit losses		4,193			4,917		7,617			3,668		1,702		(14.7	)		146.4

NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES		6,494			5,774		2,778			7,138		8,726		12.5			(25.6	)

NONINTEREST INCOME
Service charges on deposit accounts		841			831		786			866		861		1.2			(2.3	)
Trust and investment fee income		357			372		416			350		274		(4.0	)		30.3
Investment securities gains (losses)		-			-		-			-		-		-			-
Insurance agency commissions		2,513			2,595		2,889			2,159		2,744		(3.2	)		(8.4	)
Other noninterest income		932			770		791			750		840		21.0			11.0
Total noninterest income		4,643			4,568		4,882			4,125		4,719		1.6			(1.6	)

NONINTEREST EXPENSE
Salaries and wages		4,404			4,363		4,490			4,424		4,765		0.9			(7.6	)
Employee benefits		897			758		1,281			840		1,211		18.3			(25.9	)
Occupancy expense		547			597		622			572		616		(8.4	)		(11.2	)
Furniture and equipment expense		325			313		300			268		299		3.8			8.7
Data processing		696			660		631			598		675		5.5			3.1
Directors' fees		118			105		121			84		109		12.4			8.3
Goodwill and other intangible assets impairment		3,051			-		-			-		-		-			-
Amortization of intangible assets		128			129		129			129		128		(0.8	)		-
Insurance agency commissions expense		338			464		428			398		428		(27.2	)		(21.0	)
FDIC insurance premium expense		448			460		481			457		458		(2.6	)		(2.2	)
Other noninterest expenses		1,677			1,839		1,838			1,605		1,608		(8.8	)		4.3
Total noninterest expense		12,629			9,688		10,321			9,375		10,297		30.4			22.6

(Loss) income before income taxes		(1,492	)		654		(2,661	)		1,888		3,148		(328.1	)		(147.4	)
Income tax (benefit) expense		(92	)		209		(1,099	)		672		1,197		(144.0	)		(107.7	)

NET (LOSS) INCOME		(1,400	)		445		(1,562	)		1,216		1,951		(414.6	)		(171.8	)
Preferred stock dividends and discount accretion		-			-		-			-		-		-			-
Net (loss) income available to common shareholders	$	(1,400	)	$	445	$	(1,562	)	$	1,216	$	1,951		(414.6	)		(171.8	)

Weighted average shares outstanding - basic		8,443			8,443		8,436			8,419		8,419		-			0.3
Weighted average shares outstanding - diluted		8,443			8,443		8,436			8,421		8,423		-			0.2

Basic net (loss) income per share	$	(0.17	)	$	0.05	$	(0.19	)	$	0.14	$	0.23		(440.0	)		(173.9	)
Basic net (loss) income per common share		(0.17	)		0.05		(0.19	)		0.14		0.23		(440.0	)		(173.9	)
Diluted net (loss) income per share		(0.17	)		0.05		(0.19	)		0.14		0.23		(440.0	)		(173.9	)
Diluted net (loss) income per common share		(0.17	)		0.05		(0.19	)		0.14		0.23		(440.0	)		(173.9	)
Dividends paid per common share		0.06			0.06		0.06			0.16		0.16		-			(62.5	)

Page 10 of 10

Shore Bancshares, Inc.
Consolidated Average Balance Sheets By Quarter
(Dollars in thousands)


																															Average balance
																																3Q 10			3Q 10
																															compared to			compared to
		3Q 10						2Q 10						1Q 10						4Q 09						3Q 09						2Q 10			3Q 09
	Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/
	balance			rate			balance			rate			balance			rate			balance			rate			balance			rate
Earning assets
Loans	$	904,293			5.76	%	$	909,295			5.77	%	$	910,374			5.75	%	$	921,908			5.97	%	$	920,241			6.05	%		(0.6	) %		(1.7	) %
Investment securities
Taxable		99,572			2.70			103,284			3.29			103,488			3.45			97,595			3.50			89,101			3.56			(3.6	)		11.8
Tax-exempt		5,894			5.16			6,460			5.30			6,764			5.39			6,966			4.96			8,125			5.76			(8.8	)		(27.5	)
Federal funds sold		40,638			0.20			38,001			0.15			46,553			0.11			77,782			0.11			81,466			0.16			6.9			(50.1	)
Interest-bearing deposits		15,666			0.15			14,075			0.12			8,246			0.06			668			0.45			1,605			0.77			11.3			876.1
Total earning assets		1,066,063			5.18	%		1,071,115			5.26	%		1,075,425			5.24	%		1,104,919			5.33	%		1,100,538			5.41	%		(0.5	)		(3.1	)
Cash and due from banks		21,865						9,997						14,422						17,312						20,042						118.7			9.1
Other assets		65,081						67,860						67,914						58,543						57,049						(4.1	)		14.1
Allowance for credit losses		(13,966	)					(14,310	)					(12,154	)					(11,437	)					(11,042	)					(2.4	)		26.5
Total assets	$	1,139,043					$	1,134,662					$	1,145,607					$	1,169,337					$	1,166,587						0.4			(2.4	)


Interest-bearing liabilities
Demand deposits	$	132,023			0.24	%	$	132,563			0.25	%	$	127,986			0.25	%	$	127,537			0.26	%	$	125,233			0.26	%		(0.4	)		5.4
Money market and savings deposits		259,511			0.81			259,273			0.72			256,818			0.68			249,393			0.66			245,801			0.67			0.1			5.6
Certificates of deposit $100,000 or more		258,542			1.91			251,340			2.09			259,538			2.24			276,390			2.51			274,580			2.82			2.9			(5.8	)
Other time deposits		212,098			2.37			215,987			2.56			219,731			2.67			228,020			2.91			237,757			3.20			(1.8	)		(10.8	)
Interest-bearing deposits		862,174			1.44			859,163			1.51			864,073			1.59			881,340			1.77			883,371			1.96			0.4			(2.4	)
Short-term borrowings		16,092			0.38			15,771			0.48			18,032			0.71			18,994			0.63			18,373			0.42			2.0			(12.4	)
Long-term debt		1,429			4.36			1,429			4.40			1,429			4.45			1,429			5.28			1,947			19.90			-			(26.6	)
Total interest-bearing liabilities		879,695			1.42	%		876,363			1.50	%		883,534			1.58	%		901,763			1.75	%		903,691			1.97	%		0.4			(2.7	)
Noninterest-bearing deposits		121,844						117,586						118,192						121,642						117,933						3.6			3.3
Accrued expenses and other liabilities		12,196						15,043						15,800						17,217						16,554						(18.9	)		(26.3	)
Stockholders' equity		125,308						125,670						128,081						128,715						128,409						(0.3	)		(2.4	)
Total liabilities and stockholders' equity	$	1,139,043					$	1,134,662					$	1,145,607					$	1,169,337					$	1,166,587						0.4			(2.4	)


Net interest spread					3.76	%					3.76	%					3.66	%					3.58	%					3.44	%
Net interest margin					4.00	%					4.03	%					3.95	%					3.90	%					3.79	%

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

	SHORE BANCSHARES, INC.

Dated: October 28, 2010	By:	/s/ W. Moorhead Vermilye
		W. Moorhead Vermilye
		President and CEO

Exhibit
Number	Description

99.1	Press release dated October 26, 2010 (furnished herewith).