8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  May 9, 2011

SHORE BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

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

18 East Dover Street, Easton, Maryland 21601

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:  (410) 763-7800

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

£      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01.  Other Events.

On May 9, 2011, Shore Bancshares, Inc. issued a press release to announce that its Board of Directors has determined to reduce the quarterly cash dividend on the common stock to $.01 per share starting with the dividend payable on May 31, 2011 to stockholders of record as of May 19, 2011.  A copy of the press release is filed herewith as Exhibit 99.1.

Item 9.01.  Financial Statements and Exhibits.

(d)  Exhibits.

Exhibit 99.1                      Press release dated May 9, 2011 (filed herewith).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SHORE BANCSHARES, INC.
Dated:  May 10, 2011	By:	/s/ W. Moorhead Vermilye
		W. Moorhead Vermilye
		Chief Executive Officer

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EXHIBIT INDEX

Exhibit

Number Description

99.1  Press release dated May 9, 2011 (filed herewith).

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EX-99.1

Exhibit 99.1

Shore Bancshares, Inc. to Reduce Quarterly Dividend to $0.01 Per Share;

Retaining $1.7 Million in Additional Capital Per Year

Easton, Md., (05/09/2011) – Shore Bancshares, Inc. (NASDAQ-SHBI),  today announced that the Board of Directors has reduced the company's quarterly common stock dividend to $0.01 from $0.06 per share, effective for the dividend payable May 31, 2011 to stockholders of record on May 19, 2011. The Board anticipates maintaining the lower dividend rate for the foreseeable future. This action will enable the company to retain an additional $1.7 million in common equity per year.

“Our action should help ensure that our balance sheet remains strong as we work our way through this unprecedented banking cycle,” said W. Moorhead Vermilye, Chief Executive Officer. “While our capital levels are already healthy and exceed the regulatory requirements to be considered ‘well-capitalized,’ we believe that taking this step to further conserve stockholders’ equity is a prudent business decision in light of current market conditions. We hope to achieve an eventual return to a more normalized dividend payout ratio as soon as practicable, once the business climate on the Delmarva Peninsula has stabilized and is showing clear signs of improvement.”

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 two banks, The Talbot Bank of Easton, Maryland, and CNB; 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. Additional information is available at www.shbi.com.

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.”

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