Exhibit 99.1

Shore Bancshares, Inc.

18 E. Dover Street

Easton, Maryland 21601

Phone 410-763-7800

PRESS RELEASE

Shore Bancshares Reports Second Quarter and First-Half Results

Easton, Maryland (07/26/2011) - Shore Bancshares, Inc. (NASDAQ - SHBI) reported a net loss of $233 thousand or $(0.03) per diluted common share for the second quarter of 2011, compared to a net loss of $1.1 million or $(0.13) per diluted common share for the first quarter of 2011, and net income of $445 thousand or $0.05 per diluted common share for the second quarter of 2010. The Company reported a net loss of $1.3 million or $(0.16) per diluted common share for the first half of 2011, compared to a net loss of $1.1 million or $(0.13) per diluted common share for the first half of 2010.

When comparing the second quarter of 2011 to the first quarter of 2011, the primary reason for the lower net loss was a decrease in the provision for credit losses of $995 thousand and a decrease in noninterest expenses of $697 thousand.  Similarly, when comparing the second quarter of 2011 to the second quarter of 2010, the main reason for the current quarter’s loss was a decline in net interest income of $749 thousand and an increase in the provision for credit losses of $478 thousand.  When comparing the first half of 2011 to the first half of 2010, the principal factors driving the difference were a decline in net interest income of $1.3 million, partially offset by a decrease in the provision for credit losses of $749 thousand.

“There is considerable uncertainty about where the economy is headed, both nationally and here on the Delmarva peninsula within our markets. We operate in a micro-economy that revolves around the vitality of commercial and residential real estate sales, development, property values, and the trades associated with the real estate industry – all of which are drivers of our credit quality and loan growth,” said W. Moorhead Vermilye, chief executive officer. “While we are cautiously optimistic as a result of seeing some modest periodic examples of improvement among our best customers, the overall local economy remains pervasively soft.”

“Evidence of the resiliency of our company is that we were able to maintain the net interest margin at a level slightly ahead of the first quarter (3.80%) as we both lowered our cost of funds and grew average noninterest-bearing deposits (+5.5% year-over-year). Loan demand from higher quality borrowers generally remains weak and inconsistent, as many of our better customers are also riding out their own difficulties associated with this cycle, or are waiting on the sidelines for stronger signs of stability and economic improvement,” according to Vermilye.

The Company’s return on average assets for the second quarter of 2011 was (0.08)%, compared to (0.39)% and 0.16% for the quarters ended March 31, 2011 and June 30, 2010, respectively.  The return on average stockholders’ equity was (0.77)% for the second quarter of 2011, compared to (3.59)% for the first quarter of 2011 and 1.42% for the second quarter of 2010.

The Company’s return on average assets for the first six months of 2011 was (0.24)%, compared to (0.20)% for the first six months of 2010.  The return on average stockholders’ equity was (2.18)% for the first half of 2011, compared to (1.78)% for the first half of 2010.

Total assets were $1.124 billion at June 30, 2011, a $6.0 million, or less than 1%, decrease when compared to the $1.130 billion at the end of 2010.  Total loans decreased 2.0% to $877.3 million and total deposits decreased slightly to $973.4 million, when compared to December 31, 2010.  Total stockholders’ equity decreased 1.3% from the end of 2010.  The Company’s year-to-date average equity to average assets was 10.80% and year-to-date average tangible equity to average tangible assets was 9.32%.

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Review of Quarterly Financial Results

Net interest income for the second quarter of 2011 was $9.9 million, a slight improvement from the first quarter of 2011 and a decrease of 7.0% from the same period last year.  The increase in net interest income when compared to the first quarter of 2011 was primarily due to a decrease in the balances of and rates paid on interest-bearing liabilities offsetting the decline in the balances of and yields earned on average earning assets.  The decrease in net interest income when compared to the second quarter of 2010 was primarily due to lower balances of and yields earned on average earning assets.  The Company’s net interest margin was 3.80% for the second quarter of 2011, 3.79% for the first quarter of 2011 and 4.03% for the second quarter of 2010.

The provision for credit losses was $5.4 million for the three months ended June 30, 2011. The comparable amounts were $6.4 million and $4.9 million for the three months ended March 31, 2011 and June 30, 2010, respectively.  The ratio of the allowance for credit losses to period-end loans was 1.86% at June 30, 2011, compared to 1.97% at March 31, 2011 and 1.47% at June 30, 2010.  Management believes that the provision for credit losses and the resulting allowance were adequate at June 30, 2011.

The level of provision for credit losses was primarily in response to loan charge-offs which remain at historically high levels and overall economic conditions which have not improved.  Net charge-offs were $6.5 million for the second quarter of 2011, $3.1 million for the first quarter of 2011 and $4.4 million for the second quarter of 2010.  The ratio of quarter-to-date annualized net charge-offs to average loans was 2.96% for the second quarter of 2011, 1.44% for the first quarter of 2011 and 1.95% for the second quarter of 2010. In addition, nonperforming assets have increased when compared to the end of June 2010, although they have declined 3.9% since the end of the first quarter of 2011.  The most improvement was in the decline of loans 90 days past due and still accruing which was partially offset by an increase in other real estate and other assets owned.  The ratio of nonperforming assets to total assets was 7.08% at June 30, 2011.  The comparable nonperforming assets to total assets ratio was 7.32% at March 31, 2011, and 4.28% at June 30, 2010.

Total noninterest income for the second quarter of 2011 remained relatively unchanged when compared to the first quarter of 2011 and decreased $187 thousand, or 4.1%, when compared to the second quarter of 2010. The decrease when compared to the first quarter of 2011 was primarily a result of a decrease in investment securities gains and insurance agency commissions which were mainly offset by increases in service charges on deposit accounts and trust and investment fee income.  The decline in noninterest income during the second quarter of 2011 when compared to the second quarter of 2010 was primarily due to a decline in insurance agency commissions and service charges on deposit accounts.

Total noninterest expense for the second quarter of 2011 decreased $697 thousand, or 7.0%, when compared to the first quarter of 2011 mainly due to lower salaries, employee benefits and data processing expenses.  Employee benefits declined primarily because the Company incurred costs relating to a new wellness program during the first quarter of 2011 and because forfeitures were used to reduce 401K costs during the second quarter of 2011.  Data processing expenses decreased mainly because the Company incurred data processing charges relating to the merger of The Felton Bank into CNB during the first quarter of 2011.  When compared to the second quarter of 2010, total noninterest expense for the second quarter of 2011 decreased $494 thousand, or 5.1%, primarily due to lower salaries, insurance agency commissions and expenses related to other real estate owned activities.  These expenses were partially offset by higher employee benefits which increased because expenses accrued for profit sharing plans were reduced during the second quarter of 2010.

Review of Six-Month Financial Results

Net interest income for the first six months of 2011 was $19.8 million, a decrease of 6.1% when compared to the first six months of 2010.  The decrease was primarily due to lower balances of and yields earned on average earning assets.  The net interest margin decreased 20 basis points (bp) from 3.99% for the first half of 2010 to 3.79% for the first half of 2011.

The provisions for credit losses for the six months ended June 30, 2011 and 2010 were $11.8 million and $12.5 million, respectively.  Net charge-offs were $9.7 million and $10.1 million for the six months ended

Page 3 of 11

June 30, 2011 and 2010, respectively.  The ratio of year-to-date annualized net charge-offs to average loans was 2.20% for the first half of 2011 and 2.24% for the first half of 2010.

Total noninterest income for the six months ended June 30, 2011 declined $674 thousand when compared to the same period in 2010.  As with the second quarter 2011 results, the decrease in noninterest income was mainly due to a decline in insurance agency commissions and service charges on deposit accounts.

Total noninterest expense for the six months ended June 30, 2011 decreased $924 thousand when compared to the same period in 2010.  The primary reason for the decrease was lower expenses related to salaries, which included lower amounts for bonus and stock-based compensation expenses, insurance agency commissions and other real estate owned activities.  These expenses were partially offset by higher data processing charges relating to the merger of The Felton Bank into CNB during the first quarter of 2011.

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”.

For further information contact: W. Moorhead Vermilye, Chief Executive Officer, 410-763-7800

Page 4 of 11

Shore Bancshares, Inc.

Financial Highlights

(Dollars in thousands, except per share data)

	For the Three Months Ended									For the Six Months Ended
	June 30,									June 30,
	2011			2010			Change			2011			2010			Change
PROFITABILITY FOR THE PERIOD
Net interest income	$	9,942		$	10,691			(7.0	) %	$	19,804		$	21,086			(6.1	) %
Provision for credit losses		5,395			4,917			9.7			11,785			12,534			(6.0	)
Noninterest income		4,381			4,568			(4.1	)		8,776			9,450			(7.1	)
Noninterest expense		9,194			9,688			(5.1	)		19,085			20,009			(4.6	)
(Loss) income before income taxes		(266	)		654			(140.7	)		(2,290	)		(2,007	)		(14.1	)
Income tax (benefit) expense		(33	)		209			(115.8	)		(974	)		(890	)		(9.4	)
Net (loss) income	$	(233	)	$	445			(152.4	)	$	(1,316	)	$	(1,117	)		(17.8	)
Return on average assets		(0.08	)  %		0.16	%		(24	) bp		(0.24	) %		(0.20	) %		(4	) bp
Return on average equity		(0.77	)		1.42			(219	)		(2.18	)		(1.78	)		(40	)
Return on average tangible equity (1)		(0.60	)		2.01			(261	)		(2.26	)		(1.83	)		(43	)
Net interest margin		3.80			4.03			(23	)		3.79			3.99			(20	)
Efficiency ratio - GAAP		64.19			63.49			70			66.78			65.53			125
Efficiency ratio - Non-GAAP (1)		63.31			62.64			67			66.07			64.68			139
PER SHARE DATA
Basic net (loss) income per common share	$	(0.03	)	$	0.05			(160.0	) %	$	(0.16	)	$	(0.13	)		(23.1	) %
Diluted net (loss) income per common share		(0.03	)		0.05			(160.0	)		(0.16	)		(0.13	)		(23.1	)
Dividends paid per common share		0.01			0.06			(83.3	)		0.07			0.12			(41.7	)
Book value per common share at period end		14.30			14.77			(3.2	)
Tangible book value per common share at period end (1)		12.14			12.27			(1.1	)
Market value at period end		6.98			11.91			(41.4	)
Market range:
High		10.21			14.80			(31.0	)		11.11			14.80			(24.9	)
Low		6.51			11.75			(44.6	)		6.51			10.21			(36.2	)
PERIOD-END BALANCE SHEET DATA
Loans	$	877,331		$	905,477			(3.1	) %
Securities		113,271			106,556			6.3
Assets		1,124,191			1,129,196			(0.4	)
Deposits		973,442			971,608			0.2
Stockholders' equity		120,941			124,666			(3.0	)
AVERAGE BALANCE SHEET DATA
Loans	$	881,976		$	909,295			(3.0	) %	$	884,738		$	909,831			(2.8	) %
Securities		111,190			109,744			1.3			108,727			109,996			(1.2	)
Earning assets		1,056,658			1,071,115			(1.3	)		1,059,396			1,073,257			(1.3	)
Assets		1,125,213			1,134,662			(0.8	)		1,128,115			1,140,105			(1.1	)
Deposits		976,840			976,749			-			979,531			979,491			-
Stockholders' equity		121,187			125,670			(3.6	)		121,823			126,869			(4.0	)
CAPITAL AND CREDIT QUALITY RATIOS
Average equity to average assets		10.77	%		11.08	%		(31	) bp		10.80	%		11.13	%		(33	) bp
Average tangible equity to average tangible assets (1)		9.29			9.38			(9	)		9.32			9.44			(12	)
Annualized net charge-offs to average loans		2.96			1.95			101			2.20			2.24			(4	)
Allowance for credit losses to period-end loans		1.86			1.47			39
Allowance for credit losses to nonaccrual loans		33.74			35.45			(171	)
Allowance for credit losses to nonperforming loans (2)		22.80			28.34			(554	)
Nonaccrual loans to total loans		5.53			4.14			139
Nonaccrual loans to total assets		4.31			3.32			99
Nonperforming assets to total loans+other real estate and
other assets owned (3)		8.99			5.33			366
Nonperforming assets to total assets		7.08			4.28			280

(1) See the reconciliation table on page 11 of 11.

(2) Nonperforming loans include nonaccrual, 90 days past due and still accruing and troubled debt restructurings.

(3) Nonperforming assets include nonperforming loans and other real estate and other assets owned.

Page 5 of 11

Shore Bancshares, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

										June 30, 2011			June 30, 2011
	June 30,			December 31,			June 30,			compared to			compared to
	2011			2010			2010			December 31, 2010			June 30, 2010
ASSETS
Cash and due from banks	$	21,234		$	19,680		$	16,645			7.9	%		27.6	%
Interest-bearing deposits with other banks		45,598			21,593			15,652			111.2			191.3
Federal funds sold		13,881			36,691			32,372			(62.2	)		(57.1	)
Investments available for sale (at fair value)		106,742			99,055			98,211			7.8			8.7
Investments held to maturity		6,529			6,727			8,345			(2.9	)		(21.8	)
Loans		877,331			895,404			905,477			(2.0	)		(3.1	)
Less: allowance for credit losses		(16,358	)		(14,227	)		(13,289	)		15.0			23.1
Loans, net		860,973			881,177			892,188			(2.3	)		(3.5	)
Premises and equipment, net		14,377			14,483			14,924			(0.7	)		(3.7	)
Goodwill		13,678			13,678			15,954			-			(14.3	)
Other intangible assets, net		4,583			4,840			5,148			(5.3	)		(11.0	)
Other real estate and other assets owned, net		7,877			3,702			1,428			112.8			451.6
Other assets		28,719			28,685			28,329			0.1			1.4
Total assets	$	1,124,191		$	1,130,311		$	1,129,196			(0.5	)		(0.4	)
LIABILITIES
Noninterest-bearing deposits	$	130,789		$	124,188		$	121,410			5.3			7.7
Interest-bearing deposits		842,653			855,328			850,198			(1.5	)		(0.9	)
Total deposits		973,442			979,516			971,608			(0.6	)		0.2
Short-term borrowings		18,251			16,041			17,864			13.8			2.2
Accrued expenses and other liabilities		10,625			11,309			13,629			(6.0	)		(22.0	)
Long-term debt		932			932			1,429			-			(34.8	)
Total liabilities		1,003,250			1,007,798			1,004,530			(0.5	)		(0.1	)
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; authorized
35,000,000 shares		85			84			84			1.2			1.2
Warrant		1,543			1,543			1,543			-			-
Additional paid in capital		30,334			30,242			30,081			0.3			0.8
Retained earnings		90,551			92,458			94,021			(2.1	)		(3.7	)
Accumulated other comprehensive loss		(1,572	)		(1,814	)		(1,063	)		13.3			(47.9	)
Total stockholders' equity		120,941			122,513			124,666			(1.3	)		(3.0	)
Total liabilities and stockholders'     equity	$	1,124,191		$	1,130,311		$	1,129,196			(0.5	)		(0.4	)
Period-end common shares outstanding		8,457			8,443			8,443			0.2			0.2
Book value per common share	$	14.30		$	14.51		$	14.77			(1.4	)		(3.2	)

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Shore Bancshares, Inc.

Consolidated Statements of Income

(In thousands, except per share data)

	For the Three Months Ended								For the Six Months Ended
	June 30,								June 30,
	2011			2010		% Change			2011			2010			% Change
INTEREST INCOME
Interest and fees on loans	$	11,896		$	13,047		(8.8	)  %	$	23,897		$	25,921			(7.8	)%
Interest and dividends on investment securities:
Taxable		782			846		(7.6	)		1,439			1,728			(16.7	)
Tax-exempt		40			56		(28.6	)		78			115			(32.2	)
Interest on federal funds sold		5			14		(64.3	)		21			26			(19.2	)
Interest on deposits with other banks		12			4		200.0			18			5			260.0
Total interest income		12,735			13,967		(8.8	)		25,453			27,795			(8.4	)
INTEREST EXPENSE
Interest on deposits		2,769			3,242		(14.6	)		5,602			6,627			(15.5	)
Interest on short-term borrowings		13			19		(31.6	)		26			51			(49.0	)
Interest on long-term debt		11			15		(26.7	)		21			31			(32.3	)
Total interest expense		2,793			3,276		(14.7	)		5,649			6,709			(15.8	)
NET INTEREST INCOME		9,942			10,691		(7.0	)		19,804			21,086			(6.1	)
Provision for credit losses		5,395			4,917		9.7			11,785			12,534			(6.0	)
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES		4,547			5,774		(21.3	)		8,019			8,552			(6.2	)
NONINTEREST INCOME
Service charges on deposit accounts		744			831		(10.5	)		1,448			1,617			(10.5	)
Trust and investment fee income		418			372		12.4			794			788			0.8
Investment securities gains		2			-		-			81			-			-
Insurance agency commissions		2,475			2,595		(4.6	)		4,985			5,484			(9.1	)
Other noninterest income		742			770		(3.6	)		1,468			1,561			(6.0	)
Total noninterest income		4,381			4,568		(4.1	)		8,776			9,450			(7.1	)
NONINTEREST EXPENSE
Salaries and wages		4,104			4,363		(5.9	)		8,350			8,853			(5.7	)
Employee benefits		886			758		16.9			2,039			2,039			-
Occupancy expense		568			597		(4.9	)		1,164			1,219			(4.5	)
Furniture and equipment expense		291			313		(7.0	)		563			613			(8.2	)
Data processing		680			660		3.0			1,531			1,291			18.6
Directors' fees		112			105		6.7			219			226			(3.1	)
Amortization of intangible assets		128			129		(0.8	)		257			258			(0.4	)
Insurance agency commissions expense		357			464		(23.1	)		732			892			(17.9	)
FDIC insurance premium expense		404			460		(12.2	)		864			941			(8.2	)
Other noninterest expenses		1,664			1,839		(9.5	)		3,366			3,677			(8.5	)
Total noninterest expense		9,194			9,688		(5.1	)		19,085			20,009			(4.6	)
(Loss) income  before income taxes		(266	)		654		(140.7	)		(2,290	)		(2,007	)		(14.1	)
Income tax (benefit) expense		(33	)		209		(115.8	)		(974	)		(890	)		(9.4	)
NET (LOSS) INCOME	$	(233	)	$	445		(152.4	)	$	(1,316	)	$	(1,117	)		(17.8	)
Weighted average shares outstanding - basic		8,446			8,443		-			8,445			8,440			0.1
Weighted average shares outstanding - diluted		8,446			8,443		-			8,445			8,440			0.1
Basic net (loss) income per common share	$	(0.03	)	$	0.05		(160.0	)	$	(0.16	)	$	(0.13	)		(23.1	)
Diluted net (loss) income per common share		(0.03	)		0.05		(160.0	)		(0.16	)		(0.13	)		(23.1	)
Dividends paid per common share		0.01			0.06		(83.3	)		0.07			0.12			(41.7	)

Page 7 of 11

Shore Bancshares, Inc.

Consolidated Average Balance Sheets

(Dollars in thousands)

	For the Three Months Ended												For the Six Months Ended
	June 30,												June 30,
	2011						2010						2011						2010
	Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/
	balance			rate			balance			rate			balance			rate			balance			rate
Earning assets
Loans	$	881,976			5.43	%	$	909,295			5.77	%	$	884,738			5.46	%	$	909,831			5.76	%
Investment securities
Taxable		106,609			2.94			103,284			3.29			104,131			2.79			103,385			3.37
Tax-exempt		4,581			5.27			6,460			5.30			4,596			5.18			6,611			5.35
Federal funds sold		24,310			0.09			38,001			0.15			35,499			0.12			42,253			0.13
Interest-bearing deposits		39,182			0.12			14,075			0.12			30,432			0.12			11,177			0.10
Total earning assets		1,056,658			4.86	%		1,071,115			5.26	%		1,059,396			4.87	%		1,073,257			5.25	%
Cash and due from banks		18,327						9,997						18,819						12,197
Other assets		68,190						67,860						66,711						67,889
Allowance for credit losses		(17,962	)					(14,310	)					(16,811	)					(13,238	)
Total assets	$	1,125,213					$	1,134,662					$	1,128,115					$	1,140,105
Interest-bearing liabilities
Demand deposits	$	137,775			0.22	%	$	132,563			0.25	%	$	134,719			0.22	%	$	130,287			0.25	%
Money market and savings deposits		261,869			0.97			259,273			0.72			261,358			0.95			258,180			0.70
Certificates of deposit $100,000 or more		244,805			1.67			251,340			2.09			251,953			1.69			255,416			2.17
Other time deposits		206,310			2.02			215,987			2.56			207,300			2.06			217,849			2.62
Interest-bearing deposits		850,759			1.31			859,163			1.51			855,330			1.32			861,732			1.55
Short-term borrowings		15,020			0.36			15,771			0.48			14,595			0.36			16,896			0.60
Long-term debt		932			4.51			1,429			4.40			932			4.53			1,429			4.43
Total interest-bearing liabilities		866,711			1.29	%		876,363			1.50	%		870,857			1.31	%		880,057			1.54	%
Noninterest-bearing deposits		126,081						117,586						124,201						117,759
Accrued expenses and other liabilities		11,234						15,043						11,234						15,420
Stockholders' equity		121,187						125,670						121,823						126,869
Total liabilities and stockholders' equity	$	1,125,213					$	1,134,662					$	1,128,115					$	1,140,105
Net interest spread					3.57	%					3.76	%					3.56	%					3.71	%
Net interest margin					3.80	%					4.03	%					3.79	%					3.99	%

Page 8 of 11

Shore Bancshares, Inc.

Financial Highlights By Quarter

(Dollars in thousands, except per share data)

	2nd quarter			1st quarter			4th quarter			3rd quarter			2nd quarter				2Q 11			2Q 11
	2011			2011			2010			2010			2010			compared to			compared to
		(2Q 11)			(1Q 11)			(4Q 10)			(3Q 10)			(2Q 10)			1Q 11			2Q 10
PROFITABILITY FOR THE PERIOD
Net interest income	$	9,942		$	9,862		$	10,866		$	10,687		$	10,691			0.8	%		(7.0	) %
Provision for credit losses		5,395			6,390			4,392			4,193			4,917			(15.6	)		9.7
Noninterest income		4,381			4,395			3,948			4,643			4,568			(0.3	)		(4.1	)
Noninterest expense		9,194			9,891			9,082			12,629			9,688			(7.0	)		(5.1	)
(Loss) income before income taxes		(266	)		(2,024	)		1,340			(1,492	)		654			86.9			(140.7	)
Income tax (benefit) expense		(33	)		(941	)		490			(92	)		209			96.5			(115.8	)
Net (loss) income	$	(233	)	$	(1,083	)	$	850		$	(1,400	)	$	445			78.5			(152.4	)
Return on average assets		(0.08	) %		(0.39	) %		0.30	%		(0.49	) %		0.16	%		31	bp		(24	) bp
Return on average equity		(0.77	)		(3.59	)		2.73			(4.43	)		1.42			282			(219	)
Return on average tangible equity (1)		(0.60	)		(3.92	)		3.49			(1.56	)		2.01			332			(261	)
Net interest margin		3.80			3.79			4.09			4.00			4.03			1			(23	)
Efficiency ratio - GAAP		64.19			69.38			61.31			82.38			63.49			(519	)		70
Efficiency ratio - Non-GAAP (1)		63.31			68.85			60.44			62.56			62.64			(554	)		67
PER SHARE DATA
Basic net (loss) income per common share	$	(0.03	)	$	(0.13	)	$	0.10		$	(0.17	)	$	0.05			76.9	%		(160.0	) %
Diluted net (loss) income per common share		(0.03	)		(0.13	)		0.10			(0.17	)		0.05			76.9			(160.0	)
Dividends paid per common share		0.01			0.06			0.06			0.06			0.06			(83.3	)		(83.3	)
Book value per common share at period end		14.30			14.32			14.51			14.49			14.77			(0.1	)		(3.2	)
Tangible book value per common share at period end (1)		12.14			12.14			12.32			12.37			12.27			-			(1.1	)
Market value at period end		6.98			9.75			10.54			9.48			11.91			(28.4	)		(41.4	)
Market range:
High		10.21			11.11			10.73			12.10			14.80			(8.1	)		(31.0	)
Low		6.51			9.42			9.25			9.20			11.75			(30.9	)		(44.6	)
PERIOD-END BALANCE SHEET DATA
Loans	$	877,331		$	884,715		$	895,404		$	906,490		$	905,477			(0.8	) %		(3.1	) %
Securities		113,271			106,920			105,782			104,075			106,556			5.9			6.3
Assets		1,124,191			1,131,334			1,130,311			1,134,503			1,129,196			(0.6	)		(0.4	)
Deposits		973,442			986,486			979,516			982,428			971,608			(1.3	)		0.2
Stockholders' equity		120,941			120,926			122,513			122,355			124,666			-			(3.0	)
AVERAGE BALANCE SHEET DATA
Loans	$	881,976		$	887,531		$	903,075		$	904,293		$	909,295			(0.6	) %		(3.0	) %
Securities		111,190			106,235			103,600			105,466			109,744			4.7			1.3
Earning assets		1,056,658			1,062,164			1,060,645			1,066,063			1,071,115			(0.5	)		(1.3	)
Assets		1,125,213			1,131,259			1,128,517			1,139,043			1,134,662			(0.5	)		(0.8	)
Deposits		976,840			982,249			978,444			984,018			976,749			(0.6	)		-
Stockholders' equity		121,187			122,466			123,341			125,308			125,670			(1.0	)		(3.6	)
CAPITAL AND CREDIT QUALITY RATIOS
Average equity to average assets		10.77	%		10.83	%		10.93	%		11.00	%		11.08	%		(6	) bp		(31	) bp
Average tangible equity to average tangible assets (1)		9.29			9.35			9.50			9.33			9.38			(6	)		(9	)
Annualized net charge-offs to average loans		2.96			1.44			1.46			1.90			1.95			152			101
Allowance for credit losses to period-end loans		1.86			1.97			1.59			1.45			1.47			(11	)		39
Allowance for credit losses to nonaccrual loans		33.74			35.83			39.26			35.76			35.45			(209	)		(171	)
Allowance for credit losses to nonperforming loans (2)		22.80			22.40			22.82			28.76			28.34			40			(554	)
Nonaccrual loans to total loans		5.53			5.51			4.05			4.06			4.14			2			139
Nonaccrual loans to total assets		4.31			4.31			3.21			3.24			3.32			-			99
Nonperforming assets to total loans+other real estate and
other assets owned (3)		8.99			9.31			7.34			5.20			5.33			(32	)		366
Nonperforming assets to total assets		7.08			7.32			5.84			4.16			4.28			(24	)		280

(1)  See the reconciliation table on page 11 of 11.

(2)  Nonperforming loans include nonaccrual, 90 days past due and still accruing and troubled debt restructurings.

(3)  Nonperforming assets include nonperforming loans and other real estate and other assets owned.

Page 9 of 11

Shore Bancshares, Inc.

Consolidated Statements of Income By Quarter

(In thousands, except per share data)

															2Q 11			2Q 11
														compared to			compared to
		2Q 11			1Q 11			4Q 10		3Q 10			2Q 10		1Q 11			2Q 10
INTEREST INCOME
Interest and fees on loans	$	11,896		$	12,001		$	12,958	$	13,083		$	13,047		(0.9	) %		(8.8	) %
Interest and dividends on investment securities:
Taxable		782			657			804		677			846		19.0			(7.6	)
Tax-exempt		40			38			47		50			56		5.3			(28.6	)
Interest on federal funds sold		5			16			13		21			14		(68.8	)		(64.3	)
Interest on deposits with other banks		12			6			7		6			4		100.0			200.0
Total interest income		12,735			12,718			13,829		13,837			13,967		0.1			(8.8	)
INTEREST EXPENSE
Interest on deposits		2,769			2,833			2,937		3,117			3,242		(2.3	)		(14.6	)
Interest on short-term borrowings		13			13			15		17			19		-			(31.6	)
Interest on long-term debt		11			10			11		16			15		10.0			(26.7	)
Total interest expense		2,793			2,856			2,963		3,150			3,276		(2.2	)		(14.7	)
NET INTEREST INCOME		9,942			9,862			10,866		10,687			10,691		0.8			(7.0	)
Provision for credit losses		5,395			6,390			4,392		4,193			4,917		(15.6	)		9.7
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES		4,547			3,472			6,474		6,494			5,774		31.0			(21.3	)
NONINTEREST INCOME
Service charges on deposit accounts		744			704			799		841			831		5.7			(10.5	)
Trust and investment fee income		418			376			358		357			372		11.2			12.4
Investment securities gains		2			79			-		-			-		(97.5	)		-
Insurance agency commissions		2,475			2,510			2,116		2,513			2,595		(1.4	)		(4.6	)
Other noninterest income		742			726			675		932			770		2.2			(3.6	)
Total noninterest income		4,381			4,395			3,948		4,643			4,568		(0.3	)		(4.1	)
NONINTEREST EXPENSE
Salaries and wages		4,104			4,246			4,220		4,404			4,363		(3.3	)		(5.9	)
Employee benefits		886			1,153			893		897			758		(23.2	)		16.9
Occupancy expense		568			596			562		547			597		(4.7	)		(4.9	)
Furniture and equipment expense		291			272			262		325			313		7.0			(7.0	)
Data processing		680			851			620		696			660		(20.1	)		3.0
Directors' fees		112			107			68		118			105		4.7			6.7
Goodwill and other intangible assets impairment		-			-			-		3,051			-		-			-
Amortization of intangible assets		128			129			129		128			129		(0.8	)		(0.8	)
Insurance agency commissions expense		357			375			339		338			464		(4.8	)		(23.1	)
FDIC insurance premium expense		404			460			445		448			460		(12.2	)		(12.2	)
Other noninterest expenses		1,664			1,702			1,544		1,677			1,839		(2.2	)		(9.5	)
Total noninterest expense		9,194			9,891			9,082		12,629			9,688		(7.0	)		(5.1	)
(Loss) income before income taxes		(266	)		(2,024	)		1,340		(1,492	)		654		86.9			(140.7	)
Income tax (benefit) expense		(33	)		(941	)		490		(92	)		209		96.5			(115.8	)
NET (LOSS) INCOME	$	(233	)	$	(1,083	)	$	850	$	(1,400	)	$	445		78.5			(152.4	)
Weighted average shares outstanding - basic		8,446			8,443			8,443		8,443			8,443		-			-
Weighted average shares outstanding - diluted		8,446			8,443			8,443		8,443			8,443		-			-
Basic net (loss) income per common share	$	(0.03	)	$	(0.13	)	$	0.10	$	(0.17	)	$	0.05		76.9			(160.0	)
Diluted net (loss) income per common share		(0.03	)		(0.13	)		0.10		(0.17	)		0.05		76.9			(160.0	)
Dividends paid per common share		0.01			0.06			0.06		0.06			0.06		(83.3	)		(83.3	)

Page 10 of 11

Shore Bancshares, Inc.

Consolidated Average Balance Sheets By Quarter

(Dollars in thousands)

																															Average balance
																																2Q 11			2Q 11
																															compared to			compared to
		2Q 11						1Q 11						4Q 10						3Q 10						2Q 10						1Q 11			2Q 10
	Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/			Average			Yield/
	balance			rate			balance			rate			balance			rate			balance			rate			balance			rate
Earning assets
Loans	$	881,976			5.43	%	$	887,531			5.50	%	$	903,075			5.71	%	$	904,293			5.76	%	$	909,295			5.77	%		(0.6	)  %		(3.0	) %
Investment securities
Taxable		106,609			2.94			101,625			2.62			98,378			3.24			99,572			2.70			103,284			3.29			4.9			3.2
Tax-exempt		4,581			5.27			4,610			5.08			5,222			5.40			5,894			5.16			6,460			5.30			(0.6	)		(29.1	)
Federal funds sold		24,310			0.09			46,813			0.14			34,018			0.16			40,638			0.20			38,001			0.15			(48.1	)		(36.0	)
Interest-bearing deposits		39,182			0.12			21,585			0.12			19,952			0.12			15,666			0.15			14,075			0.12			81.5			178.4
Total earning assets		1,056,658			4.86	%		1,062,164			4.88	%		1,060,645			5.20	%		1,066,063			5.18	%		1,071,115			5.26	%		(0.5	)		(1.4	)
Cash and due from banks		18,327						19,316						19,867						21,865						9,997						(5.1	)		83.3
Other assets		68,190						65,426						62,305						65,081						67,860						4.2			0.5
Allowance for credit losses		(17,962	)					(15,647	)					(14,300	)					(13,966	)					(14,310	)					14.8			25.5
Total assets	$	1,125,213					$	1,131,259					$	1,128,517					$	1,139,043					$	1,134,662						(0.5	)		(0.8	)
Interest-bearing liabilities
Demand deposits	$	137,775			0.22	%	$	131,628			0.22	%	$	128,592			0.22	%	$	132,023			0.24	%	$	132,563			0.25	%		4.7			3.9
Money market and savings deposits		261,869			0.97			260,841			0.93			258,713			0.84			259,511			0.81			259,273			0.72			0.4			1.0
Certificates of deposit $100,000 or more		244,805			1.67			259,179			1.70			256,167			1.77			258,542			1.91			251,340			2.09			(5.6	)		(2.6	)
Other time deposits		206,310			2.02			208,301			2.10			208,808			2.23			212,098			2.37			215,987			2.56			(1.0	)		(4.5	)
Interest-bearing deposits		850,759			1.31			859,949			1.34			852,280			1.37			862,174			1.44			859,163			1.51			(1.1	)		(1.0	)
Short-term borrowings		15,020			0.36			14,165			0.37			15,381			0.39			16,092			0.38			15,771			0.48			6.0			(4.8	)
Long-term debt		932			4.51			932			4.56			932			4.46			1,429			4.36			1,429			4.40			-			(34.8	)
Total interest-bearing liabilities		866,711			1.29	%		875,046			1.32	%		868,593			1.35	%		879,695			1.42	%		876,363			1.50	%		(1.0	)		(1.1	)
Noninterest-bearing deposits		126,081						122,300						126,164						121,844						117,586						3.1			7.2
Accrued expenses and other liabilities		11,234						11,447						10,419						12,196						15,043						(1.9	)		(25.3	)
Stockholders' equity		121,187						122,466						123,341						125,308						125,670						(1.0	)		(3.6	)
Total liabilities and stockholders' equity	$	1,125,213					$	1,131,259					$	1,128,517					$	1,139,043					$	1,134,662						(0.5	)		(0.8	)
Net interest spread					3.57	%					3.56	%					3.85	%					3.76	%					3.76	%
Net interest margin					3.80	%					3.79	%					4.09	%					4.00	%					4.03	%

Page 11 of 11

Shore Bancshares, Inc.

Reconciliation of Non-GAAP Measures

(In thousands, except per share data)

																YTD			YTD
		2Q 11			1Q 11			4Q 10			3Q 10			2Q 10		06/30/2011			06/30/2010
The following reconciles return on average equity and return on
average tangible equity (Note 1):
Net (loss) income	$	(233	)	$	(1,083	)	$	850		$	(1,400	)	$	445		$	(1,316	)	$	(1,117	)
Net (loss) income - annualized (A)	$	(935	)	$	(4,392	)	$	3,372		$	(5,554	)	$	1,785		$	(2,654	)	$	(2,253	)
Net (loss) income, excluding net amortization and
impairment charges of intangible assets	$	(155	)	$	(1,005	)	$	928		$	(409	)	$	523		$	(1,160	)	$	(961	)
Net (loss) income, excluding net amortization and
impairment charges of intangible assets -   annualized (B)	$	(622	)	$	(4,076	)	$	3,682		$	(1,623	)	$	2,098		$	(2,339	)	$	(1,938	)
Average stockholders' equity (C)	$	121,187		$	122,466		$	123,341		$	125,308		$	125,670		$	121,823		$	126,869
Less:  Average goodwill and other intangible assets		(18,334	)		(18,465	)		(17,877	)		(21,016	)		(21,178	)		(18,399	)		(21,243	)
Average tangible equity (D)	$	102,853		$	104,001		$	105,464		$	104,292		$	104,492		$	103,424		$	105,626
Return on average equity (GAAP)  (A)/(C)		(0.77	) %		(3.59	) %		2.73	%		(4.43	) %		1.42	%		(2.18	) %		(1.78	) %
Return on average tangible equity (Non-GAAP)  (B)/(D)		(0.60	) %		(3.92	) %		3.49	%		(1.56	) %		2.01	%		(2.26	) %		(1.83	) %
The following reconciles GAAP efficiency ratio and non-GAAP
efficiency ratio (Note 2):
Noninterest expense (E)	$	9,194		$	9,891		$	9,082		$	12,629		$	9,688		$	19,085		$	20,009
Less:  Amortization of intangible assets		(128	)		(129	)		(129	)		(128	)		(129	)		(257	)		(258	)
Impairment charges		-			-			-			(3,051	)		-			-			-
Adjusted noninterest expense (F)	$	9,066		$	9,762		$	8,953		$	9,450		$	9,559		$	18,828		$	19,751
Net interest income (G)	$	9,942		$	9,862		$	10,866		$	10,687		$	10,691		$	19,804		$	21,086
Noninterest income (H)	$	4,381		$	4,395		$	3,948		$	4,643		$	4,568		$	8,776		$	9,450
Less:  Investment securities (gains)/losses		(2	)		(79	)		-			-			-			(81	)		-
Other nonrecurring (gains)/losses		-			-			-			(224	)		-			-			-
Adjusted noninterest income (I)	$	4,379		$	4,316		$	3,948		$	4,419		$	4,568		$	8,695		$	9,450
Efficiency ratio (GAAP)  (E)/(G)+(H)		64.19	%		69.38	%		61.31	%		82.38	%		63.49	%		66.78	%		65.53	%
Efficiency ratio (Non-GAAP)  (F)/(G)+(I)		63.31	%		68.85	%		60.44	%		62.56	%		62.64	%		66.07	%		64.68	%
The following reconciles book value per common share and tangible
book value per common share (Note 1):
Stockholders' equity (J)	$	120,941		$	120,926		$	122,513		$	122,355		$	124,666
Less:  Goodwill and other intangible assets		(18,261	)		(18,389	)		(18,518	)		(17,923	)		(21,102	)
Tangible equity (K)	$	102,680		$	102,537		$	103,995		$	104,432		$	103,564
Shares outstanding (L)		8,457			8,443			8,443			8,443			8,443
Book value per common share (GAAP)  (J)/(L)	$	14.30		$	14.32		$	14.51		$	14.49		$	14.77
Tangible book value per common share (Non-GAAP)  (K)/(L)	$	12.14		$	12.14		$	12.32		$	12.37		$	12.27
The following reconciles average equity to average assets and
average tangible equity to average tangible assets (Note 1):
Average stockholders' equity (M)	$	121,187		$	122,466		$	123,341		$	125,308		$	125,670		$	121,823		$	126,869
Less:  Average goodwill and other intangible assets		(18,334	)		(18,465	)		(17,877	)		(21,016	)		(21,178	)		(18,399	)		(21,243	)
Average tangible equity (N)	$	102,853		$	104,001		$	105,464		$	104,292		$	104,492		$	103,424		$	105,626
Average assets (O)	$	1,125,213		$	1,131,259		$	1,128,517		$	1,139,043		$	1,134,662		$	1,128,115		$	1,140,105
Less:  Average goodwill and other intangible assets		(18,334	)		(18,465	)		(17,877	)		(21,016	)		(21,178	)		(18,399	)		(21,243	)
Average tangible assets (P)	$	1,106,879		$	1,112,794		$	1,110,640		$	1,118,027		$	1,113,484		$	1,109,716		$	1,118,862
Average equity/average assets (GAAP)  (M)/(O)		10.77	%		10.83	%		10.93	%		11.00	%		11.08	%		10.80	%		11.13	%
Average tangible equity/average tangible assets (Non-GAAP)  (N)/(P)		9.29	%		9.35	%		9.50	%		9.33	%		9.38	%		9.32	%		9.44	%

Note 1:  Management believes that reporting tangible equity and tangible assets more closely approximates the adequacy of capital for regulatory purposes.

Note 2:  Management believes that reporting the non-GAAP efficiency ratio more closely measures its effectiveness of controlling cash-based operating activities.