The following tables present the capital amounts and ratios for Shore Bancshares, Inc., Talbot Bank and CNB as of December 31, 2015 and 2014.

	Common		Total		Net				Common			Tier 1			Total
	Equity/		Risk-		Risk-		Adjusted		Equity			Risk-Based			Risk-Based			Tier 1
December 31, 2015 (1)	Tier 1		Based		Weighted		Average		Tier 1 ratio			Capital			Capital			Leverage
(Dollars in thousands)	Capital		Capital		Assets		Total Assets		(2)			Ratio			Ratio			Ratio
Company	$	126,024	$	134,643	$	807,807	$	1,116,692		15.60	%		15.60	%		16.67	%		11.29	%
Talbot Bank		59,692		64,405		448,634		613,945		13.31			13.31			14.36			9.72
CNB		48,051		51,957		354,278		486,404		13.56			13.56			14.67			9.88

December 31, 2014 (1) (Dollars in thousands)	Tier 1 Capital		Total Risk- Based Capital		Net Risk- Weighted Assets		Adjusted Average Total Assets		Common Equity Tier 1 ratio (2)		Tier 1 Risk-Based Capital Ratio			Total Risk-Based Capital Ratio			Tier 1 Leverage Ratio
Company	$	112,511	$	120,510	$	736,763	$	1,075,674		n/a		15.27	%		16.36	%		10.46	%
Talbot Bank		51,637		55,910		394,788		579,781		n/a		13.08			14.16			8.91
CNB		44,869		48,594		331,089		485,042		n/a		13.55			14.68			9.25

(1)

The capital ratios as of December 31, 2015 reflect the adoption of Basel III in effect beginning January 1, 2015 while ratios for the prior period represent the previous capital rules under Basel I.

(2)

The Common Equity Tier 1 ratio is a new ratio under Basel III and represents common equity, less goodwill and intangible assets net of any deferred tax liabilities, divided by risk-weighted assets.