Shore Bancshares To Reduce Quarterly Dividend To $0.06 Per Share; Retaining $3.4 Million In Additional Capital Per Year

EASTON, Md., Feb. 3 /PRNewswire-FirstCall/ -- Shore Bancshares, Inc. (Nasdaq: SHBI) announced that the Board of Directors has reduced the company's quarterly common stock dividend to $0.06 from $0.16 per share, effective for the dividend payable February 26, 2010, to stockholders of record on February 15, 2010. The Board anticipates maintaining the lower dividend rate for the foreseeable future. This action should enable the company to retain an additional $3.4 million in common equity per year.

"Our capital levels are already healthy and exceed the regulatory requirements to be considered 'well-capitalized,' but we believe that taking this step to further conserve stockholders' equity is a sound business decision in light of current market conditions. We are entering 2010 with a conservative outlook and intend to take every prudent step to ensure our balance sheet remains strong through the duration of this banking cycle," said W. Moorhead Vermilye, President and Chief Executive Officer. "When we believe the business climate has finally stabilized and is showing clear signs of improvement, we expect to resume our tradition of maintaining and growing the dividend."

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; 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".

SOURCE Shore Bancshares, Inc.

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