SecProbe.io

UNITED STATES
SECURITIES  AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE

Mail Stop 4720         July 30, 2009   W. Moorehead Vermilye President and CEO Shore Bancshares, Inc. 18 East Dover Street Easton, MD 21601

Re: Shore Bancshares, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2008  Form 10-Q/A for Fiscal Quarter Ended March 31, 2009  File No. 000-22345

Dear Mr. Vermilye:

We have reviewed your filings and have the following comments.  Where
indicated, we think you should re vise your disclosure in resp onse to these comments.  If
you disagree, we will consider your explanation as to why our comments are inapplicable
or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for Fiscal Year Ended December 31, 2008

Item 13. Certain Relationships and Related Transactions, and Di rector Independence

Certain Relationships and Related Transact ions, page 30 of Definitive Proxy Statement
on Schedule 14A

1. We note the disclosure that loans to re lated persons were made on substantially
the same terms as those prevailing at the time for comparable transactions with

W. Moorehead Vermilye
Shore Bancshares, Inc.
July 30, 2009 Page 2
other persons.  Please confirm, and revise future filings to disclose, if accurate,
that the loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans  with persons
not related to the lender .  Refer to Instruction 4.c. to Item 404(a) of
Regulation S-K.
 Form 10-Q/A for Fiscal Quarter Ended March 31, 2009

 Interim Financial Statements

 2. Please revise to provide the disclosu res required by paragraph 26 of SFAS 154
regarding your recent corr ection of an error.  Please more clearly discuss the
nature of the error and provide a tabu lar reconciliation of the amounts involved
before and after the correction.  Clearly label the columns affected on the face of
the financial statements as Restated.
 Management’s Discussion and Analysis

 3. In your related Form 8-K filed July 7, 2009, you disclose that the error was discovered as a result of recent regulatory examination of one of your bank subsidiaries and that the error relates to the level of specific reserves necessary for
certain collateral dependent loans.  Pl ease revise to address the following:

a. Please identify the regulatory agency involved in the identification of the
error.

b. More clearly discuss the loans involved, including their type, payment status, accrual status, nature of collateral, and your methodology for determining the
related allowance.

c. Discuss any changes made to your me thodology in determining the allowance
for these loans as a result of the examination.

d. You note that the error was detected in connection one of your bank
subsidiaries.  Disclose how you determined that the nature of the error would not be applicable to the similar loans held by that bank or your other bank
subsidiaries.

e. Please tell us and cons idering revising your Form 10-Q as amended for March
31, 2009 as well as your Form 10-Q for June 30, 2009 to disclose how you considered whether you had a material weakness in your in ternal control over
financial reporting relating to the error.

f. Please tell us and cons ider revising your Form 10-Q as amended for March

W. Moorehead Vermilye
Shore Bancshares, Inc.
July 30, 2009 Page 3
31, 2009 as well as your Form 10-Q for June 30, 2009 to disclose how the certifying officers were able to concl ude that your disclosure controls and
procedures were effective in light of th e identification of the error that resulted
in the restatement of you r financial statements.
   *  *  *  *  *
As appropriate, please amend your filing and respond to these comments within
10 business days or tell us when you will provid e us with a response.  You may wish to
provide us with marked copies of the amendm ent to expedite our review.  Please furnish
a cover letter with your amendment that keys your responses to our comments and provides any requested information.  Detailed co ver letters greatly faci litate our review.
Please understand that we may have addi tional comments after reviewing your
amendment and responses to our comments.   We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:  ‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
‚ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.     You may contact Mike Volley, Staff Accountant, at (202) 551-3437 or
Kevin W. Vaughn, Accounting Branch Chief, at (202) 551-3494 if you have questions
regarding comments on the financ ial statements and related matters.  Please contact

W. Moorehead Vermilye
Shore Bancshares, Inc. July 30, 2009 Page 4   Matt McNair, Attorney-Adviser, at (202) 551- 3583 or me at (202) 551-3464 with any
other questions.
Sincerely,

Kathryn McHale Attorney-Adviser