SecProbe.io

September 29, 2014

Via E -mail
George S. Rapp
Chief Financial Officer
Shore Bancshares, Inc.
28969 Information Lane
Easton, Maryland 21601

Re: Shore Bancshares , Inc.
 Form 10 -K for the fiscal year ended December 31, 201 3
 Filed March 20, 2014
File No. 00 0-22345

Dear Mr. Rapp :

We have reviewed your filing an d have the following comments .  In some of our
comments, we may ask you to provide us with information so we may better  understand your
disclosure.

Please respond to this let ter within ten business days by providing the requested
information or by advising us when you will provide the requested response.   If you do not
believe our comments apply to your facts and circumst ances please tell us why in your response.

After reviewing the information you provide in response to these  comments, we may
have  additional comments.

Form 10 -K for the fiscal year ended December 31, 2013
Consolidated Financial Statements
Notes to Co nsolidated Financial Statements
Note 1. Summary of Significant Accounting Policies – Loans, page 56

1. Please provide us with and revise future filings to include the following as it relates to your
troubled debt restructurings (TDRs):

 A description of h ow you identify loans to be restructured ;

 The total amount of loans classified as TDRs at each period end separately identifying ,
by loan type,  both those on accrual and non -accrual status , as well as any associated
charge -offs during the period and any valu ation allowance at period end;

George S. Rapp
Shore Bancshares, Inc.
September 29, 201 4
Page 2

  For all TDRs that accrue interest at the time the loan is restructured, a description of how
you determine that the loan has been restructured so as to be reasonably assured of
repayment and performance according to the modi fied terms , and is supported by a
current, well -documented credit assessment of the borrower’s financial condition and
prospects for repayment under the revised terms ;

 A discussion of h ow you determine whether the borrower has demonstrated repayment
performance with modifi ed terms.  Specifically disclose  how many payments the
borrower needs to make before returning a loan to accrual status ; and

 A roll forward of your TDRs for each period presented that will allow for an
understanding of the gross movements within these balances at period end, including
asset sales such as that in the quarter ended September 30, 2013 or loans that are
otherwise removed from TDR classification.  To the extent that restructured loans are
removed from TDR classificatio n for reasons other than the aforementioned asset sale,
please provide us with an analysis that supports your determination to remove these
loans.

Note 14. Income Taxes, page 74

2. We note your disclosure on page 75 there was no valuation allowance for defe rred tax assets
at December 31, 2013 and 2012 as management believe s that it is more likely than not that
all of the deferred tax assets will be realized because they were supported by the expected
generation of a sufficient level of future taxable income from operations and tax planning
strategies.  We also note your disclosure on page 19 describing your understanding that the
determination of whether or not a valuation allowance is necessary is difficult and requires
judgment, particularly when there is s ignificant negative evidence such as recurring net
losses in prior periods and an accumulated deficit.  Please provide us with a robust analysis
detailing both the positive and negative evidence considered, and how each piece of evidence
was weighted, to o vercome the significant negative evidence, and in particular the fact that
you were in a three year cumulative loss position of approximately $33.9 million at
December 31, 2013, in determining the that there was no valuation allowance necessary as of
Decem ber 31, 2013.

3. As a related matter, please expand your disclosures in future filings, beginning with your
Form 10 -Q for the quarterly period ended September 30, 2014, to discuss any uncertainties
surrounding realization of the deferred tax asset and the m aterial assumptions underlying
your determination that the net asset will be realized. If the asset’s realization is dependent on
material improvements over present levels of consolidated pre -tax income, material changes
in the present relationship between  income reported for financial and tax purposes, any
additional planned material asset sales or other non -routine transactions, you should provide
a description of these assumed future events, quantified to the extent practicable. For
example, consider dis closing the minimum annualized rate at which taxable income must

George S. Rapp
Shore Bancshares, Inc.
September 29, 201 4
Page 3

 increase during the tax NOL carry forward periods if realization of the benefit is dependent
on taxable income higher than currently reported. Also, if significant objective negative
evidence  indicates uncertainty regarding realization of the deferred asset, identify the
countervailing positive evidence relied upon in your decision not to establish a valuation
allowance against the asset.

Exhibits 31.1 and 31.2

4. We note that paragraphs 2, 3, 4 and 5 of your certifications included as Exhibits 31.1 and
31.2 to the Fo rm 10 -K contain modifications to the exact form of the certification as set forth
in Item 601(b)(31) of Regulation S -K.  For example, the certifications include references to
the “a nnual report” rather than referring to only the “report”.  In future  filings , please ensure
that the certifications are in the exact form as set forth in Item 601(b)(31) of Regulation S -K,
except as otherwise indicated in Commission statements or staff int erpretations.

Part II. Signatures

5. In future filings , please revise the second signature block where the 10 -K is signed on behalf
of the registrant to include the Principal Executive Officer, as required by General Instruction
D(2)(a) of Form 10 -K.  We n ote that the person holding this position did sign in this
signature block as a director and signed in the first signature block for the company as
President and Chief Executive Officer.

             We urge all persons who are responsible for the accu racy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts  relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

            In responding to our comments, please provide  a written 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 a ssert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Benjamin Phippen, Staff Accountant,  at (202) 551 -3697  or me at (202)
551-3423 if you have  questions regarding comments on the financial statements and related

George S. Rapp
Shore Bancshares, Inc.
September 29, 201 4
Page 4

 matters.  Please contact Jessica Livingston, Staff Attorney at (202) 551 -3448 or Todd Schiffman,
Assistant Director at (202) 551 -3775 with any other questions.

Sincerely,

 /s/ Amit Pande

 Amit Pande
Accounting Branch Chief