FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * BROWNAWELL CAROL I   2. Issuer Name and Ticker or Trading Symbol SHORE BANCSHARES INC [SHBI] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) Secretary (Last) (First) (Middle) 18 E. DOVER STREET 3. Date of Earliest Transaction (Month/Day/Year) 07/31/2006 (Street) EASTON, MD 21601 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 07/31/2006   M   100 A $ 18.47 (1) 1,727 (1) D   Common Stock 07/31/2006   M   38 A $ 13.17 (1) 1,765 (1) D

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Employee Stock Purchase Plan Option

$ 18.47 (2)

07/31/2006

M

100 (2)

01/31/2006

04/30/2008

Common Stock

100

$ 0

42 (2)

D

Stock Option

$ 13.17 (3)

07/31/2006

M

38 (3)

05/09/2003(4)

05/09/2012

Common Stock

38

$ 0

1,145 (3)

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
BROWNAWELL CAROL I 18 E. DOVER STREET EASTON, MD 21601			Secretary

Signatures

By: /s/ Carol I. Brownawell		07/31/2006
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	This amount has been adjusted to reflect the 3-for-2 stock split in the form of a stock dividend that is payable on June 5, 2006 to holders of record on May 22, 2006.
(2)	This option was previously reported as covering 95 shares at an exercise price of $27.70 per share, but was adjusted to cover 142 shares at an exercise price of $18.47 per share effective May 22, 2006 pursuant to the anti-dilution provisions of the underlying employee stock purchase plan to reflect the 3-for-2 stock split in the form of a stock dividend that was payable to holders of record as of May 22, 2006.
(3)	This option was previously reported as covering 789 shares at an exercise price of $19.75 per share, but was adjusted to cover 1,183 shares at an exercise price of $13.17 per share effective May 22, 2006 pursuant to the anti-dilution provisions of the underlying stock option plan to reflect the 3-for-2 stock split in the form of a stock dividend that was payable to holders of record as of May 22, 2006.
(4)	20% vest each May 9, beginning May 9, 2003

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