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                                                                         CONTACT
                                                           MEDIA: LILLIAN KILROY
                                                                    410-277-2833
                                            INVESTMENT COMMUNITY: ELLEN GROSSMAN
                                                                    410-277-2889

      PROVIDENT BANKSHARES CORPORATION WILL TAKE SECOND QUARTER CHARGE
                        TO ADDRESS HEALTH CARE LOANS


      BALTIMORE - (JULY 12, 2000) Provident Bankshares Corporation, (NASDAQ:
PBKS), the parent company of Provident Bank, made a $13 million addition to its
provision for loan losses in the second quarter. This addition was made to
address the anticipated write-down of a significant portion of an existing $15
million non-performing health care credit and the sale of another health care
credit not previously classified as non-performing. The Company decided to take
this action after analyzing recently received information regarding the
non-performing credit.

      Provident sold the second $15 million health care loan at the end of the
second quarter. The provision for the loss on the sale of this loan was offset
by gains from securities transactions.

      Overall, these actions should reduce expected second quarter earnings per
share by six cents.

      The Company's allowance to loans ratio will remain at a level consistent
with prior periods after the provision and anticipated charges.

      Commenting on these actions, Chairman and Chief Executive Officer Peter M.
Martin said, "We are taking these constructive steps to address recent events
that have affected these health care loans. We look forward to putting them in
context as part of our second quarter earnings announcement released on July
19th and our regularly scheduled quarterly earnings teleconference on July
20th."

      Provident Bankshares Corporation is the parent company of $5.2 billion
Provident Bank, the second largest commercial bank headquartered in Maryland.
Provident Bank serves individuals and business throughout the
Baltimore-Washington corridor and can be found on the Web at WWW.PROVBANK.COM.

STATEMENTS CONTAINED IN THIS PRESS RELEASE WHICH ARE NOT HISTORICAL FACTS ARE
FORWARD-LOOKING STATEMENTS, AS THE TERM IS DEFINED IN THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO
RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE CURRENTLY ANTICIPATED DUE TO A NUMBER OF FACTORS, WHICH INCLUDE, BUT
ARE NOT LIMITED TO, FACTORS DISCUSSED IN DOCUMENTS FILED BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION FROM TIME TO TIME.

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