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PROVIDENT BANKSHARES CORPORATION TO
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REPOSITION MORTGAGE LENDING OPERATION
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For Release:Wednesday, October 18, 2000
Contact:    Vicki Cox
            Corporate Communications
            410-277-2063

BALTIMORE: (October 18, 2000) - Provident Bankshares Corporation (NASDAQ-PBKS),
the parent company of Provident bank, the second largest independent commercial
bank headquartered in Maryland, has made a business decision to reposition its
mortgage lending operation. This decision is in keeping with Provident Bank's
on-going strategy to assess the short and long term profitability of its product
lines. Provident will begin to offer mortgages to its retail customers through
an outsourced loan origination process and will no longer seek loan production
from realtors and brokers. As a result, the Bank will phase out the mortgage
lending operations of its subsidiary, Provident Mortgage Corp., by year end.
These moves allow Provident to deploy more resources to strong core business
operations.

      The decision was made after Provident determined that the mortgage
subsidiary could not produce revenue growth in line with other profitable bank
units due to the cyclical and low margin nature of the mortgage business. At
this time, the Bank is examining other options to provide its customers with a
premier mortgage program. Provident has identified a large national third party
vendor to assist it in offering mortgage origination services. Negotiations with
the provider are underway. In addition, Provident is also exploring
opportunities to sell its mortgage office and realtor referral network
operations.

      Provident Bankshares Corporation is the holding company for Provident
Bank, the second largest independent commercial bank headquartered in Maryland.
With more than $5.7 billion in assets, Provident serves individuals and business
in the dynamic Baltimore-Washington corridor through a full range of financial
services and a network of 96 offices in Maryland, Northern Virginia and southern
York County, PA. Provident Bank offers related financial services through its
wholly owned subsidiaries, including mutual funds, annuities and insurance
products through Provident Investment Center and leases through Court Square
Leasing and Provident Lease Corp. Visit Provident on the web at
www.provbank.com.
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