SCHEDULE 14-A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)

Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

PROVIDENT BANKSHARES CORPORATION
________________________________________________
(Name of Registrant as Specified In Its Charter)

John Bruno, Muldoon, Murphy & Faucette
__________________________________________
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

1) Title of each class of securities to which transaction applies:
....................................................................
2) Aggregate number of securities to which transaction applies:
....................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
....................................................................
4) Proposed maximum aggregate value of transaction:
....................................................................

5) Total fee paid:

....................................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.

1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD APRIL 17, 1996

TO THE STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Provident Bankshares Corporation ("Bankshares") will be held on Wednesday, April
17, 1996, at 10:00 a.m. local time, at the offices of Bankshares, 114 East
Lexington Street, Baltimore, Maryland 21202, for the following purposes:

(1) To elect five directors.

(2) To approve an amendment to the Provident Bankshares Corporation
Amended and Restated Stock Option Plan which authorizes awards to
non-employee directors.

(3) To approve the selection of Coopers & Lybrand L.L.P. as independent
auditors for 1996.

(4) To transact any other business that may properly come before the
meeting, and at any adjournments thereof, including whether or not
to adjourn the meeting.

Only those holders of record of Common Stock as of the close of business
on February 21, 1996, are entitled to notice of and to vote at the 1996 Annual
Meeting of Stockholders and any adjournments or postponements thereof.

Please sign, date and mail the accompanying proxy in the enclosed,
self-addressed, stamped envelope, whether or not you expect to attend the
meeting in person. You may withdraw your proxy at the meeting should you be
present and desire to vote your shares in person. Your cooperation is
respectfully requested.

By Order of the Board of Directors

/s/ CARL W. STEARN
CARL W. STEARN
Chairman of the Board

March 15, 1996

PROVIDENT BANKSHARES CORPORATION
114 EAST LEXINGTON STREET
BALTIMORE, MARYLAND 21202

PROXY STATEMENT

SOLICITATION OF PROXIES

This Proxy Statement is being mailed on or about March 15, 1996, to the
stockholders of Provident Bankshares Corporation ("Bankshares") in connection
with the solicitation by the Board of Directors of proxies to be used at the
Annual Meeting of Stockholders to be held on Wednesday, April 17, 1996, at 10:00
a.m. local time, and at any adjournments or postponements thereof, at the
offices of Bankshares, 114 East Lexington Street, Baltimore, Maryland 21202.

The Board of Directors has selected Dennis A. Starliper and Robert L.
Davis, or either of them, to act as proxies with full power of substitution. Any
stockholder giving the enclosed proxy may revoke it at any time prior to its
exercise by giving the Secretary of Bankshares a signed instrument revoking the
proxy or a signed proxy of a later date. If no instructions are specified in the
proxy, it is the intention of the persons named therein to vote FOR the election
of the nominees named herein as directors of Bankshares, FOR the approval of an
amendment to the Provident Bankshares Corporation Amended and Restated Stock
Option Plan, and FOR the approval of the selection of Coopers & Lybrand L.L.P.
as independent auditors for 1996. Execution of a proxy confers on the designated
proxyholders discretionary authority to vote the shares in accordance with their
best judgment on such other business, if any, that may properly come before the
Annual Meeting, including without limitation, a motion to adjourn or postpone
the Annual Meeting to another time and/or place for the purpose of soliciting
additional proxies.

EXPENSES OF SOLICITATION

The cost of the solicitation of proxies will be borne by Bankshares. In
addition to the use of the mails proxies may also be solicited personally, or by
telephone or telegraph, by officers, directors and regular employees of
Bankshares or of Provident Bank of Maryland (the "Bank"), none of whom will
receive additional compensation for such services. Brokers and other persons
will be reimbursed for their reasonable expenses in forwarding proxy materials
to customers who have a beneficial interest in the Common Stock of Bankshares
registered in names of nominees.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Stockholders are entitled to one vote for each share of common stock, par
value $1.00 per share (the "Common Stock") registered in their names on the
stock transfer books of Bankshares at the close of business on February 21,
1996, the record date fixed by the Board of Directors. At February 21, 1996,
Bankshares had outstanding 7,960,803 shares of Common Stock entitled to vote at
the Annual Meeting.

The persons known to Bankshares as of February 21, 1996 to be the
beneficial owners of more than five percent of the Common Stock are set forth in
the following table.

AMOUNT & NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
_____________________________________ __________________ __________________

Peter M. Martin..................... 592,139(1) 7.4%
114 East Lexington Street
Baltimore, Maryland 21202

_________________________

(1) Includes 453,785 shares held as trustee of the Bank's Retirement Savings Plan;
74,550 shares subject to a currently exercisable stock option; 5,634 shares
held in the Retirement Savings Plan for the benefit of Mr. Martin as of
December 31, 1995, the most recent date for which information is reasonably
available; and 315 shares with shared voting and dispositive powers.

Bankshares is not aware of any other person or group which beneficially
owns or controls more than five percent of its outstanding Common Stock.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Officers, employees and directors who are not also full-time employees of
the Company ("Non- Employee Directors") have been granted stock options under
the Provident Bankshares Corporation Amended and Restated Stock Option Plan. An
amendment concerning formula grants for Non-Employee Directors under the Option
Plan is being submitted to stockholders for approval. See "Proposal to Approve
Amendment to Provident Bankshares Corporation Amended and Restated Stock Option
Plan."

ELECTION OF DIRECTORS

The Board of Directors of Bankshares currently consists of 17 directors.
Mr. Ronald L. Mason, Sr. will retire as of the 1996 Annual Meeting of
Stockholders.

Bankshares' Articles of Incorporation provide that the Board of Directors
shall be divided into three classes, as nearly equal in number as possible, with
a class of approximately one-third of the directors being elected at each Annual
Meeting of Stockholders. The terms of five directors of Bankshares will expire
at the time of the Annual Meeting of Stockholders. The positions of these five
directors are to be filled at the Annual Meeting of Stockholders. Therefore,
five incumbent directors have been nominated to be elected to hold office until
the 1999 Annual Meeting of Stockholders or until their respective successors are
elected and qualified or until their earlier resignation or removal. The
nominees are Charles W. Cole, C. William Pacy, Francis G. Riggs, Carl W. Stearn,
and Thomas J.S. Waxter, Jr.

The proxies solicited hereby, unless directed to the contrary, will be
voted FOR the election as directors of all five nominees listed in the following
table. In order to be elected, a majority of the shares voted must be voted FOR
the election of each nominee. Each nominee has consented to serve as a director,
if elected. The Board of Directors has no reason to believe that any nominee
will be unwilling or unable to serve as a director but, if for any reason any
nominee is not willing or able to serve as a director, the accompanying proxy
will be voted FOR a substitute nominee chosen by the Board of Directors.

INFORMATION CONCERNING NOMINEES

The following table presents information concerning persons nominated by
the Board of Directors for election as directors of Bankshares to serve until
the 1999 Annual Meeting of Stockholders or until their successors have been
elected and qualified or until their earlier resignation or removal. Except as
indicated, the nominees have been officers of the organizations named below or
of affiliated organizations as their principal occupations for more than five
years.

AGE, PRINCIPAL OCCUPATION, POSITION WITH BANKSHARES AND THE BANK, AND
NAME OF DIRECTORS BENEFICIAL OWNERSHIP OF COMMON STOCK AT FEBRUARY 21, 1996 (PERCENTAGE OF
CLASS)(#)
______________________ __________________________________________________________________________

Charles W. Cole, Jr... Mr. Cole, age 60, has been a director of the Bank and Bankshares since
1995. Mr. Cole is Vice Chairman of the Board of Alex Brown Capital
Advisory and Trust Co., an investment advisory and trust company and
Senior Advisor to Brown Asset Management. Prior to being elected to
this position in 1994, he was the President and Chief Executive Officer
of First Maryland Bancorp and the First National Bank of Maryland.
2,205 shares (*)<F1>
C. William Pacy....... Mr. Pacy, age 67, has been a director of the Bank since 1971 and of
Bankshares since its organization. Mr. Pacy is Executive Director of the
Building Congress and Exchange of Metropolitan Baltimore, Inc., an
organization of firms involved in various aspects of commercial
construction.
3,773 shares (*)<F2><F3>
Francis G. Riggs...... Mr. Riggs, age 58, has been a director of the Bank since 1972 and of
Bankshares since its organization and is Chairman of the Compensation
Committee. Mr. Riggs is an Executive Vice President and director of
Riggs, Counselman, Michaels & Downes, Inc., an insurance brokerage
company located in Baltimore, Maryland.
33,527 shares (*)<F2><F4>
Carl W. Stearn........ Mr. Stearn, age 63, Chairman of the Board of Bankshares and Chief
Executive Officer of the Bank, has been employed with Bankshares and
the Bank since 1990. Mr. Stearn became a director of Bankshares and
the Bank in 1990.
187,463 shares (2.4%)<F5>
Thomas J.S. Waxter, Jr. Mr. Waxter, age 61, has been a director of the Bank since 1973 and of
Bankshares since its organization and is Chairman of the Nominating
Committee. Mr. Waxter is a member of the law firm of Semmes, Bowen
& Semmes.
6,254 shares (*)

INFORMATION CONCERNING CONTINUING DIRECTORS AND NAMED EXECUTIVE OFFICER

The following table presents information concerning directors of
Bankshares whose terms of office will continue after the 1996 Annual Meeting of
Stockholders and one named executive officer who is not a director of
Bankshares. As indicated, some directors will serve until the 1997 Annual
Meeting of Stockholders, and other directors will serve until the 1998 Annual
Meeting of Stockholders. Except as indicated, the directors have been officers
of the organizations named below or of affiliated organizations as their
principal occupations for more than five years.

AGE, PRINCIPAL OCCUPATION, POSITION WITH BANKSHARES AND THE BANK, AND
NAME OF DIRECTORS BENEFICIAL OWNERSHIP OF COMMON STOCK AT FEBRUARY 21, 1996 (PERCENTAGE OF
CLASS)(#)
____________________________ ________________________________________________________________________

DIRECTORS SERVING UNTIL 1998

M. Jenkins Cromwell, Jr. .. Mr. Cromwell, age 65, has been a director of the Bank since 1977 and of
Bankshares since its organization. Mr. Cromwell is a retired Vice
President and former director of T. Rowe Price Associates, Inc. He is a
principal of Maryland Capital Management, Inc., an investment advisory
firm, and also serves as Chairman of the Board of the Baltimore
Equitable Society.
2,100 shares (*)
Clivie C. Haley, Jr. ...... Mr. Haley, age 67, has been a director of the Bank since 1977 and of
Bankshares since its organization. Mr. Haley is the retired Treasurer of
C & P Telephone Companies.
7,275 shares (*)<F2><F6>
Norman J. Louden............ Mr. Louden, age 67, has been a director of the Bank since 1977 and of
Bankshares since its organization. He was employed with the Bank from
1949 until 1987, when he retired as Vice Chairman of the Board and Chief
Administrative Officer.
7,433 shares (*)<F7>
Robert B. Barnhill, Jr. .... Mr. Barnhill, age 51, has been a director of the Bank and Bankshares
since 1992. He is Chief Executive Officer and founder of TESSCO
Technologies, Incorporated, a supplier to the paging, cellular telephone
and mobile communications industries.
1,102 shares (*)<F8>
Melvin A. Bilal............. Mr. Bilal, age 53, has been a director of the Bank and Bankshares since
1992. He is President and founder of Security America Services, Inc., a
security consulting firm.
1,155 shares (*)<F8>
Sister Rosemarie Nassif..... Sister Nassif, age 54, has been a director of the Bank and Bankshares
since 1992. She is President of the College of Notre Dame of Maryland.
Prior to being elected to this position in 1992, she served as the
College's Executive Vice President. Prior to joining the College in
1990, she was Co-Vicar in the Archdiocese of St. Louis.
1,092 shares (*)<F8>

AGE, PRINCIPAL OCCUPATION, POSITION WITH BANKSHARES AND THE BANK, AND
NAME OF DIRECTORS BENEFICIAL OWNERSHIP OF COMMON STOCK AT FEBRUARY 21, 1996 (PERCENTAGE OF
CLASS)(#)
____________________________ ________________________________________________________________________

DIRECTORS SERVING UNTIL 1997

Dr. Calvin W. Burnett....... Dr. Burnett, age 63, has been a director of the Bank since 1984 and of
Bankshares since its organization. He is President of Coppin State
College, Baltimore, Maryland.
1,290 shares (*)<F2>
Pierce B. Dunn.............. Mr. Dunn, age 45, has been a director of the Bank since 1988 and of
Bankshares since its organization and is Chairman of the Audit
Committee. He is the Chairman of the Board of MIRCON, Inc., an
environmental and engineering company. Prior to joining MIRCON in 1991,
Mr. Dunn was the President and Chief Executive Officer of SILI-TEX,
Inc., Baltimore, Maryland, a processor of finishes for fabrics and
fibers.
16,574 shares(*)<F8><F9>
Mark K. Joseph.............. Mr. Joseph, age 57, has been a director of the Bank and Bankshares since
1993. Mr. Joseph is Chairman of the Board and founder of The Shelter
Group, a real estate development, property and asset management company.
3,452 shares (*)<F8>
Peter M. Martin............. Mr. Martin, age 58, President and Chief Operating Officer of Bankshares
and the Bank, has been employed with the Bank since 1990. Mr. Martin
became a director of the Bank and Bankshares in 1990.
592,139 shares (7.4%)<F10>
Sheila K. Riggs............. Mrs. Riggs, age 52, has been a director of the Bank since 1982 and of
Bankshares since its organization. Mrs. Riggs is the Chairperson of GBMC
Agency, Inc., a health services group and serves as Vice Chairperson of
the Maryland Health and Higher Education Facilities Authority, a State
bonding agency.
13,017 shares (*)<F2><F11>

NAMED EXECUTIVE OFFICER
WHO IS NOT A DIRECTOR
James R. Wallis............. Mr. Wallis, age 47, has been Executive Vice President and Chief
Financial Officer of Bankshares and Group Manager--Administration and
Chief Financial Officer of the Bank since July 10, 1995. Prior to
joining the Bank and Bankshares, he was an independent consultant. Mr.
Wallis was Executive Vice President and Chief Financial Officer of a
savings and loan association and its holding company in Atlanta, Georgia
until 1993.
27,420 shares (*)<F12>

(footnotes on the following page)

_________________________________
(#) Unless otherwise indicated by footnote, each individual has sole voting and dispositive
powers as to all shares indicated.
(*) Owns less than one percent of the outstanding Common Stock.
<FN>
<F1> Includes 525 shares subject to a stock option which becomes exercisable on April 19, 1996.
<F2> Includes 1,050 shares subject to a currently exercisable stock option.
<F3> Includes 1,480 shares held by spouse.
<F4> Includes 4,944 shares held as custodian and 2,100 shares which represent Director Riggs'
beneficial interest of shares owned by Riggs, Counselman, Michaels & Downes, Inc.
<F5> Includes 173,250 shares subject to a currently exercisable stock option, and 3,711 shares held
in the Retirement Savings Plan for the benefit of Mr. Stearn as of December 31, 1995, the
most recent date for which information is reasonably available.
<F6> Includes 3,465 shares with shared voting and dispositive powers.
<F7> Includes 1,083 shares with shared voting and dispositive powers.
<F8> Includes 525 shares subject to a currently exercisable stock option and 525 shares subject to a
stock option not currently exercisable.
<F9> Includes 10,500 shares held as trustee, 643 shares held as custodian and 52 shares held by
spouse.
<F10> Includes 453,785 shares held as trustee of the Bank's Retirement Savings Plan; 74,550 shares
subject to a currently exercisable stock option; 5,634 shares held in the Retirement
Savings Plan for the benefit of Mr. Martin as of December 31, 1995, the most recent date for
which information is reasonably available; and 315 shares with shared voting and dispositive
powers.
<F11> Includes 8,341 shares with shared voting and dispositive powers and 608 shares held as
custodian.
<F12> Includes 25,000 shares subject to options, of which 12,500 are immediately exercisable and
12,500 become exercisable on July 10, 1996.
</FN>

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of February 21, 1996, the number of
shares of Common Stock beneficially owned by all directors and executive
officers of Bankshares and its subsidiaries as a group.

AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF CLASS
OWNERSHIP
___________________ ___________

All directors and executive officers as a group (18 persons).. 962,439<F1> 12.0% <F2>

________________________
<FN>
<F1> Includes an aggregate of 453,785 shares held by an executive officer and director in a fiduciary capacity.
<F2> Shares subject to currently exercisable options which are held by directors and officers are deemed to be
outstanding for the purpose of computing the percentage of outstanding Common Stock beneficially owned by
all directors and executive officers as a group.
</FN>

COMMITTEES

Bankshares has standing Audit, Compensation and Nominating Committees of
the Board of Directors. The members of each of the named committees serve at the
discretion of the Board of Directors.

The Audit Committee (Messrs. Joseph, Barnhill, Cole, Dunn, Haley and
Waxter) reviews and reports to the Board of Directors on examinations of the
Bank and its subsidiaries by regulatory authorities, recommends independent
accountants for appointment by the Boards of Bankshares and the Bank, reviews
the scope of the work of the independent accountants and their reports, and
reviews the activities and actions of the Bank's internal auditors. The Audit
Committee met four (4) times during 1995.

The Compensation Committee (Mrs. Riggs, Sister Nassif and Messrs. Cole,
Cromwell, Pacy and Riggs), reviews and determines salaries and other benefits
for executive and senior management of Bankshares and its subsidiaries, reviews
and determines employees to whom stock options are to be granted and the terms
of such grants, and reviews the selection of officers who participate in
incentive and other compensatory plans and arrangements. The Compensation
Committee met three (3) times during 1995.

The Nominating Committee (Messrs. Waxter, Bilal, Burnett, Dunn and Louden)
nominates persons for election to the Board of Directors of Bankshares and the
Bank. The Nominating Committee will consider shareholder recommendations
submitted to it in writing in care of Bankshares. The Nominating Committee met
two (2) times during 1995.

The Board of Directors of Bankshares held twelve (12) meetings during
1995. The Board of Directors of the Bank met twelve (12) times during 1995. All
of the directors of Bankshares attended at least 75% of the total number of
Bankshares' board meetings held and committee meetings on which such director
served during 1995. Each outside director of Bankshares and the Bank receives an
annual retainer of $12,000 for service on either or both of the Boards of
Directors. Each outside director also receives a fee of $600 for attendance at
regular or special Board meetings, except that a single fee is paid if Board
meetings for Bankshares and the Bank are held on the same day. Finally, outside
directors who are members of committees of the Board receive a fee of $600 for
attendance at committee meetings while the chairpersons of such committees
receive a fee of $750. Total directors' fees paid by Bankshares and the Bank
during 1995 were $310,800.

The Bank and Bankshares have a deferred compensation plan for outside
directors. Each year, a director may elect to defer payment of all or part of
the director's fees for that year until the individual ceases to be a director.
Interest is earned on the deferred amount at the five-year U.S. Treasury
Security rate. Payment of the deferred amount may be made to the director or to
his or her beneficiary. Outside directors may also receive non-statutory stock
options under the Provident Bankshares Corporation Amended and Restated Stock
Option Plan. See "Proposal to Approve Amendment to Provident Bankshares
Corporation Amended and Restated Stock Option Plan" for a discussion of such
awards.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except as to the
extent that Bankshares specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Recommendations regarding all of the components of the compensation of the
Executive Officers of Bankshares are made by the six-member Compensation
Committee of the Board and are approved by the Board of Directors. The Board of
Directors did not reject or modify in any material way any of the
recommendations of the Compensation Committee during fiscal year 1995. Each
member of the Compensation Committee is a non-employee director. The following
report has been prepared by the Compensation Committee and addresses the
compensation policies of Bankshares for 1995 as they affected Mr. Stearn, the
Chief Executive Officer, and the two other named Executive Officers.

Executive Officer Compensation Policies and Objectives

The policies and objectives of the Compensation Committee are designed to
assist Bankshares and its subsidiaries in attracting and retaining qualified
executives, to recognize individual contributions toward the achievement of
short-term and long-term performance goals, and to closely align the financial
interests of the senior managers of Bankshares and its subsidiaries with those
of its shareholders. In furtherance of these objectives, Bankshares maintains a
compensation program for Executive Officers which consists of both cash and
equity-based compensation. From time to time the Compensation Committee retains
independent compensation consultants to work with it on executive compensation
matters. Such consultants report directly to the Compensation Committee. The
Compensation Committee also has access to competitive data regarding executive
compensation levels and practices.

Executive Compensation Programs and Relationship to Performance

The annual compensation of the Executive Officers of Bankshares consists
of a base salary and an annual bonus determined under the terms of the Provident
Bankshares Corporation Executive Incentive Plan ("EIP") and the Supplemental
Executive Incentive Plan ("SEIP"). The Compensation Committee has discretion to
establish, relative to performance and peer group comparisons, the base salaries
of the executive officers. This is done once a year. The Compensation Committee
itself determines the level of annual salary for the Chief Executive Officer,
generally based upon a review of the performance of the Chief Executive Officer
during the prior year and competitive data for that position. The Chief
Executive Officer recommends to the Compensation Committee a salary level for
each of the other named Executive Officers based upon a performance review of
each executive. The Compensation Committee is then responsible for approving or
modifying the recommendations it receives. The Compensation Committee also
approves the participation of key executives in the EIP and the SEIP and is
responsible for the grant of options under the Provident Bankshares Corporation
Amended and Restated Stock Option Plan ("Stock Option Plan").

Executive Incentive Plan

The Executive Officers all participate in the Executive Incentive Plan
("EIP"). Under the EIP, for purposes of establishing incentive awards, minimum
and maximum after-tax net income targets for the upcoming year are established
based on budget estimates of the after-tax net income of Bankshares and all of
its subsidiaries. A minimum and maximum percentage of base salary to be received
as incentive compensation is established by the Compensation Committee for the
Executive Officers as a group. If actual after-tax net income reaches or exceeds
the maximum targeted net income, the Executive Officers will receive the maximum
designated percentage of base salary as incentive compensation. If the actual
after-tax net income is less than the maximum, but equal to or greater than the
minimum targeted after-tax net income, the maximum percentage of base salary
which may be received as incentive compensation is reduced proportionately. In
the event that actual after-tax net income is less than the minimum targeted
after-tax net income, no incentive compensation is payable. The Compensation
Committee reviews the terms of the EIP each year to assure that, in operation,
it is furthering the Committee's compensation policy objectives. Incentive
compensation earned under the EIP is paid to the Executive Officers within one
month of the end of the fiscal year of the Bank. Payment of all or any part of
the incentive compensation earned under the Executive Incentive Plan may be
deferred.

Supplemental Executive Incentive Plan

All Executive Officers participate in the Supplemental Executive Incentive
Plan. Under the SEIP, the executives may be awarded up to ten percent of base
salary for performance against the criteria established for this plan. The
incentive is discretionary, may be awarded on an individual basis as determined
by the Compensation Committee and is paid within one month after the end of the
corporation's fiscal year. The intent of the Supplemental Executive Incentive
Plan is to enable the corporation to provide incentive to the executives in key
areas important to the long term progress of the company not addressed by the
EIP, namely: management of the company with emphasis on development and
retention of key personnel; implementation of new initiatives; financial
progress in addition to net earnings; and risk management. All or any part of
the incentive compensation earned under the Supplemental Executive Incentive
Plan may be deferred.

Stock Option Plan

Long-term incentives for the Executive Officers are provided through the
Stock Option Plan. The Stock Option Plan authorizes the issuance of
non-qualified stock options to key officers and certain employees of Bankshares
and its subsidiaries. Subject to the general limits prescribed by the Stock
Option Plan, the Compensation Committee has the authority to determine the
individuals to whom stock options are awarded, the term for which option grants
shall be made, the terms of the options and the number of shares subject to each
option. Although the Compensation Committee's decisions are discretionary and no
specific formula is used in the decision making, the number of options granted
is based generally upon position level and performance. Through the award of
stock options, the objective of aligning the long-range interests of the
Executive Officers with those of the stockholders is met by providing the
Executive Officers with the opportunity to build a meaningful ownership stake in
Bankshares.

Other Compensation Plans

The Executive Officers participate in the corporation's health and welfare
and qualified retirement plans on the same terms as non-executive employees who
meet the applicable eligibility criteria, subject to any legal limitations on
the amounts that may be contributed or the benefits that may be payable under
these plans.

In addition to the qualified retirement plans, the Bank maintains a
Supplemental Executive Retirement Income Plan ("Supplemental Plan") in which the
Chairman and President participate. The Supplemental Plan provides additional
benefits to these Executive Officers upon retirement equal to 35% of final pay,
reduced by Social Security and the age-65 benefit accrued under the Bank's
Pension Plan and then proportionately reduced for less than 25 years of service.
In Mr. Stearn's case, any benefits paid before the year 2000 will equal 70% of
final pay, reduced as noted above. Thereafter, any benefits paid will be 35% of
final pay, also reduced as noted above. The Supplemental Plan is unfunded, so
that amounts payable represent unsecured liabilities of the Bank, subject to the
claims of secured creditors. The Bank reduced these unfunded Supplemental
Benefits in 1993 from 70% to 35% of final pay. The amount of this benefit
reduction has been replaced by a split-dollar insurance arrangement. The Bank
has purchased four insurance policies on the lives of the Chairman and
President. Two policies are split-dollar arrangements, subject to collateral
assignment agreements. The other two are corporate-owned life insurance
policies.

Chief Executive Officer Compensation

The Compensation Committee set Mr. Stearn's base compensation for the
fiscal year 1995 at $355,708, which represents a 12.7% increase over his 1994
base salary. In establishing his base salary, the Compensation Committee
reviewed Mr. Stearn's performance for the prior year and also considered the
compensation of chief executive officers of banking organizations in the
Baltimore metropolitan area. The increase for 1995 reflects the Compensation
Committee's recognition of Mr. Stearn's contribution to the successful
implementation of measures to improve the efficiency of the Bank, as
demonstrated by the earnings growth of Bankshares and increase in the return on
and value of shareholder equity. The minimum bonus target for 1995 was exceeded,
resulting in a formula driven proportional payout of $77,589. Based on his
performance against the minimum criteria specified in the SEIP, Mr. Stearn was
awarded $33,300 for a total of $110,889 in bonus compensation.

Compensation of Other Executive Officers

Recommendations regarding the base salary of the Executive Officers, other
than the Chief Executive Officer, are made to the Compensation Committee by the
Chief Executive Officer and are either approved or modified by the Compensation
Committee. The recommendation as to the salaries of the Executive Officers is
based upon a review of the performance of these officers during the prior year
by the Chief Executive Officer. The Compensation Committee did not reject or
modify in any material way any of the recommendations of the Chief Executive
Officer concerning the base salary of the other Executive Officers for 1995.
Executive Officers as a group participate in the EIP, and awards under this plan
are based upon the formula contained in the plan. Executive Officers as a group
also participate in the SEIP and awards are based upon the Compensation
Committee's discretion relating to the evaluation of their individual management
performance against the key criteria as defined in the plan.

SUBMITTED BY THE COMPENSATION COMMITTEE OF THE PROVIDENT BANKSHARES
CORPORATION BOARD OF DIRECTORS.

Shelia K. Riggs (Chairperson)
Charles W. Cole
M. Jenkins Cromwell
Sister Rosemarie Nassif
C. William Pacy
Francis G. Riggs

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth the compensation paid or allocated for
services rendered to Bankshares and the Bank in all capacities during the years
ended December 31, 1993, 1994 and 1995 (i) to the Chief Executive Officer of
Bankshares and (ii) to the two members of executive management whose 1995
compensation exceeded $100,000 (collectively hereinafter referred to as the
named executive officers).

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
__________________________________ ____________
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
SALARY BONUS COMPENSATION OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) SARS(#) ($)
___________________________ ______ ________ ________ __________ ___________ ____________

Carl W. Stearn......... 1995 $355,708 $110,889 $4,949<F1> -- $10,993<F2>
Chairman of the Board and 1994 315,751 74,889 5,262<F1> -- 11,319
Chief Executive Officer 1993 302,618 72,000 2,220<F1> -- 34,307

Peter M. Martin........ 1995 $297,167 $92,907 $4,096<F1> -- $9,015<F2>
President and Chief 1994 260,750 62,058 3,970<F1> -- 9,414
Operating Officer 1993 240,500 58,800 1,508<F1> -- 30,459

James R. Wallis<F5>.... 1995 $77,026 $16,776 $16,882<F3> 25,000<F4> --
Executive Vice President
and Chief Financial Officer

______________________________________
<FN>
<F1>Represents grossed-up reimbursement for the tax effect of reportable
incremental imputed income for the split dollar insurance agreements.
<F2>The amounts shown in this column for the last fiscal year are derived from
the following figures: (i) Mr. Stearn: $2,439 allocated under the Bank's
401(k) plan, and $8,554 in economic value of Bank-paid split-dollar life
insurance premiums; and (ii) Mr. Martin: $2,330 allocated under the Bank's
401(k) plan, and $6,685 in economic value of Bank-paid split-dollar life
insurance premiums.
<F3>Represents gross-up for the tax effect of reportable income for reimbursement
of relocation expenses.
<F4>Includes 12,500 shares subject to options which are immediately exercisable
and 12,500 shares subject to options which become exercisable on July 10,
1996. See "Stock Option Grants".
<F5>Mr. Wallis became Executive Vice President on July 10, 1995.
</FN>

CHANGE IN CONTROL AGREEMENTS

The Company and the Bank have entered into three-year Change in Control
Agreements with Messrs. Stearn, Martin and Wallis (the "Executives") as well as
other officers of the Company and the Bank. Each Change in Control Agreement
with the Executives (the "Agreement") provides for a 36-month term. Each
Agreement provides that commencing on the date of the Agreement's execution, the
term of the Agreement will be extended for one day each day until such time as
the board of directors or Executive elects not to extend the term of the
Agreement by giving written notice to the other party.

Each Agreement provides that at any time following a "change in control"
of the Company or the Bank, as defined in the Change in Control Agreements, if
the Company or the Bank terminates the employee's employment for any reason
other than cause, or if the employee terminates his employment following
demotion, loss of title, office or significant authority, a reduction in annual
compensation or benefits, or relocation of the principal place of employment by
more than 20 miles immediately prior to a change in control, the employee or, in
the event of death, the employee's beneficiary would be entitled to receive a
payment equal to 2.99 times the Executive's average annual taxable compensation
as reported on Form W-2 with the Internal Revenue Service for the five preceding
taxable years or such lesser number of years in the event that the Executive has
been employed by the Company or the Bank for less than five years. The Company
and the Bank will also continue the Executive's life, medical, and disability
coverage. Such coverage shall cease upon the expiration of 36 full calendar
months following the date of termination or the date the Executive secures
comparable employment by an employer other than the Company or the Bank, which
ever comes first. If the Executive voluntarily resigns from the Company or the
Bank within one year following a change in control, but prior to an event of
termination described above, the Executive would be entitled to receive a payout
equal to six (6) times his then current monthly taxable compensation. Payments
to the Executive under the Bank's change in control agreements will be
guaranteed by the Company in the event that payments or benefits are not paid by
the Bank.

Payments and benefits under the Change in Control Agreements may
constitute an excess parachute payment under Section 280G of the Internal
Revenue Code, resulting in the imposition of an excise tax on the recipient and
denial of the deduction for such excess amount to the Company and the Bank.

STOCK OPTION GRANTS

As discussed above and as an inducement to attract and retain qualified
managers and employees, Bankshares maintains the Stock Option Plan. The
following table lists all grants of options under the Stock Option Plan to the
Named Executive Officers for 1995 and contains certain information about
potential value of those options based upon certain assumptions as to the
appreciation of the Company's stock over the life of the option. See "Proposal
to Approve an Amendment to Provident Bankshares Corporation Amended and Restated
Stock Option Plan. During 1995, 25,000 shares subject to options were granted to
Mr. James R. Wallis.

OPTIONS GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS PRICE APPRECIATION FOR OPTIONS<F1>
___________________________________________________________ ____________________________________

NUMBER OF % OF TOTAL
SECURITIES OPTION/SARS EXERCISE
UNDERLYING GRANTED TO OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED <F2> FISCAL YEAR ($/SH)<F3> DATE 5% 10%
_______________ ____________ ____________ ___________ __________ _______ _________

James R. WalliS 25,000 100% $28.00 07/10/2005 441,000 1,113,000

______________________________
<FN>
<F1> The fair market value on the date of grant was $28.00. The amounts represent certain assumed
rates of appreciation. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the future performance of the Common Stock and overall stock market
conditions. There can be no assurance that the amounts reflected in this table will be
realized.
<F2> Includes 12,500 shares subject to options which are immediately exercisable and 12,500 shares
subject to options which become exercisable on July 10, 1996. In addition, vesting of
non-statutory stock options may be accelerated by the Committee that administers the plan
including in connection with a change in control.
<F3> The purchase price may be made in whole or in part through the surrender of shares of Common
Stock at a fair market value.
</FN>

STOCK OPTION EXERCISES AND HOLDINGS

There were no stock options exercised by the Named Executive Officers
during 1995. The following table reflects the number of shares covered by all
remaining unexercised stock options as of December 31, 1995. Also reported are
the values for "in-the-money" options which represent the difference between the
exercise price of any such remaining unexercised options and the year-end market
price of the Common Stock.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
OPTIONS/SARS AT FY-END (#) AT FY-END ($)<F1>
_________________________ ____________________________

NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
_____________________ ___________ _____________ ___________ ______________

Carl W. Stearn...... 173,250<F2> 0 $4,319,123<F3> 0
Chairman of the Board
and Chief Executive
Officer

Peter M. Martin..... 74,550<F2> 0 1,794,377<F4> 0
President and Chief
Operating Officer

James R. Wallis..... 12,500 12,500 18,750<F5> $18,750
Executive Vice President
and Chief Financial
Officer

_______________________________________
<FN>
<F1> The closing price of the Common Stock on December 31, 1995 was $29.50.
<F2> Messrs. Stearn and Martin received 8,250 and 3,550 additional options,
respectively, pursuant to an anti-dilution provision in Bankshares' option plan
following the declaration of a 5% stock dividend by Bankshares. Additionally,
the exercise prices of the options were adjusted in accordance with the
anti-dilution provision.
<F3> The weighted average option exercise price is $4.57.
<F4> The weighted average option exercise price is $5.43.
<F5> The option exercise price is $28.00.
</FN>

PENSION PLANS

The following table sets forth the estimated annual pension benefits
payable to a participant at normal retirement age (age 65) under the Bank's
Pension Plan and its Supplemental Plan, based on both the remuneration that is
covered under such plans and years of service with Bankshares and its
subsidiaries.

YEARS OF SERVICE
____________________________________________________________
REMUNERATION 15 20 25 30 35
_______________ _________ _________ __________ ___________ __________

125,000 26,250 35,000 43,750 43,750 43,750
150,000 31,500 42,000 52,500 52,500 52,500
175,000 36,750 49,000 61,250 61,250 61,250
200,000 42,000 56,000 70,000 70,000 70,000
225,000 47,250 63,000 78,750 78,750 78,750
250,000 52,500 70,000 87,500 87,500 87,500
275,000 57,750 77,000 96,250 96,250 96,250
300,000 63,000 84,000 105,000 105,000 105,000
325,000 68,250 91,000 113,750 113,750 113,750
350,000 73,500 98,000 122,500 122,500 122,500
375,000 78,750 105,000 131,250 131,250 131,250
400,000 84,000 112,000 140,000 140,000 140,000
425,000 89,250 119,000 148,750 148,750 148,750

Bankshares maintains the Supplemental Executive Retirement Income Plan for
certain executive officers which will pay 50% of the difference between 70% of
final pay and the amounts paid by the pension plan and Social Security benefits,
except in the case of Mr. Stearn where Bankshares will pay 100% of the
difference prior to the year 2000. Compensation used in calculating the annual
normal retirement benefit amounts reflected in the Pension Plan Table is the
executive's highest rate of base annual salary, reported in the third column of
the Summary Compensation Table, and does not include bonuses or other amounts
reported in any of the remaining columns of the Summary Compensation Table.

The following table sets forth the respective years of service credited
for Pension Plan purposes as of December 31, 1995, and the estimated years of
service at the respective normal retirement dates for each of the named
executive officers.

YEARS OF YEARS OF SERVICE
NAME SERVICE AT NORMAL RETIREMENT
AT 12/31/95
_______________________ ___________ ____________________

Carl W. Stearn......... 5.9 9.0
Peter M. Martin........ 5.8 13.4
James R. Wallis........ 0.5 17.5

The Pension Plan Table reflects the annual benefit payable at the
executive's 65th birthday in the form of an annuity for the executive's life
with a 15-year guarantee in favor of the executive's spouse. Under this form,
should the executive die within 15 years after the benefits start, the
executive's surviving spouse, if any, will continue to receive the same pension
benefits until the end of that 15-year period.

The Pension Plan Table reflects the maximum benefit payable under the
Provident Bank of Maryland Pension Plan, a tax-qualified funded plan and certain
Supplemental Retirement Income Agreements providing 50% of the excess (unfunded
benefits). The benefits reflected in the Table are offset or reduced by 100% of
the executive's estimated primary Social Security benefit.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Francis G. Riggs is a director of Bankshares and the Bank, and a member of
the Compensation Committee. Mr. Riggs is Executive Vice-President and a director
of Riggs, Counselman, Michaels & Downes, Inc. From January l to December 31,
1995, the Bank paid Riggs, Counselman, Michaels & Downes, Inc. $267,332 for
premiums related to insurance services.

PERFORMANCE GRAPH

The SEC requires that Bankshares include in this proxy statement a
line-graph comparing cumulative stockholder returns as of December 31 for each
of the last five years among the Common Stock, a broad market index and either a
nationally-recognized industry standard or an index of peer companies selected
by Bankshares, assuming in each case both an initial $100 investment and
reinvestment of dividends. Consistent with past practice, the Board of Directors
has selected the Nasdaq Market Index as the relevant broad market index because
prices for the Common Stock are quoted on Nasdaq National Market. Additionally,
the Board of Directors has selected the Middle Atlantic Banks Index as the
relevant industry standard because such index consists of financial institutions
which are headquartered in the mid-Atlantic region and the Board believes that
such institutions generally possess assets, liabilities and operations more
similar to those of Bankshares and its subsidiaries than other
publicly-available indices.

COMPARATIVE FIVE-YEAR TOTAL RETURNS
PROVIDENT BANKSHARES CORPORATION, NASDAQ MARKET INDEX AND MG GROUP INDEX

1990 1991 1992 1993 1994 1995
______ ______ ______ ______ ______ ______

PROVIDENT BANKSHARES CORPORATION 100.00 172.77 372.73 512.66 589.65 817.43
MIDDLE ATLANTIC BANK INDEX 100.00 133.08 166.65 207.03 196.56 298.47
NASDAQ MARKET INDEX 100.00 128.38 129.64 155.50 163.26 211.77

CERTAIN TRANSACTIONS WITH MANAGEMENT

Periodically, the Bank may engage in lending transactions in the ordinary
course of business with its officers and directors, as well as entities
associated with such persons. Such transactions are made in the ordinary course
of business and on substantially the same terms, including interest rate and
collateral, as those prevailing at the time for comparable transactions with
other persons. Loans to such persons do not involve more than the normal risk of
collectability or present other unfavorable features.

Thomas J. S. Waxter, Jr., a director of Bankshares and the Bank, is a
member of the law firm of Semmes, Bowen & Semmes, which performs legal services
for Bankshares and its subsidiaries.

Management of the Bank believes that the terms of these transactions were
at least as favorable to the Bank as could have been obtained elsewhere. (See
also the section entitled "Compensation Committee Interlocks and Insider
Participation," above).

PROPOSAL TO APPROVE AN AMENDMENT TO
PROVIDENT BANKSHARES CORPORATION AMENDED
AND RESTATED STOCK OPTION PLAN

On March 6, 1996, the Board of Directors adopted an amendment (the
"Amendment") to the Provident Bankshares Corporation Amended and Restated Stock
Option Plan (the "Option Plan") to authorize the granting of non-qualified stock
options to Non-Employee Directors. The Amendment which is being voted upon is
attached to this Proxy Statement as Exhibit A. The following is a summary of the
material features of the Option Plan.

The Option Plan provides for the granting of non-qualified stock options
to certain key employees and officers of Bankshares and the Bank, as designated
by the Board of Directors. The Plan also provides that each Non-Employee
Director will receive a non-qualified stock option to purchase 1,000 shares of
Bankshares Common Stock. Approximately 68 persons currently hold stock options
granted under the Option Plan. The Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee"). The Committee consists of
non-employee members of the Board of Directors none of whom are eligible to
receive a discretionary award of options under the Option Plan. The Committee
selects the officers and employees to whom options are to be granted and the
number of shares to be granted. The number of shares issuable under the Option
Plan automatically increases annually so that the number of shares issuable
under the Option Plan equals 17% of the then outstanding shares of the Common
Stock of Bankshares. As of the Record Date, 1,302,000 shares are authorized for
issuance under the Option Plan. No Optionee is permitted to receive options
under the Option Plan for more than 350,000 shares of Common Stock in any
calendar year.

Except for grants which will be made pursuant to the Amendment, as noted
below, or as otherwise determined by the Committee, options under the Option
Plan are 50% exercisable immediately following the date of grant and 50%
exercisable one year from the date of grant, but in no event shall an option be
exercisable in whole or in part more than ten years from the date of grant. The
Committee may, in its sole discretion, accelerate the time at which any stock
option may be exercised in whole or in part. Options granted under the Option
Plan will have an exercise price not less than 100% of the fair market value of
the Common Stock on the date the option is granted. In the event an Optionee
ceases to be a director, officer or employee for any reason whatsoever other
than death, disability or retirement, all of the Optionee's options that were
fully vested and exercisable at time of termination of service will be
exercisable for 30 days following termination of service. All options which were
not fully vested and exercisable at the time of termination of service will be
terminated immediately. In the event an Optionee ceases to be a director due to
death or disability, all of

the Optionee's options shall immediately become fully vested andexercisable
for 60 days following termination of service.

In the event of any change in the outstanding shares and Common Stock of
Bankshares by reason of a stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, the Committee, in its discretion, may adjust
previously granted awards to prevent dilution or enlargement of rights of the
Optionee. Such adjustments may include: (i) adjustments in the aggregate number
or kind of shares of Common Stock which may be awarded under the Plan; (ii)
adjustments in the aggregate number or kind of shares of Common Stock covered by
awards already made under the Plan; or (iii) adjustments in the purchase price
of outstanding Stock Options.

All options granted under the Option Plan become immediately exercisable
upon a change in control, which is defined in the Option Plan generally to occur
when a person or group of persons acting in concert acquires beneficial
ownership of 10% or more of any class of equity security, such as the Common
Stock, of the Company or the Bank or in the event of a tender offer or exchange
offer, merger or other form of business combination, sale of assets or contested
election of directors which results in a change in the majority of the Board of
Directors.

Shares may be purchased in whole or in part at any time after an option
becomes exercisable, provided that the Committee, in its sole discretion, may
accelerate the time at which any option may be exercised in whole or in part.
The purchase price of options granted under the Option Plan for the Common Stock
may be paid in whole or in part through the surrender of previously held shares
of Common Stock at the fair market value thereof.

An award of options under the Option Plan shall not be transferable by the
Optionee other than by will or the laws of descent and distribution and may only
be exercised during the Optionee's lifetime by the Optionee, or by a guardian or
legal representative. With the consent of the Committee, an employee may
designate a person as beneficiary of any stock option award, in the event of the
death of the employee.

An Optionee shall have no rights as a stockholder with respect to any
shares covered by an option until the date of issuance of a stock certificate
for such shares. Nothing in the Option Plan or in any award of options granted
confers on any person any right to continue in the employ of the Company or its
affiliates, or to continue to perform services for the Company or its
affiliates, or interferes in any way with the right of the Company or its
affiliates to terminate such person's services as an officer or other employee
at any time.

The Board of Directors may amend the Option Plan in any respect; provided,
however, that in order for the Option Plan to continue to qualify for exemptive
treatment under 17 C.F.R. 240.16b-3 of the Exchange Act, stockholder approval
shall be required for any amendment which (i) except in limited circumstances,
increases the maximum number of shares for which options may be granted under
the Option Plan, (ii) reduces the exercise price at which stock options may be
granted, (iii) extends the period during which options may be granted or
exercised beyond the times originally prescribed, or (iv) changes the persons
eligible to participate in the Option Plan.

The Amendment to be voted on by stockholders will provide, subject to
stockholder approval, that each current Non-Employee Director will receive a
formula grant consisting of a non-qualified stock option to purchase 2,000
shares ("Formula Grant") of Bankshares Common Stock unless such non-employee
director has less than five years remaining until retirement at the effective
date of the Amendment. Any Non-Employee Director with less than five years
remaining until retirement at the effective date of the Amendment will receive a
Formula Grant consisting of a non-qualified stock option to purchase a number of
shares equal to the product of 400 multiplied by each year of service remaining
until the Non-Employee Director's retirement. Each subsequent Non-Employee
Director will receive a Formula Grant as of the date such subsequently elected
or appointed Non-Employee Director is qualified and first begins to serve as a
Non-Employee Director. Formula Grants are subject to certain vesting schedules
as described below.

The Non-employee Director Formula Grants, other than grants to
Non-Employee Directors with less than five years remaining until retirement,
will become exercisable in installments as follows: thirty percent (30%) of the
grant shall become exercisable three years from the date of grant; an additional
twenty percent (20%) of the grant shall become exercisable four years from the
date of grant; and the remaining fifty percent (50%) of the grant shall become
exercisable five years from the date of grant. Options granted to Non-Employee
Directors with less than five years remaining until retirement at the effective
date of the amendment will become one hundred percent (100%) vested six months
prior to the Non-Employee Directors' retirement.

The purpose of requesting stockholder approval is to meet the requirements
of the Nasdaq National Market and to enable the recipient of options to qualify
for certain exemptive treatment from the short-swing profit recapture provisions
of Section 16(b) of the Securities Exchange Act of 1934. THE AFFIRMATIVE VOTE OF
THE HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK REPRESENTED IN PERSON OR
BY PROXY AND ENTITLED TO VOTE AT THE MEETING IS REQUIRED FOR RATIFICATION. In
the event stockholder ratification is not received, the Option Plan will remain
in effect, but without the above described Amendment which required shareholder
approval.

Unless marked to the contrary, the shares represented by the enclosed
Proxy will be voted FOR the approval of the Amendment to the Provident
Bankshares Corporation Amended and Restated Stock
Option Plan.

The Board of Directors recommends a vote FOR the approval of the
amendments to the Provident Bankshares Corporation Amended and Restated Stock
Option Plan. Proxies will be voted FOR the Proposal unless otherwise instructed
by stockholders.

NEW PLAN BENEFITS

The following table provides certain information with respect to awards
which will be granted, assuming stockholder approval of the Amendment is
obtained, under the Amendment to the Option Plan. No other awards granted under
the Option Plan are included in this table.

NEW PLAN BENEFITS

STOCK OPTION AWARDS
_________________________________
NUMBER
NAME AND POSITION DOLLAR VALUE <F1> OF UNITS
________________ ______________

All current directors of the Company
and Bank (who are not executive
officers) as a group (15 persons)...... -- 30,000

_______________________________
<FN>
<F1> The "dollar value" for options to be granted pursuant to the Option Plan on
the date of grant will be zero, as the exercise price for such options will
be the fair market value on the date of grant which is intended to be the
date stockholder approval is obtained.
</FN>

PROPOSAL TO APPROVE THE SELECTION OF
INDEPENDENT AUDITORS FOR THE YEAR 1996

The Board of Directors of Bankshares has appointed the firm of Coopers &
Lybrand L.L.P., certified public accountants, as independent auditors for
Bankshares for the year 1996, subject to the approval of the stockholders.
Coopers & Lybrand L.L.P., which has served as independent auditors for
Bankshares and the Bank since 1990, has advised Bankshares that neither the firm
nor any of its partners or associates has any direct financial interest in or
any connection with Bankshares or any of its subsidiaries other than as
independent auditors. Representatives of Coopers & Lybrand L.L.P. are expected
to be present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so and to respond to appropriate questions.

The Board of Directors seeks stockholder approval of its selection of
Coopers & Lybrand L.L.P. as its independent auditors to Bankshares for the year
1996.

The Board of Directors recommends a vote FOR the Proposal. Proxies will be
voted FOR the Proposal unless otherwise instructed by the Stockholders.

OTHER BUSINESS

The Board of Directors is not aware of any matters to be presented for
action at the meeting, other than the matters set forth herein. If any other
business should properly come before the meeting, the persons named in the
accompanying proxy will vote such proxy in accordance with their best judgment
with respect thereto.

VOTING PROCEDURES

Each proposal submitted to Bankshares' stockholders for a vote is deemed
approved if a majority of the shares of Common Stock of Bankshares present in
person or by proxy at a meeting at which a quorum is present votes in favor of
the proposal. The presence in person or by proxy of stockholders entitled to
cast a majority of all the votes entitled to be cast at the meeting constitutes
a quorum. A stockholder is entitled to one vote for each share owned.

Stockholder votes are tabulated manually by the Corporation. Proxies
received by Bankshares, if such proxy is properly executed and delivered, will
be voted in accordance with the voting specifications made on such proxy.
Proxies received by Bankshares on which no voting specification has been made by
the stockholder will be voted for all items discussed in the Proxy Statement, in
the manner slated on the proxy card. Stockholders who execute and deliver
proxies retain the right to revoke them by notice in writing delivered to
Bankshares' Secretary at any time before such proxies are voted. Under
applicable Maryland corporate law and the Articles of Incorporation and By-Laws
of Bankshares, proxies received by Bankshares specifying an abstention as to any
proposal will cause the shares so represented to be counted toward a quorum, but
not counted as favorable votes and, therefore, have the same effect as a vote
against the proposal. To the extent holders or brokers having the right to vote
shares do not attend the meeting or return a proxy, such shares will not count
toward a quorum and, if a quorum is otherwise achieved, will have no effect on
the vote of the proposals considered at the meeting.

STOCKHOLDER PROPOSALS -- 1997 ANNUAL MEETING

Any proposal of a stockholder intended to be presented at the 1997 Annual
Meeting of Bankshares must be received by Bankshares at 114 East Lexington
Street, Baltimore, Maryland 21202 prior to November 15, 1996, to be eligible for
inclusion in the proxy statement and form of proxy. In order to curtail
controversy as to compliance with this requirement, stockholders are urged to
submit proposals to the Secretary of Bankshares by Certified Mail-Return Receipt
Requested.

ANNUAL REPORTS

BANKSHARES' 1995 ANNUAL REPORT TO STOCKHOLDERS AND ANNUAL REPORT ON FORM
10-K ACCOMPANY THIS PROXY STATEMENT. COPIES OF THE REPORTS MAY BE OBTAINED UPON
WRITTEN REQUEST TO THE SECRETARY OF BANKSHARES, 114 EAST LEXINGTON STREET,
BALTIMORE, MARYLAND 21202, AND WILL BE AVAILABLE AT THE ANNUAL MEETING.

By Order of the Board of Directors

/S/ CARL W. STEARN
CARL W. STEARN
Chairman of the Board

Baltimore, Maryland
March 15, 1996

EXHIBIT A

AMENDMENTS TO PROVIDENT BANKSHARES CORPORATION
AMENDED AND RESTATED STOCK OPTION PLAN

6. Awards to Non-Employee Directors.
________________________________

(b) Subsequent Formula Grants. (i) Commencing on the effective date
__________________________
of this section, each current Non-Employee Director shall receive a Formula
Grant consisting of a non-qualified stock option to purchase 2,000 shares of
Corporation Common Stock, except as set forth under Section 6(b)(iv). Each
option granted under this Section 6(b)(i) will become exercisable in
installments as follows: thirty percent (30%) of the grant shall become
exercisable three years from the date of grant; an additional twenty percent
(20%) of the grant shall become exercisable four years from the date of grant;
and the remaining fifty percent (50%) of the grant shall become exercisable five
years from the date of grant.

(ii) The option price for each Formula Grant shall be the Fair
Market Value (as defined in Paragraph 7(g) hereof) of the shares of Common stock
of the Corporation on the date of grant of the option. The Formula Grant shall
expire not more than ten (10) years from the date such option is granted,
consistent with Paragraph 5(d) hereof. Each subsequent Non-Employee Director
shall also receive a Formula Grant as of the date such subsequently elected or
appointed Non-Employee Director is qualified and first begins to serve as a Non-
Employee Director. The Formula Grant shall become fully vested and will be
immediately exercisable at any time immediately after a Change in Control, as
defined in Paragraph 7(a) hereof.

(iii) In the event a Non-Employee Director ceases to be a director
due to death, Disability, Retirement or any other reason whatsoever, the Formula
Grant shall be governed by Paragraph 5(f)(i), (ii), and (iii) hereof.

(iv) Notwithstanding Paragraph (iii) above, commencing on the
effective date of this section, each Non-Employee Director with less than five
years remaining until retirement at the effective date of this section shall
receive a Formula Grant consisting of a non-qualified stock option to purchase a
number of shares equal to the product of 400 multiplied by each year of service
remaining until the Non-Employee Director's retirement. Each option granted
under this Section 6(b)(iv) shall become one hundred percent (100%) vested six
months prior to the Non-Employee Directors's retirement.

____
| | PLEASE MARK VOTES REVOCABLE PROXY
| X | AS IN THIS EXAMPLE PROVIDENT BANKSHARES CORPORATION
|____|

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF PROVIDENT BANKSHARES CORPORATION
ANNUAL MEETING OF STOCKHOLDERS -- APRIL 17, 1996
The undersigned hereby appoints Dennis A. Starliper and Robert L. Davis or
either of them acting individually and with full power of substitution to act,
as attorneys and proxies, for the undersigned, to vote all shares of Common
Stock of Provident Bankshares Corporation ("Bankshares") which the undersigned
is entitled to vote at the Annual Meeting of Stockholders to be held at the
offices of Bankshares, 114 East Lexington Street, Baltimore, Maryland 21202 at
10:00 a.m. and at any and all adjournments thereof as follows:

1. The election as directors of all nominees listed below (except as marked to
the contrary):
_ _ _
|_| For |_| Withold |_| For All Except

CHARLES W. COLE, JR.; C. WILLIAM PACY; FRANCIS G. RIGGS; CARL W. STEARN; AND
THOMAS J.S. WAXTER, JR.

INSTRUCTION: To withhold your vote for any nominee(s), mark "For All Except"
and write that nominee's name on the line below

________________________________________________________________________________

2. The amendment of the Bankshares' Stock Option Plan
_ _ _
|_| For |_| Against |_| Abstain

3. The approval of Coopers & Lybrand as independent Auditors.
_ _ _
|_| For |_| Against |_| Abstain

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED
PROPOSALS.
THIS PROXY WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS
GIVEN WITH RESPECT TO ANY MATTER OR MATTERS, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3. THE UNDERSIGNED HEREBY AUTHORIZES THE PROXIES TO VOTE UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING, INCLUDING WITHOUT
LIMITATIONS, A MOTION TO ADJOURN OR POSTPONE THE ANNUAL MEETING TO ANOTHER TIME
AND/OR PLACE FOR THE PURPOSE OF SOLICITING ADDITIONAL PROXIES. AT THE PRESENT
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING.

The undersigned acknowledges receipt from Bankshares prior to the execution
of this proxy of Notice of the Meeting, a Proxy Statement, dated March 15, 1996,
and Bankshares' Annual Report to Stockholders.

DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
PROVIDENT BANKSHARES CORPORATION
______________________________________________________________________________
|Please sign exactly as your name appears on this card. When signing as|
|attorney, executor, administrator, trustee or guardian, please give your full |
|title. If shares are held jointly, each holder should sign. |
| |
| PLEASE ACT PROMPTLY |
| SIGN, DATE & MAIL YOUR PROXY CARD TODAY |
|______________________________________________________________________________|