SCHEDULE 14-A INFORMATION

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

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

Provident Bankshares Corporation
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(Name of Registrant as Specified In Its Charter)

Marc P. Levy, Muldoon, Murphy & Faucette LLP
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] 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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NOTICE OF 1999 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD APRIL 21, 1999

TO THE STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Provident Bankshares Corporation ("Bankshares") will be held on Wednesday, April
21, 1999, 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 seven directors.

(2) To approve the selection of PricewaterhouseCoopers LLP as
independent auditors for 1999.

(3) 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 17, 1999, are entitled to notice of and to vote at the 1999 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/ Peter M. Martin

PETER M. MARTIN
Chairman of the Board, President
and Chief Executive Officer

March 3, 1999

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 3, 1999, 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 21, 1999, 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, and FOR the matter
described in Item 2 of the Notice of Annual Meeting. Execution of a proxy
confers on the designated proxyholders, acting on behalf of and at the direction
of the Board of Directors of Bankshares, 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. As discussed below under
"Other Matters," the Board of Directors intends to instruct such proxyholders to
use such discretionary authority to vote against a possible shareholder proposal
that may be made at the Annual Meeting.

EXPENSES OF SOLICITATION

The cost of the solicitation of proxies will be borne by Bankshares. In
addition to the use of the mails, Innisfree M&A Incorporated, a proxy
solicitation firm, will assist Bankshares in soliciting proxies for the Annual
Meeting and will be paid a fee estimated to be $5,000, plus out-of-pocket
expenses. 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 17,
1999, the record date fixed by the Board of Directors. At February 17, 1999,
Bankshares had outstanding 24,289,613 shares of Common Stock entitled to vote at
the Annual Meeting.

PROPOSALS TO BE VOTED ON AT THE MEETING

PROPOSAL 1. ELECTION OF DIRECTORS

The Board of Directors of Bankshares currently consists of 18 directors.
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 six directors of Bankshares will expire at
the time of the Annual Meeting of Stockholders. The positions of these six
directors are to be filled at the Annual Meeting of Stockholders. Therefore, six
incumbent directors have been nominated to be elected to hold office until the
2002 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, Jr., Barbara B. Lucas, Francis G. Riggs, Carl W.
Stearn, Enos K. Fry and Herbert W. Jorgensen.

At a Board of Directors meeting on May 20, 1998, pursuant to authority
contained under Bankshares' Articles of Incorporation and Bylaws, the Board of
Directors voted to expand the Board by a total of one position. Thomas S.
Bozzuto was elected by the Board to fill this position. Consistent with the laws
of the State of Maryland, Mr. Bozzuto will stand for election by the
stockholders at this Annual Meeting. Mr. Bozzuto has been nominated to be
elected and hold office as a member of the class of directors whose terms expire
at the 2002 Annual Meeting of Stockholders.

Pursuant to Bankshares' Bylaws, which provide that the term of office of a
director of Bankshares shall expire upon the date of the annual meeting of
stockholders immediately following the date on which the director reaches 68
years of age, M. Jenkins Cromwell, Jr., who has attained the age of 68, will
retire from service as a director of Bankshares effective upon the date of this
Annual Meeting.

The proxies solicited hereby, unless directed to the contrary, will be
voted FOR the election as directors of all seven nominees listed in the
following table. In order to be elected, a majority of the shares present 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 2002 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 DECEMBER 31, 1998 (PERCENTAGE OF CLASS)(#)
- ----------------------- -------------------------------------------------------------------------------------

Charles W. Cole, Jr.... Mr. Cole, age 63, has been a director of the Bank and Bankshares since 1995.
Mr. Cole is Vice Chairman of the Board and Managing Director of Brown
Investment Advisory and Trust Co., an investment advisory and trust company.
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.
13,930 shares (*)(1)

Barbara B. Lucas....... Ms. Lucas, age 53, is Senior Vice President and Corporate Secretary of The
Black & Decker Corporation. She was elected a director of the Bank and
Bankshares by the Board of Directors during 1996.
13,029 shares (*)(2)

Francis G. Riggs....... Mr. Riggs, age 61, has been a director of the Bank since 1972 and of
Bankshares since its organization. Mr. Riggs is an Executive Vice President
and director of Riggs, Counselman, Michaels & Downes, Inc., an insurance
brokerage company located in Baltimore, Maryland.
84,456 shares (*)(3)

Carl W. Stearn......... Mr. Stearn, age 66, served as Chairman of the Board and Chief Executive
Officer of Bankshares and the Bank prior to his retirement on April 15, 1998.
He had been employed with Bankshares and the Bank since 1990. Mr. Stearn
became a director of Bankshares and the Bank in 1990.
253,146 shares (1%)(4)

Enos K. Fry............ Mr. Fry, age 55, has been Group Manager - Washington Metro Area, of the
Bank since 1997. Prior to joining the Bank, he served in various executive
capacities with Citizens Savings Bank, F.S.B. ("Citizens Savings"), including
President, Director, and Vice Chairman of the Board, until Citizens Savings
was acquired by the Bank in 1997.
99,700 shares (*)(5)

Herbert W. Jorgensen... Mr. Jorgensen, age 70, served as Chairman of the Board and Chief Executive
Officer of Citizens Savings from April 1994 until it was acquired by the Bank
in August 1997. Prior thereto, he served as Vice Chairman of the Board of
Directors of Citizens Savings.
123,614 shares (*)(6)

The following table presents information concerning the individual elected
as director of Bankshares by the Board of Directors subsequent to the 1998
Annual Meeting of Stockholders. This individual has been nominated by the Board
of Directors for election as a member of the class of directors of Bankshares
whose terms are expected to expire at the 2002 Annual Meeting of Stockholders or
until their successors have been elected and qualified or until their earlier
resignation or removal.

AGE, PRINCIPAL OCCUPATION, POSITION WITH BANKSHARES AND THE BANK, AND
NAME OF NOMINEE BENEFICIAL OWNERSHIP OF COMMON STOCK AT DECEMBER 31, 1998 (PERCENTAGE OF CLASS)(#)
- ---------------------- -------------------------------------------------------------------------------------

Thomas S. Bozzuto..... Mr. Bozzuto, age 52, is the Chief Executive Officer of The Bozzuto Group, a full-
service residential company located in Greenbelt, Maryland. He has held this
position since he formed The Bozzuto Group in 1988.
8,470 shares (*)(7)

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 1998 Annual Meeting of
Stockholders and one named executive officer who is not a director of
Bankshares. As indicated, some directors will serve until the 2000 Annual
Meeting of Stockholders, and other directors will serve until the 2001 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.

DIRECTORS SERVING UNTIL 2000

Dr. Calvin W. Burnett.. Dr. Burnett, age 66, has been a director of the Bank since 1984 and of
Bankshares since its organization. He is President of Coppin State College,
Baltimore, Maryland.
10,888 shares (*)(8)

Pierce B. Dunn......... Mr. Dunn, age 48, has been a director of the Bank since 1988 and of
Bankshares since its organization. He is Chairman of the Board of MIRCON,
Inc., an environmental and engineering company.
49,232 shares(*)(9)

Mark K. Joseph......... Mr. Joseph, age 60, has been a director of the Bank and Bankshares since
1993. He is Chairman and Chief Executive Officer of Municipal Mortgage and
Equity, LLC, a lender which invests in real estate backed tax exempt bonds.
Mr. Joseph is also Chairman of the Board and founder of The Shelter Group, a
real estate development, property and asset management company. Mr. Joseph
serves as Chairperson of Bankshares' Audit Committee.
23,183 shares (*)(10)

Peter M. Martin........ Mr. Martin, age 61, Chairman of the Board, President and Chief Executive
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.
293,841 shares (1.2%)(11)

AGE, PRINCIPAL OCCUPATION, POSITION WITH BANKSHARES AND THE BANK, AND
NAME OF DIRECTORS BENEFICIAL OWNERSHIP OF COMMON STOCK AT DECEMBER 31, 1998 (PERCENTAGE OF CLASS)(#)
- --------------------------- -------------------------------------------------------------------------------------

Sheila K. Riggs............ Mrs. Riggs, age 55, has been a director of the Bank since 1982 and of
Bankshares since its organization. Mrs. Riggs is the Chairman of the Maryland
Health and Higher Education Facilities Authority, which issues bonds to
finance health care and higher education facilities. Ms. Riggs serves as
Chairperson of Bankshares' Compensation Committee.
51,907 shares (*)(12)

DIRECTORS SERVING UNTIL 2001

Robert B. Barnhill, Jr. ... Mr. Barnhill, age 54, has been a director of the Bank and Bankshares since
1992. He is Chairman, Chief Executive Officer and founder of TESSCO
Technologies, Incorporated, a supplier to the wireless communication industry.
13,479 shares (*)(10)

Melvin A. Bilal............ Mr. Bilal, age 56, has been a director of the Bank and Bankshares since 1992.
He is owner and Managing Executive of the Bilal Group, Inc., a provider of
long and short term staffing needs. Prior to this position, he was President and
founder of Security America Services, Inc., a security consulting firm.
11,503 shares (*)(10)

Ward B. Coe, III, Esquire.. Mr. Coe, age 53, was elected as a director of the Bank and Bankshares
subsequent to the 1997 Annual Meeting of Stockholders. He is Managing
Partner of the law firm of Whiteford, Taylor & Preston LLP.
10,872 shares (*)(13)

Frederick W. Meier, Jr. ... Mr. Meier, age 55, was elected as a director of the Bank and Bankshares
subsequent to the 1997 Annual Meeting of Stockholders. He is President of
Lord Baltimore Capital Corp., formerly ATAPCO Capital Management Group.
Prior to being elected to this position in 1996, he was an Executive Vice
President of First National Bank of Maryland and First Maryland Bancorp.
11,918 shares (*)(13)

Sister Rosemarie Nassif.... Sister Nassif, age 57, has been a director of the Bank and Bankshares since
1992. She is the Executive Director of the Fund for Educational Excellence
and the former President of the College of Notre Dame of Maryland.
11,367 shares (*)(14)

AGE, PRINCIPAL OCCUPATION, POSITION WITH BANKSHARES AND THE BANK, AND
NAME OF EXECUTIVE OFFICER BENEFICIAL OWNERSHIP OF COMMON STOCK AT DECEMBER 31, 1998 (PERCENTAGE OF CLASS)(#)
- --------------------------- -------------------------------------------------------------------------------------

NAMED EXECUTIVE OFFICERS
WHO ARE NOT DIRECTORS

James R. Wallis............ Mr. Wallis, age 50, 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.
71,045 shares (*)(15)

- ----------------------------
(#) 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.
(1) Includes 3,314 shares subject to a currently exercisable stock option and 6,731 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.
(2) Includes 4,305 shares subject to a currently exercisable stock option and 6,510 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.
(3) Includes 2,100 shares subject to a currently exercisable stock option; 6,731 shares subject to a stock option not
currently exercisable; 11,460 shares held as custodian; and 2,760 shares which represent Mr. Riggs' beneficial interest
of shares owned by Riggs, Counselman, Michaels & Downes, Inc. The remainder of the shares are held directly.
(4) Includes 60,774 shares subject to a currently exercisable stock option; 150,490 shares subject to a stock option not
currently exercisable; and 17,570 shares held in the Retirement Savings Plan for the benefit of Mr. Stearn. The
remainder of the shares are held directly.
(5) Includes 66,720 shares subject to a currently exercisable stock option; 10,500 shares subject to a stock option not
currently exercisable; 5,615 shares held in an individual retirement account for the benefit of Mr. Fry; and 16,865
shares held by spouse.
(6) Includes 103,071 shares subject to a currently exercisable stock option; 2,100 shares subject to a stock option not
currently exercisable; 7,003 shares held in an IRA; and 3,276 held by spouse. The remainder of the shares are held
directly.
(7) Includes 2,500 shares subject to a currently exercisable stock option and 4,500 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.
(8) Includes 3,581 shares subject to a currently exercisable stock option and 4,323 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.
(9) Includes 4,530 shares subject to a currently exercisable stock option; 6,731 shares subject to a stock option not
currently exercisable; 25,814 shares held as trustee; 1,490 shares held as custodian; and 118 shares held by spouse. The
remainder of the shares are held directly.
(10) Includes 4,530 shares subject to a currently exercisable stock option and 6,731 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.
(11) Includes 50,774 shares subject to a currently exercisable stock option; 150,490 shares subject to a stock option not
currently exercisable; and 6,415 shares held in the Retirement Savings Plan for the benefit of Mr. Martin. The
remainder of the shares are held directly.
(12) Includes 2,100 shares subject to a currently exercisable stock option, 6,731 shares subject to a stock option not
currently exercisable; and 2,088 shares held as custodian. The remainder of the shares are held directly.
(13) Includes 4,305 shares subject to a currently exercisable stock option and 6,510 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.
(14) Includes 3,427 shares subject to a currently exercisable stock option and 6,731 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.
(15) Includes 47,380 shares subject to a currently exercisable stock option and 10,500 shares subject to a stock option not
currently exercisable. The remainder of the shares are held directly.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of December 31, 1998, 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(1)
OF BENEFICIAL PERCENT
OWNERSHIP OF CLASS
-------------------- ------------

All directors and executive officers as a group (19 persons) 1,155,580 4.76%

- --------------------
(1) Shares subject to currently exercisable options that 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.

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, Jr., Coe, Cole, Jr., Dunn,
Jorgensen and Meier, Jr.) 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 1998.

The Compensation Committee (Mrs. Riggs, Lucas, Sister Nassif and Messrs.
Cole, Jr., Cromwell, Dunn 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 1998.

The Nominating Committee (Messrs. Bilal, Burnett, Coe, Cromwell and Mrs.
Lucas) 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 in accordance with Bankshares
bylaws. The Nominating Committee met one (1) time during 1998.

DIRECTORS' COMPENSATION

The Board of Directors of Bankshares held twelve (12) meetings during
1998. The Board of Directors of the Bank met twelve (12) times during 1998. All
of the directors of Bankshares, excluding Mr. Joseph, attended at least 75% of
the total number of Bankshares' board meetings held and committee meetings on
which such director served during 1998. Each outside director of Bankshares and
the Bank receives an annual retainer of $14,000 for service on either or both of
the Boards of Directors. Each outside director also receives a fee of $700 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 $700 for attendance at committee meetings, while the chairpersons of such
committees receive a fee of $800. Total directors' fees paid by Bankshares and
the Bank during 1998 were $395,550.

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 prime rate. Payment of the
deferred amount may be made to the director or to his or her beneficiary. In
addition, non-employee directors are eligible to receive options under the
Provident Bankshares Corporation Amended and Restated Stock Option Plan (the
"Stock Option Plan"). Finally, a Non-Employee Directors' Severance Plan exists
which provides that if a director's service is terminated following a "change in
control" of Bankshares or the Bank, as defined in the Plan, such director is
entitled to receive a payment equal to five times the directors' annual
retainer.

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, as amended, or the Securities Exchange Act of 1934, as
amended, 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
President and Chief Executive Officer of Bankshares are made by the five 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 1998. 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 1998 as they affected Mr. Martin, the
President and Chief Executive Officer, and one other named Executive Officer.

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. In the case of Mr. Martin, this annual
bonus is determined under the terms of the Provident Bankshares Corporation
Executive Incentive Plan ("EIP") or, in the case of Mr. Wallis, the Group
Management Incentive Plan ("GMIP"). The Compensation Committee has discretion to
establish, relative to performance and peer group comparisons, the base salary
of the Chief Executive Officer. 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
the other named Executive Officer based upon a performance review of the
executive. The Compensation Committee also approves the participation of key
executives in the EIP and the GMIP and is responsible for the granting of
options under the Stock Option Plan.

EXECUTIVE INCENTIVE PLAN

Under the EIP, for purposes of establishing incentive awards, three
after-tax net income targets for the upcoming year are established: threshold,
budget and maximum. Additionally, the Compensation Committee sets a percentage
of base salary to be eligible to be received as incentive compensation at each
of the threshold, budget and maximum targets. If actual after-tax net income
reaches the threshold, budget or maximum targets, Mr. Martin will automatically
receive 75% of the designated percentage of base salary as incentive
compensation. If the actual after-tax net income is less than the maximum, but
greater than the threshold or budget after-tax net income targets, the
percentage of base salary which may be received as incentive compensation is
increased proportionately. The remaining 25% of the award potential is based on
individual performance against goals, 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. In the event that actual after-tax net income is less than the
threshold after-tax net income target, 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 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.

GROUP MANAGEMENT INCENTIVE PLAN

Under the GMIP, for purposes of establishing incentive awards, after-tax
net income targets for the upcoming year are established with a threshold and a
maximum, based on the annual budget of Bankshares as approved by the Board of
Directors. Additionally, the Compensation Committee sets a sliding scale
percentage of base salary eligible to be received as incentive compensation. If
actual after-tax net income reaches the threshold or maximum targets, Mr. Wallis
receives a percentage of base salary as incentive compensation. If the actual
after-tax net income is less than the maximum, but greater than the threshold or
budgeted after-tax net income targets, the percentage of base salary which may
be received as incentive compensation is increased proportionately. The award
potential is based on corporate and individual performance goals. In the event
that actual after-tax net income is less than the threshold after-tax income
target, no incentive compensation is payable. The Compensation Committee reviews
the terms of the GMIP each year to assure that, in operation, it is furthering
the Committee's

compensation policy objectives. Incentive compensation earned under the GMIP is
paid 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 GMIP 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 Mr.
Martin participates. The Supplemental Plan provides additional benefits to Mr.
Martin 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. 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 life of Mr.
Martin. 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. Martin's base compensation for the
fiscal year 1998 at $405,000, which represents an 8% increase over his 1997 base
salary. Mr. Martin was appointed Chief Executive Officer effective April 15,
1998. Prior to that, he served as President and Chief Operating Officer. In
establishing his base salary, the Compensation Committee reviewed Mr. Martin'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 1998 reflects the Compensation Committee's recognition of Mr.
Martin'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 budget target
for 1998 was exceeded, resulting in a formula and performance driven
proportional payout of $121,500.

COMPENSATION OF OTHER EXECUTIVE OFFICERS

Recommendations regarding the base salary of Mr. Wallis 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 salary of
Mr. Wallis is based upon a review of his performance 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 Mr. Wallis for 1998. Mr. Martin participates in
the EIP and Mr. Wallis participates in the GMIP. Awards under each plan are
based upon the formula contained in the Plans.

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

SHEILA K. RIGGS (CHAIRPERSON)
CHARLES W. COLE, JR.
M. JENKINS CROMWELL, JR.
PIERCE B. DUNN
BARBARA B. LUCAS
SISTER ROSEMARIE NASSIF
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, 1996, 1997 and 1998 (i) to the retired Chief Executive
Officer of Bankshares; (ii) the current President and Chief Executive Officer of
Bankshares; and (iii) to the one other member of executive management whose 1998
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............. 1998 $123,956 $ 37,186 $ 4,108(2) -- $ 89,226(4)
Chairman of the Board and 1997 425,000 127,500 4,960 -- 103,499
Chief Executive Officer(1) 1996 388,346 118,770 5,454 136,500(3) 52,389

Peter M. Martin............ 1998 $405,000 $121,500 $ 4,358(2) -- $ 56,527(4)
Chairman of the Board, 1997 375,000 112,500 4,823 -- 68,150
President and Chief 1996 325,371 99,510 4,952 136,500(3) 37,689
Executive Officer(1)

James R. Wallis............ 1998 $189,000 $ 43,000 $ -- 10,500 $ 7,500(4)
Executive Vice President 1997 180,000 42,000 -- -- 7,125
and Chief Financial Officer 1996 165,667 47,800 -- -- 1,125
- --------------------------------------
(1) Mr. Stearn retired as Chairman of the Board and Chief Executive Officer of Bankshares effective
April 15, 1998 and the Board of Directors of Bankshares appointed Mr. Martin to serve as Chairman
of the Board, President and Chief Executive Officer of Bankshares effective April 15, 1998. Prior
to this appointment, Mr. Martin served as President and Chief Operating Officer of Bankshares.
Figures shown for Mr. Stearn are pro-rated.
(2) Represents grossed-up reimbursement for the tax effect of reportable incremental imputed income for
the split dollar insurance agreements.
(3) None of the disclosed options held by Messrs. Stearn and Martin are currently exercisable. The
number of options disclosed reflects adjustment pursuant to the Stock Option Plan for 5% stock
dividends. See "Stock Option Grants."
(4) The amounts shown in this column for the last fiscal year are derived from the following figures:
(i) Mr. Stearn: $5,625 allocated under the Bank's 401(k) plan, and $83,601 in economic value of
Bank-paid split-dollar life insurance premiums; (ii) Mr. Martin: $7,500 allocated under the Bank's
401(k) plan, and $49,027 in economic value of Bank-paid split-dollar life insurance premiums; and
(iii) Mr. Wallis: $7,500 allocated under the Bank's 401(k) plan.

CHANGE IN CONTROL AGREEMENTS

Bankshares and the Bank entered into Change in Control Agreements with
Messrs. Martin and Wallis during 1995. Each Change in Control Agreement (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 Bankshares or the Bank, as defined in the Change in Control Agreements, if
Bankshares or the Bank terminates the Executive's employment for any reason
other than cause, or if the Executive 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 following a change in control, the Executive, or in the event
of death, the Executive'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 Bankshares or the Bank for less than five years. Bankshares 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 Bankshares or the Bank,
whichever comes first. If the Executive voluntarily resigns from Bankshares 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 Bankshares 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 Bankshares 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 1998 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. During 1998,
309,150 shares subject to options were granted to 114 persons.

OPTIONS GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTIONS(1)
- ---------------------------------------------------------------------------------- -------------------
NUMBER OF % OF TOTAL
SECURITIES OPTION/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/ EMPLOYEES BASE PRICE
SARS GRANTED IN PER EXPIRATION
NAME (2) FISCAL YEAR SHARE(3) DATE 5% 10%
- ---- ------------ ------------- ------------ ------------ -------- ---------

James R. Wallis.......... 10,500 3.4% $32.14 02/13/08 $210,950 $535,798

- -------------------------------
(1) The fair market value on the date of grant was $32.065. 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.
(2) The number of options disclosed reflects adjustment pursuant to the Stock
Option Plan for a 5% stock dividend.
(3) The price disclosed reflects adjustment pursuant to the Stock Option Plan
for a 5% stock dividend.

STOCK OPTION EXERCISES AND HOLDINGS

The following table reflects all stock option exercises by the Named
Executive Officers during 1998 and includes the number of shares covered by all
remaining unexercised stock options as of December 31, 1998. 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

SHARES
ACQUIRED NUMBER OF SECURITIES VALUE OF UNEXERCISED
ON VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
EXERCISE(#) REALIZED($) OPTIONS/SARS AT FY-END(#) AT FY-END ($)(1)
------------------------ -------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------- ---------- ------------- ----------- ------------- ----------- -------------

Carl W. Stearn.................. -- -- 60,774 150,490 $1,296,613(2) $1,565,848(3)
Chairman of the Board and Chief
Executive Officer

Peter M. Martin................. 10,000 $222,438 50,774 150,490 $1,083,263(2) $1,565,848(3)
Chairman of the Board, President
and Chief Executive Officer

James R. Wallis................. -- -- 47,380 10,500 $ 605,280(4) --(5)
Executive Vice President and Chief
Financial Officer
- --------------------------------
(1)The closing price of the Common Stock on December 31, 1998 was $24 7/8.
(2)The option exercise price is $3.54.
(3)The option exercise price is $14.47.
(4)The option exercise price is $12.10.
(5)The option exercise price is $32.14.

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, 1998, and the estimated years of
service at the respective normal retirement dates for Messrs. Martin and Wallis.

YEARS OF SERVICE YEARS OF SERVICE
NAME AT 12/31/98 AT NORMAL RETIREMENT
- ----------------------- ---------------- ----------------------

Peter M. Martin........ 8.8 12.4
James R. Wallis........ 3.4 18.2

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,
1998, the Bank paid Riggs, Counselman, Michaels & Downes, Inc. $374,523 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

[GRAPH APPEARS HERE]

Summary

12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98

Provident Bankshares Corporation 100.00 115.02 167.49 226.51 383.07 331.56
Middle Atlantic Bank Index 100.00 99.03 145.75 194.71 317.56 349.55
Nasdaq Market Index 100.00 104.99 136.18 169.23 207.00 291.96

Notes:
A. The lines represent yearly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the yearly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.00 in 1993.

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
collectibility or present other unfavorable features.

PROPOSAL 2. TO APPROVE THE SELECTION OF
INDEPENDENT AUDITORS FOR THE YEAR 1999

The Board of Directors of Bankshares has appointed the firm of
PricewaterhouseCoopers LLP, certified public accountants, as independent
auditors for Bankshares for the year 1999, subject to the approval of the
stockholders. PricewaterhouseCoopers LLP, 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 PricewaterhouseCoopers LLP 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
PricewaterhouseCoopers LLP as its independent auditors to Bankshares for the
year 1999.

The Board of Directors recommends a vote FOR this Proposal. Proxies will
be voted FOR this Proposal unless otherwise instructed by the persons giving the
proxy.

OTHER MATTERS

The Board of Directors is not aware of any other matter to be presented
for action at the meeting, other than the matters previously set forth in this
Proxy Statement, except that the Board has been given notice by Mid-Atlantic
Investors ("Mid-Atlantic"), a shareholder of Bankshares, that it intends to
offer the following non-binding resolution at the meeting (which was not
submitted for inclusion in this Proxy Statement): "RESOLVED, that the
stockholders hereby inform the board of directors that it is the desire of the
stockholders that the board of directors immediately take the necessary steps to
achieve a sale, merger or other acquisition of the Company on terms that will
maximize stockholder value as promptly as possible." The Board cannot be certain
that Mid-Atlantic will offer this proposal at the meeting. However, the Board
opposes adoption of the proposal and intends to use its discretionary authority
to vote stockholder proxies against the proposal if it is properly presented. In
making this determination, the Board of Directors considered a presentation made
to the Board of Directors by a representative of Mid-Atlantic.

The Board believes that adoption of the proposal is inappropriate for a
variety of reasons. First, the Board believes that its current strategy is the
best way to maximize long-term shareholder value. Second, the Board regularly
reviews, with the assistance of outside advisors, including its investment
banker, its strategy and other actions that may be taken to maximize long-term
shareholder value. Third, the Board of Directors is fully aware of its
obligations to act in the best interest of Bankshares and its

shareholders and its other constituencies. In this regard, Bankshares publicly
stated in its September 28 letter to shareholders that it has not adopted a
"just say no" policy. Fourth, the Board of Directors believes that the adoption
of this non-binding proposal would be detrimental to the financial interests of
Bankshares and its shareholders. Although the proposal does not require the
Board to take any action, the Board believes that its adoption would result in
uncertainty regarding Bankshares' future that would adversely affect its ability
to retain and attract customers and its ability to retain and attract personnel,
as well as its ability to enter into arrangements or alliances with third
parties. In addition, the Board of Directors also believes that the adoption of
this proposal could adversely affect its ability to affect a strategic merger or
sale of Bankshares on the most favorable terms possible to shareholders if such
a course of action were determined to be appropriate.

If any other business is properly brought before this meeting, the persons
named in the proxy form attached to this Proxy Statement will vote such proxy in
accordance with their best judgment concerning such business.

VOTING PROCEDURES

As to the election of directors, the proxy card being provided by the
Board of Directors enables a shareholder to vote "FOR" the election of nominees
proposed by the Board, or to "WITHHOLD" authority to vote for one or more of the
nominees being proposed. Under Bankshares' Bylaws, directors are elected by a
majority of the votes present, without regard to either: (i) broker non-votes or
(ii) proxies as to which authority to vote for one or more of the nominees being
proposed is withheld.

As to the ratification of PricewaterhouseCoopers LLP as independent
auditors of Bankshares, by checking the appropriate box, a shareholder may: (i)
vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from
voting on such item. Under Bankshares' Bylaws, action on such matter is
determined by a majority of the votes cast, without regard to either: (i) broker
non-votes or (ii) proxies marked "ABSTAIN" as to that matter.

As indicated above, the Board of Directors intends to use the
discretionary authority conferred by the proxy card to vote against the
shareholder proposal referred to above. Under Bankshares Bylaws, action on such
a proposal would be determined by a majority of the votes cast.

Stockholder votes are tabulated manually by Bankshares. Proxies received
by Bankshares, if such proxies are properly executed and delivered, will be
voted in accordance with the voting specifications made on such proxies. Proxies
received by Bankshares on which no voting specification has been made by the
stockholder will be voted as described in this Proxy Statement. 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
Bylaws of Bankshares, proxies received by Bankshares specifying an abstention as
to a proposal will cause the shares so represented to be counted toward a
quorum, but not counted as voting for such 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 -- 2000 ANNUAL MEETING

To be eligible under the Securities and Exchange Commission's shareholder
proposal rule (Rule 14a-8) for inclusion in Bankshares' proxy statement and form
of proxy card, and for presentation at Bankshares' 2000 Annual Meeting,
currently scheduled to be held on April 19, 2000, a proposal of a stockholder
must be received by Bankshares at 114 East Lexington Street, Baltimore, Maryland
21202 prior to November 6, 1999. For a shareholder proposal submitted outside of
the process provided by Rule 14a-8 to be eligible for presentation at
Bankshares' 2000 Annual Meeting, timely notice thereof must be received by
Bankshares by December 21, 1999 in the manner and form required by Bankshares'
By-Laws. In order to curtail controversy as to compliance with these
requirements, stockholders are urged to submit proposals to the Secretary of
Bankshares by Certified Mail-Return Receipt Requested. If the date of the 2000
Annual Meeting should change, such deadlines would also change.

ANNUAL REPORTS

BANKSHARES' 1998 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/ Peter M. Martin

PETER M. MARTIN
Chairman of the Board, President
and Chief Executive Officer

Baltimore, Maryland
March 3, 1999

PROVIDENT BANKSHARES CORP.

c/o EquiServe
P.O. Box 9040
Boston, MA 02266-9040

[DETACH HERE]

/ X / PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF CONTRARY
DIRECTIONS, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS
LISTED BELOW AND FOR PROPOSAL 2.

1. Election of Directors.
NOMINEES: Thomas S. Bozzuto; Charles W. Cole, Jr.; Enos K. Fry;
Herbert W. Jorgensen; Barbara B. Lucas; Francis G. Riggs and
Carl W. Stearn

FOR WITHHELD
/___/ /___/

/___/ ______________________________________
For all nominees except as noted above

2. To ratify the selection of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as the
independent auditors of the Company /___/ /___/ /___/
for the fiscal year 1999.

In their discretion, the proxies, on behalf of and at the direction of
the Board of Directors of Provident Bankshares Corporation, are
authorized to vote with respect to matters incident to the conduct of the
meeting and upon such other matters as may properly come before the
meeting and all adjournments and postponements thereof.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT /___/

Please sign exactly as your name appears hereon. Each executor,
administrator, trustee, guardian, attorney-in-fact and other fiduciary
should sign and indicate his or her full title. When stock has been
issued in the name of two or more persons, all should sign.

Signature: _________________ Date: _______ Signature: ____________ Date: _______

[DETACH HERE]

PROXY

PROVIDENT BANKSHARES CORPORATION

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, APRIL 21, 1999

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Dennis A. Starliper and Robert L. Davis, or
either of them, each with power of substitution, as proxies of the undersigned,
on behalf of and at the direction of the Board of Directors of Provident
Bankshares Corporation, to attend the Annual Meeting of Stockholders of
Provident Bankshares Corporation to be held at Provident's Headquarters
Building, Tenth Floor 114 E. Lexington Street, Baltimore, Maryland 21202 on
April 21, 1999 and any adjournment thereof, and to vote the number of shares the
undersigned would be entitled to vote if personally present on the following
matters set forth on the reverse side.

SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE