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PROVIDENT BANKSHARES REPORTS HIGHER EARNINGS, INCREASES DIVIDEND

 BALTIMORE, July 21 /PRNewswire/ -- The board of directors of Provident Bankshares Corporation (NASDAQ-NMS: PBKS) today announced that the corporation's second quarter earnings were 111 percent higher than last year.
 Net income for the quarter ended June 30, 1993, was $1.9 million, or $.29 per share, compared to $904,000, or $.14 per share, for the second quarter of the prior year.
 The higher earnings were due to an 18 percent increase in net interest income, significantly higher non-interest income and a lower provision for loan losses. The increase in net interest income was mainly attributable to a 28 basis point increase in net interest margin. Non-interest income increased $6.6 million due to a $4.4 million gain on sale of the credit card portfolio, a $1.6 million increase in mortgage banking fee and secondary marketing income and a 50 percent increase in deposit service charges. The provision for loan losses decreased $1.6 million for the quarter reflecting the improved quality of the loan portfolio. Partially offsetting the one-time gain from the sale of the credit card portfolio were $1.8 million in expenses related to the early payoff of ESOP indebtedness and $776,000 in branch restructuring charges. During the quarter, Provident adopted a new method of accounting for purchased mortgage servicing rights which resulted in a cumulative charge to earnings of $1.2 million before taxes. Management anticipates that the net effect of the unusually high level of non- recurring income and expense during the quarter will be to improve future earnings.
 Net income for the six months ended June 30, 1993, was $3.5 million, an increase of 132 percent over the $1.5 million earned in the first six months of 1992.
 Loans increased 42 percent to $917 million at June 30, 1993, and total deposits ended the quarter at $1.26 billion. The increase in loans was due to higher volumes in the consumer loan and real estate mortgage portfolios. Assets totaled $1.67 billion compared to $1.54 billion at June 30, 1992.
 Non-performing assets declined to $7 million, a decrease of 72 percent or $18.3 million from June 30, 1992. The allowance for loan losses totaled $20.7 million, or 2.25 percent of total loans.
 Provident's total capital at June 30, 1993, was $122 million, and the corporation's leverage ratio stood at 7.20 percent. The book value of the corporation was $19.66 per share of common stock outstanding as of June 30, 1993.
 The board of directors declared a quarterly cash dividend of $.08 per share, an increase of 14 percent over the previous quarter and 60 percent over the second quarter of last year. The dividend is payable on Aug. 13, 1993, to stockholders of record at the close of business Aug. 2.
 /delval/
 -0- 7/21/93
 /CONTACT: (Mrs.) Marcia Goldman, Corporate Communications, 410-576-2833, or Harold H. Johnson, CFO (investment community), 410-576-2750, both of Provident Bankshares/
 (PBKS)


CO: Provident Bankshares Corporation ST: Maryland IN: FIN SU: ERN DIV

JM-MK -- PH027 -- 4005 07/21/93 13:41 EDT
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Date:Jul 21, 1993
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