Provident to Buy $42 million in Chevy Chase Bank Deposits in Baltimore

Provident Bankshares Corporation (Nasdaq: PBKS) , the parent company of Provident Bank, announced today that it has signed an agreement to acquire the deposits located at seven Chevy Chase Bank in-store branches in the Greater Baltimore area. The seven Chevy Chase Bank branches are located inside Giant Food stores.

The deposits in the acquisition total approximately $42 million and include over 8,000 consumer and commercial customers. The Baltimore area accounts consist of approximately 7,600 retail checking accounts, 300 commercial checking accounts and 3,200 other deposit accounts.

The Chevy Chase Bank accounts are located inside Giant Food stores at Wilkens Avenue, Owings Mills, Ridgely Plaza, York Road Plaza, Ravenwood, Hunt Valley and Edmondson Square. In most cases, a Provident in-store branch is located less than two miles from each Chevy Chase Bank branch.

The agreement does not include the sale of loans, leases, other assets or branch locations inside the affected Giant Food stores in Greater Baltimore. The 3% net deposit premium paid to Chevy Chase Bank for the deposits acquired will have a minimal impact on Provident's regulatory capital ratios as of the date of acquisition.

Provident Bankshares President and Chief Operating Officer Kevin Byrnes said the acquisition furthers the Bank's strategy to increase customer relationships and enhances Provident's position as the premier local bank in the Baltimore area.

"We welcome our new customers to the Provident Bank family," said Mr. Byrnes. "We hope they will enjoy our 'right size' bank philosophy and commitment to customer service that has helped Provident build a top market share position in the Baltimore area. We believe they will appreciate the convenience of our extensive branch network of 142 traditional and in-store offices along with our online, telephone and ATM capabilities. We also look forward to introducing them to banking solutions that include a wide range of products and services. As a local bank in business for over 120 years, we are proud to introduce the 'Provident Way' experience to our new consumer and commercial customers."

W. Scott McSween, Chevy Chase Bank's Executive Vice President of the Retail Banking Division, said, "While we have made a decision to discontinue our supermarket banking program and focus instead on our larger traditional neighborhood branches throughout greater Washington, we wanted to provide customers who opened accounts in our Baltimore-area Giant Food store branches with a convenient alternative. We are pleased that Provident Bank has agreed to provide banking services to these customers and is working with us to provide a smooth transition for the Baltimore deposit account-holders."

The owner of each deposit account will receive information from Chevy Chase Bank about the transition to Provident Bank. Customers will then receive additional information from Provident Bank regarding the transition of their deposits to a conveniently located Provident branch.

On October 22nd, all Chevy Chase Bank customers will be able to access cash with no surcharge fee at any Provident ATM in Baltimore City or Baltimore County. The acquisition requires the approval of various regulatory agencies and is expected to close in January 2009.

About Provident Bankshares Corporation

Provident Bankshares Corporation is the holding company for Provident Bank, the largest independent commercial bank headquartered in Maryland. With $6.4 billion in assets, Provident serves individuals and businesses in the key metropolitan areas of Baltimore, Washington and Richmond through a current branch network of 142 offices in Maryland, Virginia, and southern York County, Pennsylvania. Provident Bank also offers related financial services through wholly owned subsidiaries. Securities brokerage, investment management and related insurance services are available through Provident Investment Center and leases through Court Square Leasing. Visit Provident on the Web at http://www.provbank.com/.

About Chevy Chase Bank

Chevy Chase Bank is the largest locally-owned and headquartered banking institution in Greater Washington providing a complete array of financial products and services to consumers and businesses in Maryland, Virginia and the District of Columbia. The bank operates more branches and ATMs than anyone else in the Greater Washington market and currently has over $15 billion in assets and services over 1 million customers. For more information about Chevy Chase Bank, please visit http://www.chevychasebank.com/.