<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
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[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
PROVIDENT BANKSHARES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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was paid previously. Identify the previous filing by registration statement
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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PROVIDENT BANKSHARES
--------------------
CORPORATION
<PAGE>
PROVIDENT BANKSHARES CORPORATION
(NASDAQ:PBKS)
. Total assets of $5.1 billion as of December 31, 1999
. Second largest commercial bank chartered in Maryland ranked by
by total asset size
. Major presence in dynamic Baltimore-Washington corridor as well as
Northern Virginia; 83 banking offices
. 25 consecutive quarterly increases in core earnings
. Book value at December 31, 1999: $10.76 per share
<PAGE>
FOURTH QUARTER FINANCIAL
HIGHLIGHTS
. Reported EPS of $0.44, an increase of 16% from 1998 fourth quarter
. Net income increased 14.2% to $11.5 million
. Non-interest income (excluding securities gains and mortgage
activity) increased 9.9%
. Efficiency Ratio improved to 61.46%
<PAGE>
FOURTH QUARTER RESULTS
($ in thousands, except per share data) 4Q99 4Q98 Growth
---- ---- ------
Net Income $11,530 $ 10,100 14.2%
Earnings Per Share $0.44 $ 0.38 15.8%
Return on Assets 0.91% 0.85%
Return on Common Equity 14.62% 13.99%
Net Interest Margin 3.27% 2.99%
<PAGE>
1999
FINANCIAL HIGHLIGHTS
. Double digit earnings growth of 13.1%
. Growth in earnings per share of 13.6%
. Growth in average deposits of 11.7%
. Growth in non-interest income of 13.2%
. Exceeded EPS consensus estimate of $1.65 by $.02
. Improved operating efficiency by 3.6%
<PAGE>
1999
PERFORMANCE FOR THE YEAR
<TABLE>
<CAPTION>
($ in thousands, except per share data) 1999 1998 Growth
---- ---- ------
<S> <C> <C> <C>
Net Income $44,150 $39,030 13.1%
Earnings Per Share $1.67 $1.47 13.6%
Return on Assets 0.90% 0.90%
Return on Common Equity 14.61% 13.99%
Net Interest Margin 3.13% 3.12%
</TABLE>
<PAGE>
RETAIL GROWTH STRATEGY
. Increasing market share with "hub and spoke" strategy
. In-store branches provide convenience with prime locations, extended hours
. In-store partners include Wal-Mart, Shoppers Food Warehouse and Metro Foods
. Traditional branches support network with drive-in banking, safe deposit
services and expanded commercial capabilities
. Provides platform to grow Commercial and Real Estate customer base
<PAGE>
RETAIL GROWTH STRATEGY
[MAP OF RETAIL GROWTH STRATEGY AREA APPEARS HERE]
Baltimore City/Baltimore County
. Household Growth - 1.9%
. Average Income - $61,500
. Average Property Value - $103,000
Montgomery County/Northern Virginia
. Household Growth - 4.6%
. Average Income - $79,600
. Average Property Value - $174,000
<PAGE>
INCREASE DEPOSIT MARKET SHARE
Percent of Maryland Commercial Banks
[BAR GRAPH APPEARS HERE]
1993 1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ---- ----
3.1% 3.3% 3.7% 4.3% 4.6% 5.1% 5.9%
<PAGE>
COMPETITION - MARKET SHARE
[BAR GRAPH APPEARS HERE]
All Bank of Sun Chevy First
PBKS First America Trust Chase Mercantile Union
----- ----- ------- ----- ----- ---------- -----
1998 5.1% 11.4% 16.1% 9.0% 7.0% 3.5% 7.9%
1999 5.9% 11.7% 16.3% 8.6% 7.1% 3.2% 6.9%
<PAGE>
INVESTMENT HIGHLIGHTS
. Valuable franchise in highly attractive markets
. Enhancing franchise value while improving profitability
. Well positioned in markets served
. Highly experienced senior management team
. Enhancing shareholder value
. Asset quality
<PAGE>
VALUABLE FRANCHISE IN
HIGHLY ATTRACTIVE MARKETS
. 83 Branches as of December 31, 1999
. Branches located in metropolitan Baltimore, affluent Maryland suburbs of
Washington, D.C., Southern Pennsylvania and Northern Virginia
<PAGE>
ENHANCING FRANCHISE VALUE
WHILE IMPROVING PROFITABILITY
. Partnerships with Wal-Mart, Shoppers Food Warehouse and Metro Foods allowing
cost effective expansion into prime locations
. Break-even on in-store locations: 18 months on average
. Traditional branches support in-store
. Branch expansion will support commercial calling effort
<PAGE>
WELL POSITIONED IN
MARKETS SERVED
. Large enough to provide a full range of services
- Commercial lending
- Cash Management services
- Provident Investment Center, Inc.
- Internet Banking
- Leasing companies
. Small enough to be flexible in a world of financial giants
- Local decision makers
<PAGE>
E-COMMERCE CAPABILITIES
[PICTURE OF BUILDING APPEARS HERE]
. Web site
- Open accounts
- Loan applications
- Mortgage loans
. PC Banking
. Internet Banking
. Debit Cards
- Retail and commercial
<PAGE>
HIGHLY EXPERIENCED
MANAGEMENT TEAM
[MANAGEMENT FLOW CHART APPEARS HERE]
Peter M. Martin
Chief Executive Officer
. 33 years banking experience
. CEO: April 1998
. President of Provident Bank: February 1990 - April 1998
Richard J. Oppitz
Office of the Chair
. 28 years banking experience with executive positions in retail banking,
commercial lending and credit administration
. 6 years with Provident Bank
. 16 years with Equitable Bank, Baltimore, Maryland
Gary N. Geisel
Office of the Chair
. 29 years banking experience with executive positions in retail banking
. 5 years with Equitable Bank, Baltimore, Maryland
. 7 years with Citizens Bank, Laurel, Maryland
John F. Novak
Office of the Chair
. 26 years banking experience
. 13 years with Equitable Bank, Baltimore, Maryland, as Senior Vice President in
charge of Consumer Lending
<PAGE>
ENHANCING SHAREHOLDER VALUE
. 25 consecutive quarters of dividend increases
. 25 consecutive quarters of increased core earnings
. Stock buy-back strategy
<PAGE>
ASSET QUALITY
<TABLE>
<CAPTION>
ALLOWANCE TO LOANS NON-PERFORMING TO LOANS
1995 1996 1997 1998 1999 1995 1996 1997 1998 1999
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.57% 1.35% 1.36% 1.38% 1.26% 0.90% 0.84% 0.36% 0.37% 0.91%
</TABLE>
<TABLE>
<CAPTION>
NET CHARGE OFFS TO LOANS ALLOWANCE TO NON-PERFORMING
1995 1996 1997 1998 1999 1995 1996 1997 1998 1999
- ---- ---- ---- ---- ---- ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0.06% 0.35% 0.14% 0.21% 0.40% 174.41% 161.29% 374.07% 371.10% 137.60%
</TABLE>
<PAGE>
LOANS OUTSTANDING 12/31/99
[PIE GRAPH APPEARS HERE]
Consumer Commercial Commercial Real Estate Residential Mortgage
- -------- ---------- ---------------------- --------------------
70% 11% 12% 7%
<PAGE>
COMMERCIAL LOAN
PORTFOLIO BY SIC
[PIE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Agriculture, Transportation
Forestry & & Public Wholesale
Fishing Mining Construction Manufacturing Utilities Trade
- ----------- ------ ------------ ------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
0.10% 0.00% 6.10% 5.90% 2.50% 2.50%
</TABLE>
<TABLE>
<CAPTION>
Finance,
Insurance & Public
Retail Trade Real Estate Services Administration Non-Classifiable
- ------------ ----------- -------- -------------- ----------------
<S> <C> <C> <C> <C>
3.20% 46.70% 27.60% 0.10% 5.10%
</TABLE>
<PAGE>
PROVIDENT BANK
FINANCIAL
STRENGTH
<PAGE>
STRATEGIC FINANCIAL OBJECTIVES
. Sustainable Quality Revenue
. EPS Growth
. Increasing Returns on Invested Capital
<PAGE>
STABILITY OF EARNINGS
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
CAPITAL MARKETS
1st Qtr 96 2nd Qtr 96 3rd Qtr 96 4th Qtr 96 1st Qtr 97 2nd Qtr 97 3rd Qtr 97 4th Qtr 97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10 Year US 6.33% 6.71% 6.70% 6.42% 6.90% 6.50% 6.10% 5.74%
2 Year US 5.76% 6.11% 6.10% 5.87% 6.42% 6.07% 5.78% 5.65%
3 Month LIBOR 5.47% 5.58% 5.63% 5.56% 5.77% 5.78% 5.77% 5.81%
<CAPTION>
1st Qtr 98 2nd Qtr 98 3rd Qtr 98 4th Qtr 98 1st Qtr 99 2nd Qtr 99 3rd Qtr 99 4th Qtr 99
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6.65% 5.45% 4.42% 4.65% 5.24% 5.78% 5.88% 6.44%
5.56% 5.47% 4.27% 4.53% 4.99% 5.51% 5.60% 6.21%
5.71% 5.69% 5.31% 5.07% 5.00% 5.37% 6.08% 6.00%
<CAPTION>
EARNINGS PER SHARE
1st Qtr 96 2nd Qtr 96 3rd Qtr 96 4th Qtr 96 1st Qtr 97 2nd Qtr 97 3rd Qtr 97 4th Qtr 97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EPS 0.253 0.263 0.281 0.298 0.307 0.313 0.345 0.333
1st Qtr 98 2nd Qtr 98 3rd Qtr 98 4th Qtr 98 1st Qtr 99 2nd Qtr 99 3rd Qtr 99
<S> <C> <C> <C> <C> <C> <C> <C>
0.352 0.362 0.371 0.381 0.39 0.42 0.43
<CAPTION>
NET INTEREST INCOME
1st Qtr 96 2nd Qtr 96 3rd Qtr 96 4th Qtr 96 1st Qtr 97 2nd Qtr 97 3rd Qtr 97 4th Qtr 97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NII $21,789 $22,880 $23,478 $23,882 $29,786 $30,709 $31,351 $31,603
1st Qtr 98 2nd Qtr 98 3rd Qtr 98 4th Qtr 98 1st Qtr 99 2nd Qtr 99 3rd Qtr 99 4th Qtr 99
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$32,049 $32,458 $32,931 $33,163 $34,021 $36,703 $37,954 $39,325
<CAPTION>
RETURN ON EQUITY
1st Qtr 96 2nd Qtr 96 3rd Qtr 96 4th Qtr 96 1st Qtr 97 2nd Qtr 97 3rd Qtr 97 4th Qtr 97
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ROE 11.81 12.16 12.35 12.64 13.17 12.28 12.7 13.9
1st Qtr 98 2nd Qtr 98 3rd Qtr 98 4th Qtr 98 1st Qtr 99 2nd Qtr 99 3rd Qtr 99
<S> <C> <C> <C> <C> <C> <C> <C>
14.11 14.02 13.86 13.91 14.28 15.42 16.2
</TABLE>
<PAGE>
NET INCOME
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Net Income
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4Q93 1Q94 2Q94 3Q94 4Q94 1Q95 2Q95 3Q95
2.1 2.5 2.6 2.9 3.4 3.6 3.7 4.4
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4Q95 1Q96 2Q96 3Q96 4Q96 1Q97 2Q97 3Q97 4Q97
4.8 5.1 6.4 6.8 5.4 7.7 7.9 8 8.7
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1Q98 2Q98 3Q98 4Q98 1Q99 2Q99 3Q99 4Q99
9 9.3 9.7 10.1 10.3 10.9 11.3 11.5
</TABLE>
<PAGE>
GROWTH IN EARNINGS PER SHARE
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
$0.88 $1.02 $1.30* $1.47 $1.67
*exclusive of merger related expenses
<PAGE>
RETURN ON COMMON EQUITY
[BAR GRAPH APPEARS HERE]
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
9.6% 10.9% 11.4% 13.3% 14.0% 14.6%
<PAGE>
EFFICIENCY RATIO
[BAR GRAPH APPEARS HERE]
1996 1997 1998 1999*
---- ---- ---- ----
PBKS 66.76 65.3 65.8 63.4
PEER 57.72 56.72 55.91 55.74
Branch Expansion
1996: 44 Branches
1997: 66 Branches
1998: 68 Branches
1999: 83 Branches
* Note: Peer through Sept. 1999
<PAGE>
CONSERVATIVE BALANCE
SHEET MANAGEMENT
. Strong internal growth
. Acquired loan strategy
. Alternate Investment
. Seasoned staff
. Broker/dealer relationships
. Strong returns
<PAGE>
AVERAGE ASSETS
($ in billions)
[BAR GRAPH APPEARS HERE]
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
$2.96 $3.32 $3.65 $4.35 $4.91
Annualized growth rate 12.8%
<PAGE>
AVERAGE LOANS
($ in billions)
[BAR GRAPH APPEARS HERE]
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
$1.82 $2.02 $2.44 $2.88 $3.26
Annualized growth rate 13.2%
<PAGE>
CORE DEPOSITS
($ in billions)
[BAR GRAPH APPEARS HERE]
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
$2.05 $2.28 $2.74 $3.41 $3.81
Annualized growth rate 11.7%
<PAGE>
INVESTMENT HIGHLIGHTS
. Valuable franchise in highly attractive markets
. Enhancing franchise value while improving profitability
. Well positioned in markets served
. Highly experienced senior management team
. Enhancing shareholder value
. Asset quality
<PAGE>
PROVIDENT BANKSHARES
----------------------
CORPORATION
