- The Washington Times - Monday, December 19, 2005

Provident Bankshares is making an aggressive move into the Washington banking market with a $3 million advertising budget and a multimedia campaign that begins early next year.

The Baltimore banking company tries to focus on the market for the midsized consumer and commercial loans sometimes overlooked by larger banks.

Last week, Provident announced it hired Eisner Communications as its advertising agency, replacing Trahan, Burden & Charles after 20 years.

The television, radio and print ads are scheduled to run in Washington, Baltimore and Richmond.

“Those are our three main markets,” said Lillian Kilroy, Provident’s chief marketing officer. “They are extremely attractive markets for financial institutions.”

Provident’s prospects for success in Washington received a boost April 30 when it acquired regional bank Southern Financial for $335.1 million, giving it an additional 33 branches in the District and Virginia. Provident operates with 153 branches.

Previously, Provident’s branches were located primarily in the Baltimore area and suburban Washington. It had been trying to expand throughout metropolitan Washington and Virginia since 1997.

“It’s not completely new ground for us,” Mrs. Kilroy said. “What’s different is that with the acquisition of Southern, we got to critical mass in terms of the number of branches we have in those areas. It’s difficult to build a large consumer franchise from a limited network. Now we have a much broader, deeper network.”

Shares of Provident Bankshares, the holding company for Provident Bank, have more than doubled in value in the past five years from $16.74 per share in December 2000 to $34.70 yesterday.

The company earned net income of $20 million (60 cents per diluted share) in the third quarter of 2005 on revenue of $80.4 million. Earnings were up 11 percent from the $18 million (54 cents) Provident earned in the third quarter of 2004.

It operates with about 2,000 employees in Washington, Virginia, Maryland and Pennsylvania and controls about $6.5 billion in assets.

Its stock, listed as PBKS on the Nasdaq Stock Market, closed down 34 cents, or 1 percent, yesterday to $34.70 per share.

In the past 52 weeks, it has ranged from a high of $36.72 per share to a low of $28.85 per share.

Banking industry analysts said Provident will need to use its assets well to compete more successfully in the Washington market.

“There’s a lot of stuff going on in that market, which is just going to make the competition that much more fierce,” said Christopher Muir, banking industry analyst for Standard & Poor’s credit-rating service. He does not own Provident Bankshares stock.

Other Washington-area banks with a retail style of banking include Commerce Bank, BB&T; and SunTrust Bank, all of which have strong records for growth.

Jeff Davis, an analyst for FTN Midwest Securities, an investment banking firm in Nashville, Tenn., said Provident stands a good chance for continued growth in the Washington, Baltimore and Richmond areas.

“It is a large, community bank that can be responsive, but it’s not a bureaucratic slow-moving megabank,” he said. Mr. Davis does not own Provident stock.

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