Provident's stock hits new high 'Bandits' are busy 2 days in a row


Provident Bankshares Corp.'s stock climbed to a record high yesterday for the second day in a row on unusually heavy trading.

The stock closed at $33.75 a share, up 87 cents on volume of 437,400 shares -- the kind of volume more often seen in the stock of larger banks, such as NationsBank Corp.

The spurt followed a $2.25 increase Thursday in the Baltimore-based banking company's stock price.

Analysts attributed the two-day surge to traders known as "SOES bandits," who made high-speed trades that drove up the stock's price.

At one point yesterday, Provident's stock reached $35.312 a share.

"The bandits were hitting it like crazy," said Michael J. Coiro, an analyst with Johnston, Lemon & Co.

John Boo, a senior vice president of Nasdaq trading at Ferris, Baker Watts Inc., said he made a "couple dozen" trades for bandits Thursday and yesterday.

"It was absolutely incredible. They were all over it," Mr. Boo said.

SOES bandits use Nasdaq's Small Order Execution System to (( make quick trades.

The system was designed in 1987 to help individuals make trades of up to 1,000 shares without having to wait for institutional traders to complete their transactions.

But the bandits shoot to the head of the trading line by using the system to make multiple trades at 1,000 shares.

The bandits hold the shares for about a minute, which makes the stock more volatile, traders explained.

Peter M. Martin, Provident's president and chief operating officer, couldn't explain the strength in the stock.

"I don't have anything to attach to it," he said. "There is nothing happening, no public announcements."

Provident, with its 42 offices and $2.5 billion in assets, is viewed -- by many analysts as an acquisition target that could fetch $38 to $40 a share.

The increase in its share price closely follows the merger agreement of Philadelphia-based CoreStates Financial Corp. and Meridian Bancorp Inc. in a $3.2 million deal.

"Maybe that has caused a ripple," Mr. Martin said.

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