Market Overview

Sandy Spring Bancorp Reports Net Income of $11.0 Million for the Third Quarter

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OLNEY, Md., Oct. 22, 2015 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq: SASR) the parent company of Sandy Spring Bank, today reported net income for the third quarter of 2015 of $11.0 million ($0.45 per diluted share) compared to net income of $11.1 million ($0.44 per diluted share) for the third quarter of 2014 and net income of $10.3 million ($0.42 per diluted share) for the second quarter of 2015.

For the nine months ended September 30, 2015, net income was $32.6 million ($1.31 per diluted share) compared to net income of $29.1 million ($1.16 per diluted share) for the same period of the prior year.

"Our core financial results for the third quarter were solid, as loan growth continued to fuel higher net interest income. Our growth in all three major loan portfolios has been significant given the level of competition in the marketplace and the state of the economy," said Daniel J. Schrider, President and Chief Executive Officer.

"A stable net interest margin, our strong capital position, diverse revenue stream, and consistent credit quality were key drivers of our financial performance. These results provide evidence of our continuing dedication to provide a consistent and valuable client experience in all facets of our franchise," said Schrider.

Third Quarter Highlights: 

  • Total loans increased 15% compared to the third quarter of 2014 and were up 4% compared to the second quarter of 2015. This increase was driven primarily by year-over-year growth of 19% in the commercial loan portfolio.   
     
  • Combined noninterest-bearing and interest-bearing transaction account balances increased 9% to $1.6 billion at September 30, 2015 as compared to $1.5 billion at September 30, 2014.
     
  • The provision for loan and lease losses for the third quarter of 2015 was a charge of $1.7 million compared to a credit of $0.2 million for the third quarter of 2014 and a charge of $1.2 million for the second quarter of 2015.  
     
  • The net interest margin was 3.43% for the third quarter of 2015, compared to 3.42% for both the third quarter of 2014 and the second quarter of 2015.
     
  • The non-GAAP efficiency ratio improved to 59.73% for the current quarter from 61.09% for the prior year quarter due to stable expense levels and higher net interest income resulting from strong loan growth over the prior year quarter.
     
  • During the third quarter of 2015, the Company repurchased 153,460 shares of its common stock at an average price of $25.76 per share as part of its existing share repurchase program. For the year-to-date, the Company has repurchased 728,932 shares at an average price of $25.88 per share. 

             
Review of Balance Sheet and Credit Quality

Total assets grew 9% to $4.6 billion at September 30, 2015 compared to $4.2 billion at September 30, 2014.  This growth was driven by a 15% increase in the loan portfolio as total loans and leases ended the period at $3.4 billion. 

At September 30, 2015, combined noninterest-bearing and interest-bearing checking account balances, a primary driver of multiple-product banking relationships with clients, increased 9% compared to balances at September 30, 2014. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers increased 10% compared to September 30, 2014.

Tangible common equity totaled $437 million at September 30, 2015 compared to $434 million at September 30, 2014. The ratio of tangible common equity to tangible assets decreased to 9.66% at September 30, 2015 from 10.42% at September 30, 2014 due primarily to the growth in assets and continued share repurchases. Dividends per common share were $0.66 per share for the first nine months of 2015 compared to $0.56 per common share for the first nine months of 2014, an 18% increase.  At September 30, 2015, the Company had a total risk-based capital ratio of 14.27%, a common equity tier 1 risk-based capital ratio of 12.20%, a tier 1 risk-based capital ratio of 13.17% and a tier 1 leverage ratio of 10.65%.

Non-performing loans totaled $36.9 million at September 30, 2015 compared to $43.7 million at September 30, 2014 and $37.3 million at June 30, 2015. The level of non-performing loans to total loans decreased to 1.08% at September 30, 2015 compared to 1.47% at September 30, 2014 due to growth in the overall loan portfolio. The decrease in non-performing loans at September 30, 2015 compared to June 30, 2015 was driven primarily by payoffs and charge-offs on several such loans that exceeded loans added to non-performing status during the quarter.

Loan charge-offs, net of recoveries, totaled $0.8 million for the third quarter of 2015, compared to net loan charge-offs of $0.2 million for the third quarter of 2014. The allowance for loan and lease losses represented 1.16% of outstanding loans and leases and 107% of non-performing loans at September 30, 2015 compared to 1.26% of outstanding loans and leases and 86% of non-performing loans at September 30, 2014. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the third quarter of 2015 increased 8% compared to the third quarter of 2014. The net interest margin was 3.43% for the third quarter of 2015 compared to 3.42% for the third quarter of 2014. 

The provision for loan and lease losses was a charge of $1.7 million for the third quarter of 2015 compared to a credit of $0.2 million for the third quarter of 2014 and a charge of $1.2 million for the second quarter of 2015. The majority of the current quarter's charge reflects the growth in the loan portfolio.

Non-interest income decreased 2% to $12.4 million for the third quarter of 2015 compared to $12.6 million for the third quarter of 2014.  The decrease in non-interest income for the quarter compared to the prior year quarter was due primarily to decreases in service charges on deposit accounts and other non-interest income, which were somewhat offset by an increase in insurance agency commissions.

Non-interest expenses increased to $29.6 million for the third quarter of 2015 compared to $28.6 million in the third quarter of 2014. The current quarter included increases in salaries and benefits. The non-GAAP efficiency ratio was 59.73% for the third quarter of 2015 compared to 61.09% for the third quarter of 2014.

Net interest income for the first nine months of 2015 increased 6% compared to the first nine months of 2014 due primarily to an increase in average loans. The net interest margin was 3.43% for the first nine months of 2015 compared to 3.46% for the first nine months of 2014. 

The provision for loan and lease losses was a charge of $3.5 million for the first nine months of 2015 compared to a credit of $1.0 million for the first nine months of 2014. The change in the provision for the current year-to-date period is primarily due to the growth in the loan portfolio over the prior year period.

Non-interest income increased 6% to $37.7 million for the first nine months of 2015 compared to $35.5 million for the first nine months of 2014.  This increase was driven by increases in income from wealth management and mortgage banking due primarily to higher mortgage origination volumes. Other non-interest income increased due to higher gains on sales of SBA loans.

Non-interest expenses decreased 2% to $88.4 million for the first nine months of 2015 compared to $90.3 million for the first nine months of 2014. Excluding accrued litigation expenses, non-interest expenses increased 5% over the prior year period. The current year-to-date included increases in salaries, pension costs and health benefits and other non-interest expenses.  The non-GAAP efficiency ratio was 60.41% for the first nine months of 2015 compared to 61.32% for the first nine months of 2014.

Conference Call

The Company's management will host a conference call to discuss its third quarter results today at 2:00 P.M. (ET).  A live Web cast of the conference call is available through the Investor Relations' section of the Sandy Spring Web site at www.sandyspringbank.com.  Participants may call 1-866-235-9910. A password is not necessary.  Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call.  An internet-based replay will be available at the Web site until 9:00 am (ET) November 6, 2015.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10072996.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring Bank offers a broad range of commercial banking, retail banking, mortgage and trust services throughout central Maryland, Northern Virginia, and the greater Washington, D.C. market. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. With $4.6 billion in assets, the bank operates 44 community offices and six financial centers across the region. Visit www.sandyspringbank.com for more information.

Forward-Looking Statements

Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release.  These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan and lease losses; assessments of market risk; and statements of the ability to achieve financial and other goals.

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project" and other similar words and expressions.  Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time.  Forward-looking statements speak only as of the date they are made.  Sandy Spring Bancorp does not assume any duty and does not undertake to update its forward-looking statements.  Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Sandy Spring Bancorp anticipated in its forward-looking statements and future results could differ materially from historical performance.

Sandy Spring Bancorp's forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company's loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company's ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties.  Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2014, including in the Risk Factors section of that report, and in its other SEC reports.  Sandy Spring Bancorp's forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC's Web site at www.sec.gov.


Sandy Spring Bancorp, Inc. and Subsidiaries              
FINANCIAL HIGHLIGHTS - UNAUDITED              
               
  Three Months Ended    Nine Months Ended   
  September 30, %  September 30, % 
(Dollars in thousands, except per share data)  2015   2014  Change   2015   2014  Change 
Results of Operations:              
  Net interest income $   35,116   $  32,420   8 % $   102,422   $  96,321   6 %
  Provision (credit) for loan and lease losses    1,706    (192) n.m       3,521    (1,016) n.m   
  Non-interest income    12,390      12,590   (2)     37,658      35,533   6  
  Non-interest expenses    29,630      28,632   3      88,351      90,322   (2) 
  Income before income taxes    16,170      16,570   (2)     48,208      42,548   13  
  Net income     10,995      11,142   (1)     32,553      29,052   12  
               
  Pre-tax pre-provision income  $   18,031   $  16,614   9   $   52,246   $  47,896   9  
               
  Return on average assets    0.96  %   1.05 %      0.98  %   0.93 %  
  Return on average common equity    8.41  %   8.54 %      8.39  %   7.60 %  
  Net interest margin    3.43  %   3.42 %      3.43  %   3.46 %  
  Efficiency ratio - GAAP basis  (1)    62.37  %   63.61 %      63.07  %   68.50 %  
  Efficiency ratio - Non-GAAP basis  (1)    59.73  %   61.09 %      60.41  %   61.32 %  
               
Per share data:              
  Basic net income $   0.45   $  0.44   2 % $   1.32   $  1.16   14 %
  Diluted net income $   0.45   $  0.44   2   $   1.31   $  1.16   13  
  Average fully diluted shares   24,602,817      25,151,582   (2)    24,779,010     25,135,078   (1) 
  Dividends declared per share $   0.22   $  0.20   10   $   0.66   $  0.56   18  
  Book value per share    21.44    20.83   3      21.44      20.83   3  
  Tangible book value per share    17.91    17.31   3      17.91      17.31   3  
  Outstanding shares   24,424,944      25,076,794   (3)    24,424,944     25,076,794   (3) 
               
Financial Condition at period-end:              
  Investment securities $   862,409   $  950,869   (9)% $   862,409   $  950,869   (9)%
  Loans and leases    3,412,439      2,975,912   15      3,412,439      2,975,912   15  
  Interest-earning assets    4,339,375      3,976,731   9      4,339,375      3,976,731   9  
  Assets    4,611,034      4,248,731   9      4,611,034      4,248,731   9  
  Deposits    3,275,668      3,028,788   8      3,275,668      3,028,788   8  
  Interest-bearing liabilities    2,973,747      2,706,623   10      2,973,747      2,706,623   10  
  Stockholders' equity    523,594      522,404    -       523,594      522,404    -   
               
Capital ratios:              
  Tier 1 leverage  (4)    10.65  % 11.36 %      10.65  %   11.36 %  
  Tier 1 capital to risk-weighted assets  (4)    13.17  % 14.52 %      13.17  %   14.52 %  
  Total regulatory capital to risk-weighted assets  (4)    14.27  % 15.68 %      14.27  %   15.68 %  
  Common equity tier 1 capital to risk-weighted assets  (4)    12.20  %n.a.  %      12.20  % n.a.    %  
  Tangible common equity to tangible assets  (2)    9.66  % 10.42 %      9.66  %   10.42 %  
  Average equity to average assets    11.43  % 12.26 %      11.66  %   12.28 %  
               
Credit quality ratios:              
  Allowance for loan and lease losses to loans and leases    1.16  %   1.26 %      1.16  %   1.26 %  
  Non-performing loans to total loans    1.08  %   1.47 %      1.08  %   1.47 %  
  Non-performing assets to total assets    0.86  %   1.07 %      0.86  %   1.07 %  
  Allowance for loan and lease losses to non-performing loans   107.44  %   86.03 %      107.44  %   86.03 %  
  Annualized net charge-offs to average loans and leases  (3)   0.09  %   0.03 %      0.07  %   0.01 %  
               
(1) The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization from non-interest expense; securities gains (losses) from non-interest income; OTTI; and the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights. 
(2) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets and other comprehensive gains (losses).  See the Reconciliation Table included with these Financial Highlights. 
(3) Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale. 
(4) Estimated ratio at September 30, 2015 
               

 

Sandy Spring Bancorp, Inc. and Subsidiaries         
RECONCILIATION TABLE - UNAUDITED         
          
  Three Months Ended Nine Months Ended 
  September 30, September 30, 
(Dollars in thousands)  2015   2014   2015   2014  
Pre-tax pre-provision income:         
Net income $   10,995   $  11,142  $   32,553   $  29,052  
Plus non-GAAP adjustment:         
Litigation expenses    155      236     517      6,364  
Income taxes    5,175      5,428     15,655      13,496  
Provision (credit) for loan and lease losses    1,706      (192)    3,521      (1,016) 
Pre-tax pre-provision income $   18,031   $  16,614  $   52,246   $  47,896  
          
Efficiency ratio - GAAP basis:         
Non-interest expenses  $   29,630   $  28,632  $   88,351   $  90,322  
          
Net interest income plus non-interest income $   47,506   $  45,010  $   140,080   $  131,854  
          
Efficiency ratio - GAAP basis  62.37%  63.61%  63.07%  68.50% 
          
          
Efficiency ratio - Non-GAAP basis:         
Non-interest expenses  $   29,630   $  28,632  $   88,351   $  90,322  
Less non-GAAP adjustment:         
Amortization of intangible assets    107      115     320      709  
Litigation expenses    155      236     517      6,364  
Non-interest expenses -  as adjusted $   29,368   $  28,281  $   87,514   $  83,249  
          
Net interest income plus non-interest income  $   47,506   $45,010  $   140,080   $  131,854  
Plus non-GAAP adjustment:         
Tax-equivalent income    1,663      1,296     4,816      3,909  
Less non-GAAP adjustments:         
Securities gains    1      8     20      8  
Net interest income plus non-interest income - as adjusted $   49,168   $  46,298  $   144,876   $  135,755  
          
Efficiency ratio - Non-GAAP basis  59.73%  61.09%  60.41%  61.32% 
          
Tangible common equity ratio:         
Total stockholders' equity $   523,594   $  522,404  $   523,594   $  522,404  
Accumulated other comprehensive income    (1,801)    (3,632)    (1,801)    (3,632) 
Goodwill    (84,171)    (84,171)    (84,171)    (84,171) 
Other intangible assets, net    (190)  (622)    (190)  (622) 
Tangible common equity $   437,432   $  433,979  $   437,432   $  433,979  
          
Total assets $  4,611,034   $  4,248,731  $   4,611,034   $  4,248,731  
Goodwill    (84,171)    (84,171)    (84,171)    (84,171) 
Other intangible assets, net    (190)    (622)    (190)    (622) 
Tangible assets $  4,526,673   $  4,163,938  $   4,526,673   $  4,163,938  
          
Tangible common equity ratio  9.66%  10.42%  9.66%  10.42% 
          
Outstanding common shares    24,424,944      25,076,794     24,424,944      25,076,794  
Tangible book value per common share $   17.91   $17.31  $   17.91   $17.31  
          

 

Sandy Spring Bancorp, Inc. and Subsidiaries       
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED       
        
  September 30, December 31, September 30, 
(Dollars in thousands)  2015   2014   2014  
Assets       
Cash and due from banks $   42,322   $  52,804  $  48,665  
Federal funds sold    472      473     474  
Interest-bearing deposits with banks    53,637      42,940     42,820  
Cash and cash equivalents    96,431      96,217     91,959  
              
Residential mortgage loans held for sale (at fair value)     10,418      10,512     6,656  
Investments available-for-sale (at fair value)    607,619      672,209     692,107  
Investments held-to-maturity -- fair value of $220,223, $222,260 and $223,130 at September 30, 2015, December 31, 2014 and September 30, 2014, respectively    216,642      219,973     221,690  
Other equity securities    38,148      41,437     37,072  
Total loans and leases    3,412,439      3,127,392     2,975,912  
Less: allowance for loan and lease losses    (39,661)    (37,802)    (37,574) 
Net loans and leases  3,372,778     3,089,590    2,938,338  
              
Premises and equipment, net    52,573      49,402     45,841  
Other real estate owned    2,619      3,195     1,762  
Accrued interest receivable    13,102      12,634     12,277  
Goodwill    84,171      84,171     84,171  
Other intangible assets, net     190      510     622  
Other assets    116,343      117,282     116,236  
Total assets $   4,611,034   $  4,397,132  $  4,248,731  
        
Liabilities       
Noninterest-bearing deposits $1,068,299   $  993,737  $  986,549  
Interest-bearing deposits  2,207,369    2,072,772   2,042,239  
Total deposits  3,275,668    3,066,509   3,028,788  
              
Securities sold under retail repurchase agreements and federal funds purchased    121,378      74,432     71,384  
Advances from FHLB    610,000      655,000     558,000  
Subordinated debentures    35,000      35,000     35,000  
Accrued interest payable and other liabilities    45,394      44,440     33,155  
Total liabilities  4,087,440    3,875,381    3,726,327  
        
Stockholders' Equity       
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,424,944, 25,044,877 and 25,076,794 at September 30, 2015, December 31, 2014 and September 30, 2014, respectively    24,425      25,045     25,077  
Additional paid in capital    178,429      194,647     194,899  
Retained earnings    318,939      302,882     298,796  
Accumulated other comprehensive income (loss)    1,801      (823)    3,632  
Total stockholders' equity    523,594      521,751     522,404  
Total liabilities and stockholders' equity $   4,611,034   $  4,397,132  $  4,248,731  
        

 

Sandy Spring Bancorp, Inc. and Subsidiaries          
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED        
           
  Three Months Ended Nine Months Ended  
 September 30,September 30,  
(Dollars in thousands, except per share data)  2015   2014   2015   2014   
Interest Income:          
Interest and fees on loans and leases $   34,484   $  31,030  $   99,654   $  91,470   
Interest on loans held for sale    214      81     422      211   
Interest on deposits with banks    25      24     69      66   
Interest and dividends on investment securities:          
Taxable    3,597      3,712     11,024      11,704   
Exempt from federal income taxes    1,996      2,303     6,068      6,940   
Interest on federal funds sold    1      -     1      -   
Total interest income    40,317      37,150     117,238      110,391   
Interest Expense:          
Interest on deposits    1,632      1,208     4,193      3,585   
Interest on retail repurchase agreements and federal funds purchased    69      42     179      117   
Interest on advances from FHLB    3,272      3,258     9,774      9,709   
Interest on subordinated debt    228      222     670      659   
Total interest expense    5,201      4,730     14,816      14,070   
Net interest income    35,116      32,420     102,422      96,321   
Provision (credit) for loan and lease losses    1,706      (192)    3,521      (1,016)  
Net interest income after provision (credit) for loan and lease losses    33,410      32,612     98,901      97,337   
Non-interest Income:          
Investment securities gains    1      8     20      8   
Service charges on deposit accounts    1,936      2,226     5,657      6,287   
Mortgage banking activities    566      596     2,566      1,482   
Wealth management income    4,963      4,974     15,040      14,181   
Insurance agency commissions    1,648      1,410     4,147      4,011   
Income from bank owned life insurance    618      611     1,937      1,817   
Bank card fees    1,198      1,148     3,475      3,295   
Other income    1,460      1,617     4,816      4,452   
Total non-interest income    12,390      12,590     37,658      35,533   
Non-interest Expenses:          
Salaries and employee benefits    17,733      16,765     52,566      49,594   
Occupancy expense of premises    3,086      3,032     9,748      9,778   
Equipment expenses    1,600      1,337     4,463      3,855   
Marketing    688      744     2,161      2,088   
Outside data services    1,329      1,231     3,692      3,663   
FDIC insurance    565      594     1,850      1,687   
Amortization of intangible assets    107      115     320      709   
Litigation expenses    155      236     517      6,364   
Other expenses    4,367      4,578     13,034      12,584   
Total non-interest expenses    29,630      28,632     88,351      90,322   
Income before income taxes    16,170      16,570     48,208      42,548   
Income tax expense    5,175      5,428     15,655      13,496   
Net income $   10,995   $  11,142  $   32,553   $  29,052   
           
Net Income Per Share Amounts:          
Basic net income per share $   0.45   $  0.44  $   1.32   $  1.16   
Diluted net income per share $   0.45   $  0.44  $   1.31   $  1.16   
Dividends declared per share $   0.22   $  0.20  $   0.66   $  0.56   
           

 

Sandy Spring Bancorp, Inc. and Subsidiaries         
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED       
          
   2015   2014 
(Dollars in thousands, except per share data) Q3Q2Q1 Q4Q3Q2Q1
Profitability for the Quarter:         
Tax-equivalent interest income $   41,980  $40,438 $  39,343  $  39,258 $  38,446 $  38,322 $  37,532 
Interest expense    5,201     4,916    4,699     4,748    4,730    4,682    4,658 
Tax-equivalent net interest income    36,779     35,522    34,644     34,510    33,716    33,640    32,874 
Tax-equivalent adjustment    1,663     1,589    1,271     1,283    1,296    1,331    1,282 
Provision for loan and lease losses    1,706     1,218    597     853    (192)   158    (982)
Non-interest income    12,390     12,109    13,159     11,338    12,590    11,694    11,249 
Non-interest expenses    29,630     29,477    29,244     30,478    28,632    34,141    27,549 
Income before income taxes    16,170     15,347    16,691     13,234    16,570    9,704    16,274 
Income tax expense     5,175     5,014    5,466     4,086    5,428    2,722    5,346 
Net income  $   10,995  $  10,333 $  11,225  $  9,148 $  11,142 $  6,982 $  10,928 
Financial Performance:         
Pre-tax pre-provision income $   18,031  $  16,727 $  17,488  $  14,242 $  16,614 $  15,990 $  15,292 
Return on average assets  0.96% 0.93% 1.04%  0.85% 1.05% 0.67% 1.08%
Return on average common equity  8.41% 8.02% 8.73%  6.93% 8.54% 5.47% 8.80%
Net interest margin  3.43% 3.42% 3.44%  3.44% 3.42% 3.48% 3.47%
Efficiency ratio - GAAP basis (1)  62.37% 64.02% 62.85%  68.39% 63.61% 77.59% 64.31%
Efficiency ratio - Non-GAAP basis (1)  59.73% 61.35% 60.53%  65.89% 61.09% 61.30% 61.60%
Per Share Data:         
Basic net income per share $   0.45  $0.42 $  0.45  $  0.37 $  0.44 $  0.28 $  0.44 
Diluted net income per share $   0.45  $0.42 $  0.45  $  0.36 $  0.44 $  0.28 $  0.43 
Average fully diluted shares  24,602,817   24,689,762  25,048,576   25,151,831  25,151,582  25,127,036  25,124,206 
Dividends declared per common share $   0.22  $0.22 $  0.22  $  0.20 $  0.20 $  0.18 $  0.18 
Non-interest Income:         
Securities gains (losses) $   1  $19 $    -   $  (3)$  8 $  - $  - 
Service charges on deposit accounts    1,936     1,839    1,882     2,135    2,226    2,089    1,972 
Mortgage banking activities    566     822    1,178     512    596    570    316 
Wealth management income    4,963     5,161    4,916     4,905    4,974    4,741    4,466 
Insurance agency commissions    1,648     881    1,618     985    1,410    961    1,640 
Income from bank owned life insurance    618     606    713     627    611    608    598 
Bank card fees    1,198     1,220    1,057     1,144    1,148    1,169    978 
Other income    1,460     1,561    1,795     1,033    1,617    1,556    1,279 
Total Non-interest Income $   12,390  $12,109 $  13,159  $  11,338 $  12,590 $  11,694 $  11,249 
Non-interest Expense:         
Salaries and employee benefits $   17,733  $17,534 $  17,299  $  16,793 $  16,765 $  16,474 $  16,355 
Occupancy expense of premises    3,086     3,173    3,489     3,914    3,032    3,274    3,472 
Equipment expenses    1,600     1,490    1,373     1,333    1,337    1,262    1,256 
Marketing    688     942    531     838    744    802    542 
Outside data services    1,329     1,102    1,261     1,284    1,231    1,216    1,216 
FDIC insurance    565     654    631     615    594    573    520 
Amortization of intangible assets    107     106    107     112    115    224    370 
Litigation expenses    155     162    200     155    236    6,128    - 
Professional fees    1,089     1,199    1,209     1,246    1,092    1,292    914 
Other real estate owned expenses    48     4    10     2    40    9    - 
Other expenses    3,230     3,111    3,134     4,186    3,446    2,887    2,904 
Total Non-interest Expense $   29,630  $29,477 $  29,244  $  30,478 $  28,632 $  34,141 $  27,549 
          
(1) The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional, efficiency ratio - non-GAAP basis excludes intangible asset amortization from non-interest expense; excludes securities gains; OTTI losses from non-interest income; and adds the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights. 
          

 

Sandy Spring Bancorp, Inc. and Subsidiaries          
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED        
           
   2015   2014  
(Dollars in thousands) Q3Q2Q1 Q4Q3Q2Q1 
Balance Sheets at Quarter End:          
Residential mortgage loans $   773,889  $  744,195 $  728,858  $  717,886 $  698,925 $  668,536 $  640,939  
Residential construction loans    139,492     137,134  130,321   136,741  141,883  149,321  143,109  
Commercial ADC loans    239,160     223,103  203,731   205,124  194,666  178,972  163,343  
Commercial investor real estate loans    710,694     694,179  668,931   640,193  575,984  577,813  573,634  
Commercial owner occupied real estate loans    680,601     643,973  618,846   611,061  584,964  581,795  582,472  
Commercial business loans    423,855     409,795  385,452   390,781  368,611  357,472  348,180  
Leasing    19     21  36   54  156  260  439  
Consumer loans    444,729     436,465  428,531   425,552  410,723  396,775  380,697  
Total loans and leases  3,412,439   3,288,865  3,164,706   3,127,392  2,975,912  2,910,944  2,832,813  
Allowance for loan and lease losses  (39,661) (38,713) (37,475)  (37,802) (37,574) (37,959) (38,026) 
Loans held for sale    10,418     19,445  13,899   10,512  6,656  9,042  3,079  
Investment securities  862,409   878,284  912,565   933,619  950,869  980,530  997,584  
Interest-earning assets  4,339,375   4,222,667  4,125,549   4,114,936  3,976,731  3,945,643  3,891,223  
Total assets  4,611,034   4,507,367  4,401,380   4,397,132  4,248,731  4,234,342  4,168,998  
Noninterest-bearing demand deposits  1,068,299   1,092,413  1,017,566   993,737  986,549  984,700  882,169  
Total deposits  3,275,668   3,247,346  3,109,892   3,066,509  3,028,788  3,038,670  2,959,195  
Customer repurchase agreements    121,378     111,817  101,640   74,432  71,384  72,917  67,038  
Total interest-bearing liabilities  2,973,747   2,851,750  2,818,966   2,837,204  2,706,623  2,698,887  2,748,064  
Total stockholders' equity  523,594   518,873  521,768   521,751  522,404  517,269  510,386  
Quarterly Average Balance Sheets:          
Residential mortgage loans $   754,007  $  734,382 $  724,248  $  707,719 $  682,013 $  652,232 $  627,944  
Residential construction loans    134,448     137,216    132,456     141,890    147,750    145,968    134,261  
Commercial ADC loans    227,545     218,341    206,105     201,020    180,293    168,063    162,544  
Commercial investor real estate loans    704,068     668,883    645,163     607,050    577,851    575,283    557,168  
Commercial owner occupied real estate loans    656,337     624,407    611,722     594,634    585,014    579,953    584,155  
Commercial business loans    413,300     398,510    383,111     367,872    367,203    348,597    349,734  
Leasing    19     28    44     114    206    352    567  
Consumer loans    441,740     434,011    425,434     417,910    404,062    390,076    377,822  
Total loans and leases    3,331,464     3,215,778    3,128,283     3,038,209    2,944,392    2,860,524    2,794,195  
Loans held for sale    21,070     14,075  7,053   9,952  7,518  6,940  5,216  
Investment securities  869,461   898,237  925,683   942,782  965,206  991,135  1,012,701  
Interest-earning assets  4,261,939   4,162,963  4,097,648   4,022,051  3,954,858  3,893,843  3,845,513  
Total assets  4,537,142   4,438,670  4,372,988   4,292,237  4,220,084  4,157,559  4,105,225  
Noninterest-bearing demand deposits  1,063,500   1,023,042  986,688   1,000,285  956,830  899,287  825,968  
Total deposits  3,263,993   3,128,562  3,056,186   3,063,591  3,036,686  2,965,329  2,876,641  
Customer repurchase agreements    121,127     106,179    90,020     78,746    73,046    68,880    62,864  
Total interest-bearing liabilities  2,906,348   2,852,414  2,817,575   2,731,791  2,711,206  2,716,537  2,749,459  
Total stockholders' equity  518,619   516,940  521,346   524,063  517,534  511,738  503,851  
Financial Measures:          
Average equity to average assets  11.43% 11.65% 11.92%  12.21% 12.26% 12.31% 12.27% 
Investment securities to earning assets  19.87% 20.80% 22.12%  22.69% 23.91% 24.85% 25.64% 
Loans to earning assets  78.64% 77.89% 76.71%  76.00% 74.83% 73.78% 72.80% 
Loans to assets  74.01% 72.97% 71.90%  71.12% 70.04% 68.75% 67.95% 
Loans to deposits  104.18% 101.28% 101.76%  101.99% 98.25% 95.80% 95.73% 
Capital Measures:          
Tier 1 leverage  (1)  10.65% 10.83% 11.00%  11.26% 11.36% 11.37% 11.43% 
Tier 1 capital to risk-weighted assets  (1)  13.17% 13.54% 14.01%  13.95% 14.52% 14.48% 14.64% 
Total regulatory capital to risk-weighted assets  (1)  14.27% 14.65% 15.12%  15.06% 15.68% 15.66% 15.85% 
Common equity tier 1 capital to risk-weighted assets  (1)  12.20% 12.53% 14.01% n.a.  n.a.  n.a.  n.a.   
Book value per share $   21.44  $  21.12 $  21.10  $  20.83 $  20.83 $  20.63 $  20.38  
Outstanding shares    24,424,944     24,562,471    24,733,868     25,044,877    25,076,794    25,069,700    25,043,482  
(1) Estimated ratio at September 30, 2015          
           

 

Sandy Spring Bancorp, Inc. and Subsidiaries               
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED             
                
   2015   2014  
(Dollars in thousands) September 30, June 30, March 31, December 31, September 30, June 30,  March 31, 
Non-Performing Assets:               
Loans and leases 90 days past due:               
Commercial business $  -  $  -  $    -   $  -  $  -  $  1  $  -  
Commercial real estate:               
Commercial AD&C    -     -     -      -     -     -     -  
Commercial investor real estate    -     -     -      -     -     -     -  
Commercial owner occupied real estate    -     -     -      -     649     -     -  
Leasing    1     2     -      -     -     -     -  
Consumer    -     7     -      -     6     3     -  
Residential real estate:               
Residential mortgage    -     -     -      -     -     -     -  
Residential construction    -     -     -      -     -     -     -  
Total loans and leases 90 days past due    1      9     -     -     655     4     -  
Non-accrual loans and leases:               
Commercial business    3,881      3,285     4,166     3,184     4,151     4,309     3,272  
Commercial real estate:               
Commercial AD&C    194      194     1,363     2,464     3,792     3,739     4,133  
Commercial investor real estate    8,609      10,023     10,083     8,156     8,210     6,731     7,284  
Commercial owner occupied real estate    7,932      8,423     8,974     8,941     10,742     10,868     7,150  
Leasing    -       -     -      -     -     -     -  
Consumer    1,621      1,214     1,962     1,668     1,830     2,058     2,115  
Residential real estate:               
Residential mortgage    7,488      7,780     3,235     3,012     4,417     4,501     5,025  
Residential construction    770      780     788     1,105     2,497     2,143     2,304  
Total non-accrual loans and leases    30,495      31,699     30,571     28,530     35,639     34,349     31,283  
Total restructured loans - accruing    6,419      5,620     5,446     5,497     7,382     7,364     7,411  
Total non-performing loans and leases    36,915      37,328     36,017     34,027     43,676     41,717     38,694  
Other assets and real estate owned (OREO)    2,619      4,514     3,227     3,195     1,762     1,967     1,619  
Total non-performing assets $   39,534   $  41,842  $  39,244  $  37,222  $  45,438  $  43,684  $  40,313  
                
   For the quarter ended,  
  September 30, June 30, March 31,  December 31,   September 30,  June 30, March 31, 
(Dollars in thousands)  2015   2015   2015   2014   2014   2014   2014  
Analysis of Non-accrual Loan and Lease Activity:               
Balance at beginning of period $   31,699   $  30,571  $  28,530  $  35,639  $  34,349  $  31,283  $  30,574  
Non-accrual balances transferred to OREO    (180)    (1,309)    (32)    (1,475)    (300)    (390)    (281) 
Non-accrual balances charged-off    (752)    (549)    (1,077)    (1,033)    (216)    (357)    (513) 
Net payments or draws    (1,846)    (2,970)    (1,067)    (4,139)    (590)    (1,580)    (1,073) 
Loans placed on non-accrual    1,574      5,956     4,217     779     2,396     5,393     2,576  
Non-accrual loans brought current    -      -      -      (1,241)    -     -     -  
Balance at end of period $   30,495   $  31,699  $  30,571  $  28,530  $  35,639  $  34,349  $  31,283  
                
Analysis of Allowance for Loan Losses:               
Balance at beginning of period $   38,713   $37,475  $  37,802  $  37,574  $  37,959  $  38,026  $  38,766  
Provision (credit) for loan and lease losses    1,706      1,218     597     853     (192)    158     (982) 
Less loans charged-off, net of recoveries:               
Commercial business    (25)    73     (89)    50     (58)    28     (768) 
Commercial real estate:               
Commercial AD&C    -      (547)    706     529     -     -     -  
Commercial investor real estate    (5)    85     (5)    (5)    (2)    (23)    (5) 
Commercial owner occupied real estate    104      (1)    212     (6)    -     265     -  
Leasing    -      -      -      -     -     -     -  
Consumer    348      395     43     83     244     11     331  
Residential real estate:               
Residential mortgage    342      (18)    65     (17)    43     (27)    203  
Residential construction    (6)    (7)    (8)    (9)    (34)    (29)    (3) 
 Net charge-offs    758      (20)    924     625     193     225     (242) 
Balance at end of period $   39,661   $  38,713  $  37,475  $  37,802  $  37,574  $  37,959  $  38,026  
                
Asset Quality Ratios:               
Non-performing loans to total loans  1.08%  1.13%  1.14%  1.09%  1.47%  1.43%  1.37% 
Non-performing assets to total assets  0.86%  0.93%  0.89%  0.85%  1.07%  1.03%  0.97% 
Allowance for loan losses to loans  1.16%  1.18%  1.18%  1.21%  1.26%  1.30%  1.34% 
Allowance for loan losses to non-performing loans  107.44%  103.71%  104.05%  111.09%  86.03%  90.99%  98.27% 
Annualized net charge-offs to average loans  0.09%  0.00%  0.12%  0.08%  0.03%  0.03%  (0.04)% 
                

 

Sandy Spring Bancorp, Inc. and Subsidiaries             
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED        
               
  Three Months Ended September 30, 
         2015                2014        
        Annualized        Annualized  
  Average             Average  Average             Average 
(Dollars in thousands and tax-equivalent) Balances (1) Interest Yield/Rate  Balances (1) Interest Yield/Rate 
Assets              
Residential mortgage loans $   754,007   $       6,346       3.37%$  682,013  $      5,813      3.41%
Residential construction loans  134,448        1,240       3.66   147,750       1,376      3.69 
Commercial ADC loans  227,545        2,602       4.54   180,293       2,196      4.83 
Commercial investor real estate loans  704,068        8,353       4.71   577,851       7,009      4.81 
Commercial owner occupied real estate loans  656,337        8,065       4.88   585,014       7,091      4.98 
Commercial business loans  413,300        4,600       4.42   367,203       4,177      4.53 
Leasing  19         -       -   206       4      6.91 
Consumer loans  441,740        3,701       3.35   404,062       3,364      3.32 
Total loans and leases (2)  3,331,464        34,907       4.16   2,944,392       31,030      4.22 
Loans held for sale  21,070        214       4.05   7,518       81      4.30 
Taxable securities  581,832        3,742       2.57   663,550       4,071      2.43 
Tax-exempt securities (3)  287,629        3,091       4.30   301,656       3,240      4.26 
Interest-bearing deposits with banks  39,472        25       0.25   37,268       24      0.25 
Federal funds sold  472          1       0.22   474         -       0.22 
Total interest-earning assets  4,261,939        41,980       3.92   3,954,858       38,446      3.89 
               
Less:  allowance for loan and lease losses  (39,090)       (38,213)     
Cash and due from banks  44,893         45,600      
Premises and equipment, net  52,233         45,959      
Other assets  217,167         211,880      
Total assets $   4,537,142        $ 4,220,084      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $   534,568        105       0.08%$  488,800         112      0.09%
Regular savings deposits  277,819          37       0.05   263,255         34      0.05 
Money market savings deposits  882,755        393       0.18   871,271       293      0.13 
Time deposits  505,351        1,097       0.86   456,530       769      0.67 
Total interest-bearing deposits  2,200,493        1,632       0.29   2,079,856       1,208      0.23 
Other borrowings  121,127          69       0.23   73,046       42      0.23 
Advances from FHLB  549,728          3,272       2.36   523,304       3,258      2.47 
Subordinated debentures  35,000          228       2.60   35,000       222      2.54 
Total interest-bearing liabilities  2,906,348        5,201       0.71   2,711,206       4,730      0.69 
               
Noninterest-bearing demand deposits  1,063,500         956,830      
Other liabilities  48,675         34,514      
Stockholders' equity  518,619         517,534      
Total liabilities and stockholders' equity $   4,537,142        $ 4,220,084      
               
Net interest income and spread   $       36,779       3.21 %  $      33,716      3.20%
Less: tax-equivalent adjustment          1,663                   1,296        
Net interest income   $       35,116            $      32,420        
               
Interest income/earning assets     3.92 %    3.89%
Interest expense/earning assets       0.49         0.47 
Net interest margin     3.43 %    3.42%
               
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and  2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.7 million and $1.3 million in 2015 and 2014, respectively. 
(2) Non-accrual loans are included in the average balances.              
(3) Includes only investments that are exempt from federal taxes.            
               

 

Sandy Spring Bancorp, Inc. and Subsidiaries             
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED        
               
  Nine Months Ended September 30, 
         2015                2014        
        Annualized        Annualized  
  Average             Average  Average             Average 
(Dollars in thousands and tax-equivalent) Balances (1) Interest Yield/Rate  Balances (1) Interest Yield/Rate 
Assets              
Residential mortgage loans $   737,655   $       18,625       3.37%$  654,261  $      16,874      3.44%
Residential construction loans  134,714        3,729       3.70   142,709       3,988      3.74 
Commercial ADC loans  217,409        7,464       4.59   170,365       6,450      5.06 
Commercial investor real estate loans  672,920        23,703       4.71   570,176       20,881      4.90 
Commercial owner occupied real estate loans  630,985        23,266       4.93   583,044       21,304      5.05 
Commercial business loans  398,418        13,107       4.40   355,242       12,268      4.62 
Leasing  30        1       2.97   374       16      5.54 
Consumer loans  433,788        10,807       3.35   390,749       9,689      3.34 
Total loans and leases (2)  3,225,919        100,702