Market Overview

Sandy Spring Bancorp Reports Net Income of $12.8 Million for the Fourth Quarter and $45.4 Million for the Full Year

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OLNEY, Md., Jan. 21, 2016 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq: SASR) the parent company of Sandy Spring Bank, today reported net income for the fourth quarter of 2015 of $12.8 million ($0.52 per diluted share) compared to net income of $9.1 million ($0.36 per diluted share) for the fourth quarter of 2014 and net income of $11.0 million ($0.45 per diluted share) for the third quarter of 2015.

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Net income for the year ended December 31, 2015, was $45.4 million ($1.84 per diluted share) compared to net income of $38.2 million ($1.52 per diluted share) for the prior year. The fourth quarter of the current year includes the recapture of $4.5 million in previously accrued litigation expenses due to the settlement of all claims that were the subject of an adverse jury verdict rendered in 2014.

"Our continued strong core performance was driven by higher net interest income. Building on the first three quarters of the year, loan growth continued steadily at a double-digit year-over-year rate in a very competitive marketplace," said Daniel J. Schrider, President and Chief Executive Officer.

"Our stable net interest margin, strong capital position and consistent credit quality are the drivers that provide an ongoing competitive return on our shareholders' investment," said Schrider. "We continue to focus on providing our customers with outstanding levels of service across the organization."

Fourth Quarter Highlights: 

  • Total loans increased 12% compared to the fourth quarter of 2014 and were up 2% compared to the third quarter of 2015. All three major portfolio segments experienced strong growth over the prior year.  These increases were driven primarily by year-over-year growth of 15% in the commercial loan portfolio.
     
  • Combined noninterest-bearing and interest-bearing checking account balances increased 3% to $1.6 billion at December 31, 2015 as compared to $1.5 billion at December 31, 2014.
  • The provision for loan and lease losses for the fourth quarter of 2015 was a charge of $1.9 million compared to a charge of $0.9 million for the fourth quarter of 2014 and a charge of $1.7 million for the third quarter of 2015. The provision was driven by our solid loan growth.
     
  • The net interest margin was 3.45% for the fourth quarter of 2015, compared to 3.44% for the fourth quarter of 2014 and 3.43% for the third quarter of 2015.
     
  • The non-GAAP efficiency ratio improved to 63.08% for the current quarter from 65.89% for the prior year quarter due primarily to the recapture of $4.5 million of previously accrued litigation expenses. This credit was somewhat offset by a charitable contribution of $1 million to the Sandy Spring Bank Foundation in the quarter. 
     
  • During the fourth quarter of 2015, the Company repurchased 141,518 shares of its common stock at an average price of $26.53 per share as part of its existing share repurchase program. For the year-to-date, the Company repurchased 870,450 shares at an average price of $25.99 per share.

Review of Balance Sheet and Credit Quality

Total assets grew 6% to $4.7 billion at December 31, 2015 compared to $4.4 billion at December 31, 2014.  This growth was driven by a 12% increase in the loan portfolio as total loans and leases ended the period at $3.5 billion. 

At December 31, 2015, combined noninterest-bearing and interest-bearing checking account balances, a primary driver of multiple-product banking relationships with clients, increased 3% compared to balances at December 31, 2014. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers increased 7% compared to December 31, 2014.

Tangible common equity totaled $441 million at December 31, 2015 compared to $438 million at December 31, 2014. The ratio of tangible common equity to tangible assets decreased to 9.66% at December 31, 2015 from 10.15% at December 31, 2014 due primarily to the growth in assets and continued share repurchases. Dividends per common share increased to $0.24 per share in the fourth quarter and totaled $0.90 per common share for the year compared to $0.76 per common share for 2014, an 18% increase.  At December 31, 2015, the Company had a total risk-based capital ratio of 14.25%, a common equity tier 1 risk-based capital ratio of 12.17%, a tier 1 risk-based capital ratio of 13.13% and a tier 1 leverage ratio of 10.60%.

Non-performing loans totaled $34.5 million at December 31, 2015 compared to $34.0 million at December 31, 2014 and $36.9 million at September 30, 2015. The level of non-performing loans to total loans decreased to 0.99% at December 31, 2015 compared to 1.09% at December 31, 2014 due to growth in the overall loan portfolio.

Loan charge-offs, net of recoveries, totaled $0.6 million for the fourth quarter of 2015, compared to net loan charge-offs of $0.6 million for the fourth quarter of 2014. The allowance for loan and lease losses represented 1.17% of outstanding loans and leases and 119% of non-performing loans at December 31, 2015 compared to 1.21% of outstanding loans and leases and 111% of non-performing loans at December 31, 2014. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the fourth quarter of 2015 increased 8% compared to the fourth quarter of 2014. The net interest margin was 3.45% for the fourth quarter of 2015 compared to 3.44% for the fourth quarter of 2014. This increase was driven by loan growth together with stable funding sources.

The provision for loan and lease losses was a charge of $1.9 million for the fourth quarter of 2015 compared to a charge of $0.9 million for the fourth quarter of 2014 and a charge of $1.7 million for the third quarter of 2015. The majority of the current quarter's charge reflects the growth in the loan portfolio.

Non-interest income increased 8% to $12.2 million for the fourth quarter of 2015 compared to $11.3 million for the fourth quarter of 2014.  The increase in non-interest income for the quarter compared to the prior year quarter was due primarily to an increase in other non-interest income due to an increase in loan prepayment fees and a full payoff received on a loan previously acquired at a significant discount.  

Non-interest expenses decreased to $27.0 million for the fourth quarter of 2015 compared to $30.5 million in the fourth quarter of 2014. The current quarter included a $4.5 million recapture of litigation expenses previously accrued in prior periods. As previously noted, the quarter also included a charitable contribution of $1 million to the Sandy Spring Bank Foundation. Excluding these transactions, total non-interest expenses remained virtually level compared to 2014 as increases in salaries and benefits were offset by declines in occupancy expenses and EFT losses. The non-GAAP efficiency ratio was 63.08% for the fourth quarter of 2015 compared to 65.89% for the fourth quarter of 2014.

Net interest income for the year ended December 31, 2015 increased 7% compared to 2014 due primarily to an increase in average loans. The net interest margin was 3.44% for 2015 compared to 3.45% for 2014.  As mentioned above, this increase was due primarily to a combination of loan growth and stable funding sources.

The provision for loan and lease losses was a charge of $5.4 million for the year ended December 31, 2015 compared to a credit of $0.2 million for 2014. The change in the provision for the current year is primarily due to the growth in the loan portfolio over the prior year.

Non-interest income increased 6% to $49.9 million for 2015 compared to $46.9 million for 2014.  This increase was driven by increases in income from wealth management due to growth in assets under management and income from mortgage banking due primarily to higher mortgage origination volumes. Other non-interest income also increased due to higher gains on sales of SBA loans and an increase in loan prepayment fees.

Non-interest expenses decreased 5% to $115.3 million for 2015 compared to $120.8 million for 2014. Excluding the accrued litigation expenses in 2014 and the subsequent recapture in 2015 together with the charitable contribution mentioned above, non-interest expenses increased 3% over the prior year. The current year also included increases in salaries, pension costs and health benefits and other non-interest expenses.  The non-GAAP efficiency ratio was 61.09% for 2015 compared to 62.48% for 2014.

Conference Call

The Company's management will host a conference call to discuss its fourth 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) February 5, 2016.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10078286.

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 $4.7 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    Twelve Months Ended   
  December 31,  December 31, % 
(Dollars in thousands, except per share data)  2015  2014 Change   2015  2014 Change 
Results of Operations:              
  Net interest income $   35,777  $  33,227 8 % $   138,199  $  129,548  7 %
  Provision (credit) for loan and lease losses    1,850   853 117      5,371   (163n.m 
  Non-interest income    12,243     11,338 8      49,901     46,871  6  
  Non-interest expenses    26,996     30,478 (11)     115,347     120,800  (5) 
  Income before income taxes    19,174     13,234 45      67,382     55,782  21  
  Net income     12,802     9,148 40      45,355     38,200  19  
               
  Pre-tax pre-provision income  $   16,638  $  14,242 17   $   68,884  $  62,138  11  
               
  Return on average assets    1.11 %   0.85%      1.01 %   0.91%  
  Return on average common equity    9.73 %   6.93%      8.73 %   7.43%  
  Net interest margin    3.45 %   3.44%      3.44 %   3.45%  
  Efficiency ratio - GAAP basis  (1)    56.22 %   68.39%      61.32 %   68.47%  
  Efficiency ratio - Non-GAAP basis  (1)    63.08 %   65.89%      61.09 %   62.48%  
               
Per share data:              
  Basic net income $   0.53  $  0.37 43 % $   1.84  $  1.53  20 %
  Diluted net income $   0.52  $  0.36 44   $   1.84  $  1.52  21  
  Average fully diluted shares   24,455,847     25,151,831 (3)    24,697,908    25,139,370  (2) 
  Dividends declared per share $   0.24  $  0.20 20   $   0.90  $  0.76  18  
  Book value per share    21.58   20.83 4      21.58     20.83  4  
  Tangible book value per share    18.17   17.48 4      18.17     17.48  4  
  Outstanding shares   24,295,971     25,044,877 (3)    24,295,971    25,044,877  (3) 
               
Financial Condition at period-end:              
  Investment securities $   841,650  $  933,619 (10)% $   841,650  $  933,619  (10)%
  Loans and leases    3,495,370     3,127,392 12      3,495,370     3,127,392  12  
  Interest-earning assets    4,378,403     4,114,936 6      4,378,403     4,114,936  6  
  Assets    4,655,380     4,397,132 6      4,655,380     4,397,132  6  
  Deposits    3,263,730     3,066,509 6      3,263,730     3,066,509  6  
  Interest-bearing liabilities    3,091,034     2,837,204 9      3,091,034     2,837,204  9  
  Stockholders' equity    524,427     521,751 1      524,427     521,751  1  
               
Capital ratios:              
  Tier 1 leverage  (4)    10.60 % 11.26%      10.60 %   11.26%  
  Tier 1 capital to risk-weighted assets  (4)    13.13 % 13.95%      13.13 %   13.95%  
  Total regulatory capital to risk-weighted assets  (4)    14.25 % 15.06%      14.25 %   15.06%  
  Common equity tier 1 capital to risk-weighted assets  (4)    12.17 %n.a.%      12.17 % n.a. %  
  Tangible common equity to tangible assets  (2)    9.66 % 10.15%      9.66 %   10.15%  
  Average equity to average assets    11.36 % 12.21%      11.58 %   12.26%  
               
Credit quality ratios:              
  Allowance for loan and lease losses to loans and leases    1.17 %   1.21%      1.17 %   1.21%  
  Non-performing loans to total loans    0.99 %   1.09%      0.99 %   1.09%  
  Non-performing assets to total assets    0.80 %   0.85%      0.80 %   0.85%  
  Allowance for loan and lease losses to non-performing loans   118.54 %   111.09%      118.54 %   111.09%  
  Annualized net charge-offs to average loans and leases  (3)   0.07 %   0.08%      0.07 %   0.03%  
               
(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 December 31, 2015              

 

Sandy Spring Bancorp, Inc. and Subsidiaries        
RECONCILIATION TABLE - UNAUDITED        
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
(Dollars in thousands) 2015 2014 2015 2014
Pre-tax pre-provision income:        
Net income $   12,802   $9,148  $   45,355   $38,200 
Plus non-GAAP adjustment:        
Litigation expenses    (4,386)  155     (3,869)  6,519 
Income taxes    6,372    4,086     22,027    17,582 
Provision (credit) for loan and lease losses    1,850    853     5,371    (163)
Pre-tax pre-provision income $   16,638   $14,242  $   68,884   $62,138 
         
Efficiency ratio - GAAP basis:        
Non-interest expenses $   26,996   $30,478  $   115,347   $120,800 
         
Net interest income plus non-interest income $   48,020   $44,565  $   188,100   $176,419 
         
Efficiency ratio - GAAP basis  56.22%  68.39%  61.32%  68.47%
         
         
Efficiency ratio - Non-GAAP basis:        
Non-interest expenses $   26,996   $30,478  $   115,347   $120,800 
Less non-GAAP adjustment:        
Amortization of intangible assets    52    112     372    821 
Litigation expenses    (4,386)  155     (3,869)  6,519 
Non-interest expenses -  as adjusted $   31,330   $30,211  $   118,844   $113,460 
         
Net interest income plus non-interest income $   48,020   $44,565  $   188,100   $176,419 
Plus non-GAAP adjustment:        
Tax-equivalent income    1,662    1,283     6,478    5,192 
Less non-GAAP adjustments:        
Securities gains (losses)    16    (3)    36    5 
Net interest income plus non-interest income - as adjusted $   49,666   $45,851  $   194,542   $181,606 
         
Efficiency ratio - Non-GAAP basis  63.08%  65.89%  61.09%  62.48%
         
Tangible common equity ratio:        
Total stockholders' equity $   524,427   $521,751  $   524,427   $521,751 
Accumulated other comprehensive income (loss)    1,297    823     1,297    823 
Goodwill    (84,171)  (84,171)    (84,171)  (84,171)
Other intangible assets, net    (138)  (510)    (138)  (510)
Tangible common equity $   441,415   $437,893  $   441,415   $437,893 
         
Total assets $   4,655,380   $4,397,132  $   4,655,380   $4,397,132 
Goodwill    (84,171)  (84,171)    (84,171)  (84,171)
Other intangible assets, net    (138)  (510)    (138)  (510)
Tangible assets $   4,571,071   $4,312,451  $   4,571,071   $4,312,451 
         
Tangible common equity ratio  9.66%  10.15%  9.66%  10.15%
         
Outstanding common shares    24,295,971    25,044,877     24,295,971    25,044,877 
Tangible book value per common share $   18.17   $17.48  $   18.17   $17.48 

 

Sandy Spring Bancorp, Inc. and Subsidiaries    
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED    
     
  December 31,
 December 31,
(Dollars in thousands)  2015   2014 
Assets    
  Cash and due from banks $   46,956   $  52,804 
  Federal funds sold    472      473 
  Interest-bearing deposits with banks    25,454      42,940 
  Cash and cash equivalents    72,882      96,217 
         
  Residential mortgage loans held for sale (at fair value)     15,457      10,512 
  Investments available-for-sale (at fair value)    592,049      672,209 
  Investments held-to-maturity -- fair value of $211,704 and $222,260 at December 31, 2015 and 2014, respectively    208,265      219,973 
  Other equity securities    41,336      41,437 
  Total loans and leases    3,495,370      3,127,392 
  Less: allowance for loan and lease losses    (40,895)    (37,802)
  Net loans and leases    3,454,475      3,089,590 
  Premises and equipment, net    53,214      49,402 
  Other real estate owned    2,742      3,195 
  Accrued interest receivable    13,443      12,634 
  Goodwill    84,171      84,171 
  Other intangible assets, net     138      510 
  Other assets    117,208      117,282 
Total assets $   4,655,380   $  4,397,132 
     
Liabilities    
  Noninterest-bearing deposits $   1,001,841   $  993,737 
  Interest-bearing deposits    2,261,889      2,072,772 
  Total deposits    3,263,730      3,066,509 
  Securities sold under retail repurchase agreements and federal funds purchased    109,145      74,432 
  Advances from FHLB    685,000      655,000 
  Subordinated debentures    35,000      35,000 
  Accrued interest payable and other liabilities    38,078      44,440 
  Total liabilities    4,130,953      3,875,381 
     
Stockholders' Equity    
  Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,295,971 and    
  25,044,877 at December 31, 2015 and, 2014, respectively    24,296      25,045 
  Additional paid in capital    175,588      194,647 
  Retained earnings    325,840      302,882 
  Accumulated other comprehensive loss    (1,297)    (823)
  Total stockholders' equity    524,427      521,751 
Total liabilities and stockholders' equity $   4,655,380   $  4,397,132 

 

Sandy Spring Bancorp, Inc. and Subsidiaries        
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED      
         
  Three Months Ended Twelve Months Ended
  December 31,December 31,
(Dollars in thousands, except per share data)  2015   2014   2015   2014 
Interest Income:        
 Interest and fees on loans and leases $   35,516   $  31,899  $  135,170   $  123,369 
 Interest on loans held for sale    122      101     544      312 
 Interest on deposits with banks    29      19     98      85 
 Interest and dividends on investment securities:        
  Taxable    3,416      3,673     14,440      15,377 
  Exempt from federal income taxes    1,991      2,282     8,059      9,222 
 Interest on federal funds sold    0      1     1      1 
  Total interest income    41,074      37,975     158,312      148,366 
Interest Expense:        
Interest on deposits    1,685      1,206     5,878      4,791 
Interest on retail repurchase agreements and federal funds purchased    76      47     255      164 
Interest on advances from FHLB    3,307      3,273     13,081      12,982 
Interest on subordinated debt    229      222     899      881 
  Total interest expense    5,297      4,748     20,113      18,818 
Net interest income    35,777      33,227     138,199      129,548 
Provision (credit) for loan and lease losses    1,850      853     5,371      (163)
  Net interest income after provision (credit) for loan and lease losses    33,927      32,374     132,828      129,711 
Non-interest Income:        
 Investment securities gains (losses)    16      (3)    36      5 
 Service charges on deposit accounts    1,950      2,135     7,607      8,422 
 Mortgage banking activities    548      512     3,114      1,994 
 Wealth management income    4,891      4,905     19,931      19,086 
 Insurance agency commissions    1,029      985     5,176      4,996 
 Income from bank owned life insurance    634      627     2,571      2,444 
 Bank card fees    1,177      1,144     4,652      4,439 
 Other income    1,998      1,033     6,814      5,485 
  Total non-interest income    12,243      11,338     49,901      46,871 
Non-interest Expenses:        
 Salaries and employee benefits    18,437      16,793     71,003      66,387 
 Occupancy expense of premises    3,061      3,914     12,809      13,692 
 Equipment expenses    1,608      1,333     6,071      5,188 
 Marketing    735      838     2,896      2,926 
 Outside data services    1,331      1,284     5,023      4,947 
 FDIC insurance    641      615     2,491      2,302 
 Amortization of intangible assets    52      112     372      821 
 Litigation expenses    (4,386)    155     (3,869)    6,519 
 Other expenses    5,517      5,434     18,551      18,018 
  Total non-interest expenses    26,996      30,478     115,347      120,800 
Income before income taxes    19,174      13,234     67,382      55,782 
Income tax expense    6,372      4,086     22,027      17,582 
  Net income $   12,802   $  9,148  $   45,355   $  38,200 
         
Net Income Per Share Amounts:        
Basic net income per share $   0.53   $  0.37  $   1.84   $  1.53 
Diluted net income per share $   0.52   $  0.36  $   1.84   $  1.52 
Dividends declared per share $   0.24   $  0.20  $   0.90   $  0.76 

 

Sandy Spring Bancorp, Inc. and Subsidiaries          
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED        
           
   2015   2014 
(Dollars in thousands, except per share data) Q4Q3Q2Q1 Q4Q3Q2Q1
Profitability for the Quarter:          
Tax-equivalent interest income $   42,736  $  41,980 $  40,438 $  39,343  $  39,258 $  38,446 $  38,322 $  37,532 
Interest expense    5,297     5,201    4,916    4,699     4,748    4,730    4,682    4,658 
Tax-equivalent net interest income    37,439     36,779    35,522    34,644     34,510    33,716    33,640    32,874 
  Tax-equivalent adjustment    1,662     1,663    1,589    1,271     1,283    1,296    1,331    1,282 
Provision for loan and lease losses    1,850     1,706    1,218    597     853    (192)   158    (982)
Non-interest income    12,243     12,390    12,109    13,159     11,338    12,590    11,694    11,249 
Non-interest expenses    26,996     29,630    29,477    29,244     30,478    28,632    34,141    27,549 
Income before income taxes    19,174     16,170    15,347    16,691     13,234    16,570    9,704    16,274 
Income tax expense     6,372     5,175    5,014    5,466     4,086    5,428    2,722    5,346 
Net income  $   12,802  $  10,995 $  10,333 $  11,225  $  9,148 $  11,142 $  6,982 $  10,928 
Financial Performance:          
Pre-tax pre-provision income $   16,638  $  18,031 $  16,727 $  17,488  $  14,242 $  16,614 $  15,990 $  15,292 
Return on average assets  1.11% 0.96% 0.93% 1.04%  0.85% 1.05% 0.67% 1.08%
Return on average common equity  9.73% 8.41% 8.02% 8.73%  6.93% 8.54% 5.47% 8.80%
Net interest margin  3.45% 3.43% 3.42% 3.44%  3.44% 3.42% 3.48% 3.47%
Efficiency ratio - GAAP basis (1)  56.22% 62.37% 64.02% 62.85%  68.39% 63.61% 77.59% 64.31%
Efficiency ratio - Non-GAAP basis (1)  63.08% 59.73% 61.35% 60.53%  65.89% 61.09% 61.30% 61.60%
Per Share Data:          
Basic net income per share $   0.53  $0.45 $0.42 $  0.45  $  0.37 $  0.44 $  0.28 $  0.44 
Diluted net income per share $   0.52  $0.45 $0.42 $  0.45  $  0.36 $  0.44 $  0.28 $  0.43 
Average fully diluted shares  24,455,847   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 $   0.24  $  0.22 $  0.22 $  0.22  $  0.20 $  0.20 $  0.18 $  0.18 
Non-interest Income:          
Securities gains (losses) $   16  $  1 $  19 $    -   $  (3)$  8 $  - $  - 
Service charges on deposit accounts    1,950     1,936    1,839    1,882     2,135    2,226    2,089    1,972 
Mortgage banking activities    548     566    822    1,178     512    596    570    316 
Wealth management income    4,891     4,963    5,161    4,916     4,905    4,974    4,741    4,466 
Insurance agency commissions    1,029     1,648    881    1,618     985    1,410    961    1,640 
Income from bank owned life insurance    634     618    606    713     627    611    608    598 
Bank card fees    1,177     1,198    1,220    1,057     1,144    1,148    1,169    978 
Other income    1,998     1,460    1,561    1,795     1,033    1,617    1,556    1,279 
  Total Non-interest Income $   12,243  $  12,390 $  12,109 $  13,159  $  11,338 $  12,590 $  11,694 $  11,249 
Non-interest Expense:          
Salaries and employee benefits $   18,437  $  17,733 $  17,534 $  17,299  $  16,793 $  16,765 $  16,474 $  16,355 
Occupancy expense of premises    3,061     3,086    3,173    3,489     3,914    3,032    3,274    3,472 
Equipment expenses    1,608     1,600    1,490    1,373     1,333    1,337    1,262    1,256 
Marketing    735     688    942    531     838    744    802    542 
Outside data services    1,331     1,329    1,102    1,261     1,284    1,231    1,216    1,216 
FDIC insurance    641     565    654    631     615    594    573    520 
Amortization of intangible assets    52     107    106    107     112    115    224    370 
Litigation expenses    (4,386)   155    162    200     155    236    6,128    - 
Professional fees    1,322     1,089    1,199    1,209     1,246    1,092    1,292    914 
Other real estate owned expenses    14     48    4    10     2    40    9    - 
Other expenses    4,181     3,230    3,111    3,134     4,186    3,446    2,887    2,904 
  Total Non-interest Expense $   26,996  $  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) Q4Q3Q2Q1 Q4Q3Q2Q1
Balance Sheets at Quarter End:          
Residential mortgage loans $   796,358  $  773,889 $  744,195 $  728,858  $  717,886 $  698,925 $  668,536 $  640,939 
Residential construction loans    129,281     139,492    137,134  130,321   136,741  141,883  149,321  143,109 
Commercial ADC loans    255,980     239,160    223,103  203,731   205,124  194,666  178,972  163,343 
Commercial investor real estate loans    719,084     710,694    694,179  668,931   640,193  575,984  577,813  573,634 
Commercial owner occupied real estate loans    678,027     680,601    643,973  618,846   611,061  584,964  581,795  582,472 
Commercial business loans    465,765     423,855    409,795  385,452   390,781  368,611  357,472  348,180 
Leasing    -     19    21  36   54  156  260  439 
Consumer loans    450,875     444,729    436,465  428,531   425,552  410,723  396,775  380,697 
  Total loans and leases  3,495,370   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  (40,895) (39,661) (38,713) (37,475)  (37,802) (37,574) (37,959) (38,026)
Loans held for sale    15,457     10,418    19,445  13,899   10,512  6,656  9,042  3,079 
Investment securities  841,650   862,409  878,284  912,565   933,619  950,869  980,530  997,584 
Interest-earning assets  4,378,403   4,339,375  4,222,667  4,125,549   4,114,936  3,976,731  3,945,643  3,891,223 
Total assets  4,655,380   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  1,001,841   1,068,299  1,092,413  1,017,566   993,737  986,549  984,700  882,169 
Total deposits  3,263,730   3,275,668  3,247,346  3,109,892   3,066,509  3,028,788  3,038,670  2,959,195 
Customer repurchase agreements    109,145     121,378    111,817  101,640   74,432  71,384  72,917  67,038 
Total interest-bearing liabilities  3,091,034   2,973,747  2,851,750  2,818,966   2,837,204  2,706,623  2,698,887  2,748,064 
Total stockholders' equity  524,427   523,594  518,873  521,768   521,751  522,404  517,269  510,386 
Quarterly Average Balance Sheets:          
Residential mortgage loans $   781,015  $  754,007 $  734,382 $  724,248  $  707,719 $  682,013 $  652,232 $  627,944 
Residential construction loans    133,812     134,448    137,216    132,456     141,890    147,750    145,968    134,261 
Commercial ADC loans    247,612     227,545    218,341    206,105     201,020    180,293    168,063    162,544 
Commercial investor real estate loans    717,742     704,068    668,883    645,163     607,050    577,851    575,283    557,168 
Commercial owner occupied real estate loans    673,883     656,337    624,407    611,722     594,634    585,014    579,953    584,155 
Commercial business loans    424,510     413,300    398,510    383,111     367,872    367,203    348,597    349,734 
Leasing    17     19    28    44     114    206    352    567 
Consumer loans    448,439     441,740    434,011    425,434     417,910    404,062    390,076    377,822 
  Total loans and leases    3,427,030     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    11,951     21,070    14,075  7,053   9,952  7,518  6,940  5,216 
Investment securities  840,276   869,461  898,237  925,683   942,782  965,206  991,135  1,012,701 
Interest-earning assets  4,320,674   4,261,939  4,162,963  4,097,648   4,022,051  3,954,858  3,893,843  3,845,513 
Total assets  4,594,025   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  1,058,215   1,063,500  1,023,042  986,688   1,000,285  956,830  899,287  825,968 
Total deposits  3,285,299   3,263,993  3,128,562  3,056,186   3,063,591  3,036,686  2,965,329  2,876,641 
Customer repurchase agreements    125,275     121,127    106,179    90,020     78,746    73,046    68,880    62,864 
Total interest-bearing liabilities  2,968,555   2,906,348  2,852,414  2,817,575   2,731,791  2,711,206  2,716,537  2,749,459 
Total stockholders' equity  521,786   518,619  516,940  521,346   524,063  517,534  511,738  503,851 
Financial Measures:          
Average equity to average assets  11.36% 11.43% 11.65% 11.92%  12.21% 12.26% 12.31% 12.27%
Investment securities to earning assets  19.22% 19.87% 20.80% 22.12%  22.69% 23.91% 24.85% 25.64%
Loans to earning assets  79.83% 78.64% 77.89% 76.71%  76.00% 74.83% 73.78% 72.80%
Loans to assets  75.08% 74.01% 72.97% 71.90%  71.12% 70.04% 68.75% 67.95%
Loans to deposits  107.10% 104.18% 101.28% 101.76%  101.99% 98.25% 95.80% 95.73%
Capital Measures:          
Tier 1 leverage  (1)  10.60% 10.65% 10.83% 11.00%  11.26% 11.36% 11.37% 11.43%
Tier 1 capital to risk-weighted assets  (1)  13.13% 13.17% 13.54% 14.01%  13.95% 14.52% 14.48% 14.64%
Total regulatory capital to risk-weighted assets  (1)  14.25% 14.27% 14.65% 15.12%  15.06% 15.68% 15.66% 15.85%
Common equity tier 1 capital to risk-weighted assets  (1)  12.17% 12.20% 12.53% 14.01% n.a.n.a.n.a.n.a.
Book value per share $   21.58  $  21.44 $  21.12 $  21.10  $  20.83 $  20.83 $  20.63 $  20.38 
Outstanding shares    24,295,971     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 December 31, 2015          

 

Sandy Spring Bancorp, Inc. and Subsidiaries                
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED              
                 
  2015
 2014
(Dollars in thousands) December 31, 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    3,696    3,881   3,285   4,166   3,184   4,151   4,309   3,272 
Commercial real estate:                
Commercial AD&C    194    194   194   1,363   2,464   3,792   3,739   4,133 
Commercial investor real estate    8,368    8,609   10,023   10,083   8,156   8,210   6,731   7,284 
Commercial owner occupied real estate    6,340    7,932   8,423   8,974   8,941   10,742   10,868   7,150 
Leasing    -     -   -   -   -   -   -   - 
Consumer    2,193    1,621   1,214   1,962   1,668   1,830   2,058   2,115 
Residential real estate:                
Residential mortgage    8,822    7,488   7,780   3,235   3,012   4,417   4,501   5,025 
Residential construction    418    770   780   788   1,105   2,497   2,143   2,304 
Total non-accrual loans and leases    30,031    30,495   31,699   30,571   28,530   35,639   34,349   31,283 
Total restructured loans - accruing    4,467    6,419   5,620   5,446   5,497   7,382   7,364   7,411 
Total non-performing loans and leases    34,498    36,915   37,328   36,017   34,027   43,676   41,717   38,694 
Other assets and real estate owned (OREO)    2,742    2,619   4,514   3,227   3,195   1,762   1,967   1,619 
Total non-performing assets $   37,240   $39,534  $41,842  $39,244  $37,222  $45,438  $43,684  $40,313 
                 
  For the quarter ended,
  December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands) 2015
 2015
 2015
 2015
 2014
 2014
 2014
 2014
Analysis of Non-accrual Loan and Lease Activity:                
Balance at beginning of period $   30,495   $31,699  $30,571  $28,530  $35,639  $34,349  $31,283  $30,574 
Non-accrual balances transferred to OREO    (423)  (180)  (1,309)  (32)  (1,475)  (300)  (390)  (281)
Non-accrual balances charged-off    (869)  (752)  (549)  (1,077)  (1,033)  (216)  (357)  (513)
Net payments or draws    (3,084)  (1,846)  (2,970)  (1,067)  (4,139)  (590)  (1,580)  (1,073)
Loans placed on non-accrual    3,912    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 $   30,031   $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 $   39,661   $38,713  $37,475  $37,802  $37,574  $37,959  $38,026  $38,766 
Provision (credit) for loan and lease losses    1,850    1,706   1,218   597   853   (192)  158   (982)
Less loans charged-off, net of recoveries:                
Commercial business    (128)  (25)  73   (89)  50   (58)  28   (768)
Commercial real estate:                
Commercial AD&C    -    -   (547)  706   529   -   -   - 
Commercial investor real estate    (4)  (5)  85   (5)  (5)  (2)  (23)  (5)
Commercial owner occupied real estate    725    104   (1)  212   (6)  -   265   - 
Leasing    4    -   -   -   -   -   -   - 
Consumer    (31)  348   395   43   83   244   11   331 
Residential real estate:                
Residential mortgage    80    342   (18)  65   (17)  43   (27)  203 
Residential construction    (30)  (6)  (7)  (8)  (9)  (34)  (29)  (3)
Net charge-offs    616    758   (20)  924   625   193   225   (242)
Balance at end of period $   40,895   $39,661  $38,713  $37,475  $37,802  $37,574  $37,959  $38,026 
                 
Asset Quality Ratios:                
Non-performing loans to total loans  0.99%  1.08%  1.13%  1.14%  1.09%  1.47%  1.43%  1.37%
Non-performing assets to total assets  0.80%  0.86%  0.93%  0.89%  0.85%  1.07%  1.03%  0.97%
Allowance for loan losses to loans  1.17%  1.16%  1.18%  1.18%  1.21%  1.26%  1.30%  1.34%
Allowance for loan losses to non-performing loans  118.54%  107.44%  103.71%  104.05%  111.09%  86.03%  90.99%  98.27%
Annualized net charge-offs to average loans  0.07%  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 December 31, 
   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 $   781,015   $    6,626    3.39%$  707,719  $   5,985   3.38%
Residential construction loans  133,812     1,241    3.68   141,890    1,328   3.71 
Commercial ADC loans  247,612     2,835    4.54   201,020    2,364   4.67 
Commercial investor real estate loans  717,742     8,370    4.63   607,050    7,320   4.78 
Commercial owner occupied real estate loans  673,883     8,242    4.85   594,634    7,282   5.02 
Commercial business loans  424,510     4,819    4.50   367,872    4,132   4.48 
Leasing  17      -      -    114    1   6.56 
Consumer loans  448,439     3,817    3.40   417,910    3,487   3.33 
  Total loans and leases (2)  3,427,030     35,950    4.17   3,038,209    31,899   4.21 
Loans held for sale  11,951     122    4.12   9,952    101   4.07 
Taxable securities  551,894     3,552    2.57   643,233    4,031   2.49 
Tax-exempt securities (3)  288,382     3,083    4.28   299,549    3,207   4.25 
Interest-bearing deposits with banks  40,945     29    0.28   30,635    19   0.25 
Federal funds sold  472       -    0.26   473      1   0.22 
  Total interest-earning assets  4,320,674     42,736    3.93   4,022,051    39,258   3.91 
               
Less:  allowance for loan and lease losses  (40,143)       (38,291)     
Cash and due from banks  48,655         48,729      
Premises and equipment, net  52,707         47,552      
Other assets  212,132         212,196      
  Total assets $   4,594,025        $ 4,292,237      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $   544,133     106    0.08%$  510,025      119   0.09%
Regular savings deposits  281,146       37    0.05   261,564      34   0.05 
Money market savings deposits  892,833     382    0.17   842,158    277   0.13 
Time deposits  508,972     1,160    0.90   449,559    776   0.68 
  Total interest-bearing deposits  2,227,084     1,685    0.30   2,063,306    1,206   0.23 
Other borrowings  125,601       76    0.24   78,746    47   0.23 
Advances from FHLB  580,870       3,307    2.26   554,739    3,273   2.34 
Subordinated debentures  35,000       229    2.63   35,000    222   2.54 
  Total interest-bearing liabilities  2,968,555     5,297    0.71   2,731,791    4,748   0.69 
               
Noninterest-bearing demand deposits  1,058,215         1,000,285      
Other liabilities  45,469         36,098      
Stockholders' equity  521,786         524,063      
  Total liabilities and stockholders' equity $   4,594,025        $ 4,292,237      
               
Net interest income and spread   $    37,439    3.22 %  $   34,510   3.22%
  Less: tax-equivalent adjustment       1,662             1,283     
Net interest income   $    35,777         $   33,227     
               
Interest income/earning assets     3.93 %    3.91%
Interest expense/earning assets       0.48         0.47 
  Net interest margin     3.45 %    3.44%
               
(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        
               
  Twelve Months Ended December 31, 
   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 $   748,584   $    25,251    3.37%$  667,735  $   22,859   3.42%
Residential construction loans  134,486     4,970    3.70   142,503    5,316   3.73 
Commercial ADC loans  225,022     10,299    4.58   178,092    8,814   4.95 
Commercial investor real estate loans  684,218     32,073    4.69   579,471    28,201   4.87 
Commercial owner occupied real estate loans  641,798     31,508    4.91   585,965    28,586   5.04 
Commercial business loans  404,994     17,926    4.43   358,425    16,400   4.59 
Leasing  27     1    2.50   308    17   5.64 
Consumer loans  437,481     14,624    3.37   397,595    13,176   3.34 
  Total loans and leases (2)  3,276,610     136,652    4.17   2,910,094    123,369   4.27 
Loans held for sale  13,571     544    4.01   7,420    312   4.21 
Taxable securities  592,153     15,016    2.54   676,237    16,817   2.49 
Tax-exempt securities (3)  290,990     12,479    4.29   301,493    12,974   4.30 
Interest-bearing deposits with banks  37,761     98    0.26   33,902    85   0.25 
Federal funds sold  473     1    0.23   474      1   0.22 
  Total interest-earning assets  4,211,558     164,790    3.91   3,929,620    153,558   3.93 
               
Less:  allowance for loan and lease losses  (38,732)       (38,556)     
Cash and due from banks  46,719         46,224      
Premises and equipment, net  51,804         46,275      
Other assets  215,104         210,643      
  Total assets $   4,486,453        $ 4,194,206      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $   532,578     418    0.08%$  484,171      425   0.09%
Regular savings deposits  276,873       146    0.05   259,066      165   0.06 
Money market savings deposits  860,399     1,364    0.16   864,029    1,116   0.13 
Time deposits  481,368     3,950    0.82   457,778    3,085   0.67 
  Total interest-bearing deposits  2,151,218     5,878    0.27   2,065,044    4,791   0.23 
Other borrowings  110,899       255    0.23   70,933    164   0.23 
Advances from FHLB  589,575       13,081    2.22   556,178    12,982   2.33 
Subordinated debentures  35,000       899    2.57   35,000    881   2.52 
  Total interest-bearing liabilities  2,886,692     20,113    0.70   2,727,155    18,818   0.69 
               
Noninterest-bearing demand deposits  1,033,141         921,169      
Other liabilities  46,949         31,675      
Stockholders' equity  519,671         514,207      
  Total liabilities and stockholders' equity $   4,486,453        $ 4,194,206      
               
Net interest income and spread   $    144,677    3.21 %  $   134,740   3.24%
  Less: tax-equivalent adjustment       6,478             5,192     
Net interest income   $    138,199         $   129,548     
               
Interest income/earning assets     3.91 %    3.93%
Interest expense/earning assets       0.47         0.48 
  Net interest margin     3.44 %    3.45%
               
(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 $6.5 million and $5.2 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.            
             
For additional information or questions, please contact: Daniel J. Schrider, President & Chief Executive Officer, or Philip J. Mantua, E.V.P. & Chief Financial Officer Sandy Spring Bancorp 17801 Georgia Avenue Olney, Maryland 20832 1-800-399-5919 Email: DSchrider@sandyspringbank.com PMantua@sandyspringbank.com
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