Market Overview

Sandy Spring Bancorp Reports Net Income of $10.8 Million for the First Quarter

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OLNEY, Md., April 21, 2016 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq: SASR) the parent company of Sandy Spring Bank, today reported net income for the first quarter of 2016 of $10.8 million ($0.45 per diluted share) compared to net income of $11.2 million ($0.45 per diluted share) for the first quarter of 2015 and net income of $12.8 million ($0.52 per diluted share) for the fourth quarter of 2015.

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"Our financial performance in the first quarter was driven by our consistently balanced growth in all lending areas and ongoing deposit gathering efforts. Because of this growth and its positive impact on our net interest income, it allowed us to execute on certain initiatives that initially reflect a lower net income for the quarter when compared to the prior year quarter," said Daniel J. Schrider, President and Chief Executive Officer.

"We expect these initiatives, such as the early payoff of $40 million in high cost FHLB advances and the sale of a portfolio of wealth assets under management, to make a positive contribution to future earnings and also improve our ability to deliver our products and services in a more efficient manner," said Schrider.

First Quarter Highlights: 

  • Total loans increased 13% compared to the first quarter of 2015 and 2% compared to the fourth quarter of 2015.  Growth over the prior year was 10% or better in both the residential mortgage and commercial loan portfolios.
  • Combined noninterest-bearing and interest-bearing transaction account balances increased 7% to $1.7 billion at March 31, 2016 as compared to $1.5 billion at March 31, 2015.
  • The net interest margin was 3.44% for the first quarter of 2016, compared to 3.44% for the first quarter of 2015 and 3.45% for the fourth quarter of 2015. 
  • During the quarter, the Company prepaid $40 million in FHLB advances and incurred prepayment penalties of $1.8 million. This transaction was funded primarily by the sale of available-for-sale mortgage-backed securities. While the combination of these transactions was revenue neutral with respect to the first quarter results, the Company expects to realize a positive impact to its net interest margin in future periods.
  • In February, the Company completed the sale of a portion of its wealth assets under management, which was accompanied by the reduction in advisor headcount by eight persons, as the Company took steps to improve the profitability of its wealth management business.
  • During the first quarter of 2016, the Company repurchased 512,000 shares at an average price of $25.90 per share as part of its existing share repurchase program.

Review of Balance Sheet and Credit Quality

Total assets grew 7% to $4.7 billion at March 31, 2016 compared to $4.4 billion at March 31, 2015.  This growth was driven by a 13% increase in the loan portfolio as total loans and leases ended the period at $3.6 billion. 

At March 31, 2016, combined noninterest-bearing and interest-bearing checking account balances, an important performance driver of multiple-product banking relationships with clients, increased 7% compared to balances at March 31, 2015. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers, increased 10% compared to March 31, 2015.

Tangible common equity totaled $434 million at March 31, 2016 compared to $435 million at March 31, 2015. The ratio of tangible common equity to tangible assets decreased to 9.37% at March 31, 2016 from 10.08% at March 31, 2015 due primarily to the growth in assets and share repurchases. Dividends per common share were $0.24 per share for the quarter compared to $0.22 per common share for the first quarter of 2015, a 9% increase.  At March 31, 2016, the Company had a total risk-based capital ratio of 14.02%, a common equity tier 1 risk-based capital ratio of 11.92%, a tier 1 risk-based capital ratio of 12.88% and a tier 1 leverage ratio of 10.23%.

Non-performing loans totaled $36.1 million at March 31, 2016 compared to $36.0 million at March 31, 2015 and $34.5 million at December 31, 2015. The level of non-performing loans to total loans decreased to 1.01% at March 31, 2016 compared to 1.14% at March 31, 2015 due to growth in the overall loan portfolio.

Loan charge-offs, net of recoveries, totaled $0.4 million for the first quarter of 2016 compared to $0.9 million for the first quarter of 2015 and $0.6 million for the fourth quarter of 2015. The allowance for loan and lease losses represented 1.17% of outstanding loans and leases and 116% of non-performing loans at March 31, 2016 compared to 1.18% of outstanding loans and leases and 104% of non-performing loans at March 31, 2015. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

During the first quarter of 2016, the Company transferred its investments held-to-maturity portfolio, which totaled $208.3 million at December 31, 2015, to available-for-sale. These securities will provide it with additional liquidity to fund future loan growth and other corporate activities.

Income Statement Review

Net interest income for the first quarter of 2016 increased 8% compared to the first quarter of 2015. The net interest margin was 3.44% for the first quarter of both 2016 and 2015 as growth in earning assets was offset by higher funding costs.  

The provision for loan and lease losses was a charge of $1.2 million for the first quarter of 2016 compared to a charge of $0.6 million for the first quarter of 2015 and a charge of $1.9 million for the fourth quarter of 2015. The current quarter's charge reflects the growth in the loan portfolio over the prior year quarter.

Non-interest income increased to $13.4 million for the first quarter of 2016 compared to $13.2 million for the first quarter of 2015.  The increase in non-interest income for the quarter compared to the prior year quarter was due primarily to $1.8 million in gains on investments securities from sales of $40 million in securities to fund the prepayment of FHLB advances discussed previously. Excluding this transaction, non-interest income decreased 12% due to a decrease in income from wealth management due to the sale of a portion of the assets under management and a decrease in income from mortgage banking due primarily to lower mortgage sales volumes.

Non-interest expenses increased 11% to $32.3 million for the first quarter of 2016 compared to $29.2 million in the first quarter of 2015. This increase was due mainly to prepayment penalties of $1.8 million for the early payoff of $40 million in high-rate FHLB advances. Excluding the prepayment penalties, non-interest expenses increased 5% due primarily to higher salaries and benefits. The non-GAAP efficiency ratio was 61.84% for the first quarter of 2016 compared to 60.53% for the first quarter of 2015. 

Conference Call

The Company's management will host a conference call to discuss its first 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) May 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 10083087.

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 45 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, 2015, 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   
  March 31, % 
(Dollars in thousands, except per share data)  2016   2015  Change 
Results of Operations:       
Net interest income $   36,122   $33,373   8 %
Provision for loan and lease losses    1,236    597   107  
Non-interest income    13,363    13,159   2  
Non-interest expenses    32,317    29,244   11  
Income before income taxes    15,932    16,691   (5) 
Net income    10,813    11,225   (4) 
        
Pre-tax pre-provision income $   17,168   $17,488   (2) 
        
Return on average assets    0.93  % 1.04 %  
Return on average common equity    8.29  % 8.73 %  
Net interest margin    3.44  % 3.44 %  
Efficiency ratio - GAAP basis  (1)    65.31  % 62.85 %  
Efficiency ratio - Non-GAAP basis  (1)    61.84  % 60.53 %  
        
Per share data:       
Basic net income $   0.45   $0.45     - %
Diluted net income $   0.45   $0.45     -  
Average fully diluted shares   24,222,940    25,048,576   (3) 
Dividends declared per share $   0.24   $0.22   9  
Book value per share    21.92    21.10   4  
Tangible book value per share    18.21    17.59   4  
Outstanding shares   23,827,305    24,733,868   (4) 
        
Financial Condition at period-end:       
Investment securities $   742,401   $912,565   (19)%
Loans and leases    3,560,688    3,164,706   13  
Interest-earning assets    4,447,063    4,125,549   8  
Assets    4,716,608    4,401,380   7  
Deposits    3,412,308    3,109,892   10  
Interest-bearing liabilities    3,073,605    2,818,966   9  
Stockholders' equity    522,392    521,768    -   
        
Capital ratios:       
Tier 1 leverage  (4)    10.23  % 11.00 %  
Tier 1 capital to risk-weighted assets  (4)    12.88  % 14.01 %  
Total regulatory capital to risk-weighted assets  (4)    14.02  % 15.12 %  
Common equity tier 1 capital to risk-weighted assets  (4)    11.92  % 14.01 %  
Tangible common equity to tangible assets  (2)    9.37  % 10.08 %  
Average equity to average assets    11.19  % 11.92 %  
        
Credit quality ratios:       
Allowance for loan and lease losses to loans and leases    1.17  % 1.18 %  
Non-performing loans to total loans    1.01  % 1.14 %  
Non-performing assets to total assets    0.82  % 0.89 %  
Allowance for loan and lease losses to non-performing loans    115.72  % 104.05 %  
Annualized net charge-offs to average loans and leases  (3)    0.04  % 0.12 %  
        
(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 March 31, 2016       
        

 

Sandy Spring Bancorp, Inc. and Subsidiaries     
RECONCILIATION TABLE - UNAUDITED     
      
  Three Months Ended 
  March 31, 
(Dollars in thousands)  2016   2015  
Pre-tax pre-provision income:     
Net income $   10,813   $11,225  
Plus non-GAAP adjustment:     
Litigation expenses    -     200  
Income taxes    5,119    5,466  
Provision for loan and lease losses    1,236    597  
Pre-tax pre-provision income $   17,168   $17,488  
      
Efficiency ratio - GAAP basis:     
Non-interest expenses $   32,317   $29,244  
      
Net interest income plus non-interest income $   49,485   $46,532  
      
Efficiency ratio - GAAP basis  65.31%  62.85% 
      
      
Efficiency ratio - Non-GAAP basis:     
Non-interest expenses $   32,317   $29,244  
Less non-GAAP adjustment:     
Amortization of intangible assets    32    107  
Loss on FHLB redemption    1,751    -  
Litigation expenses    -     200  
Non-interest expenses -  as adjusted $   30,534   $28,937  
      
Net interest income plus non-interest income $   49,485   $46,532  
Plus non-GAAP adjustment:     
Tax-equivalent income    1,664    1,271  
Less non-GAAP adjustments:     
Securities gains    1,769    -  
Net interest income plus non-interest income - as adjusted $   49,380   $47,803  
      
Efficiency ratio - Non-GAAP basis  61.84%  60.53% 
      
Tangible common equity ratio:     
Total stockholders' equity $   522,392   $521,768  
Accumulated other comprehensive income    (4,233)  (2,146) 
Goodwill    (84,171)  (84,171) 
Other intangible assets, net    (105)  (403) 
Tangible common equity $   433,883   $435,048  
      
Total assets $  4,716,608   $4,401,380  
Goodwill    (84,171)  (84,171) 
Other intangible assets, net    (105)  (403) 
Tangible assets $  4,632,332   $4,316,806  
      
Tangible common equity ratio  9.37%  10.08% 
      
Outstanding common shares    23,827,305    24,733,868  
Tangible book value per common share $   18.21   $17.59  
      

 

Sandy Spring Bancorp, Inc. and Subsidiaries       
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED       
        
  March 31, December 31, March 31, 
(Dollars in thousands)  2016   2015   2015  
Assets       
Cash and due from banks $   43,228   $46,956  $46,771  
Federal funds sold    559    472   473  
Interest-bearing deposits with banks    115,609    25,454   33,906  
Cash and cash equivalents    159,396    72,882   81,150  
Residential mortgage loans held for sale (at fair value)    27,806    15,457   13,899  
Investments available-for-sale (at fair value)    704,872    592,049   657,709  
Investments held-to-maturity -- fair value of $211,704 and $221,687 at December 31, 2015 and       
March 31, 2015, respectively    -    208,265   217,557  
Other equity securities    37,529    41,336   37,299  
Total loans and leases  3,560,688    3,495,370   3,164,706  
Less: allowance for loan and lease losses    (41,766)  (40,895)  (37,475) 
Net loans and leases  3,518,922    3,454,475   3,127,231  
Premises and equipment, net    53,307    53,214   51,299  
Other real estate owned    2,414    2,742   3,227  
Accrued interest receivable    13,660    13,443   12,505  
Goodwill    84,171    84,171   84,171  
Other intangible assets, net    105    138   403  
Other assets    114,426    117,208   114,930  
Total assets $4,716,608   $4,655,380  $4,401,380  
        
Liabilities       
Noninterest-bearing deposits $1,084,746   $1,001,841  $1,017,566  
Interest-bearing deposits  2,327,562    2,261,889   2,092,326  
Total deposits  3,412,308    3,263,730   3,109,892  
Securities sold under retail repurchase agreements and federal funds purchased    121,043    109,145   101,640  
Advances from FHLB    590,000    685,000   590,000  
Subordinated debentures    35,000    35,000   35,000  
Accrued interest payable and other liabilities    35,865    38,078   43,080  
Total liabilities  4,194,216    4,130,953   3,879,612  
        
Stockholders' Equity       
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 23,827,305       
24,295,971 and 24,733,868 at March 31, 2016, December 31, 2015 and March 31, 2015, respectively    23,827    24,296   24,734  
Additional paid in capital    163,522    175,588   186,342  
Retained earnings    330,810    325,840   308,546  
Accumulated other comprehensive income (loss)    4,233    (1,297)  2,146  
Total stockholders' equity    522,392    524,427   521,768  
Total liabilities and stockholders' equity $4,716,608   $4,655,380  $4,401,380  
        

 

Sandy Spring Bancorp, Inc. and Subsidiaries    
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED    
     
  Three Months Ended
 March 31,
(Dollars in thousands, except per share data)  2016   2015 
Interest Income:    
Interest and fees on loans and leases $   36,206   $32,139 
Interest on loans held for sale    134    76 
Interest on deposits with banks    53    22 
Interest and dividends on investment securities:    
Taxable    3,286    3,577 
Exempt from federal income taxes    1,973    2,258 
Interest on federal funds sold    1    - 
Total interest income    41,653    38,072 
Interest Expense:    
Interest on deposits    1,837    1,194 
Interest on retail repurchase agreements and federal funds purchased    66    50 
Interest on advances from FHLB    3,374    3,236 
Interest on subordinated debt    254    219 
Total interest expense    5,531    4,699 
Net interest income    36,122    33,373 
Provision for loan and lease losses    1,236    597 
Net interest income after provision for loan and lease losses    34,886    32,776 
Non-interest Income:    
Investment securities gains    1,769    - 
Service charges on deposit accounts    1,903    1,882 
Mortgage banking activities    535    1,178 
Wealth management income    4,405    4,916 
Insurance agency commissions    1,445    1,618 
Income from bank owned life insurance    615    713 
Bank card fees    1,089    1,057 
Other income    1,602    1,795 
Total non-interest income    13,363    13,159 
Non-interest Expenses:    
Salaries and employee benefits    18,230    17,299 
Occupancy expense of premises    3,473    3,489 
Equipment expenses    1,664    1,373 
Marketing    681    531 
Outside data services    1,363    1,261 
FDIC insurance    637    631 
Amortization of intangible assets    32    107 
Litigation expenses    -    200 
Other expenses    6,237    4,353 
Total non-interest expenses    32,317    29,244 
Income before income taxes    15,932    16,691 
Income tax expense    5,119    5,466 
Net income $   10,813   $11,225 
     
Net Income Per Share Amounts:    
Basic net income per share $   0.45   $0.45 
Diluted net income per share $   0.45   $  0.45 
Dividends declared per share $   0.24   $  0.22 
     

 

         
Sandy Spring Bancorp, Inc. and Subsidiaries        
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED      
         
   2016   2015  
(Dollars in thousands, except per share data) Q1 Q4Q3Q2Q1 
Profitability for the Quarter:        
Tax-equivalent interest income $   43,317   $  42,736 $  41,980 $  40,438 $  39,343  
Interest expense    5,531      5,297    5,201    4,916    4,699  
Tax-equivalent net interest income    37,786      37,439    36,779    35,522    34,644  
Tax-equivalent adjustment    1,664      1,662    1,663    1,589    1,271  
Provision for loan and lease losses    1,236      1,850    1,706    1,218    597  
Non-interest income    13,363      12,243    12,390    12,109    13,159  
Non-interest expenses    32,317      26,996    29,630    29,477    29,244  
Income before income taxes    15,932      19,174    16,170    15,347    16,691  
Income tax expense     5,119      6,372    5,175    5,014    5,466  
Net income  $   10,813   $  12,802 $  10,995 $  10,333 $  11,225  
Financial Performance:        
Pre-tax pre-provision income $   17,168   $  16,638 $  18,031 $  16,727 $  17,488  
Return on average assets  0.93%  1.11% 0.96% 0.93% 1.04% 
Return on average common equity  8.29%  9.73% 8.41% 8.02% 8.73% 
Net interest margin  3.44%  3.45% 3.43% 3.42% 3.44% 
Efficiency ratio - GAAP basis (1)  65.31%  56.22% 62.37% 64.02% 62.85% 
Efficiency ratio - Non-GAAP basis (1)  61.84%  63.08% 59.73% 61.35% 60.53% 
Per Share Data:        
Basic net income per share $   0.45   $  0.53 $  0.45 $  0.42 $  0.45  
Diluted net income per share $   0.45   $  0.52 $  0.45 $  0.42 $  0.45  
Average fully diluted shares  24,222,940    24,455,847  24,602,817  24,689,762  25,048,576  
Dividends declared per common share $   0.24   $  0.24 $  0.22 $  0.22 $  0.22  
Non-interest Income:        
Securities gains (losses) $   1,769   $  16 $  1 $  19 $    -   
Service charges on deposit accounts    1,903      1,950    1,936    1,839    1,882  
Mortgage banking activities    535      548    566    822    1,178  
Wealth management income    4,405      4,891    4,963    5,161    4,916  
Insurance agency commissions    1,445      1,029    1,648    881    1,618  
Income from bank owned life insurance    615      634    618    606    713  
Bank card fees    1,089      1,177    1,198    1,220    1,057  
Other income    1,602      1,998    1,460    1,561    1,795  
Total Non-interest Income $   13,363   $  12,243 $  12,390 $  12,109 $  13,159  
Non-interest Expense:        
Salaries and employee benefits $   18,230   $  18,437 $  17,733 $  17,534 $  17,299  
Occupancy expense of premises    3,473      3,061    3,086    3,173    3,489  
Equipment expenses    1,664      1,608    1,600    1,490    1,373  
Marketing    681      735    688    942    531  
Outside data services    1,363      1,331    1,329    1,102    1,261  
FDIC insurance    637      641    565    654    631  
Amortization of intangible assets    32      52    107    106    107  
Litigation expenses    -      (4,386)   155    162    200  
Professional fees    1,138      1,322    1,089    1,199    1,209  
Other real estate owned expenses    17      14    48    4    10  
Other expenses    5,082      4,181    3,230    3,111    3,134  
Total Non-interest Expense $   32,317   $  26,996 $  29,630 $  29,477 $  29,244  
         
(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      
         
   2016   2015  
(Dollars in thousands) Q1 Q4Q3Q2Q1 
Balance Sheets at Quarter End:        
Residential mortgage loans $   804,105   $  796,358 $  773,889 $  744,195 $  728,858  
Residential construction loans    138,221    129,281  139,492  137,134  130,321  
Commercial ADC loans    261,204    255,980  239,160  223,103  203,731  
Commercial investor real estate loans    783,161    719,084  710,694  694,179  668,931  
Commercial owner occupied real estate loans    675,560    678,027  680,601  643,973  618,846  
Commercial business loans    451,239    465,765  423,855  409,795  385,452  
Leasing    -      -   19  21  36  
Consumer loans    447,198    450,875  444,729  436,465  428,531  
Total loans and leases  3,560,688    3,495,370  3,412,439  3,288,865  3,164,706  
Allowance for loan and lease losses  (41,766)  (40,895) (39,661) (38,713) (37,475) 
Loans held for sale    27,806    15,457  10,418  19,445  13,899  
Investment securities  742,401    841,650  862,409  878,284  912,565  
Interest-earning assets  4,447,063    4,378,403  4,339,375  4,222,667  4,125,549  
Total assets  4,716,608    4,655,380  4,611,034  4,507,367  4,401,380  
Noninterest-bearing demand deposits  1,084,746    1,001,841  1,068,299  1,092,413  1,017,566  
Total deposits  3,412,308    3,263,730  3,275,668  3,247,346  3,109,892  
Customer repurchase agreements    121,043    109,145  121,378  111,817  101,640  
Total interest-bearing liabilities  3,073,605    3,091,034  2,973,747  2,851,750  2,818,966  
Total stockholders' equity  522,392    524,427  523,594  518,873  521,768  
Quarterly Average Balance Sheets:        
Residential mortgage loans $   807,443   $  781,015 $  754,007 $  734,382 $  724,248  
Residential construction loans    134,708      133,812    134,448    137,216    132,456  
Commercial ADC loans    261,687      247,612    227,545    218,341    206,105  
Commercial investor real estate loans    750,821      717,742    704,068    668,883    645,163  
Commercial owner occupied real estate loans    677,786      673,883    656,337    624,407    611,722  
Commercial business loans    460,903      424,510    413,300    398,510    383,111  
Leasing    -       17    19    28    44  
Consumer loans    451,075      448,439    441,740    434,011    425,434  
Total loans and leases    3,544,423      3,427,030    3,331,464    3,215,778    3,128,283  
Loans held for sale    14,036    11,951  21,070  14,075  7,053  
Investment securities  810,593    840,276  869,461  898,237  925,683  
Interest-earning assets  4,411,796    4,320,674  4,261,939  4,162,963  4,097,648  
Total assets  4,685,747    4,594,025  4,537,142  4,438,670  4,372,988  
Noninterest-bearing demand deposits  1,021,471    1,058,215  1,063,500  1,023,042  986,688  
Total deposits  3,300,131    3,285,299  3,263,993  3,128,562  3,056,186  
Customer repurchase agreements    110,862      125,275    121,127    106,179    90,020  
Total interest-bearing liabilities  3,103,710    2,968,555  2,906,348  2,852,414  2,817,575  
Total stockholders' equity  524,309    521,786  518,619  516,940  521,346  
Financial Measures:        
Average equity to average assets  11.19%  11.36% 11.43% 11.65% 11.92% 
Investment securities to earning assets  16.69%  19.22% 19.87% 20.80% 22.12% 
Loans to earning assets  80.07%  79.83% 78.64% 77.89% 76.71% 
Loans to assets  75.49%  75.08% 74.01% 72.97% 71.90% 
Loans to deposits  104.35%  107.10% 104.18% 101.28% 101.76% 
Capital Measures:        
Tier 1 leverage  (1)  10.23%  10.60% 10.65% 10.83% 11.00% 
Tier 1 capital to risk-weighted assets  (1)  12.88%  13.13% 13.17% 13.54% 14.01% 
Total regulatory capital to risk-weighted assets  (1)  14.02%  14.25% 14.27% 14.65% 15.12% 
Common equity tier 1 capital to risk-weighted assets  (1)  11.92%  12.17% 12.20% 12.53% 14.01% 
Book value per share $   21.92   $  21.58 $  21.44 $  21.12 $  21.10  
Outstanding shares  23,827,305    24,295,971  24,424,944    24,562,471    24,733,868  
(1) Estimated ratio at March 31, 2016        
         

 

Sandy Spring Bancorp, Inc. and Subsidiaries           
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED         
            
   2016   2015  
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31, 
Non-Performing Assets:           
Loans and leases 90 days past due:           
Commercial business $   -   $-  $-  $-  $-  
Commercial real estate:           
Commercial AD&C    -    -   -   -   -  
Commercial investor real estate    -    -   -   -   -  
Commercial owner occupied real estate    -    -   -   -   -  
Leasing    -    -   1   2   -  
Consumer    1    -   -   7   -  
Residential real estate:           
Residential mortgage    -    -   -   -   -  
Residential construction    -    -   -   -   -  
Total loans and leases 90 days past due    1    -   1   9   -  
Non-accrual loans and leases:           
Commercial business    3,741    3,696   3,881   3,285   4,166  
Commercial real estate:           
Commercial AD&C    147    194   194   194   1,363  
Commercial investor real estate    7,885    8,368   8,609   10,023   10,083  
Commercial owner occupied real estate    7,149    6,340   7,932   8,423   8,974  
Leasing    -     -   -   -   -  
Consumer    2,715    2,193   1,621   1,214   1,962  
Residential real estate:           
Residential mortgage    9,329    8,822   7,488   7,780   3,235  
Residential construction    412    418   770   780   788  
Total non-accrual loans and leases    31,378    30,031   30,495   31,699   30,571  
Total restructured loans - accruing    4,716    4,467   6,419   5,620   5,446  
Total non-performing loans and leases    36,095    34,498   36,915   37,328   36,017  
Other assets and real estate owned (OREO)    2,414    2,742   2,619   4,514   3,227  
Total non-performing assets $   38,509   $37,240  $39,534  $41,842  $39,244  
            
  For the quarter ended 
  March 31, December 31, September 30, June 30, March 31, 
(Dollars in thousands)  2016   2015   2015   2015   2015  
Analysis of Non-accrual Loan and Lease Activity:           
Balance at beginning of period $   30,031   $30,495  $31,699  $30,571  $28,530  
Non-accrual balances transferred to OREO    -    (423)  (180)  (1,309)  (32) 
Non-accrual balances charged-off    (274)  (869)  (752)  (549)  (1,077) 
Net payments or draws    (914)  (3,084)  (1,846)  (2,970)  (1,067) 
Loans placed on non-accrual    2,535    3,912   1,574   5,956   4,217  
Non-accrual loans brought current    -    -   -   -   -  
Balance at end of period $   31,378   $30,031  $30,495  $31,699  $30,571  
            
Analysis of Allowance for Loan Losses:           
Balance at beginning of period $   40,895   $39,661  $38,713  $37,475  $37,802  
Provision for loan and lease losses    1,236    1,850   1,706   1,218   597  
Less loans charged-off, net of recoveries:           
Commercial business    67    (128)  (25)  73   (89) 
Commercial real estate:           
Commercial AD&C    48    -   -   (547)  706  
Commercial investor real estate    192    (4)  (5)  85   (5) 
Commercial owner occupied real estate    (3)  725   104   (1)  212  
Leasing    -    4   -   -   -  
Consumer    54    (31)  348   395   43  
Residential real estate:           
Residential mortgage    15    80   342   (18)  65  
Residential construction    (8)  (30)  (6)  (7)  (8) 
Net charge-offs    365    616   758   (20)  924  
Balance at end of period $   41,766   $40,895  $39,661  $38,713  $37,475  
            
Asset Quality Ratios:           
Non-performing loans to total loans  1.01%  0.99%  1.08%  1.13%  1.14% 
Non-performing assets to total assets  0.82%  0.80%  0.86%  0.93%  0.89% 
Allowance for loan losses to loans  1.17%  1.17%  1.16%  1.18%  1.18% 
Allowance for loan losses to non-performing loans  115.72%  118.54%  107.44%  103.71%  104.05% 
Annualized net charge-offs to average loans  0.04%  0.07%  0.09%  0.00%  0.12% 
            

 

               
Sandy Spring Bancorp, Inc. and Subsidiaries             
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED        
               
  Three Months Ended March 31, 
     2016        2015    
        Annualized        Annualized  
  Average   (1) Average  Average   (1) Average 
(Dollars in thousands and tax-equivalent) Balances Interest Yield/Rate  Balances Interest Yield/Rate 
Assets              
Residential mortgage loans $   807,443   $   6,868   3.40%$724,248  $6,124  3.38%
Residential construction loans  134,708    1,195   3.57   132,456   1,221  3.74 
Total mortgage loans  942,151    8,063   3.43   856,704   7,345  3.44 
Commercial ADC loans  261,687    2,998   4.61   206,105   2,337  4.60 
Commercial investor real estate loans  750,821    8,612   4.61   645,163   7,579  4.76 
Commercial owner occupied real estate loans  677,786    8,085   4.80   611,722   7,165  4.99 
Commercial business loans  460,903    5,013   4.37   383,111   4,212  4.38 
Leasing    -      -     -    44   1  5.19 
Total commercial loans and leases  2,151,197    24,708   4.62   1,846,145   21,294  4.74 
Consumer loans  451,075    3,889   3.49   425,434   3,500  3.36 
Total loans and leases (2)  3,544,423    36,660   4.16   3,128,283   32,139  4.19 
Loans held for sale  14,036    134   3.82   7,053   76  4.33 
Taxable securities  523,873    3,413   2.61   629,266   3,936  2.54 
Tax-exempt securities (3)  286,720    3,056   4.26   296,417   3,170  4.34 
Total investment securities  810,593    6,469   3.19   925,683   7,106  3.07 
Interest-bearing deposits with banks  42,255    53   0.50   36,155   22  0.25 
Federal funds sold  489      1   0.47   474   -  0.22 
Total interest-earning assets  4,411,796    43,317   3.94   4,097,648   39,343  3.90 
               
Less: allowance for loan and lease losses  (41,070)       (37,444)     
Cash and due from banks  47,039         46,430      
Premises and equipment, net  53,574         50,658      
Other assets  214,408         215,696      
Total assets $ 4,685,747        $4,372,988      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $   569,219    108   0.08%$524,059   106  0.08%
Regular savings deposits  290,243      42   0.06   270,198   34  0.05 
Money market savings deposits  897,034    437   0.20   831,707   273  0.13 
Time deposits  522,164    1,250   0.96   443,534   781  0.71 
Total interest-bearing deposits  2,278,660    1,837   0.32   2,069,498   1,194  0.23 
Other borrowings  110,984      66   0.24   90,188   50  0.22 
Advances from FHLB  679,066      3,374   2.00   622,889   3,236  2.11 
Subordinated debentures  35,000      254   2.90   35,000   219  2.50 
Total interest-bearing liabilities  3,103,710    5,531   0.72   2,817,575   4,699  0.68 
               
Noninterest-bearing demand deposits  1,021,471         986,688      
Other liabilities  36,257         47,379      
Stockholders' equity  524,309         521,346      
  Total liabilities and stockholders' equity $   4,685,747        $4,372,988      
               
Net interest income and spread   $   37,786   3.22 %  $34,644  3.22%
Less: tax-equivalent adjustment      1,664         1,271    
Net interest income   $   36,122        $33,373    
               
Interest income/earning assets     3.94 %    3.90%
Interest expense/earning assets       0.50       0.46 
Net interest margin     3.44 %    3.44%
               
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2016 and 2015. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.7 million and $1.3 million in 2016 and 2015, 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 Web site: www.sandyspringbank.com
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