Market Overview

Sandy Spring Bancorp Reports Net Income of $13.3 Million for the Fourth Quarter and Record Annual Earnings of $48.3 Million

Share:

OLNEY, Md., Jan. 19, 2017 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq: SASR) the parent company of Sandy Spring Bank, today reported net income for the fourth quarter of 2016 of $13.3 million ($0.55 per diluted share) compared to net income of $12.8 million ($0.52 per diluted share) for the fourth quarter of 2015 and net income of $13.5 million ($0.56 per diluted share) for the third quarter of 2016.

Net income for the year ended December 31, 2016, was $48.3 million ($2.00 per diluted share) compared to net income of $45.4 million ($1.84 per diluted share) for the prior year.

"Our continued ability to meet the needs of our clients is reflected in our record performance this year. Strong loan growth, combined with an improved net interest margin, were the primary drivers to our profitability for both the fourth quarter and full year. This record performance enabled us to increase our dividend to its highest level ever and supported our repurchase of $13.3 million of the Company's shares during the year. Shareholders also benefited from a 48% increase in our stock price over the year," said Daniel J. Schrider, President and Chief Executive Officer.  

Fourth Quarter Highlights: 

  • Total loans increased 12% compared to the fourth quarter of 2015 and 4% compared to the third quarter of 2016. These increases were driven primarily by year-over-year growth of 17% in the commercial loan portfolio.
     
  • The net interest margin improved to 3.52% for the fourth quarter of 2016, compared to 3.45% for the fourth quarter of 2015 and 3.50% for the third quarter of 2016.
     
  • Pre-tax, pre-provision income increased 25% compared with the fourth quarter of 2015.
     
  • The Non-GAAP efficiency ratio was 57.54% for the current quarter as compared to 63.08% for the fourth quarter of 2015 and 56.33% for the third quarter of 2016.
     
  • Return on equity increased to 9.92% for the fourth quarter of 2016 compared to 9.73% for the fourth quarter of 2015 and decreased compared to 10.11% for the third quarter of 2016.

Review of Balance Sheet and Credit Quality

Total assets grew 9% to $5.1 billion at December 31, 2016 compared to $4.7 billion at December 31, 2015.  This growth was driven by the increase in the loan portfolio as total loans ended the year at $3.9 billion. 

At December 31, 2016, combined noninterest-bearing and interest-bearing checking account balances, an important performance driver of multiple-product banking relationships with clients, increased 12% compared to balances at December 31, 2015. Total deposits and certain other short-term borrowings that comprise the funding sources derived from clients, increased 10% compared to December 31, 2015.

Tangible common equity totaled $454 million at December 31, 2016 compared to $441 million at December 31, 2015. The ratio of tangible common equity to tangible assets decreased to 9.07% at December 31, 2016 from 9.66% at December 31, 2015 due to the combined impact of the growth in assets and share repurchases over the preceding 12 months. Dividends per common share increased to $0.26 per share in the fourth quarter and totaled $0.98 per share for the year compared to $0.90 per share for 2015, a 9% increase. 

At December 31, 2016, the Company had a total risk-based capital ratio of 12.80%, a common equity tier 1 risk-based capital ratio of 11.01%, a tier 1 risk-based capital ratio of 11.74% and a tier 1 leverage ratio of 10.14%. On January 6, 2017 the Company repurchased all of its remaining $30 million in subordinated debentures at par value. The Company estimates that this will reduce the above capital ratios by approximately 75 basis points and that the Company will remain well-capitalized for regulatory purposes. This strategy was executed to improve the Company's future net interest margin.

Non-performing loans totaled $31.9 million at December 31, 2016 compared to $34.5 million at December 31, 2015 and $32.0 million at September 30, 2016. The level of non-performing loans to total loans decreased to 0.81% at December 31, 2016 compared to 0.99% at December 31, 2015 as a result of the growth in the loan portfolio and a concurrent decrease in the level of non-performing loans.

Loan charge-offs, net of recoveries, totaled $0.4 million for the fourth quarter of 2016 compared to $0.6 million for the fourth quarter of 2015. The allowance for loan losses represented 1.12% of outstanding loans and 138% of non-performing loans at December 31, 2016 compared to 1.17% of outstanding loans and 119% of non-performing loans at December 31, 2015. As the ratio of the allowance to outstanding loans decreased due to loan growth during the year, the coverage ratio improved due to the decline in non-performing loans, a reflection of improved credit quality in the loan portfolio. 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 2016 increased 9% compared to the fourth quarter of 2015. The net interest margin improved to 3.52% for the fourth quarter of 2016 compared to 3.45% for the fourth quarter of 2015.  This improvement reflects the impact of loan growth over the preceding year combined with the cumulative benefits associated with the prepayment of FHLB advances and the early call of subordinated debentures, and the shift from lower yielding investments to the higher yielding loan portfolio during 2016.  

The provision for loan losses was $0.6 million for the fourth quarter of 2016 compared to $1.9 million for the fourth quarter of 2015 and $0.8 million for the third quarter of 2016. The decrease in the current quarter's charge versus the prior year's quarter reflects lower net-charge offs during the quarter, and continued improvement in loan quality which partially offset the effects of loan growth on the provision.

Non-interest income increased to $12.3 million for the fourth quarter of 2016 compared to $12.2 million for the fourth quarter of 2015 due to higher mortgage banking income from increased loan sales volume that more than offset the decrease in income from wealth management.

Non-interest expenses increased 13% to $30.5 million for the fourth quarter of 2016 compared to $27.0 million in the fourth quarter of 2015. The prior year quarter included a $4.5 million recapture of previously accrued litigation expenses and a $1.0 million charitable contribution. Excluding these transactions, total non-interest expenses remained virtually level compared to 2015. The non-GAAP efficiency ratio was 57.54% for the fourth quarter of 2016 compared to 63.08% for the fourth quarter of 2015 as a result of the combined growth in the net interest income and the effects of expense control discipline. 

Net interest income for the year ended December 31, 2016 increased 8% compared to 2015 due primarily to an increase in average loans, which was funded, in part, by a decrease in lower-yielding investment securities. 

The provision for loan losses was a charge of $5.5 million for the year ended December 31, 2016 compared to a charge of $5.4 million for 2015. The provision for the current year is primarily due to growth in the loan portfolio that was offset by the decrease in nonperforming loans and improvement in loan quality.

Non-interest income increased 2% to $51.0 million for 2016 compared to $49.9 million for 2015.  This increase was driven by $1.9 million in gains on securities sales and a gain of $1.2 million due to the extinguishment of subordinated debentures during the first half of 2016. Excluding these transactions, non-interest income decreased 4% due to a decrease in income from wealth management resulting from the sale of a portion of the assets under management in the first quarter of 2016. 

Non-interest expenses increased 7% to $123.1 million for 2016 compared to $115.3 million for the prior year. This increase was due largely to prepayment penalties of $3.2 million for the early payoff of $75 million in high-rate FHLB advances in 2016, combined with the impact of the recapture of previously accrued litigation expenses and the charitable contribution that occurred in late 2015. Excluding these transactions, non-interest expenses increased 1% over the prior year. This increase was due primarily to higher software and outside data services expenses. The non-GAAP efficiency ratio was 58.66% for 2016 compared to 61.09% for 2015.

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 2, 2017.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10098228.

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 $5.1 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 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    Twelve Months Ended     
  December 31, %  December 31, %   
(Dollars in thousands, except per share data)  2016  2015 Change   2016  2015 Change   
Results of Operations:                
Net interest income $   38,967  $35,777 9 % $   149,552  $138,199 8 %  
Provision for loan losses    572   1,850 (69)     5,546   5,371 3    
Non-interest income    12,344   12,243 1      51,042   49,901 2    
Non-interest expenses    30,544   26,996 13      123,058   115,347 7    
Income before income taxes    20,195   19,174 5      71,990   67,382 7    
Net income    13,316   12,802 4      48,250   45,355 6    
                 
Pre-tax pre-provision income $   20,767  $16,638 25   $   77,536  $68,884 13    
                 
Return on average assets    1.09 % 1.11%      1.02 % 1.01%    
Return on average common equity    9.92 % 9.73%      9.15 % 8.73%    
Net interest margin    3.52 % 3.45%      3.49 % 3.44%    
Efficiency ratio - GAAP basis  (1)    59.53 % 56.22%      61.35 % 61.32%    
Efficiency ratio - Non-GAAP basis  (1)    57.54 % 63.08%      58.66 % 61.09%    
                 
Per share data:                
Basic net income $   0.55  $0.53 4 % $   2.00  $1.84 9 %  
Diluted net income $   0.55  $0.52 6   $   2.00  $1.84 9    
Average fully diluted shares   24,140,534   24,455,847 (1)    24,149,121   24,697,908 (2)   
Dividends declared per share $   0.26  $0.24 8   $   0.98  $0.90 9    
Book value per share    22.32   21.58 3      22.32   21.58 3    
Tangible book value per share    18.98   18.17 4      18.98   18.17 4    
Outstanding shares   23,901,084   24,295,971 (2)    23,901,084   24,295,971 (2)   
                 
Financial Condition at period-end:                
Investment securities $   779,648  $841,650 (7)% $   779,648  $841,650 (7)%  
Loans    3,927,808   3,495,370 12      3,927,808   3,495,370 12    
Interest-earning assets    4,801,613   4,378,403 10      4,801,613   4,378,403 10    
Assets    5,091,383   4,655,380 9      5,091,383   4,655,380 9    
Deposits    3,577,544   3,263,730 10      3,577,544   3,263,730 10    
Interest-bearing liabilities    3,384,524   3,091,034 9      3,384,524   3,091,034 9    
Stockholders' equity    533,572   524,427 2      533,572   524,427 2    
                      
Capital ratios:                     
Tier 1 leverage  (4)    10.14 % 10.60%      10.14 % 10.60%    
Tier 1 capital to risk-weighted assets  (4)    11.74 % 13.13%      11.74 % 13.13%    
Total regulatory capital to risk-weighted assets  (4)    12.80 % 14.25%      12.80 % 14.25%    
Common equity tier 1 capital to risk-weighted assets  (4)    11.01 % 12.17%      11.01 % 12.17%    
Tangible common equity to tangible assets  (2)    9.07 % 9.66%      9.07 % 9.66%    
Average equity to average assets    10.95 % 11.36%      11.12 % 11.58%    
                      
Credit quality ratios:                     
Allowance for loan losses to loans    1.12 % 1.17%      1.12 % 1.17%    
Non-performing loans to total loans    0.81 % 0.99%      0.81 % 0.99%    
Non-performing assets to total assets    0.66 % 0.80%      0.66 % 0.80%    
Allowance for loan losses to non-performing loans    138.00 % 118.54%      138.00 % 118.54%    
Annualized net charge-offs to average loans  (3)    0.05 % 0.07%      0.06 % 0.07%    
                 
(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 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, excluding residential mortgage loans held-for-sale.
  
(4) Estimated ratio at December 31, 2016
  
                 

 

          
Sandy Spring Bancorp, Inc. and Subsidiaries         
RECONCILIATION TABLE - UNAUDITED         
          
  Three Months Ended Twelve Months Ended 
  December 31, December 31, 
(Dollars in thousands)  2016   2015   2016   2015  
Pre-tax pre-provision income:         
Net income $   13,316   $12,802  $   48,250   $45,355  
Plus non-GAAP adjustment:         
Litigation expenses    -     (4,386)    -     (3,869) 
Income taxes    6,879    6,372     23,740    22,027  
Provision for loan losses    572    1,850     5,546    5,371  
Pre-tax pre-provision income $   20,767   $16,638  $   77,536   $68,884  
          
Efficiency ratio - GAAP basis:         
Non-interest expenses $   30,544   $26,996  $   123,058   $115,347  
          
Net interest income plus non-interest income $   51,311   $48,020  $   200,594   $188,100  
          
Efficiency ratio - GAAP basis  59.53%  56.22%  61.35%  61.32% 
          
          
Efficiency ratio - Non-GAAP basis:         
Non-interest expenses $   30,544   $26,996  $   123,058   $115,347  
Less non-GAAP adjustment:         
Amortization of intangible assets    36    52     130    372  
Loss on FHLB Redemption    -     -     3,167    -  
Litigation expenses    -     (4,386)    -     (3,869) 
Non-interest expenses -  as adjusted $   30,508   $31,330  $   119,761   $118,844  
          
Net interest income plus non-interest income $   51,311   $48,020  $   200,594   $188,100  
Plus non-GAAP adjustment:         
Tax-equivalent income    1,718    1,662     6,711    6,478  
Less non-GAAP adjustments:         
Securities gains    13    16     1,932    36  
Gain on redemption of subordinated debentures    -    -     1,200    -  
Net interest income plus non-interest income - as adjusted $   53,016   $49,666  $   204,173   $194,542  
          
Efficiency ratio - Non-GAAP basis  57.54%  63.08%  58.66%  61.09% 
          
Tangible common equity ratio:         
Total stockholders' equity $   533,572   $524,427  $   533,572   $524,427  
Accumulated other comprehensive income    6,614    1,297     6,614    1,297  
Goodwill    (85,768)  (84,171)    (85,768)  (84,171) 
Other intangible assets, net    (680)  (138)    (680)  (138) 
Tangible common equity $   453,738   $441,415  $   453,738   $441,415  
          
Total assets $  5,091,383   $4,655,380  $   5,091,383   $4,655,380  
Goodwill    (85,768)  (84,171)    (85,768)  (84,171) 
Other intangible assets, net    (680)  (138)    (680)  (138) 
Tangible assets $  5,004,935   $4,571,071  $   5,004,935   $4,571,071  
          
Tangible common equity ratio  9.07%  9.66%  9.07%  9.66% 
          
Outstanding common shares    23,901,084    24,295,971     23,901,084    24,295,971  
Tangible book value per common share $   18.98   $18.17  $   18.98   $18.17  
          

 

      
Sandy Spring Bancorp, Inc. and Subsidiaries     
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED     
      
  December 31, December 31, 
(Dollars in thousands)  2016   2015  
Assets     
Cash and due from banks $   53,190   $46,956  
Federal funds sold    1,953    472  
Interest-bearing deposits with banks    78,982    25,454  
Cash and cash equivalents    134,125    72,882  
Residential mortgage loans held for sale (at fair value)    13,222    15,457  
Investments available-for-sale (at fair value)    733,554    592,049  
Investments held-to-maturity -- fair value of $211,704 at December 31, 2015    -    208,265  
Other equity securities    46,094    41,336  
Total loans    3,927,808    3,495,370  
Less: allowance for loan losses    (44,067)  (40,895) 
Net loans    3,883,741    3,454,475  
Premises and equipment, net    53,562    53,214  
Other real estate owned    1,911    2,742  
Accrued interest receivable    14,589    13,443  
Goodwill    85,768    84,171  
Other intangible assets, net    680    138  
Other assets    124,137    117,208  
Total assets $   5,091,383   $4,655,380  
      
Liabilities     
Noninterest-bearing deposits $   1,138,139   $1,001,841  
Interest-bearing deposits    2,439,405    2,261,889  
Total deposits    3,577,544    3,263,730  
Securities sold under retail repurchase agreements and federal funds purchased    125,119    109,145  
Advances from FHLB    790,000    685,000  
Subordinated debentures    30,000    35,000  
Accrued interest payable and other liabilities    35,148    38,078  
Total liabilities    4,557,811    4,130,953  
      
Stockholders' Equity     
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding     
23,901,084 and 24,295,971 at December 31, 2016 and December 31, 2015, respectively    23,901    24,296  
Additional paid in capital    165,871    175,588  
Retained earnings    350,414    325,840  
Accumulated other comprehensive loss    (6,614)  (1,297) 
Total stockholders' equity    533,572    524,427  
Total liabilities and stockholders' equity $   5,091,383   $4,655,380  
      

 

          
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)  2016  2015   2016  2015  
Interest Income:         
Interest and fees on loans $   39,510  $35,516  $  150,868  $135,170  
Interest on loans held for sale    93   122     387   544  
Interest on deposits with banks    57   29     213   98  
Interest and dividends on investment securities:         
Taxable    2,751   3,416     11,500   14,440  
Exempt from federal income taxes    1,830   1,991     7,583   8,059  
Interest on federal funds sold    2   -     5   1  
Total interest income    44,243   41,074     170,556   158,312  
Interest Expense:         
Interest on deposits    2,155   1,685     8,161   5,878  
Interest on retail repurchase agreements and federal funds purchased    78   76     290   255  
Interest on advances from FHLB    2,798   3,307     11,610   13,081  
Interest on subordinated debt    245   229     943   899  
Total interest expense    5,276   5,297     21,004   20,113  
Net interest income    38,967   35,777     149,552   138,199  
Provision for loan losses    572   1,850     5,546   5,371  
Net interest income after provision for loan losses    38,395   33,927     144,006   132,828  
Non-interest Income:         
Investment securities gains    13   16     1,932   36  
Service charges on deposit accounts    2,059   1,950     7,953   7,607  
Mortgage banking activities    1,279   548     4,049   3,114  
Wealth management income    4,605   4,891     17,805   19,931  
Insurance agency commissions    1,228   1,029     5,408   5,176  
Income from bank owned life insurance    616   634     2,462   2,571  
Bank card fees    1,176   1,177     4,674   4,652  
Other income    1,368   1,998     6,759   6,814  
Total non-interest income    12,344   12,243     51,042   49,901  
Non-interest Expenses:         
Salaries and employee benefits    18,055   18,437     71,354   71,003  
Occupancy expense of premises    3,195   3,061     12,960   12,809  
Equipment expenses    1,781   1,608     6,883   6,071  
Marketing    880   735     2,851   2,896  
Outside data services    1,310   1,331     5,377   5,023  
FDIC insurance    729   641     2,741   2,491  
Amortization of intangible assets    36   52     130   372  
Litigation expenses    -   (4,386)    -   (3,869) 
Other expenses    4,558   5,517     20,762   18,551  
Total non-interest expenses    30,544   26,996     123,058   115,347  
Income before income taxes    20,195   19,174     71,990   67,382  
Income tax expense    6,879   6,372     23,740   22,027  
Net income $   13,316  $12,802  $   48,250  $45,355  
          
Net Income Per Share Amounts:         
Basic net income per share $   0.55  $0.53  $   2.00  $1.84  
Diluted net income per share $   0.55  $0.52  $   2.00  $1.84  
Dividends declared per share $   0.26  $0.24  $   0.98  $0.90  
          

 

                  
Sandy Spring Bancorp, Inc. and Subsidiaries                 
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED               
                  
   2016   2015  
(Dollars in thousands, except per share data) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 
Profitability for the Quarter:                 
Tax-equivalent interest income $   45,961   $44,545  $43,443  $43,317  $42,736  $41,980  $40,438  $39,343  
Interest expense    5,276    5,126   5,071   5,531   5,297   5,201   4,916   4,699  
Tax-equivalent net interest income    40,685    39,419   38,372   37,786   37,439   36,779   35,522   34,644  
Tax-equivalent adjustment    1,718    1,688   1,640   1,664   1,662   1,663   1,589   1,271  
Provision for loan losses    572    781   2,957   1,236   1,850   1,706   1,218   597  
Non-interest income    12,344    12,584   12,751   13,363   12,243   12,390   12,109   13,159  
Non-interest expenses    30,544    29,326   30,871   32,317   26,996   29,630   29,477   29,244  
Income before income taxes    20,195    20,208   15,655   15,932   19,174   16,170   15,347   16,691  
Income tax expense    6,879    6,734   5,008   5,119   6,372   5,175   5,014   5,466  
Net income $   13,316   $13,474  $10,647  $10,813  $12,802  $10,995  $10,333  $11,225  
Financial Performance:                 
Pre-tax pre-provision income $   20,767   $20,989  $18,612  $17,168  $16,638  $18,031  $16,727  $17,488  
Return on average assets  1.09%  1.13%  0.92%  0.93%  1.11%  0.96%  0.93%  1.04% 
Return on average common equity  9.92%  10.11%  8.21%  8.29%  9.73%  8.41%  8.02%  8.73% 
Net interest margin  3.52%  3.50%  3.51%  3.44%  3.45%  3.43%  3.42%  3.44% 
Efficiency ratio - GAAP basis (1)  59.53%  58.28%  62.39%  65.31%  56.22%  62.37%  64.02%  62.85% 
Efficiency ratio - Non-GAAP basis (1)  57.54%  56.33%  59.12%  61.84%  63.08%  59.73%  61.35%  60.53% 
Per Share Data:                 
Basic net income per share $   0.55   $0.56  $0.45  $0.45  $0.53  $0.45  $0.42  $0.45  
Diluted net income per share $   0.55   $0.56  $0.44  $0.45  $0.52  $0.45  $0.42  $0.45  
Average fully diluted shares  24,140,534    24,122,923   24,108,668   24,222,940   24,455,847   24,602,817   24,689,762   25,048,576  
Dividends declared per common share $   0.26   $0.24  $0.24  $0.24  $0.24  $0.22  $0.22  $0.22  
Non-interest Income:                 
Securities gains $   13   $-  $150  $1,769  $16  $1  $19  $-  
Service charges on deposit accounts    2,059    2,035   1,956   1,903   1,950   1,936   1,839   1,882  
Mortgage banking activities    1,279    1,129   1,106   535   548   566   822   1,178  
Wealth management income    4,605    4,347   4,448   4,405   4,891   4,963   5,161   4,916  
Insurance agency commissions    1,228    1,786   949   1,445   1,029   1,648   881   1,618  
Income from bank owned life insurance    616    616   615   615   634   618   606   713  
Bank card fees    1,176    1,189   1,220   1,089   1,177   1,198   1,220   1,057  
Other income    1,368    1,482   2,307   1,602   1,998   1,460   1,561   1,795  
Total Non-interest Income $   12,344   $12,584  $12,751  $13,363  $12,243  $12,390  $12,109  $13,159  
Non-interest Expense:                 
Salaries and employee benefits $   18,055   $17,848  $17,221  $18,230  $18,437  $17,733  $17,534  $17,299  
Occupancy expense of premises    3,195    3,130   3,162   3,473   3,061   3,086   3,173   3,489  
Equipment expenses    1,781    1,745   1,693   1,664   1,608   1,600   1,490   1,373  
Marketing    880    628   662   681   735   688   942   531  
Outside data services    1,310    1,349   1,355   1,363   1,331   1,329   1,102   1,261  
FDIC insurance    729    726   649   637   641   565   654   631  
Amortization of intangible assets    36    34   28   32   52   107   106   107  
Litigation expenses    -     -   -   -   (4,386)  155   162   200  
Professional fees    1,268    987   1,447   1,138   1,322   1,089   1,199   1,209  
Other real estate owned expenses    2    5   (5)  17   14   48   4   10  
Other expenses    3,288    2,874   4,659   5,082   4,181   3,230   3,111   3,134  
Total Non-interest Expense $   30,544   $29,326  $30,871  $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) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1    
Balance Sheets at Quarter End:                    
Residential mortgage loans $   841,692   $854,055  $820,618  $804,105  $796,358  $773,889  $744,195  $728,858     
Residential construction loans    150,229    144,998   142,710   138,221   129,281   139,492   137,134   130,321     
Commercial AD&C loans    308,279    302,522   285,585   261,204   255,980   239,160   223,103   203,731     
Commercial investor real estate loans    928,113    847,946   824,252   783,161   719,084   710,694   694,179   668,931     
Commercial owner occupied real estate loans    775,552    736,744   700,599   675,560   678,027   680,601   643,973   618,846     
Commercial business loans    467,286    444,129   451,711   451,239   465,765   423,855   409,795   385,452     
Leasing    -    -   -   -   -   19   21   36     
Consumer loans  456,657    450,113   447,149   447,198   450,875   444,729   436,465   428,531     
Total loans  3,927,808    3,780,507   3,672,624   3,560,688   3,495,370   3,412,439   3,288,865   3,164,706     
Allowance for loan losses  (44,067)  (43,942)  (43,384)  (41,766)  (40,895)  (39,661)  (38,713)  (37,475)    
Loans held for sale  13,222    15,822   13,490   27,806   15,457   10,418   19,445   13,899     
Investment securities  779,648    691,471   734,828   742,401   841,650   862,409   878,284   912,565     
Interest-earning assets  4,801,613    4,537,331   4,461,180   4,447,063   4,378,403   4,339,375   4,222,667   4,125,549     
Total assets  5,091,383    4,810,611   4,739,449   4,716,608   4,655,380   4,611,034   4,507,367   4,401,380     
Noninterest-bearing demand deposits  1,138,139    1,154,227   1,176,135   1,084,746   1,001,841   1,068,299   1,092,413   1,017,566     
Total deposits  3,577,544    3,537,157   3,510,141   3,412,308   3,263,730   3,275,668   3,247,346   3,109,892     
Customer repurchase agreements    125,119    124,205   117,887   121,043   109,145   121,378   111,817   101,640     
Total interest-bearing liabilities  3,384,524    3,087,135   2,996,893   3,073,605   3,091,034   2,973,747   2,851,750   2,818,966     
Total stockholders' equity  533,572    536,655   529,479   522,392   524,427   523,594   518,873   521,768     
Quarterly Average Balance Sheets:                    
Residential mortgage loans $   848,399   $836,452  $811,705  $807,443  $781,015  $754,007  $734,382  $724,248     
Residential construction loans    148,248    147,602   142,854   134,708   133,812   134,448   137,216   132,456     
Commercial AD&C loans    310,110    287,836   272,090   261,687   247,612   227,545   218,341   206,105     
Commercial investor real estate loans    878,511    832,529   788,785   750,821   717,742   704,068   668,883   645,163     
Commercial owner occupied real estate loans    750,679    717,371   684,907   677,786   673,883   656,337   624,407   611,722     
Commercial business loans    452,195    446,123   453,459   460,903   424,510   413,300   398,510   383,111     
Leasing    -     -   -   -   17   19   28   44     
Consumer loans    454,349    450,171   449,594   451,075   448,439   441,740   434,011   425,434     
Total loans    3,842,491    3,718,084   3,603,394   3,544,423   3,427,030   3,331,464   3,215,778   3,128,283     
Loans held for sale    12,454    10,207   8,326   14,036   11,951   21,070   14,075   7,053     
Investment securities  703,574    709,527   739,132   810,593   840,276   869,461   898,237   925,683     
Interest-earning assets  4,599,426    4,477,438   4,394,879   4,411,796   4,320,674   4,261,939   4,162,963   4,097,648     
Total assets  4,878,660    4,747,020   4,664,343   4,685,747   4,594,025   4,537,142   4,438,670   4,372,988     
Noninterest-bearing demand deposits  1,167,379    1,131,739   1,082,762   1,021,471   1,058,215   1,063,500   1,023,042   986,688     
Total deposits  3,582,437    3,528,665   3,429,897   3,300,131   3,285,299   3,263,993   3,128,562   3,056,186     
Customer repurchase agreements    128,471    120,702   122,597   110,862   125,275   121,127   106,179   90,020     
Total interest-bearing liabilities  3,138,420    3,045,998   3,020,505   3,103,710   2,968,555   2,906,348   2,852,414   2,817,575     
Total stockholders' equity  534,057    530,241   521,387   524,309   521,786   518,619   516,940   521,346     
Financial Measures:                    
Average equity to average assets  10.95%  11.17%  11.18%  11.19%  11.36%  11.43%  11.65%  11.92%    
Investment securities to earning assets  16.24%  15.24%  16.47%  16.69%  19.22%  19.87%  20.80%  22.12%    
Loans to earning assets  81.80%  83.32%  82.32%  80.07%  79.83%  78.64%  77.89%  76.71%    
Loans to assets  77.15%  78.59%  77.49%  75.49%  75.08%  74.01%  72.97%  71.90%    
Loans to deposits  109.79%  106.88%  104.63%  104.35%  107.10%  104.18%  101.28%  101.76%    
Capital Measures:                    
Tier 1 leverage  (1)  10.14%  10.25%  10.29%  10.23%  10.60%  10.65%  10.83%  11.00%    
Tier 1 capital to risk-weighted assets  (1)  11.74%  12.17%  12.42%  12.74%  13.13%  13.17%  13.54%  14.01%    
Total regulatory capital to risk-weighted assets  (1)  12.80%  13.29%  13.57%  13.86%  14.25%  14.27%  14.65%  15.12%    
Common equity tier 1 capital to risk-weighted assets  (1)  11.01%  11.41%  11.63%  11.79%  12.17%  12.20%  12.53%  14.01%    
Book value per share $   22.32   $22.47  $22.18  $21.92  $21.58  $21.44  $21.12  $21.10     
Outstanding shares    23,901,084    23,886,651   23,874,650   23,827,305   24,295,971   24,424,944   24,562,471   24,733,868     
(1) Estimated ratio at December 31, 2016                    
                     

 

                    
Sandy Spring Bancorp, Inc. and Subsidiaries                   
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED                 
                    
   2016   2015    
(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 $   -   $163  $-  $-  $-  $-  $-  $-    
Commercial real estate:                   
Commercial AD&C    -    -   -   -   -   -   -   -    
Commercial investor real estate    -    -   -   -   -   -   -   -    
Commercial owner occupied real estate    -    -   -   -   -   -   -   -    
Leasing    -    -   -   -   -   1   2   -    
Consumer    -    -   2   1   -   -   7   -    
Residential real estate:                   
Residential mortgage    232    -   -   -   -   -   -   -    
Residential construction    -    -   -   -   -   -   -   -    
Total loans and leases 90 days past due    232    163   2   1   -   1   9   -    
Non-accrual loans and leases:                   
Commercial business    5,833    4,140   4,263   3,741   3,696   3,881   3,285   4,166    
Commercial real estate:                   
Commercial AD&C    137    137   137   147   194   194   194   1,363    
Commercial investor real estate    8,107    9,189   8,868   7,885   8,368   8,609   10,023   10,083    
Commercial owner occupied real estate    4,823    5,591   5,678   7,149   6,340   7,932   8,423   8,974    
Leasing    -     -   -   -   -   -   -   -    
Consumer    2,859    2,726   2,600   2,715   2,193   1,621   1,214   1,962    
Residential real estate:                   
Residential mortgage    7,257    7,321   6,186   9,329   8,822   7,488   7,780   3,235    
Residential construction    195    199   202   412   418   770   780   788    
Total non-accrual loans and leases    29,211    29,303   27,934   31,378   30,031   30,495   31,699   30,571    
Total restructured loans - accruing    2,489    2,512   3,420   4,716   4,467   6,419   5,620   5,446    
Total non-performing loans and leases    31,932    31,978   31,356   36,095   34,498   36,915   37,328   36,017    
Other assets and real estate owned (OREO)    1,911    1,274   1,311   2,414   2,742   2,619   4,514   3,227    
Total non-performing assets $   33,843   $33,252  $32,667  $38,509  $37,240  $39,534  $41,842  $39,244    
                    
  For the Quarter Ended,   
  December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,   
(Dollars in thousands)  2016   2016   2016   2016   2015   2015   2015   2015    
Analysis of Non-accrual Loan and Lease Activity:                   
Balance at beginning of period $   29,303   $27,934  $31,378  $30,031  $30,495  $31,699  $30,571  $28,530    
Non-accrual balances transferred to OREO    (637)  (38)  -   -   (423)  (180)  (1,309)  (32)   
Non-accrual balances charged-off    (390)  (245)  (1,305)  (274)  (869)  (752)  (549)  (1,077)   
Net payments or draws    (1,547)  (525)  (4,810)  (914)  (3,084)  (1,846)  (2,970)  (1,067)   
Loans placed on non-accrual    2,482    2,486   2,671   2,535   3,912   1,574   5,956   4,217    
Non-accrual loans brought current    -    (309)  -   -   -   -   -   -    
Balance at end of period $   29,211   $29,303  $27,934  $31,378  $30,031  $30,495  $31,699  $30,571    
                    
Analysis of Allowance for Loan Losses:                   
Balance at beginning of period $   43,942   $43,384  $41,766  $40,895  $39,661  $38,713  $37,475  $37,802    
Provision for loan losses    572    781   2,957   1,236   1,850   1,706   1,218   597    
Less loans charged-off, net of recoveries:                   
Commercial business    285    95   106   67   (128)  (25)  73   (89)   
Commercial real estate:                   
Commercial AD&C    (18)  (22)  -   48   -   -   (547)  706    
Commercial investor real estate    (9)  (12)  (107)  192   (4)  (5)  85   (5)   
Commercial owner occupied real estate    -    (1)  (1)  (3)  725   104   (1)  212    
Leasing    -    -   -   -   4   -   -   -    
Consumer    177    145   364   54   (31)  348   395   43    
Residential real estate:                   
Residential mortgage    18    24   989   15   80   342   (18)  65    
Residential construction    (6)  (6)  (12)  (8)  (30)  (6)  (7)  (8)   
Net charge-offs    447    223   1,339   365   616   758   (20)  924    
Balance at end of period $   44,067   $43,942  $43,384  $41,766  $40,895  $39,661  $38,713  $37,475    
                    
Asset Quality Ratios:                   
Non-performing loans to total loans  0.81%  0.85%  0.85%  1.01%  0.99%  1.08%  1.13%  1.14%   
Non-performing assets to total assets  0.66%  0.69%  0.69%  0.82%  0.80%  0.86%  0.93%  0.89%   
Allowance for loan losses to loans  1.12%  1.16%  1.18%  1.17%  1.17%  1.16%  1.18%  1.18%   
Allowance for loan losses to non-performing loans  138.00%  137.41%  138.36%  115.72%  118.54%  107.44%  103.71%  104.05%   
Annualized net charge-offs to average loans  0.05%  0.02%  0.15%  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 December 31,  
  2016  2015  
(Dollars in thousands and tax-equivalent) Average
Balances
 (1)
Interest
 Annualized
Average
Yield/Rate
  Average
Balances
 (1)
Interest
 Annualized
Average
Yield/Rate
  
Assets               
Residential mortgage loans $   848,399   $   7,321   3.45% $781,015  $6,626  3.39% 
Residential construction loans  148,248    1,365   3.66   133,812   1,241  3.68  
Total mortgage loans  996,647    8,686   3.48   914,827   7,867  3.44  
Commercial AD&C loans  310,110    3,688   4.73   247,612   2,835  4.54  
Commercial investor real estate loans  878,511    10,023   4.54   717,742   8,370  4.63  
Commercial owner occupied real estate loans  750,679    8,891   4.71   673,883   8,242  4.85  
Commercial business loans  452,195    4,931   4.34   424,510   4,819  4.50  
Leasing    -      -    -    17   -    -    
Total commercial loans  2,391,495    27,533   4.58   2,063,764   24,266  4.66  
Consumer loans  454,349    3,905   3.45   448,439   3,817  3.40  
Total loans (2)  3,842,491    40,124   4.16   3,427,030   35,950  4.17  
Loans held for sale  12,454    93   2.98   11,951   122  4.12  
Taxable securities  435,129    2,850   2.62   551,894   3,552  2.57  
Tax-exempt securities (3)  268,445    2,835   4.22   288,382   3,083  4.28  
Total investment securities  703,574    5,685   3.23   840,276   6,635  3.16  
Interest-bearing deposits with banks  39,471    57   0.57   40,945   29  0.28  
Federal funds sold  1,436      2   0.53   472   -  0.26  
Total interest-earning assets  4,599,426    45,961   3.98   4,320,674   42,736  3.93  
                
Less:  allowance for loan losses  (43,298)       (40,143)      
Cash and due from banks  50,090         48,655       
Premises and equipment, net  53,588         52,707       
Other assets  218,854         212,132       
Total assets $   4,878,660        $4,594,025       
                
Liabilities and Stockholders' Equity               
Interest-bearing demand deposits $   589,259    111   0.08% $544,133   106  0.08% 
Regular savings deposits  306,261      45   0.06   281,146   38  0.05  
Money market savings deposits  936,880    505   0.21   892,833   381  0.17  
Time deposits  582,658    1,494   1.02   508,972   1,160  0.90  
Total interest-bearing deposits  2,415,058    2,155   0.36   2,227,084   1,685  0.30  
Other borrowings  128,471      78   0.24   125,601   76  0.24  
Advances from FHLB  564,891      2,798   1.97   580,870   3,307  2.26  
Subordinated debentures  30,000      245   3.27   35,000   229  2.63  
Total interest-bearing liabilities  3,138,420    5,276   0.67   2,968,555   5,297  0.71  
                
Noninterest-bearing demand deposits  1,167,379         1,058,215       
Other liabilities  38,804         45,469       
Stockholders' equity  534,057         521,786       
Total liabilities and stockholders' equity $   4,878,660        $4,594,025       
                
Net interest income and spread   $   40,685   3.31 %   $37,439  3.22% 
Less: tax-equivalent adjustment      1,718         1,662     
Net interest income   $   38,967        $35,777     
                
Interest income/earning assets     3.98 %     3.93% 
Interest expense/earning assets       0.46       0.48  
Net interest margin     3.52 %     3.45% 
                
(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 $1.7 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.
  
                

 

                
Sandy Spring Bancorp, Inc. and Subsidiaries              
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED         
                
  Twelve Months Ended December 31,  
  2016
  2015
  
(Dollars in thousands and tax-equivalent) Average
Balances
 (1)
Interest
 Annualized
Average
Yield/Rate
  Average
Balances
 (1)
Interest
 Annualized
Average
Yield/Rate
  
Assets               
Residential mortgage loans $   826,089   $   28,331   3.43% $748,584  $25,251  3.37% 
Residential construction loans  143,378    5,169   3.61   134,486   4,970  3.70  
Total mortgage loans  969,467    33,500   3.46   883,070   30,221  3.42  
Commercial AD&C loans  283,018    13,199   4.66   225,022   10,299  4.58  
Commercial investor real estate loans  812,896    37,110   4.57   684,218   32,073  4.69  
Commercial owner occupied real estate loans  707,830    33,837   4.78   641,798   31,508  4.91  
Commercial business loans  453,148    19,750   4.36   404,994   17,926  4.43  
Leasing    -      -   -   27   1  2.50  
Total commercial loans  2,256,892    103,896   4.60   1,956,059   91,807  4.69  
Consumer loans  451,303    15,596   3.48   437,481   14,624  3.37  
Total loans (2)  3,677,662    152,992   4.16   3,276,610   136,652  4.17  
Loans held for sale  11,256    387   3.44   13,571   544  4.01  
Taxable securities  461,973    11,923   2.58   592,153   15,016  2.54  
Tax-exempt securities (3)  278,546    11,747   4.22   290,990   12,479  4.29  
Total investment securities  740,519    23,670   3.20   883,143   27,495  3.11  
Interest-bearing deposits with banks  40,940    213   0.52   37,761   98  0.26  
Federal funds sold  876      5   0.50   473   1  0.23  
Total interest-earning assets  4,471,253    177,267   3.96   4,211,558   164,790  3.91  
                
Less:  allowance for loan losses  (42,487)       (38,732)      
Cash and due from banks  47,219         46,719       
Premises and equipment, net  53,386         51,804       
Other assets  214,004         215,104       
Total assets $   4,743,375        $4,486,453       
                
Liabilities and Stockholders' Equity               
Interest-bearing demand deposits $   581,185    446   0.08% $532,578   418  0.08% 
Regular savings deposits  300,035      182   0.06   276,873   146  0.05  
Money market savings deposits  920,125    1,951   0.21   860,399   1,364  0.16  
Time deposits  558,355    5,582   1.00   481,368   3,950  0.82  
Total interest-bearing deposits  2,359,700    8,161   0.35   2,151,218   5,878  0.27  
Other borrowings  120,711      290   0.24   110,899   255  0.23  
Advances from FHLB  565,342      11,610   2.05   589,575   13,081  2.22  
Subordinated debentures  31,489      943   3.00   35,000   899  2.57  
Total interest-bearing liabilities  3,077,242    21,004   0.68   2,886,692   20,113  0.70  
                
Noninterest-bearing demand deposits  1,101,104         1,033,141       
Other liabilities  37,505         46,949       
Stockholders' equity  527,524         519,671       
Total liabilities and stockholders' equity $   4,743,375        $4,486,453       
                
Net interest income and spread   $   156,263   3.28 %   $144,677  3.21% 
Less: tax-equivalent adjustment      6,711         6,478     
Net interest income   $   149,552        $138,199     
                
Interest income/earning assets     3.96 %     3.91% 
Interest expense/earning assets       0.47       0.47  
Net interest margin     3.49 %     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 $6.7 million and $6.5 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 Media Contact: Jen Schell 301-570-8331 jschell@sandyspringbank.com

Primary Logo

View Comments and Join the Discussion!