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Sandy Spring Bancorp Reports Third Quarter Net Income of $12.1 Million, an Increase of 10% Over Prior Year



Sandy Spring Bancorp Reports Third Quarter Net Income of $12.1 Million, an
Increase of 10% Over Prior Year

OLNEY, Md., Oct. 17, 2013 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc.,
(Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net
income for the third quarter of 2013 of $12.1 million ($0.48 per diluted
share) compared to net income of $11.0 million ($0.44 per diluted share) for
the third quarter of 2012 and net income of $12.2 million ($0.49 per diluted
share) for the second quarter of 2013.

Net income for the nine-month period ended September 30, 2013 totaled $34.8
million ($1.39 per diluted share) compared to net income of $26.7 million
($1.09 per diluted share) for the prior year period, an increase of 31%.

"While our third quarter results benefitted from significant recoveries on two
commercial real estate loans, historically low interest rates continued to
exert downward pressure on our net interest margin. The increase in long-term
treasury rates reduced both mortgage loan origination volume and the related
mortgage banking income from the sales of such loans," said Daniel J.
Schrider, President and Chief Executive Officer.

"Despite ongoing challenging market conditions, our focused efforts resulted
in further improvement in credit quality metrics, growth from our wealth
management and insurance segments and continued control of our funding costs.

"We continue to believe the consistent application of prudent banking
principles together with outstanding client service is the formula for success
in this very difficult and volatile economy," said Schrider.

Third Quarter Highlights:

  * Pre-tax pre-provision income, a non-GAAP measure, was $19.6 million for
    the third quarter of 2013, a 16% increase compared to the third quarter of
    2012 and a 26% increase compared to the second quarter of 2013. Third
    quarter results with respect to credit metrics, the net interest margin
    and non-interest income and expense were positively affected by major
    recoveries from resolution of two previously non-performing commercial
    real estate credits.
  * The provision for loan and lease losses for the third quarter of 2013 was
    a charge of $1.1 million compared to a charge of $0.2 million for the
    third quarter of 2012 and a credit of $2.9 million for the second quarter
    of 2013. This increase in the provision compared to the prior quarter was
    due primarily to loan growth during the quarter.
  * Non-performing loans decreased to $38.3 million at September 30, 2013
    compared to $58.9 million at September 30, 2012 and $46.2 million at June
    30, 2013. The coverage ratio of the allowance for loan and lease losses to
    non-performing loans was 103% at September 30, 2013 compared to a coverage
    ratio of 72% at September 30, 2012 and 84% at June 30, 2013.
  * The net interest margin was 3.88% for the third quarter of 2013, compared
    to 3.67% for the third quarter of 2012 and 3.51% for the second quarter of
    2013. Excluding the effect of the loan recoveries mentioned above, the net
    interest margin was 3.49% for the quarter. The decrease in the normalized
    margin was due primarily to the decline in the yield on a higher level of
    earning assets which more than offset the lower cost of borrowings and
    deposits.
  * Non-interest income decreased 8% for the quarter compared to both the
    prior year quarter and the second quarter of 2013. The decrease was due
    primarily to the decrease in income from mortgage banking due primarily to
    a significant decline in the volume of saleable mortgage loan
    originations. This decrease was somewhat offset by increases in insurance
    agency commissions and other non-interest income.
  * Total loans increased 8% compared to the third quarter of 2012 and 2%
    compared to the second quarter of 2013 due to organic loan growth in the
    residential mortgage, commercial investor real estate and consumer loan
    portfolios.

Review of Balance Sheet and Credit Quality

Total assets increased 4% to $4.1 billion at September 30, 2013 as compared to
September 30, 2012. Total loans and leases increased 8% to $2.7 billion
compared to the prior year due primarily to the growth in the specific loan
portfolios mentioned above.

Customer funding sources, which include deposits and other short-term
borrowings from customers, remained stable compared to September 30, 2012.
Noninterest-bearing and interest-bearing checking account balances increased
10% compared to the prior year quarter. The Company considers the growth in
checking accounts to be an important performance metric as such accounts
typically are the primary drivers of growth in multiple product banking
relationships with clients. Certificates of deposit declined 14% while FHLB
advances increased 28% at September 30, 2013 compared to balances at September
30, 2012, as the Company managed its funding mix to take advantage of current
low interest rates to maintain the net interest margin.

Tangible common equity totaled $410.8 million at September 30, 2013 compared
to $379.8 million at September 30, 2012 resulting in an increase in the ratio
of tangible common equity to tangible assets from 9.99% at September 30, 2012
to 10.36% at September 30, 2013. This increase was due primarily to net income
earned during the period. At September 30, 2013, the Company had a total
risk-based capital ratio of 15.70%, a tier 1 risk-based capital ratio of
14.45% and a tier 1 leverage ratio of 11.29%.

Non-performing loans totaled $38.3 million at September 30, 2013 compared to
$58.9 million at September 30, 2012 and $46.2 million at June 30, 2013.
Overall credit quality continued to improve due to the resolution of existing
problem credits and the reduced migration of new credits to non-performing
status.

Loan charge-offs, net of recoveries, totaled $0.7 million for the third
quarter of 2013 compared to net charge-offs of $2.9 million for the third
quarter of 2012 and net recoveries of $0.6 million for the second quarter of
2013. This improvement for the third quarter of 2013 compared to the prior
year quarter was due primarily to recoveries on existing problem credits. The
allowance for loan and lease losses represented 1.48% of outstanding loans and
leases and 103% of non-performing loans at September 30, 2013 compared to
1.73% of outstanding loans and leases and 72% of non-performing loans at
September 30, 2012 and 1.50% of outstanding loans and leases and 84% of
non-performing loans at June 30, 2013. Non-performing loans includes accruing
loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the third quarter of 2013 increased 11% compared to
the third quarter of 2012 due to $3.7 million in interest recoveries on loans
previously charged-off. Excluding these recoveries, net interest income
remained virtually level compared to the prior year quarter. The resulting
increase was due to an increase in average interest-earning assets and lower
funding costs which somewhat offset the decline in asset yields. The Company's
funding costs declined due to a lower cost deposit mix and the restructuring
of $170 million in Federal Home Loan Bank advances during the fourth quarter
of 2012 and the first six months of 2013. The net interest margin increased to
3.88% for the third quarter of 2013 compared to 3.67% for the third quarter of
2012 due to loan recoveries. Excluding the effect of these loan recoveries,
the net interest margin would have been 3.49% for the quarter. The resulting
decrease in the margin was due to lower yields on a higher amount of
interest-earning assets.

The provision for loan and lease losses was a charge of $1.1 million for the
third quarter of 2013 compared to a charge of $0.2 million for the third
quarter of 2012 and a credit of $2.9 million for the second quarter of 2013.
The increase in the provision for the third quarter of 2013 compared to the
third quarter of 2012 was due primarily to loan growth during the quarter and
the previously mentioned recoveries which were largely offset by a charge-off
on a commercial real estate loan together with a lower migration of new
problem loans into non-performing status.

Non-interest income decreased 8% to $11.2 million for the third quarter of
2013 compared to $12.2 million for the third quarter of 2012. This decrease
was driven by a lack of mortgage banking income due primarily to lower
mortgage origination volumes and a decline in client refinancing activity.
This decrease was somewhat offset by a 17% increase in wealth management
income due to higher assets under management. In addition, other non-interest
income increased 36% due to gains on sales and dispositions of loans.

Non-interest expenses decreased 1% to $26.9 million for the third quarter of
2013 compared to $27.2 million in the third quarter of 2012. This decrease was
driven primarily by a decline in other non-interest expenses related to the
recovery of expenses related to the resolution of problem loan credits
mentioned above. The non-GAAP efficiency ratio improved to 55.21% for the
third quarter of 2013 compared to 58.91% for the third quarter of 2012.
Excluding the effect of the interest recoveries mentioned above, the non-GAAP
efficiency ratio for the third quarter of 2013 was 61.47%.

Net interest income for the first nine months of 2013 increased 8% compared to
the prior year period while the net interest margin increased to 3.66% for the
year to date compared to 3.62% in 2012 due to the $3.7 million in interest
recoveries on previously mentioned commercial loans. Excluding the effect of
the interest recoveries, net interest income increased 4% for the first nine
months of 2013 compared to the prior year period while the net interest margin
decreased to 3.53% for the first nine months of 2013 compared to 3.62% for the
first nine months of 2012. The increase in net interest income and decrease in
the net interest margin were due primarily to the factors cited previously
with respect to the third quarter of 2013.

The provision for loan and lease losses was a credit of $1.7 million for the
first nine months of 2013 compared to a charge of $2.5 million for first nine
months of 2012. The decrease in the provision for the period was due primarily
to a decline in historical losses, a lower migration of new problem loans into
non-performing status, and net loan recoveries during the period.

Non-interest income increased 3% to $35.9 million for the first nine months of
2013 compared to $34.7 million for the first nine months of 2012. This
increase was driven by a 9% increase in wealth management income due to higher
assets under management while insurance agency commissions increased 13% due
to higher revenues on whole life insurance and physicians' liability lines.
Other non-interest income increased 45% due to gains on sales and dispositions
of loans and a non-recurring legal settlement. These increases were partially
offset by a 36% decrease in mortgage banking income due to declining mortgage
origination volumes.

Non-interest expenses remained virtually level at $82.2 million for the first
nine months of 2013 compared to $82.7 million in the first nine months of
2012. Outside data services decreased due to merger expenses from the
CommerceFirst acquisition recorded in the second quarter of 2012. Other
non-interest expenses decreased due to such merger expenses and due to the
recovery of expenses from the resolution of problem loan credits. These
decreases were somewhat offset by an increase in salaries and benefits
expenses due to additional staff and higher incentive compensation. The
non-GAAP efficiency ratio improved to 58.89% for the first nine months of 2013
compared to 61.08% for the first nine months of 2012. Excluding the effect of
the interest recoveries mentioned above, the non-GAAP efficiency ratio for the
first nine months of 2013 was 61.01%.

Conference Call

The Company's management will host a conference call to discuss its third
quarter results today at 2:00 P.M. (ET). A live Web cast of the conference
call is available through the Investor Relations' section of the Sandy Spring
Web site at www.sandyspringbank.com. Participants may call 1-888-317-6016. A
password is not necessary. Visitors to the Web site are advised to log on 10
minutes ahead of the scheduled start of the call. An internet-based replay
will be available at the Web site until 9:00 am (ET) November 18, 2013. A
replay of the teleconference will be available through the same time period by
calling 1-877-344-7529 under conference call number 10034198.

About Sandy Spring Bancorp/Sandy Spring Bank

With $4.1 billion in assets, Sandy Spring Bancorp is the holding company for
Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance
Corporation and West Financial Services, Inc. Sandy Spring Bancorp is the
largest publicly traded banking company headquartered and operating in
Maryland. Sandy Spring is a community banking organization that focuses its
lending and other services on businesses and consumers in the local market
area. Independent and community-oriented, Sandy Spring Bank was founded in
1868 and offers a broad range of commercial banking, retail banking and trust
services through 49 community offices in Anne Arundel, Carroll, Frederick,
Howard, Montgomery, and Prince George's counties in Maryland, and Arlington,
Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy
Spring Bank also offers a comprehensive menu of insurance and investment
management services. Visit www.sandyspringbank.com for more information about
Sandy Spring Bank.

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, 2012, including in the Risk Factors section of that report, and in its
other SEC reports. Sandy Spring Bancorp's forward-looking statements may also
be subject to other risks and uncertainties, including those that it may
discuss elsewhere in this news release or in its filings with the SEC,
accessible on the SEC's Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS - UNAUDITED
                                                                           
                                                                           
                 Three Months Ended               Nine Months Ended        
                 September 30,            %      September 30,            %
(Dollars in
thousands,       2013        2012         Change 2013        2012         Change
except per share
data)
Results of                                                                 
Operations:
Net interest      $ 35,306    $ 31,785    11%     $ 97,564    $ 90,299    8%
income
Provision for
loan and lease    1,128      232           --    (1,670)     2,481        (167)
losses
Non-interest      11,223      12,242      (8)     35,857      34,709      3
income
Non-interest      26,893      27,167      (1)     82,224      82,708      (1)
expenses
Income before     18,508      16,628      11      52,867      39,819      33
income taxes
Net income        12,089      10,990      10      34,809      26,673      31
                                                                           
Pre-tax
pre-provision     $ 19,636    $ 16,996    16      $ 51,197    $ 45,008    14
pre-merger
expense income 
                                                                           
Return on         1.19%       1.13%               1.17%       0.95%        
average assets
Return on
average common    9.91%       9.22%               9.59%       7.74%        
equity
Net interest      3.88%       3.67%               3.66%       3.62%        
margin
Efficiency ratio  57.80%      61.70%              61.63%      66.16%       
- GAAP basis (1)
Efficiency ratio
- Non-GAAP        55.21%      58.91%              58.89%      61.08%       
basis (1)
                                                                           
Per share data:                                                            
Basic net income  $ 0.48      $ 0.44      9%      $ 1.40      $ 1.09      28%
Diluted net       $ 0.48      $ 0.44      9       $ 1.39      $ 1.09      28
income
Average fully     25,070,506  24,949,205   --     25,049,181  24,535,439  2
diluted shares
Dividends
declared per      $ 0.16      $ 0.12      33      $ 0.46      $ 0.34      35
share
Book value per    19.77      19.35        2       19.77      19.35        2
share
Tangible book     16.44      15.26        8       16.44      15.26        8
value per share
Outstanding       24,985,146  24,896,136   --     24,985,146  24,896,136   --
shares
                                                                           
Financial
Condition at                                                               
period-end:
Investment        $1,077,951  $ 1,074,918  --%    $1,077,951  $ 1,074,918  --%
securities
Loans and leases  2,662,010   2,468,985   8       2,662,010   2,468,985   8
Interest-earning  3,771,825   3,614,310   4       3,771,825   3,614,310   4
assets
Assets            4,052,969   3,887,427   4       4,052,969   3,887,427   4
Deposits          2,916,466   2,880,262   1       2,916,466   2,880,262   1
Interest-bearing  2,634,324   2,560,040   3       2,634,324   2,560,040   3
liabilities
Stockholders'     493,882     481,810     3       493,882     481,810     3
equity
                                                                           
Capital ratios:                                                            
Tier 1 leverage   11.29%     10.99%               11.29%      10.99%       
Tier 1 capital
to risk-weighted  14.45%     14.31%               14.45%      14.31%       
assets
Total regulatory
capital to        15.70%     15.56%               15.70%      15.56%       
risk-weighted
assets
Tangible common
equity to         10.36%     9.99%                10.36%      9.99%        
tangible
assets (2)
Average equity
to average        11.98%     12.27%               12.19%      12.31%       
assets
                                                                           
Credit quality                                                             
ratios:
Allowance for
loan and lease    1.48%       1.73%               1.48%       1.73%        
losses to loans
and leases
Non-performing
loans to total    1.44%       2.38%               1.44%       2.38%        
loans
Non-performing
assets to total   0.98%       1.75%               0.98%       1.75%        
assets
Allowance for
loan and lease
losses to         103.06%     72.40%              103.06%     72.40%       
non-performing
loans
Annualized net
charge-offs to    0.11%       0.46%               0.10%       0.53%        
average loans
and leases (3)
                                                                           
(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 and merger expenses  
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.

 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
                                                                   
                           Three Months Ended         Nine Months Ended 
                           September 30,             September 30,
(Dollars in thousands)     2013         2012         2013         2012
Pre-tax pre-provision                                              
pre-merger expense income:
Net income                  $ 12,089     $ 10,990     $ 34,809     $ 26,673
Plus non-GAAP adjustment:                                          
Merger expenses             --           136          --           2,708
Income taxes                6,419        5,638        18,058       13,146
Provision for loan and      1,128        232          (1,670)      2,481
lease losses
Pre-tax pre-provision       $ 19,636     $ 16,996     $ 51,197     $ 45,008
pre-merger expense income
                                                                   
Efficiency ratio - GAAP                                            
basis:
Non-interest expenses       $ 26,893     $ 27,167     $ 82,224     $ 82,708
                                                                   
Net interest income plus    $ 46,529     $ 44,027     $ 133,421    $ 125,008
non-interest income
                                                                   
Efficiency ratio - GAAP    57.80%       61.70%       61.63%       66.16%
basis
                                                                   
                                                                   
Efficiency ratio -                                                 
Non-GAAP basis:
Non-interest expenses       $ 26,893     $ 27,167     $ 82,224     $ 82,708
Less non-GAAP adjustment:                                          
Amortization of intangible  462          476          1,384        1,403
assets
Merger expenses             --           136          --           2,708
Non-interest expenses       $ 26,431     $ 26,555     $ 80,840     $ 78,597
-- as adjusted
                                                                   
Net interest income plus    $ 46,529     $ 44,027     $ 133,421    $ 125,008
non-interest income 
Plus non-GAAP adjustment:                                          
Tax-equivalent income       1,344        1,324        3,967        4,040
Less non-GAAP adjustments:                                         
Securities gains            --           296          118          459
OTTI recognized in          --           (23)         --           (95)
earnings
Net interest income plus
non-interest income - as    $ 47,873     $ 45,078     $ 137,270    $ 128,684
adjusted
                                                                   
Efficiency ratio -         55.21%       58.91%       58.89%       61.08%
Non-GAAP basis
                                                                   
Tangible common equity                                             
ratio:
Total stockholders' equity  $ 493,882    $ 481,810    $ 493,882    $ 481,810
Accumulated other           2,892        (16,433)     2,892        (16,433)
comprehensive loss
Goodwill                    (84,171)     (81,892)     (84,171)     (81,892)
Other intangible assets,    (1,792)      (3,641)      (1,792)      (3,641)
net
Tangible common equity      $ 410,811    $ 379,844    $ 410,811    $ 379,844
                                                                   
Total assets                $ 4,052,969  $ 3,887,427  $ 4,052,969  $ 3,887,427
Goodwill                    (84,171)     (81,892)     (84,171)     (81,892)
Other intangible assets,    (1,792)      (3,641)      (1,792)      (3,641)
net
Tangible assets             $ 3,967,006  $ 3,801,894  $ 3,967,006  $ 3,801,894
                                                                   
Tangible common equity     10.36%       9.99%        10.36%       9.99%
ratio
                                                                   
Outstanding common shares   24,985,146   24,896,136   24,985,146   24,896,136
Tangible book value per     $ 16.44      $ 15.26      $ 16.44      $ 15.26
common share

 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
                                                                  
                                      September 30, December 31, September 30,
(Dollars in thousands)                2013          2012         2012
Assets                                                            
Cash and due from banks                $ 58,746      $ 59,540     $ 48,744
Federal funds sold                     475           466          466
Interest-bearing deposits with banks   20,847        26,400       30,057
Cash and cash equivalents              80,068        86,406       79,267
Residential mortgage loans held for    10,542        36,149       39,884
sale (at fair value) 
Investments available-for-sale (at     815,545       825,582      834,665
fair value)
Investments held-to-maturity --- fair
value of $220,054, $222,024 and
$213,235 at September 30, 2013,        225,994       215,814      206,613
December 31, 2012 and September 30,
2012, respectively
Other equity securities                36,412        33,636       33,640
Total loans and leases                 2,662,010     2,531,128    2,468,985
Less: allowance for loan and lease     (39,422)      (42,957)     (42,618)
losses
Net loans and leases                   2,622,588     2,488,171    2,426,367
Premises and equipment, net            46,655        48,326       48,784
Other real estate owned                1,662         5,926        9,291
Accrued interest receivable            12,464        12,392       12,813
Goodwill                               84,171        84,808       81,892
Other intangible assets, net           1,792         3,163        3,641
Other assets                           115,076       114,833      110,570
Total assets                           $ 4,052,969   $ 3,955,206  $ 3,887,427
                                                                  
Liabilities                                                       
Noninterest-bearing deposits           $ 890,319     $ 847,415    $ 818,674
Interest-bearing deposits              2,026,147     2,065,619    2,061,588
Total deposits                         2,916,466     2,913,034    2,880,262
Securities sold under retail
repurchase agreements and federal      53,177        86,929       58,306
funds purchased
Advances from FHLB                     520,000       405,058      405,146
Subordinated debentures                35,000        35,000       35,000
Accrued interest payable and other     34,444        31,673       26,903
liabilities
Total liabilities                      3,559,087     3,471,694    3,405,617
                                                                  
Stockholders' Equity                                              
Common stock --- par value $1.00;
shares authorized 50,000,000; shares
issued and outstanding 24,985,146,     24,985        24,905       24,896
24,905,392 and 24,896,136 at
September 30, 2013, December 31, 2012
and September 30, 2012, respectively
Additional paid in capital             192,964       191,689      191,237
Retained earnings                      278,825       255,606      249,244
Accumulated other comprehensive        (2,892)       11,312       16,433
income (loss)
Total stockholders' equity             493,882       483,512      481,810
Total liabilities and stockholders'    $ 4,052,969   $ 3,955,206  $ 3,887,427
equity

 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
                                                                      
                                       Three Months Ended  Nine Months Ended
                                       September 30,       September 30,
(Dollars in thousands, except per      2013      2012      2013      2012
share data)
Interest Income:                                                      
Interest and fees on loans and leases   $ 33,079  $ 30,697  $ 91,937  $ 86,164
Interest on loans held for sale         176       248       838       587
Interest on deposits with banks         22        38        65        83
Interest and dividends on investment                                  
securities:
Taxable                                 4,558     4,204     12,411    13,809
Exempt from federal income taxes        2,345     2,308     6,987     7,024
Interest on federal funds sold          --        --        --        1
Total interest income                   40,180    37,495    112,238   107,668
Interest Expense:                                                     
Interest on deposits                    1,358     1,823     4,209     5,707
Interest on retail repurchase           39        46        126       158
agreements and federal funds purchased
Interest on advances from FHLB          3,255     3,599     9,667     10,772
Interest on subordinated debt           222       242       672       732
Total interest expense                  4,874     5,710     14,674    17,369
Net interest income                     35,306    31,785    97,564    90,299
Provision for loan and lease losses     1,128     232       (1,670)   2,481
Net interest income after provision     34,178    31,553    99,234    87,818
for loan and lease losses
Non-interest Income:                                                  
Investment securities gains             --        296       118       459
Total other-than-temporary impairment   --        (23)      --        (95)
("OTTI") losses
Portion of OTTI losses recognized in
other comprehensive income, before      --        --        --        --
taxes
Net OTTI recognized in earnings         --        (23)      --        (95)
Service charges on deposit accounts     2,171     2,230     6,390     6,713
Mortgage banking activities             (26)      1,981     2,738     4,294
Wealth management income                4,503     3,858     13,077    11,949
Insurance agency commissions            1,193     1,020     3,578     3,156
Income from bank owned life insurance   629       660       1,864     1,954
Visa check fees                         1,077     984       3,113     2,844
Other income                            1,676     1,236     4,979     3,435
Total non-interest income               11,223    12,242    35,857    34,709
Non-interest Expenses:                                                
Salaries and employee benefits          16,382    15,476    48,891    47,104
Occupancy expense of premises           3,149     3,106     9,327     8,895
Equipment expenses                      1,200     1,237     3,676     3,682
Marketing                               713       764       1,983     1,824
Outside data services                   1,152     1,076     3,418     4,183
FDIC insurance                          678       667       1,855     1,972
Amortization of intangible assets       462       476       1,384     1,403
Other expenses                          3,157     4,365     11,690    13,645
Total non-interest expenses             26,893    27,167    82,224    82,708
Income before income taxes              18,508    16,628    52,867    39,819
Income tax expense                      6,419     5,638     18,058    13,146
Net income                              $ 12,089  $ 10,990  $ 34,809  $ 26,673
                                                                      
Net Income Per Share Amounts:                                         
Basic net income per share              $ 0.48    $ 0.44    $ 1.40    $ 1.09
Diluted net income per share            $ 0.48    $ 0.44    $ 1.39    $ 1.09
Dividends declared per share            $ 0.16    $ 0.12    $ 0.46    $ 0.34

 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
                                                                                  
               2013                             2012
(Dollars in
thousands,     Q3         Q2         Q1         Q4         Q3         Q2         Q1
except per
share data)
Profitability
for the                                                                           
quarter:
Tax-equivalent
interest        $ 41,524   $ 37,091   $ 37,590   $ 37,536   $ 38,819   $ 36,898   $ 35,991
income
Interest        4,874      4,847      4,953      5,282     5,710      5,749      5,910
expense
Tax-equivalent
net interest    36,650     32,244     32,637     32,254    33,109     31,149     30,081
income
Tax-equivalent  1,344      1,312      1,311      1,334     1,324      1,340      1,376
adjustment
Provision for
loan and lease  1,128      (2,876)    78         1,168     232        1,585      664
losses
Non-interest    11,223     12,215     12,419     12,247    12,242     11,493     10,974
income
Non-interest    26,893     27,508     27,823     27,219    27,167     28,858     26,683
expenses
Income before   18,508     18,515     15,844     14,780    16,628     10,859     12,332
income taxes
Income tax      6,419      6,353      5,286      4,899     5,638      3,652      3,856
expense 
Net income      $ 12,089   $ 12,162   $ 10,558   $ 9,881    $ 10,990   $ 7,207    $ 8,476
Financial                                                                         
performance:
Pre-tax
pre-provision   $ 19,636   $ 15,639   $ 15,922   $ 15,740   $ 16,996   $ 14,642   $ 13,370
pre-merger
expense income
Return on      1.19%      1.23%      1.08%      1.01%      1.13%      0.78%      0.94%
average assets
Return on
average common 9.91%      9.98%      8.85%      8.14%      9.22%      6.34%      7.60%
equity
Net interest   3.88%      3.51%      3.59%      3.53%      3.67%      3.62%      3.56%
margin
Efficiency
ratio - GAAP   57.80%     63.75%     63.60%     63.06%     61.70%     69.87%     67.25%
basis (1)
Efficiency
ratio -        55.21%     60.92%     60.80%     60.54%     58.91%     61.54%     62.97%
Non-GAAP basis
(1)
Per share                                                                         
data:
Basic net
income per      $ 0.48     $ 0.49     $ 0.42     $ 0.40     $ 0.44     $ 0.30     $ 0.35
share
Diluted net
income per      $ 0.48     $ 0.49     $ 0.42     $ 0.40     $ 0.44     $ 0.30     $ 0.35
share
Average fully  25,070,506 25,009,092 25,002,612 24,971,249 24,949,205 24,423,236 24,180,501
diluted shares
Dividends
declared per    $ 0.16     $ 0.16     $ 0.14     $ 0.14     $ 0.12     $ 0.12     $ 0.10
common share
Non-interest                                                                      
income:
Securities      $ --       $ 62       $ 56       $ --       $ 296      $ 90       $ 73
gains
Net OTTI
recognized in   --         --         --         (14)       (23)       (8)        (64)
earnings
Service
charges on      2,171      2,150      2,069      2,197     2,230      2,283      2,200
deposit
accounts
Mortgage
banking         (26)       1,237      1,527      1,738     1,981      1,288      1,025
activities
Wealth
management      4,503      4,532      4,042      4,000     3,858      4,034      4,057
income
Insurance
agency          1,193      1,036      1,349      1,334     1,020      934        1,202
commissions
Income from
bank owned      629        623        612        662       660        660        634
life insurance
Visa check      1,077      1,079      957        1,043     984        962        898
fees
Other income    1,676      1,496      1,807      1,287     1,236      1,250      949
Total
non-interest    $ 11,223   $ 12,215   $ 12,419   $ 12,247   $ 12,242   $ 11,493   $ 10,974
income
Non-interest                                                                      
expense:
Salaries and
employee        $ 16,382   $ 16,163   $ 16,346   $ 15,405   $ 15,476   $ 15,927   $ 15,701
benefits
Occupancy
expense of      3,149      2,996      3,182      3,115      3,106      2,943      2,846
premises
Equipment       1,200      1,227      1,249      1,189      1,237      1,255      1,190
expenses
Marketing       713        755        515        827        764        565        495
Outside data    1,152      1,114      1,152      836        1,076      1,828      1,279
services
FDIC insurance  678        581        596        601        667        653        652
Amortization
of intangible   462        461        461        478        476        466        461
assets
Professional    511       1,332      1,250      1,584      1,282      2,156       1,287
fees
Other real
estate owned    (150)     (281)      37         316        174        351         64
expenses
Other expenses  2,796     3,160      3,035      2,868      2,909      2,714       2,708
Total
non-interest    $ 26,893   $ 27,508   $ 27,823   $ 27,219   $ 27,167   $ 28,858   $ 26,683
expense
                                                                                  
(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 and
merger expenses 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
                                                                                             
                    2013                                2012
(Dollars in         Q3          Q2          Q1          Q4          Q3          Q2          Q1
thousands)
Balance sheets at                                                                            
quarter end:
Residential          $ 595,180   $ 565,282   $ 538,346   $ 523,364   $ 499,806   $ 472,426   $ 465,204
mortgage loans
Residential         118,316     116,736     122,698     120,314     128,606     130,791     122,841
construction loans
Commercial ADC      158,739     163,309     150,599     151,933     133,007     151,620     149,814
loans
Commercial investor 518,029     497,365     487,802     456,888     447,536     443,237     392,626
real estate loans
Commercial owner
occupied real       569,350     563,258     565,820     571,510     579,711     579,812     525,022
estate loans
Commercial business 332,670     334,979     344,489     346,708     322,087     334,040     253,827
loans
Leasing             962         1,415       1,974       3,421       4,233       5,618       5,843
Consumer loans      368,764     363,114     353,341     356,990     353,999     357,534     356,215
Total loans and     2,662,010   2,605,458   2,565,069   2,531,128   2,468,985   2,475,078   2,271,392
leases
Allowance for loan  (39,422)    (39,015)    (41,246)    (42,957)    (42,618)    (45,265)    (45,061)
and lease losses
Investment          1,077,951   1,102,209   1,008,693   1,075,032   1,074,918   1,006,743   1,067,462
securities
Interest-earning    3,771,825   3,802,682   3,660,809   3,669,175   3,614,310   3,584,480   3,416,136
assets
Total assets        4,052,969   4,072,617   3,932,026   3,955,206   3,887,427   3,855,177   3,668,273
Noninterest-bearing 890,319     877,891     832,679     847,415     818,674     763,566     685,770
demand deposits
Total deposits      2,916,466   2,926,650   2,919,208   2,913,034   2,880,262   2,852,055   2,681,075
Customer repurchase 53,177      54,731      50,302      51,929      58,306      64,779      73,130
agreements
Total
interest-bearing    2,634,324   2,678,490   2,576,831   2,592,606   2,560,040   2,593,501   2,508,756
liabilities
Total stockholders' 493,882     485,643     488,947     483,512     481,810     471,464     451,917
equity
Quarterly average                                                                            
balance sheets:
Residential          $ 593,335   $ 579,899   $ 575,889   $ 542,095   $ 510,475   $ 488,644   $ 474,149
mortgage loans
Residential          120,676     119,197     120,283     125,640     133,236     125,582     116,630
construction loans
Commercial ADC       158,557     160,483     148,749     137,679     142,870     151,374     159,769
loans
Commercial investor  499,896     485,630     474,062     453,074     445,012     410,258     377,072
real estate loans
Commercial owner
occupied real        566,366     561,249     567,723     577,693     580,994     539,590     518,763
estate loans
Commercial business  331,374     337,843     347,569     322,501     332,364     284,271     258,099
loans
Leasing              1,152       1,644       2,510       3,773       4,858       5,528       6,325
Consumer loans       366,562     360,842     357,366     356,452     357,135     359,008     358,783
Total loans and      2,637,918   2,606,787   2,594,151   2,518,907   2,506,945   2,364,255   2,269,590
leases
Investment          1,097,643   1,047,726   1,051,769   1,072,278   1,038,586   1,052,502    1,086,295
securities
Interest-earning    3,770,855   3,692,215   3,677,444   3,639,605   3,599,715   3,453,590    3,389,843
assets
Total assets        4,039,069   3,959,907   3,946,578   3,908,479   3,863,951   3,708,622    3,637,674
Noninterest-bearing 862,046     838,502     797,926     824,188     774,215     699,638      641,477
demand deposits
Total deposits      2,903,926   2,892,704   2,860,451   2,891,120   2,857,523   2,714,980    2,642,634
Customer repurchase  56,766      55,941      52,622      60,941      62,693      66,674      65,195
agreements
Total
interest-bearing    2,659,406   2,599,704   2,631,198   2,571,937   2,587,815   2,526,541    2,523,394
liabilities
Total stockholders' 483,811     489,014     483,664     482,621     474,231     457,338      448,406
equity
Financial Measures                                                                           
Average equity to   11.98%      12.35%      12.26%      12.35%      12.27%      12.33%      12.33%
average assets
Investment
securities to       28.58%      28.99%      27.55%      29.30%      29.74%      28.09%      31.25%
earning assets
Loans to earnings   70.58%      68.52%      70.07%      68.98%      68.31%      69.05%      66.49%
assets
Loans to assets     65.68%      63.98%      65.24%      63.99%      63.51%      64.20%      61.92%
Loans to deposits   91.28%      89.03%      87.87%      86.89%      85.72%      86.78%      84.72%
Capital measures:                                                                            
Tier 1 leverage     11.29%      11.28%      11.07%      10.98%      10.99%      11.21%      11.05%
Tier 1 capital to
risk-weighted       14.45%      14.30%      14.23%      14.15%      14.31%      14.12%      14.89%
assets
Total regulatory
capital to          15.70%      15.55%      15.48%      15.40%      15.56%      15.36%      16.14%
risk-weighted
assets
Book value per       $ 19.77     $ 19.45     $ 19.59     $ 19.41     $ 19.35     $ 18.94     $ 18.72
share
Outstanding shares   24,985,146  24,967,558  24,954,892  24,905,392  24,896,136  24,886,724  24,143,985

 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
                                                                              
               2013                           2012
(Dollars in    September  June 30,  March 31, December  September  June 30,  March 31,
thousands)     30,                            31,       30,
Non-Performing                                                                
Assets:
Loans and
leases 90 days                                                                
past due:
Commercial      $ --       $ 15      $ --      $ 24      $ 44       $ 70      $ 40
business
Commercial                                                                    
real estate:
Commercial      --         --        --        --        --         342       --
AD&C
Commercial
investor real   --         --        --        --        --         --        --
estate
Commercial
owner occupied  --         --        --        209       --         --        --
real estate
Leasing         --         --        --        --        127        96        --
Consumer        10         --        54        14        18         5         89
Residential                                                                   
real estate:
Residential     --         --        --        --        116        91        167
mortgage
Residential     --         --        --        --        --         --        --
construction
Total loans
and leases 90   10         15        54        247       305        604       296
days past due
Non-accrual
loans and                                                                     
leases:
Commercial      4,050      4,483     4,012     4,611     4,919      4,583     6,542
business
Commercial                                                                    
real estate:
Commercial      5,086      5,885     5,826     6,332     8,957      13,055    14,303
AD&C
Commercial
investor real   6,877      11,741    12,353    11,843    12,345     13,327    13,893
estate
Commercial
owner occupied  4,202      5,413     5,346     13,681    13,742     15,146    16,295
real estate
Leasing         --         --        --        865       834        872       858
Consumer        2,004      2,305     2,388     2,410     1,607      1,651     1,700
Residential                                                                   
real estate:
Residential     5,643      5,581     5,393     4,681     3,644      2,600     4,818
mortgage
Residential     2,327      2,558     3,258     3,125     3,236      4,333     4,929
construction
Total
non-accrual     30,189     37,966    38,576    47,548    49,284     55,567    63,338
loans and
lease
Total
restructured    8,054      8,213     10,839    10,110    9,277      8,285     8,547
loans -
accruing
Total
non-performing  38,253     46,194    49,469    57,905    58,866     64,456    72,181
loans and
leases
Other assets
and real        1,662      4,831     5,250     5,926     9,291      9,553     4,834
estate owned
(OREO)
Total
non-performing  $ 39,915   $ 51,025  $ 54,719  $ 63,831  $ 68,157   $ 74,009  $ 77,015
assets
                                                                              
                For the quarter ended, 
                September June 30,  March 31,  December  September  June      March
               30,                            31,       30,        30,       31, 
(Dollars in    2013       2013      2013      2012      2012       2012      2012
thousands)
Analysis of
Non-accrual                                                                   
Loan and Lease
Activity:
Balance at
beginning of    $ 37,966   $ 38,576  $ 47,548  $ 49,284  $ 55,567   $ 63,338  $ 71,680
period
Non-accrual
balances        (723)      (1,426)   (92)      (400)     (232)      (2,131)   --
transferred to
OREO
Non-accrual
balances        (4,995)    (668)     (2,175)   (979)     (3,697)    (1,663)   (4,965)
charged-off
Net payments    (13,547)   (3,560)   (11,768)  (3,852)   (6,342)    (4,149)   (5,061)
or draws
Loans placed    11,488     5,044     5,493     5,023     3,988      1,261     1,809
on non-accrual
Non-accrual
loans brought   --         --        (430)     (1,528)   --         (1,089)   (125)
current
Balance at end  $ 30,189   $ 37,966  $ 38,576  $ 47,548  $ 49,284   $ 55,567  $ 63,338
of period
                                                                              
Analysis of
Allowance for                                                                 
Loan Losses:
Balance at
beginning of    $ 39,015   $ 41,246  $ 42,957  $ 42,618  $ 45,265   $ 45,061  $ 49,426
period
Provision for
loan and lease  1,128      (2,876)   78        1,168     232        1,585     664
losses
Less loans
charged-off,                                                                  
net of
recoveries:
Commercial      1          (32)      1,744     (76)      (225)      (185)     (39)
business
Commercial                                                                    
real estate:
Commercial      (616)      (1,444)   (1,020)   (248)     1,983      (59)      1,076
AD&C
Commercial
investor real   1,243      123       31        110       123        140       3,219
estate
Commercial
owner occupied  (284)      100       81        --        653        484       --
real estate
Leasing         (6)        (4)       --        --        (17)       (3)       5
Consumer        169        490       508       384       111        228       348
Residential                                                                   
real estate:
Residential     216        22        447       508       253        713       420
mortgage
Residential     (2)        100       (2)       151       (2)        63        --
construction
 Net            721        (645)     1,789     829       2,879      1,381     5,029
charge-offs
Balance at end  $ 39,422   $ 39,015  $ 41,246  $ 42,957  $ 42,618   $ 45,265  $ 45,061
of period
                                                                              
Asset Quality                                                                 
Ratios:
Non-performing
loans to total 1.44%      1.77%     1.93%     2.29%     2.38%      2.60%     3.18%
loans
Non-performing
assets to      0.98%      1.25%     1.39%     1.61%     1.75%      1.92%     2.10%
total assets
Allowance for
loan losses to 1.48%      1.50%     1.61%     1.70%     1.73%      1.83%     1.98%
loans
Allowance for
loan losses to 103.06%    84.46%    83.38%    74.18%    72.40%     70.23%    62.43%
non-performing
loans
Net
charge-offs in 0.11%      (0.10)%   0.28%     0.13%     0.46%      0.23%     0.89%
quarter to
average loans

 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
                                                                              
                    Three Months Ended September 30,
                    2013                               2012
                                            Annualized                        Annualized 
                    Average       (1)      Average     Average      (1)      Average
(Dollars in
thousands and       Balances     Interest  Yield/Rate  Balances    Interest  Yield/Rate
tax-equivalent)
Assets                                                                        
Residential          $ 593,335    $ 5,315  3.57%        $ 510,475   $ 5,262  4.15%
mortgage loans (2)
Residential         120,676      1,106     3.63        133,236     1,214     3.63
construction loans
Commercial ADC      158,557      3,438     8.60        142,870     1,965     5.47
loans
Commercial investor 499,896      8,608     6.83        445,012     6,161     5.51
real estate loans
Commercial owner
occupied real       566,366      7,361     5.30        580,994     7,938     5.56
estate loans
Commercial business 331,374      4,246     4.94        332,364     5,172     5.97
loans
Leasing             1,152        20        7.11        4,858       79        6.51
Consumer loans      366,562      3,161     3.45        357,136     3,154     3.54
Total loans and     2,637,918    33,255    5.03        2,506,945   30,945    4.93
leases (3)
Taxable securities  794,344      4,942     2.49        745,475     4,508     2.42
Tax-exempt          303,299      3,305     4.36        293,111     3,328     4.54
securities (4)
Interest-bearing    34,819       22        0.25        53,717      38        0.29
deposits with banks
Federal funds sold  475           --       0.22        466          --       0.22
Total
interest-earning    3,770,855    41,524    4.39        3,599,714   38,819    4.30
assets
                                                                              
Less: allowance for
loan and lease      (41,385)                           (45,467)               
losses
Cash and due from   45,322                             46,583                 
banks
Premises and        46,784                             49,234                 
equipment, net
Other assets        217,493                            213,887                
Total assets         $ 4,039,069                        $3,863,951            
                                                                              
Liabilities and
Stockholders'                                                                 
Equity
Interest-bearing     $ 442,210    97       0.09%        $ 392,117   85       0.09%
demand deposits
Regular savings     240,910       53       0.09        216,249      51       0.09
deposits
Money market        874,946      342       0.16        894,708     488       0.22
savings deposits
Time deposits       483,814      866       0.71        580,234     1,199     0.82
Total
interest-bearing    2,041,880    1,358     0.26        2,083,308   1,823     0.35
deposits
Other borrowings    56,983       39        0.27        64,324      46        0.29
Advances from FHLB  525,543      3,255     2.46        405,184     3,599     3.53
Subordinated        35,000       222       2.55        35,000      242       2.77
debentures
Total
interest-bearing    2,659,406    4,874     0.73        2,587,816   5,710     0.88
liabilities
                                                                              
Noninterest-bearing 862,046                            774,215                
demand deposits
Other liabilities   33,806                             27,689                 
Stockholders'       483,811                            474,231                
equity
Total liabilities
and stockholders'    $ 4,039,069                        $3,863,951            
equity
                                                                              
Net interest income               $ 36,650 3.66%                    $ 33,109 3.42%
and spread
Less:
tax-equivalent                    1,344                             1,324     
adjustment
Net interest income               $ 35,306                          $ 31,785  
                                                                              
Interest
income/earning                             4.39%                             4.30%
assets
Interest
expense/earning                            0.51                              0.63
assets
Net interest margin                        3.88%                             3.67%
                                                                              
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state
rate of 39.88% for 2013 and 2012. The annualized taxable-equivalent adjustments utilized
in the above table to compute yields aggregated to $1.3 million and $1.3 million in 2013
and 2012, respectively.
(2) Includes residential mortgage loans held for sale. Home equity loans and lines are
classified as consumer loans.
(3) Non-accrual loans are included in the average balances.
(4) Includes only investments that are exempt from federal taxes.

 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
                                                                              
                    Nine Months Ended September 30,
                     2013                              2012
                                            Annualized                        Annualized 
                    Average      (1)       Average     Average      (1)      Average
(Dollars in
thousands and       Balances    Interest   Yield/Rate  Balances    Interest  Yield/Rate
tax-equivalent)
Assets                                                                        
Residential          $ 583,105   $ 16,001  3.66%        $ 491,160   $ 16,003 4.37%
mortgage loans (2)
Residential         120,053     3,142      3.50        125,179     3,505     3.74
construction loans
Commercial ADC      155,965     7,540      6.46        151,307     5,855     5.17
loans
Commercial investor 486,624     20,927     5.75        410,905     16,925    5.50
real estate loans
Commercial owner
occupied real       565,108     22,464     5.45        546,575     22,722    5.64
estate loans
Commercial business 338,869     13,288     5.10        291,727     11,988    5.33
loans
Leasing             1,764       88         6.67        5,568       272       6.52
Consumer loans      361,624     9,325      3.47        358,304     9,481     3.56
Total loans and     2,613,112   92,775     4.77        2,380,725   86,751    4.88
leases (3)
Taxable securities  765,054     13,536     2.36        775,916     14,761    2.54
Tax-exempt          300,826     9,829      4.36        283,137     10,112    4.76
securities (4)
Interest-bearing    34,379      65         0.25        40,892      83        0.27
deposits with banks
Federal funds sold  475          --        0.22        811          1        0.17
Total
interest-earning    3,713,846   116,205    4.19        3,481,481   111,708   4.28
assets
                                                                              
Less: allowance for
loan and lease      (42,223)                           (47,442)               
losses
Cash and due from   45,932                             45,844                 
banks
Premises and        47,479                             48,959                 
equipment, net
Other assets        216,958                            208,371                
Total assets         $3,981,992                         $3,737,213            
                                                                              
Liabilities and
Stockholders'                                                                 
Equity
Interest-bearing     $ 436,236   280       0.09%        $ 379,910   256      0.09%
demand deposits
Regular savings     238,627      159       0.09        209,920     155       0.10
deposits
Money market        880,794     1,131      0.17        869,675     1,471     0.23
savings deposits
Time deposits       497,136     2,639      0.71        573,946     3,825     0.89
Total
interest-bearing    2,052,793   4,209      0.27        2,033,451   5,707     0.37
deposits
Other borrowings    59,734      126        0.28        72,347      158       0.29
Advances from FHLB  482,679     9,667      2.68        405,271     10,772    3.55
Subordinated        35,000      672        2.56        35,000      732       2.79
debentures
Total
interest-bearing    2,630,206   14,674     0.75        2,546,069   17,369    0.91
liabilities
                                                                              
Noninterest-bearing 833,059                            705,362                
demand deposits
Other liabilities   33,230                             25,738                 
Stockholders'       485,497                            460,044                
equity
Total liabilities
and stockholders'    $3,981,992                         $3,737,213            
equity
                                                                              
Net interest income              $ 101,531 3.44%                    $ 94,339 3.37%
and spread
Less:
tax-equivalent                   3,967                              4,040     
adjustment
Net interest income              $ 97,564                           $ 90,299  
                                                                              
Interest
income/earning                             4.19%                             4.28%
assets
Interest
expense/earning                            0.53                              0.66
assets
Net interest margin                        3.66%                             3.62%
                                                                              
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state
rate of 39.88% for 2013 and 2012. The annualized taxable-equivalent adjustments utilized
in the above table to compute yields aggregated to $4.0 million and $4.0 million in 2013
and 2012, respectively.
(2) Includes residential mortgage loans held for sale. Home equity loans and lines are
classified as consumer loans.
(3) Non-accrual loans are included in the average balances.
(4) Includes only investments that are exempt from federal taxes.

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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