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Sandy Spring Bancorp Reports Net Income of $10.3 Million for the Second Quarter

OLNEY, Md., July 16, 2015 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net income for the second quarter of 2015 of $10.3 million ($0.42 per diluted share) compared to net income of $7.0 million ($0.28 per diluted share) for the second quarter of 2014 and net income of $11.2 million ($0.45 per diluted share) for the first quarter of 2015. Results for the second quarter of 2014 included a $6.1 million pre-tax accrual for litigation expenses.

For the six months ended June 30, 2015, net income was $21.6 million ($0.87 per diluted share) compared to net income of $17.9 million ($0.71 per diluted share) for the same period of the prior year.

"Our second quarter results reflect continued momentum from the first quarter as growth in net interest income from a larger loan portfolio and income from mortgage banking and wealth management led the way," said Daniel J. Schrider, President and Chief Executive Officer.

"This momentum is also demonstrated by balance sheet growth within each loan portfolio and overall deposit growth on a linked quarter basis," continued Schrider.

"I am especially pleased to announce the receipt of the 2015 CX Innovation Award from the Customer Experience Professionals Association, an international organization headquartered in the Boston area. Sandy Spring Bank is one of only five companies across the country to receive this prestigious award, which gives further proof of our dedication to providing a consistent and remarkable experience to all of our clients," said Schrider.

Second Quarter Highlights:

  • Total loans increased 13% compared to the second quarter of 2014 and were up 4% compared to the first quarter of 2015. This increase was driven primarily by year-over-year growth of 16% in the commercial loan portfolio.
  • Combined noninterest-bearing and interest-bearing transaction account balances increased 11% to $1.6 billion at June 30, 2015 as compared to $1.5 billion at June 30, 2014.
  • The provision for loan and lease losses for the second quarter of 2015 was a charge of $1.2 million compared to charges of $0.2 million for the second quarter of 2014 and $0.6 million for the first quarter of 2015.
  • The net interest margin was 3.42% for the second quarter of 2015, compared to 3.48% for the second quarter of 2014 and 3.44% for the first quarter of 2015.
  • Non-interest income increased 4% for the quarter compared to the prior year quarter primarily due to increases in income from wealth management and mortgage banking. Non-interest income decreased 8% compared to the linked quarter due to seasonal declines in insurance agency commissions.
  • During the second quarter of 2015, the Company repurchased 224,103 shares at an average price of $26.23 per share as part of its existing share repurchase program. For the year-to-date, the Company has repurchased 575,472 shares at an average price of $25.92 per share.

Review of Balance Sheet and Credit Quality

Total assets grew 6% to $4.5 billion at June 30, 2015 compared to $4.2 billion at June 30, 2014. This growth was driven by a 13% increase in the loan portfolio as total loans and leases ended the period at $3.3 billion.

At June 30, 2015, combined noninterest-bearing and interest-bearing checking account balances, a primary driver of multiple-product banking relationships with clients, increased 11% compared to balances at June 30, 2014. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers increased 8% compared to June 30, 2014.

Tangible common equity totaled $435 million at June 30, 2015 compared to $427 million at June 30, 2014. The ratio of tangible common equity to tangible assets decreased to 9.84% at June 30, 2015 from 10.29% at June 30, 2014 due primarily to the growth in assets and continued share repurchases. Dividends per common share were $0.44 per share for the first six months of 2015 compared to $0.36 per common share for the first six months of 2014, a 22% increase. At June 30, 2015, the Company had a total risk-based capital ratio of 14.65%, a common equity tier 1 risk-based capital ratio of 12.53%, a tier 1 risk-based capital ratio of 13.54% and a tier 1 leverage ratio of 10.83%.

Non-performing loans totaled $37.3 million at June 30, 2015 compared to $41.7 million at June 30, 2014 and $36.0 million at March 31, 2015. The level of non-performing loans to total loans decreased to 1.13% at June 30, 2015 compared to 1.43% at June 30, 2014 due to growth in the overall loan portfolio. The increase in non-performing loans at June 30, 2015 compared to March 31, 2015 was driven primarily by two residential mortgage loan credits totaling $4.6 million that were moved to nonaccrual status during the quarter. This was somewhat offset by several pay downs on such loans.

Loan charge-offs virtually equaled recoveries for the second quarter of 2015, while net loan charge-offs totaled $0.2 million for the second quarter of 2014 and of $0.9 million for the first quarter of 2015. The allowance for loan and lease losses represented 1.18% of outstanding loans and leases and 104% of non-performing loans at June 30, 2015 compared to 1.30% of outstanding loans and leases and 91% of non-performing loans at June 30, 2014. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the second quarter of 2015 increased 5% compared to the second quarter of 2014. The net interest margin was 3.42% for the second quarter of 2015 compared to 3.48% for the second quarter of 2014.

The provision for loan and lease losses was a charge of $1.2 million for the second quarter of 2015 compared to a charge of $0.2 million for the second quarter of 2014 and a charge of $0.6 million for the first quarter of 2015. The current quarter's charge reflects the growth in the loan portfolio.

Non-interest income increased 4% to $12.1 million for the second quarter of 2015 compared to $11.7 million for the second quarter of 2014. The increase in non-interest income for the quarter compared to the prior year quarter was due primarily to increases in income from wealth management due to growth in assets under management and mortgage banking due primarily to higher mortgage origination volumes.

Non-interest expenses decreased 14% to $29.5 million for the second quarter of 2015 compared to $34.1 million in the second quarter of 2014. Excluding $6.1 million of litigation expenses recognized in the second quarter of 2014, non-interest expenses increased 5% from the prior year. The current quarter included increases in salaries and benefits, equipment and marketing expenses. The non-GAAP efficiency ratio was 61.35% for the second quarter of 2015 compared to 61.30% for the second quarter of 2014.

Net interest income for the first six months of 2015 increased 5% compared to the first six months of 2014 due primarily to an increase in average loans. The net interest margin was 3.43% for the first six months of 2015 compared to 3.48% for the first six months of 2014.

The provision for loan and lease losses was a charge of $1.8 million for the first six months of 2015 compared to a credit of $0.8 million for the first six months of 2014. The change in the provision for the year-to-date period reflects the growth in the loan portfolio over the prior year period.

Non-interest income increased 10% to $25.3 million for the first six months of 2015 compared to $22.9 million for the first six months of 2014. This increase was driven by increases in income from wealth management due to growth in assets under management and mortgage banking due primarily to higher mortgage origination volumes. Other non-interest income increased due to higher gains on sales of SBA loans and loan prepayment fees.

Non-interest expenses decreased 5% to $58.7 million for the first six months of 2015 compared to $61.7 million for the first six months of 2014. Excluding the litigation expenses previously mentioned, non-interest expenses increased 5% over the prior year period. The current year-to-date included increases in salaries and benefits and other non-interest expenses that were somewhat offset by a decline in intangibles amortization. The non-GAAP efficiency ratio was 60.74% for the first six months of 2015 compared to 61.45% for the first six months of 2014.

Conference Call

The Company's management will host a conference call to discuss its second 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) July 30, 2015. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10068751.

About Sandy Spring Bancorp, Inc.

With $4.5 billion in assets, Sandy Spring Bancorp, Inc. is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc. Sandy Spring Bank traces its origin to 1868, making it among the oldest banking institutions in the region. 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 offers a broad range of commercial banking, retail banking and trust services through 44 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, 2014, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp's forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC's Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS - UNAUDITED
Three Months Ended Six Months Ended
June 30, % June 30, %
(Dollars in thousands, except per share data) 2015 2014 Change 2015 2014 Change
Results of Operations:
Net interest income $ 33,933 $ 32,309 5% $ 67,306 $ 63,901 5%
Provision (credit) for loan and lease losses 1,218 158 n.m 1,815 (824) n.m
Non-interest income 12,109 11,694 4 25,268 22,943 10
Non-interest expenses 29,477 34,141 (14) 58,721 61,690 (5)
Income before income taxes 15,347 9,704 58 32,038 25,978 23
Net income 10,333 6,982 48 21,558 17,910 20
Pre-tax pre-provision income $ 16,727 $ 15,990 5 $ 34,215 $ 31,282 9
Return on average assets 0.93% 0.67% 0.99% 0.87%
Return on average common equity 8.02% 5.47% 8.37% 7.11%
Net interest margin 3.42% 3.48% 3.43% 3.48%
Efficiency ratio - GAAP basis (1) 64.02% 77.59% 63.43% 71.04%
Efficiency ratio - Non-GAAP basis (1) 61.35% 61.30% 60.74% 61.45%
Per share data:
Basic net income $ 0.42 $ 0.28 50% $ 0.87 $ 0.72 21%
Diluted net income $ 0.42 $ 0.28 50 $ 0.87 $ 0.71 23
Average fully diluted shares 24,689,762 25,127,036 (2) 24,867,988 25,126,369 (1)
Dividends declared per share $ 0.22 $ 0.18 22 $ 0.44 $ 0.36 22
Book value per share 21.12 20.63 2 21.12 20.63 2
Tangible book value per share 17.71 17.04 4 17.71 17.04 4
Outstanding shares 24,562,471 25,069,700 (2) 24,562,471 25,069,700 (2)
Financial Condition at period-end:
Investment securities $ 878,284 $ 980,530 (10)% $ 878,284 $ 980,530 (10)%
Loans and leases 3,288,865 2,910,944 13 3,288,865 2,910,944 13
Interest-earning assets 4,222,667 3,945,643 7 4,222,667 3,945,643 7
Assets 4,507,367 4,234,342 6 4,507,367 4,234,342 6
Deposits 3,247,346 3,038,670 7 3,247,346 3,038,670 7
Interest-bearing liabilities 2,851,750 2,698,887 6 2,851,750 2,698,887 6
Stockholders' equity 518,873 517,269 -- 518,873 517,269 --
Capital ratios:
Tier 1 leverage (4) 10.83% 11.37% 10.83% 11.37%
Tier 1 capital to risk-weighted assets (4) 13.54% 14.48% 13.54% 14.48%
Total regulatory capital to risk-weighted assets (4) 14.65% 15.66% 14.65% 15.66%
Common equity tier 1 capital to risk-weighted assets (4) 12.53% n.a.% 12.53% n.a.%
Tangible common equity to tangible assets (2) 9.84% 10.29% 9.84% 10.29%
Average equity to average assets 11.65% 12.31% 11.78% 12.29%
Credit quality ratios:
Allowance for loan and lease losses to loans and leases 1.18% 1.30% 1.18% 1.30%
Non-performing loans to total loans 1.13% 1.43% 1.13% 1.43%
Non-performing assets to total assets 0.93% 1.03% 0.93% 1.03%
Allowance for loan and lease losses to non-performing loans 103.71% 90.99% 103.71% 90.99%
Annualized net charge-offs to average loans and leases (3) -- % 0.03% 0.06% -- %
(1) The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income.
The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization from non-interest expense; securities gains (losses) from non-interest income; OTTI;
and the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
(2) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets
and other comprehensive gains (losses). See the Reconciliation Table included with these Financial Highlights.
(3) Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale.
(4) Estimated ratio at June 30, 2015
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in thousands) 2015 2014 2015 2014
Pre-tax pre-provision income:
Net income $ 10,333 $ 6,982 $ 21,558 $ 17,910
Plus non-GAAP adjustment:
Litigation expenses 162 6,128 362 6,128
Income taxes 5,014 2,722 10,480 8,068
Provision (credit) for loan and lease losses 1,218 158 1,815 (824)
Pre-tax pre-provision income $ 16,727 $ 15,990 $ 34,215 $ 31,282
Efficiency ratio - GAAP basis:
Non-interest expenses $ 29,477 $ 34,141 $ 58,721 $ 61,690
Net interest income plus non-interest income $ 46,042 $ 44,003 $ 92,574 $ 86,844
Efficiency ratio - GAAP basis 64.02% 77.59% 63.43% 71.04%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses $ 29,477 $ 34,141 $ 58,721 $ 61,690
Less non-GAAP adjustment:
Amortization of intangible assets 106 224 213 594
Litigation expenses 162 6,128 362 6,128
Non-interest expenses -- as adjusted $ 29,209 $ 27,789 $ 58,146 $ 54,968
Net interest income plus non-interest income $ 46,042 $ 44,003 $ 92,574 $ 86,844
Plus non-GAAP adjustment:
Tax-equivalent income 1,589 1,331 3,153 2,613
Less non-GAAP adjustments:
Securities gains (losses) 19 -- -- --
Net interest income plus non-interest income - as adjusted $ 47,612 $ 45,334 $ 95,727 $ 89,457
Efficiency ratio - Non-GAAP basis 61.35% 61.30% 60.74% 61.45%
Tangible common equity ratio:
Total stockholders' equity $ 518,873 $ 517,269 $ 518,873 $ 517,269
Accumulated other comprehensive income 592 (5,233) 592 (5,233)
Goodwill (84,171) (84,171) (84,171) (84,171)
Other intangible assets, net (296) (737) (296) (737)
Tangible common equity $ 434,998 $ 427,128 $ 434,998 $ 427,128
Total assets $ 4,507,367 $ 4,234,342 $ 4,507,367 $ 4,234,342
Goodwill (84,171) (84,171) (84,171) (84,171)
Other intangible assets, net (296) (737) (296) (737)
Tangible assets $ 4,422,900 $ 4,149,434 $ 4,422,900 $ 4,149,434
Tangible common equity ratio 9.84% 10.29% 9.84% 10.29%
Outstanding common shares 24,562,471 25,069,700 24,562,471 25,069,700
Tangible book value per common share $ 17.71 $ 17.04 $ 17.71 $ 17.04
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
June 30, December 31, June 30,
(Dollars in thousands) 2015 2014 2014
Assets
Cash and due from banks $ 53,569 $ 52,804 $ 65,674
Federal funds sold 472 473 474
Interest-bearing deposits with banks 35,601 42,940 44,653
Cash and cash equivalents 89,642 96,217 110,801
Residential mortgage loans held for sale (at fair value) 19,445 10,512 9,042
Investments available-for-sale (at fair value) 625,819 672,209 720,885
Investments held-to-maturity -- fair value of $217,880, $222,260 and $224,313 at June 30, 2015,
December 31, 2014 and June 30, 2014, respectively 216,866 219,973 223,518
Other equity securities 35,599 41,437 36,127
Total loans and leases 3,288,865 3,127,392 2,910,944
Less: allowance for loan and lease losses (38,713) (37,802) (37,959)
Net loans and leases 3,250,152 3,089,590 2,872,985
Premises and equipment, net 51,609 49,402 45,296
Other real estate owned 4,514 3,195 1,967
Accrued interest receivable 13,144 12,634 12,271
Goodwill 84,171 84,171 84,171
Other intangible assets, net 296 510 737
Other assets 116,110 117,282 116,542
Total assets $ 4,507,367 $ 4,397,132 $4,234,342
Liabilities
Noninterest-bearing deposits $ 1,092,413 $ 993,737 $ 984,700
Interest-bearing deposits 2,154,933 2,072,772 2,053,970
Total deposits 3,247,346 3,066,509 3,038,670
Securities sold under retail repurchase agreements and federal funds purchased 111,817 74,432 72,917
Advances from FHLB 550,000 655,000 537,000
Subordinated debentures 35,000 35,000 35,000
Accrued interest payable and other liabilities 44,331 44,440 33,486
Total liabilities 3,988,494 3,875,381 3,717,073
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,562,471,
25,044,877 and 25,069,700 at June 30, 2015, December 31, 2014 and June 30, 2014, respectively 24,562 25,045 25,070
Additional paid in capital 181,504 194,647 194,252
Retained earnings 313,399 302,882 292,714
Accumulated other comprehensive income (loss) (592) (823) 5,233
Total stockholders' equity 518,873 521,751 517,269
Total liabilities and stockholders' equity $ 4,507,367 $ 4,397,132 $4,234,342
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in thousands, except per share data) 2015 2014 2015 2014
Interest Income:
Interest and fees on loans and leases $ 33,031 $ 30,706 $ 65,170 $ 60,440
Interest on loans held for sale 132 71 208 130
Interest on deposits with banks 22 22 44 42
Interest and dividends on investment securities:
Taxable 3,850 3,876 7,427 7,992
Exempt from federal income taxes 1,814 2,316 4,072 4,637
Total interest income 38,849 36,991 76,921 73,241
Interest Expense:
Interest on deposits 1,367 1,193 2,561 2,377
Interest on retail repurchase agreements and federal funds purchased 60 37 110 75
Interest on advances from FHLB 3,266 3,233 6,502 6,451
Interest on subordinated debt 223 219 442 437
Total interest expense 4,916 4,682 9,615 9,340
Net interest income 33,933 32,309 67,306 63,901
Provision (credit) for loan and lease losses 1,218 158 1,815 (824)
Net interest income after provision (credit) for loan and lease losses 32,715 32,151 65,491 64,725
Non-interest Income:
Investment securities gains 19 -- 19 --
Service charges on deposit accounts 1,839 2,089 3,721 4,061
Mortgage banking activities 822 570 2,000 886
Wealth management income 5,161 4,741 10,077 9,207
Insurance agency commissions 881 961 2,499 2,601
Income from bank owned life insurance 606 608 1,319 1,206
Bank card fees 1,220 1,169 2,277 2,147
Other income 1,561 1,556 3,356 2,835
Total non-interest income 12,109 11,694 25,268 22,943
Non-interest Expenses:
Salaries and employee benefits 17,534 16,474 34,833 32,829
Occupancy expense of premises 3,173 3,274 6,662 6,746
Equipment expenses 1,490 1,262 2,863 2,518
Marketing 942 802 1,473 1,344
Outside data services 1,102 1,216 2,363 2,432
FDIC insurance 654 573 1,285 1,093
Amortization of intangible assets 106 224 213 594
Litigation expenses 162 6,128 362 6,128
Other expenses 4,314 4,188 8,667 8,006
Total non-interest expenses 29,477 34,141 58,721 61,690
Income before income taxes 15,347 9,704 32,038 25,978
Income tax expense 5,014 2,722 10,480 8,068
Net income $ 10,333 $ 6,982 $ 21,558 $ 17,910
Net Income Per Share Amounts:
Basic net income per share $ 0.42 $ 0.28 $ 0.87 $ 0.72
Diluted net income per share $ 0.42 $ 0.28 $ 0.87 $ 0.71
Dividends declared per share $ 0.22 $ 0.18 $ 0.44 $ 0.36
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2015 2014
(Dollars in thousands, except per share data) Q2 Q1 Q4 Q3 Q2 Q1
Profitability for the Quarter:
Tax-equivalent interest income $ 40,438 $ 39,343 $ 39,258 $ 38,446 $ 38,322 $ 37,532
Interest expense 4,916 4,699 4,748 4,730 4,682 4,658
Tax-equivalent net interest income 35,522 34,644 34,510 33,716 33,640 32,874
Tax-equivalent adjustment 1,589 1,271 1,283 1,296 1,331 1,282
Provision for loan and lease losses 1,218 597 853 (192) 158 (982)
Non-interest income 12,109 13,159 11,338 12,590 11,694 11,249
Non-interest expenses 29,477 29,244 30,478 28,632 34,141 27,549
Income before income taxes 15,347 16,691 13,234 16,570 9,704 16,274
Income tax expense 5,014 5,466 4,086 5,428 2,722 5,346
Net income $ 10,333 $ 11,225 $ 9,148 $ 11,142 $ 6,982 $ 10,928
Financial Performance:
Pre-tax pre-provision income $ 16,727 $ 17,488 $ 14,242 $ 16,614 $ 15,990 $ 15,292
Return on average assets 0.93% 1.04% 0.85% 1.05% 0.67% 1.08%
Return on average common equity 8.02% 8.73% 6.93% 8.54% 5.47% 8.80%
Net interest margin 3.42% 3.44% 3.44% 3.42% 3.48% 3.47%
Efficiency ratio - GAAP basis (1) 64.02% 62.85% 68.39% 63.61% 77.59% 64.31%
Efficiency ratio - Non-GAAP basis (1) 61.35% 60.53% 65.89% 61.09% 61.30% 61.60%
Per Share Data:
Basic net income per share $ 0.42 $ 0.45 $ 0.37 $ 0.44 $ 0.28 $ 0.44
Diluted net income per share $ 0.42 $ 0.45 $ 0.36 $ 0.44 $ 0.28 $ 0.43
Average fully diluted shares 24,689,762 25,048,576 25,151,831 25,151,582 25,127,036 25,124,206
Dividends declared per common share $ 0.22 $ 0.22 $ 0.20 $ 0.20 $ 0.18 $ 0.18
Non-interest Income:
Securities gains (losses) $ 19 $ -- $ (3) $ 8 $ -- $ --
Service charges on deposit accounts 1,839 1,882 2,135 2,226 2,089 1,972
Mortgage banking activities 822 1,178 512 596 570 316
Wealth management income 5,161 4,916 4,905 4,974 4,741 4,466
Insurance agency commissions 881 1,618 985 1,410 961 1,640
Income from bank owned life insurance 606 713 627 611 608 598
Bank card fees 1,220 1,057 1,144 1,148 1,169 978
Other income 1,561 1,795 1,033 1,617 1,556 1,279
Total Non-interest Income $ 12,109 $ 13,159 $ 11,338 $ 12,590 $ 11,694 $ 11,249
Non-interest Expense:
Salaries and employee benefits $ 17,534 $ 17,299 $ 16,793 $ 16,765 $ 16,474 $ 16,355
Occupancy expense of premises 3,173 3,489 3,914 3,032 3,274 3,472
Equipment expenses 1,490 1,373 1,333 1,337 1,262 1,256
Marketing 942 531 838 744 802 542
Outside data services 1,102 1,261 1,284 1,231 1,216 1,216
FDIC insurance 654 631 615 594 573 520
Amortization of intangible assets 106 107 112 115 224 370
Litigation expenses 162 200 155 236 6,128 --
Professional fees 1,199 1,209 1,246 1,092 1,292 914
Other real estate owned expenses 4 10 2 40 9 --
Other expenses 3,111 3,134 4,186 3,446 2,887 2,904
Total Non-interest Expense $ 29,477 $ 29,244 $ 30,478 $ 28,632 $ 34,141 $ 27,549
(1) The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of
Income. The traditional, efficiency ratio - non-GAAP basis excludes intangible asset amortization from non-interest expense; excludes securities gains;
OTTI losses from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these
Financial Highlights.
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2015 2014
(Dollars in thousands) Q2 Q1 Q4 Q3 Q2 Q1
Balance Sheets at Quarter End:
Residential mortgage loans $ 744,195 $ 728,858 $ 717,886 $ 698,925 $ 668,536 $ 640,939
Residential construction loans 137,134 130,321 136,741 141,883 149,321 143,109
Commercial ADC loans 223,103 203,731 205,124 194,666 178,972 163,343
Commercial investor real estate loans 694,179 668,931 640,193 575,984 577,813 573,634
Commercial owner occupied real estate loans 643,973 618,846 611,061 584,964 581,795 582,472
Commercial business loans 409,795 385,452 390,781 368,611 357,472 348,180
Leasing 21 36 54 156 260 439
Consumer loans 436,465 428,531 425,552 410,723 396,775 380,697
Total loans and leases 3,288,865 3,164,706 3,127,392 2,975,912 2,910,944 2,832,813
Allowance for loan and lease losses (38,713) (37,475) (37,802) (37,574) (37,959) (38,026)
Loans held for sale 19,445 13,899 10,512 6,656 9,042 3,079
Investment securities 878,284 912,565 933,619 950,869 980,530 997,584
Interest-earning assets 4,222,667 4,125,549 4,114,936 3,976,731 3,945,643 3,891,223
Total assets 4,507,367 4,401,380 4,397,132 4,248,731 4,234,342 4,168,998
Noninterest-bearing demand deposits 1,092,413 1,017,566 993,737 986,549 984,700 882,169
Total deposits 3,247,346 3,109,892 3,066,509 3,028,788 3,038,670 2,959,195
Customer repurchase agreements 111,817 101,640 74,432 71,384 72,917 67,038
Total interest-bearing liabilities 2,851,750 2,818,966 2,837,204 2,706,623 2,698,887 2,748,064
Total stockholders' equity 518,873 521,768 521,751 522,404 517,269 510,386
Quarterly Average Balance Sheets:
Residential mortgage loans $ 734,382 $ 724,248 $ 707,719 $ 682,013 $ 652,232 $ 627,944
Residential construction loans 137,216 132,456 141,890 147,750 145,968 134,261
Commercial ADC loans 218,341 206,105 201,020 180,293 168,063 162,544
Commercial investor real estate loans 668,883 645,163 607,050 577,851 575,283 557,168
Commercial owner occupied real estate loans 624,407 611,722 594,634 585,014 579,953 584,155
Commercial business loans 398,510 383,111 367,872 367,203 348,597 349,734
Leasing 28 44 114 206 352 567
Consumer loans 434,011 425,434 417,910 404,062 390,076 377,822
Total loans and leases 3,215,778 3,128,283 3,038,209 2,944,392 2,860,524 2,794,195
Loans held for sale 14,075 7,053 9,952 7,518 6,940 5,216
Investment securities 898,237 925,683 942,782 965,206 991,135 1,012,701
Interest-earning assets 4,162,963 4,097,648 4,022,051 3,954,858 3,893,843 3,845,513
Total assets 4,438,670 4,372,988 4,292,237 4,220,084 4,157,559 4,105,225
Noninterest-bearing demand deposits 1,023,042 986,688 1,000,285 956,830 899,287 825,968
Total deposits 3,128,562 3,056,186 3,063,591 3,036,686 2,965,329 2,876,641
Customer repurchase agreements 106,179 90,020 78,746 73,046 68,880 62,864
Total interest-bearing liabilities 2,852,414 2,817,575 2,731,791 2,711,206 2,716,537 2,749,459
Total stockholders' equity 516,940 521,346 524,063 517,534 511,738 503,851
Financial Measures:
Average equity to average assets 11.65% 11.92% 12.21% 12.26% 12.31% 12.27%
Investment securities to earning assets 20.80% 22.12% 22.69% 23.91% 24.85% 25.64%
Loans to earning assets 77.89% 76.71% 76.00% 74.83% 73.78% 72.80%
Loans to assets 72.97% 71.90% 71.12% 70.04% 68.75% 67.95%
Loans to deposits 101.28% 101.76% 101.99% 98.25% 95.80% 95.73%
Capital Measures:
Tier 1 leverage (1) 10.83% 11.00% 11.26% 11.36% 11.37% 11.43%
Tier 1 capital to risk-weighted assets (1) 13.54% 14.01% 13.95% 14.52% 14.48% 14.64%
Total regulatory capital to risk-weighted assets (1) 14.65% 15.12% 15.06% 15.68% 15.66% 15.85%
Common equity tier 1 capital to risk-weighted assets (1) 12.53% 14.01% n.a. n.a. n.a. n.a.
Book value per share $ 21.12 $ 21.10 $ 20.83 $ 20.83 $ 20.63 $ 20.38
Outstanding shares 24,562,471 24,733,868 25,044,877 25,076,794 25,069,700 25,043,482
(1) Estimated ratio at June 30, 2015
Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
2015 2014
(Dollars in thousands) June 30, March 31, December 31, September 30, June 30, March 31,
Non-Performing Assets:
Loans and leases 90 days past due:
Commercial business $ -- $ -- $ -- $ -- $ 1 $ --
Commercial real estate:
Commercial AD&C -- -- -- -- -- --
Commercial investor real estate -- -- -- -- -- --
Commercial owner occupied real estate -- -- -- 649 -- --
Leasing 2 -- -- -- -- --
Consumer 7 -- -- 6 3 --
Residential real estate:
Residential mortgage -- -- -- -- -- --
Residential construction -- -- -- -- -- --
Total loans and leases 90 days past due 9 -- -- 655 4 --
Non-accrual loans and leases:
Commercial business 3,285 4,166 3,184 4,151 4,309 3,272
Commercial real estate:
Commercial AD&C 194 1,363 2,464 3,792 3,739 4,133
Commercial investor real estate 10,023 10,083 8,156 8,210 6,731 7,284
Commercial owner occupied real estate 8,423 8,974 8,941 10,742 10,868 7,150
Leasing -- -- -- -- -- --
Consumer 1,214 1,962 1,668 1,830 2,058 2,115
Residential real estate:
Residential mortgage 7,780 3,235 3,012 4,417 4,501 5,025
Residential construction 780 788 1,105 2,497 2,143 2,304
Total non-accrual loans and leases 31,699 30,571 28,530 35,639 34,349 31,283
Total restructured loans - accruing 5,620 5,446 5,497 7,382 7,364 7,411
Total non-performing loans and leases 37,328 36,017 34,027 43,676 41,717 38,694
Other assets and real estate owned (OREO) 4,514 3,227 3,195 1,762 1,967 1,619
Total non-performing assets $ 41,842 $ 39,244 $ 37,222 $ 45,438 $ 43,684 $ 40,313
For the quarter ended,
June 30, March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands) 2015 2015 2014 2014 2014 2014
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period $ 30,571 $ 28,530 $ 35,639 $ 34,349 $ 31,283 $ 30,574
Non-accrual balances transferred to OREO (1,309) (32) (1,475) (300) (390) (281)
Non-accrual balances charged-off (549) (1,077) (1,033) (216) (357) (513)
Net payments or draws (2,970) (1,067) (4,139) (590) (1,580) (1,073)
Loans placed on non-accrual 5,956 4,217 779 2,396 5,393 2,576
Non-accrual loans brought current -- -- (1,241) -- -- --
Balance at end of period $ 31,699 $ 30,571 $ 28,530 $ 35,639 $ 34,349 $ 31,283
Analysis of Allowance for Loan Losses:
Balance at beginning of period $ 37,475 $ 37,802 $ 37,574 $ 37,959 $ 38,026 $ 38,766
Provision (credit) for loan and lease losses 1,218 597 853 (192) 158 (982)
Less loans charged-off, net of recoveries:
Commercial business 73 (89) 50 (58) 28 (768)
Commercial real estate:
Commercial AD&C (547) 706 529 -- -- --
Commercial investor real estate 85 (5) (5) (2) (23) (5)
Commercial owner occupied real estate (1) 212 (6) -- 265 --
Leasing -- -- -- -- -- --
Consumer 395 43 83 244 11 331
Residential real estate:
Residential mortgage (18) 65 (17) 43 (27) 203
Residential construction (7) (8) (9) (34) (29) (3)
Net charge-offs (20) 924 625 193 225 (242)
Balance at end of period $ 38,713 $ 37,475 $ 37,802 $ 37,574 $ 37,959 $ 38,026
Asset Quality Ratios:
Non-performing loans to total loans 1.13% 1.14% 1.09% 1.47% 1.43% 1.37%
Non-performing assets to total assets 0.93% 0.89% 0.85% 1.07% 1.03% 0.97%
Allowance for loan losses to loans 1.18% 1.18% 1.21% 1.26% 1.30% 1.34%
Allowance for loan losses to non-performing loans 103.71% 104.05% 111.09% 86.03% 90.99% 98.27%
Annualized net charge-offs to average loans 0.00% 0.12% 0.08% 0.03% 0.03% (0.04)%
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
Three Months Ended June 30,
2015 2014
Annualized Annualized
Average (1) Average Average (1) Average
(Dollars in thousands and tax-equivalent) Balances Interest Yield/Rate Balances Interest Yield/Rate
Assets
Residential mortgage loans $ 734,382 $ 6,155 3.35% $ 652,232 $ 5,614 3.44%
Residential construction loans 137,216 1,268 3.71 145,968 1,359 3.73
Commercial ADC loans 218,341 2,525 4.64 168,063 2,180 5.20
Commercial investor real estate loans 668,883 7,771 4.66 575,283 7,139 4.98
Commercial owner occupied real estate loans 624,407 7,669 4.93 579,953 7,146 5.09
Commercial business loans 398,510 4,369 4.40 348,597 4,054 4.69
Leasing 28 -- 1.49 352 6 6.30
Consumer loans 434,011 3,606 3.35 390,076 3,208 3.32
Total loans and leases (2) 3,215,778 33,363 4.16 2,860,524 30,706 4.34
Loans held for sale 14,075 132 3.76 6,940 71 4.12
Taxable securities 606,581 3,786 2.50 688,793 4,263 2.48
Tax-exempt securities (3) 291,656 3,135 4.30 302,342 3,260 4.32
Interest-bearing deposits with banks 34,400 22 0.25 34,770 22 0.25
Federal funds sold 473 -- 0.22 474 -- 0.22
Total interest-earning assets 4,162,963 40,438 3.89 3,893,843 38,322 3.97
Less: allowance for loan and lease losses (38,217) (38,342)
Cash and due from banks 46,894 44,987
Premises and equipment, net 51,591 45,696
Other assets 215,439 211,375
Total assets $ 4,438,670 $4,157,559
Liabilities and Stockholders' Equity
Interest-bearing demand deposits $ 527,307 101 0.08% $ 477,018 102 0.09%
Regular savings deposits 278,199 37 0.05 262,078 49 0.07
Money market savings deposits 833,382 317 0.15 865,134 273 0.13
Time deposits 466,632 912 0.78 461,812 769 0.67
Total interest-bearing deposits 2,105,520 1,367 0.26 2,066,042 1,193 0.23
Other borrowings 106,180 60 0.23 68,880 37 0.22
Advances from FHLB 605,714 3,266 2.16 546,615 3,233 2.37
Subordinated debentures 35,000 223 2.55 35,000 219 2.50
Total interest-bearing liabilities 2,852,414 4,916 0.69 2,716,537 4,682 0.69
Noninterest-bearing demand deposits 1,023,042 899,287
Other liabilities 46,274 29,997
Stockholders' equity 516,940 511,738
Total liabilities and stockholders' equity $ 4,438,670 $4,157,559
Net interest income and spread $ 35,522 3.20% $ 33,640 3.28%
Less: tax-equivalent adjustment 1,589 1,331
Net interest income $ 33,933 $ 32,309
Interest income/earning assets 3.89% 3.97%
Interest expense/earning assets 0.47 0.49
Net interest margin 3.42% 3.48%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and 2014. The annualized taxable-equivalent adjustments utilized in
the above table to compute yields aggregated to $1.6 million and $1.3 million in 2015 and 2014, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
Six Months Ended June 30,
2015 2014
Annualized Annualized
Average (1) Average Average (1) Average
(Dollars in thousands and tax-equivalent) Balances Interest Yield/Rate Balances Interest Yield/Rate
Assets
Residential mortgage loans $ 729,343 $ 12,279 3.37% $ 640,155 $ 11,061 3.46%
Residential construction loans 134,849 2,489 3.72 140,147 2,612 3.76
Commercial ADC loans 212,257 4,862 4.62 165,319 4,253 5.19
Commercial investor real estate loans 657,088 15,350 4.71 566,275 13,872 4.94
Commercial owner occupied real estate loans 618,100 15,200 4.96 582,042 14,213 5.08
Commercial business loans 390,853 8,507 4.39 349,162 8,091 4.67
Leasing 36 1 3.76 459 12 5.22
Consumer loans 429,746 7,106 3.35 383,983 6,326 3.34
Total loans and leases (2) 3,172,272 65,794 4.18 2,827,542 60,440 4.34
Loans held for sale 10,583 208 3.94 6,083 130 4.28
Taxable securities 617,861 7,722 2.50 699,460 8,715 2.49
Tax-exempt securities (3) 294,024 6,305 4.29 302,398 6,527 4.32
Interest-bearing deposits with banks 35,273 44 0.25 33,853 42 0.25
Federal funds sold 473 1 0.22 475 -- 0.22
Total interest-earning assets 4,130,486 80,074 3.90 3,869,811 75,854 3.96
Less: allowance for loan and lease losses (37,833) (38,864)
Cash and due from banks 46,663 45,268
Premises and equipment, net 51,127 45,787
Other assets 215,567 209,535
Total assets $ 4,406,010 $4,131,537
Liabilities and Stockholders' Equity
Interest-bearing demand deposits $ 525,692 207 0.08% $ 468,677 194 0.08%
Regular savings deposits 274,220 71 0.05 255,667 97 0.08
Money market savings deposits 832,549 590 0.14 871,464 546 0.13
Time deposits 455,147 1,693 0.75 462,591 1,540 0.67
Total interest-bearing deposits 2,087,608 2,561 0.25 2,058,399 2,377 0.23
Other borrowings 98,228 110 0.23 65,889 75 0.23
Advances from FHLB 614,254 6,502 2.13 573,619 6,451 2.27
Subordinated debentures 35,000 442 2.53 35,000 437 2.50
Total interest-bearing liabilities 2,835,090 9,615 0.68 2,732,907 9,340 0.69
Noninterest-bearing demand deposits 1,004,965 862,830
Other liabilities 46,824 27,984
Stockholders' equity 519,131 507,816
Total liabilities and stockholders' equity $ 4,406,010 $4,131,537
Net interest income and spread $ 70,459 3.22% $ 66,514 3.27%
Less: tax-equivalent adjustment 3,153 2,613
Net interest income $ 67,306 $ 63,901
Interest income/earning assets 3.90% 3.96%
Interest expense/earning assets 0.47 0.48
Net interest margin 3.43% 3.48%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and 2014. The annualized taxable-equivalent adjustments utilized in
the above table to compute yields aggregated to $3.2 million and $2.6 million in 2015 and 2014, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.

CONTACT: 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

Source:Sandy Spring Bancorp, Inc.