×

Sandy Spring Bancorp Reports Net Income of $11.0 Million for the Third Quarter

OLNEY, Md., Oct. 22, 2015 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net income for the third quarter of 2015 of $11.0 million ($0.45 per diluted share) compared to net income of $11.1 million ($0.44 per diluted share) for the third quarter of 2014 and net income of $10.3 million ($0.42 per diluted share) for the second quarter of 2015.

For the nine months ended September 30, 2015, net income was $32.6 million ($1.31 per diluted share) compared to net income of $29.1 million ($1.16 per diluted share) for the same period of the prior year.

“Our core financial results for the third quarter were solid, as loan growth continued to fuel higher net interest income. Our growth in all three major loan portfolios has been significant given the level of competition in the marketplace and the state of the economy,” said Daniel J. Schrider, President and Chief Executive Officer.

“A stable net interest margin, our strong capital position, diverse revenue stream, and consistent credit quality were key drivers of our financial performance. These results provide evidence of our continuing dedication to provide a consistent and valuable client experience in all facets of our franchise,” said Schrider.

Third Quarter Highlights:

  • Total loans increased 15% compared to the third quarter of 2014 and were up 4% compared to the second quarter of 2015. This increase was driven primarily by year-over-year growth of 19% in the commercial loan portfolio.
  • Combined noninterest-bearing and interest-bearing transaction account balances increased 9% to $1.6 billion at September 30, 2015 as compared to $1.5 billion at September 30, 2014.
  • The provision for loan and lease losses for the third quarter of 2015 was a charge of $1.7 million compared to a credit of $0.2 million for the third quarter of 2014 and a charge of $1.2 million for the second quarter of 2015.
  • The net interest margin was 3.43% for the third quarter of 2015, compared to 3.42% for both the third quarter of 2014 and the second quarter of 2015.
  • The non-GAAP efficiency ratio improved to 59.73% for the current quarter from 61.09% for the prior year quarter due to stable expense levels and higher net interest income resulting from strong loan growth over the prior year quarter.
  • During the third quarter of 2015, the Company repurchased 153,460 shares of its common stock at an average price of $25.76 per share as part of its existing share repurchase program. For the year-to-date, the Company has repurchased 728,932 shares at an average price of $25.88 per share.


Review of Balance Sheet and Credit Quality

Total assets grew 9% to $4.6 billion at September 30, 2015 compared to $4.2 billion at September 30, 2014. This growth was driven by a 15% increase in the loan portfolio as total loans and leases ended the period at $3.4 billion.

At September 30, 2015, combined noninterest-bearing and interest-bearing checking account balances, a primary driver of multiple-product banking relationships with clients, increased 9% compared to balances at September 30, 2014. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers increased 10% compared to September 30, 2014.

Tangible common equity totaled $437 million at September 30, 2015 compared to $434 million at September 30, 2014. The ratio of tangible common equity to tangible assets decreased to 9.66% at September 30, 2015 from 10.42% at September 30, 2014 due primarily to the growth in assets and continued share repurchases. Dividends per common share were $0.66 per share for the first nine months of 2015 compared to $0.56 per common share for the first nine months of 2014, an 18% increase. At September 30, 2015, the Company had a total risk-based capital ratio of 14.27%, a common equity tier 1 risk-based capital ratio of 12.20%, a tier 1 risk-based capital ratio of 13.17% and a tier 1 leverage ratio of 10.65%.

Non-performing loans totaled $36.9 million at September 30, 2015 compared to $43.7 million at September 30, 2014 and $37.3 million at June 30, 2015. The level of non-performing loans to total loans decreased to 1.08% at September 30, 2015 compared to 1.47% at September 30, 2014 due to growth in the overall loan portfolio. The decrease in non-performing loans at September 30, 2015 compared to June 30, 2015 was driven primarily by payoffs and charge-offs on several such loans that exceeded loans added to non-performing status during the quarter.

Loan charge-offs, net of recoveries, totaled $0.8 million for the third quarter of 2015, compared to net loan charge-offs of $0.2 million for the third quarter of 2014. The allowance for loan and lease losses represented 1.16% of outstanding loans and leases and 107% of non-performing loans at September 30, 2015 compared to 1.26% of outstanding loans and leases and 86% of non-performing loans at September 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 third quarter of 2015 increased 8% compared to the third quarter of 2014. The net interest margin was 3.43% for the third quarter of 2015 compared to 3.42% for the third quarter of 2014.

The provision for loan and lease losses was a charge of $1.7 million for the third quarter of 2015 compared to a credit of $0.2 million for the third quarter of 2014 and a charge of $1.2 million for the second quarter of 2015. The majority of the current quarter’s charge reflects the growth in the loan portfolio.

Non-interest income decreased 2% to $12.4 million for the third quarter of 2015 compared to $12.6 million for the third quarter of 2014. The decrease in non-interest income for the quarter compared to the prior year quarter was due primarily to decreases in service charges on deposit accounts and other non-interest income, which were somewhat offset by an increase in insurance agency commissions.

Non-interest expenses increased to $29.6 million for the third quarter of 2015 compared to $28.6 million in the third quarter of 2014. The current quarter included increases in salaries and benefits. The non-GAAP efficiency ratio was 59.73% for the third quarter of 2015 compared to 61.09% for the third quarter of 2014.

Net interest income for the first nine months of 2015 increased 6% compared to the first nine months of 2014 due primarily to an increase in average loans. The net interest margin was 3.43% for the first nine months of 2015 compared to 3.46% for the first nine months of 2014.

The provision for loan and lease losses was a charge of $3.5 million for the first nine months of 2015 compared to a credit of $1.0 million for the first nine months of 2014. The change in the provision for the current year-to-date period is primarily due to the growth in the loan portfolio over the prior year period.

Non-interest income increased 6% to $37.7 million for the first nine months of 2015 compared to $35.5 million for the first nine months of 2014. This increase was driven by increases in income from wealth 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.

Non-interest expenses decreased 2% to $88.4 million for the first nine months of 2015 compared to $90.3 million for the first nine months of 2014. Excluding accrued litigation expenses, non-interest expenses increased 5% over the prior year period. The current year-to-date included increases in salaries, pension costs and health benefits and other non-interest expenses. The non-GAAP efficiency ratio was 60.41% for the first nine months of 2015 compared to 61.32% for the first nine months of 2014.

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 1-866-235-9910. 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) November 6, 2015. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10072996.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring Bank offers a broad range of commercial banking, retail banking, mortgage and trust services throughout central Maryland, Northern Virginia, and the greater Washington, D.C. market. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. With $4.6 billion in assets, the bank operates 44 community offices and six financial centers across the region. Visit www.sandyspringbank.com for more information.

Forward-Looking Statements

Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release. These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan and lease losses; assessments of market risk; and statements of the ability to achieve financial and other goals.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Sandy Spring Bancorp does not assume any duty and does not undertake to update its forward-looking statements. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Sandy Spring Bancorp anticipated in its forward-looking statements and future results could differ materially from historical performance.

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company’s loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company’s ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2014, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.


Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS - UNAUDITED
Three Months Ended Nine Months Ended
September 30, % September 30, %
(Dollars in thousands, except per share data) 2015 2014 Change 2015 2014 Change
Results of Operations:
Net interest income $ 35,116 $ 32,420 8 % $ 102,422 $ 96,321 6 %
Provision (credit) for loan and lease losses 1,706 (192) n.m 3,521 (1,016) n.m
Non-interest income 12,390 12,590 (2) 37,658 35,533 6
Non-interest expenses 29,630 28,632 3 88,351 90,322 (2)
Income before income taxes 16,170 16,570 (2) 48,208 42,548 13
Net income 10,995 11,142 (1) 32,553 29,052 12
Pre-tax pre-provision income $ 18,031 $ 16,614 9 $ 52,246 $ 47,896 9
Return on average assets 0.96 % 1.05 % 0.98 % 0.93 %
Return on average common equity 8.41 % 8.54 % 8.39 % 7.60 %
Net interest margin 3.43 % 3.42 % 3.43 % 3.46 %
Efficiency ratio - GAAP basis (1) 62.37 % 63.61 % 63.07 % 68.50 %
Efficiency ratio - Non-GAAP basis (1) 59.73 % 61.09 % 60.41 % 61.32 %
Per share data:
Basic net income $ 0.45 $ 0.44 2 % $ 1.32 $ 1.16 14 %
Diluted net income $ 0.45 $ 0.44 2 $ 1.31 $ 1.16 13
Average fully diluted shares 24,602,817 25,151,582 (2) 24,779,010 25,135,078 (1)
Dividends declared per share $ 0.22 $ 0.20 10 $ 0.66 $ 0.56 18
Book value per share 21.44 20.83 3 21.44 20.83 3
Tangible book value per share 17.91 17.31 3 17.91 17.31 3
Outstanding shares 24,424,944 25,076,794 (3) 24,424,944 25,076,794 (3)
Financial Condition at period-end:
Investment securities $ 862,409 $ 950,869 (9)% $ 862,409 $ 950,869 (9)%
Loans and leases 3,412,439 2,975,912 15 3,412,439 2,975,912 15
Interest-earning assets 4,339,375 3,976,731 9 4,339,375 3,976,731 9
Assets 4,611,034 4,248,731 9 4,611,034 4,248,731 9
Deposits 3,275,668 3,028,788 8 3,275,668 3,028,788 8
Interest-bearing liabilities 2,973,747 2,706,623 10 2,973,747 2,706,623 10
Stockholders' equity 523,594 522,404 - 523,594 522,404 -
Capital ratios:
Tier 1 leverage (4) 10.65 % 11.36 % 10.65 % 11.36 %
Tier 1 capital to risk-weighted assets (4) 13.17 % 14.52 % 13.17 % 14.52 %
Total regulatory capital to risk-weighted assets (4) 14.27 % 15.68 % 14.27 % 15.68 %
Common equity tier 1 capital to risk-weighted assets (4) 12.20 %n.a. % 12.20 % n.a. %
Tangible common equity to tangible assets (2) 9.66 % 10.42 % 9.66 % 10.42 %
Average equity to average assets 11.43 % 12.26 % 11.66 % 12.28 %
Credit quality ratios:
Allowance for loan and lease losses to loans and leases 1.16 % 1.26 % 1.16 % 1.26 %
Non-performing loans to total loans 1.08 % 1.47 % 1.08 % 1.47 %
Non-performing assets to total assets 0.86 % 1.07 % 0.86 % 1.07 %
Allowance for loan and lease losses to non-performing loans 107.44 % 86.03 % 107.44 % 86.03 %
Annualized net charge-offs to average loans and leases (3) 0.09 % 0.03 % 0.07 % 0.01 %
(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 September 30, 2015

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands) 2015 2014 2015 2014
Pre-tax pre-provision income:
Net income $ 10,995 $ 11,142 $ 32,553 $ 29,052
Plus non-GAAP adjustment:
Litigation expenses 155 236 517 6,364
Income taxes 5,175 5,428 15,655 13,496
Provision (credit) for loan and lease losses 1,706 (192) 3,521 (1,016)
Pre-tax pre-provision income $ 18,031 $ 16,614 $ 52,246 $ 47,896
Efficiency ratio - GAAP basis:
Non-interest expenses $ 29,630 $ 28,632 $ 88,351 $ 90,322
Net interest income plus non-interest income $ 47,506 $ 45,010 $ 140,080 $ 131,854
Efficiency ratio - GAAP basis 62.37% 63.61% 63.07% 68.50%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses $ 29,630 $ 28,632 $ 88,351 $ 90,322
Less non-GAAP adjustment:
Amortization of intangible assets 107 115 320 709
Litigation expenses 155 236 517 6,364
Non-interest expenses - as adjusted $ 29,368 $ 28,281 $ 87,514 $ 83,249
Net interest income plus non-interest income $ 47,506 $45,010 $ 140,080 $ 131,854
Plus non-GAAP adjustment:
Tax-equivalent income 1,663 1,296 4,816 3,909
Less non-GAAP adjustments:
Securities gains 1 8 20 8
Net interest income plus non-interest income - as adjusted $ 49,168 $ 46,298 $ 144,876 $ 135,755
Efficiency ratio - Non-GAAP basis 59.73% 61.09% 60.41% 61.32%
Tangible common equity ratio:
Total stockholders' equity $ 523,594 $ 522,404 $ 523,594 $ 522,404
Accumulated other comprehensive income (1,801) (3,632) (1,801) (3,632)
Goodwill (84,171) (84,171) (84,171) (84,171)
Other intangible assets, net (190) (622) (190) (622)
Tangible common equity $ 437,432 $ 433,979 $ 437,432 $ 433,979
Total assets $ 4,611,034 $ 4,248,731 $ 4,611,034 $ 4,248,731
Goodwill (84,171) (84,171) (84,171) (84,171)
Other intangible assets, net (190) (622) (190) (622)
Tangible assets $ 4,526,673 $ 4,163,938 $ 4,526,673 $ 4,163,938
Tangible common equity ratio 9.66% 10.42% 9.66% 10.42%
Outstanding common shares 24,424,944 25,076,794 24,424,944 25,076,794
Tangible book value per common share $ 17.91 $17.31 $ 17.91 $17.31

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
September 30, December 31, September 30,
(Dollars in thousands) 2015 2014 2014
Assets
Cash and due from banks $ 42,322 $ 52,804 $ 48,665
Federal funds sold 472 473 474
Interest-bearing deposits with banks 53,637 42,940 42,820
Cash and cash equivalents 96,431 96,217 91,959
Residential mortgage loans held for sale (at fair value) 10,418 10,512 6,656
Investments available-for-sale (at fair value) 607,619 672,209 692,107
Investments held-to-maturity -- fair value of $220,223, $222,260 and $223,130 at September 30, 2015, December 31, 2014 and September 30, 2014, respectively 216,642 219,973 221,690
Other equity securities 38,148 41,437 37,072
Total loans and leases 3,412,439 3,127,392 2,975,912
Less: allowance for loan and lease losses (39,661) (37,802) (37,574)
Net loans and leases 3,372,778 3,089,590 2,938,338
Premises and equipment, net 52,573 49,402 45,841
Other real estate owned 2,619 3,195 1,762
Accrued interest receivable 13,102 12,634 12,277
Goodwill 84,171 84,171 84,171
Other intangible assets, net 190 510 622
Other assets 116,343 117,282 116,236
Total assets $ 4,611,034 $ 4,397,132 $ 4,248,731
Liabilities
Noninterest-bearing deposits $1,068,299 $ 993,737 $ 986,549
Interest-bearing deposits 2,207,369 2,072,772 2,042,239
Total deposits 3,275,668 3,066,509 3,028,788
Securities sold under retail repurchase agreements and federal funds purchased 121,378 74,432 71,384
Advances from FHLB 610,000 655,000 558,000
Subordinated debentures 35,000 35,000 35,000
Accrued interest payable and other liabilities 45,394 44,440 33,155
Total liabilities 4,087,440 3,875,381 3,726,327
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,424,944, 25,044,877 and 25,076,794 at September 30, 2015, December 31, 2014 and September 30, 2014, respectively 24,425 25,045 25,077
Additional paid in capital 178,429 194,647 194,899
Retained earnings 318,939 302,882 298,796
Accumulated other comprehensive income (loss) 1,801 (823) 3,632
Total stockholders' equity 523,594 521,751 522,404
Total liabilities and stockholders' equity $ 4,611,034 $ 4,397,132 $ 4,248,731

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 share data) 2015 2014 2015 2014
Interest Income:
Interest and fees on loans and leases $ 34,484 $ 31,030 $ 99,654 $ 91,470
Interest on loans held for sale 214 81 422 211
Interest on deposits with banks 25 24 69 66
Interest and dividends on investment securities:
Taxable 3,597 3,712 11,024 11,704
Exempt from federal income taxes 1,996 2,303 6,068 6,940
Interest on federal funds sold 1 - 1 -
Total interest income 40,317 37,150 117,238 110,391
Interest Expense:
Interest on deposits 1,632 1,208 4,193 3,585
Interest on retail repurchase agreements and federal funds purchased 69 42 179 117
Interest on advances from FHLB 3,272 3,258 9,774 9,709
Interest on subordinated debt 228 222 670 659
Total interest expense 5,201 4,730 14,816 14,070
Net interest income 35,116 32,420 102,422 96,321
Provision (credit) for loan and lease losses 1,706 (192) 3,521 (1,016)
Net interest income after provision (credit) for loan and lease losses 33,410 32,612 98,901 97,337
Non-interest Income:
Investment securities gains 1 8 20 8
Service charges on deposit accounts 1,936 2,226 5,657 6,287
Mortgage banking activities 566 596 2,566 1,482
Wealth management income 4,963 4,974 15,040 14,181
Insurance agency commissions 1,648 1,410 4,147 4,011
Income from bank owned life insurance 618 611 1,937 1,817
Bank card fees 1,198 1,148 3,475 3,295
Other income 1,460 1,617 4,816 4,452
Total non-interest income 12,390 12,590 37,658 35,533
Non-interest Expenses:
Salaries and employee benefits 17,733 16,765 52,566 49,594
Occupancy expense of premises 3,086 3,032 9,748 9,778
Equipment expenses 1,600 1,337 4,463 3,855
Marketing 688 744 2,161 2,088
Outside data services 1,329 1,231 3,692 3,663
FDIC insurance 565 594 1,850 1,687
Amortization of intangible assets 107 115 320 709
Litigation expenses 155 236 517 6,364
Other expenses 4,367 4,578 13,034 12,584
Total non-interest expenses 29,630 28,632 88,351 90,322
Income before income taxes 16,170 16,570 48,208 42,548
Income tax expense 5,175 5,428 15,655 13,496
Net income $ 10,995 $ 11,142 $ 32,553 $ 29,052
Net Income Per Share Amounts:
Basic net income per share $ 0.45 $ 0.44 $ 1.32 $ 1.16
Diluted net income per share $ 0.45 $ 0.44 $ 1.31 $ 1.16
Dividends declared per share $ 0.22 $ 0.20 $ 0.66 $ 0.56

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2015 2014
(Dollars in thousands, except per share data) Q3Q2Q1 Q4Q3Q2Q1
Profitability for the Quarter:
Tax-equivalent interest income $ 41,980 $40,438 $ 39,343 $ 39,258 $ 38,446 $ 38,322 $ 37,532
Interest expense 5,201 4,916 4,699 4,748 4,730 4,682 4,658
Tax-equivalent net interest income 36,779 35,522 34,644 34,510 33,716 33,640 32,874
Tax-equivalent adjustment 1,663 1,589 1,271 1,283 1,296 1,331 1,282
Provision for loan and lease losses 1,706 1,218 597 853 (192) 158 (982)
Non-interest income 12,390 12,109 13,159 11,338 12,590 11,694 11,249
Non-interest expenses 29,630 29,477 29,244 30,478 28,632 34,141 27,549
Income before income taxes 16,170 15,347 16,691 13,234 16,570 9,704 16,274
Income tax expense 5,175 5,014 5,466 4,086 5,428 2,722 5,346
Net income $ 10,995 $ 10,333 $ 11,225 $ 9,148 $ 11,142 $ 6,982 $ 10,928
Financial Performance:
Pre-tax pre-provision income $ 18,031 $ 16,727 $ 17,488 $ 14,242 $ 16,614 $ 15,990 $ 15,292
Return on average assets 0.96% 0.93% 1.04% 0.85% 1.05% 0.67% 1.08%
Return on average common equity 8.41% 8.02% 8.73% 6.93% 8.54% 5.47% 8.80%
Net interest margin 3.43% 3.42% 3.44% 3.44% 3.42% 3.48% 3.47%
Efficiency ratio - GAAP basis (1) 62.37% 64.02% 62.85% 68.39% 63.61% 77.59% 64.31%
Efficiency ratio - Non-GAAP basis (1) 59.73% 61.35% 60.53% 65.89% 61.09% 61.30% 61.60%
Per Share Data:
Basic net income per share $ 0.45 $0.42 $ 0.45 $ 0.37 $ 0.44 $ 0.28 $ 0.44
Diluted net income per share $ 0.45 $0.42 $ 0.45 $ 0.36 $ 0.44 $ 0.28 $ 0.43
Average fully diluted shares 24,602,817 24,689,762 25,048,576 25,151,831 25,151,582 25,127,036 25,124,206
Dividends declared per common share $ 0.22 $0.22 $ 0.22 $ 0.20 $ 0.20 $ 0.18 $ 0.18
Non-interest Income:
Securities gains (losses) $ 1 $19 $ - $ (3)$ 8 $ - $ -
Service charges on deposit accounts 1,936 1,839 1,882 2,135 2,226 2,089 1,972
Mortgage banking activities 566 822 1,178 512 596 570 316
Wealth management income 4,963 5,161 4,916 4,905 4,974 4,741 4,466
Insurance agency commissions 1,648 881 1,618 985 1,410 961 1,640
Income from bank owned life insurance 618 606 713 627 611 608 598
Bank card fees 1,198 1,220 1,057 1,144 1,148 1,169 978
Other income 1,460 1,561 1,795 1,033 1,617 1,556 1,279
Total Non-interest Income $ 12,390 $12,109 $ 13,159 $ 11,338 $ 12,590 $ 11,694 $ 11,249
Non-interest Expense:
Salaries and employee benefits $ 17,733 $17,534 $ 17,299 $ 16,793 $ 16,765 $ 16,474 $ 16,355
Occupancy expense of premises 3,086 3,173 3,489 3,914 3,032 3,274 3,472
Equipment expenses 1,600 1,490 1,373 1,333 1,337 1,262 1,256
Marketing 688 942 531 838 744 802 542
Outside data services 1,329 1,102 1,261 1,284 1,231 1,216 1,216
FDIC insurance 565 654 631 615 594 573 520
Amortization of intangible assets 107 106 107 112 115 224 370
Litigation expenses 155 162 200 155 236 6,128 -
Professional fees 1,089 1,199 1,209 1,246 1,092 1,292 914
Other real estate owned expenses 48 4 10 2 40 9 -
Other expenses 3,230 3,111 3,134 4,186 3,446 2,887 2,904
Total Non-interest Expense $ 29,630 $29,477 $ 29,244 $ 30,478 $ 28,632 $ 34,141 $ 27,549
(1) The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional, efficiency ratio - non-GAAP basis excludes intangible asset amortization from non-interest expense; excludes securities gains; OTTI losses from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2015 2014
(Dollars in thousands) Q3Q2Q1 Q4Q3Q2Q1
Balance Sheets at Quarter End:
Residential mortgage loans $ 773,889 $ 744,195 $ 728,858 $ 717,886 $ 698,925 $ 668,536 $ 640,939
Residential construction loans 139,492 137,134 130,321 136,741 141,883 149,321 143,109
Commercial ADC loans 239,160 223,103 203,731 205,124 194,666 178,972 163,343
Commercial investor real estate loans 710,694 694,179 668,931 640,193 575,984 577,813 573,634
Commercial owner occupied real estate loans 680,601 643,973 618,846 611,061 584,964 581,795 582,472
Commercial business loans 423,855 409,795 385,452 390,781 368,611 357,472 348,180
Leasing 19 21 36 54 156 260 439
Consumer loans 444,729 436,465 428,531 425,552 410,723 396,775 380,697
Total loans and leases 3,412,439 3,288,865 3,164,706 3,127,392 2,975,912 2,910,944 2,832,813
Allowance for loan and lease losses (39,661) (38,713) (37,475) (37,802) (37,574) (37,959) (38,026)
Loans held for sale 10,418 19,445 13,899 10,512 6,656 9,042 3,079
Investment securities 862,409 878,284 912,565 933,619 950,869 980,530 997,584
Interest-earning assets 4,339,375 4,222,667 4,125,549 4,114,936 3,976,731 3,945,643 3,891,223
Total assets 4,611,034 4,507,367 4,401,380 4,397,132 4,248,731 4,234,342 4,168,998
Noninterest-bearing demand deposits 1,068,299 1,092,413 1,017,566 993,737 986,549 984,700 882,169
Total deposits 3,275,668 3,247,346 3,109,892 3,066,509 3,028,788 3,038,670 2,959,195
Customer repurchase agreements 121,378 111,817 101,640 74,432 71,384 72,917 67,038
Total interest-bearing liabilities 2,973,747 2,851,750 2,818,966 2,837,204 2,706,623 2,698,887 2,748,064
Total stockholders' equity 523,594 518,873 521,768 521,751 522,404 517,269 510,386
Quarterly Average Balance Sheets:
Residential mortgage loans $ 754,007 $ 734,382 $ 724,248 $ 707,719 $ 682,013 $ 652,232 $ 627,944
Residential construction loans 134,448 137,216 132,456 141,890 147,750 145,968 134,261
Commercial ADC loans 227,545 218,341 206,105 201,020 180,293 168,063 162,544
Commercial investor real estate loans 704,068 668,883 645,163 607,050 577,851 575,283 557,168
Commercial owner occupied real estate loans 656,337 624,407 611,722 594,634 585,014 579,953 584,155
Commercial business loans 413,300 398,510 383,111 367,872 367,203 348,597 349,734
Leasing 19 28 44 114 206 352 567
Consumer loans 441,740 434,011 425,434 417,910 404,062 390,076 377,822
Total loans and leases 3,331,464 3,215,778 3,128,283 3,038,209 2,944,392 2,860,524 2,794,195
Loans held for sale 21,070 14,075 7,053 9,952 7,518 6,940 5,216
Investment securities 869,461 898,237 925,683 942,782 965,206 991,135 1,012,701
Interest-earning assets 4,261,939 4,162,963 4,097,648 4,022,051 3,954,858 3,893,843 3,845,513
Total assets 4,537,142 4,438,670 4,372,988 4,292,237 4,220,084 4,157,559 4,105,225
Noninterest-bearing demand deposits 1,063,500 1,023,042 986,688 1,000,285 956,830 899,287 825,968
Total deposits 3,263,993 3,128,562 3,056,186 3,063,591 3,036,686 2,965,329 2,876,641
Customer repurchase agreements 121,127 106,179 90,020 78,746 73,046 68,880 62,864
Total interest-bearing liabilities 2,906,348 2,852,414 2,817,575 2,731,791 2,711,206 2,716,537 2,749,459
Total stockholders' equity 518,619 516,940 521,346 524,063 517,534 511,738 503,851
Financial Measures:
Average equity to average assets 11.43% 11.65% 11.92% 12.21% 12.26% 12.31% 12.27%
Investment securities to earning assets 19.87% 20.80% 22.12% 22.69% 23.91% 24.85% 25.64%
Loans to earning assets 78.64% 77.89% 76.71% 76.00% 74.83% 73.78% 72.80%
Loans to assets 74.01% 72.97% 71.90% 71.12% 70.04% 68.75% 67.95%
Loans to deposits 104.18% 101.28% 101.76% 101.99% 98.25% 95.80% 95.73%
Capital Measures:
Tier 1 leverage (1) 10.65% 10.83% 11.00% 11.26% 11.36% 11.37% 11.43%
Tier 1 capital to risk-weighted assets (1) 13.17% 13.54% 14.01% 13.95% 14.52% 14.48% 14.64%
Total regulatory capital to risk-weighted assets (1) 14.27% 14.65% 15.12% 15.06% 15.68% 15.66% 15.85%
Common equity tier 1 capital to risk-weighted assets (1) 12.20% 12.53% 14.01% n.a. n.a. n.a. n.a.
Book value per share $ 21.44 $ 21.12 $ 21.10 $ 20.83 $ 20.83 $ 20.63 $ 20.38
Outstanding shares 24,424,944 24,562,471 24,733,868 25,044,877 25,076,794 25,069,700 25,043,482
(1) Estimated ratio at September 30, 2015

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
2015 2014
(Dollars in thousands) September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Performing Assets:
Loans and leases 90 days past due:
Commercial business $ - $ - $ - $ - $ - $ 1 $ -
Commercial real estate:
Commercial AD&C - - - - - - -
Commercial investor real estate - - - - - - -
Commercial owner occupied real estate - - - - 649 - -
Leasing 1 2 - - - - -
Consumer - 7 - - 6 3 -
Residential real estate:
Residential mortgage - - - - - - -
Residential construction - - - - - - -
Total loans and leases 90 days past due 1 9 - - 655 4 -
Non-accrual loans and leases:
Commercial business 3,881 3,285 4,166 3,184 4,151 4,309 3,272
Commercial real estate:
Commercial AD&C 194 194 1,363 2,464 3,792 3,739 4,133
Commercial investor real estate 8,609 10,023 10,083 8,156 8,210 6,731 7,284
Commercial owner occupied real estate 7,932 8,423 8,974 8,941 10,742 10,868 7,150
Leasing - - - - - - -
Consumer 1,621 1,214 1,962 1,668 1,830 2,058 2,115
Residential real estate:
Residential mortgage 7,488 7,780 3,235 3,012 4,417 4,501 5,025
Residential construction 770 780 788 1,105 2,497 2,143 2,304
Total non-accrual loans and leases 30,495 31,699 30,571 28,530 35,639 34,349 31,283
Total restructured loans - accruing 6,419 5,620 5,446 5,497 7,382 7,364 7,411
Total non-performing loans and leases 36,915 37,328 36,017 34,027 43,676 41,717 38,694
Other assets and real estate owned (OREO) 2,619 4,514 3,227 3,195 1,762 1,967 1,619
Total non-performing assets $ 39,534 $ 41,842 $ 39,244 $ 37,222 $ 45,438 $ 43,684 $ 40,313
For the quarter ended,
September 30, June 30, March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands) 2015 2015 2015 2014 2014 2014 2014
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period $ 31,699 $ 30,571 $ 28,530 $ 35,639 $ 34,349 $ 31,283 $ 30,574
Non-accrual balances transferred to OREO (180) (1,309) (32) (1,475) (300) (390) (281)
Non-accrual balances charged-off (752) (549) (1,077) (1,033) (216) (357) (513)
Net payments or draws (1,846) (2,970) (1,067) (4,139) (590) (1,580) (1,073)
Loans placed on non-accrual 1,574 5,956 4,217 779 2,396 5,393 2,576
Non-accrual loans brought current - - - (1,241) - - -
Balance at end of period $ 30,495 $ 31,699 $ 30,571 $ 28,530 $ 35,639 $ 34,349 $ 31,283
Analysis of Allowance for Loan Losses:
Balance at beginning of period $ 38,713 $37,475 $ 37,802 $ 37,574 $ 37,959 $ 38,026 $ 38,766
Provision (credit) for loan and lease losses 1,706 1,218 597 853 (192) 158 (982)
Less loans charged-off, net of recoveries:
Commercial business (25) 73 (89) 50 (58) 28 (768)
Commercial real estate:
Commercial AD&C - (547) 706 529 - - -
Commercial investor real estate (5) 85 (5) (5) (2) (23) (5)
Commercial owner occupied real estate 104 (1) 212 (6) - 265 -
Leasing - - - - - - -
Consumer 348 395 43 83 244 11 331
Residential real estate:
Residential mortgage 342 (18) 65 (17) 43 (27) 203
Residential construction (6) (7) (8) (9) (34) (29) (3)
Net charge-offs 758 (20) 924 625 193 225 (242)
Balance at end of period $ 39,661 $ 38,713 $ 37,475 $ 37,802 $ 37,574 $ 37,959 $ 38,026
Asset Quality Ratios:
Non-performing loans to total loans 1.08% 1.13% 1.14% 1.09% 1.47% 1.43% 1.37%
Non-performing assets to total assets 0.86% 0.93% 0.89% 0.85% 1.07% 1.03% 0.97%
Allowance for loan losses to loans 1.16% 1.18% 1.18% 1.21% 1.26% 1.30% 1.34%
Allowance for loan losses to non-performing loans 107.44% 103.71% 104.05% 111.09% 86.03% 90.99% 98.27%
Annualized net charge-offs to average loans 0.09% 0.00% 0.12% 0.08% 0.03% 0.03% (0.04)%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
Three Months Ended September 30,
2015 2014
Annualized Annualized
Average Average Average Average
(Dollars in thousands and tax-equivalent) Balances (1) Interest Yield/Rate Balances (1) Interest Yield/Rate
Assets
Residential mortgage loans $ 754,007 $ 6,346 3.37%$ 682,013 $ 5,813 3.41%
Residential construction loans 134,448 1,240 3.66 147,750 1,376 3.69
Commercial ADC loans 227,545 2,602 4.54 180,293 2,196 4.83
Commercial investor real estate loans 704,068 8,353 4.71 577,851 7,009 4.81
Commercial owner occupied real estate loans 656,337 8,065 4.88 585,014 7,091 4.98
Commercial business loans 413,300 4,600 4.42 367,203 4,177 4.53
Leasing 19 - - 206 4 6.91
Consumer loans 441,740 3,701 3.35 404,062 3,364 3.32
Total loans and leases (2) 3,331,464 34,907 4.16 2,944,392 31,030 4.22
Loans held for sale 21,070 214 4.05 7,518 81 4.30
Taxable securities 581,832 3,742 2.57 663,550 4,071 2.43
Tax-exempt securities (3) 287,629 3,091 4.30 301,656 3,240 4.26
Interest-bearing deposits with banks 39,472 25 0.25 37,268 24 0.25
Federal funds sold 472 1 0.22 474 - 0.22
Total interest-earning assets 4,261,939 41,980 3.92 3,954,858 38,446 3.89
Less: allowance for loan and lease losses (39,090) (38,213)
Cash and due from banks 44,893 45,600
Premises and equipment, net 52,233 45,959
Other assets 217,167 211,880
Total assets $ 4,537,142 $ 4,220,084
Liabilities and Stockholders' Equity
Interest-bearing demand deposits $ 534,568 105 0.08%$ 488,800 112 0.09%
Regular savings deposits 277,819 37 0.05 263,255 34 0.05
Money market savings deposits 882,755 393 0.18 871,271 293 0.13
Time deposits 505,351 1,097 0.86 456,530 769 0.67
Total interest-bearing deposits 2,200,493 1,632 0.29 2,079,856 1,208 0.23
Other borrowings 121,127 69 0.23 73,046 42 0.23
Advances from FHLB 549,728 3,272 2.36 523,304 3,258 2.47
Subordinated debentures 35,000 228 2.60 35,000 222 2.54
Total interest-bearing liabilities 2,906,348 5,201 0.71 2,711,206 4,730 0.69
Noninterest-bearing demand deposits 1,063,500 956,830
Other liabilities 48,675 34,514
Stockholders' equity 518,619 517,534
Total liabilities and stockholders' equity $ 4,537,142 $ 4,220,084
Net interest income and spread $ 36,779 3.21 % $ 33,716 3.20%
Less: tax-equivalent adjustment 1,663 1,296
Net interest income $ 35,116 $ 32,420
Interest income/earning assets 3.92 % 3.89%
Interest expense/earning assets 0.49 0.47
Net interest margin 3.43 % 3.42%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and 2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.7 million and $1.3 million in 2015 and 2014, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
Nine Months Ended September 30,
2015 2014
Annualized Annualized
Average Average Average Average
(Dollars in thousands and tax-equivalent) Balances (1) Interest Yield/Rate Balances (1) Interest Yield/Rate
Assets
Residential mortgage loans $ 737,655 $ 18,625 3.37%$ 654,261 $ 16,874 3.44%
Residential construction loans 134,714 3,729 3.70 142,709 3,988 3.74
Commercial ADC loans 217,409 7,464 4.59 170,365 6,450 5.06
Commercial investor real estate loans 672,920 23,703 4.71 570,176 20,881 4.90
Commercial owner occupied real estate loans 630,985 23,266 4.93 583,044 21,304 5.05
Commercial business loans 398,418 13,107 4.40 355,242 12,268 4.62
Leasing 30 1 2.97 374 16 5.54
Consumer loans 433,788 10,807 3.35 390,749 9,689 3.34
Total loans and leases (2) 3,225,919 100,702 4.17 2,866,920 91,470 4.30
Loans held for sale 14,118 422 3.98 6,567 211 4.28
Taxable securities 605,719 11,464 2.52 687,359 12,786 2.48
Tax-exempt securities (3) 291,868 9,396 4.29 302,148 9,767 4.31
Interest-bearing deposits with banks 36,688 69 0.25 35,004 66 0.25
Federal funds sold 473 1 0.22 474 - 0.22
Total interest-earning assets 4,174,785 122,054 3.91 3,898,472 114,300 3.94
Less: allowance for loan and lease losses (38,256) (38,645)
Cash and due from banks 46,067 45,380
Premises and equipment, net 51,500 45,845
Other assets 216,105 210,325
Total assets $ 4,450,201 $ 4,161,377
Liabilities and Stockholders' Equity
Interest-bearing demand deposits $ 528,683 312 0.08%$ 475,459 306 0.09%
Regular savings deposits 275,433 108 0.05 258,224 131 0.07
Money market savings deposits 849,469 983 0.15 871,399 839 0.13
Time deposits 472,065 2,790 0.79 460,548 2,309 0.67
Total interest-bearing deposits 2,125,650 4,193 0.26 2,065,630 3,585 0.23
Other borrowings 105,945 179 0.23 68,301 117 0.23
Advances from FHLB 592,509 9,774 2.21 556,663 9,709 2.33
Subordinated debentures 35,000 670 2.55 35,000 659 2.51
Total interest-bearing liabilities 2,859,104 14,816 0.69 2,725,594 14,070 0.69
Noninterest-bearing demand deposits 1,024,692 894,508
Other liabilities 47,447 30,184
Stockholders' equity 518,958 511,091
Total liabilities and stockholders' equity $ 4,450,201 $ 4,161,377
Net interest income and spread $ 107,238 3.22 % $ 100,230 3.25%
Less: tax-equivalent adjustment 4,816 3,909
Net interest income $ 102,422 $ 96,321
Interest income/earning assets 3.91 % 3.94%
Interest expense/earning assets 0.48 0.48
Net interest margin 3.43 % 3.46%
(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 $4.8 million and $3.9 million in 2015 and 2014, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.

For additional information or questions, please contact: Daniel J. Schrider, President & Chief Executive Officer, or Philip J. Mantua, E.V.P. & Chief Financial Officer Sandy Spring Bancorp 17801 Georgia Avenue Olney, Maryland 20832 1-800-399-5919 Email: DSchrider@sandyspringbank.com PMantua@sandyspringbank.com

Source:Sandy Spring Bancorp, Inc.