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Sandy Spring Bancorp Reports Net Income of $12.8 Million for the Fourth Quarter and $45.4 Million for the Full Year

OLNEY, Md., Jan. 21, 2016 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net income for the fourth quarter of 2015 of $12.8 million ($0.52 per diluted share) compared to net income of $9.1 million ($0.36 per diluted share) for the fourth quarter of 2014 and net income of $11.0 million ($0.45 per diluted share) for the third quarter of 2015.



Net income for the year ended December 31, 2015, was $45.4 million ($1.84 per diluted share) compared to net income of $38.2 million ($1.52 per diluted share) for the prior year. The fourth quarter of the current year includes the recapture of $4.5 million in previously accrued litigation expenses due to the settlement of all claims that were the subject of an adverse jury verdict rendered in 2014.

“Our continued strong core performance was driven by higher net interest income. Building on the first three quarters of the year, loan growth continued steadily at a double-digit year-over-year rate in a very competitive marketplace,” said Daniel J. Schrider, President and Chief Executive Officer.

“Our stable net interest margin, strong capital position and consistent credit quality are the drivers that provide an ongoing competitive return on our shareholders’ investment,” said Schrider. “We continue to focus on providing our customers with outstanding levels of service across the organization.”

Fourth Quarter Highlights:

  • Total loans increased 12% compared to the fourth quarter of 2014 and were up 2% compared to the third quarter of 2015. All three major portfolio segments experienced strong growth over the prior year. These increases were driven primarily by year-over-year growth of 15% in the commercial loan portfolio.
  • Combined noninterest-bearing and interest-bearing checking account balances increased 3% to $1.6 billion at December 31, 2015 as compared to $1.5 billion at December 31, 2014.
  • The provision for loan and lease losses for the fourth quarter of 2015 was a charge of $1.9 million compared to a charge of $0.9 million for the fourth quarter of 2014 and a charge of $1.7 million for the third quarter of 2015. The provision was driven by our solid loan growth.
  • The net interest margin was 3.45% for the fourth quarter of 2015, compared to 3.44% for the fourth quarter of 2014 and 3.43% for the third quarter of 2015.
  • The non-GAAP efficiency ratio improved to 63.08% for the current quarter from 65.89% for the prior year quarter due primarily to the recapture of $4.5 million of previously accrued litigation expenses. This credit was somewhat offset by a charitable contribution of $1 million to the Sandy Spring Bank Foundation in the quarter.
  • During the fourth quarter of 2015, the Company repurchased 141,518 shares of its common stock at an average price of $26.53 per share as part of its existing share repurchase program. For the year-to-date, the Company repurchased 870,450 shares at an average price of $25.99 per share.

Review of Balance Sheet and Credit Quality

Total assets grew 6% to $4.7 billion at December 31, 2015 compared to $4.4 billion at December 31, 2014. This growth was driven by a 12% increase in the loan portfolio as total loans and leases ended the period at $3.5 billion.

At December 31, 2015, combined noninterest-bearing and interest-bearing checking account balances, a primary driver of multiple-product banking relationships with clients, increased 3% compared to balances at December 31, 2014. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers increased 7% compared to December 31, 2014.

Tangible common equity totaled $441 million at December 31, 2015 compared to $438 million at December 31, 2014. The ratio of tangible common equity to tangible assets decreased to 9.66% at December 31, 2015 from 10.15% at December 31, 2014 due primarily to the growth in assets and continued share repurchases. Dividends per common share increased to $0.24 per share in the fourth quarter and totaled $0.90 per common share for the year compared to $0.76 per common share for 2014, an 18% increase. At December 31, 2015, the Company had a total risk-based capital ratio of 14.25%, a common equity tier 1 risk-based capital ratio of 12.17%, a tier 1 risk-based capital ratio of 13.13% and a tier 1 leverage ratio of 10.60%.

Non-performing loans totaled $34.5 million at December 31, 2015 compared to $34.0 million at December 31, 2014 and $36.9 million at September 30, 2015. The level of non-performing loans to total loans decreased to 0.99% at December 31, 2015 compared to 1.09% at December 31, 2014 due to growth in the overall loan portfolio.

Loan charge-offs, net of recoveries, totaled $0.6 million for the fourth quarter of 2015, compared to net loan charge-offs of $0.6 million for the fourth quarter of 2014. The allowance for loan and lease losses represented 1.17% of outstanding loans and leases and 119% of non-performing loans at December 31, 2015 compared to 1.21% of outstanding loans and leases and 111% of non-performing loans at December 31, 2014. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the fourth quarter of 2015 increased 8% compared to the fourth quarter of 2014. The net interest margin was 3.45% for the fourth quarter of 2015 compared to 3.44% for the fourth quarter of 2014. This increase was driven by loan growth together with stable funding sources.

The provision for loan and lease losses was a charge of $1.9 million for the fourth quarter of 2015 compared to a charge of $0.9 million for the fourth quarter of 2014 and a charge of $1.7 million for the third quarter of 2015. The majority of the current quarter’s charge reflects the growth in the loan portfolio.

Non-interest income increased 8% to $12.2 million for the fourth quarter of 2015 compared to $11.3 million for the fourth quarter of 2014. The increase in non-interest income for the quarter compared to the prior year quarter was due primarily to an increase in other non-interest income due to an increase in loan prepayment fees and a full payoff received on a loan previously acquired at a significant discount.

Non-interest expenses decreased to $27.0 million for the fourth quarter of 2015 compared to $30.5 million in the fourth quarter of 2014. The current quarter included a $4.5 million recapture of litigation expenses previously accrued in prior periods. As previously noted, the quarter also included a charitable contribution of $1 million to the Sandy Spring Bank Foundation. Excluding these transactions, total non-interest expenses remained virtually level compared to 2014 as increases in salaries and benefits were offset by declines in occupancy expenses and EFT losses. The non-GAAP efficiency ratio was 63.08% for the fourth quarter of 2015 compared to 65.89% for the fourth quarter of 2014.

Net interest income for the year ended December 31, 2015 increased 7% compared to 2014 due primarily to an increase in average loans. The net interest margin was 3.44% for 2015 compared to 3.45% for 2014. As mentioned above, this increase was due primarily to a combination of loan growth and stable funding sources.

The provision for loan and lease losses was a charge of $5.4 million for the year ended December 31, 2015 compared to a credit of $0.2 million for 2014. The change in the provision for the current year is primarily due to the growth in the loan portfolio over the prior year.

Non-interest income increased 6% to $49.9 million for 2015 compared to $46.9 million for 2014. This increase was driven by increases in income from wealth management due to growth in assets under management and income from mortgage banking due primarily to higher mortgage origination volumes. Other non-interest income also increased due to higher gains on sales of SBA loans and an increase in loan prepayment fees.

Non-interest expenses decreased 5% to $115.3 million for 2015 compared to $120.8 million for 2014. Excluding the accrued litigation expenses in 2014 and the subsequent recapture in 2015 together with the charitable contribution mentioned above, non-interest expenses increased 3% over the prior year. The current year also included increases in salaries, pension costs and health benefits and other non-interest expenses. The non-GAAP efficiency ratio was 61.09% for 2015 compared to 62.48% for 2014.

Conference Call

The Company’s management will host a conference call to discuss its fourth quarter results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations’ section of the Sandy Spring Web site at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available at the Web site until 9:00 am (ET) February 5, 2016. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10078286.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring Bank offers a broad range of commercial banking, retail banking, mortgage and trust services throughout central Maryland, Northern Virginia, and the greater Washington, D.C. market. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. With $4.7 billion in assets, the bank operates 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 Twelve Months Ended
December 31, % December 31, %
(Dollars in thousands, except per share data) 2015 2014 Change 2015 2014 Change
Results of Operations:
Net interest income $ 35,777 $ 33,227 8 % $ 138,199 $ 129,548 7 %
Provision (credit) for loan and lease losses 1,850 853 117 5,371 (163) n.m
Non-interest income 12,243 11,338 8 49,901 46,871 6
Non-interest expenses 26,996 30,478 (11) 115,347 120,800 (5)
Income before income taxes 19,174 13,234 45 67,382 55,782 21
Net income 12,802 9,148 40 45,355 38,200 19
Pre-tax pre-provision income $ 16,638 $ 14,242 17 $ 68,884 $ 62,138 11
Return on average assets 1.11 % 0.85% 1.01 % 0.91%
Return on average common equity 9.73 % 6.93% 8.73 % 7.43%
Net interest margin 3.45 % 3.44% 3.44 % 3.45%
Efficiency ratio - GAAP basis (1) 56.22 % 68.39% 61.32 % 68.47%
Efficiency ratio - Non-GAAP basis (1) 63.08 % 65.89% 61.09 % 62.48%
Per share data:
Basic net income $ 0.53 $ 0.37 43 % $ 1.84 $ 1.53 20 %
Diluted net income $ 0.52 $ 0.36 44 $ 1.84 $ 1.52 21
Average fully diluted shares 24,455,847 25,151,831 (3) 24,697,908 25,139,370 (2)
Dividends declared per share $ 0.24 $ 0.20 20 $ 0.90 $ 0.76 18
Book value per share 21.58 20.83 4 21.58 20.83 4
Tangible book value per share 18.17 17.48 4 18.17 17.48 4
Outstanding shares 24,295,971 25,044,877 (3) 24,295,971 25,044,877 (3)
Financial Condition at period-end:
Investment securities $ 841,650 $ 933,619 (10)% $ 841,650 $ 933,619 (10)%
Loans and leases 3,495,370 3,127,392 12 3,495,370 3,127,392 12
Interest-earning assets 4,378,403 4,114,936 6 4,378,403 4,114,936 6
Assets 4,655,380 4,397,132 6 4,655,380 4,397,132 6
Deposits 3,263,730 3,066,509 6 3,263,730 3,066,509 6
Interest-bearing liabilities 3,091,034 2,837,204 9 3,091,034 2,837,204 9
Stockholders' equity 524,427 521,751 1 524,427 521,751 1
Capital ratios:
Tier 1 leverage (4) 10.60 % 11.26% 10.60 % 11.26%
Tier 1 capital to risk-weighted assets (4) 13.13 % 13.95% 13.13 % 13.95%
Total regulatory capital to risk-weighted assets (4) 14.25 % 15.06% 14.25 % 15.06%
Common equity tier 1 capital to risk-weighted assets (4) 12.17 %n.a.% 12.17 % n.a. %
Tangible common equity to tangible assets (2) 9.66 % 10.15% 9.66 % 10.15%
Average equity to average assets 11.36 % 12.21% 11.58 % 12.26%
Credit quality ratios:
Allowance for loan and lease losses to loans and leases 1.17 % 1.21% 1.17 % 1.21%
Non-performing loans to total loans 0.99 % 1.09% 0.99 % 1.09%
Non-performing assets to total assets 0.80 % 0.85% 0.80 % 0.85%
Allowance for loan and lease losses to non-performing loans 118.54 % 111.09% 118.54 % 111.09%
Annualized net charge-offs to average loans and leases (3) 0.07 % 0.08% 0.07 % 0.03%
(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 December 31, 2015

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
Three Months Ended Twelve Months Ended
December 31, December 31,
(Dollars in thousands) 2015 2014 2015 2014
Pre-tax pre-provision income:
Net income $ 12,802 $9,148 $ 45,355 $38,200
Plus non-GAAP adjustment:
Litigation expenses (4,386) 155 (3,869) 6,519
Income taxes 6,372 4,086 22,027 17,582
Provision (credit) for loan and lease losses 1,850 853 5,371 (163)
Pre-tax pre-provision income $ 16,638 $14,242 $ 68,884 $62,138
Efficiency ratio - GAAP basis:
Non-interest expenses $ 26,996 $30,478 $ 115,347 $120,800
Net interest income plus non-interest income $ 48,020 $44,565 $ 188,100 $176,419
Efficiency ratio - GAAP basis 56.22% 68.39% 61.32% 68.47%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses $ 26,996 $30,478 $ 115,347 $120,800
Less non-GAAP adjustment:
Amortization of intangible assets 52 112 372 821
Litigation expenses (4,386) 155 (3,869) 6,519
Non-interest expenses - as adjusted $ 31,330 $30,211 $ 118,844 $113,460
Net interest income plus non-interest income $ 48,020 $44,565 $ 188,100 $176,419
Plus non-GAAP adjustment:
Tax-equivalent income 1,662 1,283 6,478 5,192
Less non-GAAP adjustments:
Securities gains (losses) 16 (3) 36 5
Net interest income plus non-interest income - as adjusted $ 49,666 $45,851 $ 194,542 $181,606
Efficiency ratio - Non-GAAP basis 63.08% 65.89% 61.09% 62.48%
Tangible common equity ratio:
Total stockholders' equity $ 524,427 $521,751 $ 524,427 $521,751
Accumulated other comprehensive income (loss) 1,297 823 1,297 823
Goodwill (84,171) (84,171) (84,171) (84,171)
Other intangible assets, net (138) (510) (138) (510)
Tangible common equity $ 441,415 $437,893 $ 441,415 $437,893
Total assets $ 4,655,380 $4,397,132 $ 4,655,380 $4,397,132
Goodwill (84,171) (84,171) (84,171) (84,171)
Other intangible assets, net (138) (510) (138) (510)
Tangible assets $ 4,571,071 $4,312,451 $ 4,571,071 $4,312,451
Tangible common equity ratio 9.66% 10.15% 9.66% 10.15%
Outstanding common shares 24,295,971 25,044,877 24,295,971 25,044,877
Tangible book value per common share $ 18.17 $17.48 $ 18.17 $17.48

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
December 31,
December 31,
(Dollars in thousands) 2015 2014
Assets
Cash and due from banks $ 46,956 $ 52,804
Federal funds sold 472 473
Interest-bearing deposits with banks 25,454 42,940
Cash and cash equivalents 72,882 96,217
Residential mortgage loans held for sale (at fair value) 15,457 10,512
Investments available-for-sale (at fair value) 592,049 672,209
Investments held-to-maturity -- fair value of $211,704 and $222,260 at December 31, 2015 and 2014, respectively 208,265 219,973
Other equity securities 41,336 41,437
Total loans and leases 3,495,370 3,127,392
Less: allowance for loan and lease losses (40,895) (37,802)
Net loans and leases 3,454,475 3,089,590
Premises and equipment, net 53,214 49,402
Other real estate owned 2,742 3,195
Accrued interest receivable 13,443 12,634
Goodwill 84,171 84,171
Other intangible assets, net 138 510
Other assets 117,208 117,282
Total assets $ 4,655,380 $ 4,397,132
Liabilities
Noninterest-bearing deposits $ 1,001,841 $ 993,737
Interest-bearing deposits 2,261,889 2,072,772
Total deposits 3,263,730 3,066,509
Securities sold under retail repurchase agreements and federal funds purchased 109,145 74,432
Advances from FHLB 685,000 655,000
Subordinated debentures 35,000 35,000
Accrued interest payable and other liabilities 38,078 44,440
Total liabilities 4,130,953 3,875,381
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,295,971 and
25,044,877 at December 31, 2015 and, 2014, respectively 24,296 25,045
Additional paid in capital 175,588 194,647
Retained earnings 325,840 302,882
Accumulated other comprehensive loss (1,297) (823)
Total stockholders' equity 524,427 521,751
Total liabilities and stockholders' equity $ 4,655,380 $ 4,397,132

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three Months Ended Twelve Months Ended
December 31,December 31,
(Dollars in thousands, except per share data) 2015 2014 2015 2014
Interest Income:
Interest and fees on loans and leases $ 35,516 $ 31,899 $ 135,170 $ 123,369
Interest on loans held for sale 122 101 544 312
Interest on deposits with banks 29 19 98 85
Interest and dividends on investment securities:
Taxable 3,416 3,673 14,440 15,377
Exempt from federal income taxes 1,991 2,282 8,059 9,222
Interest on federal funds sold 0 1 1 1
Total interest income 41,074 37,975 158,312 148,366
Interest Expense:
Interest on deposits 1,685 1,206 5,878 4,791
Interest on retail repurchase agreements and federal funds purchased 76 47 255 164
Interest on advances from FHLB 3,307 3,273 13,081 12,982
Interest on subordinated debt 229 222 899 881
Total interest expense 5,297 4,748 20,113 18,818
Net interest income 35,777 33,227 138,199 129,548
Provision (credit) for loan and lease losses 1,850 853 5,371 (163)
Net interest income after provision (credit) for loan and lease losses 33,927 32,374 132,828 129,711
Non-interest Income:
Investment securities gains (losses) 16 (3) 36 5
Service charges on deposit accounts 1,950 2,135 7,607 8,422
Mortgage banking activities 548 512 3,114 1,994
Wealth management income 4,891 4,905 19,931 19,086
Insurance agency commissions 1,029 985 5,176 4,996
Income from bank owned life insurance 634 627 2,571 2,444
Bank card fees 1,177 1,144 4,652 4,439
Other income 1,998 1,033 6,814 5,485
Total non-interest income 12,243 11,338 49,901 46,871
Non-interest Expenses:
Salaries and employee benefits 18,437 16,793 71,003 66,387
Occupancy expense of premises 3,061 3,914 12,809 13,692
Equipment expenses 1,608 1,333 6,071 5,188
Marketing 735 838 2,896 2,926
Outside data services 1,331 1,284 5,023 4,947
FDIC insurance 641 615 2,491 2,302
Amortization of intangible assets 52 112 372 821
Litigation expenses (4,386) 155 (3,869) 6,519
Other expenses 5,517 5,434 18,551 18,018
Total non-interest expenses 26,996 30,478 115,347 120,800
Income before income taxes 19,174 13,234 67,382 55,782
Income tax expense 6,372 4,086 22,027 17,582
Net income $ 12,802 $ 9,148 $ 45,355 $ 38,200
Net Income Per Share Amounts:
Basic net income per share $ 0.53 $ 0.37 $ 1.84 $ 1.53
Diluted net income per share $ 0.52 $ 0.36 $ 1.84 $ 1.52
Dividends declared per share $ 0.24 $ 0.20 $ 0.90 $ 0.76

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2015 2014
(Dollars in thousands, except per share data) Q4Q3Q2Q1 Q4Q3Q2Q1
Profitability for the Quarter:
Tax-equivalent interest income $ 42,736 $ 41,980 $ 40,438 $ 39,343 $ 39,258 $ 38,446 $ 38,322 $ 37,532
Interest expense 5,297 5,201 4,916 4,699 4,748 4,730 4,682 4,658
Tax-equivalent net interest income 37,439 36,779 35,522 34,644 34,510 33,716 33,640 32,874
Tax-equivalent adjustment 1,662 1,663 1,589 1,271 1,283 1,296 1,331 1,282
Provision for loan and lease losses 1,850 1,706 1,218 597 853 (192) 158 (982)
Non-interest income 12,243 12,390 12,109 13,159 11,338 12,590 11,694 11,249
Non-interest expenses 26,996 29,630 29,477 29,244 30,478 28,632 34,141 27,549
Income before income taxes 19,174 16,170 15,347 16,691 13,234 16,570 9,704 16,274
Income tax expense 6,372 5,175 5,014 5,466 4,086 5,428 2,722 5,346
Net income $ 12,802 $ 10,995 $ 10,333 $ 11,225 $ 9,148 $ 11,142 $ 6,982 $ 10,928
Financial Performance:
Pre-tax pre-provision income $ 16,638 $ 18,031 $ 16,727 $ 17,488 $ 14,242 $ 16,614 $ 15,990 $ 15,292
Return on average assets 1.11% 0.96% 0.93% 1.04% 0.85% 1.05% 0.67% 1.08%
Return on average common equity 9.73% 8.41% 8.02% 8.73% 6.93% 8.54% 5.47% 8.80%
Net interest margin 3.45% 3.43% 3.42% 3.44% 3.44% 3.42% 3.48% 3.47%
Efficiency ratio - GAAP basis (1) 56.22% 62.37% 64.02% 62.85% 68.39% 63.61% 77.59% 64.31%
Efficiency ratio - Non-GAAP basis (1) 63.08% 59.73% 61.35% 60.53% 65.89% 61.09% 61.30% 61.60%
Per Share Data:
Basic net income per share $ 0.53 $0.45 $0.42 $ 0.45 $ 0.37 $ 0.44 $ 0.28 $ 0.44
Diluted net income per share $ 0.52 $0.45 $0.42 $ 0.45 $ 0.36 $ 0.44 $ 0.28 $ 0.43
Average fully diluted shares 24,455,847 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 $ 0.24 $ 0.22 $ 0.22 $ 0.22 $ 0.20 $ 0.20 $ 0.18 $ 0.18
Non-interest Income:
Securities gains (losses) $ 16 $ 1 $ 19 $ - $ (3)$ 8 $ - $ -
Service charges on deposit accounts 1,950 1,936 1,839 1,882 2,135 2,226 2,089 1,972
Mortgage banking activities 548 566 822 1,178 512 596 570 316
Wealth management income 4,891 4,963 5,161 4,916 4,905 4,974 4,741 4,466
Insurance agency commissions 1,029 1,648 881 1,618 985 1,410 961 1,640
Income from bank owned life insurance 634 618 606 713 627 611 608 598
Bank card fees 1,177 1,198 1,220 1,057 1,144 1,148 1,169 978
Other income 1,998 1,460 1,561 1,795 1,033 1,617 1,556 1,279
Total Non-interest Income $ 12,243 $ 12,390 $ 12,109 $ 13,159 $ 11,338 $ 12,590 $ 11,694 $ 11,249
Non-interest Expense:
Salaries and employee benefits $ 18,437 $ 17,733 $ 17,534 $ 17,299 $ 16,793 $ 16,765 $ 16,474 $ 16,355
Occupancy expense of premises 3,061 3,086 3,173 3,489 3,914 3,032 3,274 3,472
Equipment expenses 1,608 1,600 1,490 1,373 1,333 1,337 1,262 1,256
Marketing 735 688 942 531 838 744 802 542
Outside data services 1,331 1,329 1,102 1,261 1,284 1,231 1,216 1,216
FDIC insurance 641 565 654 631 615 594 573 520
Amortization of intangible assets 52 107 106 107 112 115 224 370
Litigation expenses (4,386) 155 162 200 155 236 6,128 -
Professional fees 1,322 1,089 1,199 1,209 1,246 1,092 1,292 914
Other real estate owned expenses 14 48 4 10 2 40 9 -
Other expenses 4,181 3,230 3,111 3,134 4,186 3,446 2,887 2,904
Total Non-interest Expense $ 26,996 $ 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) Q4Q3Q2Q1 Q4Q3Q2Q1
Balance Sheets at Quarter End:
Residential mortgage loans $ 796,358 $ 773,889 $ 744,195 $ 728,858 $ 717,886 $ 698,925 $ 668,536 $ 640,939
Residential construction loans 129,281 139,492 137,134 130,321 136,741 141,883 149,321 143,109
Commercial ADC loans 255,980 239,160 223,103 203,731 205,124 194,666 178,972 163,343
Commercial investor real estate loans 719,084 710,694 694,179 668,931 640,193 575,984 577,813 573,634
Commercial owner occupied real estate loans 678,027 680,601 643,973 618,846 611,061 584,964 581,795 582,472
Commercial business loans 465,765 423,855 409,795 385,452 390,781 368,611 357,472 348,180
Leasing - 19 21 36 54 156 260 439
Consumer loans 450,875 444,729 436,465 428,531 425,552 410,723 396,775 380,697
Total loans and leases 3,495,370 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 (40,895) (39,661) (38,713) (37,475) (37,802) (37,574) (37,959) (38,026)
Loans held for sale 15,457 10,418 19,445 13,899 10,512 6,656 9,042 3,079
Investment securities 841,650 862,409 878,284 912,565 933,619 950,869 980,530 997,584
Interest-earning assets 4,378,403 4,339,375 4,222,667 4,125,549 4,114,936 3,976,731 3,945,643 3,891,223
Total assets 4,655,380 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 1,001,841 1,068,299 1,092,413 1,017,566 993,737 986,549 984,700 882,169
Total deposits 3,263,730 3,275,668 3,247,346 3,109,892 3,066,509 3,028,788 3,038,670 2,959,195
Customer repurchase agreements 109,145 121,378 111,817 101,640 74,432 71,384 72,917 67,038
Total interest-bearing liabilities 3,091,034 2,973,747 2,851,750 2,818,966 2,837,204 2,706,623 2,698,887 2,748,064
Total stockholders' equity 524,427 523,594 518,873 521,768 521,751 522,404 517,269 510,386
Quarterly Average Balance Sheets:
Residential mortgage loans $ 781,015 $ 754,007 $ 734,382 $ 724,248 $ 707,719 $ 682,013 $ 652,232 $ 627,944
Residential construction loans 133,812 134,448 137,216 132,456 141,890 147,750 145,968 134,261
Commercial ADC loans 247,612 227,545 218,341 206,105 201,020 180,293 168,063 162,544
Commercial investor real estate loans 717,742 704,068 668,883 645,163 607,050 577,851 575,283 557,168
Commercial owner occupied real estate loans 673,883 656,337 624,407 611,722 594,634 585,014 579,953 584,155
Commercial business loans 424,510 413,300 398,510 383,111 367,872 367,203 348,597 349,734
Leasing 17 19 28 44 114 206 352 567
Consumer loans 448,439 441,740 434,011 425,434 417,910 404,062 390,076 377,822
Total loans and leases 3,427,030 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 11,951 21,070 14,075 7,053 9,952 7,518 6,940 5,216
Investment securities 840,276 869,461 898,237 925,683 942,782 965,206 991,135 1,012,701
Interest-earning assets 4,320,674 4,261,939 4,162,963 4,097,648 4,022,051 3,954,858 3,893,843 3,845,513
Total assets 4,594,025 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 1,058,215 1,063,500 1,023,042 986,688 1,000,285 956,830 899,287 825,968
Total deposits 3,285,299 3,263,993 3,128,562 3,056,186 3,063,591 3,036,686 2,965,329 2,876,641
Customer repurchase agreements 125,275 121,127 106,179 90,020 78,746 73,046 68,880 62,864
Total interest-bearing liabilities 2,968,555 2,906,348 2,852,414 2,817,575 2,731,791 2,711,206 2,716,537 2,749,459
Total stockholders' equity 521,786 518,619 516,940 521,346 524,063 517,534 511,738 503,851
Financial Measures:
Average equity to average assets 11.36% 11.43% 11.65% 11.92% 12.21% 12.26% 12.31% 12.27%
Investment securities to earning assets 19.22% 19.87% 20.80% 22.12% 22.69% 23.91% 24.85% 25.64%
Loans to earning assets 79.83% 78.64% 77.89% 76.71% 76.00% 74.83% 73.78% 72.80%
Loans to assets 75.08% 74.01% 72.97% 71.90% 71.12% 70.04% 68.75% 67.95%
Loans to deposits 107.10% 104.18% 101.28% 101.76% 101.99% 98.25% 95.80% 95.73%
Capital Measures:
Tier 1 leverage (1) 10.60% 10.65% 10.83% 11.00% 11.26% 11.36% 11.37% 11.43%
Tier 1 capital to risk-weighted assets (1) 13.13% 13.17% 13.54% 14.01% 13.95% 14.52% 14.48% 14.64%
Total regulatory capital to risk-weighted assets (1) 14.25% 14.27% 14.65% 15.12% 15.06% 15.68% 15.66% 15.85%
Common equity tier 1 capital to risk-weighted assets (1) 12.17% 12.20% 12.53% 14.01% n.a.n.a.n.a.n.a.
Book value per share $ 21.58 $ 21.44 $ 21.12 $ 21.10 $ 20.83 $ 20.83 $ 20.63 $ 20.38
Outstanding shares 24,295,971 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 December 31, 2015

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
2015
2014
(Dollars in thousands) December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-Performing Assets:
Loans and leases 90 days past due:
Commercial business $- $- $- $- $- $- $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 3,696 3,881 3,285 4,166 3,184 4,151 4,309 3,272
Commercial real estate:
Commercial AD&C 194 194 194 1,363 2,464 3,792 3,739 4,133
Commercial investor real estate 8,368 8,609 10,023 10,083 8,156 8,210 6,731 7,284
Commercial owner occupied real estate 6,340 7,932 8,423 8,974 8,941 10,742 10,868 7,150
Leasing - - - - - - - -
Consumer 2,193 1,621 1,214 1,962 1,668 1,830 2,058 2,115
Residential real estate:
Residential mortgage 8,822 7,488 7,780 3,235 3,012 4,417 4,501 5,025
Residential construction 418 770 780 788 1,105 2,497 2,143 2,304
Total non-accrual loans and leases 30,031 30,495 31,699 30,571 28,530 35,639 34,349 31,283
Total restructured loans - accruing 4,467 6,419 5,620 5,446 5,497 7,382 7,364 7,411
Total non-performing loans and leases 34,498 36,915 37,328 36,017 34,027 43,676 41,717 38,694
Other assets and real estate owned (OREO) 2,742 2,619 4,514 3,227 3,195 1,762 1,967 1,619
Total non-performing assets $ 37,240 $39,534 $41,842 $39,244 $37,222 $45,438 $43,684 $40,313
For the quarter ended,
December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands) 2015
2015
2015
2015
2014
2014
2014
2014
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period $ 30,495 $31,699 $30,571 $28,530 $35,639 $34,349 $31,283 $30,574
Non-accrual balances transferred to OREO (423) (180) (1,309) (32) (1,475) (300) (390) (281)
Non-accrual balances charged-off (869) (752) (549) (1,077) (1,033) (216) (357) (513)
Net payments or draws (3,084) (1,846) (2,970) (1,067) (4,139) (590) (1,580) (1,073)
Loans placed on non-accrual 3,912 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 $ 30,031 $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 $ 39,661 $38,713 $37,475 $37,802 $37,574 $37,959 $38,026 $38,766
Provision (credit) for loan and lease losses 1,850 1,706 1,218 597 853 (192) 158 (982)
Less loans charged-off, net of recoveries:
Commercial business (128) (25) 73 (89) 50 (58) 28 (768)
Commercial real estate:
Commercial AD&C - - (547) 706 529 - - -
Commercial investor real estate (4) (5) 85 (5) (5) (2) (23) (5)
Commercial owner occupied real estate 725 104 (1) 212 (6) - 265 -
Leasing 4 - - - - - - -
Consumer (31) 348 395 43 83 244 11 331
Residential real estate:
Residential mortgage 80 342 (18) 65 (17) 43 (27) 203
Residential construction (30) (6) (7) (8) (9) (34) (29) (3)
Net charge-offs 616 758 (20) 924 625 193 225 (242)
Balance at end of period $ 40,895 $39,661 $38,713 $37,475 $37,802 $37,574 $37,959 $38,026
Asset Quality Ratios:
Non-performing loans to total loans 0.99% 1.08% 1.13% 1.14% 1.09% 1.47% 1.43% 1.37%
Non-performing assets to total assets 0.80% 0.86% 0.93% 0.89% 0.85% 1.07% 1.03% 0.97%
Allowance for loan losses to loans 1.17% 1.16% 1.18% 1.18% 1.21% 1.26% 1.30% 1.34%
Allowance for loan losses to non-performing loans 118.54% 107.44% 103.71% 104.05% 111.09% 86.03% 90.99% 98.27%
Annualized net charge-offs to average loans 0.07% 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 December 31,
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 $ 781,015 $ 6,626 3.39%$ 707,719 $ 5,985 3.38%
Residential construction loans 133,812 1,241 3.68 141,890 1,328 3.71
Commercial ADC loans 247,612 2,835 4.54 201,020 2,364 4.67
Commercial investor real estate loans 717,742 8,370 4.63 607,050 7,320 4.78
Commercial owner occupied real estate loans 673,883 8,242 4.85 594,634 7,282 5.02
Commercial business loans 424,510 4,819 4.50 367,872 4,132 4.48
Leasing 17 - - 114 1 6.56
Consumer loans 448,439 3,817 3.40 417,910 3,487 3.33
Total loans and leases (2) 3,427,030 35,950 4.17 3,038,209 31,899 4.21
Loans held for sale 11,951 122 4.12 9,952 101 4.07
Taxable securities 551,894 3,552 2.57 643,233 4,031 2.49
Tax-exempt securities (3) 288,382 3,083 4.28 299,549 3,207 4.25
Interest-bearing deposits with banks 40,945 29 0.28 30,635 19 0.25
Federal funds sold 472 - 0.26 473 1 0.22
Total interest-earning assets 4,320,674 42,736 3.93 4,022,051 39,258 3.91
Less: allowance for loan and lease losses (40,143) (38,291)
Cash and due from banks 48,655 48,729
Premises and equipment, net 52,707 47,552
Other assets 212,132 212,196
Total assets $ 4,594,025 $ 4,292,237
Liabilities and Stockholders' Equity
Interest-bearing demand deposits $ 544,133 106 0.08%$ 510,025 119 0.09%
Regular savings deposits 281,146 37 0.05 261,564 34 0.05
Money market savings deposits 892,833 382 0.17 842,158 277 0.13
Time deposits 508,972 1,160 0.90 449,559 776 0.68
Total interest-bearing deposits 2,227,084 1,685 0.30 2,063,306 1,206 0.23
Other borrowings 125,601 76 0.24 78,746 47 0.23
Advances from FHLB 580,870 3,307 2.26 554,739 3,273 2.34
Subordinated debentures 35,000 229 2.63 35,000 222 2.54
Total interest-bearing liabilities 2,968,555 5,297 0.71 2,731,791 4,748 0.69
Noninterest-bearing demand deposits 1,058,215 1,000,285
Other liabilities 45,469 36,098
Stockholders' equity 521,786 524,063
Total liabilities and stockholders' equity $ 4,594,025 $ 4,292,237
Net interest income and spread $ 37,439 3.22 % $ 34,510 3.22%
Less: tax-equivalent adjustment 1,662 1,283
Net interest income $ 35,777 $ 33,227
Interest income/earning assets 3.93 % 3.91%
Interest expense/earning assets 0.48 0.47
Net interest margin 3.45 % 3.44%
(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
Twelve Months Ended December 31,
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 $ 748,584 $ 25,251 3.37%$ 667,735 $ 22,859 3.42%
Residential construction loans 134,486 4,970 3.70 142,503 5,316 3.73
Commercial ADC loans 225,022 10,299 4.58 178,092 8,814 4.95
Commercial investor real estate loans 684,218 32,073 4.69 579,471 28,201 4.87
Commercial owner occupied real estate loans 641,798 31,508 4.91 585,965 28,586 5.04
Commercial business loans 404,994 17,926 4.43 358,425 16,400 4.59
Leasing 27 1 2.50 308 17 5.64
Consumer loans 437,481 14,624 3.37 397,595 13,176 3.34
Total loans and leases (2) 3,276,610 136,652 4.17 2,910,094 123,369 4.27
Loans held for sale 13,571 544 4.01 7,420 312 4.21
Taxable securities 592,153 15,016 2.54 676,237 16,817 2.49
Tax-exempt securities (3) 290,990 12,479 4.29 301,493 12,974 4.30
Interest-bearing deposits with banks 37,761 98 0.26 33,902 85 0.25
Federal funds sold 473 1 0.23 474 1 0.22
Total interest-earning assets 4,211,558 164,790 3.91 3,929,620 153,558 3.93
Less: allowance for loan and lease losses (38,732) (38,556)
Cash and due from banks 46,719 46,224
Premises and equipment, net 51,804 46,275
Other assets 215,104 210,643
Total assets $ 4,486,453 $ 4,194,206
Liabilities and Stockholders' Equity
Interest-bearing demand deposits $ 532,578 418 0.08%$ 484,171 425 0.09%
Regular savings deposits 276,873 146 0.05 259,066 165 0.06
Money market savings deposits 860,399 1,364 0.16 864,029 1,116 0.13
Time deposits 481,368 3,950 0.82 457,778 3,085 0.67
Total interest-bearing deposits 2,151,218 5,878 0.27 2,065,044 4,791 0.23
Other borrowings 110,899 255 0.23 70,933 164 0.23
Advances from FHLB 589,575 13,081 2.22 556,178 12,982 2.33
Subordinated debentures 35,000 899 2.57 35,000 881 2.52
Total interest-bearing liabilities 2,886,692 20,113 0.70 2,727,155 18,818 0.69
Noninterest-bearing demand deposits 1,033,141 921,169
Other liabilities 46,949 31,675
Stockholders' equity 519,671 514,207
Total liabilities and stockholders' equity $ 4,486,453 $ 4,194,206
Net interest income and spread $ 144,677 3.21 % $ 134,740 3.24%
Less: tax-equivalent adjustment 6,478 5,192
Net interest income $ 138,199 $ 129,548
Interest income/earning assets 3.91 % 3.93%
Interest expense/earning assets 0.47 0.48
Net interest margin 3.44 % 3.45%
(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 $6.5 million and $5.2 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.