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Sandy Spring Bancorp Reports Record Net Income of $15.1 Million for the First Quarter

OLNEY, Md., April 20, 2017 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net income for the first quarter of 2017 of $15.1 million ($0.63 per diluted share) compared to net income of $10.8 million ($0.45 per diluted share) for the first quarter of 2016 and net income of $13.3 million ($0.55 per diluted share) for the fourth quarter of 2016.

“Higher net interest income driven primarily by strong loan growth over the preceding year was the main driver of our record first quarter earnings. Continued strong credit quality, the execution of efficient funding strategies and disciplined expense control were also contributing factors to our performance for the quarter,” said Daniel J. Schrider, President and Chief Executive Officer.

First Quarter Highlights:

  • Total loans increased 12% compared to the first quarter of 2016 and 2% compared to the fourth quarter of 2016. These increases were driven primarily by year-over-year growth of 16% in the commercial loan portfolio.
  • Total deposits grew 11% from the prior year period and 6% from the prior quarter.
  • The net interest margin was 3.51% for the first quarter of 2017, compared to 3.44% for the first quarter of 2016 and 3.52% for the fourth quarter of 2016.
  • Return on average equity increased 38% to 11.45% as compared to 8.29% from the prior year.
  • The Non-GAAP efficiency ratio was 54.78% for the current quarter as compared to 61.84% for the first quarter of 2016 and 57.54% for the fourth quarter of 2016.
  • Pre-tax, pre-provision income increased 33% compared with the first quarter of 2016.

Review of Balance Sheet and Credit Quality

Total assets grew 10% to $5.2 billion at March 31, 2017 compared to $4.7 billion at March 31, 2016. This growth was driven by the increase in the loan portfolio as total loans ended the period at $4.0 billion.

At March 31, 2017, combined noninterest-bearing and interest-bearing checking account balances, an important performance driver of multiple-product banking relationships with clients, increased 12% compared to balances at March 31, 2016. Total deposits and certain other short-term borrowings that comprise the funding sources derived from clients, increased 12% compared to March 31, 2016.

Tangible common equity totaled $463 million at March 31, 2017 compared to $434 million at March 31, 2016. The ratio of tangible common equity to tangible assets decreased to 9.06% at March 31, 2017 from 9.37% at March 31, 2016 due to the impact of the growth in assets over the preceding 12 months. Dividends per common share were $0.26 per share for the first quarter compared to $0.24 per share for the first quarter of 2016, an 8% increase.

At March 31, 2017, the Company had a total risk-based capital ratio of 12.06%, a common equity tier 1 risk-based capital ratio of 11.02%, a tier 1 risk-based capital ratio of 11.02% and a tier 1 leverage ratio of 9.26%. On January 6, 2017 the Company repurchased all of its remaining $30 million in subordinated debentures at par value. This strategy was executed to improve the Company’s future net interest margin.

Non-performing loans totaled $30.9 million at March 31, 2017 compared to $36.1 million at March 31, 2016 and $31.9 million at December 31, 2016. The level of non-performing loans to total loans decreased to 0.77% at March 31, 2017 compared to 1.01% at March 31, 2016 as a result of the growth in the loan portfolio and a concurrent decrease in the level of non-performing loans.

Loan charge-offs, net of recoveries, totaled $0.4 million for the first quarter of 2017 compared to $0.4 million for the first quarter of 2016. The allowance for loan losses represented 1.10% of outstanding loans and 142% of non-performing loans at March 31, 2017 compared to 1.17% of outstanding loans and 116% of non-performing loans at March 31, 2016. The decline in the allowance to outstanding loans ratio is a reflection of improved overall credit quality during the past year that offset the impact of the growth in the loan portfolio during the same period. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the first quarter of 2017 increased 11% compared to the first quarter of 2016. The net interest margin improved to 3.51% for the first quarter of 2017 compared to 3.44% for the first quarter of 2016. This improvement reflects the impact of loan growth over the preceding year combined with the cumulative benefits associated with the execution of funding strategies and the shift from lower yielding investments to the higher yielding loan portfolio during the past 12 months.

The provision for loan losses was $0.2 million for the first quarter of 2017 compared to $1.2 million for the first quarter of 2016 and $0.6 million for the fourth quarter of 2016. The decrease in the current quarter’s charge versus the prior year’s quarter reflects improved loan portfolio credit quality, which partially offset the effects of loan growth on the provision over the past year.

Non-interest income decreased to $12.6 million for the first quarter of 2017 compared to $13.4 million for the first quarter of 2016. The first quarter of 2016 included gains of $1.8 million on sales of investment securities. Excluding these securities gains, non-interest income increased 9% compared to the prior year quarter due to increases in insurance agency commissions and other non-interest income.

Non-interest expenses decreased 7% to $30.0 million for the first quarter of 2017 compared to $32.3 million in the first quarter of 2016. The first quarter of 2016 included $1.8 million in prepayment penalties on the early payoff of high-rate FHLB advances. Excluding this transaction, non-interest expenses decreased 2% compared to the first quarter of 2016 due to lower employee benefit costs. The non-GAAP efficiency ratio was 54.78% for the first quarter of 2017 compared to 61.84% for the first quarter of 2016 primarily a result of the growth in net interest income coupled with the effects of expense control.

Conference Call

The Company’s management will host a conference call to discuss its first 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) May 4, 2017. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10103502.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring Bank offers a broad range of commercial banking, retail banking, mortgage and trust services throughout central Maryland, Northern Virginia, and the greater Washington, D.C. market. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. With $5.2 billion in assets, the bank operates 44 community offices and six financial centers across the region. Visit www.sandyspringbank.com for more information.

Forward-Looking Statements

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

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

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company’s loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company’s ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2016, 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
March 31, %
(Dollars in thousands, except per share data) 2017 2016 Change
Results of Operations:
Net interest income $ 40,253 $36,122 11 %
Provision for loan losses 194 1,236 (84)
Non-interest income 12,632 13,363 (5)
Non-interest expenses 29,981 32,317 (7)
Income before income taxes 22,710 15,932 43
Net income 15,112 10,813 40
Pre-tax pre-provision income $ 22,904 $17,168 33
Return on average assets 1.20 % 0.93%
Return on average common equity 11.45 % 8.29%
Net interest margin 3.51 % 3.44%
Efficiency ratio - GAAP basis (1) 56.69 % 65.31%
Efficiency ratio - Non-GAAP basis (1) 54.78 % 61.84%
Per share data:
Basic net income $ 0.63 $0.45 40 %
Diluted net income $ 0.63 $0.45 40
Average fully diluted shares 24,158,566 24,222,940 -
Dividends declared per share $ 0.26 $0.24 8
Book value per share 22.74 21.92 4
Tangible book value per share 19.36 18.21 6
Outstanding shares 23,930,165 23,827,305 -
Financial Condition at period-end:
Investment securities $ 855,707 $742,401 15 %
Loans 3,992,996 3,560,688 12
Interest-earning assets 4,919,927 4,447,063 11
Assets 5,201,164 4,716,608 10
Deposits 3,799,198 3,412,308 11
Interest-bearing liabilities 3,380,937 3,073,605 10
Stockholders' equity 544,261 522,392 4
Capital ratios:
Tier 1 leverage (4) 9.26 % 10.23%
Tier 1 capital to risk-weighted assets (4) 11.02 % 12.74%
Total regulatory capital to risk-weighted assets (4) 12.06 % 13.86%
Common equity tier 1 capital to risk-weighted assets (4) 11.02 % 11.79%
Tangible common equity to tangible assets (2) 9.06 % 9.37%
Average equity to average assets 10.47 % 11.19%
Credit quality ratios:
Allowance for loan losses to loans 1.10 % 1.17%
Non-performing loans to total loans 0.77 % 1.01%
Non-performing assets to total assets 0.62 % 0.82%
Allowance for loan losses to non-performing loans 142.14 % 115.72%
Annualized net charge-offs to average loans (3) 0.04 % 0.04%
(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, excluding residential mortgage loans held-for-sale.
(4) Estimated ratio at March 31, 2017


Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
Three Months Ended
March 31,
(Dollars in thousands) 2017 2016
Pre-tax pre-provision income:
Net income $ 15,112 $10,813
Plus non-GAAP adjustment:
Income taxes 7,598 5,119
Provision for loan losses 194 1,236
Pre-tax pre-provision income $ 22,904 $17,168
Efficiency ratio - GAAP basis:
Non-interest expenses $ 29,981 $32,317
Net interest income plus non-interest income $ 52,885 $49,485
Efficiency ratio - GAAP basis 56.69% 65.31%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses $ 29,981 $32,317
Less non-GAAP adjustment:
Amortization of intangible assets 26 32
Loss on FHLB redemption - 1,751
Non-interest expenses - as adjusted $ 29,955 $30,534
Net interest income plus non-interest income $ 52,885 $49,485
Plus non-GAAP adjustment:
Tax-equivalent income 1,796 1,664
Less non-GAAP adjustments:
Securities gains 2 1,769
Net interest income plus non-interest income - as adjusted $ 54,679 $49,380
Efficiency ratio - Non-GAAP basis 54.78% 61.84%
Tangible common equity ratio:
Total stockholders' equity $ 544,261 $522,392
Accumulated other comprehensive income (loss) 5,534 (4,233)
Goodwill (85,768) (84,171)
Other intangible assets, net (654) (105)
Tangible common equity $ 463,373 $433,883
Total assets $ 5,201,164 $4,716,608
Goodwill (85,768) (84,171)
Other intangible assets, net (654) (105)
Tangible assets $ 5,114,742 $4,632,332
Tangible common equity ratio 9.06% 9.37%
Outstanding common shares 23,930,165 23,827,305
Tangible book value per common share $ 19.36 $18.21


Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
March 31, December 31, March 31,
(Dollars in thousands) 2017 2016 2016
Assets
Cash and due from banks $ 48,362 $53,190 $43,228
Federal funds sold 2,336 1,953 559
Interest-bearing deposits with banks 51,171 78,982 115,609
Cash and cash equivalents 101,869 134,125 159,396
Residential mortgage loans held for sale (at fair value) 17,717 13,222 27,806
Investments available-for-sale (at fair value) 814,096 733,554 704,872
Other equity securities 41,611 46,094 37,529
Total loans 3,992,996 3,927,808 3,560,688
Less: allowance for loan losses (43,861) (44,067) (41,766)
Net loans 3,949,135 3,883,741 3,518,922
Premises and equipment, net 53,346 53,562 53,307
Other real estate owned 1,294 1,911 2,414
Accrued interest receivable 14,532 14,589 13,660
Goodwill 85,768 85,768 84,171
Other intangible assets, net 654 680 105
Other assets 121,142 124,137 114,426
Total assets $ 5,201,164 $5,091,383 $4,716,608
Liabilities
Noninterest-bearing deposits $ 1,234,505 $1,138,139 $1,084,746
Interest-bearing deposits 2,564,693 2,439,405 2,327,562
Total deposits 3,799,198 3,577,544 3,412,308
Securities sold under retail repurchase agreements and federal funds purchased 141,244 125,119 121,043
Advances from FHLB 675,000 790,000 590,000
Subordinated debentures - 30,000 35,000
Accrued interest payable and other liabilities 41,461 35,148 35,865
Total liabilities 4,656,903 4,557,811 4,194,216
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 23,930,165,
23,901,084 and 23,827,305 at March 31, 2017, December 31, 2016 and March 31, 2016, respectively 23,930 23,901 23,827
Additional paid in capital 166,614 165,871 163,522
Retained earnings 359,251 350,414 330,810
Accumulated other comprehensive income (loss) (5,534) (6,614) 4,233
Total stockholders' equity 544,261 533,572 522,392
Total liabilities and stockholders' equity $ 5,201,164 $5,091,383 $4,716,608


Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three Months Ended
March 31,
(Dollars in thousands, except per share data) 2017 2016
Interest Income:
Interest and fees on loans $40,223 $36,206
Interest on loans held for sale 82 134
Interest on deposits with banks 90 53
Interest and dividends on investment securities:
Taxable 3,608 3,286
Exempt from federal income taxes 1,951 1,973
Interest on federal funds sold 4 1
Total interest income 45,958 41,653
Interest Expense:
Interest on deposits 2,488 1,837
Interest on retail repurchase agreements and federal funds purchased 76 66
Interest on advances from FHLB 3,129 3,374
Interest on subordinated debt 12 254
Total interest expense 5,705 5,531
Net interest income 40,253 36,122
Provision for loan losses 194 1,236
Net interest income after provision for loan losses 40,059 34,886
Non-interest Income:
Investment securities gains 2 1,769
Service charges on deposit accounts 1,964 1,903
Mortgage banking activities 608 535
Wealth management income 4,484 4,405
Insurance agency commissions 1,752 1,445
Income from bank owned life insurance 594 615
Bank card fees 1,145 1,089
Other income 2,083 1,602
Total non-interest income 12,632 13,363
Non-interest Expenses:
Salaries and employee benefits 17,801 18,230
Occupancy expense of premises 3,402 3,473
Equipment expenses 1,724 1,664
Marketing 663 681
Outside data services 1,392 1,363
FDIC insurance 805 637
Amortization of intangible assets 26 32
Other expenses 4,168 6,237
Total non-interest expenses 29,981 32,317
Income before income taxes 22,710 15,932
Income tax expense 7,598 5,119
Net income $15,112 $10,813
Net Income Per Share Amounts:
Basic net income per share $0.63 $0.45
Diluted net income per share $0.63 $0.45
Dividends declared per share $0.26 $0.24


Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
2017 2016
(Dollars in thousands, except per share data) Q1 Q4 Q3 Q2 Q1
Profitability for the Quarter:
Tax-equivalent interest income $ 47,754 $45,961 $44,545 $43,443 $43,317
Interest expense 5,705 5,276 5,126 5,071 5,531
Tax-equivalent net interest income 42,049 40,685 39,419 38,372 37,786
Tax-equivalent adjustment 1,796 1,718 1,688 1,640 1,664
Provision for loan losses 194 572 781 2,957 1,236
Non-interest income 12,632 12,344 12,584 12,751 13,363
Non-interest expenses 29,981 30,544 29,326 30,871 32,317
Income before income taxes 22,710 20,195 20,208 15,655 15,932
Income tax expense 7,598 6,879 6,734 5,008 5,119
Net income $15,112 $13,316 $13,474 $10,647 $10,813
Financial Performance:
Pre-tax pre-provision income $22,904 $20,767 $20,989 $18,612 $17,168
Return on average assets 1.20% 1.09% 1.13% 0.92% 0.93%
Return on average common equity 11.45% 9.92% 10.11% 8.21% 8.29%
Net interest margin 3.51% 3.52% 3.50% 3.51% 3.44%
Efficiency ratio - GAAP basis (1) 56.69% 59.53% 58.28% 62.39% 65.31%
Efficiency ratio - Non-GAAP basis (1) 54.78% 57.54% 56.33% 59.12% 61.84%
Per Share Data:
Basic net income per share $0.63 $0.55 $0.56 $0.45 $0.45
Diluted net income per share $0.63 $0.55 $0.56 $0.44 $0.45
Average fully diluted shares 24,158,566 24,140,534 24,122,923 24,108,668 24,222,940
Dividends declared per common share $0.26 $0.26 $0.24 $0.24 $0.24
Non-interest Income:
Securities gains $2 $13 $- $150 $1,769
Service charges on deposit accounts 1,964 2,059 2,035 1,956 1,903
Mortgage banking activities 608 1,279 1,129 1,106 535
Wealth management income 4,484 4,605 4,347 4,448 4,405
Insurance agency commissions 1,752 1,228 1,786 949 1,445
Income from bank owned life insurance 594 616 616 615 615
Bank card fees 1,145 1,176 1,189 1,220 1,089
Other income 2,083 1,368 1,482 2,307 1,602
Total Non-interest Income $12,632 $12,344 $12,584 $12,751 $13,363
Non-interest Expense:
Salaries and employee benefits $17,801 $18,055 $17,848 $17,221 $18,230
Occupancy expense of premises 3,402 3,195 3,130 3,162 3,473
Equipment expenses 1,724 1,781 1,745 1,693 1,664
Marketing 663 880 628 662 681
Outside data services 1,392 1,310 1,349 1,355 1,363
FDIC insurance 805 729 726 649 637
Amortization of intangible assets 26 36 34 28 32
Professional fees 955 1,268 987 1,447 1,138
Other real estate owned expenses 5 2 5 (5) 17
Other expenses 3,208 3,288 2,874 4,659 5,082
Total Non-interest Expense $29,981 $30,544 $29,326 $30,871 $32,317
(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
2017 2016
(Dollars in thousands) Q1 Q4 Q3 Q2 Q1
Balance Sheets at Quarter End:
Residential mortgage loans $ 848,814 $841,692 $854,055 $820,618 $804,105
Residential construction loans 170,285 150,229 144,998 142,710 138,221
Commercial AD&C loans 309,350 308,279 302,522 285,585 261,204
Commercial investor real estate loans 979,410 928,113 847,946 824,252 783,161
Commercial owner occupied real estate loans 772,443 775,552 736,744 700,599 675,560
Commercial business loans 457,216 467,286 444,129 451,711 451,239
Consumer loans 455,478 456,657 450,113 447,149 447,198
Total loans 3,992,996 3,927,808 3,780,507 3,672,624 3,560,688
Allowance for loan losses (43,861) (44,067) (43,942) (43,384) (41,766)
Loans held for sale 17,717 13,222 15,822 13,490 27,806
Investment securities 855,707 779,648 691,471 734,828 742,401
Interest-earning assets 4,919,927 4,801,613 4,537,331 4,461,180 4,447,063
Total assets 5,201,164 5,091,383 4,810,611 4,739,449 4,716,608
Noninterest-bearing demand deposits 1,234,505 1,138,139 1,154,227 1,176,135 1,084,746
Total deposits 3,799,198 3,577,544 3,537,157 3,510,141 3,412,308
Customer repurchase agreements 141,244 125,119 124,205 117,887 121,043
Total interest-bearing liabilities 3,380,937 3,384,524 3,087,135 2,996,893 3,073,605
Total stockholders' equity 544,261 533,572 536,655 529,479 522,392
Quarterly Average Balance Sheets:
Residential mortgage loans $ 847,896 $848,399 $836,452 $811,705 $807,443
Residential construction loans 157,152 148,248 147,602 142,854 134,708
Commercial AD&C loans 310,325 310,110 287,836 272,090 261,687
Commercial investor real estate loans 945,080 878,511 832,529 788,785 750,821
Commercial owner occupied real estate loans 774,964 750,679 717,371 684,907 677,786
Commercial business loans 462,444 452,195 446,123 453,459 460,903
Consumer loans 458,162 454,349 450,171 449,594 451,075
Total loans 3,956,023 3,842,491 3,718,084 3,603,394 3,544,423
Loans held for sale 7,402 12,454 10,207 8,326 14,036
Investment securities 818,287 703,574 709,527 739,132 810,593
Interest-earning assets 4,829,208 4,599,426 4,477,438 4,394,879 4,411,796
Total assets 5,111,698 4,878,660 4,747,020 4,664,343 4,685,747
Noninterest-bearing demand deposits 1,159,715 1,167,379 1,131,739 1,082,762 1,021,471
Total deposits 3,673,731 3,582,437 3,528,665 3,429,897 3,300,131
Customer repurchase agreements 128,485 128,471 120,702 122,597 110,862
Total interest-bearing liabilities 3,375,002 3,138,420 3,045,998 3,020,505 3,103,710
Total stockholders' equity 535,308 534,057 530,241 521,387 524,309
Financial Measures:
Average equity to average assets 10.47% 10.95% 11.17% 11.18% 11.19%
Investment securities to earning assets 17.39% 16.24% 15.24% 16.47% 16.69%
Loans to earning assets 81.16% 81.80% 83.32% 82.32% 80.07%
Loans to assets 76.77% 77.15% 78.59% 77.49% 75.49%
Loans to deposits 105.10% 109.79% 106.88% 104.63% 104.35%
Capital Measures:
Tier 1 leverage (1) 9.26% 10.14% 10.25% 10.29% 10.23%
Tier 1 capital to risk-weighted assets (1) 11.02% 11.74% 12.17% 12.42% 12.74%
Total regulatory capital to risk-weighted assets (1) 12.06% 12.80% 13.29% 13.57% 13.86%
Common equity tier 1 capital to risk-weighted assets (1) 11.02% 11.01% 11.41% 11.63% 11.79%
Book value per share $ 22.74 $22.32 $22.47 $22.18 $21.92
Outstanding shares 23,930,165 23,901,084 23,886,651 23,874,650 23,827,305
(1) Estimated ratio at March 31, 2017


Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
2017 2016
(Dollars in thousands) March 31, December 31, September 30, June 30, March 31,
Non-Performing Assets:
Loans 90 days past due:
Commercial business $- $- $163 $- $-
Commercial real estate:
Commercial AD&C - - - - -
Commercial investor real estate - - - - -
Commercial owner occupied real estate - - - - -
Consumer - - - 2 1
Residential real estate:
Residential mortgage 232 232 - - -
Residential construction - - - - -
Total loans 90 days past due 232 232 163 2 1
Non-accrual loans:
Commercial business 4,849 5,833 4,140 4,263 3,741
Commercial real estate:
Commercial AD&C 137 137 137 137 147
Commercial investor real estate 7,970 8,107 9,189 8,868 7,885
Commercial owner occupied real estate 5,106 4,823 5,591 5,678 7,149
Consumer 3,058 2,859 2,726 2,600 2,715
Residential real estate:
Residential mortgage 6,908 7,257 7,321 6,186 9,329
Residential construction 189 195 199 202 412
Total non-accrual loans 28,217 29,211 29,303 27,934 31,378
Total restructured loans - accruing 2,409 2,489 2,512 3,420 4,716
Total non-performing loans 30,858 31,932 31,978 31,356 36,095
Other assets and real estate owned (OREO) 1,294 1,911 1,274 1,311 2,414
Total non-performing assets $32,152 $33,843 $33,252 $32,667 $38,509
For the Quarter Ended,
March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands) 2017 2016 2016 2016 2016
Analysis of Non-accrual Loan Activity:
Balance at beginning of period $29,211 $29,303 $27,934 $31,378 $30,031
Non-accrual balances transferred to OREO (113) (637) (38) - -
Non-accrual balances charged-off (391) (390) (245) (1,305) (274)
Net payments or draws (1,382) (1,547) (525) (4,810) (914)
Loans placed on non-accrual 1,461 2,482 2,486 2,671 2,535
Non-accrual loans brought current (569) - (309) - -
Balance at end of period $28,217 $29,211 $29,303 $27,934 $31,378
Analysis of Allowance for Loan Losses:
Balance at beginning of period $44,067 $43,942 $43,384 $41,766 $40,895
Provision for loan losses 194 572 781 2,957 1,236
Less loans charged-off, net of recoveries:
Commercial business 260 285 95 106 67
Commercial real estate:
Commercial AD&C - (18) (22) - 48
Commercial investor real estate (5) (9) (12) (107) 192
Commercial owner occupied real estate - - (1) (1) (3)
Consumer 167 177 145 364 54
Residential real estate:
Residential mortgage (16) 18 24 989 15
Residential construction (6) (6) (6) (12) (8)
Net charge-offs 400 447 223 1,339 365
Balance at end of period $43,861 $44,067 $43,942 $43,384 $41,766
Asset Quality Ratios:
Non-performing loans to total loans 0.77% 0.81% 0.85% 0.85% 1.01%
Non-performing assets to total assets 0.62% 0.66% 0.69% 0.69% 0.82%
Allowance for loan losses to loans 1.10% 1.12% 1.16% 1.18% 1.17%
Allowance for loan losses to non-performing loans 142.14% 138.00% 137.41% 138.36% 115.72%
Annualized net charge-offs to average loans 0.04% 0.05% 0.02% 0.15% 0.04%


Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
Three Months Ended March 31,
2017 2016
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 $847,896 $7,348 3.47%$807,443 $6,868 3.40%
Residential construction loans 157,152 1,436 3.71 134,708 1,195 3.57
Total mortgage loans 1,005,048 8,784 3.50 942,151 8,063 3.43
Commercial AD&C loans 310,325 3,654 4.77 261,687 2,998 4.61
Commercial investor real estate loans 945,080 10,419 4.47 750,821 8,612 4.61
Commercial owner occupied real estate loans 774,964 9,028 4.72 677,786 8,085 4.80
Commercial business loans 462,444 5,007 4.39 460,903 5,013 4.37
Total commercial loans 2,492,813 28,108 4.57 2,151,197 24,708 4.62
Consumer loans 458,162 3,930 3.50 451,075 3,889 3.49
Total loans (2) 3,956,023 40,822 4.17 3,544,423 36,660 4.16
Loans held for sale 7,402 82 4.44 14,036 134 3.82
Taxable securities 533,577 3,735 2.80 523,873 3,413 2.61
Tax-exempt securities (3) 284,710 3,021 4.24 286,720 3,056 4.26
Total investment securities 818,287 6,756 3.30 810,593 6,469 3.19
Interest-bearing deposits with banks 45,397 90 0.80 42,255 53 0.50
Federal funds sold 2,099 4 0.70 489 1 0.47
Total interest-earning assets 4,829,208 47,754 3.99 4,411,796 43,317 3.94
Less: allowance for loan losses (43,728) (41,070)
Cash and due from banks 48,820 47,039
Premises and equipment, net 53,649 53,574
Other assets 223,749 214,408
Total assets $5,111,698 $4,685,747
Liabilities and Stockholders' Equity
Interest-bearing demand deposits $610,047 114 0.08%$569,219 108 0.08%
Regular savings deposits 315,465 49 0.06 290,243 42 0.06
Money market savings deposits 990,103 778 0.32 897,034 437 0.20
Time deposits 598,401 1,547 1.05 522,164 1,250 0.96
Total interest-bearing deposits 2,514,016 2,488 0.40 2,278,660 1,837 0.32
Other borrowings 128,486 76 0.24 110,984 66 0.24
Advances from FHLB 730,833 3,129 1.74 679,066 3,374 2.00
Subordinated debentures 1,667 12 2.90 35,000 254 2.90
Total interest-bearing liabilities 3,375,002 5,705 0.69 3,103,710 5,531 0.72
Noninterest-bearing demand deposits 1,159,715 1,021,471
Other liabilities 41,673 36,257
Stockholders' equity 535,308 524,309
Total liabilities and stockholders' equity $5,111,698 $4,685,747
Net interest income and spread $42,049 3.30% $37,786 3.22%
Less: tax-equivalent adjustment 1,796 1,664
Net interest income $40,253 $36,122
Interest income/earning assets 3.99% 3.94%
Interest expense/earning assets 0.48 0.50
Net interest margin 3.51% 3.44%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2017 and 2016. The annualized taxable-equivalent adjustments utilized in
the above table to compute yields aggregated to $1.8 million and $1.7 million in 2017 and 2016, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.


For additional information or questions, please contact: Daniel J. Schrider, President & Chief Executive Officer, or Philip J. Mantua, E.V.P. & Chief Financial Officer Sandy Spring Bancorp 17801 Georgia Avenue Olney, Maryland 20832 1-800-399-5919 Email: DSchrider@sandyspringbank.com PMantua@sandyspringbank.com Web site: www.sandyspringbank.com Media Contact: Jen Schell 301-570-8331 jschell@sandyspringbank.com

Source:Sandy Spring Bancorp, Inc.

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