News release

 

FOR IMMEDIATE RELEASE

 

SANDY SPRING BANCORP REPORTS FIRST QUARTER NET INCOME OF

$10.6 MILLION, AN INCREASE OF 25%

 

OLNEY, MARYLAND, April 18, 2013 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the first quarter of 2013 of $10.6 million ($.42 per diluted share) compared to net income of $8.5 million ($0.35 per diluted share) for the first quarter of 2012 and net income of $9.9 million ($0.40 per diluted share) for the fourth quarter of 2012.

 

“We are off to a strong start for 2013 as the combination of organic loan and deposit growth together with disciplined management of funding costs has offset declining earning asset yields in this low interest rate environment,“ said Daniel J. Schrider, President and Chief Executive Officer. “Maintaining our net interest margin in the face of such a challenging economic environment has been one of our primary goals.”

 

“Our results for the quarter also benefited from improved credit quality due to a continuing decrease in non-performing loans as well as strong mortgage banking revenues driven by historically high mortgage origination volumes,” said Schrider.

 

First Quarter Highlights:

 

·

Pre-tax pre-provision income, a non-GAAP measure, was $15.9 million for the first quarter of 2013, a 19% increase over the first quarter of 2012 and a 1% increase compared to the fourth quarter of 2012.

 

·

The net interest margin was 3.59% for the first quarter of 2013, compared to 3.56% for the first quarter of 2012 and 3.53% for the fourth quarter of 2012. The increase compared to the prior quarter was due primarily to a lower cost of deposits and borrowings which more than offset the decline in the yield on earning assets.

 

·

Non-interest income increased 13% for the quarter compared to the prior year quarter and 1% compared to the fourth quarter of 2012. The increase over the prior year quarter was due primarily to growth in income from mortgage banking activities, miscellaneous loan sales and a non-recurring legal settlement.

 

 

 

·

Non-performing loans totaled $49.5 million at March 31, 2013 compared to $72.2 million at March 31, 2012 and $57.9 million at December 31, 2012. The coverage ratio of the allowance for loan and lease losses to non-performing loans increased to 83% at March 31, 2013 compared to a coverage ratio of 62% at March 31, 2012 and 74% at December 31, 2012.

 

·

Total loans increased 13% over the first quarter of 2012 due primarily to organic loan growth and loans acquired in the CommerceFirst acquisition. Total loans increased 1% compared to the fourth quarter of 2012 due to growth in commercial investor real estate and residential mortgage loans.

 

 

Review of Balance Sheet and Credit Quality

 

Total assets increased 7% to $3.9 billion at March 31, 2013 as compared to March 31, 2012. Total loans and leases increased 13% to $2.6 billion compared to the prior year. This increase was due to loans added in the CommerceFirst acquisition and growth in commercial investor real estate, commercial owner occupied real estate, commercial business and residential mortgage loans.

 

Customer funding sources, which include deposits and other short-term borrowings from customers, increased 8% compared to March 31, 2012. This increase was due primarily to a 20% increase in noninterest-bearing and interest-bearing checking accounts. The Company considers the growth in checking accounts to be an especially valuable metric as such accounts typically are the primary drivers of growth in multiple product banking relationships with clients. Certificates of deposit declined 11% at March 31, 2013 compared to balances at March 31, 2012, as the Company managed its deposit mix to maintain the net interest margin.

 

Tangible common equity totaled $391.7 million at March 31, 2013 compared to $358.0 million at March 31, 2012 resulting in an increase in the ratio of tangible common equity to tangible assets from 9.98% at March 31, 2012 to 10.19% at March 31, 2013. This increase was due primarily to net income earned during the period which more than offset the effect of the goodwill from the prior year’s acquisition. At March 31, 2013, the Company had a total risk-based capital ratio of 15.48%, a tier 1 risk-based capital ratio of 14.23% and a tier 1 leverage ratio of 11.07%.

 

Non-performing loans totaled $49.5 million at March 31, 2013 compared to $72.2 million at March 31, 2012 and $57.9 million at December 31, 2012. Overall credit quality continued to improve due to the resolution of existing problem credits and limited migration of new credits to non-performing status.

 

Loan charge-offs, net of recoveries, totaled $1.8 million for the first quarter of 2013 compared to net charge-offs of $5.0 million for the first quarter of 2012 and net charge-offs of $0.8 million for the fourth quarter of 2012. The decrease in net charge-offs for the first quarter of 2013 compared to the prior year quarter was due primarily to charge-offs taken on commercial real estate and AD&C credits in the first quarter of 2012. The allowance for loan and lease losses represented 1.61% of outstanding loans and leases and 83% of non-performing loans at March 31, 2013 compared to 1.98% of outstanding loans and leases and 62% of non-performing loans at March 31, 2012 and 1.70% of outstanding loans and leases and 74% of non-performing loans at December 31, 2012. 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 2013 increased 9% compared to the first quarter of 2012 due to an increase in average interest-earning assets and lower funding costs. The Company’s funding costs declined due to a lower cost deposit mix and the restructuring of $160 million in Federal Home Loan Bank advances during the fourth quarter of 2012 and the first quarter of 2013. These factors were the primary drivers of the increase in the net interest margin to 3.59% for the first quarter of 2013 compared to 3.56% for the first quarter of 2012.

 

The provision for loan and lease losses was $0.1 million for the first quarter of 2013 compared to $0.7 million for the first quarter of 2012 and $1.2 million for the fourth quarter of 2012. The decrease in the provision for the first quarter of 2013 compared to both the first quarter of 2012 and the fourth quarter of 2012 was due primarily to a decline in historical losses and the impact of a lower level of non-performing loans at March 31, 2013.

 

Non-interest income increased 13% to $12.4 million for the first quarter of 2013 compared to $11.0 million for the first quarter of 2012. This increase was driven by a 49% increase in income from mortgage banking activities due to higher loan origination volumes and higher average gains on sales, both due to historically low interest rates during the quarter. In addition, other noninterest income increased over the prior year period due to a non-recurring legal settlement and miscellaneous gains on sales of loans.

 

Non-interest expenses increased 4% to $27.8 million for the first quarter of 2013 compared to $26.7 million in the first quarter of 2012. This increase was driven primarily by increases in salaries, incentive compensation and occupancy expenses, due in part to the CommerceFirst acquisition. The non-GAAP efficiency ratio improved to 60.80% for the first quarter of 2013 compared to 63.97% for the first quarter of 2012.

 

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 1-888-317-6016. A password is not necessary. Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available at the Web site until 9:00 am (ET) May 20, 2013. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10027381.

 

About Sandy Spring Bancorp/Sandy Spring Bank

 

With $3.9 billion in assets, Sandy Spring Bancorp is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc. Sandy Spring Bancorp is the largest publicly traded banking company headquartered and operating in Maryland. Sandy Spring is a community banking organization that focuses its lending and other services on businesses and consumers in the local market area. Independent and community-oriented, Sandy Spring Bank was founded in 1868 and offers a broad range of commercial banking, retail banking and trust services through 49 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland, and Arlington, Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring Bank also offers a comprehensive menu of insurance and investment management services. Visit www.sandyspringbank.com to locate an ATM near you or for more information about Sandy Spring Bank.

 

 

 

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

 

Forward-Looking Statements

 

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

 

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

 

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company’s loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company’s ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2012, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.

 

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS - UNAUDITED
		Three Months Ended
		March 31,								%
(Dollars in thousands, except per share data)		2013				2012				Change
Results of Operations:
Net interest income		$	31,326			$	28,705				9	%
Provision for loan and lease losses			78				664				(88	)
Non-interest income			12,419				10,974				13
Non-interest expenses			27,823				26,683				4
Income before income taxes			15,844				12,332				28
Net income			10,558				8,476				25
Pre-tax pre-provision pre-merger expense income		$	15,922			$	13,370				19
Return on average assets			1.08	%			0.94	%
Return on average common equity			8.85	%			7.60	%
Net interest margin			3.59	%			3.56	%
Efficiency ratio - GAAP basis (1)			63.60	%			67.25	%
Efficiency ratio - Non-GAAP basis (1)			60.80	%			62.97	%
Per share data:
Basic net income		$	0.42			$	0.35				20	%
Diluted net income		$	0.42			$	0.35				20
Average fully diluted shares			25,002,612				24,180,501				3
Dividends declared per share		$	0.14			$	0.10				40
Book value per share			19.59				18.72				5
Tangible book value per share			15.70				14.83				6
Outstanding shares			24,954,892				24,143,985				3
Financial Condition at period-end:
Investment securities		$	1,008,693			$	1,067,462				(6	)%
Loans and leases			2,565,069				2,271,392				13
Interest-earning assets			3,660,809				3,416,136				7
Assets			3,932,026				3,668,273				7
Deposits			2,919,208				2,681,075				9
Interest-bearing liabilities			2,576,831				2,508,756				3
Stockholders' equity			488,946				451,917				8
Capital ratios:
Tier 1 leverage			11.07	%			11.05	%
Tier 1 capital to risk-weighted assets			14.23	%			14.89	%
Total regulatory capital to risk-weighted assets			15.48	%			16.14	%
Tangible common equity to tangible assets    (2)			10.19	%			9.98	%
Average equity to average assets			12.26	%			12.33	%
Credit quality ratios:
Allowance for loan and lease losses to loans and leases			1.61	%			1.98	%
Non-performing loans to total loans			1.93	%			3.18	%
Non-performing assets to total assets			1.39	%			2.10	%
Allowance for loan and lease losses to non-performing loans			83.38	%			62.43	%
Annualized net charge-offs to average loans and leases     (3)			0.28	%			0.89	%

               

(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 eficiency ratio - non-GAAP basis excludes intangible asset amortization and merger expenses from non-interest expense; securities gains (losses) from non-interest income; OTTI; and the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights.

(2)

The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets and other comprehensive gains (losses).  See the Reconciliation Table included with these Financial Highlights.

(3)

Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale.

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
		Three Months Ended
		March 31,
(Dollars in thousands)		2013				2012
Pre-tax pre-provision pre-merger expense income:
Net income		$	10,558			$	8,476
Plus non-GAAP adjustment:
Merger expenses			-				374
Income taxes			5,286				3,856
Provision for loan and lease losses			78				664
Pre-tax pre-provision pre-merger expense income		$	15,922			$	13,370
Efficiency ratio - GAAP basis:
Non-interest expenses		$	27,823			$	26,683
Net interest income plus non-interest income		$	43,745			$	39,679
Efficiency ratio - GAAP basis			63.60	%			67.25	%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses		$	27,823			$	26,683
Less non-GAAP adjustment:
Amortization of intangible assets			461				461
Merger expenses			-				374
Non-interest expenses -  as adjusted		$	27,362			$	25,848
Net interest income plus non-interest income		$	43,745			$	39,679
Plus non-GAAP adjustment:
Tax-equivalent income			1,311				1,376
Less non-GAAP adjustments:
Securities gains			56				73
OTTI recognized in earnings			-				(64	)
Net interest income plus non-interest income - as adjusted		$	45,000			$	41,046
Efficiency ratio - Non-GAAP basis			60.80	%			62.97	%
Tangible common equity ratio:
Total stockholders' equity		$	488,947			$	451,917
Accumulated other comprehensive loss			(9,732	)			(12,838	)
Goodwill			(84,808	)			(76,816	)
Other intangible assets, net			(2,702	)			(4,272	)
Tangible common equity		$	391,705			$	357,991
Total assets		$	3,932,026			$	3,668,273
Goodwill			(84,808	)			(76,816	)
Other intangible assets, net			(2,702	)			(4,272	)
Tangible assets		$	3,844,516			$	3,587,185
Tangible common equity ratio			10.19	%			9.98	%
Outstanding common shares			24,954,892				24,143,985
Tangible book value per common share		$	15.70			$	14.83

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED
		March 31,				December 31,				March 31,
(Dollars in thousands)		2013				2012				2012
Assets
Cash and due from banks		$	45,922			$	59,540			$	43,149
Federal funds sold			476				466				1,012
Interest-bearing deposits with banks			38,188				26,400				58,144
Cash and cash equivalents			84,586				86,406				102,305
Residential mortgage loans held for sale (at fair value)			48,383				36,149				18,126
Investments available-for-sale (at fair value)			766,080				825,582				878,365
Investments held-to-maturity -- fair value of $216,420, $222,024 and $157,745
at March 31, 2013, December 31, 2012 and March 31, 2012, respectively			211,376				215,814				153,544
Other equity securities			31,237				33,636				35,553
Total loans and leases			2,565,069				2,531,128				2,271,392
Less: allowance for loan and lease losses			(41,246	)			(42,957	)			(45,061	)
Net loans and leases			2,523,823				2,488,171				2,226,331
Premises and equipment, net			47,701				48,326				48,748
Other real estate owned			5,250				5,926				4,834
Accrued interest receivable			12,926				12,392				12,424
Goodwill			84,808				84,808				76,816
Other intangible assets, net			2,702				3,163				4,272
Other assets			113,154				114,833				106,955
Total assets		$	3,932,026			$	3,955,206			$	3,668,273
Liabilities
Noninterest-bearing deposits		$	832,679			$	847,415			$	685,770
Interest-bearing deposits			2,086,529				2,065,619				1,995,305
Total deposits			2,919,208				2,913,034				2,681,075
Securities sold under retail repurchase agreements and federal funds purchased			50,302				86,929				73,130
Advances from FHLB			405,000				405,058				405,321
Subordinated debentures			35,000				35,000				35,000
Accrued interest payable and other liabilities			33,569				31,673				21,830
Total liabilities			3,443,079				3,471,694				3,216,356
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued
and outstanding 24,954,892, 24,905,392 and 24,143,985 at March 31, 2013,
December 31, 2012 and March 31, 2012, respectively			24,955				24,905				24,144
Additional paid in capital			191,615				191,689				177,949
Retained earnings			262,645				255,606				236,986
Accumulated other comprehensive income			9,732				11,312				12,838
Total stockholders' equity			488,947				483,512				451,917
Total liabilities and stockholders' equity		$	3,932,026			$	3,955,206			$	3,668,273

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
		Three Months Ended
		March 31,
(Dollars in thousands, except per share data)		2013				2012
Interest Income:
Interest and fees on loans and leases		$	29,646			$	27,129
Interest on loans held for sale			353				149
Interest on deposits with banks			19				21
Interest and dividends on investment securities:
Taxable			3,934				4,943
Exempt from federal income taxes			2,327				2,373
Interest on federal funds sold			-				-
Total interest income			36,279				34,615
Interest Expense:
Interest on deposits			1,455				2,013
Interest on retail repurchase agreements and federal funds purchased			49				61
Interest on advances from FHLB			3,223				3,587
Interest on subordinated debt			226				249
Total interest expense			4,953				5,910
Net interest income			31,326				28,705
Provision for loan and lease losses			78				664
Net interest income after provision for loan and lease losses			31,248				28,041
Non-interest Income:
Investment securities gains			56				73
Total other-than-temporary impairment ("OTTI") losses			-				(64	)
Portion of OTTI losses recognized in other comprehensive income, before taxes			-				-
Net OTTI recognized in earnings			-				(64	)
Service charges on deposit accounts			2,069				2,200
Mortgage banking activities			1,527				1,025
Wealth management income			4,042				4,057
Insurance agency commissions			1,349				1,202
Income from bank owned life insurance			612				634
Visa check fees			957				898
Other income			1,807				949
Total non-interest income			12,419				10,974
Non-interest Expenses:
Salaries and employee benefits			16,346				15,701
Occupancy expense of premises			3,182				2,846
Equipment expenses			1,249				1,190
Marketing			515				495
Outside data services			1,152				1,279
FDIC insurance			596				652
Amortization of intangible assets			461				461
Other expenses			4,322				4,059
Total non-interest expenses			27,823				26,683
Income before income taxes			15,844				12,332
Income tax expense			5,286				3,856
Net income		$	10,558			$	8,476
Net Income Per Share Amounts:
Basic net income per share		$	0.42			$	0.35
Diluted net income per share		$	0.42			$	0.35
Dividends declared per share		$	0.14			$	0.10

 

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2013				2012
(Dollars in thousands, except per share data)		Q1				Q4				Q3				Q2				Q1
Profitability for the quarter:
Tax-equivalent interest income		$	37,590			$	37,536			$	38,819			$	36,898			$	35,991
Interest expense			4,953				5,282				5,710				5,749				5,910
Tax-equivalent net interest income			32,637				32,254				33,109				31,149				30,081
Tax-equivalent adjustment			1,311				1,334				1,324				1,340				1,376
Provision for loan and lease losses			78				1,168				232				1,585				664
Non-interest income			12,419				12,247				12,242				11,493				10,974
Non-interest expenses			27,823				27,219				27,167				28,858				26,683
Income before income taxes			15,844				14,780				16,628				10,859				12,332
Income tax expense			5,286				4,899				5,638				3,652				3,856
Net income		$	10,558			$	9,881			$	10,990			$	7,207			$	8,476
Financial performance:
Pre-tax pre-provision pre-merger expense income		$	15,922			$	15,740			$	16,996			$	14,642			$	13,370
Return on average assets			1.08	%			1.01	%			1.13	%			0.78	%			0.94	%
Return on average common equity			8.85	%			8.14	%			9.22	%			6.34	%			7.60	%
Net interest margin			3.59	%			3.53	%			3.67	%			3.62	%			3.56	%
Efficiency ratio - GAAP basis (1)			63.60	%			63.06	%			61.70	%			69.87	%			67.25	%
Efficiency ratio - Non-GAAP basis (1)			60.80	%			60.54	%			58.91	%			61.54	%			62.97	%
Per share data:
Basic net income per share		$	0.42			$	0.40			$	0.44			$	0.30			$	0.35
Diluted net income per share		$	0.42			$	0.40			$	0.44			$	0.30			$	0.35
Average fully diluted shares			25,002,612				24,971,249				24,949,205				24,423,236				24,180,501
Dividends declared per common share		$	0.14			$	0.14			$	0.12			$	0.12			$	0.10
Non-interest income:
Securities gains		$	56			$	-			$	296			$	90			$	73
Net OTTI recognized in earnings			-				(14	)			(23	)			(8	)			(64	)
Service charges on deposit accounts			2,069				2,197				2,230				2,283				2,200
Mortgage banking activities			1,527				1,738				1,981				1,288				1,025
Wealth management income			4,042				4,000				3,858				4,034				4,057
Insurance agency commissions			1,349				1,334				1,020				934				1,202
Income from bank owned life insurance			612				662				660				660				634
Visa check fees			957				1,043				984				962				898
Other income			1,807				1,287				1,236				1,250				949
Total non-interest income		$	12,419			$	12,247			$	12,242			$	11,493			$	10,974
Non-interest expense:
Salaries and employee benefits		$	16,346			$	15,405			$	15,476			$	15,927			$	15,701
Occupancy expense of premises			3,182				3,115				3,106				2,943				2,846
Equipment expenses			1,249				1,189				1,237				1,255				1,190
Marketing			515				827				764				565				495
Outside data services			1,152				836				1,076				1,828				1,279
FDIC insurance			596				601				667				653				652
Amortization of intangible assets			461				478				476				466				461
Professional fees			1,287				1,584				1,282				2,156				1,287
Other real estate owned expenses			37				316				174				351				64
Other expenses			2,998				2,868				2,909				2,714				2,708
Total non-interest expense		$	27,823			$	27,219			$	27,167			$	28,858			$	26,683

 

(1)

The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional, efficiency ratio - non-GAAP basis excludes intangible asset amortization and merger expenses from non-interest expense; excludes securities gains; OTTI losses from non-interest income; and adds the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights.

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2013				2012
(Dollars in thousands)		Q1				Q4				Q3				Q2				Q1
Balance sheets at quarter end:
Residential mortgage loans		$	538,346			$	523,364			$	499,806			$	472,426			$	465,204
Residential construction loans			122,698				120,314				128,606				130,791				122,841
Commercial ADC loans			150,599				151,933				133,007				151,620				149,814
Commercial investor real estate loans			487,802				456,888				447,536				443,237				392,626
Commercial owner occupied real estate loans			565,820				571,510				579,711				579,812				525,022
Commercial business loans			344,489				346,708				322,087				334,040				253,827
Leasing			1,974				3,421				4,233				5,618				5,843
Consumer loans			353,341				356,990				353,999				357,534				356,215
Total loans and leases			2,565,069				2,531,128				2,468,985				2,475,078				2,271,392
Allowance for loan and lease losses			(41,246	)			(42,957	)			(42,618	)			(45,265	)			(45,061	)
Investment securities			1,008,693				1,075,032				1,074,918				1,006,743				1,067,462
Interest-earning assets			3,660,809				3,669,175				3,614,310				3,584,480				3,416,136
Total assets			3,932,026				3,955,206				3,887,427				3,855,177				3,668,273
Noninterest-bearing demand deposits			832,679				847,415				818,674				763,566				685,770
Total deposits			2,919,208				2,913,034				2,880,262				2,852,055				2,681,075
Customer repurchase agreements			50,302				51,929				58,306				64,779				73,130
Total interest-bearing liabilities			2,576,831				2,592,606				2,560,040				2,593,501				2,508,756
Total stockholders' equity			488,947				483,512				481,810				471,464				451,917
Quarterly average balance sheets:
Residential mortgage loans		$	575,889			$	542,095			$	510,475			$	488,644			$	474,149
Residential construction loans			120,283				125,640				133,236				125,582				116,630
Commercial ADC loans			148,749				137,679				142,870				151,374				159,769
Commercial investor real estate loans			474,062				453,074				445,012				410,258				377,072
Commercial owner occupied real estate loans			567,723				577,693				580,994				539,590				518,763
Commercial business loans			347,569				322,501				332,364				284,271				258,099
Leasing			2,510				3,773				4,858				5,528				6,325
Consumer loans			357,366				356,452				357,135				359,008				358,783
Total loans and leases			2,594,151				2,518,907				2,506,945				2,364,255				2,269,590
Investment securities			1,051,769				1,072,278				1,038,586				1,052,502				1,086,295
Interest-earning assets			3,677,444				3,639,605				3,599,715				3,453,590				3,389,843
Total assets			3,946,578				3,908,479				3,863,951				3,708,622				3,637,674
Noninterest-bearing demand deposits			797,926				824,188				774,215				699,638				641,477
Total deposits			2,860,451				2,891,120				2,857,523				2,714,980				2,642,634
Customer repurchase agreements			52,622				60,941				62,693				66,674				65,195
Total interest-bearing liabilities			2,631,198				2,571,937				2,587,815				2,526,541				2,523,394
Total stockholders' equity			483,664				482,621				474,231				457,338				448,406
Financial Measures
Average equity to average assets			12.26	%			12.35	%			12.27	%			12.33	%			12.33	%
Investment securities to earning assets			27.55	%			29.30	%			29.74	%			28.09	%			31.25	%
Loans to earnings assets			70.07	%			68.98	%			68.31	%			69.05	%			66.49	%
Loans to assets			65.24	%			63.99	%			63.51	%			64.20	%			61.92	%
Loans to deposits			87.87	%			86.89	%			85.72	%			86.78	%			84.72	%
Capital measures:
Tier 1 leverage			11.07	%			10.98	%			10.99	%			11.21	%			11.05	%
Tier 1 capital to risk-weighted assets			14.23	%			14.15	%			14.31	%			14.12	%			14.89	%
Total regulatory capital to risk-weighted assets			15.48	%			15.40	%			15.56	%			15.36	%			16.14	%
Book value per share		$	19.59			$	19.41			$	19.35			$	18.94			$	18.72
Outstanding shares			24,954,892				24,905,392				24,896,136				24,886,724				24,143,985

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
		2013				2012
(Dollars in thousands)		March 31,				December 31,				September 30,				June 30,				March 31,
Non-Performing Assets:
Loans and leases 90 days past due:
Commercial business		$	-			$	24			$	44			$	70			$	40
Commercial real estate:
Commercial AD&C			-				-				-				342				-
Commercial investor real estate			-				-				-				-				-
Commercial owner occupied real estate			-				209				-				-				-
Leasing			-				-				127				96				-
Consumer			54				14				18				5				89
Residential real estate:
Residential mortgage			-				-				116				91				167
Residential construction			-				-				-				-				-
Total loans and leases 90 days past due			54				247				305				604				296
Non-accrual loans and leases:
Commercial business			4,012				4,611				4,919				4,583				6,542
Commercial real estate:
Commercial AD&C			5,826				6,332				8,957				13,055				14,303
Commercial investor real estate			12,353				11,843				12,345				13,327				13,893
Commercial owner occupied real estate			5,346				13,681				13,742				15,146				16,295
Leasing			-				865				834				872				858
Consumer			2,388				2,410				1,607				1,651				1,700
Residential real estate:
Residential mortgage			5,393				4,681				3,644				2,600				4,818
Residential construction			3,258				3,125				3,236				4,333				4,929
Total non-accrual loans and lease			38,576				47,548				49,284				55,567				63,338
Total restructured loans - accruing			10,839				10,110				9,277				8,285				8,547
Total non-performing loans and leases			49,469				57,905				58,866				64,456				72,181
Other assets and real estate owned (OREO)			5,250				5,926				9,291				9,553				4,834
Total non-performing assets		$	54,719			$	63,831			$	68,157			$	74,009			$	77,015

 

		For the quarter ended,
		March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2013				2012				2012				2012				2012
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period		$	47,548			$	49,284			$	55,567			$	63,338			$	71,680
Non-accrual balances transferred to OREO			(92	)			(400	)			(232	)			(2,131	)			-
Non-accrual balances charged-off			(2,175	)			(979	)			(3,697	)			(1,663	)			(4,965	)
Net payments or draws			(11,768	)			(3,852	)			(6,342	)			(4,149	)			(5,061	)
Loans placed on non-accrual			5,493				5,023				3,988				1,261				1,809
Non-accrual loans brought current			(430	)			(1,528	)			-				(1,089	)			(125	)
Balance at end of period		$	38,576			$	47,548			$	49,284			$	55,567			$	63,338
Analysis of Allowance for Loan Losses:
Balance at beginning of period		$	42,957			$	42,618			$	45,265			$	45,061			$	49,426
Provision for loan and lease losses			78				1,168				232				1,585				664
Less loans charged-off, net of recoveries:
Commercial business			1,744				(76	)			(225	)			(185	)			(39	)
Commercial real estate:
Commercial AD&C			(1,020	)			(248	)			1,983				(59	)			1,076
Commercial investor real estate			31				110				123				140				3,219
Commercial owner occupied real estate			81				-				653				484				-
Leasing			-				-				(17	)			(3	)			5
Consumer			508				384				111				228				348
Residential real estate:
Residential mortgage			447				508				253				713				420
Residential construction			(2	)			151				(2	)			63				-
Net charge-offs			1,789				829				2,879				1,381				5,029
Balance at end of period		$	41,246			$	42,957			$	42,618			$	45,265			$	45,061
Asset Quality Ratios:
Non-performing loans to total loans			1.93	%			2.29	%			2.38	%			2.60	%			3.18	%
Non-performing assets to total assets			1.39	%			1.61	%			1.75	%			1.92	%			2.10	%
Allowance for loan losses to loans			1.61	%			1.70	%			1.73	%			1.83	%			1.98	%
Allowance for loan losses to non-performing loans			83.38	%			74.18	%			72.40	%			70.23	%			62.43	%
Net charge-offs in quarter to average loans			0.28	%			0.13	%			0.46	%			0.23	%			0.89	%

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Three Months Ended March 31,
						2013												2012
										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 (2)		$	575,889			$	5,376				3.73	%		$	474,149			$	5,360				4.55	%
Residential construction loans			120,283				1,004				3.38				116,630				1,101				3.80
Commercial ADC loans			148,749				1,996				5.44				159,769				1,968				4.96
Commercial investor real estate loans			474,062				6,135				5.25				377,072				5,148				5.49
Commercial owner occupied real estate loans			567,723				7,801				5.71				518,763				7,260				5.69
Commercial business loans			347,569				4,586				5.21				258,099				3,151				4.80
Leasing			2,510				38				6.07				6,325				103				6.52
Consumer loans			357,366				3,063				3.51				358,783				3,187				3.60
Total loans and leases (3)			2,594,151				29,999				4.71				2,269,590				27,278				4.84
Taxable securities			754,112				4,305				2.28				809,939				5,273				2.60
Tax-exempt securities (4)			297,657				3,267				4.39				276,356				3,419				4.95
Interest-bearing deposits with banks			31,050				19				0.25				32,871				21				0.25
Federal funds sold			474				-				0.22				1,087				-				0.14
Total interest-earning assets			3,677,444				37,590				4.13				3,389,843				35,991				4.26
Less:  allowance for loan and lease losses			(43,705	)											(49,567	)
Cash and due from banks			46,888												45,058
Premises and equipment, net			48,167												48,554
Other assets			217,784												203,786
Total assets		$	3,946,578											$	3,637,674
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	423,485				92				0.09	%		$	362,730				87				0.10	%
Regular savings deposits			234,492				48				0.08				200,604				46				0.09
Money market savings deposits			892,343				411				0.19				859,121				512				0.24
Time deposits			512,205				904				0.72				578,702				1,368				0.95
Total interest-bearing deposits			2,062,525				1,455				0.29				2,001,157				2,013				0.40
Other borrowings			65,601				49				0.30				81,878				61				0.30
Advances from FHLB			468,072				3,223				2.79				405,359				3,587				3.56
Subordinated debentures			35,000				226				2.58				35,000				249				2.85
Total interest-bearing liabilities			2,631,198				4,953				0.76				2,523,394				5,910				0.94
Noninterest-bearing demand deposits			797,926												641,477
Other liabilities			33,790												24,397
Stockholders' equity			483,664												448,406
Total liabilities and stockholders' equity		$	3,946,578											$	3,637,674
Net interest income and spread						$	32,637				3.37	%						$	30,081				3.32	%
Less: tax-equivalent adjustment							1,311												1,376
Net interest income						$	31,326											$	28,705
Interest income/earning assets											4.13	%											4.26	%
Interest expense/earning assets											0.54												0.70
Net interest margin											3.59	%											3.56	%

 

(1)

Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2013 and 2012. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.3 million and $1.4 million in 2013 and 2012, respectively.

(2)

Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans.

(3)

Non-accrual loans are included in the average balances.

(4)

Includes only investments that are exempt from federal taxes.