Exhibit 99.1

 

News release

 

FOR IMMEDIATE RELEASE

 

SANDY SPRING BANCORP REPORTS NET INCOME OF $10.3 MILLION FOR THE SECOND QUARTER

 

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

 

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

 

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

 

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

 

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

 

Second Quarter Highlights:

 

·

Total loans increased 13% compared to the second quarter of 2014 and were up 4% compared to the first quarter of 2015. This increase was driven primarily by year-over-year growth of 16% in the commercial loan portfolio.

 

·

Combined noninterest-bearing and interest-bearing transaction account balances increased 11% to $1.6 billion at June 30, 2015 as compared to $1.5 billion at June 30, 2014.

 

 

·

The provision for loan and lease losses for the second quarter of 2015 was a charge of $1.2 million compared to charges of $0.2 million for the second quarter of 2014 and $0.6 million for the first quarter of 2015.

 

·

The net interest margin was 3.42% for the second quarter of 2015, compared to 3.48% for the second quarter of 2014 and 3.44% for the first quarter of 2015.

 

·

Non-interest income increased 4% for the quarter compared to the prior year quarter primarily due to increases in income from wealth management and mortgage banking. Non-interest income decreased 8% compared to the linked quarter due to seasonal declines in insurance agency commissions.

 

·

During the second quarter of 2015, the Company repurchased 224,103 shares at an average price of $26.23 per share as part of its existing share repurchase program. For the year-to-date, the Company has repurchased 575,472 shares at an average price of $25.92 per share.

 

Review of Balance Sheet and Credit Quality

 

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

 

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

 

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

 

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

 

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

 

 

Income Statement Review

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Conference Call

 

The Company’s management will host a conference call to discuss its second quarter results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations’ section of the Sandy Spring Web site at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available at the Web site until 9:00 am (ET) July 30, 2015. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10068751.

 

About Sandy Spring Bancorp, Inc.

 

With $4.5 billion in assets, Sandy Spring Bancorp, Inc. is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc. Sandy Spring Bank traces its origin to 1868, making it among the oldest banking institutions in the region. Sandy Spring is a community banking organization that focuses its lending and other services on businesses and consumers in the local market area. Independent and community-oriented, Sandy Spring offers a broad range of commercial banking, retail banking and trust services through 44 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland, and Arlington, Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring Bank also offers a comprehensive menu of insurance and investment management services. Visit www.sandyspringbank.com for more information about Sandy Spring Bank.

 

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, 2014, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS - UNAUDITED

 

		Three Months Ended												Six Months Ended
		June 30,								%				June 30,								%
(Dollars in thousands, except per share data)		2015				2014				Change				2015				2014				Change
Results of Operations:
Net interest income		$	33,933			$	32,309				5	%		$	67,306			$	63,901				5	%
Provision (credit) for loan and lease losses			1,218				158				n.m				1,815				(824	)			n.m
Non-interest income			12,109				11,694				4				25,268				22,943				10
Non-interest expenses			29,477				34,141				(14	)			58,721				61,690				(5	)
Income before income taxes			15,347				9,704				58				32,038				25,978				23
Net income			10,333				6,982				48				21,558				17,910				20
Pre-tax pre-provision income		$	16,727			$	15,990				5			$	34,215			$	31,282				9
Return on average assets			0.93	%			0.67	%							0.99	%			0.87	%
Return on average common equity			8.02	%			5.47	%							8.37	%			7.11	%
Net interest margin			3.42	%			3.48	%							3.43	%			3.48	%
Efficiency ratio - GAAP basis   (1)			64.02	%			77.59	%							63.43	%			71.04	%
Efficiency ratio - Non-GAAP basis   (1)			61.35	%			61.30	%							60.74	%			61.45	%
Per share data:
Basic net income		$	0.42			$	0.28				50	%		$	0.87			$	0.72				21	%
Diluted net income		$	0.42			$	0.28				50			$	0.87			$	0.71				23
Average fully diluted shares			24,689,762				25,127,036				(2	)			24,867,988				25,126,369				(1	)
Dividends declared per share		$	0.22			$	0.18				22			$	0.44			$	0.36				22
Book value per share			21.12				20.63				2				21.12				20.63				2
Tangible book value per share			17.71				17.04				4				17.71				17.04				4
Outstanding shares			24,562,471				25,069,700				(2	)			24,562,471				25,069,700				(2	)
Financial Condition at period-end:
Investment securities		$	878,284			$	980,530				(10	)%		$	878,284			$	980,530				(10	)%
Loans and leases			3,288,865				2,910,944				13				3,288,865				2,910,944				13
Interest-earning assets			4,222,667				3,945,643				7				4,222,667				3,945,643				7
Assets			4,507,367				4,234,342				6				4,507,367				4,234,342				6
Deposits			3,247,346				3,038,670				7				3,247,346				3,038,670				7
Interest-bearing liabilities			2,851,750				2,698,887				6				2,851,750				2,698,887				6
Stockholders' equity			518,873				517,269				-				518,873				517,269				-
Capital ratios:
Tier 1 leverage   (4)			10.83	%			11.37	%							10.83	%			11.37	%
Tier 1 capital to risk-weighted assets   (4)			13.54	%			14.48	%							13.54	%			14.48	%
Total regulatory capital to risk-weighted assets   (4)			14.65	%			15.66	%							14.65	%			15.66	%
Common equity tier 1 capital to risk-weighted assets   (4)			12.53	%			n.a.	%							12.53	%			n.a.	%
Tangible common equity to tangible assets   (2)			9.84	%			10.29	%							9.84	%			10.29	%
Average equity to average assets			11.65	%			12.31	%							11.78	%			12.29	%
Credit quality ratios:
Allowance for loan and lease losses to loans and leases			1.18	%			1.30	%							1.18	%			1.30	%
Non-performing loans to total loans			1.13	%			1.43	%							1.13	%			1.43	%
Non-performing assets to total assets			0.93	%			1.03	%							0.93	%			1.03	%
Allowance for loan and lease losses to non-performing loans			103.71	%			90.99	%							103.71	%			90.99	%
Annualized net charge-offs to average loans and leases    (3)			-	%			0.03	%							0.06	%			-	%

 

(1)

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

(2)

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

(3)

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

(4)

Estimated ratio at June 30, 2015

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
(Dollars in thousands)		2015				2014				2015				2014
Pre-tax pre-provision income:
Net income		$	10,333			$	6,982			$	21,558			$	17,910
Plus non-GAAP adjustment:
Litigation expenses			162				6,128				362				6,128
Income taxes			5,014				2,722				10,480				8,068
Provision (credit) for loan and lease losses			1,218				158				1,815				(824	)
Pre-tax pre-provision income		$	16,727			$	15,990			$	34,215			$	31,282
Efficiency ratio - GAAP basis:
Non-interest expenses		$	29,477			$	34,141			$	58,721			$	61,690
Net interest income plus non-interest income		$	46,042			$	44,003			$	92,574			$	86,844
Efficiency ratio - GAAP basis			64.02	%			77.59	%			63.43	%			71.04	%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses		$	29,477			$	34,141			$	58,721			$	61,690
Less non-GAAP adjustment:
Amortization of intangible assets			106				224				213				594
Litigation expenses			162				6,128				362				6,128
Non-interest expenses -  as adjusted		$	29,209			$	27,789			$	58,146			$	54,968
Net interest income plus non-interest income		$	46,042			$	44,003			$	92,574			$	86,844
Plus non-GAAP adjustment:
Tax-equivalent income			1,589				1,331				3,153				2,613
Less non-GAAP adjustments:
Securities gains (losses)			19				-				-				-
Net interest income plus non-interest income - as adjusted		$	47,612			$	45,334			$	95,727			$	89,457
Efficiency ratio - Non-GAAP basis			61.35	%			61.30	%			60.74	%			61.45	%
Tangible common equity ratio:
Total stockholders' equity		$	518,873			$	517,269			$	518,873			$	517,269
Accumulated other comprehensive income			592				(5,233	)			592				(5,233	)
Goodwill			(84,171	)			(84,171	)			(84,171	)			(84,171	)
Other intangible assets, net			(296	)			(737	)			(296	)			(737	)
Tangible common equity		$	434,998			$	427,128			$	434,998			$	427,128
Total assets		$	4,507,367			$	4,234,342			$	4,507,367			$	4,234,342
Goodwill			(84,171	)			(84,171	)			(84,171	)			(84,171	)
Other intangible assets, net			(296	)			(737	)			(296	)			(737	)
Tangible assets		$	4,422,900			$	4,149,434			$	4,422,900			$	4,149,434
Tangible common equity ratio			9.84	%			10.29	%			9.84	%			10.29	%
Outstanding common shares			24,562,471				25,069,700				24,562,471				25,069,700
Tangible book value per common share		$	17.71			$	17.04			$	17.71			$	17.04

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED

 

		June 30,				December 31,				June 30,
(Dollars in thousands)		2015				2014				2014
Assets
Cash and due from banks		$	53,569			$	52,804			$	65,674
Federal funds sold			472				473				474
Interest-bearing deposits with banks			35,601				42,940				44,653
Cash and cash equivalents			89,642				96,217				110,801
Residential mortgage loans held for sale (at fair value)			19,445				10,512				9,042
Investments available-for-sale (at fair value)			625,819				672,209				720,885
Investments held-to-maturity -- fair value of $217,880, $222,260 and $224,313 at June 30, 2015, December 31, 2014 and June 30, 2014, respectively			216,866				219,973				223,518
Other equity securities			35,599				41,437				36,127
Total loans and leases			3,288,865				3,127,392				2,910,944
Less: allowance for loan and lease losses			(38,713	)			(37,802	)			(37,959	)
Net loans and leases			3,250,152				3,089,590				2,872,985
Premises and equipment, net			51,609				49,402				45,296
Other real estate owned			4,514				3,195				1,967
Accrued interest receivable			13,144				12,634				12,271
Goodwill			84,171				84,171				84,171
Other intangible assets, net			296				510				737
Other assets			116,110				117,282				116,542
Total assets		$	4,507,367			$	4,397,132			$	4,234,342
Liabilities
Noninterest-bearing deposits		$	1,092,413			$	993,737			$	984,700
Interest-bearing deposits			2,154,933				2,072,772				2,053,970
Total deposits			3,247,346				3,066,509				3,038,670
Securities sold under retail repurchase agreements and federal funds purchased			111,817				74,432				72,917
Advances from FHLB			550,000				655,000				537,000
Subordinated debentures			35,000				35,000				35,000
Accrued interest payable and other liabilities			44,331				44,440				33,486
Total liabilities			3,988,494				3,875,381				3,717,073
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,562,471, 25,044,877 and 25,069,700 at June 30, 2015, December 31, 2014 and June 30, 2014, respectively			24,562				25,045				25,070
Additional paid in capital			181,504				194,647				194,252
Retained earnings			313,399				302,882				292,714
Accumulated other comprehensive income (loss)			(592	)			(823	)			5,233
Total stockholders' equity			518,873				521,751				517,269
Total liabilities and stockholders' equity		$	4,507,367			$	4,397,132			$	4,234,342

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
(Dollars in thousands, except per share data)		2015				2014				2015				2014
Interest Income:
Interest and fees on loans and leases		$	33,031			$	30,706			$	65,170			$	60,440
Interest on loans held for sale			132				71				208				130
Interest on deposits with banks			22				22				44				42
Interest and dividends on investment securities:
Taxable			3,850				3,876				7,427				7,992
Exempt from federal income taxes			1,814				2,316				4,072				4,637
Total interest income			38,849				36,991				76,921				73,241
Interest Expense:
Interest on deposits			1,367				1,193				2,561				2,377
Interest on retail repurchase agreements and federal funds purchased			60				37				110				75
Interest on advances from FHLB			3,266				3,233				6,502				6,451
Interest on subordinated debt			223				219				442				437
Total interest expense			4,916				4,682				9,615				9,340
Net interest income			33,933				32,309				67,306				63,901
Provision (credit) for loan and lease losses			1,218				158				1,815				(824	)
Net interest income after provision (credit) for loan and lease losses			32,715				32,151				65,491				64,725
Non-interest Income:
Investment securities gains			19				-				19				-
Service charges on deposit accounts			1,839				2,089				3,721				4,061
Mortgage banking activities			822				570				2,000				886
Wealth management income			5,161				4,741				10,077				9,207
Insurance agency commissions			881				961				2,499				2,601
Income from bank owned life insurance			606				608				1,319				1,206
Bank card fees			1,220				1,169				2,277				2,147
Other income			1,561				1,556				3,356				2,835
Total non-interest income			12,109				11,694				25,268				22,943
Non-interest Expenses:
Salaries and employee benefits			17,534				16,474				34,833				32,829
Occupancy expense of premises			3,173				3,274				6,662				6,746
Equipment expenses			1,490				1,262				2,863				2,518
Marketing			942				802				1,473				1,344
Outside data services			1,102				1,216				2,363				2,432
FDIC insurance			654				573				1,285				1,093
Amortization of intangible assets			106				224				213				594
Litigation expenses			162				6,128				362				6,128
Other expenses			4,314				4,188				8,667				8,006
Total non-interest expenses			29,477				34,141				58,721				61,690
Income before income taxes			15,347				9,704				32,038				25,978
Income tax expense			5,014				2,722				10,480				8,068
Net income		$	10,333			$	6,982			$	21,558			$	17,910
Net Income Per Share Amounts:
Basic net income per share		$	0.42			$	0.28			$	0.87			$	0.72
Diluted net income per share		$	0.42			$	0.28			$	0.87			$	0.71
Dividends declared per share		$	0.22			$	0.18			$	0.44			$	0.36

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

 

		2015								2014
(Dollars in thousands, except per share data)		Q2				Q1				Q4				Q3				Q2				Q1
Profitability for the Quarter:
Tax-equivalent interest income		$	40,438			$	39,343			$	39,258			$	38,446			$	38,322			$	37,532
Interest expense			4,916				4,699				4,748				4,730				4,682				4,658
Tax-equivalent net interest income			35,522				34,644				34,510				33,716				33,640				32,874
Tax-equivalent adjustment			1,589				1,271				1,283				1,296				1,331				1,282
Provision for loan and lease losses			1,218				597				853				(192	)			158				(982	)
Non-interest income			12,109				13,159				11,338				12,590				11,694				11,249
Non-interest expenses			29,477				29,244				30,478				28,632				34,141				27,549
Income before income taxes			15,347				16,691				13,234				16,570				9,704				16,274
Income tax expense			5,014				5,466				4,086				5,428				2,722				5,346
Net income		$	10,333			$	11,225			$	9,148			$	11,142			$	6,982			$	10,928
Financial Performance:
Pre-tax pre-provision income		$	16,727			$	17,488			$	14,242			$	16,614			$	15,990			$	15,292
Return on average assets			0.93	%			1.04	%			0.85	%			1.05	%			0.67	%			1.08	%
Return on average common equity			8.02	%			8.73	%			6.93	%			8.54	%			5.47	%			8.80	%
Net interest margin			3.42	%			3.44	%			3.44	%			3.42	%			3.48	%			3.47	%
Efficiency ratio - GAAP basis (1)			64.02	%			62.85	%			68.39	%			63.61	%			77.59	%			64.31	%
Efficiency ratio - Non-GAAP basis (1)			61.35	%			60.53	%			65.89	%			61.09	%			61.30	%			61.60	%
Per Share Data:
Basic net income per share		$	0.42			$	0.45			$	0.37			$	0.44			$	0.28			$	0.44
Diluted net income per share		$	0.42			$	0.45			$	0.36			$	0.44			$	0.28			$	0.43
Average fully diluted shares			24,689,762				25,048,576				25,151,831				25,151,582				25,127,036				25,124,206
Dividends declared per common share		$	0.22			$	0.22			$	0.20			$	0.20			$	0.18			$	0.18
Non-interest Income:
Securities gains (losses)		$	19			$	-			$	(3	)		$	8			$	-			$	-
Service charges on deposit accounts			1,839				1,882				2,135				2,226				2,089				1,972
Mortgage banking activities			822				1,178				512				596				570				316
Wealth management income			5,161				4,916				4,905				4,974				4,741				4,466
Insurance agency commissions			881				1,618				985				1,410				961				1,640
Income from bank owned life insurance			606				713				627				611				608				598
Bank card fees			1,220				1,057				1,144				1,148				1,169				978
Other income			1,561				1,795				1,033				1,617				1,556				1,279
Total Non-interest Income		$	12,109			$	13,159			$	11,338			$	12,590			$	11,694			$	11,249
Non-interest Expense:
Salaries and employee benefits		$	17,534			$	17,299			$	16,793			$	16,765			$	16,474			$	16,355
Occupancy expense of premises			3,173				3,489				3,914				3,032				3,274				3,472
Equipment expenses			1,490				1,373				1,333				1,337				1,262				1,256
Marketing			942				531				838				744				802				542
Outside data services			1,102				1,261				1,284				1,231				1,216				1,216
FDIC insurance			654				631				615				594				573				520
Amortization of intangible assets			106				107				112				115				224				370
Litigation expenses			162				200				155				236				6,128				-
Professional fees			1,199				1,209				1,246				1,092				1,292				914
Other real estate owned expenses			4				10				2				40				9				-
Other expenses			3,111				3,134				4,186				3,446				2,887				2,904
Total Non-interest Expense		$	29,477			$	29,244			$	30,478			$	28,632			$	34,141			$	27,549

 

(1)

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

 

		2015								2014
(Dollars in thousands)		Q2				Q1				Q4				Q3				Q2				Q1
Balance Sheets at Quarter End:
Residential mortgage loans		$	744,195			$	728,858			$	717,886			$	698,925			$	668,536			$	640,939
Residential construction loans			137,134				130,321				136,741				141,883				149,321				143,109
Commercial ADC loans			223,103				203,731				205,124				194,666				178,972				163,343
Commercial investor real estate loans			694,179				668,931				640,193				575,984				577,813				573,634
Commercial owner occupied real estate loans			643,973				618,846				611,061				584,964				581,795				582,472
Commercial business loans			409,795				385,452				390,781				368,611				357,472				348,180
Leasing			21				36				54				156				260				439
Consumer loans			436,465				428,531				425,552				410,723				396,775				380,697
Total loans and leases			3,288,865				3,164,706				3,127,392				2,975,912				2,910,944				2,832,813
Allowance for loan and lease losses			(38,713	)			(37,475	)			(37,802	)			(37,574	)			(37,959	)			(38,026	)
Loans held for sale			19,445				13,899				10,512				6,656				9,042				3,079
Investment securities			878,284				912,565				933,619				950,869				980,530				997,584
Interest-earning assets			4,222,667				4,125,549				4,114,936				3,976,731				3,945,643				3,891,223
Total assets			4,507,367				4,401,380				4,397,132				4,248,731				4,234,342				4,168,998
Noninterest-bearing demand deposits			1,092,413				1,017,566				993,737				986,549				984,700				882,169
Total deposits			3,247,346				3,109,892				3,066,509				3,028,788				3,038,670				2,959,195
Customer repurchase agreements			111,817				101,640				74,432				71,384				72,917				67,038
Total interest-bearing liabilities			2,851,750				2,818,966				2,837,204				2,706,623				2,698,887				2,748,064
Total stockholders' equity			518,873				521,768				521,751				522,404				517,269				510,386
Quarterly Average Balance Sheets:
Residential mortgage loans		$	734,382			$	724,248			$	707,719			$	682,013			$	652,232			$	627,944
Residential construction loans			137,216				132,456				141,890				147,750				145,968				134,261
Commercial ADC loans			218,341				206,105				201,020				180,293				168,063				162,544
Commercial investor real estate loans			668,883				645,163				607,050				577,851				575,283				557,168
Commercial owner occupied real estate loans			624,407				611,722				594,634				585,014				579,953				584,155
Commercial business loans			398,510				383,111				367,872				367,203				348,597				349,734
Leasing			28				44				114				206				352				567
Consumer loans			434,011				425,434				417,910				404,062				390,076				377,822
Total loans and leases			3,215,778				3,128,283				3,038,209				2,944,392				2,860,524				2,794,195
Loans held for sale			14,075				7,053				9,952				7,518				6,940				5,216
Investment securities			898,237				925,683				942,782				965,206				991,135				1,012,701
Interest-earning assets			4,162,963				4,097,648				4,022,051				3,954,858				3,893,843				3,845,513
Total assets			4,438,670				4,372,988				4,292,237				4,220,084				4,157,559				4,105,225
Noninterest-bearing demand deposits			1,023,042				986,688				1,000,285				956,830				899,287				825,968
Total deposits			3,128,562				3,056,186				3,063,591				3,036,686				2,965,329				2,876,641
Customer repurchase agreements			106,179				90,020				78,746				73,046				68,880				62,864
Total interest-bearing liabilities			2,852,414				2,817,575				2,731,791				2,711,206				2,716,537				2,749,459
Total stockholders' equity			516,940				521,346				524,063				517,534				511,738				503,851
Financial Measures:
Average equity to average assets			11.65	%			11.92	%			12.21	%			12.26	%			12.31	%			12.27	%
Investment securities to earning assets			20.80	%			22.12	%			22.69	%			23.91	%			24.85	%			25.64	%
Loans to earning assets			77.89	%			76.71	%			76.00	%			74.83	%			73.78	%			72.80	%
Loans to assets			72.97	%			71.90	%			71.12	%			70.04	%			68.75	%			67.95	%
Loans to deposits			101.28	%			101.76	%			101.99	%			98.25	%			95.80	%			95.73	%
Capital Measures:
Tier 1 leverage  (1)			10.83	%			11.00	%			11.26	%			11.36	%			11.37	%			11.43	%
Tier 1 capital to risk-weighted assets  (1)			13.54	%			14.01	%			13.95	%			14.52	%			14.48	%			14.64	%
Total regulatory capital to risk-weighted assets  (1)			14.65	%			15.12	%			15.06	%			15.68	%			15.66	%			15.85	%
Common equity tier 1 capital to risk-weighted assets   (1)			12.53	%			14.01	%			n.a.				n.a.				n.a.				n.a.
Book value per share		$	21.12			$	21.10			$	20.83			$	20.83			$	20.63			$	20.38
Outstanding shares			24,562,471				24,733,868				25,044,877				25,076,794				25,069,700				25,043,482

 

(1)

Estimated ratio at June 30, 2015

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

 

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

		Three Months Ended June 30,
		2015												2014
										Annualized												Annualized
		Average				(1)				Average				Average				(1)				Average
(Dollars in thousands and tax-equivalent)		Balances				Interest				Yield/Rate				Balances				Interest				Yield/Rate
Assets
Residential mortgage loans		$	734,382			$	6,155				3.35	%		$	652,232			$	5,614				3.44	%
Residential construction loans			137,216				1,268				3.71				145,968				1,359				3.73
Commercial ADC loans			218,341				2,525				4.64				168,063				2,180				5.20
Commercial investor real estate loans			668,883				7,771				4.66				575,283				7,139				4.98
Commercial owner occupied real estate loans			624,407				7,669				4.93				579,953				7,146				5.09
Commercial business loans			398,510				4,369				4.40				348,597				4,054				4.69
Leasing			28				-				1.49				352				6				6.30
Consumer loans			434,011				3,606				3.35				390,076				3,208				3.32
Total loans and leases (2)			3,215,778				33,363				4.16				2,860,524				30,706				4.34
Loans held for sale			14,075				132				3.76				6,940				71				4.12
Taxable securities			606,581				3,786				2.50				688,793				4,263				2.48
Tax-exempt securities (3)			291,656				3,135				4.30				302,342				3,260				4.32
Interest-bearing deposits with banks			34,400				22				0.25				34,770				22				0.25
Federal funds sold			473				-				0.22				474				-				0.22
Total interest-earning assets			4,162,963				40,438				3.89				3,893,843				38,322				3.97
Less:  allowance for loan and lease losses			(38,217	)											(38,342	)
Cash and due from banks			46,894												44,987
Premises and equipment, net			51,591												45,696
Other assets			215,439												211,375
Total assets		$	4,438,670											$	4,157,559
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	527,307				101				0.08	%		$	477,018				102				0.09	%
Regular savings deposits			278,199				37				0.05				262,078				49				0.07
Money market savings deposits			833,382				317				0.15				865,134				273				0.13
Time deposits			466,632				912				0.78				461,812				769				0.67
Total interest-bearing deposits			2,105,520				1,367				0.26				2,066,042				1,193				0.23
Other borrowings			106,180				60				0.23				68,880				37				0.22
Advances from FHLB			605,714				3,266				2.16				546,615				3,233				2.37
Subordinated debentures			35,000				223				2.55				35,000				219				2.50
Total interest-bearing liabilities			2,852,414				4,916				0.69				2,716,537				4,682				0.69
Noninterest-bearing demand deposits			1,023,042												899,287
Other liabilities			46,274												29,997
Stockholders' equity			516,940												511,738
Total liabilities and stockholders' equity		$	4,438,670											$	4,157,559
Net interest income and spread						$	35,522				3.20	%						$	33,640				3.28	%
Less: tax-equivalent adjustment							1,589												1,331
Net interest income						$	33,933											$	32,309
Interest income/earning assets											3.89	%											3.97	%
Interest expense/earning assets											0.47												0.49
Net interest margin											3.42	%											3.48	%

 

(1)

Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and  2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.6 million and $1.3 million in 2015 and 2014, respectively.

(2)

Non-accrual loans are included in the average balances.

(3)

Includes only investments that are exempt from federal taxes.

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

		Six Months Ended June 30,
		2015												2014
										Annualized												Annualized
		Average				(1)				Average				Average				(1)				Average
(Dollars in thousands and tax-equivalent)		Balances				Interest				Yield/Rate				Balances				Interest				Yield/Rate
Assets
Residential mortgage loans		$	729,343			$	12,279				3.37	%		$	640,155			$	11,061				3.46	%
Residential construction loans			134,849				2,489				3.72				140,147				2,612				3.76
Commercial ADC loans			212,257				4,862				4.62				165,319				4,253				5.19
Commercial investor real estate loans			657,088				15,350				4.71				566,275				13,872				4.94
Commercial owner occupied real estate loans			618,100				15,200				4.96				582,042				14,213				5.08
Commercial business loans			390,853				8,507				4.39				349,162				8,091				4.67
Leasing			36				1				3.76				459				12				5.22
Consumer loans			429,746				7,106				3.35				383,983				6,326				3.34
Total loans and leases (2)			3,172,272				65,794				4.18				2,827,542				60,440				4.34
Loans held for sale			10,583				208				3.94				6,083				130				4.28
Taxable securities			617,861				7,722				2.50				699,460				8,715				2.49
Tax-exempt securities (3)			294,024				6,305				4.29				302,398				6,527				4.32
Interest-bearing deposits with banks			35,273				44				0.25				33,853				42				0.25
Federal funds sold			473				1				0.22				475				-				0.22
Total interest-earning assets			4,130,486				80,074				3.90				3,869,811				75,854				3.96
Less:  allowance for loan and lease losses			(37,833	)											(38,864	)
Cash and due from banks			46,663												45,268
Premises and equipment, net			51,127												45,787
Other assets			215,567												209,535
Total assets		$	4,406,010											$	4,131,537
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	525,692				207				0.08	%		$	468,677				194				0.08	%
Regular savings deposits			274,220				71				0.05				255,667				97				0.08
Money market savings deposits			832,549				590				0.14				871,464				546				0.13
Time deposits			455,147				1,693				0.75				462,591				1,540				0.67
Total interest-bearing deposits			2,087,608				2,561				0.25				2,058,399				2,377				0.23
Other borrowings			98,228				110				0.23				65,889				75				0.23
Advances from FHLB			614,254				6,502				2.13				573,619				6,451				2.27
Subordinated debentures			35,000				442				2.53				35,000				437				2.50
Total interest-bearing liabilities			2,835,090				9,615				0.68				2,732,907				9,340				0.69
Noninterest-bearing demand deposits			1,004,965												862,830
Other liabilities			46,824												27,984
Stockholders' equity			519,131												507,816
Total liabilities and stockholders' equity		$	4,406,010											$	4,131,537
Net interest income and spread						$	70,459				3.22	%						$	66,514				3.27	%
Less: tax-equivalent adjustment							3,153												2,613
Net interest income						$	67,306											$	63,901
Interest income/earning assets											3.90	%											3.96	%
Interest expense/earning assets											0.47												0.48
Net interest margin											3.43	%											3.48	%

 

(1)

Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and  2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $3.2 million and $2.6 million in 2015 and 2014, respectively.

(2)

Non-accrual loans are included in the average balances.

(3)

Includes only investments that are exempt from federal taxes.