Exhibit 99.1

 

 

News release

 

 

 

FOR IMMEDIATE RELEASE

 

SANDY SPRING BANCORP REPORTS NET INCOME OF $11.0 MILLION FOR THE THIRD QUARTER

 

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

 

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

 

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

 

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

 

Third Quarter Highlights:

 

·

Total loans increased 15% compared to the third quarter of 2014 and were up 4% compared to the second quarter of 2015. This increase was driven primarily by year-over-year growth of 19% in the commercial loan portfolio.

 

·

Combined noninterest-bearing and interest-bearing transaction account balances increased 9% to $1.6 billion at September 30, 2015 as compared to $1.5 billion at September 30, 2014.

 

·

The provision for loan and lease losses for the third quarter of 2015 was a charge of $1.7 million compared to a credit of $0.2 million for the third quarter of 2014 and a charge of $1.2 million for the second quarter of 2015.

 

·

The net interest margin was 3.43% for the third quarter of 2015, compared to 3.42% for both the third quarter of 2014 and the second quarter of 2015.

 

 

·

The non-GAAP efficiency ratio improved to 59.73% for the current quarter from 61.09% for the prior year quarter due to stable expense levels and higher net interest income resulting from strong loan growth over the prior year quarter.

 

·

During the third quarter of 2015, the Company repurchased 153,460 shares of its common stock at an average price of $25.76 per share as part of its existing share repurchase program. For the year-to-date, the Company has repurchased 728,932 shares at an average price of $25.88 per share.

 

Review of Balance Sheet and Credit Quality

 

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

 

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

 

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

 

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

 

Loan charge-offs, net of recoveries, totaled $0.8 million for the third quarter of 2015, compared to net loan charge-offs of $0.2 million for the third quarter of 2014. The allowance for loan and lease losses represented 1.16% of outstanding loans and leases and 107% of non-performing loans at September 30, 2015 compared to 1.26% of outstanding loans and leases and 86% of non-performing loans at September 30, 2014. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

 

 

 

Income Statement Review

 

Net interest income for the third quarter of 2015 increased 8% compared to the third quarter of 2014. The net interest margin was 3.43% for the third quarter of 2015 compared to 3.42% for the third quarter of 2014.

 

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

 

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

 

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

 

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

 

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

 

Non-interest income increased 6% to $37.7 million for the first nine months of 2015 compared to $35.5 million for the first nine months of 2014. This increase was driven by increases in income from wealth management and mortgage banking due primarily to higher mortgage origination volumes. Other non-interest income increased due to higher gains on sales of SBA loans.

 

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

 

Conference Call

 

The Company’s management will host a conference call to discuss its third quarter results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations’ section of the Sandy Spring Web site at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available at the Web site until 9:00 am (ET) November 6, 2015. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10072996.

 

 

About Sandy Spring Bancorp, Inc.

 

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring 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 investment management services. With $4.6 billion in assets, the bank operates 44 community offices and six financial centers across the region. Visit www.sandyspringbank.com for more information.

 

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

 

Forward-Looking Statements

 

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

 

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

 

 

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

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS - UNAUDITED

 

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

  

(1)

The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income.

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

(2)

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

(3)

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

(4)

Estimated ratio at September 30, 2015

  

 

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

 

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED

 

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(Dollars in thousands, except per share data)		2015				2014				2015				2014
Interest Income:
Interest and fees on loans and leases		$	34,484			$	31,030			$	99,654			$	91,470
Interest on loans held for sale			214				81				422				211
Interest on deposits with banks			25				24				69				66
Interest and dividends on investment securities:
Taxable			3,597				3,712				11,024				11,704
Exempt from federal income taxes			1,996				2,303				6,068				6,940
Interest on federal funds sold			1				-				1				-
Total interest income			40,317				37,150				117,238				110,391
Interest Expense:
Interest on deposits			1,632				1,208				4,193				3,585
Interest on retail repurchase agreements and federal funds purchased			69				42				179				117
Interest on advances from FHLB			3,272				3,258				9,774				9,709
Interest on subordinated debt			228				222				670				659
Total interest expense			5,201				4,730				14,816				14,070
Net interest income			35,116				32,420				102,422				96,321
Provision (credit) for loan and lease losses			1,706				(192	)			3,521				(1,016	)
Net interest income after provision (credit) for loan and lease losses			33,410				32,612				98,901				97,337
Non-interest Income:
Investment securities gains			1				8				20				8
Service charges on deposit accounts			1,936				2,226				5,657				6,287
Mortgage banking activities			566				596				2,566				1,482
Wealth management income			4,963				4,974				15,040				14,181
Insurance agency commissions			1,648				1,410				4,147				4,011
Income from bank owned life insurance			618				611				1,937				1,817
Bank card fees			1,198				1,148				3,475				3,295
Other income			1,460				1,617				4,816				4,452
Total non-interest income			12,390				12,590				37,658				35,533
Non-interest Expenses:
Salaries and employee benefits			17,733				16,765				52,566				49,594
Occupancy expense of premises			3,086				3,032				9,748				9,778
Equipment expenses			1,600				1,337				4,463				3,855
Marketing			688				744				2,161				2,088
Outside data services			1,329				1,231				3,692				3,663
FDIC insurance			565				594				1,850				1,687
Amortization of intangible assets			107				115				320				709
Litigation expenses			155				236				517				6,364
Other expenses			4,367				4,578				13,034				12,584
Total non-interest expenses			29,630				28,632				88,351				90,322
Income before income taxes			16,170				16,570				48,208				42,548
Income tax expense			5,175				5,428				15,655				13,496
Net income		$	10,995			$	11,142			$	32,553			$	29,052
Net Income Per Share Amounts:
Basic net income per share		$	0.45			$	0.44			$	1.32			$	1.16
Diluted net income per share		$	0.45			$	0.44			$	1.31			$	1.16
Dividends declared per share		$	0.22			$	0.20			$	0.66			$	0.56

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

 

		2015												2014
(Dollars in thousands, except per share data)		Q3				Q2				Q1				Q4				Q3				Q2				Q1
Profitability for the Quarter:
Tax-equivalent interest income		$	41,980			$	40,438			$	39,343			$	39,258			$	38,446			$	38,322			$	37,532
Interest expense			5,201				4,916				4,699				4,748				4,730				4,682				4,658
Tax-equivalent net interest income			36,779				35,522				34,644				34,510				33,716				33,640				32,874
Tax-equivalent adjustment			1,663				1,589				1,271				1,283				1,296				1,331				1,282
Provision for loan and lease losses			1,706				1,218				597				853				(192	)			158				(982	)
Non-interest income			12,390				12,109				13,159				11,338				12,590				11,694				11,249
Non-interest expenses			29,630				29,477				29,244				30,478				28,632				34,141				27,549
Income before income taxes			16,170				15,347				16,691				13,234				16,570				9,704				16,274
Income tax expense			5,175				5,014				5,466				4,086				5,428				2,722				5,346
Net income		$	10,995			$	10,333			$	11,225			$	9,148			$	11,142			$	6,982			$	10,928
Financial Performance:
Pre-tax pre-provision income		$	18,031			$	16,727			$	17,488			$	14,242			$	16,614			$	15,990			$	15,292
Return on average assets			0.96	%			0.93	%			1.04	%			0.85	%			1.05	%			0.67	%			1.08	%
Return on average common equity			8.41	%			8.02	%			8.73	%			6.93	%			8.54	%			5.47	%			8.80	%
Net interest margin			3.43	%			3.42	%			3.44	%			3.44	%			3.42	%			3.48	%			3.47	%
Efficiency ratio - GAAP basis (1)			62.37	%			64.02	%			62.85	%			68.39	%			63.61	%			77.59	%			64.31	%
Efficiency ratio - Non-GAAP basis (1)			59.73	%			61.35	%			60.53	%			65.89	%			61.09	%			61.30	%			61.60	%
Per Share Data:
Basic net income per share		$	0.45			$	0.42			$	0.45			$	0.37			$	0.44			$	0.28			$	0.44
Diluted net income per share		$	0.45			$	0.42			$	0.45			$	0.36			$	0.44			$	0.28			$	0.43
Average fully diluted shares			24,602,817				24,689,762				25,048,576				25,151,831				25,151,582				25,127,036				25,124,206
Dividends declared per common share		$	0.22			$	0.22			$	0.22			$	0.20			$	0.20			$	0.18			$	0.18
Non-interest Income:
Securities gains (losses)		$	1			$	19			$	-			$	(3	)		$	8			$	-			$	-
Service charges on deposit accounts			1,936				1,839				1,882				2,135				2,226				2,089				1,972
Mortgage banking activities			566				822				1,178				512				596				570				316
Wealth management income			4,963				5,161				4,916				4,905				4,974				4,741				4,466
Insurance agency commissions			1,648				881				1,618				985				1,410				961				1,640
Income from bank owned life insurance			618				606				713				627				611				608				598
Bank card fees			1,198				1,220				1,057				1,144				1,148				1,169				978
Other income			1,460				1,561				1,795				1,033				1,617				1,556				1,279
Total Non-interest Income		$	12,390			$	12,109			$	13,159			$	11,338			$	12,590			$	11,694			$	11,249
Non-interest Expense:
Salaries and employee benefits		$	17,733			$	17,534			$	17,299			$	16,793			$	16,765			$	16,474			$	16,355
Occupancy expense of premises			3,086				3,173				3,489				3,914				3,032				3,274				3,472
Equipment expenses			1,600				1,490				1,373				1,333				1,337				1,262				1,256
Marketing			688				942				531				838				744				802				542
Outside data services			1,329				1,102				1,261				1,284				1,231				1,216				1,216
FDIC insurance			565				654				631				615				594				573				520
Amortization of intangible assets			107				106				107				112				115				224				370
Litigation expenses			155				162				200				155				236				6,128				-
Professional fees			1,089				1,199				1,209				1,246				1,092				1,292				914
Other real estate owned expenses			48				4				10				2				40				9				-
Other expenses			3,230				3,111				3,134				4,186				3,446				2,887				2,904
Total Non-interest Expense		$	29,630			$	29,477			$	29,244			$	30,478			$	28,632			$	34,141			$	27,549

 

(1)

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

  

 

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

 

		2015												2014
(Dollars in thousands)		Q3				Q2				Q1				Q4				Q3				Q2				Q1
Balance Sheets at Quarter End:
Residential mortgage loans		$	773,889			$	744,195			$	728,858			$	717,886			$	698,925			$	668,536			$	640,939
Residential construction loans			139,492				137,134				130,321				136,741				141,883				149,321				143,109
Commercial ADC loans			239,160				223,103				203,731				205,124				194,666				178,972				163,343
Commercial investor real estate loans			710,694				694,179				668,931				640,193				575,984				577,813				573,634
Commercial owner occupied real estate loans			680,601				643,973				618,846				611,061				584,964				581,795				582,472
Commercial business loans			423,855				409,795				385,452				390,781				368,611				357,472				348,180
Leasing			19				21				36				54				156				260				439
Consumer loans			444,729				436,465				428,531				425,552				410,723				396,775				380,697
Total loans and leases			3,412,439				3,288,865				3,164,706				3,127,392				2,975,912				2,910,944				2,832,813
Allowance for loan and lease losses			(39,661	)			(38,713	)			(37,475	)			(37,802	)			(37,574	)			(37,959	)			(38,026	)
Loans held for sale			10,418				19,445				13,899				10,512				6,656				9,042				3,079
Investment securities			862,409				878,284				912,565				933,619				950,869				980,530				997,584
Interest-earning assets			4,339,375				4,222,667				4,125,549				4,114,936				3,976,731				3,945,643				3,891,223
Total assets			4,611,034				4,507,367				4,401,380				4,397,132				4,248,731				4,234,342				4,168,998
Noninterest-bearing demand deposits			1,068,299				1,092,413				1,017,566				993,737				986,549				984,700				882,169
Total deposits			3,275,668				3,247,346				3,109,892				3,066,509				3,028,788				3,038,670				2,959,195
Customer repurchase agreements			121,378				111,817				101,640				74,432				71,384				72,917				67,038
Total interest-bearing liabilities			2,973,747				2,851,750				2,818,966				2,837,204				2,706,623				2,698,887				2,748,064
Total stockholders' equity			523,594				518,873				521,768				521,751				522,404				517,269				510,386
Quarterly Average Balance Sheets:
Residential mortgage loans		$	754,007			$	734,382			$	724,248			$	707,719			$	682,013			$	652,232			$	627,944
Residential construction loans			134,448				137,216				132,456				141,890				147,750				145,968				134,261
Commercial ADC loans			227,545				218,341				206,105				201,020				180,293				168,063				162,544
Commercial investor real estate loans			704,068				668,883				645,163				607,050				577,851				575,283				557,168
Commercial owner occupied real estate loans			656,337				624,407				611,722				594,634				585,014				579,953				584,155
Commercial business loans			413,300				398,510				383,111				367,872				367,203				348,597				349,734
Leasing			19				28				44				114				206				352				567
Consumer loans			441,740				434,011				425,434				417,910				404,062				390,076				377,822
Total loans and leases			3,331,464				3,215,778				3,128,283				3,038,209				2,944,392				2,860,524				2,794,195
Loans held for sale			21,070				14,075				7,053				9,952				7,518				6,940				5,216
Investment securities			869,461				898,237				925,683				942,782				965,206				991,135				1,012,701
Interest-earning assets			4,261,939				4,162,963				4,097,648				4,022,051				3,954,858				3,893,843				3,845,513
Total assets			4,537,142				4,438,670				4,372,988				4,292,237				4,220,084				4,157,559				4,105,225
Noninterest-bearing demand deposits			1,063,500				1,023,042				986,688				1,000,285				956,830				899,287				825,968
Total deposits			3,263,993				3,128,562				3,056,186				3,063,591				3,036,686				2,965,329				2,876,641
Customer repurchase agreements			121,127				106,179				90,020				78,746				73,046				68,880				62,864
Total interest-bearing liabilities			2,906,348				2,852,414				2,817,575				2,731,791				2,711,206				2,716,537				2,749,459
Total stockholders' equity			518,619				516,940				521,346				524,063				517,534				511,738				503,851
Financial Measures:
Average equity to average assets			11.43	%			11.65	%			11.92	%			12.21	%			12.26	%			12.31	%			12.27	%
Investment securities to earning assets			19.87	%			20.80	%			22.12	%			22.69	%			23.91	%			24.85	%			25.64	%
Loans to earning assets			78.64	%			77.89	%			76.71	%			76.00	%			74.83	%			73.78	%			72.80	%
Loans to assets			74.01	%			72.97	%			71.90	%			71.12	%			70.04	%			68.75	%			67.95	%
Loans to deposits			104.18	%			101.28	%			101.76	%			101.99	%			98.25	%			95.80	%			95.73	%
Capital Measures:
Tier 1 leverage  (1)			10.65	%			10.83	%			11.00	%			11.26	%			11.36	%			11.37	%			11.43	%
Tier 1 capital to risk-weighted assets  (1)			13.17	%			13.54	%			14.01	%			13.95	%			14.52	%			14.48	%			14.64	%
Total regulatory capital to risk-weighted assets  (1)			14.27	%			14.65	%			15.12	%			15.06	%			15.68	%			15.66	%			15.85	%
Common equity tier 1 capital to risk-weighted assets   (1)			12.20	%			12.53	%			14.01	%			n.a.				n.a.				n.a.				n.a.
Book value per share		$	21.44			$	21.12			$	21.10			$	20.83			$	20.83			$	20.63			$	20.38
Outstanding shares			24,424,944				24,562,471				24,733,868				25,044,877				25,076,794				25,069,700				25,043,482

 

(1)

Estimated ratio at September 30, 2015

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

 

		2015												2014
(Dollars in thousands)		September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
Non-Performing Assets:
Loans and leases 90 days past due:
Commercial business		$	-			$	-			$	-			$	-			$	-			$	1			$	-
Commercial real estate:
Commercial AD&C			-				-				-				-				-				-				-
Commercial investor real estate			-				-				-				-				-				-				-
Commercial owner occupied real estate			-				-				-				-				649				-				-
Leasing			1				2				-				-				-				-				-
Consumer			-				7				-				-				6				3				-
Residential real estate:
Residential mortgage			-				-				-				-				-				-				-
Residential construction			-				-				-				-				-				-				-
Total loans and leases 90 days past due			1				9				-				-				655				4				-
Non-accrual loans and leases:
Commercial business			3,881				3,285				4,166				3,184				4,151				4,309				3,272
Commercial real estate:
Commercial AD&C			194				194				1,363				2,464				3,792				3,739				4,133
Commercial investor real estate			8,609				10,023				10,083				8,156				8,210				6,731				7,284
Commercial owner occupied real estate			7,932				8,423				8,974				8,941				10,742				10,868				7,150
Leasing			-				-				-				-				-				-				-
Consumer			1,621				1,214				1,962				1,668				1,830				2,058				2,115
Residential real estate:
Residential mortgage			7,488				7,780				3,235				3,012				4,417				4,501				5,025
Residential construction			770				780				788				1,105				2,497				2,143				2,304
Total non-accrual loans and leases			30,495				31,699				30,571				28,530				35,639				34,349				31,283
Total restructured loans - accruing			6,419				5,620				5,446				5,497				7,382				7,364				7,411
Total non-performing loans and leases			36,915				37,328				36,017				34,027				43,676				41,717				38,694
Other assets and real estate owned (OREO)			2,619				4,514				3,227				3,195				1,762				1,967				1,619
Total non-performing assets		$	39,534			$	41,842			$	39,244			$	37,222			$	45,438			$	43,684			$	40,313

 

		For the quarter ended,
		September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2015				2015				2015				2014				2014				2014				2014
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period		$	31,699			$	30,571			$	28,530			$	35,639			$	34,349			$	31,283			$	30,574
Non-accrual balances transferred to OREO			(180	)			(1,309	)			(32	)			(1,475	)			(300	)			(390	)			(281	)
Non-accrual balances charged-off			(752	)			(549	)			(1,077	)			(1,033	)			(216	)			(357	)			(513	)
Net payments or draws			(1,846	)			(2,970	)			(1,067	)			(4,139	)			(590	)			(1,580	)			(1,073	)
Loans placed on non-accrual			1,574				5,956				4,217				779				2,396				5,393				2,576
Non-accrual loans brought current			-				-				-				(1,241	)			-				-				-
Balance at end of period		$	30,495			$	31,699			$	30,571			$	28,530			$	35,639			$	34,349			$	31,283
Analysis of Allowance for Loan Losses:
Balance at beginning of period		$	38,713			$	37,475			$	37,802			$	37,574			$	37,959			$	38,026			$	38,766
Provision (credit) for loan and lease losses			1,706				1,218				597				853				(192	)			158				(982	)
Less loans charged-off, net of recoveries:
Commercial business			(25	)			73				(89	)			50				(58	)			28				(768	)
Commercial real estate:
Commercial AD&C			-				(547	)			706				529				-				-				-
Commercial investor real estate			(5	)			85				(5	)			(5	)			(2	)			(23	)			(5	)
Commercial owner occupied real estate			104				(1	)			212				(6	)			-				265				-
Leasing			-				-				-				-				-				-				-
Consumer			348				395				43				83				244				11				331
Residential real estate:
Residential mortgage			342				(18	)			65				(17	)			43				(27	)			203
Residential construction			(6	)			(7	)			(8	)			(9	)			(34	)			(29	)			(3	)
Net charge-offs			758				(20	)			924				625				193				225				(242	)
Balance at end of period		$	39,661			$	38,713			$	37,475			$	37,802			$	37,574			$	37,959			$	38,026
Asset Quality Ratios:
Non-performing loans to total loans			1.08	%			1.13	%			1.14	%			1.09	%			1.47	%			1.43	%			1.37	%
Non-performing assets to total assets			0.86	%			0.93	%			0.89	%			0.85	%			1.07	%			1.03	%			0.97	%
Allowance for loan losses to loans			1.16	%			1.18	%			1.18	%			1.21	%			1.26	%			1.30	%			1.34	%
Allowance for loan losses to non-performing loans			107.44	%			103.71	%			104.05	%			111.09	%			86.03	%			90.99	%			98.27	%
Annualized net charge-offs to average loans			0.09	%			0.00	%			0.12	%			0.08	%			0.03	%			0.03	%			(0.04	)%

  

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

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

 

(1)

Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and 2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.7 million and $1.3 million in 2015 and 2014, respectively.

(2)

Non-accrual loans are included in the average balances.

(3)

Includes only investments that are exempt from federal taxes.

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

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

 

(1)

Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and 2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.8 million and $3.9 million in 2015 and 2014, respectively.

(2)

Non-accrual loans are included in the average balances.

(3)

Includes only investments that are exempt from federal taxes.