Exhibit 99.1

 

News release

 

 

 

FOR IMMEDIATE RELEASE

 

SANDY SPRING BANCORP REPORTS NET INCOME OF $12.8 MILLION FOR THE FOURTH QUARTER AND $45.4 MILLION FOR THE FULL YEAR

 

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

 

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

 

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

 

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

 

Fourth Quarter Highlights:

 

·

Total loans increased 12% compared to the fourth quarter of 2014 and were up 2% compared to the third quarter of 2015. All three major portfolio segments experienced strong growth over the prior year. These increases were driven primarily by year-over-year growth of 15% in the commercial loan portfolio.

 

·

Combined noninterest-bearing and interest-bearing checking account balances increased 3% to $1.6 billion at December 31, 2015 as compared to $1.5 billion at December 31, 2014.

 

 

·

The provision for loan and lease losses for the fourth quarter of 2015 was a charge of $1.9 million compared to a charge of $0.9 million for the fourth quarter of 2014 and a charge of $1.7 million for the third quarter of 2015. The provision was driven by our solid loan growth.

 

·

The net interest margin was 3.45% for the fourth quarter of 2015, compared to 3.44% for the fourth quarter of 2014 and 3.43% for the third quarter of 2015.

 

·

The non-GAAP efficiency ratio improved to 63.08% for the current quarter from 65.89% for the prior year quarter due primarily to the recapture of $4.5 million of previously accrued litigation expenses. This credit was somewhat offset by a charitable contribution of $1 million to the Sandy Spring Bank Foundation in the quarter.

 

·

During the fourth quarter of 2015, the Company repurchased 141,518 shares of its common stock at an average price of $26.53 per share as part of its existing share repurchase program. For the year-to-date, the Company repurchased 870,450 shares at an average price of $25.99 per share.

 

Review of Balance Sheet and Credit Quality

 

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

 

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

 

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

 

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

 

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

 

 

Income Statement Review

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Conference Call

 

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

 

About Sandy Spring Bancorp, Inc.

 

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring Bank offers a broad range of commercial banking, retail banking, mortgage and trust services throughout central Maryland, Northern Virginia, and the greater Washington, D.C. market. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. With $4.7 billion in assets, the bank operates 44 community offices and six financial centers across the region. Visit www.sandyspringbank.com for more information.

 

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

 

(1)

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

(2)

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

(3)

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

(4)

Estimated ratio at December 31, 2015

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

 

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED

 

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

 

		2015																2014
(Dollars in thousands, except per share data)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Profitability for the Quarter:
Tax-equivalent interest income		$	42,736			$	41,980			$	40,438			$	39,343			$	39,258			$	38,446			$	38,322			$	37,532
Interest expense			5,297				5,201				4,916				4,699				4,748				4,730				4,682				4,658
Tax-equivalent net interest income			37,439				36,779				35,522				34,644				34,510				33,716				33,640				32,874
Tax-equivalent adjustment			1,662				1,663				1,589				1,271				1,283				1,296				1,331				1,282
Provision for loan and lease losses			1,850				1,706				1,218				597				853				(192	)			158				(982	)
Non-interest income			12,243				12,390				12,109				13,159				11,338				12,590				11,694				11,249
Non-interest expenses			26,996				29,630				29,477				29,244				30,478				28,632				34,141				27,549
Income before income taxes			19,174				16,170				15,347				16,691				13,234				16,570				9,704				16,274
Income tax expense			6,372				5,175				5,014				5,466				4,086				5,428				2,722				5,346
Net income		$	12,802			$	10,995			$	10,333			$	11,225			$	9,148			$	11,142			$	6,982			$	10,928
Financial Performance:
Pre-tax pre-provision income		$	16,638			$	18,031			$	16,727			$	17,488			$	14,242			$	16,614			$	15,990			$	15,292
Return on average assets			1.11	%			0.96	%			0.93	%			1.04	%			0.85	%			1.05	%			0.67	%			1.08	%
Return on average common equity			9.73	%			8.41	%			8.02	%			8.73	%			6.93	%			8.54	%			5.47	%			8.80	%
Net interest margin			3.45	%			3.43	%			3.42	%			3.44	%			3.44	%			3.42	%			3.48	%			3.47	%
Efficiency ratio - GAAP basis (1)			56.22	%			62.37	%			64.02	%			62.85	%			68.39	%			63.61	%			77.59	%			64.31	%
Efficiency ratio - Non-GAAP basis (1)			63.08	%			59.73	%			61.35	%			60.53	%			65.89	%			61.09	%			61.30	%			61.60	%
Per Share Data:
Basic net income per share		$	0.53			$	0.45			$	0.42			$	0.45			$	0.37			$	0.44			$	0.28			$	0.44
Diluted net income per share		$	0.52			$	0.45			$	0.42			$	0.45			$	0.36			$	0.44			$	0.28			$	0.43
Average fully diluted shares			24,455,847				24,602,817				24,689,762				25,048,576				25,151,831				25,151,582				25,127,036				25,124,206
Dividends declared per common share		$	0.24			$	0.22			$	0.22			$	0.22			$	0.20			$	0.20			$	0.18			$	0.18
Non-interest Income:
Securities gains (losses)		$	16			$	1			$	19			$	-			$	(3	)		$	8			$	-			$	-
Service charges on deposit accounts			1,950				1,936				1,839				1,882				2,135				2,226				2,089				1,972
Mortgage banking activities			548				566				822				1,178				512				596				570				316
Wealth management income			4,891				4,963				5,161				4,916				4,905				4,974				4,741				4,466
Insurance agency commissions			1,029				1,648				881				1,618				985				1,410				961				1,640
Income from bank owned life insurance			634				618				606				713				627				611				608				598
Bank card fees			1,177				1,198				1,220				1,057				1,144				1,148				1,169				978
Other income			1,998				1,460				1,561				1,795				1,033				1,617				1,556				1,279
Total Non-interest Income		$	12,243			$	12,390			$	12,109			$	13,159			$	11,338			$	12,590			$	11,694			$	11,249
Non-interest Expense:
Salaries and employee benefits		$	18,437			$	17,733			$	17,534			$	17,299			$	16,793			$	16,765			$	16,474			$	16,355
Occupancy expense of premises			3,061				3,086				3,173				3,489				3,914				3,032				3,274				3,472
Equipment expenses			1,608				1,600				1,490				1,373				1,333				1,337				1,262				1,256
Marketing			735				688				942				531				838				744				802				542
Outside data services			1,331				1,329				1,102				1,261				1,284				1,231				1,216				1,216
FDIC insurance			641				565				654				631				615				594				573				520
Amortization of intangible assets			52				107				106				107				112				115				224				370
Litigation expenses			(4,386	)			155				162				200				155				236				6,128				-
Professional fees			1,322				1,089				1,199				1,209				1,246				1,092				1,292				914
Other real estate owned expenses			14				48				4				10				2				40				9				-
Other expenses			4,181				3,230				3,111				3,134				4,186				3,446				2,887				2,904
Total Non-interest Expense		$	26,996			$	29,630			$	29,477			$	29,244			$	30,478			$	28,632			$	34,141			$	27,549

 

(1)

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

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

 

		2015																2014
(Dollars in thousands)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Balance Sheets at Quarter End:
Residential mortgage loans		$	796,358			$	773,889			$	744,195			$	728,858			$	717,886			$	698,925			$	668,536			$	640,939
Residential construction loans			129,281				139,492				137,134				130,321				136,741				141,883				149,321				143,109
Commercial ADC loans			255,980				239,160				223,103				203,731				205,124				194,666				178,972				163,343
Commercial investor real estate loans			719,084				710,694				694,179				668,931				640,193				575,984				577,813				573,634
Commercial owner occupied real estate loans			678,027				680,601				643,973				618,846				611,061				584,964				581,795				582,472
Commercial business loans			465,765				423,855				409,795				385,452				390,781				368,611				357,472				348,180
Leasing			-				19				21				36				54				156				260				439
Consumer loans			450,875				444,729				436,465				428,531				425,552				410,723				396,775				380,697
Total loans and leases			3,495,370				3,412,439				3,288,865				3,164,706				3,127,392				2,975,912				2,910,944				2,832,813
Allowance for loan and lease losses			(40,895	)			(39,661	)			(38,713	)			(37,475	)			(37,802	)			(37,574	)			(37,959	)			(38,026	)
Loans held for sale			15,457				10,418				19,445				13,899				10,512				6,656				9,042				3,079
Investment securities			841,650				862,409				878,284				912,565				933,619				950,869				980,530				997,584
Interest-earning assets			4,378,403				4,339,375				4,222,667				4,125,549				4,114,936				3,976,731				3,945,643				3,891,223
Total assets			4,655,380				4,611,034				4,507,367				4,401,380				4,397,132				4,248,731				4,234,342				4,168,998
Noninterest-bearing demand deposits			1,001,841				1,068,299				1,092,413				1,017,566				993,737				986,549				984,700				882,169
Total deposits			3,263,730				3,275,668				3,247,346				3,109,892				3,066,509				3,028,788				3,038,670				2,959,195
Customer repurchase agreements			109,145				121,378				111,817				101,640				74,432				71,384				72,917				67,038
Total interest-bearing liabilities			3,091,034				2,973,747				2,851,750				2,818,966				2,837,204				2,706,623				2,698,887				2,748,064
Total stockholders' equity			524,427				523,594				518,873				521,768				521,751				522,404				517,269				510,386
Quarterly Average Balance Sheets:
Residential mortgage loans		$	781,015			$	754,007			$	734,382			$	724,248			$	707,719			$	682,013			$	652,232			$	627,944
Residential construction loans			133,812				134,448				137,216				132,456				141,890				147,750				145,968				134,261
Commercial ADC loans			247,612				227,545				218,341				206,105				201,020				180,293				168,063				162,544
Commercial investor real estate loans			717,742				704,068				668,883				645,163				607,050				577,851				575,283				557,168
Commercial owner occupied real estate loans			673,883				656,337				624,407				611,722				594,634				585,014				579,953				584,155
Commercial business loans			424,510				413,300				398,510				383,111				367,872				367,203				348,597				349,734
Leasing			17				19				28				44				114				206				352				567
Consumer loans			448,439				441,740				434,011				425,434				417,910				404,062				390,076				377,822
Total loans and leases			3,427,030				3,331,464				3,215,778				3,128,283				3,038,209				2,944,392				2,860,524				2,794,195
Loans held for sale			11,951				21,070				14,075				7,053				9,952				7,518				6,940				5,216
Investment securities			840,276				869,461				898,237				925,683				942,782				965,206				991,135				1,012,701
Interest-earning assets			4,320,674				4,261,939				4,162,963				4,097,648				4,022,051				3,954,858				3,893,843				3,845,513
Total assets			4,594,025				4,537,142				4,438,670				4,372,988				4,292,237				4,220,084				4,157,559				4,105,225
Noninterest-bearing demand deposits			1,058,215				1,063,500				1,023,042				986,688				1,000,285				956,830				899,287				825,968
Total deposits			3,285,299				3,263,993				3,128,562				3,056,186				3,063,591				3,036,686				2,965,329				2,876,641
Customer repurchase agreements			125,275				121,127				106,179				90,020				78,746				73,046				68,880				62,864
Total interest-bearing liabilities			2,968,555				2,906,348				2,852,414				2,817,575				2,731,791				2,711,206				2,716,537				2,749,459
Total stockholders' equity			521,786				518,619				516,940				521,346				524,063				517,534				511,738				503,851
Financial Measures:
Average equity to average assets			11.36	%			11.43	%			11.65	%			11.92	%			12.21	%			12.26	%			12.31	%			12.27	%
Investment securities to earning assets			19.22	%			19.87	%			20.80	%			22.12	%			22.69	%			23.91	%			24.85	%			25.64	%
Loans to earning assets			79.83	%			78.64	%			77.89	%			76.71	%			76.00	%			74.83	%			73.78	%			72.80	%
Loans to assets			75.08	%			74.01	%			72.97	%			71.90	%			71.12	%			70.04	%			68.75	%			67.95	%
Loans to deposits			107.10	%			104.18	%			101.28	%			101.76	%			101.99	%			98.25	%			95.80	%			95.73	%
Capital Measures:
Tier 1 leverage  (1)			10.60	%			10.65	%			10.83	%			11.00	%			11.26	%			11.36	%			11.37	%			11.43	%
Tier 1 capital to risk-weighted assets  (1)			13.13	%			13.17	%			13.54	%			14.01	%			13.95	%			14.52	%			14.48	%			14.64	%
Total regulatory capital to risk-weighted assets  (1)			14.25	%			14.27	%			14.65	%			15.12	%			15.06	%			15.68	%			15.66	%			15.85	%
Common equity tier 1 capital to risk-weighted assets   (1)			12.17	%			12.20	%			12.53	%			14.01	%			n.a.				n.a.				n.a.				n.a.
Book value per share		$	21.58			$	21.44			$	21.12			$	21.10			$	20.83			$	20.83			$	20.63			$	20.38
Outstanding shares			24,295,971				24,424,944				24,562,471				24,733,868				25,044,877				25,076,794				25,069,700				25,043,482

 

(1)

Estimated ratio at December 31, 2015

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

 

		2015																2014
(Dollars in thousands)		December 31,				September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
Non-Performing Assets:
Loans and leases 90 days past due:
Commercial business		$	-			$	-			$	-			$	-			$	-			$	-			$	1			$	-
Commercial real estate:
Commercial AD&C			-				-				-				-				-				-				-				-
Commercial investor real estate			-				-				-				-				-				-				-				-
Commercial owner occupied real estate			-				-				-				-				-				649				-				-
Leasing			-				1				2				-				-				-				-				-
Consumer			-				-				7				-				-				6				3				-
Residential real estate:
Residential mortgage			-				-				-				-				-				-				-				-
Residential construction			-				-				-				-				-				-				-				-
Total loans and leases 90 days past due			-				1				9				-				-				655				4				-
Non-accrual loans and leases:
Commercial business			3,696				3,881				3,285				4,166				3,184				4,151				4,309				3,272
Commercial real estate:
Commercial AD&C			194				194				194				1,363				2,464				3,792				3,739				4,133
Commercial investor real estate			8,368				8,609				10,023				10,083				8,156				8,210				6,731				7,284
Commercial owner occupied real estate			6,340				7,932				8,423				8,974				8,941				10,742				10,868				7,150
Leasing			-				-				-				-				-				-				-				-
Consumer			2,193				1,621				1,214				1,962				1,668				1,830				2,058				2,115
Residential real estate:
Residential mortgage			8,822				7,488				7,780				3,235				3,012				4,417				4,501				5,025
Residential construction			418				770				780				788				1,105				2,497				2,143				2,304
Total non-accrual loans and leases			30,031				30,495				31,699				30,571				28,530				35,639				34,349				31,283
Total restructured loans - accruing			4,467				6,419				5,620				5,446				5,497				7,382				7,364				7,411
Total non-performing loans and leases			34,498				36,915				37,328				36,017				34,027				43,676				41,717				38,694
Other assets and real estate owned (OREO)			2,742				2,619				4,514				3,227				3,195				1,762				1,967				1,619
Total non-performing assets		$	37,240			$	39,534			$	41,842			$	39,244			$	37,222			$	45,438			$	43,684			$	40,313

 

		For the quarter ended,
		December 31,				September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2015				2015				2015				2015				2014				2014				2014				2014
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period		$	30,495			$	31,699			$	30,571			$	28,530			$	35,639			$	34,349			$	31,283			$	30,574
Non-accrual balances transferred to OREO			(423	)			(180	)			(1,309	)			(32	)			(1,475	)			(300	)			(390	)			(281	)
Non-accrual balances charged-off			(869	)			(752	)			(549	)			(1,077	)			(1,033	)			(216	)			(357	)			(513	)
Net payments or draws			(3,084	)			(1,846	)			(2,970	)			(1,067	)			(4,139	)			(590	)			(1,580	)			(1,073	)
Loans placed on non-accrual			3,912				1,574				5,956				4,217				779				2,396				5,393				2,576
Non-accrual loans brought current			-				-				-				-				(1,241	)			-				-				-
Balance at end of period		$	30,031			$	30,495			$	31,699			$	30,571			$	28,530			$	35,639			$	34,349			$	31,283
Analysis of Allowance for Loan Losses:
Balance at beginning of period		$	39,661			$	38,713			$	37,475			$	37,802			$	37,574			$	37,959			$	38,026			$	38,766
Provision (credit) for loan and lease losses			1,850				1,706				1,218				597				853				(192	)			158				(982	)
Less loans charged-off, net of recoveries:
Commercial business			(128	)			(25	)			73				(89	)			50				(58	)			28				(768	)
Commercial real estate:
Commercial AD&C			-				-				(547	)			706				529				-				-				-
Commercial investor real estate			(4	)			(5	)			85				(5	)			(5	)			(2	)			(23	)			(5	)
Commercial owner occupied real estate			725				104				(1	)			212				(6	)			-				265				-
Leasing			4				-				-				-				-				-				-				-
Consumer			(31	)			348				395				43				83				244				11				331
Residential real estate:
Residential mortgage			80				342				(18	)			65				(17	)			43				(27	)			203
Residential construction			(30	)			(6	)			(7	)			(8	)			(9	)			(34	)			(29	)			(3	)
Net charge-offs			616				758				(20	)			924				625				193				225				(242	)
Balance at end of period		$	40,895			$	39,661			$	38,713			$	37,475			$	37,802			$	37,574			$	37,959			$	38,026
Asset Quality Ratios:
Non-performing loans to total loans			0.99	%			1.08	%			1.13	%			1.14	%			1.09	%			1.47	%			1.43	%			1.37	%
Non-performing assets to total assets			0.80	%			0.86	%			0.93	%			0.89	%			0.85	%			1.07	%			1.03	%			0.97	%
Allowance for loan losses to loans			1.17	%			1.16	%			1.18	%			1.18	%			1.21	%			1.26	%			1.30	%			1.34	%
Allowance for loan losses to non-performing loans			118.54	%			107.44	%			103.71	%			104.05	%			111.09	%			86.03	%			90.99	%			98.27	%
Annualized net charge-offs to average loans			0.07	%			0.09	%			0.00	%			0.12	%			0.08	%			0.03	%			0.03	%			(0.04	)%

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

		Three Months Ended December 31,
		2015											2014
										Annualized												Annualized
		Average				(1)				Average				Average				(1)				Average
(Dollars in thousands and tax-equivalent)		Balances				Interest				Yield/Rate				Balances				Interest				Yield/Rate
Assets
Residential mortgage loans		$	781,015			$	6,626				3.39	%		$	707,719			$	5,985				3.38	%
Residential construction loans			133,812				1,241				3.68				141,890				1,328				3.71
Commercial ADC loans			247,612				2,835				4.54				201,020				2,364				4.67
Commercial investor real estate loans			717,742				8,370				4.63				607,050				7,320				4.78
Commercial owner occupied real estate loans			673,883				8,242				4.85				594,634				7,282				5.02
Commercial business loans			424,510				4,819				4.50				367,872				4,132				4.48
Leasing			17				-				-				114				1				6.56
Consumer loans			448,439				3,817				3.40				417,910				3,487				3.33
Total loans and leases (2)			3,427,030				35,950				4.17				3,038,209				31,899				4.21
Loans held for sale			11,951				122				4.12				9,952				101				4.07
Taxable securities			551,894				3,552				2.57				643,233				4,031				2.49
Tax-exempt securities (3)			288,382				3,083				4.28				299,549				3,207				4.25
Interest-bearing deposits with banks			40,945				29				0.28				30,635				19				0.25
Federal funds sold			472				-				0.26				473				1				0.22
Total interest-earning assets			4,320,674				42,736				3.93				4,022,051				39,258				3.91
Less:  allowance for loan and lease losses			(40,143	)											(38,291	)
Cash and due from banks			48,655												48,729
Premises and equipment, net			52,707												47,552
Other assets			212,132												212,196
Total assets		$	4,594,025											$	4,292,237
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	544,133				106				0.08	%		$	510,025				119				0.09	%
Regular savings deposits			281,146				37				0.05				261,564				34				0.05
Money market savings deposits			892,833				382				0.17				842,158				277				0.13
Time deposits			508,972				1,160				0.90				449,559				776				0.68
Total interest-bearing deposits			2,227,084				1,685				0.30				2,063,306				1,206				0.23
Other borrowings			125,601				76				0.24				78,746				47				0.23
Advances from FHLB			580,870				3,307				2.26				554,739				3,273				2.34
Subordinated debentures			35,000				229				2.63				35,000				222				2.54
Total interest-bearing liabilities			2,968,555				5,297				0.71				2,731,791				4,748				0.69
Noninterest-bearing demand deposits			1,058,215												1,000,285
Other liabilities			45,469												36,098
Stockholders' equity			521,786												524,063
Total liabilities and stockholders' equity		$	4,594,025											$	4,292,237
Net interest income and spread						$	37,439				3.22	%						$	34,510				3.22	%
Less: tax-equivalent adjustment							1,662												1,283
Net interest income						$	35,777											$	33,227
Interest income/earning assets											3.93	%											3.91	%
Interest expense/earning assets											0.48												0.47
Net interest margin											3.45	%											3.44	%

 

(1)

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

(2)

Non-accrual loans are included in the average balances.

(3)

Includes only investments that are exempt from federal taxes.

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

		Twelve Months Ended December 31,
		2015												2014
										Annualized												Annualized
		Average				(1)				Average				Average				(1)				Average
(Dollars in thousands and tax-equivalent)		Balances				Interest				Yield/Rate				Balances				Interest				Yield/Rate
Assets
Residential mortgage loans		$	748,584			$	25,251				3.37	%		$	667,735			$	22,859				3.42	%
Residential construction loans			134,486				4,970				3.70				142,503				5,316				3.73
Commercial ADC loans			225,022				10,299				4.58				178,092				8,814				4.95
Commercial investor real estate loans			684,218				32,073				4.69				579,471				28,201				4.87
Commercial owner occupied real estate loans			641,798				31,508				4.91				585,965				28,586				5.04
Commercial business loans			404,994				17,926				4.43				358,425				16,400				4.59
Leasing			27				1				2.50				308				17				5.64
Consumer loans			437,481				14,624				3.37				397,595				13,176				3.34
Total loans and leases (2)			3,276,610				136,652				4.17				2,910,094				123,369				4.27
Loans held for sale			13,571				544				4.01				7,420				312				4.21
Taxable securities			592,153				15,016				2.54				676,237				16,817				2.49
Tax-exempt securities (3)			290,990				12,479				4.29				301,493				12,974				4.30
Interest-bearing deposits with banks			37,761				98				0.26				33,902				85				0.25
Federal funds sold			473				1				0.23				474				1				0.22
Total interest-earning assets			4,211,558				164,790				3.91				3,929,620				153,558				3.93
Less:  allowance for loan and lease losses			(38,732	)											(38,556	)
Cash and due from banks			46,719												46,224
Premises and equipment, net			51,804												46,275
Other assets			215,104												210,643
Total assets		$	4,486,453											$	4,194,206
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	532,578				418				0.08	%		$	484,171				425				0.09	%
Regular savings deposits			276,873				146				0.05				259,066				165				0.06
Money market savings deposits			860,399				1,364				0.16				864,029				1,116				0.13
Time deposits			481,368				3,950				0.82				457,778				3,085				0.67
Total interest-bearing deposits			2,151,218				5,878				0.27				2,065,044				4,791				0.23
Other borrowings			110,899				255				0.23				70,933				164				0.23
Advances from FHLB			589,575				13,081				2.22				556,178				12,982				2.33
Subordinated debentures			35,000				899				2.57				35,000				881				2.52
Total interest-bearing liabilities			2,886,692				20,113				0.70				2,727,155				18,818				0.69
Noninterest-bearing demand deposits			1,033,141												921,169
Other liabilities			46,949												31,675
Stockholders' equity			519,671												514,207
Total liabilities and stockholders' equity		$	4,486,453											$	4,194,206
Net interest income and spread						$	144,677				3.21	%						$	134,740				3.24	%
Less: tax-equivalent adjustment							6,478												5,192
Net interest income						$	138,199											$	129,548
Interest income/earning assets											3.91	%											3.93	%
Interest expense/earning assets											0.47												0.48
Net interest margin											3.44	%											3.45	%

 

(1)

Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and  2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $6.5 million and $5.2 million in 2015 and 2014, respectively.

(2)

Non-accrual loans are included in the average balances.

(3)

Includes only investments that are exempt from federal taxes.