Sandy Spring Bancorp Reports Net Income of $10.6 Million for the Second Quarter


OLNEY, Md., July 21, 2016 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net income for the second quarter of 2016 of $10.6 million ($0.44 per diluted share) compared to net income of $10.3 million ($0.42 per diluted share) for the second quarter of 2015 and net income of $10.8 million ($0.45 per diluted share) for the first quarter of 2016.

For the six months ended June 30, 2016, net income was $21.5 million ($0.89 per diluted share) compared to net income of $21.6 million ($0.87 per diluted share) for the first six months of 2015.

“During the second quarter, pre-tax, pre-provision income climbed to its highest level since the third quarter of 2013, a quarter which included the effect of significant loan related recoveries. This quarter’s pre-tax, pre-provision income was driven by significant loan and deposit growth.  This growth enabled us to shift assets from the investment portfolio to higher yielding loans during the quarter,” said Dan Schrider, President and Chief Executive Officer.

“These core activities coupled with the restructuring of borrowings with lower rates and a reduced reliance on borrowed funds during the quarter should make a positive contribution to our prospective earnings run rate,” said Schrider.

Second Quarter Highlights: 

  • Pre-tax, pre-provision income increased 11% compared with the second quarter of 2015 and 8% compared to the first quarter of 2016.  
     
  • Total loans increased 12% compared to the second quarter of 2015 and 3% compared to the first quarter of 2016.  Commercial loans increased 15% and residential loans increased 9% over the prior year. 
     
  • Total deposits grew 8% from the prior year and 3% from the prior quarter.
     
  • The net interest margin was 3.51% for the second quarter of 2016, compared to 3.42% for the second quarter of 2015 and 3.44% for the first quarter of 2016.
     
  • During the second quarter, the Company prepaid $35 million in FHLB advances and extinguished $5 million in subordinated debentures. These transactions were essentially neutral with respect to net income for the quarter; however, they will have a positive impact on future interest expense.

Review of Balance Sheet and Credit Quality

Total assets grew 5% to $4.7 billion at June 30, 2016 compared to $4.5 billion at June 30, 2015.  This growth was driven by a 12% increase in the loan portfolio as total loans ended the period at $3.7 billion. 

At June 30, 2016, combined noninterest-bearing and interest-bearing checking account balances, an important performance driver of multiple-product banking relationships with clients, increased 8% compared to balances at June 30, 2015. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers, increased 8% compared to June 30, 2015.

Tangible common equity totaled $439 million at June 30, 2016 compared to $435 million at June 30, 2015. The ratio of tangible common equity to tangible assets decreased to 9.44% at June 30, 2016 from 9.84% at June 30, 2015 due primarily to the growth in assets and share repurchases over the preceding 12 months. Dividends per common share were $0.48 per share for the first six months of 2016 compared to $0.44 per common share for the first six months of 2015, a 9% increase.  At June 30, 2016, the Company had a total risk-based capital ratio of 13.57%, a common equity tier 1 risk-based capital ratio of 11.63%, a tier 1 risk-based capital ratio of 12.42% and a tier 1 leverage ratio of 10.29%.

Non-performing loans totaled $31.4 million at June 30, 2016 compared to $37.3 million at June 30, 2015 and $34.5 million at December 31, 2015. The level of non-performing loans to total loans decreased to 0.85% at June 30, 2016 compared to 1.13% at June 30, 2015 primarily due to the growth in the overall loan portfolio.

Loan charge-offs, net of recoveries, totaled $1.3 million for the second quarter of 2016 compared to negligible net recoveries for the second quarter of 2015 and $0.4 million in charge-offs for the first quarter of 2016. The allowance for loan and lease losses represented 1.18% of outstanding loans and leases and 138% of non-performing loans at June 30, 2016 compared to 1.18% of outstanding loans and leases and 104% of non-performing loans at June 30, 2015. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the second quarter of 2016 increased 8% compared to the second quarter of 2015. The net interest margin was 3.51% for the second quarter of 2016 compared to 3.42% for the second quarter of 2015 due primarily to a combination of loan growth and the previously mentioned prepayment of FHLB advances and subordinated debentures.

The provision for loan and lease losses was $3.0 million for the second quarter of 2016 compared to a charge of $1.2 million for the second quarter of 2015 and $1.2 million for the first quarter of 2016. The increase in the current quarter’s charge versus the prior year’s quarter reflects the growth in the loan portfolio.

Non-interest income increased to $12.8 million for the second quarter of 2016 compared to $12.1 million for the second quarter of 2015.  The increase in non-interest income for the quarter compared to the prior year quarter was due primarily to a $1.2 million gain on the extinguishment of $5 million in subordinated debentures. Excluding this transaction, non-interest income decreased 5% as income from wealth management decreased due to the sale of a portion of the assets under management which occurred in the first quarter of 2016.

Non-interest expenses increased 5% to $30.9 million for the second quarter of 2016 compared to $29.5 million in the second quarter of 2015. This increase was driven by the prepayment penalties of $1.4 million for the early payoff of $35 million in high-rate FHLB advances during the second quarter. Excluding the prepayment penalties, non-interest expenses remained level compared to the prior year quarter. The non-GAAP efficiency ratio was 59.12% for the second quarter of 2016 compared to 61.35% for the second quarter of 2015.

Net interest income for the first six months of 2016 increased 8% compared to the first six months of 2015 due primarily to an increase in average loans, which was funded, in part, by a decrease in lower-yielding investment securities. As a result, net interest margin was 3.47% for the first six months of 2016 compared to 3.43% for the first six months of 2015. 

The provision for loan and lease losses was a charge of $4.2 million for the first six months of 2016 compared to a charge of $1.8 million for the first six months of 2015 reflecting the growth in the loan portfolio over the prior year period.

Non-interest income increased 3% to $26.1 million for the first six months of 2016 compared to $25.3 million for the first six months of 2015.  This increase was driven by $1.9 million in gains on securities sales and the extinguishment of subordinated debentures discussed previously. Excluding these transactions, non-interest income decreased 9% due to a decrease in income from wealth management resulting from the sale of a portion of the assets under management and a decrease in income from mortgage banking as mortgage sales volumes declined. 

Non-interest expenses increased 8% to $63.2 million for the first six months of 2016 compared to $58.7 million for the first six months of 2015. This increase was due largely to prepayment penalties of $3.2 million for the early payoff of $75 million in high-rate FHLB advances. Excluding the prepayment penalties, non-interest expenses increased 2% over the prior year period. The current year-to-date period included increases in salaries and benefits and equipment expenses.  The non-GAAP efficiency ratio was 60.47% for the first six months of 2016 compared to 60.75% for the first six months of 2015.

Conference Call

The Company’s management will host a conference call to discuss its second quarter results today at 2:00 P.M. (ET).  A live Web cast of the conference call is available through the Investor Relations’ section of the Sandy Spring Web site at www.sandyspringbank.com.  Participants may call 1-866-235-9910. A password is not necessary.  Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call.  An internet-based replay will be available at the Web site until 9:00 am (ET) August 4, 2016.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10088183.

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 45 community offices and six financial centers across the region. Visit www.sandyspringbank.com for more information.

Forward-Looking Statements

Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release.  These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan 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, 2015, including in the Risk Factors section of that report, and in its other SEC reports.  Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.

              
Sandy Spring Bancorp, Inc. and Subsidiaries             
FINANCIAL HIGHLIGHTS - UNAUDITED             
              
  Three Months Ended   Six Months Ended   
  June 30, % June 30, % 
(Dollars in thousands, except per share data)  2016   2015  Change  2016   2015  Change 
Results of Operations:             
Net interest income $   36,732   $33,933   8 %$   72,854   $67,306   8 %
Provision for loan and lease losses    2,957    1,218   143     4,193    1,815   131  
Non-interest income    12,751    12,109   5     26,114    25,268   3  
Non-interest expenses    30,871    29,477   5     63,188    58,721   8  
Income before income taxes    15,655    15,347   2     31,587    32,038   (1) 
Net income    10,647    10,333   3     21,460    21,558   -  
              
Pre-tax pre-provision income $   18,612   $16,727   11  $   35,780   $34,215   5  
              
Return on average assets    0.92  % 0.93 %     0.92  % 0.99 %  
Return on average common equity    8.21  % 8.02 %     8.25  % 8.37 %  
Net interest margin    3.51  % 3.42 %     3.47  % 3.43 %  
Efficiency ratio - GAAP basis  (1)    62.39  % 64.02 %     63.85  % 63.43 %  
Efficiency ratio - Non-GAAP basis  (1)    59.12  % 61.35 %     60.47  % 60.75 %  
              
Per share data:             
Basic net income $   0.45   $0.42   7 %$   0.90   $0.87   3 %
Diluted net income $   0.44   $0.42   5  $   0.89   $0.87   2  
Average fully diluted shares   24,108,668    24,689,762   (2)   24,165,675    24,867,988   (3) 
Dividends declared per share $   0.24   $0.22   9  $   0.48   $0.44   9  
Book value per share    22.18    21.12   5     22.18    21.12   5  
Tangible book value per share    18.40    17.71   4     18.40    17.71   4  
Outstanding shares   23,874,650    24,562,471   (3)   23,874,650    24,562,471   (3) 
              
Financial Condition at period-end:             
Investment securities $   734,828   $878,284   (16)%$   734,828   $878,284   (16)%
Loans and leases    3,672,624    3,288,865   12     3,672,624    3,288,865   12  
Interest-earning assets    4,461,180    4,222,667   6     4,461,180    4,222,667   6  
Assets    4,739,449    4,507,367   5     4,739,449    4,507,367   5  
Deposits    3,510,141    3,247,346   8     3,510,141    3,247,346   8  
Interest-bearing liabilities    2,996,893    2,851,750   5     2,996,893    2,851,750   5  
Stockholders' equity    529,479    518,873   2     529,479    518,873   2  
              
Capital ratios:             
Tier 1 leverage  (4)    10.29  % 10.83 %     10.29  % 10.83 %  
Tier 1 capital to risk-weighted assets  (4)    12.42  % 13.54 %     12.42  % 13.54 %  
Total regulatory capital to risk-weighted assets  (4)    13.57  % 14.65 %     13.57  % 14.65 %  
Common equity tier 1 capital to risk-weighted assets  (4)    11.63  % 12.53 %     11.63  % 12.53 %  
Tangible common equity to tangible assets  (2)    9.44  % 9.84 %     9.44  % 9.84 %  
Average equity to average assets    11.18  % 11.65 %     11.18  % 11.78 %  
              
Credit quality ratios:             
Allowance for loan and lease losses to loans and leases    1.18  % 1.18 %     1.18  % 1.18 %  
Non-performing loans to total loans    0.85  % 1.13 %     0.85  % 1.13 %  
Non-performing assets to total assets    0.69  % 0.93 %     0.69  % 0.93 %  
Allowance for loan and lease losses to non-performing loans   138.36  % 103.71 %     138.36  % 103.71 %  
Annualized net charge-offs to average loans and leases  (3)   0.15  % - %     0.10  % 0.06 %  
              
(1) The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income.
The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization from non-interest expense; securities gains (losses) from non-interest income; OTTI;
and the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights.
(2) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets
and other comprehensive gains (losses).  See the Reconciliation Table included with these Financial Highlights.
(3) Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale.
(4) Estimated ratio at June 30, 2016
              

 

          
Sandy Spring Bancorp, Inc. and Subsidiaries         
RECONCILIATION TABLE - UNAUDITED         
          
  Three Months Ended Six Months Ended 
  June 30, June 30, 
(Dollars in thousands)  2016   2015   2016   2015  
Pre-tax pre-provision income:         
Net income $   10,647   $10,333  $   21,460   $21,558  
Plus non-GAAP adjustment:         
Litigation expenses    -     162     -     362  
Income taxes    5,008    5,014     10,127    10,480  
Provision (credit) for loan and lease losses    2,957    1,218     4,193    1,815  
Pre-tax pre-provision income $   18,612   $16,727  $   35,780   $34,215  
          
Efficiency ratio - GAAP basis:         
Non-interest expenses $   30,871   $29,477  $   63,188   $58,721  
          
Net interest income plus non-interest income $   49,483   $46,042  $   98,968   $92,574  
          
Efficiency ratio - GAAP basis  62.39%  64.02%  63.85%  63.43% 
          
          
Efficiency ratio - Non-GAAP basis:         
Non-interest expenses $   30,871   $29,477  $   63,188   $58,721  
Less non-GAAP adjustment:         
Amortization of intangible assets    28    106     60    213  
Loss on FHLB Redemption    1,416        3,167     
Litigation expenses    -     162     -     362  
Non-interest expenses -  as adjusted $   29,427   $29,209  $   59,961   $58,146  
          
Net interest income plus non-interest income $   49,483   $46,042  $   98,968   $92,574  
Plus non-GAAP adjustment:         
Tax-equivalent income    1,640    1,589     3,304    3,153  
Less non-GAAP adjustments:         
Securities gains    150    19     1,919    19  
Gain on redemption of subordinated debentures    1,200    -     1,200    -  
Net interest income plus non-interest income - as adjusted $   49,773   $47,612  $   99,153   $95,708  
          
Efficiency ratio - Non-GAAP basis  59.12%  61.35%  60.47%  60.75% 
          
Tangible common equity ratio:         
Total stockholders' equity $   529,479   $518,873  $   529,479   $518,873  
Accumulated other comprehensive income    (5,886)  592     (5,886)  592  
Goodwill    (84,171)  (84,171)    (84,171)  (84,171) 
Other intangible assets, net    (77)  (296)    (77)  (296) 
Tangible common equity $   439,345   $434,998  $   439,345   $434,998  
          
Total assets $  4,739,449   $4,507,367  $   4,739,449   $4,507,367  
Goodwill    (84,171)  (84,171)    (84,171)  (84,171) 
Other intangible assets, net    (77)  (296)    (77)  (296) 
Tangible assets $  4,655,201   $4,422,900  $   4,655,201   $4,422,900  
          
Tangible common equity ratio  9.44%  9.84%  9.44%  9.84% 
          
Outstanding common shares    23,874,650    24,562,471     23,874,650    24,562,471  
Tangible book value per common share $   18.40   $17.71  $   18.40   $17.71  
          

 

Sandy Spring Bancorp, Inc. and Subsidiaries       
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED       
        
  June 30, December 31, June 30, 
(Dollars in thousands)  2016   2015   2015  
Assets       
Cash and due from banks $   53,334   $46,956  $53,569  
Federal funds sold    832    472   472  
Interest-bearing deposits with banks    39,406    25,454   35,601  
Cash and cash equivalents    93,572    72,882   89,642  
Residential mortgage loans held for sale (at fair value)    13,490    15,457   19,445  
Investments available-for-sale (at fair value)    700,486    592,049   625,819  
Investments held-to-maturity -- fair value of $211,704 and $217,880 at December 31, 2015       
and June 30, 2015, respectively    -    208,265   216,866  
Other equity securities    34,342    41,336   35,599  
Total loans and leases    3,672,624    3,495,370   3,288,865  
Less: allowance for loan and lease losses    (43,384)  (40,895)  (38,713) 
Net loans and leases    3,629,240    3,454,475   3,250,152  
Premises and equipment, net    53,055    53,214   51,609  
Other real estate owned    1,311    2,742   4,514  
Accrued interest receivable    13,399    13,443   13,144  
Goodwill    84,171    84,171   84,171  
Other intangible assets, net    77    138   296  
Other assets    116,306    117,208   116,110  
Total assets $   4,739,449   $4,655,380  $4,507,367  
        
Liabilities       
Noninterest-bearing deposits $   1,176,135   $1,001,841  $1,092,413  
Interest-bearing deposits    2,334,006    2,261,889   2,154,933  
Total deposits    3,510,141    3,263,730   3,247,346  
Securities sold under retail repurchase agreements and federal funds purchased    117,887    109,145   111,817  
Advances from FHLB    515,000    685,000   550,000  
Subordinated debentures    30,000    35,000   35,000  
Accrued interest payable and other liabilities    36,942    38,078   44,331  
Total liabilities    4,209,970    4,130,953   3,988,494  
        
Stockholders' Equity       
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 23,874,650,       
24,295,971 and 24,562,471 at June 30, 2016, December 31, 2015 and June 30, 2015, respectively    23,875    24,296   24,562  
Additional paid in capital    164,040    175,588   181,504  
Retained earnings    335,678    325,840   313,399  
Accumulated other comprehensive income (loss)    5,886    (1,297)  (592) 
Total stockholders' equity    529,479    524,427   518,873  
Total liabilities and stockholders' equity $   4,739,449   $4,655,380  $4,507,367  
        


         
Sandy Spring Bancorp, Inc. and Subsidiaries        
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED      
         
  Three Months Ended Six Months Ended
 June 30,June 30,
(Dollars in thousands, except per share data)  2016   2015   2016   2015 
Interest Income:        
Interest and fees on loans and leases $   36,928   $33,031  $   73,134   $65,170 
Interest on loans held for sale    64    132     198    208 
Interest on deposits with banks    54    22     107    44 
Interest and dividends on investment securities:        
Taxable    2,840    3,850     6,126    7,427 
Exempt from federal income taxes    1,916    1,814     3,889    4,072 
Interest on federal funds sold    1    -     2    - 
Total interest income    41,803    38,849     83,456    76,921 
Interest Expense:        
Interest on deposits    2,041    1,367     3,878    2,561 
Interest on retail repurchase agreements and federal funds purchased    72    60     138    110 
Interest on advances from FHLB    2,739    3,266     6,113    6,502 
Interest on subordinated debt    219    223     473    442 
Total interest expense    5,071    4,916     10,602    9,615 
Net interest income    36,732    33,933     72,854    67,306 
Provision for loan and lease losses    2,957    1,218     4,193    1,815 
Net interest income after provision for loan and lease losses    33,775    32,715     68,661    65,491 
Non-interest Income:        
Investment securities gains    150    19     1,919    19 
Service charges on deposit accounts    1,956    1,839     3,859    3,721 
Mortgage banking activities    1,106    822     1,641    2,000 
Wealth management income    4,448    5,161     8,853    10,077 
Insurance agency commissions    949    881     2,394    2,499 
Income from bank owned life insurance    615    606     1,230    1,319 
Bank card fees    1,220    1,220     2,309    2,277 
Other income    2,307    1,561     3,909    3,356 
Total non-interest income    12,751    12,109     26,114    25,268 
Non-interest Expenses:        
Salaries and employee benefits    17,221    17,534     35,451    34,833 
Occupancy expense of premises    3,162    3,173     6,635    6,662 
Equipment expenses    1,693    1,490     3,357    2,863 
Marketing    662    942     1,343    1,473 
Outside data services    1,355    1,102     2,718    2,363 
FDIC insurance    649    654     1,286    1,285 
Amortization of intangible assets    28    106     60    213 
Litigation expenses    -    162     -    362 
Other expenses    6,101    4,314     12,338    8,667 
Total non-interest expenses    30,871    29,477     63,188    58,721 
Income before income taxes    15,655    15,347     31,587    32,038 
Income tax expense    5,008    5,014     10,127    10,480 
Net income $   10,647   $10,333  $   21,460   $21,558 
         
Net Income Per Share Amounts:        
Basic net income per share $   0.45   $0.42  $   0.90   $0.87 
Diluted net income per share $   0.44   $0.42  $   0.89   $0.87 
Dividends declared per share $   0.24   $0.22  $   0.48   $0.44 
         


          
Sandy Spring Bancorp, Inc. and Subsidiaries         
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED       
          
   2016   2015  
(Dollars in thousands, except per share data) Q2Q1 Q4Q3Q2Q1 
Profitability for the Quarter:         
Tax-equivalent interest income $   43,443  $43,317  $42,736 $41,980 $40,438 $39,343  
Interest expense    5,071   5,531   5,297  5,201  4,916  4,699  
Tax-equivalent net interest income    38,372   37,786   37,439  36,779  35,522  34,644  
Tax-equivalent adjustment    1,640   1,664   1,662  1,663  1,589  1,271  
Provision for loan and lease losses    2,957   1,236   1,850  1,706  1,218  597  
Non-interest income    12,751   13,363   12,243  12,390  12,109  13,159  
Non-interest expenses    30,871   32,317   26,996  29,630  29,477  29,244  
Income before income taxes    15,655   15,932   19,174  16,170  15,347  16,691  
Income tax expense    5,008   5,119   6,372  5,175  5,014  5,466  
Net income $   10,647  $10,813  $12,802 $10,995 $10,333 $11,225  
Financial Performance:         
Pre-tax pre-provision income $   18,612  $17,168  $16,638 $18,031 $16,727 $17,488  
Return on average assets  0.92% 0.93%  1.11% 0.96% 0.93% 1.04% 
Return on average common equity  8.21% 8.29%  9.73% 8.41% 8.02% 8.73% 
Net interest margin  3.51% 3.44%  3.45% 3.43% 3.42% 3.44% 
Efficiency ratio - GAAP basis (1)  62.39% 65.31%  56.22% 62.37% 64.02% 62.85% 
Efficiency ratio - Non-GAAP basis (1)  59.12% 61.84%  63.08% 59.73% 61.35% 60.53% 
Per Share Data:         
Basic net income per share $   0.45  $0.45  $0.53 $0.45 $0.42 $0.45  
Diluted net income per share $   0.44  $0.45  $0.52 $0.45 $0.42 $0.45  
Average fully diluted shares  24,108,668   24,222,940   24,455,847  24,602,817  24,689,762  25,048,576  
Dividends declared per common share $   0.24  $0.24  $0.24 $0.22 $0.22 $0.22  
Non-interest Income:         
Securities gains $   150  $1,769  $16 $1 $19 $-  
Service charges on deposit accounts    1,956   1,903   1,950  1,936  1,839  1,882  
Mortgage banking activities    1,106   535   548  566  822  1,178  
Wealth management income    4,448   4,405   4,891  4,963  5,161  4,916  
Insurance agency commissions    949   1,445   1,029  1,648  881  1,618  
Income from bank owned life insurance    615   615   634  618  606  713  
Bank card fees    1,220   1,089   1,177  1,198  1,220  1,057  
Other income    2,307   1,602   1,998  1,460  1,561  1,795  
Total Non-interest Income $   12,751  $13,363  $12,243 $12,390 $12,109 $13,159  
Non-interest Expense:         
Salaries and employee benefits $   17,221  $18,230  $18,437 $17,733 $17,534 $17,299  
Occupancy expense of premises    3,162   3,473   3,061  3,086  3,173  3,489  
Equipment expenses    1,693   1,664   1,608  1,600  1,490  1,373  
Marketing    662   681   735  688  942  531  
Outside data services    1,355   1,363   1,331  1,329  1,102  1,261  
FDIC insurance    649   637   641  565  654  631  
Amortization of intangible assets    28   32   52  107  106  107  
Litigation expenses    -    -   (4,386) 155  162  200  
Professional fees    1,447   1,138   1,322  1,089  1,199  1,209  
Other real estate owned expenses    (5) 17   14  48  4  10  
Other expenses    4,659   5,082   4,181  3,230  3,111  3,134  
Total Non-interest Expense $   30,871  $32,317  $26,996 $29,630 $29,477 $29,244  
          
(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       
          
   2016   2015  
(Dollars in thousands) Q2Q1 Q4Q3Q2Q1 
Balance Sheets at Quarter End:         
Residential mortgage loans $   820,618  $804,105  $796,358 $773,889 $744,195 $728,858  
Residential construction loans    142,710   138,221   129,281  139,492  137,134  130,321  
Commercial ADC loans    285,585   261,204   255,980  239,160  223,103  203,731  
Commercial investor real estate loans    824,252   783,161   719,084  710,694  694,179  668,931  
Commercial owner occupied real estate loans    700,599   675,560   678,027  680,601  643,973  618,846  
Commercial business loans    451,711   451,239   465,765  423,855  409,795  385,452  
Leasing    -   -   -  19  21  36  
Consumer loans    447,149   447,198   450,875  444,729  436,465  428,531  
Total loans and leases  3,672,624   3,560,688   3,495,370  3,412,439  3,288,865  3,164,706  
Allowance for loan and lease losses  (43,384) (41,766)  (40,895) (39,661) (38,713) (37,475) 
Loans held for sale    13,490   27,806   15,457  10,418  19,445  13,899  
Investment securities  734,828   742,401   841,650  862,409  878,284  912,565  
Interest-earning assets  4,461,180   4,447,063   4,378,403  4,339,375  4,222,667  4,125,549  
Total assets  4,739,449   4,716,608   4,655,380  4,611,034  4,507,367  4,401,380  
Noninterest-bearing demand deposits  1,176,135   1,084,746   1,001,841  1,068,299  1,092,413  1,017,566  
Total deposits  3,510,141   3,412,308   3,263,730  3,275,668  3,247,346  3,109,892  
Customer repurchase agreements    117,887   121,043   109,145  121,378  111,817  101,640  
Total interest-bearing liabilities  2,996,893   3,073,605   3,091,034  2,973,747  2,851,750  2,818,966  
Total stockholders' equity  529,479   522,392   524,427  523,594  518,873  521,768  
Quarterly Average Balance Sheets:         
Residential mortgage loans $   811,705  $807,443  $781,015 $754,007 $734,382 $724,248  
Residential construction loans    142,854   134,708   133,812  134,448  137,216  132,456  
Commercial ADC loans    272,090   261,687   247,612  227,545  218,341  206,105  
Commercial investor real estate loans    788,785   750,821   717,742  704,068  668,883  645,163  
Commercial owner occupied real estate loans    684,907   677,786   673,883  656,337  624,407  611,722  
Commercial business loans    453,459   460,903   424,510  413,300  398,510  383,111  
Leasing    -    -   17  19  28  44  
Consumer loans    449,594   451,075   448,439  441,740  434,011  425,434  
Total loans and leases    3,603,394   3,544,423   3,427,030  3,331,464  3,215,778  3,128,283  
Loans held for sale    8,326   14,036   11,951  21,070  14,075  7,053  
Investment securities  739,132   810,593   840,276  869,461  898,237  925,683  
Interest-earning assets  4,394,879   4,411,796   4,320,674  4,261,939  4,162,963  4,097,648  
Total assets  4,664,343   4,685,747   4,594,025  4,537,142  4,438,670  4,372,988  
Noninterest-bearing demand deposits  1,082,762   1,021,471   1,058,215  1,063,500  1,023,042  986,688  
Total deposits  3,429,897   3,300,131   3,285,299  3,263,993  3,128,562  3,056,186  
Customer repurchase agreements    122,597   110,862   125,275  121,127  106,179  90,020  
Total interest-bearing liabilities  3,020,505   3,103,710   2,968,555  2,906,348  2,852,414  2,817,575  
Total stockholders' equity  521,387   524,309   521,786  518,619  516,940  521,346  
Financial Measures:         
Average equity to average assets  11.18% 11.19%  11.36% 11.43% 11.65% 11.92% 
Investment securities to earning assets  16.47% 16.69%  19.22% 19.87% 20.80% 22.12% 
Loans to earning assets  82.32% 80.07%  79.83% 78.64% 77.89% 76.71% 
Loans to assets  77.49% 75.49%  75.08% 74.01% 72.97% 71.90% 
Loans to deposits  104.63% 104.35%  107.10% 104.18% 101.28% 101.76% 
Capital Measures:         
Tier 1 leverage  (1)  10.29% 10.23%  10.60% 10.65% 10.83% 11.00% 
Tier 1 capital to risk-weighted assets  (1)  12.42% 12.74%  13.13% 13.17% 13.54% 14.03% 
Total regulatory capital to risk-weighted assets  (1)  13.57% 13.86%  14.25% 14.27% 14.65% 15.14% 
Common equity tier 1 capital to risk-weighted assets  (1)  11.63% 11.79%  12.17% 12.20% 12.53% 12.99% 
Book value per share $   22.18  $21.92  $21.58 $21.44 $21.12 $21.10  
Outstanding shares    23,874,650   23,827,305   24,295,971  24,424,944  24,562,471  24,733,868  
(1) Estimated ratio at June 30, 2016         
          


Sandy Spring Bancorp, Inc. and Subsidiaries             
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED           
              
   2016   2015  
(Dollars in thousands) June 30, March 31, December 31, September 30, June 30, March 31, 
Non-Performing Assets:             
Loans and leases 90 days past due:             
Commercial business $   -   $-  $-  $-  $-  $-  
Commercial real estate:             
Commercial AD&C    -    -   -   -   -   -  
Commercial investor real estate    -    -   -   -   -   -  
Commercial owner occupied real estate    -    -   -   -   -   -  
Leasing    -    -   -   1   2   -  
Consumer    2    1   -   -   7   -  
Residential real estate:             
Residential mortgage    -    -   -   -   -   -  
Residential construction    -    -   -   -   -   -  
Total loans and leases 90 days past due    2    1   -   1   9   -  
Non-accrual loans and leases:             
Commercial business    4,263    3,741   3,696   3,881   3,285   4,166  
Commercial real estate:             
Commercial AD&C    137    147   194   194   194   1,363  
Commercial investor real estate    8,868    7,885   8,368   8,609   10,023   10,083  
Commercial owner occupied real estate    5,678    7,149   6,340   7,932   8,423   8,974  
Leasing    -    -   -   -   -   -  
Consumer    2,600    2,715   2,193   1,621   1,214   1,962  
Residential real estate:             
Residential mortgage    6,186    9,329   8,822   7,488   7,780   3,235  
Residential construction    202    412   418   770   780   788  
Total non-accrual loans and leases    27,934    31,378   30,031   30,495   31,699   30,571  
Total restructured loans - accruing    3,420    4,716   4,467   6,419   5,620   5,446  
Total non-performing loans and leases    31,356    36,095   34,498   36,915   37,328   36,017  
Other assets and real estate owned (OREO)    1,311    2,414   2,742   2,619   4,514   3,227  
Total non-performing assets $   32,667   $38,509  $37,240  $39,534  $41,842  $39,244  
              
  For the quarter ended, 
  June 30, March 31, December 31, September 30, June 30, March 31, 
(Dollars in thousands)  2016   2016   2015   2015   2015   2015  
Analysis of Non-accrual Loan and Lease Activity:             
Balance at beginning of period $   31,378   $30,031  $30,495  $31,699  $30,571  $28,530  
Non-accrual balances transferred to OREO    -    -   (423)  (180)  (1,309)  (32) 
Non-accrual balances charged-off    (1,305)  (274)  (869)  (752)  (549)  (1,077) 
Net payments or draws    (4,810)  (914)  (3,084)  (1,846)  (2,970)  (1,067) 
Loans placed on non-accrual    2,671    2,535   3,912   1,574   5,956   4,217  
Non-accrual loans brought current    -    -   -   -   -   -  
Balance at end of period $   27,934   $31,378  $30,031  $30,495  $31,699  $30,571  
              
Analysis of Allowance for Loan Losses:             
Balance at beginning of period $   41,766   $40,895  $39,661  $38,713  $37,475  $37,802  
Provision for loan and lease losses    2,957    1,236   1,850   1,706   1,218   597  
Less loans charged-off, net of recoveries:             
Commercial business    106    67   (128)  (25)  73   (89) 
Commercial real estate:             
Commercial AD&C    -    48   -   -   (547)  706  
Commercial investor real estate    (107)  192   (4)  (5)  85   (5) 
Commercial owner occupied real estate    (1)  (3)  725   104   (1)  212  
Leasing    -    -   4   -   -   -  
Consumer    364    54   (31)  348   395   43  
Residential real estate:             
Residential mortgage    989    15   80   342   (18)  65  
Residential construction    (12)  (8)  (30)  (6)  (7)  (8) 
Net charge-offs    1,339    365   616   758   (20)  924  
Balance at end of period $   43,384   $41,766  $40,895  $39,661  $38,713  $37,475  
              
Asset Quality Ratios:             
Non-performing loans to total loans  0.85%  1.01%  0.99%  1.08%  1.13%  1.14% 
Non-performing assets to total assets  0.69%  0.82%  0.80%  0.86%  0.93%  0.89% 
Allowance for loan losses to loans  1.18%  1.17%  1.17%  1.16%  1.18%  1.18% 
Allowance for loan losses to non-performing loans  138.36%  115.72%  118.54%  107.44%  103.71%  104.05% 
Annualized net charge-offs to average loans  0.15%  0.04%  0.07%  0.09%  0.00%  0.12% 
              


Sandy Spring Bancorp, Inc. and Subsidiaries             
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED        
               
  Three Months Ended June 30, 
      2016          2015     
      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 $   811,705   $    6,934    3.42% $734,382  $ 6,155   3.35%
Residential construction loans  142,854     1,268    3.57   137,216    1,268   3.71 
Total mortgage loans  954,559     8,202    3.44   871,598    7,423   3.41 
Commercial ADC loans  272,090     3,115    4.60   218,341    2,525   4.64 
Commercial investor real estate loans  788,785     8,988    4.58   668,883    7,771   4.66 
Commercial owner occupied real estate loans  684,907     8,280    4.86   624,407    7,669   4.93 
Commercial business loans  453,459     4,943    4.38   398,510    4,369   4.40 
Leasing    -       -      -    28     -    1.49 
Total commercial loans and leases  2,199,241     25,326    4.63   1,910,169    22,334   4.69 
Consumer loans  449,594     3,885    3.50   434,011    3,606   3.35 
Total loans and leases (2)  3,603,394     37,413    4.17   3,215,778    33,363   4.16 
Loans held for sale  8,326     64    3.08   14,075    132   3.76 
Taxable securities  456,803     2,943    2.58   606,581    3,786   2.50 
Tax-exempt securities (3)  282,329     2,968    4.21   291,656    3,135   4.30 
Total investment securities  739,132     5,911    3.20   898,237    6,921   3.08 
Interest-bearing deposits with banks  43,300     54    0.50   34,400    22   0.25 
Federal funds sold  727       1    0.49   473     -    0.22 
Total interest-earning assets  4,394,879     43,443    3.97   4,162,963    40,438   3.89 
               
Less:  allowance for loan and lease losses  (42,064)       (38,217)     
Cash and due from banks  46,527         46,894      
Premises and equipment, net  53,218         51,591      
Other assets  211,783         215,439      
Total assets $   4,664,343        $4,438,670      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $   586,323     115    0.08%$527,307    101   0.08%
Regular savings deposits  298,435       47    0.06   278,199    37   0.05 
Money market savings deposits  907,670     495    0.22   833,382    317   0.15 
Time deposits  554,707     1,384    1.00   466,632    912   0.78 
Total interest-bearing deposits  2,347,135     2,041    0.35   2,105,520    1,367   0.26 
Other borrowings  122,601       72    0.24   106,180    60   0.23 
Advances from FHLB  519,780       2,739    2.12   605,714    3,266   2.16 
Subordinated debentures  30,989       219    2.83   35,000    223   2.55 
Total interest-bearing liabilities  3,020,505     5,071    0.68   2,852,414    4,916   0.69 
               
Noninterest-bearing demand deposits  1,082,762         1,023,042      
Other liabilities  39,689         46,274      
Stockholders' equity  521,387         516,940      
Total liabilities and stockholders' equity $   4,664,343        $4,438,670      
               
Net interest income and spread   $    38,372    3.29 %  $ 35,522   3.20%
Less: tax-equivalent adjustment       1,640           1,589     
Net interest income   $    36,732         $ 33,933     
               
Interest income/earning assets     3.97 %    3.89%
Interest expense/earning assets       0.46       0.47 
Net interest margin     3.51 %    3.42%
               
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2016 and 2015. The annualized taxable-equivalent adjustments utilized in 
the above table to compute yields aggregated to $1.6 million and $1.6 million in 2016 and 2015, respectively.        
(2) Non-accrual loans are included in the average balances.              
(3) Includes only investments that are exempt from federal taxes.            
               

 

              
Sandy Spring Bancorp, Inc. and Subsidiaries             
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED        
               
  Six Months Ended June 30, 
      2016          2015     
      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 $   809,574   $    13,802    3.41%$729,343  $ 12,279   3.37%
Residential construction loans  138,781     2,463    3.57   134,849    2,489   3.72 
Total mortgage loans  948,355     16,265    3.43   864,192    14,768   3.42 
Commercial ADC loans  266,888     6,113    4.61   212,257    4,862   4.62 
Commercial investor real estate loans  769,803     17,600    4.60   657,088    15,350   4.71 
Commercial owner occupied real estate loans  681,347     16,365    4.83   618,100    15,200   4.96 
Commercial business loans  457,181     9,956    4.38   390,853    8,507   4.39 
Leasing    -       -      -    36    1   3.76 
Total commercial loans and leases  2,175,219     50,034    4.63   1,878,334    43,920   4.72 
Consumer loans  450,335     7,774    3.49   429,746    7,106   3.35 
Total loans and leases (2)  3,573,909     74,073    4.16   3,172,272    65,794   4.18 
Loans held for sale  11,181     198    3.54   10,583    208   3.94 
Taxable securities  490,338     6,356    2.59   617,861    7,722   2.50 
Tax-exempt securities (3)  284,524     6,024    4.23   294,024    6,305   4.29 
Total investment securities  774,862     12,380    3.20   911,885    14,027   3.08 
Interest-bearing deposits with banks  42,777     107    0.50   35,273    44   0.25 
Federal funds sold  608       2    0.48   473    1   0.22 
Total interest-earning assets  4,403,337     86,760    3.96   4,130,486    80,074   3.90 
               
Less:  allowance for loan and lease losses  (41,567)       (37,833)     
Cash and due from banks  46,783         46,663      
Premises and equipment, net  53,396         51,127      
Other assets  212,915         215,567      
Total assets $   4,674,864        $4,406,010      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $   577,771     223    0.08% $525,692    207   0.08%
Regular savings deposits  294,339       89    0.06   274,220    71   0.05 
Money market savings deposits  902,352     932    0.21   832,549    590   0.14 
Time deposits  538,435     2,634    0.98   455,147    1,693   0.75 
Total interest-bearing deposits  2,312,897     3,878    0.34   2,087,608    2,561   0.25 
Other borrowings  116,792       138    0.24   98,228    110   0.23 
Advances from FHLB  599,423       6,113    2.05   614,254    6,502   2.13 
Subordinated debentures  32,995       473    2.87   35,000    442   2.53 
Total interest-bearing liabilities  3,062,107     10,602    0.70   2,835,090    9,615   0.68 
               
Noninterest-bearing demand deposits  1,052,116         1,004,965      
Other liabilities  37,793         46,824      
Stockholders' equity  522,848         519,131      
Total liabilities and stockholders' equity $   4,674,864        $4,406,010      
               
Net interest income and spread   $    76,158    3.26 %  $ 70,459   3.22%
Less: tax-equivalent adjustment       3,304           3,153     
Net interest income   $    72,854         $ 67,306     
               
Interest income/earning assets     3.96 %    3.90%
Interest expense/earning assets       0.49       0.47 
Net interest margin     3.47 %    3.43%
               
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2016 and 2015. The annualized taxable-equivalent adjustments utilized in 
the above table to compute yields aggregated to $3.3 million and $3.2 million in 2016 and 2015, respectively.        
(2) Non-accrual loans are included in the average balances.              
(3) Includes only investments that are exempt from federal taxes.            
               

            

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