Sandy Spring Bancorp 8K Results of Operations and Financial Condition | SASR 25 Jan 07

Exhibit 99


		*NEWS RELEASE*

FOR IMMEDIATE RELEASE

SANDY SPRING BANCORP REPORTS
HEALTHY GROWTH TREND OF NON-INTEREST INCOME;
EXCELLENT ASSET QUALITY FOR 4TH QUARTER AND FULL YEAR

OLNEY, MARYLAND, January 25, 2007 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the fourth quarter of 2006 of $8.3 million ($.55 per diluted share) compared to $8.0 million ($.54 per diluted share) for the fourth quarter of 2005 and $8.1 million ($.55 per diluted share) for the linked third quarter of 2006. Net income for the year ending December 31, 2006 totaled $32.9 million ($2.20 per diluted share) compared to $33.1 million ($2.24 per diluted share) for the prior year period, a 1% decrease.

“In a decidedly difficult environment for most banks, our loan growth and fee and commission income trends continued to be favorable, credit quality remained outstanding and we announced plans for another bank acquisition during the quarter,” said Hunter R. Hollar, President and Chief Executive Officer. “The competition for demand deposits continues to be very intense throughout our markets, which underscores the value we expect to derive from our most recently announced, pending acquisition of CN Bancorp, the parent company of County National Bank and its four offices in Anne Arundel County, MD. We believe that the transaction represents a very attractive in-market opportunity to expand our existing branch network at a reasonable price, while also adding new, stable core deposit account relationships that we should be able to retain and grow. We expect that the transaction, which is subject to a number of conditions, including the approval by CN Bancorp stockholders and regulatory authorities, will close near the end of the second quarter.”

“Growth in noninterest income from sales of investment products and in trust and investment management fees was solid,“ said Hollar. “We are very pleased with the contribution from asset manager West Financial Services after its first full year of combined performance within the Sandy Spring organization. Across all portfolios, credit quality continued to be excellent with net charge-offs of less than one-tenth of 1% of total loans. “

“Finally, we continued to execute on our plans to invest in technology and related infrastructure areas to support growth coming from both recent and future acquisitions.”

Sandy Spring Bancorp’s return on average stockholders’ equity was 13.87% for the fourth quarter of 2006, compared to 14.76% for the same period in the prior year. Return on average assets for the fourth quarter of 2006 was 1.26%, compared to 1.31% for the fourth quarter of 2005.

For the year ended December 31, 2006, return on average stockholders’ equity was 14.33% compared to 16.21% for the prior year. Return on average assets for the year ended December 31, 2006 was 1.28%, compared to 1.41% for the year ended December 31, 2005.

Comparing December 31, 2006 balances to December 31, 2005, total assets increased 6% to $2.6 billion due mainly to growth in the loan portfolio. Total loans and leases increased 7% to $1.8 billion compared to the prior year. Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 6% to $2.1 billion at December 31, 2006. Stockholders’ equity totaled $237.8 million at year-end, and represented 9.1% of total assets, compared to 8.9% at December 31, 2005.

The provision for loan and lease losses totaled $0.3 million for the fourth quarter of 2006 compared to $1.0 million for the fourth quarter of 2005. The provision for loan and lease losses totaled $2.8 million for the year ended December 31, 2006 compared to $2.6 million for the prior year. The allowance for loan and lease losses represented 1.08% of outstanding loans at December 31, 2006.

The Company’s management will host a conference call to discuss its fourth quarter and full year 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.

DETAILED REVIEW OF FINANCIAL RESULTS

Comparing the fourth quarter of 2006 and 2005, net interest income increased by $0.7 million, or 3%, due primarily to continued growth in the loan portfolio and higher loan yields which were largely offset by increased rates on interest-bearing deposits and an increased use of time deposits, as noninterest bearing deposits continued to decrease. These factors produced a net interest margin decrease to 4.14% in 2006 from 4.38% in 2005.

Noninterest income increased 2% in the fourth quarter of 2006 as compared to 2005. On a non-GAAP basis, excluding securities gains, noninterest income increased 9% in the fourth quarter as compared to 2005. Trust and investment management fees increased 10% due mainly to growth in assets under management. Insurance agency commissions increased 16% over 2005 due to higher premiums from commercial property and casualty lines and the acquisition of Neff & Associates in the first quarter of 2006. Fees on sales of investment products increased 26% over the prior year due to increased sales volumes while Visa^® check fees increased 11% reflecting a growing volume of electronic banking transactions. Gains on sales of mortgage loans and other noninterest income remained virtually level with the prior year.

Noninterest expenses were $22.2 million in the fourth quarter of 2006 compared to $20.9 million in 2005, an increase of $1.3 million or 7%. Marketing expenses increased substantially over the fourth quarter of 2005 consistent with the Company’s strategic plan to raise brand awareness in the markets it serves. Other noninterest expenses increased 43% over the prior year quarter due primarily to increases in consulting and

other professional services fees.

Stock-based compensation expense of $0.1 million, net of income taxes ($.01 per diluted share) was recorded in the fourth quarter of 2006 as required under a new accounting standard (SFAS 123R).

Comparing the year ended December 31, 2006 and 2005, net interest income increased by $6.6 million, or 7%, due primarily to continued growth in the loan portfolio and increased loan yields, which was offset in part by increased rates on interest bearing deposits and increased use of time deposits. The net interest margin decreased to 4.26% in 2006 from 4.39% in 2005.

Noninterest income increased 5% for the year ended December 31, 2006 compared to 2005 due to increases in fee and commission income. On a non-GAAP basis, noninterest income, excluding the effect of net securities gains of $3.3 million in 2005, increased $5.2 million or 16%. Trust and investment management fees increased 75% due to growth in trust assets under management and the acquisition of West Financial Services, Inc. in the fourth quarter of 2005. Insurance agency commissions also increased 22% over 2005 due to higher premiums from commercial property and casualty lines and the acquisition of Neff & Associates in the first quarter of 2006. Fees on sales of investment products increased 40% over the prior year due to increased sales volumes while Visa^® check fees increased 10%. Gains on sales of mortgage loans decreased 21% reflecting market conditions.

Noninterest expenses were $85.1 million in 2006 compared to $77.2 million in 2005, an increase of $7.9 million or 10%. This increase was primarily the result of increases in salaries and benefits due to the acquisition of West Financial Services, Inc. and Neff & Associates, a larger staff and higher marketing expenses which increased over the prior year in accord with the Company’s strategic plan as mentioned above. Intangibles amortization increased $0.8 million or 35% as a result of the above acquisitions.

Stock-based compensation expense of $0.4 million, net of income taxes ($.03 per diluted share) was recorded in 2006 as required under a new accounting standard (SFAS 123R).

About Sandy Spring Bancorp/Sandy Spring Bank

With $2.6 billion in assets, Sandy Spring Bancorp is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation, The Equipment Leasing Company and West Financial Services, Inc. Sandy Spring Bancorp is the third largest publicly traded banking company headquartered in Maryland. Sandy Spring is a community banking organization that focuses its lending and other services on businesses and consumers in the local market area. Independent and community-oriented, Sandy Spring Bank was founded in 1868 and offers a broad range of commercial banking, retail banking and trust services through 33 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland. Through its subsidiaries, the Bank also offers a comprehensive menu of leasing, insurance and investment management services. Visit www.sandyspringbank.com to locate an ATM near you or for more information about Sandy Spring Bank.

For additional information or questions, please contact:

Hunter R. Hollar, President & Chief Executive Officer, or
Philip J. Mantua, Executive V.P. & Chief Financial Officer
Sandy Spring Bancorp
17801 Georgia Avenue
Olney, Maryland 20832
1-800-399-5919
E-mail: HHollar@sandyspringbank.com
PMantua@sandyspringbank.com
Web site: www.sandyspringbank.com

Forward-Looking Statements:Sandy Spring Bancorp makes forward-looking statements in this News Release that are subject to risks and uncertainties. These forward-looking statements 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. These forward-looking statements are subject to significant uncertainties because they are based upon or are affected by: management’s estimates and projections of future interest rates, market behavior, and other economic conditions; future laws and regulations; and a variety of other matters which, by their nature, are subject to significant uncertainties. Because of these uncertainties, Sandy Spring Bancorp’s actual future results may differ materially from those indicated. In addition, the Company’s past results of operations do not necessarily indicate its future results.

ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER WITH CN BANCORP

Sandy Spring Bancorp, Inc. will be filing a proxy statement/prospectus and other relevant documents concerning the proposed merger with the SEC. SANDY SPRING BANCORP, INC. URGES INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain these documents free of charge at the SEC’s web site (www.sec.gov). In addition, documents filed with the SEC by Sandy Spring Bancorp, Inc. will be available free of charge from Shareholder Relations at 301/570-8338.

Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)


	Three Months Ended									Twelve Months Ended
	December 31,						%			December 31,						%
	2006			2005			Change			2006			2005			Change

Profitability for the period:
Net interest income	$	23,605		$	22,925			3		$	94,756		$	88,178			7
Provision for loan and lease losses		250			1,000			(75	)		2,795			2,600			8
Noninterest income		10,064			9,904			2			38,895			36,909			5
Noninterest expenses		22,218			20,860			7			85,096			77,194			10
Income before income taxes		11,201			10,969			2			45,760			45,293			1
Net income		8,314		$	7,978			4			32,871			33,098			(1	)

Return on average assets		1.26	%		1.31	%					1.28	%		1.41	%
Return on average equity		13.87	%		14.76	%					14.33	%		16.21	%
Net interest margin		4.14	%		4.38	%					4.26	%		4.39	%
Efficiency ratio — GAAP based *		65.99	%		63.54	%					63.67	%		61.71	%
Efficiency ratio — traditional *		60.85	%		59.36	%					58.71	%		58.16	%

Per share data:
Basic net income	$	0.56		$	0.54			4		$	2.22		$	2.26			(2	)
Diluted net income		0.55			0.54			2			2.20			2.24			(2	)
Dividends declared		0.22			0.22			0			0.88			0.84			5
Book value		16.04			14.73			9			16.04			14.73			9
Tangible book value		14.48			13.21			10			14.48			13.21			10
Average fully diluted shares		14,940,873			14,886,046						14,926,965			14,767,291

At period-end:
Assets	$	2,610,457		$	2,459,616			6		$	2,610,457		$	2,459,616			6
Deposits		1,994,223			1,803,210			11			1,994,223			1,803,210			11
Loans and leases		1,805,579			1,684,379			7			1,805,579			1,684,379			7
Securities		540,908			567,432			(5	)		540,908			567,432			(5	)
Stockholders’ equity		237,777			217,883			9			237,777			217,883			9

Capital and credit quality ratios:
Average equity to average assets		9.12	%		8.86	%					8.95	%		8.68	%
Allowance for loan and lease losses to loans and leases		1.08	%		1.00	%					1.08	%		1.00	%
Nonperforming assets to total assets		0.15	%		0.06	%					0.15	%		0.06	%
Annualized net charge-offs to average loans and leases		-0.01	%		-0.09	%					-0.01	%		-0.02	%


*		The GAAP based efficiency ratio is noninterest expenses divided by net interest income plus noninterest income from the Consolidated Statements of Income.

		The traditional, non-GAAP efficiency ratio excludes intangible asset amortization from noninterest expenses; excludes securities gains from noninterest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.

Certain reclassifications and restatements of information previously reported have been made to conform with current presentation.

Sandy Spring Bancorp, Inc. and Subsidiaries
Reconciliation of GAAP-based and Traditional Efficiency Ratios
(In thousands, except per share data)


	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2006			2005			2006			2005
Noninterest expenses–GAAP based		22,218		$	20,860			85,096		$	77,194
Net interest income plus noninterest income– GAAP based		33,669			32,829			133,651			125,087

Efficiency ratio–GAAP based		65.99	%		63.54	%		63.67	%		61.71	%


Noninterest expenses–GAAP based	$	22,218		$	20,860		$	85,096		$	77,194
Less non-GAAP adjustment:
Amortization of intangible assets		740			696			2,967			2,198

Noninterest expenses–traditional ratio		21,478			20,164			82,129			74,996

Net interest income plus noninterest income– GAAP based		33,669			32,829			133,651			125,087
Plus non-GAAP adjustment:
Tax-equivalency		1,625			1,800			6,243			7,128
Less non-GAAP adjustments:
Securities gains		0			661			1			3,262

Net interest income plus noninterest income – traditional ratio		35,294			33,968			139,893			128,953

Efficiency ratio – traditional		60.85	%		59.36	%		58.71	%		58.16	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)


	December 31
	2006			2005

Assets
Cash and due from banks	$	54,945		$	47,294
Federal funds sold & overnight investments		48,978			6,149

Cash and cash equivalents		103,923			53,443

Interest-bearing deposits with banks		2,974			751
Residential mortgage loans held for sale (at fair value)		10,595			10,439
Investments available-for-sale (at fair value)		256,845			256,571
Investments held-to-maturity — fair value of $278,415 and $302,966, respectively		267,344			295,648
Other equity securities		16,719			15,213

Total loans and leases		1,805,579			1,684,379
Less: allowance for loan and lease losses		(19,492	)		(16,886	)

Net loans and leases		1,786,087			1,667,493

Premises and equipment, net		47,756			45,385
Accrued interest receivable		15,200			13,144
Goodwill		12,494			12,042
Other intangible assets, net		10,653			12,218
Other assets		79,867			77,269

Total assets	$	2,610,457		$	2,459,616


Liabilities
Noninterest-bearing deposits	$	394,662		$	439,277
Interest-bearing deposits		1,599,561			1,363,933

Total deposits		1,994,223			1,803,210

Short-term borrowings		314,732			380,220
Other long-term borrowings		1,808			2,158
Subordinated debentures		35,000			35,000
Accrued interest payable and other liabilities		26,917			21,145

Total liabilities		2,372,680			2,241,733

Stockholders’ Equity
Common stock — par value $1.00; shares authorized 50,000,000; shares issued and outstanding 14,826,805 and 14,793,987, respectively		14,827			14,794
Additional paid in capital		27,869			26,599
Retained earnings		199,102			177,084
Accumulated other comprehensive income(loss)		(4,021	)		(594	)

Total stockholders’ equity		237,777			217,883

Total liabilities and stockholders’ equity	$	2,610,457		$	2,459,616

Certain reclassifications and restatements of information previously reported have been made to conform with current presentation.

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)


	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2006		2005		2006		2005
Interest income:
Interest and fees on loans and leases	$	32,981	$	26,687	$	125,813	$	94,562
Interest on loans held for sale		225		261		739		1,073
Interest on deposits with banks		105		5		123		63
Interest and dividends on securities:
Taxable		3,642		3,117		14,132		12,327
Exempt from federal income taxes		2,772		3,132		11,555		13,416
Interest on federal funds sold		650		148		1,081		719

Total interest income		40,375		33,350		153,443		122,160
Interest expense:
Interest on deposits		12,488		6,739		39,334		21,482
Interest on short-term borrowings		3,707		3,108		17,049		9,638
Interest on long-term borrowings		575		578		2,304		2,862

Total interest expense		16,770		10,425		58,687		33,982

Net interest income		23,605		22,925		94,756		88,178
Provision for loan and lease losses		250		1,000		2,795		2,600

Net interest income after provision for loan and lease losses		23,355		21,925		91,961		85,578
Noninterest income:
Securities gains		0		661		1		3,262
Service charges on deposit accounts		2,201		1,983		7,903		7,688
Gains on sales of mortgage loans		929		932		2,978		3,757
Fees on sales of investment products		696		551		2,960		2,109
Trust and investment management fees		2,286		2,074		8,762		5,006
Insurance agency commissions		1,345		1,160		6,477		5,309
Income from bank owned life insurance		639		575		2,350		2,259
Visa check fees		631		570		2,381		2,167
Other income		1,337		1,398		5,083		5,352

Total noninterest income		10,064		9,904		38,895		36,909
Noninterest expenses:
Salaries and employee benefits		12,695		12,897		50,518		47,013
Occupancy expense of premises		2,153		2,066		8,493		8,053
Equipment expenses		1,364		1,379		5,476		5,410
Marketing		610		278		2,583		1,225
Outside data services		717		781		3,203		2,940
Amortization of intangible assets		740		696		2,967		2,198
Other expenses		3,939		2,763		11,856		10,355

Total noninterest expenses		22,218		20,860		85,096		77,194

Income before income taxes		11,201		10,969		45,760		45,293
Income tax expense		2,887		2,991		12,889		12,195

Net income	$	8,314	$	7,978	$	32,871	$	33,098

Basic net income per share	$	0.56	$	0.54	$	2.22	$	2.26
Diluted net income per share		0.55		0.54		2.20		2.24
Dividends declared per share		0.22		0.22		0.88		0.84

Certain reclassifications and restatements of information previously reported have been made to conform with current presentation.

Sandy Spring Bancorp, Inc. and Subsidiaries
Historical Trends in Quarterly Financial Data
(Dollars in thousands, except per share data)

2006

2005

Profitability for the quarter:

Tax-equivalent interest income

42,000

41,695

39,372

36,619

35,150

33,244

30,998

29,896

Interest expense

16,770

15,896

14,021

12,000

10,425

8,865

7,705

6,987

Tax-equivalent net interest income

25,230

25,799

25,351

24,619

24,725

24,379

23,293

22,909

Tax-equivalent adjustment

1,625

1,677

1,499

1,442

1,800

1,853

1,766

1,709

Provision for loan and lease losses

250

550

1,045

950

1,000

600

900

100

Noninterest income

10,064

9,590

9,395

9,846

9,904

10,112

9,053

7,840

Noninterest expenses

22,218

21,694

20,828

20,356

20,860

18,744

19,153

18,437

Income before income taxes

11,201

11,468

11,374

11,717

10,969

13,294

10,527

10,503

Income tax expense

2,887

3,346

3,279

3,377

2,991

3,827

2,730

2,647

Net Income

8,314

8,122

8,095

8,340

7,978

9,467

7,797

7,856

Financial ratios:

Return on average assets

1.26

1.24

1.27

1.36

1.31

1.58

1.36

1.39

Return on average equity

13.87

14.06

14.48

15.41

14.76

18.31

15.63

16.20

Net interest margin

4.14

4.25

4.30

4.35

4.38

4.39

Efficiency ratio — GAAP based *

65.99

64.35

62.65

61.64

63.54

57.43

62.63

63.49

Efficiency ratio — traditional *

60.85

59.20

57.81

56.91

59.36

55.74

59.16

58.38

Per share data:

��

Basic net income

0.56

0.55

0.56

0.54

0.65

0.53

0.54

Diluted net income

0.55

0.54

0.56

0.54

0.64

0.53

Dividends declared

0.22

0.21

0.20

Book value

16.04

15.78

15.33

15.06

14.73

14.23

13.91

13.57

Tangible book value

14.48

14.15

13.66

13.34

13.09

13.07

12.72

12.35

Average fully diluted shares

14,940,873

14,915,454

14,884,677

14,924,571

14,886,046

14,735,318

14,719,742

14,760,551

Noninterest income breakdown:

Securities gains

661

1,761

825

Service charges on deposit accounts

2,201

1,904

1,950

1,848

1,983

2,050

1,984

1,671

Gains on sales of mortgage loans

929

718

549

782

932

1,205

889

731

Fees on sales of investment products

696

783

763

718

551

473

640

445

Trust and investment management fees

2,286

2,164

2,196

2,116

2,074

1,116

944

872

Insurance agency commissions

1,345

1,406

1,618

2,108

1,160

1,114

1,224

1,811

Income from bank owned life insurance

639

591

567

553

575

570

559

555

Visa check fees

631

603

612

535

570

556

550

491

Other income

1,337

1,421

1,139

1,186

1,398

1,267

1,438

1,249

Total

10,064

9,590

9,395

9,846

9,904

10,112

9,053

7,840

Noninterest expense breakdown:

Salaries and employee benefits

12,695

12,622

12,730

12,471

12,897

11,373

11,454

11,289

Occupancy expense of premises

2,153

2,175

2,039

2,126

2,066

2,099

1,964

1,924

Equipment expenses

1,364

1,384

1,412

1,316

1,379

1,415

1,294

1,322

Marketing

610

1,160

472

341

278

253

406

288

Outside data services

717

872

833

781

718

701

740

Amortization of intangible assets

740

743

742

696

501

505

496

Other expenses

3,939

2,738

2,600

2,579

2,763

2,385

2,829

2,378

Total

22,218

21,694

20,828

20,356

20,860

18,744

19,153

18,437


*		The GAAP based efficiency ratio is noninterest expenses divided by net interest income plus noninterest income from the Consolidated Statements of Income.

		The traditional, non-GAAP efficiency ratio excludes intangible asset amortization expenses from noninterest expenses; excludes security gains from noninterest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Historical Trends in Quarterly Financial Data.

Sandy Spring Bancorp, Inc. and Subsidiaries
Historical Trends in Quarterly Financial Data
(Dollars in thousands, except per share data)

2006

2005

Balance sheets at quarter end:

Residential mortgage loans

390,852

396,811

386,805

428,698

413,324

400,657

393,961

375,746

Residential construction loans

151,399

175,067

169,564

166,767

155,379

143,691

136,733

139,964

Commercial mortgage loans

509,726

505,181

461,708

425,392

415,983

410,409

390,306

395,528

Commercial construction loans

192,547

185,615

214,628

188,477

178,764

136,606

119,006

94,708

Commercial loans and leases

216,238

204,023

200,712

193,524

185,680

160,379

154,237

150,143

Consumer loans

344,817

348,793

348,547

341,490

335,249

327,393

323,537

312,725

Total loans and leases

1,805,579

1,815,490

1,781,964

1,744,348

1,684,379

1,579,135

1,517,780

1,468,814

Less: allowance for loan and lease losses

(19,492

)

(19,433

)

(18,910

)

(17,860

)

(16,886

)

(16,268

)

(15,673

)

(14,738

)

Net loans and leases

1,786,087

1,796,057

1,763,054

1,726,488

1,667,493

1,562,867

1,502,107

1,454,076

Goodwill

12,494

12,606

12,596

12,042

8,554

Other intangible assets, net

10,653

11,431

12,173

12,916

12,218

8,364

8,865

9,370

Total assets

2,610,457

2,598,458

2,586,353

2,499,577

2,459,616

2,383,360

2,348,305

2,284,198

Total deposits

1,994,223

1,947,850

1,818,347

1,839,355

1,803,210

1,804,888

1,781,622

1,745,675

Customer repurchase agreements

99,382

129,213

235,853

181,520

170,769

158,977

143,873

121,791

Total stockholders’ equity

237,777

233,693

226,738

222,962

217,883

208,090

203,294

198,709

Quarterly average balance sheets:

Residential mortgage loans

407,277

405,430

449,482

427,609

423,805

423,420

401,148

384,504

Residential construction loans

162,084

172,873

167,632

161,649

150,099

141,197

137,720

137,897

Commercial mortgage loans

504,698

465,989

436,036

424,467

407,459

394,862

393,291

389,215

Commercial construction loans

189,027

218,798

206,419

186,606

158,076

128,010

103,584

91,733

Commercial loans and leases

205,582

199,968

196,093

188,747

161,478

154,920

151,766

149,783

Consumer loans

346,030

346,639

345,194

339,299

333,671

327,495

320,276

310,421

Total loans and leases

1,814,698

1,809,697

1,800,856

1,728,377

1,634,588

1,569,904

1,507,785

1,463,553

Securities

544,877

583,156

554,157

555,061

589,552

593,102

591,610

641,960

Total earning assets

2,416,120

2,407,185

2,367,100

2,294,665

2,239,438

2,203,251

2,130,469

2,115,369

Total assets

2,607,848

2,597,917

2,558,458

2,482,512

2,421,725

2,384,327

2,307,888

2,286,209

Total interest-bearing liabilities

1,937,685

1,934,668

1,895,652

1,821,530

1,733,626

1,696,691

1,647,365

1,660,839

Noninterest-bearing demand deposits

407,659

410,912

419,454

418,214

452,738

458,131

440,945

415,824

Total deposits

1,970,953

1,851,098

1,819,255

1,799,213

1,809,237

1,800,171

1,751,192

1,723,667

Customer repurchase agreements

120,597

212,123

196,359

167,620

172,826

155,417

135,009

123,663

Stockholders’ equity

237,746

229,189

224,265

219,424

214,489

205,138

200,047

196,659

Capital and credit quality measures:

Average equity to average assets

9.12

8.82

8.77

8.84

8.86

8.60

8.67

8.60

Loan and lease loss allowance to loans and leases

1.08

1.07

1.06

1.02

1.00

1.03

1.00

Nonperforming assets to total assets

0.15

0.10

0.12

0.06

0.14

0.15

0.10

Annualized net (charge-offs) recoveries to average loans and leases

-0.01

0.00

0.01

(0.09

0.00

0.01

0.00

Miscellaneous data:

Net (charge-offs) recoveries

191

)

382

)

Nonperforming assets:

Non-accrual loans and leases

1,910

1,495

1,691

585

437

1,032

661

672

Loans and leases 90 days past due

1,823

2,346

988

2,473

958

2,289

2,757

1,531

Restructured loans and leases

Other real estate owned, net

182

Total nonperforming assets

3,915

3,841

2,679

3,058

1,395

3,321

3,418

2,276

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)


	Three Months Ended December 31,
	2006								2005
						Annualized								Annualized
	Average					Average			Average					Average
	Balances			Interest		Yield/Rate			Balances			Interest		Yield/Rate
Assets
Residential mortgage loans	$	407,277		$	6,053		5.95	%	$	423,805		$	5,917		5.58	%
Residential construction loans		162,084			2,989		7.32			150,099			2,599		6.87
Commercial mortgage loans		504,698			9,411		7.40			407,459			7,150		6.96
Commercial construction loans		189,027			4,353		9.14			158,076			3,158		7.93
Commercial loans and leases		205,582			4,311		8.33			161,478			3,075		7.56
Consumer loans		346,030			6,089		6.98			333,671			5,050		6.00

Total loans and leases		1,814,698			33,206		7.27			1,634,588			26,949		6.55
Securities		544,877			8,039		5.82			589,552			8,049		5.37
Interest-bearing deposits with banks		8,017			105		5.20			588			4		3.06
Federal funds sold		48,528			650		5.31			14,710			148		4.02

TOTAL EARNING ASSETS		2,416,120			42,000		6.89	%		2,239,438			35,150		6.22	%

Less: allowance for loan and lease losses		(19,354	)							(16,470	)
Cash and due from banks		48,165								48,396
Premises and equipment, net		46,550								45,708
Other assets		116,367								104,653

Total assets	$	2,607,848							$	2,421,725


Liabilities and Stockholders’ Equity
Interest-bearing demand deposits	$	218,005		$	160		0.29	%	$	235,711		$	168		0.28	%
Regular savings deposits		163,525			131		0.32			207,740			229		0.44
Money market savings deposits		495,365			4,553		3.65			373,535			2,074		2.20
Time deposits		686,399			7,644		4.42			539,513			4,267		3.14

Total interest-bearing deposits		1,563,294			12,488		3.17			1,356,499			6,738		1.97
Borrowings		374,391			4,282		4.54			377,127			3,687		3.86

TOTAL INTEREST-BEARING LIABILITIES		1,937,685			16,770		3.43			1,733,626			10,425		2.38


Noninterest-bearing demand deposits		407,659								452,738
Other liabilities		24,758								20,872
Stockholder’s equity		237,746								214,489

Total liabilities and stockholders’ equity	$	2,607,848							$	2,421,725


Net interest income and spread					25,230		3.46	%					24,725		3.84	%

Less: tax equivalent adjustment					1,625								1,800

Net interest income					23,605								22,925


Interest income/earning assets							6.89	%							6.22	%
Interest expense/earning assets							2.75								1.84

Net interest margin							4.14	%							4.38	%


*		Interest income includes the effects of annualized taxable-equivalent adjustments (reduced by the nondeductible portion of interest expense) using the appropriate marginal federal income tax rate of 35.00% and, where applicable, the marginal state income tax rate of 7.00% (or a combined marginal federal and state rate of 39.55%), to increase tax-exempt interest income to a taxable-equivalent basis. The annualized taxable-equivalent adjustment amounts utilized in the above table to compute yields aggregated to $6.5 million in 2006 and $7.4 million in 2005.

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)


	Twelve Months Ended December 31,
	2006								2005
						Annualized								Annualized
	Average					Average			Average					Average
	Balances			Interest		Yield/Rate			Balances			Interest		Yield/Rate
Assets
Residential mortgage loans	$	422,347		$	24,580		5.82	%	$	408,369		$	22,563		5.53	%
Residential construction loans		166,079			12,142		7.31			141,760			9,065		6.39
Commercial mortgage loans		458,040			33,106		7.23			396,253			26,413		6.67
Commercial construction loans		200,270			17,592		8.78			120,554			8,757		7.26
Commercial loans and leases		197,650			15,959		8.07			154,520			10,981		7.11
Consumer loans		344,316			23,172		6.73			323,534			17,856		5.52

Total loans and leases		1,788,702			126,551		7.08			1,544,990			95,635		6.19
Securities		559,350			31,930		5.71			603,882			32,871		5.43
Interest-bearing deposits with banks		2,501			123		4.93			2,095			63		2.96
Federal funds sold		21,145			1,082		5.12			22,082			719		3.26

TOTAL EARNING ASSETS		2,371,698			159,686		6.73	%		2,173,049			129,288		5.95	%

Less: allowance for loan and lease losses		(18,584	)							(15,492	)
Cash and due from banks		46,741								46,682
Premises and equipment, net		45,980								44,945
Other assets		117,838								102,877

Total assets	$	2,563,673							$	2,352,061


Liabilities and Stockholders’ Equity
Interest-bearing demand deposits	$	226,699			657		0.29	%	$	237,511			640		0.27	%
Regular savings deposits		182,610			687		0.38			216,951			801		0.37
Money market savings deposits		409,578			12,655		3.09			376,090			6,268		1.67
Time deposits		631,712			25,335		4.01			498,774			13,773		2.76

Total interest-bearing deposits		1,450,599			39,334		2.71			1,329,326			21,482		1.62
Borrowings		451,251			19,353		4.29			355,537			12,500		3.49

TOTAL INTEREST-BEARING LIABILITIES		1,901,850			58,687		3.08			1,684,863			33,982		2.01


Noninterest-bearing demand deposits		415,747								442,055
Other liabilities		16,716								21,001
Stockholder’s equity		229,360								204,142

Total liabilities and stockholders’ equity	$	2,563,673							$	2,352,061


Net interest income and spread					100,999		3.65	%					95,306		3.94	%

Less: tax equivalent adjustment					6,243								7,128

Net interest income					94,756								88,178


Interest income/earning assets							6.73	%							5.95	%
Interest expense/earning assets							2.47								1.56

Net interest margin							4.26	%							4.39	%


*		Interest income includes the effects of annualized taxable-equivalent adjustments (reduced by the nondeductible portion of interest expense) using the appropriate marginal federal income tax rate of 35.00% and, where applicable, the marginal state income tax rate of 7.00% (or a combined marginal federal and state rate of 39.55%), to increase tax-exempt interest income to a taxable-equivalent basis. The annualized taxable-equivalent adjustment amounts utilized in the above table to compute yields aggregated to $6.2 million in 2006 and $7.1 million in 2005.

Sandy Spring Bancorp (SASR) 8-KResults of Operations and Financial Condition