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

Exhibit 99

NEWS RELEASE

FOR IMMEDIATE RELEASE

SANDY SPRING BANCORP REPORTS
SECOND QUARTER RESULTS, HIGHLIGHTED BY
LOAN AND NONINTEREST INCOME GROWTH

OLNEY, MARYLAND, July 18, 2006 – Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the second quarter of 2006 of $8.1 million ($.54 per diluted share) compared to $7.8 million ($.53 per diluted share) for the second quarter of 2005, an increase of 4%. Net income for the six-month period ending June 30, 2006 totaled $16.4 million ($1.10 per diluted share) compared to $15.7 million ($1.06 per diluted share) for the prior year period, a 5% increase.

“We continue to experience consistent loan growth as evidenced by a 17% increase over the prior year. Our ongoing challenge, given the current interest rate environment and its impact on core deposit gathering, is the need to fund the growth of our loan portfolios with alternative sources of funds,” said Hunter R. Hollar, President and Chief Executive Officer.

“As we noted at the end of the first quarter, the growth trend in noninterest income continues to build in a positive direction, proving the soundness of our strategies for diversifying sources of revenue into fee-based business lines,” said Hollar. “We are continuing to focus on expense control across the organization, while making selected investments that we believe are both prudent and necessary to grow and raise visibility. We recently opened our fifth office in the rapidly expanding Frederick, MD market, and we have been continuing to allocate dollars toward a comprehensive marketing program.”

Sandy Spring Bancorp’s return on average stockholders’ equity was 14.48% for the second quarter of 2006, compared to 15.63% for the same period in the prior year. Return on average assets for the second quarter of 2006 was 1.27%, compared to 1.36% for the second quarter of 2005.

For the first six months of 2006, return on average stockholders’ equity was 14.94% compared to 15.91% for the first six months of 2005. Return on average assets for the first six months of 2006 was 1.31%, compared to 1.37% for the first six months of 2005.

Comparing June 30, 2006 balances to June 30, 2005, total assets increased 10% to $2.6 billion due mainly to growth in the loan portfolio. Total loans and leases increased 17% to $1.8 billion compared to the prior year. Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 7% to $2.1 billion at June 30, 2006. Stockholders’ equity totaled $226.7 million at quarter end, and represented 8.77% of total assets, compared to 8.66% at June 30, 2005.

Due primarily to growth in the loan portfolio, the provision for loan and lease losses totaled $1.0 million for the second quarter of 2006 compared to $0.9 million for the second quarter of 2005. The provision for loan and lease losses totaled $2.0 million for the first six months of 2006 compared to $1.0 million in the same period in 2005. The allowance for loan and lease losses represented 1.06% of outstanding loans at June 30, 2006.

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.

DETAILED REVIEW OF FINANCIAL RESULTS

Comparing the second quarter of 2006 and 2005, net interest income increased by $2.3 million, or 11%, due primarily to continued growth in the loan portfolio which was partially offset by a lower net interest margin. The net interest margin decreased to 4.30% in 2006 from 4.39% in 2005 due primarily to slowing growth in noninterest bearing deposits and increased short-term borrowings within a flat yield curve environment.

Noninterest income increased 4% in the second quarter of 2006 as compared to 2005 due to increases in virtually every business line. Excluding securities gains, noninterest income increased 14% in the second quarter as compared to 2005. Trust and investment management feesincreased 133% 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 32% 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 also increased 19% over the prior year due to increased sales volumes while Visa® check fees increased 11% reflecting a growing volume of electronic banking transactions. These increases were partially offset by a decline of 38% in gains on sales of mortgage loans reflecting lower mortgage loan origination volumes.

Noninterest expenses were $20.8 million in the second quarter of 2006 compared to $19.2 million in 2005, an increase of $1.6 million or 9%. This increase was primarily the result of increases in salaries and benefits due to the acquisition of West Financial Services, Inc. and Neff & Associates and a larger staff. Outside data services grew during the quarter by 19% while marketing expenses increased by 16% over the second quarter of 2005 representing long term investments under the Company’s strategic plan. Intangibles amortization increased $0.2 million or 47% as a result of the above acquisitions.

Stock-based compensation expense of $0.1 million, net of income taxes ($.01 per diluted share) was recorded in the second quarter of 2006 as required under a new accounting standard (SFAS 123R). The Company estimates the full year effect of this new accounting rule to total $0.5 million, net of income taxes ($.03 per diluted share).

Comparing the first six months of 2006 and 2005, net interest income increased by $4.3 million, or 10%, due primarily to continued growth in the loan portfolio which was somewhat offset by a lower net interest margin. The net interest margin decreased to 4.32% in 2006 from 4.39% in 2005 due largely to slowing growth in noninterest deposits and increased short-term borrowings as a result of the flat yield curve environment.

Noninterest income increased 14% in the first six months of 2006 as compared to 2005 due to increases in virtually every business line. Excluding securities gains, noninterest income increased 20% in the first six months of the year over the prior year period. Trust and investment management feesincreased 137% 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 23% 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 also increased 36% over the prior year due to increased sales volumes while Visa® check fees increased 10%. Gains on sales of mortgage loans decreased 18% reflective of market conditions.

Noninterest expenses were $41.2 million in the first six months of 2006 compared to $37.6 million in 2005, an increase of $3.6 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 and a larger staff. Outside data services increased 12% for the year to date while marketing expenses increased by 17% over the prior year period in accord with the Company’s strategic plan as mentioned above. Intangibles amortization increased $0.5 million or 48% as a result of the above acquisitions.

Stock-based compensation expense of $0.2 million, net of income taxes ($.02 per diluted share) was recorded in the first six months of 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 32 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland and 77 ATMs located throughout Maryland. Through its subsidiaries, the Bank also offers a comprehensive menu of leasing, insurance and investment management services. Visit www.sandyspringbank.com for more information.

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.

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

		Three Months Ended June 30,							Six Months Ended June 30,
		2006			2005		% Change		2006			2005		% Change
Profitability for the period:
Net interest income	$	23,852		$	21,527		11	$	47,029		$	42,727		10
Provision for loan and lease losses		1,045			900		16		1,995			1,000		100
Noninterest income		9,395			9,053		4		19,241			16,893		14
Noninterest expenses		20,828			19,153		9		41,184			37,590		10
Income before income taxes		11,374			10,527		8		23,091			21,030		10
Net income	$	8,095			7,797		4	$	16,435		$	15,653		5
Return on average assets		1.27	%		1.36	%			1.31	%		1.37	%
Return on average equity		14.48	%		15.63	%			14.94	%		15.91	%
Net interest margin		4.30	%		4.39	%			4.32	%		4.39	%
Efficiency ratio – GAAP based *		62.65	%		62.63	%			62.15	%		63.05	%
Efficiency ratio – traditional *		57.81	%		59.16	%			57.36	%		58.77	%
Per share data:
Basic net income	$	0.55		$	0.53		4	$	1.11		$	1.07		4
Diluted net income		0.54			0.53		2		1.10			1.06		4
Dividends declared		0.22			0.21		5		0.44			0.41		7
Book value		15.33			13.91		10		15.33			13.91		10
Tangible book value		13.78			12.72		8		13.78			12.72		8
Average fully diluted shares		14,884,677			14,719,742				14,886,115			14,740,323
At period-end:
Assets	$	2,586,353		$	2,348,305		10	$	2,586,353		$	2,348,305		10
Deposits		1,818,347			1,781,622		2		1,818,347			1,781,622		2
Loans and leases		1,781,964			1,517,780		17		1,781,964			1,517,780		17
Securities		588,552			577,905		2		588,552			577,905		2
Stockholders' equity		226,738			203,294		12		226,738			203,294		12
Capital and credit quality ratios:
Average equity to average assets		8.77	%		8.67	%			8.80	%		8.62	%
Allowance for loan and lease losses to loans and leases		1.06	%		1.03	%			1.06	%		1.03	%
Nonperforming assets to total assets		0.10	%		0.15	%			0.10	%		0.15	%
Annualized net charge-offs to average loans and leases		0.00	%		0.01	%			0.00	%		0.00	%

*	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 June 30,						Six Months Ended June 30,
		2006			2005			2006			2005
Noninterest expenses–GAAP based		20,828		$	19,153			41,184		$	37,590
Net interest income plus noninterest income–
GAAP based		33,247			30,580			66,270			59,620
Efficiency ratio–GAAP based		62.65	%		62.63	%		62.15	%		63.05	%
Noninterest expenses–GAAP based	$	20,828		$	19,153		$	41,184		$	37,590
Less non-GAAP adjustment:
Amortization of intangible assets		742			505			1,484			1,001
Noninterest expenses–traditional ratio		20,086			18,648			39,700			36,589
Net interest income plus noninterest income–
GAAP based		33,247			30,580			66,270			59,620
Plus non-GAAP adjustment:
Tax-equivalency		1,499			1,766			2,941			3,475
Less non-GAAP adjustments:
Securities gains		1			825			1			840
Net interest income plus noninterest income – traditional ratio		34,745			31,521			69,210			62,255
Efficiency ratio – traditional		57.81	%		59.16	%		57.36	%		58.77	%

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

	June 30							December 31
		2006			2005			2005
Assets
Cash and due from banks	$	48,354		$	54,258		$	47,294
Federal funds sold		11,258			33,934			6,149
Cash and cash equivalents		59,612			88,192			53,443
Interest-bearing deposits with banks		436			9,120			751
Residential mortgage loans held for sale (at fair value)		9,450			20,052			10,439
Investments available-for-sale (at fair value)		291,167			262,792			256,571
Investments held-to-maturity – fair value of $282,438 $311,636 and $302,966, respectively		279,221			302,362			295,648
Other equity securities		18,164			12,751			15,213
Total loans and leases		1,781,964			1,517,780			1,684,379
Less: allowance for loan and lease losses		(18,910	)		(15,673	)		(16,886	)
Net loans and leases		1,763,054			1,502,107			1,667,493
Premises and equipment, net		45,616			45,678			45,385
Accrued interest receivable		13,894			11,770			13,144
Goodwill		10,836			8,554			10,272
Other intangible assets, net		12,173			8,865			12,218
Other assets		82,730			76,062			79,039
Total assets	$	2,586,353		$	2,348,305		$	2,459,616
Liabilities
Noninterest-bearing deposits	$	420,744		$	467,630		$	439,277
Interest-bearing deposits		1,397,603			1,313,992			1,363,933
Total deposits		1,818,347			1,781,622			1,803,210
Short-term borrowings		484,203			279,424			380,220
Other long-term borrowings		1,983			29,333			2,158
Subordinated debentures		35,000			35,000			35,000
Accrued interest payable and other liabilities		20,082			19,632			21,145
Total liabilities		2,359,615			2,145,011			2,241,733
Stockholders' Equity
Common stock – par value $1.00; shares authorized 50,000,000; shares issued and outstanding 14,785,758, 14,614,739 and 14,793,987, respectively		14,786			14,615			14,794
Additional paid in capital		26,565			20,815			26,599
Retained earnings		187,016			165,970			177,084
Accumulated other comprehensive income(loss)		(1,629	)		1,894			(594	)
Total stockholders' equity		226,738			203,294			217,883
Total liabilities and stockholders' equity	$	2,586,353		$	2,348,305		$	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 June 30,				Six Months Ended June 30,
		2006		2005		2006		2005
Interest income:
Interest and fees on loans and leases	$	31,287	$	22,411	$	60,145	$	43,452
Interest on loans held for sale		142		223		292		390
Interest on deposits with banks		4		22		14		26
Interest and dividends on securities:
Taxable		3,369		2,957		6,400		6,285
Exempt from federal income taxes		2,928		3,415		5,944		7,009
Interest on federal funds sold		143		204		255		257
Total interest income		37,873		29,232		73,050		57,419
Interest expense:
Interest on deposits		8,794		4,855		16,468		9,043
Interest on short-term borrowings		4,650		2,099		8,399		4,117
Interest on long-term borrowings		577		751		1,154		1,532
Total interest expense		14,021		7,705		26,021		14,692
Net interest income		23,852		21,527		47,029		42,727
Provision for loan and lease losses		1,045		900		1,995		1,000
Net interest income after provision for loan and lease losses		22,807		20,627		45,034		41,727
Noninterest income:
Securities gains		1		825		1		840
Service charges on deposit accounts		1,950		1,984		3,798		3,655
Gains on sales of mortgage loans		549		889		1,331		1,620
Fees on sales of investment products		763		640		1,481		1,085
Trust and investment management fees		2,196		944		4,312		1,816
Insurance agency commissions		1,618		1,224		3,726		3,035
Income from bank owned life insurance		567		559		1,120		1,114
Visa check fees		612		550		1,147		1,041
Other income		1,139		1,438		2,325		2,687
Total noninterest income		9,395		9,053		19,241		16,893
Noninterest expenses:
Salaries and employee benefits		12,730		11,454		25,201		22,743
Occupancy expense of premises		2,039		1,964		4,165		3,888
Equipment expenses		1,412		1,294		2,728		2,616
Marketing		472		406		813		694
Outside data services		833		701		1,614		1,441
Amortization of intangible assets		742		505		1,484		1,001
Other expenses		2,600		2,829		5,179		5,207
Total noninterest expenses		20,828		19,153		41,184		37,590
Income before income taxes		11,374		10,527		23,091		21,030
Income tax expense		3,279		2,730		6,656		5,377
Net income	$	8,095	$	7,797	$	16,435	$	15,653
Basic net income per share	$	0.55	$	0.53	$	1.11	$	1.07
Diluted net income per share		0.54		0.53		1.10		1.06
Dividends declared per share		0.22		0.21		0.44		0.41

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
		Q2			Q1			Q4			Q3			Q2			Q1
Profitability for the quarter:
Tax-equivalent interest income	$	39,372		$	36,619		$	35,150		$	33,244		$	30,998		$	29,896
Interest expense		14,021			12,000			10,425			8,865			7,705			6,987
Tax-equivalent net interest income		25,351			24,619			24,725			24,379			23,293			22,909
Tax-equivalent adjustment		1,499			1,442			1,800			1,853			1,766			1,709
Provision for loan and lease losses		1,045			950			1,000			600			900			100
Noninterest income		9,395			9,846			9,904			10,112			9,053			7,840
Noninterest expenses		20,828			20,356			20,860			18,744			19,153			18,437
Income before income taxes		11,374			11,717			10,969			13,294			10,527			10,503
Income tax expense		3,279			3,377			2,991			3,827			2,730			2,647
Net Income		8,095			8,340			7,978			9,467			7,797			7,856
Financial ratios:
Return on average assets		1.27	%		1.36	%		1.31	%		1.58	%		1.36	%		1.39	%
Return on average equity		14.48	%		15.41	%		14.76	%		18.31	%		15.63	%		16.20	%
Net interest margin		4.30	%		4.35	%		4.38	%		4.39	%		4.39	%		4.39	%
Efficiency ratio – GAAP based *		62.65	%		61.64	%		63.54	%		57.43	%		62.63	%		63.49	%
Efficiency ratio – traditional *		57.81	%		56.91	%		59.36	%		55.74	%		59.16	%		58.38	%
Per share data:
Basic net income	$	0.55		$	0.56		$	0.54		$	0.65		$	0.53		$	0.54
Diluted net income	$	0.54		$	0.56		$	0.54		$	0.64		$	0.53		$	0.53
Dividends declared	$	0.22		$	0.22		$	0.22		$	0.21		$	0.21		$	0.20
Book value	$	15.33		$	15.06		$	14.73		$	14.23		$	13.91		$	13.57
Tangible book value	$	13.78		$	13.46		$	13.21		$	13.07		$	12.72		$	12.35
Average fully diluted shares		14,884,677			14,924,571			14,886,046			14,735,318			14,719,742			14,760,551
Noninterest income breakdown:
Securities gains	$	1		$	0		$	661		$	1,761		$	825		$	15
Service charges on deposit accounts		1,950			1,848			1,983			2,050			1,984			1,671
Gains on sales of mortgage loans		549			782			932			1,205			889			731
Fees on sales of investment products		763			718			551			473			640			445
Trust and investment management fees		2,196			2,116			2,074			1,116			944			872
Insurance agency commissions		1,618			2,108			1,160			1,114			1,224			1,811
Income from bank owned life insurance		567			553			575			570			559			555
Visa check fees		612			535			570			556			550			491
Other income		1,139			1,186			1,398			1,267			1,438			1,249
Total		9,395			9,846			9,904			10,112			9,053			7,840
Noninterest expense breakdown:
Salaries and employee benefits	$	12,730		$	12,471		$	12,897		$	11,373		$	11,454		$	11,289
Occupancy expense of premises		2,039			2,126			2,066			2,099			1,964			1,924
Equipment expenses		1,412			1,316			1,379			1,415			1,294			1,322
Marketing		472			341			278			253			406			288
Outside data services		833			781			781			718			701			740
Amortization of intangible assets		742			742			696			501			505			496
Other expenses		2,600			2,579			2,763			2,385			2,829			2,378
Total		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 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
		Q2			Q1			Q4			Q3			Q2			Q1
Balance sheets at quarter end:
Residential mortgage loans	$	386,805		$	428,698		$	413,324		$	400,657		$	393,961		$	375,746
Residential construction loans		169,564			166,767			155,379			143,691			136,733			139,964
Commercial mortgage loans		461,708			425,392			415,983			410,409			390,306			395,528
Commercial construction loans		214,628			188,477			178,764			136,606			119,006			94,708
Commercial loans and leases		200,712			193,524			185,680			160,379			154,237			150,143
Consumer loans		348,547			341,490			335,249			327,393			323,537			312,725
Total loans and leases		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		(18,910	)		(17,860	)		(16,886	)		(16,268	)		(15,673	)		(14,738	)
Net loans and leases		1,763,054			1,726,488			1,667,493			1,562,867			1,502,107			1,454,076
Goodwill		10,836			10,826			10,272			8,554			8,554			8,554
Other intangible assets, net		12,173			12,916			12,218			8,364			8,865			9,370
Total assets		2,586,353			2,499,577			2,459,616			2,383,360			2,348,305			2,284,198
Total deposits		1,818,347			1,839,355			1,803,210			1,804,888			1,781,622			1,745,675
Customer repurchase agreements		235,853			181,520			170,769			158,977			143,873			121,791
Total stockholders' equity		226,738			222,962			217,883			208,090			203,294			198,709
Quarterly average balance sheets:
Residential mortgage loans	$	449,482		$	427,609		$	423,805		$	423,420		$	401,148		$	384,504
Residential construction loans		167,632			161,649			150,099			141,197			137,720			137,897
Commercial mortgage loans		436,036			424,467			407,459			394,862			393,291			389,215
Commercial construction loans		206,419			186,606			158,076			128,010			103,584			91,733
Commercial loans and leases		196,093			188,747			161,478			154,920			151,766			149,783
Consumer loans		345,194			339,299			333,671			327,495			320,276			310,421
Total loans and leases		1,800,856			1,728,377			1,634,588			1,569,904			1,507,785			1,463,553
Securities		554,157			555,061			589,552			593,102			591,610			641,960
Total earning assets		2,367,100			2,294,665			2,239,438			2,203,251			2,130,469			2,115,369
Total assets		2,558,458			2,482,512			2,421,725			2,384,327			2,307,888			2,286,209
Total interest-bearing liabilities		1,895,652			1,821,530			1,733,626			1,696,691			1,647,365			1,660,839
Noninterest-bearing demand deposits		419,454			418,214			452,738			458,131			440,945			415,824
Total deposits		1,819,255			1,799,213			1,809,237			1,800,171			1,751,192			1,723,667
Customer repurchase agreements		196,359			167,620			172,826			155,417			135,009			123,663
Stockholders' equity		224,265			219,424			214,489			205,138			200,047			196,659
Capital and credit quality measures:
Average equity to average assets		8.77	%		8.84	%		8.86	%		8.60	%		8.67	%		8.60	%
Loan and lease loss allowance to loans and leases		1.06	%		1.02	%		1.00	%		1.03	%		1.03	%		1.00	%
Nonperforming assets to total assets		0.10	%		0.12	%		0.06	%		0.14	%		0.15	%		0.10	%
Annualized net (charge-offs) recoveries to average loans and leases		0.00	%		0.01	%		(0.09	)%		0.00	%		0.01	%		0.00	%
Miscellaneous data:
Net (charge-offs) recoveries	$	29		$	24			($382)			($5)		$	35			($16)
Nonperforming assets:
Non-accrual loans and leases		1,691			585			437			1,032			661			672
Loans and leases 90 days past due		988			2,473			958			2,289			2,757			1,531
Restructured loans and leases		0			0			0			0			0			0
Other real estate owned, net		0			0			0			0			0			73
Total nonperforming assets		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 June 30,
	2006							2005
						Annualized							Annualized
		Average				Average			Average				Average
		Balances			Interest	Yield/Rate			Balances			Interest	Yield/Rate
Assets
Residential mortgage loans	$	449,482		$	6,458	5.74	%	$	401,148		$	5,496	5.48	%
Residential construction loans		167,632			3,046	7.29			137,720			2,145	6.25
Commercial mortgage loans		436,036			7,857	7.20			393,291			6,379	6.51
Commercial construction loans		206,419			4,468	8.74			103,584			1,777	6.88
Commercial loans and leases		196,093			3,938	8.05			151,766			2,636	6.96
Consumer loans		345,194			5,662	6.58			320,276			4,201	5.26
Total loans and leases		1,800,856			31,429	7.00			1,507,785			22,634	6.02
Securities		554,157			7,796	5.68			591,610			8,138	5.51
Interest-bearing deposits with banks		481			4	3.06			2,996			22	2.87
Federal funds sold		11,606			143	4.95			28,078			204	2.91
TOTAL EARNING ASSETS		2,367,100			39,372	6.68	%		2,130,469			30,998	5.83	%
Less: allowance for loan and lease losses		(18,446	)						(15,037	)
Cash and due from banks		46,705							46,358
Premises and equipment, net		45,714							44,951
Other assets		117,385							101,147
Total assets	$	2,558,458						$	2,307,888
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	233,156		$	163	0.28	%	$	239,446		$	160	0.27	%
Regular savings deposits		190,322			188	0.40			216,242			181	0.34
Money market savings deposits		363,123			2,557	2.82			375,803			1,433	1.53
Time deposits		613,200			5,886	3.85			478,756			3,081	2.58
Total interest-bearing deposits		1,399,801			8,794	2.52			1,310,247			4,855	1.49
Borrowings		495,851			5,227	4.23			337,118			2,850	3.36
TOTAL INTEREST-BEARING LIABILITIES		1,895,652			14,021	2.97			1,647,365			7,705	1.87
Noninterest-bearing demand deposits		419,454							440,945
Other liabilities		19,087							19,531
Stockholder's equity		224,265							200,047
Total liabilities and stockholders' equity	$	2,558,458						$	2,307,888
Net interest income and spread				$	25,351	3.71	%				$	23,293	3.96	%
Less: tax equivalent adjustment					1,499							1,766
Net interest income					23,852							21,527
Interest income/earning assets						6.68	%						5.83	%
Interest expense/earning assets						2.38							1.45
Net interest margin						4.30	%						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 $6.0 million in 2006 and $7.1 million in 2005.

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

	Six Months Ended June 30,
	2006								2005
							Annualized							Annualized
		Average					Average			Average				Average
		Balances			Interest		Yield/Rate			Balances			Interest	Yield/Rate
Assets
Residential mortgage loans	$	438,606		$	12,591		5.74	%	$	392,872		$	10,725	5.46	%
Residential construction loans		164,657			5,880		7.20			137,808			4,140	6.06
Commercial mortgage loans		430,283			15,200		7.11			391,265			12,537	6.46
Commercial construction loans		196,568			8,275		8.52			97,691			3,227	6.66
Commercial loans and leases		192,440			7,547		7.90			150,780			5,104	6.82
Consumer loans		342,263			10,943		6.45			316,369			8,109	5.17
Total loans and leases		1,764,817			60,436		6.89			1,486,785			43,842	5.93
Securities		554,606			15,285		5.60			616,646			16,769	5.50
Interest-bearing deposits with banks		718			14		3.93			1,917			26	2.71
Federal funds sold		10,941			256		4.71			18,606			257	2.77
TOTAL EARNING ASSETS		2,331,082			75,991	��	6.57	%		2,123,954			60,894	5.78	%
Less: allowance for loan and lease losses		(17,884	)							(14,852	)
Cash and due from banks		46,140								44,880
Premises and equipment, net		45,663								44,045
Other assets		115,620								102,224
Total assets	$	2,520,621							$	2,300,251
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	234,854			328		0.28	%	$	238,547			307	0.26	%
Regular savings deposits		194,777			403		0.42			221,716			360	0.33
Money market savings deposits		367,380			4,906		2.69			375,643			2,515	1.35
Time deposits		593,441			10,832		3.68			473,146			5,861	2.50
Total interest-bearing deposits		1,390,452			16,469		2.39			1,309,052			9,043	1.39
Borrowings		468,343			9,552		4.11			345,013			5,649	3.27
TOTAL INTEREST-BEARING LIABILITIES		1,858,795			26,021		2.82			1,654,065			14,692	1.78
Noninterest-bearing demand deposits		418,838								428,454
Other liabilities		21,130								19,352
Stockholder's equity		221,858								198,380
Total liabilities and stockholders' equity	$	2,520,621							$	2,300,251
Net interest income and spread				$	49,970		3.75	%				$	46,202	3.99	%
Less: tax equivalent adjustment					2,941								3,475
Net interest income					47,029								42,727
Interest income/earning assets							6.57	%						5.78	%
Interest expense/earning assets							2.25							1.39
Net interest margin							4.32	%						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 $5.9 million in 2006 and $7.0 million in 2005.