Sandy Spring Bancorp 8K Reports First Quarter Results | SASR 22 Apr 08

NEWS RELEASE

FOR IMMEDIATE RELEASE

SANDY SPRING BANCORP REPORTS FIRST QUARTER RESULTS

OLNEY, MARYLAND, April 22, 2008 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the first quarter of 2008 of $8.2 million ($.50 per diluted share) compared to $7.5 million ($.49 per diluted share) for the first quarter of 2007 and $8.4 million ($.51 per diluted share) for the linked fourth quarter of 2007.

Sandy Spring Bancorp’s return on average stockholders’ equity was 10.45% for the first quarter of 2008, compared to 11.96% for the same period in the prior year. Return on average assets for the first quarter of 2008 was 1.07%, compared to 1.12% for the first quarter of 2007.

First Quarter Highlights:

Net interest income increased 11% for the quarter over the prior year period and decreased 3% versus the linked fourth quarter of 2007.

Noninterest income increased 16% for the quarter over the prior year period and 12% over the linked fourth quarter of 2007.

Loans and deposits increased 4% and 3% respectively for the quarter, compared to December 31, 2007.

The provision for loan and lease losses totaled $2.7 million for the quarter compared to $0.8 million for the first quarter of 2007 and $1.7 million for the linked fourth quarter of 2007 in response to a larger portfolio and a higher level of nonperforming loans.

Net interest margin declined to 3.99% for the first quarter compared to 4.07% for the prior year quarter and 4.19% for the linked fourth quarter of 2007.

Noninterest expenses increased 5% compared to the prior year and decreased 2% compared to the linked fourth quarter of 2007.

“We continued to produce consistent financial results during the first quarter in the face of one of the most challenging economic environments in years. Market conditions continued to decline as the Federal Reserve reduced interest rates three times and instituted several new lending facilities, all with the intent to provide necessary liquidity to the markets. The interest rate reductions had a direct effect on our net interest margin which decreased to 3.99% for the quarter compared to 4.07% for the prior year quarter and 4.19% for the linked fourth quarter of 2007, as our loan yields declined faster than the rates paid on deposits,” said Hunter R. Hollar, Chief Executive Officer of Sandy Spring Bancorp. “Our non-performing assets increased from the fourth quarter as a result of the condition of the real estate market and its inevitable effect on new home builders. We continue to believe that our strong and conservative loan underwriting standards will minimize potential losses as evidenced by our historically low levels of net charge-offs.”

“We began implementation of our strategic business improvement program, titled LIFT (Looking Inward for Tomorrow). This included an adjustment of certain staffing levels and putting into place new, more stringent expense control policies during the quarter. Together with several reductions in benefit plans, these efforts have begun to show results as our noninterest expenses decreased for the second consecutive quarter,” said Hollar. “This reduction in noninterest expenses together with a 16% increase in noninterest income in the quarter produced an improved efficiency ratio of 59.2% compared to 63.0% for the prior year quarter and 60.2% for the linked fourth quarter of 2007.”

LIFT Progress

Noninterest expenses decreased 2% over the linked fourth quarter of 2007. Consistent with our cost savings expectations from LIFT, salary expense decreased by $.5 million or 5%, inclusive of planned severance related costs. Expenses related to corporate benefits plans and discretionary spending decreased by $.8 million or 20%. In particular were decreases in pension expense and consulting/professional fees by 72% and 54% respectively. Overall discretionary spending decreased by 37% over the linked fourth quarter of 2007 significantly contributing to the $1.0 million or 20% decline in other expenses.

Review of Balance Sheet and Credit Quality

Comparing March 31, 2008 balances to March 31, 2007, total assets increased 7% to $3.2 billion due mainly to the acquisition of County National Bank (“County”) in the second quarter of 2007 together with steady growth in the commercial loan portfolio. Total loans and leases increased 16% to $2.4 billion compared to the prior year. Compared to the linked fourth quarter of 2007, total loans increased 4%. The County acquisition accounted for approximately 26% of the year-over-year loan growth. Excluding this acquisition, the loan portfolio increased 12% over the first quarter of the prior year.

This increase was comprised mainly of a 14% increase in commercial loans. Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 2% to $2.4 billion at March 31, 2008 compared to the prior year. Excluding the County acquisition, such funding sources declined 3% compared to the prior year quarter. On a linked quarter basis, such customer funding sources increased 3% compared to the fourth quarter of 2007. This increase was due primarily to managed growth in interest bearing deposits to maintain the Company’s liquidity position and to fund loan growth. Stockholders’ equity totaled $319.0 million at quarter-end, and represented 10.1% of total assets, compared to 9.3% at March 31, 2007.

The provision for loan and lease losses totaled $2.7 million for the first quarter of 2008 compared to $0.8 million for the first quarter of 2007 and $1.7 million for the linked fourth quarter of 2007. The allowance for loan and lease losses represented 1.18% of outstanding loans at March 31, 2008.

Non-performing assets totaled $46.9 million at March 31, 2008 compared to $34.9 million at December 31, 2007 and $7.0 million at March 31, 2007. The increase over the linked fourth quarter of 2007 was due primarily to two commercial construction loans totaling $11.3 million which management believes are adequately reserved or well secured. The increase over the prior year also reflects a commercial real estate loan and two commercial construction loans totaling $19.5 million which management believes are also adequately reserved or well secured.

Income Statement Review

Comparing the first quarter of 2008 and 2007, net interest income increased by $2.6 million, or 11%, due primarily to continued growth in the loan portfolio which was offset by rapidly declining market interest rates that caused loan yields to decline faster than yields on deposits due to the Company’s asset sensitive position. These factors produced a net interest margin decrease to 3.99% in 2008 from 4.07% in 2007.

Noninterest income increased to $12.7 million in the first quarter of 2008 as compared to $10.9 million in 2007, an increase of 16%. Service charges on deposit accounts increased 31% due primarily to higher overdraft fees while Visa® check fees increased 18% reflecting continued growth in electronic transactions. Trust and investment management fees increased 5% due primarily to growth in assets under management. Securities gains increased $0.6 million compared to the first quarter of 2007 due primarily to a gain of $0.4 million which was realized from the redemption of stock in Visa, Inc. Other noninterest income increased 81% primarily due to higher accrued gains on mortgage commitments resulting from adoption of a new accounting pronouncement. These increases were somewhat offset by a decrease of 22% in insurance agency commissions due to lower fees on commercial lines and reduced contingency fees.

Noninterest expenses were $24.7 million in the first quarter of 2008 compared to $23.6 million in 2007, an increase of $1.1 million or 5%. Occupancy expenses increased 16% due to higher rent and utility expenses from an expanded branch network. Outside data services increased 21% due mainly to the overall growth in the loan and deposit portfolios and the branches added from the recent acquisitions. Other expenses remained virtually level due largely to the effect of project LIFT. Intangibles amortization increased $0.3 million or 40% as a result of the two acquisitions.

Conference Call

The Company’s management will host a conference call to discuss its first 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 800-860-2442; 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 a.m. (ET) May 28, 2008. A telephone voice replay will also be available during that same time period at 877-344-7529. Please use pass code #418255 to access.

About Sandy Spring Bancorp/Sandy Spring Bank

With $3.2 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 second 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 42 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland, and Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring 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, Chief Executive Officer, or

Daniel J. Schrider, President, 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

DSchrider@sandyspringbank.com

PMantua@sandyspringbank.com

Web site: www.sandyspringbank.com

Forward-Looking Statements

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

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

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company’s loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company’s ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2007, 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)
(Dollars in thousands, except per share data)

	Three Months Ended
	March 31,						%
	2008			2007			Change
Profitability for the period:
Net interest income	$	26,579		$	24,015			11
Provision for loan and lease losses		2,667			839			218
Noninterest income		12,696			10,906			16
Noninterest expenses		24,703			23,614			5
Income before income taxes		11,905			10,468			14
Net income	$	8,205		$	7,545			9

Return on average assets		1.07	%		1.12	%
Return on average equity		10.45	%		11.96	%
Net interest margin		3.99	%		4.07	%
Efficiency ratio - GAAP based *		62.90	%		67.62	%
Efficiency ratio - traditional *		59.18	%		63.01	%

Per share data:
Basic net income	$	0.50		$	0.49			2
Diluted net income		0.50			0.49			2
Dividends declared		0.24			0.23			4
Book value		19.50			17.51			11
Tangible book value		13.77			13.11			5
Average fully diluted shares		16,407,778			15,400,865

At period-end:
Assets	$	3,160,896		$	2,945,477			7
Deposits		2,340,568			2,274,322			3
Total Loans and leases		2,364,023			2,036,182			16
Securities		434,987			560,940			(22	)
Stockholders' equity		318,967			275,319			16

Capital and credit quality ratios:
Average equity to average assets		10.28	%		9.32	%
Allowance for loan and lease losses to loans and leases		1.18	%		1.09	%
Nonperforming assets to total assets		1.48	%		0.24	%
Annualized net charge-offs (recoveries) to average
loans and leases		(0.02	)%		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 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 (Unaudited)
(In thousands, except per share data)

	Three Months Ended,
	March 31,
	2008			2007
Noninterest expenses–GAAP based	$	24,703		$	23,614
Net interest income plus noninterest income–
GAAP based		39,275			34,921

Efficiency ratio–GAAP based		62.90	%		67.62	%

Noninterest expenses–GAAP based	$	24,703		$	23,614
Less non-GAAP adjustment:
Amortization of intangible assets		1,124			802
Noninterest expenses–traditional ratio		23,579			22,812

Net interest income plus noninterest income–
GAAP based		39,275			34,921
Plus non-GAAP adjustment:
Tax-equivalency		1,140			1,285
Less non-GAAP adjustments:
Securities gains		574			2
Net interest income plus noninterest
income – traditional ratio		39,841			36,204

Efficiency ratio – traditional		59.18	%		63.01	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
	March 31 (Unaudited)						December 31
	2008			2007			2007
Assets
Cash and due from banks	$	66,536		$	61,145		$	63,432
Federal funds sold		48,032			48,138			22,055
Cash and cash equivalents		114,568			109,283			85,487

Interest-bearing deposits with banks		11,112			28,192			365
Residential mortgage loans held for sale (at fair value)		9,876			9,660			7,089
Investments available-for-sale (at fair value)		206,840			282,023			186,801
Investments held-to-maturity - fair value of $209,937,
$266,937 and $240,995, respectively		202,344			261,208			234,706
Other equity securities		25,803			17,709			23,766

Total loans and leases		2,364,023			2,036,182			2,277,031
Less: allowance for loan and lease losses		(27,887	)		(22,186	)		(25,092	)
Net loans and leases		2,336,136			2,013,996			2,251,939

Premises and equipment, net		53,780			50,834			54,457
Accrued interest receivable		13,201			16,485			14,955
Goodwill		78,111			53,913			76,585
Other intangible assets, net		15,507			15,244			16,630
Other assets		93,618			86,930			91,173
Total assets	$	3,160,896		$	2,945,477		$	3,043,953

Liabilities
Noninterest-bearing deposits	$	445,088		$	449,604		$	434,053
Interest-bearing deposits		1,895,480			1,824,718			1,839,815
Total deposits		2,340,568			2,274,322			2,273,868

Short-term borrowings		372,625			325,657			373,972
Other long-term borrowings		67,312			8,274			17,553
Subordinated debentures		35,000			35,000			35,000
Accrued interest payable and other liabilities		26,424			26,905			27,920
Total liabilities		2,841,929			2,670,158			2,728,313

Stockholders' Equity
Common stock -- par value $1.00; shares authorized
50,000,000; shares issued and outstanding 16,361,444,
15,724,895 and 16,349,317, respectively		16,361			15,725			16,349
Additional paid in capital		84,281			60,520			83,970
Retained earnings		219,019			203,044			216,376
Accumulated other comprehensive loss		(694	)		(3,970	)		(1,055	)
Total stockholders' equity		318,967			275,319			315,640
Total liabilities and stockholders' equity	$	3,160,896		$	2,945,477		$	3,043,953

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

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)	Three Months Ended
	March 31,
	2008		2007
Interest income:
Interest and fees on loans and leases	$	38,469	$	34,574
Interest on loans held for sale		96		195
Interest on deposits with banks		49		90
Interest and dividends on securities:
Taxable		2,698		3,871
Exempt from federal income taxes		2,331		2,727
Interest on federal funds sold		279		437
Total interest income		43,922		41,894
Interest expense:
Interest on deposits		13,022		13,788
Interest on short-term borrowings		3,279		3,481
Interest on long-term borrowings		1,042		610
Total interest expense		17,343		17,879
Net interest income		26,579		24,015
Provision for loan and lease losses		2,667		839
Net interest income after provision for loan and lease losses		23,912		23,176
Noninterest income:
Securities gains		574		2
Service charges on deposit accounts		3,030		2,308
Gains on sales of mortgage loans		722		638
Fees on sales of investment products		822		800
Trust and investment management fees		2,397		2,281
Insurance agency commissions		2,086		2,690
Income from bank owned life insurance		714		684
Visa check fees		696		590
Other income		1,655		913
Total noninterest income		12,696		10,906
Noninterest expenses:
Salaries and employee benefits		13,763		13,434
Occupancy expense of premises		2,799		2,417
Equipment expenses		1,439		1,602
Marketing		497		529
Outside data services		1,122		926
Amortization of intangible assets		1,124		802
Other expenses		3,959		3,904
Total noninterest expenses		24,703		23,614
Income before income taxes		11,905		10,468
Income tax expense		3,700		2,923
Net income	$	8,205	$	7,545
Basic net income per share	$	0.50	$	0.49
Diluted net income per share		0.50		0.49
Dividends declared per share		0.24		0.23

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

Sandy Spring Bancorp, Inc. and Subsidiaries

Historical Trends in Quarterly Financial Data (Unaudited)

2008

2007

(Dollars in thousands, except per share data)

Profitability for the quarter:

Tax-equivalent interest income

45,062

47,519

48,405

47,378

43,179

Interest expense

17,343

18,709

19,746

19,815

17,879

Tax-equivalent net interest income

27,719

28,810

28,659

27,563

25,300

Tax-equivalent adjustment

1,140

1,410

1,447

1,364

1,285

Provision for loan and lease losses

2,667

1,725

750

780

839

Noninterest income

12,696

11,380

11,130

10,873

10,906

Noninterest expenses

24,703

25,316

25,899

24,959

23,614

Income before income taxes

11,905

11,739

11,693

11,333

10,468

Income tax expense

3,700

3,372

3,512

3,164

2,923

Net Income

8,205

8,367

8,181

8,169

7,545

Financial ratios:

Return on average assets

1.07

1.10

1.08

1.10

1.12

Return on average equity

10.45

10.69

10.55

11.45

11.96

Net interest margin

3.99

4.19

4.16

4.08

4.07

Efficiency ratio - GAAP based *

62.90

65.28

67.55

67.33

67.62

Efficiency ratio - traditional *

59.18

60.22

62.30

62.26

63.01

Per share data:

Basic net income

0.50

0.51

0.50

0.51

0.49

Diluted net income

0.50

0.51

0.50

0.51

0.49

Dividends declared

0.24

0.23

Book value

19.50

19.31

18.92

18.62

17.51

Tangible book value

13.77

13.60

13.17

12.76

13.11

Average fully diluted shares

16,407,778

16,422,161

16,508,922

16,069,771

15,400,865

Noninterest income breakdown:

Securities gains

574

Service charges on deposit accounts

3,030

3,211

2,999

2,630

2,308

Gains on sales of mortgage loans

722

590

738

773

638

Fees on sales of investment products

822

518

765

906

800

Trust and investment management fees

2,397

2,581

2,365

2,361

2,281

Insurance agency commissions

2,086

1,203

1,294

1,438

2,690

Income from bank owned life insurance

714

732

720

693

684

Visa check fees

696

747

730

717

590

Other income

1,655

1,783

1,497

1,351

913

Total

12,696

11,380

11,130

10,873

10,906

Noninterest expense breakdown:

Salaries and employee benefits

13,763

13,343

14,654

13,776

13,434

Occupancy expense of premises

2,799

2,288

2,946

2,709

2,417

Equipment expenses

1,439

1,829

1,631

1,501

1,602

Marketing

497

674

359

675

529

Outside data services

1,122

1,094

870

1,077

926

Amortization of intangible assets

1,124

1,123

1,031

802

Other expenses

3,959

4,964

4,316

4,190

3,904

Total

24,703

25,316

25,899

24,959

23,614

* 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 (Unaudited)

2008

2007

(Dollars in thousands, except per share data)

Balance sheets at quarter end:

Residential mortgage loans

459,768

456,305

439,091

427,252

404,177

Residential construction loans

183,690

166,981

154,908

154,444

144,744

Commercial mortgage loans

732,692

662,837

645,790

660,004

621,692

Commercial construction loans

256,714

262,840

246,569

236,278

225,108

Commercial loans and leases

354,509

351,773

343,653

316,409

282,854

Consumer loans

376,650

376,295

371,588

370,621

357,607

Total loans and leases

2,364,023

2,277,031

2,201,599

2,165,008

2,036,182

Less: allowance for loan and lease losses

(27,887

)

(25,092

)

(23,567

)

(23,661

)

(22,186

)

Net loans and leases

2,336,136

2,251,939

2,178,032

2,121,347

2,013,996

Goodwill

78,111

76,585

76,625

77,457

53,913

Other intangible assets, net

15,507

16,630

17,754

18,878

15,244

Total assets

3,160,896

3,043,953

2,965,492

3,101,409

2,945,477

Total deposits

2,340,568

2,273,868

2,280,102

2,386,226

2,274,322

Customer repurchase agreements

101,666

98,015

122,130

113,622

114,712

Total stockholders' equity

318,967

315,640

310,624

306,255

275,319

Quarterly average balance sheets:

Residential mortgage loans

463,597

453,568

441,190

426,496

406,886

Residential construction loans

174,626

163,922

151,306

151,785

151,194

Commercial mortgage loans

690,289

649,101

647,659

630,335

565,277

Commercial construction loans

266,098

252,705

244,975

239,299

203,371

Commercial loans and leases

351,862

339,744

323,439

300,325

246,218

Consumer loans

378,261

374,572

370,585

362,221

353,668

Total loans and leases

2,324,733

2,233,612

2,179,154

2,110,461

1,926,614

Securities

427,819

451,168

458,984

523,507

551,566

Total earning assets

2,795,453

2,725,801

2,733,572

2,711,225

2,518,797

Total assets

3,072,428

3,006,086

3,019,065

2,979,820

2,743,890

Total interest-bearing liabilities

2,311,629

2,222,387

2,214,606

2,212,376

2,048,323

Noninterest-bearing demand deposits

412,369

439,967

463,018

450,887

408,954

Total deposits

2,260,837

2,283,122

2,340,004

2,290,413

2,099,409

Customer repurchase agreements

94,841

112,828

113,425

109,187

101,805

Stockholders' equity

315,755

310,605

307,564

286,040

255,781

Capital and credit quality measures:

Average equity to average assets

10.28

10.33

10.19

9.60

9.32

Loan and lease loss allowance to loans and leases

1.18

1.10

1.07

1.09

Nonperforming assets to total assets

1.48

1.15

0.87

0.71

0.24

Annualized net charge-offs (recoveries) to

average loans and leases

(0.02

0.04

0.16

0.05

0.00

Miscellaneous data:

Net charge-offs (recoveries)

($129

)

200

844

265

($17

)

Nonperforming assets:

Non-accrual loans and leases

37,353

23,040

17,362

18,818

1,982

Loans and leases 90 days past due

8,244

11,362

8,009

3,347

5,084

Restructured loans and leases

655

Other real estate owned, net

661

461

431

Total nonperforming assets

46,913

34,863

25,802

22,165

7,066

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

	Three Months Ended March 31,
	2008								2007
						Annualized								Annualized
	Average					Average			Average					Average
	Balances			Interest		Yield/Rate			Balances			Interest		Yield/Rate
Assets
Residential mortgage loans	$	463,597		$	7,296		6.30	%	$	406,886		$	6,078		5.97	%
Residential construction loans		174,626			2,770		6.38			151,194			2,717		7.29
Commercial mortgage loans		690,289			11,848		6.90			565,277			10,249		7.35
Commercial construction loans		266,098			4,426		6.69			203,371			4,581		9.13
Commercial loans and leases		351,862			6,546		7.48			246,218			5,033		8.29
Consumer loans		378,261			5,679		6.04			353,668			6,111		7.01
Total loans and leases		2,324,733			38,565		6.66			1,926,614			34,769		7.30
Securities		427,819			6,169		5.84			551,566			7,883		5.86
Interest-bearing deposits with banks		6,949			49		2.81			6,997			90		5.20
Federal funds sold		35,952			279		3.12			33,620			437		5.27
TOTAL EARNING ASSETS		2,795,453			45,062		6.48	%		2,518,797			43,179		6.95	%

Less: allowance for loan and lease losses		(25,844	)							(20,667	)
Cash and due from banks		50,160								52,004
Premises and equipment, net		54,364								49,235
Other assets		198,295								144,521
Total assets	$	3,072,428							$	2,743,890

Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	241,177		$	171		0.28	%	$	231,152		$	189		0.33	%
Regular savings deposits		153,365			120		0.32			163,037			156		0.39
Money market savings deposits		709,009			4,667		2.65			547,135			4,974		3.69
Time deposits		744,917			8,064		4.35			749,131			8,469		4.58
Total interest-bearing deposits		1,848,468			13,022		2.83			1,690,455			13,788		3.31
Borrowings		463,161			4,321		3.75			357,868			4,091		4.63
TOTAL INTEREST-BEARING LIABILITIES		2,311,629			17,343		3.01			2,048,323			17,879		3.54


Noninterest-bearing demand deposits		412,369								408,954
Other liabilities		32,675								30,832
Stockholder's equity		315,755								255,781
Total liabilities and stockholders' equity	$	3,072,428							$	2,743,890

Net interest income and spread					27,719		3.47	%					25,300		3.41	%
Less: tax equivalent adjustment					1,140								1,285
Net interest income					26,579								24,015

Interest income/earning assets							6.48	%							6.95	%
Interest expense/earning assets							2.49								2.88
Net interest margin							3.99	%							4.07	%


*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 7.50% (or a combined marginal federal and state rate of 39.88%) for 2008 and a marginal state income tax rate of 6.55% (or a combined marginal federal and state rate of 39.26%) for 2007, 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 $4,586,000 in 2008 and $5,210,000 in 2007.

Sandy Spring Bancorp (SASR) 8-KSandy Spring Bancorp Reports First Quarter Results