FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS FIRST QUARTER RESULTS
OLNEY, MARYLAND, April 21, 2009 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income available to common shareholders for the first quarter of 2009 of $1.0 million ($.06 per diluted share) compared to net income of $8.2 million ($.50 per diluted share) for the first quarter of 2008 and a net loss available to common shareholders of $3.8 million ($.23 per diluted share) for the fourth quarter of 2008. The first quarter of 2009 included a provision for loan and lease losses of $10.6 million related primarily to the residential real estate development portfolio.
“Our level of loan loss provisioning continues to be influenced by the ongoing negative economic conditions on both a regional and local basis. Specifically, the $10.6 million provision was driven by internal risk rating downgrades along with specific reserves that are set up to cover individual loans in our residential real estate development portfolio,” said Daniel J. Schrider, President and Chief Executive Officer. “We continue to aggressively monitor and work out problem credits in all segments of our loan portfolios, particularly those related to builders.”
“On the deposit side, we are extremely pleased with our recent growth in customer funding sources, which advanced 8% during the first quarter. This growth was due in large part to our new Premier money market product. While we are pricing this product very competitively over the short term, we believe the resulting growth in market share will enable us to develop expanded customer relationships that we can retain over the long term.”
“We also closed over $121 million in residential mortgage loans in the first quarter of 2009 compared to $62 million in the prior year quarter,” said Schrider. “This provides further evidence of our dedication to provide needed banking services to the communities that we serve.”
First Quarter Highlights:
| · | The provision for loan and lease losses totaled $10.6 million for the quarter compared to $2.7 million for the first quarter of 2008 and $17.8 million for the fourth quarter of 2008. The provision was in response to continued internal risk rating downgrades, charge-offs and additional specific reserves primarily related to loans in the residential real estate development portfolio. |
| · | The net interest margin was 3.39% for the first quarter compared to 3.99% for the first quarter of 2008 and 3.73% for the fourth quarter of 2008. |
| · | Noninterest expenses decreased 2% for the quarter compared to the first quarter of 2008 and decreased 11% versus the linked fourth quarter of 2008. Excluding the goodwill impairment charge in the fourth quarter, noninterest expenses decreased 4%.These results are consistent with the Company’s expectations for project LIFT, a previously disclosed initiative for managing operating expenses. |
| · | Customer funding sources, comprised of deposits and other short-term borrowings from core customers, increased 8% compared to balances at both March 31, 2008 and December 31, 2008. These increases were due primarily to growth in the Company’s new Premier money market savings product. |
Review of Balance Sheet and Credit Quality
Comparing March 31, 2009 balances to March 31, 2008, total assets increased 11% to $3.5 billion due mainly to a 9% growth in deposits. This growth in deposits was the primary driver of increases of 52% in investments and 38% in cash and cash equivalents. Total loans and leases increased 4% to $2.5 billion compared to the prior year. This increase in loans was comprised mainly of a 6% increase in commercial loans and a 9% increase in consumer loans. Total loans decreased 1% compared to the fourth quarter of 2008.
Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 8% to $2.6 billion at March 31, 2009 compared to the prior year. Such customer funding sources also increased 8% compared to the fourth quarter of 2008. These increases were due primarily to growth resulting from the Company’s new Premier money market account. Borrowings from the Federal Home Loan Bank of Atlanta increased 22% to $412 million compared to the prior year. Compared to the fourth quarter of 2008, such borrowings remained virtually level. The increase over the prior year was necessary to fund loan growth during the second and third quarters of 2008.
Stockholders’ equity totaled $392.5 million at March 31, 2009, and represented 11.2% of total assets, compared to 10.1% at March 31, 2008. At March 31, 2009 the Company had a total risk-based capital ratio of 13.70%, a tier 1 risk-based capital ratio of 12.44% and a capital leverage ratio of 10.53% which were all above amounts needed in order to be categorized as “well capitalized” for regulatory purposes.
The provision for loan and lease losses totaled $10.6 million for the first quarter of 2009 compared to $2.7 million for the first quarter of 2008 and $17.8 million for the fourth quarter of 2008. As discussed above, these increases were primarily due to internal risk rating downgrades, charge-offs and additional specific reserves primarily related to loans in the residential real estate development portfolio.
Loan charge-offs, net of recoveries totaled $1.3 million for the first quarter of 2009 compared to net recoveries of $0.1 million for the first quarter of 2008 and net charge-offs of $5.5 million for the fourth quarter of 2008. The allowance for loan and lease losses represented 2.43% of outstanding loans and leases and 48% of non-performing assets at March 31, 2009 compared to 2.03% of outstanding loans and leases and 70% of non-performing assets at December 31, 2008 and 1.18% of outstanding loans and leases and 59% of non-performing assets at March 31, 2008.
Non-performing assets totaled $125.8 million at March 31, 2009 compared to $72.2 million at December 31, 2008 and $46.9 million at March 31, 2008. The increase over the fourth quarter of 2008 was due primarily to one commercial loan and four residential real estate development loans that together totaled $46.2 million. The increase over the prior year also includes four residential real estate development loans, in addition to the five loans mentioned above, totaling $11.4 million.
Income Statement Review
Comparing the first quarter of 2009 and 2008, net interest income decreased by $1.5 million, or 6%, due primarily to the decline in market interest rates due to the effect of interest rate cuts by the Federal Reserve throughout 2008 and the growth in nonperforming assets mentioned above. Because of the competitive environment for deposits, loan and investment yields declined faster than rates paid on deposits. These factors produced a net interest margin decrease to 3.39% in 2009 from 3.99% in 2008.
Noninterest income decreased to $12.0 million in the first quarter of 2009 as compared to $12.7 million in the first quarter of 2008, a decrease of $0.7 million or 6%. Service charges on deposit accounts decreased $0.2 million or 6% due primarily to lower overdraft fees while Visa check fees decreased $0.1 million or 8% compared to the first quarter of 2008. Fees on sales of investment products decreased $0.1 million or 15% and trust and investment management fees declined $0.1 million or 5%, both of which were due primarily to a decline in assets under management. These decreases were somewhat offset by an increase in gains on sales of mortgage loans of $0.3 million or 42% due largely to higher mortgage refinancing volumes reflecting market conditions. Other noninterest income also decreased $0.1 million or 7% compared to the first quarter of 2008.
Noninterest expenses were $24.3 million in the first quarter of 2009 compared to $24.7 million in the first quarter of 2008, a decrease of $0.4 million or 2%. Salaries and benefits expenses decreased $0.6 million or 4%, while marketing expenses decreased $0.1 million or 15% and expenses for outside data services decreased $0.3 million or 28% compared to the first quarter of 2008. These decreases were somewhat offset by an increase of $0.5 million or 13% in other noninterest expenses due to higher FDIC insurance premiums. The overall noninterest expense performance reflects the effect of stringent expense controls implemented as part of project LIFT.
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 877-795-3649; 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 12:00 midnight (ET) May 21, 2009. A telephone voice replay will also be available during that same time period at 888-203-1112. Please use pass code #4925898 to access.
About Sandy Spring Bancorp/Sandy Spring Bank
With $3.5 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:
Daniel J. Schrider, President & Chief Executive Officer, or
Philip J. Mantua, E.V.P. & Chief Financial Officer
Sandy Spring Bancorp
17801 Georgia Avenue
Olney, Maryland 20832
1-800-399-5919
| Email: | DSchrider@sandyspringbank.com |
PMantua@sandyspringbank.com
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, 2008, 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, | | | % | |
| | | 2009 | | | 2008 | | | Change | |
| Profitability for the period: | | | | | | | | | |
| Net interest income | | | $25,025 | | | | $26,579 | | | | (6 | ) % |
| Provision for loan and lease losses | | | 10,613 | | | | 2,667 | | | | 298 | |
| Noninterest income | | | 11,974 | | | | 12,696 | | | | (6 | ) |
| Noninterest expenses | | | 24,250 | | | | 24,703 | | | | (2 | ) |
| Income before income taxes | | | 2,136 | | | | 11,905 | | | | (82 | ) |
| Net income | | | $2,217 | | | | $8,205 | | | | (73 | ) |
| Net income available to common shareholders | | | $1,017 | | | | $8,205 | | | | (88 | ) |
| | | | | | | | | | | | | |
| Return on average assets (1) | | | 0.12 | % | | | 1.07 | % | | | | |
| Return on average common equity (1) | | | 1.32 | % | | | 10.45 | % | | | | |
| Net interest margin | | | 3.39 | % | | | 3.99 | % | | | | |
| Efficiency ratio - GAAP * | | | 65.54 | % | | | 62.90 | % | | | | |
| Efficiency ratio - Non-GAAP * | | | 61.29 | % | | | 59.18 | % | | | | |
| | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | |
| Basic net income per share | | | $0.14 | | | | $0.50 | | | | (72 | ) % |
| Basic net income per common share | | | 0.06 | | | | 0.50 | | | | (88 | ) |
| Diluted net income per share | | | 0.13 | | | | 0.50 | | | | (74 | ) |
| Diluted net income per common share | | | 0.06 | | | | 0.50 | | | | (88 | ) |
| Dividends declared per common share | | | 0.12 | | | | 0.24 | | | | (50 | ) |
| Book value per common share | | | 19.06 | | | | 19.50 | | | | (2 | ) |
| Average fully diluted shares | | | 16,433,788 | | | | 16,407,778 | | | | | |
| | | | | | | | | | | | | |
| At period-end: | | | | | | | | | | | | |
| Assets | | | $3,519,432 | | | | $3,160,896 | | | | 11 | % |
| Deposits | | | 2,553,912 | | | | 2,340,568 | | | | 9 | |
| Total loans and leases | | | 2,461,845 | | | | 2,364,023 | | | | 4 | |
| Securities | | | 661,169 | | | | 434,987 | | | | 52 | |
| Stockholders' equity | | | 392,522 | | | | 318,967 | | | | 23 | |
| | | | | | | | | | | | | |
| Capital and credit quality ratios: | | | | | | | | | | | | |
| Average equity to average assets | | | 11.60 | % | | | 10.28 | % | | | | |
| Allowance for loan and lease losses to loans and leases | | | 2.43 | % | | | 1.18 | % | | | | |
| Nonperforming assets to total assets | | | 3.57 | % | | | 1.48 | % | | | | |
| Annualized net charge-offs to average loans and leases | | | 0.22 | % | | | -0.02 | % | | | | |
(1) Calculation utilizes net income available to common shareholders
* The GAAP efficiency ratio is noninterest expenses divided by net interest income plus noninterest income from the Consolidated Statements of Income.The 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.
Sandy Spring Bancorp, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Efficiency Ratios (Unaudited)
(In thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | |
| GAAP efficiency ratio: | | 2009 | | | 2008 | |
| Noninterest expenses–GAAP | | | $24,250 | | | | $24,703 | |
| | | | | | | | | |
| Net interest income plus noninterest income | | | 36,999 | | | | 39,275 | |
| | | | | | | | | |
| Efficiency ratio–GAAP | | | 65.54 | % | | | 62.90 | % |
| | | | | | | | | |
| Non-GAAP efficiency ratio: | | | | | | | | |
| Noninterest expense | | | $24,250 | | | | $24,703 | |
| Less non-GAAP adjustment: | | | | | | | | |
| Amortization of intangible assets | | | 1,055 | | | | 1,124 | |
| Noninterest expenses– as adjusted | | | 23,195 | | | | 23,579 | |
| | | | | | | | | |
| | | | | | | | | |
| Net interest income plus noninterest income | | | 36,999 | | | | 39,275 | |
| Plus non-GAAP adjustment: | | | | | | | | |
| Tax-equivalency | | | 1,009 | | | | 1,140 | |
| Less non-GAAP adjustments: | | | | | | | | |
| Securities gains | | | 162 | | | | 574 | |
| Net interest income plus noninterest | | | | | | | | |
| income – as adjusted | | | 37,846 | | | | 39,841 | |
| | | | | | | | | |
| Efficiency ratio – Non-GAAP | | | 61.29 | % | | | 59.18 | % |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
| | | March 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2008 | |
| Assets | | | | | | | | | |
| Cash and due from banks | | | $46,380 | | | | $66,536 | | | | $44,738 | |
| Federal funds sold | | | 392 | | | | 48,032 | | | | 1,110 | |
| Interest-bearing deposits with banks | | | 126,286 | | | | 11,112 | | | | 59,381 | |
| Cash and cash equivalents | | | 173,058 | | | | 125,680 | | | | 105,229 | |
| | | | | | | | | | | | | |
| Residential mortgage loans held for sale (at fair value) | | | 14,515 | | | | 9,876 | | | | 11,391 | |
| Investments available-for-sale (at fair value) | | | 472,161 | | | | 206,840 | | | | 291,727 | |
| Investments held-to-maturity - fair value of $163,009, 209,937 | | | | | | | | | |
| and $175,908, respectively | | | 156,877 | | | | 202,344 | | | | 171,618 | |
| Other equity securities | | | 32,131 | | | | 25,803 | | | | 29,146 | |
| | | | | | | | | | | | | |
| Total loans and leases | | | 2,461,845 | | | | 2,364,023 | | | | 2,490,646 | |
| Less: allowance for loan and lease losses | | | (59,798 | ) | | | (27,887 | ) | | | (50,526 | ) |
| Net loans and leases | | | 2,402,047 | | | | 2,336,136 | | | | 2,440,120 | |
| | | | | | | | | | | | | |
| Premises and equipment, net | | | 50,981 | | | | 53,780 | | | | 51,410 | |
| Other real estate owned | | | 5,093 | | | | 661 | | | | 2,860 | |
| Accrued interest receivable | | | 11,937 | | | | 13,201 | | | | 11,810 | |
| Goodwill | | | 76,816 | | | | 78,111 | | | | 76,248 | |
| Other intangible assets, net | | | 11,128 | | | | 15,507 | | | | 12,183 | |
| Other assets | | | 112,688 | | | | 92,957 | | | | 109,896 | |
| Total assets | | | $3,519,432 | | | | $3,160,896 | | | | $3,313,638 | |
| | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | |
| Noninterest-bearing deposits | | | $545,540 | | | | $445,088 | | | | $461,517 | |
| Interest-bearing deposits | | | 2,008,372 | | | | 1,895,480 | | | | 1,903,740 | |
| Total deposits | | | 2,553,912 | | | | 2,340,568 | | | | 2,365,257 | |
| | | | | | | | | | | | | |
| Short-term borrowings | | | 487,900 | | | | 372,625 | | | | 421,074 | |
| Long-term borrowings | | | 16,340 | | | | 67,312 | | | | 66,584 | |
| Subordinated debentures | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Accrued interest payable and other liabilities | | | 33,758 | | | | 26,424 | | | | 33,861 | |
| Total liabilities | | | 3,126,910 | | | | 2,841,929 | | | | 2,921,776 | |
| | | | | | | | | | | | | |
| Stockholders' Equity | | | | | | | | | | | | |
| Preferred stock -- par value $1.00 (liquidation preference of $1,000 | | | | | | | | | |
| per share ) shares authorized 83,094, 0 and 83,094, respectively; | | | | | | | | | |
| shares issued and outstanding 83,094, 0 and 83,094, respectively | | | | | | | | | |
| (discount of $3,493, 0 and $3,654, respectively) | | | 79,601 | | | | 0 | | | | 79,440 | |
| Common stock -- par value $1.00; shares authorized 49,916,906, | | | | | | | | | |
| 50,000,000 and 49,916,906, respectively; shares issued and | | | | | | | | | |
| outstanding 16,414,523, 16,361,444 and 16,398,523, respectively | | | 16,415 | | | | 16,361 | | | | 16,399 | |
| Warrants | | | 3,699 | | | | 0 | | | | 3,699 | |
| Additional paid in capital | | | 85,820 | | | | 84,281 | | | | 85,486 | |
| Retained earnings | | | 213,453 | | | | 219,019 | | | | 214,410 | |
| Accumulated other comprehensive loss | | | (6,466 | ) | | | (694 | ) | | | (7,572 | ) |
| Total stockholders' equity | | | 392,522 | | | | 318,967 | | | | 391,862 | |
| Total liabilities and stockholders' equity | | | $3,519,432 | | | | $3,160,896 | | | | $3,313,638 | |
| Sandy Spring Bancorp, Inc. and Subsidiaries |
| CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
| (In thousands, except per share data) | | Three Months Ended | |
| | | March 31, | |
| | | 2009 | | | 2008 | |
| Interest income: | | | | | | |
| Interest and fees on loans and leases | | | $33,233 | | | | $38,469 | |
| Interest on loans held for sale | | | 280 | | | | 96 | |
| Interest on deposits with banks | | | 46 | | | | 49 | |
| Interest and dividends on securities: | | | | | | | | |
| Taxable | | | 3,195 | | | | 2,698 | |
| Exempt from federal income taxes | | | 1,972 | | | | 2,331 | |
| Interest on federal funds sold | | | 2 | | | | 279 | |
| Total interest income | | | 38,728 | | | | 43,922 | |
| Interest expense: | | | | | | | | |
| Interest on deposits | | | 9,454 | | | | 13,022 | |
| Interest on short-term borrowings | | | 3,446 | | | | 3,279 | |
| Interest on long-term borrowings | | | 803 | | | | 1,042 | |
| Total interest expense | | | 13,703 | | | | 17,343 | |
| Net interest income | | | 25,025 | | | | 26,579 | |
| Provision for loan and lease losses | | | 10,613 | | | | 2,667 | |
| Net interest income after provision for loan and lease losses | | | 14,412 | | | | 23,912 | |
| Noninterest income: | | | | | | | | |
| Securities gains | | | 162 | | | | 574 | |
| Service charges on deposit accounts | | | 2,863 | | | | 3,030 | |
| Gains on sales of mortgage loans | | | 1,022 | | | | 722 | |
| Fees on sales of investment products | | | 700 | | | | 822 | |
| Trust and investment management fees | | | 2,287 | | | | 2,397 | |
| Insurance agency commissions | | | 2,050 | | | | 2,086 | |
| Income from bank owned life insurance | | | 711 | | | | 714 | |
| Visa check fees | | | 638 | | | | 696 | |
| Other income | | | 1,541 | | | | 1,655 | |
| Total noninterest income | | | 11,974 | | | | 12,696 | |
| Noninterest expenses: | | | | | | | | |
| Salaries and employee benefits | | | 13,204 | | | | 13,763 | |
| Occupancy expense of premises | | | 2,775 | | | | 2,799 | |
| Equipment expenses | | | 1,514 | | | | 1,439 | |
| Marketing | | | 420 | | | | 497 | |
| Outside data services | | | 806 | | | | 1,122 | |
| Amortization of intangible assets | | | 1,055 | | | | 1,124 | |
| Other expenses | | | 4,476 | | | | 3,959 | |
| Total noninterest expenses | | | 24,250 | | | | 24,703 | |
| Income before income taxes | | | 2,136 | | | | 11,905 | |
| Income tax expense (benefit) | | | (81 | ) | | | 3,700 | |
| Net income | | | $2,217 | | | | $8,205 | |
| Preferred stock dividends and discount accretion | | | 1,200 | | | | 0 | |
| Net income available to common shareholders | | | $1,017 | | | | $8,205 | |
| | | | | | | | | |
| Basic net income per share | | | $0.14 | | | | $0.50 | |
| Basic net income per common share | | | 0.06 | | | | 0.50 | |
| Diluted net income per share | | | 0.13 | | | | 0.50 | |
| Diluted net income per common share | | | 0.06 | | | | 0.50 | |
| Dividends declared per common share | | | 0.12 | | | | 0.24 | |
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | | | | | | | | | | |
| Historical Trends in Quarterly Financial Data (Unaudited) | | 2009 | | | 2008 | |
| (Dollars in thousands, except per share data) | | | Q1 | | | | Q4 | | | | Q3 | | | | Q2 | | | | Q1 | |
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | | $39,737 | | | | $42,194 | | | | $43,228 | | | | $42,906 | | | | $45,062 | |
| Interest expense | | | 13,703 | | | | 14,356 | | | | 13,961 | | | | 14,726 | | | | 17,343 | |
| Tax-equivalent net interest income | | | 26,034 | | | | 27,838 | | | | 29,267 | | | | 28,180 | | | | 27,719 | |
| Tax-equivalent adjustment | | | 1,009 | | | | 1,164 | | | | 1,180 | | | | 1,061 | | | | 1,140 | |
| Provision for loan and lease losses | | | 10,613 | | | | 17,791 | | | | 6,545 | | | | 6,189 | | | | 2,667 | |
| Noninterest income | | | 11,974 | | | | 10,973 | | | | 10,879 | | | | 11,695 | | | | 12,696 | |
| Noninterest expenses | | | 24,250 | | | | 27,233 | | | | 25,267 | | | | 24,886 | | | | 24,703 | |
| Income (loss) before income taxes | | | 2,136 | | | | (7,377 | ) | | | 7,154 | | | | 7,739 | | | | 11,905 | |
| Income tax expense (benefit) | | | (81 | ) | | | (3,941 | ) | | | 1,795 | | | | 2,088 | | | | 3,700 | |
| Net Income (loss) | | | 2,217 | | | | (3,436 | ) | | | 5,359 | | | | 5,651 | | | | 8,205 | |
| Net Income (loss) available to common shareholders | | | 1,017 | | | | (3,770 | ) | | | 5,359 | | | | 5,651 | | | | 8,205 | |
| Financial ratios: | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.12 | % | | | -0.42 | % | | | 0.67 | % | | | 0.73 | % | | | 1.07 | % |
| Return on average common equity | | | 1.32 | % | | | -4.70 | % | | | 6.64 | % | | | 7.09 | % | | | 10.45 | % |
| Net interest margin | | | 3.39 | % | | | 3.73 | % | | | 4.02 | % | | | 3.96 | % | | | 3.99 | % |
| Efficiency ratio - GAAP* | | | 65.54 | % | | | 72.34 | % | | | 64.84 | % | | | 64.11 | % | | | 62.90 | % |
| Efficiency ratio - Non-GAAP * | | | 61.29 | % | | | 62.41 | % | | | 58.27 | % | | | 59.73 | % | | | 59.18 | % |
| Per share data: | | | | | | | | | | | | | | | | | | | | |
| Basic net income per share | | | $0.14 | | | | $(0.21 | ) | | | $0.33 | | | | $0.35 | | | | $0.50 | |
| Basic net income per common share | | | $0.06 | | | | $(0.23 | ) | | | $0.33 | | | | $0.35 | | | | $0.50 | |
| Diluted net income per share | | | $0.13 | | | | $(0.21 | ) | | | $0.33 | | | | $0.34 | | | | $0.50 | |
| Diluted net income per common share | | | $0.06 | | | | $(0.23 | ) | | | $0.33 | | | | $0.34 | | | | $0.50 | |
| Dividends declared per common share | | | $0.12 | | | | $0.24 | | | | $0.24 | | | | $0.24 | | | | $0.24 | |
| Book value per common share | | | $19.06 | | | | $19.05 | | | | $19.51 | | | | $19.56 | | | | $19.50 | |
| Average fully diluted shares | | | 16,433,788 | | | | 16,434,214 | | | | 16,418,588 | | | | 16,427,213 | | | | 16,407,778 | |
| Noninterest income breakdown: | | | | | | | | | | | | | | | | | | | | |
| Securities gains | | | $162 | | | | $1 | | | | $9 | | | | $79 | | | | $574 | |
| Service charges on deposit accounts | | | 2,863 | | | | 3,297 | | | | 3,249 | | | | 3,202 | | | | 3,030 | |
| Gains on sales of mortgage loans | | | 1,022 | | | | 516 | | | | 397 | | | | 653 | | | | 722 | |
| Fees on sales of investment products | | | 700 | | | | 928 | | | | 820 | | | | 905 | | | | 822 | |
| Trust and investment management fees | | | 2,287 | | | | 2,201 | | | | 2,380 | | | | 2,505 | | | | 2,397 | |
| Insurance agency commissions | | | 2,050 | | | | 1,183 | | | | 1,282 | | | | 1,357 | | | | 2,086 | |
| Income from bank owned life insurance | | | 711 | | | | 719 | | | | 742 | | | | 727 | | | | 714 | |
| Visa check fees | | | 638 | | | | 691 | | | | 727 | | | | 761 | | | | 696 | |
| Other income | | | 1,541 | | | | 1,437 | | | | 1,273 | | | | 1,506 | | | | 1,655 | |
| Total | | | 11,974 | | | | 10,973 | | | | 10,879 | | | | 11,695 | | | | 12,696 | |
| Noninterest expense breakdown: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | $13,204 | | | | $13,441 | | | | $11,949 | | | | $13,862 | | | | $13,763 | |
| Occupancy expense of premises | | | 2,775 | | | | 2,612 | | | | 2,732 | | | | 2,619 | | | | 2,799 | |
| Equipment expenses | | | 1,514 | | | | 1,642 | | | | 1,515 | | | | 1,560 | | | | 1,439 | |
| Marketing | | | 420 | | | | 652 | | | | 526 | | | | 488 | | | | 497 | |
| Outside data services | | | 806 | | | | 1,054 | | | | 1,116 | | | | 1,081 | | | | 1,122 | |
| Amortization of intangible assets | | | 1,055 | | | | 1,103 | | | | 1,103 | | | | 1,117 | | | | 1,124 | |
| Goodwill impairment loss | | | 0 | | | | 1,909 | | | | 2,250 | | | | 0 | | | | 0 | |
| Other expenses | | | 4,476 | | | | 4,820 | | | | 4,076 | | | | 4,159 | | | | 3,959 | |
| Total | | | 24,250 | | | | 27,233 | | | | 25,267 | | | | 24,886 | | | | 24,703 | |
* The GAAP efficiency ratio is noninterest expenses divided by net interest income plus noninterest income from the Consolidated Statements of Income.The 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) | | 2009 | | | 2008 | |
| (Dollars in thousands, except per share data) | | | Q1 | | | | Q4 | | | | Q3 | | | | Q2 | | | | Q1 | |
| Balance sheets at quarter end: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | | $461,359 | | | | $457,571 | | | | $452,815 | | | | $461,000 | | | | $459,768 | |
| Residential construction loans | | | 163,861 | | | | 189,249 | | | | 221,630 | | | | 199,602 | | | | 183,690 | |
| Commercial mortgage loans | | | 859,882 | | | | 847,452 | | | | 804,728 | | | | 752,905 | | | | 732,692 | |
| Commercial construction loans | | | 222,805 | | | | 223,169 | | | | 247,930 | | | | 273,059 | | | | 256,714 | |
| Commercial loans and leases | | | 342,870 | | | | 366,978 | | | | 358,097 | | | | 356,256 | | | | 354,509 | |
| Consumer loans | | | 411,068 | | | | 406,227 | | | | 397,218 | | | | 386,126 | | | | 376,650 | |
| Total loans and leases | | | 2,461,845 | | | | 2,490,646 | | | | 2,482,418 | | | | 2,428,948 | | | | 2,364,023 | |
| Less: allowance for loan and lease losses | | | (59,798 | ) | | | (50,526 | ) | | | (38,266 | ) | | | (33,435 | ) | | | (27,887 | ) |
| Net loans and leases | | | 2,402,047 | | | | 2,440,120 | | | | 2,444,152 | | | | 2,395,513 | | | | 2,336,136 | |
| Goodwill | | | 76,816 | | | | 76,248 | | | | 75,701 | | | | 78,376 | | | | 78,111 | |
| Other intangible assets, net | | | 11,128 | | | | 12,183 | | | | 13,286 | | | | 14,390 | | | | 15,507 | |
| Total assets | | | 3,519,432 | | | | 3,313,638 | | | | 3,195,117 | | | | 3,164,123 | | | | 3,160,896 | |
| Total deposits | | | 2,553,912 | | | | 2,365,257 | | | | 2,248,812 | | | | 2,294,791 | | | | 2,340,568 | |
| Customer repurchase agreements | | | 91,928 | | | | 75,106 | | | | 77,630 | | | | 93,919 | | | | 101,666 | |
| Total stockholders' equity | | | 392,522 | | | | 391,862 | | | | 319,700 | | | | 320,218 | | | | 318,967 | |
| Quarterly average balance sheets: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | | $481,721 | | | | $457,956 | | | | $463,778 | | | | $462,858 | | | | $463,597 | |
| Residential construction loans | | | 176,811 | | | | 208,616 | | | | 210,363 | | | | 193,822 | | | | 174,626 | |
| Commercial mortgage loans | | | 854,402 | | | | 833,752 | | | | 779,652 | | | | 733,905 | | | | 690,289 | |
| Commercial construction loans | | | 224,229 | | | | 236,176 | | | | 253,806 | | | | 261,360 | | | | 266,098 | |
| Commercial loans and leases | | | 359,820 | | | | 361,731 | | | | 356,327 | | | | 359,287 | | | | 351,862 | |
| Consumer loans | | | 408,843 | | | | 400,937 | | | | 391,640 | | | | 380,911 | | | | 378,261 | |
| Total loans and leases | | | 2,505,826 | | | | 2,499,168 | | | | 2,455,566 | | | | 2,392,143 | | | | 2,324,733 | |
| Securities | | | 536,981 | | | | 431,858 | | | | 423,082 | | | | 431,182 | | | | 427,819 | |
| Total earning assets | | | 3,117,590 | | | | 2,972,173 | | | | 2,898,968 | | | | 2,862,012 | | | | 2,795,453 | |
| Total assets | | | 3,375,715 | | | | 3,235,432 | | | | 3,167,145 | | | | 3,134,440 | | | | 3,072,428 | |
| Total interest-bearing liabilities | | | 2,471,762 | | | | 2,405,890 | | | | 2,363,299 | | | | 2,344,266 | | | | 2,311,629 | |
| Noninterest-bearing demand deposits | | | 476,361 | | | | 458,538 | | | | 453,281 | | | | 441,330 | | | | 412,369 | |
| Total deposits | | | 2,431,471 | | | | 2,305,880 | | | | 2,264,990 | | | | 2,306,867 | | | | 2,260,837 | |
| Customer repurchase agreements | | | 69,212 | | | | 84,012 | | | | 81,158 | | | | 92,968 | | | | 94,841 | |
| Stockholders' equity | | | 391,673 | | | | 342,639 | | | | 321,028 | | | | 320,409 | | | | 315,755 | |
| Capital and credit quality measures: | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 11.60 | % | | | 10.59 | % | | | 10.14 | % | | | 10.22 | % | | | 10.28 | % |
| Allowance for loan and lease losses to loan and leases | | | 2.43 | % | | | 2.03 | % | | | 1.54 | % | | | 1.38 | % | | | 1.18 | % |
| Nonperforming assets to total assets | | | 3.57 | % | | | 2.18 | % | | | 2.14 | % | | | 2.05 | % | | | 1.48 | % |
| Annualized net charge-offs (recoveries) to | | | | | | | | | | | | | | | | | | | | |
| average loans and leases | | | 0.22 | % | | | 0.88 | % | | | 0.28 | % | | | 0.11 | % | | | (0.02 | )% |
| Miscellaneous data: | | | | | | | | | | | | | | | | | | | | |
| Net charge-offs (recoveries) | | | $1,341 | | | | $5,531 | | | | $1,714 | | | | $642 | | | | $(129 | ) |
| Nonperforming assets: | | | | | | | | | | | | | | | | | | | | |
| Non-accrual loans and leases | | | 110,761 | | | | 67,950 | | | | 64,246 | | | | 60,373 | | | | 37,353 | |
| Loans and leases 90 days past due | | | 9,545 | | | | 1,038 | | | | 2,074 | | | | 2,538 | | | | 8,244 | |
| Restructured loans and leases | | | 395 | | | | 395 | | | | 395 | | | | 655 | | | | 655 | |
| Other real estate owned, net | | | 5,094 | | | | 2,860 | | | | 1,698 | | | | 1,352 | | | | 661 | |
| Total nonperforming assets | | | 125,795 | | | | 72,243 | | | | 68,413 | | | | 64,918 | | | | 46,913 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
(Dollars in thousands and tax-equivalent)
| | | Three Months Ended March 31, | |
| | | 2009 | | | 2008 | |
| | | | | | | | | Annualized | | | | | | | | | Annualized | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | | Balances | | | Interest | | | Yield/Rate | | | Balances | | | Interest | | | Yield/Rate | |
| Assets | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | | $481,721 | | | | $7,185 | | | | 5.97 | % | | | $463,597 | | | | $7,296 | | | | 6.30 | % |
| Residential construction loans | | | 176,811 | | | | 2,372 | | | | 5.44 | | | | 174,626 | | | | 2,770 | | | | 6.38 | |
| Commercial mortgage loans | | | 854,402 | | | | 13,266 | | | | 6.30 | | | | 690,289 | | | | 11,848 | | | | 6.90 | |
| Commercial construction loans | | | 224,229 | | | | 1,821 | | | | 3.29 | | | | 266,098 | | | | 4,426 | | | | 6.69 | |
| Commercial loans and leases | | | 359,820 | | | | 4,845 | | | | 5.45 | | | | 351,862 | | | | 6,546 | | | | 7.48 | |
| Consumer loans | | | 408,843 | | | | 4,024 | | | | 3.99 | | | | 378,261 | | | | 5,679 | | | | 6.04 | |
| Total loans and leases | | | 2,505,826 | | | | 33,513 | | | | 5.41 | | | | 2,324,733 | | | | 38,565 | | | | 6.66 | |
| Securities* | | | 536,981 | | | | 6,176 | | | | 4.74 | | | | 427,819 | | | | 6,169 | | | | 5.84 | |
| Interest-bearing deposits with banks | | | 71,571 | | | | 46 | | | | 0.26 | | | | 6,949 | | | | 49 | | | | 2.81 | |
| Federal funds sold | | | 3,212 | | | | 2 | | | | 0.24 | | | | 35,952 | | | | 279 | | | | 3.12 | |
| TOTAL EARNING ASSETS | | | 3,117,590 | | | | 39,737 | | | | 5.17 | % | | | 2,795,453 | | | | 45,062 | | | | 6.48 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (53,416 | ) | | | | | | | | | | | (25,844 | ) | | | | | | | | |
| Cash and due from banks | | | 47,023 | | | | | | | | | | | | 50,160 | | | | | | | | | |
| Premises and equipment, net | | | 51,408 | | | | | | | | | | | | 54,364 | | | | | | | | | |
| Other assets | | | 213,110 | | | | | | | | | | | | 198,295 | | | | | | | | | |
| Total assets | | | $3,375,715 | | | | | | | | | | | | $3,072,428 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | | $242,799 | | | | $121 | | | | 0.20 | % | | | $241,177 | | | | $171 | | | | 0.28 | % |
| Regular savings deposits | | | 147,537 | | | | 55 | | | | 0.15 | | | | 153,365 | | | | 120 | | | | 0.32 | |
| Money market savings deposits | | | 713,295 | | | | 2,416 | | | | 1.37 | | | | 709,009 | | | | 4,667 | | | | 2.65 | |
| Time deposits | | | 851,479 | | | | 6,863 | | | | 3.27 | | | | 744,917 | | | | 8,064 | | | | 4.35 | |
| Total interest-bearing deposits | | | 1,955,110 | | | | 9,455 | | | | 1.96 | | | | 1,848,468 | | | | 13,022 | | | | 2.83 | |
| Borrowings | | | 516,652 | | | | 4,248 | | | | 3.33 | | | | 463,161 | | | | 4,321 | | | | 3.75 | |
| TOTAL INTEREST-BEARING LIABILITIES | | | 2,471,762 | | | | 13,703 | | | | 2.25 | | | | 2,311,629 | | | | 17,343 | | | | 3.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 476,361 | | | | | | | | | | | | 412,369 | | | | | | | | | |
| Other liabilities | | | 35,917 | | | | | | | | | | | | 32,675 | | | | | | | | | |
| Stockholder's equity | | | 391,675 | | | | | | | | | | | | 315,755 | | | | | | | | | |
| Total liabilities and stockholders' equity | | | $3,375,715 | | | | | | | | | | | | $3,072,428 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread on a fully tax | | | | | | | | | | | | | | | | | | | | | | | | |
| equivalent basis | | | | | | | 26,034 | | | | 2.92 | % | | | | | | | 27,719 | | | | 3.47 | % |
| Less: tax equivalent adjustment | | | | | | | 1,009 | | | | | | | | | | | | 1,140 | | | | | |
| Net interest income | | | | | | | 25,025 | | | | | | | | | | | | 26,579 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 5.17 | % | | | | | | | | | | | 6.48 | % |
| Interest expense/earning assets | | | | | | | | | | | 1.78 | | | | | | | | | | | | 2.49 | |
| Net interest margin | | | | | | | | | | | 3.39 | % | | | | | | | | | | | 3.99 | % |
*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 2009 and 2008, 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 $4.1 million in 2009 and $4.6 million in 2008.
