FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS FOURTH QUARTER AND
FULL YEAR RESULTS
OLNEY, MARYLAND, January 28, 2010 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced a net loss available to common stockholders for the fourth quarter of 2009 of $4.4 million (($0.27) per diluted share) compared to a net loss available to common stockholders of $3.8 million (($0.23) per diluted share) for the fourth quarter of 2008 and a net loss available to common stockholders of $14.8 million (($0.90) per diluted share) for the third quarter of 2009. The fourth quarter of 2009 included a provision for loan and lease losses of $21.1 million.
Net loss available to common stockholders for the full year ending December 31, 2009 totaled $19.7 million (($1.20) per diluted share) compared to net income available to common stockholders of $15.4 million ($0.94 per diluted share) for the prior year. The results for the current year included a provision for loan and lease losses totaling $76.8 million for the year and FDIC insurance expense totaling $6.1 million, which included a special assessment charge of $1.7 million. The results for 2008 included a provision for loan and lease losses of $33.2 million for the year, a goodwill impairment charge of $4.2 million relating to the Bank’s equipment leasing subsidiary and a pre-tax pension credit of $1.5 million.
“Looking back on 2009 and forward into 2010, we feel that this company has the underlying fundamentals and strength to weather the current economic cycle that is having a profound impact on the national community banking industry and especially the competitive landscape here in the Washington-Baltimore corridor,” said Daniel J. Schrider, president and chief executive officer.
“We remain the largest independent locally-managed community banking company across our attractive footprint, and we expect to build on our strong franchise as we begin emerging from the effects of the current credit cycle during 2010. Resolution of problem assets requires expertise and patience, perhaps more than the market recognizes. However, we have both expertise and patience, and we expect results over the forthcoming quarters will demonstrate our confidence and cautious optimism.”
“Our results this quarter were obviously driven by the provision for loan losses. Notably, the loan-loss provision declined compared to the prior quarter, largely due to a reduced level of net charge-offs and a decrease in nonperforming loans. Most of the above-mentioned activity was related to our residential real estate development portfolio where the majority of problem loans are concentrated. These positive trends reflect our ongoing aggressive efforts in managing the resolution of problem credits.”
“Total loan balances declined for the year compared to 2008 due to a combination of soft demand from our customers, loan charge-offs and by applying more conservative underwriting standards. Residential mortgage lending continues to be a bright spot as we closed over $390 million in residential mortgage loans for the year, compared to $257 million in 2008.”
“We have retained a large majority of the deposit growth that we produced earlier in the year. This is clearly a result of the ‘high-touch’ culture that drives our strategy to capitalize on market disruption opportunities coming from several recent local mergers. Our efforts have produced many new multi-product customer relationships that we plan to rely upon to fund our long-term future loan growth as the economy recovers.”
“We have conservatively invested the proceeds of our recent deposit growth primarily into U. S. government agency instruments with short durations in order to provide good flexibility and the necessary liquidity in the event that high-quality loan demand increases in the coming months. We have experienced no realized losses in the investment portfolio during the recent economic downturn. The net interest margin has continued to improve as we have strategically managed interest rates in our loan, investment and deposit portfolios to both grow the margin and minimize interest rate risk. We believe this approach is prudent as we expect rates to trend upwards over the coming year,” said Schrider.
Fourth Quarter and Full Year Highlights:
| | · | The provision for loan and lease losses totaled $21.1 million for the quarter compared to $17.8 million for the fourth quarter of 2008 and $34.5 million for the third quarter of 2009. For the year, the provision for loan and lease losses totaled $76.8 million compared to $33.2 million in 2008. |
| | · | The net interest margin was 3.40% for the fourth quarter compared to 3.73% for the fourth quarter of 2008 and 3.27% for the third quarter of 2009. For the year, the net interest margin declined to 3.29% compared to 3.92% for 2008. |
| | · | Noninterest expenses decreased 7% for the quarter compared to the fourth quarter of 2008 and decreased 5% versus the third quarter of 2009. For the full year of 2009, noninterest expenses increased 1% compared to 2008. |
| | · | Customer funding sources, comprised of deposits and other short-term borrowings from core customers, increased 14% compared to the balance at December 31, 2008, and remained level compared to the balance at September 30, 2009. This increase over the prior year was due primarily to growth in the Company’s Premier Money Market Savings product and growth in noninterest-bearing deposits. |
Review of Balance Sheet and Credit Quality
Comparing December 31, 2009 balances to December 31, 2008, total assets increased 10% to $3.6 billion. This growth was due mainly to a 14% increase in deposits that was deployed into investment securities, which increased 108%. Total loans and leases decreased 8% to $2.3 billion compared to the prior year. This decrease in loans was due mainly to a net 15% decrease in residential mortgage and residential construction loans. Total loans decreased 2% compared to the third quarter of 2009.
Customer funding sources, which include deposits and other short-term borrowings from core customers increased 14% to $2.8 billion at December 31, 2009 compared to the prior year and remained even with the third quarter of 2009. The increase over the prior year was due primarily to growth resulting from the Company’s Premier Money Market account as well as growth in noninterest-bearing deposits.
Stockholders’ equity totaled $373.6 million at December 31, 2009, and represented 10.3% of total assets, compared to 12.0% at December 31, 2008. At December 31, 2009 the Company had a total risk-based capital ratio of 13.28%, a tier 1 risk-based capital ratio of 12.02% and a tier 1 leverage ratio of 9.09% 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 $21.1 million for the fourth quarter of 2009 compared to $17.8 million for the fourth quarter of 2008 and $34.5 million for the third quarter of 2009. The increase over the prior year quarter was primarily due to internal risk rating downgrades, charge-offs and additional specific reserves primarily related to loans in the residential real estate development portfolio. The decrease compared to the third quarter of 2009 was largely due to declines in net charge-offs and nonperforming loans.
Loan charge-offs, net of recoveries totaled $19.5 million for the fourth quarter of 2009 compared to net charge-offs of $5.5 million for the fourth quarter of 2008 and net charge-offs of $29.8 million for the third quarter of 2009. The allowance for loan and lease losses represented 2.81% of outstanding loans and leases and 48% of nonperforming loans at December 31, 2009 compared to 2.70% of outstanding loans and leases and 44% of nonperforming loans at September 30, 2009 and 2.03% of outstanding loans and leases and 73% of nonperforming loans at December 31, 2008. Nonperforming loans includes loans 90 days or more past-due which are still accruing interest.
Nonperforming assets totaled $141.2 million at December 31, 2009 compared to $72.2 million at December 31, 2008 and $150.2 million at September 30, 2009. The increase over the prior year was due primarily to problem credits identified in the residential real estate development portfolio. The decrease compared to the third quarter of 2009 was due primarily to charge-offs that exceeded new problem credits identified during the period.
Income Statement Review
Comparing the fourth quarter of 2009 and 2008, net interest income increased by $1.2 million, or 4%. This increase was due to the decline in rates paid on deposits and borrowings together with a higher level of interest earning assets.
Noninterest income increased 5% to $11.6 million in the fourth quarter of 2009 as compared to $11.0 million in the fourth quarter of 2008. This increase was due primarily to other noninterest income which increased $0.9 million or 61% compared to the fourth quarter of 2008 due largely to gains on commercial loan interest rate swaps. In addition, trust and investment fees increased $0.2 million or 7% due to growth in assets under management. Service charges on deposit accounts decreased $0.4 million or 12% driven by lower overdraft fees. Fees on sales of investment products decreased $0.2 million or 18% compared to the fourth quarter of 2008 due primarily to a decline in annuity sales. In addition, insurance agency commissions decreased $0.1 million or 7% due to the overall effect of the current economy while gains on sales of mortgage loans decreased $0.1 million or 16% due largely to a decline in accrued gains on mortgage commitments in the fourth quarter of 2009 compared to the fourth quarter of 2008.
Noninterest expenses were $25.4 million in the fourth quarter of 2009 compared to $27.2 million in the fourth quarter of 2008, a decrease of $1.8 million or 7%. This decrease was due largely to a goodwill impairment charge of $1.9 million in the fourth quarter of 2008 and a decline of $0.6 million or 55% in intangibles amortization compared to the prior year period. Salaries and benefits expenses remained relatively flat for the quarter. Occupancy and equipment expenses decreased $0.2 million or 5% compared to the fourth quarter of 2008. FDIC insurance expense increased $0.7 million or 145% due to higher deposit balances and increased assessment rates. Other noninterest expenses increased $0.4 million or 10% due primarily to higher accrued losses associated with commercial loan swaps.
Comparing the year ended December 31, 2009 and 2008, net interest income decreased by $4.8 million, or 4% as the lack of loan demand caused the Company to invest the funds generated by the growth in deposits into lower yielding investment securities. Net interest income for the year was also adversely affected by the growth in average nonperforming loans mentioned above. These factors resulted in a net interest margin decrease to 3.29% in 2009 from 3.92% in 2008.
Noninterest income decreased 2% to $45.2 million for the year ended December 31, 2009 as compared to $46.2 million in 2008. Service charges on deposit accounts decreased $1.3 million or 11% due primarily to lower overdraft fees while insurance agency commissions decreased $0.7 million or 11%. Fees on sales of investment products decreased $0.7 million or 19% due primarily to lower average assets under management. These decreases were somewhat offset by an increase in gains on sales of mortgage loans of $1.0 million or 42% due largely to higher mortgage refinancing volumes reflecting an extended period of historically very low interest rates. Other noninterest income also increased $1.0 million or 16% compared to 2008 due primarily to higher accrued gains on commercial loan interest rate swaps.
Noninterest expenses were $103.0 million in 2009 compared to $102.1 million in 2008, an increase of $0.9 million or 1%. This increase was due primarily to an increase of $4.3 million in FDIC insurance expense which includes a one time special assessment in the second quarter of 2009 by the FDIC of $1.7 million. Excluding the FDIC special assessment, a $4.2 million goodwill impairment charge in 2008 and a $1.5 million pre-tax pension credit in 2008, noninterest expenses increased $2.0 million or 2% over 2008. Salaries and benefits expenses increased $1.4 million or 3%, while expenses for outside data services decreased $0.7 million or 15%. Other noninterest expenses increased $1.3 million or 8% compared to 2008 due to increases in legal fees resulting from loan workouts and accrued losses on commercial loan swaps.
Conference Call
The Company’s management will host a conference call to discuss its fourth quarter and full year results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations’ section of the Sandy Spring Web site at www.sandyspringbank.com. Participants may call 888-220-8450. 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) February 28, 2010. A telephone voice replay will also be available during that same time period at 888-203-1112. Please use pass code #9999948 to access.
About Sandy Spring Bancorp/Sandy Spring Bank
With $3.6 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 largest publicly traded banking company headquartered and operating 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 43 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.
FINANCIAL HIGHLIGHTS (Unaudited)
| | | Three Months Ended | | | | | | Year Ended | | | | |
| | | December 31, | | | % | | | December 31, | | | % | |
(Dollars in thousands, except per share data) | | 2009 | | | 2008 | | | Change | | | 2009 | | | 2008 | | | Change | |
| Results of Operations: | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 27,833 | | | $ | 26,674 | | | | 4 | % | | $ | 103,708 | | | $ | 108,459 | | | | (4 | )% |
| Provision for loan and lease losses | | | 21,084 | | | | 17,791 | | | | 19 | | | | 76,762 | | | | 33,192 | | | | 131 | |
| Noninterest income | | | 11,575 | | | | 10,973 | | | | 5 | | | | 45,241 | | | | 46,243 | | | | (2 | ) |
| Noninterest expenses | | | 25,364 | | | | 27,233 | | | | (7 | ) | | | 103,039 | | | | 102,089 | | | | 1 | |
| Income (loss) before income taxes | | | (7,040 | ) | | | (7,377 | ) | | | (5 | ) | | | (30,852 | ) | | | 19,421 | | | | - | |
| Net income (loss) | | | (3,218 | ) | | | (3,436 | ) | | | (6 | ) | | | (14,855 | ) | | | 15,779 | | | | (194 | ) |
| Net income (loss) available to common stockholders | | $ | (4,421 | ) | | $ | (3,770 | ) | | | 17 | | | $ | (19,665 | ) | | $ | 15,445 | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets (1) | | | (0.48 | )% | | | (0.42 | )% | | | | | | | (0.55 | )% | | | 0.49 | % | | | | |
Return on average common equity (1) | | | (4.66 | )% | | | (4.70 | )% | | | | | | | (6.42 | )% | | | 4.84 | % | | | | |
| Net interest margin | | | 3.40 | % | | | 3.73 | % | | | | | | | 3.29 | % | | | 3.92 | % | | | | |
Efficiency ratio - GAAP * | | | 64.36 | % | | | 72.34 | % | | | | | | | 69.18 | % | | | 65.99 | % | | | | |
Efficiency ratio - Non-GAAP * | | | 61.29 | % | | | 62.41 | % | | | | | | | 64.81 | % | | | 59.88 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) | | $ | (0.20 | ) | | $ | (0.21 | ) | | | (5 | ) % | | $ | (0.90 | ) | | $ | 0.96 | | | | (194 | )% |
| Basic net income (loss) per common share | | | (0.27 | ) | | | (0.23 | ) | | | 17 | | | | (1.20 | ) | | | 0.94 | | | | - | |
| Diluted net income (loss) | | | (0.20 | ) | | | (0.21 | ) | | | (5 | ) | | | (0.90 | ) | | | 0.96 | | | | (194 | ) |
| Diluted net income (loss) per common share | | | (0.27 | ) | | | (0.23 | ) | | | 17 | | | | (1.20 | ) | | | 0.94 | | | | - | |
| Dividends declared per common share | | | 0.01 | | | | 0.24 | | | | (96 | ) | | | 0.37 | | | | 0.96 | | | | (61 | ) |
| Book value per common share | | | 17.80 | | | | 19.05 | | | | (7 | ) | | | 17.80 | | | | 19.05 | | | | (7 | ) |
| Average fully diluted shares | | | 16,477,925 | | | | 16,434,214 | | | | | | | | 16,448,580 | | | | 16,429,471 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Condition at period-end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 3,630,478 | | | $ | 3,313,638 | | | | 10 | % | | $ | 3,630,478 | | | $ | 3,313,638 | | | | 10 | % |
| Total loans and leases | | | 2,298,010 | | | | 2,490,646 | | | | (8 | ) | | | 2,298,010 | | | | 2,490,646 | | | | (8 | ) |
| Investment securities | | | 1,023,799 | | | | 492,491 | | | | 108 | | | | 1,023,799 | | | | 492,491 | | | | 108 | |
| Deposits | | | 2,696,842 | | | | 2,365,257 | | | | 14 | | | | 2,696,842 | | | | 2,365,257 | | | | 14 | |
| Stockholders' equity | | | 373,586 | | | | 391,862 | | | | (5 | ) | | | 373,586 | | | | 391,862 | | | | (5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage | | | 9.09 | % | | | 11.00 | % | | | | | | | 9.09 | % | | | 11.00 | % | | | | |
| Tier 1 capital to risk-weighted assets | | | 12.01 | % | | | 12.56 | % | | | | | | | 12.01 | % | | | 12.56 | % | | | | |
| Total regulatory capital to risk-weighted assets | | | 13.27 | % | | | 13.82 | % | | | | | | | 13.27 | % | | | 13.82 | % | | | | |
Tangible common equity to tangible assets** | | | 5.95 | % | | | 7.18 | % | | | | | | | 5.95 | % | | | 7.18 | % | | | | |
| Average equity to average assets | | | 10.36 | % | | | 10.59 | % | | | | | | | 10.94 | % | | | 10.31 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Credit quality ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses to loans and leases | | | 2.81 | % | | | 2.03 | % | | | | | | | 2.81 | % | | | 2.03 | % | | | | |
| Nonperforming loans to total loans | | | 5.82 | % | | | 2.79 | % | | | | | | | 5.82 | % | | | 2.79 | % | | | | |
| Nonperforming assets to total assets | | | 3.89 | % | | | 2.18 | % | | | | | | | 3.89 | % | | | 2.18 | % | | | | |
| Annualized net charge-offs to average loans and leases | | | 3.34 | % | | | 0.88 | % | | | | | | | 2.61 | % | | | 0.32 | % | | | | |
| (1) | Calculation utilizes net income available to common stockholders |
| * | The GAAP 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, the goodwill impairment loss and the pension prior servcie credit 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. |
| ** | The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets, other comprehensive losses and preferred stock. See the Reconciliation Table included with these Financial Highlights. |
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE
| | | Three Months Ended | | | Year Ended | |
| | | December 31, | | | December 31, | |
| (Dollars in thousands) | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| GAAP efficiency ratio: | | | | | | | | | | | | |
| Noninterest expenses | | $ | 25,364 | | | $ | 27,233 | | | $ | 103,039 | | | $ | 102,089 | |
| Net interest income plus noninterest income | | | 39,408 | | | | 37,647 | | | | 148,949 | | | | 154,702 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio–GAAP | | | 64.36 | % | | | 72.34 | % | | | 69.18 | % | | | 65.99 | % |
| | | | | | | | | | | | | | | | | |
| Non-GAAP efficiency ratio: | | | | | | | | | | | | | | | | |
| Noninterest expenses | | $ | 25,364 | | | $ | 27,233 | | | $ | 103,039 | | | $ | 102,089 | |
| Less non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 496 | | | | 1,103 | | | | 3,646 | | | | 4,447 | |
| Goodwill impairment loss | | | - | | | | 1,909 | | | | - | | | | 4,159 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Pension prior service credit | | | - | | | | - | | | | - | | | | 1,473 | |
| Noninterest expenses as adjusted | | $ | 24,868 | | | $ | 24,221 | | | $ | 99,393 | | | $ | 94,956 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus noninterest income | | $ | 39,408 | | | $ | 37,647 | | | $ | 148,949 | | | $ | 154,702 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Tax-equivalent income | | | 1,376 | | | | 1,164 | | | | 4,839 | | | | 4,545 | |
| Less non-GAAP adjustments: | | | | | | | | | | | | | | | | |
| Securities gains (losses) | | | 211 | | | | 1 | | | | 418 | | | | 663 | |
| Net interest income plus noninterest income - as adjusted | | $ | 40,573 | | | $ | 38,810 | | | $ | 153,370 | | | $ | 158,584 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio–Non-GAAP | | | 61.29 | % | | | 62.41 | % | | | 64.81 | % | | | 59.88 | % |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio: | | | | | | | | | | | | | | | | |
| Total stockholders' equity | | $ | 373,586 | | | $ | 391,862 | | | $ | 373,586 | | | $ | 391,862 | |
| Accumulated other comprehensive loss | | | 2,652 | | | | 7,572 | | | | 2,652 | | | | 7,572 | |
| Goodwill | | | (76,816 | ) | | | (76,248 | ) | | | (76,816 | ) | | | (76,248 | ) |
| Other intangible assets, net | | | (8,537 | ) | | | (12,183 | ) | | | (8,537 | ) | | | (12,183 | ) |
| Preferred stock | | | (80,095 | ) | | | (79,440 | ) | | | (80,095 | ) | | | (79,440 | ) |
| Tangible common equity | | $ | 210,790 | | | $ | 231,563 | | | $ | 210,790 | | | $ | 231,563 | |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | 3,630,478 | | | $ | 3,313,638 | | | $ | 3,630,478 | | | $ | 3,313,638 | |
| Goodwill | | | (76,816 | ) | | | (76,248 | ) | | | (76,816 | ) | | | (76,248 | ) |
| Other intangible assets, net | | | (8,537 | ) | | | (12,183 | ) | | | (8,537 | ) | | | (12,183 | ) |
| Tangible assets | | $ | 3,545,125 | | | $ | 3,225,207 | | | $ | 3,545,125 | | | $ | 3,225,207 | |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio | | | 5.95 | % | | | 7.18 | % | | | 5.95 | % | | | 7.18 | % |
CONSOLIDATED BALANCE SHEETS
| | | December 31, | |
(Dollars in thousands) | | 2009 | | | 2008 | |
| | | (Unaudited) | | | | |
Assets | | | | | | |
| Cash and due from banks | | $ | 49,430 | | | $ | 44,738 | |
| Federal funds sold | | | 1,863 | | | | 1,110 | |
| Interest-bearing deposits with banks | | | 8,503 | | | | 59,381 | |
| Cash and cash equivalents | | | 59,796 | | | | 105,229 | |
| Residential mortgage loans held for sale (at fair value) | | | 12,498 | | | | 11,391 | |
| Investments available-for-sale (at fair value) | | | 858,433 | | | | 291,727 | |
| Investments held-to-maturity — fair value of $137,787 (2009) and $175,908 (2008) | | | 132,593 | | | | 171,618 | |
| Other equity securities | | | 32,773 | | | | 29,146 | |
| Total loans and leases | | | 2,298,010 | | | | 2,490,646 | |
| Less: allowance for loan and lease losses | | | (64,559 | ) | | | (50,526 | ) |
| Net loans and leases | | | 2,233,451 | | | | 2,440,120 | |
| Premises and equipment, net | | | 49,606 | | | | 51,410 | |
| Other real estate owned | | | 7,464 | | | | 2,860 | |
| Accrued interest receivable | | | 13,653 | | | | 11,810 | |
| Goodwill | | | 76,816 | | | | 76,248 | |
| Other intangible assets, net | | | 8,537 | | | | 12,183 | |
| Other assets | | | 144,858 | | | | 109,896 | |
| Total assets | | $ | 3,630,478 | | | $ | 3,313,638 | |
| | | | | | | | | |
| Liabilities | | | | | | | | |
| Noninterest-bearing deposits | | $ | 540,578 | | | $ | 461,517 | |
| Interest-bearing deposits | | | 2,156,264 | | | | 1,903,740 | |
| Total deposits | | | 2,696,842 | | | | 2,365,257 | |
| Short-term borrowings | | | 499,888 | | | | 421,074 | |
| Long-term borrowings | | | 758 | | | | 66,584 | |
| Subordinated debentures | | | 35,000 | | | | 35,000 | |
| Accrued interest payable and other liabilities | | | 24,404 | | | | 33,861 | |
| Total liabilities | | | 3,256,892 | | | | 2,921,776 | |
| | | | | | | | | |
| Stockholders' Equity | | | | | | | | |
| Preferred stock—par value $1.00 (liquidation preference of $1,000 per share) shares authorized 83,094; issued and outstanding 83,094, net of discount of $2,999 (2009) and $3,654 (2008) | | | 80,095 | | | | 79,440 | |
| Common stock — par value $1.00; shares authorized 49,916,906 for 2009 and 2008; shares issued and outstanding 16,487,852 (2009) and 16,398,523 (2008) | | | 16,488 | | | | 16,399 | |
| Warrants | | | 3,699 | | | | 3,699 | |
| Additional paid in capital | | | 87,334 | | | | 85,486 | |
| Retained earnings | | | 188,622 | | | | 214,410 | |
| Accumulated other comprehensive loss | | | (2,652 | ) | | | (7,572 | ) |
| Total stockholders' equity | | | 373,586 | | | | 391,862 | |
| Total liabilities and stockholders' equity | | $ | 3,630,478 | | | $ | 3,313,638 | |
Certain reclassifications of information previously reported have been made to conform with current presentation.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
| | | Three Months Ended | | | Year Ended | |
| | | December 31, | | | December 31, | |
| (Dollars in thousands, except per share data) | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Interest Income: | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 30,320 | | | $ | 36,337 | | | $ | 126,899 | | | $ | 148,765 | |
| Interest on loans held for sale | | | 113 | | | | 118 | | | | 767 | | | | 436 | |
| Interest on deposits with banks | | | 37 | | | | 3 | | | | 149 | | | | 82 | |
| Interest and dividends on securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 6,272 | | | | 2,428 | | | | 19,945 | | | | 10,177 | |
| Exempt from federal income taxes | | | 1,907 | | | | 2,088 | | | | 7,467 | | | | 8,800 | |
| Interest on federal funds sold | | | - | | | | 56 | | | | 3 | | | | 585 | |
| Total interest income | | | 38,649 | | | | 41,030 | | | | 155,230 | | | | 168,845 | |
| Interest Expense: | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 6,803 | | | | 9,886 | | | | 34,921 | | | | 42,816 | |
| Interest on short-term borrowings | | | 3,763 | | | | 3,326 | | | | 14,520 | | | | 13,212 | |
| Interest on long-term borrowings | | | 250 | | | | 1,144 | | | | 2,081 | | | | 4,358 | |
| Total interest expense | | | 10,816 | | | | 14,356 | | | | 51,522 | | | | 60,386 | |
| Net interest income | | | 27,833 | | | | 26,674 | | | | 103,708 | | | | 108,459 | |
| Provision for loan and lease losses | | | 21,084 | | | | 17,791 | | | | 76,762 | | | | 33,192 | |
| Net interest income after provision for loan and lease losses | | | 6,749 | | | | 8,883 | | | | 26,946 | | | | 75,267 | |
| Noninterest Income: | | | | | | | | | | | | | | | | |
| Securities gains | | | 211 | | | | 1 | | | | 418 | | | | 663 | |
| Service charges on deposit accounts | | | 2,896 | | | | 3,297 | | | | 11,433 | | | | 12,778 | |
| Gains on sales of mortgage loans | | | 434 | | | | 516 | | | | 3,253 | | | | 2,288 | |
| Fees on sales of investment products | | | 761 | | | | 928 | | | | 2,823 | | | | 3,475 | |
| Trust and investment management fees | | | 2,358 | | | | 2,201 | | | | 9,421 | | | | 9,483 | |
| Insurance agency commissions | | | 1,098 | | | | 1,183 | | | | 5,236 | | | | 5,908 | |
| Income from bank owned life insurance | | | 730 | | | | 719 | | | | 2,906 | | | | 2,902 | |
| Visa check fees | | | 776 | | | | 691 | | | | 2,920 | | | | 2,875 | |
| Other income | | | 2,311 | | | | 1,437 | | | | 6,831 | | | | 5,871 | |
| Total noninterest income | | | 11,575 | | | | 10,973 | | | | 45,241 | | | | 46,243 | |
| Noninterest Expenses: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 13,141 | | | | 13,441 | | | | 54,460 | | | | 53,015 | |
| Occupancy expense of premises | | | 2,702 | | | | 2,612 | | | | 10,710 | | | | 10,762 | |
| Equipment expenses | | | 1,359 | | | | 1,642 | | | | 5,691 | | | | 6,156 | |
| Marketing | | | 777 | | | | 652 | | | | 2,166 | | | | 2,163 | |
| Outside data services | | | 967 | | | | 1,054 | | | | 3,721 | | | | 4,373 | |
| FDIC insurance | | | 1,124 | | | | 458 | | | | 6,092 | | | | 1,751 | |
| Amortization of intangible assets | | | 496 | | | | 1,103 | | | | 3,646 | | | | 4,447 | |
| Goodwill impairment loss | | | - | | | | 1,909 | | | | - | | | | 4,159 | |
| Other expenses | | | 4,798 | | | | 4,362 | | | | 16,553 | | | | 15,263 | |
| Total noninterest expenses | | | 25,364 | | | | 27,233 | | | | 103,039 | | | | 102,089 | |
| Income (loss) before income taxes | | | (7,040 | ) | | | (7,377 | ) | | | (30,852 | ) | | | 19,421 | |
| Income tax expense (benefit) | | | (3,822 | ) | | | (3,941 | ) | | | (15,997 | ) | | | 3,642 | |
| Net income (loss) | | $ | (3,218 | ) | | $ | (3,436 | ) | | $ | (14,855 | ) | | $ | 15,779 | |
| Preferred stock dividends and discount accretion | | | 1,203 | | | | 334 | | | | 4,810 | | | | 334 | |
| Net income (loss) available to common stockholders | | $ | (4,421 | ) | | $ | (3,770 | ) | | $ | (19,665 | ) | | $ | 15,445 | |
| | | | | | | | | | | | | | | | | |
| Per Share Amounts: | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | (0.20 | ) | | $ | (0.21 | ) | | $ | (0.90 | ) | | $ | 0.96 | |
| Basic net income (loss) per common share | | | (0.27 | ) | | | (0.23 | ) | | | (1.20 | ) | | | 0.94 | |
| Diluted net income (loss) per share | | | (0.20 | ) | | | (0.21 | ) | | | (0.90 | ) | | | 0.96 | |
| Diluted net income (loss) per common share | | | (0.27 | ) | | | (0.23 | ) | | | (1.20 | ) | | | 0.94 | |
| Dividends declared per share | | | 0.01 | | | | 0.24 | | | | 0.37 | | | | 0.96 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
| | | 2009 | | | 2008 | |
(Dollars in thousands, except per share data) | | | Q4 | | | | Q3 | | | | Q2 | | | | Q1 | | | | Q4 | | | | Q3 | | | | Q2 | | | | Q1 | |
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | $ | 40,025 | | | $ | 40,516 | | | $ | 39,791 | | | $ | 39,737 | | | $ | 42,194 | | | $ | 43,228 | | | $ | 42,906 | | | $ | 45,062 | |
| Interest expense | | | 10,816 | | | | 12,783 | | | | 14,220 | | | | 13,703 | | | | 14,356 | | | | 13,961 | | | | 14,726 | | | | 17,343 | |
| Tax-equivalent net interest income | | | 29,209 | | | | 27,733 | | | | 25,571 | | | | 26,034 | | | | 27,838 | | | | 29,267 | | | | 28,180 | | | | 27,719 | |
| Tax-equivalent adjustment | | | 1,376 | | | | 1,331 | | | | 1,123 | | | | 1,009 | | | | 1,164 | | | | 1,180 | | | | 1,061 | | | | 1,140 | |
| Provision for loan and lease losses | | | 21,084 | | | | 34,450 | | | | 10,615 | | | | 10,613 | | | | 17,791 | | | | 6,545 | | | | 6,189 | | | | 2,667 | |
| Noninterest income | | | 11,575 | | | | 10,662 | | | | 11,030 | | | | 11,974 | | | | 10,973 | | | | 10,879 | | | | 11,695 | | | | 12,696 | |
| Noninterest expenses | | | 25,364 | | | | 26,567 | | | | 26,858 | | | | 24,250 | | | | 27,233 | | | | 25,267 | | | | 24,886 | | | | 24,703 | |
| Income (loss) before income taxes | | | (7,040 | ) | | | (23,953 | ) | | | (1,995 | ) | | | 2,136 | | | | (7,377 | ) | | | 7,154 | | | | 7,739 | | | | 11,905 | |
| Income tax expense (benefit) | | | (3,822 | ) | | | (10,379 | ) | | | (1,715 | ) | | | (81 | ) | | | (3,941 | ) | | | 1,795 | | | | 2,088 | | | | 3,700 | |
| Net Income (loss) | | | (3,218 | ) | | | (13,574 | ) | | | (280 | ) | | | 2,217 | | | | (3,436 | ) | | | 5,359 | | | | 5,651 | | | | 8,205 | |
| Net Income (loss) available to common stockholders | | $ | (4,421 | ) | | $ | (14,779 | ) | | $ | (1,482 | ) | | $ | 1,017 | | | $ | (3,770 | ) | | $ | 5,359 | | | $ | 5,651 | | | $ | 8,205 | |
| Financial ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | (0.48 | )% | | | (1.62 | )% | | | (0.17 | )% | | | 0.12 | % | | | (0.42 | )% | | | 0.67 | % | | | 0.73 | % | | | 1.07 | % |
| Return on average common equity | | | (4.66 | )% | | | (19.01 | )% | | | (1.90 | )% | | | 1.32 | % | | | (4.70 | )% | | | 6.64 | % | | | 7.09 | % | | | 10.45 | % |
| Net interest margin | | | 3.40 | % | | | 3.27 | % | | | 3.11 | % | | | 3.39 | % | | | 3.73 | % | | | 4.02 | % | | | 3.96 | % | | | 3.99 | % |
| Efficiency ratio - GAAP * | | | 64.36 | % | | | 71.68 | % | | | 75.70 | % | | | 65.54 | % | | | 72.34 | % | | | 64.84 | % | | | 64.11 | % | | | 62.90 | % |
| Efficiency ratio - Non-GAAP * | | | 61.29 | % | | | 66.49 | % | | | 70.58 | % | | | 61.29 | % | | | 62.41 | % | | | 58.27 | % | | | 59.73 | % | | | 59.18 | % |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | (0.20 | ) | | $ | (0.83 | ) | | $ | (0.02 | ) | | $ | 0.14 | | | $ | (0.21 | ) | | $ | 0.33 | | | $ | 0.35 | | | $ | 0.50 | |
| Basic net income (loss) per common share | | | (0.27 | ) | | | (0.90 | ) | | | (0.09 | ) | | | 0.06 | | | | (0.23 | ) | | | 0.33 | | | | 0.35 | | | | 0.50 | |
| Diluted net income (loss) per share | | | (0.20 | ) | | | (0.83 | ) | | | (0.02 | ) | | | 0.13 | | | | (0.21 | ) | | | 0.33 | | | | 0.34 | | | | 0.50 | |
| Diluted net income (loss) per common share | | | (0.27 | ) | | | (0.90 | ) | | | (0.09 | ) | | | 0.06 | | | | (0.23 | ) | | | 0.33 | | | | 0.34 | | | | 0.50 | |
| Dividends declared per common share | | | 0.01 | | | | 0.12 | | | | 0.12 | | | | 0.12 | | | | 0.24 | | | | 0.24 | | | | 0.24 | | | | 0.24 | |
| Book value per common share | | | 17.80 | | | | 18.25 | | | | 18.92 | | | | 19.06 | | | | 19.05 | | | | 19.51 | | | | 19.56 | | | | 19.50 | |
| Average fully diluted shares | | | 16,477,925 | | | | 16,496,480 | | | | 16,444,252 | | | | 16,433,788 | | | | 16,434,214 | | | | 16,418,588 | | | | 16,427,213 | | | | 16,407,778 | |
| Noninterest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities gains | | $ | 211 | | | $ | 15 | | | $ | 30 | | | $ | 162 | | | $ | 1 | | | $ | 9 | | | $ | 79 | | | $ | 574 | |
| Service charges on deposit accounts | | | 2,896 | | | | 2,823 | | | | 2,851 | | | | 2,863 | | | | 3,297 | | | | 3,249 | | | | 3,202 | | | | 3,030 | |
| Gains on sales of mortgage loans | | | 434 | | | | 1,011 | | | | 786 | | | | 1,022 | | | | 516 | | | | 397 | | | | 653 | | | | 722 | |
| Fees on sales of investment products | | | 761 | | | | 740 | | | | 622 | | | | 700 | | | | 928 | | | | 820 | | | | 905 | | | | 822 | |
| Trust and investment management fees | | | 2,358 | | | | 2,406 | | | | 2,370 | | | | 2,287 | | | | 2,201 | | | | 2,380 | | | | 2,505 | | | | 2,397 | |
| Insurance agency commissions | | | 1,098 | | | | 1,048 | | | | 1,040 | | | | 2,050 | | | | 1,183 | | | | 1,282 | | | | 1,357 | | | | 2,086 | |
| Income from bank owned life insurance | | | 730 | | | | 740 | | | | 725 | | | | 711 | | | | 719 | | | | 742 | | | | 727 | | | | 714 | |
| Visa check fees | | | 776 | | | | 758 | | | | 748 | | | | 638 | | | | 691 | | | | 727 | | | | 761 | | | | 696 | |
| Other income | | | 2,311 | | | | 1,121 | | | | 1,858 | | | | 1,541 | | | | 1,437 | | | | 1,273 | | | | 1,506 | | | | 1,655 | |
| Total noninterest income | | $ | 11,575 | | | $ | 10,662 | | | $ | 11,030 | | | $ | 11,974 | | | $ | 10,973 | | | $ | 10,879 | | | $ | 11,695 | | | $ | 12,696 | |
| Noninterest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 13,141 | | | $ | 14,411 | | | $ | 13,704 | | | $ | 13,204 | | | $ | 13,441 | | | $ | 11,949 | | | $ | 13,862 | | | $ | 13,763 | |
| Occupancy expense of premises | | | 2,702 | | | | 2,685 | | | | 2,548 | | | | 2,775 | | | | 2,612 | | | | 2,732 | | | | 2,619 | | | | 2,799 | |
| Equipment expenses | | | 1,359 | | | | 1,444 | | | | 1,374 | | | | 1,514 | | | | 1,642 | | | | 1,515 | | | | 1,560 | | | | 1,439 | |
| Marketing | | | 777 | | | | 484 | | | | 485 | | | | 420 | | | | 652 | | | | 526 | | | | 488 | | | | 497 | |
| Outside data services | | | 967 | | | | 987 | | | | 961 | | | | 806 | | | | 1,054 | | | | 1,116 | | | | 1,081 | | | | 1,122 | |
| FDIC insurance | | | 1,124 | | | | 1,219 | | | | 2,790 | | | | 959 | | | | 458 | | | | 480 | | | | 421 | | | | 392 | |
| Amortization of intangible assets | | | 496 | | | | 1,048 | | | | 1,047 | | | | 1,055 | | | | 1,103 | | | | 1,103 | | | | 1,117 | | | | 1,124 | |
| Goodwill impairment loss | | | - | | | | - | | | | - | | | | - | | | | 1,909 | | | | 2,250 | | | | - | | | | - | |
| Other expenses | | | 4,798 | | | | 4,289 | | | | 3,949 | | | | 3,517 | | | | 4,362 | | | | 3,596 | | | | 3,738 | | | | 3,567 | |
| Total noninterest expense | | $ | 25,364 | | | $ | 26,567 | | | $ | 26,858 | | | $ | 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 traditional, non-GAAP efficiency ratio excludes intangible asset amortization, the goodwill impairment loss and the pension prior servcie credit 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. |
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
| | | 2009 | | | 2008 | |
(Dollars in thousands) | | | Q4 | | | | Q3 | | | | Q2 | | | | Q1 | | | | Q4 | | | | Q3 | | | | Q2 | | | | Q1 | |
| Balance sheets at quarter end: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 457,414 | | | $ | 455,312 | | | $ | 450,500 | | | $ | 461,359 | | | $ | 457,571 | | | $ | 452,815 | | | $ | 461,000 | | | $ | 459,768 | |
| Residential construction loans | | | 92,283 | | | | 115,258 | | | | 138,923 | | | | 163,861 | | | | 189,249 | | | | 221,630 | | | | 199,602 | | | | 183,690 | |
| Commercial mortgage loans | | | 894,951 | | | | 873,438 | | | | 862,315 | | | | 859,882 | | | | 847,452 | | | | 804,728 | | | | 752,905 | | | | 732,692 | |
| Commercial construction loans | | | 131,789 | | | | 174,052 | | | | 199,278 | | | | 222,805 | | | | 223,169 | | | | 247,930 | | | | 273,059 | | | | 256,714 | |
| Commercial loans and leases | | | 321,924 | | | | 314,599 | | | | 333,025 | | | | 342,870 | | | | 366,978 | | | | 358,097 | | | | 356,256 | | | | 354,509 | |
| Consumer loans | | | 399,649 | | | | 401,623 | | | | 405,348 | | | | 411,068 | | | | 406,227 | | | | 397,218 | | | | 386,126 | | | | 376,650 | |
| Total loans and leases | | | 2,298,010 | | | | 2,334,282 | | | | 2,389,389 | | | | 2,461,845 | | | | 2,490,646 | | | | 2,482,418 | | | | 2,428,948 | | | | 2,364,023 | |
| Less: allowance for loan and lease losses | | | (64,559 | ) | | | (62,937 | ) | | | (58,317 | ) | | | (59,798 | ) | | | (50,526 | ) | | | (38,266 | ) | | | (33,435 | ) | | | (27,887 | ) |
| Net loans and leases | | | 2,233,451 | | | | 2,271,345 | | | | 2,331,072 | | | | 2,402,047 | | | | 2,440,120 | | | | 2,444,152 | | | | 2,395,513 | | | | 2,336,136 | |
| Goodwill | | | 76,816 | | | | 76,816 | | | | 76,816 | | | | 76,816 | | | | 76,248 | | | | 75,701 | | | | 78,376 | | | | 78,111 | |
| Other intangible assets, net | | | 8,537 | | | | 9,033 | | | | 10,080 | | | | 11,128 | | | | 12,183 | | | | 13,286 | | | | 14,390 | | | | 15,507 | |
| Total assets | | | 3,630,478 | | | | 3,632,391 | | | | 3,617,497 | | | | 3,519,432 | | | | 3,313,638 | | | | 3,195,117 | | | | 3,164,123 | | | | 3,160,896 | |
| Total deposits | | | 2,696,842 | | | | 2,683,487 | | | | 2,650,845 | | | | 2,553,912 | | | | 2,365,257 | | | | 2,248,812 | | | | 2,294,791 | | | | 2,340,568 | |
| Customer repurchase agreements | | | 74,062 | | | | 84,138 | | | | 98,827 | | | | 91,928 | | | | 75,106 | | | | 77,630 | | | | 93,919 | | | | 101,666 | |
| Total stockholders' equity | | | 373,586 | | | | 380,571 | | | | 391,262 | | | | 392,522 | | | | 391,862 | | | | 319,700 | | | | 320,218 | | | | 318,967 | |
| Quarterly average balance sheets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 464,737 | | | $ | 460,772 | | | $ | 477,955 | | | $ | 481,721 | | | $ | 457,956 | | | $ | 463,778 | | | $ | 470,144 | | | $ | 463,597 | |
| Residential construction loans | | | 106,115 | | | | 123,892 | | | | 150,914 | | | | 176,811 | | | | 208,616 | | | | 210,363 | | | | 193,822 | | | | 174,626 | |
| Commercial mortgage loans | | | 877,419 | | | | 871,831 | | | | 862,658 | | | | 854,402 | | | | 833,752 | | | | 779,652 | | | | 733,905 | | | | 690,289 | |
| Commercial construction loans | | | 165,784 | | | | 191,021 | | | | 216,897 | | | | 224,229 | | | | 236,176 | | | | 253,806 | | | | 261,360 | | | | 266,098 | |
| Commercial loans and leases | | | 312,547 | | | | 327,569 | | | | 341,039 | | | | 359,820 | | | | 361,731 | | | | 356,327 | | | | 359,287 | | | | 351,862 | |
| Consumer loans | | | 401,164 | | | | 401,930 | | | | 408,200 | | | | 408,843 | | | | 400,937 | | | | 391,640 | | | | 380,911 | | | | 378,261 | |
| Total loans and leases | | | 2,327,766 | | | | 2,377,015 | | | | 2,457,663 | | | | 2,505,826 | | | | 2,499,168 | | | | 2,455,566 | | | | 2,399,429 | | | | 2,324,733 | |
| Securities | | | 1,026,179 | | | | 956,350 | | | | 772,878 | | | | 536,981 | | | | 431,858 | | | | 423,082 | | | | 431,182 | | | | 427,819 | |
| Total earning assets | | | 3,409,867 | | | | 3,370,823 | | | | 3,298,923 | | | | 3,117,590 | | | | 2,972,173 | | | | 2,898,968 | | | | 2,862,012 | | | | 2,795,453 | |
| Total assets | | | 3,672,382 | | | | 3,627,617 | | | | 3,549,185 | | | | 3,375,715 | | | | 3,235,432 | | | | 3,167,145 | | | | 3,134,440 | | | | 3,072,428 | |
| Total interest-bearing liabilities | | | 2,709,152 | | | | 2,671,944 | | | | 2,595,303 | | | | 2,471,762 | | | | 2,405,890 | | | | 2,363,299 | | | | 2,344,266 | | | | 2,311,629 | |
| Noninterest-bearing demand deposits | | | 549,347 | | | | 532,462 | | | | 527,713 | | | | 476,361 | | | | 458,538 | | | | 453,281 | | | | 441,330 | | | | 412,369 | |
| Total deposits | | | 2,718,882 | | | | 2,661,108 | | | | 2,581,837 | | | | 2,431,471 | | | | 2,305,880 | | | | 2,264,990 | | | | 2,306,867 | | | | 2,260,837 | |
| Customer repurchase agreements | | | 92,471 | | | | 95,310 | | | | 93,980 | | | | 69,212 | | | | 84,012 | | | | 81,158 | | | | 92,968 | | | | 94,841 | |
| Total stockholders' equity | | | 380,534 | | | | 391,571 | | | | 393,201 | | | | 391,673 | | | | 342,639 | | | | 321,028 | | | | 320,409 | | | | 315,755 | |
| Capital and credit quality measures: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 10.36 | % | | | 10.79 | % | | | 11.08 | % | | | 11.60 | % | | | 10.59 | % | | | 10.14 | % | | | 10.22 | % | | | 10.28 | % |
| Allowance for loan and lease losses to loans and leases | | | 2.81 | % | | | 2.70 | % | | | 2.44 | % | | | 2.43 | % | | | 2.03 | % | | | 1.54 | % | | | 1.38 | % | | | 1.18 | % |
| Nonperforming loans to total loans | | | 5.82 | % | | | 6.14 | % | | | 5.84 | % | | | 4.90 | % | | | 2.79 | % | | | 2.69 | % | | | 2.62 | % | | | 1.96 | % |
| Nonperforming assets to total assets | | | 3.89 | % | | | 4.14 | % | | | 4.05 | % | | | 3.57 | % | | | 2.18 | % | | | 2.14 | % | | | 2.05 | % | | | 1.48 | % |
| Annualized net charge-offs (recoveries) to average loans and leases | | | 3.34 | % | | | 5.00 | % | | | 1.97 | % | | | 0.22 | % | | | 0.88 | % | | | 0.28 | % | | | 0.11 | % | | | -0.02 | % |
| Net charge-offs (recoveries) | | $ | 19,462 | | | $ | 29,831 | | | $ | 12,095 | | | $ | 1,341 | | | $ | 5,531 | | | $ | 1,714 | | | $ | 641 | | | $ | (129 | ) |
| Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-accrual loans and leases | | $ | 111,180 | | | $ | 127,473 | | | $ | 123,117 | | | $ | 110,761 | | | $ | 67,950 | | | $ | 64,246 | | | $ | 60,373 | | | $ | 37,353 | |
| Loans and leases 90 days past due | | | 19,001 | | | | 15,491 | | | | 16,004 | | | | 9,545 | | | | 1,038 | | | | 2,074 | | | | 2,538 | | | | 8,244 | |
| Restructured loans and leases | | | 3,549 | | | | 395 | | | | 395 | | | | 395 | | | | 395 | | | | 395 | | | | 655 | | | | 655 | |
| Other real estate owned, net | | | 7,464 | | | | 6,873 | | | | 6,829 | | | | 5,094 | | | | 2,860 | | | | 1,698 | | | | 1,352 | | | | 661 | |
| Total nonperforming assets | | $ | 141,194 | | | $ | 150,232 | | | $ | 146,345 | | | $ | 125,795 | | | $ | 72,243 | | | $ | 68,413 | | | $ | 64,918 | | | $ | 46,913 | |
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
| | | Three Months Ended December 31, | |
| | | 2009 | | | 2008 | |
| | | | | | | | | Annualized | | | | | | | | | Annualized | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
(Dollars in thousands and tax-equivalent) | | Balances | | | Interest | | | Yield/Rate | | | Balances | | | Interest | | | Yield/Rate | |
| Assets | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 464,737 | | | $ | 6,540 | | | | 5.63 | % | | $ | 457,956 | | | $ | 6,976 | | | | 6.09 | % |
| Residential construction loans | | | 106,115 | | | | 1,332 | | | | 4.98 | | | | 208,616 | | | | 2,857 | | | | 5.45 | |
| Commercial mortgage loans | | | 877,419 | | | | 13,501 | | | | 6.10 | | | | 833,752 | | | | 13,494 | | | | 6.44 | |
| Commercial construction loans | | | 165,784 | | | | 957 | | | | 2.29 | | | | 236,176 | | | | 2,718 | | | | 4.58 | |
| Commercial loans and leases | | | 312,547 | | | | 4,124 | | | | 5.24 | | | | 361,731 | | | | 5,638 | | | | 6.21 | |
| Consumer loans | | | 401,164 | | | | 3,979 | | | | 3.95 | | | | 400,937 | | | | 4,771 | | | | 4.73 | |
| Total loans and leases | | | 2,327,766 | | | | 30,433 | | | | 5.20 | | | | 2,499,168 | | | | 36,454 | | | | 5.81 | |
| Taxable securities | | | 854,637 | | | | 6,272 | | | | 3.04 | | | | 254,056 | | | | 2,428 | | | | 3.94 | |
| Tax-advantaged securities | | | 171,542 | | | | 3,283 | | | | 6.85 | | | | 177,802 | | | | 3,252 | | | | 6.98 | |
| Interest-bearing deposits with banks | | | 54,359 | | | | 37 | | | | 0.27 | | | | 515 | | | | 3 | | | | 2.71 | |
| Federal funds sold | | | 1,563 | | | | - | | | | 0.13 | | | | 40,632 | | | | 56 | | | | 0.54 | |
| TOTAL EARNING ASSETS | | | 3,409,867 | | | | 40,025 | | | | 4.66 | | | | 2,972,173 | | | | 42,193 | | | | 5.65 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (65,093 | ) | | | | | | | | | | | (41,204 | ) | | | | | | | | |
| Cash and due from banks | | | 44,646 | | | | | | | | | | | | 50,963 | | | | | | | | | |
| Premises and equipment, net | | | 49,894 | | | | | | | | | | | | 52,092 | | | | | | | | | |
| Other assets | | | 233,068 | | | | | | | | | | | | 201,408 | | | | | | | | | |
| Total assets | | $ | 3,672,382 | | | | | | | | | | | $ | 3,235,432 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 262,327 | | | | 94 | | | | 0.14 | % | | $ | 236,609 | | | | 143 | | | | 0.24 | % |
| Regular savings deposits | | | 153,692 | | | | 34 | | | | 0.09 | | | | 144,275 | | | | 90 | | | | 0.25 | |
| Money market savings deposits | | | 935,980 | | | | 2,035 | | | | 0.86 | | | | 636,628 | | | | 2,487 | | | | 1.55 | |
| Time deposits | | | 817,536 | | | | 4,640 | | | | 2.25 | | | | 829,830 | | | | 7,166 | | | | 3.44 | |
| Total interest-bearing deposits | | | 2,169,535 | | | | 6,803 | | | | 1.24 | | | | 1,847,342 | | | | 9,886 | | | | 2.13 | |
| Short-term borrowings | | | 502,371 | | | | 3,763 | | | | 2.97 | | | | 447,162 | | | | 3,326 | | | | 2.95 | |
| Long-term borrowings | | | 37,246 | | | | 250 | | | | 2.66 | | | | 111,386 | | | | 1,144 | | | | 4.09 | |
| TOTAL INTEREST-BEARING LIABILITIES | | | 2,709,152 | | | | 10,816 | | | | 1.59 | | | | 2,405,890 | | | | 14,356 | | | | 2.38 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 549,347 | | | | | | | | | | | | 458,538 | | | | | | | | | |
| Other liabilities | | | 33,349 | | | | | | | | | | | | 28,365 | | | | | | | | | |
| Stockholders' equity | | | 380,534 | | | | | | | | | | | | 342,639 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,672,382 | | | | | | | | | | | $ | 3,235,432 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 29,209 | | | | 3.07 | % | | | | | | $ | 27,837 | | | | 3.27 | % |
| Less: tax equivalent adjustment | | | | | | | 1,376 | | | | | | | | | | | | 1,164 | | | | | |
| Net interest income | | | | | | $ | 27,833 | | | | | | | | | | | $ | 26,673 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.66 | % | | | | | | | | | | | 5.65 | % |
| Interest expense/earning assets | | | | | | | | | | | 1.26 | | | | | | | | | | | | 1.92 | |
| Net interest margin | | | | | | | | | | | 3.40 | % | | | | | | | | | | | 3.73 | % |
| * | 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 8.25% 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 adjustments utilized in the above table to compute yields aggregated to $5.5 million in 2009 and $4.6 million in2008 |
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
| | | Year Ended December 31, | |
| | | 2009 | | | 2008 | |
| | | | | | | | | Annualized | | | | | | | | | Annualized | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
(Dollars in thousands and tax-equivalent) | | Balances | | | Interest | | | Yield/Rate | | | Balances | | | Interest | | | Yield/Rate | |
| Assets | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 471,221 | | | $ | 27,560 | | | | 5.85 | % | | $ | 463,853 | | | $ | 28,547 | | | | 6.15 | % |
| Residential construction loans | | | 139,197 | | | | 7,165 | | | | 5.15 | | | | 196,926 | | | | 11,585 | | | | 5.88 | |
| Commercial mortgage loans | | | 866,655 | | | | 53,280 | | | | 6.15 | | | | 759,658 | | | | 50,699 | | | | 6.67 | |
| Commercial construction loans | | | 199,299 | | | | 5,669 | | | | 2.84 | | | | 254,309 | | | | 13,859 | | | | 5.45 | |
| Commercial loans and leases | | | 335,093 | | | | 17,991 | | | | 5.37 | | | | 357,311 | | | | 24,007 | | | | 6.72 | |
| Consumer loans | | | 405,005 | | | | 16,001 | | | | 3.96 | | | | 387,983 | | | | 20,503 | | | | 5.28 | |
| Total loans and leases | | | 2,416,470 | | | | 127,666 | | | | 5.28 | | | | 2,420,040 | | | | 149,200 | | | | 6.17 | |
| Taxable securities | | | 662,853 | | | | 20,784 | | | | 3.14 | | | | 242,422 | | | | 10,684 | | | | 4.41 | |
| Tax-advantaged securities | | | 161,949 | | | | 11,467 | | | | 7.08 | | | | 186,057 | | | | 12,838 | | | | 6.90 | |
| Interest-bearing deposits with banks | | | 56,980 | | | | 149 | | | | 0.26 | | | | 3,213 | | | | 82 | | | | 2.55 | |
| Federal funds sold | | | 2,045 | | | | 3 | | | | 0.19 | | | | 30,711 | | | | 585 | | | | 1.90 | |
| TOTAL EARNING ASSETS | | | 3,300,297 | | | | 160,069 | | | | 4.85 | | | | 2,882,443 | | | | 173,389 | | | | 6.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (59,961 | ) | | | | | | | | | | | (32,629 | ) | | | | | | | | |
| Cash and due from banks | | | 45,038 | | | | | | | | | | | | 49,981 | | | | | | | | | |
| Premises and equipment, net | | | 50,649 | | | | | | | | | | | | 53,207 | | | | | | | | | |
| Other assets | | | 221,211 | | | | | | | | | | | | 199,584 | | | | | | | | | |
| Total assets | | $ | 3,557,234 | | | | | | | | | | | $ | 3,152,586 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 254,047 | | | | 420 | | | | 0.17 | % | | $ | 242,848 | | | | 671 | | | | 0.28 | % |
| Regular savings deposits | | | 152,383 | | | | 210 | | | | 0.14 | | | | 153,123 | | | | 455 | | | | 0.30 | |
| Money market savings deposits | | | 841,336 | | | | 10,725 | | | | 1.27 | | | | 669,239 | | | | 12,247 | | | | 1.83 | |
| Time deposits | | | 829,817 | | | | 23,566 | | | | 2.84 | | | | 777,979 | | | | 29,443 | | | | 3.78 | |
| Total interest-bearing deposits | | | 2,077,583 | | | | 34,921 | | | | 1.68 | | | | 1,843,189 | | | | 42,816 | | | | 2.32 | |
| Short-term borrowings | | | 486,364 | | | | 14,520 | | | | 2.99 | | | | 409,933 | | | | 13,212 | | | | 3.22 | |
| Long-term borrowings | | | 48,908 | | | | 2,081 | | | | 4.26 | | | | 103,304 | | | | 4,358 | | | | 4.22 | |
| TOTAL INTEREST-BEARING LIABILITIES | | | 2,612,855 | | | | 51,522 | | | | 1.97 | | | | 2,356,426 | | | | 60,386 | | | | 2.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 521,701 | | | | | | | | | | | | 441,459 | | | | | | | | | |
| Other liabilities | | | 33,457 | | | | | | | | | | | | 29,706 | | | | | | | | | |
| Stockholders' equity | | | 389,221 | | | | | | | | | | | | 324,995 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,557,234 | | | | | | | | | | | $ | 3,152,586 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 108,547 | | | | 2.88 | % | | | | | | $ | 113,003 | | | | 3.46 | % |
| Less: tax equivalent adjustment | | | | | | | 4,839 | | | | | | | | | | | | 4,545 | | | | | |
| Net interest income | | | | | | $ | 103,708 | | | | | | | | | | | $ | 108,458 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.85 | % | | | | | | | | | | | 6.02 | % |
| Interest expense/earning assets | | | | | | | | | | | 1.56 | | | | | | | | | | | | 2.10 | |
| Net interest margin | | | | | | | | | | | 3.29 | % | | | | | | | | | | | 3.92 | % |
| * | 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 8.25% 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 adjustments utilized in the above table to compute yields aggregated to $4.8 million in 2009 and $4.5 million in2008 |
