FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS FIRST QUARTER RESULTS
OLNEY, MARYLAND, April 22, 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 first quarter of 2010 of $0.7 million (($0.04) per diluted share) compared to net income available to common stockholders of $1.0 million ($0.06 per diluted share) for the first quarter of 2009 and a net loss available to common stockholders of $4.4 million (($0.27) per diluted share) for the fourth quarter of 2009. The first quarter of 2010 included a provision for loan and lease losses of $15.0 million.
“Our cautious optimism was further confirmed by our first quarter results. As we continued to aggressively address and resolve our problem credits, we concurrently executed well on fundamentals such as sound expense control and continued improvement in our net interest margin, all of which were strong drivers of our results for the quarter. This was particularly satisfying considering the decline in loan balances compared to the prior year due to weak customer demand and our prudent application of conservative underwriting standards,” said Daniel J. Schrider, president and chief executive officer.”
“The loan-loss provision declined for the second quarter in a row, largely due to a reduced level of net charge-offs and a stabilizing level of non-performing loans. These encouraging developments are mainly related to our residential real estate development portfolio, where the majority of problem loans are concentrated,” said Schrider.
“We are extremely pleased with the market reception to our recent common stock offering, which was substantially over subscribed and resulted in net proceeds of $95.6 million. Repayment of TARP remains one of our highest corporate priorities for the proceeds of this offering,” said Schrider.
First Quarter Highlights:
| | · | The Company issued 7.475 million shares of common stock in a public offering during the first quarter. The offering resulted in net proceeds after expenses of $95.6 million. |
| | · | The provision for loan and lease losses totaled $15.0 million for the quarter compared to $10.6 million for the first quarter of 2009 and $21.1 million for the fourth quarter of 2009. |
| | · | The net interest margin was 3.56% for the first quarter compared to 3.39% for the first quarter of 2009 and 3.40% for the fourth quarter of 2009. |
| | · | Non-interest expenses increased 4% for the quarter compared to the first quarter of 2009 and were relatively even with the fourth quarter of 2009. |
Review of Balance Sheet and Credit Quality
Comparing March 31, 2010 balances to March 31, 2009, total assets increased 4% to $3.7 billion. Total loans and leases decreased 8% to $2.3 billion compared to the prior year. This decrease in loans was attributable to declines in all major categories of the loan portfolio due to conservative underwriting standards and a lack of loan demand as a result of soft regional economic conditions. Total loans decreased 2% compared to the fourth quarter of 2009.
Customer funding sources, which include deposits and other short-term borrowings from core customers, increased 3% to $2.7 billion at March 31, 2010 compared to the prior year. 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. Total deposits decreased 1% compared to the fourth quarter of 2009.
Stockholders’ equity totaled $471.9 million at March 31, 2010, and represented 12.9% of total assets, compared to 11.2% at March 31, 2009. At March 31, 2010 the Company had a total risk-based capital ratio of 17.04%, a tier 1 risk-based capital ratio of 15.77% and a tier 1 leverage ratio of 12.01% which were all above amounts needed in order to be categorized as “well capitalized” for regulatory purposes. The Company’s regulatory capital ratios include the proceeds of its recent public offering.
The provision for loan and lease losses totaled $15.0 million for the first quarter of 2010 compared to $10.6 million for the first quarter of 2009 and $21.1 million for the fourth quarter of 2009. The increase over the prior year quarter was primarily due to charge-offs and additional specific reserves primarily related to loans in the residential real estate development portfolio. The decrease compared to the fourth quarter of 2009 was also largely due to a decline in net charge-offs.
Loan charge-offs, net of recoveries totaled $10.0 million for the first quarter of 2010 compared to net charge-offs of $1.3 million for the first quarter of 2009 and net charge-offs of $19.5 million for the fourth quarter of 2009. The allowance for loan and lease losses represented 3.08% of outstanding loans and leases and 51% of non-performing loans at March 31, 2010 compared to 2.43% of outstanding loans and leases and 50% of non-performing loans at March 31, 2009 and 2.81% of outstanding loans and leases and 48% of non-performing loans at December 31, 2009. Non-performing loans includes loans 90 days or more past due which are still accruing interest.
Non-performing assets totaled $143.3 million at March 31, 2010 compared to $125.8 million at March 31, 2009 and $141.2 million at December 31, 2009. The increase over the prior year was due primarily to an increase in delinquencies in the residential mortgage portfolio.
Income Statement Review
Comparing the first quarter of 2010 and 2009, net interest income increased by $3.1 million, or 13%. This increase was due to the decline in rates paid on deposits and borrowings together with a higher level of interest earning assets.
Non-interest income decreased 5% to $11.3 million in the first quarter of 2010 as compared to $12.0 million in the first quarter of 2009. This decrease was due primarily to other non-interest income which decreased $0.3 million or 16% compared to the first quarter of 2009 due largely to lower accrued gains on mortgage commitments which was somewhat offset by higher mark-to-market adjustments on commercial loan swaps. In addition, gains on sales of mortgage loans decreased $0.4 million or 40% due to lower mortgage loan origination volumes while service charges on deposit accounts declined $0.2 million or 8% due to lower overdraft fees. Trust and investment fees increased $0.2 million or 7% due to growth in assets under management and Visa check charges increased $0.1 million or 16% due to higher volumes of electronic transactions.
Non-interest expenses were $25.3 million in the first quarter of 2010 compared to $24.3 million in the first quarter of 2009, an increase of $1.0 million or 4%. Salaries and benefits expenses remained relatively flat for the quarter. Outside data services increased $0.3 million or 39% compared to the prior year period due primarily to costs associated with the issuance of new Visa debit cards while FDIC insurance expense increased $0.2 million or 19% due to higher deposit balances and increased assessment rates. Other non-interest expenses increased $0.8 million or 24% due primarily to higher mark-to-market adjustments associated with commercial loan swaps and other real estate owned expenses.
Conference Call
The Company’s management will host a conference call to discuss its first 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 877-380-5664. 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 22, 2010. A telephone voice replay will also be available during that same time period at 800-642-1687. Please use pass code #68368535 to access.
About Sandy Spring Bancorp/Sandy Spring Bank
With $3.7 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, 2009, 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)
| | | Three Months Ended | | | | |
| | | March 31, | | | % | |
(Dollars in thousands, except per share data) | | 2010 | | | 2009 | | | Change | |
| Results of Operations: | | | | | | | | | |
| Net interest income | | $ | 28,159 | | | $ | 25,025 | | | | 13 | % |
| Provision for loan and lease losses | | | 15,025 | | | | 10,613 | | | | 42 | |
| Non-interest income | | | 11,340 | | | | 11,974 | | | | (5 | ) |
| Non-interest expenses | | | 25,306 | | | | 24,250 | | | | 4 | |
| Income (loss) before income taxes | | | (832 | ) | | | 2,136 | | | | (139 | ) |
| Net income | | | 501 | | | | 2,217 | | | | (77 | ) |
| Net income (loss) available to common stockholders | | $ | (699 | ) | | $ | 1,017 | | | | (169 | ) |
| | | | | | | | | | | | | |
| Return on average assets (1) | | | )% | | | 0.12 | % | | | | |
| Return on average common equity (1) | | (0.92 | )% | | | 1.32 | % | | | | |
| Net interest margin | | | 3.56 | % | | | 3.39 | % | | | | |
| Efficiency ratio - GAAP (3) | | | 64.07 | % | | | 65.54 | % | | | | |
| Efficiency ratio - Non-GAAP (3) | | | 61.56 | % | | | 61.29 | % | | | | |
| | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | |
| Basic net income | | $ | 0.03 | | | $ | 0.14 | | | | (79 | )% |
| Basic net income (loss) per common share | | | (0.04 | ) | | | 0.06 | | | | (167 | ) |
| Diluted net income | | | 0.03 | | | | 0.13 | | | | (77 | ) |
| Diluted net income (loss) per common share | | | (0.04 | ) | | | 0.06 | | | | (167 | ) |
| Dividends declared per common share | | | 0.01 | | | | 0.12 | | | | (92 | ) |
| Book value per common share | | | 16.33 | | | | 19.06 | | | | (14 | ) |
| Average fully diluted shares | | | 17,243,415 | | | | 16,433,788 | | | | | |
| | | | | | | | | | | | | |
| Financial Condition at period-end: | | | | | | | | | | | | |
| Assets | | $ | 3,673,246 | | | $ | 3,519,432 | | | | 4 | % |
| Total loans and leases | | | 2,256,657 | | | | 2,461,845 | | | | (8 | ) |
| Investment securities | | | 985,966 | | | | 661,169 | | | | 49 | |
| Deposits | | | 2,653,448 | | | | 2,553,912 | | | | 4 | |
| Stockholders' equity | | | 471,857 | | | | 392,522 | | | | 20 | |
| | | | | | | | | | | | | |
| Capital ratios: | | | | | | | | | | | | |
| Tier 1 leverage | | | 12.01 | % | | | 10.52 | % | | | | |
| Tier 1 capital to risk-weighted assets | | | 15.77 | % | | | 12.00 | % | | | | |
| Total regulatory capital to risk-weighted assets | | | 17.04 | % | | | 13.26 | % | | | | |
| Tangible common equity to tangible assets (4) | | | 8.53 | % | | | 6.74 | % | | | | |
| Average equity to average assets | | | 10.78 | % | | | 11.60 | % | | | | |
| | | | | | | | | | | | | |
| Credit quality ratios: | | | | | | | | | | | | |
| Allowance for loan and lease losses to loans and leases | | | 3.08 | % | | | 2.43 | % | | | | |
| Nonperforming loans to total loans | | | 6.05 | % | | | 4.90 | % | | | | |
| Nonperforming assets to total assets | | | 3.90 | % | | | 3.57 | % | | | | |
| Annualized net charge-offs to average loans and leases (2) | | 1.78 | % | | | 0.22 | % | | | | |
| (1) | Calculation utilizes net income available to common stockholders. |
| (2) | Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale. |
| (3) | The GAAP efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional, non-GAAP efficiency ratio excludes intangible asset amortization and the goodwill impairment loss from non-interest expenses; excludes securities gains (losses) from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights. |
| (4) | 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 | |
| | | March 31, | |
| (Dollars in thousands) | | 2010 | | | 2009 | |
| GAAP efficiency ratio: | | | | | | |
| Non-interest expenses | | $ | 25,306 | | | $ | 24,250 | |
| Net interest income plus non-interest income | | $ | 39,499 | | | $ | 36,999 | |
| | | | | | | | | |
| Efficiency ratio–GAAP | | | 64.07 | % | | | 65.54 | % |
| | | | | | | | | |
| Non-GAAP efficiency ratio: | | | | | | | | |
| Non-interest expenses | | $ | 25,306 | | | $ | 24,250 | |
| Less non-GAAP adjustment: | | | | | | | | |
| Amortization of intangible assets | | | 496 | | | | 1,055 | |
| Non-interest expenses as adjusted | | $ | 24,810 | | | $ | 23,195 | |
| | | | | | | | | |
| Net interest income plus non-interest income | | $ | 39,499 | | | $ | 36,999 | |
| Plus non-GAAP adjustment: | | | | | | | | |
| Tax-equivalent income | | | 1,008 | | | | 1,009 | |
| Less non-GAAP adjustments: | | | | | | | | |
| Securities gains | | | 203 | | | | 162 | |
| Net interest income plus non-interest income - as adjusted | | $ | 40,304 | | | $ | 37,846 | |
| | | | | | | | | |
| Efficiency ratio–Non-GAAP | | | 61.56 | % | | | 61.29 | % |
| | | | | | | | | |
| Tangible common equity ratio: | | | | | | | | |
| Total stockholders' equity | | $ | 471,857 | | | $ | 392,522 | |
| Accumulated other comprehensive (income) loss | | | (477 | ) | | | 6,466 | |
| Goodwill | | | (76,816 | ) | | | (76,816 | ) |
| Other intangible assets, net | | | (8,042 | ) | | | (11,128 | ) |
| Preferred stock | | | (80,257 | ) | | | (79,601 | ) |
| Tangible common equity | | $ | 306,265 | | | $ | 231,443 | |
| | | | | | | | | |
| Total assets | | $ | 3,673,246 | | | $ | 3,519,432 | |
| Goodwill | | | (76,816 | ) | | | (76,816 | ) |
| Other intangible assets, net | | | (8,042 | ) | | | (11,128 | ) |
| Tangible assets | | $ | 3,588,388 | | | $ | 3,431,488 | |
| | | | | | | | | |
| Tangible common equity ratio | | | 8.53 | % | | | 6.74 | % |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
| | | March 31, | | | December 31, | | | March 31, | |
| (Dollars in thousands) | | 2010 | | | 2009 | | | 2009 | |
| | | (Unaudited) | | | | | | (Unaudited) | |
| Assets | | | | | | | | | |
| Cash and due from banks | | $ | 39,405 | | | $ | 49,430 | | | $ | 46,380 | |
| Federal funds sold | | | 1,543 | | | | 1,863 | | | | 392 | |
| Interest-bearing deposits with banks | | | 148,059 | | | | 8,503 | | | | 126,286 | |
| Cash and cash equivalents | | | 189,007 | | | | 59,796 | | | | 173,058 | |
| Residential mortgage loans held for sale (at fair value) | | | 8,937 | | | | 12,498 | | | | 14,515 | |
| Investments available-for-sale (at fair value) | | | 832,259 | | | | 858,433 | | | | 472,161 | |
| Investments held-to-maturity — fair value of $124,265, $137,787 and $163,009 at March 31, 2010, December 31, 2009 and March 31, 2009, respectively | | | 119,376 | | | | 132,593 | | | | 156,877 | |
| Other equity securities | | | 34,331 | | | | 32,773 | | | | 32,131 | |
| Total loans and leases | | | 2,256,657 | | | | 2,298,010 | | | | 2,461,845 | |
| Less: allowance for loan and lease losses | | | (69,575 | ) | | | (64,559 | ) | | | (59,798 | ) |
| Net loans and leases | | | 2,187,082 | | | | 2,233,451 | | | | 2,402,047 | |
| Premises and equipment, net | | | 48,780 | | | | 49,606 | | | | 50,981 | |
| Other real estate owned | | | 6,796 | | | | 7,464 | | | | 5,093 | |
| Accrued interest receivable | | | 13,220 | | | | 13,653 | | | | 11,937 | |
| Goodwill | | | 76,816 | | | | 76,816 | | | | 76,816 | |
| Other intangible assets, net | | | 8,042 | | | | 8,537 | | | | 11,128 | |
| Other assets | | | 148,600 | | | | 144,858 | | | | 112,688 | |
| Total assets | | $ | 3,673,246 | | | $ | 3,630,478 | | | $ | 3,519,432 | |
| | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 560,027 | | | $ | 540,578 | | | $ | 545,540 | |
| Interest-bearing deposits | | | 2,093,421 | | | | 2,156,264 | | | | 2,008,372 | |
| Total deposits | | | 2,653,448 | | | | 2,696,842 | | | | 2,553,912 | |
| Securites sold under retail repurchase agreements and federal funds purchased | | | 78,416 | | | | 89,062 | | | | 91,928 | |
| Advances from FHLB | | | 411,341 | | | | 411,584 | | | | 412,312 | |
| Subordinated debentures | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Accrued interest payable and other liabilities | | | 23,184 | | | | 24,404 | | | | 33,758 | |
| Total liabilities | | | 3,201,389 | | | | 3,256,892 | | | | 3,126,910 | |
| | | | | | | | | | | | | |
| Stockholders' Equity | | | | | | | | | | | | |
| Preferred stock—par value $1.00 (liquidation preference of $1,000 per share) shares authorized, issued and outstanding 83,094, net of discount of $2,837, $2,999 and $3,493 at March 31, 2010, December 31, 2009 and March 31, 2009, respectively | | | 80,257 | | | | 80,095 | | | | 79,601 | |
| Common stock — par value $1.00; shares authorized 49,916,906; shares issues and outstanding 23,985,149, 16,487,852 and 16,414,523 at March 31, 2010, December 31, 2009 and March 31, 2009, respectively | | | 23,985 | | | | 16,488 | | | | 16,415 | |
| Warrants | | | 3,699 | | | | 3,699 | | | | 3,699 | |
| Additional paid in capital | | | 175,684 | | | | 87,334 | | | | 85,820 | |
| Retained earnings | | | 187,755 | | | | 188,622 | | | | 213,453 | |
| Accumulated other comprehensive income (loss) | | | 477 | | | | (2,652 | ) | | | (6,466 | ) |
| Total stockholders' equity | | | 471,857 | | | | 373,586 | | | | 392,522 | |
| Total liabilities and stockholders' equity | | $ | 3,673,246 | | | $ | 3,630,478 | | | $ | 3,519,432 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
| | | Three Months Ended | |
| | | March 31, | |
| (Dollars in thousands, except per share data) | | 2010 | | | 2009 | |
| Interest Income: | | | | | | |
| Interest and fees on loans and leases | | $ | 29,374 | | | $ | 33,233 | |
| Interest on loans held for sale | | | 81 | | | | 280 | |
| Interest on deposits with banks | | | 34 | | | | 46 | |
| Interest and dividends on securities: | | | | | | | | |
| Taxable | | | 6,006 | | | | 3,195 | |
| Exempt from federal income taxes | | | 1,864 | | | | 1,972 | |
| Interest on federal funds sold | | | 1 | | | | 2 | |
| Total interest income | | | 37,360 | | | | 38,728 | |
| Interest Expense: | | | | | | | | |
| Interest on deposits | | | 5,290 | | | | 9,454 | |
| Interest on retail repurchase agreements and federal funds purchased | | | 72 | | | | 62 | |
| Interest on advances from FHLB | | | 3,620 | | | | 3,631 | |
| Interest on subordinated debt | | | 219 | | | | 556 | |
| Total interest expense | | | 9,201 | | | | 13,703 | |
| Net interest income | | | 28,159 | | | | 25,025 | |
| Provision for loan and lease losses | | | 15,025 | | | | 10,613 | |
| Net interest income after provision for loan and lease losses | | | 13,134 | | | | 14,412 | |
| Non-interest Income: | | | | | | | | |
| Securities gains | | | 203 | | | | 162 | |
| Service charges on deposit accounts | | | 2,626 | | | | 2,863 | |
| Gains on sales of mortgage loans | | | 609 | | | | 1,022 | |
| Fees on sales of investment products | | | 741 | | | | 700 | |
| Trust and investment management fees | | | 2,449 | | | | 2,287 | |
| Insurance agency commissions | | | 1,989 | | | | 2,050 | |
| Income from bank owned life insurance | | | 693 | | | | 711 | |
| Visa check fees | | | 740 | | | | 638 | |
| Other income | | | 1,290 | | | | 1,541 | |
| Total non-interest income | | | 11,340 | | | | 11,974 | |
| Non-interest Expenses: | | | | | | | | |
| Salaries and employee benefits | | | 13,371 | | | | 13,204 | |
| Occupancy expense of premises | | | 3,090 | | | | 2,775 | |
| Equipment expenses | | | 1,214 | | | | 1,514 | |
| Marketing | | | 516 | | | | 420 | |
| Outside data services | | | 1,123 | | | | 806 | |
| FDIC insurance | | | 1,141 | | | | 959 | |
| Amortization of intangible assets | | | 496 | | | | 1,055 | |
| Other expenses | | | 4,355 | | | | 3,517 | |
| Total non-interest expenses | | | 25,306 | | | | 24,250 | |
| Income (loss) before income taxes | | | (832 | ) | | | 2,136 | |
| Income tax benefit | | | (1,333 | ) | | | (81 | ) |
| Net income | | $ | 501 | | | $ | 2,217 | |
| Preferred stock dividends and discount accretion | | | 1,200 | | | | 1,200 | |
| Net income (loss) available to common stockholders | | $ | (699 | ) | | $ | 1,017 | |
| | | | | | | | | |
| Net Income Per Share Amounts: | | | | | | | | |
| Basic net income per share | | $ | 0.03 | | | $ | 0.14 | |
| Basic net income (loss) per common share | | | (0.04 | ) | | | 0.06 | |
| Diluted net income per share | | $ | 0.03 | | | $ | 0.13 | |
| Diluted net income (loss) per common share | | | (0.04 | ) | | | 0.06 | |
| Dividends declared per common share | | $ | 0.01 | | | $ | 0.12 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
| | | 2010 | | | 2009 | |
(Dollars in thousands, except per share data) | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | $ | 38,368 | | | $ | 40,025 | | | $ | 40,516 | | | $ | 39,791 | | | $ | 39,737 | |
| Interest expense | | | 9,201 | | | | 10,816 | | | | 12,783 | | | | 14,220 | | | | 13,703 | |
| Tax-equivalent net interest income | | | 29,167 | | | | 29,209 | | | | 27,733 | | | | 25,571 | | | | 26,034 | |
| Tax-equivalent adjustment | | | 1,008 | | | | 1,376 | | | | 1,331 | | | | 1,123 | | | | 1,009 | |
| Provision for loan and lease losses | | | 15,025 | | | | 21,084 | | | | 34,450 | | | | 10,615 | | | | 10,613 | |
| Non-interest income | | | 11,340 | | | | 11,575 | | | | 10,662 | | | | 11,030 | | | | 11,974 | |
| Non-interest expenses | | | 25,306 | | | | 25,364 | | | | 26,567 | | | | 26,858 | | | | 24,250 | |
| Income (loss) before income taxes | | | (832 | ) | | | (7,040 | ) | | | (23,953 | ) | | | (1,995 | ) | | | 2,136 | |
| Income tax expense (benefit) | | | (1,333 | ) | | | (3,822 | ) | | | (10,379 | ) | | | (1,715 | ) | | | (81 | ) |
| Net Income (loss) | | | 501 | | | | (3,218 | ) | | | (13,574 | ) | | | (280 | ) | | | 2,217 | |
| Net Income (loss) available to common stockholders | | $ | (699 | ) | | $ | (4,421 | ) | | $ | (14,779 | ) | | $ | (1,482 | ) | | $ | 1,017 | |
| Financial ratios: | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | (0.08 | )% | | | (0.48 | )% | | | (1.62 | )% | | | (0.17 | )% | | | 0.12 | % |
| Return on average common equity | | (0.92 | )% | | | (4.66 | )% | | | (19.01 | )% | | | (1.90 | )% | | | 1.32 | % |
| Net interest margin | | | 3.56 | % | | | 3.40 | % | | | 3.27 | % | | | 3.11 | % | | | 3.39 | % |
Efficiency ratio - GAAP (1) | | | 64.07 | % | | | 64.36 | % | | | 71.68 | % | | | 75.70 | % | | | 65.54 | % |
Efficiency ratio - Non-GAAP (1) | | | 61.56 | % | | | 61.29 | % | | | 66.49 | % | | | 70.58 | % | | | 61.29 | % |
| Per share data: | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.03 | | | $ | (0.20 | ) | | $ | (0.83 | ) | | $ | (0.02 | ) | | $ | 0.14 | |
| Basic net income (loss) per common share | | | (0.04 | ) | | | (0.27 | ) | | | (0.90 | ) | | | (0.09 | ) | | | 0.06 | |
| Diluted net income (loss) per share | | | 0.03 | | | | (0.20 | ) | | | (0.83 | ) | | | (0.02 | ) | | | 0.13 | |
| Diluted net income (loss) per common share | | | (0.04 | ) | | | (0.27 | ) | | | (0.90 | ) | | | (0.09 | ) | | | 0.06 | |
| Dividends declared per common share | | | 0.01 | | | | 0.01 | | | | 0.12 | | | | 0.12 | | | | 0.12 | |
| Book value per common share | | | 16.33 | | | | 17.80 | | | | 18.25 | | | | 18.92 | | | | 19.06 | |
| Average fully diluted shares | | | 17,243,415 | | | | 16,477,925 | | | | 16,496,480 | | | | 16,444,252 | | | | 16,433,788 | |
| Non-interest income: | | | | | | | | | | | | | | | | | | | | |
| Securities gains | | $ | 203 | | | $ | 211 | | | $ | 15 | | | $ | 30 | | | $ | 162 | |
| Service charges on deposit accounts | | | 2,626 | | | | 2,896 | | | | 2,823 | | | | 2,851 | | | | 2,863 | |
| Gains on sales of mortgage loans | | | 609 | | | | 434 | | | | 1,011 | | | | 786 | | | | 1,022 | |
| Fees on sales of investment products | | | 741 | | | | 761 | | | | 740 | | | | 622 | | | | 700 | |
| Trust and investment management fees | | | 2,449 | | | | 2,358 | | | | 2,406 | | | | 2,370 | | | | 2,287 | |
| Insurance agency commissions | | | 1,989 | | | | 1,098 | | | | 1,048 | | | | 1,040 | | | | 2,050 | |
| Income from bank owned life insurance | | | 693 | | | | 730 | | | | 740 | | | | 725 | | | | 711 | |
| Visa check fees | | | 740 | | | | 776 | | | | 758 | | | | 748 | | | | 638 | |
| Other income | | | 1,290 | | | | 2,311 | | | | 1,121 | | | | 1,858 | | | | 1,541 | |
| Total non-interest income | | $ | 11,340 | | | $ | 11,575 | | | $ | 10,662 | | | $ | 11,030 | | | $ | 11,974 | |
| Non-interest expense: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 13,371 | | | $ | 13,141 | | | $ | 14,411 | | | $ | 13,704 | | | $ | 13,204 | |
| Occupancy expense of premises | | | 3,090 | | | | 2,702 | | | | 2,685 | | | | 2,548 | | | | 2,775 | |
| Equipment expenses | | | 1,214 | | | | 1,359 | | | | 1,444 | | | | 1,374 | | | | 1,514 | |
| Marketing | | | 516 | | | | 777 | | | | 484 | | | | 485 | | | | 420 | |
| Outside data services | | | 1,123 | | | | 967 | | | | 987 | | | | 961 | | | | 806 | |
| FDIC insurance | | | 1,141 | | | | 1,124 | | | | 1,219 | | | | 2,790 | | | | 959 | |
| Amortization of intangible assets | | | 496 | | | | 496 | | | | 1,048 | | | | 1,047 | | | | 1,055 | |
| Goodwill impairment loss | | | - | | | | - | | | | - | | | | - | | | | - | |
| Other expenses | | | 4,355 | | | | 4,798 | | | | 4,289 | | | | 3,949 | | | | 3,517 | |
| Total non-interest expense | | $ | 25,306 | | | $ | 25,364 | | | $ | 26,567 | | | $ | 26,858 | | | $ | 24,250 | |
| (1) | The GAAP efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional, non-GAAP efficiency ratio excludes intangible asset amortization and the goodwill impairment loss; excludes securities gains (losses) from non-interest 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)
| | | 2010 | | | 2009 | |
| (Dollars in thousands) | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Balance sheets at quarter end: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 460,129 | | | $ | 457,414 | | | $ | 455,312 | | | $ | 450,500 | | | $ | 461,359 | |
| Residential construction loans | | | 83,902 | | | | 92,283 | | | | 115,258 | | | | 138,923 | | | | 163,861 | |
| Commercial mortgage loans | | | 882,040 | | | | 894,951 | | | | 873,438 | | | | 862,315 | | | | 859,882 | |
| Commercial construction loans | | | 130,064 | | | | 131,789 | | | | 174,052 | | | | 199,278 | | | | 222,805 | |
| Commercial loans and leases | | | 302,995 | | | | 321,924 | | | | 314,599 | | | | 333,025 | | | | 342,870 | |
| Consumer loans | | | 397,527 | | | | 399,649 | | | | 401,623 | | | | 405,348 | | | | 411,068 | |
| Total loans and leases | | | 2,256,657 | | | | 2,298,010 | | | | 2,334,282 | | | | 2,389,389 | | | | 2,461,845 | |
| Less: allowance for loan and lease losses | | | (69,575 | ) | | | (64,559 | ) | | | (62,937 | ) | | | (58,317 | ) | | | (59,798 | ) |
| Net loans and leases | | | 2,187,082 | | | | 2,233,451 | | | | 2,271,345 | | | | 2,331,072 | | | | 2,402,047 | |
| Goodwill | | | 76,816 | | | | 76,816 | | | | 76,816 | | | | 76,816 | | | | 76,816 | |
| Other intangible assets, net | | | 8,042 | | | | 8,537 | | | | 9,033 | | | | 10,080 | | | | 11,128 | |
| Total assets | | | 3,673,246 | | | | 3,630,478 | | | | 3,632,391 | | | | 3,617,497 | | | | 3,519,432 | |
| Total deposits | | | 2,653,448 | | | | 2,696,842 | | | | 2,683,487 | | | | 2,650,845 | | | | 2,553,912 | |
| Customer repurchase agreements | | | 78,416 | | | | 74,062 | | | | 84,138 | | | | 98,827 | | | | 91,928 | |
| Total stockholders' equity | | | 471,857 | | | | 373,586 | | | | 380,571 | | | | 391,262 | | | | 392,522 | |
| Quarterly average balance sheets: | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 462,803 | | | $ | 464,737 | | | $ | 460,772 | | | $ | 477,955 | | | $ | 481,721 | |
| Residential construction loans | | | 89,732 | | | | 106,115 | | | | 123,892 | | | | 150,914 | | | | 176,811 | |
| Commercial mortgage loans | | | 891,722 | | | | 877,419 | | | | 871,831 | | | | 862,658 | | | | 854,402 | |
| Commercial construction loans | | | 131,265 | | | | 165,784 | | | | 191,021 | | | | 216,897 | | | | 224,229 | |
| Commercial loans and leases | | | 317,492 | | | | 312,547 | | | | 327,569 | | | | 341,039 | | | | 359,820 | |
| Consumer loans | | | 398,233 | | | | 401,164 | | | | 401,930 | | | | 408,200 | | | | 408,843 | |
| Total loans and leases | | | 2,291,247 | | | | 2,327,766 | | | | 2,377,015 | | | | 2,457,663 | | | | 2,505,826 | |
| Securities | | | 970,681 | | | | 1,026,179 | | | | 956,350 | | | | 772,878 | | | | 536,981 | |
| Total earning assets | | | 3,318,070 | | | | 3,409,867 | | | | 3,370,823 | | | | 3,298,923 | | | | 3,117,590 | |
| Total assets | | | 3,591,786 | | | | 3,672,382 | | | | 3,627,617 | | | | 3,549,185 | | | | 3,375,715 | |
| Total interest-bearing liabilities | | | 2,653,187 | | | | 2,709,152 | | | | 2,671,944 | | | | 2,595,303 | | | | 2,471,762 | |
| Noninterest-bearing demand deposits | | | 524,313 | | | | 549,347 | | | | 532,462 | | | | 527,713 | | | | 476,361 | |
| Total deposits | | | 2,640,853 | | | | 2,718,882 | | | | 2,661,108 | | | | 2,581,837 | | | | 2,431,471 | |
| Customer repurchase agreements | | | 81,622 | | | | 92,471 | | | | 95,310 | | | | 93,980 | | | | 69,212 | |
| Total stockholders' equity | | | 387,099 | | | | 380,534 | | | | 391,571 | | | | 393,201 | | | | 391,673 | |
| Capital and credit quality measures: | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 10.78 | % | | | 10.36 | % | | | 10.79 | % | | | 11.08 | % | | | 11.60 | % |
| Allowance for loan and lease losses to loans and leases | | | 3.08 | % | | | 2.81 | % | | | 2.70 | % | | | 2.44 | % | | | 2.43 | % |
| Non-performing loans to total loans | | | 6.05 | % | | | 5.82 | % | | | 6.14 | % | | | 5.84 | % | | | 4.90 | % |
| Non-performing assets to total assets | | | 3.90 | % | | | 3.89 | % | | | 4.14 | % | | | 4.05 | % | | | 3.57 | % |
Annualized net charge-offs (recoveries) to average loans and leases (1) | | 1.78 | % | | | 3.34 | % | | | 5.00 | % | | | 1.97 | % | | | 0.22 | % |
| Net charge-offs (recoveries) | | $ | 10,009 | | | $ | 19,462 | | | $ | 29,831 | | | $ | 12,095 | | | $ | 1,341 | |
| Non-performing assets: | | | | | | | | | | | | | | | | | | | | |
| Non-accrual loans and leases | | $ | 110,719 | | | $ | 111,180 | | | $ | 127,473 | | | $ | 123,117 | | | $ | 110,761 | |
| Loans and leases 90 days past due | | | 25,085 | | | | 19,001 | | | | 15,491 | | | | 16,004 | | | | 9,545 | |
| Restructured loans and leases | | | 682 | | | | 3,549 | | | | 395 | | | | 395 | | | | 395 | |
| Other real estate owned, net | | | 6,796 | | | | 7,464 | | | | 6,873 | | | | 6,829 | | | | 5,094 | |
| Total non-performing assets | | $ | 143,282 | | | $ | 141,194 | | | $ | 150,232 | | | $ | 146,345 | | | $ | 125,795 | |
(1) Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
| | | Three Months Ended March 31, | |
| | | | | | 2010 | | | | | | | | | 2009 | | | | |
| | | | | | | | | Annualized | | | | | | | | | Annualized | |
| | | Average | | | (1) | | | Average | | | Average | | | (1) | | | Average | |
(Dollars in thousands and tax-equivalent) | | Balances | | | Interest | | | Yield/Rate | | | Balances | | | Interest | | | Yield/Rate | |
| Assets | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans (3) | | $ | 462,803 | | | $ | 6,479 | | | | 5.60 | % | | $ | 481,721 | | | $ | 7,185 | | | | 5.97 | % |
| Residential construction loans | | | 89,732 | | | | 1,094 | | | | 4.94 | | | | 176,811 | | | | 2,372 | | | | 5.44 | |
| Commercial mortgage loans | | | 891,722 | | | | 13,232 | | | | 6.02 | | | | 854,402 | | | | 13,266 | | | | 6.30 | |
| Commercial construction loans | | | 131,265 | | | | 821 | | | | 2.54 | | | | 224,229 | | | | 1,821 | | | | 3.29 | |
| Commercial loans and leases | | | 317,492 | | | | 4,002 | | | | 5.10 | | | | 359,820 | | | | 4,845 | | | | 5.45 | |
| Consumer loans | | | 398,233 | | | | 3,827 | | | | 3.90 | | | | 408,843 | | | | 4,024 | | | | 3.99 | |
| Total loans and leases (2) | | | 2,291,247 | | | | 29,455 | | | | 5.20 | | | | 2,505,826 | | | | 33,513 | | | | 5.41 | |
| Taxable securities | | | 802,150 | | | | 6,221 | | | | 3.10 | | | | 369,009 | | | | 3,335 | | | | 3.61 | |
| Tax-exempt securities (4) | | | 168,531 | | | | 2,657 | | | | 6.82 | | | | 167,972 | | | | 2,841 | | | | 7.21 | |
| Interest-bearing deposits with banks | | | 54,416 | | | | 34 | | | | 0.26 | | | | 71,571 | | | | 46 | | | | 0.26 | |
| Federal funds sold | | | 1,726 | | | | 1 | | | | 0.14 | | | | 3,212 | | | | 2 | | | | 0.24 | |
| Total interest-earning assets | | | 3,318,070 | | | | 38,368 | | | | 4.69 | | | | 3,117,590 | | | | 39,737 | | | | 5.17 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (67,195 | ) | | | | | | | | | | | (53,416 | ) | | | | | | | | |
| Cash and due from banks | | | 45,036 | | | | | | | | | | | | 47,024 | | | | | | | | | |
| Premises and equipment, net | | | 49,344 | | | | | | | | | | | | 51,408 | | | | | | | | | |
| Other assets | | | 246,531 | | | | | | | | | | | | 213,109 | | | | | | | | | |
| Total assets | | $ | 3,591,786 | | | | | | | | | | | $ | 3,375,715 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 274,122 | | | | 84 | | | | 0.12 | % | | $ | 242,799 | | | | 121 | | | | 0.20 | % |
| Regular savings deposits | | | 157,997 | | | | 36 | | | | 0.09 | | | | 147,537 | | | | 55 | | | | 0.15 | |
| Money market savings deposits | | | 909,597 | | | | 1,573 | | | | 0.70 | | | | 713,295 | | | | 2,416 | | | | 1.37 | |
| Time deposits | | | 774,824 | | | | 3,597 | | | | 1.88 | | | | 851,479 | | | | 6,862 | | | | 3.27 | |
| Total interest-bearing deposits | | | 2,116,540 | | | | 5,290 | | | | 1.01 | | | | 1,955,110 | | | | 9,454 | | | | 1.96 | |
| Other borrowings | | | 90,179 | | | | 72 | | | | 0.33 | | | | 69,213 | | | | 62 | | | | 0.36 | |
| Advances from FHLB | | | 411,468 | | | | 3,620 | | | | 3.57 | | | | 412,439 | | | | 3,631 | | | | 3.57 | |
| Subordinated debentures | | | 35,000 | | | | 219 | | | | 2.50 | | | | 35,000 | | | | 556 | | | | 6.35 | |
| Total interest-bearing liabilities | | | 2,653,187 | | | | 9,201 | | | | 1.41 | | | | 2,471,762 | | | | 13,703 | | | | 2.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 524,313 | | | | | | | | | | | | 476,361 | | | | | | | | | |
| Other liabilities | | | 27,187 | | | | | | | | | | | | 35,917 | | | | | | | | | |
| Stockholders' equity | | | 387,099 | | | | | | | | | | | | 391,675 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,591,786 | | | | | | | | | | | $ | 3,375,715 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 29,167 | | | | 3.28 | % | | | | | | $ | 26,034 | | | | 2.92 | % |
| Less: tax-equivalent adjustment | | | | | | | 1,008 | | | | | | | | | | | | 1,009 | | | | | |
| Net interest income | | | | | | $ | 28,159 | | | | | | | | | | | $ | 25,025 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.69 | % | | | | | | | | | | | 5.17 | % |
| Interest expense/earning assets | | | | | | | | | | | 1.13 | | | | | | | | | | | | 1.78 | |
| Net interest margin | | | | | | | | | | | 3.56 | % | | | | | | | | | | | 3.39 | % |
| (1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2010 and 2009. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.0 million and $1.0 million in 2010 and 2009, respectively. |
| (2) | Non-accrual loans are included in the average balances. |
| (3) | Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans. |
| (4) | Includes only investments that are exempt from federal taxes. |
