FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS FOURTH QUARTER PROFIT AND FULL REDEMPTION OF TARP
OLNEY, MARYLAND, January 27, 2011 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income available to common stockholders for the fourth quarter of 2010 of $6.6 million ($0.27 per diluted share) compared to a net loss available to common stockholders of $4.4 million (($0.27) per diluted share) for the fourth quarter of 2009 and net income available to common stockholders of $6.4 million ($0.27 per diluted share) for the third quarter of 2010. The fourth quarter of 2010 included a provision for loan and lease losses of $2.3 million compared to $21.1 million for the fourth quarter of 2009 and $2.5 million for the third quarter of 2010.
Net income available to common stockholders for the year ended December 31, 2010 totaled $17.4 million ($0.78 per diluted share) compared to a net loss available to common stockholders of $19.7 million (($1.20) per diluted share) for the prior year. The results included a provision for loan and lease losses totaling $25.9 million for the year ended December 31, 2010 compared to a provision for loan and lease losses of $76.8 million for the year ended December 31, 2009.
“We are very pleased to report that we have redeemed the remainder of the preferred stock issued under TARP,” said Daniel J. Schrider, President and Chief Executive Officer. “We believe this validates our turnaround in performance, which is largely driven by the substantial improvement in credit quality. The provision for loan losses has continued to decline for the last several quarters due primarily to the efforts of our credit team to reduce the level of non-performing loans. However, we recognize the need to focus on the continuing resolution of problem credits. Our consistent expense control and improved net interest margin continue to be major drivers of our improved performance and return to profitability. We believe that our consistent emphasis on the fundamental elements of community banking will serve us well as the business climate slowly improves,” said Schrider.
“Looking forward to the future, we will be dealing with the uncertain effects of the recently passed health care law, financial reform and tax legislation, together with the added threat of volatile international markets and an extended economic recovery period. This has created an extremely challenging environment for both consumers and small businesses locally that has limited business expansion and the creation of new jobs. We do, however, remain optimistic that our strategies to originate quality loans across our markets will produce positive growth in the coming year,” said Schrider.
Fourth Quarter and Full Year Highlights:
| | · | In the fourth quarter, the Company redeemed the remainder of the original $83.0 million in preferred stock issued to the U.S. Treasury under the TARP Capital Purchase Program. The Company is currently negotiating with the Treasury to repurchase the related warrant. |
| | · | The provision for loan and lease losses totaled $2.3 million for the quarter compared to $21.1 million for the fourth quarter of 2009. For the year, the provision for loan and lease losses totaled $25.9 million compared to $76.8 million in 2009. |
| | · | Non-performing assets declined to $89.3 million compared to $141.2 million at December 31, 2009. This decrease also resulted in a coverage ratio of the allowance for loan and lease losses compared to non-performing loans of 78% at December 31, 2010 compared to a ratio of 48% at December 31, 2009. |
| | · | Loan charge-offs, net of recoveries, totaled $7.5 million for the fourth quarter of 2010 compared to $19.5 million for the fourth quarter of 2009. For the year, net charge-offs totaled $28.3 million compared to $62.7 million in 2009. |
| | · | The net interest margin was 3.61% for the fourth quarter of 2010 compared to 3.40% for the fourth quarter of 2009 and 3.64% for the third quarter of 2010. For the year, the net interest margin increased to 3.60% compared to 3.29% for 2009. |
| | · | Non-interest expenses increased 5% for the fourth quarter of 2010 compared to the fourth quarter of 2009. For the full year of 2010, noninterest expenses remained level compared to 2009. |
Review of Balance Sheet and Credit Quality
Comparing December 31, 2010 balances to December 31, 2009, total assets decreased 3% to $3.5 billion. Total loans and leases decreased 6% to $2.2 billion compared to the prior year. This decrease in loans was attributable to declines in all major categories of the loan portfolio due to a lack of loan demand resulting from the current state of the economy and due to charge-offs and pay-downs on non-performing loans. Total loans decreased 1% compared to the third quarter of 2010.
Customer funding sources, which include deposits and other short-term borrowings from core customers, decreased 5% compared to the prior year and 2% compared to the third quarter of 2010. The decrease compared to the prior year was due primarily to a decline of 20% in certificates of deposit. This planned decrease was due mainly to a reduction in rates as the Company managed its net interest margin. In addition, money market accounts declined 8% due mainly to clients’ redeployment of funds in the face of low rates and rising equity markets. These trends were somewhat offset by an increase of 8% in the combined balances of noninterest-bearing deposits, traditional savings and interest-bearing checking accounts as clients continued to emphasize safety and liquidity.
Stockholders’ equity totaled $407.6 million at December 31, 2010, and represented 11.6% of total assets, compared to 10.3% at December 31, 2009. At December 31, 2010 the Company had a total risk-based capital ratio of 15.37%, a tier 1 risk-based capital ratio of 14.11% and a tier 1 leverage ratio of 10.30%.
The provision for loan and lease losses totaled $2.3 million for the fourth quarter of 2010 compared to $21.1 million for the fourth quarter of 2009 and $2.5 million for the third quarter of 2010. The decrease compared to both the prior year quarter and the third quarter of 2010 was due to a lower level of non-performing loans. The decrease in the provision was the direct result of early identification of problem credits, provision of related loan loss reserves and the aggressive work out or charge-off of these problem credits.
Loan charge-offs, net of recoveries, totaled $7.5 million for the fourth quarter of 2010 compared to net charge-offs of $19.5 million for the fourth quarter of 2009 and net charge-offs of $6.5 million for the third quarter of 2010. The allowance for loan and lease losses represented 2.88% of outstanding loans and leases and 78% of non-performing loans at December 31, 2010 compared to 2.81% of outstanding loans and leases and 48% of non-performing loans at December 31, 2009 and 3.08% of outstanding loans and leases and 72% of non-performing loans at September 30, 2010. Non-performing loans includes accruing loans 90 days or more past due.
Non-performing assets totaled $89.3 million at December 31, 2010 compared to $141.2 million at December 31, 2009 and $103.6 million at September 30, 2010. The decrease compared to the prior year was due primarily to a decrease in non-accrual loans, particularly in the commercial real estate mortgage and construction portfolios as a result of charge-offs and pay-downs on existing problem credits and a significant reduction in the migration of new credits to non-performing status.
Income Statement Review
Comparing the fourth quarter of 2010 and 2009, net interest income increased by $1.1 million, or 4%. This increase was due primarily to the decline in rates paid on deposits. This resulted in a higher net interest margin for the fourth quarter of 2010 of 3.61% compared to 3.40% for fourth quarter of 2009.
Non-interest income increased $0.5 million or 4% to $12.0 million for the fourth quarter of 2010 compared to $11.5 million for the fourth quarter of 2009. Gains on sales of investment securities increased $0.3 million. Gains on sales of mortgage loans increased $0.3 million or 63% due largely to higher refinancing volumes. Fees on sales of investment products increased $0.2 million or 28% due to higher assets under management and higher sales of financial products, while trust and investment management fees increased $0.4 million or 19% due primarily to an increase in assets under management. Insurance agency commissions increased $0.2 million or 21% due to higher commissions on physician’s liability insurance. Visa check fees increased $0.1 million or 14% due to increased volume of electronic transactions. These gains were somewhat offset by a decrease of $0.6 million or 19% in service charges on deposits due to lower overdraft fees. Other noninterest income also decreased $0.4 million or 17% due mainly to lower mark to market adjustments on commercial loan swaps.
Non-interest expenses were $26.5 million in the fourth quarter of 2010 compared to $25.3 million in the fourth quarter of 2009, an increase of $1.2 million or 5%. Salaries and benefits expense increased $0.9 million or 7% due primarily to higher salary expenses. Other noninterest expenses increased $0.4 million or 9% due largely to losses on sales of other real estate owned and loan work out expenses.
Comparing the year ended December 31, 2010 and 2009, net interest income increased by $11.9 million, or 11%. This increase was due primarily to the decline in rates paid on deposits, which more than offset the decrease in the yield on interest-earning assets. The net interest margin for 2010 increased to 3.60% compared to a net interest margin of 3.29% for the prior year.
Non-interest income increased $0.7 million or 2% to $46.0 million for the year ended December 31, 2010 as compared to $45.3 million in 2009. This increase was due primarily to fees on sales of investment products, which increased $0.6 million or 22% resulting from growth in sales of financial products. In addition, trust and investment management fees increased $0.9 million or 9% due to growth in assets under management, while Visa check fees increased $0.4 million or 14% due to an increased volume of electronic transactions. Other noninterest income also increased $0.2 million or 3% due primarily to higher mark to market adjustments on commercial loan swaps. These increases were somewhat offset by a decline of $1.1 million or 10% in service charges on deposits due to lower commercial account analysis fees and return check charges.
Non-interest expenses remained level at $103.1 million for the year ended December 31, 2010 compared to 2009. Salary and benefits expenses increased $1.0 million or 2% due to increased salary expenses. Marketing expenses increased $0.2 million or 9% while outside data services increased $0.3 million or 7%. Other noninterest expenses increased $2.0 million or 12% due primarily to losses on sales of other real estate owned, loan workout fees and accrued expenses on loans sold with recourse. These increases were largely offset by a decrease of $1.6 million or 26% in FDIC insurance expense due mainly to a $1.7 million one time special assessment by the FDIC in the second quarter of 2009 and a decrease in intangibles amortization of $1.7 million or 46% due to intangibles from branch acquisitions that had fully amortized during the third quarter of 2009.
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 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) February 27, 2011. A telephone voice replay will also be available during that same time period at 800-642-1687. Please use pass code #3614119 to access.
About Sandy Spring Bancorp/Sandy Spring Bank
With $3.5 billion in assets, Sandy Spring Bancorp is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation 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 | | | | | | Twelve Months Ended | | | | |
| | | December 31, | | | % | | | December 31, | | | % | |
(Dollars in thousands, except per share data) | | 2010 | | | 2009 | | | Change | | | 2010 | | | 2009 | | | Change | |
| Results of Operations: | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 28,953 | | | $ | 27,833 | | | | 4 | % | | $ | 115,607 | | | $ | 103,708 | | | | 11 | % |
| Provision for loan and lease losses | | | 2,323 | | | | 21,084 | | | | (89 | ) | | | 25,908 | | | | 76,762 | | | | (66 | ) |
| Non-interest income | | | 12,046 | | | | 11,534 | | | | 4 | | | | 45,993 | | | | 45,287 | | | | 2 | |
| Non-interest expenses | | | 26,525 | | | | 25,323 | | | | 5 | | | | 103,123 | | | | 103,085 | | | | - | |
| Income (loss) before income taxes | | | 12,151 | | | | (7,040 | ) | | | - | | | | 32,569 | | | | (30,852 | ) | | | - | |
| Net income (loss) | | | 8,276 | | | | (3,218 | ) | | | - | | | | 23,520 | | | | (14,855 | ) | | | - | |
| Net income (loss) available to common stockholders | | $ | 6,604 | | | $ | (4,421 | ) | | | - | | | $ | 17,371 | | | $ | (19,665 | ) | | | (188 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (1) | | | 0.73 | % | | | (0.48 | )% | | | | | | | 0.48 | % | | | (0.55 | )% | | | | |
| Return on average common equity (1) | | | 6.34 | % | | | (4.66 | )% | | | | | | | 4.56 | % | | | (6.35 | )% | | | | |
| Net interest margin | | | 3.61 | % | | | 3.40 | % | | | | | | | 3.60 | % | | | 3.29 | % | | | | |
| Efficiency ratio - GAAP (3) | | | 64.70 | % | | | 64.33 | % | | | | | | | 63.81 | % | | | 69.19 | % | | | | |
| Efficiency ratio - Non-GAAP (3) | | | 62.15 | % | | | 61.25 | % | | | | | | | 60.89 | % | | | 64.82 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) | | $ | 0.34 | | | $ | (0.20 | ) | | | - | % | | $ | 1.05 | | | $ | (0.90 | ) | | | - | % |
| Basic net income (loss) per common share | | | 0.27 | | | | (0.27 | ) | | | (200 | ) | | | 0.78 | | | | (1.20 | ) | | | (165 | ) |
| Diluted net income (loss) | | | 0.34 | | | | (0.20 | ) | | | - | | | | 1.05 | | | | (0.90 | ) | | | - | |
| Diluted net income (loss) per common share | | | 0.27 | | | | (0.27 | ) | | | (200 | ) | | | 0.78 | | | | (1.20 | ) | | | (165 | ) |
| Dividends declared per common share | | | 0.01 | | | | 0.01 | | | | - | | | | 0.04 | | | | 0.37 | | | | (89 | ) |
| Book value per common share | | | 16.95 | | | | 17.80 | | | | (5 | ) | | | 16.95 | | | | 17.80 | | | | (5 | ) |
| Average fully diluted shares | | | 24,087,482 | | | | 16,477,925 | | | | 46 | | | | 22,380,135 | | | | 16,448,580 | | | | 36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Condition at period-end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 3,519,388 | | | $ | 3,630,478 | | | | (3 | )% | | $ | 3,519,388 | | | $ | 3,630,478 | | | | (3 | )% |
| Total loans and leases | | | 2,156,232 | | | | 2,298,010 | | | | (6 | ) | | | 2,156,232 | | | | 2,298,010 | | | | (6 | ) |
| Investment securities | | | 1,042,943 | | | | 1,023,799 | | | | 2 | | | | 1,042,943 | | | | 1,023,799 | | | | 2 | |
| Deposits | | | 2,549,872 | | | | 2,696,842 | | | | (5 | ) | | | 2,549,872 | | | | 2,696,842 | | | | (5 | ) |
| Stockholders' equity | | | 407,569 | | | | 373,586 | | | | 9 | | | | 407,569 | | | | 373,586 | | | | 9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage | | | 10.30 | % | | | 9.09 | % | | | | | | | 10.30 | % | | | 9.09 | % | | | | |
| Tier 1 capital to risk-weighted assets | | | 14.11 | % | | | 12.01 | % | | | | | | | 14.11 | % | | | 12.01 | % | | | | |
| Total regulatory capital to risk-weighted assets | | | 15.37 | % | | | 13.27 | % | | | | | | | 15.37 | % | | | 13.27 | % | | | | |
| Tangible common equity to tangible assets (4) | | | 9.51 | % | | | 5.95 | % | | | | | | | 9.51 | % | | | 5.95 | % | | | | |
| Average equity to average assets | | | 12.41 | % | | | 10.36 | % | | | | | | | 12.21 | % | | | 10.94 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Credit quality ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses to total loans and leases | | | 2.88 | % | | | 2.81 | % | | | | | | | 2.88 | % | | | 2.81 | % | | | | |
| Nonperforming loans to total loans and leases | | | 3.69 | % | | | 5.82 | % | | | | | | | 3.69 | % | | | 5.82 | % | | | | |
| Nonperforming assets to total assets | | | 2.54 | % | | | 3.89 | % | | | | | | | 2.54 | % | | | 3.89 | % | | | | |
| Annualized net charge-offs to average | | | | | | | | | | | | | | | | | | | | | | | | |
| loans and leases (2) | | | 1.37 | % | | | 3.34 | % | | | | | | | 1.27 | % | | | 2.61 | % | | | | |
| (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 from non-interest expense; securities gains (losses) from non-interest income; OTTI; 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 | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| (Dollars in thousands) | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| GAAP efficiency ratio: | | | | | | | | | | | | |
| Non-interest expenses | | $ | 26,525 | | | $ | 25,323 | | | $ | 103,123 | | | $ | 103,085 | |
| Net interest income plus non-interest income | | $ | 40,999 | | | $ | 39,367 | | | $ | 161,600 | | | $ | 148,995 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio–GAAP | | | 64.70 | % | | | 64.33 | % | | | 63.81 | % | | | 69.19 | % |
| | | | | | | | | | | | | | | | | |
| Non-GAAP efficiency ratio: | | | | | | | | | | | | | | | | |
| Non-interest expenses | | $ | 26,525 | | | $ | 25,323 | | | $ | 103,123 | | | $ | 103,085 | |
| Less non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 472 | | | | 496 | | | | 1,959 | | | | 3,646 | |
| Non-interest expenses as adjusted | | $ | 26,053 | | | $ | 24,827 | | | $ | 101,164 | | | $ | 99,439 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus non-interest income | | $ | 40,999 | | | $ | 39,367 | | | $ | 161,600 | | | $ | 148,995 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Tax-equivalent income | | | 1,352 | | | | 1,376 | | | | 4,836 | | | | 4,839 | |
| Less non-GAAP adjustments: | | | | | | | | | | | | | | | | |
| Securities gains | | | 473 | | | | 211 | | | | 796 | | | | 418 | |
| OTTI recognized in earnings | | | (43 | ) | | | - | | | | (512 | ) | | | - | |
| Net interest income plus non-interest income - as adjusted | | $ | 41,921 | | | $ | 40,532 | | | $ | 166,152 | | | $ | 153,416 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio–Non-GAAP | | | 62.15 | % | | | 61.25 | % | | | 60.89 | % | | | 64.82 | % |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio: | | | | | | | | | | | | | | | | |
| Total stockholders' equity | | $ | 407,569 | | | $ | 373,586 | | | $ | 407,569 | | | $ | 373,586 | |
| Accumulated other comprehensive income (loss) | | | 2,620 | | | | 2,652 | | | | 2,620 | | | | 2,652 | |
| Goodwill | | | (76,816 | ) | | | (76,816 | ) | | | (76,816 | ) | | | (76,816 | ) |
| Other intangible assets, net | | | (6,579 | ) | | | (8,537 | ) | | | (6,579 | ) | | | (8,537 | ) |
| Preferred stock | | | - | | | | (80,095 | ) | | | - | | | | (80,095 | ) |
| Tangible common equity | | $ | 326,794 | | | $ | 210,790 | | | $ | 326,794 | | | $ | 210,790 | |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | 3,519,388 | | | $ | 3,630,478 | | | $ | 3,519,388 | | | $ | 3,630,478 | |
| Goodwill | | | (76,816 | ) | | | (76,816 | ) | | | (76,816 | ) | | | (76,816 | ) |
| Other intangible assets, net | | | (6,579 | ) | | | (8,537 | ) | | | (6,579 | ) | | | (8,537 | ) |
| Tangible assets | | $ | 3,435,993 | | | $ | 3,545,125 | | | $ | 3,435,993 | | | $ | 3,545,125 | |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio | | | 9.51 | % | | | 5.95 | % | | | 9.51 | % | | | 5.95 | % |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
| | | December 31, | |
| (Dollars in thousands) | | 2010 | | | 2009 | |
| Assets | | | | | | |
| Cash and due from banks | | $ | 44,696 | | | $ | 49,430 | |
| Federal funds sold | | | 1,813 | | | | 1,863 | |
| Interest-bearing deposits with banks | | | 16,608 | | | | 8,503 | |
| Cash and cash equivalents | | | 63,117 | | | | 59,796 | |
| Residential mortgage loans held for sale (at fair value) | | | 22,717 | | | | 12,498 | |
| Investments available-for-sale (at fair value) | | | 907,283 | | | | 858,433 | |
| Investments held-to-maturity — fair value of $104,124 and $137,787 at December 31, 2010 and 2009, respectively | | | 101,590 | | | | 132,593 | |
| Other equity securities | | | 34,070 | | | | 32,773 | |
| Total loans and leases | | | 2,156,232 | | | | 2,298,010 | |
| Less: allowance for loan and lease losses | | | (62,135 | ) | | | (64,559 | ) |
| Net loans and leases | | | 2,094,097 | | | | 2,233,451 | |
| Premises and equipment, net | | | 49,004 | | | | 49,606 | |
| Other real estate owned | | | 9,493 | | | | 7,464 | |
| Accrued interest receivable | | | 12,570 | | | | 13,653 | |
| Goodwill | | | 76,816 | | | | 76,816 | |
| Other intangible assets, net | | | 6,579 | | | | 8,537 | |
| Other assets | | | 142,052 | | | | 144,858 | |
| Total assets | | $ | 3,519,388 | | | $ | 3,630,478 | |
| | | | | | | | | |
| Liabilities | | | | | | | | |
| Noninterest-bearing deposits | | $ | 566,812 | | | $ | 540,578 | |
| Interest-bearing deposits | | | 1,983,060 | | | | 2,156,264 | |
| Total deposits | | | 2,549,872 | | | | 2,696,842 | |
| Securites sold under retail repurchase agreements and federal funds purchased | | | 96,243 | | | | 89,062 | |
| Advances from FHLB | | | 405,758 | | | | 411,584 | |
| Subordinated debentures | | | 35,000 | | | | 35,000 | |
| Accrued interest payable and other liabilities | | | 24,946 | | | | 24,404 | |
| Total liabilities | | | 3,111,819 | | | | 3,256,892 | |
| | | | | | | | | |
| Stockholders' Equity | | | | | | | | |
| Preferred stock—par value $1.00 (liquidation preference of $1,000 per share) shares authorized 83,094, shares issued and outstanding at December 31, 2009; 83,094, net of discount of $2,999 at December 31, 2009 | | | - | | | | 80,095 | |
| Common stock — par value $1.00; shares authorized 49,916,906; shares issued and outstanding 24,046,627 and 16,487,852 at December 31, 2010 and 2009, respectively | | | 24,047 | | | | 16,488 | |
| Warrants | | | 3,699 | | | | 3,699 | |
| Additional paid in capital | | | 177,344 | | | | 87,334 | |
| Retained earnings | | | 205,099 | | | | 188,622 | |
| Accumulated other comprehensive loss | | | (2,620 | ) | | | (2,652 | ) |
| Total stockholders' equity | | | 407,569 | | | | 373,586 | |
| Total liabilities and stockholders' equity | | $ | 3,519,388 | | | $ | 3,630,478 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS) (Unaudited)
| | | Three Months Ended | | | Twelve Months Ended | |
| | | December 31, | | | December 31, | |
| (Dollars in thousands, except per share data) | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| Interest Income: | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 28,047 | | | $ | 30,320 | | | $ | 115,789 | | | $ | 126,899 | |
| Interest on loans held for sale | | | 213 | | | | 113 | | | | 534 | | | | 767 | |
| Interest on deposits with banks | | | 19 | | | | 37 | | | | 177 | | | | 149 | |
| Interest and dividends on securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 5,984 | | | | 6,272 | | | | 24,624 | | | | 19,945 | |
| Exempt from federal income taxes | | | 1,850 | | | | 1,907 | | | | 7,222 | | | | 7,467 | |
| Interest on federal funds sold | | | 1 | | | | - | | | | 3 | | | | 3 | |
| Total interest income | | | 36,114 | | | | 38,649 | | | | 148,349 | | | | 155,230 | |
| Interest Expense: | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 3,193 | | | | 6,803 | | | | 16,934 | | | | 34,921 | |
| Interest on retail repurchase agreements and federal funds purchased | | | 71 | | | | 83 | | | | 269 | | | | 308 | |
| Interest on advances from FHLB | | | 3,650 | | | | 3,703 | | | | 14,599 | | | | 14,708 | |
| Interest on subordinated debt | | | 247 | | | | 227 | | | | 940 | | | | 1,585 | |
| Total interest expense | | | 7,161 | | | | 10,816 | | | | 32,742 | | | | 51,522 | |
| Net interest income | | | 28,953 | | | | 27,833 | | | | 115,607 | | | | 103,708 | |
| Provision for loan and lease losses | | | 2,323 | | | | 21,084 | | | | 25,908 | | | | 76,762 | |
| Net interest income after provision for loan and lease losses | | | 26,630 | | | | 6,749 | | | | 89,699 | | | | 26,946 | |
| Non-interest Income: | | | | | | | | | | | | | | | | |
| Investment securities gains | | | 473 | | | | 211 | | | | 796 | | | | 418 | |
| Total other-than-temporary impairment ("OTTI") losses | | | (337 | ) | | | - | | | | (1,505 | ) | | | - | |
| Portion of OTTI losses recognized in other comprehensive income, before taxes | | | 294 | | | | - | | | | 993 | | | | - | |
| Net OTTI recognized in earnings | | | (43 | ) | | | - | | | | (512 | ) | | | - | |
| Service charges on deposit accounts | | | 2,342 | | | | 2,896 | | | | 10,326 | | | | 11,433 | |
| Gains on sales of mortgage loans | | | 707 | | | | 434 | | | | 3,251 | | | | 3,253 | |
| Fees on sales of investment products | | | 974 | | | | 761 | | | | 3,438 | | | | 2,823 | |
| Trust and investment management fees | | | 2,799 | | | | 2,358 | | | | 10,287 | | | | 9,421 | |
| Insurance agency commissions | | | 1,334 | | | | 1,098 | | | | 5,229 | | | | 5,236 | |
| Income from bank owned life insurance | | | 695 | | | | 730 | | | | 2,800 | | | | 2,906 | |
| Visa check fees | | | 887 | | | | 776 | | | | 3,325 | | | | 2,920 | |
| Other income | | | 1,878 | | | | 2,270 | | | | 7,053 | | | | 6,877 | |
| Total non-interest income | | | 12,046 | | | | 11,534 | | | | 45,993 | | | | 45,287 | |
| Non-interest Expenses: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 14,077 | | | | 13,141 | | | | 55,470 | | | | 54,460 | |
| Occupancy expense of premises | | | 2,852 | | | | 2,702 | | | | 11,477 | | | | 10,710 | |
| Equipment expenses | | | 1,153 | | | | 1,359 | | | | 4,808 | | | | 5,691 | |
| Marketing | | | 681 | | | | 777 | | | | 2,359 | | | | 2,166 | |
| Outside data services | | | 985 | | | | 967 | | | | 3,992 | | | | 3,721 | |
| FDIC insurance | | | 1,114 | | | | 1,124 | | | | 4,497 | | | | 6,092 | |
| Amortization of intangible assets | | | 472 | | | | 496 | | | | 1,959 | | | | 3,646 | |
| Other expenses | | | 5,191 | | | | 4,757 | | | | 18,561 | | | | 16,599 | |
| Total non-interest expenses | | | 26,525 | | | | 25,323 | | | | 103,123 | | | | 103,085 | |
| Income (loss) before income taxes | | | 12,151 | | | | (7,040 | ) | | | 32,569 | | | | (30,852 | ) |
| Income tax expense (benefit) | | | 3,875 | | | | (3,822 | ) | | | 9,049 | | | | (15,997 | ) |
| Net income (loss) | | $ | 8,276 | | | $ | (3,218 | ) | | $ | 23,520 | | | $ | (14,855 | ) |
| Preferred stock dividends and discount accretion | | | 1,672 | | | | 1,203 | | | | 6,149 | | | | 4,810 | |
| Net income (loss) available to common stockholders | | $ | 6,604 | | | $ | (4,421 | ) | | $ | 17,371 | | | $ | (19,665 | ) |
| | | | | | | | | | | | | | | | | |
| Net Income Per Share Amounts: | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.34 | | | $ | (0.20 | ) | | $ | 1.05 | | | $ | (0.90 | ) |
| Basic net income (loss) per common share | | | 0.27 | | | | (0.27 | ) | | | 0.78 | | | | (1.20 | ) |
| Diluted net income (loss) per share | | $ | 0.34 | | | $ | (0.20 | ) | | $ | 1.05 | | | $ | (0.90 | ) |
| Diluted net income (loss) per common share | | | 0.27 | | | | (0.27 | ) | | | 0.78 | | | | (1.20 | ) |
| Dividends declared per common share | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.04 | | | $ | 0.37 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
| | | 2010 | | | 2009 | |
(Dollars in thousands, except per share data) | | Q4 | | | Q3 | | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | $ | 37,466 | | | $ | 38,688 | | | $ | 38,663 | | | $ | 38,368 | | | $ | 40,025 | | | $ | 40,516 | | | $ | 39,791 | | | $ | 39,737 | |
| Interest expense | | | 7,161 | | | | 7,868 | | | | 8,512 | | | | 9,201 | | | | 10,816 | | | | 12,783 | | | | 14,220 | | | | 13,703 | |
| Tax-equivalent net interest income | | | 30,305 | | | | 30,820 | | | | 30,151 | | | | 29,167 | | | | 29,209 | | | | 27,733 | | | | 25,571 | | | | 26,034 | |
| Tax-equivalent adjustment | | | 1,352 | | | | 1,321 | | | | 1,155 | | | | 1,008 | | | | 1,376 | | | | 1,331 | | | | 1,123 | | | | 1,009 | |
| Provision for loan and lease losses | | | 2,323 | | | | 2,453 | | | | 6,107 | | | | 15,025 | | | | 21,084 | | | | 34,450 | | | | 10,615 | | | | 10,613 | |
| Non-interest income | | | 12,046 | | | | 10,738 | | | | 11,869 | | | | 11,340 | | | | 11,534 | | | | 10,770 | | | | 11,009 | | | | 11,974 | |
| Non-interest expenses | | | 26,525 | | | | 25,339 | | | | 25,953 | | | | 25,306 | | | | 25,323 | | | | 26,675 | | | | 26,837 | | | | 24,250 | |
| Income (loss) before income taxes | | | 12,151 | | | | 12,445 | | | | 8,805 | | | | (832 | ) | | | (7,040 | ) | | | (23,953 | ) | | | (1,995 | ) | | | 2,136 | |
| Income tax expense (benefit) | | | 3,875 | | | | 3,961 | | | | 2,546 | | | | (1,333 | ) | | | (3,822 | ) | | | (10,379 | ) | | | (1,715 | ) | | | (81 | ) |
| Net Income (loss) | | | 8,276 | | | | 8,484 | | | | 6,259 | | | | 501 | | | | (3,218 | ) | | | (13,574 | ) | | | (280 | ) | | | 2,217 | |
| Net Income (loss) available to common stockholders | | $ | 6,604 | | | $ | 6,410 | | | $ | 5,056 | | | $ | (699 | ) | | $ | (4,421 | ) | | $ | (14,779 | ) | | $ | (1,482 | ) | | $ | 1,017 | |
| Financial ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.73 | % | | | 0.70 | % | | | 0.56 | % | | | (0.08 | )% | | | (0.48 | )% | | | (1.62 | )% | | | (0.17 | )% | | | 0.12 | % |
| Return on average common equity | | | 6.34 | % | | | 6.26 | % | | | 5.13 | % | | | (0.92 | )% | | | (4.66 | )% | | | (19.01 | )% | | | (1.90 | )% | | | 1.32 | % |
| Net interest margin | | | 3.61 | % | | | 3.64 | % | | | 3.58 | % | | | 3.56 | % | | | 3.40 | % | | | 3.27 | % | | | 3.11 | % | | | 3.39 | % |
| Efficiency ratio - GAAP (1) | | | 64.70 | % | | | 62.98 | % | | | 63.51 | % | | | 64.07 | % | | | 64.36 | % | | | 71.68 | % | | | 75.70 | % | | | 65.54 | % |
| Efficiency ratio - Non-GAAP (1) | | | 62.15 | % | | | 59.27 | % | | | 60.59 | % | | | 61.56 | % | | | 61.29 | % | | | 66.49 | % | | | 70.58 | % | | | 61.29 | % |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | 0.34 | | | $ | 0.35 | | | $ | 0.26 | | | $ | 0.03 | | | $ | (0.20 | ) | | $ | (0.83 | ) | | $ | (0.02 | ) | | $ | 0.14 | |
| Basic net income (loss) per common share | | | 0.27 | | | | 0.27 | | | | 0.21 | | | | (0.04 | ) | | | (0.27 | ) | | | (0.90 | ) | | | (0.09 | ) | | | 0.06 | |
| Diluted net income (loss) per share | | | 0.34 | | | | 0.35 | | | | 0.26 | | | | 0.03 | | | | (0.20 | ) | | | (0.83 | ) | | | (0.02 | ) | | | 0.13 | |
| Diluted net income (loss) per common share | | | 0.27 | | | | 0.27 | | | | 0.21 | | | | (0.04 | ) | | | (0.27 | ) | | | (0.90 | ) | | | (0.09 | ) | | | 0.06 | |
| Dividends declared per common share | | | 0.01 | | | | 0.01 | | | | 0.01 | | | | 0.01 | | | | 0.01 | | | | 0.12 | | | | 0.12 | | | | 0.12 | |
| Book value per common share | | | 16.95 | | | | 17.14 | | | | 16.80 | | | | 16.33 | | | | 17.80 | | | | 18.25 | | | | 18.92 | | | | 19.06 | |
| Average fully diluted shares | | | 24,087,482 | | | | 24,102,497 | | | | 24,033,158 | | | | 17,243,415 | | | | 16,477,925 | | | | 16,496,480 | | | | 16,444,252 | | | | 16,433,788 | |
| Non-interest income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities gains | | $ | 473 | | | $ | 25 | | | $ | 95 | | | $ | 203 | | | $ | 211 | | | $ | 15 | | | $ | 30 | | | $ | 162 | |
| Net OTTI recognized in earnings | | | (43 | ) | | | (380 | ) | | | (89 | ) | | | - | | | | - | | | | - | | | | - | | | | - | |
| Service charges on deposit accounts | | | 2,342 | | | | 2,567 | | | | 2,791 | | | | 2,626 | | | | 2,896 | | | | 2,823 | | | | 2,851 | | | | 2,863 | |
| Gains on sales of mortgage loans | | | 707 | | | | 915 | | | | 1,020 | | | | 609 | | | | 434 | | | | 1,011 | | | | 786 | | | | 1,022 | |
| Fees on sales of investment products | | | 974 | | | | 782 | | | | 941 | | | | 741 | | | | 761 | | | | 740 | | | | 622 | | | | 700 | |
| Trust and investment management fees | | | 2,799 | | | | 2,505 | | | | 2,534 | | | | 2,449 | | | | 2,358 | | | | 2,406 | | | | 2,370 | | | | 2,287 | |
| Insurance agency commissions | | | 1,334 | | | �� | 978 | | | | 928 | | | | 1,989 | | | | 1,098 | | | | 1,048 | | | | 1,040 | | | | 2,050 | |
| Income from bank owned life insurance | | | 695 | | | | 709 | | | | 703 | | | | 693 | | | | 730 | | | | 740 | | | | 725 | | | | 711 | |
| Visa check fees | | | 887 | | | | 843 | | | | 855 | | | | 740 | | | | 776 | | | | 758 | | | | 748 | | | | 638 | |
| Other income | | | 1,878 | | | | 1,794 | | | | 2,091 | | | | 1,290 | | | | 2,270 | | | | 1,229 | | | | 1,837 | | | | 1,541 | |
| Total non-interest income | | $ | 12,046 | | | $ | 10,738 | | | $ | 11,869 | | | $ | 11,340 | | | $ | 11,534 | | | $ | 10,770 | | | $ | 11,009 | | | $ | 11,974 | |
| Non-interest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 14,077 | | | $ | 13,841 | | | $ | 14,181 | | | $ | 13,371 | | | $ | 13,141 | | | $ | 14,411 | | | $ | 13,704 | | | $ | 13,204 | |
| Occupancy expense of premises | | | 2,852 | | | | 2,826 | | | | 2,709 | | | | 3,090 | | | | 2,702 | | | | 2,685 | | | | 2,548 | | | | 2,775 | |
| Equipment expenses | | | 1,153 | | | | 1,137 | | | | 1,304 | | | | 1,214 | | | | 1,359 | | | | 1,444 | | | | 1,374 | | | | 1,514 | |
| Marketing | | | 681 | | | | 589 | | | | 573 | | | | 516 | | | | 777 | | | | 484 | | | | 485 | | | | 420 | |
| Outside data services | | | 985 | | | | 966 | | | | 918 | | | | 1,123 | | | | 967 | | | | 987 | | | | 961 | | | | 806 | |
| FDIC insurance | | | 1,114 | | | | 1,056 | | | | 1,186 | | | | 1,141 | | | | 1,124 | | | | 1,219 | | | | 2,790 | | | | 959 | |
| Amortization of intangible assets | | | 472 | | | | 495 | | | | 496 | | | | 496 | | | | 496 | | | | 1,048 | | | | 1,047 | | | | 1,055 | |
| Other expenses | | | 5,191 | | | | 4,429 | | | | 4,586 | | | | 4,355 | | | | 4,757 | | | | 4,397 | | | | 3,928 | | | | 3,517 | |
| Total non-interest expense | | $ | 26,525 | | | $ | 25,339 | | | $ | 25,953 | | | $ | 25,306 | | | $ | 25,323 | | | $ | 26,675 | | | $ | 26,837 | | | $ | 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; OTTI losses from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
| | | 2010 | | | 2009 | |
(Dollars in thousands) | | Q4 | | | Q3 | | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Balance sheets at quarter end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 436,534 | | | $ | 442,723 | | | $ | 458,502 | | | $ | 460,129 | | | $ | 457,414 | | | $ | 455,312 | | | $ | 450,500 | | | $ | 461,359 | |
| Residential construction loans | | | 91,273 | | | | 92,485 | | | | 86,393 | | | | 83,902 | | | | 92,283 | | | | 115,258 | | | | 138,923 | | | | 163,861 | |
| Commercial mortgage loans | | | 889,415 | | | | 903,195 | | | | 900,312 | | | | 882,040 | | | | 894,951 | | | | 873,438 | | | | 862,315 | | | | 859,882 | |
| Commercial construction loans | | | 92,714 | | | | 96,823 | | | | 95,357 | | | | 130,064 | | | | 131,789 | | | | 174,052 | | | | 199,278 | | | | 222,805 | |
| Commercial business loans and leases | | | 265,806 | | | | 258,566 | | | | 284,708 | | | | 302,995 | | | | 321,924 | | | | 314,599 | | | | 333,025 | | | | 342,870 | |
| Consumer loans | | | 380,490 | | | | 391,415 | | | | 393,560 | | | | 397,527 | | | | 399,649 | | | | 401,623 | | | | 405,348 | | | | 411,068 | |
| Total loans and leases | | | 2,156,232 | | | | 2,185,207 | | | | 2,218,832 | | | | 2,256,657 | | | | 2,298,010 | | | | 2,334,282 | | | | 2,389,389 | | | | 2,461,845 | |
| Less: allowance for loan and lease losses | | | (62,135 | ) | | | (67,282 | ) | | | (71,377 | ) | | | (69,575 | ) | | | (64,559 | ) | | | (62,937 | ) | | | (58,317 | ) | | | (59,798 | ) |
| Net loans and leases | | | 2,094,097 | | | | 2,117,925 | | | | 2,147,455 | | | | 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 | | | | 76,816 | | | | 76,816 | | | | 76,816 | |
| Other intangible assets, net | | | 6,579 | | | | 7,050 | | | | 7,546 | | | | 8,042 | | | | 8,537 | | | | 9,033 | | | | 10,080 | | | | 11,128 | |
| Total assets | | | 3,519,388 | | | | 3,606,617 | | | | 3,701,150 | | | | 3,673,246 | | | | 3,630,478 | | | | 3,632,391 | | | | 3,617,497 | | | | 3,519,432 | |
| Total deposits | | | 2,549,872 | | | | 2,585,496 | | | | 2,659,956 | | | | 2,653,448 | | | | 2,696,842 | | | | 2,683,487 | | | | 2,650,845 | | | | 2,553,912 | |
| Customer repurchase agreements | | | 86,243 | | | | 97,884 | | | | 86,062 | | | | 78,416 | | | | 74,062 | | | | 84,138 | | | | 98,827 | | | | 91,928 | |
| Total stockholders' equity | | | 407,569 | | | | 451,717 | | | | 483,681 | | | | 471,857 | | | | 373,586 | | | | 380,571 | | | | 391,262 | | | | 392,522 | |
| Quarterly average balance sheets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 461,700 | | | $ | 466,437 | | | $ | 467,970 | | | $ | 462,803 | | | $ | 464,737 | | | $ | 460,772 | | | $ | 477,955 | | | $ | 481,721 | |
| Residential construction loans | | | 92,033 | | | | 87,522 | | | | 85,617 | | | | 89,732 | | | | 106,115 | | | | 123,892 | | | | 150,914 | | | | 176,811 | |
| Commercial mortgage loans | | | 895,262 | | | | 906,010 | | | | 887,259 | | | | 891,722 | | | | 877,419 | | | | 871,831 | | | | 862,658 | | | | 854,402 | |
| Commercial construction loans | | | 96,498 | | | | 96,502 | | | | 115,965 | | | | 131,265 | | | | 165,784 | | | | 191,021 | | | | 216,897 | | | | 224,229 | |
| Commercial business loans and leases | | | 256,645 | | | | 272,353 | | | | 294,168 | | | | 317,492 | | | | 312,547 | | | | 327,569 | | | | 341,039 | | | | 359,820 | |
| Consumer loans | | | 387,375 | | | | 393,491 | | | | 395,833 | | | | 398,233 | | | | 401,164 | | | | 401,930 | | | | 408,200 | | | | 408,843 | |
| Total loans and leases | | | 2,189,513 | | | | 2,222,315 | | | | 2,246,812 | | | | 2,291,247 | | | | 2,327,766 | | | | 2,377,015 | | | | 2,457,663 | | | | 2,505,826 | |
| Securities | | | 1,112,128 | | | | 1,058,175 | | | | 1,013,756 | | | | 970,681 | | | | 1,026,179 | | | | 956,350 | | | | 772,878 | | | | 536,981 | |
| Total earning assets | | | 3,332,705 | | | | 3,360,758 | | | | 3,379,388 | | | | 3,318,070 | | | | 3,409,867 | | | | 3,370,823 | | | | 3,298,923 | | | | 3,117,590 | |
| Total assets | | | 3,594,812 | | | | 3,620,881 | | | | 3,645,090 | | | | 3,591,786 | | | | 3,672,382 | | | | 3,627,617 | | | | 3,549,185 | | | | 3,375,715 | |
| Total interest-bearing liabilities | | | 2,534,716 | | | | 2,571,000 | | | | 2,596,353 | | | | 2,653,187 | | | | 2,709,152 | | | | 2,671,944 | | | | 2,595,303 | | | | 2,471,762 | |
| Noninterest-bearing demand deposits | | | 587,570 | | | | 568,835 | | | | 547,245 | | | | 524,313 | | | | 549,347 | | | | 532,462 | | | | 527,713 | | | | 476,361 | |
| Total deposits | | | 2,584,025 | | | | 2,607,190 | | | | 2,612,633 | | | | 2,640,853 | | | | 2,718,882 | | | | 2,661,108 | | | | 2,581,837 | | | | 2,431,471 | |
| Customer repurchase agreements | | | 92,049 | | | | 87,927 | | | | 85,178 | | | | 81,622 | | | | 92,471 | | | | 95,310 | | | | 93,980 | | | | 69,212 | |
| Total stockholders' equity | | | 446,256 | | | | 455,101 | | | | 475,521 | | | | 387,099 | | | | 380,534 | | | | 391,571 | | | | 393,201 | | | | 391,673 | |
| Capital and credit quality measures: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 12.41 | % | | | 12.57 | % | | | 13.05 | % | | | 10.78 | % | | | 10.36 | % | | | 10.79 | % | | | 11.08 | % | | | 11.60 | % |
| Allowance for loan and lease losses to loans and leases | | | 2.88 | % | | | 3.08 | % | | | 3.22 | % | | | 3.08 | % | | | 2.81 | % | | | 2.70 | % | | | 2.44 | % | | | 2.43 | % |
| Non-performing loans to total loans | | | 3.69 | % | | | 4.27 | % | | | 4.93 | % | | | 6.05 | % | | | 5.82 | % | | | 6.14 | % | | | 5.84 | % | | | 4.90 | % |
| Non-performing assets to total assets | | | 2.54 | % | | | 2.87 | % | | | 3.19 | % | | | 3.90 | % | | | 3.89 | % | | | 4.14 | % | | | 4.05 | % | | | 3.57 | % |
| Annualized net charge-offs to average loans and leases (1) | | | 1.37 | % | | | 1.18 | % | | | 0.77 | % | | | 1.78 | % | | | 3.34 | % | | | 5.00 | % | | | 1.97 | % | | | 0.22 | % |
| Allowance for loan and lease losses to non-performing loans | | | 78.03 | % | | | 72.08 | % | | | 65.30 | % | | | 50.98 | % | | | 48.28 | % | | | 43.90 | % | | | 41.80 | % | | | 49.54 | % |
| Net charge-offs | | $ | 7,470 | | | $ | 6,548 | | | $ | 4,305 | | | $ | 10,009 | | | $ | 19,462 | | | $ | 29,831 | | | $ | 12,095 | | | $ | 1,341 | |
| Non-performing assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-accrual loans and leases | | $ | 63,327 | | | $ | 73,876 | | | $ | 83,887 | | | $ | 110,719 | | | $ | 111,180 | | | $ | 127,473 | | | $ | 123,117 | | | $ | 110,761 | |
| Loans and leases 90 days past due | | | 14,154 | | | | 18,268 | | | | 24,226 | | | | 25,085 | | | | 19,001 | | | | 15,491 | | | | 16,004 | | | | 9,545 | |
| Restructured loans and leases | | | 2,148 | | | | 1,199 | | | | 1,199 | | | | 682 | | | | 3,549 | | | | 395 | | | | 395 | | | | 395 | |
| Total non-performing loans | | | 79,629 | | | | 93,343 | | | | 109,312 | | | | 136,486 | | | | 133,730 | | | | 143,359 | | | | 139,516 | | | | 120,701 | |
| Other real estate owned, net | | | 9,493 | | | | 10,011 | | | | 8,730 | | | | 6,796 | | | | 7,464 | | | | 6,873 | | | | 6,829 | | | | 5,094 | |
| Other assets owned | | | 200 | | | | 200 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing assets | | $ | 89,322 | | | $ | 103,554 | | | $ | 118,042 | | | $ | 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 December 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 (2) | | $ | 461,700 | | | $ | 5,849 | | | | 5.09 | % | | $ | 464,737 | | | $ | 6,540 | | | | 5.63 | % |
| Residential construction loans | | | 92,033 | | | | 993 | | | | 4.28 | | | | 106,115 | | | | 1,332 | | | | 4.98 | |
| Commercial mortgage loans | | | 895,262 | | | | 13,418 | | | | 5.95 | | | | 877,419 | | | | 13,501 | | | | 6.10 | |
| Commercial construction loans | | | 96,498 | | | | 919 | | | | 3.78 | | | | 165,784 | | | | 957 | | | | 2.29 | |
| Commercial business loans and leases | | | 256,645 | | | | 3,355 | | | | 5.19 | | | | 312,547 | | | | 4,124 | | | | 5.24 | |
| Consumer loans | | | 387,375 | | | | 3,726 | | | | 3.84 | | | | 401,164 | | | | 3,979 | | | | 3.95 | |
| Total loans and leases (3) | | | 2,189,513 | | | | 28,260 | | | | 5.13 | | | | 2,327,766 | | | | 30,433 | | | | 5.20 | |
| Taxable securities | | | 934,784 | | | | 6,403 | | | | 2.68 | | | | 854,637 | | | | 6,633 | | | | 3.04 | |
| Tax-exempt securities (4) | | | 177,344 | | | | 2,783 | | | | 6.28 | | | | 171,542 | | | | 2,922 | | | | 6.85 | |
| Interest-bearing deposits with banks | | | 29,410 | | | | 19 | | | | 0.26 | | | | 54,359 | | | | 37 | | | | 0.27 | |
| Federal funds sold | | | 1,654 | | | | 1 | | | | 0.18 | | | | 1,563 | | | | - | | | | 0.13 | |
| Total interest-earning assets | | | 3,332,705 | | | | 37,466 | | | | 4.46 | | | | 3,409,867 | | | | 40,025 | | | | 4.66 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (67,164 | ) | | | | | | | | | | | (65,093 | ) | | | | | | | | |
| Cash and due from banks | | | 45,042 | | | | | | | | | | | | 44,646 | | | | | | | | | |
| Premises and equipment, net | | | 48,326 | | | | | | | | | | | | 49,894 | | | | | | | | | |
| Other assets | | | 235,903 | | | | | | | | | | | | 233,068 | | | | | | | | | |
| Total assets | | $ | 3,594,812 | | | | | | | | | | | $ | 3,672,382 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 302,401 | | | | 68 | | | | 0.09 | % | | $ | 262,327 | | | | 94 | | | | 0.14 | % |
| Regular savings deposits | | | 169,021 | | | | 36 | | | | 0.08 | | | | 153,692 | | | | 34 | | | | 0.09 | |
| Money market savings deposits | | | 882,323 | | | | 1,009 | | | | 0.45 | | | | 935,980 | | | | 2,035 | | | | 0.86 | |
| Time deposits | | | 642,710 | | | | 2,080 | | | | 1.28 | | | | 817,536 | | | | 4,640 | | | | 2.25 | |
| Total interest-bearing deposits | | | 1,996,455 | | | | 3,193 | | | | 0.63 | | | | 2,169,535 | | | | 6,803 | | | | 1.24 | |
| Other borrowings | | | 96,016 | | | | 71 | | | | 0.30 | | | | 92,906 | | | | 83 | | | | 0.35 | |
| Advances from FHLB | | | 407,245 | | | | 3,650 | | | | 3.56 | | | | 411,711 | | | | 3,703 | | | | 3.57 | |
| Subordinated debentures | | | 35,000 | | | | 247 | | | | 2.82 | | | | 35,000 | | | | 227 | | | | 2.59 | |
| Total interest-bearing liabilities | | | 2,534,716 | | | | 7,161 | | | | 1.12 | | | | 2,709,152 | | | | 10,816 | | | | 1.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 587,570 | | | | | | | | | | | | 549,347 | | | | | | | | | |
| Other liabilities | | | 26,270 | | | | | | | | | | | | 33,349 | | | | | | | | | |
| Stockholders' equity | | | 446,256 | | | | | | | | | | | | 380,534 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,594,812 | | | | | | | | | | | $ | 3,672,382 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 30,305 | | | | 3.34 | % | | | | | | $ | 29,209 | | | | 3.07 | % |
| Less: tax-equivalent adjustment | | | | | | | 1,352 | | | | | | | | | | | | 1,376 | | | | | |
| Net interest income | | | | | | $ | 28,953 | | | | | | | | | | | $ | 27,833 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.46 | % | | | | | | | | | | | 4.66 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.85 | | | | | | | | | | | | 1.26 | |
| Net interest margin | | | | | | | | | | | 3.61 | % | | | | | | | | | | | 3.40 | % |
| (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 $1.4 million and $1.4 million in 2010 and 2009, respectively. |
| (2) | Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans. |
| (3) | Non-accrual loans are included in the average balances. |
| (4) | Includes only investments that are exempt from federal taxes. |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
| | | Twelve Months Ended December 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 (2) | | $ | 464,462 | | | $ | 24,838 | | | | 5.35 | % | | $ | 471,221 | | | $ | 27,560 | | | | 5.85 | % |
| Residential construction loans | | | 88,729 | | | | 4,037 | | | | 4.55 | | | | 139,197 | | | | 7,165 | | | | 5.15 | |
| Commercial mortgage loans | | | 895,103 | | | | 53,877 | | | | 6.02 | | | | 866,655 | | | | 53,280 | | | | 6.15 | |
| Commercial construction loans | | | 109,925 | | | | 3,576 | | | | 3.25 | | | | 199,299 | | | | 5,669 | | | | 2.84 | |
| Commercial business loans and leases | | | 284,963 | | | | 14,789 | | | | 5.19 | | | | 335,093 | | | | 17,991 | | | | 5.37 | |
| Consumer loans | | | 393,703 | | | | 15,206 | | | | 3.88 | | | | 405,005 | | | | 16,001 | | | | 3.96 | |
| Total loans and leases (3) | | | 2,236,885 | | | | 116,323 | | | | 5.20 | | | | 2,416,470 | | | | 127,666 | | | | 5.28 | |
| Taxable securities | | | 875,292 | | | | 25,630 | | | | 2.93 | | | | 662,853 | | | | 20,784 | | | | 3.14 | |
| Tax-exempt securities (4) | | | 163,834 | | | | 11,052 | | | | 6.75 | | | | 161,949 | | | | 11,467 | | | | 7.08 | |
| Interest-bearing deposits with banks | | | 69,755 | | | | 177 | | | | 0.25 | | | | 56,980 | | | | 149 | | | | 0.26 | |
| Federal funds sold | | | 1,773 | | | | 3 | | | | 0.17 | | | | 2,045 | | | | 3 | | | | 0.19 | |
| Total interest-earning assets | | | 3,347,539 | | | | 153,185 | | | | 4.58 | | | | 3,300,297 | | | | 160,069 | | | | 4.85 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (69,393 | ) | | | | | | | | | | | (59,961 | ) | | | | | | | | |
| Cash and due from banks | | | 44,736 | | | | | | | | | | | | 45,038 | | | | | | | | | |
| Premises and equipment, net | | | 48,738 | | | | | | | | | | | | 50,649 | | | | | | | | | |
| Other assets | | | 241,368 | | | | | | | | | | | | 221,211 | | | | | | | | | |
| Total assets | | $ | 3,612,988 | | | | | | | | | | | $ | 3,557,234 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 292,106 | | | | 324 | | | | 0.11 | % | | $ | 254,047 | | | | 420 | | | | 0.17 | % |
| Regular savings deposits | | | 165,032 | | | | 164 | | | | 0.10 | | | | 152,383 | | | | 210 | | | | 0.14 | |
| Money market savings deposits | | | 890,187 | | | | 5,015 | | | | 0.56 | | | | 841,336 | | | | 10,725 | | | | 1.27 | |
| Time deposits | | | 706,487 | | | | 11,431 | | | | 1.62 | | | | 829,817 | | | | 23,566 | | | | 2.84 | |
| Total interest-bearing deposits | | | 2,053,812 | | | | 16,934 | | | | 0.82 | | | | 2,077,583 | | | | 34,921 | | | | 1.68 | |
| Other borrowings | | | 89,932 | | | | 269 | | | | 0.30 | | | | 88,198 | | | | 308 | | | | 0.35 | |
| Advances from FHLB | | | 409,697 | | | | 14,599 | | | | 3.56 | | | | 412,074 | | | | 14,708 | | | | 3.57 | |
| Subordinated debentures | | | 35,000 | | | | 940 | | | | 2.69 | | | | 35,000 | | | | 1,585 | | | | 4.53 | |
| Total interest-bearing liabilities | | | 2,588,441 | | | | 32,742 | | | | 1.27 | | | | 2,612,855 | | | | 51,522 | | | | 1.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 557,197 | | | | | | | | | | | | 521,701 | | | | | | | | | |
| Other liabilities | | | 26,155 | | | | | | | | | | | | 33,457 | | | | | | | | | |
| Stockholders' equity | | | 441,195 | | | | | | | | | | | | 389,221 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,612,988 | | | | | | | | | | | $ | 3,557,234 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 120,443 | | | | 3.31 | % | | | | | | $ | 108,547 | | | | 2.88 | % |
| Less: tax-equivalent adjustment | | | | | | | 4,836 | | | | | | | | | | | | 4,839 | | | | | |
| Net interest income | | | | | | $ | 115,607 | | | | | | | | | | | $ | 103,708 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.58 | % | | | | | | | | | | | 4.85 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.98 | | | | | | | | | | | | 1.56 | |
| Net interest margin | | | | | | | | | | | 3.60 | % | | | | | | | | | | | 3.29 | % |
| (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 $4.8 million and $4.8 million in 2010 and 2009, respectively. |
| (2) | Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans. |
| (3) | Non-accrual loans are included in the average balances. |
| (4) | Includes only investments that are exempt from federal taxes. |
