| News release |
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS SECOND QUARTER PROFIT OF $7.2 MILLION
AND COMPLETES COMMERCEFIRST ACQUISITION
OLNEY, MARYLAND, July 19, 2012 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the second quarter of 2012 of $7.2 million ($.30 per diluted share) compared to net income of $8.3 million ($0.34 per diluted share) for the second quarter of 2011 and net income of $8.5 million ($0.35 per diluted share) for the first quarter of 2012.
Net income for the six-month period ended June 30, 2012 totaled $15.7 million ($0.65 per diluted share) compared to net income of $15.6 million ($0.65 per diluted share) for the prior year period.
Merger costs relating to the acquisition of CommerceFirst Bancorp Inc. (“CommerceFirst”) were $2.2 million and $2.6 million for the second quarter and the first six months of 2012, respectively. Consolidated results of operations for CommerceFirst are included subsequent to the close of business on May 31, 2012. On the date of purchase, CommerceFirst had total loans of $169 million and total deposits of $170 million.
“We continued to show positive results during the second quarter which reflected solid core deposit growth as well as our fourth consecutive quarter of new organic loan growth,” said Daniel J. Schrider, President and Chief Executive Officer. “We have maintained our momentum despite a struggling economy and intense competition in the markets we serve, due in large part, to our improving credit metrics and deposit mix.”
“During the quarter we completed the acquisition of CommerceFirst Bank, headquartered in Anne Arundel County, MD and expect this acquisition to be accretive to income in the current year. We are excited by the opportunities to grow our small business lending portfolio in this contiguous natural market,” said Schrider.
Second Quarter Highlights:
| · | Pre-tax pre-provision income, a non-GAAP measure, was $14.6 million for the second quarter of 2012, a 12% increase over the second quarter of 2011 and a 13% increase over the first quarter of 2012. |
| · | Total loans increased 16% or $337.2 million at June 30, 2012 compared to June 30, 2011. Excluding $165.7 million in loans acquired in the CommerceFirst acquisition, this was the Company’s fourth straight quarterly organic increase due primarily to growth in the commercial loan portfolio. |
| · | Non-performing loans decreased to $67.0 million at June 30, 2012 compared to $76.5 million at June 30, 2011 and $72.2 million at March 31, 2012. The decrease in the second quarter was due to a lower level of non-accrual loans. |
| · | The net interest margin was 3.62% for the second quarter of 2012, compared to 3.58% for the second quarter of 2011 and 3.56% for the first quarter of 2012. |
Review of Balance Sheet and Credit Quality
Total assets increased 7% to $3.9 billion at June 30, 2012 compared to balances at June 30, 2011. Total loans and leases increased 16% to $2.5 billion compared to the prior year.This increase consisted of $165.7 million in loans from the acquisition of CommerceFirst and $171.5 million of internally-generated loan growth, primarily in the commercial loan portfolio. Total loans increased 11% compared to balances at December 31, 2011. Excluding the loans acquired in the CommerceFirst acquisition, total loans increased 8% and 3% compared to June 30, 2011 and December 31, 2011, respectively.
Customer funding sources, which include deposits and other short-term borrowings from customers, increased 7% compared to June 30, 2011. This increase was due primarily to a 16% increase in noninterest-bearing and interest-bearing checking accounts. The Company views the growth in checking accounts as an especially valuable metric as it provides additional opportunities to grow multiple product banking relationships with clients. Excluding the deposits acquired in the CommerceFirst acquisition, total customer funding sources increased 2% while certificates of deposit declined 15% at June 30, 2012 compared to balances at June 30, 2011, as the Company managed its deposit mix to maintain the net interest margin.
Tangible common equity, a non-GAAP metric, totaled $371.0 million at June 30, 2012 compared to $335.7 million at June 30, 2011 resulting in an increase in the ratio of tangible common equity to tangible assets from 9.51% at June 30, 2011 to 9.84% at June 30, 2012. This increase was due primarily to stock issued in connection with the CommerceFirst acquisition and net income earned during the period. At June 30, 2012, the Company had a total risk-based capital ratio of 15.37%, a tier 1 risk-based capital ratio of 14.12% and a tier 1 leverage ratio of 11.21%.
Non-performing loans decreased to $67.0 million at June 30, 2012 compared to $76.5 million at June 30, 2011 and $72.2 million at March 31, 2012. Included in the June 30, 2012 balances are $2.5 million of non-performing loans acquired from CommerceFirst. Excluding the acquired non-performing loans mentioned previously, the Company’s credit quality metrics showed continued improvement due to resolution of existing problem credits and limited migration of new credits to non-performing status.
The provision for loan and lease losses was $1.6 million for the second quarter of 2012 compared to $1.2 million for the second quarter of 2011 and $0.7 million for the first quarter of 2012. The increase in the provision for the second quarter of 2012 compared to both the prior quarter and the second quarter of 2011 was due primarily to an increase in specific reserves on non-performing loans.
Loan charge-offs, net of recoveries, totaled $1.4 million for the second quarter of 2012 compared to net charge-offs of $4.8 million for the second quarter of 2011 and $5.0 million for the first quarter of 2012. The allowance for loan and lease losses represented 1.83% of outstanding loans and leases and 68% of non-performing loans at June 30, 2012 compared to 2.58% of outstanding loans and leases and 72% of non-performing loans at June 30, 2011 and 1.98% of outstanding loans and leases and 62% of non-performing loans at March 31, 2012. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.
Income Statement Review
Net interest income for the second quarter of 2012 increased by $1.7 million or 6% compared to the second quarter of 2011 due to an increase in average interest-earning assets resulting from increased loan balances from the addition of higher yielding loans from the CommerceFirst transaction and organic growth. Combined with a lower cost deposit mix, these factors resulted in an increase in the net interest margin to 3.62% for the second quarter of 2012 compared to 3.58% for the second quarter of 2011.
Non-interest income increased $0.7 million or 6% to $11.5 million for the second quarter of 2012 compared to $10.8 million for the second quarter of 2011. This increase was due primarily to growth in income from mortgage banking activities of $0.5 million due to higher loan origination volumes and higher average gains on sales, both due to increased refinancing activity during the quarter. In addition, other non-interest income increased 26% over the prior year quarter due mainly to higher fees from loan prepayments and other fees.
Non-interest expenses were $28.9 million for the second quarter of 2012 compared to $25.8 million in the second quarter of 2011, an increase of $3.1 million or 12%. This increase was driven by higher salaries and benefits expenses, outside data services costs and professional fees primarily resulting from the CommerceFirst acquisition. These expenses were partially offset by lower FDIC insurance premiums resulting from improved financial ratios compared to the prior year period. Excluding merger expenses of $2.2 million, non-interest expenses increased 3% over the prior year quarter.
The non-GAAP efficiency ratio improved to 61.5% for the second quarter of 2012 compared to 62.8% for the second quarter of 2011.
Net interest income for the first six months of 2012 increased by $2.4 million or 4% compared to the first six months of 2011 due to an increase in average earning assets resulting from organic loan growth, loans acquired in the CommerceFirst acquisition and an increased level of noninterest-bearing deposits, which more than offset lower earning asset yields. Lower yields, together with a reduced rate of decline in the cost of funds, resulted in a decrease in the net interest margin to 3.59% for the first six months of 2012 compared to 3.62% for the first six months of 2011.
Non-interest income increased $1.7 million or 8% to $22.5 million for the first six months of 2012 as compared to $20.8 million for 2011. This increase was due primarily to an increase of $1.1 million or 83% in income from mortgage banking activities due to higher volumes and increased average gains from refinancing activity. In addition, revenue from wealth management services increased $0.4 million or 6% due primarily to higher average assets under management.
Non-interest expenses were $55.5 million for the first six months of 2012 compared to $51.9 million for the first six months of 2011, an increase of $3.6 million or 7%. This increase was driven by an 8% in salaries and benefits expense due to merit salary increases, a larger staff and higher cost of health benefits. These expenses were partially offset by a 27% decrease in FDIC insurance premiums due to a change in calculation of such premiums effective in the second quarter of 2011. Excluding one-time merger expenses of $2.6 million in the first six months of 2012, non-interest expenses increased only 2% over the prior year period.
The non-GAAP efficiency ratio was 62.3% for the first six months of 2012 compared to 63.9% for the first six months of 2011.
Conference Call
The Company’s management will host a conference call to discuss its second quarter results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations’ section of the Sandy Spring Web site at www.sandyspringbank.com. Participants may call 1-877-317-6789. A password is not necessary. Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available at the Web site until 9:00 am (ET) August 20, 2012. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10015482
About Sandy Spring Bancorp/Sandy Spring Bank
With $3.9 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 49 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland, and Arlington, Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring Bank also offers a comprehensive menu of insurance and investment management services. Visitwww.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, 2011, 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 atwww.sec.gov.
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | | | | | | | | | |
| FINANCIAL HIGHLIGHTS - UNAUDITED | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | Three Months Ended | | | | | | Six Months Ended | | | | |
| | | June 30, | | | % | | | June 30, | | | % | |
| (Dollars in thousands, except per share data) | | 2012 | | | 2011 | | | Change | | | 2012 | | | 2011 | | | Change | |
| Results of Operations: | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 29,809 | | | $ | 28,154 | | | | 6 | % | | $ | 58,514 | | | $ | 56,164 | | | | 4 | % |
| Provision for loan and lease losses | | | 1,585 | | | | 1,151 | | | | 38 | | | | 2,249 | | | | 2,666 | | | | (16 | ) |
| Non-interest income | | | 11,493 | | | | 10,802 | | | | 6 | | | | 22,467 | | | | 20,794 | | | | 8 | |
| Non-interest expenses | | | 28,858 | | | | 25,838 | | | | 12 | | | | 55,541 | | | | 51,900 | | | | 7 | |
| Income before income taxes | | | 10,859 | | | | 11,967 | | | | (9 | ) | | | 23,191 | | | | 22,392 | | | | 4 | |
| Net income | | | 7,207 | | | | 8,296 | | | | (13 | ) | | | 15,683 | | | | 15,587 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Pre-tax pre-provision pre-merger expense income | | $ | 14,642 | | | $ | 13,118 | | | | 12 | | | $ | 28,012 | | | $ | 25,058 | | | | 12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.78 | % | | | 0.93 | % | | | | | | | 0.86 | % | | | 0.89 | % | | | | |
| Return on average common equity | | | 6.34 | % | | | 8.03 | % | | | | | | | 6.96 | % | | | 7.65 | % | | | | |
| Net interest margin | | | 3.62 | % | | | 3.58 | % | | | | | | | 3.59 | % | | | 3.62 | % | | | | |
| Efficiency ratio - GAAP(1) | | | 69.87 | % | | | 66.33 | % | | | | | | | 68.59 | % | | | 67.44 | % | | | | |
| Efficiency ratio - Non-GAAP(1) | | | 61.54 | % | | | 62.82 | % | | | | | | | 62.25 | % | | | 63.94 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income | | $ | 0.30 | | | $ | 0.34 | | | | (12 | )% | | $ | 0.65 | | | $ | 0.65 | | | | - | % |
| Diluted net income | | | 0.30 | | | | 0.34 | | | | (12 | ) | | | 0.65 | | | | 0.65 | | | | - | |
| Average fully diluted shares | | | 24,423,236 | | | | 24,130,357 | | | | 1 | | | | 24,303,095 | | | | 24,123,183 | | | | 1 | |
| Dividends declared per share | | | 0.12 | | | | 0.08 | | | | 50 | | | | 0.22 | | | | 0.16 | | | | 38 | |
| Book value per share | | | 18.94 | | | | 17.58 | | | | 8 | | | | 18.94 | | | | 17.58 | | | | 8 | |
| Tangible book value per share | | | 14.91 | | | | 13.93 | | | | 7 | | | | 14.91 | | | | 13.93 | | | | 7 | |
| Outstanding shares | | | 24,886,724 | | | | 24,095,123 | | | | 3 | | | | 24,886,724 | | | | 24,095,123 | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Condition at period-end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities | | $ | 1,006,743 | | | $ | 1,128,589 | | | | (11 | )% | | $ | 1,006,743 | | | $ | 1,128,589 | | | | (11 | )% |
| Loans and leases | | | 2,475,078 | | | | 2,137,920 | | | | 16 | | | | 2,475,078 | | | | 2,137,920 | | | | 16 | |
| Interest-earning assets | | | 3,584,480 | | | | 3,322,317 | | | | 8 | | | | 3,584,480 | | | | 3,322,317 | | | | 8 | |
| Assets | | | 3,855,177 | | | | 3,612,016 | | | | 7 | | | | 3,855,177 | | | | 3,612,016 | | | | 7 | |
| Deposits | | | 2,852,055 | | | | 2,657,861 | | | | 7 | | | | 2,852,055 | | | | 2,657,861 | | | | 7 | |
| Interest-bearing liabilities | | | 2,593,501 | | | | 2,515,053 | | | | 3 | | | | 2,593,501 | | | | 2,515,053 | | | | 3 | |
| Stockholders' equity | | | 471,464 | | | | 423,684 | | | | 11 | | | | 471,464 | | | | 423,684 | | | | 11 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage | | | 11.21 | % | | | 10.64 | % | | | | | | | 11.21 | % | | | 10.64 | % | | | | |
| Tier 1 capital to risk-weighted assets | | | 14.12 | % | | | 14.75 | % | | | | | | | 14.12 | % | | | 14.75 | % | | | | |
| Total regulatory capital to risk-weighted assets | | | 15.37 | % | | | 16.01 | % | | | | | | | 15.37 | % | | | 16.01 | % | | | | |
| Tangible common equity to tangible assets(2) | | | 9.84 | % | | | 9.51 | % | | | | | | | 9.84 | % | | | 9.51 | % | | | | |
| Average equity to average assets | | | 12.33 | % | | | 11.63 | % | | | | | | | 12.33 | % | | | 11.63 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Credit quality ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses to loans and leases | | | 1.83 | % | | | 2.58 | % | | | | | | | 1.83 | % | | | 2.58 | % | | | | |
| Non-performing loans to total loans | | | 2.71 | % | | | 3.58 | % | | | | | | | 2.71 | % | | | 3.58 | % | | | | |
| Non-performing assets to total assets | | | 1.98 | % | | | 2.31 | % | | | | | | | 1.98 | % | | | 2.31 | % | | | | |
| Allowance for loan and lease losses to non-performing loans | | | 67.61 | % | | | 72.22 | % | | | | | | | 67.61 | % | | | 72.22 | % | | | | |
| Annualized net charge-offs to average loans and leases(3) | | | 0.23 | % | | | 0.90 | %% | | | | | | | 0.56 | % | | | 0.90 | % | | | | |
| (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 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. |
| (2) | 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 and other comprehensive gains (losses). See the Reconciliation Table included with these Financial Highlights. |
| (3) | Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale. |
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | | | |
| RECONCILIATION TABLE - UNAUDITED | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| (Dollars in thousands) | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Pre-tax pre-provision pre-merger expense income: | | | | | | | | | | | | | | | | |
| Net income | | $ | 7,207 | | | $ | 8,296 | | | $ | 15,683 | | | $ | 15,587 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Merger expenses | | | 2,198 | | | | - | | | | 2,572 | | | | - | |
| Income taxes | | | 3,652 | | | | 3,671 | | | | 7,508 | | | | 6,805 | |
| Provision for loan and lease losses | | | 1,585 | | | | 1,151 | | | | 2,249 | | | | 2,666 | |
| Pre-tax pre-provision pre-merger expense income | | $ | 14,642 | | | $ | 13,118 | | | $ | 28,012 | | | $ | 25,058 | |
| | | | | | | | | | | | | | | | | |
| GAAP efficiency ratio: | | | | | | | | | | | | | | | | |
| Non-interest expenses | | $ | 28,858 | | | $ | 25,838 | | | $ | 55,541 | | | $ | 51,900 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus non-interest income | | $ | 41,302 | | | $ | 38,956 | | | $ | 80,981 | | | $ | 76,958 | |
| | | | | | | | | | | | | | | | | |
| GAAP Efficiency ratio | | | 69.87 | % | | | 66.33 | % | | | 68.59 | % | | | 67.44 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Non-GAAP efficiency ratio: | | | | | | | | | | | | | | | | |
| Non-interest expenses | | $ | 28,858 | | | $ | 25,838 | | | $ | 55,541 | | | $ | 51,900 | |
| Less non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 466 | | | | 462 | | | | 927 | | | | 923 | |
| Merger expenses | | | 2,198 | | | | - | | | | 2,572 | | | | - | |
| Non-interest expenses - as adjusted | | $ | 26,194 | | | $ | 25,376 | | | $ | 52,042 | | | $ | 50,977 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus non-interest income | | $ | 41,302 | | | $ | 38,956 | | | $ | 80,981 | | | $ | 76,958 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Tax-equivalent income | | | 1,340 | | | | 1,427 | | | | 2,716 | | | | 2,734 | |
| Less non-GAAP adjustments: | | | | | | | | | | | | | | | | |
| Securities gains | | | 90 | | | | 32 | | | | 163 | | | | 52 | |
| OTTI recognized in earnings | | | (8 | ) | | | (43 | ) | | | (72 | ) | | | (84 | ) |
| Net interest income plus non-interest income - as adjusted | | $ | 42,560 | | | $ | 40,394 | | | $ | 83,606 | | | $ | 79,724 | |
| | | | | | | | | | | | | | | | | |
| Non-GAAP Efficiency ratio | | | 61.54 | % | | | 62.82 | % | | | 62.25 | % | | | 63.94 | % |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio: | | | | | | | | | | | | | | | | |
| Total stockholders' equity | | $ | 471,464 | | | $ | 423,684 | | | $ | 471,464 | | | $ | 423,684 | |
| Accumulated other comprehensive income (loss) | | | (14,577 | ) | | | (5,484 | ) | | | (14,577 | ) | | | (5,484 | ) |
| Goodwill | | | (81,892 | ) | | | (76,816 | ) | | | (81,892 | ) | | | (76,816 | ) |
| Other intangible assets, net | | | (4,017 | ) | | | (5,656 | ) | | | (4,017 | ) | | | (5,656 | ) |
| Tangible common equity | | $ | 370,978 | | | $ | 335,728 | | | $ | 370,978 | | | $ | 335,728 | |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | 3,855,177 | | | $ | 3,612,016 | | | $ | 3,855,177 | | | $ | 3,612,016 | |
| Goodwill | | | (81,892 | ) | | | (76,816 | ) | | | (81,892 | ) | | | (76,816 | ) |
| Other intangible assets, net | | | (4,017 | ) | | | (5,656 | ) | | | (4,017 | ) | | | (5,656 | ) |
| Tangible assets | | $ | 3,769,268 | | | $ | 3,529,544 | | | $ | 3,769,268 | | | $ | 3,529,544 | |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio | | | 9.84 | % | | | 9.51 | % | | | 9.84 | % | | | 9.51 | % |
| | | | | | | | | | | | | | | | | |
| Outstanding common shares | | | 24,886,724 | | | | 24,095,123 | | | | 24,886,724 | | | | 24,095,123 | |
| Tangible book value per common share | | $ | 14.91 | | | $ | 13.93 | | | $ | 14.91 | | | $ | 13.93 | |
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | |
| CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED | | | |
| | | | | | | | | | |
| | | June 30, | | | December 31, | | | June 30, | |
| (Dollars in thousands) | | 2012 | | | 2011 | | | 2011 | |
| Assets | | | | | | | | | | | | |
| Cash and due from banks | | $ | 46,002 | | | $ | 49,832 | | | $ | 76,552 | |
| Federal funds sold | | | 467 | | | | 1,006 | | | | 1,231 | |
| Interest-bearing deposits with banks | | | 76,365 | | | | 21,476 | | | | 42,927 | |
| Cash and cash equivalents | | | 122,834 | | | | 72,314 | | | | 120,710 | |
| Residential mortgage loans held for sale (at fair value) | | | 25,827 | | | | 25,341 | | | | 11,650 | |
| Investments available-for-sale (at fair value) | | | 808,881 | | | | 951,301 | | | | 995,496 | |
| Investments held-to-maturity -- fair value of $169,396, $184,167 and $103,054 | | | | | | | | | | | | |
| at June 30, 2012, December 31, 2011 and June 30, 2011, respectively | | | 164,846 | | | | 178,465 | | | | 100,030 | |
| Other equity securities | | | 33,016 | | | | 34,933 | | | | 33,063 | |
| Total loans and leases | | | 2,475,078 | | | | 2,239,692 | | | | 2,137,920 | |
| Less: allowance for loan and lease losses | | | (45,265 | ) | | | (49,426 | ) | | | (55,246 | ) |
| Net loans and leases | | | 2,429,813 | | | | 2,190,266 | | | | 2,082,674 | |
| Premises and equipment, net | | | 49,240 | | | | 48,483 | | | | 48,921 | |
| Other real estate owned | | | 9,553 | | | | 4,431 | | | | 6,951 | |
| Accrued interest receivable | | | 13,456 | | | | 12,898 | | | | 13,088 | |
| Goodwill | | | 81,892 | | | | 76,816 | | | | 76,816 | |
| Other intangible assets, net | | | 4,017 | | | | 4,734 | | | | 5,656 | |
| Other assets | | | 111,802 | | | | 111,388 | | | | 116,961 | |
| Total assets | | $ | 3,855,177 | | | $ | 3,711,370 | | | $ | 3,612,016 | |
| | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 763,566 | | | $ | 650,377 | | | $ | 648,605 | |
| Interest-bearing deposits | | | 2,088,489 | | | | 2,006,143 | | | | 2,009,256 | |
| Total deposits | | | 2,852,055 | | | | 2,656,520 | | | | 2,657,861 | |
| Securities sold under retail repurchase agreements and federal funds purchased | | | 64,779 | | | | 143,613 | | | | 65,214 | |
| Advances from FHLB | | | 405,233 | | | | 405,408 | | | | 405,583 | |
| Subordinated debentures | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Accrued interest payable and other liabilities | | | 26,646 | | | | 24,720 | | | | 24,674 | |
| Total liabilities | | | 3,383,713 | | | | 3,265,261 | | | | 3,188,332 | |
| | | | | | | | | | | | | |
| Stockholders' Equity | | | | | | | | | | | | |
| Common stock -- par value $1.00; shares authorized 50,000,000; shares issued | | | | | | | | | | | | |
| and outstanding 24,886,724, 24,091,042 and 24,095,123 at June 30, 2012, | | | | | | | | | | | | |
| December 31, 2011 and June 30, 2011, respectively | | | 24,887 | | | | 24,091 | | | | 24,095 | |
| Additional paid in capital | | | 190,733 | | | | 177,828 | | | | 177,303 | |
| Retained earnings | | | 241,267 | | | | 230,942 | | | | 216,802 | |
| Accumulated other comprehensive income | | | 14,577 | | | | 13,248 | | | | 5,484 | |
| Total stockholders' equity | | | 471,464 | | | | 446,109 | | | | 423,684 | |
| Total liabilities and stockholders' equity | | $ | 3,855,177 | | | $ | 3,711,370 | | | $ | 3,612,016 | |
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | | | |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED | | | | | | |
| | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| (Dollars in thousands, except per share data) | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Interest Income: | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 28,338 | | | $ | 26,816 | | | $ | 55,467 | | | $ | 53,806 | |
| Interest on loans held for sale | | | 190 | | | | 124 | | | | 339 | | | | 246 | |
| Interest on deposits with banks | | | 24 | | | | 21 | | | | 45 | | | | 39 | |
| Interest and dividends on investment securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 4,662 | | | | 5,649 | | | | 9,605 | | | | 11,089 | |
| Exempt from federal income taxes | | | 2,343 | | | | 2,398 | | | | 4,716 | | | | 4,577 | |
| Interest on federal funds sold | | | 1 | | | | - | | | | 1 | | | | 1 | |
| Total interest income | | | 35,558 | | | | 35,008 | | | | 70,173 | | | | 69,758 | |
| Interest Expense: | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 1,871 | | | | 2,987 | | | | 3,884 | | | | 5,900 | |
| Interest on retail repurchase agreements and federal funds purchased | | | 51 | | | | 53 | | | | 112 | | | | 106 | |
| Interest on advances from FHLB | | | 3,586 | | | | 3,590 | | | | 7,173 | | | | 7,141 | |
| Interest on subordinated debt | | | 241 | | | | 224 | | | | 490 | | | | 447 | |
| Total interest expense | | | 5,749 | | | | 6,854 | | | | 11,659 | | | | 13,594 | |
| Net interest income | | | 29,809 | | | | 28,154 | | | | 58,514 | | | | 56,164 | |
| Provision for loan and lease losses | | | 1,585 | | | | 1,151 | | | | 2,249 | | | | 2,666 | |
Net interest income after provision for loan and
lease losses | | | 28,224 | | | | 27,003 | | | | 56,265 | | | | 53,498 | |
| Non-interest Income: | | | | | | | | | | | | | | | | |
| Investment securities gains | | | 90 | | | | 32 | | | | 163 | | | | 52 | |
| Total other-than-temporary impairment ("OTTI") losses | | | (8 | ) | | | (43 | ) | | | (72 | ) | | | (102 | ) |
| Portion of OTTI losses recognized in other comprehensive income, before taxes | | | - | | | | - | | | | - | | | | 18 | |
| Net OTTI recognized in earnings | | | (8 | ) | | | (43 | ) | | | (72 | ) | | | (84 | ) |
| Service charges on deposit accounts | | | 2,283 | | | | 2,437 | | | | 4,483 | | | | 4,689 | |
| Mortgage banking activities | | | 1,288 | | | | 808 | | | | 2,313 | | | | 1,263 | |
| Wealth management income | | | 4,034 | | | | 4,023 | | | | 8,091 | | | | 7,668 | |
| Insurance agency commissions | | | 934 | | | | 953 | | | | 2,136 | | | | 2,133 | |
| Income from bank owned life insurance | | | 660 | | | | 654 | | | | 1,294 | | | | 1,300 | |
| Visa check fees | | | 962 | | | | 949 | | | | 1,860 | | | | 1,783 | |
| Other income | | | 1,250 | | | | 989 | | | | 2,199 | | | | 1,990 | |
| Total non-interest income | | | 11,493 | | | | 10,802 | | | | 22,467 | | | | 20,794 | |
| Non-interest Expenses: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 15,927 | | | | 14,676 | | | | 31,628 | | | | 29,300 | |
| Occupancy expense of premises | | | 2,943 | | | | 2,790 | | | | 5,789 | | | | 5,933 | |
| Equipment expenses | | | 1,255 | | | | 1,128 | | | | 2,445 | | | | 2,270 | |
| Marketing | | | 565 | | | | 709 | | | | 1,060 | | | | 1,194 | |
| Outside data services | | | 1,828 | | | | 999 | | | | 3,107 | | | | 1,994 | |
| FDIC insurance | | | 653 | | | | 736 | | | | 1,305 | | | | 1,780 | |
| Amortization of intangible assets | | | 466 | | | | 462 | | | | 927 | | | | 923 | |
| Other expenses | | | 5,221 | | | | 4,338 | | | | 9,280 | | | | 8,506 | |
| Total non-interest expenses | | | 28,858 | | | | 25,838 | | | | 55,541 | | | | 51,900 | |
| Income before income taxes | | | 10,859 | | | | 11,967 | | | | 23,191 | | | | 22,392 | |
| Income tax expense | | | 3,652 | | | | 3,671 | | | | 7,508 | | | | 6,805 | |
| Net income | | $ | 7,207 | | | $ | 8,296 | | | $ | 15,683 | | | $ | 15,587 | |
| | | | | | | | | | | | | | | | | |
| Net Income Per Share Amounts: | | | | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.30 | | | $ | 0.34 | | | $ | 0.65 | | | $ | 0.65 | |
| Diluted net income per share | | $ | 0.30 | | | $ | 0.34 | | | $ | 0.65 | | | $ | 0.65 | |
| Dividends declared per share | | $ | 0.12 | | | $ | 0.08 | | | $ | 0.22 | | | $ | 0.16 | |
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | | | |
| HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED | | | |
| | | 2012 | | | 2011 | |
| (Dollars in thousands, except per share data) | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | $ | 36,898 | | | $ | 35,991 | | | $ | 36,156 | | | $ | 36,424 | | | $ | 36,435 | | | $ | 36,057 | |
| Interest expense | | | 5,749 | | | | 5,910 | | | | 6,256 | | | | 6,674 | | | | 6,854 | | | | 6,740 | |
| Tax-equivalent net interest income | | | 31,149 | | | | 30,081 | | | | 29,900 | | | | 29,750 | | | | 29,581 | | | | 29,317 | |
| Tax-equivalent adjustment | | | 1,340 | | | | 1,376 | | | | 1,448 | | | | 1,420 | | | | 1,427 | | | | 1,307 | |
| Provision for loan and lease losses | | | 1,585 | | | | 664 | | | | 2,282 | | | | (3,520 | ) | | | 1,151 | | | | 1,515 | |
| Non-interest income | | | 11,493 | | | | 10,974 | | | | 11,370 | | | | 11,336 | | | | 10,802 | | | | 9,992 | |
| Non-interest expenses | | | 28,858 | | | | 26,683 | | | | 27,323 | | | | 25,848 | | | | 25,838 | | | | 26,062 | |
| Income before income taxes | | | 10,859 | | | | 12,332 | | | | 10,217 | | | | 17,338 | | | | 11,967 | | | | 10,425 | |
| Income tax expense | | | 3,652 | | | | 3,856 | | | | 2,959 | | | | 6,081 | | | | 3,671 | | | | 3,134 | |
| Net income | | $ | 7,207 | | | $ | 8,476 | | | $ | 7,258 | | | $ | 11,257 | | | $ | 8,296 | | | $ | 7,291 | |
| Financial performance: | | | | | | | | | | | | | | | | | | | | | | | | |
| Pre-tax pre-provision pre-merger expense income | | $ | 14,642 | | | $ | 12,996 | | | $ | 12,499 | | | $ | 13,818 | | | $ | 13,118 | | | $ | 11,940 | |
| Return on average assets | | | 0.78 | % | | | 0.94 | % | | | 0.79 | % | | | 1.24 | % | | | 0.93 | % | | | 0.84 | % |
| Return on average common equity | | | 6.34 | % | | | 7.60 | % | | | 6.54 | % | | | 10.42 | % | | | 8.03 | % | | | 7.26 | % |
| Net interest margin | | | 3.62 | % | | | 3.56 | % | | | 3.51 | % | | | 3.53 | % | | | 3.58 | % | | | 3.65 | % |
| Efficiency ratio - GAAP(1) | | | 69.87 | % | | | 67.25 | % | | | 68.61 | % | | | 65.16 | % | | | 66.33 | % | | | 68.58 | % |
| Efficiency ratio - Non-GAAP(1) | | | 61.54 | % | | | 63.88 | % | | | 65.10 | % | | | 62.02 | % | | | 62.82 | % | | | 65.09 | % |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.30 | | | $ | 0.35 | | | $ | 0.30 | | | $ | 0.47 | | | $ | 0.34 | | | $ | 0.30 | |
| Diluted net income per share | | $ | 0.30 | | | $ | 0.35 | | | $ | 0.30 | | | $ | 0.47 | | | $ | 0.34 | | | $ | 0.30 | |
| Average fully diluted shares | | | 24,423,236 | | | | 24,180,501 | | | | 24,141,084 | | | | 24,142,137 | | | | 24,130,357 | | | | 24,115,906 | |
| Dividends declared per common share | | $ | 0.12 | | | $ | 0.10 | | | $ | 0.10 | | | $ | 0.08 | | | $ | 0.08 | | | $ | 0.08 | |
| Non-interest income: | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities gains | | $ | 90 | | | $ | 73 | | | $ | 9 | | | $ | 231 | | | $ | 32 | | | $ | 20 | |
| Net OTTI recognized in earnings | | | (8 | ) | | | (64 | ) | | | - | | | | (76 | ) | | | (43 | ) | | | (41 | ) |
| Service charges on deposit accounts | | | 2,283 | | | | 2,200 | | | | 2,394 | | | | 2,444 | | | | 2,437 | | | | 2,252 | |
| Mortgage banking activities | | | 1,288 | | | | 1,025 | | | | 824 | | | | 1,141 | | | | 808 | | | | 455 | |
| Wealth management income | | | 4,034 | | | | 4,057 | | | | 4,041 | | | | 3,937 | | | | 4,023 | | | | 3,645 | |
| Insurance agency commissions | | | 934 | | | | 1,202 | | | | 1,473 | | | | 1,044 | | | | 953 | | | | 1,180 | |
| Income from bank owned life insurance | | | 660 | | | | 634 | | | | 674 | | | | 662 | | | | 654 | | | | 646 | |
| Visa check fees | | | 962 | | | | 898 | | | | 927 | | | | 927 | | | | 949 | | | | 834 | |
| Other income | | | 1,250 | | | | 949 | | | | 1,028 | | | | 1,026 | | | | 989 | | | | 1,001 | |
| Total non-interest income | | $ | 11,493 | | | $ | 10,974 | | | $ | 11,370 | | | $ | 11,336 | | | $ | 10,802 | | | $ | 9,992 | |
| Non-interest expense: | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 15,927 | | | $ | 15,701 | | | $ | 15,433 | | | $ | 14,892 | | | $ | 14,676 | | | $ | 14,624 | |
| Occupancy expense of premises | | | 2,943 | | | | 2,846 | | | | 2,802 | | | | 2,784 | | | | 2,790 | | | | 3,143 | |
| Equipment expenses | | | 1,255 | | | | 1,190 | | | | 1,292 | | | | 1,143 | | | | 1,128 | | | | 1,142 | |
| Marketing | | | 565 | | | | 495 | | | | 727 | | | | 468 | | | | 709 | | | | 485 | |
| Outside data services | | | 1,828 | | | | 1,279 | | | | 1,092 | | | | 1,073 | | | | 999 | | | | 995 | |
| FDIC insurance | | | 653 | | | | 652 | | | | 698 | | | | 709 | | | | 736 | | | | 1,044 | |
| Amortization of intangible assets | | | 466 | | | | 461 | | | | 461 | | | | 461 | | | | 462 | | | | 461 | |
| Professional fees | | | 2,156 | | | | 1,287 | | | | 1,414 | | | | 1,314 | | | | 1,088 | | | | 1,126 | |
| Other real estate owned expenses | | | 351 | | | | 64 | | | | 604 | | | | 383 | | | | 726 | | | | 699 | |
| Other expenses | | | 2,714 | | | | 2,708 | | | | 2,800 | | | | 2,621 | | | | 2,524 | | | | 2,343 | |
| Total non-interest expense | | $ | 28,858 | | | $ | 26,683 | | | $ | 27,323 | | | $ | 25,848 | | | $ | 25,838 | | | $ | 26,062 | |
| (1) | The GAAP efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional, non-GAAP efficiency ratio excludes intangible asset amortization and merger expenses from non-interest expense; 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 | | | | | |
| | | 2012 | | | 2011 | |
| (Dollars in thousands) | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Balance sheets at quarter end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 472,426 | | | $ | 465,204 | | | $ | 448,662 | | | $ | 440,606 | | | $ | 445,605 | | | $ | 444,519 | |
| Residential construction loans | | | 130,791 | | | | 122,841 | | | | 108,699 | | | | 90,727 | | | | 81,425 | | | | 84,939 | |
| Commercial ADC loans | | | 151,620 | | | | 149,814 | | | | 160,946 | | | | 141,576 | | | | 149,215 | | | | 151,135 | |
| Commercial investor real estate loans | | | 443,237 | | | | 392,626 | | | | 371,948 | | | | 357,358 | | | | 353,749 | | | | 355,967 | |
| Commercial owner occupied real estate loans | | | 579,812 | | | | 525,022 | | | | 522,076 | | | | 519,837 | | | | 511,271 | | | | 509,215 | |
| Commercial business loans | | | 334,040 | | | | 253,827 | | | | 260,327 | | | | 226,528 | | | | 225,624 | | | | 231,448 | |
| Leasing | | | 5,618 | | | | 5,843 | | | | 6,954 | | | | 8,484 | | | | 10,200 | | | | 12,477 | |
| Consumer loans | | | 357,534 | | | | 356,215 | | | | 360,080 | | | | 360,287 | | | | 360,831 | | | | 360,349 | |
| Total loans and leases | | | 2,475,078 | | | | 2,271,392 | | | | 2,239,692 | | | | 2,145,403 | | | | 2,137,920 | | | | 2,150,049 | |
| Allowance for loan and lease losses | | | (45,265 | ) | | | (45,061 | ) | | | (49,426 | ) | | | (49,720 | ) | | | (55,246 | ) | | | (58,918 | ) |
| Investment securities | | | 1,006,743 | | | | 1,067,462 | | | | 1,164,699 | | | | 1,174,180 | | | | 1,128,589 | | | | 1,087,620 | |
| Interest-earning assets | | | 3,584,480 | | | | 3,416,136 | | | | 3,452,214 | | | | 3,370,360 | | | | 3,322,317 | | | | 3,283,819 | |
| Total assets | | | 3,855,177 | | | | 3,668,273 | | | | 3,711,370 | | | | 3,626,043 | | | | 3,612,016 | | | | 3,549,533 | |
| Noninterest-bearing demand deposits | | | 763,566 | | | | 685,770 | | | | 650,377 | | | | 643,169 | | | | 648,605 | | | | 619,905 | |
| Total deposits | | | 2,852,055 | | | | 2,681,075 | | | | 2,656,520 | | | | 2,640,324 | | | | 2,657,861 | | | | 2,599,634 | |
| Customer repurchase agreements | | | 64,779 | | | | 73,130 | | | | 63,613 | | | | 79,529 | | | | 65,214 | | | | 75,516 | |
| Total interest-bearing liabilities | | | 2,593,501 | | | | 2,508,756 | | | | 2,590,164 | | | | 2,517,180 | | | | 2,515,053 | | | | 2,495,916 | |
| Total stockholders' equity | | | 471,464 | | | | 451,917 | | | | 446,109 | | | | 440,791 | | | | 423,684 | | | | 409,076 | |
| Quarterly average balance sheets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 488,644 | | | $ | 474,149 | | | $ | 463,754 | | | $ | 453,645 | | | $ | 455,803 | | | $ | 458,329 | |
| Residential construction loans | | | 125,582 | | | | 116,630 | | | | 99,983 | | | | 89,128 | | | | 84,144 | | | | 85,891 | |
| Commercial ADC loans | | | 151,374 | | | | 159,769 | | | | 153,598 | | | | 145,835 | | | | 149,773 | | | | 149,071 | |
| Commercial investor real estate loans | | | 410,258 | | | | 377,072 | | | | 353,975 | | | | 350,925 | | | | 352,668 | | | | 340,008 | |
| Commercial owner occupied real estate loans | | | 539,590 | | | | 518,763 | | | | 521,212 | | | | 515,185 | | | | 509,273 | | | | 500,875 | |
| Commercial business loans | | | 284,271 | | | | 258,099 | | | | 231,773 | | | | 225,041 | | | | 225,646 | | | | 236,949 | |
| Leasing | | | 5,528 | | | | 6,325 | | | | 7,671 | | | | 9,269 | | | | 11,154 | | | | 14,009 | |
| Consumer loans | | | 359,008 | | | | 358,783 | | | | 361,888 | | | | 360,875 | | | | 362,098 | | | | 367,261 | |
| Total loans and leases | | | 2,364,255 | | | | 2,269,590 | | | | 2,193,854 | | | | 2,149,903 | | | | 2,150,559 | | | | 2,152,393 | |
| Investment securities | | | 1,052,502 | | | | 1,086,295 | | | | 1,173,418 | | | | 1,168,712 | | | | 1,121,325 | | | | 1,054,740 | |
| Interest-earning assets | | | 3,453,590 | | | | 3,389,843 | | | | 3,392,773 | | | | 3,355,937 | | | | 3,305,059 | | | | 3,237,556 | |
| Total assets | | | 3,708,622 | | | | 3,637,674 | | | | 3,647,291 | | | | 3,610,219 | | | | 3,566,278 | | | | 3,500,807 | |
| Noninterest-bearing demand deposits | | | 699,638 | | | | 641,477 | | | | 655,381 | | | | 631,192 | | | | 607,092 | | | | 582,441 | |
| Total deposits | | | 2,714,980 | | | | 2,642,634 | | | | 2,658,676 | | | | 2,640,729 | | | | 2,607,854 | | | | 2,548,117 | |
| Customer repurchase agreements | | | 66,674 | | | | 65,195 | | | | 74,267 | | | | 72,646 | | | | 70,313 | | | | 79,067 | |
| Total interest-bearing liabilities | | | 2,526,541 | | | | 2,523,394 | | | | 2,525,128 | | | | 2,524,728 | | | | 2,519,114 | | | | 2,485,451 | |
| Total stockholders' equity | | | 457,338 | | | | 448,406 | | | | 440,154 | | | | 428,511 | | | | 414,624 | | | | 407,007 | |
| Financial Measures | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 12.33 | % | | | 12.33 | % | | | 12.07 | % | | | 11.87 | % | | | 11.63 | % | | | 11.63 | % |
| Investment securities to earning assets | | | 28.09 | % | | | 31.25 | % | | | 33.74 | % | | | 34.84 | % | | | 33.97 | % | | | 33.12 | % |
| Loans to earnings assets | | | 69.05 | % | | | 66.49 | % | | | 64.88 | % | | | 63.66 | % | | | 64.35 | % | | | 65.47 | % |
| Loans to assets | | | 64.20 | % | | | 61.92 | % | | | 60.35 | % | | | 59.17 | % | | | 59.19 | % | | | 60.57 | % |
| Loans to deposits | | | 86.78 | % | | | 84.72 | % | | | 84.31 | % | | | 81.26 | % | | | 80.44 | % | | | 82.71 | % |
| Capital measures: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage | | | 11.21 | % | | | 11.05 | % | | | 10.84 | % | | | 10.79 | % | | | 10.64 | % | | | 10.63 | % |
| Tier 1 capital to risk-weighted assets | | | 14.12 | % | | | 14.89 | % | | | 14.57 | % | | | 14.96 | % | | | 14.75 | % | | | 14.21 | % |
| Total regulatory capital to risk-weighted assets | | | 15.37 | % | | | 16.14 | % | | | 15.83 | % | | | 16.21 | % | | | 16.01 | % | | | 15.48 | % |
| Book value per share | | $ | 18.94 | | | $ | 18.72 | | | $ | 18.52 | | | $ | 18.31 | | | $ | 17.58 | | | $ | 16.99 | |
| Outstanding shares | | | 24,886,724 | | | �� | 24,143,985 | | | | 24,091,042 | | | | 24,079,204 | | | | 24,095,123 | | | | 24,084,423 | |
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | | | | | | | | | | | | | |
| LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED | | | | | | | | | | | | | | | | | | |
| | | 2012 | | | 2011 | |
| (Dollars in thousands) | | June 30, | | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| Non-Performing Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans and leases 90 days past due: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial business | | $ | 777 | | | $ | 40 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | 342 | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Commercial investor real estate | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Commercial owner occupied real estate | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Leasing | | | 96 | | | | - | | | | 2 | | | | 63 | | | | 20 | | | | 24 | |
| Consumer | | | 5 | | | | 89 | | | | 165 | | | | 373 | | | | 337 | | | | 169 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | 91 | | | | 167 | | | | 167 | | | | 2,291 | | | | 3,820 | | | | 4,616 | |
| Residential construction | | | - | | | | - | | | | 243 | | | | - | | | | - | | | | 2,367 | |
| Total loans and leases 90 days past due | | | 1,311 | | | | 296 | | | | 577 | | | | 2,727 | | | | 4,177 | | | | 7,176 | |
| Non-accrual loans and leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial business | | | 5,264 | | | | 6,542 | | | | 7,226 | | | | 8,038 | | | | 8,288 | | | | 9,649 | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | 13,055 | | | | 14,303 | | | | 18,702 | | | | 24,481 | | | | 26,133 | | | | 28,310 | |
| Commercial investor real estate | | | 14,143 | | | | 13,893 | | | | 16,963 | | | | 16,118 | | | | 2,975 | | | | 2,519 | |
| Commercial owner occupied real estate | | | 15,437 | | | | 16,295 | | | | 14,709 | | | | 11,847 | | | | 13,019 | | | | 12,304 | |
| Leasing | | | 872 | | | | 858 | | | | 853 | | | | 956 | | | | 1,017 | | | | 1,529 | |
| Consumer | | | 1,651 | | | | 1,700 | | | | 1,786 | | | | 1,478 | | | | 590 | | | | 720 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | 2,600 | | | | 4,818 | | | | 5,722 | | | | 6,081 | | | | 6,295 | | | | 6,652 | |
| Residential construction | | | 4,333 | | | | 4,929 | | | | 5,719 | | | | 5,034 | | | | 5,701 | | | | 5,222 | |
| Total non-accrual loans and lease | | | 57,355 | | | | 63,338 | | | | 71,680 | | | | 74,033 | | | | 64,018 | | | | 66,905 | |
| Total restructured loans - accruing | | | 8,285 | | | | 8,547 | | | | 6,881 | | | | 6,088 | | | | 8,299 | | | | 14,266 | |
| Total non-performing loans and leases | | | 66,951 | | | | 72,181 | | | | 79,138 | | | | 82,848 | | | | 76,494 | | | | 88,347 | |
| Other assets and real estate owned (OREO) | | | 9,553 | | | | 4,834 | | | | 4,431 | | | | 7,938 | | | | 6,951 | | | | 7,960 | |
| Total non-performing assets | | $ | 76,504 | | | $ | 77,015 | | | $ | 83,569 | | | $ | 90,786 | | | $ | 83,445 | | | $ | 96,307 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | June 30, | | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| (Dollars in thousands) | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| Analysis of Non-accrual Loan and Lease Activity: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 63,338 | | | $ | 71,680 | | | $ | 74,033 | | | $ | 64,018 | | | $ | 66,905 | | | $ | 63,327 | |
| Non-accrual balances transferred to OREO | | | (2,131 | ) | | | - | | | | (511 | ) | | | (142 | ) | | | (791 | ) | | | (535 | ) |
| Non-accrual balances charged-off | | | (1,663 | ) | | | (4,965 | ) | | | (2,758 | ) | | | (1,375 | ) | | | (2,112 | ) | | | (2,701 | ) |
| Net payments or draws | | | (4,149 | ) | | | (5,061 | ) | | | (6,724 | ) | | | (4,839 | ) | | | (8,016 | ) | | | (2,531 | ) |
| Loans placed on non-accrual | | | 3,049 | | | | 1,809 | | | | 8,640 | | | | 17,226 | | | | 8,032 | | | | 9,526 | |
| Non-accrual loans brought current | | | (1,089 | ) | | | (125 | ) | | | (1,000 | ) | | | (855 | ) | | | - | | | | (181 | ) |
| Balance at end of period | | $ | 57,355 | | | $ | 63,338 | | | $ | 71,680 | | | $ | 74,033 | | | $ | 64,018 | | | $ | 66,905 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Analysis of Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 45,061 | | | $ | 49,426 | | | $ | 49,720 | | | $ | 55,246 | | | $ | 58,918 | | | $ | 62,135 | |
| Provision for loan and lease losses | | | 1,585 | | | | 664 | | | | 2,282 | | | | (3,520 | ) | | | 1,151 | | | | 1,515 | |
| Less loans charged-off, net of recoveries: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial business | | | (185 | ) | | | (39 | ) | | | (65 | ) | | | 397 | | | | 769 | | | | 790 | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | (59 | ) | | | 1,076 | | | | 275 | | | | 151 | | | | 253 | | | | (137 | ) |
| Commercial investor real estate | | | 140 | | | | 3,219 | | | | 335 | | | | 30 | | | | 504 | | | | (4 | ) |
| Commercial owner occupied real estate | | | 484 | | | | - | | | | 329 | | | | 45 | | | | 113 | | | | - | |
| Leasing | | | (3 | ) | | | 5 | | | | 181 | | | | 85 | | | | 455 | | | | 333 | |
| Consumer | | | 228 | | | | 348 | | | | 352 | | | | 375 | | | | 713 | | | | 1,091 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | 713 | | | | 420 | | | | 792 | | | | 751 | | | | 1,319 | | | | 2,095 | |
| Residential construction | | | 63 | | | | - | | | | 377 | | | | 172 | | | | 697 | | | | 564 | |
| Net charge-offs | | | 1,381 | | | | 5,029 | | | | 2,576 | | | | 2,006 | | | | 4,823 | | | | 4,732 | |
| Balance at end of period | | $ | 45,265 | | | $ | 45,061 | | | $ | 49,426 | | | $ | 49,720 | | | $ | 55,246 | | | $ | 58,918 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-performing loans to total loans | | | 2.71 | % | | | 3.18 | % | | | 3.53 | % | | | 3.86 | % | | | 3.58 | % | | | 4.11 | % |
| Non-performing assets to total assets | | | 1.98 | % | | | 2.10 | % | | | 2.25 | % | | | 2.50 | % | | | 2.31 | % | | | 2.71 | % |
| Allowance for loan losses to loans | | | 1.83 | % | | | 1.98 | % | | | 2.21 | % | | | 2.32 | % | | | 2.58 | % | | | 2.74 | % |
| Allowance for loan losses to non-performing loans | | | 67.61 | % | | | 62.43 | % | | | 62.46 | % | | | 60.01 | % | | | 72.22 | % | | | 66.69 | % |
| Net charge-offs in quarter to average loans | | | 0.23 | % | | | 0.89 | % | | | 0.47 | % | | | 0.37 | % | | | 0.90 | % | | | 0.89 | % |
| Sandy Spring Bancorp, Inc. and Subsidiaries | | | | | | | | | | | | | |
| CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED | | | | | | | | |
| | | Three Months Ended June 30, | |
| | | | | | 2012 | | | | | | | | | 2011 | | | | |
| | | | | | | | | 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) | | $ | 488,644 | | | $ | 5,381 | | | | 4.43 | % | | $ | 455,803 | | | $ | 5,631 | | | | 4.93 | % |
| Residential construction loans | | | 125,582 | | | | 1,190 | | | | 3.81 | | | | 84,144 | | | | 641 | | | | 3.06 | |
| Commercial ADC loans | | | 151,374 | | | | 1,922 | | | | 5.11 | | | | 149,773 | | | | 1,590 | | | | 4.26 | |
| Commercial investor real estate loans | | | 410,258 | | | | 5,616 | | | | 5.51 | | | | 352,668 | | | | 5,249 | | | | 5.94 | |
| Commercial owner occupied real estate loans | | | 539,590 | | | | 7,524 | | | | 5.68 | | | | 509,273 | | | | 7,497 | | | | 5.93 | |
| Commercial business loans | | | 284,271 | | | | 3,665 | | | | 5.04 | | | | 225,646 | | | | 2,805 | | | | 4.99 | |
| Leasing | | | 5,528 | | | | 90 | | | | 6.53 | | | | 11,154 | | | | 190 | | | | 6.82 | |
| Consumer loans | | | 359,008 | | | | 3,140 | | | | 3.54 | | | | 362,098 | | | | 3,337 | | | | 3.72 | |
| Total loans and leases(3) | | | 2,364,255 | | | | 28,528 | | | | 4.86 | | | | 2,150,559 | | | | 26,940 | | | | 5.02 | |
| Taxable securities | | | 772,668 | | | | 4,980 | | | | 2.58 | | | | 873,062 | | | | 5,983 | | | | 2.74 | |
| Tax-exempt securities(4) | | | 279,834 | | | | 3,365 | | | | 4.81 | | | | 248,263 | | | | 3,491 | | | | 5.62 | |
| Interest-bearing deposits with banks | | | 35,949 | | | | 24 | | | | 0.27 | | | | 31,863 | | | | 21 | | | | 0.26 | |
| Federal funds sold | | | 884 | | | | 1 | | | | 0.18 | | | | 1,312 | | | | - | | | | 0.13 | |
| Total interest-earning assets | | | 3,453,590 | | | | 36,898 | | | | 4.29 | | | | 3,305,059 | | | | 36,435 | | | | 4.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (47,312 | ) | | | | | | | | | | | (58,504 | ) | | | | | | | | |
| Cash and due from banks | | | 45,883 | | | | | | | | | | | | 46,341 | | | | | | | | | |
| Premises and equipment, net | | | 49,085 | | | | | | | | | | | | 49,167 | | | | | | | | | |
| Other assets | | | 207,376 | | | | | | | | | | | | 224,215 | | | | | | | | | |
| Total assets | | $ | 3,708,622 | | | | | | | | | | | $ | 3,566,278 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 384,750 | | | | 84 | | | | 0.09 | % | | $ | 343,060 | | | | 104 | | | | 0.12 | % |
| Regular savings deposits | | | 212,839 | | | | 58 | | | | 0.11 | | | | 184,688 | | | | 53 | | | | 0.11 | |
| Money market savings deposits | | | 854,920 | | | | 471 | | | | 0.22 | | | | 854,003 | | | | 1,022 | | | | 0.48 | |
| Time deposits | | | 562,833 | | | | 1,258 | | | | 0.90 | | | | 619,011 | | | | 1,808 | | | | 1.17 | |
| Total interest-bearing deposits | | | 2,015,342 | | | | 1,871 | | | | 0.37 | | | | 2,000,762 | | | | 2,987 | | | | 0.60 | |
| Other borrowings | | | 70,928 | | | | 51 | | | | 0.29 | | | | 77,731 | | | | 53 | | | | 0.28 | |
| Advances from FHLB | | | 405,271 | | | | 3,586 | | | | 3.56 | | | | 405,621 | | | | 3,590 | | | | 3.55 | |
| Subordinated debentures | | | 35,000 | | | | 241 | | | | 2.75 | | | | 35,000 | | | | 224 | | | | 2.56 | |
| Total interest-bearing liabilities | | | 2,526,541 | | | | 5,749 | | | | 0.91 | | | | 2,519,114 | | | | 6,854 | | | | 1.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 699,638 | | | | | | | | | | | | 607,092 | | | | | | | | | |
| Other liabilities | | | 25,105 | | | | | | | | | | | | 25,448 | | | | | | | | | |
| Stockholders' equity | | | 457,338 | | | | | | | | | | | | 414,624 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,708,622 | | | | | | | | | | | $ | 3,566,278 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 31,149 | | | | 3.38 | % | | | | | | $ | 29,581 | | | | 3.33 | % |
| Less: tax-equivalent adjustment | | | | | | | 1,340 | | | | | | | | | | | | 1,427 | | | | | |
| Net interest income | | | | | | $ | 29,809 | | | | | | | | | | | $ | 28,154 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.29 | % | | | | | | | | | | | 4.42 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.67 | | | | | | | | | | | | 0.84 | |
| Net interest margin | | | | | | | | | | | 3.62 | % | | | | | | | | | | | 3.58 | % |
| (1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2012 and 2011. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.3 million and $1.4 million in 2012 and 2011, 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 | | | | | | | | |
| | | Six Months Ended June 30, | |
| | | | | | 2012 | | | | | | | | | 2011 | | | | |
| | | | | | | | | 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) | | $ | 481,396 | | | $ | 10,741 | | | | 4.49 | % | | $ | 457,059 | | | $ | 11,374 | | | | 4.97 | % |
| Residential construction loans | | | 121,106 | | | | 2,291 | | | | 3.80 | | | | 85,013 | | | | 1,549 | | | | 3.68 | |
| Commercial ADC loans | | | 155,571 | | | | 3,890 | | | | 5.03 | | | | 149,424 | | | | 3,125 | | | | 4.22 | |
| Commercial investor real estate loans | | | 393,665 | | | | 10,764 | | | | 5.50 | | | | 346,410 | | | | 10,328 | | | | 5.98 | |
| Commercial owner occupied real estate loans | | | 529,176 | | | | 14,784 | | | | 5.68 | | | | 505,060 | | | | 14,926 | | | | 5.99 | |
| Commercial business loans | | | 271,185 | | | | 6,816 | | | | 4.93 | | | | 231,267 | | | | 5,648 | | | | 4.93 | |
| Leasing | | | 5,927 | | | | 193 | | | | 6.53 | | | | 12,574 | | | | 419 | | | | 6.66 | |
| Consumer loans | | | 358,896 | | | | 6,327 | | | | 3.57 | | | | 364,665 | | | | 6,683 | | | | 3.72 | |
| Total loans and leases(3) | | | 2,316,922 | | | | 55,806 | | | | 4.85 | | | | 2,151,472 | | | | 54,052 | | | | 5.06 | |
| Taxable securities | | | 791,303 | | | | 10,253 | | | | 2.59 | | | | 860,042 | | | | 11,766 | | | | 2.74 | |
| Tax-exempt securities(4) | | | 278,095 | | | | 6,784 | | | | 4.88 | | | | 228,175 | | | | 6,634 | | | | 5.81 | |
| Interest-bearing deposits with banks | | | 34,410 | | | | 45 | | | | 0.26 | | | | 30,359 | | | | 39 | | | | 0.26 | |
| Federal funds sold | | | 985 | | | | 1 | | | | 0.16 | | | | 1,447 | | | | 1 | | | | 0.15 | |
| Total interest-earning assets | | | 3,421,715 | | | | 72,889 | | | | 4.27 | | | | 3,271,495 | | | | 72,492 | | | | 4.45 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (48,439 | ) | | | | | | | | | | | (60,040 | ) | | | | | | | | |
| Cash and due from banks | | | 45,470 | | | | | | | | | | | | 44,654 | | | | | | | | | |
| Premises and equipment, net | | | 48,820 | | | | | | | | | | | | 49,178 | | | | | | | | | |
| Other assets | | | 205,582 | | | | | | | | | | | | 228,437 | | | | | | | | | |
| Total assets | | $ | 3,673,148 | | | | | | | | | | | $ | 3,533,724 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 373,740 | | | | 171 | | | | 0.09 | % | | $ | 330,470 | | | | 176 | | | | 0.11 | % |
| Regular savings deposits | | | 206,721 | | | | 104 | | | | 0.10 | | | | 180,067 | | | | 95 | | | | 0.11 | |
| Money market savings deposits | | | 857,020 | | | | 983 | | | | 0.23 | | | | 850,359 | | | | 1,956 | | | | 0.46 | |
| Time deposits | | | 570,768 | | | | 2,626 | | | | 0.93 | | | | 622,420 | | | | 3,673 | | | | 1.19 | |
| Total interest-bearing deposits | | | 2,008,250 | | | | 3,884 | | | | 0.39 | | | | 1,983,316 | | | | 5,900 | | | | 0.60 | |
| Other borrowings | | | 76,403 | | | | 112 | | | | 0.29 | | | | 78,395 | | | | 106 | | | | 0.27 | |
| Advances from FHLB | | | 405,315 | | | | 7,173 | | | | 3.56 | | | | 405,665 | | | | 7,141 | | | | 3.55 | |
| Subordinated debentures | | | 35,000 | | | | 490 | | | | 2.80 | | | | 35,000 | | | | 447 | | | | 2.55 | |
| Total interest-bearing liabilities | | | 2,524,968 | | | | 11,659 | | | | 0.93 | | | | 2,502,376 | | | | 13,594 | | | | 1.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 670,557 | | | | | | | | | | | | 594,835 | | | | | | | | | |
| Other liabilities | | | 24,752 | | | | | | | | | | | | 25,676 | | | | | | | | | |
| Stockholders' equity | | | 452,871 | | | | | | | | | | | | 410,837 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,673,148 | | | | | | | | | | | $ | 3,533,724 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 61,230 | | | | 3.34 | % | | | | | | $ | 58,898 | | | | 3.35 | % |
| Less: tax-equivalent adjustment | | | | | | | 2,716 | | | | | | | | | | | | 2,734 | | | | | |
| Net interest income | | | | | | $ | 58,514 | | | | | | | | | | | $ | 56,164 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.27 | % | | | | | | | | | | | 4.45 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.68 | | | | | | | | | | | | 0.83 | |
| Net interest margin | | | | | | | | | | | 3.59 | % | | | | | | | | | | | 3.62 | % |
| (1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2012 and 2011. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $2.7 million and $2.7 million in 2012 and 2011, 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. |
