| News release |
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS SECOND QUARTER NET INCOME OF
$12.1 MILLION, AN INCREASE OF 69% OVER PRIOR YEAR
OLNEY, MARYLAND, July 18, 2013 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the second quarter of 2013 of $12.1 million ($0.49 per diluted share) compared to net income of $7.2 million ($0.30 per diluted share) for the second quarter of 2012 and net income of $10.6 million ($0.42 per diluted share) for the first quarter of 2013.
Net income for the six-month period ended June 30, 2013 totaled $22.7 million ($0.91 per diluted share) compared to net income of $15.7 million ($0.65 per diluted share) for the prior year period, an increase of 45%.
“We are pleased to report that we maintained our strong earnings momentum during the second quarter. The primary drivers of these results were continued improvement in credit quality metrics due to loan recoveries combined with growth in non-interest income, primarily from our wealth management and insurance operations, and lower non-interest expenses,” said Daniel J. Schrider, President and Chief Executive Officer.
“The credit to our provision for loan and lease losses for the quarter reflects recoveries from loan workouts and is a product of our aggressive efforts to address problem loans early in the current credit cycle.
“While loan growth has been especially challenging due to the state of the economy and uncertainty over the timing of reductions in the Federal Reserve’s monthly securities purchases, we have worked to limit the decline in our net interest margin through disciplined management of our funding costs,” said Schrider.
Second Quarter Highlights:
| · | Pre-tax pre-provision income, a non-GAAP measure, was $15.6 million for the second quarter of 2013, a 7% increase over the second quarter of 2012 and a 2% decrease compared to the first quarter of 2013. |
| · | The provision for loan and lease losses for the second quarter of 2013 was a credit of $2.9 million compared to a charge of $1.6 million for the second quarter of 2012 and a charge of $0.1 million for the first quarter of 2013. This improvement in the provision was due to a decline in historical net charge-offs, a lower migration of new problem loans into non-performing status, and loan recoveries during the quarter. |
| · | Non-performing loans decreased to $46.2 million at June 30, 2013 compared to $64.5 million at June 30, 2012 and $49.5 million at March 31, 2013. The coverage ratio of the allowance for loan and lease losses to non-performing loans was 84% at June 30, 2013 compared to a coverage ratio of 70% at June 30, 2012 and 83% at March 31, 2013. |
| · | The net interest margin was 3.51% for the second quarter of 2013, compared to 3.62% for the second quarter of 2012 and 3.59% for the first quarter of 2013. The decrease in the margin was due primarily to the decline in the yield on a higher level of earning assets which more than offset the lower cost of deposits and borrowings. |
| · | Non-interest income increased 6% for the quarter compared to the prior year quarter and decreased 2% compared to the first quarter of 2013. The increase over the prior year quarter was due primarily to growth in income from wealth management, insurance agency commissions and other non-interest income. The decrease compared to the first quarter of 2013 was due primarily to a decline in income from mortgage banking and other non-interest income. |
| · | Total loans increased 5% compared to the second quarter of 2012 and 2% compared to the first quarter of 2013 due primarily to organic loan growth in the commercial investor real estate and residential mortgage portfolios. |
Review of Balance Sheet and Credit Quality
Total assets increased 6% to $4.1 billion at June 30, 2013 as compared to June 30, 2012. Total loans and leases increased 5% to $2.6 billion compared to the prior year due primarily to the growth in the specific loan portfolios mentioned above.
Customer funding sources, which include deposits and other short-term borrowings from customers, increased 2% compared to June 30, 2012. This increase was due primarily to a 15% increase in noninterest-bearing and interest-bearing checking account balances. The Company considers the growth in checking accounts to be an important performance metric as such accounts typically are the primary drivers of growth in multiple product banking relationships with clients. Certificates of deposit declined 19% and FHLB advances increased 33% at June 30, 2013 compared to balances at June 30, 2012, as the Company managed its funding mix to take advantage of current low interest rates to maintain the net interest margin.
Tangible common equity totaled $401.7 million at June 30, 2013 compared to $371.0 million at June 30, 2012 resulting in an increase in the ratio of tangible common equity to tangible assets from 9.84% at June 30, 2012 to 10.08% at June 30, 2013. This increase was due primarily to net income earned during the period. At June 30, 2013, the Company had a total risk-based capital ratio of 15.55%, a tier 1 risk-based capital ratio of 14.30% and a tier 1 leverage ratio of 11.28%.
Non-performing loans totaled $46.2 million at June 30, 2013 compared to $64.5 million at June 30, 2012 and $49.5 million at March 31, 2013. Overall credit quality continued to improve due to the resolution of existing problem credits and limited migration of new credits to non-performing status.
Loan charge-offs, net of recoveries, totaled $0.6 million in net recoveries for the second quarter of 2013 compared to net charge-offs of $1.4 million for the second quarter of 2012 and net charge-offs of $1.8 million for the first quarter of 2013. This improvement for the second quarter of 2013 compared to the prior year quarter was due primarily to recoveries on existing problem credits and reduced charge-offs in the current quarter due to lower non-performing loans. The allowance for loan and lease losses represented 1.50% of outstanding loans and leases and 84% of non-performing loans at June 30, 2013 compared to 1.83% of outstanding loans and leases and 70% of non-performing loans at June 30, 2012 and 1.61% of outstanding loans and leases and 83% of non-performing loans at March 31, 2013. 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 2013 increased 4% compared to the second quarter of 2012 due to an increase in average interest-earning assets and lower funding costs which more than offset the decline in asset yields. The Company’s funding costs declined due to a lower cost deposit mix and the restructuring of $170 million in Federal Home Loan Bank advances during the fourth quarter of 2012 and the first six months of 2013. The net interest margin decreased to 3.51% for the second quarter of 2013 compared to 3.62% for the second quarter of 2012 due to lower yields on a higher amount of interest-earning assets.
The provision for loan and lease losses was a credit of $2.9 million for the second quarter of 2013 compared to a charge of $1.6 million for the second quarter of 2012 and a charge of $0.1 million for the first quarter of 2013. The decrease in the provision for the second quarter of 2013 compared to both the second quarter of 2012 and the first quarter of 2013 was due primarily to a decline in historical losses, recoveries during the period and a lower migration of new problem loans into non-performing status.
Non-interest income increased 6% to $12.2 million for the second quarter of 2013 compared to $11.5 million for the second quarter of 2012. This increase was driven by a 12% increase in wealth management income due to higher assets under management. In addition, other non-interest income increased 20% due to gains on sales and dispositions of loans.
Non-interest expenses decreased 5% to $27.5 million for the second quarter of 2013 compared to $28.9 million in the second quarter of 2012. This decrease was driven primarily by declines in outside data services and other non-interest expenses due to merger expenses recorded in the second quarter of 2012 relating to the CommerceFirst acquisition. The non-GAAP efficiency ratio improved to 60.92% for the second quarter of 2013 compared to 61.55% for the second quarter of 2012.
Net interest income for the first six months of 2013 increased 6% compared to the second quarter of 2012 due to an increase in average interest-earning assets and lower funding costs. The net interest margin decreased to 3.55% for the first six months of 2013 compared to 3.59% for the first six months of 2012 due largely to the factors cited previously with respect to the second quarter of 2013.
The provision for loan and lease losses was a credit of $2.8 million for the first six months of 2013 compared to a charge of $2.2 million for first six months of 2012. The decrease in the provision for the period was due primarily to a decline in historical losses, a lower migration of new problem loans into non-performing status, and loan recoveries during the period.
Non-interest income increased 10% to $24.6 million for the first six months of 2013 compared to $22.5 million for the first six months of 2012. This increase was driven by a 19% increase in income from mortgage banking activities due to higher loan origination volumes. In addition, wealth management income increased 6% due to higher assets under management while insurance agency commissions increased 12% due to higher revenues on commercial and physicians liability lines. Other non-interest income increased 50% due to gains on sales and dispositions of loans and a non-recurring legal settlement.
Non-interest expenses decreased to $55.3 million for the first six months of 2013 compared to $55.5 million in the first six months of 2012. This decrease was driven primarily by declines in outside data services and other noninterest expenses which were due to merger expenses from the CommerceFirst acquisition recorded in the second quarter of 2012. These decreases were somewhat offset by an increase in salaries and benefits expenses due to additional staff and higher incentive compensation. The non-GAAP efficiency ratio improved to 60.86% for the first six months of 2013 compared to 62.25% for the first six months of 2012.
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 1-888-317-6016. 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 19, 2013. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10030473.
About Sandy Spring Bancorp/Sandy Spring Bank
With $4.1 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, 2012, 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) | | 2013 | | | 2012 | | | Change | | | 2013 | | | 2012 | | | Change | |
| Results of Operations: | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 30,932 | | | $ | 29,809 | | | | 4 | % | | $ | 62,258 | | | $ | 58,514 | | | | 6 | % |
| Provision for loan and lease losses | | | (2,876 | ) | | | 1,585 | | | | - | | | | (2,798 | ) | | | 2,249 | | | | - | |
| Non-interest income | | | 12,215 | | | | 11,493 | | | | 6 | | | | 24,634 | | | | 22,467 | | | | 10 | |
| Non-interest expenses | | | 27,508 | | | | 28,858 | | | | (5 | ) | | | 55,331 | | | | 55,541 | | | | - | |
| Income before income taxes | | | 18,515 | | | | 10,859 | | | | 71 | | | | 34,359 | | | | 23,191 | | | | 48 | |
| Net income | | | 12,162 | | | | 7,207 | | | | 69 | | | | 22,720 | | | | 15,683 | | | | 45 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Pre-tax pre-provision pre-merger expense income | | $ | 15,639 | | | $ | 14,642 | | | | 7 | | | $ | 31,561 | | | $ | 28,012 | | | | 13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 1.23 | % | | | 0.78 | % | | | | | | | 1.16 | % | | | 0.86 | % | | | | |
| Return on average common equity | | | 9.98 | % | | | 6.34 | % | | | | | | | 9.42 | % | | | 6.96 | % | | | | |
| Net interest margin | | | 3.51 | % | | | 3.62 | % | | | | | | | 3.55 | % | | | 3.59 | % | | | | |
| Efficiency ratio - GAAP basis(1) | | | 63.75 | % | | | 69.87 | % | | | | | | | 63.68 | % | | | 68.59 | % | | | | |
| Efficiency ratio - Non-GAAP basis(1) | | | 60.92 | % | | | 61.55 | % | | | | | | | 60.86 | % | | | 62.25 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income | | $ | 0.49 | | | $ | 0.30 | | | | 63 | % | | $ | 0.91 | | | $ | 0.65 | | | | 40 | % |
| Diluted net income | | $ | 0.49 | | | $ | 0.30 | | | | 63 | | | $ | 0.91 | | | $ | 0.65 | | | | 40 | |
| Average fully diluted shares | | | 25,009,092 | | | | 24,423,236 | | | | 2 | | | | 25,006,161 | | | | 24,303,095 | | | | 3 | |
| Dividends declared per share | | $ | 0.16 | | | $ | 0.12 | | | | 33 | | | $ | 0.30 | | | $ | 0.22 | | | | 36 | |
| Book value per share | | | 19.45 | | | | 18.94 | | | | 3 | | | | 19.45 | | | | 18.94 | | | | 3 | |
| Tangible book value per share | | | 16.09 | | | | 14.91 | | | | 8 | | | | 16.09 | | | | 14.91 | | | | 8 | |
| Outstanding shares | | | 24,967,558 | | | | 24,886,724 | | | | - | | | | 24,967,558 | | | | 24,886,724 | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Condition at period-end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities | | $ | 1,102,209 | | | $ | 1,006,743 | | | | 9 | % | | $ | 1,102,209 | | | $ | 1,006,743 | | | | 9 | % |
| Loans and leases | | | 2,605,458 | | | | 2,475,078 | | | | 5 | | | | 2,605,458 | | | | 2,475,078 | | | | 5 | |
| Interest-earning assets | | | 3,802,682 | | | | 3,584,480 | | | | 6 | | | | 3,802,682 | | | | 3,584,480 | | | | 6 | |
| Assets | | | 4,072,617 | | | | 3,855,177 | | | | 6 | | | | 4,072,617 | | | | 3,855,177 | | | | 6 | |
| Deposits | | | 2,926,650 | | | | 2,852,055 | | | | 3 | | | | 2,926,650 | | | | 2,852,055 | | | | 3 | |
| Interest-bearing liabilities | | | 2,678,490 | | | | 2,593,501 | | | | 3 | | | | 2,678,490 | | | | 2,593,501 | | | | 3 | |
| Stockholders' equity | | | 485,643 | | | | 471,464 | | | | 3 | | | | 485,643 | | | | 471,464 | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage | | | 11.28 | % | | | 11.21 | % | | | | | | | 11.28 | % | | | 11.21 | % | | | | |
| Tier 1 capital to risk-weighted assets | | | 14.30 | % | | | 14.12 | % | | | | | | | 14.30 | % | | | 14.12 | % | | | | |
| Total regulatory capital to risk-weighted assets | | | 15.55 | % | | | 15.37 | % | | | | | | | 15.55 | % | | | 15.37 | % | | | | |
| Tangible common equity to tangible assets(2) | | | 10.08 | % | | | 9.84 | % | | | | | | | 10.08 | % | | | 9.84 | % | | | | |
| Average equity to average assets | | | 12.35 | % | | | 12.33 | % | | | | | | | 12.30 | % | | | 12.33 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Credit quality ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses to loans and leases | | | 1.50 | % | | | 1.83 | % | | | | | | | 1.50 | % | | | 1.83 | % | | | | |
| Non-performing loans to total loans | | | 1.77 | % | | | 2.60 | % | | | | | | | 1.77 | % | | | 2.60 | % | | | | |
| Non-performing assets to total assets | | | 1.25 | % | | | 1.92 | % | | | | | | | 1.25 | % | | | 1.92 | % | | | | |
| Allowance for loan and lease losses to non-performing loans | | | 84.46 | % | | | 70.23 | % | | | | | | | 84.46 | % | | | 70.23 | % | | | | |
| Annualized net charge-offs to average loans and leases(3) | | | (0.10 | )% | | | 0.23 | % | | | | | | | 0.09 | % | | | 0.89 | % | | | | |
| (1) | The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional eficiency ratio - non-GAAP basis excludes intangible asset amortization and merger expenses from non-interest expense; securities gains (losses) from non-interest income; OTTI; and 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) | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| Pre-tax pre-provision pre-merger expense income: | | | | | | | | | | | | | | | | |
| Net income | | $ | 12,162 | | | $ | 7,207 | | | $ | 22,720 | | | $ | 15,683 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Merger expenses | | | - | | | | 2,198 | | | | - | | | | 2,572 | |
| Income taxes | | | 6,353 | | | | 3,652 | | | | 11,639 | | | | 7,508 | |
| Provision for loan and lease losses | | | (2,876 | ) | | | 1,585 | | | | (2,798 | ) | | | 2,249 | |
| Pre-tax pre-provision pre-merger expense income | | $ | 15,639 | | | $ | 14,642 | | | $ | 31,561 | | | $ | 28,012 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - GAAP basis: | | | | | | | | | | | | | | | | |
| Non-interest expenses | | $ | 27,508 | | | $ | 28,858 | | | $ | 55,331 | | | $ | 55,541 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus non-interest income | | $ | 43,147 | | | $ | 41,302 | | | $ | 86,892 | | | $ | 80,981 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - GAAP basis | | | 63.75 | % | | | 69.87 | % | | | 63.68 | % | | | 68.59 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - Non-GAAP basis: | | | | | | | | | | | | | | | | |
| Non-interest expenses | | $ | 27,508 | | | $ | 28,858 | | | $ | 55,331 | | | $ | 55,541 | |
| Less non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 461 | | | | 466 | | | | 922 | | | | 927 | |
| Merger expenses | | | - | | | | 2,198 | | | | - | | | | 2,572 | |
| Non-interest expenses - as adjusted | | $ | 27,047 | | | $ | 26,194 | | | $ | 54,409 | | | $ | 52,042 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus non-interest income | | $ | 43,147 | | | $ | 41,302 | | | $ | 86,892 | | | $ | 80,981 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Tax-equivalent income | | | 1,312 | | | | 1,340 | | | | 2,623 | | | | 2,716 | |
| Less non-GAAP adjustments: | | | | | | | | | | | | | | | | |
| Securities gains | | | 62 | | | | 90 | | | | 118 | | | | 163 | |
| OTTI recognized in earnings | | | - | | | | (8 | ) | | | - | | | | (72 | ) |
| Net interest income plus non-interest income - as adjusted | | $ | 44,397 | | | $ | 42,560 | | | $ | 89,397 | | | $ | 83,606 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - Non-GAAP basis | | | 60.92 | % | | | 61.55 | % | | | 60.86 | % | | | 62.25 | % |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio: | | | | | | | | | | | | | | | | |
| Total stockholders' equity | | $ | 485,643 | | | $ | 471,464 | | | $ | 485,643 | | | $ | 471,464 | |
| Accumulated other comprehensive loss | | | 2,425 | | | | (14,577 | ) | | | 2,425 | | | | (14,577 | ) |
| Goodwill | | | (84,171 | ) | | | (81,892 | ) | | | (84,171 | ) | | | (81,892 | ) |
| Other intangible assets, net | | | (2,241 | ) | | | (4,017 | ) | | | (2,241 | ) | | | (4,017 | ) |
| Tangible common equity | | $ | 401,656 | | | $ | 370,978 | | | $ | 401,656 | | | $ | 370,978 | |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | 4,072,617 | | | $ | 3,855,177 | | | $ | 4,072,617 | | | $ | 3,855,177 | |
| Goodwill | | | (84,171 | ) | | | (81,892 | ) | | | (84,171 | ) | | | (81,892 | ) |
| Other intangible assets, net | | | (2,241 | ) | | | (4,017 | ) | | | (2,241 | ) | | | (4,017 | ) |
| Tangible assets | | $ | 3,986,205 | | | $ | 3,769,268 | | | $ | 3,986,205 | | | $ | 3,769,268 | |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio | | | 10.08 | % | | | 9.84 | % | | | 10.08 | % | | | 9.84 | % |
| | | | | | | | | | | | | | | | | |
| Outstanding common shares | | | 24,967,558 | | | | 24,886,724 | | | | 24,967,558 | | | | 24,886,724 | |
| Tangible book value per common share | | $ | 16.09 | | | $ | 14.91 | | | $ | 16.09 | | | $ | 14.91 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
| | | June 30, | | | December 31, | | | June 30, | |
| (Dollars in thousands) | | 2013 | | | 2012 | | | 2012 | |
| Assets | | | | | | | | | | | | |
| Cash and due from banks | | $ | 41,525 | | | $ | 59,540 | | | $ | 46,002 | |
| Federal funds sold | | | 475 | | | | 466 | | | | 467 | |
| Interest-bearing deposits with banks | | | 65,507 | | | | 26,400 | | | | 76,365 | |
| Cash and cash equivalents | | | 107,507 | | | | 86,406 | | | | 122,834 | |
| Residential mortgage loans held for sale (at fair value) | | | 29,033 | | | | 36,149 | | | | 25,827 | |
| Investments available-for-sale (at fair value) | | | 838,440 | | | | 825,582 | | | | 808,881 | |
| Investments held-to-maturity -- fair value of $220,838, $222,024 and $169,396 | | | | | | | | | | | | |
| at June 30, 2013, December 31, 2012 and June 30, 2012, respectively | | | 226,457 | | | | 215,814 | | | | 164,846 | |
| Other equity securities | | | 37,312 | | | | 33,636 | | | | 33,016 | |
| Total loans and leases | | | 2,605,458 | | | | 2,531,128 | | | | 2,475,078 | |
| Less: allowance for loan and lease losses | | | (39,015 | ) | | | (42,957 | ) | | | (45,265 | ) |
| Net loans and leases | | | 2,566,443 | | | | 2,488,171 | | | | 2,429,813 | |
| Premises and equipment, net | | | 46,901 | | | | 48,326 | | | | 49,240 | |
| Other real estate owned | | | 4,831 | | | | 5,926 | | | | 9,553 | |
| Accrued interest receivable | | | 13,071 | | | | 12,392 | | | | 13,456 | |
| Goodwill | | | 84,171 | | | | 84,808 | | | | 81,892 | |
| Other intangible assets, net | | | 2,241 | | | | 3,163 | | | | 4,017 | |
| Other assets | | | 116,210 | | | | 114,833 | | | | 111,802 | |
| Total assets | | $ | 4,072,617 | | | $ | 3,955,206 | | | $ | 3,855,177 | |
| | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 877,891 | | | $ | 847,415 | | | $ | 763,566 | |
| Interest-bearing deposits | | | 2,048,759 | | | | 2,065,619 | | | | 2,088,489 | |
| Total deposits | | | 2,926,650 | | | | 2,913,034 | | | | 2,852,055 | |
| Securities sold under retail repurchase agreements and federal funds purchased | | | 54,731 | | | | 86,929 | | | | 64,779 | |
| Advances from FHLB | | | 540,000 | | | | 405,058 | | | | 405,233 | |
| Subordinated debentures | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Accrued interest payable and other liabilities | | | 30,593 | | | | 31,673 | | | | 26,646 | |
| Total liabilities | | | 3,586,974 | | | | 3,471,694 | | | | 3,383,713 | |
| | | | | | | | | | | | | |
| Stockholders' Equity | | | | | | | | | | | | |
| Common stock -- par value $1.00; shares authorized 50,000,000; shares issued | | | | | | | | | | | | |
| and outstanding 24,967,558, 24,905,392 and 24,886,724 at June 30, 2013, | | | | | | | | | | | | |
| December 31, 2012 and June 30, 2012, respectively | | | 24,968 | | | | 24,905 | | | | 24,887 | |
| Additional paid in capital | | | 192,327 | | | | 191,689 | | | | 190,733 | |
| Retained earnings | | | 270,773 | | | | 255,606 | | | | 241,267 | |
| Accumulated other comprehensive income (loss) | | | (2,425 | ) | | | 11,312 | | | | 14,577 | |
| Total stockholders' equity | | | 485,643 | | | | 483,512 | | | | 471,464 | |
| Total liabilities and stockholders' equity | | $ | 4,072,617 | | | $ | 3,955,206 | | | $ | 3,855,177 | |
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) | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| Interest Income: | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 29,212 | | | $ | 28,338 | | | $ | 58,858 | | | $ | 55,467 | |
| Interest on loans held for sale | | | 309 | | | | 190 | | | | 662 | | | | 339 | |
| Interest on deposits with banks | | | 24 | | | | 24 | | | | 43 | | | | 45 | |
| Interest and dividends on investment securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 3,919 | | | | 4,662 | | | | 7,853 | | | | 9,605 | |
| Exempt from federal income taxes | | | 2,315 | | | | 2,343 | | | | 4,642 | | | | 4,716 | |
| Interest on federal funds sold | | | - | | | | 1 | | | | - | | | | 1 | |
| Total interest income | | | 35,779 | | | | 35,558 | | | | 72,058 | | | | 70,173 | |
| Interest Expense: | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 1,396 | | | | 1,871 | | | | 2,851 | | | | 3,884 | |
| Interest on retail repurchase agreements and federal funds purchased | | | 38 | | | | 51 | | | | 87 | | | | 112 | |
| Interest on advances from FHLB | | | 3,189 | | | | 3,586 | | | | 6,412 | | | | 7,173 | |
| Interest on subordinated debt | | | 224 | | | | 241 | | | | 450 | | | | 490 | |
| Total interest expense | | | 4,847 | | | | 5,749 | | | | 9,800 | | | | 11,659 | |
| Net interest income | | | 30,932 | | | | 29,809 | | | | 62,258 | | | | 58,514 | |
| Provision for loan and lease losses | | | (2,876 | ) | | | 1,585 | | | | (2,798 | ) | | | 2,249 | |
| Net interest income after provision for loan and lease losses | | | 33,808 | | | | 28,224 | | | | 65,056 | | | | 56,265 | |
| Non-interest Income: | | | | | | | | | | | | | | | | |
| Investment securities gains | | | 62 | | | | 90 | | | | 118 | | | | 163 | |
| Total other-than-temporary impairment ("OTTI") losses | | | - | | | | (8 | ) | | | - | | | | (72 | ) |
| Portion of OTTI losses recognized in other comprehensive income, before taxes | | | - | | | | - | | | | - | | | | - | |
| Net OTTI recognized in earnings | | | - | | | | (8 | ) | | | - | | | | (72 | ) |
| Service charges on deposit accounts | | | 2,150 | | | | 2,283 | | | | 4,219 | | | | 4,483 | |
| Mortgage banking activities | | | 1,237 | | | | 1,288 | | | | 2,764 | | | | 2,313 | |
| Wealth management income | | | 4,532 | | | | 4,034 | | | | 8,574 | | | | 8,091 | |
| Insurance agency commissions | | | 1,036 | | | | 934 | | | | 2,385 | | | | 2,136 | |
| Income from bank owned life insurance | | | 623 | | | | 660 | | | | 1,235 | | | | 1,294 | |
| Visa check fees | | | 1,079 | | | | 962 | | | | 2,036 | | | | 1,860 | |
| Other income | | | 1,496 | | | | 1,250 | | | | 3,303 | | | | 2,199 | |
| Total non-interest income | | | 12,215 | | | | 11,493 | | | | 24,634 | | | | 22,467 | |
| Non-interest Expenses: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 16,163 | | | | 15,927 | | | | 32,509 | | | | 31,628 | |
| Occupancy expense of premises | | | 2,996 | | | | 2,943 | | | | 6,178 | | | | 5,789 | |
| Equipment expenses | | | 1,227 | | | | 1,255 | | | | 2,476 | | | | 2,445 | |
| Marketing | | | 755 | | | | 565 | | | | 1,270 | | | | 1,060 | |
| Outside data services | | | 1,114 | | | | 1,828 | | | | 2,266 | | | | 3,107 | |
| FDIC insurance | | | 581 | | | | 653 | | | | 1,177 | | | | 1,305 | |
| Amortization of intangible assets | | | 461 | | | | 466 | | | | 922 | | | | 927 | |
| Other expenses | | | 4,211 | | | | 5,221 | | | | 8,533 | | | | 9,280 | |
| Total non-interest expenses | | | 27,508 | | | | 28,858 | | | | 55,331 | | | | 55,541 | |
| Income before income taxes | | | 18,515 | | | | 10,859 | | | | 34,359 | | | | 23,191 | |
| Income tax expense | | | 6,353 | | | | 3,652 | | | | 11,639 | | | | 7,508 | |
| Net income | | $ | 12,162 | | | $ | 7,207 | | | $ | 22,720 | | | $ | 15,683 | |
| | | | | | | | | | | | | | | | | |
| Net Income Per Share Amounts: | | | | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.49 | | | $ | 0.30 | | | $ | 0.91 | | | $ | 0.65 | |
| Diluted net income per share | | $ | 0.49 | | | $ | 0.30 | | | $ | 0.91 | | | $ | 0.65 | |
| Dividends declared per share | | $ | 0.16 | | | $ | 0.12 | | | $ | 0.30 | | | $ | 0.22 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
| | | 2013 | | | 2012 | |
| (Dollars in thousands, except per share data) | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | $ | 37,091 | | | $ | 37,590 | | | $ | 37,536 | | | $ | 38,819 | | | $ | 36,898 | | | $ | 35,991 | |
| Interest expense | | | 4,847 | | | | 4,953 | | | | 5,282 | | | | 5,710 | | | | 5,749 | | | | 5,910 | |
| Tax-equivalent net interest income | | | 32,244 | | | | 32,637 | | | | 32,254 | | | | 33,109 | | | | 31,149 | | | | 30,081 | |
| Tax-equivalent adjustment | | | 1,312 | | | | 1,311 | | | | 1,334 | | | | 1,324 | | | | 1,340 | | | | 1,376 | |
| Provision for loan and lease losses | | | (2,876 | ) | | | 78 | | | | 1,168 | | | | 232 | | | | 1,585 | | | | 664 | |
| Non-interest income | | | 12,215 | | | | 12,419 | | | | 12,247 | | | | 12,242 | | | | 11,493 | | | | 10,974 | |
| Non-interest expenses | | | 27,508 | | | | 27,823 | | | | 27,219 | | | | 27,167 | | | | 28,858 | | | | 26,683 | |
| Income before income taxes | | | 18,515 | | | | 15,844 | | | | 14,780 | | | | 16,628 | | | | 10,859 | | | | 12,332 | |
| Income tax expense | | | 6,353 | | | | 5,286 | | | | 4,899 | | | | 5,638 | | | | 3,652 | | | | 3,856 | |
| Net income | | $ | 12,162 | | | $ | 10,558 | | | $ | 9,881 | | | $ | 10,990 | | | $ | 7,207 | | | $ | 8,476 | |
| Financial performance: | | | | | | | | | | | | | | | | | | | | | | | | |
| Pre-tax pre-provision pre-merger expense income | | $ | 15,639 | | | $ | 15,922 | | | $ | 15,740 | | | $ | 16,996 | | | $ | 14,642 | | | $ | 13,370 | |
| Return on average assets | | | 1.23 | % | | | 1.08 | % | | | 1.01 | % | | | 1.13 | % | | | 0.78 | % | | | 0.94 | % |
| Return on average common equity | | | 9.98 | % | | | 8.85 | % | | | 8.14 | % | | | 9.22 | % | | | 6.34 | % | | | 7.60 | % |
| Net interest margin | | | 3.51 | % | | | 3.59 | % | | | 3.53 | % | | | 3.67 | % | | | 3.62 | % | | | 3.56 | % |
| Efficiency ratio - GAAP basis(1) | | | 63.75 | % | | | 63.60 | % | | | 63.06 | % | | | 61.70 | % | | | 69.87 | % | | | 67.25 | % |
| Efficiency ratio - Non-GAAP basis(1) | | | 60.92 | % | | | 60.80 | % | | | 60.54 | % | | | 58.91 | % | | | 61.54 | % | | | 62.97 | % |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.49 | | | $ | 0.42 | | | $ | 0.40 | | | $ | 0.44 | | | $ | 0.30 | | | $ | 0.35 | |
| Diluted net income per share | | $ | 0.49 | | | $ | 0.42 | | | $ | 0.40 | | | $ | 0.44 | | | $ | 0.30 | | | $ | 0.35 | |
| Average fully diluted shares | | | 25,009,092 | | | | 25,002,612 | | | | 24,971,249 | | | | 24,949,205 | | | | 24,423,236 | | | | 24,180,501 | |
| Dividends declared per common share | | $ | 0.16 | | | $ | 0.14 | | | $ | 0.14 | | | $ | 0.12 | | | $ | 0.12 | | | $ | 0.10 | |
| Non-interest income: | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities gains | | $ | 62 | | | $ | 56 | | | $ | - | | | $ | 296 | | | $ | 90 | | | $ | 73 | |
| Net OTTI recognized in earnings | | | - | | | | - | | | | (14 | ) | | | (23 | ) | | | (8 | ) | | | (64 | ) |
| Service charges on deposit accounts | | | 2,150 | | | | 2,069 | | | | 2,197 | | | | 2,230 | | | | 2,283 | | | | 2,200 | |
| Mortgage banking activities | | | 1,237 | | | | 1,527 | | | | 1,738 | | | | 1,981 | | | | 1,288 | | | | 1,025 | |
| Wealth management income | | | 4,532 | | | | 4,042 | | | | 4,000 | | | | 3,858 | | | | 4,034 | | | | 4,057 | |
| Insurance agency commissions | | | 1,036 | | | | 1,349 | | | | 1,334 | | | | 1,020 | | | | 934 | | | | 1,202 | |
| Income from bank owned life insurance | | | 623 | | | | 612 | | | | 662 | | | | 660 | | | | 660 | | | | 634 | |
| Visa check fees | | | 1,079 | | | | 957 | | | | 1,043 | | | | 984 | | | | 962 | | | | 898 | |
| Other income | | | 1,496 | | | | 1,807 | | | | 1,287 | | | | 1,236 | | | | 1,250 | | | | 949 | |
| Total non-interest income | | $ | 12,215 | | | $ | 12,419 | | | $ | 12,247 | | | $ | 12,242 | | | $ | 11,493 | | | $ | 10,974 | |
| Non-interest expense: | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 16,163 | | | $ | 16,346 | | | $ | 15,405 | | | $ | 15,476 | | | $ | 15,927 | | | $ | 15,701 | |
| Occupancy expense of premises | | | 2,996 | | | | 3,182 | | | | 3,115 | | | | 3,106 | | | | 2,943 | | | | 2,846 | |
| Equipment expenses | | | 1,227 | | | | 1,249 | | | | 1,189 | | | | 1,237 | | | | 1,255 | | | | 1,190 | |
| Marketing | | | 755 | | | | 515 | | | | 827 | | | | 764 | | | | 565 | | | | 495 | |
| Outside data services | | | 1,114 | | | | 1,152 | | | | 836 | | | | 1,076 | | | | 1,828 | | | | 1,279 | |
| FDIC insurance | | | 581 | | | | 596 | | | | 601 | | | | 667 | | | | 653 | | | | 652 | |
| Amortization of intangible assets | | | 461 | | | | 461 | | | | 478 | | | | 476 | | | | 466 | | | | 461 | |
| Professional fees | | | 1,332 | | | | 1,250 | | | | 1,584 | | | | 1,282 | | | | 2,156 | | | | 1,287 | |
| Other real estate owned expenses | | | (281 | ) | | | 37 | | | | 316 | | | | 174 | | | | 351 | | | | 64 | |
| Other expenses | | | 3,160 | | | | 3,035 | | | | 2,868 | | | | 2,909 | | | | 2,714 | | | | 2,708 | |
| Total non-interest expense | | $ | 27,508 | | | $ | 27,823 | | | $ | 27,219 | | | $ | 27,167 | | | $ | 28,858 | | | $ | 26,683 | |
| (1) | The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional, efficiency ratio - non-GAAP basis 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
| | | 2013 | | | 2012 | |
| (Dollars in thousands) | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Balance sheets at quarter end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 565,282 | | | $ | 538,346 | | | $ | 523,364 | | | $ | 499,806 | | | $ | 472,426 | | | $ | 465,204 | |
| Residential construction loans | | | 116,736 | | | | 122,698 | | | | 120,314 | | | | 128,606 | | | | 130,791 | | | | 122,841 | |
| Commercial ADC loans | | | 163,309 | | | | 150,599 | | | | 151,933 | | | | 133,007 | | | | 151,620 | | | | 149,814 | |
| Commercial investor real estate loans | | | 497,365 | | | | 487,802 | | | | 456,888 | | | | 447,536 | | | | 443,237 | | | | 392,626 | |
| Commercial owner occupied real estate loans | | | 563,258 | | | | 565,820 | | | | 571,510 | | | | 579,711 | | | | 579,812 | | | | 525,022 | |
| Commercial business loans | | | 334,979 | | | | 344,489 | | | | 346,708 | | | | 322,087 | | | | 334,040 | | | | 253,827 | |
| Leasing | | | 1,415 | | | | 1,974 | | | | 3,421 | | | | 4,233 | | | | 5,618 | | | | 5,843 | |
| Consumer loans | | | 363,114 | | | | 353,341 | | | | 356,990 | | | | 353,999 | | | | 357,534 | | | | 356,215 | |
| Total loans and leases | | | 2,605,458 | | | | 2,565,069 | | | | 2,531,128 | | | | 2,468,985 | | | | 2,475,078 | | | | 2,271,392 | |
| Allowance for loan and lease losses | | | (39,015 | ) | | | (41,246 | ) | | | (42,957 | ) | | | (42,618 | ) | | | (45,265 | ) | | | (45,061 | ) |
| Investment securities | | | 1,102,209 | | | | 1,008,693 | | | | 1,075,032 | | | | 1,074,918 | | | | 1,006,743 | | | | 1,067,462 | |
| Interest-earning assets | | | 3,802,682 | | | | 3,660,809 | | | | 3,669,175 | | | | 3,614,310 | | | | 3,584,480 | | | | 3,416,136 | |
| Total assets | | | 4,072,617 | | | | 3,932,026 | | | | 3,955,206 | | | | 3,887,427 | | | | 3,855,177 | | | | 3,668,273 | |
| Noninterest-bearing demand deposits | | | 877,891 | | | | 832,679 | | | | 847,415 | | | | 818,674 | | | | 763,566 | | | | 685,770 | |
| Total deposits | | | 2,926,650 | | | | 2,919,208 | | | | 2,913,034 | | | | 2,880,262 | | | | 2,852,055 | | | | 2,681,075 | |
| Customer repurchase agreements | | | 54,731 | | | | 50,302 | | | | 51,929 | | | | 58,306 | | | | 64,779 | | | | 73,130 | |
| Total interest-bearing liabilities | | | 2,678,490 | | | | 2,576,831 | | | | 2,592,606 | | | | 2,560,040 | | | | 2,593,501 | | | | 2,508,756 | |
| Total stockholders' equity | | | 485,643 | | | | 488,947 | | | | 483,512 | | | | 481,810 | | | | 471,464 | | | | 451,917 | |
| Quarterly average balance sheets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 579,899 | | | $ | 575,889 | | | $ | 542,095 | | | $ | 510,475 | | | $ | 488,644 | | | $ | 474,149 | |
| Residential construction loans | | | 119,197 | | | | 120,283 | | | | 125,640 | | | | 133,236 | | | | 125,582 | | | | 116,630 | |
| Commercial ADC loans | | | 160,483 | | | | 148,749 | | | | 137,679 | | | | 142,870 | | | | 151,374 | | | | 159,769 | |
| Commercial investor real estate loans | | | 485,630 | | | | 474,062 | | | | 453,074 | | | | 445,012 | | | | 410,258 | | | | 377,072 | |
| Commercial owner occupied real estate loans | | | 561,249 | | | | 567,723 | | | | 577,693 | | | | 580,994 | | | | 539,590 | | | | 518,763 | |
| Commercial business loans | | | 337,843 | | | | 347,569 | | | | 322,501 | | | | 332,364 | | | | 284,271 | | | | 258,099 | |
| Leasing | | | 1,644 | | | | 2,510 | | | | 3,773 | | | | 4,858 | | | | 5,528 | | | | 6,325 | |
| Consumer loans | | | 360,842 | | | | 357,366 | | | | 356,452 | | | | 357,135 | | | | 359,008 | | | | 358,783 | |
| Total loans and leases | | | 2,606,787 | | | | 2,594,151 | | | | 2,518,907 | | | | 2,506,945 | | | | 2,364,255 | | | | 2,269,590 | |
| Investment securities | | | 1,047,726 | | | | 1,051,769 | | | | 1,072,278 | | | | 1,038,586 | | | | 1,052,502 | | | | 1,086,295 | |
| Interest-earning assets | | | 3,692,215 | | | | 3,677,444 | | | | 3,639,605 | | | | 3,599,715 | | | | 3,453,590 | | | | 3,389,843 | |
| Total assets | | | 3,959,907 | | | | 3,946,578 | | | | 3,908,479 | | | | 3,863,951 | | | | 3,708,622 | | | | 3,637,674 | |
| Noninterest-bearing demand deposits | | | 838,502 | | | | 797,926 | | | | 824,188 | | | | 774,215 | | | | 699,638 | | | | 641,477 | |
| Total deposits | | | 2,892,704 | | | | 2,860,451 | | | | 2,891,120 | | | | 2,857,523 | | | | 2,714,980 | | | | 2,642,634 | |
| Customer repurchase agreements | | | 55,941 | | | | 52,622 | | | | 60,941 | | | | 62,693 | | | | 66,674 | | | | 65,195 | |
| Total interest-bearing liabilities | | | 2,599,704 | | | | 2,631,198 | | | | 2,571,937 | | | | 2,587,815 | | | | 2,526,541 | | | | 2,523,394 | |
| Total stockholders' equity | | | 489,014 | | | | 483,664 | | | | 482,621 | | | | 474,231 | | | | 457,338 | | | | 448,406 | |
| Financial Measures | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 12.35 | % | | | 12.26 | % | | | 12.35 | % | | | 12.27 | % | | | 12.33 | % | | | 12.33 | % |
| Investment securities to earning assets | | | 28.99 | % | | | 27.55 | % | | | 29.30 | % | | | 29.74 | % | | | 28.09 | % | | | 31.25 | % |
| Loans to earnings assets | | | 68.52 | % | | | 70.07 | % | | | 68.98 | % | | | 68.31 | % | | | 69.05 | % | | | 66.49 | % |
| Loans to assets | | | 63.98 | % | | | 65.24 | % | | | 63.99 | % | | | 63.51 | % | | | 64.20 | % | | | 61.92 | % |
| Loans to deposits | | | 89.03 | % | | | 87.87 | % | | | 86.89 | % | | | 85.72 | % | | | 86.78 | % | | | 84.72 | % |
| Capital measures: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage | | | 11.28 | % | | | 11.07 | % | | | 10.98 | % | | | 10.99 | % | | | 11.21 | % | | | 11.05 | % |
| Tier 1 capital to risk-weighted assets | | | 14.30 | % | | | 14.23 | % | | | 14.15 | % | | | 14.31 | % | | | 14.12 | % | | | 14.89 | % |
| Total regulatory capital to risk-weighted assets | | | 15.55 | % | | | 15.48 | % | | | 15.40 | % | | | 15.56 | % | | | 15.36 | % | | | 16.14 | % |
| Book value per share | | $ | 19.45 | | | $ | 19.59 | | | $ | 19.41 | | | $ | 19.35 | | | $ | 18.94 | | | $ | 18.72 | |
| Outstanding shares | | | 24,967,558 | | | | 24,954,892 | | | | 24,905,392 | | | | 24,896,136 | | | | 24,886,724 | | | | 24,143,985 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
| | | 2013 | | | 2012 | |
| (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 | | $ | 15 | | | $ | - | | | $ | 24 | | | $ | 44 | | | $ | 70 | | | $ | 40 | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | - | | | | - | | | | - | | | | - | | | | 342 | | | | - | |
| Commercial investor real estate | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Commercial owner occupied real estate | | | - | | | | - | | | | 209 | | | | - | | | | - | | | | - | |
| Leasing | | | - | | | | - | | | | - | | | | 127 | | | | 96 | | | | - | |
| Consumer | | | - | | | | 54 | | | | 14 | | | | 18 | | | | 5 | | | | 89 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | - | | | | - | | | | - | | | | 116 | | | | 91 | | | | 167 | |
| Residential construction | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total loans and leases 90 days past due | | | 15 | | | | 54 | | | | 247 | | | | 305 | | | | 604 | | | | 296 | |
| Non-accrual loans and leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial business | | | 4,483 | | | | 4,012 | | | | 4,611 | | | | 4,919 | | | | 4,583 | | | | 6,542 | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | 5,885 | | | | 5,826 | | | | 6,332 | | | | 8,957 | | | | 13,055 | | | | 14,303 | |
| Commercial investor real estate | | | 11,741 | | | | 12,353 | | | | 11,843 | | | | 12,345 | | | | 13,327 | | | | 13,893 | |
| Commercial owner occupied real estate | | | 5,413 | | | | 5,346 | | | | 13,681 | | | | 13,742 | | | | 15,146 | | | | 16,295 | |
| Leasing | | | - | | | | - | | | | 865 | | | | 834 | | | | 872 | | | | 858 | |
| Consumer | | | 2,305 | | | | 2,388 | | | | 2,410 | | | | 1,607 | | | | 1,651 | | | | 1,700 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | 5,581 | | | | 5,393 | | | | 4,681 | | | | 3,644 | | | | 2,600 | | | | 4,818 | |
| Residential construction | | | 2,558 | | | | 3,258 | | | | 3,125 | | | | 3,236 | | | | 4,333 | | | | 4,929 | |
| Total non-accrual loans and lease | | | 37,966 | | | | 38,576 | | | | 47,548 | | | | 49,284 | | | | 55,567 | | | | 63,338 | |
| Total restructured loans - accruing | | | 8,213 | | | | 10,839 | | | | 10,110 | | | | 9,277 | | | | 8,285 | | | | 8,547 | |
| Total non-performing loans and leases | | | 46,194 | | | | 49,469 | | | | 57,905 | | | | 58,866 | | | | 64,456 | | | | 72,181 | |
| Other assets and real estate owned (OREO) | | | 4,831 | | | | 5,250 | | | | 5,926 | | | | 9,291 | | | | 9,553 | | | | 4,834 | |
| Total non-performing assets | | $ | 51,025 | | | $ | 54,719 | | | $ | 63,831 | | | $ | 68,157 | | | $ | 74,009 | | | $ | 77,015 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | For the quarter ended, | |
| | | | June 30, | | | | March 31, | | | | December 31, | | | | September 30, | | | | June 30, | | | | March 31, | |
| (Dollars in thousands) | | | 2013 | | | | 2013 | | | | 2012 | | | | 2012 | | | | 2012 | | | | 2012 | |
| Analysis of Non-accrual Loan and Lease Activity: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 38,576 | | | $ | 47,548 | | | $ | 49,284 | | | $ | 55,567 | | | $ | 63,338 | | | $ | 71,680 | |
| Non-accrual balances transferred to OREO | | | (1,426 | ) | | | (92 | ) | | | (400 | ) | | | (232 | ) | | | (2,131 | ) | | | - | |
| Non-accrual balances charged-off | | | (668 | ) | | | (2,175 | ) | | | (979 | ) | | | (3,697 | ) | | | (1,663 | ) | | | (4,965 | ) |
| Net payments or draws | | | (3,560 | ) | | | (11,768 | ) | | | (3,852 | ) | | | (6,342 | ) | | | (4,149 | ) | | | (5,061 | ) |
| Loans placed on non-accrual | | | 5,044 | | | | 5,493 | | | | 5,023 | | | | 3,988 | | | | 1,261 | | | | 1,809 | |
| Non-accrual loans brought current | | | - | | | | (430 | ) | | | (1,528 | ) | | | - | | | | (1,089 | ) | | | (125 | ) |
| Balance at end of period | | $ | 37,966 | | | $ | 38,576 | | | $ | 47,548 | | | $ | 49,284 | | | $ | 55,567 | | | $ | 63,338 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Analysis of Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 41,246 | | | $ | 42,957 | | | $ | 42,618 | | | $ | 45,265 | | | $ | 45,061 | | | $ | 49,426 | |
| Provision for loan and lease losses | | | (2,876 | ) | | | 78 | | | | 1,168 | | | | 232 | | | | 1,585 | | | | 664 | |
| Less loans charged-off, net of recoveries: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial business | | | (32 | ) | | | 1,744 | | | | (76 | ) | | | (225 | ) | | | (185 | ) | | | (39 | ) |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | (1,444 | ) | | | (1,020 | ) | | | (248 | ) | | | 1,983 | | | | (59 | ) | | | 1,076 | |
| Commercial investor real estate | | | 123 | | | | 31 | | | | 110 | | | | 123 | | | | 140 | | | | 3,219 | |
| Commercial owner occupied real estate | | | 100 | | | | 81 | | | | - | | | | 653 | | | | 484 | | | | - | |
| Leasing | | | (4 | ) | | | - | | | | - | | | | (17 | ) | | | (3 | ) | | | 5 | |
| Consumer | | | 490 | | | | 508 | | | | 384 | | | | 111 | | | | 228 | | | | 348 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | 22 | | | | 447 | | | | 508 | | | | 253 | | | | 713 | | | | 420 | |
| Residential construction | | | 100 | | | | (2 | ) | | | 151 | | | | (2 | ) | | | 63 | | | | - | |
| Net charge-offs | | | (645 | ) | | | 1,789 | | | | 829 | | | | 2,879 | | | | 1,381 | | | | 5,029 | |
| Balance at end of period | | $ | 39,015 | | | $ | 41,246 | | | $ | 42,957 | | | $ | 42,618 | | | $ | 45,265 | | | $ | 45,061 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-performing loans to total loans | | | 1.77 | % | | | 1.93 | % | | | 2.29 | % | | | 2.38 | % | | | 2.60 | % | | | 3.18 | % |
| Non-performing assets to total assets | | | 1.25 | % | | | 1.39 | % | | | 1.61 | % | | | 1.75 | % | | | 1.92 | % | | | 2.10 | % |
| Allowance for loan losses to loans | | | 1.50 | % | | | 1.61 | % | | | 1.70 | % | | | 1.73 | % | | | 1.83 | % | | | 1.98 | % |
| Allowance for loan losses to non-performing loans | | | 84.46 | % | | | 83.38 | % | | | 74.18 | % | | | 72.40 | % | | | 70.23 | % | | | 62.43 | % |
| Net charge-offs in quarter to average loans | | | (0.10 | )% | | | 0.28 | % | | | 0.13 | % | | | 0.46 | % | | | 0.23 | % | | | 0.89 | % |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
| | | Six Months Ended June 30, | |
| | | 2013 | | | 2012 | |
| | | | | | | | | 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) | | $ | 577,905 | | | $ | 10,686 | | | | 3.70 | % | | $ | 481,396 | | | $ | 10,741 | | | | 4.49 | % |
| Residential construction loans | | | 119,737 | | | | 2,036 | | | | 3.43 | | | | 121,106 | | | | 2,291 | | | | 3.80 | |
| Commercial ADC loans | | | 154,648 | | | | 4,102 | | | | 5.35 | | | | 155,571 | | | | 3,890 | | | | 5.03 | |
| Commercial investor real estate loans | | | 479,878 | | | | 12,319 | | | | 5.18 | | | | 393,665 | | | | 10,764 | | | | 5.50 | |
| Commercial owner occupied real estate loans | | | 564,468 | | | | 15,103 | | | | 5.53 | | | | 529,176 | | | | 14,784 | | | | 5.68 | |
| Commercial business loans | | | 342,679 | | | | 9,042 | | | | 5.18 | | | | 271,185 | | | | 6,816 | | | | 4.93 | |
| Leasing | | | 2,075 | | | | 68 | | | | 6.53 | | | | 5,927 | | | | 193 | | | | 6.53 | |
| Consumer loans | | | 359,114 | | | | 6,164 | | | | 3.49 | | | | 358,896 | | | | 6,327 | | | | 3.57 | |
| Total loans and leases(3) | | | 2,600,504 | | | | 59,520 | | | | 4.64 | | | | 2,316,922 | | | | 55,806 | | | | 4.85 | |
| Taxable securities | | | 750,167 | | | | 8,594 | | | | 2.29 | | | | 791,303 | | | | 10,253 | | | | 2.59 | |
| Tax-exempt securities(4) | | | 299,569 | | | | 6,524 | | | | 4.36 | | | | 278,095 | | | | 6,784 | | | | 4.88 | |
| Interest-bearing deposits with banks | | | 34,156 | | | | 43 | | | | 0.25 | | | | 34,410 | | | | 45 | | | | 0.26 | |
| Federal funds sold | | | 475 | | | | - | | | | 0.22 | | | | 985 | | | | 1 | | | | 0.16 | |
| Total interest-earning assets | | | 3,684,871 | | | | 74,681 | | | | 4.08 | | | | 3,421,715 | | | | 72,889 | | | | 4.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (42,650 | ) | | | | | | | | | | | (48,439 | ) | | | | | | | | |
| Cash and due from banks | | | 46,242 | | | | | | | | | | | | 45,470 | | | | | | | | | |
| Premises and equipment, net | | | 47,832 | | | | | | | | | | | | 48,820 | | | | | | | | | |
| Other assets | | | 216,984 | | | | | | | | | | | | 205,582 | | | | | | | | | |
| Total assets | | $ | 3,953,279 | | | | | | | | | | | $ | 3,673,148 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 433,200 | | | | 183 | | | | 0.09 | % | | $ | 373,741 | | | | 171 | | | | 0.09 | % |
| Regular savings deposits | | | 237,467 | | | | 106 | | | | 0.09 | | | | 206,721 | | | | 104 | | | | 0.10 | |
| Money market savings deposits | | | 883,765 | | | | 789 | | | | 0.18 | | | | 857,020 | | | | 983 | | | | 0.23 | |
| Time deposits | | | 503,908 | | | | 1,773 | | | | 0.71 | | | | 570,768 | | | | 2,626 | | | | 0.93 | |
| Total interest-bearing deposits | | | 2,058,340 | | | | 2,851 | | | | 0.28 | | | | 2,008,250 | | | | 3,884 | | | | 0.39 | |
| Other borrowings | | | 61,132 | | | | 87 | | | | 0.29 | | | | 76,403 | | | | 112 | | | | 0.29 | |
| Advances from FHLB | | | 460,892 | | | | 6,412 | | | | 2.81 | | | | 405,315 | | | | 7,173 | | | | 3.56 | |
| Subordinated debentures | | | 35,000 | | | | 450 | | | | 2.57 | | | | 35,000 | | | | 490 | | | | 2.80 | |
| Total interest-bearing liabilities | | | 2,615,364 | | | | 9,800 | | | | 0.76 | | | | 2,524,968 | | | | 11,659 | | | | 0.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 818,326 | | | | | | | | | | | | 670,557 | | | | | | | | | |
| Other liabilities | | | 33,235 | | | | | | | | | | | | 24,752 | | | | | | | | | |
| Stockholders' equity | | | 486,354 | | | | | | | | | | | | 452,871 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,953,279 | | | | | | | | | | | $ | 3,673,148 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 64,881 | | | | 3.32 | % | | | | | | $ | 61,230 | | | | 3.34 | % |
| Less: tax-equivalent adjustment | | | | | | | 2,623 | | | | | | | | | | | | 2,716 | | | | | |
| Net interest income | | | | | | $ | 62,258 | | | | | | | | | | | $ | 58,514 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.08 | % | | | | | | | | | | | 4.27 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.53 | | | | | | | | | | | | 0.68 | |
| Net interest margin | | | | | | | | | | | 3.55 | % | | | | | | | | | | | 3.59 | % |
| (1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2013 and 2012. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $2.6 million and $2.7 million in 2013 and 2012, 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
| | | Three Months Ended June 30, | |
| | | 2013 | | | 2012 | |
| | | | | | | | | 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) | | $ | 579,899 | | | $ | 5,310 | | | | 3.68 | % | | $ | 488,644 | | | $ | 5,381 | | | | 4.43 | % |
| Residential construction loans | | | 119,197 | | | | 1,032 | | | | 3.47 | | | | 125,582 | | | | 1,190 | | | | 3.81 | |
| Commercial ADC loans | | | 160,483 | | | | 2,106 | | | | 5.26 | | | | 151,374 | | | | 1,922 | | | | 5.11 | |
| Commercial investor real estate loans | | | 485,630 | | | | 6,184 | | | | 5.11 | | | | 410,258 | | | | 5,616 | | | | 5.51 | |
| Commercial owner occupied real estate loans | | | 561,249 | | | | 7,302 | | | | 5.34 | | | | 539,590 | | | | 7,524 | | | | 5.68 | |
| Commercial business loans | | | 337,843 | | | | 4,456 | | | | 5.15 | | | | 284,271 | | | | 3,665 | | | | 5.04 | |
| Leasing | | | 1,644 | | | | 30 | | | | 7.22 | | | | 5,528 | | | | 90 | | | | 6.53 | |
| Consumer loans | | | 360,842 | | | | 3,101 | | | | 3.47 | | | | 359,008 | | | | 3,140 | | | | 3.54 | |
| Total loans and leases(3) | | | 2,606,787 | | | | 29,521 | | | | 4.57 | | | | 2,364,255 | | | | 28,528 | | | | 4.86 | |
| Taxable securities | | | 746,266 | | | | 4,289 | | | | 2.30 | | | | 772,668 | | | | 4,980 | | | | 2.58 | |
| Tax-exempt securities(4) | | | 301,460 | | | | 3,257 | | | | 4.32 | | | | 279,834 | | | | 3,365 | | | | 4.81 | |
| Interest-bearing deposits with banks | | | 37,227 | | | | 24 | | | | 0.25 | | | | 35,949 | | | | 24 | | | | 0.27 | |
| Federal funds sold | | | 475 | | | | - | | | | 0.22 | | | | 884 | | | | 1 | | | | 0.18 | |
| Total interest-earning assets | | | 3,692,215 | | | | 37,091 | | | | 4.03 | | | | 3,453,590 | | | | 36,898 | | | | 4.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (41,605 | ) | | | | | | | | | | | (47,312 | ) | | | | | | | | |
| Cash and due from banks | | | 45,603 | | | | | | | | | | | | 45,883 | | | | | | | | | |
| Premises and equipment, net | | | 47,501 | | | | | | | | | | | | 49,085 | | | | | | | | | |
| Other assets | | | 216,193 | | | | | | | | | | | | 207,376 | | | | | | | | | |
| Total assets | | $ | 3,959,907 | | | | | | | | | | | $ | 3,708,622 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 442,808 | | | | 91 | | | | 0.08 | % | | $ | 384,750 | | | | 84 | | | | 0.09 | % |
| Regular savings deposits | | | 240,410 | | | | 58 | | | | 0.10 | | | | 212,839 | | | | 58 | | | | 0.11 | |
| Money market savings deposits | | | 875,282 | | | | 378 | | | | 0.17 | | | | 854,920 | | | | 471 | | | | 0.22 | |
| Time deposits | | | 495,702 | | | | 869 | | | | 0.70 | | | | 562,833 | | | | 1,258 | | | | 0.90 | |
| Total interest-bearing deposits | | | 2,054,202 | | | | 1,396 | | | | 0.27 | | | | 2,015,342 | | | | 1,871 | | | | 0.37 | |
| Other borrowings | | | 56,711 | | | | 38 | | | | 0.27 | | | | 70,928 | | | | 51 | | | | 0.29 | |
| Advances from FHLB | | | 453,791 | | | | 3,189 | | | | 2.82 | | | | 405,271 | | | | 3,586 | | | | 3.56 | |
| Subordinated debentures | | | 35,000 | | | | 224 | | | | 2.56 | | | | 35,000 | | | | 241 | | | | 2.75 | |
| Total interest-bearing liabilities | | | 2,599,704 | | | | 4,847 | | | | 0.75 | | | | 2,526,541 | | | | 5,749 | | | | 0.91 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 838,502 | | | | | | | | | | | | 699,638 | | | | | | | | | |
| Other liabilities | | | 32,686 | | | | | | | | | | | | 25,105 | | | | | | | | | |
| Stockholders' equity | | | 489,014 | | | | | | | | | | | | 457,338 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 3,959,906 | | | | | | | | | | | $ | 3,708,622 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 32,244 | | | | 3.28 | % | | | | | | $ | 31,149 | | | | 3.38 | % |
| Less: tax-equivalent adjustment | | | | | | | 1,312 | | | | | | | | | | | | 1,340 | | | | | |
| Net interest income | | | | | | $ | 30,932 | | | | | | | | | | | $ | 29,809 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 4.03 | % | | | | | | | | | | | 4.29 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.52 | | | | | | | | | | | | 0.67 | |
| Net interest margin | | | | | | | | | | | 3.51 | % | | | | | | | | | | | 3.62 | % |
| (1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2013 and 2012. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.3 million and $1.3 million in 2013 and 2012, 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. |
