 | News release |
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS NET INCOME OF $7.0 MILLION FOR THE SECOND QUARTER
OLNEY, MARYLAND, July 17, 2014 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today reported net income for the second quarter of 2014 of $7.0 million ($0.28 per diluted share) compared to net income of $12.2 million ($0.49 per diluted share) for the second quarter of 2013 and net income of $10.9 million ($0.43 per diluted share) for the first quarter of 2014.
For the six-months ended June 30, 2014, net income was $17.9 million ($0.71 per diluted share) compared to net income of $22.7 million ($0.91 per diluted share) for the same period of the prior year.
“Exclusive of the impact of the litigation expenses incurred during the second quarter, our pre-tax pre-provision income increased from the prior year. This core performance was evidenced in a stable margin, controlled expense growth and continued strength in our wealth management and card based businesses,” said Daniel J. Schrider, President and Chief Executive Officer.
“Our underlying performance in the second quarter was also driven by the impact of balanced loan growth and the resulting increase in interest income. This more than offset the decline in mortgage banking revenues as originations were lower than prior year levels,” said Schrider.
Second Quarter Highlights:
| · | Total loans increased 12% compared to the second quarter of 2013 and 3% compared to the first quarter of 2014 due to significant loan growth in the commercial investor real estate portfolio and due to the retention of a greater portion of mortgage originations over the past year. |
| · | The provision for loan and lease losses for the second quarter of 2014 was a charge of $0.2 million compared to a credit of $2.9 million for the second quarter of 2013 and a credit of $1.0 million for the first quarter of 2014. The current quarter’s provision reflects the stability in the credit quality of the loan portfolio as outstanding loans continued to grow from the prior year. |
| · | The net interest margin was 3.48% for the second quarter of 2014, compared to 3.51% for the second quarter of 2013 and 3.47% for the first quarter of 2014. The decline compared to the prior year was the result of declining loan yields during the period that exceeded the reduction in rates paid on interest-bearing liabilities. |
| · | Non-interest income decreased 4% for the quarter compared to the prior year quarter due to the decline in income from mortgage banking caused by a significantly lower volume of saleable mortgage loan originations. During this same period wealth management income increased 5%. |
| · | Non-performing loans totaled $41.7 million at June 30, 2014 compared to $46.2 million at June 30, 2013 and $38.7 million at March 31, 2014. The coverage ratio of the allowance for loan and lease losses to non-performing loans was 91% at June 30, 2014 compared to a coverage ratio of 84% at June 30, 2013 and 98% at March 31, 2014. |
| · | Litigation expenses of $6.1 million were accrued during the quarter as a result of an adverse jury verdict associated with the actions of a former employee of CommerceFirst Bank which was acquired in 2012. |
Review of Balance Sheet and Credit Quality
Total assets grew 4% to $4.2 billion at June 30, 2014 compared to $4.1 billion at June 30, 2013. This growth was driven by a 12% increase in the loan portfolio as total loans and leases ended the period at $2.9 billion. As previously noted, solid increases occurred in the residential mortgage and commercial investor real estate portfolios.
Deposits and certain other short-term borrowings that comprise all the funding sources derived from customers, increased 4% compared to June 30, 2013. An important performance metric involves checking accounts as they are considered to be primary drivers of growth in multiple-product banking relationships with clients. At June 30, 2014, the combined noninterest-bearing and interest-bearing checking account balances increased 10% compared to the balances at June 30, 2013.
Tangible common equity totaled $427.1 million at June 30, 2014 compared to $401.7 million at June 30, 2013, resulting in an increase in the ratio of tangible common equity to tangible assets to 10.29% at June 30, 2014 from 10.08% at June 30, 2013. This increase in tangible common equity occurred during the period that dividends per common share were raised from $0.30 per share to $0.36 per common share, a 20% increase. At June 30, 2014, the Company had a total risk-based capital ratio of 15.66%, a tier 1 risk-based capital ratio of 14.48% and a tier 1 leverage ratio of 11.37%.
Non-performing loans totaled $41.7 million at June 30, 2014 compared to $46.2 million at June 30, 2013 and $38.7 million at March 31, 2014. The level of non-performing loans to total loans decreased to 1.43% at June 30, 2014 compared to 1.77% at June 30, 2013. This improvement in credit quality has occurred concurrent with the year-over-year 12% growth in the loan portfolio.
Net loan charge-offs totaled $0.2 million for the second quarter of 2014 compared to net recoveries of $0.6 million for the second quarter of 2013 and net loan recoveries of $0.2 million for the first quarter of 2014. The allowance for loan and lease losses represented 1.30% of outstanding loans and leases and 91% of non-performing loans at June 30, 2014 compared to 1.50% of outstanding loans and leases and 84% of non-performing loans at June 30, 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 2014 increased 4% compared to the second quarter of 2013. This increase was due to the impact of the growth in average loans and a reduction in funding costs despite a modest decline in loan yields. This activity resulted in a net interest margin of 3.48% for the second quarter of 2014 compared to 3.51% for the second quarter of 2013.
The provision for loan and lease losses was $0.2 million for the second quarter of 2014 compared to a credit of $2.9 million for the second quarter of 2013 and a credit of $1.0 million for the first quarter of 2014. The current quarter’s provision reflects the stability in the credit quality of the loan portfolio as outstanding loans continued to grow from the prior year. The credits to the provision for loan and lease losses in prior quarters reflected the impact of declining charge-offs and improved credit metrics in the loan portfolio over the past 12 months that more than offset the effects of the loan growth during the past year.
Non-interest income decreased 4% to $11.7 million for the second quarter of 2014 compared to $12.2 million for the second quarter of 2013. This decrease was driven by a reduction in mortgage banking income due primarily to lower mortgage origination volumes and a decline in client refinancing activity. This decrease was partially offset by a 5% increase in wealth management income due to higher assets under management.
Non-interest expenses increased 24% to $34.1 million for the second quarter of 2014 compared to $27.5 million in the second quarter of 2013. The current quarter included $6.1 million in the previously mentioned litigation expenses. Exclusive of these costs, non-interest expense would have been $28.0 million, an increase of 2% from the second quarter of 2013. This increase was driven by increased staffing costs. The non-GAAP efficiency ratio was 61.30% for the second quarter of 2014 compared to 60.92% for the second quarter of 2013.
Net interest income for the first six months of 2014 increased 3% compared to the first six months of 2013 due to an increase in average loans and lower funding costs. The net interest margin decreased to 3.48% for the first six months of 2014 compared to 3.55% for the first six months of 2013 due largely to the factors cited previously with respect to the second quarter of 2014.
The provision for loan and lease losses was a credit of $0.8 million for the first six months of 2014 compared to a credit of $2.8 million for first six months of 2013. The change in the provision for the period was driven by a decline in historical losses, a lower level of problem loans and loan recoveries during the period whose impact more than offset the effect of loan growth over the same period.
Non-interest income decreased 7% to $22.9 million for the first six months of 2014 compared to $24.6 million for the first six months of 2013. This decrease was driven primarily by a 68% decrease in income from mortgage banking activities due to the decline in loan origination volumes. The impact of this decrease was partially mitigated by increases in wealth management income that increased 7% due to higher assets under management while insurance agency commissions increased 9%. Other non-interest income decreased 14% due to a decline in gains on sales and dispositions of loans compared to the prior year and last year’s inclusion of a non-recurring legal settlement.
Non-interest expenses increased to $61.7 million for the first six months of 2014 compared to $55.3 million in the first six months of 2013 due to the aforementioned impact of the litigation expenses. Excluding the impact of the litigation expenses, non-interest expense for the six months ended June 30, 2014 was $55.6 million compared to $55.3 million for the six months ended June 30, 2013. The non-GAAP efficiency ratio was 61.45% for the first six months of 2014 compared to 60.86% for the first six months of 2013.
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) July 31, 2014. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10048612.
About Sandy Spring Bancorp, Inc.
With $4.2 billion in assets, Sandy Spring Bancorp, Inc. 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 46 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. Visit www.sandyspringbank.com 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, 2013, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.
Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS - UNAUDITED
| | | Three Months Ended | | | | | | Six Months Ended | | | | |
| | | June 30, | | | % | | | June 30, | | | % | |
| (Dollars in thousands, except per share data) | | 2014 | | | 2013 | | | Change | | | 2014 | | | 2013 | | | Change | |
| Results of Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 32,309 | | | $ | 30,932 | | | | 4 | % | | $ | 63,901 | | | $ | 62,258 | | | | 3 | % |
| Provision for loan and lease losses | | | 158 | | | | (2,876 | ) | | | (105 | ) | | | (824 | ) | | | (2,798 | ) | | | (71 | ) |
| Non-interest income | | | 11,694 | | | | 12,215 | | | | (4 | ) | | | 22,943 | | | | 24,634 | | | | (7 | ) |
| Non-interest expenses | | | 34,141 | | | | 27,508 | | | | 24 | | | | 61,690 | | | | 55,331 | | | | 11 | |
| Income before income taxes | | | 9,704 | | | | 18,515 | | | | (48 | ) | | | 25,978 | | | | 34,359 | | | | (24 | ) |
| Net income | | | 6,982 | | | | 12,162 | | | | (43 | ) | | | 17,910 | | | | 22,720 | | | | (21 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Pre-tax pre-provision income | | $ | 15,990 | | | $ | 15,639 | | | | 2 | | | $ | 31,282 | | | $ | 31,561 | | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.67 | % | | | 1.23 | % | | | | | | | 0.87 | % | | | 1.16 | % | | | | |
| Return on average common equity | | | 5.47 | % | | | 9.98 | % | | | | | | | 7.11 | % | | | 9.42 | % | | | | |
| Net interest margin | | | 3.48 | % | | | 3.51 | % | | | | | | | 3.48 | % | | | 3.55 | % | | | | |
| Efficiency ratio - GAAP basis (1) | | | 77.59 | % | | | 63.75 | % | | | | | | | 71.04 | % | | | 63.68 | % | | | | |
| Efficiency ratio - Non-GAAP basis (1) | | | 61.30 | % | | | 60.92 | % | | | | | | | 61.45 | % | | | 60.86 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income | | $ | 0.28 | | | $ | 0.49 | | | | (43 | )% | | $ | 0.72 | | | $ | 0.91 | | | | (21 | )% |
| Diluted net income | | $ | 0.28 | | | $ | 0.49 | | | | (43 | ) | | $ | 0.71 | | | $ | 0.91 | | | | (22 | ) |
| Average fully diluted shares | | | 25,127,036 | | | | 25,009,092 | | | | - | | | | 25,126,369 | | | | 25,006,161 | | | | - | |
| Dividends declared per share | | $ | 0.18 | | | $ | 0.16 | | | | 13 | | | $ | 0.36 | | | $ | 0.30 | | | | 20 | |
| Book value per share | | | 20.63 | | | | 19.45 | | | | 6 | | | | 20.63 | | | | 19.45 | | | | 6 | |
| Tangible book value per share | | | 17.04 | | | | 16.09 | | | | 6 | | | | 17.04 | | | | 16.09 | | | | 6 | |
| Outstanding shares | | | 25,069,700 | | | | 24,967,558 | | | | - | | | | 25,069,700 | | | | 24,967,558 | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Condition at period-end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment securities | | $ | 980,530 | | | $ | 1,102,209 | | | | (11 | )% | | $ | 980,530 | | | $ | 1,102,209 | | | | (11 | )% |
| Loans and leases | | | 2,910,944 | | | | 2,605,458 | | | | 12 | | | | 2,910,944 | | | | 2,605,458 | | | | 12 | |
| Interest-earning assets | | | 3,945,643 | | | | 3,802,682 | | | | 4 | | | | 3,945,643 | | | | 3,802,682 | | | | 4 | |
| Assets | | | 4,234,342 | | | | 4,072,617 | | | | 4 | | | | 4,234,342 | | | | 4,072,617 | | | | 4 | |
| Deposits | | | 3,038,670 | | | | 2,926,650 | | | | 4 | | | | 3,038,670 | | | | 2,926,650 | | | | 4 | |
| Interest-bearing liabilities | | | 2,698,887 | | | | 2,678,490 | | | | 1 | | | | 2,698,887 | | | | 2,678,490 | | | | 1 | |
| Stockholders' equity | | | 517,269 | | | | 485,643 | | | | 7 | | | | 517,269 | | | | 485,643 | | | | 7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage (4) | | | 11.37 | % | | | 11.28 | % | | | | | | | 11.37 | % | | | 11.28 | % | | | | |
| Tier 1 capital to risk-weighted assets (4) | | | 14.48 | % | | | 14.30 | % | | | | | | | 14.48 | % | | | 14.30 | % | | | | |
| Total regulatory capital to risk-weighted assets (4) | | | 15.66 | % | | | 15.55 | % | | | | | | | 15.66 | % | | | 15.55 | % | | | | |
| Tangible common equity to tangible assets (2) | | | 10.29 | % | | | 10.08 | % | | | | | | | 10.29 | % | | | 10.08 | % | | | | |
| Average equity to average assets | | | 12.31 | % | | | 12.35 | % | | | | | | | 12.29 | % | | | 12.30 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Credit quality ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses to loans and leases | | | 1.30 | % | | | 1.50 | % | | | | | | | 1.30 | % | | | 1.50 | % | | | | |
| Non-performing loans to total loans | | | 1.43 | % | | | 1.77 | % | | | | | | | 1.43 | % | | | 1.77 | % | | | | |
| Non-performing assets to total assets | | | 1.03 | % | | | 1.25 | % | | | | | | | 1.03 | % | | | 1.25 | % | | | | |
| Allowance for loan and lease losses to non-performing loans | | | 90.99 | % | | | 84.46 | % | | | | | | | 90.99 | % | | | 84.46 | % | | | | |
| Annualized net charge-offs to average loans and leases (3) | | | 0.03 | % | | | (0.10 | )% | | | | | | | - | % | | | 0.09 | % | | | | |
| (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 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. |
| (4) | Estimated ratio at June 30, 2014 |
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| (Dollars in thousands) | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| Pre-tax pre-provision income: | | | | | | | | | | | | | | | | |
| Net income | | $ | 6,982 | | | $ | 12,162 | | | $ | 17,910 | | | $ | 22,720 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Litigation expenses | | | 6,128 | | | | - | | | | 6,128 | | | | - | |
| Income taxes | | | 2,722 | | | | 6,353 | | | | 8,068 | | | | 11,639 | |
| Provision (credit) for loan and lease losses | | | 158 | | | | (2,876 | ) | | | (824 | ) | | | (2,798 | ) |
| Pre-tax pre-provision income | | $ | 15,990 | | | $ | 15,639 | | | $ | 31,282 | | | $ | 31,561 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - GAAP basis: | | | | | | | | | | | | | | | | |
| Non-interest expenses | | $ | 34,141 | | | $ | 27,508 | | | $ | 61,690 | | | $ | 55,331 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus non-interest income | | $ | 44,003 | | | $ | 43,147 | | | $ | 86,844 | | | $ | 86,892 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - GAAP basis | | | 77.59 | % | | | 63.75 | % | | | 71.04 | % | | | 63.68 | % |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - Non-GAAP basis: | | | | | | | | | | | | | | | | |
| Non-interest expenses | | $ | 34,141 | | | $ | 27,508 | | | $ | 61,690 | | | $ | 55,331 | |
| Less non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Amortization of intangible assets | | | 224 | | | | 461 | | | | 594 | | | | 922 | |
| Litigation expenses | | | 6,128 | | | | - | | | | 6,128 | | | | - | |
| Non-interest expenses - as adjusted | | $ | 27,789 | | | $ | 27,047 | | | $ | 54,968 | | | $ | 54,409 | |
| | | | | | | | | | | | | | | | | |
| Net interest income plus non-interest income | | $ | 44,003 | | | $ | 43,147 | | | $ | 86,844 | | | $ | 86,892 | |
| Plus non-GAAP adjustment: | | | | | | | | | | | | | | | | |
| Tax-equivalent income | | | 1,331 | | | | 1,312 | | | | 2,613 | | | | 2,623 | |
| Less non-GAAP adjustments: | | | | | | | | | | | | | | | | |
| Securities gains | | | - | | | | 62 | | | | - | | | | 118 | |
| OTTI recognized in earnings | | | - | | | | - | | | | - | | | | - | |
| Net interest income plus non-interest income - as adjusted | | $ | 45,334 | | | $ | 44,397 | | | $ | 89,457 | | | $ | 89,397 | |
| | | | | | | | | | | | | | | | | |
| Efficiency ratio - Non-GAAP basis | | | 61.30 | % | | | 60.92 | % | | | 61.45 | % | | | 60.86 | % |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio: | | | | | | | | | | | | | | | | |
| Total stockholders' equity | | $ | 517,269 | | | $ | 485,643 | | | $ | 517,269 | | | $ | 485,643 | |
| Accumulated other comprehensive (income) loss | | | (5,233 | ) | | | 2,425 | | | | (5,233 | ) | | | 2,425 | |
| Goodwill | | | (84,171 | ) | | | (84,171 | ) | | | (84,171 | ) | | | (84,171 | ) |
| Other intangible assets, net | | | (737 | ) | | | (2,241 | ) | | | (737 | ) | | | (2,241 | ) |
| Tangible common equity | | $ | 427,128 | | | $ | 401,656 | | | $ | 427,128 | | | $ | 401,656 | |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | 4,234,342 | | | $ | 4,072,617 | | | $ | 4,234,342 | | | $ | 4,072,617 | |
| Goodwill | | | (84,171 | ) | | | (84,171 | ) | | | (84,171 | ) | | | (84,171 | ) |
| Other intangible assets, net | | | (737 | ) | | | (2,241 | ) | | | (737 | ) | | | (2,241 | ) |
| Tangible assets | | $ | 4,149,434 | | | $ | 3,986,205 | | | $ | 4,149,434 | | | $ | 3,986,205 | |
| | | | | | | | | | | | | | | | | |
| Tangible common equity ratio | | | 10.29 | % | | | 10.08 | % | | | 10.29 | % | | | 10.08 | % |
| | | | | | | | | | | | | | | | | |
| Outstanding common shares | | | 25,069,700 | | | | 24,967,558 | | | | 25,069,700 | | | | 24,967,558 | |
| Tangible book value per common share | | $ | 17.04 | | | $ | 16.09 | | | $ | 17.04 | | | $ | 16.09 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
| | | June 30, | | | December 31, | | | June 30, | |
| (Dollars in thousands) | | 2014 | | | 2013 | | | 2013 | |
| Assets | | | | | | | | | | | | |
| Cash and due from banks | | $ | 65,674 | | | $ | 46,755 | | | $ | 41,525 | |
| Federal funds sold | | | 474 | | | | 475 | | | | 475 | |
| Interest-bearing deposits with banks | | | 44,653 | | | | 27,197 | | | | 65,507 | |
| Cash and cash equivalents | | | 110,801 | | | | 74,427 | | | | 107,507 | |
| Residential mortgage loans held for sale (at fair value) | | | 9,042 | | | | 8,365 | | | | 29,033 | |
| Investments available-for-sale (at fair value) | | | 720,885 | | | | 751,284 | | | | 838,440 | |
| Investments held-to-maturity — fair value of $224,313, $216,007 and 220,838 at June 30, 2014, December 31, 2013 and June 30, 2013, respectively | | | 223,518 | | | | 224,638 | | | | 226,457 | |
| Other equity securities | | | 36,127 | | | | 40,687 | | | | 37,312 | |
| Total loans and leases | | | 2,910,944 | | | | 2,784,266 | | | | 2,605,458 | |
| Less: allowance for loan and lease losses | | | (37,959 | ) | | | (38,766 | ) | | | (39,015 | ) |
| Net loans and leases | | | 2,872,985 | | | | 2,745,500 | | | | 2,566,443 | |
| Premises and equipment, net | | | 45,296 | | | | 45,916 | | | | 46,901 | |
| Other real estate owned | | | 1,967 | | | | 1,338 | | | | 4,831 | |
| Accrued interest receivable | | | 12,271 | | | | 12,532 | | | | 13,071 | |
| Goodwill | | | 84,171 | | | | 84,171 | | | | 84,171 | |
| Other intangible assets, net | | | 737 | | | | 1,330 | | | | 2,241 | |
| Other assets | | | 116,542 | | | | 115,912 | | | | 116,210 | |
| Total assets | | $ | 4,234,342 | | | $ | 4,106,100 | | | $ | 4,072,617 | |
| | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 984,700 | | | $ | 836,198 | | | $ | 877,891 | |
| Interest-bearing deposits | | | 2,053,970 | | | | 2,041,027 | | | | 2,048,759 | |
| Total deposits | | | 3,038,670 | | | | 2,877,225 | | | | 2,926,650 | |
| Securities sold under retail repurchase agreements and federal funds purchased | | | 72,917 | | | | 53,842 | | | | 54,731 | |
| Advances from FHLB | | | 537,000 | | | | 615,000 | | | | 540,000 | |
| Subordinated debentures | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Accrued interest payable and other liabilities | | | 33,486 | | | | 25,670 | | | | 30,593 | |
| Total liabilities | | | 3,717,073 | | | | 3,606,737 | | | | 3,586,974 | |
| | | | | | | | | | | | | |
| Stockholders' Equity | | | | | | | | | | | | |
| Common stock — par value $1.00; shares authorized 50,000,000; shares issued and outstanding 25,069,700, 24,990,021 and 24,967,558 at June 30, 2014, December 31, 2013 and June 30, 2013, respectively | | | 25,070 | | | | 24,990 | | | | 24,968 | |
| Additional paid in capital | | | 194,252 | | | | 193,445 | | | | 192,327 | |
| Retained earnings | | | 292,714 | | | | 283,898 | | | | 270,773 | |
| Accumulated other comprehensive income (loss) | | | 5,233 | | | | (2,970 | ) | | | (2,425 | ) |
| Total stockholders' equity | | | 517,269 | | | | 499,363 | | | | 485,643 | |
| Total liabilities and stockholders' equity | | $ | 4,234,342 | | | $ | 4,106,100 | | | $ | 4,072,617 | |
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) | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| Interest Income: | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 30,706 | | | $ | 29,212 | | | $ | 60,440 | | | $ | 58,858 | |
| Interest on loans held for sale | | | 71 | | | | 309 | | | | 130 | | | | 662 | |
| Interest on deposits with banks | | | 22 | | | | 24 | | | | 42 | | | | 43 | |
| Interest and dividends on investment securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 3,876 | | | | 3,919 | | | | 7,992 | | | | 7,853 | |
| Exempt from federal income taxes | | | 2,316 | | | | 2,315 | | | | 4,637 | | | | 4,642 | |
| Total interest income | | | 36,991 | | | | 35,779 | | | | 73,241 | | | | 72,058 | |
| Interest Expense: | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 1,193 | | | | 1,396 | | | | 2,377 | | | | 2,851 | |
| Interest on retail repurchase agreements and federal funds purchased | | | 37 | | | | 38 | | | | 75 | | | | 87 | |
| Interest on advances from FHLB | | | 3,233 | | | | 3,189 | | | | 6,451 | | | | 6,412 | |
| Interest on subordinated debt | | | 219 | | | | 224 | | | | 437 | | | | 450 | |
| Total interest expense | | | 4,682 | | | | 4,847 | | | | 9,340 | | | | 9,800 | |
| Net interest income | | | 32,309 | | | | 30,932 | | | | 63,901 | | | | 62,258 | |
| Provision (credit) for loan and lease losses | | | 158 | | | | (2,876 | ) | | | (824 | ) | | | (2,798 | ) |
| Net interest income after provision (credit) for loan and lease losses | | | 32,151 | | | | 33,808 | | | | 64,725 | | | | 65,056 | |
| Non-interest Income: | | | | | | | | | | | | | | | | |
| Investment securities gains | | | - | | | | 62 | | | | - | | | | 118 | |
| Service charges on deposit accounts | | | 2,089 | | | | 2,150 | | | | 4,061 | | | | 4,219 | |
| Mortgage banking activities | | | 570 | | | | 1,237 | | | | 886 | | | | 2,764 | |
| Wealth management income | | | 4,741 | | | | 4,532 | | | | 9,207 | | | | 8,574 | |
| Insurance agency commissions | | | 961 | | | | 1,036 | | | | 2,601 | | | | 2,385 | |
| Income from bank owned life insurance | | | 608 | | | | 623 | | | | 1,206 | | | | 1,235 | |
| Bank card fees | | | 1,169 | | | | 1,079 | | | | 2,147 | | | | 2,036 | |
| Other income | | | 1,556 | | | | 1,496 | | | | 2,835 | | | | 3,303 | |
| Total non-interest income | | | 11,694 | | | | 12,215 | | | | 22,943 | | | | 24,634 | |
| Non-interest Expenses: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 16,474 | | | | 16,163 | | | | 32,829 | | | | 32,509 | |
| Occupancy expense of premises | | | 3,274 | | | | 2,996 | | | | 6,746 | | | | 6,178 | |
| Equipment expenses | | | 1,262 | | | | 1,227 | | | | 2,518 | | | | 2,476 | |
| Marketing | | | 802 | | | | 755 | | | | 1,344 | | | | 1,270 | |
| Outside data services | | | 1,216 | | | | 1,114 | | | | 2,432 | | | | 2,266 | |
| FDIC insurance | | | 573 | | | | 581 | | | | 1,093 | | | | 1,177 | |
| Amortization of intangible assets | | | 224 | | | | 461 | | | | 594 | | | | 922 | |
| Litigation expenses | | | 6,128 | | | | - | | | | 6,128 | | | | - | |
| Other expenses | | | 4,188 | | | | 4,211 | | | | 8,006 | | | | 8,533 | |
| Total non-interest expenses | | | 34,141 | | | | 27,508 | | | | 61,690 | | | | 55,331 | |
| Income before income taxes | | | 9,704 | | | | 18,515 | | | | 25,978 | | | | 34,359 | |
| Income tax expense | | | 2,722 | | | | 6,353 | | | | 8,068 | | | | 11,639 | |
| Net income | | $ | 6,982 | | | $ | 12,162 | | | $ | 17,910 | | | $ | 22,720 | |
| | | | | | | | | | | | | | | | | |
| Net Income Per Share Amounts: | | | | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.28 | | | $ | 0.49 | | | $ | 0.72 | | | $ | 0.91 | |
| Diluted net income per share | | $ | 0.28 | | | $ | 0.49 | | | $ | 0.71 | | | $ | 0.91 | |
| Dividends declared per share | | $ | 0.18 | | | $ | 0.16 | | | $ | 0.36 | | | $ | 0.30 | |
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
| | | | | | | | | 2013 | |
| (Dollars in thousands, except per share data) | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Profitability for the quarter: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent interest income | | $ | 38,322 | | | $ | 37,532 | | | $ | 38,434 | | | $ | 41,524 | | | $ | 37,091 | | | $ | 37,590 | |
| Interest expense | | | 4,682 | | | | 4,658 | | | | 4,759 | | | | 4,874 | | | | 4,847 | | | | 4,953 | |
| Tax-equivalent net interest income | | | 33,640 | | | | 32,874 | | | | 33,675 | | | | 36,650 | | | | 32,244 | | | | 32,637 | |
| Tax-equivalent adjustment | | | 1,331 | | | | 1,282 | | | | 1,325 | | | | 1,344 | | | | 1,312 | | | | 1,311 | |
| Provision for loan and lease losses | | | 158 | | | | (982 | ) | | | 586 | | | | 1,128 | | | | (2,876 | ) | | | 78 | |
| Non-interest income | | | 11,694 | | | | 11,249 | | | | 11,654 | | | | 11,223 | | | | 12,215 | | | | 12,419 | |
| Non-interest expenses | | | 34,141 | | | | 27,549 | | | | 29,300 | | | | 26,893 | | | | 27,508 | | | | 27,823 | |
| Income before income taxes | | | 9,704 | | | | 16,274 | | | | 14,118 | | | | 18,508 | | | | 18,515 | | | | 15,844 | |
| Income tax expense | | | 2,722 | | | | 5,346 | | | | 4,505 | | | | 6,419 | | | | 6,353 | | | | 5,286 | |
| Net income | | $ | 6,982 | | | $ | 10,928 | | | $ | 9,613 | | | $ | 12,089 | | | $ | 12,162 | | | $ | 10,558 | |
| Financial performance: | | | | | | | | | | | | | | | | | | | | | | | | |
| Pre-tax pre-provision income | | $ | 15,990 | | | $ | 15,292 | | | $ | 14,704 | | | $ | 19,636 | | | $ | 15,639 | | | $ | 15,922 | |
| Return on average assets | | | 0.67 | % | | | 1.08 | % | | | 0.93 | % | | | 1.19 | % | | | 1.23 | % | | | 1.08 | % |
| Return on average common equity | | | 5.47 | % | | | 8.80 | % | | | 7.71 | % | | | 9.91 | % | | | 9.98 | % | | | 8.85 | % |
| Net interest margin | | | 3.48 | % | | | 3.47 | % | | | 3.53 | % | | | 3.88 | % | | | 3.51 | % | | | 3.59 | % |
| Efficiency ratio - GAAP basis (1) | | | 77.59 | % | | | 64.31 | % | | | 66.59 | % | | | 57.80 | % | | | 63.75 | % | | | 63.60 | % |
| Efficiency ratio - Non-GAAP basis (1) | | | 61.30 | % | | | 61.60 | % | | | 63.62 | % | | | 55.21 | % | | | 60.92 | % | | | 60.80 | % |
| Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic net income per share | | $ | 0.28 | | | $ | 0.44 | | | $ | 0.38 | | | $ | 0.48 | | | $ | 0.49 | | | $ | 0.42 | |
| Diluted net income per share | | $ | 0.28 | | | $ | 0.43 | | | $ | 0.38 | | | $ | 0.48 | | | $ | 0.49 | | | $ | 0.42 | |
| Average fully diluted shares | | | 25,127,036 | | | | 25,124,206 | | | | 25,108,109 | | | | 25,070,506 | | | | 25,009,092 | | | | 25,002,612 | |
| Dividends declared per common share | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.14 | |
| Non-interest income: | | | | | | | | | | | | | | | | | | | | | | | | |
| Securities gains (losses) | | $ | - | | | $ | - | | | $ | (3 | ) | | $ | - | | | $ | 62 | | | $ | 56 | |
| Service charges on deposit accounts | | | 2,089 | | | | 1,972 | | | | 2,143 | | | | 2,171 | | | | 2,150 | | | | 2,069 | |
| Mortgage banking activities | | | 570 | | | | 316 | | | | 356 | | | | (26 | ) | | | 1,237 | | | | 1,527 | |
| Wealth management income | | | 4,741 | | | | 4,466 | | | | 4,508 | | | | 4,503 | | | | 4,532 | | | | 4,042 | |
| Insurance agency commissions | | | 961 | | | | 1,640 | | | | 1,243 | | | | 1,193 | | | | 1,036 | | | | 1,349 | |
| Income from bank owned life insurance | | | 608 | | | | 598 | | | | 635 | | | | 629 | | | | 623 | | | | 612 | |
| Bank card fees | | | 1,169 | | | | 978 | | | | 1,052 | | | | 1,077 | | | | 1,079 | | | | 957 | |
| Other income | | | 1,556 | | | | 1,279 | | | | 1,720 | | | | 1,676 | | | | 1,496 | | | | 1,807 | |
| Total non-interest income | | $ | 11,694 | | | $ | 11,249 | | | $ | 11,654 | | | $ | 11,223 | | | $ | 12,215 | | | $ | 12,419 | |
| Non-interest expense: | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | $ | 16,474 | | | $ | 16,355 | | | $ | 16,707 | | | $ | 16,382 | | | $ | 16,163 | | | $ | 16,346 | |
| Occupancy expense of premises | | | 3,274 | | | | 3,472 | | | | 3,844 | | | | 3,149 | | | | 2,996 | | | | 3,182 | |
| Equipment expenses | | | 1,262 | | | | 1,256 | | | | 1,264 | | | | 1,200 | | | | 1,227 | | | | 1,249 | |
| Marketing | | | 802 | | | | 542 | | | | 897 | | | | 713 | | | | 755 | | | | 515 | |
| Outside data services | | | 1,216 | | | | 1,216 | | | | 1,162 | | | | 1,152 | | | | 1,114 | | | | 1,152 | |
| FDIC insurance | | | 573 | | | | 520 | | | | 445 | | | | 678 | | | | 581 | | | | 596 | |
| Amortization of intangible assets | | | 224 | | | | 370 | | | | 461 | | | | 462 | | | | 461 | | | | 461 | |
| Litigation expenses | | | 6,128 | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Professional fees | | | 1,292 | | | | 914 | | | | 1,386 | | | | 511 | | | | 1,332 | | | | 1,250 | |
| Other real estate owned expenses | | | 9 | | | | - | | | | 91 | | | | (150 | ) | | | (281 | ) | | | 37 | |
| Other expenses | | | 2,887 | | | | 2,904 | | | | 3,043 | | | | 2,796 | | | | 3,160 | | | | 3,035 | |
| Total non-interest expense | | $ | 34,141 | | | $ | 27,549 | | | $ | 29,300 | | | $ | 26,893 | | | $ | 27,508 | | | $ | 27,823 | |
| (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 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 | |
| (Dollars in thousands) | | Q2 | | | Q1 | | | Q4 | | | Q3 | | | Q2 | | | Q1 | |
| Balance sheets at quarter end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 668,536 | | | $ | 640,939 | | | $ | 618,381 | | | $ | 595,180 | | | $ | 565,282 | | | $ | 538,346 | |
| Residential construction loans | | | 149,321 | | | | 143,109 | | | | 129,177 | | | | 118,316 | | | | 116,736 | | | | 122,698 | |
| Commercial ADC loans | | | 178,972 | | | | 163,343 | | | | 160,696 | | | | 158,739 | | | | 163,309 | | | | 150,599 | |
| Commercial investor real estate loans | | | 577,813 | | | | 573,634 | | | | 552,178 | | | | 518,029 | | | | 497,365 | | | | 487,802 | |
| Commercial owner occupied real estate loans | | | 581,795 | | | | 582,472 | | | | 592,823 | | | | 569,350 | | | | 563,258 | | | | 565,820 | |
| Commercial business loans | | | 357,472 | | | | 348,180 | | | | 356,651 | | | | 332,670 | | | | 334,979 | | | | 344,489 | |
| Leasing | | | 260 | | | | 439 | | | | 703 | | | | 962 | | | | 1,415 | | | | 1,974 | |
| Consumer loans | | | 396,775 | | | | 380,697 | | | | 373,657 | | | | 368,764 | | | | 363,114 | | | | 353,341 | |
| Total loans and leases | | | 2,910,944 | | | | 2,832,813 | | | | 2,784,266 | | | | 2,662,010 | | | | 2,605,458 | | | | 2,565,069 | |
| Allowance for loan and lease losses | | | (37,959 | ) | | | (38,026 | ) | | | (38,766 | ) | | | (39,422 | ) | | | (39,015 | ) | | | (41,246 | ) |
| Investment securities | | | 980,530 | | | | 997,584 | | | | 1,016,609 | | | | 1,077,951 | | | | 1,102,209 | | | | 1,008,693 | |
| Interest-earning assets | | | 3,945,643 | | | | 3,891,223 | | | | 3,836,912 | | | | 3,771,825 | | | | 3,802,682 | | | | 3,660,809 | |
| Total assets | | | 4,234,342 | | | | 4,168,998 | | | | 4,106,100 | | | | 4,052,969 | | | | 4,072,617 | | | | 3,932,026 | |
| Noninterest-bearing demand deposits | | | 984,700 | | | | 882,169 | | | | 836,198 | | | | 890,319 | | | | 877,891 | | | | 832,679 | |
| Total deposits | | | 3,038,670 | | | | 2,959,195 | | | | 2,877,225 | | | | 2,916,466 | | | | 2,926,650 | | | | 2,919,208 | |
| Customer repurchase agreements | | | 72,917 | | | | 67,038 | | | | 53,842 | | | | 53,177 | | | | 54,731 | | | | 50,302 | |
| Total interest-bearing liabilities | | | 2,698,887 | | | | 2,748,064 | | | | 2,744,869 | | | | 2,634,324 | | | | 2,678,490 | | | | 2,576,831 | |
| Total stockholders' equity | | | 517,269 | | | | 510,386 | | | | 499,363 | | | | 493,882 | | | | 485,643 | | | | 488,947 | |
| Quarterly average balance sheets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | $ | 659,172 | | | $ | 633,160 | | | $ | 614,698 | | | $ | 593,335 | | | $ | 579,899 | | | $ | 575,889 | |
| Residential construction loans | | | 145,968 | | | | 134,261 | | | | 125,744 | | | | 120,676 | | | | 119,197 | | | | 120,283 | |
| Commercial ADC loans | | | 168,063 | | | | 162,544 | | | | 156,558 | | | | 158,557 | | | | 160,483 | | | | 148,749 | |
| Commercial investor real estate loans | | | 575,283 | | | | 557,168 | | | | 522,085 | | | | 499,896 | | | | 485,630 | | | | 474,062 | |
| Commercial owner occupied real estate loans | | | 579,953 | | | | 584,155 | | | | 580,808 | | | | 566,366 | | | | 561,249 | | | | 567,723 | |
| Commercial business loans | | | 348,597 | | | | 349,734 | | | | 357,455 | | | | 331,374 | | | | 337,843 | | | | 347,569 | |
| Leasing | | | 352 | | | | 567 | | | | 817 | | | | 1,152 | | | | 1,644 | | | | 2,510 | |
| Consumer loans | | | 390,076 | | | | 377,822 | | | | 373,017 | | | | 366,562 | | | | 360,842 | | | | 357,366 | |
| Total loans and leases | | | 2,867,464 | | | | 2,799,411 | | | | 2,731,182 | | | | 2,637,918 | | | | 2,606,787 | | | | 2,594,151 | |
| Investment securities | | | 991,135 | | | | 1,012,701 | | | | 1,055,432 | | | | 1,097,643 | | | | 1,047,726 | | | | 1,051,769 | |
| Interest-earning assets | | | 3,893,843 | | | | 3,845,513 | | | | 3,817,033 | | | | 3,770,855 | | | | 3,692,215 | | | | 3,677,444 | |
| Total assets | | | 4,157,559 | | | | 4,105,225 | | | | 4,082,839 | | | | 4,039,069 | | | | 3,959,907 | | | | 3,946,578 | |
| Noninterest-bearing demand deposits | | | 899,287 | | | | 825,968 | | | | 872,532 | | | | 862,046 | | | | 838,502 | | | | 797,926 | |
| Total deposits | | | 2,965,329 | | | | 2,876,641 | | | | 2,901,814 | | | | 2,903,926 | | | | 2,892,704 | | | | 2,860,451 | |
| Customer repurchase agreements | | | 68,880 | | | | 62,864 | | | | 57,682 | | | | 56,766 | | | | 55,941 | | | | 52,622 | |
| Total interest-bearing liabilities | | | 2,716,537 | | | | 2,749,459 | | | | 2,679,812 | | | | 2,659,406 | | | | 2,599,704 | | | | 2,631,198 | |
| Total stockholders' equity | | | 511,738 | | | | 503,851 | | | | 494,779 | | | | 483,811 | | | | 489,014 | | | | 483,664 | |
| Financial Measures | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 12.31 | % | | | 12.27 | % | | | 12.12 | % | | | 11.98 | % | | | 12.35 | % | | | 12.26 | % |
| Investment securities to earning assets | | | 24.85 | % | | | 25.64 | % | | | 26.50 | % | | | 28.58 | % | | | 28.99 | % | | | 27.55 | % |
| Loans to earning assets | | | 73.78 | % | | | 72.80 | % | | | 72.57 | % | | | 70.58 | % | | | 68.52 | % | | | 70.07 | % |
| Loans to assets | | | 68.75 | % | | | 67.95 | % | | | 67.81 | % | | | 65.68 | % | | | 63.98 | % | | | 65.24 | % |
| Loans to deposits | | | 95.80 | % | | | 95.73 | % | | | 96.77 | % | | | 91.28 | % | | | 89.03 | % | | | 87.87 | % |
| Capital measures: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tier 1 leverage (1) | | | 11.37 | % | | | 11.43 | % | | | 11.32 | % | | | 11.29 | % | | | 11.28 | % | | | 11.07 | % |
| Tier 1 capital to risk-weighted assets (1) | | | 14.48 | % | | | 14.64 | % | | | 14.42 | % | | | 14.45 | % | | | 14.30 | % | | | 14.23 | % |
| Total regulatory capital to risk-weighted assets (1) | | | 15.66 | % | | | 15.85 | % | | | 15.65 | % | | | 15.70 | % | | | 15.55 | % | | | 15.48 | % |
| Book value per share | | $ | 20.63 | | | $ | 20.38 | | | $ | 19.98 | | | $ | 19.77 | | | $ | 19.45 | | | $ | 19.59 | |
| Outstanding shares | | | 25,069,700 | | | | 25,043,482 | | | | 24,990,021 | | | | 24,985,146 | | | | 24,967,558 | | | | 24,954,892 | |
(1) Estimated ratio at June 30, 2014
Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
| | | 2014 | | | 2013 | |
| (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 | | $ | 1 | | | $ | - | | | $ | - | | | $ | - | | | $ | 15 | | | $ | - | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Commercial investor real estate | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Commercial owner occupied real estate | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Leasing | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Consumer | | | 3 | | | | - | | | | 1 | | | | 10 | | | | - | | | | 54 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Residential construction | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total loans and leases 90 days past due | | | 4 | | | | - | | | | 1 | | | | 10 | | | | 15 | | | | 54 | |
| Non-accrual loans and leases: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial business | | | 4,309 | | | | 3,272 | | | | 3,400 | | | | 4,050 | | | | 4,483 | | | | 4,012 | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | 3,739 | | | | 4,133 | | | | 4,127 | | | | 5,086 | | | | 5,885 | | | | 5,826 | |
| Commercial investor real estate | | | 6,731 | | | | 7,284 | | | | 6,802 | | | | 6,877 | | | | 11,741 | | | | 12,353 | |
| Commercial owner occupied real estate | | | 10,868 | | | | 7,150 | | | | 5,936 | | | | 4,202 | | | | 5,413 | | | | 5,346 | |
| Leasing | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Consumer | | | 2,058 | | | | 2,115 | | | | 2,259 | | | | 2,004 | | | | 2,305 | | | | 2,388 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | 4,501 | | | | 5,025 | | | | 5,735 | | | | 5,643 | | | | 5,581 | | | | 5,393 | |
| Residential construction | | | 2,143 | | | | 2,304 | | | | 2,315 | | | | 2,327 | | | | 2,558 | | | | 3,258 | |
| Total non-accrual loans and leases | | | 34,349 | | | | 31,283 | | | | 30,574 | | | | 30,189 | | | | 37,966 | | | | 38,576 | |
| Total restructured loans - accruing | | | 7,364 | | | | 7,411 | | | | 9,459 | | | | 8,054 | | | | 8,213 | | | | 10,839 | |
| Total non-performing loans and leases | | | 41,717 | | | | 38,694 | | | | 40,034 | | | | 38,253 | | | | 46,194 | | | | 49,469 | |
| Other assets and real estate owned (OREO) | | | 1,967 | | | | 1,619 | | | | 1,338 | | | | 1,662 | | | | 4,831 | | | | 5,250 | |
| Total non-performing assets | | $ | 43,684 | | | $ | 40,313 | | | $ | 41,372 | | | $ | 39,915 | | | $ | 51,025 | | | $ | 54,719 | |
| | | For the quarter ended, | |
| | | June 30, | | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| (Dollars in thousands) | | 2014 | | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Analysis of Non-accrual Loan and Lease Activity: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 31,283 | | | $ | 30,574 | | | $ | 30,189 | | | $ | 37,966 | | | $ | 38,576 | | | $ | 47,548 | |
| Non-accrual balances transferred to OREO | | | (390 | ) | | | (281 | ) | | | (365 | ) | | | (723 | ) | | | (1,426 | ) | | | (92 | ) |
| Non-accrual balances charged-off | | | (357 | ) | | | (513 | ) | | | (922 | ) | | | (4,995 | ) | | | (668 | ) | | | (2,175 | ) |
| Net payments or draws | | | (1,580 | ) | | | (1,073 | ) | | | (971 | ) | | | (13,547 | ) | | | (3,560 | ) | | | (11,768 | ) |
| Loans placed on non-accrual | | | 5,393 | | | | 2,576 | | | | 3,546 | | | | 11,488 | | | | 5,044 | | | | 5,493 | |
| Non-accrual loans brought current | | | - | | | | - | | | | (903 | ) | | | - | | | | - | | | | (430 | ) |
| Balance at end of period | | $ | 34,349 | | | $ | 31,283 | | | $ | 30,574 | | | $ | 30,189 | | | $ | 37,966 | | | $ | 38,576 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Analysis of Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at beginning of period | | $ | 38,026 | | | $ | 38,766 | | | $ | 39,422 | | | $ | 39,015 | | | $ | 41,246 | | | $ | 42,957 | |
| Provision (credit) for loan and lease losses | | | 158 | | | | (982 | ) | | | 586 | | | | 1,128 | | | | (2,876 | ) | | | 78 | |
| Less loans charged-off, net of recoveries: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial business | | | 28 | | | | (768 | ) | | | 384 | | | | 1 | | | | (32 | ) | | | 1,744 | |
| Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial AD&C | | | - | | | | - | | | | 85 | | | | (616 | ) | | | (1,444 | ) | | | (1,020 | ) |
| Commercial investor real estate | | | (23 | ) | | | (5 | ) | | | 23 | | | | 1,243 | | | | 123 | | | | 31 | |
| Commercial owner occupied real estate | | | 265 | | | | - | | | | (82 | ) | | | (284 | ) | | | 100 | | | | 81 | |
| Leasing | | | - | | | | - | | | | - | | | | (6 | ) | | | (4 | ) | | | - | |
| Consumer | | | 11 | | | | 331 | | | | 488 | | | | 169 | | | | 490 | | | | 508 | |
| Residential real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage | | | (27 | ) | | | 203 | | | | 347 | | | | 216 | | | | 22 | | | | 447 | |
| Residential construction | | | (29 | ) | | | (3 | ) | | | (3 | ) | | | (2 | ) | | | 100 | | | | (2 | ) |
| Net charge-offs | | | 225 | | | | (242 | ) | | | 1,242 | | | | 721 | | | | (645 | ) | | | 1,789 | |
| Balance at end of period | | $ | 37,959 | | | $ | 38,026 | | | $ | 38,766 | | | $ | 39,422 | | | $ | 39,015 | | | $ | 41,246 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-performing loans to total loans | | | 1.43 | % | | | 1.37 | % | | | 1.44 | % | | | 1.44 | % | | | 1.77 | % | | | 1.93 | % |
| Non-performing assets to total assets | | | 1.03 | % | | | 0.97 | % | | | 1.01 | % | | | 0.98 | % | | | 1.25 | % | | | 1.39 | % |
| Allowance for loan losses to loans | | | 1.30 | % | | | 1.34 | % | | | 1.39 | % | | | 1.48 | % | | | 1.50 | % | | | 1.61 | % |
| Allowance for loan losses to non-performing loans | | | 90.99 | % | | | 98.27 | % | | | 96.83 | % | | | 103.06 | % | | | 84.46 | % | | | 83.38 | % |
| Net charge-offs in quarter to average loans | | | 0.03 | % | | | (0.04 | )% | | | 0.18 | % | | | 0.11 | % | | | (0.10 | )% | | | 0.28 | % |
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
| | | Three Months Ended June 30, | |
| | | 2014 | | | 2013 | |
| | | | | | | | | 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) | | $ | 659,172 | | | $ | 5,685 | | | | 3.45 | % | | $ | 579,899 | | | $ | 5,310 | | | | 3.68 | % |
| Residential construction loans | | | 145,968 | | | | 1,359 | | | | 3.73 | | | | 119,197 | | | | 1,032 | | | | 3.47 | |
| Commercial ADC loans | | | 168,063 | | | | 2,180 | | | | 5.20 | | | | 160,483 | | | | 2,106 | | | | 5.26 | |
| Commercial investor real estate loans | | | 575,283 | | | | 7,139 | | | | 4.98 | | | | 485,630 | | | | 6,184 | | | | 5.11 | |
| Commercial owner occupied real estate loans | | | 579,953 | | | | 7,146 | | | | 5.09 | | | | 561,249 | | | | 7,302 | | | | 5.34 | |
| Commercial business loans | | | 348,597 | | | | 4,054 | | | | 4.69 | | | | 337,843 | | | | 4,456 | | | | 5.15 | |
| Leasing | | | 352 | | | | 6 | | | | 6.30 | | | | 1,644 | | | | 30 | | | | 7.22 | |
| Consumer loans | | | 390,076 | | | | 3,208 | | | | 3.32 | | | | 360,842 | | | | 3,101 | | | | 3.47 | |
| Total loans and leases (3) | | | 2,867,464 | | | | 30,777 | | | | 4.34 | | | | 2,606,787 | | | | 29,521 | | | | 4.57 | |
| Taxable securities | | | 688,793 | | | | 4,263 | | | | 2.48 | | | | 746,266 | | | | 4,289 | | | | 2.30 | |
| Tax-exempt securities (4) | | | 302,342 | | | | 3,260 | | | | 4.32 | | | | 301,460 | | | | 3,257 | | | | 4.32 | |
| Interest-bearing deposits with banks | | | 34,770 | | | | 22 | | | | 0.25 | | | | 37,227 | | | | 24 | | | | 0.25 | |
| Federal funds sold | | | 474 | | | | - | | | | 0.22 | | | | 475 | | | | - | | | | 0.22 | |
| Total interest-earning assets | | | 3,893,843 | | | | 38,322 | | | | 3.97 | | | | 3,692,215 | | | | 37,091 | | | | 4.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (38,342 | ) | | | | | | | | | | | (41,605 | ) | | | | | | | | |
| Cash and due from banks | | | 44,987 | | | | | | | | | | | | 45,603 | | | | | | | | | |
| Premises and equipment, net | | | 45,696 | | | | | | | | | | | | 47,501 | | | | | | | | | |
| Other assets | | | 211,375 | | | | | | | | | | | | 216,193 | | | | | | | | | |
| Total assets | | $ | 4,157,559 | | | | | | | | | | | $ | 3,959,907 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 477,018 | | | | 102 | | | | 0.09 | % | | $ | 442,808 | | | | 91 | | | | 0.08 | % |
| Regular savings deposits | | | 262,078 | | | | 49 | | | | 0.07 | | | | 240,410 | | | | 58 | | | | 0.10 | |
| Money market savings deposits | | | 865,134 | | | | 273 | | | | 0.13 | | | | 875,282 | | | | 378 | | | | 0.17 | |
| Time deposits | | | 461,812 | | | | 769 | | | | 0.67 | | | | 495,702 | | | | 869 | | | | 0.70 | |
| Total interest-bearing deposits | | | 2,066,042 | | | | 1,193 | | | | 0.23 | | | | 2,054,202 | | | | 1,396 | | | | 0.27 | |
| Other borrowings | | | 68,880 | | | | 37 | | | | 0.22 | | | | 56,711 | | | | 38 | | | | 0.27 | |
| Advances from FHLB | | | 546,615 | | | | 3,233 | | | | 2.37 | | | | 453,791 | | | | 3,189 | | | | 2.82 | |
| Subordinated debentures | | | 35,000 | | | | 219 | | | | 2.50 | | | | 35,000 | | | | 224 | | | | 2.56 | |
| Total interest-bearing liabilities | | | 2,716,537 | | | | 4,682 | | | | 0.69 | | | | 2,599,704 | | | | 4,847 | | | | 0.75 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 899,287 | | | | | | | | | | | | 838,502 | | | | | | | | | |
| Other liabilities | | | 29,997 | | | | | | | | | | | | 32,687 | | | | | | | | | |
| Stockholders' equity | | | 511,738 | | | | | | | | | | | | 489,014 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 4,157,559 | | | | | | | | | | | $ | 3,959,907 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 33,640 | | | | 3.28 | % | | | | | | $ | 32,244 | | | | 3.28 | % |
| Less: tax-equivalent adjustment | | | | | | | 1,331 | | | | | | | | | | | | 1,312 | | | | | |
| Net interest income | | | | | | $ | 32,309 | | | | | | | | | | | $ | 30,932 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 3.97 | % | | | | | | | | | | | 4.03 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.49 | | | | | | | | | | | | 0.52 | |
| Net interest margin | | | | | | | | | | | 3.48 | % | | | | | | | | | | | 3.51 | % |
| (1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2014 and 2013. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.3 million and $1.3 million in 2014 and 2013, 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, | |
| | | 2014 | | | 2013 | |
| | | | | | | | | 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) | | $ | 646,238 | | | $ | 11,191 | | | | 3.46 | % | | $ | 577,905 | | | $ | 10,686 | | | | 3.70 | % |
| Residential construction loans | | | 140,147 | | | | 2,612 | | | | 3.76 | | | | 119,737 | | | | 2,036 | | | | 3.43 | |
| Commercial ADC loans | | | 165,319 | | | | 4,253 | | | | 5.19 | | | | 154,648 | | | | 4,102 | | | | 5.35 | |
| Commercial investor real estate loans | | | 566,275 | | | | 13,872 | | | | 4.94 | | | | 479,878 | | | | 12,319 | | | | 5.18 | |
| Commercial owner occupied real estate loans | | | 582,042 | | | | 14,213 | | | | 5.08 | | | | 564,468 | | | | 15,103 | | | | 5.53 | |
| Commercial business loans | | | 349,162 | | | | 8,091 | | | | 4.67 | | | | 342,679 | | | | 9,042 | | | | 5.18 | |
| Leasing | | | 459 | | | | 12 | | | | 5.22 | | | | 2,075 | | | | 68 | | | | 6.53 | |
| Consumer loans | | | 383,983 | | | | 6,326 | | | | 3.34 | | | | 359,114 | | | | 6,164 | | | | 3.49 | |
| Total loans and leases (3) | | | 2,833,625 | | | | 60,570 | | | | 4.34 | | | | 2,600,504 | | | | 59,520 | | | | 4.64 | |
| Taxable securities | | | 699,460 | | | | 8,715 | | | | 2.49 | | | | 750,167 | | | | 8,594 | | | | 2.29 | |
| Tax-exempt securities (4) | | | 302,398 | | | | 6,527 | | | | 4.32 | | | | 299,569 | | | | 6,524 | | | | 4.36 | |
| Interest-bearing deposits with banks | | | 33,853 | | | | 42 | | | | 0.25 | | | | 34,156 | | | | 43 | | | | 0.25 | |
| Federal funds sold | | | 475 | | | | - | | | | 0.22 | | | | 475 | | | | - | | | | 0.22 | |
| Total interest-earning assets | | | 3,869,811 | | | | 75,854 | | | | 3.96 | | | | 3,684,871 | | | | 74,681 | | | | 4.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Less: allowance for loan and lease losses | | | (38,864 | ) | | | | | | | | | | | (42,650 | ) | | | | | | | | |
| Cash and due from banks | | | 45,268 | | | | | | | | | | | | 46,242 | | | | | | | | | |
| Premises and equipment, net | | | 45,787 | | | | | | | | | | | | 47,832 | | | | | | | | | |
| Other assets | | | 209,535 | | | | | | | | | | | | 216,984 | | | | | | | | | |
| Total assets | | $ | 4,131,537 | | | | | | | | | | | $ | 3,953,279 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing demand deposits | | $ | 468,677 | | | | 194 | | | | 0.08 | % | | $ | 433,200 | | | | 183 | | | | 0.09 | % |
| Regular savings deposits | | | 255,667 | | | | 97 | | | | 0.08 | | | | 237,467 | | | | 106 | | | | 0.09 | |
| Money market savings deposits | | | 871,464 | | | | 546 | | | | 0.13 | | | | 883,765 | | | | 789 | | | | 0.18 | |
| Time deposits | | | 462,591 | | | | 1,540 | | | | 0.67 | | | | 503,908 | | | | 1,773 | | | | 0.71 | |
| Total interest-bearing deposits | | | 2,058,399 | | | | 2,377 | | | | 0.23 | | | | 2,058,340 | | | | 2,851 | | | | 0.28 | |
| Other borrowings | | | 65,889 | | | | 75 | | | | 0.23 | | | | 61,132 | | | | 87 | | | | 0.29 | |
| Advances from FHLB | | | 573,619 | | | | 6,451 | | | | 2.27 | | | | 460,892 | | | | 6,412 | | | | 2.81 | |
| Subordinated debentures | | | 35,000 | | | | 437 | | | | 2.50 | | | | 35,000 | | | | 450 | | | | 2.57 | |
| Total interest-bearing liabilities | | | 2,732,907 | | | | 9,340 | | | | 0.69 | | | | 2,615,364 | | | | 9,800 | | | | 0.76 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand deposits | | | 862,830 | | | | | | | | | | | | 818,326 | | | | | | | | | |
| Other liabilities | | | 27,984 | | | | | | | | | | | | 33,235 | | | | | | | | | |
| Stockholders' equity | | | 507,816 | | | | | | | | | | | | 486,354 | | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 4,131,537 | | | | | | | | | | | $ | 3,953,279 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and spread | | | | | | $ | 66,514 | | | | 3.27 | % | | | | | | $ | 64,881 | | | | 3.32 | % |
| Less: tax-equivalent adjustment | | | | | | | 2,613 | | | | | | | | | | | | 2,623 | | | | | |
| Net interest income | | | | | | $ | 63,901 | | | | | | | | | | | $ | 62,258 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income/earning assets | | | | | | | | | | | 3.96 | % | | | | | | | | | | | 4.08 | % |
| Interest expense/earning assets | | | | | | | | | | | 0.48 | | | | | | | | | | | | 0.53 | |
| Net interest margin | | | | | | | | | | | 3.48 | % | | | | | | | | | | | 3.55 | % |
| (1) | Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2014 and 2013. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $2.6 million and $2.6 million in 2014 and 2013, 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. |
