Sandy Spring Bancorp (SASR) 8-K Sandy Spring Bancorp Reports Net Income of $9.1 Million for the Fourth Quarter and $38.2 Million for the Full Year

Exhibit 99.1

  News release

FOR IMMEDIATE RELEASE

SANDY SPRING BANCORP REPORTS NET INCOME OF $9.1 MILLION FOR THE FOURTH QUARTER AND $38.2 MILLION FOR THE FULL YEAR

OLNEY, MARYLAND, January 22, 2015 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today reported net income for the fourth quarter of 2014 of $9.1 million ($0.36 per diluted share) compared to net income of $9.6 million ($0.38 per diluted share) for the fourth quarter of 2013 and net income of $11.1 million ($0.44 per diluted share) for the third quarter of 2014.

Net income for the year ended December 31, 2014 was $38.2 million ($1.52 per diluted share) compared to net income of $44.4 million ($1.77 per diluted share) for the prior year. For comparison purposes, the current year includes $6.5 million in litigation expenses associated with a particular legal action while the prior year’s results includes a benefit of $4.5 million in interest income and professional fees associated with the resolution of a non-performing loan relationship.

“Considering the impact on operating results of the items mentioned above, the Company produced solid core results in 2014 driven by notable growth in its loan and deposit portfolios and the strong performance of its wealth management business. We are proud of our accomplishments considering the market volatility and extremely competitive environment that existed throughout the year,” said Daniel J. Schrider, President and Chief Executive Officer.

“Looking to the future, we are making appropriate investments in our client-facing facilities and systems as we adapt our delivery channels to the preferences of our clients. We anticipate this will provide the opportunity for further growth in our franchise while we continue to render outstanding service to our clients,” said Schrider.

Fourth Quarter Highlights:

· Total loans increased 12% compared to the fourth quarter of 2013 and 5% compared to the third quarter of 2014. Growth over the prior year exceeded 10% in each of the three major portfolio segments. Overall the entire portfolio grew $343 million from the prior year.

· Combined noninterest-bearing and interest-bearing transactionaccount balances increased 18% to $1.5 billion at December 31, 2014 as compared to $1.3 billion at December 31, 2013.

· The provision for loan and lease losses for the fourth quarter of 2014 was a charge of $0.9 million compared to a charge of $0.6 million for the fourth quarter of 2013 and a credit of $0.2 million for the third quarter of 2014. The credit quality of the loan portfolio continues to exhibit stability while outstanding loans increased significantly over the prior year.

· The net interest margin was 3.44% for the fourth quarter of 2014, compared to 3.53% for the fourth quarter of 2013 and 3.42% for the third quarter of 2014.

· Non-interest income decreased 3% for the quarter compared to the prior year quarter primarily due to a decrease in other non-interest income. This decrease was somewhat offset by a 9% increase in income from wealth management activities.

· Non-interest expense for the quarter increased 4% over the prior year quarter due mainly to $1.1 million in non-recurring expenses in the quarter for bankcard losses and an adjustment to insurance receivables.

Review of Balance Sheet and Credit Quality

Total assets grew 7% to $4.4 billion at December 31, 2014 compared to $4.1 billion at December 31, 2013. This growth was driven by a 12% increase in the loan portfolio as total loans and leases ended the period at $3.1 billion.

Deposits and certain other short-term borrowings that comprise all the funding sources derived from customers, increased 7% compared to the prior year end. At December 31, 2014, combined noninterest-bearing and interest-bearing checking account balances, an important performance driver of multiple-product banking relationships with clients, increased 18% compared to balances at December 31, 2013.

Tangible common equity totaled $438 million at December 31, 2014 compared to $417 million at December 31, 2013, resulting in a decrease in the ratio of tangible common equity to tangible assets to 10.15% at December 31, 2014 from 10.37% at December 31, 2013. Dividends per common share were $0.76 per share for the year compared to $0.64 per common share for 2013, a 19% increase. At December 31, 2014, the Company had a total risk-based capital ratio of 15.06%, a tier 1 risk-based capital ratio of 13.95% and a tier 1 leverage ratio of 11.26%.

Non-performing loans totaled $34.0 million at December 31, 2014 compared to $40.0 million at December 31, 2013 and $43.7 million at September 30, 2014. The level of non-performing loans to total loans decreased to 1.09% at December 31, 2014 compared to 1.44% at December 31, 2013. The year-over-year decrease was driven primarily by loan pay-offs and a reduction in restructured loans as such loans have performed to allow them to no longer be classified as non-performing.

Loan charge-offs, net of recoveries, totaled $0.6 million for the fourth quarter of 2014 compared to net loan charge-offs of $1.2 million for the fourth quarter of 2013 and net loan charge-offs of $0.2 million for the third quarter of 2014. The allowance for loan and lease losses represented 1.21% of outstanding loans and leases and 111% of non-performing loans at December 31, 2014 compared to 1.39% of outstanding loans and leases and 97% of non-performing loans at December 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 fourth quarter of 2014 increased 3% compared to the fourth quarter of 2013. The net interest margin was 3.44% for the fourth quarter of 2014 compared to 3.53% for the fourth quarter of 2013.

The provision for loan and lease losses was a charge of $0.9 million for the fourth quarter of 2014 compared to a charge of $0.6 million for the fourth quarter of 2013 and a credit of $0.2 million for the third quarter of 2014. The current quarter’s charge reflects the growth in the loan portfolio over the prior quarters. This growth in the loan portfolio produced an effect that more than offset the lower charge-offs and reduced problem loan migration into non-performing status during the past twelve months.

Non-interest income decreased 3% to $11.3 million for the fourth quarter of 2014 compared to $11.7 million for the fourth quarter of 2013. The decrease in non-interest income for the quarter compared to the prior year quarter was due primarily to lower other non-interest income from sales and dispositions of loans and fixed assets which occurred in the prior year quarter.

Non-interest expenses increased 4% to $30.5 million for the fourth quarter of 2014 compared to $29.3 million in the fourth quarter of 2013. The current quarter included increases in other non-interest expenses for bankcard losses and an adjustment to uncollectible insurance receivables. The non-GAAP efficiency ratio was 65.89% for the fourth quarter of 2014 compared to 63.62% for the fourth quarter of 2013.

Net interest income for the year ended December 31, 2014 was relatively level compared to the prior year. Excluding interest recoveries of $3.7 million in the prior year, net interest income would have increased 3%. The net interest margin decreased to 3.45% in 2014 compared to 3.63% in 2013. The prior year’s margin was positively impacted by loan recoveries on commercial loans. Exclusive of those recoveries the net interest margin for 2013 would have been 3.53%

The provision for loan and lease losses was a credit of $0.2 million for the year ended December 31, 2014 compared to a credit of $1.1 million for the year ended December 31, 2013. The credits in the provision for each year were driven by a decline in historical losses, improvement in the overall credit quality of the loan portfolio and problem loan resolutions and recoveries whose impact more than offset the effect of loan growth.

Non-interest income decreased 1% to $46.9 million for 2014 compared to $47.5 million for 2013. This decrease was driven primarily by the decrease in income from mortgage banking activities as loan origination volumes declined. Other non-interest income also decreased due to sales and dispositions of loans and fixed assets and a non-recurring legal settlement, all of which occurred in the prior year. The impact of these decreases was somewhat mitigated by an increase in wealth management income of 9% due to higher assets under management.

Non-interest expenses increased to $120.8 million for 2014 compared to $111.5 million for 2013 due primarily to the impact of $6.5 million in litigation expenses. Excluding the impact of the litigation expenses related to an adverse jury verdict, non-interest expense for the year ended December 31, 2014 was $114.3 million. This increase was driven mainly by higher bankcard losses and an adjustment to uncollectible insurance receivables. The non-GAAP efficiency ratio was 62.48% for 2014 compared to 60.06% for 2013. Excluding the loan interest recoveries in 2013, the non-GAAP efficiency ratio was 61.71%.

Conference Call

The Company’s management will host a conference call to discuss its fourth 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 1-866-235-9910. 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) February 2, 2015. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10058497.

About Sandy Spring Bancorp, Inc.

With $4.4 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 Bank traces its origin to 1868, making it among the oldest banking institutions in the region. 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 offers a broad range of commercial banking, retail banking and trust services through 44 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									Twelve Months Ended
	December 31,						%			December 31,						%
(Dollars in thousands, except per share data)	2014			2013			Change			2014			2013			Change
Results of Operations:
Net interest income	$	33,227		$	32,350			3	%	$	129,548		$	129,914			-	%
Provision (credit) for loan and lease losses		853			586			46			(163	)		(1,084	)		(85	)
Non-interest income		11,338			11,654			(3	)		46,871			47,511			(1	)
Non-interest expenses		30,478			29,300			4			120,800			111,524			8
Income before income taxes		13,234			14,118			(6	)		55,782			66,985			(17	)
Net income		9,148			9,613			(5	)		38,200			44,422			(14	)
Pre-tax pre-provision income	$	14,242		$	14,704			(3	)	$	62,138		$	65,901			(6	)
Return on average assets		0.85	%		0.93	%					0.91	%		1.11	%
Return on average common equity		6.93	%		7.71	%					7.43	%		9.11	%
Net interest margin		3.44	%		3.53	%					3.45	%		3.63	%
Efficiency ratio - GAAP basis   (1)		68.39	%		66.59	%					68.47	%		62.86	%
Efficiency ratio - Non-GAAP basis   (1)		65.89	%		63.62	%					62.48	%		60.06	%
Per share data:
Basic net income	$	0.37		$	0.38			(3	)%	$	1.53		$	1.78			(14	)%
Diluted net income	$	0.36		$	0.38			(5	)	$	1.52		$	1.77			(14	)
Average fully diluted shares		25,151,831			25,108,109			-			25,139,370			25,075,014			-
Dividends declared per share	$	0.20		$	0.18			11		$	0.76		$	0.64			19
Book value per share		20.83			19.98			4			20.83			19.98			4
Tangible book value per share		17.48			16.68			5			17.48			16.68			5
Outstanding shares		25,044,877			24,990,021			-			25,044,877			24,990,021			-
Financial Condition at period-end:
Investment securities	$	933,619		$	1,016,609			(8	)%	$	933,619		$	1,016,609			(8	)%
Loans and leases		3,127,392			2,784,266			12			3,127,392			2,784,266			12
Interest-earning assets		4,114,936			3,836,912			7			4,114,936			3,836,912			7
Assets		4,397,132			4,106,100			7			4,397,132			4,106,100			7
Deposits		3,066,509			2,877,225			7			3,066,509			2,877,225			7
Interest-bearing liabilities		2,837,204			2,744,869			3			2,837,204			2,744,869			3
Stockholders' equity		521,751			499,363			4			521,751			499,363			4
Capital ratios:
Tier 1 leverage   (4)		11.26	%		11.32	%					11.26	%		11.32	%
Tier 1 capital to risk-weighted assets   (4)		13.95	%		14.42	%					13.95	%		14.42	%
Total regulatory capital to risk-weighted assets   (4)		15.06	%		15.65	%					15.06	%		15.65	%
Tangible common equity to tangible assets   (2)		10.15	%		10.37	%					10.15	%		10.37	%
Average equity to average assets		12.21	%		12.12	%					12.26	%		12.17	%
Credit quality ratios:
Allowance for loan and lease losses to loans and leases		1.21	%		1.39	%					1.21	%		1.39	%
Non-performing loans to total loans		1.09	%		1.44	%					1.09	%		1.44	%
Non-performing assets to total assets		0.85	%		1.01	%					0.85	%		1.01	%
Allowance for loan and lease losses to non-performing loans		111.09	%		96.83	%					111.09	%		96.83	%
Annualized net charge-offs to average loans and leases    (3)		0.08	%		0.18	%					0.03	%		0.12	%

(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 December 31, 2014

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
(Dollars in thousands)	2014			2013			2014			2013
Pre-tax pre-provision income:
Net income	$	9,148		$	9,613		$	38,200		$	44,422
Plus non-GAAP adjustment:
Litigation expenses		155			-			6,519			-
Income taxes		4,086			4,505			17,582			22,563
Provision (credit) for loan and lease losses		853			586			(163	)		(1,084	)
Pre-tax pre-provision income	$	14,242		$	14,704		$	62,138		$	65,901
Efficiency ratio - GAAP basis:
Non-interest expenses	$	30,478		$	29,300		$	120,800		$	111,524
Net interest income plus non-interest income	$	44,565		$	44,004		$	176,419		$	177,425
Efficiency ratio - GAAP basis		68.39	%		66.59	%		68.47	%		62.86	%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses	$	30,478		$	29,300		$	120,800		$	111,524
Less non-GAAP adjustment:
Amortization of intangible assets		112			461			821			1,845
Litigation expenses		155			-			6,519			-
Non-interest expenses -  as adjusted	$	30,211		$	28,839		$	113,460		$	109,679
Net interest income plus non-interest income	$	44,565		$	44,004		$	176,419		$	177,425
Plus non-GAAP adjustment:
Tax-equivalent income		1,283			1,325			5,192			5,292
Less non-GAAP adjustments:
Securities gains (losses)		(3	)		(3	)		5			115
Net interest income plus non-interest income - as adjusted	$	45,851		$	45,332		$	181,606		$	182,602
Efficiency ratio - Non-GAAP basis		65.89	%		63.62	%		62.48	%		60.06	%
Tangible common equity ratio:
Total stockholders' equity	$	521,751		$	499,363		$	521,751		$	499,363
Accumulated other comprehensive income		823			2,970			823			2,970
Goodwill		(84,171	)		(84,171	)		(84,171	)		(84,171	)
Other intangible assets, net		(510	)		(1,330	)		(510	)		(1,330	)
Tangible common equity	$	437,893		$	416,832		$	437,893		$	416,832
Total assets	$	4,397,132		$	4,106,100		$	4,397,132		$	4,106,100
Goodwill		(84,171	)		(84,171	)		(84,171	)		(84,171	)
Other intangible assets, net		(510	)		(1,330	)		(510	)		(1,330	)
Tangible assets	$	4,312,451		$	4,020,599		$	4,312,451		$	4,020,599
Tangible common equity ratio		10.15	%		10.37	%		10.15	%		10.37	%
Outstanding common shares		25,044,877			24,990,021			25,044,877			24,990,021
Tangible book value per common share	$	17.48		$	16.68		$	17.48		$	16.68

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED

	December 31,			December 31,
(Dollars in thousands)	2014			2013
Assets
Cash and due from banks	$	52,804		$	46,755
Federal funds sold		473			475
Interest-bearing deposits with banks		42,940			27,197
Cash and cash equivalents		96,217			74,427
Residential mortgage loans held for sale (at fair value)		10,512			8,365
Investments available-for-sale (at fair value)		672,209			751,284
Investments held-to-maturity — fair value of $222,260 and $216,007 at December 31, 2014 and 2013, respectively		219,973			224,638
Other equity securities		41,437			40,687
Total loans and leases		3,127,392			2,784,266
Less: allowance for loan and lease losses		(37,802	)		(38,766	)
Net loans and leases		3,089,590			2,745,500
Premises and equipment, net		49,402			45,916
Other real estate owned		3,195			1,338
Accrued interest receivable		12,634			12,532
Goodwill		84,171			84,171
Other intangible assets, net		510			1,330
Other assets		117,282			115,912
Total assets	$	4,397,132		$	4,106,100
Liabilities
Noninterest-bearing deposits	$	993,737		$	836,198
Interest-bearing deposits		2,072,772			2,041,027
Total deposits		3,066,509			2,877,225
Securities sold under retail repurchase agreements and federal funds purchased		74,432			53,842
Advances from FHLB		655,000			615,000
Subordinated debentures		35,000			35,000
Accrued interest payable and other liabilities		44,440			25,670
Total liabilities		3,875,381			3,606,737
Stockholders' Equity
Common stock — par value $1.00; shares authorized 50,000,000; shares issued and outstanding 25,044,877 and
24,990,021 at December 31, 2014 and 2013, respectively		25,045			24,990
Additional paid in capital		194,647			193,445
Retained earnings		302,882			283,898
Accumulated other comprehensive loss		(823	)		(2,970	)
Total stockholders' equity		521,751			499,363
Total liabilities and stockholders' equity	$	4,397,132		$	4,106,100

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Three Months Ended December 31,						Twelve Months Ended December 31,
(Dollars in thousands, except per share data)	2014			2013			2014			2013
Interest Income:
Interest and fees on loans and leases	$	31,899		$	30,443		$	123,369		$	122,380
Interest on loans held for sale		101			91			312			929
Interest on deposits with banks		19			19			85			84
Interest and dividends on investment securities:
Taxable		3,673			4,224			15,377			16,635
Exempt from federal income taxes		2,282			2,331			9,222			9,318
Interest on fed funds sold		1			1			1			1
Total interest income		37,975			37,109			148,366			149,347
Interest Expense:
Interest on deposits		1,206			1,230			4,791			5,439
Interest on retail repurchase agreements and federal funds purchased		47			37			164			163
Interest on advances from FHLB		3,273			3,269			12,982			12,936
Interest on subordinated debt		222			223			881			895
Total interest expense		4,748			4,759			18,818			19,433
Net interest income		33,227			32,350			129,548			129,914
Provision (credit) for loan and lease losses		853			586			(163	)		(1,084	)
Net interest income after provision (credit) for loan and lease losses		32,374			31,764			129,711			130,998
Non-interest Income:
Investment securities gains (losses)		(3	)		(3	)		5			115
Service charges on deposit accounts		2,135			2,143			8,422			8,533
Mortgage banking activities		512			356			1,994			3,094
Wealth management income		4,905			4,508			19,086			17,585
Insurance agency commissions		985			1,243			4,996			4,821
Income from bank owned life insurance		627			635			2,444			2,499
Bank card fees		1,144			1,052			4,439			4,165
Other income		1,033			1,720			5,485			6,699
Total non-interest income		11,338			11,654			46,871			47,511
Non-interest Expenses:
Salaries and employee benefits		16,793			16,707			66,387			65,598
Occupancy expense of premises		3,914			3,844			13,692			13,171
Equipment expenses		1,333			1,264			5,188			4,940
Marketing		838			897			2,926			2,880
Outside data services		1,284			1,162			4,947			4,580
FDIC insurance		615			445			2,302			2,300
Amortization of intangible assets		112			461			821			1,845
Litigation expenses		155			-			6,519			-
Other expenses		5,434			4,520			18,018			16,210
Total non-interest expenses		30,478			29,300			120,800			111,524
Income before income taxes		13,234			14,118			55,782			66,985
Income tax expense		4,086			4,505			17,582			22,563
Net income	$	9,148		$	9,613		$	38,200		$	44,422
Net Income Per Share Amounts:
Basic net income per share	$	0.37		$	0.38		$	1.53		$	1.78
Diluted net income per share	$	0.36		$	0.38		$	1.52		$	1.77
Dividends declared per share	$	0.20		$	0.18		$	0.76		$	0.64

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

	2014												2013
(Dollars in thousands, except per share data)	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Profitability for the Quarter:
Tax-equivalent interest income	$	39,258		$	38,446		$	38,322		$	37,532		$	38,434		$	41,524		$	37,091		$	37,590
Interest expense		4,748			4,730			4,682			4,658			4,759			4,874			4,847			4,953
Tax-equivalent net interest income		34,510			33,716			33,640			32,874			33,675			36,650			32,244			32,637
Tax-equivalent adjustment		1,283			1,296			1,331			1,282			1,325			1,344			1,312			1,311
Provision for loan and lease losses		853			(192	)		158			(982	)		586			1,128			(2,876	)		78
Non-interest income		11,338			12,590			11,694			11,249			11,654			11,223			12,215			12,419
Non-interest expenses		30,478			28,632			34,141			27,549			29,300			26,893			27,508			27,823
Income before income taxes		13,234			16,570			9,704			16,274			14,118			18,508			18,515			15,844
Income tax expense		4,086			5,428			2,722			5,346			4,505			6,419			6,353			5,286
Net income	$	9,148		$	11,142		$	6,982		$	10,928		$	9,613		$	12,089		$	12,162		$	10,558
Financial Performance:
Pre-tax pre-provision income	$	14,242		$	16,614		$	15,990		$	15,292		$	14,704		$	19,636		$	15,639		$	15,922
Return on average assets		0.85	%		1.05	%		0.67	%		1.08	%		0.93	%		1.19	%		1.23	%		1.08	%
Return on average common equity		6.93	%		8.54	%		5.47	%		8.80	%		7.71	%		9.91	%		9.98	%		8.85	%
Net interest margin		3.44	%		3.42	%		3.48	%		3.47	%		3.53	%		3.88	%		3.51	%		3.59	%
Efficiency ratio - GAAP basis (1)		68.39	%		63.61	%		77.59	%		64.31	%		66.59	%		57.80	%		63.75	%		63.60	%
Efficiency ratio - Non-GAAP basis (1)		65.89	%		61.09	%		61.30	%		61.60	%		63.62	%		55.21	%		60.92	%		60.80	%
Per Share Data:
Basic net income per share	$	0.37		$	0.44		$	0.28		$	0.44		$	0.38		$	0.48		$	0.49		$	0.42
Diluted net income per share	$	0.36		$	0.44		$	0.28		$	0.43		$	0.38		$	0.48		$	0.49		$	0.42
Average fully diluted shares		25,151,831			25,151,582			25,127,036			25,124,206			25,108,109			25,070,506			25,009,092			25,002,612
Dividends declared per common share	$	0.20		$	0.20		$	0.18		$	0.18		$	0.18		$	0.16		$	0.16		$	0.14
Non-interest Income:
Securities gains (losses)	$	(3	)	$	8		$	-		$	-		$	(3	)	$	-		$	62		$	56
Service charges on deposit accounts		2,135			2,226			2,089			1,972			2,143			2,171			2,150			2,069
Mortgage banking activities		512			596			570			316			356			(26	)		1,237			1,527
Wealth management income		4,905			4,974			4,741			4,466			4,508			4,503			4,532			4,042
Insurance agency commissions		985			1,410			961			1,640			1,243			1,193			1,036			1,349
Income from bank owned life insurance		627			611			608			598			635			629			623			612
Bank card fees		1,144			1,148			1,169			978			1,052			1,077			1,079			957
Other income		1,033			1,617			1,556			1,279			1,720			1,676			1,496			1,807
Total Non-interest Income	$	11,338		$	12,590		$	11,694		$	11,249		$	11,654		$	11,223		$	12,215		$	12,419
Non-interest Expense:
Salaries and employee benefits	$	16,793		$	16,765		$	16,474		$	16,355		$	16,707		$	16,382		$	16,163		$	16,346
Occupancy expense of premises		3,914			3,032			3,274			3,472			3,844			3,149			2,996			3,182
Equipment expenses		1,333			1,337			1,262			1,256			1,264			1,200			1,227			1,249
Marketing		838			744			802			542			897			713			755			515
Outside data services		1,284			1,231			1,216			1,216			1,162			1,152			1,114			1,152
FDIC insurance		615			594			573			520			445			678			581			596
Amortization of intangible assets		112			115			224			370			461			462			461			461
Litigation expenses		155			236			6,128			-			-			-			-			-
Professional fees		1,246			1,092			1,292			914			1,386			511			1,332			1,250
Other real estate owned expenses		2			40			9			-			91			(150	)		(281	)		37
Other expenses		4,186			3,446			2,887			2,904			3,043			2,796			3,160			3,035
Total Non-interest Expense	$	30,478		$	28,632		$	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

	2014												2013
(Dollars in thousands)	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Balance Sheets at Quarter End:
Residential mortgage loans	$	717,886		$	698,925		$	668,536		$	640,939		$	618,381		$	595,180		$	565,282		$	538,346
Residential construction loans		136,741			141,883			149,321			143,109			129,177			118,316			116,736			122,698
Commercial ADC loans		205,124			194,666			178,972			163,343			160,696			158,739			163,309			150,599
Commercial investor real estate loans		640,193			575,984			577,813			573,634			552,178			518,029			497,365			487,802
Commercial owner occupied real estate loans		611,061			584,964			581,795			582,472			592,823			569,350			563,258			565,820
Commercial business loans		390,781			368,611			357,472			348,180			356,651			332,670			334,979			344,489
Leasing		54			156			260			439			703			962			1,415			1,974
Consumer loans		425,552			410,723			396,775			380,697			373,657			368,764			363,114			353,341
Total loans and leases		3,127,392			2,975,912			2,910,944			2,832,813			2,784,266			2,662,010			2,605,458			2,565,069
Allowance for loan and lease losses		(37,802	)		(37,574	)		(37,959	)		(38,026	)		(38,766	)		(39,422	)		(39,015	)		(41,246	)
Investment securities		933,619			950,869			980,530			997,584			1,016,609			1,077,951			1,102,209			1,008,693
Interest-earning assets		4,114,936			3,976,731			3,945,643			3,891,223			3,836,912			3,771,825			3,802,682			3,660,809
Total assets		4,397,132			4,248,731			4,234,342			4,168,998			4,106,100			4,052,969			4,072,617			3,932,026
Noninterest-bearing demand deposits		993,737			986,549			984,700			882,169			836,198			890,319			877,891			832,679
Total deposits		3,066,509			3,028,788			3,038,670			2,959,195			2,877,225			2,916,466			2,926,650			2,919,208
Customer repurchase agreements		74,432			71,384			72,917			67,038			53,842			53,177			54,731			50,302
Total interest-bearing liabilities		2,837,204			2,706,623			2,698,887			2,748,064			2,744,869			2,634,324			2,678,490			2,576,831
Total stockholders' equity		521,751			522,404			517,269			510,386			499,363			493,882			485,643			488,947
Quarterly Average Balance Sheets:
Residential mortgage loans	$	717,671		$	689,531		$	659,172		$	633,160		$	614,698		$	593,335		$	579,899		$	575,889
Residential construction loans		141,890			147,750			145,968			134,261			125,744			120,676			119,197			120,283
Commercial ADC loans		201,020			180,293			168,063			162,544			156,558			158,557			160,483			148,749
Commercial investor real estate loans		607,050			577,851			575,283			557,168			522,085			499,896			485,630			474,062
Commercial owner occupied real estate loans		594,634			585,014			579,953			584,155			580,808			566,366			561,249			567,723
Commercial business loans		367,872			367,203			348,597			349,734			357,455			331,374			337,843			347,569
Leasing		114			206			352			567			817			1,152			1,644			2,510
Consumer loans		417,910			404,062			390,076			377,822			373,017			366,562			360,842			357,366
Total loans and leases		3,048,161			2,951,910			2,867,464			2,799,411			2,731,182			2,637,918			2,606,787			2,594,151
Investment securities		942,782			965,206			991,135			1,012,701			1,055,432			1,097,643			1,047,726			1,051,769
Interest-earning assets		4,022,051			3,954,858			3,893,843			3,845,513			3,817,033			3,770,855			3,692,215			3,677,444
Total assets		4,292,237			4,220,084			4,157,559			4,105,225			4,082,839			4,039,069			3,959,907			3,946,578
Noninterest-bearing demand deposits		1,000,285			956,830			899,287			825,968			872,532			862,046			838,502			797,926
Total deposits		3,063,591			3,036,686			2,965,329			2,876,641			2,901,814			2,903,926			2,892,704			2,860,451
Customer repurchase agreements		78,746			73,046			68,880			62,864			57,682			56,766			55,941			52,622
Total interest-bearing liabilities		2,731,791			2,711,206			2,716,537			2,749,459			2,679,812			2,659,406			2,599,704			2,631,198
Total stockholders' equity		524,063			517,534			511,738			503,851			494,779			483,811			489,014			483,664
Financial Measures:
Average equity to average assets		12.21	%		12.26	%		12.31	%		12.27	%		12.12	%		11.98	%		12.35	%		12.26	%
Investment securities to earning assets		22.69	%		23.91	%		24.85	%		25.64	%		26.50	%		28.58	%		28.99	%		27.55	%
Loans to earning assets		76.00	%		74.83	%		73.78	%		72.80	%		72.57	%		70.58	%		68.52	%		70.07	%
Loans to assets		71.12	%		70.04	%		68.75	%		67.95	%		67.81	%		65.68	%		63.98	%		65.24	%
Loans to deposits		101.99	%		98.25	%		95.80	%		95.73	%		96.77	%		91.28	%		89.03	%		87.87	%
Capital Measures:
Tier 1 leverage  (1)		11.26	%		11.26	%		11.37	%		11.43	%		11.32	%		11.29	%		11.28	%		11.07	%
Tier 1 capital to risk-weighted assets  (1)		13.95	%		13.95	%		14.48	%		14.64	%		14.42	%		14.45	%		14.30	%		14.23	%
Total regulatory capital to risk-weighted assets  (1)		15.06	%		15.06	%		15.66	%		15.85	%		15.65	%		15.70	%		15.55	%		15.48	%
Book value per share	$	20.83		$	20.83		$	20.63		$	20.38		$	19.98		$	19.77		$	19.45		$	19.59
Outstanding shares		25,044,877			25,076,794			25,069,700			25,043,482			24,990,021			24,985,146			24,967,558			24,954,892

(1) Estimated ratio at December 31, 2014

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

	2014								2013
(Dollars in thousands)	December 31,		September 30,		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		-		649		-		-		-		-		-		-
Leasing		-		-		-		-		-		-		-		-
Consumer		-		6		3		-		1		10		-		54
Residential real estate:
Residential mortgage		-		-		-		-		-		-		-		-
Residential construction		-		-		-		-		-		-		-		-
Total loans and leases 90 days past due		-		655		4		-		1		10		15		54
Non-accrual loans and leases:
Commercial business		3,184		4,151		4,309		3,272		3,400		4,050		4,483		4,012
Commercial real estate:
Commercial AD&C		2,464		3,792		3,739		4,133		4,127		5,086		5,885		5,826
Commercial investor real estate		8,156		8,210		6,731		7,284		6,802		6,877		11,741		12,353
Commercial owner occupied real estate		8,941		10,742		10,868		7,150		5,936		4,202		5,413		5,346
Leasing		-		-		-		-		-		-		-		-
Consumer		1,668		1,830		2,058		2,115		2,259		2,004		2,305		2,388
Residential real estate:
Residential mortgage		3,012		4,417		4,501		5,025		5,735		5,643		5,581		5,393
Residential construction		1,105		2,497		2,143		2,304		2,315		2,327		2,558		3,258
Total non-accrual loans and leases		28,530		35,639		34,349		31,283		30,574		30,189		37,966		38,576
Total restructured loans - accruing		5,497		7,382		7,364		7,411		9,459		8,054		8,213		10,839
Total non-performing loans and leases		34,027		43,676		41,717		38,694		40,034		38,253		46,194		49,469
Other assets and real estate owned (OREO)		3,195		1,762		1,967		1,619		1,338		1,662		4,831		5,250
Total non-performing assets	$	37,222	$	45,438	$	43,684	$	40,313	$	41,372	$	39,915	$	51,025	$	54,719

	For the quarter ended,
	December 31,			September 30,			June 30,			March 31,			December 31,			September 30,			June 30,			March 31,
(Dollars in thousands)	2014			2014			2014			2014			2013			2013			2013			2013
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period	$	35,639		$	34,349		$	31,283		$	30,574		$	30,189		$	37,966		$	38,576		$	47,548
Non-accrual balances transferred to OREO		(1,475	)		(300	)		(390	)		(281	)		(365	)		(723	)		(1,426	)		(92	)
Non-accrual balances charged-off		(1,033	)		(216	)		(357	)		(513	)		(922	)		(4,995	)		(668	)		(2,175	)
Net payments or draws		(4,139	)		(590	)		(1,580	)		(1,073	)		(971	)		(13,547	)		(3,560	)		(11,768	)
Loans placed on non-accrual		779			2,396			5,393			2,576			3,546			11,488			5,044			5,493
Non-accrual loans brought current		(1,241	)		-			-			-			(903	)		-			-			(430	)
Balance at end of period	$	28,530		$	35,639		$	34,349		$	31,283		$	30,574		$	30,189		$	37,966		$	38,576
Analysis of Allowance for Loan Losses:
Balance at beginning of period	$	37,574		$	37,959		$	38,026		$	38,766		$	39,422		$	39,015		$	41,246		$	42,957
Provision (credit) for loan and lease losses		853			(192	)		158			(982	)		586			1,128			(2,876	)		78
Less loans charged-off, net of recoveries:
Commercial business		50			(58	)		28			(768	)		384			1			(32	)		1,744
Commercial real estate:
Commercial AD&C		529			-			-			-			85			(616	)		(1,444	)		(1,020	)
Commercial investor real estate		(5	)		(2	)		(23	)		(5	)		23			1,243			123			31
Commercial owner occupied real estate		(6	)		-			265			-			(82	)		(284	)		100			81
Leasing		-			-			-			-			-			(6	)		(4	)		-
Consumer		83			244			11			331			488			169			490			508
Residential real estate:
Residential mortgage		(17	)		43			(27	)		203			347			216			22			447
Residential construction		(9	)		(34	)		(29	)		(3	)		(3	)		(2	)		100			(2	)
Net charge-offs		625			193			225			(242	)		1,242			721			(645	)		1,789
Balance at end of period	$	37,802		$	37,574		$	37,959		$	38,026		$	38,766		$	39,422		$	39,015		$	41,246
Asset Quality Ratios:
Non-performing loans to total loans		1.09	%		1.47	%		1.43	%		1.37	%		1.44	%		1.44	%		1.77	%		1.93	%
Non-performing assets to total assets		0.85	%		1.07	%		1.03	%		0.97	%		1.01	%		0.98	%		1.25	%		1.39	%
Allowance for loan losses to loans		1.21	%	��	1.26	%		1.30	%		1.34	%		1.39	%		1.48	%		1.50	%		1.61	%
Allowance for loan losses to non-performing loans		111.09	%		86.03	%		90.99	%		98.27	%		96.83	%		103.06	%		84.46	%		83.38	%
Annualized net charge-offs to average loans		0.08	%		0.03	%		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 December 31,
	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)	$	717,671		$	6,086			3.42	%	$	614,698		$	5,384		3.49	%
Residential construction loans		141,890			1,328			3.71			125,744			1,189		3.75
Commercial ADC loans		201,020			2,364			4.67			156,558			2,057		5.21
Commercial investor real estate loans		607,050			7,320			4.78			522,085			6,974		5.30
Commercial owner occupied real estate loans		594,634			7,282			5.02			580,808			7,230		5.10
Commercial business loans		367,872			4,132			4.48			357,455			4,520		4.97
Leasing		114			1			6.56			817			14		6.81
Consumer loans		417,910			3,487			3.33			373,017			3,166		3.39
Total loans and leases (3)		3,048,161			32,000			4.21			2,731,182			30,534		4.47
Taxable securities		643,233			4,031			2.49			751,796			4,597		2.43
Tax-exempt securities (4)		299,549			3,207			4.25			303,636			3,283		4.29
Interest-bearing deposits with banks		30,635			19			0.25			29,944			19		0.25
Federal funds sold		473			1			0.22			475			1		0.22
Total interest-earning assets		4,022,051			39,258			3.91			3,817,033			38,434		4.03
Less:  allowance for loan and lease losses		(38,291	)								(39,775	)
Cash and due from banks		48,729									45,549
Premises and equipment, net		47,552									46,545
Other assets		212,196									213,487
Total assets	$	4,292,237								$	4,082,839
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	510,025			119			0.09	%	$	443,959			93		0.08	%
Regular savings deposits		261,564			34			0.05			239,382			45		0.08
Money market savings deposits		842,158			277			0.13			876,014			283		0.13
Time deposits		449,559			776			0.68			469,927			809		0.68
Total interest-bearing deposits		2,063,306			1,206			0.23			2,029,282			1,230		0.24
Other borrowings		78,746			47			0.23			61,780			37		0.24
Advances from FHLB		554,739			3,273			2.34			553,750			3,269		2.34
Subordinated debentures		35,000			222			2.54			35,000			223		2.55
Total interest-bearing liabilities		2,731,791			4,748			0.69			2,679,812			4,759		0.70
Noninterest-bearing demand deposits		1,000,285									872,532
Other liabilities		36,098									35,716
Stockholders' equity		524,063									494,779
Total liabilities and stockholders' equity	$	4,292,237								$	4,082,839
Net interest income and spread				$	34,510			3.22	%				$	33,675		3.33	%
Less: tax-equivalent adjustment					1,283									1,325
Net interest income				$	33,227								$	32,350
Interest income/earning assets								3.91	%							4.03	%
Interest expense/earning assets								0.47								0.50
Net interest margin								3.44	%							3.53	%

(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

	Twelve Months Ended December 31,
	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)	$	675,155		$	23,171		3.43	%	$	591,068		$	21,385		3.62	%
Residential construction loans		142,503			5,316		3.73			121,488			4,331		3.57
Commercial ADC loans		178,092			8,814		4.95			156,115			9,596		6.15
Commercial investor real estate loans		579,471			28,201		4.87			495,562			27,901		5.63
Commercial owner occupied real estate loans		585,965			28,586		5.04			569,065			29,696		5.36
Commercial business loans		358,425			16,400		4.59			343,554			17,807		5.07
Leasing		308			17		5.64			1,525			102		6.70
Consumer loans		397,595			13,176		3.34			364,495			12,491		3.45
Total loans and leases (3)		2,917,514			123,681		4.27			2,642,872			123,309		4.69
Taxable securities		676,237			16,817		2.49			761,713			18,133		2.38
Tax-exempt securities (4)		301,493			12,974		4.30			301,534			13,112		4.35
Interest-bearing deposits with banks		33,902			85		0.25			33,261			84		0.25
Federal funds sold		474			1		0.22			475			1		0.22
Total interest-earning assets		3,929,620			153,558		3.93			3,739,855			154,639		4.15
Less:  allowance for loan and lease losses		(38,556	)							(41,606	)
Cash and due from banks		46,224								45,836
Premises and equipment, net		46,275								47,244
Other assets		210,643								216,082
Total assets	$	4,194,206							$	4,007,411
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	484,171			425		0.09	%	$	438,183			373		0.09	%
Regular savings deposits		259,066			165		0.06			238,818			204		0.09
Money market savings deposits		864,029			1,116		0.13			879,588			1,414		0.16
Time deposits		457,778			3,085		0.67			490,278			3,448		0.70
Total interest-bearing deposits		2,065,044			4,791		0.23			2,046,867			5,439		0.27
Other borrowings		70,933			164		0.23			60,249			163		0.27
Advances from FHLB		556,178			12,982		2.33			500,593			12,936		2.58
Subordinated debentures		35,000			881		2.52			35,000			895		2.56
Total interest-bearing liabilities		2,727,155			18,818		0.69			2,642,709			19,433		0.74
Noninterest-bearing demand deposits		921,169								843,008
Other liabilities		31,675								33,858
Stockholders' equity		514,207								487,836
Total liabilities and stockholders' equity	$	4,194,206							$	4,007,411
Net interest income and spread				$	134,740		3.24	%				$	135,206		3.41	%
Less: tax-equivalent adjustment					5,192								5,292
Net interest income				$	129,548							$	129,914
Interest income/earning assets							3.93	%							4.15	%
Interest expense/earning assets							0.48								0.52
Net interest margin							3.45	%							3.63	%

(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 $5.2 million and $5.3 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.