Sandy Spring Bancorp (SASR) 8-K Sandy Spring Bancorp Reports Net Income of $10.3 Million for the Second Quarter

Exhibit 99.1

  News release

FOR IMMEDIATE RELEASE

SANDY SPRING BANCORP REPORTS NET INCOME OF $10.3 MILLION FOR THE SECOND QUARTER

OLNEY, MARYLAND, July 16, 2015 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today reported net income for the second quarter of 2015 of $10.3 million ($0.42 per diluted share) compared to net income of $7.0 million ($0.28 per diluted share) for the second quarter of 2014 and net income of $11.2 million ($0.45 per diluted share) for the first quarter of 2015. Results for the second quarter of 2014 included a $6.1 million pre-tax accrual for litigation expenses.

For the six months ended June 30, 2015, net income was $21.6 million ($0.87 per diluted share) compared to net income of $17.9 million ($0.71 per diluted share) for the same period of the prior year.

“Our second quarter results reflect continued momentum from the first quarter as growth in net interest income from a larger loan portfolio and income from mortgage banking and wealth management led the way,” said Daniel J. Schrider, President and Chief Executive Officer.

“This momentum is also demonstrated by balance sheet growth within each loan portfolio and overall deposit growth on a linked quarter basis,” continued Schrider.

“I am especially pleased to announce the receipt of the 2015 CX Innovation Award from the Customer Experience Professionals Association, an international organization headquartered in the Boston area. Sandy Spring Bank is one of only five companies across the country to receive this prestigious award, which gives further proof of our dedication to providing a consistent and remarkable experience to all of our clients,” said Schrider.

Second Quarter Highlights:

· Total loans increased 13% compared to the second quarter of 2014 and were up 4% compared to the first quarter of 2015. This increase was driven primarily by year-over-year growth of 16% in the commercial loan portfolio.

· Combined noninterest-bearing and interest-bearing transactionaccount balances increased 11% to $1.6 billion at June 30, 2015 as compared to $1.5 billion at June 30, 2014.

· The provision for loan and lease losses for the second quarter of 2015 was a charge of $1.2 million compared to charges of $0.2 million for the second quarter of 2014 and $0.6 million for the first quarter of 2015.

· The net interest margin was 3.42% for the second quarter of 2015, compared to 3.48% for the second quarter of 2014 and 3.44% for the first quarter of 2015.

· Non-interest income increased 4% for the quarter compared to the prior year quarter primarily due to increases in income from wealth management and mortgage banking. Non-interest income decreased 8% compared to the linked quarter due to seasonal declines in insurance agency commissions.

· During the second quarter of 2015, the Company repurchased 224,103 shares at an average price of $26.23 per share as part of its existing share repurchase program. For the year-to-date, the Company has repurchased 575,472 shares at an average price of $25.92 per share.

Review of Balance Sheet and Credit Quality

Total assets grew 6% to $4.5 billion at June 30, 2015 compared to $4.2 billion at June 30, 2014. This growth was driven by a 13% increase in the loan portfolio as total loans and leases ended the period at $3.3 billion.

At June 30, 2015, combined noninterest-bearing and interest-bearing checking account balances, a primary driver of multiple-product banking relationships with clients, increased 11% compared to balances at June 30, 2014. Total deposits and certain other short-term borrowings that comprise the funding sources derived from customers increased 8% compared to June 30, 2014.

Tangible common equity totaled $435 million at June 30, 2015 compared to $427 million at June 30, 2014. The ratio of tangible common equity to tangible assets decreased to 9.84% at June 30, 2015 from 10.29% at June 30, 2014 due primarily to the growth in assets and continued share repurchases. Dividends per common share were $0.44 per share for the first six months of 2015 compared to $0.36 per common share for the first six months of 2014, a 22% increase. At June 30, 2015, the Company had a total risk-based capital ratio of 14.65%, a common equity tier 1 risk-based capital ratio of 12.53%, a tier 1 risk-based capital ratio of 13.54% and a tier 1 leverage ratio of 10.83%.

Non-performing loans totaled $37.3 million at June 30, 2015 compared to $41.7 million at June 30, 2014 and $36.0 million at March 31, 2015. The level of non-performing loans to total loans decreased to 1.13% at June 30, 2015 compared to 1.43% at June 30, 2014 due to growth in the overall loan portfolio. The increase in non-performing loans at June 30, 2015 compared to March 31, 2015 was driven primarily by two residential mortgage loan credits totaling $4.6 million that were moved to nonaccrual status during the quarter. This was somewhat offset by several pay downs on such loans.

Loan charge-offs virtually equaled recoveries for the second quarter of 2015, while net loan charge-offs totaled $0.2 million for the second quarter of 2014 and of $0.9 million for the first quarter of 2015. The allowance for loan and lease losses represented 1.18% of outstanding loans and leases and 104% of non-performing loans at June 30, 2015 compared to 1.30% of outstanding loans and leases and 91% of non-performing loans at June 30, 2014. 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 2015 increased 5% compared to the second quarter of 2014. The net interest margin was 3.42% for the second quarter of 2015 compared to 3.48% for the second quarter of 2014.

The provision for loan and lease losses was a charge of $1.2 million for the second quarter of 2015 compared to a charge of $0.2 million for the second quarter of 2014 and a charge of $0.6 million for the first quarter of 2015. The current quarter’s charge reflects the growth in the loan portfolio.

Non-interest income increased 4% to $12.1 million for the second quarter of 2015 compared to $11.7 million for the second quarter of 2014. The increase in non-interest income for the quarter compared to the prior year quarter was due primarily to increases in income from wealth management due to growth in assets under management and mortgage banking due primarily to higher mortgage origination volumes.

Non-interest expenses decreased 14% to $29.5 million for the second quarter of 2015 compared to $34.1 million in the second quarter of 2014. Excluding $6.1 million of litigation expenses recognized in the second quarter of 2014, non-interest expenses increased 5% from the prior year. The current quarter included increases in salaries and benefits, equipment and marketing expenses. The non-GAAP efficiency ratio was 61.35% for the second quarter of 2015 compared to 61.30% for the second quarter of 2014.

Net interest income for the first six months of 2015 increased 5% compared to the first six months of 2014 due primarily to an increase in average loans. The net interest margin was 3.43% for the first six months of 2015 compared to 3.48% for the first six months of 2014.

The provision for loan and lease losses was a charge of $1.8 million for the first six months of 2015 compared to a credit of $0.8 million for the first six months of 2014. The change in the provision for the year-to-date period reflects the growth in the loan portfolio over the prior year period.

Non-interest income increased 10% to $25.3 million for the first six months of 2015 compared to $22.9 million for the first six months of 2014. This increase was driven by increases in income from wealth management due to growth in assets under management and mortgage banking due primarily to higher mortgage origination volumes. Other non-interest income increased due to higher gains on sales of SBA loans and loan prepayment fees.

Non-interest expenses decreased 5% to $58.7 million for the first six months of 2015 compared to $61.7 million for the first six months of 2014. Excluding the litigation expenses previously mentioned, non-interest expenses increased 5% over the prior year period. The current year-to-date included increases in salaries and benefits and other non-interest expenses that were somewhat offset by a decline in intangibles amortization. The non-GAAP efficiency ratio was 60.74% for the first six months of 2015 compared to 61.45% for the first six months of 2014.

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 1-866-235-9910. 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) July 30, 2015. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10068751.

About Sandy Spring Bancorp, Inc.

With $4.5 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, 2014, 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)	2015			2014			Change			2015			2014			Change
Results of Operations:
Net interest income	$	33,933		$	32,309			5	%	$	67,306		$	63,901			5	%
Provision (credit) for loan and lease losses		1,218			158			n.m			1,815			(824	)		n.m
Non-interest income		12,109			11,694			4			25,268			22,943			10
Non-interest expenses		29,477			34,141			(14	)		58,721			61,690			(5	)
Income before income taxes		15,347			9,704			58			32,038			25,978			23
Net income		10,333			6,982			48			21,558			17,910			20
Pre-tax pre-provision income	$	16,727		$	15,990			5		$	34,215		$	31,282			9
Return on average assets		0.93	%		0.67	%					0.99	%		0.87	%
Return on average common equity		8.02	%		5.47	%					8.37	%		7.11	%
Net interest margin		3.42	%		3.48	%					3.43	%		3.48	%
Efficiency ratio - GAAP basis   (1)		64.02	%		77.59	%					63.43	%		71.04	%
Efficiency ratio - Non-GAAP basis   (1)		61.35	%		61.30	%					60.74	%		61.45	%
Per share data:
Basic net income	$	0.42		$	0.28			50	%	$	0.87		$	0.72			21	%
Diluted net income	$	0.42		$	0.28			50		$	0.87		$	0.71			23
Average fully diluted shares		24,689,762			25,127,036			(2	)		24,867,988			25,126,369			(1	)
Dividends declared per share	$	0.22		$	0.18			22		$	0.44		$	0.36			22
Book value per share		21.12			20.63			2			21.12			20.63			2
Tangible book value per share		17.71			17.04			4			17.71			17.04			4
Outstanding shares		24,562,471			25,069,700			(2	)		24,562,471			25,069,700			(2	)
Financial Condition at period-end:
Investment securities	$	878,284		$	980,530			(10	)%	$	878,284		$	980,530			(10	)%
Loans and leases		3,288,865			2,910,944			13			3,288,865			2,910,944			13
Interest-earning assets		4,222,667			3,945,643			7			4,222,667			3,945,643			7
Assets		4,507,367			4,234,342			6			4,507,367			4,234,342			6
Deposits		3,247,346			3,038,670			7			3,247,346			3,038,670			7
Interest-bearing liabilities		2,851,750			2,698,887			6			2,851,750			2,698,887			6
Stockholders' equity		518,873			517,269			-			518,873			517,269			-
Capital ratios:
Tier 1 leverage   (4)		10.83	%		11.37	%					10.83	%		11.37	%
Tier 1 capital to risk-weighted assets   (4)		13.54	%		14.48	%					13.54	%		14.48	%
Total regulatory capital to risk-weighted assets   (4)		14.65	%		15.66	%					14.65	%		15.66	%
Common equity tier 1 capital to risk-weighted assets   (4)		12.53	%		n.a.	%					12.53	%		n.a.	%
Tangible common equity to tangible assets   (2)		9.84	%		10.29	%					9.84	%		10.29	%
Average equity to average assets		11.65	%		12.31	%					11.78	%		12.29	%
Credit quality ratios:
Allowance for loan and lease losses to loans and leases		1.18	%		1.30	%					1.18	%		1.30	%
Non-performing loans to total loans		1.13	%		1.43	%					1.13	%		1.43	%
Non-performing assets to total assets		0.93	%		1.03	%					0.93	%		1.03	%
Allowance for loan and lease losses to non-performing loans		103.71	%		90.99	%					103.71	%		90.99	%
Annualized net charge-offs to average loans and leases    (3)		-	%		0.03	%					0.06	%		-	%

(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, 2015

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

		Three Months Ended							Six Months Ended
		June 30,							June 30,
(Dollars in thousands)		2015				2014			2015			2014
Pre-tax pre-provision income:
Net income		$	10,333			$	6,982		$	21,558		$	17,910
Plus non-GAAP adjustment:
Litigation expenses			162				6,128			362			6,128
Income taxes			5,014		��		2,722			10,480			8,068
Provision (credit) for loan and lease losses			1,218				158			1,815			(824	)
Pre-tax pre-provision income		$	16,727			$	15,990		$	34,215		$	31,282
Efficiency ratio - GAAP basis:
Non-interest expenses		$	29,477			$	34,141		$	58,721		$	61,690
Net interest income plus non-interest income		$	46,042			$	44,003		$	92,574		$	86,844
Efficiency ratio - GAAP basis			64.02	%			77.59	%		63.43	%		71.04	%
Efficiency ratio - Non-GAAP basis:
Non-interest expenses		$	29,477			$	34,141		$	58,721		$	61,690
Less non-GAAP adjustment:
Amortization of intangible assets			106				224			213			594
Litigation expenses			162				6,128			362			6,128
Non-interest expenses -  as adjusted		$	29,209			$	27,789		$	58,146		$	54,968
Net interest income plus non-interest income		$	46,042			$	44,003		$	92,574		$	86,844
Plus non-GAAP adjustment:
Tax-equivalent income			1,589				1,331			3,153			2,613
Less non-GAAP adjustments:
Securities gains (losses)			19				-			-			-
Net interest income plus non-interest income - as adjusted		$	47,612			$	45,334		$	95,727		$	89,457
Efficiency ratio - Non-GAAP basis			61.35	%			61.30	%		60.74	%		61.45	%
Tangible common equity ratio:
Total stockholders' equity		$	518,873			$	517,269		$	518,873		$	517,269
Accumulated other comprehensive income			592				(5,233	)		592			(5,233	)
Goodwill			(84,171	)			(84,171	)		(84,171	)		(84,171	)
Other intangible assets, net			(296	)			(737	)		(296	)		(737	)
Tangible common equity		$	434,998			$	427,128		$	434,998		$	427,128
Total assets		$	4,507,367			$	4,234,342		$	4,507,367		$	4,234,342
Goodwill	��		(84,171	)			(84,171	)		(84,171	)		(84,171	)
Other intangible assets, net			(296	)			(737	)		(296	)		(737	)
Tangible assets		$	4,422,900			$	4,149,434		$	4,422,900		$	4,149,434
Tangible common equity ratio			9.84	%			10.29	%		9.84	%		10.29	%
Outstanding common shares			24,562,471				25,069,700			24,562,471			25,069,700
Tangible book value per common share		$	17.71			$	17.04		$	17.71		$	17.04

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED

	June 30,			December 31,			June 30,
(Dollars in thousands)	2015			2014			2014
Assets
Cash and due from banks	$	53,569		$	52,804		$	65,674
Federal funds sold		472			473			474
Interest-bearing deposits with banks		35,601			42,940			44,653
Cash and cash equivalents		89,642			96,217			110,801
Residential mortgage loans held for sale (at fair value)		19,445			10,512			9,042
Investments available-for-sale (at fair value)		625,819			672,209			720,885
Investments held-to-maturity -- fair value of $217,880, $222,260 and $224,313 at June 30, 2015, December 31, 2014 and June 30, 2014, respectively		216,866			219,973			223,518
Other equity securities		35,599			41,437			36,127
Total loans and leases		3,288,865			3,127,392			2,910,944
Less: allowance for loan and lease losses		(38,713	)		(37,802	)		(37,959	)
Net loans and leases		3,250,152			3,089,590			2,872,985
Premises and equipment, net		51,609			49,402			45,296
Other real estate owned		4,514			3,195			1,967
Accrued interest receivable		13,144			12,634			12,271
Goodwill		84,171			84,171			84,171
Other intangible assets, net		296			510			737
Other assets		116,110			117,282			116,542
Total assets	$	4,507,367		$	4,397,132		$	4,234,342
Liabilities
Noninterest-bearing deposits	$	1,092,413		$	993,737		$	984,700
Interest-bearing deposits		2,154,933			2,072,772			2,053,970
Total deposits		3,247,346			3,066,509			3,038,670
Securities sold under retail repurchase agreements and federal funds purchased		111,817			74,432			72,917
Advances from FHLB		550,000			655,000			537,000
Subordinated debentures		35,000			35,000			35,000
Accrued interest payable and other liabilities		44,331			44,440			33,486
Total liabilities		3,988,494			3,875,381			3,717,073
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,562,471, 25,044,877 and 25,069,700 at June 30, 2015, December 31, 2014 and June 30, 2014, respectively		24,562			25,045			25,070
Additional paid in capital		181,504			194,647			194,252
Retained earnings		313,399			302,882			292,714
Accumulated other comprehensive income (loss)		(592	)		(823	)		5,233
Total stockholders' equity		518,873			521,751			517,269
Total liabilities and stockholders' equity	$	4,507,367		$	4,397,132		$	4,234,342

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)	2015		2014		2015		2014
Interest Income:
Interest and fees on loans and leases	$	33,031	$	30,706	$	65,170	$	60,440
Interest on loans held for sale		132		71		208		130
Interest on deposits with banks		22		22		44		42
Interest and dividends on investment securities:
Taxable		3,850		3,876		7,427		7,992
Exempt from federal income taxes		1,814		2,316		4,072		4,637
Total interest income		38,849		36,991		76,921		73,241
Interest Expense:
Interest on deposits		1,367		1,193		2,561		2,377
Interest on retail repurchase agreements and federal funds purchased		60		37		110		75
Interest on advances from FHLB		3,266		3,233		6,502		6,451
Interest on subordinated debt		223		219		442		437
Total interest expense		4,916		4,682		9,615		9,340
Net interest income		33,933		32,309		67,306		63,901
Provision (credit) for loan and lease losses		1,218		158		1,815		(824	)
Net interest income after provision (credit) for loan and lease losses		32,715		32,151		65,491		64,725
Non-interest Income:
Investment securities gains		19		-		19		-
Service charges on deposit accounts		1,839		2,089		3,721		4,061
Mortgage banking activities		822		570		2,000		886
Wealth management income		5,161		4,741		10,077		9,207
Insurance agency commissions		881		961		2,499		2,601
Income from bank owned life insurance		606		608		1,319		1,206
Bank card fees		1,220		1,169		2,277		2,147
Other income		1,561		1,556		3,356		2,835
Total non-interest income		12,109		11,694		25,268		22,943
Non-interest Expenses:
Salaries and employee benefits		17,534		16,474		34,833		32,829
Occupancy expense of premises		3,173		3,274		6,662		6,746
Equipment expenses		1,490		1,262		2,863		2,518
Marketing		942		802		1,473		1,344
Outside data services		1,102		1,216		2,363		2,432
FDIC insurance		654		573		1,285		1,093
Amortization of intangible assets		106		224		213		594
Litigation expenses		162		6,128		362		6,128
Other expenses		4,314		4,188		8,667		8,006
Total non-interest expenses		29,477		34,141		58,721		61,690
Income before income taxes		15,347		9,704		32,038		25,978
Income tax expense		5,014		2,722		10,480		8,068
Net income	$	10,333	$	6,982	$	21,558	$	17,910
Net Income Per Share Amounts:
Basic net income per share	$	0.42	$	0.28	$	0.87	$	0.72
Diluted net income per share	$	0.42	$	0.28	$	0.87	$	0.71
Dividends declared per share	$	0.22	$	0.18	$	0.44	$	0.36

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

	2015						2014
(Dollars in thousands, except per share data)	Q2			Q1			Q4			Q3			Q2			Q1
Profitability for the Quarter:
Tax-equivalent interest income	$	40,438		$	39,343		$	39,258		$	38,446		$	38,322		$	37,532
Interest expense		4,916			4,699			4,748			4,730			4,682			4,658
Tax-equivalent net interest income		35,522			34,644			34,510			33,716			33,640			32,874
Tax-equivalent adjustment		1,589			1,271			1,283			1,296			1,331			1,282
Provision for loan and lease losses		1,218			597			853			(192	)		158			(982	)
Non-interest income		12,109			13,159			11,338			12,590			11,694			11,249
Non-interest expenses		29,477			29,244			30,478			28,632			34,141			27,549
Income before income taxes		15,347			16,691			13,234			16,570			9,704			16,274
Income tax expense		5,014			5,466			4,086			5,428			2,722			5,346
Net income	$	10,333		$	11,225		$	9,148		$	11,142		$	6,982		$	10,928
Financial Performance:
Pre-tax pre-provision income	$	16,727		$	17,488		$	14,242		$	16,614		$	15,990		$	15,292
Return on average assets		0.93	%		1.04	%		0.85	%		1.05	%		0.67	%		1.08	%
Return on average common equity		8.02	%		8.73	%		6.93	%		8.54	%		5.47	%		8.80	%
Net interest margin		3.42	%		3.44	%		3.44	%		3.42	%		3.48	%		3.47	%
Efficiency ratio - GAAP basis (1)		64.02	%		62.85	%		68.39	%		63.61	%		77.59	%		64.31	%
Efficiency ratio - Non-GAAP basis (1)		61.35	%		60.53	%		65.89	%		61.09	%		61.30	%		61.60	%
Per Share Data:
Basic net income per share	$	0.42		$	0.45		$	0.37		$	0.44		$	0.28		$	0.44
Diluted net income per share	$	0.42		$	0.45		$	0.36		$	0.44		$	0.28		$	0.43
Average fully diluted shares		24,689,762			25,048,576			25,151,831			25,151,582			25,127,036			25,124,206
Dividends declared per common share	$	0.22		$	0.22		$	0.20		$	0.20		$	0.18		$	0.18
Non-interest Income:
Securities gains (losses)	$	19		$	-		$	(3	)	$	8		$	-		$	-
Service charges on deposit accounts		1,839			1,882			2,135			2,226			2,089			1,972
Mortgage banking activities		822			1,178			512			596			570			316
Wealth management income		5,161			4,916			4,905			4,974			4,741			4,466
Insurance agency commissions		881			1,618			985			1,410			961			1,640
Income from bank owned life insurance		606			713			627			611			608			598
Bank card fees		1,220			1,057			1,144			1,148			1,169			978
Other income		1,561			1,795			1,033			1,617			1,556			1,279
Total Non-interest Income	$	12,109		$	13,159		$	11,338		$	12,590		$	11,694		$	11,249
Non-interest Expense:
Salaries and employee benefits	$	17,534		$	17,299		$	16,793		$	16,765		$	16,474		$	16,355
Occupancy expense of premises		3,173			3,489			3,914			3,032			3,274			3,472
Equipment expenses		1,490			1,373			1,333			1,337			1,262			1,256
Marketing		942			531			838			744			802			542
Outside data services		1,102			1,261			1,284			1,231			1,216			1,216
FDIC insurance		654			631			615			594			573			520
Amortization of intangible assets		106			107			112			115			224			370
Litigation expenses		162			200			155			236			6,128			-
Professional fees		1,199			1,209			1,246			1,092			1,292			914
Other real estate owned expenses		4			10			2			40			9			-
Other expenses		3,111			3,134			4,186			3,446			2,887			2,904
Total Non-interest Expense	$	29,477		$	29,244		$	30,478		$	28,632		$	34,141		$	27,549

(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

	2015						2014
(Dollars in thousands)	Q2			Q1			Q4			Q3			Q2			Q1
Balance Sheets at Quarter End:
Residential mortgage loans	$	744,195		$	728,858		$	717,886		$	698,925		$	668,536		$	640,939
Residential construction loans		137,134			130,321			136,741			141,883			149,321			143,109
Commercial ADC loans		223,103			203,731			205,124			194,666			178,972			163,343
Commercial investor real estate loans		694,179			668,931			640,193			575,984			577,813			573,634
Commercial owner occupied real estate loans		643,973			618,846			611,061			584,964			581,795			582,472
Commercial business loans		409,795			385,452			390,781			368,611			357,472			348,180
Leasing		21			36			54			156			260			439
Consumer loans		436,465			428,531			425,552			410,723			396,775			380,697
Total loans and leases		3,288,865			3,164,706			3,127,392			2,975,912			2,910,944			2,832,813
Allowance for loan and lease losses		(38,713	)		(37,475	)		(37,802	)		(37,574	)		(37,959	)		(38,026	)
Loans held for sale		19,445			13,899			10,512			6,656			9,042			3,079
Investment securities		878,284			912,565			933,619			950,869			980,530			997,584
Interest-earning assets		4,222,667			4,125,549			4,114,936			3,976,731			3,945,643			3,891,223
Total assets		4,507,367			4,401,380			4,397,132			4,248,731			4,234,342			4,168,998
Noninterest-bearing demand deposits		1,092,413			1,017,566			993,737			986,549			984,700			882,169
Total deposits		3,247,346			3,109,892			3,066,509			3,028,788			3,038,670			2,959,195
Customer repurchase agreements		111,817			101,640			74,432			71,384			72,917			67,038
Total interest-bearing liabilities		2,851,750			2,818,966			2,837,204			2,706,623			2,698,887			2,748,064
Total stockholders' equity		518,873			521,768			521,751			522,404			517,269			510,386
Quarterly Average Balance Sheets:
Residential mortgage loans	$	734,382		$	724,248		$	707,719		$	682,013		$	652,232		$	627,944
Residential construction loans		137,216			132,456			141,890			147,750			145,968			134,261
Commercial ADC loans		218,341			206,105			201,020			180,293			168,063			162,544
Commercial investor real estate loans		668,883			645,163			607,050			577,851			575,283			557,168
Commercial owner occupied real estate loans		624,407			611,722			594,634			585,014			579,953			584,155
Commercial business loans		398,510			383,111			367,872			367,203			348,597			349,734
Leasing		28			44			114			206			352			567
Consumer loans		434,011			425,434			417,910			404,062			390,076			377,822
Total loans and leases		3,215,778			3,128,283			3,038,209			2,944,392			2,860,524			2,794,195
Loans held for sale		14,075			7,053			9,952			7,518			6,940			5,216
Investment securities		898,237			925,683			942,782			965,206			991,135			1,012,701
Interest-earning assets		4,162,963			4,097,648			4,022,051			3,954,858			3,893,843			3,845,513
Total assets		4,438,670			4,372,988			4,292,237			4,220,084			4,157,559			4,105,225
Noninterest-bearing demand deposits		1,023,042			986,688			1,000,285			956,830			899,287			825,968
Total deposits		3,128,562			3,056,186			3,063,591			3,036,686			2,965,329			2,876,641
Customer repurchase agreements		106,179			90,020			78,746			73,046			68,880			62,864
Total interest-bearing liabilities		2,852,414			2,817,575			2,731,791			2,711,206			2,716,537			2,749,459
Total stockholders' equity		516,940			521,346			524,063			517,534			511,738			503,851
Financial Measures:
Average equity to average assets		11.65	%		11.92	%		12.21	%		12.26	%		12.31	%		12.27	%
Investment securities to earning assets		20.80	%		22.12	%		22.69	%		23.91	%		24.85	%		25.64	%
Loans to earning assets		77.89	%		76.71	%		76.00	%		74.83	%		73.78	%		72.80	%
Loans to assets		72.97	%		71.90	%		71.12	%		70.04	%		68.75	%		67.95	%
Loans to deposits		101.28	%		101.76	%		101.99	%		98.25	%		95.80	%		95.73	%
Capital Measures:
Tier 1 leverage  (1)		10.83	%		11.00	%		11.26	%		11.36	%		11.37	%		11.43	%
Tier 1 capital to risk-weighted assets  (1)		13.54	%		14.01	%		13.95	%		14.52	%		14.48	%		14.64	%
Total regulatory capital to risk-weighted assets  (1)		14.65	%		15.12	%		15.06	%		15.68	%		15.66	%		15.85	%
Common equity tier 1 capital to risk-weighted assets   (1)		12.53	%		14.01	%		n.a.			n.a.			n.a.			n.a.
Book value per share	$	21.12		$	21.10		$	20.83		$	20.83		$	20.63		$	20.38
Outstanding shares		24,562,471			24,733,868			25,044,877			25,076,794			25,069,700			25,043,482

(1) Estimated ratio at June 30, 2015

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

	2015							2014
(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		$	-
Commercial real estate:
Commercial AD&C		-			-				-			-			-			-
Commercial investor real estate		-			-				-			-			-			-
Commercial owner occupied real estate		-			-				-			649			-			-
Leasing		2			-				-			-			-			-
Consumer		7			-				-			6			3			-
Residential real estate:
Residential mortgage		-			-				-			-			-			-
Residential construction		-			-				-			-			-			-
Total loans and leases 90 days past due		9			-				-			655			4			-
Non-accrual loans and leases:
Commercial business		3,285			4,166				3,184			4,151			4,309			3,272
Commercial real estate:
Commercial AD&C		194			1,363				2,464			3,792			3,739			4,133
Commercial investor real estate		10,023			10,083				8,156			8,210			6,731			7,284
Commercial owner occupied real estate		8,423			8,974				8,941			10,742			10,868			7,150
Leasing		-			-				-			-			-			-
Consumer		1,214			1,962				1,668			1,830			2,058			2,115
Residential real estate:
Residential mortgage		7,780			3,235				3,012			4,417			4,501			5,025
Residential construction		780			788				1,105			2,497			2,143			2,304
Total non-accrual loans and leases		31,699			30,571				28,530			35,639			34,349			31,283
Total restructured loans - accruing		5,620			5,446				5,497			7,382			7,364			7,411
Total non-performing loans and leases		37,328			36,017				34,027			43,676			41,717			38,694
Other assets and real estate owned (OREO)		4,514			3,227				3,195			1,762			1,967			1,619
Total non-performing assets	$	41,842		$	39,244			$	37,222		$	45,438		$	43,684		$	40,313
	For the quarter ended,
	June 30,			March 31,				December 31,			September 30,			June 30,			March 31,
(Dollars in thousands)	2015			2015				2014			2014			2014			2014
Analysis of Non-accrual Loan and Lease Activity:
Balance at beginning of period	$	30,571		$	28,530			$	35,639		$	34,349		$	31,283		$	30,574
Non-accrual balances transferred to OREO		(1,309	)		(32	)			(1,475	)		(300	)		(390	)		(281	)
Non-accrual balances charged-off		(549	)		(1,077	)			(1,033	)		(216	)		(357	)		(513	)
Net payments or draws		(2,970	)		(1,067	)			(4,139	)		(590	)		(1,580	)		(1,073	)
Loans placed on non-accrual		5,956			4,217				779			2,396			5,393			2,576
Non-accrual loans brought current		-			-				(1,241	)		-			-			-
Balance at end of period	$	31,699		$	30,571			$	28,530		$	35,639		$	34,349		$	31,283
Analysis of Allowance for Loan Losses:
Balance at beginning of period	$	37,475		$	37,802			$	37,574		$	37,959		$	38,026		$	38,766
Provision (credit) for loan and lease losses		1,218			597				853			(192	)		158			(982	)
Less loans charged-off, net of recoveries:
Commercial business		73			(89	)			50			(58	)		28			(768	)
Commercial real estate:
Commercial AD&C		(547	)		706				529			-			-			-
Commercial investor real estate		85			(5	)			(5	)		(2	)		(23	)		(5	)
Commercial owner occupied real estate		(1	)		212				(6	)		-			265			-
Leasing		-			-				-			-			-			-
Consumer		395			43				83			244			11			331
Residential real estate:							��
Residential mortgage		(18	)		65				(17	)		43			(27	)		203
Residential construction		(7	)		(8	)			(9	)		(34	)		(29	)		(3	)
Net charge-offs		(20	)		924				625			193			225			(242	)
Balance at end of period	$	38,713		$	37,475			$	37,802		$	37,574		$	37,959		$	38,026
Asset Quality Ratios:
Non-performing loans to total loans		1.13	%		1.14	%			1.09	%		1.47	%		1.43	%		1.37	%
Non-performing assets to total assets		0.93	%		0.89	%			0.85	%		1.07	%		1.03	%		0.97	%
Allowance for loan losses to loans		1.18	%		1.18	%			1.21	%		1.26	%		1.30	%		1.34	%
Allowance for loan losses to non-performing loans		103.71	%		104.05	%			111.09	%		86.03	%		90.99	%		98.27	%
Annualized net charge-offs to average loans		0.00	%		0.12	%			0.08	%		0.03	%		0.03	%		(0.04	)%

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

	Three Months Ended June 30,
	2015								2014
						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	$	734,382		$	6,155		3.35	%	$	652,232		$	5,614		3.44	%
Residential construction loans		137,216			1,268		3.71			145,968			1,359		3.73
Commercial ADC loans		218,341			2,525		4.64			168,063			2,180		5.20
Commercial investor real estate loans		668,883			7,771		4.66			575,283			7,139		4.98
Commercial owner occupied real estate loans		624,407			7,669		4.93			579,953			7,146		5.09
Commercial business loans		398,510			4,369		4.40			348,597			4,054		4.69
Leasing		28			-		1.49			352			6		6.30
Consumer loans		434,011			3,606		3.35			390,076			3,208		3.32
Total loans and leases (2)		3,215,778			33,363		4.16			2,860,524			30,706		4.34
Loans held for sale		14,075			132		3.76			6,940			71		4.12
Taxable securities		606,581			3,786		2.50			688,793			4,263		2.48
Tax-exempt securities (3)		291,656			3,135		4.30			302,342			3,260		4.32
Interest-bearing deposits with banks		34,400			22		0.25			34,770			22		0.25
Federal funds sold		473			-		0.22			474			-		0.22
Total interest-earning assets		4,162,963			40,438		3.89			3,893,843			38,322		3.97
Less:  allowance for loan and lease losses		(38,217	)							(38,342	)
Cash and due from banks		46,894								44,987
Premises and equipment, net		51,591								45,696
Other assets		215,439								211,375
Total assets	$	4,438,670							$	4,157,559
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	527,307			101		0.08	%	$	477,018			102		0.09	%
Regular savings deposits		278,199			37		0.05			262,078			49		0.07
Money market savings deposits		833,382			317		0.15			865,134			273		0.13
Time deposits		466,632			912		0.78			461,812			769		0.67
Total interest-bearing deposits		2,105,520			1,367		0.26			2,066,042			1,193		0.23
Other borrowings		106,180			60		0.23			68,880			37		0.22
Advances from FHLB		605,714			3,266		2.16			546,615			3,233		2.37
Subordinated debentures		35,000			223		2.55			35,000			219		2.50
Total interest-bearing liabilities		2,852,414			4,916		0.69			2,716,537			4,682		0.69
Noninterest-bearing demand deposits		1,023,042								899,287
Other liabilities		46,274								29,997
Stockholders' equity		516,940								511,738
Total liabilities and stockholders' equity	$	4,438,670							$	4,157,559
Net interest income and spread				$	35,522		3.20	%				$	33,640		3.28	%
Less: tax-equivalent adjustment					1,589								1,331
Net interest income				$	33,933							$	32,309
Interest income/earning assets							3.89	%							3.97	%
Interest expense/earning assets							0.47								0.49
Net interest margin							3.42	%							3.48	%

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and  2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.6 million and $1.3 million in 2015 and 2014, respectively.

(2) Non-accrual loans are included in the average balances.

(3) 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,
	2015								2014
						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	$	729,343		$	12,279		3.37	%	$	640,155		$	11,061		3.46	%
Residential construction loans		134,849			2,489		3.72			140,147			2,612		3.76
Commercial ADC loans		212,257			4,862		4.62			165,319			4,253		5.19
Commercial investor real estate loans		657,088			15,350		4.71			566,275			13,872		4.94
Commercial owner occupied real estate loans		618,100			15,200		4.96			582,042			14,213		5.08
Commercial business loans		390,853			8,507		4.39			349,162			8,091		4.67
Leasing		36			1		3.76			459			12		5.22
Consumer loans		429,746			7,106		3.35			383,983			6,326		3.34
Total loans and leases (2)		3,172,272			65,794		4.18			2,827,542			60,440		4.34
Loans held for sale		10,583			208		3.94			6,083			130		4.28
Taxable securities		617,861			7,722		2.50			699,460			8,715		2.49
Tax-exempt securities (3)		294,024			6,305		4.29			302,398			6,527		4.32
Interest-bearing deposits with banks		35,273			44		0.25			33,853			42		0.25
Federal funds sold		473			1		0.22			475			-		0.22
Total interest-earning assets		4,130,486			80,074		3.90			3,869,811			75,854		3.96
Less:  allowance for loan and lease losses		(37,833	)							(38,864	)
Cash and due from banks		46,663								45,268
Premises and equipment, net		51,127								45,787
Other assets		215,567								209,535
Total assets	$	4,406,010							$	4,131,537
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	525,692			207		0.08	%	$	468,677			194		0.08	%
Regular savings deposits		274,220			71		0.05			255,667			97		0.08
Money market savings deposits		832,549			590		0.14			871,464			546		0.13
Time deposits		455,147			1,693		0.75			462,591			1,540		0.67
Total interest-bearing deposits		2,087,608			2,561		0.25			2,058,399			2,377		0.23
Other borrowings		98,228			110		0.23			65,889			75		0.23
Advances from FHLB		614,254			6,502		2.13			573,619			6,451		2.27
Subordinated debentures		35,000			442		2.53			35,000			437		2.50
Total interest-bearing liabilities		2,835,090			9,615		0.68			2,732,907			9,340		0.69
Noninterest-bearing demand deposits		1,004,965								862,830
Other liabilities		46,824								27,984
Stockholders' equity		519,131								507,816
Total liabilities and stockholders' equity	$	4,406,010							$	4,131,537
Net interest income and spread				$	70,459		3.22	%				$	66,514		3.27	%
Less: tax-equivalent adjustment					3,153								2,613
Net interest income				$	67,306							$	63,901
Interest income/earning assets							3.90	%							3.96	%
Interest expense/earning assets							0.47								0.48
Net interest margin							3.43	%							3.48	%

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2015 and  2014. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $3.2 million and $2.6 million in 2015 and 2014, respectively.

(2) Non-accrual loans are included in the average balances.

(3) Includes only investments that are exempt from federal taxes.