Exhibit 99
[LOGO OMITTED]
NEWS RELEASE
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS
SECOND QUARTER RESULTS
OLNEY, MARYLAND, July 15, 2004 -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the
parent company of Sandy Spring Bank, today announced net income for the second
quarter of 2004 of $6.4 million ($.43 per diluted share) compared to $8.7
million ($.60 per diluted share) for the second quarter of 2003, a 27% decrease.
Net income for the six-month period ending June 30, 2004 totaled $13.7 million
($.93 per diluted share) compared to $17.1 million ($1.16 per diluted share) for
the prior year period, a 20% decrease. The continuing effects of lower amounts
of residential mortgage loan refinancings and net interest margin declines are
causing weaker earnings in the short run.
"Loans grew by 5% in the quarter and have grown by 18% over the past twelve
months, signaling a movement toward more normalized core earnings as the
dominant source of our revenue. The loan growth we are reporting underscores the
strength of the infrastructure we have built to service the borrowing needs of
our small business and middle-market clients. We believe we have reached a
turning point beyond which margins are expected to improve and both loan growth
and noninterest revenue will continue to ramp up," said Hunter R. Hollar,
President and CEO of Sandy Spring Bancorp. "As always, we have been managing the
institution for sustainable, consistent long-term performance and growth. We
have continued to make foresighted management decisions and prudent investments
in the business with the longer view in mind, as evidenced by the repositioning
of the size and maturities of our investment portfolio and the planned growth in
certain noninterest expense categories during the second quarter. These moves
are expected to benefit future earnings and add to longer-term shareholder
value."
"Loan growth in all categories continued in the second quarter of 2004," said
Hollar. "Deposit growth was also good, with total deposits growing 4% in the
most recent quarter and are up 6% over the past twelve months. Noninterest
income gains were solid with trust fees up 30% and insurance agency fees up 12%
as compared to the second quarter of 2003. Asset quality remains very strong.
The underlying attributes of a high-performing banking company are all still
self-evident and our core engine is quite healthy as we enter the second half of
the year with optimism in an ever-competitive marketplace."
Return on average stockholders' equity was 13.07% for the second quarter of
2004, compared to 19.04% for the second quarter of 2003. Return on average
assets for the second quarter of 2004 was 1.08%, compared to 1.50% for the
second quarter of 2003.
For the first six months of 2004, return on average stockholders' equity was
14.03% compared to 18.91% for the first six months of 2003. Return on average
assets for the first six months of 2004 was 1.17% compared to 1.48% for the
first six months of 2003.
Comparing June 30, 2004 balances to June 30, 2003, total assets increased 2% to
$2.4 billion. Total loans and leases grew 18% to $1.3 billion, while investment
securities decreased 12% to $912 million. Total deposits increased 6% to $1.7
billion, while borrowings declined 6% to $534 million. During the same period,
stockholders' equity increased 4% to $196 million or 8.1% of total assets.
Due to continuing strong asset quality, there was no provision for credit losses
in the first six months of 2004 or 2003.
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.
DETAILED REVIEW OF FINANCIAL RESULTS
Comparing the second quarter of 2004 to 2003, net interest income decreased 2%
due primarily to the lower interest rates on loans and investment securities and
lower investment securities balances, offset in part by the effects of loan
growth, reduced interest on deposits and borrowings and lower borrowing
balances. The net interest margin declined to 3.58% in 2004 from 3.74% in 2003.
Noninterest income decreased by $1.8 million or 18% versus 2003. Noninterest
income includes investment gains, which decreased by $.4 million, and $1.1
million of income from early termination of a sublease in 2003. Lower levels of
mortgage banking activity, following a sustained period of mortgage loan
refinancings, have resulted in a decline in gains on sales of mortgage loans,
which decreased 36% versus the prior year period. Offsetting part of the decline
in mortgage banking revenues were increases of 12% in insurance agency
commissions and 30% in trust revenues. Noninterest expenses were $18.2 million
in the second quarter of 2004 compared to $16.6 million in 2003, a 9% increase.
Noninterest expenses include the amortization of intangible assets of $0.5
million in 2004 compared to $0.7 million in the second quarter of 2003. The GAAP
based efficiency ratio increased to 69.55% for the second quarter while the
traditional non-GAAP efficiency ratio increased to 63.30%. The increases were
primarily the result of the expense growth combined with the effect of the net
interest margin contraction and the decrease in gains on sales of mortgage
loans. Noninterest expenses increased primarily due to higher compensation and
benefits costs, attributable to a larger staff and merit increases, together
with increased occupancy and equipment expenses from a new office facility in
Howard County and an expanded branch network.
Comparing the first six months of 2004 and 2003, net interest income decreased
by $.9 million or 2%, due primarily to the margin compression discussed above
which resulted in a decline in the net interest margin to 3.70% for the first
six months of 2004 compared to 3.84% for the same period in 2003. Noninterest
income was $15.8 million for the six months ended June 30, 2004 versus $17.8
million for the same period in 2003, a decrease of $2.0 million or 11%.
Noninterest income includes securities gains of $.3 million in 2004 and $.6
million in 2003, and the income from the early termination of a sublease. This
decrease was due primarily to a 43% decrease in gains on sales of mortgage loans
which was somewhat offset by increases of 18% in trust revenues, 11% in
insurance agency commissions and 9% in fees on the sale of investment products.
Other noninterest income increased $.4 million or 20% for the first six months
of 2004 compared to 2003 due primarily to increases in gains on sales of other
real estate owned, and gains on sales of SBA loans. Noninterest expenses were
$34.9 million for the first six months of 2004 compared to $32.6 million for the
same period in 2003, a 7%
increase. Noninterest expenses include the amortization of intangible assets of
$1.0 million for the first six months of 2004 compared to $1.3 million for the
first six months of 2003. The GAAP based efficiency ratio increased to 66.8% for
the first six months of 2004 while the traditional, non-GAAP efficiency ratio
increased to 60.8%. These increases were mainly due to the expense growth
mentioned above together with the decline in mortgage banking revenues and the
net interest margin contraction.
ABOUT SANDY SPRING BANCORP/SANDY SPRING BANK
With $2.4 billion in assets, Sandy Spring Bancorp is the holding company for
Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance
Corporation and The Equipment Leasing Company. Sandy Spring Bancorp is the third
largest publicly traded banking company headquartered 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 30
community offices and 45 ATMs located in Anne Arundel, Frederick, Howard,
Montgomery, and Prince George's counties in Maryland. Visit
www.sandyspringbank.com for more information.
For additional information or questions, please contact:
Hunter R. Hollar, President & Chief Executive Officer, or
James H. Langmead, Executive V.P. & Chief Financial Officer
Sandy Spring Bancorp
17801 Georgia Avenue
Olney, Maryland 20832
1-800-399-5919
E-mail: HHollar@sandyspringbank.com
JLangmead@sandyspringbank.com
Web site: www.sandyspringbank.com
FORWARD-LOOKING STATEMENTS: Sandy Spring Bancorp makes forward-looking
statements in this News Release that are subject to risks and uncertainties.
These forward-looking statements include: statements of goals, intentions,
earnings expectations, and other expectations; estimates of risks and 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. These forward-looking statements are subject to significant uncertainties
because they are based upon or are affected by: management's estimates and
projections of future interest rates, market behavior, and other economic
conditions; future laws and regulations; and a variety of other matters which,
by their nature, are subject to significant uncertainties. Because of these
uncertainties, Sandy Spring Bancorp's actual future results may differ
materially from those indicated. In addition, the Company's past results of
operations do not necessarily indicate its future results.
Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- % -------------------------- %
2004 2003 Change 2004 2003 Change
- --------------------------------------------------------------------------------------------------------------------- --------
PROFITABILITY FOR THE PERIOD:
Net interest income $17,862 $18,247 (2) $36,488 $37,410 (2)
Provision for credit losses 0 0 0 0 0 0
Noninterest income 8,241 10,050 (18) 15,800 17,807 (11)
Noninterest expenses 18,155 16,623 9 34,925 32,580 7
Income before income taxes 7,948 11,674 (32) 17,363 22,637 (23)
Net income 6,393 8,736 (27) 13,694 17,064 (20)
Return on average assets 1.08% 1.50% 1.17% 1.48%
Return on average equity 13.07% 19.04% 14.03% 18.91%
Net interest margin 3.58% 3.74% 3.70% 3.84%
Efficiency ratio - GAAP based* 69.55% 58.74% 66.79% 59.00%
Efficiency ratio - traditional* 63.30% 56.02% 60.81% 54.40%
PER SHARE DATA:
Basic net income $0.44 $0.61 (28) $0.94 $1.18 (20)
Diluted net income 0.43 0.60 (28) 0.93 1.16 (20)
Dividends declared 0.19 0.18 6 0.38 0.36 6
Book value 13.51 13.04 4 13.51 13.04 4
Tangible book value 12.26 11.64 5 12.26 11.64 5
Average fully diluted shares 14,726,117 14,676,404 14,727,920 14,709,547
AT PERIOD-END:
Assets $2,424,199 $2,368,446 2 $2,424,199 $2,368,446 2
Deposits 1,681,552 1,590,144 6 1,681,552 1,590,144 6
Loans and leases 1,267,346 1,069,688 18 1,267,346 1,069,688 18
Securities 912,208 1,037,460 (12) 912,208 1,037,460 (12)
Stockholders' equity 196,090 188,625 4 196,090 188,625 4
CAPITAL AND CREDIT QUALITY RATIOS:
Average equity to average assets 8.25% 7.89% 8.33% 7.85%
Allowance for credit losses to loans
and leases 1.16% 1.41% 1.16% 1.41%
Nonperforming assets to total assets 0.12% 0.07% 0.12% 0.07%
Annualized net (charge-offs) recoveries
to average loans and leases (0.04)% 0.00% (0.02)% 0.00%
* The GAAP based efficiency ratio is noninterest expenses divided by net
interest income plus noninterest income from the Consolidated Statements of
Income. The traditional, non-GAAP efficiency ratio excludes intangible asset
amortization from noninterest expenses; excludes income from an early
termination of a sublease in 2003 and securities gains from noninterest
income; and adds the tax-equivalent adjustment to net interest income. See
the Reconciliation Table included with these Financial Highlights.
Certain reclassifications of information previously reported have been made to
conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION OF GAAP-BASED AND TRADITIONAL EFFICIENCY RATIOS
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- ------------------------------
2004 2003 2004 2003
--------------- --------------- -------------- --------------
Noninterest expenses-GAAP based $18,155 $16,623 $34,925 $32,580
Net interest income plus noninterest income-
GAAP based 26,103 28,297 52,288 55,217
Efficiency ratio-GAAP based 69.55% 58.74% 66.79% 59.00%
=============== =============== ============== ==============
Noninterest expenses-GAAP based $18,155 $16,623 $34,925 $32,580
Less non-GAAP adjustment:
Amortization of intangible assets 487 664 973 1,329
--------------- --------------- -------------- --------------
Noninterest expenses-traditional ratio 17,668 15,959 33,952 31,251
Net interest income plus noninterest income-
GAAP based 26,103 28,297 52,288 55,217
Plus non-GAAP adjustment:
Tax-equivalency 1,919 1,809 3,884 3,855
Less non-GAAP adjustments:
Securities gains 109 543 337 551
Income from an early termination of
a sublease 0 1,077 0 1,077
--------------- --------------- -------------- --------------
Net interest income plus noninterest
income - traditional ratio 27,913 28,486 55,835 57,444
Efficiency ratio - traditional 63.30% 56.02% 60.81% 54.40%
=============== =============== ============== =============
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
June 30, December 31,
------------------------------- --------------
2004 2003 2003
- ---------------------------------------------------------------------------------------------- --------------
ASSETS
Cash and due from banks $41,399 $46,740 $38,397
Federal funds sold 67,754 67,765 10,670
Interest-bearing deposits with banks 736 665 724
Residential mortgage loans held for sale 12,988 29,016 12,209
Investments available-for-sale (at fair value) 569,908 764,164 639,460
Investments held-to-maturity - fair value of $322,896,
$265,353, and $344,814, respectively 322,448 253,318 337,634
Other equity securities 19,852 19,978 21,111
Total loans and leases 1,267,346 1,069,688 1,153,428
Less: allowance for credit losses (14,743) (15,033) (14,880)
-------------- --------------- ---------------
Net loans and leases 1,252,603 1,054,655 1,138,548
Premises and equipment, net 40,498 37,851 37,679
Accrued interest receivable 13,025 14,904 13,661
Goodwill 7,642 7,642 7,642
Other intangible assets, net 10,473 12,597 11,446
Other assets 64,873 59,151 65,243
-------------- --------------- ---------------
Total assets $2,424,199 $2,368,446 $2,334,424
============== =============== ==============
LIABILITIES
Noninterest-bearing deposits $417,400 $373,429 $368,319
Interest-bearing deposits 1,264,152 1,216,715 1,193,511
-------------- --------------- ---------------
Total deposits 1,681,552 1,590,144 1,561,830
Short-term borrowings 384,436 446,770 413,223
Subordinated debentures 35,000 35,000 35,000
Other long-term borrowings 114,883 88,433 115,158
Accrued interest payable and other liabilities 12,238 19,474 15,764
-------------- --------------- ---------------
Total liabilities 2,228,109 2,179,821 2,140,975
STOCKHOLDERS' EQUITY
Common stock -- par value $1.00; shares authorized
50,000,000; shares issued and outstanding 14,517,640
14,465,144 and 14,495,613, respectively 14,518 14,465 14,496
Additional paid in capital 19,511 18,655 18,970
Retained earnings 161,459 143,780 153,280
Accumulated other comprehensive income 602 11,725 6,703
-------------- --------------- ---------------
Total stockholders' equity 196,090 188,625 193,449
-------------- --------------- ---------------
Total liabilities and stockholders' equity $2,424,199 $2,368,446 $2,334,424
============== =============== ==============
Certain reclassifications of information previously reported have been made to
conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ -----------------------------
2004 2003 2004 2003
------------- ------------- ------------ -------------
Interest income:
Interest and fees on loans and leases $16,919 $16,252 $33,375 $32,871
Interest on loans held for sale 212 263 350 571
Interest on deposits with banks 2 4 5 7
Interest and dividends on securities:
Taxable 5,509 7,880 12,065 16,612
Exempt from federal income taxes 3,515 3,483 7,102 6,951
Interest on federal funds sold 88 109 147 215
------------- ------------- ------------- -------------
Total interest income 26,245 27,991 53,044 57,227
Interest expense:
Interest on deposits 2,994 3,728 5,724 7,661
Interest on short-term borrowings 3,699 4,497 7,450 9,127
Interest on long-term borrowings 1,690 1,519 3,382 3,029
------------- ------------- ------------- -------------
Total interest expense 8,383 9,744 16,556 19,817
------------- ------------- ------------- -------------
Net interest income 17,862 18,247 36,488 37,410
Provision for credit losses 0 0 0 0
------------- ------------- ------------- -------------
Net interest income after provision for credit losses 17,862 18,247 36,488 37,410
Noninterest income:
Securities gains (losses) 109 543 337 551
Service charges on deposit accounts 1,881 2,037 3,749 4,021
Gains on sales of mortgage loans 1,028 1,603 1,797 3,178
Fees on sales of investment products 666 666 1,295 1,187
Trust department income 984 758 1,738 1,478
Insurance agency commissions 1,030 922 2,151 1,941
Income from bank owned life insurance 613 710 1,243 1,319
Income from an early termination of a sublease 0 1,077 0 1,077
Visa Check Fees 497 494 921 919
Other income 1,433 1,240 2,569 2,136
------------- ------------- ------------- -------------
Total noninterest income 8,241 10,050 15,800 17,807
Noninterest expenses:
Salaries and employee benefits 10,285 9,514 20,218 18,964
Occupancy expense of premises 1,815 1,533 3,443 3,117
Equipment expenses 1,324 1,099 2,514 2,140
Marketing 482 509 995 963
Outside data services 766 660 1,487 1,305
Amortization of intangible assets 487 664 973 1,329
Other expenses 2,996 2,644 5,295 4,762
------------- ------------- ------------- -------------
Total noninterest expenses 18,155 16,623 34,925 32,580
------------- ------------- ------------- -------------
Income before income taxes 7,948 11,674 17,363 22,637
Income tax expense 1,555 2,938 3,669 5,573
============= ============= ============= =============
Net income $6,393 $8,736 $13,694 $17,064
============= ============= ============= =============
Basic net income per share $0.44 $0.61 $0.94 $1.18
Diluted net income per share 0.43 0.60 0.93 1.16
Dividends declared per share 0.19 0.18 0.38 0.36
Certain reclassifications of information previously reported have been made to
conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries 2004 2003
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA -------------------------- --------------------------------------------------------
(Dollars in thousands, except per share data) Q2 Q1 Q4 Q3 Q2 Q1
- -------------------------------------------------------------------------- --------------------------------------------------------
PROFITABILITY FOR THE QUARTER:
Tax-equivalent interest income $28,164 $28,764 $29,562 $30,060 $29,800 $31,282
- -----------------------------------------------------------------------------------------------------------------------------------
Interest expense 8,383 8,173 8,478 9,137 9,744 10,073
- -----------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent net interest income 19,781 20,591 21,084 20,923 20,056 21,209
- -----------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent adjustment 1,919 1,965 2,234 2,148 1,809 2,046
- -----------------------------------------------------------------------------------------------------------------------------------
Provision for credit losses 0 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Noninterest income 8,241 7,559 7,178 8,751 10,032 7,757
- -----------------------------------------------------------------------------------------------------------------------------------
Noninterest expenses 18,155 16,770 17,742 16,904 16,605 15,957
- -----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 7,948 9,415 8,286 10,622 11,674 10,963
- -----------------------------------------------------------------------------------------------------------------------------------
Income tax expense 1,555 2,114 1,502 2,404 2,938 2,635
- -----------------------------------------------------------------------------------------------------------------------------------
Net Income 6,393 7,301 6,784 8,218 8,736 8,328
===================================================================================================================================
FINANCIAL RATIOS:
Return on average assets 1.08% 1.26% 1.14% 1.37% 1.50% 1.46%
- -----------------------------------------------------------------------------------------------------------------------------------
Return on average equity 13.07% 15.00% 14.16% 17.42% 19.04% 18.76%
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest margin 3.58% 3.82% 3.82% 3.71% 3.74% 3.95%
- -----------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - GAAP based * 69.55% 64.04% 68.17% 61.41% 58.74% 59.28%
- -----------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - traditional * 63.30% 58.32% 61.80% 54.92% 56.02% 52.81%
===================================================================================================================================
PER SHARE DATA:
Basic net income $0.44 $0.50 $0.46 $0.57 $0.61 $0.57
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted net income $0.43 $0.50 $0.46 $0.56 $0.60 $0.56
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends declared $0.19 $0.19 $0.19 $0.19 $0.18 $0.18
- -----------------------------------------------------------------------------------------------------------------------------------
Book value $13.51 $13.76 $13.35 $13.10 $13.04 $12.54
- -----------------------------------------------------------------------------------------------------------------------------------
Tangible book value $12.26 $12.48 $12.03 $11.75 $11.64 $11.10
- -----------------------------------------------------------------------------------------------------------------------------------
Average fully diluted shares 14,726,117 14,725,261 14,729,513 14,677,257 14,676,404 14,743,976
===================================================================================================================================
NONINTEREST INCOME BREAKDOWN:
Securities gains (losses) $109 $228 $339 $106 $543 $8
- -----------------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 1,881 1,868 1,984 2,027 2,037 1,984
- -----------------------------------------------------------------------------------------------------------------------------------
Gains on sales of mortgage loans 1,028 769 639 1,906 1,603 1,575
- -----------------------------------------------------------------------------------------------------------------------------------
Fees on sales of investment products 666 629 512 512 666 521
- -----------------------------------------------------------------------------------------------------------------------------------
Trust department income 984 754 721 756 758 720
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance agency commissions 1,030 1,121 876 924 922 1,019
- -----------------------------------------------------------------------------------------------------------------------------------
Income from bank owned life insurance 613 630 561 866 710 609
- -----------------------------------------------------------------------------------------------------------------------------------
Income from early termination of a sublease 0 0 0 0 1,077 0
- -----------------------------------------------------------------------------------------------------------------------------------
Visa Check Fees 497 424 439 434 494 425
- -----------------------------------------------------------------------------------------------------------------------------------
Other income 1,433 1,136 1,107 1,220 1,240 896
- -----------------------------------------------------------------------------------------------------------------------------------
Total 8,241 7,559 7,178 8,751 10,050 7,757
===================================================================================================================================
NONINTEREST EXPENSE BREAKDOWN:
Salaries and employee benefits $10,285 $9,933 $9,188 $9,932 $9,514 $9,450
- -----------------------------------------------------------------------------------------------------------------------------------
Occupancy expense of premises 1,815 1,628 2,105 1,839 1,533 1,584
- -----------------------------------------------------------------------------------------------------------------------------------
Equipment expenses 1,324 1,190 1,179 1,101 1,099 1,041
- -----------------------------------------------------------------------------------------------------------------------------------
Marketing 482 513 1,060 477 509 454
- -----------------------------------------------------------------------------------------------------------------------------------
Outside data services 766 721 671 643 660 645
- -----------------------------------------------------------------------------------------------------------------------------------
* The GAAP based efficiency ratio is noninterest expenses divided by net
interest income plus noninterest income from the Consolidated Statements of
Income. The traditional, non-GAAP efficiency ratio excludes intangible asset
amortization from noninterest expenses; excludes income from an early
termination of a sublease in 2003 and securities gains from noninterest
income; and adds the tax-equivalent adjustment to net interest income. See the
Reconciliation Table included with these Historical Trends in Quarterly
Financial Data.
Sandy Spring Bancorp, Inc. and Subsidiaries 2004 2003
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA -------------------------- ---------------------------------------------------------
(Dollars in thousands, except per share data) Q2 Q1 Q4 Q3 Q2 Q1
- -------------------------------------------------------------------------- ---------------------------------------------------------
NONINTEREST EXPENSE BREAKDOWN (CONTINUED):
Amortization of intangible assets $487 $486 486 665 664 $665
- ------------------------------------------------------------------------------------------------------------------------------------
Other expenses 2,996 2,299 3,053 2,247 2,644 2,118
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,155 16,770 17,742 16,904 16,623 15,957
====================================================================================================================================
BALANCE SHEETS AT QUARTER END:
Residential mortgage loans $343,176 $337,850 $331,129 $313,873 $292,415 $276,001
- ------------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 113,382 103,292 88,500 74,889 71,016 66,937
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 329,894 322,754 323,099 310,502 299,621 297,428
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 55,563 52,162 51,518 55,337 53,626 61,434
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 140,560 125,527 116,322 112,563 119,145 116,157
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer loans 284,771 260,644 242,860 232,377 233,865 232,359
- ------------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,267,346 1,202,229 1,153,428 1,099,541 1,069,688 1,050,316
- ------------------------------------------------------------------------------------------------------------------------------------
Less: allowance for credit losses (14,743) (14,875) (14,880) (15,049) (15,033) (15,023)
- ------------------------------------------------------------------------------------------------------------------------------------
Net loans and leases 1,252,603 1,187,354 1,138,548 1,084,492 1,054,655 1,035,293
- ------------------------------------------------------------------------------------------------------------------------------------
Goodwill 7,642 7,642 7,642 7,642 7,642 7,642
- ------------------------------------------------------------------------------------------------------------------------------------
Other intangible assets, net 10,473 10,959 11,446 11,932 12,597 13,262
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 2,424,199 2,371,572 2,334,424 2,383,669 2,368,446 2,372,602
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,681,552 1,618,591 1,561,830 1,558,220 1,590,144 1,555,513
- ------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 196,090 199,615 193,449 189,623 188,625 181,854
====================================================================================================================================
QUARTERLY AVERAGE BALANCE SHEETS:
Residential mortgage loans $355,676 $346,545 $331,024 $342,648 $302,344 $304,494
- ------------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 108,118 93,722 81,046 77,466 68,296 72,031
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 327,441 316,768 315,603 298,359 300,309 295,728
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 55,234 51,519 53,403 54,942 59,561 56,568
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 134,627 127,327 109,037 116,985 118,742 122,597
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer loans 268,861 251,411 237,478 232,891 229,085 231,770
- ------------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,249,957 1,187,292 1,127,591 1,123,291 1,078,337 1,083,188
- ------------------------------------------------------------------------------------------------------------------------------------
Securities 933,253 954,822 1,055,558 1,084,348 1,058,878 1,039,112
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 2,220,656 2,167,641 2,201,368 2,229,467 2,177,451 2,158,817
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 2,384,929 2,328,985 2,357,816 2,383,783 2,330,589 2,305,834
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 1,775,867 1,751,225 1,797,037 1,812,412 1,801,472 1,799,132
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing demand deposits 392,387 360,341 351,761 355,119 322,431 299,638
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,634,340 1,561,666 1,556,965 1,581,873 1,537,111 1,488,023
- ------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity 196,719 195,730 190,063 187,183 183,992 180,044
====================================================================================================================================
CAPITAL AND CREDIT QUALITY MEASURES:
Average equity to average assets 8.25% 8.40% 8.06% 7.85% 7.89% 7.81%
- ------------------------------------------------------------------------------------------------------------------------------------
Credit loss allowance to loans and leases 1.16% 1.24% 1.29% 1.37% 1.41% 1.43%
- ------------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets to total assets 0.12% 0.14% 0.13% 0.14% 0.07% 0.08%
- ------------------------------------------------------------------------------------------------------------------------------------
Annualized net (charge-offs) recoveries to
average loans and leases (0.04)% 0.00% (0.06)% 0.00% 0.00% 0.00%
====================================================================================================================================
MISCELLANEOUS DATA:
Net (charge-offs) recoveries ($131) ($5) ($169) $16 $10 ($13)
- ------------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets:
Non-accrual loans and leases 674 802 522 564 479 567
- ------------------------------------------------------------------------------------------------------------------------------------
Loans and leases 90 days past due 2,316 2,492 2,333 2,612 900 1,381
- ------------------------------------------------------------------------------------------------------------------------------------
Restructured loans and leases 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other real estate owned, net 0 77 77 125 187 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets 2,990 3,371 2,932 3,301 1,566 1,948
====================================================================================================================================
Certain reclassifications of information currently reported have been made to
conform to current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)
Three Months Ended June 30,
--------------------------------------------------------------------------------
2004 2003
-------------------------------------- ---------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCES INTEREST RATE Balance Interest Rate
---------------- ------------- ------- --------------- ------------ --------
ASSETS
Residential mortgage loans $355,676 $19,003 5.34% $302,344 $18,022 5.96%
Residential construction loans 108,118 4,886 4.52 68,296 3,578 5.24
Commercial mortgage loans 327,441 21,171 6.47 300,309 21,108 7.03
Commercial construction loans 55,234 3,151 5.70 59,561 3,539 5.94
Commercial loans and leases 134,627 8,577 6.37 118,742 8,491 7.15
Consumer loans 268,861 11,999 4.46 229,085 11,446 5.00
-------------- ------------- --------------- -------------
Total loans and leases 1,249,957 68,787 5.50 1,078,337 66,184 6.14
Securities 933,253 43,785 4.69 1,058,878 53,885 5.09
Interest-bearing deposits with banks 836 11 1.32 1,310 14 1.07
Federal funds sold 36,610 354 0.97 38,926 435 1.12
-------------- ------------- --------------- -------------
TOTAL EARNING ASSETS 2,220,656 112,937 5.09% 2,177,451 120,518 5.53%
Less: allowance for credit losses (14,850) (15,017)
Cash and due from banks 42,294 35,000
Premises and equipment, net 40,303 36,637
Other assets 96,526 96,518
-------------- ---------------
Total assets $2,384,929 $2,330,589
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $230,522 $696 0.30% $198,753 $451 0.23%
Regular savings deposits 209,220 777 0.37 168,864 471 0.28
Money market savings deposits 368,837 2,051 0.56 401,293 2,918 0.73
Time deposits 433,374 8,521 1.97 445,770 11,112 2.49
-------------- ------------- --------------- -------------
Total interest-bearing deposits 1,241,953 12,045 0.97 1,214,680 14,952 1.23
Borrowings 533,914 21,380 4.00 586,792 24,072 4.10
-------------- ------------- --------------- -------------
TOTAL INTEREST-BEARING LIABILITIES 1,775,867 33,425 1.88 1,801,472 39,024 2.17
------------- ------- ------------- --------
Net interest income and spread* $79,512 3.21% $81,494 3.36%
============= ======= ============= ========
Noninterest-bearing demand deposits 392,387 322,431
Other liabilities 19,956 22,694
Stockholder's equity 196,719 183,992
-------------- ---------------
Total liabilities and stockholders' equity $2,384,929 $2,330,589
============== ===============
Interest income/earning assets 5.09% 5.53%
Interest expense/earning assets 1.51 1.79
------- --------
Net interest margin 3.58% 3.74%
======= ========
* Interest income includes the effects of annualized taxable-equivalent
adjustments (reduced by the nondeductible portion of interest expense) using the
appropriate marginal federal income tax rate of 35.00% and, where applicable,
the marginal state income tax rate of 7.00% (or a combined marginal federal and
state rate of 39.55%), to increase tax-exempt interest income to a
taxable-equivalent basis. The annualized taxable-equivalent adjustment amounts
utilized in the above table to compute yields aggregated to $7,671,000 for the
three months ended June 30, 2004 and $8,306,000 for the three months ended June
30, 2003.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)
Six Months Ended June 30,
---------------------------------------------------------------------------------
2004 2003
---------------------------------------- --------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCES INTEREST RATE Balance Interest Rate
---------------- ------------- -------- --------------- ------------- --------
ASSETS
Residential mortgage loans $351,111 $18,917 5.39% $303,413 $18,372 6.06%
Residential construction loans 100,920 4,594 4.55 70,153 3,729 5.32
Commercial mortgage loans 322,104 20,858 6.48 298,017 21,119 7.09
Commercial construction loans 53,377 3,053 5.72 59,863 3,638 6.08
Commercial loans and leases 130,977 8,453 6.45 118,883 8,596 7.23
Consumer loans 260,136 11,832 4.55 230,420 11,810 5.13
-------------- ------------- ------------- -------------
Total loans and leases 1,218,625 67,707 5.56 1,080,749 67,264 6.22
Securities 944,038 46,157 4.89 1,049,040 55,287 5.27
Interest-bearing deposits with banks 918 10 1.09 1,278 14 1.10
Federal funds sold 30,568 294 0.96 37,109 429 1.16
-------------- ------------- ------------- -------------
TOTAL EARNING ASSETS 2,194,149 114,168 5.20% 2,168,176 122,994 5.67%
Less: allowance for credit losses (14,870) (15,028)
Cash and due from banks 40,937 34,799
Premises and equipment, net 39,501 36,452
Other assets 97,059 93,872
-------------- -------------
Total assets $2,356,776 $2,318,271
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $227,254 $655 0.29% $192,468 $484 0.25%
Regular savings deposits 202,253 719 0.36 163,187 530 0.32
Money market savings deposits 371,988 2,018 0.54 402,550 3,017 0.75
Time deposits 420,101 8,119 1.93 443,508 11,417 2.57
-------------- ------------- ------------- -------------
Total interest-bearing deposits 1,221,596 11,511 0.94 1,201,713 15,448 1.29
Borrowings 541,907 21,471 3.96 598,704 24,333 4.06
-------------- ------------- ------------- -------------
TOTAL INTEREST-BEARING LIABILITIES 1,763,503 32,982 1.87 1,800,417 39,781 2.21
------------- ------- ------------- --------
Net interest income and spread* $81,186 3.33% $83,213 3.46%
============= ======= ============= ========
Noninterest-bearing demand deposits 376,361 311,097
Other liabilities 20,673 24,830
Stockholder's equity 196,239 181,927
-------------- -------------
Total liabilities and stockholders' equity $2,356,776 $2,318,271
============== =============
Interest income/earning assets 5.20% 5.67%
Interest expense/earning assets 1.50 1.83
------- --------
Net interest margin 3.70% 3.84%
======= ========
* Interest income includes the effects of annualized taxable-equivalent
adjustments (reduced by the nondeductible portion of interest expense) using the
appropriate marginal federal income tax rate of 35.00% and, where applicable,
the marginal state income tax rate of 7.00% (or a combined marginal federal and
state rate of 39.55%), to increase tax-exempt interest income to a
taxable-equivalent basis. The annualized taxable-equivalent adjustment amounts
utilized in the above table to compute yields aggregated to $7,810,000 for the
six months ended June 30, 2004 and $7,774,000 for the six months ended June 30,
2003.