EXHIBIT 99
[GRAPHIC OMITTED] NEWS RELEASE
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS
INCREASE IN 2003 EARNINGS
OLNEY, MARYLAND, January 15, 2004 -- Sandy Spring Bancorp, (Nasdaq-SASR) the
parent company of Sandy Spring Bank, today announced net income for the year
ended December 31, 2003 of $32.1 million ($2.18 per diluted share) compared to
$30.6 million ($2.08 per diluted share) for the prior year, a 5% increase. Net
income for the fourth quarter of 2003 totaled $6.8 million ($.46 per diluted
share) compared to $8.7 million ($.59 per diluted share) for the fourth quarter
of 2002, a decrease of 22%.
"Net earnings for the full year 2003 were a new high for Sandy Spring Bancorp;
while net earnings results for the fourth quarter in 2003 as compared to 2002
were negatively impacted by a lower amount of mortgage banking revenue and lower
net interest income," said Hunter R. Hollar, President and Chief Executive
Officer. "Despite continuing challenges presented by the interest rate
environment, there are clear signs the economy is beginning to turn and
strengthen, particularly for small businesses. This is encouraging at the outset
of the new year."
"We are a leading independent community banking organization serving central
Maryland geographic markets with a long trend of above-average economic
vitality. The fundamentals of our balance sheet continue to be quite strong,
loan quality is excellent, and we are confident that we are making strategic and
timely investments in our infrastructure to permit us to operate the business
using state-of-the-art resources. Our people reflect a unique sales and service
culture that we believe is unsurpassed in this region. The institution is
soundly positioned to make the most of an improving business climate and build
on our track record of consistency," said Hollar.
For the year ended December 31, 2003, return on average stockholders' equity was
17.29% compared to 18.89% for the prior year. Return on average assets for the
year ended December 31, 2003 was 1.37% compared to 1.42% for the year ended
December 31, 2002. Both numbers, while lower for the full year 2003, are
expected to maintain Sandy Spring in the ranks of high performing banking
companies in the U.S.
Return on average stockholders' equity was 14.16% for the fourth quarter of
2003, compared to 19.84% for the fourth quarter of 2002. Return on average
assets for the fourth quarter of 2003 was 1.14%, compared to 1.52% for the
fourth quarter of 2002.
Comparing December 31, 2003 balances to December 31, 2002, total assets remained
basically level at $2.3 billion versus the prior year. Total deposits increased
5% to $1.6 billion, while total loans and leases increased 8% to $1.2 billion
compared to the prior year. At December 31, 2003, stockholders' equity totaled
$193 million, and increased to 8.29% of total assets from 7.72% at December 31,
2002.
Due to continuing strong asset quality, there was no provision for credit losses
in the fourth quarter compared to a provision of $.3 million in the fourth
quarter of 2002. There was also no provision for credit losses for the year
ended December 31, 2003 compared to a provision of $2.9 million for the prior
year. Net credit losses amounted to just $156 thousand for the full year 2003
and the allowance for credit losses represented coverage of 5.2 times
non-performing loans at December 31, 2003.
The Company's management will host a conference call to discuss its fourth
quarter and full year 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 fourth quarter of 2003 and 2002, net interest income decreased by
$1.3 million, or 6%, due primarily to a decline in the net interest margin to
3.82% in 2003 from 4.16% in 2002; although the net interest margin improved in
the fourth quarter 2003 as compared to the third quarter of 2003.
Noninterest income decreased by $1.5 million, or 17% in the fourth quarter 2003
as compared to 2002. On a non-GAAP basis excluding investment gains, which
decreased by $.7 million, quarterly noninterest income decreased $.8 million, or
10%. While historically low market interest rates had the effect of compressing
the net interest margin in 2003 as compared to 2002, slight increases in
interest rates during the fourth quarter negatively impacted the level of
mortgage banking activity, resulting in a significant decline in gain on sale of
mortgage loans, which decreased 56% in the fourth quarter of 2003 versus 2002.
In addition to the decline in gain on sale of mortgage loans, service charges on
deposit accounts also recorded a decline of 5% for the period due in large part
to lower commercial account fees. Somewhat offsetting the above decreases, fees
from the sale of investment products increased 12%, trust revenues increased 7%,
insurance revenues increased 3% and income from bank owned life insurance
increased 9%.
Noninterest expenses were $17.7 million in the fourth quarter of 2003 compared
to $16.7 million in 2002, a 6% percent increase. Noninterest expenses include
the amortization of intangible assets of $.5 million in the fourth quarter of
2003 compared to $.7 million in the prior year period. The GAAP based efficiency
ratio increased to 68.2% for the fourth quarter of 2003 while the traditional
non-GAAP efficiency ratio increased to 61.8% as compared to the fourth quarter
of 2002. The increases were the result of the expense growth combined with the
effects of the net interest margin contraction and the decrease in gains on sale
of mortgage loans, securities gains, and service charges. The increase in
operating expenses was the result of higher occupancy costs, which increased due
to the opening of new offices and re-development efforts; an increase in
marketing costs associated with a significant new advertising campaign; and
higher other expenses, which were associated primarily with consultant services.
Salaries and benefits for the fourth quarter of 2003 decreased 12% primarily as
a result of reduced incentive compensation expense.
Comparing the year ended December 31, 2003 and 2002, net interest income
decreased by $3.6 million, or 5%, due primarily to the margin compression
resulting from a decline in the net interest margin to 3.80% for the year 2003
from 4.23% for the year 2002. Noninterest income was $33.7 million for the year
ended December 31, 2003 versus $29.7 million for the year ended December 31,
2002, an increase of $4.0 million, or 13%. On a non-GAAP basis, noninterest
income, excluding investment gains, which decreased by $1 million, and $1.1
million in income from the early termination of a sublease, the increase in
noninterest income was $4.0 million, or 14%. This increase was due primarily to
growth in mortgage banking revenues; income from trust operations, insurance
agency revenues and income from bank owned life insurance. Noninterest expenses
were $67.2 million in 2003 compared to $64.0 million in 2002, a 5% percent
increase. Noninterest expenses include the amortization of intangible assets of
$2.5 million in 2003 compared to $2.7 million in 2002. The GAAP based efficiency
ratio was 61.8% for 2003 while the traditional, non-GAAP efficiency ratio was
56.3%, both slightly higher than 2002.
For the full year 2004, management expects earnings per share to be in the range
of $2.25 - $2.40 per fully diluted share. As evidenced by results in 2003, the
Company's mortgage banking revenues are subject to a high degree of uncertainty,
as is the net interest margin. For 2004 as compared to 2003, management's
current expectations are for lower amounts of mortgage banking revenues coupled
with improved levels of average loan growth, which is expected to result in a
higher net interest margin in 2004 than 2003. Management's commitment to
favorable asset quality, and to maintaining a focus on its core deposit
gathering and fee income businesses will continue. Earnings estimates are
inherently uncertain. Please see the information below regarding Forward-Looking
Statements, such as this statement of expected earnings.
ABOUT SANDY SPRING BANCORP/SANDY SPRING BANK
With $2.3 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, and
earnings and performance expectations; estimates of risks and of future costs
and benefits; assessments of probable loan and lease losses and 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 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 Sandy Spring Bancorp'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 Twelve Months Ended
December 31, December 31,
------------------- % -------------------- %
2003 2002 Change 2003 2002 Change
- ------------------------------------------------------------------------------------------------------------------------------
PROFITABILITY FOR THE PERIOD:
Net interest income $ 18,850 $ 20,139 (6) $ 75,035 $ 78,609 (5)
Provision for credit losses 0 300 (100) 0 2,865 (100)
Noninterest income 7,178 8,631 (17) 33,737 29,729 13
Noninterest expenses 17,742 16,698 6 67,226 63,961 5
Income before income taxes 8,286 11,772 (30) 41,545 41,512 0
Net income 6,784 8,687 (22) 32,066 30,585 5
Return on average assets 1.14% 1.52% 1.37% 1.42%
Return on average equity 14.16% 19.84% 17.29% 18.89%
Net interest margin 3.82% 4.16% 3.80% 4.23%
Efficiency ratio - GAAP based * 68.17% 58.04% 61.80% 59.04%
Efficiency ratio - traditional * 61.80% 54.10% 56.33% 54.13%
PER SHARE DATA:
Basic net income $ 0.46 $ 0.60 (23) $ 2.21 $ 2.11 5
Diluted net income 0.46 0.59 (22) 2.18 2.08 5
Dividends declared 0.19 0.18 6 0.74 0.69 7
Book value 13.35 12.25 9 13.35 12.25 9
Tangible book value 12.03 10.76 12 12.03 10.76 12
Average fully diluted shares 14,729,513 14,729,882 14,708,269 14,722,251
AT PERIOD-END:
Assets $ 2,333,342 $ 2,307,404 1 $ 2,333,342 $ 2,307,404 1
Deposits 1,561,830 1,492,212 5 1,561,830 1,492,212 5
Loans and leases 1,153,428 1,063,853 8 1,153,428 1,063,853 8
Securities 998,205 1,046,258 (5) 998,205 1,046,258 (5)
Stockholders' equity 193,449 178,024 9 193,449 178,024 9
CAPITAL AND CREDIT QUALITY RATIOS:
Average equity to average assets 8.06% 7.65% 7.91% 7.49%
Allowance for credit losses to
loans and leases 1.29% 1.41% 1.29% 1.41%
Nonperforming assets to total
assets 0.13% 0.12% 0.13% 0.12%
Annualized net charge-offs to
average loans and leases 0.06% 0.18% 0.01% 0.05%
* 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 and restatements 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 Twelve Months Ended
December 31, December 31,
------------------------ ------------------------
2003 2002 2003 2002
-------- -------- -------- --------
Noninterest expenses-GAAP based $ 17,742 $ 16,698 $ 67,226 $ 63,961
Net interest income plus noninterest income-
GAAP based 26,028 28,770 108,772 108,338
Efficiency ratio-GAAP based 68.17% 58.04% 61.80% 59.04%
======== ======== ======== ========
Noninterest expenses-GAAP based $ 17,742 $ 16,698 $ 67,226 $ 63,961
Less non-GAAP adjustment:
Amortization of intangible assets 486 665 2,480 2,659
-------- -------- -------- --------
Noninterest expenses-traditional ratio 17,256 16,033 64,746 61,302
Net interest income plus noninterest income-
GAAP based 26,028 28,770 108,772 108,338
Plus non-GAAP adjustment:
Tax-equivalency 2,234 1,859 8,237 6,920
Less non-GAAP adjustments:
Securities gains 339 995 996 2,016
Income from an early termination of
a sublease 0 0 1,077 0
-------- -------- -------- --------
Net interest income plus noninterest
income - traditional ratio 27,923 29,634 114,936 113,242
Efficiency ratio - traditional 61.80% 54.10% 56.33% 54.13%
======== ======== ======== ========
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
December 31
-------------------------------
2003 2002
- ----------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 38,397 $ 38,998
Federal funds sold 10,670 9,135
Interest-bearing deposits with banks 724 813
Residential mortgage loans held for sale 12,209 38,435
Investments available-for-sale (at fair value) 639,460 685,586
Investments held-to-maturity - fair value of $344,814 (2003)
and $346,862 (2002) 337,634 340,860
Other equity securities 21,111 19,812
Total loans and leases 1,153,428 1,063,853
Less: allowance for credit losses (14,880) (15,036)
----------- -----------
Net loans and leases 1,138,548 1,048,817
Premises and equipment, net 37,679 36,007
Accrued interest receivable 13,661 14,957
Goodwill 7,642 7,642
Other intangible assets, net 11,446 13,927
Other assets 64,161 52,415
----------- -----------
Total assets $ 2,333,342 $ 2,307,404
=========== ===========
LIABILITIES
Noninterest-bearing deposits $ 368,319 $ 320,583
Interest-bearing deposits 1,193,511 1,171,629
----------- -----------
Total deposits 1,561,830 1,492,212
Short-term borrowings 413,223 488,214
Guaranteed preferred beneficial interests in
the Company's subordinated debentures 35,000 35,000
Other long-term borrowings 115,158 90,500
Accrued interest payable and other liabilities 14,682 23,454
----------- -----------
Total liabilities 2,139,893 2,129,380
STOCKHOLDERS' EQUITY
Common stock -- par value $1.00; shares authorized
50,000,000; shares issued and outstanding 14,495,613 (2003)
and 14,536,094 (2002) 14,496 14,536
Additional paid in capital 18,970 21,128
Retained earnings 153,280 131,939
Accumulated other comprehensive income 6,703 10,421
----------- -----------
Total stockholders' equity 193,449 178,024
----------- -----------
Total liabilities and stockholders' equity $ 2,333,342 $ 2,307,404
=========== ===========
Certain reclassifications and restatements 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 Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
2003 2002 2003 2002
-------- -------- -------- --------
Interest income:
Interest and fees on loans and leases $ 15,995 $ 18,406 $ 64,749 $ 72,710
Interest on loans held for sale 120 400 1,113 976
Interest on deposits with banks 4 6 13 21
Interest and dividends on securities:
Taxable 7,466 8,693 32,076 37,239
Exempt from federal income taxes 3,705 3,363 14,214 11,230
Interest on federal funds sold 38 160 302 546
-------- -------- -------- --------
Total interest income 27,328 31,028 112,467 122,722
Interest expense:
Interest on deposits 2,784 4,620 13,675 19,833
Interest on short-term borrowings 4,015 4,505 17,531 16,351
Interest on long-term borrowings 1,679 1,764 6,226 7,929
-------- -------- -------- --------
Total interest expense 8,478 10,889 37,432 44,113
-------- -------- -------- --------
Net interest income 18,850 20,139 75,035 78,609
Provision for credit losses 0 300 0 2,865
-------- -------- -------- --------
Net interest income after provision 18,850 19,839 75,035 75,744
for credit losses
Noninterest income:
Securities gains 339 995 996 2,016
Service charges on deposit accounts 1,984 2,091 8,032 7,839
Gains on sales of mortgage loans 639 1,461 5,723 3,940
Fees on sales of investment products 512 457 2,211 2,078
Trust department income 721 671 2,955 2,497
Insurance agency commissions 876 848 3,741 3,281
Income from bank owned life insurance 561 516 2,746 1,876
Income from an early termination of a sublease 0 0 1,077 0
Other income 1,546 1,592 6,255 6,202
-------- -------- -------- --------
Total noninterest income 7,178 8,631 33,736 29,729
Noninterest expenses:
Salaries and employee benefits 9,188 10,449 38,084 38,571
Occupancy expense of premises 2,105 1,366 7,061 5,599
Equipment expenses 1,179 1,096 4,420 3,810
Marketing 1,060 493 2,500 1,907
Outside data services 575 574 2,523 2,415
Amortization of intangible assets 486 665 2,480 2,659
Other expenses 3,149 2,055 10,158 9,000
-------- -------- -------- --------
Total noninterest expenses 17,742 16,698 67,226 63,961
-------- -------- -------- --------
Income before income taxes 8,286 11,772 41,545 41,512
Income tax expense 1,502 3,085 9,479 10,927
-------- -------- -------- --------
Net income $ 6,784 $ 8,687 $ 32,066 $ 30,585
======== ======== ======== ========
Basic net income per share $ 0.46 $ 0.60 $ 2.21 $ 2.11
Diluted net income per share 0.46 0.59 2.18 2.08
Dividends declared per share 0.19 0.18 0.74 0.69
Certain reclassifications and restatements of information previously reported
have been made to conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA
2003 2002
(Dollars in thousands, except ------------------------------------------------------------------------------------------
per share data) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
- ---------------------------------------------------------------------------------------------------------------------------------
PROFITABILITY FOR THE QUARTER:
Tax-equivalent interest income $29,562 $30,060 $29,800 $31,282 $32,887 $32,889 $32,703 $31,163
- ---------------------------------------------------------------------------------------------------------------------------------
Interest expense 8,478 9,137 9,744 10,073 10,889 11,121 10,990 11,113
- ---------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent net interest income 21,084 20,923 20,056 21,209 21,998 21,768 21,713 20,050
- ---------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent adjustment 2,234 2,148 1,809 2,046 1,859 1,922 1,670 1,469
- ---------------------------------------------------------------------------------------------------------------------------------
Provision for credit losses 0 0 0 0 300 395 985 1,185
- ---------------------------------------------------------------------------------------------------------------------------------
Noninterest income 7,178 8,751 10,032 7,775 8,631 7,615 6,685 6,798
- ---------------------------------------------------------------------------------------------------------------------------------
Noninterest expenses 17,742 16,904 16,605 15,975 16,698 15,847 16,118 15,298
- ---------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 8,286 10,622 11,674 10,963 11,772 11,219 9,625 8,896
- ---------------------------------------------------------------------------------------------------------------------------------
Income tax expense 1,502 2,404 2,938 2,635 3,085 3,015 2,491 2,336
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income 6,784 8,218 8,736 8,328 8,687 8,204 7,134 6,560
=================================================================================================================================
FINANCIAL RATIOS:
Return on average assets 1.14% 1.37% 1.50% 1.46% 1.52% 1.49% 1.35% 1.29%
- ---------------------------------------------------------------------------------------------------------------------------------
Return on average equity 14.16% 17.42% 19.04% 18.76% 19.84% 19.59% 18.46% 17.48%
- ---------------------------------------------------------------------------------------------------------------------------------
Net interest margin 3.82% 3.71% 3.74% 3.95% 4.16% 4.22% 4.38% 4.18%
- ---------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - GAAP based * 68.17% 61.41% 58.72% 59.30% 58.04% 57.71% 60.30% 60.28%
- ---------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - traditional * 61.80% 54.92% 56.00% 52.84% 54.10% 53.10% 54.41% 54.98%
=================================================================================================================================
PER SHARE DATA:
Basic net income $0.46 $0.57 $0.61 $0.57 $0.60 $0.56 $0.50 $0.45
- ---------------------------------------------------------------------------------------------------------------------------------
Diluted net income $0.46 $0.56 $0.60 $0.56 $0.59 $0.56 $0.48 $0.45
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends declared $0.19 $0.19 $0.18 $0.18 $0.18 $0.17 $0.17 $0.17
- ---------------------------------------------------------------------------------------------------------------------------------
Book value $13.35 $13.10 $13.04 $12.54 $12.25 $11.87 $11.24 $10.41
- ---------------------------------------------------------------------------------------------------------------------------------
Tangible book value $12.03 $11.75 $11.64 $11.10 $10.76 $10.34 $9.66 $8.79
- ---------------------------------------------------------------------------------------------------------------------------------
Average fully diluted shares 14,729,513 14,677,257 14,676,404 14,743,976 14,729,882 14,727,897 14,724,774 14,709,011
=================================================================================================================================
NONINTEREST INCOME BREAKDOWN:
Securities gains (losses) $339 $106 $543 $8 $995 $791 ($3) $233
- ---------------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 1,984 2,027 2,037 1,984 2,091 1,917 1,953 1,878
- ---------------------------------------------------------------------------------------------------------------------------------
Gains on sales of mortgage loans 639 1,906 1,603 1,575 1,461 1,000 741 738
- ---------------------------------------------------------------------------------------------------------------------------------
Fees on sales of investment products 512 512 666 521 457 425 556 640
- ---------------------------------------------------------------------------------------------------------------------------------
Trust department income 721 756 758 720 671 652 605 569
- ---------------------------------------------------------------------------------------------------------------------------------
Insurance agency commissions 876 924 922 1,019 848 657 790 986
- ---------------------------------------------------------------------------------------------------------------------------------
Income from bank owned life insurance 561 866 710 609 516 493 432 435
- ---------------------------------------------------------------------------------------------------------------------------------
Income from an early
termination of a sublease 0 0 1,077 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Other income 1,546 1,654 1,716 1,339 1,592 1,680 1,611 1,319
- ---------------------------------------------------------------------------------------------------------------------------------
Total 7,178 8,751 10,032 7,775 8,631 7,615 6,685 6,798
=================================================================================================================================
NONINTEREST EXPENSE BREAKDOWN:
Salaries and employee benefits $9,188 $9,932 $9,514 $9,450 $10,449 $9,396 $9,430 $9,296
- ---------------------------------------------------------------------------------------------------------------------------------
Occupancy expense of premises 2,105 1,839 1,533 1,584 1,366 1,369 1,558 1,306
- ---------------------------------------------------------------------------------------------------------------------------------
Equipment expenses 1,179 1,101 1,099 1,041 1,096 949 956 809
- ---------------------------------------------------------------------------------------------------------------------------------
Marketing 1,060 477 509 454 493 438 574 402
- ---------------------------------------------------------------------------------------------------------------------------------
Outside data services 575 643 660 645 574 594 634 613
- ---------------------------------------------------------------------------------------------------------------------------------
* 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
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA
2003 2002
(Dollars in thousands, except ------------------------------------------------------------------------------------------
per share data) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
- ---------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE BREAKDOWN
(CONTINUED):
Amortization of intangible assets 486 665 $664 $665 665 665 664 $665
- ---------------------------------------------------------------------------------------------------------------------------------
Other expenses 3,149 2,247 2,626 2,136 2,055 2,436 2,302 2,207
- ---------------------------------------------------------------------------------------------------------------------------------
Total 17,742 16,904 16,605 15,975 16,698 15,847 16,118 15,298
=================================================================================================================================
BALANCE SHEETS AT QUARTER END:
Residential mortgage loans $331,129 $313,873 $292,415 $276,001 $281,088 $278,954 $274,839 $267,691
- ---------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 88,500 74,889 71,016 66,937 73,585 80,655 80,756 74,381
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 287,899 274,705 263,227 260,437 257,118 239,993 241,353 235,294
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 50,187 53,177 47,393 54,238 51,947 56,497 54,749 53,732
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 152,853 150,520 161,772 160,344 166,949 171,174 167,541 158,614
- ---------------------------------------------------------------------------------------------------------------------------------
Consumer loans 242,860 232,377 233,865 232,359 233,166 239,132 238,426 229,878
- ---------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,153,428 1,099,541 1,069,688 1,050,316 1,063,853 1,066,405 1,057,664 1,019,590
- ---------------------------------------------------------------------------------------------------------------------------------
Less: allowance for credit losses (14,880) (15,049) (15,033) (15,023) (15,036) (15,220) (14,911) (13,877)
- ---------------------------------------------------------------------------------------------------------------------------------
Net loans and leases 1,138,548 1,084,492 1,054,655 1,035,293 1,048,817 1,051,187 1,042,753 1,005,713
- ---------------------------------------------------------------------------------------------------------------------------------
Goodwill 7,642 7,642 7,642 7,642 7,642 7,642 7,642 7,642
- ---------------------------------------------------------------------------------------------------------------------------------
Other intangible assets, net 11,446 11,932 12,597 13,262 13,927 14,591 15,256 15,920
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets 2,333,342 2,382,587 2,367,364 2,371,520 2,307,404 2,261,508 2,158,785 2,082,832
- ---------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,561,830 1,558,220 1,590,144 1,555,513 1,492,212 1,465,147 1,409,853 1,393,367
- ---------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 193,449 189,623 188,625 181,854 178,024 172,274 163,081 150,894
=================================================================================================================================
QUARTERLY AVERAGE BALANCE SHEETS:
Residential mortgage loans $331,024 $342,648 $302,344 $304,494 $306,872 $291,703 $279,820 $272,145
- ---------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 81,046 77,466 68,296 72,031 79,698 78,816 76,261 79,701
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 280,104 262,263 263,616 258,707 253,465 242,138 241,594 235,783
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 51,657 50,746 52,847 52,970 52,572 55,657 54,227 54,494
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 146,282 157,277 162,149 163,216 167,319 166,540 160,745 149,170
- ---------------------------------------------------------------------------------------------------------------------------------
Consumer loans 237,478 232,891 229,085 231,770 234,243 240,174 231,585 221,083
- ---------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,127,591 1,123,291 1,078,337 1,083,188 1,094,169 1,075,028 1,044,232 1,012,376
- ---------------------------------------------------------------------------------------------------------------------------------
Securities 1,055,558 1,084,348 1,058,878 1,039,112 987,663 943,083 910,235 882,497
- ---------------------------------------------------------------------------------------------------------------------------------
Total earning assets 2,201,368 2,229,467 2,177,451 2,158,817 2,125,714 2,051,202 1,987,313 1,926,617
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets 2,357,816 2,383,783 2,330,589 2,305,834 2,269,918 2,186,028 2,119,776 2,064,136
- ---------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 1,797,037 1,812,412 1,801,472 1,799,132 1,769,910 1,719,174 1,683,225 1,637,363
- ---------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing demand deposits 351,761 355,119 322,431 299,638 307,585 284,915 269,658 260,575
- ---------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,556,965 1,581,873 1,537,111 1,488,023 1,469,979 1,418,211 1,393,004 1,368,143
- ---------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity 190,063 187,183 183,992 180,044 173,741 166,183 155,049 152,198
=================================================================================================================================
CAPITAL AND CREDIT QUALITY MEASURES:
Average equity to average assets 8.06% 7.85% 7.89% 7.81% 7.65% 7.60% 7.31% 7.37%
- ---------------------------------------------------------------------------------------------------------------------------------
Credit loss allowance to loans and 1.29% 1.37% 1.41% 1.43% 1.41% 1.43% 1.41% 1.36%
leases
- ---------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets to total assets 0.13% 0.14% 0.07% 0.08% 0.12% 0.32% 0.35% 0.38%
- ---------------------------------------------------------------------------------------------------------------------------------
Annualized net (charge-offs)
recoveries to average loans
and leases (0.06)% 0.00% 0.00% 0.00% (0.18)% (0.03)% 0.02% 0.02%
=================================================================================================================================
MISCELLANEOUS DATA:
Net (charge-offs) recoveries ($169) $16 $10 ($13) ($484) ($86) $49 $39
- ---------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets:
Non-accrual loans and leases 522 564 479 567 588 6,109 5,730 6,039
- ---------------------------------------------------------------------------------------------------------------------------------
Loans and leases 90 days past due 2,333 2,612 900 1,381 2,157 1,022 1,761 1,872
- ---------------------------------------------------------------------------------------------------------------------------------
Restructured loans and leases 0 0 0 0 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
Other real estate owned, net 77 125 187 0 0 44 79 50
- ---------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets 2,932 3,301 1,566 1,948 2,745 7,175 7,570 7,961
=================================================================================================================================
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)
Three Months Ended December 31,
------------------------------------ ------------------------------------
2003 2002
-------------------------------------------------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCES INTEREST RATE Balance Interest Rate
------------------------------------ --------------------------------------
ASSETS
Residential mortgage loans $ 331,024 $ 18,308 5.53% $ 306,872 $ 19,722 6.43%
Residential construction loans 81,046 3,721 4.59 79,698 4,475 5.61
Commercial mortgage loans 280,104 18,540 6.62 253,465 18,893 7.45
Commercial construction loans 51,657 2,679 5.19 52,572 6,001 11.41
Commercial loans and leases 146,282 9,876 6.75 167,319 12,573 7.51
Consumer loans 237,478 10,975 4.62 234,243 13,128 5.60
---------- ---------- ---------- ----------
Total loans and leases 1,127,591 64,099 5.69 1,094,169 74,792 6.84
Securities 1,055,558 53,170 5.04 987,663 56,232 5.69
Interest-bearing deposits with banks 2,160 17 0.79 1,134 27 2.38
Federal funds sold 16,059 151 0.94 42,748 638 1.49
---------- ---------- ---------- ----------
TOTAL EARNING ASSETS 2,201,368 117,437 5.33% 2,125,714 131,689 6.19%
Less: allowance for credit losses (15,011) (15,204)
Cash and due from banks 35,986 36,017
Premises and equipment, net 37,787 35,946
Other assets 97,686 87,445
---------- ----------
Total assets $2,357,816 $2,269,918
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $ 211,449 $ 411 0.19% $ 177,986 $ 629 0.35%
Regular savings deposits 186,046 496 0.27 151,901 701 0.46
Money market savings deposits 394,355 1,872 0.47 393,665 4,509 1.15
Time deposits 413,354 8,267 2.00 438,842 12,494 2.85
---------- ---------- ---------- ----------
Total interest-bearing deposits 1,205,204 11,046 0.92 1,162,394 18,333 1.58
Borrowings 591,833 22,306 3.77 607,516 24,872 4.09
---------- ---------- ---------- ----------
TOTAL INTEREST-BEARING LIABILITIES 1,797,037 33,352 1.86 1,769,910 43,205 2.44
---------- ------ ---------- ------
Net interest income and spread $ 84,085 3.47% $ 88,484 3.75%
========== ====== ========== ======
Noninterest-bearing demand deposits 351,761 307,585
Other liabilities 18,955 18,682
Stockholder's equity 190,063 173,741
---------- ----------
Total liabilities and
stockholders' equity $2,357,816 $2,269,918
========== ==========
Interest income/earning assets 5.33% 6.19%
Interest expense/earning assets 1.51 2.03
------ ------
Net interest margin 3.82% 4.16%
====== ======
*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 $9,300,000 in 2003
and $8,415,000 in 2002.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)
Twelve Months Ended December 31,
-----------------------------------------------------------------------------
2003 2002
-----------------------------------------------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCES INTEREST RATE Balance Interest Rate
-----------------------------------------------------------------------------
ASSETS
Residential mortgage loans $ 320,262 $ 18,491 5.77% $ 287,853 $ 19,690 6.84%
Residential construction loans 74,742 3,675 4.92 78,619 4,455 5.67
Commercial mortgage loans 266,220 18,385 6.91 243,290 18,930 7.78
Commercial construction loans 52,048 2,960 5.69 54,236 3,958 7.30
Commercial loans and leases 157,185 10,993 6.99 161,009 12,872 7.99
Consumer loans 232,822 11,358 4.88 231,831 13,781 5.94
---------- ---------- ---------- ----------
Total loans and leases 1,103,279 65,862 5.97 1,056,838 73,686 6.97
Securities 1,059,583 54,527 5.15 931,192 55,389 5.95
Interest-bearing deposits with banks 1,538 13 0.87 1,546 21 1.36
Federal funds sold 27,565 302 1.09 33,872 546 1.61
---------- ---------- ---------- ----------
TOTAL EARNING ASSETS 2,191,965 120,704 5.50% 2,023,448 129,642 6.41%
Less: allowance for credit losses (15,020) (14,429)
Cash and due from banks 34,929 34,993
Premises and equipment, net 37,207 34,347
Other assets 95,662 82,248
---------- ----------
Total assets $2,344,743 $2,160,607
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $ 200,855 $ 465 0.23% $ 173,935 $ 550 0.32%
Regular savings deposits 173,078 512 0.30 143,357 1,163 0.81
Money market savings deposits 401,716 2,436 0.61 386,571 4,582 1.19
Time deposits 433,244 10,262 2.37 427,943 13,538 3.16
---------- ---------- ---------- ----------
Total interest-bearing deposits 1,208,893 13,675 1.13 1,131,806 19,833 1.75
Borrowings 593,684 23,757 4.00 571,021 24,280 4.25
---------- ---------- ---------- ----------
TOTAL INTEREST-BEARING LIABILITIES 1,802,577 37,432 2.08 1,702,827 44,113 2.59
---------- ------ ---------- ------
Net interest income and spread $ 83,272 3.43% $ 85,529 3.82%
========== ====== ========== ======
Noninterest-bearing demand deposits 332,443 280,839
Other liabilities 24,305 15,038
Stockholder's equity 185,418 161,903
---------- ----------
Total liabilities and
stockholders' equity $2,344,743 $2,160,607
========== ==========
Interest income/earning assets 5.50% 6.41%
Interest expense/earning assets 1.70 2.18
------ ------
Net interest margin 3.80% 4.23%
====== ======
*Interest income includes the effects of 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 taxable-equivalent adjustment amounts utilized in the above table to compute
yields aggregated to $8,237,000 in 2003 and $6,920,000 in 2002.