Exhibit 99
NEWS RELEASE
[GRAPHIC]
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS
THIRD QUARTER RESULTS
OLNEY, MARYLAND, October 14, 2004 -- Sandy Spring Bancorp, (Nasdaq:SASR) the
parent company of Sandy Spring Bank, today announced net income for the third
quarter of 2004 of $6.4 million ($.44 per diluted share) compared to $8.2
million ($.56 per diluted share) for the third quarter of 2003, a 22% decrease.
Net income for the nine-month period ending September 30, 2004 totaled $20.1
million ($1.37 per diluted share) compared to $25.3 million ($1.72 per diluted
share) for the prior year period, a 21% decrease.
Net income for the third quarter and nine months were both lower compared to the
same periods for last year, as a result of lower net interest margins in a
historically low interest rate environment, a decline in gains on sales of
loans, as mortgage refinancings slowed, and increased operating expenses.
However, total loan and deposit growth has been consistently strong and has
increased on a sequential quarterly basis during 2004. Loan balances were up 24%
and deposit balances were up 10% over the past twelve months. "In our view, the
basic elements of our business are quite healthy with positive momentum," said
Hunter R. Hollar, President and Chief Executive Officer of Sandy Spring Bancorp.
"Fees on the sales of investment products, trust revenues and insurance
commissions, while seasonal from quarter to quarter, are all showing growth year
over year. Asset quality remains an outstanding hallmark of this organization.
It's an ongoing top priority that stands uncompromised as we work our way
through this challenging earnings cycle."
Return on average stockholders' equity was 12.89% for the third quarter of 2004,
compared to 17.35% for the third quarter of 2003. Return on average assets for
the third quarter of 2004 was 1.03%, compared to 1.37% for the third quarter of
2003.
For the first nine months of 2004, return on average stockholders' equity was
13.65% compared to 18.32% for the first nine months of 2003. Return on average
assets for the first nine months of 2004 was 1.12% compared to 1.44% for the
first nine months of 2003.
Comparing September 30, 2004 balances to September 30, 2003, total assets
increased 5% to $2.5 billion. Total loans and leases grew 24% to $1.4 billion
and investment securities decreased 15% to $940 million while total deposits
increased 10% to $1.7 billion. During the same period, stockholders' equity
increased 6% to $202 million or 8.0% of total assets. In August, the Company
issued $35 million in subordinated debentures. The proceeds will be used later
this year to redeem the 9.375% $35 million debentures issued in 1999. This
action resulted in subordinated debentures showing a temporary increase at
September 30. Due to continuing strong asset quality, there was no provision for
credit losses in the first nine months of 2004 or 2003.
The Company's management will host a conference call to discuss its third
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 third 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. The net interest margin declined to 3.55% in 2004 from 3.71% in 2003.
Noninterest income decreased by $1.3 million or 15% versus 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 63% versus the prior year period. Offsetting part of the decline
in mortgage banking revenues were increases of 8% in trust revenues and 15% in
Visa(R) check fees. Noninterest expenses were $17.9 million in the third quarter
of 2004 compared to $16.9 million in 2003, a 6% increase. Noninterest expenses
include the amortization of intangible assets of $.5 million in 2004 compared to
$.7 million in the third quarter of 2003. The GAAP based efficiency ratio
increased to 69.57% for the third quarter while the traditional non-GAAP
efficiency ratio increased to 62.73%. These 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 sale of mortgage loans. Operating
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.
Comparing the first nine months of 2004 and 2003, net interest income decreased
by $1.3 million or 2% due primarily to the margin compression discussed above,
which resulted in a decline in the net interest margin to 3.65% for the first
nine months of 2004 compared to 3.80% for the same period in 2003. Noninterest
income was $23.2 million for the nine months ended September 30, 2004 versus
$26.5 million for the same period in 2003, a decrease of $3.3 million or 13%.
This decrease was due primarily to a 51% decrease in gains on sales of mortgage
loans and the one time gain of $1.1 million on early termination of a sublease
in 2003, offset in part by increases of 14% in trust revenues and 8% in
insurance agency commissions. Other noninterest income increased $.6 million or
16% for the first nine months of 2004 compared to 2003 due primarily to
increases in gains on sale of other real estate owned and gains on sales of SBA
loans. Noninterest expenses were $52.9 million for the first nine months of 2004
compared to $49.5 million for the same period in 2003, a 7% increase.
Noninterest expenses include the amortization of intangible assets of $1.5
million for the first nine months of 2004 compared to $2.0 million for the first
nine months of 2003. The GAAP based efficiency ratio increased to 67.7% for the
first nine months of 2004 while the traditional, non-GAAP efficiency ratio
increased to 61.5%. 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 $2.5 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
Philip J. Mantua, Executive V.P. & Chief Financial Officer
Sandy Spring Bancorp
17801 Georgia Avenue
Olney, Maryland 20832
1-800-399-5919
E-mail: HHollar@sandyspringbank.com
PMantua@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 Nine Months Ended
September 30, September 30,
-------------------------- % ------------------------ %
2004 2003 Change 2004 2003 Change
- ----------------------------------------------------------------------------------------------------------------------- -------
PROFITABILITY FOR THE PERIOD:
Net interest income $18,369 $18,775 (2) $54,857 $56,185 (2)
Provision for credit losses 0 0 0 0 0 0
Noninterest income 7,420 8,751 (15) 23,220 26,558 (13)
Noninterest expenses 17,941 16,904 6 52,866 49,484 7
Income before income taxes 7,848 10,622 (26) 25,211 33,259 (24)
Net income 6,417 8,218 (22) 20,111 25,282 (20)
Return on average assets 1.03% 1.37% 1.12% 1.44%
Return on average equity 12.89% 17.35% 13.65% 18.32%
Net interest margin 3.55% 3.71% 3.65% 3.80%
Efficiency ratio - GAAP based * 69.57% 61.41% 67.71% 59.80%
Efficiency ratio - traditional * 62.73% 54.92% 61.45% 54.58%
PER SHARE DATA:
Basic net income $0.44 $0.57 (23) $1.39 $1.75 (21)
Diluted net income 0.44 0.56 (21) 1.37 1.72 (20)
Dividends declared 0.20 0.19 5 0.58 0.55 5
Book value 13.92 13.10 6 13.92 13.10 6
Tangible book value 12.70 11.75 8 12.70 11.75 8
Average fully diluted shares 14,673,756 14,677,257 14,705,413 14,697,878
AT PERIOD-END:
Assets $2,506,302 $2,383,669 5 $2,506,302 $2,383,669 5
Deposits 1,709,642 1,558,220 10 1,709,642 1,558,220 10
Loans and leases 1,365,483 1,099,541 24 1,365,483 1,099,541 24
Securities 940,189 1,104,478 (15) 940,189 1,104,478 (15)
Stockholders' equity 201,737 189,623 6 201,737 189,623 6
CAPITAL AND CREDIT QUALITY RATIOS:
Average equity to average assets 8.03% 7.88% 8.22% 7.88%
Allowance for credit losses to loans
and leases 1.08% 1.37% 1.08% 1.37%
Nonperforming assets to total assets 0.09% 0.14% 0.09% 0.14%
Annualized net (charge-offs) recoveries
to average loans and leases 0.01% 0.00% (0.01)% 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 Nine Months Ended
September 30, September 30,
------------------------------------------ --------------------------------
2004 2003 2004 2003
-------------------- -------------------- --------------- ---------------
Noninterest expenses-GAAP based $17,941 $16,904 $52,866 $49,484
Net interest income plus noninterest income-
GAAP based 25,789 27,526 78,077 82,743
Efficiency ratio-GAAP based 69.57% 61.41% 67.71% 59.80%
==================== ==================== =============== ===============
Noninterest expenses-GAAP based $17,941 $16,904 $52,866 $49,484
Less non-GAAP adjustment:
Amortization of intangible assets 486 665 1,459 1,994
-------------------- -------------------- --------------- ---------------
Noninterest expenses-traditional ratio 17,455 16,239 51,407 47,490
Net interest income plus noninterest income-
GAAP based 25,789 27,526 78,077 82,743
Plus non-GAAP adjustment:
Tax-equivalency 2,175 2,148 6,059 6,003
Less non-GAAP adjustments:
Securities gains 138 106 475 657
Income from an early termination of
a sublease 0 0 0 1,077
-------------------- -------------------- --------------- ---------------
Net interest income plus noninterest
income - traditional ratio 27,826 29,568 83,661 87,012
Efficiency ratio - traditional 62.73% 54.92% 61.45% 54.58%
==================== ==================== =============== ===============
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
September 30, December 31,
------------------------------------ -----------------
2004 2003 2003
- --------------------------------------------------------------------------------------------------------- ----------------
ASSETS
Cash and due from banks $43,390 $43,718 $38,397
Federal funds sold 27,086 6,265 10,670
Interest-bearing deposits with banks 512 927 724
Residential mortgage loans held for sale 8,849 9,390 12,209
Investments available-for-sale (at fair value) 598,886 735,158 639,460
Investments held-to-maturity - fair value of $328,531,
$353,332, and $344,814, respectively 321,451 347,953 337,634
Other equity securities 19,852 21,367 21,111
Total loans and leases 1,365,483 1,099,541 1,153,428
Less: allowance for credit losses (14,792) (15,049) (14,880)
---------- ---------- ----------
Net loans and leases 1,350,691 1,084,492 1,138,548
Premises and equipment, net 40,991 37,671 37,679
Accrued interest receivable 13,049 15,292 13,661
Goodwill 7,642 7,642 7,642
Other intangible assets, net 9,987 11,932 11,446
Other assets 63,916 61,862 65,243
---------- ---------- ----------
Total assets $2,506,302 $2,383,669 $2,334,424
========== ========== ==========
LIABILITIES
Noninterest-bearing deposits $423,254 $350,700 $368,319
Interest-bearing deposits 1,286,388 1,207,520 1,193,511
---------- ---------- ----------
Total deposits 1,709,642 1,558,220 1,561,830
Short-term borrowings 393,528 495,551 413,223
Subordinated debentures 70,000 35,000 35,000
Other long-term borrowings 114,696 88,346 115,158
Accrued interest payable and other liabilities 16,699 16,929 15,764
---------- ---------- ----------
Total liabilities 2,304,565 2,194,046 2,140,975
STOCKHOLDERS' EQUITY
Common stock -- par value $1.00; shares
authorized 50,000,000; shares issued
and outstanding 14,493,104
14,474,374 and 14,495,613, respectively 14,493 14,474 14,496
Additional paid in capital 18,473 18,704 18,970
Retained earnings 164,977 149,249 153,280
Accumulated other comprehensive income 3,794 7,196 6,703
---------- ---------- ----------
Total stockholders' equity 201,737 189,623 193,449
---------- ---------- ----------
Total liabilities and stockholders' equity $2,506,302 $2,383,669 $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 Nine Months Ended
September 30, September 30,
------------------------------------------ --------------------------------
2004 2003 2004 2003
-------------------- -------------------- --------------- ---------------
Interest income:
Interest and fees on loans and leases $18,233 $15,883 $51,608 $48,754
Interest on loans held for sale 172 422 522 993
Interest on deposits with banks 3 2 8 9
Interest and dividends on securities:
Taxable 5,472 7,998 17,537 24,610
Exempt from federal income taxes 3,678 3,558 10,780 10,509
Interest on federal funds sold 133 49 280 264
-------------------- -------------------- --------------- ---------------
Total interest income 27,691 27,912 80,735 85,139
Interest expense:
Interest on deposits 3,412 3,230 9,136 10,891
Interest on short-term borrowings 4,717 4,389 12,167 13,516
Interest on long-term borrowings 1,193 1,518 4,575 4,547
-------------------- -------------------- --------------- ---------------
Total interest expense 9,322 9,137 25,878 28,954
-------------------- -------------------- --------------- ---------------
Net interest income 18,369 18,775 54,857 56,185
Provision for credit losses 0 0 0 0
-------------------- -------------------- --------------- ---------------
Net interest income after
provision for credit losses 18,369 18,775 54,857 56,185
Noninterest income:
Securities gains (losses) 138 106 475 657
Service charges on deposit accounts 1,886 2,027 5,635 6,048
Gains on sales of mortgage loans 714 1,906 2,511 5,084
Fees on sales of investment products 475 512 1,770 1,699
Trust department income 813 756 2,551 2,234
Insurance agency commissions 944 924 3,095 2,865
Income from bank owned life insurance 614 866 1,857 2,185
Income from an early termination of a sublease 0 0 0 1,077
Visa Check Fees 498 434 1,419 1,353
Other income 1,338 1,220 3,907 3,356
-------------------- -------------------- --------------- ---------------
Total noninterest income 7,420 8,751 23,220 26,558
Noninterest expenses:
Salaries and employee benefits 10,353 9,932 30,571 28,896
Occupancy expense of premises 1,861 1,839 5,304 4,956
Equipment expenses 1,380 1,101 3,894 3,241
Marketing 385 477 1,380 1,440
Outside data services 697 643 2,184 1,948
Amortization of intangible assets 486 665 1,459 1,994
Other expenses 2,779 2,247 8,074 7,009
-------------------- -------------------- --------------- ---------------
Total noninterest expenses 17,941 16,904 52,866 49,484
-------------------- -------------------- --------------- ---------------
Income before income taxes 7,848 10,622 25,211 33,259
Income tax expense 1,431 2,404 5,100 7,977
-------------------- -------------------- --------------- ---------------
Net income $6,417 $ 8,218 $20,111 $25,282
==================== ==================== =============== ===============
Basic net income per share $ 0.44 $ 0.57 $ 1.39 $ 1.75
Diluted net income per share 0.44 0.56 1.37 1.72
Dividends declared per share 0.20 0.19 0.58 0.55
Certain reclassifications of information previously reported have been made to
conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA 2004 2003
------------------------------------ ---------------------------------------------
(Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1
- ---------------------------------------------------------------------------------- ---------------------------------------------
PROFITABILITY FOR THE QUARTER:
Tax-equivalent interest income $29,866 $28,164 $28,764 $29,562 $30,060 $29,800 $31,282
- ----------------------------------------------------------------------------------------------------------------------------------
Interest expense 9,322 8,383 8,173 8,478 9,137 9,744 10,073
- ----------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent net interest income 20,544 19,781 20,591 21,084 20,923 20,056 21,209
- ----------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent adjustment 2,175 1,919 1,965 2,234 2,148 1,809 2,046
- ----------------------------------------------------------------------------------------------------------------------------------
Provision for credit losses 0 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Noninterest income 7,420 8,241 7,559 7,178 8,751 10,032 7,757
- ----------------------------------------------------------------------------------------------------------------------------------
Noninterest expenses 17,941 18,155 16,770 17,742 16,904 16,605 15,957
- ----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 7,848 7,948 9,415 8,286 10,622 11,674 10,963
- ----------------------------------------------------------------------------------------------------------------------------------
Income tax expense 1,431 1,555 2,114 1,502 2,404 2,938 2,635
- ----------------------------------------------------------------------------------------------------------------------------------
Net Income 6,417 6,393 7,301 6,784 8,218 8,736 8,328
==================================================================================================================================
FINANCIAL RATIOS:
Return on average assets 1.03% 1.08% 1.26% 1.14% 1.37% 1.50% 1.46%
- ----------------------------------------------------------------------------------------------------------------------------------
Return on average equity 12.89% 13.07% 15.00% 14.16% 17.35% 19.04% 18.76%
- ----------------------------------------------------------------------------------------------------------------------------------
Net interest margin 3.55% 3.58% 3.82% 3.82% 3.71% 3.74% 3.95%
- ----------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - GAAP based * 69.57% 69.55% 64.04% 68.17% 61.41% 58.74% 59.28%
- ----------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - traditional * 62.73% 63.30% 58.32% 61.80% 54.92% 56.02% 52.81%
==================================================================================================================================
PER SHARE DATA:
Basic net income $0.44 $0.44 $0.50 $0.46 $0.57 $0.61 $0.57
- ----------------------------------------------------------------------------------------------------------------------------------
Diluted net income $0.44 $0.43 $0.50 $0.46 $0.56 $0.60 $0.56
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends declared $0.20 $0.19 $0.19 $0.19 $0.19 $0.18 $0.18
- ----------------------------------------------------------------------------------------------------------------------------------
Book value $13.92 $13.51 $13.76 $13.35 $13.10 $13.04 $12.54
- ----------------------------------------------------------------------------------------------------------------------------------
Tangible book value $12.70 $12.26 $12.48 $12.03 $11.75 $11.64 $11.10
- ----------------------------------------------------------------------------------------------------------------------------------
Average fully diluted shares 14,673,756 14,726,117 14,725,261 14,729,513 14,677,257 14,676,404 14,743,976
==================================================================================================================================
NONINTEREST INCOME BREAKDOWN:
Securities gains (losses) $138 $109 $228 $339 $106 $543 $8
- ----------------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 1,886 1,881 1,868 1,984 2,027 2,037 1,984
- ----------------------------------------------------------------------------------------------------------------------------------
Gains on sales of mortgage loans 714 1,028 769 639 1,906 1,603 1,575
- ----------------------------------------------------------------------------------------------------------------------------------
Fees on sales of investment products 475 666 629 512 512 666 521
- ----------------------------------------------------------------------------------------------------------------------------------
Trust department income 813 984 754 721 756 758 720
- ----------------------------------------------------------------------------------------------------------------------------------
Insurance agency commissions 944 1,030 1,121 876 924 922 1,019
- ----------------------------------------------------------------------------------------------------------------------------------
Income from bank owned life insurance 614 613 630 561 866 710 609
- ----------------------------------------------------------------------------------------------------------------------------------
Income from early termination
of a sublease 0 0 0 0 0 1,077 0
- ----------------------------------------------------------------------------------------------------------------------------------
Visa Check Fees 498 497 424 439 434 494 425
- ----------------------------------------------------------------------------------------------------------------------------------
Other income 1,338 1,433 1,136 1,107 1,220 1,240 896
- ----------------------------------------------------------------------------------------------------------------------------------
Total 7,420 8,241 7,559 7,178 8,751 10,050 7,757
==================================================================================================================================
NONINTEREST EXPENSE BREAKDOWN:
Salaries and employee benefits $10,353 $10,285 $9,933 $9,188 $9,932 $9,514 $9,450
- ----------------------------------------------------------------------------------------------------------------------------------
Occupancy expense of premises 1,861 1,815 1,628 2,105 1,839 1,533 1,584
- ----------------------------------------------------------------------------------------------------------------------------------
Equipment expenses 1,380 1,324 1,190 1,179 1,101 1,099 1,041
- ----------------------------------------------------------------------------------------------------------------------------------
Marketing 385 482 513 1,060 477 509 454
- ----------------------------------------------------------------------------------------------------------------------------------
Outside data services 697 766 721 671 643 660 645
- ----------------------------------------------------------------------------------------------------------------------------------
* 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
HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA 2004 2003
----------------------------- ----------------------------------------------
(Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1
- ------------------------------------------------------------------------------ ----------------------------------------------
NONINTEREST EXPENSE BREAKDOWN (CONTINUED):
Amortization of intangible assets 486 $487 $486 486 665 664 $665
- ------------------------------------------------------------------------------------------------------------------------------
Other expenses 2,779 2,996 2,299 3,053 2,247 2,644 2,118
- ------------------------------------------------------------------------------------------------------------------------------
Total 17,941 18,155 16,770 17,742 16,904 16,623 15,957
==============================================================================================================================
BALANCE SHEETS AT QUARTER END:
Residential mortgage loans $365,352 $343,176 $337,850 $331,129 $313,873 $292,415 $276,001
- ------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 126,338 113,382 103,292 88,500 74,889 71,016 66,937
- ------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 372,790 329,894 322,754 323,099 310,502 299,621 297,428
- ------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 62,436 55,563 52,162 51,518 55,337 53,626 61,434
- ------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 138,741 140,560 125,527 116,322 112,563 119,145 116,157
- ------------------------------------------------------------------------------------------------------------------------------
Consumer loans 299,826 284,771 260,644 242,860 232,377 233,865 232,359
- ------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,365,483 1,267,346 1,202,229 1,153,428 1,099,541 1,069,688 1,050,316
==============================================================================================================================
Less: allowance for credit losses (14,792) (14,743) (14,875) (14,880) (15,049) (15,033) (15,023)
- ------------------------------------------------------------------------------------------------------------------------------
Net loans and leases 1,350,691 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 7,642
- ------------------------------------------------------------------------------------------------------------------------------
Other intangible assets, net 9,987 10,473 10,959 11,446 11,932 12,597 13,262
- ------------------------------------------------------------------------------------------------------------------------------
Total assets 2,506,302 2,424,199 2,371,572 2,334,424 2,383,669 2,368,446 2,372,602
- ------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,709,642 1,681,552 1,618,591 1,561,830 1,558,220 1,590,144 1,555,513
- ------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 201,737 196,090 199,615 193,449 189,623 188,625 181,854
==============================================================================================================================
QUARTERLY AVERAGE BALANCE SHEETS:
Residential mortgage loans $362,170 $355,676 $346,545 $331,024 $342,648 $302,344 $304,494
- ------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 119,989 108,118 93,722 81,046 77,466 68,296 72,031
- ------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 347,451 327,441 316,768 315,603 298,359 300,309 295,728
- ------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 61,771 55,234 51,519 53,403 54,942 59,561 56,568
- ------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 137,321 134,627 127,327 109,037 116,985 118,742 122,597
- ------------------------------------------------------------------------------------------------------------------------------
Consumer loans 293,025 268,861 251,411 237,478 232,891 229,085 231,770
- ------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,321,727 1,249,957 1,187,292 1,127,591 1,123,291 1,078,337 1,083,188
- ------------------------------------------------------------------------------------------------------------------------------
Securities 938,448 933,253 954,822 1,055,558 1,084,348 1,058,878 1,039,112
- ------------------------------------------------------------------------------------------------------------------------------
Total earning assets 2,299,895 2,220,656 2,167,641 2,201,368 2,229,467 2,177,451 2,158,817
- ------------------------------------------------------------------------------------------------------------------------------
Total assets 2,466,535 2,384,929 2,328,985 2,357,816 2,383,783 2,330,589 2,305,834
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 1,844,996 1,775,867 1,751,225 1,797,037 1,812,412 1,801,472 1,799,132
- ------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing demand deposits 405,647 392,387 360,341 351,761 355,119 322,431 299,638
- ------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,684,328 1,634,340 1,561,666 1,556,965 1,581,872 1,537,111 1,488,023
- ------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity 198,030 196,719 195,730 190,063 187,183 183,992 180,044
==============================================================================================================================
CAPITAL AND CREDIT QUALITY MEASURES:
Average equity to average assets 8.03% 8.25% 8.40% 8.06% 7.88% 7.89% 7.81%
- ------------------------------------------------------------------------------------------------------------------------------
Credit loss allowance to loans and leases 1.08% 1.16% 1.24% 1.29% 1.37% 1.41% 1.43%
- ------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets to total assets 0.09% 0.12% 0.14% 0.13% 0.14% 0.07% 0.08%
- ------------------------------------------------------------------------------------------------------------------------------
Annualized net (charge-offs) recoveries
to average loans and leases 0.01% (0.04)% 0.00% (0.06)% 0.00% 0.00% 0.00%
==============================================================================================================================
MISCELLANEOUS DATA:
Net (charge-offs) recoveries $48 ($131) ($5) ($169) $16 $10 ($13)
- ------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets:
Non-accrual loans and leases 848 674 802 522 564 479 567
- ------------------------------------------------------------------------------------------------------------------------------
Loans and leases 90 days past due 1,340 2,316 2,492 2,333 2,612 900 1,381
- ------------------------------------------------------------------------------------------------------------------------------
Restructured loans and leases 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------
Other real estate owned, net 0 0 77 77 125 187 0
- ------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets 2,188 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 September 30,
--------------------------------------------------------------------------------
2004 2003
-------------------------------------- ---------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCE INTEREST RATE Balance Interest Rate
---------------- ------------- ------- ---------------- ------------- --------
ASSETS
Residential mortgage loans $362,170 $19,719 5.44 % $342,648 $18,702 5.46 %
Residential construction loans 119,989 5,828 4.86 77,466 3,560 4.60
Commercial mortgage loans 347,451 22,413 6.45 298,359 20,741 6.95
Commercial construction loans 61,771 3,600 5.83 54,942 3,216 5.85
Commercial loans and leases 137,321 8,661 6.31 116,985 7,926 6.78
Consumer loans 293,025 13,114 4.48 232,891 10,968 4.71
--------- ------ ---- --------- ------
Total loans and leases 1,321,727 73,335 5.55 1,123,291 65,113 5.80
Securities 938,448 44,655 4.76 1,084,348 53,768 4.96
Interest-bearing deposits with banks 748 10 1.34 1,430 9 0.63
Federal funds sold 38,972 532 1.37 20,398 195 0.96
--------- ------ ---- --------- ------
TOTAL EARNING ASSETS 2,299,895 118,532 5.15 % 2,229,467 119,085 5.34 %
Less: allowance for credit losses (14,739) (15,013)
Cash and due from banks 42,278 34,026
Premises and equipment, net 41,061 38,098
Other assets 98,040 97,205
---------- ----------
Total assets $2,466,535 $2,383,783
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $237,212 $704 0.30 % $206,759 $487 0.24 %
Regular savings deposits 229,021 847 0.37 179,572 496 0.28
Money market savings deposits 360,888 2,390 0.66 407,480 1,878 0.46
Time deposits 451,560 9,634 2.13 432,942 10,096 2.33
--------- ------ ---- --------- ------
Total interest-bearing deposits 1,278,681 13,575 1.06 1,226,753 12,957 1.06
Borrowings 566,315 23,259 4.11 585,659 23,394 3.99
--------- ------ ---- --------- ------
TOTAL INTEREST-BEARING LIABILITIES 1,844,996 36,834 2.00 1,812,412 36,351 2.01
------- ---- --------- ------ ----
Net interest income and spread* $81,698 3.15 % $82,734 3.33 %
======= ==== ======= ====
Noninterest-bearing demand deposits 405,647 355,119
Other liabilities 17,862 28,370
Stockholder's equity 198,030 187,882
========== ==========
Total liabilities and stockholders' equity $2,466,535 $2,383,783
========== ==========
Interest income/earning assets 5.15 % 5.34 %
Interest expense/earning assets 1.60 1.63
------- --------
Net interest margin 3.55 % 3.71 %
======= ========
* 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 $8,653,000 for the
three months ended September 30, 2004 and $8,522,000 for the three months ended
September 30, 2003.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)
Nine Months Ended September 30,
-----------------------------------------------------------------------------------
2004 2003
--------------------------------------- ---------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCE INTEREST RATE Balance Interest Rate
--------------- ------------- -------- ---------------- ------------- --------
ASSETS
Residential mortgage loans $354,824 $19,184 5.41 % $316,635 $18,551 5.86 %
Residential construction loans 107,322 5,009 4.67 72,617 3,659 5.04
Commercial mortgage loans 330,615 21,380 6.47 298,135 20,921 7.02
Commercial construction loans 56,195 3,237 5.76 58,215 3,482 5.98
Commercial loans and leases 133,108 8,523 6.40 118,230 8,354 7.07
Consumer loans 271,179 12,262 4.52 231,253 11,487 4.97
--------- ------ ---- --------- ------
Total loans and leases 1,253,243 69,595 5.55 1,095,085 66,454 6.07
Securities 942,167 45,656 4.85 1,060,939 54,979 5.18
Interest-bearing deposits with banks 861 10 1.16 1,329 12 0.90
Federal funds sold 33,350 374 1.12 31,443 352 1.12
--------- ------ ---- --------- ------
TOTAL EARNING ASSETS 2,229,621 115,635 5.19 % 2,188,796 121,797 5.56 %
Less: allowance for credit losses (14,826) (15,023)
Cash and due from banks 41,428 34,573
Premises and equipment, net 40,024 37,011
Other assets 97,388 96,061
---------- ----------
Total assets $2,393,635 $2,341,418
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $230,598 $671 0.29 % $197,284 $483 0.24 %
Regular savings deposits 211,241 762 0.36 168,708 517 0.31
Money market savings deposits 368,261 2,143 0.58 404,196 2,626 0.65
Time deposits 430,664 8,628 2.00 439,947 10,934 2.49
--------- ------- --------- -------
Total interest-bearing deposits 1,240,764 12,204 0.98 1,210,135 14,560 1.20
Borrowings 550,102 22,062 4.01 594,308 24,091 4.05
--------- ------- --------- -------
TOTAL INTEREST-BEARING LIABILITIES 1,790,866 34,266 1.91 1,804,443 38,651 2.14
------- ---- ------- ----
Net interest income and spread* $81,369 3.28 % $83,146 3.42 %
======= ==== ======= ====
Noninterest-bearing demand deposits 386,194 325,933
Other liabilities 19,724 26,537
Stockholder's equity 196,851 184,505
---------- ----------
Total liabilities and
stockholders' equity $2,393,635 $2,341,418
========== ==========
Interest income/earning assets 5.19 % 5.56 %
Interest expense/earning assets 1.54 1.76
---- ----
Net interest margin 3.65 % 3.80 %
==== ====
* 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 $8,093,000 for the
nine months ended September 30, 2004 and $8,026,000 for the nine months ended
September 30, 2003.