Exhibit 99.1
[SANDY
SPRING
BANCORP LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS
48% INCREASE IN THIRD QUARTER NET INCOME
OLNEY, MARYLAND, October 18, 2005 -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR)
the parent company of Sandy Spring Bank, today announced net income for the
third quarter of 2005 of $9.5 million ($.64 per diluted share) compared to $6.4
million ($.44 per diluted share) for the third quarter of 2004, a 48% increase.
Net income for the nine-month period ending September 30, 2005 totaled $25.1
million ($1.70 per diluted share) compared to $20.1 million ($1.37 per diluted
share) for the prior year period, a 25% increase. The results for the quarter
include significant gains on the sale of investment securities as discussed
below.
"The third quarter was marked by strong loan and deposit growth, continuing
improvement in net income, and above average returns on assets and equity," said
Hunter R. Hollar, President and Chief Executive Officer of Sandy Spring Bancorp.
"Simply stated, the company's year-to-date performance amounts to three
consecutive quarters of consistency. We intend to return to the high-performance
quartile nationally among community banking companies." Return on average
stockholders' equity was 18.31% for the third quarter of 2005, compared to
12.89% for the same period in the prior year. Return on average assets for the
third quarter of 2005 was 1.58%, compared to 1.03% for the third quarter of
2004.
For the first nine months of 2005, return on average stockholders' equity was
16.74% compared to 13.65% for the first nine months of 2004. Return on average
assets for the first nine months of 2005 was 1.44% compared to 1.12% for the
first nine months of 2004.
Comparing September 30, 2005 balances to September 30, 2004, total assets
declined 5% to $2.4 billion due mainly to the balance sheet restructuring
completed at the end of 2004. Total deposits increased 6% to $1.8 billion, while
total loans and leases increased 16% to $1.6 billion compared to the prior year.
During the same period, stockholders' equity increased 3% to $208 million or
8.7% of total assets.
Due to continued growth in the loan portfolio, the provision for loan and lease
losses totaled $.6 million for the third quarter of 2005 compared to no
provision in the third quarter of 2004. The provision for loan and lease losses
totaled $1.6 million for the first nine months of 2005 compared to no provision
in the same period in 2004. The allowance for loan and lease losses represented
1.03% of outstanding loans at September 30, 2005.
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 2005 and 2004, net interest income increased by
$4.2 million, or 23%, due primarily to an improved net interest margin. The net
interest margin increased to 4.39% in 2005 from 3.54% in 2004 due primarily to
increased loan growth and active management of deposit rates together with the
early payoff of FHLB advances in the fourth quarter of 2004.
Noninterest income increased $2.7 million or 36% in the third quarter of 2005 as
compared to 2004. On a non-GAAP basis, noninterest income, excluding the effect
of securities gains of $1.8 million in 2005 and $.1 million in 2004, increased
$1.0 million or 14%. This increase was due primarily to an increase of 69% in
gains on sales of mortgage loans resulting from higher loan volumes. In
addition, trust income increased 37% due largely to growth in assets under
management, while insurance agency commissions increased 18% compared to 2004
due primarily to the acquisition of the Wolfe & Reichelt Insurance Agency in
December 2004.
Noninterest expenses were $18.7 million in the third quarter of 2005 compared to
$17.9 million in 2004, an increase of $.8 million or 5%. This increase primarily
resulted from increases in salaries and benefits, due largely to higher
incentive compensation and benefits expense and increased occupancy expenses,
due mainly to new branches opened in 2005. These increases were partially offset
by a 34% decrease in marketing costs due mainly to advertising initiatives
conducted in 2004 that were not continued in 2005. Other noninterest expenses
also declined 14% due largely to the amortization of debt issuance costs related
to the redemption of trust preferred securities in 2004.
Comparing the first nine months of 2005 and 2004, net interest income increased
by $10.7 million or 20%, due primarily to increased loan growth and the early
payoff of FHLB advances mentioned above. These factors resulted in an increase
in the net interest margin to 4.39% for the first nine months of 2005 compared
to 3.63% for the same period in 2004.
Noninterest income was $27.0 million for the nine months ended September 30,
2005 versus $23.3 million for the same period in 2004, an increase of $3.7
million or 16%. On a non-GAAP basis, noninterest income, excluding the effect of
net securities gains of $2.6 million in 2005 and $.5 million in 2004, increased
$1.6 million or 7%. This increase was due primarily to increases of 34% in
insurance agency commissions resulting from the acquisition of the Wolfe &
Reichelt Insurance Agency in December 2004 together with higher contingent
commissions. Visa(R) check fees increased 13% due to higher volumes of
electronic transactions while gains on sales of mortgage loans also increased
13% due to higher loan volumes. These increases were somewhat offset by a
decline of 12% in fees on sales of investment products.
Noninterest expenses were $56.3 million for the first nine months of 2005
compared to $52.7 million for the same period in 2004, an increase of $3.6
million or 7%. This increase was due mainly to the same expense growth factors
mentioned above.
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, The Equipment Leasing Company and, effective October 3, 2005, West
Financial Services, Inc. Sandy Spring Bancorp is the third largest publicly
traded banking company headquartered in Maryland and the oldest independent
banking institution in the state. 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 31 community offices and 67 ATMs
located in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince
George's counties in Maryland. Through its subsidiaries, the Bank also offers a
comprehensive menu of leasing, insurance and investment management services.
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 of future
costs and benefits; assessments of probable loan and lease losses; assessments
of market risk; and statements of the ability to achieve financial and other
goals. 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,
------------------------ % ------------------------ %
2005 2004 Change 2005 2004 Change
- ------------------------------------------------------------------------------------------------------------------------- ---------
PROFITABILITY FOR THE PERIOD:
Net interest income $22,526 $18,278 23 $65,253 $54,586 20
Provision for loan and lease losses 600 - N/A 1,600 - N/A
Noninterest income 10,112 7,453 36 27,005 23,322 16
Noninterest expenses 18,744 17,883 5 56,334 52,697 7
Income before income taxes 13,294 7,848 69 34,324 25,211 36
Net income 9,467 6,417 48 $25,120 $20,111 25
Return on average assets 1.58% 1.03% 1.44% 1.12%
Return on average equity 18.31% 12.89% 16.74% 13.65%
Net interest margin 4.39% 3.54% 4.39% 3.63%
Efficiency ratio - GAAP based * 57.43% 69.50% 61.06% 67.64%
Efficiency ratio - traditional * 55.74% 62.65% 57.73% 61.37%
PER SHARE DATA:
Basic net income $0.65 $0.44 48 $1.72 $1.39 24
Diluted net income 0.64 0.44 45 1.70 1.37 24
Dividends declared 0.21 0.20 5 0.62 0.58 7
Book value 14.23 13.92 2 14.23 13.92 2
Tangible book value 13.07 12.70 3 13.07 12.70 3
Average fully diluted shares 14,735,318 14,673,756 14,738,845 14,705,413
AT PERIOD-END:
Assets $2,383,360 $2,506,302 (5) $2,383,360 $2,506,302 (5)
Deposits 1,804,888 1,709,642 6 1,804,888 1,709,642 6
Loans and leases 1,579,135 1,365,483 16 1,579,135 1,365,483 16
Securities 584,316 940,189 (38) 584,316 940,189 (38)
Stockholders' equity 208,090 201,737 3 208,090 201,737 3
CAPITAL AND CREDIT QUALITY RATIOS:
Average equity to average assets 8.60% 8.03% 8.62% 8.22%
Allowance for loan and lease losses to loans
and leases 1.03% 1.08% 1.03% 1.08%
Nonperforming assets to total assets 0.14% 0.09% 0.14% 0.09%
Annualized net (charge-offs) recoveries
to average loans and leases 0.00% 0.01% 0.00% (0.01)%
* 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 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,
--------------------------- ---------------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Noninterest expenses-GAAP based $18,744 $17,883 $56,334 $52,697
Net interest income plus noninterest income-
GAAP based 32,638 25,731 92,258 77,908
Efficiency ratio-GAAP based 57.43% 69.50% 61.06% 67.64%
========== ========== ========== ==========
Noninterest expenses-GAAP based $18,744 $17,883 $56,334 $52,697
Less non-GAAP adjustment:
Amortization of intangible assets 501 486 1,502 1,459
---------- ---------- ---------- ----------
Noninterest expenses-traditional ratio 18,243 17,397 54,832 51,238
Net interest income plus noninterest income-
GAAP based 32,638 25,731 92,258 77,908
Plus non-GAAP adjustment:
Tax-equivalency 1,853 2,175 5,328 6,059
Less non-GAAP adjustments:
Securities gains 1,761 138 2,601 475
Net interest income plus noninterest
income - traditional ratio 32,730 27,768 94,985 83,492
Efficiency ratio - traditional 55.74% 62.65% 57.73% 61.37%
========== ========== ========== ==========
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
September 30, December 31,
----------------------------------------- --------------------
2005 2004 2004
- -------------------------------------------------------------------------------------------------------------- --------------------
ASSETS
Cash and due from banks $48,412 $43,390 $43,728
Federal funds sold 12,639 27,086 5,467
Interest-bearing deposits with banks 802 512 610
Residential mortgage loans held for sale 25,826 8,849 16,211
Investments available-for-sale (at fair value) 271,022 598,886 346,903
Investments held-to-maturity - fair value of $310,673,
$328,531, and $312,661, respectively 301,227 321,451 305,293
Other equity securities 12,067 19,852 13,912
Total loans and leases 1,579,135 1,365,483 1,445,525
Less: allowance for loan and lease losses (16,268) (14,792) (14,654)
--------------- --------------- ---------------
Net loans and leases 1,562,867 1,350,691 1,430,871
Premises and equipment, net 45,414 40,991 42,054
Accrued interest receivable 11,685 13,049 11,674
Goodwill 8,554 7,642 7,335
Other intangible assets, net 8,364 9,987 9,866
Other assets 74,481 63,916 75,419
--------------- --------------- ---------------
Total assets $2,383,360 $2,506,302 $2,309,343
=============== =============== ===============
Liabilities
Noninterest-bearing deposits $467,957 $423,254 $423,868
Interest-bearing deposits 1,336,931 1,286,388 1,308,633
--------------- --------------- ---------------
Total deposits 1,804,888 1,709,642 1,732,501
Short-term borrowings 279,427 393,528 231,927
Subordinated debentures 35,000 70,000 35,000
Other long-term borrowings 29,246 114,696 94,608
Accrued interest payable and other liabilities 26,709 16,699 20,224
--------------- --------------- ---------------
Total liabilities 2,175,270 2,304,565 2,114,260
Stockholders' Equity
Common stock -- par value $1.00; shares authorized
50,000,000; shares issued and outstanding 14,623,696
14,493,104 and 14,628,511, respectively 14,624 14,493 14,629
Additional paid in capital 21,019 18,473 21,522
Retained earnings 172,369 164,977 156,315
Accumulated other comprehensive income 78 3,794 2,617
--------------- --------------- ---------------
Total stockholders' equity 208,090 201,737 195,083
--------------- --------------- ---------------
Total liabilities and stockholders' equity $2,383,360 $2,506,302 $2,309,343
=============== =============== ===============
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,
------------------------------- --------------------------------
2005 2004 2005 2004
-------------- -------------- -------------- --------------
Interest income:
Interest and fees on loans and leases $24,423 $18,142 $67,875 $51,337
Interest on loans held for sale 422 172 812 522
Interest on deposits with banks 32 3 58 8
Interest and dividends on securities:
Taxable 2,925 5,472 9,210 17,537
Exempt from federal income taxes 3,275 3,678 10,284 10,780
Interest on federal funds sold 314 133 571 280
------------ ------------ ------------- -------------
Total interest income 31,391 27,600 88,810 80,464
Interest expense:
Interest on deposits 5,700 3,412 14,743 9,136
Interest on short-term borrowings 2,413 4,717 6,530 12,167
Interest on long-term borrowings 752 1,193 2,284 4,575
------------ ------------ ------------- -------------
Total interest expense 8,865 9,322 23,557 25,878
------------ ------------ ------------- -------------
Net interest income 22,526 18,278 65,253 54,586
Provision for loan and lease losses 600 0 1,600 0
------------ ------------ ------------- -------------
Net interest income after provision for loan
and lease losses 21,926 18,278 63,653 54,586
Noninterest income:
Securities gains (losses) 1,761 138 2,601 475
Service charges on deposit accounts 2,050 1,886 5,705 5,635
Gains on sales of mortgage loans 1,205 714 2,825 2,511
Fees on sales of investment products 473 475 1,558 1,770
Trust department income 1,116 813 2,932 2,551
Insurance agency commissions 1,114 944 4,149 3,095
Income from bank owned life insurance 570 556 1,684 1,688
Visa Check Fees 556 498 1,597 1,419
Other income 1,267 1,429 3,954 4,178
------------ ------------ ------------- -------------
Total noninterest income 10,112 7,453 27,005 23,322
Noninterest expenses:
Salaries and employee benefits 11,373 10,295 34,116 30,402
Occupancy expense of premises 2,099 1,861 5,987 5,304
Equipment expenses 1,415 1,380 4,031 3,894
Marketing 253 385 947 1,380
Outside data services 718 697 2,159 2,184
Amortization of intangible assets 501 486 1,502 1,459
Other expenses 2,385 2,779 7,592 8,074
------------ ------------ ------------- -------------
Total noninterest expenses 18,744 17,883 56,334 52,697
------------ ------------ ------------- -------------
Income before income taxes 13,294 7,848 34,324 25,211
Income tax expense 3,827 1,431 9,204 5,100
------------ ------------ ------------- -------------
Net income $9,467 $6,417 $25,120 $20,111
============ ============ ============= =============
Basic net income per share $0.65 $0.44 $1.72 $1.39
Diluted net income per share 0.64 0.44 1.70 1.37
Dividends declared per share 0.21 0.20 0.62 0.58
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
2005 2004
-------------------------------------- ---------------------------------------------
(Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1
- ------------------------------------------------------------------------------------ ---------------------------------------------
PROFITABILITY FOR THE QUARTER:
Tax-equivalent interest income $33,244 $30,998 $29,896 $30,614 $29,776 $28,070 $28,677
- -----------------------------------------------------------------------------------------------------------------------------------
Interest expense 8,865 7,705 6,987 8,890 9,322 8,383 8,173
- -----------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent net interest income 24,379 23,293 22,909 21,724 20,454 19,687 20,504
- -----------------------------------------------------------------------------------------------------------------------------------
Tax-equivalent adjustment 1,853 1,766 1,709 2,097 2,175 1,919 1,965
- -----------------------------------------------------------------------------------------------------------------------------------
Provision for credit losses 600 900 100 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Noninterest income 10,112 9,053 7,840 7,628 7,452 8,279 7,590
- -----------------------------------------------------------------------------------------------------------------------------------
Noninterest expenses 18,744 19,153 18,437 39,778 17,883 18,099 16,714
- -----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 13,294 10,527 10,503 (12,523) 7,848 7,948 9,415
- -----------------------------------------------------------------------------------------------------------------------------------
Income tax expense 3,827 2,730 2,647 (6,779) 1,431 1,555 2,114
- -----------------------------------------------------------------------------------------------------------------------------------
Net Income 9,467 7,797 7,856 (5,744) 6,417 6,393 7,301
===================================================================================================================================
FINANCIAL RATIOS:
Return on average assets 1.58% 1.36% 1.39% -0.94% 1.03% 1.08% 1.26%
- -----------------------------------------------------------------------------------------------------------------------------------
Return on average equity 18.31% 15.63% 16.20% -11.45% 12.89% 13.07% 15.00%
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest margin 4.39% 4.39% 4.39% 3.80% 3.54% 3.56% 3.81%
- -----------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - GAAP based * 57.43% 62.63% 63.49% 145.95% 69.50% 69.49% 63.97%
- -----------------------------------------------------------------------------------------------------------------------------------
Efficiency ratio - traditional * 55.74% 59.16% 58.38% 67.12% 62.65% 63.22% 58.24%
===================================================================================================================================
PER SHARE DATA:
Basic net income $0.65 $0.53 $0.54 ($0.40) $0.44 $0.44 $0.51
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted net income $0.64 $0.53 $0.53 ($0.39) $0.44 $0.43 $0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends declared $0.21 $0.21 $0.20 $0.20 $0.20 $0.19 $0.19
- -----------------------------------------------------------------------------------------------------------------------------------
Book value $14.23 $13.91 $13.57 $13.34 $13.92 $13.51 $13.76
- -----------------------------------------------------------------------------------------------------------------------------------
Tangible book value $13.07 $12.72 $12.35 $12.16 $12.70 $12.26 $12.48
- -----------------------------------------------------------------------------------------------------------------------------------
Average fully diluted shares 14,735,318 14,719,742 14,760,551 14,720,013 14,673,756 14,726,117 14,725,261
===================================================================================================================================
NONINTEREST INCOME BREAKDOWN:
Securities gains (losses) $1,761 $825 $15 $65 $138 $109 $228
- -----------------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 2,050 1,984 1,671 1,846 1,886 1,881 1,868
- -----------------------------------------------------------------------------------------------------------------------------------
Gains on sales of mortgage loans 1,205 889 731 772 714 1,028 769
- -----------------------------------------------------------------------------------------------------------------------------------
Fees on sales of investment products 473 640 445 702 475 666 629
- -----------------------------------------------------------------------------------------------------------------------------------
Trust department income 1,116 944 872 801 813 984 754
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance agency commissions 1,114 1,224 1,811 1,040 944 1,030 1,121
- -----------------------------------------------------------------------------------------------------------------------------------
Income from bank owned life insurance 570 559 555 560 556 557 574
- -----------------------------------------------------------------------------------------------------------------------------------
Visa Check Fees 556 550 491 537 498 497 424
- -----------------------------------------------------------------------------------------------------------------------------------
Other income 1,267 1,438 1,249 1,305 1,428 1,527 1,223
- -----------------------------------------------------------------------------------------------------------------------------------
Total 10,112 9,053 7,840 7,628 7,452 8,279 7,590
===================================================================================================================================
NONINTEREST EXPENSE BREAKDOWN:
Salaries and employee benefits $11,373 $11,454 $11,289 $11,133 $10,295 $10,229 $9,877
- -----------------------------------------------------------------------------------------------------------------------------------
Occupancy expense of premises 2,099 1,964 1,924 1,925 1,861 1,815 1,628
- -----------------------------------------------------------------------------------------------------------------------------------
Equipment expenses 1,415 1,294 1,322 1,534 1,380 1,324 1,190
- -----------------------------------------------------------------------------------------------------------------------------------
Marketing 253 406 288 337 385 482 513
- -----------------------------------------------------------------------------------------------------------------------------------
Outside data services 718 701 740 722 697 766 721
- -----------------------------------------------------------------------------------------------------------------------------------
* 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; 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
2005 2004
-------------------------------------- ----------------------------------------------
(Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1
- ------------------------------------------------------------------------------------ ----------------------------------------------
NONINTEREST EXPENSE BREAKDOWN (CONTINUED):
Amortization of intangible assets $501 $505 $496 491 486 487 $486
- ------------------------------------------------------------------------------------------------------------------------------------
Goodwill impairment loss 0 0 0 1,265 0 0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
Other expenses 2,385 2,829 2,378 22,371 2,779 2,996 2,299
- ------------------------------------------------------------------------------------------------------------------------------------
Total 18,744 19,153 18,437 39,778 17,883 18,099 16,714
====================================================================================================================================
BALANCE SHEETS AT QUARTER END:
Residential mortgage loans $400,657 $393,961 $375,746 $371,924 $365,352 $343,176 $337,850
- ------------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 143,691 136,733 139,964 137,880 126,338 113,382 103,292
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 410,409 390,306 395,528 386,911 372,790 329,894 322,754
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 136,606 119,006 94,708 88,974 62,436 55,563 52,162
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 160,379 154,237 150,143 150,734 138,741 140,560 125,527
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer loans 327,393 323,537 312,725 309,102 299,826 284,771 260,644
- ------------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,579,135 1,517,780 1,468,814 1,445,525 1,365,483 1,267,346 1,202,229
- ------------------------------------------------------------------------------------------------------------------------------------
Less: allowance for credit losses (16,268) (15,673) (14,738) (14,654) (14,792) (14,743) (14,875)
- ------------------------------------------------------------------------------------------------------------------------------------
Net loans and leases 1,562,867 1,502,107 1,454,076 1,430,871 1,350,691 1,252,603 1,187,354
- ------------------------------------------------------------------------------------------------------------------------------------
Goodwill 8,554 8,554 8,554 7,335 7,642 7,642 7,642
- ------------------------------------------------------------------------------------------------------------------------------------
Other intangible assets, net 8,364 8,865 9,370 9,866 9,987 10,473 10,959
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 2,383,360 2,348,305 2,284,198 2,309,343 2,506,302 2,424,199 2,371,572
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,804,888 1,781,622 1,745,675 1,732,501 1,709,642 1,681,552 1,618,591
- ------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 208,090 203,294 198,709 195,083 201,737 196,090 199,615
====================================================================================================================================
QUARTERLY AVERAGE BALANCE SHEETS:
Residential mortgage loans $423,420 $401,148 $384,504 $378,347 $362,170 $355,676 $346,545
- ------------------------------------------------------------------------------------------------------------------------------------
Residential construction loans 141,197 137,720 137,897 135,322 119,989 108,118 93,722
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial mortgage loans 394,862 393,291 389,215 379,857 347,451 327,441 316,768
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial construction loans 128,010 103,584 91,733 71,930 61,771 55,234 51,519
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial loans and leases 154,920 151,766 149,783 139,165 137,321 134,627 127,327
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer loans 327,495 320,276 310,421 303,639 293,025 268,861 251,411
- ------------------------------------------------------------------------------------------------------------------------------------
Total loans and leases 1,569,904 1,507,785 1,463,553 1,408,260 1,321,727 1,249,957 1,187,292
- ------------------------------------------------------------------------------------------------------------------------------------
Securities 593,102 591,610 641,960 801,871 938,448 933,253 954,822
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 2,203,251 2,130,469 2,115,369 2,272,437 2,299,895 2,220,656 2,167,641
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 2,384,327 2,307,888 2,286,209 2,441,129 2,466,535 2,384,929 2,329,107
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 1,696,691 1,647,365 1,660,839 1,805,091 1,844,996 1,775,867 1,751,225
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest-bearing demand deposits 458,131 440,945 415,824 419,723 405,647 392,387 360,341
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 1,800,171 1,751,192 1,723,667 1,727,800 1,684,328 1,634,340 1,561,666
- ------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity 205,138 200,047 196,659 199,626 198,030 196,719 195,730
====================================================================================================================================
CAPITAL AND CREDIT QUALITY MEASURES:
Average equity to average assets 8.60% 8.67% 8.60% 8.18% 8.03% 8.25% 8.40%
- ------------------------------------------------------------------------------------------------------------------------------------
Credit loss allowance to loans and leases 1.03% 1.03% 1.00% 1.01% 1.08% 1.16% 1.24%
- ------------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets to total assets 0.14% 0.15% 0.10% 0.08% 0.09% 0.12% 0.14%
- ------------------------------------------------------------------------------------------------------------------------------------
Annualized net (charge-offs) recoveries to
average loans and leases 0.00% 0.01% 0.00% 0.04% (0.01)% 0.04% 0.00%
====================================================================================================================================
MISCELLANEOUS DATA:
Net recoveries (charge-offs) ($5) $35 ($16) $138 ($48) $131 $5
- ------------------------------------------------------------------------------------------------------------------------------------
Nonperforming assets:
Non-accrual loans and leases 1,032 661 672 746 848 674 802
- ------------------------------------------------------------------------------------------------------------------------------------
Loans and leases 90 days past due 2,289 2,757 1,531 1,043 1,340 2,316 2,492
- ------------------------------------------------------------------------------------------------------------------------------------
Restructured loans and leases 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Other real estate owned, net 0 0 73 0 0 0 77
- ------------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets 3,321 3,418 2,276 1,789 2,188 2,990 3,371
====================================================================================================================================
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,
--------------------------------------------------------------------------------
2005 2004
-------------------------------------- ---------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCES INTEREST RATE Balance Interest Rate
---------------- ------------- ------- ---------------- ------------- --------
ASSETS
Residential mortgage loans $423,420 $23,685 5.59 % $362,170 $19,663 5.43 %
Residential construction loans 141,197 9,228 6.54 119,989 5,828 4.86
Commercial mortgage loans 394,862 26,684 6.76 347,451 22,207 6.39
Commercial construction loans 128,010 9,413 7.35 61,771 3,600 5.83
Commercial loans and leases 154,920 11,131 7.18 137,321 8,595 6.26
Consumer loans 327,495 18,636 5.69 293,025 13,082 4.46
---------------- ------------- ---------------- -------------
Total loans and leases 1,569,904 98,777 6.29 1,321,727 72,975 5.52
Securities 593,102 31,674 5.34 938,448 44,655 4.76
Interest-bearing deposits with banks 3,953 126 3.19 748 10 1.34
Federal funds sold 36,292 1,255 3.46 38,972 532 1.37
---------------- ------------- ---------------- -------------
TOTAL EARNING ASSETS 2,203,251 131,832 5.98 % 2,299,895 118,172 5.14 %
Less: allowance for credit losses (15,775) (14,739)
Cash and due from banks 48,513 42,278
Premises and equipment, net 45,953 41,061
Other assets 102,385 101,114
---------------- ----------------
Total assets $2,384,327 $2,469,609
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $237,273 $651 0.27 % $237,212 $704 0.30 %
Regular savings deposits 216,787 840 0.39 229,021 847 0.37
Money market savings deposits 379,524 6,664 1.76 360,888 2,390 0.66
Time deposits 508,456 14,461 2.84 451,560 9,634 2.13
---------------- ------------- ---------------- -------------
Total interest-bearing deposits 1,342,040 22,616 1.69 1,278,681 13,575 1.06
Borrowings 354,651 12,487 3.52 566,315 23,259 4.11
---------------- ------------- ---------------- -------------
TOTAL INTEREST-BEARING LIABILITIES 1,696,691 35,103 2.07 1,844,996 36,834 2.00
------------- ------------- --------
Net interest income and spread* $96,729 3.91 % $81,338 3.14 %
============= ======= ============= ========
Noninterest-bearing demand deposits 458,131 405,647
Other liabilities 24,367 20,936
Stockholder's equity 205,138 198,030
---------------- ----------------
Total liabilities and stockholders' equity $2,384,327 $2,469,609
================ ================
Interest income/earning assets 5.98 % 5.14 %
Interest expense/earning assets 1.59 1.60
------- --------
Net interest margin 4.39 % 3.54 %
======= ========
* 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 $7,352,000 for the
three months ended September 30, 2005 and $8,653,000 for the three months ended
September 30, 2004.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)
Nine Months Ended September 30,
--------------------------------------------------------------------------------
2005 2004
---------------------------------------- --------------------------------------
AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/
BALANCES INTEREST RATE Balance Interest Rate
---------------- ------------- --------- --------------- ------------- --------
ASSETS
Residential mortgage loans $403,167 $22,196 5.51 % $354,824 $19,131 5.39 %
Residential construction loans 138,950 8,645 6.22 107,322 5,009 4.67
Commercial mortgage loans 392,477 25,754 6.56 330,615 21,202 6.41
Commercial construction loans 107,909 7,486 6.94 56,195 3,237 5.76
Commercial loans and leases 152,175 10,566 6.94 133,108 8,430 6.33
Consumer loans 320,118 17,122 5.35 271,179 12,225 4.51
---------------- ------------- -------------- -------------
Total loans and leases 1,514,796 91,769 6.06 1,253,243 69,234 5.52
Securities 608,712 33,162 5.45 942,167 45,656 4.85
Interest-bearing deposits with banks 2,603 77 2.96 861 10 1.16
Federal funds sold 24,566 761 3.10 33,350 374 1.12
---------------- ------------- -------------- -------------
TOTAL EARNING ASSETS 2,150,677 125,769 5.85 % 2,229,621 115,274 5.17 %
Less: allowance for credit losses (15,163) (14,826)
Cash and due from banks 46,104 41,428
Premises and equipment, net 44,688 40,024
Other assets 102,279 98,789
---------------- --------------
Total assets $2,328,585 $2,395,036
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing demand deposits $238,118 $630 0.26 % $230,598 $671 0.29 %
Regular savings deposits 220,055 765 0.35 211,241 762 0.36
Money market savings deposits 376,951 5,608 1.49 368,261 2,143 0.58
Time deposits 485,045 12,709 2.62 430,664 8,628 2.00
---------------- ------------- -------------- -------------
Total interest-bearing deposits 1,320,169 19,712 1.49 1,240,764 12,204 0.98
Borrowings 348,261 11,690 3.36 550,102 22,062 4.01
---------------- ------------- -------------- -------------
TOTAL INTEREST-BEARING LIABILITIES 1,668,430 31,402 1.88 1,790,866 34,266 1.91
------------- -------------
Net interest income and spread* $94,367 3.97 % $81,008 3.26 %
============= ======== ============= ========
Noninterest-bearing demand deposits 438,455 386,194
Other liabilities 21,044 21,125
Stockholder's equity 200,656 196,851
---------------- --------------
Total liabilities and stockholders' equity $2,328,585 $2,395,036
================ ==============
Interest income/earning assets 5.85 % 5.17 %
Interest expense/earning assets 1.46 1.54
-------- --------
Net interest margin 4.39 % 3.63 %
======== ========
* 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 $7,124,000 for the
nine months ended September 30, 2005 and $8,093,000 for the nine months ended
September 30, 2004.