updated 1/27/2011 8:46:33 AM ET 2011-01-27T13:46:33

OLNEY, Md., Jan. 27, 2011 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today announced net income available to common stockholders for the fourth quarter of 2010 of $6.6 million ($0.27 per diluted share) compared to a net loss available to common stockholders of $4.4 million (($0.27) per diluted share) for the fourth quarter of 2009 and net income available to common stockholders of $6.4 million ($0.27 per diluted share) for the third quarter of 2010. The fourth quarter of 2010 included a provision for loan and lease losses of $2.3 million compared to $21.1 million for the fourth quarter of 2009 and $2.5 million for the third quarter of 2010.

Net income available to common stockholders for the year ended December 31, 2010 totaled $17.4 million ($0.78 per diluted share) compared to a net loss available to common stockholders of $19.7 million (($1.20) per diluted share) for the prior year. The results included a provision for loan and lease losses totaling $25.9 million for the year ended December 31, 2010 compared to a provision for loan and lease losses of $76.8 million for the year ended December 31, 2009.

"We are very pleased to report that we have redeemed the remainder of the preferred stock issued under TARP," said Daniel J. Schrider, President and Chief Executive Officer. "We believe this validates our turnaround in performance, which is largely driven by the substantial improvement in credit quality. The provision for loan losses has continued to decline for the last several quarters due primarily to the efforts of our credit team to reduce the level of non-performing loans. However, we recognize the need to focus on the continuing resolution of problem credits. Our consistent expense control and improved net interest margin continue to be major drivers of our improved performance and return to profitability. We believe that our consistent emphasis on the fundamental elements of community banking will serve us well as the business climate slowly improves," said Schrider.

"Looking forward to the future, we will be dealing with the uncertain effects of the recently passed health care law, financial reform and tax legislation, together with the added threat of volatile international markets and an extended economic recovery period. This has created an extremely challenging environment for both consumers and small businesses locally that has limited business expansion and the creation of new jobs. We do, however, remain optimistic that our strategies to originate quality loans across our markets will produce positive growth in the coming year," said Schrider.

Fourth Quarter and Full Year Highlights:

  • In the fourth quarter, the Company redeemed the remainder of the original $83.0 million in preferred stock issued to the U.S. Treasury under the TARP Capital Purchase Program. The Company is currently negotiating with the Treasury to repurchase the related warrant.
     
  • The provision for loan and lease losses totaled $2.3 million for the quarter compared to $21.1 million for the fourth quarter of 2009. For the year, the provision for loan and lease losses totaled $25.9 million compared to $76.8 million in 2009.
     
  • Non-performing assets declined to $89.3 million compared to $141.2 million at December 31, 2009. This decrease also resulted in a coverage ratio of the allowance for loan and lease losses compared to non-performing loans of 78% at December 31, 2010 compared to a ratio of 48% at December 31, 2009.
     
  • Loan charge-offs, net of recoveries, totaled $7.5 million for the fourth quarter of 2010 compared to $19.5 million for the fourth quarter of 2009. For the year, net charge-offs totaled $28.3 million compared to $62.7 million in 2009. 
     
  • The net interest margin was 3.61% for the fourth quarter of 2010 compared to 3.40% for the fourth quarter of 2009 and 3.64% for the third quarter of 2010. For the year, the net interest margin increased to 3.60% compared to 3.29% for 2009.
     
  • Non-interest expenses increased 5% for the fourth quarter of 2010 compared to the fourth quarter of 2009. For the full year of 2010, noninterest expenses remained level compared to 2009.

Review of Balance Sheet and Credit Quality

Comparing December 31, 2010 balances to December 31, 2009, total assets decreased 3% to $3.5 billion. Total loans and leases decreased 6% to $2.2 billion compared to the prior year. This decrease in loans was attributable to declines in all major categories of the loan portfolio due to a lack of loan demand resulting from the current state of the economy and due to charge-offs and pay-downs on non-performing loans. Total loans decreased 1% compared to the third quarter of 2010.

Customer funding sources, which include deposits and other short-term borrowings from core customers, decreased 5% compared to the prior year and 2% compared to the third quarter of 2010. The decrease compared to the prior year was due primarily to a decline of 20% in certificates of deposit. This planned decrease was due mainly to a reduction in rates as the Company managed its net interest margin. In addition, money market accounts declined 8% due mainly to clients' redeployment of funds in the face of low rates and rising equity markets. These trends were somewhat offset by an increase of 8% in the combined balances of noninterest-bearing deposits, traditional savings and interest-bearing checking accounts as clients continued to emphasize safety and liquidity.

Stockholders' equity totaled $407.6 million at December 31, 2010, and represented 11.6% of total assets, compared to 10.3% at December 31, 2009. At December 31, 2010 the Company had a total risk-based capital ratio of 15.37%, a tier 1 risk-based capital ratio of 14.11% and a tier 1 leverage ratio of 10.30%.

The provision for loan and lease losses totaled $2.3 million for the fourth quarter of 2010 compared to $21.1 million for the fourth quarter of 2009 and $2.5 million for the third quarter of 2010. The decrease compared to both the prior year quarter and the third quarter of 2010 was due to a lower level of non-performing loans. The decrease in the provision was the direct result of early identification of problem credits, provision of related loan loss reserves and the aggressive work out or charge-off of these problem credits.

Loan charge-offs, net of recoveries, totaled $7.5 million for the fourth quarter of 2010 compared to net charge-offs of $19.5 million for the fourth quarter of 2009 and net charge-offs of $6.5 million for the third quarter of 2010. The allowance for loan and lease losses represented 2.88% of outstanding loans and leases and 78% of non-performing loans at December 31, 2010 compared to 2.81% of outstanding loans and leases and 48% of non-performing loans at December 31, 2009 and 3.08% of outstanding loans and leases and 72% of non-performing loans at September 30, 2010. Non-performing loans includes accruing loans 90 days or more past due.

Non-performing assets totaled $89.3 million at December 31, 2010 compared to $141.2 million at December 31, 2009 and $103.6 million at September 30, 2010. The decrease compared to the prior year was due primarily to a decrease in non-accrual loans, particularly in the commercial real estate mortgage and construction portfolios as a result of charge-offs and pay-downs on existing problem credits and a significant reduction in the migration of new credits to non-performing status.

Income Statement Review

Comparing the fourth quarter of 2010 and 2009, net interest income increased by $1.1 million, or 4%. This increase was due primarily to the decline in rates paid on deposits. This resulted in a higher net interest margin for the fourth quarter of 2010 of 3.61% compared to 3.40% for fourth quarter of 2009.

Non-interest income increased $0.5 million or 4% to $12.0 million for the fourth quarter of 2010 compared to $11.5 million for the fourth quarter of 2009. Gains on sales of investment securities increased $0.3 million. Gains on sales of mortgage loans increased $0.3 million or 63% due largely to higher refinancing volumes. Fees on sales of investment products increased $0.2 million or 28% due to higher assets under management and higher sales of financial products, while trust and investment management fees increased $0.4 million or 19% due primarily to an increase in assets under management. Insurance agency commissions increased $0.2 million or 21% due to higher commissions on physician's liability insurance. Visa check fees increased $0.1 million or 14% due to increased volume of electronic transactions.  These gains were somewhat offset by a decrease of $0.6 million or 19% in service charges on deposits due to lower overdraft fees. Other noninterest income also decreased $0.4 million or 17% due mainly to lower mark to market adjustments on commercial loan swaps.

Non-interest expenses were $26.5 million in the fourth quarter of 2010 compared to $25.3 million in the fourth quarter of 2009, an increase of $1.2 million or 5%. Salaries and benefits expense increased $0.9 million or 7% due primarily to higher salary expenses.  Other noninterest expenses increased $0.4 million or 9% due largely to losses on sales of other real estate owned and loan work out expenses.

Comparing the year ended December 31, 2010 and 2009, net interest income increased by $11.9 million, or 11%. This increase was due primarily to the decline in rates paid on deposits, which more than offset the decrease in the yield on interest-earning assets. The net interest margin for 2010 increased to 3.60% compared to a net interest margin of 3.29% for the prior year.

Non-interest income increased $0.7 million or 2% to $46.0 million for the year ended December 31, 2010 as compared to $45.3 million in 2009. This increase was due primarily to fees on sales of investment products, which increased $0.6 million or 22% resulting from growth in sales of financial products. In addition, trust and investment management fees increased $0.9 million or 9% due to growth in assets under management, while Visa check fees increased $0.4 million or 14% due to an increased volume of electronic transactions. Other noninterest income also increased $0.2 million or 3% due primarily to higher mark to market adjustments on commercial loan swaps.   These increases were somewhat offset by a decline of $1.1 million or 10% in service charges on deposits due to lower commercial account analysis fees and return check charges.

Non-interest expenses remained level at $103.1 million for the year ended December 31, 2010 compared to 2009. Salary and benefits expenses increased $1.0 million or 2% due to increased salary expenses. Marketing expenses increased $0.2 million or 9% while outside data services increased $0.3 million or 7%. Other noninterest expenses increased $2.0 million or 12% due primarily to losses on sales of other real estate owned, loan workout fees and accrued expenses on loans sold with recourse. These increases were largely offset by a decrease of $1.6 million or 26% in FDIC insurance expense due mainly to a $1.7 million one time special assessment by the FDIC in the second quarter of 2009 and a decrease in intangibles amortization of $1.7 million or 46% due to intangibles from branch acquisitions that had fully amortized during the third quarter of 2009.  

Conference Call

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 .  Participants may call 877-380-5664. A password is not necessary. Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available at the Web site until 12:00 midnight (ET) February 28, 2011. A telephone voice replay will also be available during that same time period at 800-642-1687. Please use pass code #3614119 to access.

About Sandy Spring Bancorp/Sandy Spring Bank

With $3.5 billion in assets, Sandy Spring Bancorp is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc. Sandy Spring Bancorp is the largest publicly traded banking company headquartered and operating 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 43 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George's counties in Maryland, and Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring Bank also offers a comprehensive menu of leasing, insurance and investment management services. Visit www.sandyspringbank.com to locate an ATM near you or for more information about Sandy Spring Bank.

The Sandy Spring Bancorp, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4138

Forward-Looking Statements

Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release. These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan and lease losses; assessments of market risk; and statements of the ability to achieve financial and other goals.

Forward-looking statements are typically identified by words such as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project" and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Sandy Spring Bancorp does not assume any duty and does not undertake to update its forward-looking statements. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Sandy Spring Bancorp anticipated in its forward-looking statements, and future results could differ materially from historical performance.

Sandy Spring Bancorp's forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company's loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company's ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2009, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp's forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC's Web site at www.sec.gov .

 
Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS (Unaudited)
             
  Three Months Ended   Twelve Months Ended  
  December 31, % December 31, %
(Dollars in thousands, except per share data) 2010 2009 Change 2010 2009 Change
Results of Operations:            
Net interest income  $ 28,953  $ 27,833 4%  $ 115,607  $ 103,708 11%
Provision for loan and lease losses  2,323 21,084 (89) 25,908 76,762 (66)
Non-interest income  12,046  11,534 4  45,993  45,287 2
Non-interest expenses  26,525  25,323 5  103,123  103,085 --
Income (loss) before income taxes  12,151  (7,040) --  32,569  (30,852) --
Net income (loss)  8,276  (3,218) --  23,520  (14,855) --
Net income (loss) available to common stockholders  $ 6,604  $ (4,421) --  $ 17,371  $ (19,665) (188)
             
Return on average assets (1)  0.73%  (0.48)%    0.48%  (0.55)%  
Return on average common equity (1)  6.34%  (4.66)%    4.56%  (6.35)%  
Net interest margin  3.61%  3.40%    3.60%  3.29%  
Efficiency ratio - GAAP (3)  64.70%  64.33%    63.81%  69.19%  
Efficiency ratio - Non-GAAP (3)  62.15%  61.25%    60.89%  64.82%  
             
Per share data:            
Basic net income (loss)  $ 0.34  $ (0.20) --%  $ 1.05  $ (0.90) --%
Basic net income (loss) per common share  0.27  (0.27) (200) 0.78 (1.20) (165)
Diluted net income (loss)  0.34  (0.20) -- 1.05 (0.90) --
Diluted net income (loss) per common share  0.27  (0.27) (200) 0.78 (1.20) (165)
Dividends declared per common share  0.01  0.01 -- 0.04 0.37 (89)
Book value per common share 16.95 17.80 (5) 16.95 17.80 (5)
Average fully diluted shares  24,087,482  16,477,925 46  22,380,135  16,448,580 36
             
Financial Condition at period-end:            
Assets  $3,519,388  $ 3,630,478 (3)%  $3,519,388  $ 3,630,478 (3)%
Total loans and leases 2,156,232 2,298,010 (6) 2,156,232 2,298,010 (6)
Investment securities 1,042,943 1,023,799 2 1,042,943 1,023,799 2
Deposits 2,549,872 2,696,842 (5) 2,549,872 2,696,842 (5)
Stockholders' equity 407,569 373,586 9 407,569 373,586 9
             
Capital ratios:            
Tier 1 leverage   10.30%  9.09%    10.30%  9.09%  
Tier 1 capital to risk-weighted assets  14.11%  12.01%    14.11%  12.01%  
Total regulatory capital to risk-weighted assets  15.37%  13.27%    15.37%  13.27%  
Tangible common equity to tangible assets (4)  9.51%  5.95%    9.51%  5.95%  
Average equity to average assets  12.41%  10.36%    12.21%  10.94%  
             
Credit quality ratios:            
Allowance for loan and lease losses to total loans and leases  2.88%  2.81%    2.88%  2.81%  
Nonperforming loans to total loans and leases  3.69%  5.82%    3.69%  5.82%  
Nonperforming assets to total assets  2.54%  3.89%    2.54%  3.89%  
Annualized net charge-offs to average loans and leases (2)  1.37%  3.34%    1.27%  2.61%  
             
(1) Calculation utilizes net income available to common stockholders.
(2) Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale.
(3) The GAAP efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional, non-GAAP efficiency ratio excludes intangible asset amortization from non-interest expense; securities gains (losses) from non-interest income; OTTI; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
(4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets, other comprehensive losses and preferred stock. See the Reconciliation Table included with these Financial Highlights.
 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
(Dollars in thousands) 2010 2009 2010 2009
GAAP efficiency ratio:        
Non-interest expenses   $ 26,525  $ 25,323  $ 103,123  $ 103,085
Net interest income plus non-interest income  $ 40,999  $ 39,367  $ 161,600  $ 148,995
         
Efficiency ratio–GAAP  64.70% 64.33% 63.81% 69.19%
         
Non-GAAP efficiency ratio:        
Non-interest expenses   $ 26,525  $ 25,323  $ 103,123  $ 103,085
Less non-GAAP adjustment:        
Amortization of intangible assets  472  496  1,959  3,646
Non-interest expenses as adjusted  $ 26,053  $ 24,827  $ 101,164  $ 99,439
         
Net interest income plus non-interest income   $ 40,999  $ 39,367  $ 161,600  $ 148,995
Plus non-GAAP adjustment:        
Tax-equivalent income  1,352  1,376  4,836  4,839
Less non-GAAP adjustments:        
Securities gains  473  211  796  418
OTTI recognized in earnings  (43)  --  (512)  --
Net interest income plus non-interest income - as adjusted  $ 41,921  $ 40,532  $ 166,152  $ 153,416
         
Efficiency ratio–Non-GAAP 62.15% 61.25% 60.89% 64.82%
         
Tangible common equity ratio:        
Total stockholders' equity  $ 407,569  $ 373,586  $ 407,569  $ 373,586
Accumulated other comprehensive income (loss)  2,620  2,652  2,620  2,652
Goodwill  (76,816)  (76,816)  (76,816)  (76,816)
Other intangible assets, net  (6,579)  (8,537)  (6,579)  (8,537)
Preferred stock  --  (80,095)  --  (80,095)
Tangible common equity  $ 326,794  $ 210,790  $ 326,794  $ 210,790
         
Total assets  $ 3,519,388  $ 3,630,478  $ 3,519,388  $ 3,630,478
Goodwill  (76,816)  (76,816)  (76,816)  (76,816)
Other intangible assets, net  (6,579)  (8,537)  (6,579)  (8,537)
Tangible assets  $ 3,435,993  $ 3,545,125  $ 3,435,993  $ 3,545,125
         
Tangible common equity ratio 9.51% 5.95% 9.51% 5.95%
 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
     
  December 31,
(Dollars in thousands) 2010 2009
Assets    
Cash and due from banks  $ 44,696  $ 49,430
Federal funds sold  1,813  1,863
Interest-bearing deposits with banks  16,608  8,503
Cash and cash equivalents  63,117  59,796
Residential mortgage loans held for sale (at fair value)   22,717  12,498
Investments available-for-sale (at fair value)  907,283  858,433
Investments held-to-maturity --- fair value of $104,124 and $137,787 at December 31, 2010 and 2009, respectively  101,590  132,593
Other equity securities  34,070  32,773
Total loans and leases  2,156,232  2,298,010
Less: allowance for loan and lease losses  (62,135)  (64,559)
Net loans and leases  2,094,097  2,233,451
Premises and equipment, net  49,004  49,606
Other real estate owned  9,493  7,464
Accrued interest receivable  12,570  13,653
Goodwill  76,816  76,816
Other intangible assets, net   6,579  8,537
Other assets  142,052  144,858
Total assets  $ 3,519,388  $ 3,630,478
     
Liabilities    
Noninterest-bearing deposits  $ 566,812  $ 540,578
Interest-bearing deposits  1,983,060  2,156,264
Total deposits  2,549,872  2,696,842
Securities sold under retail repurchase agreements and federal funds purchased  96,243  89,062
Advances from FHLB  405,758  411,584
Subordinated debentures  35,000  35,000
Accrued interest payable and other liabilities  24,946  24,404
Total liabilities  3,111,819  3,256,892
     
Stockholders' Equity    
Preferred stock—par value $1.00 (liquidation preference of $1,000 per share) shares authorized 83,094, shares issued and outstanding at December 31, 2009; 83,094, net of discount of $2,999 at December 31, 2009  --  80,095
Common stock --- par value $1.00; shares authorized 49,916,906; shares issued and outstanding 24,046,627 and 16,487,852 at December 31, 2010 and 2009, respectively  24,047  16,488
Warrants  3,699  3,699
Additional paid in capital  177,344  87,334
Retained earnings  205,099  188,622
Accumulated other comprehensive loss  (2,620)  (2,652)
Total stockholders' equity  407,569  373,586
Total liabilities and stockholders' equity  $ 3,519,388  $ 3,630,478
 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS) (Unaudited)
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
(Dollars in thousands, except per share data) 2010 2009 2010 2009
Interest Income:        
Interest and fees on loans and leases  $ 28,047  $ 30,320  $ 115,789  $ 126,899
Interest on loans held for sale  213  113  534  767
Interest on deposits with banks  19  37  177  149
Interest and dividends on securities:        
Taxable  5,984  6,272  24,624  19,945
Exempt from federal income taxes  1,850  1,907  7,222  7,467
Interest on federal funds sold  1  --  3  3
Total interest income  36,114  38,649  148,349  155,230
Interest Expense:        
Interest on deposits  3,193  6,803  16,934  34,921
Interest on retail repurchase agreements and federal funds purchased  71  83  269  308
Interest on advances from FHLB  3,650  3,703  14,599  14,708
Interest on subordinated debt  247  227  940  1,585
Total interest expense  7,161  10,816  32,742  51,522
Net interest income  28,953  27,833  115,607  103,708
Provision for loan and lease losses  2,323  21,084  25,908  76,762
Net interest income after provision for loan and lease losses  26,630  6,749  89,699  26,946
Non-interest Income:        
Investment securities gains  473  211  796  418
Total other-than-temporary impairment ("OTTI") losses  (337)  --  (1,505)  --
Portion of OTTI losses recognized in other comprehensive income, before taxes  294  --  993  --
Net OTTI recognized in earnings  (43)  --  (512)  --
Service charges on deposit accounts  2,342  2,896  10,326  11,433
Gains on sales of mortgage loans  707  434  3,251  3,253
Fees on sales of investment products  974  761  3,438  2,823
Trust and investment management fees  2,799  2,358  10,287  9,421
Insurance agency commissions  1,334  1,098  5,229  5,236
Income from bank owned life insurance  695  730  2,800  2,906
Visa check fees  887  776  3,325  2,920
Other income  1,878  2,270  7,053  6,877
Total non-interest income  12,046  11,534  45,993  45,287
Non-interest Expenses:        
Salaries and employee benefits  14,077  13,141  55,470  54,460
Occupancy expense of premises  2,852  2,702  11,477  10,710
Equipment expenses  1,153  1,359  4,808  5,691
Marketing  681  777  2,359  2,166
Outside data services  985  967  3,992  3,721
FDIC insurance  1,114  1,124  4,497  6,092
Amortization of intangible assets  472  496  1,959  3,646
Other expenses  5,191  4,757  18,561  16,599
Total non-interest expenses  26,525  25,323  103,123  103,085
Income (loss) before income taxes  12,151  (7,040)  32,569  (30,852)
Income tax expense (benefit)  3,875  (3,822)  9,049  (15,997)
Net income (loss)  $ 8,276  $ (3,218)  $ 23,520  $ (14,855)
Preferred stock dividends and discount accretion  1,672  1,203  6,149  4,810
Net income (loss) available to common stockholders  $ 6,604  $ (4,421)  $ 17,371  $ (19,665)
         
Net Income Per Share Amounts:        
Basic net income (loss) per share  $ 0.34  $ (0.20)  $ 1.05  $ (0.90)
Basic net income (loss) per common share  0.27  (0.27)  0.78  (1.20)
Diluted net income (loss) per share  $ 0.34  $ (0.20)  $ 1.05  $ (0.90)
Diluted net income (loss) per common share  0.27  (0.27)  0.78  (1.20)
Dividends declared per common share  $ 0.01  $ 0.01  $ 0.04  $ 0.37
 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
                 
  2010 2009
(Dollars in thousands, except per share data) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Profitability for the quarter:                
Tax-equivalent interest income  $ 37,466  $ 38,688  $ 38,663  $ 38,368  $ 40,025  $ 40,516  $ 39,791  $ 39,737
Interest expense 7,161 7,868 8,512 9,201 10,816 12,783 14,220 13,703
Tax-equivalent net interest income 30,305 30,820 30,151 29,167 29,209 27,733 25,571 26,034
Tax-equivalent adjustment 1,352 1,321 1,155 1,008 1,376 1,331 1,123 1,009
Provision for loan and lease losses  2,323 2,453 6,107 15,025 21,084 34,450 10,615 10,613
Non-interest income  12,046 10,738 11,869 11,340 11,534 10,770 11,009 11,974
Non-interest expenses  26,525 25,339 25,953 25,306 25,323 26,675 26,837 24,250
Income (loss) before income taxes  12,151 12,445 8,805 (832) (7,040) (23,953) (1,995) 2,136
Income tax expense (benefit)  3,875 3,961 2,546 (1,333) (3,822) (10,379) (1,715) (81)
Net Income (loss)   8,276 8,484 6,259 501 (3,218) (13,574) (280) 2,217
Net Income (loss) available to common stockholders  $ 6,604  $ 6,410  $ 5,056  $ (699)  $ (4,421)  $ (14,779)  $ (1,482)  $ 1,017
Financial ratios:                
Return on average assets 0.73% 0.70% 0.56% (0.08)% (0.48)% (1.62)% (0.17)% 0.12%
Return on average common equity 6.34% 6.26% 5.13% (0.92)% (4.66)% (19.01)% (1.90)% 1.32%
Net interest margin 3.61% 3.64% 3.58% 3.56% 3.40% 3.27% 3.11% 3.39%
Efficiency ratio - GAAP (1) 64.70% 62.98% 63.51% 64.07% 64.36% 71.68% 75.70% 65.54%
Efficiency ratio - Non-GAAP (1) 62.15% 59.27% 60.59% 61.56% 61.29% 66.49% 70.58% 61.29%
Per share data:                
Basic net income (loss) per share  $ 0.34  $ 0.35  $ 0.26  $ 0.03  $ (0.20)  $ (0.83)  $ (0.02)  $ 0.14
Basic net income (loss) per common share  0.27  0.27  0.21  (0.04)  (0.27)  (0.90)  (0.09)  0.06
Diluted net income (loss) per share  0.34  0.35  0.26  0.03  (0.20)  (0.83)  (0.02)  0.13
Diluted net income (loss) per common share  0.27  0.27  0.21  (0.04)  (0.27)  (0.90)  (0.09)  0.06
Dividends declared per common share  0.01  0.01  0.01  0.01  0.01  0.12  0.12  0.12
Book value per common share  16.95  17.14  16.80  16.33  17.80  18.25  18.92  19.06
Average fully diluted shares  24,087,482 24,102,497 24,033,158 17,243,415  16,477,925  16,496,480 16,444,252 16,433,788
Non-interest income:                
Securities gains  $ 473  $ 25  $ 95  $ 203  $ 211  $ 15  $ 30  $ 162
Net OTTI recognized in earnings  (43)  (380)  (89)  --  --  --  --  --
Service charges on deposit accounts  2,342  2,567  2,791  2,626  2,896  2,823 2,851 2,863
Gains on sales of mortgage loans  707  915  1,020  609  434  1,011 786 1,022
Fees on sales of investment products  974  782  941  741  761  740 622 700
Trust and investment management fees  2,799  2,505  2,534  2,449  2,358  2,406 2,370 2,287
Insurance agency commissions  1,334  978  928  1,989  1,098  1,048 1,040 2,050
Income from bank owned life insurance  695  709  703  693  730  740 725 711
Visa check fees  887  843  855  740  776  758 748 638
Other income  1,878  1,794  2,091  1,290  2,270  1,229 1,837 1,541
Total non-interest income  $ 12,046  $ 10,738  $ 11,869  $ 11,340  $ 11,534  $ 10,770  $ 11,009  $ 11,974
Non-interest expense:                
Salaries and employee benefits  $ 14,077  $ 13,841  $ 14,181  $ 13,371  $ 13,141  $ 14,411  $ 13,704  $ 13,204
Occupancy expense of premises  2,852 2,826 2,709 3,090  2,702  2,685 2,548 2,775
Equipment expenses  1,153 1,137 1,304 1,214  1,359  1,444 1,374 1,514
Marketing  681 589 573 516  777  484 485 420
Outside data services  985 966 918 1,123  967  987 961 806
FDIC insurance  1,114 1,056 1,186 1,141  1,124  1,219 2,790 959
Amortization of intangible assets  472 495 496 496  496  1,048 1,047 1,055
Other expenses  5,191 4,429 4,586 4,355  4,757  4,397 3,928 3,517
Total non-interest expense  $ 26,525  $ 25,339  $ 25,953  $ 25,306  $ 25,323  $ 26,675  $ 26,837  $ 24,250
                 
(1) The GAAP efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional, non-GAAP efficiency ratio excludes intangible asset amortization and the goodwill impairment loss; excludes securities gains; OTTI losses from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
                 
  2010 2009
(Dollars in thousands) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Balance sheets at quarter end:                
Residential mortgage loans  $ 436,534  $ 442,723  $ 458,502  $ 460,129  $ 457,414  $ 455,312  $ 450,500  $ 461,359
Residential construction loans 91,273 92,485 86,393 83,902  92,283  115,258 138,923 163,861
Commercial mortgage loans 889,415 903,195 900,312 882,040  894,951  873,438 862,315 859,882
Commercial construction loans 92,714 96,823 95,357 130,064  131,789  174,052 199,278 222,805
Commercial business loans and leases 265,806 258,566 284,708 302,995  321,924  314,599 333,025 342,870
Consumer loans 380,490 391,415 393,560 397,527  399,649  401,623 405,348 411,068
Total loans and leases 2,156,232 2,185,207 2,218,832 2,256,657  2,298,010  2,334,282 2,389,389 2,461,845
Less: allowance for loan and lease losses (62,135) (67,282) (71,377) (69,575)  (64,559)  (62,937) (58,317) (59,798)
Net loans and leases 2,094,097 2,117,925 2,147,455 2,187,082 2,233,451 2,271,345 2,331,072 2,402,047
Goodwill 76,816 76,816 76,816 76,816  76,816  76,816 76,816 76,816
Other intangible assets, net 6,579 7,050 7,546 8,042  8,537  9,033 10,080 11,128
Total assets 3,519,388 3,606,617 3,701,150 3,673,246  3,630,478  3,632,391 3,617,497 3,519,432
Total deposits 2,549,872 2,585,496 2,659,956 2,653,448  2,696,842  2,683,487 2,650,845 2,553,912
Customer repurchase agreements 86,243 97,884 86,062 78,416  74,062  84,138 98,827 91,928
Total stockholders' equity 407,569 451,717 483,681 471,857  373,586  380,571 391,262 392,522
Quarterly average balance sheets:                
Residential mortgage loans  $ 461,700  $ 466,437  $ 467,970  $ 462,803  $ 464,737  $ 460,772  $ 477,955  $ 481,721
Residential construction loans 92,033 87,522 85,617 89,732  106,115  123,892 150,914 176,811
Commercial mortgage loans 895,262 906,010 887,259 891,722  877,419  871,831 862,658 854,402
Commercial construction loans 96,498 96,502 115,965 131,265  165,784  191,021 216,897 224,229
Commercial business loans and leases 256,645 272,353 294,168 317,492  312,547  327,569 341,039 359,820
Consumer loans 387,375 393,491 395,833 398,233  401,164  401,930 408,200 408,843
Total loans and leases 2,189,513 2,222,315 2,246,812 2,291,247 2,327,766 2,377,015 2,457,663 2,505,826
Securities 1,112,128 1,058,175 1,013,756 970,681  1,026,179  956,350 772,878 536,981
Total earning assets 3,332,705 3,360,758 3,379,388 3,318,070  3,409,867  3,370,823 3,298,923 3,117,590
Total assets 3,594,812 3,620,881 3,645,090 3,591,786  3,672,382  3,627,617 3,549,185 3,375,715
Total interest-bearing liabilities 2,534,716 2,571,000 2,596,353 2,653,187  2,709,152  2,671,944 2,595,303 2,471,762
Noninterest-bearing demand deposits 587,570 568,835 547,245 524,313  549,347  532,462 527,713 476,361
Total deposits 2,584,025 2,607,190 2,612,633 2,640,853  2,718,882  2,661,108 2,581,837 2,431,471
Customer repurchase agreements 92,049 87,927 85,178 81,622  92,471  95,310 93,980 69,212
Total stockholders' equity 446,256 455,101 475,521 387,099  380,534  391,571 393,201 391,673
Capital and credit quality measures:                
Average equity to average assets 12.41% 12.57% 13.05% 10.78% 10.36% 10.79% 11.08% 11.60%
Allowance for loan and lease losses to loans and leases 2.88% 3.08% 3.22% 3.08% 2.81% 2.70% 2.44% 2.43%
Non-performing loans to total loans 3.69% 4.27% 4.93% 6.05% 5.82% 6.14% 5.84% 4.90%
Non-performing assets to total assets 2.54% 2.87% 3.19% 3.90% 3.89% 4.14% 4.05% 3.57%
Annualized net charge-offs to average loans and leases (1) 1.37% 1.18% 0.77% 1.78% 3.34% 5.00% 1.97% 0.22%
Allowance for loan and lease losses to non-performing loans 78.03% 72.08% 65.30% 50.98% 48.28% 43.90% 41.80% 49.54%
Net charge-offs   $ 7,470  $ 6,548  $ 4,305  $ 10,009  $ 19,462  $ 29,831  $ 12,095  $ 1,341
Non-performing assets:                
Non-accrual loans and leases  $ 63,327  $ 73,876  $ 83,887  $ 110,719  $ 111,180  $ 127,473  $ 123,117  $ 110,761
Loans and leases 90 days past due  14,154  18,268  24,226  25,085  19,001  15,491 16,004 9,545
Restructured loans and leases  2,148  1,199  1,199  682  3,549  395 395 395
Total non-performing loans  79,629  93,343  109,312  136,486  133,730  143,359  139,516  120,701
Other real estate owned, net  9,493  10,011  8,730  6,796  7,464  6,873 6,829 5,094
Other assets owned  200  200  --   --   --   --   --   -- 
Total non-performing assets  $ 89,322  $ 103,554  $ 118,042  $ 143,282  $ 141,194  $ 150,232  $ 146,345  $ 125,795
(1) Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale.
 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
             
  Three Months Ended December 31,
  2010 2009
       Annualized      Annualized 
  Average  (1)  Average Average  (1)  Average
(Dollars in thousands and tax-equivalent) Balances Interest Yield/Rate Balances Interest Yield/Rate
Assets            
Residential mortgage loans (2)  $ 461,700  $ 5,849 5.09%  $ 464,737  $ 6,540 5.63%
Residential construction loans 92,033 993 4.28 106,115 1,332 4.98
Commercial mortgage loans 895,262 13,418 5.95 877,419 13,501 6.10
Commercial construction loans 96,498 919 3.78 165,784 957 2.29
Commercial business loans and leases 256,645 3,355 5.19 312,547 4,124 5.24
Consumer loans 387,375 3,726 3.84 401,164 3,979 3.95
Total loans and leases (3) 2,189,513 28,260 5.13 2,327,766 30,433 5.20
Taxable securities 934,784 6,403 2.68 854,637 6,633 3.04
Tax-exempt securities (4) 177,344 2,783 6.28 171,542 2,922 6.85
Interest-bearing deposits with banks 29,410 19 0.26 54,359 37 0.27
Federal funds sold 1,654  1 0.18 1,563  --  0.13
Total interest-earning assets 3,332,705 37,466 4.46 3,409,867 40,025 4.66
             
Less: allowance for loan and lease losses (67,164)     (65,093)    
Cash and due from banks 45,042     44,646    
Premises and equipment, net 48,326     49,894    
Other assets 235,903     233,068    
Total assets  $3,594,812      $3,672,382    
             
Liabilities and Stockholders' Equity            
Interest-bearing demand deposits  $ 302,401  68 0.09%  $ 262,327 94 0.14%
Regular savings deposits 169,021 36 0.08 153,692 34 0.09
Money market savings deposits 882,323 1,009 0.45 935,980 2,035 0.86
Time deposits 642,710 2,080 1.28 817,536 4,640 2.25
Total interest-bearing deposits 1,996,455 3,193 0.63 2,169,535 6,803 1.24
Other borrowings 96,016 71 0.30 92,906 83 0.35
Advances from FHLB 407,245 3,650 3.56 411,711 3,703 3.57
Subordinated debentures 35,000 247 2.82 35,000 227 2.59
Total interest-bearing liabilities 2,534,716 7,161 1.12 2,709,152 10,816 1.59
             
Noninterest-bearing demand deposits 587,570     549,347    
Other liabilities 26,270     33,349    
Stockholders' equity 446,256     380,534    
Total liabilities and stockholders' equity  $3,594,812      $3,672,382    
             
Net interest income and spread    $ 30,305 3.34%    $ 29,209 3.07%
Less: tax-equivalent adjustment    1,352      1,376  
Net interest income    $ 28,953      $ 27,833  
             
Interest income/earning assets     4.46%     4.66%
Interest expense/earning assets     0.85     1.26
Net interest margin     3.61%     3.40%
             
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2010 and 2009. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.4 million and $1.4 million in 2010 and 2009, respectively.
(2) Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans.
(3) Non-accrual loans are included in the average balances.
(4) Includes only investments that are exempt from federal taxes.
 
 
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
             
  Twelve Months Ended December 31,
  2010 2009
       Annualized      Annualized 
  Average  (1)  Average Average  (1)  Average
(Dollars in thousands and tax-equivalent) Balances Interest Yield/Rate Balances Interest Yield/Rate
Assets            
Residential mortgage loans (2)  $ 464,462  $ 24,838 5.35%  $ 471,221  $ 27,560 5.85%
Residential construction loans 88,729 4,037 4.55 139,197 7,165 5.15
Commercial mortgage loans 895,103 53,877 6.02 866,655 53,280 6.15
Commercial construction loans 109,925 3,576 3.25 199,299 5,669 2.84
Commercial business loans and leases 284,963 14,789 5.19 335,093 17,991 5.37
Consumer loans 393,703 15,206 3.88 405,005 16,001 3.96
Total loans and leases (3) 2,236,885 116,323 5.20 2,416,470 127,666 5.28
Taxable securities 875,292 25,630 2.93 662,853 20,784 3.14
Tax-exempt securities (4) 163,834 11,052 6.75 161,949 11,467 7.08
Interest-bearing deposits with banks  69,755 177 0.25 56,980 149 0.26
Federal funds sold  1,773 3 0.17 2,045 3 0.19
Total interest-earning assets 3,347,539 153,185 4.58 3,300,297 160,069 4.85
             
Less: allowance for loan and lease losses (69,393)     (59,961)    
Cash and due from banks 44,736     45,038    
Premises and equipment, net 48,738     50,649    
Other assets 241,368     221,211    
Total assets  $3,612,988      $3,557,234    
             
Liabilities and Stockholders' Equity            
Interest-bearing demand deposits  $ 292,106 324 0.11%  $ 254,047 420 0.17%
Regular savings deposits 165,032 164 0.10 152,383 210 0.14
Money market savings deposits 890,187 5,015 0.56 841,336 10,725 1.27
Time deposits 706,487 11,431 1.62 829,817 23,566 2.84
Total interest-bearing deposits 2,053,812 16,934 0.82 2,077,583 34,921 1.68
Other borrowings 89,932 269 0.30 88,198 308 0.35
Advances from FHLB 409,697 14,599 3.56 412,074 14,708 3.57
Subordinated debentures 35,000 940 2.69 35,000 1,585 4.53
Total interest-bearing liabilities 2,588,441 32,742 1.27 2,612,855 51,522 1.97
             
Noninterest-bearing demand deposits 557,197     521,701    
Other liabilities 26,155     33,457    
Stockholders' equity 441,195     389,221    
Total liabilities and stockholders' equity  $3,612,988      $3,557,234    
             
Net interest income and spread    $ 120,443 3.31%    $ 108,547 2.88%
Less: tax-equivalent adjustment    4,836      4,839  
Net interest income    $ 115,607      $ 103,708  
             
Interest income/earning assets     4.58%     4.85%
Interest expense/earning assets     0.98     1.56
Net interest margin     3.60%     3.29%
             
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2010 and 2009. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.8 million and $4.8 million in 2010 and 2009, respectively.
(2) Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans.
(3) Non-accrual loans are included in the average balances.
(4) Includes only investments that are exempt from federal taxes.
CONTACT: Daniel J. Schrider, President & Chief Executive Officer, or
         Philip J. Mantua, E.V.P. & Chief Financial Officer
         Sandy Spring Bancorp
         17801 Georgia Avenue
         Olney, Maryland 20832
         1-800-399-5919
         Email: DSchrider@sandyspringbank.com
         PMantua@sandyspringbank.com
         Web site: www.sandyspringbank.com

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