Sandy Spring Bancorp Reports Second Quarter Results
- Press Release
- Source: Sandy Spring Bancorp, Inc.
- On 8:15 am EDT, Thursday July 23, 2009
OLNEY, Md., July 23, 2009 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq:SASR - News), the parent company of Sandy Spring Bank, today announced a net loss available to common shareholders for the second quarter of 2009 of $1.5 million (($.09) per diluted share) compared to net income of $5.7 million ($.34 per diluted share) for the second quarter of 2008 and net income available to common shareholders of $1.0 million ($.06 per diluted share) for the first quarter of 2009. The second quarter of 2009 included an FDIC special assessment charge of $1.7 million and a provision for loan and lease losses of $10.6 million related primarily to the residential real estate development portfolio.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| SASR | 9.10 | -0.54 |
Net loss available to common shareholders for the six-month period ending June 30, 2009 totaled $465,000 (($.03) per diluted share) compared to net income of $13.9 million ($.84 per diluted share) for the prior year period. The results for the year-to-date include a provision for loan and lease losses totaling $21.2 million for the first six months of 2009 and the FDIC special assessment charge mentioned previously.
"Our second quarter and year-to-date earnings were reduced primarily by the higher level of the provision for loan losses and the special assessment by the FDIC when compared to 2008. As a result of the local and regional economies' negative impact on our clients, we have continued to build reserves mainly in the residential real estate portfolio," said Daniel J. Schrider, president and chief executive officer.
"However, on the deposit side of the balance sheet we continued to experience strong deposit growth in the second quarter as our customer funding sources increased 15% over the prior year. This growth is being driven largely by our strategy to capitalize on opportunities resulting from several recent local acquisitions and related efforts to develop new multi-product customer relationships that we can rely upon for the long term to grow our market share in the Mid-Atlantic region."
"Total loan balances declined for the first six months of 2009 compared to 2008 as overall demand continued to be soft. However, residential mortgage lending was a bright spot as we closed over $250 million in residential mortgage loans during the first six months of the year compared to $146 million in the first six months of last year," said Schrider. "We view the growth in both residential mortgage activity and deposits as evidence of our success in growing the number of area households that are expanding their use of our full menu of financial services."
Second Quarter Highlights:
-- The provision for loan and lease losses totaled $10.6 million
for the quarter compared to $6.2 million for the second quarter
of 2008 and $10.6 million for the first quarter of 2009. The
provision was due to continued internal risk rating downgrades,
charge-offs and additional specific reserves primarily related
to loans in the residential real estate development portfolio.
-- The net interest margin was 3.11% for the second quarter
compared to 3.96% for the second quarter of 2008 and 3.39% for
the first quarter of 2009.
-- Noninterest expenses increased 8% for the quarter compared to
the second quarter of 2008 and increased 11% versus the first
quarter of 2009. Excluding the FDIC special assessment charge
in the second quarter, noninterest expenses increased 1%
compared to the second quarter of 2008. These results reflect a
continuing emphasis on expense control which originated with
project LIFT, a previously disclosed initiative for improved
management of operating expenses.
-- Customer funding sources, comprised of deposits and other
short-term borrowings from core customers, increased 15%
compared to the balance at June 30, 2008, and also increased
4% over the balance at March 31, 2009. These increases were due
primarily to growth in the Company's new Premier money market
savings product and growth in noninterest-bearing deposits.
Review of Balance Sheet and Credit Quality
Comparing June 30, 2009 balances to June 30, 2008, total assets increased 14% to $3.6 billion. Asset growth was reflected primarily in increases of 105% in investments and 64% in cash and cash equivalents. This growth was due mainly to a 16% increase in deposits. Total loans and leases decreased 2% to $2.4 billion compared to the prior year. This decrease in loans was due mainly to a net 11% decrease in residential mortgage loans which was somewhat offset by a 5% increase in consumer loans. Total loans decreased 3% compared to the first quarter of 2009.
Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 15% to $2.7 billion at June 30, 2009 compared to the prior year. Such customer funding sources also increased 4% compared to the first quarter of 2009. These increases were due primarily to growth resulting from the Company's new Premier money market account as well as growth in noninterest-bearing deposits.
Stockholders' equity totaled $391.3 million at June 30, 2009, and represented 10.8% of total assets, compared to 10.1% at June 30, 2008. At June 30, 2009 the Company had a total risk-based capital ratio of 13.86%, a tier 1 risk-based capital ratio of 12.60% and a tier 1 leverage ratio of 9.95% which were all above amounts needed in order to be categorized as "well capitalized" for regulatory purposes.
The provision for loan and lease losses totaled $10.6 million for the second quarter of 2009 compared to $6.2 million for the second quarter of 2008 and $10.6 million for the first quarter of 2009. As discussed above, these increases were primarily due to internal risk rating downgrades, charge-offs and additional specific reserves primarily related to loans in the residential real estate development portfolio.
Loan charge-offs, net of recoveries totaled $12.1 million for the second quarter of 2009 compared to net charge-offs of $0.6 million for the second quarter of 2008 and net charge-offs of $1.3 million for the first quarter of 2009. The allowance for loan and lease losses represented 2.44% of outstanding loans and leases and 42% of non-performing loans at June 30, 2009 compared to 2.43% of outstanding loans and leases and 50% of non-performing loans at March 31, 2009 and 1.38% of outstanding loans and leases and 53% of non-performing loans at June 30, 2008.
Non-performing assets totaled $146.3 million at June 30, 2009 compared to $64.9 million at June 30, 2008 and $125.8 million at March 31, 2009. The increase over the prior year was due primarily to $60.5 million in real estate development loans, $6.2 million in residential mortgage loans and $3.2 million in commercial loans that together totaled $69.9 million. The increase over the first quarter of 2009 was due primarily to $23.4 million in residential real estate development loans and $6.2 million in residential mortgage loans.
Income Statement Review
Comparing the second quarter of 2009 and 2008, net interest income decreased by $2.7 million, or 10%, due primarily to the decline in loan demand caused by the current state of the economy. This required the Company to invest the funds generated from deposit growth in investment securities with lower comparative yields thus exerting downward pressure on the net interest margin. Net interest income for the quarter was also negatively affected by the growth in nonperforming loans discussed above. These factors produced a net interest margin decrease to 3.11% in 2009 from 3.96% in 2008.
Noninterest income decreased 6% to $11.0 million in the second quarter of 2009 as compared to $11.7 million in the second quarter of 2008. Service charges on deposit accounts decreased $0.4 million or 11% due primarily to lower overdraft fees. Fees on sales of investment products decreased $0.3 million or 31% compared to the second quarter of 2008 and trust and investment management fees declined $0.1 million or 5%, both of which were due primarily to a decline in assets under management. In addition, insurance agency commissions decreased $0.3 million or 23% due to the overall effect of the current economy. These decreases were somewhat offset by an increase in gains on sales of mortgage loans of $0.1 million or 20% due largely to higher mortgage refinancing volumes reflecting market conditions. Other noninterest income also increased $0.4 million or 23% compared to the second quarter of 2008.
Noninterest expenses were $26.9 million in the second quarter of 2009 compared to $24.9 million in the second quarter of 2008, an increase of $2.0 million or 8%. This increase was due in large part to an increase of $2.4 million in FDIC insurance expense resulting primarily from a one time special assessment by the FDIC which totaled $1.7 million. Salaries and benefits expenses decreased $0.2 million or 1%, while occupancy and equipment expenses decreased $0.3 million or 6% compared to the second quarter of 2008. The overall noninterest expense performance continues to reflect the effect of stringent expense controls implemented as part of project LIFT.
Comparing the first six months of 2009 and 2008, net interest income decreased by $4.2 million, or 8% due primarily to the downward pressure on the net interest margin resulting from the lack of loan demand which caused the Company to invest the funds generated by the growth in deposits into investment securities which carry a lower yield as mentioned above. Net interest income for the year-to-date was also negatively affected by the growth in nonperforming loans mentioned above. These factors produced a net interest margin decrease to 3.24% in 2009 from 3.97% in 2008.
Noninterest income decreased 6% to $23.0 million for the first six months of 2009 as compared to $24.4 million in 2008. Service charges on deposit accounts decreased $0.5 million or 8% due primarily to lower overdraft fees while insurance agency commissions decreased $0.4 million or 10%. Fees on sales of investment products decreased $0.4 million or 23% and trust and investment management fees declined $0.2 million or 5%, both of which were due primarily to a decline in assets under management. These decreases were somewhat offset by an increase in gains on sales of mortgage loans of $0.4 million or 31% due largely to higher mortgage refinancing volumes reflecting market conditions. Other noninterest income also increased $0.2 million or 8% compared to 2008.
Noninterest expenses were $51.1 million for the first six months of 2009 compared to $49.6 million in 2008, an increase of $1.5 million or 3%. This increase was due primarily to an increase of $2.9 million in FDIC insurance expense which includes a one time special assessment in the second quarter by the FDIC of $1.7 million. Salaries and benefits expenses decreased $0.7 million or 3%, while marketing expenses decreased $0.1 million or 8% and expenses for outside data services decreased $0.4 million or 20% compared to the first six months of 2008.
Conference Call
The Company's management will host a conference call to discuss its second quarter results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations' section of the Sandy Spring Web site at www.sandyspringbank.com. Participants may call 888-569-5033. 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) August 23, 2009. A telephone voice replay will also be available during that same time period at 888-203-1112. Please use pass code #7314001 to access.
About Sandy Spring Bancorp/Sandy Spring Bank
With $3.6 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 West Financial Services, Inc. Sandy Spring Bancorp is the 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 42 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, 2008, 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)
(Dollars in thousands, except per share data)
Three Months Ended
June 30,
---------------------- %
2009 2008 Change
---------------------------------------------------------------------
Profitability for the period:
Net interest income $24,448 $27,119 (10)%
Provision for loan and lease losses 10,615 6,189 72
Noninterest income 11,030 11,695 (6)
Noninterest expenses 26,858 24,886 8
Income (loss) before income taxes (1,995) 7,739 (126)
Net income (loss) ($280) $5,651 (105)
Net income (loss) available to
common shareholders ($1,482) $5,651 (126)
Return on average assets (1) (0.17%) 0.73%
Return on average common equity (1) (1.90%) 7.09%
Net interest margin 3.11% 3.96%
Efficiency ratio - GAAP * 75.70% 64.11%
Efficiency ratio - Non-GAAP * 70.58% 59.73%
Per share data:
Basic net income (loss) ($0.02) $0.35 (106)%
Basic net income (loss) per common
share (0.09) 0.35 (126)
Diluted net income (loss) (0.02) 0.34 (106)
Diluted net income (loss) per
common share (0.09) 0.34 (126)
Dividends declared per common share 0.12 0.24 (50)
Book value 18.92 19.56 (3)
Average fully diluted shares 16,444,252 16,427,213
At period-end:
Assets $3,617,497 $3,164,123 14 %
Deposits 2,650,485 2,294,791 16
Total loans and leases 2,389,389 2,428,948 (2)
Securities 875,374 427,232 105
Stockholders' equity 391,262 320,218 22
Capital and credit quality ratios:
Average equity to average assets 11.08% 10.22%
Allowance for loan and lease losses
to loans and leases 2.44% 1.38%
Nonperforming assets to total
assets 4.05% 2.05%
Annualized net charge-offs to
average loans and leases 1.97% 0.11%
Six Months Ended
June 30,
---------------------- %
2009 2008 Change
---------------------------------------------------------------------
Profitability for the period:
Net interest income $49,473 $53,698 (8)%
Provision for loan and lease losses 21,228 8,856 140
Noninterest income 23,004 24,391 (6)
Noninterest expenses 51,108 49,589 3
Income (loss) before income taxes 141 19,644 (99)
Net income (loss) $1,937 $13,856 (86)
Net income (loss) available to
common shareholders ($465) $13,856 (103)
Return on average assets (1) (0.03%) 0.90%
Return on average common equity (1) (0.30%) 8.76%
Net interest margin 3.24% 3.97%
Efficiency ratio - GAAP * 70.52% 63.50%
Efficiency ratio - Non-GAAP * 65.85% 59.45%
Per share data:
Basic net income (loss) $0.12 $0.85 (86)%
Basic net income (loss) per common
share (0.03) 0.85 (104)
Diluted net income (loss) 0.12 0.84 (86)
Diluted net income (loss) per
common share (0.03) 0.84 (104)
Dividends declared per common share 0.24 0.48 (50)
Book value 18.92 19.56 (3)
Average fully diluted shares 16,424,490 16,417,511
At period-end:
Assets $3,617,497 $3,164,123 14 %
Deposits 2,650,485 2,294,791 16
Total loans and leases 2,389,389 2,428,948 (2)
Securities 875,374 427,232 105
Stockholders' equity 391,262 320,218 22
Capital and credit quality ratios:
Average equity to average assets 11.33% 10.25%
Allowance for loan and lease losses
to loans and leases 2.44% 1.38%
Nonperforming assets to total
assets 4.05% 2.05%
Annualized net charge-offs to
average loans and leases 1.09% 0.04%
(1) Calculation utilizes net income available to common shareholders
* The GAAP 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.
Sandy Spring Bancorp, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Efficiency Ratios (Unaudited)
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2009 2008 2009 2008
--------- --------- --------- ---------
GAAP efficiency ratio:
Noninterest expenses-GAAP $26,858 $24,886 $51,108 $49,589
Net interest income plus
noninterest income 35,478 38,814 72,477 78,089
Efficiency ratio-GAAP 75.70% 64.12% 70.52% 63.50%
========= ========= ========= =========
Non-GAAP efficiency ratio:
Noninterest expenses $26,858 $24,886 $51,108 $49,589
Less non-GAAP adjustment:
Amortization of intangible
assets 1,047 1,117 2,102 2,241
--------- --------- --------- ---------
Noninterest expenses-as
adjusted 25,811 23,769 49,006 47,348
Net interest income plus
noninterest income 35,478 38,814 72,477 78,089
Plus non-GAAP adjustment:
Tax-equivalency 1,123 1,061 2,132 2,201
Less non-GAAP adjustments:
Securities gains 30 79 192 653
--------- --------- --------- ---------
Net interest income plus
noninterest income -
as adjusted 36,571 39,796 74,417 79,637
Efficiency ratio - Non-GAAP 70.58% 59.73% 65.85% 59.45%
========= ========= ========= =========
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
June 30 (Unaudited) December 31
----------------------- -----------
2009 2008 2008
---------------------------------------------------------------------
Assets
Cash and due from banks $43,360 $62,630 $44,738
Federal funds sold 2,034 11,678 1,110
Interest-bearing deposits with
banks 77,090 462 59,381
----------- ----------- -----------
Cash and cash equivalents 122,484 74,770 105,229
Residential mortgage loans held
for sale (at fair value) 14,494 12,087 11,391
Investments available-for-sale
(at fair value) 697,314 218,323 291,727
Investments held-to-maturity -
fair value of $150,109, $184,540
and $175,908, respectively 145,937 180,556 171,618
Other equity securities 32,123 28,353 29,146
Total loans and leases 2,389,389 2,428,948 2,490,646
Less: allowance for loan and
lease losses (58,317) (33,435) (50,526)
----------- ----------- -----------
Net loans and leases 2,331,072 2,395,513 2,440,120
Premises and equipment, net 50,460 52,928 51,410
Other real estate owned 6,829 1,352 2,860
Accrued interest receivable 13,007 12,658 11,810
Goodwill 76,816 78,376 76,248
Other intangible assets, net 10,080 14,390 12,183
Other assets 116,881 94,817 109,896
----------- ----------- -----------
Total assets $3,617,497 $3,164,123 $3,313,638
=========== =========== ===========
Liabilities
Noninterest-bearing deposits $553,604 $480,861 $461,517
Interest-bearing deposits 2,096,881 1,813,930 1,903,740
----------- ----------- -----------
Total deposits 2,650,485 2,294,791 2,365,257
Short-term borrowings 496,463 421,881 421,074
Long-term borrowings 14,434 67,070 66,584
Subordinated debentures 35,000 35,000 35,000
Accrued interest payable and
other liabilities 29,853 25,163 33,861
----------- ----------- -----------
Total liabilities 3,226,235 2,843,905 2,921,776
Stockholders' Equity
Preferred stock -- par value
$1.00 (liquidation preference
of $1,000 per share) shares
authorized 83,094, 0 and 83,094,
respectively; shares issued and
outstanding 83,094, 0 and
83,094, respectively (discount
of $3,329, 0 and $3,654,
respectively) 79,765 -- 79,440
Common stock -- par value $1.00;
shares authorized 49,916,906,
50,000,000 and 49,916,906,
respectively; shares issued and
outstanding 16,460,921,
16,373,681, and 16,398,523,
respectively 16,461 16,374 16,399
Warrants 3,699 -- 3,699
Additional paid in capital 86,883 84,759 85,486
Retained earnings 209,980 220,712 214,410
Accumulated other comprehensive
loss (5,526) (1,627) (7,572)
----------- ----------- -----------
Total stockholders' equity 391,262 320,218 391,862
----------- ----------- -----------
Total liabilities and
stockholders' equity $3,617,497 $3,164,123 $3,313,638
=========== =========== ===========
Certain reclassifications of information previously reported have
been made to conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
----------------- -----------------
2009 2008 2009 2008
-------- -------- -------- --------
Interest income:
Interest and fees on loans and
leases $32,066 $36,696 $65,299 $75,165
Interest on loans held for sale 253 122 533 218
Interest on deposits with banks 43 24 89 73
Interest and dividends on
securities:
Taxable 4,531 1,880 7,726 4,578
Exempt from federal income
taxes 1,774 2,972 3,746 5,303
Interest on federal funds sold 1 151 3 430
-------- -------- -------- --------
Total interest income 38,668 41,845 77,396 85,767
Interest expense:
Interest on deposits 9,921 10,583 19,375 23,605
Interest on short-term borrowings 3,614 3,063 7,060 6,342
Interest on long-term borrowings 685 1,080 1,488 2,122
-------- -------- -------- --------
Total interest expense 14,220 14,726 27,923 32,069
-------- -------- -------- --------
Net interest income 24,448 27,119 49,473 53,698
Provision for loan and lease
losses 10,615 6,189 21,228 8,856
-------- -------- -------- --------
Net interest income after
provision for loan and
lease losses 13,833 20,930 28,245 44,842
Noninterest income:
Securities gains 30 79 192 653
Service charges on deposit
accounts 2,851 3,202 5,714 6,232
Gains on sales of mortgage loans 786 653 1,808 1,375
Fees on sales of investment
products 622 905 1,322 1,727
Trust and investment management
fees 2,370 2,505 4,657 4,902
Insurance agency commissions 1,040 1,357 3,090 3,443
Income from bank owned life
insurance 725 727 1,436 1,441
Visa check fees 748 761 1,386 1,457
Other income 1,858 1,506 3,399 3,161
-------- -------- -------- --------
Total noninterest income 11,030 11,695 23,004 24,391
Noninterest expenses:
Salaries and employee benefits 13,704 13,862 26,908 27,625
Occupancy expense of premises 2,548 2,619 5,323 5,418
Equipment expenses 1,374 1,560 2,888 2,999
Marketing 485 488 905 985
Outside data services 961 1,081 1,767 2,203
FDIC insurance 2,790 421 3,749 813
Amortization of intangible
assets 1,047 1,117 2,102 2,241
Other expenses 3,949 3,738 7,466 7,305
-------- -------- -------- --------
Total noninterest expenses 26,858 24,886 51,108 49,589
-------- -------- -------- --------
Income (loss) before income taxes (1,995) 7,739 141 19,644
Income tax expense (benefit) (1,715) 2,088 (1,796) 5,788
-------- -------- -------- --------
Net income(loss) ($280) $5,651 $1,937 $13,856
Preferred stock dividends and
discount accretion 1,202 $0 2,402 $0
-------- -------- -------- --------
Net income (loss) available
to common shareholders ($1,482) $5,651 ($465) $13,856
======== ======== ======== ========
Basic net income (loss) per share ($0.02) $0.35 $0.12 $0.85
Basic net income (loss) per
common share (0.09) 0.35 (0.03) 0.85
Diluted net income (loss) per
share (0.02) 0.34 0.12 0.84
Diluted net income (loss) per
common share (0.09) 0.34 (0.03) 0.84
Dividends declared per share 0.12 0.24 0.24 0.48
Sandy Spring Bancorp, Inc. and Subsidiaries
Historical Trends in Quarterly
Financial Data (Unaudited) 2009
(Dollars in thousands, except per ==================================
share data) Q2 Q1
----------------------------------
Profitability for the quarter:
Tax-equivalent interest income $39,791 $39,737
Interest expense 14,220 13,703
Tax-equivalent net interest income 25,571 26,034
Tax-equivalent adjustment 1,123 1,009
Provision for loan and lease losses 10,615 10,613
Noninterest income 11,030 11,974
Noninterest expenses 26,858 24,250
Income (loss) before income taxes (1,995) 2,136
Income tax expense (benefit) (1,715) (81)
Net Income (loss) (280) 2,217
Net Income (loss) available to
common shareholders (1,482) 1,017
=====================================================================
Financial ratios:
Return on average assets -0.17% 0.12%
Return on average common equity -1.90% 1.32%
Net interest margin 3.11% 3.39%
Efficiency ratio - GAAP * 75.70% 65.54%
Efficiency ratio - Non-GAAP * 70.58% 61.29%
=====================================================================
Per share data:
Basic net income (loss) per share ($0.02) $0.14
Basic net income (loss) per common
share ($0.09) $0.06
Diluted net income (loss) per share ($0.02) $0.13
Diluted net income (loss) per common
share ($0.09) $0.06
Dividends declared per common share $0.12 $0.12
Book value per common share $18.92 $19.06
Average fully diluted shares 16,444,252 16,433,788
=====================================================================
Noninterest income breakdown:
Securities gains $30 $162
Service charges on deposit accounts 2,851 2,863
Gains on sales of mortgage loans 786 1,022
Fees on sales of investment products 622 700
Trust and investment management fees 2,370 2,287
Insurance agency commissions 1,040 2,050
Income from bank owned life insurance 725 711
Visa check fees 748 638
Other income 1,858 1,541
Total 11,030 11,974
=====================================================================
Noninterest expense breakdown:
Salaries and employee benefits $13,704 $13,204
Occupancy expense of premises 2,548 2,775
Equipment expenses 1,374 1,514
Marketing 485 420
Outside data services 961 806
FDIC insurance 2,790 959
Amortization of intangible assets 1,047 1,055
Goodwill impairment loss 0 0
Other expenses 3,949 3,517
Total 26,858 24,250
=====================================================================
Sandy Spring Bancorp, Inc. and Subsidiaries
Historical Trends
in Quarterly
Financial Data (Unaudited)
(Dollars in thousands, 2008
except per share data) ============================================
Q4 Q3 Q2 Q1
--------------------------------------------
Profitability for
the quarter:
Tax-equivalent
interest income $42,194 $43,228 $42,906 $45,062
Interest expense 14,356 13,961 14,726 17,343
Tax-equivalent net
interest income 27,838 29,267 28,180 27,719
Tax-equivalent
adjustment 1,164 1,180 1,061 1,140
Provision for loan
and lease losses 17,791 6,545 6,189 2,667
Noninterest income 10,973 10,879 11,695 12,696
Noninterest expenses 27,233 25,267 24,886 24,703
Income (loss)
before income
taxes (7,377) 7,154 7,739 11,905
Income tax expense
(benefit) (3,941) 1,795 2,088 3,700
Net Income (loss) (3,436) 5,359 5,651 8,205
Net Income (loss)
available to
common shareholders (3,770) 5,359 5,651 8,205
=====================================================================
Financial ratios:
Return on average
assets -0.42% 0.67% 0.73% 1.07%
Return on average
common equity -4.70% 6.64% 7.09% 10.45%
Net interest margin 3.73% 4.02% 3.96% 3.99%
Efficiency ratio -
GAAP * 72.34% 64.84% 64.11% 62.90%
Efficiency ratio -
Non-GAAP * 62.41% 58.27% 59.73% 59.18%
=====================================================================
Per share data:
Basic net income
(loss) per share ($0.21) $0.33 $0.35 $0.50
Basic net income
(loss) per common
share ($0.23) $0.33 $0.35 $0.50
Diluted net income
(loss) per share ($0.21) $0.33 $0.34 $0.50
Diluted net income
(loss) per common
share ($0.23) $0.33 $0.34 $0.50
Dividends declared
per common share $0.24 $0.24 $0.24 $0.24
Book value per
common share $19.05 $19.51 $19.56 $19.50
Average fully
diluted shares 16,434,214 16,418,588 16,427,21 16,407,778
=====================================================================
Noninterest income
breakdown:
Securities gains $1 $9 $79 $574
Service charges on
deposit accounts 3,297 3,249 3,202 3,030
Gains on sales of
mortgage loans 516 397 653 722
Fees on sales of
investment
products 928 820 905 822
Trust and
investment
management fees 2,201 2,380 2,505 2,397
Insurance agency
commissions 1,183 1,282 1,357 2,086
Income from bank
owned life
insurance 719 742 727 714
Visa check fees 691 727 761 696
Other income 1,437 1,273 1,506 1,655
Total 10,973 10,879 11,695 12,696
=====================================================================
Noninterest expense
breakdown:
Salaries and
employee benefits $13,441 $11,949 $13,862 $13,763
Occupancy expense
of premises 2,612 2,732 2,619 2,799
Equipment expenses 1,642 1,515 1,560 1,439
Marketing 652 526 488 497
Outside data
services 1,054 1,116 1,081 1,122
FDIC insurance 458 480 421 392
Amortization of
intangible assets 1,103 1,103 1,117 1,124
Goodwill impairment
lo 1,909 2,250 0 0
Other expenses 4,362 3,596 3,738 3,567
Total 27,233 25,267 24,886 24,703
=====================================================================
* 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 expenses
from noninterest expenses; excludes security 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 (Unaudited) 2009
(Dollars in thousands, ==========================
except per share data) Q2 Q1
--------------------------
Balance sheets at quarter end:
Residential mortgage loans $450,500 $461,359
Residential construction loans 138,923 163,861
Commercial mortgage loans 862,315 859,882
Commercial construction loans 199,278 222,805
Commercial loans and leases 333,025 342,870
Consumer loans 405,348 411,068
Total loans and leases 2,389,389 2,461,845
Less: allowance for loan and lease losses (58,317) (59,798)
Net loans and leases 2,331,072 2,402,047
Goodwill 76,816 76,816
Other intangible assets, net 10,080 11,128
Total assets 3,617,497 3,519,432
Total deposits 2,650,845 2,553,912
Customer repurchase agreements 98,827 91,928
Total stockholders' equity 391,262 392,522
=====================================================================
Quarterly average balance sheets:
Residential mortgage loans $477,955 $481,721
Residential construction loans 150,914 176,811
Commercial mortgage loans 862,658 854,402
Commercial construction loans 216,897 224,229
Commercial loans and leases 341,039 359,820
Consumer loans 408,200 408,843
Total loans and leases 2,457,663 2,505,826
Securities 772,878 536,981
Total earning assets 3,298,923 3,117,590
Total assets 3,549,185 3,375,715
Total interest-bearing liabilities 2,595,303 2,471,762
Noninterest-bearing demand deposits 527,713 476,361
Total deposits 2,581,837 2,431,471
Customer repurchase agreements 93,980 69,212
Stockholders' equity 393,201 391,673
=====================================================================
Capital and credit quality measures:
Average equity to average assets 11.08% 11.60%
Loan and lease loss allowance to loans
and leases 2.44% 2.43%
Nonperforming assets to total assets 4.05% 3.57%
Annualized net charge-offs (recoveries) to
average loans and leases 1.97% 0.22%
=====================================================================
Miscellaneous data:
Net charge-offs (recoveries) $12,095 $1,341
Nonperforming assets:
Non-accrual loans and leases 123,117 110,761
Loans and leases 90 days past due 16,004 9,545
Restructured loans and leases 395 395
Other real estate owned, net 6,829 5,094
Total nonperforming assets 146,345 125,795
=====================================================================
Sandy Spring Bancorp, Inc. and Subsidiaries
Historical Trends in
Quarterly Financial Data (Unaudited) 2008
(Dollars in thousands, ========================================
except per share data) Q4 Q3 Q2 Q1
----------------------------------------
Balance sheets at quarter end:
Residential mortgage loans $457,571 $452,815 $461,000 $459,768
Residential construction
loans 189,249 221,630 199,602 183,690
Commercial mortgage loans 847,452 804,728 752,905 732,692
Commercial construction
loans 223,169 247,930 273,059 256,714
Commercial loans and
leases 366,978 358,097 356,256 354,509
Consumer loans 406,227 397,218 386,126 376,650
Total loans and leases 2,490,646 2,482,418 2,428,948 2,364,023
Less: allowance for
loan and lease losses (50,526) (38,266) (33,435) (27,887)
Net loans and leases 2,440,120 2,444,152 2,395,513 2,336,136
Goodwill 76,248 75,701 78,376 78,111
Other intangible assets, net 12,183 13,286 14,390 15,507
Total assets 3,313,638 3,195,117 3,164,123 3,160,896
Total deposits 2,365,257 2,248,812 2,294,791 2,340,568
Customer repurchase
agreements 75,106 77,630 93,919 101,666
Total stockholders' equity 391,862 319,700 320,218 318,967
=====================================================================
Quarterly average balance
sheets:
Residential mortgage loans $457,956 $463,778 $470,144 $463,597
Residential construction
loans 208,616 210,363 193,822 174,626
Commercial mortgage loans 833,752 779,652 733,905 690,289
Commercial construction
loans 236,176 253,806 261,360 266,098
Commercial loans
and leases 361,731 356,327 359,287 351,862
Consumer loans 400,937 391,640 380,911 378,261
Total loans and leases 2,499,168 2,455,566 2,399,429 2,324,733
Securities 431,858 423,082 431,182 427,819
Total earning assets 2,972,173 2,898,968 2,862,012 2,795,453
Total assets 3,235,432 3,167,145 3,134,440 3,072,428
Total interest-bearing
liabilities 2,405,890 2,363,299 2,344,266 2,311,629
Noninterest-bearing
demand deposits 458,538 453,281 441,330 412,369
Total deposits 2,305,880 2,264,990 2,306,867 2,260,837
Customer repurchase
agreements 84,012 81,158 92,968 94,841
Stockholders' equity 342,639 321,028 320,409 315,755
=====================================================================
Capital and credit
quality measures:
Average equity to
average assets 10.59% 10.14% 10.22% 10.28%
Loan and lease loss
allowance to loans
and leases 2.03% 1.54% 1.38% 1.18%
Nonperforming assets
to total assets 2.18% 2.14% 2.05% 1.48%
Annualized net charge-offs
(recoveries) to
average loans and leases 0.88% 0.28% 0.11% (0.02)%
=====================================================================
Miscellaneous data:
Net charge-offs
(recoveries) $5,531 $1,714 $641 ($129)
Nonperforming assets:
Non-accrual loans and
leases 67,950 64,246 60,373 37,353
Loans and leases 90
days past due 1,038 2,074 2,538 8,244
Restructured loans
and leases 395 395 655 655
Other real estate
owned, net 2,860 1,698 1,352 661
Total nonperforming
assets 72,243 68,413 64,918 46,913
=====================================================================
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
(Dollars in thousands and tax-equivalent)
Three Months Ended June 30,
------------------------------------------------------
2009 2008
-------------------------- --------------------------
Annual- Annual-
ized ized
Average Average
Average Yield/ Average Yield/
Balances Interest Rate Balances Interest Rate
---------- -------- ------ ---------- -------- ------
Assets
Residential
mortgage
loans $ 477,955 $7,040 5.89% $470,144 $7,127 6.06%
Residential
construction
loans 150,914 1,878 4.99 193,822 2,826 5.86
Commercial
mortgage
loans 862,658 13,224 6.15 733,905 12,421 6.81
Commercial
construction
loans 216,897 1,561 2.89 261,360 3,455 5.32
Commercial
loans and
leases 341,039 4,593 5.40 359,287 6,000 6.71
Consumer
loans 408,200 4,023 3.95 380,911 4,989 5.27
---------- -------- ---------- --------
Total loans
and leases 2,457,663 32,319 5.27 2,399,429 36,818 6.16
Securities 772,878 7,428 3.87 431,182 5,913 5.55
Interest-
bearing
deposits
with banks 66,533 43 0.26 4,128 24 2.33
Federal
funds sold 1,849 1 0.18 27,273 151 2.23
---------- -------- ---------- --------
TOTAL
EARNING
ASSETS 3,298,923 39,791 4.84% 2,862,012 42,906 6.03%
-------- --------
Less:
allowance
for loan
and lease
losses (60,859) (28,450)
Cash and due
from banks 44,015 48,929
Premises and
equipment,
net 50,910 53,476
Other assets 216,196 198,473
---------- ----------
Total
assets $3,549,185 $3,134,440
========== ==========
Liabilities
and Stock-
holders'
Equity
Interest-
bearing
demand
deposits $ 254,392 $ 106 0.17% $ 251,190 $ 180 0.29%
Regular
savings
deposits 154,314 66 0.17 159,888 127 0.32
Money market
savings
deposits 813,972 3,406 1.68 684,663 2,683 1.58
Time
deposits 831,446 6,342 3.06 769,796 7,593 3.97
---------- -------- ---------- --------
Total
interest-
bearing
deposits 2,054,124 9,920 1.94 1,865,537 10,583 2.28
Borrowings 541,179 4,300 3.19 478,729 4,143 3.48
---------- -------- ---------- --------
TOTAL
INTEREST-
BEARING
LIABILITIES 2,595,303 14,220 2.20 2,344,266 14,726 2.53
-------- --------
Noninterest-
bearing
demand
deposits 527,713 441,330
Other
liabilities 32,968 28,435
Stockholder's
equity 393,201 320,409
---------- ----------
Total
liabil-
ities and
stock-
holders'
equity $3,549,185 $3,134,440
========== ==========
Net interest
income and
spread 25,571 2.64% 28,180 3.50%
==== ====
Less: tax
equivalent
adjustment 1,123 1,061
-------- --------
Net interest
income 24,448 27,119
======== ========
Interest
income/
earning
assets 4.84% 6.03%
Interest
expense/
earning
assets 1.73 2.07
---- ----
Net
interest
margin 3.11% 3.96%
==== ====
* 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 7.50% (or a combined marginal
federal and state rate of 39.88%) for 2009 and 2008, to increase
tax-exempt interest income to a taxable-equivalent basis. The
annualized taxable-equivalent adjustments utilized in the above
table to compute yields aggregated to $4,524,000 in 2009 and
$4,267,000 in 2008.
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
(Dollars in thousands and tax-equivalent)
Six Months Ended June 30,
------------------------------------------------------
2009 2008
--------------------------- --------------------------
Annual- Annual-
ized ized
Average Average
Average Yield/ Average Yield/
Balances Interest Rate Balances Interest Rate
---------- -------- ------ ---------- -------- ------
Assets
Residential
mortgage
loans $ 479,828 $14,225 5.93% $ 466,870 $14,422 6.18%
Residential
construction
loans 163,791 4,250 5.23 184,224 5,596 6.11
Commercial
mortgage
loans 858,553 26,490 6.22 712,097 24,269 6.85
Commercial
construction
loans 220,542 3,382 3.09 263,729 7,881 6.01
Commercial
loans and
leases 350,377 9,438 5.43 355,575 12,546 7.09
Consumer
loans 408,520 8,047 3.97 379,586 10,669 5.65
---------- -------- ---------- --------
Total loans
and leases 2,481,611 65,832 5.34 2,362,081 75,383 6.41
Securities 655,581 13,604 4.22 429,500 12,082 5.70
Interest-
bearing
deposits
with banks 69,038 89 0.26 5,538 73 2.63
Federal
funds sold 2,527 3 0.22 31,613 430 2.74
---------- -------- ---------- --------
TOTAL EARNING
ASSETS 3,208,757 79,528 5.00% 2,828,732 87,968 6.25%
-------- --------
Less:
allowance
for loan
and lease
losses (57,158) (27,147)
Cash and due
from banks 45,511 49,545
Premises and
equipment,
net 51,158 53,920
Other assets 214,663 198,384
---------- ----------
Total
assets $3,462,931 $3,103,434
========== ==========
Liabilities
and Stock-
holders'
Equity
Interest-
bearing
demand
deposits $ 248,627 $ 227 0.18% $ 246,184 $ 351 0.29%
Regular
savings
deposits 150,945 121 0.16 156,626 247 0.32
Money market
savings
deposits 763,912 5,822 1.54 696,836 7,350 2.12
Time
deposits 841,407 13,205 3.16 757,356 15,657 4.16
---------- -------- ---------- --------
Total
interest-
bearing
deposits 2,004,891 19,375 1.95 1,857,002 23,605 2.56
Borrowings 528,983 8,548 3.26 470,945 8,464 3.61
---------- -------- ---------- --------
TOTAL
INTEREST-
BEARING
LIABILITIES 2,533,874 27,923 2.22 2,327,947 32,069 2.77
-------- --------
Noninterest-
bearing
demand
deposits 502,179 426,850
Other
liabilities 34,436 30,555
Stockholder's
equity 392,442 318,082
---------- ----------
Total
liabilities
and stock-
holders'
equity $3,462,931 $3,103,434
========== ==========
Net
interest
income and
spread 51,605 2.78% 55,899 3.48%
==== ====
Less: tax
equi-
valent
adjust-
ment 2,132 2,201
-------- --------
Net
interest
income 49,473 53,698
======== ========
Interest
income/
earning
assets 5.00% 6.25%
Interest
expense/
earning
assets 1.76 2.28
---- ----
Net
interest
margin 3.24% 3.97%
==== ====
* 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 7.50% (or a combined marginal
federal and state rate of 39.88%) for 2009 and 2008, to increase
tax-exempt interest income to a taxable-equivalent basis. The
annualized taxable-equivalent adjustments utilized in the above
table to compute yields aggregated to $4,299,000 in 2009 and
$4,431,000 in 2008.
Contact:
Sandy Spring Bancorp
Daniel J. Schrider, President & Chief Executive Officer
DSchrider@sandyspringbank.com
Philip J. Mantua, E.V.P. & Chief Financial Officer
PMantua@sandyspringbank.com
1-800-399-5919
www.sandyspringbank.com
17801 Georgia Avenue
Olney, Maryland 20832
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