OLNEY, Md., Oct. 22, 2009 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq:SASR), the parent company of Sandy Spring Bank, today announced a net loss available to common shareholders for the third quarter of 2009 of $14.8 million (($.90) per diluted share) compared to net income of $5.4 million ($.33 per diluted share) for the third quarter of 2008 and a net loss available to common shareholders of $1.5 million (($.09) per diluted share) for the second quarter of 2009. The loss in the third quarter of 2009 was primarily a result of a $34.5 million provision for loan and lease losses.
Net loss available to common shareholders for the nine-month period ending September 30, 2009 totaled $15.2 million (($.93) per diluted share) compared to net income of $19.2 million ($1.17 per diluted share) for the prior year period. The results for the year-to-date include a provision for loan and lease losses totaling $55.7 million for the first nine months of 2009 and an FDIC special assessment charge of $1.7 million which was recognized in the second quarter of 2009.
"Our results for the quarter declined largely due to a higher provision for loan losses. The main drivers of the higher reserve were: increased non-performing loans as a result of risk-rating downgrades to a combination of previously identified problem credits plus a few newly identified credits; reserve adjustments based on historical experience; and a higher level of overall charge-offs, primarily related to our residential real estate development portfolio. This is logical as we move from the earlier phase where we were focused on identifying problem credits to aggressively managing these credits toward their ultimate resolution," said Daniel J. Schrider, president and chief executive officer.
"Total loan balances continued to decline for the first nine months of 2009 compared to 2008 due to soft demand and more conservative underwriting standards. Residential mortgage lending continues to be a bright spot as we closed over $320 million in residential mortgage loans during the first nine months of the year compared to $197 million in the first nine months of last year.
"We have retained a large majority of the deposit growth we experienced earlier in the year. This resulted from our 'high-touch' strategy to capitalize on market disruption opportunities resulting from several recent local mergers. Our efforts have produced new multi-product customer relationships that we plan to rely upon for the long term to fund future loan growth as the economy recovers.
"Additionally, our investment portfolio has grown to nearly $1 billion as we have prudently invested the proceeds of our proactively acquired deposit growth primarily into U. S. government agency instruments. Through conservative and careful asset management, we have experienced no realized losses in the portfolio during the recent economic downturn," said Schrider.
Third Quarter Highlights:
* The provision for loan and lease losses totaled $34.5 million for
the quarter compared to $6.5 million for the third quarter of
2008 and $10.6 million for the second 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 3.27% for the third quarter compared
to 4.02% for the third quarter of 2008 and 3.11% for the second
quarter of 2009.
* Noninterest expenses increased 5% for the quarter compared to the
third quarter of 2008 and decreased 1% versus the second quarter
of 2009. Excluding the FDIC special assessment charge of $1.7
million in the second quarter, noninterest expenses increased 5%
compared to the second quarter of 2009.
* Customer funding sources, comprised of deposits and other
short-term borrowings from core customers, increased 19% compared
to the balance at September 30, 2008, and also increased 1% over
the balance at June 30, 2009. These increases were due primarily
to growth in the Company's Premier money market savings product
and growth in noninterest-bearing deposits.
Review of Balance Sheet and Credit Quality
Comparing September 30, 2009 balances to September 30, 2008, total assets increased 13% to $3.6 billion. Asset growth was reflected primarily in increases of 135% in investments and 18% in cash and cash equivalents. This growth was due mainly to a 19% increase in deposits. Total loans and leases decreased 6% to $2.3 billion compared to the prior year. This decrease in loans was due mainly to a net 15% decrease in residential mortgage and residential construction loans. Total loans decreased 2% compared to the second quarter of 2009.
Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 19% to $2.8 billion at September 30, 2009 compared to the prior year. Such customer funding sources also increased 1% compared to the second quarter of 2009. These increases were due primarily to growth resulting from the Company's Premier money market account as well as growth in noninterest-bearing deposits.
Stockholders' equity totaled $380.6 million at September 30, 2009, and represented 10.5% of total assets, compared to 10.0% at September 30, 2008. At September 30, 2009 the Company had a total risk-based capital ratio of 13.23%, a tier 1 risk-based capital ratio of 11.96% and a tier 1 leverage ratio of 9.31% 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 $34.5 million for the third quarter of 2009 compared to $6.5 million for the third quarter of 2008 and $10.6 million for the second 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 $29.8 million for the third quarter of 2009 compared to net charge-offs of $1.7 million for the third quarter of 2008 and net charge-offs of $12.1 million for the second quarter of 2009. The allowance for loan and lease losses represented 2.70% of outstanding loans and leases and 44% of non-performing loans at September 30, 2009 compared to 2.44% of outstanding loans and leases and 42% of non-performing loans at June 30, 2009 and 1.54% of outstanding loans and leases and 57% of non-performing loans at September 30, 2008.
Non-performing assets totaled $150.2 million at September 30, 2009 compared to $68.4 million at September 30, 2008 and $146.3 million at June 30, 2009. The increase over the prior year was due primarily to $80.9 million in problem residential real estate development loans which was somewhat offset by charge-offs on existing credits. The increase over the second quarter of 2009 was due primarily to the net effect of adding existing problem credits to nonperforming status.
Income Statement Review
Comparing the third quarter of 2009 and 2008, net interest income decreased by $1.7 million, or 6%, 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 3.27% in 2009 from 4.02% in 2008.
Noninterest income decreased 2% to $10.7 million in the third quarter of 2009 as compared to $10.9 million in the third quarter of 2008. Service charges on deposit accounts decreased $0.4 million or 13% due primarily to lower overdraft fees. Fees on sales of investment products decreased $0.1 million or 10% compared to the third quarter of 2008 due primarily to a decline in assets under management. In addition, insurance agency commissions decreased $0.2 million or 18% due to the overall effect of the current economy. Other noninterest income also decreased $0.2 million or 12% compared to the third quarter of 2008 due largely to losses on sales of other real estate owned. These decreases were somewhat offset by an increase in gains on sales of mortgage loans of $0.6 million or 155% due largely to higher mortgage refinancing volumes reflecting market conditions.
Noninterest expenses were $26.6 million in the third quarter of 2009 compared to $25.3 million in the third quarter of 2008, an increase of $1.3 million or 5%. This increase was due in large part to an increase of $0.7 million in FDIC insurance expense resulting primarily from higher assessment rates and increased deposit balances. Salaries and benefits expenses increased $2.5 million or 21% due largely to a pre-tax pension credit recognized in the third quarter of 2008. Excluding this credit, salaries and benefits expenses increased $1.0 million or 7%. Occupancy and equipment expenses decreased $0.1 million or 3% compared to the third quarter of 2008. Other noninterest expenses increased $0.7 million or 19% due primarily to higher legal fees necessary to manage nonperforming loan credits and to losses on valuation of loan swaps.
Comparing the first nine months of 2009 and 2008, net interest income decreased by $5.9 million, or 7% 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 3.25% in 2009 from 3.99% in 2008.
Noninterest income decreased 5% to $33.7 million for the first nine months of 2009 as compared to $35.3 million in 2008. Service charges on deposit accounts decreased $0.9 million or 10% due primarily to lower overdraft fees while insurance agency commissions decreased $0.6 million or 12%. Fees on sales of investment products decreased $0.5 million or 19% and trust and investment management fees declined $0.2 million or 3%, 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 $1.0 million or 59% due largely to higher mortgage refinancing volumes reflecting market conditions. Other noninterest income also increased $0.1 million or 2% compared to 2008.
Noninterest expenses were $77.7 million for the first nine months of 2009 compared to $74.9 million in 2008, an increase of $2.8 million or 4%. This increase was due primarily to an increase of $3.7 million in FDIC insurance expense which includes a one time special assessment in the second quarter by the FDIC of $1.7 million. Excluding the 2009 FDIC special assessment, a $2.3 million goodwill impairment charge and a $1.5 million pre-tax pension credit in 2008, noninterest expenses increased $1.9 million or 3% over 2008. Salaries and benefits expenses increased $1.7 million or 4%, while marketing expenses decreased $0.1 million or 8% and expenses for outside data services decreased $0.6 million or 17% compared to the first nine months of 2008.
Conference Call
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. Participants may call 800-765-0709. 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) November 21, 2009. A telephone voice replay will also be available during that same time period at 888-203-1112. Please use pass code #7548411 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 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 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 Three Months Ended Nine Months Ended
thousands, September 30, September 30,
except per ------------------- % ------------------- %
share data) 2009 2008 Change 2009 2008 Change
----------- ------- ------- ------ ------- ------- ------
Profitability for the period:
Net interest
income $26,402 $28,087 (6)% $75,875 $81,785 (7)%
Provision
for loan
and lease
losses 34,450 6,545 -- 55,678 15,401 --
Non-
interest
income 10,662 10,879 (2) 33,666 35,270 (5)
Non-
interest
expenses 26,567 25,267 5 77,675 74,856 4
Income
(loss)
before
income
taxes (23,953) 7,154 -- (23,812) 26,798 (189)
Net
income
(loss) (13,574) 5,359 -- (11,637) 19,215 (161)
Net
income
(loss)
available
to common
stock-
holders $(14,779) $ 5,359 -- $(15,244) $19,215 (179)
Return on
average
assets(1) (1.62)% 0.67% (0.58)% 0.82%
Return on
average
common
equity(1) (19.01)% 6.64% (6.59)% 8.04%
Net
interest
margin 3.27 % 4.02% 3.25 % 3.99%
Efficiency
ratio
- GAAP* 71.68 % 64.84% 70.91 % 63.95%
Efficiency
ratio -
Non-GAAP* 66.49 % 58.27% 66.07 % 59.06%
Per share
data:
Basic net
income
(loss) $ (0.83) $ 0.33 --% $(0.71) $ 1.18 (160)%
Basic net
income
(loss)
per
common
share (0.90) 0.33 -- (0.93) 1.18 (179)
Diluted
net
income
(loss) (0.83) 0.33 -- (0.71) 1.17 (161)
Diluted
net
income
(loss)
per
common
share (0.90) 0.33 -- (0.93) 1.17 (179)
Dividends
declared
per
common
share 0.12 0.24 (50) 0.36 0.72 (50)
Book
value
per
common
share 18.25 19.51 (6) 18.25 19.51 (6)
Average
fully
diluted
shares 16,496,480 16,418,588 16,438,691 16,419,180
At period-end:
Assets $3,632,391 $3,195,117 14% $3,632,391 $3,195,117 14%
Total
loans and
leases 2,334,282 2,482,418 (6) 2,334,282 2,482,418 (6)
Investment
securities 980,446 417,935 135 980,446 417,935 135
Deposits 2,683,487 2,248,812 19 2,683,487 2,248,812 19
Stock-
holders'
equity 380,571 319,700 19 380,571 319,700 19
Capital
ratios:
Tier 1
leverage 9.31% 8.76% 9.31% 8.76%
Tier 1
capital
to risk-
weighted
assets 11.96% 9.73% 11.96% 9.73%
Total
regulatory
capital
to risk-
weighted
assets 13.23% 10.98% 13.23% 10.98%
Tangible
common
equity to
tangible
assets** 6.07% 7.55% 6.07% 7.55%
Average
equity to
average
assets 10.79% 10.14% 11.15% 10.21%
Credit
quality
ratios:
Allowance
for loan
and lease
losses to
loans and
leases 2.70% 1.54% 2.70% 1.54%
Non-
performing
loans
to total
loans 6.14% 2.69% 6.14% 2.69%
Non-
performing
assets
to total
assets 4.14% 2.14% 4.14% 2.14%
Annualized
net
charge
-offs to
average
loans and
leases 5.00% 0.28% 2.38% 0.12%
(1) Calculation utilizes net income available to common stockholders
* 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, the goodwill impairment
loss and the pension prior servcie credit 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.
**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 Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
(Dollars in
thousands) 2009 2008 2009 2008
------------ ----------- ----------- ----------- -----------
GAAP
efficiency
ratio:
Noninterest
expenses $ 26,567 $ 25,267 $ 77,675 $ 74,856
Net interest
income plus
noninterest
income 37,064 38,966 109,541 117,055
Efficiency
ratio-GAAP 71.68% 64.84% 70.91% 63.95%
Non-GAAP
efficiency
ratio:
Noninterest
expenses $ 26,567 $ 25,267 $ 77,675 $ 74,856
Less non-
GAAP
adjustment:
Amortization
of
intangible
assets 1,048 1,103 3,150 3,344
Goodwill
impairment
loss -- 2,250 -- 2,250
Plus non
-GAAP
adjustment:
Pension
prior
service
credit -- 1,473 -- 1,473
----------- ----------- ----------- -----------
Noninterest
expenses
as
adjusted $ 25,519 $ 23,387 $ 74,525 $ 70,735
=========== =========== =========== ===========
Net interest
income plus
noninterest
income $ 37,064 $ 38,966 $ 109,541 $ 117,055
Plus non
-GAAP
adjustment:
Tax-
equivalent
income 1,331 1,180 3,463 3,381
Less non
-GAAP
adjustments:
Securities
gains
(losses) 15 9 207 662
----------- ----------- ----------- -----------
Net interest
income plus
noninterest
income - as
adjusted $ 38,380 $ 40,137 $ 112,797 $ 119,774
=========== =========== =========== ===========
Efficiency
ratio-
Non-GAAP 66.49% 58.27% 66.07% 59.06%
Tangible
common
equity
ratio:
Total
stock-
holders'
equity $ 380,571 $ 319,700 $ 380,571 $ 319,700
Accumulated
other
compre-
hensive
loss 310 3,875 310 3,875
Goodwill (76,816) (75,701) (76,816) (75,701)
Other
intangible
assets, net (9,033) (13,286) (9,033) (13,286)
Preferred
stock (79,930) -- (79,930) --
----------- ----------- ----------- -----------
Tangible
common
equity $ 215,102 $ 234,588 $ 215,102 $ 234,588
=========== =========== =========== ===========
Total assets $ 3,632,391 $ 3,195,117 $ 3,632,391 $ 3,195,117
Goodwill (76,816) (75,701) (76,816) (75,701)
Other
intangible
assets, net (9,033) (13,286) (9,033) (13,286)
----------- ----------- ----------- -----------
Tangible
assets $ 3,546,542 $ 3,106,130 $ 3,546,542 $ 3,106,130
=========== =========== =========== ===========
Tangible
common
equity ratio 6.07% 7.55% 6.07% 7.55%
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
------------------------ ----------
(Dollars in thousands) 2009 2008 2008
---------------------- ---------- ---------- ----------
Assets
Cash and due from banks $ 42,079 $ 55,321 $ 44,738
Federal funds sold 1,271 19,712 1,110
Interest-bearing
deposits with banks 45,660 483 59,381
---------- ---------- ----------
Cash and cash
equivalents 89,010 75,516 105,229
Residential mortgage
loans held for sale
(at fair value) 10,926 4,541 11,391
Investments
available-for-sale (at
fair value) 807,145 206,898 291,727
Investments
held-to-maturity --
fair value of $146,800,
$181,734 and $175,908,
respectively 140,528 178,690 171,618
Other equity securities 32,773 32,347 29,146
Total loans and leases 2,334,282 2,482,418 2,490,646
Less: allowance for
loan and lease losses (62,937) (38,266) (50,526)
---------- ---------- ----------
Net loans and leases 2,271,345 2,444,152 2,440,120
Premises and equipment,
net 49,827 52,441 51,410
Other real estate owned 6,873 1,698 2,860
Accrued interest
receivable 13,325 12,491 11,810
Goodwill 76,816 75,701 76,248
Other intangible assets,
net 9,033 13,286 12,183
Other assets 124,790 97,356 109,896
---------- ---------- ----------
Total assets $3,632,391 $3,195,117 $3,313,638
========== ========== ==========
Liabilities
Noninterest-bearing
deposits $ 573,601 $ 468,101 $ 461,517
Interest-bearing
deposits 2,109,886 1,780,711 1,903,740
---------- ---------- ----------
Total deposits 2,683,487 2,248,812 2,365,257
Short-term borrowings 491,702 484,595 421,074
Long-term borrowings 4,263 76,828 66,584
Subordinated debentures 35,000 35,000 35,000
Accrued interest payable
and other liabilities 37,368 30,182 33,861
---------- ---------- ----------
Total liabilities 3,251,820 2,875,417 2,921,776
Stockholders' Equity
Preferred stock-par
value $1.00
(liquidation
preference of $1,000
per
share) shares authorized
83,094; issued and
outstanding 83,094 (net
of discount of $3,164,
$0 and $3,654,
respectively) 79,930 -- 79,440
Common stock -- par value
$1.00; shares authorized
49,916,906, 50,000,000
and 49,916,906; shares
issued and outstanding
16,470,078, 16,383,671
and 16,398,523,
respectively 16,470 16,384 16,399
Warrants 3,699 -- 3,699
Additional paid in capital 87,572 85,065 85,486
Retained earnings 193,210 222,126 214,410
Accumulated other
comprehensive loss (310) (3,875) (7,572)
---------- ---------- ----------
Total stockholders'
equity 380,571 319,700 391,862
---------- ---------- ----------
Total liabilities and
stockholders' equity $3,632,391 $3,195,117 $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)
Three Months Ended Nine Months Ended
September 30, September 30,
(Dollars in thousands, ------------------- ---------------------
except per share data) 2009 2008 2009 2008
----------------------- -------- --------- --------- --------
Interest Income:
Interest and fees on
loans and leases $ 31,280 $ 37,263 $ 96,579 $ 112,428
Interest on loans held
for sale 121 100 654 318
Interest on deposits
with banks 23 6 112 79
Interest and dividends
on securities:
Taxable 5,947 3,171 13,673 7,749
Exempt from federal
income taxes 1,814 1,409 5,560 6,712
Interest on federal
funds sold -- 99 3 529
--------- --------- --------- --------
Total interest income 39,185 42,048 116,581 127,815
Interest Expense:
Interest on deposits 8,743 9,325 28,118 32,930
Interest on short-term
borrowings 3,697 3,544 10,757 9,886
Interest on long-term
borrowings 343 1,092 1,831 3,214
--------- --------- --------- --------
Total interest expense 12,783 13,961 40,706 46,030
--------- --------- --------- --------
Net interest income 26,402 28,087 75,875 81,785
Provision for loan
and lease losses 34,450 6,545 55,678 15,401
--------- --------- --------- --------
Net interest income
after provision for
loan and lease
losses (8,048) 21,542 20,197 66,384
Noninterest Income:
Securities gains 15 9 207 662
Service charges on
deposit accounts 2,823 3,249 8,537 9,481
Gains on sales of
mortgage loans 1,011 397 2,819 1,772
Fees on sales of
investment products 740 820 2,062 2,547
Trust and investment
management fees 2,406 2,380 7,063 7,282
Insurance agency
commissions 1,048 1,282 4,138 4,725
Income from bank owned
life insurance 740 742 2,176 2,183
Visa check fees 758 727 2,144 2,184
Other income 1,121 1,273 4,520 4,434
--------- --------- --------- --------
Total noninterest
income 10,662 10,879 33,666 35,270
Noninterest Expenses:
Salaries and employee
benefits 14,411 11,949 41,319 39,574
Occupancy expense of
premises 2,685 2,732 8,008 8,150
Equipment expenses 1,444 1,515 4,332 4,514
Marketing 484 526 1,389 1,511
Outside data services 987 1,116 2,754 3,319
FDIC insurance 1,219 480 4,968 1,293
Amortization of
intangible assets 1,048 1,103 3,150 3,344
Goodwill impairment
loss -- 2,250 -- 2,250
Other expenses 4,289 3,596 11,755 10,901
--------- --------- --------- --------
Total noninterest
expenses 26,567 25,267 77,675 74,856
--------- --------- --------- --------
Income (loss) before
income taxes (23,953) 7,154 (23,812) 26,798
Income tax expense
(benefit) (10,379) 1,795 (12,175) 7,583
--------- --------- --------- --------
Net income (loss) $ (13,574) $ 5,359 $ (11,637) $ 19,215
Preferred stock
dividends and
discount accretion 1,205 -- 3,607 --
--------- --------- --------- --------
Net income (loss)
available to common
stockholders $ (14,779) $ 5,359 $ (15,244) $ 19,215
========== ========= ========== ========
Per Share Amounts:
Basic net income (loss)
per share $ (0.83) $ 0.33 $ (0.71) $ 1.18
Basic net income (loss)
per common share (0.90) 0.33 (0.93) 1.18
Diluted net income (loss)
per share (0.83) 0.33 (0.71) 1.17
Diluted net income (loss)
per common share (0.90) 0.33 (0.93) 1.17
Dividends declared per
share 0.12 0.24 0.36 0.72
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
2009
-----------------------------------
(Dollars in
thousands, except
per share data) Q3 Q2 Q1
-----------------------------------
Profitability for
the quarter:
Tax-equivalent
interest income $ 40,516 $ 39,791 $ 39,737
Interest expense 12,783 14,220 13,703
Tax-equivalent net
interest income 27,733 25,571 26,034
Tax-equivalent
adjustment 1,331 1,123 1,009
Provision for loan
and lease losses 34,450 10,615 10,613
Noninterest income 10,662 11,030 11,974
Noninterest expenses 26,567 26,858 24,250
Income (loss) before
income taxes (23,953) (1,995) 2,136
Income tax expense
(benefit) (10,379) (1,715) (81)
Net Income (loss) (13,574) (280) 2,217
Net Income (loss)
available to common
stockholders $ (14,779) $ (1,482) $ 1,017
===================================
Financial ratios:
Return on average
assets (1.62)% (0.17)% 0.12%
Return on average
common equity (19.01)% (1.90)% 1.32%
Net interest margin 3.27% 3.11% 3.39%
Efficiency ratio -
GAAP * 71.68% 75.70% 65.54%
Efficiency ratio -
Non-GAAP * 66.49% 70.58% 61.29%
===================================
Per share data:
Basic net income
(loss) per share $ (0.83) $ (0.02) $ 0.14
Basic net income
(loss) per common
share (0.90) (0.09) 0.06
Diluted net income
(loss) per share (0.83) (0.02) 0.13
Diluted net income
(loss) per common
share (0.90) (0.09) 0.06
Dividends declared
per common share 0.12 0.12 0.12
Book value per
common share 18.25 18.92 19.06
Average fully
diluted shares 16,496,480 16,444,252 16,433,788 1
===================================
Noninterest income:
Securities gains $ 15 $ 30 $ 162
Service charges on
deposit accounts 2,823 2,851 2,863
Gains on sales of
mortgage loans 1,011 786 1,022
Fees on sales of
investment products 740 622 700
Trust and investment
management fees 2,406 2,370 2,287
Insurance agency
commissions 1,048 1,040 2,050
Income from bank
owned life
insurance 740 725 711
Visa check fees 758 748 638
Other income 1,121 1,858 1,541
Total noninterest
income $ 10,662 $ 11,030 $ 11,974
===================================
Noninterest expense:
Salaries and
employee benefits $ 14,411 $ 13,704 $ 13,204
Occupancy expense of
premises 2,685 2,548 2,775
Equipment expenses 1,444 1,374 1,514
Marketing 484 485 420
Outside data
services 987 961 806
FDIC insurance 1,219 2,790 959
Amortization of
intangible assets 1,048 1,047 1,055
Goodwill impairment
loss -- -- --
Other expenses 4,289 3,949 3,517
Total noninterest
expense $ 26,567 $ 26,858 $ 24,250
===================================
2008
-----------------------------------------------
(Dollars in
thousands, 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
stockholders $ (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 16,427,213 16,407,778
===============================================
Noninterest income:
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 noninterest
income $ 10,973 $ 10,879 $ 11,695 $ 12,696
===============================================
Noninterest expense:
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
loss 1,909 2,250 -- --
Other expenses 4,362 3,596 3,738 3,567
Total noninterest
expense $ 27,233 $ 25,267 $ 24,886 $ 24,703
===============================================
* 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, the goodwill impairment loss
and the pension prior servcie credit 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
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA (Unaudited)
2009
----------------------------------
(Dollars in thousands) Q3 Q2 Q1
--------------------------------- ----------------------------------
Balance sheets at quarter end:
Residential mortgage loans $ 455,312 $ 450,500 $ 461,359
Residential construction loans 115,258 138,923 163,861
Commercial mortgage loans 873,438 862,315 859,882
Commercial construction loans 174,052 199,278 222,805
Commercial loans and leases 314,599 333,025 342,870
Consumer loans 401,623 405,348 411,068
Total loans and leases 2,334,282 2,389,389 2,461,845
Less: allowance for loan and
lease losses (62,937) (58,317) (59,798)
Net loans and leases 2,271,345 2,331,072 2,402,047
Goodwill 76,816 76,816 76,816
Other intangible assets, net 9,033 10,080 11,128
Total assets 3,632,391 3,617,497 3,519,432
Total deposits 2,683,487 2,650,845 2,553,912
Customer repurchase agreements 84,138 98,827 91,928
Total stockholders' equity 380,571 391,262 392,522
================================= ==================================
Quarterly average balance sheets:
Residential mortgage loans $ 460,772 $ 477,955 $ 481,721
Residential construction loans 123,892 150,914 176,811
Commercial mortgage loans 871,831 862,658 854,402
Commercial construction loans 191,021 216,897 224,229
Commercial loans and leases 327,569 341,039 359,820
Consumer loans 401,930 408,200 408,843
Total loans and leases 2,377,015 2,457,663 2,505,826
Securities 956,350 772,878 536,981
Total earning assets 3,370,823 3,298,923 3,117,590
Total assets 3,627,617 3,549,185 3,375,715
Total interest-bearing
liabilities 2,671,944 2,595,303 2,471,762
Noninterest-bearing demand
deposits 532,462 527,713 476,361
Total deposits 2,661,108 2,581,837 2,431,471
Customer repurchase agreements 95,310 93,980 69,212
Total stockholders' equity 391,571 393,201 391,673
================================= ==================================
Capital and credit quality
measures:
Average equity to average assets 10.79% 11.08% 11.60%
Loan and lease loss allowance to
loans and leases 2.70% 2.44% 2.43%
Nonperforming loans to total loans 6.14% 5.84% 4.90%
Nonperforming assets to total
assets 4.14% 4.05% 3.57%
Annualized net charge-offs
(recoveries) to average loans
and leases 5.00% 1.97% 0.22%
Net charge-offs (recoveries) $ 29,831 $ 12,095 $ 1,341
Nonperforming assets:
Non-accrual loans and leases $ 127,473 $ 123,117 $ 110,761
Loans and leases 90 days past
due 15,491 16,004 9,545
Restructured loans and leases 395 395 395
Other real estate owned, net 6,873 6,829 5,094
Total nonperforming assets $ 150,232 $ 146,345 $ 125,795
================================= ==================================
2008
--------------------------------------------
(Dollars in thousands) 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
Total 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 loans
to total loans 2.79% 2.69% 2.62% 1.96%
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%
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)
Three Months Ended September 30,
---------------------------------------------------
2009 2008
-------------------------- ------------------------
Annualized Annualized
(Dollars in Average Average
thousands and Average Yield/ Average Yield/
tax-equivalent) Balances Interest Rate Balances Interest Rate
--------------- ---------- -------- ------ ---------- -------- -----
Assets
Residential
mortgage loans $ 460,772 $ 6,795 5.90% $ 463,778 $ 7,150 6.17%
Residential
construction
loans 123,892 1,583 5.07 210,363 3,132 5.92
Commercial
mortgage loans 871,831 13,290 6.05 779,652 12,936 6.60
Commercial
construction
loans 191,021 1,330 2.76 253,806 3,260 5.11
Commercial
loans and
leases 327,569 4,428 5.37 356,327 5,822 6.51
Consumer loans 401,930 3,975 3.94 391,640 5,063 5.14
---------- -------- ---------- --------
Total loans
and leases 2,377,015 31,401 5.25 2,455,566 37,363 6.16
Securities 956,350 9,092 3.76 423,082 5,760 5.38
Interest-
bearing
deposits with
banks 35,880 23 0.25 1,311 6 1.91
Federal funds
sold 1,578 -- 0.17 19,009 99 2.07
---------- -------- ---------- --------
TOTAL EARNING
ASSETS 3,370,823 40,516 4.77 2,898,968 43,228 5.93
-------- --------
Less: allowance
for loan and
lease losses (60,342) (34,897)
Cash and due
from banks 44,500 49,860
Premises and
equipment, net 50,404 52,912
Other assets 222,232 200,302
---------- ----------
Total assets $3,627,617 $3,167,145
========== ==========
Liabilities and
Stockholders'
Equity
Interest-
bearing demand
deposits $ 256,432 99 0.15% $ 242,488 177 0.29%
Regular savings
deposits 153,903 56 0.14 155,039 118 0.30
Money market
savings
deposits 899,017 2,868 1.27 647,258 2,410 1.48
Time deposits 819,294 5,720 2.77 766,924 6,620 3.43
---------- -------- ---------- --------
Total
interest-
bearing
deposits 2,128,646 8,743 1.63 11,811,709 9,325 2.05
Borrowings 543,298 4,040 2.95 551,590 4,636 3.35
---------- -------- ---------- --------
TOTAL INTEREST-
BEARING
LIABILITIES 2,671,944 12,783 1.90 2,363,299 13,961 2.35
-------- ---- -------- ----
Noninterest-
bearing demand
deposits 532,462 453,281
Other
liabilities 31,640 29,537
Stockholders'
equity 391,571 321,028
---------- ----------
Total
liabilities
and
stockholders'
equity $3,627,617 $3,167,145
========== ==========
Net interest
income and
spread $ 27,733 2.87% $29,267 3.58%
==== ====
Less: tax
equivalent
adjustment 1,331 1,180
-------- --------
Net interest
income $ 26,402 $28,087
======== ========
Interest income
/earning assets 4.77% 5.93%
Interest
expense/
earning assets 1.50 1.91
---- ----
Net interest
margin 3.27% 4.02%
==== ====
* 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 8.25% 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 $5.4 million in 2009 and
$4.5 million in 2008
Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Unaudited)
Nine Months Ended September 30,
-----------------------------------------------------
2009 2008
------------------------- --------------------------
(Dollars in Annualized Annualized
thousands and Average Average
tax- Average Yield/ Average Yield/
equivalent) Balances Interest Rate Balances Interest Rate
-------------- ---------- -------- ----- ---------- -------- ------
Assets
Residential
mortgage
loans $ 473,406 $ 21,020 5.92% $ 465,832 $ 21,571 6.17%
Residential
construction
loans 150,345 5,833 5.19 193,001 8,728 6.04
Commercial
mortgage
loans 863,028 39,780 6.16 734,780 37,205 6.76
Commercial
construction
loans 210,594 4,712 2.99 260,397 11,141 5.72
Commercial
loans and
leases 342,691 13,866 5.41 355,827 18,369 6.89
Consumer loans 406,299 12,022 3.97 383,633 15,732 5.48
---------- -------- ---------- --------
Total loans
and leases 2,446,363 97,233 5.31 2,393,470 112,746 6.29
Securities 756,939 22,696 4.02 427,345 17,842 5.59
Interest-
bearing
deposits with
banks 57,864 112 0.26 4,119 79 2.56
Federal funds
sold 2,207 3 0.21 27,381 529 2.58
---------- -------- ---------- --------
TOTAL EARNING
ASSETS 3,263,373 120,044 4.92 2,852,315 131,196 6.14
-------- --------
Less: allowance
for loan and
lease losses (58,231) (29,750)
Cash and due
from banks 45,170 49,651
Premises and
equipment, net 50,904 53,582
Other assets 217,214 198,930
---------- ----------
Total
assets $3,518,430 $3,124,728
========== ==========
Liabilities
and
Stockholders'
Equity
Interest-
bearing demand
deposits $ 251,257 326 0.17% $ 244,943 528 0.29%
Regular savings
deposits 151,942 177 0.16 156,093 365 0.31
Money market
savings
deposits 809,442 8,690 1.44 680,189 9,760 1.92
Time deposits 833,955 18,925 3.03 760,569 22,277 3.91
---------- -------- ---------- --------
Total
interest-
bearing
deposits 2,046,596 28,118 1.84 1,841,794 32,930 2.39
Borrowings 533,807 12,588 3.15 498,023 13,100 3.51
---------- -------- ---------- --------
TOTAL INTEREST-
BEARING
LIABILITIES 2,580,403 40,706 2.11 2,339,817 46,030 2.63
-------- ----- -------- ------
Noninterest-
bearing demand
deposits 512,384 435,725
Other
liabilities 33,494 30,115
Stockholders'
equity 392,149 319,071
---------- ----------
Total
liabilities
and
stockholders'
equity $3,518,430 $3,124,728
========== ==========
Net interest
income and
spread $ 79,338 2.81% $ 85,166 3.51%
===== ======
Less: tax
equivalent
adjustment 3,463 3,381
-------- --------
Net interest
income $ 75,875 $ 81,785
======== ========
Interest
income/
earning assets 4.92% 6.14%
Interest
expense/
earning assets 1.67 2.15
----- ------
Net interest
margin 3.25% 3.99%
===== ======
* 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 8.25% 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 $4.6 million in 2009 and
$4.5 million in 2008