Sandy Spring Bancorp Reports First Quarter Results Including Merger Related Costs

Sandy Spring Bancorp Reports First Quarter Results Including Merger Related Costs

OLNEY, Md., April 17 /PRNewswire-FirstCall/ -- Sandy Spring Bancorp, Inc., (NASDAQ:SASR) the parent company of Sandy Spring Bank, today announced net income for the first quarter of 2007 of $7.5 million ($.49 per diluted share) compared to $8.3 million ($.56 per diluted share) for the first quarter of 2006, a decrease of 10%. Net income for the quarter includes after-tax merger costs of $.4 million ($.02 per diluted share). The results of operations for Potomac Bank of Virginia ("Potomac") are included subsequent to the close of business on February 15, 2007. On the date of purchase, Potomac had total loans of $198 million, total earning assets of $234 million, and total deposits of $197 million.

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"On the plus side, we closed our merger with Potomac in mid-quarter, enabling our entry into northern Virginia for the first time in our history. The transaction should be accretive within the first full year of combined operations, but merger expenses had a negative impact on net income this quarter," said Hunter R. Hollar, President and Chief Executive Officer. "The net interest margin declined to 4.07% from 4.14% at December 31, 2006 and 4.35% a year ago. Competition for demand deposits is tough across all of our markets. We are doing a good job growing loans and improving loan yields, yet rising deposit rates are substantially offsetting these efforts. Credit quality continues to be excellent with net charge-offs of less than one-tenth of 1% of total loans. We hope that as credit quality concerns loom across the banking industry, our stellar record will not be lost on investors."

"Growth in noninterest income from sales of investment products and in trust and investment management fees continued to be favorable, reflecting our focus on the fee businesses in this rate environment," said Hollar.

Sandy Spring Bancorp's return on average stockholders' equity was 11.96% for the first quarter of 2007, compared to 15.26% for the same period in the prior year. Return on average assets for the first quarter of 2007 was 1.12%, compared to 1.36% for the first quarter of 2006.

Comparing March 31, 2007 balances to March 31, 2006, total assets increased 18% to $2.9 billion due mainly to the acquisition of Potomac Bank of Virginia during the first quarter together with strong growth in the commercial loan portfolio. Total loans and leases increased 17% to $2.0 billion compared to the prior year. The Potomac acquisition accounted for approximately 71% of the year-over-year loan growth. Excluding the Potomac acquisition, the loan portfolio increased 5% over the first quarter of the prior year. This was comprised mainly of an 18% increase in commercial loans which was somewhat offset by a decline in mortgage loans due to a sale of loans in the third quarter of 2006. Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 18% to $2.4 billion at March 31, 2007. Again, over 58% of the growth in such funding sources was due to the Potomac acquisition. Excluding the Potomac acquisition, customer funding sources increased 8% over the first quarter of the prior year. Stockholders' equity totaled $275.3 million at quarter-end, and represented 9.3% of total assets, compared to 9.0% at March 31, 2006. The provision for loan and lease losses totaled $0.8 million for the first quarter of 2007 compared to $1.0 million for the first quarter of 2006. The allowance for loan and lease losses represented 1.09% of outstanding loans at March 31, 2007.

The Company's management will host a conference call to discuss its first 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 http://www.sandyspringbank.com/.

DETAILED REVIEW OF FINANCIAL RESULTS

Comparing the first quarter of 2007 and 2006, net interest income increased by $0.8 million, or 4%, due primarily to continued growth in the loan portfolio and higher loan yields which were largely offset by increased rates on interest-bearing deposits and an increased use of time deposits, as noninterest bearing deposits continued to decrease. These factors produced a net interest margin decrease to 4.07% in 2007 from 4.35% in 2006.

Noninterest income increased to $10.9 million in the first quarter of 2007 as compared to $9.8 million in 2006, an increase of 11%. Insurance agency commissions increased 28% over 2006 due to higher premiums from commercial property and casualty and physicians liability lines. Service charges on deposit accounts increased 25% while fees on sales of investment products increased 11% over the prior year period due to increased sales volumes. Trust and investment fees increased 8% due mainly to growth in assets under management. Gains on sales of mortgage loans decreased due to market conditions.

Noninterest expenses were $23.6 million in the first quarter of 2007 compared to $20.4 million in 2006, an increase of $3.2 million or 16%. This increase was driven mainly by $.6 million in merger costs together with operating expense of Potomac, which combined to add $1.2 million in expenses for the quarter. Excluding expenses related to Potomac, the increase in noninterest expenses was due primarily to a 53% increase in marketing costs due to the timing of campaigns in the first quarter together with increases in salaries and consulting expenses.

About Sandy Spring Bancorp/Sandy Spring Bank

With $2.9 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 second 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 38 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 http://www.sandyspringbank.com/ to locate an ATM near you or for more information about Sandy Spring Bank.

Forward-Looking Statements: Sandy Spring Bancorp makes forward-looking statements in this News Release that are subject to risks and uncertainties. These forward-looking statements include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan and lease losses; assessments of market risk; and statements of the ability to achieve financial and other goals. These forward-looking statements are subject to significant uncertainties because they are based upon or are affected by: management's estimates and projections of future interest rates, market behavior, and other economic conditions; future laws and regulations; and a variety of other matters which, by their nature, are subject to significant uncertainties. Because of these uncertainties, Sandy Spring Bancorp's actual future results may differ materially from those indicated. In addition, the Company's past results of operations do not necessarily indicate its future results.

Sandy Spring Bancorp, Inc. and Subsidiaries FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data)

Three Months Ended March 31, % 2007 2006 Change Profitability for the period: Net interest income $24,015 $23,177 4 Provision for loan and lease losses 839 950 (12) Noninterest income 10,906 9,846 11 Noninterest expenses 23,614 20,356 16 Income before income taxes 10,468 11,717 (11) Net income $7,545 8,340 (10)

Return on average assets 1.12% 1.36% Return on average equity 11.96% 15.26% Net interest margin 4.07% 4.35% Efficiency ratio - GAAP based * 67.62% 61.64% Efficiency ratio - traditional * 63.01% 56.91%

Per share data: Basic net income $0.49 $0.56 (13) Diluted net income 0.49 0.56 (13) Dividends declared 0.23 0.22 5 Book value 17.51 15.21 15 Tangible book value 13.11 13.61 (4) Average fully diluted shares 15,400,865 14,924,571

At period-end: Assets $2,945,477 $2,501,752 18 Deposits 2,274,322 1,839,355 24 Loans and leases 2,036,182 1,744,348 17 Securities 560,940 542,053 3 Stockholders' equity 275,319 225,137 22

Capital and credit quality ratios: Average equity to average assets 9.32% 8.92% Allowance for loan and lease losses to loans and leases 1.09% 1.02% Nonperforming assets to total assets 0.24% 0.12% Annualized net charge-offs to average loans and leases 0.00% 0.01%

* The GAAP based efficiency ratio is noninterest expenses divided by net interest income plus noninterest income from the Consolidated Statements of Income.

The traditional, non-GAAP efficiency ratio excludes intangible asset amortization from noninterest expenses; excludes securities gains from noninterest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.

Certain reclassifications and restatements of information previously reported have been made to conform with current presentation.

Sandy Spring Bancorp, Inc. and Subsidiaries Reconciliation of GAAP-based and Traditional Efficiency Ratios (In thousands, except per share data)

Three Months Ended March 31, 2007 2006 Noninterest expenses-GAAP based $23,614 $20,356 Net interest income plus noninterest income-GAAP based 34,921 33,023

Efficiency ratio-GAAP based 67.62% 61.64%

Noninterest expenses-GAAP based $23,614 $20,356 Less non-GAAP adjustment: Amortization of intangible assets 802 742 Noninterest expenses-traditional ratio 22,812 19,614

Net interest income plus noninterest income-GAAP based 34,921 33,023 Plus non-GAAP adjustment: Tax-equivalency 1,285 1,442 Less non-GAAP adjustments: Securities gains 2 0 Net interest income plus noninterest income - traditional ratio 36,204 34,465

Efficiency ratio - traditional 63.01% 56.91%

Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data)

March 31 December 31 2007 2006 2006 Assets Cash and due from banks $61,145 $47,707 $54,945 Federal funds sold 48,138 16,709 48,978 Cash and cash equivalents 109,283 64,416 103,923

Interest-bearing deposits with banks 28,192 684 2,974 Residential mortgage loans held for sale (at fair value) 9,660 7,534 10,595 Investments available-for-sale (at fair value) 282,023 235,407 256,845 Investments held-to-maturity - fair value of $266,937 $295,887 and $273,206, respectively 261,208 290,684 267,344 Other equity securities 17,709 15,962 16,719

Total loans and leases 2,036,182 1,744,348 1,805,579 Less: allowance for loan and lease losses (22,186) (17,860) (19,492) Net loans and leases 2,013,996 1,726,488 1,786,087

Premises and equipment, net 50,834 45,448 47,756 Accrued interest receivable 16,485 12,851 15,200 Goodwill 53,913 10,826 12,494 Other intangible assets, net 15,244 12,916 10,653 Other assets 86,930 78,536 79,867 Total assets $2,945,477 $2,501,752 $2,610,457

Liabilities Noninterest-bearing deposits $449,604 $429,062 $394,662 Interest-bearing deposits 1,824,718 1,410,293 1,599,561 Total deposits 2,274,322 1,839,355 1,994,223

Short-term borrowings 325,657 383,870 314,732 Subordinated debentures 35,000 35,000 35,000 Accrued interest payable and other liabilities 26,905 16,319 26,917 Other long-term borrowings 8,274 2,071 1,808 Total liabilities 2,670,158 2,276,615 2,372,680

Stockholders' Equity Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 15,724,895, 14,801,934 and 14,826,805, respectively 15,725 14,802 14,827 Additional paid in capital 60,520 26,978 27,869 Retained earnings 203,044 184,344 199,102 Accumulated other comprehensive income(loss) (3,970) (987) (4,021) Total stockholders' equity 275,319 225,137 237,777 Total liabilities and stockholders' equity $2,945,477 $2,501,752 $2,610,457

Certain reclassifications and restatements of information previously reported have been made to conform with current presentation.

Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data)

Three Months Ended March 31, 2007 2006 Interest income: Interest and fees on loans and leases $34,574 $28,858 Interest on loans held for sale 195 150 Interest on deposits with banks 90 10 Interest and dividends on securities: Taxable 3,871 3,031 Exempt from federal income taxes 2,727 3,016 Interest on federal funds sold 437 112 Total interest income 41,894 35,177 Interest expense: Interest on deposits 13,788 7,674 Interest on short-term borrowings 3,481 3,749 Interest on long-term borrowings 610 577 Total interest expense 17,879 12,000 Net interest income 24,015 23,177 Provision for loan and lease losses 839 950 Net interest income after provision for loan and lease losses 23,176 22,227 Noninterest income: Securities gains 2 0 Service charges on deposit accounts 2,308 1,848 Gains on sales of mortgage loans 638 782 Fees on sales of investment products 800 718 Trust and investment management fees 2,281 2,116 Insurance agency commissions 2,690 2,108 Income from bank owned life insurance 684 553 Visa check fees 590 535 Other income 913 1,186 Total noninterest income 10,906 9,846 Noninterest expenses: Salaries and employee benefits 13,434 12,471 Occupancy expense of premises 2,417 2,126 Equipment expenses 1,602 1,316 Marketing 529 341 Outside data services 926 781 Amortization of intangible assets 802 742 Other expenses 3,904 2,579 Total noninterest expenses 23,614 20,356 Income before income taxes 10,468 11,717 Income tax expense 2,923 3,377 Net income $7,545 $8,340 Basic net income per share $0.49 $0.56 Diluted net income per share 0.49 0.56 Dividends declared per share 0.23 0.22

Certain reclassifications and restatements of information previously reported have been made to conform with current presentation.

Sandy Spring Bancorp, Inc. and Subsidiaries Historical Trends in Quarterly Financial Data (Dollars in thousands, except per share data)

2007 Q1 Profitability for the quarter: Tax-equivalent interest income $43,179 Interest expense 17,879 Tax-equivalent net interest income 25,300 Tax-equivalent adjustment 1,285 Provision for loan and lease losses 839 Noninterest income 10,906 Noninterest expenses 23,614 Income before income taxes 10,468 Income tax expense 2,923 Net Income 7,545 Financial ratios: Return on average assets 1.12% Return on average equity 11.96% Net interest margin 4.07% Efficiency ratio - GAAP based * 67.62% Efficiency ratio - traditional * 63.01% Per share data: Basic net income $0.49 Diluted net income $0.49 Dividends declared $0.23 Book value $17.51 Tangible book value $13.11 Average fully diluted shares 15,400,865 Noninterest income breakdown: Securities gains $2 Service charges on deposit accounts 2,308 Gains on sales of mortgage loans 638 Fees on sales of investment products 800 Trust and investment management fees 2,281 Insurance agency commissions 2,690 Income from bank owned life insurance 684 Visa check fees 590 Other income 913 Total 10,906 Noninterest expense breakdown: Salaries and employee benefits $13,434 Occupancy expense of premises 2,417 Equipment expenses 1,602 Marketing 529 Outside data services 926 Amortization of intangible assets 802 Other expenses 3,904 Total 23,614

* 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 (Dollars in thousands, except per share data)

2006 Q4 Q3 Q2 Q1 Profitability for the quarter: Tax-equivalent interest income $42,000 $41,695 $39,372 $36,619 Interest expense 16,770 15,896 14,021 12,000 Tax-equivalent net interest income 25,230 25,799 25,351 24,619 Tax-equivalent adjustment 1,625 1,677 1,499 1,442 Provision for loan and lease losses 250 550 1,045 950 Noninterest income 10,064 9,590 9,395 9,846 Noninterest expenses 22,218 21,694 20,828 20,356 Income before income taxes 11,201 11,468 11,374 11,717 Income tax expense 2,887 3,346 3,279 3,377 Net Income 8,314 8,122 8,095 8,340 Financial ratios: Return on average assets 1.26% 1.24% 1.27% 1.36% Return on average equity 13.75% 13.93% 14.34% 15.26% Net interest margin 4.14% 4.25% 4.30% 4.35% Efficiency ratio - GAAP based * 65.99% 64.35% 62.65% 61.64% Efficiency ratio - traditional * 60.85% 59.20% 57.81% 56.91% Per share data: Basic net income $0.56 $0.55 $0.55 $0.56 Diluted net income $0.55 $0.55 $0.54 $0.56 Dividends declared $0.22 $0.22 $0.22 $0.22 Book value $16.04 $15.92 $15.48 $15.21 Tangible book value $14.48 $14.30 $13.93 $13.61 Average fully diluted shares 14,940,873 14,915,454 14,884,677 14,924,571 Noninterest income breakdown: Securities gains $0 $0 $1 $0 Service charges on deposit accounts 2,201 1,904 1,950 1,848 Gains on sales of mortgage loans 929 718 549 782 Fees on sales of investment products 696 783 763 718 Trust and investment management fees 2,286 2,164 2,196 2,116 Insurance agency commissions 1,345 1,406 1,618 2,108 Income from bank owned life insurance 639 591 567 553 Visa check fees 631 603 612 535 Other income 1,337 1,421 1,139 1,186 Total 10,064 9,590 9,395 9,846 Noninterest expense breakdown: Salaries and employee benefits $12,695 $12,622 $12,730 $12,471 Occupancy expense of premises 2,153 2,175 2,039 2,126 Equipment expenses 1,364 1,384 1,412 1,316 Marketing 610 1,160 472 341 Outside data services 717 872 833 781 Amortization of intangible assets 740 743 742 742 Other expenses 3,939 2,738 2,600 2,579 Total 22,218 21,694 20,828 20,356

* The GAAP based efficiency ratio is noninterest expenses divided by net interest income plus noninterest income from the Consolidated Statements of Income.

Sandy Spring Bancorp, Inc. and Subsidiaries Historical Trends in Quarterly Financial Data (Dollars in thousands, except per share data)

2007 Q1 Balance sheets at quarter end: Residential mortgage loans $404,177 Residential construction loans 144,744 Commercial mortgage loans 621,692 Commercial construction loans 225,108 Commercial loans and leases 282,854 Consumer loans 357,607 Total loans and leases 2,036,182 Less: allowance for loan and lease losses (22,186) Net loans and leases 2,013,996 Goodwill 53,913 Other intangible assets, net 15,244 Total assets 2,945,477 Total deposits 2,274,322 Customer repurchase agreements 114,712 Total stockholders' equity 275,319 Quarterly average balance sheets: Residential mortgage loans $406,886 Residential construction loans 151,194 Commercial mortgage loans 565,277 Commercial construction loans 203,371 Commercial loans and leases 246,218 Consumer loans 353,668 Total loans and leases 1,926,614 Securities 551,566 Total earning assets 2,518,797 Total assets 2,743,890 Total interest-bearing liabilities 2,048,323 Noninterest-bearing demand deposits 408,954 Total deposits 2,099,409 Customer repurchase agreements 101,805 Stockholders' equity 255,781 Capital and credit quality measures: Average equity to average assets 9.32% Loan and lease loss allowance to loans and leases 1.09% Nonperforming assets to total assets 0.24% Annualized net (charge-offs) recoveries to average loans and leases 0.00% Miscellaneous data: Net (charge-offs) recoveries $17 Nonperforming assets: Non-accrual loans and leases 1,982 Loans and leases 90 days past due 5,084 Restructured loans and leases 0 Other real estate owned, net 0 Total nonperforming assets 7,066

Sandy Spring Bancorp, Inc. and Subsidiaries Historical Trends in Quarterly Financial Data (Dollars in thousands, except per share data)

2006 Q4 Q3 Q2 Q1 Balance sheets at quarter end: Residential mortgage loans $390,852 $396,811 $386,805 $428,698 Residential construction loans 151,399 175,067 169,564 166,767 Commercial mortgage loans 509,726 505,181 461,708 425,392 Commercial construction loans 192,547 185,615 214,628 188,477 Commercial loans and leases 216,238 204,023 200,712 193,524 Consumer loans 344,817 348,793 348,547 341,490 Total loans and leases 1,805,579 1,815,490 1,781,964 1,744,348 Less: allowance for loan and lease losses (19,492) (19,433) (18,910) (17,860) Net loans and leases 1,786,087 1,796,057 1,763,054 1,726,488 Goodwill 12,494 12,606 12,606 12,596 Other intangible assets, net 10,653 11,431 12,173 12,916 Total assets 2,610,457 2,600,633 2,588,528 2,501,752 Total deposits 1,994,223 1,947,850 1,818,347 1,839,355 Customer repurchase agreements 99,382 129,213 235,853 181,520 Total stockholders' equity 237,777 235,868 228,913 225,137 Quarterly average balance sheets: Residential mortgage loans $407,277 $405,430 $449,482 $427,609 Residential construction loans 162,084 172,873 167,632 161,649 Commercial mortgage loans 504,698 465,989 436,036 424,467 Commercial construction loans 189,027 218,798 206,419 186,606 Commercial loans and leases 205,582 199,968 196,093 188,747 Consumer loans 346,030 346,639 345,194 339,299 Total loans and leases 1,814,698 1,809,697 1,800,856 1,728,377 Securities 544,877 583,156 554,157 555,061 Total earning assets 2,416,120 2,407,185 2,367,100 2,294,665 Total assets 2,610,023 2,600,092 2,560,633 2,484,687 Total interest-bearing liabilities 1,937,685 1,934,668 1,895,652 1,821,530 Noninterest-bearing demand deposits 407,659 410,912 419,454 418,214 Total deposits 1,970,953 1,851,098 1,819,255 1,799,213 Customer repurchase agreements 120,597 212,123 196,359 167,620 Stockholders' equity 239,921 231,364 226,440 221,599 Capital and credit quality measures: Average equity to average assets 9.19% 8.90% 8.84% 8.92% Loan and lease loss allowance to loans and leases 1.08% 1.07% 1.06% 1.02% Nonperforming assets to total assets 0.15% 0.15% 0.10% 0.12% Annualized net (charge-offs) recoveries to average loans and leases (0.01)% 0.00% 0.00% 0.01% Miscellaneous data: Net (charge-offs) recoveries ($191) ($27) $5 $24 Nonperforming assets: Non-accrual loans and leases 1,910 1,495 1,691 585 Loans and leases 90 days past due 1,823 2,346 988 2,473 Restructured loans and leases 0 0 0 0 Other real estate owned, net 182 0 0 0 Total nonperforming assets 3,915 3,841 2,679 3,058

Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Dollars in thousands and tax-equivalent)

Three Months Ended March 31, 2007 Annualized Average Average Balances Interest Yield/Rate Assets Residential mortgage loans $406,886 $6,078 5.97% Residential construction loans 151,194 2,717 7.29 Commercial mortgage loans 565,277 10,249 7.35 Commercial construction loans 203,371 4,581 9.13 Commercial loans and leases 246,218 5,033 8.29 Consumer loans 353,668 6,111 7.01 Total loans and leases 1,926,614 34,769 7.30 Securities 551,566 7,883 5.86 Interest-bearing deposits with banks 6,997 90 5.20 Federal funds sold 33,620 437 5.27 TOTAL EARNING ASSETS 2,518,797 43,179 6.95%

Less: allowance for loan and lease losses (20,667) Cash and due from banks 52,004 Premises and equipment, net 49,235 Other assets 144,521 Total assets $2,743,890

Liabilities and Stockholders' Equity Interest-bearing demand deposits $231,152 $189 0.33% Regular savings deposits 163,037 156 0.39 Money market savings deposits 547,135 4,974 3.69 Time deposits 749,131 8,469 4.58 Total interest-bearing deposits 1,690,455 13,788 3.31 Borrowings 357,868 4,091 4.63 TOTAL INTEREST-BEARING LIABILITIES 2,048,323 17,879 3.54

Noninterest-bearing demand deposits 408,954 Other liabilities 30,832 Stockholder's equity 255,781 Total liabilities and stockholders' equity $2,743,890

Net interest income and spread 25,300 3.41% Less: tax equivalent adjustment 1,285 Net interest income 24,015

Interest income/earning assets 6.95% Interest expense/earning assets 2.88 Net interest margin 4.07%

*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 6.55% (or a combined marginal federal and state rate of 39.26%), to increase tax- exempt interest income to a taxable-equivalent basis. The annualized taxable-equivalent adjustment amounts utilized in the above table to compute yields aggregated to $5,210,000 in 2007 and $5,847,000 in 2006.

Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Dollars in thousands and tax-equivalent)

Three Months Ended March 31, 2006 Annualized Average Average Balances Interest Yield/Rate Assets Residential mortgage loans $427,609 $6,133 5.74% Residential construction loans 161,649 2,834 7.11 Commercial mortgage loans 424,467 7,351 7.02 Commercial construction loans 186,606 3,807 8.27 Commercial loans and leases 188,747 3,602 7.74 Consumer loans 339,299 5,281 6.31 Total loans and leases 1,728,377 29,008 6.79 Securities 555,061 7,489 5.51 Interest-bearing deposits with banks 958 10 4.28 Federal funds sold 10,269 112 4.44 TOTAL EARNING ASSETS 2,294,665 36,619 6.46%

Less: allowance for loan and lease losses (17,316) Cash and due from banks 45,570 Premises and equipment, net 45,611 Other assets 116,157 Total assets $2,484,687

Liabilities and Stockholders' Equity Interest-bearing demand deposits $236,570 $165 0.28% Regular savings deposits 199,281 215 0.44 Money market savings deposits 371,686 2,349 2.56 Time deposits 573,462 4,945 3.50 Total interest-bearing deposits 1,380,999 7,674 2.25 Borrowings 440,531 4,326 3.95 TOTAL INTEREST-BEARING LIABILITIES 1,821,530 12,000 2.66

Noninterest-bearing demand deposits 418,214 Other liabilities 23,344 Stockholder's equity 221,599 Total liabilities and stockholders' equity $2,484,687

Net interest income and spread 24,619 3.80% Less: tax equivalent adjustment 1,442 Net interest income 23,177

Interest income/earning assets 6.46% Interest expense/earning assets 2.11 Net interest margin 4.35%

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DATASOURCE: Sandy Spring Bancorp, Inc.

CONTACT: Hunter R. Hollar, President & Chief Executive Officer, or

Philip J. Mantua, Executive V.P. & Chief Financial Officer, 1-800-399-5919,

Web site: http://www.sandyspringbank.com/