OLNEY, Md., Jan. 24 /PRNewswire-FirstCall/ -- Sandy Spring Bancorp, Inc., (NASDAQ:SASR) the parent company of Sandy Spring Bank, today announced net income for the fourth quarter of 2007 of $8.4 million ($.51 per diluted share) compared to $8.3 million ($.55 per diluted share) for the fourth quarter of 2006 and $8.2 million ($.50 per diluted share) for the linked quarter of 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010424/SSPRINGLOGO-a ) Net income for the year ended December 31, 2007 totaled $32.3 million ($2.01 per diluted share) compared to $32.9 million ($2.20 per diluted share) for the prior year. Net income for 2007 includes after-tax merger costs of $0.9 million ($.06 per diluted share) for the acquisitions of Potomac Bank of Virginia ("Potomac") and CN Bancorp, Inc. ("County"), which were completed in the first and second quarters of 2007, respectively.
Sandy Spring Bancorp's return on average stockholders' equity was 10.69% for the fourth quarter of 2007, compared to 13.75% for the same period in the prior year. Return on average assets for the fourth quarter of 2007 was 1.10%, compared to 1.26% for the fourth quarter of 2006.
For the year ended December 31, 2007, return on average stockholders' equity was 11.12%, compared to 14.33% for the prior year. Return on average assets for the year ended December 31, 2007 was 1.10%, compared to 1.28% for the year ended December 31, 2006.
Fourth Quarter Highlights:
-- Net interest income increased 16% for the quarter and 11% for the year
to date over the prior year periods.
-- Noninterest income increased 13% for the quarter and 14% for the year
to date over the prior year periods.
-- Loans and deposits increased 26% and 14% respectively, compared to
December 31, 2006.
-- Provision for loan and lease losses increased for both the quarter and
full year in response to a larger portfolio and a higher level of
nonperforming loans which increased to $34.4 million at December 31,
2007.
-- Net interest margin improved to 4.19% for the fourth quarter compared
to 4.14% for the prior year quarter and 4.16% for the linked third
quarter of 2007.
-- Commenced expense management initiatives as part of overall strategic
business improvement program with a freeze of the defined benefit
pension plan effective January 1, 2008.
-- Repurchased approximately 101,000 shares of company stock during the
quarter at average cost of $28.35 per share.
"We had another solid quarter and showed improvement in many key performance areas even though our non-performing assets increased from the third quarter as economic conditions continue to be unpredictable and uncertain," said Hunter R. Hollar, President and Chief Executive Officer of Sandy Spring Bancorp. "Both net interest income and non-interest income showed meaningful improvement over the prior year. Our net interest margin improved to 4.19% for the fourth quarter, compared to 4.14% for the prior year quarter and 4.16% for the linked third quarter of 2007." "During the fourth quarter we completed much of the initial groundwork and analysis for our strategic business improvement program, titled LIFT (Looking Inward for Tomorrow). This stage included a companywide evaluation of business practices, staffing levels, facilities and branches, with the goal of improving Sandy Spring Bank's overall efficiency and focusing resources on more value-added activities," said Hollar. "The implementation of initiatives generated through LIFT has begun and will continue through 2009, with a majority of the implementation efforts to be started in 2008." "We instituted a hiring freeze along with new, more stringent expense controls with respect to discretionary expenses and, in addition, eliminated an executive medical plan and have frozen the defined benefit pension plan, all of which will produce significant expense savings in the coming year. In fact, during the fourth quarter overall noninterest expenses declined over the prior linked quarter; similarly, the efficiency ratio improved on a linked quarter basis," said Hollar.
LIFT Expectations The financial benefits from LIFT will be derived from both expense management initiatives and revenue enhancements.
Sandy Spring Bank plans to achieve approximately $5.1 million of cost savings in 2008 through a combination of workforce reduction, changes in corporate benefit plans and other efficiencies. These other efficiencies include opportunities in reduced corporate real estate and occupancy costs, more controlled discretionary spending, and process re-engineering. LIFT will further institute a culture of efficiency at Sandy Spring by emphasizing the importance of expense discipline to our long-term success.
These changes are expected to result in employee severance and other implementation costs of about $1.5 million, the majority of which will be recognized during the first half of 2008.
In addition, Sandy Spring Bank intends to achieve at least $2.2 million in net revenue growth in 2008 through the implementation of various pricing and business growth enhancements driven by LIFT.
In total, Sandy Spring Bank expects to realize a net pretax financial benefit from LIFT of approximately $5.8 million in 2008, primarily in the latter half of the year, and expects to realize an additional $4.0 million of total pretax earnings benefit during 2009 from this initiative.
Review of Balance Sheet and Credit Quality Comparing December 31, 2007 balances to December 31, 2006, total assets increased 17% to $3.0 billion due mainly to the County and Potomac acquisitions together with steady growth in the commercial loan portfolio. Total loans and leases increased 26% to $2.3 billion compared to the prior year. The two acquisitions accounted for approximately 62% of the year-over- year loan growth. Excluding these acquisitions, the loan portfolio increased 10% over the fourth quarter of the prior year. This increase was comprised mainly of a 12% increase in commercial loans. Compared to the linked third quarter of 2007, total loans increased 3%. Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 13% to $2.4 billion at December 31, 2007 compared to the prior year. Again, most of the growth in such funding sources was due to the two acquisitions. On a linked quarter basis, such customer funding sources decreased 1% compared to the third quarter of 2007. This decline was due primarily to intense market competition for deposits and seasonal factors coupled with the Company's plan to utilize conservative deposit pricing to manage its liquidity position and net interest margin, together with some expected deposit runoff from the acquisitions.
Stockholders' equity totaled $315.6 million at year-end, and represented 10.4% of total assets, compared to 9.1% at December 31, 2006. During the year, the Company repurchased 156,249 shares at an average cost of $28.04 per share. At December 31, 2007, 629,996 shares remained available for repurchase under the current authorization.
The provision for loan and lease losses totaled $1.7 million for the fourth quarter of 2007 compared to $0.3 million for the fourth quarter of 2006 and $0.8 million for the linked quarter of 2007. The provision for loan and lease losses totaled $4.1 million for the year ended December 31, 2007 compared to $2.8 million for the prior year. The allowance for loan and lease losses represented 1.10% of outstanding loans at December 31, 2007.
Non-performing assets totaled $34.9 million at December 31, 2007 compared to $25.8 million at September 30, 2007 and $3.9 million at December 31, 2006. The increase over the linked quarter of 2007 was due primarily to one commercial construction loan totaling $5.3 million which management believes is adequately reserved and four commercial real estate loans totaling $5.8 million which are well secured. The increase over the prior year also reflects one loan totaling $13.6 million that was put on non-accrual status in the second quarter of 2007.
Income Statement Review Comparing the fourth quarter of 2007 and 2006, net interest income increased by $3.8 million, or 16%, due primarily to continued growth in the loan portfolio and higher loan yields, together with disciplined management of rates offered on time deposits to fund loan growth. These factors produced a net interest margin increase to 4.19% in 2007 from 4.14% in 2006.
Noninterest income increased to $11.4 million in the fourth quarter of 2007 as compared to $10.1 million in 2006, an increase of 13%. Service charges on deposit accounts increased 46% due primarily to higher overdraft fees while Visa(R) check fees increased 18% reflecting continued growth in electronic transactions. Trust and investment management fees increased 13% due primarily to growth in assets under management. Other noninterest income increased 33% primarily due to a gain on sale of a property of $0.3 million. These increases were somewhat offset by decreases of 36% in gains on sales of mortgage loans and 26% in fees on sales of investment products, both reflecting current market conditions.
Noninterest expenses were $25.3 million in the fourth quarter of 2007 compared to $22.2 million in 2006, an increase of $3.1 million or 14%. Equipment costs increased 34% due to higher service on equipment and computer software amortization. Outside data services increased 53% due mainly to the overall growth in the loan and deposit portfolios and the branches added from the acquisitions. Other expenses increased 26% due to higher consulting fees, franchise taxes and higher deposit insurance cost. The fourth quarter also included an expense accrual for possible Visa, Inc. litigation costs. Intangibles amortization increased $0.4 million or 52% as a result of the two acquisitions.
Comparing the year ended December 31, 2007 and 2006, net interest income increased by $10.1 million, or 11%, due primarily to continued growth in the loan portfolio and increased loan yields, which was offset in part by increased rates on interest bearing deposits and increased use of time deposits to fund loans. The net interest margin decreased to 4.13% in 2007 from 4.26% in 2006.
Noninterest income increased 14% for the year ended December 31, 2007 compared to 2006. Service charges on deposit accounts increased 41% due mainly to higher overdraft fees mentioned above while income from bank owned life insurance grew by 20% due to higher rates and insurance policies added from the two acquisitions. Visa(R) check fees increased 17% due to an increased volume of electronic transactions. These increases were somewhat offset by a decrease of 8% in gains on sales of mortgage loans as mentioned above.
Noninterest expenses were $99.8 million in 2007 compared to $85.1 million in 2006, an increase of $14.7 million or 17%. Salaries and benefits increased 9% due mainly to the acquisition of Potomac and County. This increase was somewhat offset by a $0.5 million reduction due to the elimination of an executive medical benefit plan. Occupancy expenses increased 22% due to rent increases on existing properties and an expanded branch footprint while expenses for outside data services increased 24% due to the overall growth of the loan and deposit portfolios and the ten new branches added from the acquisitions. Intangibles amortization increased $1.1 million or 38% as a result of the two acquisitions. Other expenses increased 47% due primarily to merger expenses of $1.5 million. Higher consulting and professional fees, franchise taxes and an expense accrual for possible Visa, Inc. litigation costs also contributed to this increase.
Conference Call The Company's management will host a conference call to discuss its fourth quarter and full year results today at 2:00 P.M. (ET). A live Web cast of the conference call is available through the Investor Relations' section of the Sandy Spring Web site at http://www.sandyspringbank.com/. Participants may call 800-860-2442; 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 5:00 p.m. (ET) March 6, 2008. A telephone voice replay will also be available during that same time period at 877-344-7529. Please use pass code #415036 to access.
About Sandy Spring Bancorp/Sandy Spring Bank With $3.0 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 43 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George's counties in Maryland, and Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring Bank also offers a comprehensive menu of leasing, insurance and investment management services. Visit http://www.sandyspringbank.com/ to locate an ATM near you or for more information about Sandy Spring Bank.
For additional information or questions, please contact:
Hunter R. Hollar, President & Chief Executive Officer, or
Philip J. Mantua, Executive V.P. & Chief Financial Officer
Sandy Spring Bancorp
17801 Georgia Avenue
Olney, Maryland 20832
1-800-399-5919
E-mail:
Web site: http://www.sandyspringbank.com/ 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, 2006, 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 http://www.sec.gov/.
Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data) Three Months Ended
December 31, %
2007 2006 Change
Profitability for the period:
Net interest income $27,400 $23,605 16
Provision for loan and lease losses 1,725 250 590
Noninterest income 11,380 10,064 13
Noninterest expenses 25,316 22,218 14
Income before income taxes 11,739 11,201 5
Net income 8,367 $8,314 1 Return on average assets 1.10% 1.26%
Return on average equity 10.69% 13.75%
Net interest margin 4.19% 4.14%
Efficiency ratio - GAAP based * 65.28% 65.99%
Efficiency ratio - traditional * 60.22% 60.85% Per share data:
Basic net income $0.51 $0.56 (9)
Diluted net income 0.51 0.55 (7)
Dividends declared 0.23 0.22 5
Book value 19.31 16.04 20
Tangible book value 13.60 14.48 (6)
Average fully diluted shares 16,422,161 14,940,873 At period-end:
Assets $3,043,953 $2,610,457 17
Deposits 2,273,868 1,994,223 14
Loans and leases 2,277,031 1,805,579 26
Securities 445,273 540,908 (18)
Stockholders' equity 315,640 237,777 33 Capital and credit quality ratios:
Average equity to average assets 10.33% 9.19%
Allowance for loan and lease losses
to loans and leases 1.10% 1.08%
Nonperforming assets to total assets 1.15% 0.15%
Annualized net charge-offs to average
loans and leases 0.01% 0.01%
Twelve Months Ended
December 31, %
2007 2006 Change
Profitability for the period:
Net interest income $104,826 $94,756 11
Provision for loan and lease losses 4,094 2,795 46
Noninterest income 44,289 38,895 14
Noninterest expenses 99,788 85,096 17
Income before income taxes 45,233 45,760 (1)
Net income 32,262 32,871 (2) Return on average assets 1.10% 1.28%
Return on average equity 11.12% 14.33%
Net interest margin 4.13% 4.26%
Efficiency ratio - GAAP based * 66.92% 63.67%
Efficiency ratio - traditional * 61.92% 58.71% Per share data:
Basic net income $2.01 $2.22 (9)
Diluted net income 2.01 2.20 (9)
Dividends declared 0.92 0.88 5
Book value 19.31 16.04 20
Tangible book value 13.60 14.48 (6)
Average fully diluted shares 16,087,310 14,926,965 At period-end:
Assets $3,043,953 $2,610,457 17
Deposits 2,273,868 1,994,223 14
Loans and leases 2,277,031 1,805,579 26
Securities 445,273 540,908 (18)
Stockholders' equity 315,640 237,777 33 Capital and credit quality ratios:
Average equity to average assets 9.89% 8.95%
Allowance for loan and lease losses
to loans and leases 1.10% 1.08%
Nonperforming assets to total
assets 1.15% 0.15%
Annualized net charge-offs to
average loans and leases 0.06% 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 Twelve Months
Ended Ended
December 31, December 31,
2007 2006 2007 2006
Noninterest expenses-GAAP based 25,316 $22,218 99,788 $85,096
Net interest income plus noninterest
income-GAAP based 38,780 33,669 149,115 133,651 Efficiency ratio-GAAP based 65.28% 65.99% 66.92% 63.67% Noninterest expenses-GAAP based $25,316 $22,218 $99,788 $85,096
Less non-GAAP adjustment:
Amortization of intangible assets 1,124 740 4,080 2,967
Noninterest expenses-traditional
ratio 24,192 21,478 95,708 82,129 Net interest income plus noninterest
income-GAAP based 38,780 33,669 149,115 133,651
Plus non-GAAP adjustment:
Tax-equivalency 1,410 1,625 5,506 6,243
Less non-GAAP adjustments:
Securities gains 15 0 43 1
Net interest income plus
noninterest income -
traditional ratio 40,175 35,294 154,578 139,893 Efficiency ratio - traditional 60.22% 60.85% 61.92% 58.71% Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
December 31
2007 2006
Assets
Cash and due from banks $63,432 $54,945
Federal funds sold & overnight
investments 22,055 48,978
Cash and cash equivalents 85,487 103,923 Interest-bearing deposits with banks 365 2,974
Residential mortgage loans held for
sale (at fair value) 7,089 10,595
Investments available-for-sale (at
fair value) 186,801 256,845
Investments held-to-maturity - fair
value of $240,995 and $273,206,
respectively 234,706 267,344
Other equity securities 23,766 16,719 Total loans and leases 2,277,031 1,805,579
Less: allowance for loan and lease
losses (25,092) (19,492)
Net loans and leases 2,251,939 1,786,087 Premises and equipment, net 54,457 47,756
Accrued interest receivable 14,955 15,200
Goodwill 76,585 12,494
Other intangible assets, net 16,630 10,653
Other assets 91,173 79,867
Total assets $3,043,953 $2,610,457 Liabilities
Noninterest-bearing deposits $434,053 $394,662
Interest-bearing deposits 1,839,815 1,599,561
Total deposits 2,273,868 1,994,223 Short-term borrowings 373,972 314,732
Other long-term borrowings 17,553 1,808
Subordinated debentures 35,000 35,000
Accrued interest payable and other
liabilities 27,920 26,917
Total liabilities 2,728,313 2,372,680 Stockholders' Equity
Common stock -- par value $1.00; shares
authorized 50,000,000; shares issued and
outstanding 16,349,317 and 14,826,805,
respectively 16,349 14,827
Additional paid in capital 83,970 27,869
Retained earnings 216,376 199,102
Accumulated other comprehensive
income(loss) (1,055) (4,021)
Total stockholders' equity 315,640 237,777
Total liabilities and
stockholders' equity $3,043,953 $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 Twelve Months
Ended Ended
December 31, December 31,
2007 2006 2007 2006
Interest income:
Interest and fees on loans and
leases $39,967 $32,981 $152,723 $125,813
Interest on loans held for sale 114 225 815 739
Interest on deposits with banks 42 105 1,123 123
Interest and dividends on
securities:
Taxable 3,157 3,642 13,989 14,132
Exempt from federal income taxes 2,392 2,772 10,168 11,555
Interest on federal funds sold 437 650 2,157 1,081
Total interest income 46,109 40,375 180,975 153,443
Interest expense:
Interest on deposits 14,653 12,488 59,916 39,334
Interest on short-term borrowings 3,408 3,707 13,673 17,049
Interest on long-term borrowings 648 575 2,560 2,304
Total interest expense 18,709 16,770 76,149 58,687
Net interest income 27,400 23,605 104,826 94,756
Provision for loan and lease losses 1,725 250 4,094 2,795
Net interest income after
provision for loan and
lease losses 25,675 23,355 100,732 91,961
Noninterest income:
Securities gains 15 0 43 1
Service charges on deposit accounts 3,211 2,201 11,148 7,903
Gains on sales of mortgage loans 590 929 2,739 2,978
Fees on sales of investment products 518 696 2,989 2,960
Trust and investment management fees 2,581 2,286 9,588 8,762
Insurance agency commissions 1,203 1,345 6,625 6,477
Income from bank owned life
insurance 732 639 2,829 2,350
Visa check fees 747 631 2,784 2,381
Other income 1,783 1,337 5,544 5,083
Total noninterest income 11,380 10,064 44,289 38,895
Noninterest expenses:
Salaries and employee benefits 13,343 12,695 55,207 50,518
Occupancy expense of premises 2,288 2,153 10,360 8,493
Equipment expenses 1,829 1,364 6,563 5,476
Marketing 674 610 2,237 2,583
Outside data services 1,094 717 3,967 3,203
Amortization of intangible assets 1,124 740 4,080 2,967
Other expenses 4,964 3,939 17,374 11,856
Total noninterest expenses 25,316 22,218 99,788 85,096
Income before income taxes 11,739 11,201 45,233 45,760
Income tax expense 3,372 2,887 12,971 12,889
Net income $8,367 $8,314 $32,262 $32,871
Basic net income per share $0.51 $0.56 $2.01 $2.22
Diluted net income per share 0.51 0.55 2.01 2.20
Dividends declared per share 0.23 0.22 0.92 0.88 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
2007
(Dollars in thousands,
except per share data) Q4 Q3 Q2 Q1
Profitability for the quarter:
Tax-equivalent interest
income $47,519 $48,405 $47,378 $43,179
Interest expense 18,709 19,746 19,815 17,879
Tax-equivalent net interest
income 28,810 28,659 27,563 25,300
Tax-equivalent adjustment 1,410 1,447 1,364 1,285
Provision for loan and lease
losses 1,725 750 780 839
Noninterest income 11,380 11,130 10,873 10,906
Noninterest expenses 25,316 25,899 24,959 23,614
Income before income taxes 11,739 11,693 11,333 10,468
Income tax expense 3,372 3,512 3,164 2,923
Net Income 8,367 8,181 8,169 7,545
Financial ratios:
Return on average assets 1.10% 1.08% 1.10% 1.12%
Return on average equity 10.69% 10.55% 11.45% 11.96%
Net interest margin 4.19% 4.16% 4.08% 4.07%
Efficiency ratio - GAAP
based * 65.28% 67.55% 67.33% 67.62%
Efficiency ratio -
traditional * 60.22% 62.30% 62.26% 63.01%
Per share data:
Basic net income $0.51 $0.50 $0.51 $0.49
Diluted net income $0.51 $0.50 $0.51 $0.49
Dividends declared $0.23 $0.23 $0.23 $0.23
Book value $19.31 $18.92 $18.62 $17.51
Tangible book value $13.60 $13.17 $12.76 $13.11
Average fully diluted
shares 16,422,161 16,508,922 16,069,771 15,400,865
Noninterest income
breakdown:
Securities gains $15 $22 $4 $2
Service charges on deposit
accounts 3,211 2,999 2,630 2,308
Gains on sales of mortgage
loans 590 738 773 638
Fees on sales of investment
products 518 765 906 800
Trust and investment management
fees 2,581 2,365 2,361 2,281
Insurance agency commissions 1,203 1,294 1,438 2,690
Income from bank owned life
insurance 732 720 693 684
Visa check fees 747 730 717 590
Other income 1,783 1,497 1,351 913
Total 11,380 11,130 10,873 10,906
Noninterest expense breakdown:
Salaries and employee
benefits $13,343 $14,654 $13,776 $13,434
Occupancy expense of
premises 2,288 2,946 2,709 2,417
Equipment expenses 1,829 1,631 1,501 1,602
Marketing 674 359 675 529
Outside data services 1,094 870 1,077 926
Amortization of intangible
assets 1,124 1,123 1,031 802
Other expenses 4,964 4,316 4,190 3,904
Total 25,316 25,899 24,959 23,614
2006
(Dollars in thousands,
except per share data) 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 $13.81 $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 benefit $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. 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 2007
(Dollars in thousands, except
per share data) Q4 Q3 Q2 Q1
Balance sheets at quarter end:
Residential mortgage loans $456,305 $439,091 $427,252 $404,177
Residential construction loans 166,981 154,908 154,444 144,744
Commercial mortgage loans 662,837 645,790 660,004 621,692
Commercial construction loans 262,840 246,569 236,278 225,108
Commercial loans and leases 351,773 343,653 316,409 282,854
Consumer loans 376,295 371,588 370,621 357,607
Total loans and leases 2,277,031 2,201,599 2,165,008 2,036,182
Less: allowance for loan and
lease losses (25,092) (23,567) (23,661) (22,186)
Net loans and leases 2,251,939 2,178,032 2,121,347 2,013,996
Goodwill 76,585 76,625 77,457 53,913
Other intangible assets, net 16,630 17,754 18,878 15,244
Total assets 3,043,953 2,965,492 3,101,409 2,945,477
Total deposits 2,273,868 2,280,102 2,386,226 2,274,322
Customer repurchase agreements 98,015 122,130 113,622 114,712
Total stockholders' equity 315,640 310,624 306,255 275,319
Quarterly average balance
sheets:
Residential mortgage loans $453,568 $441,190 $426,496 $406,886
Residential construction loans 163,922 151,306 151,785 151,194
Commercial mortgage loans 649,101 647,659 630,335 565,277
Commercial construction loans 252,705 244,975 239,299 203,371
Commercial loans and leases 339,744 323,439 300,325 246,218
Consumer loans 374,572 370,585 362,221 353,668
Total loans and leases 2,233,612 2,179,154 2,110,461 1,926,614
Securities 451,168 458,984 523,507 551,566
Total earning assets 2,725,801 2,733,572 2,711,225 2,518,797
Total assets 3,006,086 3,019,065 2,979,820 2,743,890
Total interest-bearing
liabilities 2,222,387 2,214,606 2,212,376 2,048,323
Noninterest-bearing demand
deposits 439,967 463,018 450,887 408,954
Total deposits 2,283,122 2,340,004 2,290,413 2,099,409
Customer repurchase agreements 112,828 113,425 109,187 101,805
Stockholders' equity 310,605 307,564 286,040 255,781
Capital and credit quality
measures:
Average equity to average
assets 10.33% 10.19% 9.60% 9.32%
Loan and lease loss allowance
to loans and leases 1.10% 1.07% 1.09% 1.09%
Nonperforming assets to total
assets 1.15% 0.87% 0.71% 0.24%
Annualized net (charge-offs)
recoveries to
average loans and leases (0.01)% (0.16)% (0.05)% 0.00%
Miscellaneous data:
Net (charge-offs) recoveries ($200) ($844) ($265) $17
Nonperforming assets:
Non-accrual loans and leases 23,040 17,362 18,818 1,982
Loans and leases 90 days
past due 11,362 8,009 3,347 5,084
Restructured loans and leases 0 0 0 0
Other real estate owned, net 461 431 0 0
Total nonperforming assets 34,863 25,802 22,165 7,066
2006
(Dollars in thousands, except
per share data) 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
December 31, 2007
Annualized
Average Average
Balances Interest Yield/Rate
Assets
Residential mortgage loans $453,568 $7,130 6.29%
Residential construction loans 163,922 2,817 6.82
Commercial mortgage loans 649,101 11,642 7.12
Commercial construction loans 252,705 5,226 8.20
Commercial loans and leases 339,744 6,892 8.06
Consumer loans 374,572 6,374 6.75
Total loans and leases 2,233,612 40,081 7.13
Securities 451,168 6,959 6.07
Interest-bearing deposits with banks 3,557 42 4.64
Federal funds sold 37,464 437 4.62
TOTAL EARNING ASSETS 2,725,801 47,519 6.92% Less: allowance for loan and lease
losses (23,791)
Cash and due from banks 53,839
Premises and equipment, net 55,033
Other assets 195,204
Total assets $3,006,086 Liabilities and Stockholders' Equity
Interest-bearing demand deposits $236,251 $182 0.31%
Regular savings deposits 153,791 114 0.29
Money market savings deposits 735,526 6,460 3.48
Time deposits 717,587 7,897 4.37
Total interest-bearing deposits 1,843,155 14,653 3.15
Borrowings 379,232 4,056 4.25
TOTAL INTEREST-BEARING LIABILITIES 2,222,387 18,709 3.34 Noninterest-bearing demand deposits 439,967
Other liabilities 33,127
Stockholder's equity 310,605
Total liabilities and stockholders'
equity $3,006,086 Net interest income and spread 28,810 3.58%
Less: tax equivalent adjustment 1,410
Net interest income 27,400 Interest income/earning assets 6.92%
Interest expense/earning assets 2.73
Net interest margin 4.19%
Three Months Ended
December 31, 2006
Annualized
Average Average
Balances Interest Yield/Rate Assets
Residential mortgage loans $407,277 $6,053 5.95%
Residential construction loans 162,084 2,989 7.32
Commercial mortgage loans 504,698 9,411 7.40
Commercial construction loans 189,027 4,353 9.14
Commercial loans and leases 205,582 4,311 8.33
Consumer loans 346,030 6,089 6.98
Total loans and leases 1,814,698 33,206 7.27
Securities 544,877 8,039 5.82
Interest-bearing deposits with banks 8,017 105 5.20
Federal funds sold 48,528 650 5.31
TOTAL EARNING ASSETS 2,416,120 42,000 6.89% Less: allowance for loan and lease
losses (19,354)
Cash and due from banks 48,165
Premises and equipment, net 46,550
Other assets 118,542
Total assets $2,610,023 Liabilities and Stockholders' Equity
Interest-bearing demand deposits $218,005 $160 0.29%
Regular savings deposits 163,525 131 0.32
Money market savings deposits 495,365 4,553 3.65
Time deposits 686,399 7,644 4.42
Total interest-bearing deposits 1,563,294 12,488 3.17
Borrowings 374,391 4,282 4.54
TOTAL INTEREST-BEARING LIABILITIES 1,937,685 16,770 3.43 Noninterest-bearing demand deposits 407,659
Other liabilities 24,758
Stockholder's equity 239,921
Total liabilities and
stockholders' equity $2,610,023 Net interest income and spread 25,230 3.46%
Less: tax equivalent adjustment 1,625
Net interest income 23,605 Interest income/earning assets 6.89%
Interest expense/earning assets 2.75
Net interest margin 4.14%
* 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 a
marginal state income tax rate of 6.55% (or a combined marginal federal
and state rate of 39.26%) for 2007 and a marginal state income tax rate
of 7.00% (or a combined marginal federal and state rate of 39.55%) for
2006, 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 $5.6 million in 2007 and
$6.5 million in 2006. Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent) Twelve Months Ended
December 31, 2007
Annualized
Average Average
Balances Interest Yield/Rate Assets
Residential mortgage loans $431,563 $26,394 6.12%
Residential construction loans 154,578 11,047 7.15
Commercial mortgage loans 624,080 44,992 7.21
Commercial construction loans 235,250 20,828 8.85
Commercial loans and leases 302,671 24,910 8.23
Consumer loans 365,334 25,367 6.94
Total loans and leases 2,113,476 153,538 7.26
Securities 495,928 29,663 5.98
Interest-bearing deposits with banks 21,600 1,123 5.20
Federal funds sold 42,305 2,157 5.10
TOTAL EARNING ASSETS 2,673,309 186,481 6.98% Less: allowance for loan and lease
losses (22,771)
Cash and due from banks 54,294
Premises and equipment, net 52,604
Other assets 178,015
Total assets $2,935,451 Liabilities and Stockholders' Equity
Interest-bearing demand deposits $236,940 808 0.34%
Regular savings deposits 165,134 535 0.32
Money market savings deposits 643,047 23,809 3.70
Time deposits 768,005 34,764 4.53
Total interest-bearing deposits 1,813,126 59,916 3.30
Borrowings 361,884 16,233 4.49
TOTAL INTEREST-BEARING LIABILITIES 2,175,010 76,149 3.50
Noninterest-bearing demand deposits 440,853
Other liabilities 29,364
Stockholder's equity 290,224
Total liabilities and
stockholders' equity $2,935,451 Net interest income and spread 110,332 3.48%
Less: tax equivalent adjustment 5,506
Net interest income 104,826 Interest income/earning assets 6.98%
Interest expense/earning assets 2.85
Net interest margin 4.13%
Twelve Months Ended
December 31, 2006
Annualized
Average Average
Balances Interest Yield/Rate Assets
Residential mortgage loans $422,347 $24,581 5.82%
Residential construction loans 166,079 12,142 7.31
Commercial mortgage loans 458,040 33,106 7.23
Commercial construction loans 200,270 17,592 8.78
Commercial loans and leases 197,650 15,959 8.07
Consumer loans 344,316 23,172 6.73
Total loans and leases 1,788,702 126,552 7.08
Securities 559,350 31,930 5.71
Interest-bearing deposits with banks 2,501 123 4.92
Federal funds sold 21,145 1,081 5.12
TOTAL EARNING ASSETS 2,371,698 159,686 6.73% Less: allowance for loan and lease
losses (18,584)
Cash and due from banks 46,741
Premises and equipment, net 45,980
Other assets 117,838
Total assets $2,563,673 Liabilities and Stockholders' Equity
Interest-bearing demand deposits $226,699 657 0.29%
Regular savings deposits 182,610 687 0.38
Money market savings deposits 409,578 12,655 3.09
Time deposits 631,712 25,335 4.01
Total interest-bearing deposits 1,450,599 39,334 2.71
Borrowings 451,251 19,353 4.29
TOTAL INTEREST-BEARING LIABILITIES 1,901,850 58,687 3.08
Noninterest-bearing demand deposits 415,747
Other liabilities 16,716
Stockholder's equity 229,360
Total liabilities and
stockholders' equity $2,563,673 Net interest income and spread 100,999 3.65%
Less: tax equivalent adjustment 6,243
Net interest income 94,756 Interest income/earning assets 6.73%
Interest expense/earning assets 2.47
Net interest margin 4.26%
* 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 a
marginal state income tax rate of 6.55% (or a combined marginal federal
and state rate of 39.26%) for 2007 and a marginal state income tax rate
of 7.00% (or a combined marginal federal and state rate of 39.55%) for
2006, 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 $5.5 million in 2007 and
$6.2 million in 2006. http://www.newscom.com/cgi-bin/prnh/20010424/SSPRINGLOGO-a http://photoarchive.ap.org/ DATASOURCE: Sandy Spring Bancorp CONTACT: Hunter R. Hollar, President & Chief Executive Officer, , or Philip J. Mantua, Executive V.P. & Chief Financial Officer, , both of Sandy Spring Bancorp, Inc., +1-800-399-5919 Web site: http://www.sandyspringbank.com/
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