SEGMENT REPORTING

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

SEGMENT REPORTING

Note 23 - Segment Reporting

Currently, the Company conducts business in three operating segments—Community Banking, Insurance and Investment Management. Each of the operating segments is a strategic business unit that offers different products and services. The Insurance and Investment Management segments were businesses that were acquired in separate transactions where management of acquisition was retained. The accounting policies of the segments are the same as those of the Company. However, the segment data reflect inter-segment transactions and balances.

The Community Banking segment is conducted through Sandy Spring Bank and involves delivering a broad range of financial products and services, including various loan and deposit products to both individuals and businesses. Parent company income is included in the Community Banking segment, as the majority of effort of these functions is related to this segment. Major revenue sources include net interest income, gains on sales of mortgage loans, trust income, fees on sales of investment products and service charges on deposit accounts. Expenses include personnel, occupancy, marketing, equipment and other expenses. Non-cash charges associated with amortization of intangibles related to the acquired entities for the years ended December 31, 2014, 2013and 2012, amounted to $0.4 million, $1.4 million and $1.4 million, respectively.

The Insurance segment is conducted through Sandy Spring Insurance Corporation, a subsidiary of the Bank, and offers annuities as an alternative to traditional deposit accounts. Sandy Spring Insurance Corporation operates Sandy Spring Insurance, a general insurance agency located in Annapolis, Maryland, and Neff and Associates, located in Ocean City, Maryland. Major sources of

revenue are insurance commissions from commercial lines, personal lines, and medical liability lines. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles related to the acquired entities was not significant for the years ended December 31, 2014, 2013and 2012, respectively.

The Investment Management segment is conducted through West Financial Services, Inc., a subsidiary of the Bank. This asset management and financial planning firm, located in McLean, Virginia, provides comprehensive investment management and financial planning to individuals, families, small businesses and associations including cash flow analysis, investment review, tax planning, retirement planning, insurance analysis and estate planning. West Financial currently has approximately $1.0billion in assets under management. Major revenue sources include non-interest income earned on the above services. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles related to the acquired entities was not significant for the years ended December 31, 2014, 2013and 2012, respectively.

Information for the operating segments and reconciliation of the information to the consolidated financial statements for the years ended December 31 is presented in the following tables:

	2014
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	148,366	$	6	$	11	$	(17)	$	148,366
Interest expense		18,835		-		-		(17)		18,818
Provision (credit) for loan and lease losses		(163)		-		-		-		(163)
Non-interest income		38,388		5,386		6,798		(3,701)		46,871
Non-interest expenses		115,577		5,290		3,634		(3,701)		120,800
Income before income taxes		52,505		102		3,175		-		55,782
Income tax expense		16,300		43		1,239		-		17,582
Net income	$	36,205	$	59	$	1,936	$	-	$	38,200
Assets	$	4,399,133	$	5,842	$	11,913	$	(19,756)	$	4,397,132

	2013
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	149,347	$	9	$	16	$	(25)	$	149,347
Interest expense		19,458		-		-		(25)		19,433
Provision (credit) for loan and lease losses		(1,084)		-		-		-		(1,084)
Non-interest income		36,588		5,280		6,284		(641)		47,511
Non-interest expenses		104,392		4,392		3,381		(641)		111,524
Income before income taxes		63,169		897		2,919		-		66,985
Income tax expense		21,060		363		1,140		-		22,563
Net income	$	42,109	$	534	$	1,779	$	-	$	44,422
Assets	$	4,143,368	$	13,990	$	18,132	$	(69,390)	$	4,106,100

	2012
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	143,870	$	8	$	12	$	(20)	$	143,870
Interest expense		22,671		-		-		(20)		22,651
Provision (credit) for loan and lease losses		3,649		-		-		-		3,649
Non-interest income		42,312		4,837		5,620		(5,813)		46,956
Non-interest expenses		108,421		4,190		3,129		(5,813)		109,927
Income before income taxes		51,441		655		2,503		-		54,599
Income tax expense		16,807		266		972		-		18,045
Net income	$	34,634	$	389	$	1,531	$	-	$	36,554
Assets	$	3,964,926	$	13,452	$	16,341	$	(39,513)	$	3,955,206