SEGMENT REPORTING

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING

Note 15 - 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 the acquired business 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 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 was not significant for the three and nine months ended September 30, 2016 and 2015, 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 were not significant for the three and nine months ended September 30, 2016 and 2015, 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 $1.1 billion 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 were not significant for the three and nine months ended September 30, 2016 and 2015, respectively.

Information for the operating segments and reconciliation of the information to the condensed consolidated financial statements for the periods indicated is presented in the following tables:

	Three Months Ended September 30, 2016
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	42,856	$	1	$	2	$	(2)	$	42,857
Interest expense		5,128		-		-		(2)		5,126
Provision for loan losses		781		-		-		-		781
Noninterest income		9,071		1,783		1,909		(179)		12,584
Noninterest expense		26,822		1,510		1,173		(179)		29,326
Income before income taxes		19,196		274		738		-		20,208
Income tax expense		6,339		108		287		-		6,734
Net income	$	12,857	$	166	$	451	$	-	$	13,474
Assets	$	4,811,948	$	7,986	$	12,064	$	(21,387)	$	4,810,611

	Three Months Ended September 30, 2015
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	40,318	$	-	$	1	$	(2)	$	40,317
Interest expense		5,203		-		-		(2)		5,201
Provision for loan losses		1,706		-		-		-		1,706
Non-interest income		9,106		1,716		1,749		(181)		12,390
Non-interest expense		27,318		1,480		1,013		(181)		29,630
Income before income taxes		15,197		236		737		-		16,170
Income tax expense		4,786		101		288		-		5,175
Net income	$	10,411	$	135	$	449	$	-	$	10,995
Assets	$	4,612,413	$	5,788	$	11,135	$	(18,302)	$	4,611,034

	Nine Months Ended September 30, 2016
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	126,313	$	2	$	4	$	(6)	$	126,313
Interest expense		15,734		-		-		(6)		15,728
Provision for loan losses		4,974		-		-		-		4,974
Noninterest income		29,426		4,186		5,621		(535)		38,698
Noninterest expense		86,201		3,711		3,137		(535)		92,514
Income before income taxes		48,830		477		2,488		-		51,795
Income tax expense		15,701		191		969		-		16,861
Net income	$	33,129	$	286	$	1,519	$	-	$	34,934
Assets	$	4,811,948	$	7,986	$	12,064	$	(21,387)	$	4,810,611

	Nine Months Ended September 30, 2015
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	117,238	$	1	$	4	$	(5)	$	117,238
Interest expense		14,821		-		-		(5)		14,816
Provision for loan losses		3,521		-		-		-		3,521
Non-interest income		43,887		4,394		5,313		(15,936)		37,658
Non-interest expense		97,294		4,032		2,961		(15,936)		88,351
Income before income taxes		45,489		363		2,356		-		48,208
Income tax expense		14,583		153		919		-		15,655
Net income	$	30,906	$	210	$	1,437	$	-	$	32,553
Assets	$	4,612,413	$	5,788	$	11,135	$	(18,302)	$	4,611,034