-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FRcLQdN2HkhlxJLjLjI60MaxNYe6jmw29b7Xc5MJtv+5aTkki3IPHtGCCA/zZ9Ap tlf7LhuzFhamQSAUR8bIAg== 0000928385-96-001211.txt : 19960916 0000928385-96-001211.hdr.sgml : 19960916 ACCESSION NUMBER: 0000928385-96-001211 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960829 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960913 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SANDY SPRING BANCORP INC CENTRAL INDEX KEY: 0000824410 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 520312970 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19065 FILM NUMBER: 96629638 BUSINESS ADDRESS: STREET 1: 17801 GEORGIA AVE CITY: OLNEY STATE: MD ZIP: 20832 BUSINESS PHONE: 3017746400 MAIL ADDRESS: STREET 1: 17801 GEORGIA AVENUE CITY: OLNEY STATE: MD ZIP: 20832 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 29, 1996 --------------- Sandy Spring Bancorp, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 0-19065 52-1532952 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission file (IRS Employer of incorporation) number) Identification Number) 17801 Georgia Avenue, Olney, Maryland 20832 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (301) 774-6400 -------------- Item 2. Acquisition or Disposition of Assets. - ---------------------------------------------- Effective at 5:00 p.m. on August 29, 1996, Sandy Spring Bancorp, Inc. ("Bancorp") consummated its acquisition of Annapolis Bancshares, Inc. ("ABI") and ABI's wholly owned state trust company subsidiary, Bank of Annapolis, Annapolis, Maryland ("BOA") through the merger of ABI into Bancorp and BOA into Sandy Spring National Bank of Maryland, Olney, Maryland (the "Bank"), a wholly owned subsidiary of Bancorp. Upon consummation of the merger of ABI with and into Bancorp, each outstanding share of ABI common stock, par value $1.00 per share was converted into .62585 shares of Bancorp common stock, par value $1.00 per share, with cash to be paid in lieu of fractional share interests. The Annapolis office of BOA will be operated as a branch of the Bank. For additional information, see the Press Release dated August 30, 1996, filed as Exhibit 99.1 hereto. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. - -------------------------------------------------------------------------- (a) Audited Consolidated Financial Statements of Annapolis Bancshares, Inc. for the year ended December 31, 1995 (including consolidated balance sheets for the years ended December 31, 1995 and 1994, and consolidated statements of income and cash flows for each of the years ended December 31, 1995, 1994, and 1993) are incorporated by reference to the Annual Report to Shareholders of Annapolis Bancshares, Inc. for the year ended December 31, 1995, filed as Appendix C to the Prospectus contained within the Sandy Spring Bancorp, Inc. Registration Statement on Form S-4 (No. 333-7521). Unaudited Consolidated Financial Statements of Annapolis Bancshares, Inc. for the six months ended June 30, 1996 and 1995 (including consolidated statements of income and cash flows for such periods and a consolidated balance sheet as of June 30, 1996) are incorporated by reference to the Annapolis Bancshares, Inc. Report on Form 10-Q filed for the Quarterly Period Ended June 30, 1996 (Commission File No. 0-25710). (b) Unaudited Pro-Forma Financial Information, including a pro-forma combined balance sheet as of June 30, 1996 and unaudited pro forma combined statements of income for the six months ended June 30, 1996 and 1995 and for each of the years ended December 31, 1995, 1994 and 1993 follow. (c) Exhibit 2 - Agreement and Plan of Reorganization dated as of April 16, 1996 among Sandy Spring Bancorp, Inc., Sandy Spring National Bank of Maryland, Annapolis Bancshares, Inc. and The Bank of Annapolis, incorporated by reference to Exhibit 2 to Sandy Spring Bancorp, Inc. Registration Statement on Form S-4 (No. 333-7521). Exhibit 23 - Consent of Rowles & Company, LLP Exhibit 99.1 - Press Release dated August 30, 1996 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SANDY SPRING BANCORP, INC. By: /s/ Hunter R. Hollar ------------------------------- Hunter R. Hollar, President and Chief Executive Officer Dated: September 13, 1996 UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION The unaudited pro forma combined balance sheets and the unaudited pro forma combined statements of income of Sandy Spring Bancorp, Inc. ("Sandy Spring") set forth below give effect, using the pooling of interests method of accounting, to the merger of Annapolis Bancshares, Inc. ("ABI") with and into Sandy Spring (the "Merger") based upon the exchange ratio of 0.62585 shares of Sandy Spring Common Stock for each share of ABI Common Stock outstanding as of each respective period end. For calculations of earnings per share the exchange ratio was applied to average ABI shares outstanding for the period. The unaudited pro forma balance sheets are presented as though the Merger had occurred on June 30, 1996. The unaudited pro forma combined income statements are presented as though the Merger had occurred on January 1, 1993. The Merger actually was consummated on August 29, 1996. The unaudited pro forma financial information set forth below is for illustrative purposes only, and therefore is not necessarily indicative of the financial condition or results of operations of Sandy Spring as they would have been had the Merger occurred during the periods presented or as they may be in the future. Under generally accepted accounting principles, all costs incurred to effect a combination accounted for as a pooling of interests are expenses of the combined enterprise and, accordingly, are charged to expense and deducted in determining the results of operations of the combined entity. Specific one-time costs associated with the Merger that will cause significant reductions to the combined entity's results of operations in the initial period following consummation of the Merger include change in control and severance payments, registration and application fees, legal, accounting and advisory fees and expenses, and costs of combining the operations of ABI and Sandy Spring, which are estimated to amount to approximately $663,000 on a pretax basis, and $541,000 net of related tax effects. The amounts shown on the Unaudited Pro Forma Combined Balance Sheets of Sandy Spring and ABI have been calculated by adding the balances from the historical unaudited consolidated balance sheets of Sandy Spring and ABI as of June 30, 1996, and adjusting for the specific one time costs associated with the Merger and the effects of the issuance of Sandy Spring Common Stock and the cancellation of ABI Common Stock in the Merger. The amounts shown on the Unaudited Pro Forma Combined Statements of Income have been calculated by adding the amounts from the historical statements of income of Sandy Spring and ABI for the indicated periods, without reduction for the specific one time costs of the Merger. Earnings per share amounts have been based upon the pro forma weighted average number of common shares outstanding at the Conversion Ratio of 0.62585 shares of Sandy Spring Common Stock for each share of ABI Common Stock. UNAUDITED PRO FORMA COMBINED BALANCE SHEETS At June 30, 1996
ABI Adjustments Pro Forma Sandy Spring --- ----------- Combined ------------ (Dollars in thousands) -------- ---------------------- ASSETS Cash and due from banks $ 30,464 $ 84 $ - $ 30,548 Interest-bearing deposits with banks 6,025 17 6,042 Federal funds sold 23,259 2,417 25,676 Residential mortgage loans held for sale 2,773 497 3,270 Investments available for sale (at fair value) 184,927 - 184,927 Investments held to maturity 121,961 459 122,420 Other equity securities 3,965 982 4,947 Total loans (net of unearned income) 438,099 74,003 512,102 Less: Allowance for credit losses (6,033) (745) (6,778) ----------- ---------- ----------- Net loans 432,066 73,258 - 505,324 Premises and equipment 18,072 1,909 19,981 Accrued interest receivable 6,460 668 7,128 Other real estate owned, net of all allowance 93 - 93 Other assets 5,227 772 - 5,999 ------------ ---------- ------------ ----------- TOTAL ASSETS $ 835,292 $ 81,063 $ - $ 916,355 ============ ========== ============ =========== LIABILITIES Noninterest-bearing deposits $ 103,089 $ 2,037 $ - $ 105,126 Interest-bearing deposits 604,822 63,722 668,544 ------------ ---------- ----------- Total deposits 707,911 65,759 773,670 Short-term borrowings 38,766 5,000 43,766 Long-term borrowings 5,136 - 5,136 Accrued interest and other liabilities 2,512 707 541 (1) 3,760 ------------ ---------- ----------- ----------- TOTAL LIABILITIES 754,325 71,466 541 826,332 ------------ ---------- ----------- ----------- STOCKHOLDERS' EQUITY Common stock, $1 par value, authorized 15,000,000 shares; outstanding 4,381,584 actual shares and 4,877,617 pro forma combined shares 4,382 496 (2) 4,878 Common stock, $1 par value, authorized 5,000,000 shares; outstanding 792,575 793 (793) (2) - shares - Surplus 27,090 5,407 297 (2) 32,794 Retained earnings 50,559 3,397 (541) (1) 53,415 Net unrealized loss on investments available-for-sale (1,064) - - (1,064) ----------- ---------- ---------- ----------- TOTAL STOCKHOLDERS' EQUITY 80,967 9,597 (541) 90,023 ----------- ---------- ---------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 835,292 $ 81,063 $ - $ 916,355 ----------- ---------- ---------- -----------
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME Six Months Ended June 30, 1996 (Dollars in thousands, except for per share data)
Pro Forma Sandy Spring ABI Combined ------------ --- ----------- Interest income: Interest and fees on loans $ 19,120 $ 3,762 $ 22,882 Interest on loans held for sale 82 - 82 Interest on deposits with banks 97 - 97 Interest and dividends on securities: Taxable 6,997 62 7,059 Nontaxable 1,692 2 1,694 Interest on federal funds sold 626 103 729 ---------- -------- ----------- TOTAL INTEREST INCOME 28,614 3,929 32,543 Interest expense: Interest on deposits 12,215 1,690 13,905 Interest on short-term borrowings 720 136 856 Interest on long-term borrowings 150 - 150 ---------- -------- ----------- TOTAL INTEREST EXPENSE 13,085 1,826 14,911 ---------- -------- ----------- NET INTEREST INCOME 15,529 2,103 17,632 Provision for credit losses 150 58 208 ---------- -------- ----------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 15,379 2,045 17,424 Noninterest income: Securities gains(losses) - (51) (51) Service charges on deposit accounts 1,369 22 1,391 Gains on mortgage sales 341 103 444 Other income 1,427 1 1,428 ---------- ------- ----------- TOTAL NONINTEREST INCOME 3,137 75 3,212 Noninterest expenses: Salaries and employee benefits 6,354 674 7,028 Occupancy expense of premises 1,054 (20) 1,034 Equipment expenses 1,009 42 1,051 FDIC insurance expense 1 1 2 Outside data services 436 31 467 Other expenses 2,264 186 2,450 ---------- ------- ----------- TOTAL NONINTEREST EXPENSES 11,118 914 12,032 ---------- ------- ----------- Income before income taxes 7,398 1,206 8,604 Income tax expense 2,360 466 2,826 ---------- ------- ----------- NET INCOME $ 5,038 $ 740 $5,778 ========== ======= =========== NET INCOME PER COMMON SHARE $ 1.16 $ 0.93 $ 1.19/2/ ========== ======= =========== Weighted average shares outstanding 4,358,402 792,879 4,854,625/2/ ========== ======= ===========
See Notes to Pro Forma Combined Financial Information UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME Six Months Ended June 30, 1995 (Dollars in thousands, except for per share data)
Pro Forma Sandy Spring ABI Combined ------------ --- --------- Interest income: Interest and fees on loans $ 18,082 $ 2,864 $ 20,946 Interest on loans held for sale 5 - 5 Interest on deposits with banks 5 - 5 Interest and dividends on securities: Taxable 6,718 151 6,869 Nontaxable 1,759 2 1,761 Interest on federal funds sold 304 93 397 --------- -------- --------- TOTAL INTEREST INCOME 26,873 3,110 29,983 Interest expense: Interest on deposits 11,208 1,410 12,618 Interest on short-term borrowings 1,291 30 1,321 Interest on long-term borrowings 110 75 185 --------- -------- --------- TOTAL INTEREST EXPENSE 12,609 1,515 14,124 --------- -------- --------- NET INTEREST INCOME 14,264 1,595 15,859 Provision for credit losses - 98 98 NET INTEREST INCOME AFTER PROVISION --------- -------- --------- FOR CREDIT LOSSES 14,264 1,497 15,761 Noninterest income: Securities (losses) (5) - (5) Service charges on deposit accounts 1,212 18 1,230 Gain(Loss) on mortgage sales 27 (7) 20 Other income 971 4 975 --------- -------- --------- TOTAL NONINTEREST INCOME 2,205 15 2,220 Noninterest expenses: Salaries and employee benefits 5,500 497 5,997 Occupancy expense of premises 939 (24) 915 Equipment expenses 892 42 934 FDIC insurance expense 722 63 785 Outside data services 319 30 349 Other expenses 1,892 182 2,074 ---------- -------- --------- TOTAL NONINTEREST EXPENSES 10,264 790 11,054 ---------- -------- --------- Income before income taxes 6,205 722 6,927 Income tax expense 1,894 279 2,173 ---------- -------- --------- NET INCOME $ 4,311 $ 443 $ 4,754 ---------- -------- --------- NET INCOME PER COMMON SHARE $ 1.00 $ 0.63 $ 1.00/2/ ---------- -------- --------- Weighted average shares outstanding 4,293,060 703,219 4,733,170/2/ ---------- -------- ---------
See Notes to Pro Forma Combined Financial Information UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME Year Ended December 31, 1995 (Dollars in thousands, except for per share data)
Pro Forma Sandy Spring ABI Combined -------------------------------------------- Interest income: Interest and fees on loans $ 37,576 $ 6,350 $ 43,926 Interest on loans held for sale 55 - 55 Interest on deposits with banks 35 4 39 Interest and dividends on securities: Taxable 13,471 298 13,769 Nontaxable 3,450 4 3,454 Interest on federal funds sold 654 218 872 ---------- -------- --------------- Total interest income 55,241 6,874 62,115 Interest expense: Interest on deposits 23,604 3,101 26,705 Interest on short-term borrowings 2,175 111 2,286 Interest on long-term borrowings 219 132 351 ---------- -------- --------------- Total interest expense 25,998 3,344 29,342 ---------- -------- --------------- Net interest income 29,243 3,530 32,773 Provision for credit losses - 180 180 Net interest income after provision for credit losses 29,243 3,350 32,593 ---------- -------- --------------- Noninterest income: Securities losses (240) (39) (279) Service charges on deposit 2,533 36 2,569 accounts Gains on mortgage sales 232 12 244 Other income 1,921 23 1,944 ---------- -------- --------------- Total noninterest income 4,446 32 4,478 Noninterest expenses: Salaries and employee benefits 11,630 1,096 12,726 Occupancy expense of premises 1,881 (67) 1,814 Equipment expenses 1,867 76 1,943 FDIC insurance expense 752 66 818 Outside data services 737 48 785 Other expenses 3,920 418 4,338 ---------- -------- --------------- Total noninterest expenses 20,787 1,637 22,424 ---------- -------- --------------- Income before income taxes 12,902 1,745 14,647 Income tax expense 3,979 674 4,653 ---------- -------- --------------- Net income $ 8,923 $ 1,071 $ 9,994 ========== ======== =============== Net income per common share $ 2.07 $ 1.42 $ 2.09/(2)/ ========== ======== =============== Weighted average shares outstanding 4,303,287 748,709 4,771,867/(2)/
See Notes to Pro Forma Combined Financial Information. UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME Year Ended December 31, 1994 (Dollars in thousands, except for per share data)
Pro Forma Sandy Spring ABI Combined ------------------------------------------- Interest income: Interest and fees on loans $ 27,672 $ 4,922 $ 32,594 Interest on loans held for sale 57 - 57 Interest on deposits with banks 37 1 38 Interest and dividends on securities: Taxable 14,030 269 14,299 Nontaxable 4,037 4 4,041 Interest on federal funds sold 431 118 549 ---------- -------- --------------- Total interest income 46,264 5,314 51,578 Interest expense: Interest on deposits 17,864 2,168 20,032 Interest on short-term borrowings 1,165 149 1,314 Interest on long-term borrowings 150 - 150 ---------- -------- --------------- Total interest expense 19,179 2,317 21,496 ---------- -------- --------------- Net interest income 27,085 2,997 30,082 Provision for credit losses 160 52 212 ---------- -------- --------------- Net interest income after provision for credit losses 26,925 2,945 29,870 ---------- -------- --------------- Noninterest income: Securities losses (84) - (84) Service charges on deposit accounts 2,308 40 2,348 Gains on mortgage sales 164 11 175 Other income 1,741 9 1,750 ---------- -------- --------------- Total noninterest income 4,129 60 4,189 Noninterest expenses: Salaries and employee benefits 11,060 899 11,959 Occupancy expense of premises 1,828 77 1,905 Equipment expenses 1,545 72 1,617 FDIC insurance expense 1,388 122 1,510 Outside data services 582 48 630 Other expenses 3,492 349 3,841 ---------- -------- --------------- Total noninterest expenses 19,895 1,567 21,462 ---------- -------- --------------- Income before income taxes 11,159 1,438 12,597 Income tax expense 3,139 555 3,694 ---------- -------- --------------- Net income $ 8,020 $ 883 $ 8,903 ========== ======== =============== Net income per common share $ 1.89 $ 1.32 $ 1.90/(2)/ ========== ======== =============== Weighted average shares outstanding 4,248,186 700,240 4,686,431/(2)/
See Notes to Pro Forma Combined Financial Information. UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME Year Ended December 31, 1993 (Dollars in thousands, except for per share data)
Pro Forma Sandy Spring ABI Combined ------------------------------------------ Interest income: Interest and fees on loans $ 23,695 $ 4,220 $ 27,915 Interest on loans held for sale 300 - 300 Interest on deposits with banks 399 - 399 Interest and dividends on securities: Taxable 12,350 115 12,465 Nontaxable 4,247 - 4,247 Interest on federal funds sold 683 180 863 ---------- -------- --------------- Total interest income 41,674 4,515 46,189 Interest expense: Interest on deposits 16,990 2,082 19,072 Interest on short-term borrowings 641 - 641 Interest on long-term borrowings 64 16 80 ---------- -------- --------------- Total interest expense 17,695 2,098 19,793 ---------- -------- --------------- Net interest income 23,979 2,417 26,396 Provision for credit losses 950 106 1,056 ---------- -------- --------------- Net interest income after provision for credit losses 23,029 2,311 25,340 ---------- -------- --------------- Noninterest income: Securities gains 257 - 257 Service charges on deposit accounts 2,028 24 2,052 Gains on mortgage sales 976 29 1,005 Other income 1,547 9 1,556 ---------- -------- --------------- Total noninterest income 4,808 62 4,870 Noninterest expenses: Salaries and employee benefits 9,066 673 9,739 Occupancy expense of premises 1,598 162 1,760 Equipment expenses 1,252 56 1,308 FDIC insurance expense 1,275 104 1,379 Outside data services 519 42 561 Other expenses 3,232 361 3,593 ---------- -------- --------------- Total noninterest expenses 16,942 1,398 18,340 ---------- -------- --------------- Income before income taxes 10,895 975 11,870 Income tax expense 2,888 373 3,261 ---------- -------- --------------- Net income $ 8,007 $ 602 $ 8,609 ========== ======== =============== Net income per common share $ 1.95 $ 1.05 $ 1.92/(2)/ ========== ======== =============== Weighted average shares outstanding 4,117,220 572,536 4,475,542/(2)/
See Notes to Pro Forma Combined Financial Information. NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION (Unaudited) (1) Specific, one time expenses to effect the Merger of approximately $541,000, net of related tax effects, have been reflected in the Pro Forma Combined Balance Sheets as of June 30, 1996. (2) Based on an Exchange Ratio of 0.62585 shares of Sandy Spring Common Stock for each share of ABI Common Stock. EX-23.1 2 EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We hereby consent to the use of our report dated February 7, 1996, on the audit of the consolidated financial statements described therein of Annapolis Bancshares, Inc. in the Current Report on Form 8-K filed by Sandy Spring Bancorp, Inc. with the Securities and Exchange Commission in connection with the consummation of the acquisition by Sandy Spring Bancorp, Inc. of Annapolis Bancshares, Inc. ROWLES & COMPANY, LLP /s/ Rowles & Company, LLP Baltimore, Maryland September 12, 1996 EX-99.1 3 EXHIBIT 99.1 Exhibit 99.1 SANDY SPRING BANCORP, INC. _________________ FOR IMMEDIATE RELEASE CONTACTS: Hunter R. Hollar President and Chief Executive Officer or James H. Langmead Vice President and Treasurer (301) 774-6400 SANDY SPRING BANCORP ACQUIRES BANK OF ANNAPOLIS August 30, 1996, Olney, Maryland . . . . Sandy Spring Bancorp, Inc. (NASDAQ National Market--SASR) today announced the completion of the acquisition of Annapolis Bancshares, Inc. (NASDAQ--ANNB), and the merger of Annapolis Bancshares into Sandy Spring Bancorp. Under the terms of the agreement that governs the merger, each outstanding share of Annapolis Bancshares common stock has been converted into 0.62585 shares of Sandy Spring Bancorp common stock. Sandy Spring Bancorp common stock has a recent market price of $35.50 per share. In addition, Bank of Annapolis, the wholly owned bank subsidiary of Annapolis Bancshares, has been merged into Sandy Spring National Bank of Maryland. After these mergers, Sandy Spring Bancorp's consolidated assets total approximately $915 million, based upon recent financial statements. Hunter R. Hollar, President and Chief Executive Officer of Sandy Spring Bancorp, stated, "We are pleased to enter Annapolis through merger with a strong and profitable community institution. We intend to keep the hometown approach of Bank of Annapolis under the banner of Sandy Spring National Bank as we grow in the Annapolis and Anne Arundel County communities." Sandy Spring Bancorp expects the merger will result in a positive impact on consolidated net income and have a minimal effect on its earnings per share in the first year after the acquisition. Sandy Spring Bancorp is the bank holding company for Sandy Spring National Bank of Maryland, which has 17 banking offices in Montgomery and Howard Counties in Maryland. With consummation of this merger, the single Bank of Annapolis office with become the 18th community banking office of Sandy Spring National Bank of Maryland. # # # # -----END PRIVACY-ENHANCED MESSAGE-----