-----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, QkBRMnwMrEk+LHGOwDbW8R2nveLXGx/lIZRKJU7GMaYuX2SuRvzBknVy9UBur4F1 4183R1BfWpZ0C/KqmW9epQ== 0000930413-04-003254.txt : 20040715 0000930413-04-003254.hdr.sgml : 20040715 20040715115501 ACCESSION NUMBER: 0000930413-04-003254 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040715 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040715 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: 04915238 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 c32954_8k.txt 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): JULY 15, 2004 ------------- 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 7. FINANCIAL STATEMENTS AND EXHIBITS. - ----------------------------------------- (a) Exhibit 99 - News Release dated July 15, 2004. ITEM 9. REGULATION FD DISCLOSURE. - -------------------------------- ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. - ------------------------------------------------------ The news release of Sandy Spring Bancorp, Inc. dated July 15, 2004, included as Exhibit 99 is furnished to the Securities and Exchange Commission under both Item 9 and Item 12 of this Form 8-K. Non-GAAP Financial Measure. Exhibit 99 includes disclosure and discussion of a traditional efficiency ratio that is a non-GAAP financial measure as defined in Commission Regulation G and Item 10 of Commission Regulation S-K. The issuer has for many years used this traditional efficiency ratio as a measure of operating expense control and efficiency of operations. Management believes that this traditional ratio better focuses attention on the operating performance of the issuer over time than does a GAAP based ratio, and is highly useful in comparing period-to-period operating performance of the Company's core business operations. It is used by management as part of its assessment of its performance in managing noninterest expenses. However this measure is supplemental, and is not a substitute for an analysis of performance measures based on GAAP. Exhibit 99 also includes disclosure and discussion of the GAAP-based efficiency ratio and the differences between the two ratios. The traditional efficiency ratio used by the issuer may not be comparable to GAAP or non-GAAP efficiency ratios reported by other financial institutions. 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: HUNTER R. HOLLAR --------------------------- Hunter R. Hollar President and Chief Executive Officer Dated: July 15, 2004 EX-99 2 c32954_ex-99.txt Exhibit 99 [LOGO OMITTED] NEWS RELEASE FOR IMMEDIATE RELEASE SANDY SPRING BANCORP REPORTS SECOND QUARTER RESULTS OLNEY, MARYLAND, July 15, 2004 -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, today announced net income for the second quarter of 2004 of $6.4 million ($.43 per diluted share) compared to $8.7 million ($.60 per diluted share) for the second quarter of 2003, a 27% decrease. Net income for the six-month period ending June 30, 2004 totaled $13.7 million ($.93 per diluted share) compared to $17.1 million ($1.16 per diluted share) for the prior year period, a 20% decrease. The continuing effects of lower amounts of residential mortgage loan refinancings and net interest margin declines are causing weaker earnings in the short run. "Loans grew by 5% in the quarter and have grown by 18% over the past twelve months, signaling a movement toward more normalized core earnings as the dominant source of our revenue. The loan growth we are reporting underscores the strength of the infrastructure we have built to service the borrowing needs of our small business and middle-market clients. We believe we have reached a turning point beyond which margins are expected to improve and both loan growth and noninterest revenue will continue to ramp up," said Hunter R. Hollar, President and CEO of Sandy Spring Bancorp. "As always, we have been managing the institution for sustainable, consistent long-term performance and growth. We have continued to make foresighted management decisions and prudent investments in the business with the longer view in mind, as evidenced by the repositioning of the size and maturities of our investment portfolio and the planned growth in certain noninterest expense categories during the second quarter. These moves are expected to benefit future earnings and add to longer-term shareholder value." "Loan growth in all categories continued in the second quarter of 2004," said Hollar. "Deposit growth was also good, with total deposits growing 4% in the most recent quarter and are up 6% over the past twelve months. Noninterest income gains were solid with trust fees up 30% and insurance agency fees up 12% as compared to the second quarter of 2003. Asset quality remains very strong. The underlying attributes of a high-performing banking company are all still self-evident and our core engine is quite healthy as we enter the second half of the year with optimism in an ever-competitive marketplace." Return on average stockholders' equity was 13.07% for the second quarter of 2004, compared to 19.04% for the second quarter of 2003. Return on average assets for the second quarter of 2004 was 1.08%, compared to 1.50% for the second quarter of 2003. For the first six months of 2004, return on average stockholders' equity was 14.03% compared to 18.91% for the first six months of 2003. Return on average assets for the first six months of 2004 was 1.17% compared to 1.48% for the first six months of 2003. Comparing June 30, 2004 balances to June 30, 2003, total assets increased 2% to $2.4 billion. Total loans and leases grew 18% to $1.3 billion, while investment securities decreased 12% to $912 million. Total deposits increased 6% to $1.7 billion, while borrowings declined 6% to $534 million. During the same period, stockholders' equity increased 4% to $196 million or 8.1% of total assets. Due to continuing strong asset quality, there was no provision for credit losses in the first six months of 2004 or 2003. The Company's management will host a conference call to discuss its second 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 www.sandyspringbank.com. DETAILED REVIEW OF FINANCIAL RESULTS Comparing the second quarter of 2004 to 2003, net interest income decreased 2% due primarily to the lower interest rates on loans and investment securities and lower investment securities balances, offset in part by the effects of loan growth, reduced interest on deposits and borrowings and lower borrowing balances. The net interest margin declined to 3.58% in 2004 from 3.74% in 2003. Noninterest income decreased by $1.8 million or 18% versus 2003. Noninterest income includes investment gains, which decreased by $.4 million, and $1.1 million of income from early termination of a sublease in 2003. Lower levels of mortgage banking activity, following a sustained period of mortgage loan refinancings, have resulted in a decline in gains on sales of mortgage loans, which decreased 36% versus the prior year period. Offsetting part of the decline in mortgage banking revenues were increases of 12% in insurance agency commissions and 30% in trust revenues. Noninterest expenses were $18.2 million in the second quarter of 2004 compared to $16.6 million in 2003, a 9% increase. Noninterest expenses include the amortization of intangible assets of $0.5 million in 2004 compared to $0.7 million in the second quarter of 2003. The GAAP based efficiency ratio increased to 69.55% for the second quarter while the traditional non-GAAP efficiency ratio increased to 63.30%. The increases were primarily the result of the expense growth combined with the effect of the net interest margin contraction and the decrease in gains on sales of mortgage loans. Noninterest expenses increased primarily due to higher compensation and benefits costs, attributable to a larger staff and merit increases, together with increased occupancy and equipment expenses from a new office facility in Howard County and an expanded branch network. Comparing the first six months of 2004 and 2003, net interest income decreased by $.9 million or 2%, due primarily to the margin compression discussed above which resulted in a decline in the net interest margin to 3.70% for the first six months of 2004 compared to 3.84% for the same period in 2003. Noninterest income was $15.8 million for the six months ended June 30, 2004 versus $17.8 million for the same period in 2003, a decrease of $2.0 million or 11%. Noninterest income includes securities gains of $.3 million in 2004 and $.6 million in 2003, and the income from the early termination of a sublease. This decrease was due primarily to a 43% decrease in gains on sales of mortgage loans which was somewhat offset by increases of 18% in trust revenues, 11% in insurance agency commissions and 9% in fees on the sale of investment products. Other noninterest income increased $.4 million or 20% for the first six months of 2004 compared to 2003 due primarily to increases in gains on sales of other real estate owned, and gains on sales of SBA loans. Noninterest expenses were $34.9 million for the first six months of 2004 compared to $32.6 million for the same period in 2003, a 7% increase. Noninterest expenses include the amortization of intangible assets of $1.0 million for the first six months of 2004 compared to $1.3 million for the first six months of 2003. The GAAP based efficiency ratio increased to 66.8% for the first six months of 2004 while the traditional, non-GAAP efficiency ratio increased to 60.8%. These increases were mainly due to the expense growth mentioned above together with the decline in mortgage banking revenues and the net interest margin contraction. ABOUT SANDY SPRING BANCORP/SANDY SPRING BANK With $2.4 billion in assets, Sandy Spring Bancorp is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation and The Equipment Leasing Company. Sandy Spring Bancorp is the third 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 30 community offices and 45 ATMs located in Anne Arundel, Frederick, Howard, Montgomery, and Prince George's counties in Maryland. Visit www.sandyspringbank.com for more information. For additional information or questions, please contact: Hunter R. Hollar, President & Chief Executive Officer, or James H. Langmead, Executive V.P. & Chief Financial Officer Sandy Spring Bancorp 17801 Georgia Avenue Olney, Maryland 20832 1-800-399-5919 E-mail: HHollar@sandyspringbank.com JLangmead@sandyspringbank.com Web site: www.sandyspringbank.com 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 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 Six Months Ended June 30, June 30, ---------------------------- % -------------------------- % 2004 2003 Change 2004 2003 Change - --------------------------------------------------------------------------------------------------------------------- -------- PROFITABILITY FOR THE PERIOD: Net interest income $17,862 $18,247 (2) $36,488 $37,410 (2) Provision for credit losses 0 0 0 0 0 0 Noninterest income 8,241 10,050 (18) 15,800 17,807 (11) Noninterest expenses 18,155 16,623 9 34,925 32,580 7 Income before income taxes 7,948 11,674 (32) 17,363 22,637 (23) Net income 6,393 8,736 (27) 13,694 17,064 (20) Return on average assets 1.08% 1.50% 1.17% 1.48% Return on average equity 13.07% 19.04% 14.03% 18.91% Net interest margin 3.58% 3.74% 3.70% 3.84% Efficiency ratio - GAAP based* 69.55% 58.74% 66.79% 59.00% Efficiency ratio - traditional* 63.30% 56.02% 60.81% 54.40% PER SHARE DATA: Basic net income $0.44 $0.61 (28) $0.94 $1.18 (20) Diluted net income 0.43 0.60 (28) 0.93 1.16 (20) Dividends declared 0.19 0.18 6 0.38 0.36 6 Book value 13.51 13.04 4 13.51 13.04 4 Tangible book value 12.26 11.64 5 12.26 11.64 5 Average fully diluted shares 14,726,117 14,676,404 14,727,920 14,709,547 AT PERIOD-END: Assets $2,424,199 $2,368,446 2 $2,424,199 $2,368,446 2 Deposits 1,681,552 1,590,144 6 1,681,552 1,590,144 6 Loans and leases 1,267,346 1,069,688 18 1,267,346 1,069,688 18 Securities 912,208 1,037,460 (12) 912,208 1,037,460 (12) Stockholders' equity 196,090 188,625 4 196,090 188,625 4 CAPITAL AND CREDIT QUALITY RATIOS: Average equity to average assets 8.25% 7.89% 8.33% 7.85% Allowance for credit losses to loans and leases 1.16% 1.41% 1.16% 1.41% Nonperforming assets to total assets 0.12% 0.07% 0.12% 0.07% Annualized net (charge-offs) recoveries to average loans and leases (0.04)% 0.00% (0.02)% 0.00%
* 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 income from an early termination of a sublease in 2003 and 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 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 Six Months Ended June 30, June 30, -------------------------------- ------------------------------ 2004 2003 2004 2003 --------------- --------------- -------------- -------------- Noninterest expenses-GAAP based $18,155 $16,623 $34,925 $32,580 Net interest income plus noninterest income- GAAP based 26,103 28,297 52,288 55,217 Efficiency ratio-GAAP based 69.55% 58.74% 66.79% 59.00% =============== =============== ============== ============== Noninterest expenses-GAAP based $18,155 $16,623 $34,925 $32,580 Less non-GAAP adjustment: Amortization of intangible assets 487 664 973 1,329 --------------- --------------- -------------- -------------- Noninterest expenses-traditional ratio 17,668 15,959 33,952 31,251 Net interest income plus noninterest income- GAAP based 26,103 28,297 52,288 55,217 Plus non-GAAP adjustment: Tax-equivalency 1,919 1,809 3,884 3,855 Less non-GAAP adjustments: Securities gains 109 543 337 551 Income from an early termination of a sublease 0 1,077 0 1,077 --------------- --------------- -------------- -------------- Net interest income plus noninterest income - traditional ratio 27,913 28,486 55,835 57,444 Efficiency ratio - traditional 63.30% 56.02% 60.81% 54.40% =============== =============== ============== =============
Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data)
June 30, December 31, ------------------------------- -------------- 2004 2003 2003 - ---------------------------------------------------------------------------------------------- -------------- ASSETS Cash and due from banks $41,399 $46,740 $38,397 Federal funds sold 67,754 67,765 10,670 Interest-bearing deposits with banks 736 665 724 Residential mortgage loans held for sale 12,988 29,016 12,209 Investments available-for-sale (at fair value) 569,908 764,164 639,460 Investments held-to-maturity - fair value of $322,896, $265,353, and $344,814, respectively 322,448 253,318 337,634 Other equity securities 19,852 19,978 21,111 Total loans and leases 1,267,346 1,069,688 1,153,428 Less: allowance for credit losses (14,743) (15,033) (14,880) -------------- --------------- --------------- Net loans and leases 1,252,603 1,054,655 1,138,548 Premises and equipment, net 40,498 37,851 37,679 Accrued interest receivable 13,025 14,904 13,661 Goodwill 7,642 7,642 7,642 Other intangible assets, net 10,473 12,597 11,446 Other assets 64,873 59,151 65,243 -------------- --------------- --------------- Total assets $2,424,199 $2,368,446 $2,334,424 ============== =============== ============== LIABILITIES Noninterest-bearing deposits $417,400 $373,429 $368,319 Interest-bearing deposits 1,264,152 1,216,715 1,193,511 -------------- --------------- --------------- Total deposits 1,681,552 1,590,144 1,561,830 Short-term borrowings 384,436 446,770 413,223 Subordinated debentures 35,000 35,000 35,000 Other long-term borrowings 114,883 88,433 115,158 Accrued interest payable and other liabilities 12,238 19,474 15,764 -------------- --------------- --------------- Total liabilities 2,228,109 2,179,821 2,140,975 STOCKHOLDERS' EQUITY Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 14,517,640 14,465,144 and 14,495,613, respectively 14,518 14,465 14,496 Additional paid in capital 19,511 18,655 18,970 Retained earnings 161,459 143,780 153,280 Accumulated other comprehensive income 602 11,725 6,703 -------------- --------------- --------------- Total stockholders' equity 196,090 188,625 193,449 -------------- --------------- --------------- Total liabilities and stockholders' equity $2,424,199 $2,368,446 $2,334,424 ============== =============== ==============
Certain reclassifications 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 Six Months Ended June 30, June 30, ------------------------------ ----------------------------- 2004 2003 2004 2003 ------------- ------------- ------------ ------------- Interest income: Interest and fees on loans and leases $16,919 $16,252 $33,375 $32,871 Interest on loans held for sale 212 263 350 571 Interest on deposits with banks 2 4 5 7 Interest and dividends on securities: Taxable 5,509 7,880 12,065 16,612 Exempt from federal income taxes 3,515 3,483 7,102 6,951 Interest on federal funds sold 88 109 147 215 ------------- ------------- ------------- ------------- Total interest income 26,245 27,991 53,044 57,227 Interest expense: Interest on deposits 2,994 3,728 5,724 7,661 Interest on short-term borrowings 3,699 4,497 7,450 9,127 Interest on long-term borrowings 1,690 1,519 3,382 3,029 ------------- ------------- ------------- ------------- Total interest expense 8,383 9,744 16,556 19,817 ------------- ------------- ------------- ------------- Net interest income 17,862 18,247 36,488 37,410 Provision for credit losses 0 0 0 0 ------------- ------------- ------------- ------------- Net interest income after provision for credit losses 17,862 18,247 36,488 37,410 Noninterest income: Securities gains (losses) 109 543 337 551 Service charges on deposit accounts 1,881 2,037 3,749 4,021 Gains on sales of mortgage loans 1,028 1,603 1,797 3,178 Fees on sales of investment products 666 666 1,295 1,187 Trust department income 984 758 1,738 1,478 Insurance agency commissions 1,030 922 2,151 1,941 Income from bank owned life insurance 613 710 1,243 1,319 Income from an early termination of a sublease 0 1,077 0 1,077 Visa Check Fees 497 494 921 919 Other income 1,433 1,240 2,569 2,136 ------------- ------------- ------------- ------------- Total noninterest income 8,241 10,050 15,800 17,807 Noninterest expenses: Salaries and employee benefits 10,285 9,514 20,218 18,964 Occupancy expense of premises 1,815 1,533 3,443 3,117 Equipment expenses 1,324 1,099 2,514 2,140 Marketing 482 509 995 963 Outside data services 766 660 1,487 1,305 Amortization of intangible assets 487 664 973 1,329 Other expenses 2,996 2,644 5,295 4,762 ------------- ------------- ------------- ------------- Total noninterest expenses 18,155 16,623 34,925 32,580 ------------- ------------- ------------- ------------- Income before income taxes 7,948 11,674 17,363 22,637 Income tax expense 1,555 2,938 3,669 5,573 ============= ============= ============= ============= Net income $6,393 $8,736 $13,694 $17,064 ============= ============= ============= ============= Basic net income per share $0.44 $0.61 $0.94 $1.18 Diluted net income per share 0.43 0.60 0.93 1.16 Dividends declared per share 0.19 0.18 0.38 0.36
Certain reclassifications of information previously reported have been made to conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries 2004 2003 HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA -------------------------- -------------------------------------------------------- (Dollars in thousands, except per share data) Q2 Q1 Q4 Q3 Q2 Q1 - -------------------------------------------------------------------------- -------------------------------------------------------- PROFITABILITY FOR THE QUARTER: Tax-equivalent interest income $28,164 $28,764 $29,562 $30,060 $29,800 $31,282 - ----------------------------------------------------------------------------------------------------------------------------------- Interest expense 8,383 8,173 8,478 9,137 9,744 10,073 - ----------------------------------------------------------------------------------------------------------------------------------- Tax-equivalent net interest income 19,781 20,591 21,084 20,923 20,056 21,209 - ----------------------------------------------------------------------------------------------------------------------------------- Tax-equivalent adjustment 1,919 1,965 2,234 2,148 1,809 2,046 - ----------------------------------------------------------------------------------------------------------------------------------- Provision for credit losses 0 0 0 0 0 0 - ----------------------------------------------------------------------------------------------------------------------------------- Noninterest income 8,241 7,559 7,178 8,751 10,032 7,757 - ----------------------------------------------------------------------------------------------------------------------------------- Noninterest expenses 18,155 16,770 17,742 16,904 16,605 15,957 - ----------------------------------------------------------------------------------------------------------------------------------- Income before income taxes 7,948 9,415 8,286 10,622 11,674 10,963 - ----------------------------------------------------------------------------------------------------------------------------------- Income tax expense 1,555 2,114 1,502 2,404 2,938 2,635 - ----------------------------------------------------------------------------------------------------------------------------------- Net Income 6,393 7,301 6,784 8,218 8,736 8,328 =================================================================================================================================== FINANCIAL RATIOS: Return on average assets 1.08% 1.26% 1.14% 1.37% 1.50% 1.46% - ----------------------------------------------------------------------------------------------------------------------------------- Return on average equity 13.07% 15.00% 14.16% 17.42% 19.04% 18.76% - ----------------------------------------------------------------------------------------------------------------------------------- Net interest margin 3.58% 3.82% 3.82% 3.71% 3.74% 3.95% - ----------------------------------------------------------------------------------------------------------------------------------- Efficiency ratio - GAAP based * 69.55% 64.04% 68.17% 61.41% 58.74% 59.28% - ----------------------------------------------------------------------------------------------------------------------------------- Efficiency ratio - traditional * 63.30% 58.32% 61.80% 54.92% 56.02% 52.81% =================================================================================================================================== PER SHARE DATA: Basic net income $0.44 $0.50 $0.46 $0.57 $0.61 $0.57 - ----------------------------------------------------------------------------------------------------------------------------------- Diluted net income $0.43 $0.50 $0.46 $0.56 $0.60 $0.56 - ----------------------------------------------------------------------------------------------------------------------------------- Dividends declared $0.19 $0.19 $0.19 $0.19 $0.18 $0.18 - ----------------------------------------------------------------------------------------------------------------------------------- Book value $13.51 $13.76 $13.35 $13.10 $13.04 $12.54 - ----------------------------------------------------------------------------------------------------------------------------------- Tangible book value $12.26 $12.48 $12.03 $11.75 $11.64 $11.10 - ----------------------------------------------------------------------------------------------------------------------------------- Average fully diluted shares 14,726,117 14,725,261 14,729,513 14,677,257 14,676,404 14,743,976 =================================================================================================================================== NONINTEREST INCOME BREAKDOWN: Securities gains (losses) $109 $228 $339 $106 $543 $8 - ----------------------------------------------------------------------------------------------------------------------------------- Service charges on deposit accounts 1,881 1,868 1,984 2,027 2,037 1,984 - ----------------------------------------------------------------------------------------------------------------------------------- Gains on sales of mortgage loans 1,028 769 639 1,906 1,603 1,575 - ----------------------------------------------------------------------------------------------------------------------------------- Fees on sales of investment products 666 629 512 512 666 521 - ----------------------------------------------------------------------------------------------------------------------------------- Trust department income 984 754 721 756 758 720 - ----------------------------------------------------------------------------------------------------------------------------------- Insurance agency commissions 1,030 1,121 876 924 922 1,019 - ----------------------------------------------------------------------------------------------------------------------------------- Income from bank owned life insurance 613 630 561 866 710 609 - ----------------------------------------------------------------------------------------------------------------------------------- Income from early termination of a sublease 0 0 0 0 1,077 0 - ----------------------------------------------------------------------------------------------------------------------------------- Visa Check Fees 497 424 439 434 494 425 - ----------------------------------------------------------------------------------------------------------------------------------- Other income 1,433 1,136 1,107 1,220 1,240 896 - ----------------------------------------------------------------------------------------------------------------------------------- Total 8,241 7,559 7,178 8,751 10,050 7,757 =================================================================================================================================== NONINTEREST EXPENSE BREAKDOWN: Salaries and employee benefits $10,285 $9,933 $9,188 $9,932 $9,514 $9,450 - ----------------------------------------------------------------------------------------------------------------------------------- Occupancy expense of premises 1,815 1,628 2,105 1,839 1,533 1,584 - ----------------------------------------------------------------------------------------------------------------------------------- Equipment expenses 1,324 1,190 1,179 1,101 1,099 1,041 - ----------------------------------------------------------------------------------------------------------------------------------- Marketing 482 513 1,060 477 509 454 - ----------------------------------------------------------------------------------------------------------------------------------- Outside data services 766 721 671 643 660 645 - -----------------------------------------------------------------------------------------------------------------------------------
* 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 income from an early termination of a sublease in 2003 and securities 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 2004 2003 HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA -------------------------- --------------------------------------------------------- (Dollars in thousands, except per share data) Q2 Q1 Q4 Q3 Q2 Q1 - -------------------------------------------------------------------------- --------------------------------------------------------- NONINTEREST EXPENSE BREAKDOWN (CONTINUED): Amortization of intangible assets $487 $486 486 665 664 $665 - ------------------------------------------------------------------------------------------------------------------------------------ Other expenses 2,996 2,299 3,053 2,247 2,644 2,118 - ------------------------------------------------------------------------------------------------------------------------------------ Total 18,155 16,770 17,742 16,904 16,623 15,957 ==================================================================================================================================== BALANCE SHEETS AT QUARTER END: Residential mortgage loans $343,176 $337,850 $331,129 $313,873 $292,415 $276,001 - ------------------------------------------------------------------------------------------------------------------------------------ Residential construction loans 113,382 103,292 88,500 74,889 71,016 66,937 - ------------------------------------------------------------------------------------------------------------------------------------ Commercial mortgage loans 329,894 322,754 323,099 310,502 299,621 297,428 - ------------------------------------------------------------------------------------------------------------------------------------ Commercial construction loans 55,563 52,162 51,518 55,337 53,626 61,434 - ------------------------------------------------------------------------------------------------------------------------------------ Commercial loans and leases 140,560 125,527 116,322 112,563 119,145 116,157 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer loans 284,771 260,644 242,860 232,377 233,865 232,359 - ------------------------------------------------------------------------------------------------------------------------------------ Total loans and leases 1,267,346 1,202,229 1,153,428 1,099,541 1,069,688 1,050,316 - ------------------------------------------------------------------------------------------------------------------------------------ Less: allowance for credit losses (14,743) (14,875) (14,880) (15,049) (15,033) (15,023) - ------------------------------------------------------------------------------------------------------------------------------------ Net loans and leases 1,252,603 1,187,354 1,138,548 1,084,492 1,054,655 1,035,293 - ------------------------------------------------------------------------------------------------------------------------------------ Goodwill 7,642 7,642 7,642 7,642 7,642 7,642 - ------------------------------------------------------------------------------------------------------------------------------------ Other intangible assets, net 10,473 10,959 11,446 11,932 12,597 13,262 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 2,424,199 2,371,572 2,334,424 2,383,669 2,368,446 2,372,602 - ------------------------------------------------------------------------------------------------------------------------------------ Total deposits 1,681,552 1,618,591 1,561,830 1,558,220 1,590,144 1,555,513 - ------------------------------------------------------------------------------------------------------------------------------------ Total stockholders' equity 196,090 199,615 193,449 189,623 188,625 181,854 ==================================================================================================================================== QUARTERLY AVERAGE BALANCE SHEETS: Residential mortgage loans $355,676 $346,545 $331,024 $342,648 $302,344 $304,494 - ------------------------------------------------------------------------------------------------------------------------------------ Residential construction loans 108,118 93,722 81,046 77,466 68,296 72,031 - ------------------------------------------------------------------------------------------------------------------------------------ Commercial mortgage loans 327,441 316,768 315,603 298,359 300,309 295,728 - ------------------------------------------------------------------------------------------------------------------------------------ Commercial construction loans 55,234 51,519 53,403 54,942 59,561 56,568 - ------------------------------------------------------------------------------------------------------------------------------------ Commercial loans and leases 134,627 127,327 109,037 116,985 118,742 122,597 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer loans 268,861 251,411 237,478 232,891 229,085 231,770 - ------------------------------------------------------------------------------------------------------------------------------------ Total loans and leases 1,249,957 1,187,292 1,127,591 1,123,291 1,078,337 1,083,188 - ------------------------------------------------------------------------------------------------------------------------------------ Securities 933,253 954,822 1,055,558 1,084,348 1,058,878 1,039,112 - ------------------------------------------------------------------------------------------------------------------------------------ Total earning assets 2,220,656 2,167,641 2,201,368 2,229,467 2,177,451 2,158,817 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 2,384,929 2,328,985 2,357,816 2,383,783 2,330,589 2,305,834 - ------------------------------------------------------------------------------------------------------------------------------------ Total interest-bearing liabilities 1,775,867 1,751,225 1,797,037 1,812,412 1,801,472 1,799,132 - ------------------------------------------------------------------------------------------------------------------------------------ Noninterest-bearing demand deposits 392,387 360,341 351,761 355,119 322,431 299,638 - ------------------------------------------------------------------------------------------------------------------------------------ Total deposits 1,634,340 1,561,666 1,556,965 1,581,873 1,537,111 1,488,023 - ------------------------------------------------------------------------------------------------------------------------------------ Stockholders' equity 196,719 195,730 190,063 187,183 183,992 180,044 ==================================================================================================================================== CAPITAL AND CREDIT QUALITY MEASURES: Average equity to average assets 8.25% 8.40% 8.06% 7.85% 7.89% 7.81% - ------------------------------------------------------------------------------------------------------------------------------------ Credit loss allowance to loans and leases 1.16% 1.24% 1.29% 1.37% 1.41% 1.43% - ------------------------------------------------------------------------------------------------------------------------------------ Nonperforming assets to total assets 0.12% 0.14% 0.13% 0.14% 0.07% 0.08% - ------------------------------------------------------------------------------------------------------------------------------------ Annualized net (charge-offs) recoveries to average loans and leases (0.04)% 0.00% (0.06)% 0.00% 0.00% 0.00% ==================================================================================================================================== MISCELLANEOUS DATA: Net (charge-offs) recoveries ($131) ($5) ($169) $16 $10 ($13) - ------------------------------------------------------------------------------------------------------------------------------------ Nonperforming assets: Non-accrual loans and leases 674 802 522 564 479 567 - ------------------------------------------------------------------------------------------------------------------------------------ Loans and leases 90 days past due 2,316 2,492 2,333 2,612 900 1,381 - ------------------------------------------------------------------------------------------------------------------------------------ Restructured loans and leases 0 0 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------------ Other real estate owned, net 0 77 77 125 187 0 - ------------------------------------------------------------------------------------------------------------------------------------ Total nonperforming assets 2,990 3,371 2,932 3,301 1,566 1,948 ====================================================================================================================================
Certain reclassifications of information currently reported have been made to conform to current presentation. Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Dollars in thousands and tax-equivalent)
Three Months Ended June 30, -------------------------------------------------------------------------------- 2004 2003 -------------------------------------- --------------------------------------- AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/ BALANCES INTEREST RATE Balance Interest Rate ---------------- ------------- ------- --------------- ------------ -------- ASSETS Residential mortgage loans $355,676 $19,003 5.34% $302,344 $18,022 5.96% Residential construction loans 108,118 4,886 4.52 68,296 3,578 5.24 Commercial mortgage loans 327,441 21,171 6.47 300,309 21,108 7.03 Commercial construction loans 55,234 3,151 5.70 59,561 3,539 5.94 Commercial loans and leases 134,627 8,577 6.37 118,742 8,491 7.15 Consumer loans 268,861 11,999 4.46 229,085 11,446 5.00 -------------- ------------- --------------- ------------- Total loans and leases 1,249,957 68,787 5.50 1,078,337 66,184 6.14 Securities 933,253 43,785 4.69 1,058,878 53,885 5.09 Interest-bearing deposits with banks 836 11 1.32 1,310 14 1.07 Federal funds sold 36,610 354 0.97 38,926 435 1.12 -------------- ------------- --------------- ------------- TOTAL EARNING ASSETS 2,220,656 112,937 5.09% 2,177,451 120,518 5.53% Less: allowance for credit losses (14,850) (15,017) Cash and due from banks 42,294 35,000 Premises and equipment, net 40,303 36,637 Other assets 96,526 96,518 -------------- --------------- Total assets $2,384,929 $2,330,589 ============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing demand deposits $230,522 $696 0.30% $198,753 $451 0.23% Regular savings deposits 209,220 777 0.37 168,864 471 0.28 Money market savings deposits 368,837 2,051 0.56 401,293 2,918 0.73 Time deposits 433,374 8,521 1.97 445,770 11,112 2.49 -------------- ------------- --------------- ------------- Total interest-bearing deposits 1,241,953 12,045 0.97 1,214,680 14,952 1.23 Borrowings 533,914 21,380 4.00 586,792 24,072 4.10 -------------- ------------- --------------- ------------- TOTAL INTEREST-BEARING LIABILITIES 1,775,867 33,425 1.88 1,801,472 39,024 2.17 ------------- ------- ------------- -------- Net interest income and spread* $79,512 3.21% $81,494 3.36% ============= ======= ============= ======== Noninterest-bearing demand deposits 392,387 322,431 Other liabilities 19,956 22,694 Stockholder's equity 196,719 183,992 -------------- --------------- Total liabilities and stockholders' equity $2,384,929 $2,330,589 ============== =============== Interest income/earning assets 5.09% 5.53% Interest expense/earning assets 1.51 1.79 ------- -------- Net interest margin 3.58% 3.74% ======= ========
* 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 7.00% (or a combined marginal federal and state rate of 39.55%), 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 $7,671,000 for the three months ended June 30, 2004 and $8,306,000 for the three months ended June 30, 2003. Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Dollars in thousands and tax-equivalent)
Six Months Ended June 30, --------------------------------------------------------------------------------- 2004 2003 ---------------------------------------- -------------------------------------- AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/ BALANCES INTEREST RATE Balance Interest Rate ---------------- ------------- -------- --------------- ------------- -------- ASSETS Residential mortgage loans $351,111 $18,917 5.39% $303,413 $18,372 6.06% Residential construction loans 100,920 4,594 4.55 70,153 3,729 5.32 Commercial mortgage loans 322,104 20,858 6.48 298,017 21,119 7.09 Commercial construction loans 53,377 3,053 5.72 59,863 3,638 6.08 Commercial loans and leases 130,977 8,453 6.45 118,883 8,596 7.23 Consumer loans 260,136 11,832 4.55 230,420 11,810 5.13 -------------- ------------- ------------- ------------- Total loans and leases 1,218,625 67,707 5.56 1,080,749 67,264 6.22 Securities 944,038 46,157 4.89 1,049,040 55,287 5.27 Interest-bearing deposits with banks 918 10 1.09 1,278 14 1.10 Federal funds sold 30,568 294 0.96 37,109 429 1.16 -------------- ------------- ------------- ------------- TOTAL EARNING ASSETS 2,194,149 114,168 5.20% 2,168,176 122,994 5.67% Less: allowance for credit losses (14,870) (15,028) Cash and due from banks 40,937 34,799 Premises and equipment, net 39,501 36,452 Other assets 97,059 93,872 -------------- ------------- Total assets $2,356,776 $2,318,271 ============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing demand deposits $227,254 $655 0.29% $192,468 $484 0.25% Regular savings deposits 202,253 719 0.36 163,187 530 0.32 Money market savings deposits 371,988 2,018 0.54 402,550 3,017 0.75 Time deposits 420,101 8,119 1.93 443,508 11,417 2.57 -------------- ------------- ------------- ------------- Total interest-bearing deposits 1,221,596 11,511 0.94 1,201,713 15,448 1.29 Borrowings 541,907 21,471 3.96 598,704 24,333 4.06 -------------- ------------- ------------- ------------- TOTAL INTEREST-BEARING LIABILITIES 1,763,503 32,982 1.87 1,800,417 39,781 2.21 ------------- ------- ------------- -------- Net interest income and spread* $81,186 3.33% $83,213 3.46% ============= ======= ============= ======== Noninterest-bearing demand deposits 376,361 311,097 Other liabilities 20,673 24,830 Stockholder's equity 196,239 181,927 -------------- ------------- Total liabilities and stockholders' equity $2,356,776 $2,318,271 ============== ============= Interest income/earning assets 5.20% 5.67% Interest expense/earning assets 1.50 1.83 ------- -------- Net interest margin 3.70% 3.84% ======= ========
* 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 7.00% (or a combined marginal federal and state rate of 39.55%), 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 $7,810,000 for the six months ended June 30, 2004 and $7,774,000 for the six months ended June 30, 2003. -----END PRIVACY-ENHANCED MESSAGE-----