-----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, AyrPQAOzEu0nfGcU2spNCETM0wcdmrcBEaczF1tK6sV5mNqrT+h93+f8uJiREh5h FH/R6mvvqFKDJvBGwD9ExA== 0001125282-04-005100.txt : 20041018 0001125282-04-005100.hdr.sgml : 20041018 20041018145531 ACCESSION NUMBER: 0001125282-04-005100 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041014 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041018 DATE AS OF CHANGE: 20041018 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: 041083028 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 b401634_8k.txt 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): October 14, 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 -------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. Item 7.01 Regulation FD Disclosure. The following information is furnished to the Securities and Exchange Commission under both Item 2.02 and Item 7.01 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. Item 9.01 Financial Statements and Exhibits. (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits Exhibit 99. News Release dated October 14, 2004 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: October 18, 2004 EX-99 2 b401634ex_99.txt NEWS RELEASE Exhibit 99 NEWS RELEASE [GRAPHIC] FOR IMMEDIATE RELEASE SANDY SPRING BANCORP REPORTS THIRD QUARTER RESULTS OLNEY, MARYLAND, October 14, 2004 -- Sandy Spring Bancorp, (Nasdaq:SASR) the parent company of Sandy Spring Bank, today announced net income for the third quarter of 2004 of $6.4 million ($.44 per diluted share) compared to $8.2 million ($.56 per diluted share) for the third quarter of 2003, a 22% decrease. Net income for the nine-month period ending September 30, 2004 totaled $20.1 million ($1.37 per diluted share) compared to $25.3 million ($1.72 per diluted share) for the prior year period, a 21% decrease. Net income for the third quarter and nine months were both lower compared to the same periods for last year, as a result of lower net interest margins in a historically low interest rate environment, a decline in gains on sales of loans, as mortgage refinancings slowed, and increased operating expenses. However, total loan and deposit growth has been consistently strong and has increased on a sequential quarterly basis during 2004. Loan balances were up 24% and deposit balances were up 10% over the past twelve months. "In our view, the basic elements of our business are quite healthy with positive momentum," said Hunter R. Hollar, President and Chief Executive Officer of Sandy Spring Bancorp. "Fees on the sales of investment products, trust revenues and insurance commissions, while seasonal from quarter to quarter, are all showing growth year over year. Asset quality remains an outstanding hallmark of this organization. It's an ongoing top priority that stands uncompromised as we work our way through this challenging earnings cycle." Return on average stockholders' equity was 12.89% for the third quarter of 2004, compared to 17.35% for the third quarter of 2003. Return on average assets for the third quarter of 2004 was 1.03%, compared to 1.37% for the third quarter of 2003. For the first nine months of 2004, return on average stockholders' equity was 13.65% compared to 18.32% for the first nine months of 2003. Return on average assets for the first nine months of 2004 was 1.12% compared to 1.44% for the first nine months of 2003. Comparing September 30, 2004 balances to September 30, 2003, total assets increased 5% to $2.5 billion. Total loans and leases grew 24% to $1.4 billion and investment securities decreased 15% to $940 million while total deposits increased 10% to $1.7 billion. During the same period, stockholders' equity increased 6% to $202 million or 8.0% of total assets. In August, the Company issued $35 million in subordinated debentures. The proceeds will be used later this year to redeem the 9.375% $35 million debentures issued in 1999. This action resulted in subordinated debentures showing a temporary increase at September 30. Due to continuing strong asset quality, there was no provision for credit losses in the first nine months of 2004 or 2003. The Company's management will host a conference call to discuss its third 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 third 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. The net interest margin declined to 3.55% in 2004 from 3.71% in 2003. Noninterest income decreased by $1.3 million or 15% versus 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 63% versus the prior year period. Offsetting part of the decline in mortgage banking revenues were increases of 8% in trust revenues and 15% in Visa(R) check fees. Noninterest expenses were $17.9 million in the third quarter of 2004 compared to $16.9 million in 2003, a 6% increase. Noninterest expenses include the amortization of intangible assets of $.5 million in 2004 compared to $.7 million in the third quarter of 2003. The GAAP based efficiency ratio increased to 69.57% for the third quarter while the traditional non-GAAP efficiency ratio increased to 62.73%. These 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 sale of mortgage loans. Operating 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. Comparing the first nine months of 2004 and 2003, net interest income decreased by $1.3 million or 2% due primarily to the margin compression discussed above, which resulted in a decline in the net interest margin to 3.65% for the first nine months of 2004 compared to 3.80% for the same period in 2003. Noninterest income was $23.2 million for the nine months ended September 30, 2004 versus $26.5 million for the same period in 2003, a decrease of $3.3 million or 13%. This decrease was due primarily to a 51% decrease in gains on sales of mortgage loans and the one time gain of $1.1 million on early termination of a sublease in 2003, offset in part by increases of 14% in trust revenues and 8% in insurance agency commissions. Other noninterest income increased $.6 million or 16% for the first nine months of 2004 compared to 2003 due primarily to increases in gains on sale of other real estate owned and gains on sales of SBA loans. Noninterest expenses were $52.9 million for the first nine months of 2004 compared to $49.5 million for the same period in 2003, a 7% increase. Noninterest expenses include the amortization of intangible assets of $1.5 million for the first nine months of 2004 compared to $2.0 million for the first nine months of 2003. The GAAP based efficiency ratio increased to 67.7% for the first nine months of 2004 while the traditional, non-GAAP efficiency ratio increased to 61.5%. 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 $2.5 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 Philip J. Mantua, Executive V.P. & Chief Financial Officer Sandy Spring Bancorp 17801 Georgia Avenue Olney, Maryland 20832 1-800-399-5919 E-mail: HHollar@sandyspringbank.com PMantua@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 Nine Months Ended September 30, September 30, -------------------------- % ------------------------ % 2004 2003 Change 2004 2003 Change - ----------------------------------------------------------------------------------------------------------------------- ------- PROFITABILITY FOR THE PERIOD: Net interest income $18,369 $18,775 (2) $54,857 $56,185 (2) Provision for credit losses 0 0 0 0 0 0 Noninterest income 7,420 8,751 (15) 23,220 26,558 (13) Noninterest expenses 17,941 16,904 6 52,866 49,484 7 Income before income taxes 7,848 10,622 (26) 25,211 33,259 (24) Net income 6,417 8,218 (22) 20,111 25,282 (20) Return on average assets 1.03% 1.37% 1.12% 1.44% Return on average equity 12.89% 17.35% 13.65% 18.32% Net interest margin 3.55% 3.71% 3.65% 3.80% Efficiency ratio - GAAP based * 69.57% 61.41% 67.71% 59.80% Efficiency ratio - traditional * 62.73% 54.92% 61.45% 54.58% PER SHARE DATA: Basic net income $0.44 $0.57 (23) $1.39 $1.75 (21) Diluted net income 0.44 0.56 (21) 1.37 1.72 (20) Dividends declared 0.20 0.19 5 0.58 0.55 5 Book value 13.92 13.10 6 13.92 13.10 6 Tangible book value 12.70 11.75 8 12.70 11.75 8 Average fully diluted shares 14,673,756 14,677,257 14,705,413 14,697,878 AT PERIOD-END: Assets $2,506,302 $2,383,669 5 $2,506,302 $2,383,669 5 Deposits 1,709,642 1,558,220 10 1,709,642 1,558,220 10 Loans and leases 1,365,483 1,099,541 24 1,365,483 1,099,541 24 Securities 940,189 1,104,478 (15) 940,189 1,104,478 (15) Stockholders' equity 201,737 189,623 6 201,737 189,623 6 CAPITAL AND CREDIT QUALITY RATIOS: Average equity to average assets 8.03% 7.88% 8.22% 7.88% Allowance for credit losses to loans and leases 1.08% 1.37% 1.08% 1.37% Nonperforming assets to total assets 0.09% 0.14% 0.09% 0.14% Annualized net (charge-offs) recoveries to average loans and leases 0.01% 0.00% (0.01)% 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 Nine Months Ended September 30, September 30, ------------------------------------------ -------------------------------- 2004 2003 2004 2003 -------------------- -------------------- --------------- --------------- Noninterest expenses-GAAP based $17,941 $16,904 $52,866 $49,484 Net interest income plus noninterest income- GAAP based 25,789 27,526 78,077 82,743 Efficiency ratio-GAAP based 69.57% 61.41% 67.71% 59.80% ==================== ==================== =============== =============== Noninterest expenses-GAAP based $17,941 $16,904 $52,866 $49,484 Less non-GAAP adjustment: Amortization of intangible assets 486 665 1,459 1,994 -------------------- -------------------- --------------- --------------- Noninterest expenses-traditional ratio 17,455 16,239 51,407 47,490 Net interest income plus noninterest income- GAAP based 25,789 27,526 78,077 82,743 Plus non-GAAP adjustment: Tax-equivalency 2,175 2,148 6,059 6,003 Less non-GAAP adjustments: Securities gains 138 106 475 657 Income from an early termination of a sublease 0 0 0 1,077 -------------------- -------------------- --------------- --------------- Net interest income plus noninterest income - traditional ratio 27,826 29,568 83,661 87,012 Efficiency ratio - traditional 62.73% 54.92% 61.45% 54.58% ==================== ==================== =============== ===============
Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data)
September 30, December 31, ------------------------------------ ----------------- 2004 2003 2003 - --------------------------------------------------------------------------------------------------------- ---------------- ASSETS Cash and due from banks $43,390 $43,718 $38,397 Federal funds sold 27,086 6,265 10,670 Interest-bearing deposits with banks 512 927 724 Residential mortgage loans held for sale 8,849 9,390 12,209 Investments available-for-sale (at fair value) 598,886 735,158 639,460 Investments held-to-maturity - fair value of $328,531, $353,332, and $344,814, respectively 321,451 347,953 337,634 Other equity securities 19,852 21,367 21,111 Total loans and leases 1,365,483 1,099,541 1,153,428 Less: allowance for credit losses (14,792) (15,049) (14,880) ---------- ---------- ---------- Net loans and leases 1,350,691 1,084,492 1,138,548 Premises and equipment, net 40,991 37,671 37,679 Accrued interest receivable 13,049 15,292 13,661 Goodwill 7,642 7,642 7,642 Other intangible assets, net 9,987 11,932 11,446 Other assets 63,916 61,862 65,243 ---------- ---------- ---------- Total assets $2,506,302 $2,383,669 $2,334,424 ========== ========== ========== LIABILITIES Noninterest-bearing deposits $423,254 $350,700 $368,319 Interest-bearing deposits 1,286,388 1,207,520 1,193,511 ---------- ---------- ---------- Total deposits 1,709,642 1,558,220 1,561,830 Short-term borrowings 393,528 495,551 413,223 Subordinated debentures 70,000 35,000 35,000 Other long-term borrowings 114,696 88,346 115,158 Accrued interest payable and other liabilities 16,699 16,929 15,764 ---------- ---------- ---------- Total liabilities 2,304,565 2,194,046 2,140,975 STOCKHOLDERS' EQUITY Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 14,493,104 14,474,374 and 14,495,613, respectively 14,493 14,474 14,496 Additional paid in capital 18,473 18,704 18,970 Retained earnings 164,977 149,249 153,280 Accumulated other comprehensive income 3,794 7,196 6,703 ---------- ---------- ---------- Total stockholders' equity 201,737 189,623 193,449 ---------- ---------- ---------- Total liabilities and stockholders' equity $2,506,302 $2,383,669 $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 Nine Months Ended September 30, September 30, ------------------------------------------ -------------------------------- 2004 2003 2004 2003 -------------------- -------------------- --------------- --------------- Interest income: Interest and fees on loans and leases $18,233 $15,883 $51,608 $48,754 Interest on loans held for sale 172 422 522 993 Interest on deposits with banks 3 2 8 9 Interest and dividends on securities: Taxable 5,472 7,998 17,537 24,610 Exempt from federal income taxes 3,678 3,558 10,780 10,509 Interest on federal funds sold 133 49 280 264 -------------------- -------------------- --------------- --------------- Total interest income 27,691 27,912 80,735 85,139 Interest expense: Interest on deposits 3,412 3,230 9,136 10,891 Interest on short-term borrowings 4,717 4,389 12,167 13,516 Interest on long-term borrowings 1,193 1,518 4,575 4,547 -------------------- -------------------- --------------- --------------- Total interest expense 9,322 9,137 25,878 28,954 -------------------- -------------------- --------------- --------------- Net interest income 18,369 18,775 54,857 56,185 Provision for credit losses 0 0 0 0 -------------------- -------------------- --------------- --------------- Net interest income after provision for credit losses 18,369 18,775 54,857 56,185 Noninterest income: Securities gains (losses) 138 106 475 657 Service charges on deposit accounts 1,886 2,027 5,635 6,048 Gains on sales of mortgage loans 714 1,906 2,511 5,084 Fees on sales of investment products 475 512 1,770 1,699 Trust department income 813 756 2,551 2,234 Insurance agency commissions 944 924 3,095 2,865 Income from bank owned life insurance 614 866 1,857 2,185 Income from an early termination of a sublease 0 0 0 1,077 Visa Check Fees 498 434 1,419 1,353 Other income 1,338 1,220 3,907 3,356 -------------------- -------------------- --------------- --------------- Total noninterest income 7,420 8,751 23,220 26,558 Noninterest expenses: Salaries and employee benefits 10,353 9,932 30,571 28,896 Occupancy expense of premises 1,861 1,839 5,304 4,956 Equipment expenses 1,380 1,101 3,894 3,241 Marketing 385 477 1,380 1,440 Outside data services 697 643 2,184 1,948 Amortization of intangible assets 486 665 1,459 1,994 Other expenses 2,779 2,247 8,074 7,009 -------------------- -------------------- --------------- --------------- Total noninterest expenses 17,941 16,904 52,866 49,484 -------------------- -------------------- --------------- --------------- Income before income taxes 7,848 10,622 25,211 33,259 Income tax expense 1,431 2,404 5,100 7,977 -------------------- -------------------- --------------- --------------- Net income $6,417 $ 8,218 $20,111 $25,282 ==================== ==================== =============== =============== Basic net income per share $ 0.44 $ 0.57 $ 1.39 $ 1.75 Diluted net income per share 0.44 0.56 1.37 1.72 Dividends declared per share 0.20 0.19 0.58 0.55
Certain reclassifications of information previously reported have been made to conform with current presentation.
Sandy Spring Bancorp, Inc. and Subsidiaries HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA 2004 2003 ------------------------------------ --------------------------------------------- (Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1 - ---------------------------------------------------------------------------------- --------------------------------------------- PROFITABILITY FOR THE QUARTER: Tax-equivalent interest income $29,866 $28,164 $28,764 $29,562 $30,060 $29,800 $31,282 - ---------------------------------------------------------------------------------------------------------------------------------- Interest expense 9,322 8,383 8,173 8,478 9,137 9,744 10,073 - ---------------------------------------------------------------------------------------------------------------------------------- Tax-equivalent net interest income 20,544 19,781 20,591 21,084 20,923 20,056 21,209 - ---------------------------------------------------------------------------------------------------------------------------------- Tax-equivalent adjustment 2,175 1,919 1,965 2,234 2,148 1,809 2,046 - ---------------------------------------------------------------------------------------------------------------------------------- Provision for credit losses 0 0 0 0 0 0 0 - ---------------------------------------------------------------------------------------------------------------------------------- Noninterest income 7,420 8,241 7,559 7,178 8,751 10,032 7,757 - ---------------------------------------------------------------------------------------------------------------------------------- Noninterest expenses 17,941 18,155 16,770 17,742 16,904 16,605 15,957 - ---------------------------------------------------------------------------------------------------------------------------------- Income before income taxes 7,848 7,948 9,415 8,286 10,622 11,674 10,963 - ---------------------------------------------------------------------------------------------------------------------------------- Income tax expense 1,431 1,555 2,114 1,502 2,404 2,938 2,635 - ---------------------------------------------------------------------------------------------------------------------------------- Net Income 6,417 6,393 7,301 6,784 8,218 8,736 8,328 ================================================================================================================================== FINANCIAL RATIOS: Return on average assets 1.03% 1.08% 1.26% 1.14% 1.37% 1.50% 1.46% - ---------------------------------------------------------------------------------------------------------------------------------- Return on average equity 12.89% 13.07% 15.00% 14.16% 17.35% 19.04% 18.76% - ---------------------------------------------------------------------------------------------------------------------------------- Net interest margin 3.55% 3.58% 3.82% 3.82% 3.71% 3.74% 3.95% - ---------------------------------------------------------------------------------------------------------------------------------- Efficiency ratio - GAAP based * 69.57% 69.55% 64.04% 68.17% 61.41% 58.74% 59.28% - ---------------------------------------------------------------------------------------------------------------------------------- Efficiency ratio - traditional * 62.73% 63.30% 58.32% 61.80% 54.92% 56.02% 52.81% ================================================================================================================================== PER SHARE DATA: Basic net income $0.44 $0.44 $0.50 $0.46 $0.57 $0.61 $0.57 - ---------------------------------------------------------------------------------------------------------------------------------- Diluted net income $0.44 $0.43 $0.50 $0.46 $0.56 $0.60 $0.56 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends declared $0.20 $0.19 $0.19 $0.19 $0.19 $0.18 $0.18 - ---------------------------------------------------------------------------------------------------------------------------------- Book value $13.92 $13.51 $13.76 $13.35 $13.10 $13.04 $12.54 - ---------------------------------------------------------------------------------------------------------------------------------- Tangible book value $12.70 $12.26 $12.48 $12.03 $11.75 $11.64 $11.10 - ---------------------------------------------------------------------------------------------------------------------------------- Average fully diluted shares 14,673,756 14,726,117 14,725,261 14,729,513 14,677,257 14,676,404 14,743,976 ================================================================================================================================== NONINTEREST INCOME BREAKDOWN: Securities gains (losses) $138 $109 $228 $339 $106 $543 $8 - ---------------------------------------------------------------------------------------------------------------------------------- Service charges on deposit accounts 1,886 1,881 1,868 1,984 2,027 2,037 1,984 - ---------------------------------------------------------------------------------------------------------------------------------- Gains on sales of mortgage loans 714 1,028 769 639 1,906 1,603 1,575 - ---------------------------------------------------------------------------------------------------------------------------------- Fees on sales of investment products 475 666 629 512 512 666 521 - ---------------------------------------------------------------------------------------------------------------------------------- Trust department income 813 984 754 721 756 758 720 - ---------------------------------------------------------------------------------------------------------------------------------- Insurance agency commissions 944 1,030 1,121 876 924 922 1,019 - ---------------------------------------------------------------------------------------------------------------------------------- Income from bank owned life insurance 614 613 630 561 866 710 609 - ---------------------------------------------------------------------------------------------------------------------------------- Income from early termination of a sublease 0 0 0 0 0 1,077 0 - ---------------------------------------------------------------------------------------------------------------------------------- Visa Check Fees 498 497 424 439 434 494 425 - ---------------------------------------------------------------------------------------------------------------------------------- Other income 1,338 1,433 1,136 1,107 1,220 1,240 896 - ---------------------------------------------------------------------------------------------------------------------------------- Total 7,420 8,241 7,559 7,178 8,751 10,050 7,757 ================================================================================================================================== NONINTEREST EXPENSE BREAKDOWN: Salaries and employee benefits $10,353 $10,285 $9,933 $9,188 $9,932 $9,514 $9,450 - ---------------------------------------------------------------------------------------------------------------------------------- Occupancy expense of premises 1,861 1,815 1,628 2,105 1,839 1,533 1,584 - ---------------------------------------------------------------------------------------------------------------------------------- Equipment expenses 1,380 1,324 1,190 1,179 1,101 1,099 1,041 - ---------------------------------------------------------------------------------------------------------------------------------- Marketing 385 482 513 1,060 477 509 454 - ---------------------------------------------------------------------------------------------------------------------------------- Outside data services 697 766 721 671 643 660 645 - ----------------------------------------------------------------------------------------------------------------------------------
* 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 HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA 2004 2003 ----------------------------- ---------------------------------------------- (Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1 - ------------------------------------------------------------------------------ ---------------------------------------------- NONINTEREST EXPENSE BREAKDOWN (CONTINUED): Amortization of intangible assets 486 $487 $486 486 665 664 $665 - ------------------------------------------------------------------------------------------------------------------------------ Other expenses 2,779 2,996 2,299 3,053 2,247 2,644 2,118 - ------------------------------------------------------------------------------------------------------------------------------ Total 17,941 18,155 16,770 17,742 16,904 16,623 15,957 ============================================================================================================================== BALANCE SHEETS AT QUARTER END: Residential mortgage loans $365,352 $343,176 $337,850 $331,129 $313,873 $292,415 $276,001 - ------------------------------------------------------------------------------------------------------------------------------ Residential construction loans 126,338 113,382 103,292 88,500 74,889 71,016 66,937 - ------------------------------------------------------------------------------------------------------------------------------ Commercial mortgage loans 372,790 329,894 322,754 323,099 310,502 299,621 297,428 - ------------------------------------------------------------------------------------------------------------------------------ Commercial construction loans 62,436 55,563 52,162 51,518 55,337 53,626 61,434 - ------------------------------------------------------------------------------------------------------------------------------ Commercial loans and leases 138,741 140,560 125,527 116,322 112,563 119,145 116,157 - ------------------------------------------------------------------------------------------------------------------------------ Consumer loans 299,826 284,771 260,644 242,860 232,377 233,865 232,359 - ------------------------------------------------------------------------------------------------------------------------------ Total loans and leases 1,365,483 1,267,346 1,202,229 1,153,428 1,099,541 1,069,688 1,050,316 ============================================================================================================================== Less: allowance for credit losses (14,792) (14,743) (14,875) (14,880) (15,049) (15,033) (15,023) - ------------------------------------------------------------------------------------------------------------------------------ Net loans and leases 1,350,691 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 7,642 - ------------------------------------------------------------------------------------------------------------------------------ Other intangible assets, net 9,987 10,473 10,959 11,446 11,932 12,597 13,262 - ------------------------------------------------------------------------------------------------------------------------------ Total assets 2,506,302 2,424,199 2,371,572 2,334,424 2,383,669 2,368,446 2,372,602 - ------------------------------------------------------------------------------------------------------------------------------ Total deposits 1,709,642 1,681,552 1,618,591 1,561,830 1,558,220 1,590,144 1,555,513 - ------------------------------------------------------------------------------------------------------------------------------ Total stockholders' equity 201,737 196,090 199,615 193,449 189,623 188,625 181,854 ============================================================================================================================== QUARTERLY AVERAGE BALANCE SHEETS: Residential mortgage loans $362,170 $355,676 $346,545 $331,024 $342,648 $302,344 $304,494 - ------------------------------------------------------------------------------------------------------------------------------ Residential construction loans 119,989 108,118 93,722 81,046 77,466 68,296 72,031 - ------------------------------------------------------------------------------------------------------------------------------ Commercial mortgage loans 347,451 327,441 316,768 315,603 298,359 300,309 295,728 - ------------------------------------------------------------------------------------------------------------------------------ Commercial construction loans 61,771 55,234 51,519 53,403 54,942 59,561 56,568 - ------------------------------------------------------------------------------------------------------------------------------ Commercial loans and leases 137,321 134,627 127,327 109,037 116,985 118,742 122,597 - ------------------------------------------------------------------------------------------------------------------------------ Consumer loans 293,025 268,861 251,411 237,478 232,891 229,085 231,770 - ------------------------------------------------------------------------------------------------------------------------------ Total loans and leases 1,321,727 1,249,957 1,187,292 1,127,591 1,123,291 1,078,337 1,083,188 - ------------------------------------------------------------------------------------------------------------------------------ Securities 938,448 933,253 954,822 1,055,558 1,084,348 1,058,878 1,039,112 - ------------------------------------------------------------------------------------------------------------------------------ Total earning assets 2,299,895 2,220,656 2,167,641 2,201,368 2,229,467 2,177,451 2,158,817 - ------------------------------------------------------------------------------------------------------------------------------ Total assets 2,466,535 2,384,929 2,328,985 2,357,816 2,383,783 2,330,589 2,305,834 - ------------------------------------------------------------------------------------------------------------------------------ Total interest-bearing liabilities 1,844,996 1,775,867 1,751,225 1,797,037 1,812,412 1,801,472 1,799,132 - ------------------------------------------------------------------------------------------------------------------------------ Noninterest-bearing demand deposits 405,647 392,387 360,341 351,761 355,119 322,431 299,638 - ------------------------------------------------------------------------------------------------------------------------------ Total deposits 1,684,328 1,634,340 1,561,666 1,556,965 1,581,872 1,537,111 1,488,023 - ------------------------------------------------------------------------------------------------------------------------------ Stockholders' equity 198,030 196,719 195,730 190,063 187,183 183,992 180,044 ============================================================================================================================== CAPITAL AND CREDIT QUALITY MEASURES: Average equity to average assets 8.03% 8.25% 8.40% 8.06% 7.88% 7.89% 7.81% - ------------------------------------------------------------------------------------------------------------------------------ Credit loss allowance to loans and leases 1.08% 1.16% 1.24% 1.29% 1.37% 1.41% 1.43% - ------------------------------------------------------------------------------------------------------------------------------ Nonperforming assets to total assets 0.09% 0.12% 0.14% 0.13% 0.14% 0.07% 0.08% - ------------------------------------------------------------------------------------------------------------------------------ Annualized net (charge-offs) recoveries to average loans and leases 0.01% (0.04)% 0.00% (0.06)% 0.00% 0.00% 0.00% ============================================================================================================================== MISCELLANEOUS DATA: Net (charge-offs) recoveries $48 ($131) ($5) ($169) $16 $10 ($13) - ------------------------------------------------------------------------------------------------------------------------------ Nonperforming assets: Non-accrual loans and leases 848 674 802 522 564 479 567 - ------------------------------------------------------------------------------------------------------------------------------ Loans and leases 90 days past due 1,340 2,316 2,492 2,333 2,612 900 1,381 - ------------------------------------------------------------------------------------------------------------------------------ Restructured loans and leases 0 0 0 0 0 0 0 - ------------------------------------------------------------------------------------------------------------------------------ Other real estate owned, net 0 0 77 77 125 187 0 - ------------------------------------------------------------------------------------------------------------------------------ Total nonperforming assets 2,188 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 September 30, -------------------------------------------------------------------------------- 2004 2003 -------------------------------------- --------------------------------------- AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/ BALANCE INTEREST RATE Balance Interest Rate ---------------- ------------- ------- ---------------- ------------- -------- ASSETS Residential mortgage loans $362,170 $19,719 5.44 % $342,648 $18,702 5.46 % Residential construction loans 119,989 5,828 4.86 77,466 3,560 4.60 Commercial mortgage loans 347,451 22,413 6.45 298,359 20,741 6.95 Commercial construction loans 61,771 3,600 5.83 54,942 3,216 5.85 Commercial loans and leases 137,321 8,661 6.31 116,985 7,926 6.78 Consumer loans 293,025 13,114 4.48 232,891 10,968 4.71 --------- ------ ---- --------- ------ Total loans and leases 1,321,727 73,335 5.55 1,123,291 65,113 5.80 Securities 938,448 44,655 4.76 1,084,348 53,768 4.96 Interest-bearing deposits with banks 748 10 1.34 1,430 9 0.63 Federal funds sold 38,972 532 1.37 20,398 195 0.96 --------- ------ ---- --------- ------ TOTAL EARNING ASSETS 2,299,895 118,532 5.15 % 2,229,467 119,085 5.34 % Less: allowance for credit losses (14,739) (15,013) Cash and due from banks 42,278 34,026 Premises and equipment, net 41,061 38,098 Other assets 98,040 97,205 ---------- ---------- Total assets $2,466,535 $2,383,783 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing demand deposits $237,212 $704 0.30 % $206,759 $487 0.24 % Regular savings deposits 229,021 847 0.37 179,572 496 0.28 Money market savings deposits 360,888 2,390 0.66 407,480 1,878 0.46 Time deposits 451,560 9,634 2.13 432,942 10,096 2.33 --------- ------ ---- --------- ------ Total interest-bearing deposits 1,278,681 13,575 1.06 1,226,753 12,957 1.06 Borrowings 566,315 23,259 4.11 585,659 23,394 3.99 --------- ------ ---- --------- ------ TOTAL INTEREST-BEARING LIABILITIES 1,844,996 36,834 2.00 1,812,412 36,351 2.01 ------- ---- --------- ------ ---- Net interest income and spread* $81,698 3.15 % $82,734 3.33 % ======= ==== ======= ==== Noninterest-bearing demand deposits 405,647 355,119 Other liabilities 17,862 28,370 Stockholder's equity 198,030 187,882 ========== ========== Total liabilities and stockholders' equity $2,466,535 $2,383,783 ========== ========== Interest income/earning assets 5.15 % 5.34 % Interest expense/earning assets 1.60 1.63 ------- -------- Net interest margin 3.55 % 3.71 % ======= ========
* 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 $8,653,000 for the three months ended September 30, 2004 and $8,522,000 for the three months ended September 30, 2003. Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (Dollars in thousands and tax-equivalent)
Nine Months Ended September 30, ----------------------------------------------------------------------------------- 2004 2003 --------------------------------------- --------------------------------------- AVERAGE ANNUALIZED YIELD/ Average Annualized Yield/ BALANCE INTEREST RATE Balance Interest Rate --------------- ------------- -------- ---------------- ------------- -------- ASSETS Residential mortgage loans $354,824 $19,184 5.41 % $316,635 $18,551 5.86 % Residential construction loans 107,322 5,009 4.67 72,617 3,659 5.04 Commercial mortgage loans 330,615 21,380 6.47 298,135 20,921 7.02 Commercial construction loans 56,195 3,237 5.76 58,215 3,482 5.98 Commercial loans and leases 133,108 8,523 6.40 118,230 8,354 7.07 Consumer loans 271,179 12,262 4.52 231,253 11,487 4.97 --------- ------ ---- --------- ------ Total loans and leases 1,253,243 69,595 5.55 1,095,085 66,454 6.07 Securities 942,167 45,656 4.85 1,060,939 54,979 5.18 Interest-bearing deposits with banks 861 10 1.16 1,329 12 0.90 Federal funds sold 33,350 374 1.12 31,443 352 1.12 --------- ------ ---- --------- ------ TOTAL EARNING ASSETS 2,229,621 115,635 5.19 % 2,188,796 121,797 5.56 % Less: allowance for credit losses (14,826) (15,023) Cash and due from banks 41,428 34,573 Premises and equipment, net 40,024 37,011 Other assets 97,388 96,061 ---------- ---------- Total assets $2,393,635 $2,341,418 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing demand deposits $230,598 $671 0.29 % $197,284 $483 0.24 % Regular savings deposits 211,241 762 0.36 168,708 517 0.31 Money market savings deposits 368,261 2,143 0.58 404,196 2,626 0.65 Time deposits 430,664 8,628 2.00 439,947 10,934 2.49 --------- ------- --------- ------- Total interest-bearing deposits 1,240,764 12,204 0.98 1,210,135 14,560 1.20 Borrowings 550,102 22,062 4.01 594,308 24,091 4.05 --------- ------- --------- ------- TOTAL INTEREST-BEARING LIABILITIES 1,790,866 34,266 1.91 1,804,443 38,651 2.14 ------- ---- ------- ---- Net interest income and spread* $81,369 3.28 % $83,146 3.42 % ======= ==== ======= ==== Noninterest-bearing demand deposits 386,194 325,933 Other liabilities 19,724 26,537 Stockholder's equity 196,851 184,505 ---------- ---------- Total liabilities and stockholders' equity $2,393,635 $2,341,418 ========== ========== Interest income/earning assets 5.19 % 5.56 % Interest expense/earning assets 1.54 1.76 ---- ---- Net interest margin 3.65 % 3.80 % ==== ====
* 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 $8,093,000 for the nine months ended September 30, 2004 and $8,026,000 for the nine months ended September 30, 2003. -----END PRIVACY-ENHANCED MESSAGE-----