8-K

UNITED STATES
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): April 18, 2006

SANDY SPRING BANCORP, INC.
(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction
of incorporation) 000-19065
(Commission file
number) 52-1532952
(IRS Employer
Identification No)

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.

On April 18, 2006, Sandy Spring Bancorp, Inc. issued a news release regarding its results of operations and financial condition for the quarter ended March 31, 2006. The text of the press release is included as Exhibit 99 to this report. The Company will include final financial statements and additional analyses as part of its Form 10-Q for the quarter ended March 31, 2006.

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 April 18, 2006.

Signatures

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SANDY SPRING BANCORP, INC.
     By: /s/ Hunter R. Hollar
             Hunter R. Hollar
             President and
             Chief Executive Officer

Dated: April 18, 2006

EX-99

	Exhibit 99
	NEWS RELEASE

FOR IMMEDIATE RELEASE           

SANDY SPRING BANCORP REPORTS
FIRST QUARTER RESULTS, HIGHLIGHTED BY
NONINTEREST INCOME GROWTH OF 26%

OLNEY, MARYLAND, April 18, 2006 – Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the first quarter of 2006 of $8.3 million ($.56 per diluted share) compared to $7.9 million ($.53 per diluted share) for the first quarter of 2005, an increase of 6%. Noninterest income for the quarter was $9.8 million and increased by 26% over the first quarter of 2005.

“On balance, our performance for the first quarter was solid. Loans grew 19% from the first quarter of last year and were up 4% over year-end 2005. Maintaining our net interest margin in the current rate environment continues to be a significant challenge, especially in this market where the competition for the lowest cost deposits is very intense,” said Hunter R. Hollar, President and Chief Executive Officer.

“The growth trend in our noninterest income is positive, as we are beginning to benefit from investing in two acquisitions (West Financial and Neff & Associates) that help diversify the revenue stream. It was also the first quarter during the last five consecutive quarters during which we took no gains from the sale of investment securities. We produced ongoing improvement in the efficiency ratio over both the previous quarter and last year’s first quarter.” said Hollar.

Return on average stockholders’ equity was 15.41% for the first quarter of 2006, compared to 16.20% for the same period in the prior year. Return on average assets for the first quarter of 2006 was 1.36%, compared to 1.39% for the first quarter of 2005.

Comparing March 31, 2006 balances to March 31, 2005, total assets increased 9% to $2.5 billion due mainly to growth in the loan portfolio. Total loans and leases increased 19% to $1.7 billion compared to the prior year. Customer funding sources, which include deposits plus other short-term borrowings from core customers, increased 8% to $2.0 billion at March 31, 2006. Stockholders’ equity totaled $223.0 million at quarter end, and represented 8.92% of total assets, compared to 8.70% at March 31, 2005.

Due to growth in the loan portfolio, the provision for loan and lease losses totaled $1.0 million for the first quarter of 2006 compared to $0.1 million for the first quarter of 2005. The allowance for loan and lease losses represented 1.02% of outstanding loans at March 31, 2006.

The Company’s management will host a conference call to discuss its first 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 first quarter of 2006 and 2005, net interest income increased by $2.0 million, or 9%, due primarily to continued growth in the loan portfolio which was partially offset by a lower net interest margin. The net interest margin decreased to 4.35% in 2006 from 4.39% in 2005 due primarily to slowing growth in noninterest deposits and increased short-term borrowings.

Noninterest income increased 26% in the first quarter of 2006 as compared to 2005 due to increases in virtually every business line. Trust and investment management feesincreased 143% due to growth in trust assets under management and the acquisition of West Financial Services, Inc. in the fourth quarter of 2005. Insurance agency commissions also increased 16% over 2005 due to higher premiums from commercial property and casualty lines and the acquisition of Neff & Associates in the first quarter of 2006. Fees on sales of investment products also increased 61% over the prior year due to increased sales volumes while Visa® check fees increased 9% reflecting a growing volume of electronic banking transactions.

Noninterest expenses were $20.4 million in the first quarter of 2006 compared to $18.4 million in 2005, an increase of $1.9 million or 10%. This increase was primarily the result of increases in salaries and benefits due to the acquisition of West Financial Services, Inc. and Neff & Associates and a larger staff. Occupancy expenses increased $0.2 million or 10% due to acquisitions and growth in the branch network while intangibles amortization increased $0.2 million or 50% as a result of the above acquisitions. Noninterest expenses declined by 2% from the previous quarter due to lower incentive based compensation expenses.

Stock-based compensation expense of $0.1 million, net of income taxes ($.01 per diluted share) was recorded in the first quarter of 2006 as required under a new accounting standard (SFAS 123R). The Company estimates the full year effect of this new accounting rule to total $0.5 million, net of income taxes ($.03 per diluted share).

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, The Equipment Leasing Company and West Financial Services, Inc. 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 31 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland and 67 ATMs located throughout Maryland. Through its subsidiaries, the Bank also offers a comprehensive menu of leasing, insurance and investment management services. 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 of 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
		March 31,
							%
		2006			2005		Change
Profitability for the period:
Net interest income	$	23,177		$	21,200		9
Provision for loan and lease losses		950			100		N/A
Noninterest income		9,846			7,840		26
Noninterest expenses		20,356			18,437		10
Income before income taxes		11,717			10,503		12
Net income	$	8,340			7,856		6
Return on average assets		1.36	%		1.39	%
Return on average equity		15.41	%		16.20	%
Net interest margin		4.35	%		4.39	%
Efficiency ratio – GAAP based *		61.64	%		63.49	%
Efficiency ratio – traditional *		56.91	%		58.38	%
Per share data:
Basic net income	$	0.56		$	0.54		4
Diluted net income		0.56			0.53		5
Dividends declared		0.22			0.20		10
Book value		15.06			13.57		11
Tangible book value		13.46			12.35		9
Average fully diluted shares		14,924,571			14,760,551
At period-end:
Assets	$	2,499,577		$	2,284,198		9
Deposits		1,839,355			1,745,675		5
Loans and leases		1,744,348			1,468,814		19
Securities		542,053			618,089		(12	)
Stockholders' equity		222,962			198,709		12
Capital and credit quality ratios:
Average equity to average assets		8.84	%		8.60	%
Allowance for loan and lease losses to loans and leases		1.02	%		1.00	%
Nonperforming assets to total assets		0.12	%		0.10	%
Annualized net charge-offs to average
loans and leases		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 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 and restatements 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
	March 31,
		2006			2005
Noninterest expenses–GAAP based		20,356		$	18,437
Net interest income plus noninterest income–
GAAP based		33,023			29,040
Efficiency ratio–GAAP based		61.64	%		63.49	%
Noninterest expenses–GAAP based	$	20,356		$	18,437
Less non-GAAP adjustment:
Amortization of intangible assets		742			496
Noninterest expenses–traditional ratio		19,614			17,941
Net interest income plus noninterest income–
GAAP based		33,023			29,040
Plus non-GAAP adjustment:
Tax-equivalency		1,442			1,709
Less non-GAAP adjustments:
Securities gains		0			15
Net interest income plus noninterest
income – traditional ratio		34,465			30,734
Efficiency ratio – traditional		56.91	%		58.38	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
	March 31							December 31
		2006			2005			2005
Assets
Cash and due from banks	$	47,707		$	43,905		$	47,294
Federal funds sold		16,709			6,240			6,149
Cash and cash equivalents		64,416			50,145			53,443
Interest-bearing deposits with banks		684			838			751
Residential mortgage loans held for sale (at fair value)		7,534			14,329			10,439
Investments available-for-sale (at fair value)		235,407			300,446			256,571
Investments held-to-maturity – fair value of $295,887
$310,340 and $302,966, respectively		290,684			304,909			295,648
Other equity securities		15,962			12,734			15,213
Total loans and leases		1,744,348			1,468,814			1,684,379
Less: allowance for loan and lease losses		(17,860	)		(14,738	)		(16,886	)
Net loans and leases		1,726,488			1,454,076			1,667,493
Premises and equipment, net		45,448			44,292			45,385
Accrued interest receivable		12,851			11,776			13,144
Goodwill		10,826			8,554			10,272
Other intangible assets, net		12,916			9,370			12,218
Other assets		76,361			72,729			79,039
Total assets	$	2,499,577		$	2,284,198		$	2,459,616
Liabilities
Noninterest-bearing deposits	$	429,062		$	428,906		$	439,277
Interest-bearing deposits		1,410,293			1,316,769			1,363,933
Total deposits		1,839,355			1,745,675			1,803,210
Short-term borrowings		383,870			259,341			380,220
Subordinated debentures		35,000			35,000			35,000
Accrued interest payable and other liabilities		16,319			16,052			21,145
Other long-term borrowings		2,071			29,421			2,158
Total liabilities		2,276,615			2,085,489			2,241,733
Stockholders' Equity
Common stock – par value $1.00; shares authorized
50,000,000; shares issued and outstanding 14,801,934,
14,642,686 and 14,793,987, respectively		14,802			14,643			14,794
Additional paid in capital		26,978			21,839			26,599
Retained earnings		182,169			161,242			177,084
Accumulated other comprehensive income(loss)		(987	)		985			(594	)
Total stockholders' equity		222,962			198,709			217,883
Total liabilities and stockholders' equity	$	2,499,577		$	2,284,198		$	2,459,616

Certain reclassifications and restatements 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
	March 31,
		2006		2005
Interest income:
Interest and fees on loans and leases	$	28,858	$	21,041
Interest on loans held for sale		150		167
Interest on deposits with banks		10		4
Interest and dividends on securities:
Taxable		3,031		3,328
Exempt from federal income taxes		3,016		3,594
Interest on federal funds sold		112		53
Total interest income		35,177		28,187
Interest expense:
Interest on deposits		7,674		4,188
Interest on short-term borrowings		3,749		2,018
Interest on long-term borrowings		577		781
Total interest expense		12,000		6,987
Net interest income		23,177		21,200
Provision for loan and lease losses		950		100
Net interest income after provision for loan and lease losses		22,227		21,100
Noninterest income:
Securities gains		0		15
Service charges on deposit accounts		1,848		1,671
Gains on sales of mortgage loans		782		731
Fees on sales of investment products		718		445
Trust and investment management fees		2,116		872
Insurance agency commissions		2,108		1,811
Income from bank owned life insurance		553		555
Visa check fees		535		491
Other income		1,186		1,249
Total noninterest income		9,846		7,840
Noninterest expenses:
Salaries and employee benefits		12,471		11,289
Occupancy expense of premises		2,126		1,924
Equipment expenses		1,316		1,322
Marketing		341		288
Outside data services		781		740
Amortization of intangible assets		742		496
Other expenses		2,579		2,378
Total noninterest expenses		20,356		18,437
Income before income taxes		11,717		10,503
Income tax expense		3,377		2,647
Net income	$	8,340	$	7,856
Basic net income per share	$	0.56	$	0.54
Diluted net income per share		0.56		0.53
Dividends declared per share		0.22		0.20

Certain reclassifications and restatements of information previously reported have been made to conform with current presentation.

Sandy Spring Bancorp, Inc. and Subsidiaries
Historical Trends in Quarterly Financial Data	2001										2006		2005
(Dollars in thousands, except per share data)		Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Profitability for the quarter:
Tax-equivalent interest income	$	32,210		$	34,164		$	33,492		$	36,619		$	35,150		$	33,244		$	30,998		$	29,896
Interest expense		13,156			15,302			16,007			12,000			10,425			8,865			7,705			6,987
Tax-equivalent net interest income		19,054			18,862			17,485			24,619			24,725			24,379			23,293			22,909
Tax-equivalent adjustment		1,456			1,439			1,220			1,442			1,800			1,853			1,766			1,709
Provision for loan and lease losses		744			742			492			950			1,000			600			900			100
Noninterest income		6,121			5,104			5,473			9,846			9,904			10,112			9,053			7,840
Noninterest expenses		14,734			13,797			13,215			20,356			20,860			18,744			19,153			18,437
Income before income taxes		8,310			8,135			8,031			11,717			10,969			13,294			10,527			10,503
Income tax expense		2,288			2,183			2,164			3,377			2,991			3,827			2,730			2,647
Net Income		6,022			5,952			5,867			8,340			7,978			9,467			7,797			7,856
Financial ratios:
Return on average assets		1.16	%		1.18	%		1.23	%		1.36	%		1.31	%		1.58	%		1.36	%		1.39	%
Return on average equity		15.78	%		16.33	%		17.02	%		15.41	%		14.76	%		18.31	%		15.63	%		16.20	%
Net interest margin		3.91	%		4.04	%		3.95	%		4.35	%		4.38	%		4.39	%		4.39	%		4.39	%
Efficiency ratio – GAAP based *											61.64	%		63.54	%		57.43	%		62.63	%		63.49	%
Efficiency ratio – traditional *		55.55	%		54.49	%		54.53	%		56.91	%		59.36	%		55.74	%		59.16	%		58.38	%
Per share data:
Basic net income	$	0.42		$	0.41		$	0.41		$	0.56		$	0.54		$	0.65		$	0.53		$	0.54
Diluted net income	$	0.41		$	0.40		$	0.41		$	0.56		$	0.54		$	0.64		$	0.53		$	0.53
Dividends declared	$	0.17		$	0.15		$	0.15		$	0.22		$	0.22		$	0.21		$	0.21		$	0.20
Book value	$	10.40		$	10.39		$	9.90		$	15.06		$	14.73		$	14.23		$	13.91		$	13.57
Tangible book value	$	8.73		$	8.91		$	8.37		$	13.46		$	13.21		$	13.07		$	12.72		$	12.35
Average fully diluted shares		14,669,518			14,582,550			14,506,607			14,924,571			14,886,046			14,735,318			14,719,742			14,760,551
Noninterest income breakdown:
Securities gains		68			147			0		$	0		$	661		$	1,761		$	825		$	15
Service charges on deposit accounts	$	1,951		$	1,802		$	1,807			1,848			1,983			2,050			1,984			1,671
Gains on sales of mortgage loans		773			567			747			782			932			1,205			889			731
Fees on sales of investment products		825			439			465			718			551			473			640			445
Trust and investment management fees		557			524			479			2,116			2,074			1,116			944			872
Insurance agency commissions		0			0			0			2,108			1,160			1,114			1,224			1,811
Income from bank owned life insurance		419			416			411			553			575			570			559			555
Visa check fees											535			570			556			550			491
Other income		1,596			1,356			1,564			1,186			1,398			1,267			1,438			1,249
Total		6,121			5,104			5,473			9,846			9,904			10,112			9,053			7,840
Noninterest expense breakdown:
Salaries and employee benefits	$	8,414		$	7,664		$	6,833		$	12,471		$	12,897		$	11,373		$	11,454		$	11,289
Occupancy expense of premises		1,271			1,348			1,224			2,126			2,066			2,099			1,964			1,924
Equipment expenses		883			859			875			1,316			1,379			1,415			1,294			1,322
Marketing		495			331			331			341			278			253			406			288
Outside data services		473			544			669			781			781			718			701			740
Amortization of intangible assets		883			859			875			742			696			501			505			496
Other expenses		495			331			331			2,579			2,763			2,385			2,829			2,378
Total		473			544			669			20,356			20,860			18,744			19,153			18,437

*	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 expenses from noninterest expenses; excludes security 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		2006									2005
(Dollars in thousands, except per share data)		Q1			Q4			Q3			Q2			Q1
Balance sheets at quarter end:
Residential mortgage loans	$	428,698		$	413,324		$	400,657		$	393,961		$	375,746
Residential construction loans		166,767			155,379			143,691			136,733			139,964
Commercial mortgage loans		425,392			415,983			410,409			390,306			395,528
Commercial construction loans		188,477			178,764			136,606			119,006			94,708
Commercial loans and leases		193,524			185,680			160,379			154,237			150,143
Consumer loans		341,490			335,249			327,393			323,537			312,725
Total loans and leases		1,744,348			1,684,379			1,579,135			1,517,780			1,468,814
Less: allowance for loan and lease losses		(17,860	)		(16,886	)		(16,268	)		(15,673	)		(14,738	)
Net loans and leases		1,726,488			1,667,493			1,562,867			1,502,107			1,454,076
Goodwill		10,826			10,272			8,554			8,554			8,554
Other intangible assets, net		12,916			12,218			8,364			8,865			9,370
Total assets		2,499,577			2,459,616			2,383,360			2,348,305			2,284,198
Total deposits		1,839,355			1,803,210			1,804,888			1,781,622			1,745,675
Total stockholders' equity		222,962			217,883			208,090			203,294			198,709
Quarterly average balance sheets:
Residential mortgage loans	$	427,609		$	423,805		$	423,420		$	401,148		$	384,504
Residential construction loans		161,649			150,099			141,197			137,720			137,897
Commercial mortgage loans		424,467			407,459			394,862			393,291			389,215
Commercial construction loans		186,606			158,076			128,010			103,584			91,733
Commercial loans and leases		188,747			161,478			154,920			151,766			149,783
Consumer loans		339,299			333,671			327,495			320,276			310,421
Total loans and leases		1,728,377			1,634,588			1,569,904			1,507,785			1,463,553
Securities		555,061			589,552			593,102			591,610			641,960
Total earning assets		2,294,665			2,239,438			2,203,251			2,130,469			2,115,369
Total assets		2,482,512			2,421,725			2,384,327			2,307,888			2,286,209
Total interest-bearing liabilities		1,821,530			1,733,626			1,696,691			1,647,365			1,660,839
Noninterest-bearing demand deposits		418,214			452,738			458,131			440,945			415,824
Total deposits		1,799,213			1,809,237			1,800,171			1,751,192			1,723,667
Stockholders' equity		219,424			214,489			205,138			200,047			196,659
Capital and credit quality measures:
Average equity to average assets		8.84	%		8.86	%		8.60	%		8.67	%		8.60	%
Loan and lease loss allowance to loans and leases		1.02	%		1.00	%		1.03	%		1.03	%		1.00	%
Nonperforming assets to total assets		0.12	%		0.06	%		0.14	%		0.15	%		0.10	%
Annualized net (charge-offs) recoveries to average loans and leases		0.01	%		(0.09	)%		0.00	%		0.01	%		0.00	%
Miscellaneous data:
Net (charge-offs) recoveries	$	24			($382)			($5)		$	35			($16)
Nonperforming assets:
Non-accrual loans and leases		585			437			1,032			661			672
Loans and leases 90 days past due		2,473			958			2,289			2,757			1,531
Restructured loans and leases		0			0			0			0			0
Other real estate owned, net		0			0			0			0			73
Total nonperforming assets		3,058			1,395			3,321			3,418			2,276

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands and tax-equivalent)
		Three Months Ended March 31,
		2006							2005
		Average			Annualized	Yield/			Average			Annualized	Yield/
		Balances			Interest	Rate			Balances			Interest	Rate
Assets
Residential mortgage loans	$	427,609		$	24,531	5.74	%	$	384,504		$	20,917	5.44	%
Residential construction loans		161,649			11,494	7.11			137,897			8,093	5.87
Commercial mortgage loans		424,467			29,780	7.02			389,215			24,974	6.42
Commercial construction loans		186,606			15,441	8.27			91,733			5,877	6.41
Commercial loans and leases		188,747			14,609	7.74			149,783			9,989	6.67
Consumer loans		339,299			21,418	6.31			310,421			15,847	5.11
Total loans and leases		1,728,377			117,273	6.79			1,463,553			85,697	5.86
Securities		555,061			30,587	5.51			641,960			35,191	5.48
Interest-bearing deposits with banks		958			41	4.28			827			17	2.06
Federal funds sold		10,269			456	4.44			9,029			213	2.36
TOTAL EARNING ASSETS		2,294,665			148,357	6.46			2,115,369			121,118	5.73	%
Less: allowance for loan and lease losses		(17,316	)						(14,664	)
Cash and due from banks		45,570							43,385
Premises and equipment, net		45,611							43,129
Other assets		113,982							98,990
Total assets	$	2,482,512						$	2,286,209
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	236,570		$	667	0.28	%	$	237,637		$	597	0.25	%
Regular savings deposits		199,281			873	0.44			227,250			729	0.32
Money market savings deposits		371,686			9,528	2.56			375,483			4,388	1.17
Time deposits		573,462			20,056	3.50			467,473			11,272	2.41
Total interest-bearing deposits		1,380,999			31,124	2.25			1,307,843			16,986	1.30
Borrowings		440,531			17,391	3.95			352,996			11,225	3.18
TOTAL INTEREST-BEARING LIABILITIES		1,821,530			48,515	2.66			1,660,839			28,211	1.70
Net interest income and spread				$	99,842	3.80	%				$	92,907	4.03	%
Noninterest-bearing demand deposits		418,214							415,824
Other liabilities		23,344							12,887
Stockholder's equity		219,424							196,659
Total liabilities and stockholders' equity	$	2,482,512						$	2,286,209
Interest income/earning assets						6.46	%						5.73	%
Interest expense/earning assets						2.11							1.34
Net interest margin						4.35	%						4.39	%

*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 $5,847,000 in 2006 and $6,931,000 in 2005.