NEWS RELEASE

FOR IMMEDIATE RELEASE

SANDY SPRING BANCORP REPORTS INCREASED THIRD QUARTER PROFIT OF $11.3 MILLION

OLNEY, MARYLAND, October 20, 2011 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR) the parent company of Sandy Spring Bank, today announced net income for the third quarter of 2011 of $11.3 million ($.47 per diluted share) compared to net income of $8.5 million ($0.35 per diluted share) for the third quarter of 2010 and net income of $8.3 million ($0.34 per diluted share) for the previous quarter of 2011. The provision for loan and lease losses for the third quarter of 2011 was a credit of $3.5 million compared to a charge of $2.5 million for the third quarter of 2010 and a charge of $1.2 million for the second quarter of 2011.

Net income for the nine-month period ended September 30, 2011 totaled $26.8 million ($1.11 per diluted share) compared to net income of $15.2 million ($0.70 per diluted share) for the prior year period. For the year-to-date, the provision for loan and lease losses reflected a credit of $0.9 million for the first nine months of 2011 compared to a charge of $23.6 million for the prior year period.

“Despite fierce competition in the marketplace, we continue to win our share of quality loans to new and existing clients. This is evidenced by the $167 million in commercial loans we originated during the first nine months of this year. Supported by strong capital and liquidity positions, we continue to take a long term approach to building relationships that are centered on the client experience,” said Daniel J. Schrider, President and Chief Executive Officer.  “It is important to note that while loan growth has been limited by the struggling national and regional economies, our core deposit levels have remained strong and we have very conservatively managed the growth in our investment portfolio, which allows us a high degree of flexibility should loan volumes begin to increase.

“The decrease in credit costs for the quarter reflects our declining levels of charge-offs and is a product of our aggressive efforts to address problem loan issues early in the current credit cycle,” according to Schrider.

Third Quarter Highlights:

· The provision for loan and lease losses for the third quarter of 2011 was a credit of $3.5 million compared to a charge of $2.5 million for the third quarter of 2010 and a charge of $1.2 million for the second quarter of 2011 as historical net charge-offs continue to improve.

· Non-performing loans totaled to $82.8 million at September 30, 2011 compared to $93.3 million at September 30, 2010 and $76.5 million at June 30, 2011. This increase over the previous quarter was due primarily to one commercial real estate credit totaling $13.6 million which was placed on non-accrual during the quarter and is adequately collateralized. As a result, the coverage ratio of the allowance for loan and lease losses to non-performing loans decreased to 60% at September 30, 2011 compared to a ratio of 72% at both September 30, 2010 and June 30, 2011.

· Total loans reflected a small increase compared to the second quarter of 2011 due primarily to growth in commercial owner occupied real estate and residential construction loans. New commercial loan originations totaled $167 million for the first nine months of the year compared to $83 million for the prior year period.

· The net interest margin declined to 3.53% for the third quarter of 2011, compared to 3.64% for the third quarter of 2010 and 3.58% for the second quarter of 2011.

· Revenue from wealth management services, which includes fees from trust and investment management and sales of investment products, increased 20% for the third quarter of 2011 compared to the third quarter of 2010 due to growth in average assets under management. This growth was primarily attributable to new client additions.

Review of Balance Sheet and Credit Quality

Comparing September 30, 2011 balances to September 30, 2010, total assets remained virtually level at $3.6 billion. Total loans and leases decreased 2% to $2.1 billion compared to the prior year. The decrease in loans was due primarily to declines in commercial business and consumer loans which were partially offset by an increase in commercial investor real estate loans. While loan balances have somewhat stabilized over the recent quarters, the general lack of loan demand and increased pay-downs as a result of the current state of the economy has limited the Company’s ability to grow loans. During the current quarter, total loans increased slightly compared to balances at June 30, 2011.

Customer funding sources, which include deposits and other short-term borrowings from customers, increased 1% compared to the third quarter of 2010. This increase was due largely to a 13% increase in noninterest-bearing and interest-bearing checking accounts which more than offset a 9% decline in certificates of deposit as a result of continuing rate reductions reflecting the Company’s net interest margin strategy. Growth in checking accounts was the main driver in the increase in core deposits due to clients’ emphasis on safety and liquidity.  Compared to the prior year, money market accounts experienced a 2% decline due mainly to clients’ redeployment of funds into alternative investment products.

Tangible common equity totaled $345.6 million at September 30, 2011 compared to $319.2 million at September 30, 2010 resulting in an increase in the ratio of tangible common equity to tangible assets from 9.06% at September 30, 2010 to 9.75% at September 30, 2011. This increase was due primarily to net income earned during the period. At September 30, 2011, the Company had a total risk-based capital ratio of 16.21%, a tier 1 risk-based capital ratio of 14.96% and a tier 1 leverage ratio of 10.79%.

Non-performing assets totaled $90.8 million at September 30, 2011 compared to $103.6 million at September 30, 2010 and $83.4 million at June 30, 2011. The increase compared to the prior quarter was due primarily to one commercial real estate credit totaling $13.6 million which was placed on non-accrual during the quarter and is considered adequately collateralized. Excluding this one credit, overall credit quality continued to improve as a result of lower net charge-offs, significant pay-downs on other existing problem credits and reduced migration of new credits to non-performing status.

The provision for loan and lease losses was a credit of $3.5 million for the third quarter of 2011 compared to a charge of $2.5 million for the third quarter of 2010 and a charge of $1.2 million for the second quarter of 2011. The decrease in the provision was primarily the result of a lower level of historical net charge-offs.

Loan charge-offs, net of recoveries, totaled $2.0 million for the third quarter of 2011 compared to net charge-offs of $6.5 million for the third quarter of 2010 and net charge-offs of $4.8 million for the second quarter of 2011. The allowance for loan and lease losses represented 2.32% of outstanding loans and leases and 60% of non-performing loans at September 30, 2011 compared to 3.08% of outstanding loans and leases and 72% of non-performing loans at September 30, 2010 and 2.58% of outstanding loans and leases and 72% of non-performing loans at June 30, 2011. Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the third quarter of 2011 decreased by $1.2 million or 4% compared to the third quarter of 2010 due primarily to a decrease in interest income resulting from lower loan balances and the previously mentioned commercial real estate credit placed on non-accrual during the quarter. This decline in interest income was somewhat offset by a decrease in interest expense as average rates paid on deposit products decreased together with a planned run-off in average deposits.  These factors resulted in a decline in the net interest margin to 3.53% for the third quarter of 2011 compared to 3.64% for the third quarter of 2010.

Non-interest income increased $0.8 million or 8% to $11.3 million for the third quarter of 2011 compared to $10.5 million for the third quarter of 2010.  This increase was due primarily to increases in trust and investment management fees of $0.5 million or 21% and fees on sales of investment products, which increased $0.1 million or 16%, both due largely to higher average assets under management. These increases were partially offset by lower deposit service charges, which declined $0.1 million or 5% as a result of the impact of recently enacted legislation on overdraft fees. In addition, income from mortgage banking activities decreased $0.4 million or 25% due to a lower volume of refinancing activity compared to the third quarter of 2010.

Non-interest expenses were $25.8 million for the third quarter of 2011 compared to $25.1 million in the third quarter of 2010, an increase of $0.7 million or 3%. This increase was driven by an increase of $1.0 million or 8% in salaries and benefits expense due to higher salary and incentive compensation expenses. This increase was partially offset by lower FDIC insurance premiums.

Net interest income for the first nine months of 2011 decreased by $2.2 million or 2.5% compared to the first nine months of 2010 as a result of a decline in interest income due mainly to lower average loan balances and selected loans placed on non-accrual status during this period. The impact of a $7.5 million decline in interest income was substantially mitigated by a $5.3 million decline in interest expense as average rates paid on deposit products decreased, although at a slower pace. This resulted in a net interest margin of 3.59% for both the first nine months of 2011 and 2010.

Non-interest income remained virtually level at $32.1 million for the first nine months of 2011 as compared to the prior year period.  Deposit service charges declined $0.9 million or 11% as a result of the impact of recently enacted legislation on overdraft fees.  Trust and investment management fees increased $1.3 million or 18% primarily due to growth in average assets under management.  Fees on sales of investment products increased $0.3 million or 12% due primarily to an increase in managed assets. These increases in asset management fee income substantially offset the erosion experienced in deposit service fee income.  Visa check fees increased $0.3 million or 11% due to a continued increase in the volume of electronic transactions.

Non-interest expenses were $77.7 million in the first nine months of 2011 compared to $74.7 million in the same period of 2010, an increase of $3.0 million or 4%. Salaries and benefits expense increased $2.8 million or 7% due primarily to higher salary and incentive compensation expenses.  Other non-interest expenses increased $1.3 million or 12% due largely to losses on sales of other real estate owned and loan work out expenses.  These increases were partially offset by lower FDIC insurance premiums.

Conference Call

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.  Participants may call 1-877-317-6789. A password is not necessary.  Visitors to the Web site are advised to log on 10 minutes ahead of the scheduled start of the call.  An internet-based replay will be available at the Web site until 9:00 am (ET) November 21, 2011.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10005260.

About Sandy Spring Bancorp/Sandy Spring Bank

With $3.6 billion in assets, Sandy Spring Bancorp is the holding company for Sandy Spring Bank and its principal subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc.  Sandy Spring Bancorp is the largest publicly traded banking company headquartered and operating 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 43 community offices in Anne Arundel, Carroll, Frederick, Howard, Montgomery, and Prince George’s counties in Maryland, and Arlington, Fairfax and Loudoun counties in Virginia. Through its subsidiaries, Sandy Spring Bank also offers a comprehensive menu of insurance and investment management services. Visit www.sandyspringbank.com to locate an ATM near you or for more information about Sandy Spring Bank.

For additional information or questions, please contact:

Daniel J. Schrider, President & Chief Executive Officer, or

Philip J. Mantua, E.V.P. & Chief Financial Officer

Sandy Spring Bancorp

17801 Georgia Avenue

Olney, Maryland 20832

1-800-399-5919

Email:     DSchrider@sandyspringbank.com

 PMantua@sandyspringbank.com

Web site: www.sandyspringbank.com

Forward-Looking Statements

Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release.  These forward-looking statements may 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.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions.  Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time.  Forward-looking statements speak only as of the date they are made.  Sandy Spring Bancorp does not assume any duty and does not undertake to update its forward-looking statements.  Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Sandy Spring Bancorp anticipated in its forward-looking statements and future results could differ materially from historical performance.

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company’s loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company’s ability to retain key members of management; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties.  Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2010, including in the Risk Factors section of that report, and in its other SEC reports.  Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS - UNAUDITED

	Three Months Ended									Nine Months Ended
	September 30,						%			September 30,						%
(Dollars in thousands, except per share data)	2011			2010			Change			2011			2010			Change
Results of Operations:
Net interest income	$	28,330		$	29,499			(4	)%	$	84,494		$	86,654			(2	)%
Provision for loan and lease losses		(3,520	)		2,453			-			(854	)		23,585			(104	)
Non-interest income		11,336			10,539			8			32,130			32,060			-
Non-interest expenses		25,848			25,140			3			77,748			74,711			4
Income before income taxes		17,338			12,445			39			39,730			20,418			95
Net income		11,257			8,484			33			26,844			15,244			76
Net income available to common stockholders	$	11,257		$	6,410			76		$	26,844		$	10,767			149
Return on average assets   (1)		1.24	%		0.70	%					1.01	%		0.40	%
Return on average common equity   (1)		10.42	%		6.26	%					8.61	%		3.96	%
Net interest margin		3.53	%		3.64	%					3.59	%		3.59	%
Efficiency ratio - GAAP   (3)		65.16	%		62.79	%					66.67	%		62.93	%
Efficiency ratio - Non-GAAP   (3)		62.02	%		59.08	%					63.29	%		59.85	%
Per share data:
Basic net income	$	0.47		$	0.35			33	%	$	1.11		$	0.70			59	%
Basic net income per common share		0.47			0.27			73			1.11			0.49			127
Diluted net income		0.47			0.35			33			1.11			0.70			59
Diluted net income per common share		0.47			0.27			73			1.11			0.49			127
Average fully diluted shares		24,142,137			24,102,497			-			24,127,814			21,812,412			11
Dividends declared per common share		0.08			0.01			-			0.24			0.03			-
Book value per common share		18.31			17.14			7			18.31			17.14			7
Tangible book value per common share		14.35			13.29			8			14.35			13.29			8
Outstanding Common Shares		24,079,204			24,006,748			-			24,079,204			24,006,748			-
Financial Condition at period-end:
Investment securities	$	1,174,180		$	1,099,518			7	%	$	1,174,180		$	1,099,518			7	%
Loans and leases		2,145,403			2,185,207			(2	)		2,145,403			2,185,207			(2	)
Interest-earning assets		3,370,360			3,343,173			1			3,370,360			3,343,173			1
Assets		3,626,043			3,606,617			1			3,626,043			3,606,617			1
Deposits		2,640,324			2,585,496			2			2,640,324			2,585,496			2
Interest-bearing liabilities		2,517,180			2,547,334			(1	)		2,517,180			2,547,334			(1	)
Stockholders' equity		440,791			451,717			(2	)		440,791			451,717			(2	)
Capital ratios:
Tier 1 leverage		10.79	%		11.15	%					10.79	%		11.15	%
Tier 1 capital to risk-weighted assets		14.96	%		15.29	%					14.96	%		15.29	%
Total regulatory capital to risk-weighted assets		16.21	%		16.56	%					16.21	%		16.56	%
Tangible common equity to tangible assets    (4)		9.75	%		9.06	%					9.75	%		9.06	%
Average equity to average assets		11.87	%		12.57	%					11.71	%		12.14	%
Credit quality ratios:
Allowance for loan and lease losses to loans and leases		2.32	%		3.08	%					2.32	%		3.08	%
Non-performing loans to total loans		3.86	%		4.27	%					3.86	%		4.27	%
Non-performing assets to total assets		2.50	%		2.87	%					2.50	%		2.87	%
Allowance for loan and lease losses to non-performing loans		60.01	%		72.08	%					60.01	%		72.08	%
Annualized net charge-offs to average loans and leases     (2)		0.37	%		1.18	%					0.72	%		1.24	%

(1) Calculation utilizes net income available to common stockholders.

(2) Calculation utilizes average loans and leases, excluding residential mortgage loans held-for-sale.

(3) The GAAP efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional, non-GAAP efficiency ratio excludes intangible asset amortization from non-interest expense; securities gains (losses) from non-interest income; OTTI; and adds the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights.

(4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets, other comprehensive losses and preferred stock.  See the Reconciliation Table included with these Financial Highlights.

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2011			2010			2011			2010
GAAP efficiency ratio:
Non-interest expenses	$	25,848		$	25,140		$	77,748		$	74,711
Net interest income plus non-interest income	$	39,666		$	40,038		$	116,624		$	118,714
Efficiency ratio–GAAP		65.16	%		62.79	%		66.67	%		62.93	%
Non-GAAP efficiency ratio:
Non-interest expenses	$	25,848		$	25,140		$	77,748		$	74,711
Less non-GAAP adjustment:
Amortization of intangible assets		461			495			1,384			1,487
Non-interest expenses as adjusted	$	25,387		$	24,645		$	76,364		$	73,224
Net interest income plus non-interest income	$	39,666		$	40,038		$	116,624		$	118,714
Plus non-GAAP adjustment:
Tax-equivalent income		1,420			1,321			4,154			3,484
Less non-GAAP adjustments:
Securities gains		231			25			283			323
OTTI recognized in earnings		(76	)		(380	)		(160	)		(469	)
Net interest income plus non-interest income - as adjusted	$	40,931		$	41,714		$	120,655		$	122,344
Efficiency ratio–Non-GAAP		62.02	%		59.08	%		63.29	%		59.85	%
Tangible common equity ratio:
Total stockholders' equity	$	440,791		$	451,717		$	440,791		$	451,717
Accumulated other comprehensive income		(13,147	)		(8,384	)		(13,147	)		(8,384	)
Goodwill		(76,816	)		(76,816	)		(76,816	)		(76,816	)
Other intangible assets, net		(5,195	)		(7,050	)		(5,195	)		(7,050	)
Preferred stock		-			(40,308	)		-			(40,308	)
Tangible common equity	$	345,633		$	319,159		$	345,633		$	319,159
Total assets	$	3,626,043		$	3,606,617		$	3,626,043		$	3,606,617
Goodwill		(76,816	)		(76,816	)		(76,816	)		(76,816	)
Other intangible assets, net		(5,195	)		(7,050	)		(5,195	)		(7,050	)
Tangible assets	$	3,544,032		$	3,522,751		$	3,544,032		$	3,522,751
Tangible common equity ratio		9.75	%		9.06	%		9.75	%		9.06	%

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED

	September 30,			December 31,			September 30,
(Dollars in thousands)	2011			2010			2010
Assets
Cash and due from banks	$	43,132		$	44,696		$	40,511
Federal funds sold		1,146			1,813			1,522
Interest-bearing deposits with banks		26,535			16,608			37,692
Cash and cash equivalents		70,813			63,117			79,725
Residential mortgage loans held for sale (at fair value)		23,096			22,717			19,234
Investments available-for-sale (at fair value)		952,074			907,283			960,313
Investments held-to-maturity — fair value of $193,432, $104,124 and $111,298 at September 30, 2011, December 31, 2010 and September 30, 2010, respectively		189,520			101,590			106,553
Other equity securities		32,586			34,070			32,652
Total loans and leases		2,145,403			2,156,232			2,185,207
Less: allowance for loan and lease losses		(49,720	)		(62,135	)		(67,282	)
Net loans and leases		2,095,683			2,094,097			2,117,925
Premises and equipment, net		48,750			49,004			48,175
Other real estate owned		7,938			9,493			10,011
Accrued interest receivable		12,382			12,570			13,083
Goodwill		76,816			76,816			76,816
Other intangible assets, net		5,195			6,578			7,050
Other assets		111,190			142,053			135,080
Total assets	$	3,626,043		$	3,519,388		$	3,606,617
Liabilities
Noninterest-bearing deposits	$	643,169		$	566,812		$	580,309
Interest-bearing deposits		1,997,155			1,983,060			2,005,187
Total deposits		2,640,324			2,549,872			2,585,496
Securities sold under retail repurchase agreements and federal funds purchased		79,529			96,243			97,884
Advances from FHLB		405,496			405,758			409,263
Subordinated debentures		35,000			35,000			35,000
Accrued interest payable and other liabilities		24,903			24,946			27,257
Total liabilities		3,185,252			3,111,819			3,154,900
Stockholders' Equity
Preferred stock—par value $1.00 (liquidation preference of $1,000 per share) shares authorized 83,094, issued and outstanding 41,547, net of discount of $1,239 at September 30, 2010		-			-			40,308
Common stock — par value $1.00; shares authorized 50,000,000; shares issued and outstanding 24,079,204, 24,046,627 and 24,006,748 at September 30, 2011, December 31, 2010 and September 30, 2010, respectively		24,079			24,047			24,007
Warrants		-			3,699			3,699
Additional paid in capital		177,451			177,344			176,582
Retained earnings		226,114			205,099			198,737
Accumulated other comprehensive income (loss)		13,147			(2,620	)		8,384
Total stockholders' equity		440,791			407,569			451,717
Total liabilities and stockholders' equity	$	3,626,043		$	3,519,388		$	3,606,617

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands, except per share data)	2011			2010			2011			2010
Interest Income:
Interest and fees on loans and leases	$	26,791		$	29,084		$	80,597		$	87,742
Interest on loans held for sale		142			148			388			321
Interest on deposits with banks		23			61			62			158
Interest and dividends on investment securities:
Taxable		5,693			6,336			16,782			18,640
Exempt from federal income taxes		2,355			1,737			6,932			5,372
Interest on federal funds sold		-			1			1			2
Total interest income		35,004			37,367			104,762			112,235
Interest Expense:
Interest on deposits		2,773			3,883			8,673			13,741
Interest on retail repurchase agreements and federal funds purchased		49			61			155			198
Interest on advances from FHLB		3,628			3,676			10,769			10,949
Interest on subordinated debt		224			248			671			693
Total interest expense		6,674			7,868			20,268			25,581
Net interest income		28,330			29,499			84,494			86,654
Provision for loan and lease losses		(3,520	)		2,453			(854	)		23,585
Net interest income after provision for loan and lease losses		31,850			27,046			85,348			63,069
Non-interest Income:
Investment securities gains		231			25			283			323
Total other-than-temporary impairment ("OTTI") losses		(76	)		(334	)		(178	)		(1,168	)
Portion of OTTI losses recognized in other comprehensive income, before taxes		-			(46	)		18			699
Net OTTI recognized in earnings		(76	)		(380	)		(160	)		(469	)
Service charges on deposit accounts		2,444			2,567			7,133			7,984
Mortgage banking activities		1,141			1,516			2,404			2,750
Fees on sales of investment products		905			782			2,768			2,464
Trust and investment management fees		3,032			2,505			8,837			7,488
Insurance agency commissions		1,044			978			3,177			3,895
Income from bank owned life insurance		662			709			1,962			2,105
Visa check fees		927			843			2,710			2,438
Other income		1,026			994			3,016			3,082
Total non-interest income		11,336			10,539			32,130			32,060
Non-interest Expenses:
Salaries and employee benefits		14,892			13,841			44,192			41,393
Occupancy expense of premises		2,784			2,826			8,717			8,625
Equipment expenses		1,143			1,137			3,413			3,655
Marketing		468			589			1,662			1,678
Outside data services		1,073			966			3,067			3,007
FDIC insurance		709			1,056			2,489			3,383
Amortization of intangible assets		461			495			1,384			1,487
Other expenses		4,318			4,230			12,824			11,483
Total non-interest expenses		25,848			25,140			77,748			74,711
Income before income taxes		17,338			12,445			39,730			20,418
Income tax expense		6,081			3,961			12,886			5,174
Net income	$	11,257		$	8,484		$	26,844		$	15,244
Preferred stock dividends and discount accretion		-			2,074			-			4,477
Net income available to common stockholders	$	11,257		$	6,410		$	26,844		$	10,767
Net Income Per Share Amounts:
Basic net income per share	$	0.47		$	0.35		$	1.11		$	0.70
Basic net income per common share		0.47			0.27			1.11			0.49
Diluted net income per share	$	0.47		$	0.35		$	1.11		$	0.70
Diluted net income per common share		0.47			0.27			1.11			0.49
Dividends declared per common share	$	0.08		$	0.01		$	0.24		$	0.03

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

	2011									2010
(Dollars in thousands, except per share data)	Q3			Q2			Q1			Q4			Q3			Q2			Q1
Profitability for the quarter:
Tax-equivalent interest income	$	36,424		$	36,435		$	36,057		$	37,466		$	38,688		$	38,663		$	38,368
Interest expense		6,674			6,854			6,740			7,161			7,868			8,512			9,201
Tax-equivalent net interest income		29,750			29,581			29,317			30,305			30,820			30,151			29,167
Tax-equivalent adjustment		1,420			1,427			1,307			1,352			1,321			1,155			1,008
Provision for loan and lease losses		(3,520	)		1,151			1,515			2,323			2,453			6,107			15,025
Non-interest income		11,336			10,802			9,992			11,722			10,539			10,674			10,847
Non-interest expenses		25,848			25,838			26,062			26,201			25,140			24,758			24,813
Income (loss) before income taxes		17,338			11,967			10,425			12,151			12,445			8,805			(832	)
Income tax expense (benefit)		6,081			3,671			3,134			3,875			3,961			2,546			(1,333	)
Net Income		11,257			8,296			7,291			8,276			8,484			6,259			501
Net Income (loss) available to common stockholders	$	11,257		$	8,296		$	7,291		$	6,604		$	6,410		$	5,056		$	(699	)
Financial ratios:
Return on average assets		1.24	%		0.93	%		0.84	%		0.73	%		0.70	%		0.56	%		(0.08	)%
Return on average common equity		10.42	%		8.03	%		7.26	%		6.34	%		6.26	%		5.13	%		(0.92	)%
Return on average tangible common equity		12.90	%		10.03	%		9.13	%		9.06	%		9.08	%		6.42	%		0.67	%
Net interest margin		3.53	%		3.58	%		3.65	%		3.61	%		3.64	%		3.58	%		3.56	%
Efficiency ratio - GAAP (1)		65.16	%		66.33	%		68.58	%		64.42	%		62.79	%		62.41	%		63.61	%
Efficiency ratio - Non-GAAP (1)		62.02	%		62.82	%		65.09	%		61.85	%		59.08	%		59.44	%		61.08	%
Per share data:
Basic net income per share	$	0.47		$	0.34		$	0.30		$	0.34		$	0.35		$	0.26		$	0.03
Basic net income (loss) per common share		0.47			0.34			0.30			0.27			0.27			0.21			(0.04	)
Diluted net income per share		0.47			0.34			0.30			0.34			0.35			0.26			0.03
Diluted net income (loss) per common share		0.47			0.34			0.30			0.27			0.27			0.21			(0.04	)
Average fully diluted shares		24,142,137			24,130,357			24,115,906			24,087,482			24,102,497			24,033,158			17,243,415
Dividends declared per common share	$	0.08		$	0.08		$	0.08		$	0.01		$	0.01		$	0.01		$	0.01
Non-interest income:
Securities gains	$	231		$	32		$	20		$	473		$	25		$	95		$	203
Net OTTI recognized in earnings		(76	)		(43	)		(41	)		(43	)		(380	)		(89	)		-
Service charges on deposit accounts		2,444			2,437			2,252			2,342			2,567			2,791			2,626
Mortgage banking activities		1,141			808			455			914			1,516			806			428
Fees on sales of investment products		905			1,005			858			974			782			941			741
Trust and investment management fees		3,032			3,018			2,787			2,799			2,505			2,534			2,449
Insurance agency commissions		1,044			953			1,180			1,334			978			928			1,989
Income from bank owned life insurance		662			654			646			695			709			703			693
Visa check fees		927			949			834			887			843			855			740
Other income		1,026			989			1,001			1,347			994			1,110			978
Total non-interest income	$	11,336		$	10,801		$	9,992		$	11,722		$	10,539		$	10,674		$	10,847
Non-interest expense:
Salaries and employee benefits	$	14,892		$	14,676		$	14,624		$	14,077		$	13,841		$	14,181		$	13,371
Occupancy expense of premises		2,784			2,790			3,143			2,852			2,826			2,709			3,090
Equipment expenses		1,143			1,128			1,142			1,153			1,137			1,304			1,214
Marketing		468			709			485			681			589			573			516
Outside data services		1,073			999			995			985			966			918			1,123
FDIC insurance		709			736			1,044			1,114			1,056			1,186			1,141
Amortization of intangible assets		461			462			461			472			495			496			496
Professional fees		1,314			1,088			1,126			1,842			1,337			1,189			1,218
Other real estate owned expenses		383			726			699			443			236			(55	)		352
Other expenses		2,621			2,524			2,343			2,582			2,657			2,257			2,292
Total non-interest expense	$	25,848		$	25,838		$	26,062		$	26,201		$	25,140		$	24,758		$	24,813

(1) The GAAP efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional, non-GAAP efficiency ratio excludes intangible asset amortization from non-interest expense; excludes securities gains; OTTI losses from non-interest income; and adds the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights.

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

	2011									2010
(Dollars in thousands)	Q3			Q2			Q1			Q4			Q3			Q2			Q1
Balance sheets at quarter end:
Residential mortgage loans	$	440,606		$	445,605		$	444,519		$	436,534		$	442,723		$	458,502		$	460,129
Residential construction loans		90,727			81,425			84,939			91,273			92,485			86,393			83,902
Commercial ADC loans		141,576			149,215			151,135			151,061			153,139			155,751			177,498
Commercial investor real estate loans		357,358			353,749			355,967			327,782			335,426			328,244			316,336
Commercial owner occupied real estate loans		519,837			511,271			509,215			503,286			511,453			511,673			518,271
Commercial business loans		226,528			225,624			231,448			250,255			240,671			263,886			279,520
Leasing		8,484			10,200			12,477			15,551			17,895			20,823			23,474
Consumer loans		360,287			360,831			360,349			380,490			391,415			393,560			397,527
Total loans and leases		2,145,403			2,137,920			2,150,049			2,156,232			2,185,207			2,218,832			2,256,657
Allowance for loan and lease losses		(49,720	)		(55,246	)		(58,918	)		(62,135	)		(67,282	)		(71,377	)		(69,575	)
Investment securities		1,174,180			1,128,589			1,087,620			1,042,943			1,099,518			1,062,541			985,966
Interest-earning assets		3,370,360			3,322,317			3,283,819			3,240,313			3,343,173			3,437,731			3,401,162
Total assets		3,626,043			3,612,013			3,549,533			3,519,388			3,606,617			3,701,150			3,673,246
Noninterest-bearing demand deposits		643,169			648,605			619,905			566,812			580,309			593,007			560,027
Total deposits		2,640,324			2,657,861			2,599,634			2,549,872			2,585,496			2,659,956			2,653,448
Customer repurchase agreements		79,529			65,214			75,516			86,243			97,884			86,062			78,416
Total interest-bearing liabilities		2,517,180			2,515,053			2,495,916			2,520,061			2,547,334			2,597,445			2,618,178
Total stockholders' equity		440,791			423,984			409,076			407,569			451,717			483,681			471,857
Quarterly average balance sheets:
Residential mortgage loans	$	453,645		$	455,803		$	458,329		$	461,700		$	466,437		$	467,970		$	462,803
Residential construction loans		89,128			84,144			85,891			92,033			87,522			85,617			89,732
Commercial ADC loans		145,835			149,773			149,071			155,795			154,863			165,510			182,918
Commercial investor real estate loans		350,925			352,668			340,008			330,717			335,279			324,717			317,671
Commercial owner occupied real estate loans		515,185			509,273			500,875			505,248			512,370			512,997			522,398
Commercial business loans		225,041			225,646			236,949			240,083			253,058			271,839			292,844
Leasing		9,269			11,154			14,009			16,562			19,295			22,329			24,648
Consumer loans		360,875			362,098			367,261			387,375			393,491			395,833			398,233
Total loans and leases		2,149,903			2,150,559			2,152,393			2,189,513			2,222,315			2,246,812			2,291,247
Investment securities		1,168,712			1,121,325			1,054,740			1,112,128			1,058,175			1,013,756			970,681
Total earning assets		3,355,937			3,305,059			3,237,556			3,332,705			3,360,758			3,379,388			3,318,070
Total assets		3,610,219			3,566,278			3,500,807			3,594,812			3,620,881			3,645,090			3,591,786
Noninterest-bearing demand deposits		631,192			607,092			582,441			587,570			568,835			547,245			524,313
Total deposits		2,640,729			2,607,854			2,548,117			2,584,025			2,607,190			2,612,633			2,640,853
Customer repurchase agreements		72,646			70,313			79,067			92,049			87,927			85,178			81,622
Total interest-bearing liabilities		2,524,728			2,519,114			2,485,451			2,534,716			2,571,000			2,596,353			2,653,187
Total stockholders' equity		428,511			414,624			407,007			446,256			455,101			475,521			387,099
Capital measures:
Average equity to average assets		11.87	%		11.63	%		11.63	%		12.41	%		12.57	%		13.05	%		10.78	%
Tangible common equity to tangible assets (4)		9.75	%		9.51	%		9.47	%		9.51	%		9.06	%		8.63	%		8.53	%
Tier 1 leverage		10.79	%		10.64	%		10.63	%		10.30	%		11.15	%		12.00	%		12.01	%
Tier 1 capital to risk-weighted assets		14.96	%		14.75	%		14.21	%		14.11	%		15.29	%		16.50	%		15.77	%
Total regulatory capital to risk-weighted assets		16.21	%		16.01	%		15.48	%		15.37	%		16.56	%		17.77	%		17.04	%
Book value per common share	$	18.31		$	17.58		$	16.99		$	16.95		$	17.14		$	16.80		$	16.33
Tangible book value per common share		14.35			13.93			13.64			13.59			13.29			13.00			12.77
Outstanding common shares		24,079,204			24,095,123			24,084,423			24,046,627			24,006,748			23,998,950			23,985,149

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

	2011						2010
(dollars in thousands)	September 30,		June 30,		March 31,		December 31,		September 30,		June 30,		March 31,
Non-Performing Assets:
Loans and leases 90 days past due:
Commercial business	$	-	$	-	$	-	$	19	$	56	$	357	$	3,829
Commercial real estate:
Commercial AD&C		-		-		-		-		-		-		-
Commercial investor real estate		-		-		-		-		944		-		-
Commercial owner occupied real estate		-		-		-		-		317		160		-
Leasing		63		20		24		407		409		582		163
Consumer		373		337		169		182		550		745		848
Residential real estate:
Residential mortgage		2,291		3,820		4,616		9,871		12,545		18,131		16,879
Residential construction		-		-		2,367		3,675		3,447		4,251		3,366
Total loans and leases 90 days past due		2,727		4,177		7,176		14,154		18,268		24,226		25,085
Non-accrual loans and leases:
Commercial business		8,038		8,288		9,649		7,938		10,747		14,512		17,600
Commercial real estate:
Commercial AD&C		24,481		26,133		28,310		30,417		44,175		47,341		72,021
Commercial investor real estate		16,118		2,975		2,519		1,753		1,160		1,160		1,171
Commercial owner occupied real estate		11,847		13,019		12,304		11,781		10,197		11,620		9,327
Leasing		956		1,017		1,529		1,887		1,903		1,621		1,472
Consumer		1,478		590		720		300		20		227		604
Residential real estate:
Residential mortgage		6,081		6,295		6,652		3,946		2,149		3,011		4,120
Residential construction		5,034		5,701		5,222		5,305		3,525		4,395		4,404
Total non-accrual loans and lease		74,033		64,018		66,905		63,327		73,876		83,887		110,719
Total restructured loans - accruing		6,088		8,299		14,266		10,571		1,199		1,199		682
Total non-performing loans and leases		82,848		76,494		88,347		88,052		93,343		109,312		136,486
Other assets and real estate owned (OREO)		7,938		6,951		7,960		9,493		10,011		8,730		6,796
Other assets owned		-		-		-		200		200		-		-
Total non-performing assets	$	90,786	$	83,445	$	96,307	$	97,745	$	103,554	$	118,042	$	143,282

	For the quarter ended,
	September 30,			June 30,			March 31,			December 31,			September 30,			June 30,			March 31,
	2011			2011			2011			2010			2010			2010			2010
Analysis of non-accrual loan and lease activity
Balance at beginning of period	$	64,018		$	66,905		$	63,327		$	73,876		$	83,887		$	110,719		$	111,181
Non-accrual balances transferred to OREO		(142	)		(791	)		(535	)		(222	)		(1,119	)		(540	)		(1,982	)
Non-accrual balances charged-off		(1,375	)		(2,112	)		(2,701	)		(7,288	)		(3,664	)		(4,599	)		(8,642	)
Net payments or draws		(4,839	)		(8,016	)		(2,531	)		(16,191	)		(4,288	)		(25,043	)		(2,179	)
Loans placed on non-accrual		17,226			8,032			9,526			13,152			2,656			5,640			12,537
Non-accrual loans brought current		(855	)		-			(181	)		-			(3,596	)		(2,290	)		(196	)
Balance at end of period	$	74,033		$	64,018		$	66,905		$	63,327		$	73,876		$	83,887		$	110,719
Analysis of Allowance for Loan Losses:
Balance at beginning of period	$	55,246		$	58,918		$	62,135		$	67,282		$	71,377		$	69,575		$	64,559
Provision for loan and lease losses		(3,520	)		1,151			1,515			2,323			2,453			6,107			15,025
Less loans charged-off, net of recoveries:
Commercial business		397			769			790			1,651			1,469			(1,325	)		2,395
Commercial real estate:
Commercial AD&C		151			253			(137	)		2,990			1,923			2,656			4,914
Commercial investor real estate		30			504			(4	)		231			(1	)		-			-
Commercial owner occupied real estate		45			113			-			464			164			515			544
Leasing		85			455			333			3			-			98			2
Consumer		375			713			1,091			610			642			947			1,072
Residential real estate:
Residential mortgage		751			1,319			2,095			1,396			2,170			1,333			793
Residential construction		172			697			564			125			181			81			289
Net charge-offs		2,006			4,823			4,732			7,470			6,548			4,305			10,009
Balance at end of period	$	49,720		$	55,246		$	58,918		$	62,135		$	67,282		$	71,377		$	69,575
Asset Quality Ratios:
Non-performing loans to total loans		3.86	%		3.58	%		4.11	%		4.08	%		4.27	%		4.93	%		6.05	%
Non-performing assets to total assets		2.50	%		2.31	%		2.71	%		2.78	%		2.87	%		3.19	%		3.90	%
Allowance for loan losses to loans		2.32	%		2.58	%		2.74	%		2.88	%		3.08	%		3.22	%		3.08	%
Allowance for loan losses to non-performing loans		60.01	%		72.22	%		66.69	%		70.57	%		72.08	%		65.30	%		50.98	%
Net charge-offs in quarter to average loans		0.37	%		0.90	%		0.89	%		1.37	%		1.18	%		0.77	%		1.78	%

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

	Three Months Ended September 30,
	2011								2010
						Annualized								Annualized
	Average			(1)		Average			Average			(1)		Average
(Dollars in thousands and tax-equivalent)	Balances			Interest		Yield/Rate			Balances			Interest		Yield/Rate
Assets
Residential mortgage loans (3)	$	453,645		$	5,375		4.74	%	$	466,437		$	6,081		5.23	%
Residential construction loans		89,128			898		4.00			87,522			964		4.37
Commercial ADC loans		145,835			1,688		4.59			154,863			1,768		4.53
Commercial investor real estate loans		350,925			4,908		5.49			335,279			5,094		6.03
Commercial owner occupied real estate loans		515,185			7,760		6.01			512,370			7,784		6.03
Commercial business loans		225,041			2,844		5.01			253,058			3,397		5.33
Leasing		9,269			157		6.79			19,295			340		7.06
Consumer loans		360,875			3,303		3.63			393,491			3,804		3.86
Total loans and leases (2)		2,149,903			26,933		4.98			2,222,315			29,232		5.23
Taxable securities		916,982			6,044		2.64			906,231			6,463		2.91
Tax-exempt securities (4)		251,730			3,424		5.44			151,944			2,931		7.03
Interest-bearing deposits with banks		35,992			23		0.25			78,355			61		0.31
Federal funds sold		1,330			-		0.13			1,913			1		0.18
Total interest-earning assets		3,355,937			36,424		4.32			3,360,758			38,688		4.57
Less:  allowance for loan and lease losses		(55,980	)							(71,059	)
Cash and due from banks		47,421								44,806
Premises and equipment, net		49,037								48,518
Other assets		213,804								237,858
Total assets	$	3,610,219							$	3,620,881
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	346,941			102		0.12	%	$	299,110			82		0.11	%
Regular savings deposits		187,060			47		0.10			166,989			41		0.10
Money market savings deposits		865,492			909		0.42			886,296			1,125		0.50
Time deposits		610,044			1,715		1.12			685,960			2,635		1.52
Total interest-bearing deposits		2,009,537			2,773		0.55			2,038,355			3,883		0.76
Other borrowings		74,657			49		0.26			88,308			61		0.27
Advances from FHLB		405,534			3,628		3.55			409,337			3,676		3.56
Subordinated debentures		35,000			224		2.55			35,000			248		2.84
Total interest-bearing liabilities		2,524,728			6,674		1.05			2,571,000			7,868		1.21
Noninterest-bearing demand deposits		631,192								568,835
Other liabilities		25,788								25,945
Stockholders' equity		428,511								455,101
Total liabilities and stockholders' equity	$	3,610,219							$	3,620,881
Net interest income and spread				$	29,750		3.27	%				$	30,820		3.36	%
Less: tax-equivalent adjustment					1,420								1,321
Net interest income				$	28,330							$	29,499
Interest income/earning assets							4.32	%							4.57	%
Interest expense/earning assets							0.79								0.93
Net interest margin							3.53	%							3.64	%

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2011 and  2010. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.4 million and $1.3 million in 2011 and 2010, respectively.

(2) Non-accrual loans are included in the average balances.

(3) Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans.

(4) Includes only investments that are exempt from federal taxes.

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

	Nine Months Ended September 30,
	2011								2010
						Annualized								Annualized
	Average			(1)		Average			Average			(1)		Average
(Dollars in thousands and tax-equivalent)	Balances			Interest		Yield/Rate			Balances			Interest		Yield/Rate
Assets
Residential mortgage loans (3)	$	455,909		$	16,747		4.89	%	$	465,393		$	18,989		5.44	%
Residential construction loans		86,399			2,448		3.79			87,616			3,044		4.65
Commercial ADC loans		148,215			4,813		4.34			157,253			4,587		3.90
Commercial investor real estate loans		347,926			15,236		5.94			337,127			15,241		6.04
Commercial owner occupied real estate loans		508,478			22,686		6.05			515,119			23,288		6.04
Commercial business loans		229,168			8,493		4.95			272,435			10,249		5.03
Leasing		11,460			576		6.70			22,071			1,185		7.16
Consumer loans		363,388			9,986		3.70			395,835			11,480		3.90
Total loans and leases (2)		2,150,943			80,985		5.03			2,252,849			88,063		5.22
Taxable securities		879,230			17,810		2.70			855,243			19,227		3.02
Tax-exempt securities (4)		236,113			10,058		5.68			159,281			8,269		6.92
Interest-bearing deposits with banks		32,257			62		0.25			83,351			158		0.25
Federal funds sold		1,408			1		0.14			1,814			2		0.17
Total interest-earning assets		3,299,951			108,916		4.41			3,352,538			115,719		4.61
Less:  allowance for loan and lease losses		(58,672	)							(70,145	)
Cash and due from banks		45,587								44,633
Premises and equipment, net		49,130								48,876
Other assets		223,506								243,100
Total assets	$	3,559,502							$	3,619,002
Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	336,020			278		0.11	%	$	288,637			256		0.12	%
Regular savings deposits		182,424			142		0.10			163,687			128		0.10
Money market savings deposits		855,458			2,865		0.45			892,838			4,006		0.60
Time deposits		618,250			5,388		1.17			727,980			9,351		1.72
Total interest-bearing deposits		1,992,152			8,673		0.58			2,073,142			13,741		0.89
Other borrowings		77,135			155		0.27			87,881			198		0.30
Advances from FHLB		405,621			10,769		3.55			410,523			10,949		3.57
Subordinated debentures		35,000			671		2.55			35,000			693		2.64
Total interest-bearing liabilities		2,509,908			20,268		1.08			2,606,546			25,581		1.31
Noninterest-bearing demand deposits		607,087								546,961
Other liabilities		25,714								26,006
Stockholders' equity		416,793								439,489
Total liabilities and stockholders' equity	$	3,559,502							$	3,619,002
Net interest income and spread				$	88,648		3.33	%				$	90,138		3.30	%
Less: tax-equivalent adjustment					4,154								3,484
Net interest income				$	84,494							$	86,654
Interest income/earning assets							4.41	%							4.61	%
Interest expense/earning assets							0.82								1.02
Net interest margin							3.59	%							3.59	%

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2011 and  2010. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.2 million and $3.5 million in 2011 and 2010, respectively.

(2) Non-accrual loans are included in the average balances.

(3) Includes residential mortgage loans held for sale. Home equity loans and lines are classified as consumer loans.

(4) Includes only investments that are exempt from federal taxes.