Segment Reporting

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Reporting

Note 15 - Segment Reporting

Currently, the Company conducts business in three operating segments—Community Banking, Insurance and Investment Management. Each of the operating segments is a strategic business unit that offers different products and services. The Insurance and Investment Management segments were businesses that were acquired in separate transactions where management of acquisition was retained. The accounting policies of the segments are the same as those of the Company. However, the segment data reflect inter-segment transactions and balances.

The Community Banking segment is conducted through Sandy Spring Bank and involves delivering a broad range of financial products and services, including various loan and deposit products to both individuals and businesses. Parent company income is included in the Community Banking segment, as the majority of effort of these functions is related to this segment. Major revenue sources include net interest income, gains on sales of mortgage loans, trust income, fees on sales of investment products and service charges on deposit accounts. Expenses include personnel, occupancy, marketing, equipment and other expenses. Non-cash charges associated with amortization of intangibles related to the acquired entities amounted to $0.4 million and $0.3 million in for the three months ended September 30, 2012 and 2011, respectively. For the nine months ended September 30, 2012 and 2011, these non-cash charges amounted to $1.1 million and $1.0 million, respectively.

The Insurance segment is conducted through Sandy Spring Insurance Corporation, a subsidiary of the Bank, and offers annuities as an alternative to traditional deposit accounts. Sandy Spring Insurance Corporation operates Sandy Spring Insurance, a general insurance agency located in Annapolis, Maryland, and Neff and Associates, located in Ocean City, Maryland. Major sources of revenue are insurance commissions from commercial lines, personal lines, and medical liability lines. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles related to the acquired entities was not significant for the three and nine months ended September 30, 2012 and 2011, respectively.

The Investment Management segment is conducted through West Financial Services, Inc., a subsidiary of the Bank. This asset management and financial planning firm, located in McLean, Virginia, provides comprehensive investment management and financial planning to individuals, families, small businesses and associations including cash flow analysis, investment review, tax planning, retirement planning, insurance analysis and estate planning. West Financial currently has approximately $822 million in assets under management. Major revenue sources include non-interest income earned on the above services. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles related to the acquired entities was not significant for the three and nine months ended September 30, 2012 and 2011, respectively.

Information for the operating segments and reconciliation of the information to the consolidated financial statements for the periods indicated is presented in the following tables:

	Three Months Ended September 30, 2012
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination			Total
Interest income	$	37,494	$	2	$	4	$	(5	)	$	37,495
Interest expense		5,715		—		—		(5	)		5,710
Provision for loan and lease losses		232		—		—		—			232
Noninterest income		9,942		1,076		1,427		(203	)		12,242
Noninterest expenses		25,504		1,036		830		(203	)		27,167
Income before income taxes		15,985		42		601		—			16,628
Income tax expense		5,390		17		231		—			5,638
Net income	$	10,595	$	25	$	370	$	—		$	10,990
Assets	$	3,901,588	$	13,058	$	16,579	$	(43,798	)	$	3,887,427

				Three Months Ended September 30, 2011
	Community					Investment		Inter-Segment
(In thousands)	Banking			Insurance		Mgmt.		Elimination			Total
Interest income	$	35,008		$	1	$	2	$	(7	)	$	35,004
Interest expense		6,681			—		—		(7	)		6,674
Provision for loan and lease losses		(3,520	)		—		—		—			(3,520	)
Noninterest income		9,084			1,136		1,319		(203	)		11,336
Noninterest expenses		24,198			1,054		799		(203	)		25,848
Income before income taxes		16,733			83		522		—			17,338
Income tax expense		5,843			35		203		—			6,081
Net income	$	10,890		$	48	$	319	$	—		$	11,257
Assets	$	3,655,556		$	12,715	$	15,008	$	(57,236	)	$	3,626,043

	Nine Months Ended S eptember 30, 2012
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination			Total
Interest income	$	107,668	$	5	$	9	$	(14	)	$	107,668
Interest expense		17,383		—		—		(14	)		17,369
Provision for loan and lease losses		2,481		—		—		—			2,481
Noninterest income		27,742		3,388		4,188		(609	)		34,709
Noninterest expenses		77,736		3,204		2,377		(609	)		82,708
Income before income taxes		37,810		189		1,820		—			39,819
Income tax expense		12,363		77		706		—			13,146
Net income	$	25,447	$	112	$	1,114	$	—		$	26,673
Assets	$	3,901,588	$	13,058	$	16,579	$	(43,798	)	$	3,887,427

				Nine Months Ended September 30, 2011
	Community					Investment		Inter-Segment
(In thousands)	Banking			Insurance		M gmt.		Elimination			Total
Interest income	$	104,822		$	4	$	6	$	(70	)	$	104,762
Interest expense		20,338			—		—		(70	)		20,268
Provision for loan and lease losses		(854	)		—		—		—			(854	)
Noninterest income		25,162			3,526		4,050		(608	)		32,130
Noninterest expenses		72,631			3,346		2,379		(608	)		77,748
Income before income taxes		37,869			184		1,677		—			39,730
Income tax expense		12,157			76		653		—			12,886
Net income	$	25,712		$	108	$	1,024	$	—		$	26,844
Assets	$	3,655,556		$	12,715	$	15,008	$	(57,236	)	$	3,626,043