Segment Reporting

9 Months Ended

Sep. 30, 2013

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 $0.3 million and $0.4 million in for the three months ended September 30, 2013 and 2012, respectively. These non-cash charges amounted to $1.1 million for the nine months ended September 30, 2013 and 2012.

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, 2013 and 2012, 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 $880 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, 2013 and 2012, respectively.

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

	Three Months Ended September 30, 2013
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	40,180	$	1	$	4	$	(5)	$	40,180
Interest expense		4,879		-		-		(5)		4,874
Provision (credit) for loan and lease losses		1,128		-		-		-		1,128
Non-interest income		8,453		1,271		1,573		(74)		11,223
Non-interest expenses		24,939		1,135		893		(74)		26,893
Income before income taxes		17,687		137		684		-		18,508
Income tax expense		6,094		55		270		-		6,419
Net income	$	11,593	$	82	$	414	$	-	$	12,089
Assets	$	4,088,617	$	13,907	$	18,350	$	(67,905)	$	4,052,969

	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
Non-interest income		9,942		1,076		1,427		(203)		12,242
Non-interest 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

	Nine Months Ended September 30, 2013
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	112,238	$	6	$	11	$	(17)	$	112,238
Interest expense		14,691		-		-		(17)		14,674
Provision (credit) for loan and lease losses		(1,670)		-		-		-		(1,670)
Non-interest income		27,748		3,968		4,622		(481)		35,857
Non-interest expenses		76,893		3,270		2,542		(481)		82,224
Income before income taxes		50,072		704		2,091		-		52,867
Income tax expense		16,955		285		818		-		18,058
Net income	$	33,117	$	419	$	1,273	$	-	$	34,809
Assets	$	4,088,617	$	13,907	$	18,350	$	(67,905)	$	4,052,969

	Nine Months Ended September 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
Non-interest income		27,742		3,388		4,188		(609)		34,709
Non-interest 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