SEGMENT REPORTING

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

SEGMENT REPORTING

Note 14 - 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 March 31, 2014 and 2013, 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 ended March 31, 2014 and 2013, 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 $1.1 billion 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 ended March 31, 2014 and 2013, 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 March 31, 2014
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	36,250	$	2	$	4	$	(6)	$	36,250
Interest expense		4,664		-		-		(6)		4,658
Provision (credit) for loan and lease losses		(982)		-		-		-		(982)
Noninterest income		8,015		1,731		1,678		(175)		11,249
Noninterest expenses		25,612		1,192		920		(175)		27,549
Income before income taxes		14,971		541		762		-		16,274
Income tax expense		4,831		218		297		-		5,346
Net income	$	10,140	$	323	$	465	$	-	$	10,928
Assets	$	4,206,353	$	14,461	$	19,928	$	(71,744)	$	4,168,998

	Three Months Ended March 31, 2013
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	36,279	$	2	$	3	$	(5)	$	36,279
Interest expense		4,958		-		-		(5)		4,953
Provision for loan and lease losses		78		-		-		-		78
Noninterest income		9,706		1,407		1,509		(203)		12,419
Noninterest expenses		26,044		1,126		856		(203)		27,823
Income before income taxes		14,905		283		656		-		15,844
Income tax expense		4,915		115		256		-		5,286
Net income	$	9,990	$	168	$	400	$	-	$	10,558
Assets	$	3,976,665	$	13,659	$	17,889	$	(76,187)	$	3,932,026