SEGMENT REPORTING

9 Months Ended

Sep. 30, 2014

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. Amortization of intangibles related to the acquired entities was not significant for the three months ended September 30, 2014 was not significant. Non-cash charges associated with amortization of intangibles related to the acquired entities amounted to $0.3 million for the three months ended September 30, 2013.  These non-cash charges amounted to $0.4 million and $1.1 million for the nine months ended September 30, 2014 and 2013.

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, 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 $1.0 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 and nine months ended September 30, 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 September 30, 2014
		Community				Investment		Inter-Segment
(In thousands)		Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	37,150	$	1	$	1	$	(2)	$	37,150
Interest expense		4,732		-		-		(2)		4,730
Provision for loan and lease losses		(192)		-		-		-		(192)
Noninterest income		9,545		1,498		1,722		(175)		12,590
Noninterest expenses		26,632		1,226		949		(175)		28,632
Income before income taxes		15,523		273		774		-		16,570
Income tax expense		5,014		110		304		-		5,428
Net income	$	10,509	$	163	$	470	$	-	$	11,142
Assets	$	4,250,103	$	6,053	$	11,409	$	(18,834)	$	4,248,731
		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
Noninterest income		8,453		1,271		1,573		(74)		11,223
Noninterest 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
		Nine Months Ended September 30, 2014
		Community				Investment		Inter-Segment
(In thousands)		Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	110,391	$	6	$	10	$	(16)	$	110,391
Interest expense		14,086		-		-		(16)		14,070
Provision (credit) for loan and lease losses		(1,016)		-		-		-		(1,016)
Noninterest income		29,669		4,273		5,117		(3,526)		35,533
Noninterest expenses		87,550		3,542		2,756		(3,526)		90,322
Income before income taxes		39,440		737		2,371		-		42,548
Income tax expense		12,272		298		926		-		13,496
Net income	$	27,168	$	439	$	1,445	$	-	$	29,052
Assets	$	4,250,103	$	6,053	$	11,409	$	(18,834)	$	4,248,731
		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)
Noninterest income		27,748		3,968		4,622		(481)		35,857
Noninterest 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