0001144204-18-002566.txt : 20180118 0001144204-18-002566.hdr.sgml : 20180118 20180118092626 ACCESSION NUMBER: 0001144204-18-002566 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20180118 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180118 DATE AS OF CHANGE: 20180118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SANDY SPRING BANCORP INC CENTRAL INDEX KEY: 0000824410 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 521532952 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19065 FILM NUMBER: 18533060 BUSINESS ADDRESS: STREET 1: 17801 GEORGIA AVE CITY: OLNEY STATE: MD ZIP: 20832 BUSINESS PHONE: 3017746400 MAIL ADDRESS: STREET 1: 17801 GEORGIA AVENUE CITY: OLNEY STATE: MD ZIP: 20832 8-K 1 tv483452_8k.htm FORM 8-K

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 18, 2018

 

SANDY SPRING BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

Maryland   000-19065   52-1532952

(State or other jurisdiction

of incorporation)

   (Commission File Number)  

(IRS Employer

Identification No.)

 

17801 Georgia Avenue, Olney, Maryland 20832

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (301) 774-6400

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02Results of Operations and Financial Condition

 

On January 18, 2018, Sandy Spring Bancorp, Inc. issued a news release announcing its results of operations and financial condition for the quarter ended December 31, 2017. A copy of the news release is included as Exhibit 99.1 to this report.

 

Item 9.01Financial Statements and Exhibits

 

Exhibits

 

Number   Description
     
99.1   Press Release dated January 18, 2018

 

 2 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SANDY SPRING BANCORP, INC.
  (Registrant)
     
Date:  January 18, 2018 By: /s/ Daniel J. Schrider
    Daniel J. Schrider
    President and Chief Executive Officer

 

 3 

 

 EX-99.1 2 tv483452_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

  News release

 

FOR IMMEDIATE RELEASE

 

SANDY SPRING BANCORP REPORTS NET INCOME OF $8.3 MILLION FOR THE FOURTH QUARTER

 

2017 Net Income Reached Record Levels While Also Recognizing the Impact of Recently Enacted Tax Legislation in the Fourth Quarter

 

OLNEY, MARYLAND, January 18, 2018 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income for the fourth quarter of 2017 of $8.3 million ($0.34 per diluted share) compared to net income of $13.3 million ($0.55 per diluted share) for the fourth quarter of 2016 and net income of $15.1 million ($0.62 per diluted share) for the third quarter of 2017. The current quarter’s results included $5.6 million in additional income tax expense from the revaluation of deferred tax assets as a result of the reduction in the corporate income tax rate under the recently enacted Tax Cuts and Jobs Act, as well as $1.8 million in post-tax merger expenses. The combined impact of these items resulted in a reduction to quarterly earnings per share of approximately $0.30 per share.

 

Net income for the full year 2017 was a record $53.2 million ($2.20 per diluted share) after the inclusion of the additional tax expense and the expenses associated with the acquisition of WashingtonFirst Bankshares. The additional income tax and merger expenses, net of tax, resulted in a reduction of earnings per share of approximately $0.34 per share for full-year-2017.

 

“This has been an outstanding year in terms of core performance and our ability to grow our franchise organically. Even in light of the inclusion of the increased tax expense and merger costs, net income for 2017 reached record levels. Core earnings for the fourth quarter continued to positively reflect the effects of loan and deposit growth that we have been experiencing. With the acquisition of WashingtonFirst Bankshares, which became effective on January 1, 2018, we enter the year as one of the premier banks in the region, and with the same steadfast commitment to delivering personalized service to our clients and serving our communities. It’s this commitment that has helped us grow to better serve our clients, employees, and shareholders. We continue to be encouraged by the current economic environment and the prospects for our ongoing growth,” said Daniel J. Schrider, President and Chief Executive Officer.

 

 

 

  

Fourth Quarter Highlights:

 

·Total loans increased 10% compared to the fourth quarter of 2016 and 3% compared to the third quarter of 2017. The year-over-year increase was driven primarily by year-over-year growth of 11% in the commercial loan portfolio.

 

·Total deposits grew 11% from the prior year quarter.

 

·The net interest margin was 3.57% for the fourth quarter of 2017, compared to 3.52% for the fourth quarter of 2016 and 3.54% for the third quarter of 2017. Net interest income from the fourth quarter of 2017 included $0.4 million recovery of interest income from a previously charged-off loan. Exclusive of this item, the quarter’s margin would have been 3.53%.

 

·Pre-tax merger expenses recognized in the fourth quarter of 2017 totaled $2.9 million.

 

·The tax rate reduction associated with the recently enacted tax reform legislation caused a revaluation of net deferred tax assets and resulted in $5.6 million of additional income tax expense in the fourth quarter of 2017.

 

·Pre-tax, pre-provision income increased 14% compared with the fourth quarter of 2016.

 

·The Non-GAAP efficiency ratio which excludes merger costs was 55.69% for the current quarter as compared to 57.54% for the fourth quarter of 2016 and 53.76% for the third quarter of 2017.

 

Review of Balance Sheet and Credit Quality

 

At December 31, 2017, total assets were $5.4 billion, a 7% increase compared to $5.1 billion at December 31, 2016. Loan growth continues to be the driver of asset growth as total loans ended the period at $4.3 billion compared to $3.9 billion at December 31, 2016. The growth in the loan portfolio was funded primarily by an 11% increase in total deposits from December 31, 2016, to December 31, 2017.

 

Combined noninterest-bearing and interest-bearing checking account balances at December 31, 2017, an important performance driver of multiple-product banking relationships with clients, increased by 10% compared to balances at December 31, 2016.

 

Tangible common equity totaled $484 million at December 31, 2017, compared to $454 million at December 31, 2016. As a result of asset growth over the preceding 12 months, the ratio of tangible common equity to tangible assets decreased to 9.04% at December 31, 2017, from 9.07% at December 31, 2016. At December 31, 2017, the Company had a total risk-based capital ratio of 11.85%, a common equity tier 1 risk-based capital ratio of 10.84%, a tier 1 risk-based capital ratio of 10.84% and a tier 1 leverage ratio of 9.24%. These ratios reflect the application of the currently applicable authoritative guidance.

 

 

 

  

The level of non-performing loans to total loans decreased to 0.68% at December 31, 2017, compared to 0.81% at December 31, 2016, as a result of the growth in the loan portfolio and a reduction in non-performing loans. At December 31, 2017, non-performing loans totaled $29.3 million compared to $31.9 million at December 31, 2016, and $30.2 million at September 30, 2017. Non-performing loans include accruing loans 90 days or more past due and restructured loans.

 

Loan charge-offs, net of recoveries, totaled $0.2 million for the fourth quarter of 2017 compared to $0.4 million for the fourth quarter of 2016. The allowance for loan losses represented 1.05% of outstanding loans and 154% of non-performing loans at December 31, 2017, compared to 1.12% of outstanding loans and 138% of non-performing loans at December 31, 2016. The decline in the allowance to outstanding loans ratio is a reflection of improved credit quality and growth of the loan portfolio over the past year.

 

Income Statement Review

 

Net interest income for the fourth quarter of 2017 increased 12% compared to the fourth quarter of 2016 as average loans compared to the prior year quarter increased 10%. The net interest margin improved to 3.57% for the fourth quarter of 2017 compared to 3.52% for the fourth quarter of 2016. Exclusive of the recovered interest income, the net interest margin would have been 3.53%. The maintenance of the current quarter’s margin compared to the prior year’s quarter, exclusive of the recovered interest, reflects the impact of loan growth coupled with rate increases during the year, benefits associated with the execution of funding strategies and higher yields associated with the investment portfolio that offset the increased funding costs for the current quarter compared to the prior year quarter.

 

The provision for loan losses was $0.5 million for the fourth quarter of 2017 compared to $0.6 million for the fourth quarter of 2016 and $0.9 million for the third quarter of 2017. The relative stability in the provision reflects the improved credit quality of the growing loan portfolio.

 

Non-interest income remained stable for the fourth quarter of 2017 as compared to the fourth quarter of 2016. Wealth management income increased 10% while deposit service charges and insurance commissions both increased 6% for the fourth quarter compared to the same period of the prior year. These results were offset by a 49% decline in mortgage banking income from the prior year as mortgage loan origination activity declined in the current quarter compared to the prior year quarter.

 

Non-interest expenses increased 15% to $35.1 million for the fourth quarter of 2017 compared to $30.5 million in the fourth quarter of 2016. The increase in the current quarter compared to the prior year quarter was driven primarily by a $2.9 million in merger related expenses and $0.6 million increase in salary and benefit costs. The non-GAAP efficiency ratio was 55.69% for the fourth quarter of 2017 compared to 57.54% for the fourth quarter of 2016 as a result of the growth in net interest income.

 

Due to the recently enacted tax legislation that results in a rate reduction in future years, authoritative guidance requires a revaluation of the deferred tax assets in 2017. Accordingly, this revaluation resulted in $5.6 million in additional income tax expense in the fourth quarter of 2017. The impact of the additional tax expense and the post-tax effect of the merger expenses resulted in a $0.30 per share reduction in quarterly earnings per share.

 

 

 

  

Net interest income for the year ended December 31, 2017, increased 13% compared to 2016 due primarily to an increase in average loans and investments, which was funded primarily by an 11% increase in average deposits. As a result, the net interest margin was 3.55% for 2017 compared to 3.49% for the prior year. Net interest income for 2017 included $1.1 million in interest recoveries. Exclusive of these recoveries the net interest margin would have been 3.53%.

 

The provision for loan losses was $3.0 million for the year ended December 31, 2017, compared to $5.5 million for 2016 reflecting the effect of improved credit quality of the loan portfolio that offset the impact of the growth of the loan portfolio from the prior year.

 

Non-interest income was $51.2 million for 2017 compared to $51.0 million for 2016. The year ended December 31, 2017, included gains of $1.3 million on sales of investment securities while the prior year included a $1.2 million gain on the extinguishment of subordinated debentures and $1.9 million in gains on the sales of investment securities. Excluding these gains, non-interest income increased 4% compared to the prior year primarily due to increases in wealth management income, insurance agency commissions and deposit service charges.

 

Non-interest expenses increased 5% to $129.1 million for the year ended December 31, 2017, compared to $123.1 million for the prior year. Included in 2017 were increases from the prior year of $1.8 million in salaries and benefits, $0.6 million in FDIC insurance as a result of asset growth, and $4.3 million in merger expenses. These increases were partially offset by the decrease in prepayment penalties of $1.9 million for the early payoff of high-rate FHLB advances as compared to the year ended December 31, 2016. Excluding the impact of the FHLB prepayment penalties from the current and prior year’s results and the exclusion of merger expenses for 2017, non-interest expense increased 3%. The non-GAAP efficiency ratio decreased to 54.59% for 2017 compared to 58.66% for 2016 as a direct result of the growth in net interest income.

 

The additional income tax expense of $5.6 million and merger expenses, net of tax, resulted in a reduction of earnings per share of approximately $0.34 per share for full- year 2017. Pre-tax, pre-provision income, which adjusts for these items, increased 23% from full-year 2016 to full-year 2017 to a record $95.2 million.

 

Conference Call

 

The Company’s management will host a conference call to discuss its second quarter results today at 2:00 P.M. (ET). A live Webcast of the conference call is available through the Investor Relations’ section of the Sandy Spring Website at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Website 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) February 1, 2018. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10115505.

 

 

 

  

About Sandy Spring Bancorp, Inc.

 

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring Bank offers a broad range of commercial banking, retail banking, mortgage and trust services throughout central Maryland, Northern Virginia, and the greater Washington, D.C. market. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. Visit www.sandyspringbank.com for more information.

 

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

Website: www.sandyspringbank.com

 

Media Contact:

Amalia Kastberg

Division Executive, Marketing

Sandy Spring Bank

301-774-8465

akastberg@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 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; the possibility that any of the anticipated benefits of acquisitions will not be realized or will not be realized within the expected time period; 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, 2016, 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       Twelve Months Ended     
   December 31,   %   December 31,   % 
(Dollars in thousands, except per share data)  2017   2016   Change   2017   2016   Change 
Results of Operations:                              
Net interest income  $43,492   $38,967    12%  $168,768   $149,552    13%
Provision for loan losses   527    572    (8)   2,977    5,546    (46)
Non-interest income   12,294    12,344    -    51,243    51,042    - 
Non-interest expenses   35,059    30,544    15    129,099    123,058    5 
Income before income taxes   20,200    20,195    -    87,935    71,990    22 
Net income   8,267    13,316    (38)   53,209    48,250    10 
                               
Pre-tax pre-provision income  $23,647   $20,767    14   $95,164   $77,536    23 
                               
Return on average assets   0.61%   1.09%        1.02%   1.02%     
Return on average common equity   5.82%   9.92%        9.66%   9.15%     
Net interest margin   3.57%   3.52%        3.55%   3.49%     
Efficiency ratio - GAAP basis (1)   62.85%   59.53%        58.68%   61.35%     
Efficiency ratio - Non-GAAP basis (1)   55.69%   57.54%        54.59%   58.66%     
                               
Per share data:                              
Basic net income  $0.34   $0.55    (38)%  $2.20   $2.00    10%
Diluted net income  $0.34   $0.55    (38)  $2.20   $2.00    10 
Average fully diluted shares   24,228,471    24,140,534    -    24,207,728    24,149,121    - 
Dividends declared per share  $0.26   $0.26    -   $1.04   $0.98    6 
Book value per share   23.50    22.32    5    23.50    22.32    5 
Tangible book value per share   20.18    18.98    6    20.18    18.98    6 
Outstanding shares   23,996,293    23,901,084    -    23,996,293    23,901,084    - 
                               
Financial Condition at period-end:                              
Investment securities  $775,025   $779,648    (1)%  $775,025   $779,648    (1)%
Loans   4,314,248    3,927,808    10    4,314,248    3,927,808    10 
Interest-earning assets   5,155,928    4,801,613    7    5,155,928    4,801,613    7 
Assets   5,446,675    5,091,383    7    5,446,675    5,091,383    7 
Interest-bearing liabilities   3,584,462    3,384,524    6    3,584,462    3,384,524    6 
Stockholders' equity   563,816    533,572    6    563,816    533,572    6 
                               
Capital ratios:                              
Tier 1 leverage (4)   9.24%   10.14%        9.24%   10.14%     
Tier 1 capital to risk-weighted assets (4)   10.84%   11.74%        10.84%   11.74%     
Total regulatory capital to risk-weighted assets (4)   11.85%   12.80%        11.85%   12.80%     
Common equity tier 1 capital to risk-weighted assets (4)   10.84%   11.01%        10.84%   11.01%     
Tangible common equity to tangible assets (2)   9.04%   9.07%        9.04%   9.07%     
Average equity to average assets   10.54%   10.95%        10.51%   11.12%     
                               
Credit quality ratios:                              
Allowance for loan losses to loans   1.05%   1.12%        1.05%   1.12%     
Non-performing loans to total loans   0.68%   0.81%        0.68%   0.81%     
Non-performing assets to total assets   0.58%   0.66%        0.58%   0.66%     
Allowance for loan losses to non-performing loans   154.20%   138.00%        154.20%   138.00%     
Annualized net charge-offs to average loans (3)   0.02%   0.05%        0.04%   0.06%     

 

(1)The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization from non-interest expense; securities gains (losses) from non-interest income; OTTI; and the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
(2)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 and other comprehensive gains (losses). See the Reconciliation Table included with these Financial Highlights.
(3)Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.
(4)Estimated ratio at December 31, 2017 based on current authoritative guidance.

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

 

   Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
(Dollars in thousands)  2017   2016   2017   2016 
Pre-tax pre-provision income:                    
Net income  $8,267   $13,316   $53,209   $48,250 
Plus non-GAAP adjustment:                    
Merger expenses   2,920    -    4,252    - 
Income taxes   11,933    6,879    34,726    23,740 
Provision for loan losses   527    572    2,977    5,546 
Pre-tax pre-provision income  $23,647   $20,767   $95,164   $77,536 
                     
Efficiency ratio - GAAP basis:                    
Non-interest expenses  $35,059   $30,544   $129,099   $123,058 
                     
Net interest income plus non-interest income  $55,786   $51,311   $220,011   $200,594 
                     
Efficiency ratio - GAAP basis   62.85%   59.53%   58.68%   61.35%
                     
Efficiency ratio - Non-GAAP basis:                    
Non-interest expenses  $35,059   $30,544   $129,099   $123,058 
Less non-GAAP adjustment:                    
Amortization of intangible assets   25    36    101    130 
Loss on FHLB Redemption   -    -    1,275    3,167 
Merger expenses   2,920    -    4,252    - 
Non-interest expenses - as adjusted  $32,114   $30,508   $123,471   $119,761 
                     
Net interest income plus non-interest income  $55,786   $51,311   $220,011   $200,594 
Plus non-GAAP adjustment:                    
Tax-equivalent income   1,874    1,718    7,459    6,711 
Less non-GAAP adjustments:                    
Securities gains (losses)   (2)   13    1,273    1,932 
Gain on redemption of subordinated debentures   -    -    -    1,200 
Net interest income plus non-interest income - as adjusted  $57,662   $53,016   $226,197   $204,173 
                     
Efficiency ratio - Non-GAAP basis   55.69%   57.54%   54.59%   58.66%
                     
Tangible common equity ratio:                    
Total stockholders' equity  $563,816   $533,572   $563,816   $533,572 
Accumulated other comprehensive income   6,857    6,614    6,857    6,614 
Goodwill   (85,768)   (85,768)   (85,768)   (85,768)
Other intangible assets, net   (580)   (680)   (580)   (680)
Tangible common equity  $484,325   $453,738   $484,325   $453,738 
                     
Total assets  $5,446,675   $5,091,383   $5,446,675   $5,091,383 
Goodwill   (85,768)   (85,768)   (85,768)   (85,768)
Other intangible assets, net   (580)   (680)   (580)   (680)
Tangible assets  $5,360,327   $5,004,935   $5,360,327   $5,004,935 
                     
Tangible common equity ratio   9.04%   9.07%   9.04%   9.07%
                     
Outstanding common shares   23,996,293    23,901,084    23,996,293    23,901,084 
Tangible book value per common share  $20.18   $18.98   $20.18   $18.98 

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED

 

   December 31,   December 31, 
(Dollars in thousands)  2017   2016 
Assets          
Cash and due from banks  $55,693   $53,190 
Federal funds sold   2,845    1,953 
Interest-bearing deposits with banks   53,962    78,982 
Cash and cash equivalents   112,500    134,125 
Residential mortgage loans held for sale (at fair value)   9,848    13,222 
Investments available-for-sale (at fair value)   729,507    733,554 
Other equity securities   45,518    46,094 
Total loans   4,314,248    3,927,808 
Less: allowance for loan losses   (45,257)   (44,067)
Net loans   4,268,991    3,883,741 
Premises and equipment, net   54,761    53,562 
Other real estate owned   2,253    1,911 
Accrued interest receivable   15,480    14,589 
Goodwill   85,768    85,768 
Other intangible assets, net   580    680 
Other assets   121,469    124,137 
Total assets  $5,446,675   $5,091,383 
           
Liabilities          
Noninterest-bearing deposits  $1,264,392   $1,138,139 
Interest-bearing deposits   2,699,270    2,439,405 
Total deposits   3,963,662    3,577,544 
Securities sold under retail repurchase agreements and federal funds purchased   119,359    125,119 
Advances from FHLB   765,833    790,000 
Subordinated debentures   -    30,000 
Accrued interest payable and other liabilities   34,005    35,148 
Total liabilities   4,882,859    4,557,811 
           
Stockholders' Equity          
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 23,996,293 and 23,901,084 at December 31, 2017 and December 31, 2016, respectively   23,996    23,901 
Additional paid in capital   168,188    165,871 
Retained earnings   378,489    350,414 
Accumulated other comprehensive loss   (6,857)   (6,614)
Total stockholders' equity   563,816    533,572 
Total liabilities and stockholders' equity  $5,446,675   $5,091,383 

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 

   Three Months Ended   Twelve Months Ended 
   December 31,   December 31, 
(Dollars in thousands, except per share data)  2017   2016   2017   2016 
Interest Income:                    
Interest and fees on loans  $45,230   $39,510   $172,091   $150,868 
Interest on loans held for sale   6    93    279    387 
Interest on deposits with banks   121    57    410    213 
Interest and dividends on investment securities:                    
Taxable   3,309    2,751    13,881    11,500 
Exempt from federal income taxes   2,001    1,830    8,111    7,583 
Interest on federal funds sold   9    2    27    5 
Total interest income   50,676    44,243    194,799    170,556 
Interest Expense:                    
Interest on deposits   4,044    2,155    13,256    8,161 
Interest on retail repurchase agreements and federal funds purchased   99    78    337    290 
Interest on advances from FHLB   3,041    2,798    12,426    11,610 
Interest on subordinated debt   -    245    12    943 
Total interest expense   7,184    5,276    26,031    21,004 
Net interest income   43,492    38,967    168,768    149,552 
Provision for loan losses   527    572    2,977    5,546 
Net interest income after provision for loan losses   42,965    38,395    165,791    144,006 
Non-interest Income:                    
Investment securities gains (losses)   (2)   13    1,273    1,932 
Service charges on deposit accounts   2,177    2,059    8,298    7,953 
Mortgage banking activities   654    1,279    2,734    4,049 
Wealth management income   5,054    4,605    19,146    17,805 
Insurance agency commissions   1,307    1,228    6,231    5,408 
Income from bank owned life insurance   595    616    2,403    2,462 
Bank card fees   1,218    1,176    4,827    4,674 
Other income   1,291    1,368    6,331    6,759 
Total non-interest income   12,294    12,344    51,243    51,042 
Non-interest Expenses:                    
Salaries and employee benefits   18,607    18,055    73,132    71,354 
Occupancy expense of premises   3,146    3,195    13,053    12,960 
Equipment expenses   1,802    1,781    7,015    6,883 
Marketing   896    880    3,119    2,851 
Outside data services   1,441    1,310    5,486    5,377 
FDIC insurance   827    729    3,305    2,741 
Amortization of intangible assets   25    36    101    130 
Merger expenses   2,920    -    4,252    - 
Other expenses   5,395    4,558    19,636    20,762 
Total non-interest expenses   35,059    30,544    129,099    123,058 
Income before income taxes   20,200    20,195    87,935    71,990 
Income tax expense   11,933    6,879    34,726    23,740 
Net income  $8,267   $13,316   $53,209   $48,250 
                     
Net Income Per Share Amounts:                    
Basic net income per share  $0.34   $0.55   $2.20   $2.00 
Diluted net income per share  $0.34   $0.55   $2.20   $2.00 
Dividends declared per share  $0.26   $0.26   $1.04   $0.98 

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

 

   2017   2016 
(Dollars in thousands, except per share data)  Q4   Q3   Q2   Q1   Q4   Q3   Q2   Q1 
Profitability for the Quarter:                                        
Tax-equivalent interest income  $52,550   $51,477   $50,477   $47,754   $45,961   $44,545   $43,443   $43,317 
Interest expense   7,184    6,892    6,250    5,705    5,276    5,126    5,071    5,531 
Tax-equivalent net interest income   45,366    44,585    44,227    42,049    40,685    39,419    38,372    37,786 
Tax-equivalent adjustment   1,874    1,888    1,901    1,796    1,718    1,688    1,640    1,664 
Provision for loan losses   527    934    1,322    194    572    781    2,957    1,236 
Non-interest income   12,294    12,746    13,571    12,632    12,344    12,584    12,751    13,363 
Non-interest expenses   35,059    31,191    32,868    29,981    30,544    29,326    30,871    32,317 
Income before income taxes   20,200    23,318    21,707    22,710    20,195    20,208    15,655    15,932 
Income tax expense   11,933    8,229    6,966    7,598    6,879    6,734    5,008    5,119 
Net income  $8,267   $15,089   $14,741   $15,112   $13,316   $13,474   $10,647   $10,813 
Financial Performance:                                        
Pre-tax pre-provision income  $23,647   $24,597   $24,016   $22,904   $20,767   $20,989   $18,612   $17,168 
Return on average assets   0.61%   1.13%   1.14%   1.20%   1.09%   1.13%   0.92%   0.93%
Return on average common equity   5.82%   10.74%   10.80%   11.45%   9.92%   10.11%   8.21%   8.29%
Net interest margin   3.57%   3.54%   3.60%   3.51%   3.52%   3.50%   3.51%   3.44%
Efficiency ratio - GAAP basis (1)   62.85%   56.26%   58.80%   56.69%   59.53%   58.28%   62.39%   65.31%
Efficiency ratio - Non-GAAP basis (1)   55.69%   53.76%   54.10%   54.78%   57.54%   56.33%   59.12%   61.84%
Per Share Data:                                        
Basic net income per share  $0.34   $0.62   $0.61   $0.63   $0.55   $0.56   $0.45   $0.45 
Diluted net income per share  $0.34   $0.62   $0.61   $0.63   $0.55   $0.56   $0.44   $0.45 
Average fully diluted shares   24,228,471    24,223,004    24,262,745    24,158,566    24,140,534    24,122,923    24,108,668    24,222,940 
Dividends declared per common share  $0.26   $0.26   $0.26   $0.26   $0.26   $0.24   $0.24   $0.24 
Non-interest Income:                                        
Securities gains (losses)  $(2)  $-   $1,273   $2   $13   $-   $150   $1,769 
Service charges on deposit accounts   2,177    2,140    2,017    1,964    2,059    2,035    1,956    1,903 
Mortgage banking activities   654    632    840    608    1,279    1,129    1,106    535 
Wealth management income   5,054    4,864    4,744    4,484    4,605    4,347    4,448    4,405 
Insurance agency commissions   1,307    1,950    1,222    1,752    1,228    1,786    949    1,445 
Income from bank owned life insurance   595    609    605    594    616    616    615    615 
Bank card fees   1,218    1,211    1,253    1,145    1,176    1,189    1,220    1,089 
Other income   1,291    1,340    1,617    2,083    1,368    1,482    2,307    1,602 
Total Non-interest Income  $12,294   $12,746   $13,571   $12,632   $12,344   $12,584   $12,751   $13,363 
Non-interest Expense:                                        
Salaries and employee benefits  $18,607   $18,442   $18,282   $17,801   $18,055   $17,848   $17,221   $18,230 
Occupancy expense of premises   3,146    3,294    3,211    3,402    3,195    3,130    3,162    3,473 
Equipment expenses   1,802    1,722    1,767    1,724    1,781    1,745    1,693    1,664 
Marketing   896    784    776    663    880    628    662    681 
Outside data services   1,441    1,286    1,367    1,392    1,310    1,349    1,355    1,363 
FDIC insurance   827    850    823    805    729    726    649    637 
Amortization of intangible assets   25    25    25    26    36    34    28    32 
Merger expenses   2,920    345    987    -    -    -    -    - 
Professional fees   1,439    1,053    1,045    955    1,268    987    1,447    1,138 
Other real estate owned expenses   14    4    (6)   5    2    5    (5)   17 
Other expenses   3,942    3,386    4,591    3,208    3,288    2,874    4,659    5,082 
Total Non-interest Expense  $35,059   $31,191   $32,868   $29,981   $30,544   $29,326   $30,871   $32,317 

 

(1)The efficiency ratio - GAAP basis is non-interest expenses divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional, efficiency ratio - non-GAAP basis 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

 

   2017   2016 
(Dollars in thousands)  Q4   Q3   Q2   Q1   Q4   Q3   Q2   Q1 
Balance Sheets at Quarter End:                                        
Residential mortgage loans  $921,435   $882,890   $871,766   $848,814   $841,692   $854,055   $820,618   $804,105 
Residential construction loans   176,687    171,814    169,901    170,285    150,229    144,998    142,710    138,221 
Commercial AD&C loans   292,443    295,222    314,259    309,350    308,279    302,522    285,585    261,204 
Commercial investor real estate loans   1,112,710    1,104,669    1,069,988    979,410    928,113    847,946    824,252    783,161 
Commercial owner occupied real estate loans   857,196    831,461    797,629    772,443    775,552    736,744    700,599    675,560 
Commercial business loans   497,948    451,667    451,570    457,216    467,286    444,129    451,711    451,239 
Consumer loans   455,829    456,395    458,058    455,478    456,657    450,113    447,149    447,198 
Total loans   4,314,248    4,194,118    4,133,171    3,992,996    3,927,808    3,780,507    3,672,624    3,560,688 
Allowance for loan losses   (45,257)   (44,924)   (45,079)   (43,861)   (44,067)   (43,942)   (43,384)   (41,766)
Loans held for sale   9,848    7,084    5,743    17,717    13,222    15,822    13,490    27,806 
Investment securities   775,025    795,922    821,491    855,707    779,648    691,471    734,828    742,401 
Interest-earning assets   5,155,928    5,049,229    4,988,704    4,919,927    4,801,613    4,537,331    4,461,180    4,447,063 
Total assets   5,446,675    5,334,788    5,270,521    5,201,164    5,091,383    4,810,611    4,739,449    4,716,608 
Noninterest-bearing demand deposits   1,264,392    1,312,710    1,302,536    1,234,505    1,138,139    1,154,227    1,176,135    1,084,746 
Total deposits   3,963,662    3,955,792    3,885,445    3,799,198    3,577,544    3,537,157    3,510,141    3,412,308 
Customer repurchase agreements   119,359    146,569    127,312    141,244    125,119    124,205    117,887    121,043 
Total interest-bearing liabilities   3,584,462    3,422,568    3,380,221    3,380,937    3,384,524    3,087,135    2,996,893    3,073,605 
Total stockholders' equity   563,816    564,480    554,683    544,261    533,572    536,655    529,479    522,392 
Quarterly Average Balance Sheets:                                        
Residential mortgage loans  $903,660   $880,782   $860,081   $847,896   $848,399   $836,452   $811,705   $807,443 
Residential construction loans   171,239    172,921    169,130    157,152    148,248    147,602    142,854    134,708 
Commercial AD&C loans   289,737    291,569    302,924    310,325    310,110    287,836    272,090    261,687 
Commercial investor real estate loans   1,114,960    1,090,641    1,010,389    945,080    878,511    832,529    788,785    750,821 
Commercial owner occupied real estate loans   842,642    808,802    776,279    774,964    750,679    717,371    684,907    677,786 
Commercial business loans   454,330    459,779    454,724    462,444    452,195    446,123    453,459    460,903 
Consumer loans   458,378    457,526    461,672    458,162    454,349    450,171    449,594    451,075 
Total loans   4,234,946    4,162,020    4,035,199    3,956,023    3,842,491    3,718,084    3,603,394    3,544,423 
Loans held for sale   5,862    7,093    7,077    7,402    12,454    10,207    8,326    14,036 
Investment securities   780,522    813,179    842,837    818,287    703,574    709,527    739,132    810,593 
Interest-earning assets   5,061,075    5,019,133    4,922,389    4,829,208    4,599,426    4,477,438    4,394,879    4,411,796 
Total assets   5,346,625    5,297,368    5,202,398    5,111,698    4,878,660    4,747,020    4,664,343    4,685,747 
Noninterest-bearing demand deposits   1,322,157    1,293,470    1,251,396    1,159,715    1,167,379    1,131,739    1,082,762    1,021,471 
Total deposits   3,991,936    3,916,657    3,810,180    3,673,731    3,582,437    3,528,665    3,429,897    3,300,131 
Customer repurchase agreements   139,125    133,145    132,552    128,485    128,471    120,702    122,597    110,862 
Total interest-bearing liabilities   3,419,669    3,407,279    3,360,128    3,375,002    3,138,420    3,045,998    3,020,505    3,103,710 
Total stockholders' equity   563,506    557,282    547,229    535,308    534,057    530,241    521,387    524,309 
Financial Measures:                                        
Average equity to average assets   10.54%   10.52%   10.52%   10.47%   10.95%   11.17%   11.18%   11.19%
Investment securities to earning assets   15.03%   15.76%   16.47%   17.39%   16.24%   15.24%   16.47%   16.69%
Loans to earning assets   83.68%   83.06%   82.85%   81.16%   81.80%   83.32%   82.32%   80.07%
Loans to assets   79.21%   78.62%   78.42%   76.77%   77.15%   78.59%   77.49%   75.49%
Loans to deposits   108.85%   106.02%   106.38%   105.10%   109.79%   106.88%   104.63%   104.35%
Capital Measures:                                        
Tier 1 leverage (1)   9.24%   9.28%   9.26%   9.26%   10.14%   10.25%   10.29%   10.23%
Tier 1 capital to risk-weighted assets (1)   10.84%   10.99%   10.96%   11.02%   11.74%   12.17%   12.42%   12.74%
Total regulatory capital to risk-weighted assets (1)   11.85%   12.01%   12.00%   12.06%   12.80%   13.29%   13.57%   13.86%
Common equity tier 1 capital to risk-weighted assets (1)   10.84%   10.99%   10.96%   11.02%   11.01%   11.41%   11.63%   11.79%
Book value per share  $23.50   $23.53   $23.13   $22.74   $22.32   $22.47   $22.18   $21.92 
Outstanding shares   23,996,293    23,990,370    23,983,997    23,930,165    23,901,084    23,886,651    23,874,650    23,827,305 

 

(1)Estimated ratio at December 31, 2017 based on current authoritative guidance.

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

 

   2017   2016 
(Dollars in thousands)  December 31,   September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31, 
Non-Performing Assets:                                        
Loans 90 days past due:                                        
Commercial business  $-   $-   $-   $-   $-   $163   $-   $- 
Commercial real estate:                                        
Commercial AD&C   -    -    -    -    -    -    -    - 
Commercial investor real estate   -    -    -    -    -    -    -    - 
Commercial owner occupied real estate   -    -    424    -    -    -    -    - 
Consumer   -    1    4    -    -    -    2    1 
Residential real estate:                                        
Residential mortgage   225    225    -    232    232    -    -    - 
Residential construction   -    -    -    -    -    -    -    - 
Total loans 90 days past due   225    226    428    232    232    163    2    1 
Non-accrual loans:                                        
Commercial business   6,703    6,091    6,807    4,849    5,833    4,140    4,263    3,741 
Commercial real estate:                                        
Commercial AD&C   136    137    137    137    137    137    137    147 
Commercial investor real estate   5,575    5,589    6,934    7,970    8,107    9,189    8,868    7,885 
Commercial owner occupied real estate   3,582    5,012    4,926    5,106    4,823    5,591    5,678    7,149 
Consumer   2,967    3,152    3,111    3,058    2,859    2,726    2,600    2,715 
Residential real estate:                                        
Residential mortgage   7,196    7,345    7,101    6,908    7,257    7,321    6,186    9,329 
Residential construction   177    182    187    189    195    199    202    412 
Total non-accrual loans   26,336    27,508    29,203    28,217    29,211    29,303    27,934    31,378 
Total restructured loans - accruing   2,788    2,471    2,569    2,409    2,489    2,512    3,420    4,716 
Total non-performing loans   29,349    30,205    32,200    30,858    31,932    31,978    31,356    36,095 
Other assets and real estate owned (OREO)   2,253    1,448    1,460    1,294    1,911    1,274    1,311    2,414 
Total non-performing assets  $31,602   $31,653   $33,660   $32,152   $33,843   $33,252   $32,667   $38,509 
                                         
   For the Quarter Ended, 
   December 31,   September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31, 
(Dollars in thousands)  2017   2017   2017   2017   2016   2016   2016   2016 
Analysis of Non-accrual Loan Activity:                                        
Balance at beginning of period  $27,508   $29,203   $28,217   $29,211   $29,303   $27,934   $31,378   $30,031 
Non-accrual balances transferred to OREO   (888)   (411)   (175)   (113)   (637)   (38)   -    - 
Non-accrual balances charged-off   (446)   (1,127)   (179)   (391)   (390)   (245)   (1,305)   (274)
Net payments or draws   (1,707)   (1,869)   (1,804)   (1,382)   (1,547)   (525)   (4,810)   (914)
Loans placed on non-accrual   2,504    1,712    3,144    1,461    2,482    2,486    2,671    2,535 
Non-accrual loans brought current   (635)   -    -    (569)   -    (309)   -    - 
Balance at end of period  $26,336   $27,508   $29,203   $28,217   $29,211   $29,303   $27,934   $31,378 
                                         
Analysis of Allowance for Loan Losses:                                        
Balance at beginning of period  $44,924   $45,079   $43,861   $44,067   $43,942   $43,384   $41,766   $40,895 
Provision for loan losses   527    934    1,322    194    572    781    2,957    1,236 
Less loans charged-off, net of recoveries:                                        
Commercial business   48    1,029    107    260    285    95    106    67 
Commercial real estate:                                        
Commercial AD&C   -    -    (103)   -    (18)   (22)   -    48 
Commercial investor real estate   (8)   (10)   (78)   (5)   (9)   (12)   (107)   192 
Commercial owner occupied real estate   243    5    -    -    -    (1)   (1)   (3)
Consumer   (71)   103    189    167    177    145    364    54 
Residential real estate:                                        
Residential mortgage   (12)   (32)   (3)   (16)   18    24    989    15 
Residential construction   (6)   (6)   (8)   (6)   (6)   (6)   (12)   (8)
Net charge-offs   194    1,089    104    400    447    223    1,339    365 
Balance at end of period  $45,257   $44,924   $45,079   $43,861   $44,067   $43,942   $43,384   $41,766 
                                         
Asset Quality Ratios:                                        
Non-performing loans to total loans   0.68%   0.72%   0.78%   0.77%   0.81%   0.85%   0.85%   1.01%
Non-performing assets to total assets   0.58%   0.59%   0.64%   0.62%   0.66%   0.69%   0.69%   0.82%
Allowance for loan losses to loans   1.05%   1.07%   1.09%   1.10%   1.12%   1.16%   1.18%   1.17%
Allowance for loan losses to non-performing loans   154.20%   148.73%   140.00%   142.14%   138.00%   137.41%   138.36%   115.72%
Annualized net charge-offs to average loans   0.02%   0.10%   0.01%   0.04%   0.05%   0.02%   0.15%   0.04%

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

   Three Months Ended December 31, 
       2017           2016     
           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  $903,660   $7,997    3.54%  $848,399   $7,321    3.45%
Residential construction loans   171,239    1,636    3.79    148,248    1,365    3.66 
Total mortgage loans   1,074,899    9,633    3.58    996,647    8,686    3.48 
Commercial AD&C loans   289,737    3,718    5.09    310,110    3,688    4.73 
Commercial investor real estate loans   1,114,960    12,580    4.48    878,511    10,023    4.54 
Commercial owner occupied real estate loans   842,642    10,258    4.83    750,679    8,891    4.71 
Commercial business loans   454,330    5,264    4.60    452,195    4,931    4.34 
Total commercial loans   2,701,669    31,820    4.67    2,391,495    27,533    4.58 
Consumer loans   458,378    4,438    3.88    454,349    3,905    3.45 
Total loans (2)   4,234,946    45,891    4.31    3,842,491    40,124    4.16 
Loans held for sale   5,862    6    0.38    12,454    93    2.98 
Taxable securities   489,020    3,428    2.80    435,129    2,850    2.62 
Tax-exempt securities (3)   291,502    3,095    4.25    268,445    2,835    4.22 
Total investment securities   780,522    6,523    3.34    703,574    5,685    3.23 
Interest-bearing deposits with banks   36,904    121    1.30    39,471    57    0.57 
Federal funds sold   2,841    9    1.21    1,436    2    0.53 
Total interest-earning assets   5,061,075    52,550    4.13    4,599,426    45,961    3.98 
                               
Less: allowance for loan losses   (45,247)             (43,298)          
Cash and due from banks   50,489              50,090           
Premises and equipment, net   54,741              53,588           
Other assets   225,567              218,854           
Total assets  $5,346,625             $4,878,660           
                               
Liabilities and Stockholders' Equity                              
Interest-bearing demand deposits  $625,502    135    0.09%  $589,259    111    0.08%
Regular savings deposits   323,367    53    0.07    306,261    45    0.06 
Money market savings deposits   1,027,365    1,698    0.66    936,880    505    0.21 
Time deposits   693,545    2,158    1.23    582,658    1,494    1.02 
Total interest-bearing deposits   2,669,779    4,044    0.60    2,415,058    2,155    0.36 
Other borrowings   139,125    99    0.28    128,471    78    0.24 
Advances from FHLB   610,765    3,041    1.98    564,891    2,798    1.97 
Subordinated debentures   -    -    -    30,000    245    3.27 
Total interest-bearing liabilities   3,419,669    7,184    0.83    3,138,420    5,276    0.67 
                               
Noninterest-bearing demand deposits   1,322,157              1,167,379           
Other liabilities   41,293              38,804           
Stockholders' equity   563,506              534,057           
Total liabilities and stockholders' equity  $5,346,625             $4,878,660           
                               
Net interest income and spread       $45,366    3.30%       $40,685    3.31%
Less: tax-equivalent adjustment        1,874              1,718      
Net interest income       $43,492             $38,967      
                               
Interest income/earning assets             4.13%             3.98%
Interest expense/earning assets             0.56              0.46 
Net interest margin             3.57%             3.52%

  

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2017 and 2016. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.9 million and $1.7 million in 2017 and 2016, respectively.

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

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

  

 

 

  

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

   Twelve Months Ended December 31, 
       2017           2016     
           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  $873,278   $30,648    3.51%  $826,089   $28,331    3.43%
Residential construction loans   167,664    6,292    3.75    143,378    5,169    3.61 
Total mortgage loans   1,040,942    36,940    3.55    969,467    33,500    3.46 
Commercial AD&C loans   298,563    14,844    4.97    283,018    13,199    4.66 
Commercial investor real estate loans   1,040,871    46,558    4.47    812,896    37,110    4.57 
Commercial owner occupied real estate loans   800,879    38,759    4.84    707,830    33,837    4.78 
Commercial business loans   457,802    20,585    4.50    453,148    19,750    4.36 
Total commercial loans   2,598,115    120,746    4.65    2,256,892    103,896    4.60 
Consumer loans   458,931    16,934    3.72    451,303    15,596    3.48 
Total loans (2)   4,097,988    174,620    4.26    3,677,662    152,992    4.16 
Loans held for sale   6,855    279    4.06    11,256    387    3.44 
Taxable securities   517,375    14,372    2.78    461,973    11,923    2.58 
Tax-exempt securities (3)   296,226    12,550    4.24    278,546    11,747    4.22 
Total investment securities   813,601    26,922    3.31    740,519    23,670    3.20 
Interest-bearing deposits with banks   37,728    410    1.09    40,940    213    0.52 
Federal funds sold   2,581    27    1.03    876    5    0.50 
Total interest-earning assets   4,958,753    202,258    4.08    4,471,253    177,267    3.96 
                               
Less: allowance for loan losses   (44,557)             (42,487)          
Cash and due from banks   48,765              47,219           
Premises and equipment, net   53,947              53,386           
Other assets   223,012              214,004           
Total assets  $5,239,920             $4,743,375           
                               
Liabilities and Stockholders' Equity                              
Interest-bearing demand deposits  $616,524    507    0.08%  $581,185    446    0.08%
Regular savings deposits   322,856    216    0.07    300,035    182    0.06 
Money market savings deposits   1,000,965    5,031    0.50    920,125    1,951    0.21 
Time deposits   651,610    7,502    1.15    558,355    5,582    1.00 
Total interest-bearing deposits   2,591,955    13,256    0.51    2,359,700    8,161    0.35 
Other borrowings   133,356    337    0.25    120,711    290    0.24 
Advances from FHLB   664,966    12,426    1.87    565,342    11,610    2.05 
Subordinated debentures   411    12    2.94    31,489    943    3.00 
Total interest-bearing liabilities   3,390,688    26,031    0.77    3,077,242    21,004    0.68 
                               
Noninterest-bearing demand deposits   1,257,231              1,101,104           
Other liabilities   41,075              37,505           
Stockholders' equity   550,926              527,524           
Total liabilities and stockholders' equity  $5,239,920             $4,743,375           
                               
Net interest income and spread       $176,227    3.31%       $156,263    3.28%
Less: tax-equivalent adjustment        7,459              6,711      
Net interest income       $168,768             $149,552      
                               
Interest income/earning assets             4.08%             3.96%
Interest expense/earning assets             0.53              0.47 
Net interest margin             3.55%             3.49%

 

(1)Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 39.88% for 2017 and 2016. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $7.5 million and $6.7 million in 2017 and 2016, respectively.
(2)Non-accrual loans are included in the average balances.
(3)Includes only investments that are exempt from federal taxes.

 

 

 

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