Sandy Spring Bancorp Reports Record Net Income of $15.1 Million for the First Quarter

OLNEY, Md., April 20, 2017 (GLOBE NEWSWIRE) — Sandy Spring Bancorp, Inc., (Nasdaq:SASR) the parent company of Sandy Spring Bank, today reported net income for the first quarter of 2017 of $15.1 million ($0.63 per diluted share) compared to net income of $10.8 million ($0.45 per diluted share) for the first quarter of 2016 and net income of $13.3 million ($0.55 per diluted share) for the fourth quarter of 2016.

“Higher net interest income driven primarily by strong loan growth over the preceding year was the main driver of our record first quarter earnings.  Continued strong credit quality, the execution of efficient funding strategies and disciplined expense control were also contributing factors to our performance for the quarter,” said Daniel J. Schrider, President and Chief Executive Officer.  

First Quarter Highlights: 

  • Total loans increased 12% compared to the first quarter of 2016 and 2% compared to the fourth quarter of 2016. These increases were driven primarily by year-over-year growth of 16% in the commercial loan portfolio.
     
  • Total deposits grew 11% from the prior year period and 6% from the prior quarter.
     
  • The net interest margin was 3.51% for the first quarter of 2017, compared to 3.44% for the first quarter of 2016 and 3.52% for the fourth quarter of 2016.
     
  • Return on average equity increased 38% to 11.45% as compared to 8.29% from the prior year.
     
  • The Non-GAAP efficiency ratio was 54.78% for the current quarter as compared to 61.84% for the first quarter of 2016 and 57.54% for the fourth quarter of 2016.
     
  • Pre-tax, pre-provision income increased 33% compared with the first quarter of 2016.

Review of Balance Sheet and Credit Quality

Total assets grew 10% to $5.2 billion at March 31, 2017 compared to $4.7 billion at March 31, 2016.  This growth was driven by the increase in the loan portfolio as total loans ended the period at $4.0 billion. 

At March 31, 2017, combined noninterest-bearing and interest-bearing checking account balances, an important performance driver of multiple-product banking relationships with clients, increased 12% compared to balances at March 31, 2016. Total deposits and certain other short-term borrowings that comprise the funding sources derived from clients, increased 12% compared to March 31, 2016.

Tangible common equity totaled $463 million at March 31, 2017 compared to $434 million at March 31, 2016. The ratio of tangible common equity to tangible assets decreased to 9.06% at March 31, 2017 from 9.37% at March 31, 2016 due to the impact of the growth in assets over the preceding 12 months. Dividends per common share were $0.26 per share for the first quarter compared to $0.24 per share for the first quarter of 2016, an 8% increase. 

At March 31, 2017, the Company had a total risk-based capital ratio of 12.06%, a common equity tier 1 risk-based capital ratio of 11.02%, a tier 1 risk-based capital ratio of 11.02% and a tier 1 leverage ratio of 9.26%. On January 6, 2017 the Company repurchased all of its remaining $30 million in subordinated debentures at par value. This strategy was executed to improve the Company’s future net interest margin.

Non-performing loans totaled $30.9 million at March 31, 2017 compared to $36.1 million at March 31, 2016 and $31.9 million at December 31, 2016. The level of non-performing loans to total loans decreased to 0.77% at March 31, 2017 compared to 1.01% at March 31, 2016 as a result of the growth in the loan portfolio and a concurrent decrease in the level of non-performing loans.

Loan charge-offs, net of recoveries, totaled $0.4 million for the first quarter of 2017 compared to $0.4 million for the first quarter of 2016. The allowance for loan losses represented 1.10% of outstanding loans and 142% of non-performing loans at March 31, 2017 compared to 1.17% of outstanding loans and 116% of non-performing loans at March 31, 2016. The decline in the allowance to outstanding loans ratio is a reflection of improved overall credit quality during the past year that offset the impact of the growth in the loan portfolio during the same period.  Non-performing loans includes accruing loans 90 days or more past due and restructured loans.

Income Statement Review

Net interest income for the first quarter of 2017 increased 11% compared to the first quarter of 2016. The net interest margin improved to 3.51% for the first quarter of 2017 compared to 3.44% for the first quarter of 2016.  This improvement reflects the impact of loan growth over the preceding year combined with the cumulative benefits associated with the execution of funding strategies and the shift from lower yielding investments to the higher yielding loan portfolio during the past 12 months.  

The provision for loan losses was $0.2 million for the first quarter of 2017 compared to $1.2 million for the first quarter of 2016 and $0.6 million for the fourth quarter of 2016. The decrease in the current quarter’s charge versus the prior year’s quarter reflects improved loan portfolio credit quality, which partially offset the effects of loan growth on the provision over the past year.

Non-interest income decreased to $12.6 million for the first quarter of 2017 compared to $13.4 million for the first quarter of 2016.  The first quarter of 2016 included gains of $1.8 million on sales of investment securities. Excluding these securities gains, non-interest income increased 9% compared to the prior year quarter due to increases in insurance agency commissions and other non-interest income.

Non-interest expenses decreased 7% to $30.0 million for the first quarter of 2017 compared to $32.3 million in the first quarter of 2016. The first quarter of 2016 included $1.8 million in prepayment penalties on the early payoff of high-rate FHLB advances. Excluding this transaction, non-interest expenses decreased 2% compared to the first quarter of 2016 due to lower employee benefit costs.  The non-GAAP efficiency ratio was 54.78% for the first quarter of 2017 compared to 61.84% for the first quarter of 2016 primarily a result of the growth in net interest income coupled with the effects of expense control. 

Conference Call

The Company’s management will host a conference call to discuss its first quarter results today at 2:00 P.M. (ET).  A live Web cast of the conference call is available through the Investor Relations’ section of the Sandy Spring Web site at www.sandyspringbank.com.  Participants may call 1-866-235-9910. A password is not necessary.  Visitors to the Web site 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) May 4, 2017.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10103502.

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. With $5.2 billion in assets, the bank operates 44 community offices and six financial centers across the region. Visit www.sandyspringbank.com for more information.

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; 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      
    March 31,   %  
(Dollars in thousands, except per share data)     2017     2016   Change  
Results of Operations:              
Net interest income   $   40,253   $ 36,122   11   %
Provision for loan losses       194     1,236   (84 )  
Non-interest income       12,632     13,363   (5 )  
Non-interest expenses       29,981     32,317   (7 )  
Income before income taxes       22,710     15,932   43    
Net income       15,112     10,813   40    
               
Pre-tax pre-provision income   $   22,904   $ 17,168   33    
               
Return on average assets       1.20 %   0.93 %    
Return on average common equity       11.45 %   8.29 %    
Net interest margin       3.51 %   3.44 %    
Efficiency ratio – GAAP basis  (1)       56.69 %   65.31 %    
Efficiency ratio – Non-GAAP basis  (1)       54.78 %   61.84 %    
               
Per share data:              
Basic net income   $   0.63   $ 0.45   40   %
Diluted net income   $   0.63   $ 0.45   40    
Average fully diluted shares      24,158,566     24,222,940      
Dividends declared per share   $   0.26   $ 0.24   8    
Book value per share       22.74     21.92   4    
Tangible book value per share       19.36     18.21   6    
Outstanding shares      23,930,165     23,827,305      
               
Financial Condition at period-end:              
Investment securities   $   855,707   $ 742,401   15   %
Loans       3,992,996     3,560,688   12    
Interest-earning assets       4,919,927     4,447,063   11    
Assets       5,201,164     4,716,608   10    
Deposits       3,799,198     3,412,308   11    
Interest-bearing liabilities       3,380,937     3,073,605   10    
Stockholders’ equity       544,261     522,392   4    
               
Capital ratios:              
Tier 1 leverage  (4)       9.26 %   10.23 %    
Tier 1 capital to risk-weighted assets  (4)       11.02 %   12.74 %    
Total regulatory capital to risk-weighted assets  (4)       12.06 %   13.86 %    
Common equity tier 1 capital to risk-weighted assets  (4)       11.02 %   11.79 %    
Tangible common equity to tangible assets  (2)       9.06 %   9.37 %    
Average equity to average assets       10.47 %   11.19 %    
               
Credit quality ratios:              
Allowance for loan losses to loans       1.10 %   1.17 %    
Non-performing loans to total loans       0.77 %   1.01 %    
Non-performing assets to total assets       0.62 %   0.82 %    
Allowance for loan losses to non-performing loans       142.14 %   115.72 %    
Annualized net charge-offs to average loans  (3)       0.04 %   0.04 %    
               
(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 March 31, 2017  
               

Sandy Spring Bancorp, Inc. and Subsidiaries        
RECONCILIATION TABLE – UNAUDITED        
         
    Three Months Ended
    March 31,
(Dollars in thousands)     2017       2016  
Pre-tax pre-provision income:        
Net income   $   15,112     $ 10,813  
Plus non-GAAP adjustment:        
Income taxes       7,598       5,119  
Provision for loan losses       194       1,236  
Pre-tax pre-provision income   $   22,904     $ 17,168  
         
Efficiency ratio – GAAP basis:        
Non-interest expenses   $   29,981     $ 32,317  
         
Net interest income plus non-interest income   $   52,885     $ 49,485  
         
Efficiency ratio – GAAP basis     56.69%       65.31%  
         
         
Efficiency ratio – Non-GAAP basis:        
Non-interest expenses   $   29,981     $ 32,317  
Less non-GAAP adjustment:        
Amortization of intangible assets       26       32  
Loss on FHLB redemption       –       1,751  
Non-interest expenses –  as adjusted   $   29,955     $ 30,534  
         
Net interest income plus non-interest income   $   52,885     $ 49,485  
Plus non-GAAP adjustment:        
Tax-equivalent income       1,796       1,664  
Less non-GAAP adjustments:        
Securities gains       2       1,769  
Net interest income plus non-interest income – as adjusted   $   54,679     $ 49,380  
         
Efficiency ratio – Non-GAAP basis     54.78%       61.84%  
         
Tangible common equity ratio:        
Total stockholders’ equity   $   544,261     $ 522,392  
Accumulated other comprehensive income (loss)       5,534       (4,233 )
Goodwill       (85,768 )     (84,171 )
Other intangible assets, net       (654 )     (105 )
Tangible common equity   $   463,373     $ 433,883  
         
Total assets   $   5,201,164     $ 4,716,608  
Goodwill       (85,768 )     (84,171 )
Other intangible assets, net       (654 )     (105 )
Tangible assets   $   5,114,742     $ 4,632,332  
         
Tangible common equity ratio     9.06%       9.37%  
         
Outstanding common shares       23,930,165       23,827,305  
Tangible book value per common share   $   19.36     $ 18.21  
         

Sandy Spring Bancorp, Inc. and Subsidiaries            
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  – UNAUDITED            
             
    March 31,   December 31,   March 31,
(Dollars in thousands)     2017       2016       2016  
Assets            
Cash and due from banks   $   48,362     $ 53,190     $ 43,228  
Federal funds sold       2,336       1,953       559  
Interest-bearing deposits with banks       51,171       78,982       115,609  
Cash and cash equivalents       101,869       134,125       159,396  
Residential mortgage loans held for sale (at fair value)       17,717       13,222       27,806  
Investments available-for-sale (at fair value)       814,096       733,554       704,872  
Other equity securities       41,611       46,094       37,529  
Total loans       3,992,996       3,927,808       3,560,688  
Less: allowance for loan losses       (43,861 )     (44,067 )     (41,766 )
Net loans       3,949,135       3,883,741       3,518,922  
Premises and equipment, net       53,346       53,562       53,307  
Other real estate owned       1,294       1,911       2,414  
Accrued interest receivable       14,532       14,589       13,660  
Goodwill       85,768       85,768       84,171  
Other intangible assets, net       654       680       105  
Other assets       121,142       124,137       114,426  
Total assets   $   5,201,164     $ 5,091,383     $ 4,716,608  
             
Liabilities            
Noninterest-bearing deposits   $   1,234,505     $ 1,138,139     $ 1,084,746  
Interest-bearing deposits       2,564,693       2,439,405       2,327,562  
Total deposits       3,799,198       3,577,544       3,412,308  
Securities sold under retail repurchase agreements and federal funds purchased       141,244       125,119       121,043  
Advances from FHLB       675,000       790,000       590,000  
Subordinated debentures       –       30,000       35,000  
Accrued interest payable and other liabilities       41,461       35,148       35,865  
Total liabilities       4,656,903       4,557,811       4,194,216  
             
Stockholders’ Equity            
Common stock — par value $1.00; shares authorized 50,000,000; shares issued and outstanding 23,930,165,            
23,901,084 and 23,827,305 at March 31, 2017, December 31, 2016 and March 31, 2016, respectively       23,930       23,901       23,827  
Additional paid in capital       166,614       165,871       163,522  
Retained earnings       359,251       350,414       330,810  
Accumulated other comprehensive income (loss)       (5,534 )     (6,614 )     4,233  
Total stockholders’ equity       544,261       533,572       522,392  
Total liabilities and stockholders’ equity   $   5,201,164     $ 5,091,383     $ 4,716,608  
             

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
         
    Three Months Ended
    March 31,
(Dollars in thousands, except per share data)     2017     2016
Interest Income:        
Interest and fees on loans   $ 40,223   $ 36,206
Interest on loans held for sale     82     134
Interest on deposits with banks     90     53
Interest and dividends on investment securities:        
Taxable     3,608     3,286
Exempt from federal income taxes     1,951     1,973
Interest on federal funds sold     4     1
Total interest income     45,958     41,653
Interest Expense:        
Interest on deposits     2,488     1,837
Interest on retail repurchase agreements and federal funds purchased     76     66
Interest on advances from FHLB     3,129     3,374
Interest on subordinated debt     12     254
Total interest expense     5,705     5,531
Net interest income     40,253     36,122
Provision for loan losses     194     1,236
Net interest income after provision for loan losses     40,059     34,886
Non-interest Income:        
Investment securities gains     2     1,769
Service charges on deposit accounts     1,964     1,903
Mortgage banking activities     608     535
Wealth management income     4,484     4,405
Insurance agency commissions     1,752     1,445
Income from bank owned life insurance     594     615
Bank card fees     1,145     1,089
Other income     2,083     1,602
Total non-interest income     12,632     13,363
Non-interest Expenses:        
Salaries and employee benefits     17,801     18,230
Occupancy expense of premises     3,402     3,473
Equipment expenses     1,724     1,664
Marketing     663     681
Outside data services     1,392     1,363
FDIC insurance     805     637
Amortization of intangible assets     26     32
Other expenses     4,168     6,237
Total non-interest expenses     29,981     32,317
Income before income taxes     22,710     15,932
Income tax expense     7,598     5,119
Net income   $ 15,112   $ 10,813
         
Net Income Per Share Amounts:        
Basic net income per share   $ 0.63   $ 0.45
Diluted net income per share   $ 0.63   $ 0.45
Dividends declared per share   $ 0.26   $ 0.24
         

Sandy Spring Bancorp, Inc. and Subsidiaries                      
HISTORICAL TRENDS – QUARTERLY FINANCIAL DATA – UNAUDITED                  
                       
      2017       2016    
(Dollars in thousands, except per share data)   Q1   Q4   Q3   Q2   Q1  
Profitability for the Quarter:                      
Tax-equivalent interest income   $  47,754     $ 45,961     $ 44,545     $ 43,443     $ 43,317    
Interest expense     5,705       5,276       5,126       5,071       5,531    
Tax-equivalent net interest income     42,049       40,685       39,419       38,372       37,786    
Tax-equivalent adjustment     1,796       1,718       1,688       1,640       1,664    
Provision for loan losses     194       572       781       2,957       1,236    
Non-interest income     12,632       12,344       12,584       12,751       13,363    
Non-interest expenses     29,981       30,544       29,326       30,871       32,317    
Income before income taxes     22,710       20,195       20,208       15,655       15,932    
Income tax expense     7,598       6,879       6,734       5,008       5,119    
Net income   $ 15,112     $ 13,316     $ 13,474     $ 10,647     $ 10,813    
Financial Performance:                      
Pre-tax pre-provision income   $ 22,904     $ 20,767     $ 20,989     $ 18,612     $ 17,168    
Return on average assets     1.20%       1.09%       1.13%       0.92%       0.93%    
Return on average common equity     11.45%       9.92%       10.11%       8.21%       8.29%    
Net interest margin     3.51%       3.52%       3.50%       3.51%       3.44%    
Efficiency ratio – GAAP basis  (1)     56.69%       59.53%       58.28%       62.39%       65.31%    
Efficiency ratio – Non-GAAP basis  (1)     54.78%       57.54%       56.33%       59.12%       61.84%    
Per Share Data:                      
Basic net income per share   $ 0.63     $ 0.55     $ 0.56     $ 0.45     $ 0.45    
Diluted net income per share   $ 0.63     $ 0.55     $ 0.56     $ 0.44     $ 0.45    
Average fully diluted shares     24,158,566       24,140,534       24,122,923       24,108,668       24,222,940    
Dividends declared per common share   $ 0.26     $ 0.26     $ 0.24     $ 0.24     $ 0.24    
Non-interest Income:                      
Securities gains   $ 2     $ 13     $     $ 150     $ 1,769    
Service charges on deposit accounts     1,964       2,059       2,035       1,956       1,903    
Mortgage banking activities     608       1,279       1,129       1,106       535    
Wealth management income     4,484       4,605       4,347       4,448       4,405    
Insurance agency commissions     1,752       1,228       1,786       949       1,445    
Income from bank owned life insurance     594       616       616       615       615    
Bank card fees     1,145       1,176       1,189       1,220       1,089    
Other income     2,083       1,368       1,482       2,307       1,602    
Total Non-interest Income   $ 12,632     $ 12,344     $ 12,584     $ 12,751     $ 13,363    
Non-interest Expense:                      
Salaries and employee benefits   $ 17,801     $ 18,055     $ 17,848     $ 17,221     $ 18,230    
Occupancy expense of premises     3,402       3,195       3,130       3,162       3,473    
Equipment expenses     1,724       1,781       1,745       1,693       1,664    
Marketing     663       880       628       662       681    
Outside data services     1,392       1,310       1,349       1,355       1,363    
FDIC insurance     805       729       726       649       637    
Amortization of intangible assets     26       36       34       28       32    
Professional fees     955       1,268       987       1,447       1,138    
Other real estate owned expenses     5       2       5       (5 )     17    
Other expenses     3,208       3,288       2,874       4,659       5,082    
Total Non-interest Expense   $ 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)   Q1   Q4   Q3   Q2   Q1
Balance Sheets at Quarter End:                    
Residential mortgage loans   $   848,814     $ 841,692     $ 854,055     $ 820,618     $ 804,105  
Residential construction loans       170,285       150,229       144,998       142,710       138,221  
Commercial AD&C loans       309,350       308,279       302,522       285,585       261,204  
Commercial investor real estate loans       979,410       928,113       847,946       824,252       783,161  
Commercial owner occupied real estate loans       772,443       775,552       736,744       700,599       675,560  
Commercial business loans       457,216       467,286       444,129       451,711       451,239  
Consumer loans     455,478       456,657       450,113       447,149       447,198  
Total loans     3,992,996       3,927,808       3,780,507       3,672,624       3,560,688  
Allowance for loan losses     (43,861 )     (44,067 )     (43,942 )     (43,384 )     (41,766 )
Loans held for sale     17,717       13,222       15,822       13,490       27,806  
Investment securities     855,707       779,648       691,471       734,828       742,401  
Interest-earning assets     4,919,927       4,801,613       4,537,331       4,461,180       4,447,063  
Total assets     5,201,164       5,091,383       4,810,611       4,739,449       4,716,608  
Noninterest-bearing demand deposits     1,234,505       1,138,139       1,154,227       1,176,135       1,084,746  
Total deposits     3,799,198       3,577,544       3,537,157       3,510,141       3,412,308  
Customer repurchase agreements       141,244       125,119       124,205       117,887       121,043  
Total interest-bearing liabilities     3,380,937       3,384,524       3,087,135       2,996,893       3,073,605  
Total stockholders’ equity     544,261       533,572       536,655       529,479       522,392  
Quarterly Average Balance Sheets:                    
Residential mortgage loans   $   847,896     $ 848,399     $ 836,452     $ 811,705     $ 807,443  
Residential construction loans       157,152       148,248       147,602       142,854       134,708  
Commercial AD&C loans       310,325       310,110       287,836       272,090       261,687  
Commercial investor real estate loans       945,080       878,511       832,529       788,785       750,821  
Commercial owner occupied real estate loans       774,964       750,679       717,371       684,907       677,786  
Commercial business loans       462,444       452,195       446,123       453,459       460,903  
Consumer loans       458,162       454,349       450,171       449,594       451,075  
Total loans       3,956,023       3,842,491       3,718,084       3,603,394       3,544,423  
Loans held for sale       7,402       12,454       10,207       8,326       14,036  
Investment securities     818,287       703,574       709,527       739,132       810,593  
Interest-earning assets     4,829,208       4,599,426       4,477,438       4,394,879       4,411,796  
Total assets     5,111,698       4,878,660       4,747,020       4,664,343       4,685,747  
Noninterest-bearing demand deposits     1,159,715       1,167,379       1,131,739       1,082,762       1,021,471  
Total deposits     3,673,731       3,582,437       3,528,665       3,429,897       3,300,131  
Customer repurchase agreements       128,485       128,471       120,702       122,597       110,862  
Total interest-bearing liabilities     3,375,002       3,138,420       3,045,998       3,020,505       3,103,710  
Total stockholders’ equity     535,308       534,057       530,241       521,387       524,309  
Financial Measures:                    
Average equity to average assets     10.47%       10.95%       11.17%       11.18%       11.19%  
Investment securities to earning assets     17.39%       16.24%       15.24%       16.47%       16.69%  
Loans to earning assets     81.16%       81.80%       83.32%       82.32%       80.07%  
Loans to assets     76.77%       77.15%       78.59%       77.49%       75.49%  
Loans to deposits     105.10%       109.79%       106.88%       104.63%       104.35%  
Capital Measures:                    
Tier 1 leverage  (1)     9.26%       10.14%       10.25%       10.29%       10.23%  
Tier 1 capital to risk-weighted assets  (1)     11.02%       11.74%       12.17%       12.42%       12.74%  
Total regulatory capital to risk-weighted assets  (1)     12.06%       12.80%       13.29%       13.57%       13.86%  
Common equity tier 1 capital to risk-weighted assets  (1)     11.02%       11.01%       11.41%       11.63%       11.79%  
Book value per share   $   22.74     $ 22.32     $ 22.47     $ 22.18     $ 21.92  
Outstanding shares     23,930,165       23,901,084       23,886,651       23,874,650       23,827,305  
(1) Estimated ratio at March 31, 2017                    
                     

Sandy Spring Bancorp, Inc. and Subsidiaries                    
LOAN PORTFOLIO QUALITY DETAIL – UNAUDITED                
                     
      2017       2016  
(Dollars in thousands)   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                              
Consumer                       2       1  
Residential real estate:                    
Residential mortgage     232       232                    
Residential construction                              
Total loans 90 days past due     232       232       163       2       1  
Non-accrual loans:                    
Commercial business     4,849       5,833       4,140       4,263       3,741  
Commercial real estate:                    
Commercial AD&C     137       137       137       137       147  
Commercial investor real estate     7,970       8,107       9,189       8,868       7,885  
Commercial owner occupied real estate     5,106       4,823       5,591       5,678       7,149  
Consumer     3,058       2,859       2,726       2,600       2,715  
Residential real estate:                    
Residential mortgage     6,908       7,257       7,321       6,186       9,329  
Residential construction     189       195       199       202       412  
Total non-accrual loans     28,217       29,211       29,303       27,934       31,378  
Total restructured loans – accruing     2,409       2,489       2,512       3,420       4,716  
Total non-performing loans     30,858       31,932       31,978       31,356       36,095  
Other assets and real estate owned (OREO)     1,294       1,911       1,274       1,311       2,414  
Total non-performing assets   $ 32,152     $ 33,843     $ 33,252     $ 32,667     $ 38,509  
                     
    For the Quarter Ended,
     March 31,   December 31,   September 30,   June 30,   March 31,
(Dollars in thousands)     2017       2016       2016       2016       2016  
Analysis of Non-accrual Loan Activity:                    
Balance at beginning of period   $ 29,211     $ 29,303     $ 27,934     $ 31,378     $ 30,031  
Non-accrual balances transferred to OREO     (113 )     (637 )     (38 )            
Non-accrual balances charged-off     (391 )     (390 )     (245 )     (1,305 )     (274 )
Net payments or draws     (1,382 )     (1,547 )     (525 )     (4,810 )     (914 )
Loans placed on non-accrual     1,461       2,482       2,486       2,671       2,535  
Non-accrual loans brought current     (569 )           (309 )            
Balance at end of period   $ 28,217     $ 29,211     $ 29,303     $ 27,934     $ 31,378  
                     
Analysis of Allowance for Loan Losses:                    
Balance at beginning of period   $ 44,067     $ 43,942     $ 43,384     $ 41,766     $ 40,895  
Provision for loan losses     194       572       781       2,957       1,236  
Less loans charged-off, net of recoveries:                    
Commercial business     260       285       95       106       67  
Commercial real estate:                    
Commercial AD&C           (18 )     (22 )           48  
Commercial investor real estate     (5 )     (9 )     (12 )     (107 )     192  
Commercial owner occupied real estate                 (1 )     (1 )     (3 )
Consumer     167       177       145       364       54  
Residential real estate:                    
Residential mortgage     (16 )     18       24       989       15  
Residential construction     (6 )     (6 )     (6 )     (12 )     (8 )
Net charge-offs     400       447       223       1,339       365  
Balance at end of period   $ 43,861     $ 44,067     $ 43,942     $ 43,384     $ 41,766  
                     
Asset Quality Ratios:                    
Non-performing loans to total loans     0.77%       0.81%       0.85%       0.85%       1.01%  
Non-performing assets to total assets     0.62%       0.66%       0.69%       0.69%       0.82%  
Allowance for loan losses to loans     1.10%       1.12%       1.16%       1.18%       1.17%  
Allowance for loan losses to non-performing loans     142.14%       138.00%       137.41%       138.36%       115.72%  
Annualized net charge-offs to average loans     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 March 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   $ 847,896     $ 7,348     3.47 % $ 807,443     $ 6,868     3.40 %
Residential construction loans     157,152       1,436     3.71       134,708       1,195     3.57  
Total mortgage loans     1,005,048       8,784     3.50       942,151       8,063     3.43  
Commercial AD&C loans     310,325       3,654     4.77       261,687       2,998     4.61  
Commercial investor real estate loans     945,080       10,419     4.47       750,821       8,612     4.61  
Commercial owner occupied real estate loans     774,964       9,028     4.72       677,786       8,085     4.80  
Commercial business loans     462,444       5,007     4.39       460,903       5,013     4.37  
Total commercial loans     2,492,813       28,108     4.57       2,151,197       24,708     4.62  
Consumer loans     458,162       3,930     3.50       451,075       3,889     3.49  
Total loans (2)     3,956,023       40,822     4.17       3,544,423       36,660     4.16  
Loans held for sale     7,402       82     4.44       14,036       134     3.82  
Taxable securities     533,577       3,735     2.80       523,873       3,413     2.61  
Tax-exempt securities (3)     284,710       3,021     4.24       286,720       3,056     4.26  
Total investment securities     818,287       6,756     3.30       810,593       6,469     3.19  
Interest-bearing deposits with banks     45,397       90     0.80       42,255       53     0.50  
Federal funds sold     2,099       4     0.70       489       1     0.47  
Total interest-earning assets     4,829,208       47,754     3.99       4,411,796       43,317     3.94  
                             
Less:  allowance for loan losses     (43,728 )               (41,070 )          
Cash and due from banks     48,820                 47,039            
Premises and equipment, net     53,649                 53,574            
Other assets     223,749                 214,408            
Total assets   $ 5,111,698               $ 4,685,747            
                             
Liabilities and Stockholders’ Equity                            
Interest-bearing demand deposits   $ 610,047       114     0.08 % $ 569,219       108     0.08 %
Regular savings deposits     315,465       49     0.06       290,243       42     0.06  
Money market savings deposits     990,103       778     0.32       897,034       437     0.20  
Time deposits     598,401       1,547     1.05       522,164       1,250     0.96  
Total interest-bearing deposits     2,514,016       2,488     0.40       2,278,660       1,837     0.32  
Other borrowings     128,486       76     0.24       110,984       66     0.24  
Advances from FHLB     730,833       3,129     1.74       679,066       3,374     2.00  
Subordinated debentures     1,667       12     2.90       35,000       254     2.90  
Total interest-bearing liabilities     3,375,002       5,705     0.69       3,103,710       5,531     0.72  
                             
Noninterest-bearing demand deposits     1,159,715                 1,021,471            
Other liabilities     41,673                 36,257            
Stockholders’ equity     535,308                 524,309            
Total liabilities and stockholders’ equity   $ 5,111,698               $ 4,685,747            
                             
Net interest income and spread       $ 42,049     3.30 %     $ 37,786     3.22 %
Less: tax-equivalent adjustment         1,796                 1,664        
Net interest income       $ 40,253               $ 36,122        
                             
Interest income/earning assets           3.99 %         3.94 %
Interest expense/earning assets           0.48             0.50  
Net interest margin           3.51 %         3.44 %
                             
(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 $1.8 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.   

CONTACT: 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
Web site: www.sandyspringbank.com

Media Contact:
Jen Schell
301-570-8331
jschell@sandyspringbank.com

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