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Sandy Spring Bancorp Reports a 40% Increase in Net Income for the First Quarter of 2019

By GlobeNewswire,  April 18, 2019, 07:00:00 AM EDT


OLNEY, Md., April 18, 2019 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income for the first quarter of 2019 of $30.3 million ($0.85 per diluted share) compared to net income of $21.7 million ($0.61 per diluted share) for the first quarter of 2018 and net income of $25.6 million ($0.72 per diluted share) for the fourth quarter of 2018. The prior year's first quarter's results included the impact of $9.0 million in merger expenses associated with the acquisition of WashingtonFirst Bankshares, Inc. ("WashingtonFirst").  Exclusive of the after-tax impact of these expenses adjusted earnings per diluted share for the prior year quarter was $0.79 per share. 

"In the first quarter we saw balanced results and meaningful contributions from all major business lines," said Daniel J. Schrider, President and Chief Executive Officer. "Our strong performance reflects the coordinated approach we take to serving our clients. Our teams work across disciplines and geographic locations to address our clients' complete financial picture. This approach distinguishes us in a highly competitive market, and it delivers results for our clients and the company."  

First Quarter Highlights: 

  • Total assets grew by 5% while loans and deposits grew by 8% and 11%, respectively, compared to the prior year.
  • First quarter results reflected an annualized return on average assets of 1.49% and annualized return on average common equity of 11.46% as compared to 1.12% and 8.70% respectively for the first quarter of 2018.  Exclusive of the prior year's first quarter merger costs on an after-tax basis, the return on average assets and return on average common equity would have been 1.47% and 11.40%, respectively.
  • The net interest margin was 3.60% for the first quarter of 2019, compared to 3.58% for the first quarter of 2018 and 3.57% for the fourth quarter of 2018. Excluding recovered interest income on acquired credit impaired loans during the quarter the net interest margin would have been 3.52%.  No recovered interest was recorded in the first or fourth quarter of 2018.
  • Non-interest income excluding insurance mortality proceeds and securities gains increased 6% from the prior year quarter. 
  • Tangible book value increased 10% to $21.05 per share at the end of the first quarter of the current year compared to $19.12 at March 31, 2018. 
  • The tangible common equity ratio increased to 9.39% at March 31, 2019 from 8.99% at March 31, 2018.
  • The Non-GAAP efficiency ratio was 51.44% for the current quarter as compared to 49.54% for the first quarter of 2018 and 51.78% for the fourth quarter of 2018.             

Review of Balance Sheet and Credit Quality

Driven by loan growth, total assets grew to $8.3 billion at March 31, 2019, as compared to $7.9 billion at March 31, 2018. Total loans at March 31, 2019, were $6.6 billion compared to $6.1 billion at March 31, 2018.  Deposit growth was 11% from March 31, 2018, to March 31, 2019, as interest-bearing deposits experienced 14% growth and noninterest-bearing deposits grew 3%.

Tangible common equity grew to $748 million at March 31, 2019, compared to $678 million at March 31, 2018. At March 31, 2019, the Company had a total risk-based capital ratio of 12.54%, a common equity tier 1 risk-based capital ratio of 11.19%, a tier 1 risk-based capital ratio of 11.35% and a tier 1 leverage ratio of 9.61%.

The level of non-performing loans to total loans increased to 0.61% at March 31, 2019, compared to 0.48% at March 31, 2018.  At March 31, 2019, non-performing loans totaled $40.1 million, compared to $29.4 million at March 31, 2018, and $36.0 million at December 31, 2018. The growth in non-performing loans occurred as a result of modest increase in all segments of the loan portfolio, predominantly loans secured by real estate.  Non-performing loans include accruing loans 90 days or more past due and restructured loans, but exclude loans that were considered non-performing from the acquired loan portfolios.

Loan charge-offs, net of recoveries, totaled $0.3 million for the first quarter of 2019 compared to $0.3 million for the first quarter of 2018.  The allowance for loan losses represented 0.81% of outstanding loans and 132% of non-performing loans at March 31, 2019, compared to 0.77% of outstanding loans and 160% of non-performing loans at March 31, 2018.

Income Statement Review

Net interest income for the first quarter of 2019 increased 6% compared to the first quarter of 2018 as a result of the Company's organic loan growth during the period which more than offset the impact of deposit growth.  The net interest margin improved to 3.60% for the first quarter of 2019 compared to 3.58% for the first quarter of 2018.  The first quarter of 2019 included $1.8 million in recovered interest income on acquired credit impaired loans. Excluding the recovered interest income, the first quarter's net interest margin would have been 3.52% compared to the prior year's margin of 3.58% which did not contain any recovered interest income. 

The provision for loan losses was a credit of $0.1 million for the first quarter of 2019 compared to a charge of $2.0 million for the first quarter of 2018 and $3.4 million for the fourth quarter of 2018.  The decrease in the provision for the current period compared to the prior year was primarily the result of the overall improvement in the qualitative credit metrics of the loan portfolio during the previous twelve months and lower loan growth during the current quarter.

Non-interest income was $17.0 million for the first quarter of 2019 as compared to the $17.1 million for the first quarter of 2018.  The current quarter included $0.6 million in life insurance mortality proceeds compared to $1.6 million in the prior year quarter in addition to $0.1 million in securities gains.   Exclusive of these proceeds and securities gains, the growth in non-interest income for the quarter was 6% or $0.9 million compared to the prior year quarter.  The majority of this increase was derived from mortgage banking activities and, to a lesser extent, wealth management income and credit related fees. 

Non-interest expenses decreased 11% to $44.2 million for the first quarter of 2019 compared to $49.6 million in the first quarter of 2018.  The prior year's quarter included $9.0 million in merger expenses.  Exclusive of the merger expenses, non-interest expense for the current quarter increased 9% primarily due to the increase in compensation and benefit expense.  This increase was the result of the combination of higher compensation expense from normal merit increases over the preceding twelve months, an increase in health care expenses experienced during the current quarter and management's decision to increase the Company's contribution to the employee retirement savings plan as a result of the reduction in the corporate tax rate that occurred at the end of 2017. 

Explanation of Non-GAAP Financial Measures

This news release contains financial information and performance measures determined by methods other than in accordance with generally accepted accounting principles in the United States ("GAAP"). The Company's management believes that the supplemental non-GAAP information provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors.  Non-GAAP measures used in this release consist of the following:

  • Adjusted diluted earnings per share is non-GAAP in that it excludes merger expenses and other selected items, net of tax.
  • Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets.
  • The Non-GAAP efficiency ratio is non-GAAP in that it excludes amortization of intangible assets, merger expenses and securities gains and includes tax-equivalent income.

These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to the Non-GAAP Reconciliation table included with this release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

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 Webcast of the conference call is available through the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com.  Participants may call 1-800-866-235-9910. 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 on the website until 9:00 am (ET)May 2, 2019.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10129889.

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:

            Jen Schell

            301-570-8331

            jschell@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, 2018, 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)     2019       2018   Change  
Results of Operations:              
  Net interest income   $    66,750     $   62,891   6   %
  Provision for loan losses       (128 )     1,997   (106 )  
  Non-interest income       16,969         17,118   (1 )  
  Non-interest expenses       44,192         49,641   (11 )  
  Income before income taxes       39,655         28,371   40    
  Net income        30,317         21,665   40    
               
  Pre-tax pre-provision pre-merger income (5)   $    39,527     $   39,326   1    
               
  Return on average assets       1.49   %     1.12 %    
  Return on average common equity       11.46   %     8.70 %    
  Net interest margin       3.60   %     3.58 %    
  Efficiency ratio - GAAP basis  (1)       52.79   %     62.04 %    
  Efficiency ratio - Non-GAAP basis  (1)       51.44   %     49.54 %    
               
Per share data:              
  Basic net income   $    0.85     $   0.61   39   %
  Diluted net income   $    0.85     $   0.61   39    
  Average fully diluted shares      35,806,459         35,683,542     -    
  Dividends declared per share   $    0.28     $   0.26   8    
  Book value per share       30.82       28.61   8    
  Tangible book value per share (5)       21.05       19.12   10    
  Outstanding shares      35,557,110         35,463,269     -    
               
Financial Condition at period-end:              
  Investment securities   $    987,299     $   1,040,339   (5 ) %
  Loans       6,569,990         6,061,551   8    
  Interest-earning assets       7,648,654         7,285,731   5    
  Assets       8,327,900         7,894,918   5    
  Deposits       6,224,523         5,627,206   11    
  Interest-bearing liabilities       5,297,108         5,057,645   5    
  Stockholders' equity       1,095,848         1,014,608   8    
               
Capital ratios:              
  Tier 1 leverage  (4)       9.61   %   9.21 %    
  Tier 1 capital to risk-weighted assets  (4)       11.35   %   11.08 %    
  Total regulatory capital to risk-weighted assets  (4)       12.54   %   12.27 %    
  Common equity tier 1 capital to risk-weighted assets  (4)       11.19   %   10.92 %    
  Tangible common equity to tangible assets  (2)       9.39   %   8.99 %    
  Average equity to average assets       13.00   %   12.88 %    
               
Credit quality ratios:              
  Allowance for loan losses to loans       0.81   %     0.77 %    
  Non-performing loans to total loans       0.61   %     0.48 %    
  Non-performing assets to total assets       0.50   %     0.41 %    
  Allowance for loan losses to non-performing loans       132.35   %     159.67 %    
  Annualized net charge-offs to average loans  (3)       0.02   %     0.02 %    
               
(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 and merger expenses from non-interest expense,
  securities gains from non-interest income and adds 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, 2019              
(5) Represents a Non-GAAP measure.              
               

 

Sandy Spring Bancorp, Inc. and Subsidiaries        
RECONCILIATION TABLE - UNAUDITED        
         
    Three Months Ended
    March 31,
(Dollars in thousands)     2019       2018  
Pre-tax pre-provision pre-merger income:        
Net income   $    30,317     $   21,665  
  Plus non-GAAP adjustment:        
  Merger expenses       -         8,958  
  Income taxes       9,338         6,706  
  Provision (credit) for loan losses       (128 )       1,997  
Pre-tax pre-provision pre-merger income   $    39,527     $   39,326  
         
Efficiency ratio - GAAP basis:        
Non-interest expenses    $    44,192     $   49,641  
         
Net interest income plus non-interest income   $    83,719     $   80,009  
         
Efficiency ratio - GAAP basis     52.79 %     62.04 %
         
         
Efficiency ratio - Non-GAAP basis:        
Non-interest expenses    $    44,192     $   49,641  
  Less non-GAAP adjustment:        
  Amortization of intangible assets       491         541  
  Merger expenses       -         8,958  
Non-interest expenses -  as adjusted   $    43,701     $   40,142  
         
Net interest income plus non-interest income    $    83,719     $   80,009  
  Plus non-GAAP adjustment:        
  Tax-equivalent income       1,241         1,085  
  Less non-GAAP adjustments:        
  Securities gains       -         63  
Net interest income plus non-interest income - as adjusted   $    84,960     $   81,031  
         
Efficiency ratio - Non-GAAP basis     51.44 %     49.54 %
         
Supplemental Non-GAAP Performance Measurements:        
Net income - GAAP   $    30,317     $   21,665  
  Add: Merger expenses - net of tax       -         6,617  
Net income - Non-GAAP   $    30,317     $   28,283  
         
  Average fully diluted shares       35,806,459         35,683,542  
  Diluted net income per share - GAAP   $    0.85     $   0.61  
  Diluted net income per share - Non-GAAP   $    0.85     $   0.79  
         
Tangible common equity ratio:        
Total stockholders' equity   $    1,095,848     $   1,014,608  
Accumulated other comprehensive loss       9,050         17,618  
Goodwill       (347,149 )       (342,907 )
Other intangible assets, net       (9,297 )       (11,408 )
Tangible common equity   $    748,452     $   677,911  
         
Total assets   $    8,327,900     $   7,894,918  
Goodwill       (347,149 )       (342,907 )
Other intangible assets, net       (9,297 )       (11,408 )
Tangible assets   $    7,971,454     $   7,540,603  
         
Tangible common equity ratio     9.39 %     8.99 %
         
Outstanding common shares       35,557,110         35,463,269  
Tangible book value per common share   $    21.05     $   19.12  
         

 

Sandy Spring Bancorp, Inc. and Subsidiaries            
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED            
             
    March 31,   December 31,   March 31,
(Dollars in thousands)     2019       2018       2018  
Assets            
  Cash and due from banks   $    67,282     $   67,014     $   64,064  
  Federal funds sold       481         609         1,407  
  Interest-bearing deposits with banks       65,886         33,858         153,948  
  Cash and cash equivalents       133,649         101,481         219,419  
  Residential mortgage loans held for sale (at fair value)        24,998         22,773         28,486  
  Investments available-for-sale (at fair value)       926,530         937,335         977,224  
  Other equity securities       60,769         73,389         63,115  
  Total loans       6,569,990         6,571,634         6,061,551  
  Less: allowance for loan losses       (53,089 )       (53,486 )       (46,931 )
  Net loans       6,516,901         6,518,148         6,014,620  
  Premises and equipment, net       61,003         61,942         60,352  
  Other real estate owned       1,410         1,584         2,761  
  Accrued interest receivable       26,182         24,609         22,383  
  Goodwill       347,149         347,149         342,907  
  Other intangible assets, net        9,297         9,788         11,408  
  Other assets       220,012         145,074         152,243  
Total assets   $    8,327,900     $   8,243,272     $   7,894,918  
             
Liabilities            
  Noninterest-bearing deposits   $    1,813,708     $   1,750,319     $   1,767,523  
  Interest-bearing deposits       4,410,815         4,164,561         3,859,683  
  Total deposits       6,224,523         5,914,880         5,627,206  
  Securities sold under retail repurchase agreements and federal funds purchased       122,626         327,429         149,323  
  Advances from FHLB       726,278         848,611         1,011,109  
  Subordinated debentures       37,389         37,425         37,530  
  Accrued interest payable and other liabilities       121,236         47,024         55,142  
  Total liabilities       7,232,052         7,175,369         6,880,310  
             
Stockholders' Equity            
  Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 35,557,110,             
  35,530,734 and 35,463,269 at March 31, 2019, December 31, 2018 and March 31, 2018, respectively       35,557         35,531         35,463  
  Additional paid in capital       607,479         606,573         604,399  
  Retained earnings       461,862         441,553         392,364  
  Accumulated other comprehensive loss       (9,050 )       (15,754 )       (17,618 )
  Total stockholders' equity       1,095,848         1,067,903         1,014,608  
Total liabilities and stockholders' equity   $    8,327,900     $   8,243,272     $   7,894,918  
             

 

Sandy Spring Bancorp, Inc. and Subsidiaries        
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED    
         
    Three Months Ended
  March 31,
(Dollars in thousands, except per share data)     2019       2018
Interest Income:        
 Interest and fees on loans   $    80,397     $   67,592
 Interest on loans held for sale       192         368
 Interest on deposits with banks       194         357
 Interest and dividends on investment securities:        
  Taxable       5,685         5,102
  Exempt from federal income taxes       1,710         2,072
 Interest on federal funds sold       5         13
  Total interest income       88,183         75,504
Interest Expense:        
Interest on deposits       14,480         6,959
Interest on retail repurchase agreements and federal funds purchased       398         108
Interest on advances from FHLB       6,064         5,078
Interest on subordinated debt       491         468
  Total interest expense       21,433         12,613
Net interest income       66,750         62,891
Provision (credit) for loan losses       (128 )       1,997
  Net interest income after provision for loan losses       66,878         60,894
Non-interest Income:        
 Investment securities gains       -         63
 Service charges on deposit accounts       2,307         2,259
 Mortgage banking activities       2,863         2,207
 Wealth management income       5,236         5,061
 Insurance agency commissions       1,900         1,824
 Income from bank owned life insurance       1,189         2,331
 Bank card fees       1,252         1,370
 Other income       2,222         2,003
  Total non-interest income       16,969         17,118
Non-interest Expenses:        
 Salaries and employee benefits       25,976         23,912
 Occupancy expense of premises       5,231         4,942
 Equipment expenses       2,576         2,225
 Marketing       943         1,148
 Outside data services       1,778         1,397
 FDIC insurance       1,136         1,193
 Amortization of intangible assets       491         541
 Merger expenses       -         8,958
 Professional fees and services       1,245         1,040
 Other expenses       4,816         4,285
  Total non-interest expenses       44,192         49,641
Income before income taxes       39,655         28,371
Income tax expense       9,338         6,706
  Net income   $    30,317     $   21,665
         
Net Income Per Share Amounts:        
Basic net income per share   $    0.85     $   0.61
Diluted net income per share   $    0.85     $   0.61
Dividends declared per share   $    0.28     $   0.26
         

 

                     
Sandy Spring Bancorp, Inc. and Subsidiaries                    
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED                
                     
      2019       2018  
(Dollars in thousands, except per share data)   Q1   Q4   Q3   Q2   Q1
Profitability for the Quarter:                    
Tax-equivalent interest income   $    89,424     $   86,839     $   85,595     $   79,774     $   76,589  
Interest expense       21,433         19,462         16,783         14,779         12,613  
Tax-equivalent net interest income       67,991         67,377         68,812         64,995         63,976  
  Tax-equivalent adjustment       1,241         1,232         1,221         1,177         1,085  
Provision (credit) for loan losses       (128 )       3,403         1,890         1,733         1,997  
Non-interest income       16,969         14,030         15,033         14,868         17,118  
Non-interest expenses       44,192         42,667         42,393         45,082         49,641  
Income before income taxes       39,655         34,105         38,341         31,871         28,371  
Income tax expense        9,338         8,539         9,107         7,472         6,706  
Net income    $    30,317     $   25,566     $   29,234     $   24,399     $   21,665  
Financial Performance:                    
Pre-tax pre-provision pre-merger income   $    39,527     $   37,508     $   40,811     $   35,832     $   39,326  
Return on average assets     1.49 %     1.25 %     1.45 %     1.23 %     1.12 %
Return on average common equity     11.46 %     9.70 %     11.26 %     9.66 %     8.70 %
Net interest margin     3.60 %     3.57 %     3.71 %     3.56 %     3.58 %
Efficiency ratio - GAAP basis (1)     52.79 %     53.22 %     51.31 %     57.29 %     62.04 %
Efficiency ratio - Non-GAAP basis (1)     51.44 %     51.78 %     49.27 %     52.98 %     49.54 %
Per Share Data:                    
Basic net income per share   $    0.85     $   0.72     $   0.82     $   0.68     $   0.61  
Diluted net income per share   $    0.85     $   0.72     $   0.82     $   0.68     $   0.61  
Average fully diluted shares     35,806,459       35,747,478       35,744,085       35,743,927       35,683,542  
Dividends declared per common share   $    0.28     $   0.28     $   0.28     $   0.28     $   0.26  
Non-interest Income:                    
Securities gains   $    -     $   45     $   82     $   -     $   63  
Service charges on deposit accounts       2,307         2,459         2,316         2,290         2,259  
Mortgage banking activities       2,863         1,130         1,672         2,064         2,207  
Wealth management income       5,236         5,492         5,344         5,387         5,061  
Insurance agency commissions       1,900         1,138         2,016         1,180         1,824  
Income from bank owned life insurance       1,189         663         663         670         2,331  
Bank card fees       1,252         1,368         1,436         1,393         1,370  
Other income       2,222         1,735         1,504         1,884         2,003  
  Total Non-interest Income   $    16,969     $   14,030     $   15,033     $   14,868     $   17,118  
Non-interest Expense:                    
Salaries and employee benefits   $    25,976     $   23,934     $   24,488     $   24,664     $   23,912  
Occupancy expense of premises       5,231         4,413         4,355         4,642         4,942  
Equipment expenses       2,576         2,426         2,441         2,243         2,225  
Marketing       943         1,061         770         945         1,148  
Outside data services       1,778         1,763         1,736         1,707         1,397  
FDIC insurance       1,136         1,255         1,257         1,390         1,193  
Amortization of intangible assets       491         540         540         541         541  
Merger expenses       -         -         580         2,228         8,958  
Professional fees and services       1,245         1,966         1,351         1,699         1,040  
Other expenses       4,816         5,309         4,875         5,023         4,285  
  Total Non-interest Expense   $    44,192     $   42,667     $   42,393     $   45,082     $   49,641  
                     
(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 and merger expenses from non-interest expense, securities gains 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                  
                       
      2019       2018    
(Dollars in thousands)   Q1   Q4   Q3   Q2   Q1  
Balance Sheets at Quarter End:                      
Residential mortgage loans   $    1,249,968     $   1,228,247     $   1,181,427     $   1,106,674     $   992,287    
Residential construction loans       176,388       186,785       188,779       197,372       215,445    
Commercial AD&C loans       688,939       681,201       631,589       609,266       564,871    
Commercial investor real estate loans       1,962,879       1,958,395       1,924,397       1,923,827       1,928,439    
Commercial owner occupied real estate loans       1,216,713       1,202,903       1,201,673       1,184,421       1,174,739    
Commercial business loans       769,660       796,264       738,083       702,939       652,797    
Consumer loans     505,443       517,839       523,011       525,574       532,973    
  Total loans     6,569,990       6,571,634       6,388,959       6,250,073       6,061,551    
Allowance for loan losses     (53,089 )     (53,486 )     (50,409 )     (48,493 )     (46,931 )  
Loans held for sale     24,998       22,773       31,581       40,000       28,486    
Investment securities     987,299       1,010,724       992,797       1,017,274       1,040,339    
Interest-earning assets     7,648,654       7,639,598       7,428,534       7,532,664       7,285,731    
Total assets     8,327,900       8,243,272       8,034,565       8,152,600       7,894,918    
Noninterest-bearing demand deposits     1,813,708       1,750,319       1,902,537       1,910,690       1,767,523    
Total deposits     6,224,523       5,914,880       5,898,394       5,837,826       5,627,206    
Customer repurchase agreements       122,626       137,429       142,669       139,647       149,323    
Total interest-bearing liabilities     5,297,108       5,378,026       5,042,431       5,168,055       5,057,645    
Total stockholders' equity     1,095,848       1,067,903       1,042,716       1,026,349       1,014,608    
Quarterly Average Balance Sheets:                      
Residential mortgage loans   $    1,230,319     $   1,188,135     $   1,122,946     $   1,034,062     $   1,117,478    
Residential construction loans       189,720         202,710         215,578         223,171         193,327    
Commercial AD&C loans       676,205         647,115         632,354         576,076         582,876    
Commercial investor real estate loans       1,964,699         1,936,936         1,905,427         1,924,759         1,988,340    
Commercial owner occupied real estate loans       1,207,799         1,196,506         1,190,865         1,184,409         940,065    
Commercial business loans       780,318         751,754         700,791         666,280         657,372    
Consumer loans       515,644         522,453         524,605         531,965         538,198    
  Total loans       6,564,704         6,445,609         6,292,566         6,140,722         6,017,656    
Loans held for sale       17,846       21,923       29,939       25,403       35,768    
Investment securities     1,010,940       986,146       996,365       1,028,306       1,062,325    
Interest-earning assets     7,627,187       7,495,338       7,372,536       7,311,272       7,212,878    
Total assets     8,258,116       8,104,916       7,986,525       7,926,735       7,841,611    
Noninterest-bearing demand deposits     1,682,720       1,766,672       1,822,931       1,796,644       1,651,258    
Total deposits     5,952,942       5,822,580       5,783,992       5,657,420       5,489,715    
Customer repurchase agreements       129,059         146,637         139,809         148,539         136,694    
Total interest-bearing liabilities     5,403,946       5,230,254       5,076,717       5,058,016       5,116,904    
Total stockholders' equity     1,073,291       1,045,378       1,030,167       1,013,081       1,010,106    
Financial Measures:                      
Average equity to average assets     13.00 %     12.90 %     12.90 %     12.78 %     12.88 %  
Investment securities to earning assets     12.91 %     13.23 %     13.36 %     13.50 %     14.28 %  
Loans to earning assets     85.90 %     86.02 %     86.01 %     82.97 %     83.20 %  
Loans to assets     78.89 %     79.72 %     79.52 %     76.66 %     76.78 %  
Loans to deposits     105.55 %     111.10 %     108.32 %     107.06 %     107.72 %  
Capital Measures:                      
Tier 1 leverage  (1)     9.61 %     9.50 %     9.46 %     9.27 %     9.21 %  
Tier 1 capital to risk-weighted assets  (1)     11.35 %     11.06 %     11.18 %     11.01 %     11.08 %  
Total regulatory capital to risk-weighted assets  (1)     12.54 %     12.26 %     12.38 %     12.19 %     12.27 %  
Common equity tier 1 capital to risk-weighted assets  (1)     11.19 %     10.90 %     11.02 %     10.85 %     10.92 %  
Book value per share   $    30.82     $   30.06     $   29.35     $   28.90     $   28.61    
Outstanding shares       35,557,110         35,530,734         35,521,541         35,511,943         35,463,269    
(1) Estimated ratio at March 31, 2019                      
                       

 

Sandy Spring Bancorp, Inc. and Subsidiaries                    
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED                
                     
      2019       2018  
(Dollars in thousands)   March 31,   December 31,   September 30,   June 30,    March 31,
Non-Performing Assets:                    
Loans 90 days past due:                    
  Commercial business   $    -     $   49     $   150     $   6     $   -  
  Commercial real estate:                    
  Commercial AD&C       -         -         1,261         -         -  
  Commercial investor real estate       -         -         -         -         -  
  Commercial owner occupied real estate       90         -         13         112         -  
  Consumer       -         219         563         -         126  
  Residential real estate:                    
  Residential mortgage       221         221         -         -         -  
  Residential construction       -         -         -         -         -  
Total loans 90 days past due       311         489         1,987         118         126  
Non-accrual loans:                    
  Commercial business       8,013         7,086         6,352         6,883         6,634  
  Commercial real estate:                    
  Commercial AD&C       3,306         3,306         136         136         136  
  Commercial investor real estate       6,071         5,355         5,861         5,878         5,813  
  Commercial owner occupied real estate       5,992         4,234         3,352         3,440         3,524  
  Consumer       4,081         4,107         4,098         4,298         3,244  
  Residential real estate:                    
  Residential mortgage       9,704         9,336         9,134         6,251         7,063  
  Residential construction       156         159         163         168         174  
Total non-accrual loans       37,323         33,583         29,096         27,054         26,588  
Total restructured loans - accruing       2,479         1,942         2,224         1,663         2,678  
Total non-performing loans       40,113         36,014         33,307         28,835         29,392  
Other assets and real estate owned (OREO)       1,410         1,584         2,118         2,361         2,761  
Total non-performing assets   $    41,523     $   37,598     $   35,425     $   31,196     $   32,153  
                     
     For the Quarter Ended, 
    March 31,    December 31,     September 30,    June 30,   March 31,
(Dollars in thousands)     2019       2018       2018       2018       2018  
Analysis of Non-accrual Loan Activity:                    
Balance at beginning of period   $    33,583     $   29,096     $   27,054     $   26,588     $   26,336  
  Non-accrual balances transferred to OREO       -         -         -         -         (289 )
  Non-accrual balances charged-off       (227 )       (360 )       (91 )       (144 )       (411 )
  Net payments or draws       (1,786 )       (1,126 )       (1,777 )       (1,635 )       (357 )
  Loans placed on non-accrual       6,202         5,973         4,193         2,245         1,309  
  Non-accrual loans brought current       (449 )       -         (283 )       -         -  
Balance at end of period   $    37,323     $   33,583     $   29,096     $   27,054     $   26,588  
                     
Analysis of Allowance for Loan Losses:                    
Balance at beginning of period   $    53,486     $   50,409     $   48,493     $   46,931     $   45,257  
Provision (credit) for loan losses       (128 )       3,403         1,890         1,733         1,997  
Less loans charged-off, net of recoveries:                    
  Commercial business       7         (9 )       (49 )       (73 )       322  
  Commercial real estate:                    
  Commercial AD&C       -         -         -         -         (62 )
  Commercial investor real estate       (7 )       109         (49 )       (8 )       (8 )
  Commercial owner occupied real estate       -         -         -         -         -  
  Consumer       182         45         85         244         99  
  Residential real estate:                    
  Residential mortgage       89         183         (11 )       13         (22 )
  Residential construction       (2 )       (2 )       (2 )       (5 )       (6 )
Net charge-offs/ (recoveries)       269         326         (26 )       171         323  
Balance at end of period   $    53,089     $   53,486     $   50,409     $   48,493     $   46,931  
                     
Asset Quality Ratios:                    
Non-performing loans to total loans     0.61 %     0.55 %     0.52 %     0.46 %     0.48 %
Non-performing assets to total assets     0.50 %     0.46 %     0.44 %     0.38 %     0.41 %
Allowance for loan losses to loans     0.81 %     0.81 %     0.79 %     0.78 %     0.77 %
Allowance for loan losses to non-performing loans     132.35 %     148.51 %     151.35 %     168.17 %     159.67 %
Annualized net charge-offs to average loans     0.02 %     0.02 %     0.00 %     0.01 %     0.02 %
                     

 

Sandy Spring Bancorp, Inc. and Subsidiaries                            
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED                  
                             
    Three Months Ended March 31,  
          2019                 2018        
              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   $    1,230,319     $    11,788     3.83 % $  1,117,478     $   10,381     3.72 %
Residential construction loans     189,720       1,963     4.20       193,327       1,844     3.87  
Total mortgage loans     1,420,039       13,751     3.88       1,310,805       12,225     3.74  
Commercial AD&C loans     676,205       9,880     5.93       582,876       8,136     5.66  
Commercial investor real estate loans     1,964,699       25,729     5.31       1,988,340       23,428     4.78  
Commercial owner occupied real estate loans     1,207,799       14,386     4.83       940,065       10,578     4.56  
Commercial business loans     780,318       10,808     5.62       657,372       8,049     4.97  
Total commercial loans     4,629,021       60,803     5.33       4,168,653       50,191     4.88  
Consumer loans     515,644       6,330     4.98       538,198       5,546     4.24  
  Total loans (2)     6,564,704       80,884     4.99       6,017,656       67,962     4.57  
Loans held for sale     17,846       192     4.31       35,768       368     4.12  
Taxable securities     768,658       5,976     3.11       761,392       5,267     2.77  
Tax-exempt securities (3)     242,282       2,173     3.59       300,933       2,622     3.49  
Total investment securities (4)     1,010,940       8,149     3.23       1,062,325       7,889     2.97  
Interest-bearing deposits with banks     33,068       194     2.38       93,241       357     1.55  
Federal funds sold     629         5     3.33       3,888         13     1.32  
  Total interest-earning assets     7,627,187       89,424     4.74       7,212,878       76,589     4.29  
                             
Less:  allowance for loan losses     (53,095 )               (45,673 )          
Cash and due from banks     62,478                 76,965            
Premises and equipment, net     61,722                 60,143            
Other assets     559,824                 537,298            
  Total assets   $    8,258,116               $  7,841,611            
                             
Liabilities and Stockholders' Equity                            
Interest-bearing demand deposits   $    709,844       300     0.17 % $   758,305         204     0.11 %
Regular savings deposits     331,473         93     0.11       468,651         301     0.26  
Money market savings deposits     1,658,628       6,307     1.54       1,380,380       3,127     0.92  
Time deposits     1,570,277       7,780     2.01       1,231,121       3,327     1.10  
  Total interest-bearing deposits     4,270,222       14,480     1.38       3,838,457       6,959     0.74  
Other borrowings     170,660         398     0.95       139,610       108     0.31  
Advances from FHLB     925,652         6,064     2.66       1,101,282       5,078     1.87  
Subordinated debentures     37,412         491     5.25       37,555       468     4.99  
  Total interest-bearing liabilities     5,403,946       21,433     1.61       5,116,904       12,613     1.00  
                             
Noninterest-bearing demand deposits     1,682,720                 1,651,258            
Other liabilities     98,159                 63,343            
Stockholders' equity     1,073,291                 1,010,106            
  Total liabilities and stockholders' equity   $    8,258,116               $  7,841,611            
                             
Net interest income and spread       $    67,991     3.13 %     $   63,976     3.29 %
  Less: tax-equivalent adjustment           1,241                   1,085        
Net interest income       $    66,750               $   62,891        
                             
Interest income/earning assets           4.74 %         4.29 %
Interest expense/earning assets             1.14               0.71  
  Net interest margin           3.60 %         3.58 %
                             
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 26.13% for 2019 and 2018. The annualized taxable-equivalent adjustments utilized in  
  the above table to compute yields aggregated to $1.2 million and $1.1 million in 2019 and 2018, respectively.                 
(2) Non-accrual loans are included in the average balances.                         
(3) Includes only investments that are exempt from federal taxes.                         
(4) Investments available-for-sale are presented at amortized cost.                         
                             

Source: Sandy Spring Bancorp, Inc.

This article appears in: News Headlines

Referenced Stocks: SASR










Today's Market Activity

NASDAQ 7816.28
-81.77  ▼  1.04%
DJIA 25764.00
-98.68  ▼  0.38%
S&P 500 2859.53
-16.79  ▼  0.58%
Data as of May 17, 2019