SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 ------------- OR (_) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------- -------------------- Commission File Number: O-19065 ------- Sandy Spring Bancorp, Inc. ---------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 52-1532952 ------------------------ --------------------------------------- (State of incorporation) (I.R.S. Employer Identification Number) 17801 Georgia Avenue, Olney, Maryland 20832 301-774-6400 ------------------------------------- ---------- ------------------ (Address of principal office) (Zip Code) (Telephone Number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. YES X NO ------- ------- The number of shares of common stock outstanding as of July 25, 1997 is 4,903,697 shares.
SANDY SPRING BANCORP INDEX PAGE - ------------------------------------------------------------------------------- <TABLE> <CAPTION> <S> <C> PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Balance Sheets at June 30, 1997 and December 31, 1996.................... 1 Consolidated Statements of Income for the the Three and Six Month Periods Ended June 30, 1997 and 1996................................. 2 Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 1997 and 1996..... 3 Notes to Consolidated Financial Statements............. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS......... 6 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS... 11 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...................... 11 SIGNATURES.................................................... 12 </TABLE>
PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Sandy Spring Bancorp and Subsidiaries CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) <TABLE> <CAPTION> June 30, December 31, 1997 1996 ---------- ------------ <S> <C> <C> ASSETS Cash and due from banks $ 38,934 $ 32,899 Federal funds sold 17,980 23,278 Interest-bearing deposits with banks 1,410 861 Residential mortgage loans held for sale 4,880 7,985 Investments available-for-sale (at fair value) 289,595 234,423 Investments held-to-maturity -- fair value of $119,428 (1997) and $123,067 (1996) 118,343 122,272 Other equity securities 8,475 5,111 Total Loans (net of unearned income) 546,039 523,166 Less: Allowance for credit losses (6,431) (6,391) ---------- ------------ Net loans 539,608 516,775 Premises and equipment 23,782 20,211 Accrued interest receivable 8,845 7,917 Other real estate owned 500 0 Other assets 10,500 6,863 ---------- ------------ TOTAL ASSETS $1,062,852 $978,595 ========== ============ LIABILITIES Noninterest-bearing deposits $ 138,222 $117,052 Interest-bearing deposits 703,552 689,289 ---------- ------------ Total deposits 841,774 806,341 Short-term borrowings 112,127 68,127 Long-term borrowings 4,704 4,820 Accrued interest and other liabilities 2,598 2,726 ---------- ------------ TOTAL LIABILITIES 961,203 882,014 STOCKHOLDERS' EQUITY Common stock -- par value $1.00; shares authorized 15,000,000; shares issued and outstanding 4,910,490 (1997) and 4,902,113 (1996) 4,910 4,902 Surplus 33,713 33,474 Retained earnings 61,832 57,669 Net unrealized gain on investments available-for-sale 1,194 536 ---------- ------------ TOTAL STOCKHOLDERS' EQUITY 101,649 96,581 ---------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,062,852 $978,595 ========== ============ </TABLE> See Notes to Consolidated Financial Statements. 1
Sandy Spring Bancorp and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) <TABLE> <CAPTION> Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- 1997 1996 1997 1996 -------- -------- ------- ------- <S> <C> <C> <C> <C> Interest income: Interest and fees on loans $12,458 $11,530 $24,393 $22,881 Interest on loans held for sale 62 48 116 81 Interest on deposits with banks 15 76 42 99 Interest and dividends on securities: Taxable 5,005 3,550 9,465 7,057 Nontaxable 832 849 1,622 1,694 Interest on federal funds sold 321 326 647 730 -------- -------- ------- ------- TOTAL INTEREST INCOME 18,693 16,379 36,285 32,542 Interest expense: Interest on deposits 7,226 6,933 14,212 13,905 Interest on short-term borrowings 1,143 451 1,950 849 Interest on long-term borrowings 80 66 160 155 -------- -------- ------- ------- TOTAL INTEREST EXPENSE 8,449 7,450 16,322 14,909 -------- -------- ------- ------- NET INTEREST INCOME 10,244 8,929 19,963 17,633 Provision for Credit Losses 125 25 225 208 -------- -------- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 10,119 8,904 19,738 17,425 Noninterest Income: Securities gains (losses) 112 4 132 (50) Service charges on deposit accounts 789 740 1,578 1,388 Gains on mortgage sales 255 246 524 443 Other income 858 721 1,609 1,431 -------- -------- ------- ------- TOTAL NONINTEREST INCOME 2,014 1,711 3,843 3,212 Noninterest Expenses: Salaries and employee benefits 4,147 3,634 7,887 7,028 Occupancy expense of premises 568 497 1,085 1,034 Equipment expenses 532 526 1,051 1,051 Other expenses 2,071 1,626 3,926 2,918 -------- -------- ------- ------- TOTAL NONINTEREST EXPENSES 7,318 6,283 13,949 12,031 -------- -------- ------- ------- Income Before Income Taxes 4,815 4,332 9,632 8,606 Income Tax Expense 1,695 1,429 3,309 2,827 -------- -------- ------- ------- NET INCOME $ 3,120 $ 2,903 $ 6,323 $ 5,779 ======== ======== ======= ======= PER SHARE DATA: Net Income $0.64 $0.60 $1.29 $1.20 Dividends Declared 0.23 0.19 0.44 0.37 </TABLE> See Notes to Consolidated Financial Statements. 2
Sandy Spring Bancorp and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) <TABLE> <CAPTION> Six Months Ended June 30, ---------------------- 1997 1996 ----------- --------- <S> <C> <C> Cash Flows from Operating Activities: Net Income $ 6,323 $ 5,779 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,037 888 Provision for credit losses 225 208 Deferred income taxes (2) 130 Origination of loans held for sale (29,500) (28,065) Proceeds from sales of loans held for sale 33,129 29,964 Gains on sales of loans held for sale (524) (444) Securities (gains) losses (132) 50 Net change in: Accrued interest receivable (928) (633) Accrued income taxes (55) (333) Other accrued expenses (74) (875) Other -- net (4,008) 1,782 --------- -------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 5,491 8,451 Cash Flows from Investing Activities: Net increase in interest-bearing deposits with banks (549) (5,194) Purchases of investments held-to-maturity (6,155) (19,967) Purchases of other equity securities (3,364) 0 Purchases of investments available-for-sale (145,714) (61,984) Proceeds from sales of investments available-for-sale 46,245 8,802 Proceeds from maturities, calls and principal payments of investments held-to-maturity 10,201 16,581 Proceeds from maturities, calls and principal payments of investments available-for-sale 45,258 32,481 Proceeds from sales of loans 0 291 Proceeds from sales of other real estate owned 0 250 Net increase in loans receivable (23,438) (19,946) Expenditures for premises and equipment (4,642) (944) --------- -------- NET CASH USED BY INVESTING ACTIVITIES (82,158) (49,630) Cash Flows from Financing Activities: Net increase (decrease) in demand and savings accounts 17,763 14,901 Net increase in time and other deposits 17,670 15,177 Net increase in short-term borrowings 43,900 6,962 Proceeds from long-term borrowings 0 2,000 Retirement of long-term borrowings (16) (15) Net decrease in balance due to banks 0 (1,378) Common stock purchased and retired (723) 0 Proceeds from issuance of common stock 970 1,037 Dividends paid (2,160) (1,716) --------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES 77,404 36,968 --------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 737 (4,211) Cash and Cash Equivalents at Beginning of Quarter 56,177 60,435 --------- -------- CASH AND CASH EQUIVALENTS AT END OF QUARTER* $ 56,914 $ 56,224 ========= ======== </TABLE> 3
Cont'd CONSOLIDATED STATEMENTS OF CASH FLOWS <TABLE> <CAPTION> Six Months Ended June 30, ---------------------- 1997 1996 ----------- --------- <S> <C> <C> Supplemental Disclosures: $15,272 $14,454 Interest payments Income tax payments 4,140 2,850 Noncash Investing Activities: Transfers from loans to other real estate owned 565 93 Reclassification of borrowings from long-term to short-term 100 2,000 Unrealized gain on investments available-for-sale net of deferred tax effect of $414 in 1997 and $(929) in 1996 658 (1,477) </TABLE> *Cash and cash equivalents include amounts of "Cash and due from banks" and "Federal funds sold" on the Consolidated Balance Sheets. See Notes to Consolidated Financial Statements. 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - GENERAL The foregoing financial statements are unaudited; however, in the opinion of Management, all adjustments (comprising only normal recurring accruals) necessary for a fair presentation of the results of the interim periods have been included. These statements should be read in conjunction with the financial statements and accompanying notes included in Sandy Spring Bancorp's 1996 Annual Report to Shareholders. The results shown in this interim report are not necessarily indicative of results to be expected for the full year 1997. The accounting and reporting policies of Sandy Spring Bancorp (the "Company") conform to generally accepted accounting principles and to general practice within the banking industry. Certain reclassifications have been made to amounts previously reported to conform with current classifications. Consolidation has resulted in the elimination of all significant intercompany accounts and transactions. Financial data for 1996 has been restated under pooling of interests accounting for the Annapolis Bancshares, Inc. merger consummated August 29, 1996. NOTE 2 - STOCKHOLDERS' EQUITY On April 16, 1997, the Company announced that its Board of Directors had authorized the repurchase of up to 5%, or 246,042 shares, of Bancorp's outstanding common stock, par value $1.00 per share, in connection with shares expected to be issued pursuant to Bancorp's dividend reinvestment, stock option, and employee benefit plans and for other corporate purposes. The share repurchases would be made on the open market and in privately negotiated transactions, from time to time until March 31, 1999, or earlier termination of the program by the Board. At June 30, 1997, 20,830 shares had been purchased under this program. NOTE 3 - PER SHARE DATA Net income per common share is based on the weighted average number of shares outstanding which was, for the second quarter, 4,915,739 in 1997 and 4,875,667 in 1996 and, for the first six months, 4,911,088 in 1997 and 4,854,625 in 1996. 5
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Consolidated basis, dollars in thousands except per share data) This Management's Discussion and Analysis contains forward-looking statements, including statements of goals, intentions and expectations, regarding or based upon general economic conditions, interest rates, developments in national and local markets, and other matters, and which, by their nature, are subject to significant uncertainties. Because of these uncertainties and the assumptions on which statements in this report are based, the actual future results may differ materially from those indicated in this report. In the following discussion, all financial information pertaining to the first two quarters of 1996 except dividends per share have been retroactively restated for the Annapolis Bancshares, Inc. merger completed in the third quarter of 1996. THE COMPANY The Company is the registered bank holding company for Sandy Spring National Bank of Maryland (the "Bank"), headquartered in Olney, Maryland. The Bank operates nineteen banking offices in Montgomery, Howard, and Anne Arundel Counties in Maryland. On April 16, 1997, the Company announced that its Board of Directors had authorized the repurchase of up to 5%, or 246,042 shares, of its outstanding common stock, par value $1.00 per share, in connection with shares expected to be issued under the Company's dividend reinvestment, stock option, and employee benefit plans and for other corporate purposes. The share repurchases are expected to be made primarily on the open market from time to time until March 31, 1999, or earlier termination of the repurchase program by the Board. Repurchases under the program will be made at the discretion of management based upon market, business, legal, accounting and other factors. The Company has established a strategy of independence, and intends to establish or acquire additional offices or banking organizations as appropriate opportunities may arise. A. FINANCIAL CONDITION The Company's total assets were $1,062,852 at June 30, 1997, compared to $978,595 at December 31, 1996, increasing $84,257 or 8.6% during the first half of 1997. Earning assets increased $69,626 or 7.6% to $986,722 at June 30, 1997 from $917,096 at December 31, 1996. Total loans rose 4.4% or $22,873 during the first half of 1997 to $546,039. Commercial loans showed significant growth, rising $6,859 or 10.0%, as did construction loans, which increased $5,165 or 10.8% due to growth in residential construction loans. Real estate mortgages increased $11,203 or 3.0% during the first half of 1997, while consumer loans decreased $348 or 1.1%. The investment portfolio, consisting of available-for-sale, held-to-maturity and other equity securities, is the other significant category of earning assets. Total investments increased $54,607 or 15.1% from December 31, 1996 to June 30, 1997. Total deposits were $841,774 at June 30, 1997, increasing $35,433 or 4.4% from $806,341 at December 31, 1996. Interest-bearing deposits increased by $14,263 or 2.1% while noninterest-bearing demand deposits rose $21,170 or 18.1%. Growth in commercial and small business checking accounts was the primary cause of the increase in noninterest-bearing demand deposits. Federal Home Loan Bank of Atlanta advances were largely responsible for the $44,000 or 64.6% increase in short-term borrowings. 6
LIQUIDITY AND INTEREST RATIO SENSITIVITY The Company's liquidity position, considering both internal and external sources available, exceeded anticipated short and long term funding needs at June 30, 1997. In assessing liquidity, management considers operating requirements, the seasonality of loan and deposit flows, investment, loan, borrowing and deposit maturities, expected fundings of loans, deposit withdrawals, and the market values of available-for-sale investments. The Company employs simulation analysis in order to assess the degree of interest rate risk inherent in its asset and liability portfolios. Such risk is monitored in accordance with board of directors' policy limits by the Bank's asset-liability committee. The limit established for the estimated twelve month period impact of a 200 basis point change in interest rates on net interest income is 15%, while the limit for the estimated change in the fair value of the Company's net assets is 25%. Simulation modeling measured from June 30, 1997 indicated impacts of 11% on net interest income and 21% on the fair value of capital, both within the policy limits. The simulation model captures optionality factors such as call features and interest rate caps and floors imbedded in investment and loan portfolio contracts. CAPITAL MANAGEMENT The Company recorded a total risk-based capital ratio of 17.61% at June 30, 1997, compared to 17.56% at December 31, 1996; a tier 1 risk-based capital ratio of 16.54%, compared to 16.44%; and a capital leverage ratio of 9.80%, compared to 10.38%. Capital adequacy, as measured by these ratios, was well above regulatory requirements. Stockholders' equity totaled $101,649 (including a net unrealized gain of $1,194 on investments available-for-sale) at June 30, 1997, an increase of 5.3% from $96,581 (including a net unrealized gain of $536) at December 31, 1996. Internal capital generation (net income less dividends) provided $4,163 in additional equity during the first six months of 1997, representing an annualized rate (when considered as a percentage of average total stockholders' equity) of 8.6% versus 8.7% for the year ended December 31, 1996. External capital formation amounted to $970 for the six months ended June 30, 1997, resulting from issuance of 19,865 shares under the Company's dividend reinvestment plan and 9,358 shares from employee purchases through 401K benefit plans. Share repurchases began in the second quarter of 1997 and resulted in the retirement of 20,830 shares at an aggregate purchase price of $723. First half dividends were $2,160 or $0.44 per share in 1997, compared to $1,617 or $0.37 per share in 1996, for dividend payout ratios of 34.11% and 30.83%, respectively. B. RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1997 AND 1996 Net income for the first six months of the year rose $544 or 9.4% in 1997, to $6,323 ($1.29 per share) from the $5,779 ($1.20 per share) earned in the first half of 1996. The first half return on average assets was 1.28% in 1997 compared to 1.31% in 1996, first half returns on average equity were 13.03% and 13.18% in 1997 and 1996, respectively. NET INTEREST INCOME First half net interest income was $19,963 in 1997, an increase of 13.2% over $17,633 in 1996, reflecting a higher volume of average earning assets, along with a 6 basis point increase in net interest margin to 4.48% from 4.42%. First half tax-equivalent interest income increased $3,796 or 11.3% in 1997, compared to 1996. Average earning assets rose 11.1% over the prior year period while the average yield earned on those assets remained essentially constant. Comparing the first half of 1997 versus 1996, average loans grew 7.0% to $533,315 (57.4% of average earning assets) while the average yield on loans remained essentially constant. Commercial mortgage, residential construction and commercial loans were responsible for most of the rise in total loans. Average total securities 7
increased 20.6% to $366,737 (39.5% of average earning assets) and recorded an 18 basis point increase in average yield. First half interest expense increased $1,413 or 9.5%, as a net result of 11.2% higher average interest-bearing liabilities and a 5 basis point decrease in average rate paid. CREDIT RISK MANAGEMENT The first half provision for credit losses was $225 in 1997 compared to $208 in 1996. Net charge-offs of $185 were recorded for the six month period ended June 30, 1997 while there were net charge-offs of $27 for the same period a year earlier. Nonperforming loans decreased by $27 while total nonperforming assets increased by $473, from December 31, 1996 to June 30, 1997. Expressed as a percentage of total assets, nonperforming assets were 0.48% at June 30, 1997 and at December 31, 1996. Because the loan portfolio includes a significant number of loans with large individual balances, the unexpected deterioration of one or a few such loans may cause a significant increase in nonperforming loans and assets or in potential problem loans. The total balance of impaired loans was $1,317 at June 30, 1997 and the reserve on those loans was $338 compared to $1,280 with a reserve of $127 at December 31, 1996. The Company regularly analyzes the sufficiency of its allowance for credit losses based upon a number of factors, including lending risks associated with growth and entry into new markets, loss allocations for specific problem credits, the level of the allowance to nonperforming loans, historical loss experience, economic conditions, portfolio trends and credit concentrations, and changes in the size and character of the loan portfolio. Management establishes the allowance for credit losses in an amount that it determines, based upon these factors, is sufficient to provide for losses inherent in the loan portfolio. At June 30, 1997, the allowance for credit losses was 1.18% of total loans versus 1.22% at December 31, 1996. Coverage of risk in the loan portfolio may be evaluated using a ratio of the allowance for credit losses to nonperforming loans. Significant variation in this coverage ratio may occur from period to period because the amount of nonperforming loans depends largely upon the condition of a small number of individual loans and borrowers relative to the total loan portfolio. At June 30, 1997, the allowance for credit losses represented 139% of nonperforming loans compared to 137% at December 31, 1996. Management believes the allowance for credit losses at June 30, 1997 was adequate. NONINTEREST INCOME AND EXPENSES First half noninterest income, excluding nonrecurring securities gains and losses, profits on the sale of real estate owned and losses on the disposition of capital assets, rose $566 or 18.0% in 1997, compared to 1996. The primary causes for the change were increases in gains on mortgage sales as well as higher return check charges, trust department fees, Visa check fees and ATM surcharge fees. First half noninterest expenses increased $1,918 or 15.9% to $13,949 in 1997 from $12,031 in 1996. Income statement categories that increased most significantly were salaries and employee benefits, which rose $859 or 12.2%, and other expenses, which rose $1,008 or 34.5%. The increase in compensation expenses reflected a larger staff and an expanded branch network. The rise in other expenses included higher marketing and outside service costs and increased amortization of intangibles relating to a purchase of deposits in 1996. The ratio of net income to average full-time-equivalent (FTE) employees was $17 for the six month periods ended June 30, 1997 and 1996, although the number of average FTE employees rose to 378 from 343. INCOME TAXES The first half effective tax rate was 34.4% in 1997, compared to 32.8% in 1996 due primarily to increased amortization of intangibles. 8
ANALYSIS OF CREDIT RISK (Dollars in thousands) Activity in the allowance for credit losses is shown below: <TABLE> <CAPTION> 6 Months Ended 12 Months Ended June 30, 1997 December 31, 1996 -------------- ----------------- <S> <C> <C> Balance, January 1 $6,391 $6,597 Provision for credit losses 225 308 Loan charge-offs: Real estate-mortgage (60) (3) Real estate-construction (79) 0 Consumer (54) (143) Commercial (40) (469) -------- -------- Total charge-offs (233) (615) Loan recoveries: Real estate-mortgage 0 0 Real estate-construction 0 0 Consumer 25 37 Commercial 23 64 -------- -------- Total recoveries 48 101 -------- -------- Net charge-offs (185) (514) -------- -------- BALANCE, PERIOD END $6,431 $6,391 ======== ======== Net charge-offs to average loans (annual basis) 0.07% 0.10% Allowance to total loans 1.18% 1.22% </TABLE> Balance sheet risk inherent in the lending function is presented as follows at the dates indicated: <TABLE> <CAPTION> June 30, December 31, 1997 1996 -------- -------- <S> <C> <C> Non-accrual loans $1,672 $1,291 Loans 90 days past due 2,933 3,337 Restructured loans 23 27 Total Nonperforming Loans* 4,628 4,655 Other real estate owned 500 0 ======== ======== TOTAL NONPERFORMING ASSETS $5,128 $4,655 Nonperforming assets to total assets 0.48% 0.48% -------- -------- </TABLE> * Those performing loans considered potential problem loans, as defined and identified by management, amounted to approximately $5,890 at June 30, 1997, compared to $3,440 at December 31, 1996. Although these are loans where known information about the borrowers' possible credit problems causes management to have doubts as to their ability to comply with the present loan repayment terms, most are well collateralized and are not believed to present significant risk of loss. 9
C. RESULTS OF OPERATIONS - SECOND QUARTER 1997 AND 1996 Second quarter earnings of $3,120 ($0.64 per share) in 1997 were above the second quarter of 1996's $2,903 ($0.60 per share) by $217 or 7.5%. Tax-equivalent net interest income rose 14.2% during the second quarter of 1997 compared to the same three month period of 1996, showing the effect of an 11.9% increase in the earning asset base and a 9 basis point rise in net interest spread. The provision for credit losses was $125 and $25 for the second quarters of 1997 and 1996, respectively, reflecting favorable asset quality. There were net charge-offs of $81 and $27 in the two quarterly periods. Noninterest income for the second quarter increased 17.7% in 1997, compared to 1996, with the largest contributors being higher return check charges, trust department fees, Visa check fees and ATM surcharge fees. Noninterest expenses rose 16.5%, reflecting a larger staff, higher marketing and outside service costs and increased amortization of intangibles. The second quarter effective tax rate was 35.2% in 1997 versus 33.0% shown in 1996. 10
PART II - OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Company's annual shareholders' meeting held on April 16, 1997, the shareholders of the Company elected Susan D. Goff, Robert L. Mitchell, Robert L. Orndorff, Jr., and David E. Rippeon as directors for three year terms. There were no solicitations in opposition to management's nominees and all such nominees were elected. All of these nominees were incumbent directors except for David E. Rippeon. Other directors continuing in office are Solomon Graham, Charles F. Mess, Lewis R. Schumann, W. Drew Stabler, John Chirtea, Joyce Riggs Hawkins, Hunter R. Hollar, and Thomas O. Keech. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. The following is a list of Exhibits filed as part of this Quarterly Report on Form 10-Q: No. Exhibit --- ------- 10 Trust Agreement between the Company and CG Trust Company for Company's Cash and Deferred Profit Sharing Plan. 27 Financial Data Schedule (b) Reports on Form 8-K. On April 16, 1997, the Company filed a Current Report of Form 8-K reporting, under Item 5 of such form, a stock repurchase program authorized by the Board of Directors. The program is discussed above in Note 2 to the Consolidated Financial Statements on page 5 and in Management's Discussion and Analysis in the Section entitled "The Company" on page 6. 11
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized. SANDY SPRING BANCORP, INC. (Registrant) By: /s/ Hunter R. Hollar ------------------------------------- Hunter R. Hollar President and Chief Executive Officer Date: August 8, 1997 By: /s/ James H. Langmead ------------------------------------- James H. Langmead Vice President and Treasurer Date: August 8, 1997 12