Sandy Spring profit rose 45% in 4Q to $8.7 million

Banking firm earns a record 59 cents a share

January 15, 2003|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

Sandy Spring Bancorp reported record fourth-quarter earnings of $8.7 million yesterday, thanks partly to investment gains and fee income from its mortgage, trust and insurance business.

That was up 45 percent from the $6 million the Olney holding company for Sandy Spring Bank earned in the same quarter of 2001.

On a per share basis, Sandy Spring earned 59 cents for the quarter ended Dec. 31, compared with 41 cents a year earlier. Analysts had predicted the company would earn 51 cents.

"They had a pretty solid quarter," said Adam Barkstrom, an analyst with Legg Mason Wood Walker Inc.'s office in Richmond, Va.

Gains on the sale of investments contributed 4 cents per share. The company also benefited from 39 percent increase in the fourth quarter in fee income from mortgage banking, trust services and insurance products. The company also saw a decline in bad loans and reduced the amount of money set aside for problem loans, Barkstrom said.

For the year, Sandy Spring earned a record $30.7 million, or $2.08 per share, compared with $23.1 million, or $1.59 per share, for 2001.

Looking forward, company officials said earnings per share will be 50 cents to 52 cents for the first quarter and $2.20 to $2.30 for this year.

Officials said current trends indicate a slight contraction in the spread between what the bank pays on deposits and borrowings and what it earns on loans and other assets.

This year "is not going to be an easy year for banks" if the economy doesn't recover and loans don't increase, said Henry J. Coffey, Jr., an analyst with Ferris, Baker Watts Inc. in Baltimore.

Barkstrom also predicts that mortgage lending business may slow down by the end of the year because fewer people will be refinancing and interest rates are likely to inch upward.

Assets at the end of last year reached $2.3 billion, a 10 percent increase over a year ago. Deposits grew by 8 percent to $1.5 billion and total loans and leases rose 7 percent to $1.1 billion.

For the full year, fee income rose 36 percent over the year before.

The company's stock yesterday rose 45 cents to $32.69.

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