Sandy Spring Bancorp's quarterly profit rises 27%

$8.3 million was earned, or 56 cents a share

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

Sandy Spring Bancorp Inc. reported yesterday a 27 percent increase in first-quarter earnings, a gain attributed partly to the growth in fee income from its mortgage, insurance and trust operations.

The Olney holding company for Sandy Spring Bank earned $8.3 million, or 56 cents a share, in the three months that ended March 31. In the first quarter last year, the company earned $6.55 million, or 45 cents a share.

The quarter's earnings were 3 cents higher than the consensus estimate of analysts polled by Nelson Information and Zacks Investment Research.

"It was a good quarter," said Bryce Rowe, an analyst with Legg Mason Wood Walker Inc. in Richmond, Va. Besides recording strong revenue from trust, mortgage and insurance operations, "they had very good cost controls," he said.

Even so, the company lowered its earnings outlook for the full year by 10 cents a share. Profits of $2.10 to $2.20 a share are expected this year.

"Frankly, the economy has remained weaker and interest rates have remained lower for a longer period of time than we have anticipated, so it's putting pressure on our margin," Hunter R. Hollar, president and chief executive officer, said yesterday.

The margin between what the bank pays on deposits and borrowings and what it earns on loans and other assets narrowed over the past year, from 4.18 percent to 3.94 percent.

"The sharp decline in margin that occurred in the quarter is something to focus on," said Henry Coffey, an analyst with Ferris, Baker Watts Inc. in Baltimore.

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