Sandy Spring Profit Falls 88 Percent
The parent company of Sandy Spring Bank in Olney saw its profit plummet nearly 90 percent in the first quarter as non-performing loans added up and the company set aside cash for potential losses on its residential development loan portfolio.
Sandy Spring Bancorp is one of the largest banking companies with a headquarters in Maryland. The bank has 42 branches in Maryland and Northern Virginia. Like many community banking companies, Sandy Spring Bancorp faces increasing losses on loans made to developers who are unable to pay them back because of the downturn in the housing market.
The company said profit available to its common shareholders for the first quarter of 2009 was $1 million, or 6 cents per diluted share, compared with $8.2 million, or 50 cents per share, for the first quarter of 2008. The company posted a net loss of $3.8 million, or 23 cents per share, for the fourth quarter of 2008.
The company's provision for loan and lease losses totaled $10.6 million for the first quarter, compared with $2.7 million for the first quarter of 2008 and $17.8 million for the fourth quarter of 2008. The company said it increased its provision as it continued to internally downgrade some of it loans, charge off others and put additional cash aside to protect from losses in its residential real estate development portfolio.
"Our level of loan loss provisioning continues to be influenced by the ongoing negative economic conditions on both a regional and local basis," Daniel J. Schrider, president and chief executive of the bank and company, said in a statement. "We continue to aggressively monitor and work out problem credits in all segments of our loan portfolios, particularly those related to builders."
The company said that its funding sources increased during the first quarter, with deposits growing 8 percent. The company also said it closed more than $121 million in residential mortgage loans in the first quarter of 2009 compared to $62 million in the prior-year quarter.
Sandy Spring Bank was founded in 1868 by farmers who were Quakers.
April 21, 2009; 12:21 PM ET
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