- The Washington Times - Tuesday, January 21, 2003

Like several community banks in the Washington area, Sandy Spring Bancorp Inc. posted high revenue for 2002 despite the sluggish economy.
Stocks for the Olney parent company of Sandy Spring Bank have more than doubled since 2001, when the company was trading at $15 per share on the Nasdaq Composite Index, to $33.77 on Friday.
Hunter Hollar, president and chief executive officer of the company, said the rise in revenue stemmed from an increase in customer loans and deposits from both individuals and small businesses.
"Relatively low interest rates helped us in the deposit factor of our business and then we also successfully expanded our non-interest income," from services like mortgage financing and insurance along with other business investments, Mr. Hollar said.
Sandy Spring's earnings rose 45 percent for the fourth quarter ended Dec. 31 to $8.7 million (59 cents per diluted share) from $6 million (41 cents) a year earlier. For the year, income was up 33 percent to $30.7 million ($2.08) from $23.1 million ($1.59) in 2001.
"While the economy was sluggish in the nation, business was pretty healthy in the Baltimore and Washington area, and we saw that consistent growth in the Maryland suburbs," Mr. Hollar said.
Even with profitable returns, Henry Coffey Jr., a senior equity analyst and vice president of Ferris Baker Watts Inc., a Washington investment baking firm, said he wouldn't change his "hold" rating of the company anytime soon.
"I'm cautious about bank stocks in general because of the anxieties out there about what rising interest rates will do to the industry," Mr. Coffey said.
While Sandy Spring has expanded its reach into Frederick County with the planned opening of a branch in early March, there has been little growth outside of its 30 offices in Anne Arundel, Howard, Montgomery and Prince George's counties, Mr. Coffey added.
But Jennifer Demba, assistant vice president of SunTrust Robinson Humphrey, a division of SunTrust Capital Markets Inc., said the bank was poised for "high growth" for the next three years.
"Sandy Spring is operating in one of the best business areas for banks in the country," said Ms. Demba, who rated the bank as "overweight," the highest rating at SunTrust.
"It's no Bank of America, but we expect the bank to further integrate itself in the central Maryland market and move outside the size of a community bank," she said.
Richard Weiss, a vice president for Janney Montgomery Scott LLC, a Philadelphia brokerage firm, said community banks are drawing in more small-business clients with less complicated customer service and lower interest rates.
"Small-business owners especially want to talk with their account manager immediately instead of being transferred six times before getting the right individual," Mr. Weiss said, rating the stock a "buy."
The bank plans to expand services primarily in Montgomery County in the coming year, Mr. Hollar said. "Montgomery County has become more of a job center than a bedroom spot for people working in D.C., and there's still a lot of business in that area that we have yet to tap into."


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