SEGMENT REPORTING

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

SEGMENT REPORTING

Note 15 - Segment Reporting

Currently, the Company conducts business in three operating segments—Community Banking, Insurance and Investment Management. Each of the operating segments is a strategic business unit that offers different products and services. The Insurance and Investment Management segments were businesses that were acquired in separate transactions where management of the acquired business was retained. The accounting policies of the segments are the same as those of the Company. However, the segment data reflect inter-segment transactions and balances.

The Community Banking segment is conducted through Sandy Spring Bank and involves delivering a broad range of financial products and services, including various loan and deposit products to both individuals and businesses. Parent company income is included in the Community Banking segment, as the majority of effort of these functions is related to this segment. Major revenue sources include net interest income, gains on sales of mortgage loans, trust income fees and service charges on deposit accounts. Expenses include personnel, occupancy, marketing, equipment and other expenses. Non-cash charges associated with amortization of intangibles was not significant for the three months ended March 31, 2017 and 2016, respectively.

The Insurance segment is conducted through Sandy Spring Insurance Corporation, a subsidiary of the Bank, and offers annuities as an alternative to traditional deposit accounts. Sandy Spring Insurance Corporation operates Sandy Spring Insurance, a general insurance agency located in Annapolis, Maryland, and Neff and Associates, located in Ocean City, Maryland. Major sources of revenue are insurance commissions from commercial lines, personal lines, and medical liability lines. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles was not significant for the three months ended March 31, 2017 and 2016, respectively.

The Investment Management segment is conducted through West Financial Services, Inc., a subsidiary of the Bank. This asset management and financial planning firm, located in McLean, Virginia, provides comprehensive investment management and financial planning to individuals, families, small businesses and associations including cash flow analysis, investment review, tax planning, retirement planning, insurance analysis and estate planning. West Financial currently has approximately $1.2 billion in assets under management. Major revenue sources include non-interest income earned on the above services. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles was not significant for the three months ended March 31, 2017 and 2016, respectively.

Information for the operating segments and reconciliation of the information to the condensed consolidated financial statements for the periods indicated is presented in the following tables:

	Three Months Ended March 31, 2017
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	45,957	$	1	$	2	$	(2)	$	45,958
Interest expense		5,707		-		-		(2)		5,705
Provision for loan losses		194		-		-		-		194
Noninterest income		9,086		1,752		2,003		(209)		12,632
Noninterest expense		27,799		1,355		1,036		(209)		29,981
Income before income taxes		21,343		398		969		-		22,710
Income tax expense		7,060		161		377		-		7,598
Net income	$	14,283	$	237	$	592	$	-	$	15,112
Assets	$	5,202,560	$	8,066	$	14,577	$	(24,039)	$	5,201,164

	Three Months Ended March 31, 2016
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	41,653	$	1	$	1	$	(2)	$	41,653
Interest expense		5,533		-		-		(2)		5,531
Provision for loan losses		1,236		-		-		-		1,236
Non-interest income		10,219		1,453		1,869		(178)		13,363
Non-interest expense		30,380		1,171		944		(178)		32,317
Income before income taxes		14,723		283		926		-		15,932
Income tax expense		4,644		114		361		-		5,119
Net income	$	10,079	$	169	$	565	$	-	$	10,813
Assets	$	4,719,759	$	5,790	$	12,088	$	(21,029)	$	4,716,608