Dan Schrider – President and Chief Executive Officer Ron Kuykendall – Executive Vice President, General Counsel and Secretary Phil Mantua – Executive Vice President and Chief Financial Officer.

Will Curtiss – SunTrust Robinson Humphrey Catherine Miller – KBW Matt Schultheis – Boenning.

Good day, and welcome to the Sandy Spring Bancorp Inc. Earnings Conference Call and Webcast for the Third Quarter of 2015. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Daniel J. Schrider, President and CEO of Sandy Spring Bancorp. Please go ahead..

Thank you, Raco [ph] and good afternoon everyone. And welcome to Sandy Spring Bancorp’s conference call to discuss our performance for the third quarter of 2015. This is Dan Schrider speaking and I am joined here today by Phil Mantua, our Chief Financial Officer; and Ron Kuykendall, General Counsel for Sandy Spring Bancorp.

We really appreciate you joining today’s call. As always this call is open to all investors, the analysts and the news media, and there will be a live webcast of today’s call, and a replay of the call available at our website beginning later today.

We will take your questions after a brief review of some key highlights, but before we get started, Ron will give the customary Safe Harbor statement..

Thank you, Dan and good afternoon, ladies and gentlemen. Sandy Spring Bancorp will make forward-looking statements in this webcast that are subject to risks and uncertainties.

These forward-looking statements include statements of goals, intentions, earnings and other expectations, estimates of risks and future costs and benefits, assessments of probable loan and lease losses, assessments of market risk and statements of the ability to achieve financial and other goals.

These forward-looking statements are subject to significant uncertainties, because they are based upon or affected by management’s estimates and projections of future interest rates, market behavior and other economic conditions, future laws and regulations, and a variety of other matters, which by their very nature are subject to significant uncertainties.

Because of these uncertainties, Sandy Spring Bancorp’s actual future results may differ materially from those indicated. In addition, the company’s past results of operation do not necessarily indicate its future results..

Thanks, Ron. Today as usual, we’ll move to your questions immediately after some brief remarks. Overall, we produced another respectable quarter and first nine months of 2015. As I have commented previously, we continue to strive for and achieved balanced results in a very competitive environment.

Here is just a quick rundown at the main highlights from the release we issued earlier this morning, with a bit of added color where appropriate. Net income for the third quarter of 2015 was $11 million, or $0.45 per diluted share compared to net income of $11.1 million or $0.44 per share for the third quarter of 2014.

A net income of $10.3 million or $0.42 per diluted share for the linked second quarter of this year. For the nine months ended September 30, net income was $32.6 million or $1.31 per diluted share, compared to net income of $29.1 million or $1.16 per diluted share for the same period of the prior year.

Third quarter results were driven by ongoing momentum that we’ve sustained consistently thus far during 2015.

As noted in our release, the main takeaway that our net interest income remained very solid and earning assets were nicely balanced across all three loan portfolios, especially in C&I as well as CRE that’s where the local market place competition is particularly tough. Our total loans were up 4% over the second quarter of this year.

And to drill down a little bit further, we are pleased to report that our 15% year-over-year growth in total loans was ahead of our outlook which is in the 10% to 12% range. Solid loan growth led to a higher provision of course, over 50% of the provision increase is attributable to higher quarterly loan growth.

With the remainder of the provision increased distributed across the portfolio with no material concentration tied to any specific credits. We’re comfortable with both the level of the provision and our allowance and the fact that our earning asset yield is up 3 basis points year-over-year as we redeploy assets out of our investment portfolio.

The net interest margin was as expected at 3.43% for the third quarter. On the non-interest income side, insurance agency commissions were higher for the quarter, due to the seasonality of that business. The third quarter usually does produce a favorable bump in commissions.

And separately fee income on the asset management side was less than we anticipated, while at the same time we do continue to grow new assets under management. Quarterly fees were clearly affected by the volatility in the market as the third quarter came to the close. And that’s not – as a circumstances not going to be unique to just Sandy Spring.

As noted in today’s release, we have repurchased nearly 154,000 shares of our common stock during the third quarter, bringing the total thus far in 2015 to about 729,000 shares at an average price of $25.88. Now we do intend to continue to repurchase shares when the market provides an opportunity to do so.

As of a week ago, a $26.88 per share on October 16, our stock price has advanced over 14% year-over-year as compared with the KBW bank index at just under 7% for the same time frame.

This seems to validate that even in the current environment for bank stock investing, our shareholders appreciate the quality of our business model and our consistent performance. So, to summarize for the first nine months, loan growth remains balanced and steady. Our margin is stable and compares favorably with peers.

Deposit balances have been growing solidly in according to plan. Fee income remained strong, the efficiency ratio was down and our capital levels are very healthy.

To conclude our underlying goal is unchanged, we want to produce consistent results by growing a diverse stream of revenue driven by creating a remarkable experience for our clients and our employees. So that concludes my general comments for today. And we will now move to your questions.

Raco [ph], we can take the first question and when doing so we’d appreciate it if you would state your name and your company affiliation when you come on, so we know with whom we are speaking..

Thank you, sir. [Operator Instructions] Our first question comes from Will Curtiss on SunTrust Robinson Humphrey. Please go ahead..

Hey, good afternoon guys..

Hi, Will..

Hi, Will..

So I guess first on the loan growth, the solid quarter loan growth and it’s pretty broad as you mentioned.

I’m just curious to get your thoughts on how things are shaping up to finish the year?.

Yes, Will, this is Dan. Obviously it was a very strong quarter and been a really good year, I think when we look at the competitive environment and the economic environment. Our outlook as we look forward on loan growth is probably not similar from what we’ve commented previously is in that 10% to 12% range.

We think that’s pretty fair, although we certainly have outpaced that thus far this year..

Okay, and continue to, or likely continue to be kind of broadly or broad across the board?.

Yes, that would be our goal, yes..

Okay. And then on fees and specifically the insurance business, I believe that first and third quarters are typically seasonally strong.

But the growth this quarter seem to be a little stronger than normal, any additional color there, that you can provide?.

Yes, Will, this is Phil. Couple points there, you’re correct, it’s relates to the seasonality and in particular that seasonality is driven by the specific area in that revenue line related to physicians liability insurance especially this quarter.

And the majority of that quarter-over-quarter growth was related to that to the tune of about $700,000 and that grew from what it was the prior year. So what we’re seeing there is that the more significant aspect of a contribution by that particular line within the insurance area.

And then in addition to that we did also have nice growth on all of the different components of insurance in the quarter. So I mean I would suggest that, it’s relates to looking forward in the fourth quarter backing out, the majority of that seasonal fees related to the physiciansliability would be the way to evaluate the ongoing levels..

Okay, great that’s helpful.

And then maybe the last question from me is on the margin and maybe talk a little bit about the margin outlook from here given the expectation, that rates are going to remain low for some time and maybe how are, if that’s change your strategy any?.

Yes, this is Phil again. Will, I think, first of all we are very pleased that the margin in this quarter, not only held up, it’s slightly expanded on a linked basis and I think as Dan mentioned in his opening comments just again, demonstrates what we’ve been trying to accomplish there with an ongoing mix shift within the asset side of balance sheet.

I think, it’s proved out that, that’s the real reason given absence of any change and any broader rate environment for that to be able to be with – maintained.

I would suggest that that would still hold true in the fourth quarter, if in fact, we have a similar kind of level of loan growth and mix shift, then it will work, if we don’t, then we’re have to have a couple of basis points of compression in the overall margin, and balancing – be balanced by our funding needs, where we’ll pull the appropriate levels on attracting CD or other types of funds to accommodate the growth..

Okay, thanks for taking my question..

Thanks Will..

Yes, Will..

And our next question comes from Catherine Miller of KBW. Please go ahead..

Thanks, good afternoon everyone..

Good afternoon..

Hey, Catherine..

Maybe one follow-up on the margin, what are you thinking about CD cost going into next quarter, you had increased, this past quarter, any thoughts on him bleed over from especially you got this quarter or that would bring that up higher again, or do you think, you can kind of level that off, until maybe we see the moving rates?.

Yes, Catherine, this is Phil again. We’ve already pulled back on some of the offered CD special rates just because of what’s going on in the broader rate market, and our view in terms of not anticipating any movement by the Fed here, within the quarter.

Now there is lot of speculation they might do something at year end, but we had already back that down little bit here as we sit. So I think, we will stay the course there, in terms of the overall cost of us doing that. And yet staying competitive within the market and again balancing related to just how much loan growth we need to fund..

Great, and maybe a follow-up to on M&A, just any commentary on how conversation towards potential targets are going do you feel like any conversations have increased by the same and how does the rate environment change the way those conversations are going?.

Catherine, this is Dan. I would say the level of activity in terms of conversations is probably about the same, I think there are still a lot of folks trying to figure out what the – get some visibility on the future. The rate environment can only cloud that visibility a bit.

So I can’t say that the fact that there was not a move and now that it looks like it’s going to be kicked out even further that hasn’t manifest itself in any heightened the level of discussion, but it certainly could.

I still – I just think there is a lot of institutions across country there are just particularly within certain size bands that are trying to figure out what the future holds. So I would expect like many that those conversations will continue..

Great, all right. Thanks, congrats on a good quarter..

Thanks, Catherine..

Thank you..

Thanks..

[Operator Instructions] Our next question comes from Matt Schultheis of Boenning. Please go ahead..

Hi, good afternoon..

Hi, Matt..

Hey, Matt..

Hi, really, quickly as a follow-up to Catherine’s question.

On the M&A front, how far south are you guys willing to go?.

We tend to look at contiguous markets to where we are in the Greater Washington market and draw a circle that might have us, at least having conversations that would probably take about 100 mile radius around where we are here in Olney..

Okay..

Is that answers your question?.

Yes. I’m assuming that excludes about more. But yes. Thanks..

Thanks, Matt..

And our next question is a follow-up from Will Curtiss of SunTrust Robinson Humphrey. Please go ahead..

Hi, guys. Thanks for taking the follow-up.

Just a couple of housekeeping things and if I heard correctly that the provision is kind of tracking along with expected loan growth and should we expect that to continue going forward?.

Yes. Will, it is Dan. I would expect that to continue to track loan growth pretty well.

Just give you a little bit of a sense, I mean we’re with the progress we’ve made on the asset quality front over the last multiple quarters, we’re saying that probably about 18% of our allowance is – are those balances that are dedicated to specific reserves, watch reserve, historical losses which means that about 82% of our allowance is in kind of the general reserves, soft factor categories.

So that would cause it to kind of map along with loan growth, which is where that new production typically falls..

Okay, and then the last one from me.

Just in terms of the tax rate, it looks like it’s kind of probably – been in a range of 33% to 31% or so, just curious, any thoughts there on what the good tax rate is?.

I’d go right the middle of that, pretty much in the 32% range, I think that’s what we’ve averaged for the year, it’s off the top of my head Will, I think that’s a reasonable place to be, I don’t see anything that we’re doing that’s going to change it materially from here out..

Fair enough. Thank you..

You are welcome..

Thanks Will..

And this concludes our question-and-answer session. I would like to turn the call back to Mr. Schrider and rest of the management team for any final remarks..

All right, thank you, Raco [ph]. And thank you for your time and for your questions. We appreciate your investment with us this afternoon. And I want to remind you that we will appreciate receiving your feedback. So you can help us evaluate how we’ve done. You can e-mail your comments to ir@sandyspringbank.com.

Thank you again, and have a great afternoon..

Thank you, sir. The conference has now concluded, and we thank you all for attending today’s presentation. You may now disconnect your lines. And have a wonderful day..