Sandy Spring Bancorp, Inc. – Value Analysis (NASDAQ:SASR) : November 1, 2017

Capitalcube gives Sandy Spring Bancorp, Inc. a score of 68.

Our analysis is based on comparing Sandy Spring Bancorp, Inc. with the following peers – Old Line Bancshares, Inc., Shore Bancshares, Inc., Bay Bancorp, Inc., Eagle Bancorp, Inc., Howard Bancorp, Inc., First United Corporation, F.N.B. Corporation, Glen Burnie Bancorp and Fulton Financial Corporation (OLBK-US, SHBI-US, BYBK-US, EGBN-US, HBMD-US, FUNC-US, FNB-US, GLBZ-US and FULT-US).

Fundamental Overview

Sandy Spring Bancorp, Inc. has a fundamental score of 68 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.72 is about median in its peer group.
  • SASR-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • SASR-US has relatively high profit margins while operating with median capital turns.
  • Changes in the company’s annual revenue and earnings are around the median among its peers.
  • SASR-US‘s return on equity currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • While SASR-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s equity capital investment program suggests it is under-investing in a business that is producing peer median returns.

Drivers of Margin

  • SASR-US‘s pre-tax margin suggests relatively low operating costs.
  • The company’s net interest income (net interest income/total revenues) of 76.20% is around peer median suggesting that SASR-US‘s lending operations does not benefit from any differentiating pricing advantage. However, SASR-US‘s pre-tax margin is more than the peer median (40.80% compared to 30.16%) suggesting relatively low operating costs.
  • The company’s proportion of fee based income (i.e. non interest income/total revenues) of 23.80% is around peer median. In addition, SASR-US‘s proportion of overhead costs (i.e. non interest expense/total revenues) of 57.18x is also around peer median — suggesting no cost advantage on fee-based overhead operations.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

Sandy Spring Bancorp, Inc. is a bank holding company for Sandy Spring Bank, which engages in the provision of commercial banking, retail banking, and trust services to individuals and businesses. It operates through the following segments: Community Banking, Insurance, and Investment Management. The Community Banking segment conducts its operations through Sandy Spring Bank and involves delivering financial products and services, including various loan and deposit products to both individuals and businesses. The Insurance segment includes operations through Sandy Spring Insurance Corp, a subsidiary of the bank, and offers annuities as an alternative to traditional deposit accounts. The Investment Management segment conducts its operations through West Financial Services, Inc., a subsidiary of the Bank. The company was founded in 1988 and is headquartered in Olney, MD.