Sandy Spring Bancorp Squeezed By Weak Spreads

Jan. 30, 2023 1:32 AM ETSandy Spring Bancorp, Inc. (SASR)EGBN
Stephen Simpson profile picture
Stephen Simpson


  • Sandy Spring posted weak fourth quarter results, with significant net interest margin pressure from higher deposit costs and not enough loan or fee-based income growth to offset.
  • Earning asset yields should improve over time, but the deposit funding side is vulnerable until the Fed stops hiking rates.
  • A meaningful allocation of retail and office CRE loans is a risk in a downturn, but Sandy Spring operates in some very wealthy countries and that should offset the risk.
  • I still believe that Sandy Spring can generate healthy mid-to-high single-digit core earnings growth, but the near-term outlook is lackluster and the valuation just isn't cheap enough.

Sandy Point State Park on Chesapeake bay in Annapolis, Anne Arundel County, Maryland

Norm Lane/iStock via Getty Images

The past year was a more challenging one than I expected from Sandy Spring Bancorp (NASDAQ:SASR). I had concerns about the relatively low/lackluster asset sensitivity of this D.C.-area community bank going into

This article was written by

Stephen Simpson profile picture
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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