Sandy Spring Stumbles On Fee-Based Income As Funding Remains A Concern

In what has been an “okay, but not great” quarter for bank earnings report, small-cap metro D.C. bank Sandy Spring Bancorp (SASR) definitely skewed toward the “not great” part, sending the stock down about 10% at the worst point post-earnings. The reaction might have been a little overdone, but funding issues remain front and center, and I have some concerns about ramping competition in the D.C. metro area, not to mention the possible impact to the company’s D.C.-area loan portfolio if the government shutdown stretches on.

I don’t want to harp on the funding/spread concerns, but it’s the biggest risk I see with Sandy Spring, and that has been the case for a little while now. I believe that Sandy Spring has a strong brand and core business in an attractive market (and opportunities to make accretive deals down the road), but that attractive market is drawing in more competition and management will have to rise to the challenge. I believe they can and will, and I believe the shares remain undervalued below the mid-$30’s to $40.

Click here for more:
Sandy Spring Stumbles On Fee-Based Income As Funding Remains A Concern