New Md.-based Sandy Spring CEO says bank is in a good position

Daily Record, The (Baltimore), Jan 6, 2009 by Danielle Ulman

Days into his tenure as chief executive of Sandy Spring Bancorp Inc., Maryland's oldest banking institution, Daniel J. Schrider said Monday that the buyouts of large, locally owned banks will put his firm in a good position.

Schrider's appointment comes at a time of economic uncertainty, and when Sandy Spring is set to become the largest locally owned bank in Maryland, following the completion of merger deals between Provident Bankshares Corp. and M&T Bank Corp. and Chevy Chase Bank and Capital One Financial Corp.

"This consolidation activity is a positive thing for us," Schrider said in an interview Monday. "We think that we can be a great alternative to the larger out-of-state banks.

"Our experience is that both the retail and business communities value having a locally owned institution whose interests are aligned with their interests," he said.

Schrider, 44, replaced Hunter R. Hollar, who served as the president and CEO of the Olney-based firm, parent of Sandy Spring Bank, for 15 years. Hollar will stay on as non-executive chairman under a succession plan that has been in place since March.

The company entered into an employment agreement with Schrider that will expire on Jan. 1, 2012, with a base salary of $450,000, according to a filing with the Securities and Exchange Commission. Schrider will retain his role as president of the firm and also have a seat on the company's board.

Maintaining the bank's independence is important, Schrider said, pointing to the bank's founding members, a group of local farmers who opened up in 1868 with a mission to serve the community.

"Because of its age -- I mean it's an ancient bank -- they have always had a strong sense of independence," said Lewis Sosnowik, vice president of bank securities Koonce Securities in Bethesda.

"I don't know how it would play out if someone were to come along and try to buy the bank," he said. "It would probably be a tough situation to overcome this streak to be independent."

The bank's size could be attractive to a potential acquirer with 42 branches in Maryland and Northern Virginia, but Sosnowik said Sandy Spring would only become a target if it were suffering.

"I don't believe that Sandy Spring has as many difficulties as some of the other banks that have been bought," he said. "It has always been a fairly conservatively run bank."

Although regional banks have been less tarred by the economic downturn, the share price of their stocks have taken a beating, said Richard Clinch, director of economic development at the University of Baltimore Jacob France Institute.

"All of the banks that have recently been acquired have been saying the same thing that Sandy Spring is saying, which is 'We're not for sale,'" he said.

Sandy Spring has made its own recent acquisitions, with the purchase of Glen Burnie-based CN Bancorp in 2006 and Potomac Bank of Virginia in 2007.

Sosnowik said he doubted Sandy Spring would venture into Baltimore.

"Banks, whether from out of town or locals, are looking for the rich counties," he said. "I don't mean to denigrate Baltimore, but they want to be in Montgomery County; they want to be in Howard County."

Schrider said the firm has "no immediate plans of geographic expansion," but said it would not rule out expanding within the state.

"Our desires are to grow out that market in Northern Virginia and Central Maryland," he said.

He said the bank will be able to do that with the $83 million it got through the sale of preferred stock to the government in the Troubled Asset Relief Program.

Schrider, who grew up in Howard County, is a graduate of the University of Maryland and Mount Saint Mary's University. He has been with Sandy Spring for 20 years.

Shares of Sandy Spring ended the day up 18 cents, or 0.84 percent, at $21.66.