Sandy Spring Bancorp Inc. in Olney, Md., has said it will report a higher-than-expected loan-loss provision for the second quarter when it reports earnings this month.

The $3.2 billion-asset company announced late Wednesday that it will take a $6.2 million loss provision, up 138% from the first quarter. Janney Montgomery Scott LLC had said in a research note that it expected the company to take a $2.5 million provision.

"This reserve increase comes as a result of internal risk rating downgrades to existing credits and is primarily attributable to our residential real estate development portfolio," Hunter R. Hollar, the chief executive officer, said in a press release.

In its research note, Janney had called a bigger provision "indicative of the declining real estate markets in many Maryland and Virginia locations, rather than a company-specific issue caused by poor lending practices."

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