Sandy Spring Bancorp Reports Record Quarterly Earnings of $56.7 Million

Fourth Quarter Earnings Increase 27% over Prior Quarter and Drive Annual Net Income to $97.0 Million

OLNEY, Md., Jan. 21, 2021 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported record net income of $56.7 million ($1.19 per diluted common share) for the fourth quarter of 2020. The current quarter’s result compares to net income of $28.5 million ($0.80 per diluted common share) for the fourth quarter of 2019 and net income of $44.6 million ($0.94 per diluted common share) for the third quarter of 2020.

Operating earnings for the current quarter, which exclude the impact of the provision for credit losses, the effects from the Paycheck Protection Program (“PPP” or “PPP program”) and merger and acquisition expense, each on an after-tax basis, were $48.2 million ($1.02 per diluted common share), compared to $30.4 million ($0.85 per diluted common share) for the quarter ended December 31, 2019 and $45.8 million ($0.97 per diluted common share) for the quarter ended September 30, 2020.

The provision for credit losses for the current quarter was a credit of $4.5 million as compared to a charge of $7.0 million for the third quarter of 2020. The decrease in the provision for credit losses compared to the prior quarter is mainly the result of changes in macroeconomic factors, primarily the reduction in projected near term business bankruptcies as indicated in the most recent economic forecast.

“In 2020 we completed a significant integration of Revere Bank while navigating a global pandemic and helping our clients through unprecedented challenges. This was a massive undertaking, especially in a remote work environment, but our newly combined institutions were unified in our efforts to serve our clients and to keep people safe,” said Daniel J. Schrider, President and Chief Executive Officer. “Given our strong operating results and the resilience we demonstrated throughout the year, we remain very optimistic about our future.”

Fourth Quarter Highlights:

  • Total assets at December 31, 2020, grew 48% to $12.8 billion compared to December 31, 2019, primarily as a result of the Revere Bank (“Revere”) acquisition and participation in the PPP. During the past year, loans and deposits grew by 55% and 56%, respectively. On the date of acquisition, Revere’s loans and deposits were $2.5 billion and $2.3 billion, respectively. The Company originated $1.1 billion in commercial business loans through its participation in the PPP program.

  • The net interest margin was 3.38% for the fourth quarter of 2020, compared to 3.38% for the same quarter of 2019, and 3.24% for the third quarter of 2020. Excluding the impact of the amortization of the fair value marks derived from acquisitions, the current quarter’s net interest margin would have been 3.31%, compared to 3.34% for fourth quarter of 2019, and 3.18% for the third quarter of 2020.

  • The provision for credit losses was a credit of $4.5 million for the current quarter. The credit to the provision for the current quarter as compared to the prior quarter’s provision charge of $7.0 million is primarily the result of the reduction in forecasted business bankruptcies impacted by governmental support programs aimed at individuals and small businesses.

  • Non-interest income for the current quarter increased by 68% or $13.0 million compared to the prior year quarter as a result of a 248% increase in income from mortgage banking activities and growth of 28% in wealth management income as a result of the acquisition of Rembert Pendleton Jackson (“RPJ”) in the first quarter of the current year.

  • Non-interest expense increased $15.6 million or 34% for the fourth quarter of 2020 compared to the prior year quarter. This increase was driven by the impact of the acquisitions of Revere and RPJ, which increased compensation and operational costs, in addition to intangible asset amortization. FDIC insurance cost increased from the same period of the prior year as a result of the effect of the assessment credit received during the prior year quarter.

  • Return on average assets (“ROA”) for the quarter ended December 31, 2020 was 1.78% and return on average tangible common equity (“ROTCE”) was 22.24%. This compares to ROA of 1.32% and ROTCE of 14.39% for the prior year. The non-GAAP efficiency ratio for the fourth quarter of 2020 was 45.09% compared to 51.98% for the fourth quarter of 2019.

Branch Rationalization

The Company announced its intention to close three branch locations in 2021. The affected branches are located in Northern Virginia (2) and Montgomery County (1) Maryland. Customer accounts will be consolidated into nearby locations. The changes come into effect as a part of the Company’s continuing analysis of its branch network, including usage, proximity to other Sandy Spring Bank offices and the needs of the Company’s customers. The branch closures are expected to be completed in the second quarter of 2021.

Response to COVID-19

Protecting the health and well-being of its employees and clients in addition to assisting clients who have been impacted by the pandemic remains the focus of the Company. A significant majority of non-branch employees continue to work remotely and clients are served at branches primarily through drive-thru facilities and limited lobby access. Area jurisdictions continue to monitor and modify their respective guidelines based on the metrics of the pandemic. Currently, the Company is maintaining the first phase of its return to work plan.

During the current quarter, the Company began accepting digital PPP forgiveness applications. The Company has paused extending invitations to its forgiveness application portal pending updates to reflect recent amendments to the PPP program and to focus on accepting loan applications for both first and second draw loans under the restarted program.

During 2020, the Company has granted payment modifications/deferrals on 2,575 loans with and aggregate balance of $2.1 billion of which 203 loans with an aggregate balance of $217 million remain in deferral status. Currently, the vast majority of loans that had been granted modifications/deferrals have returned to their original payment plans without a significant impact on payment delinquencies.

For additional information about the Company’s response to the pandemic, segments of the Company’s loan portfolio exposed to industries adversely impacted by the pandemic, and our response to clients who sought loan payment deferral, we have provided supplemental materials available at the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com.

Balance Sheet and Credit Quality

Total assets grew to $12.8 billion at December 31, 2020, as compared to $8.6 billion at December 31, 2019. Year-over-year asset growth was primarily the result of the acquisition of Revere during the year, as well as the Company’s participation in the PPP program. During this period, total loans grew by 55% to $10.4 billion at December 31, 2020, compared to $6.7 billion at December 31, 2019. Excluding PPP loans, total loans grew 39% to $9.3 billion at December 31, 2020 as compared to the prior year quarter. The acquisition of Revere drove the majority of the increase in commercial loans, which, excluding PPP loans, grew 52% or $2.6 billion. The residential mortgage loan portfolio remained stable year-over-year as the vast majority of loan originations during the past year were sold in the secondary market. Consumer loan growth during the year was 11%, also a result of the acquisition. Deposit growth was 56% during the past twelve months, as noninterest-bearing deposits experienced growth of 76% and interest-bearing deposits grew 47%. This growth was driven primarily by the Revere acquisition and, to a lesser extent, the PPP program.

Tangible common equity increased to $1.0 billion or 8.46% of tangible assets at December 31, 2020 compared to $782.3 million or 9.46% at December 31, 2019, as a result of the equity issuance in the Revere acquisition. The year-over-year change in tangible common equity also reflects the effects of the repurchase of $50 million of common stock and the increase in intangible assets and goodwill associated with the two acquisitions completed during the past twelve months. Excluding the impact of the PPP program from tangible assets at December 31, 2020, the tangible common equity ratio would be 9.25%.   At December 31, 2020, the Company had a total risk-based capital ratio of 13.93%, a common equity tier 1 risk-based capital ratio of 10.58%, a tier 1 risk-based capital ratio of 10.58% and a tier 1 leverage ratio of 8.92%.

The level of non-performing loans to total loans increased to 1.11% at December 31, 2020, compared to 0.62% at December 31, 2019, and 0.72% at September 30, 2020. At December 31, 2020, non-performing loans totaled $115.5 million, compared to $41.3 million at December 31, 2019, and $74.7 million at September 30, 2020. Non-performing loans include non-accrual loans, accruing loans 90 days or more past due and restructured loans. The year-over-year growth in non-performing loans was driven by three major components: loans placed in non-accrual status, acquired Revere non-accrual loans, and loans previously accounted for as purchased credit impaired loans that have been designated as non-accrual loans as a result of the Company’s adoption of the accounting standard for expected credit losses at the beginning of the year. Loans placed on non-accrual during the current quarter amounted to $54.7 million compared to $5.4 million for the prior year quarter and $0.9 million for the third quarter of 2020. Loans placed on non-accrual status during the current quarter relate primarily to a limited number of large borrowing relationships within the hospitality sector. These large relationships are collateral dependent and required no individual reserves due to sufficient values of the underlying collateral.

The Company recorded net charge-offs of $0.5 million for the fourth quarter of 2020, as compared to net charge-offs of $0.5 million and $0.2 million for the fourth quarter of 2019 and third quarter of 2020, respectively.

At December 31, 2020, the allowance for credit losses was $165.4 million or 1.59% of outstanding loans and 143% of non-performing loans, compared to $170.3 million or 1.65% of outstanding loans and 228% of non-performing loans at September 30, 2020.

Income Statement Review

Quarterly Results

Net interest income for the fourth quarter of 2020 increased 52% compared to the fourth quarter of 2019, driven primarily by the acquisition of Revere. The PPP program and its associated funding contributed a net of $6.9 million to net interest income for the quarter. The net interest margin remained unchanged at 3.38% for the fourth quarter of 2020 as compared to the same quarter of the prior year. Excluding the net $2.3 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current quarter would have been 3.31%. This compares to the adjusted net interest margin of 3.34% for the fourth quarter of 2019.

The provision for credit losses was a credit of $4.5 million for the fourth quarter of 2020, compared to a charge of $1.7 million for the fourth quarter of 2019, and $7.0 million for the third quarter of 2020. The credit in the current quarter’s provision for credit losses, compared to the provision charge recorded in the prior quarter, is primarily the result of an improvement in the forecasted business bankruptcies indicated in the most recent economic forecast.

Non-interest income increased $13.0 million or 68% during the current quarter compared to the same quarter of the prior year. As a result of the significant decline in lending rates, mortgage origination activity for new and refinanced mortgages resulted in income from mortgage banking activities increasing by $10.3 million during the current quarter compared to the prior year quarter. In addition, wealth management income increased $1.8 million as a result of the first quarter acquisition of RPJ. The growth of these two categories in non-interest income more than compensated for the decline in service fee income compared to the prior year quarter.

Non-interest expense increased 34% or $15.6 million compared to the prior year quarter. Excluding the impact of merger and acquisition expense, non-interest expense grew 37% year-over-year, primarily as a result of the operational costs of the Revere and RPJ acquisitions, increased compensation expense related to staffing increases and incentive compensation, in addition to an increase in FDIC insurance and the amortization of intangible assets.

The non-GAAP efficiency ratio was 45.09% for the current quarter as compared to 51.98% for the fourth quarter of 2019, and 45.27% for the third quarter of 2020. The decrease in the efficiency ratio (reflecting an increase in efficiency) from the fourth quarter of last year to the current year was the result of the $47.2 million growth in non-GAAP revenue outpacing the $15.4 million growth in non-GAAP non-interest expense.

Year to Date Results

The Company recorded net income of $97.0 million for the year ended December 31, 2020 compared to $116.4 million for the prior year, representing a 17% decrease. The net earnings for the current year included the effects of the initial implementation of the accounting standard for current expected credit losses, the impact of the pandemic on the provision for credit losses, which resulted in a significant provision in the second quarter, and the impact of the acquisitions of RPJ and Revere. Pre-tax, pre-provision, pre-merger income was $235.3 million for the year ended December 31, 2020 compared to $158.9 million for the prior year.

Net interest income for the year ended December 31, 2020 increased 37% or $97.9 million compared to the prior year. This increase was driven primarily by the acquisition of Revere in the second quarter of 2020. Additionally, the income generated by the PPP program, net of its associated funding costs, contributed a net of $19.0 million to the growth in net interest income year-over-year. The net interest margin declined to 3.35% for the year ended December 31, 2020, compared to 3.51% for the prior year. Excluding the net $12.7 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current year would have been 3.23%. The amortization of the fair value marks recognized during the current year included a benefit realized from the accelerated amortization of the $5.9 million purchase premium on acquired FHLB advances as a result of the prepayment of those borrowings. The net interest margin for 2019, excluding the amortization of fair value marks, would have been 3.46%.

The provision for credit losses for the full year of 2020 amounted to $85.7 million as compared to $4.7 million for the same period in 2019. The provision for credit losses under the CECL standard reflects the combined results of the impact of the deteriorated economic forecasts during the year ($44.1 million) and the initial allowance on acquired Revere non-purchased credit deteriorated loans ($17.5 million). The change in the portfolio mix and various qualitative adjustments resulted in the remainder of provision growth for the period.

Non-interest income increased 44% to $102.7 million for 2020 compared to $71.3 million for 2019. During the current year income from mortgage banking activities increased $25.3 million as a result of the high levels of new mortgage and refinancing activity resulting from historically low mortgage lending rates, and wealth management income increased $7.9 million as a result of the first quarter acquisition of RPJ. These increases more than exceeded the declines in deposit service fees and BOLI income.

Non-interest expense increased 43% to $255.8 million for 2020, compared to $179.1 million for 2019. Merger and acquisition expense accounted for $23.9 million of the growth of non-interest expense. The non-interest expense growth also included $5.9 million in prepayment penalties resulting from the liquidation of acquired FHLB borrowings. Excluding the impact of these items results in a year-over-year growth rate of 26%. This growth rate was driven by operational and compensation costs associated with the Revere and RPJ acquisitions, increased incentive expense related to the significant level of mortgage loan originations, increased intangible asset amortization, higher FDIC insurance premiums and annual employee merit increases.

The effective tax rate for the year ended December 31, 2020 was 22.1%, compared to 23.8% for the same period in 2019. This decrease was the result of the recent changes to tax laws that expanded the time permitted to utilize previous net operating losses. The Company applied this change to the 2018 acquisition of WashingtonFirst Bankshares, Inc. to realize a tax benefit of $1.8 million for the current year.

The non-GAAP efficiency ratio for the current year was 46.53% compared to 51.52% for the prior year. The improvement in the current year’s efficiency ratio compared to the prior year was the result of the growth in non-GAAP revenue, which outpaced the growth in non-GAAP non-interest expense.

Explanation of Non-GAAP Financial Measures

This news release contains financial information and performance measures determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental non-GAAP information provides a better comparison of period-to-period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. Non-GAAP measures used in this release consist of the following:

  • Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets.
  • The non-GAAP efficiency ratio is non-GAAP in that it excludes amortization of intangible assets, loss on FHLB redemption, merger and acquisition expense and securities gains and includes tax-equivalent income.
  • Operating earnings - and the related measures of operating earnings per share, operating return on average assets and operating return on average tangible common equity - reflect net income exclusive of the provision for credit losses, merger and acquisition expense and the income and expense associated with the PPP program, in each case net of tax.

These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to the non-GAAP Reconciliation tables included with this release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

Conference Call

The Company’s management will host a conference call to discuss its fourth quarter results today at 2:00 p.m. (ET). A live Webcast of the conference call is available through the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Website are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available on the website until 9:00 am (ET) February 4, 2021. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10150939.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank, a premier community bank in the Greater Washington, D.C. region. With over 60 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust  services  throughout  Maryland,  Northern  Virginia,  and  Washington,  D.C.  Through  its  subsidiaries,  Rembert Pendleton  Jackson, Sandy Spring Insurance  Corporation  and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services.

For additional information or questions, please contact:

Daniel J. Schrider, President & Chief Executive Officer, or
Philip J. Mantua, E.V.P. & Chief Financial Officer
Sandy Spring Bancorp
17801 Georgia Avenue
Olney, Maryland 20832
1-800-399-5919
Email: DSchrider@sandyspringbank.com  
           PMantua@sandyspringbank.com 
Website: www.sandyspringbank.com  

Media Contact:
Jen Schell
301-570-8331
jschell@sandyspringbank.com 

Forward-Looking Statements

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: risks, uncertainties and other factors relating to the COVID-19 pandemic, including the length of time that the pandemic continues, the imposition or re-imposition of stay-at-home orders and restrictions on business activities or travel; the effect of the pandemic on the general economy and on the businesses of our borrowers and their ability to make payments on their obligations; the remedial actions and stimulus measures adopted by federal, state and local governments; the inability of employees to work due to illness, quarantine, or government mandates; general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company’s loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company’s ability to retain key members of management; changes in legislation, regulations, and policies; the possibility that any of the anticipated benefits of acquisitions will not be realized or will not be realized within the expected time period; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2019, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov



Sandy Spring Bancorp, Inc. and Subsidiaries             
FINANCIAL HIGHLIGHTS - UNAUDITED            
             
  Three Months Ended December 31, % Change Year Ended December 31, % Change
(Dollars in thousands, except per share data)  2020   2019    2020   2019  
Results of operations:            
Net interest income $ 99,827  65,583  52% $ 363,159  265,308  37%
Provision/ (credit) for credit losses  (4,489)  1,655  n/m   85,669   4,684  n/m 
Non-interest income  32,234   19,224  68   102,716   71,322  44 
Non-interest expense  61,661   46,081  34   255,782   179,085  43 
Income before income tax expense  74,889   37,071  102   124,424   152,861  (19)
Net income  56,662   28,457  99   96,953   116,433  (17)
             
Net income attributable to common shareholders $ 56,194  28,273  99  $ 96,170  115,671  (17)
Pre-tax pre-provision pre-merger income (1) $ 70,403  39,674  77  $ 235,267  158,857  48 
             
Return on average assets  1.78%  1.32%    0.82%  1.39%  
Return on average common equity  15.72%  9.93%    7.24%  10.51%  
Return on average tangible common equity  22.24%  14.39%    10.38%  15.33%  
Net interest margin  3.38%  3.38%    3.35%  3.51%  
Efficiency ratio - GAAP basis (2)  46.69%  54.34%    54.90%  53.20%  
Efficiency ratio - Non-GAAP basis (2)  45.09%  51.98%    46.53%  51.52%  
             
Per share data:            
Basic net income per common share $ 1.19  $0.80  49% $ 2.19  $3.25  (33)%
Diluted net income per common share $ 1.19  $0.80  49  $ 2.18  $3.25  (33)
Weighted average diluted common shares  47,284,808   35,543,254  33   44,132,251   35,617,924  24 
Dividends declared per share $ 0.30  $0.30  -  $ 1.20  $1.18  2 
Book value per common share $ 31.24  $32.40  (4) $ 31.24  $32.40  (4)
Tangible book value per common share (1) $ 22.28  $22.37  -  $ 22.28  $22.37  - 
Outstanding common shares  47,056,777   34,970,370  35   47,056,777   34,970,370  35 
             
Financial condition at period-end:            
Investment securities $ 1,413,781  1,125,136  26% $ 1,413,781  1,125,136  26%
Loans  10,400,509   6,705,232  55   10,400,509   6,705,232  55 
Interest-earning assets  12,095,936   7,947,703  52   12,095,936   7,947,703  52 
Assets  12,798,429   8,629,002  48   12,798,429   8,629,002  48 
Deposits  10,033,069   6,440,319  56   10,033,069   6,440,319  56 
Interest-bearing liabilities  7,856,842   5,485,055  43   7,856,842   5,485,055  43 
Stockholders' equity  1,469,955   1,132,974  30   1,469,955   1,132,974  30 
             
Capital ratios:            
Tier 1 leverage (3)  8.92%  9.70%    8.92%  9.70%  
Common equity tier 1 capital to risk-weighted assets (3)  10.58%  11.06%    10.58%  11.06%  
Tier 1 capital to risk-weighted assets (3)  10.58%  11.21%    10.58%  11.21%  
Total regulatory capital to risk-weighted assets (3)  13.93%  14.85%    13.93%  14.85%  
Tangible common equity to tangible assets (4)  8.46%  9.46%    8.46%  9.46%  
Average equity to average assets  11.34%  13.31%    11.38%  13.25%  
             
Credit quality ratios:            
Allowance for credit losses to loans  1.59%  0.84%    1.59%  0.84%  
Non-performing loans to total loans  1.11%  0.62%    1.11%  0.62%  
Non-performing assets to total assets  0.91%  0.50%    0.91%  0.50%  
Allowance for credit losses to non-performing loans  143.23%  136.02%    143.23%  136.02%  
Annualized net charge-offs to average loans (5)  0.02%  0.03%    0.01%  0.03%  
             
n/m - not meaningful            
(1) Represents a Non-GAAP measure.
(2) The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, loss on FHLB redemption, and merger and acquisition expense from non-interest expense; securities gains from non-interest income and adds the tax- equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
(3) Estimated ratio at December 31, 2020.
(4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets and other comprehensive gains/ (losses). See the Reconciliation Table included with these Financial Highlights.
(5) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.


Sandy Spring Bancorp, Inc. and Subsidiaries         
RECONCILIATION TABLE - UNAUDITED        
         
  Three Months Ended December 31, Year Ended December 31,
(Dollars in thousands)  2020   2019   2020   2019 
Pre-tax pre-provision pre-merger income:        
Net income $ 56,662  $28,457  $ 96,953  $116,433 
Plus non-GAAP adjustments:        
Merger and acquisition expense  3   948   25,174   1,312 
Income tax expense  18,227   8,614   27,471   36,428 
Provision/ (credit) for credit losses  (4,489)  1,655   85,669   4,684 
Pre-tax pre-provision pre-merger income $ 70,403  $39,674  $ 235,267  $158,857 
         
Efficiency ratio - GAAP basis:        
Non-interest expense $ 61,661  $46,081  $ 255,782  $179,085 
         
Net interest income plus non-interest income $ 132,061  $84,807  $ 465,875  $336,630 
         
Efficiency ratio - GAAP basis  46.69%  54.34%  54.90%  53.20%
         
Efficiency ratio - Non-GAAP basis:        
Non-interest expense $ 61,661  $46,081  $ 255,782  $179,085 
Less non-GAAP adjustments:        
Amortization of intangible assets  1,655   481   6,221   1,946 
Loss on FHLB redemption  -   -   5,928   - 
Merger and acquisition expense  3   948   25,174   1,312 
Non-interest expense - as adjusted $ 60,003  $44,652  $ 218,459  $175,827 
         
Net interest income plus non-interest income $ 132,061  $84,807  $ 465,875  $336,630 
Plus non-GAAP adjustment:        
Tax-equivalent income  1,052   1,149   4,128   4,746 
Less non-GAAP adjustment:        
Investment securities gains  35   57   467   77 
Net interest income plus non-interest income - as adjusted $ 133,078  $85,899  $ 469,536  $341,299 
         
Efficiency ratio - Non-GAAP basis  45.09%  51.98%  46.53%  51.52%
         
Tangible common equity ratio:        
Total stockholders' equity $ 1,469,955  $1,132,974  $ 1,469,955  $1,132,974 
Accumulated other comprehensive (income)/ loss  (18,705)  4,332   (18,705)  4,332 
Goodwill  (370,223)  (347,149)  (370,223)  (347,149)
Other intangible assets, net  (32,521)  (7,841)  (32,521)  (7,841)
Tangible common equity $ 1,048,506  $782,316  $ 1,048,506  $782,316 
         
Total assets $ 12,798,429  $8,629,002  $ 12,798,429  $8,629,002 
Goodwill  (370,223)  (347,149)  (370,223)  (347,149)
Other intangible assets, net  (32,521)  (7,841)  (32,521)  (7,841)
Tangible assets $ 12,395,685  $8,274,012  $ 12,395,685  $8,274,012 
         
Tangible common equity ratio  8.46%  9.46%  8.46%  9.46%
         
Outstanding common shares  47,056,777   34,970,370   47,056,777   34,970,370 
Tangible book value per common share $ 22.28  $22.37  $ 22.28  $22.37 



Sandy Spring Bancorp, Inc. and Subsidiaries         
RECONCILIATION TABLE - UNAUDITED (CONTINUED)        
OPERATING EARNINGS - METRICS        
         
  Three Months Ended December 31, Year Ended December 31,
(Dollars in thousands)  2020   2019   2020   2019 
Operating earnings (non-GAAP):        
Net income $ 56,662  28,457  $ 96,953  116,433 
Plus non-GAAP adjustments:        
Provision/ (credit) for credit losses - net of tax  (3,343)  1,205   63,789   3,460 
Merger and acquisition expense - net of tax  3   698   18,745   969 
PPPLF funding expense - net of tax  122   -   829   - 
Less non-GAAP adjustment:        
PPP interest income and net deferred fee - net of tax  5,239   -   14,948   - 
Operating earnings (Non-GAAP)  $48,205  30,360  $ 165,368  120,862 
         
Operating earnings per common share (non-GAAP):        
Weighted average common shares outstanding - diluted (GAAP)  47,284,808   35,543,254   44,132,251   35,617,924 
         
Earnings per diluted common share (GAAP) $ 1.19  $0.80  $ 2.18  $3.25 
Operating earnings per diluted common share (non-GAAP) $ 1.02  $0.85  $ 3.75  $3.39 
         
Operating return on average assets (non-GAAP):        
Average assets (GAAP) $ 12,645,329  8,542,837  $ 11,775,096  8,367,139 
Average PPP loans  (1,060,995)  -   (710,264)  - 
Adjusted average assets (non-GAAP) $ 11,584,334  8,542,837  $ 11,064,832  8,367,139 
         
Return on average assets (GAAP)  1.78%  1.32%  0.82%  1.39%
Operating return on adjusted average assets (non-GAAP)  1.66%  1.41%  1.49%  1.44%
         
Operating return on average tangible common equity (non-GAAP):        
Average total stockholders' equity (GAAP) $ 1,433,900  1,136,824  $ 1,339,491  1,108,310 
Average accumulated other comprehensive (income)/ loss  (16,398)  3,005   (11,326)  7,069 
Average goodwill  (370,419)  (347,149)  (365,543)  (347,149)
Average other intangible assets, net  (33,675)  (8,146)  (28,357)  (8,873)
Average tangible common equity (non-GAAP) $ 1,013,408  784,534  $ 934,265  759,357 
         
Return on average tangible common equity (GAAP)  22.24%  14.39%  10.38%  15.33%
Operating return on average tangible common equity (non-GAAP)  18.92%  15.35%  17.70%  15.92%


Sandy Spring Bancorp, Inc. and Subsidiaries    
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED    
     
(Dollars in thousands) December 31, 2020 December 31, 2019
Assets    
Cash and due from banks $ 93,651  $82,469 
Federal funds sold  291   208 
Interest-bearing deposits with banks  203,061   63,426 
Cash and cash equivalents  297,003   146,103 
Residential mortgage loans held for sale (at fair value)  78,294   53,701 
Investments available-for-sale (at fair value)  1,348,021   1,073,333 
Other equity securities  65,760   51,803 
Total loans  10,400,509   6,705,232 
Less: allowance for credit losses  (165,367)  (56,132)
Net loans  10,235,142   6,649,100 
Premises and equipment, net  57,720   58,615 
Other real estate owned  1,455   1,482 
Accrued interest receivable  46,431   23,282 
Goodwill  370,223   347,149 
Other intangible assets, net  32,521   7,841 
Other assets  265,859   216,593 
Total assets $ 12,798,429  $8,629,002 
     
Liabilities    
Noninterest-bearing deposits $ 3,325,547  $1,892,052 
Interest-bearing deposits  6,707,522   4,548,267 
Total deposits  10,033,069   6,440,319 
Securities sold under retail repurchase agreements and federal funds purchased  543,157   213,605 
Advances from FHLB  379,075   513,777 
Subordinated debentures  227,088   209,406 
Total borrowings  1,149,320   936,788 
Accrued interest payable and other liabilities  146,085   118,921 
Total liabilities  11,328,474   7,496,028 
     
Stockholders' equity    
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 47,056,777 and 34,970,370 at December 31, 2020 and December 31, 2019, respectively  47,057   34,970 
Additional paid in capital  846,922   586,622 
Retained earnings  557,271   515,714 
Accumulated other comprehensive income/ (loss)  18,705   (4,332)
Total stockholders' equity  1,469,955   1,132,974 
Total liabilities and stockholders' equity $ 12,798,429  $8,629,002 
     



Sandy Spring Bancorp, Inc. and Subsidiaries        
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED      
         
  Three Months Ended December 31, Year Ended December 31,
(Dollars in thousands, except per share data)  2020   2019  2020  2019
Interest income:        
Interest and fees on loans $ 104,756  $77,522 $ 393,477 $316,550
Interest on loans held for sale  592   462  1,686  1,607
Interest on deposits with banks  27   724  446  2,129
Interest and dividends on investment securities:        
Taxable for federal income taxes  4,866   5,437  22,136  21,739
Exempt from federal income taxes  1,550   1,243  5,814  5,834
Interest on federal funds sold  -   2  1  10
Total interest income  111,791   85,390  423,560  347,869
Interest Expense:        
Interest on deposits  6,410   14,723  41,651  61,681
Interest on retail repurchase agreements and federal funds purchased  234   216  1,965  1,161
Interest on advances from FHLB  2,730   3,189  6,593  16,578
Interest on subordinated debt  2,590   1,679  10,192  3,141
Total interest expense  11,964   19,807  60,401  82,561
Net interest income  99,827   65,583  363,159  265,308
Provision/ (credit) for credit losses  (4,489)  1,655  85,669  4,684
Net interest income after provision/ (credit) for credit losses  104,316   63,928  277,490  260,624
Non-interest income:        
Investment securities gains  35   57  467  77
Service charges on deposit accounts  1,917   2,427  7,066  9,692
Mortgage banking activities  14,491   4,170  40,058  14,711
Wealth management income  8,215   6,401  30,570  22,669
Insurance agency commissions  1,356   1,331  6,795  6,612
Income from bank owned life insurance  705   660  2,867  3,165
Bank card fees  1,570   1,435  5,672  5,616
Other income  3,945   2,743  9,221  8,780
Total non-interest income  32,234   19,224  102,716  71,322
Non-interest expense:        
Salaries and employee benefits  36,080   26,251  134,471  103,950
Occupancy expense of premises  5,236   4,663  21,383  19,470
Equipment expenses  3,121   2,791  12,224  10,720
Marketing  1,058   1,085  4,281  4,456
Outside data services  2,394   1,854  8,759  7,567
FDIC insurance  1,527   123  4,727  2,260
Amortization of intangible assets  1,655   481  6,221  1,946
Merger and acquisition expense  3   948  25,174  1,312
Professional fees and services  2,473   2,553  7,939  6,978
Other expenses  8,114   5,332  30,603  20,426
Total non-interest expense  61,661   46,081  255,782  179,085
Income before income tax expense  74,889   37,071  124,424  152,861
Income tax expense  18,227   8,614  27,471  36,428
Net income $ 56,662  $28,457 $ 96,953 $116,433
         
Net income per share amounts:        
Basic net income per common share $ 1.19  $0.80 $ 2.19 $3.25
Diluted net income per common share $ 1.19  $0.80 $ 2.18 $3.25
Dividends declared per share $ 0.30  $0.30 $ 1.20 $1.18



Sandy Spring Bancorp, Inc. and Subsidiaries              
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED        
                 
   2020   2019 
(Dollars in thousands, except per share data) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Profitability for the quarter:                
Tax-equivalent interest income $ 112,843  $113,627  $116,252  $84,966  $86,539  $88,229  $88,423  $89,424 
Interest expense  11,964   15,500   13,413   19,524   19,807   20,292   21,029   21,433 
Tax-equivalent net interest income  100,879   98,127   102,839   65,442   66,732   67,937   67,394   67,991 
Tax-equivalent adjustment  1,052   643   1,325   1,108   1,149   1,147   1,209   1,241 
Provision/ (credit) for credit losses  (4,489)  7,003   58,686   24,469   1,655   1,524   1,633   (128)
Non-interest income  32,234   29,390   22,924   18,168   19,224   18,573   16,556   16,969 
Non-interest expense  61,661   60,937   85,438   47,746   46,081   44,925   43,887   44,192 
Income/ (loss) before income tax expense/ (benefit)  74,889   58,934   (19,686)  10,287   37,071   38,914   37,221   39,655 
Income tax expense/ (benefit)  18,227   14,292   (5,348)  300   8,614   9,531   8,945   9,338 
Net income/ (loss) $ 56,662  $44,642  $(14,338) $9,987  $28,457  $29,383  $28,276  $30,317 
Financial performance:                
Pre-tax pre-provision pre-merger income $ 70,403  $67,200  $61,454  $36,210  $39,674  $40,802  $38,854  $39,527 
Return on average assets  1.78%  1.38%  (0.45)%  0.46%  1.32%  1.39%  1.37%  1.49%
Return on average common equity  15.72%  12.67%  (4.15)%  3.55%  9.93%  10.38%  10.32%  11.46%
Return on average tangible common equity  22.24%  18.16%  (5.80)%  5.36%  14.39%  15.13%  15.10%  16.82%
Net interest margin  3.38%  3.24%  3.47%  3.29%  3.38%  3.51%  3.54%  3.60%
Efficiency ratio - GAAP basis (1)  46.69%  48.03%  68.66%  57.87%  54.34%  52.63%  53.04%  52.79%
Efficiency ratio - Non-GAAP basis (1)  45.09%  45.27%  43.85%  54.76%  51.98%  50.95%  51.71%  51.44%
Per share data:            
Net income/ (loss) attributable to common shareholders $ 56,194  $44,268  $(14,458) $9,919  $28,274  $29,196  $28,065  $30,120 
Basic net income/ (loss) per common share $ 1.19  $0.94  $(0.31) $0.29  $0.80  $0.82  $0.79  $0.85 
Diluted net income/ (loss) per common share $ 1.19  $0.94  $(0.31) $0.28  $0.80  $0.82  $0.79  $0.85 
Weighted average diluted common shares  47,284,808   47,175,071   46,988,351   34,743,623   35,543,254   35,671,721   35,634,924   35,618,346 
Dividends declared per share $ 0.30  $0.30  $0.30  $0.30  $0.30  $0.30  $0.30  $0.28 
Non-interest income:                
Securities gains $ 35  $51  $212  $169  $57  $15  $5  $- 
Service charges on deposit accounts  1,917   1,673   1,223   2,253   2,427   2,516   2,442   2,307 
Mortgage banking activities  14,491   14,108   8,426   3,033   4,170   4,408   3,270   2,863 
Wealth management income  8,215   7,785   7,604   6,966   6,401   5,493   5,539   5,236 
Insurance agency commissions  1,356   2,122   1,188   2,129   1,331   2,116   1,265   1,900 
Income from bank owned life insurance  705   708   809   645   660   662   654   1,189 
Bank card fees  1,570   1,525   1,257   1,320   1,435   1,462   1,467   1,252 
Other income  3,945   1,418   2,205   1,653   2,743   1,901   1,914   2,222 
Total non-interest income $ 32,234  $29,390  $22,924  $18,168  $19,224  $18,573  $16,556  $16,969 
Non-interest expense:                
Salaries and employee benefits $ 36,080  $36,041  $34,297  $28,053  $26,251  $26,234  $25,489  $25,976 
Occupancy expense of premises  5,236   5,575   5,991   4,581   4,663   4,816   4,760   5,231 
Equipment expenses  3,121   3,133   3,219   2,751   2,791   2,641   2,712   2,576 
Marketing  1,058   1,305   729   1,189   1,085   1,541   887   943 
Outside data services  2,394   2,614   2,169   1,582   1,854   1,973   1,962   1,778 
FDIC insurance  1,527   1,340   1,378   482   123   (83)  1,084   1,136 
Amortization of intangible assets  1,655   1,968   1,998   600   481   491   483   491 
Merger and acquisition expense  3   1,263   22,454   1,454   948   364   -   - 
Professional fees and services  2,473   1,800   1,840   1,826   2,553   1,546   1,634   1,245 
Other expenses  8,114   5,898   11,363   5,228   5,332   5,402   4,876   4,816 
Total non-interest expense $ 61,661  $60,937  $85,438  $47,746  $46,081  $44,925  $43,887  $44,192 
                 
(1) The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, loss on FHLB redemption, and merger and acquisition expense from non-interest expense; securities gains from non-interest income; and adds the tax- equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.


Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
                 
   2020   2019 
(Dollars in thousands, except per share data) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Balance sheets at quarter end:              
Commercial investor real estate loans $ 3,634,720  $3,588,702  $3,581,778  $2,241,240  $2,169,156  $2,036,021  $1,994,027  $1,962,879 
Commercial owner-occupied real estate loans  1,642,216   1,652,208   1,601,803   1,305,682   1,288,677   1,278,505   1,224,986   1,216,713 
Commercial AD&C loans  1,050,973   994,800   997,423   643,114   684,010   678,906   658,709   688,939 
Commercial business loans  2,267,548   2,227,246   2,222,810   813,525   801,019   772,619   772,158   769,660 
Residential mortgage loans  1,105,179   1,173,857   1,211,745   1,116,512   1,149,327   1,199,275   1,241,081   1,249,968 
Residential construction loans  182,619   175,123   169,050   149,573   146,279   150,692   171,106   176,388 
Consumer loans  517,254   521,999   558,434   453,346   466,764   480,530   489,176   505,443 
Total loans  10,400,509   10,333,935   10,343,043   6,722,992   6,705,232   6,596,548   6,551,243   6,569,990 
Allowance for credit losses  (165,367)  (170,314)  (163,481)  (85,800)  (56,132)  (54,992)  (54,024)  (53,089)
Loans held for sale  78,294   88,728   68,765   67,114   53,701   78,821   50,511   24,998 
Investment securities  1,413,781   1,425,733   1,424,652   1,250,560   1,125,136   946,210   955,715   987,299 
Interest-earning assets  12,095,936   11,965,915   12,447,146   8,222,589   7,947,703   7,742,138   7,713,364   7,648,654 
Total assets  12,798,429   12,678,131   13,290,447   8,929,602   8,629,002   8,437,538   8,398,519   8,327,900 
Noninterest-bearing demand deposits  3,325,547   3,458,804   3,434,038   1,939,937   1,892,052   2,081,435   2,023,614   1,813,708 
Total deposits  10,033,069   9,964,969   10,076,834   6,593,874   6,440,319   6,493,899   6,389,749   6,224,523 
Customer repurchase agreements  153,157   142,287   143,579   125,305   138,605   126,008   150,604   122,626 
Total interest-bearing liabilities  7,856,842   7,643,381   8,313,546   5,732,349   5,485,055   5,093,265   5,136,860   5,297,108 
Total stockholders' equity  1,469,955   1,424,749   1,390,093   1,116,334   1,132,974   1,140,041   1,119,445   1,095,848 
Quarterly average balance sheets:              
Commercial investor real estate loans $ 3,599,648  $3,582,751  $3,448,882  $2,202,461  $2,092,478  $1,982,979  $1,960,919  $1,964,699 
Commercial owner-occupied real estate loans  1,643,817   1,628,474   1,681,674   1,285,257   1,274,782   1,258,000   1,215,632   1,207,799 
Commercial AD&C loans  1,017,304   977,607   969,251   659,494   695,817   651,905   686,282   676,205 
Commercial business loans  2,189,828   2,207,388   1,899,264   819,133   765,159   786,150   756,594   780,318 
Residential mortgage loans  1,136,989   1,189,452   1,208,566   1,139,786   1,169,623   1,215,132   1,244,086   1,230,319 
Residential construction loans  180,494   173,280   162,978   145,266   149,690   162,196   174,095   189,720 
Consumer loans  515,202   543,242   575,734   465,314   477,572   486,865   505,235   515,644 
Total loans  10,283,282   10,302,194   9,946,349   6,716,711   6,625,121   6,543,227   6,542,843   6,564,704 
Loans held for sale  68,255   54,784   53,312   35,030   50,208   61,870   37,121   17,846 
Investment securities  1,418,683   1,404,238   1,398,586   1,179,084   1,002,692   941,048   964,863   1,010,940 
Interest-earning assets  11,882,542   12,049,463   11,921,132   7,994,618   7,859,836   7,690,629   7,619,240   7,627,187 
Total assets  12,645,329   12,835,893   12,903,156   8,699,342   8,542,837   8,370,789   8,294,883   8,258,116 
Noninterest-bearing demand deposits  3,424,729   3,281,607   3,007,222   1,797,227   1,927,063   1,909,884   1,796,802   1,682,720 
Total deposits  9,999,144   9,862,639   9,614,176   6,433,694   6,459,551   6,405,762   6,247,409   5,952,942 
Customer repurchase agreements  146,685   142,694   144,050   135,652   126,596   138,736   141,865   129,059 
Total interest-bearing liabilities  7,609,829   7,969,487   8,326,909   5,612,056   5,326,303   5,202,876   5,269,209   5,403,946 
Total stockholders' equity  1,433,900   1,401,746   1,390,544   1,130,051   1,136,824   1,123,185   1,099,078   1,073,291 
Financial measures:                
Average equity to average assets  11.34%  10.92%  10.78%  12.99%  13.31%  13.42%  13.25%  13.00%
Investment securities to earning assets  11.69%  11.91%  11.45%  15.21%  14.16%  12.22%  12.39%  12.91%
Loans to earning assets  85.98%  86.36%  83.10%  81.76%  84.37%  85.20%  84.93%  85.90%
Loans to assets  81.26%  81.51%  77.82%  75.29%  77.71%  78.18%  78.00%  78.89%
Loans to deposits  103.66%  103.70%  102.64%  101.96%  104.11%  101.58%  102.53%  105.55%
Capital measures:                
Tier 1 leverage (1)  8.92%  8.65%  8.35%  8.78%  9.70%  9.96%  9.80%  9.61%
Common equity tier 1 capital to risk weighted assets (1)  10.58%  10.45%  10.23%  10.23%  11.06%  11.37%  11.43%  11.19%
Tier 1 capital to risk-weighted assets (1)  10.58%  10.45%  10.23%  10.23%  11.21%  11.52%  11.59%  11.35%
Total regulatory capital to risk-weighted assets (1)  13.93%  14.02%  13.79%  14.09%  14.85%  12.70%  12.79%  12.54%
Book value per common share $ 31.24  $30.30  $29.58  $32.68  $32.40  $32.00  $31.43  $30.82 
Outstanding common shares  47,056,777   47,025,779   47,001,022   34,164,672   34,970,370   35,625,822   35,614,953   35,557,110 
                 
         (1) Estimated ratio at December 31, 2020.               



Sandy Spring Bancorp, Inc. and Subsidiaries                
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED                
                 
   2020   2019 
(Dollars in thousands) December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
Non-performing assets:                
Loans 90 days past due:                
Commercial real estate:                
Commercial investor real estate $ 133  $-  $775  $-  $-  $1,201  $1,248  $- 
Commercial owner-occupied real estate  -   -   515   -   -   -   -   90 
Commercial AD&C  -   -   -   -   -   -   -   - 
Commercial business  161   93   -   -   -   17   -   - 
Residential real estate:                
Residential mortgage  480   320   138   8   -   -   -   221 
Residential construction  -   -   -   -   -   -   -   - 
Consumer  -   1   -   -   -   -   -   - 
Total loans 90 days past due  774   414   1,428   8   -   1,218   1,248   311 
Non-accrual loans:                
Commercial real estate:                
Commercial investor real estate  45,227   26,784   26,482   17,770   8,437   8,454   6,409   6,071 
Commercial owner-occupied real estate  11,561   6,511   6,729   4,074   4,148   3,810   3,766   5,992 
Commercial AD&C  15,044   1,678   2,957   829   829   829   1,990   3,306 
Commercial business  22,933   17,659   20,246   10,834   8,450   6,393   7,083   8,013 
Residential real estate:                
Residential mortgage  10,212   11,296   11,724   12,271   12,661   12,574   10,625   9,704 
Residential construction  -   -   -   -   -   -   -   156 
Consumer  7,384   7,493   7,800   5,596   4,107   4,561   4,439   4,081 
Total non-accrual loans  112,361   71,421   75,938   51,374   38,632   36,621   34,312   37,323 
Total restructured loans - accruing  2,317   2,854   2,553   2,575   2,636   2,287   2,133   2,479 
Total non-performing loans  115,452   74,689   79,919   53,957   41,268   40,126   37,693   40,113 
Other assets and other real estate owned (OREO)  1,455   1,389   1,389   1,416   1,482   1,482   1,486   1,410 
Total non-performing assets $ 116,907  $76,078  $81,308  $55,373  $42,750  $41,608  $39,179  $41,523 
                 
  For the Quarter Ended,
(Dollars in thousands) December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019
Analysis of non-accrual loan activity:                
Balance at beginning of period $ 71,421  $75,938  $51,374  $38,632  $36,621  $34,312  $37,323  $33,583 
Purchased credit deteriorated loans designated as non-accrual  -   -   -   13,084   -   -   -   - 
Non-accrual balances transferred to OREO  (70)  -   -   -   -   -   (195)  - 
Non-accrual balances charged-off  (513)  (144)  (162)  (575)  (454)  (705)  (604)  (227)
Net payments or draws  (13,212)  (4,248)  (1,881)  (1,860)  (2,916)  (2,903)  (5,517)  (1,786)
Loans placed on non-accrual  54,735   893   27,289   2,369   5,381   6,015   3,396   6,202 
Non-accrual loans brought current  -   (1,018)  (682)  (276)  -   (98)  (91)  (449)
Balance at end of period $ 112,361  $71,421  $75,938  $51,374  $38,632  $36,621  $34,312  $37,323 
                 
Analysis of allowance for credit losses:                
Balance at beginning of period $ 170,314  $163,481  $85,800  $56,132  $54,992  $54,024  $53,089  $53,486 
Transition impact of adopting ASC 326  -   -   -   2,983   -   -   -   - 
Initial allowance on purchased credit deteriorated loans  -   -   -   2,762   -   -   -   - 
Initial allowance on acquired PCD loans  -   -   18,628   -   -   -   -   - 
Provision/ (credit) for credit losses  (4,489)  7,003   58,686   24,469   1,655   1,524   1,633   (128)
Less loans charged-off, net of recoveries:                
Commercial real estate:                
Commercial investor real estate  379   21   (4)  -   (3)  (3)  (3)  (7)
Commercial owner-occupied real estate  -   -   -   -   -   -   -   - 
Commercial AD&C  -   -   -   -   -   (224)  (4)  - 
Commercial business  56   88   (463)  108   15   389   735   7 
Residential real estate:                                
Residential mortgage  37   (6)  15   333   264   209   (10)  89 
Residential construction  (1)  (2)  (1)  (2)  (2)  (2)  (2)  (2)
Consumer  (13)  69   86   107   241   187   (18)  182 
Net charge-offs/ (recoveries)  458   170   (367)  546   515   556   698   269 
Balance at the end of period $ 165,367  $170,314  $163,481  $85,800  $56,132  $54,992  $54,024  $53,089 
                 
Asset quality ratios:                
Non-performing loans to total loans  1.11%  0.72%  0.77%  0.80%  0.62%  0.61%  0.58%  0.61%
Non-performing assets to total assets  0.91%  0.60%  0.61%  0.62%  0.50%  0.49%  0.47%  0.50%
Allowance for credit losses to loans  1.59%  1.65%  1.58%  1.28%  0.84%  0.83%  0.82%  0.81%
Allowance for credit losses to non-performing loans  143.23%  228.03%  204.56%  159.02%  136.02%  137.05%  143.33%  132.35%
Annualized net charge-offs/ (recoveries) to average loans  0.02%  0.01%  (0.01)%  0.03%  0.03%  0.03%  0.04%  0.02%
                 


Sandy Spring Bancorp, Inc. and Subsidiaries            
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
             
  Three Months Ended December 31,
   2020   2019 
(Dollars in thousands and tax-equivalent) Average Balances Interest (1) Annualized Average Yield/Rate Average Balances Interest (1) Annualized Average Yield/Rate
Assets            
Commercial investor real estate loans $ 3,599,648  $ 38,867 4.30% $2,092,478  $24,982 4.74%
Commercial owner-occupied real estate loans  1,643,817   19,440 4.70   1,274,782   15,606 4.86 
Commercial AD&C loans  1,017,304   10,400 4.07   695,817   9,388 5.35 
Commercial business loans  2,189,828   20,015 3.64   765,159   9,821 5.09 
Total commercial loans  8,450,597   88,722 4.18   4,828,236   59,797 4.91 
Residential mortgage loans  1,136,989   10,102 3.55   1,169,623   11,030 3.77 
Residential construction loans  180,494   1,698 3.74   149,690   1,650 4.37 
Consumer loans  515,202   4,806 3.71   477,572   5,594 4.65 
Total residential and consumer loans  1,832,685   16,606 3.62   1,796,885   18,274 4.05 
Total loans (2)  10,283,282   105,328 4.08   6,625,121   78,071 4.68 
Loans held for sale  68,255   592 3.48   50,208   462 3.68 
Taxable securities  1,138,767   4,925 1.73   816,008   5,704 2.79 
Tax-exempt securities (3)  279,916   1,971 2.81   186,684   1,576 3.38 
Total investment securities (4)  1,418,683   6,896 1.94   1,002,692   7,280 2.90 
Interest-bearing deposits with banks  111,820   27 0.10   181,394   724 1.58 
Federal funds sold  502   - 0.10   421   2 1.66 
Total interest-earning assets  11,882,542   112,843 3.78   7,859,836   86,539 4.38 
             
Less: allowance for credit losses  (171,026)      (54,653)    
Cash and due from banks  111,565       68,011     
Premises and equipment, net  58,060       59,277     
Other assets  764,188       610,366     
Total assets $ 12,645,329      $8,542,837     
             
Liabilities and Stockholders' Equity            
Interest-bearing demand deposits $ 1,195,307  $ 293 0.10% $800,263  685 0.34%
Regular savings deposits  406,637   57 0.06   325,540   94 0.11 
Money market savings deposits  3,194,999   1,870 0.23   1,875,045   5,820 1.23 
Time deposits  1,777,472   4,190 0.94   1,531,640   8,124 2.10 
Total interest-bearing deposits  6,574,415   6,410 0.39   4,532,488   14,723 1.29 
Other borrowings  377,362   234 0.25   133,716   216 0.64 
Advances from FHLB  428,278   2,730 2.54   516,101   3,189 2.45 
Subordinated debentures  229,774   2,590 4.51   143,998   1,679 4.66 
Total borrowings  1,035,414   5,554 2.13   793,815   5,084 2.55 
Total interest-bearing liabilities  7,609,829   11,964 0.63   5,326,303   19,807 1.48 
             
Noninterest-bearing demand deposits  3,424,729       1,927,063     
Other liabilities  176,871       152,647     
Stockholders' equity  1,433,900       1,136,824     
Total liabilities and stockholders' equity $ 12,645,329      $8,542,837     
             
Net interest income and spread   $ 100,879 3.15%   $66,732 2.90%
Less: tax-equivalent adjustment    1,052      1,149  
Net interest income   $ 99,827     $65,583  
             
Interest income/earning assets     3.78%     4.38%
Interest expense/earning assets     0.40      1.00 
Net interest margin     3.38%     3.38%
             
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.54% and 26.13% for 2020 and 2019, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.1 million in both 2020 and 2019.
(2) Non-accrual loans are included in the average balances.           
(3) Includes only investments that are exempt from federal taxes.          
(4) Available for sale investments are presented at amortized cost.          



Sandy Spring Bancorp, Inc. and Subsidiaries            
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED        
             
  Year Ended December 31,
   2020   2019 
(Dollars in thousands and tax-equivalent) Average Balances Interest (1) Annualized Average Yield/Rate Average Balances Interest (1) Annualized Average Yield/Rate
Assets            
Commercial investor real estate loans $ 3,210,527  $ 142,105 4.43% $2,000,571  $99,410 4.97%
Commercial owner-occupied real estate loans  1,560,223   73,655 4.72   1,239,289   60,581 4.89 
Commercial AD&C loans  906,414   40,262 4.44   677,536   39,241 5.79 
Commercial business loans  1,781,197   69,633 3.91   772,052   41,300 5.35 
Total commercial loans  7,458,361   325,655 4.37   4,689,448   240,532 5.13 
Residential mortgage loans  1,168,668   43,001 3.68   1,214,625   46,438 3.82 
Residential construction loans  165,567   6,683 4.04   168,797   7,232 4.28 
Consumer loans  524,897   20,356 3.88   496,199   24,391 4.92 
Total residential and consumer loans  1,859,132   70,040 3.77   1,879,621   78,061 4.15 
Total loans (2)  9,317,493   395,695 4.25   6,569,069   318,593 4.85 
Loans held for sale  52,893   1,686 3.19   41,905   1,607 3.84 
Taxable securities  1,106,315   22,482 2.03   768,521   22,873 2.98 
Tax-exempt securities (3)  244,168   7,378 3.02   211,236   7,403 3.50 
Total investment securities (4)  1,350,483   29,860 2.21   979,757   30,276 3.09 
Interest-bearing deposits with banks  246,155   446 0.18   108,534   2,129 1.96 
Federal funds sold  403   1 0.28   572   10 1.76 
Total interest-earning assets  10,967,427   427,688 3.90   7,699,837   352,615 4.58 
             
Less: allowance for credit losses  (128,793)      (53,746)    
Cash and due from banks  122,826       65,181     
Premises and equipment, net  59,031       60,595     
Other assets  754,605       595,272     
Total assets $ 11,775,096      $8,367,139     
             
Liabilities and Stockholders' Equity            
Interest-bearing demand deposits $ 1,062,474  $ 1,812 0.17% $750,606  1,990 0.27%
Regular savings deposits  374,196   269 0.07   329,158   415 0.13 
Money market savings deposits  2,741,230   12,424 0.45   1,751,989   25,437 1.45 
Time deposits  1,924,429   27,146 1.41   1,604,996   33,839 2.11 
Total interest-bearing deposits  6,102,329   41,651 0.68   4,436,749   61,681 1.39 
Other borrowings  509,523   1,965 0.39   152,088   1,161 0.76 
Advances from FHLB  545,652   6,593 1.21   645,587   16,578 2.57 
Subordinated debentures  224,306   10,192 4.54   64,251   3,141 4.89 
Total borrowings  1,279,481   18,750 1.47   861,926   20,880 2.42 
Total interest-bearing liabilities  7,381,810   60,401 0.82   5,298,675   82,561 1.56 
             
Noninterest-bearing demand deposits  2,880,294       1,830,008     
Other liabilities  173,501       130,146     
Stockholders' equity  1,339,491       1,108,310     
Total liabilities and stockholders' equity $ 11,775,096      $8,367,139     
             
Net interest income and spread   $ 367,287 3.08%   $270,054 3.02%
Less: tax-equivalent adjustment    4,128      4,746  
Net interest income   $ 363,159     $265,308  
             
Interest income/earning assets     3.90%     4.58%
Interest expense/earning assets     0.55      1.07 
Net interest margin     3.35%     3.51%
             
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.54% and 26.13% for 2020 and 2019, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.1 million and $4.7 million 2020 and 2019, respectively.
(2) Non-accrual loans are included in the average balances.           
(3) Includes only investments that are exempt from federal taxes.          
(4) Available for sale investments are presented at amortized cost.          

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