• Sandy Spring Bancorp Reports Third Quarter Earnings of $20.7 Million

    Source: Nasdaq GlobeNewswire / 24 Oct 2023 06:00:02   America/Chicago

    OLNEY, Md., Oct. 24, 2023 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income of $20.7 million ($0.46 per diluted common share) for the quarter ended September 30, 2023, compared to net income of $24.7 million ($0.55 per diluted common share) for the second quarter of 2023 and $33.6 million ($0.75 per diluted common share) for the third quarter of 2022. The decline in the current quarter's net income compared to the linked quarter was the result of the one-time pension settlement expense associated with the previously disclosed termination of the Company's pension plan, coupled with lower net interest income. These negative factors were partially offset by lower provision for credit losses and a decline in salaries and employee benefits expense after excluding the impact of the pension settlement expense.

    Current quarter core earnings were $27.8 million ($0.62 per diluted common share), compared to $27.1 million ($0.60 per diluted common share) for the quarter ended June 30, 2023 and $35.7 million ($0.80 per diluted common share) for the quarter ended September 30, 2022. Core earnings exclude the after-tax impact of amortization of intangibles, investment securities gains or losses and non-recurring or extraordinary items. The increase in core earnings during the current quarter as compared to the previous quarter was a result of lower provision for credit losses, lower salaries and employee benefits expense, and lower marketing expense, offset by reduced net interest income.

    “This quarter we demonstrated the effectiveness of our core funding strategies and ability to expand our reach in the Greater Washington region. We added over 1,500 clients in the quarter, which reflects over 1% growth in our client base,” said Daniel J. Schrider, Chairman, President and CEO of Sandy Spring Bank. "Additionally, we grew the Commercial & Industrial portfolio, reduced our Commercial Real Estate concentration, and maintained our credit quality."

    “We are focused on capitalizing on this momentum to deepen existing client relationships and welcome new clients to Sandy Spring Bank,” Schrider added.

    Third Quarter Highlights

    • Total assets at September 30, 2023 increased by 1% to $14.1 billion compared to $14.0 billion at June 30, 2023.
    • Total loans declined by $69.3 million or 1% to $11.3 billion at September 30, 2023 compared to $11.4 billion at June 30, 2023. During the current quarter, the Company reduced its concentration in the commercial real estate segments by $110.3 million, while commercial business loans and lines increased $31.1 million. The total residential mortgage loan portfolio grew $16.0 million mainly due to the migration of construction loans into the portfolio.
    • Deposits increased $192.1 million or 2% to $11.2 billion at September 30, 2023 compared to $11.0 billion at June 30, 2023, as interest-bearing deposits increased $258.1 million or 3%, while noninterest-bearing deposits declined $66.0 million or 2%. Growth within interest-bearing deposit categories was driven by savings accounts and core time deposits, which increased by $277.4 million and $263.7 million, respectively. These increases were partially offset by the $155.8 million decrease in brokered time deposits, as the Company reduced its reliance on wholesale funding sources, and the $177.5 million decrease in money market accounts.
    • Credit quality metrics remained at low levels during the current quarter. The ratio of non-performing loans to total loans was 0.46% at September 30, 2023 compared to 0.44% at June 30, 2023 and 0.40% at September 30, 2022. Net charge-off activity during the current quarter was insignificant.
    • Total borrowings declined in the current quarter by $57.8 million or 4% over the amounts at June 30, 2023, mainly as a result of a $50.0 million reduction in FHLB advances.
    • Net interest income for the third quarter of 2023 declined $5.4 million or 6% compared to the previous quarter and $27.9 million or 25% compared to the third quarter of 2022. During the recent quarter, the $4.3 million growth in interest income was more than offset by the $9.7 million increase in interest expense, a result of the increased rates paid on deposits.
    • The net interest margin was 2.55% for the third quarter of 2023 compared to 2.73% for the second quarter of 2023 and 3.53% for the third quarter of 2022. The decline in the net interest margin was the result of higher rates paid on interest-bearing liabilities, driven by higher market rates, competition for deposits, and customer movement of excess funds out of noninterest-bearing accounts, outpacing the increase in the yield on interest-earning assets. Compared to the linked quarter, the rate paid on interest-bearing liabilities rose 36 basis points, while the yield on interest-earning assets increased 8 basis points, resulting in the quarterly margin compression of 18 basis points.
    • Provision for credit losses directly attributable to the funded loan portfolio for the current quarter was $3.2 million compared to $4.5 million in the previous quarter and $14.1 million in the prior year quarter. The provision for the current quarter was the product of increases in individual reserves on a few commercial lending relationships, which were partially offset by a qualitative adjustment related to reduced probability of an economic recession. In addition, during the current quarter the Company reduced its reserve for unfunded commitments by $0.8 million as a result of higher utilization of lines of credit.
    • Non-interest income for the third quarter of 2023 increased by 1% or $0.2 million compared to the linked quarter and grew by 3% or $0.5 million compared to the prior year quarter. The quarter-over-quarter increase was mainly driven by higher wealth management income and higher lending-related fees, offset by lower BOLI income.
    • Non-interest expense for the third quarter of 2023 increased $3.3 million or 5% compared to the second quarter of 2023 and $6.7 million or 10% compared to the prior year quarter. The current quarter included $8.2 million of pension settlement expense related to the termination of the Company's pension plan, while the previous quarter included $1.9 million of severance related expense associated with staffing adjustments. Excluding these items from the current and previous quarters, total non-interest expense declined by $2.9 million or 4% driven by lower salaries and employee benefits expense and lower marketing expense.
    • Return on average assets (“ROA”) for the quarter ended September 30, 2023 was 0.58% and return on average tangible common equity (“ROTCE”) was 7.42% compared to 0.70% and 8.93%, respectively, for the second quarter of 2023 and 0.99% and 12.49%, respectively, for the third quarter of 2022. On a non-GAAP basis, the current quarter's core ROA was 0.78% and core ROTCE was 9.51% compared to 0.77% and 9.43%, respectively, for the previous quarter and 1.05% and 12.86%, respectively, for the third quarter of 2022.
    • The GAAP efficiency ratio was 70.72% for the third quarter of 2023, compared to 64.22% for the second quarter of 2023 and 50.66% for the third quarter of 2022. The non-GAAP efficiency ratio was 60.91% for the third quarter of 2023 compared to 60.68% for the second quarter of 2023 and 48.18% for the prior year quarter. The increase in both the GAAP and non-GAAP efficiency ratios (reflecting a decrease in efficiency) in the current quarter compared to the previous quarter and the third quarter of the prior year was the result of declines in net revenue from the prior periods coupled with the growth in non-interest expense.

    Balance Sheet and Credit Quality

    Total assets were $14.1 billion at September 30, 2023, as compared to $14.0 billion at June 30, 2023. Total loans declined by $69.3 million or 1% to $11.3 billion at September 30, 2023 compared to $11.4 billion at June 30, 2023. Total commercial real estate and business loans declined $79.2 million quarter-over-quarter due to a $107.1 million or 10% decline in the AD&C loan portfolio, while investor and owner-occupied commercial real estate loan portfolios were relatively unchanged. Commercial business loans and lines increased $31.1 million or 2%. Total residential mortgage loans grew $16.0 million or 1% mainly due to the migration of construction loans into the residential mortgage portfolio. Overall, the loan portfolio mix remained relatively unchanged compared to the previous quarter.

    Deposits increased $192.1 million or 2% to $11.2 billion at September 30, 2023 compared to $11.0 billion at June 30, 2023. During this period total interest-bearing deposits increased $258.1 million or 3%, while noninterest-bearing deposits declined $66.0 million or 2%. Growth within interest-bearing deposit categories was driven by savings accounts and core time deposits, which increased by $277.4 million and $263.7 million, respectively. These increases were partially offset by the $155.8 million decrease in brokered time deposits, as the Company reduced its reliance on wholesale funding sources, and the $177.5 million decrease in money market accounts. Total deposits, excluding brokered deposits, increased by $349.5 million or 4% quarter-over-quarter and represented 90% of the total deposits as of September 30, 2023 compared to 88% at June 30, 2023, reflecting the continued stability of the core deposit base. The deposit growth experienced during the current quarter resulted in the loan to deposit ratio declining to 101% at September 30, 2023 from 104% at June 30, 2023. Total uninsured deposits at September 30, 2023 were approximately 33% of the total deposits. The Company offers its customers reciprocal deposit arrangements, which provide FDIC deposit insurance for accounts that would otherwise exceed deposit insurance limits. During the quarter ended September 30, 2023, balances in the Company's reciprocal deposit accounts increased by $131.6 million.

    Total borrowings declined by $57.8 million or 4% at September 30, 2023 as compared to the previous quarter, driven by a $50.0 million reduction in FHLB advances. The outstanding balance of borrowings through the Federal Reserve Bank's Bank Term Funding Program remained unchanged at $300.0 million at September 30, 2023. At September 30, 2023, contingent liquidity, which consists of available FHLB borrowings, fed funds, funds through the Federal Reserve Bank's discount window and the Bank Term Funding Program, as well as excess cash and unpledged investment securities totaled $6.1 billion or 168% of uninsured deposits. At September 30, 2023, total cash and cash equivalents were $717.6 million, an increase of $287.5 million or 67% compared to the linked quarter, primarily a result of strong deposit growth.

    The tangible common equity ratio decreased to 8.42% of tangible assets at September 30, 2023, compared to 8.51% at June 30, 2023. This decrease reflected the impact of higher tangible assets while tangible common equity remained relatively unchanged quarter-over-quarter, as net retained earnings were offset by an increase in unrealized losses on available-for-sale investment securities.

    At September 30, 2023, the Company had a total risk-based capital ratio of 14.85%, a common equity tier 1 risk-based capital ratio of 10.83%, a tier 1 risk-based capital ratio of 10.83%, and a tier 1 leverage ratio of 9.50%. All of these ratios remain well in excess of the mandated minimum regulatory requirements.

    Non-performing loans include non-accrual loans and accruing loans 90 days or more past due. Overall credit quality remained stable at September 30, 2023 compared to June 30, 2023, as the ratio of non-performing loans to total loans was 0.46% compared to 0.44%. These levels of non-performing loans compare to 0.40% at September 30, 2022 and continue to indicate stable credit quality during a period of economic uncertainty. At September 30, 2023, non-performing loans totaled $51.8 million, compared to $49.5 million at June 30, 2023 and $44.5 million at September 30, 2022. Total net charge-offs for the current quarter amounted to $0.1 million compared to $1.8 million for the second quarter of 2023 and $0.5 million of net recoveries for the third quarter of 2022.

    At September 30, 2023, the allowance for credit losses was $123.4 million or 1.09% of outstanding loans and 238% of non-performing loans, compared to $120.3 million or 1.06% of outstanding loans and 243% of non-performing loans at the end of the previous quarter and $128.3 million or 1.14% of outstanding loans and 289% of non-performing loans at the end of the third quarter of 2022. The increase in the allowance for the current quarter compared to the previous quarter mainly reflects increases in individual reserves recorded on a few commercial real estate relationships, partially offset by the reduction of the qualitative adjustment related to the probability of an economic recession.

    Income Statement Review

    Quarterly Results

    Net income was $20.7 million ($0.46 per diluted common share) for the three months ended September 30, 2023 compared to $24.7 million ($0.55 per diluted common share) for the three months ended June 30, 2023 and $33.6 million ($0.75 per diluted common share) for the prior year quarter. The current quarter's core earnings were $27.8 million ($0.62 per diluted common share), compared to $27.1 million ($0.60 per diluted common share) for the previous quarter and $35.7 million ($0.80 per diluted common share) for the quarter ended September 30, 2022. The decline in the current quarter's net income compared to the previous quarter was the result of one-time pension settlement expense of $8.2 million, as the Company completed the termination of its pension plan, coupled with lower net interest income, partially offset by lower provision for credit losses and lower salaries expense. The increase in core earnings during the current quarter as compared to the previous quarter was a result of lower provision for credit losses, lower salaries and employee benefits expense, and lower marketing expense, offset by reduced net interest income.

    Net interest income for the third quarter of 2023 decreased $5.4 million or 6% compared to the previous quarter and $27.9 million or 25% compared to the third quarter of 2022. Both quarterly and year-over-year decreases in net interest income were driven by higher interest expense, a result of higher funding costs, which outpaced growth in interest income. The rising interest rate environment was primarily responsible for a $32.0 million year-over-year increase in interest income. This growth in interest income was more than offset by the $59.9 million year-over-year growth in interest expense as funding costs have also risen in response to the rising rate environment and significant competition for deposits. Interest income growth occurred in all categories of commercial loans and, to a lesser degree, in residential mortgage loans, consumer loans and investment securities income.

    The net interest margin was 2.55% for the third quarter of 2023 compared to 2.73% for the second quarter of 2023 and 3.53% for the third quarter of 2022. The contraction of the net interest margin for the current quarter reflects the higher rate paid on interest-bearing liabilities, which outpaced the increase in the yield on interest-earning assets. The overall rate and yield increases were driven by the multiple federal funds rate increases that occurred over the preceding twelve months coupled with competition for deposits in the market, and customer movement of excess funds out of noninterest-bearing accounts into higher yielding products. As compared to the prior year quarter, the yield on interest-earning assets increased 76 basis points while the rate paid on interest-bearing liabilities rose 241 basis points, resulting in the margin compression of 98 basis points.

    The total provision for credit losses was $2.4 million for the third quarter of 2023 compared to $5.1 million for the previous quarter and $18.9 million for the third quarter of 2022. The provision for credit losses directly attributable to the funded loan portfolio was $3.2 million for the current quarter compared to $4.5 million for the second quarter of 2023 and the prior year quarter’s provision of $14.1 million. The current quarter's provision mainly reflects an increase in individual reserves established on a few commercial real estate relationships.

    Non-interest income for the third quarter of 2023 increased by 1% or $0.2 million compared to the linked quarter and grew by 3% or $0.5 million compared to the prior year quarter. The current quarter's increase in non-interest income as compared to the previous quarter was mainly driven by higher wealth management income coupled with higher lending-related fees, partially offset by lower BOLI income due to mortality proceeds received in the prior quarter.

    Non-interest expense for the third quarter of 2023 increased $3.3 million or 5% compared to the second quarter of 2023 and $6.7 million or 10% compared to the third quarter of 2022. The current quarter included $8.2 million of pension settlement expense related to the termination of the Company's pension plan, while the previous quarter included $1.9 million of severance related expense associated with staffing adjustments. Excluding these items from the current and previous quarters, total non-interest expense declined by $2.9 million or 4% driven by lower salaries and employee benefits and lower marketing expense. Excluding pension settlement expense from the current quarter, non-interest expense declined by $1.5 million or 2% year-over-year. This decline is primarily attributable to lower compensation expense, partially offset by higher professional fees related to the Company's investments in technology projects, and higher FDIC insurance expense, due to an increase in the assessment rate for all banks that became effective in 2023.

    For the third quarter of 2023, the GAAP efficiency ratio was 70.72% compared to 64.22% for the second quarter of 2023 and 50.66% for the third quarter of 2022. The GAAP efficiency ratio rose from the prior year quarter primarily as a result of the 21% decrease in GAAP revenue in combination with the 10% increase in GAAP non-interest expense. The non-GAAP efficiency ratio was 60.91% for the current quarter as compared to 60.68% for the second quarter of 2023 and 48.18% for the third quarter of 2022. The increase in the non-GAAP efficiency ratio (reflecting a decrease in efficiency) from the third quarter of the prior year to the current year quarter was primarily the result of the 21% decline in non-GAAP revenue, while non-GAAP expenses were relatively unchanged.

    ROA for the quarter ended September 30, 2023 was 0.58% and ROTCE was 7.42% compared to 0.70% and 8.93%, respectively, for the second quarter of 2023 and 0.99% and 12.49%, respectively, for the third quarter of 2022. On a non-GAAP basis, the current quarter's core ROA was 0.78% and core ROTCE was 9.51% compared to 0.77% and 9.43% for the second quarter of 2023 and 1.05% and 12.86%, respectively, for the third quarter of 2022.

    Year-to-Date Results

    The Company recorded net income of $96.7 million for the nine months ended September 30, 2023 compared to net income of $132.3 million for the same period in the prior year. Core earnings were $107.2 million for the nine months ended September 30, 2023 compared to $125.0 million for the same period in the prior year. Year-to-date net income declined as a result of the gain recognized on the sale of the Company's insurance segment during the prior year in combination with lower net interest income and higher non-interest expense, partially offset by lower provision for credit losses as a result of significant credit recorded during the first quarter of the current year.

    For the nine months ended September 30, 2023, net interest income decreased $47.5 million compared to the prior year as a result of the $169.0 million increase in interest expense, partially offset by the $121.5 million increase in interest income. The increase in interest expense was driven by the interest expense on deposits, primarily associated with money market and time deposit accounts and, to a lesser degree, FHLB and Federal Reserve Bank borrowings. The net interest margin declined to 2.75% for the nine months ended September 30, 2023, compared to 3.50% for the prior year, primarily as a result of higher funding cost due to the rising interest rate environment and market competition for deposits during the period.

    The provision for credit losses for the nine months ended September 30, 2023 amounted to a credit of $14.1 million as compared to a charge of $23.6 million for 2022. Credit to the provision for the nine months ended September 30, 2023 was a reflection of the improving regional forecasted unemployment rate, observed during the early part of the current year, coupled with the continued strong credit quality performance of the loan portfolio.

    For the nine months ended September 30, 2023, non-interest income decreased 31% to $50.5 million compared to $72.7 million for 2022. During the prior year, the Company realized a $16.5 million gain on the sale of its insurance segment. Excluding the gain, non-interest income decreased 10% or $5.7 million, driven by a $2.9 million decrease in insurance commissions, a $2.6 million decrease in bank card fees and a $0.6 million decrease in income from mortgage banking activities. Insurance commission income declined due to the disposition of the Company's insurance business during the second quarter of the prior year. Fees from bank cards declined as a result of regulatory restrictions on transaction fees effective in the second half of the prior year. The decline in income from mortgage banking activities is the result of the rising interest rate environment, which continues to dampen home sales and refinancing activity. These decreases in non-interest income year-over-year were partially offset by a $0.8 million increase in BOLI mortality-related income.

    Non-interest expense increased 8% to $207.9 million for the nine months ended September 30, 2023, compared to $192.9 million for 2022. Current year expense included pension settlement expense of $8.2 million and severance expense of $1.9 million, while the prior year included contingent earn-out expense associated with the 2020 acquisition of Rembert Pendleton Jackson of $1.2 million and merger, acquisition and disposal expense of $1.1 million. Excluding these items, non-interest expense increased by $7.2 million or 4% in the current year over the prior year. The drivers of the increase in non-interest expense were a $5.8 million increase in professional fees, a $3.5 million increase in FDIC expense, and a $1.4 million increase in software amortization expense. Excluding the pension settlement expense, total salaries and benefits expense declined by $3.5 million from the prior year period. Year-over-year increases in both professional fees and software amortization expense were mainly associated with the Company's investments in technology and software projects. The increase in FDIC insurance expense was a result of the two basis points increase in the assessment rate for all banks that became effective in 2023.

    For the nine months ended September 30, 2023, the GAAP efficiency ratio was 64.29% compared to 49.08% for the same period in 2022. The non-GAAP efficiency ratio for the current year was 59.42% compared to the 49.09% for the prior year. The growth in the current year’s non-GAAP efficiency ratio compared to the prior year, indicating a decline in efficiency, was the result of the 14% decrease in non-GAAP revenue combined with the 4% 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 goodwill and other intangible assets.
    • The non-GAAP efficiency ratio excludes amortization of intangible assets, investment securities gains/(losses), merger, acquisition and disposal expense, gain on disposal of assets, pension settlement expense, severance expense and contingent payment expense, and includes tax-equivalent income.
    • Core earnings and the related measures of core earnings per diluted common share, core return on average assets and core return on average tangible common equity reflect net income exclusive of amortization of intangible assets, pension settlement expense, investment securities gains/(losses) and other non-recurring or extraordinary items, on a net of tax basis.
    • Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.

    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 that 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 third 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 1-833-470-1428. Please use the following access code: 724249. 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 November 7, 2023. A replay of the teleconference will be available through the same time period by calling 1-866-813-9403 under conference call number 896518.

    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 50 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of wealth management services.

    Category: Webcast
    Source: Sandy Spring Bancorp, Inc.
    Code: SASR-E

    For additional information or questions, please contact:
    Daniel J. Schrider, Chair, 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, Senior Vice President
    301-570-8331
    jschell@sandyspringbank.com

    Forward-Looking Statements

    Sandy Spring Bancorp’s forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2022 and its Form 10-Q for the quarter ended June 30, 2023, including in the Risk Factors section of those reports, 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
    September 30,
     %
    Change
     Nine Months Ended
    September 30,
     %
    Change
    (Dollars in thousands, except per share data) 2023 2022  2023 2022 
    Results of operations:            
    Net interest income $85,081  $112,960  (25)% $272,854  $320,361  (15)%
    Provision/ (credit) for credit losses  2,365   18,890  (87)  (14,116)  23,571  N/M 
    Non-interest income  17,391   16,882  3   50,518   72,722  (31)
    Non-interest expense  72,471   65,780  10   207,912   192,918  8 
    Income before income tax expense  27,636   45,172  (39)  129,576   176,594  (27)
    Net income  20,746   33,584  (38)  96,744   132,319  (27)
                 
    Net income attributable to common shareholders $20,719  $33,470  (38) $96,552  $131,744  (27)
    Pre-tax pre-provision net income (1) $30,001  $64,062  (53) $115,460  $200,165  (42)
                 
    Return on average assets  0.58%  0.99%    0.92%  1.36%  
    Return on average common equity  5.35%  8.96%    8.50%  11.90%  
    Return on average tangible common equity (1)  7.42%  12.49%    11.67%  16.54%  
    Net interest margin  2.55%  3.53%    2.75%  3.50%  
    Efficiency ratio - GAAP basis (2)  70.72%  50.66%    64.29%  49.08%  
    Efficiency ratio - Non-GAAP basis (2)  60.91%  48.18%    59.42%  49.09%  
                 
    Per share data:            
    Basic net income per common share $0.46  $0.75  (39)% $2.16  $2.93  (26)%
    Diluted net income per common share $0.46  $0.75  (38) $2.15  $2.92  (26)
    Weighted average diluted common shares  44,960,455   44,780,560     44,912,803   45,098,073   
    Dividends declared per share $0.34  $0.34    $1.02  $1.02   
    Book value per common share $34.26  $32.52  5  $34.26  $32.52  5 
    Tangible book value per common share (1) $25.80  $23.90  8  $25.80  $23.90  8 
    Outstanding common shares  44,895,158   44,644,269  1   44,895,158   44,644,269  1 
                 
    Financial condition at period-end:            
    Investment securities $1,392,078  $1,587,279  (12)% $1,392,078  $1,587,279  (12)%
    Loans  11,300,292   11,218,813  1   11,300,292   11,218,813  1 
    Assets  14,135,085   13,765,597  3   14,135,085   13,765,597  3 
    Deposits  11,151,012   10,749,486  4   11,151,012   10,749,486  4 
    Stockholders' equity  1,537,914   1,451,862  6   1,537,914   1,451,862  6 
                 
    Capital ratios:            
    Tier 1 leverage (3)  9.50%  9.33%    9.50%  9.33%  
    Common equity tier 1 capital to risk-weighted assets (3)  10.83%  10.18%    10.83%  10.18%  
    Tier 1 capital to risk-weighted assets (3)  10.83%  10.18%    10.83%  10.18%  
    Total regulatory capital to risk-weighted assets (3)  14.85%  14.15%    14.85%  14.15%  
    Tangible common equity to tangible assets (4)  8.42%  7.98%    8.42%  7.98%  
    Average equity to average assets  10.92%  10.99%    10.84%  11.41%  
                 
    Credit quality ratios:            
    Allowance for credit losses to loans  1.09%  1.14%    1.09%  1.14%  
    Non-performing loans to total loans  0.46%  0.40%    0.46%  0.40%  
    Non-performing assets to total assets  0.37%  0.33%    0.37%  0.33%  
    Allowance for credit losses to non-performing loans  238.32%  288.50%    238.32%  288.50%  
    Annualized net charge-offs/ (recoveries) to average loans (5)  % (0.02)%    0.02%  %  


     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 Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, merger, acquisition and disposal expense, severance expense, pension settlement expense and contingent payment expense from non-interest expense; and investment securities gains/ (losses) and gain on disposal of assets 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 September 30, 2023.
     (4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding goodwill and other intangible assets into stockholders' equity after deducting goodwill and other intangible assets. 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 (CONTINUED)
    OPERATING EARNINGS - METRICS
     
      Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
    (Dollars in thousands) 2023 2022 2023 2022
    Core earnings (non-GAAP):        
    Net income (GAAP) $20,746  $33,584  $96,744  $132,319 
    Plus/ (less) non-GAAP adjustments (net of tax)(1):        
    Merger, acquisition and disposal expense           796 
    Amortization of intangible assets  932   1,076   2,851   3,284 
    Severance expense        1,445    
    Pension settlement expense  6,088      6,088    
    Gain on disposal of assets     108      (12,309)
    Investment securities gains     (2)     (36)
    Contingent payment expense     929   27   929 
    Core earnings (Non-GAAP) $27,766  $35,695  $107,155  $124,983 
             
    Core earnings per diluted common share (non-GAAP):        
    Weighted average common shares outstanding - diluted (GAAP)  44,960,455   44,780,560   44,912,803   45,098,073 
             
    Earnings per diluted common share (GAAP) $0.46  $0.75  $2.15  $2.92 
    Core earnings per diluted common share (non-GAAP) $0.62  $0.80  $2.39  $2.77 
             
    Core return on average assets (non-GAAP):        
    Average assets (GAAP) $14,086,342  $13,521,595  $14,043,925  $13,033,256 
             
    Return on average assets (GAAP)  0.58%  0.99%  0.92%  1.36%
    Core return on average assets (non-GAAP)  0.78%  1.05%  1.02%  1.28%
             
    Return/ Core return on average tangible common equity (non-        
    Net Income (GAAP) $20,746  $33,584  $96,744  $132,319 
    Plus: Amortization of intangible assets (net of tax)  932   1,076   2,851   3,284 
    Net income before amortization of intangible assets $21,678  $34,660  $99,595  $135,603 
             
    Average total stockholders' equity (GAAP) $1,538,553  $1,486,427  $1,522,153  $1,486,920 
    Average goodwill  (363,436)  (363,436)  (363,436)  (367,190)
    Average other intangible assets, net  (16,777)  (22,187)  (18,068)  (23,774)
    Average tangible common equity (non-GAAP) $1,158,340  $1,100,804  $1,140,649  $1,095,956 
             
    Return on average tangible common equity (non-GAAP)  7.42%  12.49%  11.67%  16.54%
    Core return on average tangible common equity (non-GAAP)  9.51%  12.86%  12.56%  15.25%


     (1) Tax adjustments have been determined using the combined marginal federal and state rate of 25.37% and 25.47% for 2023 and 2022, respectively.
        


     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    RECONCILIATION TABLE - UNAUDITED
     
      Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
    (Dollars in thousands) 2023 2022 2023 2022
    Pre-tax pre-provision net income:        
    Net income (GAAP) $20,746  $33,584  $96,744  $132,319 
    Plus/ (less) non-GAAP adjustments:        
    Income tax expense  6,890   11,588   32,832   44,275 
    Provision/ (credit) for credit losses  2,365   18,890   (14,116)  23,571 
    Pre-tax pre-provision net income (non-GAAP) $30,001  $64,062  $115,460  $200,165 
             
    Efficiency ratio (GAAP):        
    Non-interest expense $72,471  $65,780  $207,912  $192,918 
             
    Net interest income plus non-interest income $102,472  $129,842  $323,372  $393,083 
             
    Efficiency ratio (GAAP)  70.72%  50.66%  64.29%  49.08%
             
    Efficiency ratio (Non-GAAP):        
    Non-interest expense $72,471  $65,780  $207,912  $192,918 
    Less non-GAAP adjustments:        
    Amortization of intangible assets  1,245   1,432   3,820   4,406 
    Merger, acquisition and disposal expense     1      1,068 
    Severance expense        1,939    
    Pension settlement expense  8,157      8,157    
    Contingent payment expense     1,247   36   1,247 
    Non-interest expense - as adjusted $63,069  $63,100  $193,960  $186,197 
             
    Net interest income plus non-interest income $102,472  $129,842  $323,372  $393,083 
    Plus non-GAAP adjustment:        
    Tax-equivalent income  1,068   951   3,044   2,809 
    Less/ (plus) non-GAAP adjustment:        
    Investment securities gains     2      48 
    Gain on disposal of assets     (183)     16,516 
    Net interest income plus non-interest income - as adjusted $103,540  $130,974  $326,416  $379,328 
             
    Efficiency ratio (Non-GAAP)  60.91%  48.18%  59.42%  49.09%
             
    Tangible common equity ratio:        
    Total stockholders' equity $1,537,914  $1,451,862  $1,537,914  $1,451,862 
    Goodwill  (363,436)  (363,436)  (363,436)  (363,436)
    Other intangible assets, net  (16,035)  (21,262)  (16,035)  (21,262)
    Tangible common equity $1,158,443  $1,067,164  $1,158,443  $1,067,164 
             
    Total assets $14,135,085  $13,765,597  $14,135,085  $13,765,597 
    Goodwill  (363,436)  (363,436)  (363,436)  (363,436)
    Other intangible assets, net  (16,035)  (21,262)  (16,035)  (21,262)
    Tangible assets $13,755,614  $13,380,899  $13,755,614  $13,380,899 
             
    Tangible common equity ratio  8.42%  7.98%  8.42%  7.98%
             
    Outstanding common shares  44,895,158   44,644,269   44,895,158   44,644,269 
    Tangible book value per common share $25.80  $23.90  $25.80  $23.90 


     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
     
    (Dollars in thousands) September 30,
    2023
     December 31,
    2022
     September 30,
    2022
    Assets      
    Cash and due from banks $80,314  $88,152  $88,780 
    Federal funds sold  251   193   213 
    Interest-bearing deposits with banks  637,026   103,887   169,815 
    Cash and cash equivalents  717,591   192,232   258,808 
    Residential mortgage loans held for sale (at fair value)  19,235   11,706   11,469 
    Investments held-to-maturity (fair values of $194,411, $220,123 and $226,030 at September 30, 2023, December 31, 2022 and September 30, 2022, respectively)  241,464   259,452   265,648 
    Investments available-for-sale (at fair value)  1,075,089   1,214,538   1,244,335 
    Other investments, at cost  75,525   69,218   77,296 
    Total loans  11,300,292   11,396,706   11,218,813 
    Less: allowance for credit losses - loans  (123,360)  (136,242)  (128,268)
    Net loans  11,176,932   11,260,464   11,090,545 
    Premises and equipment, net  72,312   67,070   64,703 
    Other real estate owned  261   645   739 
    Accrued interest receivable  45,100   41,172   37,074 
    Goodwill  363,436   363,436   363,436 
    Other intangible assets, net  16,035   19,855   21,262 
    Other assets  332,105   333,331   330,282 
    Total assets $14,135,085  $13,833,119  $13,765,597 
           
    Liabilities      
    Noninterest-bearing deposits $3,013,905  $3,673,300  $3,993,480 
    Interest-bearing deposits  8,137,107   7,280,121   6,756,006 
    Total deposits  11,151,012   10,953,421   10,749,486 
    Securities sold under retail repurchase agreements  66,581   61,967   91,287 
    Federal funds purchased     260,000   115,000 
    Federal Reserve Bank borrowings  300,000       
    Advances from FHLB  550,000   550,000   840,000 
    Subordinated debt  370,653   370,205   370,056 
    Total borrowings  1,287,234   1,242,172   1,416,343 
    Accrued interest payable and other liabilities  158,925   153,758   147,906 
    Total liabilities  12,597,171   12,349,351   12,313,735 
           
    Stockholders' equity      
    Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 44,895,158, 44,657,054 and 44,644,269 at September 30, 2023, December 31, 2022 and September 30, 2022, respectively  44,895   44,657   44,644 
    Additional paid in capital  740,999   734,273   732,239 
    Retained earnings  887,512   836,789   818,049 
    Accumulated other comprehensive loss  (135,492)  (131,951)  (143,070)
    Total stockholders' equity  1,537,914   1,483,768   1,451,862 
    Total liabilities and stockholders' equity $14,135,085  $13,833,119  $13,765,597 


     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
     
      Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
    (Dollars in thousands, except per share data) 2023 2022 2023 2022
    Interest income:        
    Interest and fees on loans $147,304 $121,327  $431,305  $327,042
    Interest on loans held for sale  238  161   697   504
    Interest on deposits with banks  6,371  774   13,979   1,245
    Interest and dividend income on investment securities:        
    Taxable  6,682  5,735   20,538   14,472
    Tax-advantaged  1,811  2,422   5,376   7,100
    Interest on federal funds sold  5  3   13   4
    Total interest income  162,411  130,422   471,908   350,367
    Interest expense:        
    Interest on deposits  63,102  9,490   155,215   15,578
    Interest on retail repurchase agreements and federal funds purchased  4,082  977   10,377   1,232
    Interest on advances from FHLB  6,200  3,049   21,623   3,066
    Interest on subordinated debt  3,946  3,946   11,839   10,130
    Total interest expense  77,330  17,462   199,054   30,006
    Net interest income  85,081  112,960   272,854   320,361
    Provision/ (credit) for credit losses  2,365  18,890   (14,116)  23,571
    Net interest income after provision/ (credit) for credit losses  82,716  94,070   286,970   296,790
    Non-interest income:        
    Investment securities gains    2      48
    Gain on disposal of assets    (183)     16,516
    Service charges on deposit accounts  2,704  2,591   7,698   7,384
    Mortgage banking activities  1,682  1,566   4,744   5,347
    Wealth management income  9,391  8,867   27,414   27,302
    Insurance agency commissions          2,927
    Income from bank owned life insurance  845  693   3,003   2,191
    Bank card fees  450  438   1,315   3,916
    Other income  2,319  2,908   6,344   7,091
    Total non-interest income  17,391  16,882   50,518   72,722
    Non-interest expense:        
    Salaries and employee benefits  44,853  40,126   124,710   119,049
    Occupancy expense of premises  4,609  4,759   14,220   14,527
    Equipment expenses  3,811  3,825   11,688   10,920
    Marketing  729  1,370   3,861   3,843
    Outside data services  2,819  2,509   8,186   7,492
    FDIC insurance  2,333  1,268   6,846   3,330
    Amortization of intangible assets  1,245  1,432   3,820   4,406
    Merger, acquisition and disposal expense    1      1,068
    Professional fees and services  4,509  2,207   12,354   6,596
    Other expenses  7,563  8,283   22,227   21,687
    Total non-interest expense  72,471  65,780   207,912   192,918
    Income before income tax expense  27,636  45,172   129,576   176,594
    Income tax expense  6,890  11,588   32,832   44,275
    Net income $20,746 $33,584  $96,744  $132,319
             
    Net income per share amounts:        
    Basic net income per common share $0.46 $0.75  $2.16  $2.93
    Diluted net income per common share $0.46 $0.75  $2.15  $2.92
    Dividends declared per share $0.34 $0.34  $1.02  $1.02


     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
     
      2023 2022
    (Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1
    Profitability for the quarter:              
    Tax-equivalent interest income $163,479  $159,156  $152,317  $146,332  $131,373  $114,901  $106,902 
    Interest expense  77,330   67,679   54,045   38,657   17,462   7,959   4,585 
    Tax-equivalent net interest income  86,149   91,477   98,272   107,675   113,911   106,942   102,317 
    Tax-equivalent adjustment  1,068   1,006   970   1,032   951   992   866 
    Provision/ (credit) for credit losses  2,365   5,055   (21,536)  10,801   18,890   3,046   1,635 
    Non-interest income  17,391   17,176   15,951   14,297   16,882   35,245   20,595 
    Non-interest expense  72,471   69,136   66,305   64,375   65,780   64,991   62,147 
    Income before income tax expense  27,636   33,456   68,484   45,764   45,172   73,158   58,264 
    Income tax expense  6,890   8,711   17,231   11,784   11,588   18,358   14,329 
    Net income $20,746  $24,745  $51,253  $33,980  $33,584  $54,800  $43,935 
    GAAP financial performance:              
    Return on average assets  0.58%  0.70%  1.49%  0.98%  0.99%  1.69%  1.42%
    Return on average common equity  5.35%  6.46%  13.93%  9.23%  8.96%  14.97%  11.83%
    Return on average tangible common equity  7.42%  8.93%  19.10%  12.91%  12.49%  20.83%  16.45%
    Net interest margin  2.55%  2.73%  2.99%  3.26%  3.53%  3.49%  3.49%
    Efficiency ratio - GAAP basis  70.72%  64.22%  58.55%  53.23%  50.66%  46.03%  50.92%
    Non-GAAP financial performance:              
    Pre-tax pre-provision net income $30,001  $38,511  $46,948  $56,565  $64,062  $76,204  $59,899 
    Core after-tax earnings $27,766  $27,136  $52,253  $35,322  $35,695  $44,238  $45,050 
    Core return on average assets  0.78%  0.77%  1.52%  1.02%  1.05%  1.37%  1.45%
    Core return on average common equity  7.16%  7.09%  14.20%  9.60%  9.53%  12.09%  12.13%
    Core return on average tangible common equity  9.51%  9.43%  19.11%  13.02%  12.86%  16.49%  16.45%
    Core earnings per diluted common share $0.62  $0.60  $1.16  $0.79  $0.80  $0.98  $0.99 
    Efficiency ratio - Non-GAAP basis  60.91%  60.68%  56.87%  51.46%  48.18%  49.79%  49.34%
    Per share data:           
    Net income attributable to common shareholders $20,719  $24,712  $51,084  $33,866  $33,470  $54,606  $43,667 
    Basic net income per common share $0.46  $0.55  $1.14  $0.76  $0.75  $1.21  $0.97 
    Diluted net income per common share $0.46  $0.55  $1.14  $0.76  $0.75  $1.21  $0.96 
    Weighted average diluted common shares  44,960,455   44,888,759   44,872,582   44,828,827   44,780,560   45,111,693   45,333,292 
    Dividends declared per share $0.34  $0.34  $0.34  $0.34  $0.34  $0.34  $0.34 
    Non-interest income:              
    Securities gains/ (losses) $  $  $  $(393) $2  $38  $8 
    Gain/ (loss) on disposal of assets              (183)  16,699    
    Service charges on deposit accounts  2,704   2,606   2,388   2,419   2,591   2,467   2,326 
    Mortgage banking activities  1,682   1,817   1,245   783   1,566   1,483   2,298 
    Wealth management income  9,391   9,031   8,992   8,472   8,867   9,098   9,337 
    Insurance agency commissions                 812   2,115 
    Income from bank owned life insurance  845   1,251   907   950   693   703   795 
    Bank card fees  450   447   418   463   438   1,810   1,668 
    Other income  2,319   2,024   2,001   1,603   2,908   2,135   2,048 
    Total non-interest income $17,391  $17,176  $15,951  $14,297  $16,882  $35,245  $20,595 
    Non-interest expense:              
    Salaries and employee benefits $44,853  $40,931  $38,926  $39,455  $40,126  $39,550  $39,373 
    Occupancy expense of premises  4,609   4,764   4,847   4,728   4,759   4,734   5,034 
    Equipment expenses  3,811   3,760   4,117   3,859   3,825   3,559   3,536 
    Marketing  729   1,589   1,543   1,354   1,370   1,280   1,193 
    Outside data services  2,819   2,853   2,514   2,707   2,509   2,564   2,419 
    FDIC insurance  2,333   2,375   2,138   1,462   1,268   1,078   984 
    Amortization of intangible assets  1,245   1,269   1,306   1,408   1,432   1,466   1,508 
    Merger, acquisition and disposal expense              1   1,067    
    Professional fees and services  4,509   4,161   3,684   2,573   2,207   2,372   2,017 
    Other expenses  7,563   7,434   7,230   6,829   8,283   7,321   6,083 
    Total non-interest expense $72,471  $69,136  $66,305  $64,375  $65,780  $64,991  $62,147 


     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
     
      2023 2022
    (Dollars in thousands, except per share data) Q3 Q2 Q1 Q4 Q3 Q2 Q1
    Balance sheets at quarter end:            
    Commercial investor real estate loans $5,137,694  $5,131,210  $5,167,456  $5,130,094  $5,066,843  $4,761,658  $4,388,275 
    Commercial owner-occupied real estate loans  1,760,384   1,770,135   1,769,928   1,775,037   1,743,724   1,767,326   1,692,253 
    Commercial AD&C loans  938,673   1,045,742   1,046,665   1,090,028   1,143,783   1,094,528   1,089,331 
    Commercial business loans  1,454,709   1,423,614   1,437,478   1,455,885   1,393,634   1,353,380   1,349,602 
    Residential mortgage loans  1,432,051   1,385,743   1,328,524   1,287,933   1,218,552   1,147,577   1,000,697 
    Residential construction loans  160,345   190,690   223,456   224,772   229,243   235,486   204,259 
    Consumer loans  416,436   422,505   421,734   432,957   423,034   426,335   419,911 
    Total loans  11,300,292   11,369,639   11,395,241   11,396,706   11,218,813   10,786,290   10,144,328 
    Allowance for credit losses - loans  (123,360)  (120,287)  (117,613)  (136,242)  (128,268)  (113,670)  (110,588)
    Loans held for sale  19,235   21,476   16,262   11,706   11,469   23,610   17,537 
    Investment securities  1,392,078   1,463,554   1,528,336   1,543,208   1,587,279   1,595,424   1,586,441 
    Total assets  14,135,085   13,994,545   14,129,007   13,833,119   13,765,597   13,303,009   12,967,416 
    Noninterest-bearing demand deposits  3,013,905   3,079,896   3,228,678   3,673,300   3,993,480   4,129,440   4,039,797 
    Total deposits  11,151,012   10,958,922   11,075,991   10,953,421   10,749,486   10,969,461   10,852,794 
    Customer repurchase agreements  66,581   74,510   47,627   61,967   91,287   110,744   130,784 
    Total stockholders' equity  1,537,914   1,539,032   1,536,865   1,483,768   1,451,862   1,477,169   1,488,910 
    Quarterly average balance sheets:            
    Commercial investor real estate loans $5,125,459  $5,146,632  $5,136,204  $5,082,697  $4,898,683  $4,512,937  $4,220,246 
    Commercial owner-occupied real estate loans  1,769,717   1,773,039   1,769,680   1,753,351   1,755,891   1,727,325   1,683,557 
    Commercial AD&C loans  995,682   1,057,205   1,082,791   1,136,780   1,115,531   1,096,369   1,102,660 
    Commercial business loans  1,442,518   1,441,489   1,444,588   1,373,565   1,327,218   1,334,350   1,372,755 
    Residential mortgage loans  1,406,929   1,353,809   1,307,761   1,251,829   1,177,664   1,070,836   964,056 
    Residential construction loans  174,204   211,590   223,313   231,318   235,123   221,031   197,366 
    Consumer loans  421,189   423,306   424,122   426,134   422,963   421,022   424,859 
    Total loans  11,335,698   11,407,070   11,388,459   11,255,674   10,933,073   10,383,870   9,965,499 
    Loans held for sale  13,714   17,480   8,324   10,901   15,211   12,744   17,594 
    Investment securities  1,589,342   1,639,324   1,679,593   1,717,455   1,734,036   1,686,181   1,617,615 
    Interest-earning assets  13,444,117   13,423,589   13,316,165   13,134,234   12,833,758   12,283,834   11,859,803 
    Total assets  14,086,342   14,094,653   13,949,276   13,769,472   13,521,595   12,991,692   12,576,089 
    Noninterest-bearing demand deposits  3,041,101   3,137,971   3,480,433   3,833,275   3,995,702   4,001,762   3,758,732 
    Total deposits  11,076,724   10,928,038   11,049,991   11,025,843   10,740,999   10,829,221   10,542,029 
    Customer repurchase agreements  67,298   58,382   60,626   74,797   104,742   122,728   131,487 
    Total interest-bearing liabilities  9,332,617   9,257,652   8,806,720   8,310,278   7,892,230   7,377,045   7,163,641 
    Total stockholders' equity  1,538,553   1,535,465   1,491,929   1,460,254   1,486,427   1,468,036   1,506,516 
    Financial measures:              
    Average equity to average assets  10.92%  10.89%  10.70%  10.61%  10.99%  11.30%  11.98%
    Average investment securities to average earning assets  11.82%  12.21%  12.61%  13.08%  13.51%  13.73%  13.64%
    Average loans to average earning assets  84.32%  84.98%  85.52%  85.70%  85.19%  84.53%  84.03%
    Loans to assets  79.94%  81.24%  80.65%  82.39%  81.50%  81.08%  78.23%
    Loans to deposits  101.34%  103.75%  102.88%  104.05%  104.37%  98.33%  93.47%
    Assets under management $5,536,499  $5,742,888  $5,477,560  $5,255,306  $4,969,092  $5,171,321  $5,793,787 
    Capital measures:              
    Tier 1 leverage (1)  9.50%  9.42%  9.44%  9.33%  9.33%  9.53%  9.66%
    Common equity tier 1 capital to risk-weighted assets (1)  10.83%  10.65%  10.53%  10.23%  10.18%  10.42%  10.78%
    Tier 1 capital to risk-weighted assets (1)  10.83%  10.65%  10.53%  10.23%  10.18%  10.42%  10.78%
    Total regulatory capital to risk-weighted assets (1)  14.85%  14.60%  14.43%  14.20%  14.15%  14.46%  15.02%
    Book value per common share $34.26  $34.31  $34.37  $33.23  $32.52  $33.10  $32.97 
    Outstanding common shares  44,895,158   44,862,369   44,712,497   44,657,054   44,644,269   44,629,697   45,162,908 

     

     (1) Estimated ratio at September 30, 2023.
        

     

     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
     
      2023 2022
    (Dollars in thousands) 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 $ $ $215 $ $ $ $
    Commercial owner-occupied real estate              
    Commercial AD&C              
    Commercial business  415  29  3,002  1,002  1,966    
    Residential real estate:              
    Residential mortgage    692  352    167  353  296
    Residential construction              
    Consumer          34    
    Total loans 90 days past due  415  721  3,569  1,002  2,167  353  296
    Non-accrual loans:              
    Commercial real estate:              
    Commercial investor real estate  20,108  20,381  15,451  9,943  14,038  11,245  11,743
    Commercial owner-occupied real estate  4,744  4,846  4,949  5,019  6,294  7,869  8,083
    Commercial AD&C  1,422  569        1,353  1,081
    Commercial business  9,671  9,393  9,443  7,322  7,198  7,542  8,357
    Residential real estate:              
    Residential mortgage  10,766  10,153  8,935  7,439  7,514  7,305  8,148
    Residential construction  449          1  51
    Consumer  4,187  3,396  4,900  5,059  5,173  5,692  6,406
    Total non-accrual loans  51,347  48,738  43,678  34,782  40,217  41,007  43,869
    Total restructured loans - accruing (1)        3,575  2,077  2,119  2,161
    Total non-performing loans  51,762  49,459  47,247  39,359  44,461  43,479  46,326
    Other assets and other real estate owned (OREO)  261  611  645  645  739  739  1,034
    Total non-performing assets $52,023 $50,070 $47,892 $40,004 $45,200 $44,218 $47,360


      For the Quarter Ended,
    (Dollars in thousands) September 30,
    2023
     June 30,
    2023
     March 31,
    2023
     December 31,
    2022
     September 30,
    2022
     June 30,
    2022
     March 31,
    2022
    Analysis of non-accrual loan activity:              
    Balance at beginning of period $48,738  $43,678  $34,782  $40,217  $41,007  $43,869  $46,086 
    Non-accrual balances transferred to OREO                     
    Non-accrual balances charged-off  (183)  (2,049)  (126)  (22)  (197)  (376)  (265)
    Net payments or draws  (1,545)  (1,654)  (10,212)  (9,535)  (3,509)  (3,234)  (2,787)
    Loans placed on non-accrual  4,967   9,276   19,714   5,467   4,212   948   1,503 
    Non-accrual loans brought current  (630)  (513)  (480)  (1,345)  (1,296)  (200)  (668)
    Balance at end of period $51,347  $48,738  $43,678  $34,782  $40,217  $41,007  $43,869 
                   
    Analysis of allowance for credit losses - loans:              
    Balance at beginning of period $120,287  $117,613  $136,242  $128,268  $113,670  $110,588  $109,145 
    Provision/ (credit) for credit losses - loans  3,171   4,454   (18,945)  7,907   14,092   3,046   1,635 
    Less loans charged-off, net of recoveries:              
    Commercial real estate:              
    Commercial investor real estate  (3)  (14)  (5)  (1)     (300)  (19)
    Commercial owner-occupied real estate  (25)  (27)  (26)  (27)  (10)  (12)   
    Commercial AD&C                     
    Commercial business  15   363   (127)  (13)  (512)  331   111 
    Residential real estate:              
    Residential mortgage  (4)  35   21   (50)  (8)  (9)  120 
    Residential construction              (3)  (5)   
    Consumer  115   1,423   (179)  24   27   (41)  (20)
    Net charge-offs/ (recoveries)  98   1,780   (316)  (67)  (506)  (36)  192 
    Balance at the end of period $123,360  $120,287  $117,613  $136,242  $128,268  $113,670  $110,588 
                   
    Asset quality ratios:              
    Non-performing loans to total loans  0.46%  0.44%  0.41%  0.35%  0.40%  0.40%  0.46%
    Non-performing assets to total assets  0.37%  0.36%  0.34%  0.29%  0.33%  0.33%  0.37%
    Allowance for credit losses to loans  1.09%  1.06%  1.03%  1.20%  1.14%  1.05%  1.09%
    Allowance for credit losses to non-performing loans  238.32%  243.21%  248.93%  346.15%  288.50%  261.44%  238.72%
    Annualized net charge-offs/ (recoveries) to average loans  %  0.06% (0.01)%  % (0.02)%  %  0.01%


     (1) Effective January 1, 2023, the Company adopted ASU 2022-02, which eliminated the accounting and recognition of troubled debt restructurings ("TDRs").
        

     

     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
     
      Three Months Ended September 30,
      2023 2022
    (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 $5,125,459  $60,482 4.68% $4,898,683  $51,463 4.17%
    Commercial owner-occupied real estate loans  1,769,717   20,865 4.68   1,755,891   20,284 4.58 
    Commercial AD&C loans  995,682   20,503 8.17   1,115,531   15,501 5.51 
    Commercial business loans  1,442,518   23,343 6.42   1,327,218   17,196 5.14 
    Total commercial loans  9,333,376   125,193 5.32   9,097,323   104,444 4.55 
    Residential mortgage loans  1,406,929   12,550 3.57   1,177,664   9,980 3.39 
    Residential construction loans  174,204   1,680 3.83   235,123   1,845 3.11 
    Consumer loans  421,189   8,491 8.00   422,963   5,531 5.19 
    Total residential and consumer loans  2,002,322   22,721 4.52   1,835,750   17,356 3.77 
    Total loans (2)  11,335,698   147,914 5.18   10,933,073   121,800 4.42 
    Loans held for sale  13,714   238 6.93   15,211   161 4.24 
    Taxable securities  1,239,564   6,682 2.16   1,251,599   5,735 1.83 
    Tax-advantaged securities  349,778   2,269 2.59   482,437   2,900 2.40 
    Total investment securities (3)  1,589,342   8,951 2.25   1,734,036   8,635 1.99 
    Interest-bearing deposits with banks  505,017   6,371 5.00   150,992   774 2.03 
    Federal funds sold  346   5 5.38   446   3 2.30 
    Total interest-earning assets  13,444,117   163,479 4.83   12,833,758   131,373 4.07 
                 
    Less: allowance for credit losses - loans  (122,348)      (114,512)    
    Cash and due from banks  93,354       93,327     
    Premises and equipment, net  71,956       64,039     
    Other assets  599,263       644,983     
    Total assets $14,086,342      $13,521,595     
                 
    Liabilities and Stockholders' Equity            
    Interest-bearing demand deposits $1,419,934  $4,229 1.18% $1,444,801  $941 0.26%
    Regular savings deposits  861,634   5,571 2.57   555,057   21 0.02 
    Money market savings deposits  2,866,744   25,122 3.48   3,202,507   5,281 0.65 
    Time deposits  2,887,311   28,180 3.87   1,542,932   3,247 0.83 
    Total interest-bearing deposits  8,035,623   63,102 3.12   6,745,297   9,490 0.56 
    Repurchase agreements  67,298   356 2.10   104,742   30 0.11 
    Federal funds purchased and Federal Reserve Bank borrowings  300,435   3,726 4.92   158,211   947 2.37 
    Advances from FHLB  558,696   6,200 4.40   514,022   3,049 2.35 
    Subordinated debt  370,565   3,946 4.26   369,958   3,946 4.27 
    Total borrowings  1,296,994   14,228 4.35   1,146,933   7,972 2.76 
    Total interest-bearing liabilities  9,332,617   77,330 3.29   7,892,230   17,462 0.88 
                 
    Noninterest-bearing demand deposits  3,041,101       3,995,702     
    Other liabilities  174,071       147,236     
    Stockholders' equity  1,538,553       1,486,427     
    Total liabilities and stockholders' equity $14,086,342      $13,521,595     
                 
    Tax-equivalent net interest income and spread   $86,149 1.54%   $113,911 3.19%
    Less: tax-equivalent adjustment    1,068      951  
    Net interest income   $85,081     $112,960  
                 
    Interest income/earning assets     4.83%     4.07%
    Interest expense/earning assets     2.28      0.54 
    Net interest margin     2.55%     3.53%


     (1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.37% and 25.47% for 2023 and 2022, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.1 million and $1.0 million in 2023 and 2022, respectively.
     (2) Non-accrual loans are included in the average balances.
     (3)  Available-for-sale investments are presented at amortized cost.
        

     

     
    Sandy Spring Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
     
      Nine Months Ended September 30,
      2023 2022
    (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 $5,136,059  $177,067 4.61% $4,546,440  $138,245 4.07%
    Commercial owner-occupied real estate loans  1,770,812   61,038 4.61   1,722,522   58,126 4.51 
    Commercial AD&C loans  1,044,907   61,005 7.81   1,104,901   37,821 4.58 
    Commercial business loans  1,442,858   68,258 6.33   1,344,608   49,370 4.91 
    Total commercial loans  9,394,636   367,368 5.23   8,718,471   283,562 4.35 
    Residential mortgage loans  1,356,530   35,925 3.53   1,071,634   26,632 3.31 
    Residential construction loans  202,856   5,302 3.49   217,978   5,112 3.14 
    Consumer loans  422,861   24,403 7.72   422,941   13,112 4.14 
    Total residential and consumer loans  1,982,247   65,630 4.42   1,712,553   44,856 3.50 
    Total loans (2)  11,376,883   432,998 5.09   10,431,024   328,418 4.21 
    Loans held for sale  13,192   697 7.04   15,174   504 4.43 
    Taxable securities  1,275,407   20,538 2.15   1,204,240   14,472 1.60 
    Tax-advantaged securities  360,348   6,727 2.49   475,463   8,533 2.39 
    Total investment securities (3)  1,635,755   27,265 2.22   1,679,703   23,005 1.83 
    Interest-bearing deposits with banks  368,829   13,979 5.07   202,882   1,245 0.82 
    Federal funds sold  433   13 4.00   581   4 0.91 
    Total interest-earning assets  13,395,092   474,952 4.74   12,329,364   353,176 3.83 
                 
    Less: allowance for credit losses - loans  (125,558)      (112,384)    
    Cash and due from banks  94,960       81,673     
    Premises and equipment, net  70,130       62,510     
    Other assets  609,301       672,093     
    Total assets $14,043,925      $13,033,256     
                 
    Liabilities and Stockholders' Equity            
    Interest-bearing demand deposits $1,413,876  $10,465 0.99% $1,477,956  $1,513 0.14%
    Regular savings deposits  660,211   7,831 1.59   553,982   62 0.02 
    Money market savings deposits  3,067,810   68,976 3.01   3,334,534   7,403 0.30 
    Time deposits  2,658,225   67,943 3.42   1,418,740   6,600 0.62 
    Total interest-bearing deposits  7,800,122   155,215 2.66   6,785,212   15,578 0.31 
    Repurchase agreements  62,126   561 1.21   119,554   104 0.12 
    Federal funds purchased and Federal Reserve Bank borrowings  264,580   9,816 4.96   85,983   1,128 1.75 
    Advances from FHLB  637,015   21,623 4.54   174,493   3,066 2.35 
    Subordinated debt  370,412   11,839 4.26   315,065   10,130 4.29 
    Total borrowings  1,334,133   43,839 4.39   695,095   14,428 2.78 
    Total interest-bearing liabilities  9,134,255   199,054 2.91   7,480,307   30,006 0.54 
                 
    Noninterest-bearing demand deposits  3,218,226       3,919,600     
    Other liabilities  169,291       146,429     
    Stockholders' equity  1,522,153       1,486,920     
    Total liabilities and stockholders' equity $14,043,925      $13,033,256     
                 
    Tax-equivalent net interest income and spread   $275,898 1.83%   $323,170 3.29%
    Less: tax-equivalent adjustment    3,044      2,809  
    Net interest income   $272,854     $320,361  
                 
    Interest income/earning assets     4.74%     3.83%
    Interest expense/earning assets     1.99      0.33 
    Net interest margin     2.75%     3.50%


     (1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.37% and 25.47% for 2023 and 2022, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $3.0 million and $2.8 million in 2023 and 2022, respectively.
     (2) Non-accrual loans are included in the average balances.
     (3)  Available-for-sale investments are presented at amortized cost.

     


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