Sandy Spring Bancorp Reports $57.0 Million In Quarterly Earnings

Rhea-AI Summary

Sandy Spring Bancorp (Nasdaq-SASR) reported a strong net income of $57.0 million ($1.20 per diluted share) for Q3 2021, up from $44.6 million year-over-year. This increase was primarily driven by a decline in interest expenses and a credit to the provision for credit losses of $8.2 million. Core earnings stood at $52.0 million, slightly lower than last year’s $52.1 million. Total assets rose to $13.0 billion, with a 10% increase in deposits. However, non-interest income decreased 17%, mainly due to a 65% drop in mortgage banking activities.

Positive

• Net income increased by 28% year-over-year to $57.0 million.
• 10% growth in total deposits, driven by a 15% increase in noninterest-bearing deposits.
• Credit to the provision for credit losses of $8.2 million indicates improved credit quality.
• Net interest margin improved to 3.52%, up from 3.24% year-over-year.

Negative

• Non-interest income decreased 17% due to a 65% decline in mortgage banking income.
• Non-interest expenses increased by 4%, mainly driven by higher compensation costs.

Earnings Performance Remains Strong

OLNEY, Md., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Today Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income of $57.0 million ($1.20 per diluted common share) for the quarter ended September 30, 2021. The current quarter compares to $44.6 million ($0.94 per diluted common share) for the third quarter of 2020 and net income of $57.3 million ($1.19 per diluted common share) for the second quarter of 2021. The results for the current quarter reflect the positive impact of the significant decline in interest expense and a credit to the provision for credit losses, which more than offset a decline in non-interest income and an increase in non-interest expense compared to the third quarter of the prior year.

Core earnings, which exclude the impact of the provision for credit losses and provision on unfunded loan commitments, merger and acquisition expense, loss on FHLB redemptions, amortization of intangibles and investment securities gains, each on an after-tax basis, for the current quarter were $52.0 million ($1.10 per diluted common share), compared to $52.1 million ($1.10 per diluted common share) for the quarter ended September 30, 2020 and $55.1 million ($1.16 per diluted common share) for the quarter ended June 30, 2021.

The provision for credit losses for the current quarter was a credit of $8.2 million as compared to a charge of $7.0 million for the third quarter of 2020 and credit of $4.2 million for the second quarter of 2021. The credits for the provision for credit losses during 2021 reflect the continued declines in the forecasted unemployment rate and, to a lesser degree, improvements in other forecasted macroeconomic indicators. The third quarter's provision also contains the impact of various updated metrics applied in the determination of the allowance for credit losses.

“We delivered another successful quarter and I am pleased with the consistent results from across our various lines of business,” said Daniel J. Schrider, President and CEO of Sandy Spring Bank. “We continue to grow new and existing relationships with wealth, mortgage, retail, and commercial clients, which is evidenced in our significant deposit and commercial loan production this quarter. Our credit quality also remains strong, as well as our proactive management of the margin. We are in a great position, and we look forward to building on the momentum our team has generated."

Third Quarter Highlights:

• Core earnings for the third quarter of 2021 were $52.0 million and $52.1 million for the prior year quarter as the increase in net interest income during the current quarter was offset by lower non-interest income and increased non-interest expense compared to the third quarter of 2020.
  
  
• At September 30, 2021, total assets were $13.0 billion, a 3% increase compared to $12.7 billion at September 30, 2020. This increase year-over-year was the result of the $889.8 million growth in cash and cash equivalents, primarily as a result of the funds received from the forgiveness of PPP loans, which declined $601.6 million during the same period. Excluding PPP loans, the total loan portfolio remained at $9.3 billion at September 30, 2021 compared to September 30, 2020, due to the combined run-off of $326.9 million of residential mortgage and consumer loans offset by the year-over-year commercial loan growth of $315.9 million or 4%.
  
  
• Year-over-year deposits increased 10%, driven by 15% growth in noninterest-bearing deposits and 8% growth in interest-bearing deposits.
  
  
• During the past twelve months, time deposits declined $359.4 million and borrowings of $820.6 million were eliminated. The reduction in borrowings included the redemption of $31 million of 5.65% subordinated debt acquired as part of the Revere Bank ("Revere") acquisition and $25 million of 4.75% subordinated debt acquired as part of the WashingtonFirst Bankshares, Inc. ("WashingtonFirst") acquisition.
  
  
• For the third quarter of 2021, the net interest margin was 3.52%, compared to 3.24% for the same quarter of 2020, and 3.63% for the second quarter of 2021. Excluding the impact of the amortization of the fair value marks derived from acquisitions, the current quarter’s net interest margin would have been 3.49%, compared to 3.18% for third quarter of 2020, and 3.60% for the second quarter of 2021. Solely excluding the impact of PPP loans, the current quarter’s net interest margin would have been 3.35%, compared to 3.30% for the third quarter of 2020, and 3.52% for the second quarter of 2021.
  
  
• The provision for credit losses was a credit of $8.2 million for the current quarter compared to the prior quarter’s credit to the provision of $4.2 million. The credit to the provision for the current quarter was the result of the continued improvement in forecasted economic variables, in addition to the impact of updated metrics applied in the determination of the allowance for credit losses.
  
  
• Non-interest income for the current quarter decreased by 17% or $5.0 million compared to the prior year quarter. The decline was the direct result of the 65% decline in income from mortgage banking activities, which exceeded the 21% growth in wealth management income, a 26% increase in service charges on deposit accounts and 16% growth in bank card fees. Other non-interest income grew by 113% compared to the prior year quarter as a result of increases in credit related fees and activity-based contractual vendor incentives.
  
  
• Non-interest expense increased $2.2 million or 4% for the third quarter of 2021, compared to the prior year quarter. This increase was driven by increases in compensation costs, professional fees and other non-interest expense, which were partially offset by the lack of merger and acquisition expense during the current quarter and a significant reduction in FDIC insurance.
  
  
• Return on average assets (“ROA”) for the quarter ended September 30, 2021 was 1.75% and return on average tangible common equity (“ROTCE”) was 19.56% compared to 1.79% and 20.44%, respectively, for the second quarter of 2021. On a non-GAAP basis, the current quarter's core ROA was 1.60% and core ROTCE was 17.85% compared to core ROA of 1.73% and core ROTCE of 19.68% for the prior quarter of 2021.
  
  
• For the third quarter of 2021, the GAAP efficiency ratio was 48.23% compared to 48.03% for the third quarter of 2020, and 46.89% for the second quarter of 2021. The non-GAAP efficiency ratio for the third quarter of 2021 was 46.67% compared to 45.36% for the second quarter of 2021.
  
  
• During the quarter, the Company repurchased 1,261,828 shares of its common stock at an average price of $43.04 per share. Under the current authorization, 1,038,172 common shares remain available to be repurchased.
  

Balance Sheet and Credit Quality

Total assets grew 3% to $13.0 billion at September 30, 2021, as compared to $12.7 billion at September 30, 2020. During this period, total loans declined by 6% to $9.7 billion at September 30, 2021, compared to $10.3 billion at September 30, 2020. Excluding PPP loans, total loans at September 30, 2021 remained at $9.3 billion, as compared to the prior year quarter. During the past twelve months, the activity in the loan portfolio reflected the net reduction of loans originated under the PPP program of $601.6 million and a $261.9 million decline in the residential mortgage loan portfolio, which was partially offset by year-over-year non-PPP commercial loan growth of $315.9 million or 4%. The year-over-year decline in the mortgage loan portfolio resulted from mortgage loan refinance activity driven by the low interest rate environment and the strategic decision to sell the majority of new mortgage loan production.

At September 30, 2021, the remaining outstanding principal balance of PPP loans was $461.0 million. As of October 4, 2021, 6,629 PPP loans totaling $1.1 billion have been forgiven and an additional $50.0 million have been repaid by borrowers. At the end of the current quarter, loans with an aggregate balance of $13.6 million remain in deferral status. Currently, 99% of all commercial loans that had been granted modifications/deferrals due to pandemic-related financial stress have returned to their original payment plans.

Deposit growth was 10% during the past twelve months, as noninterest-bearing deposits experienced growth of 15% and interest-bearing deposits grew 8%. This growth was driven primarily by the impact of the PPP program and, to a lesser extent, growth in interest-bearing transaction relationships.

Tangible common equity increased to $1.1 billion or 9.10% of tangible assets at September 30, 2021, compared to $1.0 billion or 8.31% at September 30, 2020 as a result of accumulated earnings over the preceding twelve months. Excluding the impact of the PPP program from tangible assets at September 30, 2021, the tangible common equity ratio would be 9.44%.   At September 30, 2021, the Company had a total risk-based capital ratio of 15.26%, a common equity tier 1 risk-based capital ratio of 12.50%, a tier 1 risk-based capital ratio of 12.50%, and a tier 1 leverage ratio of 9.23%.

Non-performing loans include non-accrual loans, accruing loans 90 days or more past due and restructured loans. At September 30, 2021, the level of non-performing loans to total loans was 0.80% compared to 0.72% at September 30, 2020, and 0.93% at June 30, 2021. At September 30, 2021, non-performing loans totaled $78.2 million, compared to $74.7 million at September 30, 2020, and $94.3 million at June 30, 2021. Loans placed on non-accrual during the current quarter amounted to $5.7 million compared to $0.9 million for the prior year quarter and $1.5 million for the second quarter of 2021. Non-accrual loans at quarter end declined from the prior quarter due primarily to the partial payoffs and eventual charge-offs of a few large borrowings within the hospitality sector with an aggregate balance of $32.9 million. Charged-off amounts of these credits did not exceed their associated individual reserves, and as such, did not result in any additional impact on the current quarter's provision for credit losses. Loans greater than 90 days or more increased from the prior quarter as a result of maturities of existing portfolio loans that were in process of being extended. Loans amounting to $22.2 million were subsequently settled after September 30, 2021.

The Company recorded net charge-offs of $7.8 million for the third quarter of 2021, as compared to net charge-offs of $0.2 million for the third quarter of 2020 and net charge-offs of $2.2 million for the second quarter of 2021. The increase in charge-offs in the current quarter compared to the prior quarter and the prior year quarter was primarily the result of the previously mentioned charge-offs of non-accrual loans.

At September 30, 2021, the allowance for credit losses was $107.9 million or 1.11% of outstanding loans and 138% of non-performing loans, compared to $124.0 million or 1.23% of outstanding loans and 131% of non-performing loans at June 30, 2021. Excluding PPP loans, the allowance for credit losses to outstanding loans was 1.17% and 1.34%, at September 30, 2021 and June 30, 2021, respectively. The decline in the allowance during the current quarter compared to the previous quarter was the result of the removal of individual reserves associated with the charge-offs and continued improvement in forecasted economic metrics, in addition to the impact of various updated metrics applied in the determination of the allowance for credit losses.

Income Statement Review

Quarterly Results

The Company recorded net income of $57.0 million for the three months ended September 30, 2021, compared to net income of $44.6 million for the prior year quarter. The results for the current quarter reflect the positive impact of the significant decline in interest expense and the credit to the provision for credit losses, which more than offset the decline in non-interest income and an increase in non-interest expense compared to the third quarter of the prior year. Pre-tax, pre-provision, pre-merger income was $67.8 million for the three months ended September 30, 2021 compared to $67.2 million for the prior year quarter.

For the third quarter of 2021, net interest income increased $9.1 million or 9% compared to the third quarter of 2020, due to a significant reduction in interest expense during the preceding twelve months. During this period, as general market interest rates declined significantly, interest income declined modestly by $1.9 million, interest expense on deposits, notably money market, time deposits, and borrowings declined to a greater extent, resulting in an $11.0 million decrease in interest expense. Interest expense on interest-bearing deposits declined $5.9 million and interest expense on borrowings declined $5.1 million. For the current quarter, the PPP program contributed $11.4 million to net interest income, of which $9.6 million represented origination fees. The net interest margin for the third quarter of 2021 was 3.52% as compared to 3.24% for the same quarter of the prior year, primarily the result of decreased funding costs during the period. Excluding the net $0.8 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current quarter would have been 3.49% compared to the adjusted net interest margin of 3.18% for the third quarter of 2020.

The provision for credit losses was a credit of $8.2 million for the third quarter of 2021 compared to a charge of $7.0 million for the third quarter of 2020. The provision for credit losses for the second quarter of 2021 was a credit of $4.2 million. The credit to the provision for the quarter was the result of the continued improvement in forecasted economic variables, in addition to the impact of various updated metrics applied in the determination of the allowance for credit losses. The overall credit to the provision for the third quarter of 2021 was partially mitigated by the impact of adjustments to certain qualitative factors and the change in the portfolio mix as a result of the origination of new credits.

Non-interest income decreased $5.0 million or 17% during the current quarter compared to the same quarter of the prior year, as a result of a 65% decline in income from mortgage banking activities, which exceeded the 21% growth in wealth management income, a 26% increase in service charges on deposit accounts and 16% growth in bank card fees. In addition, other non-interest income grew 113% compared to the prior year primarily as a result of an increase in credit related fees and activity-based contractual vendor incentives. The growth in wealth management income continued to reflect the positive impact of the Rembert Pendleton Jackson ("RPJ") acquisition in 2020 in addition to the performance in the financial markets and the expansion of the wealth management client base. The growth in service charge income reflects the impact of the prior year's temporary suspension of certain service fees as well as lower transaction volume, both a resulting reaction to the Covid-19 pandemic. Bank card fees grew compared to the prior year quarter driven by transaction volume.

Non-interest expense increased $2.2 million or 4% for the third quarter of 2021, compared to the prior year quarter. The increase was driven by increases in compensation costs, professional fees and other non-interest expense, which were partially offset by the lack of merger and acquisition expense during the current quarter and a significant reduction in FDIC insurance expense. Salary and benefit expense increased $2.6 million as a result of staffing increases and an increase of $1.2 million in professional fees and services, primarily due to consulting fees associated with specific strategic initiatives. The decline in the FDIC insurance expense resulted from the reduction in risk factors applied by the regulatory agency in the determination of the Company's premium.

For the third quarter of 2021, the GAAP efficiency ratio was 48.23% compared to 48.03% for the third quarter of 2020, and 46.89% for the second quarter of 2021. The non-GAAP efficiency ratio was 46.67% for the current quarter as compared to 45.27% for the third quarter of 2020, and 45.36% for the second quarter of 2021. The modest increase in the efficiency ratio (reflecting an decrease in efficiency) from the third quarter of the prior year to the current year quarter was the result of the 7% growth in non-GAAP non-interest expense outpacing the 3% growth in non-GAAP revenue. ROA for the quarter ended September 30, 2021 was 1.75% and ROTCE was 19.56% compared to 1.79% and 20.44%, respectively, for the second quarter of 2021. On a non-GAAP basis, the current quarter's core ROA was 1.60% and core ROTCE was 17.85% compared to core ROA of 1.73% and core ROTCE of 19.68% for the prior quarter of 2021.

Year to Date Results

The Company recorded net income of $189.7 million for the nine months ended September 30, 2021 compared to net income of $40.3 million for the same period in the prior year. Pre-tax, pre-provision, pre-merger income was $204.5 million for the nine months ended September 30, 2021 compared to $164.9 million for the prior year. The current year benefited from increased net interest income of $55.9 million, a $47.1 million credit to the provision for credit losses, and a $9.0 million increase in non-interest income driven primarily by wealth management income and other non-interest income. The prior year's results reflected the combined impact of merger and acquisition expense associated with the Revere acquisition, the impact of the Covid-19 pandemic on economic forecast used in the determination of the allowance for credit losses and the additional provision for credit losses associated with the acquisition of Revere during that period.

Net interest income for the nine months ended September 30, 2021 increased 21% or $55.9 million compared to the prior year as net interest income was driven by the increase in interest income from the commercial loan portfolio and the overall decrease in interest expense during the current year. These positive impacts were partially offset by the decrease in interest income on the investment securities and the mortgage and consumer loans portfolios. Contributing to the growth in net interest income, the PPP program generated $35.6 million, net of its associated funding costs, year-over-year. The net interest margin improved to 3.57% for the nine months ended September 30, 2021, compared to 3.33% for the prior year. Excluding the net $4.6 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current year would have been 3.52%. The net interest margin for 2020, excluding the amortization of fair value marks, would have been 3.21%.

The provision for credit losses for the nine months ended September 30, 2021 amounted to a credit of $47.1 million as compared to a charge of $90.2 million for the same period in 2020. For the nine months ended September 30, 2021, the credit for the provision for credit losses, compared to the prior year's charge to the provision, reflects the impact of the continued improvement in forecasted economic metrics, notably the rate of unemployment, anticipated business bankruptcies and the housing price index.   These decreases were partially offset by qualitative factors applied in the determination of the allowance. The charge to the provision for credit losses for the same period in 2020 predominantly reflected the combined results of the impact of the deteriorated economic forecasts during the first half of 2020 and the initial allowance on acquired Revere non-purchased credit deteriorated loans.

Non-interest income increased 13% to $79.5 million for the nine months ended September 30, 2021, compared to $70.5 million for 2020. During the current year, wealth management income increased $4.9 million year over year as a result of the acquisition of RPJ in the first quarter of 2020, in addition to the $699 million growth in assets under management and the increase in the client base during the past twelve months. Service charge income also increased 15% as customer activity increased. As a result of increased transaction volume, bank card fees grew 24% compared to the prior year period. Other non-interest income also grew significantly compared to the prior year as a result of the combination of the full payoff of a purchased credit deteriorated loan, credit related fees and activity-based contractual vendor incentives. Income from mortgage banking activities decreased during the year compared to the prior year.

Non-interest expense was $194.3 million for the nine months ended September 30, 2021, compared to $194.1 million for 2020. The current year included $9.1 million in prepayment penalties on FHLB borrowings compared to $5.9 million in prepayment penalties in the prior year. The prior year included $25.2 million in merger and acquisition expense. Excluding the impact of these items results in a year-over-year growth rate in non-interest expense of 14%. This growth rate was driven by operational and compensation costs associated with the 2020 acquisitions, staffing increases and professional fees and services associated with certain strategic initiatives, increased incentive expense associated with mortgage lending and other volume based activities, increased intangible asset amortization, marketing and outside data services cost.

The effective tax rate for the nine months ended September 30, 2021 was 24.60%, compared to a tax rate of 18.66% for the same period in 2020. The current year's effective tax rate reflects a more normalized rate while the prior year's rate reflected the favorable result of the changes to tax laws in 2020 that expanded the time permitted to utilize previous net operating losses. The Company applied this change to the 2018 acquisition of WashingtonFirst to realize a tax benefit of $1.8 million for 2020, resulting in a greater proportional benefit from the operating income in the first nine months of 2020.

For the nine months ended September 30, 2021, the GAAP efficiency ratio was 48.73% compared to 58.15% for the same period in 2020. The non-GAAP efficiency ratio for the first nine months of the current year was 44.88% compared to 47.10% for the same period in the prior year. The improvement in the current year’s non-GAAP efficiency ratio compared to the prior year was the result of the 19% growth in non-GAAP revenue, which outpaced the 14% 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, loss on FHLB redemption, merger and acquisition expense and investment securities gains 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 the provision/(credit) for credit losses, provision/(credit) for credit losses on unfunded loan commitments, merger and acquisition expense, amortization of intangible assets, loss on FHLB redemption, and investment securities gains, on a net of tax basis.
  

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 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 1-844-200-6205. Please use the following access code: 896716. 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 4, 2021. A replay of the teleconference will be available through the same time period by calling 1-866-813-9403 under conference call number 472010.

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, 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 effect of the pandemic on our borrowers and their ability to make payments on their obligations, the effectiveness of vaccination programs, and the effect of remedial actions and stimulus measures adopted by federal, state and local governments; 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, 2020, 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 September 30,										% Change				Nine Months Ended September 30,										% Change
(Dollars in thousands, except per share data)		2021					2020									2021					2020
Results of operations:
Net interest income		$	106,604				$	97,484				9	%			$	319,250				$	263,332				21	%
Provision/ (credit) for credit losses		(8,229			)		7,003					(218	)%			(47,141			)		90,158					(152	)%
Non-interest income		24,394					29,390					(17	)			79,519					70,482					13
Non-interest expense		63,181					60,937					4				194,329					194,121					—
Income before income tax expense		76,046					58,934					29				251,581					49,535					408
Net income		56,976					44,642					28				189,703					40,291					371
Net income attributable to common shareholders		$	56,622				$	44,268				28				$	188,484				$	39,974				372
Pre-tax pre-provision pre-merger income (1)		$	67,817				$	67,200				1				$	204,485				$	164,864				24
Return on average assets				1.75	%				1.38	%								1.98	%				0.47	%
Return on average common equity				14.54	%				12.67	%								16.70	%				4.12	%
Return on average tangible common equity				19.56	%				17.84	%								22.68	%				5.87	%
Net interest margin				3.52	%				3.24	%								3.57	%				3.33	%
Efficiency ratio - GAAP basis (2)				48.23	%				48.03	%								48.73	%				58.15	%
Efficiency ratio - Non-GAAP basis (2)				46.67	%				45.27	%								44.88	%				47.10	%
Per share data:
Basic net income per common share		$	1.21				$	0.94				29	%			$	4.00				$	0.93				330	%
Diluted net income per common share		$	1.20				$	0.94				28				$	3.98				$	0.93				328
Weighted average diluted common shares		47,086,824					47,175,071					—				47,315,725					43,070,672					10
Dividends declared per share		$	0.32				$	0.30				7				$	0.96				$	0.90				7
Book value per common share		$	33.52				$	30.30				11				$	33.52				$	30.30				11
Tangible book value per common share (1)		$	24.90				$	21.69				15				$	24.90				$	21.69				15
Outstanding common shares		46,119,074					47,025,779					(2	)			46,119,074					47,025,779					(2	)
Financial condition at period-end:
Investment securities		$	1,470,652				$	1,425,733				3	%			$	1,470,652				$	1,425,733				3	%
Loans		9,721,348					10,333,935					(6	)			9,721,348					10,333,935					(6	)
Interest-earning assets		12,245,374					11,965,915					2				12,245,374					11,965,915					2
Assets		13,017,464					12,678,131					3				13,017,464					12,678,131					3
Deposits		10,987,400					9,964,969					10				10,987,400					9,964,969					10
Interest-bearing liabilities		7,320,132					7,643,381					(4	)			7,320,132					7,643,381					(4	)
Stockholders' equity		1,546,060					1,424,749					9				1,546,060					1,424,749					9
Capital ratios:
Tier 1 leverage (3)				9.23	%				8.65	%								9.23	%				8.65	%
Common equity tier 1 capital to risk-weighted assets (3)				12.50	%				10.45	%								12.50	%				10.45	%
Tier 1 capital to risk-weighted assets (3)				12.50	%				10.45	%								12.50	%				10.45	%
Total regulatory capital to risk-weighted assets (3)				15.26	%				14.02	%								15.26	%				14.02	%
Tangible common equity to tangible assets (4)				9.10	%				8.31	%								9.10	%				8.31	%
Average equity to average assets				12.07	%				10.92	%								11.84	%				11.39	%
Credit quality ratios:
Allowance for credit losses to loans				1.11	%				1.65	%								1.11	%				1.65	%
Non-performing loans to total loans				0.80	%				0.72	%								0.80	%				0.72	%
Non-performing assets to total assets				0.61	%				0.60	%								0.61	%				0.60	%
Allowance for credit losses to non-performing loans				138.06	%				228.03	%								138.06	%				228.03	%
Annualized net charge-offs to average loans (5)				0.31	%				0.01	%								0.14	%				0.01	%

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 September 30, 2021.
(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. 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 September 30,										Nine Months Ended September 30,
(Dollars in thousands)		2021					2020					2021					2020
Pre-tax pre-provision pre-merger income:
Net income		$	56,976				$	44,642				$	189,703				$	40,291
Plus/ (less) non-GAAP adjustments:
Merger and acquisition expense		—					1,263					45					25,171
Income tax expense		19,070					14,292					61,878					9,244
Provision/ (credit) for credit losses		(8,229			)		7,003					(47,141			)		90,158
Pre-tax pre-provision pre-merger income		$	67,817				$	67,200				$	204,485				$	164,864
Efficiency ratio (GAAP):
Non-interest expense		$	63,181				$	60,937				$	194,329				$	194,121
Net interest income plus non-interest income		$	130,998				$	126,874				$	398,769				$	333,814
Efficiency ratio (GAAP)				48.23	%				48.03	%				48.73	%				58.15	%
Efficiency ratio (Non-GAAP):
Non-interest expense		$	63,181				$	60,937				$	194,329				$	194,121
Less non-GAAP adjustments:
Amortization of intangible assets		1,635					1,968					4,991					4,566
Loss on FHLB redemption		—					—					9,117					5,928
Merger and acquisition expense		—					1,263					45					25,171
Non-interest expense - as adjusted		$	61,546				$	57,706				$	180,176				$	158,456
Net interest income plus non-interest income		$	130,998				$	126,874				$	398,769				$	333,814
Plus non-GAAP adjustment:
Tax-equivalent income		931					643					2,841					3,076
Less non-GAAP adjustment:
Investment securities gains		49					51					178					432
Net interest income plus non-interest income - as adjusted		$	131,880				$	127,466				$	401,432				$	336,458
Efficiency ratio (Non-GAAP)				46.67	%				45.27	%				44.88	%				47.10	%
Tangible common equity ratio:
Total stockholders' equity		$	1,546,060				$	1,424,749				$	1,546,060				$	1,424,749
Goodwill		(370,223			)		(370,549			)		(370,223			)		(370,549			)
Other intangible assets, net		(27,531			)		(34,175			)		(27,531			)		(34,175			)
Tangible common equity		$	1,148,306				$	1,020,025				$	1,148,306				$	1,020,025
Total assets		$	13,017,464				$	12,678,131				$	13,017,464				$	12,678,131
Goodwill		(370,223			)		(370,549			)		(370,223			)		(370,549			)
Other intangible assets, net		(27,531			)		(34,175			)		(27,531			)		(34,175			)
Tangible assets		$	12,619,710				$	12,273,407				$	12,619,710				$	12,273,407
Tangible common equity ratio				9.10	%				8.31	%				9.10	%				8.31	%
Outstanding common shares		46,119,074					47,025,779					46,119,074					47,025,779
Tangible book value per common share		$	24.90				$	21.69				$	24.90				$	21.69

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)		2021					2020					2021					2020
Core earnings (non-GAAP):
Net income		$	56,976				$	44,642				$	189,703				$	40,291
Plus/ (less) non-GAAP adjustments (net of tax):
Provision/ (credit) for credit losses		(6,065			)		5,140					(35,054			)		67,132
Provision/ (credit) for credit losses on unfunded loan commitments		(64			)		—					(950			)		—
Merger and acquisition expense		—					919					33					18,742
Amortization of intangible assets		1,211					1,463					3,711					3,400
Loss on FHLB redemption		—					—					6,779					4,414
Investment securities gains		(36			)		(38			)		(132			)		(322			)
Core earnings (Non-GAAP)		$	52,022				$	52,126				$	164,090				$	133,657
Core earnings per common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)		47,086,824					47,175,071					47,315,725					43,070,672
Earnings per diluted common share (GAAP)		$	1.20				$	0.94				$	3.98				$	0.93
Core earnings per diluted common share (non-GAAP)		$	1.10				$	1.10				$	3.47				$	3.10
Core return on average assets (non-GAAP):
Average assets (GAAP)		$	12,886,460				$	12,835,893				$	12,827,195				$	11,483,477
Return on average assets (GAAP)				1.75	%				1.38	%				1.98	%				0.47	%
Core return on average assets (non-GAAP)				1.60	%				1.62	%				1.71	%				1.55	%
Core return on average tangible common equity (non-GAAP):
Average total stockholders' equity (GAAP)		$	1,554,765				$	1,401,746				$	1,518,881				$	1,307,791
Average goodwill		(370,223			)		(370,548			)		(370,223			)		(363,906			)
Average other intangible assets, net		(28,600			)		(35,470			)		(30,228			)		(26,572			)
Average tangible common equity (non-GAAP)		$	1,155,942				$	995,728				$	1,118,430				$	917,313
Return on average tangible common equity (GAAP)				19.56	%				17.84	%				22.68	%				5.87	%
Core return on average tangible common equity (non-GAAP)				17.85	%				20.83	%				19.62	%				19.46	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED

(Dollars in thousands)		September 30, 2021				December 31, 2020				September 30, 2020
Assets
Cash and due from banks		$	105,937			$	93,651			$	107,364
Federal funds sold		352				291				390
Interest-bearing deposits with banks		1,008,344				203,061				117,129
Cash and cash equivalents		1,114,633				297,003				224,883
Residential mortgage loans held for sale (at fair value)		44,678				78,294				88,728
Investments available-for-sale (at fair value)		1,429,555				1,348,021				1,357,205
Other equity securities		41,097				65,760				68,528
Total loans		9,721,348				10,400,509				10,333,935
Less: allowance for credit losses		(107,920		)		(165,367		)		(170,314		)
Net loans		9,613,428				10,235,142				10,163,621
Premises and equipment, net		58,362				57,720				58,738
Other real estate owned		1,105				1,455				1,389
Accrued interest receivable		36,219				46,431				48,176
Goodwill		370,223				370,223				370,549
Other intangible assets, net		27,531				32,521				34,175
Other assets		280,633				265,859				262,139
Total assets		$	13,017,464			$	12,798,429			$	12,678,131
Liabilities
Noninterest-bearing deposits		$	3,987,411			$	3,325,547			$	3,458,804
Interest-bearing deposits		6,999,989				6,707,522				6,506,165
Total deposits		10,987,400				10,033,069				9,964,969
Securities sold under retail repurchase agreements and federal funds purchased		147,504				543,157				462,706
Advances from FHLB		—				379,075				444,210
Subordinated debt		172,639				227,088				230,300
Total borrowings		320,143				1,149,320				1,137,216
Accrued interest payable and other liabilities		163,861				146,085				151,197
Total liabilities		11,471,404				11,328,474				11,253,382
Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 46,119,074, 47,056,777 and 47,025,779 at September 30, 2021, December 31, 2020 and September 30, 2020, respectively		46,119				47,057				47,026
Additional paid in capital		799,766				846,922				845,399
Retained earnings		701,301				557,271				514,831
Accumulated other comprehensive income/ (loss)		(1,126		)		18,705				17,493
Total stockholders' equity		1,546,060				1,469,955				1,424,749
Total liabilities and stockholders' equity		$	13,017,464			$	12,798,429			$	12,678,131

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)		2021				2020				2021				2020
Interest income:
Interest and fees on loans		$	104,384			$	106,560			$	319,563			$	288,721
Interest on loans held for sale		379				398				1,465				1,094
Interest on deposits with banks		302				84				395				419
Interest and dividends on investment securities:
Taxable		3,958				4,488				12,230				17,270
Tax-advantaged		2,106				1,454				6,560				4,264
Interest on federal funds sold		—				—				—				1
Total interest income		111,129				112,984				340,213				311,769
Interest Expense:
Interest on deposits		3,521				9,439				12,202				35,241
Interest on retail repurchase agreements and federal funds purchased		43				551				139				1,731
Interest on advances from FHLB		—				2,841				2,649				3,863
Interest on subordinated debt		961				2,669				5,973				7,602
Total interest expense		4,525				15,500				20,963				48,437
Net interest income		106,604				97,484				319,250				263,332
Provision/ (credit) for credit losses		(8,229		)		7,003				(47,141		)		90,158
Net interest income after provision/ (credit) for credit losses		114,833				90,481				366,391				173,174
Non-interest income:
Investment securities gains		49				51				178				432
Service charges on deposit accounts		2,108				1,673				5,936				5,149
Mortgage banking activities		4,942				14,108				20,887				25,567
Wealth management income		9,392				7,785				27,243				22,355
Insurance agency commissions		2,285				2,122				5,685				5,439
Income from bank owned life insurance		818				708				2,203				2,162
Bank card fees		1,775				1,525				5,078				4,102
Other income		3,025				1,418				12,309				5,276
Total non-interest income		24,394				29,390				79,519				70,482
Non-interest expense:
Salaries and employee benefits		38,653				36,041				114,295				98,391
Occupancy expense of premises		5,728				5,575				16,712				16,147
Equipment expenses		3,214				3,133				9,456				9,103
Marketing		1,376				1,305				3,640				3,223
Outside data services		2,317				2,614				6,860				6,365
FDIC insurance		361				1,340				3,303				3,200
Amortization of intangible assets		1,635				1,968				4,991				4,566
Merger and acquisition expense		—				1,263				45				25,171
Professional fees and services		3,031				1,800				7,927				5,466
Other expenses		6,866				5,898				27,100				22,489
Total non-interest expense		63,181				60,937				194,329				194,121
Income before income tax expense		76,046				58,934				251,581				49,535
Income tax expense		19,070				14,292				61,878				9,244
Net income		$	56,976			$	44,642			$	189,703			$	40,291
Net income per share amounts:
Basic net income per common share		$	1.21			$	0.94			$	4.00			$	0.93
Diluted net income per common share		$	1.20			$	0.94			$	3.98			$	0.93
Dividends declared per share		$	0.32			$	0.30			$	0.96			$	0.90

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

		2021															2020
(Dollars in thousands, except per share data)		Q3					Q2					Q1					Q4					Q3					Q2						Q1
Profitability for the quarter:
Tax-equivalent interest income		$	112,060				$	115,753				$	115,241				$	112,843				$	113,627				$	116,252					$	84,966
Interest expense		4,525					6,777					9,661					11,964					15,500					13,413						19,524
Tax-equivalent net interest income		107,535					108,976					105,580					100,879					98,127					102,839						65,442
Tax-equivalent adjustment		931					930					980					1,052					643					1,325						1,108
Provision/ (credit) for credit losses		(8,229			)		(4,204			)		(34,708			)		(4,489			)		7,003					58,686						24,469
Non-interest income		24,394					26,259					28,866					32,234					29,390					22,924						18,168
Non-interest expense		63,181					62,975					68,173					61,661					60,937					85,438						47,746
Income/ (loss) before income tax expense/ (benefit)		76,046					75,534					100,001					74,889					58,934					(19,686				)		10,287
Income tax expense/ (benefit)		19,070					18,271					24,537					18,227					14,292					(5,348				)		300
Net income/ (loss)		$	56,976				$	57,263				$	75,464				$	56,662				$	44,642				$	(14,338			)		$	9,987
Financial performance:
Pre-tax pre-provision pre-merger income		$	67,817				$	71,330				$	65,338				$	70,403				$	67,200				$	61,454					$	36,210
Return on average assets				1.75	%				1.79	%				2.39	%				1.78	%				1.38	%				(0.45		)%		0.46					%
Return on average common equity				14.54	%				15.07	%				20.72	%				15.72	%				12.67	%				(4.15		)%		3.55					%
Return on average tangible common equity				19.56	%				20.44	%				28.47	%				21.89	%				17.84	%				(5.80		)%		5.34					%
Net interest margin				3.52	%				3.63	%				3.56	%				3.38	%				3.24	%				3.47		%		3.29					%
Efficiency ratio - GAAP basis (1)				48.23	%				46.89	%				51.08	%				46.69	%				48.03	%				68.66		%		57.87					%
Efficiency ratio - Non-GAAP basis (1)				46.67	%				45.36	%				42.65	%				45.09	%				45.27	%				43.85		%		54.76					%
Per share data:
Net income/ (loss) attributable to common shareholders		$	56,622				$	56,782				$	74,824				$	56,194				$	44,268				$	(14,458			)		$	9,919
Basic net income/ (loss) per common share		$	1.21				$	1.20				$	1.59				$	1.19				$	0.94				$	(0.31			)		$	0.29
Diluted net income/ (loss) per common share		$	1.20				$	1.19				$	1.58				$	1.19				$	0.94				$	(0.31			)		$	0.28
Weighted average diluted common shares		47,086,824					47,523,198					47,415,060					47,284,808					47,175,071					46,988,351							34,743,623
Dividends declared per share		$	0.32				$	0.32				$	0.32				$	0.30				$	0.30				$	0.30					$	0.30
Non-interest income:
Securities gains		$	49				$	71				$	58				$	35				$	51				$	212					$	169
Service charges on deposit accounts		2,108					1,976					1,852					1,917					1,673					1,223							2,253
Mortgage banking activities		4,942					5,776					10,169					14,491					14,108					8,426							3,033
Wealth management income		9,392					9,121					8,730					8,215					7,785					7,604							6,966
Insurance agency commissions		2,285					1,247					2,153					1,356					2,122					1,188							2,129
Income from bank owned life insurance		818					705					680					705					708					809							645
Bank card fees		1,775					1,785					1,518					1,570					1,525					1,257							1,320
Other income		3,025					5,578					3,706					3,945					1,418					2,205							1,653
Total non-interest income		$	24,394				$	26,259				$	28,866				$	32,234				$	29,390				$	22,924					$	18,168
Non-interest expense:
Salaries and employee benefits		$	38,653				$	38,990				$	36,652				$	36,080				$	36,041				$	34,297					$	28,053
Occupancy expense of premises		5,728					5,497					5,487					5,236					5,575					5,991							4,581
Equipment expenses		3,214					3,020					3,222					3,121					3,133					3,219							2,751
Marketing		1,376					1,052					1,212					1,058					1,305					729							1,189
Outside data services		2,317					2,260					2,283					2,394					2,614					2,169							1,582
FDIC insurance		361					1,450					1,492					1,527					1,340					1,378							482
Amortization of intangible assets		1,635					1,659					1,697					1,655					1,968					1,998							600
Merger and acquisition expense		—					—					45					3					1,263					22,454							1,454
Professional fees and services		3,031					3,165					1,731					2,473					1,800					1,840							1,826
Other expenses		6,866					5,882					14,352					8,114					5,898					11,363							5,228
Total non-interest expense		$	63,181				$	62,975				$	68,173				$	61,661				$	60,937				$	85,438					$	47,746

(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; investment 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

		2021															2020
(Dollars in thousands, except per share data)		Q3					Q2					Q1					Q4					Q3					Q2					Q1
Balance sheets at quarter end:
Commercial investor real estate loans		$	3,743,698				$	3,712,374				$	3,652,418				$	3,634,720				$	3,588,702				$	3,581,778				$	2,241,240
Commercial owner-occupied real estate loans		1,661,092					1,687,843					1,644,848					1,642,216					1,652,208					1,601,803					1,305,682
Commercial AD&C loans		1,177,949					1,126,960					1,051,013					1,050,973					994,800					997,423					643,114
Commercial business loans		1,594,528					1,974,366					2,411,109					2,267,548					2,227,246					2,222,810					813,525
Residential mortgage loans		911,997					960,527					1,022,546					1,105,179					1,173,857					1,211,745					1,116,512
Residential construction loans		181,319					172,869					171,028					182,619					175,123					169,050					149,573
Consumer loans		450,765					457,576					493,904					517,254					521,999					558,434					453,346
Total loans		9,721,348					10,092,515					10,446,866					10,400,509					10,333,935					10,343,043					6,722,992
Allowance for credit losses		(107,920			)		(123,961			)		(130,361			)		(165,367			)		(170,314			)		(163,481			)		(85,800			)
Loans held for sale		44,678					71,082					84,930					78,294					88,728					68,765					67,114
Investment securities		1,470,652					1,482,123					1,472,727					1,413,781					1,425,733					1,424,652					1,250,560
Interest-earning assets		12,245,374					12,167,067					12,132,405					12,095,936					11,965,915					12,447,146					8,222,589
Total assets		13,017,464					12,925,577					12,873,366					12,798,429					12,678,131					13,290,447					8,929,602
Noninterest-bearing demand deposits		3,987,411					4,000,636					3,770,852					3,325,547					3,458,804					3,434,038					1,939,937
Total deposits		10,987,400					10,866,466					10,677,752					10,033,069					9,964,969					10,076,834					6,593,874
Customer repurchase agreements		147,504					140,708					129,318					153,157					142,287					143,579					125,305
Total interest-bearing liabilities		7,320,132					7,233,536					7,423,262					7,856,842					7,643,381					8,313,546					5,732,349
Total stockholders' equity		1,546,060					1,562,280					1,511,694					1,469,955					1,424,749					1,390,093					1,116,334
Quarterly average balance sheets:
Commercial investor real estate loans		$	3,678,886				$	3,675,119				$	3,634,174				$	3,599,648				$	3,582,751				$	3,448,882				$	2,202,461
Commercial owner-occupied real estate loans		1,671,442					1,663,543					1,638,885					1,643,817					1,628,474					1,681,674					1,285,257
Commercial AD&C loans		1,161,183					1,089,287					1,049,597					1,017,304					977,607					969,251					659,494
Commercial business loans		1,820,598					2,225,885					2,291,097					2,189,828					2,207,388					1,899,264					819,133
Residential mortgage loans		934,365					994,899					1,066,714					1,136,989					1,189,452					1,208,566					1,139,786
Residential construction loans		170,511					176,135					179,925					180,494					173,280					162,978					145,266
Consumer loans		452,289					468,686					496,578					515,202					543,242					575,734					465,314
Total loans		9,889,274					10,293,554					10,356,970					10,283,282					10,302,194					9,946,349					6,716,711
Loans held for sale		50,075					66,958					82,263					68,255					54,784					53,312					35,030
Investment securities		1,403,496					1,482,905					1,407,455					1,418,683					1,404,238					1,398,586					1,179,084
Interest-earning assets		12,121,048					12,037,701					12,029,424					11,882,542					12,049,463					11,921,132					7,994,618
Total assets		12,886,460					12,798,355					12,801,539					12,645,329					12,835,893					12,903,156					8,699,342
Noninterest-bearing demand deposits		3,869,293					3,763,135					3,394,110					3,424,729					3,281,607					3,007,222					1,797,227
Total deposits		10,832,115					10,663,346					10,343,190					9,999,144					9,862,639					9,614,176					6,433,694
Customer repurchase agreements		145,483					136,286					148,195					146,685					142,694					144,050					135,652
Total interest-bearing liabilities		7,315,021					7,356,656					7,742,987					7,609,829					7,969,487					8,326,909					5,612,056
Total stockholders' equity		1,554,765					1,523,875					1,477,150					1,433,900					1,401,746					1,390,544					1,130,051
Financial measures:
Average equity to average assets				12.07	%				11.91	%				11.54	%				11.34	%				10.92	%				10.78	%				12.99	%
Investment securities to earning assets				12.01	%				12.18	%				12.14	%				11.69	%				11.91	%				11.45	%				15.21	%
Loans to earning assets				79.39	%				82.95	%				86.11	%				85.98	%				86.36	%				83.10	%				81.76	%
Loans to assets				74.68	%				78.08	%				81.15	%				81.26	%				81.51	%				77.82	%				75.29	%
Loans to deposits				88.48	%				92.88	%				97.84	%				103.66	%				103.70	%				102.64	%				101.96	%
Capital measures:
Tier 1 leverage (1)				9.23	%				9.49	%				9.14	%				8.92	%				8.65	%				8.35	%				8.78	%
Common equity tier 1 capital to risk-weighted assets (1)				12.50	%				12.47	%				12.09	%				10.58	%				10.45	%				10.23	%				10.23	%
Tier 1 capital to risk-weighted assets (1)				12.50	%				12.47	%				12.09	%				10.58	%				10.45	%				10.23	%				10.23	%
Total regulatory capital to risk-weighted assets (1)				15.26	%				15.82	%				15.49	%				13.93	%				14.02	%				13.79	%				14.09	%
Book value per common share		$	33.52				$	33.02				$	32.04				$	31.24				$	30.30				$	29.58				$	32.68
Outstanding common shares		46,119,074					47,312,982					47,187,389					47,056,777					47,025,779					47,001,022					34,164,672

(1) Estimated ratio at September 30, 2021.

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

		2021												2020
(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		$	14,830			$	—			$	—			$	133			$	—			$	775			$	—
Commercial owner-occupied real estate		—				—				—				—				—				515				—
Commercial AD&C		7,344				—				—				—				—				—				—
Commercial business		—				—				31				161				93				—				—
Residential real estate:
Residential mortgage		679				680				398				480				320				138				8
Residential construction		—				—				—				—				—				—				—
Consumer		—				—				—				—				1				—				—
Total loans 90 days past due		22,853				680				429				774				414				1,428				8
Non-accrual loans:
Commercial real estate:
Commercial investor real estate		15,386				42,072				42,776				45,227				26,784				26,482				17,770
Commercial owner-occupied real estate		9,854				8,183				8,316				11,561				6,511				6,729				4,074
Commercial AD&C		1,022				14,489				14,975				15,044				1,678				2,957				829
Commercial business		9,454				9,435				13,147				22,933				17,659				20,246				10,834
Residential real estate:
Residential mortgage		9,511				9,440				9,593				10,212				11,296				11,724				12,271
Residential construction		62				62				—				—				—				—				—
Consumer		7,826				7,718				7,193				7,384				7,493				7,800				5,596
Total non-accrual loans		53,115				91,399				96,000				112,361				71,421				75,938				51,374
Total restructured loans - accruing		2,199				2,228				2,271				2,317				2,854				2,553				2,575
Total non-performing loans		78,167				94,307				98,700				115,452				74,689				79,919				53,957
Other assets and other real estate owned (OREO)		1,105				1,234				1,354				1,455				1,389				1,389				1,416
Total non-performing assets		$	79,272			$	95,541			$	100,054			$	116,907			$	76,078			$	81,308			$	55,373

		For the Quarter Ended,
(Dollars in thousands)		September 30, 2021					June 30, 2021					March 31, 2021					December 31, 2020					September 30, 2020					June 30, 2020						March 31, 2020
Analysis of non-accrual loan activity:
Balance at beginning of period		$	91,399				$	96,000				$	112,361				$	71,421				$	75,938				$	51,374					$	38,632
Purchased credit deteriorated loans designated as non-accrual		—					—					—					—					—					—						13,084
Non-accrual balances transferred to OREO		—					(257			)		—					(70			)		—					—						—
Non-accrual balances charged-off		(7,171			)		(2,166			)		(699			)		(513			)		(144			)		(162				)		(575			)
Net payments or draws		(36,526			)		(3,693			)		(16,028			)		(13,212			)		(4,248			)		(1,881				)		(1,860			)
Loans placed on non-accrual		5,699					1,515					421					54,735					893					27,289						2,369
Non-accrual loans brought current		(286			)		—					(55			)		—					(1,018			)		(682				)		(276			)
Balance at end of period		$	53,115				$	91,399				$	96,000				$	112,361				$	71,421				$	75,938					$	51,374
Analysis of allowance for credit losses:
Balance at beginning of period		$	123,961				$	130,361				$	165,367				$	170,314				$	163,481				$	85,800					$	56,132
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		(8,229			)		(4,204			)		(34,708			)		(4,489			)		7,003					58,686						24,469
Less loans charged-off, net of recoveries:
Commercial real estate:
Commercial investor real estate		5,797					(144			)		(27			)		379					21					(4				)		—
Commercial owner-occupied real estate		136					—					—					—					—					—						—
Commercial AD&C		2,007					—					—					—					—					—						—
Commercial business		(53			)		2,359					634					56					88					(463				)		108
Residential real estate:
Residential mortgage		(49			)		(11			)		(270			)		37					(6			)		15						333
Residential construction		(2			)		(1			)		—					(1			)		(2			)		(1				)		(2			)
Consumer		(24			)		(7			)		(39			)		(13			)		69					86						107
Net charge-offs/ (recoveries)		7,812					2,196					298					458					170					(367				)		546
Balance at the end of period		$	107,920				$	123,961				$	130,361				$	165,367				$	170,314				$	163,481					$	85,800
Asset quality ratios:
Non-performing loans to total loans				0.80	%				0.93	%				0.94	%				1.11	%				0.72	%				0.77	%					0.80	%
Non-performing assets to total assets				0.61	%				0.74	%				0.78	%				0.91	%				0.60	%				0.61	%					0.62	%
Allowance for credit losses to loans				1.11	%				1.23	%				1.25	%				1.59	%				1.65	%				1.58	%					1.28	%
Allowance for credit losses to non-performing loans				138.06	%				131.44	%				132.08	%				143.23	%				228.03	%				204.56	%					159.02	%
Annualized net charge-offs/ (recoveries) to average loans				0.31	%				0.09	%				0.01	%				0.02	%				0.01	%				(0.01	)%					0.03	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

		Three Months Ended September 30,
		2021											2020
(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		$	3,678,886			$	37,760			4.07	%		$	3,582,751			$	39,547			4.39	%
Commercial owner-occupied real estate loans		1,671,442				19,184				4.55			1,628,474				19,215				4.69
Commercial AD&C loans		1,161,183				11,702				4.00			977,607				10,647				4.33
Commercial business loans		1,820,598				22,849				4.98			2,207,388				20,015				3.61
Total commercial loans		8,332,109				91,495				4.36			8,396,220				89,424				4.24
Residential mortgage loans		934,365				7,867				3.37			1,189,452				10,899				3.67
Residential construction loans		170,511				1,438				3.35			173,280				1,733				3.98
Consumer loans		452,289				4,033				3.54			543,242				5,053				3.70
Total residential and consumer loans		1,557,165				13,338				3.41			1,905,974				17,685				3.70
Total loans (2)		9,889,274				104,833				4.21			10,302,194				107,109				4.14
Loans held for sale		50,075				379				3.03			54,784				398				2.91
Taxable securities		984,452				3,958				1.61			1,148,573				4,190				1.46
Tax-advantaged securities		419,044				2,588				2.47			255,665				1,846				2.89
Total investment securities (3)		1,403,496				6,546				1.87			1,404,238				6,036				1.72
Interest-bearing deposits with banks		777,763				302				0.15			287,817				84				0.12
Federal funds sold		440				—				0.16			430				—				0.10
Total interest-earning assets		12,121,048				112,060				3.67			12,049,463				113,627				3.75
Less: allowance for credit losses		(121,630		)									(162,488		)
Cash and due from banks		100,292											128,193
Premises and equipment, net		57,220											59,182
Other assets		729,530											761,543
Total assets		$	12,886,460										$	12,835,893
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,425,893			$	238			0.07	%		$	1,144,328			$	365			0.13	%
Regular savings deposits		494,331				67				0.05			391,291				66				0.07
Money market savings deposits		3,484,101				1,234				0.14			3,022,710				2,508				0.33
Time deposits		1,558,497				1,982				0.50			2,022,703				6,500				1.28
Total interest-bearing deposits		6,962,822				3,521				0.20			6,581,032				9,439				0.57
Other borrowings		145,551				43				0.12			709,217				551				0.31
Advances from FHLB		—				—				—			448,929				2,841				2.52
Subordinated debt		206,648				961				1.86			230,309				2,669				4.64
Total borrowings		352,199				1,004				1.13			1,388,455				6,061				1.74
Total interest-bearing liabilities		7,315,021				4,525				0.25			7,969,487				15,500				0.77
Noninterest-bearing demand deposits		3,869,293											3,281,607
Other liabilities		147,381											183,053
Stockholders' equity		1,554,765											1,401,746
Total liabilities and stockholders' equity		$	12,886,460										$	12,835,893
Tax-equivalent net interest income and spread						$	107,535			3.42	%						$	98,127			2.98	%
Less: tax-equivalent adjustment						931											643
Net interest income						$	106,604										$	97,484
Interest income/earning assets										3.67	%										3.75	%
Interest expense/earning assets										0.15											0.51
Net interest margin										3.52	%										3.24	%

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.64% and 25.54% for 2021 and 2020, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $0.9 million and $0.6 million in 2021 and 2020, 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,
		2021											2020
(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		$	3,662,890			$	114,525			4.18	%		$	3,079,873			$	103,238			4.48	%
Commercial owner-occupied real estate loans		1,658,076				57,224				4.61			1,532,154				54,215				4.73
Commercial AD&C loans		1,100,431				32,917				4.00			869,181				29,862				4.59
Commercial business loans		2,110,803				72,891				4.62			1,643,992				49,618				4.03
Total commercial loans		8,532,200				277,557				4.35			7,125,200				236,933				4.44
Residential mortgage loans		998,174				26,045				3.48			1,179,305				32,899				3.72
Residential construction loans		175,489				4,606				3.51			160,555				4,985				4.15
Consumer loans		472,356				12,761				3.61			528,152				15,550				3.93
Total residential and consumer loans		1,646,019				43,412				3.52			1,868,012				53,434				3.82
Total loans (2)		10,178,219				320,969				4.22			8,993,212				290,367				4.31
Loans held for sale		66,314				1,465				2.95			47,734				1,094				3.05
Taxable securities		984,354				12,230				1.66			1,095,419				17,557				2.14
Tax-advantaged securities		446,917				7,995				2.39			232,165				5,407				3.11
Total investment securities (3)		1,431,271				20,225				1.88			1,327,584				22,964				2.31
Interest-bearing deposits with banks		386,717				395				0.14			291,260				419				0.19
Federal funds sold		538				—				0.11			369				1				0.36
Total interest-earning assets		12,063,059				343,054				3.80			10,660,159				314,845				3.94
Less: allowance for credit losses		(138,378		)									(114,613		)
Cash and due from banks		101,433											126,607
Premises and equipment, net		56,439											59,357
Other assets		744,642											751,967
Total assets		$	12,827,195										$	11,483,477
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,397,623			$	700			0.07	%		$	1,017,873			$	1,519			0.20	%
Regular savings deposits		472,059				189				0.05			363,303				212				0.08
Money market savings deposits		3,419,948				3,951				0.15			2,588,870				10,554				0.54
Time deposits		1,647,792				7,362				0.60			1,973,773				22,956				1.55
Total interest-bearing deposits		6,937,422				12,202				0.24			5,943,819				35,241				0.79
Other borrowings		163,569				139				0.11			553,898				1,731				0.42
Advances from FHLB		148,823				2,649				2.38			585,063				3,863				0.88
Subordinated debt		220,175				5,973				3.62			222,470				7,602				4.56
Total borrowings		532,567				8,761				2.20			1,361,431				13,196				1.29
Total interest-bearing liabilities		7,469,989				20,963				0.37			7,305,250				48,437				0.89
Noninterest-bearing demand deposits		3,677,254											2,697,492
Other liabilities		161,071											172,944
Stockholders' equity		1,518,881											1,307,791
Total liabilities and stockholders' equity		$	12,827,195										$	11,483,477
Tax-equivalent net interest income and spread						$	322,091			3.43	%						$	266,408			3.05	%
Less: tax-equivalent adjustment						2,841											3,076
Net interest income						$	319,250										$	263,332
Interest income/earning assets										3.80	%										3.94	%
Interest expense/earning assets										0.23											0.61
Net interest margin										3.57	%										3.33	%

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.64% and 25.54% for 2021 and 2020, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $2.8 million and $3.1 million in 2021 and 2020, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Available-for-sale investments are presented at amortized cost.

FAQ

What was Sandy Spring Bancorp's net income for Q3 2021?

Sandy Spring Bancorp reported a net income of $57.0 million for Q3 2021.

How much did total assets grow for Sandy Spring Bancorp?

Total assets increased by 3% to $13.0 billion year-over-year.

What is the provision for credit losses reported by Sandy Spring Bancorp?

The provision for credit losses was a credit of $8.2 million for Q3 2021.

How did Sandy Spring Bancorp's non-interest income change in Q3 2021?

Non-interest income decreased by 17% compared to the prior year due to a significant drop in mortgage banking activities.

What were the key results for Sandy Spring Bancorp in Q3 2021?

Key results include a net income of $57.0 million and a net interest margin of 3.52%.