Sandy Spring Bancorp Reports First Quarter Earnings of $20.4 Million

OLNEY, Md., April 23, 2024 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income of $20.4 million ($0.45 per diluted common share) for the quarter ended March 31, 2024, compared to net income of $26.1 million ($0.58 per diluted common share) for the fourth quarter of 2023 and $51.3 million ($1.14 per diluted common share) for the first quarter of 2023.

Current quarter's core earnings were $21.9 million ($0.49 per diluted common share), compared to $27.1 million ($0.60 per diluted common share) for the quarter ended December 31, 2023 and $52.3 million ($1.16 per diluted common share) for the quarter ended March 31, 2023. Core earnings exclude the after-tax impact of amortization of intangibles, investment securities gains or losses and other non-recurring or extraordinary items. The current quarter's decline of net income and core earnings as compared to the linked quarter was driven by an increase to the provision for credit losses coupled with lower net interest income and higher non-interest expense, partially offset by higher non-interest income. The total provision for credit losses was $2.4 million for the first quarter of 2024 compared to a credit of $3.4 million for the previous quarter and a credit of $21.5 million for the first quarter of 2023.

“We continued to gain momentum this quarter in several critical areas, including growing core funding and maintaining a strong liquidity position. We also continued to uphold our credit quality through prudent risk management and our hands-on approach to working with our clients,” said Daniel J. Schrider, Chair, President & CEO of Sandy Spring Bank.

“As we move through the year, we remain focused on expanding client relationships through enhanced products, services and digital solutions and by delivering local and remarkable client service,” Schrider added.

First Quarter Highlights

• Total assets at March 31, 2024 decreased by 1% to $13.9 billion compared to $14.0 billion at December 31, 2023.

• Total loans remained level at $11.4 billion as of March 31, 2024 compared to December 31, 2023. During the current quarter, we reduced our concentration in the investor commercial real estate segment by $106.5 million, while the AD&C portfolio increased $101.3 million. Total commercial business loans and lines and mortgage and consumer loan portfolios remained relatively unchanged during this period.

• Deposits increased $230.7 million or 2% to $11.2 billion at March 31, 2024 compared to $11.0 billion at December 31, 2023, as interest-bearing deposits increased $326.9 million, while noninterest-bearing deposits declined $96.2 million. Strong growth in the interest-bearing deposit categories was mainly experienced within savings accounts, which grew by $303.9 million compared to the linked quarter. Interest checking and money market accounts increased $64.5 million and $51.6 million, respectively, while time deposits decreased $93.0 million. The decline within noninterest-bearing deposit categories was driven by lower balances in commercial and small business checking accounts.

• The ratio of non-performing loans to total loans was 0.74% at March 31, 2024 compared to 0.81% at December 31, 2023 and 0.41% at March 31, 2023. The current quarter's reduction in non-performing loans was related to full payoffs of several non-accrual loans in combination with the movement of one investment commercial real estate loan from a non-accrual category to the other real estate owned. Net charge-offs for the current quarter totaled $1.1 million.

• Total borrowings declined $353.4 million at March 31, 2024 compared to the previous quarter, due to the full payoff of $300.0 million in outstanding borrowings through the Federal Reserve Bank's Bank Term Funding Program and a $50.0 million reduction in FHLB advances.

• Net interest income for the first quarter of 2024 declined $2.4 million or 3% compared to the previous quarter and $18.0 million or 18% compared to the first quarter of 2023. Compared to the previous quarter, the $0.4 million growth in interest income for the current quarter was more than offset by the $2.7 million increase in interest expense.

• The net interest margin was 2.41% for the first quarter of 2024 compared to 2.45% for the fourth quarter of 2023 and 2.99% for the first quarter of 2023. Overall, the rate of net interest margin contraction slowed down during the current quarter and we experienced a margin increase during the last month of the current quarter. Compared to the linked quarter, the rate paid on interest-bearing liabilities rose 10 basis points, while the yield on interest-earning assets increased 9 basis points.

• Provision for credit losses directly attributable to the funded loan portfolio was $3.3 million for the current quarter compared to a credit of $2.6 million in the previous quarter and a credit of $18.9 million in the prior year quarter. The increase in the provision during the current quarter was attributable to the adjustments of risk factors applied to specific industries within the commercial real estate segment, partially offset by lower individual reserves, the result of several payoffs of non-accrual loans, and the reduced probability of an economic recession. In addition, during the current quarter, the reserve for unfunded commitments decreased by $0.9 million, a result of higher utilization rates on lines of credit.

• Non-interest income for the first quarter of 2024 increased by 11% or $1.8 million compared to the linked quarter and grew by 15% or $2.4 million compared to the prior year quarter. The quarter-over-quarter increase was mainly driven by higher wealth management income, due to a 3% increase in assets under management and the overall favorable market performance, along with higher income from mortgage banking activities and other income, generated by increased credit-related fees.

• Non-interest expense for the first quarter of 2024 increased $0.9 million or 1% compared to the fourth quarter of 2023 and $1.7 million or 3% compared to the prior year quarter. The quarterly increase in non-interest expense was primarily due to higher salaries and benefits as more employees were subject to employer-related payroll taxes during the current quarter as compared to the linked quarter, partially offset by lower professional fees and lower marketing expense.

• Return on average assets (“ROA”) for the quarter ended March 31, 2024 was 0.58% and return on average tangible common equity (“ROTCE”) was 7.39% compared to 0.73% and 9.26%, respectively, for the fourth quarter of 2023 and 1.49% and 19.10%, respectively, for the first quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.63% and core ROTCE was 7.39% compared to 0.76% and 9.26%, respectively, for the previous quarter and 1.52% and 19.11%, respectively, for the first quarter of 2023.

• The GAAP efficiency ratio was 69.60% for the first quarter of 2024, compared to 68.33% for the fourth quarter of 2023 and 58.55% for the first quarter of 2023. The non-GAAP efficiency ratio was 66.73% for the first quarter of 2024 compared to 66.16% for the fourth quarter of 2023 and 56.87% for the prior year quarter. The increase in non-GAAP efficiency ratio (reflecting a decrease in efficiency) in the current quarter compared to the previous quarter and the first 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 $13.9 billion at March 31, 2024, as compared to $14.0 billion at December 31, 2023. At March 31, 2024 total loans were stable at $11.4 billion compared to the previous quarter. Investment commercial real estate loans decreased $106.5 million or 2% quarter-over-quarter, while the AD&C portfolio grew $101.3 million or 10% during this period. Commercial business loans and total mortgage and consumer loan portfolios remained relatively unchanged. Overall, the loan portfolio mix remained consistent compared to the previous quarter.

Deposits increased $230.7 million or 2% to $11.2 billion at March 31, 2024 compared to $11.0 billion at December 31, 2023. During this period interest-bearing deposits increased $326.9 million or 4%, while noninterest-bearing deposits declined by $96.2 million or 3%. Growth within interest-bearing deposit categories was driven by savings accounts, which increased by $303.9 million or 24%. Interest checking accounts and money market accounts grew by $64.5 million or 4% and $51.6 million or 2% during the current quarter, respectively. These increases were partially offset by the $93.0 million or 3% reduction in time deposits, of which $49.8 million was related to a reduction in brokered time deposits. The decline in noninterest-bearing deposit category was primarily driven by decreases of $110.6 million or 9% and $35.9 million or 3% in commercial and small business checking accounts, respectively. Total deposits, excluding brokered deposits, increased by $286.6 million or 3% quarter-over-quarter and represented 93% of the total deposits as of March 31, 2024 compared to 92% at December 31, 2023, reflecting continued strength and 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 March 31, 2024 from 103% at December 31, 2023. Total uninsured deposits at March 31, 2024 were approximately 33% of the total deposits.

Total borrowings declined by $353.4 million or 27% at March 31, 2024 as compared to the previous quarter, driven by a full payoff of $300.0 million of outstanding borrowings through the Federal Reserve Bank's Bank Term Funding Program facility. In addition, FHLB advances were reduced by $50.0 million during the current quarter. At March 31, 2024, contingent liquidity, which consists of available FHLB borrowings, fed funds, funds through the Federal Reserve Bank's discount window, as well as excess cash and unpledged investment securities, totaled $6.3 billion or 170% of uninsured deposits.

The tangible common equity ratio increased to 8.86% of tangible assets at March 31, 2024, compared to 8.77% at December 31, 2023. This increase reflected the impact of a $141.6 million reduction in tangible assets, while tangible common equity remained level during the current quarter.

At March 31, 2024, the Company had a total risk-based capital ratio of 15.05%, a common equity tier 1 risk-based capital ratio of 10.96%, a tier 1 risk-based capital ratio of 10.96%, and a tier 1 leverage ratio of 9.56%. 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. At March 31, 2024, non-performing loans totaled $84.4 million, compared to $91.8 million at December 31, 2023 and $47.2 million at March 31, 2023. Non-performing loans to total loans ratio was 0.74% compared to 0.81% on a linked quarter basis. These levels of non-performing loans compare to 0.41% at March 31, 2023. The current quarter's decrease in non-performing loans was mainly related to several full payoffs, charge-offs and the transfer of one commercial real estate loan into other real estate owned. The majority of the non-accrual loans fully paid off during the current quarter were previously adequately reserved for, which provided a benefit to the current quarter's provision expense as the respective individual reserves were released upon the full payoff. Additionally, during the current quarter, we foreclosed on and transferred one investment commercial real estate property out of non-accrual loan category into the other real estate owned. Total net charge-offs for the current quarter amounted to $1.1 million compared to net recoveries of $0.1 million for the fourth quarter of 2023 and $0.3 million of net recoveries for the first quarter of 2023.

At March 31, 2024, the allowance for credit losses was $123.1 million or 1.08% of outstanding loans and 146% of non-performing loans, compared to $120.9 million or 1.06% of outstanding loans and 132% of non-performing loans at the end of the previous quarter and $117.6 million or 1.03% of outstanding loans and 249% of non-performing loans at the end of the first quarter of 2023. The increase in the allowance for the current quarter compared to the previous quarter mainly reflects updates to risk adjustments applied to specific industries within the commercial real estate segment, partially offset by lower individual reserves due to non-accrual loan payoffs and the reduced probability of an economic recession.

Income Statement Review

Quarterly Results

Net income was $20.4 million ($0.45 per diluted common share) for the three months ended March 31, 2024 compared to $26.1 million ($0.58 per diluted common share) for the three months ended December 31, 2023 and $51.3 million ($1.14 per diluted common share) for the prior year quarter. The current quarter's core earnings were $21.9 million ($0.49 per diluted common share), compared to $27.1 million ($0.60 per diluted common share) for the previous quarter and $52.3 million ($1.16 per diluted common share) for the quarter ended March 31, 2023. The declines in the current quarter's net income and core earnings compared to the previous quarter were driven primarily by a higher provision for credit losses coupled with the decline in net interest income.

Net interest income for the first quarter of 2024 decreased $2.4 million or 3% compared to the previous quarter and $18.0 million or 18% compared to the first quarter of 2023. Both linked quarter 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 $14.7 million year-over-year increase in interest income. This growth in interest income was more than offset by the $32.6 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, and consumer loans.

The net interest margin was 2.41% for the first quarter of 2024 compared to 2.45% for the fourth quarter of 2023 and 2.99% for the first quarter of 2023. The contraction of the net interest margin slowed down during the current quarter as the rate paid on interest-bearing liabilities rose 10 basis points, while the yield on interest-earning assets increased 9 basis points. The rate and yield increases year-over-year were driven by the several federal funds rate increases that occurred over the preceding twelve months, 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 38 basis points while the rate paid on interest-bearing liabilities rose 115 basis points, resulting in net interest margin compression of 58 basis points. With respect to the current quarter, margin compression began to reverse itself as the net interest income and net interest margin increased during the last month of the current quarter.

The total provision for credit losses was $2.4 million for the first quarter of 2024 compared to a credit of $3.4 million for the previous quarter and a credit of $21.5 million for the first quarter of 2023. The provision for credit losses directly attributable to the funded loan portfolio was $3.3 million for the current quarter compared to a credit of $2.6 million for the fourth quarter of 2023 and the prior year quarter’s credit of $18.9 million. The current quarter's provision is mainly a reflection of adjustments applied to specific industries within the commercial real estate segment, partially offset by lower individual reserves due to full payoffs of several non-accrual loans along with the lower probability of an economic recession.

Non-interest income for the first quarter of 2024 increased by 11% or $1.8 million compared to the linked quarter and grew by 15% or $2.4 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 the $0.7 million increase in wealth management income due to the $166.0 million or 3% growth in assets under management and the overall favorable market performance. Additionally, income from mortgage banking activities and other income, a result of increased credit-related fees, increased by $0.6 million and $0.5 million, respectively.

Non-interest expense for the first quarter of 2024 increased $0.9 million or 1% compared to the fourth quarter of 2023 and $1.7 million or 3% compared to the first quarter of 2023. Quarter-over-quarter increase is predominantly attributable to the $1.2 million increase in salaries and benefits, as more employees were subject to employer-related payroll taxes during the current quarter as compared to the previous quarter. This increase was partially offset by lower professional fees and lower marketing expense, which declined by $0.7 million and $0.5 million, respectively.

For the first quarter of 2024, the GAAP efficiency ratio was 69.60% compared to 68.33% for the fourth quarter of 2023 and 58.55% for the first quarter of 2023. The GAAP efficiency ratio rose from the prior year quarter primarily as a result of the 14% decrease in GAAP revenue in combination with the 3% increase in GAAP non-interest expense. The non-GAAP efficiency ratio was 66.73% for the current quarter as compared to 66.16% for the fourth quarter of 2023 and 56.87% for the first quarter of 2023. The increase in the non-GAAP efficiency ratio (reflecting a decrease in efficiency) from the first quarter of the prior year to the current year quarter was primarily the result of the 13% decline in non-GAAP revenue, while non-GAAP expenses increased 1%.

ROA for the quarter ended March 31, 2024 was 0.58% and ROTCE was 7.39% compared to 0.73% and 9.26%, respectively, for the fourth quarter of 2023 and 1.49% and 19.10%, respectively, for the first quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.63% and core ROTCE was 7.39% compared to 0.76% and 9.26% for the fourth quarter of 2023 and 1.52% and 19.11%, respectively, for the first quarter of 2023.

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), 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, 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 first 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: 186461. 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 May 7, 2024. A replay of the teleconference will be available through the same time period by calling 1-866-813-9403 under conference call number 131243.

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, 2023, 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 March 31,
(Dollars in thousands, except per share data)		2024				2023				% Change
Results of operations:
Net interest income		$	79,343			$	97,302			(18	)%
Provision/ (credit) for credit losses		2,388				(21,536		)		N/M
Non-interest income		18,367				15,951				15
Non-interest expense		68,006				66,305				3
Income before income tax expense		27,316				68,484				(60	)
Net income		20,372				51,253				(60	)
Net income attributable to common shareholders		$	20,346			$	51,084			(60	)
Pre-tax pre-provision net income (1)		$	29,704			$	46,948			(37	)
Return on average assets		0.58		%		1.49		%
Return on average common equity		5.17		%		13.93		%
Return on average tangible common equity (1)		7.39		%		19.10		%
Net interest margin		2.41		%		2.99		%
Efficiency ratio - GAAP basis (2)		69.60		%		58.55		%
Efficiency ratio - Non-GAAP basis (2)		66.73		%		56.87		%
Per share data:
Basic net income per common share		$	0.45			$	1.14			(61	)%
Diluted net income per common share		$	0.45			$	1.14			(60	)
Weighted average diluted common shares		45,086,471				44,872,582				—
Dividends declared per share		$	0.34			$	0.34			—
Book value per common share		$	35.37			$	34.37			3
Tangible book value per common share (1)		$	26.61			$	25.83			3
Outstanding common shares		44,940,147				44,712,497				1
Financial condition at period-end:
Investment securities		$	1,405,490			$	1,528,336			(8	)%
Loans		11,364,284				11,395,241				—
Assets		13,888,133				14,129,007				(2	)
Deposits		11,227,200				11,075,991				1
Stockholders' equity		1,589,364				1,536,865				3
Capital ratios:
Tier 1 leverage (3)		9.56		%		9.44		%
Common equity tier 1 capital to risk-weighted assets (3)		10.96		%		10.53		%
Tier 1 capital to risk-weighted assets (3)		10.96		%		10.53		%
Total regulatory capital to risk-weighted assets (3)		15.05		%		14.43		%
Tangible common equity to tangible assets (4)		8.86		%		8.40		%
Average equity to average assets		11.27		%		10.70		%
Credit quality ratios:
Allowance for credit losses to loans		1.08		%		1.03		%
Non-performing loans to total loans		0.74		%		0.41		%
Non-performing assets to total assets		0.63		%		0.34		%
Allowance for credit losses to non-performing loans		145.78		%		248.93		%
Annualized net charge-offs/ (recoveries) to average loans (5)		0.04		%		(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 Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, and contingent payment expense from non-interest expense; and investment securities gains/ (losses) 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 March 31, 2024.
(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 March 31,
(Dollars in thousands)		2024				2023
Core earnings (non-GAAP):
Net income (GAAP)		$	20,372			$	51,253
Plus/ (less) non-GAAP adjustments (net of tax)(1):
Amortization of intangible assets			1,544				973
Investment securities gains/ losses			—				—
Contingent payment expense			—				27
Core earnings (Non-GAAP)		$	21,916			$	52,253
Core earnings per diluted common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)			45,086,471				44,872,582
Earnings per diluted common share (GAAP)		$	0.45			$	1.14
Core earnings per diluted common share (non-GAAP)		$	0.49			$	1.16
Core return on average assets (non-GAAP):
Average assets (GAAP)		$	14,061,935			$	13,949,276
Return on average assets (GAAP)			0.58	%			1.49	%
Core return on average assets (non-GAAP)			0.63	%			1.52	%
Return/ Core return on average tangible common equity (non-GAAP):
Net Income (GAAP)		$	20,372			$	51,253
Plus: Amortization of intangible assets (net of tax)			1,544				973
Net income before amortization of intangible assets		$	21,916			$	52,226
Average total stockholders' equity (GAAP)		$	1,584,902			$	1,491,929
Average goodwill			(363,436	)			(363,436	)
Average other intangible assets, net			(29,260	)			(19,380	)
Average tangible common equity (non-GAAP)		$	1,192,206			$	1,109,113
Return on average tangible common equity (non-GAAP)			7.39	%			19.10	%
Core return on average tangible common equity (non-GAAP)			7.39	%			19.11	%

(1)	Tax adjustments have been determined using the combined marginal federal and state rate of 25.37% and 25.47% for 2024 and 2023, respectively.

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED

		Three Months Ended March 31,
(Dollars in thousands)		2024				2023
Pre-tax pre-provision net income:
Net income (GAAP)		$	20,372			$	51,253
Plus/ (less) non-GAAP adjustments:
Income tax expense			6,944				17,231
Provision/ (credit) for credit losses			2,388				(21,536	)
Pre-tax pre-provision net income (non-GAAP)		$	29,704			$	46,948
Efficiency ratio (GAAP):
Non-interest expense		$	68,006			$	66,305
Net interest income plus non-interest income		$	97,710			$	113,253
Efficiency ratio (GAAP)			69.60	%			58.55	%
Efficiency ratio (Non-GAAP):
Non-interest expense		$	68,006			$	66,305
Less non-GAAP adjustments:
Amortization of intangible assets			2,069				1,306
Contingent payment expense			—				36
Non-interest expense - as adjusted		$	65,937			$	64,963
Net interest income plus non-interest income		$	97,710			$	113,253
Plus non-GAAP adjustment:
Tax-equivalent income			1,099				970
Less/ (plus) non-GAAP adjustment:
Investment securities gains/ (losses)			—				—
Net interest income plus non-interest income - as adjusted		$	98,809			$	114,223
Efficiency ratio (Non-GAAP)			66.73	%			56.87	%
Tangible common equity ratio:
Total stockholders' equity		$	1,589,364			$	1,536,865
Goodwill			(363,436	)			(363,436	)
Other intangible assets, net			(29,864	)			(18,549	)
Tangible common equity		$	1,196,064			$	1,154,880
Total assets		$	13,888,133			$	14,129,007
Goodwill			(363,436	)			(363,436	)
Other intangible assets, net			(29,864	)			(18,549	)
Tangible assets		$	13,494,833			$	13,747,022
Tangible common equity ratio			8.86	%			8.40	%
Outstanding common shares			44,940,147				44,712,497
Tangible book value per common share		$	26.61			$	25.83

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

(Dollars in thousands)		March 31, 2024				December 31, 2023
Assets
Cash and due from banks		$	79,305			$	82,257
Federal funds sold			243				245
Interest-bearing deposits with banks			330,842				463,396
Cash and cash equivalents			410,390				545,898
Residential mortgage loans held for sale (at fair value)			16,627				10,836
Investments held-to-maturity (fair values of $192,798 and $200,411 at March 31, 2024 and December 31, 2023, respectively)			231,354				236,165
Investments available-for-sale (at fair value)			1,100,741				1,102,681
Other investments, at cost			73,395				75,607
Total loans			11,364,284				11,366,989
Less: allowance for credit losses - loans			(123,096	)			(120,865	)
Net loans			11,241,188				11,246,124
Premises and equipment, net			59,843				59,490
Other real estate owned			2,700				—
Accrued interest receivable			47,152				46,583
Goodwill			363,436				363,436
Other intangible assets, net			29,864				28,301
Other assets			311,443				313,051
Total assets		$	13,888,133			$	14,028,172
Liabilities
Noninterest-bearing deposits		$	2,817,928			$	2,914,161
Interest-bearing deposits			8,409,272				8,082,377
Total deposits			11,227,200				10,996,538
Securities sold under retail repurchase agreements			71,529				75,032
Federal funds purchased			—				—
Federal Reserve Bank borrowings			—				300,000
Advances from FHLB			500,000				550,000
Subordinated debt			370,952				370,803
Total borrowings			942,481				1,295,835
Accrued interest payable and other liabilities			129,088				147,657
Total liabilities			12,298,769				12,440,030
Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 44,940,147 and 44,913,561 at March 31, 2024 and December 31, 2023, respectively.			44,940				44,914
Additional paid in capital			743,850				742,243
Retained earnings			903,377				898,316
Accumulated other comprehensive loss			(102,803	)			(97,331	)
Total stockholders' equity			1,589,364				1,588,142
Total liabilities and stockholders' equity		$	13,888,133			$	14,028,172

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

		Three Months Ended March 31,
(Dollars in thousands, except per share data)		2024			2023
Interest income:
Interest and fees on loans		$	150,635		$	139,727
Interest on loans held for sale			128			152
Interest on deposits with banks			6,786			2,686
Interest and dividend income on investment securities:
Taxable			6,663			7,008
Tax-advantaged			1,797			1,770
Interest on federal funds sold			5			4
Total interest income			166,014			151,347
Interest expense:
Interest on deposits			73,366			40,788
Interest on retail repurchase agreements and federal funds purchased			3,386			2,104
Interest on advances from FHLB			5,973			7,207
Interest on subordinated debt			3,946			3,946
Total interest expense			86,671			54,045
Net interest income			79,343			97,302
Provision/ (credit) for credit losses			2,388			(21,536	)
Net interest income after provision/ (credit) for credit losses			76,955			118,838
Non-interest income:
Investment securities gains/ (losses)			—			—
Service charges on deposit accounts			2,817			2,388
Mortgage banking activities			1,374			1,245
Wealth management income			9,958			8,992
Income from bank owned life insurance			1,160			907
Bank card fees			413			418
Other income			2,645			2,001
Total non-interest income			18,367			15,951
Non-interest expense:
Salaries and employee benefits			36,698			38,926
Occupancy expense of premises			4,816			4,847
Equipment expenses			3,963			4,117
Marketing			742			1,543
Outside data services			3,103			2,514
FDIC insurance			2,911			2,138
Amortization of intangible assets			2,069			1,306
Professional fees and services			4,880			3,684
Other expenses			8,824			7,230
Total non-interest expense			68,006			66,305
Income before income tax expense			27,316			68,484
Income tax expense			6,944			17,231
Net income		$	20,372		$	51,253
Net income per share amounts:
Basic net income per common share		$	0.45		$	1.14
Diluted net income per common share		$	0.45		$	1.14
Dividends declared per share		$	0.34		$	0.34

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

		2024				2023
(Dollars in thousands, except per share data)		Q1				Q4				Q3				Q2				Q1
Profitability for the quarter:
Tax-equivalent interest income		$	167,113			$	166,729			$	163,479			$	159,156			$	152,317
Interest expense			86,671				83,920				77,330				67,679				54,045
Tax-equivalent net interest income			80,442				82,809				86,149				91,477				98,272
Tax-equivalent adjustment			1,099				1,113				1,068				1,006				970
Provision/ (credit) for credit losses			2,388				(3,445	)			2,365				5,055				(21,536	)
Non-interest income			18,367				16,560				17,391				17,176				15,951
Non-interest expense			68,006				67,142				72,471				69,136				66,305
Income before income tax expense			27,316				34,559				27,636				33,456				68,484
Income tax expense			6,944				8,459				6,890				8,711				17,231
Net income		$	20,372			$	26,100			$	20,746			$	24,745			$	51,253
GAAP financial performance:
Return on average assets			0.58	%			0.73	%			0.58	%			0.70	%			1.49	%
Return on average common equity			5.17	%			6.70	%			5.35	%			6.46	%			13.93	%
Return on average tangible common equity			7.39	%			9.26	%			7.42	%			8.93	%			19.10	%
Net interest margin			2.41	%			2.45	%			2.55	%			2.73	%			2.99	%
Efficiency ratio - GAAP basis			69.60	%			68.33	%			70.72	%			64.22	%			58.55	%
Non-GAAP financial performance:
Pre-tax pre-provision net income		$	29,704			$	31,114			$	30,001			$	38,511			$	46,948
Core after-tax earnings		$	21,916			$	27,147			$	27,766			$	27,136			$	52,253
Core return on average assets			0.63	%			0.76	%			0.78	%			0.77	%			1.52	%
Core return on average common equity			5.56	%			6.97	%			7.16	%			7.09	%			14.20	%
Core return on average tangible common equity			7.39	%			9.26	%			9.51	%			9.43	%			19.11	%
Core earnings per diluted common share		$	0.49			$	0.60			$	0.62			$	0.60			$	1.16
Efficiency ratio - Non-GAAP basis			66.73	%			66.16	%			60.91	%			60.68	%			56.87	%
Per share data:
Net income attributable to common shareholders		$	20,346			$	26,066			$	20,719			$	24,712			$	51,084
Basic net income per common share		$	0.45			$	0.58			$	0.46			$	0.55			$	1.14
Diluted net income per common share		$	0.45			$	0.58			$	0.46			$	0.55			$	1.14
Weighted average diluted common shares			45,086,471				45,009,574				44,960,455				44,888,759				44,872,582
Dividends declared per share		$	0.34			$	0.34			$	0.34			$	0.34			$	0.34
Non-interest income:
Securities gains/ (losses)		$	—			$	—			$	—			$	—			$	—
Service charges on deposit accounts			2,817				2,749				2,704				2,606				2,388
Mortgage banking activities			1,374				792				1,682				1,817				1,245
Wealth management income			9,958				9,219				9,391				9,031				8,992
Income from bank owned life insurance			1,160				1,207				845				1,251				907
Bank card fees			413				454				450				447				418
Other income			2,645				2,139				2,319				2,024				2,001
Total non-interest income		$	18,367			$	16,560			$	17,391			$	17,176			$	15,951
Non-interest expense:
Salaries and employee benefits		$	36,698			$	35,482			$	44,853			$	40,931			$	38,926
Occupancy expense of premises			4,816				4,558				4,609				4,764				4,847
Equipment expenses			3,963				3,987				3,811				3,760				4,117
Marketing			742				1,242				729				1,589				1,543
Outside data services			3,103				3,000				2,819				2,853				2,514
FDIC insurance			2,911				2,615				2,333				2,375				2,138
Amortization of intangible assets			2,069				1,403				1,245				1,269				1,306
Professional fees and services			4,880				5,628				4,509				4,161				3,684
Other expenses			8,824				9,227				7,563				7,434				7,230
Total non-interest expense		$	68,006			$	67,142			$	72,471			$	69,136			$	66,305

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

		2024				2023
(Dollars in thousands, except per share data)		Q1				Q4				Q3				Q2				Q1
Balance sheets at quarter end:
Commercial investor real estate loans		$	4,997,879			$	5,104,425			$	5,137,694			$	5,131,210			$	5,167,456
Commercial owner-occupied real estate loans			1,741,113				1,755,235				1,760,384				1,770,135				1,769,928
Commercial AD&C loans			1,090,259				988,967				938,673				1,045,742				1,046,665
Commercial business loans			1,509,592				1,504,880				1,454,709				1,423,614				1,437,478
Residential mortgage loans			1,511,624				1,474,521				1,432,051				1,385,743				1,328,524
Residential construction loans			97,685				121,419				160,345				190,690				223,456
Consumer loans			416,132				417,542				416,436				422,505				421,734
Total loans			11,364,284				11,366,989				11,300,292				11,369,639				11,395,241
Allowance for credit losses - loans			(123,096	)			(120,865	)			(123,360	)			(120,287	)			(117,613	)
Loans held for sale			16,627				10,836				19,235				21,476				16,262
Investment securities			1,405,490				1,414,453				1,392,078				1,463,554				1,528,336
Total assets			13,888,133				14,028,172				14,135,085				13,994,545				14,129,007
Noninterest-bearing demand deposits			2,817,928				2,914,161				3,013,905				3,079,896				3,228,678
Total deposits			11,227,200				10,996,538				11,151,012				10,958,922				11,075,991
Customer repurchase agreements			71,529				75,032				66,581				74,510				47,627
Total stockholders' equity			1,589,364				1,588,142				1,537,914				1,539,032				1,536,865
Quarterly average balance sheets:
Commercial investor real estate loans		$	5,057,334			$	5,125,028			$	5,125,459			$	5,146,632			$	5,136,204
Commercial owner-occupied real estate loans			1,746,042				1,755,048				1,769,717				1,773,039				1,769,680
Commercial AD&C loans			1,030,763				960,646				995,682				1,057,205				1,082,791
Commercial business loans			1,508,336				1,433,035				1,442,518				1,441,489				1,444,588
Residential mortgage loans			1,491,277				1,451,614				1,406,929				1,353,809				1,307,761
Residential construction loans			110,456				142,325				174,204				211,590				223,313
Consumer loans			417,539				419,299				421,189				423,306				424,122
Total loans			11,361,747				11,286,995				11,335,698				11,407,070				11,388,459
Loans held for sale			8,142				10,132				13,714				17,480				8,324
Investment securities			1,536,127				1,544,173				1,589,342				1,639,324				1,679,593
Interest-earning assets			13,411,810				13,462,583				13,444,117				13,423,589				13,316,165
Total assets			14,061,935				14,090,423				14,086,342				14,094,653				13,949,276
Noninterest-bearing demand deposits			2,730,295				2,958,254				3,041,101				3,137,971				3,480,433
Total deposits			11,086,145				11,089,587				11,076,724				10,928,038				11,049,991
Customer repurchase agreements			72,836				66,622				67,298				58,382				60,626
Total interest-bearing liabilities			9,583,074				9,418,666				9,332,617				9,257,652				8,806,720
Total stockholders' equity			1,584,902				1,546,312				1,538,553				1,535,465				1,491,929
Financial measures:
Average equity to average assets			11.27	%			10.97	%			10.92	%			10.89	%			10.70	%
Average investment securities to average earning assets			11.45	%			11.47	%			11.82	%			12.21	%			12.61	%
Average loans to average earning assets			84.71	%			83.84	%			84.32	%			84.98	%			85.52	%
Loans to assets			81.83	%			81.03	%			79.94	%			81.24	%			80.65	%
Loans to deposits			101.22	%			103.37	%			101.34	%			103.75	%			102.88	%
Assets under management		$	6,165,509			$	5,999,520			$	5,536,499			$	5,742,888			$	5,477,560
Capital measures:
Tier 1 leverage (1)			9.56	%			9.51	%			9.50	%			9.42	%			9.44	%
Common equity tier 1 capital to risk-weighted assets (1)			10.96	%			10.90	%			10.83	%			10.65	%			10.53	%
Tier 1 capital to risk-weighted assets (1)			10.96	%			10.90	%			10.83	%			10.65	%			10.53	%
Total regulatory capital to risk-weighted assets (1)			15.05	%			14.92	%			14.85	%			14.60	%			14.43	%
Book value per common share		$	35.37			$	35.36			$	34.26			$	34.31			$	34.37
Outstanding common shares			44,940,147				44,913,561				44,895,158				44,862,369				44,712,497

(1)	Estimated ratio at March 31, 2024.

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

		2024			2023
(Dollars in thousands)		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			20			20			415			29			3,002
Residential real estate:
Residential mortgage			340			342			—			692			352
Residential construction			—			—			—			—			—
Consumer			—			—			—			—			—
Total loans 90 days past due			360			362			415			721			3,569
Non-accrual loans:
Commercial real estate:
Commercial investor real estate			55,579			58,658			20,108			20,381			15,451
Commercial owner-occupied real estate			4,394			4,640			4,744			4,846			4,949
Commercial AD&C			556			1,259			1,422			569			—
Commercial business			7,164			10,051			9,671			9,393			9,443
Residential real estate:
Residential mortgage			11,835			12,332			10,766			10,153			8,935
Residential construction			542			443			449			—			—
Consumer			4,011			4,102			4,187			3,396			4,900
Total non-accrual loans			84,081			91,485			51,347			48,738			43,678
Total non-performing loans			84,441			91,847			51,762			49,459			47,247
Other real estate owned (OREO)			2,700			—			261			611			645
Total non-performing assets		$	87,141		$	91,847		$	52,023		$	50,070		$	47,892

		For the Quarter Ended,
(Dollars in thousands)		March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
Analysis of non-accrual loan activity:
Balance at beginning of period		$	91,485			$	51,347			$	48,738			$	43,678			$	34,782
Non-accrual balances transferred to OREO			(2,700	)			—				—				—				—
Non-accrual balances charged-off			(1,550	)			—				(183	)			(2,049	)			(126	)
Net payments or draws			(4,017	)			(7,619	)			(1,545	)			(1,654	)			(10,212	)
Loans placed on non-accrual			1,490				47,920				4,967				9,276				19,714
Non-accrual loans brought current			(627	)			(163	)			(630	)			(513	)			(480	)
Balance at end of period		$	84,081			$	91,485			$	51,347			$	48,738			$	43,678
Analysis of allowance for credit losses - loans:
Balance at beginning of period		$	120,865			$	123,360			$	120,287			$	117,613			$	136,242
Provision/ (credit) for credit losses - loans			3,331				(2,574	)			3,171				4,454				(18,945	)
Less loans charged-off, net of recoveries:
Commercial real estate:
Commercial investor real estate			(2	)			(3	)			(3	)			(14	)			(5	)
Commercial owner-occupied real estate			(27	)			(27	)			(25	)			(27	)			(26	)
Commercial AD&C			(283	)			—				—				—				—
Commercial business			1,550				(105	)			15				363				(127	)
Residential real estate:
Residential mortgage			(6	)			(6	)			(4	)			35				21
Residential construction			—				—				—				—				—
Consumer			(132	)			62				115				1,423				(179	)
Net charge-offs/ (recoveries)			1,100				(79	)			98				1,780				(316	)
Balance at the end of period		$	123,096			$	120,865			$	123,360			$	120,287			$	117,613
Asset quality ratios:
Non-performing loans to total loans			0.74	%			0.81	%			0.46	%			0.44	%			0.41	%
Non-performing assets to total assets			0.63	%			0.65	%			0.37	%			0.36	%			0.34	%
Allowance for credit losses to loans			1.08	%			1.06	%			1.09	%			1.06	%			1.03	%
Allowance for credit losses to non-performing loans			145.78	%			131.59	%			238.32	%			243.21	%			248.93	%
Annualized net charge-offs/ (recoveries) to average loans			0.04	%			—	%			—	%			0.06	%			(0.01	)%

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

		Three Months Ended March 31,
		2024										2023
(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		$	5,057,334			$	59,642		4.74	%		$	5,136,204			$	57,801		4.56	%
Commercial owner-occupied real estate loans			1,746,042				20,718		4.77				1,769,680				19,598		4.49
Commercial AD&C loans			1,030,763				21,253		8.29				1,082,791				19,839		7.43
Commercial business loans			1,508,336				26,061		6.95				1,444,588				22,200		6.23
Total commercial loans			9,342,475				127,674		5.50				9,433,263				119,438		5.13
Residential mortgage loans			1,491,277				13,805		3.70				1,307,761				11,418		3.49
Residential construction loans			110,456				1,256		4.57				223,313				1,814		3.29
Consumer loans			417,539				8,541		8.23				424,122				7,587		7.25
Total residential and consumer loans			2,019,272				23,602		4.69				1,955,196				20,819		4.29
Total loans (2)			11,361,747				151,276		5.35				11,388,459				140,257		4.99
Loans held for sale			8,142				128		6.29				8,324				152		7.29
Taxable securities			1,188,446				6,663		2.24				1,297,769				7,008		2.16
Tax-advantaged securities			347,681				2,255		2.60				381,824				2,210		2.32
Total investment securities (3)			1,536,127				8,918		2.32				1,679,593				9,218		2.20
Interest-bearing deposits with banks			505,461				6,786		5.40				239,459				2,686		4.55
Federal funds sold			333				5		5.50				330				4		4.69
Total interest-earning assets			13,411,810				167,113		5.01				13,316,165				152,317		4.63
Less: allowance for credit losses - loans			(119,487	)									(136,899	)
Cash and due from banks			82,667										95,057
Premises and equipment, net			59,776										67,696
Other assets			627,169										607,257
Total assets		$	14,061,935									$	13,949,276
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,476,961			$	5,901		1.61	%		$	1,381,858			$	2,630		0.77	%
Regular savings deposits			1,444,713				12,880		3.59				505,364				363		0.29
Money market savings deposits			2,731,291				24,646		3.63				3,299,794				21,338		2.62
Time deposits			2,702,885				29,939		4.45				2,382,542				16,457		2.80
Total interest-bearing deposits			8,355,850				73,366		3.53				7,569,558				40,788		2.19
Repurchase agreements			72,836				394		2.17				60,626				21		0.14
Federal funds purchased and Federal Reserve Bank borrowings			237,373				2,992		5.07				171,222				2,083		4.93
Advances from FHLB			546,154				5,973		4.40				635,056				7,207		4.60
Subordinated debt			370,861				3,946		4.26				370,258				3,946		4.26
Total borrowings			1,227,224				13,305		4.36				1,237,162				13,257		4.35
Total interest-bearing liabilities			9,583,074				86,671		3.64				8,806,720				54,045		2.49
Noninterest-bearing demand deposits			2,730,295										3,480,433
Other liabilities			163,664										170,194
Stockholders' equity			1,584,902										1,491,929
Total liabilities and stockholders' equity		$	14,061,935									$	13,949,276
Tax-equivalent net interest income and spread						$	80,442		1.37	%						$	98,272		2.14	%
Less: tax-equivalent adjustment							1,099										970
Net interest income						$	79,343									$	97,302
Interest income/earning assets									5.01	%									4.63	%
Interest expense/earning assets									2.60										1.64
Net interest margin									2.41	%									2.99	%

(1)	Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.37% and 25.47% for 2024 and 2023, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.1 million and $1.0 million in 2024 and 2023, respectively.
(2)	Non-accrual loans are included in the average balances.
(3)	Available-for-sale investments are presented at amortized cost.