Sandy Spring Bancorp Reports Record Annual Earnings of $235.1 Million

OLNEY, Md., Jan. 20, 2022 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income of $45.4 million ($0.99 per diluted common share) for the quarter ended December 31, 2021. The current quarter compares to $56.7 million ($1.19 per diluted common share) for the fourth quarter of 2020 and net income of $57.0 million ($1.20 per diluted common share) for the third quarter of 2021.

Core earnings were $47.8 million ($1.05 per diluted common share), compared to $55.7 million ($1.18 per diluted common share) for the quarter ended December 31, 2020 and $52.0 million ($1.10 per diluted common share) for the quarter ended September 30, 2021. 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, are excluded in the determination of core earnings.

The provision for credit losses for the current quarter was $1.6 million as compared to a credit of $4.5 million for the fourth quarter of 2020 and credit of $8.2 million for the third quarter of 2021. While the continued improvement in forecasted macroeconomic indicators, most notably the forecasted unemployment rate, resulted in credits for the provision for credit losses during most of 2021, the current quarter's provision was primarily the result of the growth in the loan portfolio that occurred during the quarter.

“This was an exceptional year for our company. Our wealth group significantly grew our assets under management, our mortgage business delivered another strong year, and our credit quality has remained stable,” said Daniel J. Schrider, President and Chief Executive Officer. “We are especially pleased with the significant commercial loan production the team delivered in the fourth quarter. These record results will fuel continued growth for our company and represent our position of strength in the market.”

Fourth Quarter Highlights:

• Core earnings for the fourth quarter of 2021 were $47.8 million compared to $55.7 million for the prior year quarter as an increase in net interest income was exceeded by lower non-interest income and increased non-interest expense compared to the fourth quarter of 2020. The decline in non-interest income reflected the effect of lower mortgage banking income, the result of rising mortgage interest rates during 2021. Non-interest expense rose in response to increased compensation costs associated with performance and production benchmarks, operational and staffing costs and expenses related to the implementation of strategic initiatives.
• At December 31, 2021, total assets were $12.6 billion, a 2% decrease compared to $12.8 billion at December 31, 2020. During the year, excess liquidity resulting from deposit growth and PPP loan forgiveness was used to reduce borrowings as well as fund the loan growth that occurred in the fourth quarter.
• Total loans declined 4%, driven by a reduction of $874.4 million in PPP loans. Excluding the impact of the PPP forgiveness, total commercial loans grew by $681.1 million during the year, while residential mortgage and consumer loans declined a combined $259.9 million due to run-off. In the second half of 2021, $2.1 billion in new gross loan production of which $1.5 billion was funded, more than offset $873.8 million in commercial loan run-off. During the fourth quarter of the current year, funded commercial loan production increased to $937.3 million or 115% compared to $435.2 million for the same quarter of the prior year.
• Year-over-year deposits increased 6%, driven by 14% growth in noninterest-bearing deposits and 2% growth in interest-bearing deposits, reflecting the impact of the PPP program and the growth in transaction relationships, while time deposits declined $366.8 million.
• During the past twelve months, borrowings of $835.5 million were eliminated. The reduction in borrowings included the redemption of $31.0 million of 5.65% subordinated debt acquired as part of the Revere Bank ("Revere") acquisition and $25.0 million of 4.75% subordinated debt acquired as part of the WashingtonFirst Bankshares, Inc. ("WashingtonFirst") acquisition.
• For the fourth quarter of 2021, the net interest margin was 3.51%, compared to 3.38% for the same quarter of 2020, and 3.52% for the third 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 3.52%, compared to 3.31% for fourth quarter of 2020, and 3.49% for the third quarter of 2021. Solely excluding the impact of PPP loans, the current quarter’s net interest margin would have been 3.30%, compared to 3.46% for the fourth quarter of 2020, and 3.35% for the third quarter of 2021.
• The provision for credit losses was $1.6 million for the current quarter compared to the prior year quarter’s credit to the provision of $4.5 million. The provision for the current quarter compared to the prior year quarter's credit to the provision was the result of the growth in the loan portfolio during the current quarter. The additions to the allowance during the current quarter to reflect increased portfolio balances were partially offset by reductions that reflected continued improvement in forecasted economic variables.
• Non-interest income for the current quarter decreased by 30% or $9.7 million compared to the prior year quarter. Income from mortgage banking activities declined 75%, which was partially offset by 17% growth in wealth management income, 20% growth in service charges on deposit accounts and 16% growth in bank card fees.
• Non-interest expense for the current quarter increased $4.5 million or 7% compared to the prior year quarter. This increase was driven by increases in compensation costs, predominantly incentive compensation tied to the achievement of performance and loan production benchmarks.
• Return on average assets (“ROA”) for the quarter ended December 31, 2021 was 1.41% and return on average tangible common equity (“ROTCE”) was 16.07% compared to 1.78% and 21.89%, respectively, for the fourth quarter of 2020. On a non-GAAP basis, the current quarter's core ROA was 1.48% and core ROTCE was 16.92% compared to core ROA of 1.75% and core ROTCE of 21.52% for the fourth quarter of 2020.
• For the fourth quarter of 2021, the GAAP efficiency ratio was 51.75% compared to 46.69% for the fourth quarter of 2020, and 48.23% for the third quarter of 2021. The non-GAAP efficiency ratio for the fourth quarter of 2021 was 50.17% compared to 45.09% for the prior year quarter, and 46.67% for the third quarter of 2021. The deterioration of the non-GAAP efficiency ratio was driven by the combination of a decline in non-interest income and an increase in non-interest expense.
• During the quarter, the Company repurchased 1,088,172 shares of its common stock at an average price of $48.66 per share. The shares repurchased during the quarter completed the authorized repurchase of 2,350,000 shares under the current repurchase authorization.

Balance Sheet and Credit Quality

Total assets declined 2% to $12.6 billion at December 31, 2021, as compared to $12.8 billion at December 31, 2020. During this period, total loans declined by 4% to $10.0 billion at December 31, 2021, compared to $10.4 billion at December 31, 2020. Excluding PPP loans, total loans at December 31, 2021 grew 5% to $9.8 billion as compared to $9.3 billion at December 31, 2020, as the commercial loan portfolio grew $681.1 million, while the residential mortgage loan portfolio declined $152.6 million. The growth in the commercial portfolio, excluding PPP loans, occurred in all commercial portfolios led by the $506.6 million or 14% growth in the investor owned commercial portfolio. The year-over-year decline in the mortgage loan portfolio resulted from the continuing sale of a majority of new mortgage loan production.

Deposit growth was 6% during the past twelve months, as noninterest-bearing deposits experienced growth of 14% and interest-bearing deposits grew 2%. 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 ratio increased to 9.21% of tangible assets at December 31, 2021, compared to 8.61% at December 31, 2020 as a result of 2021 earnings, net of the $107.3 million repurchase of common shares, and the decrease in tangible assets during the past year. Excluding the impact of the PPP program from tangible assets at December 31, 2021, the tangible common equity ratio would be 9.35%.   At December 31, 2021, the Company had a total risk-based capital ratio of 14.55%, a common equity tier 1 risk-based capital ratio of 11.88%, a tier 1 risk-based capital ratio of 11.88%, and a tier 1 leverage ratio of 9.26%.

Non-performing loans include non-accrual loans, accruing loans 90 days or more past due and restructured loans. At December 31, 2021, the level of non-performing loans to total loans was 0.49% compared to 1.11% at December 31, 2020, and 0.80% at September 30, 2021. At December 31, 2021, non-performing loans totaled $48.8 million, compared to $115.5 million at December 31, 2020, and $78.2 million at September 30, 2021. Loans placed on non-accrual during the current quarter amounted to $0.5 million compared to $54.7 million for the prior year quarter and $5.7 million for the third quarter of 2021. Non-accrual loans at quarter end declined from the prior quarter due primarily to payoff activity. Loans greater than 90 days or more past due decreased from the prior quarter as a result of the extension of existing performing portfolio loans that were in process of being extended at the end of the prior quarter end.

The Company recorded net charge-offs of $0.4 million for the fourth quarter of 2021, as compared to net charge-offs of $0.5 million for the fourth quarter of 2020 and net charge-offs of $7.8 million for the third quarter of 2021.

At December 31, 2021, the allowance for credit losses was $109.1 million or 1.10% of outstanding loans and 224% of non-performing loans, compared to $107.9 million or 1.11% of outstanding loans and 138% of non-performing loans at the end of the previous quarter. Excluding PPP loans, the allowance for credit losses to outstanding loans was 1.12% at December 31, 2021. The increase in the allowance during the current quarter compared to the previous quarter was the result of the growth in the loan portfolio during the quarter, net of the impact of continued improvement in forecasted economic metrics, in addition to the update to various metrics applied in the determination of the allowance for credit losses.

Income Statement Review

Quarterly Results

The Company recorded net income of $45.4 million for the three months ended December 31, 2021, compared to net income of $56.7 million for the prior year quarter. The results for the current quarter reflect a combination of the impact of an increased provision for credit losses, decreased mortgage banking income and growth in non-interest expense from the fourth quarter of the prior year.

For the fourth quarter of 2021, net interest income increased $5.4 million or 5% compared to the fourth quarter of 2020, due primarily to a significant reduction in interest expense during the preceding twelve months. During this period, as general market interest rates declined, interest income declined modestly by $1.7 million, while interest expense on deposits, notably money market, time deposits, and borrowings, declined to a greater extent, resulting in a $7.2 million decrease in interest expense. Interest expense on interest-bearing deposits declined $3.6 million and interest expense on borrowings declined $3.6 million. For the current quarter, the PPP program contributed $9.2 million to net interest income, of which $8.3 million represented origination fees. The net interest margin for the fourth quarter of 2021 was 3.51% as compared to 3.38% for the same quarter of the prior year, primarily the result of decreased funding costs during the current period. Excluding the net $0.5 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current quarter would have been 3.52% compared to the adjusted net interest margin of 3.31% for the fourth quarter of 2020.

The provision for credit losses was $1.6 million for the fourth quarter of 2021 compared to a charge of $4.5 million for the fourth quarter of 2020. The provision for credit losses for the third quarter of 2021 was a credit of $8.2 million. The provision for the current quarter compared to the prior year quarter's credit to the provision was the result of the origination of new credits and the changes in the mix of the loan portfolio during the current quarter. Continued improvement in forecasted economic variables continued to positively impact the allowance for credit losses in the fourth quarter of 2021.

Non-interest income decreased $9.7 million or 30% for the fourth quarter of 2021, compared to the prior year quarter. This decrease is the result of a $10.9 million or 75% decline in income from mortgage banking activities, which exceeded the 17% growth in wealth management income, 20% growth in service charges on deposit accounts and 16% growth in bank card fees. In addition, other non-interest income declined 24% compared to the prior year primarily as a result of a decrease in credit related fees. 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 $4.5 million or 7% for the fourth quarter of 2021, compared to the prior year quarter. The increase was driven by rising compensation costs and occupancy and equipment expenses, which were partially offset by a significant reduction in FDIC insurance expense and other expenses. Salary and benefit expense increased $5.5 million as a result of incentive compensation tied to performance and loan production benchmarks. The increase in occupancy and equipment expense reflects increases in depreciation and software amortization expense. FDIC insurance expense declined from the prior year quarter due to the reduction in risk factors applied by the regulatory agency in the determination of the Company's premium. Other expenses decreased principally due to a reduction in the current quarter's provision for credit losses provided on lines of credit compared to the prior year.

For the fourth quarter of 2021, the GAAP efficiency ratio was 51.75% compared to 46.69% for the fourth quarter of 2020, and 48.23% for the third quarter of 2021. The non-GAAP efficiency ratio was 50.17% for the current quarter as compared to 45.09% for the fourth quarter of 2020, and 46.67% for the third quarter of 2021. The increase in the efficiency ratio (reflecting a decrease in efficiency) from the fourth quarter of the prior year to the current year quarter was the result of the 7% growth in non-GAAP non-interest expense combined with the 3% decline in non-GAAP revenue. ROA for the fourth quarter ended December 31, 2021 was 1.41% and ROTCE was 16.07% compared to 1.75% and 19.56%, respectively, for the third quarter of 2021. On a non-GAAP basis, the current quarter's core ROA was 1.48% and core ROTCE was 16.92% compared to core ROA of 1.60% and core ROTCE of 17.85% for the prior quarter of 2021.

Full Year Results

The Company recorded net income of $235.1 million for the year ended December 31, 2021 compared to net income of $97.0 million for the year ended December 31, 2020. Core earnings were $211.9 million for the year ended December 31, 2021 compared to $189.4 million for the prior year. The current year benefited from increased net interest income of $61.4 million and a $45.6 million credit to the provision for credit losses. The current year's non-interest income reflected a decline in mortgage banking income offset by increases in service charges, wealth management income, bank card fees and other non-interest income. Non-interest expense experienced increases in the majority of categories resulting from the full year impact of operational and compensation costs associated with the acquisitions in 2020, the implementation of strategic initiatives and the achievement of performance and loan production benchmarks. 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 the 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 year ended December 31, 2021 increased 17% or $61.4 million compared to the prior year 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 loan portfolios. Contributing to the growth in net interest income, the PPP program, net of its funding costs, generated $44.7 million during the current year as compared to $19.0 million in the prior year. The net interest margin improved to 3.56% for the year ended December 31, 2021, compared to 3.35% for the prior year. Excluding the net $4.1 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 3.23%.

The provision for credit losses for the year ended December 31, 2021 amounted to a credit of $45.6 million as compared to a charge of $85.7 million for 2020. For the year ended December 31, 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 the loan growth in the fourth quarter of 2021 and 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.

For the year ended December 31, 2021, non-interest income decreased 1% to $102.1 million compared to $102.7 million for 2020. Wealth management income increased $6.3 million year-over-year as assets under management grew $927 million. Service charge income also increased 17% as customer activity increased. As a result of increased transaction volume, bank card fees grew 22% 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 as a result of declining origination volumes.

Non-interest expense was $260.5 million for the year ended December 31, 2021, compared to $255.8 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 12%. This growth was driven by a combination of operational and compensation costs associated with the 2020 acquisitions, staffing increases, and incentive compensation associated with volume-based and performance benchmarks, in addition to increases in professional fees and services associated with certain strategic initiatives, intangible asset amortization, marketing and outside data services cost.

The effective tax rate for the year ended December 31, 2021 was 24.56%, compared to a tax rate of 22.08% 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 2020.

For the year ended 2021, the GAAP efficiency ratio was 49.47% compared to 54.90% for the same period in 2020. The non-GAAP efficiency ratio the current year was 46.17% compared to 46.53% for to prior year. The improvement in the current year’s non-GAAP efficiency ratio compared to the prior year was the result of the 13% growth in non-GAAP revenue, which outpaced the 12% 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 fourth quarter results today at 2:00 p.m. (ET). A live Webcast of the conference call is available through the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com. Participants may call 1-844-200-6205. Please use the following access code: 433045. 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 February 3, 2022. A replay of the teleconference will be available through the same time period by calling 1-866-813-9403 under conference call number 511846.

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 OfficerSandy Spring Bancorp 17801 Georgia AvenueOlney, Maryland 208321-800-399-5919Email: [email protected] [email protected]Website: www.sandyspringbank.com

Media Contact:Jen Schell 301-570-8331[email protected]

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 EndedDecember 31,								%Change			Year EndedDecember 31,								%Change
(Dollars in thousands, except per share data)		2021				2020							2021				2020
Results of operations:
Net interest income		$	105,268			$	99,827			5	%		$	424,518			$	363,159			17	%
Provision/ (credit) for credit losses			1,585				(4,489	)		(135	)			(45,556	)			85,669			(153	)
Non-interest income			22,536				32,234			(30	)			102,055				102,716			(1	)
Non-interest expense			66,141				61,661			7				260,470				255,782			2
Income before income tax expense			60,078				74,889			(20	)			311,659				124,424			150
Net income			45,404				56,662			(20	)			235,107				96,953			142
Net income attributable to common shareholders		$	45,114			$	56,194			(20	)		$	233,599			$	96,170			143
Return on average assets			1.41	%			1.78	%						1.83	%			0.82	%
Return on average common equity			11.87	%			15.72	%						15.48	%			7.24	%
Return on average tangible common equity (1)			16.07	%			21.89	%						21.01	%			10.25	%
Net interest margin			3.51	%			3.38	%						3.56	%			3.35	%
Efficiency ratio - GAAP basis (2)			51.75	%			46.69	%						49.47	%			54.90	%
Efficiency ratio - Non-GAAP basis (2)			50.17	%			45.09	%						46.17	%			46.53	%
Per share data:
Basic net income per common share		$	0.99			$	1.19			(17	)%		$	5.00			$	2.19			128	%
Diluted net income per common share		$	0.99			$	1.19			(17	)		$	4.98			$	2.18			129
Weighted average diluted common shares			45,655,924				47,284,808			(3	)			46,899,085				44,132,251			6
Dividends declared per share		$	0.32			$	0.30			7			$	1.28			$	1.20			7
Book value per common share		$	33.68			$	31.24			8			$	33.68			$	31.24			8
Tangible book value per common share (1)		$	24.90			$	22.68			10			$	24.90			$	22.68			10
Outstanding common shares			45,118,930				47,056,777			(4	)			45,118,930				47,056,777			(4	)
Financial condition at period-end:
Investment securities		$	1,507,062			$	1,413,781			7	%		$	1,507,062			$	1,413,781			7	%
Loans			9,967,091				10,400,509			(4	)			9,967,091				10,400,509			(4	)
Interest-earning assets			11,867,952				12,095,936			(2	)			11,867,952				12,095,936			(2	)
Assets			12,590,726				12,798,429			(2	)			12,590,726				12,798,429			(2	)
Deposits			10,624,731				10,033,069			6				10,624,731				10,033,069			6
Interest-bearing liabilities			7,158,899				7,856,842			(9	)			7,158,899				7,856,842			(9	)
Stockholders' equity			1,519,679				1,469,955			3				1,519,679				1,469,955			3
Capital ratios:
Tier 1 leverage (3)			9.26	%			8.92	%						9.26	%			8.92	%
Common equity tier 1 capital to risk-weighted assets (3)			11.88	%			10.58	%						11.88	%			10.58	%
Tier 1 capital to risk-weighted assets (3)			11.88	%			10.58	%						11.88	%			10.58	%
Total regulatory capital to risk-weighted assets (3)			14.55	%			13.93	%						14.55	%			13.93	%
Tangible common equity to tangible assets (4)			9.21	%			8.61	%						9.21	%			8.61	%
Average equity to average assets			11.87	%			11.34	%						11.85	%			11.38	%
Credit quality ratios:
Allowance for credit losses to loans			1.10	%			1.59	%						1.10	%			1.59	%
Non-performing loans to total loans			0.49	%			1.11	%						0.49	%			1.11	%
Non-performing assets to total assets			0.40	%			0.91	%						0.40	%			0.91	%
Allowance for credit losses to non-performing loans			223.61	%			143.23	%						223.61	%			143.23	%
Annualized net charge-offs to average loans (5)			0.01	%			0.02	%						0.11	%			0.01	%

(1) Represents a non-GAAP measure.(2) The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, loss on FHLB redemption, and merger and acquisition expense from non-interest expense; securities gains from non-interest income and adds the tax- equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.(3) Estimated ratio at December 31, 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 (CONTINUED)OPERATING EARNINGS - METRICS

		Three Months EndedDecember 31,								Year EndedDecember 31,
(Dollars in thousands)		2021				2020				2021				2020
Core earnings (non-GAAP):
Net income		$	45,404			$	56,662			$	235,107			$	96,953
Plus/ (less) non-GAAP adjustments (net of tax):
Provision/ (credit) for credit losses			1,179				(3,343	)			(33,875	)			63,789
Provision/ (credit) for credit losses on unfunded loan commitments			31				1,173				(919	)			1,173
Merger and acquisition expense			—				3				33				18,745
Amortization of intangible assets			1,197				1,232				4,908				4,632
Loss on FHLB redemption			—				—				6,779				4,414
Investment securities gains			(26	)			(26	)			(158	)			(348	)
Core earnings (Non-GAAP)		$	47,785			$	55,701			$	211,875			$	189,358
Core earnings per diluted common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)			45,655,924				47,284,808				46,899,085				44,132,251
Earnings per diluted common share (GAAP)		$	0.99			$	1.19			$	4.98			$	2.18
Core earnings per diluted common share (non-GAAP)		$	1.05			$	1.18			$	4.52			$	4.29
Core return on average assets (non-GAAP):
Average assets (GAAP)		$	12,791,526			$	12,645,329			$	12,818,202			$	11,775,096
Return on average assets (GAAP)			1.41	%			1.78	%			1.83	%			0.82	%
Core return on average assets (non-GAAP)			1.48	%			1.75	%			1.65	%			1.61	%
Core return on average tangible common equity (non-GAAP):
Average total stockholders' equity (GAAP)		$	1,517,793			$	1,433,900			$	1,518,607			$	1,339,491
Average goodwill			(370,223	)			(370,419	)			(370,223	)			(365,543	)
Average other intangible assets, net			(26,954	)			(33,675	)			(29,403	)			(28,357	)
Average tangible common equity (non-GAAP)		$	1,120,616			$	1,029,806			$	1,118,981			$	945,591
Return on average tangible common equity (non-GAAP)			16.07	%			21.89	%			21.01	%			10.25	%
Core return on average tangible common equity (non-GAAP)			16.92	%			21.52	%			18.93	%			20.03	%

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

		Three Months EndedDecember 31,								Year EndedDecember 31,
(Dollars in thousands)		2021				2020				2021				2020
Efficiency ratio (GAAP):
Non-interest expense		$	66,141			$	61,661			$	260,470			$	255,782
Net interest income plus non-interest income		$	127,804			$	132,061			$	526,573			$	465,875
Efficiency ratio (GAAP)			51.75	%			46.69	%			49.47	%			54.90	%
Efficiency ratio (Non-GAAP):
Non-interest expense		$	66,141			$	61,661			$	260,470			$	255,782
Less non-GAAP adjustments:
Amortization of intangible assets			1,609				1,655				6,600				6,221
Loss on FHLB redemption			—				—				9,117				5,928
Merger and acquisition expense			—				3				45				25,174
Non-interest expense - as adjusted		$	64,532			$	60,003			$	244,708			$	218,459
Net interest income plus non-interest income		$	127,804			$	132,061			$	526,573			$	465,875
Plus non-GAAP adjustment:
Tax-equivalent income			862				1,052				3,703				4,128
Less non-GAAP adjustment:
Investment securities gains			34				35				212				467
Net interest income plus non-interest income - as adjusted		$	128,632			$	133,078			$	530,064			$	469,536
Efficiency ratio (Non-GAAP)			50.17	%			45.09	%			46.17	%			46.53	%
Tangible common equity ratio:
Total stockholders' equity		$	1,519,679			$	1,469,955			$	1,519,679			$	1,469,955
Goodwill			(370,223	)			(370,223	)			(370,223	)			(370,223	)
Other intangible assets, net			(25,920	)			(32,521	)			(25,920	)			(32,521	)
Tangible common equity		$	1,123,536			$	1,067,211			$	1,123,536			$	1,067,211
Total assets		$	12,590,726			$	12,798,429			$	12,590,726			$	12,798,429
Goodwill			(370,223	)			(370,223	)			(370,223	)			(370,223	)
Other intangible assets, net			(25,920	)			(32,521	)			(25,920	)			(32,521	)
Tangible assets		$	12,194,583			$	12,395,685			$	12,194,583			$	12,395,685
Tangible common equity ratio			9.21	%			8.61	%			9.21	%			8.61	%
Outstanding common shares			45,118,930				47,056,777				45,118,930				47,056,777
Tangible book value per common share		$	24.90			$	22.68			$	24.90			$	22.68

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

(Dollars in thousands)		December 31,2021				December 31,2020
Assets
Cash and due from banks		$	65,630			$	93,651
Federal funds sold			312				291
Interest-bearing deposits with banks			354,078				203,061
Cash and cash equivalents			420,020				297,003
Residential mortgage loans held for sale (at fair value)			39,409				78,294
Investments available-for-sale (at fair value)			1,465,896				1,348,021
Other equity securities			41,166				65,760
Total loans			9,967,091				10,400,509
Less: allowance for credit losses			(109,145	)			(165,367	)
Net loans			9,857,946				10,235,142
Premises and equipment, net			59,685				57,720
Other real estate owned			1,034				1,455
Accrued interest receivable			34,349				46,431
Goodwill			370,223				370,223
Other intangible assets, net			25,920				32,521
Other assets			275,078				265,859
Total assets		$	12,590,726			$	12,798,429
Liabilities
Noninterest-bearing deposits		$	3,779,630			$	3,325,547
Interest-bearing deposits			6,845,101				6,707,522
Total deposits			10,624,731				10,033,069
Securities sold under retail repurchase agreements and federal funds purchased			141,086				543,157
Advances from FHLB			—				379,075
Subordinated debt			172,712				227,088
Total borrowings			313,798				1,149,320
Accrued interest payable and other liabilities			132,518				146,085
Total liabilities			11,071,047				11,328,474
Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 45,118,930 and 47,056,777 at December 31, 2021 and December 31, 2020, respectively			45,119				47,057
Additional paid in capital			751,072				846,922
Retained earnings			732,027				557,271
Accumulated other comprehensive income/ (loss)			(8,539	)			18,705
Total stockholders' equity			1,519,679				1,469,955
Total liabilities and stockholders' equity		$	12,590,726			$	12,798,429

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

		Three Months EndedDecember 31,								Year EndedDecember 31,
(Dollars in thousands, except per share data)		2021				2020				2021				2020
Interest income:
Interest and fees on loans		$	103,589			$	104,756			$	423,152			$	393,477
Interest on loans held for sale			271				592				1,736				1,686
Interest on deposits with banks			330				27				725				446
Interest and dividends on investment securities:
Taxable			3,888				4,866				16,118				22,136
Tax-advantaged			1,992				1,550				8,552				5,814
Interest on federal funds sold			1				—				1				1
Total interest income			110,071				111,791				450,284				423,560
Interest Expense:
Interest on deposits			2,820				6,410				15,022				41,651
Interest on retail repurchase agreements and federal funds purchased			43				234				182				1,965
Interest on advances from FHLB			—				2,730				2,649				6,593
Interest on subordinated debt			1,940				2,590				7,913				10,192
Total interest expense			4,803				11,964				25,766				60,401
Net interest income			105,268				99,827				424,518				363,159
Provision/ (credit) for credit losses			1,585				(4,489	)			(45,556	)			85,669
Net interest income after provision/ (credit) for credit losses			103,683				104,316				470,074				277,490
Non-interest income:
Investment securities gains			34				35				212				467
Service charges on deposit accounts			2,305				1,917				8,241				7,066
Mortgage banking activities			3,622				14,491				24,509				40,058
Wealth management income			9,598				8,215				36,841				30,570
Insurance agency commissions			1,332				1,356				7,017				6,795
Income from bank owned life insurance			819				705				3,022				2,867
Bank card fees			1,818				1,570				6,896				5,672
Other income			3,008				3,945				15,317				9,221
Total non-interest income			22,536				32,234				102,055				102,716
Non-interest expense:
Salaries and employee benefits			41,535				36,080				155,830				134,471
Occupancy expense of premises			5,693				5,236				22,405				21,383
Equipment expenses			3,427				3,121				12,883				12,224
Marketing			1,090				1,058				4,730				4,281
Outside data services			2,123				2,394				8,983				8,759
FDIC insurance			991				1,527				4,294				4,727
Amortization of intangible assets			1,609				1,655				6,600				6,221
Merger and acquisition expense			—				3				45				25,174
Professional fees and services			2,381				2,473				10,308				7,939
Other expenses			7,292				8,114				34,392				30,603
Total non-interest expense			66,141				61,661				260,470				255,782
Income before income tax expense			60,078				74,889				311,659				124,424
Income tax expense			14,674				18,227				76,552				27,471
Net income		$	45,404			$	56,662			$	235,107			$	96,953
Net income per share amounts:
Basic net income per common share		$	0.99			$	1.19			$	5.00			$	2.19
Diluted net income per common share		$	0.99			$	1.19			$	4.98			$	2.18
Dividends declared per share		$	0.32			$	0.30			$	1.28			$	1.20

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

		2021																2020
(Dollars in thousands, except per share data)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Profitability for the quarter:
Tax-equivalent interest income		$	110,933			$	112,060			$	115,753			$	115,241			$	112,843			$	113,627			$	116,252			$	84,966
Interest expense			4,803				4,525				6,777				9,661				11,964				15,500				13,413				19,524
Tax-equivalent net interest income			106,130				107,535				108,976				105,580				100,879				98,127				102,839				65,442
Tax-equivalent adjustment			862				931				930				980				1,052				643				1,325				1,108
Provision/ (credit) for credit losses			1,585				(8,229	)			(4,204	)			(34,708	)			(4,489	)			7,003				58,686				24,469
Non-interest income			22,536				24,394				26,259				28,866				32,234				29,390				22,924				18,168
Non-interest expense			66,141				63,181				62,975				68,173				61,661				60,937				85,438				47,746
Income/ (loss) before income tax expense/ (benefit)			60,078				76,046				75,534				100,001				74,889				58,934				(19,686	)			10,287
Income tax expense/ (benefit)			14,674				19,070				18,271				24,537				18,227				14,292				(5,348	)			300
Net income/ (loss)		$	45,404			$	56,976			$	57,263			$	75,464			$	56,662			$	44,642			$	(14,338	)		$	9,987
GAAP financial performance:
Return on average assets			1.41	%			1.75	%			1.79	%			2.39	%			1.78	%			1.38	%		(0.45		)%			0.46	%
Return on average common equity			11.87	%			14.54	%			15.07	%			20.72	%			15.72	%			12.67	%		(4.15		)%			3.55	%
Return on average tangible common equity			16.07	%			19.56	%			20.44	%			28.47	%			21.89	%			17.84	%		(5.80		)%			5.34	%
Net interest margin			3.51	%			3.52	%			3.63	%			3.56	%			3.38	%			3.24	%			3.47	%			3.29	%
Efficiency ratio - GAAP basis (1)			51.75	%			48.23	%			46.89	%			51.08	%			46.69	%			48.03	%			68.66	%			57.87	%
Non-GAAP financial performance:
Core after-tax earnings		$	47,785			$	52,022			$	55,133			$	56,949			$	55,701			$	52,126			$	51,902			$	29,634
Core return on average assets			1.48	%			1.60	%			1.73	%			1.80	%			1.75	%			1.62	%			1.62	%			1.37	%
Core return on average common equity			12.49	%			13.27	%			14.51	%			15.64	%			15.45	%			14.79	%			15.01	%			10.55	%
Core return on average tangible common equity			16.92	%			17.85	%			19.68	%			21.48	%			21.52	%			20.83	%			20.81	%			15.85	%
Core earnings per diluted common share		$	1.05			$	1.10			$	1.16			$	1.20			$	1.18			$	1.10			$	1.10			$	0.85
Efficiency ratio - Non-GAAP basis (1)			50.17	%			46.67	%			45.36	%			42.65	%			45.09	%			45.27	%			43.85	%			54.76	%
Per share data:
Net income/ (loss) attributable to common shareholders		$	45,114			$	56,622			$	56,782			$	74,824			$	56,194			$	44,268			$	(14,458	)		$	9,919
Basic net income/ (loss) per common share		$	0.99			$	1.21			$	1.20			$	1.59			$	1.19			$	0.94			$	(0.31	)		$	0.29
Diluted net income/ (loss) per common share		$	0.99			$	1.20			$	1.19			$	1.58			$	1.19			$	0.94			$	(0.31	)		$	0.28
Weighted average diluted common shares			45,655,924				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			$	0.32			$	0.30			$	0.30			$	0.30			$	0.30
Non-interest income:
Securities gains		$	34			$	49			$	71			$	58			$	35			$	51			$	212			$	169
Service charges on deposit accounts			2,305				2,108				1,976				1,852				1,917				1,673				1,223				2,253
Mortgage banking activities			3,622				4,942				5,776				10,169				14,491				14,108				8,426				3,033
Wealth management income			9,598				9,392				9,121				8,730				8,215				7,785				7,604				6,966
Insurance agency commissions			1,332				2,285				1,247				2,153				1,356				2,122				1,188				2,129
Income from bank owned life insurance			819				818				705				680				705				708				809				645
Bank card fees			1,818				1,775				1,785				1,518				1,570				1,525				1,257				1,320
Other income			3,008				3,025				5,578				3,706				3,945				1,418				2,205				1,653
Total non-interest income		$	22,536			$	24,394			$	26,259			$	28,866			$	32,234			$	29,390			$	22,924			$	18,168
Non-interest expense:
Salaries and employee benefits		$	41,535			$	38,653			$	38,990			$	36,652			$	36,080			$	36,041			$	34,297			$	28,053
Occupancy expense of premises			5,693				5,728				5,497				5,487				5,236				5,575				5,991				4,581
Equipment expenses			3,427				3,214				3,020				3,222				3,121				3,133				3,219				2,751
Marketing			1,090				1,376				1,052				1,212				1,058				1,305				729				1,189
Outside data services			2,123				2,317				2,260				2,283				2,394				2,614				2,169				1,582
FDIC insurance			991				361				1,450				1,492				1,527				1,340				1,378				482
Amortization of intangible assets			1,609				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			2,381				3,031				3,165				1,731				2,473				1,800				1,840				1,826
Other expenses			7,292				6,866				5,882				14,352				8,114				5,898				11,363				5,228
Total non-interest expense		$	66,141			$	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 SubsidiariesHISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

		2021																2020
(Dollars in thousands, except per share data)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Balance sheets at quarter end:
Commercial investor real estate loans		$	4,141,346			$	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			1,690,881				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			1,088,094				1,177,949				1,126,960				1,051,013				1,050,973				994,800				997,423				643,114
Commercial business loans			1,481,834				1,594,528				1,974,366				2,411,109				2,267,548				2,227,246				2,222,810				813,525
Residential mortgage loans			937,570				911,997				960,527				1,022,546				1,105,179				1,173,857				1,211,745				1,116,512
Residential construction loans			197,652				181,319				172,869				171,028				182,619				175,123				169,050				149,573
Consumer loans			429,714				450,765				457,576				493,904				517,254				521,999				558,434				453,346
Total loans			9,967,091				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			(109,145	)			(107,920	)			(123,961	)			(130,361	)			(165,367	)			(170,314	)			(163,481	)			(85,800	)
Loans held for sale			39,409				44,678				71,082				84,930				78,294				88,728				68,765				67,114
Investment securities			1,507,062				1,470,652				1,482,123				1,472,727				1,413,781				1,425,733				1,424,652				1,250,560
Interest-earning assets			11,867,952				12,245,374				12,167,067				12,132,405				12,095,936				11,965,915				12,447,146				8,222,589
Total assets			12,590,726				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			3,779,630				3,987,411				4,000,636				3,770,852				3,325,547				3,458,804				3,434,038				1,939,937
Total deposits			10,624,731				10,987,400				10,866,466				10,677,752				10,033,069				9,964,969				10,076,834				6,593,874
Customer repurchase agreements			141,086				147,504				140,708				129,318				153,157				142,287				143,579				125,305
Total interest-bearing liabilities			7,158,899				7,320,132				7,233,536				7,423,262				7,856,842				7,643,381				8,313,546				5,732,349
Total stockholders' equity			1,519,679				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		$	3,769,529			$	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			1,669,737				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			1,140,059				1,161,183				1,089,287				1,049,597				1,017,304				977,607				969,251				659,494
Commercial business loans			1,482,901				1,820,598				2,225,885				2,291,097				2,189,828				2,207,388				1,899,264				819,133
Residential mortgage loans			925,093				934,365				994,899				1,066,714				1,136,989				1,189,452				1,208,566				1,139,786
Residential construction loans			186,129				170,511				176,135				179,925				180,494				173,280				162,978				145,266
Consumer loans			436,030				452,289				468,686				496,578				515,202				543,242				575,734				465,314
Total loans			9,609,478				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			29,426				50,075				66,958				82,263				68,255				54,784				53,312				35,030
Investment securities			1,535,265				1,403,496				1,482,905				1,407,455				1,418,683				1,404,238				1,398,586				1,179,084
Interest-earning assets			12,012,576				12,121,048				12,037,701				12,029,424				11,882,542				12,049,463				11,921,132				7,994,618
Total assets			12,791,526				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			3,879,572				3,869,293				3,763,135				3,394,110				3,424,729				3,281,607				3,007,222				1,797,227
Total deposits			10,809,665				10,832,115				10,663,346				10,343,190				9,999,144				9,862,639				9,614,176				6,433,694
Customer repurchase agreements			144,988				145,483				136,286				148,195				146,685				142,694				144,050				135,652
Total interest-bearing liabilities			7,247,756				7,315,021				7,356,656				7,742,987				7,609,829				7,969,487				8,326,909				5,612,056
Total stockholders' equity			1,517,793				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			11.87	%			12.07	%			11.91	%			11.54	%			11.34	%			10.92	%			10.78	%			12.99	%
Investment securities to earning assets			12.70	%			12.01	%			12.18	%			12.14	%			11.69	%			11.91	%			11.45	%			15.21	%
Loans to earning assets			83.98	%			79.39	%			82.95	%			86.11	%			85.98	%			86.36	%			83.10	%			81.76	%
Loans to assets			79.16	%			74.68	%			78.08	%			81.15	%			81.26	%			81.51	%			77.82	%			75.29	%
Loans to deposits			93.81	%			88.48	%			92.88	%			97.84	%			103.66	%			103.70	%			102.64	%			101.96	%
Assets under management		$	6,078,204			$	5,733,311			$	5,676,141			$	5,401,158			$	5,151,609			$	4,732,437			$	4,520,766			$	4,001,930
Capital measures:
Tier 1 leverage (1)			9.26	%			9.33	%			9.49	%			9.14	%			8.92	%			8.65	%			8.35	%			8.78	%
Common equity tier 1 capital to risk-weighted assets (1)			11.88	%			12.50	%			12.47	%			12.09	%			10.58	%			10.45	%			10.23	%			10.23	%
Tier 1 capital to risk-weighted assets (1)			11.88	%			12.50	%			12.47	%			12.09	%			10.58	%			10.45	%			10.23	%			10.23	%
Total regulatory capital to risk-weighted assets (1)			14.55	%			15.26	%			15.82	%			15.49	%			13.93	%			14.02	%			13.79	%			14.09	%
Book value per common share		$	33.68			$	33.52			$	33.02			$	32.04			$	31.24			$	30.30			$	29.58			$	32.68
Outstanding common shares			45,118,930				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 December 31, 2021.

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

		2021																2020
(Dollars in thousands)		December 31,				September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
Non-performing assets:
Loans 90 days past due:
Commercial real estate:
Commercial investor real estate		$	—			$	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			557				679				680				398				480				320				138				8
Residential construction			—				—				—				—				—				—				—				—
Consumer			—				—				—				—				—				1				—				—
Total loans 90 days past due			557				22,853				680				429				774				414				1,428				8
Non-accrual loans:
Commercial real estate:
Commercial investor real estate			12,489				15,386				42,072				42,776				45,227				26,784				26,482				17,770
Commercial owner-occupied real estate			9,306				9,854				8,183				8,316				11,561				6,511				6,729				4,074
Commercial AD&C			650				1,022				14,489				14,975				15,044				1,678				2,957				829
Commercial business			8,420				9,454				9,435				13,147				22,933				17,659				20,246				10,834
Residential real estate:
Residential mortgage			8,441				9,511				9,440				9,593				10,212				11,296				11,724				12,271
Residential construction			55				62				62				—				—				—				—				—
Consumer			6,725				7,826				7,718				7,193				7,384				7,493				7,800				5,596
Total non-accrual loans			46,086				53,115				91,399				96,000				112,361				71,421				75,938				51,374
Total restructured loans - accruing			2,167				2,199				2,228				2,271				2,317				2,854				2,553				2,575
Total non-performing loans			48,810				78,167				94,307				98,700				115,452				74,689				79,919				53,957
Other assets and other real estate owned (OREO)			1,034				1,105				1,234				1,354				1,455				1,389				1,389				1,416
Total non-performing assets		$	49,844			$	79,272			$	95,541			$	100,054			$	116,907			$	76,078			$	81,308			$	55,373

		For the Quarter Ended,
(Dollars in thousands)		December 31,2021				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		$	53,115			$	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			(754	)			(7,171	)			(2,166	)			(699	)			(513	)			(144	)			(162	)			(575	)
Net payments or draws			(5,786	)			(36,526	)			(3,693	)			(16,028	)			(13,212	)			(4,248	)			(1,881	)			(1,860	)
Loans placed on non-accrual			511				5,699				1,515				421				54,735				893				27,289				2,369
Non-accrual loans brought current			(1,000	)			(286	)			—				(55	)			—				(1,018	)			(682	)			(276	)
Balance at end of period		$	46,086			$	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		$	107,920			$	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			1,585				(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			(109	)			5,797				(144	)			(27	)			379				21				(4	)			—
Commercial owner-occupied real estate			—				136				—				—				—				—				—				—
Commercial AD&C			—				2,007				—				—				—				—				—				—
Commercial business			564				(53	)			2,359				634				56				88				(463	)			108
Residential real estate:
Residential mortgage			(80	)			(49	)			(11	)			(270	)			37				(6	)			15				333
Residential construction			(2	)			(2	)			(1	)			—				(1	)			(2	)			(1	)			(2	)
Consumer			(13	)			(24	)			(7	)			(39	)			(13	)			69				86				107
Net charge-offs/ (recoveries)			360				7,812				2,196				298				458				170				(367	)			546
Balance at the end of period		$	109,145			$	107,920			$	123,961			$	130,361			$	165,367			$	170,314			$	163,481			$	85,800
Asset quality ratios:
Non-performing loans to total loans			0.49	%			0.80	%			0.93	%			0.94	%			1.11	%			0.72	%			0.77	%			0.80	%
Non-performing assets to total assets			0.40	%			0.61	%			0.74	%			0.78	%			0.91	%			0.60	%			0.61	%			0.62	%
Allowance for credit losses to loans			1.10	%			1.11	%			1.23	%			1.25	%			1.59	%			1.65	%			1.58	%			1.28	%
Allowance for credit losses to non-performing loans			223.61	%			138.06	%			131.44	%			132.08	%			143.23	%			228.03	%			204.56	%			159.02	%
Annualized net charge-offs/ (recoveries) to average loans			0.01	%			0.31	%			0.09	%			0.01	%			0.02	%			0.01	%		(0.01		)%			0.03	%

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

		Three Months Ended December 31,
		2021											2020
(Dollars in thousands and tax-equivalent)		AverageBalances				Interest(1)				AnnualizedAverageYield/Rate			AverageBalances				Interest(1)				AnnualizedAverageYield/Rate
Assets
Commercial investor real estate loans		$	3,769,529			$	38,452			4.05	%		$	3,599,648			$	38,867			4.30	%
Commercial owner-occupied real estate loans			1,669,737				19,239			4.57				1,643,817				19,440			4.70
Commercial AD&C loans			1,140,059				11,543			4.02				1,017,304				10,400			4.07
Commercial business loans			1,482,901				21,500			5.75				2,189,828				20,015			3.64
Total commercial loans			8,062,226				90,734			4.47				8,450,597				88,722			4.18
Residential mortgage loans			925,093				7,829			3.39				1,136,989				10,102			3.55
Residential construction loans			186,129				1,521			3.24				180,494				1,698			3.74
Consumer loans			436,030				3,928			3.57				515,202				4,806			3.71
Total residential and consumer loans			1,547,252				13,278			3.42				1,832,685				16,606			3.62
Total loans (2)			9,609,478				104,012			4.30				10,283,282				105,328			4.08
Loans held for sale			29,426				271			3.68				68,255				592			3.48
Taxable securities			1,114,936				3,888			1.39				1,138,767				4,925			1.73
Tax-advantaged securities			420,329				2,431			2.31				279,916				1,971			2.81
Total investment securities (3)			1,535,265				6,319			1.65				1,418,683				6,896			1.94
Interest-bearing deposits with banks			837,741				330			0.16				111,820				27			0.10
Federal funds sold			666				1			0.15				502				—			0.10
Total interest-earning assets			12,012,576				110,933			3.67				11,882,542				112,843			3.78
Less: allowance for credit losses			(106,873	)										(171,026	)
Cash and due from banks			78,370											111,565
Premises and equipment, net			59,450											58,060
Other assets			748,003											764,188
Total assets		$	12,791,526										$	12,645,329
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,487,392			$	211			0.06	%		$	1,195,307			$	293			0.10	%
Regular savings deposits			512,814				46			0.04				406,637				57			0.06
Money market savings deposits			3,554,108				920			0.10				3,194,999				1,870			0.23
Time deposits			1,375,779				1,643			0.47				1,777,472				4,190			0.94
Total interest-bearing deposits			6,930,093				2,820			0.16				6,574,415				6,410			0.39
Federal funds purchased			11				—			0.06				230,677				177			0.30
Repurchase agreements			144,988				43			0.12				146,685				57			0.16
Advances from FHLB			—				—			—				428,278				2,730			2.54
Subordinated debt			172,664				1,940			4.49				229,774				2,590			4.51
Total borrowings			317,663				1,983			2.48				1,035,414				5,554			2.13
Total interest-bearing liabilities			7,247,756				4,803			0.26				7,609,829				11,964			0.63
Noninterest-bearing demand deposits			3,879,572											3,424,729
Other liabilities			146,405											176,871
Stockholders' equity			1,517,793											1,433,900
Total liabilities and stockholders' equity		$	12,791,526										$	12,645,329
Tax-equivalent net interest income and spread						$	106,130			3.41	%						$	100,879			3.15	%
Less: tax-equivalent adjustment							862											1,052
Net interest income						$	105,268										$	99,827
Interest income/earning assets										3.67	%										3.78	%
Interest expense/earning assets										0.16											0.40
Net interest margin										3.51	%										3.38	%

(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 $1.1 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.

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

		Year Ended December 31,
		2021											2020
(Dollars in thousands and tax-equivalent)		AverageBalances				Interest(1)				AnnualizedAverageYield/Rate			AverageBalances				Interest(1)				AnnualizedAverageYield/Rate
Assets
Commercial investor real estate loans		$	3,689,769			$	152,977			4.15	%		$	3,210,527			$	142,105			4.43	%
Commercial owner-occupied real estate loans			1,661,015				76,463			4.60				1,560,223				73,655			4.72
Commercial AD&C loans			1,110,420				44,460			4.00				906,414				40,262			4.44
Commercial business loans			1,952,537				94,391			4.83				1,781,197				69,633			3.91
Total commercial loans			8,413,741				368,291			4.38				7,458,361				325,655			4.37
Residential mortgage loans			979,754				33,874			3.46				1,168,668				43,001			3.68
Residential construction loans			178,171				6,127			3.44				165,567				6,683			4.04
Consumer loans			463,200				16,689			3.60				524,897				20,356			3.88
Total residential and consumer loans			1,621,125				56,690			3.50				1,859,132				70,040			3.77
Total loans (2)			10,034,866				424,981			4.24				9,317,493				395,695			4.25
Loans held for sale			57,016				1,736			3.05				52,893				1,686			3.19
Taxable securities			1,017,268				16,118			1.58				1,106,315				22,482			2.03
Tax-advantaged securities			440,215				10,426			2.37				244,168				7,378			3.02
Total investment securities (3)			1,457,483				26,544			1.82				1,350,483				29,860			2.21
Interest-bearing deposits with banks			500,400				725			0.14				246,155				446			0.18
Federal funds sold			570				1			0.12				403				1			0.28
Total interest-earning assets			12,050,335				453,987			3.77				10,967,427				427,688			3.90
Less: allowance for credit losses			(130,437	)										(128,793	)
Cash and due from banks			95,620											122,826
Premises and equipment, net			57,198											59,031
Other assets			745,486											754,605
Total assets		$	12,818,202										$	11,775,096
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,420,249			$	911			0.06	%		$	1,062,474			$	1,812			0.17	%
Regular savings deposits			482,331				235			0.05				374,196				269			0.07
Money market savings deposits			3,453,764				4,871			0.14				2,741,230				12,424			0.45
Time deposits			1,579,230				9,005			0.57				1,924,429				27,146			1.41
Total interest-bearing deposits			6,935,574				15,022			0.22				6,102,329				41,651			0.68
Federal funds purchased			15,154				13			0.08				367,240				1,515			0.41
Repurchase agreements			143,734				169			0.12				142,283				450			0.32
Advances from FHLB			111,311				2,649			2.38				545,652				6,593			1.21
Subordinated debt			208,199				7,913			3.80				224,306				10,192			4.54
Total borrowings			478,398				10,744			2.25				1,279,481				18,750			1.47
Total interest-bearing liabilities			7,413,972				25,766			0.35				7,381,810				60,401			0.82
Noninterest-bearing demand deposits			3,728,249											2,880,294
Other liabilities			157,374											173,501
Stockholders' equity			1,518,607											1,339,491
Total liabilities and stockholders' equity		$	12,818,202										$	11,775,096
Tax-equivalent net interest income and spread						$	428,221			3.42	%						$	367,287			3.08	%
Less: tax-equivalent adjustment							3,703											4,128
Net interest income						$	424,518										$	363,159
Interest income/earning assets										3.77	%										3.90	%
Interest expense/earning assets										0.21											0.55
Net interest margin										3.56	%										3.35	%

(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 $3.7 million and $4.1 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.

Source: Sandy Spring Bancorp, Inc.