Form 8-K SANDY SPRING BANCORP For: Jan 23

 

Exhibit 99.1

 

NEWS RELEASE

 

  

FOR IMMEDIATE RELEASE

 

SANDY SPRING BANCORP REPORTS RECORD ANNUAL EARNINGS

Company Announces Fifth Consecutive Record Year and $116.4 Million in Annual Net Income

  

OLNEY, MARYLAND, January 23, 2020 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income for the fourth quarter of 2019 of $28.5 million ($0.80 per diluted share) compared to net income of $25.6 million ($0.72 per diluted share) for the fourth quarter of 2018 and net income of $29.4 million ($0.82 per diluted share) for the third quarter of 2019.

 

Net earnings for 2019 were $116.4 million ($3.25 per diluted share) compared to $100.9 million ($2.82 per diluted share) for 2018. The results from 2019 and 2018 included recovered interest income from previously acquired impaired loans of $1.8 million and $2.4 million, respectively. The results for 2018 also included the effect of merger expenses associated with the acquisition of WashingtonFirst Bankshares (“WashingtonFirst”) totaling $11.8 million (an after tax impact of $0.19 per share) compared to $1.3 million for 2019, which are associated with the pending acquisition of Revere Bank that is expected close in the beginning of the second quarter of 2020. Revere Bank has 11 banking offices and more than $2.8 billion in assets (as of September 30, 2019).

 

“We delivered a strong financial performance in 2019, which was our first full year following the successful integration of WashingtonFirst Bank. We rose to the occasion with record results and announced another wave of strategic expansion through the acquisitions of Revere Bank and Rembert Pendleton Jackson, a registered investment advisor headquartered in Falls Church, Virginia,” said Daniel J. Schrider, President and Chief Executive Officer.

 

“Throughout the year we adjusted our strategies in response to the competitive market and interest rate environment, while consistently growing deposits, delivering impressive fee-income growth, and staying laser focused on providing exceptional experiences for the individuals and businesses we serve,” added Schrider. “We finished the year on a high note and the momentum from our fourth quarter performance will serve us well in 2020.”

 

Fourth Quarter Highlights:

 

·

Total loans at December 31, 2019 increased 2% compared to December 31, 2018. During this period, the Company experienced 7% growth in total commercial loans as investor real estate loans and owner occupied real estate loans grew by 11% and 7%, respectively. The impact of commercial loan growth was offset by the decline in the mortgage loan portfolio due to the impact of mortgage loan refinance activity driven by the current interest rate environment and the sale of the majority of new mortgage loan production and the decline in consumer loan balances.

 

 

·

Total deposits grew 9% compared to the end of 2018. Deposit growth reduced the loan-to-deposit ratio to 104% at the end of 2019 compared to 111% at the end of 2018. The year-over-year deposit growth included an 8% increase in noninterest-bearing deposits, a 13% increase in core interest-bearing deposits and a 38% reduction in wholesale deposits.

 

·

The provision for loan losses for the current quarter was $1.7 million compared to $3.4 million for the fourth quarter of 2018 and $1.5 million for the prior quarter of the current year.

 

·

Preparation for the implementation of the Current Expected Credit Losses (“CECL”) accounting standard in the first quarter of 2020 has been completed. Exclusive of the $2.8 million reclassification to the allowance for loan losses related to the acquired credit impaired loans, the estimated impact to retained earnings at transition date is expected to be approximately $2.0 million based on the expected performance of the economy.

 

·

During the quarter, the Company repurchased 668,191 shares of common stock at an average price of $36.34 per share as part of its existing share repurchase program.

 

·

The net interest margin was 3.38% for the fourth quarter of 2019, compared to 3.57% for the fourth quarter of 2018 and 3.51% for the third quarter of 2019.

 

·

The Company successfully issued $175 million in subordinated debt at an advantageous rate during the quarter. The debt provides capital to support future growth in the real estate lending portfolio and fund anticipated future redemptions of existing higher priced funding sources.

 

·

Driven by income from mortgage banking activities, wealth management and fees related to customer level commercial loan swaps, quarterly non-interest income increased 37% as compared to the same period in the prior year. Income from mortgage banking activities grew 269% compared to the same quarter of the prior year.

 

·

Non-interest expense for the quarter increased $3.4 million or 8% compared to the same quarter of the prior year. Increases occurred in most major expense categories, notably compensation and benefits, driven by incentive-based programs, merger costs and professional fees and services. A portion of the non-interest expense increases were offset by the decrease in FDIC insurance expense due to the application of the remaining assessment credit during the current quarter.

 

·

The non-GAAP efficiency ratio was 51.98% for the current quarter as compared to 51.78% for the fourth quarter of 2018 and 50.95% for the third quarter of 2019.

 

 

Review of Balance Sheet and Credit Quality

 

At December 31, 2019, total assets amounted to $8.6 billion compared to $8.2 billion at December 31, 2018. Total loans were $6.7 billion at December 31, 2019 compared to $6.6 billion at the end of 2018. During this period, the composition of the portfolio shifted as total commercial loans grew 7% while mortgage loans have declined 8% due to the refinance activity and the strategic decision to sell the majority of new mortgage loan production. Consumer loans experienced a 10% decline related to recent mortgage refinancing activity. During this period, total funded commercial loan production was a record $884 million. Commercial loans originated during the current year had total unfunded commitments of $479 million as of December 31, 2019.

 

 

Total deposits at December 31, 2019 were $6.4 billion compared to $5.9 billion at December 31, 2018, a 9% increase during the period. The increase from year-end 2018 was driven by increases in non-interest bearing demand, interest-bearing demand and money market deposit categories. The impact of the increase in rates associated with these additional deposits during 2019 was partially offset by the benefit realized from an increase in noninterest-bearing deposits and a reduction in wholesale deposits. During the current quarter, the Company issued $175 million in subordinated debt. The proceeds from the debt provides capital for future growth in the real estate lending portfolio, in addition to providing funds to reduce higher priced funding sources.

 

Tangible common equity totaled $782 million at December 31, 2019, compared to $727 million at December 31, 2018 as the ratio of tangible common equity to tangible assets grew to 9.46% at December 31, 2019, as compared to 9.21% at December 31, 2018. The decline in the tangible common equity ratio from 9.74% at the end of the prior quarter was the result of the impact on stockholder’s equity of stock repurchases in the current quarter. The Company had a total risk-based capital ratio of 14.85%, a common equity tier 1 risk-based capital ratio of 11.06%, a tier 1 risk-based capital ratio of 11.21% and a tier 1 leverage ratio of 9.70% at December 31, 2019.

 

The ratio of non-performing loans to total loans increased to 0.62% at December 31, 2019, compared to 0.55% at December 31, 2018. Non-performing loans totaled $41.3 million at December 31, 2019, compared to $36.0 million at December 31, 2018, and $40.1 million at September 30, 2019. The modest growth in non-performing loans over the prior periods occurred primarily as a result of increases in segments of the loan portfolio secured by real estate. Non-performing loans include accruing loans 90 days or more past due and restructured loans, but exclude purchased credit impaired loans acquired in the prior year’s acquisition of WashingtonFirst.

 

Loan charge-offs, net of recoveries, for the fourth quarter of 2019 totaled $0.5 million as compared to $0.3 million for the fourth quarter of 2018. The allowance for loan losses represented 0.84% of outstanding loans and 136% of non-performing loans at December 31, 2019, compared to 0.81% of outstanding loans and 149% of non-performing loans at December 31, 2018. While non-performing loans increased from the prior year-end to December 31, 2019, the related reserves for those loans remained stable due to adequate collateral values.

 

 

Income Statement Review

 

For the fourth quarter of 2019, net interest income decreased 1% to $65.6 million compared to $66.1 million for the fourth quarter of 2018. Interest income remained level while interest expense increased 2% driven by deposit growth. The rise in interest expense was partially offset by the decline in the cost of borrowings from the prior year quarter to the current quarter.

 

The net interest margin for the current quarter was 3.38%, compared to the net interest margin for the fourth quarter of 2018 of 3.57%. The current quarter’s margin benefited from the decrease in average borrowed funds and their associated rates as this decrease offset the increase in the average rate paid on deposits. The average rate on interest-bearing liabilities remained at 1.48% for the quarter ended December 31, 2019 compared to the same quarter of the prior year. During this same period, the yield on interest-earning assets declined from 4.60% for the quarter ended December 31, 2018 to 4.38% for the quarter ended December 31, 2019 due to the interest rate environment, resulting in margin compression. The 9% increase in average noninterest-bearing deposits compared to the prior year quarter provided an interest free funding source that benefited the current quarter’s net interest margin. Amortization of the fair value adjustments to both interest-earning assets and interest-bearing liabilities directly attributable to the WashingtonFirst acquisition had a 4 basis point positive effect on the net interest margin for the current period, compared to 12 basis points for the same period of the prior year. The resulting adjusted net interest margin for the current quarter was 3.34% as compared to 3.45% for the prior year quarter.

 

The provision for loan losses was $1.7 million for the fourth quarter of 2019, compared to $3.4 million for the fourth quarter of 2018. The decline in the loan loss provision for the current quarter compared to the prior year quarter reflects the impact of the decline in the amount of loans subject to the allowance for loan losses.

 

Non-interest income increased 37% to $19.2 million for the fourth quarter of 2019, compared to $14.0 million for the fourth quarter of 2018. The increase in non-interest income was due primarily to the 269% increase in income from mortgage banking activities, as the volume of residential mortgages sold increased. In addition, wealth management income increased 17% and other income rose 58% due to fees from customer level commercial loan swaps during this period.

 

Non-interest expense increased 8% to $46.1 million for the fourth quarter of 2019, compared to $42.7 million in the fourth quarter of 2018. The current year quarter included $0.9 million in merger expenses. Excluding merger expenses, non-interest expense increased 6% compared to the prior year, driven by higher compensation costs associated with incentive-based sales programs and professional fees and services. A portion of these increases were offset by the decrease in FDIC insurance as a result of the application of the remaining assessment credit during the current quarter. The non-GAAP efficiency ratio was 51.98% for the fourth quarter of 2019, compared to 51.78% for the fourth quarter of 2018.

 

Net interest income for the full year of 2019 increased 2% compared to 2018 due principally to loan growth. The net interest margin for 2019 was 3.51% compared to 3.60% for the prior year. The year ended December 31, 2019 included $1.8 million in recovered interest income on acquired credit impaired loans compared to $2.4 million for the same period of the prior year. Excluding the recovered interest income from both periods, the interest margin would have been 3.48% for the current year versus 3.58% for the prior year. Amortization of the fair value adjustments had a 5 basis point positive impact on the net interest margin for 2019, compared to 13 basis point positive impact for the prior year.

 

 

The provision for loan losses was $4.7 million for the year ended December 31, 2019, compared to $9.0 million for 2018. The decrease in the provision for the current period compared to the prior year was primarily the result of the overall improvement in the qualitative credit metrics of the loan portfolio during the previous twelve months in addition to lower loan growth than experienced in the prior year.

 

Non-interest income increased 17% to $71.3 million for 2019, compared to $61.1 million for 2018. Excluding life insurance mortality proceeds of $0.6 million and $1.6 million in 2019 and 2018, respectively, non-interest income increased 19%. This increase was driven by income from mortgage banking activities, which increased 108% from the prior year, to $14.7 million for the year ended December 31, 2019, as a result of the rise in mortgage lending activity during the year. Sales of originated mortgage loans rose 74% during 2019 compared to 2018. Excluding income from bank owned life insurance, increases occurred in the majority of the other categories of non-interest income.

 

Non-interest expense decreased $0.7 million to $179.1 million for 2019, compared to $179.8 million for the prior year. The prior year included $11.8 million in merger expenses compared to $1.3 million for the current year. Excluding merger expenses, non-interest expense rose 6%, driven primarily by increases in salaries and benefits. Increases in non-interest expense also occurred in occupancy and equipment costs, software and outside data services, professional fees and marketing. A portion of the increases in non-interest expense was offset by the decrease in FDIC insurance during the year. The non-GAAP efficiency ratio was 51.52% for 2019 compared to 50.87% for 2018.

 

Explanation of Non-GAAP Financial Measures

 

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

 

	·	Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets.

·

The non-GAAP efficiency ratio is non-GAAP in that it excludes amortization of intangible assets, merger expenses and securities gains and includes tax-equivalent income.

 

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 table included with this release for details on the earnings impact of these items.

 

 

Conference Call

 

The Company’s management will host a conference call to discuss its fourth quarter results today at 2:00 P.M. (ET). A live Webcast of the conference call is available through the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the website are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available on the website until 9:00 am (ET) February 6, 2020. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10137689.

 

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 central Maryland, Northern Virginia, and Washington, D.C. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. Visit www.sandyspringbank.com for more information.

 

For additional information or questions, please contact:

 

Daniel J. Schrider, President & Chief Executive Officer, or

Philip J. Mantua, E.V.P. & Chief Financial Officer

Sandy Spring Bancorp

17801 Georgia Avenue

Olney, Maryland 20832

1-800-399-5919

Email:	[email protected]
	[email protected]
Website: www.sandyspringbank.com

 

Media Contact:

Jen Schell

301-570-8331

[email protected]

 

Forward-Looking Statements

 

Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release. These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan losses; assessments of market risk; and statements of the ability to achieve financial and other goals.

 

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made. Sandy Spring Bancorp does not assume any duty and does not undertake to update its forward-looking statements. Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Sandy Spring Bancorp anticipated in its forward-looking statements and future results could differ materially from historical performance.

 

 

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: 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; risks, uncertainties and other factors relating to the acquisition of Revere Bank by Sandy Spring Bancorp, including the ability to obtain regulatory and shareholder approvals and meet other closing conditions to the transaction, and delay in closing the merger; 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, 2018, 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												Twelve Months Ended
		December 31,								%				December 31,								%
(Dollars in thousands, except per share data)		2019				2018				Change				2019				2018				Change
Results of Operations:
Net interest income		$	65,583			$	66,145				(1	)%		$	265,308			$	260,445				2	%
Provision for loan losses			1,655				3,403				(51	)			4,684				9,023				(48	)
Non-interest income			19,224				14,030				37				71,322				61,049				17
Non-interest expense			46,081				42,667				8				179,085				179,783				-
Income before income taxes			37,071				34,105				9				152,861				132,688				15
Net income			28,457				25,566				11				116,433				100,864				15
Pre-tax pre-provision pre-merger income (1)		$	39,674			$	37,508				6			$	158,857			$	153,477				4
Return on average assets			1.32	%			1.25	%							1.39	%			1.27	%
Return on average common equity			9.93	%			9.70	%							10.51	%			9.84	%
Net interest margin			3.38	%			3.57	%							3.51	%			3.60	%
Efficiency ratio - GAAP basis (2)			54.34	%			53.22	%							53.20	%			55.92	%
Efficiency ratio - Non-GAAP basis (2)			51.98	%			51.78	%							51.52	%			50.87	%
Per share data:
Basic net income		$	0.80			$	0.72				11	%		$	3.25			$	2.82				15	%
Diluted net income		$	0.80			$	0.72				11			$	3.25			$	2.82				15
Average fully diluted shares			35,773,246				35,747,478				-				35,852,846				35,728,146				-
Dividends declared per share		$	0.30			$	0.28				7			$	1.18			$	1.10				7
Book value per share			32.40				30.06				8				32.40				30.06				8
Tangible book value per share (1)			22.37				20.45				9				22.37				20.45				9
Outstanding shares			34,970,370				35,530,734				(2	)			34,970,370				35,530,734				(2	)
Financial Condition at period-end:
Investment securities		$	1,125,136			$	1,010,724				11	%		$	1,125,136			$	1,010,724				11	%
Loans			6,705,232				6,573,014				2				6,705,232				6,573,014				2
Interest-earning assets			7,947,703				7,640,978				4				7,947,703				7,640,978				4
Assets			8,629,002				8,243,272				5				8,629,002				8,243,272				5
Deposits			6,440,319				5,914,880				9				6,440,319				5,914,880				9
Interest-bearing liabilities			5,485,055				5,378,026				2				5,485,055				5,378,026				2
Stockholders' equity			1,132,974				1,067,903				6				1,132,974				1,067,903				6
Capital ratios:
Tier 1 leverage (3)			9.70	%			9.50	%							9.70	%			9.50	%
Tier 1 capital to risk-weighted assets (3)			11.21	%			11.06	%							11.21	%			11.06	%
Total regulatory capital to risk-weighted assets (3)			14.85	%			12.26	%							14.85	%			12.26	%
Common equity tier 1 capital to risk-weighted assets (3)			11.06	%			10.90	%							11.06	%			10.90	%
Tangible common equity to tangible assets (4)			9.46	%			9.21	%							9.46	%			9.21	%
Average equity to average assets			13.31	%			12.90	%							13.25	%			12.87	%
Credit quality ratios:
Allowance for loan losses to loans			0.84	%			0.81	%							0.84	%			0.81	%
Non-performing loans to total loans			0.62	%			0.55	%							0.62	%			0.55	%
Non-performing assets to total assets			0.50	%			0.46	%							0.50	%			0.46	%
Allowance for loan losses to non-performing loans			136.02	%			148.51	%							136.02	%			148.51	%
Annualized net charge-offs to average loans (5)			0.03	%			0.02	%							0.03	%			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 Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization and merger expenses 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, 2019
(4)	The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets and other comprehensive gains (losses). See the Reconciliation Table included with these Financial Highlights.
(5)	Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

 

 

 

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

 

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
(Dollars in thousands)		2019				2018				2019				2018
Pre-tax pre-provision pre-merger income:
Net income		$	28,457			$	25,566			$	116,433			$	100,864
Plus non-GAAP adjustments:
Merger expenses			948				-				1,312				11,766
Income taxes			8,614				8,539				36,428				31,824
Provision for loan losses			1,655				3,403				4,684				9,023
Pre-tax pre-provision pre-merger income		$	39,674			$	37,508			$	158,857			$	153,477
Efficiency ratio - GAAP basis:
Non-interest expense		$	46,081			$	42,667			$	179,085			$	179,783
Net interest income plus non-interest income		$	84,807			$	80,175			$	336,630			$	321,494
Efficiency ratio - GAAP basis			54.34	%			53.22	%			53.20	%			55.92	%
Efficiency ratio - Non-GAAP basis:
Non-interest expense		$	46,081			$	42,667			$	179,085			$	179,783
Less non-GAAP adjustments:
Amortization of intangible assets			481				540				1,946				2,162
Merger expenses			948				-				1,312				11,766
Non-interest expense - as adjusted		$	44,652			$	42,127			$	175,827			$	165,855
Net interest income plus non-interest income		$	84,807			$	80,175			$	336,630			$	321,494
Plus non-GAAP adjustment:
Tax-equivalent income			1,149				1,232				4,746				4,715
Less non-GAAP adjustment:
Securities gains			57				45				77				190
Net interest income plus non-interest income - as adjusted		$	85,899			$	81,362			$	341,299			$	326,019
Efficiency ratio - Non-GAAP basis			51.98	%			51.78	%			51.52	%			50.87	%
Tangible common equity ratio:
Total stockholders' equity		$	1,132,974			$	1,067,903			$	1,132,974			$	1,067,903
Accumulated other comprehensive loss			4,332				15,754				4,332				15,754
Goodwill			(347,149	)			(347,149	)			(347,149	)			(347,149	)
Other intangible assets, net			(7,841	)			(9,788	)			(7,841	)			(9,788	)
Tangible common equity		$	782,316			$	726,720			$	782,316			$	726,720
Total assets		$	8,629,002			$	8,243,272			$	8,629,002			$	8,243,272
Goodwill			(347,149	)			(347,149	)			(347,149	)			(347,149	)
Other intangible assets, net			(7,841	)			(9,788	)			(7,841	)			(9,788	)
Tangible assets		$	8,274,012			$	7,886,335			$	8,274,012			$	7,886,335
Tangible common equity ratio			9.46	%			9.21	%			9.46	%			9.21	%
Outstanding common shares			34,970,370				35,530,734				34,970,370				35,530,734
Tangible book value per common share		$	22.37			$	20.45			$	22.37			$	20.45

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED
		December 31,				December 31,
(Dollars in thousands)		2019				2018
Assets
Cash and due from banks		$	82,469			$	67,014
Federal funds sold			208				609
Interest-bearing deposits with banks			63,426				33,858
Cash and cash equivalents			146,103				101,481
Residential mortgage loans held for sale (at fair value)			53,701				22,773
Investments available-for-sale (at fair value)			1,073,333				937,335
Other equity securities			51,803				73,389
Total loans			6,705,232				6,571,634
Less: allowance for loan losses			(56,132	)			(53,486	)
Net loans			6,649,100				6,518,148
Premises and equipment, net			58,615				61,942
Other real estate owned			1,482				1,584
Accrued interest receivable			23,282				24,609
Goodwill			347,149				347,149
Other intangible assets, net			7,841				9,788
Other assets			216,593				145,074
Total assets		$	8,629,002			$	8,243,272
Liabilities
Noninterest-bearing deposits		$	1,892,052			$	1,750,319
Interest-bearing deposits			4,548,267				4,164,561
Total deposits			6,440,319				5,914,880
Securities sold under retail repurchase agreements and federal funds purchased			213,605				327,429
Advances from FHLB			513,777				848,611
Subordinated debentures			209,406				37,425
Accrued interest payable and other liabilities			118,921				47,024
Total liabilities			7,496,028				7,175,369
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 34,970,370 and 35,530,734 at December 31, 2019 and December 31, 2018, respectively			34,970				35,531
Additional paid in capital			586,622				606,573
Retained earnings			515,714				441,553
Accumulated other comprehensive loss			(4,332	)			(15,754	)
Total stockholders' equity			1,132,974				1,067,903
Total liabilities and stockholders' equity		$	8,629,002			$	8,243,272

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
(Dollars in thousands, except per share data)		2019				2018				2019				2018
Interest Income:
Interest and fees on loans		$	77,522			$	78,081			$	316,550			$	293,131
Interest on loans held for sale			462				262				1,607				1,245
Interest on deposits with banks			724				222				2,129				1,304
Interest and dividends on investment securities:
Taxable			5,437				5,219				21,739				20,516
Exempt from federal income taxes			1,243				1,820				5,834				7,855
Interest on federal funds sold			2				3				10				31
Total interest income			85,390				85,607				347,869				324,082
Interest Expense:
Interest on deposits			14,723				12,556				61,681				39,139
Interest on retail repurchase agreements and federal funds purchased			216				570				1,161				1,169
Interest on advances from FHLB			3,189				5,851				16,578				21,408
Interest on subordinated debt			1,679				485				3,141				1,921
Total interest expense			19,807				19,462				82,561				63,637
Net interest income			65,583				66,145				265,308				260,445
Provision for loan losses			1,655				3,403				4,684				9,023
Net interest income after provision for loan losses			63,928				62,742				260,624				251,422
Non-interest Income:
Investment securities gains			57				45				77				190
Service charges on deposit accounts			2,427				2,459				9,692				9,324
Mortgage banking activities			4,170				1,130				14,711				7,073
Wealth management income			6,401				5,492				22,669				21,284
Insurance agency commissions			1,331				1,138				6,612				6,158
Income from bank owned life insurance			660				663				3,165				4,327
Bank card fees			1,435				1,368				5,616				5,567
Other income			2,743				1,735				8,780				7,126
Total non-interest income			19,224				14,030				71,322				61,049
Non-interest Expense:
Salaries and employee benefits			26,251				23,934				103,950				96,998
Occupancy expense of premises			4,663				4,413				19,470				18,352
Equipment expenses			2,791				2,426				10,720				9,335
Marketing			1,085				1,061				4,456				3,924
Outside data services			1,854				1,763				7,567				6,603
FDIC insurance			123				1,255				2,260				5,095
Amortization of intangible assets			481				540				1,946				2,162
Merger expenses			948				-				1,312				11,766
Professional fees and services			2,553				1,966				6,978				6,056
Other expenses			5,332				5,309				20,426				19,492
Total non-interest expense			46,081				42,667				179,085				179,783
Income before income taxes			37,071				34,105				152,861				132,688
Income tax expense			8,614				8,539				36,428				31,824
Net income		$	28,457			$	25,566			$	116,433			$	100,864
Net Income Per Share Amounts:
Basic net income per share		$	0.80			$	0.72			$	3.25			$	2.82
Diluted net income per share		$	0.80			$	0.72			$	3.25			$	2.82
Dividends declared per share		$	0.30			$	0.28			$	1.18			$	1.10

 

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2019																2018
(Dollars in thousands, except per share data)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Profitability for the Quarter:
Tax-equivalent interest income		$	86,539			$	88,229			$	88,423			$	89,424			$	86,839			$	85,595			$	79,774			$	76,589
Interest expense			19,807				20,292				21,029				21,433				19,462				16,783				14,779				12,613
Tax-equivalent net interest income			66,732				67,937				67,394				67,991				67,377				68,812				64,995				63,976
Tax-equivalent adjustment			1,149				1,147				1,209				1,241				1,232				1,221				1,177				1,085
Provision (credit) for loan losses			1,655				1,524				1,633				(128	)			3,403				1,890				1,733				1,997
Non-interest income			19,224				18,573				16,556				16,969				14,030				15,033				14,868				17,118
Non-interest expense			46,081				44,925				43,887				44,192				42,667				42,393				45,082				49,641
Income before income taxes			37,071				38,914				37,221				39,655				34,105				38,341				31,871				28,371
Income tax expense			8,614				9,531				8,945				9,338				8,539				9,107				7,472				6,706
Net income		$	28,457			$	29,383			$	28,276			$	30,317			$	25,566			$	29,234			$	24,399			$	21,665
Financial Performance:
Pre-tax pre-provision pre-merger income		$	39,674			$	40,802			$	38,854			$	39,527			$	37,508			$	40,811			$	35,832			$	39,326
Return on average assets			1.32	%			1.39	%			1.37	%			1.49	%			1.25	%			1.45	%			1.23	%			1.12	%
Return on average common equity			9.93	%			10.38	%			10.32	%			11.46	%			9.70	%			11.26	%			9.66	%			8.70	%
Net interest margin			3.38	%			3.51	%			3.54	%			3.60	%			3.57	%			3.71	%			3.56	%			3.58	%
Efficiency ratio - GAAP basis (1)			54.34	%			52.63	%			53.04	%			52.79	%			53.22	%			51.31	%			57.29	%			62.04	%
Efficiency ratio - Non-GAAP basis (1)			51.98	%			50.95	%			51.71	%			51.44	%			51.78	%			49.27	%			52.98	%			49.54	%
Per Share Data:
Basic net income per share		$	0.80			$	0.82			$	0.79			$	0.85			$	0.72			$	0.82			$	0.68			$	0.61
Diluted net income per share		$	0.80			$	0.82			$	0.79			$	0.85			$	0.72			$	0.82			$	0.68			$	0.61
Average fully diluted shares			35,773,246				35,900,102				35,890,437				35,806,459				35,747,478				35,744,085				35,743,927				35,683,542
Dividends declared per common share		$	0.30			$	0.30			$	0.30			$	0.28			$	0.28			$	0.28			$	0.28			$	0.26
Non-interest Income:
Securities gains		$	57			$	15			$	5			$	-			$	45			$	82			$	-			$	63
Service charges on deposit accounts			2,427				2,516				2,442				2,307				2,459				2,316				2,290				2,259
Mortgage banking activities			4,170				4,408				3,270				2,863				1,130				1,672				2,064				2,207
Wealth management income			6,401				5,493				5,539				5,236				5,492				5,344				5,387				5,061
Insurance agency commissions			1,331				2,116				1,265				1,900				1,138				2,016				1,180				1,824
Income from bank owned life insurance			660				662				654				1,189				663				663				670				2,331
Bank card fees			1,435				1,462				1,467				1,252				1,368				1,436				1,393				1,370
Other income			2,743				1,901				1,914				2,222				1,735				1,504				1,884				2,003
Total Non-interest Income		$	19,224			$	18,573			$	16,556			$	16,969			$	14,030			$	15,033			$	14,868			$	17,118
Non-interest Expense:
Salaries and employee benefits		$	26,251			$	26,234			$	25,489			$	25,976			$	23,934			$	24,488			$	24,664			$	23,912
Occupancy expense of premises			4,663				4,816				4,760				5,231				4,413				4,355				4,642				4,942
Equipment expenses			2,791				2,641				2,712				2,576				2,426				2,441				2,243				2,225
Marketing			1,085				1,541				887				943				1,061				770				945				1,148
Outside data services			1,854				1,973				1,962				1,778				1,763				1,736				1,707				1,397
FDIC insurance			123				(83	)			1,084				1,136				1,255				1,257				1,390				1,193
Amortization of intangible assets			481				491				483				491				540				540				541				541
Merger expenses			948				364				-				-				-				580				2,228				8,958
Professional fees and services			2,553				1,546				1,634				1,245				1,966				1,351				1,699				1,040
Other expenses			5,332				5,402				4,876				4,816				5,309				4,875				5,023				4,285
Total Non-interest Expense		$	46,081			$	44,925			$	43,887			$	44,192			$	42,667			$	42,393			$	45,082			$	49,641

(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 and merger expenses from non-interest expense;

     securities gains from non-interest income; and adds the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights.

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2019																2018
(Dollars in thousands)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Balance Sheets at Quarter End:
Residential mortgage loans		$	1,149,327			$	1,199,275			$	1,241,081			$	1,249,968			$	1,228,247			$	1,181,427			$	1,106,674			$	992,287
Residential construction loans			146,279				150,692				171,106				176,388				186,785				188,779				197,372				215,445
Commercial AD&C loans			684,010				678,906				658,709				688,939				681,201				631,589				609,266				564,871
Commercial investor real estate loans			2,169,156				2,036,021				1,994,027				1,962,879				1,958,395				1,924,397				1,923,827				1,928,439
Commercial owner occupied real estate loans			1,288,677				1,278,505				1,224,986				1,216,713				1,202,903				1,201,673				1,184,421				1,174,739
Commercial business loans			801,019				772,619				772,158				769,660				796,264				738,083				702,939				652,797
Consumer loans			466,764				480,530				489,176				505,443				517,839				523,011				525,574				532,973
Total loans			6,705,232				6,596,548				6,551,243				6,569,990				6,571,634				6,388,959				6,250,073				6,061,551
Allowance for loan losses			(56,132	)			(54,992	)			(54,024	)			(53,089	)			(53,486	)			(50,409	)			(48,493	)			(46,931	)
Loans held for sale			53,701				78,821				50,511				24,998				22,773				31,581				40,000				28,486
Investment securities			1,125,136				946,210				955,715				987,299				1,010,724				992,797				1,017,274				1,040,339
Interest-earning assets			7,947,703				7,742,138				7,713,364				7,648,654				7,639,598				7,428,534				7,532,664				7,285,731
Total assets			8,629,002				8,437,538				8,398,519				8,327,900				8,243,272				8,034,565				8,152,600				7,894,918
Noninterest-bearing demand deposits			1,892,052				2,081,435				2,023,614				1,813,708				1,750,319				1,902,537				1,910,690				1,767,523
Total deposits			6,440,319				6,493,899				6,389,749				6,224,523				5,914,880				5,898,394				5,837,826				5,627,206
Customer repurchase agreements			138,605				126,008				150,604				122,626				137,429				142,669				139,647				149,323
Total interest-bearing liabilities			5,485,055				5,093,265				5,136,860				5,297,108				5,378,026				5,042,431				5,168,055				5,057,645
Total stockholders' equity			1,132,974				1,140,041				1,119,445				1,095,848				1,067,903				1,042,716				1,026,349				1,014,608
Quarterly Average Balance Sheets:
Residential mortgage loans		$	1,169,623			$	1,215,132			$	1,244,086			$	1,230,319			$	1,188,135			$	1,122,946			$	1,034,062			$	1,117,478
Residential construction loans			149,690				162,196				174,095				189,720				202,710				215,578				223,171				193,327
Commercial AD&C loans			695,817				651,905				686,282				676,205				647,115				632,354				576,076				582,876
Commercial investor real estate loans			2,092,478				1,982,979				1,960,919				1,964,699				1,936,936				1,905,427				1,924,759				1,988,340
Commercial owner occupied real estate loans			1,274,782				1,258,000				1,215,632				1,207,799				1,196,506				1,190,865				1,184,409				940,065
Commercial business loans			765,159				786,150				756,594				780,318				751,754				700,791				666,280				657,372
Consumer loans			477,572				486,865				505,235				515,644				522,453				524,605				531,965				538,198
Total loans			6,625,121				6,543,227				6,542,843				6,564,704				6,445,609				6,292,566				6,140,722				6,017,656
Loans held for sale			50,208				61,870				37,121				17,846				21,923				29,939				25,403				35,768
Investment securities			1,002,692				941,048				964,863				1,010,940				986,146				996,365				1,028,306				1,062,325
Interest-earning assets			7,859,836				7,690,629				7,619,240				7,627,187				7,495,338				7,372,536				7,311,272				7,212,878
Total assets			8,542,837				8,370,789				8,294,883				8,258,116				8,104,916				7,986,525				7,926,735				7,841,611
Noninterest-bearing demand deposits			1,927,063				1,909,884				1,796,802				1,682,720				1,766,672				1,822,931				1,796,644				1,651,258
Total deposits			6,459,551				6,405,762				6,247,409				5,952,942				5,822,580				5,783,992				5,657,420				5,489,715
Customer repurchase agreements			126,596				138,736				141,865				129,059				146,637				139,809				148,539				136,694
Total interest-bearing liabilities			5,326,303				5,202,876				5,269,209				5,403,946				5,230,254				5,076,717				5,058,016				5,116,904
Total stockholders' equity			1,136,824				1,123,185				1,099,078				1,073,291				1,045,378				1,030,167				1,013,081				1,010,106
Financial Measures:
Average equity to average assets			13.31	%			13.42	%			13.25	%			13.00	%			12.90	%			12.90	%			12.78	%			12.88	%
Investment securities to earning assets			14.16	%			12.22	%			12.39	%			12.91	%			13.23	%			13.36	%			13.50	%			14.28	%
Loans to earning assets			84.37	%			85.20	%			84.93	%			85.90	%			86.02	%			86.01	%			82.97	%			83.20	%
Loans to assets			77.71	%			78.18	%			78.00	%			78.89	%			79.72	%			79.52	%			76.66	%			76.78	%
Loans to deposits			104.11	%			101.58	%			102.53	%			105.55	%			111.10	%			108.32	%			107.06	%			107.72	%
Capital Measures:
Tier 1 leverage (1)			9.70	%			9.96	%			9.80	%			9.61	%			9.50	%			9.46	%			9.27	%			9.21	%
Tier 1 capital to risk-weighted assets (1)			11.21	%			11.52	%			11.59	%			11.35	%			11.06	%			11.18	%			11.01	%			11.08	%
Total regulatory capital to risk-weighted assets (1)			14.85	%			12.70	%			12.79	%			12.54	%			12.26	%			12.38	%			12.19	%			12.27	%
Common equity tier 1 capital to risk-weighted assets (1)			11.06	%			11.37	%			11.43	%			11.19	%			10.90	%			11.02	%			10.85	%			10.92	%
Book value per share		$	32.40			$	32.00			$	31.43			$	30.82			$	30.06			$	29.35			$	28.90			$	28.61
Outstanding shares			34,970,370				35,625,822				35,614,953				35,557,110				35,530,734				35,521,541				35,511,943				35,463,269

(1) Estimated ratio at December 31, 2019

 

  

Sandy Spring Bancorp, Inc. and Subsidiaries      

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED                          

 

		2019												2018
(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 business		$	-		$	17		$	-		$	-		$	49		$	150		$	6		$	-
Commercial real estate:
Commercial AD&C			-			-			-			-			-			1,261			-			-
Commercial investor real estate			-			1,201			1,248			-			-			-			-			-
Commercial owner occupied real estate			-			-			-			90			-			13			112			-
Consumer			-			-			-			-			219			563			-			126
Residential real estate:
Residential mortgage			-			-			-			221			221			-			-			-
Residential construction			-			-			-			-			-			-			-			-
Total loans 90 days past due			-			1,218			1,248			311			489			1,987			118			126
Non-accrual loans:
Commercial business			8,450			6,393			7,083			8,013			7,086			6,352			6,883			6,634
Commercial real estate:
Commercial AD&C			829			829			1,990			3,306			3,306			136			136			136
Commercial investor real estate			8,437			8,454			6,409			6,071			5,355			5,861			5,878			5,813
Commercial owner occupied real estate			4,148			3,810			3,766			5,992			4,234			3,352			3,440			3,524
Consumer			4,107			4,561			4,439			4,081			4,107			4,098			4,298			3,244
Residential real estate:
Residential mortgage			12,661			12,574			10,625			9,704			9,336			9,134			6,251			7,063
Residential construction			-			-			-			156			159			163			168			174
Total non-accrual loans			38,632			36,621			34,312			37,323			33,583			29,096			27,054			26,588
Total restructured loans - accruing			2,636			2,287			2,133			2,479			1,942			2,224			1,663			2,678
Total non-performing loans			41,268			40,126			37,693			40,113			36,014			33,307			28,835			29,392
Other assets and real estate owned (OREO)			1,482			1,482			1,486			1,410			1,584			2,118			2,361			2,761
Total non-performing assets		$	42,750		$	41,608		$	39,179		$	41,523		$	37,598		$	35,425		$	31,196		$	32,153

 

 

		For the Quarter Ended,
		December 31,				September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)		2019				2019				2019				2019				2018				2018				2018				2018
Analysis of Non-accrual Loan Activity:
Balance at beginning of period		$	36,621			$	34,312			$	37,323			$	33,583			$	29,096			$	27,054			$	26,588			$	26,336
Non-accrual balances transferred to OREO			-				-				(195	)			-				-				-				-				(289	)
Non-accrual balances charged-off			(454	)			(705	)			(604	)			(227	)			(360	)			(91	)			(144	)			(411	)
Net payments or draws			(2,916	)			(2,903	)			(5,517	)			(1,786	)			(1,126	)			(1,777	)			(1,635	)			(357	)
Loans placed on non-accrual			5,381				6,015				3,396				6,202				5,973				4,193				2,245				1,309
Non-accrual loans brought current			-				(98	)			(91	)			(449	)			-				(283	)			-				-
Balance at end of period		$	38,632			$	36,621			$	34,312			$	37,323			$	33,583			$	29,096			$	27,054			$	26,588
Analysis of Allowance for Loan Losses:
Balance at beginning of period		$	54,992			$	54,024			$	53,089			$	53,486			$	50,409			$	48,493			$	46,931			$	45,257
Provision (credit) for loan losses			1,655				1,524				1,633				(128	)			3,403				1,890				1,733				1,997
Less loans charged-off, net of recoveries:
Commercial business			15				389				735				7				(9	)			(49	)			(73	)			322
Commercial real estate:
Commercial AD&C			-				(224	)			(4	)			-				-				-				-				(62	)
Commercial investor real estate			(3	)			(3	)			(3	)			(7	)			109				(49	)			(8	)			(8	)
Commercial owner occupied real estate			-				-				-				-				-				-				-				-
Consumer			241				187				(18	)			182				45				85				244				99
Residential real estate:
Residential mortgage			264				209				(10	)			89				183				(11	)			13				(22	)
Residential construction			(2	)			(2	)			(2	)			(2	)			(2	)			(2	)			(5	)			(6	)
Net charge-offs			515				556				698				269				326				(26	)			171				323
Balance at end of period		$	56,132			$	54,992			$	54,024			$	53,089			$	53,486			$	50,409			$	48,493			$	46,931
Asset Quality Ratios:
Non-performing loans to total loans			0.62	%			0.61	%			0.58	%			0.61	%			0.55	%			0.52	%			0.46	%			0.48	%
Non-performing assets to total assets			0.50	%			0.49	%			0.47	%			0.50	%			0.46	%			0.44	%			0.38	%			0.41	%
Allowance for loan losses to loans			0.84	%			0.83	%			0.82	%			0.81	%			0.81	%			0.79	%			0.78	%			0.77	%
Allowance for loan losses to non-performing loans			136.02	%			137.05	%			143.33	%			132.35	%			148.51	%			151.35	%			168.17	%			159.67	%
Annualized net charge-offs to average loans			0.03	%			0.03	%			0.04	%			0.02	%			0.02	%			0.00	%			0.01	%			0.02	%

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Three Months Ended December 31,
		2019											2018
										Annualized												Annualized
			Average				(1)				Average				Average				(1)				Average
(Dollars in thousands and tax-equivalent)			Balances				Interest				Yield/Rate				Balances				Interest				Yield/Rate
Assets
Residential mortgage loans		$	1,169,623			$	11,030				3.77	%		$	1,188,135			$	11,348				3.82	%
Residential construction loans			149,690				1,650				4.37				202,710				2,086				4.08
Total mortgage loans			1,319,313				12,680				3.84				1,390,845				13,434				3.86
Commercial AD&C loans			695,817				9,388				5.35				647,115				9,466				5.80
Commercial investor real estate loans			2,092,478				24,982				4.74				1,936,936				24,301				4.98
Commercial owner occupied real estate loans			1,274,782				15,606				4.86				1,196,506				14,661				4.86
Commercial business loans			765,159				9,821				5.09				751,769				10,447				5.51
Total commercial loans			4,828,236				59,797				4.91				4,532,326				58,875				5.15
Consumer loans			477,572				5,594				4.65				522,453				6,258				4.75
Total loans (2)			6,625,121				78,071				4.68				6,445,624				78,567				4.84
Loans held for sale			50,208				462				3.68				21,923				262				4.78
Taxable securities			816,008				5,704				2.79				728,560				5,471				3.00
Tax-exempt securities (3)			186,684				1,576				3.38				257,586				2,314				3.59
Total investment securities (4)			1,002,692				7,280				2.90				986,146				7,785				3.16
Interest-bearing deposits with banks			181,394				724				1.58				40,864				222				2.16
Federal funds sold			421				2				1.66				796				3				1.51
Total interest-earning assets			7,859,836				86,539				4.38				7,495,353				86,839				4.60
Less:  allowance for loan losses			(54,653	)											(51,302	)
Cash and due from banks			68,011												64,866
Premises and equipment, net			59,277												62,219
Other assets			610,366												534,356
Total assets		$	8,542,837											$	8,105,492
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	800,263				685				0.34	%		$	695,762				226				0.13	%
Regular savings deposits			325,540				94				0.11				334,593				82				0.10
Money market savings deposits			1,875,045				5,820				1.23				1,601,050				5,691				1.41
Time deposits			1,531,640				8,124				2.10				1,424,503				6,557				1.83
Total interest-bearing deposits			4,532,488				14,723				1.29				4,055,908				12,556				1.23
Other borrowings			133,716				216				0.64				214,278				570				1.06
Advances from FHLB			516,101				3,189				2.45				922,620				5,851				2.52
Subordinated debentures			143,998				1,679				4.66				37,448				485				5.18
Total interest-bearing liabilities			5,326,303				19,807				1.48				5,230,254				19,462				1.48
Noninterest-bearing demand deposits			1,927,063												1,766,672
Other liabilities			152,647												63,188
Stockholders' equity			1,136,824												1,045,378
Total liabilities and stockholders' equity		$	8,542,837											$	8,105,492
Net interest income and spread						$	66,732				2.90	%						$	67,377				3.12	%
Less: tax-equivalent adjustment							1,149												1,232
Net interest income						$	65,583											$	66,145
Interest income/earning assets											4.38	%											4.60	%
Interest expense/earning assets											1.00												1.03
Net interest margin											3.38	%											3.57	%

 

(1)	Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 26.13% for 2019 and 2018. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.1 million and $1.2 million in 2019 and 2018, respectively.
(2)	Non-accrual loans are included in the average balances.
(3)	Includes only investments that are exempt from federal taxes.
(4)	Available for sale investments are presented at amortized cost.

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

 

		Twelve Months Ended December 31,
		2019												2018
										Annualized												Annualized
		Average				(1)				Average				Average				(1)				Average
(Dollars in thousands and tax-equivalent)		Balances				Interest				Yield/Rate				Balances				Interest				Yield/Rate
Assets
Residential mortgage loans		$	1,214,625			$	46,438				3.82	%		$	1,115,869			$	41,628				3.73	%
Residential construction loans			168,797				7,232				4.28				208,741				8,289				3.97
Total mortgage loans			1,383,422				53,670				3.88				1,324,610				49,917				3.77
Commercial AD&C loans			677,536				39,241				5.79				609,844				35,058				5.75
Commercial investor real estate loans			2,000,571				99,410				4.97				1,938,633				96,125				4.96
Commercial owner occupied real estate loans			1,239,289				60,581				4.89				1,128,836				53,712				4.76
Commercial business loans			772,052				41,300				5.35				694,326				36,499				5.26
Total commercial loans			4,689,448				240,532				5.13				4,371,639				221,394				5.06
Consumer loans			496,199				24,391				4.92				529,249				23,568				4.45
Total loans (2)			6,569,069				318,593				4.85				6,225,498				294,879				4.74
Loans held for sale			41,905				1,607				3.84				28,225				1,245				4.41
Taxable securities			768,521				22,873				2.98				736,054				21,362				2.90
Tax-exempt securities (3)			211,236				7,403				3.50				281,962				9,976				3.54
Total investment securities (4)			979,757				30,276				3.09				1,018,016				31,338				3.08
Interest-bearing deposits with banks			108,534				2,129				1.96				74,956				1,304				1.74
Federal funds sold			572				10				1.76				2,151				31				1.42
Total interest-earning assets			7,699,837				352,615				4.58				7,348,846				328,797				4.47
Less:  allowance for loan losses			(53,746	)											(48,483	)
Cash and due from banks			65,181												68,183
Premises and equipment, net			60,595												61,686
Other assets			595,272												535,282
Total assets		$	8,367,139											$	7,965,514
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	750,606				1,990				0.27	%		$	721,759				883				0.12	%
Regular savings deposits			329,158				415				0.13				376,207				570				0.15
Money market savings deposits			1,751,989				25,437				1.45				1,541,142				18,719				1.21
Time deposits			1,604,996				33,839				2.11				1,290,626				18,967				1.47
Total interest-bearing deposits			4,436,749				61,681				1.39				3,929,734				39,139				1.00
Other borrowings			152,088				1,161				0.76				172,888				1,169				0.68
Advances from FHLB			645,587				16,578				2.57				980,541				21,408				2.18
Subordinated debentures			64,251				3,141				4.89				37,501				1,921				5.13
Total interest-bearing liabilities			5,298,675				82,561				1.56				5,120,664				63,637				1.24
Noninterest-bearing demand deposits			1,830,008												1,759,867
Other liabilities			130,146												60,188
Stockholders' equity			1,108,310												1,024,795
Total liabilities and stockholders' equity		$	8,367,139											$	7,965,514
Net interest income and spread						$	270,054				3.02	%						$	265,160				3.23	%
Less: tax-equivalent adjustment							4,746												4,715
Net interest income						$	265,308											$	260,445
Interest income/earning assets											4.58	%											4.47	%
Interest expense/earning assets											1.07												0.87
Net interest margin											3.51	%											3.60	%

 

(1)	Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 26.13% for 2019 and 2018. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.7 million and $4.7 million in 2019 and 2018, respectively.
(2)	Non-accrual loans are included in the average balances.
(3)	Includes only investments that are exempt from federal taxes.
(4)	Available for sale investments are presented at amortized cost.