OLNEY, Md., Jan. 28, 2025 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported a net loss of $39.5 million ($0.87 per diluted common share) for the quarter ended December 31, 2024, compared to net income of $16.2 million ($0.36 per diluted common share) for the third quarter of 2024 and $26.1 million ($0.58 per diluted common share) for the fourth quarter of 2023. The current quarter's net loss is a result of a $54.4 million goodwill impairment charge determined during our annual goodwill impairment test based on the terms of the merger agreement with Atlantic Union Bankshares Corporation ("AUB"). The goodwill impairment is a non-cash charge and has no impact on the Company's regulatory capital ratios, cash flows, core operating performance or liquidity position.

The current quarter's core earnings were $21.0 million ($0.47 per diluted common share), compared to $17.9 million ($0.40 per diluted common share) for the quarter ended September 30, 2024 and $27.1 million ($0.60 per diluted common share) for the quarter ended December 31, 2023. Core earnings exclude the goodwill impairment charge, merger and acquisition expense, and the after-tax impact of amortization of intangibles, investment securities gains or losses and other non-recurring or extraordinary items. The current quarter's increase in core earnings as compared to the linked quarter was driven by higher net interest income coupled with higher non-interest income, and lower provision for credit losses, partially offset by higher adjusted non-interest expense. The total provision for credit losses was $4.5 million for the fourth quarter of 2024 compared to $6.3 million for the previous quarter and a credit of $3.4 million for the fourth quarter of 2023.

"We are pleased with our fourth quarter results, most notably our improved net interest margin, growth in core earnings, and reductions in brokered deposits," said Daniel J. Schrider, Chair, President and CEO of Sandy Spring Bank. "We remain focused on serving our clients and building communities in the Greater Washington region."

Fourth Quarter Highlights

Total assets at December 31, 2024 decreased by 2% to $14.1 billion compared to $14.4 billion at September 30, 2024. This decline is predominantly driven by a $200.0 million reduction in FHLB advances and a resulting $231.4 million decline in cash and cash equivalents quarter-over-quarter.

Total loans remained level at $11.5 billion as of December 31, 2024 compared to September 30, 2024. During the current quarter, AD&C and commercial business loans and lines increased by $71.7 million and $32.2 million, respectively, while the commercial investor real estate segment declined by $88.9 million. Total residential mortgage and consumer loan portfolios increased by $19.6 million during this period.

Total deposits stayed relatively unchanged at $11.7 billion at December 31, 2024 compared to September 30, 2024. Interest-bearing deposits increased $106.1 million, while noninterest-bearing deposits declined $98.1 million. Growth in interest-bearing deposits was mainly experienced within interest checking accounts, which grew $122.9 million during the current quarter, while decline in noninterest-bearing deposit categories was driven by lower balances in commercial checking accounts. Total deposits, excluding brokered deposits, increased by $32.0 million quarter-over-quarter and represented 94% of total deposits as of December 31, 2024.

The ratio of non-performing loans to total loans was 1.03% at December 31, 2024 compared to 1.09% at September 30, 2024 and 0.81% at December 31, 2023. The current quarter's decline in non-performing loans was mainly related to pay downs on several non-accrual loans along with a single commercial real estate loan that returned to an accrual status.

Net interest income for the fourth quarter of 2024 grew $4.7 million or 6% compared to the previous quarter and $4.4 million or 5% compared to the fourth quarter of 2023. Compared to the previous quarter, interest income increased by $1.0 million, while interest expense decreased by $3.7 million.

The net interest margin was 2.53% for the fourth quarter of 2024 compared to 2.44% for the third quarter of 2024 and 2.45% for the fourth quarter of 2023. Compared to the linked quarter, the rate paid on interest-bearing liabilities decreased 23 basis points, driven by a 26 basis point decline in the rate on interest-bearing deposits, while the yield on interest-earning assets declined by six basis points. The decline in the rate paid on interest-bearing deposits was attributable to a 50 basis point reduction in the federal funds rate during the current quarter and the associated actions taken by management to re-price the Company's funding base.

Provision for credit losses directly attributable to the funded loan portfolio was $4.7 million for the current quarter compared to $6.3 million in the previous quarter and a credit of $2.6 million in the prior year quarter. The current quarter's provision expense is mainly attributable to a slight deterioration in the projected economic variables coupled with higher qualitative adjustments, partially offset by lower probability of recession. In addition, during the current quarter, the provision for unfunded commitments declined by $0.2 million, a result of higher utilization rates on lines of credit.

Non-interest income for the fourth quarter of 2024 increased by 10% or $1.9 million compared to the linked quarter and grew by 31% or $5.1 million compared to the prior year quarter. The quarter-over-quarter increase was mainly due to an increase in income from bank-owned life insurance driven by one-time mortality proceeds received during the current quarter in combination with higher swap fees and higher wealth management income, which was partially offset by lower income from mortgage banking activities.

Non-interest expense for the fourth quarter of 2024 increased by $61.3 million compared to the third quarter of 2024 and $67.1 million compared to the prior year quarter, due to the goodwill impairment charge of $54.4 million incurred during the current quarter. Excluding the goodwill impairment charge, adjusted non-interest expense was $79.8 million during the current quarter compared to $72.9 million in the linked quarter. This quarterly increase in adjusted non-interest expense was primarily due to a combination of merger and acquisition expense associated with the pending merger with AUB along with higher salaries and compensation benefits, partially offset by lower professional fees and services.

We perform an annual goodwill impairment test as of October 1st of each year. During the current year, we utilized the terms incorporated in the merger agreement between the Company and AUB. The implied value of the Company utilized the stock conversion ratio in the merger agreement and used a weighted average approach to consider both AUB's most recent closing stock price prior to the merger announcement date, as well as the forward sale price for AUB common stock under the forward sale agreement announced simultaneous with the merger agreement. This valuation method resulted in the estimated fair value of the Company being below its book value and required the recording of a goodwill impairment charge of $54.4 million.

Return on average assets ("ROA") for the quarter ended December 31, 2024 was (1.09)% and return on average tangible common equity ("ROTCE") was 5.46% compared to 0.46% and 5.88%, respectively, for the third quarter of 2024 and 0.73% and 9.26%, respectively, for the fourth quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.58% and core ROTCE was 6.80% compared to 0.50% and 5.88%, respectively, for the previous quarter and 0.76% and 9.26%, respectively, for the fourth quarter of 2023.

The GAAP efficiency ratio was 124.61% for the fourth quarter of 2024, compared to 72.12% for the third quarter of 2024 and 68.33% for the fourth quarter of 2023. An elevated GAAP efficiency ratio for the current quarter was the result of higher non-interest expense due to the $54.4 million goodwill impairment charge. The non-GAAP efficiency ratio was 67.16% for the fourth quarter of 2024 compared to 69.06% for the third quarter of 2024 and 66.16% for the prior year quarter.

Balance Sheet and Credit Quality

Total assets were $14.1 billion at December 31, 2024, as compared to $14.4 billion at September 30, 2024. At December 31, 2024, total loans remained stable at $11.5 billion compared to the previous quarter. During this period, the growth in AD&C and commercial business loans and lines of $71.7 million or 6% and $32.2 million or 2%, respectively, was mostly offset by the decline in commercial investor real estate loans of $88.9 million or 2%. Total residential mortgage and consumer loan portfolios increased by $19.6 million or 1%.

Deposits stayed relatively unchanged at $11.7 billion at December 31, 2024 compared to September 30, 2024. During this period, noninterest-bearing deposits decreased $98.1 million or 3%, while interest-bearing deposits increased $106.1 million or 1%. The decline in noninterest-bearing deposit categories was driven by decreases in commercial checking accounts. Growth in interest-bearing deposits was seen predominantly in interest checking accounts, which grew $122.9 million or 8% during the current quarter. Total deposits, excluding brokered deposits, increased by $32.0 million quarter-over-quarter and remained at 94% of total deposits as of December 31, 2024 compared to September 30, 2024, reflecting continued strength and stability of the core deposit base. Total uninsured deposits at December 31, 2024 were approximately 37% of total deposits.

Total borrowings decreased $201.7 million or 23% at December 31, 2024 as compared to the previous quarter, primarily driven by a $200.0 million reduction in FHLB advances, of which $150 million related to scheduled maturities, while $50 million was prepaid generating a $0.5 million gain on debt extinguishment. At December 31, 2024, available unused sources of liquidity, which consist of available FHLB borrowings, fed funds, funds through the Federal Reserve Bank's discount window, as well as excess cash and unpledged investment securities, totaled $6.3 billion or 147% of uninsured deposits.

The tangible common equity to tangible assets ratio was 8.84% at December 31, 2024, compared to 8.83% at September 30, 2024.

At December 31, 2024, the Company had a total risk-based capital ratio of 15.38%, a common equity tier 1 risk-based capital ratio of 11.36%, a tier 1 risk-based capital ratio of 11.36%, and a tier 1 leverage ratio of 9.39%. These risk-based capital ratios compare to a total risk-based capital ratio of 15.53%, a common equity tier 1 risk-based capital ratio of 11.27%, a tier 1 risk-based capital ratio of 11.27%, and a tier 1 leverage ratio of 9.59% at September 30, 2024. All of these ratios remain well in excess of the mandated minimum regulatory requirements.

Non-performing loans include non-accrual loans and accruing loans 90 days or more past due. At December 31, 2024, non-performing loans totaled $119.4 million, compared to $125.3 million at September 30, 2024 and $91.8 million at December 31, 2023. The ratio of non-performing loans to total loans was 1.03% compared to 1.09% on a linked quarter basis. These levels of non-performing loans compare to 0.81% at December 31, 2023. The current quarter's decline in non-performing loans was mainly related to pay downs on several non-accrual loans along with a single commercial real estate loan that returned to an accrual status based on the borrower's historical payment performance. Total net charge-offs for the current quarter amounted to $1.7 million compared to $0.7 million for the third quarter of 2024 and net recoveries of $0.1 million for the fourth quarter of 2023.

At December 31, 2024, the allowance for credit losses was $134.4 million or 1.16% of outstanding loans and 113% of non-performing loans, compared to $131.4 million or 1.14% of outstanding loans and 105% of non-performing loans at the end of the previous quarter and $120.9 million or 1.06% of outstanding loans and 132% of non-performing loans at the end of the fourth quarter of 2023. The increase in the allowance for the current quarter compared to the previous quarter mainly reflects slight deterioration in the projected economic variables coupled with higher qualitative adjustments, partially offset by lower probability of economic recession.

Income Statement Review

Quarterly Results

Net loss was $39.5 million ($0.87 per diluted common share) for the three months ended December 31, 2024 compared to net income of $16.2 million ($0.36 per diluted common share) for the three months ended September 30, 2024 and $26.1 million ($0.58 per diluted common share) for the prior year quarter. The current quarter's net loss is predominantly related to the $54.4 million goodwill impairment charge. The current quarter's core earnings were $21.0 million ($0.47 per diluted common share), compared to $17.9 million ($0.40 per diluted common share) for the previous quarter and $27.1 million ($0.60 per diluted common share) for the quarter ended December 31, 2023. The increase in the current quarter's core earnings compared to the linked quarter was driven primarily by higher net interest income and non-interest income, and lower provision for credit losses, partially offset by higher adjusted non-interest expense.

Net interest income for the fourth quarter of 2024 increased $4.7 million or 6% compared to the previous quarter and $4.4 million or 5% compared to the fourth quarter of 2023. During the current quarter, interest income increased $1.0 million, while interest expense declined $3.7 million. The higher interest rate environment during the current year was primarily responsible for a $5.4 million year-over-year increase in interest income, which outpaced the $1.0 million year-over-year growth in interest expense.

The net interest margin was 2.53% for the fourth quarter of 2024 compared to 2.44% for the third quarter of 2024 and 2.45% for the fourth quarter of 2023. The increase in the net interest margin during the current quarter was a result of a 23 basis point decrease in the rate paid on interest-bearing liabilities, driven by a 26 basis point decline in the rate paid on interest-bearing deposits, while the yield earned on interest-earning assets declined by six basis points. As compared to the prior year quarter, the yield on interest-earning assets increased eight basis points, while the rate paid on interest-bearing liabilities declined nine basis points, resulting in net interest margin increase of eight basis points.

The total provision for credit losses was $4.5 million for the fourth quarter of 2024 compared to $6.3 million for the previous quarter and a credit of $3.4 million for the fourth quarter of 2023. The provision for credit losses directly attributable to the funded loan portfolio was $4.7 million for the current quarter compared to $6.3 million for the third quarter of 2024 and a credit of $2.6 million for the fourth quarter of 2023. The current quarter's provision is mainly a reflection of a slight deterioration in the projected economic variables along with higher qualitative adjustments, partially offset by lower probability of economic recession. In addition, during the current quarter, the reserve for unfunded commitments declined to $1.3 million from $1.5 million in the previous quarter due to higher utilization rates on lines of credit.

Non-interest income for the fourth quarter of 2024 increased by 10% or $1.9 million compared to the linked quarter and grew by 31% or $5.1 million compared to the prior year quarter. The current quarter's increase in non-interest income as compared to the previous quarter was mainly driven by the $1.9 million increase in income from bank owned life insurance, generated by one-time mortality proceeds, $0.4 million of swap fee income, and $0.2 million increase in wealth management income, due to the overall favorable market performance, partially offset by $0.4 million decrease in income from mortgage banking activities, due to lower sales volumes.

Non-interest expense for the fourth quarter of 2024 increased $61.3 million or 84% compared to the third quarter of 2024 and $67.1 million or 100% compared to the fourth quarter of 2023. The increase over the comparative quarters was primarily due to the goodwill impairment charge of $54.4 million in the fourth quarter of 2024. Excluding the goodwill impairment charge, adjusted non-interest expense increased $6.9 million or 9% compared to the linked quarter. This quarter-over-quarter increase is predominantly attributable to $4.2 million in merger and acquisition expenses incurred during the current quarter, a $3.3 million increase in salaries and benefits, due to an increase in employee incentive compensation, and a $0.7 million increase in marketing expense. These increases were partially offset by the $1.8 million reduction in professional fees and services.

For the fourth quarter of 2024, the GAAP efficiency ratio was 124.61% compared to 72.12% for the third quarter of 2024 and 68.33% for the fourth quarter of 2023. The non-GAAP efficiency ratio was 67.16% for the current quarter as compared to 69.06% for the third quarter of 2024 and 66.16% for the fourth quarter of 2023.

ROA for the quarter ended December 31, 2024 was (1.09)% and ROTCE was 5.46% compared to 0.46% and 5.88%, respectively, for the third quarter of 2024 and 0.73% and 9.26%, respectively, for the fourth quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.58% and core ROTCE was 6.80% compared to 0.50% and 5.88% for the third quarter of 2024 and 0.76% and 9.26%, respectively, for the fourth quarter of 2023.

Explanation of Non-GAAP Financial Measures

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

Tangible common equity and related measures are non-GAAP measures that exclude the impact of goodwill and other intangible assets.
The non-GAAP efficiency ratio excludes goodwill impairment loss, merger and acquisition expense, amortization of intangible assets, investment securities gains/(losses), pension settlement expense, severance expense, contingent payment expense, and includes tax-equivalent income.
Core earnings and the related measures of core earnings per diluted common share, core return on average assets and core return on average tangible common equity reflect net income exclusive of goodwill impairment loss, merger and acquisition expense, and after-tax impact of amortization of intangible assets, investment securities gains/(losses) and other non-recurring or extraordinary items.
Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.

These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to the non-GAAP Reconciliation tables included with this release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank, a premier community bank in the Greater Washington, D.C. region. With over 50 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of wealth management services.

Source: Sandy Spring Bancorp, Inc.

Code: SASR-E

For additional information or questions, please contact:
	Daniel J. Schrider, Chair, President & Chief Executive Officer, or
	Charles S. Cullum, E.V.P. & Chief Financial Officer
	Sandy Spring Bancorp
	17801 Georgia Avenue
	Olney, Maryland 20832
	1-800-399-5919
	Email:	DSchrider@sandyspringbank.com
		CCullum@sandyspringbank.com

	Website:	www.sandyspringbank.com
	Media Contact:
	Jennifer E. Schell, Division Executive, Marketing & Corporate Communications
	301-774-6400 x8331
	jschell@sandyspringbank.com

Forward-Looking Statements

Sandy Spring Bancorp's forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events; the possibility that the Company's pending merger with AUB does not close when expected or at all because required regulatory or other approvals or conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger); the risk that the benefits from the merger may not be fully realized or may take longer to realize than expected; and the risk of disruption to the Company's business as a result of the pendency of the merger;. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2023 and its Form 10-Q for the quarter ended September 30, 2024, including in the Risk Factors section of those reports, and in its other SEC reports. Sandy Spring Bancorp's forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC's Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS - UNAUDITED

	Three Months Ended December 31,						% Change		Year Ended December 31,						% Change
(Dollars in thousands, except per share data)		2024			2023		% Change			2024			2023		% Change
Results of operations:
Net interest income	$	86,086		$	81,696		5	%	$	327,126		$	354,550		(8	)%
Provision/ (credit) for credit losses		4,468			(3,445	)	N/M			14,192			(17,561	)	N/M
Non-interest income		21,646			16,560		31			79,315			67,078		18
Non-interest expense		134,241			67,142		100			343,288			275,054		25
Income/ (loss) before income tax expense		(30,977	)		34,559		N/M			48,961			164,135		(70	)
Net income/ (loss)		(39,453	)		26,100		N/M			19,935			122,844		(84	)

Net income/ (loss) attributable to common shareholders	$	(39,457	)	$	26,066		N/M		$	19,902		$	122,621		(84	)
Pre-tax pre-provision net income/ (loss)⁽¹⁾	$	(26,509	)	$	31,114		N/M		$	63,153		$	146,574		(57	)

Return on average assets		(1.09	)%		0.73	%				0.14	%		0.87	%
Return on average common equity		(9.70	)%		6.70	%				1.25	%		8.04	%
Return on average tangible common equity⁽¹⁾		5.46	%		9.26	%				6.73	%		11.06	%
Net interest margin		2.53	%		2.45	%				2.46	%		2.67	%
Efficiency ratio - GAAP basis⁽²⁾		124.61	%		68.33	%				84.46	%		65.24	%
Efficiency ratio - Non-GAAP basis⁽²⁾		67.16	%		66.16	%				67.07	%		60.99	%

Per share data:
Basic net income/ (loss) per common share	$	(0.87	)	$	0.58		N/M		$	0.44		$	2.74		(84	)%
Diluted net income/ (loss) per common share	$	(0.87	)	$	0.58		N/M		$	0.44		$	2.73		(84	)
Weighted average diluted common shares		45,133,834			45,009,574		—			45,227,487			44,947,263		1
Dividends declared per share	$	0.34		$	0.34		—		$	1.36		$	1.36		—
Book value per common share	$	34.51		$	35.36		(2	)	$	34.51		$	35.36		(2	)
Tangible book value per common share⁽¹⁾	$	26.99		$	26.64		1		$	26.99		$	26.64		1
Outstanding common shares		45,140,417			44,913,561		1			45,140,417			44,913,561		1

Financial condition at period-end:
Investment securities	$	1,418,244		$	1,414,453		—	%	$	1,418,244		$	1,414,453		—	%
Loans		11,537,966			11,366,989		2			11,537,966			11,366,989		2
Assets		14,127,480			14,028,172		1			14,127,480			14,028,172		1
Deposits		11,745,665			10,996,538		7			11,745,665			10,996,538		7
Stockholders' equity		1,558,011			1,588,142		(2	)		1,558,011			1,588,142		(2	)

Capital ratios:
Tier 1 leverage⁽³⁾		9.39	%		9.51	%				9.39	%		9.51	%
Common equity tier 1 capital to risk-weighted assets⁽³⁾		11.36	%		10.90	%				11.36	%		10.90	%
Tier 1 capital to risk-weighted assets⁽³⁾		11.36	%		10.90	%				11.36	%		10.90	%
Total regulatory capital to risk-weighted assets⁽³⁾		15.38	%		14.92	%				15.38	%		14.92	%
Tangible common equity to tangible assets⁽⁴⁾		8.84	%		8.77	%				8.84	%		8.77	%
Average equity to average assets		11.26	%		10.97	%				11.31	%		10.87	%

Credit quality ratios:
Allowance for credit losses to loans		1.16	%		1.06	%				1.16	%		1.06	%
Non-performing loans to total loans		1.03	%		0.81	%				1.03	%		0.81	%
Non-performing assets to total assets		0.87	%		0.65	%				0.87	%		0.65	%
Allowance for credit losses to non-performing loans		112.59	%		131.59	%				112.59	%		131.59	%
Annualized net charge-offs/ (recoveries) to average loans⁽⁵⁾		0.06	%		—	%				0.03	%		0.01	%

N/M - not meaningful

(1)	Represents a non-GAAP measure.
(2)	The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes goodwill impairment loss, merger and acquisition expense, intangible asset amortization, pension settlement expense, severance expense and contingent payment expense from non-interest expense; and investment securities gains/ (losses) from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.
(3)	Estimated ratio at December 31, 2024.
(4)	The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding goodwill and other intangible assets into stockholders' equity after deducting goodwill and other intangible assets. See the Reconciliation Table included with these Financial Highlights.
(5)	Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED (CONTINUED)

OPERATING EARNINGS - METRICS

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in thousands)		2024			2023			2024			2023
Core earnings (non-GAAP):
Net income/ (loss) (GAAP)	$	(39,453	)	$	26,100		$	19,935		$	122,844
Plus/ (less) non-GAAP adjustments:
Merger, acquisition and disposal expense⁽²⁾		4,164			—			4,164			—
Amortization of intangible assets (net of tax)⁽¹⁾		1,937			1,047			6,801			3,898
Goodwill impairment loss⁽²⁾		54,391			—			54,391			—
Severance expense (net of tax)⁽¹⁾		—			—			—			1,445
Pension settlement expense (net of tax)⁽¹⁾		—			—			—			6,088
Investment securities gains/ losses		—			—			—			—
Contingent payment expense (net of tax)⁽¹⁾		—			—			—			27
Core earnings (Non-GAAP)	$	21,039		$	27,147		$	85,291		$	134,302

Core earnings per diluted common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)		45,133,834			45,009,574			45,227,487			44,947,263

Earnings/ (loss) per diluted common share (GAAP)	$	(0.87	)	$	0.58		$	0.44		$	2.73
Core earnings per diluted common share (non-GAAP)	$	0.47		$	0.60		$	1.89		$	2.99

Core return on average assets (non-GAAP):
Average assets (GAAP)	$	14,362,321		$	14,090,423		$	14,129,795		$	14,055,645

Return on average assets (GAAP)		(1.09	)%		0.73	%		0.14	%		0.87	%
Core return on average assets (non-GAAP)		0.58	%		0.76	%		0.60	%		0.96	%

Return/ Core return on average tangible common equity (non-GAAP):
Net Income/ (loss) (GAAP)	$	(39,453	)	$	26,100		$	19,935		$	122,844
Plus: Amortization of intangible assets (net of tax)⁽¹⁾		1,937			1,047			6,801			3,898
Plus: Goodwill impairment loss⁽²⁾		54,391			—			54,391			—
Net income adjusted (non-GAAP)	$	16,875		$	27,147		$	81,127		$	126,742

Average total stockholders' equity (GAAP)	$	1,617,633		$	1,546,312		$	1,597,456		$	1,528,242
Average goodwill		(356,341	)		(363,436	)		(361,653	)		(363,436	)
Average other intangible assets, net		(30,885	)		(20,162	)		(30,178	)		(18,596	)
Average tangible common equity (non-GAAP)	$	1,230,407		$	1,162,714		$	1,205,625		$	1,146,210

Return on average tangible common equity (non-GAAP)		5.46	%		9.26	%		6.73	%		11.06	%
Core return on average tangible common equity (non-GAAP)		6.80	%		9.26	%		7.07	%		11.72	%

(1)	Tax adjustments have been determined using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively.
(2)	Adjustment is not tax-effected as it represents a tax nondeductible item.

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in thousands)		2024			2023			2024			2023
Pre-tax pre-provision net income:
Net income/ (loss) (GAAP)	$	(39,453	)	$	26,100		$	19,935		$	122,844
Plus/ (less) non-GAAP adjustments:
Income tax expense		8,476			8,459			29,026			41,291
Provision/ (credit) for credit losses		4,468			(3,445	)		14,192			(17,561	)
Pre-tax pre-provision net income/ (loss) (non-GAAP)	$	(26,509	)	$	31,114		$	63,153		$	146,574

Efficiency ratio (GAAP):
Non-interest expense	$	134,241		$	67,142		$	343,288		$	275,054

Net interest income plus non-interest income	$	107,732		$	98,256		$	406,441		$	421,628

Efficiency ratio (GAAP)		124.61	%		68.33	%		84.46	%		65.24	%

Efficiency ratio (Non-GAAP):
Non-interest expense	$	134,241		$	67,142		$	343,288		$	275,054
Less non-GAAP adjustments:
Amortization of intangible assets		2,599			1,403			9,126			5,223
Merger, acquisition and disposal expense		4,164			—			4,164			—
Goodwill impairment loss		54,391			—			54,391			—
Severance expense		—			—			—			1,939
Pension settlement expense		—			—			—			8,157
Contingent payment expense		—			—			—			36
Non-interest expense - as adjusted	$	73,087		$	65,739		$	275,607		$	259,699

Net interest income plus non-interest income	$	107,732		$	98,256		$	406,441		$	421,628
Plus non-GAAP adjustment:
Tax-equivalent income		1,100			1,113			4,459			4,157
Less/ (plus) non-GAAP adjustment:
Investment securities gains/ (losses)		—			—			—			—
Net interest income plus non-interest income - as adjusted	$	108,832		$	99,369		$	410,900		$	425,785

Efficiency ratio (Non-GAAP)		67.16	%		66.16	%		67.07	%		60.99	%

Tangible common equity ratio:
Total stockholders' equity	$	1,558,011		$	1,588,142		$	1,558,011		$	1,588,142
Goodwill		(309,045	)		(363,436	)		(309,045	)		(363,436	)
Other intangible assets, net		(30,748	)		(28,301	)		(30,748	)		(28,301	)
Tangible common equity	$	1,218,218		$	1,196,405		$	1,218,218		$	1,196,405

Total assets	$	14,127,480		$	14,028,172		$	14,127,480		$	14,028,172
Goodwill		(309,045	)		(363,436	)		(309,045	)		(363,436	)
Other intangible assets, net		(30,748	)		(28,301	)		(30,748	)		(28,301	)
Tangible assets	$	13,787,687		$	13,636,435		$	13,787,687		$	13,636,435

Tangible common equity ratio		8.84	%		8.77	%		8.84	%		8.77	%

Outstanding common shares		45,140,417			44,913,561			45,140,417			44,913,561
Tangible book value per common share	$	26.99		$	26.64		$	26.99		$	26.64

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED

(Dollars in thousands)	December 31, 2024			December 31, 2023
Assets
Cash and due from banks	$	80,698		$	82,257
Federal funds sold		—			245
Interest-bearing deposits with banks		438,265			463,396
Cash and cash equivalents		518,963			545,898
Residential mortgage loans held for sale (at fair value)		22,757			10,836
SBA loans held for sale		715			—
Investments held-to-maturity (fair values of $177,854 and $200,411 at December 31, 2024 and December 31, 2023, respectively)		215,747			236,165
Investments available-for-sale (at fair value)		1,140,783			1,102,681
Other investments, at cost		61,714			75,607
Total loans		11,537,966			11,366,989
Less: allowance for credit losses - loans		(134,401	)		(120,865	)
Net loans		11,403,565			11,246,124
Premises and equipment, net		55,998			59,490
Other real estate owned		3,265			—
Accrued interest receivable		45,627			46,583
Goodwill		309,045			363,436
Other intangible assets, net		30,748			28,301
Other assets		318,553			313,051
Total assets	$	14,127,480		$	14,028,172

Liabilities
Noninterest-bearing deposits	$	2,804,930		$	2,914,161
Interest-bearing deposits		8,940,735			8,082,377
Total deposits		11,745,665			10,996,538
Securities sold under retail repurchase agreements		68,911			75,032
Federal Reserve Bank borrowings		—			300,000
Advances from FHLB		250,000			550,000
Subordinated debt		371,400			370,803
Total borrowings		690,311			1,295,835
Accrued interest payable and other liabilities		133,493			147,657
Total liabilities		12,569,469			12,440,030

Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 45,140,417 and 44,913,561 at December 31, 2024 and December 31, 2023, respectively.		45,140			44,914
Additional paid in capital		748,905			742,243
Retained earnings		856,613			898,316
Accumulated other comprehensive loss		(92,647	)		(97,331	)
Total stockholders' equity		1,558,011			1,588,142
Total liabilities and stockholders' equity	$	14,127,480		$	14,028,172

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Three Months Ended December 31,						Year Ended December 31,
(Dollars in thousands, except per share data)		2024			2023			2024		2023
Interest income:
Interest and fees on loans	$	153,262		$	148,655		$	609,571	$	579,960
Interest on mortgage loans held for sale		249			199			1,050		896
Interest on SBA loans held for sale		21			—			23		—
Interest on deposits with banks		7,997			8,456			25,398		22,435
Interest and dividend income on investment securities:
Taxable		7,821			6,454			29,140		26,992
Tax-advantaged		1,697			1,848			7,082		7,224
Interest on federal funds sold		—			4			8		17
Total interest income		171,047			165,616			672,272		637,524
Interest expense:
Interest on deposits		76,111			69,813			303,173		225,028
Interest on retail repurchase agreements and federal funds purchased		369			4,075			5,259		14,452
Interest on advances from FHLB		3,865			6,086			20,259		27,709
Interest on subordinated debt		4,616			3,946			16,455		15,785
Total interest expense		84,961			83,920			345,146		282,974
Net interest income		86,086			81,696			327,126		354,550
Provision/ (credit) for credit losses		4,468			(3,445	)		14,192		(17,561	)
Net interest income after provision/ (credit) for credit losses		81,618			85,141			312,934		372,111
Non-interest income:
Service charges on deposit accounts		2,998			2,749			11,763		10,447
Mortgage banking activities		1,091			792			5,615		5,536
Wealth management income		10,920			9,219			42,071		36,633
Income from bank owned life insurance		3,213			1,207			7,496		4,210
Bank card fees		457			454			1,750		1,769
Other income		2,967			2,139			10,620		8,483
Total non-interest income		21,646			16,560			79,315		67,078
Non-interest expense:
Salaries and employee benefits		44,309			35,482			159,858		160,192
Occupancy expense of premises		4,727			4,558			19,005		18,778
Equipment expenses		4,252			3,987			15,924		15,675
Marketing		2,013			1,242			5,363		5,103
Outside data services		3,228			3,000			12,642		11,186
FDIC insurance		2,761			2,615			11,396		9,461
Amortization of intangible assets		2,599			1,403			9,126		5,223
Merger, acquisition and disposal expense		4,164			—			4,164		—
Professional fees and services		4,805			5,628			21,208		17,982
Goodwill impairment loss		54,391			—			54,391		—
Other expenses		6,992			9,227			30,211		31,454
Total non-interest expense		134,241			67,142			343,288		275,054
Income/ (loss) before income tax expense		(30,977	)		34,559			48,961		164,135
Income tax expense		8,476			8,459			29,026		41,291
Net income/ (loss)	$	(39,453	)	$	26,100		$	19,935	$	122,844

Net income per share amounts:
Basic net income/ (loss) per common share	$	(0.87	)	$	0.58		$	0.44	$	2.74
Diluted net income/ (loss) per common share	$	(0.87	)	$	0.58		$	0.44	$	2.73
Dividends declared per share	$	0.34		$	0.34		$	1.36	$	1.36

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

		2024												2023
(Dollars in thousands, except per share data)	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Profitability for the quarter:
Tax-equivalent interest income	$	172,147		$	171,219		$	166,252		$	167,113		$	166,729		$	163,479		$	159,156		$	152,317
Interest expense		84,961			88,686			84,828			86,671			83,920			77,330			67,679			54,045
Tax-equivalent net interest income		87,186			82,533			81,424			80,442			82,809			86,149			91,477			98,272
Tax-equivalent adjustment		1,100			1,121			1,139			1,099			1,113			1,068			1,006			970
Provision/ (credit) for credit losses		4,468			6,316			1,020			2,388			(3,445	)		2,365			5,055			(21,536	)
Non-interest income		21,646			19,715			19,587			18,367			16,560			17,391			17,176			15,951
Non-interest expense		134,241			72,937			68,104			68,006			67,142			72,471			69,136			66,305
Income/ (loss) before income tax expense		(30,977	)		21,874			30,748			27,316			34,559			27,636			33,456			68,484
Income tax expense		8,476			5,665			7,941			6,944			8,459			6,890			8,711			17,231
Net income/ (loss)	$	(39,453	)	$	16,209		$	22,807		$	20,372		$	26,100		$	20,746		$	24,745		$	51,253
GAAP financial performance:
Return on average assets	(1.09)%				0.46	%		0.66	%		0.58	%		0.73	%		0.58	%		0.70	%		1.49	%
Return on average common equity	(9.70)%				4.01	%		5.81	%		5.17	%		6.70	%		5.35	%		6.46	%		13.93	%
Return on average tangible common equity		5.46	%		5.88	%		8.27	%		7.39	%		9.26	%		7.42	%		8.93	%		19.10	%
Net interest margin		2.53	%		2.44	%		2.46	%		2.41	%		2.45	%		2.55	%		2.73	%		2.99	%
Efficiency ratio - GAAP basis		124.61	%		72.12	%		68.19	%		69.60	%		68.33	%		70.72	%		64.22	%		58.55	%
Non-GAAP financial performance:
Pre-tax pre-provision net income/ (loss)	$	(26,509	)	$	28,190		$	31,768		$	29,704		$	31,114		$	30,001		$	38,511		$	46,948
Core after-tax earnings	$	21,039		$	17,936		$	24,400		$	21,916		$	27,147		$	27,766		$	27,136		$	52,253
Core return on average assets		0.58	%		0.50	%		0.70	%		0.63	%		0.76	%		0.78	%		0.77	%		1.52	%
Core return on average common equity		5.17	%		4.44	%		6.21	%		5.56	%		6.97	%		7.16	%		7.09	%		14.20	%
Core return on average tangible common equity		6.80	%		5.88	%		8.27	%		7.39	%		9.26	%		9.51	%		9.43	%		19.11	%
Core earnings per diluted common share	$	0.47		$	0.40		$	0.54		$	0.49		$	0.60		$	0.62		$	0.60		$	1.16
Efficiency ratio - Non-GAAP basis		67.16	%		69.06	%		65.31	%		66.73	%		66.16	%		60.91	%		60.68	%		56.87	%
Per share data:
Net income/ (loss) attributable to common shareholders	$	(39,457	)	$	16,205		$	22,800		$	20,346		$	26,066		$	20,719		$	24,712		$	51,084
Basic net income/ (loss) per common share	$	(0.87	)	$	0.36		$	0.51		$	0.45		$	0.58		$	0.46		$	0.55		$	1.14
Diluted net income/ (loss) per common share	$	(0.87	)	$	0.36		$	0.51		$	0.45		$	0.58		$	0.46		$	0.55		$	1.14
Weighted average diluted common shares		45,133,834			45,242,920			45,145,214			45,086,471			45,009,574			44,960,455			44,888,759			44,872,582
Dividends declared per share	$	0.34		$	0.34		$	0.34		$	0.34		$	0.34		$	0.34		$	0.34		$	0.34
Non-interest income:
Service charges on deposit accounts		2,998			3,009			2,939			2,817			2,749			2,704			2,606			2,388
Mortgage banking activities		1,091			1,529			1,621			1,374			792			1,682			1,817			1,245
Wealth management income		10,920			10,738			10,455			9,958			9,219			9,391			9,031			8,992
Income from bank owned life insurance		3,213			1,307			1,816			1,160			1,207			845			1,251			907
Bank card fees		457			435			445			413			454			450			447			418
Other income		2,967			2,697			2,311			2,645			2,139			2,319			2,024			2,001
Total non-interest income	$	21,646		$	19,715		$	19,587		$	18,367		$	16,560		$	17,391		$	17,176		$	15,951
Non-interest expense:
Salaries and employee benefits	$	44,309		$	41,030		$	37,821		$	36,698		$	35,482		$	44,853		$	40,931		$	38,926
Occupancy expense of premises		4,727			4,657			4,805			4,816			4,558			4,609			4,764			4,847
Equipment expenses		4,252			3,841			3,868			3,963			3,987			3,811			3,760			4,117
Marketing		2,013			1,320			1,288			742			1,242			729			1,589			1,543
Outside data services		3,228			3,025			3,286			3,103			3,000			2,819			2,853			2,514
FDIC insurance		2,761			2,773			2,951			2,911			2,615			2,333			2,375			2,138
Amortization of intangible assets		2,599			2,323			2,135			2,069			1,403			1,245			1,269			1,306
Merger, acquisition and disposal expense		4,164			—			—			—			—			—			—			—
Professional fees and services		4,805			6,577			4,946			4,880			5,628			4,509			4,161			3,684
Goodwill impairment loss		54,391			—			—			—			—			—			—			—
Other expenses		6,992			7,391			7,004			8,824			9,227			7,563			7,434			7,230
Total non-interest expense	<

Sandy Spring Bancorp Announces Fourth Quarter Results