OLNEY, Md., July 22, 2021 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income of $57.3 million ($1.19 per diluted common share) for the quarter ended June 30, 2021. The current quarter's result compares to net loss of $14.3 million ($0.31 per diluted common share) for the second quarter of 2020 and net income of $75.5 million ($1.58 per diluted common share) for the first quarter of 2021. The results from the second quarter of the prior year reflected the combined impact of merger and acquisition expense associated with the acquisition of Revere Bank ("Revere") in that quarter, the impact of the Covid-19 pandemic on the economic forecast used in the determination of the allowance for credit losses, and the provision for credit losses associated with the Revere acquisition.

For the current quarter, core earnings, which exclude the impact of the provision for credit losses and provision on unfunded loan commitments, merger and acquisition expense, loss on FHLB redemptions, amortization of intangibles and investment securities gains, each on an after-tax basis, were $55.1 million ($1.16 per diluted common share), compared to $51.9 million ($1.10 per diluted common share) for the quarter ended June 30, 2020 and $56.9 million ($1.20 per diluted common share) for the quarter ended March 31, 2021.

The current quarter's provision for credit losses was a credit of $4.2 million as compared to a credit of $34.7 million for the first quarter of 2021. The current and prior quarter's credits for the provision for credit losses were principally the result of the decline in the forecasted unemployment rate and, to a lesser degree, improvements in other forecasted macroeconomic indicators.

"Our acquisitions of Revere Bank and Rembert Pendleton Jackson continue to contribute to our strong financial performance," said Daniel J. Schrider, President and CEO. "This quarter marks one year since Revere Bank became part of Sandy Spring Bank. Our increased size and scale, and our unwavering commitment to personalized service, continue to deliver results for our company and our clients. Our wealth group, which includes Rembert Pendleton Jackson, West Financial Services and Sandy Spring Trust, has also achieved significant year over year growth."

Second Quarter Highlights:

Core operating earnings increased 6% to $55.1 million for the second quarter of 2021, compared to $51.9 million for the prior year quarter.
Total assets at June 30, 2021, declined 3% to $12.9 billion compared to $13.3 billion at June 30, 2020. The decline in total assets, year-over-year was primarily the result of the $179.2 million net reduction in loans originated under the Paycheck Protection Program ("PPP" or "PPP Program") and the $251.5 million decline in the residential mortgage loan portfolio. While the total loan portfolio, excluding PPP loans, decreased 1% due to the combined run-off of residential mortgage and consumer loans, year-over-year organic commercial real estate loan growth was 6%.
Excluding PPP loans, total loan growth during the current quarter compared to the first quarter of 2021 was 1%, with organic commercial loan growth during the quarter of 2%. Deposits increased 2% during the linked quarter, driven by 6% growth in noninterest-bearing deposits.
The net interest margin was 3.63% for the second quarter of 2021, compared to 3.47% for the same quarter of 2020, and 3.56% for the first quarter of 2021. Excluding the impact of the amortization of the fair value marks derived from acquisitions, the current quarter's net interest margin would have been 3.60%, compared to 3.19% for second quarter of 2020, and 3.46% for the first quarter of 2021.
The provision for credit losses was a credit of $4.2 million for the current quarter compared to the prior quarter's credit to the provision of $34.7 million. The credits to the provision continue to be the result of improvements in forecasted economic metrics. The overall credit to the provision for the quarter was partially mitigated by increases in non-PPP loan balances, individual reserves assessed on a few non-accrual loans in the hospitality industry and adjustments to qualitative factors.
Non-interest income for the current quarter increased by 15% or $3.3 million compared to the prior year quarter, as wealth management income grew 20% and service charges on deposit accounts increased 62%. Bank card fees grew 42% compared to the prior year quarter as a result of transaction volume. Other non-interest income also grew significantly compared to the prior year as a result of the combination of the full payoff of a purchased credit deteriorated loan and activity-based contractual vendor incentives.
Non-interest expense decreased $22.5 million or 26% for the second quarter of 2021, compared to the prior year quarter. The prior year's quarter included $22.5 million in merger and acquisition expense, in addition to $5.9 million in prepayment penalties from the liquidation of acquired FHLB borrowings. These reductions from the prior year more than offset the increase in salary and benefit expense in the current year quarter as a result of staffing increases associated with strategic business initiatives.
Return on average assets ("ROA") for the quarter ended June 30, 2021 was 1.79% and return on average tangible common equity ("ROTCE") was 20.44% compared, to 2.39% and 28.47%, respectively, for the first quarter of 2021. On a non-GAAP basis, the current quarter's core ROA was 1.73% and core ROTCE was 19.68% compared to core ROA of 1.80% and core ROTCE of 21.48% for the prior quarter of 2021. The non-GAAP efficiency ratio for the second quarter of 2021 was 45.36% compared to 42.65% for the first quarter of 2021. The change in the efficiency ratio reflects the impact of the decrease in mortgage banking income and the increase in costs related to various strategic initiatives during the current quarter.

Balance Sheet and Credit Quality

Total assets declined 3% to $12.9 billion at June 30, 2021, as compared to $13.3 billion at June 30, 2020. During this period, total loans declined by 2% to $10.1 billion at June 30, 2021, compared to $10.3 billion at June 30, 2020. Excluding PPP loans, total loans declined 1% to $9.2 billion at June 30, 2021 as compared to the prior year quarter. The year-over-year decline in the total loan portfolio was primarily the result of the $179.2 million net reduction of loans originated under the PPP Program and the $251.5 million decline in the residential mortgage loan portfolio, which was partially offset by year-over-year non-PPP commercial loan growth of $276.9 million or 4%. The year-over-year decline in the mortgage loan portfolio resulted from mortgage loan refinance activity driven by the low interest rate environment and the strategic decision to sell the majority of new mortgage loan production.

Compared to March 31, 2021, total loans, excluding PPP, increased 1% or $69.1 million at June 30, 2021. During this same period, commercial real estate loans increased $178.9 million or 3% and non-PPP commercial business loans declined $13.3 million or 1%.

Deposit growth was 8% during the past twelve months, as noninterest-bearing deposits experienced growth of 16% and interest-bearing deposits grew 3%. This growth was driven primarily by the impact of the PPP program and, to a lesser extent, growth in core deposit relationships.

At June 30, 2021 the remaining outstanding principal balance of PPP loans was $897.2 million. As of July 9, 2021, 4,126 PPP loans totaling $651.2 million have been forgiven and an additional $49.1 million have been repaid by borrowers. At the end of the current quarter, loans with an aggregate balance of $124.2 million remain in deferral status, of which non-accrual loans comprised $56.0 million. Currently, the 93% of loans that had been granted modifications/deferrals due to pandemic-related financial stress have returned to their original payment plans.

Tangible common equity increased to $1.2 billion or 9.28% of tangible assets at June 30, 2021, compared to $983.4 million or 7.63% at June 30, 2020 as a result of accumulated earnings over the preceding twelve months. Excluding the impact of the PPP program from tangible assets at June 30, 2021, the tangible common equity ratio would be 9.98%. At June 30, 2021, the Company had a total risk-based capital ratio of 15.82%, a common equity tier 1 risk-based capital ratio of 12.47%, a tier 1 risk-based capital ratio of 12.47%, and a tier 1 leverage ratio of 9.49%.

The level of non-performing loans to total loans was 0.93% at June 30, 2021, compared to 0.77% at June 30, 2020, and 0.94% at March 31, 2021. At June 30, 2021, non-performing loans totaled $94.3 million, compared to $79.9 million at June 30, 2020, and $98.7 million at March 31, 2021. Non-performing loans include non-accrual loans, accruing loans 90 days or more past due and restructured loans. Loans placed on non-accrual during the current quarter amounted to $1.5 million compared to $27.3 million for the prior year quarter and $0.4 million for the first quarter of 2021. Loans in non-accrual status at quarter end included a few large borrowings within the hospitality sector with an aggregate balance of $40.9 million. These large loans, which are collateral dependent, had individual reserves amounting to $5.7 million at June 30, 2021.

The Company recorded net charge-offs of $2.2 million for the second quarter of 2021, as compared to net recoveries of $0.4 million for the second quarter of 2020 and net charge-offs of $0.3 million for the first quarter of 2021. The increase in charge-offs in the current quarter compared to the prior quarter and the prior year quarter was primarily the result of the charge-off of an acquired pre-pandemic problem credit.

At June 30, 2021, the allowance for credit losses was $124.0 million or 1.23% of outstanding loans and 131% of non-performing loans, compared to $130.4 million or 1.25% of outstanding loans and 132% of non-performing loans at March 31, 2021. Excluding PPP loans, the allowance for credit losses to outstanding loans was 1.34% and 1.43%, at June 30, 2021 and March 31, 2021, respectively.

Income Statement Review

Quarterly Results

The Company recorded net income of $57.3 million for the three months ended June 30, 2021, compared to a net loss of $14.3 million for the prior year quarter. The current quarter's results include a credit to the provision for credit losses, the continued positive impact of reduced funding cost, and a 15% increase in non-interest income. The second quarter of the prior year's results reflected the combined impact of merger and acquisition expense associated with the Revere acquisition, the impact of the Covid-19 pandemic on the economic forecast used in the determination of the allowance for credit losses, and the additional provision for credit losses associated with the Revere acquisition. Pre-tax, pre-provision, pre-merger income was $71.3 million for the three months ended June 30, 2021 compared to $61.5 million for the prior year quarter.

Net interest income increased $6.5 million or 6% for the second quarter of 2021 compared to the second quarter of 2020, as a result of the significant reduction in interest expense during the preceding twelve months. During this period, as general market interest rates declined significantly, interest income remained stable while interest expense on deposits, notably money market and time deposits, declined, resulting in a $6.6 million decrease in interest expense. Interest expense on interest-bearing deposits declined $8.4 million, which was partially offset by the $1.8 million increase in interest expense on borrowings. The increase in borrowing costs occurred due to the prior year's inclusion of $5.8 million for accelerated amortization of the purchase premium on FHLB advances due to the prepayment of those borrowings. Excluding the accelerated amortization, borrowing cost would have been lower by $4.0 million in the second quarter of 2021. The PPP program contributed $13.2 million to net interest income for the quarter, of which $10.4 million represented origination fees. The net interest margin for the second quarter of 2021 was 3.63% as compared to 3.47% for the same quarter of the prior year as a result of the decreased funding cost during the period. Excluding the net $0.8 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current quarter would have been 3.60% compared to the adjusted net interest margin of 3.19% for the second quarter of 2020.

The provision for credit losses was a credit of $4.2 million for the second quarter of 2021 compared to a charge of $58.7 million for the second quarter of 2020. The provision for credit losses for the first quarter of 2021 was a credit of $34.7 million. The credits to the provision during 2021 continue to be the result of the improvement in forecasted economic metrics, predominantly the projected unemployment and business bankruptcies rates. The overall credit to the provision for the second quarter of 2021 was partially mitigated by increases in non-PPP loan balances, individual reserves assessed on a few non-accrual loans in the hospitality industry and adjustments to various qualitative factors.

Non-interest income increased $3.3 million or 15% during the current quarter compared to the same quarter of the prior year, as wealth management income grew 20% and service charges on deposit accounts increased 62%. The growth in wealth management income reflects the continued positive impact of the Rembert Pendleton Jackson ("RPJ") acquisition in 2020 in addition to the performance in the financial markets and the expansion of the wealth management client base. The growth in service charge income reflects the impact of the prior year's temporary suspension of certain service fees as well as lower transaction volume, both a resulting reaction to the Covid-19 pandemic. Bank card fees grew 42% compared to the prior year quarter as a result of transaction volume. Other non-interest income also grew significantly compared to the prior year as a result of the combination of the full payoff of a purchased credit deteriorated loan and activity-based contractual vendor incentives.

Non-interest expense decreased $22.5 million or 26% for the second quarter of 2021, compared to the prior year quarter. The prior year's non-interest expense included $22.5 million in merger and acquisition expense, as well as $5.9 million in prepayment penalties from the liquidation of acquired FHLB borrowings. Salary and benefit expense increased $4.7 million as a result of staffing increases associated with strategic business initiatives and the $1.3 million increase in professional fees and services, primarily consulting fees. Occupancy and equipment expense decreased 8% compared to the prior year due to decreased depreciation and rental expense due to the post-acquisition reduction of banking locations. The cost savings from the post-acquisition location rationalization was offset by increases in advertising costs, outside data services and FDIC insurance.

The non-GAAP efficiency ratio was 45.36% for the current quarter as compared to 43.85% for the second quarter of 2020, and 42.65% for the first quarter of 2021. The modest increase in the efficiency ratio (reflecting a decrease in efficiency) from the second quarter of the prior year to the current year quarter was the result of the 11% growth in non-GAAP expense outpacing the 8% growth in non-GAAP revenue. ROA for the quarter ended June 30, 2021 was 1.79% and ROTCE was 20.44% compared, respectively, to 2.39% and 28.47% for the first quarter of 2021. On a non-GAAP basis, the current quarter's core ROA was 1.73% and core ROTCE was 19.68% compared to core ROA of 1.80% and core ROTCE of 21.48% for the prior quarter of 2021.

Year to Date Results

The Company recorded net income of $132.7 million for the six months ended June 30, 2021 compared to net loss of $4.4 million for the same period in the prior year. Pre-tax, pre-provision, pre-merger income was $136.7 million for the six months ended June 30, 2021 compared to $97.7 million for the prior year. The second quarter of the current year benefited from post-acquisition increased net interest income, a $38.9 million credit to the provision for credit losses, and a 34% increase in non-interest income driven primarily by mortgage banking and wealth management income. The prior year's results reflected the combined impact of merger and acquisition expense associated with the Revere acquisition, the impact of the Covid-19 pandemic on economic forecast used in the determination of the allowance for credit losses and the additional provision for credit losses associated with the acquisition of Revere during that period.

Net interest income for the six months ended June 30, 2021 increased 28% or $46.8 million compared to the prior year. This increase was driven primarily by the acquisition of Revere in the second quarter of 2020 as interest income grew $30.3 million and, to a lesser extent, reduced funding costs as interest expense declined $16.5 million. Contributing to the growth in net interest income, the PPP program generated $18.6 million, net of its associated funding costs, year-over-year. The net interest margin improved to 3.60% for the six months ended June 30, 2021, compared to 3.39% for the prior year. Excluding the net $3.8 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current year would have been 3.53%. The net interest margin for 2020, excluding the amortization of fair value marks, would have been 3.23%.

The provision for credit losses for the six months ended June 30, 2021 amounted to a credit of $38.9 million as compared to a charge of $83.2 million for the same period in 2020. For the six months ended June 30, 2021, the credit for the provision for credit losses, compared to the prior year's charge to the provision, reflects the impact of the improvement in the most recent forecasted economic metrics, most notably the rate of unemployment and anticipated business bankruptcies. Other economic metrics and factors also contributed to growth in the current period's credit to the provision, which were partially offset by qualitative factors applied in the determination of the allowance. The charge to the provision for credit losses for the same period in 2020 predominantly reflected the combined results of the impact of the deteriorated economic forecasts during the first six months of 2020 and the initial allowance on acquired Revere non-purchased credit deteriorated loans.

Non-interest income increased 34% to $55.1 million for the six months ended June 30, 2021, compared to $41.1 million for 2020. During the current year, income from mortgage banking activities increased $4.5 million as a result of the high levels of new mortgage and refinancing activity resulting from historically low mortgage lending rates. Additionally, wealth management income increased $3.3 million year over year as a result of the first quarter 2020 acquisition of RPJ, in addition to the $818 million growth in assets under management during the past twelve months. Service charge income also increased 10% as customer activity increased. As a result of increased transaction volume, bank card fees grew 28% compared to the prior year period. Other non-interest income also grew significantly compared to the prior year as a result of the combination of the full payoff of a purchased credit deteriorated loan and activity-based contractual vendor incentives.

Non-interest expense decreased 2% to $131.1 million for the six months ended June 30, 2021, compared to $133.2 million for 2020. The current year included $9.1 million in prepayment penalties on FHLB borrowings compared to $5.9 million in prepayment penalties in the prior year. The prior year also included $23.9 million in merger and acquisition expense. Excluding the impact of these items results in a year-over-year growth rate in non-interest expense of 18%. This growth rate was driven by operational and compensation costs associated with the 2020 acquisitions and staffing increases associated with certain strategic initiatives, increased incentive expense associated with mortgage lending and other volume based activities, increased intangible asset amortization, higher FDIC insurance premiums and a rise in professional fees and services.

The effective tax rate for the six months ended June 30, 2021 was 24.39%, compared to a tax benefit rate of 53.71% for the same period in 2020. The current year's effective tax rate reflects a more normalized rate while the prior year's rate reflected the favorable result of the changes to tax laws in 2020 that expanded the time permitted to utilize previous net operating losses. The Company applied this change to the 2018 acquisition of WashingtonFirst Bankshares, Inc. to realize a tax benefit of $1.8 million for 2020, resulting in a greater proportional benefit from the operating loss in the first six months of 2020.

The non-GAAP efficiency ratio for the first half of the current year was 44.01% compared to 48.21% for the same period in the prior year. The improvement in the current year's efficiency ratio compared to the prior year was the result of the 29% growth in non-GAAP revenue, which outpaced the 18% growth in non-GAAP non-interest expense.

Explanation of Non-GAAP Financial Measures

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

Tangible common equity and related measures are non-GAAP measures that exclude the impact of goodwill and other intangible assets.
The non-GAAP efficiency ratio excludes amortization of intangible assets, loss on FHLB redemption, merger and acquisition expense and investment securities gains and includes tax-equivalent income.
Core earnings and the related measures of core earnings per share, core return on average assets and core return on average tangible common equity reflect net income exclusive of the provision/(credit) for credit losses, provision/(credit) for credit losses on unfunded loan commitments, merger and acquisition expense, amortization of intangible assets, loss on FHLB redemption, and investment securities gains, on a net of tax basis.

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

Conference Call

The Company's management will host a conference call to discuss its second 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 August 5, 2021. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10157804.

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 60 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Northern Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services.

For additional information or questions, please contact:

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

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

Sandy Spring Bancorp

17801 Georgia Avenue

Olney, Maryland 20832

1-800-399-5919

Email: DSchrider@sandyspringbank.com

PMantua@sandyspringbank.com

Website: www.sandyspringbank.com

Media Contact:

Jen Schell

301-570-8331

jschell@sandyspringbank.com

Forward-Looking Statements

Sandy Spring Bancorp's forward-looking statements are subject to the following principal risks and uncertainties: risks, uncertainties and other factors relating to the COVID-19 pandemic, including the effect of the pandemic on our borrowers and their ability to make payments on their obligations, the effectiveness of vaccination programs, and the effect of remedial actions and stimulus measures adopted by federal, state and local governments; general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company's loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company's ability to retain key members of management; changes in legislation, regulations, and policies; the possibility that any of the anticipated benefits of acquisitions will not be realized or will not be realized within the expected time period; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2020, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp's forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC's Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS - UNAUDITED

	Three Months Ended June 30,								%		Six Months Ended June 30,						%
(Dollars in thousands, except per share data)	2021			2020					Change		2021			2020			Change
Results of operations:
Net interest income	$	108,046		$	101,514				6	%	$	212,646		$	165,848		28	%
Provision/ (credit) for credit losses	(4,204		)	58,686					n/m		(38,912		)	83,155			n/m
Non-interest income	26,259			22,924					15		55,125			41,092			34
Non-interest expense	62,975			85,438					(26	)	131,148			133,184			(2	)
Income/ (loss) before income tax expense/ (benefit)	75,534			(19,686				)	n/m		175,535			(9,399		)	n/m
Net income/ (loss)	57,263			(14,338				)	n/m		132,727			(4,351		)	n/m

Net income/ (loss) attributable to common shareholders	$	56,782		$	(14,458			)	n/m		$	131,606		$	(4,539	)	n/m
Pre-tax pre-provision pre-merger income⁽¹⁾	$	71,330		$	61,454				16		$	136,668		$	97,664		40

Return on average assets	1.79		%			(0.45	)%					2.09	%	(0.08		)%
Return on average common equity	15.07		%			(4.15	)%					17.84	%	(0.69		)%
Return on average tangible common equity	20.44		%			(5.80	)%					24.35	%	(1.00		)%
Net interest margin	3.63		%			3.47	%					3.60	%	3.39		%
Efficiency ratio - GAAP basis⁽²⁾	46.89		%			68.66	%					48.98	%	64.36		%
Efficiency ratio - Non-GAAP basis⁽²⁾	45.36		%			43.85	%					44.01	%	48.21		%

Per share data:
Basic net income/ (loss) per common share	$	1.20		$	(0.31			)	n/m		$	2.79		$	(0.11	)	n/m
Diluted net income/ (loss) per common share	$	1.19		$	(0.31			)	n/m		$	2.77		$	(0.11	)	n/m
Weighted average diluted common shares	47,523,198			46,988,351					1	%	47,469,470			40,826,748			16	%
Dividends declared per share	$	0.32		$	0.30				7		$	0.64		$	0.60		7
Book value per common share	$	33.02		$	29.58				12		$	33.02		$	29.58		12
Tangible book value per common share⁽¹⁾	$	24.58		$	20.92				17		$	24.58		$	20.92		17
Outstanding common shares	47,312,982			47,001,022					1		47,312,982			47,001,022			1

Financial condition at period-end:
Investment securities	$	1,482,123		$	1,424,652				4	%	$	1,482,123		$	1,424,652		4	%
Loans	10,092,515			10,343,043					(2	)	10,092,515			10,343,043			(2	)
Interest-earning assets	12,167,067			12,447,146					(2	)	12,167,067			12,447,146			(2	)
Assets	12,925,577			13,290,447					(3	)	12,925,577			13,290,447			(3	)
Deposits	10,866,466			10,076,834					8		10,866,466			10,076,834			8
Interest-bearing liabilities	7,233,536			8,313,546					(13	)	7,233,536			8,313,546			(13	)
Stockholders' equity	1,562,280			1,390,093					12		1,562,280			1,390,093			12

Capital ratios:
Tier 1 leverage⁽³⁾	9.49		%			8.35	%					9.49	%	8.35		%
Common equity tier 1 capital to risk-weighted assets⁽³⁾	12.47		%			10.23	%					12.47	%	10.23		%
Tier 1 capital to risk-weighted assets⁽³⁾	12.47		%			10.23	%					12.47	%	10.23		%
Total regulatory capital to risk-weighted assets⁽³⁾	15.82		%			13.79	%					15.82	%	13.79		%
Tangible common equity to tangible assets⁽⁴⁾	9.28		%			7.63	%					9.28	%	7.63		%
Average equity to average assets	11.91		%			10.78	%					11.73	%	11.67		%

Credit quality ratios:
Allowance for credit losses to loans	1.23		%			1.58	%					1.23	%	1.58		%
Non-performing loans to total loans	0.93		%			0.77	%					0.93	%	0.77		%
Non-performing assets to total assets	0.74		%			0.61	%					0.74	%	0.61		%
Allowance for credit losses to non-performing loans	131.44		%			204.56	%					131.44	%	204.56		%
Annualized net charge-offs to average loans⁽⁵⁾	0.09		%			(0.01	)%					0.05	%	—		%

n/m - not meaningful

(1) Represents a non-GAAP measure.

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

(3) Estimated ratio at June 30, 2021.

(4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets. See the Reconciliation Table included with these Financial Highlights.

(5) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2021			2020			2021			2020
Pre-tax pre-provision pre-merger income:
Net income/ (loss)	$	57,263		$	(14,338	)	$	132,727		$	(4,351	)
Plus/ (less) non-GAAP adjustments:
Merger and acquisition expense	—			22,454			45			23,908
Income tax expense/ (benefit)	18,271			(5,348		)	42,808			(5,048		)
Provision/ (credit) for credit losses	(4,204		)	58,686			(38,912		)	83,155
Pre-tax pre-provision pre-merger income	$	71,330		$	61,454		$	136,668		$	97,664

Efficiency ratio (GAAP):
Non-interest expense	$	62,975		$	85,438		$	131,148		$	133,184

Net interest income plus non-interest income	$	134,305		$	124,438		$	267,771		$	206,940

Efficiency ratio (GAAP)	46.89		%	68.66		%	48.98		%	64.36		%

Efficiency ratio (Non-GAAP):
Non-interest expense	$	62,975		$	85,438		$	131,148		$	133,184
Less non-GAAP adjustments:
Amortization of intangible assets	1,659			1,998			3,356			2,598
Loss on FHLB redemption	—			5,928			9,117			5,928
Merger and acquisition expense	—			22,454			45			23,908
Non-interest expense - as adjusted	$	61,316		$	55,058		$	118,630		$	100,750

Net interest income plus non-interest income	$	134,305		$	124,438		$	267,771		$	206,940
Plus non-GAAP adjustment:
Tax-equivalent income	930			1,325			1,910			2,433
Less non-GAAP adjustment:
Investment securities gains	71			212			129			381
Net interest income plus non-interest income - as adjusted	$	135,164		$	125,551		$	269,552		$	208,992

Efficiency ratio (Non-GAAP)	45.36		%	43.85		%	44.01		%	48.21		%

Tangible common equity ratio:
Total stockholders' equity	$	1,562,280		$	1,390,093		$	1,562,280		$	1,390,093
Goodwill	(370,223		)	(370,547		)	(370,223		)	(370,547		)
Other intangible assets, net	(29,165		)	(36,143		)	(29,165		)	(36,143		)
Tangible common equity	$	1,162,892		$	983,403		$	1,162,892		$	983,403

Total assets	$	12,925,577		$	13,290,447		$	12,925,577		$	13,290,447
Goodwill	(370,223		)	(370,547		)	(370,223		)	(370,547		)
Other intangible assets, net	(29,165		)	(36,143		)	(29,165		)	(36,143		)
Tangible assets	$	12,526,189		$	12,883,757		$	12,526,189		$	12,883,757

Tangible common equity ratio	9.28		%	7.63		%	9.28		%	7.63		%

Outstanding common shares	47,312,982			47,001,022			47,312,982			47,001,022
Tangible book value per common share	$	24.58		$	20.92		$	24.58		$	20.92

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED (CONTINUED)

OPERATING EARNINGS - METRICS

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2021			2020			2021			2020
Core earnings (non-GAAP):
Net income/ (loss)	$	57,263		$	(14,338	)	$	132,727		$	(4,351	)
Plus/ (less) non-GAAP adjustments (net of tax):
Provision/ (credit) for credit losses	(3,132		)	43,750			(28,989		)	61,992
Provision/ (credit) for credit losses on unfunded loan commitments	(181		)	—			(886		)	—
Merger and acquisition expense	—			16,739			34			17,823
Amortization of intangible assets	1,236			1,490			2,500			1,937
Loss on FHLB redemption	—			4,419			6,792			4,419
Investment securities gains	(53		)	(158		)	(96		)	(284		)
Core earnings (Non-GAAP)	$	55,133		$	51,902		$	112,082		$	81,536

Core earnings per common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)	47,523,198			46,988,351			47,469,470			40,826,748

Earnings per diluted common share (GAAP)	$	1.19		$	(0.31	)	$	2.77		$	(0.11	)
Core earnings per diluted common share (non-GAAP)	$	1.16		$	1.10		$	2.36		$	2.00

Core return on average assets (non-GAAP):
Average assets (GAAP)	$	12,798,355		$	12,903,156		$	12,797,068		$	10,799,840

Return on average assets (GAAP)	1.79		%	(0.45		)%	2.09		%	(0.08		)%
Core return on average assets (non-GAAP)	1.73		%	1.62		%	1.77		%	1.52		%

Core return on average tangible common equity (non-GAAP):
Average total stockholders' equity (GAAP)	$	1,523,875		$	1,390,544		$	1,500,642		$	1,260,298
Average goodwill	(370,223		)	(355,054		)	(370,223		)	(360,549		)
Average other intangible assets, net	(30,224		)	(32,337		)	(31,056		)	(22,074		)
Average tangible common equity (non-GAAP)	$	1,123,428		$	1,003,153		$	1,099,363		$	877,675

Return on average tangible common equity (GAAP)	20.44		%	(5.80		)%	24.35		%	(1.00		)%
Core return on average tangible common equity (non-GAAP)	19.68		%	20.81		%	20.56		%	18.68		%

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED

(Dollars in thousands)	June 30, 2021			December 31, 2020			June 30, 2020
Assets
Cash and due from banks	$	109,147		$	93,651		$	224,037
Federal funds sold	358			291			401
Interest-bearing deposits with banks	520,989			203,061			610,285
Cash and cash equivalents	630,494			297,003			834,723
Residential mortgage loans held for sale (at fair value)	71,082			78,294			68,765
Investments available-for-sale (at fair value)	1,441,026			1,348,021			1,355,799
Other equity securities	41,097			65,760			68,853
Total loans	10,092,515			10,400,509			10,343,043
Less: allowance for credit losses	(123,961		)	(165,367		)	(163,481		)
Net loans	9,968,554			10,235,142			10,179,562
Premises and equipment, net	55,592			57,720			59,391
Other real estate owned	1,234			1,455			1,389
Accrued interest receivable	40,630			46,431			48,109
Goodwill	370,223			370,223			370,547
Other intangible assets, net	29,165			32,521			36,143
Other assets	276,480			265,859			267,166
Total assets	$	12,925,577		$	12,798,429		$	13,290,447

Liabilities
Noninterest-bearing deposits	$	4,000,636		$	3,325,547		$	3,434,038
Interest-bearing deposits	6,865,830			6,707,522			6,642,796
Total deposits	10,866,466			10,033,069			10,076,834
Securities sold under retail repurchase agreements and federal funds purchased	140,708			543,157			988,605
Advances from FHLB	—			379,075			451,844
Subordinated debt	226,998			227,088			230,301
Total borrowings	367,706			1,149,320			1,670,750
Accrued interest payable and other liabilities	129,125			146,085			152,770
Total liabilities	11,363,297			11,328,474			11,900,354

Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 47,312,982, 47,056,777 and 47,001,022 at June 30, 2021, December 31, 2020 and June 30, 2020, respectively	47,313			47,057			47,001
Additional paid in capital	850,555			846,922			843,876
Retained earnings	659,578			557,271			484,392
Accumulated other comprehensive income	4,834			18,705			14,824
Total stockholders' equity	1,562,280			1,469,955			1,390,093
Total liabilities and stockholders' equity	$	12,925,577		$	12,798,429		$	13,290,447

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME/ (LOSS) - UNAUDITED

	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except per share data)	2021			2020			2021			2020
Interest income:
Interest and fees on loans	$	107,751		$	106,279		$	215,179		$	182,161
Interest on loans held for sale	549			405			1,086			696
Interest on deposits with banks	47			155			93			335
Interest and dividends on investment securities:
Taxable	4,373			6,650			8,272			12,782
Tax-advantaged	2,103			1,438			4,454			2,810
Interest on federal funds sold	—			—			—			1
Total interest income	114,823			114,927			229,084			198,785
Interest Expense:
Interest on deposits	3,851			12,284			8,681			25,802
Interest on retail repurchase agreements and federal funds purchased	43			600			96			1,180
Interest on advances from FHLB	373			(2,123		)	2,649			1,022
Interest on subordinated debt	2,510			2,652			5,012			4,933
Total interest expense	6,777			13,413			16,438			32,937
Net interest income	108,046			101,514			212,646			165,848
Provision/ (credit) for credit losses	(4,204		)	58,686			(38,912		)	83,155
Net interest income after provision/ (credit) for credit losses	112,250			42,828			251,558			82,693
Non-interest income:
Investment securities gains	71			212			129			381
Service charges on deposit accounts	1,976			1,223			3,828			3,476
Mortgage banking activities	5,776			8,426			15,945			11,459
Wealth management income	9,121			7,604			17,851			14,570
Insurance agency commissions	1,247			1,188			3,400			3,317
Income from bank owned life insurance	705			809			1,385			1,454
Bank card fees	1,785			1,257			3,303			2,577
Other income	5,578			2,205			9,284			3,858
Total non-interest income	26,259			22,924			55,125			41,092
Non-interest expense:
Salaries and employee benefits	38,990			34,297			75,642			62,350
Occupancy expense of premises	5,497			5,991			10,984			10,572
Equipment expenses	3,020			3,219			6,242			5,970
Marketing	1,052			729			2,264			1,918
Outside data services	2,260			2,169			4,543			3,751
FDIC insurance	1,450			1,378			2,942			1,860
Amortization of intangible assets	1,659			1,998			3,356			2,598
Merger and acquisition expense	—			22,454			45			23,908
Professional fees and services	3,165			1,840			4,896			3,666
Other expenses	5,882			11,363			20,234			16,591
Total non-interest expense	62,975			85,438			131,148			133,184
Income/ (loss) before income tax expense/ (benefit)	75,534			(19,686		)	175,535			(9,399		)
Income tax expense/ (benefit)	18,271			(5,348		)	42,808			(5,048		)
Net income/ (loss)	$	57,263		$	(14,338	)	$	132,727		$	(4,351	)

Net income per share amounts:
Basic net income/ (loss) per common share	$	1.20		$	(0.31	)	$	2.79		$	(0.11	)
Diluted net income/ (loss) per common share	$	1.19		$	(0.31	)	$	2.77		$	(0.11	)
Dividends declared per share	$	0.32		$	0.30		$	0.64		$	0.60

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

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

(1) The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, loss on FHLB redemption, and merger and acquisition expense from non-interest expense; investment securities gains from non-interest income; and adds the tax- equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

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

(1) Estimated ratio at June 30, 2021.

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

	2021				2020
(Dollars in thousands)	June 30,		March 31,		December 31,		September 30,		June 30,		March 31,
Non-performing assets:
Loans 90 days past due:
Commercial real estate:
Commercial investor real estate	$	—	$	—	$	133	$	—	$	775	$	—
Commercial owner-occupied real estate	—		—		—		—		515		—
Commercial AD&C	—		—		—		—		—		—
Commercial business	—		31		161		93		—		—
Residential real estate:
Residential mortgage	680		398		480		320		138		8
Residential construction	—		—		—		—		—		—
Consumer	—		—		—		1		—		—
Total loans 90 days past due	680		429		774		414		1,428		8
Non-accrual loans:
Commercial real estate:
Commercial investor real estate	42,072		42,776		45,227		26,784		26,482		17,770
Commercial owner-occupied real estate	8,183		8,316		11,561		6,511		6,729		4,074
Commercial AD&C	14,489		14,975		15,044		1,678		2,957		829
Commercial business	9,435		13,147		22,933		17,659		20,246		10,834
Residential real estate:
Residential mortgage	9,440		9,593		10,212		11,296		11,724		12,271
Residential construction	62		—		—		—		—		—
Consumer	7,718		7,193		7,384		7,493		7,800		5,596
Total non-accrual loans	91,399		96,000		112,361		71,421		75,938		51,374
Total restructured loans - accruing	2,228		2,271		2,317		2,854		2,553		2,575
Total non-performing loans	94,307		98,700		115,452		74,689		79,919		53,957
Other assets and other real estate owned (OREO)	1,234		1,354		1,455		1,389		1,389		1,416
Total non-performing assets	$	95,541	$	100,054	$	116,907	$	76,078	$	81,308	$	55,373

	For the Quarter Ended,
(Dollars in thousands)	June 30, 2021			March 31, 2021			December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020
Analysis of non-accrual loan activity:
Balance at beginning of period	$	96,000		$	112,361		$	71,421		$	75,938		$	51,374		$	38,632
Purchased credit deteriorated loans designated as non-accrual	—			—			—			—			—			13,084
Non-accrual balances transferred to OREO	(257		)	—			(70		)	—			—			—
Non-accrual balances charged-off	(2,166		)	(699		)	(513		)	(144		)	(162		)	(575		)
Net payments or draws	(3,693		)	(16,028		)	(13,212		)	(4,248		)	(1,881		)	(1,860		)
Loans placed on non-accrual	1,515			421			54,735			893			27,289			2,369
Non-accrual loans brought current	—			(55		)	—			(1,018		)	(682		)	(276		)
Balance at end of period	$	91,399		$	96,000		$	112,361		$	71,421		$	75,938		$	51,374

Analysis of allowance for credit losses:
Balance at beginning of period	$	130,361		$	165,367		$	170,314		$	163,481		$	85,800		$	56,132
Transition impact of adopting ASC 326	—			—			—			—			—			2,983
Initial allowance on purchased credit deteriorated loans	—			—			—			—			—			2,762
Initial allowance on acquired PCD loans	—			—			—			—			18,628			—
Provision/ (credit) for credit losses	(4,204		)	(34,708		)	(4,489		)	7,003			58,686			24,469
Less loans charged-off, net of recoveries:
Commercial real estate:
Commercial investor real estate	(144		)	(27		)	379			21			(4		)	—
Commercial owner-occupied real estate	—			—			—			—			—			—
Commercial AD&C	—			—			—			—			—			—
Commercial business	2,359			634			56			88			(463		)	108
Residential real estate:
Residential mortgage	(11		)	(270		)	37			(6		)	15			333
Residential construction	(1		)	—			(1		)	(2		)	(1		)	(2		)
Consumer	(7		)	(39		)	(13		)	69			86			107
Net charge-offs/ (recoveries)	2,196			298			458			170			(367		)	546
Balance at the end of period	$	123,961		$	130,361		$	165,367		$	170,314		$	163,481		$	85,800

Asset quality ratios:
Non-performing loans to total loans	0.93		%	0.94		%	1.11		%	0.72		%	0.77		%	0.80		%
Non-performing assets to total assets	0.74		%	0.78		%	0.91		%	0.60		%	0.61		%	0.62		%
Allowance for credit losses to loans	1.23		%	1.25		%	1.59		%	1.65		%	1.58		%	1.28		%
Allowance for credit losses to non-performing loans	131.44		%	132.08		%	143.23		%	228.03		%	204.56		%	159.02		%
Annualized net charge-offs/ (recoveries) to average loans	0.09		%	0.01		%	0.02		%	0.01		%	(0.01		)%	0.03		%

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

	Three Months Ended June 30,
	2021							2020
(Dollars in thousands and tax-equivalent)	Average Balances			Interest⁽¹⁾		Annualized Average Yield/Rate		Average Balances			Interest⁽¹⁾			Annualized Average Yield/Rate
Assets
Commercial investor real estate loans	$	3,675,119		$	38,411	4.19	%	$	3,448,882		$	38,426		4.48	%
Commercial owner-occupied real estate loans	1,663,543			19,360		4.67		1,681,674			19,794			4.73
Commercial AD&C loans	1,089,287			10,819		3.98		969,251			10,886			4.52
Commercial business loans	2,225,885			25,248		4.55		1,899,264			19,426			4.11
Total commercial loans	8,653,834			93,838		4.35		7,999,071			88,532			4.45
Residential mortgage loans	994,899			8,634		3.47		1,208,566			11,259			3.73
Residential construction loans	176,135			1,562		3.56		162,978			1,691			4.17
Consumer loans	468,686			4,183		3.58		575,734			5,341			3.73
Total residential and consumer loans	1,639,720			14,379		3.51		1,947,278			18,291			3.78
Total loans⁽²⁾	10,293,554			108,217		4.22		9,946,349			106,823			4.32
Loans held for sale	66,958			549		3.28		53,312			405			3.04
Taxable securities	1,052,229			4,373		1.66		1,164,490			7,045			2.42
Tax-advantaged securities	430,676			2,567		2.38		234,096			1,824			3.12
Total investment securities⁽³⁾	1,482,905			6,940		1.87		1,398,586			8,869			2.54
Interest-bearing deposits with banks	193,749			47		0.10		522,469			155			0.12
Federal funds sold	535			—		0.10		416			—			0.10
Total interest-earning assets	12,037,701			115,753		3.86		11,921,132			116,252			3.92

Less: allowance for credit losses	(130,734		)					(118,863		)
Cash and due from banks	97,813							181,991
Premises and equipment, net	55,718							60,545
Other assets	737,857							858,351
Total assets	$	12,798,355						$	12,903,156

Liabilities and Stockholders' Equity
Interest-bearing demand deposits	$	1,400,661		$	226	0.06	%	$	1,067,487		$	457		0.17	%
Regular savings deposits	476,999			66		0.06		367,191			73			0.08
Money market savings deposits	3,364,348			1,254		0.15		2,890,842			3,396			0.47
Time deposits	1,658,203			2,305		0.56		2,281,434			8,358			1.47
Total interest-bearing deposits	6,900,211			3,851		0.22		6,606,954			12,284			0.75
Other borrowings	155,792			43		0.11		713,965			600			0.34
Advances from FHLB	73,626			373		2.03		775,767			(2,123		)	(1.08	)
Subordinated debt	227,027			2,510		4.42		230,223			2,652			4.61
Total borrowings	456,445			2,926		2.57		1,719,955			1,129			0.27
Total interest-bearing liabilities	7,356,656			6,777		0.37		8,326,909			13,413			0.65

Noninterest-bearing demand deposits	3,763,135							3,007,222
Other liabilities	154,689							178,481
Stockholders' equity	1,523,875							1,390,544
Total liabilities and stockholders' equity	$	12,798,355						$	12,903,156

Tax-equivalent net interest income and spread				$	108,976	3.49	%				$	102,839		3.27	%
Less: tax-equivalent adjustment				930							1,325
Net interest income				$	108,046						$	101,514

Interest income/earning assets						3.86	%							3.92	%
Interest expense/earning assets						0.23								0.45
Net interest margin						3.63	%							3.47	%

(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.50% and 25.45% for 2021 and 2020, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $0.9 million and $1.3 million in 2021 and 2020, respectively.

(2) Non-accrual loans are included in the average balances.

(3) Available for sale investments are presented at amortized cost.

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

Six Months Ended June 30,

2021

2020

(Dollars in thousands and tax-equivalent)

Average

Balances

Interest⁽¹⁾

Annualized

Average

Yield/Rate

Average

Balances

Interest⁽¹⁾

Annualized

Average

Yield/Rate

Assets

Commercial investor real estate loans

Sandy Spring Bancorp Reports Quarterly Earnings of $57.3 Million