OLNEY, Md., Oct. 21, 2024 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income of $16.2 million ($0.36 per diluted common share) for the quarter ended September 30, 2024, compared to net income of $22.8 million ($0.51 per diluted common share) for the second quarter of 2024 and $20.7 million ($0.46 per diluted common share) for the third quarter of 2023.

Current quarter's core earnings were $17.9 million ($0.40 per diluted common share), compared to $24.4 million ($0.54 per diluted common share) for the quarter ended June 30, 2024 and $27.8 million ($0.62 per diluted common share) for the quarter ended September 30, 2023. Core earnings exclude the after-tax impact of amortization of intangibles, investment securities gains or losses and other non-recurring or extraordinary items. The current quarter's decline in net income and core earnings as compared to the linked quarter was driven by higher provision for credit losses combined with higher non-interest expense, partially offset by higher net interest income. The total provision for credit losses was $6.3 million for the third quarter of 2024 compared to $1.0 million for the previous quarter and $2.4 million for the third quarter of 2023.

"We have a solid capital position and are seeing ongoing success with our core deposit strategies and our wealth management lines of business," said Daniel J. Schrider, Chair, President & CEO of Sandy Spring Bank. "Our wealth teams - Sandy Spring Trust, and our subsidiaries, West Financial and RPJ - have an expanding number of referrals from current clients and work closely with business owners from early growth through maturity. The success of our wealth teams' approach is reflected in our strong fee income results."

Third Quarter Highlights

Total assets at September 30, 2024 increased by 3% to $14.4 billion compared to $14.0 billion at June 30, 2024.
Total loans remained level at $11.5 billion as of September 30, 2024 compared to June 30, 2024. During the current quarter, AD&C and commercial business loans and lines increased by $71.3 million and $19.4 million, respectively, while the commercial investor real estate segment declined by $64.9 million. Total residential mortgage and consumer loan portfolios remained relatively unchanged during this period.
Deposits increased by $397.5 million or 4% to $11.7 billion at September 30, 2024 compared to $11.3 billion at June 30, 2024, as interest-bearing deposits increased $425.8 million, while noninterest-bearing deposits declined $28.3 million. Strong growth in the interest-bearing deposit categories was mainly experienced within money market, time deposits and savings accounts, which grew by $185.2 million, $151.5 million, and $66.1 million, respectively, compared to the linked quarter. The decline in noninterest-bearing deposit categories was driven by lower balances in personal and small business checking accounts. Total deposits, excluding brokered deposits, increased by $351.7 million or 3% quarter-over-quarter and represented 94% of total deposits as of September 30, 2024.
The ratio of non-performing loans to total loans was 1.09% at September 30, 2024 compared to 0.81% at June 30, 2024 and 0.46% at September 30, 2023. The current quarter's increase in non-performing loans was mainly related to a single AD&C loan that was placed on non-accrual status during the current period. Net charge-offs for the current quarter totaled $0.7 million.
Net interest income for the third quarter of 2024 grew $1.1 million or 1% compared to the previous quarter and decreased by $3.7 million or 4% compared to the third quarter of 2023. Compared to the previous quarter, interest income increased by $5.0 million, while interest expense increased by $3.9 million.
The net interest margin was 2.44% for the third quarter of 2024 compared to 2.46% for the second quarter of 2024 and 2.55% for the third quarter of 2023. During the current quarter, the net interest margin was negatively impacted by a reversal of previously accrued uncollected interest income on a single large AD&C loan placed on a non-accrual status. Compared to the linked quarter, the rate paid on interest-bearing liabilities increased seven basis points, while the yield on interest-earning assets increased three basis points.
Provision for credit losses directly attributable to the funded loan portfolio was $6.3 million for the current quarter compared to $3.0 million in the previous quarter and $3.2 million in the prior year quarter. The current quarter's provision expense is mainly attributable to higher individual reserves on collateral-dependent loans, primarily related to a single AD&C loan due to the borrower-specific circumstances, partially offset by lower qualitative adjustments due to the reduction in commercial investor real estate loans. In addition, during the current quarter, the provision for unfunded commitments was insignificant compared to a credit of $1.9 million from the previous quarter.
Non-interest income for the third quarter of 2024 increased by 1% or $0.1 million compared to the linked quarter and grew by 13% or $2.3 million compared to the prior year quarter. The quarter-over-quarter increase was mainly driven by higher wealth management income and other income, generated by higher credit-related fees, which was fully offset by lower income from bank owned life insurance due to a receipt of one-time mortality proceeds during the prior quarter.
Non-interest expense for the third quarter of 2024 increased by $4.8 million compared to the second quarter of 2024 and $0.5 million compared to the prior year quarter. The quarterly increase in non-interest expense was primarily due to higher salaries and benefits along with an increase in professional fees and services.
Return on average assets ("ROA") for the quarter ended September 30, 2024 was 0.46% and return on average tangible common equity ("ROTCE") was 5.88% compared to 0.66% and 8.27%, respectively, for the second quarter of 2024 and 0.58% and 7.42%, respectively, for the third quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.50% and core ROTCE was 5.88% compared to 0.70% and 8.27%, respectively, for the previous quarter and 0.78% and 9.51%, respectively, for the third quarter of 2023.
The GAAP efficiency ratio was 72.12% for the third quarter of 2024, compared to 68.19% for the second quarter of 2024 and 70.72% for the third quarter of 2023. The non-GAAP efficiency ratio was 69.06% for the third quarter of 2024 compared to 65.31% for the second quarter of 2024 and 60.91% for the prior year quarter. The increase in non-GAAP efficiency ratio (reflecting a decrease in efficiency) in the current quarter compared to the previous quarter was the result of higher non-interest expense in the current quarter.

Balance Sheet and Credit Quality

Total assets were $14.4 billion at September 30, 2024, as compared to $14.0 billion at June 30, 2024. At September 30, 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 $71.3 million or 6% and $19.4 million or 1%, respectively, were mostly offset by the decline in commercial investor real estate loans of $64.9 million or 1%. Total residential mortgage and consumer loan portfolios remained relatively unchanged.

Deposits increased $397.5 million or 4% to $11.7 billion at September 30, 2024 compared to $11.3 billion at June 30, 2024. During this period, noninterest-bearing deposits decreased $28.3 million or 1%, while interest-bearing deposits increased $425.8 million or 5%. The slight decline in noninterest-bearing deposit categories was driven by decreases in personal and small business checking accounts, partially offset by an increase in commercial checking accounts. Growth in interest-bearing deposits was seen across all product categories, but most notably in money market and time deposit accounts which grew $185.2 million or 7% and $151.5 million or 6% during the current quarter, respectively. Total deposits, excluding brokered deposits, increased by $351.7 million or 3% quarter-over-quarter and remained at 94% of the total deposits as of September 30, 2024 compared to June 30, 2024, reflecting continued strength and stability of the core deposit base. Total uninsured deposits at September 30, 2024 were approximately 37% of total deposits.

Total borrowings decreased $54.1 million or 6% at September 30, 2024 as compared to the previous quarter, primarily driven by a $50.0 million pay down of FHLB advances. At September 30, 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 146% of uninsured deposits.

The tangible common equity to tangible assets ratio declined slightly to 8.83% at September 30, 2024, compared to 8.85% at June 30, 2024.

At September 30, 2024, the Company had 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%. These risk-based capital ratios compare to a total risk-based capital ratio of 15.49%, a common equity tier 1 risk-based capital ratio of 11.28%, a tier 1 risk-based capital ratio of 11.28%, and a tier 1 leverage ratio of 9.70% at June 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 September 30, 2024, non-performing loans totaled $125.3 million, compared to $93.0 million at June 30, 2024 and $51.8 million at September 30, 2023. The non-performing loans to total loans ratio was 1.09% compared to 0.81% on a linked quarter basis. These levels of non-performing loans compare to 0.46% at September 30, 2023. The current quarter's increase in non-performing loans was mainly related to a single AD&C loan with the total outstanding principal balance of $28.0 million, which was placed on a non-accrual status during the current period. Total net charge-offs for the current quarter amounted to $0.7 million compared to $0.2 million for the second quarter of 2024 and $0.1 million for the third quarter of 2023.

At September 30, 2024, the allowance for credit losses was $131.4 million or 1.14% of outstanding loans and 105% of non-performing loans, compared to $125.9 million or 1.10% of outstanding loans and 135% of non-performing loans at the end of the previous quarter and $123.4 million or 1.09% of outstanding loans and 238% of non-performing loans at the end of the third quarter of 2023. The increase in the allowance for the current quarter compared to the previous quarter mainly reflects higher individual reserves on collateral-dependent non-accrual loans, primarily driven by the aforementioned AD&C lending relationship, partially offset by lower qualitative adjustments as a result of declines in commercial investor real estate loans.

Income Statement Review

Quarterly Results

Net income was $16.2 million ($0.36 per diluted common share) for the three months ended September 30, 2024 compared to $22.8 million ($0.51 per diluted common share) for the three months ended June 30, 2024 and $20.7 million ($0.46 per diluted common share) for the prior year quarter. The current quarter's core earnings were $17.9 million ($0.40 per diluted common share), compared to $24.4 million ($0.54 per diluted common share) for the previous quarter and $27.8 million ($0.62 per diluted common share) for the quarter ended September 30, 2023. The decreases in the current quarter's net income and core earnings compared to the previous quarter were driven primarily by higher provision for credit losses and non-interest expense.

Net interest income for the third quarter of 2024 increased $1.1 million or 1% compared to the previous quarter and declined $3.7 million or 4% compared to the third quarter of 2023. During the current quarter, interest income increased $5.0 million, while interest expense increased $3.9 million. The rising interest rate environment was primarily responsible for a $7.7 million year-over-year increase in interest income. This growth in interest income was more than offset by the $11.4 million year-over-year growth in interest expense as funding costs have also risen in response to the rising rate environment and significant competition for deposits.

The net interest margin was 2.44% for the third quarter of 2024 compared to 2.46% for the second quarter of 2024 and 2.55% for the third quarter of 2023. The decrease in the net interest margin during the current quarter was a result of a seven basis point increase in the rate paid on interest-bearing liabilities, while the yield earned on interest-earning assets rose three basis points. The current quarter's net interest margin was negatively impacted by approximately three basis points due to the reversal of previously accrued uncollected interest income on a single large AD&C loan placed on non-accrual status during the period. As compared to the prior year quarter, the yield on interest-earning assets increased 23 basis points while the rate paid on interest-bearing liabilities rose 39 basis points, resulting in net interest margin compression of 11 basis points. The rate and yield increases year-over-year were driven by the higher interest rate environment, competition for deposits in the market, and customer movement of excess funds out of noninterest-bearing accounts into higher yielding products.

The total provision for credit losses was $6.3 million for the third quarter of 2024 compared to $1.0 million for the previous quarter and $2.4 million for the third quarter of 2023. The provision for credit losses directly attributable to the funded loan portfolio was $6.3 million for the current quarter compared to $3.0 million for the second quarter of 2024 and $3.2 million for the third quarter of 2023. The current quarter's provision is mainly a reflection of higher individual reserves on collateral-dependent non-accrual loans, primarily associated with the provision on a single AD&C lending relationship based on the current fair value of the collateral, partially offset by lower qualitative adjustments driven by an overall reduction in commercial investor real estate loan portfolio. In addition, during the current quarter, the reserve for unfunded commitments remained relatively stable at $1.5 million.

Non-interest income for the third quarter of 2024 increased by 1% or $0.1 million compared to the linked quarter and grew by 13% or $2.3 million compared to the prior year quarter. The current quarter's increase in non-interest income as compared to the previous quarter was mainly driven by the $0.4 million increase in other income, generated by credit-related fees, and $0.3 million increase in wealth management income, due to the $352.1 million or 6% growth in assets under management quarter-over-quarter and the overall favorable market performance, offset by $0.5 million decrease in BOLI income, due to the receipt of one-time death proceeds in the prior quarter.

Non-interest expense for the third quarter of 2024 increased $4.8 million or 7% compared to the second quarter of 2024 and $0.5 million or 1% compared to the third quarter of 2023. The quarter-over-quarter increase is predominantly attributable to the $3.2 million increase in salaries and benefits, due to the increase in employee incentive compensation coupled with the $1.6 million increase in professional fees and services, mostly due to a one-time contract negotiation fee. The prior year quarter included $8.2 million of pension settlement expense related to the termination of the Company's pension plan. Excluding this item, non-interest expense for the third quarter of 2024 increased $8.6 million or 13% compared to the third quarter of 2023.

For the third quarter of 2024, the GAAP efficiency ratio was 72.12% compared to 68.19% for the second quarter of 2024 and 70.72% for the third quarter of 2023. The GAAP efficiency ratio rose from the prior year quarter primarily as a result of the 1% increase in GAAP non-interest expense coupled with the 1% decline in GAAP revenue. The non-GAAP efficiency ratio was 69.06% for the current quarter as compared to 65.31% for the second quarter of 2024 and 60.91% for the third quarter of 2023. The increase in the non-GAAP efficiency ratio (reflecting a decrease in efficiency) from the third quarter of the prior year to the current year quarter was primarily the result of the 12% increase in adjusted non-interest expense.

ROA for the quarter ended September 30, 2024 was 0.46% and ROTCE was 5.88% compared to 0.66% and 8.27%, respectively, for the second quarter of 2024 and 0.58% and 7.42%, respectively, for the third quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.50% and core ROTCE was 5.88% compared to 0.70% and 8.27% for the second quarter of 2024 and 0.78% and 9.51%, respectively, for the third quarter of 2023.

Year-to-Date Results

The Company recorded net income of $59.4 million for the nine months ended September 30, 2024 compared to net income of $96.7 million for the same period in the prior year. Core earnings were $64.3 million for the nine months ended September 30, 2024 compared to $107.2 million for the same period in the prior year. Year-to-date net income and core earnings declined as a result of lower net interest income in combination with higher provision for credit losses, which was partially offset by higher non-interest income.

For the nine months ended September 30, 2024, net interest income decreased $31.8 million compared to the prior year as a result of the $61.1 million increase in interest expense, partially offset by the $29.3 million increase in interest income. The increase in interest expense was driven by the interest expense on deposits, primarily associated with savings and time deposit accounts. The net interest margin declined to 2.44% for the nine months ended September 30, 2024, compared to 2.75% for the prior year, primarily as a result of higher funding costs due to the elevated interest rate environment and market competition for deposits during the period.

The provision for credit losses for the nine months ended September 30, 2024 was $9.7 million as compared to a credit of $14.1 million for 2023. The provision for the nine months ended September 30, 2024 was primarily due to an increase in individual reserves on collateral-dependent non-accrual loans, as well as adjustments applied to specific industries within the commercial real estate segment during the first quarter of 2024. The prior year's credit to provision was mainly attributable to the improving regional forecasted unemployment rate observed during the first half of 2023, and the declining probability of economic recession.

For the nine months ended September 30, 2024, non-interest income increased 14% to $57.7 million compared to $50.5 million for 2023. During the current year, wealth management income increased $3.7 million or 14%, as assets under management increased $1.0 billion or 19% year-over-year. In addition, BOLI mortality-related income and service charges on deposit accounts increased $1.3 million and $1.1 million, respectively.

Non-interest expense increased to $209.0 million for the nine months ended September 30, 2024, compared to $207.9 million for 2023. The drivers of the increase in non-interest expense were the $4.0 million increase in professional fees and services, $2.7 increase in amortization of intangible assets, $1.8 million increase in FDIC expense, and $1.2 million increase in outside data services. These year-over-year increases were offset by the $9.2 million decrease in compensation and benefits, as the prior year period included $8.2 million pension termination expense and $1.9 million of severance related expenses associated with staffing adjustments.

For the nine months ended September 30, 2024, the GAAP efficiency ratio was 69.98% compared to 64.29% for the same period in 2023. The non-GAAP efficiency ratio for the current year was 67.04% compared to 59.42% for the prior year. The growth in the current year's GAAP and non-GAAP efficiency ratios compared to the prior year, indicating a decline in efficiency, was the result of the declines in GAAP and non-GAAP revenues combined with the growth in GAAP and non-GAAP non-interest expenses.

Explanation of Non-GAAP Financial Measures

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

Tangible common equity and related measures are non-GAAP measures that exclude the impact of goodwill and other intangible assets.
The non-GAAP efficiency ratio excludes amortization of intangible assets, investment securities gains/(losses), 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 amortization of intangible assets, investment securities gains/(losses) and other non-recurring or extraordinary items, on a net of tax basis.
Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.

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

Conference Call Cancelled

As a result of today's announcement that the Company has entered into a merger agreement with Atlantic Union Bankshares Corporation, the Company has cancelled its conference call scheduled for 2:00 p.m. ET today to discuss the Company's results for the third quarter of 2024.

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; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2023, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp's forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC's Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries

FINANCIAL HIGHLIGHTS - UNAUDITED

	Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands, except per share data)		2024			2023		% Change			2024			2023		% Change
Results of operations:
Net interest income	$	81,412		$	85,081		(4	)%	$	241,040		$	272,854		(12	)%
Provision/ (credit) for credit losses		6,316			2,365		167	%		9,724			(14,116	)	N/M
Non-interest income		19,715			17,391		13			57,669			50,518		14
Non-interest expense		72,937			72,471		1			209,047			207,912		1
Income before income tax expense		21,874			27,636		(21	)		79,938			129,576		(38	)
Net income		16,209			20,746		(22	)		59,388			96,744		(39	)

Net income attributable to common shareholders	$	16,205		$	20,719		(22	)	$	59,351		$	96,552		(39	)
Pre-tax pre-provision net income⁽¹⁾	$	28,190		$	30,001		(6	)	$	89,662		$	115,460		(22	)

Return on average assets		0.46	%		0.58	%				0.56	%		0.92	%
Return on average common equity		4.01	%		5.35	%				4.99	%		8.50	%
Return on average tangible common equity⁽¹⁾		5.88	%		7.42	%				7.17	%		11.67	%
Net interest margin		2.44	%		2.55	%				2.44	%		2.75	%
Efficiency ratio - GAAP basis⁽²⁾		72.12	%		70.72	%				69.98	%		64.29	%
Efficiency ratio - Non-GAAP basis⁽²⁾		69.06	%		60.91	%				67.04	%		59.42	%

Per share data:
Basic net income per common share	$	0.36		$	0.46		(22	)%	$	1.32		$	2.16		(39	)%
Diluted net income per common share	$	0.36		$	0.46		(22	)	$	1.31		$	2.15		(39	)
Weighted average diluted common shares		45,242,920			44,960,455		1			45,156,521			44,912,803		1
Dividends declared per share	$	0.34		$	0.34		—		$	1.02		$	1.02		—
Book value per common share	$	36.10		$	34.26		5		$	36.10		$	34.26		5
Tangible book value per common share⁽¹⁾	$	27.37		$	25.80		6		$	27.37		$	25.80		6
Outstanding common shares		45,125,078			44,895,158		1			45,125,078			44,895,158		1

Financial condition at period-end:
Investment securities	$	1,440,488		$	1,392,078		3	%	$	1,440,488		$	1,392,078		3	%
Loans		11,491,921			11,300,292		2			11,491,921			11,300,292		2
Assets		14,383,073			14,135,085		2			14,383,073			14,135,085		2
Deposits		11,737,694			11,151,012		5			11,737,694			11,151,012		5
Stockholders' equity		1,628,837			1,537,914		6			1,628,837			1,537,914		6

Capital ratios:
Tier 1 leverage⁽³⁾		9.59	%		9.50	%				9.59	%		9.50	%
Common equity tier 1 capital to risk-weighted assets⁽³⁾		11.27	%		10.83	%				11.27	%		10.83	%
Tier 1 capital to risk-weighted assets⁽³⁾		11.27	%		10.83	%				11.27	%		10.83	%
Total regulatory capital to risk-weighted assets⁽³⁾		15.53	%		14.85	%				15.53	%		14.85	%
Tangible common equity to tangible assets⁽⁴⁾		8.83	%		8.42	%				8.83	%		8.42	%
Average equity to average assets		11.37	%		10.92	%				11.32	%		10.84	%

Credit quality ratios:
Allowance for credit losses to loans		1.14	%		1.09	%				1.14	%		1.09	%
Non-performing loans to total loans		1.09	%		0.46	%				1.09	%		0.46	%
Non-performing assets to total assets		0.89	%		0.37	%				0.89	%		0.37	%
Allowance for credit losses to non-performing loans		104.92	%		238.32	%				104.92	%		238.32	%
Annualized net charge-offs/ (recoveries) to average loans⁽⁵⁾		0.03	%		—	%				0.02	%		0.02	%

N/M - not meaningful
(1)	Represents a non-GAAP measure.
(2)	The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, 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 September 30, 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 September 30,						Nine Months Ended September 30,
(Dollars in thousands)		2024			2023			2024			2023
Core earnings (non-GAAP):
Net income (GAAP)	$	16,209		$	20,746		$	59,388		$	96,744
Plus/ (less) non-GAAP adjustments (net of tax)⁽¹⁾:
Amortization of intangible assets		1,727			932			4,864			2,851
Severance expense		—			—			—			1,445
Pension settlement expense		—			6,088			—			6,088
Contingent payment expense		—			—			—			27
Core earnings (Non-GAAP)	$	17,936		$	27,766		$	64,252		$	107,155

Core earnings per diluted common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)		45,242,920			44,960,455			45,156,521			44,912,803

Earnings per diluted common share (GAAP)	$	0.36		$	0.46		$	1.31		$	2.15
Core earnings per diluted common share (non-GAAP)	$	0.40		$	0.62		$	1.42		$	2.39

Core return on average assets (non-GAAP):
Average assets (GAAP)	$	14,136,037		$	14,086,342		$	14,051,722		$	14,043,925

Return on average assets (GAAP)		0.46	%		0.58	%		0.56	%		0.92	%
Core return on average assets (non-GAAP)		0.50	%		0.78	%		0.61	%		1.02	%

Return/ Core return on average tangible common equity (non-GAAP):
Net Income (GAAP)	$	16,209		$	20,746		$	59,388		$	96,744
Plus: Amortization of intangible assets (net of tax)		1,727			932			4,864			2,851
Net income before amortization of intangible assets	$	17,936		$	21,678		$	64,252		$	99,595

Average total stockholders' equity (GAAP)	$	1,607,377		$	1,538,553		$	1,590,682		$	1,522,153
Average goodwill		(363,436	)		(363,436	)		(363,436	)		(363,436	)
Average other intangible assets, net		(30,679	)		(16,777	)		(29,940	)		(18,068	)
Average tangible common equity (non-GAAP)	$	1,213,262		$	1,158,340		$	1,197,306		$	1,140,649

Return on average tangible common equity (non-GAAP)		5.88	%		7.42	%		7.17	%		11.67	%
Core return on average tangible common equity (non-GAAP)		5.88	%		9.51	%		7.17	%		12.56	%

(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.

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)		2024			2023			2024			2023
Pre-tax pre-provision net income:
Net income (GAAP)	$	16,209		$	20,746		$	59,388		$	96,744
Plus/ (less) non-GAAP adjustments:
Income tax expense		5,665			6,890			20,550			32,832
Provision/ (credit) for credit losses		6,316			2,365			9,724			(14,116	)
Pre-tax pre-provision net income (non-GAAP)	$	28,190		$	30,001		$	89,662		$	115,460

Efficiency ratio (GAAP):
Non-interest expense	$	72,937		$	72,471		$	209,047		$	207,912

Net interest income plus non-interest income	$	101,127		$	102,472		$	298,709		$	323,372

Efficiency ratio (GAAP)		72.12	%		70.72	%		69.98	%		64.29	%

Efficiency ratio (Non-GAAP):
Non-interest expense	$	72,937		$	72,471		$	209,047		$	207,912
Less non-GAAP adjustments:
Amortization of intangible assets		2,323			1,245			6,527			3,820
Severance expense		—			—			—			1,939
Pension settlement expense		—			8,157			—			8,157
Contingent payment expense		—			—			—			36
Non-interest expense - as adjusted	$	70,614		$	63,069		$	202,520		$	193,960

Net interest income plus non-interest income	$	101,127		$	102,472		$	298,709		$	323,372
Plus non-GAAP adjustment:
Tax-equivalent income		1,121			1,068			3,359			3,044
Less/ (plus) non-GAAP adjustment:
Investment securities gains/ (losses)		—			—			—			—
Net interest income plus non-interest income - as adjusted	$	102,248		$	103,540		$	302,068		$	326,416

Efficiency ratio (Non-GAAP)		69.06	%		60.91	%		67.04	%		59.42	%

Tangible common equity ratio:
Total stockholders' equity	$	1,628,837		$	1,537,914		$	1,628,837		$	1,537,914
Goodwill		(363,436	)		(363,436	)		(363,436	)		(363,436	)
Other intangible assets, net		(30,514	)		(16,035	)		(30,514	)		(16,035	)
Tangible common equity	$	1,234,887		$	1,158,443		$	1,234,887		$	1,158,443

Total assets	$	14,383,073		$	14,135,085		$	14,383,073		$	14,135,085
Goodwill		(363,436	)		(363,436	)		(363,436	)		(363,436	)
Other intangible assets, net		(30,514	)		(16,035	)		(30,514	)		(16,035	)
Tangible assets	$	13,989,123		$	13,755,614		$	13,989,123		$	13,755,614

Tangible common equity ratio		8.83	%		8.42	%		8.83	%		8.42	%

Outstanding common shares		45,125,078			44,895,158			45,125,078			44,895,158
Tangible book value per common share	$	27.37		$	25.80		$	27.37		$	25.80

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED

(Dollars in thousands)	September 30, 2024			December 31, 2023
Assets
Cash and due from banks	$	109,583		$	82,257
Federal funds sold		—			245
Interest-bearing deposits with banks		640,763			463,396
Cash and cash equivalents		750,346			545,898
Residential mortgage loans held for sale (at fair value)		21,489			10,836
SBA loans held for sale		425			—
Investments held-to-maturity (fair values of $189,853 and $200,411 at September 30, 2024 and December 31, 2023, respectively)		220,296			236,165
Investments available-for-sale (at fair value)		1,149,056			1,102,681
Other investments, at cost		71,136			75,607
Total loans		11,491,921			11,366,989
Less: allowance for credit losses - loans		(131,428	)		(120,865	)
Net loans		11,360,493			11,246,124
Premises and equipment, net		57,249			59,490
Other real estate owned		3,265			—
Accrued interest receivable		45,162			46,583
Goodwill		363,436			363,436
Other intangible assets, net		30,514			28,301
Other assets		310,206			313,051
Total assets	$	14,383,073		$	14,028,172

Liabilities
Noninterest-bearing deposits	$	2,903,063		$	2,914,161
Interest-bearing deposits		8,834,631			8,082,377
Total deposits		11,737,694			10,996,538
Securities sold under retail repurchase agreements		70,767			75,032
Federal Reserve Bank borrowings		—			300,000
Advances from FHLB		450,000			550,000
Subordinated debt		371,251			370,803
Total borrowings		892,018			1,295,835
Accrued interest payable and other liabilities		124,524			147,657
Total liabilities		12,754,236			12,440,030

Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 45,125,078 and 44,913,561 at September 30, 2024 and December 31, 2023, respectively.		45,125			44,914
Additional paid in capital		748,202			742,243
Retained earnings		911,411			898,316
Accumulated other comprehensive loss		(75,901	)		(97,331	)
Total stockholders' equity		1,628,837			1,588,142
Total liabilities and stockholders' equity	$	14,383,073		$	14,028,172

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands, except per share data)		2024		2023		2024		2023
Interest income:
Interest and fees on loans	$	154,339	$	147,304	$	456,309	$	431,305
Interest on mortgage loans held for sale		364		238		801		697
Interest on SBA loans held for sale		2		—		2		—
Interest on deposits with banks		6,191		6,371		17,401		13,979
Interest and dividend income on investment securities:
Taxable		7,440		6,682		21,319		20,538
Tax-advantaged		1,762		1,811		5,385		5,376
Interest on federal funds sold		—		5		8		13
Total interest income		170,098		162,411		501,225		471,908
Interest expense:
Interest on deposits		79,287		63,102		227,062		155,215
Interest on retail repurchase agreements and federal funds purchased		452		4,082		4,890		10,377
Interest on advances from FHLB		5,001		6,200		16,394		21,623
Interest on subordinated debt		3,946		3,946		11,839		11,839
Total interest expense		88,686		77,330		260,185		199,054
Net interest income		81,412		85,081		241,040		272,854
Provision/ (credit) for credit losses		6,316		2,365		9,724		(14,116	)
Net interest income after provision/ (credit) for credit losses		75,096		82,716		231,316		286,970
Non-interest income:
Service charges on deposit accounts		3,009		2,704		8,765		7,698
Mortgage banking activities		1,529		1,682		4,524		4,744
Wealth management income		10,738		9,391		31,151		27,414
Income from bank owned life insurance		1,307		845		4,283		3,003
Bank card fees		435		450		1,293		1,315
Other income		2,697		2,319		7,653		6,344
Total non-interest income		19,715		17,391		57,669		50,518
Non-interest expense:
Salaries and employee benefits		41,030		44,853		115,549		124,710
Occupancy expense of premises		4,657		4,609		14,278		14,220
Equipment expenses		3,841		3,811		11,672		11,688
Marketing		1,320		729		3,350		3,861
Outside data services		3,025		2,819		9,414		8,186
FDIC insurance		2,773		2,333		8,635		6,846
Amortization of intangible assets		2,323		1,245		6,527		3,820
Professional fees and services		6,577		4,509		16,403		12,354
Other expenses		7,391		7,563		23,219		22,227
Total non-interest expense		72,937		72,471		209,047		207,912
Income before income tax expense		21,874		27,636		79,938		129,576
Income tax expense		5,665		6,890		20,550		32,832
Net income	$	16,209	$	20,746	$	59,388	$	96,744

Net income per share amounts:
Basic net income per common share	$	0.36	$	0.46	$	1.32	$	2.16
Diluted net income per common share	$	0.36	$	0.46	$	1.31	$	2.15
Dividends declared per share	$	0.34	$	0.34	$	1.02	$	1.02

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

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

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

		2024									2023
(Dollars in thousands, except per share data)	Q3			Q2			Q1			Q4			Q3			Q2			Q1
Balance sheets at quarter end:
Commercial investor real estate loans	$	4,868,467		$	4,933,329		$	4,997,879		$	5,104,425		$	5,137,694		$	5,131,210		$	5,167,456
Commercial owner-occupied real estate loans		1,737,327			1,747,708			1,741,113			1,755,235			1,760,384			1,770,135			1,769,928
Commercial AD&C loans		1,255,609			1,184,296			1,090,259			988,967			938,673			1,045,742			1,046,665
Commercial business loans		1,620,926			1,601,510			1,509,592			1,504,880			1,454,709			1,423,614			1,437,478
Residential mortgage loans		1,529,786			1,521,890			1,511,624			1,474,521			1,432,051			1,385,743			1,328,524
Residential construction loans		53,639			78,027			97,685			121,419			160,345			190,690			223,456
Consumer loans		426,167			417,161			416,132			417,542			416,436			422,505			421,734
Total loans		11,491,921			11,483,921			11,364,284			11,366,989			11,300,292			11,369,639			11,395,241
Allowance for credit losses - loans		(131,428	)		(125,863	)		(123,096	)		(120,865	)		(123,360	)		(120,287	)		(117,613	)
Residential mortgage loans held for sale		21,489			18,961			16,627			10,836			19,235			21,476			16,262
SBA loans held for sale		425			—			—			—			—			—			—
Investment securities		1,440,488			1,401,511			1,405,490			1,414,453			1,392,078			1,463,554			1,528,336
Total assets		14,383,073			14,008,343			13,888,133			14,028,172			14,135,085			13,994,545			14,129,007
Noninterest-bearing demand deposits		2,903,063			2,931,405			2,817,928			2,914,161			3,013,905			3,079,896			3,228,678
Total deposits		11,737,694			11,340,228			11,227,200			10,996,538			11,151,012			10,958,922			11,075,991
Customer repurchase agreements		70,767			75,038			71,529			75,032			66,581			74,510			47,627
Total stockholders' equity		1,628,837			1,599,004			1,589,364			1,588,142			1,537,914			1,539,032			1,536,865
Quarterly average balance sheets:
Commercial investor real estate loans	$	4,874,003		$	4,964,406		$	5,057,334		$	5,125,028		$	5,125,459		$	5,146,632		$	5,136,204
Commercial owner-occupied real estate loans		1,741,663			1,734,106			1,746,042			1,755,048			1,769,717			1,773,039			1,769,680
Commercial AD&C loans		1,253,035			1,133,506			1,030,763			960,646			995,682			1,057,205			1,082,791
Commercial business loans		1,579,001			1,551,798			1,508,336			1,433,035			1,442,518			1,441,489			1,444,588
Residential mortgage loans		1,526,445			1,518,748			1,491,277			1,451,614			1,406,929			1,353,809			1,307,761
Residential construction loans		64,684			86,638			110,456			142,325			174,204			211,590			223,313
Consumer loans		421,003			417,206			417,539			419,299			421,189			423,306			424,122
Total loans		11,459,834			11,406,408			11,361,747			11,286,995			11,335,698			11,407,070			11,388,459
Residential mortgage loans held for sale		19,889			14,497			8,142			10,132			13,714			17,480			8,324
SBA loans held for sale		65			—			—			—			—			—			—
Investment securities		1,531,378			1,538,624			1,536,127			1,544,173			1,589,342			1,639,324			1,679,593
Interest-earning assets		13,474,697			13,292,995			13,411,810			13,462,583			13,444,117			13,423,589			13,316,165
Total assets		14,136,037			13,956,261			14,061,935			14,090,423			14,086,342			14,094,653			13,949,276
Noninterest-bearing demand deposits		2,783,906			2,790,620			2,730,295			2,958,254			3,041,101			3,137,971			3,480,433
Total deposits		11,483,524			11,245,476			11,086,145			11,089,587			11,076,724			10,928,038			11,049,991
Customer repurchase agreements		63,436			62,161			72,836			66,622			67,298			58,382			60,626
Total interest-bearing liabilities		9,600,905			9,441,015			9,583,074			9,418,666			9,332,617			9,257,652			8,806,720
Total stockholders' equity		1,607,377			1,579,582			1,584,902			1,546,312			1,538,553			1,535,465			1,491,929
Financial measures:
Average equity to average assets		11.37	%		11.32	%		11.27	%		10.97	%		10.92	%		10.89	%		10.70	%
Average investment securities to average earning assets		11.36	%		11.57	%		11.45	%		11.47	%		11.82	%		12.21	%		12.61	%
Average loans to average earning assets		85.05	%		85.81	%		84.71	%		83.84	%		84.32	%		84.98	%		85.52	%
Loans to assets		79.90	%		81.98	%		81.83	%		81.03	%		79.94	%		81.24	%		80.65	%
Loans to deposits		97.91	%		101.27	%		101.22	%		103.37	%		101.34	%		103.75	%		102.88	%
Assets under management	$	6,567,752		$	6,215,697		$	6,165,509		$	5,999,520		$	5,536,499		$	5,742,888		$	5,477,560
Capital measures:
Tier 1 leverage⁽¹⁾		9.59	%		9.70	%		9.56	%		9.51	%		9.50	%		9.42	%		9.44	%
Common equity tier 1 capital to risk-weighted assets ⁽¹⁾		11.27	%		11.28	%		10.96	%		10.90	%		10.83	%		10.65	%		10.53	%
Tier 1 capital to risk-weighted assets ⁽¹⁾		11.27	%		11.28	%		10.96	%		10.90	%		10.83	%		10.65	%		10.53	%
Total regulatory capital to risk-weighted assets⁽¹⁾		15.53	%		15.49	%		15.05	%		14.92	%		14.85	%		14.60	%		14.43	%
Book value per common share	$	36.10		$	35.45		$	35.37		$	35.36		$	34.26		$	34.31		$	34.37
Outstanding common shares		45,125,078			45,109,671			44,940,147			44,913,561			44,895,158			44,862,369			44,712,497

(1) Estimated ratio at September 30, 2024.

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

		2024						2023
(Dollars in thousands)	September 30,		June 30,		March 31,		December 31,		September 30,		June 30,		March 31,
Non-performing assets:
Loans 90 days past due:
Commercial real estate:
Commercial investor real estate	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Commercial owner-occupied real estate		—		—		—		—		—		—		—
Commercial AD&C		—		—		—		—		—		—		—
Commercial business		—		—		20		20		415		29		3,002
Residential real estate:
Residential mortgage		399		338		340		342		—		692		352
Residential construction		—

Sandy Spring Bancorp Reports Third Quarter Earnings of $16.2 Million