Attached files
| file | filename |
|---|---|
| 8-K - 8-K - SANDY SPRING BANCORP INC | sasr-20210422.htm |
| EX-99.2 - EX-99.2 - SANDY SPRING BANCORP INC | a20211qsupplementalpacka.htm |
Exhibit 99.1
 | NEWS RELEASE | ||||
FOR IMMEDIATE RELEASE
SANDY SPRING BANCORP REPORTS FIRST QUARTER EARNINGS OF $75.5 MILLION
Improved Economic Forecast Drives $35 Million Provision Credit
OLNEY, MARYLAND, April 22, 2021 — Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income of $75.5 million ($1.58 per diluted common share) for the first quarter of 2021. The current quarter’s result compares to net income of $10.0 million ($0.28 per diluted common share) for the first quarter of 2020 and net income of $56.7 million ($1.19 per diluted common share) for the fourth quarter of 2020.
Core earnings for the current quarter, 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 $56.9 million ($1.20 per diluted common share), compared to $29.6 million ($0.85 per diluted common share) for the quarter ended March 31, 2020 and $55.7 million ($1.18 per diluted common share) for the quarter ended December 31, 2020.
The current quarter's provision for credit losses was a credit of $34.7 million as compared to a credit of $4.5 million for the fourth quarter of 2020. The current quarter's large credit for the provision for credit losses compared to the prior quarter is principally the result of a decline in the forecasted unemployment rate and, to a lesser degree, improvements in other forecasted macroeconomic indicators.
“We delivered a solid first quarter. We are pleased with the stability in the margin, the contributions of our fee-based lines of business, the improved economic forecast and the resiliency of our loan portfolio’s credit quality. Our credit outlook is strong, and we are ready to help our clients reopen, recover and emerge stronger than ever,” said Daniel J. Schrider, President and CEO.
“We also look forward to entering the next phase of our return-to-work plan. We will apply the lessons we have learned about remote work and how we can use technology to do our jobs more effectively, but it is our goal to welcome our employees back to our offices in the months ahead. As a company that prioritizes people and relationships, we believe that in-person collaboration is what is best for our culture and how we do business.”
First Quarter Highlights:
•Total assets at March 31, 2021, grew 44% to $12.9 billion compared to March 31, 2020, primarily due to the Revere Bank (“Revere”) acquisition in the second quarter of 2020. During this period, the participation in the Paycheck Protection Program ("PPP" or "PPP Program") resulted in the addition of $1.3 billion in outstanding commercial business loans. As a result of these strategic initiatives, loans and deposits grew by 55% and 62%, respectively.
•The net interest margin was 3.56% for the first quarter of 2021, compared to 3.29% for the same quarter of 2020, and 3.38% for the fourth quarter of 2020. Excluding the impact of the amortization of the fair value marks derived from acquisitions, the current quarter’s net interest margin would have been 3.46%, compared to 3.27% for first quarter of 2020, and 3.31% for the fourth quarter of 2020.
•The provision for credit losses was a credit of $34.7 million for the current quarter compared to the prior quarter’s credit to the provision of $4.5 million. The significant credit to the provision was primarily the result of the improvement in the forecasted unemployment rate.
•Non-interest income for the current quarter increased by 59% or $10.7 million compared to the prior year quarter, as a result of a 235% increase in income from mortgage banking activities and 25% growth in wealth management income as a result of the acquisition of Rembert Pendleton Jackson (“RPJ”) in the first quarter of the prior year.
•Non-interest expense increased $20.4 million or 43% for the first quarter of 2021, compared to the prior year quarter. This increase was driven primarily by two factors: the impact of the acquisitions of Revere and RPJ, which increased compensation and operational costs, in addition to intangible asset amortization, and $9.1 million in prepayment penalties incurred on the early redemption of FHLB advances in the first quarter of the current year.
•Return on average assets (“ROA”) for the quarter ended March 31, 2021 was 2.39% and return on average tangible common equity (“ROTCE”) was 28.47%. This compares to ROA of 1.78% and ROTCE of 21.89% for the prior quarter. The non-GAAP efficiency ratio for the first quarter of 2021 was 42.65% compared to 45.09% for the fourth quarter of 2020.
•During the quarter, the dividend was increased to $0.32 from $0.30 per common share.
Balance Sheet and Credit Quality
Total assets grew to $12.9 billion at March 31, 2021, as compared to $8.9 billion at March 31, 2020. Year-over-year asset growth was primarily the result of the acquisition of Revere in April 2020, in addition to the Company’s participation in the PPP program. During this period, total loans grew by 55% to $10.4 billion at March 31, 2021, compared to $6.7 billion at March 31, 2020. Excluding PPP loans, total loans grew 36% to $9.1 billion at March 31, 2021 as compared to the prior year quarter. The 2020 acquisition of Revere drove the majority of the increase in commercial loans, which, excluding PPP loans, grew 49% or $2.5 billion. The residential mortgage loan portfolio decreased 8% year-over-year as the majority of loan originations during the past year were sold in the secondary market. Consumer loan growth during the year was 9%, also a result of the acquisition. Deposit growth was 62% during the past twelve months, as noninterest-bearing deposits experienced growth of 94% and interest-bearing deposits grew 48%. This growth was driven primarily by the Revere acquisition and, to a lesser extent, the PPP program.
During the current quarter the Company originated $446.0 million in first and second draw loans under the reinitiated PPP program. During the quarter, the Company recognized $7.9 million of fees into interest income from the total fees received under the program. In addition to processing applications for new loans under the reinitiated PPP program, the Company began accepting digital PPP forgiveness applications. As of April 9, 2021, $218.2 million of the Company's PPP loans have been granted forgiveness by the SBA.
During the first quarter of 2021, total loans, excluding PPP, declined $194.7 million as compared to December 31, 2020. This decline was a reflection of the high level of early pay-offs coupled with lower seasonally affected loan production. It is believed that this trend is temporary, and that due to the current credit resiliency of the portfolio and significant availability of liquidity, that the Company is well positioned for future loan growth.
At the end of the current quarter, 176 loans with an aggregate balance of $233.0 million remain in deferral status, of which non-accrual loans comprised $56.7 million. Currently, the vast majority 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 $1.1 billion or 8.90% of tangible assets at March 31, 2021, compared to $726.8 million or 8.51% at March 31, 2020, as a result of the equity issuance in the Revere acquisition. The year-over-year change in tangible common equity also reflects the increase in intangible assets and goodwill associated with the Revere acquisition. Excluding the impact of the PPP program from tangible assets at March 31, 2021, the tangible common equity ratio would be 9.94%. At March 31, 2021, the Company had a total risk-based capital ratio of 15.49%, a common equity tier 1 risk-based capital ratio of 12.09%, a tier 1 risk-based capital ratio of 12.09%, and a tier 1 leverage ratio of 9.14%.
The level of non-performing loans to total loans was 0.94% at March 31, 2021, compared to 0.80% at March 31, 2020, and 1.11% at December 31, 2020. At March 31, 2021, non-performing loans totaled $98.7 million, compared to $54.0 million at March 31, 2020, and $115.5 million at December 31, 2020. During the current quarter, the Company realized the full settlement of $16.0 million in non-accrual loans and recognized $1.3 million in interest income. Non-performing loans include non-accrual loans, accruing loans 90 days or more past due and restructured loans. The year-over-year growth in non-performing loans was driven by two major components: loans placed on non-accrual status and acquired Revere non-accrual loans. Loans placed on non-accrual during the current quarter amounted to $0.4 million compared to $2.4 million for the prior year quarter and $54.7 million for the fourth quarter of 2020. Loans in non-accrual status at quarter end included a small number of large borrowing relationships within the hospitality sector with an aggregate balance of $43.8 million. These large relationships are collateral dependent and required no individual reserves due to sufficient values of the underlying collateral.
The Company recorded net charge-offs of $0.3 million for the first quarter of 2021, as compared to net charge-offs of $0.5 million for both the first quarter of 2020 and fourth quarter of 2020.
At March 31, 2021, the allowance for credit losses was $130.4 million or 1.25% of outstanding loans and 132% of non-performing loans, compared to $165.4 million or 1.59% of outstanding loans and 143% of non-performing loans at December 31, 2020. Excluding PPP loans, the allowance for credit losses to outstanding loans was 1.43% and 1.77%, at March 31, 2021 and December 31, 2020, respectively.
Income Statement Review
Quarterly Results
Net interest income for the first quarter of 2021 increased 63% compared to the first quarter of 2020, driven primarily by the acquisition of Revere. The PPP program contributed $10.9 million to net interest income for the quarter, of which $7.9 million represented PPP fees. The net interest margin for the first quarter of 2021 was 3.56% as compared to 3.29% for the same quarter of the prior year. Excluding the net $2.9 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current quarter would have been 3.46% compared to the adjusted net interest margin of 3.27% for the first quarter of 2020.
The provision for credit losses was a credit of $34.7 million for the first quarter of 2021, compared to a charge of $24.5 million for the first quarter of 2020, and a credit of $4.5 million for the fourth quarter of 2020. The significant credit in the current quarter’s provision for credit losses, compared to the prior quarter's credit to the provision, reflects the impact of the improvement in the most recent forecasted unemployment rate. Other economic metrics and factors also contributed to benefit the current quarter's credit to the provision, which were partially offset by qualitative factors applied in the determination of the allowance.
Non-interest income increased $10.7 million or 59% during the current quarter compared to the same quarter of the prior year. Income from mortgage banking activities increased by $7.1 million during the current quarter compared to the prior year quarter. Mortgage banking income declined to $10.2 million for the three months ended March 31, 2021 compared to $14.5 million for the previous quarter as a result of decreasing margins on mortgages sold during the quarter. Additionally, wealth management income increased $1.8 million as a result of the first quarter 2020 acquisition of RPJ. During the quarter, other non-interest income increased $2.1 million compared to the same quarter of last year due to income from loan pay-off activity. The growth of these three categories of non-interest income more than compensated for the decline in service fee income from the prior year quarter.
Non-interest expense increased 43% or $20.4 million compared to the prior year quarter. The current quarter's results contained prepayment penalties of $9.1 million from the early redemption of $279.0 million of FHLB advances with an average rate of 2.63%. Excluding the impact of the prepayment penalties and merger and acquisition expense, non-interest expense grew 27% year-over-year primarily as a result of the compensation and operational costs relating to the 2020 Revere and RPJ acquisitions, in addition to an increase in FDIC insurance and the amortization of intangible assets.
The effective tax rate for the current quarter was significantly higher compared to the prior year quarter. The first quarter of 2020 included the impact of a tax provision contained in the Coronavirus Aid, Relief, and Economic Security Act that expanded the time permitted to utilize previous net operating losses. The Company applied this change in conjunction with 2018 acquisition of WashingtonFirst Bankshares, Inc. to realize a tax benefit of $1.8 million in the prior year quarter.
The non-GAAP efficiency ratio was 42.65% for the current quarter as compared to 54.76% for the first quarter of 2020, and 45.09% for the fourth quarter of 2020. The decrease in the efficiency ratio (reflecting an increase in efficiency) from the first quarter of last year to the current year quarter was the result of the $50.9 million growth in non-GAAP revenue outpacing the $11.6 million 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 is non-GAAP in that it 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, in each case net of tax.
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 first 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 May 6, 2021. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10153566.
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 length of time that the pandemic continues, the imposition or re-imposition of stay-at-home orders and restrictions on business activities or travel; the effect of the pandemic on the general economy and on the businesses of our borrowers and their ability to make payments on their obligations; the remedial actions and stimulus measures adopted by federal, state and local governments; the inability of employees to work due to illness, quarantine, or government mandates; 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 March 31, | % Change | |||||||||||||||||||
(Dollars in thousands, except per share data) | 2021 | 2020 | ||||||||||||||||||
| Results of operations: | ||||||||||||||||||||
| Net interest income | $ | 104,600 | $ | 64,334 | 63 | % | ||||||||||||||
| Provision/ (credit) for credit losses | (34,708) | 24,469 | n/m | |||||||||||||||||
| Non-interest income | 28,866 | 18,168 | 59 | |||||||||||||||||
| Non-interest expense | 68,173 | 47,746 | 43 | |||||||||||||||||
| Income before income tax expense | 100,001 | 10,287 | 872 | |||||||||||||||||
| Net income | 75,464 | 9,987 | 656 | |||||||||||||||||
| Net income attributable to common shareholders | $ | 74,824 | $ | 9,919 | 654 | |||||||||||||||
Pre-tax pre-provision pre-merger income (1) | $ | 65,338 | $ | 36,210 | 80 | |||||||||||||||
| Return on average assets | 2.39 | % | 0.46 | % | ||||||||||||||||
| Return on average common equity | 20.72 | % | 3.55 | % | ||||||||||||||||
| Return on average tangible common equity | 28.47 | % | 5.34 | % | ||||||||||||||||
| Net interest margin | 3.56 | % | 3.29 | % | ||||||||||||||||
Efficiency ratio - GAAP basis (2) | 51.08 | % | 57.87 | % | ||||||||||||||||
Efficiency ratio - Non-GAAP basis (2) | 42.65 | % | 54.76 | % | ||||||||||||||||
Per share data: | ||||||||||||||||||||
| Basic net income per common share | $ | 1.59 | $ | 0.29 | 448 | % | ||||||||||||||
| Diluted net income per common share | $ | 1.58 | $ | 0.28 | 464 | |||||||||||||||
| Weighted average diluted common shares | 47,415,060 | 34,743,623 | 36 | |||||||||||||||||
| Dividends declared per share | $ | 0.32 | $ | 0.30 | 7 | |||||||||||||||
| Book value per common share | $ | 32.04 | $ | 32.68 | (2) | |||||||||||||||
Tangible book value per common share (1) | $ | 23.54 | $ | 21.27 | 11 | |||||||||||||||
| Outstanding common shares | 47,187,389 | 34,164,672 | 38 | |||||||||||||||||
Financial condition at period-end: | ||||||||||||||||||||
| Investment securities | $ | 1,472,727 | $ | 1,250,560 | 18 | % | ||||||||||||||
| Loans | 10,446,866 | 6,722,992 | 55 | |||||||||||||||||
| Interest-earning assets | 12,132,405 | 8,222,589 | 48 | |||||||||||||||||
| Assets | 12,873,366 | 8,929,602 | 44 | |||||||||||||||||
| Deposits | 10,677,752 | 6,593,874 | 62 | |||||||||||||||||
| Interest-bearing liabilities | 7,423,262 | 5,732,349 | 29 | |||||||||||||||||
| Stockholders' equity | 1,511,694 | 1,116,334 | 35 | |||||||||||||||||
| Capital ratios: | ||||||||||||||||||||
Tier 1 leverage (3) | 9.14 | % | 8.78 | % | ||||||||||||||||
Common equity tier 1 capital to risk-weighted assets (3) | 12.09 | % | 10.23 | % | ||||||||||||||||
Tier 1 capital to risk-weighted assets (3) | 12.09 | % | 10.23 | % | ||||||||||||||||
Total regulatory capital to risk-weighted assets (3) | 15.49 | % | 14.09 | % | ||||||||||||||||
Tangible common equity to tangible assets (4) | 8.90 | % | 8.51 | % | ||||||||||||||||
| Average equity to average assets | 11.54 | % | 12.99 | % | ||||||||||||||||
| Credit quality ratios: | ||||||||||||||||||||
| Allowance for credit losses to loans | 1.25 | % | 1.28 | % | ||||||||||||||||
| Non-performing loans to total loans | 0.94 | % | 0.80 | % | ||||||||||||||||
| Non-performing assets to total assets | 0.78 | % | 0.62 | % | ||||||||||||||||
| Allowance for credit losses to non-performing loans | 132.08 | % | 159.02 | % | ||||||||||||||||
Annualized net charge-offs to average loans (5) | 0.01 | % | 0.03 | % | ||||||||||||||||
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 March 31, 2021.
(4)The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets. See the Reconciliation Table included with these Financial Highlights.
(5)Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
| Three Months Ended March 31, | ||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | ||||||||||||
| Pre-tax pre-provision pre-merger income: | ||||||||||||||
| Net income | $ | 75,464 | $ | 9,987 | ||||||||||
| Plus/ (less) non-GAAP adjustments: | ||||||||||||||
| Merger and acquisition expense | 45 | 1,454 | ||||||||||||
| Income tax expense | 24,537 | 300 | ||||||||||||
| Provision/ (credit) for credit losses | (34,708) | 24,469 | ||||||||||||
| Pre-tax pre-provision pre-merger income | $ | 65,338 | $ | 36,210 | ||||||||||
Efficiency ratio (GAAP): | ||||||||||||||
| Non-interest expense | $ | 68,173 | $ | 47,746 | ||||||||||
| Net interest income plus non-interest income | $ | 133,466 | $ | 82,502 | ||||||||||
| Efficiency ratio (GAAP) | 51.08 | % | 57.87 | % | ||||||||||
| Efficiency ratio (Non-GAAP): | ||||||||||||||
| Non-interest expense | $ | 68,173 | $ | 47,746 | ||||||||||
| Less non-GAAP adjustments: | ||||||||||||||
| Amortization of intangible assets | 1,697 | 600 | ||||||||||||
| Loss on FHLB redemption | 9,117 | — | ||||||||||||
| Merger and acquisition expense | 45 | 1,454 | ||||||||||||
| Non-interest expense - as adjusted | $ | 57,314 | $ | 45,692 | ||||||||||
Net interest income plus non-interest income | $ | 133,466 | $ | 82,502 | ||||||||||
| Plus non-GAAP adjustment: | ||||||||||||||
| Tax-equivalent income | 980 | 1,108 | ||||||||||||
| Less non-GAAP adjustment: | ||||||||||||||
| Investment securities gains | 58 | 169 | ||||||||||||
| Net interest income plus non-interest income - as adjusted | $ | 134,388 | $ | 83,441 | ||||||||||
Efficiency ratio (Non-GAAP) | 42.65 | % | 54.76 | % | ||||||||||
| Tangible common equity ratio: | ||||||||||||||
| Total stockholders' equity | $ | 1,511,694 | $ | 1,116,334 | ||||||||||
| Goodwill | (370,223) | (369,708) | ||||||||||||
| Other intangible assets, net | (30,824) | (19,781) | ||||||||||||
| Tangible common equity | $ | 1,110,647 | $ | 726,845 | ||||||||||
Total assets | $ | 12,873,366 | $ | 8,929,602 | ||||||||||
| Goodwill | (370,223) | (369,708) | ||||||||||||
| Other intangible assets, net | (30,824) | (19,781) | ||||||||||||
| Tangible assets | $ | 12,472,319 | $ | 8,540,113 | ||||||||||
Tangible common equity ratio | 8.90 | % | 8.51 | % | ||||||||||
| Outstanding common shares | 47,187,389 | 34,164,672 | ||||||||||||
| Tangible book value per common share | $ | 23.54 | $ | 21.27 | ||||||||||
Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED (CONTINUED)
OPERATING EARNINGS - METRICS
| Three Months Ended March 31, | ||||||||||||||
| (Dollars in thousands) | 2021 | 2020 | ||||||||||||
| Core earnings (non-GAAP): | ||||||||||||||
| Net income | $ | 75,464 | $ | 9,987 | ||||||||||
| Plus/ (less) non-GAAP adjustments (net of tax): | ||||||||||||||
| Provision/ (credit) for credit losses | (25,857) | 18,242 | ||||||||||||
| Provision/ (credit) for credit losses on unfunded loan commitments | (705) | — | ||||||||||||
| Merger and acquisition expense | 34 | 1,084 | ||||||||||||
| Amortization of intangible assets | 1,264 | 447 | ||||||||||||
| Loss on FHLB redemption | 6,792 | — | ||||||||||||
| Investment securities gains | (43) | (126) | ||||||||||||
| Core earnings (Non-GAAP) | $ | 56,949 | $ | 29,634 | ||||||||||
Core earnings per common share (non-GAAP): | ||||||||||||||
| Weighted average common shares outstanding - diluted (GAAP) | 47,415,060 | 34,743,623 | ||||||||||||
| Earnings per diluted common share (GAAP) | $ | 1.58 | $ | 0.28 | ||||||||||
| Core earnings per diluted common share (non-GAAP) | $ | 1.20 | $ | 0.85 | ||||||||||
| Core return on average assets (non-GAAP): | ||||||||||||||
| Average assets (GAAP) | $ | 12,801,539 | $ | 8,699,342 | ||||||||||
Return on average assets (GAAP) | 2.39 | % | 0.46 | % | ||||||||||
| Core return on average assets (non-GAAP) | 1.80 | % | 1.37 | % | ||||||||||
| Core return on average tangible common equity (non-GAAP): | ||||||||||||||
| Average total stockholders' equity (GAAP) | $ | 1,477,150 | $ | 1,130,051 | ||||||||||
| Average goodwill | (370,223) | (366,044) | ||||||||||||
| Average other intangible assets, net | (31,896) | (11,810) | ||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,075,031 | $ | 752,197 | ||||||||||
Return on average tangible common equity (GAAP) | 28.47 | % | 5.34 | % | ||||||||||
| Core return on average tangible common equity (non-GAAP) | 21.48 | % | 15.85 | % | ||||||||||
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
| (Dollars in thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||||||||
Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 100,739 | $ | 93,651 | $ | 79,185 | ||||||||||||||
| Federal funds sold | 285 | 291 | 131 | |||||||||||||||||
| Interest-bearing deposits with banks | 127,597 | 203,061 | 181,792 | |||||||||||||||||
| Cash and cash equivalents | 228,621 | 297,003 | 261,108 | |||||||||||||||||
| Residential mortgage loans held for sale (at fair value) | 84,930 | 78,294 | 67,114 | |||||||||||||||||
| Investments available-for-sale (at fair value) | 1,427,880 | 1,348,021 | 1,187,607 | |||||||||||||||||
| Other equity securities | 44,847 | 65,760 | 62,953 | |||||||||||||||||
| Total loans | 10,446,866 | 10,400,509 | 6,722,992 | |||||||||||||||||
| Less: allowance for credit losses | (130,361) | (165,367) | (85,800) | |||||||||||||||||
| Net loans | 10,316,505 | 10,235,142 | 6,637,192 | |||||||||||||||||
| Premises and equipment, net | 55,361 | 57,720 | 57,617 | |||||||||||||||||
| Other real estate owned | 1,354 | 1,455 | 1,416 | |||||||||||||||||
| Accrued interest receivable | 44,559 | 46,431 | 23,870 | |||||||||||||||||
| Goodwill | 370,223 | 370,223 | 369,708 | |||||||||||||||||
| Other intangible assets, net | 30,824 | 32,521 | 19,781 | |||||||||||||||||
| Other assets | 268,262 | 265,859 | 241,236 | |||||||||||||||||
| Total assets | $ | 12,873,366 | $ | 12,798,429 | $ | 8,929,602 | ||||||||||||||
Liabilities | ||||||||||||||||||||
Noninterest-bearing deposits | $ | 3,770,852 | $ | 3,325,547 | $ | 1,939,937 | ||||||||||||||
| Interest-bearing deposits | 6,906,900 | 6,707,522 | 4,653,937 | |||||||||||||||||
| Total deposits | 10,677,752 | 10,033,069 | 6,593,874 | |||||||||||||||||
| Securities sold under retail repurchase agreements and federal funds purchased | 189,318 | 543,157 | 125,305 | |||||||||||||||||
| Advances from FHLB | 100,000 | 379,075 | 754,061 | |||||||||||||||||
| Subordinated debt | 227,044 | 227,088 | 199,046 | |||||||||||||||||
| Total borrowings | 516,362 | 1,149,320 | 1,078,412 | |||||||||||||||||
| Accrued interest payable and other liabilities | 167,558 | 146,085 | 140,982 | |||||||||||||||||
| Total liabilities | 11,361,672 | 11,328,474 | 7,813,268 | |||||||||||||||||
Stockholders' equity | ||||||||||||||||||||
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 47,187,389, 47,056,777 and 34,164,672 at March 31, 2021, December 31, 2020 and March 31, 2020, respectively | 47,187 | 47,057 | 34,165 | |||||||||||||||||
| Additional paid in capital | 849,606 | 846,922 | 562,891 | |||||||||||||||||
| Retained earnings | 617,553 | 557,271 | 512,934 | |||||||||||||||||
| Accumulated other comprehensive income/ (loss) | (2,652) | 18,705 | 6,344 | |||||||||||||||||
| Total stockholders' equity | 1,511,694 | 1,469,955 | 1,116,334 | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | 12,873,366 | $ | 12,798,429 | $ | 8,929,602 | ||||||||||||||
Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
| Three Months Ended March 31, | ||||||||||||||
| (Dollars in thousands, except per share data) | 2021 | 2020 | ||||||||||||
| Interest income: | ||||||||||||||
| Interest and fees on loans | $ | 107,428 | $ | 75,882 | ||||||||||
| Interest on loans held for sale | 537 | 291 | ||||||||||||
| Interest on deposits with banks | 46 | 180 | ||||||||||||
| Interest and dividends on investment securities: | ||||||||||||||
| Taxable | 3,899 | 6,132 | ||||||||||||
| Tax-advantaged | 2,351 | 1,372 | ||||||||||||
| Interest on federal funds sold | — | 1 | ||||||||||||
| Total interest income | 114,261 | 83,858 | ||||||||||||
| Interest Expense: | ||||||||||||||
| Interest on deposits | 4,830 | 13,518 | ||||||||||||
Interest on retail repurchase agreements and federal funds purchased | 53 | 580 | ||||||||||||
| Interest on advances from FHLB | 2,276 | 3,145 | ||||||||||||
| Interest on subordinated debt | 2,502 | 2,281 | ||||||||||||
| Total interest expense | 9,661 | 19,524 | ||||||||||||
| Net interest income | 104,600 | 64,334 | ||||||||||||
| Provision/ (credit) for credit losses | (34,708) | 24,469 | ||||||||||||
| Net interest income after provision/ (credit) for credit losses | 139,308 | 39,865 | ||||||||||||
| Non-interest income: | ||||||||||||||
| Investment securities gains | 58 | 169 | ||||||||||||
| Service charges on deposit accounts | 1,852 | 2,253 | ||||||||||||
| Mortgage banking activities | 10,169 | 3,033 | ||||||||||||
| Wealth management income | 8,730 | 6,966 | ||||||||||||
| Insurance agency commissions | 2,153 | 2,129 | ||||||||||||
| Income from bank owned life insurance | 680 | 645 | ||||||||||||
| Bank card fees | 1,518 | 1,320 | ||||||||||||
| Other income | 3,706 | 1,653 | ||||||||||||
| Total non-interest income | 28,866 | 18,168 | ||||||||||||
| Non-interest expense: | ||||||||||||||
| Salaries and employee benefits | 36,652 | 28,053 | ||||||||||||
| Occupancy expense of premises | 5,487 | 4,581 | ||||||||||||
| Equipment expenses | 3,222 | 2,751 | ||||||||||||
| Marketing | 1,212 | 1,189 | ||||||||||||
| Outside data services | 2,283 | 1,582 | ||||||||||||
| FDIC insurance | 1,492 | 482 | ||||||||||||
| Amortization of intangible assets | 1,697 | 600 | ||||||||||||
| Merger and acquisition expense | 45 | 1,454 | ||||||||||||
| Professional fees and services | 1,731 | 1,826 | ||||||||||||
| Other expenses | 14,352 | 5,228 | ||||||||||||
| Total non-interest expense | 68,173 | 47,746 | ||||||||||||
| Income before income tax expense | 100,001 | 10,287 | ||||||||||||
| Income tax expense | 24,537 | 300 | ||||||||||||
| Net income | $ | 75,464 | $ | 9,987 | ||||||||||
| Net income per share amounts: | ||||||||||||||
| Basic net income per common share | $ | 1.59 | $ | 0.29 | ||||||||||
| Diluted net income per common share | $ | 1.58 | $ | 0.28 | ||||||||||
| Dividends declared per share | $ | 0.32 | $ | 0.30 | ||||||||||
Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||||||||
| Profitability for the quarter: | ||||||||||||||||||||||||||||||||
Tax-equivalent interest income | $ | 115,241 | $ | 112,843 | $ | 113,627 | $ | 116,252 | $ | 84,966 | ||||||||||||||||||||||
Interest expense | 9,661 | 11,964 | 15,500 | 13,413 | 19,524 | |||||||||||||||||||||||||||
| Tax-equivalent net interest income | 105,580 | 100,879 | 98,127 | 102,839 | 65,442 | |||||||||||||||||||||||||||
Tax-equivalent adjustment | 980 | 1,052 | 643 | 1,325 | 1,108 | |||||||||||||||||||||||||||
| Provision/ (credit) for credit losses | (34,708) | (4,489) | 7,003 | 58,686 | 24,469 | |||||||||||||||||||||||||||
Non-interest income | 28,866 | 32,234 | 29,390 | 22,924 | 18,168 | |||||||||||||||||||||||||||
Non-interest expense | 68,173 | 61,661 | 60,937 | 85,438 | 47,746 | |||||||||||||||||||||||||||
| Income/ (loss) before income tax expense/ (benefit) | 100,001 | 74,889 | 58,934 | (19,686) | 10,287 | |||||||||||||||||||||||||||
| Income tax expense/ (benefit) | 24,537 | 18,227 | 14,292 | (5,348) | 300 | |||||||||||||||||||||||||||
| Net income/ (loss) | $ | 75,464 | $ | 56,662 | $ | 44,642 | $ | (14,338) | $ | 9,987 | ||||||||||||||||||||||
| Financial performance: | ||||||||||||||||||||||||||||||||
| Pre-tax pre-provision pre-merger income | $ | 65,338 | $ | 70,403 | $ | 67,200 | $ | 61,454 | $ | 36,210 | ||||||||||||||||||||||
| Return on average assets | 2.39 | % | 1.78 | % | 1.38 | % | (0.45) | % | 0.46 | % | ||||||||||||||||||||||
| Return on average common equity | 20.72 | % | 15.72 | % | 12.67 | % | (4.15) | % | 3.55 | % | ||||||||||||||||||||||
| Return on average tangible common equity | 28.47 | % | 21.89 | % | 17.84 | % | (5.80) | % | 5.34 | % | ||||||||||||||||||||||
| Net interest margin | 3.56 | % | 3.38 | % | 3.24 | % | 3.47 | % | 3.29 | % | ||||||||||||||||||||||
Efficiency ratio - GAAP basis (1) | 51.08 | % | 46.69 | % | 48.03 | % | 68.66 | % | 57.87 | % | ||||||||||||||||||||||
Efficiency ratio - Non-GAAP basis (1) | 42.65 | % | 45.09 | % | 45.27 | % | 43.85 | % | 54.76 | % | ||||||||||||||||||||||
| Per share data: | ||||||||||||||||||||||||||||||||
| Net income/ (loss) attributable to common shareholders | $ | 74,824 | $ | 56,194 | $ | 44,268 | $ | (14,458) | $ | 9,919 | ||||||||||||||||||||||
| Basic net income/ (loss) per common share | $ | 1.59 | $ | 1.19 | $ | 0.94 | $ | (0.31) | $ | 0.29 | ||||||||||||||||||||||
| Diluted net income/ (loss) per common share | $ | 1.58 | $ | 1.19 | $ | 0.94 | $ | (0.31) | $ | 0.28 | ||||||||||||||||||||||
| Weighted average diluted common shares | 47,415,060 | 47,284,808 | 47,175,071 | 46,988,351 | 34,743,623 | |||||||||||||||||||||||||||
| Dividends declared per share | $ | 0.32 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | ||||||||||||||||||||||
| Non-interest income: | ||||||||||||||||||||||||||||||||
| Securities gains | $ | 58 | $ | 35 | $ | 51 | $ | 212 | $ | 169 | ||||||||||||||||||||||
| Service charges on deposit accounts | 1,852 | 1,917 | 1,673 | 1,223 | 2,253 | |||||||||||||||||||||||||||
| Mortgage banking activities | 10,169 | 14,491 | 14,108 | 8,426 | 3,033 | |||||||||||||||||||||||||||
| Wealth management income | 8,730 | 8,215 | 7,785 | 7,604 | 6,966 | |||||||||||||||||||||||||||
| Insurance agency commissions | 2,153 | 1,356 | 2,122 | 1,188 | 2,129 | |||||||||||||||||||||||||||
| Income from bank owned life insurance | 680 | 705 | 708 | 809 | 645 | |||||||||||||||||||||||||||
| Bank card fees | 1,518 | 1,570 | 1,525 | 1,257 | 1,320 | |||||||||||||||||||||||||||
| Other income | 3,706 | 3,945 | 1,418 | 2,205 | 1,653 | |||||||||||||||||||||||||||
| Total non-interest income | $ | 28,866 | $ | 32,234 | $ | 29,390 | $ | 22,924 | $ | 18,168 | ||||||||||||||||||||||
| Non-interest expense: | ||||||||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 36,652 | $ | 36,080 | $ | 36,041 | $ | 34,297 | $ | 28,053 | ||||||||||||||||||||||
| Occupancy expense of premises | 5,487 | 5,236 | 5,575 | 5,991 | 4,581 | |||||||||||||||||||||||||||
| Equipment expenses | 3,222 | 3,121 | 3,133 | 3,219 | 2,751 | |||||||||||||||||||||||||||
| Marketing | 1,212 | 1,058 | 1,305 | 729 | 1,189 | |||||||||||||||||||||||||||
| Outside data services | 2,283 | 2,394 | 2,614 | 2,169 | 1,582 | |||||||||||||||||||||||||||
| FDIC insurance | 1,492 | 1,527 | 1,340 | 1,378 | 482 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 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 | 1,731 | 2,473 | 1,800 | 1,840 | 1,826 | |||||||||||||||||||||||||||
| Other expenses | 14,352 | 8,114 | 5,898 | 11,363 | 5,228 | |||||||||||||||||||||||||||
| Total non-interest expense | $ | 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) | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||||||||
| Balance sheets at quarter end: | ||||||||||||||||||||||||||||||||
| Commercial investor real estate loans | $ | 3,652,418 | $ | 3,634,720 | $ | 3,588,702 | $ | 3,581,778 | $ | 2,241,240 | ||||||||||||||||||||||
| Commercial owner-occupied real estate loans | 1,644,848 | 1,642,216 | 1,652,208 | 1,601,803 | 1,305,682 | |||||||||||||||||||||||||||
| Commercial AD&C loans | 1,051,013 | 1,050,973 | 994,800 | 997,423 | 643,114 | |||||||||||||||||||||||||||
| Commercial business loans | 2,411,109 | 2,267,548 | 2,227,246 | 2,222,810 | 813,525 | |||||||||||||||||||||||||||
| Residential mortgage loans | 1,022,546 | 1,105,179 | 1,173,857 | 1,211,745 | 1,116,512 | |||||||||||||||||||||||||||
| Residential construction loans | 171,028 | 182,619 | 175,123 | 169,050 | 149,573 | |||||||||||||||||||||||||||
| Consumer loans | 493,904 | 517,254 | 521,999 | 558,434 | 453,346 | |||||||||||||||||||||||||||
| Total loans | 10,446,866 | 10,400,509 | 10,333,935 | 10,343,043 | 6,722,992 | |||||||||||||||||||||||||||
| Allowance for credit losses | (130,361) | (165,367) | (170,314) | (163,481) | (85,800) | |||||||||||||||||||||||||||
| Loans held for sale | 84,930 | 78,294 | 88,728 | 68,765 | 67,114 | |||||||||||||||||||||||||||
| Investment securities | 1,472,727 | 1,413,781 | 1,425,733 | 1,424,652 | 1,250,560 | |||||||||||||||||||||||||||
| Interest-earning assets | 12,132,405 | 12,095,936 | 11,965,915 | 12,447,146 | 8,222,589 | |||||||||||||||||||||||||||
| Total assets | 12,873,366 | 12,798,429 | 12,678,131 | 13,290,447 | 8,929,602 | |||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 3,770,852 | 3,325,547 | 3,458,804 | 3,434,038 | 1,939,937 | |||||||||||||||||||||||||||
| Total deposits | 10,677,752 | 10,033,069 | 9,964,969 | 10,076,834 | 6,593,874 | |||||||||||||||||||||||||||
| Customer repurchase agreements | 129,318 | 153,157 | 142,287 | 143,579 | 125,305 | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 7,423,262 | 7,856,842 | 7,643,381 | 8,313,546 | 5,732,349 | |||||||||||||||||||||||||||
| Total stockholders' equity | 1,511,694 | 1,469,955 | 1,424,749 | 1,390,093 | 1,116,334 | |||||||||||||||||||||||||||
| Quarterly average balance sheets: | ||||||||||||||||||||||||||||||||
| Commercial investor real estate loans | $ | 3,634,174 | $ | 3,599,648 | $ | 3,582,751 | $ | 3,448,882 | $ | 2,202,461 | ||||||||||||||||||||||
| Commercial owner-occupied real estate loans | 1,638,885 | 1,643,817 | 1,628,474 | 1,681,674 | 1,285,257 | |||||||||||||||||||||||||||
| Commercial AD&C loans | 1,049,597 | 1,017,304 | 977,607 | 969,251 | 659,494 | |||||||||||||||||||||||||||
| Commercial business loans | 2,291,097 | 2,189,828 | 2,207,388 | 1,899,264 | 819,133 | |||||||||||||||||||||||||||
| Residential mortgage loans | 1,066,714 | 1,136,989 | 1,189,452 | 1,208,566 | 1,139,786 | |||||||||||||||||||||||||||
| Residential construction loans | 179,925 | 180,494 | 173,280 | 162,978 | 145,266 | |||||||||||||||||||||||||||
| Consumer loans | 496,578 | 515,202 | 543,242 | 575,734 | 465,314 | |||||||||||||||||||||||||||
| Total loans | 10,356,970 | 10,283,282 | 10,302,194 | 9,946,349 | 6,716,711 | |||||||||||||||||||||||||||
| Loans held for sale | 82,263 | 68,255 | 54,784 | 53,312 | 35,030 | |||||||||||||||||||||||||||
| Investment securities | 1,407,455 | 1,418,683 | 1,404,238 | 1,398,586 | 1,179,084 | |||||||||||||||||||||||||||
| Interest-earning assets | 12,029,424 | 11,882,542 | 12,049,463 | 11,921,132 | 7,994,618 | |||||||||||||||||||||||||||
| Total assets | 12,801,539 | 12,645,329 | 12,835,893 | 12,903,156 | 8,699,342 | |||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 3,394,110 | 3,424,729 | 3,281,607 | 3,007,222 | 1,797,227 | |||||||||||||||||||||||||||
| Total deposits | 10,343,190 | 9,999,144 | 9,862,639 | 9,614,176 | 6,433,694 | |||||||||||||||||||||||||||
| Customer repurchase agreements | 148,195 | 146,685 | 142,694 | 144,050 | 135,652 | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 7,742,987 | 7,609,829 | 7,969,487 | 8,326,909 | 5,612,056 | |||||||||||||||||||||||||||
| Total stockholders' equity | 1,477,150 | 1,433,900 | 1,401,746 | 1,390,544 | 1,130,051 | |||||||||||||||||||||||||||
| Financial measures: | ||||||||||||||||||||||||||||||||
| Average equity to average assets | 11.54 | % | 11.34 | % | 10.92 | % | 10.78 | % | 12.99 | % | ||||||||||||||||||||||
| Investment securities to earning assets | 12.14 | % | 11.69 | % | 11.91 | % | 11.45 | % | 15.21 | % | ||||||||||||||||||||||
| Loans to earning assets | 86.11 | % | 85.98 | % | 86.36 | % | 83.10 | % | 81.76 | % | ||||||||||||||||||||||
| Loans to assets | 81.15 | % | 81.26 | % | 81.51 | % | 77.82 | % | 75.29 | % | ||||||||||||||||||||||
| Loans to deposits | 97.84 | % | 103.66 | % | 103.70 | % | 102.64 | % | 101.96 | % | ||||||||||||||||||||||
| Capital measures: | ||||||||||||||||||||||||||||||||
Tier 1 leverage (1) | 9.14 | % | 8.92 | % | 8.65 | % | 8.35 | % | 8.78 | % | ||||||||||||||||||||||
Common equity tier 1 capital to risk-weighted assets (1) | 12.09 | % | 10.58 | % | 10.45 | % | 10.23 | % | 10.23 | % | ||||||||||||||||||||||
Tier 1 capital to risk-weighted assets (1) | 12.09 | % | 10.58 | % | 10.45 | % | 10.23 | % | 10.23 | % | ||||||||||||||||||||||
Total regulatory capital to risk-weighted assets (1) | 15.49 | % | 13.93 | % | 14.02 | % | 13.79 | % | 14.09 | % | ||||||||||||||||||||||
| Book value per common share | $ | 32.04 | $ | 31.24 | $ | 30.30 | $ | 29.58 | $ | 32.68 | ||||||||||||||||||||||
Outstanding common shares | 47,187,389 | 47,056,777 | 47,025,779 | 47,001,022 | 34,164,672 | |||||||||||||||||||||||||||
(1) Estimated ratio at March 31, 2021.
Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| (Dollars in thousands) | 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 | 398 | 480 | 320 | 138 | 8 | |||||||||||||||||||||||||||
| Residential construction | — | — | — | — | — | |||||||||||||||||||||||||||
| Consumer | — | — | 1 | — | — | |||||||||||||||||||||||||||
Total loans 90 days past due | 429 | 774 | 414 | 1,428 | 8 | |||||||||||||||||||||||||||
| Non-accrual loans: | ||||||||||||||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||||||
| Commercial investor real estate | 42,776 | 45,227 | 26,784 | 26,482 | 17,770 | |||||||||||||||||||||||||||
| Commercial owner-occupied real estate | 8,316 | 11,561 | 6,511 | 6,729 | 4,074 | |||||||||||||||||||||||||||
| Commercial AD&C | 14,975 | 15,044 | 1,678 | 2,957 | 829 | |||||||||||||||||||||||||||
| Commercial business | 13,147 | 22,933 | 17,659 | 20,246 | 10,834 | |||||||||||||||||||||||||||
| Residential real estate: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 9,593 | 10,212 | 11,296 | 11,724 | 12,271 | |||||||||||||||||||||||||||
| Residential construction | — | — | — | — | — | |||||||||||||||||||||||||||
| Consumer | 7,193 | 7,384 | 7,493 | 7,800 | 5,596 | |||||||||||||||||||||||||||
| Total non-accrual loans | 96,000 | 112,361 | 71,421 | 75,938 | 51,374 | |||||||||||||||||||||||||||
| Total restructured loans - accruing | 2,271 | 2,317 | 2,854 | 2,553 | 2,575 | |||||||||||||||||||||||||||
| Total non-performing loans | 98,700 | 115,452 | 74,689 | 79,919 | 53,957 | |||||||||||||||||||||||||||
| Other assets and other real estate owned (OREO) | 1,354 | 1,455 | 1,389 | 1,389 | 1,416 | |||||||||||||||||||||||||||
| Total non-performing assets | $ | 100,054 | $ | 116,907 | $ | 76,078 | $ | 81,308 | $ | 55,373 | ||||||||||||||||||||||
| For the Quarter Ended, | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | 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 | $ | 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 | — | (70) | — | — | — | |||||||||||||||||||||||||||
| Non-accrual balances charged-off | (699) | (513) | (144) | (162) | (575) | |||||||||||||||||||||||||||
| Net payments or draws | (16,028) | (13,212) | (4,248) | (1,881) | (1,860) | |||||||||||||||||||||||||||
| Loans placed on non-accrual | 421 | 54,735 | 893 | 27,289 | 2,369 | |||||||||||||||||||||||||||
| Non-accrual loans brought current | (55) | — | (1,018) | (682) | (276) | |||||||||||||||||||||||||||
| Balance at end of period | $ | 96,000 | $ | 112,361 | $ | 71,421 | $ | 75,938 | $ | 51,374 | ||||||||||||||||||||||
Analysis of allowance for credit losses: | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 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 | (34,708) | (4,489) | 7,003 | 58,686 | 24,469 | |||||||||||||||||||||||||||
| Less loans charged-off, net of recoveries: | ||||||||||||||||||||||||||||||||
| Commercial real estate: | ||||||||||||||||||||||||||||||||
| Commercial investor real estate | (27) | 379 | 21 | (4) | — | |||||||||||||||||||||||||||
| Commercial owner-occupied real estate | — | — | — | — | — | |||||||||||||||||||||||||||
| Commercial AD&C | — | — | — | — | — | |||||||||||||||||||||||||||
| Commercial business | 634 | 56 | 88 | (463) | 108 | |||||||||||||||||||||||||||
| Residential real estate: | ||||||||||||||||||||||||||||||||
| Residential mortgage | (270) | 37 | (6) | 15 | 333 | |||||||||||||||||||||||||||
| Residential construction | — | (1) | (2) | (1) | (2) | |||||||||||||||||||||||||||
| Consumer | (39) | (13) | 69 | 86 | 107 | |||||||||||||||||||||||||||
| Net charge-offs/ (recoveries) | 298 | 458 | 170 | (367) | 546 | |||||||||||||||||||||||||||
| Balance at the end of period | $ | 130,361 | $ | 165,367 | $ | 170,314 | $ | 163,481 | $ | 85,800 | ||||||||||||||||||||||
| Asset quality ratios: | ||||||||||||||||||||||||||||||||
| Non-performing loans to total loans | 0.94 | % | 1.11 | % | 0.72 | % | 0.77 | % | 0.80 | % | ||||||||||||||||||||||
| Non-performing assets to total assets | 0.78 | % | 0.91 | % | 0.60 | % | 0.61 | % | 0.62 | % | ||||||||||||||||||||||
| Allowance for credit losses to loans | 1.25 | % | 1.59 | % | 1.65 | % | 1.58 | % | 1.28 | % | ||||||||||||||||||||||
| Allowance for credit losses to non-performing loans | 132.08 | % | 143.23 | % | 228.03 | % | 204.56 | % | 159.02 | % | ||||||||||||||||||||||
| Annualized net charge-offs/ (recoveries) to average loans | 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 March 31, | ||||||||||||||||||||||||||||||||||||||
| 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 | $ | 3,634,174 | $ | 38,354 | 4.28 | % | $ | 2,202,461 | $ | 25,265 | 4.61 | % | ||||||||||||||||||||||||||
| Commercial owner-occupied real estate loans | 1,638,885 | 18,680 | 4.62 | 1,285,257 | 15,206 | 4.76 | ||||||||||||||||||||||||||||||||
| Commercial AD&C loans | 1,049,597 | 10,396 | 4.02 | 659,494 | 8,329 | 5.08 | ||||||||||||||||||||||||||||||||
| Commercial business loans | 2,291,097 | 24,794 | 4.39 | 819,133 | 10,177 | 5.00 | ||||||||||||||||||||||||||||||||
| Total commercial loans | 8,613,753 | 92,224 | 4.34 | 4,966,345 | 58,977 | 4.78 | ||||||||||||||||||||||||||||||||
| Residential mortgage loans | 1,066,714 | 9,544 | 3.58 | 1,139,786 | 10,741 | 3.77 | ||||||||||||||||||||||||||||||||
| Residential construction loans | 179,925 | 1,606 | 3.62 | 145,266 | 1,561 | 4.32 | ||||||||||||||||||||||||||||||||
| Consumer loans | 496,578 | 4,545 | 3.71 | 465,314 | 5,156 | 4.46 | ||||||||||||||||||||||||||||||||
| Total residential and consumer loans | 1,743,217 | 15,695 | 3.62 | 1,750,366 | 17,458 | 4.01 | ||||||||||||||||||||||||||||||||
Total loans (2) | 10,356,970 | 107,919 | 4.22 | 6,716,711 | 76,435 | 4.57 | ||||||||||||||||||||||||||||||||
| Loans held for sale | 82,263 | 537 | 2.61 | 35,030 | 291 | 3.32 | ||||||||||||||||||||||||||||||||
| Taxable securities | 915,625 | 3,899 | 1.70 | 972,609 | 6,322 | 2.60 | ||||||||||||||||||||||||||||||||
| Tax-advantaged securities | 491,830 | 2,840 | 2.31 | 206,475 | 1,737 | 3.37 | ||||||||||||||||||||||||||||||||
Total investment securities (3) | 1,407,455 | 6,739 | 1.92 | 1,179,084 | 8,059 | 2.73 | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits with banks | 182,095 | 46 | 0.10 | 63,533 | 180 | 1.14 | ||||||||||||||||||||||||||||||||
| Federal funds sold | 641 | — | 0.09 | 260 | 1 | 1.23 | ||||||||||||||||||||||||||||||||
| Total interest-earning assets | 12,029,424 | 115,241 | 3.88 | 7,994,618 | 84,966 | 4.27 | ||||||||||||||||||||||||||||||||
Less: allowance for credit losses | (163,229) | (61,962) | ||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 106,259 | 69,618 | ||||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 56,369 | 58,346 | ||||||||||||||||||||||||||||||||||||
| Other assets | 772,716 | 638,722 | ||||||||||||||||||||||||||||||||||||
| Total assets | $ | 12,801,539 | $ | 8,699,342 | ||||||||||||||||||||||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,365,652 | $ | 236 | 0.07 | % | $ | 840,415 | $ | 697 | 0.33 | % | ||||||||||||||||||||||||||
| Regular savings deposits | 444,296 | 56 | 0.05 | 331,119 | 73 | 0.09 | ||||||||||||||||||||||||||||||||
| Money market savings deposits | 3,410,589 | 1,463 | 0.17 | 1,848,290 | 4,650 | 1.01 | ||||||||||||||||||||||||||||||||
| Time deposits | 1,728,543 | 3,075 | 0.72 | 1,616,643 | 8,098 | 2.01 | ||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 6,949,080 | 4,830 | 0.28 | 4,636,467 | 13,518 | 1.17 | ||||||||||||||||||||||||||||||||
| Other borrowings | 189,851 | 53 | 0.11 | 236,806 | 580 | 0.99 | ||||||||||||||||||||||||||||||||
| Advances from FHLB | 376,984 | 2,276 | 2.45 | 531,989 | 3,145 | 2.38 | ||||||||||||||||||||||||||||||||
| Subordinated debt | 227,072 | 2,502 | 4.41 | 206,794 | 2,281 | 4.41 | ||||||||||||||||||||||||||||||||
| Total borrowings | 793,907 | 4,831 | 2.47 | 975,589 | 6,006 | 2.48 | ||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 7,742,987 | 9,661 | 0.50 | 5,612,056 | 19,524 | 1.40 | ||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 3,394,110 | 1,797,227 | ||||||||||||||||||||||||||||||||||||
| Other liabilities | 187,292 | 160,008 | ||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 1,477,150 | 1,130,051 | ||||||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 12,801,539 | $ | 8,699,342 | ||||||||||||||||||||||||||||||||||
Tax-equivalent net interest income and spread | $ | 105,580 | 3.38 | % | $ | 65,442 | 2.87 | % | ||||||||||||||||||||||||||||||
| Less: tax-equivalent adjustment | 980 | 1,108 | ||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 104,600 | $ | 64,334 | ||||||||||||||||||||||||||||||||||
Interest income/earning assets | 3.88 | % | 4.27 | % | ||||||||||||||||||||||||||||||||||
| Interest expense/earning assets | 0.32 | 0.98 | ||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.56 | % | 3.29 | % | ||||||||||||||||||||||||||||||||||
(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 $1.0 million and $1.1 million in 2021 and 2020, respectively.
(2)Non-accrual loans are included in the average balances.
(3)Available for sale investments are presented at amortized cost.