Sandy Spring Bancorp Reports Record Quarterly Earnings of $56.7 Million

Fourth Quarter Earnings Increase 27% over Prior Quarter and Drive Annual Net Income to $97.0 Million

OLNEY, Md., Jan. 21, 2021 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported record net income of $56.7 million ($1.19 per diluted common share) for the fourth quarter of 2020. The current quarter’s result compares to net income of $28.5 million ($0.80 per diluted common share) for the fourth quarter of 2019 and net income of $44.6 million ($0.94 per diluted common share) for the third quarter of 2020.

Operating earnings for the current quarter, which exclude the impact of the provision for credit losses, the effects from the Paycheck Protection Program (“PPP” or “PPP program”) and merger and acquisition expense, each on an after-tax basis, were $48.2 million ($1.02 per diluted common share), compared to $30.4 million ($0.85 per diluted common share) for the quarter ended December 31, 2019 and $45.8 million ($0.97 per diluted common share) for the quarter ended September 30, 2020.

The provision for credit losses for the current quarter was a credit of $4.5 million as compared to a charge of $7.0 million for the third quarter of 2020. The decrease in the provision for credit losses compared to the prior quarter is mainly the result of changes in macroeconomic factors, primarily the reduction in projected near term business bankruptcies as indicated in the most recent economic forecast.

“In 2020 we completed a significant integration of Revere Bank while navigating a global pandemic and helping our clients through unprecedented challenges. This was a massive undertaking, especially in a remote work environment, but our newly combined institutions were unified in our efforts to serve our clients and to keep people safe,” said Daniel J. Schrider, President and Chief Executive Officer. “Given our strong operating results and the resilience we demonstrated throughout the year, we remain very optimistic about our future.”

Fourth Quarter Highlights:

• Total assets at December 31, 2020, grew 48% to $12.8 billion compared to December 31, 2019, primarily as a result of the Revere Bank (“Revere”) acquisition and participation in the PPP. During the past year, loans and deposits grew by 55% and 56%, respectively. On the date of acquisition, Revere’s loans and deposits were $2.5 billion and $2.3 billion, respectively. The Company originated $1.1 billion in commercial business loans through its participation in the PPP program.
  
  
• The net interest margin was 3.38% for the fourth quarter of 2020, compared to 3.38% for the same quarter of 2019, and 3.24% for the third 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 3.31%, compared to 3.34% for fourth quarter of 2019, and 3.18% for the third quarter of 2020.
  
  
• The provision for credit losses was a credit of $4.5 million for the current quarter. The credit to the provision for the current quarter as compared to the prior quarter’s provision charge of $7.0 million is primarily the result of the reduction in forecasted business bankruptcies impacted by governmental support programs aimed at individuals and small businesses.
  
  
• Non-interest income for the current quarter increased by 68% or $13.0 million compared to the prior year quarter as a result of a 248% increase in income from mortgage banking activities and growth of 28% in wealth management income as a result of the acquisition of Rembert Pendleton Jackson (“RPJ”) in the first quarter of the current year.
  
  
• Non-interest expense increased $15.6 million or 34% for the fourth quarter of 2020 compared to the prior year quarter. This increase was driven by the impact of the acquisitions of Revere and RPJ, which increased compensation and operational costs, in addition to intangible asset amortization. FDIC insurance cost increased from the same period of the prior year as a result of the effect of the assessment credit received during the prior year quarter.
  
  
• Return on average assets (“ROA”) for the quarter ended December 31, 2020 was 1.78% and return on average tangible common equity (“ROTCE”) was 22.24%. This compares to ROA of 1.32% and ROTCE of 14.39% for the prior year. The non-GAAP efficiency ratio for the fourth quarter of 2020 was 45.09% compared to 51.98% for the fourth quarter of 2019.
  

Branch Rationalization

The Company announced its intention to close three branch locations in 2021. The affected branches are located in Northern Virginia (2) and Montgomery County (1) Maryland. Customer accounts will be consolidated into nearby locations. The changes come into effect as a part of the Company’s continuing analysis of its branch network, including usage, proximity to other Sandy Spring Bank offices and the needs of the Company’s customers. The branch closures are expected to be completed in the second quarter of 2021.

Response to COVID-19

Protecting the health and well-being of its employees and clients in addition to assisting clients who have been impacted by the pandemic remains the focus of the Company. A significant majority of non-branch employees continue to work remotely and clients are served at branches primarily through drive-thru facilities and limited lobby access. Area jurisdictions continue to monitor and modify their respective guidelines based on the metrics of the pandemic. Currently, the Company is maintaining the first phase of its return to work plan.

During the current quarter, the Company began accepting digital PPP forgiveness applications. The Company has paused extending invitations to its forgiveness application portal pending updates to reflect recent amendments to the PPP program and to focus on accepting loan applications for both first and second draw loans under the restarted program.

During 2020, the Company has granted payment modifications/deferrals on 2,575 loans with and aggregate balance of $2.1 billion of which 203 loans with an aggregate balance of $217 million remain in deferral status. Currently, the vast majority of loans that had been granted modifications/deferrals have returned to their original payment plans without a significant impact on payment delinquencies.

For additional information about the Company’s response to the pandemic, segments of the Company’s loan portfolio exposed to industries adversely impacted by the pandemic, and our response to clients who sought loan payment deferral, we have provided supplemental materials available at the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com.

Balance Sheet and Credit Quality

Total assets grew to $12.8 billion at December 31, 2020, as compared to $8.6 billion at December 31, 2019. Year-over-year asset growth was primarily the result of the acquisition of Revere during the year, as well as the Company’s participation in the PPP program. During this period, total loans grew by 55% to $10.4 billion at December 31, 2020, compared to $6.7 billion at December 31, 2019. Excluding PPP loans, total loans grew 39% to $9.3 billion at December 31, 2020 as compared to the prior year quarter. The acquisition of Revere drove the majority of the increase in commercial loans, which, excluding PPP loans, grew 52% or $2.6 billion. The residential mortgage loan portfolio remained stable year-over-year as the vast majority of loan originations during the past year were sold in the secondary market. Consumer loan growth during the year was 11%, also a result of the acquisition. Deposit growth was 56% during the past twelve months, as noninterest-bearing deposits experienced growth of 76% and interest-bearing deposits grew 47%. This growth was driven primarily by the Revere acquisition and, to a lesser extent, the PPP program.

Tangible common equity increased to $1.0 billion or 8.46% of tangible assets at December 31, 2020 compared to $782.3 million or 9.46% at December 31, 2019, as a result of the equity issuance in the Revere acquisition. The year-over-year change in tangible common equity also reflects the effects of the repurchase of $50 million of common stock and the increase in intangible assets and goodwill associated with the two acquisitions completed during the past twelve months. Excluding the impact of the PPP program from tangible assets at December 31, 2020, the tangible common equity ratio would be 9.25%.   At December 31, 2020, the Company had a total risk-based capital ratio of 13.93%, a common equity tier 1 risk-based capital ratio of 10.58%, a tier 1 risk-based capital ratio of 10.58% and a tier 1 leverage ratio of 8.92%.

The level of non-performing loans to total loans increased to 1.11% at December 31, 2020, compared to 0.62% at December 31, 2019, and 0.72% at September 30, 2020. At December 31, 2020, non-performing loans totaled $115.5 million, compared to $41.3 million at December 31, 2019, and $74.7 million at September 30, 2020. 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 three major components: loans placed in non-accrual status, acquired Revere non-accrual loans, and loans previously accounted for as purchased credit impaired loans that have been designated as non-accrual loans as a result of the Company’s adoption of the accounting standard for expected credit losses at the beginning of the year. Loans placed on non-accrual during the current quarter amounted to $54.7 million compared to $5.4 million for the prior year quarter and $0.9 million for the third quarter of 2020. Loans placed on non-accrual status during the current quarter relate primarily to a limited number of large borrowing relationships within the hospitality sector. 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 $0.5 million for the fourth quarter of 2020, as compared to net charge-offs of $0.5 million and $0.2 million for the fourth quarter of 2019 and third quarter of 2020, respectively.

At December 31, 2020, the allowance for credit losses was $165.4 million or 1.59% of outstanding loans and 143% of non-performing loans, compared to $170.3 million or 1.65% of outstanding loans and 228% of non-performing loans at September 30, 2020.

Income Statement Review

Quarterly Results

Net interest income for the fourth quarter of 2020 increased 52% compared to the fourth quarter of 2019, driven primarily by the acquisition of Revere. The PPP program and its associated funding contributed a net of $6.9 million to net interest income for the quarter. The net interest margin remained unchanged at 3.38% for the fourth quarter of 2020 as compared to the same quarter of the prior year. Excluding the net $2.3 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current quarter would have been 3.31%. This compares to the adjusted net interest margin of 3.34% for the fourth quarter of 2019.

The provision for credit losses was a credit of $4.5 million for the fourth quarter of 2020, compared to a charge of $1.7 million for the fourth quarter of 2019, and $7.0 million for the third quarter of 2020. The credit in the current quarter’s provision for credit losses, compared to the provision charge recorded in the prior quarter, is primarily the result of an improvement in the forecasted business bankruptcies indicated in the most recent economic forecast.

Non-interest income increased $13.0 million or 68% during the current quarter compared to the same quarter of the prior year. As a result of the significant decline in lending rates, mortgage origination activity for new and refinanced mortgages resulted in income from mortgage banking activities increasing by $10.3 million during the current quarter compared to the prior year quarter. In addition, wealth management income increased $1.8 million as a result of the first quarter acquisition of RPJ. The growth of these two categories in non-interest income more than compensated for the decline in service fee income compared to the prior year quarter.

Non-interest expense increased 34% or $15.6 million compared to the prior year quarter. Excluding the impact of merger and acquisition expense, non-interest expense grew 37% year-over-year, primarily as a result of the operational costs of the Revere and RPJ acquisitions, increased compensation expense related to staffing increases and incentive compensation, in addition to an increase in FDIC insurance and the amortization of intangible assets.

The non-GAAP efficiency ratio was 45.09% for the current quarter as compared to 51.98% for the fourth quarter of 2019, and 45.27% for the third quarter of 2020. The decrease in the efficiency ratio (reflecting an increase in efficiency) from the fourth quarter of last year to the current year was the result of the $47.2 million growth in non-GAAP revenue outpacing the $15.4 million growth in non-GAAP non-interest expense.

Year to Date Results

The Company recorded net income of $97.0 million for the year ended December 31, 2020 compared to $116.4 million for the prior year, representing a 17% decrease. The net earnings for the current year included the effects of the initial implementation of the accounting standard for current expected credit losses, the impact of the pandemic on the provision for credit losses, which resulted in a significant provision in the second quarter, and the impact of the acquisitions of RPJ and Revere. Pre-tax, pre-provision, pre-merger income was $235.3 million for the year ended December 31, 2020 compared to $158.9 million for the prior year.

Net interest income for the year ended December 31, 2020 increased 37% or $97.9 million compared to the prior year. This increase was driven primarily by the acquisition of Revere in the second quarter of 2020. Additionally, the income generated by the PPP program, net of its associated funding costs, contributed a net of $19.0 million to the growth in net interest income year-over-year. The net interest margin declined to 3.35% for the year ended December 31, 2020, compared to 3.51% for the prior year. Excluding the net $12.7 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current year would have been 3.23%. The amortization of the fair value marks recognized during the current year included a benefit realized from the accelerated amortization of the $5.9 million purchase premium on acquired FHLB advances as a result of the prepayment of those borrowings. The net interest margin for 2019, excluding the amortization of fair value marks, would have been 3.46%.

The provision for credit losses for the full year of 2020 amounted to $85.7 million as compared to $4.7 million for the same period in 2019. The provision for credit losses under the CECL standard reflects the combined results of the impact of the deteriorated economic forecasts during the year ($44.1 million) and the initial allowance on acquired Revere non-purchased credit deteriorated loans ($17.5 million). The change in the portfolio mix and various qualitative adjustments resulted in the remainder of provision growth for the period.

Non-interest income increased 44% to $102.7 million for 2020 compared to $71.3 million for 2019. During the current year income from mortgage banking activities increased $25.3 million as a result of the high levels of new mortgage and refinancing activity resulting from historically low mortgage lending rates, and wealth management income increased $7.9 million as a result of the first quarter acquisition of RPJ. These increases more than exceeded the declines in deposit service fees and BOLI income.

Non-interest expense increased 43% to $255.8 million for 2020, compared to $179.1 million for 2019. Merger and acquisition expense accounted for $23.9 million of the growth of non-interest expense. The non-interest expense growth also included $5.9 million in prepayment penalties resulting from the liquidation of acquired FHLB borrowings. Excluding the impact of these items results in a year-over-year growth rate of 26%. This growth rate was driven by operational and compensation costs associated with the Revere and RPJ acquisitions, increased incentive expense related to the significant level of mortgage loan originations, increased intangible asset amortization, higher FDIC insurance premiums and annual employee merit increases.

The effective tax rate for the year ended December 31, 2020 was 22.1%, compared to 23.8% for the same period in 2019. This decrease was the result of the recent changes to tax laws that expanded the time permitted to utilize previous net operating losses. The Company applied this change to the 2018 acquisition of WashingtonFirst Bankshares, Inc. to realize a tax benefit of $1.8 million for the current year.

The non-GAAP efficiency ratio for the current year was 46.53% compared to 51.52% for the prior year. The improvement in the current year’s efficiency ratio compared to the prior year was the result of the growth in non-GAAP revenue, which outpaced the 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 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 securities gains and includes tax-equivalent income.
• Operating earnings - and the related measures of operating earnings per share, operating return on average assets and operating return on average tangible common equity - reflect net income exclusive of the provision for credit losses, merger and acquisition expense and the income and expense associated with the PPP program, 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 fourth quarter results today at 2:00 p.m. (ET). A live Webcast of the conference call is available through the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Website are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available on the website until 9:00 am (ET) February 4, 2021. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10150939.

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, 2019, 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 December 31,								% Change			Year Ended December 31,								% Change
(Dollars in thousands, except per share data)			2020				2019							2020				2019
Results of operations:
Net interest income		$	99,827			$	65,583			52	%		$	363,159			$	265,308			37	%
Provision/ (credit) for credit losses			(4,489	)			1,655			n/m				85,669				4,684			n/m
Non-interest income			32,234				19,224			68				102,716				71,322			44
Non-interest expense			61,661				46,081			34				255,782				179,085			43
Income before income tax expense			74,889				37,071			102				124,424				152,861			(19	)
Net income			56,662				28,457			99				96,953				116,433			(17	)
Net income attributable to common shareholders		$	56,194			$	28,273			99			$	96,170			$	115,671			(17	)
Pre-tax pre-provision pre-merger income (1)		$	70,403			$	39,674			77			$	235,267			$	158,857			48
Return on average assets			1.78	%			1.32	%						0.82	%			1.39	%
Return on average common equity			15.72	%			9.93	%						7.24	%			10.51	%
Return on average tangible common equity			22.24	%			14.39	%						10.38	%			15.33	%
Net interest margin			3.38	%			3.38	%						3.35	%			3.51	%
Efficiency ratio - GAAP basis (2)			46.69	%			54.34	%						54.90	%			53.20	%
Efficiency ratio - Non-GAAP basis (2)			45.09	%			51.98	%						46.53	%			51.52	%
Per share data:
Basic net income per common share		$	1.19			$	0.80			49	%		$	2.19			$	3.25			(33	)%
Diluted net income per common share		$	1.19			$	0.80			49			$	2.18			$	3.25			(33	)
Weighted average diluted common shares			47,284,808				35,543,254			33				44,132,251				35,617,924			24
Dividends declared per share		$	0.30			$	0.30			-			$	1.20			$	1.18			2
Book value per common share		$	31.24			$	32.40			(4	)		$	31.24			$	32.40			(4	)
Tangible book value per common share (1)		$	22.28			$	22.37			-			$	22.28			$	22.37			-
Outstanding common shares			47,056,777				34,970,370			35				47,056,777				34,970,370			35
Financial condition at period-end:
Investment securities		$	1,413,781			$	1,125,136			26	%		$	1,413,781			$	1,125,136			26	%
Loans			10,400,509				6,705,232			55				10,400,509				6,705,232			55
Interest-earning assets			12,095,936				7,947,703			52				12,095,936				7,947,703			52
Assets			12,798,429				8,629,002			48				12,798,429				8,629,002			48
Deposits			10,033,069				6,440,319			56				10,033,069				6,440,319			56
Interest-bearing liabilities			7,856,842				5,485,055			43				7,856,842				5,485,055			43
Stockholders' equity			1,469,955				1,132,974			30				1,469,955				1,132,974			30
Capital ratios:
Tier 1 leverage (3)			8.92	%			9.70	%						8.92	%			9.70	%
Common equity tier 1 capital to risk-weighted assets (3)			10.58	%			11.06	%						10.58	%			11.06	%
Tier 1 capital to risk-weighted assets (3)			10.58	%			11.21	%						10.58	%			11.21	%
Total regulatory capital to risk-weighted assets (3)			13.93	%			14.85	%						13.93	%			14.85	%
Tangible common equity to tangible assets (4)			8.46	%			9.46	%						8.46	%			9.46	%
Average equity to average assets			11.34	%			13.31	%						11.38	%			13.25	%
Credit quality ratios:
Allowance for credit losses to loans			1.59	%			0.84	%						1.59	%			0.84	%
Non-performing loans to total loans			1.11	%			0.62	%						1.11	%			0.62	%
Non-performing assets to total assets			0.91	%			0.50	%						0.91	%			0.50	%
Allowance for credit losses to non-performing loans			143.23	%			136.02	%						143.23	%			136.02	%
Annualized net charge-offs to average loans (5)			0.02	%			0.03	%						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 December 31, 2020.
(4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets and other comprehensive gains/ (losses). See the Reconciliation Table included with these Financial Highlights.
(5) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
		Three Months Ended December 31,								Year Ended December 31,
(Dollars in thousands)			2020				2019				2020				2019
Pre-tax pre-provision pre-merger income:
Net income		$	56,662			$	28,457			$	96,953			$	116,433
Plus non-GAAP adjustments:
Merger and acquisition expense			3				948				25,174				1,312
Income tax expense			18,227				8,614				27,471				36,428
Provision/ (credit) for credit losses			(4,489	)			1,655				85,669				4,684
Pre-tax pre-provision pre-merger income		$	70,403			$	39,674			$	235,267			$	158,857
Efficiency ratio - GAAP basis:
Non-interest expense		$	61,661			$	46,081			$	255,782			$	179,085
Net interest income plus non-interest income		$	132,061			$	84,807			$	465,875			$	336,630
Efficiency ratio - GAAP basis			46.69	%			54.34	%			54.90	%			53.20	%
Efficiency ratio - Non-GAAP basis:
Non-interest expense		$	61,661			$	46,081			$	255,782			$	179,085
Less non-GAAP adjustments:
Amortization of intangible assets			1,655				481				6,221				1,946
Loss on FHLB redemption			-				-				5,928				-
Merger and acquisition expense			3				948				25,174				1,312
Non-interest expense - as adjusted		$	60,003			$	44,652			$	218,459			$	175,827
Net interest income plus non-interest income		$	132,061			$	84,807			$	465,875			$	336,630
Plus non-GAAP adjustment:
Tax-equivalent income			1,052				1,149				4,128				4,746
Less non-GAAP adjustment:
Investment securities gains			35				57				467				77
Net interest income plus non-interest income - as adjusted		$	133,078			$	85,899			$	469,536			$	341,299
Efficiency ratio - Non-GAAP basis			45.09	%			51.98	%			46.53	%			51.52	%
Tangible common equity ratio:
Total stockholders' equity		$	1,469,955			$	1,132,974			$	1,469,955			$	1,132,974
Accumulated other comprehensive (income)/ loss			(18,705	)			4,332				(18,705	)			4,332
Goodwill			(370,223	)			(347,149	)			(370,223	)			(347,149	)
Other intangible assets, net			(32,521	)			(7,841	)			(32,521	)			(7,841	)
Tangible common equity		$	1,048,506			$	782,316			$	1,048,506			$	782,316
Total assets		$	12,798,429			$	8,629,002			$	12,798,429			$	8,629,002
Goodwill			(370,223	)			(347,149	)			(370,223	)			(347,149	)
Other intangible assets, net			(32,521	)			(7,841	)			(32,521	)			(7,841	)
Tangible assets		$	12,395,685			$	8,274,012			$	12,395,685			$	8,274,012
Tangible common equity ratio			8.46	%			9.46	%			8.46	%			9.46	%
Outstanding common shares			47,056,777				34,970,370				47,056,777				34,970,370
Tangible book value per common share		$	22.28			$	22.37			$	22.28			$	22.37

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED (CONTINUED)
OPERATING EARNINGS - METRICS
		Three Months Ended December 31,								Year Ended December 31,
(Dollars in thousands)			2020				2019				2020				2019
Operating earnings (non-GAAP):
Net income		$	56,662			$	28,457			$	96,953			$	116,433
Plus non-GAAP adjustments:
Provision/ (credit) for credit losses - net of tax			(3,343	)			1,205				63,789				3,460
Merger and acquisition expense - net of tax			3				698				18,745				969
PPPLF funding expense - net of tax			122				-				829				-
Less non-GAAP adjustment:
PPP interest income and net deferred fee - net of tax			5,239				-				14,948				-
Operating earnings (Non-GAAP)		$	48,205			$	30,360			$	165,368			$	120,862
Operating earnings per common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)			47,284,808				35,543,254				44,132,251				35,617,924
Earnings per diluted common share (GAAP)		$	1.19			$	0.80			$	2.18			$	3.25
Operating earnings per diluted common share (non-GAAP)		$	1.02			$	0.85			$	3.75			$	3.39
Operating return on average assets (non-GAAP):
Average assets (GAAP)		$	12,645,329			$	8,542,837			$	11,775,096			$	8,367,139
Average PPP loans			(1,060,995	)			-				(710,264	)			-
Adjusted average assets (non-GAAP)		$	11,584,334			$	8,542,837			$	11,064,832			$	8,367,139
Return on average assets (GAAP)			1.78	%			1.32	%			0.82	%			1.39	%
Operating return on adjusted average assets (non-GAAP)			1.66	%			1.41	%			1.49	%			1.44	%
Operating return on average tangible common equity (non-GAAP):
Average total stockholders' equity (GAAP)		$	1,433,900			$	1,136,824			$	1,339,491			$	1,108,310
Average accumulated other comprehensive (income)/ loss			(16,398	)			3,005				(11,326	)			7,069
Average goodwill			(370,419	)			(347,149	)			(365,543	)			(347,149	)
Average other intangible assets, net			(33,675	)			(8,146	)			(28,357	)			(8,873	)
Average tangible common equity (non-GAAP)		$	1,013,408			$	784,534			$	934,265			$	759,357
Return on average tangible common equity (GAAP)			22.24	%			14.39	%			10.38	%			15.33	%
Operating return on average tangible common equity (non-GAAP)			18.92	%			15.35	%			17.70	%			15.92	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
(Dollars in thousands)		December 31, 2020				December 31, 2019
Assets
Cash and due from banks		$	93,651			$	82,469
Federal funds sold			291				208
Interest-bearing deposits with banks			203,061				63,426
Cash and cash equivalents			297,003				146,103
Residential mortgage loans held for sale (at fair value)			78,294				53,701
Investments available-for-sale (at fair value)			1,348,021				1,073,333
Other equity securities			65,760				51,803
Total loans			10,400,509				6,705,232
Less: allowance for credit losses			(165,367	)			(56,132	)
Net loans			10,235,142				6,649,100
Premises and equipment, net			57,720				58,615
Other real estate owned			1,455				1,482
Accrued interest receivable			46,431				23,282
Goodwill			370,223				347,149
Other intangible assets, net			32,521				7,841
Other assets			265,859				216,593
Total assets		$	12,798,429			$	8,629,002
Liabilities
Noninterest-bearing deposits		$	3,325,547			$	1,892,052
Interest-bearing deposits			6,707,522				4,548,267
Total deposits			10,033,069				6,440,319
Securities sold under retail repurchase agreements and federal funds purchased			543,157				213,605
Advances from FHLB			379,075				513,777
Subordinated debentures			227,088				209,406
Total borrowings			1,149,320				936,788
Accrued interest payable and other liabilities			146,085				118,921
Total liabilities			11,328,474				7,496,028
Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 47,056,777 and 34,970,370 at December 31, 2020 and December 31, 2019, respectively			47,057				34,970
Additional paid in capital			846,922				586,622
Retained earnings			557,271				515,714
Accumulated other comprehensive income/ (loss)			18,705				(4,332	)
Total stockholders' equity			1,469,955				1,132,974
Total liabilities and stockholders' equity		$	12,798,429			$	8,629,002

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
		Three Months Ended December 31,							Year Ended December 31,
(Dollars in thousands, except per share data)			2020				2019			2020			2019
Interest income:
Interest and fees on loans		$	104,756			$	77,522		$	393,477		$	316,550
Interest on loans held for sale			592				462			1,686			1,607
Interest on deposits with banks			27				724			446			2,129
Interest and dividends on investment securities:
Taxable for federal income taxes			4,866				5,437			22,136			21,739
Exempt from federal income taxes			1,550				1,243			5,814			5,834
Interest on federal funds sold			-				2			1			10
Total interest income			111,791				85,390			423,560			347,869
Interest Expense:
Interest on deposits			6,410				14,723			41,651			61,681
Interest on retail repurchase agreements and federal funds purchased			234				216			1,965			1,161
Interest on advances from FHLB			2,730				3,189			6,593			16,578
Interest on subordinated debt			2,590				1,679			10,192			3,141
Total interest expense			11,964				19,807			60,401			82,561
Net interest income			99,827				65,583			363,159			265,308
Provision/ (credit) for credit losses			(4,489	)			1,655			85,669			4,684
Net interest income after provision/ (credit) for credit losses			104,316				63,928			277,490			260,624
Non-interest income:
Investment securities gains			35				57			467			77
Service charges on deposit accounts			1,917				2,427			7,066			9,692
Mortgage banking activities			14,491				4,170			40,058			14,711
Wealth management income			8,215				6,401			30,570			22,669
Insurance agency commissions			1,356				1,331			6,795			6,612
Income from bank owned life insurance			705				660			2,867			3,165
Bank card fees			1,570				1,435			5,672			5,616
Other income			3,945				2,743			9,221			8,780
Total non-interest income			32,234				19,224			102,716			71,322
Non-interest expense:
Salaries and employee benefits			36,080				26,251			134,471			103,950
Occupancy expense of premises			5,236				4,663			21,383			19,470
Equipment expenses			3,121				2,791			12,224			10,720
Marketing			1,058				1,085			4,281			4,456
Outside data services			2,394				1,854			8,759			7,567
FDIC insurance			1,527				123			4,727			2,260
Amortization of intangible assets			1,655				481			6,221			1,946
Merger and acquisition expense			3				948			25,174			1,312
Professional fees and services			2,473				2,553			7,939			6,978
Other expenses			8,114				5,332			30,603			20,426
Total non-interest expense			61,661				46,081			255,782			179,085
Income before income tax expense			74,889				37,071			124,424			152,861
Income tax expense			18,227				8,614			27,471			36,428
Net income		$	56,662			$	28,457		$	96,953		$	116,433
Net income per share amounts:
Basic net income per common share		$	1.19			$	0.80		$	2.19		$	3.25
Diluted net income per common share		$	1.19			$	0.80		$	2.18		$	3.25
Dividends declared per share		$	0.30			$	0.30		$	1.20		$	1.18

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
			2020																2019
(Dollars in thousands, except per share data)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Profitability for the quarter:
Tax-equivalent interest income		$	112,843			$	113,627			$	116,252			$	84,966			$	86,539			$	88,229			$	88,423			$	89,424
Interest expense			11,964				15,500				13,413				19,524				19,807				20,292				21,029				21,433
Tax-equivalent net interest income			100,879				98,127				102,839				65,442				66,732				67,937				67,394				67,991
Tax-equivalent adjustment			1,052				643				1,325				1,108				1,149				1,147				1,209				1,241
Provision/ (credit) for credit losses			(4,489	)			7,003				58,686				24,469				1,655				1,524				1,633				(128	)
Non-interest income			32,234				29,390				22,924				18,168				19,224				18,573				16,556				16,969
Non-interest expense			61,661				60,937				85,438				47,746				46,081				44,925				43,887				44,192
Income/ (loss) before income tax expense/ (benefit)			74,889				58,934				(19,686	)			10,287				37,071				38,914				37,221				39,655
Income tax expense/ (benefit)			18,227				14,292				(5,348	)			300				8,614				9,531				8,945				9,338
Net income/ (loss)		$	56,662			$	44,642			$	(14,338	)		$	9,987			$	28,457			$	29,383			$	28,276			$	30,317
Financial performance:
Pre-tax pre-provision pre-merger income		$	70,403			$	67,200			$	61,454			$	36,210			$	39,674			$	40,802			$	38,854			$	39,527
Return on average assets			1.78	%			1.38	%			(0.45	)%			0.46	%			1.32	%			1.39	%			1.37	%			1.49	%
Return on average common equity			15.72	%			12.67	%			(4.15	)%			3.55	%			9.93	%			10.38	%			10.32	%			11.46	%
Return on average tangible common equity			22.24	%			18.16	%			(5.80	)%			5.36	%			14.39	%			15.13	%			15.10	%			16.82	%
Net interest margin			3.38	%			3.24	%			3.47	%			3.29	%			3.38	%			3.51	%			3.54	%			3.60	%
Efficiency ratio - GAAP basis (1)			46.69	%			48.03	%			68.66	%			57.87	%			54.34	%			52.63	%			53.04	%			52.79	%
Efficiency ratio - Non-GAAP basis (1)			45.09	%			45.27	%			43.85	%			54.76	%			51.98	%			50.95	%			51.71	%			51.44	%
Per share data:
Net income/ (loss) attributable to common shareholders		$	56,194			$	44,268			$	(14,458	)		$	9,919			$	28,274			$	29,196			$	28,065			$	30,120
Basic net income/ (loss) per common share		$	1.19			$	0.94			$	(0.31	)		$	0.29			$	0.80			$	0.82			$	0.79			$	0.85
Diluted net income/ (loss) per common share		$	1.19			$	0.94			$	(0.31	)		$	0.28			$	0.80			$	0.82			$	0.79			$	0.85
Weighted average diluted common shares			47,284,808				47,175,071				46,988,351				34,743,623				35,543,254				35,671,721				35,634,924				35,618,346
Dividends declared per share		$	0.30			$	0.30			$	0.30			$	0.30			$	0.30			$	0.30			$	0.30			$	0.28
Non-interest income:
Securities gains		$	35			$	51			$	212			$	169			$	57			$	15			$	5			$	-
Service charges on deposit accounts			1,917				1,673				1,223				2,253				2,427				2,516				2,442				2,307
Mortgage banking activities			14,491				14,108				8,426				3,033				4,170				4,408				3,270				2,863
Wealth management income			8,215				7,785				7,604				6,966				6,401				5,493				5,539				5,236
Insurance agency commissions			1,356				2,122				1,188				2,129				1,331				2,116				1,265				1,900
Income from bank owned life insurance			705				708				809				645				660				662				654				1,189
Bank card fees			1,570				1,525				1,257				1,320				1,435				1,462				1,467				1,252
Other income			3,945				1,418				2,205				1,653				2,743				1,901				1,914				2,222
Total non-interest income		$	32,234			$	29,390			$	22,924			$	18,168			$	19,224			$	18,573			$	16,556			$	16,969
Non-interest expense:
Salaries and employee benefits		$	36,080			$	36,041			$	34,297			$	28,053			$	26,251			$	26,234			$	25,489			$	25,976
Occupancy expense of premises			5,236				5,575				5,991				4,581				4,663				4,816				4,760				5,231
Equipment expenses			3,121				3,133				3,219				2,751				2,791				2,641				2,712				2,576
Marketing			1,058				1,305				729				1,189				1,085				1,541				887				943
Outside data services			2,394				2,614				2,169				1,582				1,854				1,973				1,962				1,778
FDIC insurance			1,527				1,340				1,378				482				123				(83	)			1,084				1,136
Amortization of intangible assets			1,655				1,968				1,998				600				481				491				483				491
Merger and acquisition expense			3				1,263				22,454				1,454				948				364				-				-
Professional fees and services			2,473				1,800				1,840				1,826				2,553				1,546				1,634				1,245
Other expenses			8,114				5,898				11,363				5,228				5,332				5,402				4,876				4,816
Total non-interest expense		$	61,661			$	60,937			$	85,438			$	47,746			$	46,081			$	44,925			$	43,887			$	44,192
(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; 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
			2020																2019
(Dollars in thousands, except per share data)		Q4				Q3				Q2				Q1				Q4				Q3				Q2				Q1
Balance sheets at quarter end:
Commercial investor real estate loans		$	3,634,720			$	3,588,702			$	3,581,778			$	2,241,240			$	2,169,156			$	2,036,021			$	1,994,027			$	1,962,879
Commercial owner-occupied real estate loans			1,642,216				1,652,208				1,601,803				1,305,682				1,288,677				1,278,505				1,224,986				1,216,713
Commercial AD&C loans			1,050,973				994,800				997,423				643,114				684,010				678,906				658,709				688,939
Commercial business loans			2,267,548				2,227,246				2,222,810				813,525				801,019				772,619				772,158				769,660
Residential mortgage loans			1,105,179				1,173,857				1,211,745				1,116,512				1,149,327				1,199,275				1,241,081				1,249,968
Residential construction loans			182,619				175,123				169,050				149,573				146,279				150,692				171,106				176,388
Consumer loans			517,254				521,999				558,434				453,346				466,764				480,530				489,176				505,443
Total loans			10,400,509				10,333,935				10,343,043				6,722,992				6,705,232				6,596,548				6,551,243				6,569,990
Allowance for credit losses			(165,367	)			(170,314	)			(163,481	)			(85,800	)			(56,132	)			(54,992	)			(54,024	)			(53,089	)
Loans held for sale			78,294				88,728				68,765				67,114				53,701				78,821				50,511				24,998
Investment securities			1,413,781				1,425,733				1,424,652				1,250,560				1,125,136				946,210				955,715				987,299
Interest-earning assets			12,095,936				11,965,915				12,447,146				8,222,589				7,947,703				7,742,138				7,713,364				7,648,654
Total assets			12,798,429				12,678,131				13,290,447				8,929,602				8,629,002				8,437,538				8,398,519				8,327,900
Noninterest-bearing demand deposits			3,325,547				3,458,804				3,434,038				1,939,937				1,892,052				2,081,435				2,023,614				1,813,708
Total deposits			10,033,069				9,964,969				10,076,834				6,593,874				6,440,319				6,493,899				6,389,749				6,224,523
Customer repurchase agreements			153,157				142,287				143,579				125,305				138,605				126,008				150,604				122,626
Total interest-bearing liabilities			7,856,842				7,643,381				8,313,546				5,732,349				5,485,055				5,093,265				5,136,860				5,297,108
Total stockholders' equity			1,469,955				1,424,749				1,390,093				1,116,334				1,132,974				1,140,041				1,119,445				1,095,848
Quarterly average balance sheets:
Commercial investor real estate loans		$	3,599,648			$	3,582,751			$	3,448,882			$	2,202,461			$	2,092,478			$	1,982,979			$	1,960,919			$	1,964,699
Commercial owner-occupied real estate loans			1,643,817				1,628,474				1,681,674				1,285,257				1,274,782				1,258,000				1,215,632				1,207,799
Commercial AD&C loans			1,017,304				977,607				969,251				659,494				695,817				651,905				686,282				676,205
Commercial business loans			2,189,828				2,207,388				1,899,264				819,133				765,159				786,150				756,594				780,318
Residential mortgage loans			1,136,989				1,189,452				1,208,566				1,139,786				1,169,623				1,215,132				1,244,086				1,230,319
Residential construction loans			180,494				173,280				162,978				145,266				149,690				162,196				174,095				189,720
Consumer loans			515,202				543,242				575,734				465,314				477,572				486,865				505,235				515,644
Total loans			10,283,282				10,302,194				9,946,349				6,716,711				6,625,121				6,543,227				6,542,843				6,564,704
Loans held for sale			68,255				54,784				53,312				35,030				50,208				61,870				37,121				17,846
Investment securities			1,418,683				1,404,238				1,398,586				1,179,084				1,002,692				941,048				964,863				1,010,940
Interest-earning assets			11,882,542				12,049,463				11,921,132				7,994,618				7,859,836				7,690,629				7,619,240				7,627,187
Total assets			12,645,329				12,835,893				12,903,156				8,699,342				8,542,837				8,370,789				8,294,883				8,258,116
Noninterest-bearing demand deposits			3,424,729				3,281,607				3,007,222				1,797,227				1,927,063				1,909,884				1,796,802				1,682,720
Total deposits			9,999,144				9,862,639				9,614,176				6,433,694				6,459,551				6,405,762				6,247,409				5,952,942
Customer repurchase agreements			146,685				142,694				144,050				135,652				126,596				138,736				141,865				129,059
Total interest-bearing liabilities			7,609,829				7,969,487				8,326,909				5,612,056				5,326,303				5,202,876				5,269,209				5,403,946
Total stockholders' equity			1,433,900				1,401,746				1,390,544				1,130,051				1,136,824				1,123,185				1,099,078				1,073,291
Financial measures:
Average equity to average assets			11.34	%			10.92	%			10.78	%			12.99	%			13.31	%			13.42	%			13.25	%			13.00	%
Investment securities to earning assets			11.69	%			11.91	%			11.45	%			15.21	%			14.16	%			12.22	%			12.39	%			12.91	%
Loans to earning assets			85.98	%			86.36	%			83.10	%			81.76	%			84.37	%			85.20	%			84.93	%			85.90	%
Loans to assets			81.26	%			81.51	%			77.82	%			75.29	%			77.71	%			78.18	%			78.00	%			78.89	%
Loans to deposits			103.66	%			103.70	%			102.64	%			101.96	%			104.11	%			101.58	%			102.53	%			105.55	%
Capital measures:
Tier 1 leverage (1)			8.92	%			8.65	%			8.35	%			8.78	%			9.70	%			9.96	%			9.80	%			9.61	%
Common equity tier 1 capital to risk weighted assets (1)			10.58	%			10.45	%			10.23	%			10.23	%			11.06	%			11.37	%			11.43	%			11.19	%
Tier 1 capital to risk-weighted assets (1)			10.58	%			10.45	%			10.23	%			10.23	%			11.21	%			11.52	%			11.59	%			11.35	%
Total regulatory capital to risk-weighted assets (1)			13.93	%			14.02	%			13.79	%			14.09	%			14.85	%			12.70	%			12.79	%			12.54	%
Book value per common share		$	31.24			$	30.30			$	29.58			$	32.68			$	32.40			$	32.00			$	31.43			$	30.82
Outstanding common shares			47,056,777				47,025,779				47,001,022				34,164,672				34,970,370				35,625,822				35,614,953				35,557,110
(1) Estimated ratio at December 31, 2020.

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
			2020																2019
(Dollars in thousands)		December 31,				September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
Non-performing assets:
Loans 90 days past due:
Commercial real estate:
Commercial investor real estate		$	133			$	-			$	775			$	-			$	-			$	1,201			$	1,248			$	-
Commercial owner-occupied real estate			-				-				515				-				-				-				-				90
Commercial AD&C			-				-				-				-				-				-				-				-
Commercial business			161				93				-				-				-				17				-				-
Residential real estate:
Residential mortgage			480				320				138				8				-				-				-				221
Residential construction			-				-				-				-				-				-				-				-
Consumer			-				1				-				-				-				-				-				-
Total loans 90 days past due			774				414				1,428				8				-				1,218				1,248				311
Non-accrual loans:
Commercial real estate:
Commercial investor real estate			45,227				26,784				26,482				17,770				8,437				8,454				6,409				6,071
Commercial owner-occupied real estate			11,561				6,511				6,729				4,074				4,148				3,810				3,766				5,992
Commercial AD&C			15,044				1,678				2,957				829				829				829				1,990				3,306
Commercial business			22,933				17,659				20,246				10,834				8,450				6,393				7,083				8,013
Residential real estate:
Residential mortgage			10,212				11,296				11,724				12,271				12,661				12,574				10,625				9,704
Residential construction			-				-				-				-				-				-				-				156
Consumer			7,384				7,493				7,800				5,596				4,107				4,561				4,439				4,081
Total non-accrual loans			112,361				71,421				75,938				51,374				38,632				36,621				34,312				37,323
Total restructured loans - accruing			2,317				2,854				2,553				2,575				2,636				2,287				2,133				2,479
Total non-performing loans			115,452				74,689				79,919				53,957				41,268				40,126				37,693				40,113
Other assets and other real estate owned (OREO)			1,455				1,389				1,389				1,416				1,482				1,482				1,486				1,410
Total non-performing assets		$	116,907			$	76,078			$	81,308			$	55,373			$	42,750			$	41,608			$	39,179			$	41,523
		For the Quarter Ended,
(Dollars in thousands)		December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019				March 31, 2019
Analysis of non-accrual loan activity:
Balance at beginning of period		$	71,421			$	75,938			$	51,374			$	38,632			$	36,621			$	34,312			$	37,323			$	33,583
Purchased credit deteriorated loans designated as non-accrual			-				-				-				13,084				-				-				-				-
Non-accrual balances transferred to OREO			(70	)			-				-				-				-				-				(195	)			-
Non-accrual balances charged-off			(513	)			(144	)			(162	)			(575	)			(454	)			(705	)			(604	)			(227	)
Net payments or draws			(13,212	)			(4,248	)			(1,881	)			(1,860	)			(2,916	)			(2,903	)			(5,517	)			(1,786	)
Loans placed on non-accrual			54,735				893				27,289				2,369				5,381				6,015				3,396				6,202
Non-accrual loans brought current			-				(1,018	)			(682	)			(276	)			-				(98	)			(91	)			(449	)
Balance at end of period		$	112,361			$	71,421			$	75,938			$	51,374			$	38,632			$	36,621			$	34,312			$	37,323
Analysis of allowance for credit losses:
Balance at beginning of period		$	170,314			$	163,481			$	85,800			$	56,132			$	54,992			$	54,024			$	53,089			$	53,486
Transition impact of adopting ASC 326			-				-				-				2,983				-				-				-				-
Initial allowance on purchased credit deteriorated loans			-				-				-				2,762				-				-				-				-
Initial allowance on acquired PCD loans			-				-				18,628				-				-				-				-				-
Provision/ (credit) for credit losses			(4,489	)			7,003				58,686				24,469				1,655				1,524				1,633				(128	)
Less loans charged-off, net of recoveries:
Commercial real estate:
Commercial investor real estate			379				21				(4	)			-				(3	)			(3	)			(3	)			(7	)
Commercial owner-occupied real estate			-				-				-				-				-				-				-				-
Commercial AD&C			-				-				-				-				-				(224	)			(4	)			-
Commercial business			56				88				(463	)			108				15				389				735				7
Residential real estate:
Residential mortgage			37				(6	)			15				333				264				209				(10	)			89
Residential construction			(1	)			(2	)			(1	)			(2	)			(2	)			(2	)			(2	)			(2	)
Consumer			(13	)			69				86				107				241				187				(18	)			182
Net charge-offs/ (recoveries)			458				170				(367	)			546				515				556				698				269
Balance at the end of period		$	165,367			$	170,314			$	163,481			$	85,800			$	56,132			$	54,992			$	54,024			$	53,089
Asset quality ratios:
Non-performing loans to total loans			1.11	%			0.72	%			0.77	%			0.80	%			0.62	%			0.61	%			0.58	%			0.61	%
Non-performing assets to total assets			0.91	%			0.60	%			0.61	%			0.62	%			0.50	%			0.49	%			0.47	%			0.50	%
Allowance for credit losses to loans			1.59	%			1.65	%			1.58	%			1.28	%			0.84	%			0.83	%			0.82	%			0.81	%
Allowance for credit losses to non-performing loans			143.23	%			228.03	%			204.56	%			159.02	%			136.02	%			137.05	%			143.33	%			132.35	%
Annualized net charge-offs/ (recoveries) to average loans			0.02	%			0.01	%			(0.01	)%			0.03	%			0.03	%			0.03	%			0.04	%			0.02	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Three Months Ended December 31,
			2020										2019
(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		$	3,599,648			$	38,867		4.30	%		$	2,092,478			$	24,982		4.74	%
Commercial owner-occupied real estate loans			1,643,817				19,440		4.70				1,274,782				15,606		4.86
Commercial AD&C loans			1,017,304				10,400		4.07				695,817				9,388		5.35
Commercial business loans			2,189,828				20,015		3.64				765,159				9,821		5.09
Total commercial loans			8,450,597				88,722		4.18				4,828,236				59,797		4.91
Residential mortgage loans			1,136,989				10,102		3.55				1,169,623				11,030		3.77
Residential construction loans			180,494				1,698		3.74				149,690				1,650		4.37
Consumer loans			515,202				4,806		3.71				477,572				5,594		4.65
Total residential and consumer loans			1,832,685				16,606		3.62				1,796,885				18,274		4.05
Total loans (2)			10,283,282				105,328		4.08				6,625,121				78,071		4.68
Loans held for sale			68,255				592		3.48				50,208				462		3.68
Taxable securities			1,138,767				4,925		1.73				816,008				5,704		2.79
Tax-exempt securities (3)			279,916				1,971		2.81				186,684				1,576		3.38
Total investment securities (4)			1,418,683				6,896		1.94				1,002,692				7,280		2.90
Interest-bearing deposits with banks			111,820				27		0.10				181,394				724		1.58
Federal funds sold			502				-		0.10				421				2		1.66
Total interest-earning assets			11,882,542				112,843		3.78				7,859,836				86,539		4.38
Less: allowance for credit losses			(171,026	)									(54,653	)
Cash and due from banks			111,565										68,011
Premises and equipment, net			58,060										59,277
Other assets			764,188										610,366
Total assets		$	12,645,329									$	8,542,837
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,195,307			$	293		0.10	%		$	800,263			$	685		0.34	%
Regular savings deposits			406,637				57		0.06				325,540				94		0.11
Money market savings deposits			3,194,999				1,870		0.23				1,875,045				5,820		1.23
Time deposits			1,777,472				4,190		0.94				1,531,640				8,124		2.10
Total interest-bearing deposits			6,574,415				6,410		0.39				4,532,488				14,723		1.29
Other borrowings			377,362				234		0.25				133,716				216		0.64
Advances from FHLB			428,278				2,730		2.54				516,101				3,189		2.45
Subordinated debentures			229,774				2,590		4.51				143,998				1,679		4.66
Total borrowings			1,035,414				5,554		2.13				793,815				5,084		2.55
Total interest-bearing liabilities			7,609,829				11,964		0.63				5,326,303				19,807		1.48
Noninterest-bearing demand deposits			3,424,729										1,927,063
Other liabilities			176,871										152,647
Stockholders' equity			1,433,900										1,136,824
Total liabilities and stockholders' equity		$	12,645,329									$	8,542,837
Net interest income and spread						$	100,879		3.15	%						$	66,732		2.90	%
Less: tax-equivalent adjustment							1,052										1,149
Net interest income						$	99,827									$	65,583
Interest income/earning assets									3.78	%									4.38	%
Interest expense/earning assets									0.40										1.00
Net interest margin									3.38	%									3.38	%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.54% and 26.13% for 2020 and 2019, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.1 million in both 2020 and 2019.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.
(4) Available for sale investments are presented at amortized cost.

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Year Ended December 31,
			2020										2019
(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		$	3,210,527			$	142,105		4.43	%		$	2,000,571			$	99,410		4.97	%
Commercial owner-occupied real estate loans			1,560,223				73,655		4.72				1,239,289				60,581		4.89
Commercial AD&C loans			906,414				40,262		4.44				677,536				39,241		5.79
Commercial business loans			1,781,197				69,633		3.91				772,052				41,300		5.35
Total commercial loans			7,458,361				325,655		4.37				4,689,448				240,532		5.13
Residential mortgage loans			1,168,668				43,001		3.68				1,214,625				46,438		3.82
Residential construction loans			165,567				6,683		4.04				168,797				7,232		4.28
Consumer loans			524,897				20,356		3.88				496,199				24,391		4.92
Total residential and consumer loans			1,859,132				70,040		3.77				1,879,621				78,061		4.15
Total loans (2)			9,317,493				395,695		4.25				6,569,069				318,593		4.85
Loans held for sale			52,893				1,686		3.19				41,905				1,607		3.84
Taxable securities			1,106,315				22,482		2.03				768,521				22,873		2.98
Tax-exempt securities (3)			244,168				7,378		3.02				211,236				7,403		3.50
Total investment securities (4)			1,350,483				29,860		2.21				979,757				30,276		3.09
Interest-bearing deposits with banks			246,155				446		0.18				108,534				2,129		1.96
Federal funds sold			403				1		0.28				572				10		1.76
Total interest-earning assets			10,967,427				427,688		3.90				7,699,837				352,615		4.58
Less: allowance for credit losses			(128,793	)									(53,746	)
Cash and due from banks			122,826										65,181
Premises and equipment, net			59,031										60,595
Other assets			754,605										595,272
Total assets		$	11,775,096									$	8,367,139
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,062,474			$	1,812		0.17	%		$	750,606			$	1,990		0.27	%
Regular savings deposits			374,196				269		0.07				329,158				415		0.13
Money market savings deposits			2,741,230				12,424		0.45				1,751,989				25,437		1.45
Time deposits			1,924,429				27,146		1.41				1,604,996				33,839		2.11
Total interest-bearing deposits			6,102,329				41,651		0.68				4,436,749				61,681		1.39
Other borrowings			509,523				1,965		0.39				152,088				1,161		0.76
Advances from FHLB			545,652				6,593		1.21				645,587				16,578		2.57
Subordinated debentures			224,306				10,192		4.54				64,251				3,141		4.89
Total borrowings			1,279,481				18,750		1.47				861,926				20,880		2.42
Total interest-bearing liabilities			7,381,810				60,401		0.82				5,298,675				82,561		1.56
Noninterest-bearing demand deposits			2,880,294										1,830,008
Other liabilities			173,501										130,146
Stockholders' equity			1,339,491										1,108,310
Total liabilities and stockholders' equity		$	11,775,096									$	8,367,139
Net interest income and spread						$	367,287		3.08	%						$	270,054		3.02	%
Less: tax-equivalent adjustment							4,128										4,746
Net interest income						$	363,159									$	265,308
Interest income/earning assets									3.90	%									4.58	%
Interest expense/earning assets									0.55										1.07
Net interest margin									3.35	%									3.51	%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.54% and 26.13% for 2020 and 2019, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $4.1 million and $4.7 million 2020 and 2019, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.
(4) Available for sale investments are presented at amortized cost.