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Edited Transcript of SASR earnings conference call or presentation 19-Jul-18 6:00pm GMT

Q2 2018 Sandy Spring Bancorp Inc Earnings Call

Olney Jul 20, 2018 (Thomson StreetEvents) -- Edited Transcript of Sandy Spring Bancorp Inc earnings conference call or presentation Thursday, July 19, 2018 at 6:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Daniel J. Schrider

Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director

* Philip J. Mantua

Sandy Spring Bancorp, Inc. - Executive VP & CFO

* Ronald E. Kuykendall

Sandy Spring Bancorp, Inc. - Executive VP, General Counsel & Secretary

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Conference Call Participants

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* Austin Lincoln Nicholas

Stephens Inc., Research Division - VP and Research Analyst

* Casey Cassiday Whitman

Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research

* Steven Comery

G. Research, LLC - Research Analyst

* Stuart Lotz

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Presentation

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Operator [1]

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Good day, and welcome to the Sandy Spring Bancorp, Inc. Earnings Conference Call and Webcast for the Second Quarter 2018 Conference Call. (Operator Instructions)

Please note this event is being recorded and I would now like to turn the conference over to Dan Schrider, CEO. Please go ahead.

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [2]

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Thank you, and good afternoon, everyone. Thank you for joining us for our conference call to discuss Sandy Spring Bancorp's performance for the second quarter of 2018.

This is Dan Schrider speaking and I'm joined here today by Phil Mantua, our Chief Financial Officer; and Ron Kuykendall, General Counsel for Sandy Spring Bancorp.

As usual, our call is open to all investors, analysts and the news media, and there will be a live webcast of today's call as well as a replay of the call available later today on our website.

After covering key highlights of the quarter, we'll move to your questions, but before we get started, Ron will give the customary safe harbor statement.

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Ronald E. Kuykendall, Sandy Spring Bancorp, Inc. - Executive VP, General Counsel & Secretary [3]

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Thank you, Dan. Good afternoon, ladies and gentlemen. Sandy Spring Bancorp will make forward-looking statements in this webcast that are subject to risk and uncertainties. These forward-looking statements include statements of goals, intentions, earnings and other expectations, estimates of risk and future costs and benefits, assessments of probable loan and lease losses, assessments of market risk and statements of the ability to achieve financial and other goals. These forward-looking statements are subject to significant uncertainties because they are based upon or affected by management's estimates and projections of future interest rates, market behavior and other economic conditions, future laws and regulations and a variety of other matters, which by their very nature, are subject to significant uncertainties. Because of these uncertainties, Sandy Spring Bancorp's actual future results may differ materially from those indicated. In addition, the company's past results of operations do not necessarily indicate its future results.

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [4]

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Thank you, Ron. The results for the second quarter of 2018 continue to show solid core operating performance, as we are realizing the many benefits of the acquisition and integration of WashingtonFirst Bank. We are pleased with the momentum of both loan and deposit growth from business and retail relationships achieved in the quarter, demonstrating our ongoing success in the highly competitive greater Washington, D.C. market.

With our capital base and depth of talent, we are well positioned to the serve the needs of individuals and businesses of all types and sizes throughout our region.

Now let me cover some of the highlights from the second quarter of 2018. As I did last quarter, I will attempt to pull apart the effect of merger-related items to provide the most accurate view of our core performance. And here's just a quick rundown of the main highlights from today's release. Net income for the second quarter of 2018 was $24.4 million or $0.68 per diluted share, compared to net income of $14.7 million or $0.61 per diluted share for the second quarter of 2017, and net income of $21.7 million or $0.61 per diluted share for the linked first quarter of 2018.

On a core basis, after taking into consideration merger-related expenses for comparative purposes, core results look like this: second quarter of 2017, EPS of $0.61; first quarter of 2018, EPS of $0.80; and second quarter of 2018, EPS of $0.73 per share. This yields a non-GAAP return on average assets for the second quarter of 1.32% and a non-GAAP return of average common equity of 10.32%. All in all a very good quarter.

The net interest margin was 3.56% for the second quarter compared to 3.60% for the second quarter of 2017 and 3.58% for the linked first quarter. The prior year's margin was positively impacted by a net interest recovery of $700,000, which, exclusive of this noncore item, would have been 3.54%.

Amortization of the fair value adjustments attributable to the acquisition had a 12 basis point positive impact, which was offset by an approximate 5 basis point due to the impact of recent reduction in the tax rate and what it had on the tax-advantaged investments.

The momentum in our lending businesses and growth for the quarter were very strong. On a linked quarter basis, total loans grew by 3%. Our teams across the market continue to build solid pipelines of new lending opportunities in the highly competitive greater Washington market.

Our teams continue the discipline of selling full banking relationships that will drive the returns necessary to hit our financial objectives, given pricing power continues to lag the move in market rates. The provision for loan and lease losses was a charge of $1.7 million for the second quarter compared to a charge of $1.3 million for the second quarter of last year. The provision expense reflects the impact of organic production and the impact of acquired loans being refinanced as they reach maturity during the second quarter.

Overall, all credit metrics remain strong with reductions in both nonperforming loans and nonperforming assets compared to the linked first quarter.

Our reserve coverage of nonperforming loans is exceptional at 168%. With this momentum in our lending activity, we continue growing core deposits from both retail and commercial banking relationships. On a linked quarter basis, total average deposits increased 3%, led by 8.8% growth in noninterest demand deposits. Our ongoing ability to fund new asset growth through expansion in core deposits is a key strength of our company.

As mentioned last quarter, we modified all incentive plans, placing more value and reward opportunity for deposit gathering. We are well positioned, given our coverage of the greater Washington market, to continue our legacy of core deposit growth. We continue to price deposits in the top third of the market in key interest-bearing deposit products and our sales teams continue their focus on driving core transaction accounts as we win new relationships. In the noninterest income area, the second quarter was softer than expected in comparison to the linked first quarter due to an overall weaker mortgage market, driven by the effects of long-term rates and regional housing inventories. The typical spring season did not materialize as it normally does, resulted in lower-than-expected gain on sale activity.

We did see more ARM production hit the portfolio in the second quarter. Wealth management revenue continues to be strong, with linked quarter growth of 6.44% and 13.5% compared to the second quarter of 2017. Our wealth management professionals in Sandy Spring Trust and West Financial Services do a great job penetrating our client base, while also taking advantage of our broader geography.

Revenue for insurance agency commissions experienced a typical seasonal dip in the second quarter and our expectation is a third quarter rebound consistent with prior years. We continue to see growth in revenue generated by the referrals of existing bank clients.

The non-GAAP efficiency ratio was 52.98% for the second quarter compared to 49.54% for the first quarter and 54.10% for the second quarter of 2017. Merger-related expenses totaled $2.2 million for the quarter, including costs associated with the consolidation of 6 community offices in April.

We also experienced an increase in other noncompensation-related expenses that were either merger related or seasonal in nature, unique to the second quarter.

Our capital position remains strong to support growth, with a total risk-based capital ratio of 12.19%, a Tier 1 risk-based capital ratio of 11.01%, a Tier 1 leverage ratio of 9.27% and a tangible common equity to tangible asset ratio of 8.85%.

As we look forward, we continue to invest in the people, systems and technology that will prepare us for the future.

During the quarter, we announced the hiring of a Chief Risk Officer to further develop our enterprise risk management program, to prepare us for a future of continued growth. We will continue to innovate to provide greater access for our clients through any channel that best fits their needs.

With a benefit realized from the Tax Cuts and Jobs Act, we are enhancing the opportunities for our people by enriching employee benefit programs, such as improved merit increases in 2018 realized in the second quarter, 401(k) matching and corporate-wide incentive opportunities.

The bottom line is to take advantage of being a one-of-a-kind bank in one of the best markets in the country and achieve the financial performance and returns that satisfy our shareholders and position us for continued growth and success.

That concludes my general comments for today, and we will now move to your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Stuart Lotz, KBW.

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Stuart Lotz, [2]

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Can you hear me?

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [3]

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Yes, we can hear you.

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Stuart Lotz, [4]

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I am on for Catherine. My first question is on the margin. I just wanted to see what the accretable yield was in that -- this quarter? We were happy to see it hold up at 3.56%, but just for modeling purposes, how much accretable yield was in there and what is the outlook for the remaining quarters this year?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [5]

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Yes, Stuart, this is Phil. I think we had stated earlier that for the overall year, it was probably going to average around 9 basis points. I think we are continuing to kind of amortize away from the 12 that Dan mentioned earlier at the beginning of the year. We're probably, in this quarter, in the 7 to 8 basis point range in terms of the accretable portion of that 3.56%. Yes, by the way, it will -- I am sorry -- it will probably, by the time we get to the end of the year, be about 5 basis points then if you are

(technical difficulty)

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Stuart Lotz, [6]

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On the margin, we did see it a little bit jumped -- sorry, a lower jump in deposit betas this quarter, but the NIM did hold up pretty well. I just wanted to see what your outlook and if that was more proactive pricing of deposits, the lock-in funding, as we see further rate hikes this year? And just what your outlook is for deposit betas for the remainder of 2018?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [7]

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Sure. So, Stuart, this is Phil again. I think general margin levels direction probably similar to where we are at the moment, could see a couple of more basis points of compression between now and the end of the year. We have now included in our forecast, another Fed hike in September. Last quarter at this time, we had not included that, so we've changed our position on that and included that in our forecast and one in December, which will obviously not impact this year, but will certainly be the springboard into '19, but I think we continue to generally say that the overall margin is in a net 3.50% to 3.55% range so, again, could be a couple of more basis points of compression. I do think from the standpoint of deposit betas in looking at this quarter versus last, that they have settled down a little bit. I think they were running probably their highest or hottest at the end of the first quarter into the beginning of the second quarter, but now towards the end of it, I think they've come back down. So to give you a perspective, our lead deposit product, both from a relationship standpoint and just from -- in terms of core funding has been this Premier Money Market account that we have. We are starting to kind of be able to price some of those higher tiers with betas that are more in the 40% to 50% range than in the 70% to 80% range or even higher earlier on.

So we still intend to position ourselves, as Dan mentioned, in the upper third of ratepayers in the market, but we do think that some of the betas are starting to just slow a little bit in that category and even some in the time deposit area as well.

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Stuart Lotz, [8]

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Then I just had one more on the opposite side of balance sheet. Any outlook on asset betas? We saw -- I think, average earning assets were up 9 bps this quarter, sorry, loan yields were up 9 bps this quarter. Do you think that trend will hold over the remainder of this year if we do see another Fed hike, and as well, the June hike?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [9]

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In terms of it completely holding, I think that first of all to your question about asset betas, just as a general position, I think we certainly saw the betas get better in that regard in the second quarter than the first. I think that our average in the commercial portfolio, I think we saw -- first quarter over -- excuse me, second quarter over first quarter, I think that the betas there now are more in the 60% range, where I think we probably talked last quarter they were more like in the 35% to 40% range. So I think that we are seeing some progress there. Whether or not that's going to be able to hold in terms of what we can yield throughout the rest of the year is a good question. I don't know in a commercial portfolio, just exactly how much of that we might see by the end of the year. So that one's a little tough, just not completely knowing what the competitive landscape might be.

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Operator [10]

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The next question comes from Casey Whitman with Sandler O'Neill.

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Casey Cassiday Whitman, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [11]

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You mentioned in your opening comments just the noncore, more seasonal expenses. So what do you think is a good run rate for expenses in the back half of the year? And do you see more cost savings coming in from the deal as well to get there?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [12]

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Yes, Casey, this is Phil. I think that -- I looked at a couple categories of expense here that really kind of stood out were -- and there is other noncomp categories of professional fees and just overall other expenses. And there was a pretty significant delta there of almost $1.4 million quarter -- linked quarter. I think about 80% of that was what Dan was commenting on, that was either seasonal to the second quarter, that are things like tax preparation fees in our Trust group, for example, that are significant to that line of business or things that were merger related but didn't get classified as merger expenses. Things around the conversion costs and cleanups in terms of technology, et cetera.

So I think in terms of looking at that part of it, I would just kind of give you that kind of direction as far as how much of that will not really be sustainable and into the run rate. Beyond that, I think what we have in the salary and benefits area now is a pretty good level to look at and go beyond with. I mean our traditional second quarter -- traditionally our second quarter is where we do all of our personnel reviews and increases. One of the things this year we did -- and this is also related to one of Dan's comments about starting to absorb some of the benefit from the tax reform act, is we increased the overall average increases we would allow in terms of salary bumps, by a whole percentage point over what we would traditionally do. We've also started to accrue for the corporate-wide incentive plan that we've introduced again, or introducing with all of our employees in this -- starting with the quarter. So I think those things hold as they are. I think at bottom line, in terms of expense growth, again, 2%, 3% growth throughout the rest of the year is probably reasonable.

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Casey Cassiday Whitman, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [13]

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So 2%, 3% growth, but also on top of that the savings that you just mentioned, the million or so, might be coming off?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [14]

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That's correct. That's correct, yes, that's correct.

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Casey Cassiday Whitman, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [15]

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Okay. And remind us how talent retention has gone thus far for the WFBI folks?

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [16]

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Yes, Casey, this is Dan. We are very pleased with our ability to make converts of our new bankers that are now Sandy Springers. I think we've had a couple of relationship managers in the commercial space from the time that we closed the transaction right at the beginning of the year. We had one leave immediately and one leave after conversion. While at the same time, we have been successful in attracting additional talent to the company from other area of organization. So all in all, we are really pleased with our retention and I would say, we are even more pleased with the quality of the talent that we have retained, really good, seasoned, experienced bankers at WashingtonFirst and we are glad to have them part of team. So it's gone really well.

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Casey Cassiday Whitman, Sandler O'Neill + Partners, L.P., Research Division - MD of Equity Research [17]

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Got it. And I'll just ask one more question. Back to deposits. So it looked like you had a really nice jump in noninterest-bearing towards the end of the quarter. So just curious how have you been so successful there in this environment? And could that also contribute to a lower deposit beta in the third quarter, potentially?

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [18]

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Hey Casey, this is Dan. I think there is a couple of comments I'll make and let Phil comment as well. One is there is -- with the acquisition of WashingtonFirst and the nature of their DDA balances, particularly in the title-related business, there's a lot more volatility within that base that we've got to get used to in terms of inter-quarter, ebbs and flows within that and that tends to build back up toward the end of periods, monthly and then quarterly. So that's one aspect of the deposit base. And then the second is really the focus that our frontline has had in -- and while we are pricing our money market and some of our key CD products in the top end of the market as we commented before. Those are typically tied to bring in over a deposit relationship. So we are winning the transaction accounts or the DDA balances while also having a willingness to pay for some of those interest-bearing relationships.

So I think it's a combination of just good hard work on the street, winning new relationships, expanding existing ones, the volatility, just to -- so you understand that within the base in terms of the title-related business. Phil, I'll let you comment on how you kind of see that playing out, if at all, within the beta side?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [19]

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Yes, Casey, I think that the way I look at it is if you look at what actually happened in this quarter where we lost 9 basis points from a spread standpoint, but only 2 to the margin and I think that lends to that -- the power of being able to continue to grow that noninterest-bearing piece as well as or more so than the other parts of the funding base. So I think that would kind of lend itself -- to me, that same thought process that's going to help mitigate some of what we might have to do for other funding purposes. I think the other place where we are going to really work hard going forward, and I think it's necessary, is the balance between our kind of borrowed funding base, predominantly with the home loan bank, especially on the short end of the curve, which has gotten dramatically more expensive here with the Fed's movements of late, and being more absorbed and trying to shift as much of that even into the deposit base, where even public funds and other broker-type CDs might be a more attractive alternative as we try to work down the loan-to-deposit ratio as well.

So I think we'll probably see us work in that direction as much in conjunction with what we might continue to enjoy on the demand deposit growth as a means for trying to mitigate the increases and our overall cost of funds.

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Operator [20]

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The next question comes from Austin Nicholas with Stephens.

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Austin Lincoln Nicholas, Stephens Inc., Research Division - VP and Research Analyst [21]

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Yes, most of my questions were answered, but maybe just on fee income. You may have touched on this, but the mortgage was a little bit weaker than maybe seasonally expected. Is that just spreads in volume tightening? Or was there any attrition of MLOs or some lower headcount there?

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [22]

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Yes, Austin, this is Dan. We had really what I would consider minor contraction in the margin side, really more of a volume issue that went into the gain on sale category. So we saw some -- if you look at the balance sheet, we saw some growth in the mortgage portfolio. So we had more ARMs go in and then some move out of the construction side of things, but lower than expectation in terms of the gain on sale business and refinances being down as well. So less about margin, more about off on production.

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [23]

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Yes, Austin, this is Phil. I would agree. I mean overall loan production in mortgage was up about 38% linked quarter, but it was off from a refinancing standpoint by about 19% and then a larger majority of what got produced went into the portfolio as supposed to being sold. And the gain on sale margin was off about 9 basis points, but that's not nearly, as Dan suggested, the bigger contributor there to really just where the volume of production ended up. And by -- and just in looking forward, I would suggest that we are viewing that gain on sale level of fee income to be kind of what it is right now and going forward, especially if that's going to continue to make their way to tighten. We don't see that rebounding in any significant way, and just kind of being conservative as that being a baseline for gain on sale for the rest of the year.

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Austin Lincoln Nicholas, Stephens Inc., Research Division - VP and Research Analyst [24]

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Understood. And then maybe just on loan growth. That was pretty strong in the quarter. I guess, as we look out, is a high single-digit level, kind of a slightly slower rate a good expectation? Or has growth picked up, and then maybe -- what are you seeing in the book in terms of paydowns in the CRE portfolio or payoffs?

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [25]

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Yes, Austin, Dan. The -- I would -- we kind of went into this year assuming a couple of things. We would continue the organic momentum that we've carried forward from Sandy Spring and then assuming that there could be a little bit of natural pullback in terms of the production from the integration of WashingtonFirst, just as they get to know our system. What we found is that they hit the ground running. So our collective, particularly in our commercial space group, is doing really well. So we went into the year thinking that 7%, 8% loan growth was probably going to be where we would expect and end up, and I think that that's -- I think we're probably in the 8% to 10% range at this point in terms of our outlook and the wildcard in that is really what goes into the portfolio for mortgage -- from a -- appetite for the nature of that business as well as just managing liquidity. That will be the spigot that we use as how much mortgage production we want in portfolio. But I think 8% to 10% is reasonable. In terms of runoff or paydowns, I don't think there's anything kind of out of turn there that we're seeing from that book. On the competitive side, there are nonbank lenders active in the market for more of the longer-term, income-producing real estate properties. That's not moving things out of the portfolio, but it's certainly competitive issue as we try to win new business. But that seems to be a little bit more active in 2018 than it had been prior years.

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Austin Lincoln Nicholas, Stephens Inc., Research Division - VP and Research Analyst [26]

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Understood. And then maybe just one last one. As you think about M&A with Washington, first cost saves kind of coming out in the fourth quarter. If you look out to '19, maybe what's the message on another potential partner or transaction and what would that look like? Would it be more of a deposit play? And then just any kind of color on the message on M&A?

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [27]

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Sure. I think that from a broad perspective, we continue to seek to be opportunistic, both in bank and nonbank opportunities. Nonbank would be wealth or insurance. So we've always -- we are always building relationships there. And on the banking front, I think one is, your timing is appropriate in terms of seeing 2018 play out. The WashingtonFirst transaction work, which we believe that it certainly is and the integration has gone well. I guess the -- before answering your question a little bit more directly, I think it's important to note that we are focused on continuing to grow. So we are not going to be hesitant to grow or cross any thresholds. It's our investments inside the company and adding the necessary talent to continue to grow Sandy Spring in a very good way going forward. And so, overall, there is not a hesitancy. But at the same time, we are not just going to grow for growth's sake. So we will look for opportunities on the M&A front from a banking standpoint that are either going to enhance some aspect of our franchise, or complement a product line, or access to a geography where we are not, or look for folks that do bring a deposit base that is more akin to what we currently have. And there aren't very many of those in the market, as you probably know, that have the noninterest-bearing demand deposit base that we have. And those would tend to be smaller franchises on the edges of the market we're in now. And we would -- that would be something that would be attractive to us.

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Operator [28]

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(Operator Instructions) The next question comes from Steven Comery with Gabelli & Company.

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Steven Comery, G. Research, LLC - Research Analyst [29]

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I just want to be really clear on the noninterest expense kind of explanation you guys gave. So of the $1.4 million increase in the quarter, so the 80% or so was seasonal or sort of merger-related, so if you take 80% of $1.4 million, it's $1.1 million. So in order to think about the 2% to 3% growth, we should take out that $1.1 million from this quarter's print and then increase that number by 2% to 3% per quarter. Is that the right way to think about it?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [30]

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Steve, this is Phil. I think that's probably the most conservative way to do it. I was probably more thinking that the overall expense on kind of an annual basis would be to increase 2% to 3%. And I think if we look -- and we can do this -- we look back historically, we have historically had higher expense levels in the second quarter of each year and then it mitigates back and moves forward. So I think that that's kind of what we're getting at here. I think there may also have been in that -- and this is in that merger-related category -- some timings of some things that didn't get taken in the first quarter that ultimately got done in the second quarter just because of people being focused on integration and systems conversion that probably made that first quarter number look a little bit lower that of true merger expenses than maybe it normally would be. So I think those are the other elements of why I would give you that estimate as to how much of that is really in 1 of those 2 categories.

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Steven Comery, G. Research, LLC - Research Analyst [31]

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Okay, okay. That's definitely very helpful. I think maybe another way to look at the same sort of question is, do you guys have like an expectation for where the efficiency ratio goes, both in Q3 and then kind of for the whole year 2018?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [32]

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Yes, I think that that's exactly the other piece of that. And of course anything related to the efficiency ratio at this point is also taken into consideration, what we just kind of commented on, on the fees side, too, because I think that had a fair amount of impact to where a lot of people thought the quarter would be and also the efficiency ratio itself, which was the lack of any significant movement in a couple of the fee lines. But to answer your question, I think that we believe that the efficiency ratio for the rest of the year should settle into that low-50%, 51% level. The 52.9% this time, I'm not certainly happy about where we landed there. I think that it is a little outside, but at same time that 49% in a quarter we popped in there on the first quarter was probably pretty low as well. So 50%, 51% is, I think, where we would like to see it kind of settle down at this point, knowing everything that we do, having gone through a couple of quarters.

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Steven Comery, G. Research, LLC - Research Analyst [33]

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That 50%, 51% number's on a quarterly basis, right?

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Philip J. Mantua, Sandy Spring Bancorp, Inc. - Executive VP & CFO [34]

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Yes. That's right. It will blend out for the whole year, but in terms of looking at it quarter-to-quarter here going forward in that range is what we would probably kind of target where we would like it to be.

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Operator [35]

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This concludes our question-and-answer session. I would like to turn the conference back over to Dan Schrider for any closing remarks.

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Daniel J. Schrider, Sandy Spring Bancorp, Inc. - President, CEO & Non-Independent Director [36]

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Thank you, and thanks, everyone for joining the call and participating this afternoon. As always, we appreciate your feedback. And to help us evaluate the effectiveness of the call, you can e-mail any comments you have to ir@sandyspringbank.com. Thank you again, and have a great afternoon.

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Operator [37]

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The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.