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) | % | 1.32 | % | 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. | ||||||||||||||||||||
