Sandy Spring Bancorp Reports Second Quarter Earnings of $24.7 Million

OLNEY, Md., July 25, 2023 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income of $24.7 million ($0.55 per diluted common share) for the quarter ended June 30, 2023, compared to net income of $51.3 million ($1.14 per diluted common share) for the first quarter of 2023 and $54.8 million ($1.21 per diluted common share) for the second quarter of 2022.

Current quarter core earnings were $27.1 million ($0.60 per diluted common share), compared to $52.3 million ($1.16 per diluted common share) for the quarter ended March 31, 2023 and $44.2 million ($0.98 per diluted common share) for the quarter ended June 30, 2022. Core earnings exclude the after-tax impact of amortization of intangibles, investment securities gains or losses and other non-recurring or extraordinary items. The current quarter's drivers in the decline of net income and core earnings compared to the linked quarter were lower net interest income coupled with higher provision for credit losses and higher non-interest expense. The provision for credit losses for the current quarter amounted to $5.1 million compared to a credit to provision of $21.5 million for the first quarter of 2023 and a provision of $3.0 million for the second quarter of 2022. The current quarter's provision was primarily the result of an individual reserve established on one large commercial real estate relationship along with the several charge-offs of non-accrual consumer loans.

“As we have stated all year, we are keenly focused on growing client relationships and core funding. Despite the challenging banking environment in the first half of the year, which resulted in quarterly deposit outflow that was mostly observed early in the second quarter, our core deposits began to stabilize in the second half of this quarter. The decrease in non-interest bearing accounts can be attributed to clients shifting balances to interest bearing alternatives,” said Daniel J. Schrider, Chairman, President and CEO of Sandy Spring Bank.

“While the environment is challenging, we remain committed to taking care of our clients, engaging with our communities and helping businesses of all sizes in the Greater Washington region,” Schrider added.

Second Quarter Highlights

• Total assets at June 30, 2023 remained stable at $14.0 billion compared to $14.1 billion at March 31, 2023.
  
  
• Total loans remained at $11.4 billion at June 30, 2023 compared to March 31, 2023. Total commercial real estate and business loans were level quarter-over-quarter, while residential mortgage loans grew 4% due to the migration of construction loans into the residential mortgage portfolio.
  
  
• Deposits decreased 1% to $11.0 billion at June 30, 2023 compared to $11.1 billion at March 31, 2023, as noninterest-bearing deposits declined 5%, primarily in commercial checking accounts, while interest-bearing deposits were relatively unchanged, as the 41% and 6% respective growth in savings accounts and time deposits was offset by the 9% decline in money market accounts.
  
  
• Total borrowings in the current quarter declined by $28.0 million or 2% over amounts at March 31, 2023. Fed funds purchased and FHLB advances decreased by $205.0 million and $150.0 million, respectively, which was partially offset by $300.0 million of borrowings through Federal Reserve Bank's Bank Term Funding Program.
  
  
• Credit quality metrics remained at low levels during the current quarter compared to the previous quarter. The ratio of non-performing loans to total loans was 0.44% at June 30, 2023 compared to 0.41% for the previous quarter and 0.40% for the quarter ended June 30, 2022.
  
  
• Net interest income for the second quarter of 2023 declined $6.8 million or 7% compared to the previous quarter and $15.5 million or 15% compared to the second quarter of 2022. During the recent quarter, the growth in interest income of $6.8 million or 5% was more than offset by the $13.6 million or 25% increase in interest expense, a result of the increases in rates paid on deposits and higher borrowing costs.
  
  
• The net interest margin was 2.73% for the second quarter of 2023 compared to 2.99% for the first quarter of 2023 and 3.49% for the second quarter of 2022. Higher rates paid on interest-bearing liabilities, driven by higher market rates, competition for deposits, and customer movement of excess funds out of noninterest-bearing accounts, outpaced the increase in the yield on interest-earning assets. Compared to the linked quarter, the rate paid on interest-bearing liabilities rose 44 basis points, while the yield on interest-earning assets increased 12 basis points, resulting in the quarterly margin compression of 26 basis points.
  
  
• Provision for credit losses directly attributable to the funded loan portfolio for the current quarter was a charge of $4.5 million compared to a credit to provision of $18.9 million in the previous quarter and a charge of $3.0 million in the prior year quarter. During the current quarter, the provision charge was mainly associated with an individual reserve established on one large commercial real estate relationship along with the several charge-offs of non-accrual consumer loans. In addition, during the current quarter the Company recorded a provision charge of $0.6 million associated with unfunded loan commitments.
  
  
• Non-interest income for the second quarter of 2023 increased by 8% or $1.2 million compared to the linked quarter and declined by 51% or $18.1 million compared to the prior year quarter. Quarter-over-quarter increase was mainly driven by higher income from mortgage banking activities, BOLI income and service charges on deposit accounts. Year-over-year decrease was primarily a result of the sale of the Company's insurance segment during the second quarter of 2022 and the associated $16.7 million gain. Excluding this one-time gain, non-interest income declined by 7% or $1.4 million year-over-year due to lower insurance commission income as a result of the aforementioned sale and lower bank card fee income due to regulatory restrictions on transaction fees that became effective for the Company in the second half of 2022.
  
  
• Non-interest expense for the second quarter of 2023 increased $2.8 million or 4% compared to the first quarter of 2023 and $4.1 million or 6% compared to the prior year quarter. The current quarter's increase was mainly due to a higher compensation expense driven by $1.9 million of severance related expenses associated with staffing adjustments as a part of the broader cost control initiatives implemented by management during the current year.
  
  
• Return on average assets (“ROA”) for the quarter ended June 30, 2023 was 0.70% and return on average tangible common equity (“ROTCE”) was 8.93% compared to 1.49% and 19.10%, respectively, for the first quarter of 2023 and 1.69% and 20.83%, respectively, for the second quarter of 2022. On a non-GAAP basis, the current quarter's core ROA was 0.77% and core ROTCE was 9.43% compared to 1.52% and 19.11%, respectively, for the previous quarter and 1.37% and 16.49%, respectively, for the second quarter of 2022.
  
  
• The GAAP efficiency ratio was 64.22% for the second quarter of 2023, compared to 58.55% for the first quarter of 2023 and 46.03% for the second quarter of 2022. The non-GAAP efficiency ratio was 60.68% for the second quarter of 2023 compared to 56.87% for the first quarter of 2023 and 49.79% for the prior year quarter. The increase in both the GAAP and non-GAAP efficiency ratios (reflecting a decrease in efficiency) in the current quarter compared to the previous quarter and the second quarter of the prior year was the result of declines in net revenue from the prior periods coupled with the growth in non-interest expense.
  

Balance Sheet and Credit Quality

Total assets were $14.0 billion at June 30, 2023, as compared to $14.1 billion at March 31, 2023. Diminished loan demand coupled with low payoff activity during the current quarter resulted in total loans remaining relatively unchanged at $11.4 billion as of June 30, 2023. Total commercial real estate and business loans declined by $50.8 million or 1%, while total mortgage and consumer loans grew by $25.2 million or 1%. Overall, the loan portfolio mix stayed relatively unchanged compared to the previous quarter.

Deposits decreased $117.1 million or 1% to $11.0 billion at June 30, 2023 compared to $11.1 billion at March 31, 2023. During this period total noninterest-bearing deposits declined $148.8 million or 5%, primarily in commercial checking accounts, while the level of interest-bearing deposits remained steady. During the current quarter, savings accounts and time deposits grew 41% and 6%, respectively, while money market accounts declined by 9%. Quarterly deposit outflow was mostly observed early in the current quarter and stabilized during May and June. Core deposits, which exclude brokered relationships, represented 88% of the total deposits at the end of the current and previous quarter, respectively, reflecting the stability of the core deposit base. Total uninsured deposits at June 30, 2023 were approximately 30% of the total deposits. The Company offers its customers reciprocal deposit arrangements, which provide FDIC deposit insurance for accounts that would otherwise exceed deposit insurance limits. During the quarter ended June 30, 2023, balances in the Company's reciprocal deposit accounts increased by $230.0 million.

Total borrowings declined by $28.0 million or 2% at June 30, 2023 as compared to the previous quarter, driven by a $205.0 million and $150.0 million reductions in fed funds purchased and FHLB advances, respectively, partially offset by $300.0 million of borrowings through the Federal Reserve Bank's Bank Term Funding Program. At June 30, 2023, contingent liquidity, which consists of available FHLB borrowings, available funds through the Federal Reserve Bank's discount window and the Bank Term Funding Program, as well as excess cash and unpledged investment securities totaled $4.4 billion or 132% of uninsured deposits. In addition, the Company also had $1.0 billion in available fed funds, which provided total coverage of 163% of uninsured deposits.

The tangible common equity ratio increased to 8.51% of tangible assets at June 30, 2023, compared to 8.40% at March 31, 2023. This increase reflected the impact of declining tangible assets while tangible common equity remained relatively unchanged quarter-over-quarter, as net retained earnings were offset by higher unrealized losses on available-for-sale investment securities.

At June 30, 2023, the Company had a total risk-based capital ratio of 14.66%, a common equity tier 1 risk-based capital ratio of 10.69%, a tier 1 risk-based capital ratio of 10.69%, and a tier 1 leverage ratio of 9.42%. All of these ratios remain well in excess of the mandated minimum regulatory requirements.

Non-performing loans include non-accrual loans and accruing loans 90 days or more past due. Overall credit quality remained stable at June 30, 2023 compared March 31, 2023, as the ratio of non-performing loans to total loans was 0.44% compared to 0.41%. These levels of non-performing loans compare to 0.40% for the prior year quarter and continue to indicate stable credit quality during a period of economic uncertainty. At June 30, 2023, non-performing loans totaled $49.5 million, compared to $47.2 million at March 31, 2023 and $43.5 million at June 30, 2022. Total net charge-offs for the current quarter amounted to $1.8 million compared to $0.3 million in net recoveries for the first quarter of 2023 and insignificant net charge-offs for the second quarter of 2022. The current quarter's net charge-offs occurred within the consumer loan portfolio due to the elimination of several non-accrual loans.

At June 30, 2023, the allowance for credit losses was $120.3 million or 1.06% of outstanding loans and 243% of non-performing loans, compared to $117.6 million or 1.03% of outstanding loans and 249% of non-performing loans at the end of the previous quarter and $113.7 million or 1.05% of outstanding loans and 261% of non-performing loans at the end of the second quarter of 2022. The increase in the allowance for the current quarter compared to the previous quarter reflects mainly an individual reserve recorded on a single commercial real estate relationship. A majority of the other assumptions within the allowance for credit losses were relatively unchanged at June 30, 2023 compared to March 31, 2023.

Income Statement Review

Quarterly Results

Net income was $24.7 million ($0.55 per diluted common share) for the three months ended June 30, 2023 compared to $51.3 million ($1.14 per diluted common share) for the three months ended March 31, 2023 and $54.8 million ($1.21 per diluted common share) for the prior year quarter. Current quarter's core earnings were $27.1 million ($0.60 per diluted common share), compared to $52.3 million ($1.16 per diluted common share) for the previous quarter and $44.2 million ($0.98 per diluted common share) for the quarter ended June 30, 2022. The decline in the current quarter's net income and core earnings compared to the previous quarter was the result of lower net interest income coupled with higher provision for credit losses and non-interest expense. Year-over-year decline in quarterly net income was mainly attributable to a $16.7 million gain earned during the prior year quarter associated with the sale of the Company's insurance segment. Excluding this one-time gain, the decrease in net income was due to lower net interest income and non-interest income along with higher non-interest expense.

Net interest income for the second quarter of 2023 decreased $6.8 million or 7% compared to the previous quarter and $15.5 million or 15% compared to the second quarter of 2022. Both quarterly and year-over-year decreases in net interest income were driven by higher interest expense, a result of higher funding costs, which outpaced growth in interest income. During the past twelve months, loan growth coupled with the rising interest rate environment was primarily responsible for a $44.2 million increase in interest income. This growth in interest income was more than offset by the $59.7 million growth in interest expense as funding costs have also risen in response to the rising rate environment and significant competition for deposits. Interest income growth occurred in all categories of commercial loans and, to a lesser degree, in residential mortgage loans, consumer loans and investment securities income. Interest expense grew primarily due to time and money market deposits, as well as the higher cost of borrowings in the current year period compared to the same period of the prior year.

The net interest margin was 2.73% for the second quarter of 2023 compared to 2.99% for the first quarter of 2023 and 3.49% for the second quarter of 2022. The contraction of the net interest margin for the current quarter was due to the higher rate paid on interest-bearing liabilities, which outpaced the increase in the yield on interest-earning assets. The overall rate and yield increases were driven by the multiple federal funds rate increases that occurred over the preceding twelve months coupled with the competition for deposits in the market, and customer movement of excess funds out of noninterest-bearing accounts into higher yielding products. As compared to the prior year quarter, while the yield on interest-earning assets increased 100 basis points, while the rate paid on interest-bearing liabilities rose 250 basis points resulting in the margin compression of 76 basis points.

The total provision for credit losses was $5.1 million for the second quarter of 2023 compared to a credit to provision of $21.5 million for the previous quarter and a provision of $3.0 million for the second quarter of 2022. The provision for credit losses directly attributable to the funded loan portfolio was $4.5 million for the current quarter compared to a credit to the provision of $18.9 million for the first quarter of 2023 and the prior year quarter’s provision of $3.0 million. The current quarter's provision mainly reflects an individual reserve established on a single large commercial real estate relationship along with the several charge-offs of non-accrual consumer loans.

Non-interest income for the second quarter of 2023 increased by 8% or $1.2 million compared to the linked quarter and declined by 51% or $18.1 million compared to the prior year quarter. The current quarter's increase in non-interest income as compared to the previous quarter was mainly driven by higher income from mortgage banking activities, BOLI mortality-related income and service charges on deposit accounts. Year-over-year decrease was primarily a result of a sale of the Company's insurance segment during the second quarter of 2022 and the associated $16.7 million gain on sale. Excluding this one-time gain on sale, non-interest income declined by 7% or $1.4 million from the prior year quarter due to insurance commissions income as a result of the aforementioned sale and lower bank card income due to regulatory restrictions on transaction fees.

Non-interest expense for the second quarter of 2023 increased $2.8 million or 4% compared to the first quarter of 2023 and $4.1 million or 6% compared to the second quarter of 2022. The quarterly increase in non-interest expense is mainly attributable to a higher compensation and benefits costs associated with $1.9 million of severance expenses related to staffing adjustments made during the current quarter as a part of the broader cost control initiatives implemented by management during the current year. Higher non-interest expense for the current quarter, as compared to the prior year quarter, was due to higher FDIC insurance expense, a result of the two basis points increase in the assessment rate for all banks that became effective in 2023, higher professional and service fees related to the Company's investments in technology projects, and higher marketing expense associated with targeted advertising campaigns aimed at growing deposit relationships.

For the second quarter of 2023, the GAAP efficiency ratio was 64.22% compared to 58.55% for the first quarter of 2023 and 46.03% for the second quarter of 2022. The GAAP efficiency ratio rose from the prior year quarter primarily the result of the 24% decrease in GAAP revenue in combination with the 6% increase in GAAP non-interest expense. The non-GAAP efficiency ratio was 60.68% for the current quarter as compared to 56.87% for the first quarter of 2023 and 49.79% for the second quarter of 2022. The increase in the non-GAAP efficiency ratio (reflecting a decrease in efficiency) from the second quarter of the prior year to the current year quarter was primarily the result of the 13% decline in non-GAAP revenue, while non-GAAP expenses rose 6%.

ROA for the quarter ended June 30, 2023 was 0.70% and ROTCE was 8.93% compared to 1.49% and 19.10%, respectively, for the first quarter of 2023 and 1.69% and 20.83%, respectively, for the second quarter of 2022. On a non-GAAP basis, the current quarter's core ROA was 0.77% and core ROTCE was 9.43% compared to 1.52% and 19.11% for the first quarter of 2023 and 1.37% and 16.49%, respectively, for the second quarter of 2022.

Year-to-Date Results

The Company recorded net income of $76.0 million for the six months ended June 30, 2023 compared to net income of $98.7 million for the prior year. Core earnings were $79.4 million for the six months ended June 30, 2023 compared to $89.3 million for the prior year. Year-to-date net income declined as a result of lower net interest income, as the growth in interest expense exceeded the increase in interest income, a decline in non-interest income and higher non-interest expense. These contributors to the decline in net income during the current year-to-date period, were partially offset by a lower provision for credit losses as a result of significant credit recorded during the first quarter of the current year.

For the six months ended June 30, 2023, net interest income decreased $19.6 million compared to the prior year as a result of the $109.2 million increase in interest expense, partially offset by the $89.6 million increase in interest income. The increase in interest expense was primarily due to the additional interest expense associated with money market and time deposit accounts and, to a lesser degree, FHLB and Federal Reserve Bank borrowings. The net interest margin declined to 2.86% for the six months ended June 30, 2023, compared to 3.49% for the prior year, primarily as a result of higher funding cost due to the rising interest rate environment and market competition for deposits over the period.

The provision for credit losses for the six months ended June 30, 2023 amounted to a credit of $16.5 million as compared to a charge of $4.7 million for 2022. The significant credit to the provision for the six months ended June 30, 2023 was a reflection of the improving regional forecasted unemployment rate, observed during the early part of the current year, coupled with the continued strong credit performance of the loan portfolio.

For the six months ended June 30, 2023, non-interest income decreased 41% to $33.1 million compared to $55.8 million for 2022. During the prior year, Company realized a $16.7 million gain on the sale of its insurance segment. Excluding the gain, non-interest income decreased 15% or $6.0 million, driven by a $2.9 million decrease in insurance commissions, a $2.6 million decrease in bank card fees and a $0.7 million decrease in income from mortgage banking activities. The decline in income from mortgage banking activities is the result of the rising interest rate environment, which continues to dampen home sales and refinancing activity. Insurance commission income declined due to the disposition of the Company's insurance business during the second quarter of the prior year. Fees from bank cards diminished as a result of regulatory restrictions on transaction fees effective in the second half of the prior year. These decreases in non-interest income year-over-year, were partially offset by a $0.7 million increase in BOLI mortality-related income.

Non-interest expense increased 7% to $135.4 million for the six months ended June 30, 2023, compared to $127.1 million for 2022. The drivers of the increase in non-interest expense were a $3.5 million increase in professional fees, a $1.2 million increase in software expenses, a $0.9 million increase in compensation and benefits, and a $0.7 million increase in marketing expense. Year-over-year increases in both professional fees and software expenses were mainly associated with the Company's investments in technology and software projects. Increase in compensation and benefits expense was driven by severance related expenses associated with staffing adjustments. Increase in marketing expense over the prior year was due to targeted advertising campaigns aimed at growing deposit relationships.

For the six months ended June 30, 2023, the GAAP efficiency ratio was 61.31% compared to 48.30% for the same period in 2022. The non-GAAP efficiency ratio for the current year was 58.73% compared to the 49.57% for the prior year. The growth in the current year’s non-GAAP efficiency ratio compared to the prior year, indicating a decline in efficiency, was the result of the 10% decrease in non-GAAP revenue combined with the 6% growth in non-GAAP non-interest expense.

Explanation of Non-GAAP Financial Measures

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

• Tangible common equity and related measures are non-GAAP measures that exclude the impact of goodwill and other intangible assets.
• The non-GAAP efficiency ratio excludes amortization of intangible assets, investment securities gains/(losses), merger, acquisition and disposal expense, gain on disposal of assets, severance expense and contingent payment expense, and includes tax-equivalent income.
• Core earnings and the related measures of core earnings per diluted common share, core return on average assets and core return on average tangible common equity reflect net income exclusive of amortization of intangible assets, investment securities gains/(losses) and other non-recurring or extraordinary items, on a net of tax basis.
• Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.

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

Conference Call

The Company’s management will host a conference call to discuss its second 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 1-833-470-1428. Please use the following access code: 573109. 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 August 8, 2023. A replay of the teleconference will be available through the same time period by calling 1-866-813-9403 under conference call number 708305.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank, a premier community bank in the Greater Washington, D.C. region. With over 50 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of wealth management services.

Category: Webcast
Source: Sandy Spring Bancorp, Inc.
Code: SASR-E

For additional information or questions, please contact:
Daniel J. Schrider, Chair, 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: [e-mail]
[e-mail]

Website: www.sandyspringbank.com
Media Contact:
Jen Schell, Senior Vice President
301-570-8331
[e-mail]

Forward-Looking Statements

Sandy Spring Bancorp’s forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2022, 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 June 30,								%			Six Months Ended June 30,								%
(Dollars in thousands, except per share data)		2023				2022				Change			2023				2022				Change
Results of operations:
Net interest income		$	90,471			$	105,950			(15	)%		$	187,773			$	207,401			(9	)%
Provision/ (credit) for credit losses			5,055				3,046			66				(16,481	)			4,681			N/M
Non-interest income			17,176				35,245			(51	)			33,127				55,840			(41	)
Non-interest expense			69,136				64,991			6				135,441				127,138			7
Income before income tax expense			33,456				73,158			(54	)			101,940				131,422			(22	)
Net income			24,745				54,800			(55	)			75,998				98,735			(23	)
Net income attributable to common shareholders		$	24,712			$	54,606			(55	)		$	75,821			$	98,259			(23	)
Pre-tax pre-provision net income(1)		$	38,511			$	76,204			(49	)		$	85,459			$	136,103			(37	)
Return on average assets			0.70	%			1.69	%						1.09	%			1.56	%
Return on average common equity			6.46	%			14.97	%						10.12	%			13.39	%
Return on average tangible common equity(1)			8.93	%			20.83	%						13.88	%			18.62	%
Net interest margin			2.73	%			3.49	%						2.86	%			3.49	%
Efficiency ratio - GAAP basis(2)			64.22	%			46.03	%						61.31	%			48.30	%
Efficiency ratio - Non-GAAP basis(2)			60.68	%			49.79	%						58.73	%			49.57	%
Per share data:
Basic net income per common share		$	0.55			$	1.21			(55	)%		$	1.69			$	2.18			(22	)%
Diluted net income per common share		$	0.55			$	1.21			(55	)		$	1.69			$	2.17			(22	)
Weighted average diluted common shares			44,888,759				45,111,693			—				44,876,873				45,223,086			(1	)
Dividends declared per share		$	0.34			$	0.34			—			$	0.68			$	0.68			—
Book value per common share		$	34.31			$	33.10			4			$	34.31			$	33.10			4
Tangible book value per common share(1)		$	25.82			$	24.45			6			$	25.82			$	24.45			6
Outstanding common shares			44,862,369				44,629,697			1				44,862,369				44,629,697			1
Financial condition at period-end:
Investment securities		$	1,463,554			$	1,595,424			(8	)%		$	1,463,554			$	1,595,424			(8	)%
Loans			11,369,639				10,786,290			5				11,369,639				10,786,290			5
Assets			13,994,545				13,303,009			5				13,994,545				13,303,009			5
Deposits			10,958,922				10,969,461			—				10,958,922				10,969,461			—
Stockholders' equity			1,539,032				1,477,169			4				1,539,032				1,477,169			4
Capital ratios:
Tier 1 leverage(3)			9.42	%			9.53	%						9.42	%			9.53	%
Common equity tier 1 capital to risk-weighted assets(3)			10.69	%			10.42	%						10.69	%			10.42	%
Tier 1 capital to risk-weighted assets(3)			10.69	%			10.42	%						10.69	%			10.42	%
Total regulatory capital to risk-weighted assets(3)			14.66	%			14.46	%						14.66	%			14.46	%
Tangible common equity to tangible assets(4)			8.51	%			8.45	%						8.51	%			8.45	%
Average equity to average assets			10.89	%			11.30	%						10.80	%			11.63	%
Credit quality ratios:
Allowance for credit losses to loans			1.06	%			1.05	%						1.06	%			1.05	%
Non-performing loans to total loans			0.44	%			0.40	%						0.44	%			0.40	%
Non-performing assets to total assets			0.36	%			0.33	%						0.36	%			0.33	%
Allowance for credit losses to non-performing loans			243.21	%			261.44	%						243.21	%			261.44	%
Annualized net charge-offs/ (recoveries) to average loans(5)			0.06	%			—	%						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 Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, merger, acquisition and disposal expense, severance expense and contingent payment expense from non-interest expense; and investment securities gains/ (losses) and gain on disposal of assets 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 June 30, 2023.
(4)		The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding goodwill and other intangible assets into stockholders' equity after deducting goodwill and other intangible assets. See the Reconciliation Table included with these Financial Highlights.
(5)		Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

Sandy Spring Bancorp, Inc. and Subsidiaries RECONCILIATION TABLE - UNAUDITED (CONTINUED) OPERATING EARNINGS - METRICS
		Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in thousands)		2023				2022				2023				2022
Core earnings (non-GAAP):
Net income (GAAP)		$	24,745			$	54,800			$	75,998			$	98,735
Plus/ (less) non-GAAP adjustments (net of tax)(1):
Merger, acquisition and disposal expense			—				793				—				793
Amortization of intangible assets			946				1,090				1,919				2,211
Severance expense			1,445				—				1,445				—
Gain on disposal of assets			—				(12,417	)			—				(12,417	)
Investment securities gains			—				(28	)			—				(34	)
Contingent payment expense			—				—				27				—
Core earnings (Non-GAAP)		$	27,136			$	44,238			$	79,389			$	89,288
Core earnings per diluted common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)			44,888,759				45,111,693				44,876,873				45,223,086
Earnings per diluted common share (GAAP)		$	0.55			$	1.21			$	1.69			$	2.17
Core earnings per diluted common share (non-GAAP)		$	0.60			$	0.98			$	1.77			$	1.97
Core return on average assets (non-GAAP):
Average assets (GAAP)		$	14,094,653			$	12,991,692			$	14,022,364			$	12,785,040
Return on average assets (GAAP)			0.70	%			1.69	%			1.09	%			1.56	%
Core return on average assets (non-GAAP)			0.77	%			1.37	%			1.14	%			1.41	%
Return/ Core return on average tangible common equity (non-
Net Income (GAAP)		$	24,745			$	54,800			$	75,998			$	98,735
Plus: Amortization of intangible assets (net of tax)			946				1,090				1,919				2,211
Net income before amortization of intangible assets		$	25,691			$	55,890			$	77,917			$	100,946
Average total stockholders' equity (GAAP)		$	1,535,465			$	1,468,036			$	1,513,817			$	1,487,170
Average goodwill			(363,436	)			(367,986	)			(363,436	)			(369,098	)
Average other intangible assets, net			(18,074	)			(23,801	)			(18,724	)			(24,580	)
Average tangible common equity (non-GAAP)		$	1,153,955			$	1,076,249			$	1,131,657			$	1,093,492
Return on average tangible common equity (non-GAAP)			8.93	%			20.83	%			13.88	%			18.62	%
Core return on average tangible common equity (non-GAAP)			9.43	%			16.49	%			14.15	%			16.47	%

(1)		Tax adjustments have been determined using the combined marginal federal and state rate of 25.47% and 25.64% for 2023 and 2022, respectively.

132Sandy Spring Bancorp, Inc. and Subsidiaries RECONCILIATION TABLE - UNAUDITED
		Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in thousands)		2023				2022				2023				2022
Pre-tax pre-provision net income:
Net income (GAAP)		$	24,745			$	54,800			$	75,998			$	98,735
Plus/ (less) non-GAAP adjustments:
Income tax expense			8,711				18,358				25,942				32,687
Provision/ (credit) for credit losses			5,055				3,046				(16,481	)			4,681
Pre-tax pre-provision net income (non-GAAP)		$	38,511			$	76,204			$	85,459			$	136,103
Efficiency ratio (GAAP):
Non-interest expense		$	69,136			$	64,991			$	135,441			$	127,138
Net interest income plus non-interest income		$	107,647			$	141,195			$	220,900			$	263,241
Efficiency ratio (GAAP)			64.22	%			46.03	%			61.31	%			48.30	%
Efficiency ratio (Non-GAAP):
Non-interest expense		$	69,136			$	64,991			$	135,441			$	127,138
Less non-GAAP adjustments:
Amortization of intangible assets			1,269				1,466				2,575				2,974
Merger, acquisition and disposal expense			—				1,067				—				1,067
Severance expense			1,939				—				1,939				—
Contingent payment expense			—				—				36				—
Non-interest expense - as adjusted		$	65,928			$	62,458			$	130,891			$	123,097
Net interest income plus non-interest income		$	107,647			$	141,195			$	220,900			$	263,241
Plus non-GAAP adjustment:
Tax-equivalent income			1,006				992				1,976				1,858
Less/ (plus) non-GAAP adjustment:
Investment securities gains			—				38				—				46
Gain on disposal of assets			—				16,699				—				16,699
Net interest income plus non-interest income - as adjusted		$	108,653			$	125,450			$	222,876			$	248,354
Efficiency ratio (Non-GAAP)			60.68	%			49.79	%			58.73	%			49.57	%
Tangible common equity ratio:
Total stockholders' equity		$	1,539,032			$	1,477,169			$	1,539,032			$	1,477,169
Goodwill			(363,436	)			(363,436	)			(363,436	)			(363,436	)
Other intangible assets, net			(17,280	)			(22,694	)			(17,280	)			(22,694	)
Tangible common equity		$	1,158,316			$	1,091,039			$	1,158,316			$	1,091,039
Total assets		$	13,994,545			$	13,303,009			$	13,994,545			$	13,303,009
Goodwill			(363,436	)			(363,436	)			(363,436	)			(363,436	)
Other intangible assets, net			(17,280	)			(22,694	)			(17,280	)			(22,694	)
Tangible assets		$	13,613,829			$	12,916,879			$	13,613,829			$	12,916,879
Tangible common equity ratio			8.51	%			8.45	%			8.51	%			8.45	%
Outstanding common shares			44,862,369				44,629,697				44,862,369				44,629,697
Tangible book value per common share		$	25.82			$	24.45			$	25.82			$	24.45

Sandy Spring Bancorp, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
(Dollars in thousands)		June 30, 2023				December 31, 2022				June 30, 2022
Assets
Cash and due from banks		$	96,482			$	88,152			$	84,215
Federal funds sold			240				193				291
Interest-bearing deposits with banks			333,405				103,887				136,773
Cash and cash equivalents			430,127				192,232				221,279
Residential mortgage loans held for sale (at fair value)			21,476				11,706				23,610
Investments held-to-maturity (fair values of $208,662, $220,123 and $250,915 at June 30, 2023, December 31, 2022 and June 30, 2022, respectively)			247,814				259,452				274,337
Investments available-for-sale (at fair value)			1,143,688				1,214,538				1,268,823
Other investments, at cost			72,052				69,218				52,264
Total loans			11,369,639				11,396,706				10,786,290
Less: allowance for credit losses - loans			(120,287	)			(136,242	)			(113,670	)
Net loans			11,249,352				11,260,464				10,672,620
Premises and equipment, net			71,203				67,070				63,243
Other real estate owned			611				645				739
Accrued interest receivable			42,388				41,172				33,459
Goodwill			363,436				363,436				363,436
Other intangible assets, net			17,280				19,855				22,694
Other assets			335,118				333,331				306,505
Total assets		$	13,994,545			$	13,833,119			$	13,303,009
Liabilities
Noninterest-bearing deposits		$	3,079,896			$	3,673,300			$	4,129,440
Interest-bearing deposits			7,879,026				7,280,121				6,840,021
Total deposits			10,958,922				10,953,421				10,969,461
Securities sold under retail repurchase agreements			74,510				61,967				110,744
Federal funds purchased			—				260,000				75,000
Federal Reserve Bank borrowings			300,000				—				—
Advances from FHLB			600,000				550,000				175,000
Subordinated debt			370,504				370,205				369,906
Total borrowings			1,345,014				1,242,172				730,650
Accrued interest payable and other liabilities			151,577				153,758				125,729
Total liabilities			12,455,513				12,349,351				11,825,840
Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 44,862,369, 44,657,054 and 44,629,697 at June 30, 2023, December 31, 2022 and June 30, 2022, respectively			44,862				44,657				44,630
Additional paid in capital			737,740				734,273				730,285
Retained earnings			882,055				836,789				799,707
Accumulated other comprehensive loss			(125,625	)			(131,951	)			(97,453	)
Total stockholders' equity			1,539,032				1,483,768				1,477,169
Total liabilities and stockholders' equity		$	13,994,545			$	13,833,119			$	13,303,009

Sandy Spring Bancorp, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
		Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in thousands, except per share data)		2023				2022				2023				2022
Interest income:
Interest and fees on loans		$	144,274			$	106,221			$	284,001			$	205,715
Interest on loans held for sale			307				145				459				343
Interest on deposits with banks			4,922				358				7,608				471
Interest and dividend income on investment securities:
Taxable			6,848				4,630				13,856				8,737
Tax-advantaged			1,795				2,554				3,565				4,678
Interest on federal funds sold			4				1				8				1
Total interest income			158,150				113,909				309,497				219,945
Interest expense:
Interest on deposits			51,325				3,795				92,113				6,088
Interest on retail repurchase agreements and federal funds purchased			4,191				201				6,295				255
Interest on advances from FHLB			8,216				17				15,423				17
Interest on subordinated debt			3,947				3,946				7,893				6,184
Total interest expense			67,679				7,959				121,724				12,544
Net interest income			90,471				105,950				187,773				207,401
Provision/ (credit) for credit losses			5,055				3,046				(16,481	)			4,681
Net interest income after provision/ (credit) for credit losses			85,416				102,904				204,254				202,720
Non-interest income:
Investment securities gains			—				38				—				46
Gain on disposal of assets			—				16,699				—				16,699
Service charges on deposit accounts			2,606				2,467				4,994				4,793
Mortgage banking activities			1,817				1,483				3,062				3,781
Wealth management income			9,031				9,098				18,023				18,435
Insurance agency commissions			—				812				—				2,927
Income from bank owned life insurance			1,251				703				2,158				1,498
Bank card fees			447				1,810				865				3,478
Other income			2,024				2,135				4,025				4,183
Total non-interest income			17,176				35,245				33,127				55,840
Non-interest expense:
Salaries and employee benefits			40,931				39,550				79,857				78,923
Occupancy expense of premises			4,764				4,734				9,611				9,768
Equipment expenses			3,760				3,559				7,877				7,095
Marketing			1,589				1,280				3,132				2,473
Outside data services			2,853				2,564				5,367				4,983
FDIC insurance			2,375				1,078				4,513				2,062
Amortization of intangible assets			1,269				1,466				2,575				2,974
Merger, acquisition and disposal expense			—				1,067				—				1,067
Professional fees and services			4,161				2,372				7,845				4,389
Other expenses			7,434				7,321				14,664				13,404
Total non-interest expense			69,136				64,991				135,441				127,138
Income before income tax expense			33,456				73,158				101,940				131,422
Income tax expense			8,711				18,358				25,942				32,687
Net income		$	24,745			$	54,800			$	75,998			$	98,735
Net income per share amounts:
Basic net income per common share		$	0.55			$	1.21			$	1.69			$	2.18
Diluted net income per common share		$	0.55			$	1.21			$	1.69			$	2.17
Dividends declared per share		$	0.34			$	0.34			$	0.68			$	0.68

Sandy Spring Bancorp, Inc. and Subsidiaries HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2023								2022
(Dollars in thousands, except per share data)		Q2				Q1				Q4				Q3				Q2				Q1
Profitability for the quarter:
Tax-equivalent interest income		$	159,156			$	152,317			$	146,332			$	131,373			$	114,901			$	106,902
Interest expense			67,679				54,045				38,657				17,462				7,959				4,585
Tax-equivalent net interest income			91,477				98,272				107,675				113,911				106,942				102,317
Tax-equivalent adjustment			1,006				970				1,032				951				992				866
Provision/ (credit) for credit losses			5,055				(21,536	)			10,801				18,890				3,046				1,635
Non-interest income			17,176				15,951				14,297				16,882				35,245				20,595
Non-interest expense			69,136				66,305				64,375				65,780				64,991				62,147
Income before income tax expense			33,456				68,484				45,764				45,172				73,158				58,264
Income tax expense			8,711				17,231				11,784				11,588				18,358				14,329
Net income		$	24,745			$	51,253			$	33,980			$	33,584			$	54,800			$	43,935
GAAP financial performance:
Return on average assets			0.70	%			1.49	%			0.98	%			0.99	%			1.69	%			1.42	%
Return on average common equity			6.46	%			13.93	%			9.23	%			8.96	%			14.97	%			11.83	%
Return on average tangible common equity			8.93	%			19.10	%			12.91	%			12.49	%			20.83	%			16.45	%
Net interest margin			2.73	%			2.99	%			3.26	%			3.53	%			3.49	%			3.49	%
Efficiency ratio - GAAP basis			64.22	%			58.55	%			53.23	%			50.66	%			46.03	%			50.92	%
Non-GAAP financial performance:
Pre-tax pre-provision net income		$	38,511			$	46,948			$	56,565			$	64,062			$	76,204			$	59,899
Core after-tax earnings		$	27,136			$	52,253			$	35,322			$	35,695			$	44,238			$	45,050
Core return on average assets			0.77	%			1.52	%			1.02	%			1.05	%			1.37	%			1.45	%
Core return on average common equity			7.09	%			14.20	%			9.60	%			9.53	%			12.09	%			12.13	%
Core return on average tangible common equity			9.43	%			19.11	%			13.02	%			12.86	%			16.49	%			16.45	%
Core earnings per diluted common share		$	0.60			$	1.16			$	0.79			$	0.80			$	0.98			$	0.99
Efficiency ratio - Non-GAAP basis			60.68	%			56.87	%			51.46	%			48.18	%			49.79	%			49.34	%
Per share data:
Net income attributable to common shareholders		$	24,712			$	51,084			$	33,866			$	33,470			$	54,606			$	43,667
Basic net income per common share		$	0.55			$	1.14			$	0.76			$	0.75			$	1.21			$	0.97
Diluted net income per common share		$	0.55			$	1.14			$	0.76			$	0.75			$	1.21			$	0.96
Weighted average diluted common shares			44,888,759				44,872,582				44,828,827				44,780,560				45,111,693				45,333,292
Dividends declared per share		$	0.34			$	0.34			$	0.34			$	0.34			$	0.34			$	0.34
Non-interest income:
Securities gains/ (losses)		$	—			$	—			$	(393	)		$	2			$	38			$	8
Gain/ (loss) on disposal of assets			—				—				—				(183	)			16,699				—
Service charges on deposit accounts			2,606				2,388				2,419				2,591				2,467				2,326
Mortgage banking activities			1,817				1,245				783				1,566				1,483				2,298
Wealth management income			9,031				8,992				8,472				8,867				9,098				9,337
Insurance agency commissions			—				—				—				—				812				2,115
Income from bank owned life insurance			1,251				907				950				693				703				795
Bank card fees			447				418				463				438				1,810				1,668
Other income			2,024				2,001				1,603				2,908				2,135				2,048
Total non-interest income		$	17,176			$	15,951			$	14,297			$	16,882			$	35,245			$	20,595
Non-interest expense:
Salaries and employee benefits		$	40,931			$	38,926			$	39,455			$	40,126			$	39,550			$	39,373
Occupancy expense of premises			4,764				4,847				4,728				4,759				4,734				5,034
Equipment expenses			3,760				4,117				3,859				3,825				3,559				3,536
Marketing			1,589				1,543				1,354				1,370				1,280				1,193
Outside data services			2,853				2,514				2,707				2,509				2,564				2,419
FDIC insurance			2,375				2,138				1,462				1,268				1,078				984
Amortization of intangible assets			1,269				1,306				1,408				1,432				1,466				1,508
Merger, acquisition and disposal expense			—				—				—				1				1,067				—
Professional fees and services			4,161				3,684				2,573				2,207				2,372				2,017
Other expenses			7,434				7,230				6,829				8,283				7,321				6,083
Total non-interest expense		$	69,136			$	66,305			$	64,375			$	65,780			$	64,991			$	62,147

Sandy Spring Bancorp, Inc. and Subsidiaries HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2023								2022
(Dollars in thousands, except per share data)		Q2				Q1				Q4				Q3				Q2				Q1
Balance sheets at quarter end:
Commercial investor real estate loans		$	5,131,210			$	5,167,456			$	5,130,094			$	5,066,843			$	4,761,658			$	4,388,275
Commercial owner-occupied real estate loans			1,770,135				1,769,928				1,775,037				1,743,724				1,767,326				1,692,253
Commercial AD&C loans			1,045,742				1,046,665				1,090,028				1,143,783				1,094,528				1,089,331
Commercial business loans			1,423,614				1,437,478				1,455,885				1,393,634				1,353,380				1,349,602
Residential mortgage loans			1,385,743				1,328,524				1,287,933				1,218,552				1,147,577				1,000,697
Residential construction loans			190,690				223,456				224,772				229,243				235,486				204,259
Consumer loans			422,505				421,734				432,957				423,034				426,335				419,911
Total loans			11,369,639				11,395,241				11,396,706				11,218,813				10,786,290				10,144,328
Allowance for credit losses - loans			(120,287	)			(117,613	)			(136,242	)			(128,268	)			(113,670	)			(110,588	)
Loans held for sale			21,476				16,262				11,706				11,469				23,610				17,537
Investment securities			1,463,554				1,528,336				1,543,208				1,587,279				1,595,424				1,586,441
Total assets			13,994,545				14,129,007				13,833,119				13,765,597				13,303,009				12,967,416
Noninterest-bearing demand deposits			3,079,896				3,228,678				3,673,300				3,993,480				4,129,440				4,039,797
Total deposits			10,958,922				11,075,991				10,953,421				10,749,486				10,969,461				10,852,794
Customer repurchase agreements			74,510				47,627				61,967				91,287				110,744				130,784
Total stockholders' equity			1,539,032				1,536,865				1,483,768				1,451,862				1,477,169				1,488,910
Quarterly average balance sheets:
Commercial investor real estate loans		$	5,146,632			$	5,136,204			$	5,082,697			$	4,898,683			$	4,512,937			$	4,220,246
Commercial owner-occupied real estate loans			1,773,039				1,769,680				1,753,351				1,755,891				1,727,325				1,683,557
Commercial AD&C loans			1,057,205				1,082,791				1,136,780				1,115,531				1,096,369				1,102,660
Commercial business loans			1,441,489				1,444,588				1,373,565				1,327,218				1,334,350				1,372,755
Residential mortgage loans			1,353,809				1,307,761				1,251,829				1,177,664				1,070,836				964,056
Residential construction loans			211,590				223,313				231,318				235,123				221,031				197,366
Consumer loans			423,306				424,122				426,134				422,963				421,022				424,859
Total loans			11,407,070				11,388,459				11,255,674				10,933,073				10,383,870				9,965,499
Loans held for sale			17,480				8,324				10,901				15,211				12,744				17,594
Investment securities			1,639,324				1,679,593				1,717,455				1,734,036				1,686,181				1,617,615
Interest-earning assets			13,423,589				13,316,165				13,134,234				12,833,758				12,283,834				11,859,803
Total assets			14,094,653				13,949,276				13,769,472				13,521,595				12,991,692				12,576,089
Noninterest-bearing demand deposits			3,137,971				3,480,433				3,833,275				3,995,702				4,001,762				3,758,732
Total deposits			10,928,038				11,049,991				11,025,843				10,740,999				10,829,221				10,542,029
Customer repurchase agreements			58,382				60,626				74,797				104,742				122,728				131,487
Total interest-bearing liabilities			9,257,652				8,806,720				8,310,278				7,892,230				7,377,045				7,163,641
Total stockholders' equity			1,535,465				1,491,929				1,460,254				1,486,427				1,468,036				1,506,516
Financial measures:
Average equity to average assets			10.89	%			10.70	%			10.61	%			10.99	%			11.30	%			11.98	%
Average investment securities to average earning assets			12.21	%			12.61	%			13.08	%			13.51	%			13.73	%			13.64	%
Average loans to average earning assets			84.98	%			85.52	%			85.70	%			85.19	%			84.53	%			84.03	%
Loans to assets			81.24	%			80.65	%			82.39	%			81.50	%			81.08	%			78.23	%
Loans to deposits			103.75	%			102.88	%			104.05	%			104.37	%			98.33	%			93.47	%
Assets under management		$	5,742,888			$	5,477,560			$	5,255,306			$	4,969,092			$	5,171,321			$	5,793,787
Capital measures:
Tier 1 leverage(1)			9.42	%			9.44	%			9.33	%			9.33	%			9.53	%			9.66	%
Common equity tier 1 capital to risk-weighted assets(1)			10.69	%			10.53	%			10.23	%			10.18	%			10.42	%			10.78	%
Tier 1 capital to risk-weighted assets(1)			10.69	%			10.53	%			10.23	%			10.18	%			10.42	%			10.78	%
Total regulatory capital to risk-weighted assets(1)			14.66	%			14.43	%			14.20	%			14.15	%			14.46	%			15.02	%
Book value per common share		$	34.31			$	34.37			$	33.23			$	32.52			$	33.10			$	32.97
Outstanding common shares			44,862,369				44,712,497				44,657,054				44,644,269				44,629,697				45,162,908

(1)		Estimated ratio at June 30, 2023.

Sandy Spring Bancorp, Inc. and Subsidiaries LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
		2023								2022
(Dollars in thousands)		June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
Non-performing assets:
Loans 90 days past due:
Commercial real estate:
Commercial investor real estate		$	—			$	215			$	—			$	—			$	—			$	—
Commercial owner-occupied real estate			—				—				—				—				—				—
Commercial AD&C			—				—				—				—				—				—
Commercial business			29				3,002				1,002				1,966				—				—
Residential real estate:
Residential mortgage			692				352				—				167				353				296
Residential construction			—				—				—				—				—				—
Consumer			—				—				—				34				—				—
Total loans 90 days past due			721				3,569				1,002				2,167				353				296
Non-accrual loans:
Commercial real estate:
Commercial investor real estate			20,381				15,451				9,943				14,038				11,245				11,743
Commercial owner-occupied real estate			4,846				4,949				5,019				6,294				7,869				8,083
Commercial AD&C			569				—				—				—				1,353				1,081
Commercial business			9,393				9,443				7,322				7,198				7,542				8,357
Residential real estate:
Residential mortgage			10,153				8,935				7,439				7,514				7,305				8,148
Residential construction			—				—				—				—				1				51
Consumer			3,396				4,900				5,059				5,173				5,692				6,406
Total non-accrual loans			48,738				43,678				34,782				40,217				41,007				43,869
Total restructured loans - accruing(1)			—				—				3,575				2,077				2,119				2,161
Total non-performing loans			49,459				47,247				39,359				44,461				43,479				46,326
Other assets and other real estate owned (OREO)			611				645				645				739				739				1,034
Total non-performing assets		$	50,070			$	47,892			$	40,004			$	45,200			$	44,218			$	47,360

		For the Quarter Ended,
(Dollars in thousands)		June 30, 2023				March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022				March 31, 2022
Analysis of non-accrual loan activity:
Balance at beginning of period		$	43,678			$	34,782			$	40,217			$	41,007			$	43,869			$	46,086
Non-accrual balances transferred to OREO			—				—				—				—				—				—
Non-accrual balances charged-off			(2,049	)			(126	)			(22	)			(197	)			(376	)			(265	)
Net payments or draws			(1,654	)			(10,212	)			(9,535	)			(3,509	)			(3,234	)			(2,787	)
Loans placed on non-accrual			9,276				19,714				5,467				4,212				948				1,503
Non-accrual loans brought current			(513	)			(480	)			(1,345	)			(1,296	)			(200	)			(668	)
Balance at end of period		$	48,738			$	43,678			$	34,782			$	40,217			$	41,007			$	43,869
Analysis of allowance for credit losses - loans:
Balance at beginning of period		$	117,613			$	136,242			$	128,268			$	113,670			$	110,588			$	109,145
Provision/ (credit) for credit losses - loans			4,454				(18,945	)			7,907				14,092				3,046				1,635
Less loans charged-off, net of recoveries:
Commercial real estate:
Commercial investor real estate			(14	)			(5	)			(1	)			—				(300	)			(19	)
Commercial owner-occupied real estate			(27	)			(26	)			(27	)			(10	)			(12	)			—
Commercial AD&C			—				—				—				—				—				—
Commercial business			363				(127	)			(13	)			(512	)			331				111
Residential real estate:
Residential mortgage			35				21				(50	)			(8	)			(9	)			120
Residential construction			—				—				—				(3	)			(5	)			—
Consumer			1,423				(179	)			24				27				(41	)			(20	)
Net charge-offs/ (recoveries)			1,780				(316	)			(67	)			(506	)			(36	)			192
Balance at the end of period		$	120,287			$	117,613			$	136,242			$	128,268			$	113,670			$	110,588
Asset quality ratios:
Non-performing loans to total loans			0.44	%			0.41	%			0.35	%			0.40	%			0.40	%			0.46	%
Non-performing assets to total assets			0.36	%			0.34	%			0.29	%			0.33	%			0.33	%			0.37	%
Allowance for credit losses to loans			1.06	%			1.03	%			1.20	%			1.14	%			1.05	%			1.09	%
Allowance for credit losses to non-performing loans			243.21	%			248.93	%			346.15	%			288.50	%			261.44	%			238.72	%
Annualized net charge-offs/ (recoveries) to average loans			0.06	%		(0.01		)%			—	%		(0.02		)%			—	%			0.01	%

(1)		Effective January 1, 2023, the Company adopted ASU 2022-02, which eliminated the accounting and recognition of troubled debt restructurings ("TDRs").

Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Three Months Ended June 30,
		2023										2022
(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		$	5,146,632			$	58,784		4.58	%		$	4,512,937			$	45,148		4.01	%
Commercial owner-occupied real estate loans			1,773,039				20,575		4.65				1,727,325				19,410		4.51
Commercial AD&C loans			1,057,205				20,663		7.84				1,096,369				11,727		4.29
Commercial business loans			1,441,489				22,715		6.32				1,334,350				15,820		4.76
Total commercial loans			9,418,365				122,737		5.23				8,670,981				92,105		4.26
Residential mortgage loans			1,353,809				11,957		3.53				1,070,836				8,878		3.32
Residential construction loans			211,590				1,808		3.43				221,031				1,710		3.10
Consumer loans			423,306				8,325		7.89				421,022				3,992		3.80
Total residential and consumer loans			1,988,705				22,090		4.45				1,712,889				14,580		3.41
Total loans(2)			11,407,070				144,827		5.09				10,383,870				106,685		4.12
Loans held for sale			17,480				307		7.04				12,744				145		4.56
Taxable securities			1,289,529				6,848		2.12				1,195,129				4,630		1.55
Tax-advantaged securities			349,795				2,248		2.57				491,052				3,082		2.51
Total investment securities(3)			1,639,324				9,096		2.22				1,686,181				7,712		1.83
Interest-bearing deposits with banks			359,093				4,922		5.50				200,560				358		0.72
Federal funds sold			622				4		2.87				479				1		0.81
Total interest-earning assets			13,423,589				159,156		4.75				12,283,834				114,901		3.75
Less: allowance for credit losses - loans			(117,587	)									(112,656	)
Cash and due from banks			96,487										84,931
Premises and equipment, net			70,691										62,422
Other assets			621,473										673,161
Total assets		$	14,094,653									$	12,991,692
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,439,418			$	3,606		1.00	%		$	1,488,034			$	414		0.11	%
Regular savings deposits			609,721				1,897		1.25				559,906				22		0.02
Money market savings deposits			3,041,652				22,516		2.97				3,376,742				1,497		0.18
Time deposits			2,699,276				23,306		3.46				1,402,777				1,862		0.53
Total interest-bearing deposits			7,790,067				51,325		2.64				6,827,459				3,795		0.22
Repurchase agreements			58,382				184		1.26				122,728				35		0.11
Federal funds purchased and Federal Reserve Bank borrowings			320,661				4,007		5.01				53,055				166		1.26
Advances from FHLB			718,132				8,216		4.59				3,809				17		1.74
Subordinated debt			370,410				3,947		4.26				369,994				3,946		4.27
Total borrowings			1,467,585				16,354		4.47				549,586				4,164		3.04
Total interest-bearing liabilities			9,257,652				67,679		2.93				7,377,045				7,959		0.43
Noninterest-bearing demand deposits			3,137,971										4,001,762
Other liabilities			163,565										144,849
Stockholders' equity			1,535,465										1,468,036
Total liabilities and stockholders' equity		$	14,094,653									$	12,991,692
Tax-equivalent net interest income and spread						$	91,477		1.82	%						$	106,942		3.32	%
Less: tax-equivalent adjustment							1,006										992
Net interest income						$	90,471									$	105,950
Interest income/earning assets									4.75	%									3.75	%
Interest expense/earning assets									2.02										0.26
Net interest margin									2.73	%									3.49	%

(1)		Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.47% and 25.64% for 2023 and 2022, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.0 million and $1.0 million in 2023 and 2022, respectively.
(2)		Non-accrual loans are included in the average balances.
(3)		Available-for-sale investments are presented at amortized cost.

Sandy Spring Bancorp, Inc. and Subsidiaries CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Six Months Ended June 30,
		2023										2022
(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		$	5,141,447			$	116,585		4.57	%		$	4,367,400			$	86,782		4.01	%
Commercial owner-occupied real estate loans			1,771,369				40,173		4.57				1,705,562				37,842		4.47
Commercial AD&C loans			1,069,927				40,502		7.63				1,099,498				22,320		4.09
Commercial business loans			1,443,030				44,915		6.28				1,353,446				32,174		4.79
Total commercial loans			9,425,773				242,175		5.18				8,525,906				179,118		4.24
Residential mortgage loans			1,330,912				23,375		3.51				1,017,741				16,652		3.27
Residential construction loans			217,419				3,622		3.36				209,264				3,267		3.15
Consumer loans			423,711				15,912		7.57				422,929				7,581		3.61
Total residential and consumer loans			1,972,042				42,909		4.37				1,649,934				27,500		3.34
Total loans(2)			11,397,815				285,084		5.04				10,175,840				206,618		4.09
Loans held for sale			12,927				459		7.10				15,155				343		4.53
Taxable securities			1,293,626				13,856		2.14				1,180,168				8,737		1.48
Tax-advantaged securities			365,721				4,458		2.44				471,919				5,633		2.39
Total investment securities(3)			1,659,347				18,314		2.21				1,652,087				14,370		1.74
Interest-bearing deposits with banks			299,606				7,608		5.12				229,257				471		0.41
Federal funds sold			477				8		3.50				650				1		0.43
Total interest-earning assets			13,370,172				311,473		4.69				12,072,989				221,803		3.70
Less: allowance for credit losses - loans			(127,189	)									(111,302	)
Cash and due from banks			95,776										75,750
Premises and equipment, net			69,202										61,733
Other assets			614,403										685,870
Total assets		$	14,022,364									$	12,785,040
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,410,797			$	6,236		0.89	%		$	1,494,809			$	572		0.08	%
Regular savings deposits			557,830				2,260		0.82				553,435				41		0.01
Money market savings deposits			3,170,010				43,854		2.79				3,401,641				2,122		0.13
Time deposits			2,541,784				39,763		3.15				1,355,615				3,353		0.50
Total interest-bearing deposits			7,680,421				92,113		2.42				6,805,500				6,088		0.18
Repurchase agreements			59,498				205		0.69				127,083				74		0.12
Federal funds purchased and Federal Reserve Bank borrowings			246,354				6,090		4.99				49,271				181		0.74
Advances from FHLB			676,823				15,423		4.60				1,915				17		1.74
Subordinated debt			370,334				7,893		4.26				287,164				6,184		4.31
Total borrowings			1,353,009				29,611		4.41				465,433				6,456		2.80
Total interest-bearing liabilities			9,033,430				121,724		2.72				7,270,933				12,544		0.35
Noninterest-bearing demand deposits			3,308,256										3,880,919
Other liabilities			166,861										146,018
Stockholders' equity			1,513,817										1,487,170
Total liabilities and stockholders' equity		$	14,022,364									$	12,785,040
Tax-equivalent net interest income and spread						$	189,749		1.97	%						$	209,259		3.35	%
Less: tax-equivalent adjustment							1,976										1,858
Net interest income						$	187,773									$	207,401
Interest income/earning assets									4.69	%									3.70	%
Interest expense/earning assets									1.83										0.21
Net interest margin									2.86	%									3.49	%

(1)		Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.47% and 25.64% for 2023 and 2022, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $2.0 million and $1.9 million in 2023 and 2022, respectively.
(2)		Non-accrual loans are included in the average balances.
(3)		Available-for-sale investments are presented at amortized cost.