GlobeNewswire Inc | Jul 23, 2020 07:01AM EDT

July 23, 2020

OLNEY, Md., July 23, 2020 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported a $14.3 million net loss ($0.31 per share) for the second quarter of 2020. The loss was the result of the combination of merger and acquisition expense, the impact of the current economic forecast in the determination of the allowance for credit losses and the additional provision for credit losses associated with the acquisition of Revere Bank (Revere), which closed on April 1, 2020. The 2020 second quarters result compares to net income of $28.3 million ($0.79 per diluted share) for the second quarter of 2019 and $10.0 million ($0.28 per diluted share) for the first quarter of 2020.

Operating earnings for the current quarter, which exclude the impact of merger and acquisition expense, the provision for credit losses and the effects from the PPP program, each on an after-tax basis, were $42.0 million ($0.88 per diluted share), compared to $29.5 million ($0.82 per diluted share) for the quarter ended June 30, 2019.

The current quarters results included $22.5 million for merger and acquisition expense related to the Revere acquisition. Additionally, earnings for the second quarter were negatively impacted by a $58.7 million provision for credit losses. Of this amount, approximately $33.8 million was related to the change in the current quarters economic forecast. In addition, as required by generally accepted accounting principles (GAAP), the initial allowance for credit losses on Reveres acquired non-purchased credit deteriorated loans was recognized through provision for credit losses in the amount of $17.5 million. Comparatively, the provision for credit losses for the first quarter of 2020 was $24.5 million. The Companys participation in the Paycheck Protection Program (PPP or PPP program) and the associated funding program had a net positive impact of $4.1 million, net of tax, in the current quarter.

We successfully completed the acquisition of Revere Bank and we are poised for long-term earnings growth, said Daniel J. Schrider, President and Chief Executive Officer. Despite the challenging rate and economic environment, our ability to close our transaction and increase our operating earnings distinguishes us during this unprecedented time. We remain focused on strategically moving our company forward and preparing for future profitable growth, while continuing to help our clients and community navigate the many challenges caused by the global pandemic.

Second Quarter Highlights:

-- Total assets at June 30, 2020, grew 58% to $13.3 billion compared to June 30, 2019, as a result of the Revere acquisition and participation in the PPP. Loans and deposits also each grew by 58%. Reveres loans and deposits on the date of acquisition were $2.5 billion and $2.3 billion, respectively. Additionally, the Companys participation in the PPP resulted in the addition of $1.1 billion in commercial business loans during the second quarter of 2020. -- The net interest margin was 3.47% for the second quarter of 2020, compared to 3.54% for the second quarter of 2019 and 3.29% for the first quarter of 2020. Excluding the impact of the amortization of the fair value marks derived from acquisitions, the current quarters net interest margin would have been 3.19%, compared to 3.49% for the second quarter of 2019 and 3.27% for the first quarter of 2020. -- The provision for credit losses of $58.7 million for the second quarter reflected the change in economic forecast for the current quarter, resulting in an addition of $33.8 million, and the $17.5 million initial provision for credit losses on the acquired Revere non-purchased credit deteriorated loans.

-- Non-interest income increased 38% from the prior year quarter, driven by income from mortgage banking activities, which benefited from higher refinance activity and growth in wealth management income as a result of the first quarter acquisition of Rembert Pendleton Jackson (RPJ). -- Non-interest expense grew 95% or $41.6 million from the prior year quarter. Excluding the impact of merger and acquisition expense and early prepayment of acquired FHLB borrowings, the year-over-year growth rate of in non-interest expense would have been 27%. -- Tangible book value per share declined by 4% to $20.61 at June 30, 2020 compared to $21.54 at June 30, 2019. During this period, the Company recorded additional goodwill and intangible assets in connection with the acquisitions of Revere and RPJ and repurchased $50 million of common stock.

Acquisition of Revere Bank

The results of operations from the Revere acquisition have been included in the consolidated results of operations from the date of the acquisition. At the acquisition date, Revere had assets of $2.8 billion, loans of $2.5 billion and deposits of $2.3 billion. As a result of the growth in the balance sheet, interest income and expense increased from the prior years quarter. Cost savings from the synergies resulting from the combination of the institutions will continue to be realized throughout 2020 and into 2021.

The valuation of acquired loans resulted in an estimated discount of $12.0 million. The initial allowance for credit losses established on $975 million of purchased credit deteriorated (PCD) loans was approximately $18.6 million. The amount of PCD loans was directly attributable to the current market conditions in the economy. Additionally, included in the acquired assets was the core deposit intangible asset valued at approximately $18.4 million. Interest-bearing liabilities valuation resulted in a $20.8 million premium.

Response to COVID-19

The Company continues to focus on protecting the health and well-being of its employees and clients and assisting clients who have been impacted by the COVID-19 pandemic. A substantial majority of non-branch employees continue to work remotely and clients are served at branches primarily through drive-thru facilities and limited lobby access. As area jurisdictions relax their stay at home orders, the Company is cautiously executing the first phase of its return to work plan.

The Companys participation in the Small Business Administrations Paycheck Protection Program has resulted in the approval of over 5,200 loans for a total of $1.1 billion in loans to businesses to assist them in maintaining their payroll of an estimated 112,000 employees and cover applicable overhead.

Applying a set of developed guidelines, the Company has provided for deferment of certain loan payments up to 90 days to provide relief to our qualified commercial and mortgage/consumer loan customers. From March through July 14, the Company had granted approvals for payment modifications/deferrals on over 2,400 loans with an aggregate balance of $2.0 billion.

For additional information about the Companys response to the COVID-19 pandemic, segments of the Companys 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 $13.3 billion at June 30, 2020, as compared to $8.4 billion at June 30, 2019, primarily as a result of the acquisition of Revere during the current quarter. In addition, the Companys participation in the PPP program had a further positive impact on the asset growth year-over-year. During this period, total loans grew by 58% to $10.3 billion at June 30, 2020, compared to $6.6 billion at June 30, 2019. Excluding PPP loans, total loans grew 42% to $9.3 billion at June 30, 2020. Commercial loans, excluding PPP loans, grew 58% or $2.7 billion while the remainder of the portfolio grew 2%. The majority of the commercial loan growth was driven by the acquisition of Revere. The year-over-year decline in the mortgage loan portfolio resulted from mortgage loan refinance activity driven by the low interest rate environment and the strategic decision to sell the majority of new mortgage loan production. Overall, consumer loans grew 14% due to the Revere acquisition. However, organic consumer loans experienced a 10% decline as borrowers reduced their home equity borrowings through the refinancing of their mortgage loans. Deposit growth was 58% from June 30, 2019 to June 30, 2020, as noninterest-bearing deposits experienced growth of 70% and interest-bearing deposits grew 52%. This growth was driven primarily by the Revere acquisition.

Tangible common equity increased to $1.0 billion at June 30, 2020, compared to $767.0 million at June 30, 2019, as a result of the equity issuance associated with 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, an increase in dividends beginning in the second quarter of 2019 and the increase in intangible assets and goodwill associated with the two acquisitions during the past twelve months. At June 30, 2020, the Company had a total risk-based capital ratio of 13.79%, a common equity tier 1 risk-based capital ratio of 10.23%, a tier 1 risk-based capital ratio of 10.23% and a tier 1 leverage ratio of 8.35%.

The level of non-performing loans to total loans increased to 0.77% at June 30, 2020, compared to 0.58% at June 30, 2019, and 0.80% at March 31, 2020. At June 30, 2020, non-performing loans totaled $79.9 million, compared to $37.7 million at June 30, 2019, and $54.0 million at March 31, 2020. Non-performing loans include 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 Companys 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 $27.3 million compared to $3.4 million for the prior year quarter and $2.4 million for the first quarter of 2020. Acquired Revere non-accrual loans were $11.3 million. Excluding the impact of the acquisition of Revere, the current quarters growth in non-accrual loans was primarily the result of three large relationships.

The Company recorded net recoveries of $0.4 million for the second quarter of 2020 as compared to net charge-offs of $0.7 million and $0.5 million for the second quarter of 2019 and the first quarter of 2020, respectively.

The allowance for credit losses was $163.5 million or 1.58% of outstanding loans and 205% of non-performing loans at June 30, 2020, compared to $85.8 million or 1.28% of outstanding loans and 159% of non-performing loans at March 31, 2020. The acquisition of Reveres PCD loans resulted in an increase to the allowance for credit losses of $18.6 million, which did not affect the current quarters provision expense. The remaining growth in the allowance was attributable to the provision for credit losses during the current quarter.

Income Statement Review

Quarterly Results

Net interest income for the second quarter of 2020 increased 53% compared to the second quarter of 2019, primarily driven by the acquisition of Revere. The PPP program and its associated funding contributed a net of $5.5 million to net interest income for the quarter. The net interest margin declined to 3.47% for the second quarter of 2020 compared to 3.54% for the second quarter of 2019. Excluding the net $8.6 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin would have been 3.19%. Included in the current quarter is the accelerated amortization of the $5.8 million purchase premium on FHLB advances as a result of the prepayment of those borrowings. The effect of the accelerated amortization accounts for approximately 20 basis points in the current quarters net interest margin.

The provision for credit losses was $58.7 million for the second quarter of 2020, compared to $1.7 million for the second quarter of 2019 and $24.5 million for the first quarter of 2020. The provision for credit losses during the quarter reflects the results of the impact of economic developments during the quarter ($33.8 million), the initial allowance required on non-purchased credit deteriorated loans ($17.5 million) and various qualitative adjustments to the allowance ($3.6 million). The change in the portfolio mix adjustments resulted in the remainder of provision growth for the period.

Non-interest income increased $6.4 million or 38% from the prior year quarter. Income from mortgage banking activities increased $5.2 million as a result of a high level of refinancing activity, while wealth management income increased $2.1 million as a result of the first quarter acquisition of RPJ. This growth more than compensated for the $1.4 million of the combined decline in service and bank card fees as compared to the prior year quarter as a result of the decline in consumer activity.

Non-interest expense grew 95% or $41.6 million from the prior year quarter. Merger and acquisition expense accounted for $22.5 million of the growth of non-interest expense. The non-interest expense growth also included $5.9 million in prepayment penalties from the liquidation of the acquired FHLB borrowings. These prepayment penalties offset the impact of the accelerated amortization noted previous in the discussion on net interest income. Excluding the impact of these non-core expenses, the year-over-year growth rate would have been 27% as a result of the operational cost of the Revere and RPJ acquisitions, increased compensation expense related to the high level of mortgage loan originations and annual employee merit increases.

The non-GAAP efficiency ratio was 43.85% for the current quarter as compared to 51.71% for the second quarter of 2019 and 54.76% for the first quarter of 2020. The decrease in the efficiency ratio (reflecting an increase in efficiency) from the second quarter of last year to the current year was the result of the rate of growth in non-GAAP revenue, at 50%, outpacing the non-GAAP non-interest expense growth of 27%.

Year to Date Results

Net interest income for the six months ended June 30, 2020 increased 25% or $32.9 million compared to the same period of 2019. This increase was driven primarily by the acquisition of Revere in the second quarter of the current year. Additionally, the income generated by the PPP program net of its associated funding contributed a net of $5.5 million to the growth in net interest income year-over-year. The net interest margin declined to 3.39% for the six months ended June 30, 2020 compared to 3.58% for the same period of the prior year. Excluding the net $8.6 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin would have been 3.23%. Included in the current period is the accelerated amortization of the $5.8 million purchase premium on FHLB advances as a result of the prepayment of those borrowings. The effect of the accelerated amortization accounts for approximately 6 basis points in the net interest margin for the six months ended June 30, 2020.

The provision for credit losses for the six months ended June 30, 2020 amounted to $83.2 million as compared to $1.5 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 ($53.8 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 rose $7.6 million or 23% above prior year levels. Income from mortgage banking activities increased $5.3 million as a result of the high levels of refinancing activity and wealth management income increased $3.8 million as a result of the first quarter acquisition of RPJ. These increases more than offset declines in deposit and bank card fees and the reduction in BOLI income due to the absence of mortality income that occurred in 2019.

Non-interest expense increased 51% or $45.1 million for the first six months of 2020, compared to the first six months of 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 17%. This growth rate was driven by operational and compensation cost associated with the Revere and RPJ acquisitions, increased incentive expense related to the significant level of mortgage loan originations and annual employee merit increases.

The increase in the effective tax rate for the six months ended June 30, 2020 was the result of the impact of the amount of tax-advantaged income in proportion to the net loss before taxes as compared to the prior year period. Additionally, recent changes to tax laws expand 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-to-date was 48.21% compared to 51.57% for the prior year period. The improvement in the current years efficiency ratio compared to the prior year was the result of the 24% rate of growth in non-GAAP revenue which outpaced the non-GAAP non-interest expense 16% rate of growth.

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 Companys 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 companys 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, operating earnings per share, operating return on average assets and operating return on average tangible common equity. Operating earnings 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 Companys 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 1-866-235-9910. 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) August 7, 2020. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10145405.

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. Withover 65 locations, the bank offers a broad range ofcommercialandretail banking,mortgage,private banking, andtrustservices throughout Maryland, Northern Virginia, and Washington, D.C. Through its subsidiaries,Rembert Pendleton Jackson,Sandy Spring Insurance CorporationandWest Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu ofinsuranceandwealth 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 Bancorps 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 Companys loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Companys 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 Bancorps 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 SECs Web site at www.sec.gov.

Sandy SpringBancorp, Inc. and SubsidiariesFINANCIALHIGHLIGHTS - UNAUDITED Three Months Ended Six Months Ended June 30, % June 30, % (Dollars inthousands, 2020 2019 Change 2020 2019 Change except per sharedata)Results of Operations:Net interest $ 101,514 $ 66,185 53 % $ 165,848 $ 132,935 25 % incomeProvision for 58,686 1,633 n.m 83,155 1,505 n.m credit lossesNon-interest 22,924 16,556 38 41,092 33,525 23 incomeNon-interest 85,438 43,887 95 133,184 88,079 51 expenseIncome/ (loss)before income (19,686 ) 37,221 (153 ) (9,399 ) 76,876 (112 ) taxesNet income/ (14,338 ) 28,276 (151 ) (4,351 ) 58,593 (107 ) (loss) Pre-taxpre-provision $ 61,454 $ 38,854 58 $ 97,664 $ 78,381 25 pre-mergerincome (1) Return on (0.45 ) % 1.37 % (0.08 ) % 1.43 % average assetsReturn onaverage common (4.15 ) % 10.32 % (0.69 ) % 10.88 % equityReturn onaverage tangible (5.80 ) % 15.10 % (1.00 ) % 15.95 % common equityNet interest 3.47 % 3.54 % 3.39 % 3.58 % marginEfficiency ratio 68.66 % 53.04 % 64.36 % 52.91 % - GAAP basis (2)Efficiency ratio- Non-GAAP basis 43.85 % 51.71 % 48.21 % 51.57 % (2) Per share data: Basic net income $ (0.31 ) $ 0.79 (139 ) % $ (0.11 ) $ 1.64 (107 ) % / (loss)Diluted net $ (0.31 ) $ 0.79 (139 ) $ (0.11 ) $ 1.63 (107 ) income/ (loss)Average fullydiluted shares 46,988,351 35,890,437 31 40,826,748 35,865,518 14 (3)Dividendsdeclared per $ 0.30 $ 0.30 - $ 0.60 $ 0.58 3 shareBook value per 29.58 31.43 (6 ) 29.58 31.43 (6 ) shareTangible bookvalue per share 20.61 21.54 (4 ) 20.61 21.54 (4 ) (1)Outstanding 47,001,022 35,614,953 32 47,001,022 35,614,953 32 shares FinancialCondition at period-end:Investment $ 1,424,652 $ 955,715 49 % $ 1,424,652 $ 955,715 49 % securitiesLoans 10,343,043 6,551,243 58 10,343,043 6,551,243 58 Interest-earning 12,447,146 7,713,364 61 12,447,146 7,713,364 61 assetsAssets 13,290,447 8,398,519 58 13,290,447 8,398,519 58 Deposits 10,076,834 6,389,749 58 10,076,834 6,389,749 58 Interest-bearing 8,313,546 5,136,860 62 8,313,546 5,136,860 62 liabilitiesStockholders' 1,390,093 1,119,445 24 1,390,093 1,119,445 24 equity Capital ratios: Tier 1 leverage 8.35 % 9.80 % 8.35 % 9.80 % (4)Common equitytier 1 capital 10.23 % 11.43 % 10.23 % 11.43 % to risk-weightedassets (4)Tier 1 capitalto risk-weighted 10.23 % 11.59 % 10.23 % 11.59 % assets (4)Total regulatorycapital to 13.79 % 12.79 % 13.79 % 12.79 % risk-weightedassets (4)Tangible commonequity to 7.52 % 9.54 % 7.52 % 9.54 % tangible assets(5)Average equityto average 10.78 % 13.25 % 11.67 % 13.12 % assets Credit quality ratios:Allowance forcredit losses to 1.58 % 0.82 % 1.58 % 0.82 % total loansNon-performingloans to total 0.77 % 0.58 % 0.77 % 0.58 % loansNon-performingassets to total 0.61 % 0.47 % 0.61 % 0.47 % assetsAllowance forcredit losses to 204.56 % 143.33 % 204.56 % 143.33 % non-performingloansAnnualized netcharge-offs/(recoveries) to (0.01 ) % 0.04 % 0.00 % 0.03 % average loans(6) (1) Represents a Non-GAAP measure. See the Reconciliation Table included withthese Financial Highlights.(2) The efficiency ratio - GAAP basis is non-interest expense divided by netinterest income plus non-interest income from the Condensed ConsolidatedStatements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible assetamortization, loss on FHLB redemption and merger and acquisition expense fromnon-interest expense; securities gains from non-interest income and adds the tax-equivalentadjustment to net interest income. See the Reconciliation Table included withthese Financial Highlights.(3) Average fully diluted shares for the three and six months ended June 30,2020, exclude potential common shares that are antidilutive due to the netlossfor the three and six months ended June 30, 2020.(4) Estimated ratio at June 30, 2020(5) The tangible common equity to tangible assets ratio is a non-GAAP ratiothat divides assets excluding intangible assets into stockholders' equity afterdeducting intangible assetsand other comprehensive gains (losses). See theReconciliation Table included with these Financial Highlights.(6) Calculation utilizes average loans, excluding residential mortgage loansheld-for-sale.

Sandy SpringBancorp, Inc. andSubsidiariesRECONCILIATIONTABLE - UNAUDITED Three Months Ended Six Months Ended June 30, June 30, (Dollars in 2020 2019 2020 2019 thousands)Pre-taxpre-provision pre-mergerincome:Net income/ $ (14,338 ) $ 28,276 $ (4,351 ) $ 58,593 (loss)Plus non-GAAP adjustments:Merger andacquisition 22,454 - 23,908 - expenseIncome taxes/ (5,348 ) 8,945 (5,048 ) 18,283 (benefit)Provision for 58,686 1,633 83,155 1,505 credit lossesPre-taxpre-provision $ 61,454 $ 38,854 $ 97,664 $ 78,381 pre-mergerincome Efficiencyratio - GAAP basis:Non-interest $ 85,438 $ 43,887 $ 133,184 $ 88,079 expense Net interestincome plus $ 124,438 $ 82,741 $ 206,940 $ 166,460 non-interestincome Efficiencyratio - GAAP 68.66 % 53.04 % 64.36 % 52.91 % basis Efficiencyratio - Non-GAAPbasis:Non-interest $ 85,438 $ 43,887 $ 133,184 $ 88,079 expenseLess non-GAAP adjustments:Amortizationof intangible 1,998 483 2,598 974 assetsLoss on FHLB 5,928 - 5,928 - redemptionMerger andacquisition 22,454 - 23,908 - expenseNon-interestexpense - as $ 55,058 $ 43,404 $ 100,750 $ 87,105 adjusted Net interestincome plus $ 124,438 $ 82,741 $ 206,940 $ 166,460 non-interestincomePlus non-GAAP adjustment:Tax-equivalent 1,325 1,209 2,433 2,450 incomeLess non-GAAP adjustment:Securities 212 5 381 5 gainsNet interestincome plusnon-interest $ 125,551 $ 83,945 $ 208,992 $ 168,905 income - asadjusted Efficiencyratio - 43.85 % 51.71 % 48.21 % 51.57 % Non-GAAP basis Tangiblecommon equity ratio:Totalstockholders' $ 1,390,093 $ 1,119,445 $ 1,390,093 $ 1,119,445 equityAccumulatedother (14,824 ) 3,565 (14,824 ) 3,565 comprehensive(income)/ lossGoodwill (370,547 ) (347,149 ) (370,547 ) (347,149 ) Otherintangible (36,143 ) (8,813 ) (36,143 ) (8,813 ) assets, netTangible $ 968,579 $ 767,048 $ 968,579 $ 767,048 common equity Total assets $ 13,290,447 $ 8,398,519 $ 13,290,447 $ 8,398,519 Goodwill (370,547 ) (347,149 ) (370,547 ) (347,149 ) Otherintangible (36,143 ) (8,813 ) (36,143 ) (8,813 ) assets, netTangible $ 12,883,757 $ 8,042,557 $ 12,883,757 $ 8,042,557 assets Tangiblecommon equity 7.52 % 9.54 % 7.52 % 9.54 % ratio Outstanding 47,001,022 35,614,953 47,001,022 35,614,953 common sharesTangible bookvalue per $ 20.61 $ 21.54 $ 20.61 $ 21.54 common share

Sandy SpringBancorp, Inc. and SubsidiariesNON-GAAP METRICS - UNAUDITED Three Months Ended Six Months Ended June 30, June 30, (Dollars in 2020 2019 2020 2019 thousands)Operatingearnings (non-GAAP):Net income/ $ (14,338 ) $ 28,276 $ (4,351 ) $ 58,593 (loss)Plus non-GAAP adjustments:Provision forcredit losses - 43,750 1,217 61,992 1,122 net of taxMerger andacquisition 16,739 - 17,823 - expense - net oftaxPPLF fundingexpense - net of 368 - 368 - taxLess non-GAAP adjustment:PPP interestincome and net 4,483 - 4,483 - deferred fee -net of taxOperatingearnings $ 42,036 $ 29,493 $ 71,349 $ 59,715 (non-GAAP) Operatingearnings per share(non-GAAP):Weighted-averagecommon shares 46,988,351 35,890,437 40,826,748 35,865,518 outstanding -diluted (GAAP)Sharesantidilutive due 539,473 - 504,266 - to net lossWeighted-averagecommon sharesoutstanding - 47,527,824 35,890,437 41,331,014 35,865,518 diluted(non-GAAP) Earnings/ (loss)per diluted $ (0.31 ) $ 0.79 $ (0.11 ) $ 1.63 common share(GAAP)Operatingearnings per $ 0.88 $ 0.82 $ 1.73 $ 1.66 diluted commonshare (non-GAAP) Operating returnon average assets(non-GAAP):Average assets $ 12,903,156 $ 8,294,883 $ 10,799,840 $ 8,276,601 (GAAP)Average PPP 713,584 - 356,792 - loansAdjusted averageassets $ 12,189,572 $ 8,294,883 $ 10,443,048 $ 8,276,601 (non-GAAP) Return onaverage assets (0.45 )% 1.37 % (0.08 )% 1.43 % (GAAP)Operating returnon adjusted 1.39 % 1.43 % 1.37 % 1.45 % average assets(non-GAAP) Operating returnon averagetangible common equity(non-GAAP):Average totalstockholders $ 1,390,544 $ 1,099,078 $ 1,260,298 $ 1,086,256 equity (GAAP)Averageaccumulatedother (8,722 ) 8,244 (5,528 ) 11,285 comprehensive(income)/ lossAverage goodwill (355,054 ) (347,149 ) (360,549 ) (347,149 ) Average otherintangible (32,337 ) (9,123 ) (22,074 ) (9,367 ) assets, netAverage tangiblecommon equity $ 994,431 $ 751,050 $ 872,147 $ 741,025 (non-GAAP) Return onaverage tangible (5.80 )% 15.10 % (1.00 )% 15.95 % common equity(GAAP)Operating returnon averagetangible common 17.00 % 15.75 % 16.45 % 16.25 % equity(non-GAAP)

Sandy Spring Bancorp, Inc. and SubsidiariesCONDENSEDCONSOLIDATED STATEMENTS OFCONDITION - UNAUDITED June 30, December 31, June 30,(Dollars in 2020 2019 2019 thousands)Assets Cash and due from $ 224,037 $ 82,469 $ 75,781 banksFederal funds sold 401 208 583 Interest-bearing 610,285 63,426 155,312 deposits with banksCash and cash 834,723 146,103 231,676 equivalentsResidential mortgageloans held for sale 68,765 53,701 50,511 (at fair value)Investmentsavailable-for-sale 1,355,799 1,073,333 901,025 (at fair value)Other equity 68,853 51,803 54,690 securitiesTotal loans 10,343,043 6,705,232 6,551,243 Less: allowance for (163,481 ) (56,132 ) (54,024 )credit lossesNet loans 10,179,562 6,649,100 6,497,219 Premises and 59,391 58,615 60,372 equipment, netOther real estate 1,389 1,482 1,486 ownedAccrued interest 48,109 23,282 26,148 receivableGoodwill 370,547 347,149 347,149 Other intangible 36,143 7,841 8,813 assets, netOther assets 267,166 216,593 219,430 Total assets $ 13,290,447 $ 8,629,002 $ 8,398,519 Liabilities Noninterest-bearing $ 3,434,038 $ 1,892,052 $ 2,023,614 depositsInterest-bearing 6,642,796 4,548,267 4,366,135 depositsTotal deposits 10,076,834 6,440,319 6,389,749 Securities sold underretail repurchaseagreements and 988,605 213,605 150,604 federal fundspurchasedAdvances from FHLB 451,844 513,777 582,768 Subordinated 230,301 209,406 37,353 debenturesTotal borrowings 1,670,750 936,788 770,725 Accrued interestpayable and other 152,770 118,921 118,600 liabilitiesTotal liabilities 11,900,354 7,496,028 7,279,074 Stockholders' Equity Common stock -- parvalue $1.00; sharesauthorized100,000,000; sharesissued andoutstanding 47,001 34,970 35,615 47,001,022,34,970,370 and35,614,953 at June30, 2020, December31, 2019 and June 30,2019, respectivelyAdditional paid in 843,876 586,622 608,006 capitalRetained earnings 484,392 515,714 479,389 Accumulated othercomprehensive income/ 14,824 (4,332 ) (3,565 )(loss)Total stockholders' 1,390,093 1,132,974 1,119,445 equityTotal liabilities and $ 13,290,447 $ 8,629,002 $ 8,398,519 stockholders' equity

Sandy SpringBancorp, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF INCOME/ (LOSS) - UNAUDITED Three Months Ended Six Months Ended June 30, June 30,(Dollars inthousands, except 2020 2019 2020 2019per share data)Interest Income: Interest and fees $ 106,279 $ 79,464 $ 182,161 $ 159,861on loansInterest on loans 405 381 696 573held for saleInterest ondeposits with 155 428 335 622banksInterest anddividends on investmentsecurities:Taxable 6,650 5,396 12,782 11,081Exempt fromfederal income 1,438 1,544 2,810 3,254taxesInterest on - 1 1 6federal funds soldTotal interest 114,927 87,214 198,785 175,397incomeInterest Expense: Interest on 12,284 16,146 25,802 30,626depositsInterest on retailrepurchaseagreements and 600 290 1,180 688federal fundspurchasedInterest on (2,123 ) 4,103 1,022 10,167advances from FHLBInterest on 2,652 490 4,933 981subordinated debtTotal interest 13,413 21,029 32,937 42,462expenseNet interest 101,514 66,185 165,848 132,935incomeProvision for 58,686 1,633 83,155 1,505credit lossesNet interestincome after 42,828 64,552 82,693 131,430provision forcredit lossesNon-interest Income:Investment 212 5 381 5securities gainsService charges on 1,223 2,442 3,476 4,749deposit accountsMortgage banking 8,426 3,270 11,459 6,133activitiesWealth management 7,604 5,539 14,570 10,775incomeInsurance agency 1,188 1,265 3,317 3,165commissionsIncome from bankowned life 809 654 1,454 1,843insuranceBank card fees 1,257 1,467 2,577 2,719Other income 2,205 1,914 3,858 4,136Total non-interest 22,924 16,556 41,092 33,525incomeNon-interest Expense:Salaries and 34,297 25,489 62,350 51,465employee benefitsOccupancy expense 5,991 4,760 10,572 9,991of premisesEquipment expenses 3,219 2,712 5,970 5,288Marketing 729 887 1,918 1,830Outside data 2,169 1,962 3,751 3,740servicesFDIC insurance 1,378 1,084 1,860 2,220Amortization of 1,998 483 2,598 974intangible assetsMerger andacquisition 22,454 - 23,908 -expenseProfessional fees 1,840 1,634 3,666 2,879and servicesOther expenses 11,363 4,876 16,591 9,692Total non-interest 85,438 43,887 133,184 88,079expenseIncome/ (loss)before income (19,686 ) 37,221 (9,399 ) 76,876taxesIncome tax expense (5,348 ) 8,945 (5,048 ) 18,283/ (benefit)Net income/ (loss) $ (14,338 ) $ 28,276 $ (4,351 ) $ 58,593 Net Income/ (Loss) Per Share Amounts:Basic net income/ $ (0.31 ) $ 0.79 $ (0.11 ) $ 1.64(loss) per shareDiluted net income $ (0.31 ) $ 0.79 $ (0.11 ) $ 1.63/ (loss) per shareDividends declared $ 0.30 $ 0.30 $ 0.60 $ 0.58per share

Sandy SpringBancorp, Inc. andSubsidiariesHISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED 2020 2019 (Dollars inthousands, Q2 Q1 Q4 Q3 Q2 Q1except pershare data)Profitabilityfor the Quarter:Tax-equivalent $ 116,252 $ 84,966 $ 86,539 $ 88,229 $ 88,423 $ 89,424 interest incomeInterest 13,413 19,524 19,807 20,292 21,029 21,433 expenseTax-equivalentnet interest 102,839 65,442 66,732 67,937 67,394 67,991 incomeTax-equivalent 1,325 1,108 1,149 1,147 1,209 1,241 adjustmentProvision(credit) for 58,686 24,469 1,655 1,524 1,633 (128 )credit lossesNon-interest 22,924 18,168 19,224 18,573 16,556 16,969 incomeNon-interest 85,438 47,746 46,081 44,925 43,887 44,192 expenseIncome/ (loss)before income (19,686 ) 10,287 37,071 38,914 37,221 39,655 taxesIncome taxexpense/ (5,348 ) 300 8,614 9,531 8,945 9,338 (benefit)Net income/ $ (14,338 ) $ 9,987 $ 28,457 $ 29,383 $ 28,276 $ 30,317 (loss)Financial Performance:Pre-taxpre-provision $ 61,454 $ 36,210 $ 39,674 $ 40,802 $ 38,854 $ 39,527 pre-mergerincomeReturn on (0.45 )% 0.46 % 1.32 % 1.39 % 1.37 % 1.49 %average assetsReturn onaverage common (4.15 )% 3.55 % 9.93 % 10.38 % 10.32 % 11.46 %equityReturn onaverage (5.80 )% 5.36 % 14.39 % 15.13 % 15.10 % 16.82 %tangible commonequityNet interest 3.47 % 3.29 % 3.38 % 3.51 % 3.54 % 3.60 %marginEfficiencyratio - GAAP 68.66 % 57.87 % 54.34 % 52.63 % 53.04 % 52.79 %basis (1)Efficiencyratio - 43.85 % 54.76 % 51.98 % 50.95 % 51.71 % 51.44 %Non-GAAP basis(1)Per Share Data: Basic netincome/ (loss) $ (0.31 ) $ 0.29 $ 0.80 $ 0.82 $ 0.79 $ 0.85 per shareDiluted netincome/ (loss) $ (0.31 ) $ 0.28 $ 0.80 $ 0.82 $ 0.79 $ 0.85 per shareAverage fully 46,988,351 35,057,190 35,773,246 35,900,102 35,890,437 35,806,459 diluted sharesDividendsdeclared per $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.28 common shareNon-interest Income:Securities $ 212 $ 169 $ 57 $ 15 $ 5 $ - gainsService chargeson deposit 1,223 2,253 2,427 2,516 2,442 2,307 accountsMortgagebanking 8,426 3,033 4,170 4,408 3,270 2,863 activitiesWealthmanagement 7,604 6,966 6,401 5,493 5,539 5,236 incomeInsuranceagency 1,188 2,129 1,331 2,116 1,265 1,900 commissionsIncome frombank owned life 809 645 660 662 654 1,189 insuranceBank card fees 1,257 1,320 1,435 1,462 1,467 1,252 Other income 2,205 1,653 2,743 1,901 1,914 2,222 TotalNon-interest $ 22,924 $ 18,168 $ 19,224 $ 18,573 $ 16,556 $ 16,969 IncomeNon-interest Expense:Salaries andemployee $ 34,297 $ 28,053 $ 26,251 $ 26,234 $ 25,489 $ 25,976 benefitsOccupancyexpense of 5,991 4,581 4,663 4,816 4,760 5,231 premisesEquipment 3,219 2,751 2,791 2,641 2,712 2,576 expensesMarketing 729 1,189 1,085 1,541 887 943 Outside data 2,169 1,582 1,854 1,973 1,962 1,778 servicesFDIC insurance 1,378 482 123 (83 ) 1,084 1,136 Amortization ofintangible 1,998 600 481 491 483 491 assetsMerger andacquisition 22,454 1,454 948 364 - - expenseProfessionalfees and 1,840 1,826 2,553 1,546 1,634 1,245 servicesOther expenses 11,363 5,228 5,332 5,402 4,876 4,816 TotalNon-interest $ 85,438 $ 47,746 $ 46,081 $ 44,925 $ 43,887 $ 44,192 Expense (1) The efficiency ratio - GAAP basis is non-interest expense divided by netinterest income plus non-interest income from the Condensed Consolidated Statements of Income.The traditional efficiency ratio - Non-GAAP basis excludes intangible assetamortization, loss on FHLB redemption and merger and acquisition expense from non-interest expense;securities gains from non-interest income; and adds the tax-equivalentadjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.

Sandy SpringBancorp, Inc. and SubsidiariesHISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED 2020 2019 (Dollars in Q2 Q1 Q4 Q3 Q2 Q1 thousands)Balance Sheets at Quarter End:Residential $ 1,211,745 $ 1,116,512 $ 1,149,327 $ 1,199,275 $ 1,241,081 $ 1,249,968 mortgage loansResidential 169,050 149,573 146,279 150,692 171,106 176,388 construction loansCommercial AD&C 997,423 643,114 684,010 678,906 658,709 688,939 loansCommercial investor 3,581,778 2,241,240 2,169,156 2,036,021 1,994,027 1,962,879 real estate loansCommercial owneroccupied real 1,601,803 1,305,682 1,288,677 1,278,505 1,224,986 1,216,713 estate loansCommercial business 2,222,810 813,525 801,019 772,619 772,158 769,660 loansConsumer loans 558,434 453,346 466,764 480,530 489,176 505,443 Total loans 10,343,043 6,722,992 6,705,232 6,596,548 6,551,243 6,569,990 Allowance for (163,481 ) (85,800 ) (56,132 ) (54,992 ) (54,024 ) (53,089 ) credit lossesLoans held for sale 68,765 67,114 53,701 78,821 50,511 24,998 Investment 1,424,652 1,250,560 1,125,136 946,210 955,715 987,299 securitiesInterest-earning 12,447,146 8,222,589 7,947,703 7,742,138 7,713,364 7,648,654 assetsTotal assets 13,290,447 8,929,602 8,629,002 8,437,538 8,398,519 8,327,900 Noninterest-bearing 3,434,038 1,939,937 1,892,052 2,081,435 2,023,614 1,813,708 demand depositsTotal deposits 10,076,834 6,593,874 6,440,319 6,493,899 6,389,749 6,224,523 Customer repurchase 143,579 125,305 138,605 126,008 150,604 122,626 agreementsTotalinterest-bearing 8,313,546 5,732,349 5,485,055 5,093,265 5,136,860 5,297,108 liabilitiesTotal stockholders' 1,390,093 1,116,334 1,132,974 1,140,041 1,119,445 1,095,848 equityQuarterly Average Balance Sheets:Residential $ 1,208,566 $ 1,139,786 $ 1,169,623 $ 1,215,132 $ 1,244,086 $ 1,230,319 mortgage loansResidential 162,978 145,266 149,690 162,196 174,095 189,720 construction loansCommercial AD&C 969,251 659,494 695,817 651,905 686,282 676,205 loansCommercial investor 3,448,882 2,202,461 2,092,478 1,982,979 1,960,919 1,964,699 real estate loansCommercial owneroccupied real 1,681,674 1,285,257 1,274,782 1,258,000 1,215,632 1,207,799 estate loansCommercial business 1,899,264 819,133 765,159 786,150 756,594 780,318 loansConsumer loans 575,734 465,314 477,572 486,865 505,235 515,644 Total loans 9,946,349 6,716,711 6,625,121 6,543,227 6,542,843 6,564,704 Loans held for sale 53,312 35,030 50,208 61,870 37,121 17,846 Investment 1,398,586 1,179,084 1,002,692 941,048 964,863 1,010,940 securitiesInterest-earning 11,921,132 7,994,618 7,859,836 7,690,629 7,619,240 7,627,187 assetsTotal assets 12,903,156 8,699,342 8,542,837 8,370,789 8,294,883 8,258,116 Noninterest-bearing 3,007,222 1,797,227 1,927,063 1,909,884 1,796,802 1,682,720 demand depositsTotal deposits 9,614,176 6,433,694 6,459,551 6,405,762 6,247,409 5,952,942 Customer repurchase 144,050 135,652 126,596 138,736 141,865 129,059 agreementsTotalinterest-bearing 8,326,909 5,612,056 5,326,303 5,202,876 5,269,209 5,403,946 liabilitiesTotal stockholders' 1,390,544 1,130,051 1,136,824 1,123,185 1,099,078 1,073,291 equityFinancial Measures: Average equity to 10.78 % 12.99 % 13.31 % 13.42 % 13.25 % 13.00 % average assetsInvestmentsecurities to 11.45 % 15.21 % 14.16 % 12.22 % 12.39 % 12.91 % earning assetsLoans to earning 83.10 % 81.76 % 84.37 % 85.20 % 84.93 % 85.90 % assetsLoans to assets 77.82 % 75.29 % 77.71 % 78.18 % 78.00 % 78.89 % Loans to deposits 102.64 % 101.96 % 104.11 % 101.58 % 102.53 % 105.55 % Capital Measures: Tier 1 leverage (1) 8.35 % 8.78 % 9.70 % 9.96 % 9.80 % 9.61 % Common equity tier1 capital to 10.23 % 10.23 % 11.06 % 11.37 % 11.43 % 11.19 % risk-weightedassets (1)Tier 1 capital torisk-weighted 10.23 % 10.23 % 11.21 % 11.52 % 11.59 % 11.35 % assets (1)Total regulatorycapital to 13.79 % 14.09 % 14.85 % 12.70 % 12.79 % 12.54 % risk-weightedassets (1)Book value per $ 29.58 $ 32.68 $ 32.40 $ 32.00 $ 31.43 $ 30.82 shareOutstanding shares 47,001,022 34,164,672 34,970,370 35,625,822 35,614,953 35,557,110 (1) Estimated ratio at June 30, 2020

Sandy SpringBancorp, Inc. andSubsidiariesLOAN PORTFOLIO QUALITY DETAIL - UNAUDITED 2020 2019 (Dollars in June 30, March 31, December September June 30, March 31,thousands) 31, 30,Non-Performing Assets:Loans 90 days past due:Commercial $ - $ - $ - $ 17 $ - $ - businessCommercial real estate:Commercial AD& - - - - - - CCommercialinvestor real 775 - - 1,201 1,248 - estateCommercialowner occupied 515 - - - - 90 real estateConsumer - - - - - - Residential real estate:Residential 138 8 - - - 221 mortgageResidential - - - - - - constructionTotal loans 90 1,428 8 - 1,218 1,248 311 days past dueNon-accrual loans:Commercial 20,246 10,834 8,450 6,393 7,083 8,013 businessCommercial real estate:Commercial AD& 2,957 829 829 829 1,990 3,306 CCommercialinvestor real 26,482 17,770 8,437 8,454 6,409 6,071 estateCommercialowner occupied 6,729 4,074 4,148 3,810 3,766 5,992 real estateConsumer 7,800 5,596 4,107 4,561 4,439 4,081 Residential real estate:Residential 11,724 12,271 12,661 12,574 10,625 9,704 mortgageResidential - - - - - 156 constructionTotalnon-accrual 75,938 51,374 38,632 36,621 34,312 37,323 loansTotalrestructured 2,553 2,575 2,636 2,287 2,133 2,479 loans -accruingTotalnon-performing 79,919 53,957 41,268 40,126 37,693 40,113 loansOther assetsand real 1,389 1,416 1,482 1,482 1,486 1,410 estate owned(OREO)Totalnon-performing $ 81,308 $ 55,373 $ 42,750 $ 41,608 $ 39,179 $ 41,523 assets For the Quarter Ended, June 30, March 31, December 31, September June 30, March 31, 30,(Dollars in 2020 2020 2019 2019 2019 2019 thousands)Analysis ofNon-accrual Loan Activity:Balance atbeginning of $ 51,374 $ 38,632 $ 36,621 $ 34,312 $ 37,323 $ 33,583 periodPurchasedcreditdeteriorated - 13,084 - - - - loansdesignated asnon-accrualNon-accrualbalances - - - - (195 ) - transferred toOREONon-accrualbalances (162 ) (575 ) (454 ) (705 ) (604 ) (227 )charged-offNet payments (1,881 ) (1,860 ) (2,916 ) (2,903 ) (5,517 ) (1,786 )or drawsLoans placed 27,289 2,369 5,381 6,015 3,396 6,202 on non-accrualNon-accrualloans brought (682 ) (276 ) - (98 ) (91 ) (449 )currentBalance at end $ 75,938 $ 51,374 $ 38,632 $ 36,621 $ 34,312 $ 37,323 of period Analysis ofAllowance for Credit Losses:Balance atbeginning of $ 85,800 $ 56,132 $ 54,992 $ 54,024 $ 53,089 $ 53,486 periodTransitionimpact of - 2,983 - - - - adopting ASC326Initialallowance onpurchased - 2,762 - - - - creditdeterioratedloansInitialallowance onacquired 18,628 - - - - - Revere PCDloansProvision(credit) for 58,686 24,469 1,655 1,524 1,633 (128 )credit lossesLess loanscharged-off, net ofrecoveries:Commercial (463 ) 108 15 389 735 7 businessCommercial real estate:Commercial AD& - - - (224 ) (4 ) - CCommercialinvestor real (4 ) - (3 ) (3 ) (3 ) (7 )estateCommercialowner occupied - - - - - - real estateConsumer 86 107 241 187 (18 ) 182 Residential real estate:Residential 15 333 264 209 (10 ) 89 mortgageResidential (1 ) (2 ) (2 ) (2 ) (2 ) (2 )constructionNetcharge-offs/ (367 ) 546 515 556 698 269 (recoveries)Balance at end $ 163,481 $ 85,800 $ 56,132 $ 54,992 $ 54,024 $ 53,089 of period Asset Quality Ratios:Non-performingloans to total 0.77 % 0.80 % 0.62 % 0.61 % 0.58 % 0.61 %loansNon-performingassets to 0.61 % 0.62 % 0.50 % 0.49 % 0.47 % 0.50 %total assetsAllowance forcredit losses 1.58 % 1.28 % 0.84 % 0.83 % 0.82 % 0.81 %to total loansAllowance forcredit lossesto 204.56 % 159.02 % 136.02 % 137.05 % 143.33 % 132.35 %non-performingloansAnnualized netcharge-offs/ (0.01 )% 0.03 % 0.03 % 0.03 % 0.04 % 0.02 %(recoveries) toaverage loans

Sandy Spring Bancorp, Inc. and SubsidiariesCONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED Three Months Ended June 30, 2020 2019 Annualized Annualized Average (1) Average Average (1) Average (Dollars in thousands Balances Interest Yield/Rate Balances Interest Yield/Rate and tax-equivalent)Assets Residential mortgage $ 1,208,566 $ 11,259 3.73 % $ 1,244,086 $ 11,971 3.85 %loansResidential 162,978 1,691 4.17 174,095 1,873 4.32 construction loansTotal mortgage loans 1,371,544 12,950 3.78 1,418,181 13,844 3.91 Commercial AD&C loans 969,251 10,886 4.52 686,282 10,268 6.00 Commercial investor 3,448,882 38,426 4.48 1,960,919 24,357 4.98 real estate loansCommercial owneroccupied real estate 1,681,674 19,794 4.73 1,215,632 14,840 4.90 loansCommercial business 1,899,264 19,426 4.11 756,594 10,321 5.47 loansTotal commercial loans 7,999,071 88,532 4.45 4,619,427 59,786 5.19 Consumer loans 575,734 5,341 3.73 505,235 6,335 5.03 Total loans (2) 9,946,349 106,823 4.32 6,542,843 79,965 4.90 Loans held for sale 53,312 405 3.04 37,121 381 4.11 Taxable securities 1,164,490 7,045 2.42 744,701 5,689 3.06 Tax-exempt securities 234,096 1,824 3.12 220,162 1,959 3.56 (3)Total investment 1,398,586 8,869 2.54 964,863 7,648 3.17 securities (4)Interest-bearing 522,469 155 0.12 73,793 428 2.32 deposits with banksFederal funds sold 416 - 0.10 620 1 0.60 Total interest-earning 11,921,132 116,252 3.92 7,619,240 88,423 4.65 assets Less: allowance for (118,863 ) (53,068 ) credit lossesCash and due from 181,991 66,031 banksPremises and 60,545 60,871 equipment, netOther assets 858,351 601,809 Total assets $ 12,903,156 $ 8,294,883 Liabilities and Stockholders' EquityInterest-bearing $ 1,067,487 457 0.17 % $ 747,343 460 0.25 %demand depositsRegular savings 367,191 73 0.08 332,796 118 0.14 depositsMoney market savings 2,890,842 3,396 0.47 1,690,413 6,589 1.56 depositsTime deposits 2,281,434 8,358 1.47 1,680,055 8,979 2.14 Total interest-bearing 6,606,954 12,284 0.75 4,450,607 16,146 1.46 depositsOther borrowings 713,965 600 0.34 157,499 290 0.74 Advances from FHLB 775,767 (2,123 ) (1.08 ) 623,727 4,103 2.64 Subordinated 230,223 2,652 4.61 37,376 490 5.25 debenturesTotal borrowings 1,719,955 1,129 0.27 818,602 4,883 2.39 Total interest-bearing 8,326,909 13,413 0.65 5,269,209 21,029 1.60 liabilities Noninterest-bearing 3,007,222 1,796,802 demand depositsOther liabilities 178,481 129,794 Stockholders' equity 1,390,544 1,099,078 Total liabilities and $ 12,903,156 $ 8,294,883 stockholders' equity Net interest income $ 102,839 3.27 % $ 67,394 3.05 %and spreadLess: tax-equivalent 1,325 1,209 adjustmentNet interest income $ 101,514 $ 66,185 Interest income/ 3.92 % 4.65 %earning assetsInterest expense/ 0.45 1.11 earning assetsNet interest margin 3.47 % 3.54 % (1) Tax-equivalent income has been adjusted using the combined marginal federaland state rate of 25.45% for 2020 and 2019. The annualized taxable-equivalentadjustments utilized inthe above table to compute yields aggregated to $1.3 million and $1.2 million in 2020 and 2019, respectively.(2) Non-accrual loans areincluded in the average balances.(3) Includes investments that are exempt from federal and state taxes.(4) Available-for-sale investments are presented at amortized cost.

Sandy Spring Bancorp, Inc. and SubsidiariesCONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED Six Months Ended June 30, 2020 2019 Annualized Annualized Average (1) Average Average (1) Average (Dollars in thousands Balances Interest Yield/Rate Balances Interest Yield/Rate and tax-equivalent)Assets Residential mortgage $ 1,174,176 $ 22,000 3.75 % $ 1,237,241 $ 23,759 3.84 %loansResidential 154,122 3,252 4.24 181,864 3,836 4.25 construction loansTotal mortgage loans 1,328,298 25,252 3.80 1,419,105 27,595 3.89 Commercial AD&C loans 814,372 19,215 4.74 681,271 20,148 5.96 Commercial investor 2,825,672 63,691 4.53 1,962,799 50,086 5.15 real estate loansCommercial owneroccupied real estate 1,483,465 35,000 4.74 1,211,737 29,226 4.86 loansCommercial business 1,359,199 29,603 4.38 768,390 21,129 5.55 loansTotal commercial 6,482,708 147,509 4.58 4,624,197 120,589 5.26 loansConsumer loans 520,524 10,497 4.06 510,411 12,665 5.00 Total loans (2) 8,331,530 183,258 4.42 6,553,713 160,849 4.94 Loans held for sale 44,171 696 3.15 27,537 573 4.17 Taxable securities 1,068,549 13,367 2.50 756,613 11,665 3.09 Tax-exempt securities 220,286 3,561 3.23 231,161 4,132 3.57 (3)Total investment 1,288,835 16,928 2.63 987,774 15,797 3.20 securities (4)Interest-bearing 293,001 335 0.23 53,543 622 2.34 deposits with banksFederal funds sold 338 1 0.53 624 6 1.97 Totalinterest-earning 9,957,875 201,218 4.06 7,623,191 177,847 4.70 assets Less: allowance for (90,412 ) (53,081 ) credit lossesCash and due from 125,805 64,264 banksPremises and 59,445 61,294 equipment, netOther assets 747,127 580,933 Total assets $ 10,799,840 $ 8,276,601 Liabilities and Stockholders' EquityInterest-bearing $ 953,951 1,154 0.24 % $ 725,816 760 0.21 %demand depositsRegular savings 349,155 146 0.08 332,138 211 0.13 depositsMoney market savings 2,369,566 8,046 0.68 1,674,608 12,896 1.55 depositsTime deposits 1,949,039 16,456 1.70 1,625,469 16,759 2.08 Totalinterest-bearing 5,621,711 25,802 0.92 4,358,031 30,626 1.42 depositsOther borrowings 475,386 1,180 0.50 164,043 688 0.85 Advances from FHLB 653,878 1,022 0.32 773,856 10,167 2.65 Subordinated 218,508 4,933 4.52 37,394 981 5.25 debenturesTotal borrowings 1,347,772 7,135 1.07 975,293 11,836 2.45 Totalinterest-bearing 6,969,483 32,937 0.95 5,333,324 42,462 1.61 liabilities Noninterest-bearing 2,402,225 1,740,076 demand depositsOther liabilities 167,834 116,945 Stockholders' equity 1,260,298 1,086,256 Total liabilities and $ 10,799,840 $ 8,276,601 stockholders' equity Net interest income $ 168,281 3.11 % $ 135,385 3.09 %and spreadLess: tax-equivalent 2,433 2,450 adjustmentNet interest income $ 165,848 $ 132,935 Interest income/ 4.06 % 4.70 %earning assetsInterest expense/ 0.67 1.12 earning assetsNet interest margin 3.39 % 3.58 % (1) Tax-equivalent income has been adjusted using the combined marginal federaland state rate of 25.45% for 2020 and 2019. The annualized taxable-equivalentadjustments utilized inthe above table to compute yields aggregated to $2.4 million and $2.5 million in 2020 and 2019, respectively.(2) Non-accrual loansare included in the average balances.(3) Includes investments that are exempt from federal and state taxes.(4) Available-for-sale investments are presented at amortized cost.