GlobeNewswire Inc | Jan 21, 2021 07:00AM EST

January 21, 2021

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

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

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

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

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

Fourth Quarter Highlights:

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

Branch Rationalization

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

Response to COVID-19

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

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

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

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

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

The level of non-performing loans to total loans increased to 1.11% at December 31, 2020, compared to 0.62% at December 31, 2019, and 0.72% at September 30, 2020. At December 31, 2020, non-performing loans totaled $115.5 million, compared to $41.3 million at December 31, 2019, and $74.7 million at September 30, 2020. Non-performing loans include non-accrual loans, accruing loans 90 days or more past due and restructured loans. The year-over-year growth in non-performing loans was driven by three major components: loans placed in non-accrual status, acquired Revere non-accrual loans, and loans previously accounted for as purchased credit impaired loans that have been designated as non-accrual loans as a result of the 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 $54.7 million compared to $5.4 million for the prior year quarter and $0.9 million for the third quarter of 2020. Loans placed on non-accrual status during the current quarter relate primarily to a limited number of large borrowing relationships within the hospitality sector. These large relationships are collateral dependent and required no individual reserves due to sufficient values of the underlying collateral.

The Company recorded net charge-offs of $0.5 million for the fourth quarter of 2020, as compared to net charge-offs of $0.5 million and $0.2 million for the fourth quarter of 2019 and third quarter of 2020, respectively.

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

Income Statement Review

Quarterly Results

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

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

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

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

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

Year to Date Results

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

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

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

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

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

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

The non-GAAP efficiency ratio for the current year was 46.53% compared to 51.52% for the prior year. The improvement in the current years efficiency ratio compared to the prior year was the result of the growth in non-GAAP revenue, which outpaced the growth in non-GAAP non-interest expense.

Explanation of Non-GAAP Financial Measures

This news release contains financial information and performance measures determined by methods other than in accordance with generally accepted accounting principles in the United States (GAAP). The 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 - and the related measures of operating earnings per share, operating return on average assets and operating return on average tangible common equity - reflect net income exclusive of the provision for credit losses, merger and acquisition expense and the income and expense associated with the PPP program, in each case net of tax.

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

Conference Call

The Companys management will host a conference call to discuss its fourth quarter results today at 2:00 p.m. (ET). A live Webcast of the conference call is available through the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com. Participants may call 1-866-235-9910. A password is not necessary. Visitors to the Website are advised to log on 10 minutes ahead of the scheduled start of the call. An internet-based replay will be available on the website until 9:00 am (ET) February 4, 2021. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10150939.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank, a premier community bank in the Greater Washington, D.C. region. With over 60 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Northern Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services.

For additional information or questions, please contact:

Daniel J. Schrider, President & Chief Executive Officer, or Philip J. Mantua, E.V.P. & Chief Financial OfficerSandy Spring Bancorp 17801 Georgia AvenueOlney, Maryland 208321-800-399-5919Email:DSchrider@sandyspringbank.com PMantua@sandyspringbank.comWebsite: www.sandyspringbank.com

Media Contact:Jen Schell 301-570-8331jschell@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 Spring Bancorp, Inc. and Subsidiaries FINANCIAL HIGHLIGHTS - UNAUDITED Three Months Ended December 31, Year Ended December 31, (Dollars in % %thousands, 2020 2019 Change 2020 2019 Changeexcept per sharedata)Results of operations:Net interest $ 99,827 $ 65,583 52 % $ 363,159 $ 265,308 37 %incomeProvision/(credit) for (4,489 ) 1,655 n/m 85,669 4,684 n/m credit lossesNon-interest 32,234 19,224 68 102,716 71,322 44 incomeNon-interest 61,661 46,081 34 255,782 179,085 43 expenseIncome beforeincome tax 74,889 37,071 102 124,424 152,861 (19 )expenseNet income 56,662 28,457 99 96,953 116,433 (17 ) Net incomeattributable to $ 56,194 $ 28,273 99 $ 96,170 $ 115,671 (17 )commonshareholdersPre-taxpre-provision $ 70,403 $ 39,674 77 $ 235,267 $ 158,857 48 pre-mergerincome (1) Return on 1.78 % 1.32 % 0.82 % 1.39 % average assetsReturn onaverage common 15.72 % 9.93 % 7.24 % 10.51 % equityReturn onaverage tangible 22.24 % 14.39 % 10.38 % 15.33 % common equityNet interest 3.38 % 3.38 % 3.35 % 3.51 % marginEfficiency ratio 46.69 % 54.34 % 54.90 % 53.20 % - GAAP basis (2)Efficiency ratio- Non-GAAP basis 45.09 % 51.98 % 46.53 % 51.52 % (2) Per share data: Basic net income $ 1.19 $ 0.80 49 % $ 2.19 $ 3.25 (33 )%per common shareDiluted netincome per $ 1.19 $ 0.80 49 $ 2.18 $ 3.25 (33 )common shareWeighted averagediluted common 47,284,808 35,543,254 33 44,132,251 35,617,924 24 sharesDividendsdeclared per $ 0.30 $ 0.30 - $ 1.20 $ 1.18 2 shareBook value per $ 31.24 $ 32.40 (4 ) $ 31.24 $ 32.40 (4 )common shareTangible bookvalue per common $ 22.28 $ 22.37 - $ 22.28 $ 22.37 - share (1)Outstanding 47,056,777 34,970,370 35 47,056,777 34,970,370 35 common shares Financialcondition at period-end:Investment $ 1,413,781 $ 1,125,136 26 % $ 1,413,781 $ 1,125,136 26 %securitiesLoans 10,400,509 6,705,232 55 10,400,509 6,705,232 55 Interest-earning 12,095,936 7,947,703 52 12,095,936 7,947,703 52 assetsAssets 12,798,429 8,629,002 48 12,798,429 8,629,002 48 Deposits 10,033,069 6,440,319 56 10,033,069 6,440,319 56 Interest-bearing 7,856,842 5,485,055 43 7,856,842 5,485,055 43 liabilitiesStockholders' 1,469,955 1,132,974 30 1,469,955 1,132,974 30 equity Capital ratios: Tier 1 leverage 8.92 % 9.70 % 8.92 % 9.70 % (3)Common equitytier 1 capital 10.58 % 11.06 % 10.58 % 11.06 % to risk-weightedassets (3)Tier 1 capitalto risk-weighted 10.58 % 11.21 % 10.58 % 11.21 % assets (3)Total regulatorycapital to 13.93 % 14.85 % 13.93 % 14.85 % risk-weightedassets (3)Tangible commonequity to 8.46 % 9.46 % 8.46 % 9.46 % tangible assets(4)Average equityto average 11.34 % 13.31 % 11.38 % 13.25 % assets Credit quality ratios:Allowance forcredit losses to 1.59 % 0.84 % 1.59 % 0.84 % loansNon-performingloans to total 1.11 % 0.62 % 1.11 % 0.62 % loansNon-performingassets to total 0.91 % 0.50 % 0.91 % 0.50 % assetsAllowance forcredit losses to 143.23 % 136.02 % 143.23 % 136.02 % non-performingloansAnnualized netcharge-offs to 0.02 % 0.03 % 0.01 % 0.03 % average loans(5) n/m - not meaningful(1) Represents a Non-GAAP measure.(2) The efficiency ratio - GAAP basis is non-interest expense divided by netinterest income plus non-interest income from the Consolidated Statements ofIncome. The traditional efficiency ratio - Non-GAAP basis excludes intangibleasset amortization, loss on FHLB redemption, and merger and acquisition expensefrom non-interest expense; securities gains from non-interest income and addsthe tax- equivalent adjustment to net interest income. See the ReconciliationTable included with these Financial Highlights.(3) Estimated ratio at December31, 2020.(4) The tangible common equity to tangible assets ratio is a non-GAAP ratiothat divides assets excluding intangible assets into stockholders' equity afterdeducting intangible assets and other comprehensive gains/ (losses). See theReconciliation Table included with these Financial Highlights.(5) Calculation utilizes average loans, excluding residential mortgage loansheld-for-sale.

Sandy SpringBancorp, Inc. andSubsidiariesRECONCILIATIONTABLE - UNAUDITED Three Months Ended December 31, Year Ended December 31,(Dollars in 2020 2019 2020 2019 thousands)Pre-taxpre-provision pre-mergerincome:Net income $ 56,662 $ 28,457 $ 96,953 $ 116,433 Plus non-GAAP adjustments:Merger andacquisition 3 948 25,174 1,312 expenseIncome tax 18,227 8,614 27,471 36,428 expenseProvision/(credit) for (4,489 ) 1,655 85,669 4,684 credit lossesPre-taxpre-provision $ 70,403 $ 39,674 $ 235,267 $ 158,857 pre-mergerincome Efficiencyratio - GAAP basis:Non-interest $ 61,661 $ 46,081 $ 255,782 $ 179,085 expense Net interestincome plus $ 132,061 $ 84,807 $ 465,875 $ 336,630 non-interestincome Efficiencyratio - GAAP 46.69 % 54.34 % 54.90 % 53.20 %basis Efficiencyratio - Non-GAAPbasis:Non-interest $ 61,661 $ 46,081 $ 255,782 $ 179,085 expenseLess non-GAAP adjustments:Amortizationof intangible 1,655 481 6,221 1,946 assetsLoss on FHLB - - 5,928 - redemptionMerger andacquisition 3 948 25,174 1,312 expenseNon-interestexpense - as $ 60,003 $ 44,652 $ 218,459 $ 175,827 adjusted Net interestincome plus $ 132,061 $ 84,807 $ 465,875 $ 336,630 non-interestincomePlus non-GAAP adjustment:Tax-equivalent 1,052 1,149 4,128 4,746 incomeLess non-GAAP adjustment:Investmentsecurities 35 57 467 77 gainsNet interestincome plusnon-interest $ 133,078 $ 85,899 $ 469,536 $ 341,299 income - asadjusted Efficiencyratio - 45.09 % 51.98 % 46.53 % 51.52 %Non-GAAP basis Tangiblecommon equity ratio:Totalstockholders' $ 1,469,955 $ 1,132,974 $ 1,469,955 $ 1,132,974 equityAccumulatedother (18,705 ) 4,332 (18,705 ) 4,332 comprehensive(income)/ lossGoodwill (370,223 ) (347,149 ) (370,223 ) (347,149 )Otherintangible (32,521 ) (7,841 ) (32,521 ) (7,841 )assets, netTangible $ 1,048,506 $ 782,316 $ 1,048,506 $ 782,316 common equity Total assets $ 12,798,429 $ 8,629,002 $ 12,798,429 $ 8,629,002 Goodwill (370,223 ) (347,149 ) (370,223 ) (347,149 )Otherintangible (32,521 ) (7,841 ) (32,521 ) (7,841 )assets, netTangible $ 12,395,685 $ 8,274,012 $ 12,395,685 $ 8,274,012 assets Tangiblecommon equity 8.46 % 9.46 % 8.46 % 9.46 %ratio Outstanding 47,056,777 34,970,370 47,056,777 34,970,370 common sharesTangible bookvalue per $ 22.28 $ 22.37 $ 22.28 $ 22.37 common share

Sandy SpringBancorp, Inc. andSubsidiariesRECONCILIATIONTABLE - UNAUDITED(CONTINUED)OPERATINGEARNINGS - METRICS Three Months Ended December 31, Year Ended December 31,(Dollars in 2020 2019 2020 2019 thousands)Operatingearnings (non-GAAP):Net income $ 56,662 $ 28,457 $ 96,953 $ 116,433 Plus non-GAAP adjustments:Provision/(credit) for (3,343 ) 1,205 63,789 3,460 credit losses- net of taxMerger andacquisition 3 698 18,745 969 expense - netof taxPPPLF fundingexpense - net 122 - 829 - of taxLess non-GAAP adjustment:PPP interestincome and net 5,239 - 14,948 - deferred fee -net of taxOperatingearnings $ 48,205 $ 30,360 $ 165,368 $ 120,862 (Non-GAAP) Operatingearnings per common share(non-GAAP):Weightedaverage commonshares 47,284,808 35,543,254 44,132,251 35,617,924 outstanding -diluted (GAAP) Earnings perdiluted common $ 1.19 $ 0.80 $ 2.18 $ 3.25 share (GAAP)Operatingearnings perdiluted common $ 1.02 $ 0.85 $ 3.75 $ 3.39 share(non-GAAP) Operatingreturn on average assets(non-GAAP):Average assets $ 12,645,329 $ 8,542,837 $ 11,775,096 $ 8,367,139 (GAAP)Average PPP (1,060,995 ) - (710,264 ) - loansAdjustedaverage assets $ 11,584,334 $ 8,542,837 $ 11,064,832 $ 8,367,139 (non-GAAP) Return onaverage assets 1.78 % 1.32 % 0.82 % 1.39 %(GAAP)Operatingreturn onadjusted 1.66 % 1.41 % 1.49 % 1.44 %average assets(non-GAAP) Operatingreturn onaverage tangiblecommon equity(non-GAAP):Average totalstockholders' $ 1,433,900 $ 1,136,824 $ 1,339,491 $ 1,108,310 equity (GAAP)Averageaccumulatedother (16,398 ) 3,005 (11,326 ) 7,069 comprehensive(income)/ lossAverage (370,419 ) (347,149 ) (365,543 ) (347,149 )goodwillAverage otherintangible (33,675 ) (8,146 ) (28,357 ) (8,873 )assets, netAveragetangible $ 1,013,408 $ 784,534 $ 934,265 $ 759,357 common equity(non-GAAP) Return onaveragetangible 22.24 % 14.39 % 10.38 % 15.33 %common equity(GAAP)Operatingreturn onaverage 18.92 % 15.35 % 17.70 % 15.92 %tangiblecommon equity(non-GAAP)

Sandy Spring Bancorp, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED (Dollars in thousands) December 31, December 31, 2020 2019Assets Cash and due from banks $ 93,651 $ 82,469 Federal funds sold 291 208 Interest-bearing deposits with banks 203,061 63,426 Cash and cash equivalents 297,003 146,103 Residential mortgage loans held for sale 78,294 53,701 (at fair value)Investments available-for-sale (at fair 1,348,021 1,073,333 value)Other equity securities 65,760 51,803 Total loans 10,400,509 6,705,232 Less: allowance for credit losses (165,367 ) (56,132 )Net loans 10,235,142 6,649,100 Premises and equipment, net 57,720 58,615 Other real estate owned 1,455 1,482 Accrued interest receivable 46,431 23,282 Goodwill 370,223 347,149 Other intangible assets, net 32,521 7,841 Other assets 265,859 216,593 Total assets $ 12,798,429 $ 8,629,002 Liabilities Noninterest-bearing deposits $ 3,325,547 $ 1,892,052 Interest-bearing deposits 6,707,522 4,548,267 Total deposits 10,033,069 6,440,319 Securities sold under retail repurchase 543,157 213,605 agreements and federal funds purchasedAdvances from FHLB 379,075 513,777 Subordinated debentures 227,088 209,406 Total borrowings 1,149,320 936,788 Accrued interest payable and other 146,085 118,921 liabilitiesTotal liabilities 11,328,474 7,496,028 Stockholders' equity Common stock -- par value $1.00; sharesauthorized 100,000,000; shares issuedand outstanding 47,056,777 and 47,057 34,970 34,970,370 at December31, 2020 andDecember31, 2019, respectivelyAdditional paid in capital 846,922 586,622 Retained earnings 557,271 515,714 Accumulated other comprehensive income/ 18,705 (4,332 )(loss)Total stockholders' equity 1,469,955 1,132,974 Total liabilities and stockholders' $ 12,798,429 $ 8,629,002 equity

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

Sandy Spring Bancorp, Inc. and SubsidiariesHISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED 2020 2019 (Dollars in thousands, Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1except per share data)Profitability for the quarter:Tax-equivalent $ 112,843 $ 113,627 $ 116,252 $ 84,966 $ 86,539 $ 88,229 $ 88,423 $ 89,424 interest incomeInterest expense 11,964 15,500 13,413 19,524 19,807 20,292 21,029 21,433 Tax-equivalent net 100,879 98,127 102,839 65,442 66,732 67,937 67,394 67,991 interest incomeTax-equivalent 1,052 643 1,325 1,108 1,149 1,147 1,209 1,241 adjustmentProvision/ (credit) (4,489 ) 7,003 58,686 24,469 1,655 1,524 1,633 (128 )for credit lossesNon-interest income 32,234 29,390 22,924 18,168 19,224 18,573 16,556 16,969 Non-interest expense 61,661 60,937 85,438 47,746 46,081 44,925 43,887 44,192 Income/ (loss) beforeincome tax expense/ 74,889 58,934 (19,686 ) 10,287 37,071 38,914 37,221 39,655 (benefit)Income tax expense/ 18,227 14,292 (5,348 ) 300 8,614 9,531 8,945 9,338 (benefit)Net income/ (loss) $ 56,662 $ 44,642 $ (14,338 ) $ 9,987 $ 28,457 $ 29,383 $ 28,276 $ 30,317 Financial performance: Pre-tax pre-provision $ 70,403 $ 67,200 $ 61,454 $ 36,210 $ 39,674 $ 40,802 $ 38,854 $ 39,527 pre-merger incomeReturn on average 1.78 % 1.38 % (0.45 )% 0.46 % 1.32 % 1.39 % 1.37 % 1.49 %assetsReturn on average 15.72 % 12.67 % (4.15 )% 3.55 % 9.93 % 10.38 % 10.32 % 11.46 %common equityReturn on average 22.24 % 18.16 % (5.80 )% 5.36 % 14.39 % 15.13 % 15.10 % 16.82 %tangible common equityNet interest margin 3.38 % 3.24 % 3.47 % 3.29 % 3.38 % 3.51 % 3.54 % 3.60 %Efficiency ratio - 46.69 % 48.03 % 68.66 % 57.87 % 54.34 % 52.63 % 53.04 % 52.79 %GAAP basis ^(1)Efficiency ratio - 45.09 % 45.27 % 43.85 % 54.76 % 51.98 % 50.95 % 51.71 % 51.44 %Non-GAAP basis ^(1)Per share data: Net income/ (loss)attributable to common $ 56,194 $ 44,268 $ (14,458 ) $ 9,919 $ 28,274 $ 29,196 $ 28,065 $ 30,120 shareholdersBasic net income/(loss) per common $ 1.19 $ 0.94 $ (0.31 ) $ 0.29 $ 0.80 $ 0.82 $ 0.79 $ 0.85 shareDiluted net income/(loss) per common $ 1.19 $ 0.94 $ (0.31 ) $ 0.28 $ 0.80 $ 0.82 $ 0.79 $ 0.85 shareWeighted average 47,284,808 47,175,071 46,988,351 34,743,623 35,543,254 35,671,721 35,634,924 35,618,346 diluted common sharesDividends declared per $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 $ 0.28 shareNon-interest income: Securities gains $ 35 $ 51 $ 212 $ 169 $ 57 $ 15 $ 5 $ - Service charges on 1,917 1,673 1,223 2,253 2,427 2,516 2,442 2,307 deposit accountsMortgage banking 14,491 14,108 8,426 3,033 4,170 4,408 3,270 2,863 activitiesWealth management 8,215 7,785 7,604 6,966 6,401 5,493 5,539 5,236 incomeInsurance agency 1,356 2,122 1,188 2,129 1,331 2,116 1,265 1,900 commissionsIncome from bank owned 705 708 809 645 660 662 654 1,189 life insuranceBank card fees 1,570 1,525 1,257 1,320 1,435 1,462 1,467 1,252 Other income 3,945 1,418 2,205 1,653 2,743 1,901 1,914 2,222 Total non-interest $ 32,234 $ 29,390 $ 22,924 $ 18,168 $ 19,224 $ 18,573 $ 16,556 $ 16,969 incomeNon-interest expense: Salaries and employee $ 36,080 $ 36,041 $ 34,297 $ 28,053 $ 26,251 $ 26,234 $ 25,489 $ 25,976 benefitsOccupancy expense of 5,236 5,575 5,991 4,581 4,663 4,816 4,760 5,231 premisesEquipment expenses 3,121 3,133 3,219 2,751 2,791 2,641 2,712 2,576 Marketing 1,058 1,305 729 1,189 1,085 1,541 887 943 Outside data services 2,394 2,614 2,169 1,582 1,854 1,973 1,962 1,778 FDIC insurance 1,527 1,340 1,378 482 123 (83 ) 1,084 1,136 Amortization of 1,655 1,968 1,998 600 481 491 483 491 intangible assetsMerger and acquisition 3 1,263 22,454 1,454 948 364 - - expenseProfessional fees and 2,473 1,800 1,840 1,826 2,553 1,546 1,634 1,245 servicesOther expenses 8,114 5,898 11,363 5,228 5,332 5,402 4,876 4,816 Total non-interest $ 61,661 $ 60,937 $ 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 ConsolidatedStatements of Income. The traditional efficiency ratio - Non-GAAP basisexcludes intangible asset amortization, loss on FHLB redemption, and merger andacquisition expense from non-interest expense; securities gains fromnon-interest income; and adds the tax- equivalent adjustment to net interestincome. See the Reconciliation Table included with these Financial Highlights.

Sandy Spring Bancorp, Inc. and SubsidiariesHISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED 2020 2019 (Dollars inthousands, except Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1per share data)Balance sheets at quarter end: Commercial investor $ 3,634,720 $ 3,588,702 $ 3,581,778 $ 2,241,240 $ 2,169,156 $ 2,036,021 $ 1,994,027 $ 1,962,879 real estate loansCommercialowner-occupied real 1,642,216 1,652,208 1,601,803 1,305,682 1,288,677 1,278,505 1,224,986 1,216,713 estate loansCommercial AD&C 1,050,973 994,800 997,423 643,114 684,010 678,906 658,709 688,939 loansCommercial business 2,267,548 2,227,246 2,222,810 813,525 801,019 772,619 772,158 769,660 loansResidential 1,105,179 1,173,857 1,211,745 1,116,512 1,149,327 1,199,275 1,241,081 1,249,968 mortgage loansResidential 182,619 175,123 169,050 149,573 146,279 150,692 171,106 176,388 construction loansConsumer loans 517,254 521,999 558,434 453,346 466,764 480,530 489,176 505,443 Total loans 10,400,509 10,333,935 10,343,043 6,722,992 6,705,232 6,596,548 6,551,243 6,569,990 Allowance for (165,367 ) (170,314 ) (163,481 ) (85,800 ) (56,132 ) (54,992 ) (54,024 ) (53,089 )credit lossesLoans held for sale 78,294 88,728 68,765 67,114 53,701 78,821 50,511 24,998 Investment 1,413,781 1,425,733 1,424,652 1,250,560 1,125,136 946,210 955,715 987,299 securitiesInterest-earning 12,095,936 11,965,915 12,447,146 8,222,589 7,947,703 7,742,138 7,713,364 7,648,654 assetsTotal assets 12,798,429 12,678,131 13,290,447 8,929,602 8,629,002 8,437,538 8,398,519 8,327,900 Noninterest-bearing 3,325,547 3,458,804 3,434,038 1,939,937 1,892,052 2,081,435 2,023,614 1,813,708 demand depositsTotal deposits 10,033,069 9,964,969 10,076,834 6,593,874 6,440,319 6,493,899 6,389,749 6,224,523 Customer repurchase 153,157 142,287 143,579 125,305 138,605 126,008 150,604 122,626 agreementsTotalinterest-bearing 7,856,842 7,643,381 8,313,546 5,732,349 5,485,055 5,093,265 5,136,860 5,297,108 liabilitiesTotal stockholders' 1,469,955 1,424,749 1,390,093 1,116,334 1,132,974 1,140,041 1,119,445 1,095,848 equityQuarterly average balance sheets: Commercial investor $ 3,599,648 $ 3,582,751 $ 3,448,882 $ 2,202,461 $ 2,092,478 $ 1,982,979 $ 1,960,919 $ 1,964,699 real estate loansCommercialowner-occupied real 1,643,817 1,628,474 1,681,674 1,285,257 1,274,782 1,258,000 1,215,632 1,207,799 estate loansCommercial AD&C 1,017,304 977,607 969,251 659,494 695,817 651,905 686,282 676,205 loansCommercial business 2,189,828 2,207,388 1,899,264 819,133 765,159 786,150 756,594 780,318 loansResidential 1,136,989 1,189,452 1,208,566 1,139,786 1,169,623 1,215,132 1,244,086 1,230,319 mortgage loansResidential 180,494 173,280 162,978 145,266 149,690 162,196 174,095 189,720 construction loansConsumer loans 515,202 543,242 575,734 465,314 477,572 486,865 505,235 515,644 Total loans 10,283,282 10,302,194 9,946,349 6,716,711 6,625,121 6,543,227 6,542,843 6,564,704 Loans held for sale 68,255 54,784 53,312 35,030 50,208 61,870 37,121 17,846 Investment 1,418,683 1,404,238 1,398,586 1,179,084 1,002,692 941,048 964,863 1,010,940 securitiesInterest-earning 11,882,542 12,049,463 11,921,132 7,994,618 7,859,836 7,690,629 7,619,240 7,627,187 assetsTotal assets 12,645,329 12,835,893 12,903,156 8,699,342 8,542,837 8,370,789 8,294,883 8,258,116 Noninterest-bearing 3,424,729 3,281,607 3,007,222 1,797,227 1,927,063 1,909,884 1,796,802 1,682,720 demand depositsTotal deposits 9,999,144 9,862,639 9,614,176 6,433,694 6,459,551 6,405,762 6,247,409 5,952,942 Customer repurchase 146,685 142,694 144,050 135,652 126,596 138,736 141,865 129,059 agreementsTotalinterest-bearing 7,609,829 7,969,487 8,326,909 5,612,056 5,326,303 5,202,876 5,269,209 5,403,946 liabilitiesTotal stockholders' 1,433,900 1,401,746 1,390,544 1,130,051 1,136,824 1,123,185 1,099,078 1,073,291 equityFinancial measures: Average equity to 11.34 % 10.92 % 10.78 % 12.99 % 13.31 % 13.42 % 13.25 % 13.00 %average assetsInvestmentsecurities to 11.69 % 11.91 % 11.45 % 15.21 % 14.16 % 12.22 % 12.39 % 12.91 %earning assetsLoans to earning 85.98 % 86.36 % 83.10 % 81.76 % 84.37 % 85.20 % 84.93 % 85.90 %assetsLoans to assets 81.26 % 81.51 % 77.82 % 75.29 % 77.71 % 78.18 % 78.00 % 78.89 %Loans to deposits 103.66 % 103.70 % 102.64 % 101.96 % 104.11 % 101.58 % 102.53 % 105.55 %Capital measures: Tier 1 leverage^ 8.92 % 8.65 % 8.35 % 8.78 % 9.70 % 9.96 % 9.80 % 9.61 %(1)Common equity tier1 capital to risk 10.58 % 10.45 % 10.23 % 10.23 % 11.06 % 11.37 % 11.43 % 11.19 %weighted assets^(1)Tier 1 capital torisk-weighted 10.58 % 10.45 % 10.23 % 10.23 % 11.21 % 11.52 % 11.59 % 11.35 %assets^ (1)Total regulatorycapital to 13.93 % 14.02 % 13.79 % 14.09 % 14.85 % 12.70 % 12.79 % 12.54 %risk-weightedassets ^(1)Book value per $ 31.24 $ 30.30 $ 29.58 $ 32.68 $ 32.40 $ 32.00 $ 31.43 $ 30.82 common shareOutstanding common 47,056,777 47,025,779 47,001,022 34,164,672 34,970,370 35,625,822 35,614,953 35,557,110 shares (1) Estimated ratio at December31,2020.

Sandy Spring Bancorp, Inc. and SubsidiariesLOAN PORTFOLIO QUALITY DETAIL - UNAUDITED 2020 2019 (Dollars in December 31, September 30, June 30, March 31, December 31, September June 30, March 31,thousands) 30,Non-performing assets:Loans 90 days past due:Commercial real estate:Commercialinvestor real $ 133 $ - $ 775 $ - $ - $ 1,201 $ 1,248 $ - estateCommercialowner-occupied - - 515 - - - - 90 real estateCommercial AD& - - - - - - - - CCommercial 161 93 - - - 17 - - businessResidential real estate:Residential 480 320 138 8 - - - 221 mortgageResidential - - - - - - - - constructionConsumer - 1 - - - - - - Total loans 90 774 414 1,428 8 - 1,218 1,248 311 days past dueNon-accrual loans:Commercial real estate:Commercialinvestor real 45,227 26,784 26,482 17,770 8,437 8,454 6,409 6,071 estateCommercialowner-occupied 11,561 6,511 6,729 4,074 4,148 3,810 3,766 5,992 real estateCommercial AD& 15,044 1,678 2,957 829 829 829 1,990 3,306 CCommercial 22,933 17,659 20,246 10,834 8,450 6,393 7,083 8,013 businessResidential real estate:Residential 10,212 11,296 11,724 12,271 12,661 12,574 10,625 9,704 mortgageResidential - - - - - - - 156 constructionConsumer 7,384 7,493 7,800 5,596 4,107 4,561 4,439 4,081 Totalnon-accrual 112,361 71,421 75,938 51,374 38,632 36,621 34,312 37,323 loansTotalrestructured 2,317 2,854 2,553 2,575 2,636 2,287 2,133 2,479 loans -accruingTotalnon-performing 115,452 74,689 79,919 53,957 41,268 40,126 37,693 40,113 loansOther assetsand other real 1,455 1,389 1,389 1,416 1,482 1,482 1,486 1,410 estate owned(OREO)Totalnon-performing $ 116,907 $ 76,078 $ 81,308 $ 55,373 $ 42,750 $ 41,608 $ 39,179 $ 41,523 assets For the Quarter Ended,(Dollars in December 31, September 30, June 30, 2020 March 31, December 31, September June 30, March 31,thousands) 2020 2020 2020 2019 30, 2019 2019 2019Analysis ofnon-accrual loan activity:Balance atbeginning of $ 71,421 $ 75,938 $ 51,374 $ 38,632 $ 36,621 $ 34,312 $ 37,323 $ 33,583 periodPurchasedcreditdeteriorated - - - 13,084 - - - - loansdesignated asnon-accrualNon-accrualbalances (70 ) - - - - - (195 ) - transferred toOREONon-accrualbalances (513 ) (144 ) (162 ) (575 ) (454 ) (705 ) (604 ) (227 )charged-offNet payments (13,212 ) (4,248 ) (1,881 ) (1,860 ) (2,916 ) (2,903 ) (5,517 ) (1,786 )or drawsLoans placed 54,735 893 27,289 2,369 5,381 6,015 3,396 6,202 on non-accrualNon-accrualloans brought - (1,018 ) (682 ) (276 ) - (98 ) (91 ) (449 )currentBalance at end $ 112,361 $ 71,421 $ 75,938 $ 51,374 $ 38,632 $ 36,621 $ 34,312 $ 37,323 of period Analysis ofallowance for credit losses:Balance atbeginning of $ 170,314 $ 163,481 $ 85,800 $ 56,132 $ 54,992 $ 54,024 $ 53,089 $ 53,486 periodTransitionimpact of - - - 2,983 - - - - adopting ASC326Initialallowance onpurchased - - - 2,762 - - - - creditdeterioratedloansInitialallowance on - - 18,628 - - - - - acquired PCDloansProvision/(credit) for (4,489 ) 7,003 58,686 24,469 1,655 1,524 1,633 (128 )credit lossesLess loanscharged-off, net ofrecoveries:Commercial real estate:Commercialinvestor real 379 21 (4 ) - (3 ) (3 ) (3 ) (7 )estateCommercialowner-occupied - - - - - - - - real estateCommercial AD& - - - - - (224 ) (4 ) - CCommercial 56 88 (463 ) 108 15 389 735 7 businessResidential real estate:Residential 37 (6 ) 15 333 264 209 (10 ) 89 mortgageResidential (1 ) (2 ) (1 ) (2 ) (2 ) (2 ) (2 ) (2 )constructionConsumer (13 ) 69 86 107 241 187 (18 ) 182 Netcharge-offs/ 458 170 (367 ) 546 515 556 698 269 (recoveries)Balance at the $ 165,367 $ 170,314 $ 163,481 $ 85,800 $ 56,132 $ 54,992 $ 54,024 $ 53,089 end of period Asset quality ratios:Non-performingloans to total 1.11 % 0.72 % 0.77 % 0.80 % 0.62 % 0.61 % 0.58 % 0.61 %loansNon-performingassets to 0.91 % 0.60 % 0.61 % 0.62 % 0.50 % 0.49 % 0.47 % 0.50 %total assetsAllowance forcredit losses 1.59 % 1.65 % 1.58 % 1.28 % 0.84 % 0.83 % 0.82 % 0.81 %to loansAllowance forcredit lossesto 143.23 % 228.03 % 204.56 % 159.02 % 136.02 % 137.05 % 143.33 % 132.35 %non-performingloansAnnualized netcharge-offs/(recoveries) 0.02 % 0.01 % (0.01 )% 0.03 % 0.03 % 0.03 % 0.04 % 0.02 %to averageloans

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

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