GlobeNewswire Inc | Apr 22, 2021 07:00AM EDT

April 22, 2021

OLNEY, Md., April 22, 2021 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income of $75.5 million ($1.58 per diluted common share) for the first quarter of 2021. The current quarters result compares to net income of $10.0 million ($0.28 per diluted common share) for the first quarter of 2020 and net income of $56.7 million ($1.19 per diluted common share) for the fourth quarter of 2020.

Core earnings for the current quarter, which exclude the impact of the provision for credit losses and provision on unfunded loan commitments, merger and acquisition expense, loss on FHLB redemptions, amortization of intangibles and investment securities gains, each on an after-tax basis, were $56.9 million ($1.20 per diluted common share), compared to $29.6 million ($0.85 per diluted common share) for the quarter ended March31, 2020 and $55.7 million ($1.18 per diluted common share) for the quarter ended December31, 2020.

The current quarter's provision for credit losses was a credit of $34.7 million as compared to a credit of $4.5 million for the fourth quarter of 2020. The current quarter's large credit for the provision for credit losses compared to the prior quarter is principally the result of a decline in the forecasted unemployment rate and, to a lesser degree, improvements in other forecasted macroeconomic indicators.

We delivered a solid first quarter. We are pleased with the stability in the margin, the contributions of our fee-based lines of business, the improved economic forecast and the resiliency of our loan portfolios credit quality. Our credit outlook is strong, and we are ready to help our clients reopen, recover and emerge stronger than ever, said Daniel J. Schrider, President and CEO.

We also look forward to entering the next phase of our return-to-work plan. We will apply the lessons we have learned about remote work and how we can use technology to do our jobs more effectively, but it is our goal to welcome our employees back to our offices in the months ahead. As a company that prioritizes people and relationships, we believe that in-person collaboration is what is best for our culture and how we do business.

First Quarter Highlights:

-- Total assets at March31, 2021, grew 44% to $12.9 billion compared to March31, 2020, primarily due to the Revere Bank (Revere) acquisition in the second quarter of 2020. During this period, the participation in the Paycheck Protection Program ("PPP" or "PPP Program") resulted in the addition of $1.3 billion in outstanding commercial business loans. As a result of these strategic initiatives, loans and deposits grew by 55% and 62%, respectively.

-- The net interest margin was 3.56% for the first quarter of 2021, compared to 3.29% for the same quarter of 2020, and 3.38% for the fourth 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 3.46%, compared to 3.27% for first quarter of 2020, and 3.31% for the fourth quarter of 2020. -- The provision for credit losses was a credit of $34.7 million for the current quarter compared to the prior quarters credit to the provision of $4.5 million. The significant credit to the provision was primarily the result of the improvement in the forecasted unemployment rate. -- Non-interest income for the current quarter increased by 59% or $10.7 million compared to the prior year quarter, as a result of a 235% increase in income from mortgage banking activities and 25% growth in wealth management income as a result of the acquisition of Rembert Pendleton Jackson (RPJ) in the first quarter of the prior year. -- Non-interest expense increased $20.4 million or 43% for the first quarter of 2021, compared to the prior year quarter. This increase was driven primarily by two factors: the impact of the acquisitions of Revere and RPJ, which increased compensation and operational costs, in addition to intangible asset amortization, and $9.1 million in prepayment penalties incurred on the early redemption of FHLB advances in the first quarter of the current year. -- Return on average assets (ROA) for the quarter ended March31, 2021 was 2.39% and return on average tangible common equity (ROTCE) was 28.47%. This compares to ROA of 1.78% and ROTCE of 21.89% for the prior quarter. The non-GAAP efficiency ratio for the first quarter of 2021 was 42.65% compared to 45.09% for the fourth quarter of 2020. -- During the quarter, the dividend was increased to $0.32 from $0.30 per common share.

Balance Sheet and Credit Quality

Total assets grew to $12.9 billion at March31, 2021, as compared to $8.9 billion at March31, 2020. Year-over-year asset growth was primarily the result of the acquisition of Revere in April 2020, in addition to the Companys participation in the PPP program. During this period, total loans grew by 55% to $10.4 billion at March31, 2021, compared to $6.7 billion at March31, 2020. Excluding PPP loans, total loans grew 36% to $9.1 billion at March31, 2021 as compared to the prior year quarter. The 2020 acquisition of Revere drove the majority of the increase in commercial loans, which, excluding PPP loans, grew 49% or $2.5 billion. The residential mortgage loan portfolio decreased 8% year-over-year as the majority of loan originations during the past year were sold in the secondary market. Consumer loan growth during the year was 9%, also a result of the acquisition. Deposit growth was 62% during the past twelve months, as noninterest-bearing deposits experienced growth of 94% and interest-bearing deposits grew 48%. This growth was driven primarily by the Revere acquisition and, to a lesser extent, the PPP program.

During the current quarter the Company originated $446.0 million in first and second draw loans under the reinitiated PPP program. During the quarter, the Company recognized $7.9 million of fees into interest income from the total fees received under the program. In addition to processing applications for new loans under the reinitiated PPP program, the Company began accepting digital PPP forgiveness applications. As of April 9, 2021, $218.2 million of the Company's PPP loans have been granted forgiveness by the SBA.

During the first quarter of 2021, total loans, excluding PPP, declined $194.7 million as compared to December 31, 2020. This decline was a reflection of the high level of early pay-offs coupled with lower seasonally affected loan production. It is believed that this trend is temporary, and that due to the current credit resiliency of the portfolio and significant availability of liquidity, that the Company is well positioned for future loan growth.

At the end of the current quarter, 176 loans with an aggregate balance of $233.0 million remain in deferral status, of which non-accrual loans comprised $56.7 million. Currently, the vast majority of loans that had been granted modifications/deferrals due to pandemic related financial stress have returned to their original payment plans.

Tangible common equity increased to $1.1 billion or 8.90% of tangible assets at March31, 2021, compared to $726.8million or 8.51% at March31, 2020, as a result of the equity issuance in the Revere acquisition. The year-over-year change in tangible common equity also reflects the increase in intangible assets and goodwill associated with the Revere acquisition. Excluding the impact of the PPP program from tangible assets at March31, 2021, the tangible common equity ratio would be 9.94%. At March31, 2021, the Company had a total risk-based capital ratio of 15.49%, a common equity tier 1 risk-based capital ratio of 12.09%, a tier 1 risk-based capital ratio of 12.09%, and a tier 1 leverage ratio of 9.14%.

The level of non-performing loans to total loans was 0.94% at March31, 2021, compared to 0.80% at March31, 2020, and 1.11% at December31, 2020. At March31, 2021, non-performing loans totaled $98.7 million, compared to $54.0million at March31, 2020, and $115.5million at December31, 2020. During the current quarter, the Company realized the full settlement of $16.0 million in non-accrual loans and recognized $1.3 million in interest income. 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 two major components: loans placed on non-accrual status and acquired Revere non-accrual loans. Loans placed on non-accrual during the current quarter amounted to $0.4million compared to $2.4million for the prior year quarter and $54.7million for the fourth quarter of 2020. Loans in non-accrual status at quarter end included a small number of large borrowing relationships within the hospitality sector with an aggregate balance of $43.8 million. 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 $0.3 million for the first quarter of 2021, as compared to net charge-offs of $0.5 million for both the first quarter of 2020 and fourth quarter of 2020.

At March31, 2021, the allowance for credit losses was $130.4million or 1.25% of outstanding loans and 132% of non-performing loans, compared to $165.4million or 1.59% of outstanding loans and 143% of non-performing loans at December31, 2020. Excluding PPP loans, the allowance for credit losses to outstanding loans was 1.43% and 1.77%, at March 31, 2021 and December 31, 2020, respectively.

Income Statement Review

Quarterly Results

Net interest income for the first quarter of 2021 increased 63% compared to the first quarter of 2020, driven primarily by the acquisition of Revere. The PPP program contributed $10.9 million to net interest income for the quarter, of which $7.9 million represented PPP fees. The net interest margin for the first quarter of 2021 was 3.56% as compared to 3.29% for the same quarter of the prior year. Excluding the net $2.9 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin for the current quarter would have been 3.46% compared to the adjusted net interest margin of 3.27% for the first quarter of 2020.

The provision for credit losses was a credit of $34.7 million for the first quarter of 2021, compared to a charge of $24.5 million for the first quarter of 2020, and a credit of $4.5 million for the fourth quarter of 2020. The significant credit in the current quarters provision for credit losses, compared to the prior quarter's credit to the provision, reflects the impact of the improvement in the most recent forecasted unemployment rate. Other economic metrics and factors also contributed to benefit the current quarter's credit to the provision, which were partially offset by qualitative factors applied in the determination of the allowance.

Non-interest income increased $10.7 million or 59% during the current quarter compared to the same quarter of the prior year. Income from mortgage banking activities increased by $7.1 million during the current quarter compared to the prior year quarter. Mortgage banking income declined to $10.2 million for the three months ended March 31, 2021 compared to $14.5 million for the previous quarter as a result of decreasing margins on mortgages sold during the quarter. Additionally, wealth management income increased $1.8 million as a result of the first quarter 2020 acquisition of RPJ. During the quarter, other non-interest income increased $2.1 million compared to the same quarter of last year due to income from loan pay-off activity. The growth of these three categories of non-interest income more than compensated for the decline in service fee income from the prior year quarter.

Non-interest expense increased 43% or $20.4 million compared to the prior year quarter. The current quarter's results contained prepayment penalties of $9.1 million from the early redemption of $279.0 million of FHLB advances with an average rate of 2.63%. Excluding the impact of the prepayment penalties and merger and acquisition expense, non-interest expense grew 27% year-over-year primarily as a result of the compensation and operational costs relating to the 2020 Revere and RPJ acquisitions, in addition to an increase in FDIC insurance and the amortization of intangible assets.

The effective tax rate for the current quarter was significantly higher compared to the prior year quarter. The first quarter of 2020 included the impact of a tax provision contained in the Coronavirus Aid, Relief, and Economic Security Act that expanded the time permitted to utilize previous net operating losses. The Company applied this change in conjunction with 2018 acquisition of WashingtonFirst Bankshares, Inc. to realize a tax benefit of $1.8 million in the prior year quarter.

The non-GAAP efficiency ratio was 42.65% for the current quarter as compared to 54.76% for the first quarter of 2020, and 45.09% for the fourth quarter of 2020. The decrease in the efficiency ratio (reflecting an increase in efficiency) from the first quarter of last year to the current year quarter was the result of the $50.9million growth in non-GAAP revenue outpacing the $11.6 million 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 goodwill and other 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 investment securities gains and includes tax-equivalent income. -- Core earnings and the related measures of core earnings per share, core return on average assets and core return on average tangible common equity reflect net income exclusive of the provision/(credit) for credit losses, provision/(credit) for credit losses on unfunded loan commitments, merger and acquisition expense, amortization of intangible assets, loss on FHLB redemption, and investment securities gains, 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 first 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 May 6, 2021. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10153566.

About Sandy Spring Bancorp, Inc.

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

For additional information or questions, please contact: Daniel J. Schrider, President & Chief Executive Officer, or Philip J. Mantua, E.V.P. & Chief Financial Officer Sandy Spring Bancorp 17801 Georgia Avenue Olney, Maryland 20832 1-800-399-5919 Email: DSchrider@sandyspringbank.com PMantua@sandyspringbank.com Website: www.sandyspringbank.com

Media Contact: Jen Schell 301-570-8331 jschell@sandyspringbank.com

Forward-Looking Statements

Sandy Spring 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 December31, 2020, 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 % March 31,(Dollars in thousands, except 2021 2020 Changeper share data)Results of operations: Net interest income $ 104,600 $ 64,334 63 %Provision/ (credit) for credit (34,708 ) 24,469 n/m lossesNon-interest income 28,866 18,168 59 Non-interest expense 68,173 47,746 43 Income before income tax expense 100,001 10,287 872 Net income 75,464 9,987 656 Net income attributable to $ 74,824 $ 9,919 654 common shareholdersPre-tax pre-provision pre-merger $ 65,338 $ 36,210 80 income^ (1) Return on average assets 2.39 % 0.46 % Return on average common equity 20.72 % 3.55 % Return on average tangible 28.47 % 5.34 % common equityNet interest margin 3.56 % 3.29 % Efficiency ratio - GAAP basis^ 51.08 % 57.87 % (2)Efficiency ratio - Non-GAAP 42.65 % 54.76 % basis^ (2) Per share data: Basic net income per common $ 1.59 $ 0.29 448 %shareDiluted net income per common $ 1.58 $ 0.28 464 shareWeighted average diluted common 47,415,060 34,743,623 36 sharesDividends declared per share $ 0.32 $ 0.30 7 Book value per common share $ 32.04 $ 32.68 (2 )Tangible book value per common $ 23.54 $ 21.27 11 share^ (1)Outstanding common shares 47,187,389 34,164,672 38 Financial condition at period-end:Investment securities $ 1,472,727 $ 1,250,560 18 %Loans 10,446,866 6,722,992 55 Interest-earning assets 12,132,405 8,222,589 48 Assets 12,873,366 8,929,602 44 Deposits 10,677,752 6,593,874 62 Interest-bearing liabilities 7,423,262 5,732,349 29 Stockholders' equity 1,511,694 1,116,334 35 Capital ratios: Tier 1 leverage^ (3) 9.14 % 8.78 % Common equity tier 1 capital to 12.09 % 10.23 % risk-weighted assets^ (3)Tier 1 capital to risk-weighted 12.09 % 10.23 % assets^ (3)Total regulatory capital to 15.49 % 14.09 % risk-weighted assets^ (3)Tangible common equity to 8.90 % 8.51 % tangible assets^ (4)Average equity to average assets 11.54 % 12.99 % Credit quality ratios: Allowance for credit losses to 1.25 % 1.28 % loansNon-performing loans to total 0.94 % 0.80 % loansNon-performing assets to total 0.78 % 0.62 % assetsAllowance for credit losses to 132.08 % 159.02 % non-performing loansAnnualized net charge-offs to 0.01 % 0.03 % average loans^ (5)

n/m - not meaningful (1) Represents a non-GAAP measure. The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP (2) basis excludes intangible asset amortization, loss on FHLB redemption, and merger and acquisition expense from non-interest expense; securities gains from non-interest income and adds the tax- equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights. (3) Estimated ratio at March31, 2021. The tangible common equity to tangible assets ratio is a non-GAAP (4) ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets. See the Reconciliation Table included with these Financial Highlights. (5) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

Sandy Spring Bancorp, Inc. and SubsidiariesRECONCILIATION TABLE - UNAUDITED

Three Months Ended March 31,(Dollars in thousands) 2021 2020Pre-tax pre-provision pre-merger income: Net income $ 75,464 $ 9,987 Plus/ (less) non-GAAP adjustments: Merger and acquisition expense 45 1,454 Income tax expense 24,537 300 Provision/ (credit) for credit losses (34,708 ) 24,469 Pre-tax pre-provision pre-merger income $ 65,338 $ 36,210 Efficiency ratio (GAAP): Non-interest expense $ 68,173 $ 47,746 Net interest income plus non-interest income $ 133,466 $ 82,502 Efficiency ratio (GAAP) 51.08 % 57.87 % Efficiency ratio (Non-GAAP): Non-interest expense $ 68,173 $ 47,746 Less non-GAAP adjustments: Amortization of intangible assets 1,697 600 Loss on FHLB redemption 9,117 ? Merger and acquisition expense 45 1,454 Non-interest expense - as adjusted $ 57,314 $ 45,692 Net interest income plus non-interest income $ 133,466 $ 82,502 Plus non-GAAP adjustment: Tax-equivalent income 980 1,108 Less non-GAAP adjustment: Investment securities gains 58 169 Net interest income plus non-interest income - $ 134,388 $ 83,441 as adjusted Efficiency ratio (Non-GAAP) 42.65 % 54.76 % Tangible common equity ratio: Total stockholders' equity $ 1,511,694 $ 1,116,334 Goodwill (370,223 ) (369,708 )Other intangible assets, net (30,824 ) (19,781 )Tangible common equity $ 1,110,647 $ 726,845 Total assets $ 12,873,366 $ 8,929,602 Goodwill (370,223 ) (369,708 )Other intangible assets, net (30,824 ) (19,781 )Tangible assets $ 12,472,319 $ 8,540,113 Tangible common equity ratio 8.90 % 8.51 % Outstanding common shares 47,187,389 34,164,672 Tangible book value per common share $ 23.54 $ 21.27

Sandy Spring Bancorp, Inc. and Subsidiaries RECONCILIATION TABLE - UNAUDITED (CONTINUED)OPERATING EARNINGS - METRICS

Three Months Ended March 31,(Dollars in thousands) 2021 2020Core earnings (non-GAAP): Net income $ 75,464 $ 9,987 Plus/ (less) non-GAAP adjustments (net of tax):Provision/ (credit) for credit losses (25,857 ) 18,242 Provision/ (credit) for credit losses on (705 ) ? unfunded loan commitmentsMerger and acquisition expense 34 1,084 Amortization of intangible assets 1,264 447 Loss on FHLB redemption 6,792 ? Investment securities gains (43 ) (126 )Core earnings (Non-GAAP) $ 56,949 $ 29,634 Core earnings per common share (non-GAAP): Weighted average common shares outstanding - 47,415,060 34,743,623 diluted (GAAP) Earnings per diluted common share (GAAP) $ 1.58 $ 0.28 Core earnings per diluted common share $ 1.20 $ 0.85 (non-GAAP) Core return on average assets (non-GAAP): Average assets (GAAP) $ 12,801,539 $ 8,699,342 Return on average assets (GAAP) 2.39 % 0.46 %Core return on average assets (non-GAAP) 1.80 % 1.37 % Core return on average tangible common equity (non-GAAP):Average total stockholders' equity (GAAP) $ 1,477,150 $ 1,130,051 Average goodwill (370,223 ) (366,044 )Average other intangible assets, net (31,896 ) (11,810 )Average tangible common equity (non-GAAP) $ 1,075,031 $ 752,197 Return on average tangible common equity 28.47 % 5.34 %(GAAP)Core return on average tangible common equity 21.48 % 15.85 %(non-GAAP)

Sandy Spring Bancorp, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED

(Dollars in thousands) March 31, December 31, March 31, 2021 2020 2020Assets Cash and due from banks $ 100,739 $ 93,651 $ 79,185 Federal funds sold 285 291 131 Interest-bearing 127,597 203,061 181,792 deposits with banksCash and cash 228,621 297,003 261,108 equivalentsResidential mortgageloans held for sale (at 84,930 78,294 67,114 fair value)Investmentsavailable-for-sale (at 1,427,880 1,348,021 1,187,607 fair value)Other equity securities 44,847 65,760 62,953 Total loans 10,446,866 10,400,509 6,722,992 Less: allowance for (130,361 ) (165,367 ) (85,800 )credit lossesNet loans 10,316,505 10,235,142 6,637,192 Premises and equipment, 55,361 57,720 57,617 netOther real estate owned 1,354 1,455 1,416 Accrued interest 44,559 46,431 23,870 receivableGoodwill 370,223 370,223 369,708 Other intangible 30,824 32,521 19,781 assets, netOther assets 268,262 265,859 241,236 Total assets $ 12,873,366 $ 12,798,429 $ 8,929,602 Liabilities Noninterest-bearing $ 3,770,852 $ 3,325,547 $ 1,939,937 depositsInterest-bearing 6,906,900 6,707,522 4,653,937 depositsTotal deposits 10,677,752 10,033,069 6,593,874 Securities sold underretail repurchase 189,318 543,157 125,305 agreements and federalfunds purchasedAdvances from FHLB 100,000 379,075 754,061 Subordinated debt 227,044 227,088 199,046 Total borrowings 516,362 1,149,320 1,078,412 Accrued interestpayable and other 167,558 146,085 140,982 liabilitiesTotal liabilities 11,361,672 11,328,474 7,813,268 Stockholders' equity Common stock -- parvalue $1.00; sharesauthorized 100,000,000;shares issuedandoutstanding47,187,389, 47,056,777 47,187 47,057 34,165 and 34,164,672 atMarch31,2021,December31,2020 and March31,2020, respectivelyAdditional paid in 849,606 846,922 562,891 capitalRetained earnings 617,553 557,271 512,934 Accumulated othercomprehensive income/ (2,652 ) 18,705 6,344 (loss)Total stockholders' 1,511,694 1,469,955 1,116,334 equityTotal liabilities and $ 12,873,366 $ 12,798,429 $ 8,929,602 stockholders' equity

Sandy Spring Bancorp, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

Three Months Ended March 31,(Dollars in thousands, except per share data) 2021 2020Interest income: Interest and fees on loans $ 107,428 $ 75,882 Interest on loans held for sale 537 291 Interest on deposits with banks 46 180 Interest and dividends on investment securities: Taxable 3,899 6,132 Tax-advantaged 2,351 1,372 Interest on federal funds sold ? 1 Total interest income 114,261 83,858 Interest Expense: Interest on deposits 4,830 13,518 Interest on retail repurchase agreements and federal 53 580 funds purchasedInterest on advances from FHLB 2,276 3,145 Interest on subordinated debt 2,502 2,281 Total interest expense 9,661 19,524 Net interest income 104,600 64,334 Provision/ (credit) for credit losses (34,708 ) 24,469 Net interest income after provision/ (credit) for 139,308 39,865 credit lossesNon-interest income: Investment securities gains 58 169 Service charges on deposit accounts 1,852 2,253 Mortgage banking activities 10,169 3,033 Wealth management income 8,730 6,966 Insurance agency commissions 2,153 2,129 Income from bank owned life insurance 680 645 Bank card fees 1,518 1,320 Other income 3,706 1,653 Total non-interest income 28,866 18,168 Non-interest expense: Salaries and employee benefits 36,652 28,053 Occupancy expense of premises 5,487 4,581 Equipment expenses 3,222 2,751 Marketing 1,212 1,189 Outside data services 2,283 1,582 FDIC insurance 1,492 482 Amortization of intangible assets 1,697 600 Merger and acquisition expense 45 1,454 Professional fees and services 1,731 1,826 Other expenses 14,352 5,228 Total non-interest expense 68,173 47,746 Income before income tax expense 100,001 10,287 Income tax expense 24,537 300 Net income $ 75,464 $ 9,987 Net income per share amounts: Basic net income per common share $ 1.59 $ 0.29 Diluted net income per common share $ 1.58 $ 0.28 Dividends declared per share $ 0.32 $ 0.30

Sandy Spring Bancorp, Inc. and SubsidiariesHISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

2021 2020(Dollars inthousands, Q1 Q4 Q3 Q2 Q1except per sharedata)Profitability for the quarter:Tax-equivalent $ 115,241 $ 112,843 $ 113,627 $ 116,252 $ 84,966 interest incomeInterest expense 9,661 11,964 15,500 13,413 19,524 Tax-equivalentnet interest 105,580 100,879 98,127 102,839 65,442 incomeTax-equivalent 980 1,052 643 1,325 1,108 adjustmentProvision/(credit) for (34,708 ) (4,489 ) 7,003 58,686 24,469 credit lossesNon-interest 28,866 32,234 29,390 22,924 18,168 incomeNon-interest 68,173 61,661 60,937 85,438 47,746 expenseIncome/ (loss)before income 100,001 74,889 58,934 (19,686 ) 10,287 tax expense/(benefit)Income taxexpense/ 24,537 18,227 14,292 (5,348 ) 300 (benefit)Net income/ $ 75,464 $ 56,662 $ 44,642 $ (14,338 ) $ 9,987 (loss)Financial performance:Pre-taxpre-provision $ 65,338 $ 70,403 $ 67,200 $ 61,454 $ 36,210 pre-mergerincomeReturn on 2.39 % 1.78 % 1.38 % (0.45 )% 0.46 %average assetsReturn onaverage common 20.72 % 15.72 % 12.67 % (4.15 )% 3.55 %equityReturn onaverage tangible 28.47 % 21.89 % 17.84 % (5.80 )% 5.34 %common equityNet interest 3.56 % 3.38 % 3.24 % 3.47 % 3.29 %marginEfficiency ratio- GAAP basis^ 51.08 % 46.69 % 48.03 % 68.66 % 57.87 %(1)Efficiency ratio- Non-GAAP basis 42.65 % 45.09 % 45.27 % 43.85 % 54.76 %^ (1)Per share data: Net income/(loss)attributable to $ 74,824 $ 56,194 $ 44,268 $ (14,458 ) $ 9,919 commonshareholdersBasic net income/ (loss) per $ 1.59 $ 1.19 $ 0.94 $ (0.31 ) $ 0.29 common shareDiluted netincome/ (loss) $ 1.58 $ 1.19 $ 0.94 $ (0.31 ) $ 0.28 per common shareWeighted averagediluted common 47,415,060 47,284,808 47,175,071 46,988,351 34,743,623 sharesDividendsdeclared per $ 0.32 $ 0.30 $ 0.30 $ 0.30 $ 0.30 shareNon-interest income:Securities gains $ 58 $ 35 $ 51 $ 212 $ 169 Service chargeson deposit 1,852 1,917 1,673 1,223 2,253 accountsMortgage banking 10,169 14,491 14,108 8,426 3,033 activitiesWealthmanagement 8,730 8,215 7,785 7,604 6,966 incomeInsurance agency 2,153 1,356 2,122 1,188 2,129 commissionsIncome from bankowned life 680 705 708 809 645 insuranceBank card fees 1,518 1,570 1,525 1,257 1,320 Other income 3,706 3,945 1,418 2,205 1,653 Totalnon-interest $ 28,866 $ 32,234 $ 29,390 $ 22,924 $ 18,168 incomeNon-interest expense:Salaries andemployee $ 36,652 $ 36,080 $ 36,041 $ 34,297 $ 28,053 benefitsOccupancyexpense of 5,487 5,236 5,575 5,991 4,581 premisesEquipment 3,222 3,121 3,133 3,219 2,751 expensesMarketing 1,212 1,058 1,305 729 1,189 Outside data 2,283 2,394 2,614 2,169 1,582 servicesFDIC insurance 1,492 1,527 1,340 1,378 482 Amortization ofintangible 1,697 1,655 1,968 1,998 600 assetsMerger andacquisition 45 3 1,263 22,454 1,454 expenseProfessionalfees and 1,731 2,473 1,800 1,840 1,826 servicesOther expenses 14,352 8,114 5,898 11,363 5,228 Totalnon-interest $ 68,173 $ 61,661 $ 60,937 $ 85,438 $ 47,746 expense

(1) The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, loss on FHLB redemption, and merger and acquisition expense from non-interest expense; investment securities gains from non-interest income; and adds the tax- equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.

Sandy Spring Bancorp, Inc. and SubsidiariesHISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED

2021 2020 (Dollars inthousands, except Q1 Q4 Q3 Q2 Q1per share data)Balance sheets at quarter end: Commercial investor $ 3,652,418 $ 3,634,720 $ 3,588,702 $ 3,581,778 $ 2,241,240 real estate loansCommercialowner-occupied real 1,644,848 1,642,216 1,652,208 1,601,803 1,305,682 estate loansCommercial AD&C 1,051,013 1,050,973 994,800 997,423 643,114 loansCommercial business 2,411,109 2,267,548 2,227,246 2,222,810 813,525 loansResidential 1,022,546 1,105,179 1,173,857 1,211,745 1,116,512 mortgage loansResidential 171,028 182,619 175,123 169,050 149,573 construction loansConsumer loans 493,904 517,254 521,999 558,434 453,346 Total loans 10,446,866 10,400,509 10,333,935 10,343,043 6,722,992 Allowance for (130,361 ) (165,367 ) (170,314 ) (163,481 ) (85,800 )credit lossesLoans held for sale 84,930 78,294 88,728 68,765 67,114 Investment 1,472,727 1,413,781 1,425,733 1,424,652 1,250,560 securitiesInterest-earning 12,132,405 12,095,936 11,965,915 12,447,146 8,222,589 assetsTotal assets 12,873,366 12,798,429 12,678,131 13,290,447 8,929,602 Noninterest-bearing 3,770,852 3,325,547 3,458,804 3,434,038 1,939,937 demand depositsTotal deposits 10,677,752 10,033,069 9,964,969 10,076,834 6,593,874 Customer repurchase 129,318 153,157 142,287 143,579 125,305 agreementsTotalinterest-bearing 7,423,262 7,856,842 7,643,381 8,313,546 5,732,349 liabilitiesTotal stockholders' 1,511,694 1,469,955 1,424,749 1,390,093 1,116,334 equityQuarterly average balance sheets: Commercial investor $ 3,634,174 $ 3,599,648 $ 3,582,751 $ 3,448,882 $ 2,202,461 real estate loansCommercialowner-occupied real 1,638,885 1,643,817 1,628,474 1,681,674 1,285,257 estate loansCommercial AD&C 1,049,597 1,017,304 977,607 969,251 659,494 loansCommercial business 2,291,097 2,189,828 2,207,388 1,899,264 819,133 loansResidential 1,066,714 1,136,989 1,189,452 1,208,566 1,139,786 mortgage loansResidential 179,925 180,494 173,280 162,978 145,266 construction loansConsumer loans 496,578 515,202 543,242 575,734 465,314 Total loans 10,356,970 10,283,282 10,302,194 9,946,349 6,716,711 Loans held for sale 82,263 68,255 54,784 53,312 35,030 Investment 1,407,455 1,418,683 1,404,238 1,398,586 1,179,084 securitiesInterest-earning 12,029,424 11,882,542 12,049,463 11,921,132 7,994,618 assetsTotal assets 12,801,539 12,645,329 12,835,893 12,903,156 8,699,342 Noninterest-bearing 3,394,110 3,424,729 3,281,607 3,007,222 1,797,227 demand depositsTotal deposits 10,343,190 9,999,144 9,862,639 9,614,176 6,433,694 Customer repurchase 148,195 146,685 142,694 144,050 135,652 agreementsTotalinterest-bearing 7,742,987 7,609,829 7,969,487 8,326,909 5,612,056 liabilitiesTotal stockholders' 1,477,150 1,433,900 1,401,746 1,390,544 1,130,051 equityFinancial measures: Average equity to 11.54 % 11.34 % 10.92 % 10.78 % 12.99%average assetsInvestmentsecurities to 12.14 % 11.69 % 11.91 % 11.45 % 15.21%earning assetsLoans to earning 86.11 % 85.98 % 86.36 % 83.10 % 81.76%assetsLoans to assets 81.15 % 81.26 % 81.51 % 77.82 % 75.29%Loans to deposits 97.84 % 103.66 % 103.70 % 102.64 % 101.96%Capital measures: Tier 1 leverage^ 9.14 % 8.92 % 8.65 % 8.35 % 8.78%(1)Common equity tier1 capital to 12.09 % 10.58 % 10.45 % 10.23 % 10.23%risk-weightedassets ^(1)Tier 1 capital torisk-weighted 12.09 % 10.58 % 10.45 % 10.23 % 10.23%assets ^(1)Total regulatorycapital to 15.49 % 13.93 % 14.02 % 13.79 % 14.09%risk-weightedassets^ (1)Book value per $ 32.04 $ 31.24 $ 30.30 $ 29.58 $ 32.68 common shareOutstanding common 47,187,389 47,056,777 47,025,779 47,001,022 34,164,672 shares

(1) Estimated ratio at March31, 2021.

Sandy Spring Bancorp, Inc. and SubsidiariesLOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

2021 2020(Dollars in March 31, December September June 30, March 31,thousands) 31, 30,Non-performing assets:Loans 90 days past due:Commercial real estate:Commercialinvestor real $ ? $ 133 $ ? $ 775 $ ? estateCommercialowner-occupied ? ? ? 515 ? real estateCommercial AD&C ? ? ? ? ? Commercial 31 161 93 ? ? businessResidential real estate:Residential 398 480 320 138 8 mortgageResidential ? ? ? ? ? constructionConsumer ? ? 1 ? ? Total loans 90 429 774 414 1,428 8 days past dueNon-accrual loans:Commercial real estate:Commercialinvestor real 42,776 45,227 26,784 26,482 17,770 estateCommercialowner-occupied 8,316 11,561 6,511 6,729 4,074 real estateCommercial AD&C 14,975 15,044 1,678 2,957 829 Commercial 13,147 22,933 17,659 20,246 10,834 businessResidential real estate:Residential 9,593 10,212 11,296 11,724 12,271 mortgageResidential ? ? ? ? ? constructionConsumer 7,193 7,384 7,493 7,800 5,596 Totalnon-accrual 96,000 112,361 71,421 75,938 51,374 loansTotalrestructured 2,271 2,317 2,854 2,553 2,575 loans -accruingTotalnon-performing 98,700 115,452 74,689 79,919 53,957 loansOther assetsand other real 1,354 1,455 1,389 1,389 1,416 estate owned(OREO)Totalnon-performing $ 100,054 $ 116,907 $ 76,078 $ 81,308 $ 55,373 assets

For the Quarter Ended,(Dollars in March 31, December September June 30, March 31,thousands) 2021 31, 30, 2020 2020 2020 2020Analysis ofnon-accrual loan activity:Balance atbeginning of $ 112,361 $ 71,421 $ 75,938 $ 51,374 $ 38,632 periodPurchased creditdeteriorated ? ? ? ? 13,084 loans designatedas non-accrualNon-accrualbalances ? (70 ) ? ? ? transferred toOREONon-accrualbalances (699 ) (513 ) (144 ) (162 ) (575 )charged-offNet payments or (16,028 ) (13,212 ) (4,248 ) (1,881 ) (1,860 )drawsLoans placed on 421 54,735 893 27,289 2,369 non-accrualNon-accrual loans (55 ) ? (1,018 ) (682 ) (276 )brought currentBalance at end of $ 96,000 $ 112,361 $ 71,421 $ 75,938 $ 51,374 period Analysis ofallowance for credit losses:Balance atbeginning of $ 165,367 $ 170,314 $ 163,481 $ 85,800 $ 56,132 periodTransition impactof adopting ASC ? ? ? ? 2,983 326Initial allowanceon purchasedcredit ? ? ? ? 2,762 deterioratedloansInitial allowanceon acquired PCD ? ? ? 18,628 ? loansProvision/(credit) for (34,708 ) (4,489 ) 7,003 58,686 24,469 credit lossesLess loanscharged-off, net of recoveries:Commercial real estate:Commercialinvestor real (27 ) 379 21 (4 ) ? estateCommercialowner-occupied ? ? ? ? ? real estateCommercial AD&C ? ? ? ? ? Commercial 634 56 88 (463 ) 108 businessResidential real estate:Residential (270 ) 37 (6 ) 15 333 mortgageResidential ? (1 ) (2 ) (1 ) (2 )constructionConsumer (39 ) (13 ) 69 86 107 Net charge-offs/ 298 458 170 (367 ) 546 (recoveries)Balance at the $ 130,361 $ 165,367 $ 170,314 $ 163,481 $ 85,800 end of period Asset quality ratios:Non-performingloans to total 0.94 % 1.11 % 0.72 % 0.77 % 0.80 %loansNon-performingassets to total 0.78 % 0.91 % 0.60 % 0.61 % 0.62 %assetsAllowance forcredit losses to 1.25 % 1.59 % 1.65 % 1.58 % 1.28 %loansAllowance forcredit losses to 132.08 % 143.23 % 228.03 % 204.56 % 159.02 %non-performingloansAnnualized netcharge-offs/ 0.01 % 0.02 % 0.01 % (0.01 ) 0.03 %(recoveries) to %average loans

Sandy Spring Bancorp, Inc. and SubsidiariesCONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

Three Months Ended March 31, 2021 2020(Dollars in Average Annualized Average Interest^ Annualizedthousands and Balances Interest^ Average Balances (1) Averagetax-equivalent) (1) Yield/Rate Yield/RateAssets Commercial investor $ 3,634,174 $ 38,354 4.28 % $ 2,202,461 $ 25,265 4.61 %real estate loansCommercialowner-occupied real 1,638,885 18,680 4.62 1,285,257 15,206 4.76 estate loansCommercial AD&C 1,049,597 10,396 4.02 659,494 8,329 5.08 loansCommercial business 2,291,097 24,794 4.39 819,133 10,177 5.00 loansTotal commercial 8,613,753 92,224 4.34 4,966,345 58,977 4.78 loansResidential 1,066,714 9,544 3.58 1,139,786 10,741 3.77 mortgage loansResidential 179,925 1,606 3.62 145,266 1,561 4.32 construction loansConsumer loans 496,578 4,545 3.71 465,314 5,156 4.46 Total residential 1,743,217 15,695 3.62 1,750,366 17,458 4.01 and consumer loansTotal loans^ (2) 10,356,970 107,919 4.22 6,716,711 76,435 4.57 Loans held for sale 82,263 537 2.61 35,030 291 3.32 Taxable securities 915,625 3,899 1.70 972,609 6,322 2.60 Tax-advantaged 491,830 2,840 2.31 206,475 1,737 3.37 securitiesTotal investment 1,407,455 6,739 1.92 1,179,084 8,059 2.73 securities^ (3)Interest-bearing 182,095 46 0.10 63,533 180 1.14 deposits with banksFederal funds sold 641 ? 0.09 260 1 1.23 Totalinterest-earning 12,029,424 115,241 3.88 7,994,618 84,966 4.27 assets Less: allowance for (163,229 ) (61,962 ) credit lossesCash and due from 106,259 69,618 banksPremises and 56,369 58,346 equipment, netOther assets 772,716 638,722 Total assets $ 12,801,539 $ 8,699,342 Liabilities andStockholders' EquityInterest-bearing $ 1,365,652 $ 236 0.07 % $ 840,415 $ 697 0.33 %demand depositsRegular savings 444,296 56 0.05 331,119 73 0.09 depositsMoney market 3,410,589 1,463 0.17 1,848,290 4,650 1.01 savings depositsTime deposits 1,728,543 3,075 0.72 1,616,643 8,098 2.01 Totalinterest-bearing 6,949,080 4,830 0.28 4,636,467 13,518 1.17 depositsOther borrowings 189,851 53 0.11 236,806 580 0.99 Advances from FHLB 376,984 2,276 2.45 531,989 3,145 2.38 Subordinated debt 227,072 2,502 4.41 206,794 2,281 4.41 Total borrowings 793,907 4,831 2.47 975,589 6,006 2.48 Totalinterest-bearing 7,742,987 9,661 0.50 5,612,056 19,524 1.40 liabilities Noninterest-bearing 3,394,110 1,797,227 demand depositsOther liabilities 187,292 160,008 Stockholders' 1,477,150 1,130,051 equityTotal liabilitiesand stockholders' $ 12,801,539 $ 8,699,342 equity Tax-equivalent netinterest income and $ 105,580 3.38 % $ 65,442 2.87 %spreadLess:tax-equivalent 980 1,108 adjustmentNet interest income $ 104,600 $ 64,334 Interest income/ 3.88 % 4.27 %earning assetsInterest expense/ 0.32 0.98 earning assetsNet interest margin 3.56 % 3.29 %

Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.50% and 25.45% for 2021 and 2020, (1) respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.0million and $1.1million in 2021 and 2020, respectively. (2) Non-accrual loans are included in the average balances. (3) Available for sale investments are presented at amortized cost.