Year-Over-Year Operating Earnings Increase 49%

OLNEY, Md., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported record net income of $44.6 million ($0.94 per diluted common share) for the third quarter of 2020. The current quarter’s result compares to net income of $29.4 million ($0.82 per diluted common share) for the third quarter of 2019 and a loss of $14.3 million ($0.31 per diluted common share) for the second quarter of 2020.

Operating earnings for the current quarter, which excludes the impact of merger and acquisition expense, the provision for credit losses and the effects from the Paycheck Protection Program (“PPP” or “PPP program”), each on an after-tax basis, were $45.9 million ($0.97 per diluted common share), compared to $30.8 million ($0.86 per diluted common share) for the quarter ended September 30, 2019 and $42.0 million ($0.88 per diluted common share) for the quarter ended June 30, 2020.

The current quarter’s results included $1.3 million for merger and acquisition expense related to the second quarter acquisition of Revere Bank (“Revere”) as compared to $22.5 million for the linked quarter.   The provision for credit losses for the current quarter was $7.0 million as compared to $58.7 million for the second quarter of 2020. The decrease in the provision for credit losses compared to the prior quarter is a result of the stability of the economic forecast compared to the prior quarter and resiliency of the loan portfolio’s credit quality.

“The record net income and earnings per share that we delivered clearly reflect the value of our Revere Bank acquisition, though we have yet to realize the full potential of the transaction,” said Daniel J. Schrider, President and Chief Executive Officer. “Our team seamlessly completed the systems integration of Revere Bank in the third quarter, notwithstanding the challenging work environment necessitated by the COVID-19 pandemic. As a result, the former Revere clients now have access to all Sandy Spring Bank services and locations. We remain focused on strengthening our client relationships and working closely with borrowers to see them through these extraordinary times.”

Third Quarter Highlights:

• Total assets at September 30, 2020, grew 50% to $12.7 billion compared to September 30, 2019 primarily as a result of the Revere acquisition and participation in the PPP. Loans and deposits grew by 57% and 53%, respectively.   On the date of acquisition, Revere’s loans and deposits were $2.5 billion and $2.3 billion, respectively. The Company originated $1.1 billion in commercial business loans through the PPP.
  
  
• The net interest margin was 3.24% for the third quarter of 2020, compared to 3.51% for the same quarter of 2019, and 3.47% for the second quarter of 2020. Excluding the impact of the amortization of the fair value marks derived from acquisitions, the current quarter’s net interest margin would have been 3.18%, compared to 3.47% for third quarter of 2019, and 3.19% for the second quarter of 2020.
  
  
• The provision for credit losses was $7.0 million for the current quarter. The lower provision for the current quarter as compared to the prior quarter’s provision of $58.7 million was the result of the stabilization in economic projections compared to the prior quarter and resiliency of the loan portfolio’s credit quality.
  
  
• Non-interest income increased from the prior year quarter by 58% to $29.4 million, as a result of a 220% increase in income from mortgage banking activities and growth of 42% in wealth management income as a result of the acquisition of Rembert Pendleton Jackson (“RPJ”) in the first quarter of the year.
  
  
• Non-interest expense for the third quarter of 2020 increased $16.0 million or 36% compared to the prior year quarter. This increase was driven by the impact of the acquisition of Revere and RPJ, which increased compensation costs, facilities and operational costs and merger and acquisition expenses.
  
  
• Return on average assets (“ROA”) for the quarter ended September 30, 2020 was 1.38% and return on average on tangible common equity (“ROTCE”) was 18.16%. This compares to 1.39% and 15.13% for ROA and ROTCE, respectively, for the prior year. The non-GAAP efficiency ratio for the third quarter of 2020 was 45.27% compared to 50.95% for the third quarter of 2019.
  

Response to COVID-19

The Company continues to focus on protecting the health and well-being of its employees and clients and assisting clients who have been impacted by the COVID-19 pandemic. A substantial majority of non-branch employees continue to work remotely and clients are served at branches primarily through drive-thru facilities and limited lobby access. Area jurisdictions continue to monitor and modify their respective pandemic guidelines on a periodic basis. Currently, the Company is maintaining its first phase of its return to work plan.

The Company’s participation in the Small Business Administration’s PPP has resulted in the approval of over 5,400 loans for a total of $1.1 billion in loans to businesses to assist them in maintaining their payroll of an estimated 112,000 employees and cover applicable overhead.   The Company is developing a digital PPP forgiveness application that will be submitted to the SBA. The Company anticipates launching the forgiveness application in its PPP client portal in the coming weeks.

The Company has provided for deferment of certain loan payments up to 90 days to provide relief to our qualified commercial, mortgage and consumer loan customers.   From March through October 12, 2020, the Company granted payment modifications/deferrals on over 2,500 loans with an aggregate balance of $2.0 billion, of which 481 loans with an aggregate balance of $502 million remain in deferral status.

For additional information about the Company’s response to the COVID-19 pandemic, segments of the Company’s loan portfolio exposed to industries adversely impacted by the pandemic, and our response to clients who sought loan payment deferral, we have provided supplemental materials available at the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com.

Balance Sheet and Credit Quality

Total assets grew to $12.7 billion at September 30, 2020, as compared to $8.4 billion at September 30, 2019, primarily as a result of the acquisition of Revere during the second quarter of the current year. In addition, the Company’s participation in the PPP program had a further positive impact on the year-over-year asset growth. During this period, total loans grew by 57% to $10.3 billion at September 30, 2020, compared to $6.6 billion at September 30, 2019. Excluding PPP loans, total loans grew 41% to $9.3 billion at September 30, 2020 as compared to the prior year quarter. Commercial loans, excluding PPP loans, grew 55% or $2.6 billion while the remainder of the loan portfolio grew 2%. The majority of the commercial loan growth was driven by the acquisition of Revere. Consumer loans grew 9% due to the Revere acquisition. Deposit growth was 53% from September 30, 2019 through September 30, 2020, as noninterest-bearing deposits experienced growth of 66% and interest-bearing deposits grew 47%. This growth was driven primarily by the Revere acquisition.   During the current quarter, excess liquidity was used to reduce borrowings under the Paycheck Protection Program Liquidity Facility (“PPPLF”) program by approximately $580 million.

At September 30, 2020, tangible common equity increased to $1.0 billion or 8.17% of tangible assets compared to $787.3 million or 9.74% at September 30, 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 during the past twelve months. At September 30, 2020, the Company had a total risk-based capital ratio of 14.02%, a common equity tier 1 risk-based capital ratio of 10.45%, a tier 1 risk-based capital ratio of 10.45% and a tier 1 leverage ratio of 8.65%.

The level of non-performing loans to total loans increased to 0.72% at September 30, 2020, compared to 0.61% at September 30, 2019, and decreased from 0.77% at June 30, 2020. At September 30, 2020, non-performing loans totaled $74.7 million, compared to $40.1 million at September 30, 2019, and $79.9 million at June 30, 2020. Non-performing loans include accruing loans 90 days or more past due and restructured loans. The year-over-year growth in non-performing loans was driven by three major components: loans placed in non-accrual status, acquired Revere non-accrual loans, and loans previously accounted for as purchased credit impaired loans that have been designated as non-accrual loans as a result of the Company’s adoption of the accounting standard for expected credit losses at the beginning of the year. Loans placed on non-accrual during the current quarter amounted to $0.9 million compared to $6.0 million for the prior year quarter and $27.3 million for the second quarter of 2020, which included $11.3 million in Revere non-accrual loans as of the acquisition date.

The Company recorded net charge-offs of $0.2 million for the third quarter of 2020, as compared to net charge-offs of $0.6 million and net recoveries of $0.4 million for the third quarter of 2019 and the second quarter of 2020, respectively.

At September 30, 2020, the allowance for credit losses was $170.3 million or 1.65% of outstanding loans and 228% of non-performing loans, compared to $163.5 million or 1.58% of outstanding loans and 205% of non-performing loans at June 30, 2020. The modest increase in the allowance from the linked quarter resulted from the combination of the impact of the updated projected future economic metrics and qualitative assessment of the loan portfolio.

Income Statement Review

Quarterly Results

Net interest income for the third quarter of 2020 increased 46% compared to the third quarter of 2019, driven primarily by the acquisition of Revere. The PPP program and its associated funding contributed a net of $6.6 million to net interest income for the quarter. The net interest margin declined to 3.24% for the third quarter of 2020, compared to 3.51% for the third quarter of 2019. Excluding the net $1.9 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin would have been 3.18%.

The provision for credit losses was $7.0 million for the third quarter of 2020, compared to $1.5 million for the third quarter of 2019 and $58.7 million for the second quarter of 2020. The decrease in the current quarter’s provision for credit losses, compared to the prior quarter, is a result of the stability of economic forecast compared to the prior quarter and resiliency of the loan portfolio’s credit quality. The provision for credit losses during the second quarter was primarily the result of deterioration in forecasted economic conditions ($33.8 million) and the initial allowance required on Revere non-purchased credit deteriorated loans ($17.5 million).

Non-interest income increased $10.8 million or 58% during the current quarter compared the same quarter of the prior year. During this period, income from mortgage banking activities increased $9.7 million as a result of a high level of refinancing activity and wealth management income increased $2.3 million as a result of the first quarter acquisition of RPJ. This growth more than compensated for the $1.4 million of the combined declines in service fee and other non-interest income as compared to the prior year quarter.

Non-interest expense grew 36% or $16.0 million from the prior year quarter. Excluding the impact of merger and acquisition expense, non-interest expense grew 34% year-over-year, primarily as a result of the operational cost of the Revere and RPJ acquisitions, increased compensation expense related to staffing increases, incentive compensation and annual merit increases, in addition to an increase in FDIC insurance and the amortization of intangible assets.

The non-GAAP efficiency ratio was 45.27% for the current quarter as compared to 50.95% for the third quarter of 2019 and 43.85% for the second quarter of 2020. The decrease in the efficiency ratio (reflecting an increase in efficiency) from the third quarter of last year to the current year was the result of the $41.0 million growth in non-GAAP revenue outpacing the $13.6 million growth in non-GAAP non-interest expense.

Year to Date Results

Net interest income for the nine months ended September 30, 2020 increased 32% or $63.6 million compared to the same period of 2019. This increase was driven primarily by the acquisition of Revere in the second quarter of the current year. Additionally, the income generated by the PPP program, net of its associated funding, contributed a net of $12.1 million to the growth in net interest income year-over-year.   The net interest margin declined to 3.33% for the nine months ended September 30, 2020, compared to 3.55% for the same period of the prior year. Excluding the net $10.5 million impact of the amortization of the fair value marks derived from acquisitions, the net interest margin would have been 3.21%. Included in the current period net interest income is a benefit realized from the accelerated amortization of the $5.8 million purchase premium on acquired FHLB advances as a result of the prepayment of those borrowings.

The provision for credit losses for the nine months ended September 30, 2020 amounted to $90.2 million as compared to $3.0 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 ($59.3 million) and the initial allowance on acquired Revere non-purchased credit deteriorated loans ($17.5 million). The change in the portfolio mix and various qualitative adjustments resulted in the remainder of provision growth for the period.

Non-interest income rose to $70.5 million or 35% above prior year levels. Income from mortgage banking activities increased $15.0 million as a result of the high levels of refinancing activity, and wealth management income increased $6.1 million as a result of the first quarter acquisition of RPJ. These increases more than offset declines in deposit service fees, the reduction in BOLI income, due to the absence of mortality income that occurred in 2019, and lower other non-interest income.  

Non-interest expense increased 46% or $61.1 million for the first nine months of 2020, compared to the first nine months of 2019. Merger and acquisition expense accounted for $24.8 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 23%. This growth rate was driven by operational and compensation cost associated with the Revere and RPJ acquisitions, increased incentive expense related to the significant level of mortgage loan originations, intangible amortization and annual employee merit increases.  

The effective tax rate for the nine months ended September 30, 2020 was 18.7%, compared to 24.0% 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-to-date was 47.10% compared to 51.36% for the prior year period. The improvement in the current year’s efficiency ratio compared to the prior year was the result of the growth in non-GAAP revenue, which outpaced the growth in non-GAAP non-interest expense.

Explanation of Non-GAAP Financial Measures

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

• Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets.
• The non-GAAP efficiency ratio is non-GAAP in that it excludes amortization of intangible assets, loss on FHLB redemption, merger and acquisition expense and securities gains and includes tax-equivalent income.
• Operating earnings - and the related measures of operating earnings per share, operating return on average assets and operating return on average tangible common equity - reflect net income exclusive of the provision for credit losses, merger and acquisition expense and the income and expense associated with the PPP program, in each case net of tax.
  

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

Conference Call

The Company’s management will host a conference call to discuss its third 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) November 5, 2020. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10148248.

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 65 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Northern Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services.

For additional information or questions, please contact:
Daniel J. Schrider, President & Chief Executive Officer, or Philip J. Mantua, E.V.P. & Chief Financial Officer Sandy Spring Bancorp 17801 Georgia Avenue Olney, Maryland 20832 1-800-399-5919
Email:	DSchrider@sandyspringbank.com PMantua@sandyspringbank.com
Website: www.sandyspringbank.com Media Contact: Jen Schell 301-570-8331 jschell@sandyspringbank.com

Forward-Looking Statements

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: risks, uncertainties and other factors relating to the COVID-19 pandemic, including the length of time that the pandemic continues, the imposition or re-imposition of stay-at-home orders and restrictions on business activities or travel; the effect of the pandemic on the general economy and on the businesses of our borrowers and their ability to make payments on their obligations; the remedial actions and stimulus measures adopted by federal, state and local governments; the inability of employees to work due to illness, quarantine, or government mandates; general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of the Company’s loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; the Company’s ability to retain key members of management; changes in legislation, regulations, and policies; the possibility that any of the anticipated benefits of acquisitions will not be realized or will not be realized within the expected time period; and a variety of other matters which, by their nature, are subject to significant uncertainties. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2019, including in the Risk Factors section of that report, and in its other SEC reports. Sandy Spring Bancorp’s forward-looking statements may also be subject to other risks and uncertainties, including those that it may discuss elsewhere in this news release or in its filings with the SEC, accessible on the SEC’s Web site at www.sec.gov.

Sandy Spring Bancorp, Inc. and Subsidiaries
FINANCIAL HIGHLIGHTS - UNAUDITED
		Three Months Ended									Nine Months Ended
		September 30,						%			September 30,						%
(Dollars in thousands, except per share data)		2020			2019			Change			2020			2019			Change
Results of Operations:
Net interest income		$	97,484		$	66,790		46	%		$	263,332		$	199,725		32	%
Provision for credit losses			7,003			1,524		n.m				90,158			3,029		n.m
Non-interest income			29,390			18,573		58				70,482			52,098		35
Non-interest expense			60,937			44,925		36				194,121			133,004		46
Income before income taxes			58,934			38,914		51				49,535			115,790		(57	)
Net income			44,642			29,383		52				40,291			87,976		(54	)
Net income attributable to common shareholders		$	44,268		$	29,196		52			$	39,974		$	87,407		(54	)
Pre-tax pre-provision pre-merger income (1)		$	67,200		$	40,802		65			$	164,864		$	119,183		38
Return on average assets			1.38	%		1.39	%					0.47	%		1.42	%
Return on average common equity			12.67	%		10.38	%					4.12	%		10.71	%
Return on average tangible common equity			18.16	%		15.13	%					5.93	%		15.66	%
Net interest margin			3.24	%		3.51	%					3.33	%		3.55	%
Efficiency ratio - GAAP basis (2)			48.03	%		52.63	%					58.15	%		52.82	%
Efficiency ratio - Non-GAAP basis (2)			45.27	%		50.95	%					47.10	%		51.36	%
Per share data:
Basic net income per common share		$	0.94		$	0.82		15	%		$	0.93		$	2.46		(62	)%
Diluted net income per common share		$	0.94		$	0.82		15			$	0.93		$	2.45		(62	)
Weighted average diluted common shares			47,175,071			35,671,721		32				43,070,672			35,642,556		21
Dividends declared per share		$	0.30		$	0.30		-			$	0.90		$	0.88		2
Book value per common share			30.30			32.00		(5	)			30.30			32.00		(5	)
Tangible book value per common share (1)			21.32			22.10		(4	)			21.32			22.10		(4	)
Outstanding common shares			47,025,779			35,625,822		32				47,025,779			35,625,822		32
Financial Condition at period-end:
Investment securities		$	1,425,733		$	946,210		51	%		$	1,425,733		$	946,210		51	%
Loans			10,333,935			6,596,548		57				10,333,935			6,596,548		57
Interest-earning assets			11,965,915			7,742,138		55				11,965,915			7,742,138		55
Assets			12,678,131			8,437,538		50				12,678,131			8,437,538		50
Deposits			9,964,969			6,493,899		53				9,964,969			6,493,899		53
Interest-bearing liabilities			7,643,381			5,093,265		50				7,643,381			5,093,265		50
Stockholders' equity			1,424,749			1,140,041		25				1,424,749			1,140,041		25
Capital ratios:
Tier 1 leverage (3)			8.65	%		9.96	%					8.65	%		9.96	%
Common equity tier 1 capital to risk-weighted assets (3)			10.45	%		11.37	%					10.45	%		11.37	%
Tier 1 capital to risk-weighted assets (3)			10.45	%		11.52	%					10.45	%		11.52	%
Total regulatory capital to risk-weighted assets (3)			14.02	%		12.70	%					14.02	%		12.70	%
Tangible common equity to tangible assets (4)			8.17	%		9.74	%					8.17	%		9.74	%
Average equity to average assets			10.92	%		13.42	%					11.39	%		13.22	%
Credit quality ratios:
Allowance for credit losses to loans			1.65	%		0.83	%					1.65	%		0.83	%
Non-performing loans to total loans			0.72	%		0.61	%					0.72	%		0.61	%
Non-performing assets to total assets			0.60	%		0.49	%					0.60	%		0.49	%
Allowance for credit losses to non-performing loans			228.03	%		137.05	%					228.03	%		137.05	%
Annualized net charge-offs to average loans (5)			0.01	%		0.03	%					0.01	%		0.03	%
(1) Represents a Non-GAAP measure.
(2) The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, 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 September 30, 2020
(4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets and other comprehensive gains (losses). See the Reconciliation Table included with these Financial Highlights.
(5) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(Dollars in thousands)			2020				2019				2020				2019
Pre-tax pre-provision pre-merger income:
Net income		$	44,642			$	29,383			$	40,291			$	87,976
Plus non-GAAP adjustments:
Merger and acquisition expense			1,263				364				25,171				364
Income taxes			14,292				9,531				9,244				27,814
Provision for credit losses			7,003				1,524				90,158				3,029
Pre-tax pre-provision pre-merger income		$	67,200			$	40,802			$	164,864			$	119,183
Efficiency ratio - GAAP basis:
Non-interest expense		$	60,937			$	44,925			$	194,121			$	133,004
Net interest income plus non-interest income		$	126,874			$	85,363			$	333,814			$	251,823
Efficiency ratio - GAAP basis			48.03	%			52.63	%			58.15	%			52.82	%
Efficiency ratio - Non-GAAP basis:
Non-interest expense		$	60,937			$	44,925			$	194,121			$	133,004
Less non-GAAP adjustments:
Amortization of intangible assets			1,968				491				4,566				1,465
Loss on FHLB Redemption			-				-				5,928				-
Merger and acquisition expense			1,263				364				25,171				364
Non-interest expense - as adjusted		$	57,706			$	44,070			$	158,456			$	131,175
Net interest income plus non-interest income		$	126,874			$	85,363			$	333,814			$	251,823
Plus non-GAAP adjustment:
Tax-equivalent income			643				1,147				3,076				3,597
Less non-GAAP adjustment:
Securities gains			51				15				432				20
Net interest income plus non-interest income - as adjusted		$	127,466			$	86,495			$	336,458			$	255,400
Efficiency ratio - Non-GAAP basis			45.27	%			50.95	%			47.10	%			51.36	%
Tangible common equity ratio:
Total stockholders' equity		$	1,424,749			$	1,140,041			$	1,424,749			$	1,140,041
Accumulated other comprehensive (income)/ loss			(17,493	)			2,708				(17,493	)			2,708
Goodwill			(370,549	)			(347,149	)			(370,549	)			(347,149	)
Other intangible assets, net			(34,175	)			(8,322	)			(34,175	)			(8,322	)
Tangible common equity		$	1,002,532			$	787,278			$	1,002,532			$	787,278
Total assets		$	12,678,131			$	8,437,538			$	12,678,131			$	8,437,538
Goodwill			(370,549	)			(347,149	)			(370,549	)			(347,149	)
Other intangible assets, net			(34,175	)			(8,322	)			(34,175	)			(8,322	)
Tangible assets		$	12,273,407			$	8,082,067			$	12,273,407			$	8,082,067
Tangible common equity ratio			8.17	%			9.74	%			8.17	%			9.74	%
Outstanding common shares			47,025,779				35,625,822				47,025,779				35,625,822
Tangible book value per common share		$	21.32			$	22.10			$	21.32			$	22.10

Sandy Spring Bancorp, Inc. and Subsidiaries
RECONCILIATION TABLE - UNAUDITED (CONTINUED)
OPERATING EARNINGS - METRICS
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(Dollars in thousands)			2020				2019				2020				2019
Operating earnings (non-GAAP):
Net income		$	44,642			$	29,383			$	40,291			$	87,976
Plus non-GAAP adjustments:
Provision for credit losses - net of tax			5,140				1,133				67,132				2,255
Merger and acquisition expense - net of tax			919				271				18,742				271
PPPLF funding expense - net of tax			339				-				707				-
Less non-GAAP adjustment:
PPP interest income and net deferred fee - net of tax			5,226				-				9,709				-
Operating earnings (non-GAAP)		$	45,814			$	30,787			$	117,163			$	90,503
Operating earnings per common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)			47,175,071				35,671,721				43,070,672				35,642,556
Earnings per diluted common share (GAAP)		$	0.94			$	0.82			$	0.93			$	2.45
Operating earnings per diluted common share (non-GAAP)		$	0.97			$	0.86			$	2.72			$	2.54
Operating return on average assets (non-GAAP):
Average assets (GAAP)		$	12,835,893			$	8,370,789			$	11,483,477			$	8,307,929
Average PPP loans			1,058,792				-				592,500				-
Adjusted average assets (non-GAAP)		$	11,777,101			$	8,370,789			$	10,890,977			$	8,307,929
Return on average assets (GAAP)			1.38	%			1.39	%			0.47	%			1.42	%
Operating return on adjusted average assets (non-GAAP)			1.55	%			1.46	%			1.44	%			1.46	%
Operating return on average tangible common equity (non-GAAP)
Average total stockholders' equity (GAAP)		$	1,401,746			$	1,123,185			$	1,307,791			$	1,098,700
Average accumulated other comprehensive income/ (loss)			17,726				(2,837	)			9,623				(8,438	)
Average goodwill			370,548				347,149				363,906				347,149
Average other intangible assets, net			35,470				8,629				26,572				9,118
Average tangible common equity (non-GAAP)		$	978,002			$	770,244			$	907,690			$	750,871
Return on average tangible common equity (GAAP)			18.16	%			15.13	%			5.93	%			15.66	%
Operating return on average tangible common equity (non-GAAP)			18.64	%			15.86	%			17.24	%			16.11	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
		September 30,				December 31,				September 30,
(Dollars in thousands)			2020				2019				2019
Assets
Cash and due from banks		$	107,364			$	82,469			$	89,377
Federal funds sold			390				208				253
Interest-bearing deposits with banks			117,129				63,426				120,306
Cash and cash equivalents			224,883				146,103				209,936
Residential mortgage loans held for sale (at fair value)			88,728				53,701				78,821
Investments available-for-sale (at fair value)			1,357,205				1,073,333				894,272
Other equity securities			68,528				51,803				51,938
Total loans			10,333,935				6,705,232				6,596,548
Less: allowance for credit losses			(170,314	)			(56,132	)			(54,992	)
Net loans			10,163,621				6,649,100				6,541,556
Premises and equipment, net			58,738				58,615				59,487
Other real estate owned			1,389				1,482				1,482
Accrued interest receivable			48,176				23,282				23,438
Goodwill			370,549				347,149				347,149
Other intangible assets, net			34,175				7,841				8,322
Other assets			262,139				216,593				221,137
Total assets		$	12,678,131			$	8,629,002			$	8,437,538
Liabilities
Noninterest-bearing deposits		$	3,458,804			$	1,892,052			$	2,081,435
Interest-bearing deposits			6,506,165				4,548,267				4,412,464
Total deposits			9,964,969				6,440,319				6,493,899
Securities sold under retail repurchase agreements and federal funds purchased			462,706				213,605				126,008
Advances from FHLB			444,210				513,777				517,477
Subordinated debentures			230,300				209,406				37,316
Total borrowings			1,137,216				936,788				680,801
Accrued interest payable and other liabilities			151,197				118,921				122,797
Total liabilities			11,253,382				7,496,028				7,297,497
Stockholders' Equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 47,025,779, 34,970,370 and 35,625,822 at September 30, 2020, December 31, 2019 and September 30, 2019, respectively			47,026				34,970				35,626
Additional paid in capital			845,399				586,622				609,103
Retained earnings			514,831				515,714				498,020
Accumulated other comprehensive income/ (loss)			17,493				(4,332	)			(2,708	)
Total stockholders' equity			1,424,749				1,132,974				1,140,041
Total liabilities and stockholders' equity		$	12,678,131			$	8,629,002			$	8,437,538

Sandy Spring Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
		Three Months Ended							Nine Months Ended
		September 30,							September 30,
(Dollars in thousands, except per share data)		2020			2019				2020			2019
Interest Income:
Interest and fees on loans		$	106,560		$	79,167			$	288,721		$	239,028
Interest on loans held for sale			398			572				1,094			1,145
Interest on deposits with banks			84			783				419			1,405
Interest and dividends on investment securities:
Taxable for federal income taxes			4,488			5,221				17,270			16,302
Exempt from federal income taxes			1,454			1,337				4,264			4,591
Interest on federal funds sold			-			2				1			8
Total interest income			112,984			87,082				311,769			262,479
Interest Expense:
Interest on deposits			9,439			16,332				35,241			46,958
Interest on retail repurchase agreements and federal funds purchased			551			257				1,731			945
Interest on advances from FHLB			2,841			3,222				3,863			13,389
Interest on subordinated debt			2,669			481				7,602			1,462
Total interest expense			15,500			20,292				48,437			62,754
Net interest income			97,484			66,790				263,332			199,725
Provision for credit losses			7,003			1,524				90,158			3,029
Net interest income after provision for credit losses			90,481			65,266				173,174			196,696
Non-interest Income:
Investment securities gains			51			15				432			20
Service charges on deposit accounts			1,673			2,516				5,149			7,265
Mortgage banking activities			14,108			4,408				25,567			10,541
Wealth management income			7,785			5,493				22,355			16,268
Insurance agency commissions			2,122			2,116				5,439			5,281
Income from bank owned life insurance			708			662				2,162			2,505
Bank card fees			1,525			1,462				4,102			4,181
Other income			1,418			1,901				5,276			6,037
Total non-interest income			29,390			18,573				70,482			52,098
Non-interest Expense:
Salaries and employee benefits			36,041			26,234				98,391			77,699
Occupancy expense of premises			5,575			4,816				16,147			14,807
Equipment expenses			3,133			2,641				9,103			7,929
Marketing			1,305			1,541				3,223			3,371
Outside data services			2,614			1,973				6,365			5,713
FDIC insurance			1,340			(83	)			3,200			2,137
Amortization of intangible assets			1,968			491				4,566			1,465
Merger and acquisition expense			1,263			364				25,171			364
Professional fees and services			1,800			1,546				5,466			4,425
Other expenses			5,898			5,402				22,489			15,094
Total non-interest expense			60,937			44,925				194,121			133,004
Income before income taxes			58,934			38,914				49,535			115,790
Income tax expense			14,292			9,531				9,244			27,814
Net income		$	44,642		$	29,383			$	40,291		$	87,976
Net Income Per Share Amounts:
Basic net income per common share		$	0.94		$	0.82			$	0.93		$	2.46
Diluted net income per common share		$	0.94		$	0.82			$	0.93		$	2.45
Dividends declared per share		$	0.30		$	0.30			$	0.90		$	0.88

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2020													2019
(Dollars in thousands, except per share data)		Q3				Q2				Q1					Q4				Q3				Q2				Q1
Profitability for the Quarter:
Tax-equivalent interest income		$	113,627			$	116,252			$	84,966				$	86,539			$	88,229			$	88,423			$	89,424
Interest expense			15,500				13,413				19,524					19,807				20,292				21,029				21,433
Tax-equivalent net interest income			98,127				102,839				65,442					66,732				67,937				67,394				67,991
Tax-equivalent adjustment			643				1,325				1,108					1,149				1,147				1,209				1,241
Provision/ (credit) for credit losses			7,003				58,686				24,469					1,655				1,524				1,633				(128	)
Non-interest income			29,390				22,924				18,168					19,224				18,573				16,556				16,969
Non-interest expense			60,937				85,438				47,746					46,081				44,925				43,887				44,192
Income/ (loss) before income taxes			58,934				(19,686	)			10,287					37,071				38,914				37,221				39,655
Income tax expense/ (benefit)			14,292				(5,348	)			300					8,614				9,531				8,945				9,338
Net income/ (loss)		$	44,642			$	(14,338	)		$	9,987				$	28,457			$	29,383			$	28,276			$	30,317
Financial Performance:
Pre-tax pre-provision pre-merger income		$	67,200			$	61,454			$	36,210				$	39,674			$	40,802			$	38,854			$	39,527
Return on average assets			1.38	%			(0.45	)%			0.46	%				1.32	%			1.39	%			1.37	%			1.49	%
Return on average common equity			12.67	%			(4.15	)%			3.55	%				9.93	%			10.38	%			10.32	%			11.46	%
Return on average tangible common equity			18.16	%			(5.80	)%			5.36	%				14.39	%			15.13	%			15.10	%			16.82	%
Net interest margin			3.24	%			3.47	%			3.29	%				3.38	%			3.51	%			3.54	%			3.60	%
Efficiency ratio - GAAP basis (1)			48.03	%			68.66	%			57.87	%				54.34	%			52.63	%			53.04	%			52.79	%
Efficiency ratio - Non-GAAP basis (1)			45.27	%			43.85	%			54.76	%				51.98	%			50.95	%			51.71	%			51.44	%
Per Share Data:
Net income/ (loss) attributable to common shareholders		$	44,268			$	(14,458	)		$	9,919				$	28,274			$	29,196			$	28,065			$	30,120
Basic net income/ (loss) per common share		$	0.94			$	(0.31	)		$	0.29				$	0.80			$	0.82			$	0.79			$	0.85
Diluted net income/ (loss) per common share		$	0.94			$	(0.31	)		$	0.28				$	0.80			$	0.82			$	0.79			$	0.85
Weighted average diluted common shares			47,175,071				46,988,351				34,743,623					35,543,254				35,671,721				35,634,924				35,618,346
Dividends declared per share		$	0.30			$	0.30			$	0.30				$	0.30			$	0.30			$	0.30			$	0.28
Non-interest Income:
Securities gains		$	51			$	212			$	169				$	57			$	15			$	5			$	-
Service charges on deposit accounts			1,673				1,223				2,253					2,427				2,516				2,442				2,307
Mortgage banking activities			14,108				8,426				3,033					4,170				4,408				3,270				2,863
Wealth management income			7,785				7,604				6,966					6,401				5,493				5,539				5,236
Insurance agency commissions			2,122				1,188				2,129					1,331				2,116				1,265				1,900
Income from bank owned life insurance			708				809				645					660				662				654				1,189
Bank card fees			1,525				1,257				1,320					1,435				1,462				1,467				1,252
Other income			1,418				2,205				1,653					2,743				1,901				1,914				2,222
Total Non-interest Income		$	29,390			$	22,924			$	18,168				$	19,224			$	18,573			$	16,556			$	16,969
Non-interest Expense:
Salaries and employee benefits		$	36,041			$	34,297			$	28,053				$	26,251			$	26,234			$	25,489			$	25,976
Occupancy expense of premises			5,575				5,991				4,581					4,663				4,816				4,760				5,231
Equipment expenses			3,133				3,219				2,751					2,791				2,641				2,712				2,576
Marketing			1,305				729				1,189					1,085				1,541				887				943
Outside data services			2,614				2,169				1,582					1,854				1,973				1,962				1,778
FDIC insurance			1,340				1,378				482					123				(83	)			1,084				1,136
Amortization of intangible assets			1,968				1,998				600					481				491				483				491
Merger and acquisition expense			1,263				22,454				1,454					948				364				-				-
Professional fees and services			1,800				1,840				1,826					2,553				1,546				1,634				1,245
Other expenses			5,898				11,363				5,228					5,332				5,402				4,876				4,816
Total Non-interest Expense		$	60,937			$	85,438			$	47,746				$	46,081			$	44,925			$	43,887			$	44,192
(1) The efficiency ratio - GAAP basis is non-interest expense divided by net interest income plus non-interest income from the Condensed Consolidated Statements of Income. The traditional efficiency ratio - Non-GAAP basis excludes intangible asset amortization, loss on FHLB redemption, and merger and acquisition expense from non-interest expense; securities gains from non-interest income; and adds the tax-equivalent adjustment to net interest income. See the Reconciliation Table included with these Financial Highlights.

Sandy Spring Bancorp, Inc. and Subsidiaries
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED
		2020												2019
(Dollars in thousands)		Q3				Q2				Q1				Q4				Q3				Q2				Q1
Balance Sheets at Quarter End:
Commercial investor real estate loans		$	3,588,702			$	3,581,778			$	2,241,240			$	2,169,156			$	2,036,021			$	1,994,027			$	1,962,879
Commercial owner-occupied real estate loans			1,652,208				1,601,803				1,305,682				1,288,677				1,278,505				1,224,986				1,216,713
Commercial AD&C loans			994,800				997,423				643,114				684,010				678,906				658,709				688,939
Commercial business loans			2,227,246				2,222,810				813,525				801,019				772,619				772,158				769,660
Residential mortgage loans			1,173,857				1,211,745				1,116,512				1,149,327				1,199,275				1,241,081				1,249,968
Residential construction loans			175,123				169,050				149,573				146,279				150,692				171,106				176,388
Consumer loans			521,999				558,434				453,346				466,764				480,530				489,176				505,443
Total loans			10,333,935				10,343,043				6,722,992				6,705,232				6,596,548				6,551,243				6,569,990
Allowance for credit losses			(170,314	)			(163,481	)			(85,800	)			(56,132	)			(54,992	)			(54,024	)			(53,089	)
Loans held for sale			88,728				68,765				67,114				53,701				78,821				50,511				24,998
Investment securities			1,425,733				1,424,652				1,250,560				1,125,136				946,210				955,715				987,299
Interest-earning assets			11,965,915				12,447,146				8,222,589				7,947,703				7,742,138				7,713,364				7,648,654
Total assets			12,678,131				13,290,447				8,929,602				8,629,002				8,437,538				8,398,519				8,327,900
Noninterest-bearing demand deposits			3,458,804				3,434,038				1,939,937				1,892,052				2,081,435				2,023,614				1,813,708
Total deposits			9,964,969				10,076,834				6,593,874				6,440,319				6,493,899				6,389,749				6,224,523
Customer repurchase agreements			142,287				143,579				125,305				138,605				126,008				150,604				122,626
Total interest-bearing liabilities			7,643,381				8,313,546				5,732,349				5,485,055				5,093,265				5,136,860				5,297,108
Total stockholders' equity			1,424,749				1,390,093				1,116,334				1,132,974				1,140,041				1,119,445				1,095,848
Quarterly Average Balance Sheets:
Commercial investor real estate loans		$	3,582,751			$	3,448,882			$	2,202,461			$	2,092,478			$	1,982,979			$	1,960,919			$	1,964,699
Commercial owner-occupied real estate loans			1,628,474				1,681,674				1,285,257				1,274,782				1,258,000				1,215,632				1,207,799
Commercial AD&C loans			977,607				969,251				659,494				695,817				651,905				686,282				676,205
Commercial business loans			2,207,388				1,899,264				819,133				765,159				786,150				756,594				780,318
Residential mortgage loans			1,189,452				1,208,566				1,139,786				1,169,623				1,215,132				1,244,086				1,230,319
Residential construction loans			173,280				162,978				145,266				149,690				162,196				174,095				189,720
Consumer loans			543,242				575,734				465,314				477,572				486,865				505,235				515,644
Total loans			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			54,784				53,312				35,030				50,208				61,870				37,121				17,846
Investment securities			1,404,238				1,398,586				1,179,084				1,002,692				941,048				964,863				1,010,940
Interest-earning assets			12,049,463				11,921,132				7,994,618				7,859,836				7,690,629				7,619,240				7,627,187
Total assets			12,835,893				12,903,156				8,699,342				8,542,837				8,370,789				8,294,883				8,258,116
Noninterest-bearing demand deposits			3,281,607				3,007,222				1,797,227				1,927,063				1,909,884				1,796,802				1,682,720
Total deposits			9,862,639				9,614,176				6,433,694				6,459,551				6,405,762				6,247,409				5,952,942
Customer repurchase agreements			142,694				144,050				135,652				126,596				138,736				141,865				129,059
Total interest-bearing liabilities			7,969,487				8,326,909				5,612,056				5,326,303				5,202,876				5,269,209				5,403,946
Total stockholders' equity			1,401,746				1,390,544				1,130,051				1,136,824				1,123,185				1,099,078				1,073,291
Financial Measures:
Average equity to average assets			10.92	%			10.78	%			12.99	%			13.31	%			13.42	%			13.25	%			13.00	%
Investment securities to earning assets			11.91	%			11.45	%			15.21	%			14.16	%			12.22	%			12.39	%			12.91	%
Loans to earning assets			86.36	%			83.10	%			81.76	%			84.37	%			85.20	%			84.93	%			85.90	%
Loans to assets			81.51	%			77.82	%			75.29	%			77.71	%			78.18	%			78.00	%			78.89	%
Loans to deposits			103.70	%			102.64	%			101.96	%			104.11	%			101.58	%			102.53	%			105.55	%
Capital Measures:
Tier 1 leverage (1)			8.65	%			8.35	%			8.78	%			9.70	%			9.96	%			9.80	%			9.61	%
Common equity tier 1 capital to risk-weighted assets (1)			10.45	%			10.23	%			10.23	%			11.06	%			11.37	%			11.43	%			11.19	%
Tier 1 capital to risk-weighted assets (1)			10.45	%			10.23	%			10.23	%			11.21	%			11.52	%			11.59	%			11.35	%
Total regulatory capital to risk-weighted assets (1)			14.02	%			13.79	%			14.09	%			14.85	%			12.70	%			12.79	%			12.54	%
Book value per common share		$	30.30			$	29.58			$	32.68			$	32.40			$	32.00			$	31.43			$	30.82
Outstanding common shares			47,025,779				47,001,022				34,164,672				34,970,370				35,625,822				35,614,953				35,557,110
(1) Estimated ratio at September 30, 2020

Sandy Spring Bancorp, Inc. and Subsidiaries
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED
		2020												2019
(Dollars in thousands)		September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
Non-Performing Assets:
Loans 90 days past due:
Commercial real estate:
Commercial investor real estate		$	-			$	775			$	-			$	-			$	1,201			$	1,248			$	-
Commercial owner-occupied real estate			-				515				-				-				-				-				90
Commercial AD&C			-				-				-				-				-				-				-
Commercial business			93				-				-				-				17				-				-
Residential real estate:
Residential mortgage			320				138				8				-				-				-				221
Residential construction			-				-				-				-				-				-				-
Consumer			1				-				-				-				-				-				-
Total loans 90 days past due			414				1,428				8				-				1,218				1,248				311
Non-accrual loans:
Commercial real estate:
Commercial investor real estate			26,784				26,482				17,770				8,437				8,454				6,409				6,071
Commercial owner-occupied real estate			6,511				6,729				4,074				4,148				3,810				3,766				5,992
Commercial AD&C			1,678				2,957				829				829				829				1,990				3,306
Commercial business			17,659				20,246				10,834				8,450				6,393				7,083				8,013
Residential real estate:
Residential mortgage			11,296				11,724				12,271				12,661				12,574				10,625				9,704
Residential construction			-				-				-				-				-				-				156
Consumer			7,493				7,800				5,596				4,107				4,561				4,439				4,081
Total non-accrual loans			71,421				75,938				51,374				38,632				36,621				34,312				37,323
Total restructured loans - accruing			2,854				2,553				2,575				2,636				2,287				2,133				2,479
Total non-performing loans			74,689				79,919				53,957				41,268				40,126				37,693				40,113
Other assets and other real estate owned (OREO)			1,389				1,389				1,416				1,482				1,482				1,486				1,410
Total non-performing assets		$	76,078			$	81,308			$	55,373			$	42,750			$	41,608			$	39,179			$	41,523
		For the Quarter Ended,
		September 30,				June 30,				March 31,				December 31,				September 30,				June 30,				March 31,
(Dollars in thousands)			2020				2020				2020				2019				2019				2019				2019
Analysis of Non-accrual Loan Activity:
Balance at beginning of period		$	75,938			$	51,374			$	38,632			$	36,621			$	34,312			$	37,323			$	33,583
Purchased credit deteriorated loans designated as non-accrual			-				-				13,084				-				-				-				-
Non-accrual balances transferred to OREO			-				-				-				-				-				(195	)			-
Non-accrual balances charged-off			(144	)			(162	)			(575	)			(454	)			(705	)			(604	)			(227	)
Net payments or draws			(4,248	)			(1,881	)			(1,860	)			(2,916	)			(2,903	)			(5,517	)			(1,786	)
Loans placed on non-accrual			893				27,289				2,369				5,381				6,015				3,396				6,202
Non-accrual loans brought current			(1,018	)			(682	)			(276	)			-				(98	)			(91	)			(449	)
Balance at end of period		$	71,421			$	75,938			$	51,374			$	38,632			$	36,621			$	34,312			$	37,323
Analysis of Allowance for Credit Losses:
Balance at beginning of period		$	163,481			$	85,800			$	56,132			$	54,992			$	54,024			$	53,089			$	53,486
Transition impact of adopting ASC 326			-				-				2,983				-				-				-				-
Initial allowance on purchased credit deteriorated loans			-				-				2,762				-				-				-				-
Initial allowance on acquired PCD loans			-				18,628				-				-				-				-				-
Provision/ (credit) for credit losses			7,003				58,686				24,469				1,655				1,524				1,633				(128	)
Less loans charged-off, net of recoveries:
Commercial real estate:
Commercial investor real estate			21				(4	)			-				(3	)			(3	)			(3	)			(7	)
Commercial owner-occupied real estate			-				-				-				-				-				-				-
Commercial AD&C			-				-				-				-				(224	)			(4	)			-
Commercial business			88				(463	)			108				15				389				735				7
Residential real estate:
Residential mortgage			(6	)			15				333				264				209				(10	)			89
Residential construction			(2	)			(1	)			(2	)			(2	)			(2	)			(2	)			(2	)
Consumer			69				86				107				241				187				(18	)			182
Net charge-offs/ (recoveries)			170				(367	)			546				515				556				698				269
Balance at end of period		$	170,314			$	163,481			$	85,800			$	56,132			$	54,992			$	54,024			$	53,089
Asset Quality Ratios:
Non-performing loans to total loans			0.72	%			0.77	%			0.80	%			0.62	%			0.61	%			0.58	%			0.61	%
Non-performing assets to total assets			0.60	%			0.61	%			0.62	%			0.50	%			0.49	%			0.47	%			0.50	%
Allowance for credit losses to loans			1.65	%			1.58	%			1.28	%			0.84	%			0.83	%			0.82	%			0.81	%
Allowance for credit losses to non-performing loans			228.03	%			204.56	%			159.02	%			136.02	%			137.05	%			143.33	%			132.35	%
Annualized net charge-offs/ (recoveries) to average loans			0.01	%			(0.01	%)			0.03	%			0.03	%			0.03	%			0.04	%			0.02	%

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Three Months Ended September 30,
		2020											2019
										Annualized											Annualized
		Average				(1)				Average			Average				(1)				Average
(Dollars in thousands and tax-equivalent)		Balances				Interest				Yield/Rate			Balances				Interest				Yield/Rate
Assets
Commercial investor real estate loans		$	3,582,751			$	39,547			4.39	%		$	1,982,979			$	24,342			4.87	%
Commercial owner-occupied real estate loans			1,628,474				19,215			4.69				1,258,000				15,749			4.97
Commercial AD&C loans			977,607				10,647			4.33				651,905				9,705			5.91
Commercial business loans			2,207,388				20,015			3.61				786,150				10,350			5.22
Total commercial loans			8,396,220				89,424			4.24				4,679,034				60,146			5.10
Residential mortgage loans			1,189,452				10,899			3.67				1,215,132				11,649			3.83
Residential construction loans			173,280				1,733			3.98				162,196				1,746			4.27
Consumer loans			543,242				5,053			3.70				486,865				6,132			5.00
Total residential and consumer loans			1,905,974				17,685			3.70				1,864,193				19,527			4.18
Total loans (2)			10,302,194				107,109			4.14				6,543,227				79,673			4.84
Loans held for sale			54,784				398			2.91				61,870				572			3.70
Taxable securities			1,148,573				4,190			1.46				744,461				5,504			2.95
Tax-exempt securities (3)			255,665				1,846			2.89				196,587				1,695			3.45
Total investment securities (4)			1,404,238				6,036			1.72				941,048				7,199			3.06
Interest-bearing deposits with banks			287,817				84			0.12				143,865				783			2.16
Federal funds sold			430				-			0.10				619				2			1.42
Total interest-earning assets			12,049,463				113,627			3.75				7,690,629				88,229			4.56
Less: allowance for credit losses			(162,488	)										(54,147	)
Cash and due from banks			128,193											64,154
Premises and equipment, net			59,182											60,537
Other assets			761,543											609,616
Total assets		$	12,835,893										$	8,370,789
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,144,328				365			0.13	%		$	749,720				545			0.29	%
Regular savings deposits			391,291				66			0.07				326,913				110			0.13
Money market savings deposits			3,022,710				2,508			0.33				1,781,173				6,721			1.50
Time deposits			2,022,703				6,500			1.28				1,638,072				8,956			2.17
Total interest-bearing deposits			6,581,032				9,439			0.57				4,495,878				16,332			1.44
Other borrowings			709,217				551			0.31				146,939				257			0.69
Advances from FHLB			448,929				2,841			2.52				522,719				3,222			2.45
Subordinated debentures			230,309				2,669			4.64				37,340				481			5.15
Total borrowings			1,388,455				6,061			1.74				706,998				3,960			2.22
Total interest-bearing liabilities			7,969,487				15,500			0.77				5,202,876				20,292			1.55
Noninterest-bearing demand deposits			3,281,607											1,909,884
Other liabilities			183,053											134,844
Stockholders' equity			1,401,746											1,123,185
Total liabilities and stockholders' equity		$	12,835,893										$	8,370,789
Net interest income and spread						$	98,127			2.98	%						$	67,937			3.01	%
Less: tax-equivalent adjustment							643											1,147
Net interest income						$	97,484										$	66,790
Interest income/earning assets										3.75	%										4.56	%
Interest expense/earning assets										0.51											1.05
Net interest margin										3.24	%										3.51	%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.54% and 26.13% for 2020 and 2019, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $0.6 million and $1.1 million in 2020 and 2019, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.
(4) Available-for-sale investments are presented at amortized cost.

Sandy Spring Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED
		Nine Months Ended September 30,
		2020											2019
										Annualized											Annualized
		Average				(1)				Average			Average				(1)				Average
(Dollars in thousands and tax-equivalent)		Balances				Interest				Yield/Rate			Balances				Interest				Yield/Rate
Assets
Commercial investor real estate loans		$	3,079,873			$	103,238			4.48	%		$	1,969,599			$	74,428			5.05	%
Commercial owner-occupied real estate loans			1,532,154				54,215			4.73				1,227,327				44,975			4.90
Commercial AD&C loans			869,181				29,862			4.59				671,375				29,853			5.95
Commercial business loans			1,643,992				49,618			4.03				774,375				31,479			5.43
Total commercial loans			7,125,200				236,933			4.44				4,642,676				180,735			5.20
Residential mortgage loans			1,179,305				32,899			3.72				1,229,790				35,408			3.84
Residential construction loans			160,555				4,985			4.15				175,236				5,582			4.26
Consumer loans			528,152				15,550			3.93				502,476				18,797			5.00
Total residential and consumer loans			1,868,012				53,434			3.82				1,907,502				59,787			4.18
Total loans (2)			8,993,212				290,367			4.31				6,550,178				240,522			4.91
Loans held for sale			47,734				1,094			3.05				39,107				1,145			3.91
Taxable securities			1,095,419				17,557			2.14				752,518				17,169			3.04
Tax-exempt securities (3)			232,165				5,407			3.11				219,510				5,827			3.54
Total investment securities (4)			1,327,584				22,964			2.31				972,028				22,996			3.15
Interest-bearing deposits with banks			291,260				419			0.19				83,981				1,405			2.24
Federal funds sold			369				1			0.36				623				8			1.78
Total interest-earning assets			10,660,159				314,845			3.94				7,645,917				266,076			4.65
Less: allowance for credit losses			(114,613	)										(53,440	)
Cash and due from banks			126,607											64,227
Premises and equipment, net			59,357											61,039
Other assets			751,967											590,186
Total assets		$	11,483,477										$	8,307,929
Liabilities and Stockholders' Equity
Interest-bearing demand deposits		$	1,017,873				1,519			0.20	%		$	733,872				1,305			0.24	%
Regular savings deposits			363,303				212			0.08				330,377				321			0.13
Money market savings deposits			2,588,870				10,554			0.54				1,710,520				19,617			1.53
Time deposits			1,973,773				22,956			1.55				1,629,716				25,715			2.11
Total interest-bearing deposits			5,943,819				35,241			0.79				4,404,485				46,958			1.43
Other borrowings			553,898				1,731			0.42				158,279				945			0.80
Advances from FHLB			585,063				3,863			0.88				689,224				13,389			2.60
Subordinated debentures			222,470				7,602			4.56				37,376				1,462			5.22
Total borrowings			1,361,431				13,196			1.29				884,879				15,796			2.39
Total interest-bearing liabilities			7,305,250				48,437			0.89				5,289,364				62,754			1.59
Noninterest-bearing demand deposits			2,697,492											1,797,301
Other liabilities			172,944											122,564
Stockholders' equity			1,307,791											1,098,700
Total liabilities and stockholders' equity		$	11,483,477										$	8,307,929
Net interest income and spread						$	266,408			3.05	%						$	203,322			3.06	%
Less: tax-equivalent adjustment							3,076											3,597
Net interest income						$	263,332										$	199,725
Interest income/earning assets										3.94	%										4.65	%
Interest expense/earning assets										0.61											1.10
Net interest margin										3.33	%										3.55	%
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 25.54% and 26.13% for 2020 and 2019, respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $3.1 million and $3.6 million in 2020 and 2019, respectively.
(2) Non-accrual loans are included in the average balances.
(3) Includes only investments that are exempt from federal taxes.
(4) Available-for-sale investments are presented at amortized cost.