Sandy Spring Bancorp Reports Quarterly Earnings of $29.4 Million

OLNEY, Md., Oct. 17, 2019 (GLOBE NEWSWIRE) — Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income for the third quarter of 2019 of $29.4 million ($0.82 per diluted share) compared to net income of $29.2 million ($0.82 per diluted share) for the third quarter of 2018 and net income of $28.3 million ($0.79 per diluted share) for the second quarter of 2019.

“In the third quarter we executed our business strategies with precision, focus and company-wide coordination. As a result, we delivered growth in every key category and solid financial metrics,” said Daniel J. Schrider, President and Chief Executive Officer. “We continue to succeed in one of the most desirable markets in the country, and we are deepening our presence in Greater Washington through the acquisition of Revere Bank. We are in a tremendous position of strength as we prepare to close out the year and begin preparing the integration of Revere Bank into Sandy Spring Bank.”

Third Quarter Highlights:  

  • Total loans at September 30, 2019 increased 3% compared to September 30, 2018.  During this period, the impact of the 6% growth in commercial loans was offset by the decline in the mortgage loan portfolio due to the impact of mortgage loan refinance activity driven by the current interest rate environment and the sale of the majority of new mortgage loan production. 
     
  • Total deposits grew 10% from the third quarter of 2018 and compared to the end of 2018. Deposit growth reduced the loan-to-deposit ratio from 111% at year-end 2018 to 102% at the end of the current quarter.  The year-to-date deposit growth included a 19% increase in noninterest-bearing deposits and a 45% reduction in wholesale deposits.
     
  • The provision for loan losses for the current quarter was $1.5 million compared to $1.9 million for the third quarter of 2018 and $1.6 million for the prior quarter of the current year.
     
  • The net interest margin was 3.51% for the third quarter of 2019, compared to 3.71% for the third quarter of 2018 and 3.54% for the second quarter of 2019.  The prior year’s quarterly margin was positively impacted by an interest income recovery of $2.0 million.  Excluding the recovery, the net interest margin for the prior year quarter was 3.60%.
     
  • On September 24, 2019, the Company entered into a definitive agreement and plan of merger pursuant to which Revere Bank will merge with and into Sandy Spring Bank in a transaction valued at approximately $461 million.  Revere Bank, headquartered in Rockville, Maryland, has 11 banking offices and more than $2.6 billion in assets (as of June 30, 2019).
     
  • Quarterly non-interest income increased 24% as compared to the same period in the prior year driven by income from mortgage banking activities that grew 164%.  Growth was experienced in almost every other major category of non-interest income for the second consecutive quarter.
     
  • Non-interest expense for the quarter increased $2.5 million or 6% compared to the same quarter of the prior year.  Increases occurred in most major expense categories, notably compensation and benefits driven by incentive-based programs and an increase in marketing costs.  A large portion of the overall expense increases were offset by a decrease in FDIC insurance due to the receipt of an assessment credit during the current quarter.
     
  • The non-GAAP efficiency ratio continued to remain stable at 50.95% for the current quarter as compared to 49.27% for the third quarter of 2018 and 51.71% for the second quarter of 2019. Excluding the previously mentioned interest recovery in the prior year quarter, the non-GAAP efficiency ratio was 50.48%.

Review of Balance Sheet and Credit Quality

At September 30, 2019, total assets amounted to $8.4 billion compared to $8.0 billion at September 30, 2018 and $8.2 billion at December 31, 2018. Total loans at September 30, 2019 were $6.6 billion compared to $6.4 billion at September 30, 2018 and $6.6 billion at December 31, 2018.  Overall, the loan portfolio has remained relatively level from December 31, 2018 through September 30, 2019.  During this period, commercial loans grew 3% while mortgage loans have declined 2% due to the refinance activity and the strategic decision to sell the majority of new mortgage loan production.  During this period, total funded loan production was $618 million.  Commercial loans originated year-to-date had total unfunded commitments of $359 million as of September 30, 2019. 

Total deposits at September 30, 2019 were $6.5 billion compared to $5.9 billion at both September 30, 2018 and December 31, 2018.  The 10% increase from year-end 2018 was driven by increases in the majority of deposit categories.  The impact of the increase in deposits and rates during the first nine months of 2019 was partially offset by the benefit realized from an increase in noninterest-bearing deposits and a reduction in wholesale deposits. The increase in deposits enabled the reduction of higher cost borrowings, which declined $533 million from year-end through September 30, 2019, providing a positive impact on net interest income. 

Tangible common equity totaled $787 million at September 30, 2019, compared to $711 million at September 30, 2018 as the ratio of tangible common equity to tangible assets grew to 9.74% at September 30, 2019, as compared to 9.26% at September 30, 2018.  The Company had a total risk-based capital ratio of 12.70%, a common equity tier 1 risk-based capital ratio of 11.37%, a tier 1 risk-based capital ratio of 11.52% and a tier 1 leverage ratio of 9.96% at September 30, 2019.

The ratio of non-performing loans to total loans increased to 0.61% at September 30, 2019, compared to 0.52% at September 30, 2018.  Non-performing loans totaled $40.1 million at September 30, 2019, compared to $33.3 million at September 30, 2018, and $37.7 million at June 30, 2019. The modest growth in non-performing loans over the prior periods occurred primarily as a result of increases in segments of the loan portfolio secured by real estate.  Non-performing loans include accruing loans 90 days or more past due and restructured loans, but exclude purchased credit impaired loans acquired in the prior year’s acquisition of WashingtonFirst Bankshares, Inc. (“WashingtonFirst”).

Loan charge-offs, net of recoveries, for the third quarter of 2019 totaled $0.6 million.  Charge-offs for the third quarter of 2018 were not significant.  The allowance for loan losses represented 0.83% of outstanding loans and 137% of non-performing loans at September 30, 2019, compared to 0.79% of outstanding loans and 151% of non-performing loans at September 30, 2018. While non-performing loans increased from September 30, 2018 to the current quarter, the related reserves for those loans remained stable due to adequate collateral values. 

Income Statement Review

For the third quarter of 2019, net interest income decreased to $66.8 million compared to $67.6 million for the third quarter of 2018.  During this period, interest income increased 3% primarily due to loan growth and interest expense increased 21% related to deposit growth resulting in the decline in net interest income. The net interest margin for the current quarter was 3.51%, compared to the net interest margin for the third quarter of 2018 of 3.71%.  The prior year’s quarterly margin was positively impacted by an interest income recovery of $2.0 million.  Excluding this recovery, the prior year’s net interest margin was 3.60%.  The current quarter’s margin benefited from the decrease in average borrowed funds in addition to an increase in average noninterest-bearing deposits compared to the prior year quarter.  Amortization of the fair value adjustments to both interest-earning assets and interest-bearing liabilities directly attributable to the WashingtonFirst acquisition had a 4 basis point positive effect on the net interest margin for the current period, compared to 8 basis points for the same period of the prior year.  The resulting adjusted net interest margin for the current quarter was 3.47% as compared to 3.52% for the prior year quarter.

The provision for loan losses was $1.5 million for the third quarter of 2019, compared to $1.9 million for the third quarter of 2018. The current quarter’s provision reflects the impact of organic loan production and the need to establish a loan loss provision for previously acquired loans that had reached their maturity under their original lending arrangements and were renewed by Sandy Spring Bank.  

Non-interest income increased 24% to $18.6 million for the third quarter of 2019, compared to $15.0 million for the third quarter of 2018.  The increase in non-interest income was due primarily to the 164% increase in income from mortgage banking activities as the volume of residential mortgages sold increased.  Increases occurred in all non-interest income sources during the current quarter, with the exception of income from bank-owned life insurance, which remained level as compared to the third quarter of 2018.

Non-interest expense increased 6% to $44.9 million for the third quarter of 2019, compared to $42.4 million in the third quarter of 2018. The current year quarter included $0.4 million in merger expenses compared to $0.6 million for the prior year quarter.  Excluding merger expenses, non-interest expense increased 7% compared to the prior year, driven by higher compensation costs associated with incentive-based sales programs, marketing campaign expenses and an increase in occupancy and equipment costs.  A portion of these increases were offset by a decrease in FDIC insurance due to the industry deposit insurance fund reaching the stipulated benchmark levels.  The non-GAAP efficiency ratio was 50.95% for the third quarter of 2019, compared to 49.27% for the third quarter of 2018.  The non-GAAP efficiency ratio for the prior year quarter was 50.48% after excluding the previously mentioned interest income recovery.

Net interest income for the nine months ended September 30, 2019 increased 3% compared to the first nine months of 2018 due principally to loan growth. During the first nine months of 2019, the net interest margin was 3.55% compared to 3.62% for the prior year period. The first nine months of 2019 included $1.8 million in recovered interest income on acquired credit impaired loans compared to $2.0 million for the same period of the prior year.  Excluding the recovered interest income from both periods, the interest margin would have been 3.52% for the current year versus 3.59% for the prior year.  Amortization of the fair value adjustments attributable to the WashingtonFirst acquisition had a 5 basis point positive impact on the net interest margin for the nine months ended September 30, 2019, compared to 14 basis points for the prior year period. 

The provision for loan losses was $3.0 million for the first nine months of 2019, compared to $5.6 million for the first nine months of 2018.  The decrease in the provision for the current period compared to the prior year was primarily the result of the overall improvement in the qualitative credit metrics of the loan portfolio during the previous twelve months in addition to lower loan growth than experienced in the prior year.

Non-interest income was $52.1 million for the first nine months of 2019, compared to $47.0 million for the first nine months of 2018.  Excluding life insurance mortality proceeds of $0.6 million and $1.6 million from the first nine months of 2019 and 2018, respectively, non-interest income increased 13%. This increase was driven by income from mortgage banking activities, which increased 77% from the prior year-to-date, to $10.5 million for the nine months ended September 30, 2019, as a result of the rise in mortgage lending activity during 2019. Sales of originated mortgage loans rose 51% during the current period compared to the same period for 2018.  Increases also occurred in service charges, wealth management income, insurance commissions and other non-interest income.

Non-interest expense decreased 3% or $4.1 million to $133.0 million for the first nine months of 2019, compared to $137.1 million for the prior year period.  The prior year period included $11.8 million in merger expenses.  Excluding merger expenses, non-interest expense rose 6%, driven by increases in salaries and benefits, software costs, marketing costs and expenses from outside data services.  A portion of the increases in non-interest expense was offset by the decrease in FDIC insurance during the year.  The non-GAAP efficiency ratio was 51.36% for the first nine months of 2019 compared to 50.57% for the first nine months of 2018.

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, merger expenses and securities gains and includes tax-equivalent income.

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 table included with this release for details on the earnings impact of these items.

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) October 31, 2019.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10135193.

About Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank, the largest locally-headquartered community bank in the Greater Washington, D.C. region. With over 50 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout central Maryland, Northern Virginia, and Washington, D.C. Through its subsidiaries, Sandy Spring Insurance Corporation and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of insurance and wealth management services. Visit www.sandyspringbank.com for more information.

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:  [email protected]
            [email protected]
Website: www.sandyspringbank.com

Media Contact:
Jen Schell
301-570-8331
[email protected]

Forward-Looking Statements

Sandy Spring Bancorp makes forward-looking statements in this news release and in the conference call regarding this news release.  These forward-looking statements may include: statements of goals, intentions, earnings expectations, and other expectations; estimates of risks and of future costs and benefits; assessments of probable loan losses; assessments of market risk; and statements of the ability to achieve financial and other goals.

Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions.  Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time.  Forward-looking statements speak only as of the date they are made.  Sandy Spring Bancorp does not assume any duty and does not undertake to update its forward-looking statements.  Because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those that Sandy Spring Bancorp anticipated in its forward-looking statements and future results could differ materially from historical performance.

Sandy Spring Bancorp’s forward-looking statements are subject to the following principal risks and uncertainties: 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; risks, uncertainties and other factors relating to the acquisition of Revere Bank by Sandy Spring Bancorp, including the ability to obtain regulatory and shareholder approvals and meet other closing conditions to the transaction, and delay in closing the merger; 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, 2018, 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)     2019     2018   Change       2019     2018   Change  
Results of Operations:                            
Net interest income   $ 66,790   $ 67,591   (1 ) %   $ 199,725   $ 194,300   3   %
Provision for loan losses     1,524     1,890   (19 )       3,029     5,620   (46 )  
Non-interest income     18,573     15,033   24         52,098     47,019   11    
Non-interest expense     44,925     42,393   6         133,004     137,116   (3 )  
Income before income taxes     38,914     38,341   1         115,790     98,583   17    
Net income     29,383     29,234   1         87,976     75,298   17    
                             
Pre-tax pre-provision pre-merger income (5)   $ 40,802   $ 40,811         $ 119,183   $ 115,969   3    
                             
Return on average assets     1.39 %   1.45 %         1.42 %   1.27 %    
Return on average common equity     10.38 %   11.26 %         10.71 %   9.89 %    
Net interest margin     3.51 %   3.71 %         3.55 %   3.62 %    
Efficiency ratio – GAAP basis (1)     52.63 %   51.31 %         52.82 %   56.82 %    
Efficiency ratio – Non-GAAP basis (1)     50.95 %   49.27 %         51.36 %   50.57 %    
                             
Per share data:                            
Basic net income   $ 0.82   $ 0.82     %   $ 2.46   $ 2.11   17   %
Diluted net income   $ 0.82   $ 0.82         $ 2.45   $ 2.11   16    
Average fully diluted shares     35,900,102     35,744,085           35,879,584     35,721,702      
Dividends declared per share   $ 0.30   $ 0.28   7       $ 0.88   $ 0.82   7    
Book value per share     32.00     29.35   9         32.00     29.35   9    
Tangible book value per share (5)     22.10     20.03   10         22.10     20.03   10    
Outstanding shares     35,625,822     35,521,541           35,625,822     35,521,541      
                             
Financial Condition at period-end:                            
Investment securities   $ 946,210   $ 992,797   (5 ) %   $ 946,210   $ 992,797   (5 ) %
Loans     6,596,548     6,388,959   3         6,596,548     6,388,959   3    
Interest-earning assets     7,742,138     7,428,534   4         7,742,138     7,428,534   4    
Assets     8,437,538     8,034,565   5         8,437,538     8,034,565   5    
Deposits     6,493,899     5,898,394   10         6,493,899     5,898,394   10    
Interest-bearing liabilities     5,093,265     5,042,431   1         5,093,265     5,042,431   1    
Stockholders’ equity     1,140,041     1,042,716   9         1,140,041     1,042,716   9    
                             
Capital ratios:                            
Tier 1 leverage (4)     9.96 %   9.46 %         9.96 %   9.46 %    
Tier 1 capital to risk-weighted assets (4)     11.52 %   11.18 %         11.52 %   11.18 %    
Total regulatory capital to risk-weighted assets (4)     12.70 %   12.38 %         12.70 %   12.38 %    
Common equity tier 1 capital to risk-weighted assets (4)     11.37 %   11.02 %         11.37 %   11.02 %    
Tangible common equity to tangible assets (2)     9.74 %   9.26 %         9.74 %   9.26 %    
Average equity to average assets     13.42 %   12.90 %         13.22 %   12.85 %    
                             
Credit quality ratios:                            
Allowance for loan losses to loans     0.83 %   0.79 %         0.83 %   0.79 %    
Non-performing loans to total loans     0.61 %   0.52 %         0.61 %   0.52 %    
Non-performing assets to total assets     0.49 %   0.44 %         0.49 %   0.44 %    
Allowance for loan losses to non-performing loans     137.05 %   151.35 %         137.05 %   151.35 %    
Annualized net charge-offs to average loans (3)     0.03 %   0.00 %         0.03 %   0.01 %    
                             
(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 and merger expenses 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.      
(2) 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.                  
(3) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.                        
(4) Estimated ratio at September 30, 2019.                            
(5) Represents a Non-GAAP measure.                            
                             
                   
Sandy Spring Bancorp, Inc. and Subsidiaries                  
RECONCILIATION TABLE – UNAUDITED                  
                   
    Three Months Ended   Nine Months Ended  
    September 30,   September 30,  
(Dollars in thousands)     2019       2018       2019       2018    
Pre-tax pre-provision pre-merger income:                  
Net income   $ 29,383     $ 29,234     $ 87,976     $ 75,298    
Plus non-GAAP adjustments:                  
Merger expenses     364       580       364       11,766    
Income taxes     9,531       9,107       27,814       23,285    
Provision for loan losses     1,524       1,890       3,029       5,620    
Pre-tax pre-provision pre-merger income   $ 40,802     $ 40,811     $ 119,183     $ 115,969    
                   
Efficiency ratio – GAAP basis:                  
Non-interest expense   $ 44,925     $ 42,393     $ 133,004     $ 137,116    
                   
Net interest income plus non-interest income   $ 85,363     $ 82,624     $ 251,823     $ 241,319    
                   
Efficiency ratio – GAAP basis     52.63 %     51.31 %     52.82 %     56.82 %  
                   
                   
Efficiency ratio – Non-GAAP basis:                  
Non-interest expense   $ 44,925     $ 42,393     $ 133,004     $ 137,116    
Less non-GAAP adjustments:                  
Amortization of intangible assets     491       540       1,465       1,622    
Merger expenses     364       580       364       11,766    
Non-interest expense – as adjusted   $ 44,070     $ 41,273     $ 131,175     $ 123,728    
                   
Net interest income plus non-interest income   $ 85,363     $ 82,624     $ 251,823     $ 241,319    
Plus non-GAAP adjustment:                  
Tax-equivalent income     1,147       1,221       3,597       3,483    
Less non-GAAP adjustment:                  
Securities gains     15       82       20       145    
Net interest income plus non-interest income – as adjusted   $ 86,495     $ 83,763     $ 255,400     $ 244,657    
                   
Efficiency ratio – Non-GAAP basis     50.95 %     49.27 %     51.36 %     50.57 %  
                   
Tangible common equity ratio:                  
Total stockholders’ equity   $ 1,140,041     $ 1,042,716     $ 1,140,041     $ 1,042,716    
Accumulated other comprehensive loss     2,708       24,420       2,708       24,420    
Goodwill     (347,149 )     (345,422 )     (347,149 )     (345,422 )  
Other intangible assets, net     (8,322 )     (10,327 )     (8,322 )     (10,327 )  
Tangible common equity   $ 787,278     $ 711,387     $ 787,278     $ 711,387    
                   
Total assets   $ 8,437,538     $ 8,034,565     $ 8,437,538     $ 8,034,565    
Goodwill     (347,149 )     (345,422 )     (347,149 )     (345,422 )  
Other intangible assets, net     (8,322 )     (10,327 )     (8,322 )     (10,327 )  
Tangible assets   $ 8,082,067     $ 7,678,816     $ 8,082,067     $ 7,678,816    
                   
Tangible common equity ratio     9.74 %     9.26 %     9.74 %     9.26 %  
                   
Outstanding common shares     35,625,822       35,521,541       35,625,822       35,521,541    
Tangible book value per common share   $ 22.10     $ 20.03     $ 22.10     $ 20.03    
                   
             
Sandy Spring Bancorp, Inc. and Subsidiaries            
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION – UNAUDITED            
             
    September 30, December 31,   September 30,
(Dollars in thousands)     2019       2018       2018  
Assets            
Cash and due from banks   $ 89,377     $ 67,014     $ 63,380  
Federal funds sold     253       609       2,055  
Interest-bearing deposits with banks     120,306       33,858       13,142  
Cash and cash equivalents     209,936       101,481       78,577  
Residential mortgage loans held for sale (at fair value)     78,821       22,773       31,581  
Investments available-for-sale (at fair value)     894,272       937,335       926,723  
Other equity securities     51,938       73,389       66,074  
Total loans     6,596,548       6,571,634       6,388,959  
Less: allowance for loan losses     (54,992 )     (53,486 )     (50,409 )
Net loans     6,541,556       6,518,148       6,338,550  
Premises and equipment, net     59,487       61,942       62,098  
Other real estate owned     1,482       1,584       2,118  
Accrued interest receivable     23,438       24,609       24,058  
Goodwill     347,149       347,149       345,422  
Other intangible assets, net     8,322       9,788       10,327  
Other assets     221,137       145,074       149,037  
Total assets   $ 8,437,538     $ 8,243,272     $ 8,034,565  
             
Liabilities            
Noninterest-bearing deposits   $ 2,081,435     $ 1,750,319     $ 1,902,537  
Interest-bearing deposits     4,412,464       4,164,561       3,995,857  
Total deposits     6,493,899       5,914,880       5,898,394  
Securities sold under retail repurchase agreements and federal funds purchased     126,008       327,429       142,669  
Advances from FHLB     517,477       848,611       866,445  
Subordinated debentures     37,316       37,425       37,460  
Accrued interest payable and other liabilities     122,797       47,024       46,881  
Total liabilities     7,297,497       7,175,369       6,991,849  
             
Stockholders’ Equity            
Common stock — par value $1.00; shares authorized 100,000,000; shares issued and outstanding 35,625,822,            
35,530,734 and 35,521,541 at September 30, 2019, December 31, 2018 and September 30, 2018, respectively     35,626       35,531       35,522  
Additional paid in capital     609,103       606,573       605,623  
Retained earnings     498,020       441,553       425,991  
Accumulated other comprehensive loss     (2,708 )     (15,754 )     (24,420 )
Total stockholders’ equity     1,140,041       1,067,903       1,042,716  
Total liabilities and stockholders’ equity   $ 8,437,538     $ 8,243,272     $ 8,034,565  
             
                 
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)     2019       2018     2019     2018
Interest Income:                
Interest and fees on loans   $ 79,167     $ 76,786   $ 239,028   $ 215,050
Interest on loans held for sale     572       336     1,145     983
Interest on deposits with banks     783       211     1,405     1,082
Interest and dividends on investment securities:                
Taxable     5,221       5,112     16,302     15,297
Exempt from federal income taxes     1,337       1,921     4,591     6,035
Interest on federal funds sold     2       8     8     28
Total interest income     87,082       84,374     262,479     238,475
Interest Expense:                
Interest on deposits     16,332       10,773     46,958     26,583
Interest on retail repurchase agreements and federal funds purchased     257       383     945     599
Interest on advances from FHLB     3,222       5,141     13,389     15,557
Interest on subordinated debt     481       486     1,462     1,436
Total interest expense     20,292       16,783     62,754     44,175
Net interest income     66,790       67,591     199,725     194,300
Provision for loan losses     1,524       1,890     3,029     5,620
Net interest income after provision for loan losses     65,266       65,701     196,696     188,680
Non-interest Income:                
Investment securities gains     15       82     20     145
Service charges on deposit accounts     2,516       2,316     7,265     6,865
Mortgage banking activities     4,408       1,672     10,541     5,943
Wealth management income     5,493       5,344     16,268     15,792
Insurance agency commissions     2,116       2,016     5,281     5,020
Income from bank owned life insurance     662       663     2,505     3,664
Bank card fees     1,462       1,436     4,181     4,199
Other income     1,901       1,504     6,037     5,391
Total non-interest income     18,573       15,033     52,098     47,019
Non-interest Expense:                
Salaries and employee benefits     26,234       24,488     77,699     73,064
Occupancy expense of premises     4,816       4,355     14,807     13,939
Equipment expenses     2,641       2,441     7,929     6,909
Marketing     1,541       770     3,371     2,863
Outside data services     1,973       1,736     5,713     4,840
FDIC insurance     (83 )     1,257     2,137     3,840
Amortization of intangible assets     491       540     1,465     1,622
Merger expenses     364       580     364     11,766
Professional fees and services     1,546       1,351     4,425     4,090
Other expenses     5,402       4,875     15,094     14,183
Total non-interest expense     44,925       42,393     133,004     137,116
Income before income taxes     38,914       38,341     115,790     98,583
Income tax expense     9,531       9,107     27,814     23,285
Net income   $ 29,383     $ 29,234   $ 87,976   $ 75,298
                 
Net Income Per Share Amounts:                
Basic net income per share   $ 0.82     $ 0.82   $ 2.46   $ 2.11
Diluted net income per share   $ 0.82     $ 0.82   $ 2.45   $ 2.11
Dividends declared per share   $ 0.30     $ 0.28   $ 0.88   $ 0.82
                 
                               
Sandy Spring Bancorp, Inc. and Subsidiaries                              
HISTORICAL TRENDS – QUARTERLY FINANCIAL DATA – UNAUDITED                      
                               
      2019           2018    
(Dollars in thousands, except per share data)   Q3   Q2   Q1   Q4   Q3   Q2   Q1  
Profitability for the Quarter:                              
Tax-equivalent interest income   $ 88,229     $ 88,423     $ 89,424     $ 86,839     $ 85,595     $ 79,774     $ 76,589    
Interest expense     20,292       21,029       21,433       19,462       16,783       14,779       12,613    
Tax-equivalent net interest income     67,937       67,394       67,991       67,377       68,812       64,995       63,976    
Tax-equivalent adjustment     1,147       1,209       1,241       1,232       1,221       1,177       1,085    
Provision (credit) for loan losses     1,524       1,633       (128 )     3,403       1,890       1,733       1,997    
Non-interest income     18,573       16,556       16,969       14,030       15,033       14,868       17,118    
Non-interest expense     44,925       43,887       44,192       42,667       42,393       45,082       49,641    
Income before income taxes     38,914       37,221       39,655       34,105       38,341       31,871       28,371    
Income tax expense     9,531       8,945       9,338       8,539       9,107       7,472       6,706    
Net income   $ 29,383     $ 28,276     $ 30,317     $ 25,566     $ 29,234     $ 24,399     $ 21,665    
Financial Performance:                              
Pre-tax pre-provision pre-merger income   $ 40,802     $ 38,854     $ 39,527     $ 37,508     $ 40,811     $ 35,832     $ 39,326    
Return on average assets     1.39 %     1.37 %     1.49 %     1.25 %     1.45 %     1.23 %     1.12 %  
Return on average common equity     10.38 %     10.32 %     11.46 %     9.70 %     11.26 %     9.66 %     8.70 %  
Net interest margin     3.51 %     3.54 %     3.60 %     3.57 %     3.71 %     3.56 %     3.58 %  
Efficiency ratio – GAAP basis (1)     52.63 %     53.04 %     52.79 %     53.22 %     51.31 %     57.29 %     62.04 %  
Efficiency ratio – Non-GAAP basis (1)     50.95 %     51.71 %     51.44 %     51.78 %     49.27 %     52.98 %     49.54 %  
Per Share Data:                              
Basic net income per share   $ 0.82     $ 0.79     $ 0.85     $ 0.72     $ 0.82     $ 0.68     $ 0.61    
Diluted net income per share   $ 0.82     $ 0.79     $ 0.85     $ 0.72     $ 0.82     $ 0.68     $ 0.61    
Average fully diluted shares     35,900,102       35,890,437       35,806,459       35,747,478       35,744,085       35,743,927       35,683,542    
Dividends declared per common share   $ 0.30     $ 0.30     $ 0.28     $ 0.28     $ 0.28     $ 0.28     $ 0.26    
Non-interest Income:                              
Securities gains   $ 15     $ 5     $     $ 45     $ 82     $     $ 63    
Service charges on deposit accounts     2,516       2,442       2,307       2,459       2,316       2,290       2,259    
Mortgage banking activities     4,408       3,270       2,863       1,130       1,672       2,064       2,207    
Wealth management income     5,493       5,539       5,236       5,492       5,344       5,387       5,061    
Insurance agency commissions     2,116       1,265       1,900       1,138       2,016       1,180       1,824    
Income from bank owned life insurance     662       654       1,189       663       663       670       2,331    
Bank card fees     1,462       1,467       1,252       1,368       1,436       1,393       1,370    
Other income     1,901       1,914       2,222       1,735       1,504       1,884       2,003    
Total Non-interest Income   $ 18,573     $ 16,556     $ 16,969     $ 14,030     $ 15,033     $ 14,868     $ 17,118    
Non-interest Expense:                              
Salaries and employee benefits   $ 26,234     $ 25,489     $ 25,976     $ 23,934     $ 24,488     $ 24,664     $ 23,912    
Occupancy expense of premises     4,816       4,760       5,231       4,413       4,355       4,642       4,942    
Equipment expenses     2,641       2,712       2,576       2,426       2,441       2,243       2,225    
Marketing     1,541       887       943       1,061       770       945       1,148    
Outside data services     1,973       1,962       1,778       1,763       1,736       1,707       1,397    
FDIC insurance     (83 )     1,084       1,136       1,255       1,257       1,390       1,193    
Amortization of intangible assets     491       483       491       540       540       541       541    
Merger expenses     364                         580       2,228       8,958    
Professional fees and services     1,546       1,634       1,245       1,966       1,351       1,699       1,040    
Other expenses     5,402       4,876       4,816       5,309       4,875       5,023       4,285    
Total Non-interest Expense   $ 44,925     $ 43,887     $ 44,192     $ 42,667     $ 42,393     $ 45,082     $ 49,641    
                               
(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 and merger expenses 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                      
                               
      2019       2018    
(Dollars in thousands)   Q3   Q2   Q1   Q4   Q3   Q2   Q1  
Balance Sheets at Quarter End:                              
Residential mortgage loans   $ 1,199,275     $ 1,241,081     $ 1,249,968     $ 1,228,247     $ 1,181,427     $ 1,106,674     $ 992,287    
Residential construction loans     150,692       171,106       176,388       186,785       188,779       197,372       215,445    
Commercial AD&C loans     678,906       658,709       688,939       681,201       631,589       609,266       564,871    
Commercial investor real estate loans     2,036,021       1,994,027       1,962,879       1,958,395       1,924,397       1,923,827       1,928,439    
Commercial owner occupied real estate loans     1,278,505       1,224,986       1,216,713       1,202,903       1,201,673       1,184,421       1,174,739    
Commercial business loans     772,619       772,158       769,660       796,264       738,083       702,939       652,797    
Consumer loans     480,530       489,176       505,443       517,839       523,011       525,574       532,973    
Total loans     6,596,548       6,551,243       6,569,990       6,571,634       6,388,959       6,250,073       6,061,551    
Allowance for loan losses     (54,992 )     (54,024 )     (53,089 )     (53,486 )     (50,409 )     (48,493 )     (46,931 )  
Loans held for sale     78,821       50,511       24,998       22,773       31,581       40,000       28,486    
Investment securities     946,210       955,715       987,299       1,010,724       992,797       1,017,274       1,040,339    
Interest-earning assets     7,742,138       7,713,364       7,648,654       7,639,598       7,428,534       7,532,664       7,285,731    
Total assets     8,437,538       8,398,519       8,327,900       8,243,272       8,034,565       8,152,600       7,894,918    
Noninterest-bearing demand deposits     2,081,435       2,023,614       1,813,708       1,750,319       1,902,537       1,910,690       1,767,523    
Total deposits     6,493,899       6,389,749       6,224,523       5,914,880       5,898,394       5,837,826       5,627,206    
Customer repurchase agreements     126,008       150,604       122,626       137,429       142,669       139,647       149,323    
Total interest-bearing liabilities     5,093,265       5,136,860       5,297,108       5,378,026       5,042,431       5,168,055       5,057,645    
Total stockholders’ equity     1,140,041       1,119,445       1,095,848       1,067,903       1,042,716       1,026,349       1,014,608    
Quarterly Average Balance Sheets:                              
Residential mortgage loans   $ 1,215,132     $ 1,244,086     $ 1,230,319     $ 1,188,135     $ 1,122,946     $ 1,034,062     $ 1,117,478    
Residential construction loans     162,196       174,095       189,720       202,710       215,578       223,171       193,327    
Commercial AD&C loans     651,905       686,282       676,205       647,115       632,354       576,076       582,876    
Commercial investor real estate loans     1,982,979       1,960,919       1,964,699       1,936,936       1,905,427       1,924,759       1,988,340    
Commercial owner occupied real estate loans     1,258,000       1,215,632       1,207,799       1,196,506       1,190,865       1,184,409       940,065    
Commercial business loans     786,150       756,594       780,318       751,754       700,791       666,280       657,372    
Consumer loans     486,865       505,235       515,644       522,453       524,605       531,965       538,198    
Total loans     6,543,227       6,542,843       6,564,704       6,445,609       6,292,566       6,140,722       6,017,656    
Loans held for sale     61,870       37,121       17,846       21,923       29,939       25,403       35,768    
Investment securities     941,048       964,863       1,010,940       986,146       996,365       1,028,306       1,062,325    
Interest-earning assets     7,690,629       7,619,240       7,627,187       7,495,338       7,372,536       7,311,272       7,212,878    
Total assets     8,370,789       8,294,883       8,258,116       8,104,916       7,986,525       7,926,735       7,841,611    
Noninterest-bearing demand deposits     1,909,884       1,796,802       1,682,720       1,766,672       1,822,931       1,796,644       1,651,258    
Total deposits     6,405,762       6,247,409       5,952,942       5,822,580       5,783,992       5,657,420       5,489,715    
Customer repurchase agreements     138,736       141,865       129,059       146,637       139,809       148,539       136,694    
Total interest-bearing liabilities     5,202,876       5,269,209       5,403,946       5,230,254       5,076,717       5,058,016       5,116,904    
Total stockholders’ equity     1,123,185       1,099,078       1,073,291       1,045,378       1,030,167       1,013,081       1,010,106    
Financial Measures:                              
Average equity to average assets     13.42 %     13.25 %     13.00 %     12.90 %     12.90 %     12.78 %     12.88 %  
Investment securities to earning assets     12.22 %     12.39 %     12.91 %     13.23 %     13.36 %     13.50 %     14.28 %  
Loans to earning assets     85.20 %     84.93 %     85.90 %     86.02 %     86.01 %     82.97 %     83.20 %  
Loans to assets     78.18 %     78.00 %     78.89 %     79.72 %     79.52 %     76.66 %     76.78 %  
Loans to deposits     101.58 %     102.53 %     105.55 %     111.10 %     108.32 %     107.06 %     107.72 %  
Capital Measures:                              
Tier 1 leverage (1)     9.96 %     9.80 %     9.61 %     9.50 %     9.46 %     9.27 %     9.21 %  
Tier 1 capital to risk-weighted assets (1)     11.52 %     11.59 %     11.35 %     11.06 %     11.18 %     11.01 %     11.08 %  
Total regulatory capital to risk-weighted assets (1)     12.70 %     12.79 %     12.54 %     12.26 %     12.38 %     12.19 %     12.27 %  
Common equity tier 1 capital to risk-weighted assets (1)     11.37 %     11.43 %     11.19 %     10.90 %     11.02 %     10.85 %     10.92 %  
Book value per share   $ 32.00     $ 31.43     $ 30.82     $ 30.06     $ 29.35     $ 28.90     $ 28.61    
Outstanding shares     35,625,822       35,614,953       35,557,110       35,530,734       35,521,541       35,511,943       35,463,269    
(1) Estimated ratio at September 30, 2019                              
                               
                             
Sandy Spring Bancorp, Inc. and Subsidiaries                            
LOAN PORTFOLIO QUALITY DETAIL – UNAUDITED                        
                             
      2019       2018  
(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 business   $ 17     $     $     $ 49     $ 150     $ 6     $  
Commercial real estate:                            
Commercial AD&C                             1,261              
Commercial investor real estate     1,201       1,248                                
Commercial owner occupied real estate                 90             13       112        
Consumer                       219       563             126  
Residential real estate:                            
Residential mortgage                 221       221                    
Residential construction                                          
Total loans 90 days past due     1,218       1,248       311       489       1,987       118       126  
Non-accrual loans:                            
Commercial business     6,393       7,083       8,013       7,086       6,352       6,883       6,634  
Commercial real estate:                            
Commercial AD&C     829       1,990       3,306       3,306       136       136       136  
Commercial investor real estate     8,454       6,409       6,071       5,355       5,861       5,878       5,813  
Commercial owner occupied real estate     3,810       3,766       5,992       4,234       3,352       3,440       3,524  
Consumer     4,561       4,439       4,081       4,107       4,098       4,298       3,244  
Residential real estate:                            
Residential mortgage     12,574       10,625       9,704       9,336       9,134       6,251       7,063  
Residential construction                 156       159       163       168       174  
Total non-accrual loans     36,621       34,312       37,323       33,583       29,096       27,054       26,588  
Total restructured loans – accruing     2,287       2,133       2,479       1,942       2,224       1,663       2,678  
Total non-performing loans     40,126       37,693       40,113       36,014       33,307       28,835       29,392  
Other assets and real estate owned (OREO)     1,482       1,486       1,410       1,584       2,118       2,361       2,761  
Total non-performing assets   $ 41,608     $ 39,179     $ 41,523     $ 37,598     $ 35,425     $ 31,196     $ 32,153  
                             
    For the Quarter Ended,
    September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31,
(Dollars in thousands)    2019     2019     2019     2018     2018     2018     2018 
Analysis of Non-accrual Loan Activity:                            
Balance at beginning of period   $ 34,312     $ 37,323     $ 33,583     $ 29,096     $ 27,054     $ 26,588     $ 26,336  
Non-accrual balances transferred to OREO           (195 )                             (289 )
Non-accrual balances charged-off     (705 )     (604 )     (227 )     (360 )     (91 )     (144 )     (411 )
Net payments or draws     (2,903 )     (5,517 )     (1,786 )     (1,126 )     (1,777 )     (1,635 )     (357 )
Loans placed on non-accrual     6,015       3,396       6,202       5,973       4,193       2,245       1,309  
Non-accrual loans brought current     (98 )     (91 )     (449 )           (283 )            
Balance at end of period   $ 36,621     $ 34,312     $ 37,323     $ 33,583     $ 29,096     $ 27,054     $ 26,588  
                             
Analysis of Allowance for Loan Losses:                            
Balance at beginning of period   $ 54,024     $ 53,089     $ 53,486     $ 50,409     $ 48,493     $ 46,931     $ 45,257  
Provision (credit) for loan losses     1,524       1,633       (128 )     3,403       1,890       1,733       1,997  
Less loans charged-off, net of recoveries:                            
Commercial business     389       735       7       (9 )     (49 )     (73 )     322  
Commercial real estate:                            
Commercial AD&C     (224 )     (4 )                             (62 )
Commercial investor real estate     (3 )     (3 )     (7 )     109       (49 )     (8 )     (8 )
Commercial owner occupied real estate                                          
Consumer     187       (18 )     182       45       85       244       99  
Residential real estate:                            
Residential mortgage     209       (10 )     89       183       (11 )     13       (22 )
Residential construction     (2 )     (2 )     (2 )     (2 )     (2 )     (5 )     (6 )
Net charge-offs     556       698       269       326       (26 )     171       323  
Balance at end of period   $ 54,992     $ 54,024     $ 53,089     $ 53,486     $ 50,409     $ 48,493     $ 46,931  
                             
Asset Quality Ratios:                            
Non-performing loans to total loans     0.61 %     0.58 %     0.61 %     0.55 %     0.52 %     0.46 %     0.48 %
Non-performing assets to total assets     0.49 %     0.47 %     0.50 %     0.46 %     0.44 %     0.38 %     0.41 %
Allowance for loan losses to loans     0.83 %     0.82 %     0.81 %     0.81 %     0.79 %     0.78 %     0.77 %
Allowance for loan losses to non-performing loans     137.05 %     143.33 %     132.35 %     148.51 %     151.35 %     168.17 %     159.67 %
Annualized net charge-offs to average loans     0.03 %     0.04 %     0.02 %     0.02 %     0.00 %     0.01 %     0.02 %
                             
                         
Sandy Spring Bancorp, Inc. and Subsidiaries                        
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES – UNAUDITED            
                             
    Three Months Ended September 30,  
    2019     2018  
              Annualized             Annualized  
    Average   (1)   Average     Average   (1)   Average  
(Dollars in thousands and tax-equivalent)   Balances   Interest   Yield/Rate     Balances   Interest   Yield/Rate  
Assets                            
Residential mortgage loans   $ 1,215,132     $ 11,649     3.83 % $ 1,122,946     $ 10,485     3.73 %
Residential construction loans     162,196       1,746     4.27       215,578       2,160     3.98  
Total mortgage loans     1,377,328       13,395     3.89       1,338,524       12,645     3.77  
Commercial AD&C loans     651,905       9,705     5.91       632,354       9,185     5.76  
Commercial investor real estate loans     1,982,979       24,342     4.87       1,905,427       25,735     5.36  
Commercial owner occupied real estate loans     1,258,000       15,749     4.97       1,190,865       14,484     4.83  
Commercial business loans     786,150       10,350     5.22       700,791       9,196     5.21  
Total commercial loans     4,679,034       60,146     5.10       4,429,437       58,600     5.25  
Consumer loans     486,865       6,132     5.00       524,605       6,011     4.59  
Total loans (2)     6,543,227       79,673     4.84       6,292,566       77,256     4.88  
Loans held for sale     61,870       572     3.70       29,939       336     4.49  
Taxable securities     744,461       5,504     2.95       720,317       5,342     2.97  
Tax-exempt securities (3)     196,587       1,695     3.45       276,048       2,442     3.54  
Total investment securities (4)     941,048       7,199     3.06       996,365       7,784     3.12  
Interest-bearing deposits with banks     143,865       783     2.16       51,683       211     1.62  
Federal funds sold     619       2     1.42       1,983       8     1.58  
Total interest-earning assets     7,690,629       88,229     4.56       7,372,536       85,595     4.61  
                             
Less: allowance for loan losses     (54,147 )               (49,194 )          
Cash and due from banks     64,154                 64,653            
Premises and equipment, net     60,537                 62,452            
Other assets     609,616                 536,078            
Total assets   $ 8,370,789               $ 7,986,525            
                             
Liabilities and Stockholders’ Equity                            
Interest-bearing demand deposits   $ 749,720       545     0.29 % $ 703,905       231     0.13 %
Regular savings deposits     326,913       110     0.13       347,299       93     0.11  
Money market savings deposits     1,781,173       6,721     1.50       1,625,481       5,330     1.30  
Time deposits     1,638,072       8,956     2.17       1,284,376       5,119     1.58  
Total interest-bearing deposits     4,495,878       16,332     1.44       3,961,061       10,773     1.08  
Other borrowings     146,939       257     0.69       188,133       383     0.81  
Advances from FHLB     522,719       3,222     2.45       890,040       5,141     2.29  
Subordinated debentures     37,340       481     5.15       37,483       486     5.19  
Total interest-bearing liabilities     5,202,876       20,292     1.55       5,076,717       16,783     1.31  
                             
Noninterest-bearing demand deposits     1,909,884                 1,822,931            
Other liabilities     134,844                 56,710            
Stockholders’ equity     1,123,185                 1,030,167            
Total liabilities and stockholders’ equity $ 8,370,789               $ 7,986,525            
                             
Net interest income and spread       $ 67,937     3.01 %     $ 68,812     3.30 %
Less: tax-equivalent adjustment         1,147                 1,221        
Net interest income       $ 66,790               $ 67,591        
                             
Interest income/earning assets           4.56 %         4.61 %
Interest expense/earning assets           1.05             0.90  
Net interest margin           3.51 %         3.71 %
                             
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 26.13% for 2019 and 2018. The annualized taxable-equivalent adjustments utilized in
the above table to compute yields aggregated to $1.1 million and $1.2 million in 2019 and 2018, 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,  
    2019     2018  
              Annualized             Annualized  
    Average   (1)   Average     Average   (1)   Average  
(Dollars in thousands and tax-equivalent)   Balances   Interest   Yield/Rate     Balances   Interest   Yield/Rate  
Assets                            
Residential mortgage loans   $ 1,229,790     $ 35,408     3.84 % $ 1,091,515     $ 30,280     3.70 %
Residential construction loans     175,236       5,582     4.26       210,774       6,203     3.93  
Total mortgage loans     1,405,026       40,990     3.89       1,302,289       36,483     3.74  
Commercial AD&C loans     671,375       29,853     5.95       597,283       25,592     5.73  
Commercial investor real estate loans     1,969,599       74,428     5.05       1,939,205       71,824     4.95  
Commercial owner occupied real estate loans     1,227,327       44,975     4.90       1,106,032       39,051     4.72  
Commercial business loans     774,375       31,479     5.43       674,973       26,052     5.16  
Total commercial loans     4,642,676       180,735     5.20       4,317,493       162,519     5.03  
Consumer loans     502,476       18,797     5.00       531,539       17,310     4.41  
Total loans (2)     6,550,178       240,522     4.91       6,151,321       216,312     4.70  
Loans held for sale     39,107       1,145     3.91       30,349       983     4.32  
Taxable securities     752,518       17,169     3.04       738,580       15,891     2.87  
Tax-exempt securities (3)     219,510       5,827     3.54       290,177       7,662     3.52  
Total investment securities (4)     972,028       22,996     3.15       1,028,757       23,553     3.05  
Interest-bearing deposits with banks     83,981       1,405     2.24       86,446       1,082     1.67  
Federal funds sold     623       8     1.78       2,607       28     1.41  
Total interest-earning assets     7,645,917       266,076     4.65       7,299,480       241,958     4.43  
                             
Less: allowance for loan losses     (53,440 )               (47,533 )          
Cash and due from banks     64,227                 69,301            
Premises and equipment, net     61,039                 61,507            
Other assets     590,186                 535,778            
Total assets   $ 8,307,929               $ 7,918,533            
                             
Liabilities and Stockholders’ Equity                            
Interest-bearing demand deposits   $ 733,872       1,305     0.24 % $ 730,520       657     0.12 %
Regular savings deposits     330,377       321     0.13       390,231       488     0.17  
Money market savings deposits     1,710,520       19,617     1.53       1,520,953       13,028     1.15  
Time deposits     1,629,716       25,715     2.11       1,245,510       12,410     1.33  
Total interest-bearing deposits     4,404,485       46,958     1.43       3,887,214       26,583     0.91  
Other borrowings     158,279       945     0.80       158,939       599     0.50  
Advances from FHLB     689,224       13,389     2.60       1,000,060       15,557     2.08  
Subordinated debentures     37,376       1,462     5.22       37,518       1,436     5.11  
Total interest-bearing liabilities     5,289,364       62,754     1.59       5,083,731       44,175     1.16  
                             
Noninterest-bearing demand deposits     1,797,301                 1,757,573            
Other liabilities     122,564                 59,371            
Stockholders’ equity     1,098,700                 1,017,858            
Total liabilities and stockholders’ equity $ 8,307,929               $ 7,918,533            
                             
Net interest income and spread       $ 203,322     3.06 %     $ 197,783     3.27 %
Less: tax-equivalent adjustment         3,597                 3,483        
Net interest income       $ 199,725               $ 194,300        
                             
Interest income/earning assets           4.65 %         4.43 %
Interest expense/earning assets           1.10             0.81  
Net interest margin           3.55 %         3.62 %
                             
(1) Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 26.13% for 2019 and 2018. The annualized taxable-equivalent adjustments utilized in
the above table to compute yields aggregated to $3.6 million and $3.5 million in 2019 and 2018, 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.                        
                             

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