Sandy Spring Bancorp Reports Third Quarter Earnings of $16.2 Million
OLNEY, Md., Oct. 21, 2024 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc. (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income of $16.2 million ($0.36 per diluted common share) for the quarter ended September 30, 2024, compared to net income of $22.8 million ($0.51 per diluted common share) for the second quarter of 2024 and $20.7 million ($0.46 per diluted common share) for the third quarter of 2023.
Current quarter's core earnings were $17.9 million ($0.40 per diluted common share), compared to $24.4 million ($0.54 per diluted common share) for the quarter ended June 30, 2024 and $27.8 million ($0.62 per diluted common share) for the quarter ended September 30, 2023. Core earnings exclude the after-tax impact of amortization of intangibles, investment securities gains or losses and other non-recurring or extraordinary items. The current quarter's decline in net income and core earnings as compared to the linked quarter was driven by higher provision for credit losses combined with higher non-interest expense, partially offset by higher net interest income. The total provision for credit losses was $6.3 million for the third quarter of 2024 compared to $1.0 million for the previous quarter and $2.4 million for the third quarter of 2023.
"We have a solid capital position and are seeing ongoing success with our core deposit strategies and our wealth management lines of business," said Daniel J. Schrider, Chair, President & CEO of Sandy Spring Bank. "Our wealth teams - Sandy Spring Trust, and our subsidiaries, West Financial and RPJ - have an expanding number of referrals from current clients and work closely with business owners from early growth through maturity. The success of our wealth teams' approach is reflected in our strong fee income results."
Third Quarter Highlights
Total assets at September 30, 2024 increased by 3% to $14.4 billion compared to $14.0 billion at June 30, 2024.
Total loans remained level at $11.5 billion as of September 30, 2024 compared to June 30, 2024. During the current quarter, AD&C and commercial business loans and lines increased by $71.3 million and $19.4 million, respectively, while the commercial investor real estate segment declined by $64.9 million. Total residential mortgage and consumer loan portfolios remained relatively unchanged during this period.
Deposits increased by $397.5 million or 4% to $11.7 billion at September 30, 2024 compared to $11.3 billion at June 30, 2024, as interest-bearing deposits increased $425.8 million, while noninterest-bearing deposits declined $28.3 million. Strong growth in the interest-bearing deposit categories was mainly experienced within money market, time deposits and savings accounts, which grew by $185.2 million, $151.5 million, and $66.1 million, respectively, compared to the linked quarter. The decline in noninterest-bearing deposit categories was driven by lower balances in personal and small business checking accounts. Total deposits, excluding brokered deposits, increased by $351.7 million or 3% quarter-over-quarter and represented 94% of total deposits as of September 30, 2024.
The ratio of non-performing loans to total loans was 1.09% at September 30, 2024 compared to 0.81% at June 30, 2024 and 0.46% at September 30, 2023. The current quarter's increase in non-performing loans was mainly related to a single AD&C loan that was placed on non-accrual status during the current period. Net charge-offs for the current quarter totaled $0.7 million.
Net interest income for the third quarter of 2024 grew $1.1 million or 1% compared to the previous quarter and decreased by $3.7 million or 4% compared to the third quarter of 2023. Compared to the previous quarter, interest income increased by $5.0 million, while interest expense increased by $3.9 million.
The net interest margin was 2.44% for the third quarter of 2024 compared to 2.46% for the second quarter of 2024 and 2.55% for the third quarter of 2023. During the current quarter, the net interest margin was negatively impacted by a reversal of previously accrued uncollected interest income on a single large AD&C loan placed on a non-accrual status. Compared to the linked quarter, the rate paid on interest-bearing liabilities increased seven basis points, while the yield on interest-earning assets increased three basis points.
Provision for credit losses directly attributable to the funded loan portfolio was $6.3 million for the current quarter compared to $3.0 million in the previous quarter and $3.2 million in the prior year quarter. The current quarter's provision expense is mainly attributable to higher individual reserves on collateral-dependent loans, primarily related to a single AD&C loan due to the borrower-specific circumstances, partially offset by lower qualitative adjustments due to the reduction in commercial investor real estate loans. In addition, during the current quarter, the provision for unfunded commitments was insignificant compared to a credit of $1.9 million from the previous quarter.
Non-interest income for the third quarter of 2024 increased by 1% or $0.1 million compared to the linked quarter and grew by 13% or $2.3 million compared to the prior year quarter. The quarter-over-quarter increase was mainly driven by higher wealth management income and other income, generated by higher credit-related fees, which was fully offset by lower income from bank owned life insurance due to a receipt of one-time mortality proceeds during the prior quarter.
Non-interest expense for the third quarter of 2024 increased by $4.8 million compared to the second quarter of 2024 and $0.5 million compared to the prior year quarter. The quarterly increase in non-interest expense was primarily due to higher salaries and benefits along with an increase in professional fees and services.
Return on average assets ("ROA") for the quarter ended September 30, 2024 was 0.46% and return on average tangible common equity ("ROTCE") was 5.88% compared to 0.66% and 8.27%, respectively, for the second quarter of 2024 and 0.58% and 7.42%, respectively, for the third quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.50% and core ROTCE was 5.88% compared to 0.70% and 8.27%, respectively, for the previous quarter and 0.78% and 9.51%, respectively, for the third quarter of 2023.
The GAAP efficiency ratio was 72.12% for the third quarter of 2024, compared to 68.19% for the second quarter of 2024 and 70.72% for the third quarter of 2023. The non-GAAP efficiency ratio was 69.06% for the third quarter of 2024 compared to 65.31% for the second quarter of 2024 and 60.91% for the prior year quarter. The increase in non-GAAP efficiency ratio (reflecting a decrease in efficiency) in the current quarter compared to the previous quarter was the result of higher non-interest expense in the current quarter.
Balance Sheet and Credit Quality
Total assets were $14.4 billion at September 30, 2024, as compared to $14.0 billion at June 30, 2024. At September 30, 2024, total loans remained stable at $11.5 billion compared to the previous quarter. During this period, the growth in AD&C and commercial business loans and lines of $71.3 million or 6% and $19.4 million or 1%, respectively, were mostly offset by the decline in commercial investor real estate loans of $64.9 million or 1%. Total residential mortgage and consumer loan portfolios remained relatively unchanged.
Deposits increased $397.5 million or 4% to $11.7 billion at September 30, 2024 compared to $11.3 billion at June 30, 2024. During this period, noninterest-bearing deposits decreased $28.3 million or 1%, while interest-bearing deposits increased $425.8 million or 5%. The slight decline in noninterest-bearing deposit categories was driven by decreases in personal and small business checking accounts, partially offset by an increase in commercial checking accounts. Growth in interest-bearing deposits was seen across all product categories, but most notably in money market and time deposit accounts which grew $185.2 million or 7% and $151.5 million or 6% during the current quarter, respectively. Total deposits, excluding brokered deposits, increased by $351.7 million or 3% quarter-over-quarter and remained at 94% of the total deposits as of September 30, 2024 compared to June 30, 2024, reflecting continued strength and stability of the core deposit base. Total uninsured deposits at September 30, 2024 were approximately 37% of total deposits.
Total borrowings decreased $54.1 million or 6% at September 30, 2024 as compared to the previous quarter, primarily driven by a $50.0 million pay down of FHLB advances. At September 30, 2024, available unused sources of liquidity, which consist of available FHLB borrowings, fed funds, funds through the Federal Reserve Bank's discount window, as well as excess cash and unpledged investment securities, totaled $6.3 billion or 146% of uninsured deposits.
The tangible common equity to tangible assets ratio declined slightly to 8.83% at September 30, 2024, compared to 8.85% at June 30, 2024.
At September 30, 2024, the Company had a total risk-based capital ratio of 15.53%, a common equity tier 1 risk-based capital ratio of 11.27%, a tier 1 risk-based capital ratio of 11.27%, and a tier 1 leverage ratio of 9.59%. These risk-based capital ratios compare to a total risk-based capital ratio of 15.49%, a common equity tier 1 risk-based capital ratio of 11.28%, a tier 1 risk-based capital ratio of 11.28%, and a tier 1 leverage ratio of 9.70% at June 30, 2024. All of these ratios remain well in excess of the mandated minimum regulatory requirements.
Non-performing loans include non-accrual loans and accruing loans 90 days or more past due. At September 30, 2024, non-performing loans totaled $125.3 million, compared to $93.0 million at June 30, 2024 and $51.8 million at September 30, 2023. The non-performing loans to total loans ratio was 1.09% compared to 0.81% on a linked quarter basis. These levels of non-performing loans compare to 0.46% at September 30, 2023. The current quarter's increase in non-performing loans was mainly related to a single AD&C loan with the total outstanding principal balance of $28.0 million, which was placed on a non-accrual status during the current period. Total net charge-offs for the current quarter amounted to $0.7 million compared to $0.2 million for the second quarter of 2024 and $0.1 million for the third quarter of 2023.
At September 30, 2024, the allowance for credit losses was $131.4 million or 1.14% of outstanding loans and 105% of non-performing loans, compared to $125.9 million or 1.10% of outstanding loans and 135% of non-performing loans at the end of the previous quarter and $123.4 million or 1.09% of outstanding loans and 238% of non-performing loans at the end of the third quarter of 2023. The increase in the allowance for the current quarter compared to the previous quarter mainly reflects higher individual reserves on collateral-dependent non-accrual loans, primarily driven by the aforementioned AD&C lending relationship, partially offset by lower qualitative adjustments as a result of declines in commercial investor real estate loans.
Income Statement Review
Quarterly Results
Net income was $16.2 million ($0.36 per diluted common share) for the three months ended September 30, 2024 compared to $22.8 million ($0.51 per diluted common share) for the three months ended June 30, 2024 and $20.7 million ($0.46 per diluted common share) for the prior year quarter. The current quarter's core earnings were $17.9 million ($0.40 per diluted common share), compared to $24.4 million ($0.54 per diluted common share) for the previous quarter and $27.8 million ($0.62 per diluted common share) for the quarter ended September 30, 2023. The decreases in the current quarter's net income and core earnings compared to the previous quarter were driven primarily by higher provision for credit losses and non-interest expense.
Net interest income for the third quarter of 2024 increased $1.1 million or 1% compared to the previous quarter and declined $3.7 million or 4% compared to the third quarter of 2023. During the current quarter, interest income increased $5.0 million, while interest expense increased $3.9 million. The rising interest rate environment was primarily responsible for a $7.7 million year-over-year increase in interest income. This growth in interest income was more than offset by the $11.4 million year-over-year growth in interest expense as funding costs have also risen in response to the rising rate environment and significant competition for deposits.
The net interest margin was 2.44% for the third quarter of 2024 compared to 2.46% for the second quarter of 2024 and 2.55% for the third quarter of 2023. The decrease in the net interest margin during the current quarter was a result of a seven basis point increase in the rate paid on interest-bearing liabilities, while the yield earned on interest-earning assets rose three basis points. The current quarter's net interest margin was negatively impacted by approximately three basis points due to the reversal of previously accrued uncollected interest income on a single large AD&C loan placed on non-accrual status during the period. As compared to the prior year quarter, the yield on interest-earning assets increased 23 basis points while the rate paid on interest-bearing liabilities rose 39 basis points, resulting in net interest margin compression of 11 basis points. The rate and yield increases year-over-year were driven by the higher interest rate environment, competition for deposits in the market, and customer movement of excess funds out of noninterest-bearing accounts into higher yielding products.
The total provision for credit losses was $6.3 million for the third quarter of 2024 compared to $1.0 million for the previous quarter and $2.4 million for the third quarter of 2023. The provision for credit losses directly attributable to the funded loan portfolio was $6.3 million for the current quarter compared to $3.0 million for the second quarter of 2024 and $3.2 million for the third quarter of 2023. The current quarter's provision is mainly a reflection of higher individual reserves on collateral-dependent non-accrual loans, primarily associated with the provision on a single AD&C lending relationship based on the current fair value of the collateral, partially offset by lower qualitative adjustments driven by an overall reduction in commercial investor real estate loan portfolio. In addition, during the current quarter, the reserve for unfunded commitments remained relatively stable at $1.5 million.
Non-interest income for the third quarter of 2024 increased by 1% or $0.1 million compared to the linked quarter and grew by 13% or $2.3 million compared to the prior year quarter. The current quarter's increase in non-interest income as compared to the previous quarter was mainly driven by the $0.4 million increase in other income, generated by credit-related fees, and $0.3 million increase in wealth management income, due to the $352.1 million or 6% growth in assets under management quarter-over-quarter and the overall favorable market performance, offset by $0.5 million decrease in BOLI income, due to the receipt of one-time death proceeds in the prior quarter.
Non-interest expense for the third quarter of 2024 increased $4.8 million or 7% compared to the second quarter of 2024 and $0.5 million or 1% compared to the third quarter of 2023. The quarter-over-quarter increase is predominantly attributable to the $3.2 million increase in salaries and benefits, due to the increase in employee incentive compensation coupled with the $1.6 million increase in professional fees and services, mostly due to a one-time contract negotiation fee. The prior year quarter included $8.2 million of pension settlement expense related to the termination of the Company's pension plan. Excluding this item, non-interest expense for the third quarter of 2024 increased $8.6 million or 13% compared to the third quarter of 2023.
For the third quarter of 2024, the GAAP efficiency ratio was 72.12% compared to 68.19% for the second quarter of 2024 and 70.72% for the third quarter of 2023. The GAAP efficiency ratio rose from the prior year quarter primarily as a result of the 1% increase in GAAP non-interest expense coupled with the 1% decline in GAAP revenue. The non-GAAP efficiency ratio was 69.06% for the current quarter as compared to 65.31% for the second quarter of 2024 and 60.91% for the third quarter of 2023. The increase in the non-GAAP efficiency ratio (reflecting a decrease in efficiency) from the third quarter of the prior year to the current year quarter was primarily the result of the 12% increase in adjusted non-interest expense.
ROA for the quarter ended September 30, 2024 was 0.46% and ROTCE was 5.88% compared to 0.66% and 8.27%, respectively, for the second quarter of 2024 and 0.58% and 7.42%, respectively, for the third quarter of 2023. On a non-GAAP basis, the current quarter's core ROA was 0.50% and core ROTCE was 5.88% compared to 0.70% and 8.27% for the second quarter of 2024 and 0.78% and 9.51%, respectively, for the third quarter of 2023.
Year-to-Date Results
The Company recorded net income of $59.4 million for the nine months ended September 30, 2024 compared to net income of $96.7 million for the same period in the prior year. Core earnings were $64.3 million for the nine months ended September 30, 2024 compared to $107.2 million for the same period in the prior year. Year-to-date net income and core earnings declined as a result of lower net interest income in combination with higher provision for credit losses, which was partially offset by higher non-interest income.
For the nine months ended September 30, 2024, net interest income decreased $31.8 million compared to the prior year as a result of the $61.1 million increase in interest expense, partially offset by the $29.3 million increase in interest income. The increase in interest expense was driven by the interest expense on deposits, primarily associated with savings and time deposit accounts. The net interest margin declined to 2.44% for the nine months ended September 30, 2024, compared to 2.75% for the prior year, primarily as a result of higher funding costs due to the elevated interest rate environment and market competition for deposits during the period.
The provision for credit losses for the nine months ended September 30, 2024 was $9.7 million as compared to a credit of $14.1 million for 2023. The provision for the nine months ended September 30, 2024 was primarily due to an increase in individual reserves on collateral-dependent non-accrual loans, as well as adjustments applied to specific industries within the commercial real estate segment during the first quarter of 2024. The prior year's credit to provision was mainly attributable to the improving regional forecasted unemployment rate observed during the first half of 2023, and the declining probability of economic recession.
For the nine months ended September 30, 2024, non-interest income increased 14% to $57.7 million compared to $50.5 million for 2023. During the current year, wealth management income increased $3.7 million or 14%, as assets under management increased $1.0 billion or 19% year-over-year. In addition, BOLI mortality-related income and service charges on deposit accounts increased $1.3 million and $1.1 million, respectively.
Non-interest expense increased to $209.0 million for the nine months ended September 30, 2024, compared to $207.9 million for 2023. The drivers of the increase in non-interest expense were the $4.0 million increase in professional fees and services, $2.7 increase in amortization of intangible assets, $1.8 million increase in FDIC expense, and $1.2 million increase in outside data services. These year-over-year increases were offset by the $9.2 million decrease in compensation and benefits, as the prior year period included $8.2 million pension termination expense and $1.9 million of severance related expenses associated with staffing adjustments.
For the nine months ended September 30, 2024, the GAAP efficiency ratio was 69.98% compared to 64.29% for the same period in 2023. The non-GAAP efficiency ratio for the current year was 67.04% compared to 59.42% for the prior year. The growth in the current year's GAAP and non-GAAP efficiency ratios compared to the prior year, indicating a decline in efficiency, was the result of the declines in GAAP and non-GAAP revenues combined with the growth in GAAP and non-GAAP non-interest expenses.
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 goodwill and other intangible assets.
The non-GAAP efficiency ratio excludes amortization of intangible assets, investment securities gains/(losses), severance expense, contingent payment expense, and includes tax-equivalent income.
Core earnings and the related measures of core earnings per diluted common share, core return on average assets and core return on average tangible common equity reflect net income exclusive of amortization of intangible assets, investment securities gains/(losses) and other non-recurring or extraordinary items, on a net of tax basis.
Pre-tax pre-provision net income excludes income tax expense and the provision (credit) for credit losses.
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 that 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 Cancelled
As a result of today's announcement that the Company has entered into a merger agreement with Atlantic Union Bankshares Corporation, the Company has cancelled its conference call scheduled for 2:00 p.m. ET today to discuss the Company's results for the third quarter of 2024.
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 50 locations, the bank offers a broad range of commercial and retail banking, mortgage, private banking, and trust services throughout Maryland, Virginia, and Washington, D.C. Through its subsidiaries, Rembert Pendleton Jackson and West Financial Services, Inc., Sandy Spring Bank also offers a comprehensive menu of wealth management services.
Source: Sandy Spring Bancorp, Inc.Code: SASR-E
For additional information or questions, please contact:
Daniel J. Schrider, Chair, President & Chief Executive Officer, or
Charles S. Cullum, E.V.P. & Chief Financial Officer
Sandy Spring Bancorp
17801 Georgia Avenue
Olney, Maryland 20832
1-800-399-5919
Email:
Website: www.sandyspringbank.com
Media Contact:
Jennifer E. Schell, Division Executive, Marketing & Corporate Communications
301-774-6400 x8331
Forward-Looking Statements
Sandy Spring Bancorp's forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2023, 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 EndedSeptember 30,
Nine Months EndedSeptember 30,
(Dollars in thousands, except per share data)
2024
2023
%Change
2024
2023
%Change
Results of operations:
Net interest income
$
81,412
$
85,081
(4
)%
$
241,040
$
272,854
(12
)%
Provision/ (credit) for credit losses
6,316
2,365
167
%
9,724
(14,116
)
N/M
Non-interest income
19,715
17,391
13
57,669
50,518
14
Non-interest expense
72,937
72,471
1
209,047
207,912
1
Income before income tax expense
21,874
27,636
(21
)
79,938
129,576
(38
)
Net income
16,209
20,746
(22
)
59,388
96,744
(39
)
Net income attributable to common shareholders
$
16,205
$
20,719
(22
)
$
59,351
$
96,552
(39
)
Pre-tax pre-provision net income (1)
$
28,190
$
30,001
(6
)
$
89,662
$
115,460
(22
)
Return on average assets
0.46
%
0.58
%
0.56
%
0.92
%
Return on average common equity
4.01
%
5.35
%
4.99
%
8.50
%
Return on average tangible common equity (1)
5.88
%
7.42
%
7.17
%
11.67
%
Net interest margin
2.44
%
2.55
%
2.44
%
2.75
%
Efficiency ratio - GAAP basis (2)
72.12
%
70.72
%
69.98
%
64.29
%
Efficiency ratio - Non-GAAP basis (2)
69.06
%
60.91
%
67.04
%
59.42
%
Per share data:
Basic net income per common share
$
0.36
$
0.46
(22
)%
$
1.32
$
2.16
(39
)%
Diluted net income per common share
$
0.36
$
0.46
(22
)
$
1.31
$
2.15
(39
)
Weighted average diluted common shares
45,242,920
44,960,455
1
45,156,521
44,912,803
1
Dividends declared per share
$
0.34
$
0.34
—
$
1.02
$
1.02
—
Book value per common share
$
36.10
$
34.26
5
$
36.10
$
34.26
5
Tangible book value per common share (1)
$
27.37
$
25.80
6
$
27.37
$
25.80
6
Outstanding common shares
45,125,078
44,895,158
1
45,125,078
44,895,158
1
Financial condition at period-end:
Investment securities
$
1,440,488
$
1,392,078
3
%
$
1,440,488
$
1,392,078
3
%
Loans
11,491,921
11,300,292
2
11,491,921
11,300,292
2
Assets
14,383,073
14,135,085
2
14,383,073
14,135,085
2
Deposits
11,737,694
11,151,012
5
11,737,694
11,151,012
5
Stockholders' equity
1,628,837
1,537,914
6
1,628,837
1,537,914
6
Capital ratios:
Tier 1 leverage (3)
9.59
%
9.50
%
9.59
%
9.50
%
Common equity tier 1 capital to risk-weighted assets (3)
11.27
%
10.83
%
11.27
%
10.83
%
Tier 1 capital to risk-weighted assets (3)
11.27
%
10.83
%
11.27
%
10.83
%
Total regulatory capital to risk-weighted assets (3)
15.53
%
14.85
%
15.53
%
14.85
%
Tangible common equity to tangible assets (4)
8.83
%
8.42
%
8.83
%
8.42
%
Average equity to average assets
11.37
%
10.92
%
11.32
%
10.84
%
Credit quality ratios:
Allowance for credit losses to loans
1.14
%
1.09
%
1.14
%
1.09
%
Non-performing loans to total loans
1.09
%
0.46
%
1.09
%
0.46
%
Non-performing assets to total assets
0.89
%
0.37
%
0.89
%
0.37
%
Allowance for credit losses to non-performing loans
104.92
%
238.32
%
104.92
%
238.32
%
Annualized net charge-offs/ (recoveries) to average loans (5)
0.03
%
—
%
0.02
%
0.02
%
N/M - not meaningful
(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, pension settlement expense, severance expense and contingent payment expense from non-interest expense; and investment securities gains/ (losses) 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, 2024.
(4)
The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding goodwill and other intangible assets into stockholders' equity after deducting goodwill and other intangible assets. See the Reconciliation Table included with these Financial Highlights.
(5)
Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.
Sandy Spring Bancorp, Inc. and Subsidiaries RECONCILIATION TABLE - UNAUDITED (CONTINUED)OPERATING EARNINGS - METRICS
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
(Dollars in thousands)
2024
2023
2024
2023
Core earnings (non-GAAP):
Net income (GAAP)
$
16,209
$
20,746
$
59,388
$
96,744
Plus/ (less) non-GAAP adjustments (net of tax)(1):
Amortization of intangible assets
1,727
932
4,864
2,851
Severance expense
—
—
—
1,445
Pension settlement expense
—
6,088
—
6,088
Contingent payment expense
—
—
—
27
Core earnings (Non-GAAP)
$
17,936
$
27,766
$
64,252
$
107,155
Core earnings per diluted common share (non-GAAP):
Weighted average common shares outstanding - diluted (GAAP)
45,242,920
44,960,455
45,156,521
44,912,803
Earnings per diluted common share (GAAP)
$
0.36
$
0.46
$
1.31
$
2.15
Core earnings per diluted common share (non-GAAP)
$
0.40
$
0.62
$
1.42
$
2.39
Core return on average assets (non-GAAP):
Average assets (GAAP)
$
14,136,037
$
14,086,342
$
14,051,722
$
14,043,925
Return on average assets (GAAP)
0.46
%
0.58
%
0.56
%
0.92
%
Core return on average assets (non-GAAP)
0.50
%
0.78
%
0.61
%
1.02
%
Return/ Core return on average tangible common equity (non-GAAP):
Net Income (GAAP)
$
16,209
$
20,746
$
59,388
$
96,744
Plus: Amortization of intangible assets (net of tax)
1,727
932
4,864
2,851
Net income before amortization of intangible assets
$
17,936
$
21,678
$
64,252
$
99,595
Average total stockholders' equity (GAAP)
$
1,607,377
$
1,538,553
$
1,590,682
$
1,522,153
Average goodwill
(363,436
)
(363,436
)
(363,436
)
(363,436
)
Average other intangible assets, net
(30,679
)
(16,777
)
(29,940
)
(18,068
)
Average tangible common equity (non-GAAP)
$
1,213,262
$
1,158,340
$
1,197,306
$
1,140,649
Return on average tangible common equity (non-GAAP)
5.88
%
7.42
%
7.17
%
11.67
%
Core return on average tangible common equity (non-GAAP)
5.88
%
9.51
%
7.17
%
12.56
%
(1)
Tax adjustments have been determined using the combined marginal federal and state rate of 25.48% and 25.37% for 2024 and 2023, respectively.
Sandy Spring Bancorp, Inc. and Subsidiaries RECONCILIATION TABLE - UNAUDITED
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
(Dollars in thousands)
2024
2023
2024
2023
Pre-tax pre-provision net income:
Net income (GAAP)
$
16,209
$
20,746
$
59,388
$
96,744
Plus/ (less) non-GAAP adjustments:
Income tax expense
5,665
6,890
20,550
32,832
Provision/ (credit) for credit losses
6,316
2,365
9,724
(14,116
)
Pre-tax pre-provision net income (non-GAAP)
$
28,190
$
30,001
$
89,662
$
115,460
Efficiency ratio (GAAP):
Non-interest expense
$
72,937
$
72,471
$
209,047
$
207,912
Net interest income plus non-interest income
$
101,127
$
102,472
$
298,709
$
323,372
Efficiency ratio (GAAP)
72.12
%
70.72
%
69.98
%
64.29
%
Efficiency ratio (Non-GAAP):
Non-interest expense
$
72,937
$
72,471
$
209,047
$
207,912
Less non-GAAP adjustments:
Amortization of intangible assets
2,323
1,245
6,527
3,820
Severance expense
—
—
—
1,939
Pension settlement expense
—
8,157
—
8,157
Contingent payment expense
—
—
—
36
Non-interest expense - as adjusted
$
70,614
$
63,069
$
202,520
$
193,960
Net interest income plus non-interest income
$
101,127
$
102,472
$
298,709
$
323,372
Plus non-GAAP adjustment:
Tax-equivalent income
1,121
1,068
3,359
3,044
Less/ (plus) non-GAAP adjustment:
Investment securities gains/ (losses)
—
—
—
—
Net interest income plus non-interest income - as adjusted
$
102,248
$
103,540
$
302,068
$
326,416
Efficiency ratio (Non-GAAP)
69.06
%
60.91
%
67.04
%
59.42
%
Tangible common equity ratio:
Total stockholders' equity
$
1,628,837
$
1,537,914
$
1,628,837
$
1,537,914
Goodwill
(363,436
)
(363,436
)
(363,436
)
(363,436
)
Other intangible assets, net
(30,514
)
(16,035
)
(30,514
)
(16,035
)
Tangible common equity
$
1,234,887
$
1,158,443
$
1,234,887
$
1,158,443
Total assets
$
14,383,073
$
14,135,085
$
14,383,073
$
14,135,085
Goodwill
(363,436
)
(363,436
)
(363,436
)
(363,436
)
Other intangible assets, net
(30,514
)
(16,035
)
(30,514
)
(16,035
)
Tangible assets
$
13,989,123
$
13,755,614
$
13,989,123
$
13,755,614
Tangible common equity ratio
8.83
%
8.42
%
8.83
%
8.42
%
Outstanding common shares
45,125,078
44,895,158
45,125,078
44,895,158
Tangible book value per common share
$
27.37
$
25.80
$
27.37
$
25.80
Sandy Spring Bancorp, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED
(Dollars in thousands)
September 30,2024
December 31,2023
Assets
Cash and due from banks
$
109,583
$
82,257
Federal funds sold
—
245
Interest-bearing deposits with banks
640,763
463,396
Cash and cash equivalents
750,346
545,898
Residential mortgage loans held for sale (at fair value)
21,489
10,836
SBA loans held for sale
425
—
Investments held-to-maturity (fair values of $189,853 and $200,411 at September 30, 2024 and December 31, 2023, respectively)
220,296
236,165
Investments available-for-sale (at fair value)
1,149,056
1,102,681
Other investments, at cost
71,136
75,607
Total loans
11,491,921
11,366,989
Less: allowance for credit losses - loans
(131,428
)
(120,865
)
Net loans
11,360,493
11,246,124
Premises and equipment, net
57,249
59,490
Other real estate owned
3,265
—
Accrued interest receivable
45,162
46,583
Goodwill
363,436
363,436
Other intangible assets, net
30,514
28,301
Other assets
310,206
313,051
Total assets
$
14,383,073
$
14,028,172
Liabilities
Noninterest-bearing deposits
$
2,903,063
$
2,914,161
Interest-bearing deposits
8,834,631
8,082,377
Total deposits
11,737,694
10,996,538
Securities sold under retail repurchase agreements
70,767
75,032
Federal Reserve Bank borrowings
—
300,000
Advances from FHLB
450,000
550,000
Subordinated debt
371,251
370,803
Total borrowings
892,018
1,295,835
Accrued interest payable and other liabilities
124,524
147,657
Total liabilities
12,754,236
12,440,030
Stockholders' equity
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 45,125,078 and 44,913,561 at September 30, 2024 and December 31, 2023, respectively.
45,125
44,914
Additional paid in capital
748,202
742,243
Retained earnings
911,411
898,316
Accumulated other comprehensive loss
(75,901
)
(97,331
)
Total stockholders' equity
1,628,837
1,588,142
Total liabilities and stockholders' equity
$
14,383,073
$
14,028,172
Sandy Spring Bancorp, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
(Dollars in thousands, except per share data)
2024
2023
2024
