OLNEY, Md., Jan. 23, 2020 (GLOBE NEWSWIRE) -- Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, today reported net income for the fourth quarter of 2019 of $28.5 million ($0.80 per diluted share) compared to net income of $25.6 million ($0.72 per diluted share) for the fourth quarter of 2018 and net income of $29.4 million ($0.82 per diluted share) for the third quarter of 2019.

Net earnings for 2019 were $116.4 million ($3.25 per diluted share) compared to $100.9 million ($2.82 per diluted share) for 2018.  The results from 2019 and 2018 included recovered interest income from previously acquired impaired loans of $1.8 million and $2.4 million, respectively.  The results for 2018 also included the effect of merger expenses associated with the acquisition of WashingtonFirst Bankshares (“WashingtonFirst”) totaling $11.8 million (an after tax impact of $0.19 per share) compared to $1.3 million for 2019, which are associated with the pending acquisition of Revere Bank that is expected close in the beginning of the second quarter of 2020.  Revere Bank has 11 banking offices and more than $2.8 billion in assets (as of September 30, 2019). 

“We delivered a strong financial performance in 2019, which was our first full year following the successful integration of WashingtonFirst Bank. We rose to the occasion with record results and announced another wave of strategic expansion through the acquisitions of Revere Bank and Rembert Pendleton Jackson, a registered investment advisor headquartered in Falls Church, Virginia,” said Daniel J. Schrider, President and Chief Executive Officer.

“Throughout the year we adjusted our strategies in response to the competitive market and interest rate environment, while consistently growing deposits, delivering impressive fee-income growth, and staying laser focused on providing exceptional experiences for the individuals and businesses we serve,” added Schrider. “We finished the year on a high note and the momentum from our fourth quarter performance will serve us well in 2020.”

Fourth Quarter Highlights:  

  • Total loans at December 31, 2019 increased 2% compared to December 31, 2018.   During this period, the Company experienced 7% growth in total commercial loans as investor real estate loans and owner occupied real estate loans grew by 11% and 7%, respectively.  The impact of commercial loan growth 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 and the decline in consumer loan balances. 
     
  • Total deposits grew 9% compared to the end of 2018. Deposit growth reduced the loan-to-deposit ratio to 104% at the end of 2019 compared to 111% at the end of 2018.  The year-over-year deposit growth included an 8% increase in noninterest-bearing deposits, a 13% increase in core interest-bearing deposits and a 38% reduction in wholesale deposits.
     
  • The provision for loan losses for the current quarter was $1.7 million compared to $3.4 million for the fourth quarter of 2018 and $1.5 million for the prior quarter of the current year.
     
  • Preparation for the implementation of the Current Expected Credit Losses (“CECL”) accounting standard in the first quarter of 2020 has been completed.  Exclusive of the $2.8 million reclassification to the allowance for loan losses related to the acquired credit impaired loans, the estimated impact to retained earnings at transition date is expected to be approximately $2.0 million based on the expected performance of the economy. 
     
  • During the quarter, the Company repurchased 668,191 shares of common stock at an average price of $36.34 per share as part of its existing share repurchase program.
     
  • The net interest margin was 3.38% for the fourth quarter of 2019, compared to 3.57% for the fourth quarter of 2018 and 3.51% for the third quarter of 2019. 
     
  • The Company successfully issued $175 million in subordinated debt at an advantageous rate during the quarter.  The debt provides capital to support future growth in the real estate lending portfolio and fund anticipated future redemptions of existing higher priced funding sources.
     
  • Driven by income from mortgage banking activities, wealth management and fees related to customer level commercial loan swaps, quarterly non-interest income increased 37% as compared to the same period in the prior year.  Income from mortgage banking activities grew 269% compared to the same quarter of the prior year.
     
  • Non-interest expense for the quarter increased $3.4 million or 8% 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, merger costs and professional fees and services.  A portion of the non-interest expense increases were offset by the decrease in FDIC insurance expense due to the application of the remaining assessment credit during the current quarter.
     
  • The non-GAAP efficiency ratio was 51.98% for the current quarter as compared to 51.78% for the fourth quarter of 2018 and 50.95% for the third quarter of 2019.

Review of Balance Sheet and Credit Quality

At December 31, 2019, total assets amounted to $8.6 billion compared to $8.2 billion at December 31, 2018. Total loans were $6.7 billion at December 31, 2019 compared to $6.6 billion at the end of 2018.  During this period, the composition of the portfolio shifted as total commercial loans grew 7% while mortgage loans have declined 8% due to the refinance activity and the strategic decision to sell the majority of new mortgage loan production. Consumer loans experienced a 10% decline related to recent mortgage refinancing activity.  During this period, total funded commercial loan production was a record $884 million.  Commercial loans originated during the current year had total unfunded commitments of $479 million as of December 31, 2019. 

Total deposits at December 31, 2019 were $6.4 billion compared to $5.9 billion at December 31, 2018, a 9% increase during the period.  The increase from year-end 2018 was driven by increases in non-interest bearing demand, interest-bearing demand and money market deposit categories.  The impact of the increase in rates associated with these additional deposits during 2019 was partially offset by the benefit realized from an increase in noninterest-bearing deposits and a reduction in wholesale deposits. During the current quarter, the Company issued $175 million in subordinated debt. The proceeds from the debt provides capital for future growth in the real estate lending portfolio, in addition to providing funds to reduce higher priced funding sources. 

Tangible common equity totaled $782 million at December 31, 2019, compared to $727 million at December 31, 2018 as the ratio of tangible common equity to tangible assets grew to 9.46% at December 31, 2019, as compared to 9.21% at December 31, 2018.  The decline in the tangible common equity ratio from 9.74% at the end of the prior quarter was the result of the impact on stockholder’s equity of stock repurchases in the current quarter.  The Company had a total risk-based capital ratio of 14.85%, a common equity tier 1 risk-based capital ratio of 11.06%, a tier 1 risk-based capital ratio of 11.21% and a tier 1 leverage ratio of 9.70% at December 31, 2019.

The ratio of non-performing loans to total loans increased to 0.62% at December 31, 2019, compared to 0.55% at December 31, 2018.  Non-performing loans totaled $41.3 million at December 31, 2019, compared to $36.0 million at December 31, 2018, and $40.1 million at September 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.

Loan charge-offs, net of recoveries, for the fourth quarter of 2019 totaled $0.5 million as compared to $0.3 million for the fourth quarter of 2018.  The allowance for loan losses represented 0.84% of outstanding loans and 136% of non-performing loans at December 31, 2019, compared to 0.81% of outstanding loans and 149% of non-performing loans at December 31, 2018. While non-performing loans increased from the prior year-end to December 31, 2019, the related reserves for those loans remained stable due to adequate collateral values. 

Income Statement Review

For the fourth quarter of 2019, net interest income decreased 1% to $65.6 million compared to $66.1 million for the fourth quarter of 2018.  Interest income remained level while interest expense increased 2% driven by deposit growth.  The rise in interest expense was partially offset by the decline in the cost of borrowings from the prior year quarter to the current quarter.

The net interest margin for the current quarter was 3.38%, compared to the net interest margin for the fourth quarter of 2018 of 3.57%.  The current quarter’s margin benefited from the decrease in average borrowed funds and their associated rates as this decrease offset the increase in the average rate paid on deposits.  The average rate on interest-bearing liabilities remained at 1.48% for the quarter ended December 31, 2019 compared to the same quarter of the prior year.  During this same period, the yield on interest-earning assets declined from 4.60% for the quarter ended December 31, 2018 to 4.38% for the quarter ended December 31, 2019 due to the interest rate environment, resulting in margin compression.  The 9% increase in average noninterest-bearing deposits compared to the prior year quarter provided an interest free funding source that benefited the current quarter’s net interest margin.  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 12 basis points for the same period of the prior year.  The resulting adjusted net interest margin for the current quarter was 3.34% as compared to 3.45% for the prior year quarter.

The provision for loan losses was $1.7 million for the fourth quarter of 2019, compared to $3.4 million for the fourth quarter of 2018. The decline in the loan loss provision for the current quarter compared to the prior year quarter reflects the impact of the decline in the amount of loans subject to the allowance for loan losses. 

Non-interest income increased 37% to $19.2 million for the fourth quarter of 2019, compared to $14.0 million for the fourth quarter of 2018.  The increase in non-interest income was due primarily to the 269% increase in income from mortgage banking activities, as the volume of residential mortgages sold increased.  In addition, wealth management income increased 17% and other income rose 58% due to fees from customer level commercial loan swaps during this period.

Non-interest expense increased 8% to $46.1 million for the fourth quarter of 2019, compared to $42.7 million in the fourth quarter of 2018. The current year quarter included $0.9 million in merger expenses.  Excluding merger expenses, non-interest expense increased 6% compared to the prior year, driven by higher compensation costs associated with incentive-based sales programs and professional fees and services.  A portion of these increases were offset by the decrease in FDIC insurance as a result of the application of the remaining assessment credit during the current quarter.  The non-GAAP efficiency ratio was 51.98% for the fourth quarter of 2019, compared to 51.78% for the fourth quarter of 2018. 

Net interest income for the full year of 2019 increased 2% compared to 2018 due principally to loan growth. The net interest margin for 2019 was 3.51% compared to 3.60% for the prior year. The year ended December 31, 2019 included $1.8 million in recovered interest income on acquired credit impaired loans compared to $2.4 million for the same period of the prior year.  Excluding the recovered interest income from both periods, the interest margin would have been 3.48% for the current year versus 3.58% for the prior year.  Amortization of the fair value adjustments had a 5 basis point positive impact on the net interest margin for 2019, compared to 13 basis point positive impact for the prior year. 

The provision for loan losses was $4.7 million for the year ended December 31, 2019, compared to $9.0 million for 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 increased 17% to $71.3 million for 2019, compared to $61.1 million for 2018.  Excluding life insurance mortality proceeds of $0.6 million and $1.6 million in 2019 and 2018, respectively, non-interest income increased 19%. This increase was driven by income from mortgage banking activities, which increased 108% from the prior year, to $14.7 million for the year ended December 31, 2019, as a result of the rise in mortgage lending activity during the year. Sales of originated mortgage loans rose 74% during 2019 compared to 2018.  Excluding income from bank owned life insurance, increases occurred in the majority of the other categories of non-interest income.

Non-interest expense decreased $0.7 million to $179.1 million for 2019, compared to $179.8 million for the prior year.  The prior year included $11.8 million in merger expenses compared to $1.3 million for the current year.  Excluding merger expenses, non-interest expense rose 6%, driven primarily by increases in salaries and benefits. Increases in non-interest expense also occurred in occupancy and equipment costs, software and outside data services, professional fees and marketing.  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 51.52% for 2019 compared to 50.87% for 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 fourth quarter results today at 2:00 P.M. (ET).  A live Webcast of the conference call is available through the Investor Relations section of the Sandy Spring Website at www.sandyspringbank.com.  Participants may call 1-866-235-9910. A password is not necessary.  Visitors to the website are advised to log on 10 minutes ahead of the scheduled start of the call.  An internet-based replay will be available on the website until 9:00 am (ET) February 6, 2020.  A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10137689.

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 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:DSchrider@sandyspringbank.com
 PMantua@sandyspringbank.com
 Website:www.sandyspringbank.com 
  
Media Contact:
Jen Schell
301-570-8331
jschell@sandyspringbank.com
 

Forward-Looking Statements

Sandy Spring Bancorp 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    Twelve Months Ended   
  December 31, %  December 31, % 
(Dollars in thousands, except per share data) 2019 2018 Change  2019 2018 Change 
Results of Operations:              
Net interest income $ 65,583 $66,145 (1)% $ 265,308 $260,445 2 %
Provision for loan losses  1,655  3,403 (51)   4,684  9,023 (48) 
Non-interest income  19,224  14,030 37    71,322  61,049 17  
Non-interest expense  46,081  42,667 8    179,085  179,783 -  
Income before income taxes  37,071  34,105 9    152,861  132,688 15  
Net income  28,457  25,566 11    116,433  100,864 15  
                     
Pre-tax pre-provision pre-merger income (1) $ 39,674 $37,508 6   $ 158,857 $153,477 4  
                     
Return on average assets  1.32% 1.25%     1.39% 1.27%   
Return on average common equity  9.93% 9.70%     10.51% 9.84%   
Net interest margin  3.38% 3.57%     3.51% 3.60%   
Efficiency ratio - GAAP basis (2)  54.34% 53.22%     53.20% 55.92%   
Efficiency ratio - Non-GAAP basis (2)  51.98% 51.78%     51.52% 50.87%   
                     
Per share data:                    
Basic net income $ 0.80 $0.72 11 % $ 3.25 $2.82 15 %
Diluted net income $ 0.80 $0.72 11   $ 3.25 $2.82 15  
Average fully diluted shares  35,773,246  35,747,478 -    35,852,846  35,728,146 -  
Dividends declared per share $ 0.30 $0.28 7   $ 1.18 $1.10 7  
Book value per share  32.40  30.06 8    32.40  30.06 8  
Tangible book value per share (1)  22.37  20.45 9    22.37  20.45 9  
Outstanding shares  34,970,370  35,530,734 (2)   34,970,370  35,530,734 (2) 
                     
Financial Condition at period-end:                    
Investment securities $ 1,125,136 $1,010,724 11 % $ 1,125,136 $1,010,724 11 %
Loans  6,705,232  6,573,014 2    6,705,232  6,573,014 2  
Interest-earning assets  7,947,703  7,640,978 4    7,947,703  7,640,978 4  
Assets  8,629,002  8,243,272 5    8,629,002  8,243,272 5  
Deposits  6,440,319  5,914,880 9    6,440,319  5,914,880 9  
Interest-bearing liabilities  5,485,055  5,378,026 2    5,485,055  5,378,026 2  
Stockholders' equity  1,132,974  1,067,903 6    1,132,974  1,067,903 6  
                     
Capital ratios:                    
Tier 1 leverage (3)  9.70% 9.50%     9.70% 9.50%   
Tier 1 capital to risk-weighted assets (3)  11.21% 11.06%     11.21% 11.06%   
Total regulatory capital to risk-weighted assets (3)  14.85% 12.26%     14.85% 12.26%   
Common equity tier 1 capital to risk-weighted assets (3)  11.06% 10.90%     11.06% 10.90%   
Tangible common equity to tangible assets (4)  9.46% 9.21%     9.46% 9.21%   
Average equity to average assets  13.31% 12.90%     13.25% 12.87%   
                     
Credit quality ratios:                    
Allowance for loan losses to loans  0.84% 0.81%     0.84% 0.81%   
Non-performing loans to total loans  0.62% 0.55%     0.62% 0.55%   
Non-performing assets to total assets  0.50% 0.46%     0.50% 0.46%   
Allowance for loan losses to non-performing loans  136.02% 148.51%     136.02% 148.51%   
Annualized net charge-offs to average loans (5)  0.03% 0.02%     0.03% 0.01%   
                     
(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 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.
(3) Estimated ratio at December 31, 2019              
(4) The tangible common equity to tangible assets ratio is a non-GAAP ratio that divides assets excluding intangible assets into stockholders' equity after deducting intangible assets
 and other comprehensive gains (losses). See the Reconciliation Table included with these Financial Highlights.
(5) Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.            
               


Sandy Spring Bancorp, Inc. and Subsidiaries                
RECONCILIATION TABLE - UNAUDITED                
                 
  Three Months Ended Twelve Months Ended
  December 31, December 31,
(Dollars in thousands)  2019   2018   2019   2018 
Pre-tax pre-provision pre-merger income:                
Net income $ 28,457  $25,566  $ 116,433  $100,864 
Plus non-GAAP adjustments:                
Merger expenses  948   -   1,312   11,766 
Income taxes  8,614   8,539   36,428   31,824 
Provision for loan losses  1,655   3,403   4,684   9,023 
Pre-tax pre-provision pre-merger income $ 39,674  $37,508  $ 158,857  $153,477 
                 
Efficiency ratio - GAAP basis:                
Non-interest expense $ 46,081  $42,667  $ 179,085  $179,783 
                 
Net interest income plus non-interest income $ 84,807  $80,175  $ 336,630  $321,494 
                 
Efficiency ratio - GAAP basis  54.34%  53.22%  53.20%  55.92%
                 
                 
Efficiency ratio - Non-GAAP basis:                
Non-interest expense $ 46,081  $42,667  $ 179,085  $179,783 
Less non-GAAP adjustments:                
Amortization of intangible assets  481   540   1,946   2,162 
Merger expenses  948   -   1,312   11,766 
Non-interest expense - as adjusted $ 44,652  $42,127  $ 175,827  $165,855 
                 
Net interest income plus non-interest income $ 84,807  $80,175  $ 336,630  $321,494 
Plus non-GAAP adjustment:                
Tax-equivalent income  1,149   1,232   4,746   4,715 
Less non-GAAP adjustment:                
Securities gains  57   45   77   190 
Net interest income plus non-interest income - as adjusted $ 85,899  $81,362  $ 341,299  $326,019 
                 
Efficiency ratio - Non-GAAP basis  51.98%  51.78%  51.52%  50.87%
                 
Tangible common equity ratio:                
Total stockholders' equity $ 1,132,974  $1,067,903  $ 1,132,974  $1,067,903 
Accumulated other comprehensive loss  4,332   15,754   4,332   15,754 
Goodwill  (347,149)  (347,149)  (347,149)  (347,149)
Other intangible assets, net  (7,841)  (9,788)  (7,841)  (9,788)
Tangible common equity $ 782,316  $726,720  $ 782,316  $726,720 
                 
Total assets $ 8,629,002  $8,243,272  $ 8,629,002  $8,243,272 
Goodwill  (347,149)  (347,149)  (347,149)  (347,149)
Other intangible assets, net  (7,841)  (9,788)  (7,841)  (9,788)
Tangible assets $ 8,274,012  $7,886,335  $ 8,274,012  $7,886,335 
                 
Tangible common equity ratio  9.46%  9.21%  9.46%  9.21%
                 
Outstanding common shares  34,970,370   35,530,734   34,970,370   35,530,734 
Tangible book value per common share $ 22.37  $20.45  $ 22.37  $20.45 
                 


Sandy Spring Bancorp, Inc. and Subsidiaries    
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION - UNAUDITED    
     
  December 31, December 31,
(Dollars in thousands)  2019   2018 
Assets        
Cash and due from banks $ 82,469  $67,014 
Federal funds sold  208   609 
Interest-bearing deposits with banks  63,426   33,858 
Cash and cash equivalents  146,103   101,481 
Residential mortgage loans held for sale (at fair value)  53,701   22,773 
Investments available-for-sale (at fair value)  1,073,333   937,335 
Other equity securities  51,803   73,389 
Total loans  6,705,232   6,571,634 
Less: allowance for loan losses  (56,132)  (53,486)
Net loans  6,649,100   6,518,148 
Premises and equipment, net  58,615   61,942 
Other real estate owned  1,482   1,584 
Accrued interest receivable  23,282   24,609 
Goodwill  347,149   347,149 
Other intangible assets, net  7,841   9,788 
Other assets  216,593   145,074 
Total assets $ 8,629,002  $8,243,272 
         
Liabilities        
Noninterest-bearing deposits $ 1,892,052  $1,750,319 
Interest-bearing deposits  4,548,267   4,164,561 
Total deposits  6,440,319   5,914,880 
Securities sold under retail repurchase agreements and federal funds purchased  213,605   327,429 
Advances from FHLB  513,777   848,611 
Subordinated debentures  209,406   37,425 
Accrued interest payable and other liabilities  118,921   47,024 
Total liabilities  7,496,028   7,175,369 
         
Stockholders' Equity        
Common stock -- par value $1.00; shares authorized 100,000,000; shares issued and outstanding 34,970,370 and        
35,530,734 at December 31, 2019 and December 31, 2018, respectively  34,970   35,531 
Additional paid in capital  586,622   606,573 
Retained earnings  515,714   441,553 
Accumulated other comprehensive loss  (4,332)  (15,754)
Total stockholders' equity  1,132,974   1,067,903 
Total liabilities and stockholders' equity $ 8,629,002  $8,243,272 
     


Sandy Spring Bancorp, Inc. and Subsidiaries        
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED      
         
  Three Months Ended Twelve Months Ended
  December 31,December 31,
(Dollars in thousands, except per share data) 2019 2018 2019 2018
Interest Income:            
Interest and fees on loans $ 77,522 $78,081 $ 316,550 $293,131
Interest on loans held for sale  462  262  1,607  1,245
Interest on deposits with banks  724  222  2,129  1,304
Interest and dividends on investment securities:            
Taxable  5,437  5,219  21,739  20,516
Exempt from federal income taxes  1,243  1,820  5,834  7,855
Interest on federal funds sold  2  3  10  31
Total interest income  85,390  85,607  347,869  324,082
Interest Expense:            
Interest on deposits  14,723  12,556  61,681  39,139
Interest on retail repurchase agreements and federal funds purchased  216  570  1,161  1,169
Interest on advances from FHLB  3,189  5,851  16,578  21,408
Interest on subordinated debt  1,679  485  3,141  1,921
Total interest expense  19,807  19,462  82,561  63,637
Net interest income  65,583  66,145  265,308  260,445
Provision for loan losses  1,655  3,403  4,684  9,023
Net interest income after provision for loan losses  63,928  62,742  260,624  251,422
Non-interest Income:            
Investment securities gains  57  45  77  190
Service charges on deposit accounts  2,427  2,459  9,692  9,324
Mortgage banking activities  4,170  1,130  14,711  7,073
Wealth management income  6,401  5,492  22,669  21,284
Insurance agency commissions  1,331  1,138  6,612  6,158
Income from bank owned life insurance  660  663  3,165  4,327
Bank card fees  1,435  1,368  5,616  5,567
Other income  2,743  1,735  8,780  7,126
Total non-interest income  19,224  14,030  71,322  61,049
Non-interest Expense:            
Salaries and employee benefits  26,251  23,934  103,950  96,998
Occupancy expense of premises  4,663  4,413  19,470  18,352
Equipment expenses  2,791  2,426  10,720  9,335
Marketing  1,085  1,061  4,456  3,924
Outside data services  1,854  1,763  7,567  6,603
FDIC insurance  123  1,255  2,260  5,095
Amortization of intangible assets  481  540  1,946  2,162
Merger expenses  948  -  1,312  11,766
Professional fees and services  2,553  1,966  6,978  6,056
Other expenses  5,332  5,309  20,426  19,492
Total non-interest expense  46,081  42,667  179,085  179,783
Income before income taxes  37,071  34,105  152,861  132,688
Income tax expense  8,614  8,539  36,428  31,824
Net income $ 28,457 $25,566 $ 116,433 $100,864
             
Net Income Per Share Amounts:            
Basic net income per share $ 0.80 $0.72 $ 3.25 $2.82
Diluted net income per share $ 0.80 $0.72 $ 3.25 $2.82
Dividends declared per share $ 0.30 $0.28 $ 1.18 $1.10
             


Sandy Spring Bancorp, Inc. and Subsidiaries                
HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED            
                 
   2019   2018 
(Dollars in thousands, except per share data) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Profitability for the Quarter:                
Tax-equivalent interest income $ 86,539  $88,229  $88,423  $89,424  $86,839  $85,595  $79,774  $76,589 
Interest expense  19,807   20,292   21,029   21,433   19,462   16,783   14,779   12,613 
Tax-equivalent net interest income  66,732   67,937   67,394   67,991   67,377   68,812   64,995   63,976 
Tax-equivalent adjustment  1,149   1,147   1,209   1,241   1,232   1,221   1,177   1,085 
Provision (credit) for loan losses  1,655   1,524   1,633   (128)  3,403   1,890   1,733   1,997 
Non-interest income  19,224   18,573   16,556   16,969   14,030   15,033   14,868   17,118 
Non-interest expense  46,081   44,925   43,887   44,192   42,667   42,393   45,082   49,641 
Income before income taxes  37,071   38,914   37,221   39,655   34,105   38,341   31,871   28,371 
Income tax expense  8,614   9,531   8,945   9,338   8,539   9,107   7,472   6,706 
Net income $ 28,457  $29,383  $28,276  $30,317  $25,566  $29,234  $24,399  $21,665 
Financial Performance:                
Pre-tax pre-provision pre-merger income $ 39,674  $40,802  $38,854  $39,527  $37,508  $40,811  $35,832  $39,326 
Return on average assets  1.32%  1.39%  1.37%  1.49%  1.25%  1.45%  1.23%  1.12%
Return on average common equity  9.93%  10.38%  10.32%  11.46%  9.70%  11.26%  9.66%  8.70%
Net interest margin  3.38%  3.51%  3.54%  3.60%  3.57%  3.71%  3.56%  3.58%
Efficiency ratio - GAAP basis (1)  54.34%  52.63%  53.04%  52.79%  53.22%  51.31%  57.29%  62.04%
Efficiency ratio - Non-GAAP basis (1)  51.98%  50.95%  51.71%  51.44%  51.78%  49.27%  52.98%  49.54%
Per Share Data:                
Basic net income per share $ 0.80  $0.82  $0.79  $0.85  $0.72  $0.82  $0.68  $0.61 
Diluted net income per share $ 0.80  $0.82  $0.79  $0.85  $0.72  $0.82  $0.68  $0.61 
Average fully diluted shares  35,773,246   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  $0.30  $0.28  $0.28  $0.28  $0.28  $0.26 
Non-interest Income:                
Securities gains $ 57  $15  $5  $-  $45  $82  $-  $63 
Service charges on deposit accounts  2,427   2,516   2,442   2,307   2,459   2,316   2,290   2,259 
Mortgage banking activities  4,170   4,408   3,270   2,863   1,130   1,672   2,064   2,207 
Wealth management income  6,401   5,493   5,539   5,236   5,492   5,344   5,387   5,061 
Insurance agency commissions  1,331   2,116   1,265   1,900   1,138   2,016   1,180   1,824 
Income from bank owned life insurance  660   662   654   1,189   663   663   670   2,331 
Bank card fees  1,435   1,462   1,467   1,252   1,368   1,436   1,393   1,370 
Other income  2,743   1,901   1,914   2,222   1,735   1,504   1,884   2,003 
Total Non-interest Income $ 19,224  $18,573  $16,556  $16,969  $14,030  $15,033  $14,868  $17,118 
Non-interest Expense:                
Salaries and employee benefits $ 26,251  $26,234  $25,489  $25,976  $23,934  $24,488  $24,664  $23,912 
Occupancy expense of premises  4,663   4,816   4,760   5,231   4,413   4,355   4,642   4,942 
Equipment expenses  2,791   2,641   2,712   2,576   2,426   2,441   2,243   2,225 
Marketing  1,085   1,541   887   943   1,061   770   945   1,148 
Outside data services  1,854   1,973   1,962   1,778   1,763   1,736   1,707   1,397 
FDIC insurance  123   (83)  1,084   1,136   1,255   1,257   1,390   1,193 
Amortization of intangible assets  481   491   483   491   540   540   541   541 
Merger expenses  948   364   -   -   -   580   2,228   8,958 
Professional fees and services  2,553   1,546   1,634   1,245   1,966   1,351   1,699   1,040 
Other expenses  5,332   5,402   4,876   4,816   5,309   4,875   5,023   4,285 
Total Non-interest Expense $ 46,081  $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) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Balance Sheets at Quarter End:                
Residential mortgage loans $ 1,149,327  $1,199,275  $1,241,081  $1,249,968  $1,228,247  $1,181,427  $1,106,674  $992,287 
Residential construction loans  146,279   150,692   171,106   176,388   186,785   188,779   197,372   215,445 
Commercial AD&C loans  684,010   678,906   658,709   688,939   681,201   631,589   609,266   564,871 
Commercial investor real estate loans  2,169,156   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  1,288,677   1,278,505   1,224,986   1,216,713   1,202,903   1,201,673   1,184,421   1,174,739 
Commercial business loans  801,019   772,619   772,158   769,660   796,264   738,083   702,939   652,797 
Consumer loans  466,764   480,530   489,176   505,443   517,839   523,011   525,574   532,973 
Total loans  6,705,232   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  (56,132)  (54,992)  (54,024)  (53,089)  (53,486)  (50,409)  (48,493)  (46,931)
Loans held for sale  53,701   78,821   50,511   24,998   22,773   31,581   40,000   28,486 
Investment securities  1,125,136   946,210   955,715   987,299   1,010,724   992,797   1,017,274   1,040,339 
Interest-earning assets  7,947,703   7,742,138   7,713,364   7,648,654   7,639,598   7,428,534   7,532,664   7,285,731 
Total assets  8,629,002   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  1,892,052   2,081,435   2,023,614   1,813,708   1,750,319   1,902,537   1,910,690   1,767,523 
Total deposits  6,440,319   6,493,899   6,389,749   6,224,523   5,914,880   5,898,394   5,837,826   5,627,206 
Customer repurchase agreements  138,605   126,008   150,604   122,626   137,429   142,669   139,647   149,323 
Total interest-bearing liabilities  5,485,055   5,093,265   5,136,860   5,297,108   5,378,026   5,042,431   5,168,055   5,057,645 
Total stockholders' equity  1,132,974   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 $ 1,169,623  $1,215,132  $1,244,086  $1,230,319  $1,188,135  $1,122,946  $1,034,062  $1,117,478 
Residential construction loans  149,690   162,196   174,095   189,720   202,710   215,578   223,171   193,327 
Commercial AD&C loans  695,817   651,905   686,282   676,205   647,115   632,354   576,076   582,876 
Commercial investor real estate loans  2,092,478   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  1,274,782   1,258,000   1,215,632   1,207,799   1,196,506   1,190,865   1,184,409   940,065 
Commercial business loans  765,159   786,150   756,594   780,318   751,754   700,791   666,280   657,372 
Consumer loans  477,572   486,865   505,235   515,644   522,453   524,605   531,965   538,198 
Total loans  6,625,121   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  50,208   61,870   37,121   17,846   21,923   29,939   25,403   35,768 
Investment securities  1,002,692   941,048   964,863   1,010,940   986,146   996,365   1,028,306   1,062,325 
Interest-earning assets  7,859,836   7,690,629   7,619,240   7,627,187   7,495,338   7,372,536   7,311,272   7,212,878 
Total assets  8,542,837   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  1,927,063   1,909,884   1,796,802   1,682,720   1,766,672   1,822,931   1,796,644   1,651,258 
Total deposits  6,459,551   6,405,762   6,247,409   5,952,942   5,822,580   5,783,992   5,657,420   5,489,715 
Customer repurchase agreements  126,596   138,736   141,865   129,059   146,637   139,809   148,539   136,694 
Total interest-bearing liabilities  5,326,303   5,202,876   5,269,209   5,403,946   5,230,254   5,076,717   5,058,016   5,116,904 
Total stockholders' equity  1,136,824   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  13.31%  13.42%  13.25%  13.00%  12.90%  12.90%  12.78%  12.88%
Investment securities to earning assets  14.16%  12.22%  12.39%  12.91%  13.23%  13.36%  13.50%  14.28%
Loans to earning assets  84.37%  85.20%  84.93%  85.90%  86.02%  86.01%  82.97%  83.20%
Loans to assets  77.71%  78.18%  78.00%  78.89%  79.72%  79.52%  76.66%  76.78%
Loans to deposits  104.11%  101.58%  102.53%  105.55%  111.10%  108.32%  107.06%  107.72%
Capital Measures:                
Tier 1 leverage (1)  9.70%  9.96%  9.80%  9.61%  9.50%  9.46%  9.27%  9.21%
Tier 1 capital to risk-weighted assets (1)  11.21%  11.52%  11.59%  11.35%  11.06%  11.18%  11.01%  11.08%
Total regulatory capital to risk-weighted assets (1)  14.85%  12.70%  12.79%  12.54%  12.26%  12.38%  12.19%  12.27%
Common equity tier 1 capital to risk-weighted assets (1)  11.06%  11.37%  11.43%  11.19%  10.90%  11.02%  10.85%  10.92%
Book value per share $ 32.40  $32.00  $31.43  $30.82  $30.06  $29.35  $28.90  $28.61 
Outstanding shares  34,970,370   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 December 31, 2019                
                 


Sandy Spring Bancorp, Inc. and Subsidiaries                
LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED              
                 
   2019   2018 
(Dollars in thousands) December 31, 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  8,450   6,393   7,083   8,013   7,086   6,352   6,883   6,634 
Commercial real estate:                                
Commercial AD&C  829   829   1,990   3,306   3,306   136   136   136 
Commercial investor real estate  8,437   8,454   6,409   6,071   5,355   5,861   5,878   5,813 
Commercial owner occupied real estate  4,148   3,810   3,766   5,992   4,234   3,352   3,440   3,524 
Consumer  4,107   4,561   4,439   4,081   4,107   4,098   4,298   3,244 
Residential real estate:                                
Residential mortgage  12,661   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  38,632   36,621   34,312   37,323   33,583   29,096   27,054   26,588 
Total restructured loans - accruing  2,636   2,287   2,133   2,479   1,942   2,224   1,663   2,678 
Total non-performing loans  41,268   40,126   37,693   40,113   36,014   33,307   28,835   29,392 
Other assets and real estate owned (OREO)  1,482   1,482   1,486   1,410   1,584   2,118   2,361   2,761 
Total non-performing assets $ 42,750  $41,608  $39,179  $41,523  $37,598  $35,425  $31,196  $32,153 
                                 
  For the Quarter Ended,
  December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31,
(Dollars in thousands) 2019 2019 2019 2019 2018 2018 2018 2018
Analysis of Non-accrual Loan Activity:                                
Balance at beginning of period $ 36,621  $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  (454)  (705)  (604)  (227)  (360)  (91)  (144)  (411)
Net payments or draws  (2,916)  (2,903)  (5,517)  (1,786)  (1,126)  (1,777)  (1,635)  (357)
Loans placed on non-accrual  5,381   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 $ 38,632  $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 $ 54,992  $54,024  $53,089  $53,486  $50,409  $48,493  $46,931  $45,257 
Provision (credit) for loan losses  1,655   1,524   1,633   (128)  3,403   1,890   1,733   1,997 
Less loans charged-off, net of recoveries:                                
Commercial business  15   389   735   7   (9)  (49)  (73)  322 
Commercial real estate:                                
Commercial AD&C  -   (224)  (4)  -   -   -   -   (62)
Commercial investor real estate  (3)  (3)  (3)  (7)  109   (49)  (8)  (8)
Commercial owner occupied real estate  -   -   -   -   -   -   -   - 
Consumer  241   187   (18)  182   45   85   244   99 
Residential real estate:                                
Residential mortgage  264   209   (10)  89   183   (11)  13   (22)
Residential construction  (2)  (2)  (2)  (2)  (2)  (2)  (5)  (6)
Net charge-offs  515   556   698   269   326   (26)  171   323 
Balance at end of period $ 56,132  $54,992  $54,024  $53,089  $53,486  $50,409  $48,493  $46,931 
                                 
Asset Quality Ratios:                                
Non-performing loans to total loans  0.62%  0.61%  0.58%  0.61%  0.55%  0.52%  0.46%  0.48%
Non-performing assets to total assets  0.50%  0.49%  0.47%  0.50%  0.46%  0.44%  0.38%  0.41%
Allowance for loan losses to loans  0.84%  0.83%  0.82%  0.81%  0.81%  0.79%  0.78%  0.77%
Allowance for loan losses to non-performing loans  136.02%  137.05%  143.33%  132.35%  148.51%  151.35%  168.17%  159.67%
Annualized net charge-offs to average loans  0.03%  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 December 31, 
  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 $ 1,169,623  $ 11,030  3.77%$1,188,135  $11,348  3.82%
Residential construction loans  149,690   1,650  4.37   202,710   2,086  4.08 
Total mortgage loans  1,319,313   12,680  3.84   1,390,845   13,434  3.86 
Commercial AD&C loans  695,817   9,388  5.35   647,115   9,466  5.80 
Commercial investor real estate loans  2,092,478   24,982  4.74   1,936,936   24,301  4.98 
Commercial owner occupied real estate loans  1,274,782   15,606  4.86   1,196,506   14,661  4.86 
Commercial business loans  765,159   9,821  5.09   751,769   10,447  5.51 
Total commercial loans  4,828,236   59,797  4.91   4,532,326   58,875  5.15 
Consumer loans  477,572   5,594  4.65   522,453   6,258  4.75 
Total loans (2)  6,625,121   78,071  4.68   6,445,624   78,567  4.84 
Loans held for sale  50,208   462  3.68   21,923   262  4.78 
Taxable securities  816,008   5,704  2.79   728,560   5,471  3.00 
Tax-exempt securities (3)  186,684   1,576  3.38   257,586   2,314  3.59 
Total investment securities (4)  1,002,692   7,280  2.90   986,146   7,785  3.16 
Interest-bearing deposits with banks  181,394   724  1.58   40,864   222  2.16 
Federal funds sold  421   2  1.66   796   3  1.51 
Total interest-earning assets  7,859,836   86,539  4.38   7,495,353   86,839  4.60 
               
Less: allowance for loan losses  (54,653)       (51,302)     
Cash and due from banks  68,011        64,866      
Premises and equipment, net  59,277        62,219      
Other assets  610,366        534,356      
Total assets $ 8,542,837       $8,105,492      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $ 800,263   685  0.34%$695,762   226  0.13%
Regular savings deposits  325,540   94  0.11   334,593   82  0.10 
Money market savings deposits  1,875,045   5,820  1.23   1,601,050   5,691  1.41 
Time deposits  1,531,640   8,124  2.10   1,424,503   6,557  1.83 
Total interest-bearing deposits  4,532,488   14,723  1.29   4,055,908   12,556  1.23 
Other borrowings  133,716   216  0.64   214,278   570  1.06 
Advances from FHLB  516,101   3,189  2.45   922,620   5,851  2.52 
Subordinated debentures  143,998   1,679  4.66   37,448   485  5.18 
Total interest-bearing liabilities  5,326,303   19,807  1.48   5,230,254   19,462  1.48 
               
Noninterest-bearing demand deposits  1,927,063        1,766,672      
Other liabilities  152,647        63,188      
Stockholders' equity  1,136,824        1,045,378      
Total liabilities and stockholders' equity$ 8,542,837       $8,105,492      
               
Net interest income and spread   $ 66,732  2.90%  $67,377  3.12%
Less: tax-equivalent adjustment    1,149        1,232    
Net interest income   $ 65,583       $66,145    
               
Interest income/earning assets     4.38%    4.60%
Interest expense/earning assets     1.00      1.03 
Net interest margin     3.38%    3.57%
               
(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      
               
  Twelve Months Ended December 31, 
  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 $ 1,214,625  $ 46,438  3.82%$1,115,869  $41,628  3.73%
Residential construction loans  168,797   7,232  4.28   208,741   8,289  3.97 
Total mortgage loans  1,383,422   53,670  3.88   1,324,610   49,917  3.77 
Commercial AD&C loans  677,536   39,241  5.79   609,844   35,058  5.75 
Commercial investor real estate loans  2,000,571   99,410  4.97   1,938,633   96,125  4.96 
Commercial owner occupied real estate loans  1,239,289   60,581  4.89   1,128,836   53,712  4.76 
Commercial business loans  772,052   41,300  5.35   694,326   36,499  5.26 
Total commercial loans  4,689,448   240,532  5.13   4,371,639   221,394  5.06 
Consumer loans  496,199   24,391  4.92   529,249   23,568  4.45 
Total loans (2)  6,569,069   318,593  4.85   6,225,498   294,879  4.74 
Loans held for sale  41,905   1,607  3.84   28,225   1,245  4.41 
Taxable securities  768,521   22,873  2.98   736,054   21,362  2.90 
Tax-exempt securities (3)  211,236   7,403  3.50   281,962   9,976  3.54 
Total investment securities (4)  979,757   30,276  3.09   1,018,016   31,338  3.08 
Interest-bearing deposits with banks  108,534   2,129  1.96   74,956   1,304  1.74 
Federal funds sold  572   10  1.76   2,151   31  1.42 
Total interest-earning assets  7,699,837   352,615  4.58   7,348,846   328,797  4.47 
               
Less: allowance for loan losses  (53,746)       (48,483)     
Cash and due from banks  65,181        68,183      
Premises and equipment, net  60,595        61,686      
Other assets  595,272        535,282      
Total assets $ 8,367,139       $7,965,514      
               
Liabilities and Stockholders' Equity              
Interest-bearing demand deposits $ 750,606   1,990  0.27%$721,759   883  0.12%
Regular savings deposits  329,158   415  0.13   376,207   570  0.15 
Money market savings deposits  1,751,989   25,437  1.45   1,541,142   18,719  1.21 
Time deposits  1,604,996   33,839  2.11   1,290,626   18,967  1.47 
Total interest-bearing deposits  4,436,749   61,681  1.39   3,929,734   39,139  1.00 
Other borrowings  152,088   1,161  0.76   172,888   1,169  0.68 
Advances from FHLB  645,587   16,578  2.57   980,541   21,408  2.18 
Subordinated debentures  64,251   3,141  4.89   37,501   1,921  5.13 
Total interest-bearing liabilities  5,298,675   82,561  1.56   5,120,664   63,637  1.24 
               
Noninterest-bearing demand deposits  1,830,008        1,759,867      
Other liabilities  130,146        60,188      
Stockholders' equity  1,108,310        1,024,795      
Total liabilities and stockholders' equity$ 8,367,139       $7,965,514      
               
Net interest income and spread   $ 270,054  3.02%  $265,160  3.23%
Less: tax-equivalent adjustment    4,746        4,715    
Net interest income   $ 265,308       $260,445    
               
Interest income/earning assets     4.58%    4.47%
Interest expense/earning assets     1.07      0.87 
Net interest margin     3.51%    3.60%
               
(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 $4.7 million and $4.7 million in 2019 and 2018, respectively.
 
(2) Non-accrual loans are included in the average balances.