SEGMENT REPORTING

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

SEGMENT REPORTING

Note 16 - Segment Reporting

Currently, the Company conducts business in three operating segments - Community Banking, Insurance and Investment Management. Each of the operating segments is a strategic business unit that offers different products and services. The Insurance and Investment Management segments were businesses that were acquired in separate transactions where management of the acquired business was retained. The accounting policies of the segments are the same as those of the Company. However, the segment data reflect inter-segment transactions and balances.

The Community Banking segment is conducted through Sandy Spring Bank and involves delivering a broad range of financial products and services, including various loan and deposit products, to both individuals and businesses. Parent company income is included in the Community Banking segment, as the majority of parent company functions is related to this segment. Major revenue sources include net interest income, gains on sales of mortgage loans, trust income fees and service charges on deposit accounts. Expenses include personnel, occupancy, marketing, equipment and other expenses. Non-cash charges associated with amortization of intangibles were $0.4 million and $0.5 million for the three months ended September 30, 2019 and 2018, respectively. These charges totaled $1.3 million and $1.6 million for the nine months ended September 30, 2019 and 2018, respectively.

The Insurance segment is conducted through Sandy Spring Insurance Corporation, a subsidiary of the Bank. Sandy Spring Insurance Corporation operates Sandy Spring Insurance, a general insurance agency located in Annapolis, Maryland, and Neff and Associates, located in Ocean City, Maryland. Major sources of revenue are insurance commissions from commercial lines, personal lines, and medical liability lines. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles were not significant for the three and nine months ended September 30, 2019 and 2018, respectively.

The Investment Management segment is conducted through West Financial Services, Inc., a subsidiary of the Bank. This asset management and financial planning firm, located in McLean, Virginia, provides comprehensive investment management and financial planning to individuals, families, small businesses and associations, including cash flow analysis, investment review, tax planning, retirement planning, insurance analysis and estate planning. West Financial currently has approximately $1.7 billion in assets under management. Major revenue sources include non-interest income earned on the above services. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles were not significant for the three and nine months ended September 30, 2019 and 2018, respectively.

Information for the operating segments and reconciliation of the information to the condensed consolidated financial statements for the periods indicated is presented in the following tables:

	Three Months Ended September 30, 2019
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	87,068	$	13	$	4	$	(3)	$	87,082
Interest expense		20,295		-		-		(3)		20,292
Provision (credit) for loan losses		1,524		-		-		-		1,524
Noninterest income		14,080		2,123		2,538		(168)		18,573
Noninterest expense		41,806		1,635		1,652		(168)		44,925
Income before income taxes		37,523		501		890		-		38,914
Income tax expense		9,162		138		231		-		9,531
Net income	$	28,361	$	363	$	659	$	-	$	29,383
Assets	$	8,437,588	$	11,615	$	22,033	$	(33,698)	$	8,437,538

	Three Months Ended September 30, 2018
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	84,374	$	1	$	2	$	(3)	$	84,374
Interest expense		16,786		-		-		(3)		16,783
Provision for loan losses		1,890		-		-		-		1,890
Non-interest income		10,707		2,018		2,462		(154)		15,033
Non-interest expense		39,372		1,564		1,611		(154)		42,393
Income before income taxes		37,033		455		853		-		38,341
Income tax expense		8,755		127		225		-		9,107
Net income	$	28,278	$	328	$	628	$	-	$	29,234
Assets	$	8,038,263	$	9,473	$	15,969	$	(29,140)	$	8,034,565

	Nine Months Ended September 30, 2019
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	262,465	$	15	$	9	$	(10)	$	262,479
Interest expense		62,764		-		-		(10)		62,754
Provision for loan losses		3,029		-		-		-		3,029
Noninterest income		39,643		5,296		7,660		(501)		52,098
Noninterest expense		123,876		4,359		5,270		(501)		133,004
Income before income taxes		112,439		952		2,399		-		115,790
Income tax expense		26,924		265		625		-		27,814
Net income	$	85,515	$	687	$	1,774	$	-	$	87,976
Assets	$	8,437,588	$	11,615	$	22,033	$	(33,698)	$	8,437,538

	Nine Months Ended September 30, 2018
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	238,474	$	2	$	5	$	(6)	$	238,475
Interest expense		44,181		-		-		(6)		44,175
Provision for loan losses		5,620		-		-		-		5,620
Non-interest income		35,130		5,019		7,331		(461)		47,019
Non-interest expense		128,705		4,245		4,627		(461)		137,116
Income before income taxes		95,098		776		2,709		-		98,583
Income tax expense		22,357		218		710		-		23,285
Net income	$	72,741	$	558	$	1,999	$	-	$	75,298
Assets	$	8,038,263	$	9,473	$	15,969	$	(29,140)	$	8,034,565