SEGMENT REPORTING

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

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 reflects 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 and assets are included in the Community Banking segment, as the majority of parent company functions are 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 $1.2 million and $0.4 million for the three months ended March 31, 2021 and 2020, respectively.

The Insurance segment is conducted through Sandy Spring Insurance, a subsidiary of the Bank. Sandy Spring Insurance 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, occupancy, support charges, and other expenses. Non-cash charges associated with amortization of intangibles were immaterial for the three months ended March 31, 2021 and 2020.

The Investment Management segment is conducted through West Financial and RPJ, subsidiaries of the Bank. These asset management and financial planning firms, located in McLean, Virginia and Falls Church, Virginia, respectively, provide 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 and RPJ had approximately $3.6 billion in combined assets under management as of March 31, 2021. Major revenue sources include non-interest income earned on the above services. Expenses include personnel, occupancy, support charges, and other expenses. Non-cash charges associated with amortization of intangibles for the three months ended March 31, 2021 and 2020 were $0.5 million and $0.2 million, respectively.

Information for the operating segments and reconciliation of the information to the Condensed Consolidated Financial Statements for the periods indicated are presented in the following tables:

	Three Months Ended March 31, 2021
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	114,261	$	1	$	2	$	(3)	$	114,261
Interest expense	9,664		—		—		(3)		9,661
Provision for credit losses	(34,708)		—		—		—		(34,708)
Non-interest income	21,725		2,151		5,207		(217)		28,866
Non-interest expense	63,695		1,487		3,208		(217)		68,173
Income before income taxes	97,335		665		2,001		—		100,001
Income tax expense	23,838		183		516		—		24,537
Net income	$	73,497	$	482	$	1,485	$	—	$	75,464
Assets	$	12,878,311	$	11,504	$	56,688	$	(73,137)	$	12,873,366

	Three Months Ended March 31, 2020
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	83,857	$	3	$	2	$	(4)	$	83,858
Interest expense	19,528		—		—		(4)		19,524
Provision for credit losses	24,469		—		—		—		24,469
Non-interest income	13,977		2,129		2,266		(204)		18,168
Non-interest expense	44,655		1,464		1,831		(204)		47,746
Income before income taxes	9,182		668		437		—		10,287
Income tax expense	1		185		114		—		300
Net income	$	9,181	$	483	$	323	$	—	$	9,987
Assets	$	8,917,849	$	10,887	$	55,657	$	(54,791)	$	8,929,602