SEGMENT REPORTING

6 Months Ended

Jun. 30, 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 $1.3 million for the three months ended June 30, 2021 and 2020, respectively, and were $2.4 million and $1.7 million for the six months ended June 30, 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 and six months ended June 30, 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 $3.8 billion in combined assets under management as of June 30, 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 were $0.5 million and $0.7 million for the three months ended June 30, 2021 and 2020, respectively, and were $0.9 million for the six months ended June 30, 2021 and 2020, 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 June 30, 2021
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	114,823	$	1	$	2	$	(3)	$	114,823
Interest expense	6,780		—		—		(3)		6,777
Provision/ (credit) for credit losses	(4,204)		—		—		—		(4,204)
Non-interest income	23,714		1,246		5,516		(4,217)		26,259
Non-interest expense	58,049		1,324		3,819		(217)		62,975
Income/(loss) before income taxes	77,912		(77)		1,699		(4,000)		75,534
Income tax expense/ (benefit)	17,728		(21)		564		—		18,271
Net income/ (loss)	$	60,184	$	(56)	$	1,135	$	(4,000)	$	57,263
Assets	$	12,925,577	$	8,758	$	55,648	$	(64,406)	$	12,925,577

	Three Months Ended June 30, 2020
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	114,929	$	1	$	—	$	(3)	$	114,927
Interest expense	13,416		—		—		(3)		13,413
Provision for credit losses	58,686		—		—		—		58,686
Non-interest income	19,253		1,198		2,693		(220)		22,924
Non-interest expense	82,410		1,275		1,973		(220)		85,438
Income/ (loss) before income taxes	(20,330)		(76)		720		—		(19,686)
Income tax expense/ (benefit)	(5,517)		(21)		190		—		(5,348)
Net income/ (loss)	$	(14,813)	$	(55)	$	530	$	—	$	(14,338)
Assets	$	13,281,483	$	10,537	$	55,319	$	(56,892)	$	13,290,447

	Six Months Ended June 30, 2021
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	229,084	$	2	$	4	$	(6)	$	229,084
Interest expense	16,444		—		—		(6)		16,438
Provision/ (credit) for credit losses	(38,912)		—		—		—		(38,912)
Non-interest income	45,439		3,397		10,723		(4,434)		55,125
Non-interest expense	121,744		2,811		7,027		(434)		131,148
Income before income taxes	175,247		588		3,700		(4,000)		175,535
Income tax expense	41,566		162		1,080		—		42,808
Net income	$	133,681	$	426	$	2,620	$	(4,000)	$	132,727
Assets	$	12,925,577	$	8,758	$	55,648	$	(64,406)	$	12,925,577

	Six Months Ended June 30, 2020
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	198,786	$	4	$	2	$	(7)	$	198,785
Interest expense	32,944		—		—		(7)		32,937
Provision for credit losses	83,155		—		—		—		83,155
Non-interest income	33,230		3,327		4,959		(424)		41,092
Non-interest expense	127,065		2,739		3,804		(424)		133,184
Income/ (loss) before income taxes	(11,148)		592		1,157		—		(9,399)
Income tax expense/ (benefit)	(5,516)		164		304		—		(5,048)
Net income/ (loss)	$	(5,632)	$	428	$	853	$	—	$	(4,351)
Assets	$	13,281,483	$	10,537	$	55,319	$	(56,892)	$	13,290,447