SEGMENT REPORTING

9 Months Ended

Sep. 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 $1.4 million for the three months ended September 30, 2021 and 2020, respectively, and were $3.5 million and $3.2 million for the nine months ended September 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 nine months ended September 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 September 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 for both the three months ended September 30, 2021 and 2020, respectively, and were $1.4 million for both the nine months ended September 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 September 30, 2021
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	111,129	$	—	$	3	$	(3)	$	111,129
Interest expense	4,528		—		—		(3)		4,525
Provision/ (credit) for credit losses	(8,229)		—		—		—		(8,229)
Non-interest income	16,644		2,282		5,685		(217)		24,394
Non-interest expense	58,059		1,696		3,643		(217)		63,181
Income/(loss) before income taxes	73,415		586		2,045		—		76,046
Income tax expense/ (benefit)	18,385		185		500		—		19,070
Net income/ (loss)	$	55,030	$	401	$	1,545	$	—	$	56,976
Assets	$	13,017,464	$	9,203	$	57,324	$	(66,527)	$	13,017,464

	Three Months Ended September 30, 2020
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	112,985	$	1	$	1	$	(3)	$	112,984
Interest expense	15,503		—		—		(3)		15,500
Provision for credit losses	7,003		—		—		—		7,003
Non-interest income	24,746		2,119		2,746		(221)		29,390
Non-interest expense	57,856		1,580		1,722		(221)		60,937
Income/ (loss) before income taxes	57,369		540		1,025		—		58,934
Income tax expense/ (benefit)	13,912		149		231		—		14,292
Net income/ (loss)	$	43,457	$	391	$	794	$	—	$	44,642
Assets	$	12,678,396	$	11,289	$	57,088	$	(68,642)	$	12,678,131

	Nine Months Ended September 30, 2021
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	340,213	$	2	$	7	$	(9)	$	340,213
Interest expense	20,972		—		—		(9)		20,963
Provision/ (credit) for credit losses	(47,141)		—		—		—		(47,141)
Non-interest income	62,083		5,679		16,408		(4,651)		79,519
Non-interest expense	179,803		4,507		10,670		(651)		194,329
Income before income taxes	248,662		1,174		5,745		(4,000)		251,581
Income tax expense	59,951		347		1,580		—		61,878
Net income	$	188,711	$	827	$	4,165	$	(4,000)	$	189,703
Assets	$	13,017,464	$	9,203	$	57,324	$	(66,527)	$	13,017,464

	Nine Months Ended September 30, 2020
(In thousands)	Community Banking		Insurance		Investment Management		Inter-Segment Elimination		Total
Interest income	$	311,771	$	5	$	3	$	(10)	$	311,769
Interest expense	48,447		—		—		(10)		48,437
Provision for credit losses	90,158		—		—		—		90,158
Non-interest income	57,976		5,446		7,705		(645)		70,482
Non-interest expense	184,921		4,319		5,526		(645)		194,121
Income/ (loss) before income taxes	46,221		1,132		2,182		—		49,535
Income tax expense/ (benefit)	8,396		313		535		—		9,244
Net income/ (loss)	$	37,825	$	819	$	1,647	$	—	$	40,291
Assets	$	12,678,396	$	11,289	$	57,088	$	(68,642)	$	12,678,131