EX-99.1 2 tv504948_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

News release

 

 

FOR IMMEDIATE RELEASE

 

SANDY SPRING BANCORP REPORTS RECORD QUARTERLY EARNINGS

 

Company Demonstrates Strong Performance and Momentum Across the Organization

 

OLNEY, MARYLAND, October 18, 2018 — Today, Sandy Spring Bancorp, Inc., (Nasdaq-SASR), the parent company of Sandy Spring Bank, reported net income for the third quarter of 2018 of $29.2 million ($0.82 per diluted share) compared to net income of $15.1 million ($0.62 per diluted share) for the third quarter of 2017 and net income of $24.4 million ($0.68 per diluted share) for the second quarter of 2018. The current quarter’s results included $2.0 million of recovered interest income from a previously acquired credit impaired loan and $0.6 million in merger expenses. Excluding the after-tax impact of these items, the net income for the third quarter would have been $28.2 million or $0.79 per diluted share.

 

The results of operations from the January 1, 2018, acquisition of WashingtonFirst Bankshares (“WashingtonFirst”) are included in the Company’s consolidated results of operations for the first nine months of 2018. The current period results reflect increased levels of average and period end balances, income and expense, versus comparable periods in 2017. At the acquisition date, WashingtonFirst had assets of $2.1 billion, loans of $1.7 billion and deposits of $1.6 billion. The growth in interest income and expense from the prior year is the result of the growth in the balance sheet. The cost savings initiatives as a result of the synergies from the combination of the two institutions will continue to be realized into the first half of 2019.

 

“As the largest locally-headquartered community bank, our success is evident in our record quarterly earnings and growth momentum,” said Daniel J. Schrider, President and Chief Executive Officer. “We are thriving in a highly competitive market and among our peer group. To continue to be a high-performing company, we will remain grounded in our core strengths: effectively funding the bank by deepening our client relationships and enhancing our funding strategies, driving robust loan growth, and managing expenses. All of these performance drivers have been key to this quarter’s strong results.”

 

Third Quarter Highlights:

 

·Total loans increased 52% compared to the third quarter of 2017, primarily as a result of the WashingtonFirst acquisition. Post-acquisition loan growth momentum remained strong during the quarter. Compared to the post-acquisition combined portfolio at the beginning of 2018, the loan portfolio has experienced 6% growth.

 

·Total deposits have experienced post-acquisition growth of 6%, primarily in noninterest-bearing demand deposit accounts, which have grown 13% subsequent to the acquisition.

 

·The net interest margin for the third quarter of 2018 was 3.71% compared to 3.54% for the third quarter of 2017 and 3.56% for the second quarter of 2018. The current quarter’s margin was positively impacted by an interest income recovery of $2.0 million. The net interest margin for the current quarter was 3.60% after excluding the interest income recovery.

 

 

 

 

·Third quarter results reflected an annualized return on average assets of 1.45% and annualized return on average equity of 11.26% as compared to 1.13% and 10.74% respectively for the third quarter of 2017. Exclusive of merger costs and the interest income recovery on an after-tax basis, the return on average assets and return on average equity for the current quarter would have been 1.40% and 10.85%, respectively.

 

·Pre-tax merger expenses recognized in the current quarter declined to $0.6 million compared to $2.2 million in the prior quarter.

 

·The Non-GAAP efficiency ratio was 49.27% for the current quarter compared to 53.76% for the third quarter of 2017 and 52.98% for the second quarter of 2018. Excluding the previously mentioned interest recovery, the Non-GAAP efficiency ratio for the current quarter was 50.48%.

 

Review of Balance Sheet and Credit Quality

 

At September 30, 2018, total assets amounted to $8.0 billion compared to $5.3 billion at September 30, 2017. This increase was primarily the result of the acquisition of WashingtonFirst’s $2.1 billion of assets. Total loans at September 30, 2018, were $6.4 billion compared to $4.2 billion at September 30, 2017. Post-acquisition asset growth has been primarily the result of net loan growth in the first nine months of 2018.

 

Tangible common equity totaled $711 million at September 30, 2018, compared to $482 million at September 30, 2017. At September 30, 2018, the ratio of tangible common equity to tangible assets has increased to 9.26% compared to 9.18% at September 30, 2017. The initial impact on tangible common equity of the growth in intangible assets associated with the WashingtonFirst acquisition has been substantially offset during 2018 by increased net earnings. The Company had a total risk-based capital ratio of 12.38%, a common equity tier 1 risk-based capital ratio of 11.02%, a tier 1 risk-based capital ratio of 11.18% and a tier 1 leverage ratio of 9.46% at September 30, 2018.

 

The ratio of non-performing loans to total loans decreased to 0.52% at September 30, 2018, compared to 0.72% at September 30, 2017, as a result of the growth in the loan portfolio. Non-performing loans totaled $33.3 million at September 30, 2018, compared to $30.2 million at September 30, 2017, and $28.8 million at June 30, 2018. Non-performing loans include accruing loans 90 days or more past due and restructured loans, but exclude non-performing loans acquired in the WashingtonFirst acquisition.

 

Net loan charge-offs/recoveries were not significant for the third quarter of 2018 compared to $1.1 million for the third quarter of 2017. The allowance for loan losses represented 0.79% of outstanding loans and 151% of non-performing loans at September 30, 2018, compared to 1.07% of outstanding loans and 149% of non-performing loans at September 30, 2017. The decline in the ratio of the allowance for loan losses to outstanding loans ratio is the result of the accounting for credit losses on the loans acquired in the WashingtonFirst acquisition as any incurred credit losses have been embedded in the determination of the fair values of those loans.

 

 

 

 

Income Statement Review

 

For the third quarter of 2018 net interest income increased 58% to $67.6 million compared to $42.7 million for the third quarter of 2017 as average loans from quarter to quarter increased 51% primarily as a result of the WashingtonFirst acquisition and, to a lesser extent, the Company’s organic loan growth. The net interest margin for the current quarter was 3.71% compared to the net interest margin for the third quarter of 2017 of 3.54%. The current quarter’s margin included $2.0 million in recovered interest income from a previously acquired credit impaired loan compared to $0.7 million in recovered interest for the prior year’s quarter. Excluding these amounts, the net interest margin for the current quarter was 3.60% compared to the prior year’s 3.54%. Amortization of the fair value adjustments to both interest-earning assets and interest-bearing liabilities directly attributable to the acquisition had an 18 basis point positive effect on net interest margin for the current period. This favorable margin impact was offset by approximately 5 basis points as a result of the impact that the recent reduction in the tax rate had on tax-advantaged investments.

 

The provision for loan losses was $1.9 million for the third quarter of 2018, compared to $0.9 million for the third quarter of 2017 and $1.7 million for the second quarter of 2018. The increase in the provision reflects the impact of organic loan production and the impact of acquired loans being refinanced as they matured under the original lending arrangements during the third quarter of 2018.

 

Non-interest income increased to $15.0 million or 18% for the third quarter of 2018, compared to $12.7 million for the third quarter of 2017. The increase in non-interest income was due primarily to the impact of increased mortgage banking activities and, to a lesser extent, income from wealth management activities and bank card fees.

 

Non-interest expenses increased 36% to $42.4 million for the third quarter of 2018, compared to $31.2 million in the third quarter of 2017. The current quarter included $0.6 million in merger expenses compared to $0.3 million for the third quarter of 2017. Excluding these expenses, non-interest expenses increased 36% compared to the third quarter of 2017 due to increased compensation and benefit costs and facility and other operational expenses as a result of the acquisition. The non-GAAP efficiency ratio improved to 49.27% for the third quarter of 2018, compared to 53.76% for the third quarter of 2017, as a result of the growth in net interest income. The Non-GAAP efficiency ratio for the current quarter was 50.48% after excluding the interest income recovery.

 

Net interest income for the first nine months of 2018 increased 55%, compared to the first nine months of 2017, due to the combination of the acquisition and organic loan growth. During the first nine months of 2018, the net interest margin was 3.62% compared to 3.55% for the prior year period. Net interest income for the first nine months of 2018 includes the previously mentioned $2.0 million of recovered interest income. This compares to the interest recovery of $0.7 million for the same period of 2017. Excluding these recoveries, the net interest margin would have been 3.59% compared to 3.54% for the nine months ended 2018 and 2017, respectively. The amortization of the fair value adjustments is estimated to be 14 basis points on an annual basis. This favorable margin effect was partially offset by the impact that the recently enacted tax rate reduction had on the tax-advantaged securities in the investment portfolio which adversely affected the margin by 5 basis points.

 

The provision for loan losses was $5.6 million for the first nine months of 2018, compared to $2.5 million for the first nine months of 2017. The increase in the provision reflects the organic growth in the loan portfolio year over year in addition to the impact of acquired loans being refinanced as they reach maturity under the original lending arrangements and cease to be accounted for as acquired loans.

 

 

 

 

Non-interest income was $47.0 million for the first nine months of 2018, compared to $38.9 million for the first nine months of 2017. The first nine months of 2018 included gains of $0.1 million on sales of investment securities compared to $1.3 million in 2017. Excluding these gains, non-interest income increased 24% compared to the prior year period primarily due to increases in mortgage banking activities, wealth management income and BOLI insurance mortality proceeds. Mortgage lending operations acquired as part of the WashingtonFirst transaction has resulted in significant growth in mortgage banking income for the first nine months of 2018.

 

Non-interest expenses increased 46% to $137.1 million for the first nine months of 2018, compared to $94.0 million for the prior year period. Excluding merger expense from both years in addition to the prior year’s loss on the FHLB redemption, the year-over-year increase in non-interest expense was 37%. The majority of the increase was in compensation, facility costs and other operational expenses as a result of the acquisition of WashingtonFirst. The non-GAAP efficiency ratio improved to 50.57% for the first nine months of 2018 compared to 54.21% for the first nine months of 2017 as a direct result of the growth in net interest income. The Non-GAAP efficiency ratio for the current year-to-date was 50.99% excluding the interest income recovery.

 

Explanation of Non-GAAP Financial Measures

 

Reported amounts are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management uses supplemental non-GAAP financial measures in its analysis of the Company’s performance. These non-GAAP financial measures include: reported net income excluding intangible asset amortization, merger related expenses and the loss on the FHLB redemption from non-interest expense; non-interest income excluding securities gains (losses); and tax-equivalent net interest income, which adjusts the interest earned on tax-advantaged loans and tax-exempt investment securities to an amount comparable to interest subject to normal income taxes. Because the adjustments made to derive non-GAAP financial measures can vary from period to period, the Company’s management believes that the non-GAAP financial measures are useful in comparing 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. 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 that may be presented by other companies. Please refer to Non-GAAP Reconciliation table included with this release.

 

Conference Call

 

The Company’s management will host a conference call to discuss its third 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) November 1, 2018. A replay of the teleconference will be available through the same time period by calling 1-877-344-7529 under conference call number 10124406.

 

 

 

 

About Sandy Spring Bancorp, Inc.

 

Sandy Spring Bancorp, Inc., headquartered in Olney, Maryland, is the holding company for Sandy Spring Bank. Independent and community-oriented, Sandy Spring Bank offers a broad range of commercial banking, retail banking, mortgage and trust services throughout central Maryland, Northern Virginia, and the greater Washington, D.C. market. 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

Web site: 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; 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, 2017, 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       Nine Months Ended     
   September 30,   %   September 30,   % 
(Dollars in thousands, except per share data)  2018   2017   Change   2018   2017   Change 
Results of Operations:                              
Net interest income  $67,591   $42,697    58%  $194,300   $125,276    55%
Provision for loan losses   1,890    934    102    5,620    2,450    129 
Non-interest income   15,033    12,746    18    47,019    38,949    21 
Non-interest expenses   42,393    31,191    36    137,116    94,040    46 
Income before income taxes   38,341    23,318    64    98,583    67,735    46 
Net income   29,234    15,089    94    75,298    44,942    68 
                               
Pre-tax pre-provision income  $40,811   $24,597    66   $115,969   $71,517    62 
                               
Return on average assets   1.45%   1.13%        1.27%   1.15%     
Return on average common equity   11.26%   10.74%        9.89%   10.99%     
Net interest margin   3.71%   3.54%        3.62%   3.55%     
Efficiency ratio - GAAP basis   (1)   51.31%   56.26%        56.82%   57.26%     
Efficiency ratio - Non-GAAP basis   (1)   49.27%   53.76%        50.57%   54.21%     
                               
Per share data:                              
Basic net income  $0.82   $0.62    32%  $2.11   $1.86    13%
Diluted net income  $0.82   $0.62    32   $2.11   $1.86    13 
Average fully diluted shares   35,744,085    24,223,004    48    35,721,702    24,201,448    48 
Dividends declared per share  $0.28   $0.26    8   $0.82   $0.78    5 
Book value per share   29.35    23.53    25    29.35    23.53    25 
Tangible book value per share   20.03    20.07    -    20.03    20.07    - 
Outstanding shares   35,521,541    23,990,370    48    35,521,541    23,990,370    48 
                               
Financial Condition at period-end:                              
Investment securities  $992,797   $795,922    25%  $992,797   $795,922    25%
Loans   6,388,959    4,194,118    52    6,388,959    4,194,118    52 
Interest-earning assets   7,428,534    5,049,229    47    7,428,534    5,049,229    47 
Assets   8,034,565    5,334,788    51    8,034,565    5,334,788    51 
Deposits   5,898,394    3,955,792    49    5,898,394    3,955,792    49 
Interest-bearing liabilities   5,042,431    3,422,568    47    5,042,431    3,422,568    47 
Stockholders' equity   1,042,716    564,480    85    1,042,716    564,480    85 
                               
Capital ratios:                              
Tier 1 leverage   (4)   9.46%   9.28%        9.46%   9.28%     
Tier 1 capital to risk-weighted assets   (4)   11.18%   10.99%        11.18%   10.99%     
Total regulatory capital to risk-weighted assets   (4)   12.38%   12.01%        12.38%   12.01%     
Common equity tier 1 capital to risk-weighted assets   (4)   11.02%   10.99%        11.02%   10.99%     
Tangible common equity to tangible assets   (2)   9.26%   9.18%        9.26%   9.18%     
Average equity to average assets   12.90%   10.52%        12.85%   10.50%     
                               
Credit quality ratios:                              
Allowance for loan losses to loans   0.79%   1.07%        0.79%   1.07%     
Non-performing loans to total loans   0.52%   0.72%        0.52%   0.72%     
Non-performing assets to total assets   0.44%   0.59%        0.44%   0.59%     
Allowance for loan losses to non-performing loans   151.35%   148.73%        151.35%   148.73%     
Annualized net charge-offs to average loans    (3)   0.00%   0.10%        0.01%   0.05%     

                              

(1)The efficiency ratio - GAAP basis is non-interest expenses 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, merger expenses and loss on FHLB redemption from non-interest expense; securities gains (losses) from non-interest income and adds the tax-equivalent adjustment to net interest income.  See the Reconciliation Table included with these Financial Highlights.

(2)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.
(3)Calculation utilizes average loans, excluding residential mortgage loans held-for-sale.
(4)Estimated ratio at September 30, 2018

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

RECONCILIATION TABLE - UNAUDITED

             

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
(Dollars in thousands)  2018   2017   2018   2017 
Pre-tax pre-provision income:                    
Net income  $29,234   $15,089   $75,298   $44,942 
  Plus non-GAAP adjustment:                    
     Merger expenses   580    345    11,766    1,332 
     Income taxes   9,107    8,229    23,285    22,793 
     Provision for loan losses   1,890    934    5,620    2,450 
Pre-tax pre-provision income  $40,811   $24,597   $115,969   $71,517 
                     
Efficiency ratio - GAAP basis:                    
Non-interest expenses  $42,393   $31,191   $137,116   $94,040 
                     
Net interest income plus non-interest income  $82,624   $55,443   $241,319   $164,225 
                     
Efficiency ratio - GAAP basis   51.31%   56.26%   56.82%   57.26%
                     
                     
Efficiency ratio - Non-GAAP basis:                    
Non-interest expenses  $42,393   $31,191   $137,116   $94,040 
  Less non-GAAP adjustment:                    
     Amortization of intangible assets   540    25    1,622    76 
     Loss on FHLB Redemption   -    -    -    1,275 
     Merger expenses   580    345    11,766    1,332 
Non-interest expenses -  as adjusted  $41,273   $30,821   $123,728   $91,357 
                     
Net interest income plus non-interest income  $82,624   $55,443   $241,319   $164,225 
  Plus non-GAAP adjustment:                    
     Tax-equivalent income   1,221    1,888    3,483    5,585 
  Less non-GAAP adjustments:                    
     Securities gains   82    -    145    1,275 
Net interest income plus non-interest income - as adjusted  $83,763   $57,331   $244,657   $168,535 
                     
Efficiency ratio - Non-GAAP basis   49.27%   53.76%   50.57%   54.21%
                     
Supplemental Non-GAAP Performance Measurements:                    
Net income - GAAP  $29,234   $15,089   $75,298   $44,942 
     Merger expenses - net of tax   428    207    8,692    801 
     Acquisition fair value marks - net of tax   2,499    17    5,777    65 
Net income - Non-GAAP  $27,163   $15,279   $78,213   $45,678 
                     
  Diluted net income per share - Non-GAAP  $0.76   $0.63   $2.19   $1.89 
  Return on average assets - Non-GAAP   1.35%   1.14%   1.32%   1.17%
  Return on average common equity - Non-GAAP   10.46%   10.88%   10.27%   11.17%
                     
Tangible common equity ratio:                    
Total stockholders' equity  $1,042,716   $564,480   $1,042,716   $564,480 
Accumulated other comprehensive income   24,420    3,477    24,420    3,477 
Goodwill   (345,422)   (85,768)   (345,422)   (85,768)
Other intangible assets, net   (10,327)   (604)   (10,327)   (604)
Tangible common equity  $711,387   $481,585   $711,387   $481,585 
                     
Total assets  $8,034,565   $5,334,788   $8,034,565   $5,334,788 
Goodwill   (345,422)   (85,768)   (345,422)   (85,768)
Other intangible assets, net   (10,327)   (604)   (10,327)   (604)
Tangible assets  $7,678,816   $5,248,416   $7,678,816   $5,248,416 
                     
Tangible common equity ratio   9.26%   9.18%   9.26%   9.18%
                     
Outstanding common shares   35,521,541    23,990,370    35,521,541    23,990,370 
Tangible book value per common share  $20.03   $20.07   $20.03   $20.07 

  

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CONDITION  - UNAUDITED

             

   September 30,   December 31,   September 30, 
(Dollars in thousands)  2018   2017   2017 
Assets               
Cash and due from banks  $63,380   $55,693   $50,076 
Federal funds sold   2,055    2,845    2,838 
Interest-bearing deposits with banks   13,142    53,962    49,267 
Cash and cash equivalents   78,577    112,500    102,181 
Residential mortgage loans held for sale (at fair value)   31,581    9,848    7,084 
Investments available-for-sale (at fair value)   926,723    729,507    756,069 
Other equity securities   66,074    45,518    39,853 
Total loans   6,388,959    4,314,248    4,194,118 
Less: allowance for loan losses   (50,409)   (45,257)   (44,924)
Net loans   6,338,550    4,268,991    4,149,194 
Premises and equipment, net   62,098    54,761    54,108 
Other real estate owned   2,118    2,253    1,448 
Accrued interest receivable   24,058    15,480    16,045 
Goodwill   345,422    85,768    85,768 
Other intangible assets, net   10,327    580    604 
Other assets   149,037    121,469    122,434 
Total assets  $8,034,565   $5,446,675   $5,334,788 
                
Liabilities               
Noninterest-bearing deposits  $1,902,537   $1,264,392   $1,312,710 
Interest-bearing deposits   3,995,857    2,699,270    2,643,082 
Total deposits   5,898,394    3,963,662    3,955,792 
Securities sold under retail repurchase agreements and federal funds purchased   142,669    119,359    146,569 
Advances from FHLB   866,445    765,833    632,917 
Subordinated debentures   37,460    -    - 
Accrued interest payable and other liabilities   46,881    34,005    35,030 
Total liabilities   6,991,849    4,882,859    4,770,308 
                
Stockholders' Equity               
Common stock -- par value $1.00; shares authorized 50,000,000; shares issued and outstanding 35,521,541, 23,996,293 and 23,990,370 at September 30, 2018, December 31, 2017 and September 30, 2017, respectively   35,522    23,996    23,990 
Additional paid in capital   605,623    168,188    167,455 
Retained earnings   425,991    378,489    376,512 
Accumulated other comprehensive loss   (24,420)   (6,857)   (3,477)
Total stockholders' equity   1,042,716    563,816    564,480 
Total liabilities and stockholders' equity  $8,034,565   $5,446,675   $5,334,788 

  

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

                

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
(Dollars in thousands, except per share data)  2018   2017   2018   2017 
Interest Income:                    
 Interest and fees on loans  $76,786   $43,891   $215,050   $126,861 
 Interest on loans held for sale   336    119    983    273 
 Interest on deposits with banks   211    108    1,082    289 
 Interest and dividends on investment securities:                    
    Taxable   5,112    3,410    15,297    10,572 
    Exempt from federal income taxes   1,921    2,053    6,035    6,110 
 Interest on federal funds sold   8    8    28    18 
     Total interest income   84,374    49,589    238,475    144,123 
Interest Expense:                    
Interest on deposits   10,773    3,701    26,583    9,212 
Interest on retail repurchase agreements and federal funds purchased   383    83    599    238 
Interest on advances from FHLB   5,141    3,108    15,557    9,385 
Interest on subordinated debt   486    -    1,436    12 
     Total interest expense   16,783    6,892    44,175    18,847 
Net interest income   67,591    42,697    194,300    125,276 
Provision for loan losses   1,890    934    5,620    2,450 
     Net interest income after provision for loan losses   65,701    41,763    188,680    122,826 
Non-interest Income:                    
 Investment securities gains   82    -    145    1,275 
 Service charges on deposit accounts   2,316    2,140    6,865    6,121 
 Mortgage banking activities   1,672    632    5,943    2,080 
 Wealth management income   5,344    4,864    15,792    14,092 
 Insurance agency commissions   2,016    1,950    5,020    4,924 
 Income from bank owned life insurance   663    609    3,664    1,808 
 Bank card fees   1,436    1,211    4,199    3,609 
 Other income   1,504    1,340    5,391    5,040 
     Total non-interest income   15,033    12,746    47,019    38,949 
Non-interest Expenses:                    
 Salaries and employee benefits   24,488    18,442    73,064    54,525 
 Occupancy expense of premises   4,355    3,294    13,939    9,907 
 Equipment expenses   2,441    1,722    6,909    5,213 
 Marketing   770    784    2,863    2,223 
 Outside data services   1,736    1,286    4,840    4,045 
 FDIC insurance   1,257    850    3,840    2,478 
 Amortization of intangible assets   540    25    1,622    76 
 Merger expenses   580    345    11,766    1,332 
 Other expenses   6,226    4,443    18,273    14,241 
     Total non-interest expenses   42,393    31,191    137,116    94,040 
Income before income taxes   38,341    23,318    98,583    67,735 
Income tax expense   9,107    8,229    23,285    22,793 
     Net income  $29,234   $15,089   $75,298   $44,942 
                     
Net Income Per Share Amounts:                    
Basic net income per share  $0.82   $0.62   $2.11   $1.86 
Diluted net income per share  $0.82   $0.62   $2.11   $1.86 
Dividends declared per share  $0.28   $0.26   $0.82   $0.78 

  

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

HISTORICAL TRENDS - QUARTERLY FINANCIAL DATA - UNAUDITED                             

 

   2018   2017 
(Dollars in thousands, except per share data)  Q3   Q2   Q1   Q4   Q3   Q2   Q1 
Profitability for the Quarter:                                   
Tax-equivalent interest income  $85,595   $79,774   $76,589   $52,550   $51,477   $50,477   $47,754 
Interest expense   16,783    14,779    12,613    7,184    6,892    6,250    5,705 
Tax-equivalent net interest income   68,812    64,995    63,976    45,366    44,585    44,227    42,049 
  Tax-equivalent adjustment   1,221    1,177    1,085    1,874    1,888    1,901    1,796 
Provision for loan losses   1,890    1,733    1,997    527    934    1,322    194 
Non-interest income   15,033    14,868    17,118    12,294    12,746    13,571    12,632 
Non-interest expenses   42,393    45,082    49,641    35,059    31,191    32,868    29,981 
Income before income taxes   38,341    31,871    28,371    20,200    23,318    21,707    22,710 
Income tax expense   9,107    7,472    6,706    11,933    8,229    6,966    7,598 
Net income  $29,234   $24,399   $21,665   $8,267   $15,089   $14,741   $15,112 
Financial Performance:                                   
Pre-tax pre-provision income  $40,811   $35,832   $39,326  $23,647  $24,597   $24,016   $22,904 
Return on average assets   1.45%   1.23%   1.12%   0.61%   1.13%   1.14%   1.20%
Return on average common equity   11.26%   9.66%   8.70%   5.82%   10.74%   10.80%   11.45%
Net interest margin   3.71%   3.56%   3.58%   3.57%   3.54%   3.60%   3.51%
Efficiency ratio - GAAP basis (1)   51.31%   57.29%   62.04%   62.85%   56.26%   58.80%   56.69%
Efficiency ratio - Non-GAAP basis (1)   49.27%   52.98%   49.54%   55.69%   53.76%   54.10%   54.78%
Per Share Data:                                   
Basic net income per share  $0.82   $0.68   $0.61   $0.34   $0.62   $0.61   $0.63 
Diluted net income per share  $0.82   $0.68   $0.61   $0.34   $0.62   $0.61   $0.63 
Average fully diluted shares   35,744,085    35,743,927    35,683,542    24,228,471    24,223,004    24,262,745    24,158,566 
Dividends declared per common share  $0.28   $0.28   $0.26   $0.26   $0.26   $0.26   $0.26 
Non-interest Income:                                   
Securities gains (losses)  $82   $-   $63   $(2)  $-   $1,273   $2 
Service charges on deposit accounts   2,316    2,290    2,259    2,177    2,140    2,017    1,964 
Mortgage banking activities   1,672    2,064    2,207    654    632    840    608 
Wealth management income   5,344    5,387    5,061    5,054    4,864    4,744    4,484 
Insurance agency commissions   2,016    1,180    1,824    1,307    1,950    1,222    1,752 
Income from bank owned life insurance   663    670    2,331    595    609    605    594 
Bank card fees   1,436    1,393    1,370    1,218    1,211    1,253    1,145 
Other income   1,504    1,884    2,003    1,291    1,340    1,617    2,083 
  Total Non-interest Income  $15,033   $14,868   $17,118   $12,294   $12,746   $13,571   $12,632 
Non-interest Expense:                                   
Salaries and employee benefits  $24,488   $24,664   $23,912   $18,607   $18,442   $18,282   $17,801 
Occupancy expense of premises   4,355    4,642    4,942    3,146    3,294    3,211    3,402 
Equipment expenses   2,441    2,243    2,225    1,802    1,722    1,767    1,724 
Marketing   770    945    1,148    896    784    776    663 
Outside data services   1,736    1,707    1,397    1,441    1,286    1,367    1,392 
FDIC insurance   1,257    1,390    1,193    827    850    823    805 
Amortization of intangible assets   540    541    541    25    25    25    26 
Merger expenses   580    2,228    8,958    2,920    345    987    - 
Professional fees   1,351    1,699    1,040    1,439    1,053    1,045    955 
Other real estate owned expenses   36    41    38    14    4    (6)   5 
Other expenses   4,839    4,982    4,247    3,942    3,386    4,591    3,208 
  Total Non-interest Expense  $42,393   $45,082   $49,641   $35,059   $31,191   $32,868   $29,981 

 

(1)The efficiency ratio - GAAP basis is non-interest expenses 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, merger expenses and loss on FHLB redemption from non-interest expense; securities gains (losses) 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

                              

   2018   2017 
(Dollars in thousands)  Q3   Q2   Q1   Q4   Q3   Q2   Q1 
Balance Sheets at Quarter End:                                   
Residential mortgage loans  $1,181,427   $1,106,674   $992,287   $921,435   $882,890   $871,766   $848,814 
Residential construction loans   188,779    197,372    215,445    176,687    171,814    169,901    170,285 
Commercial AD&C loans   631,589    609,266    564,871    292,443    295,222    314,259    309,350 
Commercial investor real estate loans   1,924,397    1,923,827    1,928,439    1,112,710    1,104,669    1,069,988    979,410 
Commercial owner occupied real estate loans   1,201,673    1,184,421    1,174,739    857,196    831,461    797,629    772,443 
Commercial business loans   738,083    702,939    652,797    497,948    451,667    451,570    457,216 
Consumer loans   523,011    525,574    532,973    455,829    456,395    458,058    455,478 
  Total loans   6,388,959    6,250,073    6,061,551    4,314,248    4,194,118    4,133,171    3,992,996 
Allowance for loan losses   (50,409)   (48,493)   (46,931)   (45,257)   (44,924)   (45,079)   (43,861)
Loans held for sale   31,581    40,000    28,486    9,848    7,084    5,743    17,717 
Investment securities   992,797    1,017,274    1,040,339    775,025    795,922    821,491    855,707 
Interest-earning assets   7,428,534    7,532,664    7,285,731    5,155,928    5,049,229    4,988,704    4,919,927 
Total assets   8,034,565    8,152,600    7,894,918    5,446,675    5,334,788    5,270,521    5,201,164 
Noninterest-bearing demand deposits   1,902,537    1,910,690    1,767,523    1,264,392    1,312,710    1,302,536    1,234,505 
Total deposits   5,898,394    5,837,826    5,627,206    3,963,662    3,955,792    3,885,445    3,799,198 
Customer repurchase agreements   142,669    139,647    149,323    119,359    146,569    127,312    141,244 
Total interest-bearing liabilities   5,042,431    5,168,055    5,057,645    3,584,462    3,422,568    3,380,221    3,380,937 
Total stockholders' equity   1,042,716    1,026,349    1,014,608    563,816    564,480    554,683    544,261 
Quarterly Average Balance Sheets:                                   
Residential mortgage loans  $1,122,946   $1,034,062   $1,117,478   $903,660   $880,782   $860,081   $847,896 
Residential construction loans   215,578    223,171    193,327    171,239    172,921    169,130    157,152 
Commercial AD&C loans   632,354    576,076    582,876    289,737    291,569    302,924    310,325 
Commercial investor real estate loans   1,905,427    1,924,759    1,988,340    1,114,960    1,090,641    1,010,389    945,080 
Commercial owner occupied real estate loans   1,190,865    1,184,409    940,065    842,642    808,802    776,279    774,964 
Commercial business loans   700,791    666,280    657,372    454,330    459,779    454,724    462,444 
Consumer loans   524,605    531,965    538,198    458,378    457,526    461,672    458,162 
  Total loans   6,292,566    6,140,722    6,017,656    4,234,946    4,162,020    4,035,199    3,956,023 
Loans held for sale   29,939    25,403    35,768    5,862    7,093    7,077    7,402 
Investment securities   996,365    1,028,306    1,062,325    780,522    813,179    842,837    818,287 
Interest-earning assets   7,372,536    7,311,272    7,212,878    5,061,075    5,019,133    4,922,389    4,829,208 
Total assets   7,986,525    7,926,735    7,841,611    5,346,625    5,297,368    5,202,398    5,111,698 
Noninterest-bearing demand deposits   1,822,931    1,796,644    1,651,258    1,322,157    1,293,470    1,251,396    1,159,715 
Total deposits   5,783,992    5,657,420    5,489,715    3,991,936    3,916,657    3,810,180    3,673,731 
Customer repurchase agreements   139,809    148,539    136,694    139,125    133,145    132,552    128,485 
Total interest-bearing liabilities   5,076,717    5,058,016    5,116,904    3,419,669    3,407,279    3,360,128    3,375,002 
Total stockholders' equity   1,030,167    1,013,081    1,010,106    563,506    557,282    547,229    535,308 
Financial Measures:                                   
Average equity to average assets   12.90%   12.78%   12.88%   10.54%   10.52%   10.52%   10.47%
Investment securities to earning assets   13.36%   13.50%   14.28%   15.03%   15.76%   16.47%   17.39%
Loans to earning assets   86.01%   82.97%   83.20%   83.68%   83.06%   82.85%   81.16%
Loans to assets   79.52%   76.66%   76.78%   79.21%   78.62%   78.42%   76.77%
Loans to deposits   108.32%   107.06%   107.72%   108.85%   106.02%   106.38%   105.10%
Capital Measures:                                   
Tier 1 leverage  (1)   9.46%   9.27%   9.21%   9.24%   9.28%   9.26%   9.26%
Tier 1 capital to risk-weighted assets  (1)   11.18%   11.01%   11.08%   10.84%   10.99%   10.96%   11.02%
Total regulatory capital to risk-weighted assets  (1)   12.38%   12.19%   12.27%   11.85%   12.01%   12.00%   12.06%
Common equity tier 1 capital to risk-weighted assets   (1)   11.02%   10.85%   10.92%   10.84%   10.99%   10.96%   11.02%
Book value per share  $29.35   $28.90   $28.61   $23.50   $23.53   $23.13   $22.74 
Outstanding shares   35,521,541    35,511,943    35,463,269    23,996,293    23,990,370    23,983,997    23,930,165 

 

(1)Estimated ratio at September 30, 2018

 

 

 

  

Sandy Spring Bancorp, Inc. and Subsidiaries

LOAN PORTFOLIO QUALITY DETAIL - UNAUDITED

 

   2018   2017 
(Dollars in thousands)  September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31, 
Non-Performing Assets:                                   
Loans 90 days past due:                                   
   Commercial business  $150   $6   $-   $-   $-   $-   $- 
   Commercial real estate:                                   
     Commercial AD&C   1,261    -    -    -    -    -    - 
     Commercial investor real estate   -    -    -    -    -    -    - 
     Commercial owner occupied real estate   13    112    -    -    -    424    - 
   Consumer   563    -    126    -    1    4    - 
   Residential real estate:                                   
     Residential mortgage   -    -    -    225    225    -    232 
     Residential construction   -    -    -    -    -    -    - 
Total loans 90 days past due   1,987    118    126    225    226    428    232 
Non-accrual loans:                                   
   Commercial business   6,352    6,883    6,634    6,703    6,091    6,807    4,849 
   Commercial real estate:                                   
     Commercial AD&C   136    136    136    136    137    137    137 
     Commercial investor real estate   5,861    5,878    5,813    5,575    5,589    6,934    7,970 
     Commercial owner occupied real estate   3,352    3,440    3,524    3,582    5,012    4,926    5,106 
   Consumer   4,098    4,298    3,244    2,967    3,152    3,111    3,058 
   Residential real estate:                                   
     Residential mortgage   9,134    6,251    7,063    7,196    7,345    7,101    6,908 
     Residential construction   163    168    174    177    182    187    189 
Total non-accrual loans   29,096    27,054    26,588    26,336    27,508    29,203    28,217 
Total restructured loans - accruing   2,224    1,663    2,678    2,788    2,471    2,569    2,409 
Total non-performing loans   33,307    28,835    29,392    29,349    30,205    32,200    30,858 
Other assets and real estate owned (OREO)   2,118    2,361    2,761    2,253    1,448    1,460    1,294 
Total non-performing assets  $35,425   $31,196   $32,153   $31,602   $31,653   $33,660   $32,152 

 

   For the Quarter Ended, 
   September 30,   June 30,   March 31,   December 31,   September 30,   June 30,   March 31, 
(Dollars in thousands)  2018   2018   2018   2017   2017   2017   2017 
Analysis of Non-accrual Loan Activity:                            
Balance at beginning of period  $ 27,054   $ 26,588   $ 26,336   $ 27,508   $ 29,203   $ 28,217   $ 29,211 
   Non-accrual balances transferred to OREO   -    -    (289)   (888)   (411)   (175)   (113)
   Non-accrual balances charged-off   (91)   (144)   (411)   (446)   (1,127)   (179)   (391)
   Net payments or draws   (1,777)   (1,635)   (357)   (1,707)   (1,869)   (1,804)   (1,382)
   Loans placed on non-accrual   4,193    2,245    1,309    2,504    1,712    3,144    1,461 
   Non-accrual loans brought current   (283)   -    -    (635)   -    -    (569)
Balance at end of period  $29,096   $27,054   $26,588   $26,336   $27,508   $29,203   $28,217 
                                    
Analysis of Allowance for Loan Losses:                                   
Balance at beginning of period  $48,493   $46,931   $45,257   $44,924   $45,079   $43,861   $44,067 
Provision for loan losses   1,890    1,733    1,997    527    934    1,322    194 
Less loans charged-off, net of recoveries:                                   
   Commercial business   (49)   (73)   322    48    1,029    107    260 
   Commercial real estate:                                   
     Commercial AD&C   -    -    (62)   -    -    (103)   - 
     Commercial investor real estate   (49)   (8)   (8)   (8)   (10)   (78)   (5)
     Commercial owner occupied real estate   -    -    -    243    5    -    - 
   Consumer   85    244    99    (71)   103    189    167 
   Residential real estate:                                   
     Residential mortgage   (11)   13    (22)   (12)   (32)   (3)   (16)
     Residential construction   (2)   (5)   (6)   (6)   (6)   (8)   (6)
Net charge-offs   (26)   171    323    194    1,089    104    400 
Balance at end of period  $50,409   $48,493   $46,931   $45,257   $44,924   $45,079   $43,861 
                                    
Asset Quality Ratios:                                   
Non-performing loans to total loans   0.52%   0.46%   0.48%   0.68%   0.72%   0.78%   0.77%
Non-performing assets to total assets   0.44%   0.38%   0.41%   0.58%   0.59%   0.64%   0.62%
Allowance for loan losses to loans   0.79%   0.78%   0.77%   1.05%   1.07%   1.09%   1.10%
Allowance for loan losses to non-performing loans   151.35%   168.17%   159.67%   154.20%   148.73%   140.00%   142.14%
Annualized net charge-offs to average loans   0.00%   0.01%   0.02%   0.02%   0.10%   0.01%   0.04%

 

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

                              

   Three Months Ended September 30, 
   2018   2017 
           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  $1,122,946   $10,485    3.73%  $880,782   $7,772    3.53%
Residential construction loans   215,578    2,160    3.98    172,921    1,641    3.77 
Total mortgage loans   1,338,524    12,645    3.77    1,053,703    9,413    3.57 
Commercial AD&C loans   632,354    9,185    5.76    291,569    3,705    5.04 
Commercial investor real estate loans   1,905,427    25,735    5.36    1,090,641    12,279    4.47 
Commercial owner occupied real estate loans   1,190,865    14,484    4.83    808,802    9,492    4.66 
Commercial business loans   700,791    9,196    5.21    459,779    5,252    4.53 
Total commercial loans   4,429,437    58,600    5.25    2,650,791    30,728    4.60 
Consumer loans   524,605    6,011    4.59    457,526    4,395    3.84 
  Total loans (2)   6,292,566    77,256    4.88    4,162,020    44,536    4.25 
Loans held for sale   29,939    336    4.49    7,093    119    6.69 
Taxable securities   720,317    5,342    2.97    512,420    3,531    2.76 
Tax-exempt securities (3)   276,048    2,442    3.54    300,759    3,175    4.22 
Total investment securities   996,365    7,784    3.12    813,179    6,706    3.30 
Interest-bearing deposits with banks   51,683    211    1.62    34,007    108    1.26 
Federal funds sold   1,983    8    1.58    2,834    8    1.16 
  Total interest-earning assets   7,372,536    85,595    4.61    5,019,133    51,477    4.08 
                               
Less:  allowance for loan losses   (49,194)             (45,546)          
Cash and due from banks   64,653              48,221           
Premises and equipment, net   62,452              53,938           
Other assets   536,078              221,622           
   Total assets  $7,986,525             $5,297,368           
                               
Liabilities and Stockholders' Equity                              
Interest-bearing demand deposits  $703,905    231    0.13%  $615,250    135    0.09%
Regular savings deposits   347,299    93    0.11    326,827    57    0.07 
Money market savings deposits   1,625,481    5,330    1.30    1,002,779    1,479    0.59 
Time deposits   1,284,376    5,119    1.58    678,331    2,030    1.19 
   Total interest-bearing deposits   3,961,061    10,773    1.08    2,623,187    3,701    0.56 
Other borrowings   188,133    383    0.81    133,145    83    0.25 
Advances from FHLB   890,040    5,141    2.29    650,947    3,108    1.89 
Subordinated debentures   37,483    486    5.19    -    -    - 
  Total interest-bearing liabilities   5,076,717    16,783    1.31    3,407,279    6,892    0.80 
                               
Noninterest-bearing demand deposits   1,822,931              1,293,470           
Other liabilities   56,710              39,337           
Stockholders' equity   1,030,167              557,282           
  Total liabilities and stockholders' equity  $7,986,525             $5,297,368           
                               
Net interest income and spread       $68,812    3.30%       $44,585    3.28%
  Less: tax-equivalent adjustment        1,221              1,888      
Net interest income       $67,591             $42,697      
                               
Interest income/earning assets             4.61%             4.08%
Interest expense/earning assets             0.90              0.54 
  Net interest margin             3.71%             3.54%

 

(1)Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 26.13% and 39.88% for 2018 and 2017 respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $1.2 million and $1.9 million in 2018 and 2017, respectively.
(2)Non-accrual loans are included in the average balances.
(3)Includes only investments that are exempt from federal taxes.

  

 

 

 

Sandy Spring Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES - UNAUDITED

                               

   Nine Months Ended September 30, 
       2018           2017     
           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  $1,091,515   $30,280    3.70%  $863,040   $22,651    3.50%
Residential construction loans   210,774    6,203    3.93    166,459    4,656    3.74 
Total mortgage loans   1,302,289    36,483    3.74    1,029,499    27,307    3.54 
Commercial AD&C loans   597,283    25,592    5.73    301,537    11,126    4.93 
Commercial investor real estate loans   1,939,205    71,824    4.95    1,015,903    33,978    4.47 
Commercial owner occupied real estate loans   1,106,032    39,051    4.72    786,805    28,501    4.84 
Commercial business loans   674,973    26,052    5.16    458,973    15,321    4.46 
Total commercial loans   4,317,493    162,519    5.03    2,563,218    88,926    4.64 
Consumer loans   531,539    17,310    4.41    459,118    12,496    3.67 
  Total loans (2)   6,151,321    216,312    4.70    4,051,835    128,729    4.25 
Loans held for sale   30,349    983    4.32    7,189    273    5.06 
Taxable securities   738,580    15,891    2.87    526,931    10,944    2.77 
Tax-exempt securities (3)   290,177    7,662    3.52    297,818    9,455    4.23 
Total investment securities   1,028,757    23,553    3.05    824,749    20,399    3.30 
Interest-bearing deposits with banks   86,446    1,082    1.67    38,006    289    1.02 
Federal funds sold   2,607    28    1.41    2,493    18    0.97 
  Total interest-earning assets   7,299,480    241,958    4.43    4,924,272    149,708    4.06 
                               
Less:  allowance for loan losses   (47,533)             (44,324)          
Cash and due from banks   69,301              48,184           
Premises and equipment, net   61,507              53,680           
Other assets   535,778              222,682           
   Total assets  $7,918,533             $5,204,494           
                               
Liabilities and Stockholders' Equity                              
Interest-bearing demand deposits  $730,520    657    0.12%  $613,498    372    0.08%
Regular savings deposits   390,231    488    0.17    322,683    163    0.07 
Money market savings deposits   1,520,953    13,028    1.15    992,069    3,333    0.45 
Time deposits   1,245,510    12,410    1.33    637,478    5,344    1.12 
   Total interest-bearing deposits   3,887,214    26,583    0.91    2,565,728    9,212    0.48 
Other borrowings   158,939    599    0.50    131,412    238    0.24 
Advances from FHLB   1,000,060    15,557    2.08    683,231    9,385    1.84 
Subordinated debentures   37,518    1,436    5.11    549    12    2.93 
  Total interest-bearing liabilities   5,083,731    44,175    1.16    3,380,920    18,847    0.75 
                               
Noninterest-bearing demand deposits   1,757,573              1,235,350           
Other liabilities   59,371              41,537           
Stockholders' equity   1,017,858              546,687           
  Total liabilities and stockholders' equity  $7,918,533             $5,204,494           
                               
Net interest income and spread       $197,783    3.27%       $130,861    3.31%
  Less: tax-equivalent adjustment        3,483              5,585      
Net interest income       $194,300             $125,276      
                               
Interest income/earning assets             4.43%             4.06%
Interest expense/earning assets             0.81              0.51 
  Net interest margin             3.62%             3.55%

  

(1)Tax-equivalent income has been adjusted using the combined marginal federal and state rate of 26.13% and 39.88% for 2018 and 2017 respectively. The annualized taxable-equivalent adjustments utilized in the above table to compute yields aggregated to $3.5 million and $5.6 million in 2018 and 2017, respectively.
(2)Non-accrual loans are included in the average balances.
(3)Includes only investments that are exempt from federal taxes.