Sandy Spring Bancorp(US:SASR)2024-05-03 11:30Financial Performance - For Q1 2024, Sandy Spring Bancorp reported net income of $20.4 million ($0.45 per diluted share), a decrease of 60.3% year-over-year from $51.3 million ($1.14 per diluted share) in Q1 2023[135]. - Net income for the three months ended March 31, 2024, was $20.4 million ($0.45 per diluted common share), down from $51.3 million ($1.14 per diluted common share) in the same period last year, primarily due to a decline in net interest income[144]. - Core earnings for the three months ended March 31, 2024, were $21.9 million, down from $52.3 million in the same period last year, reflecting the impact of increased provisions for credit losses and lower net interest income[147]. - Core earnings for Q1 2024 were $21.9 million ($0.49 per diluted share), down from $52.3 million ($1.16 per diluted share) in Q1 2023, reflecting a significant decrease in net income[169]. Asset and Loan Management - Total assets decreased by 1% to $13.9 billion as of March 31, 2024, compared to $14.0 billion at December 31, 2023[136]. - Total loans remained stable at $11.4 billion, with a reduction of $106.5 million in investor commercial real estate loans and an increase of $101.3 million in the AD&C portfolio[136]. - Total loan balances remained relatively unchanged at $11.4 billion, with a 10% increase in the AD&C portfolio, while commercial real estate loans decreased by 2%[176]. - The loan to deposit ratio declined to 101% at March 31, 2024, from 103% at December 31, 2023, reflecting stable loan balances and increased deposits[175]. Deposits and Funding - Deposits increased by $230.7 million or 2% to $11.2 billion, driven by a $326.9 million increase in interest-bearing deposits[136]. - Deposit balances increased to $11.2 billion at March 31, 2024, up from $11.0 billion at December 31, 2023, driven by higher yielding savings accounts[175]. - Core deposits represented 93% of total deposits at the end of the current quarter, up from 92% at December 31, 2023[182]. - Approximately $3.7 billion or 33% of total deposits exceeded the $250,000 insured limit provided by the FDIC at March 31, 2024[183]. Interest Income and Expense - Net interest income declined by $2.4 million or 3% quarter-over-quarter and by $18.0 million or 18% year-over-year[136]. - The net interest margin was 2.41% for Q1 2024, down from 2.99% in Q1 2023[136]. - Net interest income decreased by $18.0 million or 18% year-over-year, with interest income growing by $14.7 million but offset by a $32.6 million increase in interest expense[145]. - The average rate paid on interest-bearing liabilities increased by 115 basis points, from 2.49% in Q1 2023 to 3.64% in Q1 2024, driven by rising rates across all deposit categories[151]. Credit Losses and Non-Performing Loans - Provision for credit losses was $3.3 million, a significant increase from a credit of $18.9 million in the prior year quarter[136]. - The ratio of non-performing loans to total loans improved to 0.74% from 0.81% at December 31, 2023, but increased from 0.41% at March 31, 2023[142]. - The allowance for credit losses was $123.1 million at March 31, 2024, representing 1.08% of total loans, an increase from 1.06% at December 31, 2023[210]. - The allowance for credit losses represented 146% of non-performing loans at March 31, 2024, compared to 132% at December 31, 2023[210]. Non-Interest Income and Expenses - Non-interest income increased by 11% or $1.8 million compared to the previous quarter and by 15% or $2.4 million year-over-year[140]. - Non-interest income increased by 15% or $2.4 million compared to the prior year quarter, driven by higher wealth management income and increased service charges[145]. - Total non-interest expense increased by 3% to $68.0 million for Q1 2024, with significant increases in professional fees and other operating expenses[162]. - Service charges on deposit accounts grew by 18%, with a 26% increase in service charge income on commercial demand deposit accounts[161]. Tax and Efficiency Ratios - The company reported an income tax expense of $6.9 million in Q1 2024, down from $17.2 million in Q1 2023, reflecting a decrease in pre-tax earnings[163]. - The effective tax rate for Q1 2024 was 25.4%, slightly up from 25.2% in the same period of 2023[163]. - For the three months ended March 31, 2024, GAAP efficiency ratio increased to 69.60% from 58.55% in the same period of 2023, attributed to a decline in revenues and a rise in non-interest expenses[171]. - The non-GAAP efficiency ratio for the current year was 66.73%, compared to 56.87% for the prior year, indicating a decline in operational efficiency[171]. Liquidity and Capital Position - The company’s liquidity position was deemed appropriate based on its liquidity analysis as of March 31, 2024[234]. - Contingent liquidity totaled $6.3 billion, representing 170% of uninsured deposits as of March 31, 2024[233]. - The company had liquid assets of $129.4 million as of March 31, 2024[235]. - The company maintains a liability of $0.5 million for probable losses due to repurchases related to fixed-rate residential mortgage originations[203].