Sandy Spring Bancorp(US:SASR)2020-07-23 23:16Financial Data and Key Metrics Changes - The company reported a net loss of $14.3 million or $0.31 per share for Q2 2020, compared to a net income of $28.3 million or $0.79 per diluted share for Q2 2019 and $10 million or $0.28 per diluted share for Q1 2020 [12] - The provision for credit losses was $58.7 million, driven by a negative change in the economic forecast and acquisition-related expenses [12][26] - Total assets grew to $13.3 billion from $8.4 billion year-over-year, with deposit growth of 58% and loan growth of 58% to $10.3 billion [14] Business Line Data and Key Metrics Changes - Fee income increased by 38% or $6.4 million from the prior quarter, with significant contributions from mortgage banking activities and wealth management income [17] - Non-interest expense grew by 95% or $41.6 million year-over-year, primarily due to merger and acquisition expenses [20] - The efficiency ratio improved to 43.85% from 51.71% in Q2 2019, reflecting strong revenue growth [22] Market Data and Key Metrics Changes - Non-performing loans increased to 77 basis points of total loans, totaling $79.9 million, compared to $37.7 million a year prior [23] - The allowance for credit losses was $163.5 million, representing 1.58% of outstanding loans [26] Company Strategy and Development Direction - The company is focused on long-term earnings growth from recent acquisitions and is on track for the full conversion of Revere systems [9] - The company emphasized its role as a community bank, particularly during the COVID-19 pandemic, by supporting local businesses through the Paycheck Protection Program [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the COVID-19 pandemic but expressed confidence in the company's ability to weather the current environment [9] - The company remains focused on employee and client safety while strategically moving forward [58] Other Important Information - The company donated $600,000 to COVID-19 relief efforts at local hospitals, reinforcing its commitment to community support [59] - The company received recognition as a top workplace and one of America's best banks, highlighting its strong employee engagement and customer service [57] Q&A Session Summary Question: What is the status of scheduled deferrals? - Management indicated that there are still a significant number of deferrals to work through, with early returns being positive [64] Question: What is the impact of PPP on margins? - Management noted that the ongoing initial marks will likely contribute about 5 to 6 basis points to future margins, with current guidance suggesting a margin range of 315 to 320 basis points [68] Question: How are expenses expected to trend moving forward? - Management expects a more normalized combined run rate by early 2021, with an efficiency ratio targeted in the high 40s to 50% range [77] Question: What is the outlook for non-performing loans? - Management clarified that the increase in non-performing loans was due to three large relationships, which are not necessarily COVID-related [78] Question: How is the company approaching dividend payouts? - Management stated there have been no specific conversations regarding dividend restrictions for community banks, and they will evaluate dividends based on core earnings [82]