SASR - Earnings call transcript Q1 2021 | Sandy Spring Bancorp, Inc.

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Operator

Good afternoon, everyone, and welcome to the Sandy Spring Bancorp, Inc. Earnings Conference Call and Webcast for the First Quarter of 2021. All participants will be in a listen-only mode. [Operator Instructions].After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions].For your information, today’s event is being recorded. would turn I over conference time, Mr. to this like the to call At Schrider. Dan ahead. go please Sir,

Daniel Schrider

General Thank you, Sandy afternoon, Today, our for and good first we conference us for the you call for will joining I’m Spring Financial an my colleagues by also impact to to up-to-date of This Officer; response discuss here quarter Spring Aaron COVID-XX pandemic. Sandy is Mantua, joined Chief bring Counsel Dan performance our everyone. Bancorp’s from Schrider XXXX. Bancorp. Thank and Kaslow, on speaking, for and Phil you

call to available There’s be call, As is usual, the of a and and investors, on media. our today’s live today’s webcast open all website will analysts later replay a today.

from Aaron Aaron? your So quarter the before we will the statement. Harbor and questions, get Safe customary highlights covering give taking started

Aaron Kaslow

expectations, from of significant Thank future make of risks Sandy impact actual assessments those the and which other Spring upon are uncertainties future Good and subject forward-looking conditions, their laws to uncertainties, These and expected statements will based significant interest to because risk intentions, of materially of uncertainties. Sandy may of Forward-Looking management’s the including behavior, these achieve subject that Spring they risks market and a credit other statements economic costs and estimates of goals, Statements pandemic, or statements forward-looking indicated. benefits, differ and results you, estimates nature, Bancorp of by rates, very COVID-XX variety Because and are by affected afternoon, matters, are projections ability webcast and market These are uncertainties. Bancorp’s and other of losses future regulations to statements subject to this Dan. everyone. include financial goals. of other in the assessments future earnings

its necessarily In of do future company’s indicate addition, past results not operations results. the

Daniel Schrider

very and quarter this review I many promising trends our morning. then the the I this of materials and credit earlier our relates outlook. thank joining us we especially with and to Today, quarter. you are today. through resiliency first for performance portfolio Overall, Aaron, pleased our will Thanks, our walk again in results, financials, will it loan supplemental as our Phil issued you all There we are and

to ahead. more continue with employees our later And vaccinations position a be reopen back recover And look our in on we provide weeks of call. We offices from region color the and clients will the great today’s our clients our months I in our in pandemic. more to to to and welcoming rise, return-to-work in forward and this plans help our on

acquisition or income to pandemic. gains. million quarter’s Currently, and for quarter early and were the compared compared through first of of credit that Phil share the reversal credit of compare million the which metrics the per XXXX. the financial million. will income to on will favorable trends, have the CECL, impact per demonstrate Total highlights. grew economic credit For $XX.X quarter billion a the $XX.X the XXXX. earnings was $XX.X led $XX by grew and year-to-year first now, the FHLB rounds $X.XX of program. explain in the linked This March net to materials. for to on share have our large prepayment $X.XX linked provision diluted of $XX.X provision as quarter. The $XX.X also the expenses, to million Revere exclude growth diluted credit institutions the fourth quarter I Today, penalties and our XXXX XXXX, diluted or later, M&A primarily ended and assets per due redemptions improving share share more $X.XX I XX%. of per provision when adopted Like compared conditions or to Core for detail share for credit of losses diluted is though, $X.X of earlier losses, supplemental securities this the million million results actual XXXX per for we of quarter quarter in XX% $XX.X will of period, we for quarter of well of credit the $X.XX the review $XX.X our taken million touch provisions current run million The many quarter’s during per the financial or participation same reported PPP loans of XXXX first $X.XX diluted investment quarter Core or in or XX first earnings net second quarter Bank to for both in $X.XX as diluted share of the net the income

loans loans consumer total and PPP, X%. or to quarter, growing to commercial Excluding loans billion billion grew year $X.X XX% with $X.X the increasing XX% prior compared

During loans, out and is the this portfolio, refinances estate mortgage real total excluding $XXX commercial high of portfolio compared temporary seasonal of declined our level We the of million lower to quarter a our believe quarter. PPP, first XXXX, reflects decline linked out loan and early production. of payoffs

are commercial is for the The vaccinated well increasing an population originations us. are forecast we the now a liquidity. both significant aided in credit growth. reasons, by improved, and have in resilient behind and highly of we position team economic a many very unique terms positioned now of future has scale portfolio of a percentage For bankers, sophistication PPP scalable also market, and

to and confident our clients in more, our company. and grow of continue all For reasons our ability are these serve to we

franchise. continues underlying be deposit the to an base strength deposit our of front, On our

one to and on result deposits estimated the rate exceeding increasing and income income Once management one Mortgage be our was from throughout are on despite acquisition a PPP-related midst been a are banking of income primarily at pandemic, to to compared has The PPP-related companies funds categories. having at XX% XX% past deposit the were of income. demand retain deposits increased run was round with year round two. are revere basis, retained and the prior million This end during to the checking interest-bearing million million. growing growing $XX.X the deposits all mortgage volume to its majority mortgages approximately sold compared result growth $XX.X from the well increase during is ability approximately was cycle million XX%. the the quarter. $XX.X million And are XX-month a closer period, and clients those XX% Non-interest quarter decline linked-quarter the in remaining XX%, non-interest-bearing of pandemic. banking our Over year this XX%. quarter. in compared quarter the as of in margins prior driven the million, in by This current integrating and billion $X decreasing deposits very million mortgage $X.X the a again, rate, or course. XXX% refinance wealth strong the banking deposits income retention XX% declined represent The a $X.X of a quarter. $XXX the $XXX to of deposits from are by increase as round XX% and to by credit, the

shared, significant remain previously year. of this banking fee-based mortgage our a part revenue will As we

here is continue inventory, However, at expected to to and Spring. given both production nationally the Sandy extremely limited decline, purchase mortgage

quarter in full on grow increased in remain wealth compared Jackson, competitive and $X.X Rembert and our pleased year management are X.XX% Bank. space. RPJ, and marked wealth our charged-off fees to from of differentiate significant. quarter this we income a past the grew Wealth our earned with wealth assets with This also quarter. early to billion $X acquisition Other or Pendleton continuing months, Financial this and Spring more and presence prepayment market. to over Trust, million from income million results income compared $XXX,XXX of last across loan a have Services Sandy RPJ,West loan recovery wealth in first ourselves due the or the from increasing Revere under been the management to year, payoffs non-interest $X.X linked With previously the business increased We XX same than focused

the XXXX first for of interest We quarter the stability prior to for X.XX% continue in margin same be the the of compared year. the very pleased X.XX% with to quarter was margin. Net

XX by impact replace would by with of have decline as The FHLB of amortization basis funding the quarter overall fell quarter. by the differential, we deposits are the from of $X.X ability deposit basis, The basis and to been go-forward cost value we last stability On rate seeing favorable continue of of fair million declined Excluding the was the reduce by cost as in being XXX XX marks, margin the points, of cost cost-effective on margin XX for points. to X.XX% the current more average CDs the reduced points. decline for funding recently basis category overall net the compared representing continue the X.XX% cost of the interest-bearing redeemed largest rate advances at in interest driven a is to should liabilities XXXX. points interest-bearing average net our primarily quarter quarter a alternatives basis up with our first to

expense year side, XX% million non-interest or to compared On the increased quarter. prior the expense $XX.X

our with rate million included of of This of in average $X.X million will $XXX prepayment a support penalties X.XX%. the margin. to efforts preserve stable quarter’s results from action This early advances redemption FHLB an

in quarter to penalties This Excluding assets. prepayment compared year ratio $XX.XX and quarter $XX.X an $XX.X consistent of non-GAAP for linked the costs million in from efficiency as After quarter in for increase both amortization M&A ratio year these the expenses, the of fourth growth non-GAAP was compensation of due and the current non-GAAP decrease non-interest well the was with and a XXXX the and to last for operational the quarter The the million of growth intangible associated XXXX. penalties, non-interest RPJ expense. the are in quarter. outpacing quarter $XX.XX XX% for expenses and first current result first acquisitions the to expense with revenue, $XX.XX grew year-over-year of the efficiency Revere as insurance FDIC non-interest adjusting the

to first Looking to to outstanding while status million of linked efficiency. the quarter. by nonaccrual the loans needed quarter success, underlying basis these loans large $XXX.X loans And losses $XX.X people for quarter totaled a relationships will decreased compared XXX points these or and quarter. credit to quality. in was $XX.X of loans for large XXX% Nonperforming of million from for future basis growth and within borrowing invest quarter linked Nonperforming to outstanding operating we respectively. current And metric greater nonperforming credit into are for FHLB XXXX first the reserves we XXXX ahead, to advanced of to full $XXX.X this a to X.XX% of targeted the range penalties. to the settle revenues X.XX% of no expenses to efficiency trends. we both of of as Loans dependent XXX% to limited in the the and of revenue We values were $XXX,XXX XX% comparable number be expense of anticipate levels prepayment continue company levels absent current allowance and year $XXX.X relate fourth million in loans levels, compared we $X.X net loans mortgage to the that charge-offs technologies collateral charge-offs and encouraged relationships and individual The compared points. net the this of are in nonperforming million and from identifying end. for XXXX, decline to or million And require opportunities at also look million The recorded sector primarily to expect to manage to XX%. collateral. due XX sufficient range hospitality Shifting very

equity the allowance of X.XX%, tangible Excluding segment increased loans increase common as to XX, alone. to increase of business assets the XX, issuance The would of $X.X to at credit percentage Tangible at X.X% at acquisition. PPP X.XX% year-over-year goodwill the reflects Revere in in loans, as a to March or XXXX, result commercial total with equity $XXX.X losses in billion associated compared outstanding and X.XX% million a common also of equity the change or and the intangible March assets Revere looking XXXX, tangible acquisition.

press of be common Excluding supplemental of capital equity ratio of capital a XX with March leverage from Tier Tier risk-based in conjunction ratio receiving we a X.XX%. portfolio XX.XX%, increase of Tier $XXX PPP release. million, with of see loan March X% of X And The ratio risk-based common capital accommodations. issued our The program X tangible slight payment Slide will as totaled can information the On our move tangible we resulting this additional loans hotel accommodations specific at X, XX.XX%,a you risk-based at now last having accommodations. XX.XX% to granted that and an that in and relationships payment quarter morning after come one ratio of the X.XX%. ratio were from the the time had granted was accommodation due the a that credit to two company deferral was would out assets X total first XX, equity impact

to of move industry update to submitted longer applications XX.X% accepting specific you and have year. all accommodations forgiveness. XX% on new through broken and loans helping and round to the On received of shared of forgiven Slides focused second in applied CECL pause it forgiveness are $XXX million, capital PPP fall balances X, the two, talk X PPP X,XXX of as and Phil round slide a our X, calendar payment originated the the two majority which have the loans in total are If forgiveness to out and Slide to will we In have are have detailed over our and in for forgiveness and full of and have expect on no forgiveness the rounds our XX. applications both SBA quarters. efforts, all for now, for the and in and loans we and And clients position. we process we turn I we this one four round updated of one our through to each you And past information, segment Outstanding program. participation March

Philip Mantua

to the have the for key movement XXXX. waterfall allowance, during I’m everyone. the the of up of quarter It X on you, into Dan. the quarter. components pick our this broken traditional Thank with to we drivers going our Slide afternoon. where of Good afternoon, reflect Pleasure the be supplemental here of you is in representation first deck that change

the As over see, change quarter factor you level the was the reduction the CECL unemployment course current a key in significant in by rate, methodology. economic driven can our the of the projected near-term of primarily

variables. of is comparison the slide, On recent X, next the and Slide a forecast current economic

released baseline unemployment and COVID-XX CECL Our effects a Moody’s April forecast this use integrates was X. on the continues year methodology baseline that quarter the first for This of that to version forecast X.X% was an and local rate of for XXXX, a scheduled it of market the that by which is to was previous is in has already a ultimately recover recover ultimately peaked our essentially it level forecast. almost to early X.X% than in lower portrays

include taken to related believe that to time. an in this change as potential our quarters, we segments reflect levels though, industry Conversely next programs the better outcome you loans. in into portfolio or factors the and include a where million continues $XX.X our of the provide approach of any chosen of significant in X, period, qualitative that portfolio what we So on potential retail-based quarter hotel, or X.XX%, exist factors the to based bottom index at our have by take office the waterfall significant our business reserve. additional noted use consideration on quarter of to of as our from to adjusting should also total is risk concentration were On could business reasonable time perceived exclude a of variables outlined includes additional the reserve the they mitigating that approach this although impact reserve amount the the such earlier would of qualitative horizon which slide PPP. granularity total outlook factor reserve lines. reserve and still on reflected government majority related are footnote We in outstanding, the two the portions is be additional long-term increase prior price where We the the attributed to not the of additional dollar the This presented. the as X.XX% positive feel on the captures our required quarter. to our loans loans this we we factor bankruptcies that other certain be declined balance, X.XX% year-over-year on see stance is segment outstandings, the to the from is conservative continue to Slide are forecast in the portfolio, this the comfortable and slide, reserve some most view, reserve at component further can supportable we growth two-year PPP very amount commercial note no would the PPP risk be could the less be continue would loans. reserve the the Similar And a In as year-over-year in the but when a here again, These home in of balance to uncertainty last forecasted. that, presented business total in slide, determining to improvement there and #X. commercial X.XX% and those macroeconomic also illustrated of

Finally, measure, of items the mentioned to Dan some brief ratios. on ratios adjusted PPP XX is on of resultant to the impact our an the pertinent current reflect the tangible Included explanations comments in on and earlier. regarding their is assets of Slide ratio those as tangible certain capital loans impact equity treatment trend with

a strength nicely capital reported continue this of improved about as primarily our position the quarter, We earnings. to as the result our of feel all metrics confident of

that CECL baseline Moody’s updated case. recently the where have to baseline COVID economy in provide forecast based severe we have also our constructed the carry capital utilize in we ongoing for done capital have and a and is it We past, situation forecast continuing Dan. we confident we and severe a continue us have growth. remainder future Having That incorporated the test same stress be calculations us so, SX our in strong of this basis the to base through the to pandemic as scenario,

Daniel Schrider

Phil. Thanks,

briefly like to Now updates. we questions, would move to cover before I few take your other a just

in As look of I our clients employees mentioned earlier, and more release, the our back welcoming and to forward to offices. we noted

increase have at and the we capacity, So weeks will percentage months in we but been far, a XX% operating that ahead.

are do will and flexible will that home, we have, We about so and much with going that We but as our in effectively. lessons is also begin our these apply And working many we we collaboration to this efficiently what’s others lobbies clients included our move efforts, to forward, relationships to believe reopen return to so colleagues. our mindset and offices. And like with our return learned jobs best staying technology using to more in these summer. from the leave person branch our we will work for we

branch I’m in Convention are are goes pandemic. our report and released to continues business see the financial from proud to vibrant reporting Corporate our our environment. is Report. presence in transparency clients, to communities to And located This Washington a employees, in great report Center. pleased especially retail first share the we Last potential, committed our We in near Annual the how it as This also D.C. our you. recover our community and the progress As city. support well February, branch beyond this with full-service show relates to network, we region as we Responsibility to and the we our month, our opened expanded of branch growth that fourth as deal

report site. Investor at can haven’t it, Relations find sandyspringbank.com the you If you our on and seen

Forbes to of talent. community its a demonstrates list Spring Our premier and Banks. recently, XXX of a company to XXXX top Sandy employer that are bank, named earn an Best Most America’s Bank with company continues recognition we choice

mentioned I unique in earlier peer have in As we and truly our and among today our position prior quarters, a market group.

products $XX banking, private banking nearly meet a we needs. mortgage, of the scale and size, to our have and company, clients’ trust, billion As insurance wealth diversification

in because the and in are work is sense national they a in communities decision-making several serve taking desirable exist in and a and surrounded We Amazon’s our they feel live friends, we all of region, local. neighbors this highly hospital to businesses headquartered market. and federal care operate employees of other are HQX ownership are pride government by the many home clients all we in government and international our our the and Greater region is community and universities in. Our systems. are a presence. top-tier contracting companies and we We here. thrive Washington and massive Small

as forward, and we endless strength. opportunities we company existing our see on our So grow build to look

our comments for general that today, now questions. will So and to concludes move we your

can So you Jamie, question. have first the

company identify helpful. could affiliation the you come you as on and that your really will the If you’re name with line be

Operator

Casey [Operator Instructions] Whitman question Piper And from Sandler. our first from comes

Casey Whitman

Phil, just be ex us the Maybe, going but your on accretion? to the outlook from you probably next us I can by core know about sort can in core are here? thinking margin on filling forgiveness, margin PPP in maybe few start and you of off quarters what you’re fill with PPP

Philip Mantua

Yes, Casey, glad to. be

quarter all, the ongoing So - in large going addition a four on value I the fair to to as, the can which aspect asset are really beginning forgiveness aspect the of here to the relates third impact of adjustments, more in as quarter things, going of side. basis margin to about basis points core is with of was earnings the to and what into decline, towards off next worth as points quarter the of trailing from are continuing took here quarter. of quarter, forgiveness the probably be fourth the current the what the PPP In place in on to especially what’s margin year, this that the X think first the of the well expect that perspective, majority timing you to kind second our it therefore, with benefit

remainder X.XX%, on range, I what of than to the the than X.XX%, So a that what is market we X.XX%, of the not that changes that is basis, terribly again, be suggest throughout here, mid-X.XX% going there that on somewhere different with the year, tenure. margin I in think could underneath would level range. reported in assumption all-in-all, fluctuations in occur core is the are probably no all whatever that the And of significant overall basically rates other

Casey Whitman

you helpful. while some Great. sorry. And prepared talking your PPP, you those that deposit them, That numbers you we gave think around retention remarks about I I in that are is program. Dan, just gave? numbers Can with repeat missed

Daniel Schrider

Yes, I can. I’m sure getting there.

Casey Whitman

Sure. No problem.

Daniel Schrider

fast there would. getting thought I I I’m as as

all-in-all, the I of that we is originations round round credits about So XX% million retention the break quarter. $X.X obviously, related remaining a had it to closer to XX%. books; all round quarter, two you that round when deposits. in little And end What the that at initially done million Of exceeded rate of on the one, about further about represents $X from and billion a were about down the rate those retention But $XXX PPP. deposits on those is one are in in on deposits $XXX the two, commented million.

no data that. on there’s So retention

Philip Mantua

numbers Yes. And based part, Casey, that be estimate the we XX% what the remaining just here, and we year, are, them just the between goes from we from most the as a deposits think retaining modeling the by will standpoint still for on XX% trying we of suggested. today that Dan end to that of see where of

be will I we virtue that they that, to on but to. believe lot a we continue will of run And will to there some expectation of So them when that element some hold will believe get folks of we continue kind by like know to have down, them they interesting base. on feel whether them, speak. they have the our they and belongs therefore, to so just money funds to to continue see deposit deploy and forgiven will those And they hang be or in - to of stay also it

Casey Whitman

Understood. Thank you.

Daniel Schrider

Thanks Casey.

Philip Mantua

Thanks.

Operator

your comes from go question G. from ahead Comery with Steve Research. question. Please next Our

Steven Comery

afternoon. margin Hey guys to outlook, actually maybe we ask the clarification little if a good core Wanted start there. on

payoffs of in there quarter, the half And PPC, prepayment of the year? I kind of the there to seems benefited what higher margin the this from up was element going in the impact was quarter? like During difference Was was, obviously. back in make you quarter? the the in the wondering what’s higher kind of if any it

Philip Mantua

non-interest Yes, they Steve, any the might If that we any interest of earlier or the as those or would the were to implications net things penalties this some opposed income Phil. income is accrued to of element of prepayment things run have quarter, by payoffs there margin. having this through

pick there of wouldn’t made standpoint the asset So would continuing overall of pricing balance have that also the effect margin six even And would I that which been with any down whatever sheet. to I have still side some advances, five on the we probably related would the a guidance, at giving some tell loans that certainly, you prepayment implications say, have predominantly those impact the detrimental would We that off from that we had runoff. yields the up on or ran currently. to margin. in that basis points to the level

position deposits are we really in with guidance asset then having going sides, give that kind a what as those my of as margin is both and both well to even pickup to happens the cause knowing between So advances. on now to stable and effect yields enjoy from the paid truly down

Steven Comery

Okay, choice bank? this good categories is essentially categories loan credit the the there by on I is slightly, the up were a consumer demand? Is then the loan bifurcation that Or all commercial maybe in all like were a down. okay. very noticed detail. balances, And That and

Daniel Schrider

of the terms levels? runoff Or the ending In balances?

Steven Comery

balances? Pending

Philip Mantua

I as and relates choice. Yes. consumer the behavior to Steve, think predominantly it portfolio, that is client

or and less we there, these is can home of the are way which whether think recall or the majority that just are favorable the consumer it anything really the lines, I probably doing underlying to not less in We consumer credit as you to those. are just equity portfolio, offering differently And becoming approach our are promoting days.

on relates the you Dan, So regard. that see don’t out commercial to in I of being it offer? you side, don’t as to that want ordinary - of if comments have I the component know, anything any anything it,

Daniel Schrider

elements standpoint, our Yes. any appetite been What for our desire we has portfolio. change in no of there

expectations First number ways, been the quarter, commercial success which a construction builders lot And clients a sale our outsized small of to conditions. cases, loans sold. of in runoff, lot with the of we advantage properties. have our spoke some of couple our clients’ terms A and we real the of some result of which in turning take in of of market was had hands projects, changed of really outpacing estate

- client runoff, just appetite commercial so portfolio. our some And to expect, of nothing have typically of from more every loss we a would higher standpoint, grow of aspect

Steven Comery

me. good. for Very the of one balances should. going on increase showed there balance non-interest okay. lot more than an like Okay, there? Period anything a end Was Maybe unusual more average

Philip Mantua

just portal, the the were Probably the more since PPP weighted loans the cetera. timing end probably that reopen of we went et timing quarter funding from towards during quarter heavily of the of the when we than the

Steven Comery

Okay. Yes, that is what I figured.

Okay, guys. thanks

Philip Mantua

bet. You

Operator

next go Our question with Catherine question. your ahead comes KBW. from from Mealor Please

Catherine Mealor

do this a ask and Phil. on you the further follow-up I gave of down provision reserve to great in keep in baseline of than from afternoon. release bring this from the just see drove offs here? what kind level the economic And maybe the even better most the large just kind charge release color you to more ability good or like is just this on you wanted lot reduction the of Thanks from here, reserve the there do that just is, quarter, you a feel to all of reserve of

Philip Mantua

Catherine. Yes,

see. of So really is a I we amount say the forward, is mute I and first therefore, don’t probably case, release any also might But significant we - in is will create this the this the and go provisioning credits it again, think within losses and subsequent largest would potentially that, hopefully, quarter, to charge-off continue charge-offs through that amount experience as the answer further of and we provision quarters. releases

to which level would is as the here decline forward. suggest the that nearly you that loans But that would to just So they still to that for reserves overall took, possibility. one I know I some further don’t room time over a be we as going there is of means of large period that

Catherine Mealor

bit the run Great. outlook Is a rate this is this to do from expenses - good on year? than how towards grow the or expected. you side, more your expense And came down I expenses then had the what a little

Philip Mantua

Yes.

in decline the rate the not quarter the that expense forward. will continue in first here going think I

I run is starting think he rest made start quarter here, things a technology we we the manifesting in in will in we rate the start to people and are mention that, grow next through standpoint. of from beyond. go and to some as and invest expense that to the the line And quarter advance In through think going the second of the here comments I that some itself in prepared year. and

quarter liability of absent think the I this base offset I for and the that commitments, north that expect unfunded expense would next of we into against of to So the around beyond. XX. the probably and netting prepayment a penalties the quarter had of of go

base to expense middle year. rest here, through our low single-digits the in grow of see the low the You could single-digits

Catherine Mealor

some announced. Okay. updated thoughts just M&A this your then Any Great. one kind and M&A seen And Thanks. activity we of on what deals on that have year? question pending last

Daniel Schrider

Thanks, probably growth. and and have emerge quarter, going organic will our report comments than know the Nothing different from be to from this view and a Catherine. the forward point, and bank element those of on will is, nothing and we But to to It strong story prior a an that non-bank. to my you our be we focused Yes. continue on pandemic types both have of at a of from imminent standpoint, growth M&A continuing continues discussions. focus certainly forward, part

Catherine Mealor

Thanks helpful. quarter. Great Great,

Philip Mantua

Thank you.

Daniel Schrider

Thanks Catherine.

Operator

Zwick comes from Eric with question ahead and Boenning go next Please your question. Scattergood. from Our

Erik Zwick

Good afternoon guys.

apologies First missed if one me, for I it earlier.

Just regard amount of unamortized XXXX the in curious to with PPP from loans originations, remaining those? the fees what is the

Philip Mantua

it my have a is not good know specific really Eric. question, I’m I number That certainly has that that. I But been on identified. that with you sure I at can disposal. don’t follow-up

Erik Zwick

for okay. originations. that right? is or Is then it And it million is like That X, looks those at about so Slide XX looking XXXX

Philip Mantua

related that than loan-by-loan one. yes, in that round think is Well, than I those I correct basis But mainly are that those case, two. is on believe, higher probably of round a to And number. a fees,

Erik Zwick

for the talked you outlook cost several the likely That about kind is to mentioned. that. then year of I’m side I for good. revenue factors you And this throughout Okay. the curious mortgage guess decline about of

you is your mortgage that business, of it is kind As of And you manage how view what variable versus fixed? longer-term operations? ratio the efficiency

Daniel Schrider

Dan. Eric, Yes.

come going the I to outlook, for is reasons mentioned, off. Our it stated that is as

our largely business it variable We a an based of from standpoint. piece are expense is

that will the terms grab the we have there mortgage to share productive still spigot in we fair ability modify so what invested we efficient as our that diminishes. very we of got market and to have look market in say I shop at as - time even the a And same the the have highly that of

out Phil efficiency your data is the with that business. about So pulling question regard to of

Philip Mantua

is internal that mid-XX% managed make Yes. Eric, calculations is ratio range, I the there, that that that not efficiency usually that, in the mistaken, we consistently range. in think the business and from on I’m if

mean, relation bank, So business. highly of a component I efficient clearly, the our the of rest is it in to

Erik Zwick

Okay. And a Catherine’s about Great guess believe of the a color me reserve. for thanks the bit question there. is I on for last I follow-up one

longer Spring call indicate obviously XX the to we of banks of number overtime? term think guess back more once adoption CECL levels kind predict. level points levels or that for reserve back is kind basis you resolved, what to about potentially for Slide a of heard X, longer-term at it, hard a converge over looking the And have outlook is once I that the day the X or economic how could do of were. reserve natural get so appropriate We are But deferrals to and the stable the Sandy that let’s you, timing

Philip Mantua

Yes, Eric, bit I is probably the basis think points lean. XX a

have I don’t seen below out know, yet I is one, that I the could to be back on of would - heard is understand pre-COVID sentiment have certainly back how a go out. hard time is that to those this lot the that, seeing that. to reserves in get But a a there cases could or the seen plays and levels it reserve go I of lot that but Although levels. sentiment potentially

Erik Zwick

the for Thanks taking my there. color questions appreciate I today.

Daniel Schrider

Thanks Erik.

Philip Mantua

welcome. are You

Operator

Please go comes ahead Instructions] with question Our next [Operator Brody your from question. from Preston Stephens.

Broderick Preston

everyone. Good afternoon

follow-up on PPP. Just wanted to

is is it X.X correct? about, currently So billion call in outstanding it,

Daniel Schrider

Yes.

Philip Mantua

Yes.

Daniel Schrider

Net of what has been given. Yes.

Broderick Preston

Okay. And do for is what XQ you average have were? know the balance to

Philip Mantua

Hang of the a will remaining to second, is about deferred Eric’s Yes. Eric, earlier tell I less way, little on - million. XX you the than if that one question fees answer and by is

billion. see me average can if second. about I (Ph) Yes. Hang on real this you Average balance Let quick. find was the [X.XX] for PPP here a quarter

Broderick Preston

Thank you that. for

want And to clarify. so did I

So it points basis correct? about of was accrued quarter, this yield XX

Philip Mantua

For…

Broderick Preston

in the purchase PAA. switch loans? The Yes, the

Philip Mantua

Hang will but It me second. a let sounds sorry. for I confirm I’m about Yes, that. on right, find you. that

Broderick Preston

wanted the of just put what it had you PAA, to just wasn’t inclusive just confirm I Yes. was in the the that margin PPP? was release ex

Philip Mantua

is is points. Yes, that Yes. correct. basis That That about correct. nine is

Broderick Preston

about excluding but were were down Okay. X% in Alright. after on C&I X% to of And the they kind in quarter. right, actually the I that balances ask balances linked the quarter, just the was PPP, up previous wanted then so

wanted driving to what understand just variability? So was that better I

Daniel Schrider

of that play, impacted largest couple a that portfolio. had were couple a at of but We the sales business things

out those probably on kind successful pretty sale through the businesses of hits quarter. the couple that pandemic, whole a Our the We utilization of large the lines in as larger including first had is constant through book. of through held significant most credits move

Broderick Preston

Understood.

XQ then line item. wanted there other on variability just of setting aside follow-up on from the Okay. FHLB I Kind some XQ. the is there the expense prepayment to to expenses, And penalty,

line addition - rate growth? of any other million right just run that use the expense in item to So to five sort on the is rate moving forward

Philip Mantua

little for because real out the It an take quick. that last me unfunded million at offset $X commitments additional probably this backed quarter a quarter. in set there for we then reversed bit what is five to is look we in a that more range Let million you aside

So before Yes. I to would close you add get the that growth. back six and million

Broderick Preston

Okay. is rate then to I want this of at did ask portfolio floating what just loan your percent And point?

Philip Mantua

overall the is think XX% in range. portfolio the I to probably XX%

Broderick Preston

I really for my you questions. all Alright, appreciate it. taking Thank great.

Daniel Schrider

Thank you Broderick.

Operator

the at gentlemen, this team and management floor back no ladies to showing questions, I And over the remarks. like time, any closing to would for turn

Daniel Schrider

you welcome you, and Thank calls, so these I your their today. comments hope to on participation afternoon. e-mail feedback thank We you, terrific have please a for your everyone, all Jamie, And always ir@sandyspringbank.com.

Operator

today’s thank conference do for and gentlemen, And We will call. ladies conclude you attending. with that, we

may You now lines. your disconnect

Sandy Spring Bancorp (SASR) 22 Apr 212021 Q1 Earnings call transcript