Sandy Spring Bancorp : 3rd Quarter 2023 Investor Presentation

3rd Quarter 2023 Investor Presentation

November 3, 2023

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Forward Looking Statements

Sandy Spring Bancorp's forward-looking statements are subject to significant risks and uncertainties that may cause actual results to differ materially from those in such statements. These risks and uncertainties include, but are not limited to, the risks identified in our quarterly and annual reports and the following: changes in general business and economic conditions nationally or in the markets that we serve; changes in consumer and business confidence, investor sentiment, or consumer spending or savings behavior; changes in the level of inflation; changes in the demand for loans, deposits and other financial services that we provide; the possibility that future credit losses may be higher than currently expected; the impact of the interest rate environment on our business, financial condition and results of operations; the impact of compliance with changes in laws, regulations and regulatory interpretations, including changes in income taxes; changes in credit ratings assigned to us or our subsidiaries; the ability to realize benefits and cost savings from, and limit any unexpected liabilities associated with, any business combinations; competitive pressures among financial services companies; the ability to attract, develop and retain qualified employees; our ability to maintain the security of our data processing and information technology systems; the impact of changes in accounting policies, including the introduction of new accounting standards; the impact of judicial or regulatory proceedings; the impact of fiscal and governmental policies of the United States federal government; the impact of health emergencies, epidemics or pandemics; the effects of climate change; and the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events. Sandy Spring Bancorp provides greater detail regarding some of these factors in its Form 10-K for the year ended December 31, 2022, 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 its filings with the SEC, accessible on the SEC's Web site at www.sec.gov.

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Sandy Spring Bancorp, Inc.

Highlights 09/30/23

$14.1 billion in total assets $11.3 billion in total loans

$0.9 billion market capitalization (1)

$11.2 billion in deposits

• In 2022, ranked #5of America's Best Banksby Forbes magazine and ranked #1bank in Maryland by Forbes magazine (2)
• Named one of The Washington Post's 2022 Top

Workplacesand one of the Best Banks to Work For in 2021 by American Banker. In 2023, re-certified as a Great Place to Workand named a USA Top Workplacein Energage's inaugural USA Top Workplaces program in 2021

• In 2022, ranked #23of the Top 25 U.S. Banksby Bank Directorwhich ranks the 300 largest publicly traded banks (3)
• Consistent asset quality
• Conservative capital and liquidity management

Founded in 1868, Sandy Spring Bank is one of the area's oldest and largest depository institutions

1)	Market data at market close on October 11, 2023
2)	Per Forbes "Best Banks in Each State 2022 List"	3
3)	Per Bank Director "Top 25 U.S. Banks" ranking banking study

Quarterly Highlights

Profitability

Income Statement

Balance Sheet

Asset Quality

Capital

• Net income of $20.7 million ($0.46 per diluted common share) compared to $33.6 million ($0.75 per diluted common share) for the prior year quarter, and $24.7 million ($0.55 per diluted common share) for the previous quarter.
• Core earnings(1)(2) of $27.8 million ($0.62 per diluted common share) compared to $35.7 million ($0.80 per diluted common share) for the prior year quarter, and $27.1 million ($0.60 per diluted common share) for the previous quarter.
• GAAP efficiency ratio was 70.72% compared to 50.66% for the prior year quarter, and 64.22% for the previous quarter . The non- GAAP efficiency ratio(1)(2) was 60.91% compared to 48.18% for the prior year quarter, and 60.68% for the previous quarter.
• Net interest margin of 2.55%, compared to 3.53% for the same quarter of 2022, and 2.73% for the previous quarter.
• Pre-taxpre-provision net income(1) was $30.0 million compared to $38.5 million the previous quarter and $64.1 million for the prior year quarter.
• Provision for credit losses was $2.4 million as compared to $5.1 million for the previous quarter and $18.9 million for the prior year quarter.
• Non-interestincome was level compared to the previous quarter and up 3% from the prior year quarter.
• Non-interestexpense increased 5% and 10% from the linked quarter and the prior year quarter, respectively. After excluding $8.2 million pension settlement expense incurred during the current quarter, non-interest expense declined 7% and 2% from the previous quarter and the prior year quarter, respectively.
• Total assets of $14.1 billion, up 1% from the previous quarter. Total assets up 3% year-over-year.
• Total loans declined 1% to $11.3 billion compared to the previous quarter and grew 1% from the prior year quarter. Total commercial real estate and business loans were unchanged quarter-over-quarter, while residential mortgage loans grew 3%.
• Deposits up 2% from the previous quarter. Noninterest-bearing deposits down 2% and interest-bearing deposits were up 3%.
• Non-performingloans to total loans remained at low levels at 0.46% compared to 0.44% for the previous quarter and 0.40% for the prior year quarter.
• Risk-basedcapital ratio of 14.85%, common equity tier 1 risk-based capital ratio of 10.83%, tier 1 risk-based capital ratio of 10.83%, and tier 1 leverage ratio of 9.50%.

Source: Company documents

1) Non-GAAP financial measure; see reconciliation to most directly comparable GAAP measure in "Appendix - Reconciliation of non-GAAP Financial Measures"4

2) Excludes merger, acquisition and disposal expense, amortization of intangible assets, severance expense, pension settlement expense, contingent payment expense, gain on disposal of assets and investment securities gains (losses)

Operational Overview

Strong Core Franchise

Financial Performance

Robust Capital and Liquidity

Prudent Risk

Management and

Credit Culture

Experienced

Management

• A top commercial bank franchise in the Greater Washington, DC metro area
• Comprehensive product offering with non-interest income / total revenue of 15.6% (1)
• Core return on average assets of 1.02%(1)(2)(3)
• Disciplined growth and increased focus on expense management
• YTD net interest margin of 2.75% (1)
• Strong capital position with 10.84% average equity to average asset ratio and 8.42% tangible common equity ratio (1)(2)
• Stable core deposit funded portfolio comprised of core customer relationships with 40% checking accounts (1)
• Excellent risk management culture with robust governance processes and experienced credit personnel
• Consistently excellent asset quality metrics
• Diversified loan portfolio with 5.09% total yield (1)
• Experienced management team with ~200 years of combined banking experience
• Deep in-market relationships drive client-focused business model
• Experienced acquirer with a record of successful integrations

Source: S&P Global Market Intelligence and Company documents
1)	YTD as of September 30, 2023	5
2)	Non-GAAP financial measure; see reconciliation to most directly comparable GAAP measure in "Appendix - Reconciliation of non-GAAP Financial Measures"; core return on average assets see "Appendix - Core Earnings"
3)	Excludes merger, acquisition and disposal expense, amortization of intangible assets, contingent payment expense, pension settlement expense, loss on FHLB redemption, gain on disposal of assets, and investment securities gains

3rd Quarter 2023 Financial Performance

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Q3 2023 Financial Highlights

Balance Sheet Growth

Loans

De pos its

Loans /

($ mm)

($ mm)

De pos its (% )

1 04%

1 01 %

$11 ,21 9

$11 ,300

$11 ,1 51

$1 0,749

3Q 2022

3Q 2023

3Q 2022

3Q 2023

3Q 2022

3Q 2023

Fee Income ($MM)

Total Risk-Based Capital

• Total commercial loans were level quarter-over-quarter
• Residential mortgage loan portfolio grew 3% over 2Q 2023
• Core return on average assets of 0.78%(1) for 3Q 2023
• Non-interestincome increased 1%or $0.2million over 2Q 2023
• Total risk-based capital ratio of 14.85%
• Non-GAAPefficiency ratio of 60.91% for 3Q 2023

	$1 6.9		$1 7.4
3Q 2022	3Q 2023

			1 4.85%
	1 4.1 5%

3Q 2022

3Q 2023

Source: Company documents	7
1)	Non-GAAP financial measure; see reconciliation to most directly comparable GAAP measure in "Appendix - Reconciliation of non-GAAP Financial Measures"; core return on average assets see "Appendix - Core Earnings"

Profitability

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Profitability Trends

Diluted Earnings Per Share

		$ 1.14
$ 0.75	$ 0.76		$ 0.55	$ 0.46
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

Return on Average Assets

		1.49%
0.99%	0.98%		0.70%
			0.58%
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

Diluted Core Earnings Per Share(1)

		$ 1.16
$ 0.80	$ 0.79		$ 0.60	$ 0.62
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

Return on Average Common Equity

		13.93%
8.96%	9.23%		6.46%
			5.35%
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

Source: Company documents	9
1) Non-GAAP financial measure; see reconciliation to most directly comparable GAAP measure in "Appendix - Reconciliation of non-GAAP Financial Measures"

Profitability Trends

Net Income

Pre-TaxPre-Provision Net Income(1)

(Do lla rs in m illio n s )

$ 33.6	$ 34.0	$ 51.3	$ 24.7	$ 20.7
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

(Do lla rs in m illio n s )

$ 64.1	$ 56.6	$ 46.9	$ 38.5	$ 30.0
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

Provision (Credit) for Credit Losses

Core Earnings(1)

(Do lla rs in m illio n s )

$ 18.9
$ 10.8	$ 5.1	$ 2.4

		$ (21.5)
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

(Do lla rs in m illio n s )

		$ 52.3
$ 35.7	$ 35.3		$ 27.1	$ 27.8
3Q 2022	4Q 2022	1Q 2023	2Q 2023	3Q 2023

• Lower net interest income coupled with the one-time pension settlement expense of $8.2 million drove the decline in net income. These factors were partially offset by lower provision for credit losses and a decline in salaries and employee benefits expense (after excluding the impact of the pension settlement expense).

Source: Company documents	10
1) Non-GAAP financial measure; see reconciliation to most directly comparable GAAP measure in "Appendix - Reconciliation of non-GAAP Financial Measures"