Sandy Spring Bancorp | research notes

Introducing Sandy Spring Bancorp: A Premier Community Bank Holding Company

Overview:

Sandy Spring Bancorp, Inc. (NASDAQ: SASR) is a publicly traded community bank holding company headquartered in Olney, Maryland. With a history spanning over 150 years, Sandy Spring Bank is the cornerstone of the company, offering a wide range of financial products and services to individuals, businesses, and municipalities.

Core Services:

• Personal banking: checking and savings accounts, certificates of deposit, mortgages, personal loans
• Business banking: commercial loans, lines of credit, cash management services, merchant processing
• Wealth management: investment advisory services, financial planning, trust administration
• Municipal banking: financing for infrastructure projects, cash management, debt issuance services

Geographic Reach:

Sandy Spring Bank operates through a network of over 50 branches and financial centers located primarily in Maryland, Virginia, and the District of Columbia. The company has a strong presence in suburban areas surrounding major urban centers, including Washington, D.C., Baltimore, and Northern Virginia.

Financial Performance:

Sandy Spring Bancorp has consistently reported strong financial performance. The company has a high-quality loan portfolio, with low levels of nonperforming assets. Its core deposits are stable and growing, providing a strong foundation for lending activities.

• Revenue: $447.1 million in 2021
• Net income: $168.8 million in 2021
• Return on equity: 13.95% in 2021

Community Involvement:

Sandy Spring Bancorp is committed to supporting the communities it serves. The company actively participates in local charities and organizations, focusing on education, affordable housing, and financial literacy. Sandy Spring Bank's "Community Reinvestment Act" (CRA) team works to provide financial services to low- and moderate-income individuals and communities.

Sustainability Initiatives:

Sandy Spring Bancorp is also a leader in sustainability practices. The company has received recognition for its efforts to reduce its environmental impact, including its use of renewable energy sources and its commitment to responsible lending.

Leadership:

Sandy Spring Bancorp is led by a team of experienced executives, including:

• Timothy A. McKenzie, President and CEO
• Jean L. Birch, Executive Vice President and Chief Operating Officer
• Paul G. Rhode, Executive Vice President and Chief Financial Officer

Conclusion:

Sandy Spring Bancorp is a well-established and financially sound community bank holding company with a long history of providing exceptional financial services. With its strong geographic reach, diverse product offerings, and commitment to community involvement, Sandy Spring Bancorp is well-positioned to continue meeting the needs of its customers and making a positive impact in the communities it serves.

Business Model of Sandy Spring Bancorp

Sandy Spring Bancorp is a community bank holding company that offers a range of financial products and services to individuals, small businesses, and commercial customers in the Washington, D.C., metropolitan area. Its business model consists of the following key components:

• Community Banking: Sandy Spring Bancorp focuses on building long-term relationships with customers in its local communities. It offers a full suite of banking services, including checking and savings accounts, loans, and wealth management.
• Commercial Lending: The company provides commercial loans to businesses of various sizes, focusing on industries such as healthcare, technology, and real estate.
• Wealth Management: Through its Sandy Spring Trust Company subsidiary, the company offers investment management, trust, and estate planning services to affluent individuals and families.
• Mortgage Banking: Sandy Spring Bancorp originates, underwrites, and sells residential and commercial mortgages through its Sandy Spring Mortgage Corporation subsidiary.

Advantages over Competitors

Sandy Spring Bancorp has several advantages over its competitors in the community banking market:

• Strong Local Presence: The company has a long history of serving the Washington, D.C., area and has a deep understanding of local markets and customer needs.
• Personalized Service: Sandy Spring Bancorp emphasizes providing personalized service to its customers, fostering strong relationships through local branches and community involvement.
• Focus on Commercial Lending: The company's expertise in commercial lending gives it an edge over competitors that focus primarily on consumer banking.
• Comprehensive Wealth Management: Sandy Spring Trust Company provides a comprehensive suite of wealth management services, attracting affluent customers.
• Community Involvement: Sandy Spring Bancorp is actively involved in supporting local charities and organizations, which enhances its reputation and builds customer loyalty.
• Financial Stability: The company has a strong financial position, with a track record of consistent earnings and high capital ratios.
• Technology Innovation: Sandy Spring Bancorp invests in technology to improve customer service and streamline operations.

Outlook for Sandy Spring Bancorp

Financial Performance

• Strong earnings growth: Sandy Spring Bancorp has consistently reported solid earnings growth over the past few years. In 2021, the company's net income increased by 15.6% year-over-year to $284.3 million.
• High loan growth: The company has been experiencing robust loan growth, primarily driven by commercial and residential lending. As of March 31, 2022, total loans and leases grew by 10.2% compared to the same period last year.
• Improving margins: Sandy Spring Bancorp has been able to improve its net interest margin (NIM) over the past few quarters. The NIM increased to 2.95% in Q1 2022, up from 2.71% in Q1 2021.
• Strong credit quality: The company maintains a low level of non-performing loans and a high provision for loan losses. Its non-performing loans to total loans ratio stood at 0.18% as of March 31, 2022.

Business Strategies

• Focus on relationship-based banking: Sandy Spring Bancorp emphasizes providing personalized banking services to its customers. The company has a strong presence in the Maryland, Virginia, and Washington, D.C. markets.
• Expansion into new markets: The company has been expanding its operations into new markets, primarily in the Southeast. In 2021, Sandy Spring Bancorp acquired two banks in South Carolina, expanding its presence in the state.
• Digital transformation: The company is investing in digital banking technologies to improve customer convenience and efficiency. Sandy Spring Bancorp offers mobile banking, online banking, and automated teller machines (ATMs).

Market Conditions

• Rising interest rates: The Federal Reserve has been raising interest rates to combat inflation. This has led to higher borrowing costs for businesses and consumers, which could slow down loan growth.
• Competition: Sandy Spring Bancorp faces competition from both large national banks and smaller community banks. The company must differentiate itself to attract and retain customers.
• Economic uncertainty: The ongoing COVID-19 pandemic and geopolitical tensions create uncertainty in the economic outlook. This could impact loan demand and asset quality.

Analyst Recommendations

• Buy ratings: Most analysts covering Sandy Spring Bancorp have a "Buy" or "Outperform" rating on the stock. They cite the company's strong financial performance, business strategies, and market position as reasons for their optimism.
• Target prices: Analyst target prices for Sandy Spring Bancorp range from $47 to $55 per share, representing upside potential of around 15-25% from current levels.

Overall Outlook

Sandy Spring Bancorp is well-positioned for continued growth and success. The company's strong financial performance, focus on relationship-based banking, and expansion strategies should help it navigate the current market challenges and deliver value to shareholders.

Companies Similar to Sandy Spring Bancorp

1. M&T Bank (www.mtb.com)

• Why customers would like it: Offers a wide range of financial products and services, including consumer banking, commercial banking, wealth management, and investment banking. Known for its strong customer service and community involvement.

2. Truist Financial Corporation (www.truist.com)

• Why customers would like it: Formed by the merger of BB&T and SunTrust, Truist is one of the largest banks in the United States. Provides a comprehensive suite of financial services, including personal banking, business banking, and investment services. Known for its digital banking capabilities and financial planning tools.

3. First Citizens Bank (www.firstcitizens.com)

• Why customers would like it: A privately held bank known for its conservative lending practices and strong financial performance. Offers a full range of banking services, including personal banking, commercial banking, and wealth management. Emphasizes customer satisfaction and community banking.

4. Synovus Financial Corp. (www.synovus.com)

• Why customers would like it: A regional bank with a strong presence in Georgia and Florida. Provides personal banking, commercial banking, and wealth management services. Known for its focus on relationship banking and its digital transformation initiatives.

5. Bank of South Carolina (www.bankofsc.com)

• Why customers would like it: A state-chartered bank with over 100 years of history. Offers a full suite of banking products and services, including personal banking, business banking, and wealth management. Emphasizes local decision-making and community banking.

History of Sandy Spring Bancorp

1867-1910: Founding and Early Years

• A group of farmers and businessmen in Sandy Spring, Maryland establish the Sandy Spring National Bank.
• The bank initially focused on serving the agricultural and rural communities in Montgomery County.

1910-1940: Expansion and Consolidation

• The bank expands its operations to other areas of Montgomery County and acquires several smaller banks.
• It becomes known as the Sandy Spring Bank and Trust Company.

1940-1970: Post-War Growth

• The bank experiences significant growth after World War II as Montgomery County becomes a suburban hub.
• It opens new branches and expands its lending activities.

1970-1990: Diversification and Expansion

• The bank diversifies its operations into wealth management, trust services, and mortgage lending.
• It acquires several other financial institutions, including Montgomery Bank & Trust Company and Citizens National Bank.
• In 1988, it adopts the holding company structure and becomes Sandy Spring Bancorp.

1990-2000: Business Expansion

• Sandy Spring Bancorp continues to expand its businesses and acquires several banks in Maryland, Virginia, and Pennsylvania.
• It becomes a major regional bank with a presence in multiple states.

2000-2010: Growth and Acquisitions

• The bank expands its operations further through organic growth and acquisitions.
• It acquires Chevy Chase Trust Company in 2008, which significantly increases its presence in the wealth management market.

2010-2020: Innovation and Digitalization

• Sandy Spring Bancorp focuses on innovation and digital banking capabilities.
• It launches a mobile banking platform and invests in online banking services.

2020-Present: Continued Growth and Transformation

• The bank continues to grow through a combination of organic expansion and acquisitions.
• It makes significant investments in technology and cybersecurity.
• In 2023, it announces a merger with Howard Bancorp, further expanding its footprint in Maryland.

Today, Sandy Spring Bancorp is a publicly-traded regional bank with approximately $14 billion in assets. It is known for its strong community banking culture, financial strength, and commitment to innovation.

2021

• January: Sandy Spring Bancorp announced its acquisition of First United Bank & Trust Company, a community bank headquartered in Oakland, Maryland.
• April: The company completed the acquisition of First United Bank & Trust Company, adding $1.3 billion in assets and expanding its presence in Western Maryland.
• July: Sandy Spring Bancorp reported second-quarter earnings per share of $1.03, exceeding analyst estimates.

2022

• January: The company announced its acquisition of Howard Bank, a community bank headquartered in Ellicott City, Maryland.
• April: Sandy Spring Bancorp completed the acquisition of Howard Bank, adding $2.1 billion in assets and expanding its presence in Central Maryland.
• July: The company reported second-quarter earnings per share of $1.09, again exceeding analyst estimates.

2023

• January: Sandy Spring Bancorp announced its acquisition of Community Bank of the Chesapeake, a community bank headquartered in Annapolis, Maryland.
• April: The company completed the acquisition of Community Bank of the Chesapeake, adding $1.6 billion in assets and expanding its presence in Anne Arundel County.
• June: The company reported second-quarter earnings per share of $1.14, continuing its trend of exceeding analyst estimates.

Recent Timelines

• July 11, 2023: Sandy Spring Bancorp announced a stock offering of $250 million to support its continued growth and acquisition strategy.
• August 15, 2023: The company announced the launch of a new digital banking platform designed to enhance customer convenience and accessibility.
• September 12, 2023: Sandy Spring Bancorp was named one of the "Best Banks to Work For" by the American Banker newspaper for the fourth consecutive year.

5-Star Financial Partner: Sandy Spring Bancorp

As a valued customer of Sandy Spring Bancorp, I highly recommend their exceptional financial services. From the moment I opened my account, I've been impressed by their commitment to client satisfaction and their dedication to providing tailored solutions that meet my needs.

Personal and Professional Services

The staff at Sandy Spring Bancorp is both friendly and knowledgeable. They take the time to understand my financial goals and provide personalized advice that has helped me grow my wealth and achieve my financial objectives. Their online and mobile banking platforms are user-friendly and convenient, giving me 24/7 access to my accounts.

Innovative Banking Solutions

Sandy Spring Bancorp consistently innovates to meet the evolving needs of their clients. They offer a wide range of products and services, including personal and business banking, wealth management, mortgage lending, and more. Their mobile app is particularly impressive, allowing me to manage my finances, make payments, and deposit checks on the go.

Commitment to Community

Beyond their financial services, Sandy Spring Bancorp is actively involved in the communities they serve. They support local businesses, non-profit organizations, and educational initiatives, demonstrating their commitment to making a positive impact. This sense of corporate social responsibility aligns well with my own values and makes me proud to be a customer.

Exceptional Customer Support

Throughout my banking experience with Sandy Spring Bancorp, I've encountered exceptional customer support. The staff is always responsive, helpful, and goes the extra mile to ensure my satisfaction. Their attention to detail and quick resolution of my queries have made banking with them a seamless experience.

Overall Impression

Sandy Spring Bancorp is a truly customer-centric financial institution. They provide a comprehensive suite of innovative banking solutions, personalized advice, and exceptional customer support. Their commitment to community involvement further enhances their value as a financial partner. I highly recommend Sandy Spring Bancorp to anyone seeking a reliable and trusted financial institution that values their clients' well-being.

Discover Sandy Spring Bancorp: A Trusted Financial Partner for Your Banking Needs

In today's fast-paced financial landscape, finding a reliable and innovative banking partner is essential. Look no further than Sandy Spring Bancorp (NASDAQ: SBSI), a premier financial institution serving the Mid-Atlantic region.

About Sandy Spring Bancorp

Founded in 1867, Sandy Spring Bancorp is a community-oriented financial services company headquartered in Sandy Spring, Maryland. With over $6 billion in assets, the company operates more than 50 branch locations across Maryland, Virginia, and Washington, D.C.

Comprehensive Banking Solutions

Sandy Spring Bancorp offers a wide range of banking solutions tailored to meet the needs of individuals, businesses, and organizations. These include:

• Checking and savings accounts
• Personal and business loans
• Mortgages
• Investment services
• Commercial banking
• Wealth management

Why Choose Sandy Spring Bancorp?

1. Local Expertise and Personalized Service:

As a community bank, Sandy Spring Bancorp understands the unique financial needs of its customers. Our local bankers are knowledgeable and responsive, providing personalized service to help you achieve your financial goals.

2. Digital Banking Convenience:

Manage your finances seamlessly with our secure and user-friendly digital banking platform. Enjoy 24/7 access to account balances, transactions, and bill pay.

3. Innovative Products and Services:

Sandy Spring Bancorp is constantly innovating to provide cutting-edge financial solutions. Explore our mobile banking app, contactless payments, and online lending options.

4. Strong Financial Foundation:

With over 150 years of experience and a strong financial foundation, Sandy Spring Bancorp is a stable and reliable banking partner. We are committed to providing secure and sound financial services.

5. Community Involvement:

Sandy Spring Bancorp is deeply involved in supporting the communities it serves. We actively participate in local organizations, sponsor events, and volunteer to make a positive impact.

Visit Our Website Today!

Learn more about the exceptional banking solutions offered by Sandy Spring Bancorp. Visit our website at www.sandyspringbank.com to discover how we can help you pursue your financial aspirations.

Experience the Sandy Spring Bancorp Difference. Trust your finances to a local, innovative, and community-oriented bank.

Main Supplier (Upstream Service Provider) of Sandy Spring Bancorp

Sandy Spring Bancorp, Inc. (NASDAQ: SASR) is a publicly traded financial holding company headquartered in Olney, Maryland. The company operates through its wholly-owned subsidiary, Sandy Spring Bank, a community bank offering a range of financial products and services to individuals, businesses, and government entities.

Sandy Spring Bancorp relies on a number of upstream service providers to support its operations. These providers include:

• Core Banking System: FIS (NYSE: FIS)
• Payment Processing: Fiserv, Inc. (NASDAQ: FISV)
• Mortgage Servicing: Black Knight, Inc. (NYSE: BKI)
• Credit Reporting: Equifax Inc. (NYSE: EFX)
• Insurance: AIG (NYSE: AIG)
• Legal Services: Ballard Spahr LLP
• Accounting Services: PwC
• Consulting Services: McKinsey & Company
• Technology Services: Cognizant Technology Solutions Corporation (NASDAQ: CTSH)

Detailed Information on Main Suppliers

FIS (www.fisglobal.com) is a leading provider of financial technology solutions. FIS' core banking system is used by Sandy Spring Bank to manage customer accounts, process transactions, and provide online banking services.

Fiserv (www.fiserv.com) is a multinational financial services technology company. Fiserv's payment processing platform is used by Sandy Spring Bank to process debit and credit card transactions, as well as ACH transfers.

Black Knight (www.blackknightinc.com) is a provider of mortgage servicing software and services. Black Knight's platform is used by Sandy Spring Bank to manage its mortgage portfolio, including loan origination, servicing, and foreclosure.

Equifax (www.equifax.com) is a leading provider of credit reporting services. Equifax's data is used by Sandy Spring Bank to assess the creditworthiness of loan applicants.

AIG (www.aig.com) is a global insurance company. AIG provides Sandy Spring Bank with a range of insurance products, including property and casualty insurance, life insurance, and health insurance.

Note that this list may not be exhaustive and is subject to change. Additional information on Sandy Spring Bancorp's upstream service providers can be found in the company's annual report and other regulatory filings.

Sandy Spring Bancorp's Main Customers

Sandy Spring Bancorp is a community bank holding company headquartered in Olney, Maryland. It provides a range of financial products and services to individuals, small businesses, and commercial clients in the Mid-Atlantic region. The company's main customers include:

• Individuals: Sandy Spring Bank offers a variety of personal banking products and services, including checking and savings accounts, mortgages, auto loans, and credit cards.
• Small businesses: Sandy Spring Bank provides a range of small business banking products and services, including business checking and savings accounts, loans, and lines of credit.
• Commercial clients: Sandy Spring Bank offers a range of commercial banking products and services, including commercial loans, lines of credit, and treasury management services.

List of Sandy Spring Bancorp's Main Customers

According to the company's website, its main customers include:

• Individuals
• Small businesses
• Commercial clients

Website

The website for Sandy Spring Bancorp is: https://www.sandyspringbank.com/

Sandy Spring Bancorp, Inc. (NASDAQ: SBSI) is a Maryland-based financial services company with approximately $5.6 billion in assets. The company's primary revenue stream is net interest income, which it generates from the spread between the interest it earns on loans and investments and the interest it pays on deposits. Sandy Spring Bancorp also generates revenue from non-interest income, such as fees from wealth management, brokerage, and insurance services.

Key Revenue Streams

• Net interest income: This is the company's largest revenue stream, accounting for approximately 80% of total revenue. In 2021, Sandy Spring Bancorp generated $301.8 million in net interest income, up from $284.2 million in 2020. The increase was primarily due to an increase in the company's loan portfolio and a decrease in the cost of funds.
• Non-interest income: This revenue stream includes fees from wealth management, brokerage, and insurance services. In 2021, Sandy Spring Bancorp generated $73.1 million in non-interest income, up from $67.3 million in 2020. The increase was primarily due to higher wealth management fees.

Estimated Annual Revenue

Sandy Spring Bancorp's estimated annual revenue for 2022 is $380 million, up from $374.9 million in 2021. The increase is expected to be driven by continued growth in the company's loan portfolio and non-interest income.

Other Key Metrics

In addition to revenue, other key metrics for Sandy Spring Bancorp include:

• Net income: Sandy Spring Bancorp's net income was $157.5 million in 2021, up from $142.2 million in 2020.
• Earnings per share (EPS): Sandy Spring Bancorp's EPS was $6.27 in 2021, up from $5.68 in 2020.
• Return on assets (ROA): Sandy Spring Bancorp's ROA was 1.18% in 2021, up from 1.08% in 2020.
• Return on equity (ROE): Sandy Spring Bancorp's ROE was 12.21% in 2021, up from 11.36% in 2020.

Key Partners of Sandy Spring Bancorp, Inc.

Name: BlackRock, Inc. Website: https://www.blackrock.com/

Partnership Details:

• BlackRock is Sandy Spring Bancorp's primary investment manager for fixed income portfolios.
• BlackRock manages a substantial portion of Sandy Spring Bank's balance sheet and other assets.
• The partnership leverages BlackRock's expertise in credit analysis and portfolio management to optimize investment returns and mitigate risk.

Name: Charles Schwab Corporation Website: https://www.schwab.com/home

Partnership Details:

• Schwab is Sandy Spring Bancorp's primary brokerage and custody provider for its retail brokerage platform.
• Schwab provides brokerage operations, asset custody, and trading services to Sandy Spring Bank's retail clients.
• The partnership allows Sandy Spring Bank to offer comprehensive investment and brokerage services to its customers.

Name: Fiserv, Inc. Website: https://www.fiserv.com/

Partnership Details:

• Fiserv is Sandy Spring Bancorp's technology partner for a range of banking and payment services.
• Fiserv provides Sandy Spring Bank with core banking software, check processing services, and payment processing platforms.
• The partnership enables Sandy Spring Bank to streamline its operations and enhance customer convenience.

Name: Mastercard Incorporated Website: https://www.mastercard.com/

Partnership Details:

• Mastercard is Sandy Spring Bancorp's primary credit card issuer.
• Mastercard provides Sandy Spring Bank with credit card products and services, including online and mobile payments.
• The partnership allows Sandy Spring Bank to offer convenient and secure payment options to its customers.

Name: Visa Inc. Website: https://www.visa.com/

Partnership Details:

• Visa is Sandy Spring Bancorp's secondary credit card issuer.
• Visa provides Sandy Spring Bank with similar credit card products and services as Mastercard.
• The partnership ensures that Sandy Spring Bank's customers have a wide range of credit card options to choose from.

Name: Zelle Network Website: https://www.zellepay.com/

Partnership Details:

• Zelle is a peer-to-peer payment network that Sandy Spring Bancorp participates in.
• Zelle allows Sandy Spring Bank's customers to send and receive money quickly and securely to and from other Zelle users.
• The partnership enhances customer convenience and simplifies payment processes.

Sandy Spring Bancorp, Inc. Key Cost Structure (Estimated Annual Cost)

Cost Category | Estimated Annual Cost ---|---| Interest Expense | $300-400 million Salary and Employee Benefits | $200-250 million FDIC Insurance | $50-60 million Data Processing | $40-50 million Occupancy | $30-40 million Professional Fees | $20-30 million Marketing | $15-20 million Equipment | $10-15 million Other Operating Expenses | $50-75 million

Total Estimated Annual Cost: $720-1,000 million

Detailed Breakdown of Key Cost Structure:

1. Interest Expense

• Interest expense is the largest cost for Sandy Spring Bancorp, accounting for approximately 40-55% of total expenses.
• This expense arises from the interest paid on deposits and other borrowings.
• The cost of funds has been rising in recent years due to the Federal Reserve's interest rate hikes.

2. Salary and Employee Benefits

• Salary and employee benefits represent the second-largest cost for the company, accounting for approximately 27-34% of total expenses.
• Sandy Spring Bancorp employs over 2,000 people, and their salaries and benefits are a significant expense.
• The company has been investing in employee compensation and benefits to attract and retain top talent.

3. FDIC Insurance

• FDIC insurance is a mandatory expense for all FDIC-insured banks.
• The cost of FDIC insurance is based on the bank's total deposits and risk profile.
• Sandy Spring Bancorp's FDIC insurance expense has remained relatively stable in recent years.

4. Data Processing

• Data processing costs include expenses related to maintaining the bank's IT systems, software, and hardware.
• These costs are essential for the bank's daily operations and are expected to increase in the future as technology evolves.

5. Occupancy

• Occupancy costs include expenses related to the bank's physical locations, such as rent, utilities, and maintenance.
• Sandy Spring Bancorp has been expanding its branch network in recent years, which has led to an increase in occupancy costs.

6. Professional Fees

• Professional fees include expenses related to legal, accounting, and consulting services.
• These fees are often incurred when the bank needs external expertise for specific projects or transactions.

7. Marketing

• Marketing costs include expenses related to advertising, branding, and public relations.
• Sandy Spring Bancorp has been investing in marketing to increase its brand awareness and attract new customers.

8. Equipment

• Equipment costs include expenses related to the purchase or lease of equipment, such as ATMs, computers, and vehicles.
• These costs are important for maintaining the bank's operations and providing services to customers.

9. Other Operating Expenses

• Other operating expenses include a variety of smaller costs that do not fit into the other categories.
• These expenses can include travel, supplies, and miscellaneous expenses.

It's important to note that these estimated costs are based on publicly available information and may vary depending on factors such as economic conditions and the company's strategic initiatives.

Sandy Spring Bancorp, Inc. operates primarily as a community bank holding company in Maryland, Virginia, and Washington, D.C. The company's primary source of revenue is interest income generated from loans and investments. As of December 31, 2021, the company had total assets of $10.6 billion and total deposits of $8.0 billion.

Sales Channels and Estimated Annual Sales

Sandy Spring Bancorp does not disclose specific sales figures for its individual sales channels. However, the company's annual report provides some insights into its sales channels and revenue streams.

• Branches: Sandy Spring Bancorp operates a network of 52 branches located in Maryland, Virginia, and Washington, D.C. Branches are a primary sales channel for the company's retail banking products and services, such as checking and savings accounts, loans, and investments.

• Online and Mobile Banking: Sandy Spring Bancorp offers online and mobile banking services that allow customers to access their accounts and conduct transactions remotely. These channels are becoming increasingly important for the company as more customers prefer to bank online or through mobile devices.

• Commercial Banking: Sandy Spring Bancorp provides a range of commercial banking products and services to businesses and organizations in its market area. These products and services include commercial loans, lines of credit, and treasury management services.

• Wealth Management: Sandy Spring Bancorp offers wealth management services through its wholly-owned subsidiary, Sandy Spring Trust Company. These services include investment management, trust administration, and financial planning.

It is difficult to estimate the annual sales generated through each of these sales channels. However, based on the company's financial statements and industry data, it is likely that the majority of Sandy Spring Bancorp's revenue is generated through its branches and commercial banking operations. Online and mobile banking and wealth management services are likely to be smaller contributors to revenue but are growing in importance.

Overall, Sandy Spring Bancorp has a diversified sales channel strategy that allows it to reach a wide range of customers and businesses in its market area. The company's focus on providing personalized service and building strong relationships with its customers has been a key driver of its success.

Sandy Spring Bancorp, Inc. targets distinct customer segments with tailored products and services. Here's an overview:

1. Retail Customers:

• Estimated Annual Sales: $1.3 billion
• Description: Individuals and families with personal banking needs, including checking and savings accounts, loans, mortgages, and investments.
• Target Market: Local communities within Sandy Spring's branch network in Maryland, Virginia, and Washington, D.C.

2. Small Businesses:

• Estimated Annual Sales: $1 billion
• Description: Small and medium-sized businesses with annual revenues typically under $10 million.
• Target Market: Local businesses in Sandy Spring's operating areas, such as professional services, healthcare, and retail.

3. Commercial Businesses:

• Estimated Annual Sales: $1.2 billion
• Description: Larger businesses with more complex financial needs, including financing, commercial real estate lending, and treasury management services.
• Target Market: Businesses operating in Sandy Spring's core markets and beyond, including healthcare, real estate, manufacturing, and government.

4. Wealth Management:

• Estimated Annual Sales: $400 million
• Description: High-net-worth individuals, families, and institutions seeking personalized financial planning, investment management, and trust services.
• Target Market: Affluent clients in Sandy Spring's operating areas and beyond.

5. Government and Non-Profit:

• Estimated Annual Sales: $200 million
• Description: Federal, state, and local government agencies, as well as non-profit organizations.
• Target Market: Public sector entities and non-profits seeking financial services tailored to their unique needs, such as bond underwriting and cash management.

It's important to note that these estimates are based on publicly available data and may vary depending on market conditions and the company's growth strategies.

Sandy Spring Bancorp's Value Proposition

Sandy Spring Bancorp is a community-focused financial holding company headquartered in Olney, Maryland. The company provides a range of financial products and services to individuals, businesses, and organizations in the Greater Washington, D.C. metropolitan area.

Core Value Proposition:

• Personalized Banking Experience: Sandy Spring Bancorp emphasizes building strong relationships with its customers. The company offers personalized financial advice, tailored solutions, and exceptional customer service to meet the unique needs of each individual.

Key Differentiators:

• Community Involvement: Sandy Spring Bancorp is deeply rooted in the communities it serves. The company actively supports local businesses, organizations, and initiatives that enhance the social and economic well-being of the region.
• Financial Expertise: The company has a team of experienced financial professionals who provide expert guidance on financial planning, investments, and other banking matters.
• Digital Banking Convenience: Sandy Spring Bancorp offers a suite of digital banking tools and services, including mobile banking, online banking, and remote deposit capture, providing customers with convenient and secure access to their finances.
• Responsible Lending Practices: Sandy Spring Bancorp is committed to responsible lending practices that promote financial stability and economic development within the communities it serves.
• Investment in Technology: The company invests in cutting-edge technology to enhance customer experience, improve operational efficiency, and mitigate risks.

Target Market:

• Individuals and families in the Greater Washington, D.C. metropolitan area
• Small businesses and organizations
• Professionals and investors
• Non-profit organizations and community groups

Benefits for Customers:

• Personalized financial advice and tailored solutions
• Strong community ties and support for local initiatives
• Expert financial guidance and investment management
• Convenient and secure digital banking services
• Responsible lending practices
• Commitment to technology and innovation

Competitive Advantages:

• Local Focus: Sandy Spring Bancorp has a deep understanding of the local market and a strong reputation within the communities it serves.
• Personalized Service: The company's emphasis on personal relationships and tailored solutions sets it apart from larger, national banks.
• Financial Expertise: Sandy Spring Bancorp's experienced team of financial professionals provides valuable insights and guidance to customers.
• Technology Adoption: The company's investments in technology provide a competitive advantage in terms of convenience, efficiency, and security.

Risk Assessment of Sandy Spring Bancorp, Inc.

Sandy Spring Bancorp, Inc. (NASDAQ: SASR) is a financial holding company headquartered in Olney, Maryland. The company operates through its subsidiary, Sandy Spring Bank, which provides a range of financial services to individuals, businesses, and government entities in Maryland, Virginia, and Washington, D.C.

Credit Risk

Credit risk is the primary risk faced by Sandy Spring Bancorp. The company's credit exposure arises from loans and other credit facilities it provides to customers. As of December 31, 2022, Sandy Spring Bancorp had total loans and leases of approximately $10.3 billion.

The company's credit risk is mitigated by its conservative underwriting standards, which include strict lending criteria and comprehensive credit analysis. Additionally, the company maintains a diversified loan portfolio across various industries and geographies. However, economic downturns and other factors can impact the creditworthiness of borrowers, leading to potential loan losses.

Interest Rate Risk

Interest rate risk arises from changes in market interest rates. Sandy Spring Bancorp's net interest income is sensitive to interest rate fluctuations, as it has a significant portion of its assets in interest-earning instruments such as loans and securities.

Rising interest rates can have a positive impact on the company's net interest margin, while declining interest rates can have a negative impact. The company manages its interest rate risk through techniques such as hedging and matching maturities of its assets and liabilities.

Liquidity Risk

Liquidity risk refers to the ability of Sandy Spring Bancorp to meet its financial obligations as they become due. The company's liquidity is primarily funded through deposits, borrowings, and other sources.

The company maintains a diversified funding base with a mix of short-term and long-term liabilities. Additionally, it has access to various liquidity facilities, including the Federal Reserve's discount window. However, economic stress or disruptions in financial markets can impact the company's ability to access liquidity.

Operational Risk

Operational risk encompasses a wide range of potential losses resulting from inadequate or failed internal processes, people, or systems. Sandy Spring Bancorp faces operational risks related to technology failures, fraud, cybersecurity breaches, compliance violations, and human error.

The company has implemented various measures to mitigate operational risks, including investing in technology, enhancing cybersecurity measures, and conducting regular risk assessments. However, operational risks can still occur and impact the company's operations and financial performance.

Concentration Risk

Concentration risk arises when a large portion of a company's financial exposure is concentrated in a single entity or group of entities. Sandy Spring Bancorp has a significant concentration of its loan portfolio in the commercial real estate sector. As of December 31, 2022, approximately 43% of the company's total loans were secured by commercial real estate.

A downturn in the commercial real estate market could lead to higher loan losses for Sandy Spring Bancorp. The company monitors its concentration risk and takes steps to diversify its loan portfolio across industries and geographies.

Other Risks

In addition to the primary risks mentioned above, Sandy Spring Bancorp is also subject to other risks, including:

• Regulatory risk: The company is subject to various regulations from federal and state regulatory agencies, which can impact its operations and financial performance.
• Competition risk: The company faces competition from other banks, credit unions, and financial institutions in its markets.
• Reputational risk: Negative publicity or regulatory actions can damage the company's reputation and impact its customer base and financial performance.

Mitigation Strategies

Sandy Spring Bancorp implements various strategies to mitigate the risks it faces. These strategies include:

• Maintaining a strong capital base and liquidity position
• Conducting thorough credit analysis and diversification of its loan portfolio
• Managing interest rate risk through hedging and matching maturities
• Investing in technology and cybersecurity measures
• Implementing strong internal controls and risk management practices
• Regularly monitoring and assessing emerging risks