SEGMENT REPORTING

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

SEGMENT REPORTING

Note 25 - Segment Reporting

Currently, the Company conducts business in three operating segments—Community Banking, Insurance and Investment Management. Each of the operating segments is a strategic business unit that offers different products and services. The Insurance and Investment Management segments were businesses that were acquired in separate transactions where management of acquisition was retained. The accounting policies of the segments are the same as those of the Company. However, the segment data reflects inter-segment transactions and balances.

The Community Banking segment is conducted through Sandy Spring Bank and involves delivering a broad range of financial products and services, including various loan and deposit products to both individuals and businesses. Parent company income is included in the Community Banking segment, as the majority of effort of these functions is related to this segment. Major revenue sources include net interest income, gains on sales of mortgage loans, trust income, fees on sales of investment products and service charges on deposit accounts. Expenses include personnel, occupancy, marketing, equipment and other expenses. Non-cash charges associated with amortization of intangibles related to the acquired entities totaled $1.7 million and $1.9 million for the years ended December 31, 2019 and December 31, 2018, respectively, and were not significant for the year ended December 31, 2017.

The Insurance segment is conducted through Sandy Spring Insurance Corporation, a subsidiary of the Bank, and offers annuities as an alternative to traditional deposit accounts. Sandy Spring Insurance Corporation operates Sandy Spring Insurance, a general insurance agency located in Annapolis, Maryland, and Neff and Associates, located in Ocean City, Maryland. Major sources of revenue are insurance commissions from commercial lines, personal lines, and medical liability lines. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles related to the acquired entities were not significant for the years ended December 31, 2019, 2018 and 2017, respectively.

The Investment Management segment is conducted through West Financial Services, Inc., a subsidiary of the Bank. This asset management and financial planning firm, located in McLean, Virginia, provides comprehensive investment management and financial planning to individuals, families, small businesses and associations including cash flow analysis, investment review, tax planning, retirement planning, insurance analysis and estate planning. West Financial currently has approximately $1.7 billion in assets under management. Major revenue sources include non-interest income earned on the above services. Expenses include personnel and support charges. Non-cash charges associated with amortization of intangibles related to the acquired entities was not significant for the years ended December 31, 2019, 2018 and 2017, respectively.

Information for the operating segments and reconciliation of the information to the consolidated financial statements for the years ended December 31 is presented in the following tables:

	2019
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	347,867	$	26	$	13	$	(37)	$	347,869
Interest expense		82,598		-		-		(37)		82,561
Provision for loan losses		4,684		-		-		-		4,684
Non-interest income		55,042		6,621		10,326		(667)		71,322
Non-interest expenses		166,802		5,731		7,219		(667)		179,085
Income before income taxes		148,825		916		3,120		-		152,861
Income tax expense		35,350		258		820		-		36,428
Net income	$	113,475	$	658	$	2,300	$	-	$	116,433
Assets	$	8,624,590	$	10,340	$	16,424	$	(22,352)	$	8,629,002

	2018
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	324,081	$	3	$	8	$	(10)	$	324,082
Interest expense		63,647		-		-		(10)		63,637
Provision for loan losses		9,023		-		-		-		9,023
Non-interest income		45,841		6,153		9,670		(615)		61,049
Non-interest expenses		168,261		5,601		6,536		(615)		179,783
Income before income taxes		128,991		555		3,142		-		132,688
Income tax expense		30,827		169		828		-		31,824
Net income	$	98,164	$	386	$	2,314	$	-	$	100,864
Assets	$	8,246,282	$	9,165	$	16,332	$	(28,507)	$	8,243,272

	2017
	Community				Investment		Inter-Segment
(In thousands)	Banking		Insurance		Mgmt.		Elimination		Total
Interest income	$	194,798	$	2	$	7	$	(8)	$	194,799
Interest expense		26,039		-		-		(8)		26,031
Provision for loan losses		2,977		-		-		-		2,977
Non-interest income		37,447		6,233		8,335		(772)		51,243
Non-interest expenses		119,607		5,533		4,731		(772)		129,099
Income before income taxes		83,622		702		3,611		-		87,935
Income tax expense		33,684		(399)		1,441		-		34,726
Net income	$	49,938	$	1,101	$	2,170	$	-	$	53,209
Assets	$	5,446,056	$	8,873	$	13,126	$	(21,380)	$	5,446,675