425: Atlantic Union Bankshares to Acquire Sandy Spring Bancorp in $39 Billion Merger

Atlantic Union Bankshares Corporation and Sandy Spring Bancorp, Inc. have announced a merger agreement, creating a combined organization with approximately $39 billion in assets.

Summary

• Atlantic Union Bankshares Corporation and Sandy Spring Bancorp, Inc. have entered into a merger agreement.
• Sandy Spring Bank will merge into Atlantic Union Bank, and the combined entity will operate under the Atlantic Union Bank name and brand, headquartered in Richmond, Virginia.
• The merger will result in a combined organization with approximately $39 billion in assets, $32 billion in deposits, and $30 billion in loans, based on data as of September 30, 2024.
• The combined organization will have 184 branches across Virginia, North Carolina, and Maryland.
• The merger is expected to close by the end of the third quarter of 2025.
• John Asbury will remain CEO of the combined organization, and Jay OBrien from Sandy Spring will become President of the Greater Washington and Maryland Region for Wholesale banking.
• Until the merger closes, both banks will operate independently.
• Following the merger, Sandy Spring's systems will be converted to Atlantic Union Bank's systems, with an estimated conversion date in the first quarter of 2026.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook on the merger, emphasizing strategic benefits and growth opportunities. However, it also acknowledges potential challenges such as job redundancies and integration risks, resulting in a moderately positive sentiment.

Positives

• The merger creates a leading regional bank in the lower mid-Atlantic.
• The combined organization will have better scale to compete with larger banks.
• Atlantic Union Bank customers will have access to additional branches after systems conversion.
• The merger is expected to deliver shareholder value and create efficiency.
• The customer-centric cultures of both organizations are considered compatible.
• The merger will result in an expanded footprint for customers.

Negatives

• There will be redundancies in certain positions as a result of the merger.
• Some branch closures may occur due to duplication or efficiency concerns, although no final decisions have been made yet.
• Sandy Spring customers will not be able to use Atlantic Union Bank branches, and vice versa, until systems conversion is complete.
• The integration of the two companies may be more difficult, time-consuming, or costly than expected.

Risks

• The merger agreement may be terminated if certain events or changes occur.
• Regulatory approvals may not be obtained, or may include conditions that adversely affect the combined company.
• Legal proceedings could be instituted against Atlantic Union or Sandy Spring.
• The anticipated benefits of the merger may not be realized.
• The integration of the two companies may be more difficult, time-consuming, or costly than expected.
• Management's attention may be diverted from ongoing business operations.
• Adverse reactions from customers or changes to business or employee relationships could occur.
• Changes in economic, political, and market conditions could impact the merger.
• The potential dilutive effect of shares of Atlantic Union's common stock to be issued in the proposed transaction.

Future Outlook

The combined organization aims to create a leading regional bank in the lower mid-Atlantic, with better scale to compete and support the communities it serves. The focus will be on delivering shareholder value, creating efficiency, and providing a best-in-class customer experience.

Management Comments

• John Asbury will remain CEO of the combined organization.
• Jay OBrien will join Atlantic Union as the President of the Greater Washington and Maryland Region for Wholesale banking.

Industry Context

This merger reflects a trend of consolidation in the banking industry, as institutions seek to gain scale and efficiency to compete with larger national and super-regional banks. The deal positions Atlantic Union Bank as a stronger player in the Mid-Atlantic region.

Comparison to Industry Standards

• The combined entity's $39 billion in assets would place it among the larger regional banks, but still significantly smaller than national players like Bank of America or JPMorgan Chase.
• Comparable regional banks that have pursued similar growth strategies through mergers include Truist Financial Corporation (formed by the merger of BB&T and SunTrust) and Fifth Third Bancorp, although these are significantly larger.
• The success of the merger will depend on the effective integration of systems and cultures, a challenge faced by many similar transactions in the banking sector.

Management Changes

Stakeholder Impact

• Shareholders can expect potential value creation through the merger.
• Employees may experience job redundancies in certain positions.
• Customers will have access to an expanded branch network after systems conversion.
• Communities served by both banks may benefit from the Community Impact Plan.
• The merger aims to deliver a best-in-class customer experience.

Next Steps

• Obtain regulatory approvals.
• Secure approval from Sandy Spring stockholders and Atlantic Union shareholders.
• Integrate Sandy Spring's systems into Atlantic Union Bank's systems.
• Evaluate and address branch overlap.
• Implement the Community Impact Plan, including opening branches in low to moderate income census tracts.

Key Dates