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

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

Summary

• Atlantic Union Bankshares Corporation (AUB) will acquire Sandy Spring Bancorp, Inc. (SASR) in a merger transaction.
• The combined entity will operate under the Atlantic Union Bank name and remain headquartered in Richmond, Virginia.
• The merger will create an organization with approximately $39 billion in assets, $31 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, pending regulatory and shareholder approvals.
• John Asbury will remain CEO of the combined organization, supported by the current Atlantic Union Bank executive leadership team.
• Sandy Spring Bank clients will eventually transition to Atlantic Union Bank systems, with systems conversion and integration estimated to occur in the first quarter of 2026.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook on the merger, emphasizing the strategic benefits and the creation of a stronger regional bank. However, it also acknowledges potential risks and challenges associated with integration and redundancies, leading to a moderately positive sentiment.

Positives

• The merger creates a leading regional bank in the lower mid-Atlantic with Virginia as its linchpin that spans into the Southeast.
• The combined organization will have better scale to compete with larger and smaller banks.
• Sandy Spring Bank and Atlantic Union Bank share a people-first approach to serving their clients, communities and employees.
• Sandy Spring Bank clients will have the convenience of additional branches throughout the expanded footprint after systems conversion.

Negatives

• There will be redundancies in certain positions as a result of the merger.
• Branch closures may occur due to duplication or other efficiency concerns, although no final determinations have been made yet.
• Sandy Spring Bank clients will convert to Atlantic Union Bank systems, and we will clearly communicate the timeline and expectations for this transition.

Risks

• The merger is subject to regulatory approvals, which may impose conditions that could adversely affect the combined company.
• The anticipated benefits of the merger, including cost savings and strategic gains, may not be realized.
• The integration of the two companies may be more difficult, time-consuming, or costly than expected.
• There is a risk of adverse reactions from customers or changes to business or employee relationships.
• General economic, political, and market conditions could impact the success of the merger.

Future Outlook

The combined organization aims to become the leading regional bank in the lower mid-Atlantic, leveraging the strengths of both Atlantic Union Bank and Sandy Spring Bank.

Management Comments

• John Asbury will remain CEO of the combined organization following the merger.
• Until the merger is closed, we will continue to operate independently from Atlantic Union Bank under the leadership of our Chair, President and CEO, Dan Schrider, and the Sandy Spring Bank executive team.

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.

Comparison to Industry Standards

• The combined assets of $39 billion would place the merged entity among the larger regional banks in the Mid-Atlantic region, potentially competing with institutions like Truist Financial Corporation and M&T Bank.
• The focus on community banking aligns with strategies employed by institutions like First Citizens BancShares, which have grown through acquisitions while maintaining a local presence.
• The systems integration timeline of Q1 2026 is a critical factor, as delays in integration can negatively impact customer experience and cost synergies, as seen in other large bank mergers.

Stakeholder Impact

• Shareholders of both companies will vote on the merger.
• Employees may experience job redundancies.
• Customers of Sandy Spring Bank will transition to Atlantic Union Bank systems and gain access to a larger branch network.
• Communities served by both banks may benefit from increased support and resources.

Next Steps

• Obtain regulatory approvals.
• Secure approval from Sandy Spring stockholders and Atlantic Union shareholders.
• Complete the merger by the end of the third quarter 2025.
• Integrate Sandy Spring Bank's systems into Atlantic Union's operations, expected in the first quarter of 2026.
• Evaluate the needs of the combined organization and address redundancies.

Key Dates