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, remaining 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.
• 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 with Virginia as its linchpin.
• The combined organization will have better scale to compete with larger banks and better support the communities it serves.
• Atlantic Union Bank customers will have access to additional branches throughout the expanded footprint after systems conversion.
• The customer-centric cultures of both organizations are considered compatible.
• The merger is expected to create efficiency and deliver a best-in-class customer experience.

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 decisions have been made yet.
• Until systems conversion is complete, customers will not be able to use branches of both banks interchangeably.

Risks

• The merger is subject to regulatory approvals and the approval of Sandy Spring stockholders and Atlantic Union shareholders.
• The integration of the two companies may be more difficult, time-consuming, or costly than expected.
• There is a risk of potential adverse reactions from customers or changes to business or employee relationships.
• The diversion of management's attention from ongoing business operations and opportunities is a potential risk.
• Changes in general economic and market conditions, interest rates, and laws and regulations could impact the anticipated benefits of the merger.

Future Outlook

The combined organization aims to become the leading regional bank in the lower mid-Atlantic, with Virginia as its linchpin, and to better compete with larger banks while supporting the communities it serves.

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, where institutions are seeking 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 US, comparable to institutions like Synovus Financial Corp or First Horizon before its acquisition by TD Bank was terminated.
• The focus on the Mid-Atlantic region mirrors strategies of other regional players like PNC Financial Services, which has expanded through acquisitions in similar markets.
• The emphasis on community banking aligns with the approach of banks like M&T Bank, which prioritize local relationships and community involvement.

Management Changes

Stakeholder Impact

• Shareholders of both companies will be asked to approve the merger.
• Employees may experience job redundancies in certain positions.
• Customers of both banks will eventually have 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.
• Integrate Sandy Spring's systems into Atlantic Union Bank's systems, expected in the first quarter of 2026.
• Evaluate and potentially consolidate branch locations.
• Open 3 branches in low to moderate income census tracts as part of the Community Impact Plan.

Key Dates