425: Sandy Spring Bancorp and Atlantic Union Bankshares Announce Merger Agreement

Sandy Spring Bancorp and Atlantic Union Bankshares have agreed to merge, creating a combined company with approximately $39 billion in assets and $13 billion in wealth management assets.

Summary

• Sandy Spring Bancorp, Inc. (SASR) and Atlantic Union Bankshares Corporation (AUB) have entered into a merger agreement.
• Sandy Spring Bank will become part of Atlantic Union Bank and operate under the Atlantic Union Bank name and brand in the latter half of 2025.
• The combined company will have approximately $39 billion in total assets.
• The combined wealth groups will have $13 billion in assets under management.
• The merger is expected to provide enhanced scale and capabilities for clients, drive shareholder value, and provide greater opportunities for employees.
• The collective footprint will include DC, Maryland, Virginia, and North Carolina.
• Shareholders of both companies need to approve the transaction.
• Regulatory approvals are required for the merger to proceed.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook regarding the merger, emphasizing benefits such as enhanced scale, shareholder value, and employee opportunities. However, it also acknowledges potential risks and uncertainties associated with the transaction, leading to a moderately positive sentiment score.

Positives

• The merger is expected to enhance scale and capabilities for clients.
• The merger is expected to drive shareholder value.
• The merger is expected to provide greater opportunities for employees.
• The combined company will have a larger footprint across DC, Maryland, Virginia, and North Carolina.
• The combined company will have significant assets under management.

Negatives

• Sandy Spring Bank will lose its name and brand, transitioning to Atlantic Union Bank.
• The merger is subject to regulatory and shareholder approvals, which introduces uncertainty.
• Integration of the two companies may be more difficult, time-consuming, or costly than expected.
• There is potential for adverse reactions from customers or changes to business or employee relationships.

Risks

• The merger agreement could be terminated under certain circumstances.
• Regulatory approvals may not be obtained, or may include conditions that adversely affect the combined company.
• Legal proceedings could be instituted against AUB or SASR.
• Anticipated benefits of the merger may not be realized due to various economic and market conditions.
• Integration of the two companies may be more difficult, time-consuming, or costly than expected.
• Management's attention could be diverted from ongoing business operations.
• Adverse reactions from customers or changes to business or employee relationships could occur.
• A material adverse change in the financial condition of AUB or SASR could occur.
• Changes in AUB's or SASR's share price before closing could impact the deal.
• General competitive, economic, political, and market conditions could impact the merger.
• Major catastrophes such as earthquakes, floods, or infectious disease outbreaks could impact the merger.
• Changes in asset quality, credit risk, interest rates, deposit flows, inflation, and customer behavior could impact the merger.
• Technological changes, capital management activities, and actions of the Federal Reserve Board could impact the merger.

Future Outlook

The merger is expected to deliver enhanced scale and capabilities for clients, drive shareholder value, and provide greater opportunities for employees, with the combined company operating under the Atlantic Union Bank name in the latter half of 2025.

Management Comments

• Daniel J. Schrider, Chair, President & CEO of Sandy Spring Bancorp, stated that the combination will deliver enhanced scale and capabilities for clients, drive shareholder value, and provide greater opportunities for employees.
• Daniel J. Schrider emphasized that while the name will change, the values and commitment to customers remain the same.
• Daniel J. Schrider noted that Atlantic Union Bank shares a people-first approach to doing business and serving communities.

Industry Context

The merger reflects a trend of consolidation in the banking industry, where institutions are seeking to achieve greater scale and efficiency to compete effectively and enhance shareholder value. This merger will create a stronger regional bank with a larger footprint and increased assets under management.

Comparison to Industry Standards

• The combined company's $39 billion in assets would place it among the larger regional banks in the Mid-Atlantic region.
• Comparable mergers in the banking sector often aim for similar benefits, such as cost savings, revenue synergies, and expanded market presence.
• The $13 billion in assets under management for the combined wealth groups is a significant figure, comparable to other regional banks with established wealth management divisions.

Stakeholder Impact

• Shareholders are expected to benefit from increased value.
• Employees are expected to have greater opportunities within the larger organization.
• Customers are expected to benefit from enhanced scale and capabilities.
• Communities are expected to benefit from the combined company's commitment to making them a better place to live, work, and raise a family.

Next Steps

• AUB intends to file a Registration Statement on Form S-4 with the SEC.
• A definitive Joint Proxy Statement/Prospectus will be sent to the shareholders of AUB and the stockholders of SASR to seek their approval of the proposed transaction.
• Investors, shareholders of AUB and stockholders of SASR are urged to read the Registration Statement and Joint Proxy Statement/Prospectus regarding the proposed transaction when they become available and any other relevant documents filed with the SEC.

Key Dates