10-K/A: Sandy Spring Bancorp Files Amendment to 10-K, Updates Executive and Director Information Ahead of Merger

Sandy Spring Bancorp files an amendment to its 2024 Form 10-K to update information on directors, executive officers, and corporate governance in anticipation of its merger with Atlantic Union Bankshares Corporation.

Summary

• Sandy Spring Bancorp filed Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
• The amendment updates Part III (Items 10-14) of the Form 10-K to include information previously omitted in reliance on General Instruction G(3) to Form 10-K.
• The updated information pertains to directors, executive officers, corporate governance, executive compensation, security ownership, and related matters.
• The amendment also includes certain exhibits in the exhibit index under Item 15 of Part IV.
• Sandy Spring Bancorp and Atlantic Union Bankshares Corporation (AUB) announced a definitive merger agreement on October 21, 2024, which was approved by shareholders on February 5, 2025.
• The merger is expected to close on April 1, 2025.
• The company does not anticipate holding a 2025 annual meeting or filing a corresponding definitive proxy statement.
• The amendment includes certifications by the principal executive officer and principal financial officer.
• The aggregate market value of the voting common stock of the registrant held by non-affiliates on June 30, 2024, was approximately $1.1 billion, based on the closing sales price of $24.36 per share of the registrant's Common Stock on June 30, 2024.
• The number of outstanding shares of common stock outstanding as of February 18, 2025 was 45,140,417 shares.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The document primarily contains factual updates and disclosures related to executive compensation and corporate governance. The upcoming merger is a significant event, but the document itself doesn't express strong positive or negative sentiment.

Positives

• Shareholders approved the merger agreement with Atlantic Union Bankshares Corporation (AUB).
• The company has a Clawback Policy in place to recover erroneously awarded incentive-based compensation.
• The company prohibits hedging and pledging of company securities by directors and executive officers.
• The company has stock ownership guidelines for executives to align their interests with those of shareholders.
• The company's Audit Committee is composed of independent directors and operates under a written charter.
• The company's Board has determined that all current members of the Board, other than Mr. Schrider and Mr. Cook, are independent directors.

Negatives

• The company's 2022-2024 PRSUs payout was at 56.67% of target due to relative ROTCE performance at the 33rd percentile and a bottom quartile relative 3-year TSR.
• The company's core ROAA was 0.62% in 2024, resulting in a minimum contribution of 3% of base salary for executive officers under the NQDC Plan.
• The company's CEO pay ratio is 40.41 to 1, which may be a concern for some stakeholders.

Risks

• The merger with AUB could have unforeseen consequences.
• The company's performance-based compensation is subject to downward adjustment if the Compensation Committee determines that risk was not properly considered or managed.
• The company's compensation may be impacted by Section 280G and Section 4999 of the Code.
• The company's ability to deduct compensation in excess of $1 million paid to certain executive officers may be limited by Section 162(m) of the Internal Revenue Code.

Future Outlook

The merger with Atlantic Union Bankshares Corporation is expected to close on April 1, 2025.

Industry Context

The document provides insight into executive compensation practices within the banking industry, particularly for institutions of similar asset size. The peer group analysis offers a glimpse into how Sandy Spring Bancorp benchmarks its compensation against competitors to attract and retain talent.

Comparison to Industry Standards

• The document references a peer group of publicly traded banks and bank holding companies with assets between approximately $7.0 to $30 billion, including companies like Atlantic Union Bankshares Corp. (AUB), Fulton Financial Corporation (FULT), and Wesbanco, Inc. (WSBC).
• The median asset size of the peer group was $13.8 billion, placing the company at the 51st percentile, based on assets as of June 30, 2023.
• The company's executive compensation practices, such as the use of performance-based restricted stock units (PRSUs) and non-qualified deferred compensation plans, are common in the banking industry.
• The company's stock ownership guidelines for executives are also in line with industry standards.
• The company's CEO pay ratio of 40.41 to 1 may be compared to other banks of similar size to assess its relative position.

Stakeholder Impact

• Shareholders will be impacted by the upcoming merger with Atlantic Union Bankshares Corporation.
• Executive officers may be impacted by changes in compensation and benefits related to the merger.
• Employees may be impacted by changes in organizational structure and job responsibilities related to the merger.
• Customers may be impacted by changes in products and services related to the merger.

Next Steps

• The merger with Atlantic Union Bankshares Corporation is expected to close on April 1, 2025.
• The company will continue to monitor and adjust its executive compensation program to align with its strategic objectives and competitive market practices.

Key Dates

Keywords

merger, executive compensation, directors, corporate governance, Form 10-K, Sandy Spring Bancorp, Atlantic Union Bankshares, ROAA, ROTCE, PRSUs, stock ownership, incentive compensation, audit committee, officers