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Two of the Washington area’s largest regional banks announced a merger Monday that will create the largest regional bank headquartered in the lower Mid-Atlantic.
Under the merger agreement, Atlantic Union Bankshares Corp. will acquire Sandy Spring Bancorp in an all-stock transaction valued at about $1.6 billion. The merger will enhance the combined company’s presence in Northern Virginia and Maryland, according to a news release.
Founded in 1868, Sandy Spring is headquartered in Olney, Md., and has $14.4 billion in assets, $11.7 billion in total deposits and $11.5 billion in total loans as of Sept. 30. The combined company will have pro forma total assets of $39.2 billion, total deposits of $32.0 billion and gross loans of $29.8 billion.
The combined company will add 53 branch locations in the Mid-Atlantic, and Atlantic Union will approximately double its wealth business by increasing assets under management by more than $6.5 billion.
“At our 2018 investor day, I noted that part of our long-term vision was to complete the ‘Golden Crescent’ from Baltimore, through Washington D.C. and Richmond to Hampton Roads and recreate a banking franchise that had not existed since the 1990s,” said John C. Asbury, president and CEO of Atlantic Union. “With today’s announcement of our partnership with Sandy Spring, Atlantic Union will create a preeminent regional bank, with Virginia as its linchpin, that spans the lower mid-Atlantic into the Southeast and that is committed to the communities it serves.”
Daniel J. Schrider, chair, president and CEO of Sandy Spring Bank, said the merger is the right long-term decision for the bank’s shareholders, clients and employees.
“This combination will deliver enhanced scale, diversity in the market and capabilities for our clients, and it will provide greater opportunities for our employees to grow within a larger organization,” Schrider added. “Sandy Spring Bank and Atlantic Union Bank share a people-first approach to doing business and serving our communities, and together we will add even greater value to the individuals, families and businesses we serve across our expanded footprint.”
Under the terms of the merger agreement, each outstanding share of Sandy Spring common stock will be converted into the right to receive 0.900 shares of Atlantic Union common stock. This values the transaction at about $34.93 per Sandy Spring common share, based on Atlantic Union’s closing stock price on Oct. 18. Sandy Spring stock closed at $32.61 on Oct. 18, up about 19% this year.
Three members of the Sandy Spring board of directors, including Schrider, will join the Atlantic Union board of directors upon the closing of the transaction.
The companies said the merger agreement has been unanimously approved by the board of directors of each company. They expect to complete the transaction by the end of the third quarter of next year, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by Atlantic Union shareholders and Sandy Spring stockholders.
Morgan Stanley & Co. LLC is acting as financial advisor to Atlantic Union, and Davis Polk & Wardwell LLP is acting as its legal advisor in the transaction. Keefe, Bruyette & Woods Inc. is acting as financial advisor to Sandy Spring, and Kilpatrick Townsend & Stockton LLP is acting as its legal advisor in the transaction.
