Atlantic Union Bankshares to boost Mid-Atlantic presence with Sandy Spring Bancorp acquisition

Atlantic Union Bankshares Corporation (NYSE: AUB) has announced a definitive agreement to acquire Sandy Spring Bancorp (Nasdaq: SASR) in a $1.6 billion all-stock transaction, set to reshape the mid-Atlantic banking landscape. The deal aims to consolidate Atlantic Union’s presence, making it the largest regional bank headquartered in the lower mid-Atlantic and expanding its influence in Northern Virginia and Maryland.

Key Details of the Transaction

Under the terms of the merger agreement, each outstanding share of Sandy Spring Bancorp will be exchanged for 0.900 shares of Atlantic Union’s common stock, valuing Sandy Spring shares at approximately $34.93 based on Atlantic Union’s stock price on October 18, 2024. The companies anticipate that the transaction, pending regulatory and shareholder approvals, will close by Q3 2025.

This merger is expected to create a financial powerhouse with pro forma assets of $39.2 billion, deposits totaling $32.0 billion, and gross loans amounting to $29.8 billion as of September 30, 2024. The acquisition will enhance Atlantic Union’s footprint with the addition of 53 branch locations and increase its wealth management assets by over $6.5 billion, nearly doubling its existing wealth business.

Strategic Expansion and Vision Fulfillment

John C. Asbury, President and CEO of Atlantic Union, highlighted that this merger fulfills a strategic vision laid out in 2018, aiming to establish a cohesive banking network stretching from Baltimore through Washington D.C. to the Southeast, with Virginia as the central hub. He remarked that the partnership with Sandy Spring will solidify Atlantic Union’s position as a leading regional player, bringing together two prominent banks with deep-rooted connections in the community.

Sandy Spring’s CEO, Daniel J. Schrider, stated that the merger represents a forward-looking decision for the bank’s shareholders, employees, and clients. He emphasized that combining the two entities would provide expanded market diversity, enhanced capabilities, and greater opportunities for staff within a larger organization. Schrider noted that both banks share a commitment to a “people-first” approach, which they believe will translate into better service for the communities they operate in.

Stock Performance and Market Sentiment

Atlantic Union’s stock was last recorded at $38.81 in mid-October 2024, showing stability despite broader market fluctuations. Market analysts anticipate a positive trend for Atlantic Union’s stock as the company expands its market reach and operational capabilities through this merger. The sentiment remains optimistic as investors react to the strategic growth and increased market share expected from the Sandy Spring acquisition.

Governance and Leadership Adjustments

As part of the agreement, three members of Sandy Spring’s board, including Daniel Schrider, will join Atlantic Union’s board upon completion of the merger. The integration of leadership teams is seen as a step towards ensuring continuity and aligning the strategic vision of both institutions.

Advisory Support and Timeline

The merger has received unanimous approval from the boards of both companies. Morgan Stanley & Co. LLC is advising Atlantic Union on the transaction, with legal counsel provided by Davis Polk & Wardwell LLP. Keefe, Bruyette & Woods, Inc., a Stifel company, is serving as the financial advisor to Sandy Spring, with Kilpatrick Townsend & Stockton LLP acting as its legal representative.

The companies aim to complete the transaction by the third quarter of 2025, subject to regulatory approval and shareholder consent.

Expert Analysis: A Strategic Move to Dominate the Mid-Atlantic Market

A financial analyst and market expert, speaking on condition of anonymity, noted that this merger represents a significant move for Atlantic Union to solidify its dominance in the mid-Atlantic market. By acquiring Sandy Spring, Atlantic Union not only increases its branch network but also bolsters its asset management division, adding billions to its portfolio. The analyst emphasized that this strategic consolidation would likely enhance shareholder value and create a more robust, competitive entity in the regional banking space.