Atlantic Union Bankshares will buy smaller rival Sandy Spring Bancorp for $1.6 billion, they said on Monday, as the regional lender looks to bolster its presence in Northern Virginia and Maryland.
The all-stock transaction is the latest in a string of $1 billion-plus deals in the sector this year as regional banks consolidate to boost scale and shore up balance sheets to better compete against bigger rivals.
Sandy Spring shareholders will receive 0.90 shares of Atlantic for each held. The deal values Sandy Spring at $34.93 apiece, representing a 7.1% premium to the Maryland-based lender’s last close.
Atlantic and Sandy Spring’s shares fell 5.7% and 1.4%, respectively.
The deal will create the largest regional bank headquartered in the lower Mid-Atlantic region with $39.2 billion in assets, the companies said.
Founded in 1868, Sandy Spring had $14.4 billion in assets, as of Sept. 30.
Three Sandy Spring executives, including CEO Dan Schrider, will join Atlantic’s board after the deal closes, expected by the end of the third quarter of 2025.
“GOLDEN CRESCENT” STRATEGY
At its 2018 investor day, Atlantic had outlined expansion plans in the so-called “Golden Crescent”, stretching from Baltimore, through Washington and Richmond, to Hampton Roads.
Since then, the Virginia-based company has acquired smaller rivals Access National and American National Bankshares.
Sandy Spring completes the “Golden Crescent” strategy, Atlantic said.
“It’s a hand-in-glove fit for two great neighboring franchises that have been on similar paths,” Atlantic Union CEO John Asbury said on a conference call.
The deal will nearly double Atlantic’s wealth business, adding more than $6.5 billion in assets. It will also boost the company’s earnings per share by 23% by 2026-end.
“Now it’s an opportunity to really grow the fee-based businesses, along with new client acquisition,” Asbury said.
Either bank will pay $56 million if the deal fails.
Separately in the day, Atlantic raised $350 million in a public offering of nearly 9.9 million shares priced at $35.50 apiece.
Source: Reuters.com