Shares of Sandy Spring Bancorp surged over 5% in premarket trading on Monday after announcing a $1.6 billion all-stock deal to be acquired by Atlantic Union Bankshares Corporation (AUB). Under the terms of the agreement, Sandy Spring shareholders will receive 0.9 shares of Atlantic Union stock for each share they own, valuing Sandy Spring at around $34.93 per share based on Atlantic Union's closing price on October 18th.

The combination will create the largest regional bank headquartered in the lower Mid-Atlantic region. The merged entity will have pro forma assets of $39.2 billion, deposits of $32.0 billion, and loans of $29.8 billion as of September 30, 2024. The deal significantly expands Atlantic Union's presence in Northern Virginia and Maryland, adding 53 branch locations and over $6.5 billion in wealth assets under management from Sandy Spring.

Atlantic Union's CEO John C. Asbury highlighted the strategic benefits, stating the deal "will create a preeminent regional bank...that spans the lower mid-Atlantic into the Southeast and that is committed to the communities it serves." The transaction is expected to be accretive to Atlantic Union's earnings per share, with a projected tangible book value earn-back period of approximately 3.5 years.

The merger, unanimously approved by both companies' boards, is subject to regulatory approvals and shareholder approval. It is targeted to close by the end of the third quarter of 2025. Three Sandy Spring board members, including Chair, President and CEO Daniel J. Schrider, will join Atlantic Union's board upon closing.