10:35 AM EDT, 10/21/2024 (MT Newswires) -- Atlantic Union Bankshares ( AUB ) agreed to acquire Sandy Spring Bancorp ( SASR ) in an all-stock deal worth roughly $1.6 billion, creating the largest regional bank headquartered in the lower Mid-Atlantic.

Under the terms of the transaction, investors of Maryland-based Sandy Spring will receive 0.9 shares of Virginia-based Atlantic Union's stock for each share owned, the banks said in a joint Monday statement. The consideration values the deal at about $34.93 per Sandy Spring share, based on Atlantic Union's closing price on Friday.

Sandy Spring's shares edged down 1.6% in Monday trading, while Atlantic Union's declined 5.3%.

"Our partnership with Atlantic Union is the right long-term decision for our shareholders, clients and employees," Sandy Spring Bank Chief Executive Daniel Schrider said in the joint statement. "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."

The deal, which requires clearance from regulators and approval from both lenders' stockholders, is expected to complete by the end of the third quarter of 2025. Following completion, three members of Sandy Spring's board, including Schrider, will join Atlantic Union's board.

The deal is projected to establish a combined company with $39.2 billion in pro-forma total assets, $32 billion in deposits and $29.8 billion in gross loans, based on financial data as of Sept. 30. Atlantic Union expects the acquisition to roughly double its wealth business and boost the combined company's Mid-Atlantic presence with the addition of 53 branches.

"We believe that the combination of our two companies creates a uniquely valuable franchise that is able to better serve our customers as well as our communities, while creating long-term shareholder value," according to Atlantic Union Chairman Ron Tillett.

Separately, the parent of Atlantic Union Bank reported third-quarter adjusted earnings of $0.83 a share, up from $0.80 the year before. Revenue, expressed as the sum of net interest income and noninterest income, amounted to $217.2 million, compared with $179 million in the 2023 quarter. The bank separately priced a common stock offering of 9.86 million shares at $35.50 per share for an aggregate amount of $350 million. The underwriters have an option to purchase up to an additional 1.48 million shares.

Sandy Spring's core earnings for the September quarter declined to $0.40 per share from $0.62 year over year. Revenue ticked down to $101.1 million from $102.5 million.

Price: 37.12, Change: -1.69, Percent Change: -4.35