Sandy Spring Bancorp, Inc., the parent company of Sandy Spring Bank, will acquire Virginia-based WashingtonFirst Bankshares, creating the largest locally headquartered community bank in the region, officials said.
The agreement, announced by the two companies Tuesday morning, creates a $7.5 billion financial services company.
The transaction has been unanimously approved by the board of directors of each company and is subject to shareholder and regulatory approval and other customary closing conditions. Clients of Sandy Spring Bank and WashingtonFirst Bank will not notice any immediate changes, officials said in a statement, and both banks will continue to conduct business as usual.
Sandy Spring said the acquisition will allow it to broaden its services and client base, particularly in northern Virginia.
“Following our record earnings announcement, this expansion and the combination of two strong local banks will create a premier bank that will better serve clients across the Greater Washington D.C. region and preserve the tradition of true community banking,” said Sandy Spring President and CEO Daniel J. Schrider, who will continue to serve in that role. “Our mix of products and services are complementary, our cultures are aligned, and we share a commitment to providing the best possible service to our clients over a lifetime. Together, we look forward to serving more than 60,000 individuals and families, and nearly 30,000 local businesses, helping to create jobs and fuel the regional economy. ”
Upon closing, Sandy Spring Bank will merge WashingtonFirst Bank into Sandy Spring Bank. WashingtonFirst’s Chairman Joseph Searcy Bracewell; President and CEO Shaza L. Andersen; and two other directors will join Sandy Spring’s board.
Sandy Spring operates 44 branches and six financial centers in Maryland, Northern Virginia and Washington. It has more than $5.2 billion in assets. WashingtonFirst, headquartered in Reston, Virginia, has 19 community banking offices and more than $2.1 billion in assets.
Under the terms of the agreement, WashingtonFirst shareholders are expected to receive .8713 shares of Sandy Spring common stock for each share owned of WashingtonFirst common stock, subject to adjustment if Sandy Spring’s average stock price during a specified measurement period prior to closing is more than $50.15 or less than $37.07 per share.
The transaction, which is expected to close in the fourth quarter, has a value of $489 million in the aggregate, based on Sandy Spring’s closing price of $41.89 on May 12. Upon closing, Sandy Spring shareholders will own approximately 67.8 percent of the combined company and WashingtonFirst’s shareholders will own approximately 32.2 percent of the combined company.
At a later date, WashingtonFirst Bank’s branding will change to Sandy Spring Bank, with the full conversion of systems expected to occur in early 2018.
The Kafafian Group, Inc. served as financial adviser to Sandy Spring, and Sandler O’Neill & Partners, L.P. provided a fairness opinion. Keefe, Bruyette & Woods served as financial adviser to WashingtonFirst. Kilpatrick Townsend & Stockton LLP provided legal counsel to Sandy Spring, and Troutman Sanders LLP provided legal counsel to WashingtonFirst.