GAITHERSBURG – Two Montgomery County-based community banks recently announced their plans to join forces so they can continue to boost their earnings and expand their presence, pending investor approval and other closing requirements.
The companies must receive approval from investors, as well as meet other requirements for closing a deal, before the banks can make the merger final. Sandy Spring Bancorp Inc., the holding company of Sandy Spring Bank, based in Olney, plans to absorb Revere Bank, whose headquarters are in Rockville. The two companies shared their plan in a joint news release Sept. 24.
Daniel J. Schrider, president and chief executive officer of Sandy Spring Bank, would continue to serve in the role if the merger goes to completion. Schrider said he is confident in the appropriateness of the timing of the proposal.
“Our company has great momentum, and the announcement today reinforces our position of strength in this market,” said Schrider.
According to the news release, company officials announced on Sept. 24 that they had entered an agreement for Sandy Spring Bancorp to acquire Revere.
The companies said they estimate the proposed merger would result in combined assets of $11.2 billion, which would help Sandy Spring Bancorp meet and surpass its $10-billion benchmark for growth. That should also enhance Sandy Spring Bancorp’s presence in its core market.
Sandy Spring Bancorp and Revere Bank had not finalized their proposed merger deal as of the date of the news release.
The two companies expect the deal to close and for Revere to be completely absorbed into Sandy Spring Bancorp during the first quarter of next calendar year, according to the news release.
No changes will be visible to customers right after the deal closes, however, because the banks will continue to “conduct business as usual” for a while. Then, the branding of Revere will change to Sandy Spring Bank at an undisclosed later date.
Officials wrote in the news release that they expect Revere systems to finish converting to Sandy Spring Bank systems in the middle of calendar year 2020.
Potential future changes in the economy in the Washington region or in the nation, delays, cost increases or complications in integrating operations of the banks, changes in securities markets, and changes in deposit flows or demand for financial services that banks offer are among the many factors that could alter the anticipated outcomes of the proposed merger, according to the news release.
The proposed merger, once completed, would not be the only time Sandy Spring Bancorp grew during the past few years.
“Over the past two years, we have significantly expanded our geographic footprint, delivered record annual earnings (…) and continued to build a strong team of local professionals and industry experts,” Schrider said.
The co-heads of the bank that Sandy Spring Bancorp is scheduled to absorb will not be leaving the picture. Revere’s Co-Presidents and Chief Executive Officers Drew Flott and Ken Cook will join Sandy Spring Bank upon the closing of the deal. The plan is for Cook to become an executive vice president, serving as president of commercial banking. Flott, then, would become a division executive within Sandy Springs’ Corporate Finance group, in which he will co-lead the integration. Flott’s responsibilities would also include working with senior leadership to find and put into place strategies to improve operations and to spur growth.
“Sandy Spring Bank is a trusted, local company, and we are excited to work together to preserve the tradition of community banking, accelerate their strong momentum and meet the diverse needs of the clients we serve,” said Flott.
“Partnering with Sandy Spring Bank reflects our long-term commitment to our community and our clients, and we look forward to joining the company,” Cook said. “Our clients will truly benefit from the extensive products and sophisticated services that they will soon have access to throughout the Greater Washington region.”
Schrider said Cook and Flott will “play an instrumental role in providing a seamless client experience as we work through the integration of our two companies,” and that he will be delighted to add them to Sandy Spring Bank’s team of experienced bankers.
A local economic development leader said he believes that the proposed deal has the potential to help Montgomery County, depending on what transpires in the deal. Bill Tompkins, interim president and chief executive officer of Montgomery County Economic Development Corporation, said he was aware of the proposed merger. If the proposed merger were to help strengthen both banks, then that would help other businesses in the county, he said.
“One of the biggest challenges of businesses everywhere, including in Montgomery, is not having enough access to capital, meaning cash, or financing or money to sustain or grow their businesses,” said Tompkins.
If a bank becomes stronger and can give out more loans and provide cash flow to the companies, then “it extends the lifeline of those other businesses,” Tomkins said.