AUB stock holds as deal with SASR gets quick regulatory nod

On Wednesday, Atlantic Union Bankshares (NYSE:AUB) maintained its Market Perform rating and $46.00 price target from Keefe, Bruyette & Woods, following news of a swift regulatory approval for its acquisition of SASR. The analyst at the firm highlighted the rapid three-month approval as an extraordinary development for AUB and a potential positive signal for the banking industry, noting that it is one of the quickest deal approvals witnessed in years.

The AUB/SASR transaction, first announced on October 21, 2024, was initially expected to conclude by the end of the third quarter of 2025. However, the analyst had a more optimistic forecast, anticipating a closure by July 1, 2025. With regulatory approval now secured and shareholder consent anticipated on February 5, the acquisition is now projected to be finalized by the end of the first quarter of 2025. The bank has demonstrated strong financial discipline, maintaining dividend payments for 31 consecutive years, with a current yield of 3.6%.

This expedited approval process could set a precedent for future banking mergers and acquisitions, indicating a potentially smoother and faster path through regulatory hurdles.

The analyst's reiteration of the Market Perform rating and price target suggests a steady outlook for Atlantic Union Bankshares' stock in light of the acquisition developments. InvestingPro analysis reveals the company appears undervalued based on its Fair Value model, with additional insights available in the comprehensive Pro Research Report.

Atlantic Union Bankshares' swift progress towards completing the acquisition of SASR is a noteworthy event in the banking sector, as it could influence the pace and expectations of similar deals in the future.

With all necessary regulatory approvals in place and shareholder approval on the horizon, AUB is poised to finalize the deal well ahead of the original schedule. The company's upcoming earnings report on January 23 will likely provide more details about the acquisition's impact on its robust 9.4% revenue growth.

In other recent news, Atlantic Union Bankshares Corporation has reported substantial financial results, with a net income of $73.4 million and adjusted operating earnings of $74.5 million. The Virginia-based commercial bank has announced a strategic merger with Sandy Spring Bancorp (NASDAQ:SASR), aiming to form the largest regional bank in the Mid-Atlantic region with combined assets of $39 billion. Analysts from Stephens anticipate the merger will deliver a 23% earnings per share accretion and a 20% internal rate of return.

Additionally, Atlantic Union Bankshares has raised its quarterly dividend for common stock shareholders to $0.34 per share. The company also fully exercised its option to enter an additional forward sale agreement with Morgan Stanley (NYSE:MS) & Co. LLC, involving 1,478,873 shares of its common stock.

Stephens has confirmed an Overweight rating on Atlantic Union Bankshares, raising the price target to $46.00. Following the merger, the company plans to sell around $2 billion of commercial real estate loans. These are the recent developments for Atlantic Union Bankshares.

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