ACQUISITION OF WASHINGTONFIRST BANKSHARES INC

3 Months Ended

Mar. 31, 2018

Acqusition of WashingtonFirst Bankshares Inc. [Abstract]

Business Combination Disclosure

NOTE 2 - ACQUISITION OF WASHINGTONFIRST BANKSHARES, INC.

On January 1, 2018 (“Acquisition Date”), the Company completed its acquisition of WashingtonFirst Bankshares, Inc. (“WashingtonFirst”) in a transaction valued at approximately $447 million in the aggregate, based on the Company’s closing market price of $39.02 on December 29, 2017. The Company issued an aggregate of 11,446,197 shares of the Company’s common stock in the transaction. At the effective date of the acquisition, Sandy Spring shareholders owned approximately 67.7% and WashingtonFirst’s shareholders owned approximately 32.3% of the combined company. As of the Acquisition Date, WashingtonFirst was merged into the Company and WashingtonFirst’s wholly-owned subsidiary, WashingtonFirst Bank, was merged with and into Sandy Spring Bank.

WashingtonFirst, headquartered in Reston, Virginia, had 19 community banking offices throughout the Washington D.C. metropolitan region and more than $2.1 billion in assets as of December 31, 2017. In addition, WashingtonFirst provided wealth management services through its subsidiary, 1st Portfolio Wealth Advisors, and mortgage banking services through the bank’s subsidiary, WashingtonFirst Mortgage Corporation.

The acquisition of WashingtonFirst is being accounted for as a business combination using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration paid are recorded at estimated fair values on the Acquisition Date. The provisional amount of goodwill recognized was approximately $257 million. The estimated fair values of the acquired assets and assumed liabilities will be subject to refinement as additional information relative to closing date fair values becomes available. Any subsequent adjustments to the fair values of acquired assets and liabilities assumed, identifiable intangible assets, or other purchase accounting adjustments will result in adjustments to goodwill within the first 12 months following the closing date of acquisition.

The consideration paid for WashingtonFirst's common equity and the provisional fair values of acquired identifiable assets and liabilities assumed as of the Acquisition Date were as follows:

(In thousands)				January 1, 2018
Purchase Price:
	Fair value of common shares issued (11,446,197 shares),		$	446,640
	based on Sandy Spring's share price of $39.02
	Cash for fractional shares			10
		Total purchase price	$	446,650
Identifiable assets:
	Cash and cash equivalents		$	32,497
	Residential mortgage loans held for sale			25,789
	Investment securities			302,321
	Loans			1,683,683
	Premises and equipment			4,602
	Other Real Estate Owned			497
	Accrued Interest Receivable			6,648
	Other Intangible assets			11,370
	Other Assets			33,764
		Total identifiable assets	$	2,101,171
Identifiable liabilities:
	Deposits		$	1,610,327
	Borrowings			283,808
	Other Liabilities			17,525
		Total identifiable liabilities	$	1,911,660
Provisional fair value of net assets acquired including identifiable intangible assets				189,511
Provisional resulting goodwill			$	257,139