Sandy Spring Bancorp in Olney, Md., had to conduct some cleanup ahead of its planned sale to Atlantic Union Bankshares in Richmond, Va.
The $14.1 billion-asset Sandy Spring said in a press release that it lost $39.5 million in the fourth quarter after taking a $54.4 million goodwill impairment charge. The charge resulted from the company’s annual goodwill impairment test, completed in October, and was based on the terms of the merger agreement with Atlantic Union.
The test used the terms of the merger agreement, taking into account Atlantic Union’s most-recent closing stock price before the merger announcement date and the forward sale price for its common stock. The valuation method resulted in Sandy Spring’s estimated fair value being below its book value.
The company noted that the noncash charge has no impact on regulatory capital ratios, cash flows, core operating performance, or liquidity position.
Sandy Spring also noted that total assets declined from a quarter earlier after its reduced FHLB advanced by $200 million.