2. ACQUISITIONS

Sandy Spring Bancorp, Inc. Acquisition

On April 1, 2025, the Company completed its previously announced acquisition of Sandy Spring, the holding company for Sandy Spring Bank, headquartered in Olney, Maryland. Under the terms of the Sandy Spring merger agreement, at the effective time of the Sandy Spring acquisition, each outstanding share of Sandy Spring common stock was converted into the right to receive 0.900 shares of the Company’s common stock, with cash paid in lieu of fractional shares, resulting in 41.0 million additional shares issued, or an aggregate transaction value of approximately $1.3 billion, based on the closing price per share of the Company’s common stock as quoted on the New York Stock Exchange (“NYSE”) on March 31, 2025, which was the last trading day prior to the consummation of the acquisition. With the acquisition of Sandy Spring, the Company acquired more than 50 branches in Virginia, Maryland, and Washington, D.C., enhancing the Company’s presence in Northern Virginia and Maryland.

Preliminary goodwill associated with the Sandy Spring acquisition totaled $519.2 million at December 31, 2025, allocated between the Company’s Wholesale Banking ($404.9 million) and Consumer Banking ($114.3 million) reporting segments, which is not deductible for tax purposes. The goodwill at December 31, 2025 was calculated based on the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date, inclusive of subsequent measurement period adjustments described below and is subject to change if the Company obtains additional information and evidence within the one-year measurement period, which ends at the end of the first quarter of 2026. Valuations subject to change during the measurement period include, but are not limited to: LHFI, identified intangible assets, certain deposits, certain other assets and liabilities, and related deferred income taxes. The Company recorded measurement period adjustments in the third and fourth quarters of 2025, primarily related to fair values of certain loans, other assets, and other liabilities, which resulted in a $22.4 million increase in preliminary goodwill associated with the Sandy Spring acquisition compared to April 1, 2025.

The following table provides a preliminary assessment of the consideration transferred and the fair value of the assets acquired and liabilities assumed as of the date of the Sandy Spring acquisition, inclusive of the aforementioned measurement period adjustments (dollars in thousands).

⁽¹⁾ Other assets include deferred tax assets, accrued interest receivable, accounts receivable, and other intangibles, as well as other miscellaneous assets acquired from Sandy Spring.

American National Bankshares Inc. Acquisition

On April 1, 2024, the Company completed its merger with American National, the holding company for American National Bank and Trust Company, headquartered in Danville, Virginia. Under the terms of the American National merger agreement, at the effective time of the merger, each outstanding share of American National common stock was converted into 1.35 shares of the Company’s common stock, resulting in 14.3 million additional shares issued, or aggregate consideration of $505.5 million, based on the closing price per share of the Company’s common stock as quoted on NYSE on March 28, 2024, which was the last trading day prior to the consummation of the acquisition. With the acquisition of American National, the Company acquired 26 branches, deepening its presence in Central and Western Virginia, and expanding its franchise into contiguous markets in Southern Virginia and in North Carolina.

As a result of the American National acquisition, the Company recorded goodwill totaling $288.8 million, allocated between the Company’s Wholesale Banking ($210.8 million) and Consumer Banking ($78.0 million) reporting segments, which is not deductible for tax purposes, and includes all final subsequent fair value adjustments, as the one-year measurement period is closed.

The following table provides a summary of the consideration transferred and the fair value of the assets acquired and liabilities assumed as of the date of the American National acquisition (dollars in thousands):

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The Company assessed the fair value for significant assets acquired and liabilities assumed based on the following methods:

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Unaudited Pro forma Impact of the Acquisitions

The following table presents for illustrative purposes only certain unaudited pro forma information as if the Company had acquired Sandy Spring on January 1, 2024 and American National on January 1, 2023. These results combine the historical results of Sandy Spring and American National in the Company's Consolidated Statements of Income and while certain adjustments were made for the estimated impact of certain fair value adjustments and other acquisition-related activity. These results are not indicative of what would have occurred had the Sandy Spring and American National acquisitions taken place on January 1, 2024 and January 1, 2023, respectively. No adjustments have been made to the pro forma results regarding possible revenue enhancements, provision for credit losses, or expense efficiencies. Pro forma adjustments below include the net impact of Sandy Spring’s and American National’s accretion and the elimination of merger-related costs, as disclosed below. The Company expects to achieve further operating cost savings and other business synergies, as a result of the Sandy Spring and American National acquisitions, which are not reflected in the pro forma amounts below (dollars in thousands):

⁽¹⁾ Includes net interest income and noninterest income.

⁽²⁾ Includes the net impact of Sandy Spring’s accretion adjustments of $21.0 million for the year ended December 31, 2025.

⁽³⁾ Includes the net impact of Sandy Spring’s and American National’s accretion adjustments of $85.8 million and $5.0 million, respectively, for the year ended December 31, 2024.

⁽⁴⁾ Includes the net impact of American National’s accretion adjustments of $19.7 million for the year ended December 31, 2023.

⁽⁵⁾ For the years ended December 31, 2025, 2024, and 2023, excludes merger-related costs as noted below.

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Merger-related costs, net of tax, were $124.6 million, $33.5 million, and $2.9 million for the years ended December 31, 2025, 2024, and 2023, respectively, and have been expensed as incurred and are recorded as “Merger-related costs” on the Company’s Consolidated Statements of Income. For the year ended December 31, 2025, merger-related costs solely related to the Sandy Spring acquisition, while merger-related costs for the year ended December 31, 2024, related to both the American National and Sandy Spring acquisitions. For the year ended December 31, 2023, merger-related costs related solely to the American National acquisition. Merger-related costs include costs associated with employee severance, other employee related costs, professional fees, information technology related costs, including system conversion, and lease and contract termination expense.

The Company’s operating results for the years ended December 31, 2025 and 2024 include the operating results of the acquired assets and assumed liabilities of Sandy Spring subsequent to the acquisition on April 1, 2025 and American National subsequent to the acquisition on April 1, 2024, respectively. Revenues and earnings since the acquisition date of the former operations of Sandy Spring and American National have not been disclosed due to the merging of certain processes and the conversion of Sandy Spring’s and American National’s systems that occurred in the fourth quarter of 2025 and the second quarter of 2024, respectively. As a result, separate financial information is not readily available.