Exhibit 4.2





 


SANDY SPRING BANCORP, INC.


 


FIRST SUPPLEMENTAL INDENTURE


 


Dated as of November 5, 2019


 


to


 


the Indenture


 


Dated as of November 5, 2019


 


4.25% Fixed-to-Floating Rate Subordinated
Notes due 2029


 


WILMINGTON TRUST, NATIONAL ASSOCIATION


 


as Trustee


 






     


     


    







 


TABLE OF CONTENTS


 


Page


 




	Article
    1. SCOPE OF FIRST SUPPLEMENTAL INDENTURE	 	2
	 	 	 
	Section 1.1.     Scope	 	2
	 	 	 
	Article
    2. DEFINITIONS	 	2
	 	 	 
	Section 2.1.     Definitions
    and Other Provisions of General Application	 	2
	 	 	 
	Article
    3. FORM AND TERMS OF THE NOTES	 	9
	 	 	 
	Section 3.1.     Form
    and Dating	 	9
	Section 3.2.     Terms
    of the Notes	 	9
	 	 	 
	Article
    4. MISCELLANEOUS	 	15
	 	 	 
	Section 4.1.     Trust
    Indenture Act	 	15
	Section 4.2.     Communications
    by Holders with Other Holders	 	16
	Section 4.3.     Governing
    Law	 	16
	Section 4.4.     Duplicate
    Originals	 	16
	Section 4.5.     Severability	 	16
	Section 4.6.     Ratification	 	16
	Section 4.7.     Effectiveness	 	16
	Section 4.8.     Successors	 	16
	Section 4.9.     Indenture
    and Notes Solely Corporate Obligations	 	16
	Section 4.10.   Trustee’s
    Disclaimer	 	16
	Section 4.11.   U.S.A.
    PATRIOT Act	 	17



 






     


     


    

 


FIRST SUPPLEMENTAL
INDENTURE


 


THIS FIRST SUPPLEMENTAL
INDENTURE (“First Supplemental Indenture”), dated as of November 5, 2019 is between Sandy Spring Bancorp, Inc.,
a Maryland corporation (the “Company”), and Wilmington Trust, National Association, a national banking association
organized under the laws of the United States, not in its individual capacity but solely as trustee (“Trustee”).


 


RECITALS


 


WHEREAS, the
Company and the Trustee have executed and delivered a Subordinated Indenture, dated as of November 5, 2019 (the “Base
Indenture” and as supplemented by this First Supplemental Indenture and further supplemented from time to time, the
 “Indenture”), to provide for the issuance from time to time by the Company of its unsecured subordinated indebtedness
to be issued in one or more series as provided in the Indenture;


 


WHEREAS, the
issuance and sale of One Hundred and Seventy Five Million Dollars ($175,000,000) aggregate principal amount of a new series of
Securities of the Company designated as its 4.25% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”)
have been authorized by resolutions adopted by the Board of Directors of the Company and the Special Pricing Committee of the
Board of Directors of the Company;


 


WHEREAS, the
Company desires to issue and sell One Hundred and Seventy Five Million Dollars ($175,000,000) aggregate principal amount of the
Notes as of the date hereof;


 


WHEREAS, the
Company desires to establish the terms of the Notes;


 


WHEREAS, the
Company acknowledges that all things necessary to make this First Supplemental Indenture a legal, binding and enforceable instrument,
and to make the Notes, when executed by the Company and authenticated and delivered by the Trustee, the legal, binding and enforceable
obligations of the Company, in each case, in accordance with its terms and the terms of the Base Indenture have been done;


 


WHEREAS, the
Company has complied with all conditions precedent provided for in the Base Indenture relating to this First Supplemental Indenture;
and


 


WHEREAS, the Company has requested
that the Trustee execute and deliver this First Supplemental Indenture.


 


NOW, THEREFORE, for and in consideration
of the premises stated herein and the purchase of the Notes by the Holders thereof, the Company and the Trustee covenant and agree,
for the equal and proportionate benefit of the Holders of the Notes, as follows:


 






     


     


    

 


Article
1.

SCOPE OF FIRST SUPPLEMENTAL INDENTURE


 


Section
1.1.       Scope.


 


This First Supplemental
Indenture constitutes a supplement to the Base Indenture and an integral part of the Indenture and shall be read together with
the Base Indenture as though all the provisions thereof are contained in one instrument. Except as expressly amended by this First
Supplemental Indenture, the terms and provisions of the Base Indenture shall remain in full force and effect. Notwithstanding
the foregoing, this First Supplemental Indenture shall only apply to the Notes.


 


Article
2.

DEFINITIONS


 


Section
2.1.      Definitions
and Other Provisions of General Application. For all purposes of this First Supplemental Indenture unless otherwise specified
herein:


 


(a)       all
terms used in this First Supplemental Indenture which are not otherwise defined herein shall have the meanings they are given
in the Base Indenture, provided that, if the definition of a capitalized term defined in this First Supplemental Indenture conflicts
with the definition of that capitalized term in the Base Indenture, the definition of that capitalized term in this First Supplemental
Indenture shall control for purposes of this First Supplemental Indenture and the Notes and (in respect of the Notes but not any
other series of Securities) the Base Indenture;


 


(b)       the
provisions of general application stated in Article I of the Base Indenture shall apply to this First Supplemental Indenture,
except that the words “herein,” “hereof,” “hereto” and “hereunder” and other words
of similar import refer to this First Supplemental Indenture as a whole and not to the Base Indenture or any particular Article,
Section or other subdivision of the Base Indenture or this First Supplemental Indenture;


 


(c)        Section
1.1 of the Base Indenture is amended and supplemented, solely with respect to the Notes, by inserting the following additional
defined terms in their appropriate alphabetical positions:


 


“Administrative
or Judicial Action” has the meaning provided in the definition of “Tax Event.”


 


“Benchmark”
means, initially, Three-Month LIBOR; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date
have occurred with respect to Three-Month LIBOR or the then-current Benchmark, then “Benchmark” means the applicable
Benchmark Replacement.


 


“Benchmark
Agent” means the Company or the Company’s designee appointed by the Company in its sole discretion, prior to the
commencement of the Floating Rate Period (which may include the Company’s Affiliates) to perform any particular obligation
to be performed in connection with the transition to a Benchmark Replacement in its sole discretion.


 






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“Benchmark
Replacement” means the Interpolated Benchmark with respect to the then-current Benchmark; provided that if the Benchmark
Agent cannot determine the Interpolated Benchmark as of the Benchmark Replacement Date, then “Benchmark Replacement”
means the first alternative set forth in the order below that can be determined by the Benchmark Agent as of the Benchmark Replacement
Date:


 


		(1)	the sum of (a) Term SOFR and (b)
                                         the Benchmark Replacement Adjustment;



 


		(2)	the sum of (a) Compounded SOFR
                                         and (b) the Benchmark Replacement Adjustment;



 


		(3)	the sum of: (a) the alternate rate
                                         that has been selected or recommended by the Relevant Governmental Body as the replacement
                                         for the then-current Benchmark for the applicable Corresponding Tenor and (b) the Benchmark
                                         Replacement Adjustment;



 


		(4)	the sum of: (a) the ISDA Fallback
                                         Rate and (b) the Benchmark Replacement Adjustment; and



 


		(5)	the sum of: (a) the alternate rate
                                         that has been selected by the Company or the Company’s designee as the replacement
                                         for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration
                                         to any industry-accepted rate as a replacement for the then-current Benchmark for U.S.
                                         dollar-denominated floating rate securities at such time and (b) the Benchmark Replacement
                                         Adjustment.



 


“Benchmark
Replacement Adjustment” means the first alternative set forth in the order below that can be determined by the Benchmark
Agent as of the Benchmark Replacement Date:


 


		(1)	the spread adjustment, or method
                                         for calculating or determining such spread adjustment (which may be a positive or negative
                                         value or zero), that has been selected or recommended by the Relevant Governmental Body
                                         for the applicable Unadjusted Benchmark Replacement;



 


		(2)	if the applicable Unadjusted Benchmark
                                         Replacement is equivalent to the ISDA Fallback Rate, then the ISDA Fallback Adjustment;
                                         and



 


		(3)	the spread adjustment (which may
                                         be a positive or negative value or zero) that has been selected by the Benchmark Agent
                                         giving due consideration to any industry-accepted spread adjustment, or method for calculating
                                         or determining such spread adjustment, for the replacement of the then-current Benchmark
                                         with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated floating
                                         rate securities at such time.



 


“Benchmark
Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational
changes (including changes to the definition of “interest period”, timing and frequency of determining rates with
respect to each interest period and making payments of interest, rounding of amounts or tenors, and other administrative matters)
that the Benchmark Agent decides may be appropriate to reflect the adoption of such Benchmark Replacement in a manner substantially
consistent with market practice (or, if the Benchmark Agent decides that adoption of any portion of such market practice is not
administratively feasible or if the Benchmark Agent determines that no market practice for use of the Benchmark Replacement exists,
in such other manner as the Benchmark Agent determines is reasonably necessary).


 






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“Benchmark
Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:


 


		(1)	in the case of clause (1) or (2)
                                         of the definition of “Benchmark Transition Event,” the later of (a) the date
                                         of the public statement or publication of information referenced therein and (b) the
                                         date on which the administrator of the Benchmark permanently or indefinitely ceases to
                                         provide the Benchmark; or



 


		(2)	in the case of clause (3) of the
                                         definition of “Benchmark Transition Event,” the date of the public statement
                                         or publication of information referenced therein.



 


For the avoidance
of doubt, if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference
Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time
for such determination.


 


“Benchmark
Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:


 


		(1)	a public statement or publication
                                         of information by or on behalf of the administrator of the Benchmark announcing that
                                         such administrator has ceased or will cease to provide the Benchmark, permanently or
                                         indefinitely, provided that, at the time of such statement or publication, there is no
                                         successor administrator that will continue to provide the Benchmark;



 


		(2)	a public statement or publication
                                         of information by the regulatory supervisor for the administrator of the Benchmark, the
                                         central bank for the currency of the Benchmark, an insolvency official with jurisdiction
                                         over the administrator for the Benchmark, a resolution authority with jurisdiction over
                                         the administrator for the Benchmark or a court or an entity with similar insolvency or
                                         resolution authority over the administrator for the Benchmark, which states that the
                                         administrator of the Benchmark has ceased or will cease to provide the Benchmark permanently
                                         or indefinitely, provided that, at the time of such statement or publication, there is
                                         no successor administrator that will continue to provide the Benchmark; or



 


		(3)	a public statement or publication
                                         of information by the regulatory supervisor for the administrator of the Benchmark announcing
                                         that the Benchmark is no longer representative.



 






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“Calculation
Agent” means the Company or the agent appointed by the Company, in its sole discretion, prior to the commencement of
the Floating Rate Period (which may include the Company or any of its Affiliates) to act in accordance with Section 3.2(e)(iv),
and which appointment may be restricted solely to determining Three-Month LIBOR prior to a Benchmark Transition Event or be restricted
solely to determining a particular Benchmark Replacement.


 


“Compounded
SOFR” means the compounded average of SOFRs for the applicable Corresponding Tenor, with the rate, or methodology for
this rate, and conventions for this rate (which will be compounded in arrears with a look back and/or suspension period as a mechanism
to determine the interest amount payable prior to the end of each interest period) being established by the Benchmark Agent in
accordance with:


 


		(1)	the rate, or methodology for this
                                         rate, and conventions for this rate selected or recommended by the Relevant Governmental
                                         Body for determining compounded SOFR; provided that:



 


		(2)	if, and to the extent that, the
                                         Benchmark Agent determines that Compounded SOFR cannot be determined in accordance with
                                         clause (1) above, then the rate, or methodology for this rate, and conventions for this
                                         rate that have been selected by the Benchmark Agent designee giving due consideration
                                         to any industry-accepted market practice for U.S. dollar-denominated floating rate securities
                                         at such time.



 


For the avoidance
of doubt, the calculation of Compounded SOFR shall exclude the Benchmark Replacement Adjustment and the spread of 2.62% per annum.


 


“Corresponding
Tenor” with respect to a Benchmark Replacement means a tenor (including overnight) having approximately the same length
(disregarding Business Day adjustment) as the applicable tenor for the then-current Benchmark.


 


“Designated
LIBOR Page” means the display on Bloomberg Page BBAM1 (or any successor or substitute page of such service, or any successor
to such service selected by the Company) for the purpose of displaying the London interbank rates for U.S. dollars.


 


“Federal
Reserve” has the meaning provided in the definition of “Tier 2 Capital Event.”


 


“Federal
Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org,
or any successor source.


 


“Fixed Rate
Interest Payment Date” has the meaning provided in Section 3.2(e)(i).


 


“Fixed Rate
Period” has the meaning provided in Section 3.2(e)(i).


 


“Fixed Rate
Regular Record Date” has the meaning provided in Section 3.2(e)(i).


 


“Floating
Rate Interest Payment Date” has the meaning provided in Section 3.2(e)(ii).


 


“Floating
Rate Period” has the meaning provided in Section 3.2(e)(ii).


 


“Floating
Rate Regular Record Date” has the meaning provided in Section 3.2(e)(ii).


 






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“Interest
Payment Date” has the meaning provided in Section 3.2(e)(ii).


 


“interest
period” means the period from and including the immediately preceding Interest Payment Date in respect of which interest
has been paid or duly provided for or, if no interest has been paid or duly provided for, from and including the Issue Date to,
but excluding, the applicable Interest Payment Date or the Maturity Date or date of earlier redemption, if applicable.


 


“Interpolated
Benchmark” with respect to the Benchmark means the rate determined for the Corresponding Tenor by interpolating on a
linear basis between: (1) the Benchmark for the longest period (for which the Benchmark is available) that is shorter than the
Corresponding Tenor and (2) the Benchmark for the shortest period (for which the Benchmark is available) that is longer than the
Corresponding Tenor.


 


“ISDA Definitions”
means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto,
as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from
time to time.


 


“ISDA Fallback
Adjustment” means the spread adjustment (which may be a positive or negative value or zero) that would apply for derivatives
transactions referencing the ISDA Definitions to be determined upon the occurrence of an index cessation event with respect to
the Benchmark for the applicable tenor.


 


“ISDA Fallback
Rate” means the rate that would apply for derivatives transactions referencing the ISDA Definitions to be effective
upon the occurrence of an index cessation date with respect to the Benchmark for the applicable tenor excluding the applicable
ISDA Fallback Adjustment.


 


“Issue Date”
means November 5, 2019.


 


“LIBOR Determination
Date” means the second London Banking Day immediately preceding the first day of each applicable interest period commencing
on the first Floating Rate Interest Payment Date.


 


“London Banking
Day” means any day on which commercial banks are open for business (including for dealings in U.S. dollars) in London.


 


“Material
Subsidiary” means Sandy Spring Bank or any successor thereof or any of the Company’s subsidiaries that is a depository
institution and that has consolidated assets equal to 80% or more of the Company’s consolidated assets.


 


“Maturity
Date” has the meaning provided in Section 3.2(d).


 


“Reference
Time” with respect to any determination of the Benchmark means (1) if the Benchmark is Three-Month LIBOR, 11:00 a.m.
(London time) on the relevant LIBOR Determination Date, and (2) if the Benchmark is not Three-Month LIBOR, the time determined
by the Benchmark Agent in accordance with the Benchmark Replacement Conforming Changes.


 






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“Relevant
Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially
endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.


 


“SOFR”
with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York,
as the administrator of the Benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.


 


“Tax Event”
means the receipt by the Company of an opinion of independent tax counsel to the effect that as a result of (a) an amendment to
or change (including any announced prospective amendment or change) in any law or treaty, or any regulation thereunder, of the
United States or any of its political subdivisions or taxing authorities; (b) a judicial decision, administrative action, official
administrative pronouncement, ruling, regulatory procedure, regulation, notice or announcement, including any notice or announcement
of intent to adopt or promulgate any ruling, regulatory procedure or regulation (any of the foregoing, an “Administrative
or Judicial Action”); (c) an amendment to or change in any official position with respect to, or any interpretation
of, an Administrative or Judicial Action or a law or regulation of the United States that differs from the previously generally
accepted position or interpretation, or (d) a threatened challenge asserted in writing in connection with an audit of the Company’s
federal income tax returns or positions or a similar audit of any of the Company’s subsidiaries or a publicly known threatened
challenge asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially
similar to the Notes, in each case, which change or amendment or challenge becomes effective or which pronouncement, decision
or challenge is announced on or after the original issue date of the Notes, there is more than an insubstantial risk that interest
payable by the Company on the Notes is not, or, within 90 calendar days of the date of such opinion, will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes.


 


“Term SOFR”
means the forward-looking term rate for the applicable Corresponding Tenor based on SOFR that has been selected or recommended
by the Relevant Governmental Body.


 


“Three-Month
LIBOR” means, for any interest period during the Floating Rate Period, as follows:


 


		(1)	The offered rate for deposits in
                                         U.S. dollars having an index maturity of three months that appears on the Designated
                                         LIBOR Page as of 11:00 a.m., London time, on the LIBOR Determination Date related to
                                         such interest period. If no such rate so appears, Three-Month LIBOR on such LIBOR Determination
                                         Date will be determined in accordance with provision described in clause (2) below.



 






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		(2)	With respect to a LIBOR Determination
                                         Date on which no rate is displayed on the Designated LIBOR Page as specified in clause
                                         (1) above, if a Benchmark Transition Event has not occurred, the Calculation Agent shall
                                         request the principal London offices of each of four major reference banks in the London
                                         interbank market, as selected by the Company, and whose name and contact information
                                         shall be provided by the Company in writing to the Calculation Agent, to provide the
                                         Calculation Agent with its offered quotation for deposits in U.S. dollars having an index
                                         maturity of three months, commencing on the first day of the related interest period,
                                         to prime banks in the London interbank market as of 11:00 a.m., London time, on such
                                         LIBOR Determination Date and in a principal amount that is representative for a single
                                         transaction in U.S. dollars in such market at such time. If at least two such quotations
                                         are so provided, then Three-Month LIBOR on such LIBOR Determination Date will be the
                                         arithmetic mean calculated by the Calculation Agent of such quotations. If fewer than
                                         two such quotations are so provided, then Three-Month LIBOR on such LIBOR Determination
                                         Date will be the arithmetic mean calculated by the Calculation Agent of the rates quoted
                                         at approximately 11:00 a.m., in New York City, on such LIBOR Determination Date by three
                                         major banks in New York City selected by the Company, and whose name and contact information
                                         shall be provided by the Company in writing to the Calculation Agent, for loans in U.S.
                                         dollars to leading European banks, having an index maturity of three months and in a
                                         principal amount that is representative for a single transaction in U.S. dollars in such
                                         market at such time; provided, however, that if the banks so selected by the Company
                                         are not quoting as mentioned in this sentence, but a Benchmark Transition Event has not
                                         occurred, Three-Month LIBOR for the upcoming interest period to which the LIBOR Determination
                                         Date relates shall be Three-Month LIBOR as in effect in the current interest period or,
                                         in the case of the first interest period in the Floating Rate Period, the most recent
                                         Three-Month LIBOR that can be determined by reference to the Designated LIBOR Page.



 


The establishment
of Three-Month LIBOR for each interest period in the Floating Rate Period by the Calculation Agent shall (in the absence of manifest
error) be final and binding. The Calculation Agent will provide the Company and the Trustee with the interest rate in effect on
the Notes for the current interest period and, if it has been determined, the interest rate to be in effect for the next interest
period. All percentages used in or resulting from any calculation of Three-Month LIBOR shall be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with 0.000005% rounded up to 0.00001%.


 


“Tier 2 Capital
Event” means the Company’s reasonable determination that, as a result of (a) any amendment to, or change in, the
laws, rules, regulations, policies or guidelines of the United States (including, for the avoidance of doubt, any agency or instrumentality
of the United States, including the Federal Reserve and other federal bank regulatory agencies) or any political subdivision of
or in the United States that is enacted or becomes effective after the initial issuance of the Notes, (b) any proposed change
in those laws, rules, regulations, policies or guidelines that is announced or becomes effective after the initial issuance of
the Notes, or (c) any official administrative decision or judicial decision or administrative action or other official pronouncement
interpreting or applying those laws, rules, regulations, policies or guidelines or policies with respect thereto that is announced
after the original issue date of the Notes, there is more than an insubstantial risk that the Company will not be entitled to
treat the Notes then outstanding as “Tier 2 Capital” (or its equivalent) for purposes of the capital adequacy rules
or regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) (or, as and
if applicable, the capital adequacy rules or regulations of any successor appropriate federal banking agency) as then in effect
and applicable, for so long as any Notes are outstanding.


 






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“Unadjusted
Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.


 


Article
3.

FORM AND TERMS OF THE NOTES


 


Section
3.1.       Form
and Dating.


 


(a)        The
Notes shall be substantially in the form of Exhibit A attached hereto. The Notes shall be executed on behalf of the Company
by its President Chief Executive Officer, its Chief Financial Officer, its General Counsel, one of its Executive Vice Presidents,
one of its Senior Vice Presidents, one of its Vice Presidents or its Treasurer. The Notes may have a legend or legends or endorsements
as may be required to comply with any law or with any rules of any securities exchange or usage. The Notes shall be dated the
date of their authentication.


 


(b)       The
terms contained in the Notes shall constitute, and are hereby expressly made, a part of the Indenture as supplemented by this
First Supplemental Indenture, and the Company and the Trustee, by their execution and delivery of this First Supplemental Indenture,
expressly agree to such terms and provisions and to be bound thereby.


 


Section
3.2.       Terms
of the Notes. The following terms relating to the Notes are hereby established:


 


(a)         Title.
The Notes shall constitute a series of Securities having the title “4.25% Fixed-to-Floating Rate Subordinated Notes due
2029” and the CUSIP number 800363AB9.


 


(b)       Principal
Amount. The aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture, as amended
hereby, shall be One Hundred and Seventy Five Million Dollars ($175,000,000) on the Issue Date. Provided that no Event of Default
has occurred and is continuing with respect to the Notes, the Company may, from time to time, without notice to or the consent
of the holders of the Notes, create and issue further notes ranking equally with the Notes and with identical terms in all respects
(or in all respects except for the offering price, the payment of interest accruing prior to the issue date of such further notes
or except for the first payment of interest following the issue date of such further notes) in order that such further notes may
be consolidated and form a single series with the Notes and have the same terms as to status, redemption or otherwise as the Notes;
provided however, that a separate CUSIP number will be issued for any such additional notes unless such additional notes are fungible
with the Notes for U.S. federal income tax purposes, subject to the procedures of the DTC.


 


(c)        Person
to Whom Interest Is Payable. Interest payable, and punctually paid or duly provided for, on any Interest Payment Date will
be paid to the Person in whose name the Notes are registered for such interest at the close of business on the fifteenth calendar
day immediately preceding the applicable Interest Payment Date, whether or not such day is a Business Day. Any such interest which
is payable, but not so punctually paid or duly provided for on any Interest Payment Date, shall cease to be payable to the Holder
on such relevant record date by virtue of having been a Holder on such date, and such defaulted interest may be paid by the Company
to the Person in whose name the Notes are registered at the close of business on a special record date for the payment of such
defaulted interest to be fixed by the Company, notice whereof shall be given to Holders of Notes of this series not less than
10 calendar days prior to such special record date, or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed and upon such notice as may be required by such exchange
and in compliance with the Base Indenture. However, interest that is paid on the Maturity Date will be paid to the person to whom
the principal will be payable.


 






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(d)           Maturity
Date. The entire outstanding Principal of the Notes shall be payable on November 15, 2029 (the “Maturity Date”).


 


(e)           Interest.


 


(i)           From
and including the Issue Date to, but excluding November 15, 2024 (the “Fixed Rate Period”) or earlier Redemption
Date, the Notes will bear interest at a fixed rate of 4.25% per annum. Interest accrued on the Notes during the Fixed Rate Period
will be payable semi-annually in arrears on May 15 and November 15 of each year, commencing on May 15, 2020 (each such date a
 “Fixed Rate Interest Payment Date”) through but excluding November 15, 2024 or earlier Redemption Date. The
interest payable during the Fixed Rate Period will be paid to each holder in whose name a Note is registered at the close of business
on the fifteenth calendar day (whether or not a Business Day) immediately preceding the applicable Fixed Rate Interest Payment
Date (each such date, a “Fixed Rate Regular Record Date”).


 


(ii)           From
and including November 15, 2024 to, but excluding, the Maturity Date or Redemption Date (the “Floating Rate Period”),
the Notes will bear a floating interest rate. The floating interest rate will be reset quarterly, and the interest rate for any
Floating Rate Period shall be equal to the then-current Benchmark plus 2.62% for each quarterly interest period during the Floating
Rate Period. During the Floating Rate Period, interest on the Notes will be payable quarterly in arrears on February 15, May 15,
August 15 and November 15 of each year commencing on November 15, 2024 to the Maturity Date or Redemption Date (each such date,
a “Floating Rate Interest Payment Date”, together with a Fixed Rate Interest Payment Date, an “Interest
Payment Date”). The interest payable during the Floating Rate Period will be paid to each holder in whose name a Note
is registered at the close of business on the fifteenth calendar day (whether or not a Business Day) immediately preceding the
applicable Floating Rate Interest Payment Date (each such date, a “Floating Rate Regular Record Date”). Notwithstanding
the foregoing, if the Benchmark is less than zero, then the Benchmark shall be deemed to be zero.


 






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(iii)          The
amount of interest payable on any Fixed Rate Interest Payment Date during the Fixed Rate Period will be computed on the basis
of a 360-day year consisting of twelve 30-day months to, but excluding, November 15, 2024, and, the amount of interest payable
on any Floating Rate Interest Payment Date during the Floating Rate Period will be computed on the basis of a 360-day year on
the basis of the actual number of days elapsed. In the event that any scheduled Interest Payment Date or the Maturity Date for
the Notes falls on a day that is not a Business Day, then payment of interest payable on such Interest Payment Date or of principal
and interest payable on the Maturity Date will be paid on the next succeeding day which is a Business Day (any payment made on
such date will be treated as being made on the date that the payment was first due and no interest on such payment will accrue
for the period from and after such scheduled Interest Payment Date); provided, that in the event that any scheduled Floating Rate
Interest Payment Date falls on a day that is not a Business Day and the next succeeding Business Day falls in the next succeeding
calendar month, such Floating Rate Interest Payment Date will be accelerated to the immediately preceding Business Day, and, in
each such case, the amounts payable on such Business Day will include interest accrued to but excluding such Business Day. Dollar
amounts resulting from interest calculations will be rounded to the nearest cent, with one-half cent being rounded upward.


 


(iv)          The
Company agrees that from the commencement of the Floating Rate Period for so long as any of the Notes remain outstanding there
will at all times be a Calculation Agent appointed to calculate the Benchmark in respect of each Floating Rate Period. The calculation
of the Benchmark for each applicable Floating Rate Period by the Calculation Agent will (in the absence of manifest error) be
final and binding. Any Calculation Agent or Benchmark Agent appointed by the Company shall have all the rights, protections, immunities
and indemnities afforded to the Trustee under the Base Indenture and hereunder. Any Calculation Agent or Benchmark Agent may be
removed by the Company at any time. If the Calculation Agent or Benchmark Agent is unable or unwilling to act as Calculation Agent
or Benchmark Agent or is removed by the Company, the Company will promptly appoint a replacement Calculation Agent or Benchmark
Agent, as applicable, which may be the Company or an Affiliate of the Company. If a successor Calculation Agent or Benchmark Agent
has not been appointed by the Company and accepted such position within 30 calendar days after the giving of notice of resignation
by the Calculation Agent or Benchmark Agent, as applicable, the Company shall be the Calculation Agent or Benchmark Agent automatically,
and such resignation shall be effective; provided however that nothing herein shall require a Calculation Agent to determine a
Benchmark Replacement if such agent’s appointment was solely for the determination of Three-Month LIBOR. The Calculation
Agent’s calculation of the amount of any interest payable after the first LIBOR Determination Date will be maintained on
file at the Calculation Agent’s principal offices.


 


(v)           Effect
of Benchmark Transition Event.


 


		1)	If the Benchmark Agent determines
                                         that a Benchmark Transition Event and its related Benchmark Replacement Date have occurred
                                         on or prior to the Reference Time in respect of any determination of the Benchmark on
                                         any date, then the Benchmark Replacement will replace the then-current Benchmark for
                                         all purposes relating to the Notes during the Floating Rate Period in respect of such
                                         determination on such date and all determinations on all subsequent dates.



 






    11


     


    

 


		2)	Notwithstanding anything set forth
                                         in Section 3.2(e)(ii) above, if the Benchmark Agent determines on or prior to
                                         the relevant LIBOR Determination Date that a Benchmark Transition Event and its related
                                         Benchmark Replacement Date have occurred with respect to Three-Month LIBOR, then the
                                         provisions set forth in this Section 3.2(e)(v) will thereafter apply to all determinations
                                         of the rate of interest payable on the Notes during the Floating Rate Period. After a
                                         Benchmark Transition Event and its related Benchmark Replacement Date have occurred,
                                         the amount of interest that will be payable for each interest period on the Notes will
                                         be an annual rate equal to the sum of the Benchmark Replacement plus 2.62%.



 


		3)	The Company and the Benchmark Agent
                                         are expressly authorized to make certain determinations, decisions and elections under
                                         the terms of the Notes, including with respect to the use of any Benchmark Replacement
                                         for the Floating Rate Period and under this Section 3.2(e)(v). Any determination,
                                         decision or election that may be made by the Company, the or by the Benchmark Agent under
                                         the terms of the Notes, including any determination with respect to tenor, rate or adjustment
                                         or of the occurrence or non-occurrence of an event, circumstance or date and any decision
                                         to take or refrain from taking any action or selection (A) will be conclusive and binding
                                         on the holders of the Notes, the Calculation Agent and the Trustee absent manifest error,
                                         (B) if made by the Company, will be made in the Company’s sole discretion, (C)
                                         if made by a Benchmark Agent appointed by the Company, will be after consultation with
                                         the Company, and the Benchmark Agent will not make any such determination, decision or
                                         election to which the Company reasonably objects, (D) notwithstanding anything to the
                                         contrary herein or in the Base Indenture, shall become effective without consent from
                                         the Holders of the Notes or the Trustee and (E) shall be provided to the Trustee and
                                         the Calculation Agent in writing. If the Benchmark Agent fails to make any determination,
                                         decision or election that it is required to make under the terms of the Notes, then the
                                         Company or its designee will make such determination, decision or election on the same
                                         basis as described above.



 






    12


     


    

 


(vi)          For
the avoidance of doubt, if at any time there is no Calculation Agent or Benchmark Agent appointed by the Company, then the Company
shall be the Calculation Agent or the Benchmark Agent, as applicable. The Company may appoint any of its Affiliates to be the
Calculation Agent or the Benchmark Agent.


 


(vii)      The
Company shall notify the Trustee and any Calculation Agent in writing (i) upon the occurrence of the Benchmark Transition Event
or the Benchmark Replacement Date, and (ii) of any Benchmark Replacements, Benchmark Replacement Conforming Changes and other
items affecting the interest rate on the Floating Rate Notes after a Benchmark Transition Event.


 


(viii)       The
Trustee (including in its capacity as Paying Agent), shall have no (i) responsibility or liability for the (A) selection of an
alternative reference rate to Three-Month LIBOR (including, without limitation, whether the conditions for the designation of
such rate have been satisfied or whether such rate is a Benchmark Replacement or an Unadjusted Benchmark Replacement), (B) determination
or calculation of a Benchmark Replacement, or (C) determination of whether a Benchmark Transition Event or Benchmark Replacement
Date has occurred, and in each such case under clauses (A) through (C) above shall be entitled to conclusively rely upon the selection,
determination, and/or calculation thereof as provided by the Company or its Benchmark Agent or Calculation Agent, as applicable,
and (ii) liability for any failure or delay in performing its duties hereunder as a result of the unavailability of a Benchmark
rate as described in the definition thereof, including as a result of the Company’s or Benchmark Agent’s failure to
select a Benchmark Replacement or the Calculation Agent’s failure to calculate a Benchmark. The Trustee shall be entitled
to rely conclusively on all notices from the Company regarding any Benchmark Replacement, including in regards to a Benchmark
Transition Event, Benchmark Replacement Date, and Benchmark Replacement Conforming Changes.


 


(f)         
Place of Payment of Principal and Interest. So long as the Notes shall be issued in global form, the Company shall
make, or cause the Paying Agent to make, all payments of principal and interest on the Notes by wire transfer in immediately available
funds to DTC or its nominee, in accordance with applicable procedures of DTC. If the Notes are not in global form, the Company,
may, at its option, make, or cause the Paying Agent to make, payments of principal and interest on the Notes by check mailed to
the address of the Person specified for payment in accordance with Section 3.2(e)(i) and (e)(ii) above. A global
security with respect to the Notes shall be exchangeable for physical securities of such series only if:


 


		•	DTC is at any time unwilling
                                         or unable or ineligible to continue as a depository or ceases to be a clearing agency
                                         registered under the Exchange Act and a successor depository is not appointed by the
                                         Company within 90 calendar days of the date the Company is so notified in writing;



 






    13


     


    

 


		•	The Company executes and delivers
                                         to the Trustee a Company Order to the effect that such global securities shall be so
                                         exchangeable (and the Trustee consents thereto); or



 


		•	An Event of Default has occurred
                                         and is continuing with respect to the global securities and a Holder requests such exchange.



 


(g)       
Redemption. The Notes shall be redeemable, in each case, in whole or in part from time to time, at the option of
the Company prior to the Maturity Date beginning with the Interest Payment Date on November 15, 2024, but not prior thereto (except
upon the occurrence of certain events specified below), and on any Interest Payment Date thereafter subject to obtaining the prior
approval of the Federal Reserve to the extent such approval is then required under the rules of the Federal Reserve. The Notes
may not otherwise be redeemed prior to the Maturity Date, except that the Company may, at its option, redeem the Notes before
the Maturity Date in whole, but not in part, subject to obtaining the prior approval of the Federal Reserve to the extent such
approval is then required under the rules of the Federal Reserve, upon the occurrence of a Tier 2 Capital Event or a Tax Event,
or if the Company is required to register as an investment company pursuant to the Investment Company Act of 1940, as amended
(15 U.S.C. 80a-1 et seq.). Any such redemption will be at a Redemption Price equal to 100% of the principal amount of the Notes
to be redeemed, plus accrued and unpaid interest to, but excluding, the Redemption Date fixed by the Company. To the extent not
inconsistent with the provisions of this Section 3.2(g), the provisions of Article III of the Base Indenture shall apply
to any redemption of the Notes pursuant to this Article 3. Any partial redemption will be made in accordance with DTC’s
applicable procedures. If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state
that it is a partial redemption and the portion of the principal amount thereof to be redeemed, and (x) a replacement Note in
principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of
the original Note, or (y) in the case of a Note in global form, an appropriate notation made to the “Schedule of Increases
or Decreases in Global Note” attached thereto. The Notes are not subject to redemption or prepayment at the option of the
Holders. A notice of redemption may be conditioned on one or more conditions precedent, and the redemption date may be delayed
until such time as any or all of such conditions have been satisfied or revoked if the Company determines such conditions will
not be satisfied.


 


(h)         
Sinking Fund. There shall be no sinking fund for the Notes.


 


(i)           Conversion
and Exchange. The Notes are not convertible into, or exchangeable for, equity securities, other securities or assets of the
Company or its subsidiaries.


 


(j)           Denomination.
The Notes and any beneficial interest in the Notes shall be in minimum denominations of $2,000 and integral multiples of $1,000
in excess thereof.


 


(k)          Currency
of the Notes. The Notes shall be denominated, and payment of principal and interest of the Notes shall be payable in, the
currency of the United States of America.


 






    14


     


    

 



 


(l)          
Registered Form. The Notes shall be issuable as global registered securities, and DTC (or any successor thereto
or successor depository appointed by the Company within 90 calendar days of the termination of services of DTC) shall be the depository
for the Notes. The Notes shall be exchangeable as and to the extent provided in Section 2.7 of the Base Indenture.


 


(m)         
Ranking. The Notes shall rank junior to and shall be subordinated to all Senior Indebtedness of the Company, whether
existing as of the date of this First Supplemental Indenture, or hereafter issued or incurred. Subject to the terms of the Base
Indenture, if the Trustee or any holder of any of the Notes receives any payment or distribution of the Company’s assets
in contravention of the subordination provisions applicable to the Notes before all Senior Indebtedness is paid in full in cash,
property or securities, including by way of set-off or any such payment or distribution that may be payable or deliverable by
reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Notes, then such payment
or distribution will be held in trust for the benefit of holders of Senior Indebtedness or their representatives to the extent
necessary to make payment in full in cash or payment satisfactory to the holders of Senior Indebtedness of all unpaid Senior Indebtedness.


 


(n)          
Acceleration of Maturity. Section 6.2 of the Base Indenture shall apply to the Notes, except that the first paragraph
thereof shall be substituted with the following:


 


“If
an Event of Default under clause (e) or (f) of Section 6.1 of the Indenture occurs and is continuing, then the principal amount
of all the Notes, together with premium, if any, and accrued and unpaid interest, if any, thereon, shall automatically, and without
any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable. The Maturity of
the Notes shall not otherwise be accelerated as a result of an Event of Default.”


 


(o)          
No Collateral. The Notes shall not be entitled to the benefit of any security interest in, or collateralization
by, any rights, property or interest of the Company.


 


(p)          
Satisfaction and Discharge and Defeasance. Article VIII of the Base Indenture shall apply to the Notes, provided,
that, defeasance of the Notes shall be subject to obtaining the prior approval of the Federal Reserve if such approval is or will
be required at the defeasance date.


 


(q)          
No Additional Amounts. In the event that any payment on the Notes is subject to withholding of any U.S. federal
income tax or other tax or assessment (as a result of a change in law or otherwise), the Company will not pay additional amounts
with respect to such tax or assessment.


 


(r)          
Additional Terms. Other terms applicable to the Notes are as otherwise provided for in the Base Indenture, as supplemented
by this First Supplemental Indenture.


 


Article
4.

MISCELLANEOUS


 


Section 4.1.          
Trust Indenture Act. This First Supplemental Indenture is subject to the provisions of the Trust Indenture Act that
are required to be part of the Indenture and shall, to the extent applicable, be governed by such provisions. If any provision
of this First Supplemental Indenture limits, qualifies, or conflicts with a provision of the Trust Indenture Act that is required
under such act to be a part of and govern this First Supplemental Indenture, the latter provision shall control.


 



    15


     


    

 





Section 4.2.         
Communications by Holders with Other Holders. Holders of Notes may communicate pursuant to TIA Section 312(b) with
other Holders of Notes with respect to their rights under the Indenture or the Notes. The Company, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).


 


Section 4.3.         GOVERNING
LAW. THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE
OF NEW YORK.


 


Section 4.4.         
Duplicate Originals. The parties may execute any number of counterparts of this First Supplemental Indenture. Each
executed copy shall be an original, but all of them together represent the same agreement.


 


Section 4.5.         
Severability. In case any provision in this First Supplemental Indenture or the Notes shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired
thereby.


 


Section 4.6.         
Ratification. The Base Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects
ratified and confirmed. The Base Indenture and this First Supplemental Indenture shall be read, taken and construed as one and
the same instrument. All provisions included in this First Supplemental Indenture supersede any conflicting provisions included
in the Base Indenture unless not permitted by law. The Trustee accepts the trusts created by the Base Indenture, as supplemented
by this First Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Base Indenture, as supplemented
by this First Supplemental Indenture.


 


Section 4.7.         
Effectiveness. The provisions of this First Supplemental Indenture shall become effective as of the date hereof.


 


Section 4.8.         
Successors. All agreements of the Company in this First Supplemental Indenture shall bind its successors. All agreements
of the Trustee in this First Supplemental Indenture shall bind its successors.


 


Section 4.9.         
Indenture and Notes Solely Corporate Obligations. No recourse will be available for the payment of principal of,
or interest on, any Note, for any claim based thereon, or otherwise in respect thereof, against any of the Trustee, any shareholder,
employee, officer or director, as such, past, present or future, of the Company or of any successor entity; it being expressly
understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the
execution of this First Supplemental Indenture and the issue of the Notes.


 


Section 4.10.  
      Trustee’s Disclaimer. The recitals contained herein shall be taken as the statements
of the Company and the Trustee assumes no responsibility for their correctness. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this First Supplemental Indenture, the Notes, or for or in respect
of the recitals contained herein, all of which recitals are made solely by the Company.


 



    16


     


    

 





Section 4.11.         
U.S.A. PATRIOT Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act
the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, are required
to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens
an account with the Trustee. The parties to this First Supplemental Indenture agree that they will provide the Trustee with such
information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. PATRIOT Act.


 



    17


     


    

 





IN WITNESS WHEREOF,
the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first above written.


 



	 	SANDY SPRING BANCORP, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Daniel
    J. Schrider
	 	Name:	Daniel J. Schrider
	 	Title:	President and Chief Executive Officer




 


	 	WILMINGTON TRUST,

     National Association,
	 	as Trustee
	 	 	 
	 	 	 
	 	By:	/s/ Michael
    H. Wass
	 	Name:	Michael H. Wass
	 	Title:	Vice President













 


[Signature Page
to First Supplemental Indenture]


 









    


     


    




 


EXHIBIT A


 


FORM OF NOTE


 


SANDY SPRING BANCORP, INC.


 


4.25% Fixed-to-Floating Rate Subordinated
Notes Due 2029


 


THE INDEBTEDNESS EVIDENCED BY THIS
SUBORDINATED NOTE IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IS NOT INSURED OR GUARANTEED BY ANY FEDERAL AGENCY OR INSTRUMENTALITY,
INCLUDING, WITHOUT LIMITATION, THE FEDERAL DEPOSIT INSURANCE CORPORATION.


 


THE INDEBTEDNESS EVIDENCED BY THIS
SUBORDINATED NOTE IS SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO THE SENIOR INDEBTEDNESS (AS DEFINED IN THE INDENTURE IDENTIFIED
HEREIN).


 


THIS SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY,
WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.


 


UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE
OR IN PART FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE (I)
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR (II) BY A NOMINEE OF THE DEPOSITARY OR THE DEPOSITARY TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.


 






    


     


    




 


SANDY SPRING BANCORP, INC.


 


4.25% Fixed-to-Floating Rate Subordinated
Notes due 2029


 


	No. 1	CUSIP: 800363AB9
	 	ISIN: US800363AB92


$175,000,000


 


Sandy Spring Bancorp, Inc., a Maryland
corporation (hereinafter called the “Company,” which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or its registered assigns, the principal
sum of One Hundred and Seventy Five Million Dollars ($175,000,000) (or such other amount as set forth in the Schedule of Increases
or Decreases in Global Note attached hereto) on November 15, 2029 (such date is hereinafter referred to as the “Stated
Maturity Date”), unless redeemed prior to such date, and to pay interest thereon (i) from, and including, November 5,
2019, to, but excluding November 15, 2024, unless redeemed prior to such date, at a rate of 4.25% per annum, semi-annually in
arrears on May 15 and November 15 of each year, commencing May 15, 2020 (each such date, a “Fixed Rate Interest Payment
Date,” with the period from, and including, November 5, 2019 to, but excluding, the first Fixed Rate Interest Payment
Date and each successive period from, and including, a Fixed Rate Interest Payment Date to, but excluding, the next Fixed Rate
Interest Payment Date being a “Fixed Rate Period”) and (ii) from, and including, November 15, 2024 to, but
excluding, the Stated Maturity Date, unless redeemed subsequent to November 15, 2024 but prior to the Stated Maturity Date, at
a rate equal to the Benchmark, reset quarterly, plus 262 basis points, payable quarterly in arrears on February 15, May 15, August
15 and November 15 of each year to the Stated Maturity Date or earlier Redemption Date (each, a “Floating Rate Interest
Payment Date,” and together with the Fixed Rate Interest Payment Dates, the “Interest Payment Dates,”
with the period from, and including, November 15, 2024 to, but excluding, the first Floating Rate Interest Payment Date and each
successive period from, and including a Floating Rate Interest Payment Date to, but excluding, the next Floating Rate Interest
Payment Date being a “Floating Rate Period”).


 


Notwithstanding the foregoing, if the
Benchmark is less than zero, then the Benchmark shall be deemed to be zero. The amount of interest payable on any Fixed Rate Interest
Payment Date during the Fixed Rate Period will be computed on the basis of a 360-day year consisting of twelve 30-day months up
to, but excluding November 15, 2024, and, the amount of interest payable on any Floating Rate Interest Payment Date during the
Floating Rate Period will be computed on the basis of a 360-day year and the number of days actually elapsed. In the event that
any scheduled Interest Payment Date for this Note falls on a day that is not a Business Day, then payment of interest payable
on such Interest Payment Date will be paid on the next succeeding day which is a Business Day (any payment made on such date will
be treated as being made on the date that the payment was first due and no interest on such payment will accrue for the period
from and after such scheduled Interest Payment Date); provided, that in the event that any scheduled Floating Rate Interest Payment
Date falls on a day that is not a Business Day and the next succeeding Business Day falls in the next succeeding calendar month,
such Floating Rate Interest Payment Date will be accelerated to the immediately preceding Business Day, and, in each such case,
the amounts payable on such Business Day will include interest accrued to but excluding such Business Day.


 



    A-2


     


    

 





All percentages used in or resulting from
any calculation of the Benchmark shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point,
with 0.000005% rounded up to 0.00001%.


 


Payment of the principal of and interest
on this Note will be made at the office or agency of the Company maintained for that purpose, which shall initially be the Corporate
Trust Office of the Trustee, in such currency of the United States of America as at the time of payment is legal tender for payment
of public and private debts.


 


Reference is hereby made to the further
provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.


 


Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.


 


[Remainder of this
page intentionally left blank. Signature page follows.]


 






    A-3


     


    




 


IN WITNESS WHEREOF,
the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer.


 




	 	SANDY SPRING BANCORP, INC.



	 	 
	 	 
	 	By: 	
	 	Name:	Daniel J. Schrider
	 	Title:	President and Chief Executive Officer




 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


 


This is one of the
Securities of the series designated therein and referred to in the within-mentioned Indenture.


 





	Date of authentication:	 	 




 


 




	 	WILMINGTON TRUST,



NATIONAL ASSOCIATION, as Trustee






	 	 
	 	 
	 	By:	

	 	 	Authorized
    Signatory






 






    A-4


     


    




 


REVERSE OF NOTE


 


SANDY SPRING BANCORP, INC.


 


4.25% Fixed-to-Floating Rate Subordinated
Notes due 2029


 


This Note is one of a duly authorized
issue of Securities of the Company of a series designated as the “4.25% Fixed-to-Floating Rate Subordinated Notes due 2029”
(herein called the “Notes”) initially issued in an aggregate principal amount of One Hundred and Seventy Five
Million Dollars ($175,000,000) on November 5, 2019. Such series of Securities has been established pursuant to, and is one of
an indefinite number of series of subordinated debt securities of the Company issued or issuable under and pursuant to the Subordinated
Indenture, dated as of November 5, 2019 (the “Base Indenture”), between the Company and Wilmington Trust, National
Association, as Trustee (herein called the “Trustee,” which term includes any successor trustee), as supplemented
and amended by the First Supplemental Indenture between the Company and the Trustee, dated as of November 5, 2019 (the “First
Supplemental Indenture,” and the Base Indenture as supplemented and amended by the First Supplemental Indenture, the
 “Indenture”), to which Indenture and any other indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and
the Persons in whose names Notes are registered from time to time and of the terms upon which the Notes are, and are to be, authenticated
and delivered. The terms, conditions and provisions of the Notes are those stated in the Indenture, those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and those set forth
in this Note. To the extent that the terms, conditions and provisions of this Note modify, supplement or are inconsistent with
those of the Indenture, then the terms, conditions and other provisions of this Note shall govern to the extent that such terms,
conditions and other provisions of this Note are not inconsistent with the terms, conditions and provisions made part of the Indenture
by reference to the Trust Indenture Act.


 


All capitalized terms used in this Note
and not defined herein that are defined in the Indenture shall have the meanings assigned to them in the Indenture. To the extent
that any capitalized term used in this Note and defined herein is also defined in the Indenture but conflicts with the definition
provided in the Indenture, the definition of the capitalized term in this Note shall control.


 


The indebtedness of the Company evidenced
by the Notes, including the principal thereof, premium, if any, and interest thereon, is, to the extent and in the manner set
forth in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, whether
outstanding at the date hereof or hereafter incurred, and on the terms and subject to the terms and conditions set forth in the
Indenture, and shall rank pari passu in right of payment with all other Securities and with all other unsecured subordinated
indebtedness of the Company and not by its terms subordinate and subject in right of payment to the prior payment in full of debentures,
notes, bonds or other evidences of indebtedness of types that include the Notes. Each Holder of this Note, by the acceptance hereof,
agrees to and shall be bound by such provisions of the Indenture and authorizes and directs the Trustee on his behalf to take
such actions as may be necessary or appropriate to effectuate the subordination so provided.


 



    A-5


     


    

 





The Notes are intended to be treated as
Tier 2 Capital (or its then-equivalent if the Company were subject to such capital requirement) for purposes of capital adequacy
rules or regulations of the Board of Governors of the Federal Reserve System (or any successor regulatory authority with jurisdiction
over bank holding companies) (the “Federal Reserve”) as applicable to the Company and as the same may be amended
or supplemented from time to time. If an Event of Default with respect to Notes shall occur and be continuing, the principal and
interest owed on the Notes shall only become due and payable in accordance with the terms and conditions set forth in Section
6.2 of the Base Indenture (as modified by Section 3.2(n) of the First Supplemental Indenture). Accordingly, the Holder of this
Note has no right to accelerate the maturity of this Note in the event that the Company fails to pay interest on any of the Notes,
or fails to perform any other obligations under the Notes or in the Indenture that are applicable to the Notes.


 


Any determination, decision or election
that may be made by the Company, or by the Benchmark Agent under the terms of the Notes, including any determination with respect
to tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take
or refrain from taking any action or selection (A) will be conclusive and binding on the holders of the Notes absent manifest
error, (B) if made by the Company, will be made in the Company’s sole discretion, (C) if made by a Benchmark Agent appointed
by the Company, will be after consultation with the Company, and the Benchmark Agent will not make any such determination, decision
or election to which the Company reasonably objects, (D) notwithstanding anything to the contrary in the Indenture, shall become
effective without consent from the Holders of the Notes or the Trustee and (E) shall be provided to the Trustee and the Calculation
Agent in writing.


 


The Company may, at its option, redeem
the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus
accrued and unpaid interest (the “Redemption Price”) to but excluding, the date of redemption (the “Redemption
Date”), on any Interest Payment Date on or after November 15, 2024. The Company may also, at its option, redeem the
Notes before the Stated Maturity Date, in whole, but not in part, at any time, upon the occurrence of a Tier 2 Capital Event,
a Tax Event or if the Company is required to register as an investment company pursuant to the Investment Company Act of 1940,
as amended. Any such redemption will be at a redemption price equal to the Redemption Price to, but excluding, the Redemption
Date fixed by the Company. No redemption of the Notes by the Company prior to the Stated Maturity Date shall be made without the
prior approval of the Federal Reserve if such prior approval is or will be required at the scheduled Redemption Date. The provisions
of Article III of the Base Indenture and Section 3.2(g) of the First Supplemental Indenture shall apply to the redemption of any
Notes by the Company. A notice of redemption may be conditioned on one or more conditions precedent, and the redemption date may
be delayed until such time as any or all of such conditions have been satisfied or revoked if the Company determines such conditions
will not be satisfied.


 


The Notes are not entitled to the benefit
of any sinking fund. The Notes are not convertible into or exchangeable for any other securities or property of the Company or
any Subsidiary of the Company.


 



    A-6


     


    

 





In the event that any payment on the Notes
is subject to withholding of any U.S. federal income tax or other tax or assessment (as a result of a change in law or otherwise),
the Company will not pay additional amounts with respect to such tax or assessment.


 


The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of
the Holders of the Notes at any time by the Company and the Trustee with the consent of the Holders of at least a majority in
principal amount of the outstanding Notes. The Indenture also contains provisions permitting the Holders of specified percentages
in principal amount of the Notes at the time outstanding, on behalf of the Holders of all Notes, to waive certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in
exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.


 


As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Note is registrable in the Register described in Section 2.7 of
the Base Indenture, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place
where the principal of and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar duly executed by the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.


 


The Notes are issuable only in registered
form without coupons in minimum denominations of $2,000 and any integral multiples of $1,000 in excess thereof.


 


The Company and the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes,
whether or not this Note is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.


 


This Security is a global note, represented
by one or more permanent global certificates registered in the name of the nominee of The Depository Trust Company (each a “Global
Note” and collectively, the “Global Notes”). Accordingly, unless and until it is exchanged for individual certificates,
this Note may not be transferred except as a whole by The Depository Trust Company (the “Depositary”) to a nominee
of such Depositary or by a nominee of such Depositary or by the Depositary or any nominee to a successor Depositary or any nominee
of such successor. Ownership of beneficial interests in this Security will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable Depositary or its nominee (with respect to interest of persons
that have accounts with the Depositary (“Participants”)) and the records of Participants (with respect to interests
of persons other than Participants). Beneficial interests in Notes owned by persons that hold through Participants will be evidenced
only by, and transfers of such beneficial interests with such Participants will be effected only through, records maintained by
such Participants. Except as provided below, owners of beneficial interests in this Note will not be entitled to have any individual
certificates and will not be considered the owners or Holders thereof under the Indenture.


 



    A-7


     


    

 





Except in the limited circumstances
set forth in the Indenture, Participants and owners of beneficial interests in the Global Notes will not be entitled to receive
Notes in the form of individual Securities and will not be considered Holders of Notes. None of the Company, the Trustee, the
Registrar, the Paying Agent or any of their respective agents will be liable for any delay by the Depositary, its nominee or any
direct or indirect Participant in identifying the beneficial owners of the related Notes. The Company, the Trustee, the Registrar,
the Paying Agent and each of their respective agents may conclusively rely on, and will be protected in relying on, instructions
from the Depositary or its nominee for all purposes, including with respect to the registration and delivery, and the respective
principal amounts, of the Notes to be issued.


 


Except as provided in Section 3.2 of
the First Supplemental Indenture, beneficial owners of Global Notes will not be entitled to receive physical delivery of Notes
in the form of individual Securities, and no Global Note will be exchangeable except for another Global Note of like denomination
and tenor to be registered in the name of the Depositary or its nominee. Accordingly, each person owning a beneficial interest
in a Global Note must rely on the procedures of the Depositary and, if such person is not a Participant, on the procedures of
the Participant through which such person owns its interest, to exercise any rights of a Holder under the Notes.


 


The laws of some jurisdictions may
require that certain purchasers of securities take physical delivery of those securities in definitive form. Accordingly, the
ability to transfer interests in the Notes represented by a Global Note to those persons may be limited. In addition, because
the Depositary can act only on behalf of its Participants, who in turn act on behalf of persons who hold interests through Participants,
the ability of a person having an interest in Notes represented by a Global Note to pledge or transfer such interest to persons
or entities that do not participate in the Depositary’s system, or otherwise to take actions in respect of such interest,
may be affected by the lack of a physical definitive security in respect of such interest. None of the Company, the Trustee, the
Paying Agent and the Registrar will have any responsibility or liability for any aspect of the records relating to or payments
made on account of Notes by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating
to the Notes.


 


The Trustee will act as the Company’s
Paying Agent with respect to the Notes through its Corporate Trust Office presently located at 1100 North Market Street, Wilmington,
Delaware 19890. The Company may at any time rescind the designation of a Paying Agent, appoint a successor Paying Agent, or approve
a change in the office through which any Paying Agent acts.


 


Notices to the Holders of registered Notes
in the form of individual Securities will be given to such Holders at their respective addresses in the Register, or in the case
of Global Notes, electronic delivery in accordance with DTC’s applicable procedures. The Indenture contains provisions setting
forth certain conditions to the institution of proceedings by the Holders of Notes with respect to the Indenture or for any remedy
under the Indenture.


 



    A-8


     


    

 





THIS NOTE IS GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.


 



    A-9


     


    

 





ASSIGNMENT
FORM


 


To assign the within Security, fill in
the form below:


 


I or we assign and transfer the within
Security to:


 


(Insert assignee’s legal name)

(Insert assignee’s social security or tax I.D. number)

(Print or type assignee’s name, address and zip code)


 


and irrevocably appoint the Trustee as
agent to transfer this Security on the books of Allegiance Bancshares, Inc. The agent may substitute another to act for it.


 


Your Signature:


 


(Sign exactly as your name appears on
the other side of this Security)


 


Your Name:


 


Date:


 


Signature Guarantee:


 


SIGNATURE GUARANTEE


 


Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.


 



    


     


    

 





SCHEDULE
OF INCREASES OR DECREASES IN GLOBAL NOTE


 


The initial principal amount of this Global
Note is $175,000,000. The following increases or decreases in the principal amount of this Global Note have been made:


 


	Date	 	Amount
                                         of

                                         
 decrease in

         
 principal
 amount
                                         of this
 Global
                                         Note
 
	 	 	Amount
                                         of
 increase
                                         in
 principal

                                         
 amount of this
 Global
                                         Note
 
	 	 	Principal
 amount
                                         of this
 Global
                                         Note
 following
                                         such
 decrease
                                         or
 increase
 
	 	 	Signature
                                         of
 authorized
 signatory
                                         of
 Trustee