Ameris Bancorp Announces Financial Results for Third Quarter 2024

Highlights of Ameris's results for the third quarter of 2024 include the following:

• Net income of $99.2 million, or $1.44 per diluted share;
• Adjusted net income⁽¹⁾ of $95.2 million, or $1.38 per diluted share
• Return on average assets ("ROA") of 1.49%; Adjusted ROA⁽¹⁾ of 1.43%
• Pre-tax, pre-provision net revenue (PPNR) ROA⁽¹⁾ of 1.99%;
• Growth in tangible book value⁽¹⁾ of $1.72 per share, or 19.1% annualized, to $37.51 at September 30, 2024
• TCE ratio⁽¹⁾ of 10.24%, compared with 9.11% one year ago
• Completed the sale of a pool of mortgage servicing rights ("MSR") recognizing a gain of $5.2 million and reducing exposure to GNMA nonaccrual loans by $85.4 million
• Net interest margin of 3.51% for the third quarter of 2024
• Growth in average earning assets of $454.8 million, or 7.6% annualized
• Growth in total deposits of $435.1 million, or 8.1% annualized
• Allowance for loan losses steady at 1.60% of loans at September 30, 2024
• Annualized net charge-offs declined to 0.15% of average total loans

Ameris Bancorp (NYSE:ABCB) (the "Company") today reported net income of $99.2 million, or $1.44 per diluted share, for the quarter ended September 30, 2024, compared with $80.1 million, or $1.16 per diluted share, for the quarter ended September 30, 2023. Excluding the gain on sale of MSRs and natural disaster expenses, adjusted net income⁽¹⁾ was $95.2 million, or $1.38 per diluted share, for the quarter ended September 30, 2024, compared with $80.1 million, or $1.16 per diluted share, for the quarter ended September 30, 2023.

For the year-to-date period ending September 30, 2024, the Company reported net income of $264.3 million, or $3.83 per diluted share, compared with $203.2 million, or $2.94 per diluted share, for the same period in 2023. The year-to-date period ending September 30, 2024 included a provision for credit losses of $46.0 million, compared with $119.7 million for the same period in 2023.

Commenting on the Company's results, Palmer Proctor, the Company's Chief Executive Officer, said, "This quarter's strong financial performance reflects our core franchise value, disciplined focus on enhancing shareholder returns and commitment to our customers. We achieved core deposit growth, sold additional MSRs at a gain, reduced GNMA nonaccrual exposure and grew tangible book value by over 19% annualized this quarter. We are building capital at a strong pace, with our TCE ratio now over 10% and CET1 ratio at 12%. We remain dedicated to the Southeast markets, which continue to grow and thrive."

Net Interest Income and Net Interest Margin

Net interest income on a tax-equivalent basis (TE) was $215.0 million in the third quarter of 2024, an increase of $2.1 million, or 1.0%, from last quarter and $6.3 million, or 3.0%, compared with the third quarter of 2023. The Company's net interest margin was 3.51% for the third quarter of 2024, down from 3.58% reported for the second quarter of 2024 and from 3.54% reported for the third quarter of 2023. The decrease in net interest margin this quarter compared with the second quarter of 2024 is primarily attributable to decreased yield on securities during the period, in addition to an increase in funding costs. During the second quarter of 2024, the Company recognized approximately $2.3 million, or 0.04% to margin, related to positive inflation adjustments on Treasury Inflation-Protected Securities and accelerated accretion on an early bond payoff. The decrease in net interest margin compared with the same period in 2023 is due to the effect of overall increases in deposit costs over the last year, partially offset by increased yields on earning assets.

Yields on earning assets decreased five basis points during the quarter to 5.81%, compared with 5.86% in the second quarter of 2024. This decrease is primarily related to the $2.3 million in bond income recognized in the second quarter of 2024 noted above. Yields on earning assets increased 19 basis points compared with 5.62% for the third quarter of 2023. Yields on loans increased to 6.01% during the third quarter of 2024, compared with 6.00% for the second quarter of 2024 and 5.81% for the third quarter of 2023.

The Company's total cost of funds was 2.50% in the third quarter of 2024, an increase of two and 26 basis points compared with the second quarter of 2024 and third quarter of 2023, respectively. Deposit costs increased only seven basis points during the third quarter of 2024 to 2.39%, compared with 2.32% in the second quarter of 2024. Costs of interest-bearing deposits increased during the quarter from 3.37% in the second quarter of 2024 to 3.44% in the third quarter of 2024, reflecting an increase in money market and brokered deposit account balances and costs.

Noninterest Income

Noninterest income decreased $19.0 million, or 21.4%, in the third quarter of 2024 to $69.7 million, compared with $88.7 million for the second quarter of 2024, primarily as a result of decreased gain on securities and mortgage revenue. The second quarter of 2024 included a gain on conversion of Visa Class B stock of $12.6 million, compared with no such gain in the third quarter of 2024. Mortgage banking activity decreased by $8.5 million, or 18.2%, to $37.9 million in the third quarter of 2024, compared with $46.4 million for the second quarter of 2024. Gain on sale spreads decreased to 2.17% in the third quarter of 2024 from 2.45% for the second quarter of 2024. Total production in the retail mortgage division decreased $170.1 million, or 12.8%, to $1.16 billion in the third quarter of 2024, compared with $1.33 billion for the second quarter of 2024. The retail mortgage open pipeline was $813.7 million at the end of the third quarter of 2024, compared with $802.2 million for the second quarter of 2024. Included in other noninterest income in the third quarter of 2024 was a $5.2 million gain from the sale of mortgage servicing rights, compared with $4.7 million for the second quarter of 2024.

Noninterest Expense

Noninterest expense decreased $3.6 million, or 2.3%, to $151.8 million during the third quarter of 2024, compared with $155.4 million for the second quarter of 2024. During the third quarter of 2024, the Company recorded natural disaster expenses of $150,000. During the second quarter of 2024, the Company recorded a reduction in FDIC special assessment expense of $895,000. Excluding these items, adjusted expenses⁽¹⁾ decreased approximately $4.6 million, or 3.0%, to $151.6 million in the third quarter of 2024 from $156.3 million in the second quarter of 2024. The decrease in adjusted expenses⁽¹⁾ resulted from a $1.2 million decrease in loan servicing expenses as a result of the sale of mortgage servicing rights beginning in the second quarter of 2024. Also contributing to the decrease in adjusted expenses were $1.0 million of additional deferred origination costs in our equipment finance division and a reduction of $1.0 million in problem loan expenses. Management continues to focus on operating efficiency, and the adjusted efficiency ratio⁽¹⁾ improved to 54.25% in the third quarter of 2024, compared with 55.00% in the second quarter of 2024.

Income Tax Expense

The Company's effective tax rate for the third quarter of 2024 was 21.2%, compared with 28.2% for the second quarter of 2024. Tax expense during the second quarter of 2024 included a $4.8 million expense related to the termination of certain BOLI policies.

Balance Sheet Trends

Total assets at September 30, 2024 were $26.40 billion, compared with $25.20 billion at December 31, 2023. Debt securities available-for-sale increased to $1.44 billion, compared with $1.40 billion at December 31, 2023. Loans, net of unearned income, increased $695.7 million, or 4.6% annualized, to $20.96 billion at September 30, 2024, compared with $20.27 billion at December 31, 2023. Loans held for sale increased to $553.4 million at September 30, 2024 from $281.3 million at December 31, 2023.

At September 30, 2024, total deposits amounted to $21.88 billion, compared with $20.71 billion at December 31, 2023. During the third quarter of 2024, deposits grew $435.1 million, with noninterest bearing accounts increasing $21.1 million, money market accounts increasing $83.6 million, retail CDs increasing $60.4 million and brokered CDs increasing $403.7 million, with such increases offset in part by a $12.6 million decrease in savings accounts and a 121.0 million decrease in interest bearing demand accounts. Noninterest bearing accounts as a percentage of total deposits was minimally changed, such that at September 30, 2024, noninterest bearing deposit accounts represented $6.67 billion, or 30.5% of total deposits, compared with $6.49 billion, or 31.3% of total deposits, at December 31, 2023.

Shareholders' equity at September 30, 2024 totaled $3.68 billion, an increase of $254.6 million, or 7.4%, from December 31, 2023. The increase in shareholders' equity was primarily the result of earnings of $264.3 million during the first nine months of 2024, partially offset by dividends declared, share repurchases and an improvement in other comprehensive loss of $20.2 million resulting from changes in interest rates on the Company's investment portfolio. Tangible book value per share⁽¹⁾ increased $3.87 per share, or 15.4% annualized, during the first nine months of 2024 to $37.51 at September 30, 2024. Tangible common equity as a percentage of tangible assets was 10.24% at September 30, 2024, compared with 9.64% at the end of 2023. The Company had no repurchases of its shares in the quarter ending September 30, 2024.

Credit Quality

During the third quarter of 2024, the Company recorded a provision for credit losses of $6.1 million, keeping the allowance for credit losses at 1.60% of loans, compared with a provision of $18.8 million in the second quarter of 2024. Nonperforming assets as a percentage of total assets improved 30 basis points to 0.44% during the quarter. Approximately $8.2 million, or 7.0%, of the nonperforming assets at September 30, 2024 were GNMA-guaranteed mortgage loans, which have minimal loss exposure. Excluding these government-guaranteed loans, nonperforming assets as a percentage of total assets increased two basis points to 0.41% at September 30, 2024, compared with 0.39% at the second quarter of 2024. The Company sold a pool of MSRs during the third quarter of 2024 which reduced exposure to nonperforming GNMA-guaranteed mortgage loans by $85.4 million. The net charge-off ratio improved to 15 basis points for the third quarter of 2024, from 18 basis points in the second quarter of 2024.

Share Repurchase Program

The Company's board of directors, on October 18, 2024, authorized the Company to repurchase up to $100.0 million of its outstanding common stock. Repurchases of shares, which are authorized to occur through October 31, 2025, will be made, if at all, in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases will be based on a variety of factors, including share acquisition price, regulatory limitations and other market and economic factors. The program does not require the Company to repurchase any specific number of shares. The board's authorization is a continuation of and increase in the Company's previously announced share repurchase program which was set to expire on October 31 and under which the Company has repurchased $8.3 million of its outstanding common stock in the past 12 months.

Conference Call

The Company will host a teleconference at 9:00 a.m. Eastern time on Friday, October 25, 2024, to discuss the Company's results and answer appropriate questions. The conference call can be accessed by dialing 1-844-481-2939. The conference call ID is Ameris Bancorp. A replay of the call will be available beginning one hour after the end of the conference call until November 1, 2024. To listen to the replay, dial 1-877-344-7529. The conference replay access code is 1525671. The financial information discussed will be available on the Investor Relations page of the Ameris Bank website at ir.amerisbank.com. Participants also may listen to a live webcast of the presentation by visiting the link on the Investor Relations page of the Ameris Bank website.

About Ameris Bancorp

Ameris Bancorp is the parent of Ameris Bank, a state-chartered bank headquartered in Atlanta, Georgia. Ameris operates 164 financial centers across the Southeast and also serves consumer and business customers nationwide through select lending channels. Ameris manages $26.4 billion in assets as of September 30, 2024, and provides a full range of traditional banking and lending products, treasury and cash management, insurance premium financing, and mortgage and refinancing services. Learn more about Ameris at www.amerisbank.com.

This news release contains certain performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP financial measures in its analysis of the Company's performance. These measures are useful when evaluating the underlying performance and efficiency of the Company's operations and balance sheet. The Company's management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant gains and charges in the current period. The Company's management believes that investors may use these non-GAAP financial measures to evaluate the Company's financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies.

This news release contains forward-looking statements, as defined by federal securities laws, including, among other forward-looking statements, certain plans, expectations and goals. Words such as "may," "believe," "expect," "anticipate," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or other comparable terminology, as well as similar expressions, are meant to identify forward-looking statements. The forward-looking statements in this news release are based on current expectations and are provided to assist in the understanding of potential future performance. Such forward-looking statements involve numerous assumptions, risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements, including, without limitation, the following: general competitive, economic, unemployment, political and market conditions and fluctuations, including real estate market conditions, and the effects of such conditions and fluctuations on the creditworthiness of borrowers, collateral values, asset recovery values and the value of investment securities; movements in interest rates and their impacts on net interest margin, investment security valuations and other performance measures; expectations on credit quality and performance; legislative and regulatory changes; changes in U.S. government monetary and fiscal policy; competitive pressures on product pricing and services; the success and timing of other business strategies; our outlook and long-term goals for future growth; and natural disasters, geopolitical events, acts of war or terrorism or other hostilities, public health crises and other catastrophic events beyond our control. For a discussion of some of the other risks and other factors that may cause such forward-looking statements to differ materially from actual results, please refer to the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and the Company's subsequently filed periodic reports and other filings. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements.