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Ameris Bancorp Announces Financial Results For Second Quarter 2018

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Ameris Bancorp Announces Financial Results For Second Quarter 2018

PR Newswire

MOULTRIE, Ga., July 27, 2018 /PRNewswire/ -- Ameris Bancorp (NASDAQ:ABCB) (the "Company") today reported net income of $9.4 million, or $0.24 per diluted share, for the quarter ended June 30, 2018, compared with $23.1 million, or $0.62 per diluted share, for the quarter ended June 30, 2017.  For the year-to-date period ending June 30, 2018, the Company reported net income of $36.0 million, or $0.92 per diluted share, compared with $44.2 million, or $1.20 per diluted share, for the same period in 2017.

Ameris Bancorp logo. (PRNewsFoto/Ameris Bancorp)

Commenting on the Company's quarterly results, Dennis J. Zember, Jr., the Company's President and Chief Executive Officer, said, "We had an active second quarter from the perspective of moving our operating results and recurring earnings higher.  Closing two acquisitions in the second quarter, and fully completing one of the integrations sets us up for a positive move in our earnings in the coming quarters.  Combined with our growth and our stable margins and deposit costs, we believe the catalysts are in place to improve on already strong efficiency ratios and return on assets.  Our operating results in the current quarter were adversely impacted by defaults on two purchased loan relationships in the premium finance division that reduced our earnings by approximately $3.7 million, after tax.  These two relationships were not the type of traditional premium finance loans that we have been relying on for growth, but instead were part of a group of C&I loans made to insurance agencies.  Since our acquisition of the premium finance division, we have grown traditional premium finance by $190.7 million and reduced non-core loans by $6.4 million to only $18.1 million at the end of the quarter.  Most importantly, we do not anticipate similar credit costs going forward and we remain confident in the credit quality from our premium finance operation."

The Company reported adjusted operating net income of $29.2 million, or $0.74 per diluted share, for the quarter ended June 30, 2018, compared with $23.5 million, or $0.63 per diluted share, for the second quarter of 2017.  The Company reported adjusted operating net income of $57.0 million, or $1.46 per diluted share, for the six months ended June 30, 2018, compared with $45.1 million, or $1.23 per diluted share, for the same period of 2017.  Adjusted net income for the periods excludes after-tax merger and conversion charges, loss on the sale of bank premises and expenses related to the retirement of Edwin W. Hortman, Jr., the Company's Executive Chairman.

Following is a summary of the adjustments between reported net income and adjusted net income:

Adjusted Net Income Reconciliation









Three Months Ended


Six Months Ended


June 30,


June 30,


June 30,


June 30,

(dollars in thousands except per share data)

2018


2017


2018


2017

Net income available to common shareholders

$

9,387



$

23,087



$

36,047



$

44,240










Adjustment items:








Merger and conversion charges

18,391





19,226



402


Executive Chairman retirement benefits

5,457





5,457




Loss on sale of premises

196



570



779



865


Tax effect of  adjustment items

(4,192)



(199)



(4,490)



(443)


After tax adjustment items

19,852



371



20,972



824










Adjusted net income

$

29,239



$

23,458



$

57,019



$

45,064










Reported net income per diluted share

$

0.24



$

0.62



$

0.92



$

1.20


Adjusted net income per diluted share

$

0.74



$

0.63



$

1.46



$

1.23










Reported return on average assets

0.44

%


1.29

%


0.89

%


1.27

%

Adjusted return on average assets

1.38

%


1.32

%


1.40

%


1.29

%

 

Highlights of the Company's performance and results for the second quarter of 2018 include the following:

  • Completion of the acquisition of Atlantic Coast Financial Corporation ("Atlantic"), adding $966.3 million in total assets
  • Completion of the acquisition of Hamilton State Bancshares, Inc. ("Hamilton"), adding $2.0 billion in total assets
  • Growth in adjusted net earnings of 24.6% compared with the second quarter of 2017
  • Organic loan growth of $268.0 million for the quarter, reflecting an annualized growth rate of 18.4%
  • Year-over-year organic growth in noninterest bearing deposits of $232.7 million, or 13.9% 
  • Adjusted return on average assets of 1.38%, compared with 1.32% in the second quarter of 2017
  • Adjusted return on average tangible common equity of 17.26%, compared with 14.86% in the second quarter of 2017
  • Improvement in the adjusted efficiency ratio to 57.53% in the second quarter of 2018, compared with 59.95% in the first quarter of 2018 and 59.37% in the second quarter of 2017
  • 17.5% increase in total revenue, to $107.3 million, in the second quarter of 2018, compared with total revenue of $91.3 million in the second quarter of 2017
  • Annualized net charge-offs of 0.23% of average total loans and 0.26% of average non-purchased loans

Acquisition of Atlantic
The Company completed the acquisition of Atlantic on May 25, 2018.  Highlights of the merger include the following:

  • Added $966.3 million in total assets, $758.2 million in loans and $584.1 million in total deposits
  • Identified and realized cost saves in excess of amounts in initial announcement
  • Retained production teams in Orlando and Tampa that have strong pipelines and similar lending styles to that of Ameris Bank

The conversion of Atlantic's systems to the Company's systems was complete by the end of the second quarter of 2018.  In addition, due to the proximity between Atlantic's retail branches and those of the Company, the Company closed 11 retail branches at the time of the systems conversion in June 2018, and as a result, management expects to realize immediate operating efficiencies from the acquisition going forward.

Acquisition of Hamilton
The Company completed the acquisition of Hamilton on June 29, 2018.  Highlights of the merger include the following:

  • Added $2.0 billion in total assets, $1.3 billion in loans and $1.6 billion in total deposits
  • Added 28 retail offices, 24 of which are located within the Atlanta MSA, two of which are in the Gainesville, Georgia MSA and the remaining two of which are located near the Atlanta MSA
  • Identified cost savings slightly in excess of our announced level of 35%

The conversion of Hamilton's systems to the Company's is scheduled to be completed during the fourth quarter of 2018, after which time management expects to realize operating efficiencies from the acquisition.

Credit Quality
During the second quarter of 2018, the Company recorded provision for loan loss expense of $9.1 million, compared with $1.8 million in the first quarter of 2018.  Approximately $6.7 million was related to two acquired loan relationships in the premium finance division that became impaired during the second quarter of 2018.  Those impaired loans were non-core general operating lines to insurance agencies and were not the traditional premium finance offerings that the Company primarily focuses on.  At the end of the quarter, 97% of the division's loans were secured by insurance policies and the related cash and 3% were operating lines.  Management notes that both agencies suffered unusual circumstances that precipitated their defaults, leading the Company to believe that the remaining portfolio is not a material risk item and that future credit costs should be similar to past expectations.

Nonperforming assets as a percent of total assets increased six basis point to 0.67% during the quarter, a result of four basis points from the premium finance division and two basis points because of the Atlantic and Hamilton acquisitions completed during the quarter.  The net charge-off ratio for non-purchased loans increased twelve basis points, all of which was due to the elevated charge offs in the premium finance division.

Net Interest Income and Net Interest Margin
Net interest income on a tax-equivalent basis increased to $76.9 million in the current quarter of 2018, an increase of $12.2 million, or 18.79%, from the same quarter in 2017.  The Company's net interest margin, excluding the effects of accretion income, decreased during the quarter to 3.81%, compared with 3.84% in the first quarter of 2018.  Compared with the same quarter in 2017, net interest margin, excluding the effects of accretion income, has improved by four basis points, while average earning assets grew $1.23 billion during this period.  The Company closed on Atlantic on May 25, 2018, which had the effect of reducing the quarter's margin by approximately two basis points.

Interest income on a tax-equivalent basis increased to $90.9 million in the current quarter of 2018, an increase of $17.9 million, or 24.5%, from the same quarter in 2017.  Yields on total earning assets moved higher during the quarter to 4.66%, compared with 4.52% for the first quarter in 2018 and 4.45% in the second quarter of 2017.  Yields on all loans excluding the effect of accretion increased to 4.81% in the current quarter of 2018, compared with 4.75% in the first quarter of 2018 and 4.59% in the second quarter of 2017.  Accretion income in the current quarter increased to $2.7 million, compared with $1.4 million in the first quarter of 2018 and $2.9 million in the second quarter of 2017.  Loan production in the banking division during the second quarter of 2018 totaled $439.3 million, with a weighted average yield of 5.46%, compared with $365.0 million and 5.19%, respectively, in the first quarter of 2018 and $527.8 million and 4.57%, respectively, in the second quarter of 2017.  Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to an additional $2.1 billion during the second quarter of 2018.  Management believes production yields going forward will be accretive to overall yields and will continue to provide stability in the overall margin despite likely increases in funding costs.

Interest expense during the second quarter of 2018 moved higher to $13.9 million, compared with $10.7 million in the first quarter of 2018 and $8.3 million in the second quarter of 2017.  The Company's total cost of funds moved twelve basis points higher to 0.75% in the second quarter of 2018 as compared with the first quarter of 2018.  Deposit costs increased only four basis points during the second quarter of 2018 to 0.47%, compared with 0.43% in the first quarter of 2018.  Costs of interest bearing deposits increased during the quarter from 0.59% in the first quarter of 2018 to 0.67% in the second quarter, with approximately one basis points of this increase relating to the newly acquired deposits at Atlantic.  Management notes that the deposit beta on interest bearing deposits in the second quarter at core Ameris Bank amounted to 28% which is in line with previous quarters and previous rate movements.

Interest expense on non-deposit borrowings increased during the quarter to $6.2 million, compared with $3.9 million in the first quarter of 2018 and $3.7 million in the same quarter in 2017.  Overall costs on these funding sources decreased twelve basis points during the quarter, but the Company's use of these sources increased from 8.0% of total funding in the first quarter of 2018 to 11.9% in the second quarter of 2018, causing the increase in total cost of funds.

Non-interest Income
Non-interest income in the second quarter of 2018 was $31.3 million, an increase of $3.1 million, or 11.1%, compared with the same quarter in 2017.  The Company continued to experience mostly stable levels of service charge revenue in the second quarter of 2018 as compared with prior quarters.

Revenue in the retail mortgage group totaled $18.9 million in the second quarter of 2018, an increase of 14.6% compared with $16.5 million in the second quarter of 2017.  Total production in the second quarter of 2018 for the retail mortgage group amounted to $522.1 million (90% purchase and 10% refinance), compared with $400.2 million in the same quarter of 2017 (89% purchase and 11% refinance).  Gain on sale spreads recovered somewhat in the second quarter, moving to 2.94% from 2.62% in the first quarter.  The Company's open pipeline increased in the second quarter of 2018 to $228.7 million, compared with $153.3 million at March 31, 2018 and $174.3 million at the end of the second quarter of 2017.

The Company's warehouse lending group continued to increase its profitability, as revenues from the division increased by $1.4 million, or 80.9%, during the second quarter of 2018 compared with the same period in 2017.  Net income for the division increased 168.8% from $837,000 in the second quarter of 2017 to $2.3 million in the second quarter of 2018.  Loan production increased from $966.8 million in the second quarter of 2017 to approximately $1.23 billion in the current quarter.

Revenues from the Company's SBA division were $2.7 million during the second quarter of 2018, compared with $2.6 million during the second quarter of 2017, and net income for the division increased slightly from $875,000 for the second quarter of 2017 to $894,000 for the second quarter of 2018.  The open pipeline increased to $96.7 million at the end of the quarter, compared with $46.0 million at the same time last year.

Non-interest Expense
Non-interest expense increased $27.3 million to $86.4 million during the second quarter of 2018, compared with $59.1 million in the first quarter of 2018.  During the second quarter of 2018, the Company recorded $18.4 million of merger and conversion charges, $5.5 million of expense related to Mr. Hortman's retirement and $196,000 of loss on sale of bank premises, compared with $835,000 of merger and conversion charges and $583,000 of loss on sale bank premises recorded in the first quarter of 2018.  Excluding these charges, operating expenses increased approximately $4.7 million, or 8.1%, to $62.3 million in the second quarter of 2018, up from $57.7 million in the first quarter of 2018.

The Company continues to focus on improving its operating efficiency ratio. During the second quarter of 2018, the Company's adjusted efficiency ratio declined to 57.53%, compared with 59.95% in the first quarter of 2018.  Management expects to continue improving efficiency in future quarters as a result of  the recently completed acquisitions of Atlantic and Hamilton.  Atlantic has been fully integrated and cost savings are expected immediately in the third quarter of 2018, while Hamilton will not be fully integrated with full cost savings benefits until the fourth quarter of 2018.

Exclusive of the $5.5 million retirement expense, salaries and benefits increased $2.2 million during the second quarter of 2018 to $34.3 million, from $32.1 million in the first quarter of 2018.  The increase is attributable to the retail mortgage division, where compensation costs increased $3.1 million due to increased commissions and associated expenses resulting from continued growth of the sales force in the quarter.

Total credit costs (provision and non-provision credit resolution-related costs) totaled $10.2 million in the second quarter of 2018, compared with $2.8 million in the same quarter in 2017 and $2.4 million in the first quarter of 2018.  Excluding the $6.7 million charge discussed above related to the premium finance division, credit costs increased $651,000 as compared with the same quarter in 2017 and increased $1.1 million as compared with the first quarter of 2018.

Income Tax Expense
The Company's effective tax rate for the second quarter of 2018 was 20.5%, compared with 22.4% in the first quarter of 2018 and 30.9% during the second quarter of 2017.  The Company expects that its effective tax rates in the future will be consistent with that for the first quarter of 2018.  The decrease in effective tax rates in 2018, compared with 2017, is a result of the Tax Cuts and Jobs Act that was enacted in the fourth quarter of 2017.

Balance Sheet Trends
Total assets at June 30, 2018 were $11.2 billion, compared with $7.86 billion at December 31, 2017.   Loans, including loans held for sale, totaled $8.63 billion at June 30, 2018, compared with $6.24 billion at December 31, 2017 and $6.30 billion at March 31, 2018.  The Atlantic and Hamilton acquisitions accounted for $2.06 billion of this loan growth.  Exclusive of the acquisitions, growth in core loans (legacy and purchased non-covered loans) during the quarter amounted to $268.0 million, or 18.4% on an annualized basis.  This growth in legacy loans was diversified across product type, with residential real estate at 50% of incremental growth, commercial and industrial and agriculture at 18%, consumer and other loans at 18%, construction and development at 13% and commercial real estate at 1% of the total.  Loans held for sale, which includes both residential mortgage and SBA-guaranteed loans, increased $26.1 million during the second quarter of 2018.

Investment securities at the end of the second quarter of 2018 were $1.20 billion, or 11.9% of earning assets, compared with $853.1 million, or 11.7% of earning assets, at December 31, 2017.

At June 30, 2018, total deposits amounted to $8.76 billion, or 90.1% of total funding, compared with $6.63 billion and 94.8%, respectively, at December 31, 2017.  Compared with the same period in 2017, deposits have increased by $2.97 billion, or 51.2% with the Atlantic and Hamilton acquisitions accounting for $2.16 billion of this growth.  Excluding the acquisitions, deposits increased $803.6 million, or 13.9%.  Non-interest bearing deposits at the end of the current quarter were $2.36 billion, or 26.9% of total deposits, compared with $1.78 billion, or 26.8%, at December 31, 2017.  Non-rate sensitive deposits (including non-interest bearing, NOW and savings) totaled $4.39 billion at June 30, 2018, compared with $3.52 billion at the end of 2017.  These funds represented 50.1% of the Company's total deposits at June 30, 2018, compared with 53.1% at the end of 2017.

Shareholders' equity at June 30, 2018 totaled $1.37 billion, compared with $804.5 million at December 31, 2017.  The increase in shareholders' equity was the result of the issuance of shares of common stock in the Company's acquisitions of Atlantic, Hamilton and the remainder of US Premium Finance Holding Company, plus earnings of $36.0 million during the year.  Tangible book value per share at June 30, 2018 was $17.12, up compared with $16.90 per share at March 31, 2018.

Conference Call
The Company will host a teleconference at 10:00 a.m. Eastern time today (July 27, 2018) to discuss the Company's results and answer appropriate questions.  The conference call can be accessed by dialing 1-877-504-1190 (or 1-855-669-9657 for participants in Canada and 1-412-902-6630 for other international participants).  The conference ID name is Ameris Bancorp ABCB.   A replay of the call will be available one hour after the end of the conference call until August 10, 2018.  To listen to the replay, dial 1-877-344-7529 (or 1-855-669-9658 for participants in Canada and 1-412-317-0088 for other international participants).  The conference replay access code is 10121680.  The conference call replay and the financial information discussed will also be available on the Investor Relations page of the Ameris Bank website at www.amerisbank.com.

About Ameris Bancorp
Ameris Bancorp is a bank holding company headquartered in Moultrie, Georgia.  The Company's banking subsidiary, Ameris Bank, had 126 locations in Georgia, Alabama, northern Florida and South Carolina at the end of the most recent quarter.

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"). Management of Ameris Bancorp (the "Company") uses these non-GAAP 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 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 performance measures that may be presented by other companies.

This news release contains statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The words "believe", "estimate", "expect", "intend", "anticipate" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made.  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.  Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors, including, without limitation, the following:  general competitive, economic, political and market conditions and fluctuations, including, without limitation, movements in interest rates; competitive pressures on product pricing and services; the businesses of the Company and Atlantic and/or Hamilton may not be integrated successfully or such integration may take longer to accomplish than expected; the expected cost savings and any revenue synergies from the merger transactions may not be fully realized within the expected timeframes; disruption from the merger transactions may make it more difficult to maintain relationships with customers, employees or others; diversion of management time to merger-related issues; and the success and timing of other business strategies.  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 its Annual Report on Form 10-K for the year ended December 31, 2017 and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Financial Highlights



Table 1


Three Months Ended


Six Months Ended


Jun


Mar


Dec


Sep


Jun


Jun


Jun

(dollars in thousands except per share data)

2018


2018


2017


2017


2017


2018


2017















EARNINGS














Net income

$

9,387



$

26,660



$

9,150



$

20,158



$

23,087



$

36,047



$

44,240


Adjusted net income

$

29,239



$

27,780



$

23,590



$

23,617



$

23,458



$

57,019



$

45,064
















COMMON SHARE DATA














Earnings per share available to common
shareholders














Basic

$

0.24



$

0.70



$

0.25



$

0.54



$

0.62



$

0.93



$

1.21


Diluted

$

0.24



$

0.70



$

0.24



$

0.54



$

0.62



$

0.92



$

1.20


Adjusted Diluted EPS

$

0.74



$

0.73



$

0.63



$

0.63



$

0.63



$

1.46



$

1.23


Cash dividends per share

$

0.10



$

0.10



$

0.10



$

0.10



$

0.10



$

0.20



$

0.20


Book value per share (period end)

$

28.87



$

22.67



$

21.59



$

21.54



$

21.03



$

28.87



$

21.03


Tangible book value per share (period end)

$

17.12



$

16.90



$

17.86



$

17.78



$

17.24



$

17.12



$

17.24


Weighted average number of shares














Basic

39,432,021



37,966,781



37,238,564



37,225,418



37,162,810



38,703,449



36,417,754


Diluted

39,709,503



38,250,122



37,556,335



37,552,667



37,489,348



38,980,754



36,744,190


Period end number of shares

47,518,662



38,327,081



37,260,012



37,231,049



37,222,904



47,518,662



37,222,904


Market data














High intraday price

$

58.10



$

59.05



$

51.30



$

51.28



$

49.80



$

59.05



$

49.80


Low intraday price

$

50.20



$

47.90



$

44.75



$

41.05



$

42.60



$

47.90



$

41.60


Period end closing price

$

53.35



$

52.90



$

48.20



$

48.00



$

48.20



$

53.35



$

48.20


Average daily volume

253,413



235,964



206,178



168,911



169,617



244,914



205,998
















PERFORMANCE RATIOS














Return on average assets

0.44

%


1.38

%


0.47

%


1.07

%


1.29

%


0.89

%


1.27

%

Adjusted return on average assets

1.38

%


1.44

%


1.20

%


1.26

%


1.32

%


1.40

%


1.29

%

Return on average common equity

3.86

%


12.73

%


4.47

%


10.04

%


11.95

%


7.72

%


12.13

%

Adjusted return on average tangible common
equity

17.26

%


17.09

%


13.91

%


14.28

%


14.86

%


17.18

%


15.31

%

Earning asset yield (TE)

4.66

%


4.52

%


4.49

%


4.50

%


4.45

%


4.60

%


4.42

%

Total cost of funds

0.75

%


0.63

%


0.57

%


0.57

%


0.52

%


0.69

%


0.47

%

Net interest margin (TE)

3.95

%


3.92

%


3.94

%


3.95

%


3.95

%


3.93

%


3.96

%

Noninterest income excluding securities
transactions, as a percent of total revenue
(TE)

25.72

%


24.71

%


22.41

%


25.68

%


27.81

%


25.25

%


27.55

%

Efficiency ratio

80.50

%


62.04

%


63.74

%


67.94

%


61.02

%


71.82

%


61.26

%

Adjusted efficiency ratio (TE)

57.53

%


59.95

%


60.88

%


61.09

%


59.37

%


58.67

%


59.51

%















CAPITAL ADEQUACY (period end)














Shareholders' equity to assets

12.26

%


10.83

%


10.24

%


10.48

%


10.58

%


12.26

%


10.58

%

Tangible common equity to tangible assets

7.65

%


8.30

%


8.62

%


8.81

%


8.84

%


7.65

%


8.84

%















EQUITY TO ASSETS RECONCILIATION














Tangible common equity to tangible assets

7.65

%


8.30

%


8.62

%


8.81

%


8.84

%


7.65

%


8.84

%

Effect of goodwill and other intangibles

4.61

%


2.53

%


1.62

%


1.67

%


1.74

%


4.61

%


1.74

%

Equity to assets (GAAP)

12.26

%


10.83

%


10.24

%


10.48

%


10.58

%


12.26

%


10.58

%















OTHER DATA (period end)














Full time equivalent employees














Banking Division

1,477



1,072



1,085



1,080



1,082



1,477



1,082


Retail Mortgage Division

308



290



279



272



268



308



268


Warehouse Lending Division

7



7



8



8



8



7



8


SBA Division

22



21



20



23



23



22



23


Premium Finance Division

68



67



68



62



56



68



56


Total Ameris Bancorp FTE headcount

1,882



1,457



1,460



1,445



1,437



1,882



1,437
















Assets per Banking Division FTE

$

7,577



$

7,484



$

7,241



$

7,083



$

6,837



$

7,577



$

6,837


Branch locations

126



97



97



97



97



126



97


Deposits per branch location

$

69,536



$

66,455



$

68,308



$

60,778



$

59,726



$

69,536



$

59,726


 

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Income Statement



Table 2


Three Months Ended


Six Months Ended


Jun


Mar


Dec


Sep


Jun


Jun


Jun

(dollars in thousands except per share data)

2018


2018


2017


2017


2017


2018


2017















Interest income














Interest and fees on loans

$

82,723



$

73,267



$

73,440



$

70,462



$

65,464



$

155,990



$

126,985


Interest on taxable securities

6,321



5,207



5,097



5,062



5,195



11,528



9,995


Interest on nontaxable securities

179



322



372



392



401



501



817


Interest on deposits in other banks

723



716



655



406



351



1,439



664


Interest on federal funds sold














Total interest income

89,946



79,512



79,564



76,322



71,411



169,458



138,461
















Interest expense














Interest on deposits

7,794



6,772



6,398



5,136



4,580



14,566



8,343


Interest on other borrowings

6,153



3,939



3,643



4,331



3,674



10,092



6,371


Total interest expense

13,947



10,711



10,041



9,467



8,254



24,658



14,714
















Net interest income

75,999



68,801



69,523



66,855



63,157



144,800



123,747


Provision for loan losses

9,110



1,801



2,536



1,787



2,205



10,911



4,041


Net interest income after provision for loan
losses

66,889



67,000



66,987



65,068



60,952



133,889



119,706
















Noninterest income














Service charges on deposits accounts

10,613



10,228



10,340



10,535



10,616



20,841



21,179


Mortgage banking activity

14,890



11,900



10,037



13,340



13,943



26,790



25,158


Other service charges, commissions and fees

697



719



735



699



729



1,416



1,438


Gain (loss) on sale of securities

(123)



37







37



(86)



37


Other noninterest income

5,230



3,580



2,451



2,425



2,864



8,810



6,083


Total noninterest income

31,307



26,464



23,563



26,999



28,189



57,771



53,895
















Noninterest expense














Salaries and employee benfits

39,776



32,089



30,507



32,583



29,132



71,865



56,926


Occupancy and equipment expenses

6,390



6,198



6,010



6,036



6,146



12,588



12,023


Data processing and telecommunications expenses

6,439



7,135



7,219



7,050



7,028



13,574



13,600


Credit resolution related expenses(1)

1,045



549



614



1,347



599



1,594



1,532


Advertising and marketing expenses

1,256



1,229



1,519



1,247



1,259



2,485



2,365


Amortization of intangible assets

2,252



934



942



941



1,013



3,186



2,049


Merger and conversion charges

18,391



835



421



92





19,226



402


Other noninterest expenses

10,837



10,129



12,105



14,471



10,562



20,966



19,935


Total noninterest expense

86,386



59,098



59,337



63,767



55,739



145,484



108,832
















Income before income tax expense

11,810



34,366



31,213



28,300



33,402



46,176



64,769


Income tax expense

2,423



7,706



22,063



8,142



10,315



10,129



20,529


Net income

$

9,387



$

26,660



$

9,150



$

20,158



$

23,087



$

36,047



$

44,240
















Diluted earnings per common share

$

0.24



$

0.70



$

0.24



$

0.54



$

0.62



$

0.92



$

1.20
















(1) Includes expenses associated with problem loans and OREO, as well as OREO losses and writedowns.





 

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Period End Balance Sheet

Table 3


Three Months Ended


Jun


Mar


Dec


Sep


Jun

(dollars in thousands)

2018


2018


2017


2017


2017











Assets










Cash and due from banks

$

151,539



$

123,945



$

139,313



$

131,071



$

139,500


Federal funds sold and interest-bearing deposits in banks

273,170



210,930



191,345



112,844



137,811


Time deposits in other banks

11,558










Investment securities available for sale, at fair value

1,153,703



848,585



810,873



819,593



818,693


Other investments

44,769



32,227



42,270



47,977



42,495


Loans held for sale, at fair value

137,249



111,135



197,442



137,392



146,766












Loans

5,380,515



5,051,986



4,856,514



4,574,678



4,230,228


Purchased loans

2,812,510



818,587



861,595



917,126



950,499


Purchased loan pools

297,509



319,598



328,246



465,218



490,114


Loans, net of unearned income

8,490,534



6,190,171



6,046,355



5,957,022



5,670,841


Allowance for loan losses

(31,532)



(26,200)



(25,791)



(25,966)



(25,101)


Loans, net

8,459,002



6,163,971



6,020,564



5,931,056



5,645,740












Other real estate owned

8,003



9,171



8,464



9,391



11,483


Purchased other real estate owned

7,272



6,723



9,011



9,946



11,330


Total other real estate owned

15,275



15,894



17,475



19,337



22,813












Premises and equipment, net

144,484



116,381



117,738



119,458



121,108


Goodwill

504,764



208,513



125,532



125,532



125,532


Other intangible assets, net

53,561



12,562



13,496



14,437



15,378


Deferred income taxes, net

40,240



28,677



28,320



39,365



41,124


Cash value of bank owned life insurance

103,059



80,007



79,641



79,241



78,834


Other assets

98,324



70,001



72,194



72,517



62,064


Total assets

$

11,190,697



$

8,022,828



$

7,856,203



$

7,649,820



$

7,397,858












Liabilities










Deposits










Noninterest-bearing

$

2,356,420



$

1,867,900



$

1,777,141



$

1,718,022



$

1,672,918


Interest-bearing

6,405,173



4,578,265



4,848,704



4,177,482



4,120,479


Total deposits

8,761,593



6,446,165



6,625,845



5,895,504



5,793,397


Federal funds purchased and securities sold under agreements to repurchase

11,002



23,270



30,638



14,156



18,400


Other borrowings

862,136



555,535



250,554



808,572



679,591


Subordinated deferrable interest debentures

88,646



85,881



85,550



85,220



84,889


FDIC loss-share payable, net

18,716



9,255



8,803



8,190



7,992


Other liabilities

76,708



33,778



50,334



36,257



30,907


Total liabilities

9,818,801



7,153,884



7,051,724



6,847,899



6,615,176












Shareholders' Equity










Preferred stock










Common stock

49,012



39,820



38,735



38,706



38,698


Capital stock

1,049,283



559,040



508,404



506,779



505,803


Retained earnings

301,656



296,366



273,119



267,694



251,259


Accumulated other comprehensive income (loss), net of tax

(12,571)



(10,823)



(1,280)



3,241



1,421


Treasury stock

(15,484)



(15,459)



(14,499)



(14,499)



(14,499)


Total shareholders' equity

1,371,896



868,944



804,479



801,921



782,682


Total liabilities and shareholders' equity

$

11,190,697



$

8,022,828



$

7,856,203



$

7,649,820



$

7,397,858












Other Data










Earning assets

$

10,110,983



$

7,393,048



$

7,288,285



$

7,074,828



$

6,816,606


Intangible assets

558,325



221,075



139,028



139,969



140,910


Interest-bearing liabilities

7,366,957



5,242,951



5,215,446



5,085,430



4,903,359


Average assets

8,529,035



7,823,451



7,777,996



7,461,367



7,152,024


Average common shareholders' equity

974,494



849,346



812,264



796,856



774,664


 

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Asset Quality Information



Table 4


Three Months Ended


Six Months Ended


Jun


Mar


Dec


Sep


Jun


Jun


Jun

(dollars in thousands)

2018


2018


2017


2017


2017


2018


2017















Allowance for Loan Losses














Balance at beginning of period

$

26,200



$

25,791



$

25,966



$

25,101



$

25,250



$

25,791



$

23,920
















Provision for loan losses

9,110



1,801



2,536



1,787



2,205



10,911



4,041
















Charge-offs

5,717



2,872



3,638



2,443



3,284



8,589



4,386


Recoveries

1,939



1,480



927



1,521



930



3,419



1,526


Net charge-offs (recoveries)

3,778



1,392



2,711



922



2,354



5,170



2,860
















Ending balance

$

31,532



$

26,200



$

25,791



$

25,966



$

25,101



$

31,532



$

25,101
















Net  Charge-off Information




























Charge-offs














Commercial, financial and agricultural

$

3,744



$

1,449



$

954



$

1,091



$

701



$

5,193



$

805


Real estate - construction and development

20







1



41



20



94


Real estate - commercial and farmland



142



440



18



386



142



395


Real estate - residential

204



198



120



852



963



402



1,179


Consumer installment

839



962



696



320



438



1,801



602


Purchased loans

910



121



1,428



161



755



1,031



1,311


Purchased loan pools














Total charge-offs

5,717



2,872



3,638



2,443



3,284



8,589



4,386
















Recoveries














Commercial, financial and agricultural

1,247



656



571



409



221



1,903



290


Real estate - construction and development

2



114



2



126



98



116



118


Real estate - commercial and farmland

11



24



28



26



121



35



130


Real estate - residential

29



182



47



56



73



211



134


Consumer installment

117



67



38



17



44



184



61


Purchased loans

533



437



241



887



373



970



793


Purchased loan pools














Total recoveries

1,939



1,480



927



1,521



930



3,419



1,526
















Net charge-offs (recoveries)

$

3,778



$

1,392



$

2,711



$

922



$

2,354



$

5,170



$

2,860
















Non-Performing Assets














Nonaccrual loans (excluding purchased loans)

$

16,813



$

14,420



$

14,202



$

15,325



$

17,083



$

16,813



$

17,083


Nonaccrual purchased loans

33,557



15,940



15,428



19,049



17,357



33,557



17,357


Nonaccrual purchased loan pools

2,197







915



918



2,197



918


Other real estate owned

8,003



9,171



8,464



9,391



11,483



8,003



11,483


Purchased other real estate owned

7,272



6,723



9,011



9,946



11,330



7,272



11,330


Accruing loans delinquent 90 days or more

(excluding purchased loans)

7,421



2,497



5,991



2,941



1,784



7,421



1,784


Accruing purchased loans delinquent 90 days or
more









147





147


Total non-performing assets

$

75,263



$

48,751



$

53,096



$

57,567



$

60,102



$

75,263



$

60,102
















Asset Quality Ratios














Non-performing assets as a percent of total assets

0.67

%


0.61

%


0.68

%


0.75

%


0.81

%


0.67

%


0.81

%

Net charge-offs as a percent of average loans
(annualized)

0.23

%


0.09

%


0.18

%


0.06

%


0.17

%


0.16

%


0.11

%

Net charge-offs, excluding purchased loans as a

percent of average loans (annualized)

0.26

%


0.14

%


0.13

%


0.15

%


0.20

%


0.20

%


0.12

%

 

 

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Loan Information

Table 5


Jun


Mar


Dec


Sep


Jun

(dollars in thousands)

2018


2018


2017


2017


2017











Loans by Type










Legacy loans










Commercial, financial and agricultural

$

1,446,857



$

1,387,437



$

1,362,508



$

1,307,209



$

1,218,633


Real estate - construction and development

672,155



631,504



624,595



550,189



486,858


Real estate - commercial and farmland

1,640,411



1,636,654



1,535,439



1,558,882



1,519,002


Real estate - residential

1,245,370



1,080,028



1,009,461



969,289



857,069


Consumer installment

375,722



316,363



324,511



189,109



148,666


Total legacy loans

$

5,380,515



$

5,051,986



$

4,856,514



$

4,574,678



$

4,230,228


Purchased loans










Commercial, financial and agricultural

$

397,517



$

64,612



$

74,378



$

80,895



$

87,612


Real estate - construction and development

268,443



48,940



65,513



68,583



73,567


Real estate - commercial and farmland

1,428,490



465,870



468,246



500,169



510,312


Real estate - residential

679,205



236,453



250,539



264,312



275,504


Consumer installment

38,855



2,712



2,919



3,167



3,504


Total purchased loans

$

2,812,510



$

818,587



$

861,595



$

917,126



$

950,499


Purchased loan pools










Real estate - residential

$

297,509



$

319,598



$

328,246



$

465,218



$

490,114


Total purchased loan pools

$

297,509



$

319,598



$

328,246



$

465,218



$

490,114


Total loan portfolio










Commercial, financial and agricultural

$

1,844,374



$

1,452,049



$

1,436,886



$

1,388,104



$

1,306,245


Real estate - construction and development

940,598



680,444



690,108



618,772



560,425


Real estate - commercial and farmland

3,068,901



2,102,524



2,003,685



2,059,051



2,029,314


Real estate - residential

2,222,084



1,636,079



1,588,246



1,698,819



1,622,687


Consumer installment

414,577



319,075



327,430



192,276



152,170


Total loans

$

8,490,534



$

6,190,171



$

6,046,355



$

5,957,022



$

5,670,841












Troubled Debt Restructurings (excluding purchased loans)










Accruing troubled debt restructurings










Commercial, financial and agricultural

$

38



$

39



$

41



$

44



$

40


Real estate - construction and development

150



176



417



424



429


Real estate - commercial and farmland

4,531



4,606



4,680



4,769



4,859


Real estate - residential

6,299



6,547



6,199



7,209



6,829


Consumer installment

5



7



5



6



12


Total accruing troubled debt restructurings

$

11,023



$

11,375



$

11,342



$

12,452



$

12,169


Nonaccrual troubled debt restructurings










Commercial, financial and agricultural

$

330



$

224



$

120



$

129



$

136


Real estate - construction and development

30



7



34



34



34


Real estate - commercial and farmland

196



2,127



204



210



192


Real estate - residential

709



838



1,508



1,212



1,975


Consumer installment

102



93



98



130



133


Total nonaccrual troubled debt restructurings

$

1,367



$

3,289



$

1,964



$

1,715



$

2,470


   Total troubled debt restructurings (excluding purchased loans)

$

12,390



$

14,664



$

13,306



$

14,167



$

14,639


 

 

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Loan Information (continued)

Table 5


Jun


Mar


Dec


Sep


Jun

(dollars in thousands)

2018


2018


2017


2017


2017











Loans by Risk Grade










Legacy loans










Grade 1 - Prime credit

$

545,902



$

557,625



$

554,979



$

510,262



$

490,514


Grade 2 - Strong credit

660,495



673,591



688,481



692,217



631,141


Grade 3 - Good credit

2,211,703



2,050,717



2,033,979



2,003,173



1,875,308


Grade 4 - Satisfactory credit

1,820,884



1,676,308



1,487,781



1,277,969



1,147,786


Grade 5 - Fair credit

52,069



17,499



16,996



14,977



15,386


Grade 6 - Other assets especially mentioned

38,150



39,795



30,075



36,143



32,871


Grade 7 - Substandard

51,305



36,444



44,216



39,930



37,116


Grade 8 - Doubtful

7



7



7



7



106


Grade 9 - Loss










Total legacy loans

$

5,380,515



$

5,051,986



$

4,856,514



$

4,574,678



$

4,230,228


Purchased loans










Grade 1 - Prime credit

$

55,183



$

3,808



$

3,964



$

4,039



$

5,959


Grade 2 - Strong credit

139,683



97,448



101,098



107,097



39,391


Grade 3 - Good credit

449,317



243,730



259,872



275,855



327,449


Grade 4 - Satisfactory credit

1,908,143



367,997



385,080



411,776



459,903


Grade 5 - Fair credit

135,281



20,012



19,736



19,859



22,058


Grade 6 - Other assets especially mentioned

45,095



33,705



37,121



50,696



41,869


Grade 7 - Substandard

79,808



51,887



54,724



47,804



53,870


Grade 8 - Doubtful










Grade 9 - Loss










Total purchased loans

$

2,812,510



$

818,587



$

861,595



$

917,126



$

950,499


Purchased loan pools










Grade 3 - Good credit

$

295,312



$

318,696



$

327,342



$

464,303



$

489,196


Grade 7 - Substandard

2,197



902



904



915



918


Total purchased loan pools

$

297,509



$

319,598



$

328,246



$

465,218



$

490,114


 

 

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Average Balances



Table 6


Three Months Ended


Six Months Ended


Jun


Mar


Dec


Sep


Jun


Jun


Jun

(dollars in thousands)

2018


2018


2017


2017


2017


2018


2017















Earning Assets














Federal funds sold

$

203



$

9



$

3



$



$



$

107



$


Interest-bearing deposits in banks

151,332



147,481



184,287



109,266



121,810



151,691



134,527


Time deposits in other banks

254











128




Investment securities - taxable

839,772



777,310



759,253



760,907



766,375



808,714



763,130


Investment securities - nontaxable

26,626



48,455



58,858



60,862



63,210



37,480



64,286


Other investments

42,384



34,654



32,706



42,687



37,375



38,662



37,383


Loans held for sale

141,875



138,129



138,468



126,798



110,933



140,012



94,368


Loans

5,198,301



4,902,082



4,692,997



4,379,082



3,994,213



5,051,742



3,838,324


Purchased loans

1,107,184



842,509



888,854



937,595



973,521



974,846



1,004,252


Purchased loan pools

310,594



325,113



446,677



475,742



516,949



317,813



530,480


Total Earning Assets

$

7,818,525



$

7,215,742



$

7,202,103



$

6,892,939



$

6,584,386



$

7,521,195



$

6,466,750
















Deposits














Noninterest-bearing deposits

$

1,973,910



$

1,780,738



$

1,805,996



$

1,654,467



$

1,615,001



$

1,877,858



$

1,609,777


NOW accounts

1,311,952



1,337,718



1,301,628



1,201,151



1,154,364



1,324,764



1,161,924


MMDA

1,950,601



1,970,571



1,964,437



1,682,306



1,621,487



1,960,531



1,554,601


Savings accounts

295,326



278,080



273,979



278,991



278,666



286,750



273,731


Retail CDs < $100,000

475,965



422,771



433,303



437,641



441,556



449,515



442,868


Retail CDs $100,000 and over

585,632



593,635



592,916



582,598



560,320



589,611



538,956


Brokered CDs

14,132











7,105




Total Deposits

6,607,518



6,383,513



6,372,259



5,837,154



5,671,394



6,496,134



5,581,857


Non-Deposit Funding