AMERIS BANCORP ANNOUNCES FINANCIAL RESULTS FOR THIRD QUARTER 2023

Highlights of Ameris's results for the third quarter of 2023 include the following:

• Net income of $80.1 million, or $1.16 per diluted share
• Return on average assets ("ROA") of 1.25%
• Pre-tax, pre-provision net revenue (PPNR) ROA⁽¹⁾ of 2.01%
• Growth in tangible book value⁽¹⁾ of $0.96 per share, or 12.2% annualized, to $32.38 at September 30, 2023
• Increase in the allowance for credit losses to 1.44% of loans, from 1.33% at June 30, 2023, due to forecasted economic conditions, particularly related to commercial real estate price levels
• Adjusted efficiency ratio⁽¹⁾ of 52.02%, compared with 53.41% in the second quarter of 2023
• Nonperforming portfolio assets, excluding government-guaranteed loans, as a percentage of total assets improved three basis points to 0.27% at September 30, 2023, compared with 0.30% at June 30, 2023
• Net interest margin of 3.54% for the third quarter of 2023
• Cyclical decline in loans of $270.7 million, with the loan to deposit ratio improving to 98%
• Growth in total deposits of $147.2 million, or 2.9% annualized
• TCE ratio⁽¹⁾ of 9.11%, compared with 8.80% at June 30, 2023 and 8.75% one year ago

ATLANTA, Oct. 26, 2023 /PRNewswire/ -- Ameris Bancorp (Nasdaq: ABCB) (the "Company") today reported net income of $80.1 million, or $1.16 per diluted share, for the quarter ended September 30, 2023, compared with $92.6 million, or $1.34 per diluted share, for the quarter ended September 30, 2022.

For the year-to-date period ending September 30, 2023, the Company reported net income of $203.2 million, or $2.94 per diluted share, compared with $264.3 million, or $3.81 per diluted share, for the same period in 2022. The year-to-date period ending September 30, 2023 included a provision for credit losses of $119.7 million, compared with $38.8 million for the same period in 2022.  The year-to-date period ending September 30, 2022 included a recovery of servicing right impairment of $21.8 million, with no such recovery in the same period in 2023.

Commenting on the Company's results, Palmer Proctor, the Company's Chief Executive Officer, said, "We are proud of another strong quarter, highlighted by core fundamentals and capital growth, which will continue to serve us well as we move into 2024.  The profitability of our Company remains solid with an ROA of 1.25%, PPNR ROA of over 2%, net interest margin of 3.54% and efficiency ratio of just over 52%.  We grew core deposits, tangible book value and improved our allowance for loan loss coverage ratio, all of which strengthened our balance sheet during the quarter.  All of these things, combined with our focus on controlled growth, position us well for the remainder of 2023 and moving into 2024."

Net Interest Income and Net Interest Margin
Net interest income on a tax-equivalent basis (TE) was $208.7 million in the third quarter of 2023, a decrease of $1.8 million, or 0.8%, from last quarter and $5.2 million, or 2.4%, compared with the third quarter of 2022.  The Company's net interest margin was 3.54% for the third quarter of 2023, down from 3.60% reported for the second quarter of 2023 and 3.97% reported for the third quarter of 2022. The decrease in net interest margin this quarter is primarily attributable to rising deposit costs in the current interest rate environment.

Yields on earning assets increased ten basis points during the quarter to 5.62%, compared with 5.52% in the second quarter of 2023, and increased 125 basis points from 4.37% in the third quarter of 2022.  Yields on loans increased to 5.81% during the third quarter of 2023, compared with 5.66% for the second quarter of 2023 and 4.62% for the third quarter of 2022.

Loan production in the banking division during the third quarter of 2023 was $621.0 million, with weighted average yields of 9.49%, compared with $544.3 million and 9.35%, respectively, in the second quarter of 2023 and $1.12 billion and 6.26%, respectively, in the third quarter of 2022.  Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to an additional $4.2 billion during the third quarter of 2023, with weighted average yields of 7.28%, compared with $4.7 billion and 6.83%, respectively, during the second quarter of 2023 and $4.6 billion and 5.29%, respectively, during the third quarter of 2022.   

The Company's total cost of funds was 2.24% in the third quarter of 2023, an increase of 19 basis points compared with the second quarter of 2023.  Deposit costs increased 24 basis points during the third quarter of 2023 to 2.00%, compared with 1.76% in the second quarter of 2023.  Costs of interest-bearing deposits increased during the quarter from 2.64% in the second quarter of 2023 to 2.97% in the third quarter of 2023, reflecting a shift in mix to CDs and money market accounts in the rising rate environment.

Noninterest Income
Noninterest income decreased $4.2 million, or 6.2%, in the third quarter of 2023 to $63.2 million, compared with $67.3 million for the second quarter of 2023, primarily as a result of decreased mortgage banking activity, which decreased by $4.5 million, or 10.9%, to $36.3 million in the third quarter of 2023, compared with $40.7 million for the second quarter of 2023.  Gain on sale spreads decreased slightly to 2.15% in the third quarter of 2023 from 2.18% for the second quarter of 2023. Total production in the retail mortgage division decreased $157.2 million, or 11.8%, to $1.18 billion in the third quarter of 2023, compared with $1.33 billion for the second quarter of 2023. The retail mortgage open pipeline was $623.9 million at the end of the third quarter of 2023, compared with $652.1 million for the second quarter of 2023.  Other noninterest income decreased $749,000, or 5.2%, to $13.6 million in the third quarter of 2023, compared with $14.3 million for the second quarter of 2023, primarily resulting from a decrease in gain on debt redemption of $905,000. 

Noninterest Expense
Noninterest expense decreased $7.0 million, or 4.7%, to $141.4 million during the third quarter of 2023, compared with $148.4 million for the second quarter of 2023. The decrease in noninterest expense was driven by a decrease in problem loan expense of $2.2 million, a $1.0 million decrease in FDIC insurance costs, a $1.4 million decrease in legal and professional fees, a $1.1 million decrease in fraud/forgery and litigation resolution expenses and a decrease in variable compensation related to mortgage production of $965,000.  Management continues to focus on operating efficiency, and the adjusted efficiency ratio⁽¹⁾ decreased to 52.02% in the third quarter of 2023, compared with 53.41% in the second quarter of 2023.

Income Tax Expense
The Company's effective tax rate for the third quarter of 2023 was 23.7%, compared with 24.5% for the second quarter of 2023.  The decreased rate for the third quarter of 2023 was primarily a result of decreased permanent differences related to nondeductible compensation and FDIC insurance premiums, compared with the second quarter of 2023.

Balance Sheet Trends
Total assets at September 30, 2023 were $25.70 billion, compared with $25.05 billion at December 31, 2022.  Cash and cash equivalents increased 38.2% to $1.55 billion at September 30, 2023, compared with $1.12 billion at December 31, 2022.  Debt securities available-for-sale decreased to $1.42 billion, compared with $1.50 billion at December 31, 2022.  Loans, net of unearned income, increased $345.8 million, or 2.3% annualized, to $20.20 billion at September 30, 2023, compared with $19.86 billion at December 31, 2022. Loans held for sale decreased slightly to $381.5 million at September 30, 2023 from $392.1 million at December 31, 2022.

Investment securities decreased to $1.57 billion, or 6.6% of earning assets at the end of the third quarter of 2023, compared with $1.63 billion, or 7.2% of earning assets at December 31, 2022.  The Company did not deploy excess liquidity into the securities portfolio until after rates began rising during 2022; as a result, the unrealized loss position in the Company's available-for-sale securities portfolio remains modest at just 5.2% of the portfolio.

At September 30, 2023, total deposits amounted to $20.59 billion, compared with $19.46 billion at December 31, 2022.  During the third quarter of 2023, deposits grew $147.2 million, with money market and savings accounts increasing $359.6 million and retail CDs increasing $156.8 million, with such increases offset in part by a $117.3 million decrease in noninterest bearing accounts and a $252.9 million decrease in interest bearing demand accounts.  Due to the increased interest rate environment, the Company continued to see the shift of customer deposits from noninterest bearing accounts into interest bearing accounts, such that at September 30, 2023, noninterest bearing deposit accounts represented $6.59 billion, or 32.0% of total deposits, compared with $7.93 billion, or 40.7% of total deposits, at December 31, 2022.  

During the third quarter of 2023, utilizing existing liquidity, the Company reduced borrowings with the FHLB by $325.0 million and redeemed, at a discount, $2.5 million in principal amount of its 4.25% Fixed-to-Floating Rate Subordinated Notes Due 2029.

Shareholders' equity at September 30, 2023 totaled $3.35 billion, an increase of $149.7 million, or 4.7%, from December 31, 2022.  The increase in shareholders' equity was primarily the result of earnings of $203.2 million during the first nine months of 2023, partially offset by dividends declared, share repurchases and an increase in other comprehensive loss of $14.3 million resulting from changes in interest rates on the Company's investment portfolio.  Tangible book value per share⁽¹⁾ increased $2.46 per share, or 11.0% annualized, during the first nine months of 2023 to $32.38 at September 30, 2023.  The Company recorded dilution of $0.21 per share, or 0.7%, to tangible book value⁽¹⁾ from other comprehensive loss related to the increase in net unrealized losses on the securities portfolio during this same period.  Tangible common equity as a percentage of tangible assets was 9.11% at September 30, 2023, compared with 8.67% at the end of 2022.

Credit Quality
Credit quality remains strong in the Company.  During the third quarter of 2023, the Company recorded a provision for credit losses of $24.5 million, compared with a provision of $45.5 million in the second quarter of 2023.  The third quarter provision was primarily attributable to the updated economic forecast, partially offset by a decline in loans of $270.7 million during the quarter.  Nonperforming assets as a percentage of total assets were up one basis point to 0.58% during the quarter.  Approximately $80.8 million, or 53.9%, of the nonperforming assets at September 30, 2023 were GNMA-guaranteed mortgage loans, which have minimal loss exposure.  Excluding these government-guaranteed loans, nonperforming assets as a percentage of total assets improved three basis points to 0.27% at September 30, 2023, compared with 0.30% at the second quarter of 2023. The net charge-off ratio was 23 basis points for the third quarter of 2023, compared with 28 basis points in the second quarter of 2023.

Share Repurchase Program
The Company's board of directors, on October 26, 2023, 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, 2024, 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 $13.5 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 27, 2023, to discuss the Company's results and answer appropriate questions. The conference call can be accessed by dialing 1-877-317-6789.  The conference call ID is Ameris Bancorp.  A replay of the call will be available one hour after the end of the conference call until November 10, 2023.  To listen to the replay, dial 1-877-344-7529.  The conference replay access code is 1921240.  The financial information discussed will also be available on the Investor Relations page of the Ameris Bank website at ir.amerisbank.com.

About Ameris Bancorp
Ameris Bancorp is a bank holding company headquartered in Atlanta, Georgia.  The Company's banking subsidiary, Ameris Bank, had 164 locations in Georgia, Alabama, Florida, North Carolina 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"). 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 cost savings and any revenue synergies expected to result from acquisition transactions, which may not be fully realized within the expected timeframes if at all; 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, 2022 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.

SOURCE Ameris Bancorp