AMERIS BANCORP ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS

Highlights of the Company's results for the full year 2022 include the following:

• Net income of $346.5 million, or $4.99 per diluted share
• Growth in tangible book value⁽¹⁾ of $3.66 per share, or 13.9%, to $29.92 at December 31, 2022
• Improvement in net interest margin of 44bps, from 3.32% for 2021 to 3.76% for 2022
• Growth in total revenue of $64.6 million, or 6.3%, to $1.09 billion this year
• Adjusted efficiency ratio⁽¹⁾ of 52.54%, compared with 55.00% last year
• Organic growth in loans of $3.51 billion, or 22.1%
• Growth in TCE ratio⁽¹⁾ of 62bps, or 7.7%, to 8.67% at December 31, 2022
• Growth in noninterest-bearing deposits, representing 40.74% of total deposits, from 39.54% a year ago

Significant items from the Company's results for the fourth quarter of 2022 include the following:

• Net income of $82.2 million, or $1.18 per diluted share
• Growth in tangible book value⁽¹⁾ of $1.30 per share, or 18.0% annualized, to $29.92 at December 31, 2022
• Improvement in net interest margin of 6bps, from 3.97% last quarter to 4.03% this quarter
• Growth in net interest income of $11.2 million, or 5.2%, to $224.1 million for the fourth quarter of 2022
• Adjusted return on average assets⁽¹⁾ of 1.32%
• Adjusted return on average tangible common equity⁽¹⁾ of 15.78%

ATLANTA, Jan. 26, 2023 /PRNewswire/ -- Ameris Bancorp (Nasdaq: ABCB) (the "Company") today reported net income of $82.2 million, or $1.18 per diluted share, for the quarter ended December 31, 2022, compared with $81.9 million, or $1.18 per diluted share, for the quarter ended December 31, 2021. The Company reported adjusted net income⁽¹⁾ of $81.1 million, or $1.17 per diluted share, for the quarter ended December 31, 2022, compared with $81.5 million, or $1.17 per diluted share, for the same period in 2021. Adjusted net income excludes after-tax merger and conversion charges, natural disaster and pandemic expenses, servicing right valuation adjustments, gain on bank owned life insurance ("BOLI") proceeds, gain/loss on sale of mortgage servicing rights ("MSR") and gain/loss on sale of bank premises.

For the year ended December 31, 2022, the Company reported net income of $346.5 million, or $4.99 per diluted share, compared with $376.9 million, or $5.40 per diluted share, for 2021.  The Company reported adjusted net income⁽¹⁾ of $329.4 million, or $4.75 per diluted share, for the year ended December 31, 2022, compared with $368.7 million, or $5.29 per diluted share, for 2021.  Adjusted net income for the year excludes the same items listed above for the fourth quarter. 

Commenting on the Company's results, Palmer Proctor, the Company's Chief Executive Officer, said, "The strong financial results we are reporting today are a direct result of our team's continued focus and discipline.  The fourth quarter was another strong quarter where we grew tangible book value, expanded the margin, protected our balance sheet and improved our efficiency ratio.  The additional provision for credit losses we recorded this quarter is attributable to loan growth and the economic forecast and strengthens our position as we move into 2023.  Despite forecasted challenging economic conditions and potential market volatility, we are well positioned for 2023 as we focus on core fundamentals in our strong Southeastern markets."

Increase in Net Interest Income and Net Interest Margin

Net interest income on a tax-equivalent basis for 2022 increased to $804.9 million, compared with $659.9 million for 2021. The Company's net interest margin was 3.76% for 2022, an increase from 3.32% reported for 2021. The Company recorded accretion expense of $285,000 for 2022, compared with accretion income of $16.3 million for 2021. The increase in net interest margin is primarily attributable to deployment of excess liquidity in the loan and securities portfolios during the year, along with the rising interest rate environment.

Net interest income on a tax-equivalent basis (TE) grew to $225.1 million in the fourth quarter of 2022, an increase of $11.2 million, or 5.2%, from last quarter and $57.2 million, or 34.1%, compared with the fourth quarter of 2021.  The Company's net interest margin improved to 4.03% for the fourth quarter of 2022, up from 3.97% reported for the third quarter of 2022 and 3.18% reported for the fourth quarter of 2021. 

Yields on earning assets increased 54 basis points during the quarter to 4.91%, compared with 4.37% in the third quarter of 2022, and increased 152 basis points from 3.39% in the fourth quarter of 2021.  Yields on loans increased to 5.07% during the fourth quarter of 2022, compared with 4.62% for the third quarter of 2022 and 4.26% for the fourth quarter of 2021. In addition, the Company incurred net accretion expense in the fourth quarter of $315,000, compared with $597,000 in the third quarter of 2022 and accretion income of $2.8 million for the fourth quarter of 2021.

Loan production in the banking division during the fourth quarter of 2022 was $612.9 million, with weighted average yields of 7.92%, compared with $1.12 billion and 6.26%, respectively, in the third quarter of 2022 and $1.15 billion and 3.35%, respectively, in the fourth quarter of 2021.  Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to an additional $3.6 billion during the fourth quarter of 2022, with weighted average yields of 6.06%, compared with $4.6 billion and 5.29%, respectively, during the third quarter of 2022 and $5.5 billion and 3.43%, respectively, during the fourth quarter of 2021.   

The Company's total cost of funds was 0.94% in the fourth quarter of 2022, an increase of 52 basis points compared with the third quarter of 2022.  Deposit costs increased 39 basis point during the fourth quarter of 2022 to 0.68%, compared with 0.29% in the third quarter of 2022.  Costs of interest-bearing deposits increased during the quarter from 0.49% in the third quarter of 2022 to 1.17% in the fourth quarter of 2022, reflecting deposit pricing adjustments made at the end of the third quarter and during the fourth quarter.

Noninterest Income

Noninterest income decreased $17.0 million, or 26.0%, in the fourth quarter of 2022 to $48.3 million, compared with $65.3 million for the third quarter of 2022, primarily as a result of decreased mortgage banking activity, which declined by $17.5 million, or 43.4%, to $22.9 million in the fourth quarter of 2022, compared with $40.4 million for the third quarter of 2022.  Gain on sale spreads decreased to 1.26% in the fourth quarter of 2022 from 2.10% for the third quarter of 2022. Total production in the retail mortgage division decreased to $947.3 million in the fourth quarter of 2022, compared with $1.26 billion for the third quarter of 2022. The retail mortgage open pipeline was $507.1 million at the end of the fourth quarter of 2022, compared with $520.0 million at September 30, 2022.  Mortgage banking activity included a $1.3 million recovery of servicing right impairment and a $316,000 loss on sale of MSR recorded in the third quarter of 2022, compared with a $1.7 million gain on sale of MSR for the fourth quarter of 2022. 

For the full year 2022, noninterest income decreased $81.1 million, or 22.2%, to $284.4 million, compared with $365.5 million for 2021, primarily as a result of decreased mortgage banking activity, which declined by $101.0 million, or 35.3%, to $184.9 million in 2022, compared with $285.9 million in 2021.  Production in the retail mortgage division decreased to $5.5 billion in 2022, compared with $8.9 billion in 2021, while gain on sale spreads narrowed to 2.27% in 2022 from 3.31% in 2021.  Other noninterest income increased $21.1 million, or 70.7%, to $50.9 million for 2022, compared with $29.8 million for 2021, primarily as a result of an $18.1 million increase in noninterest income in our equipment finance division of the bank.  Also contributing to the increase were increases of $1.9 million in both BOLI income and swap fee income.

Noninterest Expense

Noninterest expense decreased $4.5 million, or 3.2%, to $135.1 million during the fourth quarter of 2022, compared with $139.6 million for the third quarter of 2022.  During the fourth quarter of 2022, the Company recorded merger and conversion charges of $235,000, compared with natural disaster and pandemic charges of $151,000 during the third quarter of 2022.  Excluding those charges, adjusted expenses⁽¹⁾ decreased approximately $4.6 million, or 3.3%, to $134.8 million in the fourth quarter of 2022, from $139.4 million in the third quarter of 2022.  The decrease in adjusted expenses⁽¹⁾ resulted from a $7.3 million decline in mortgage expenses related to reduced production, offset by a $3.0 million increase in the banking division, the majority of which was related to compensation, incentives and benefits.  Management continues to deliver high performing operating efficiency, as the adjusted efficiency ratio⁽¹⁾ decreased to 49.92% in the fourth quarter of 2022, compared with 50.06% in the third quarter of 2022.

For the full year 2022, noninterest expense increased $531,000 to $560.7 million, compared with $560.1 million in 2021. During 2022, the Company recorded $1.3 million of charges to earnings, the majority of which related to merger and conversion charges, compared with $4.7 million in charges in 2021 that were principally related to merger and conversion charges. Excluding these charges, adjusted expenses increased $3.9 million, or 0.7%, to $559.3 million in 2022, from $555.4 million in 2021. This increase is primarily attributable to expansion of our equipment finance division in December 2021, partially offset by a reduction in variable expenses related to mortgage production.

Income Tax Expense

The Company's effective tax rate for 2022 was 23.5%, compared with 24.0% in 2021.  The Company's effective tax rate for the fourth quarter of 2022 was 21.3%, compared with 23.6% in the third quarter of 2022.  The decreased rate for the fourth quarter of 2022 was primarily a result of the impact of state rates applied to the Company's deferred tax asset.

Balance Sheet Trends

Total assets at December 31, 2022 were $25.05 billion, compared with $23.86 billion at December 31, 2021.  The Company has improved the earning asset mix through a shift in reinvestment of excess liquidity to the securities portfolio and loans held for investment. Debt securities available-for-sale increased $907.4 million, or 153.1%, from $592.6 million at December 31, 2021 to $1.50 billion at December 31, 2022.  Loans, net of unearned income, increased $3.98 billion, or 25.1%, to $19.86 billion at December 31, 2022, compared with $15.87 billion at December 31, 2021.  Organic loan growth in the fourth quarter of 2022 was $576.1 million, or 12.3% annualized, which was diversified across the portfolio, including commercial and industrial, residential mortgages, construction and mortgage warehouse.  The Company purchased approximately $472 million of cash value life insurance secured loans during the fourth quarter of 2022, complementing our existing offerings of this product.  Loans held for sale decreased $862.6 million from $1.25 billion at December 31, 2021 to $392.1 million at December 31, 2022 due to a decline in mortgage activity resulting from the rising rate environment.

At December 31, 2022, total deposits amounted to $19.46 billion, or 90.7% of total funding, compared with $19.67 billion and 95.8%, respectively, at December 31, 2021.  At December 31, 2022, noninterest-bearing deposit accounts were $7.93 billion, or 40.7% of total deposits, compared with $7.77 billion, or 39.5% of total deposits, at December 31, 2021.  Non-rate sensitive deposits (including noninterest-bearing, NOW and savings) totaled $12.80 billion at December 31, 2022, compared with $12.52 billion at December 31, 2021.  These funds represented 65.7% of the Company's total deposits at December 31, 2022, compared with 63.6% at the end of 2021, which continues to positively impact the cost of funds sensitivity in a rising rate environment.

Shareholders' equity at December 31, 2022 totaled $3.20 billion, an increase of $230.9 million, or 7.8%, from December 31, 2021.  The increase in shareholders' equity was primarily the result of earnings of $346.5 million during 2022, partially offset by dividends declared, share repurchases and the impact to other comprehensive income resulting from rising rates on our investment portfolio.  Tangible book value per share⁽¹⁾ increased $1.30 per share, or 18.0% annualized, during the fourth quarter to $29.92 at December 31, 2022.  The Company recorded an improvement of $0.06 per share of tangible book value⁽¹⁾ this quarter from other comprehensive income related to the decrease in net unrealized losses on the securities portfolio.  For the year-to-date period, tangible book value per share⁽¹⁾ increased $3.66, or 13.9%, to $29.92 at December 31, 2022, compared with $26.26 at December 31, 2021.  Tangible common equity as a percentage of tangible assets was 8.67% at December 31, 2022, compared with 8.05% at the end of 2021.

Credit Quality

Credit quality remains strong in the Company.  During the fourth quarter of 2022, the Company recorded a provision for credit losses of $32.9 million, compared with a provision of $17.7 million in the third quarter of 2022.  The fourth quarter provision was primarily attributable to loan growth of $1.05 billion during the quarter, the updated economic forecast and the related impacts to unfunded commitments.  Nonperforming assets as a percentage of total assets increased six basis points to 0.61% during the quarter.  Approximately $69.6 million, or 45.3%, of the nonperforming assets at December 31, 2022 were GNMA-guaranteed mortgage loans, which have minimal loss exposure.  Excluding these government-guaranteed loans, nonperforming assets as a percentage of total assets were only 0.34% at December 31, 2022, compared with 0.32% at September 30, 2022.   The net charge-off ratio was eight basis points for the fourth quarter of 2022, compared with 11 basis points in the third quarter of 2022 and a net recovery of one basis point in the fourth quarter of 2021.

Conference Call

The Company will host a teleconference at 9:00 a.m. Eastern time on Friday, January 27, 2023, to discuss the Company's results and answer appropriate questions. The conference call can be accessed by dialing 1-844-200-6205 (or 1-929-526-1599 for international participants).  The conference call access code is 929912.  A replay of the call will be available one hour after the end of the conference call until February 10, 2023.  To listen to the replay, dial 1-866-813-9403.  The conference replay access code is 597631.  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.

⁽¹⁾Considered non-GAAP financial measure - See reconciliation of GAAP to non-GAAP financial measures in tables 9A - 9D

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; 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, 2021 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