Ameris Bancorp(ABCB) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents Ameris Bancorp's unaudited consolidated financial statements, including balance sheets, income statements, and cash flows, with detailed explanatory notes Consolidated Financial Statements Consolidated financial statements reveal increased total assets and net income for Q2 and YTD 2025, driven by loan growth and improved net interest income Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $26,680,153 | $26,262,050 | | Loans, net | $20,699,930 | $20,401,822 | | Total Deposits | $21,932,675 | $21,722,448 | | Total Liabilities | $22,762,475 | $22,510,528 | | Total Shareholders' Equity | $3,917,678 | $3,751,522 | Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $231,813 | $211,921 | $453,652 | $413,309 | | Provision for Credit Losses | $2,772 | $18,773 | $24,664 | $39,878 | | Noninterest Income | $68,911 | $88,711 | $132,934 | $154,589 | | Noninterest Expense | $155,260 | $155,357 | $306,294 | $304,068 | | Net Income | $109,834 | $90,785 | $197,769 | $165,097 | | Diluted EPS | $1.60 | $1.32 | $2.87 | $2.39 | Consolidated Cash Flow Highlights - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $178,224 | $(78,482) | | Net cash used in investing activities | $(461,961) | $(870,449) | | Net cash provided by financing activities | $233,630 | $1,143,821 | | Net (decrease) increase in cash and cash equivalents | $(50,107) | $194,890 | Notes to Unaudited Consolidated Financial Statements Detailed notes explain accounting policies, investment and loan portfolio composition, credit quality, and segment performance supporting the financial statements - The company operates through its subsidiary, Ameris Bank, with 164 branches across Georgia, Alabama, Florida, North Carolina, and South Carolina, offering a full range of banking services[29] Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Commercial and industrial | $3,184,211 | $2,953,135 | | Real estate – commercial and farmland | $8,877,750 | $8,445,958 | | Real estate – residential | $4,460,177 | $4,558,497 | | Real estate – construction and development | $1,485,842 | $1,998,506 | | Premium finance | $1,294,293 | $1,155,614 | | Mortgage warehouse | $1,092,475 | $965,053 | | Other | $646,749 | $663,143 | | Total Loans | $21,041,497 | $20,739,906 | Allowance for Credit Losses Activity - Six Months Ended June 30, 2025 (in thousands) | Description | Amount | | :--- | :--- | | Balance, December 31, 2024 | $338,084 | | Provision for loan losses | $19,629 | | Loans charged off | $(29,610) | | Recoveries of loans previously charged off | $13,464 | | Balance, June 30, 2025 | $341,567 | Segment Net Income - Six Months Ended June 30 (in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Banking Division | $148,348 | $101,695 | | Retail Mortgage Division | $28,431 | $47,033 | | Warehouse Lending Division | $10,743 | $8,642 | | Premium Finance Division | $10,247 | $7,727 | | Total Net Income | $197,769 | $165,097 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses improved financial performance in Q2 and H1 2025, driven by higher net interest income, reduced credit losses, and strong capital ratios Results of Operations Q2 2025 net income significantly increased due to higher tax-equivalent net interest income and a substantial reduction in the provision for credit losses Key Profitability Ratios - Q2 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Return on Average Assets | 1.65% | 1.41% | | Return on Average Shareholders' Equity | 11.40% | 10.34% | - Q2 2025 tax-equivalent net interest income increased by 9.33% YoY to $232.7 million, driven by downward pricing adjustments on deposits and growth in average earning assets[152] - The net interest margin expanded by 19 basis points to 3.77% in Q2 2025 from 3.58% in Q2 2024[152] - The provision for credit losses decreased significantly to $2.8 million in Q2 2025 from $18.8 million in Q2 2024, attributed to an updated economic forecast and changes in portfolio mix[157] Financial Condition Total assets and gross loans increased, credit quality improved with lower non-performing assets, and total deposits grew, maintaining a strong liquidity position - Gross loans outstanding (including loans held for sale) were $21.59 billion at June 30, 2025, a slight increase from $21.27 billion at December 31, 2024[184] - Non-performing assets as a percentage of total assets decreased by 11 basis points to 0.36% at June 30, 2025, from 0.47% at December 31, 2024[185][194] - Total deposits increased by 1.0% to $21.93 billion at June 30, 2025, with noninterest-bearing deposits growing by 4.7%[202] Commercial Real Estate (CRE) Concentration Ratios | Ratio to Tier I Capital + ACL | Internal Limit | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | :--- | | Construction and development loans | 100% | 45% | 63% | | Total CRE loans (excluding owner-occupied) | 300% | 261% | 268% | Capital and Liquidity The company maintains a strong capital position above regulatory minimums, continues its share repurchase program, and manages liquidity with significant borrowing capacity Regulatory Capital Ratios (Consolidated) | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | CET1 Ratio | 13.01% | 12.65% | | Tier 1 Capital Ratio | 13.01% | 12.65% | | Total Capital Ratio | 15.37% | 15.37% | | Tier 1 Leverage Ratio | 11.13% | 10.74% | - The company repurchased 465,872 shares for $27.8 million under its share repurchase program renewed on October 24, 2024. As of June 30, 2025, $72.2 million remained available for repurchase[204][229] - As of June 30, 2025, the company had available borrowing capacity of $3.36 billion with the FHLB and $2.24 billion with the FRB Discount Window[213] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company manages U.S. dollar interest rate risk through ALCO, projecting net interest income sensitivity to rate changes, with no foreign currency or commodity risk Projected % Change in Net Interest Income from Baseline (as of April 1, 2025) | Change in Interest Rates (bps) | 12 Months | 24 Months | | :--- | :--- | :--- | | +400 | 2.2% | 13.7% | | +200 | 1.4% | 7.4% | | +100 | 0.8% | 3.8% | | -100 | (0.7)% | (4.2)% | | -200 | (1.1)% | (8.8)% | - The company uses forward contracts and interest rate lock commitments (IRLCs) to economically hedge risks in its mortgage banking activities. It also enters into offsetting derivative agreements to facilitate client risk management strategies[216] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of the end of the period, the Company's disclosure controls and procedures were effective[222] - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025[223] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company faces ordinary course legal proceedings, with a notable consent order related to fair lending allegations in Jacksonville, FL, recently terminated and dismissed - On May 20, 2025, the U.S. District Court terminated a consent order from November 2023 with the Department of Justice concerning alleged fair lending law violations in Jacksonville, FL, dismissing the action with prejudice[116] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors disclosed in the 2024 Form 10-K have occurred[227] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, the company repurchased 212,472 shares under its $100.0 million program, with $72.2 million remaining available for future repurchases Share Repurchases - Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 25,600 | $58.39 | | May 2025 | 63,515 | $59.77 | | June 2025 | 123,357 | $61.20 | | Total | 212,472 | $60.44 | - The share repurchase program was replenished to $100.0 million in October 2024 and is authorized through October 31, 2025. As of June 30, 2025, $72.2 million remained available for repurchases[229] Other Items This section confirms no defaults on senior securities, no Rule 10b5-1 trading arrangement changes by officers, and lists report exhibits - There were no defaults upon senior securities during the period[230] - No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[232]