Ameris Bancorp(ABCB) - 2021 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements Presents Ameris Bancorp's unaudited consolidated financial statements, covering Balance Sheets, Income, Equity, and Cash Flows Consolidated Balance Sheets Total assets increased to $22.53 billion from $20.44 billion, driven by cash, with liabilities and equity also growing Consolidated Balance Sheets (Unaudited) | (dollars in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Assets | $22,533,141 | $20,438,638 | | Cash and cash equivalents | $3,752,440 | $2,117,306 | | Loans, net | $14,653,326 | $14,281,503 | | Goodwill | $928,005 | $928,005 | | Total Liabilities | $19,632,371 | $17,791,550 | | Total deposits | $18,833,489 | $16,957,823 | | Total Shareholders' Equity | $2,900,770 | $2,647,088 | Consolidated Statements of Income and Comprehensive Income Q3 2021 net income decreased to $81.7 million due to lower mortgage banking income; nine-month net income rose to $295.0 million from credit loss reversal Key Income Statement Data (Unaudited) | (dollars in thousands, except per share data) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $161,661 | $162,538 | $488,490 | $474,297 | | Provision for credit losses | $(9,675) | $17,682 | $(38,124) | $146,890 | | Noninterest income | $76,562 | $159,018 | $283,775 | $334,357 | | Noninterest expense | $137,196 | $153,692 | $421,755 | $447,513 | | Net income | $81,680 | $116,145 | $294,969 | $167,703 | | Diluted earnings per common share | $1.17 | $1.67 | $4.23 | $2.42 | Consolidated Statements of Shareholders' Equity Shareholders' equity increased from $2.65 billion to $2.90 billion, driven by net income, offset by dividends and share repurchases Changes in Shareholders' Equity (Nine Months Ended Sep 30, 2021) | (dollars in thousands) | Amount | | :--- | :--- | | Balance, December 31, 2020 | $2,647,088 | | Net income | $294,969 | | Dividends on common shares ($0.45 per share) | $(31,500) | | Purchase of treasury shares | $(8,108) | | Other comprehensive loss | $(11,620) | | Share-based compensation & option exercises | $9,448 | | Balance, September 30, 2021 | $2,900,770 | Consolidated Statements of Cash Flows Cash and cash equivalents increased by $1.64 billion, driven by financing activities, offsetting operating cash outflow Cash Flow Summary (Nine Months Ended Sep 30) | (dollars in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(257,553) | $379,362 | | Net cash provided by (used in) investing activities | $59,233 | $(1,710,005) | | Net cash provided by financing activities | $1,833,454 | $1,460,585 | | Net increase in cash and cash equivalents | $1,635,134 | $129,942 | | Cash and cash equivalents at beginning of period | $2,117,306 | $621,849 | | Cash and cash equivalents at end of period | $3,752,440 | $751,791 | Notes to Consolidated Financial Statements This section details accounting policies and financial data, covering presentation, investments, loans, fair value, segments, and contingencies - Ameris Bancorp is a financial holding company headquartered in Atlanta, Georgia, operating through its subsidiary, Ameris Bank. As of September 30, 2021, the Bank operated 165 branches across Georgia, Alabama, Florida, North Carolina, and South Carolina[24] - The financial statements are prepared in accordance with U.S. GAAP for interim financial information and reflect all normal recurring adjustments necessary for a fair presentation[25] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses financial condition and results for Q3 and nine months 2021 vs 2020, covering earnings, net interest income, credit quality, noninterest income/expense, and balance sheet Results of Operations (Q3 2021 vs. Q3 2020) Q3 2021 net income decreased to $81.7 million due to lower mortgage banking income, offset by reduced noninterest expense and credit loss reversal Q3 2021 vs Q3 2020 Performance | (in thousands, except per share data) | Q3 2021 | Q3 2020 | | :--- | :--- | :--- | | Net Income | $81,680 | $116,145 | | Diluted EPS | $1.17 | $1.67 | | Adjusted Net Income | $83,861 | $116,879 | | Adjusted Diluted EPS | $1.20 | $1.69 | - Net interest margin decreased to 3.22% in Q3 2021 from 3.64% in Q3 2020, attributed to a shift in asset mix to lower-yielding cash, despite disciplined deposit repricing[170] - Noninterest income fell by 51.9% to $76.6 million, mainly due to an $82.2 million (59.3%) decrease in mortgage banking activity income[176] - Noninterest expense decreased by 10.7% to $137.2 million, primarily from a $17.0 million reduction in salaries and benefits tied to lower mortgage production[178] Results of Operations (Nine Months 2021 vs. 2020) Nine-month net income rose to $295.0 million from $167.7 million, driven by a $38.1 million credit loss reversal Nine Months 2021 vs 2020 Performance | (in thousands, except per share data) | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | | Net Income | $294,969 | $167,703 | | Diluted EPS | $4.23 | $2.42 | | Adjusted Net Income | $287,155 | $198,507 | | Adjusted Diluted EPS | $4.12 | $2.86 | - The provision for credit losses was a reversal of $38.1 million for the first nine months of 2021, compared to a provision of $146.9 million in the same period of 2020, driven by an improved economic forecast[197] - Noninterest income decreased by 15.1% to $283.8 million, as a $53.7 million decline in mortgage banking income was partially offset by a recovery of mortgage servicing right impairment[198] Financial Condition Total assets reached $22.5 billion, with gross loans at $16.26 billion; credit loss allowance decreased to 1.15%, non-performing assets improved to 0.32%, maintaining strong capital - Gross loans (including held for sale) grew by $611.8 million to $16.26 billion at September 30, 2021, from December 31, 2020[213] - Non-performing assets as a percentage of total assets decreased to 0.32% at September 30, 2021, from 0.48% at December 31, 2020, due to lower nonaccrual loans and OREO balances[229] - COVID-19 related loan deferrals decreased significantly to $76.5 million (0.5% of total loans) as of September 30, 2021, down from $332.8 million (2.3% of total loans) at December 31, 2020[241][242] Regulatory Capital Ratios | Ratio | Consolidated (Sep 30, 2021) | Ameris Bank (Sep 30, 2021) | | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 9.32% | 10.80% | | CET1 Ratio | 11.74% | 13.59% | | Tier 1 Capital Ratio | 11.74% | 13.59% | | Total Capital Ratio | 15.31% | 14.60% | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is U.S. dollar interest rate risk, managed via simulation analysis with a 20% net interest income change limit for a 200 basis point rate shock - The Company's primary market risk exposure is U.S. dollar interest rate risk. It does not have trading instruments or exposure to foreign currency, commodity, or other market risks[263][264] - The Company uses simulation modeling to measure interest rate risk, with an acceptable risk level defined as net interest income changing no more than 20% given a 200 basis point interest rate change over a 24-month period[259] Controls and Procedures The CEO and CFO concluded disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control - The CEO and CFO evaluated the Company's disclosure controls and procedures and concluded they were effective as of the end of the period covered by this report[266] - No changes in internal control over financial reporting occurred during the quarter ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company's internal controls[266] PART II – OTHER INFORMATION Legal Proceedings The company is subject to various legal proceedings in the ordinary course of business, not expected to materially affect financial condition or results - The Company is subject to various legal proceedings and regulatory matters in the ordinary course of business, but management does not expect them to have a material adverse effect on the Company's financial condition or results[126][268] Risk Factors No material changes to risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020[269] Unregistered Sales of Equity Securities and Use of Proceeds During Q3 2021, the company repurchased 139,829 shares at $47.58 per share, with $79.2 million remaining for repurchase under the program extended through October 31, 2022 Issuer Purchases of Equity Securities (Q3 2021) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 2021 | 85,091 | $47.20 | | August 2021 | 53,093 | $48.17 | | September 2021 | 1,645 | $47.83 | | Total | 139,829 | $47.58 | - The share repurchase program, authorizing up to $100.0 million in repurchases, has been extended through October 31, 2022. As of September 30, 2021, $20.8 million worth of shares had been repurchased under the program[252][271] Defaults Upon Senior Securities None reported - None[272] Mine Safety Disclosures Not applicable - Not applicable[272] Other Information None reported - None[272] Exhibits This section lists exhibits filed with the report, including CEO and CFO certifications and XBRL data files - The report includes exhibits such as CEO and CFO certifications under Rule 13a-14(a)/15d-14(a) and Section 1350, as well as Inline XBRL documents[273]