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AMERIS BANCORP ANNOUNCES FINANCIAL RESULTS FOR FIRST QUARTER 2022

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·17 min read
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Highlights of the Company's results for the first quarter of 2022 include the following:

  • Net income of $81.7 million, or $1.17 per diluted share

  • Organic growth in loans of $269.5 million, or 6.8% annualized (and $350.7 million, or 8.9% annualized, exclusive of PPP loans), during 2022

  • Growth in tangible book value of $0.58 per share, or 2.2%, to $26.84 at March 31, 2022, compared with $26.26 at December 31, 2021

  • Less than 1% dilution in tangible book value from decrease in unrealized gain on available-for-sale securities

  • Improvement in net interest margin of 17bps, from 3.18% last quarter to 3.35% this quarter

  • Adjusted return on average assets of 1.31%

  • Adjusted return on average tangible common equity of 16.38%

  • Continued growth in noninterest bearing deposits, representing 40.18% of total deposits, up from 39.54% at December 31, 2021 and 38.07% a year ago

ATLANTA, April 26, 2022 /PRNewswire/ -- Ameris Bancorp (Nasdaq: ABCB) (the "Company") today reported net income of $81.7 million, or $1.17 per diluted share, for the quarter ended March 31, 2022, compared with $125.0 million, or $1.79 per diluted share, for the quarter ended March 31, 2021. The Company reported adjusted net income of $75.0 million, or $1.08 per diluted share, for the quarter ended March 31, 2022, compared with $115.7 million, or $1.66 per diluted share, for the same period in 2021. Adjusted net income excludes after-tax merger and conversion charges, servicing right valuation adjustments, gain on bank owned life insurance ("BOLI") proceeds and gain/loss on sale of bank premises.

Ameris Bancorp logo. (PRNewsFoto/Ameris Bancorp)
Ameris Bancorp logo. (PRNewsFoto/Ameris Bancorp)

Commenting on the Company's results, Palmer Proctor, the Company's Chief Executive Officer, said, "Solid first quarter results reflect our continued responsible organic growth initiatives. Despite challenging economic conditions and market volatility, we had annualized loan growth, excluding PPP, of 8.9%, our margin expanded by 17 basis points and we maintained our credit quality. We remain focused on tangible book value and have successfully avoided material negative impact on capital from the securities portfolio over this past interest rate cycle. Our results reflect the discipline of our team and the continued opportunities throughout our strong Southeastern footprint."

Net Interest Income and Net Interest Margin
Net interest income on a tax-equivalent basis (TE) continued to increase in the first quarter of 2022, to $173.6 million, compared with $167.9 million for the fourth quarter of 2021 and $166.2 million for the first quarter of 2021. The Company's net interest margin significantly improved to 3.35% for the first quarter of 2022, up from 3.18% reported for the fourth quarter of 2021 but less than 3.57% reported for the first quarter of 2021. Accretion income for the first quarter of 2022 decreased to $1.0 million, compared with $2.8 million for the fourth quarter of 2021 and $6.1 million for the first quarter of 2021.

Yields on loans increased to 4.37% during the first quarter of 2022, compared with 4.26% for the fourth quarter of 2021 and decreased from 4.53% for the first quarter of 2021. Contributing to interest income on loans for the first quarter of 2022 was $19.1 million of interest income on loans from the recent Balboa Capital acquisition, as well as $3.0 million of accelerated fee income on Paycheck Protection Program ("PPP") loan forgiveness, compared with $4.8 million and $8.2 million, respectively, in the fourth quarter of 2021. Loan production in the banking division during the first quarter of 2022 was $805.5 million, with weighted average yields of 5.17%, compared with $1.1 billion and 3.35%, respectively, in the fourth quarter of 2021 and $600.6 million and 3.80%, respectively, in the first quarter of 2021. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to an additional $4.7 billion during the first quarter of 2022, with weighted average yields of 3.63%, compared with $5.5 billion and 3.43%, respectively, during the fourth quarter of 2021 and $7.5 billion and 3.15%, respectively, during the first quarter of 2021.

Interest expense during the first quarter of 2022 decreased to $10.8 million, compared with $11.5 million in the fourth quarter of 2021, and $13.0 million in the first quarter of 2021. The decrease in interest expense was related to continued repricing of deposits as CDs mature and the repayment of remaining borrowings assumed from Balboa Capital in January 2022. The Company's total cost of funds moved one basis point lower to 0.22% in the first quarter of 2022 as compared with the fourth quarter of 2021. Deposit costs decreased one basis point during the first quarter of 2022 to 0.09%, compared with 0.10% in the fourth quarter of 2021. Costs of interest-bearing deposits decreased during the quarter from 0.16% in the fourth quarter of 2021 to 0.14% in the first quarter of 2022.

Noninterest Income
Noninterest income increased $5.1 million, or 6.3%, in the first quarter of 2022 to $86.9 million, compared with $81.8 million for the fourth quarter of 2021, primarily as a result of increased mortgage banking activity, which grew by $2.2 million, or 3.6%, to $62.9 million in the first quarter of 2022, compared with $60.7 million for the fourth quarter of 2021. Excluding the $9.7 million and $4.5 million recovery of servicing right impairment recorded in the first quarter of 2022 and fourth quarter of 2021, respectively, mortgage revenue decreased this quarter by $2.9 million, while expenses in the mortgage division decreased by $3.5 million, for an increased efficiency ratio within that division. Gain on sale spreads decreased to 2.94% in the first quarter of 2022 from 3.27% for the fourth quarter of 2021. Total production in the retail mortgage division decreased to $1.53 billion in the first quarter of 2022, compared with $1.82 billion for the fourth quarter of 2021. The retail mortgage open pipeline was $1.41 billion at the end of the first quarter of 2022, compared with $1.62 billion at December 31, 2021.

Service charge revenue decreased $726,000, or 6.2%, to $11.1 million in the first quarter of 2022, compared with $11.8 million for the fourth quarter of 2021, resulting from a cyclical decrease in volume that is historically lower in the first quarter each year. Other noninterest income increased $3.7 million, or 44.5%, in the first quarter of 2022 to $12.0 million, compared with $8.3 million for the fourth quarter of 2021, primarily as a result of a $2.6 million impact from the newly acquired Balboa Capital. Also contributing to the increase were increases in gains on sale of SBA loans of $761,000 and merchant fee income of $287,000.

Noninterest Expense
Noninterest expense increased $5.5 million, or 3.9%, to $143.8 million during the first quarter of 2022, compared with $138.4 million for the fourth quarter of 2021. During the first quarter of 2022, the Company recorded merger and conversion charges of $977,000 and a net gain of $6,000 related to bank premises, compared with a net gain on bank premises of $126,000 and merger and conversion charges of $4.0 million during the fourth quarter of 2021. Excluding these charges, adjusted expenses increased approximately $8.4 million, or 6.2%, to $142.8 million in the first quarter of 2022, from $134.5 million in the fourth quarter of 2021. The increase in adjusted expenses resulted from absorbing a full quarter of Balboa expenses (acquired in December 2021) and cyclical payroll tax and 401(k) expenses, partially offset by the decrease in mortgage banking expenses.

As shown in the table below, the Company continued to show discipline in noninterest expense control, as all other noninterest expenses increased less than 1%:


Three Months Ended




March 31, 2022


December 31, 2021


Change

Balboa Expenses

$ 8,475


$ 1,350


$ 7,125

Payroll Taxes

4,244


1,506


2,738

401(k) Matching Contributions

1,714


494


1,220

Mortgage Expenses

46,902


50,380


(3,478)

All Other Noninterest Expenses

81,514


80,742


772

Adjusted Noninterest Expense

$ 142,849


$ 134,472


$ 8,377

The additional cyclical payroll expenses caused the adjusted efficiency ratio to increase to 56.95% in the first quarter of 2022, compared with 54.85% in the fourth quarter of 2021.

Income Tax Expense
The Company's effective tax rate for the first quarter of 2022 was 25.3%, compared with 23.8% in the fourth quarter of 2021. The increased rate for the first quarter of 2022 was primarily a result of a discrete charge to the Company's state tax liability and an increase in nondeductible merger expenses in the first quarter of 2022.

Balance Sheet Trends
Total assets at March 31, 2022 were $23.56 billion, compared with $23.86 billion at December 31, 2021. Loans, net of unearned income, increased $269.5 million, or 6.8% annualized, to $16.14 billion at March 31, 2022, compared with $15.87 billion at December 31, 2021. As anticipated with seasonal mortgage activity, loans held for sale decreased $353.1 million from $1.25 billion at December 31, 2021 to $901.6 million at March 31, 2022. Loan production in the banking division during the first quarter of 2022 totaled $805.5 million, down 30% from the fourth quarter of 2021 and up 34% from the first quarter of 2021.

At March 31, 2022, total deposits amounted to $19.59 billion, or 97.3% of total funding, compared with $19.67 billion and 95.8%, respectively, at December 31, 2021. At March 31, 2022, noninterest-bearing deposit accounts were $7.87 billion, or 40.2% 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 $12.62 billion at March 31, 2022, compared with $12.52 billion at December 31, 2021. These funds represented 64.4% of the Company's total deposits at March 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 March 31, 2022 totaled $3.01 billion, an increase of $40.7 million, or 1.4%, from December 31, 2021. The increase in shareholders' equity was primarily the result of earnings of $81.7 million during the first quarter of 2022, partially offset by dividends declared, share repurchases and the impact to other comprehensive income resulting from rising rates on our investment portfolio. The Company repurchased 312,860 shares of the Company's common stock at a cost of $14.6 million during the first quarter of 2022. The Company recorded dilution of $0.25 per share, or less than 1%, to tangible book value this quarter from other comprehensive income related to the decrease in unrealized gains on the securities portfolio. Tangible book value per share was $26.84 at March 31, 2022, compared with $26.26 at December 31, 2021. Tangible common equity as a percentage of tangible assets was 8.32% at March 31, 2022, compared with 8.05% at the end of 2021.

Credit Quality
Credit quality remains strong in the Company. During the first quarter of 2022, the Company recorded a provision for credit losses of $6.2 million, compared with a provision of $2.8 million in the fourth quarter of 2021. This provision was primarily attributable to growth in unfunded commitments, partially offset by an improvement in expected credit losses on loans. Nonperforming assets as a percentage of total assets increased four basis points to 0.47% during the quarter. This increase was attributable to rebooked GNMA loans which the Company has the right, but not the obligation to repurchase. The net charge-off ratio was nine basis points for the first quarter of 2022, compared with negative one basis point in the fourth quarter of 2021 and 12 basis points in the first quarter of 2021.

Conference Call
The Company will host a teleconference at 9:00 a.m. Eastern time on Wednesday, April 27, 2022, 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 418399. A replay of the call will be available one hour after the end of the conference call until May 11, 2022. To listen to the replay, dial 1-866-813-9403. The conference replay access code is 542280. 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 165 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 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 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; the impact of the COVID-19 pandemic on the general economy, our customers and the allowance for loan losses; the benefits that may be realized by our customers from government assistance programs and regulatory actions related to the COVID-19 pandemic; the potential impact of the phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; 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.

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES











Financial Highlights

Table 1


Three Months Ended


Mar


Dec


Sep


Jun


Mar

(dollars in thousands except per share data)

2022


2021


2021


2021


2021

EARNINGS










Net income

$ 81,698


$ 81,944


$ 81,680


$ 88,327


$ 124,962

Adjusted net income

$ 75,039


$ 81,544


$ 83,861


$ 87,548


$ 115,746











COMMON SHARE DATA










Earnings per share available to common shareholders










Basic

$ 1.18


$ 1.18


$ 1.18


$ 1.27


$ 1.80

Diluted

$ 1.17


$ 1.18


$ 1.17


$ 1.27


$ 1.79

Adjusted diluted EPS

$ 1.08


$ 1.17


$ 1.20


$ 1.25


$ 1.66

Cash dividends per share

$ 0.15


$ 0.15


$ 0.15


$ 0.15


$ 0.15

Book value per share (period end)

$ 43.31


$ 42.62


$ 41.66


$ 40.66


$ 39.56

Tangible book value per share (period end)

$ 26.84


$ 26.26


$ 27.46


$ 26.45


$ 25.27

Weighted average number of shares










Basic

69,345,735


69,398,594


69,439,845


69,496,666


69,391,734

Diluted

69,660,990


69,738,426


69,756,135


69,791,670


69,740,860

Period end number of shares

69,439,084


69,609,228


69,635,435


69,767,209


69,713,426

Market data










High intraday price

$ 55.62


$ 56.64


$ 53.63


$ 59.85


$ 57.81

Low intraday price

$ 43.56


$ 46.20


$ 44.92


$ 47.44


$ 36.60

Period end closing price

$ 43.88


$ 49.68


$ 51.88


$ 50.63


$ 52.51

Average daily volume

471,858


350,119


392,533


429,233


460,744











PERFORMANCE RATIOS










Return on average assets

1.42%


1.41%


1.47%


1.64%


2.44%

Adjusted return on average assets

1.31%


1.40%


1.51%


1.63%


2.26%

Return on average common equity

11.06%


11.06%


11.27%


12.66%


18.80%

Adjusted return on average tangible common equity

16.38%


16.88%


17.65%


19.46%


27.66%

Earning asset yield (TE)

3.56%


3.39%


3.44%


3.58%


3.85%

Total cost of funds

0.22%


0.23%


0.24%


0.26%


0.30%

Net interest margin (TE)

3.35%


3.18%


3.22%


3.34%


3.57%

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

32.05%


31.31%


30.32%


33.78%


39.71%

Efficiency ratio

55.43%


55.66%


57.59%


54.07%


52.59%

Adjusted efficiency ratio (TE)

56.95%


54.85%


56.56%


54.07%


54.62%











CAPITAL ADEQUACY (period end)










Shareholders' equity to assets

12.76%


12.43%


12.87%


12.96%


12.87%

Tangible common equity to tangible assets

8.32%


8.05%


8.88%


8.83%


8.62%











EQUITY TO ASSETS RECONCILIATION










Tangible common equity to tangible assets

8.32%


8.05%


8.88%


8.83%


8.62%

Effect of goodwill and other intangibles

4.44%


4.38%


3.99%


4.13%


4.25%

Equity to assets (GAAP)

12.76%


12.43%


12.87%


12.96%


12.87%











OTHER DATA (period end)










Full time equivalent employees










Banking Division

2,033


2,008


1,821


1,817


1,815

Retail Mortgage Division

714


739


749


759


765

Warehouse Lending Division

10


12


12


12


12

SBA Division

35


34


29


30


29

Premium Finance Division

77


72


67


68


70

Total Ameris Bancorp FTE headcount

2,869


2,865


2,678


2,686


2,691











Assets per Banking Division FTE

$ 11,589


$ 11,882


$ 12,374


$ 12,046


$ 11,806

Branch locations

165


165


165


165


165

Deposits per branch location

$ 118,718


$ 119,185


$ 114,142


$ 110,655


$ 108,339

.

AMERIS BANCORP AND SUBSIDIARIES

FINANCIAL TABLES


Income Statement

Table 2


Three Months Ended


Mar


Dec


Sep


Jun


Mar

(dollars in thousands except per share data)

2022


2021


2021


2021


2021

Interest income










Interest and fees on loans

$ 177,566


$ 170,813


$ 166,358


$ 167,761


$ 171,157

Interest on taxable securities

4,239


5,866


5,296


5,244


6,118

Interest on nontaxable securities

186


156


139


139


141

Interest on deposits in other banks

1,373


1,521


1,244


595


522

Interest on federal funds sold

10


9


9


12


12

Total interest income

183,374


178,365


173,046


173,751


177,950











Interest expense










Interest on deposits

4,092


4,678


5,106


5,775


6,798

Interest on other borrowings

6,738


6,850


6,279


6,124


6,175

Total interest expense

10,830


11,528


11,385


11,899


12,973











Net interest income

172,544


166,837


161,661


161,852


164,977











Provision for loan losses

(2,734)


(13,619)


(3,984)


(899)


(16,579)

Provision for unfunded commitments

9,009


16,388


(5,516)


1,299


(11,839)

Provision for other credit losses

(44)


(10)


(175)


(258)


(173)

Provision for credit losses

6,231


2,759


(9,675)


142


(28,591)

Net interest income after provision for credit losses

166,313


164,078


171,336


161,710


193,568











Noninterest income










Service charges on deposit accounts

11,058


11,784


11,486


11,007


10,829

Mortgage banking activity

62,938


60,723


56,460


70,231


98,486

Other service charges, commissions and fees

939


962


1,154


1,056


1,016

Gain (loss) on securities

(27)


(4)


530


1


(12)

Other noninterest income

12,003


8,304


6,932


6,945


7,654

Total noninterest income

86,911


81,769


76,562


89,240


117,973











Noninterest expense










Salaries and employee benefits

84,281


76,615


79,671


85,505


95,985

Occupancy and equipment

12,727


13,494


11,979


10,812


11,781

Data processing and communications expenses

12,572


11,534


10,681


11,877


11,884

Credit resolution-related expenses(1)

(965)


1,992


377


622


547

Advertising and marketing

1,988


2,381


2,676


1,946


1,431

Amortization of intangible assets

5,181


3,387


3,387


4,065


4,126

Merger and conversion charges

977


4,023


183



Other noninterest expenses

27,059


24,943


28,242


20,934


23,044

Total noninterest expense

143,820


138,369


137,196


135,761


148,798











Income before income tax expense

109,404


107,478


110,702


115,189


162,743

Income tax expense

27,706


25,534


29,022


26,862


37,781

Net income

$ 81,698


$ 81,944


$ 81,680


$ 88,327


$ 124,962











Diluted earnings per common share

$ 1.17


$ 1.18


$ 1.17


$ 1.27


$ 1.79



(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


Mar


Dec


Sep


Jun


Mar

(dollars in thousands)

2022


2021


2021


2021


2021

Assets










Cash and due from banks

$ 257,316


$ 307,813


$ 239,028


$ 259,729


$ 224,159

Federal funds sold and interest-bearing deposits in banks

3,541,144


3,756,844


3,513,412


3,044,795


2,534,969

Time deposits in other banks





249

Investment securities available-for-sale, at fair value

579,204


592,621


684,504


778,167


859,652

Investment securities held-to-maturity, at amortized cost

91,454


79,850


64,451


29,055


Other investments

49,395


47,552


27,619


27,621


27,620

Loans held for sale

901,550


1,254,632


1,435,805


1,210,589


1,509,528











Loans, net of unearned income

16,143,801


15,874,258


14,824,539


14,780,791


14,599,805

Allowance for credit losses

(161,251)