Ameris Bancorp (ABCB): A Southeastern Banking Powerhouse Navigating the Evolving Landscape

Published on March 15, 2025 | Ticker: ABCB

Ameris Bancorp (ABCB) is a financial holding company headquartered in Atlanta, Georgia, with its primary business conducted through its wholly-owned banking subsidiary, Ameris Bank. The company has carved out a prominent position in the Southeastern United States, leveraging its deep regional expertise and relationship-driven approach to deliver a comprehensive suite of banking services to its customers.

Business Overview and History

Ameris Bancorp was founded in 1971 as a small community bank in Moultrie, Georgia. Over the decades, the company has undergone a remarkable transformation, expanding its footprint through strategic acquisitions and organic growth. In the early years, Ameris Bank grew primarily through de novo branching, establishing a presence in new and existing markets. This strategy allowed the bank to build a strong core deposit base and customer relationships in its local communities.

One notable challenge Ameris faced was the financial crisis of 2008-2009. Like many banks, Ameris experienced an increase in problem assets and credit losses during this period. However, the company was able to navigate the downturn by maintaining a conservative underwriting approach and focusing on reducing its risk profile. This allowed Ameris to emerge from the crisis in a relatively strong position.

In the years following the recession, Ameris continued to grow both organically and through acquisitions. The company made several successful acquisitions that expanded its geographic footprint and added complementary business lines, such as mortgage banking and equipment finance. These strategic moves helped diversify Ameris' revenue streams and enhance its profitability.

Today, Ameris Bancorp is a well-established regional banking franchise with over $26 billion in assets. The company has weathered various economic cycles and operational challenges over its 50-year history, demonstrating the resilience of its business model and the strength of its management team. Ameris remains focused on delivering superior service to its customers, creating value for its shareholders, and supporting the communities it serves.

Financial Performance and Ratios

Ameris Bancorp's financial performance has been consistently strong, with the company reporting solid growth in both top-line and bottom-line metrics. In the fiscal year ended December 31, 2024, the company reported net income of $358.7 million, or $5.19 per diluted share, compared to $269.1 million, or $3.89 per diluted share, in the previous year. This represents a year-over-year increase of 33.4% in net income.

The company's return on average assets (ROA) for the full year 2024 was 1.38%, up from 1.06% in 2023, while its return on average equity (ROE) stood at 10.01%, compared to 8.12% in the prior year. These metrics showcase Ameris Bancorp's ability to generate robust profitability and efficiently deploy its capital.

The company's net interest margin (NIM), a key measure of its ability to generate income from its interest-earning assets, was 3.56% in 2024, a slight decrease from 3.61% in 2023. This margin compression was largely offset by the company's effective balance sheet management and disciplined pricing strategies, which allowed Ameris Bancorp to maintain its industry-leading profitability.

Ameris Bancorp's capital position remains strong, with a Common Equity Tier 1 (CET1) ratio of 12.65% and a total risk-based capital ratio of 15.37% as of December 31, 2024. These ratios well exceed the regulatory minimums, providing the company with ample flexibility to support its growth initiatives and withstand potential economic downturns.

Geographic Footprint and Diversification

Ameris Bancorp's geographic footprint is primarily concentrated in the Southeastern United States, with a strong presence in Georgia, Alabama, Florida, North Carolina, and South Carolina. This regional focus has allowed the company to develop deep relationships with its customers and gain a thorough understanding of the local markets, giving it a competitive advantage over larger national banks.

The company's loan portfolio is well-diversified, with commercial and industrial loans, commercial real estate loans, residential real estate loans, and consumer loans each representing a significant portion of the overall mix. This diversification helps to mitigate concentration risks and provides a more stable revenue stream.

Ameris Bancorp has also expanded its business lines beyond traditional banking, including mortgage banking, equipment finance, and premium finance operations. These diversified revenue streams contribute to the company's overall financial resilience and help to reduce its reliance on net interest income.

Regulatory Landscape and Risk Management

As a financial institution, Ameris Bancorp operates in a highly regulated environment, subject to oversight by various federal and state agencies. The company has a strong track record of compliance and actively manages its regulatory risks, maintaining robust risk management frameworks and internal controls.

In recent years, the company has navigated various regulatory changes, including the implementation of the Current Expected Credit Losses (CECL) accounting standard and enhanced cybersecurity requirements. Ameris Bancorp has demonstrated its ability to adapt to these evolving regulations, ensuring that its operations and risk management practices remain aligned with industry best practices.

The company's credit quality has been a particular area of focus, with non-performing assets as a percentage of total assets declining from 0.69% at the end of 2023 to 0.47% at the end of 2024. Ameris Bancorp's proactive approach to risk management, coupled with its disciplined underwriting practices, has allowed it to maintain a relatively low level of problem assets, even during periods of economic uncertainty.

Outlook and Growth Strategies

Looking ahead, Ameris Bancorp remains well-positioned to capitalize on the growth opportunities in its core Southeastern markets. The company's management team has outlined several key strategic priorities, including:

1. Continued organic growth: Ameris Bancorp plans to leverage its strong market position, customer relationships, and specialized product offerings to drive organic loan and deposit growth across its footprint.

2. Targeted acquisitions: The company remains open to strategically sound acquisition opportunities that can enhance its geographic presence, product capabilities, or customer base.

3. Diversification of revenue streams: Ameris Bancorp will continue to expand its fee-based business lines, such as mortgage banking, equipment finance, and premium finance, to reduce its reliance on net interest income and further strengthen its revenue diversification.

4. Technological innovation: The company is investing in digital banking solutions and advanced data analytics to improve the customer experience, streamline operations, and enhance its overall competitive positioning.

5. Prudent risk management: Ameris Bancorp will maintain its disciplined approach to risk management, ensuring that its credit quality, capital position, and regulatory compliance remain at industry-leading levels.

These strategic initiatives, combined with the company's strong market presence, experienced management team, and solid financial footing, position Ameris Bancorp as a formidable player in the Southeastern banking landscape, well-equipped to navigate the evolving industry dynamics and deliver sustained value to its shareholders.

Financials

For the full year 2024, Ameris Bancorp reported annual revenue of $1.14 billion, annual net income of $358.69 million, annual operating cash flow of $154.19 million, and annual free cash flow of $140.72 million. In the most recent quarter (Q4 2024), the company reported revenue of $290.78 million and net income of $94.38 million. The company experienced year-over-year revenue growth of 10.8% in Q4 2024, driven by increases in net interest income, mortgage banking activity, and other noninterest income.

Ameris Bancorp's adjusted net income for 2024 was $346.6 million, or $5.02 per diluted share, representing a 26% increase in year-over-year adjusted EPS. The company's full-year 2024 adjusted ROA was 1.33%, and adjusted ROTCE was 13.93%, both of which improved from 2023 levels. The PPNR ROA remained strong at 2.05% for the full year 2024.

Business Segments

Ameris Bancorp operates through four reportable business segments: the Banking Division, the Retail Mortgage Division, the Warehouse Lending Division, and the Premium Finance Division.

The Banking Division, which is the largest segment, derives its revenues from the delivery of full-service financial services, including commercial loans, consumer loans, and deposit accounts. In 2024, this division reported $962.92 million in interest income and $691.72 million in net interest income. The division recorded $314.72 million in income before income tax expense, accounting for the majority of the company's pre-tax income. The Banking Division's total assets were $18.95 billion as of the end of 2024, including $951.15 million in goodwill and $67.72 million in other intangible assets.

The Retail Mortgage Division generates revenues from the origination, sales, and servicing of one-to-four family residential mortgage loans. In 2024, this division generated $236.67 million in interest income and $94.30 million in net interest income. Noninterest income for the Retail Mortgage Division was $167.03 million, primarily from mortgage banking activities. The division recorded $112.47 million in income before income tax expense. Total assets for the Retail Mortgage Division were $4.83 billion at the end of 2024, with $64.50 million in goodwill and $3.04 million in other intangible assets.

The Warehouse Lending Division focuses on the origination and servicing of warehouse lines to other businesses that are secured by underlying one-to-four family residential mortgage loans. In 2024, this division had $75.26 million in interest income and $26.77 million in net interest income. Noninterest income was $4.21 million, and the division recorded $26.33 million in income before income tax expense. The Warehouse Lending Division's total assets were $983.23 million as of the end of 2024.

The Premium Finance Division specializes in the origination and servicing of commercial insurance premium finance loans. In 2024, this division reported $103.43 million in interest income and $36.41 million in net interest income. Noninterest income was $45,000, and the division recorded $22.34 million in income before income tax expense. The Premium Finance Division's total assets were $1.50 billion at the end of 2024, including $64.50 million in goodwill.

Liquidity

The company's debt-to-equity ratio stands at 0.113, indicating a conservative leverage position. Ameris Bancorp reported cash and cash equivalents of $1.22 billion, further strengthening its liquidity position. The company maintains credit arrangements with various financial institutions to purchase federal funds up to $92 million. Additionally, Ameris Bancorp participates in the Federal Reserve discount window borrowings program and had $2.28 billion available for borrowing as of December 31, 2024.

Future Outlook

For 2025, Ameris Bancorp has provided guidance on several key metrics. The company expects loan and deposit growth in the mid-single-digit range, with deposit growth continuing to be the governor on loan growth. The net interest margin is projected to be in the 3.50%-3.55% range, which includes an expectation of a 10 basis point reduction from the elevated 3.64% margin in Q4 2024.

Fee income, excluding mortgage, is expected to grow 5%-7% in line with loan and deposit growth. The company is forecasting expense growth of 4.5%-5% for the full year 2025, with the first quarter potentially on the lighter side due to some cyclical payroll expenses.

Ameris Bancorp remains focused on maintaining top-tier profitability, enhancing revenue generation, sustaining a strong capital position, and leveraging growth opportunities within its footprint. The company's diversified business model, strong market presence in the Southeast, and strategic focus on key growth areas position it well for continued success in the evolving banking landscape.

Conclusion

Ameris Bancorp has established itself as a premier banking institution in the Southeastern United States, leveraging its regional expertise, diversified business model, and prudent risk management to deliver consistently strong financial performance. As the company continues to execute on its strategic priorities, it is poised to capitalize on the growth opportunities in its core markets and further solidify its position as a leading community-focused bank in the region.