Executive Summary / Key Takeaways

• Ameris Bancorp delivered a strong start to 2025, marked by robust profitability, expanding net interest margin, and disciplined expense control, resulting in a notable improvement in its efficiency ratio.
• The company continues to build capital and reserves, with CET1 and TCE ratios strengthening, providing significant optionality for future growth initiatives and shareholder returns in its attractive Southeastern markets.
• Deposit growth, particularly in non-interest bearing accounts, remains a core strength and strategic focus, underpinning funding stability and contributing positively to the net interest margin.
• Management maintains a measured outlook for 2025, anticipating mid-single-digit loan and deposit growth weighted towards the latter half of the year, while prioritizing profitable growth and balance sheet optimization over aggressive expansion in the current uncertain environment.
• Key factors for investors to monitor include the pace of economic clarity influencing growth opportunities, the impact of deposit competition on funding costs and margin, and the company's continued execution on operational efficiency and strategic technology investments.

Ameris Bancorp: A Disciplined Approach in Dynamic Southeastern Markets

Ameris Bancorp, operating primarily through its subsidiary Ameris Bank, has cultivated a business model centered on balancing the scale and efficiencies of a larger financial institution with the personalized service expected in community banking. Founded in 1971 and headquartered in Atlanta, Georgia, the bank operates across select high-growth markets in Georgia, Alabama, Florida, North Carolina, and South Carolina. This regional focus positions Ameris within a dynamic economic landscape, expected to grow at a pace significantly faster than the national average, providing a fertile ground for organic expansion.

The company's strategic approach is built upon four core pillars: maintaining top-tier profitability, enhancing revenue generation and positive operating leverage, sustaining a strong capital position, and leveraging growth opportunities within its footprint. This strategy has been consistently applied, particularly in recent periods characterized by macroeconomic uncertainty. Management has demonstrated a willingness to pivot, shifting focus from simply driving asset growth to optimizing net interest margin and overall profitability fundamentals, including asset mix, duration, and risk profiles. This disciplined stance is a defining characteristic of Ameris's operational philosophy.

Within the competitive landscape, Ameris operates alongside a diverse set of financial institutions, ranging from national giants like JPMorgan Chase (JPM) and Wells Fargo (WFC) to regional peers such as Customers Bancorp (CUBI) and National Bank Holdings Corporation (NBHC), as well as increasingly relevant fintech firms. While larger national banks possess advantages in scale, vast branch networks, and often more advanced digital platforms, Ameris differentiates itself through its deep regional market penetration, relationship-focused banking model, and a strong core deposit franchise. This emphasis on local relationships and core funding provides a stable deposit base, with a healthy percentage of non-interest bearing accounts, which contributes to lower funding costs compared to some competitors.

However, competing with larger, more technologically advanced institutions presents challenges. While Ameris utilizes efficient centralized operating systems and digital banking platforms, the competitive analysis suggests that some peers, particularly the national players, may have more advanced or AI-driven systems leading to faster processing speeds and potentially lower operating costs per transaction or loan origination. Ameris's investments in treasury initiatives and systems supporting its various business lines, including mortgage operations and risk management (like simulation modeling for interest rate risk), are aimed at enhancing efficiency and capability. Yet, maintaining technological parity or leadership requires ongoing investment, which could impact expense growth. The company's ability to leverage technology for operational efficiency and enhanced customer experience is crucial for competing effectively, especially against fintech firms that offer streamlined, lower-cost digital services that could erode market share in certain segments.

Ameris's business is diversified across four reportable segments: Banking, Retail Mortgage, Warehouse Lending, and Premium Finance. The Banking Division, encompassing traditional commercial and consumer lending and deposit services, is the largest contributor to net interest income and overall assets. The Retail Mortgage Division focuses on residential mortgage origination, sales, and servicing, contributing significantly to noninterest income, though subject to interest rate volatility and seasonality. The Warehouse Lending Division provides financing to mortgage originators, and the Premium Finance Division specializes in commercial insurance premium finance loans, both offering higher yields but also carrying specific risks and operational complexities. This diversification across business lines and geographies within the Southeast provides multiple avenues for revenue generation and helps mitigate concentration risk inherent in traditional banking.

Performance Reflecting Discipline and Strategic Positioning

Ameris Bancorp's financial performance in the first quarter of 2025 demonstrated the effectiveness of its disciplined strategy. The company reported net income of $87.9 million, or $1.27 per diluted share, a significant increase from $74.3 million, or $1.08 per diluted share, in the same period of 2024. This improvement was primarily fueled by a robust increase in net interest income, which rose by $20.4 million year-over-year to $221.8 million. This growth occurred despite a slight decrease in asset yields, as the company successfully managed funding costs, with yields on interest-bearing deposits and total interest-bearing liabilities decreasing more significantly than asset yields.

The net interest margin expanded to a strong 3.73% in Q1 2025, up from 3.51% in Q1 2024. Management highlighted that this is a core margin with no remaining acquisition accretion. The expansion was attributed to downward pricing adjustments on deposits and growth in average earning assets. Average interest-earning assets increased by nearly $1 billion, or 4.3%, year-over-year, primarily driven by organic loan growth and increased investment in the bond portfolio.

Expense control remained a key focus, contributing to improved efficiency. Total noninterest expense increased only modestly by 1.6% year-over-year to $151.0 million in Q1 2025, despite increases in salaries and employee benefits (due to health insurance costs and merit increases). This was partially offset by decreases in occupancy and equipment expenses and loan servicing expenses. The company's efficiency ratio improved to 52.83% in Q1 2025, down from 55.64% in Q1 2024, reflecting positive operating leverage.

Asset quality metrics remained stable to improving. Non-performing assets as a percentage of total assets decreased slightly to 0.44% at March 31, 2025, from 0.47% at December 31, 2024, driven by reductions in nonaccrual loans and other real estate owned. Net charge-offs on loans decreased to 0.18% annualized in Q1 2025, down from 0.25% in Q1 2024. The allowance for credit losses on loans increased to $345.6 million, or 1.67% of total loans, from $338.1 million, or 1.63%, at the end of 2024. This increase was primarily attributed to updated economic forecasts used in the CECL model, including a shift in weighting towards downside scenarios influenced by factors like potential tariff impacts, rather than a deterioration in the underlying portfolio performance.

Deposit gathering continues to be a significant strength. Total deposits increased by $190 million, or 0.9%, in Q1 2025, representing a 4% annualized growth rate. Notably, non-interest bearing deposits grew at a strong 15% annualized rate, further enhancing the low-cost funding base. This growth occurred despite seasonal outflows of municipal deposits, which were successfully replaced with core deposit growth rather than solely relying on wholesale funding. Non-interest bearing deposits constitute a healthy 30.8% of total deposits, and brokered CDs remain a low percentage (<5%), highlighting the stability and quality of the deposit franchise.

Capital levels are robust and growing. Strong earnings generation in Q1 2025 contributed to increases in the Common Equity Tier 1 ratio to 12.9% and the Tangible Common Equity ratio to 10.8%. Tangible book value per share grew by $1.19 to $39.78. The company remains well capitalized under regulatory standards and has significant availability through FHLB and the Federal Reserve Discount Window, underscoring its strong liquidity position. Share repurchases continued in Q1 2025, with $15 million of stock repurchased under the existing authorization, which has $85 million remaining through October 2025.

Outlook and Strategic Optionality

Management's outlook for the remainder of 2025 reflects a continuation of its measured and disciplined approach, balanced with optimism regarding opportunities in its markets. They anticipate mid-single-digit loan and deposit growth for the full year, with growth expected to be weighted towards the latter half of 2025, contingent on greater clarity in the macroeconomic environment. Deposit growth is expected to remain the primary determinant of the pace of loan expansion.

While the net interest margin benefited from favorable deposit pricing dynamics in Q1, management expects some normalization in the coming quarters as seasonal public funds cycle out and potential deposit competition increases with accelerating loan growth. However, they believe the margin will remain strong, normalizing above 3.60%. The company's asset sensitivity is modeled as close to neutral, suggesting that significant future margin expansion would likely be driven by accretive growth in earning assets rather than broad rate movements impacting the existing balance sheet.

Expense growth for 2025 is anticipated to be around 4.5-5%, with some seasonality expected in the first quarter due to payroll taxes and benefits. Management remains focused on maintaining efficiency and positive operating leverage, leveraging past investments in treasury and commercial banking initiatives to drive profitable growth.

The strong capital position provides significant strategic optionality. While organic growth remains the primary focus for capital deployment, the company is open to considering selective, strategic M&A opportunities that align with its geographic footprint, enhance core funding, and represent a cultural fit. Share buybacks also remain an option, though organic growth and potential M&A would likely take priority.

Key risks to the outlook include ongoing macroeconomic uncertainty, particularly regarding interest rate movements and their impact on asset values and credit quality. While the CRE portfolio is actively monitored and performing favorably, potential challenges from higher interest rates on renewals and changes in occupancy rates remain factors to watch. Competitive pressures on both asset and liability pricing could also impact profitability. The company's CECL model's sensitivity to economic forecast changes highlights the potential for future provision volatility, although management emphasizes that current reserve levels are robust and not indicative of underlying portfolio weakness.

Conclusion

Ameris Bancorp has demonstrated a strong start to 2025, underpinned by disciplined execution, robust financial performance, and a focus on core strengths. The company's ability to expand its net interest margin, control expenses, and grow its stable deposit base in a challenging environment highlights the effectiveness of its strategic approach. With a well-capitalized balance sheet and ample liquidity, Ameris is strategically positioned to capitalize on growth opportunities within its attractive Southeastern markets as macroeconomic clarity potentially improves in the latter half of the year. While competitive dynamics and economic uncertainty present ongoing risks, the company's diversified business model, strong core funding, and proven culture of efficiency provide a solid foundation. For investors, Ameris represents a regional banking franchise with a track record of delivering top-tier results and the strategic flexibility to pursue profitable growth and enhance shareholder value in the periods ahead, making its execution on organic growth, deposit gathering, and operational efficiency key factors to monitor.