MOULTRIE, Ga., April 22, 2014 /PRNewswire/ -- AMERIS BANCORP (NASDAQ-GS: ABCB), today reported net income available to common shareholders of $8.1 million, or $0.32 per diluted share, for the quarter ended March 31, 2014, compared to $4.8 million, or $0.20 per diluted share, for the quarter ended March 31, 2013. Commenting on the Company's improved profitability, Edwin W. Hortman, Jr., the Company's President and Chief Executive Officer, said, "Our first quarter results reflect a full quarter of the additional revenues we expected from the acquisition of The Prosperity Banking Company and Prosperity Bank during the fourth quarter of 2013. On the expense side, we completed the data processing conversion and should have a full run rate of expense savings in the coming quarter."

Highlights of the results of the first quarter of 2014 include the following:

• Net income available to common shareholders increased 66.5%, compared to the same quarter in 2013.
• The remaining TARP preferred stock investment was redeemed during the quarter with no additional borrowings or issuances of common stock.
• The Company's net interest margin was 4.57%, compared to 4.43% in the fourth quarter of 2013.
• Return on average assets and return on average tangible equity improved to 0.96% and 13.30%, respectively compared to 0.75% and 8.61% for the same quarter in 2013.
• Credit costs (provision and problem loan and OREO expenses) declined to $3.9 million, compared to $7.8 million in the first quarter of 2013 and $6.8 million in the fourth quarter of 2013.
• Legacy loans (excluding purchased non-covered and covered loans) increased by $76.9 million during the quarter, an annualized growth rate of 19.3%.
• Tangible common equity to tangible assets increased significantly to 7.53% at March 31, 2014, compared to 6.83% at December 31, 2013.
• Total legacy classified loans (excluding purchased non-covered and covered loans) decreased 8.1%, compared to December 31, 2013.
• Noninterest income was $12.8 million, compared to $11.4 million in the first quarter of 2013 and $11.5 million in the fourth quarter of 2013.
• Net income from the Company's mortgage operation improved during the first quarter of 2014, totaling $947,000, compared to $38,000 in the fourth quarter of 2013.

Operating Results
Net income available to common shareholders for the first quarter of 2014 totaled $8.1 million, compared to $4.8 million for the same quarter in 2013. Revenue during the first quarter totaled $47.2 million, an increase of 19.0% compared to the first quarter of 2013. Increases in revenue resulted from the addition of The Prosperity Banking Company, as well as modest increases from growth in legacy portfolio loans with minimal decreases in yields. The Company's return on assets improved from 0.75% in the first quarter of 2013 to 0.96% in the first quarter of 2014. Return on tangible common equity increased to 13.30% in the current quarter, from 8.61% in the first quarter of 2013, due to additional earnings and capital utilization.

Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2014 totaled $34.5 million, an increase of $6.1 million, or 21.7%, compared to $28.3 million reported for the first quarter of 2013. The Company's net interest margin increased during the first quarter of 2014 to 4.57% compared to 4.43% in the fourth quarter of 2013. The higher net interest margin resulted from several factors, including steady yields on the Company's loan portfolios and lower levels of excess liquidity than those reported during the fourth quarter of 2013.

Yields on legacy loans declined only slightly from 5.15% in the fourth quarter of 2013 to 5.11% in the first quarter of 2014. Yields declined by a larger margin compared to the same quarter in 2013 when the Company reported legacy loan yields of 5.58%. The Company has expected a slower pace of compression on loan yields as loan production on new and renewed loans has been steady for several quarters at levels much closer to the overall portfolio yield than in the past.

The Company's cost of deposits decreased during the first quarter of 2014 to 0.30%, compared to 0.32% in the fourth quarter of 2013 and 0.36% in the first quarter of 2013. Continued shifts in the funding mix toward non-interest bearing demand and other lower cost deposit categories was the primary reason for the decline. A sales focus on business deposit accounts continues to result in favorable growth in non-interest bearing demand deposits, which increased to $698.9 million at the end of the first quarter of 2014, an annualized growth rate of 18.4%, when compared to balances at December 31, 2013. Compared to the same period in 2013, non-interest bearing demand deposits have increased $207.9 million, or 42.3%.

Non-interest Income
Recurring levels of non-interest income in the first quarter of 2014 improved to $12.8 million, compared to $11.4 million in the same quarter of 2013 and $11.5 million in the fourth quarter of 2013. As a percentage of total assets, recurring non-interest income has decreased from 1.61% at March 31, 2013 to 1.48% at the end of the current quarter. The majority of the decline in non-interest income contribution as a percentage of total assets relates to Prosperity's income statement which was more heavily centered on traditional spread income. The Company believes the new markets are attractive opportunities for its existing strategies and believes non-interest income levels will grow in the coming quarters commensurate with the rest of the Company's markets.

Much of the non-interest income growth has related to the Company's mortgage strategy, although fees and service charges on deposit accounts have remained at strong levels. Mortgage revenue increased compared to the same quarter of 2013, as loan pipelines and closings improved from the lower levels the Company reported in the fourth quarter of 2013. At the end of the first quarter of 2014, the Company's open pipeline of mortgage loans totaled $75.2 million, compared to $40.5 million at the end of 2013. Growth in the pipeline and growth in closings are the result of excellent relationships the Company has developed with certain realtors and builders. The Company is still selectively searching for strong, seasoned producers to add to the team but believes additional improvement in volumes will result from its builder and realtor contacts going forward.

Non-interest Expense
Total operating expenses for the first quarter of 2014 were $33.2 million, compared to $28.9 million for the same quarter of 2013. Increases in operating expenses were primarily the result of the recently closed Prosperity Bank acquisition, which added approximately $4.8 million in quarterly expenses. Additional expenses related to increases in mortgage volume totaled $1.1 million in the first quarter of 2014 compared to the same quarter in 2013. Offsetting these increases in operating expenses were declines in credit-related expenses of $2.7 million from the same quarter in 2013.

On a comparative basis, the Company recorded $30.6 million of core non-interest expense in the first quarter, (excluding credit and merger related expenses), an increase of $2.6 million compared to core non-interest expense in the fourth quarter of 2013, (excluding credit related expenses and $4.3 million of merger related expenses).

The Company completed the data conversion for the Prosperity Bank acquisition during the first quarter of 2014, which resulted in approximately $450,000 of conversion related expenses that will be non-recurring in future quarters. These costs were principally related to compensation, professional fees and travel expenses.

Credit Expenses and Asset Quality
Total classified legacy assets declined during the quarter to $87.3 million at March 31, 2014, compared to $106.8 million for the same quarter in 2013. As a percentage of capital, classified assets improved to 29.1% at the end of the current quarter, compared to 37.7% at March 31, 2013.

During the quarter, the Company downgraded certain assets acquired with the acquisition of Prosperity Bank to non-accrual in an effort to force borrower actions on assets that were well collateralized. The assets in question were identified by the Company in its due diligence as assets that would require more aggressive collection efforts and were marked accordingly. The Company does not anticipate losses from these downgraded assets and believes resolution will come relatively quickly given the operating status of the borrowers and underlying collateral values. Loan to value on the three largest relationships is approximately 53% in the aggregate.

Credit costs continued to improve as expected. During the quarter, credit expenses (provision and credit-related operating expenses) fell to $3.9 million, or 0.94% annualized, of non-covered loans, compared to $7.8 million, or 2.11% annualized, of non-covered loans in the same quarter in 2013. Higher levels of real estate activity and better prices were the primary factors for the improvement.

Balance Sheet Trends
Total assets at March 31, 2014 were $3.49 billion, a 4.9% decrease compared to the $3.67 billion reported at December 31, 2013. Earning assets declined $153.5 million to $3.06 billion at March 31, 2014. Short-term assets declined as a percentage of earning assets to 3.9%, compared to 8.3% at December 31, 2013 and 5.5% at March 31, 2013. Declines in earning assets were primarily related to excess liquidity at year end resulting from certain larger municipal and corporate deposits.

Total legacy loans (excluding purchased non-covered and covered loans) increased $76.9 million during the first quarter of 2014 at an annualized rate of 19.3%, to end at $1.70 billion at March 31, 2014. During the first quarter, purchased non-covered loans decreased by $11.5 million to $437.3 million, down from $448.8 million reported at December 31, 2013. Covered loans decreased by $17.5 million to $372.7 million at March 31, 2014, from $390.2 million at December 31, 2013. Increases in legacy loans were centered mostly in commercial real estate, municipal and residential loan types, while the declines in covered loans were centered mostly in classified assets resulting from normal workout efforts as the Company approaches the maturity of its first loss-share agreements.

Total deposits increased $11.4 million to $3.01 billion during the first quarter of 2014, compared to $3.00 billion at December 31, 2013. Non-interest bearing deposits grew to 23.2% of total deposits at March 31, 2014, compared to 19.7% at the same time in 2013.

During the first quarter of 2014, the Company redeemed the remaining $28 million in shares of the preferred stock originally issued to the U.S. Treasury under the Troubled Asset Relief Program (TARP) in November 2008. The redemption of preferred stock was completed with no additional borrowings or issuances of common stock.

Ameris Bancorp is headquartered in Moultrie, Georgia, and at the end of the most recent quarter had 68 locations in Georgia, Alabama, northern Florida and South Carolina.

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"). Management of Ameris Bancorp (the "Company") 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 statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe", "estimate", "expect", "intend", "anticipate" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates which they were made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements and are referred to the Company's periodic filings with the Securities and Exchange Commission for a summary of certain factors that may impact the Company's results of operations and financial condition.