Highlights of Ameris's results for the first quarter of 2023 include the following:

• Net income of $60.4 million, or $0.87 per diluted share
• Pre-tax, pre-provision net revenue (PPNR) ROA⁽¹⁾ of 2.07%
• Growth in tangible book value⁽¹⁾ of $0.87 per share, or 11.6% annualized, to $30.79 at March 31, 2023
• Increased the allowance for credit losses to 1.21% of loans, from 1.04% at December 31, 2022, due to forecasted economic conditions
• Adjusted efficiency ratio⁽¹⁾ of 51.99%, compared with 56.95% in the first quarter of last year
• Nonperforming assets, excluding government-guaranteed loans, as a percentage of total assets improved one basis point to 0.33% at March 31, 2023, compared with 0.34% at December 31, 2022.
• Net interest margin of 3.76% for the first quarter of 2023
• Organic growth in loans of $142.6 million, or 2.9% annualized
• Growth in total deposits of $434.7 million or 8.9% annualized
• TCE ratio⁽¹⁾ of 8.55%, compared with 8.67% at December 31, 2022 and 8.32% one year ago
• Redeemed $75 million floating rate (was 8.39%) subordinated notes due 2027 in March

ATLANTA, April 27, 2023 /PRNewswire/ -- Ameris Bancorp (Nasdaq: ABCB) (the "Company") today reported net income of $60.4 million, or $0.87 per diluted share, for the quarter ended March 31, 2023, compared with $81.7 million, or $1.17 per diluted share, for the quarter ended March 31, 2022. Included in the Company's first quarter results was a $49.7 million provision for credit losses related to the updated economic forecast, compared with $6.2 million in the first quarter of last year.

Commenting on the Company's results, Palmer Proctor, the Company's Chief Executive Officer, said, "While the recent events in the banking industry were unexpected, they have certainly given us an opportunity to highlight the importance of the strength and diversity reflected in our balance sheet.  Not only do we have a diversified loan portfolio in product types, lines of business and geography, we also have a strong, stable core funding base that has taken years to build.  Our focus on core banking and core fundamentals has never been more important.  We have been good stewards of our capital, growing tangible book value by over 11% annualized, while also prudently increasing our allowance for loan losses.  The increase in the allowance this quarter was driven by the economic forecast and was not due to any underlying credit issue.  We believe the strength of our balance sheet and continued capital generation have us well positioned for the future."

Net Interest Income and Net Interest Margin

Net interest income on a tax-equivalent basis (TE) was $212.6 million in the first quarter of 2023, a decrease of $12.5 million, or 5.6%, from last quarter and an increase of $39.0 million, or 22.5%, compared with the first quarter of 2022.  The Company's net interest margin was 3.76% for the first quarter of 2023, down from 4.03% reported for the fourth quarter of 2022 and up from 3.35% reported for the first quarter of 2022. The decrease in net interest margin this quarter is primarily attributable to rising deposit costs in the current interest rate environment.

Yields on earning assets increased 34 basis points during the quarter to 5.25%, compared with 4.91% in the fourth quarter of 2022, and increased 169 basis points from 3.56% in the first quarter of 2022.  Yields on loans increased to 5.44% during the first quarter of 2023, compared with 5.07% for the fourth quarter of 2022 and 4.37% for the first quarter of 2022.

Loan production in the banking division during the first quarter of 2023 was $563.0 million, with weighted average yields of 8.72%, compared with $612.9 million and 7.92%, respectively, in the fourth quarter of 2022 and $805.5 million and 5.17%, respectively, in the first quarter of 2022.  Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to an additional $3.4 billion during the first quarter of 2023, with weighted average yields of 6.57%, compared with $3.6 billion and 6.06%, respectively, during the fourth quarter of 2022 and $4.7 billion and 3.63%, respectively, during the first quarter of 2022.   

The Company's total cost of funds was 1.59% in the first quarter of 2023, an increase of 65 basis points compared with the fourth quarter of 2022.  Deposit costs increased 45 basis points during the first quarter of 2023 to 1.13%, compared with 0.68% in the fourth quarter of 2022.  Costs of interest-bearing deposits increased during the quarter from 1.17% in the fourth quarter of 2022 to 1.82% in the first quarter of 2023, reflecting deposit pricing adjustments made during the fourth quarter of 2022 and first quarter of 2023.

Noninterest Income

Noninterest income increased $7.7 million, or 15.9%, in the first quarter of 2023 to $56.1 million, compared with $48.3 million for the fourth quarter of 2022, primarily as a result of increased mortgage banking activity, which increased by $8.5 million, or 37.4%, to $31.4 million in the first quarter of 2023, compared with $22.9 million for the fourth quarter of 2022.  Gain on sale spreads increased to 1.96% in the first quarter of 2023 from 1.26% for the fourth quarter of 2022. Total production in the retail mortgage division was essentially flat at $946.4 million in the first quarter of 2023, compared with $947.3 million for the fourth quarter of 2022. The retail mortgage open pipeline was $725.9 million at the end of the first quarter of 2023, compared with $507.1 million at December 31, 2022. 

Noninterest Expense

Noninterest expense increased $4.4 million, or 3.2%, to $139.4 million during the first quarter of 2023, compared with $135.1 million for the fourth quarter of 2022.  During the fourth quarter of 2022, the Company recorded merger and conversion charges of $235,000, with no such charges recorded during the first quarter of 2023.  Excluding those charges, adjusted expenses⁽¹⁾ increased approximately $4.6 million, or 3.4%, to $139.4 million in the first quarter of 2023, from $134.8 million in the fourth quarter of 2022.  The increase in adjusted expenses⁽¹⁾ resulted from a $5.7 million increase in salaries and employee benefits primarily resulting from cyclical payroll tax and 401(k) expenses.  Management continues to focus on operating efficiency, and the adjusted efficiency ratio⁽¹⁾ increased to 51.99% in the first quarter of 2023, compared with 49.61% in the fourth quarter of 2022, primarily resulting from the cyclical compensation expenses.

Income Tax Expense

The Company's effective tax rate for the first quarter of 2023 was 23.1%, compared with 21.3% in the fourth quarter of 2022.  The increased rate for the first quarter of 2023 was primarily a result of the impact of state rates applied to the Company's deferred tax asset during the fourth quarter of 2022.

Balance Sheet Trends

Total assets at March 31, 2023 were $26.09 billion, compared with $25.05 billion at December 31, 2022.  Cash and cash equivalents increased 80.7% to $2.02 billion at March 31, 2023, compared with $1.12 billion at December 31, 2022.  Debt securities available-for-sale were stable at $1.50 billion at both March 31, 2023 and December 31, 2022.  Loans, net of unearned income, increased $142.6 million, or 2.9% annualized, to $20.00 billion at March 31, 2023, compared with $19.86 billion at December 31, 2022. Loans held for sale increased slightly to $395.1 million at March 31, 2023 from $392.1 million at December 31, 2022.

Investment securities remained consistent at $1.63 billion, or 6.8% of earning assets at the end of the first quarter of 2023, compared with $1.63 billion, or 7.2% of earning assets at the end of the 2022.  This compares with $670.7 million, or 3.1% of earning assets at the end of the first quarter of 2022.  The Company did not deploy excess liquidity into the securities portfolio until after rates starting rising during 2022; therefore, the unrealized loss position on the Company's available-for-sale securities portfolio is less than 3% of the portfolio.

At March 31, 2023, total deposits amounted to $19.90 billion, compared with $19.46 billion at December 31, 2022.  At March 31, 2023, noninterest-bearing deposit accounts represented $7.30 billion, or 36.7% of total deposits, compared with $7.93 billion, or 40.7% of total deposits, at December 31, 2022.  Non-rate sensitive deposits (including noninterest-bearing, NOW and savings) totaled $12.16 billion at March 31, 2023, compared with $12.80 billion at December 31, 2022.  These funds represented 61.1% of the Company's total deposits at March 31, 2023, compared with 65.7% at the end of 2022, which has enabled the Company to prudently maintain its stable deposit customer base, while also managing its cost of funds sensitivity in a rising rate environment.  During March, the Company redeemed its $75 million 5.75% Fixed-to-Floating Rate Subordinated Notes Due 2027 (which were at a current rate of 8.39%) with existing liquidity.

Shareholders' equity at March 31, 2023 totaled $3.25 billion, an increase of $55.8 million, or 1.7%, from December 31, 2022.  The increase in shareholders' equity was primarily the result of earnings of $60.4 million during the first quarter of 2023 and improvement in other comprehensive income of $10.9 million resulting from changes in interest rates on the Company's investment portfolio, partially offset by dividends declared and share repurchases.  Tangible book value per share⁽¹⁾ increased $0.87 per share, or 11.6% annualized, during the first quarter to $30.79 at March 31, 2023.  The Company recorded an improvement of $0.16 per share of tangible book value⁽¹⁾ this quarter from other comprehensive income related to the decrease in net unrealized losses on the securities portfolio.  Tangible common equity as a percentage of tangible assets was 8.55% at March 31, 2023, compared with 8.67% at the end of 2022.

Credit Quality

Credit quality remains strong in the Company.  During the first quarter of 2023, the Company recorded a provision for credit losses of $49.7 million, compared with a provision of $32.9 million in the fourth quarter of 2022.  The first quarter provision was primarily attributable to the updated economic forecast and loan growth of $142.6 million during the quarter.  Nonperforming assets as a percentage of total assets were stable at 0.61% during the quarter.  Approximately $75.0 million, or 46.8%, of the nonperforming assets at March 31, 2023 were GNMA-guaranteed mortgage loans, which have minimal loss exposure.  Excluding these government-guaranteed loans, nonperforming assets as a percentage of total assets improved one basis point to 0.33% at March 31, 2023, compared with 0.34% at December 31, 2022.   The net charge-off ratio was 22 basis points for the first quarter of 2023, compared with eight basis points in the fourth quarter of 2022 and nine basis points in the first quarter of 2022.

Conference Call

The Company will host a teleconference at 9:00 a.m. Eastern time on Friday, April 28, 2023, to discuss the Company's results and answer appropriate questions. The conference call can be accessed by dialing 1-833-470-1428.  The conference call access code is 529368.  A replay of the call will be available one hour after the end of the conference call until May 12, 2023.  To listen to the replay, dial 1-866-813-9403.  The conference replay access code is 785707.  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 164 locations in Georgia, Alabama, Florida, North Carolina and South Carolina at the end of the most recent quarter.

⁽¹⁾Considered non-GAAP financial measure - See reconciliation of GAAP to non-GAAP financial measures in tables 9A - 9D

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 financial 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 financial 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 financial 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, investment security valuations and other performance measures; expectations on credit quality and performance; legislative and regulatory changes; changes in U.S. government monetary and fiscal policy; 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, 2022 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.