Ameris Bancorp Reports Net Income of $5.3 Million for First Quarter 2013

MOULTRIE, Ga., April 23, 2013 /PRNewswire/ -- AMERIS BANCORP (NASDAQ-GS: ABCB), today reported net income available to common shareholders of $4.8 million, or $0.20 per diluted share, for the quarter ended March 31, 2013, compared to $4.6 million, or $0.19 per diluted share, for the quarter ended March 31, 2012.  Commenting on the Company's improved profitability, Edwin W. Hortman, Jr., the Company's President and Chief Executive Officer, said, "We are pleased with the financial results for the first quarter of 2013 and believe we have the positive momentum we need to reach our goals for the year.  Our financial results for the first quarter do not fully include the savings we expect from our recently announced restructuring, and were negatively impacted by a $2.5 million non-recurring credit charge related to a covered OREO auction.  Despite these factors, our Company achieved a healthy return on assets of 0.75% for the quarter."

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Highlights of the results of the first quarter of 2013 include the following:

  • Net income available to common shareholders increased 36.3%, compared to the fourth quarter of 2012.
  • The Company's net interest margin was 4.79%, compared to 4.48% in the first quarter of 2012 and 4.75% in the fourth quarter of 2012.
  • Non-covered loans increased by $42.1 million during the quarter.
  • Tangible common equity to tangible assets increased to 8.83% at March 31, 2013, compared to 8.20% at December 31, 2012.
  • Total non-covered classified assets decreased 5.5% when compared to December 31, 2012.
  • Noninterest income (excluding gains on acquisitions) was $11.4 million, compared to $7.2 million in the first quarter of 2012.

Operating Results
Net income for the first quarter of 2013 totaled $5.3 million, compared to $5.4 million for the same quarter in 2012.  The results for the first quarter were negatively affected by an auction of covered OREO that resulted in a pre-tax, non-recurring charge of $2.5 million.  Results for the first quarter of 2012 included a non-recurring gain on an FDIC-assisted acquisition and reflected highly elevated credit costs due to bulk sales of problem assets.  The Company's results for the first quarter of 2013 reflect an annualized return on assets of 0.75% and an annualized return on tangible common equity of 8.53%.

Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2013 totaled $28.3 million, an increase of $611,000, or 2.2%, compared to the $27.7 million reported for the first quarter of 2012.  The Company's net interest margin increased during the quarter to 4.79%, compared to 4.48% during the first quarter of 2012. 

The Company's higher net interest margin was a result of several factors.  First, the Company has experienced steady yields on loans through most of the current interest rate cycle.  Overall yields on non-covered loans in the first quarter of 2013 were 5.58%, compared to 5.57% in the first quarter of 2012.  On new loans booked during the quarter, the Company achieved a 5.13% yield, compared to 5.52% in the same quarter of 2012.

Additionally, covered loan yields declined only slightly to 7.23% in the first quarter of 2013, compared to 7.33% in the same quarter of 2012.  During the most recent quarter, the Company experienced a payoff in its largest covered loan, in addition to several other large classified credits.  These payoffs accelerated additional amounts of accretable yield and improved covered yields beyond management's expectations for the quarter.

Also, steady improvements in the earning asset mix and funding costs have positively impacted our net interest margin over the past year.  The earning asset mix has improved such that loans comprise 82.9% of total earning assets at March 31, 2013, compared to 77.5% at March 31, 2012.  The improved mix has allowed the Company to maintain a steady yield on earning assets despite a persistently low interest rate environment.   For the first quarter of 2013, the Company reported a yield on earning assets of 5.21%, compared to 5.22% for the same quarter of 2012.

The Company's deposit mix continues to shift toward transaction and low-cost deposits, which has contributed to a significant reduction in total cost of funds.  For the quarter ended March 31, 2013, the Company reported a cost of funds of 0.40% compared to 0.69% during the quarter ended March 31, 2012.  Rates on current production of time deposits indicate additional savings opportunities from future maturities, although at a slower pace than experienced over the last year.

Non-interest Income
Recurring levels of non-interest income (excluding gains on FDIC-assisted acquisitions) in the first quarter of 2013 improved to $11.4 million, compared to $7.2 million in the same quarter of 2012.  As a percentage of total assets, recurring non-interest income has increased from 0.96% at March 31, 2012 to 1.61% at the end of the current quarter.

Much of the improvement 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 2012, but its growth slowed slightly compared to the fourth quarter of 2012.  First quarter mortgage revenues are generally lower than other quarters due to seasonality, however the Company's mortgage pipeline is 30% larger at the end of the first quarter than at the end of 2012.

Non-interest Expense
Total operating expenses for the first quarter of 2013 were $28.9 million, compared to $29.8 million for the fourth quarter of 2012 and $34.2 million for the same quarter of 2012.  As noted above, operating expenses in the current quarter were elevated by a non-recurring credit charge associated with mostly absolute auctions of covered OREO.  Additionally, expenses in the first quarter associated with branches that were closed during the quarter totaled approximately $900,000.

Commenting on the Company's restructuring efforts, Mr. Hortman added, "Our restructuring plan remains one of our most important strategies for 2013.  Already there is evidence we are succeeding on this front.  While additional savings are expected throughout the year, core operating expenses, excluding credit and mortgage related charges, were essentially unchanged from levels we reported a year ago."  Total core operating expenses were $20.3 million for the first quarter of 2013, compared to $20.0 million for the first quarter of 2012, and $22.1 million for the third quarter of 2012 when the Company announced its restructuring plans.  Additional savings achieved through the final implementation of the restructuring plans are expected to further reduce operating expenses by as much as $1.2 million per year by the fourth quarter of 2013.

Balance Sheet Trends
Total assets at March 31, 2013 were $2.86 billion, a 5.2% decrease as compared to the $3.02 billion reported at December 31, 2012.  Earning assets declined $146.7 million to $2.40 billion at March 31, 2013.  Short-term assets declined as a percentage of earning assets to 5.5%, compared to 10.8% at December 31, 2012 and 10.1% at March 31, 2012. 

Total non-covered loans increased $42.1 million during the first quarter of 2013 at a rate of 11.8%, to end at $1.49 billion at March 31, 2013.  Commenting on the first quarter's loan growth, Mr. Hortman said, "I am pleased with our first quarter's results on non-covered loan growth, and increasingly confident that we can sustain a double digit growth rate for the remainder of this year.  Additionally, I am proud of the stable yields our bankers have managed during this low rate environment, especially with the growth rates that our Company desires." 

During the first quarter, covered loans decreased by $47.0 million to $460.7 million at March 31, 2013, from $507.7 million at December 31, 2012.  These positive cash flows were quicker than management had anticipated but were largely the result of several payoffs, including the Company's largest covered loan of $7.7 million.  Reductions in covered loan balances were also influenced by foreclosures in the quarter, which totaled $15.7 million.  At the end of the first quarter of 2013, accruing covered loans totaled $361.8 million, compared to $481.4 million at March 31, 2012.  Over the past 12 months, payoffs on accruing covered loans have averaged 24.9% which management believes is in line with the expected rate of reduction in covered loans for the next several quarters.

Total deposits decreased $134.7 million to $2.49 billion during the first quarter of 2013, compared to $2.62 billion at December 31, 2012.  The Company attributed the decline in total deposits to continued run-off in higher priced time deposits as well as unusually high balances normally reported at year end from municipal customers and other larger commercial clients.  Non-interest bearing deposits grew to 19.7% of total deposits at March 31, 2013, compared to 16.7% at the same time in 2012, while time deposits fell to 27.6% of total deposits at the end of the first quarter of 2013, compared to 33.0% at the end of the first quarter of 2012.

Indemnification Asset
At March 31, 2013, the Company's FDIC loss-sharing receivable totaled $161.0 million, which is comprised of $99.9 million in indemnification asset (for reimbursements associated with anticipated losses in future quarters) and $61.1 million in current charge-offs and expenses already incurred but not yet submitted for reimbursement.  These amounts compare favorably to levels reported at March 31, 2012, when the Company had $178.9 million in indemnification asset and $41.2 million in charge-offs and expenses.

"We are ahead of schedule collecting our indemnification asset," reported Mr. Hortman.  "We have always used the shorter of the loan's expected life or the covered loss period in calculating our indemnification asset and have conservatively managed the program to have small and manageable amounts at risk.  At the end of the first quarter of 2013, we have only $6.9 million of classified accruing loans with maturities beyond the covered loss-share period, where there is an increased chance that we may not be able to recover the losses that we believe are inherent in the loan.  The indemnification asset on these assets is limited to only $1.3 million."

Credit Expenses and Asset Quality
The Company's first quarter efforts regarding credit quality focused on improving total classified assets and holding an auction covering more than a third of the Company's covered OREO.  Total classified legacy assets declined to $106.8 million at March 31, 2013, compared to $122.6 million at the same time in 2012.  As a percentage of capital, classified assets improved to 37.7% at the end of the current quarter compared to 41.2% at March 31, 2012. 

During the quarter, the Company auctioned all covered OREO that had been exposed to the market for at least one year.  As a result, 224 properties with book balances totaling $30.2 million were auctioned successfully, bringing approximately 60% of current book value from mostly absolute auctions. 

The Company's quarterly provision for loan losses fell to its lowest level since 2007, at $2.9 million in the first quarter of 2013 compared to $12.9 million in the same quarter in 2012.  Net charge-offs on loans during the first quarter of 2013 decreased substantially to $2.8 million, compared to $6.4 million during the fourth quarter of 2012 and $19.1 million during the first quarter of 2012.  As a percentage of loans, net charge-offs were 0.76% of average loans on an annualized basis for the first quarter of 2013, compared to 1.75% during the fourth quarter of 2012 and 5.79% during the first quarter of 2012.  The levels of charge-offs during the first quarter of 2012 were increased due to the Company's bulk sale of non-performing loans in that quarter. 

Ameris Bancorp is headquartered in Moultrie, Georgia, and at the end of the most recent quarter had 57 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.

 

AMERIS BANCORP

FINANCIAL HIGHLIGHTS

(unaudited)

(dollars in thousands except per share data and FTE headcount)




























Three Months Ended




Mar.


Dec.


Sept.


Jun.


Mar.




2013


2012


2012


2012


2012














Net Income/(Loss) Available to Common Shareholders

$                          4,844


$                          3,554


$                          1,076


$                          1,678


$                          4,550













PER COMMON SHARE DATA











Earnings per share available to common shareholders:












Basic

$                            0.20


$                            0.15


$                            0.05


$                            0.07


$                            0.19



Diluted

$                            0.20


$                            0.15


$                            0.04


$                            0.07


$                            0.19


Cash Dividends per share

$                                 -


$                                 -


$                                 -


$                                 -


$                                 -


Stock dividend

-


-


-


-


-


Book value per share (period end)

$                          10.72


$                          10.56


$                          10.41


$                          10.49


$                          10.36


Tangible book value per share (period end)

$                          10.57


$                          10.39


$                          10.23


$                          10.29


$                          10.15


Weighted average number of shares:












Basic

23,867,691


23,815,583


23,819,144


23,818,814


23,762,196



Diluted

24,246,346


23,857,095


23,973,369


23,973,039


23,916,421


Period-end number of shares

23,875,680


23,799,768


23,819,144


23,819,144


23,814,144


Market data:












High closing price

$                          14.51


$                          12.71


$                          12.88


$                          13.40


$                          13.32



Low closing price

$                          12.79


$                          10.50


$                          11.27


$                          10.88


$                          10.34



Period end closing price

$                          14.35


$                          12.49


$                          12.59


$                          12.60


$                          13.14



Average daily volume

51,887


48,295


45,543


58,370


59,139













PERFORMANCE RATIOS











Return on average assets

0.75%


0.62%


0.26%


0.34%


0.72%


Return on average common equity

8.53%


7.72%


3.12%


4.12%


8.89%


Earning asset yield (TE)

5.21%


5.22%


5.06%


5.33%


5.22%


Total cost of funds

0.40%


0.44%


0.51%


0.62%


0.69%


Net interest margin (TE)

4.79%


4.75%


4.52%


4.66%


4.48%


Non-interest income excluding securities transactions,












as a percent of total revenue (TE) (1)

26.27%


25.86%


23.60%


21.10%


12.15%


Efficiency ratio

72.76%


71.85%


75.68%


70.51%


62.28%













CAPITAL ADEQUACY (period end)











Stockholders' equity to assets

9.91%


9.24%


10.14%


10.31%


9.78%


Tangible common equity to tangible assets

8.83%


8.20%


8.27%


8.41%


7.95%













EQUITY TO ASSETS RECONCILIATION











Tangible common equity to tangible assets

8.83%


8.20%


8.27%


8.41%


7.95%


Effect of preferred equity

0.97%


0.92%


1.74%


1.75%


1.67%


Effect of goodwill and other intangibles

0.12%


0.12%


0.14%


0.15%


0.16%



Equity to assets (GAAP)

9.91%


9.24%


10.15%


10.31%


9.78%













OTHER PERIOD-END DATA











FTE Headcount

820


866


872


839


827


Assets per FTE

$                          3,490


$                          3,486


$                          3,382


$                          3,481


$                          3,680


Branch locations

57


66


66


67


67


Deposits per branch location

$                        43,684


$                        39,768


$                        39,093


$                        37,980


$                        39,781














(1)Includes gain from acquisition.










 

AMERIS BANCORP

FINANCIAL HIGHLIGHTS

(unaudited)

(dollars in thousands except per share data and FTE headcount)
















Three Months Ended




Mar.


Dec.


Sept.


Jun.


Mar.




2013


2012


2012


2012


2012

























INCOME STATEMENT






















Interest income











Interest and fees on loans

$                        28,716


$                        30,329


$                        29,165


$                        30,334


$                        29,482


Interest on taxable securities

1,697


1,737


2,017


2,187


2,309


Interest on nontaxable securities

375


371


365


374


365


Interest on deposits in other banks

85


102


104


108


120


Interest on federal funds sold

-


-


-


4


6



Total interest income

30,873


32,539


31,651


33,007


32,282













Interest expense











Interest on deposits

$                          2,226


$                          2,603


$                          3,005


$                          3,635


$                          4,084


Interest on other borrowings

309


377


408


491


471



Total interest expense

2,535


2,980


3,413


4,126


4,555













Net interest income

28,338


29,559


28,238


28,881


27,727













Provision for loan losses

2,923


4,442


6,540


7,225


12,882













Net interest income/(loss) after provision for loan losses

$                        25,415


$                        25,117


$                        21,698


$                        21,656


$                        14,845













Noninterest income











Service charges on deposit accounts

$                          4,837


$                          5,299


$                          5,121


$                          4,770


$                          4,386


Mortgage banking activity

4,464


4,768


3,740


3,006


1,475


Other service charges, commissions and fees

329


387


331


322


391


Gain(loss) on sale of securities

172


322


-


-


-


Gains from acquisitions

-


-


-


-


20,037


Other non-interest income

1,558


1,128


639


777


975



Total noninterest income

11,360


11,904


9,831


8,875


27,264













Noninterest expense











Salaries and employee benefits

13,806


15,785


13,766


12,125


11,446


Occupancy and equipment expenses

2,931


3,653


3,340


2,880


3,335


Data processing and telecommunications expenses

2,570


3,254


2,599


2,905


1,925


Credit related expenses (1)

4,844


2,548


3,706


3,423


12,739


Advertising and marketing expenses

255


488


421


364


349


Amortization of intangible assets

364


364


364


412


220


Goodwill impairment

-


-


-


-


-


Other non-interest expenses

4,114


3,699


4,614


4,514


4,232



Total noninterest expense

28,884


29,791


28,810


26,623


34,246













Operating profit

$                          7,891


$                          7,230


$                          2,719


$                          3,908


$                          7,863














Income tax expense

2,606


2,558


816


1,413


2,498













Net income

$                          5,285


$                          4,672


$                          1,903


$                          2,495


$                          5,365













Preferred stock dividends

441


1,118


827


817


815













Net income available










     to common shareholders

$                          4,844


$                          3,554


$                          1,076


$                          1,678


$                          4,550













Diluted earnings available to common shareholders

0.20


0.15


0.04


0.07


0.19














(1) Includes expenses associated with problem loans and OREO, as well as OREO losses and writedowns.