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    ABCB   US03076K1088

AMERIS BANCORP

(ABCB)
  Report
Delayed Nasdaq  -  04:00 2022-09-30 pm EDT
44.71 USD   -0.47%
09/29AMERIS BANCORP : Ex-dividend day for
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09/14Truist Securities Adjusts Price Target on Ameris Bancorp to $55 From $52, Reiterates Buy Rating
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08/16Ameris Bank Commits $10 Million To Support Eligible First-Time Homebuyers
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AMERIS BANCORP Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

08/05/2022 | 04:55pm EDT

Cautionary Note Regarding Forward-Looking Statements


Certain of the statements made in this report are "forward-looking statements"
within the meaning of, and subject to the protections of, Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, anticipations, assumptions,
estimates, intentions and future performance and involve known and unknown
risks, uncertainties and other factors, many of which may be beyond our control
and which may cause the actual results, performance or achievements of the
Company to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that
could be forward-looking statements. You can identify these forward-looking
statements through our use of words such as "may," "will," "anticipate,"
"assume," "should," "indicate," "would," "believe," "contemplate," "expect,"
"estimate," "continue," "plan," "point to," "project," "predict," "could,"
"intend," "target," "potential" and other similar words and expressions of the
future. These forward-looking statements may not be realized due to a variety of
factors, 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; expectations on credit quality
and performance; competitive pressures on product pricing and services;
legislative and regulatory changes; changes in U.S. government monetary and
fiscal policy; the impact of the COVID-19 pandemic on the general economy, our
customers and the allowance for loan losses; the benefits that may be realized
by our customers from government assistance programs and regulatory actions
related to the COVID-19 pandemic; the potential impact of the phase-out of the
London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR;
additional competition in our markets; changes in state and federal banking laws
and regulations to which we are subject; financial market conditions and the
results of financing efforts; 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;
weather events, natural disasters, geopolitical events, acts of war or terrorism
or other hostilities, public health crises and other catastrophic events beyond
our control; and other factors discussed in our filings with the Securities and
Exchange Commission (the "SEC") under the Exchange Act.

All written or oral forward-looking statements that are made by or are
attributable to us are expressly qualified in their entirety by this cautionary
notice. Our forward-looking statements apply only as of the date of this report
or the respective date of the document from which they are incorporated herein
by reference. We have no obligation and do not undertake to update, revise or
correct any of the forward-looking statements after the date of this report, or
after the respective dates on which such statements otherwise are made, whether
as a result of new information, future events or otherwise.

Overview


The following is management's discussion and analysis of certain significant
factors which have affected the financial condition and results of operations of
the Company as reflected in the unaudited consolidated balance sheet as of June
30, 2022, as compared with December 31, 2021, and operating results for the
three- and six-month periods ended June 30, 2022 and 2021. These comments should
be read in conjunction with the Company's unaudited consolidated financial
statements and accompanying notes appearing elsewhere herein.

This discussion contains certain performance measures determined by methods
other than in accordance with GAAP. Management of 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. Non-GAAP measures include adjusted net
income and adjusted net income per diluted share. The Company calculates the
regulatory capital ratios using current regulatory report instructions. The
Company's management uses these measures to assess the quality of capital and
believes that investors may find them useful in their evaluation of the Company.
These capital measures may or may not be necessarily comparable to similar
capital measures that may be presented by other companies.
                                       36
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Critical Accounting Policies


There have been no significant changes to our critical accounting policies from
those disclosed in our 2021 Annual Report on Form 10-K. The reader should refer
to the notes to our consolidated financial statements in our 2021 Annual Report
on Form 10-K for a full disclosure of all critical accounting policies.

Results of Operations for the Three Months Ended June 30, 2022 and 2021

Consolidated Earnings and Profitability


Ameris reported net income available to common shareholders of $90.1 million, or
$1.30 per diluted share, for the quarter ended June 30, 2022, compared with
$88.3 million, or $1.27 per diluted share, for the same period in 2021. The
Company's return on average assets and average shareholders' equity were 1.54%
and 11.87%, respectively, in the second quarter of 2022, compared with 1.64% and
12.66%, respectively, in the second quarter of 2021. During the second quarter
of 2022, the Company recorded pre-tax servicing right impairment recovery of
$10.8 million and pre-tax gains on bank premises of $39,000. During the second
quarter of 2021, the Company recorded pre-tax servicing right impairment
recovery of $749,000 and pre-tax gains on bank premises of $236,000. Excluding
these adjustment items, the Company's net income would have been $81.5 million,
or $1.18 per diluted share, for the second quarter of 2022 and $87.5 million, or
$1.25 per diluted share, for the second quarter of 2021.

Below is a reconciliation of adjusted net income to net income, as discussed above.

                                                                               Three Months Ended June 30,
(in thousands, except share and per share data)                                2022                   2021
Net income                                                               $       90,066          $     88,327
Adjustment items:

Servicing right recovery                                                        (10,838)                 (749)

Gain on bank premises                                                               (39)                 (236)
Tax effect of adjustment items (Note 1)                                           2,284                   206
After tax adjustment items                                                       (8,593)                 (779)
Adjusted net income                                                      $  

81,473 $ 87,548


Weighted average common shares outstanding - diluted                         69,316,258            69,791,670
Net income per diluted share                                             $         1.30          $       1.27
Adjusted net income per diluted share                                    $  

1.18 $ 1.25

Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments.




                                       37
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Below is additional information regarding the retail banking activities,
mortgage banking activities, warehouse lending activities, SBA activities and
premium finance activities of the Company during the second quarter of 2022 and
2021, respectively:

                                                                                          Three Months Ended
                                                                                             June 30, 2022
                                                                   Retail            Warehouse                              Premium
                                                Banking           Mortgage            Lending              SBA              Finance
(dollars in thousands)                          Division          Division           Division           Division            Division            Total
Interest income                               $ 141,844          $ 38,055          $    8,476          $  4,757          $    9,436          $ 202,568
Interest expense                                (10,278)           17,276               1,776               959               1,471             11,204
Net interest income                             152,122            20,779               6,700             3,798               7,965            191,364
Provision for credit losses                      10,175             4,499                 867              (523)                (94)            14,924
Noninterest income                               23,469            57,795               1,041             1,526                  10             83,841
Noninterest expense
Salaries and employee benefits                   46,733            31,219                 208             1,316               2,069             81,545
Occupancy and equipment                          11,168             1,406                   1                81                  90             12,746
Data processing and communications expenses      10,863             1,123                  48                29                  92             12,155
Other expenses                                   21,123            12,812                 212               539               1,064             35,750
Total noninterest expense                        89,887            46,560                 469             1,965               3,315            142,196
Income before income tax expense                 75,529            27,515               6,405             3,882               4,754            118,085
Income tax expense                               19,120             5,779               1,346               815                 959             28,019
Net income                                    $  56,409          $ 21,736          $    5,059          $  3,067          $    3,795          $  90,066



                                                                                         Three Months Ended
                                                                                            June 30, 2021
                                                                   Retail            Warehouse                             Premium
                                                Banking           Mortgage            Lending              SBA             Finance
(dollars in thousands)                          Division          Division           Division           Division          Division            Total
Interest income                               $ 109,260          $ 34,085          $    8,988          $ 14,050          $  7,368          $ 173,751
Interest expense                                 (1,410)           11,552                 268             1,168               321             11,899
Net interest income                             110,670            22,533               8,720            12,882             7,047            161,852
Provision for credit losses                      (3,949)            5,647                (155)             (607)             (794)               142
Noninterest income                               16,171            69,055               1,333             2,677                 4             89,240
Noninterest expense
Salaries and employee benefits                   37,814            44,798                 278               937             1,678             85,505
Occupancy and equipment                           9,050             1,553                   1               132                76             10,812
Data processing and communications expenses      10,280             1,435                  68                 -                94             11,877
Other expenses                                   18,763             7,638                  30               284               852             27,567
Total noninterest expense                        75,907            55,424                 377             1,353             2,700            135,761
Income before income tax expense                 54,883            30,517               9,831            14,813             5,145            115,189
Income tax expense                               14,196             6,408               2,064             3,111             1,083             26,862
Net income                                    $  40,687          $ 24,109          $    7,767          $ 11,702          $  4,062          $  88,327



                                       38
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Net Interest Income and Margins


The following table sets forth the average balance, interest income or interest
expense, and average interest rate for each category of interest-earning assets
and interest-bearing liabilities, net interest spread, and net interest margin
on average interest-earning assets for the three months ended June 30, 2022 and
2021. Federally tax-exempt income is presented on a taxable-equivalent basis
assuming a 21% federal tax rate.

                                                                                             Quarter Ended June 30,
                                                                        2022                                                         2021
                                                                       Interest            Average                                  Interest            Average
                                                   Average             Income/             Yield/               Average             Income/             Yield/
(dollars in thousands)                             Balance             Expense            Rate Paid             Balance             Expense            Rate Paid
Assets
Interest-earning assets:
Federal funds sold, interest-bearing
deposits in banks, and time deposits in other
banks                                          $  2,227,453          $   4,495              0.81%           $  2,481,336          $     607          

0.10%

Investment securities                             1,021,610              7,405              2.91%                857,079              5,420          

2.54%

Loans held for sale                                 944,964             10,036              4.26%              1,705,167             11,773              2.77%
Loans                                            16,861,674            181,602              4.32%             14,549,104            157,112              4.33%
Total interest-earning assets                    21,055,701            203,538              3.88%             19,592,686            174,912              3.58%
Noninterest-earning assets                        2,349,500                                                    1,946,208
Total assets                                   $ 23,405,201                                                 $ 21,538,894

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits   $  9,790,029          $   3,590              0.15%           $  9,063,721          $   2,846              0.13%
Time deposits                                     1,693,740              1,318              0.31%              2,006,265              2,929              0.59%
Securities sold under agreements to repurchase        1,854                  1              0.22%                  6,883                  5              0.29%
FHLB advances                                        48,746                192              1.58%                 48,910                193              1.58%
Other borrowings                                    376,829              4,437              4.72%                376,376              4,683              4.99%
Subordinated deferrable interest debentures         127,063              1,666              5.26%                125,068              1,243          

3.99%

Total interest-bearing liabilities               12,038,261             11,204              0.37%             11,627,223             11,899              0.41%
Demand deposits                                   7,955,765                                                    6,874,471
Other liabilities                                   367,895                                                      238,931
Shareholders' equity                              3,043,280                                                    2,798,269
Total liabilities and shareholders' equity     $ 23,405,201                                                 $ 21,538,894
Interest rate spread                                                                        3.51%                                                        3.17%
Net interest income                                                  $ 192,334                                                    $ 163,013
Net interest margin                                                                         3.66%                                                        3.34%



On a tax-equivalent basis, net interest income for the second quarter of 2022
was $192.3 million, an increase of $29.3 million, or 18.0%, compared with $163.0
million reported in the same quarter in 2021. The higher net interest income is
primarily a result of growth in investment securities and loans complemented by
disciplined deposit repricing. Average interest earning assets increased $1.46
billion, or 7.5%, from $19.59 billion in the second quarter of 2021 to $21.06
billion for the second quarter of 2022. This growth in interest earning assets
resulted primarily from organic loan growth, loans acquired from Balboa Capital
and excess liquidity from deposit growth. The Company's net interest margin
during the second quarter of 2022 was 3.66%, up 32 basis points from 3.34%
reported in the second quarter of 2021. Loan production in the lines of business
(including retail mortgage, warehouse lending, SBA and premium finance) amounted
to $5.3 billion during the second quarter of 2022, with weighted average yields
of 4.29%, compared with $6.4 billion and 3.36%, respectively, during the second
quarter of 2021. Loan production in the banking division amounted to $1.1
billion during the second quarter of 2022, with weighted average yields of
5.24%, compared with $911.3 million and 3.75%, respectively, during the second
quarter of 2021.

Total interest income, on a tax-equivalent basis, increased to $203.5 million
during the second quarter of 2022, compared with $174.9 million in the same
quarter of 2021.  Yields on earning assets increased to 3.88% during the second
quarter of 2022, compared with 3.58% reported in the second quarter of 2021.
During the second quarter of 2022, loans comprised 84.6% of average earning
assets, compared with 83.0% in the same quarter of 2021. Yields on loans
decreased to 4.32% in the second quarter of 2022, compared with 4.33% in the
same period of 2021. Accretion income for the second quarter of 2022 was
negative $379,000, compared with $4.5 million in the second quarter of 2021.

                                       39
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The yield on total interest-bearing liabilities decreased from 0.41% in the
second quarter of 2021 to 0.37% in the second quarter of 2022. Total funding
costs, inclusive of noninterest-bearing demand deposits, decreased to 0.22% in
the second quarter of 2022, compared with 0.26% during the second quarter of
2021. Deposit costs decreased from 0.13% in the second quarter of 2021 to 0.10%
in the second quarter of 2022. Non-deposit funding costs increased from 4.41% in
the second quarter of 2021 to 4.55% in the second quarter of 2022. Average
balances of interest bearing deposits and their respective costs for the second
quarter of 2022 and 2021 are shown below:

                                                                      Three Months Ended                         Three Months Ended
                                                                        June 30, 2022                              June 30, 2021
                                                                 Average               Average              Average               Average
(dollars in thousands)                                           Balance                Cost                Balance                Cost
NOW                                                          $   3,695,490              0.14%           $   3,314,334              0.10%
MMDA                                                             5,087,199              0.17%               4,872,500              0.16%
Savings                                                          1,007,340              0.06%                 876,887              0.06%
Retail CDs                                                       1,693,740              0.31%               2,005,265              0.58%
Brokered CDs                                                             -               -%                     1,000              3.21%
Interest-bearing deposits                                    $  11,483,769              0.17%           $  11,069,986              0.21%



Provision for Credit Losses

The Company's provision for credit losses during the second quarter of 2022
amounted to $14.9 million, compared with a provision of $142,000 in the second
quarter of 2021. This increase was attributable to organic growth in loans
during the quarter. The provision for credit losses for the second quarter of
2022 was comprised of $13.2 million related to loans, $1.8 million related to
unfunded commitments and negative $82,000 related to other credit losses,
compared with negative $899,000 related to loans, $1.3 million related to
unfunded commitments and negative $258,000 related to other credit losses for
the second quarter of 2021. Non-performing assets as a percentage of total
assets increased from 0.43% at December 31, 2021 to 0.56% at June 30, 2022. The
increase in non-performing assets is primarily attributable to an increase in
nonaccruing loans as a result of rebooked GNMA loans, which the Company has the
right, but not the obligation, to repurchase, and one commercial real estate
loan totaling $10.4 million. The Company recognized net charge-offs on loans
during the second quarter of 2022 of approximately $1.8 million, or 0.04% of
average loans on an annualized basis, compared with net charge-offs of
approximately $2.6 million, or 0.07%, in the second quarter of 2021. The
Company's total allowance for credit losses on loans at June 30, 2022 was $172.6
million, or 0.98% of total loans, compared with $167.6 million, or 1.06% of
total loans, at December 31, 2021. This increase is primarily attributable to
organic growth in loans, partially offset by improvement in forecast economic
conditions.

Noninterest Income

Total noninterest income for the second quarter of 2022 was $83.8 million, a
decrease of $5.4 million, or 6.0%, from the $89.2 million reported in the second
quarter of 2021.  Income from mortgage banking activities was $58.8 million in
the second quarter of 2022, a decrease of $11.5 million, or 16.3%, from $70.2
million in the second quarter of 2021. Total production in the second quarter of
2022 amounted to $1.73 billion, compared with $2.39 billion in the same quarter
of 2021, while spread (gain on sale) decreased to 2.36% in the current quarter,
compared with 2.77% in the same quarter of 2021. The retail mortgage open
pipeline finished the second quarter of 2022 at $832.3 million, compared with
$1.41 billion at March 31, 2022 and $1.75 billion at the end of the second
quarter of 2021. Service charges on deposit accounts increased $141,000, or
1.3%, to $11.1 million in the second quarter of 2022, compared with $11.0
million in the second quarter of 2021. This increase in service charges on
deposit accounts is due primarily to an increase in volume, particularly in
business accounts.

Other noninterest income increased $5.7 million, or 82.7%, to $12.7 million for
the second quarter of 2022, compared with $6.9 million during the second quarter
of 2021. The increase in other noninterest income was primarily attributable to
fee income from Balboa of $5.3 million and an increase in BOLI income of
$614,000, partially offset by a decrease in gains on sales of SBA loans of $1.1
million.

Noninterest Expense

Total noninterest expense for the second quarter of 2022 increased $6.4 million,
or 4.7%, to $142.2 million, compared with $135.8 million in the same quarter
2021. Salaries and employee benefits decreased $4.0 million, or 4.6%, from $85.5
million in the second quarter of 2021 to $81.5 million in the second quarter of
2022, due primarily to decreases in variable compensation tied to mortgage
production of $11.4 million, partially offset by salaries and employee benefits
related to Balboa of $10.9 million. Occupancy and equipment expenses increased
$1.9 million, or 17.9%, to $12.7 million for the second quarter of 2022,
                                       40
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compared with $10.8 million in the second quarter of 2021, due primarily to
additional expenses related to Balboa and an increase in real estate taxes. Data
processing and communications expenses increased $278,000, or 2.3%, to $12.2
million in the second quarter of 2022, compared with $11.9 million in the second
quarter of 2021. Advertising and marketing expense was $3.1 million in the
second quarter of 2022, compared with $1.9 million in the second quarter of
2021. This increase was primarily related to a new marketing campaign.
Amortization of intangible assets increased $1.1 million, or 26.5%, from $4.1
million in the second quarter of 2021 to $5.1 million in the second quarter of
2022. This increase was primarily related to intangibles from the acquisition of
Balboa Capital Corporation in December 2021, partially offset by a reduction in
core deposit intangible amortization. Loan servicing expenses increased $5.0
million, or 101.9%, from $4.9 million in the second quarter of 2021 to $9.9
million in the second quarter of 2022, primarily attributable to additional
mortgage loans serviced resulting from strong mortgage production over the
previous year. Other noninterest expenses increased $1.0 million, or 6.5%, from
$16.0 million in the second quarter of 2021 to $17.1 million in the second
quarter of 2022, due primarily to an increase of $1.2 million in legal fees and
an increase in insurance expense to the Federal Deposit Insurance Corporation
(the "FDIC") of $385,000. These increases in other noninterest expenses were
partially offset by a decrease in problem loan expenses of $125,000 resulting
from an increase in net gains on OREO.

Income Taxes


Income tax expense is influenced by the statutory rate, the amount of taxable
income, the amount of tax-exempt income and the amount of nondeductible
expenses.  For the second quarter of 2022, the Company reported income tax
expense of $28.0 million, compared with $26.9 million in the same period of
2021. The Company's effective tax rate for the three months ending June 30, 2022
and 2021 was 23.7% and 23.3%, respectively. The increase in the effective tax
rate is primarily a result of increased state taxes in the second quarter of
2022 resulting from shifts in apportionment related to the Balboa Capital
acquisition.

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Results of Operations for the Six Months Ended June 30, 2022 and 2021

Consolidated Earnings and Profitability


Ameris reported net income available to common shareholders of $171.8 million,
or $2.47 per diluted share, for the six months ended June 30, 2022, compared
with $213.3 million, or $3.06 per diluted share, for the same period in
2021. The Company's return on average assets and average shareholders' equity
were 1.48% and 11.47%, respectively, in the six months ended June 30, 2022,
compared with 2.03% and 15.66%, respectively, in the same period in 2021. During
the first six months of 2022, the Company recorded pre-tax merger and conversion
charges of $977,000, pre-tax servicing right recovery of $20.5 million and
pre-tax gain on bank premises of $45,000. During the first six months of 2021,
the Company recorded pre-tax servicing right recovery of $11.4 million, pre-tax
gain on BOLI proceeds of $603,000 and pre-tax gain on bank premises of $500,000.
Excluding these adjustment items, the Company's net income would have been
$156.5 million, or $2.25 per diluted share, for the six months ended June 30,
2022 and $203.3 million, or $2.91 per diluted share, for the same period in
2021.

Below is a reconciliation of adjusted net income to net income, as discussed
above.
                                                                                    Six Months Ended
                                                                                        June 30,
(in thousands, except share and per share data)                                2022                  2021
Net income available to common shareholders                               $    171,764          $    213,289
Adjustment items:
Merger and conversion charges                                                      977                     -

Servicing right recovery                                                   
   (20,492)              (11,388)
Gain on BOLI proceeds                                                                -                  (603)

Gain on bank premises                                                              (45)                 (500)
Tax effect of adjustment items (Note 1)                                          4,308                 2,496
After tax adjustment items                                                     (15,252)               (9,995)
Adjusted net income                                                       $ 

156,512 $ 203,294


Weighted average common shares outstanding - diluted                        69,484,508            69,764,923
Net income per diluted share                                              $       2.47          $       3.06
Adjusted net income per diluted share                                     $ 

2.25 $ 2.91


Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is
non-taxable and no tax effect is included. A portion of the merger and conversion charges for the six months
ended June 30, 2022 is nondeductible for tax purposes.



                                       42
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Below is additional information regarding the retail banking activities,
mortgage banking activities, warehouse lending activities, SBA activities and
premium finance activities of the Company during the six months ended June 30,
2022 and 2021, respectively:

                                                                                          Six Months Ended
                                                                                            June 30, 2022
                                                                   Retail           Warehouse                             Premium
                                                Banking           Mortgage           Lending              SBA              Finance
(dollars in thousands)                          Division          Division           Division          Division           Division            Total
Interest income                               $ 271,134          $ 70,887          $  15,289          $ 11,537          $  17,095          $ 385,942
Interest expense                                (14,733)           30,813              2,142             1,728              2,084             22,034
Net interest income                             285,867            40,074             13,147             9,809             15,011            363,908
Provision for loan losses                        15,401             6,086                645              (666)              (311)            21,155
Noninterest income                               44,833           119,444              2,442             4,017                 16            170,752
Noninterest expense
Salaries and employee benefits                   95,928            62,833                491             2,587              3,987            165,826
Occupancy and equipment                          22,242             2,877                  2               180                172             25,473
Data processing and communications expenses      22,093             2,295                 95                57                187             24,727
Other expenses                                   41,168            25,457                430               919              2,016             69,990
Total noninterest expense                       181,431            93,462              1,018             3,743              6,362            286,016
Income before income tax expense                133,868            59,970             13,926            10,749              8,976            227,489
Income tax expense                               36,116            12,594              2,925             2,257              1,833             55,725
Net income                                    $  97,752          $ 47,376          $  11,001          $  8,492          $   7,143          $ 171,764



                                                                                          Six Months Ended
                                                                                           June 30, 2021
                                                                   Retail           Warehouse                             Premium
                                                Banking           Mortgage           Lending              SBA             Finance
(dollars in thousands)                          Division          Division           Division          Division          Division            Total
Interest income                               $ 221,639          $ 64,284          $  19,315          $ 32,084          $ 14,379          $ 351,701
Interest expense                                 (1,847)           22,767                689             2,567               696             24,872
Net interest income                             223,486            41,517             18,626            29,517            13,683            326,829
Provision for loan losses                       (27,853)            1,094               (300)           (1,154)             (236)           (28,449)
Noninterest income                               32,909           166,695              2,313             5,288                 8            207,213
Noninterest expense
Salaries and employee benefits                   80,537            94,636                608             2,319             3,390            181,490
Occupancy and equipment                          19,170             3,029                  2               238               154             22,593
Data processing and communications expenses      20,481             2,981                117                 1               181             23,761
Other expenses                                   38,473            15,827                 63               579             1,773             56,715
Total noninterest expense                       158,661           116,473                790             3,137             5,498            284,559
Income before income tax expense                125,587            90,645             20,449            32,822             8,429            277,932
Income tax expense                               32,652            19,035              4,294             6,893             1,769             64,643
Net income                                    $  92,935          $ 71,610          $  16,155          $ 25,929          $  6,660          $ 213,289



                                       43
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Net Interest Income and Margins


The following table sets forth the average balance, interest income or interest
expense, and average yield/rate paid for each category of interest-earning
assets and interest-bearing liabilities, net interest spread, and net interest
margin on average interest-earning assets for the six months ended June 30, 2022
and 2021. Federally tax-exempt income is presented on a taxable-equivalent basis
assuming a 21% federal tax rate.

                                                                                                 Six Months Ended
                                                                                                     June 30,
                                                                         2022                                                         2021
                                                                        Interest            Average                                  Interest            Average
                                                    Average             Income/             Yield/               Average             Income/             Yield/
(dollars in thousands)                              Balance             Expense            Rate Paid             Balance             Expense            Rate Paid
Assets
Interest-earning assets:
Federal funds sold, interest-bearing deposits
 in banks, and time deposits in other banks     $  2,817,071          $   5,878              0.42%           $  2,324,365          $   1,141              0.10%
Investment securities                                862,178             11,879              2.78%                907,049             11,716              2.60%
Loans held for sale                                1,020,611             18,168              3.59%              1,496,155             22,600              3.05%
Loans                                             16,344,409            352,000              4.34%             14,501,802            318,585              4.43%
Total interest-earning assets                     21,044,269            387,925              3.72%             19,229,371            354,042              3.71%
Noninterest-earning assets                         2,296,516                                                    1,915,380
Total assets                                    $ 23,340,785                                                 $ 21,144,751

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits    $  9,844,422          $   6,190              0.13%           $  8,915,964          $   5,894              0.13%
Time deposits                                      1,733,656              2,810              0.33%              2,036,668              6,679              0.66%
Federal funds purchased and securities sold            2,931                  4              0.28%                  8,077                 12            

0.30%

under agreements to repurchase
FHLB advances                                         48,766                382              1.58%                 48,931                385              1.59%
Other borrowings                                     410,058              9,601              4.72%                376,318              9,321              4.99%
Subordinated deferrable interest debentures          126,814              3,047              4.85%                124,823              2,581          

4.17%

Total interest-bearing liabilities                12,166,647             22,034              0.37%             11,510,781             24,872              0.44%
Demand deposits                                    7,807,929                                                    6,644,646
Other liabilities                                    347,109                                                      242,402
Shareholders' equity                               3,019,100                                                    2,746,922
Total liabilities and shareholders' equity      $ 23,340,785                                                 $ 21,144,751
Interest rate spread                                                                         3.35%                                                        3.27%
Net interest income                                                   $ 365,891                                                    $ 329,170
Net interest margin                                                                          3.51%                                                        3.45%



On a tax-equivalent basis, net interest income for the six months ended June 30,
2022 was $365.9 million, an increase of $36.7 million, or 11.2%, compared with
$329.2 million reported in the same period of 2021. The higher net interest
income is a result of growth in average earning assets and disciplined deposit
pricing. Average interest earning assets increased $1.81 billion, or 9.4%, from
$19.23 billion in the first six months of 2021 to $21.04 billion for the first
six months of 2022. This growth in interest earning assets resulted primarily
from organic growth in average loans and loans acquired from Balboa Capital. The
Company's net interest margin during the first six months of 2022 was 3.51%, up
six basis points from 3.45% reported for the first six months of 2021. Loan
production in the lines of business (including retail mortgage, warehouse
lending, SBA and premium finance) amounted to $10.0 billion during the first six
months of 2022, with weighted average yields of 3.98%, compared with $13.9
billion and 3.25%, respectively, during the first six months of 2021. Loan
production yields in the lines of business were negatively impacted seven basis
points during the first six months of 2021 by originations of Paycheck
Protection Program loans in our SBA division. Loan production in the banking
division amounted to $1.9 billion during the first six months of 2022 with
weighted average yields of 5.21%, compared with $1.5 billion and 3.77%,
respectively, during the first six months of 2021.

Total interest income, on a tax-equivalent basis, increased to $387.9 million
during the six months ended June 30, 2022, compared with $354.0 million in the
same period of 2021. Yields on earning assets increased to 3.72% during the
first six months of 2022, compared with 3.71% reported in the same period of
2021. During the first six months of 2022, loans comprised 82.5% of average
earning assets, compared with 83.2% in the same period of 2021. Yields on loans
decreased to
                                       44
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4.34% during the six months ended June 30, 2022, compared with 4.43% in the same
period of 2021. Accretion income for the first six months of 2022 was $627,000,
compared with $10.6 million in the first six months of 2021.

The yield on total interest-bearing liabilities decreased from 0.44% during the
six months ended June 30, 2021 to 0.37% in the same period of 2022. Total
funding costs, inclusive of noninterest-bearing demand deposits, decreased to
0.22% in the first six months of 2022, compared with 0.28% during the same
period of 2021. Deposit costs decreased from 0.14% in the first six months of
2021 to 0.09% in the same period of 2022. Non-deposit funding costs increased
from 4.44% in the first six months of 2021 to 4.47% in the same period of 2022.
The increase in non-deposit funding costs was driven primarily by an increase in
index rates. Average balances of interest bearing deposits and their respective
costs for the six months ended June 30, 2022 and 2021 are shown below:

                                     Six Months Ended                      Six Months Ended
                                      June 30, 2022                         June 30, 2021
                                  Average            Average            Average            Average
(dollars in thousands)            Balance             Cost              Balance             Cost
NOW                         $       3,690,161         0.11%       $       3,248,655         0.11%
MMDA                                5,163,636         0.15%               4,817,197         0.16%
Savings                               990,625         0.06%                 850,112         0.06%
Retail CDs                          1,733,656         0.33%               2,035,668         0.66%
Brokered CDs                                -          -%                  

1,000 2.82% Interest-bearing deposits $ 11,578,078 0.16% $ 10,952,632 0.23%

Provision for Credit Losses


The Company's provision for credit losses during the six months ended June 30,
2022 amounted to $21.2 million, compared with negative $28.4 million in the six
months ended June 30, 2021. This increase was primarily attributable to organic
growth in loans during the first six months of 2022 and a release of reserves in
the six months ended June 30, 2021 which resulted from an improved economic
forecast, particularly levels of unemployment, home prices and gross domestic
product. The provision for credit losses for the first six months of 2022 was
comprised of $10.5 million related to loans, $10.8 million related to unfunded
commitments and negative $126,000 related to other credit losses compared with
negative $17.5 million related to loans, negative $10.5 million related to
unfunded commitments and negative $431,000 related to other credit losses for
the same period in 2021. Non-performing assets as a percentage of total assets
increased from 0.43% at December 31, 2021 to 0.56% at June 30, 2022. The
increase in non-performing assets is primarily attributable to an increase in
nonaccruing loans as a result of rebooked GNMA loans, which the Company has the
right, but not the obligation, to repurchase, and one commercial real estate
loan totaling $10.4 million. Net charge-offs on loans during the first six
months of 2022 were $5.4 million, or 0.07% of average loans on an annualized
basis, compared with approximately $6.9 million, or 0.10%, in the first six
months of 2021. The Company's total allowance for credit losses on loans at June
30, 2022 was $172.6 million, or 0.98% of total loans, compared with $167.6
million, or 1.06% of total loans, at December 31, 2021. This increase is
primarily attributable to organic growth in loans, partially offset by
improvement in forecast economic conditions.

Noninterest Income


Total noninterest income for the six months ended June 30, 2022 was $170.8
million, a decrease of $36.5 million, or 17.6%, from the $207.2 million reported
for the six months ended June 30, 2021.  Income from mortgage banking activities
decreased $47.0 million, or 27.9%, from $168.7 million in the first six months
of 2021 to $121.7 million in the same period of 2022. Total production in the
first six months of 2022 amounted to $3.26 billion, compared with $5.03 billion
in the same period of 2021, while spread (gain on sale) decreased to 2.63%
during the six months ended June 30, 2022, compared with 3.39% in the same
period of 2021. The retail mortgage open pipeline was $832.3 million at June 30,
2022, compared with $1.62 billion at December 31, 2021 and $1.75 billion at June
30, 2021. Mortgage-related activities was positively impacted during the first
six months of 2022 by a recovery of previous mortgage servicing right impairment
of $20.5 million, compared with a recovery of $11.4 million for the same period
in 2021.

Other noninterest income increased $10.1 million, or 69.1%, to $24.7 million for
the first six months of 2022, compared with $14.6 million during the same period
of 2021. The increase in other noninterest income was primarily attributable to
an increase in fee income from Balboa Capital of $9.0 million, an increase in
BOLI income of $1.6 million and an increase in trust income of $473,000,
partially offset by a decrease of $603,000 in gain on BOLI proceeds.
                                       45
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Noninterest Expense


Total noninterest expenses for the six months ended June 30, 2022 increased $1.5
million, or 0.5%, to $286.0 million, compared with $284.6 million in the same
period of 2021. Salaries and employee benefits decreased $15.7 million, or 8.6%,
from $181.5 million in the first six months of 2021 to $165.8 million in the
same period of 2022 due primarily to decreases in variable compensation tied to
mortgage production and overtime in our mortgage division of $27.7 million and
$1.5 million, respectively, partially offset by an increase in salaries and
employee benefits related to Balboa Capital of $17.6 million. Occupancy and
equipment expenses increased $2.9 million, or 12.7%, to $25.5 million for the
first six months of 2022, compared with $22.6 million in the same period of
2021, due primarily to the addition of Balboa Capital and an increase in real
estate taxes. Data processing and communications expenses increased $966,000, or
4.1%, to $24.7 million in the first six months of 2022, from $23.8 million
reported in the same period of 2021. Credit resolution-related expenses
decreased $1.6 million, or 140.1%, from $1.2 million in the first six months of
2021 to negative $469,000 in the same period of 2022. This decrease in credit
resolution-related expenses primarily resulted from an increase in gain on sale
of OREO properties of $1.2 million. Advertising and marketing expense was $5.1
million in the first six months of 2022, compared with $3.4 million in the first
six months of 2021. Amortization of intangible assets increased $2.1 million, or
26.1%, from $8.2 million in the first six months of 2021 to $10.3 million in the
first six months of 2022. This increase was primarily related to amortization of
intangibles from the acquisition of Balboa Capital Corporation in December 2021,
partially offset by a reduction in core deposit intangible amortization. There
were $977,000 in merger and conversion charges in the first six months of 2022,
compared with none in the same period in 2021. Loan servicing expenses increased
$8.0 million, or 74.2%, from $10.8 million in the first six months of 2021 to
$18.8 million in the same period of 2022, primarily attributable to additional
mortgage loans serviced resulting from strong mortgage production over the
previous year. Other noninterest expenses increased $2.0 million, or 6.2%, from
$33.2 million in the first six months of 2021 to $35.2 million in the same
period of 2022, due primarily to an increase of $2.9 million in legal fees and
an increase of $1.3 million in FDIC insurance expense. These increases in other
noninterest expenses were partially offset by decreases in other losses of
$569,000 and variable expenses tied to production in our mortgage division.

Income Taxes


Income tax expense is influenced by the statutory rate, the amount of taxable
income, the amount of tax-exempt income and the amount of nondeductible
expenses. For the six months ended June 30, 2022, the Company reported income
tax expense of $55.7 million, compared with $64.6 million in the same period of
2021. The Company's effective tax rate for the six months ended June 30, 2022
and 2021 was 24.5% and 23.3%, respectively. The increase in the effective tax
rate is primarily a result of a discrete charge to the Company's state tax
liability and nondeductible merger and conversion charges incurred during the
first six months of 2022.

                                       46
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Financial Condition as of June 30, 2022

Securities


Debt securities classified as available-for-sale are recorded at fair value with
unrealized holding gains and losses excluded from earnings and reported in
accumulated other comprehensive income, net of the related deferred tax effect.
Securities available-for-sale may be bought and sold in response to changes in
market conditions, including, but not limited to, fluctuations in interest
rates, changes in securities' prepayment risk, increases in loan demand, general
liquidity needs and positioning the portfolio to take advantage of market
conditions that create more economically attractive returns. Debt securities are
classified as held-to-maturity based on management's positive intent and ability
to hold such securities to maturity and are carried at amortized
cost. Restricted equity securities are classified as other investment securities
and are carried at cost and are periodically evaluated for impairment based on
the ultimate recovery of par value or cost basis.

The amortization of premiums and accretion of discounts are recognized in
interest income using methods approximating the interest method over the
expected life of the securities. Realized gains and losses, determined on the
basis of the cost of specific securities sold, are included in earnings on the
trade date.

Management and the Company's ALCO Committee evaluate available-for-sale
securities in an unrealized loss position on at least a quarterly basis, and
more frequently when economic or market concerns warrant such evaluation, to
determine if credit-related impairment exists. Management first evaluates
whether they intend to sell or more likely than not will be required to sell an
impaired security before recovering its amortized cost basis. If either criteria
is met, the entire amount of unrealized loss is recognized in earnings with a
corresponding adjustment to the security's amortized cost basis. If either of
the above criteria is not met, management evaluates whether the decline in fair
value is attributable to credit or resulted from other factors. If
credit-related impairment exists, the Company recognizes an allowance for credit
losses, limited to the amount by which the fair value is less than the amortized
cost basis. Any impairment not recognized through an allowance for credit losses
is recognized in other comprehensive income, net of tax, as a non credit-related
impairment. The Company does not intend to sell these available-for-sale
investment securities at an unrealized loss position at June 30, 2022, and it is
more likely than not that the Company will not be required to sell these
securities prior to recovery or maturity. Based on the results of management's
review, at June 30, 2022, management determined that $88,000 was attributable to
credit impairment and, accordingly, an allowance for credit losses was
established. The remaining $16.7 million in unrealized loss was determined to be
from factors other than credit.

The Company's held-to-maturity securities have no expected credit losses, and no related allowance for credit losses has been established.


The following table is a summary of our investment portfolio at the dates
indicated:

                                                                    June 30, 2022                              December 31, 2021
                                                                                     Fair                                         Fair
(dollars in thousands)                                   Amortized Cost             Value              Amortized Cost            Value
Securities available-for-sale
U.S. Treasuries                                        $       314,613          $   312,889          $             -          $       -
U.S. government-sponsored agencies                               2,050                2,021                    7,084              7,172
State, county and municipal securities                          41,428               40,963                   45,470             47,812
Corporate debt securities                                       15,897               15,463                   27,897             28,496
SBA pool securities                                             35,854               34,431                   44,312             45,201
Mortgage-backed securities                                     658,508              646,501                  448,124            463,940
Total debt securities available-for-sale               $     1,068,350      

$ 1,052,268 $ 572,887 $ 592,621

Securities held-to-maturity


State, county and municipal securities                 $        31,905      

$ 27,626 $ 8,905 $ 8,711


Mortgage-backed securities                                      79,749               69,518                   70,945             69,495
Total debt securities held-to-maturity                 $       111,654          $    97,144          $        79,850          $  78,206



                                       47
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The amounts of securities available-for-sale and held-to-maturity in each
category as of June 30, 2022 are shown in the following table according to
contractual maturity classifications: (i) one year or less; (ii) after one year
through five years; (iii) after five years through ten years; and (iv) after ten
years:

                                                                                                                                                         State, County and
                                                                U.S. Treasuries                      U.S. Government-Sponsored Agencies                 Municipal Securities
(dollars in thousands)                                                           Yield                                            Yield                                  Yield
Securities available-for-sale (1)                          Amount                  (2)                   Amount                     (2)              Amount              (2)(3)
One year or less                                     $         -                      -  %       $              1,008               1.92  %       $    4,769               3.05  %
After one year through five years                        312,889                   2.53                         1,013               2.16              13,715               4.07
After five years through ten years                             -                      -                             -                  -              15,252        4      4.01
After ten years                                                -                      -                             -                  -               7,227               3.70
                                                     $   312,889                   2.53  %       $              2,021               2.04  %       $   40,963               3.86  %

                                                           Corporate Debt Securities                        SBA Pool Securities                      Mortgage-Backed Securities
(dollars in thousands)                                                           Yield                                            Yield                                  Yield
Securities available-for-sale (1)                          Amount                  (2)                   Amount                     (2)              Amount                (2)
One year or less                                     $       500                   3.88  %       $                477               2.10  %       $       21               2.40  %
After one year through five years                              -                      -                         9,663               2.07             113,977               2.99
After five years through ten years                        13,244                   4.71                         2,589               3.04             225,714               2.94
After ten years                                            1,719                   5.59                        21,702               2.50             306,789               3.03
                                                     $    15,463                   4.79  %       $             34,431               2.42  %       $  646,501               2.99  %

                                                               State, County and
                                                             Municipal Securities                        Mortgage-Backed Securities
(dollars in thousands)                                                           Yield                                            Yield
Securities held-to-maturity (1)                            Amount                (2)(3)                  Amount                     (2)
One year or less                                     $         -                      -  %       $                  -                  -  %
After one year through five years                              -                      -                        11,044               1.01
After five years through ten years                             -                      -                        26,103               2.03
After ten years                                           31,905                   3.93                        42,602               1.68
                                                     $    31,905                   3.93  %       $             79,749               1.70  %


(1)The amortized cost of securities held-to-maturity and fair value of
securities available-for-sale are presented based on contractual maturities.
Actual cash flows may differ from contractual maturities because borrowers may
have the right to prepay obligations without prepayment penalties.

(2)Yields were computed using coupon interest, adding discount accretion or
subtracting premium amortization, as appropriate, on a ratable basis over the
life of each security. The weighted average yield for each maturity range was
computed using the amortized cost of each security in that range.

(3)Yields on securities of state and political subdivisions are stated on a taxable-equivalent basis, using a tax rate of 21%.

Loans and Allowance for Credit Losses


At June 30, 2022, gross loans outstanding (including loans and loans held for
sale) were $18.12 billion, up $987.8 million from $17.13 billion reported at
December 31, 2021. Loans increased $1.69 billion, or 10.6%, from $15.87 billion
at December 31, 2021 to $17.56 billion at June 30, 2022, driven primarily by
organic growth. Loans held for sale decreased from $1.25 billion at December 31,
2021 to $555.7 million at June 30, 2022 primarily in our mortgage division.

The Company regularly monitors the composition of the loan portfolio to evaluate
the adequacy of the allowance for credit losses ("ACL") on loans in light of the
impact that changes in the economic environment may have on the loan portfolio.
The Company focuses on the following loan categories: (1) commercial, financial
and agricultural; (2) consumer installment; (3) indirect automobile; (4)
mortgage warehouse; (5) municipal; (6) premium finance; (7) construction and
development related real estate; (8) commercial and farmland real estate; and
(9) residential real estate. The Company's management has strategically located
its branches in select markets in Georgia, Alabama, Florida, North Carolina and
South Carolina to take advantage of the growth in these areas.
                                       48
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The Company's risk management processes include a loan review program designed
to evaluate the credit risk in the loan portfolio and ensure credit grade
accuracy. Through the loan review process, the Company conducts (1) a loan
portfolio summary analysis, (2) charge-off and recovery analysis, (3) trends in
accruing problem loan analysis, and (4) problem and past-due loan analysis. This
analysis process serves as a tool to assist management in assessing the overall
quality of the loan portfolio and the adequacy of the ACL. Loans classified as
"substandard" are loans which are inadequately protected by the current sound
worth and paying capacity of the borrower or of the collateral pledged. These
assets exhibit a well-defined weakness or are characterized by the distinct
possibility that the Company will sustain some loss if the deficiencies are not
corrected. These weaknesses may be characterized by past due performance,
operating losses and/or questionable collateral values. Loans classified as
"doubtful" are those loans that have characteristics similar to substandard
loans but have an increased risk of loss. Loans classified as "loss" are those
loans which are considered uncollectible and are in the process of being charged
off.

The Company estimates the ACL on loans based on the underlying assets' amortized
cost basis, which is the amount at which the financing receivable is originated
or acquired, adjusted for applicable accretion or amortization of premium,
discount, and net deferred fees or costs, collection of cash, and charge-offs.
In the event that collection of principal becomes uncertain, the Company has
policies in place to reverse accrued interest in a timely manner. Therefore, the
Company has made a policy election to exclude accrued interest from the
measurement of ACL, except for loans modified under the Disaster Relief Program.

Expected credit losses are reflected in the ACL through a charge to credit loss
expense. When the Company deems all or a portion of a financial asset to be
uncollectible the appropriate amount is written off and the ACL is reduced by
the same amount. The Company applies judgment to determine when a financial
asset is deemed uncollectible; however, generally speaking, an asset will be
considered uncollectible no later than when all efforts at collection have been
exhausted. Subsequent recoveries, if any, are credited to the ACL when received.

The Company measures expected credit losses of financial assets on a collective
(pool) basis, when the financial assets share similar risk characteristics.
Depending on the nature of the pool of financial assets with similar risk
characteristics, the Company currently uses the DCF method or the PD×LGD method
which may be adjusted for qualitative factors.

The Company's methodologies for estimating the ACL consider available relevant
information about the collectability of cash flows, including information about
past events, current conditions, and reasonable and supportable forecasts. The
methodologies apply historical loss information, adjusted for asset-specific
characteristics, economic conditions at the measurement date, and forecasts
about future economic conditions expected to exist through the contractual lives
of the financial assets that are reasonable and supportable, to the identified
pools of financial assets with similar risk characteristics for which the
historical loss experience was observed. The Company's methodologies revert back
to historical loss information on a straight-line basis over four quarters when
the Company can no longer develop reasonable and supportable forecasts.

At the end of the second quarter of 2022, the ACL on loans totaled $172.6
million, or 0.98% of loans, compared with $167.6 million, or 1.06% of loans, at
December 31, 2021. Our nonaccrual loans increased from $85.3 million at December
31, 2021 to $122.9 million at June 30, 2022. The increase in nonaccrual loans is
attributable to rebooked GNMA loans, which the Company has the right, but not
the obligation, to repurchase, and one commercial real estate loan totaling
$10.4 million. For the first six months of 2022, our net charge off ratio as a
percentage of average loans decreased to 0.07%, compared with 0.10% for the
first six months of 2021. The total provision for credit losses for the first
six months of 2022 was $21.2 million, increasing from a provision release of
$28.4 million recorded for the first six months of 2021. Our ratio of total
nonperforming assets to total assets increased from 0.43% at December 31, 2021
to 0.56% at June 30, 2022.

                                       49
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The following table presents an analysis of the allowance for credit losses on
loans, provision for credit losses on loans and net charge-offs as of and for
the six months ended June 30, 2022 and 2021:

                                                                        Six Months Ended
                                                                            June 30,
(dollars in thousands)                                              2022                 2021

Balance of allowance for credit losses on loans at beginning $ 167,582

         $   199,422
of period

Provision charged to operating expense                              10,493              (17,478)

Charge-offs:

Commercial, financial and agricultural                               8,805                5,899
Consumer installment                                                 2,562                3,117
Indirect automobile                                                    129                  970

Premium finance                                                      2,435                2,537
Real estate - construction and development                               -                  212
Real estate - commercial and farmland                                1,364                1,422
Real estate - residential                                              137                  555
Total charge-offs                                                   15,432               14,712

Recoveries:
Commercial, financial and agricultural                               5,681                1,352
Consumer installment                                                   388                  568
Indirect automobile                                                    540                1,072

Premium finance                                                      2,360                3,588
Real estate - construction and development                             573                  251
Real estate - commercial and farmland                                   81                  226
Real estate - residential                                              376                  781
Total recoveries                                                     9,999                7,838
Net charge-offs                                                      5,433                6,874
Balance of allowance for credit losses on loans at end of
period                                                         $   172,642          $   175,070


The following table presents an analysis of the allowance for credit losses on loans and net charge-offs for loans held for investment:


                                                                As of and for the Six Months Ended
(dollars in thousands)                                         June 30, 2022            June 30, 2021

Allowance for credit losses on loans at end of period $ 172,642

           $     175,070
Net charge-offs for the period                                         5,433                   6,874
Loan balances:
End of period                                                     17,561,022              14,780,791
Average for the period                                            16,344,409              14,501,802
Net charge-offs as a percentage of average loans                        0.07   %                0.10  %

(annualized)

Allowance for credit losses on loans as a percentage of end             0.98   %                1.18  %
of period loans



                                       50
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Loans

Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table:


(dollars in thousands)                        June 30, 2022      December 31, 2021
Commercial, financial and agricultural       $   2,022,845      $        1,875,993
Consumer installment                               167,237                 191,298
Indirect automobile                                172,245                 265,779
Mortgage warehouse                                 949,191                 787,837
Municipal                                          529,268                 572,701
Premium finance                                    942,357                 798,409
Real estate - construction and development       1,747,284               

1,452,339

Real estate - commercial and farmland            7,156,017               6,834,917
Real estate - residential                        3,874,578               3,094,985
                                             $  17,561,022      $       15,874,258



Non-Performing Assets

Non-performing assets include nonaccrual loans, accruing loans contractually
past due 90 days or more, repossessed personal property, and OREO. Loans are
placed on nonaccrual status when management has concerns relating to the ability
to collect the principal and interest and generally when such loans are 90 days
or more past due. Management performs a detailed review and valuation assessment
of non-performing loans over $250,000 on a quarterly basis. When a loan is
placed on nonaccrual status, any interest previously accrued but not collected
is reversed against current income.

Nonaccrual loans totaled $122.9 million at June 30, 2022, an increase of $37.6
million, or 44.2%, from $85.3 million at December 31, 2021. Accruing loans
delinquent 90 days or more totaled $8.5 million at June 30, 2022, a decrease of
$4.1 million, or 32.5%, compared with $12.6 million at December 31, 2021. At
June 30, 2022, OREO totaled $835,000, a decrease of $3.0 million, or 78.1%,
compared with $3.8 million at December 31, 2021. Management regularly assesses
the valuation of OREO through periodic reappraisal and through inquiries
received in the marketing process.  At the end of the second quarter of 2022,
total non-performing assets as a percent of total assets increased to 0.56%
compared with 0.43% at December 31, 2021.

Non-performing assets at June 30, 2022 and December 31, 2021 were as follows:

(dollars in thousands)                        June 30, 2022       December 31, 2021
Nonaccrual loans                             $      122,912      $           85,266
Accruing loans delinquent 90 days or more             8,542                  12,648
Repossessed assets                                      122                      84
Other real estate owned                                 835                   3,810
Total non-performing assets                  $      132,411      $          101,808



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Troubled Debt Restructurings

The restructuring of a loan is considered a "troubled debt restructuring" if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession.


As of June 30, 2022 and December 31, 2021, the Company had a balance of $41.8
million and $76.6 million, respectively, in troubled debt restructurings. These
totals do not include COVID-19 loan modifications accounted for under Section
4013 of the CARES Act. The following table presents the amount of troubled debt
restructurings by loan class classified separately as accrual and nonaccrual at
June 30, 2022 and December 31, 2021:

June 30, 2022                                             Accruing Loans                              Non-Accruing Loans
                                                                         Balance                                      Balance
Loan Class                                          #                 (in thousands)               #              (in thousands)
Commercial, financial and agricultural              9               $           964                3             $          364
Consumer installment                                4                             9               10                         14
Indirect automobile                                196                          759               30                        122

Premium finance                                     6                           993                -                          -
Real estate - construction and development          2                           706                -                          -
Real estate - commercial and farmland               18                        8,213                4                        788
Real estate - residential                          210                       24,456               31                      4,369
Total                                              445              $        36,100               78             $        5,657



December 31, 2021                                        Accruing Loans                              Non-Accruing Loans
                                                                        Balance                                     Balance
Loan Class                                         #                 (in thousands)              #               (in thousands)
Commercial, financial and agricultural             12              $         1,286               6             $            83
Consumer installment                               7                            16               17                         35
Indirect automobile                               233                        1,037               52                        273

Real estate - construction and development         4                           789               1                          13
Real estate - commercial and farmland              25                       35,575               5                       5,924
Real estate - residential                         213                       26,879               39                      4,678
Total                                             494              $        65,582              120            $        11,006



The following table presents the amount of troubled debt restructurings by loan
class classified separately as those currently paying under restructured terms
and those that have defaulted (defined as 30 days past due) under restructured
terms at June 30, 2022 and December 31, 2021:

                                                     Loans Currently Paying                   Loans that have Defaulted Under
June 30, 2022                                       Under Restructured Terms                        Restructured Terms
                                                                       Balance                                      Balance
Loan Class                                         #                (in thousands)               #              (in thousands)
Commercial, financial and agricultural             11             $           971                1             $          357
Consumer installment                               8                           13                6                         10
Indirect automobile                               182                         697               44                        184

Premium finance                                    6                          993                -                          -
Real estate - construction and development         2                          706                -                          -
Real estate - commercial and farmland              21                       8,993                1                          8
Real estate - residential                         198                      23,052               43                      5,773
Total                                             428             $        35,425               95             $        6,332



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                                                    Loans Currently Paying                   Loans that have Defaulted Under
December 31, 2021                                  Under Restructured Terms                        Restructured Terms
                                                                      Balance                                      Balance
Loan Class                                        #                (in thousands)               #              (in thousands)
Commercial, financial and agricultural            11             $         1,269                7             $          100
Consumer installment                              10                          17               14                         34
Indirect automobile                              233                       1,052               52                        258

Real estate - construction and development        4                          789                1                         13
Real estate - commercial and farmland             29                      41,452                1                         47
Real estate - residential                        215                      26,956               37                      4,601
Total                                            502             $        71,535               112            $        5,053



The following table presents the amount of troubled debt restructurings by types
of concessions made, classified separately as accrual and nonaccrual at June 30,
2022 and December 31, 2021:

June 30, 2022                                           Accruing Loans                              Non-Accruing Loans
                                                                       Balance                                      Balance
Type of Concession                                #                 (in thousands)               #              (in thousands)
Forgiveness of interest                           3               $           283                -             $            -
Forbearance of interest                           15                        1,070                1                         41

Forbearance of principal                         288                       21,748               49                      4,725

Rate reduction only                               54                        5,311                2                        160

Rate reduction, forbearance of interest           32                        2,385                2                         25
Rate reduction, forbearance of principal          17                        2,336               21                        573
Rate reduction, forgiveness of interest           36                        2,967                3                        133

Total                                            445              $        36,100               78             $        5,657



December 31, 2021                                        Accruing Loans                              Non-Accruing Loans
                                                                        Balance                                     Balance
Type of Concession                                 #                 (in thousands)              #               (in thousands)
Forgiveness of interest                            3               $           287               -             $             -
Forbearance of interest                            16                        1,218               1                          15

Forbearance of principal                          332                       49,778               73                      9,783

Rate reduction only                                55                        6,321               4                         200
Rate reduction, maturity extension                 -                             -               1                           1
Rate reduction, forbearance of interest            33                        2,296               6                         319
Rate reduction, forbearance of principal           18                        2,694               29                        363
Rate reduction, forgiveness of interest            37                        2,988               6                         325

Total                                             494              $        65,582              120            $        11,006



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The following table presents the amount of troubled debt restructurings by collateral types, classified separately as accrual and nonaccrual at June 30, 2022 and December 31, 2021:

June 30, 2022                                                  Accruing Loans                              Non-Accruing Loans
                                                                              Balance                                      Balance
Collateral Type                                          #                 (in thousands)               #              (in thousands)
Warehouse                                                3               $            57                2             $          251
Raw land                                                 3                         1,751                2                         51
Hotel and motel                                          1                           130                -                          -
Office                                                   4                           613                -                          -
Retail, including strip centers                          7                         3,978                1                        496
1-4 family residential                                  210                       24,456               30                      4,359
Church                                                   2                         2,390                -                          -

Automobile/equipment/CD                                 209                        1,732               43                        500

Unsecured                                                6                           993                -                          -
Total                                                   445              $        36,100               78             $        5,657



December 31, 2021                          Accruing Loans                   Non-Accruing Loans
                                                     Balance                              Balance
Collateral Type                        #         (in thousands)           #           (in thousands)
Warehouse                              3        $            61           2          $           272
Raw land                               6                  3,776           1                       13

Hotel and motel                        4                 22,069           1                    4,798
Office                                 5                    710           1                      485
Retail, including strip centers        8                  7,118           1                      370
1-4 family residential                215                27,129           39                   4,678
Church                                 2                  2,393           -                        -
Automobile/equipment/CD               251                 2,326           75                     390

Total                                 494       $        65,582          120         $        11,006



Commercial Lending Practices

The federal bank regulatory agencies previously issued interagency guidance on
commercial real estate lending and prudent risk management practices. This
guidance defines commercial real estate ("CRE") loans as loans secured by raw
land, land development and construction (including one-to-four family
residential construction), multi-family property and non-farm nonresidential
property where the primary or a significant source of repayment is derived from
rental income associated with the property, excluding owner-occupied
properties (loans for which 50% or more of the source of repayment is derived
from the ongoing operations and activities conducted by the party, or affiliate
of the party, who owns the property) or the proceeds of the sale, refinancing or
permanent financing of the property. Loans for owner-occupied CRE are generally
excluded from the CRE guidance.

The CRE guidance is applicable when either:


(1)total loans for construction, land development, and other land, net of
owner-occupied loans, represent 100% or more of a tier I capital plus allowance
for credit losses on loans and leases; or
(2)total loans secured by multifamily and nonfarm nonresidential properties and
loans for construction, land development, and other land, net of owner-occupied
loans, represent 300% or more of a bank's tier I capital plus allowance for
credit losses on loans and leases.

Banks that are subject to the CRE guidance criteria are required to implement
enhanced strategic planning, CRE underwriting policies, risk management and
internal controls, portfolio stress testing, risk exposure limits, and other
policies, including management compensation and incentives, to address the CRE
risks. Higher allowances for loan losses and capital levels may also be
appropriate.

As of June 30, 2022, the Company exhibited a concentration in the CRE loan category based on Federal Reserve Call codes. The primary risks of CRE lending are:

                                       54
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(1)within CRE loans, construction and development loans are somewhat dependent
upon continued strength in demand for residential real estate, which is
reliant on favorable real estate mortgage rates and changing population
demographics;
(2)on average, CRE loan sizes are generally larger than non-CRE loan types; and
(3)certain construction and development loans may be less predictable and more
difficult to evaluate and monitor.

The following table outlines CRE loan categories and CRE loans as a percentage
of total loans as of June 30, 2022 and December 31, 2021. The loan categories
and concentrations below are based on Federal Reserve Call codes:

                                                                  June 30, 2022                                 December 31, 2021
                                                                               % of Total                                        % of Total
(dollars in thousands)                                    Balance                 Loans                   Balance                   Loans
Construction and development loans                    $   1,747,284                10%             $        1,452,339                9%
Multi-family loans                                          693,382                4%                         596,000                4%
Nonfarm non-residential loans (excluding
owner-occupied)                                           4,539,983                26%                      4,341,436                27%
Total CRE Loans (excluding owner-occupied)                6,980,649                40%                      6,389,775                40%
All other loan types                                     10,580,373                60%                      9,484,483                60%
Total Loans                                           $  17,561,022               100%             $       15,874,258               100%



The following table outlines the percentage of construction and development
loans and total CRE loans, net of owner-occupied loans, to the Bank's tier I
capital plus allowance for credit losses on loans and leases, and the Company's
internal concentration limits as of June 30, 2022 and December 31, 2021:

                                                          Internal                                 Actual
                                                           Limit                June 30, 2022               December 31, 2021
Construction and development loans                          100%                     72%                           66%
Total CRE loans (excluding owner-occupied)                  300%                     288%                          291%



Short-Term Investments

The Company's short-term investments are comprised of federal funds sold and
interest-bearing deposits in banks. At June 30, 2022, the Company's short-term
investments were $1.96 billion, compared with $3.76 billion at December 31,
2021. At June 30, 2022, the Company had $5.0 million in federal funds sold and
$1.96 billion was in interest-bearing deposit balances at correspondent banks
and the Federal Reserve Bank of Atlanta.

Derivative Instruments and Hedging Activities


The Company has forward contracts and IRLCs to economically hedge changes in the
value of the mortgage inventory due to changes in market interest rates. The
fair value of these instruments amounted to an asset of $10.1 million and $11.9
million at June 30, 2022 and December 31, 2021, respectively, and a liability of
$0 and $710,000 at June 30, 2022 and December 31, 2021, respectively.

Capital

Common Stock Repurchase Program


On September 19, 2019, the Company announced that its Board of Directors
authorized the Company to repurchase up to $100.0 million of its outstanding
common stock through October 31, 2020. On October 22, 2020 and again on October
28, 2021, the Company announced that its Board of Directors had approved the
extension of the share repurchase program for an additional year in each
instance. As a result, the Company is currently authorized to engage in
repurchases through October 31, 2022.  Repurchases of shares must be made in
accordance with applicable securities laws and may be made from time to time in
the open market or by negotiated transactions. The amount and timing of
repurchases will be based on a variety of factors, including share acquisition
price, regulatory limitations and other market and economic factors. The program
does not require the Company to repurchase any specific number of shares. As of
June 30, 2022, $41.7 million, or 952,910 shares of the Company's common stock,
had been repurchased under the program.

                                       55
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Capital Management

Capital management consists of providing equity to support both current and anticipated future operations. The capital resources of the Company are monitored on a periodic basis by state and federal regulatory authorities.


Under the regulatory capital frameworks adopted by the Federal Reserve Board
(the "FRB") and the FDIC, the Company and the Bank must each maintain a common
equity Tier 1 capital to total risk-weighted assets ratio of at least 4.5%, a
Tier 1 capital to total risk-weighted assets ratio of at least 6%, a total
capital to total risk-weighted assets ratio of at least 8% and a leverage ratio
of Tier 1 capital to average total consolidated assets of at least 4%. The
Company and the Bank are also required to maintain a capital conservation buffer
of common equity Tier 1 capital of at least 2.5% of risk-weighted assets in
addition to the minimum risk-based capital ratios in order to avoid certain
restrictions on capital distributions and discretionary bonus payments.

In March 2020, the Office of the Comptroller of the Currency, the FRB and the
FDIC issued an interim final rule that delays the estimated impact on regulatory
capital stemming from the implementation of CECL. The interim final rule
provides banking organizations that implement CECL in 2020 the option to delay
for two years an estimate of CECL's effect on regulatory capital, relative to
the incurred loss methodology's effect on regulatory capital, followed by a
three-year transition period. As a result, the Company and Bank elected the
five-year transition relief allowed under the interim final rule effective March
31, 2020.

As of June 30, 2022, under the regulatory capital standards, the Bank was considered "well capitalized" under all capital measurements. The following table sets forth the regulatory capital ratios of for the Company and the Bank at June 30, 2022 and December 31, 2021:


                                                                  June 30, 2022               December 31, 2021

Tier 1 Leverage Ratio (tier 1 capital to average assets) Consolidated

                                                          9.01%                         8.63%
Ameris Bank                                                           10.30%                        9.50%
CET1 Ratio (common equity tier 1 capital to risk weighted
assets)
Consolidated                                                          10.11%                        10.46%
Ameris Bank                                                           11.54%                        11.50%

Tier 1 Capital Ratio (tier 1 capital to risk weighted assets) Consolidated

                                                          10.11%                        10.46%
Ameris Bank                                                           11.54%                        11.50%
Total Capital Ratio (total capital to risk weighted assets)
Consolidated                                                          13.27%                        13.78%
Ameris Bank                                                           12.61%                        12.45%


Interest Rate Sensitivity and Liquidity


The Company's primary market risk exposures are credit risk, interest rate risk,
and to a lesser degree, liquidity risk. The Bank operates under an Asset
Liability Management Policy approved by the Company's Board of Directors and the
ALCO Committee. The policy outlines limits on interest rate risk in terms of
changes in net interest income and changes in the net market values of assets
and liabilities over certain changes in interest rate environments. These
measurements are made through a simulation model which projects the impact of
changes in interest rates on the Bank's assets and liabilities. The policy also
outlines responsibility for monitoring interest rate risk, and the process for
the approval, implementation and monitoring of interest rate risk strategies to
achieve the Bank's interest rate risk objectives.

The ALCO Committee is comprised of senior officers of Ameris. The ALCO Committee
makes all strategic decisions with respect to the sources and uses of funds that
may affect net interest income, including net interest spread and net interest
margin. The objective of the ALCO Committee is to identify the interest rate,
liquidity and market value risks of the Company's balance sheet and use
reasonable methods approved by the Company's Board of Directors and executive
management to minimize those identified risks.

The normal course of business activity exposes the Company to interest rate
risk. Interest rate risk is managed within an overall asset and liability
framework for the Company. The principal objectives of asset and liability
management are to predict the sensitivity of net interest spreads to potential
changes in interest rates, control risk and enhance profitability. Funding
positions are kept within predetermined limits designed to properly manage risk
and liquidity. The Company employs sensitivity analysis
                                       56
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in the form of a net interest income simulation to help characterize the market risk arising from changes in interest rates. In addition, fluctuations in interest rates usually result in changes in the fair market value of the Company's financial instruments, cash flows and net interest income. The Company's interest rate risk position is managed by the ALCO Committee.


The Company uses a simulation modeling process to measure interest rate risk and
evaluate potential strategies. Interest rate scenario models are prepared using
software created and licensed from an outside vendor. The Company's simulation
includes all financial assets and liabilities. Simulation results quantify
interest rate risk under various interest rate scenarios. Management then
develops and implements appropriate strategies. The ALCO Committee has
determined that an acceptable level of interest rate risk would be for net
interest income to increase/decrease no more than 20% given a change in selected
interest rates of 200 basis points over any 24-month period.

Liquidity management involves the matching of the cash flow requirements of
customers, who may be either depositors desiring to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs, and the ability of Ameris to manage those requirements. The Company
strives to maintain an adequate liquidity position by managing the balances and
maturities of interest-earning assets and interest-bearing liabilities so that
the balance it has in short-term assets at any given time will adequately cover
any reasonably anticipated immediate need for funds. Additionally, the Bank
maintains relationships with correspondent banks, which could provide funds on
short notice, if needed. The Company has invested in FHLB stock for the purpose
of establishing credit lines with the FHLB. The credit availability to the Bank
is equal to 30% of the Bank's total assets as reported on the most recent
quarterly financial information submitted to the regulators subject to the
pledging of sufficient collateral. At June 30, 2022 and December 31, 2021, the
net carrying value of the Company's other borrowings was $425.6 million and
$739.9 million, respectively.

The following liquidity ratios compare certain assets and liabilities to total
deposits or total assets:

                                             June 30,             March 31,            December 31,             September 30,              June 30,
                                               2022                  2022                  2021                     2021                     2021
Investment securities available-for-sale
to total deposits                             5.35%                 2.96%                  3.01%                    3.63%                   4.26%
Loans (net of unearned income) to total
deposits                                      89.21%                82.41%                80.72%                   78.71%                   80.96%
Interest-earning assets to total assets       89.88%                90.43%                90.56%                   91.20%                   90.79%
Interest-bearing deposits to total
deposits                                      58.02%                59.82%                60.46%                   59.56%                   61.75%



The liquidity resources of the Company are monitored continuously by the ALCO
Committee and on a periodic basis by state and federal regulatory
authorities. As determined under guidelines established by these regulatory
authorities, the Company's and the Bank's liquidity ratios at June 30, 2022 were
considered satisfactory. The Company is aware of no events or trends likely to
result in a material change in liquidity.

© Edgar Online, source Glimpses

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