2006 Annual Report
Charting Our Course
for the Future.
Dear Fellow Shareholders:
It is our pleasure to present results for the past year. 2006 closed as a
monumental year of achievements for Ameris Bancorp. With great
excitement and boundless energy, we completed the migration to our
new brand. Our charter collapse and related data conversion project
were finalized with a positive outcome. Many areas of the Company
experienced notable improvements. More importantly, we united as
one bank in our Company – Ameris Bank.
Ameris Bancorp is a financial holding company, but at heart, we are
community bankers who enjoy being focused on our customers.
We thrive in a service environment, because community banking is
a people business.
2006 was a year beyond comparison. The Company’s Directors,
Officers and Employees are proud to share some of our
accomplishments:
• Record earnings of $22.1 million, or $1.68 EPS, compared
to $13.7, or $1.14 EPS, in 2005
• Improved shareholder value with increasing stock price
• Reduction in problem loans to further solidify asset quality
• GA, FL & SC mergers added assets and many new employees
to our footprint
• Investment in new producers reflected in balance sheet growth
and customer retention in both legacy and growth markets
• Implementation of process improvements to gain efficiencies
in service levels and to enhance each customer’s experience
Our strategic plan charts our course for the future. It is also an
anchor, helping us focus on what actions we need to take for the
future. Our strategy must continue to build over time – considering
both short-term and long-term goals, providing vitality to the health
of our Company.
Through the planning process, we ensure the preservation of our core
values, which remain unchanged – employees of character, customer
service and shareholder value – while uncovering innovative ways to
stimulate growth, maintain asset quality and achieve peer level earnings.
Through our subsidiary Ameris Bank, Ameris Bancorp is focused on
each customer’s needs, building one-to-one relationships and delivering
stellar customer service. We have an unwavering commitment to take
actions that are in the best interest of our Company, our customers and
our shareholders.
Our unique style of community banking provides local autonomy in
our bank markets with empowered decision makers and local Boards
of Directors who are supportive of our communities’ efforts.
Ameris Bancorp and Ameris Bank employees are a vital part of the
long-term vibrancy of our Company. Core values strengthen our
foundation and help create a successful community bank.
Community banking is our passion, and we pledge to execute on
new opportunities as well as the basics.
Our strategy will continue to place more employees in front of our
customers. As we choose the right attitude and do the right thing for
our fellow employees, our customers and our shareholders, our bank
will exceed expectations. Our bank – Ameris Bank, where customers
experience real community banking!
We remain appreciative of your business and value the trust you place
in Ameris Bancorp with your investment.
Respectfully,
Edwin W. Hortman, Jr.
President & Chief Executive Officer
Kenneth J. Hunnicutt
Chairman of the Board
Total Assets
$2.05 Billion
Total assets increased by 20.6%, or $350 million, from December 31, 2005.
Focused on Growth
Deposits
(dollars in thousands)
916,047
906,524
986,224
1,375,232 1,710,163
Ameris Bancorp is growing – in customers, locations, assets and value.
This year, we brought together 15 separately chartered banks to become
one bank under one distinctive brand. We’ve built upon our employees’
passion for community banking, customer service and quality asset
growth. Now as one bank united, we continue to post record-breaking
levels of net income. Together, we generated a 61% improvement in
net income as compared to 2005’s record-setting year.
Our success continued as newly-acquired banks adopted our unique
style of community banking. The 2005 acquisitions in Jacksonville,
Florida, and the Coastal Georgia communities of St. Marys and
Kingsland experienced over 20% growth during their first full year
with our Company. On the last day of 2006, we fueled our future
expansion as we entered the high-growth South Carolina market.
2002
2003
2004
2005
2006
833,447
840,539
877,074
1,186,601 1,442,951
Loans
(dollars in thousands)
2002
2003
2004
2005
2006
Ameris Bancorp 7-Year Total Return
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
Ameris
Bancorp
(ABCB)
NASDAQ
Bank Stocks
’99
’00
’01
’02
’03
’04
’05
’06
Net Income
$22.1 Million
This record net income is up from 2005’s net income of $13.7 million ($1.14 per diluted share).
Growing in Our Communities
GEORGIA
larger compared to early 2006, keeping pace with
merger of a nationwide bank and a super-regional
BANK LOCATIONS: 29
Legacy markets are the heart and soul of
Ameris Bank, and have helped to provide another
solid year of income, loan and deposit growth.
Legacy banks surrounding the East-West arteries
of GA-82 and GA-84 grew at rates in excess of
their communities’ population growth. With the
addition of a new main office in Douglas, we
the fast-growing Florida market.
Our newly acquired bank in Orange Park, part
of the Jacksonville market, grew both loans and
bank, Ameris Bank seized the opportunity to
aggressively pursue disenchanted customers
and increase its Alabama holdings.
deposits in excess of 20%. We used our success
With a community banking model that
in Orange Park as a springboard to open our first
stresses local decisions by local leaders, we
banking office in Jacksonville. To capitalize on
attracted several experienced bankers in the
this area’s exponential growth, we immediately
Dothan area to join our team of community
hired a staff of mortgage bankers and commercial
bankers. These knowledgeable, highly skilled
affirmed our commitment to these communities.
lenders.
The majority of our Georgia growth markets
are strategically located along the two North-
South interstate highways: I-75 and I-95.
Our talented community bankers leveraged
their position in these areas to achieve over 20%
improvement in both loans and deposits.
We anticipate these locations will continue to
capture even greater market share.
In the St. Marys and Kingsland market, which
we entered at the end of 2005, Ameris Bank
maintained the number one position in market
share. Rapid improvements in asset quality,
deposit growth and leadership were all critical
elements to this new market’s success. The
addition of these locations is vital in extending
the Ameris Bank southeast Georgia network.
Initiatives in Trenton and Newberry capitalized
on the regional expansion surrounding
Gainesville. We achieved historic levels of growth
by dramatically increasing loans, deposits and net
income. The Company’s bottom line will be
favorably impacted by the contribution this
market continues to make.
Crawfordville, south of the Florida state
capitol of Tallahassee, rounded out the success
in Florida. The Crawfordville market was
entered in 2004, and this year it kicked into high
gear by improving both loans and deposits by
over 30%. Commercial lending continues to
grow, supported by our Company’s ability to
coordinate the strengths of both legacy markets
and growth markets.
FLORIDA
ALABAMA
BANK LOCATIONS: 6
BANK LOCATIONS: 8
Home to our Alabama headquarters is
This year saw significant expansion in Florida.
Dothan, at the crossroads where highways 231,
We leveraged assets in existing markets,
431, and 84 meet. This strong legacy market
integrated new banks and opened a new banking
ended the year as Ameris Bank’s largest in terms
location. As a result, Ameris Bank is now 33%
of both loans and deposits. In the wake of a
bankers brought with them a stable customer
base that contributed to double-digit growth
in Alabama.
SOUTH CAROLINA
BANK LOCATIONS: 2
In late 2006, our Company entered the
lucrative South Carolina market through the
acquisition of Islands Community Bank, N.A., in
Beaufort. We now have our first full-service bank
in Beaufort and loan production offices in both
Bluffton and Charleston. We also established
South Carolina headquarters in the state capitol
city of Columbia.
Concurrent with the Islands Bancorp
acquisition, we announced that C. John Hipp, III
joined our Company to lead Ameris Bank’s
aggressive charge into the rapidly-growing areas
of Columbia, Hilton Head, Charleston,
Greenville and Rock Hill. These strategically
chosen cities are in high-growth regions along
busy interstate highways and Coastal South
Carolina communities.
We believe in a style of community banking that is neither limited
by size nor geography. Our growth in 2006 demonstrated that the markets we serve appreciate
our local bankers and the quality service they provide each and every day. Whether Ameris Bank grows through
acquiring new banks, opening additional locations, attracting new customers in existing markets, or capitalizing
on the growth potential of new markets, our strategy is grounded by our passion for community banking.
A M E R I S B A N C O R P B O A R D O F D I R E C T O R S
Seated from left to right:
Kenneth J. Hunnicutt
Chairman
Occupation: Executive Consultant
Edwin W. Hortman, Jr.
President & Chief Executive Officer
Ameris Bancorp
Standing from left to right:
Daniel B. Jeter
Vice Chairman
Occupation: Consumer Finance
Standard Discount
Brooks Sheldon
Occupation: Retired Banker
Henry C. Wortman
Occupation: Farming
Jackson & Wortman
Eugene M. Vereen, Jr.
Chairman Emeritus
Occupation: Investments, M.I.A., Co.
Robert P. Lynch
Occupation: Automobile Dealer
Lynch Management Company
Johnny W. Floyd
Occupation: Timber and Realty
Floyd Timber Company
& Cordele Realty, Inc.
J. Raymond Fulp
Occupation: Pharmacist
Harveys Pharmacy
Glenn A. Kirbo
Occupation: Attorney
Kirbo & Kirbo, P.C.
A M E R I S
E X E C U T I V E O F F I C E R S
B A N C O R P
Edwin W. Hortman, Jr.
President & Chief Executive Officer
Cindi H. Lewis
Executive Vice President, Chief Administrative Officer
& Corporate Secretary
Johnny R. Myers
Executive Vice President
& South Regional Executive
Dennis J. Zember, Jr.
Executive Vice President
& Chief Financial Officer
Thomas T. Dampier
Executive Vice President
& North Regional Executive
Jon S. Edwards
Executive Vice President
& Director of Credit Administration
C. John Hipp, III
Executive Vice President
& Group President - South Carolina
$382,000,000
Recent record-breaking accomplishments resulted in a 49% increase in our
Market Capitalization, up from $257 million in 2005.
F I N A N C I A L H I G H L I G H T S
The following table presents selected consolidated financial information for Ameris Bancorp. The data set forth below is derived from the audited
consolidated financial statements of the Company.
Selected Balance Sheet Data:
Total assets
Total loans
Total deposits
Investment securities
Shareholders’ equity
Selected Income Statement Data:
Interest income
Interest expense
Net interest income
Provision for loan losses
Other income
Other expenses
Income before tax
Income tax expense
Net income
Per Share Data:
Net income - basic
Net income - diluted
Book value
Tangible book value
Dividends
2006
2005
2004
2003
2002
Year Ended December 31,
(Dollars in Thousands, Except Per Share Data)
$2,047,542
1,442,951
1,710,163
290,207
178,732
$1,697,209
1,186,601
1,375,232
243,742
148,703
$1,267,993
877,074
986,224
221,741
120,939
$1,169,111
840,539
906,524
196,289
113,613
$1,193,406
833,447
916,047
184,081
107,484
$124,111
54,150
69,961
2,837
19,262
53,129
33,257
11,129
$22,128
$1.71
1.68
13.21
8.74
0.56
$79,539
26,934
52,605
1,651
13,530
43,607
20,877
7,149
$13,728
$1.15
1.14
11.48
7.64
0.56
$64,365
19,375
44,990
1,786
13,023
36,505
19,722
6,621
$13,101
$1.12
1.11
10.28
7.90
0.47
$64,479
22,141
42,338
3,945
14,718
35,147
17,964
5,954
$12,010
$1.03
1.02
9.68
7.76
0.43
$71,347
28,240
43,107
5,574
15,706
37,807
15,432
5,077
$10,355
$0.87
0.87
9.17
7.16
0.40
THIS PAGE LEFT INTENTIONALLY BLANK.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(cid:55)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
or
(cid:134) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to_______________.
Commission file number: 001-13901
AMERIS BANCORP (A GEORGIA CORPORATION)
I.R.S. EMPLOYER IDENTIFICATION NUMBER 58-1456434
24 2nd AVENUE, S.E., MOULTRIE, GEORGIA 31768
TELEPHONE NUMBER: (229) 890-1111
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par Value $1 Per Share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes (cid:134) No (cid:55)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act. Yes (cid:134) No (cid:55)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (cid:55) No (cid:134)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:134)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Securities Exchange Act.
Large accelerated filer (cid:134) Accelerated filer (cid:55) Non-accelerated filer (cid:134)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).
Yes (cid:134) No (cid:55)
As of the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the
voting and non-voting common equity held by nonaffiliates of the registrant was approximately $301.3 million. As of March 1,
2007, the registrant had outstanding13,527,449 shares of common stock, $1.00 par value per share.
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III of this Annual Report is incorporated by reference from the Registrant’s definitive proxy
statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the
end of the fiscal year covered by this Annual Report.
AMERIS BANCORP
TABLE OF CONTENTS
Page
PART I
Item 1.
Business
Item 1A.
Risk Factors
Item 1B.
Unresolved Staff Comments
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4.
Submission of Matters to a Vote of Shareholders
PART II
Item 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Item 6.
Selected Financial Data
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results
of Operations
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
Item 9A.
Controls and Procedures
Item 9B.
Other Information
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
Item 11.
Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Item 14.
Principal Accountant Fees and Services
PART IV
Item 15.
Exhibits and Financial Statement Schedules
1
3
16
20
20
21
21
21
23
25
43
43
44
44
46
47
48
48
48
48
50
CAUTIONARY NOTICE
REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K (this “Annual Report”) under the caption
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere,
including information incorporated herein by reference to other documents, 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, those described in Part I, Item 1A. “Risk Factors,” and elsewhere in this report and those described from
time to time in our future reports filed with the Securities and Exchange Commission (the “Commission”) 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.
2
PART I
As used in this document, the terms “we,” “us,” “our,” “Ameris Bancorp,” “Ameris” and the “Company” mean
Ameris Bancorp and its subsidiaries (unless the context indicates another meaning).
GENERAL OVERVIEW
ITEM 1. BUSINESS
We are a financial holding company whose business is conducted primarily through our wholly-owned banking
subsidiary, which provides a full range of banking services to its retail and commercial customers located primarily
in Georgia, Alabama, northern Florida and South Carolina. Ameris Bancorp (“Ameris” or the “Company”) was
incorporated on December 18, 1980 as a Georgia corporation. The Company’s executive office is located at 24 2nd
Avenue, S.E., Moultrie, Georgia 31768, its telephone number is (229) 890-1111 and its Internet address is
http://www.amerisbank.com. We operate 44 domestic banking offices with no foreign activities. At December 31,
2006, we had approximately $2.05 billion in total assets, $1.44 billion in total loans, $1.71 billion in total deposits
and shareholders’ equity of $178.7 million. Ameris’s deposits are insured, up to applicable limits, by the Federal
Deposit Insurance Corporation.
THE PARENT COMPANY
Our primary business as a bank holding company is to manage the business and affairs of our banking subsidiary,
Ameris Bank (the “Bank”). As a bank holding company, we perform certain shareholder and investor relations
functions and seek to provide financial support, if necessary, to our subsidiary.
AMERIS BANK
Our principal subsidiary is the Bank. The Bank, headquartered in Moultrie, Georgia, operates branches in Georgia,
Alabama, northern Florida and South Carolina. These branches serve distinct communities in our business areas
with autonomy but do so as one bank, leveraging our favorable geographic footprint in an effort to acquire more
customers.
CAPITAL TRUST SECURITIES
On September 20, 2006, Ameris completed a private placement of an aggregate of $36 million of trust preferred
securities. The placement occurred through a newly formed Delaware statutory trust subsidiary of Ameris, Ameris
Statutory Trust I (the “Trust”). The trust preferred securities carry a quarterly adjustable interest rate of 1.63% over
three-month LIBOR. The trust preferred securities mature on December 15, 2036 and are redeemable at the
Company’s option beginning September 15, 2011. The terms of the trust preferred securities are set forth in that
certain Amended and Restated Declaration of Trust dated as of September 20, 2006 among Ameris, Wilmington
Trust Company, as institutional trustee and Delaware trustee, and the administrators named therein. The payments
of distributions on and redemption or liquidation of the trust preferred securities issued by the Trust are guaranteed
by Ameris pursuant to a Guarantee Agreement dated as of September 20, 2006 between Ameris and Wilmington
Trust Company, as trustee.
The net proceeds to Ameris from the placement of the trust preferred securities by the Trust were primarily used to
redeem outstanding trust preferred securities issued by Ameris on November 8, 2001. These trust preferred
securities were redeemed on September 30, 2006 for $35.6 million.
On December 16, 2005, Ameris purchased First National Banc, Inc. which had formed during 2004 First National
Banc Statutory Trust I, a subsidiary whose sole purpose was to issue $5,000,000 principal amount of trust preferred
securities at a rate per annum equal to the 3-Month LIBOR plus 2.80% through a pool sponsored by a national
brokerage firm. These trust preferred securities have a maturity of 30 years and are redeemable at the Company’s
option on any quarterly interest payment date after five years. There are certain circumstances (as described in the
trust documents) under which the securities may be redeemed within the first five years at the Company’s option.
See Notes to Ameris’s Consolidated Financial Statements included in this Annual Report for a further discussion
regarding the issuance of these trust preferred securities.
3
BUSINESS STRATEGY
Our business strategy is to establish Ameris as a major financial institution in Georgia, Alabama, northern Florida
and South Carolina. Management has pursued this objective through an acquisition-oriented growth strategy and a
prudent operating strategy. Our operating model allows the Company to put as many resources in front of customers
as possible with efforts to minimize the expense of our operations. We are continuously evaluating our structure to
maximize opportunities to perfect the balance between efficiency and customer service. Our markets are managed
by senior level, experienced decision makers in a decentralized structure that differentiates us from our competition.
Management believes that this structure, along with involvement in and knowledge of our local markets, will
continue to provide growth and assist in managing risk throughout our Company.
We have maintained a long-term focus on a strategy that includes expanding and diversifying our franchise in terms
of revenues, profitability and asset size. Our growth over the past several years has been enhanced significantly by
bank acquisitions. We expect to continue to take advantage of the consolidation in the financial services industry
and enhance our franchise through future acquisitions. We intend to grow within our existing markets, to branch
into or acquire financial institutions in existing markets and to branch into or acquire financial institutions in other
markets consistent with our capital availability and management abilities.
BANKING SERVICES
Lending Activities
General. The Company maintains a diversified loan portfolio by providing a broad range of commercial and retail
lending services to business entities and individuals. We provide agricultural loans, commercial business loans,
commercial and residential real estate construction and mortgage loans, consumer loans, revolving lines of credit
and letters of credit. The Company also originates first mortgage residential mortgage loans and enters into a
commitment to sell these loans in the secondary market. We make no foreign or energy-related loans.
At December 31, 2006, Ameris’s loan portfolio totaled $1.44 billion, representing approximately 70.5% of our total
assets of $2.05 billion. For a discussion of our loan portfolio, see “Management’s Discussion of Financial Condition
and Results of Operations – Loan Portfolio.”
Commercial Real Estate Loans. This portion of our loan portfolio has grown significantly over the past few years
and represents the largest portion of our loan portfolio. These loans are generally extended for acquisition,
development or construction of commercial properties. The loans are underwritten with an emphasis on the viability
of the project, the borrower’s ability to meet certain minimum debt service requirements and an analysis and review
of the collateral and guarantors.
Residential Real Estate Mortgage Loans. Ameris originates adjustable and fixed-rate residential mortgage loans.
These mortgage loans are generally originated under terms and conditions consistent with secondary market
guidelines. Some of these loans will be placed in the Company’s loan portfolio; however, a majority are sold to the
secondary mortgage market. The residential real estate mortgage loans that are included in the Company’s loan
portfolio are usually owner-occupied and generally amortized over a 10 to 20 year period with three to five year
maturity or repricing.
Agricultural Loans. Our agricultural loans are extended to finance crop production, the purchase of farm-related
equipment or farmland and the operations of dairies and poultry producers. Agricultural loans typically involve
seasonal fluctuations in amounts. Although we typically look to an agricultural borrower’s cash flow as the
principal source of repayment, agricultural loans are also generally secured by a security interest in the crops or the
farm-related equipment and, in some cases, an assignment of crop insurance and mortgage on real estate. The
lending officer visits the borrower regularly during the growing season and re-evaluates the loan in light of the
borrower’s updated cash flow projections. A portion of our agricultural loans are guaranteed by the FSA
Guaranteed Loan Program.
4
Commercial and Industrial Loans. General commercial and industrial loans consist of loans made primarily to
manufacturers, wholesalers and retailers of goods, service companies and other industries. These loans are made for
acquisition, expansion and working capital purposes and may be secured by real estate, accounts receivable,
inventory, equipment, personal guarantees or other assets. The Company monitors these loans by requesting
submission of corporate and personal financial statements and income tax returns. The Company has also generated
loans which are guaranteed by the U.S. Small Business Administration (the “SBA”). SBA loans are generally
underwritten in the same manner as conventional loans generated for the Bank’s portfolio. Periodically, a portion of
the loans that are secured by the guaranty of the SBA will be sold in the secondary market. Management believes
that making such loans helps the local community and also provides Ameris with a source of income and solid
future lending relationships as such businesses grow and prosper. The primary repayment risk for commercial loans
is the failure of the business due to economic or financial factors.
Consumer Loans. Our consumer loans include motor vehicle, home improvement, home equity, student and
signature loans and small personal credit lines. The terms of these loans typically range from 12 to 60 months and
vary based upon the nature of collateral and size of the loan. These loans are generally secured by various assets
owned by the consumer.
Credit Administration
We have sought to maintain a comprehensive lending policy that meets the credit needs of each of the communities
served by the Bank, including low- and moderate-income customers, and to employ lending procedures and policies
consistent with this approach. All loans are subject to our corporate loan policy, which is reviewed annually and
updated as needed. The loan policy provides that lending officers have sole authority to approve loans of various
amounts commensurate with their seniority and experience. Our local market Presidents have discretion to approve
loans in varying principal amounts up to established limits. Our Regional Executives review and approve loans that
exceed each President’s lending authority.
Individual lending authorities are assigned by the Company, as is the maximum limit of new extensions of credit
that may be approved in each market. Those approval limits are reviewed annually by the Company and adjusted as
needed. All extensions of credit in excess of a market’s approval limit are reviewed by the appropriate Regional
Executive. Further approval by Ameris’s Senior Credit Officer or the Company’s Loan Committee may also be
needed. Under our ongoing loan review program, all loans are subject to sampling and objective review by an
assigned loan reviewer who is independent of the originating loan officer.
Each lending officer has authority to make loans only in the market area in which his or her Bank office is located
and its contiguous counties. Occasionally, Ameris’s Loan Committee will approve a loan for purposes outside of
the market areas of the Bank, provided the Bank has a previously established relationship with the borrower. Our
lending policy requires analysis of the borrower’s projected cash flow and ability to service the debt.
We actively market our services to qualified lending customers in both the commercial and consumer sectors. Our
commercial lending officers actively solicit the business of new companies entering the market as well as
longstanding members of that market’s business community. Through personalized professional service and
competitive pricing, we have been successful in attracting new commercial lending customers. At the same time, we
actively advertise our consumer loan products and continually seek to make our lending officers more accessible.
The Bank continually monitors its loan portfolio to identify areas of concern and to enable management to take
corrective action when necessary. Local market Presidents, lending officers and local boards meet periodically to
review all past due loans, the status of large loans and certain other matters. Individual lending officers are
responsible for reviewing collection of past due amounts and monitoring any changes in the financial status of the
borrowers.
5
Investment Activities
Our investment policy is designed to maximize income from funds not needed to meet loan demand in a manner
consistent with appropriate liquidity and risk objectives. Under this policy, our Company may invest in federal, state
and municipal obligations, corporate obligations, public housing authority bonds, industrial development revenue
bonds, Government Sponsored Entities (“GSEs”) securities and satisfactorily rated trust preferred obligations.
Investments in our portfolio must satisfy certain quality criteria. Our Company’s investments must be rated at least
“BAA” by either Moody’s or Standard and Poor’s. Securities rated below “A” are periodically reviewed for
creditworthiness. Our Company may purchase non-rated municipal bonds only if the issuer of such bonds is located
in the Company’s general market area and such bonds are determined by the Company to have a credit risk no
greater than the minimum ratings referred to above. Industrial development authority bonds, which normally are not
rated, are purchased only if the issuer is located in the Company’s market area and if the bonds are considered to
possess a high degree of credit soundness. Our Company typically has not purchased a significant amount of
GNMA securities, which normally have higher yields than our Company’s other investments.
While our investment policy permits our Company to trade securities to improve the quality of yields or
marketability or to realign the composition of the portfolio, the Bank historically has not done so to any significant
extent.
Our investment committee implements the investment policy and portfolio strategies and monitors the portfolio.
Reports on all purchases, sales, net profits or losses and market appreciation or depreciation of the bond portfolio are
reviewed by our Boards of Directors each month. Once a year, the written investment policy is reviewed by the
Company’s board of directors.
The Company’s securities are kept in safekeeping accounts at correspondent banks.
Deposits
The Company provides a full range of deposit accounts and services to both retail and commercial customers. These
deposit accounts have a variety of interest rates and terms and consist of interest-bearing and noninterest-bearing
accounts, including commercial and retail checking accounts, regular interest-bearing savings accounts, money
market accounts, individual retirement accounts and certificates of deposit. Our Bank obtains most of its deposits
from individuals and businesses in its market areas.
Our Bank has not had to attract new or retain old deposits by paying depositors rates of interest on certificates of
deposit, money market and other interest-bearing accounts significantly above rates paid by other banks in our
market areas. In the future, increasing competition among banks in our market areas may cause our Bank’s interest
margins to shrink.
Brokered time deposits are deposits obtained by utilizing an outside broker that is paid a fee. These deposits usually
have a higher interest rate than the deposits obtained locally. The Bank utilizes the brokered deposits to accomplish
several purposes, such as (1) acquiring a certain maturity and dollar amount without repricing the Bank’s current
customers which could decrease the overall cost of deposits, and (2) acquiring certain maturities and dollar amounts
to help manage interest rate risk.
Other Funding Sources
The Federal Home Loan Bank (“FHLB”) allows the Company to obtain advances through its credit program. These
advances are secured by securities owned by the Company and held in safekeeping by the FHLB, FHLB stock
owned by the Company and certain qualifying residential mortgages.
The Company also enters into repurchase agreements. These repurchase agreements are treated as short term
borrowings and are reflected on the balance sheet as such.
6
CORPORATE RESTRUCTURING AND BUSINESS COMBINATIONS
Effective December 31, 2006, Ameris acquired by merger Islands Bancorp and its banking subsidiary, Islands
Community Bank, N.A. (collectively, “Islands”). Islands was headquartered in Beaufort, South Carolina where it
operated a single branch with satellite loan production offices in Bluffton, South Carolina and Charleston, South
Carolina. The acquisition of Islands was significant to the Company, as Ameris had recruited senior level talent that
would be instrumental in executing a growth strategy designed to build a meaningful franchise in South Carolina’s
top markets. The consideration for the acquisition was a combination of cash and Ameris common stock with an
aggregate purchase price of approximately $19.0 million. The total consideration consisted of $5.1 million in cash
and approximately 494,000 shares of Ameris common stock with a value of approximately $13.9 million. Islands’
results of operations for 2006 are not included in Ameris’s consolidated financial results because the acquisition’s
effective time was after the close of business on the last day of the fiscal year.
On December 16, 2005, Ameris acquired all the issued and outstanding common shares of First National Banc, Inc.,
the parent company of First National Bank, in St. Mary’s, Georgia and First National Bank, in Orange Park, Florida
(collectively “FNB”). The acquisition was accounted for using the purchase method of accounting, and,
accordingly, the results from FNB’s operations have been included in the consolidated financial statements
beginning December 17, 2005. The aggregate purchase price for FNB was $35.3 million, including cash of $13.1
million and the Company’s common stock valued at $22.2 million.
On November 30, 2004, Ameris acquired Citizens Bancshares, Inc., a $54.3 million asset holding company
headquartered in Crawfordville, Florida (“Citizens”). Citizens’ banking offices in Crawfordville, Panacea and
Sopchoppy gave the Bank a presence in the panhandle of Florida. Cash exchanged in this transaction for 100% of
the stock of Citizens was $11.5 million.
On August 31, 2005, Ameris announced its intentions to begin consolidating its subsidiary bank charters across
Georgia, Alabama and northern Florida into a single charter. In addition to the charter consolidation effort, the
Company announced its intentions to re-brand the Company and its surviving bank subsidiary with a single identity
- Ameris Bank. The re-branding process was completed during 2006. Certain operational restructuring efforts
remain as the Company continues to benefit from its new united identity. These efforts are aimed at increasing the
amount of employees with customer service or sales responsibilities and gaining needed efficiencies in support
areas.
MARKET AREAS AND COMPETITION
The banking industry in general and in the southeastern United States specifically, is highly competitive and
dramatic changes continue to occur throughout the industry. Our market areas of Georgia, Alabama, northern
Florida and South Carolina have experienced strong economic and population growth over the past twenty to thirty
years. In recent years, intense market demands, economic pressures, fluctuating interest rates and increased
customer awareness of product and service differences among financial institutions have forced banks to diversify
their services and become more cost effective. Our Bank faces strong competition in attracting deposits and making
loans. Its most direct competition for deposits comes from other commercial banks, thrift institutions, mortgage
bankers, finance companies, credit unions and issuers of securities such as brokerage firms. Interest rates,
convenience of office locations and marketing are all significant factors in our Bank’s competition for deposits.
Competition for loans comes from other commercial banks, thrift institutions, savings banks, insurance companies,
consumer finance companies, credit unions and other institutional lenders. Our Bank competes for loan originations
through the interest rates and loan fees charged and the efficiency and quality of services provided. Competition is
affected by the general availability of lendable funds, general and local economic conditions, current interest rate
levels and other factors that are not readily predictable.
7
Competition among providers of financial products and services continues to increase with consumers having the
opportunity to select from a growing variety of traditional and nontraditional alternatives. The industry continues to
rapidly consolidate, which affects competition by eliminating some regional and local institutions, while
strengthening the franchise of acquirers. Management expects that competition will become more intense in the
future due to changes in state and federal laws and regulations and the entry of additional bank and nonbank
competitors. See “Supervision and Regulation.”
EMPLOYEES
At December 31, 2006, the Company employed approximately 600 full time equivalent employees. We consider
our relationship with our employees to be satisfactory.
We have adopted one retirement plan for our employees, the Ameris Bancorp 401(k) Profit Sharing Plan. This plan
provides deferral of compensation by our employees and contributions by Ameris. Ameris and our Bank made
contributions for all eligible employees in 2006. We also maintain a comprehensive employee benefits program
providing, among other benefits, hospitalization and major medical insurance and life insurance. Management
considers these benefits to be competitive with those offered by other financial institutions in our market areas. Our
employees are not represented by any collective bargaining group.
RELATED PARTY TRANSACTIONS
The Company makes loans to our directors and their affiliates and to banking officers. These loans are made on
substantially the same terms as those prevailing at the time for comparable transactions and do not involve more
than normal credit risk. At December 31, 2006, we had $1.4 billion in total loans outstanding of which $5.9 million
were outstanding to certain directors and their affiliates. Company policy provides for no loans to executive
officers.
SUPERVISION AND REGULATION
General
We are extensively regulated under federal and state law. Generally, these laws and regulations are intended to
protect depositors and not shareholders. The following is a summary description of certain provisions of certain
laws that affect the regulation of bank holding companies and banks. The discussion is qualified in its entirety by
reference to applicable laws and regulations. Changes in such laws and regulations may have a material effect on
our business and prospects.
Federal Bank Holding Company Regulation and Structure
As a bank holding company, we are subject to regulation under the Bank Holding Company Act and to the
supervision, examination and reporting requirements of the Federal Reserve Board of Governors. Our Bank has a
Georgia state charter and is subject to regulation, supervision and examination by the Federal Deposit Insurance
Corporation (the “FDIC”) and the Georgia Department of Banking and Finance (the “GDBF”).
The Bank Holding Company Act requires every bank holding company to obtain the prior approval of the Federal
Reserve before:
•
•
•
it may acquire direct or indirect ownership or control of any voting shares of any bank if, after the acquisition,
the bank holding company will directly or indirectly own or control more than 5% of the voting shares of the
bank;
it or any of its subsidiaries, other than a bank, may acquire all or substantially all of the assets of any bank; or
it may merge or consolidate with any other bank holding company.
8
The Bank Holding Company Act further provides that the Federal Reserve may not approve any transaction that
would result in a monopoly or that would substantially lessen competition in the banking business, unless the public
interest in meeting the needs of the communities to be served outweighs the anti-competitive effects. The Federal
Reserve is also required to consider the financial and managerial resources and future prospects of the bank holding
companies and banks involved and the convenience and needs of the communities to be served. Consideration of
financial resources generally focuses on capital adequacy, and consideration of convenience and needs issues
focuses, in part, on the performance under the Community Reinvestment Act of 1977, both of which are discussed in
more detail.
The Bank Holding Company Act generally prohibits a bank holding company from engaging in activities other than
banking; managing or controlling banks or other permissible subsidiaries and acquiring or retaining direct or indirect
control of any company engaged in any activities other than activities closely related to banking or managing or
controlling banks.
The activities in which holding companies and their affiliates are permitted to engage were substantially expanded
by the Gramm-Leach-Bliley Act, which was signed on November 12, 1999. The Gramm-Leach-Bliley Act repeals
the anti-affiliation provisions of the Glass-Steagall Act to permit the common ownership of commercial banks,
investment banks and insurance companies. The Gramm-Leach-Bliley Act also amends the Bank Holding Company
Act to permit a financial holding company to, among other things, engage in any activity that the Federal Reserve
determines to be (i) financial in nature or incidental to such financial activity or (ii) complementary to a financial
activity and not a substantial risk to the safety and soundness of depository institutions or the financial system
generally. The Federal Reserve must consult with the Secretary of the Treasury in determining whether an activity
is financial in nature or incidental to a financial activity. Holding companies may continue to own companies
conducting activities which had been approved by federal order or regulation on the day before the Gramm-Leach-
Bliley Act was enacted. Effective August 24, 2000, pursuant to a previously-filed election with the Federal Reserve,
Ameris became a financial holding company.
In determining whether a particular activity is permissible, the Federal Reserve considers whether performing the
activity can be expected to produce benefits to the public that outweigh possible adverse effects, such as undue
concentration of resources, decreased or unfair competition, conflicts of interest or unsound banking practices. The
Federal Reserve has the power to order a bank holding company or its subsidiaries to terminate any activity or
control of any subsidiary when the continuation of the activity or control constitutes a serious risk to the financial
safety, soundness or stability of any bank subsidiary of that bank holding company.
Our Bank is also subject to numerous state and federal statutes and regulations that affect its business, activities and
operations and is supervised and examined by state and federal bank regulatory agencies. The FDIC and the GDBF
regularly examine the operations of our Bank and are given the authority to approve or disapprove mergers,
consolidations, the establishment of branches and similar corporate actions. These agencies also have the power to
prevent the continuance or development of unsafe or unsound banking practices or other violations of law.
Payment of Dividends and Other Restrictions
Ameris is a legal entity separate and distinct from its subsidiaries. While there are various legal and regulatory
limitations under federal and state law on the extent to which our Bank can pay dividends or otherwise supply funds
to Ameris, the principal source of Ameris’s cash revenues is dividends from our Bank. The prior approval of
applicable regulatory authorities is required if the total dividends declared by the Bank in any calendar year exceeds
50% of the Bank’s net profits for the previous year. The relevant federal and state regulatory agencies also have
authority to prohibit a state member bank or bank holding company, which would include Ameris and the Bank,
from engaging in what, in the opinion of such regulatory body, constitutes an unsafe or unsound practice in
conducting its business. The payment of dividends could, depending upon the financial condition of the subsidiary,
be deemed to constitute an unsafe or unsound practice in conducting its business.
9
Under Georgia law, the prior approval of the GDBF is required before any cash dividends may be paid by a state
bank if: (i) total classified assets at the most recent examination of such bank exceed 80% of the equity capital (as
defined, which includes the reserve for loan losses) of such bank; (ii) the aggregate amount of dividends declared or
anticipated to be declared in the calendar year exceeds 50% of the net profits (as defined) for the previous calendar
year; or (iii) the ratio of equity capital to adjusted total assets is less than 6%.
Retained earnings of our Bank available for payment of cash dividends under all applicable regulations without
obtaining governmental approval were approximately $11.3 million as of December 31, 2006.
In addition, our Bank is subject to limitations under Section 23A of the Federal Reserve Act with respect to
extensions of credit to, investments in and certain other transactions with Ameris. Furthermore, loans and extensions
of credit are also subject to various collateral requirements.
The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies,
which expresses the Federal Reserve’s view that a bank holding company should pay cash dividends only to the
extent that the holding company’s net income for the past year is sufficient to cover both the cash dividends and a
rate of earning retention that is consistent with the holding company’s capital needs, asset quality and overall
financial condition. The Federal Reserve also indicated that it would be inappropriate for a holding company
experiencing serious financial problems to borrow funds to pay dividends. Furthermore, under the prompt
corrective action regulations adopted by the Federal Reserve, the Federal Reserve may prohibit a bank holding
company from paying any dividends if one or more of the holding company’s bank subsidiaries are classified as
undercapitalized.
Bank holding companies are required to give the Federal Reserve prior written notice of any purchase or redemption
of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with
the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or
more of their consolidated net worth. The Federal Reserve may disapprove such a purchase or redemption if it
determines that the proposal would constitute an unsafe or unsound practice or would violate any law, regulation,
Federal Reserve order or any condition imposed by, or written agreement with, the Federal Reserve. This
notification requirement does not apply to any company that meets the well-capitalized standard for commercial
banks, has a safety and soundness examination rating of at least a “2” and is not subject to any unresolved
supervisory issues. As of December 31, 2006, Ameris met these requirements.
Capital Adequacy
We must comply with the Federal Reserve’s established capital adequacy standards, and our Bank is required to
comply with the capital adequacy standards established by the FDIC. The Federal Reserve has promulgated two
basic measures of capital adequacy for bank holding companies: a risk-based measure and a leverage measure. A
bank holding company must satisfy all applicable capital standards to be considered in compliance.
The risk-based capital standards are designed to make regulatory capital requirements more sensitive to differences
in risk profile among banks and bank holding companies, account for off-balance-sheet exposure and minimize
disincentives for holding liquid assets.
Assets and off-balance-sheet items are assigned to broad risk categories, each with appropriate weights. The
resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance-sheet items.
10
The minimum guideline for the ratio of total capital to risk-weighted assets is 8%. At least half of total capital must
be comprised of Tier 1 Capital, which is common stock, undivided profits, minority interests in the equity accounts
of consolidated subsidiaries and noncumulative perpetual preferred stock, less goodwill and certain other intangible
assets. The remainder may consist of Tier 2 Capital, which is subordinated debt, other preferred stock and a limited
amount of loan loss reserves. Since 2001, our consolidated capital ratios have been increased due to the issuance of
trust preferred securities. At December 31, 2006, $41.4 million of our trust preferred securities (25% of total Tier 1
Capital) was included in Tier 1 Capital and the balance included in Tier 2 Capital. At December 31, 2006, Ameris’s
total risk-based capital ratio and its Tier 1 risk-based capital ratio were 11.92% and 10.67%, respectively. At
December 31, 2005, $33.3 million of our trust preferred securities was included in Tier 1 Capital and the balance
included in Tier 2 Capital. At December 31, 2005, Ameris’s total risk-based capital ratio and its Tier 1 risk-based
capital ratio were 12.66% and 10.89%, respectively.
In addition, the Federal Reserve has established minimum leverage ratio guidelines for bank holding companies.
These guidelines provide for a minimum ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets, of 3% for bank holding companies that meet specified criteria. All other bank holding companies
generally are required to maintain a minimum leverage ratio of 4%. Ameris’s ratio at December 31, 2006 was
8.58% and at December 31, 2005 was 9.71%. The guidelines also provide that bank holding companies
experiencing internal growth or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance on intangible assets. Furthermore,
the Federal Reserve has indicated that it will consider a “tangible Tier 1 Capital leverage ratio” and other indicia of
capital strength in evaluating proposals for expansion or new activities. The Federal Reserve has not advised
Ameris of any specific minimum leverage ratio or tangible Tier 1 Capital leverage ratio applicable to it.
Our Bank is subject to risk-based and leverage capital requirements adopted by the FDIC that are substantially
similar to those adopted by the Federal Reserve for bank holding companies. Our Bank was in compliance with
applicable minimum capital requirements as of December 31, 2006.
Neither Ameris nor its Bank has been advised by any federal banking agency of any specific minimum capital ratio
requirement applicable to it.
In January 2001, the Basel Committee on Banking Supervision issued a consultative paper entitled “Proposal for a
New Basel Capital Accord” and, subsequently, the Basel Committee, which is comprised of bank supervisors and
central banks from the major industrialized countries, issued a number of working papers supplementing various
aspects of the 2001 paper (the “New Accord”). Based on these documents, the New Accord would adopt a three-
pillar framework for addressing capital adequacy. These pillars would include minimum capital requirements, more
emphasis on supervisory assessment of capital adequacy and greater reliance on market discipline. Under the New
Accord, minimum capital requirements would be more differentiated based upon perceived distinctions in
creditworthiness. Such requirements would be based either on ratings assigned by rating agencies or, in the case of
a banking organization that met certain supervisory standards, on the organization’s internal credit ratings. The
minimum capital requirements in the New Accord would also include a separate capital requirement for operational
risk. In June 2004, the Basel Committee published new international guidelines for calculating regulatory capital,
and since that time the U.S. banking regulators have published draft guidance of their interpretation of the new
guidelines. We will be required to calculate regulatory capital under the New Accord, in parallel with the existing
capital rules, beginning in 2007. In 2008, we will calculate regulatory capital solely under the New Accord.
Failure to meet capital guidelines could subject a bank to a variety of enforcement remedies, including issuance of a
capital directive, the termination of deposit insurance by the FDIC, a prohibition on taking brokered deposits and
certain other restrictions on its business. As described below, the FDIC can impose substantial additional
restrictions upon FDIC-insured depository institutions that fail to meet applicable capital requirements.
11
Acquisitions
As an active acquirer, we must comply with numerous laws related to our acquisition activity. Under the Bank
Holding Company Act, a bank holding company may not directly or indirectly acquire ownership or control of more
than 5% of the voting shares or substantially all of the assets of any bank or merge or consolidate with another bank
holding company without the prior approval of the Federal Reserve. Current federal law authorizes interstate
acquisitions of banks and bank holding companies without geographic limitation. Furthermore, a bank
headquartered in one state is authorized to merge with a bank headquartered in another state, as long as neither of
the states has opted out of such interstate merger authority prior to such date, and subject to any state requirement
that the target bank shall have been in existence and operating for a minimum period of time, not to exceed five
years, and to certain deposit market-share limitations. After a bank has established branches in a state through an
interstate merger transaction, the bank may establish and acquire additional branches at any location in the state
where a bank headquartered in that state could have established or acquired branches under applicable federal or
state law.
FDIC Insurance Assessments
The FDIC insures the deposits of the Bank up to prescribed limits for each depositor. The amount of FDIC
assessments paid by each Bank Insurance Fund (BIF) member institution is based on its relative risks of default as
measured by regulatory capital ratios and other factors. Specifically, the assessment rate is based on the institution’s
capitalization risk category and supervisory subgroup category. An institution’s capitalization risk category is based
on the FDIC’s determination of whether the institution is well capitalized, adequately capitalized or less than
adequately capitalized. An institution’s supervisory subgroup category is based on the FDIC’s assessment of the
financial condition of the institution and the probability that FDIC intervention or other corrective action will be
required. The FDIC may terminate insurance of deposits upon a finding that a institution has engaged in unsafe and
unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC.
The Federal Deposit Insurance Act (or “FDI Act”) requires the federal regulatory agencies to take “prompt
corrective action” if a depository institution does not meet minimum capital requirements. The FDI Act establishes
five capital tiers: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”
and “critically undercapitalized”. A depository institution’s capital tier will depend upon how its capital levels
compare to various relevant capital measures and certain other factors, as established by regulation.
The federal bank regulatory agencies have adopted regulations establishing relevant capital measurers and relevant
capital levels applicable to FDIC-insured banks. The relevant capital measures are the Total Capital ratio, Tier 1
Capital ratio and the leverage ratio. Under the regulations, a FDIC-insured bank will be:
•
•
•
•
•
“well capitalized” if it has a Total Capital ratio of 10% or greater, a Tier 1 Capital ratio of 6% or greater and
a leverage ratio of 5% or greater and is not subject to any order or written directive by the appropriate
regulatory authority to meet and maintain a specific capital level for any capital measure;
“adequately capitalized” if it has a Total Capital ratio of 8% or greater, a Tier 1 Capital ratio of 4% or greater
and a leverage ratio of 4% or greater (3% in certain circumstances) and is not “well capitalized”;
“undercapitalized” if it has a Total Capital ratio of less than 8%, a Tier 1 Capital ratio of less than 4% or a
leverage ratio of less than 4% (3% in certain circumstances);
“significantly undercapitalized” if it has a Total Capital ratio of less than 6%, a Tier 1 Capital ratio of less
than 3% or a leverage ratio of less than 3%; and
“critically undercapitalized” if its tangible equity is equal to or less than 2% of average quarterly tangible
assets.
12
An institution may be downgraded to, or deemed to be in, a capital category that is lower than is indicated by its
capital ratios if it is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory
examination rating with respect to certain matters. As of December 31, 2006, our Bank had capital levels that
qualify as “well capitalized” under such regulations.
The Gramm-Leach-Bliley Act allows bank holding companies that are “well managed” and “well capitalized” and
whose depositor subsidiaries have “satisfactory” or better Community Reinvestment Act ratings to become financial
holding companies that may engage in a substantially broader range of non-banking activities than is otherwise
permissible, including insurance underwriting and securities activities. As previously stated, Ameris became a
financial holding company effective August 24, 2000.
The FDI Act generally prohibits an FDIC-insured bank from making a capital distribution (including payment of a
dividend) or paying any management fee to its holding company if the bank would thereafter be “undercapitalized.”
“Undercapitalized” banks are subject to growth limitations and are required to submit a capital restoration plan. The
federal regulators may not accept a capital plan without determining, among other things, that the plan is based on
realistic assumptions and is likely to succeed in restoring the bank’s capital. In addition, for a capital restoration
plan to be acceptable, the bank’s parent holding company must guarantee that the institution will comply with such
capital restoration plan. The aggregate liability of the parent holding company is limited to the lesser of: (i) an
amount equal to 5% of the bank’s total assets at the time it became “undercapitalized”; and (ii) the amount which is
necessary (or would have been necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply with the plan. If a bank fails to submit an
acceptable plan, it is treated as if it is “significantly undercapitalized.”
“Significantly undercapitalized” insured banks may be subject to a number of requirements and restrictions,
including orders to sell sufficient voting stock to become “adequately capitalized”, requirements to reduce total
assets and the cessation of receipt of deposits from correspondent banks. “Critically undercapitalized” institutions
are subject to the appointment of a receiver or conservator. A bank that is not “well capitalized” is also subject to
certain limitations relating to so-called “brokered” deposits.
Community Reinvestment Act
The Community Reinvestment Act requires federal bank regulatory agencies to encourage financial institutions to
meet the credit needs of low- and moderate-income borrowers in their local communities. An institution’s size and
business strategy determines the type of examination that it will receive. Large, retail-oriented institutions are
examined using a performance-based lending, investment and service test. Small institutions are examined using a
streamlined approach. All institutions may opt to be evaluated under a strategic plan formulated with community
input and pre-approved by the bank regulatory agency.
The Community Reinvestment Act regulations provide for certain disclosure obligations. Each institution must post
a notice advising the public of its right to comment to the institution and its regulator on the institution’s Community
Reinvestment Act performance and to review the institution’s Community Reinvestment Act public file. Each
lending institution must maintain for public inspection a file that includes a listing of branch locations and services,
a summary of lending activity, a map of its communities and any written comments from the public on its
performance in meeting community credit needs. The Community Reinvestment Act requires public disclosure of a
financial institution’s written Community Reinvestment Act evaluations. This promotes enforcement of Community
Reinvestment Act requirements by providing the public with the status of a particular institution’s community
reinvestment record.
13
The Gramm-Leach-Bliley Act made various changes to the Community Reinvestment Act. Among other changes,
Community Reinvestment Act agreements with private parties must be disclosed and annual Community
Reinvestment Act reports must be made available to a bank’s primary federal regulator. A bank holding company
will not be permitted to become a financial holding company and no new activities authorized under the Gramm-
Leach-Bliley Act may be commenced by a holding company or by a bank financial subsidiary if any of its bank
subsidiaries received less than a “satisfactory” Community Reinvestment Act rating in its latest Community
Reinvestment Act examination.
Consumer Protection Laws
The Bank is subject to a number of federal and state laws designed to protect borrowers and promote lending to
various sectors of the economy and population. These laws include the Equal Credit Opportunity Act, the Fair
Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement
Procedures Act and state law counterparts.
Federal law currently contains extensive customer privacy protection provisions. Under these provisions, a financial
institution must provide to its customers, at the inception of the customer relationship and annually thereafter, the
institution’s policies and procedures regarding the handling of customers’ nonpublic personal financial information.
These provisions also provide that, except for certain limited exceptions, an institution may not provide such
personal information to unaffiliated third parties unless the institution discloses to the customer that such
information may be so provided and the customer is given the opportunity to opt out of such disclosure. Federal law
makes it a criminal offense, except in limited circumstances, to obtain or attempt to obtain customer information of a
financial nature by fraudulent or deceptive means.
Additional Legislative and Regulatory Matters
On October 26, 2001, President Bush signed into law the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”). Among
its other provisions, the USA PATRIOT Act requires each financial institution: (i) to establish an anti-money
laundering program; (ii) to establish due diligence policies, procedures and controls with respect to its private
banking accounts involving foreign individuals and certain foreign banks; and (iii) to avoid establishing,
maintaining, administering or managing correspondent accounts in the United States for, or on behalf of, foreign
banks that do not have a physical presence in any country. The USA PATRIOT Act also requires the Secretary of
the Treasury to prescribe by regulation minimum standards that financial institutions must follow to verify the
identity of customers, both foreign and domestic, when a customer opens an account. In addition, the USA
PATRIOT Act contains a provision encouraging cooperation among financial institutions, regulatory authorities and
law enforcement authorities with respect to individuals, entities and organizations engaged in, or reasonably
suspected of engaging in, terrorist acts or money laundering activities.
On July 30, 2002, the President signed into law the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), which
mandated a variety of reforms intended to address corporate and accounting fraud. Sarbanes-Oxley also provided
for the establishment of the Public Company Accounting Oversight Board (“PCAOB”), which enforces auditing,
quality control and independence standards for firms that audit Securities and Exchange Commission (“SEC”)
reporting companies. Sarbanes-Oxley imposes higher standards for auditor independence and restricts provision of
consulting services by auditing firms to companies they audit and in addition, certain audit partners must be rotated
periodically. Sarbanes-Oxley requires chief executive officers and chief financial officers, or their equivalents, to
certify to the accuracy of periodic reports filed with the SEC, subject to civil and criminal penalties if they
knowingly or willfully violate this certification requirement. In addition, under Sarbanes-Oxley, counsel is required
to report specific violations. Directors and executive officers must report most changes in their ownership of a
company’s securities and executives have restrictions on trading and loans. Sarbanes-Oxley also increases the
oversight and authority of audit committees of publicly traded companies. Although Ameris has incurred and will
continue to incur additional expense in complying with the provisions of Sarbanes-Oxley and the related rules,
management does not expect that such compliance will have a material impact on Ameris’s financial condition or
results of operation.
14
Fiscal and Monetary Policy
Banking is a business which depends on interest rate differentials for success. In general, the difference between the
interest paid by a bank on its deposits and its other borrowings, and the interest received by a bank on its loans and
securities holdings, constitutes the major portion of a bank’s earnings. Thus, our earnings and growth will be
subject to the influence of economic conditions generally, both domestic and foreign, and also to the monetary and
fiscal policies of the United States and its agencies, particularly the Federal Reserve. The Federal Reserve regulates
the supply of money through various means, including open market dealings in United States government securities,
the discount rate at which banks may borrow from the Federal Reserve and the reserve requirements on deposits.
The nature and timing of any changes in such policies and their effect on Ameris cannot be predicted.
Current and future legislation and the policies established by federal and state regulatory authorities will affect our
future operations. Banking legislation and regulations may limit our growth and the return to our investors by
restricting certain of our activities.
In addition, capital requirements could be changed and have the effect of restricting our activities or requiring
additional capital to be maintained. We cannot predict what changes, if any, will be made to existing federal and
state legislation and regulations or the effect that such changes may have on our business.
Federal Home Loan Bank System
Our Company has a correspondent relationship with the Federal Home Loan Bank of Atlanta (“FHLB Atlanta”),
which is one of 12 regional Federal Home Loan Banks (or “FHLBs”) that administer the home financing credit
function of savings companies. Each FHLB serves as a reserve or central bank for its members within its assigned
region. FHLBs are funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB
system and make loans to members (i.e., advances) in accordance with policies and procedures, established by the
board of directors of the FHLB which are subject to the oversight of the Federal Housing Finance Board. All
advances from the FHLB are required to be fully secured by sufficient collateral as determined by the FHLB. In
addition, all long-term advances are required to provide funds for residential home financing.
FHLB Atlanta provides certain services to our Company such as processing checks and other items, buying and
selling federal funds, handling money transfers and exchanges, shipping coin and currency, providing security and
safekeeping of funds or other valuable items and furnishing limited management information and advice. As
compensation for these services, our Company maintains certain balances with FHLB Atlanta in interest-bearing
accounts.
Under federal law, the FHLBs are required to provide funds for the resolution of troubled savings companies and to
contribute to low- and moderately-priced housing programs through direct loans or interest subsidies on advances
targeted for community investment and low- and moderate-income housing projects.
Title 6 of the Gramm-Leach-Bliley Act, entitled the Federal Home Loan Bank System Modernization Act of 1999
(called the “FHLB Modernization Act”), amended the Federal Home Loan Bank Act to allow voluntary membership
and modernized the capital structure and governance of the FHLBs. The capital structure established under the
FHLB Modernization Act sets forth leverage and risk-based capital requirements based on permanence of capital. It
also requires some minimum investment in the stock of the FHLBs of all member entities. Capital includes retained
earnings and two forms of stock: Class A stock redeemable within six months upon written notice and Class B stock
redeemable within five years upon written notice. The FHLB Modernization Act also reduced the period of time in
which a member exiting the FHLB system must stay out of the system.
15
Real Estate Lending Evaluations
The federal regulators have adopted uniform standards for evaluations of loans secured by real estate or made to
finance improvements to real estate. Banks are required to establish and maintain written internal real estate lending
policies consistent with safe and sound banking practices and appropriate to the size of the institution and the nature
and scope of its operations. The regulations establish loan to value ratio limitations on real estate loans. Our
Company’s loan policies establish limits on loan to value ratios that are equal to or less than those established in
such regulations.
Changing Regulatory Structure
The laws and regulations affecting banks and bank holding companies are in a state of change. The rules and the
regulatory agencies in this area have changed significantly over recent years, and there is reason to expect that
similar changes will continue in the future. It is not possible to predict the outcome of these changes.
One of the major additional burdens imposed on the banking industry is the increased authority of federal agencies
to regulate the activities of federal and state banks and their holding companies. The Federal Reserve and the FDIC
have extensive authority to police unsafe or unsound practices and violations of applicable laws and regulations by
depository institutions and their holding companies. These agencies can assess civil money penalties. Other laws
such as Sarbanes-Oxley have expanded the agencies’ authority in recent years, and the agencies have not yet fully
tested the limits of their powers. In addition, the GDBF possesses broad enforcement powers to address violations
of Georgia’s banking laws by banks chartered in Georgia.
Economic Environment
The policies of regulatory authorities, including the monetary policy of the Federal Reserve, have a significant effect
on the operating results of bank holding companies and their subsidiaries. Among the means available to the
Federal Reserve to affect the money supply are open market operations in U.S. government securities, changes in
the discount rate on member bank borrowings and changes in reserve requirements against member bank deposits.
These means are used in varying combinations to influence overall growth and distribution of bank loans,
investments and deposits, and their use may affect interest rates charged on loans or paid on deposits.
The Federal Reserve’s monetary policies have materially affected the operating results of commercial banks in the
past and are expected to continue to do so in the future. The nature of future monetary policies and the effect of
these policies on the business and earnings of our Company cannot be predicted.
ITEM 1A. RISK FACTORS
An investment in the common stock of Ameris is subject to risks inherent in the Company’s business. The material
risks and uncertainties that management believes affect Ameris are described below. Before making an investment
decision, you should carefully consider the risks and uncertainties described below, together with all of the other
information included or incorporated by reference in this Annual Report. The risks and uncertainties described
below are not the only ones facing the Company. Additional risks and uncertainties that management is not aware
of or focused on or that management currently deems immaterial may also impair the Company’s business
operations. This Annual Report is qualified in its entirety by these risk factors.
If any of the following risks actually occurs, the Company’s financial condition and results of operations could be
materially and adversely affected. If this were to happen, the value of the common stock of Ameris could decline
significantly, and you could lose all or part of your investment.
16
Changes in interest rates could adversely impact the Company’s financial condition and results of operations.
The Company’s earnings and cash flows are largely dependent upon its net interest income. Net interest income is
the difference between interest income earned on interest-earning assets, such as loans and securities, and interest
expense paid on interest-bearing liabilities, such as deposits and borrowed funds. Interest rates are highly sensitive
to many factors that are beyond the control of Ameris, including general economic conditions and policies of
various governmental and regulatory agencies and, in particular, the Federal Reserve Board of Governors. Changes
in monetary policy, including changes in interest rates, could influence not only the interest the Company receives
on loans and securities and the amount of interest it pays on deposits and borrowings, but such changes could also
affect the Company’s ability to originate loans and obtain deposits, the fair value of the Company’s financial assets
and liabilities and the average duration of the Company’s mortgage-backed securities portfolio. If the interest rates
paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other
investments, the Company’s net interest income and, therefore, its earnings, could be adversely affected. Earnings
could also be adversely affected if the interest rates received on loans and other investments fall more quickly than
the interest rates paid on deposits and other borrowings. Although management believes it has implemented
effective asset and liability management strategies to reduce the potential effects of changes in interest rates on the
Company’s results of operations, any substantial, unexpected, prolonged change in market interest rates could have
a material adverse effect on the Company’s financial condition and results of operations.
If the Company has higher loan losses than it has allowed for, its earnings could materially decrease.
The Company’s loan customers may not repay loans according to their terms, and the collateral securing the
payment of loans may be insufficient to assure repayment. Ameris may therefore experience significant credit
losses which could have a material adverse effect on its operating results. Ameris makes various assumptions and
judgments about the collectibility of its loan portfolio, including the creditworthiness of borrowers and the value of
the real estate and other assets serving as collateral for the repayment of loans. In determining the size of the
allowance for loan losses, the Company relies on its experience and its evaluation of economic conditions. If its
assumptions prove to be incorrect, its current allowance for loan losses may not be sufficient to cover losses inherent
in its loan portfolio and adjustment may be necessary to allow for different economic conditions or adverse
developments in its loan portfolio. Consequently, a problem with one or more loans could require the Company to
significantly increase the level of its provision for loan losses. In addition, federal and state regulators periodically
review the Company’s allowance for loan losses and may require it to increase its provision for loan losses or
recognize further loan charge-offs. Material additions to the allowance would materially decrease the Company’s
net income.
Ameris has a high concentration of loans secured by real estate and a downturn in the real estate market, for any
reason, could result in losses and materially and adversely affect business, financial condition, results of operations
and future prospects.
A significant portion of the Company’s loan portfolio is dependent on real estate. In addition to the financial
strength and cash flow characteristics of the borrower in each case, often loans are secured with real estate collateral.
At December 31, 2006, approximately 74.7% of loans have commercial or residential real estate as a component of
collateral. The real estate in each case provides an alternate source of repayment in the event of default by the
borrower and may deteriorate in value during the time the credit is extended. An adverse change in the economy
affecting values of real estate generally or in Ameris’s primary markets specifically could significantly impair the
value of collateral and ability to sell the collateral upon foreclosure. Furthermore, it is likely that, in a decreasing
real estate market, Ameris would be required to increase its allowance for loan losses. If the Company is required to
liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values or to increase
its allowance for loan losses, its profitability and financial condition could be adversely impacted.
17
Ameris operates in a highly regulated environment and may be adversely impacted by changes in law and
regulations.
Ameris, primarily through its Bank, is subject to extensive federal and state regulation and supervision. Banking
regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking
system as a whole, not shareholders. These regulations affect the Company’s lending practices, capital structure,
investment practices, dividend policy and growth, among other things. Congress and federal regulatory agencies
continually review banking laws, regulations and policies for possible changes. Changes to statutes, regulations or
regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could
affect the Company in substantial, unpredictable and adverse ways. Such changes could subject the Company to
additional costs, limit the types of financial services and products the Company may offer and/or increase the ability
of non-banks to offer competing financial services and products, among other things. Failure to comply with laws,
regulations or policies could result in sanctions by regulatory agencies, civil money penalties and/or reputation
damage, which could have a material adverse effect on the Company’s business, financial condition and results of
operations. While the Company has policies and procedures designed to prevent any such violations, there can be
no assurance that such violations will not occur.
Ameris relies on dividends from its banking subsidiary for most of its revenue.
Ameris Bancorp is a separate and distinct legal entity from its subsidiaries. It receives substantially all of its revenue
from dividends from the Bank. These dividends are the principal source of funds to pay dividends on the
Company’s common stock and interest and principal on the Company’s debt. Various federal and/or state laws and
regulations limit the amount of dividends that the Bank may pay to the Company. Also, the Company’s right to
participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims
of the subsidiary’s creditors. In the event the Bank is unable to pay dividends to the Company, the Company may
not be able to service debt, pay obligations or pay dividends on the Company’s common stock and its business,
financial condition and results of operations may be adversely affected.
Ameris’s Articles of Incorporation and Bylaws may prevent or delay a takeover by another company.
Ameris’s Articles of Incorporation permit Ameris’s board of directors to issue preferred stock without shareowner
action. The ability to issue preferred stock could discourage a company from attempting to obtain control of Ameris
by means of a tender offer, merger, proxy contest or otherwise. Additionally, Ameris’s Articles of Incorporation
and Bylaws divide Ameris’s board of directors into three classes, as nearly equal in size as possible, with staggered
three-year terms. One class is elected each year. The classification of Ameris’s board of directors could make it
more difficult for a company to acquire control of Ameris. Ameris is also subject to certain provisions of the
Georgia Business Corporation Code and Ameris’s Articles of Incorporation which relate to business combinations
with interested shareholders.
Ameris operates in a highly competitive industry and market areas.
Ameris faces substantial competition in all areas of its operations from a variety of different competitors, many of
whom are larger and may have more financial resources. Such competitors primarily include national, regional and
community banks within the various markets in which the Bank operates. Ameris also faces competition from many
other types of financial institutions, including, without limitation, savings and loan institutions, credit unions,
finance companies, brokerage firms, insurance companies, factoring companies and other financial intermediaries.
The financial services industry could become even more competitive as a result of legislative, regulatory and
technological changes and continued consolidation. Banks, securities firms and insurance companies can merge
under the umbrella of a financial holding company, which can offer virtually any type of financial service, including
banking, securities underwriting, insurance (both agency and underwriting) and merchant banking. Also,
technology has lowered barriers to entry and made it possible for non-banks to offer products and services
traditionally provided by banks, such as automatic transfer and automatic payment systems. Many of the
Company’s competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due to
their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of
products and services as well as better pricing for those products and services than the Company can.
18
The Company’s ability to compete successfully depends on a number of factors, including, among other things:
•
•
•
•
•
•
the ability to develop, maintain and build upon long-term customer relationships based on quality
service, high ethical standards and safe, sound assets;
the ability to expand the Company’s market position;
the scope, relevance and pricing of products and services offered to meet customer needs and
demands;
the rate at which the Company introduces new products and services relative to its competitors;
customer satisfaction with the Company’s level of service; and
industry and general economic trends.
Failure to perform in any of these areas could significantly weaken the Company’s competitive position, which
could adversely affect the Company’s growth and profitability, which, in turn, could have a material adverse effect
on the Company’s financial condition and results of operations.
Potential acquisitions may disrupt the Company’s business and dilute shareholder value.
Acquiring other banks, businesses or branches involves various risks commonly associated with acquisitions,
including, among other things:
• potential exposure to unknown or contingent liabilities of the target company;
•
exposure to potential asset quality issues of the target company;
• difficulty and expense of integrating the operations and personnel of the target company;
• potential disruption to the Company’s business;
• potential diversion of the Company’s management’s time and attention;
•
the possible loss of key employees and customers of the target company;
• difficulty in estimating the value of the target company; and
• potential changes in banking or tax laws or regulations that may affect the target company.
Ameris has recently acquired other financial institutions and often evaluates additional merger and acquisition
opportunities related to possible transactions with other financial institutions and financial services companies. As a
result, merger or acquisition discussions and, in some cases, negotiations may take place and future mergers or
acquisitions involving cash, debt or equity securities of the Company may occur at any time. Acquisitions typically
involve the payment of a premium over book and market values, and, therefore, some dilution of the Company’s
tangible book value and net income per common share may occur in connection with any future transaction.
Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product
presence and/or other projected benefits and synergies from an acquisition could have a material adverse effect on
the Company’s financial condition and results of operations.
19
Ameris continually encounters technological change.
The financial services industry is continually undergoing rapid technological change with frequent introductions of
new technology-driven products and services. The effective use of technology increases efficiency and enables
financial institutions to better serve customers and to reduce costs. The Company’s future success depends, in part,
upon its ability to address the needs of its customers by using technology to provide products and services that will
satisfy customer demands, as well as to create additional efficiencies in the Company’s operations. Many of the
Company’s competitors have substantially greater resources to invest in technological improvements. The
Company may not be able to effectively implement new technology-driven products and services or be successful in
marketing these products and services to its customers. Failure to successfully keep pace with technological change
affecting the financial services industry could have a material adverse impact on the Company’s business and, in
turn, the Company’s financial condition and results of operations.
Ameris may not be able to attract and retain skilled people.
The Company’s success depends, in large part, on its ability to attract and retain key people. Competition for the
best people in most activities engaged in by the Company can be intense and the Company may not be able to hire
people or to retain them. The unexpected loss of services of one or more of the Company’s key personnel could
have a material adverse impact on the Company’s business because of their skills, knowledge of the Company’s
market, years of industry experience and the difficulty of promptly finding qualified replacement personnel.
Financial services companies depend on the accuracy and completeness of information about customers and
counterparties.
In deciding whether to extend credit or enter into other transactions, the Company may rely on information
furnished by or on behalf of customers and counterparties, including financial statements, credit reports and other
financial information. The Company may also rely on representations of those customers, counterparties or other
third parties, such as independent auditors, as to the accuracy and completeness of that information. Reliance on
inaccurate or misleading financial statements, credit reports or other financial information could have a material
adverse impact on the Company’s business and, in turn, the Company’s financial condition and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Ameris’s corporate headquarters is located at 24 Second Avenue, SE, Moultrie, Georgia 31768. The Company
occupies approximately 43,348 square feet at this location including 3,524 square feet used by the Bank. In addition
to executive offices and the Bank, the corporate headquarters includes mostly support services for banking
operations including credit, sales and operational support, as well as audit and loan review services.
In addition to its corporate headquarters, Ameris operates 44 office or branch locations, of which 42 are owned and
two are subject to either building or ground leases. At December 31, 2006, there were no significant encumbrances
on the offices, equipment or other operational facilities owned by Ameris and the Bank.
20
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company and the Bank are parties to legal proceedings arising in the ordinary course of our
business operations, including the case described below. Management, after consultation with legal counsel, does
not anticipate that current litigation will have a material adverse effect on the Company’s financial position or
results of operations or cash flows.
On June 15, 2006, a Houston County, Alabama jury entered a verdict in a civil action against Southland Bank, a
former subsidiary of the Company that in 2006 was merged with and into the Bank, and one of Southland Bank’s
employees in the amount of approximately $7.1 million. The plaintiffs in this action had unsuccessfully applied to
Southland Bank for a business loan. The plaintiffs sued Southland Bank and the employee for actual and punitive
damages alleging a number of purported causes of action, including breach of contract, negligent failure to provide a
loan and fraud, among other things, based on Southland Bank’s denial of the loan application. The verdict assesses
compensatory damages in the amount of $2.1 million and punitive damages against Southland Bank in the amount
of $5 million. The defendants have filed post-trial motions, which are now pending. It is anticipated that any
potential financial obligation that we or our subsidiaries might have to the plaintiffs in this action will be covered by
existing insurance.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
No matters were submitted to a vote of our shareholders during the fourth quarter of 2006.
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Price of Common Stock
Ameris’s common stock, $1.00 par value per share (the “Common Stock”), is listed on the Nasdaq Global Select
Market (“Nasdaq”) under the symbol “ABCB”. The following table sets forth: (i) the high and low bid prices for
the Common Stock as quoted on Nasdaq during 2006 and 2005; and (ii) the amount of quarterly dividends declared
on the Common Stock during the periods indicated. The high and low bid prices reflect inter-dealer prices, without
retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.
Quarter Ended 2006
High
Low
Close
Dividend
March 31
June 30
September 30
December 31
$22.87
23.01
27.77
28.99
$19.26
20.03
20.99
25.77
$22.87
22.91
27.07
28.18
$.14
.14
.14
.14
Quarter Ended 2005
High
Low
Close
Dividend
March 31
June 30
September 30
December 31
Holders of Common Stock
$20.00
19.20
20.32
20.99
$15.22
16.42
17.60
17.57
$16.89
18.08
19.19
19.84
$.14
.14
.14
.14
As of March 1, 2007, there were approximately 2,000 holders of record of the Company’s Common Stock. The
Company believes that a portion of Common Stock outstanding is held either in nominee name or street name
brokerage accounts; therefore, the Company is unable to determine the number of beneficial owners of the Common
Stock.
21
Performance Graph
Set forth below is a line graph comparing the change in the cumulative total shareholder return on the Common
Stock against the cumulative return of the Nasdaq Stock Market (U.S. Companies) Index and the index of Nasdaq
Bank Stocks for the five-year period commencing December 31, 2001, and ending December 31, 2006. This line
graph assumes an investment of $100 on December 31, 2001 and reinvestment of dividends and other distributions
to shareholders.
22
ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected consolidated financial information for Ameris. The data set forth below is
derived from the audited consolidated financial statements of Ameris. The acquisitions of Citizens on November 30,
2004, FNB on December 15, 2005 and Islands on December 31, 2006 have significantly affected the comparability
of selected financial data. Specifically, since these acquisitions were accounted for using the purchase method, the
assets of the acquired institutions were recorded at their fair values, the excess purchase price over the net fair value
of the assets was recorded as goodwill and the results of operations for these businesses have been included in the
Company’s results since the date these acquisitions were completed. Accordingly, the level of our assets and
liabilities and our results of operations for these acquisitions have significantly affected the Company’s financial
position and results of operations. Discussion of these acquisitions can be found in the “Corporate Restructuring
and Business Combinations” section of Part 1, Item 1. of this Annual Report and in Note 3 – Business Combinations
in the Notes to Consolidated Financial Statements. The selected financial data should be read in conjunction with,
and is qualified in its entirety by, the Consolidated Financial Statements and the Notes thereto and Management’s
Discussion and Analysis of Financial Condition and Results of Operations included elsewhere herein.
2006
Year Ended December 31,
2004
(Dollars in Thousands, Except Per Share Data)
2005
2003
2002
Selected Balance Sheet Data:
Total assets
Total loans
Total deposits
Investment securities
Shareholders’ equity
Selected Income Statement Data:
Interest income
Interest expense
Net interest income
Provision for loan losses
Other income
Other expenses
Income before tax
Income tax expense
Net income
Per Share Data:
Net income - basic
Net income – diluted
Book value
Tangible book value
Dividends
$ 2,047,542 $ 1,697,209 $ 1,267,993 $ 1,169,111 $ 1,193,406
1,442,951
833,447
1,710,163
916,047
290,207
184,081
178,732
107,484
1,186,601
1,375,232
243,742
148,703
877,074
986,224
221,741
120,939
840,539
906,524
196,289
113,613
$
$
$
124,111 $
54,150
69,961
2,837
19,262
53,129
33,257
11,129
22,128
$
1.71 $
1.68
13.21
8.74
0.56
79,539 $
26,934
52,605
1,651
13,530
43,607
20,877
7,149
13,728 $
1.15 $
1.14
11.48
7.64
0.56
64,365 $
19,375
44,990
1,786
13,023
36,505
19,722
6,621
13,101 $
1.12 $
1.11
10.28
7.90
0.47
64,479 $
22,141
42,338
3,945
14,718
35,147
17,964
5,954
12,010 $
1.03 $
1.02
9.68
7.76
0.43
71,347
28,240
43,107
5,574
15,706
37,807
15,432
5,077
10,355
0.87
0.87
9.17
7.16
0.40
23
2006
Year Ended December 31,
2005
2004
2003
2002
Profitability Ratios:
Net income to average total assets
Net income to average
stockholders’ equity
Net interest margin
Efficiency ratio
Loan Quality Ratios:
Net charge-offs to total loans
Reserve for loan losses to total loans
and OREO
Nonperforming assets to total loans
and OREO
Reserve for loan losses to
nonperforming loans
Reserve for loan losses to total
nonperforming assets
Liquidity Ratios:
Loans to total deposits
Average loans to average earnings assets
Noninterest-bearing deposits to
(Dollars in Thousands, Except Per Share Data)
1.22%
1.04%
1.12%
1.04%
0.90%
13.90
4.25
59.55
10.87
4.31
65.94
11.19
4.15
62.93
10.85
3.96
61.60
9.81
4.07
64.28
.10%
.03%
0.22%
0.46%
0.68%
1.72
0.61
1.88
0.90
1.77
0.70
1.78
0.95
1.78
1.11
361.54
232.57
274.70
231.20
196.64
281.93
207.68
253.32
187.58
160.74
84.38%
79.39
86.28%
77.32
88.93%
80.91
92.72%
78.63
90.98%
78.76
total deposits
12.96
14.60
15.22
15.63
14.38
Capital Adequacy Ratios:
Common stockholders’ equity to
total assets
Dividend payout ratio
8.73%
32.94
8.76%
48.70
9.54%
41.96
9.72%
41.75
9.01%
45.98
24
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
The year ended December 31, 2006 results reflect a successful execution of our goals and objectives that were set
during 2005. Continued growth of our franchise in our existing markets was complimented by the expansion into
other growth markets both by acquisition and de novo branching. Recruiting efforts that began in 2005 continued
during the year and paid dividends as the Company was able to bolster production and sales staffs considerably
across our footprint.
The Company completed two very important initiatives that were critical to our long-term success. Our efforts to
collapse our charters into a single bank charter and adopt a uniform brand across our geographic footprint were
completed successfully in December 2006. This effort required enormous amounts of planning, and our Company’s
employees handled the responsibility of maintaining excellent customer relationships through the changes in an
extraordinarily professional manner.
The Company reported net income of $22.1 million, or $1.68 per diluted share, for the year ended December 31,
2006 compared to $13.7 million, or $1.14 per diluted share, in 2005. Our earnings during 2006 reflect non-recurring
income of $1.9 million after tax related to the sale of three bank charters to unrelated parties as well as $900,000 of
non-recurring expenses associated with the corporate restructuring announced during 2005 and completed in
December 2006. During the fourth quarter of 2005, the Company incurred approximately $1.85 million in non-
recurring expenses associated with the first stages of the corporate restructuring.
Total assets at December 31, 2006 were approximately $2.05 billion, an increase of $350.3 million, or 20.6%, from
total assets of $1.7 billion at December 31, 2005. This level includes approximately $92 million of total assets
related to the purchase of Islands on December 31, 2006. During 2006, the pace of growth in loans and deposits
from existing markets continued at a double digit pace as momentum from the corporate restructuring and a re-
invigorated sales culture began to take hold. Internal growth in loans for 2006, excluding the acquisition of Islands,
was $193.0 million, or 16.3%, while internal growth of deposits was $271.6 million, an increase of 19.8%.
Net interest income for the year grew solidly as the Company benefited from a favorable interest rate environment as
well as double digit growth in earning assets. For the year ended December 31, 2006, net interest income was $69.9
million compared to $52.6 million for 2005, an increase of 32.9%. The Company’s net interest margin tightened
slightly during the year to 4.25% from 4.31% in 2005.
Operating expenses grew during 2006 to $53.1 million from $43.6 million in 2005. This growth in operating
expenses during 2006 relates primarily to the acquisition of FNB in December 2005 and to continued efforts to
expand sales and production staff in most of our markets. Despite the growth in operating expenses, the efficiency
ratio improved during the year to 59.55% from 65.94% in 2005.
Ameris’s credit quality improved substantially in 2006 due primarily to a reduction in problem loans acquired
through mergers. Non-performing assets as a percentage of total loans at the end of 2006 were 0.61%, a decrease
from the 0.90% reported at the end of 2005. For the year ended December 31, 2006, Ameris had net charge-offs of
0.10% compared to 0.03% in 2005. The Company’s loan loss reserve as a percentage of loans fell to 1.72% at
December 31, 2006 from 1.88% at December 31, 2005.
25
CRITICAL ACCOUNTING POLICIES
Ameris has established certain accounting and financial reporting policies to govern the application of accounting
principles generally accepted in the United States of America in the preparation of our financial statements. Our
significant accounting policies are described in the Notes to the Consolidated Financial Statements. Certain
accounting policies involve significant judgments and assumptions by management which have a material impact on
the carrying value of certain assets and liabilities; management considers these accounting policies to be critical
accounting policies. The judgments and assumptions used by management are based on historical experience and
other factors which are believed to be reasonable under the circumstances. Because of the nature of the judgments
and assumptions made by management, actual results could differ from the judgments and estimates adopted by
management which could have a material impact on the carrying values of assets and liabilities and the results of
Ameris’s operations. We believe the following accounting policies applied by Ameris represent critical accounting
policies.
Allowance for Loan Losses
We believe the allowance for loan losses is a critical accounting policy that requires the most significant judgments
and estimates used in the preparation of our consolidated financial statements. The allowance for loan losses
represents management’s estimate of probable loan losses inherent in the Company’s loan portfolio. Calculation of
the allowance for loan losses represents a critical accounting estimate due to the significant judgment, assumptions
and estimates related to the amount and timing of estimated losses, consideration of current and historical trends and
the amount and timing of cash flows related to impaired loans.
Management believes that the allowance for loan losses is adequate. While management uses available information
to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in
economic conditions. In addition, various regulatory agencies, as an integral part of their examination processes,
periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize
additions to the allowance for loan losses based on their judgments about information available to them at the time
of their examination.
Considering current information and events regarding a borrower’s ability to repay its obligations, management
considers a loan to be impaired when the ultimate collectibility of all amounts due, according to the contractual
terms of the loan agreement, is in doubt. When a loan is considered to be impaired, the amount of impairment is
measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate. If
the loan is collateral-dependent, the fair value of the collateral is used to determine the amount of impairment.
Impairment losses are included in the allowance for loan losses through a charge to the provision for losses on loans.
Subsequent recoveries are credited to the allowance for loan losses. Cash receipts for accruing loans are applied to
principal and interest under the contractual terms of the loan agreement. Cash receipts on impaired loans for which
the accrual of interest has been discontinued are applied first to principal and then to interest income.
The accounting for impaired loans described above applies to all loans, except for large pools of smaller-balance,
homogeneous loans that are collectively evaluated for impairment, loans that are measured at fair value or at the
lower of cost or fair value and debt securities. The allowance for loan losses for large pools of smaller-balance,
homogeneous loans is established through consideration of such factors as changes in the nature and volume of the
portfolio, overall portfolio quality, adequacy of the underlying collateral, loan concentrations, historical charge-off
trends and economic conditions that may affect the borrowers’ ability to pay.
26
Certain economic and interest rate factors could have a material impact on the determination of the allowance for
loan losses. An increase in interest rates by the Federal Reserve would favorably impact our net interest margin. An
improving economy could result in the expansion of businesses and creation of jobs which would positively affect
Ameris’s loan growth and improve our gross revenue stream. Conversely, certain factors could result from an
expanding economy which could increase our credit costs and adversely impact our net earnings. A significant
rapid rise in interest rates could create higher borrowing costs and shrinking corporate profits which could have a
material impact on a borrower’s ability to pay. We will continue to concentrate on maintaining a high quality loan
portfolio through strict administration of our loan policy.
Another factor that we have considered in the determination of the allowance for loan losses is loan concentrations
to individual borrowers or industries. At December 31, 2006, we had 26 credit relationships that exceeded $5
million with the largest credit relationship being approximately $12.5 million.
A substantial portion of our loan portfolio is in the commercial real estate and residential real estate sectors. Those
loans are secured by real estate in Ameris’s primary market area. A substantial portion of other real estate owned is
located in those same markets. Therefore, the ultimate collectibility of a substantial portion of our loan portfolio and
the recovery of a substantial portion of the carrying amount of other real estate owned are susceptible to changes to
market conditions in Ameris’s primary market area.
Income Taxes
SFAS No. 109, “Accounting for Income Taxes,” requires the asset and liability approach for financial accounting
and reporting for deferred income taxes. We use the asset and liability method of accounting for deferred income
taxes and provide deferred income taxes for all significant income tax temporary differences. See Note 12 to the
Notes to Consolidated Financial Statements for additional details.
As part of the process of preparing our consolidated financial statements we are required to estimate our income
taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax
exposure together with assessing temporary differences resulting from differing treatment of items, such as
depreciation and the provision for loan losses, for tax and financial reporting purposes. These differences result in
deferred tax assets and liabilities that are included in our consolidated balance sheet.
We must also assess the likelihood that our deferred tax assets will be recovered from future taxable income, and to
the extent we believe that recovery is not likely, we must establish a valuation allowance. Significant management
judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any
valuation allowance recorded against our net deferred tax assets. To the extent we establish a valuation allowance or
adjust this allowance in a period, we must include an expense within the tax provisions in the statement of income.
We have recorded on our consolidated balance sheet net deferred tax assets of $6.0 million, which includes amounts
relating to loss carryforwards. We believe there will be sufficient taxable income in the future to allow us to utilize
these loss carryforwards in the tax jurisdictions where they exist.
27
Long-Lived Assets, Including Intangibles
In our financial statements, we have recorded $60.5 million of goodwill and other intangible assets, which represents
the amount by which the price we paid for acquired businesses exceeds the fair value of tangible assets acquired plus
the liabilities assumed. We evaluate long-lived assets, such as property and equipment, specifically identifiable
intangibles and goodwill, when events or changes in circumstances indicate that the carrying value of such assets
might not be recoverable. Factors that could trigger impairment include significant underperformance relative to
historical or projected future operating results, significant changes in the manner of our use of the acquired assets
and significant negative industry or economic trends.
The determination of whether impairment has occurred is based on an estimate of undiscounted cash flows
attributable to the assets as compared to the carrying value of the assets. If impairment has occurred, the amount of
the impairment loss recognized would be determined by estimating the fair value of the assets and recording a loss if
the fair value was less than the book value.
In determining the existence of impairment factors, our assessment is based on market conditions, operational
performance and legal factors of our Company. Our review of factors present and the resulting appropriate carrying
value of our goodwill, intangibles and other long-lived assets are subject to judgments and estimates that
management is required to make. Future events could cause us to conclude that impairment indicators exist and that
our goodwill, intangibles and other long-lived assets might be impaired. In accordance with accounting rules
promulgated by the Financial Accounting Standards Board (“FASB”), no amount of goodwill was expensed in
2006, 2005 or 2004.
NET INCOME AND EARNINGS PER SHARE
In 2006, we reported net income of $22.1 million, or $1.68 per diluted share, compared to $13.7 million, or $1.14
per diluted share in 2005 and $13.1 million, or $1.11 per diluted share, in 2004. Our return on average assets was
1.22%, 1.04% and 1.12% in 2006, 2005 and 2004, respectively. Our return on average stockholders’ equity was
13.90%, 10.87% and 11.19% in 2006, 2005 and 2004, respectively.
EARNING ASSETS AND LIABILITIES
Average earning assets in 2006 increased 35.2% over 2005 levels principally due to the acquisition of FNB in
December 2005. Additional growth from the Company’s existing markets also continued at double digit levels for
the second consecutive year. The earning asset and interest-bearing liability mix is consistently monitored to
increase net interest margin and therefore increase profitability.
The following statistical information should be read in conjunction with “Management’s Discussion and Analysis of
Financial Condition and Results of Operation” and the financial statements and related notes included elsewhere in
this Annual Report and in the documents incorporated herein by reference.
28
The following tables set forth the amount of the our interest income or interest expense for each category of interest-
earning assets and interest-bearing liabilities and the average interest rate for total interest-earning assets and total
interest-bearing liabilities, net interest spread and net yield on average interest-earning assets. Federally tax-exempt
income is presented on a taxable-equivalent basis assuming a 35% federal tax rate.
2006
Interest Average
Income/
Expense Rate Paid
Yield/
Average
Balance
Year Ended December 31,
2005
Interest Average
Income/
Expense Rate Paid
Yield/
Average
Balance
2004
Interest
Income/
Expense
Average
Yield/
Rate Paid
Average
Balance
(Dollars in Thousands)
ASSETS
Interest-earning assets:
Loans
Investment securities
Short-term assets
$ 1,308,405 $ 107,809
12,550
3,843
267,343
72,183
8.24% $
4.69
5.32
952,647 $ 69,238
8,794
223,633
1,591
42,884
7.27% $
3.93
3.71
855,205 $ 56,433
7,472
190,643
547
31,782
6.60%
3.92
1.72
Total earning assets
1,647,931
124,202
7.54
1,219,164
79,623
6.53
1,077,630
64,452
5.98
Non-earning assets
165,839
103,431
95,582
Total assets
$ 1,813,770
$ 1,322,595
$ 1,173,212
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Savings and interest-bearing
demand deposits
Time deposits
Other borrowings
FHLB advances
Trust preferred securities
Total interest-bearing
liabilities
Demand deposits
Other liabilities
Stockholders’ equity
Total liabilities and
stockholders’ equity
Interest rate spread
Net interest income
Net interest margin
$
521,783 $ 11,397
34,202
773,089
514
11,910
4,246
91,119
3,791
41,841
2.18 % $
4.42
4.32
4.66
8.20
393,592
498,036
6,521
100,456
35,779
$
4,013
15,016
103
4,296
3,506
1.02 % $
3.02
1.58
4.28
9.80
$
357,893
406,467
5,235
110,977
35,567
2,604
8,702
67
4,496
3,506
0.73 %
2.14
1.28
4.05
9.86
1,439,742
54,150
3.74
1,034,084
26,934
2.60
916,139
19,375
2.11
194,150
20,684
159,194
154,326
7,895
126,290
133,546
6,463
117,064
$ 1,813,770
$ 1,322,595
$ 1,173,212
$ 70,052
3.80 %
4.25 %
$ 52,689
3.93 %
4.32 %
$
45,077
3.87 %
4.18 %
29
RESULTS OF OPERATIONS
Net Interest Income
Net interest income represents the amount by which interest income on interest-bearing assets exceeds interest
expense incurred on interest-bearing liabilities. Net interest income is the largest component of our income and is
affected by the interest rate environment and the volume and composition of interest-earning assets and interest-
bearing liabilities. Our interest-earning assets include loans, investment securities, interest-bearing deposits in banks
and federal funds sold. Our interest-bearing liabilities include deposits, other short-term borrowings, FHLB
advances and subordinated debentures.
2006 compared with 2005:
Interest income for the year ended December 31, 2006 was $124.2 million, an increase of $44.6 million, or 56.0%,
compared to the same period in 2005. Average earning assets increased $428.8 million, or 35.2%, to $1.64 billion
for the year ended December 31, 2006 compared to $1.22 billion as of December 31, 2005. Yield on average
earning assets on a taxable equivalent basis for 2006 increased to 7.54% from 6.53% and 5.98% for the years ended
December 31, 2005 and 2004, respectively. The Company’s increase in interest income is equally attributable to
both an increase in average earning assets and a higher rate environment for most of 2006 than what was seen in
previous years.
Interest expense on deposits and other borrowings for the year ended December 31, 2006 was $54.2 million, a $27.2
million increase from the year ended December 31, 2005. While average interest-bearing liabilities increased
substantially, by $405.7 million, the higher rate environment and, consequently, higher rates on those liabilities
contributed to the higher level of interest expense. Rates on average interest-bearing liabilities increased to 3.74%
from 2.60% and 2.11% as of December 31, 2005 and 2004, respectively. Our Company aggressively manages our
cost of funds to achieve a balance between high levels of profitability and acceptable levels of growth.
Net interest income for 2006, on a taxable-equivalent basis, was $70.1 million compared to $52.7 million in 2005,
an increase of 33.0%. The Company’s net interest margin, on a tax equivalent basis, decreased slightly to 4.25% for
the year ended December 31, 2006 compared to 4.32% as of December 31, 2005.
2005 compared with 2004:
Interest income for the year ended December 31, 2005 was $79.6 million, an increase of $15.1 million, or 23.6%,
compared to $64.3 million for the same period in 2004. Average earning assets increased $141.2 million, or
13.13%, to $1.22 billion for the year ended December 31, 2005 compared to $1.08 billion as of December 31, 2004.
Yield on average earning assets on a taxable equivalent basis increased 55 basis points to 6.53% from 5.98% for the
years ended December 31, 2005 and 2004, respectively. The Company’s increase in interest income is equally
attributable to both an increase in average earning assets and the 200 basis point increase in the prime rate from
December 2004 to December 2005.
Interest expense on deposits and other borrowings for the year ended December 31, 2005 was $26.9 million, a $7.6
million, or 39.0% increase from the year ended December 31, 2004. While average interest-bearing liabilities
increased $117.9 million, or 12.87%, to $1.03 billion as of December 31, 2005 compared to $916.1 million for the
year ended December 31, 2004, the yield on average interest-bearing liabilities increased 49 basis points to 2.60%
from 2.11% as of December 31, 2005 and 2004, respectively.
Net interest income for 2005, on a taxable-equivalent basis, was $52.7 million compared to $45.1 million in 2004,
an increase of $7.6 million or 16.89%. The increase was mainly attributable to the growth in the balance sheet. The
Company’s net interest margin, on a tax equivalent basis, increased to 4.32% for the year ended December 31, 2005
compared to 4.18% as of December 31, 2004.
30
Year Ended December 31,
2006 vs. 2005
2005 vs. 2004
Increase
(Decrease) Rate
Changes Due To
Increase
Changes Due To
Volume (Decrease) Rate
(Dollars in Thousands)
Volume
Increase (decrease) in:
Income from earning assets:
Interest and fees on loans
Interest on securities:
Short-term assets
Total interest income
$
38,321 $
3,992
2,259
44,572
12,275 $
2,038
1,165
15,478
26,046 $
1,954
1,094
29,094
12,805 $
1,322
1,044
15,171
6,375 $
38
855
7,268
6,430
1,284
189
7,903
Expense from interest-bearing
Interest on savings and interest-
bearing demand deposits
Interest on time deposits
Interest on other borrowings
Interest on FHLB advances
Interest on trust preferred securities
Total interest expense
7,384
19,186
411
(50)
285
27,216
6,077
10,879
335
323
(667)
16,947
1,307
8,307
76
(373)
952
10,269
1,409
6,314
36
(200)
-
7,559
1,149
4,354
20
226
-
5,749
260
1,960
16
(426)
-
1,810
Net interest income
$
17,356 $
(1,469) $
18,825 $
7,612 $
1,519 $
6,093
Provision for Loan Losses
The allowance for loan losses is a reserve established through charges to earnings in the form of a provision for loan
losses. The provision for loan losses is based on management’s evaluation of the size and composition of the loan
portfolio, the level of non-performing and past due loans, historical trends of charged-off loans and recoveries,
prevailing economic conditions and other factors management deems appropriate. As these factors change, the level
of loan loss provision changes. Our provision for loan losses totaled $2.8 million in 2006, $1.7 million in 2005 and
$1.8 million in 2004. The allowance for loan losses represented 1.72%, 1.88% and 1.77% of total loans outstanding
at December 31, 2006, 2005 and 2004, respectively. The increase in the provision expense during 2006 is primarily
the result of growth in the Company’s loan portfolio. Stable levels of provision in 2005 and 2004 reflect varying
degrees of credit improvement, loan loss recoveries and loan portfolio growth. The increase in the allowance for
loan losses to total loans outstanding in 2005 relates primarily to the assumption of several larger problem loans in
the acquisition of FNB. The Company’s levels of reserves returned closer to its historical levels during 2006 as
these loans were successfully worked off the Company’s balance sheet.
Non-interest income
Following is a comparison of non-interest income for 2006, 2005 and 2004.
2006
Years Ended December 31,
2005
(Dollars in Thousands)
2004
Service charges on deposit accounts
Other service charges, commissions and fees
Mortgage origination fees
Gain (loss) on sale of securities
Other income
$ 11,538
997
2,208
(308)
4,827
$ 19,262
$ 10,428
926
1,614
(391)
953
$ 13,530
$ 10,210
737
1,427
-
649
$ 13,023
31
2006 compared with 2005:
Total non-interest income during 2006 increased substantially to $19.3 million, an increase of 42.4% over 2005
levels. Service charges on deposit accounts increased by 10.6% during 2006 to $11.5 million as the Company
experienced strong increases in demand deposits and sought to maximize this area of income with certain changes to
its deposit account fee structure. Mortgage fees increased by 36.8% during 2006 to $2.2 million as the Company
expanded its mortgage production staff in most of its geographic footprint. Other income during 2006 includes $3.1
million of gains recognized from the Company’s successful efforts to sell three banking charters to unrelated parties.
2005 compared with 2004:
For 2005, non-interest income totaled $13.5 million, an increase of $.51 million over non-interest income of $13.0
million in 2004, which represented a 3.89% increase. The growth in fee income of $407,000 in 2005 compared to
2004 was primarily attributable to the growth in demand deposit accounts. During the fourth quarter of 2004, the
Company sold securities at a loss of $391,000 as part of an ongoing strategic long term plan of restructuring the
investment portfolio to help minimize the potential reduction in earnings or capital caused by changes in interest
rates. The increase in non-interest income without the non-recurring securities loss was $898,000 from 2004 to
2005 which represents a 6.90% increase. Other income increased $304,000 from 2004 to 2005. The Company
recorded approximately $127,000 in OREO losses in 2004.
Non-interest expense
Following is a comparison of non-interest expense for 2006, 2005 and 2004.
2006
Years Ended December 31,
2005
(Dollars in Thousands)
2004
Salaries and employee benefits
Equipment and occupancy
Amortization of intangible assets
Data processing fees
Business restructuring
Other expense
$ 27,043
6,836
1,107
2,136
1,452
14,555
$ 53,129
$ 22,483
4,931
819
1,899
2,838
10,637
$ 43,607
$ 20,893
4,770
789
1,680
-
8,373
$ 36,505
2006 compared with 2005:
Non-interest expense increased during 2006 largely as a result of the FNB acquisition. Expenses for these two
banks were not included in our results for 2005 as the acquisition was consummated at the end of the year. The
assets assumed in this acquisition amounted to approximately 18.5% of our total assets at the end of 2005. In
addition to the necessary costs assumed with this acquisition, the Company’s level of operating costs has been
influenced by the need to renovate several existing offices and efforts to hire talented bankers when the opportunity
exists.
Business restructuring costs of $1.5 million in 2006 relate to the restructuring announced during 2005. Additional
costs were necessary as the Company began to streamline it support functions and finalize its efforts to create a
single bank with a uniform and recognizable brand.
32
2005 compared with 2004:
Noninterest expense for 2005 was $7.1 million, or 19.45%, higher compared to 2004. In 2005 we recorded a
business restructuring charge of $2.8 million related to the Company’s corporate restructuring plan and re-branding
efforts to consolidate and streamline the Company’s operations.
Excluding the above nonrecurring expense, noninterest expense increased $4.3 million, or 11.68%, over 2004. The
majority of the increase in 2005 was related to salaries and employee benefits. In compliance with the requirements
of FASB Statement No. 91, “Accounting for Nonrefundable Fees and Costs Associated with Originating or
Acquiring Loans and Initial Direct Costs of Leases”, we allocated $3.5 million of salaries to loan costs in 2005.
After adjusting salaries and benefits for amounts allocated to loan costs, total salaries and benefits increased $2.1
million or 8.82% to $25.9 million in 2005 compared with $23.8 million in 2004. These increases are due to the
acquisition of Citizens in November 2004 as well as general staffing increases concurrent with the expansion of
business in some of our markets. At December 31, 2005, total full-time equivalent employees were approximately
585.
Income Taxes:
Federal income tax expense is influenced by the amount of taxable income, the amount of tax-exempt income and
the amount of non-deductible expenses. Income taxes totaled $11.1 million, $7.1 million and $6.6 million in 2006,
2005 and 2004, respectively. The Company’s effective tax rate was 33% for 2006 and 34% for the years ended
December 31, 2005 and 2004.
LOANS
Management believes that our loan portfolio is adequately diversified. The loan portfolio contains no foreign or
energy-related loans or significant concentrations in any one industry, with the exception of residential and
commercial real estate mortgages, which constituted approximately 51.1% of our loan portfolio as of December 31,
2006. The amount of loans outstanding at the indicated dates is shown in the following table according to type of
loans.
December 31,
2006
2005
2004
2003
2002
(Dollars in Thousands)
Commercial and financial
Agricultural
Real estate - construction
Real estate - mortgage, farmland
Real estate - mortgage, commercial
Real estate - mortgage, residential
Consumer installment loans
Other
Less reserve for possible loan losses
$
174,852 $
33,980
340,325
91,650
397,837
339,843
59,422
5,042
1,442,951
24,863
152,715 $
30,437
224,230
74,023
321,443
317,593
62,508
3,652
1,186,601
22,294
Loans, net
$ 1,418,088 $ 1,164,307 $
136,229 $ 157,594 $
28,198
94,043
64,245
253,001
235,431
60,884
5,043
877,074
15,493
861,581 $ 825,576 $
22,051
60,978
65,433
250,247
209,172
68,230
6,834
840,539
14,963
172,429
34,007
23,020
63,093
243,037
209,485
78,535
9,841
833,447
14,868
818,579
33
Total loans as of December 31, 2006 are shown in the following table according to maturity or repricing
opportunities: (1) one year or less, (2) after one year through five years and (3) after five years.
Maturity or Repricing Within:
One year or less
After one year through five years
After five years
(Dollars in
Thousands)
$ 1,014,445
382,892
45,614
$ 1,442,951
The following table summarizes loans at December 31, 2006 with the due dates after one year which (1) have
predetermined interest rates and (2) have floating or adjustable interest rates.
Predetermined interest rates
Floating or adjustable interest rates
(Dollars in
Thousands)
$
$
417,796
382,112
799,908
Records were not available to present the above information in each category listed in the first paragraph above and
could not be reconstructed without undue burden.
ALLOWANCE AND PROVISION FOR LOAN LOSSES
The allowance for loan losses represents a reserve for potential losses in the loan portfolio. The adequacy of the
allowance for loan losses is evaluated periodically based on a review of all significant loans, with a particular
emphasis on nonaccruing, past due and other loans that management believes require attention. We segregate our
loan portfolio by type of loan and utilize this segregation in evaluating exposure to risks within the portfolio. In
addition, based on internal reviews and external reviews performed by independent auditors and regulatory
authorities, we further segregate our loan portfolio by loan classifications within each type of loan based on an
assessment of risk for a particular loan or group of loans. Certain reviewed loans require specific allowances.
Allowances are provided for other types and classifications of loans based on anticipated loss rates. Allowances are
also provided for loans that are reviewed by management and considered creditworthy and loans for which
management determines no review is required. In establishing allowances, management considers historical loan
loss experience with an emphasis on current loan quality trends, current economic conditions and other factors in the
markets where the Bank operates. Factors considered include among others, unemployment rates, effect of weather
on agriculture and significant local economic events, such as major plant closings.
We have developed a methodology for determining the adequacy of the loan loss reserve which is monitored by the
Company’s senior credit officer and internal audit staff. Procedures provide for the assignment of a risk rating for
every loan included in our total loan portfolio, with the exception of credit card receivables and overdraft protection
loans which are treated as pools for risk rating purposes. The risk rating schedule provides seven ratings of which
three ratings are classified as pass ratings and four ratings are classified as criticized ratings. Each risk rating is
assigned a percent factor to be applied to the loan balance to determine the adequate amount of reserve. Many of the
larger loans require an annual review by an independent loan officer. As a result of loan review, certain loans may
be assigned specific reserve allocations. Other loans that surface as problem loans may also be assigned specific
reserves. Past due loans are assigned risk ratings based on the number of days past due.
34
The following table sets forth the breakdown of the allowance for loan losses by loan category for the periods
indicated. Management believes the allowance can be allocated only on an approximate basis. The allocation of the
allowance to each category is not necessarily indicative of future losses and does not restrict the use of the allowance
to absorb losses in any other category.
2006
2005
At December 31,
2004
(Dollars in Thousands)
2003
2002
% of
Total
Loans
Amount
% of
Total
Loans
Amount
% of
Total
Loans
% of
Total
Loans Amount
% of
Total
Loans
Amount
Amount
Commercial, financial,
industrial and
agricultural
Real estate
Consumer
Unallocated
$ 2,567
17,760
1,070
3,466
12%
83
5
-
$ 9,926
2,953
5,402
4,013
$
15%
79
6
-
6,876
2,036
3,792
2,789
19%
74
7
-
$
6,289
2,431
3,550
2,693
21%
70
9
-
$
5,892
2,651
3,649
2,676
25%
65
10
-
$ 24,863
100%
$ 22,294
100 %
$ 15,493
100%
$ 14,963
100%
$ 14,868
100%
The following table presents an analysis of our loan loss experience for the periods indicated:
2006
2005
December 31,
2004
(Dollars in Thousands)
2003
2002
Average amount of loans outstanding
$ 952,647
$ 952,647
$ 855,205
$ 841,857
$ 827,939
Balance of reserve for possible loan
losses at beginning of period
Charge-offs:
Commercial, financial and agricultural
Real estate
Consumer
Recoveries:
Commercial, financial and agricultural
Real estate
Consumer
Net charge-offs
$ 22,294
$
15,493
$
14,963
$ 14,868
$ 14,944
(1,726)
(1,444)
(967)
1,595
745
505
(1,292)
(649)
(543)
(963)
601
644
532
(378)
(1,639)
(382)
(1,555)
464
483
718
(1,911)
(3,114)
(781)
(1,443)
963
46
479
(3,850)
(2,576)
(2,491)
(2,092)
502
492
515
(5,650)
Additions to reserve charged to operating expenses
2,837
1,651
1,786
3,945
5,574
Allowance for loan losses of acquired subsidiary
1,024
5,528
655
-
-
Balance of reserve for possible
loan losses at end of period
$ 24,863
$
22,294
$
15,493
$ 14,963
$ 14,868
Ratio of net loan charge-offs to average loans
0.10%
0.04%
0.22%
0.46%
0.68%
35
NONPERFORMING LOANS
A loan is placed on non-accrual status when, in management’s judgment, the collection of the interest income
appears doubtful. Interest receivable that has been accrued in prior years and is subsequently determined to have
doubtful collectibility is charged to the allowance for possible loan losses. Interest on loans that are classified as
non-accrual is recognized when received. Past due loans are loans whose principal or interest is past due 90 days or
more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide
terms significantly different from the original contractual terms.
December 31,
2006
2005
2004
(Dollars in Thousands)
2003
2002
Loans accounted for on a non-accrual basis
$
6,877 $ 9,586
$ 5,640
$ 6,472
$ 7,561
Installment loans and term loans contractually
past due ninety days or more as to interest
or principal payments and still accruing
Loans, the terms of which have been renegotiated
to provide a reduction or deferral of interest
or principal because of deterioration in the
financial position of the borrower
Loans now current about which there are serious
doubts as to the ability of the borrower to
comply with present loan repayment terms
-
-
44
25
171
-
-
-
-
-
-
-
-
-
-
In the opinion of management, any loans classified by regulatory authorities as doubtful, substandard or special
mention that have not been disclosed above do not (i) represent or result from trends or uncertainties which
management reasonably expects will materially impact future operating results, liquidity or capital resources, or (ii)
represent material credits about which management is aware of any information which causes management to have
serious doubts as to the ability of such borrowers to comply with the loan repayment terms. Any loans classified by
regulatory authorities as loss have been charged off.
LIQUIDITY AND RATE SENSITIVITY
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 our Company to meet those needs. We seek to meet liquidity requirements
primarily through management of short-term investments (principally interest-bearing deposits in banks) and
monthly amortizing loans. Another source of liquidity is the repayment of maturing single payment loans. In
addition, our Company maintains relationships with correspondent banks which could provide funds to them on
short notice, if needed.
A principal objective of our asset/liability management strategy is to minimize its exposure to changes in interest
rates by matching the maturity and repricing horizons of interest-earning assets and interest-bearing liabilities. This
strategy is overseen in part through the direction of our Asset and Liability Committee (the “ALCO Committee”)
which establishes policies and monitors results to control interest rate sensitivity.
36
As part of our interest rate risk management policy, the ALCO Committee examines the extent to which its assets
and liabilities are “interest rate sensitive” and monitors its interest rate-sensitivity “gap”. An asset or liability is
considered to be interest rate sensitive if it will reprice or mature within the time period analyzed, usually one year
or less. The interest rate-sensitivity gap is the difference between the interest-earning assets and interest-bearing
liabilities scheduled to mature or reprice within such time period. A gap is considered positive when the amount of
interest rate-sensitive assets exceeds the amount of interest rate-sensitive liabilities. A gap is considered negative
when the amount of interest rate-sensitive liabilities exceeds the interest rate-sensitive assets. During a period of
rising interest rates, a negative gap would tend to adversely affect net interest income, while a positive gap would
tend to result in an increase in net interest income. During a period of falling interest rates, a negative gap would
tend to result in an increase in net interest income, while a positive gap would tend to adversely affect net interest
income. If our assets and liabilities were equally flexible and moved concurrently, the impact of any increase or
decrease in interest rates on net interest income would be minimal.
A simple interest rate “gap” analysis by itself may not be an accurate indicator of how net interest income will be
affected by changes in interest rates. Accordingly, the ALCO Committee also evaluates how the repayment of
particular assets and liabilities is impacted by changes in interest rates. Income associated with interest-earning
assets and costs associated with interest-bearing liabilities may not be affected uniformly by changes in interest
rates. In addition, the magnitude and duration of changes in interest rates may have a significant impact on net
interest income. For example, although certain assets and liabilities may have similar maturities or periods of
repricing, they may not react identically to changes in market interest rates. Interest rates on certain types of assets
and liabilities fluctuate in advance of changes in general market interest rates, while interest rates on other types may
lag behind changes in general market rates. In addition, certain assets, such as adjustable rate mortgage loans, have
features (generally referred to as “interest rate caps”) which limit changes in interest rates on a short-term basis and
over the life of the asset. In the event of a change in interest rates, prepayment and early withdrawal levels also
could deviate significantly from those assumed in calculating the interest rate gap. The ability of many borrowers to
service their debts also may decrease in the event of an interest rate increase.
The following table sets forth the distribution of the repricing of our earning assets and interest-bearing liabilities as
of December 31, 2006, the interest rate sensitivity gap (i.e., interest rate sensitive assets divided by interest rate
sensitivity liabilities), the cumulative interest rate sensitivity gap ratio (i.e., interest rate sensitive assets divided by
interest rate sensitive liabilities) and the cumulative sensitivity gap ratio. The table also sets forth the time periods in
which earning assets and liabilities will mature or may reprice in accordance with their contractual terms. However,
the table does not necessarily indicate the impact of general interest rate movements on the net interest margin since
the repricing of various categories of assets and liabilities is subject to competitive pressures and the needs of our
customers. In addition, various assets and liabilities indicated as repricing within the same period may in fact
reprice at different times within such period and at different rates.
37
At December 31, 2006
Maturing or Repricing Within
Zero to
Three
Months
Three
Months to
One Year
One to
Five
Years
(Dollars in Thousands)
Over
Five
Years
Total
Earning assets:
Short-term assets
Investment securities
Loans
Interest-bearing liabilities:
Interest-bearing demand deposits
Savings
Time deposits
Other borrowings
FHLB advances
Trust preferred securities
$
$
135,232
4,026
865,824
1,005,082
545,564
63,255
194,516
21,024
65,000
42,269
931,628
$
-
12,560
148,621
161,181
-
-
581,376
-
-
-
581,376
Interest rate sensitivity gap
Cumulative interest rate sensitivity gap
Interest rate sensitivity gap ratio
Cumulative interest rate sensitivity gap ratio
$
$
73,454
73,454
$
$
(420,195)
(346,741)
$
$
1.08
1.08
0.27
0.77
INVESTMENT PORTFOLIO
-
217,428
382,892
600,320
-
-
103,860
-
5,500
-
109,360
490,960
144,219
5.49
1.09
$
-
49,178
45,614
94,792
$
135,232
283,192
1,442,951
1,861,375
-
-
-
-
-
-
-
545,564
63,255
879,752
21,024
70,500
42,269
1,622,364
94,792
$
239,011
239,011
N/A
1.12
$
$
We manage the mix of asset and liability maturities in an effort to control the effects of changes in the general level
of interest rates on net interest income. Except for its effect on the general level of interest rates, inflation does not
have a material impact on the portfolio due to the rate variability and short-term maturities of its earning assets. In
particular, approximately 70.3% of the loan portfolio is comprised of loans which mature or reprice within one year
or less. Mortgage loans, primarily with five to fifteen year maturities, are also made on a variable rate basis with
rates being adjusted every one to five years. Additionally, 3.8% of the investment portfolio matures or reprices
within one year or less.
Following is a summary of the carrying value of investments, including restricted equity securities, as of the end of
each reported period:
U. S. Government and agency securities
State and municipal securities
Corporate debt securities
Mortgage-backed securities
Marketable equity securities
Restricted equity securities
2006
December 31,
2005
(Dollars in Thousands)
2004
$
$
101,863
18,934
9,829
151,818
748
7,015
290,207
$
$
92,461
7,968
7,113
126,870
733
8,597
243,742
$
$
78,227
4,212
18,131
112,640
738
7,793
221,741
38
The amounts of securities available for sale in each category as of December 31, 2006 are shown in the following
table according to contractual maturity classifications: (1) one year or less, (2) after one year through five years, (3)
after five years through ten years and (4) after ten years.
U. S. Treasury
and Other U. S.
Government Agencies
and Corporations
Amount
State and
Political Subdivisions
Yield
(1) (2)
Yield
(1)
Amount
(Dollars in Thousands)
Maturity:
One year or less
After one year through five years
After five years through ten years
After ten years
$
$
9,754
171,948
70,344
12,213
264,259
4.51 %
4.45
5.95
4.70
4.86 %
$
$
912
4,401
13,111
510
18,934
4.31 %
5.30
5.46
5.51
5.37 %
(1)
(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 acquisition price of each security in that range.
Yields on securities of state and political subdivisions are stated on a taxable-equivalent basis, using a tax
rate of 35%.
DEPOSITS
Average amount of deposits and average rate paid thereon, classified as to noninterest-bearing demand deposits,
interest-bearing demand and savings deposits and time deposits, for the periods indicated are presented below.
Year Ended December 31,
2006
2005
Amount
Rate
Amount
(Dollars in Thousands)
Noninterest-bearing demand deposits
Interest-bearing demand and savings deposits
Time deposits
Total deposits
$
194,150
521,783
773,089
$ 1,489,022
- % $
2.18
4.42
154,326
393,594
498,036
$ 1,045,956
Rate
- %
1.02
3.02
We have a large, stable base of time deposits with little or no dependence on volatile deposits of $100,000 or more.
The time deposits are principally certificates of deposit and individual retirement accounts obtained for individual
customers.
39
The amounts of time certificates of deposit issued in amounts of $100,000 or more as of December 31, 2006, are
shown below by category, which is based on time remaining until maturity of (1) three months or less, (2) over three
through twelve months and (3) over twelve months.
Three months or less
Over three through twelve months
Over twelve months
Total
(Dollars in
Thousands)
$
$
110,316
329,402
62,182
501,900
OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
In the ordinary course of business, our Bank has granted commitments to extend credit to approved customers.
Generally, these commitments to extend credit have been granted on a temporary basis for seasonal or inventory
requirements and have been approved by the Bank’s local boards. Our Bank has also granted commitments to
approved customers for standby letters of credit. These commitments are recorded in the financial statements when
funds are disbursed or the financial instruments become payable. The Bank uses the same credit policies for these
off-balance sheet commitments as it does for financial instruments that are recorded in the consolidated financial
statements. Commitments generally have fixed expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitment amounts expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.
Following is a summary of the commitments outstanding at December 31, 2006 and 2005.
Commitments to extend credit
Financial standby letters of credit
December 31,
2006
2005
(Dollars in Thousands)
$
$
197,435
6,139
203,574
$
$
184,265
5,741
190,006
The following table summarizes short-term borrowings for the periods indicated:
2006
Average
Balance
Average
Rate
Years Ended December 31,
2005
(Dollars in Thousands)
Average
Average
Rate
Balance
2004
Average
Balance
Average
Rate
Federal funds purchased and securities sold
under agreement to repurchase
$
6,910
2.68%
$
6,521
1.58%
$
5,235
1.28 %
Total maximum short-term borrowings
outstanding at any month-end during the year $
16,024
$
15,545
$
14,205
Total
Balance
Total
Balance
Total
Balance
40
The following table sets forth certain information about contractual cash obligations as of December 31, 2006.
Short-term borrowings
Time certificates of deposit
Long-term debt
Federal Home Loan Bank advances
Subordinated debentures
Total
Payments Due After December 31, 2006
1 Year
Or Less
1 -3
Years
(Dollars in Thousands)
4 -5
Years
After 5
Years
$
15,933
$
15,933
$
-
$
-
$
879,752
774,142
5,000
70,500
42,269
5,000
-
-
90,892
-
70,500
-
14,718
-
-
-
-
-
-
-
42,269
Total contractual cash obligations
$ 1,013,454
$ 795,075
$ 161,392
$
14,718
$
42,269
Our operating leases represent short-term obligations, normally with maturities of one year or less. Many of the
operating leases have thirty-day cancellation provisions. The total contractual obligations for operating leases do
not require a material amount of our cash funds.
At December 31, 2006 we had immaterial amounts of binding commitments for capital expenditures.
CAPITAL ADEQUACY
The capital resources of our Company are monitored on a periodic basis by state and federal regulatory authorities.
During 2006, we increased our capital by retaining net earnings of $14.8 million after payment of dividends. In
addition, we issued approximately $13.9 million of common stock in conjunction with the acquisition of Islands.
Other capital related transactions, such as the issuance and exercise of stock options and restricted stock, changes in
unrealized losses on investment securities and repurchase of treasury shares combined to account for only a small
change in the capital of the Company.
In accordance with risk capital guidelines issued by the Federal Reserve, we are required to maintain a minimum
standard of total capital to risk-weighted assets of 8%. Additionally, all member banks must maintain “core” or
“Tier 1” capital of at least 4% of total assets (“leverage ratio”). Member banks operating at or near the 4% capital
level are expected to have well-diversified risks, including no undue interest rate risk exposure, excellent control
systems, good earnings, high asset quality and well managed on- and off-balance sheet activities, and, in general, be
considered strong banking organizations with a composite 1 rating under the CAMEL rating system of banks. For
all but the most highly rated banks meeting the above conditions, the minimum leverage ratio is to be 4% plus an
additional 1% to 2%.
The following table summarizes the regulatory capital levels of Ameris at December 31, 2006.
Leverage capital
Risk-based capital:
Core capital
Total capital
Actual
Required
Excess
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in Thousands)
$ 161,797
8.58 % $ 75,452
4.00 % $ 86,345
4.58 %
161,797
180,676
10.67
11.92
60,653
121,305
4.00
8.00
101,144
59,371
6.67
3.92
41
INFLATION
The consolidated financial statements and related consolidated financial data presented herein have been prepared in
accordance with generally accepted accounting principles and practices within the banking industry which require
the measurement of financial position and operating results in terms of historical dollars without considering the
changes in the relative purchasing power of money over time due to inflation. Unlike most industrial companies,
virtually all the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have
a more significant impact on a financial institution’s performance than the effects of general levels of inflation.
QUARTERLY FINANCIAL INFORMATION (Unaudited)
The following table sets forth certain consolidated quarterly financial information of the Company. This
information is derived from unaudited consolidated financial statements, which include, in the opinion of
management, all normal recurring adjustments which management considers necessary for a fair presentation of the
results for such periods.
Selected Income Statement Data:
Interest income
Net interest income
Net income
Per Share Data:
Net income – basic
Net income – diluted
Dividends
Selected Income Statement Data:
Interest income
Net interest income
Net income
Per Share Data:
Net income – basic
Net income – diluted
Dividends
Quarters Ended December 31, 2006
4
3
2
1
(Dollars in Thousands, Except Per Share Data)
$ 34,524 $ 32,624 $ 29,822 $ 27,141
17,999
17,897
17,673
16,392
5,759
5,954
5,315
5,100
0.44
0.43
0.14
0.46
0.45
0.14
0.41
0.40
0.14
0.39
0.39
0.14
Quarters Ended December 31, 2005
4
3
2
1
(Dollars in Thousands, Except Per Share Data)
$ 22,892 $ 20,494 $ 18,595 $ 17,558
14,601
13,312
12,569
12,123
2,723
3,905
3,500
3,600
0.22
0.22
0.14
0.33
0.33
0.14
0.29
0.29
0.14
0.31
0.30
0.14
42
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed only to U. S. Dollar interest rate changes and, accordingly, we manage exposure by considering the
possible changes in the net interest margin. We do not have any trading instruments nor do we classify any portion
of the investment portfolio as held for trading. We do not engage in any hedging activities or enter into any
derivative instruments with a higher degree of risk than mortgage-backed securities, which are commonly, pass-
through securities. Finally, we have no exposure to foreign currency exchange rate risk, commodity price risk and
other market risks.
Interest rates play a major part in the net interest income of a financial institution. The sensitivity to rate changes is
known as “interest rate risk.” The repricing of interest earning assets and interest-bearing liabilities can influence
the changes in net interest income. As part of our asset/liability management program, the timing of repriced assets
and liabilities is referred to as gap management. Our policy is to maintain a gap ratio in the one-year time horizon of
.80 to 1.20. As indicated by the gap analysis included in this Annual Report, we are somewhat asset sensitive in
relation to changes in market interest rates. Being asset sensitive would result in net interest income increasing in a
rising rate environment and decreasing in a declining rate environment.
We use simulation analysis to monitor changes in net interest income due to changes in market interest rates. The
simulation of rising, declining and flat interest rate scenarios allow management to monitor and adjust interest rate
sensitivity to minimize the impact of market interest rate swings. The analysis of the impact on net interest income
over a twelve-month period is subjected to a gradual 200 basis points increase or 200 basis points decrease in market
rates on net interest income and is monitored on a quarterly basis. Our most recent simulation model projects net
interest income would increase 2.2% if rates rise 200 basis points gradually over the next year. On the other hand,
the model projects net interest income to decrease 5.8% if rates decline 200 basis points over the next year.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Balance Sheets - December 31, 2006 and 2005
Consolidated Statements of Income - Years ended December 31, 2006, 2005 and 2004
Consolidated Statements of Comprehensive Income - Years ended December 31, 2006, 2005 and 2004
Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2006, 2005 and 2004
Consolidated Statements of Cash Flows - Years ended December 31, 2006, 2005 and 2004
Notes to Consolidated Financial Statements.
43
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
During 2006 and 2005, Ameris did not change its accountants and there was no disagreement on any matter of
accounting principles or practices for financial statement disclosure.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Annual
Report, as required by paragraph (b) of Rules 13a-15 or 15d-15 of the Exchange Act. Based on such evaluation,
such officers have concluded that, as of the end of the period covered by this Annual Report, the Company’s
disclosure controls and procedures are effective.
Management’s Annual Report on Internal Control Over Financial Reporting
The management of Ameris Bancorp is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The
company’s internal control over financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may
deteriorate.
Management assessed the effectiveness of the company’s internal control over financial reporting as of
December 31, 2006. In making this assessment, management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based
on this assessment and those criteria, management believes that the company maintained effective internal control
over financial reporting as of December 31, 2006.
Mauldin & Jenkins, Certified Public Accountants, LLC (“Mauldin & Jenkins”), the Company’s independent
auditors, has issued an attestation report on management’s assessment of the Company’s internal control over
financial reporting. That report is included in this Item under the heading “Report of Independent Registered Public
Accounting Firm.”
Changes in Internal Control Over Financial Reporting
During the quarter ended December 31, 2006, there was not any change in the Company’s internal control over
financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15
of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
44
Report of Independent Registered Public Accounting Firm
To the Board of Directors
Ameris Bancorp
Moultrie, Georgia
We have audited management’s assessment, included in the accompanying “Management’s Annual Report on Internal
Control over Financial Reporting”, that Ameris Bancorp and its subsidiaries maintained effective internal control over
financial reporting as of December 31, 2006, based on criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) in Internal Control-Integrated Framework. Ameris Bancorp’s management is
responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness
of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and
an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating
the design and operating effectiveness of internal control and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of
management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
In our opinion, management’s assessment that Ameris Bancorp and its subsidiaries maintained effective internal control
over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on criteria established in
Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Also, in our opinion, Ameris Bancorp and its subsidiaries maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal
Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the financial position of Ameris Bancorp and its subsidiaries as of December 31, 2006 and 2005, and the results
of their operations and their cash flows for each of the three years in the period ended December 31, 2006, and our report
dated February 26, 2007 expressed an unqualified opinion.
/s/ Mauldin & Jenkins, LLC
Albany, Georgia
February 26, 2007
45
ITEM 9B. OTHER INFORMATION
None.
46
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Nominees for Director
Information with respect to the Company’s directors and nominees for director is set forth in the Company’s
Proxy Statement for the Annual Meeting of Shareholders (the “Proxy Statement”) under the caption “Proposal I:
Election of Directors” and is incorporated herein by reference.
Executive Officers
The following table sets forth certain information with respect to the executive officers of Ameris as of
March 10, 2007.
Name, Age and
Term as Officer
Position with Ameris
Principal Occupation for the Last Five Years
and Other Directorships
Edwin W. Hortman, Jr.; 53
Officer since 2002
President and Chief
Executive Officer
Dennis J. Zember, Jr.; 37
Officer since 2005
Executive Vice President
and
Officer
Chief
Financial
Thomas T. Dampier; 56
Officer since 2004
Executive Vice President
and North Regional
Executive
Jon S. Edwards; 45
Officer since 1999
Executive Vice President
and Director of Credit
Administration
C. Johnson Hipp, III; 55
Officer since 2006
Group President for South
Carolina and Mortgage
Business Division
President and Chief Executive Officer since January 1, 2005.
Director since November 2003.
President and Chief
Operating Officer from November 2003 through December
2004. Executive Vice President and Regional Bank Executive
for Northern Division from August 2002 through November
2003. President, Chief Executive Officer and director of
Citizens Security Bank from April 1998 to November 2003.
Director of each subsidiary bank in the Northern Division
from September 2002 through March 2004.
Executive Vice President and Chief Financial Officer of
Ameris since February 14, 2005. Senior Vice President and
Treasurer of Flag Financial Corporation and Senior Vice
President and Chief Financial Officer of Flag Bank from
January 2002 to February 2005. Vice President and Treasurer
of Century South Banks, Inc. from August 1997 to May 2001.
Executive Vice President and North Regional Executive since
April 2004. Director of each subsidiary bank in the Northern
Division from April 2004 until each such bank was merged
into Ameris Bank. President and Chief Executive Officer of
Colony Bank from 1994 to April 2004.
Executive Vice President
and Director of Credit
Administration since May 2005. Executive Vice President
and Regional Bank Executive for Southern Division from
August 2002 through April 2005. Director of Credit
Administration from March 1999 to July 2003. Senior Vice
President from March 1999 to August 2002. Director of each
subsidiary bank in the Southern Division from September
2002 through April 2005.
Officer since June 2006. Chief Executive Officer of South
Carolina Bank and Trust from 1994 to 2004.
Cindi H. Lewis; 53
Officer since 1987
Johnny R. Myers; 57
Officer since 2005
Executive Vice President,
Chief Administrative
Officer and Corporate
Secretary
Chief Administrative Officer since May 2006, Executive Vice
President since May 2002 and Corporate Secretary since May
2000. Director of Human Resources from May 2000 to May
2006 and Senior Vice President from May 2000 to May 2002.
Executive Vice President
and South Regional
Executive
Executive Vice President and South Regional Executive since
May 2005. Director of each subsidiary bank in the Southern
Division from May 2005 until each such bank was merged
into Ameris Bank.
Officers serve at the discretion of the Company’s board of directors.
47
The information set forth in the Proxy Statement under the caption “Section 16(a) Beneficial Ownership
Reporting Compliance” is incorporated herein by reference.
Code of Ethics
Ameris has adopted a code of ethics that is applicable to all employees, including its Chief Executive
Officer and all senior financial officers, including its Chief Financial Officer and principal accounting officer.
Ameris shall provide to any person without charge, upon request, a copy of its code of ethics. Such requests should
be directed to the Corporate Secretary of Ameris Bancorp at 24 2nd Avenue, S.E., Moultrie, Georgia 31768.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under the caption “Executive Compensation” in the Proxy Statement is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The information set forth under the captions “Security Ownership of Certain Beneficial Owners and
Management” and “Equity Compensation Plans” in the Proxy Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information set forth under the captions “Certain Relationships and Related Transactions” and
“Proposal I: Election of Directors” in the Proxy Statement is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following is a summary of the fees billed to Ameris by Mauldin & Jenkins, the Company’s independent
accountants, for professional services rendered for the fiscal years ended December 31, 2006 and 2005:
Fee Category
Audit fees
Audit-related fees
Tax fees
All other fees
Total fees
Fiscal 2006
Fees
Fiscal 2005
Fees
$
$
322,600
55,500
98,650
-
476,750
$
$
275,700
62,500
78,275
-
416,475
Audit Fees
The amounts consist of fees billed for professional services rendered for the audit of the Company’s annual
consolidated financial statements, internal control and review of the interim consolidated financial statements
included in quarterly reports.
Audit-Related Fees
Audit-related fees are fees principally for the audits of the Company’s employee benefit plans,
consultations concerning financial accounting and reporting standards, merger and acquisition assistance and
consent on the acquisition of Islands.
48
Tax Fees
The amounts consist of fees billed for professional services for tax compliance, tax advice and tax planning.
These services include assistance regarding federal, state and local tax compliance and assistance with tax notices.
All Other Fees
Consists of fees for products and services other than the services reported above. There were no fees paid to
Mauldin & Jenkins in fiscal 2006 or 2005 that are not included in the above classifications.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent
Auditors
All services provided by Mauldin & Jenkins are subject to pre-approval by the Audit Committee of the
Company’s board of directors. The Audit Committee may authorize any member of the Audit Committee to
approve services by Mauldin & Jenkins in the event there is a need for such approval prior to the next full Audit
Committee meeting. However, the Audit Committee must review the decisions made by such authorized member of
the Audit Committee at its next schedule meeting. Before granting any approval, the Audit Committee gives due
consideration to whether approval of the proposed service will have a detrimental impact on Mauldin & Jenkins’
independence.
49
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
PART IV
1.
Financial statements:
(a)
Ameris Bancorp and Subsidiaries:
(i)
Consolidated Balance Sheets - December 31, 2006 and 2005;
Consolidated Statements of Income - Years ended December 31,
(ii)
2006, 2005 and 2004;
(iii)
Consolidated Statements of Comprehensive Income - Years ended
December 31, 2006, 2005 and 2004;
(iv)
Consolidated Statements of Stockholders’ Equity - Years ended
December 31, 2006, 2005 and 2004;
(v)
Consolidated Statements of Cash Flows - Years ended December 31, 2006,
2005 and 2004; and
(vi) Notes to Consolidated Financial Statements.
(b)
Ameris Bancorp (parent company only):
Parent company only financial information has been included in Note 21 of
Notes to Consolidated Financial Statements.
2.
Financial statement schedules:
All schedules are omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.
3. A list of the Exhibits required by Item 601 of Regulation S-K to be filed as a part of this
report is shown on the “Exhibit Index” filed herewith.
50
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERIS BANCORP
Date:
March 7, 2007
By:
/s/ Edwin W. Hortman, Jr.
Edwin W. Hortman, Jr., President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Edwin W. Hortman, Jr. as his attorney-in-fact, acting with full power of substitution for him in his
name, place and stead, in any and all capacities, to sign any amendments to this Form 10-K and to file the same,
with exhibits thereto, and any other documents in connection therewith, with the Securities and Exchange
Commission and hereby ratifies and confirms all that said attorney-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue thereof.
Pursuant to the requirements of the Exchange Act, this Form 10-K has been signed by the following persons
in the capacities and on the dates indicated.
Date:
March 7, 2007
/s/ Edwin W. Hortman, Jr.
Edwin W. Hortman, Jr., President, Chief Executive Officer and Director
Date:
March 7, 2007
/s/ Kenneth J. Hunnicutt
Kenneth J. Hunnicutt, Director and Chairman of the Board
Date:
March 7, 2007
/s/ Dennis J. Zember, Jr.
Dennis J. Zember, Jr., Executive Vice President and Chief Financial Officer
Date:
March 7, 2007
Date:
March 7, 2007
/s/ Johnny W. Floyd
Johnny W. Floyd, Director
/s/ J. Raymond Fulp
J. Raymond Fulp, Director
Date:
March 7, 2007
/s/ Daniel B. Jeter
Daniel B. Jeter, Director and Vice Chairman of the Board
Date:
March 7, 2007
Date:
March 7, 2007
Date:
March 7, 2007
Date:
March 7, 2007
Date:
March 7, 2007
/s/ Glenn A. Kirbo
Glenn A. Kirbo, Director
/s/ Robert P. Lynch
Robert P. Lynch, Director
/s/ Brooks Sheldon
Brooks Sheldon, Director
/s/ Eugene M. Vereen, Jr.
Eugene M. Vereen, Jr., Director
/s/ Henry C. Wortman
Henry C. Wortman, Director
51
EXHIBIT INDEX
Exhibit No. Description
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
4.1
4.2
4.3
Articles of Incorporation of Ameris Bancorp, as amended (incorporated by
reference to Exhibit 2.1 to Ameris Bancorp’s Regulation A Offering Statement
on Form 1-A filed August 14, 1987).
Amendment to Amended Articles of Incorporation (incorporated by reference
to Exhibit 3.1.1 to Ameris Bancorp’s Form 10-K filed March 28, 1996).
Amendment to Amended Articles of Incorporation (incorporated by reference
to Exhibit 4.3 to Ameris Bancorp’s Registration Statement on Form S-4 filed
with the Commission on July 17, 1996).
Articles of Amendment to the Articles of Incorporation (incorporated by
reference to Exhibit 3.5 to Ameris Bancorp’s Annual Report on Form 10-K
filed with the Commission on March 25, 1998).
Articles of Amendment to the Articles of Incorporation (incorporated by
reference to Exhibit 3.7 to Ameris Bancorp’s Annual Report on Form 10-K
filed with the Commission on March 26, 1999).
Articles of Amendment to the Articles of Incorporation (incorporated by
reference to Exhibit 3.9 to Ameris Bancorp’s Annual Report on Form 10-K
filed with the Commission on March 31, 2003).
Articles of Amendment to the Articles of Incorporation (incorporated by
reference to Exhibit 3.1 to Ameris Bancorp’s Current Report on Form 8-K
filed with the Commission on December 1, 2005).
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to
Ameris Bancorp’s Current Report on Form 8-K filed with the Commission on
March 14, 2005).
Placement Agreement between Ameris Bancorp, Ameris Statutory Trust I,
FTN Financial Capital Markets and Keefe, Bruyette & Woods, Inc. dated
September 13, 2006 (incorporated by reference to Exhibit 4.1 to Ameris
Bancorp’s Registration Statement on Form S-4 (Registration No. 333-138252)
filed with the Commission on October 27, 2006).
Subscription Agreement between Ameris Bancorp, Ameris Statutory Trust I
and First Tennessee Bank National Association dated September 20, 2006
(incorporated by reference to Exhibit 4.2 to Ameris Bancorp’s Registration
Statement on Form S-4 (Registration No. 333-138252) filed with the
Commission on October 27, 2006).
Subscription Agreement between Ameris Bancorp, Ameris Statutory Trust I
and TWE, Ltd. dated September 20, 2006 (incorporated by reference to
Exhibit 4.3 to the Ameris Bancorp’s Registration Statement on Form S-4
(Registration No. 333-138252) filed with the Commission on October 27,
2006).
52
EXHIBIT INDEX
Exhibit No. Description
4.4
4.5
4.6
4.7
10.1
10.2
10.3
10.4
10.5
10.6
Indenture between Ameris Bancorp and Wilmington Trust Company dated
September 20, 2006 (incorporated by reference to Exhibit 4.4 to Ameris
Bancorp’s Registration Statement on Form S-4 (Registration No. 333-138252)
filed with the Commission on October 27, 2006).
Amended and Restated Declaration of Trust between Ameris Bancorp, the
Administrators of Ameris Statutory Trust I signatory thereto and Wilmington
Trust Company dated September 20, 2006 (incorporated by reference to
Exhibit 4.5 to Ameris Bancorp’s Registration Statement on Form S-4
(Registration No. 333-138252) filed with the Commission on October 27,
2006).
Guarantee Agreement between Ameris Bancorp and Wilmington Trust
Company dated September 20, 2006 (incorporated by reference to Exhibit 4.6
to Ameris Bancorp’s Registration Statement on Form S-4 (Registration No.
333-138252) filed with the Commission on October 27, 2006).
Floating Rate Junior Subordinated Deferrable Interest Debenture dated
September 20, 2006 issued to Ameris Statutory Trust I (incorporated by
reference to Exhibit 4.7 to Ameris Bancorp’s Registration Statement on Form
S-4 (Registration No. 333-138252) filed with the Commission on October 27,
2006).
Deferred Compensation Agreement for Kenneth J. Hunnicutt dated December
16, 1986 (incorporated by reference to Exhibit 5.3 to Ameris Bancorp’s
Regulation A Offering Statement on Form 1-A filed with the Commission on
August 14, 1987).
Executive Salary Continuation Agreement dated February 14, 1984
(incorporated by reference to Exhibit 10.6 to Ameris Bancorp’s Annual Report
on Form 10-KSB filed with the Commission on March 27, 1989).
1992 Incentive Stock Option Plan and Option Agreement for Kenneth J.
Hunnicutt (incorporated by reference to Ameris Bancorp’s Annual Report on
Form 10-KSB filed with the Commission on March 30, 1993).
Form of Omnibus Stock Ownership and Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.17 to Ameris Bancorp’s Annual
Report on Form 10-K filed with the Commission on March 25, 1998).
Form of Rights Agreement between Ameris Bancorp and SunTrust Bank dated
as of February 17, 1998 (incorporated by reference to Exhibit 10.18 to Ameris
Bancorp’s Annual Report on Form 10-K filed with the Commission on
March 25, 1998).
ABC Bancorp 2000 Officer/Director Stock Bonus Plan (incorporated by
reference to Exhibit 10.19 to Ameris Bancorp’s Annual Report on Form 10-K
filed with the Commission on Mach 29, 2000).
53
EXHIBIT INDEX
Exhibit No.
Description
10.7
10.8
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
Commission Agreement by and between Ameris Bancorp and Jerry L. Keen
dated as of September 12, 2002 (incorporated by reference to Exhibit 10.1 to
Ameris Bancorp’s Quarterly Report on Form 10-Q filed with the Commission
on November 14, 2002).
Joint Marketing Agreement by and between Ameris Bancorp and MBNA
America Bank, N.A. dated as of December 19, 2002 (incorporated by
reference to Exhibit 10.18 to Ameris Bancorp’s Annual Report on Form 10-K
filed with the Commission on March 31, 2003).
Executive Employment Agreement with Jon S. Edwards dated as of July 1,
2003 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp’s
Quarterly Report on Form 10-Q filed with the Commission on November 12,
2003).
Executive Employment Agreement with Edwin W. Hortman, Jr. dated as of
December 31, 2003 (incorporated by reference to Exhibit 10.19 to Ameris
Bancorp’s Annual Report on Form 10-K filed with the Commission on March
15, 2004).
Executive Employment Agreement with Cindi H. Lewis dated as of December
31, 2003 (incorporated by reference to Exhibit 10.20 to Ameris Bancorp’s
Annual Report on Form 10-K filed with the Commission on March 15, 2004).
Executive Employment Agreement with Thomas T. Dampier dated as of May
18, 2004 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp’s
Quarterly Report on Form 10-Q filed with the Commission on August 9,
2004).
Executive Consulting Agreement with Kenneth J. Hunnicutt dated as of
January 1, 2005 (incorporated by reference to Exhibit 10.16 to Ameris
Bancorp’s Annual Report on Form 10-K filed with the Commission on March
16, 2005).
Amendment No. 1 to Executive Employment Agreement with Edwin W.
Hortman, Jr. dated as of March 10, 2005 (incorporated by reference to Exhibit
10.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the
Commission on March 14, 2005).
Form of 2005 Omnibus Stock Ownership and Long-Term Incentive Plan
(incorporated by reference to Appendix A to Ameris Bancorp’s Definitive
Proxy Statement filed with the Commission on April 18, 2005).
Executive Employment Agreement with Dennis J. Zember, Jr. dated as of May
5, 2005 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp’s
Current Report on Form 8-K/A filed with the Commission on May 11, 2005).
54
EXHIBIT INDEX
Exhibit No. Description
10.17
10.18
10.19
10.20
10.21
10.23
10.24
21.1
23.1
24.1
31.1
31.2
32.1
32.2
Executive Employment Agreement with Johnny R. Myers dated as of May 11,
2005 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp’s Current
Report on Form 8-K filed with the Commission on May 16, 2005).
Revolving Credit Agreement with SunTrust Bank dated as of December 14,
2005 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp’s Current
Report on Form 8-K filed with the Commission on December 20, 2005).
Security Agreement with SunTrust Bank dated as of December 14, 2005
(incorporated by reference to Exhibit 10.2 to Ameris Bancorp’s Current Report
on Form 8-K filed with the Commission on December 20, 2005).
Form of Incentive Stock Option Agreement (incorporated by reference to
Exhibit 4.2 to Ameris Bancorp’s Registration Statement on Form S-8 filed
with the Commission on January 24, 2006).
Form of Non-Qualified Stock Option Agreement (incorporated by reference to
Exhibit 4.3 to Ameris Bancorp’s Registration Statement on Form S-8 filed
with the Commission on January 24, 2006).
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 4.4
to Ameris Bancorp’s Registration Statement on Form S-8 filed with the
Commission on January 24, 2006).
Executive Employment Agreement with C. Johnson Hipp, III dated as of
September 5, 2006 (incorporated by reference to Exhibit 10.1 to Ameris
Bancorp’s Current Report on Form 8-K filed with the Commission on
September 8, 2006).
Schedule of subsidiaries of Ameris Bancorp.
Consent of Mauldin & Jenkins, LLC.
Power of Attorney relating to this Form 10-K is set forth on the signature
pages of this Form 10-K.
Rule 13a-14(a)/15d-14(a) Certification by Ameris Bancorp’s Chief Executive
Officer.
Rule 13a-14(a)/15d-14(a) Certification by Ameris Bancorp’s Chief Financial
Officer.
Section 1350 Certification by Ameris Bancorp’s Chief Executive Officer.
Section 1350 Certification by Ameris Bancorp’s Chief Financial Officer.
55
Exhibit 31.1
I, Edwin W. Hortman, Jr., certify that:
CERTIFICATION
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2006, of Ameris
Bancorp;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting.
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s
board of directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Dated: March 7, 2007
/s/ Edwin W. Hortman, Jr.
Edwin W. Hortman, Jr., President and Chief Executive Officer
CERTIFICATION
Exhibit 31.2
I, Dennis J. Zember, Jr., certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2006, of Ameris
Bancorp;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting.
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s
board of directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Dated: March 7, 2007
/s/ Dennis J. Zember, Jr.
Dennis J. Zember, Jr., Executive Vice President and
Chief Financial Officer
SECTION 1350 CERTIFICATION
Exhibit 32.1
I, Edwin W. Hortman, Jr., President and Chief Executive Officer of Ameris Bancorp (the “Company”), do hereby
certify, in accordance with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that, to my knowledge:
1.
2.
The Annual Report on Form 10-K of the Company for the year ended December 31, 2006 (the “Periodic
Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as
amended; and
The information contained in the Periodic Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
Dated: March 7, 2007
/s/ Edwin W. Hortman, Jr.
Edwin W. Hortman, Jr., President and Chief Executive Officer
SECTION 1350 CERTIFICATION
Exhibit 32.2
I, Dennis J. Zember, Jr., Executive Vice President and Chief Financial Officer of Ameris Bancorp (the “Company”),
do hereby certify, in accordance with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to my knowledge:
1.
2.
The Annual Report on Form 10-K of the Company for the year ended December 31, 2006 (the “Periodic
Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as
amended; and
The information contained in the Periodic Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
Dated: March 7, 2007
/s/ Dennis J. Zember, Jr.
Dennis J. Zember, Jr., Executive Vice President and
Chief Financial Officer
Following is a list of the Registrant’s subsidiaries and the state of incorporation or other jurisdiction.
REGISTRANT’S SUBSIDIARIES
Exhibit 21.1
Name of Subsidiary
Ameris Bank
Ameris Statutory Trust I
Moultrie Holding Company, Inc.
Moultrie Real Estate Holdings, Inc.
Quitman Holding Company, Inc.
Quitman Real Estate Holdings, Inc.
Thomas Holding Company, Inc.
Thomas Real Estate Holdings, Inc.
Citizens Holding Company, Inc.
Citizens Real Estate Holdings, Inc.
Cairo Holding Company, Inc.
Cairo Real Estate Holdings, Inc.
Southland Real Estate Holdings, Inc.
Cordele Holding Company, Inc.
Cordele Real Estate Holdings, Inc.
First National Holding Company, Inc.
First National Real Estate Holdings, Inc.
M&F Holding Company, Inc.
M&F Real Estate Holdings, Inc.
Tri-County Holding Company, Inc.
Tri-County Real Estate Holdings, Inc.
State of Incorporation or
Other Jurisdiction
State of Georgia
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Alabama
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
State of Delaware
Each subsidiary conducts business under the name listed above.
AMERIS BANCORP
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Consolidated financial statements:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets - December 31, 2006 and 2005
Consolidated Statements of Income - Years ended December 31, 2006, 2005 and 2004
Consolidated Statements of Comprehensive Income - Years ended December 31, 2006, 2005 and 2004
Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2006, 2005 and 2004
Consolidated Statements of Cash Flows - Years ended December 31, 2006, 2005 and 2004
Notes to Consolidated Financial Statements
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Ameris Bancorp
Moultrie, Georgia
We have audited the accompanying consolidated balance sheets of Ameris Bancorp and Subsidiaries as of
December 31, 2006 and 2005, and the related consolidated statements of income, comprehensive income, stockholders' equity
and cash flows for each of the three years in the period ended December 31, 2006. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of Ameris Bancorp and Subsidiaries as of December 31, 2006 and 2005, and the results of their operations
and their cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting
principles generally accepted in the United States of America.
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of Ameris Bancorp and Subsidiaries’ internal control over financial reporting as of
December 31, 2006, based on criteria established in Internal Control - Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 26, 2007, expressed an
unqualified opinion on management’s assessment of the effectiveness of Ameris Bancorp’s internal control over financial
reporting.
Albany, Georgia
February 26, 2007
/s/ Mauldin & Jenkins, LLC
F-2
AMERIS BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
(Dollars in Thousands)
Assets
Cash and due from banks
Interest-bearing deposits in banks
Federal funds sold
Securities available for sale, at fair value
Restricted equity securities, at cost
Loans, net of unearned income
Less allowance for loan losses
Loans, net
Premises and equipment, net
Intangible assets
Goodwill
Other assets
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing
Interest-bearing
Total deposits
Federal funds purchased and securities sold under agreements to repurchase
Other borrowings
Other liabilities
Subordinated deferrable interest debentures
Total liabilities
Commitments and contingencies
Stockholders' equity
Common stock, par value $1; 30,000,000 shares authorized;
14,850,237 and 14,270,783 shares issued
Capital surplus
Retained earnings
Accumulated other comprehensive loss
Unearned compensation
Less cost of 1,322,717 and 1,318,465 shares acquired for the treasury
Total stockholders' equity
See Notes to Consolidated Financial Statements.
F-3
$
2006
2005
66,856 $
125,793
9,439
283,192
7,015
1,442,951
24,863
1,418,088
46,604
6,099
54,365
30,091
74,420
70,854
28,927
235,145
8,597
1,186,601
22,294
1,164,307
39,606
6,412
43,304
25,637
$
2,047,542 $
1,697,209
$
221,592 $
1,488,571
1,710,163
15,933
75,500
24,945
42,269
1,868,810
14,850
81,481
95,523
(2,529)
-
189,325
(10,593)
178,732
200,840
1,174,392
1,375,232
10,307
106,022
16,223
40,722
1,548,506
14,271
67,381
80,683
(2,625)
(526)
159,184
(10,481)
148,703
$
2,047,542 $
1,697,209
AMERIS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Dollars in Thousands)
2006
2005
2004
Interest income
Interest and fees on loans
Interest on taxable securities
Interest on nontaxable securities
Interest on deposits in other banks
Interest on federal funds sold
Interest expense
Interest on deposits
Interest on other borrowings
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Other income
Service charges on deposit accounts
Other service charges, commissions and fees
Mortgage origination fees
Loss on sale of securities
Other
Other expenses
Salaries and employee benefits
Equipment expense
Occupancy expense
Amortization of intangible assets
Data processing fees
Provision for restructuring of operations
Other operating expenses
$
107,559 $
12,147
555
3,589
261
124,111
45,599
8,551
54,150
69,961
2,837
67,124
11,538
997
2,208
(308)
4,827
19,262
27,043
3,530
3,306
1,107
2,136
1,452
14,555
53,129
69,238 $
8,547
163
1,502
89
79,539
19,029
7,905
26,934
52,605
1,651
50,954
10,428
926
1,614
(391)
953
13,530
22,483
2,331
2,600
819
1,899
2,838
10,637
43,607
56,433
7,216
169
542
5
64,365
11,306
8,069
19,375
44,990
1,786
43,204
10,210
737
1,427
-
649
13,023
20,893
2,144
2,626
789
1,680
-
8,373
36,505
Income before income taxes
33,257
20,877
19,722
Applicable income taxes
Net income
Basic earnings per share
Diluted earnings per share
11,129
7,149
6,621
22,128 $
13,728 $
13,101
1.71 $
1.15 $
1.12
1.68 $
1.14 $
1.11
$
$
$
See Notes to Consolidated Financial Statements.
F-4
AMERIS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Dollars in Thousands)
Net income
$
22,128
$
13,728 $
13,101
2006
2005
2004
Other comprehensive income (loss):
Net unrealized holding losses arising during period,
net of tax benefits of $35, $1,366 and $387
Unrealized loss on cash flow hedge during the period,
net of tax of $22
Reclassification adjustment for losses included in net
income, net of tax benefits of $105 and $133
Total other comprehensive loss
(67)
(2,653)
(752 )
(40)
203
96
-
258
(2,395)
-
-
(752)
Comprehensive income
$
22,224
$
11,333 $
12,349
See Notes to Consolidated Financial Statements.
F-5
AMERIS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Dollars in Thousands)
Balance, December 31, 2003
Net income
Cash dividends declared, $.47 per share
Issuance of restricted shares of common stock
under employee incentive plan
Stock-based compensation
Proceeds from exercise of stock options
Reduction in income taxes payable resulting
from vesting of restricted shares
Purchase of shares for treasury
Six-for-five common stock split
Other comprehensive loss
Balance, December 31, 2004
Net income
Cash dividends declared, $.56 per share
Adjustments to record acquisition of purchased
subsidiaries, net of direct costs
Issuance of restricted shares of common stock
under employee incentive plan
Stock-based compensation
Proceeds from exercise of stock options
Payment for fractional shares
Reduction in income taxes payable resulting
from vesting of restricted shares
Purchase of shares for treasury
Other comprehensive loss
Balance, December 31, 2005
Net income
Cash dividends declared, $.56 per share
Adjustments to record acquisition of purchased
subsidiaries, net of direct costs
Issuance of restricted shares of common stock
under employee incentive plan
Transition adjustment for the adoption of SFAS 123(R)
Stock-based compensation
Proceeds from exercise of stock options
Reduction in income taxes payable resulting
from vesting of restricted shares
Purchase of shares for treasury
Other comprehensive income
Common Stock
Shares
Par Value
Capital
Surplus
10,849,922 $
-
-
14,900
-
27,326
-
-
2,178,430
-
13,070,578
-
-
10,850 $
-
-
46,446
-
-
15
-
27
-
-
2,179
-
13,071
-
-
279
-
293
234
-
(2,179)
-
45,073
-
-
1,083,718
1,084
21,103
17,300
-
100,129
(942)
-
-
-
14,270,783
-
-
17
-
100
(1)
-
-
-
14,271
-
-
307
-
845
-
53
-
-
67,381
-
-
494,327
494
13,440
44,150
-
-
40,977
-
-
-
44
-
-
41
(44)
(526)
823
367
-
-
-
14,850 $
40
-
-
81,481
Balance, December 31, 2006
14,850,237 $
See Notes to Consolidated Financial Statements.
F-6 (a)
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Unearned
Compensation
Treasury Stock
Shares
Cost
Total
$
66,145 $
13,101
(5,478)
522 $
-
-
-
-
-
-
-
-
-
73,768
13,728
(6,795)
-
-
-
-
(18)
-
-
-
80,683
22,128
(7,288)
-
-
-
-
-
-
-
-
-
-
-
(752)
(230)
-
-
-
-
-
-
-
-
-
(2,395)
(2,625)
-
-
-
-
-
-
-
-
-
-
95,523 $
$
-
-
96
(2,529) $
(491)
-
-
(294)
262
-
-
-
-
-
(523)
-
-
-
(324)
321
-
-
-
-
-
(526)
-
-
-
-
526
-
-
-
-
-
-
1,066,068
-
-
$
(9,859)
-
-
$
113,613
13,101
(5,478)
-
-
-
-
20,957
217,405
-
1,304,430
-
-
-
-
-
-
-
-
-
-
-
(361)
-
-
(10,220)
-
-
-
-
-
-
-
-
14,035
-
1,318,465
-
-
-
(261)
-
(10,481)
-
-
-
-
-
-
-
-
-
-
-
-
-
4,252
-
1,322,717
-
(112)
-
(10,593)
$
$
F-6 (b)
-
262
320
234
(361)
-
(752)
120,939
13,728
(6,795)
22,187
-
321
945
(19)
53
(261)
(2,395)
148,703
22,128
(7,288)
13,934
-
-
823
408
40
(112)
96
178,732
AMERIS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Dollars in Thousands)
OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash
2006
2005
2004
$
22,128 $ 13,728
$
13,101
provided by operating activities:
Depreciation and amortization
Amortization of intangible assets
Amortization of unearned compensation
Net losses on sale of securities available for sale
Net (gains) losses on sale or disposal of premises and equipment
Provision for loan losses
Provision for deferred taxes
(Increase) decrease in interest receivable
Increase in interest payable
Increase (decrease) in taxes payable
Reduction in income taxes payable resulting from vesting of restricted shares
Net other operating activities
Total adjustments
2,919
1,113
823
308
107
2,837
(249)
(4,051)
3,636
2,423
40
3,540
13,446
2,153
819
321
391
36
1,651
(35)
(2,290)
911
(400)
53
4,361
7,971
1,880
789
262
-
(50)
1,786
243
438
81
(284)
234
2,419
7,798
Net cash provided by operating activities
35,574
21,699
20,899
INVESTING ACTIVITIES
Increase in interest-bearing deposits in banks
Purchases of securities available for sale
Proceeds from maturities of securities available for sale
Proceeds from sale of securities available for sale
(Increase) decrease in restricted equity securities, net
(Increase) decrease in federal funds sold
Increase in loans, net
Purchase of premises and equipment
Proceeds from sale of premises and equipment
Net cash received (paid) for acquisitions and divestitures
Unfunded obligation for acquisition
Net cash used in investing activities
FINANCING ACTIVITIES
Increase in deposits
Increase (decrease) in federal funds purchased and securities
sold under agreements to repurchase
Proceeds from other borrowings and trust preferred debentures
Repayment of other borrowings and trust preferred debentures
Dividends paid
Proceeds from exercise of stock options
Payment for fractional shares
Purchase of treasury shares
Net cash provided by financing activities
Net increase (decrease) in cash and due from banks
Cash and due from banks at beginning of year
Cash and due from banks at end of year
F-7
(54,939)
(98,512)
38,589
14,775
1,813
18,646
(196,335)
(6,363)
19
4,921
(5,120)
(10,888)
(80,495)
49,066
20,451
647
13,413
(116,295)
(2,954)
-
5,125
-
(282,506)
(121,930)
(21,705)
(67,681)
68,130
-
(1,957)
(10,430)
(17,302)
(2,816)
583
(9,416)
-
(62,594)
270,709
147,569
31,056
5,626
102,114
(132,089)
(7,288)
408
-
(112)
2,777
5,000
(15,344)
(6,355)
945
(19)
(261)
(681)
32,000
(19,679)
(5,475)
320
-
(361)
239,368
134,312
37,180
(7,564)
74,420
34,081
40,339
(4,515)
44,854
$
66,856 $ 74,420
$
40,339
AMERIS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Dollars in Thousands)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the year for:
Interest
Income taxes
NONCASH TRANSACTIONS
Principal balances of loans transferred to other
real estate owned
Change in unrealized loss on securities available for sale
Unrealized loss on cash flow hedge
See Notes to Consolidated Financial Statements.
2006
2005
2004
$
$
$
$
$
50,514
9,002
1,237
206
62
$
$
$
$
$
25,821
7,584
1,153
(3,656)
-
$
$
$
$
$
19,184
6,662
2,239
(2,880)
-
F-8
AMERIS BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Ameris Bancorp (the "Company") is a financial holding company whose primary business is presently
conducted by its subsidiary bank (the "Bank"). Through the Bank, the Company operates a full service
banking business and offers a broad range of retail and commercial banking services to its customers
located in a market area which includes Georgia, Alabama, Northern Florida and South Carolina. The
Company and the Bank are subject to the regulations of certain federal and state agencies and are
periodically examined by those regulatory agencies.
In 2005, the Company changed its corporate name from ABC Bancorp to Ameris Bancorp.
Basis of Presentation and Accounting Estimates
The consolidated financial statements include the accounts of the Company and its subsidiaries.
Significant intercompany transactions and balances have been eliminated in consolidation.
In preparing the consolidated financial statements in conformity with accounting principles generally
accepted in the United States of America, management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
Material estimates that are particularly susceptible to significant change in the near-term relate to the
determination of the allowance for loan losses and the valuation of foreclosed assets. The determination
of the adequacy of the allowance for loan losses is based on estimates that are susceptible to significant
changes in the economic environment and market conditions. In connection with the determination of the
estimated losses on loans and the valuation of foreclosed assets, management obtains independent
appraisals for significant collateral or assets.
Cash, Due from Banks and Cash Flows
For purposes of reporting cash flows, cash and due from banks includes cash on hand, cash items in
process of collection and amounts due from banks. Cash flows from federal funds sold, deposits, interest-
bearing deposits in banks, federal funds purchased, restricted equity securities, loans and securities sold
under agreements to repurchase are reported net.
The Bank is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank.
The total of those reserve balances was approximately $9,251,000 and $8,115,000 at December 31, 2006
and 2005, respectively.
Securities
Securities, including equity securities with readily determinable fair values, are classified as available for
sale and recorded at fair value with unrealized gains and losses excluded from earnings and reported in
accumulated other comprehensive income, net of the related deferred tax effect. Equity securities,
including restricted equity securities, without a readily determinable fair value are classified as available
for sale and recorded at cost.
F-9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Securities (Continued)
The amortization of premiums and accretion of discounts are recognized in interest income using methods
approximating the interest method over the 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 settlement date. Declines in
the fair value of securities below their cost that are deemed to be other than temporary are reflected in
earnings as realized losses.
In determining whether other-than-temporary impairment losses exist, management considers (1) the length
of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-
term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the
issuer for a period of time sufficient to allow for any anticipated recovery in fair value.
Loans
Loans are reported at their outstanding principal balances less unearned income, net deferred fees and costs
on originated loans and the allowance for loan losses. Interest income is accrued on the outstanding
principal balance.
The accrual of interest on loans is discontinued when, in management's opinion, the borrower may be
unable to meet payments as they become due, unless the loan is well-secured. Past due status is based on
contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date
if collection of principal or interest is considered doubtful. All interest accrued, but not collected for loans
that are placed on nonaccrual or charged off, is reversed against interest income, unless management
believes that the accrued interest is recoverable through the liquidation of collateral. Interest income on
nonaccrual loans is subsequently recognized only to the extent cash payments are received until the loans
are returned to accrual status. Loans are returned to accrual status when all the principal and interest
amounts contractually due are brought current and future payments are reasonably assured.
A loan is considered impaired when it is probable, based on current information and events, the Company
will be unable to collect all principal and interest payments due in accordance with the contractual terms of
the loan agreement. Factors considered by management in determining impairment include payment status,
collateral value and the probability of collecting scheduled principal and interest payments when due.
Loans that experience insignificant payment delays and payment shortfalls generally are not classified as
impaired. Impaired loans are measured by either the present value of expected future cash flows
discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the
collateral if the loan is collateral dependent. The amount of impairment, if any, and any subsequent
changes are included in the allowance for loan losses. Interest on accruing impaired loans is recognized as
long as such loans do not meet the criteria for nonaccrual status.
F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Allowance for Loan Losses
The allowance for loan losses is established as losses are estimated to have occurred through a provision
for loan losses charged to expense. Loan losses are charged against the allowance when management
believes the collectibility of the principal is unlikely. Subsequent recoveries are credited to the allowance.
The allowance is an amount that management believes will be adequate to absorb estimated losses relating
to specifically identified loans, as well as probable credit losses inherent in the balance of the loan
portfolio. The allowance for loan losses is evaluated on a regular basis by management and is based upon
management's periodic review of the collectibility of loans in light of historical experience, the nature and
volume of the loan portfolio, overall portfolio quality, review of specific problem loans, current economic
conditions that may affect the borrower's ability to pay, estimated value of any underlying collateral and
prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are
susceptible to significant revision as more information becomes available.
This evaluation does not include the effects of expected losses on specific loans or groups of loans that are
related to future events or expected changes in economic conditions. While management uses the best
information available to make its evaluation, future adjustments to the allowance may be necessary if there
are significant changes in economic conditions. In addition, regulatory agencies, as an integral part of their
examination process, periodically review the Banks’ allowance for loan losses and may require the Banks
to make additions to the allowance based on their judgment about information available to them at the time
of their examinations.
The allowance consists of specific, general and unallocated components. The specific component relates to
loans that are classified as either doubtful, substandard or special mention. For such loans that are also
classified as impaired, an allowance is established when the discounted cash flows, collateral value or
observable market price of the impaired loan is lower than the carrying value of that loan. The general
component covers non-classified loans and is based on historical loss experience adjusted for qualitative
factors. An unallocated component is maintained to cover uncertainties that could affect management’s
estimate of probable losses. The unallocated component of the allowance reflects the margin of
imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and
general losses in the portfolio.
Premises and Equipment
Land is carried at cost. Premises and equipment are carried at cost, less accumulated depreciation
computed on the straight-line method over the estimated useful lives of the assets. In general, estimated
lives for buildings are up to 40 years, furniture and equipment useful lives range from 3 to 20 years and the
lives of software and computer related equipment range from 3 to 5 years. Leasehold improvements are
amortized over the life of the related lease, or the related assets, whichever is shorter. Expenditures for
major improvements of the Company’s premises and equipment are capitalized and depreciated over their
estimated useful lives. Minor repairs, maintenance and improvements are charged to operations as
incurred. When assets are sold or disposed of, their cost and related accumulated depreciation are removed
from the accounts and any gain or loss is reflected in earnings.
F-11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Goodwill and Intangible Assets
Goodwill represents the excess of cost over the fair value of the net assets purchased in business
combinations. Goodwill is required to be tested annually for impairment or whenever events occur that
may indicate that the recoverability of the carrying amount is not probable. In the event of an impairment,
the amount by which the carrying amount exceeds the fair value is charged to earnings. The Company
performed its annual test of impairment in the fourth quarter and determined that there was no impairment
in the carrying value of goodwill assigned to its subsidiary bank as of December 31, 2006.
Intangible assets consist of core deposit premiums acquired in connection with business combinations and
are based on the established value of acquired customer deposits. The core deposit premium is initially
recognized based on a valuation performed as of the consummation date and is amortized over the
estimated average remaining life of the acquired customer deposits, or five to ten years. Amortization
periods are reviewed annually in connection with the annual impairment testing of goodwill.
Foreclosed Assets
Foreclosed assets acquired through or in lieu of loan foreclosure are held for sale and are initially recorded
at fair value. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the
allowance for loan losses. Subsequent to foreclosure, valuations are periodically performed by
management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs
of improvements are capitalized, whereas costs relating to holding foreclosed assets and subsequent
adjustments to the value are expensed. The carrying amount of foreclosed assets at December 31, 2006
and 2005 was $1.9 million and $1.1 million, respectively.
Income Taxes
Deferred income tax assets and liabilities are determined using the balance sheet method. Under this
method, the net deferred tax asset or liability is determined based on the tax effects of the temporary
differences between the book and tax bases of the various balance sheet assets and liabilities and gives
current recognition to changes in tax rates and laws.
F-12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock-Based Compensation
On January 1, 2006, Ameris adopted the fair value recognition provisions of FASB Statement No. 123(R),
Share-Based Payment ("SFAS 123(R)"), using the modified prospective-transition method. Under that
transition method, compensation cost recognized beginning in 2006 includes: (a) the compensation cost
for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant
date fair value estimated in accordance with the original provisions of FASB Statement No. 123, and (b)
the compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the
grant-date fair value estimated in accordance with the provisions of SFAS 123(R). Results for prior
periods have not been restated.
Prior to the adoption of Statement 123(R), the Company had elected to continue measuring stock-based
compensation costs using the intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, whereby compensation cost
is the excess, if any, of the quoted market price of the stock at the grant date over the amount an employee
must pay to acquire the stock. Because of this election, no stock-based employee compensation cost is
reflected in net income for years prior to 2006, as all options granted under the plans had an exercise price
equal to the market value of the underlying stock on the date of grant.
As a result of the adoption of SFAS 123 (R), the Company recorded approximately $339,000, or $0.03 per
diluted share, of stock-based compensation cost in 2006. The following table illustrates the effect on net
income and earnings per share as if the Company had applied the fair value recognition provisions of
FASB Statement No. 123 to stock-based employee compensation for the years ended December 31, 2005
and 2004:
Net income, as reported
Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related tax effects
Pro forma net income
Earnings per share:
Basic - as reported
Basic - pro forma
Diluted - as reported
Diluted - pro forma
Years Ended December 31,
2005
2004
$
13,728
$ 13,101
(268)
13,460
(59)
$ 13,042
1.15
1.13
1.14
1.12
$
$
$
$
1.12
1.11
1.11
1.10
$
$
$
$
$
In December 2005, the Company decided to accelerate the vesting of 7,332 options to purchase its
common stock to avoid the income statement impact of adopting FASB Statement 123R in future years.
Treasury Stock
The Company’s repurchases of shares of its common stock are recorded at cost as treasury stock and result
in a reduction of stockholders’ equity. When treasury shares are reissued, the Company uses a first-in,
first-out method and any difference in repurchase cost and reissuance price is recorded as an increase or
reduction in capital surplus.
F-13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings Per Share
Basic earnings per common share are computed by dividing net income by the weighted-average number
of shares of common stock outstanding during the year. Diluted earnings per common share are computed
by dividing net income, by the effect of the issuance of potential common shares that are dilutive, by the
sum of the weighted-average number of shares of common stock outstanding and dilutive potential
common shares. Potential common shares consist of only stock options for the years ended December 31,
2006, 2005 and 2004, and are determined using the treasury stock method.
Presented below is a summary of the components used to calculate basic and diluted earnings per share:
2006
Years Ended December 31,
2005
(Dollars in Thousands)
2004
Net income
$
22,128
$
13,728
$
13,101
Weighted average number of
common shares outstanding
Effect of dilutive options
Weighted average number of common
shares outstanding used to calculate
dilutive earnings per share
12,928
301
11,933
113
11,736
125
13,229
12,046
11,861
At December 31, 2006, 2005 and 2004, there were immaterial amounts of potential common shares that
were not included in the calculation of diluted earnings per share because the exercise of such shares would
be anti-dilutive.
Derivative Instruments and Hedging Activities
The goal of the Company’s interest rate risk management process is to minimize the volatility in the net
interest margin caused by changes in interest rates. Derivative instruments are used to hedge certain assets
or liabilities as a part of this process. The Company is also required to recognize certain contracts and
commitments as derivatives when the characteristics of those contracts and commitments meet the
definition of a derivative. Under the guidelines of SFAS 133, Accounting for Derivative Instruments and
Hedging Activities, as amended, all derivative instruments are required to be carried at fair value on the
balance sheet.
The Company’s hedging strategies involving interest rate swaps are classified as either Fair Value Hedges
or Cash Flow Hedges, depending on the rate characteristics of the hedged item.
Fair Value Hedge: As a result of interest rate fluctuations, fixed-rate assets and liabilities will
appreciate or depreciate in fair value. When effectively hedged, this appreciation or depreciation will
generally be offset by fluctuations in the fair value of the derivative instruments that are linked to the
hedged assets and liabilities. This strategy is referred to as a fair value hedge.
Cash Flow Hedge: Cash flows related to floating-rate assets and liabilities will fluctuate with changes
in an underlying rate index. When effectively hedged, the increases or decreases in cash flows related
to the floating rate asset or liability will generally be offset by changes in cash flows of the derivative
instrument designated as a hedge. This strategy is referred to as a cash flow hedge.
F-14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Derivative Instruments and Hedging Activities (Continued)
The fair value of derivatives is recognized as assets or liabilities in the financial statements. The accounting
for the changes in the fair value of a derivative depends on the intended use of the derivative instrument at
inception. The change in fair value of instruments used as fair value hedges is accounted for in the net
income of the period simultaneous with accounting for the fair value change of the item being hedged. The
change in fair value of the effective portion of cash flow hedges is accounted for in other comprehensive
income rather than net income. The change in fair value of derivative instruments that are not intended as a
hedge is accounted for in the net income of the period of the change.
As of December 31, 2006, the Company had cash flow hedges with a notional amount of $70 million for
the purpose of converting floating rate assets to fixed rate. As of December 31, 2006, the fair value of
these instruments amounted to approximately $435,000 and was recorded as an asset. No hedge
ineffectiveness from cash flow hedges was recognized in the statement of income. All components of each
derivative’s gain or loss are included in the assessment of hedge effectiveness.
Comprehensive Income
Accounting principles generally require that recognized revenue, expenses, gains and losses be included in
net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on
securities available for sale and unrealized gains and losses on effective cash flow hedges, are reported as a
separate component of the equity section of the balance sheet, such items, along with net income, are
components of comprehensive income.
Accounting Standards
New Accounting Pronouncements. In July 2006, the Financial Accounting Standards Board (“FASB”)
issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes - an
Interpretation of FASB Statement No. 109.” FIN 48 prescribes a comprehensive model for how a
company should recognize, measure, present and disclose in its financial statements uncertain tax positions
that it has taken or expects to take on a tax return. FIN 48 is effective beginning in the first quarter of
fiscal year 2007. Management does not expect that the provisions of FIN 48 will materially impact the
Company’s results of operations or financial condition.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This statement defines
fair value, establishes a framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. This statement will be effective for financial
statements issued by Ameris Bancorp for the year ended December 31, 2008. Management is currently
evaluating the impact of SFAS No. 157 on the Company’s consolidated financial statements.
Prior to January 1, 2006, the Company accounted for the share-based compensation to employees under the
intrinsic value method in Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock
Issued to Employees.” At January 1, 2006, the Company began recognizing compensation expense for
stock options with the adoption of SFAS No. 123 (Revised), “Share-Based Payment,” as described in
Note 15.
F-15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2.
CORPORATE RESTRUCTURE
During 2005, the Company initiated a corporate restructuring plan to create a single brand name for the
Company and each of its thirteen bank subsidiaries. In addition to the single brand name, the Company
announced its intentions to consolidate its bank subsidiaries into a single bank subsidiary. To effect this
corporate restructuring, management identified several costs that would be incurred. These restructuring
costs include $838,000 for the branding initiative and $2,000,000 to standardize and streamline the data
processing functions of each subsidiary. The branding initiative and consolidation of the Bank subsidiaries
was substantially completed during 2006.
NOTE 3.
BUSINESS COMBINATIONS AND DIVESTITURES
On December 29, 2006, Ameris acquired 100 percent of the outstanding common shares of Islands Bancorp
and its banking subsidiary, Islands Community Bank, NA (collectively, “Islands”). Islands was
headquartered in Beaufort, South Carolina where it operated a single branch with satellite loan production
offices in Bluffton, South Carolina and Charleston, South Carolina. The consideration for the acquisition was
a combination of cash and common stock with an aggregate purchase price of approximately $19,055,000.
The total consideration consisted of $5,121,000 in cash, and approximately 494,000 shares of Ameris
Bancorp common stock with a value of approximately $13,934,000. The value of the shares of common
stock issued of $28.18 was based on the average closing price of Ameris common stock for the 10 trading
days immediately preceding the merger. Islands results of operations for 2006 are not included in Ameris’
consolidated financial results as the merger date occurred after close of business on the last day of the fiscal
year.
On December 16, 2005, Ameris acquired all the issued and outstanding common shares of First National
Banc, Inc., the parent company of First National Bank, in St. Marys, Georgia and First National Bank, in
Orange Park, Florida (collectively “FNB”). The acquisition was accounted for using the purchase method of
accounting and accordingly, the results from FNB’s operations have been included in the consolidated
financial statements beginning December 17, 2005. The aggregate purchase price for FNB was $35,333,000,
including cash of $13,085,000 and the Company’s common stock valued at $22,248,000. The value of the
1,083,718 common shares was determined based on the closing price of the Company’s common stock on
December 14, 2005, the first date on which the number of shares became fixed.
F-16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3.
BUSINESS COMBINATIONS AND DIVESTITURES (Continued)
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed on the
acquisition dates (in thousands):
(In Thousands)
Cash and due from banks
Interest-bearing deposits and federal funds sold
Investments
Loans, net
Premises and equipment
Core deposits intangible asset
Goodwill
Other assets
Total assets acquired
Deposits
Other borrowings
Subordinated deferrable interest debentures
Other liabilities
Total liabilities assumed
Islands
as of
December 29,
2006
FNB
as of
December 16,
2005
$
$
1,100
9,439
3,249
62,331
4,597
800
10,312
580
92,408
71,510
1,000
-
843
73,353
18,210
32,690
15,688
189,235
11,069
3,525
18,251
3,456
292,124
241,439
6,000
5,155
4,197
256,791
Net assets acquired
$
19,055
$
35,333
Unaudited proforma consolidated results of operations for the years ended December 31, 2006 and 2005 as
though Islands and FNB had been acquired as of January 1, 2005 follows:
Net interest income
Net income
Basic earnings per share
Diluted earnings per share
(Dollars in Thousands)
2005
2006
$
$
$
$
73,101
21,939
1.63
1.60
$
$
$
$
64,723
9,807
0.72
0.72
During 2006, Ameris negotiated contracts for the sale of three stand-alone bank charters to other banks. The
Company recognized gains of approximately $3.1 million, $1.9 million after tax, as a result of these sales.
Total assets, loans and deposits were reduced by approximately $11.3 million, $1.0 million and $7.3 million,
respectively, as a result of these sales.
F-17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4.
SECURITIES
The amortized cost and fair value of securities available for sale with gross unrealized gains and losses are
summarized as follows:
Gross
Amortized Unrealized Unrealized
Gains
Gross
Cost
Losses
(Dollars in Thousands)
Fair
Value
December 31, 2006:
U. S. Government sponsored agencies
State and municipal securities
Corporate debt securities
Mortgage-backed securities
Total debt securities
Equity securities
Total securities
December 31, 2005:
U. S. Government sponsored agencies
State and municipal securities
Corporate debt securities
Mortgage-backed securities
Total debt securities
Equity securities
Total securities
$
$
$
$
103,207 $
19,364
9,852
153,768
286,191
788
286,979 $
94,110 $
7,952
7,122
129,149
238,333
788
239,121 $
31 $
42
40
194
307
-
307 $
- $
29
59
58
146
-
146 $
(472)
(63)
(2,144)
(4,054)
(40)
(1,375) $ 101,863
18,934
9,829
151,818
282,444
748
(4,094) $ 283,192
(1,649) $
(13)
(68)
(2,337)
(4,067)
(55)
92,461
7,968
7,113
126,870
234,412
733
(4,122) $ 235,145
The amortized cost and fair value of debt securities available for sale as of December 31, 2006 by contractual
maturity are shown below. Maturities may differ from contractual maturities in mortgage-backed securities
because the mortgages underlying the securities may be called or repaid without penalty. Therefore, these
securities are not included in the maturity categories in the following maturity summary.
Due in one year or less
Due from one year to five years
Due from five to ten years
Due after ten years
Mortgage-backed securities
Amortized
Fair
Cost
Value
(Dollars in Thousands)
$
$
7,135
104,178
20,595
515
153,768
286,191
$
$
7,073
102,816
20,227
510
151,818
282,444
Securities with a carrying value of approximately $192,951,000 and $176,128,000 at December 31, 2006 and
2005, respectively, were pledged to secure public deposits and for other purposes required or permitted by
law.
F-18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4.
SECURITIES (Continued)
Gains and losses on sales of securities available for sale consist of the following:
2006
December 31,
2005
(Dollars in Thousands)
2004
Gross gains on sales of securities
Gross losses on sales of securities
Net realized gains (losses) on sales of securities available for sale
$
$
- $
61 $
(308)
(308) $
(452)
(391) $
-
-
-
The following table shows the gross unrealized losses and fair value of securities aggregated by category and
length of time that securities have been in a continuous unrealized loss position at December 31, 2006 and
2005.
Description of Securities
December 31, 2006:
Less Than 12 Months
Fair
Value
Unrealized
Losses
12 Months or More
Fair
Value
Unrealized
Losses
Total
Fair
Value
Unrealized
Losses
(Dollars in Thousands)
U. S. Government sponsored agencies $ 18,869 $
(75) $ 72,520 $
(1,300) $ 91,389 $
(1,375)
State and municipal securities
9,658
Corporate debt securities
Mortgage-backed securities
Subtotal, debt securities
Equity securities
-
69,148
97,675
-
(300)
-
4,884
1,935
(172)
(63)
14,542
1,935
(359)
69,642
(1,785)
138,791
(734)
148,981
(3,320)
246,657
-
567
(40)
567
(472)
(63)
(2,144)
(4,054)
(40)
Total temporarily impaired securities $ 97,675 $
(734) $ 149,548 $
(3,360) $ 247,224 $
(4,094)
December 31, 2005:
U. S. Government sponsored agencies
$ 41,332 $
(446) $ 55,093 $
(1,203) $
96,425 $
(1,649)
State and municipal securities
Corporate debt securities
Mortgage-backed securities
Subtotal, debt securities
Equity securities
-
971
40,688
82,991
-
(20)
808
3,543
(13)
(48)
808
4,514
(100)
79,105
(2,237)
119,793
(566)
138,549
(3,501)
221,540
-
-
213
(55)
213
(13)
(68)
(2,337)
(4,067)
(55)
Total temporarily impaired securities
$ 82,991 $
(566) $ 138,762 $
(3,556) $ 221,753 $
(4,122)
Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more
frequently when economic or market concerns warrant such evaluation. Substantially all of the unrealized
losses on debt securities are related to changes in interest rates and do not affect the expected cash flows of
the issuer or underlying collateral. All unrealized losses are considered temporary because each security
carries an acceptable investment grade and the Company has the intent and ability to hold to maturity.
F-19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5.
LOANS AND ALLOWANCE FOR LOAN LOSSES
The composition of loans is summarized as follows:
Commercial and financial
Agricultural
Real estate - construction
Real estate - mortgage, farmland
Real estate - mortgage, commercial
Real estate - mortgage, residential
Consumer installment loans
Other
Allowance for loan losses
The following is a summary of information pertaining to impaired loans:
December 31,
2006
2005
(Dollars in Thousands)
$
174,852
33,980
340,325
91,650
397,837
339,843
59,422
5,042
1,442,951
24,863
$ 1,418,088
$
$
152,715
30,437
224,230
74,023
321,443
317,593
62,508
3,652
1,186,601
22,294
1,164,307
As of and For the Years Ended
December 31,
2005
2004
2006
Impaired loans without a valuation allowance
Impaired loans with a valuation allowance
Total impaired loans
Valuation allowance related to impaired loans
Average investment in impaired loans
Interest income recognized on impaired loans
Forgone interest income on impaired loans
$
$
$
$
$
$
- $
- $
6,834
9,586
6,834 $
9,586 $
1,034 $
8,181 $
15 $
404 $
1,749 $
5,236 $
26 $
527 $
-
5,640
5,640
1,001
6,229
2
557
Loans on nonaccrual status amounted to approximately $6.8 million, $9.6 million and $5.6 million at
December 31, 2006, 2005 and 2004, respectively. There were no material amounts of loans past due ninety
days or more and still accruing interest at December 31, 2006, 2005 or 2004.
F-20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5.
LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)
Changes in the allowance for loan losses for the years ended December 31, 2006, 2005 and 2004 are as
follows:
2006
December 31,
2005
(Dollars in Thousands)
2004
Balance, beginning of year
Provision for loan losses
Loans charged off
Recoveries of loans previously charged off
Acquired loan loss reserve
Balance, end of year
$
$
22,294 $
2,837
(3,198)
1,906
1,024
24,863 $
15,493 $
1,651
(2,155)
1,777
5,528
22,294 $
14,963
1,786
(3,576)
1,665
655
15,493
In the ordinary course of business, the Company has granted loans to certain directors and their affiliates.
The interest rates on these loans were substantially the same as rates prevailing at the time of the transaction
and repayment terms are customary for the type of loan. Company policy provides for no loans to executive
officers. Changes in related party loans are summarized as follows:
Balance, beginning of year
Advances
Repayments
Transactions due to changes in related parties
Balance, end of year
December 31,
2006
2005
(Dollars in Thousands)
$
40,349 $
6,986
(4,939)
(36,484)
$
5,912 $
38,313
62,392
(66,254)
5,898
40,349
F-21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6.
PREMISES AND EQUIPMENT
Premises and equipment are summarized as follows:
Land
Buildings
Furniture and equipment
Construction in progress; estimated cost to complete, $3,300,000
Accumulated depreciation
Leases
December 31,
2006
2005
(Dollars in Thousands)
$ 12,054
37,344
21,496
3,208
74,102
(27,498)
$ 46,604
$
$
13,070
31,088
19,991
1,225
65,374
(25,768)
39,606
The Company has a noncancelable operating lease on its operations center with its Chairman of the Board.
The lease has an initial term of five years with one five year renewal option.
The Company also has various operating leases with unrelated parties on three branches. Generally, these
leases are on smaller locations with initial lease terms under ten years and up to two renewal options.
Rental expense amounted to approximately $147,000, $140,000 and $145,000 for the years ended
December 31, 2006, 2005 and 2004, respectively. Future minimum lease commitments under the Company’s
operating leases, excluding any renewal options, are summarized as follows:
2007
2008
2009
2010
Thereafter
$
$
195,110
137,027
83,527
67,527
39,391
522,582
F-22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7.
INTANGIBLE ASSETS
Following is a summary of information related to acquired intangible assets:
As of December 31, 2006
Accumulated
Gross
Amortization
Amount
As of December 31, 2005
Gross
Amount
(Dollars in Thousands)
Accumulated
Amortization
Amortized intangible assets
Core deposit premiums
$
14,430 $
8,331 $
13,630 $
7,218
The aggregate amortization expense for intangible assets was $1,113,000, $819,000 and $789,000 for the
years ended December 31, 2006, 2005 and 2004, respectively.
The estimated amortization expense for each of the next five years is as follows:
2007
2008
2009
2010
2011
Changes in the carrying amount of goodwill are as follows:
Beginning balance
Adjustment of previously acquired goodwill based
on final allocations
Goodwill acquired through business combinations
Ending balance
$
1,298,000
1,170,000
584,000
547,000
547,000
For the Years Ended December 31,
2006
2005
(Dollars in Thousands)
$
$
43,304
$
24,325
749
10,312
54,365
$
728
18,251
43,304
NOTE 8.
DEPOSITS
The aggregate amount of time deposits in denominations of $100,000 or more at December 31, 2006 and
2005 was $501.9 million and $356.0 million, respectively. The scheduled maturities of time deposits at
December 31, 2006 are as follows:
2006
2007
2008
2009
2010
Later years
F-23
(Dollars in
Thousands)
$
$
774,142
71,494
19,398
9,894
4,824
-
879,752
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8.
DEPOSITS (Continued)
At December 31, 2006 and 2005, overdraft demand deposits reclassified to loans totaled $1.4 million and
$860,000, respectively.
The Company had brokered deposits of $147.9 million and $78.1 million at December 31, 2006 and 2005.
NOTE 9.
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS
Securities sold under repurchase agreements, which are secured borrowings, generally mature within one to
four days from the transaction date. Securities sold under repurchase agreements are reflected at the amount
of cash received in connection with the transactions. The Company may be required to provide additional
collateral based on the fair value of the underlying securities. The Company monitors the fair value of the
underlying securities on a daily basis. Securities sold under repurchase agreements at December 31, 2006 and
2005 were $15.9 million and $10.3 million, respectively.
NOTE 10.
EMPLOYEE BENEFIT PLANS
The Company has established a retirement plan for eligible employees. The Ameris Bancorp 401(k) Profit
Sharing Plan allows a participant to defer a portion of his compensation and provides that the Company will
match a portion of the deferred compensation. The plan also provides for nonelective and discretionary
contributions. All full-time and part-time employees are eligible to participate in the 401(k) Profit Sharing
Plan provided they have met the eligibility requirements. Generally, a participant must have completed
twelve months of employment with a minimum of 1,000 hours and have attained an age of 21.
Aggregate expense under the plan charged to operations during 2006, 2005 and 2004 amounted to $1.4
million, $1.2 million and $1.1 million, respectively.
NOTE 11. DEFERRED COMPENSATION PLANS
The Company and the Bank have entered into separate deferred compensation arrangements with certain
executive officers and directors. The plans call for certain amounts payable at retirement, death or disability.
The estimated present value of the deferred compensation is being accrued over the expected service period.
The Company and Banks have purchased life insurance policies which they intend to use to finance this
liability. Cash surrender value of life insurance of $2.2 million and $2.1 million at December 31, 2006 and
2005, respectively, is included in other assets. Accrued deferred compensation of $1,114,000 and $1,285,000
at December 31, 2006 and 2005, respectively, is included in other liabilities. Aggregate compensation
expense under the plans were $112,000, $60,000 and $92,000 for 2006, 2005 and 2004, respectively, and is
included in other operating expenses.
F-24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12. OTHER BORROWINGS
Other borrowings consist of the following:
December 31,
2006
2005
(Dollars in Thousands)
1
2
3
4
5
7
17
Advances under revolving credit agreement with a regional bank with
$
5,000 $
5,000
interest at LIBOR plus 0.95% (6.28% at December 31, 2006)
due in December 2007, secured by subsidiary bank stock.
Advances from the FHLB with interest at LIBOR plus 0.32% (5.65%
65,000
at December 31, 2006) maturing August 2009.
Advances from Federal Home Loan Bank with a fixed interest rate
1,000
-
-
of 3.64%, due September 2008.
Advances from Federal Home Loan Bank with interest at fixed rates
(ranging from 2.96% to 6.12%) convertible to a variable rate at the
option of the lender, due at various dates through May 2010.
Advances from Federal Home Loan Bank with interest at a fixed rate
of 6.72%, payable in annual installments, due November 2006.
4,500
101,000
-
22
$
75,500 $
106,022
The advances from Federal Home Loan Bank are collateralized by the pledging of a blanket lien on all first
mortgage loans and other specific loans, as well as FLHB stock.
Other borrowings at December 31, 2006 have maturities in future years as follows:
2007
2008
2009
2010
2011
Later years
(Dollars in
Thousands)
$
$
5,000
3,500
65,000
2,000
-
-
75,500
The Company and subsidiaries have available unused lines of credit with various financial institutions totaling
approximately $89,425,000 at December 31, 2006.
F-25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13.
INCOME TAXES
The income tax expense in the consolidated statements of income consists of the following:
2006
Years Ended December 31,
2005
(Dollars in Thousands)
2004
Current
Deferred
$ 11,425
(296)
$ 11,129
$
$
7,184
(35)
7,149
$ 6,378
243
$ 6,621
The Company's income tax expense differs from the amounts computed by applying the federal income tax
statutory rates to income before income taxes. A reconciliation of the differences is as follows:
2006
Years Ended December 31,
2005
(Dollars in Thousands)
2004
Tax at federal income tax rate
Increase (decrease) resulting from:
Tax-exempt interest
Amortization of intangible assets
Other
Provision for income taxes
$ 11,640
$
7,098
$
6,705
(318)
-
(193)
$ 11,129
(182)
2
231
$ 7,149
(209)
79
46
6,621
$
Net deferred income tax assets of $5,971,000 and $4,816,000 at December 31, 2006 and 2005, respectively,
are included in other assets. The components of deferred income taxes are as follows:
Deferred tax assets:
Loan loss reserves
Deferred compensation
Debt issue costs
Unearned compensation related to restricted stock
Nonaccrual interest
Net operating loss tax carryforward
Unrealized loss on securities available for sale
Other
Deferred tax liabilities:
Depreciation and amortization
Intangible assets
December 31,
2006
2005
(Dollars in Thousands)
$
$
8,036
390
-
120
248
652
1,287
248
10,981
2,878
2,132
5,010
6,492
417
331
187
118
43
1,352
260
9,200
994
3,390
4,384
Net deferred tax assets
$
5,971
$
4,816
Net deferred tax assets at December 31, 2006 and 2005 includes net deferred tax assets (liabilities) of
$822,000 and $(1,109,000), respectively, acquired in connection with business combinations.
F-26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14.
SUBORDINATED DEFERRABLE INTEREST DEBENTURES
In 2001, the Company formed a statutory business trust, ABC Bancorp Capital Trust I, which existed for the
exclusive purposes of (i) issuing Trust Securities representing undivided beneficial interests in the assets of
the Trust; (ii) investing the gross proceeds of the Trust securities in junior subordinated deferrable interest
debentures (subordinated debentures); and (iii) engaging in only those activities necessary or incidental
thereto.
The trust preferred securities in the amount of $34,500,000 issued through ABC Bancorp Capital Trust I and
the related Debentures in the amount of $35,567,000 bore interest at 9%, and were redeemable in whole or in
part at any time after September 30, 2006. The Company redeemed all outstanding trust preferred certificates
issued under the Trust during 2006.
During 2005, the Company acquired First National Banc Statutory Trust I, a subsidiary of First National
Banc, Inc., whose sole purpose was to issue $5,000,000 principal amount of Trust Preferred Securities at a
rate per annum equal to the 3-Month LIBOR plus 2.80% through a pool sponsored by a national brokerage
firm. The Trust Preferred Securities have a maturity of 30 years and are redeemable at the Company’s option
on any quarterly interest payment date after five years. There are certain circumstances (as described in the
Trust agreement) in which the securities may be redeemed within the first five years at the Company’s option.
The aggregate principal amount of trust preferred certificates outstanding at December 31, 2006 was
$5,000,000. The aggregate principal amount of Debentures outstanding was $5,155,000.
During 2006, the Company formed Ameris Statutory Trust I, issuing trust preferred certificates in the
aggregate principal amount of $36,000,000. The related debentures issued by the Company were in the
aggregate principal amount of $37,114,000. Both the trust preferred securities and the related Debentures
bear interest at 3-Month LIBOR plus 1.63%. Distributions on the trust preferred securities are paid quarterly,
with interest on the Debentures being paid on the corresponding dates. The trust preferred securities mature
on December 15, 2036 and are redeemable at the Company’s option beginning September 15, 2011.
Under applicable accounting standards, the assets and liabilities of such trusts, as well as the related income
and expenses, are excluded from the Company’s Consolidated Financial Statements. However, the
subordinated debentures issued by the Company and purchased by the trusts remain on the Consolidated
Balance Sheet. In addition, the related interest expense continues to be included in the Consolidated
Statement of Income. For regulatory capital purposes, the Trust Securities qualify as a component of Tier 1
Capital.
F-27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15.
STOCK-BASED COMPENSATION
The Company has two stock ownership and long-term incentive plans approved by the shareholders, the 1997
Ameris Bancorp Omnibus Stock Ownership and Long-Term Incentive Plan (the “1997 Omnibus Plan”), and
the 2005 Ameris Bancorp Omnibus Stock Ownership and Long-Term Incentive Plan (the “2005 Omnibus
Plan”). Awards granted under the Omnibus Plans may be in the form of qualified or nonqualified stock
options, restricted stock, stock appreciation rights (“SARs”), long-term incentive compensation units
consisting of cash and common stock, or any combination thereof within the limitations set forth in the
Omnibus Plans. The Omnibus Plans provide that the aggregate number of shares of the Company’s common
stock which may be subject to award may not exceed 1,785,000 subject to adjustment in certain
circumstances to prevent dilution.
All stock options have an exercise price that is equal to the closing fair market value of Ameris’ stock on the
date the options were granted. Options granted under the Plan generally vest over a five year vesting period.
Stock options granted have a 10 year maximum term. There are also options granted during 2005 and 2006
that contain time and performance-based vesting conditions.
As of December 31, 2006, the Company has outstanding a total of 89,770 restricted shares under the Omnibus
Plans as compensation for certain employees. These shares carry dividend and voting rights. Sale of these
shares is restricted prior to the date of vesting, which is three to five years from the date of the grant. Shares
issued under the plans are recorded at their fair market value on the date of their grant with a corresponding
charge to equity. The compensation expense is recognized on a straight-line basis over the related vesting
period. Compensation expense related to these grants was $484,000, $321,000 and $262,000 for 2006, 2005
and 2004, respectively.
As a result of the adoption of SFAS 123(R), the Company recorded approximately $339,000, or $0.03 per
diluted share, of stock-based compensation cost in 2006.
Other pertinent information related to options is as follows:
A summary of non-performance-based option activity as of December 31, 2006 and changes during the years
then ended is presented below:
December 31, 2006
Weighted
Average
Contractual
Term
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value
($000)
December 31, 2005
Weighted-
Average
Exercise
Price
Weighted
Average
Contractual
Term
Aggregate
Intrinsic
Value
($000)
Shares
(000)
Shares
(000)
Shares
(000)
December 31, 2004
Weighted-
Average
Exercise
Price
Weighted
Average
Contractual
Term
Aggregate
Intrinsic
Value
($000)
Under option,
beginning of
year
Granted
Exercised
Forfeited
Under option,
end of year
Exercisable at
296,235 $
-
(40,987)
(3,180)
11.59
-
6.94
16.43
390,042 $
14,000
(100,129)
(7,678)
10.87
16.92
9.43
13.53
412,247 $
36,000
(32,791)
(25,414)
10.38
15.67
9.75
11.02
252,068 $
11.82
4.90 $
4,123
296,235 $
13.89
5.64 $
1,763
390,042 $
10.87
5.56 $
2,204
end of year
206.917 $
11.23
4.47 $
3,505
207,851 $
10.50
4.79 $
1,941
252,366 $
9.92
4.32 $
1,666
Weighted-average
fair value per
option granted
during year
N/A
$
4.90
$
3.28
F-28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15.
STOCK-BASED COMPENSATION (Continued)
As of December 31, 2006, there was $140,000 of total unrecognized compensation cost related to nonvested
share-based compensation arrangements for non-performance-based options. That cost is expected to be
recognized over a weighted-average period of 1.89 years. The total fair value of those shares vested during
the year ended December 31, 2006 was $1,094,000.
Range of
Exercise
Prices
Number
Outstanding
Options Outstanding
Weighted-
Average
Contractual
Life in Years
Weighted-
Average
Exercise
Price
Options Exercisable
Weighted-
Average
Exercise
Price
Number
Outstanding
$ 8.25 - $10.00
$10.00 - $18.16
92,406
159,662
252,068
3.36
5.80
$
$
8.68
13.64
92,406
114,410
206,816
$
$
8.68
13.29
A summary of the activity of performance-based options as of December 31, 2006 and 2005 and changes
during the years then ended is presented below:
December 31, 2006
Weighted
Average
Contractual
Term
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value
($000)
Shares
December 31, 2005
Weighted-
Average
Exercise
Price
Weighted
Average
Contractual
Term
Aggregate
Intrinsic
Value
($000)
Shares
Under option,
beginning of
year
Granted
Exercised
Forfeited
Under option,
end of year
Exercisable at
end of year
163,000 $
101,750
-
(5,000)
18.07
21.38
-
18.00
- $
163,000
-
-
-
18.07
-
-
259,750 $
19.71
8.86 $
2,290
163,000 $
18.07
9.96 $
281
79,300 $
18.67
8.70 $
754
30,500 $
18.07
9.49 $
56
The weighted-average grant date fair value of options granted during the years 2006 and 2005 was $3.48 and
$5.08, respectively. There were no performance-based options exercised during 2006 or 2005. As of
December 31, 2006, there was $765,000 million of total unrecognized compensation cost related to nonvested
share-based compensation arrangements granted related to performance-based options; that cost is expected to
be recognized over a period of 4.2 years.
F-29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15.
STOCK-BASED COMPENSATION (Continued)
Information pertaining to performance-based options outstanding at December 31, 2006 is as follows:
Range of
Exercise
Prices
Number
Outstanding
Options Outstanding
Weighted-
Average
Contractual
Life in Years
Weighted-
Average
Exercise
Price
Options Exercisable
Weighted-
Average
Exercise
Price
Number
Outstanding
$18.00 - $20.12
$20.76 - $28.53
158,000
101,750
259,750
8.50
9.42
$
$
18.64
21.38
61,100
18,200
79,300
$
$
18.04
20.79
A summary of the status of Ameris’ restricted stock awards as of December 31, 2006 and changes during the
year then ended is presented below:
Restricted Stock
Nonvested shares at January 1, 2006
Granted
Vested
Forfeited
Nonvested shares at December 31, 2006
Weighted-
Average
Grant-Date
Fair Value
14.85
21.17
12.13
13.32
19.02
Shares
68,780
46,850
(23,160)
(2,700)
89,770
$
$
It is Ameris’ policy to issue new shares for stock option exercises and restricted stock rather than issue
treasury shares. Ameris recognizes stock-based compensation expense on a straight-line basis over the
options’ related vesting term. The balance of unearned compensation related to restricted stock grants as of
December 31, 2006 and 2005 was approximately $1,001,000 and $526,000, respectively.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing
model with the following weighted-average assumptions:
Dividend yield
Expected life
Expected volatility
Risk-free interest rate
Weighted average volatility
Weighted average expected dividends
Years Ended December 31,
2006
2005
2004
1.96-2.70%
8 years
16.51-20.28%
4.45-5.12%
19.61%
2.64%
3.11%
8 years
30.05%
3.94%
- %
- %
3.40%
7 years
22.57%
4.52%
- %
- %
F-30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
During 2006, the Company entered into a derivative instrument to minimize the volatility in its net interest
margin due to a reduction in the prime rate and the resulting effect on interest income from its variable rate
loan portfolio. The Company purchased two $35 million notional amount, 3 and 5-year, 7% prime rate floor
contracts to hedge against the exposure to the cash flow of these variable rate loans. The premium paid for
these contracts was $497,000. These contracts are classified as cash flow hedges of an exposure to changes in
the cash flow of a recognized asset. As a cash flow hedge, the change in fair value of a hedge that is deemed
to be highly effective is recognized in other comprehensive income and the portion deemed to be ineffective
is recognized in earnings. As of December 31, 2006, the hedge is deemed to be highly effective and the
change in fair value of $62,000 is included in other assets, and the net after tax effect of $40,000 is reported
in other comprehensive income. A summary of the Company’s derivative financial instruments at December
31, 2006 is shown in the following table:
Cash flow hedges:
Floor - 5 year
Floor - 3 year
Notional
Amount
Rate of
Floor
Fair Value
December 31,
Index
2006
$ 35,000,000
35,000,000
$ 70,000,000
7%
7%
Prime
Prime
$
$
328,000
107,000
435,000
NOTE 17. COMMITMENTS AND CONTINGENT LIABILITIES
Loan Commitments
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business
to meet the financing needs of its customers. These financial instruments include commitments to extend
credit and standby letters of credit. They involve, to varying degrees, elements of credit risk and interest rate
risk in excess of the amount recognized in the balance sheets.
The Company's exposure to credit loss is represented by the contractual amount of those instruments. The
Company uses the same credit policies in making commitments and conditional obligations as it does for on-
balance-sheet instruments. A summary of the Company's commitments is as follows:
Commitments to extend credit
Financial standby letters of credit
December 31,
2006
2005
(Dollars in Thousands)
$ 197,435
6,139
$ 203,574
$ 184,265
5,741
$ 190,006
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any
condition established in the contract. Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the commitments are expected to expire without
being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The
amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on
management’s credit evaluation of the customer.
F-31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17. COMMITMENTS AND CONTINGENT LIABILITIES (Continued)
Loan Commitments (Continued)
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of
a customer to a third party. Those guarantees are primarily issued to support public and private borrowing
arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in
extending loans to customers. Collateral is required in instances which the Company deems necessary.
At December 31, 2006 and 2005, the carrying amount of liabilities related to the Company’s obligation to
perform under financial standby letters of credit was insignificant. The Company has not been required to
perform on any financial standby letters of credit and the Company has not incurred any losses on financial
standby letters of credit for the years ended December 31, 2006 and 2005.
At December 31, 2006, the Company had guaranteed the debt of certain officers’ liabilities at another
financial institution totaling approximately $550,000. These guarantees represent the available credit line of
those certain officers for the purchase of Company stock. Any stock purchased under this program will be
assigned to the Company and held in safekeeping. The Company has not been required to perform on any of
these guarantees for the year ended December 31, 2006.
Contingencies
In the normal course of business, the Company is involved in various legal proceedings. In the opinion of
management, any liability resulting from such proceedings would not have a material effect on the Company's
financial statements.
NOTE 18. CONCENTRATIONS OF CREDIT
The Bank makes commercial, residential, construction, agricultural, agribusiness and consumer loans to
customers primarily in Georgia, northern Florida, Alabama and South Carolina. A substantial portion of the
customers' abilities to honor their contracts is dependent on the business economy in the geographical area
served by the Bank.
A substantial portion of the Company's loans are secured by real estate in the Company's primary market area.
In addition, a substantial portion of the other real estate owned is located in those same markets.
Accordingly, the ultimate collectibility of a substantial portion of the Company's loan portfolio and the
recovery of a substantial portion of the carrying amount of other real estate owned are susceptible to changes
in real estate conditions in the Company's primary market area.
Although the Company's loan portfolio is diversified, there is a relationship in this region between the
agricultural economy and the economic performance of loans made to nonagricultural customers. The
Company's lending policies for agricultural and nonagricultural customers require loans to be well-
collateralized and supported by cash flows. Collateral for agricultural loans include equipment, crops,
livestock and land. Credit losses from loans related to the agricultural economy is taken into consideration by
management in determining the allowance for loan losses.
F-32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19. REGULATORY MATTERS
The Bank is subject to certain restrictions on the amount of dividends that may be declared without prior
regulatory approval. At December 31, 2006, approximately $11,290,000 of retained earnings were available
for dividend declaration without regulatory approval.
The Company and the Bank are subject to various regulatory capital requirements administered by the federal
banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the
Company's and Bank's financial statements. Under capital adequacy guidelines and the regulatory framework
for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve
quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under
regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments
by the regulators about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Company and the
Bank to maintain minimum amounts and ratios of total and Tier I capital, as defined by the regulations, to
risk-weighted assets, as defined, and of Tier I capital to average assets, as defined. Management believes, as
of December 31, 2006 and 2005, the Company and the Bank met all capital adequacy requirements to which
they are subject.
As of December 31, 2006, the most recent notification from the regulatory authorities categorized the Bank as
well capitalized under the regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as
set forth in the following table. There are no conditions or events since that notification that management
believes have changed the Bank’s category. Prompt corrective action provisions are not applicable to bank
holding companies.
The Company’s and Bank’s actual capital amounts and ratios are presented in the following table.
For Capital
To Be Well Capitalized
Actual
Adequacy
Purposes
Under Prompt
C
ti
Action Provisions
As of December 31, 2006
Total Capital to Risk Weighted Assets
Consolidated
Ameris Bank
Tier I Capital to Risk Weighted Assets:
Consolidated
Ameris Bank
Tier I Capital to Average Assets:
Consolidated
Ameris Bank
$
$
$
$
$
$
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in Thousands)
180,676
11.92% $
121,305
8.00%
- - -N/A - - -
180,675
11.94% $
121,089
8.00% $ 151,361
10.00%
161,797
10.67% $
60,653
4.00%
- - -N/A - - -
161,830
10.69% $
60,545
4.00% $
90,817
6.00%
161,797
161,830
8.58% $
75,452
4.00%
- - - N/A - - -
8.64% $
74,954
4.00% $
93,693
5.00%
F-33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 19. REGULATORY MATTERS (Continued)
For Capital
To Be Well Capitalized
Actual
Adequacy
Purposes
Under Prompt
C
ti
Action Provisions
As of December 31, 2005
Total Capital to Risk Weighted Assets
Consolidated
Ameris Bank
Tier I Capital to Risk Weighted Assets:
Consolidated
Ameris Bank
Tier I Capital to Average Assets:
Consolidated
Ameris Bank
$
$
$
$
$
$
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in Thousands)
154,513
12.66% $
97,616
8.00%
- - -N/A - - -
152,140
12.14% $
100,261
8.00% $ 125,328
10.00%
132,899
10.89% $
48,808
4.00%
- - -N/A - - -
136,388
10.88% $
50,130
4.00% $
75,199
6.00%
132,899
136,388
9.71% $
54,757
4.00%
- - - N/A - - -
9.09% $
60,018
4.00% $
75,023
5.00%
NOTE 20.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument is the current amount that would be exchanged between willing
parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices.
However, in many instances, there are no quoted market prices for the Company’s various financial
instruments. In cases where quoted market prices are not available, fair value is based on discounted cash
flows or other valuation techniques. These techniques are significantly affected by the assumptions used,
including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not
be realized in an immediate settlement of the instrument. SFAS 107, Disclosures about Fair Value of
Financial Instruments, excludes certain financial instruments and all nonfinancial instruments from its
disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily
represent the underlying fair value of the Company.
The following methods and assumptions were used by the Company in estimating the fair value of its
financial instruments.
Cash, Due From Banks, Interest-Bearing Deposits in Banks and Federal Funds Sold: The carrying
amount of cash, due from banks and interest-bearing deposits in banks and federal funds sold approximates
fair value.
Securities: Fair value of securities is based on available quoted market prices. The carrying amount of
equity securities with no readily determinable fair value approximates fair value.
Loans: The carrying amount of variable-rate loans that reprice frequently and have no significant change in
credit risk approximates fair value. The fair value of fixed-rate loans is estimated based on discounted
contractual cash flows, using interest rates currently being offered for loans with similar terms to borrowers
with similar credit quality. The fair value of impaired loans is estimated based on discounted contractual cash
flows or underlying collateral values, where applicable.
F-34
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20.
FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
Deposits: The carrying amount of demand deposits, savings deposits and variable-rate certificates of deposit
approximates fair value. The fair value of fixed-rate certificates of deposit is estimated based on discounted
contractual cash flows using interest rates currently being offered for certificates of similar maturities.
Federal Funds Purchased, Repurchase Agreements and Other Borrowings: The carrying amount of
variable rate borrowings, federal funds purchased and securities sold under repurchase agreements
approximates fair value. The fair value of fixed rate other borrowings is estimated based on discounted
contractual cash flows using the current incremental borrowing rates for similar type borrowing
arrangements.
Subordinated Deferrable Interest Debentures: The carrying amount of the Company’s variable rate trust
preferred securities approximates fair value. The fair value of the Company’s fixed rate trust preferred
securities is based on available quoted market prices.
Accrued Interest: The carrying amount of accrued interest approximates fair value.
Off-Balance-Sheet Instruments: The carrying amount of commitments to extend credit and standby letters
of credit approximates fair value. The carrying amount of the off-balance-sheet financial instruments is based
on fees charged to enter into such agreements.
The carrying amount and estimated fair value of the Company's financial instruments were as follows:
Carrying
Amount
December 31, 2006
Carrying
Fair
Amount
Value
(Dollars in Thousands)
December 31, 2005
Fair
Value
1
7
Financial assets:
Loans, net
$ 1,418,088 $
1,410,168 $ 1,164,307 $ 1,162,124
Financial liabilities:
Deposits
Other borrowings
Subordinated deferrable interest debentures
1,710,163
1,710,074
1,375,232
1,374,613
75,500
42,269
75,554
42,269
106,022
40,722
106,043
43,745
F-35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21. CONDENSED FINANCIAL INFORMATION OF AMERIS BANCORP
(PARENT COMPANY ONLY)
CONDENSED BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
(Dollars in Thousands)
Assets
Cash and due from banks
Investment in subsidiaries
Other assets
2006
2005
$
6,812
220,439
6,414
$
4,865
185,545
11,310
Total assets
$ 233,665
$ 201,720
Liabilities
Other borrowings
Other liabilities
Subordinated deferrable interest debentures
Total liabilities
Stockholders' equity
$
5,000
7,664
42,269
$
5,000
7,295
40,722
54,933
53,017
178,732
148,703
Total liabilities and stockholders' equity
$ 233,665
$ 201,720
1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
F-36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21. CONDENSED FINANCIAL INFORMATION OF AMERIS BANCORP
(PARENT COMPANY ONLY) (Continued)
CONDENSED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Dollars in Thousands)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
16
19
20
21
24
27
28
Income
Dividends from subsidiaries
Interest on deposits in other banks
Fee income from subsidiaries
Other income
Total income
Expense
Interest
Amortization and depreciation
Business restructuring expense
Other expense
Total expense
2006
2005
2004
$
6,840
-
2,777
3,386
13,003
$
$
11,952
254
11,244
1,936
25,386
4,122
-
-
2,668
6,790
3,530
736
2,838
15,362
22,466
12,100
204
10,599
1,707
24,610
3,547
876
-
12,819
17,242
Income before income tax benefits and
equity in undistributed earnings of subsidiaries
6,213
2,920
7,368
Income tax benefits
175
3,258
1,647
Income before equity in undistributed earnings
of subsidiaries
6,388
6,178
9,015
Equity in undistributed earnings of subsidiaries
15,740
7,550
4,086
Net income
$
22,128
$
13,728
$
13,101
F-37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21. CONDENSED FINANCIAL INFORMATION OF AMERIS BANCORP
(PARENT COMPANY ONLY) (Continued)
CONDENSED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Dollars in Thousands)
1
2
3
4
5
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization
Amortization of unearned compensation
Undistributed earnings of subsidiaries
Decrease in interest receivable
Increase (decrease) in interest payable
Decrease in taxes payable
Provision for deferred taxes
(Increase) decrease in due from subsidiaries
Other operating activities
Total adjustments
2006
2005
2004
$
22,128
$ 13,728
$
13,101
-
823
(15,740)
-
(106)
(177)
201
166
1,296
(13,537)
736
321
(7,550)
3
10
(1,190)
(180)
(90)
3,169
(4,771)
614
262
(4,086)
4
-
(370)
318
234
113
(2,911)
Net cash provided by operating activities
8,591
8,957
10,190
INVESTING ACTIVITIES
Decrease in interest-bearing deposits in banks
Purchases of premises and equipment
Proceeds from sale of fixed assets
Contribution of capital to subsidiary bank
Net cash paid for acquisitions
Unfunded obligation for acquisition
Net cash provided by (used in) investing activities
FINANCING ACTIVITIES
Repayment of other borrowings
Proceeds from subordinated debentures
Purchase of treasury shares
Dividends paid
Reduction in income taxes payable resulting from
vesting of restricted shares
Payment for fractional shares
Proceeds from exercise of stock options
Net cash used in financing activities
Net increase (decrease) in cash and due from banks
Cash and due from banks at beginning of year
-
(3)
3,884
-
-
(5,120)
(1,239)
-
1,547
(112)
(7,288)
-
40
-
408
(5,405)
1,947
4,865
4,546
(587)
-
(325)
(13,073)
-
13,029
(725)
-
-
(11,094)
-
(9,439)
1,210
(219)
5,000
(261)
(6,355)
53
(19)
945
(1,462)
-
(361)
(5,475)
234
-
320
(856)
(6,744)
(1,338)
6,203
4,656
1,547
Cash and due from banks at end of year
$
6,812
$
4,865
$
6,203
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash paid during the year for interest
$
4,224
$
3,520
$
3,547
F-38
A M E R I S
B A N C O R P
A M E R I S
B A N C O R P A N D A M E R I S B A N K D I R E C T O R S
Kenneth J. Hunnicutt, Chairman
Occupation: Executive Consultant
Daniel B. Jeter, Vice Chairman
Occupation: Consumer Finance
Main Employer: Standard Discount
Johnny W. Floyd
Occupation: Timber and Realty
Main Employer: Floyd Timber Company
& Cordele Realty, Inc.
J. Raymond Fulp
Occupation: Pharmacist
Main Employer: Harveys Pharmacy
Edwin W. Hortman, Jr.
Occupation: Banker
Main Employer: Ameris Bancorp
Glenn A. Kirbo
Occupation: Attorney
Main Employer: Kirbo & Kirbo, P.C.
Robert P. Lynch
Occupation: Automobile Dealer
Main Employer: Lynch Management
Company
Brooks Sheldon
Occupation: Retired Banker
Eugene M. Vereen, Jr., Chairman Emeritus
Occupation: Investments
Main Employer: M.I.A., Co.
Henry C. Wortman
Occupation: Farming
Main Employer: Jackson & Wortman
S E N I O R M A N A G E M E N T
Edwin W. Hortman, Jr.
President & Chief Executive Officer
C. John Hipp, III
Executive Vice President &
Group President – South Carolina
Johnny R. Myers
Executive Vice President &
South Regional Executive
Dennis J. Zember, Jr.
Executive Vice President &
Chief Financial Officer
Thomas T. Dampier
Executive Vice President &
North Regional Executive
Jon S. Edwards
Executive Vice President &
Director of Credit Administration
December 2006
Finalized consolidation of 15 banking charters
Entered South Carolina through the
acquisition of Islands Bancorp – parent
company of Islands Community Bank, N.A.,
in Beaufort, South Carolina
Over $2 billion in assets at year-end
December 2005
Acquisition of First National Banc, Inc –
banking centers in St. Marys, GA; Kingsland,
GA and Orange Park, FL
ABC Bancorp and subsidiary banks began
operating as Ameris Bank
November 2004
Acquisition of Citizens Bank ~ Wakulla –
Crawfordville, FL
December 2001
Over $1 billion in assets at year-end
Purchased Colquitt, GA branch from Security
Bank and Trust Company of Albany, GA
Cindi H. Lewis
Executive Vice President &
Chief Administrative Officer &
Corporate Secretary
Michael F. McDonald
Senior Vice President &
Director of Retail Banking
Charles A. Robinson
Senior Vice President &
Director of Internal Audit
Gregory H. Walls
Senior Vice President &
Chief Information Officer
A M E R I S B A N C O R P H I S T O R Y
July 2001
Acquisition of The First Bank of Brunswick –
Brunswick, GA
August 1996
Acquisition of First National Bank of South
Georgia – Albany, GA
July 1986
Acquisition of Farmers and Merchants Bank –
Coolidge, GA
June 2001
Purchased Newberry, FL branch from
Republic Security Bank
July 1996
Acquisition of Central Bank and Trust –
Cordele, GA
June 1985
Acquisition of The Bank of Quitman –
Quitman, GA
April 2001
Entered Florida through the acquisition of
Tri-County Bank – Trenton, FL
June 1996
Entered Alabama through the acquisition of
Southland Bank – Dothan, AL
August 1997
Acquisition of The Bank of Ocilla – Ocilla,
GA
July 1997
Purchased Douglas, GA branch from
Nationsbank
December 1996
Acquisition of Farmers and Merchants Bank –
Donalsonville, GA
December 1980
ABC Holding Company incorporated
January 1979
Acquisition of Toney Brothers Bank –
Doerun, GA
May 1994
ABC Bancorp initial public offering
October 1992
Acquisition of Cairo Banking Company –
Cairo, GA
October 1971
American Banking Company opened
for business
September 1987
ABC Bancorp public stock offering
August 1971
American Banking Company incorporated
December 1986
Acquisition of Citizens Bank of Tifton –
Tifton, GA
C O M M U N I T Y D I R E C T O R Y
GEORGIA
Albany
Don Monk, President
Directors
Glenn A. Kirbo, Chairman
Willie Adams, Jr., MD
Robert V. Barkley, Sr.
Thomas T. Dampier
Russell E. Martin
Reid E. Mills
W. Thomas Mitcham, MD
Don Monk
R. Douglas Oliver
W. Paul Wallace, Jr.
Brunswick
Michael D. Hodges, President
Directors
Jimmy D. Veal, Chairman
C. Ray Acosta
Joseph C. Fendig
Michael D. Hodges
C. Vance Leavy
Johnny R. Myers
J. Thomas Whelchel, Director Emeritus
Cordele
Robert L. Evans, President
Directors
Johnny W. Floyd, Chairman
Charles W. Clark
Thomas T. Dampier
Robert L. Evans
William H. Griffin, III
David N. Rainwater
Donalsonville
Nancy S. Jernigan, City President
Directors
Lewis M. Carter, Jr., Chairman
Thomas T. Dampier
Joseph S. Hall
David Glenn Heard
Nancy S. Jernigan
Newton E. King, Jr.
C. Willard Mims
Harris O. Pittman, III
Dan E. Ponder, Jr.
Charles R. Burke, Sr., Director Emeritus
H. Wayne Carr, Director Emeritus
John B. Clarke, Sr., Director Emeritus
Jerry G. Mitchell, Director Emeritus
Cairo
Robert S. VanLandingham, President
Douglas
David B. Batchelor, City President
Directors
Jeffrey (Jet) F. Cox, Chairman
Kevin S. Cauley
Nancy C. Clark
Cuy Harrell, III
Johnny R. Myers
G. Ashley Register, MD
Robert S. VanLandingham
Colquitt
City Directors
Walter W. Hays, Chairman
Thomas T. Dampier
Terry S. Pickle
Harris O. Pittman, III
Danny S. Shepard
City Directors
Donnie H. Smith, Chairman
Lawton E. Bassett, III
David B. Batchelor
Thomas T. Dampier
J. Anthony Deal
William (Bill) H. Elliott
Faye Hennesy
Alfred Lott, Jr.
Ronnie Spivey
Oscar Street
Kingsland
City Directors
George L. Hannaford, Chairman
R. Edwin Haworth
John W. McDill
James R. McCollum
Johnny R. Myers
Daniel W. Simpson
Moultrie
Ronnie F. Marchant, President
Directors
Brooks Sheldon, Chairman
Robert M. Brown, MD
C. Wayne Cooper
Thomas T. Dampier
Thomas L. Estes, MD
Robert A. Faircloth
Plenn Hunnicutt
Daniel B. Jeter
Lynn Jones, Jr.
Ronnie F. Marchant
J. Mark Mobley, Jr.
Thomas W. Rowell
Eugene M. Vereen, Jr., President Emeritus
Ocilla
City Directors
Loran (Sonny) A. Pate, Chairman
Lawton E. Bassett, III
Thomas T. Dampier
Howard C. McMahan, MD
Gary H. Paulk
Wesley Paulk
C. Larry Young
Wycliffe Griffin, Director Emeritus
W. C. Sams, MD, Director Emeritus
St. Marys
R. Edwin Haworth, President
Directors
William H. Gross, Chairman
Michael A. Akel
Michael L. Davis
Kenneth L. Harrison
R. Edwin Haworth
Joseph P. Helow
Johnny R. Myers
Thomas I. Stafford, Jr.
J. Grover Henderson, Director Emeritus
Thomasville
Ronald K. Bell, Sr., President
Directors
L. Maurice Chastain, Chairman
Dale E. Aldridge
Ronald K. Bell, Sr.
C O M M U N I T Y D I R E C T O R Y
SOUTH CAROLINA
Beaufort
John R. Perrill, City President
Directors
Marc J. Bogan
Louis O. Dore
Martha B. Fender
D. Martin Goodman
Stancel E. Kirkland
Carl E. Lipscomb
Edward J. McNeil, MD
Jimmy Lee Mullins, Sr.
Frances K. Nicholson
John R. Perrill
J. Frank Ward
Stuart P. Wilbourne
Bruce K. Wyles, DDS
C. John Hipp, III, ex officio
Thomasville (continued)
S. Mark Brewer, MD
Gene Hickey
Johnny R. Myers
Terrel M. Solana, Ed.D.
F. Keith Wortman
Tifton
Lawton E. Bassett, III, President
Directors
J. Raymond Fulp, Chairman
Lawton E. Bassett, III
John R. Brownlee
Austin L. Coarsey
Thomas T. Dampier
Stewart D. Gilbert, MD
John Alan Lindsey
Loran (Sonny) A. Pate
Donnie H. Smith
Clifford A. Walker, Sr., DMD
Valdosta
Tim S. Jones, President
Directors
Henry C. Wortman, Chairman
John A. Baker
William P. Cooper, Jr.
Thomas T. Dampier
Tim S. Jones
Sue D. Mink
Charles E. Smith
Thomas Eddie York
Doyle Weltzbarker, Director Emeritus
FLORIDA
Crawfordville
David D. Buckridge, President
Directors
L.F. Young, Jr., Chairman
Wade G. Brown
David D. Buckridge
William E. Mills
Johnny R. Myers
W. Mark Payne
Orange Park
Timothy M. O’Keefe, President
Directors
V. Wayne Williford, Chairman
Vasant P. Bhide
Benny L. Cleghorn
Phillip H. Cury
Johnny R. Myers
Timothy M. O’Keefe
Orange Park - Blanding
City Directors
John A. Adams
R. Scott Drawdy
Barry J. Fuller
Johnny R. Myers
Timothy M. O’Keefe
Trenton
Michael E. McElroy, President
Directors
John H. Ferguson, Chairman
Michael Hayes
Michael E. McElroy
Johnny R. Myers
Samuel Sanders
Norman Scoggins
ALABAMA
Dothan
Harris O. Pittman, III, President
Directors
R. Dale Ezzell, Chairman
Robert Crowder
Gerald B. Crowley
Thomas T. Dampier
Ronald E. Dean
John D. DeLoach
Harris O. Pittman, III
A M E R I S B A N C O R P M A R K E T F O R T H E C O M P A N Y ’ S
C O M M O N S T O C K A N D D I V I D E N D I N F O R M A T I O N
Ameris Bancorp Common Stock is listed on the NASDAQ Global Select Market (NASDAQ) under the symbol “ABCB”.
The following table sets forth the low and high sales prices for the common stock as quoted on NASDAQ during 2006.
CALENDAR PERIOD
SALES PRICE
2006
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Low
High
$19.26 $22.87
$20.03 $23.01
$20.99 $27.77
$25.77 $28.99
Quarterly dividends of $0.14 per share were declared for first, second, third and fourth quarters of 2006.
AVAIL ABILIT Y OF INFORMATION
Upon written request, Ameris Bancorp will provide, without charge, a copy of the Annual Report on Form 10-K, including the
financial statements and the financial statement schedules, required to be filed with the Securities and Exchange Commission for
the fiscal year 2006.
Please direct requests to:
Ameris Bancorp, Attention: Dennis J. Zember Jr., CPA, EVP & CFO, P.O. Box 3668, Moultrie, GA 31776-3668.
ANNUAL MEETING OF SHAREHOLDERS
The 2007 Annual Meeting of Shareholders of Ameris Bancorp will be held at 4:15 p.m. E.S.T.,
Tuesday, April 24, 2007, at Sunset Country Club, located at 2730 South Main Street, Moultrie, Georgia.
A M E R I S
B A N K L O C A T I O N S
GEORGIA
© Albany
2627 Dawson Road 229.888.5600
© Brunswick
Main Office
3440 Cypress Mill Road 912.267.9500
North Glynn
5340 New Jesup Highway 912.264.9699
© Cairo
Main Office
201 South Broad Street 229.377.1110
Highway 84
40 38th Blvd. NE 229.758.3461
© Colquitt
162 East Crawford St. 229.758.3461
© Kingsland
East
1603 Highway 40 East 912.729.8878
West
120 South Lee Street 912.729.5611
© Lake Seminole
Corner of Highways 253 & 374 229.861.2213
© Leesburg
1607 U.S. Highway 19 South 229.434.4550
© Moultrie
Main Office
225 South Main Street 229.985.2222
Quitman Highway
1707 First Avenue SE 229.985.1111
Sunset
305 South Main Street 229.873.4444
FLORIDA
© Crawfordville
ALABAMA
© Abbeville
2628 Crawfordville Highway 850.926.5211
204 Kirkland Street 334.585.2265
© Jacksonville
© Clayton
8705 Perimeter Park Blvd. Suite 4 904.996.9490
33 Eufaula Avenue 334.775.3211
© Newberry
25365 West Newberry Road 352.472.2162
© Orange Park
Main Office
1775 Eagle Harbor Parkway 904.264.8840
Blanding
485 Blanding Boulevard 904.213.0883
© Dothan
Main Office
3299 Ross Clark Circle NW 334.671.4000
Southside
1817 South Oates Street 334.677.3063
© Eufaula
1140 South Eufaula Ave. 334.687.3260
© Panacea
© Headland
1445 Coastal Highway 850.984.5050
208 Main Street 334.693.5411
© Coolidge
© Ocilla
© Sopchoppy
1011 South Pine Street 229.346.3555
300 South Irwin Avenue 229.468.9411
2117 Sopchoppy Highway 850.962.4050
© Cordele
Main Office
502 2nd Street South 229.273.7700
Gazebo
1302 16th Avenue East 229.273.7700
© Doerun
© Quitman
© Trenton
1000 West Screven Street 229.263.7525
530 East Wade Street 352.463.7171
© St. Marys
2509 Osborne Road 912.882.3400
© St. Simons Island
137 West Broad Avenue 229.782.5358
3811 Frederica Road 912.634.1270
© Donalsonville
© Thomasville
109 West Third Street 229.524.2112
2484 East Pinetree Blvd. 229.226.5755
© Douglas
West
901 Bowens Mill Road 912.384.2701
East
100 South Pearl Avenue 912.384.2701
© Tifton
735 West Second Street 229.382.7311
© Troupeville
19540 Valdosta Highway 229.247.5376
© Jekyll Island
© Valdosta
18-B Beachview Drive 912.635.9014
3140 Inner Perimeter Rd. 229.241.2851
SOUTH CAROLINA
© Beaufort
2348 Boundary Street 843.521.1968
© Bluffton - Loan Production Office
10 Pinkney Colony Road, Bldg. 300 - Suite 310
843.815.8550
© Charleston - Loan Production Office
3 South Park Circle, Suite 260 843.209.2879
© Columbia - Opened February 2007
1301 Gervais Street, Suite 700 803.765.1600
Ameris Bancorp Corporate Headquarters
24 Second Avenue, S.E., Moultrie, GA 31768 P.O. Box 3668, Moultrie, GA 31776 Phone: 229.890.1111 Fax: 229.890.2235
www.amerisbank.com