2022
ANNUAL REPORT
DEAR SHAREHOLDERS,
Fiscal 2022 was another successful year for Ameris Bancorp. The bank’s purpose to bring financial
peace of mind to customers and communities was reflected in our performance. With our teamwork
and discipline, Ameris supported individuals and businesses, while yielding strong financial results for
shareholders.
Last year, we achieved solid loan growth, grew total revenue, expanded our net interest margin, increased
tangible book value, and improved our efficiency ratio. For 2022, Ameris reported total revenue of
$1.09 billion and net income of $346.5 million, or $4.99 per diluted share.
Ameris introduced three strategic priorities for our business going forward: growing demand deposits;
expanding business banking; and delivering an exceptional customer experience. These priorities signify
the importance of continued, responsible growth and our objective to serve more businesses, knowing
the positive ripple effect created for people and communities when businesses thrive. Additionally,
Ameris is built to create meaningful, valuable interactions with our customers, and our focus on the
customer experience encompasses our personalized approach, technology enhancements, and the
attention we place on operational excellence inside the bank.
We are proud of the progress we’ve made to execute on these priorities, and are even more optimistic
about the opportunities that lie ahead.
We finished 2022 feeling confident in Ameris Bank’s momentum and foundation for success. We are well
positioned for the future to address both challenges and opportunities in 2023 and beyond.
Thank you for your continued trust and investment in Ameris Bancorp. We are enthusiastic about what
we will accomplish in 2023.
H. Palmer Proctor Jr.
Chief Executive Officer
Leo J. Hill
Lead Independent Director
ANNUAL REPORT 2022 | 1
$10.00
$7.50
$5.00
$2.50
$35.00
$30.00
$25.00
$20.00
$15.00
$10.00
$30.00
$25.00
$20.00
$15.00
$10.00
2.00%
1.75%
1.50%
1.25%
1.00%
2
9
.
7
$
2019
2020
2021
2022
NONINTEREST-BEARING DEPOSITS
(In billions of dollars)
.
2
9
9
2
$
2019
2020
2021
2022
TANGIBLE BOOK VALUE
(In dollars)
.
5
0
5
2
$
2019
2020
2021
2022
TOTAL ASSETS
(In billions of dollars)
%
9
3
.
1
2019
2020
2021
2022
ADJUSTED RETURN ON
AVERAGE ASSETS
(In percentages)
2 | AMERIS BANCORP
.
6
4
9
1
$
2019
2020
2021
2022
TOTAL DEPOSITS
(In billions of dollars)
.
9
9
4
$
2019
2020
2021
2022
EARNINGS PER SHARE
(In dollars)
8
0
.
1
$
2019
2020
2021
2022
TOTAL REVENUE
(In billions of dollars)
%
2
9
6
1
.
$20.00
$15.00
$10.00
$5.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$1.25
$1.00
$0.75
$0.50
$0.25
25.00%
20.00%
15.00%
10.00%
5.00%
2019
2020
2021
2022
ADJUSTED RETURN ON AVERAGE
TANGIBLE COMMON EQUITY
(In percentages)
Performance
Deposits
Our team remained focused on growing low-cost core deposits in 2022. Despite a challenging funding market,
noninterest-bearing deposits grew $155 million to $7.9 billion. Our funding mix continued to improve with
noninterest-bearing deposits representing 40.74% of our total deposits at the end of 2022 from 39.54% at
the end of 2021. A strong core deposit base diversified across our footprint in premier Southeastern markets
provides stable funding for balance sheet growth. At the end of 2022, deposits represented 90.7% of total
funding.
Tangible Book Value
Capital strength is fundamental to support our growth strategy while growing shareholder value through
increasing tangible book value. We are pleased with our tangible book value growth of $3.66 per share, or
nearly 14%, to $29.92 per share at year end 2022. This growth in tangible book value reflects our prudent
balance sheet management and was in the top of our peer group. Our Board of Directors also renewed and
replenished our existing common stock repurchase plan in October 2022 for additional share repurchases up
to $100 million for an additional year.
Revenue (Net Interest Income Plus Noninterest Income)
Total revenue remained strong and was over $1 billion for the third consecutive year! Total revenue increased
$65 million, or 6%, during 2022. This growth reflects the benefit of the rising rate environment and our asset
sensitivity, and more than offset the decline in mortgage revenue as refinancing activity slowed. Net interest
income increased 22% during 2022, compared with growth in average earning assets of 8%. Noninterest
income decreased 22%, primarily in our mortgage line of business. Income from mortgage banking activity
decreased $101 million during 2022 reflecting a decline in both gain on sale margin and production.
Adjusted Return on Average Assets and Average Tangible Common Equity
In 2022, the company’s adjusted return on average assets (ROA) was 1.39%, and our adjusted return on
average tangible common equity (ROTCE) was 16.92%. These results show the solid fundamentals of our core
banking division while normalizing the contributions of our mortgage and Small Business Administration (SBA)
divisions, which benefitted from strong refinance activity and participation in the Paycheck Protection Program
in prior years.
ANNUAL REPORT 2022 | 3
Fostering an Inclusive
and Equitable Culture
Supporting Teammate Wellbeing
The wellbeing of teammates and their families is one of our top priorities. Ameris offers competitive benefits
including medical, dental, vision, disability, and life insurance, as well as paid time-off and an employee stock
purchase plan. Our 401(k) plan matches 50% of each teammates’ elective deferral amount up to the first 6% of
the contribution.
In 2022, we announced that effective January 1, 2023, Ameris is enhancing its 401(k) program by increasing
our employer match. The company will match 50% of teammates’ elective deferral amounts up to the first 8%.
Ameris also announced new benefits for teammates for 2023, including pet insurance and legal assistance.
We continue to offer an Employee Assistance Program (EAP) which provides teammates and their eligible
dependents with personal or job-related counseling, including emotional well-being, legal and financial
matters, healthy lifestyles, and work/life transitions.
Valuing Diversity, Equity, and Inclusion
At Ameris, we recognize the strength that diversity, equity, and inclusion (DEI) bring to our business. We are
committed to fostering an environment that is equitable and values diverse perspectives and backgrounds.
Our teammate-led Employee Resource Groups (ERGs) serve seven key areas: Women in Banking, LGBTQIA+,
Veterans, Black, Indigenous and People of Color (BIPOC), Multigenerational, Caregivers, and Mental Health.
Throughout 2022, the groups made an impact at Ameris and in our communities. They hosted 10 fireside chats
to spur important conversations and raised money for organizations doing meaningful work, including $10,000
for the American Foundation for Suicide Prevention.
“In 2022, we continued to expand
our DEI efforts company-wide, by
generating productive conversations,
providing support and education, and
ensuring opportunities for advocation.”
- Karlene Gordon, DEI Officer
4 | AMERIS BANCORP
Empowering Teammates to Grow with Ameris
Ameris provides a unique opportunity for professional growth through our Leadership Development
Program, which was launched in 2021. All teammates are eligible and can join at any time, choosing one
of three paths based on their job and goals: leading self, leading others, and leading leaders. In 2022, 88
additional teammates enrolled in the program, increasing the total teammates enrolled in the program
to 196 with 38.6% of participants coming from diverse backgrounds and women accounting for 76.1% of
participants.
Additionally, 44 teammates completed American Banking Association (ABA) certifications with an
additional 138 teammates currently enrolled. Ameris also created 19 Career Paths, which serve as
roadmaps that provide teammates with actionable steps they can take to advance their careers, offering
guidance for teammates in the areas of accounting, credit, commercial, retail, customer service, human
resources, mortgage, information technology, audit, treasury, and more. In 2022, all managers received a
career discussion guide to support conversations about career growth at Ameris.
Promoting Mentorship
Teammates at Ameris have significant talent, experience, and guidance to share with one another. In
2022, our Mentor Ameris program continued to match high-potential teammates with designated mentors
for a nine-month mentorship experience. Outside of this program, Ameris encourages teammates and
leaders to find mentors or become mentors. Our Learning & Development team created guides to help
teammates establish mentor relationships and to excel as mentors and coaches.
“The Mentor Program was an incredible opportunity for
personal growth and development. I was given a platform
to express my interests and career goals, and to grow my
professional network.”
- Chad McCoy, Director of Financial Modeling
Informing and Engaging Teammates
In 2022, monthly video messages from CEO Palmer Proctor provided teammates with insight on the
company’s strategy and recognized significant accomplishments and milestones.
To further inform and engage teammates, we redesigned the home page of the Ameris Bank intranet,
The Mane Connection, which serves as a centralized hub for stories, updates, and news across Ameris.
Addressing survey feedback from teammates, the redesign simplified navigation and made it easier
for teammates to view more stories and updates at a glance and quickly locate the applications and
information they need. Ameris aligned intranet communications in 2022 to the “We’re With You” branding
message, sharing examples of teammates living our purpose and showing teammates how Ameris is
with them.
Innovating and
Enhancing Technology
A New Digital Banking Experience
Throughout 2022, cross-functional teams across Ameris, led by our technology team, laid the groundwork
to deploy a new online banking platform and mobile app in 2023. The updated digital experience will be
introduced in phases, and customers will enjoy a more modern look and feel and added capabilities to make
it even easier to bank with Ameris from any location or device.
A Constant Eye on Security
Protecting customer and teammate data and sensitive financial information remains a top priority for Ameris.
In 2022, we continued our strong protocols and investment in security and continued safeguarding data
while strengthening and modernizing our back-end technology and operations.
Teammates are our first line of defense, and in 2022, Ameris further heightened our emphasis on providing
security information to teammates. Our goal is to ensure our teammates know how to spot scams and report
suspicious emails.
To educate customers, Ameris featured fraud and cybersecurity articles in each edition of The Connection,
our monthly customer newsletter. We also delivered fraud protection emails for customers throughout the
year, reminding them of ways to keep their data secure and transact securely online and with payment apps.
“Ameris Bank has continued to focus on
corporate and customer security. While the
landscape for threats and potential scams
is constantly changing, Ameris Bank is
continuously improving and preparing for
the future.”
- Shane Anglin, Corporate Information Security Officer
6 | AMERIS BANCORP
Supporting the
Communities We Serve
Habitat for Humanity
Promoting Access to Home Ownership
In August 2022, Ameris introduced the Down Payment Grant Program, which offers eligible
first-time homebuyers up to $12,500 to put toward a mortgage down payment and closing costs.
Throughout 2022, Ameris helped more than 12,063 customers purchase a home. This includes: 6,540 first-time
homebuyers; 2,865 homebuyers served through Veterans Affairs (VA), Federal Housing Administration (FHA),
or United States Department of Agriculture (USDA) loan programs; and another 91 buyers supported by our
down payment assistance program.
Environmental Sustainability
Ameris published its second Corporate Social Responsibility Report (CSR) in 2022 to help demonstrate our
commitment to Environmental, Social, and Governance matters. Our CSR report will continue to provide more
disclosures around sustainability and climate-related matters. Ameris also engaged an energy consultant
to help us assess our carbon footprint with the goal of setting reduction targets. The project included the
development of conservation strategies for our buildings, such as an energy-efficient light-emitting diode
(LED) lighting retrofit of Ameris-owned locations. This project will be completed in 2023.
Committing to Communities
Ameris and our teammates have remained committed to donating funds and volunteering time to help
organizations doing good work in our communities. As one example, in 2022 we strengthened our partnership
with Callanwolde Fine Arts Center in Atlanta to launch an Art Scholars program. Throughout the school year
on teacher workdays and other days off, when many parents need childcare, this program provides children
with transportation to Callanwolde and a day full of enriching art-focused activities and meals, at no cost to
participating families.
We also continued our Helping Fight Hunger campaign for the twelth year. Ameris partnered with Feeding
America to expand the program and collect donations online, which resulted in the company raising enough
money to fund more than 100,000 meals for people in need. We also continued our support of the Georgia
HEART Program for the fifth year, donating $1,805,000 to 18 rural hospitals in May 2022. We look forward to
contributing to rural hospitals through the program again in 2023.
To encourage teammates to continue giving back to their communities, Ameris will offer a paid Volunteer Day
in 2023. This will help us partner with a variety of organizations and charities across our many markets.
Helping Teammates Impacted by Hurricane Ian
A powerful storm, Category 4 Hurricane Ian, hit many of our communities hard in September of 2022,
particularly in Florida. Ameris quickly jumped into action to assist teammates impacted, offering a 0% interest
loan for those needing home repairs and establishing a teammate relief fund through the Ameris Foundation,
which provided grants to teammates for storm-related financial hardships. In 2023 Ameris plans to extend the
teammate relief fund to ensure readiness for teammates with grants in times of need.
ANNUAL REPORT 2022 | 7
Board of Directors
James B. Miller Jr.
Chairman
H. Palmer Proctor Jr.
CEO and Vice Chairman
Ameris Bancorp and Ameris Bank
Rodney D. Bullard
CEO
The Same House
(Nonprofit)
R. Dale Ezzell
Wisecards Printing
(Print Services)
Leo J. Hill
Lead Independent Director
Ameris Bank and Transamerica
Mutual Funds
William I. Bowen Jr.
Bowen-Donaldson Home
for Funerals
(Funeral Services)
Wm. Millard Choate
Founder and Chairman
Choate Construction Company
(Construction)
Daniel B. Jeter
Standard Discount Corporation
(Consumer Finance)
Robert P. Lynch
Lynch Management Company
(Automobile Sales)
Elizabeth A. McCague
Chief Financial Officer
Jacksonville Ports Authority
(Transportation)
Gloria A. O’Neal
Retired Executive Vice President
Fidelity Bank
William H. Stern
Stern & Stern and Associates
(Real Estate)
Jimmy D. Veal
Beachview Event Rentals
& Design
(Event Services)
8 | AMERIS BANCORP
Executive Team
H. Palmer Proctor Jr.
Chief Executive Officer
Lawton E. Bassett III
Corporate Executive Vice
President, Chief Banking Officer
and Ameris Bank President
Ross L. Creasy
Corporate Executive Vice
President and Chief
Innovation Officer
Jon S. Edwards
Corporate Executive Vice
President and Chief
Credit Officer
James A. LaHaise
Corporate Executive Vice
President and Chief
Strategy Officer
Michael T. Pierson
Corporate Executive Vice
President and Chief
Governance Officer
Nicole S. Stokes, CPA
Corporate Executive Vice
President and Chief
Financial Officer
William D. McKendry
Corporate Executive Vice
President and Chief Risk Officer
Jody L. Spencer
Corporate Executive Vice
President and Chief Legal Officer
ANNUAL REPORT 2022 | 9
Community Boards
of Directors
Our Community Boards of Directors are an extension of our bank. They are leaders within our communities and
vital to our mission of growing banking relationships. We are honored to have their support, service and expertise.
Gainesville & Ocala, FL
Moultrie, GA
Albany, GA
Regional President:
Michael T. Lee
Market President:
Chris M. Misamore
Directors:
Reid E. Mills, Chairman
Bonny B. Dorough
Y. Duncan Moore Jr.
J. Austin Turner
Carolinas
Regional President:
H. Richard Sturm
Regional President:
Brian R. Parks
City President:
Michael Carnevale
Directors:
Thomas P. McIntosh,
Chairman
Adra B. Kennard
Breck A. Weingart
Director Emeritus:
James D. Salter
Jacksonville, FL
Market President:
Ryan A. Earwaker
Regional President:
Brian R. Parks
Directors:
Joseph P. Helow,
Chairman
Robert M. Bradley Jr.
Phillip H. Cury
John A. Delaney
Major B. Harding Jr.
Robert P. Lynch
J. Charles Wilson, CPA
Directors:
William H. Stern, Chairman
Kirkman Finlay, III
Edward G. McDonnell
William Weston J. Newton
Laurens C. Nicholson
A. Rae Phillips
Douglas, GA
Regional President:
Michael T. Lee
Market President:
David B. Batchelor
City President:
M. Shane Shook
Directors:
Kevin L. Gilliard,
Chairman
Faye H. Hennesy
Alfred Lott Jr.
Donnie H. Smith
10 | AMERIS BANCORP
Regional President:
Michael T. Lee
Market President:
David Buckridge
Directors:
Thomas W. Rowell,
Chairman
Thomas L. Estes, M.D.
R. Plenn Hunnicutt
Daniel B. Jeter
Lynn L. Jones Jr.
J. Mark Mobley Jr.
Director Emeritus:
Brooks Sheldon
Southeast Georgia Coast
Regional President:
Michael T. Lee
Market President:
Michael D. Hodges
City President Brunswick:
James B. Danowski
City President Hinesville:
James Rogers
Directors:
Jimmy D. Veal, Chairman
Michael L. Davis
Stephen V. Kinney
Directors Emeritus:
John W. McDill
Thomas I. Stafford Jr.
J. Thomas Whelchel
Community Boards
of Directors
Valdosta, GA
Regional President:
Michael T. Lee
Market President:
William W. Moore, III
Directors:
Charles E. Smith,
Chairman
Bart T. Mizell
M. Alan Wheeler
Directors Emeritus:
Doyle Weltzbarker
Henry C. Wortman
Vidalia, GA
Regional President:
Michael T. Lee
Market President:
David B. Batchelor
Directors:
Christopher A. Hopkins,
Chairman
Pollyann F. Martin
Britton J. McDade
Jeffery S. McLain
St. Augustine, FL
Regional President:
Brian R. Parks
Market President:
Cecil F. Gibson, III
Directors:
Mark F. Bailey Sr.,
Chairman
David W. Alban
T. Brooks Burkhardt
J. Joseph Hatin
Director Emeritus:
Melvin A. McQuaig
Tifton, GA
Regional President:
Michael T. Lee
Market President:
Joshua S. Bowen
Directors:
William I. Bowen Jr.,
Chairman
Austin L. Coarsey
Scott R. Fulp, D.D.S.
John Alan Lindsey
Wesley T. Paulk
Fortson B. Turner
Directors Emeritus:
J. Raymond Fulp
Loran A. Pate
ANNUAL REPORT 2022 | 11
Cautionary Note Regarding Forward-Looking Statements
This Annual Report contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe”,
“estimate”, “expect”, “intend”, “anticipate” and similar expressions and variations thereof identify certain of such forward-looking
statements, which speak only as of the dates which they were made. Ameris Bancorp undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned
that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers
are cautioned not to place undue reliance on these forward-looking statements. Please refer to Ameris Bancorp’s filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K, for a summary of important factors that may affect
Ameris Bancorp’s forward-looking statements.
ANNUAL REPORT 2022
FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2022, or
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
(Exact name of registrant as specified in its charter)
Georgia
(State of incorporation)
58-1456434
(IRS Employer ID No.)
3490 Piedmont Road N.E., Suite 1550, Atlanta, Georgia 30305
(Address of principal executive offices)
(404) 639-6500
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $1 per share
ABCB
Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☒ No ☐
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 ☐ No ☒
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☒
☐
Accelerated filer
Smaller reporting company
Emerging growth company
☐
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b))
by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b).
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange
Act). Yes ☐ No ☒
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 $2.63 billion.
As of February 17, 2023, the registrant had outstanding 69,385,050 shares of common stock, $1.00 par value per share.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for the 2023 Annual Meeting of Shareholders are incorporated into Part III hereof
by reference.
AMERIS BANCORP
TABLE OF CONTENTS
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Exhibit and Financial Statement Schedules
Form 10-K Summary
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16.
Page
5
17
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58
58
59
59
59
59
2
CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) and the documents incorporated by reference herein may contain
certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some
cases, forward-looking statements can be identified by the use of words such as “may,” “might,” “will,” “would,” “should,”
“could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “probable,” “potential,” “possible,” “target,”
“continue,” “look forward,” or “assume,” and words of similar import. Forward-looking statements are not historical facts but
instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently
uncertain and outside of management’s control. It is possible that actual results and events may differ, possibly materially, from
the anticipated results or events indicated in these forward-looking statements. Forward-looking statements are not guarantees
of future performance, and we caution you not to place undue reliance on these statements.
You should understand that important factors, including, but not limited to, the following, in addition to those described in Part
I, Item 1A., “Risk Factors,” and elsewhere in this Annual Report, as well as in the documents which are incorporated by
reference into this Annual Report, and those described from time to time in our future reports filed with the Securities and
Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), could cause
actual results to differ materially from those expressed in such forward-looking statements:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
the effects of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values
and liquidity of loan collateral, securities and interest-sensitive assets and liabilities;
the effects of future economic, business and market conditions and changes, including seasonality;
legislative and regulatory changes, including changes in banking, securities and tax laws, regulations and policies and
their application by our regulators;
changes in accounting rules, practices and interpretations;
changes in borrower credit risks and payment behaviors;
changes in the availability and cost of credit and capital in the financial markets;
changes in the prices, values and sales volumes of residential and commercial real estate;
the effects of concentrations in our loan portfolio;
our ability to resolve nonperforming assets;
the failure of assumptions and estimates underlying the establishment of reserves for possible credit losses and other
estimates and valuations;
changes in technology or products that may be more difficult, costly or less effective than anticipated;
the risks of any acquisitions, mergers or divestitures which we may undertake in the future, including, without
limitation, the related time and costs of implementing such transactions, integrating operations as part of these
transactions and possible failures to achieve expected gains, revenue growth, expense savings and/or other results from
such transactions;
the transition away from the London Inter-Bank Offered Rate ("LIBOR") toward a new interest rate benchmark and
the ability to successfully implement any new interest rate benchmark;
the effects of hurricanes, floods, tornados or other natural disasters, geopolitical events, acts of war or terrorism or
other hostilities, public health crises, pandemics or other catastrophic events beyond our control; and
adverse effects due to COVID-19 on us, including our business, financial position, liquidity and results of operations,
and on our customers, employees and business partners.
3
Our management believes the forward-looking statements about us are reasonable. However, you should not place undue
reliance on them. Any forward-looking statements in this Annual Report and the documents incorporated by reference herein
are not guarantees of future performance. They involve risks, uncertainties and assumptions, and actual results, developments
and business decisions may differ from those contemplated by those forward-looking statements, and such differences may be
material. Many of the factors that will determine these results are beyond our ability to control or predict. We disclaim any duty
to update any forward-looking statements, all of which are expressly qualified by the statements in this section.
4
As used in this Annual Report, the terms “we,” “us,” “our,” “Ameris” and the “Company” refer to Ameris Bancorp and its
subsidiaries (unless the context indicates another meaning).
PART I
ITEM 1. BUSINESS
OVERVIEW
We are a financial holding company whose business is conducted primarily through our wholly owned banking subsidiary,
Ameris Bank (the “Bank”), which provides a full range of banking services to its retail and commercial customers who are
primarily concentrated in select markets in Georgia, Alabama, Florida, North Carolina and South Carolina. The Company’s
executive office is located at 3490 Piedmont Road N.E., Suite 1550, Atlanta, Georgia 30305, our telephone number is (404)
639-6500 and our internet address is www.amerisbank.com. We operate 164 full-service domestic banking offices. We do not
operate in any foreign countries. At December 31, 2022, we had approximately $25.05 billion in total assets, $20.25 billion in
total loans, $19.46 billion in total deposits and $3.20 billion of shareholders’ equity. Our deposits are insured, up to applicable
limits, by the Federal Deposit Insurance Corporation (the “FDIC”).
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available free of charge on our website
at www.amerisbank.com as soon as reasonably practicable after we electronically file such material with the SEC. These
reports are also available without charge on the SEC’s website at www.sec.gov.
The Parent Company
Our primary business as a bank holding company is to manage the business and affairs of the Bank. As a bank holding
company, we perform certain shareholder and investor relations functions and seek to provide financial support, if necessary, to
the Bank.
Ameris Bank
Our principal subsidiary is the Bank, which is headquartered in Atlanta, Georgia and operates branches primarily concentrated
in select markets in Georgia, Alabama, Florida, North Carolina 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.
Strategy
We seek to increase our presence and grow the “Ameris” brand in the markets that we currently serve in Georgia, Alabama,
Florida, North Carolina and South Carolina and in neighboring communities that present attractive opportunities for
expansion. Management has pursued this objective through an acquisition-oriented growth strategy and a prudent operating
strategy. Our community banking philosophy emphasizes personalized service and building broad and deep customer
relationships, which has historically provided us with a substantial base of low cost core deposits. Our markets are managed by
senior
larger
competitors. 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.
level, experienced decision makers
that differentiates us from our
in a decentralized structure
We have maintained our focus on a long-term strategy of expanding and diversifying our franchise in terms of revenues,
profitability and asset size. Our growth over the past several years has been enhanced significantly through both organic growth
and acquisitions. We expect to continue to enhance our franchise through prudent acquisition activity when appropriate
opportunities arise, and we intend to continue to prioritize organic growth in our business lines as well.
Our most recent bank acquisition was of Fidelity Southern Corporation ("Fidelity"), which was completed in July 2019 and
which added $4.0 billion in deposits. In addition, in December 2021, the Bank acquired Balboa Capital Corporation
("Balboa"), a point of sale and direct online provider of lending solutions to small and mid-sized businesses nationwide.
5
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 generally enters into a commitment to sell these loans in
the secondary market. We have not made or participated in foreign, energy-related or subprime loans. In addition, the Company
does not regularly buy loan participations or portions of national credits but from time to time, may acquire balances subject to
participation agreements through acquisition. Approximately 1% of the Company’s loan portfolio was loan participations
purchased at December 31, 2022.
At December 31, 2022, our loan portfolio totaled approximately $20.25 billion, representing approximately 80.8% of our total
assets. For additional discussion of our loan portfolio, see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations – Loans.”
Commercial Real Estate Loans. This portion of our loan portfolio has grown significantly over the past few years and
represents the largest segment of our loan portfolio. Commercial and farmland real estate loans include loans secured by owner-
occupied commercial buildings for office, storage, retail, farmland and warehouse space. They also include non-owner occupied
commercial buildings such as leased retail and office space. These loans also include extensions for the 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, if any.
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 in the secondary 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 20- to 30-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, poultry producers, livestock producers and timber growers. Agricultural loans typically
involve seasonal balance fluctuations. 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 is guaranteed by the Farm Service Agency Guaranteed Loan Program.
Commercial and Industrial Loans. Generally, commercial and industrial loans consist of loans made primarily to
manufacturers, wholesalers and retailers of goods, service companies, municipalities and other industries. These loans are made
for acquisition, expansion, working capital and equipment financing and may be secured by 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. During 2021 and 2020, the
Company participated in the SBA's Paycheck Protection Program (the "PPP"), a temporary product under the SBA's 7(a) loan
program created under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The primary repayment
risk for commercial loans is the failure of the business due to economic or financial factors. The Company also originates,
administers and services commercial insurance premium finance loans made to borrowers throughout the United States.
Consumer Loans. Our consumer loans include home improvement, home equity, motor vehicle, loans secured by savings
accounts and personal credit lines. The terms of these loans typically range from 12 to 240 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.
6
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 and financing guide, which are reviewed annually and updated as
needed. Our lending policy requires, among other things, an analysis of the borrower's projected cash flow and ability to service
the debt. The loan policy provides that lending officers have sole authority to approve loans of various amounts commensurate
with their seniority, experience and needs within the market. Our local market presidents have discretion to approve loans in
varying principal amounts up to established limits, and our regional credit officers review and approve loans that exceed such
limits.
Individual lending authority is assigned by the Company’s Chief Credit Officer, as is the maximum limit of new extensions of
credit that may be approved in each market. These approval limits are reviewed annually by the Company and adjusted as
needed. All requests for extensions of credit in excess of any of these limits are reviewed by one of seven regional credit
officers. When the request for approval exceeds the authority level of the regional credit officer, the approval of the Company’s
Chief Credit Officer and/or the Company’s loan committee is required. All new loans or modifications to existing loans in
excess of $500,000 are reviewed monthly by the Company’s Credit Administration Department with the lender responsible for
the credit. In addition, our ongoing loan review program subjects the portfolio to sampling and objective review by our ongoing
internal loan review process which 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, our loan committee will approve making a loan outside of the market areas of the Bank,
provided the Bank has a prior relationship with the borrower. Our lending policy requires analysis of the borrower’s projected
cash flow and ability to service the debt.
The Bank has purchased loans outside of its market area. These include residential mortgage loan pools collateralized by
properties located outside our Southeast markets, specifically in California, Washington and Illinois, consumer installment
home improvement loans made to borrowers throughout the United States and commercial insurance premium finance loans
made to borrowers throughout the United States. These purchases were reviewed and approved by the Company's loan
committee.
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 and lending officers meet periodically to review all past due loans, the status of
large loans and certain other credit or economic related matters. Individual lending officers are responsible for collection of past
due amounts and monitoring any changes in the financial status of the borrowers. Loans that are serviced by others, such as
certain residential mortgage loans and consumer installment home improvement loans, are monitored by the Company’s credit
officers, although ultimate collection of past due amounts is the responsibility of the servicing agents.
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 management objectives. Under this policy, our Company may invest in U.S. Treasury obligations,
securities issued by U.S. government-sponsored agencies, state and municipal obligations, mortgage-backed securities,
corporate obligations, securities and satisfactorily-rated trust preferred obligations. Investments in our portfolio must satisfy
certain quality criteria. Our Company’s investments must be “investment-grade” as determined by a nationally recognized
investment rating service. Investment securities where the Company has determined a certain level of credit risk are
periodically reviewed to determine the financial condition of the issuer and to support the Company’s decision to continue
holding the security. 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. Traditionally, the Company has purchased and held investment securities with very high
levels of credit quality, favoring investments backed by direct or indirect guarantees of the U.S. government.
7
While our asset/liability management 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 ALCO 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 Board
of Directors each quarter. The written investment policy is reviewed annually by the Company’s Board of Directors and
updated as needed.
The Company’s securities are held in safekeeping accounts at approved 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.
Brokered deposits are deposits obtained by utilizing an outside broker that is paid a fee. The Bank utilizes brokered deposits to
accomplish several purposes, such as (i) acquiring a certain maturity and dollar amount without repricing the Bank’s current
customers which could increase or decrease the overall cost of deposits and (ii) 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 loans secured by real estate, including residential mortgage loans, home equity lines of credit and
commercial real estate loans. The Company maintains credit arrangements with various other financial institutions to purchase
federal funds. The Company participates in the Federal Reserve discount window borrowings program.
On September 28, 2020, the Company completed the public offering and sale of $110.0 million in aggregate principal amount
of its 3.875% Fixed-To-Floating Rate Subordinated Notes due 2030. The subordinated notes were sold to the public at par. The
subordinated notes will mature on October 1, 2030 and through September 30, 2025 will bear a fixed rate of interest of 3.875%
per annum. Beginning October 1, 2025, the interest rate on the subordinated notes resets quarterly to a floating rate per annum
equal to the then-current three-month SOFR plus 3.753%.
On December 6, 2019, the Company completed the public offering and sale of $120.0 million in aggregate principal amount of
its 4.25% Fixed-To-Floating Rate Subordinated Notes due 2029. The subordinated notes were sold to the public at par. The
subordinated notes will mature on December 15, 2029 and through December 14, 2024 will bear a fixed rate of interest of
4.25% per annum. Beginning December 15, 2024, the interest rate on the subordinated notes resets quarterly to a floating rate
per annum equal to the then-current three-month SOFR plus 2.94%.
On March 13, 2017, the Company completed the public offering and sale of $75.0 million in aggregate principal amount of its
5.75% Fixed-To-Floating Rate Subordinated Notes due 2027. The subordinated notes were sold to the public at par. The
subordinated notes will mature on March 15, 2027 and through March 14, 2022 bore a fixed rate of interest of 5.75% per
annum. Beginning March 15, 2022, the interest rate on the subordinated notes resets quarterly to a floating rate per annum equal
to the then-current three-month LIBOR plus 3.616%. In February 2023, the Company notified holders of its 5.75% Fixed-To-
Floating Rate Subordinated Notes due 2027 that the notes would be redeemed in full at the March 15, 2023 interest payment
date.
The Company has long-term subordinated deferrable interest debentures with a net book carrying value of $128.3 million as of
December 31, 2022. The majority of these trust preferred securities were assumed as liabilities in previous whole bank
acquisitions.
The Company also enters into repurchase agreements. These repurchase agreements are treated as short-term borrowings and
are reflected on the Company’s balance sheet as such.
8
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. While our select market areas in Georgia, Alabama, Florida, North Carolina and
South Carolina have experienced strong population growth in recent decades, intense market demands, national and local
economic pressures, including a rising interest rate environment, and increased customer awareness of product and service
differences among financial institutions have forced banks to diversify their services and become much more cost
effective. Over the past few years, our Bank has faced strong competition in attracting deposits at profitable levels. Competition
for deposits comes from other commercial banks, thrift institutions, savings banks, internet banks, credit unions, and brokerage
and investment banking firms. Interest rates, online banking capabilities, 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, mortgage companies, leasing companies and other institutional and non-traditional lenders. In
order to remain competitive, our Bank has varied interest rates and loan fees to some degree as well as increased the number
and complexity of services provided. We have not varied or altered our underwriting standards in any material respect in
response to competitor willingness to do so and in some markets have not been able to experience the growth in loans that we
would have preferred. 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.
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, including FinTech firms. While technological
innovation has been central to the development of the financial services industry and to our strategy, tech firms increasingly
compete directly with banks for a variety of financial product offerings. 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. Further, the industry continues to consolidate, which affects competition by eliminating some regional and local
institutions, while strengthening the franchise of acquirers. See “Supervision and Regulation” under this Item.
HUMAN CAPITAL
At Ameris, we consider our teammates to be our greatest strength. At December 31, 2022, the Company employed 2,847 full-
time-equivalent employees, primarily located in our core markets of Georgia, Alabama, Florida, North Carolina and South
Carolina.
We take pride in listening to our employees, welcoming unique perspectives, supporting personal and professional growth and
developing natural strengths. For example, each year the Company administers an employee engagement survey to gather
meaningful insights and data, which is used as we continue to make improvements at Ameris and build upon our strong culture.
The input obtained from these surveys helps the Company’s Board of Directors and executive officers to execute on initiatives
such as the Ameris Bank Foundation, leadership training and diversity and inclusion initiatives.
Effective and frequent communication is critical to supporting our growing culture and teammate needs and is carried out
through regular e-newsletters, executive announcements and bulletins, which provide access to information regarding Company
news, alerts and updates, as well as educational opportunities and programs.
Support and Benefits
Providing employees with meaningful, competitive and supportive benefits to care for their lives and families is a top priority
for the Company. We’re proud to offer a comprehensive benefits package that includes medical, dental, vision and life
insurance, paid time-off, 401(k) profit-sharing plan participation and an employee stock purchase plan. The Company’s 401(k)
plan matches 50% of each employee’s elective deferral amount, up to the first 6% of the contribution. Beginning January 1,
2023, the Company's 401(k) Plan match increased to 50% of each employee’s elective deferral amount, up to the first 8% of the
contribution.
The Company’s benefits programs also include access to a network of nearby providers with options for either in-person care or
virtual visits at any time. Our behavioral health benefit offers support for such issues as alcohol and drug use recovery,
medication management, coping with grief and loss, and depression, anxiety and stress management.
9
Personal and Professional Growth
At Ameris, our leaders develop action plans and provide mentorship to help employees reach their aspirations. Our teammates
are encouraged to share their goals and dreams, and we take pride in offering professional growth opportunities through our
robust learning and development initiatives.
Mentorship at all levels is encouraged throughout our organization, as it supports our culture of learning and commitment to our
teammates, new ideas and leadership development. Mentor Ameris is the Bank’s formal mentorship program, whereby
annually, high potential colleagues are identified as mentees and paired with a selected mentor at the Bank. A total of 26
mentees were selected to participate in the program in 2022, of which 40% were female and 28% were minorities. The program
is a nine-month commitment that is designed to encourage a lifelong mentee-mentor relationship.
Launched at the end of 2020, our Leadership Development Program is a self-paced, three-tiered program available to all
employees, with coursework specific to leading self, leading others and leading leaders. We believe that effective and
meaningful leadership development will further elevate the Company and support us in continuing to attract and retain top
talent. At the end of 2022, we had a total of 337 teammates who were enrolled in or completed the program, of which 72%
were female and 34% were minorities.
The development of our employees’ skills and knowledge is critical to the success of the Company. Our educational assistance
program, which provides for reimbursement of certain education expenses up to $5,250, encourages personal development
through formal education, such as a degree, licensing or certification, so that teammates can maintain and improve their skills or
knowledge related to their current job or foreseeable-future position at Ameris. The importance of having career development
discussions and guidance with employees is shared and reinforced during manager training sessions as well, as the Company
recognizes these discussions are critical to establishing pathways for career growth.
Diversity and Inclusion
Diversity, equity and inclusion represent an integral part of our strategic vision at Ameris. The Company is committed to
fostering an equitable work environment that seeks to ensure fair treatment, equality of opportunity, and fairness in access to
information and resources for all employees. We believe this is only possible in an environment built on respect and equal
dignity, and we believe inclusion builds a culture of belonging by actively inviting the contribution and participation of all
people.
As part of that commitment, the Bank appointed its first Diversity and Inclusion Officer in 2020 and established a Diversity
Task Force comprised of a diverse group of 19 teammates from across the Company. This group is dedicated to cultivating an
environment that supports our strategy to engage, recruit, develop, retain and advance a diverse team of talent, inclusively and
equitably. Leaders from this group have established employee resource groups which are meant to bring teammates together
from across the Company and offer strong networking opportunities and a forum to listen and to discuss and sponsor programs,
activities and empowering resources that foster diversity and inclusion education and awareness. Employee resource groups
currently
in banking, LGBTQIA+, veterans, BIPOC (Black, Indigenous and People of Color),
multigenerational, caregivers and mindfulness-mental health.
include women
As of December 31, 2022, females represent 66% of the Company’s employee population, and minorities represent 31%. In
addition, females represent 42% of the Company’s senior management staff, consisting of Vice Presidents and above, and
minorities represent 17%.
SUPERVISION AND REGULATION
General
We are extensively regulated, supervised and examined under federal and state law. Generally, these laws and regulations are
intended to protect our Bank’s depositors, the FDIC’s Deposit Insurance Fund (the “DIF”) and the broader banking system, and
not our shareholders. These laws and regulations cover all aspects of our business, including lending and collection practices,
treatment of our customers, safeguarding deposits, customer privacy and information security, capital structure, liquidity,
dividends and other capital distributions, and transactions with affiliates. Such laws and regulations directly and indirectly
affect key drivers of our profitability, including, for example, capital and liquidity, product offerings, risk management and
costs of compliance. In addition, changes to these laws and regulations, including as a result of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (the “Dodd-Frank Act”) and regulations promulgated thereunder, have had, and may
continue to have, a significant impact on our business, results of operations and financial condition. As a result, the extensive
10
laws and regulations to which we are subject and with which we must comply significantly impact our earnings, results of
operations, financial condition and competitive position.
Set forth below is a summary of certain provisions of key federal and state 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.
Supervision and Examination Authorities
As a bank holding company and financial holding company, Ameris is subject to regulation, supervision and enforcement by
the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Our Bank has a Georgia state charter and is
subject to regulation, supervision and enforcement by the Georgia Department of Banking and Finance (the “GDBF”). In
addition, as a state non-member bank, the Bank is subject to regulation, supervision and enforcement by the FDIC as the Bank’s
primary federal regulator. The Federal Reserve, the FDIC and the GDBF regularly examine the operations of the Company and
the 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.
In addition, the Consumer Financial Protection Bureau (the "CFPB") supervises the Bank with respect to consumer protection
laws and regulations.
Federal Law Restrictions on the Company’s Activities and Investments
As a registered bank holding company, we are subject to regulation under the Bank Holding Company Act (the “BHCA”) and
to the supervision, examination and reporting requirements of the Federal Reserve.
The BHCA and its implementing regulations prohibit bank holding companies from engaging in certain transactions without the
prior approval of the Federal Reserve, including (i) acquiring direct or indirect control of more than 5% of the voting shares of
any bank or bank holding company, (ii) acquiring all or substantially all of the assets of any bank and (iii) merging or
consolidating with any other bank holding company. In determining whether to approve such a transaction, the Federal Reserve
is required to consider a variety of factors, including the competitive impact of the transaction; the financial condition,
managerial resources and future prospects of the bank holding companies and banks involved; the convenience and needs of the
communities to be served, including the applicant’s record of performance under the Community Reinvestment Act; and the
effectiveness of the parties in combating money laundering activities. The Bank Merger Act imposes similar review and
approval requirements in connection with acquisitions and mergers involving banks. Additionally, under the Change in Bank
Control Act and the BHCA, a person or company that acquires control of a bank holding company or bank must obtain the non-
objection or approval of the Federal Reserve in advance of the acquisition. For a publicly-traded bank holding company such as
Ameris, control for purposes of the Change in Bank Control Act is presumed to exist if the acquirer will have 10% or more of
any class of the company’s voting securities.
The BHCA generally prohibits a bank holding company and its subsidiaries from engaging in, or acquiring control of a
company engaged in, activities other than managing or controlling banks, activities that the Federal Reserve has determined to
be closely related to banking and certain other permissible nonbanking activities. However, a bank holding company that is
qualified and has elected to be a financial holding company may engage in, or acquire control of a company engaged in, an
expanded set of financial activities. Effective August 24, 2000, Ameris has elected to be a financial holding company. As such,
we may engage in activities that are financial in nature or incidental or complementary to financial activities, including
insurance underwriting, securities underwriting and dealing, and making merchant banking investments in commercial and
financial companies, provided that we and the Bank continue to meet certain regulatory standards and comply with applicable
regulatory notice requirements. If we or the Bank ceased to be “well capitalized” or “well managed” under applicable
regulatory standards, or if the Bank received a rating of less than Satisfactory under the Community Reinvestment Act, our
ability to conduct these broader financial activities would be limited.
A provision of the BHCA known as the Volcker Rule limits our and the Bank’s ability to engage in proprietary trading (i.e.,
engaging as principal in any purchase or sale of one or more financial instruments) or to acquire or retain as principal any
ownership interest in or sponsor a covered fund, including private equity and hedge funds.
11
Source of Strength
As a bank holding company, we are expected to act as a source of financial strength for the Bank and to commit resources to
support the Bank. This support may be required at times when we might not be inclined to provide it. In addition, any capital
loans made by us to the Bank will be repaid only after the Bank’s deposits and various other obligations are repaid in full.
Payment of Dividends and Other Restrictions
Ameris is a legal entity separate and distinct from its subsidiaries. The principal source of our cash revenues is dividends from
the Bank. Federal and state law limit the Bank’s ability to pay dividends to Ameris.
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 bank’s Tier 1 capital (plus allowance for
loan losses); (ii) the aggregate amount of dividends declared or anticipated to be declared by the bank in the calendar year
exceeds 50% of its net profits for the previous calendar year; or (iii) the ratio of the bank’s Tier 1 capital to adjusted total assets
is less than 6%. As of December 31, 2022, there was approximately $186.5 million of retained earnings of our Bank available
for payment of cash dividends under applicable regulations without obtaining regulatory approval.
Under federal law, the ability of an insured depository institution such as the Bank to pay dividends or other distributions is
restricted or prohibited if (i) the institution would fail to satisfy the regulatory capital conservation buffer requirement following
the distribution, (ii) the distribution would cause the institution to become undercapitalized or (iii) the institution is in default of
its payment of deposit insurance assessments to the FDIC. In addition, the FDIC has the authority to prohibit the Bank from
engaging in an unsafe or unsound banking practice. The payment of dividends could, depending upon the financial condition of
the Bank, be deemed to constitute an unsafe or unsound practice in conducting the Bank’s business.
As a bank holding company, dividends paid by Ameris to its shareholders are subject to federal law limitations. The Federal
Reserve has adopted the policy that a bank holding company should pay cash dividends only to the extent that the company’s
net income for the past year is sufficient to cover the cash dividends and that the company’s rate of earning retention is
consistent with the company’s capital needs, asset quality and overall financial condition. In addition, a bank holding company
is required to consult with or notify the Federal Reserve prior to purchasing or redeeming its outstanding equity securities in
certain circumstances, including if the gross consideration for the purchase or redemption, when aggregated with the net
consideration paid by the company for all such purchases or redemptions during the preceding 12 months, is equal to 10% or
more of the company's consolidated net worth. A bank holding company that is well-capitalized, well-managed and not the
subject of any unresolved supervisory issues is exempt from this notice requirement.
Capital Adequacy
Bank holding companies and banks are required to maintain minimum regulatory capital ratios imposed under both federal and
state law. The Federal Reserve and the FDIC, the primary regulators of Ameris and the Bank, respectively, have adopted
substantially similar regulatory capital frameworks, which use both risk-based and leverage-based measures of capital
adequacy. Under these frameworks, Ameris and the Bank must each maintain a common equity Tier 1 capital to total risk-
weighted assets ratio of at least 4.5%, a Tier 1 capital to total risk-weighted assets ratio of at least 6%, a total capital to total
risk-weighted assets ratio of at least 8% and a leverage ratio of Tier 1 capital to average total consolidated assets of at least 4%.
Ameris and the Bank are also required to maintain a capital conservation buffer of common equity Tier 1 capital of at least
2.5% of risk-weighted assets in addition to the minimum risk-based capital ratios in order to avoid certain restrictions on capital
distributions and discretionary bonus payments.
Under the capital rules, common equity Tier 1 capital generally includes certain common stock instruments (plus any related
surplus), retained earnings and certain minority interests in consolidated subsidiaries (subject to certain limitations). Additional
Tier 1 capital generally includes noncumulative perpetual preferred stock (plus any related surplus) and certain minority
interests in consolidated subsidiaries (subject to certain limitations). Tier 2 capital generally includes certain subordinated debt
(plus related surplus), certain minority interests in consolidated subsidiaries (subject to certain limitations) and a portion of the
allowance for credit losses (“ACL”). Common equity tier 1 capital, additional Tier 1 capital and Tier 2 capital are each subject
to various regulatory deductions and adjustments. In general, the risk-based capital standards are designed to make regulatory
capital requirements sensitive to differences in risk profile by risk weighting assets and off-balance-sheet exposures based on
risk categories.
Failure to meet these capital requirements could subject Ameris and the Bank to a variety of enforcement actions, including the
issuance of a capital directive, the termination of deposit insurance by the FDIC and certain other restrictions on our business.
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In addition, under the FDIC’s “prompt corrective action” framework, the FDIC may impose various restrictions, including
limitations on growth and the payment of dividends, if the Bank becomes undercapitalized. Under this framework, the Bank is
considered to be “well capitalized” if it has a common equity Tier 1 risk-based capital ratio of 6.5% or greater, a Tier 1 risk-
based capital ratio of 8% or greater, a total risk-based capital ratio of 10% 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.
The Federal Deposit Insurance Act prohibits an insured bank from accepting brokered deposits or offering interest rates on any
deposits significantly higher than the prevailing rate in the bank’s normal market area or nationally (depending upon where the
deposits are solicited) unless it is “well-capitalized,” or is “adequately capitalized” and has received a waiver from the FDIC. A
bank that is “adequately capitalized” and that accepts brokered deposits under a waiver from the FDIC may not pay an interest
rate on any deposit in excess of 75 basis points over certain prevailing market rates. There are no such restrictions on a bank
that is “well-capitalized.”
At December 31, 2022, the Company exceeded its minimum capital requirements, inclusive of the capital conservation buffer,
on a consolidated basis with common equity Tier 1 capital, Tier 1 capital and total capital equal to 9.86%, 9.86% and 12.90% of
its total risk-weighted assets, respectively, and a Tier 1 leverage ratio of 9.36%. At December 31, 2022, the Bank exceeded its
minimum capital requirements, inclusive of the capital conservation buffer, with common equity Tier 1 capital, Tier 1 capital
and total capital equal to 11.12%, 11.12% and 12.28% of its total risk-weighted assets, respectively, and a Tier 1 leverage ratio
of 10.56%, and was “well-capitalized” for prompt corrective action purposes based on the ratios and guidelines described
above.
Under a December 2018 final rule, banking organizations may elect to phase in the regulatory capital effects of the current
expected credit losses (“CECL”) model, the new accounting standard for credit losses, over three years. On March 27, 2020, the
CARES Act was signed into law and includes a provision that permits financial institutions to defer temporarily the use of
CECL. In a related action, the joint federal bank regulatory agencies issued an interim final rule effective March 31, 2020 that
allows banking organizations that implemented CECL in 2020 to elect to mitigate the effects of the CECL accounting standard
on their regulatory capital for two years. This two-year delay is in addition to the three-year transition period that the agencies
had already made available in December 2018. Ameris and the Bank elected to defer the regulatory capital effects of CECL in
accordance with the interim final rule and not to apply the deferral of CECL available under the CARES Act. As a result, the
effects of CECL on Ameris’s and the Bank’s regulatory capital were delayed through 2021 and now will be phased-in over a
three-year period from January 1, 2022 through December 31, 2024. Under the March 31, 2020 interim final rule, the amount of
adjustments to regulatory capital deferred until the phase-in period includes both the initial impact of a banking organization’s
adoption of CECL at January 1, 2020 and 25% of subsequent changes in its allowance for credit losses during each quarter of
the two-year period ended December 31, 2021.
Transactions with Affiliates and Insiders, Tying Arrangements and Lending Limits
The Bank is subject to certain restrictions in its dealings with Ameris and its affiliates. Transactions between banks and any
affiliate are governed by Sections 23A and 23B of the Federal Reserve Act. An affiliate of a bank typically is any company or
entity that controls or is under common control with the bank, including the bank’s parent holding company and non-bank
subsidiaries of that holding company. Some but not all subsidiaries of a bank may be exempt from the definition of an affiliate.
Generally, Sections 23A and 23B (i) limit the extent to which the bank or its subsidiaries may engage in “covered transactions”
with any one affiliate to an amount equal to 10% of the bank’s capital stock and surplus, and limit the aggregate of all such
transactions with all affiliates to an amount equal to 20% of such capital stock and surplus, and (ii) require that all such
transactions be on terms substantially the same, or at least as favorable to the bank or subsidiary, as those that would be
provided to a non-affiliate. The term “covered transaction” includes the making of a loan to an affiliate, the purchase of assets
from an affiliate, the issuance of a guarantee on behalf of an affiliate and several other types of transactions. Extensions of
credit to an affiliate usually must be over-collateralized.
Under section 22 of the Federal Reserve Act, as implemented by the Federal Reserve’s Regulation O, restrictions also apply to
extensions of credit by a bank to its executive officers, directors, principal shareholders, and their related interests, and to
similar individuals at the holding company or affiliates. In general, such extensions of credit (i) may not exceed certain dollar
limitations, (ii) must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with third parties and (iii) must not involve more than the normal risk of repayment or present
other unfavorable features. Certain extensions of credit to these insiders also require the approval of the bank’s board of
directors. Additionally, the Federal Deposit Insurance Act and Georgia law limit asset sales and purchases between a bank and
its insiders.
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Under anti-tying rules of federal law, a bank may not extend credit, lease, sell property or furnish any service or fix or vary the
consideration for them on the condition that (i) the customer obtain or provide some additional credit, property or service from
or to the bank or its holding company or their subsidiaries (other than those related to and usually provided in connection with a
loan, discount, deposit or trust service) or (ii) the customer not obtain some other credit, property or service from a competitor,
except to the extent reasonable conditions are imposed to assure the soundness of the credit extended. The federal banking
agencies have, however, allowed banks to offer combined-balance products and otherwise to offer more favorable terms if a
customer obtains two or more traditional bank products. The law authorizes the Federal Reserve to grant additional exceptions
by regulation or order.
Under Georgia law, a state bank is generally prohibited from making loans, having obligations or having credit exposure as a
counterparty in a derivative transaction to any one borrower in an amount exceeding 15% of the bank’s statutory capital base,
or 25% of the bank’s statutory capital base if the entire amount is secured by good collateral or other ample security (as defined
by law).
Reserves
Pursuant to regulations of the Federal Reserve, an insured depository institution must maintain reserves against its transaction
accounts. Because required reserves generally must be maintained in the form of vault cash, with a pass-through correspondent
bank, or in the institution’s account at a Federal Reserve Bank, the effect of the reserve requirement may be to reduce the
amount of an institution’s assets available for lending or investment. During 2020, in response to the COVID-19 pandemic, the
Federal Reserve reduced all reserve requirement ratios to zero. The Federal Reserve indicated that it may adjust reserve
requirement ratios in the future if conditions warrant.
FDIC Insurance Assessments
The Bank’s deposits are insured to the maximum extent permitted by the DIF. The Bank is required to pay quarterly premiums,
known as assessments, for this deposit insurance coverage. The FDIC uses a risk-based assessment system that imposes
insurance premiums as determined by multiplying an insured bank’s assessment base by its assessment rate. A bank’s deposit
insurance assessment base is generally equal to its total assets minus its average tangible equity during the assessment period.
The Bank’s regular assessments are determined within a range of base assessment rates based in part on the Bank’s CAMELS
composite rating, taking into account other factors and adjustments. The CAMELS rating system is a supervisory rating system
developed to classify a bank’s overall condition by taking into account capital adequacy, assets, management capability,
earnings, liquidity and sensitivity to market and interest rate risk. The methodology that the FDIC uses to calculate assessment
amounts is also based on the FDIC’s designated reserve ratio, which is currently 2%. Under the current methodology, the
Bank’s assessment rates are based on an initial base assessment rate of 3 to 30 cents per $100 of insured deposits, subject to
certain adjustments, and may range from 1.5 to 40 cents after applying adjustments. Beginning with the first quarterly
assessment period of 2023, the Bank’s assessment rates will be based on an initial base assessment rate of 5 to 32 cents per
$100 of insured deposits, subject to certain adjustments, and may range from 2.5 to 42 cents after applying adjustments. These
elevated rates will remain in effect until the designated reserve ratio meets or exceeds 2%, absent further FDIC board action.
The FDIC may terminate the deposit insurance of any insured depository institution, including the Bank, if the FDIC
determines after a hearing that the institution has engaged or is engaging in unsafe or unsound banking practices, is in an unsafe
or unsound condition to continue operations or has violated any applicable law, regulation or order or any condition imposed by
an agreement with the FDIC. The FDIC also may suspend deposit insurance temporarily during the hearing process for the
permanent termination of insurance if the institution has no tangible capital. Management is not aware of any existing
circumstances that would result in termination of the Bank’s deposit insurance.
Branching
The Bank has branch offices in Alabama, Florida, Georgia, North Carolina and South Carolina. Current federal law authorizes
interstate acquisitions of banks and bank holding companies without geographic limitation, so long as the acquirer satisfies
certain conditions, including that it is “well capitalized” and “well managed.” Furthermore, a “well capitalized” and “well
managed” bank with its main office in one state is generally authorized to merge with a bank with its main office in another
state, subject to certain deposit-percentage limitations, aging requirements and other restrictions. 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.
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Community Reinvestment Act
The Community Reinvestment Act (the “CRA”) requires federal bank regulatory agencies to encourage financial institutions to
meet the credit needs of low- and moderate-income borrowers in their local communities. The agencies periodically examine
the CRA performance of each of the institutions for which they are the primary federal regulator and assign one of four ratings:
Outstanding; Satisfactory; Needs to Improve; or Substantial Noncompliance. In order for an insured depository institution and
its parent holding company to take advantage of certain regulatory benefits, such as expedited processing of applications and
the ability of the holding company to engage in new financial activities, the insured depository institution must maintain a
rating of Outstanding or Satisfactory. An institution’s size and business strategy determines the type of examination that it will
receive. The FDIC evaluates the Bank as a large, retail-oriented institution and applies performance-based lending, investment
and service tests. In its most recent CRA evaluation, as of August 26, 2019, the Bank was rated Satisfactory under the CRA.
Debit Interchange Fee Limitations
Under the Durbin Amendment to the Dodd-Frank Act and the Federal Reserve’s implementing regulations, the debit card
interchange fee that the Bank charges merchants must be reasonable and proportional to the cost of clearing the transaction. The
maximum permissible interchange fee is capped at the sum of $0.21 plus five basis points of the transaction value for many
types of debit interchange transactions. The Bank may also recover $0.01 per transaction for fraud prevention purposes if it
complies with certain fraud-related requirements. The Federal Reserve also has established rules governing routing and
exclusivity that require debit card issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid
product.
Consumer Protection Laws
The Bank is subject to a number of federal and state laws designed to protect customers and promote lending to various sectors
of the economy and population. These consumer protection laws apply to a broad range of our activities and to various aspects
of our business, and include laws relating to interest rates, fair lending, disclosures of credit terms and estimated transaction
costs to consumer borrowers, debt collection practices, the use of and the provision of information to consumer reporting
agencies, and the prohibition of unfair, deceptive or abusive acts or practices in connection with the offer, sale or provision of
consumer financial products and services. 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 the Fair Debt
Collection Practices Act, as well as their state law counterparts. At the federal level, most consumer financial protection laws
are administered by the CFPB, which supervises the Bank. Among other things, the CFPB has promulgated many mortgage-
related rules, including rules related to the ability to repay and qualified mortgage standards, mortgage servicing standards, loan
originator compensation standards, high-cost mortgage requirements, Home Mortgage Disclosure Act requirements and
appraisal and escrow standards for higher priced mortgages. The mortgage-related final rules issued by the CFPB have
materially restructured the origination, servicing and securitization of residential mortgages in the United States, and have
imposed significant compliance obligations and costs on mortgage lenders, including the Bank.
Violations of applicable consumer protection laws can result in significant potential liability, including actual damages,
restitution and injunctive relief, from litigation brought by customers, state attorneys general and other plaintiffs, as well as
enforcement actions by banking regulators and reputational harm.
Financial Privacy and Cybersecurity
Under the Gramm-Leach-Bliley Act, 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. The Gramm-Leach-Bliley Act also provides that, with 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.
The federal banking agencies pay close attention to the cybersecurity practices of banks, and the agencies include review of an
institution’s information technology and its ability to thwart cyberattacks in their examinations. An institution’s failure to have
adequate cybersecurity safeguards in place can result in supervisory criticism, monetary penalties and reputational harm.
In November 2021, the FDIC, the Federal Reserve and the Office of the Comptroller of the Currency issued a joint final rule to
establish computer-security incident notification requirements for banking organizations and their bank service providers.
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Banks and their service providers must comply with this rule as of May 1, 2022. Under this rule, a bank must report certain
computer-security incidents to its primary federal regulatory as soon as possible and no later than 36 hours after the bank
determines that an incident requiring notification has occurred. In addition, bank service providers must notify any affected
banking organization customer as soon as possible when the bank service provider determines that it has experienced a
computer-security incident that has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade,
services provided to such banking organization for a period of four or more hours.
Anti-Money Laundering and Sanctions Compliance
The Bank Secrecy Act, the USA PATRIOT Act of 2001 and other federal laws and regulations require financial institutions,
among other things, to institute and maintain an effective anti-money laundering (“AML”) program. Under these laws and
regulations, the Bank is required to take steps to prevent the use of the Bank to facilitate the flow of illegal or illicit money, to
report large currency transactions and to file suspicious activity reports. In addition, the Bank is required to develop and
implement a comprehensive AML compliance program, as well as have in place appropriate “know your customer” policies
and procedures.
The federal Financial Crimes Enforcement Network of the Department of the Treasury, in addition to other bank regulatory
agencies, is authorized to impose significant civil money penalties for violations of these requirements and has recently engaged
in coordinated enforcement efforts with state and federal banking regulators, in addition to the U.S. Department of Justice, the
CFPB, the Drug Enforcement Administration and the Internal Revenue Service. Violations of AML requirements can also lead
to criminal penalties. In addition, the federal banking agencies are required to consider the effectiveness of a financial
institution’s AML activities when reviewing proposed bank mergers and bank holding company acquisitions.
The Office of Foreign Assets Control (“OFAC”) is responsible for administering economic sanctions that affect transactions
with designated foreign countries, foreign nationals and others, as defined by various Executive Orders and in various pieces of
legislation. OFAC publishes lists of persons, organizations and countries suspected of aiding, harboring or engaging in terrorist
acts. If we or the Bank find a name on any transaction, account or wire transfer that is on an OFAC list, we or the Bank must
freeze or block such account or transaction, file a suspicious activity report and notify the appropriate authorities. Failure to
comply with these sanctions could have serious legal and reputational consequences.
We and the Bank maintain policies, procedures and other internal controls designed to comply with these AML requirements
and sanctions programs.
Federal Home Loan Bank System
Our Company has a correspondent relationship with the Federal Home Loan Bank (“FHLB”) of Atlanta, which is one of 12
regional FHLBs that administer the home financing credit function of banking institutions. Each FHLB is funded primarily
from proceeds derived from the sale of consolidated obligations of the FHLB system and makes advances to members in
accordance with policies and procedures established by the Board of Directors of the FHLB and subject to the oversight of the
Federal Housing Finance Agency. All advances from an FHLB are required to be fully secured by sufficient collateral as
determined by the FHLB.
The FHLB of Atlanta offers 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 the FHLB of Atlanta in interest-bearing accounts.
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.
Commercial Real Estate Concentrations
Under guidance issued by the federal banking regulators, a financial institution will be considered to have a significant
commercial real estate (“CRE”) concentration risk, and will be subject to enhanced supervisory expectations to manage that
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risk, if (i) total reported loans for construction, land development and other land (“C&D”) represent 100% or more of the
institution’s total capital or (ii) total CRE loans represent 300% or more of the institution’s total capital and the outstanding
balance of the institution’s CRE loan portfolio has increased by 50% or more during the prior 36 months.
As of December 31, 2022, our C&D concentration as a percentage of capital totaled 79.4% and our CRE concentration, net of
owner-occupied loans, as a percentage of capital totaled 291.7%.
COVID-19 Relief Measures
Congress, various federal agencies and state governments have taken measures to address the economic and social
consequences of the COVID-19 pandemic, including the enactment on March 27, 2020 of the CARES Act, which, among other
things, established various initiatives to protect individuals, businesses and local economies in an effort to lessen the impact of
the pandemic on consumers and businesses. These initiatives included the PPP, relief with respect to troubled debt
restructurings (“TDRs”), mortgage forbearance and extended unemployment benefits. The Consolidated Appropriations Act,
2021, enacted on December 27, 2020, extended some of these relief provisions in certain respects.
The PPP permitted small businesses, sole proprietorships, independent contractors and self-employed individuals to apply for
loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous
limitations and eligibility criteria. The CARES Act appropriated $349 billion to fund the PPP, and Congress appropriated an
additional $320 billion to the PPP on April 24, 2020, and amended the PPP on June 5, 2020 to make the terms of the PPP loans
and loan forgiveness more flexible. Additionally, the Consolidated Appropriations Act, 2021 appropriated a further $284 billion
to the PPP and permitted certain PPP borrowers to make “second draw” loans. From April to August 2020, we accepted PPP
applications and originated loans to qualified small businesses under this program. Consistent with the terms of the PPP, these
loans carry an interest rate of 1% and are 100% guaranteed by the SBA. At December 31, 2022, the Company’s outstanding
PPP loans were not material. The Company’s participation in this program could subject us to increased governmental and
regulatory scrutiny, negative publicity or increased exposure to litigation, which could increase our operational, legal and
compliance costs and damage our reputation.
The CARES Act and related guidance from the federal banking agencies provide financial institutions the option to temporarily
suspend requirements under GAAP related to classification of certain loan modifications as TDRs, to account for the current
and anticipated effects of COVID-19. The CARES Act, as amended by the Consolidated Appropriations Act, 2021, specified
that COVID-19 related loan modifications executed between March 1, 2020 and the earlier of (i) 60 days after the date of
termination of the national emergency declared by the President and (ii) January 1, 2022, on loans that were current as of
December 31, 2019 are not TDRs. Additionally, under guidance from the federal banking agencies, other short-term
modifications made on a good faith basis in response to COVID-19 to borrowers that were current prior to any relief are not
TDRs under ASC Subtopic 310-40, “Troubled Debt Restructuring by Creditors.” These modifications include short-term (e.g.,
up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms or delays in payment
that are insignificant. Throughout 2020 and 2021, we granted loan modifications to our customers in the form of maturity
extensions, payment deferrals and forbearance. The temporary relief expired on January 1, 2022 and no further modifications
were made under the CARES Act after such date.
The CARES Act also includes a range of other provisions designed to support the U.S. economy and mitigate the impact of
COVID-19 on financial institutions and their customers. For example, provisions of the CARES Act require mortgage servicers
to grant, on a borrower’s request, forbearance for up to 180 days (which can be extended for an additional 180 days) on a
federally-backed single-family mortgage loan or forbearance up to 30 days (which can be extended for two additional 30-day
periods) on a federally-backed multifamily mortgage loan when the borrower experiences financial hardship due to the
COVID-19 pandemic.
On January 30, 2023, the Biden Administration announced its intent to end the national emergency declaration related to the
COVID-19 pandemic on May 11, 2023, which will also result in the termination of previously enacted COVID-19 relief
measures.
ITEM 1A. RISK FACTORS
An investment in our Common Stock is subject to risks inherent in our 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
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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 or uncertainties 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 could decline significantly, and
you could lose all or part of your investment.
RISKS RELATED TO OUR COMPANY AND INDUSTRY
Our revenues are highly correlated to market interest rates.
Our assets and liabilities are primarily monetary in nature, and as a result, we are subject to significant risks tied to changes in
interest rates. Our ability to operate profitably is largely dependent upon net interest income. In 2022, net interest income made
up 73.8% of our revenue. Unexpected movement in interest rates, that may or may not change the slope of the current yield
curve, could cause our net interest margins to decrease, subsequently decreasing net interest income. In addition, such changes
could materially adversely affect the valuation of our assets and liabilities.
At present our one-year interest rate sensitivity position is asset sensitive, such that a gradual increase in interest rates during the
next twelve months should have a positive impact on net interest income during that period. However, as with most financial
institutions, our results of operations are affected by changes in interest rates and our ability to manage this risk. The difference
between interest rates charged on interest-earning assets and interest rates paid on interest-bearing liabilities may be affected by
changes in market interest rates, changes in relationships between interest rate indices, and changes in the relationships between
long-term and short-term market interest rates. In addition, the mix of assets and liabilities could change as varying levels of
market interest rates might present our customer base with more attractive options.
Certain changes in interest rates, inflation, deflation or the financial markets could affect demand for our products and our
ability to deliver products efficiently.
Loan originations, and potentially loan revenues, could be materially adversely impacted by sharply rising interest rates.
Conversely, sharply falling rates could increase prepayments within our securities portfolio lowering interest earnings from
those investments. Rising inflation could cause our operating costs related to salaries and benefits, technology and supplies to
increase at a faster pace than our revenues. Recently, inflation has been at a higher level than experienced in many decades,
which has increased costs and impacted operations for the Company and many of its customers.
The fair market value of our securities portfolio and the investment income from these securities also fluctuate depending on
general economic and market conditions. In addition, actual net investment income and/or cash flows from investments that
carry prepayment risk, such as mortgage-backed and other asset-backed securities, may differ from those anticipated at the time
of investment as a result of interest rate fluctuations.
Cyberattacks or other security breaches could have a material adverse effect on our business.
In the normal course of business, we collect, process and retain sensitive and confidential information regarding our customers.
We also have arrangements in place with other third parties through which we share and receive information about their
customers who are or may become our customers. Although we devote significant resources and management focus to ensuring
the integrity of our systems through information security and business continuity programs, our facilities and systems, and those
of third-party service providers, are vulnerable to external or internal security breaches, acts of vandalism, computer viruses,
misplaced or lost data, programming or human errors or other similar events. Additionally, information security may be
adversely affected by the current or anticipated impact of military conflict, including escalating military tension between Russia
and Ukraine, terrorism or other geopolitical events.
Information security risks for financial institutions like us continue to increase in part because of new technologies, the use of
the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business
transactions and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and
others. In addition to cyberattacks or other security breaches involving the theft of sensitive and confidential information,
hackers continue to engage in attacks against financial institutions. These attacks include denial of service attacks designed to
disrupt external customer facing services and ransomware attacks designed to deny organizations access to key internal
resources or systems. We are not able to anticipate or implement effective preventive measures against all security breaches of
these types, especially because the techniques used change frequently and because attacks can originate from a wide variety of
sources. We employ detection and response mechanisms designed to contain and mitigate security incidents, but early detection
may be thwarted by sophisticated attacks and malware designed to avoid detection.
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We rely heavily on communications and information systems to conduct our business. Accordingly, we also face risks related to
cyberattacks and other security breaches in connection with our own and third-party systems, processes and data, including
credit and debit card transactions that typically involve the transmission of sensitive information regarding our customers
through various third parties, including merchant acquiring banks, payment processors, payment card networks (e.g., Visa,
MasterCard) and our processors. Some of these parties have in the past been the target of security breaches and cyberattacks,
and because the transactions involve third parties and environments such as the point of sale that we do not control or secure,
future security breaches or cyberattacks affecting any of these third parties could impact us through no fault of our own, and in
some cases we may have exposure and suffer losses for breaches or attacks relating to them. We also rely on numerous other
third-party service providers to conduct other aspects of our business operations and face similar risks relating to them. While
we conduct security reviews on these third parties, we cannot be sure that their information security protocols are sufficient to
withstand a cyberattack or other security breach.
The access by unauthorized persons to, or the improper disclosure by us of, confidential information regarding our customers or
our own proprietary information, software, methodologies and business secrets could result in significant legal and financial
exposure, supervisory liability, damage to our reputation or a loss of confidence in the security of our systems, products and
services, which could have a material adverse effect on our business, financial condition or results of operations. In addition,
our industry continues to experience well-publicized attacks or breaches affecting others in our industry that have heightened
concern by consumers generally about the security of using credit and debit cards, which have caused some consumers,
including our customers, to use our credit and debit cards less in favor of alternative methods of payment and has led to
increased regulatory focus on, and potentially new regulations relating to, these methods. Further cyberattacks or other breaches
in the future, whether affecting us or others, could intensify consumer concern and regulatory focus and result in reduced use of
our cards, increased costs and regulatory penalties, all of which could have a material adverse effect on our business. To the
extent we are involved in any future cyberattacks or other breaches, our brand and reputation could be affected, which could
also have a material adverse effect on our business, financial condition or results of operations.
The COVID-19 pandemic continues to affect us and our customers, employees and third-party service providers, and while
the adverse impacts on our business, financial position, operations and prospects have dissipated, they have not been
completely eliminated.
During 2020, as a result of the uncertainty, volatility and disruption in financial markets and in governmental, commercial and
consumer activity caused by the COVID-19 pandemic, our business and consumer customers experienced varying degrees of
financial distress, adversely affecting their ability to timely pay interest and principal on their loans and the value of the
collateral securing their obligations. While all our branch locations are currently open and operating during normal business
hours, in order to protect the health of our customers and employees, we continue to take additional precautions within our
branch locations, including enhanced cleaning procedures. These actions in response to the COVID-19 pandemic, and similar
actions by our vendors and business partners, have not materially impaired our ability to support our employees, conduct our
business or serve our customers, but there is no assurance that these actions will be sufficient to successfully mitigate the risks
presented by COVID-19 or that our ability to operate will not be materially affected going forward. For instance, business
operations may be disrupted if key personnel or significant portions of employees are unable to work effectively, including
because of illness, quarantines, government actions or other restrictions in connection with the COVID-19 pandemic.
Similarly, if any of our vendors or business partners become unable to continue to provide their products and services which we
rely upon to maintain our day-to-day operations, our ability to serve our customers could be impacted.
Although the aforementioned risks have much dissipated compared to prior periods, they have not been completely eliminated.
The risks of new variants and new outbreaks continue to exist. Given the ongoing and dynamic nature of the circumstances, it
is not possible to accurately predict the extent, severity or duration of these conditions or when normal economic and operating
conditions will fully resume. For this reason, the extent to which the COVID-19 pandemic affects our business, operations and
financial condition, as well as our regulatory capital and liquidity ratios and credit ratings, is highly uncertain and unpredictable
and depends on, among other things, new information that may emerge concerning the scope, duration and severity of the
COVID-19 pandemic, actions taken by governmental authorities and other parties in response to the pandemic, the scale of
distribution and public acceptance of the vaccines for COVID-19 and the effectiveness of such vaccines in stemming or
stopping the spread of COVID-19.
Our concentration of real estate loans subjects the Company to risks that could materially adversely affect our results of
operations and financial condition.
The majority of our loan portfolio is secured by real estate. Declines in real estate values could cause the revenue stream from
those loans to come under stress and require additional provision to the allowance for loan losses. Our ability to dispose of
foreclosed real estate and resolve credit quality issues is dependent upon real estate activity and real estate prices, both of which
can become highly unpredictable.
19
Greater loan losses than expected may materially adversely affect our earnings.
We, as lenders, are exposed to the risk that our customers will be unable to repay their loans in accordance with their terms and
that any collateral securing the payment of their loans may not be sufficient to assure repayment. Credit losses are inherent in
the business of making loans and could have a material adverse effect on our operating results. Our credit risk with respect to
our real estate and construction loan portfolio will relate principally to the creditworthiness of business entities and the value of
the real estate serving as security for the repayment of loans. Our credit risk with respect to our commercial loan portfolio will
relate principally to the general creditworthiness of businesses within our local markets. Our credit risk with respect to our
consumer loan portfolio will relate principally to the general creditworthiness of individuals.
We make various assumptions and judgments about the collectability of our loan portfolio and provide an allowance for
estimated loan losses based on a number of factors. We believe that our current allowance for loan losses is adequate. However,
if our assumptions or judgments prove to be incorrect, the allowance for loan losses may not be sufficient to cover actual loan
losses. We may have to increase our allowance in the future in response to the request of one of our primary banking regulators,
to adjust for changing conditions and assumptions, or as a result of any deterioration in the quality of our loan portfolio. The
actual amount of future provisions for loan losses cannot be determined at this time and may vary from the amounts of past
provisions.
Our business is highly correlated to local economic conditions in a geographically concentrated part of the United States.
Unlike larger organizations that are more geographically diversified, our banking offices are primarily concentrated in select
markets in Georgia, Alabama, Florida, North Carolina and South Carolina. As a result of this geographic concentration, our
financial results depend largely upon economic conditions in these market areas. Deterioration in economic conditions in the
markets we serve could result in one or more of the following:
•
•
•
•
an increase in loan delinquencies;
an increase in problem assets and foreclosures;
a decrease in the demand for our products and services; and
a decrease in the value of collateral for loans, especially real estate, in turn reducing customers’ borrowing power, the
value of assets associated with problem loans and collateral coverage.
We face additional risks due to our mortgage banking activities that could negatively impact net income and profitability.
We sell the majority of the mortgage loans that we originate. The sale of these loans generates noninterest income and can be a
source of liquidity for the Bank. Disruption in the secondary market for residential mortgage loans as well as declines in real
estate values, among other economic variables, could result in one or more of the following:
•
•
•
•
•
rising interest rates has caused a decline in mortgage originations, which could continue and potentially worsen,
negatively impacting our earnings;
our inability to sell mortgage loans on the secondary market could negatively impact our liquidity position;
reductions in real estate values could decrease the potential for mortgage originations, which could negatively impact
our earnings;
if it is determined that loans were made in breach of our representations and warranties to the secondary market, we
could incur losses associated with the loans; and
increased compliance requirements could result in higher compliance costs, higher foreclosure proceedings or lower
loan origination volume, all which could negatively impact future earnings
Legislation and regulatory proposals enacted in response to market and economic conditions may materially adversely affect
our business and results of operations.
The banking industry is heavily regulated. We are subject to examinations, supervision and comprehensive regulation by
various federal and state agencies. Our compliance with these regulations is costly and restricts certain of our activities.
Banking regulations are primarily intended to protect the broader banking system, the FDIC’s Deposit Insurance Fund and
depositors, not shareholders. The burden imposed by federal and state regulations puts banks at a competitive disadvantage
compared to less regulated competitors such as finance companies, mortgage banking companies and leasing companies.
In addition, from time to time, various legislative and regulatory initiatives are introduced in Congress and state legislatures, or
by regulatory agencies, that may impact the Company or the Bank. Such initiatives may include proposals to expand or contract
the powers of bank holding companies and depository institutions or proposals to substantially change the financial institution
regulatory system. Such legislation could change the operating environment of Ameris in substantial and unpredictable ways. If
enacted, such legislation could increase or decrease the cost of doing business, limit or expand permissible activities or affect
20
the competitive balance among banks, savings associations, credit unions and other financial institutions. The Company cannot
predict whether any such legislation will be enacted, and, if enacted, the effect that it, or any implementing regulations, would
have on the financial condition or results of operations of the Company. A change in statutes, regulations or regulatory policies
applicable to the Company or the Bank could have a material effect on the business of the Company.
Our growth and financial performance may be negatively impacted if we are unable to successfully execute our growth
plans.
Economic conditions and other factors, such as our ability to identify appropriate markets for expansion, our ability to recruit
and retain qualified personnel, our ability to fund earning asset growth at a reasonable and profitable level, sufficient capital to
support our growth initiatives, competitive factors and banking laws, will impact our success.
We may seek to supplement our internal growth through acquisitions. We cannot predict with certainty the number, size or
timing of acquisitions, or whether any such acquisitions will occur at all. Our acquisition efforts have traditionally focused on
targeted banking entities in markets in which we currently operate and markets in which we believe we can compete effectively.
However, as consolidation of the financial services industry continues, the competition for suitable acquisition candidates may
increase. We may compete with other financial services companies for acquisition opportunities, and many of these competitors
have greater financial resources than we do and may be able to pay more for an acquisition than we are able or willing to pay.
We also may need additional debt or equity financing in the future to fund acquisitions. We may not be able to obtain additional
financing or, if available, it may not be in amounts and on terms acceptable to us. If we are unable to locate suitable acquisition
candidates willing to sell on terms acceptable to us, or we are otherwise unable to obtain additional debt or equity financing
necessary for us to continue making acquisitions, we would be required to find other methods to grow our business and we may
not grow at the same rate we have in the past, or at all.
Generally, we must receive federal regulatory approval before we can acquire a bank or bank holding company. In determining
whether to approve a proposed bank acquisition, federal bank regulators will consider, among other factors, the effect of the
acquisition on the competition, financial condition and future prospects. The regulators also review current and projected capital
ratios and levels, the competence, experience and integrity of management and its record of compliance with laws and
regulations, the convenience and needs of the communities to be served (including both institutions’ CRA performance history),
and the effectiveness of the acquiring institution in combating money laundering activities. We cannot be certain when or if, or
on what terms and conditions, any required regulatory approvals will be granted. We may also be required to sell banks or
branches as a condition to receiving regulatory approval, which condition may not be acceptable to us or, if acceptable to us,
may reduce the benefits of any acquisition.
In the past, we have utilized de novo branching in new and existing markets as a way to supplement our growth. De novo
branching and any acquisition carry with it numerous risks, including the following:
•
•
•
•
•
•
•
the inability to obtain all required regulatory approvals;
significant costs and anticipated operating losses associated with establishing a de novo branch or a new bank;
the inability to secure the services of qualified senior management;
the local market may not accept the services of a new bank owned and managed by a bank holding company
headquartered outside of the market area of the new bank;
economic downturns in the new market;
the inability to obtain attractive locations within a new market at a reasonable cost; and
the additional strain on management resources and internal systems and controls.
We have experienced to some extent many of these risks with our de novo branching to date.
We rely on dividends from the Bank for most of our revenue.
Ameris 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 Common Stock and interest and
principal on the Company’s debt. Various federal and 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 Common Stock and its
business, financial condition and results of operations may be materially adversely affected. Consequently, cash-based
activities, including further investments in the Bank or in support of the Bank, could require borrowings or additional issuances
of common or preferred stock.
We are subject to regulation by various federal and state entities.
21
We are subject to the regulations of the SEC, the Federal Reserve, the FDIC, the GDBF, the CFPB and other governmental
agencies and regulatory bodies. New regulations issued by these agencies may adversely affect our ability to carry on our
business activities. We are subject to various federal and state laws and certain changes in these laws and regulations may
adversely affect our operations. Noncompliance with certain of these regulations may impact our business plans, including our
ability to branch, offer certain products or execute existing or planned business strategies.
We are also subject to the accounting rules and regulations of the SEC and the Financial Accounting Standards Board. Changes
in accounting rules could materially adversely affect the reported financial statements or our results of operations and may also
require extraordinary efforts or additional costs to implement. Any of these laws or regulations may be modified or changed
from time to time, and we cannot be assured that such modifications or changes will not adversely affect us.
We are subject to industry competition which may have an impact upon our success.
Our profitability depends on our ability to compete successfully. We operate in a highly competitive financial services
environment. Certain competitors are larger and may have more resources than we do. We face competition in our regional
market areas from other commercial banks, savings and loan associations, credit unions, internet banks, mortgage companies,
finance companies, mutual funds, insurance companies, brokerage and investment banking firms, and other financial
intermediaries that offer similar services. Some of our nonbank competitors are not subject to the same extensive regulations
that govern us or our bank subsidiary and may have greater flexibility in competing for business.
Another competitive factor is that the financial services market, including banking services, is undergoing rapid changes with
frequent introductions of new technology-driven products and services. Our future success may depend, in part, on our ability
to use technology competitively to provide products and services that provide convenience to customers and create additional
efficiencies in our operations.
Changes in the policies of monetary authorities and other government action could materially adversely affect our
profitability.
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 government
and its agencies, particularly the Federal Reserve. The Federal Reserve administers monetary policy by setting target interest
rates that it attempts to effect, primarily through open market dealings in United States government securities. The Federal
Reserve also may specifically target banking institutions through the discount rate at which banks may borrow from the Federal
Reserve Banks and the reserve requirements on deposits. The nature and timing of any changes in such policies and their effect
on Ameris cannot be known at this time, but could adversely affect our results of operations.
Fiscal policy, the other principal tool of the federal government to oversee the national economy is largely in the hands of
Congress through its authority to make taxation and budget decisions, subject to Presidential approval. These decisions may
have a significant impact on the economic sectors in which we operate and could adversely affect our results of operations.
We may need to rely on the financial markets to provide needed capital.
Our Common Stock is listed and traded on the Nasdaq Global Select Market (“Nasdaq”). If the liquidity of the Nasdaq market
should fail to operate at a time when we may seek to raise equity capital, or if conditions in the capital markets are adverse, we
may be constrained in raising capital. Downgrades in the opinions of the analysts that follow our Company may cause our stock
price to fall and significantly limit our ability to access the markets for additional capital. Should these risks materialize, our
ability to further expand our operations through internal growth or acquisition may be limited.
We may invest or spend the proceeds in stock offerings in ways with which you may not agree and in ways that may not earn
a profit.
We may choose to use the proceeds of future stock offerings for general corporate purposes, including for possible acquisition
opportunities that may become available. It is not known whether suitable acquisition opportunities may become available or
whether we will be able to successfully complete any such acquisitions. We may use the proceeds of an offering only to focus
on sustaining our organic, or internal, growth or for other purposes. In addition, we may use all or a portion of the proceeds of
an offering to support our capital. You may not agree with the ways we decide to use the proceeds of any stock offerings, and
our use of the proceeds may not yield any profits.
22
We may be adversely affected by the transition away from LIBOR for our variable rate loans, derivative contracts and other
financial assets and liabilities.
Our business relies upon a large volume of loans, derivative contracts and other financial instruments which are directly or
indirectly dependent on LIBOR to establish their interest rate and/or value. The administrator of LIBOR extended publication
of the most commonly used U.S. dollar LIBOR settings to June 30, 2023 and ceased publishing other LIBOR settings on
December 31, 2021. On March 15, 2022, President Biden signed into law the “Adjustable Interest Rate (LIBOR) Act,” as part
of the Consolidated Appropriations Act, 2022, which provides for a statutory transition to a replacement rate selected by the
Federal Reserve based on the SOFR for contracts referencing LIBOR that contain no fallback provisions or ineffective fallback
provisions, unless a replacement rate is selected by a determining person as outlined in the statute. On December 16, 2022, the
Federal Reserve adopted a final rule implementing the Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates
based on SOFR that will replace LIBOR in certain financial contracts after June 30, 2023. The U.S. federal banking agencies
issued guidance strongly encouraging banking organizations to cease using U.S. dollar LIBOR as a reference rate in new
contracts as soon as practicable and in any event by December 31, 2021. We have significant but declining exposure to
financial instruments with attributes that are either directly or indirectly dependent on LIBOR to establish their interest rate and/
or value, some of which mature after June 30, 2023.
We have established a working group, consisting of key stakeholders from throughout the Company, to monitor developments
relating to LIBOR changes and to guide the Bank’s response. This team is continuing to work to ensure that technology
systems are prepared for the transition, loan documents that reference LIBOR-based rates have been appropriately amended to
reference other methods of interest rate determinations and internal and external stakeholders are apprised of the transition.
Over the next several months, we will continue to transition all remaining LIBOR-based products to an alternative benchmark.
We will also continue to evaluate the transition process and align the Company’s trajectory with regulatory guidelines regarding
the cessation of LIBOR, including monitoring new developments for transitioning to alternative reference rates, if necessary
and as needed. Any successor or replacement interest rates to LIBOR may perform differently, which may affect net interest
income, change market risk profile and require changes to risk, pricing and hedging strategies. Any failure to adequately
manage this transition could adversely impact the Company’s or the Bank’s reputation or lead to regulatory action.
We face risks related to our operational, technological and organizational infrastructure.
Our ability to grow and compete is dependent on our ability to build or acquire the necessary operational and technological
infrastructure and to manage the cost of that infrastructure while we expand. Similar to other large corporations, in our case,
operational risk can manifest itself in many ways, such as errors related to failed or inadequate processes, faulty or disabled
computer systems, fraud by employees or persons outside of our Company and exposure to external events. We are dependent
on our operational infrastructure to help manage these risks. In addition, we are heavily dependent on the strength and
capability of our technology systems which we use both to interface with our customers and to manage our internal financial
and other systems. Our ability to develop and deliver new products that meet the needs of our existing customers and attract
new customers depends in part on the functionality of our technology systems. Additionally, our ability to run our business in
compliance with applicable laws and regulations is dependent on these infrastructures.
We continuously monitor our operational and technological capabilities and make modifications and improvements when we
believe it will be cost effective to do so. In some instances, we may build and maintain these capabilities ourselves. We also
outsource some of these functions to third parties. These third parties may experience errors or disruptions that could adversely
impact us and over which we may have limited control. We also face risk from the integration of new infrastructure platforms
and/or new third party providers of such platforms into our existing businesses.
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.
Reputational risk and social factors may impact our results.
Our ability to originate and maintain accounts is highly dependent upon customer and other external perceptions of our business
practices and our financial health. Adverse perceptions regarding our business practices or our financial health could damage
our reputation in both the customer and funding markets, leading to difficulties in generating and maintaining accounts as well
as in financing them. Adverse developments with respect to the consumer or other external perceptions regarding the practices
of our competitors, or our industry as a whole, may also adversely impact our reputation. In addition, adverse reputational
23
impacts on third parties with whom we have important relationships may also adversely impact our reputation. Adverse impacts
on our reputation, or the reputation of our industry, may also result in greater regulatory or legislative scrutiny, which may lead
to laws, regulations or regulatory actions that may change or constrain the manner in which we engage with our customers and
the products we offer. Adverse reputational impacts or events may also increase our litigation risk. We carefully monitor
internal and external developments for areas of potential reputational risk and have established governance structures to assist in
evaluating such risks in our business practices and decisions, but we cannot be certain that our efforts will completely mitigate
these risks.
We 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.
We engage in acquisitions of other businesses from time to time. These acquisitions may not produce revenue or earnings
enhancements or cost savings at levels or within timeframes originally anticipated and may result in unforeseen integration
difficulties.
When appropriate opportunities arise, we will engage in acquisitions of other businesses. Difficulty in integrating an acquired
business or company may cause us not to realize expected revenue increases, cost savings, increases in geographic or product
presence or other anticipated benefits from any acquisition. The integration could result in higher than expected deposit attrition
(run-off), loss of key employees, disruption of our business or the business of the acquired company, or otherwise adversely
affect our ability to maintain relationships with customers and employees or achieve the anticipated benefits of the acquisition.
We will likely need to make additional investments in equipment and personnel to manage higher asset levels and loan balances
as a result of any significant acquisition, which may materially adversely impact our earnings. Also, the negative effect of any
divestitures required by regulatory authorities in acquisitions or business combinations may be greater than expected.
Depending on the condition of any institution that we may acquire, any acquisition may, at least in the near term, materially
adversely affect our capital and earnings and, if not successfully integrated following the acquisition, may continue to have such
effects.
Natural disasters, geopolitical events, public health crises and other catastrophic events beyond our control could adversely
affect us.
Natural disasters such as hurricanes, tropical storms, floods, wildfires, extreme weather conditions and other acts of nature,
geopolitical events such as those involving civil unrest, changes in government regimes, terrorism or military conflict,
pandemics and other public health crises, and other catastrophic events could adversely affect our business operations and those
of our customers, counterparties and service providers, and cause substantial damage and loss to real and personal property,
including damage to or destruction of mortgaged properties or our own banking facilities and offices. Natural disasters,
geopolitical events, public health crises and other catastrophic events, or concerns about the occurrence of any such events,
could impair our borrowers’ ability to service their loans, decrease the level and duration of deposits by customers, erode the
value of loan collateral, including mortgaged properties, result in an increase in the amount of our non-performing loans and a
higher level of non-performing assets, including real estate owned, net charge-offs and provision for loan losses, lead to other
operational difficulties and impair our ability to manage our business, which could materially and adversely affect our business,
financial condition, results of operations and the value of our common stock. We also could be adversely affected if our key
personnel or a significant number of our employees were to become unavailable due to a public health crisis (such as an
outbreak of a contagious disease), natural disaster, war, act of terrorism, accident or other reason. Additionally, financial
markets may be adversely affected by the current or anticipated impact of military conflict, including escalating military tension
between Russia and Ukraine, terrorism or other geopolitical events.
RISKS RELATED TO OUR COMMON STOCK
The price of our Common Stock is volatile and may decline.
The trading price of our Common Stock may fluctuate widely as a result of a number of factors, many of which are outside our
control. In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market
prices of the shares of many companies. These broad market fluctuations have adversely affected and may continue to adversely
affect the market price of our Common Stock.
24
Among the factors that could affect our stock price are:
•
•
•
•
•
•
•
•
•
•
•
•
actual or anticipated quarterly fluctuations in our operating results and financial condition;
changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts
or actions taken by rating agencies with respect to our securities or those of other financial institutions;
failure to meet analysts’ revenue or earnings estimates;
speculation in the press or investment community;
strategic actions by us or our competitors, such as acquisitions or restructurings;
actions by institutional shareholders;
fluctuations in the stock price and operating results of our competitors;
general market conditions and, in particular, developments related to market conditions for the financial services
industry;
proposed or adopted regulatory changes or developments, including changes in accounting rules;
proposed or adopted changes or developments in tax policies or rates;
anticipated or pending investigations, proceedings or litigation that involve or affect us; or
domestic and international economic factors unrelated to our performance.
A significant decline in our stock price could result in substantial losses for individual shareholders and could lead to costly and
disruptive securities litigation.
Securities issued by us, including our Common Stock, are not FDIC insured.
Securities issued by us, including our Common Stock, are not savings or deposit accounts or other obligations of any bank and
are not insured by the FDIC, the Deposit Insurance Fund or any other governmental agency or instrumentality, or any private
insurer, and are subject to investment risk, including the possible loss of principal.
Holders of the Company’s debt obligations and any shares of the Company’s preferred stock that may be outstanding in the
future will have priority over the Company’s common stock with respect to payment in the event of liquidation, dissolution
or winding up and with respect to the payment of interest and preferred dividends.
In the event of any winding up and termination of the Company, our Common Stock would rank below all claims of the holders
of the Company’s debt and any preferred stock then outstanding. As of December 31, 2022, we had outstanding trust preferred
securities and accompanying junior subordinated debentures with a carrying value of $128.3 million and other subordinated
notes payable with a carrying value of $377.1 million.
Upon the winding up and termination of the Company, holders of our Common Stock will not be entitled to receive any
payment or other distribution of assets until after all of our obligations to our debt holders have been satisfied and holders of our
senior debt, subordinated debt and junior subordinated debentures issued in connection with trust preferred securities have
received any payments and other distributions due to them. In addition, we are required to pay interest on our senior debt,
subordinated debt and junior subordinated debentures issued in connection with the Company’s trust preferred securities before
we pay any dividends on our Common Stock.
We may borrow funds or issue additional debt and equity securities or securities convertible into equity securities, any of
which may be senior to our Common Stock as to distributions and in liquidation, which could negatively affect the value of
our Common Stock.
In the future, we may attempt to increase our capital resources by entering into debt or debt-like financing that is unsecured or
secured by all or up to all of our assets, or by issuing additional debt or equity securities, which could include issuances of
secured or unsecured commercial paper, medium-term notes, senior notes, subordinated notes, preferred stock, common stock
or securities convertible into or exchangeable for equity securities. In the event of our liquidation, our lenders and holders of
our debt and preferred securities would receive a distribution of our available assets before distributions to the holders of our
Common Stock. Because our decision to incur debt and issue securities in our future offerings will depend on market conditions
and other factors beyond our control, we cannot predict or estimate with certainty the amount, timing or nature of our future
offerings and debt financings. Further, market conditions could require us to accept less favorable terms for the issuance of our
securities in the future. In addition, the borrowing of funds or issuance of debt would increase our leverage and decrease our
liquidity, and the issuance of additional equity securities would dilute the interests of our existing shareholders.
25
You may not receive dividends on the Common Stock.
Holders of our Common Stock are only entitled to receive such dividends as our Board of Directors may declare out of funds
legally available for such payments. Although we have consistently paid dividends on our Common Stock in recent years, the
payment of dividends could be suspended at any time.
Sales of a significant number of shares of our Common Stock in the public markets, or the perception of such sales, could
depress the market price of our Common Stock.
Sales of a substantial number of shares of our Common Stock in the public markets and the availability of those shares for sale
could adversely affect the market price of our Common Stock. In addition, future issuances of equity securities, including
pursuant to outstanding options, could dilute the interests of our existing shareholders and could cause the market price of our
Common Stock to decline. We may issue such additional equity or convertible securities to raise additional capital. Depending
on the amount offered and the levels at which we offer the stock, issuances of common or preferred stock could be substantially
dilutive to shareholders of our Common Stock. Moreover, to the extent that we issue restricted stock, phantom shares, stock
appreciation rights, options or warrants to purchase our Common Stock in the future and those stock appreciation rights, options
or warrants are exercised or as shares of the restricted stock vest, our shareholders may experience further dilution. Holders of
our shares of Common Stock have no preemptive rights that entitle holders to purchase their pro rata share of any offering of
shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our shareholders. We
cannot predict with certainty the effect that future sales of our Common Stock would have on the market price of our Common
Stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The Company’s corporate headquarters is located at 3490 Piedmont Road N.E., Suite 1550, Atlanta, Georgia 30305. The
Company occupies approximately 19,200 square feet at this location plus an additional 90,800 square feet used for a branch
location and support services for banking operations, including credit, marketing and operational support. The Company also
leases approximately 38,000 square feet in Jacksonville, Florida used for additional corporate support services. Inclusive of the
branch at its headquarters, Ameris operates 164 branch locations. Of the 164 branch locations, 137 are owned and 27 are
subject to either building or ground leases. Ameris also operates 32 mortgage and loan production offices, all of which are
subject to building leases. At December 31, 2022, there were no significant encumbrances on the offices, equipment or other
operational facilities owned by Ameris and the Bank. The Company believes that our properties are suitable for the purposes of
our operations.
ITEM 3. LEGAL PROCEEDINGS
Disclosure concerning legal proceedings can be found in Item 8. "Financial Statements and Supplementary Data, Notes to
Consolidated Financial Statements, Note 19. Commitments and Contingent Liabilities" under the caption, "Litigation and
Regulatory Contingencies," which is incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
26
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The Common Stock is listed on Nasdaq under the symbol “ABCB”. As of February 17, 2023, there were approximately 3,556
holders of record of the Common Stock. The Company believes 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.
The amount of and nature of any dividends declared on our Common Stock will be determined by our Board of Directors in its
sole discretion. The Company is required to comply with the restrictions on the payment of dividends in respect of the Common
Stock discussed in the section of Part I, Item 1 of this Annual Report captioned “Payment of Dividends and Other Restrictions.”
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 KBW NASDAQ Bank Stocks
for the five-year period commencing December 31, 2017 and ending December 31, 2022. This line graph assumes an
investment of $100 on December 31, 2017, and reinvestment of dividends and other distributions to shareholders.
Total Return Performance
e
u
l
a
V
x
e
d
n
I
250
200
150
100
50
12/31/17
12/31/18
12/31/19
12/31/20
12/31/21
12/31/22
Ameris Bancorp
NASDAQ Stock Market (US Companies)
KBW NASDAQ Bank Stocks
Index
Ameris Bancorp
NASDAQ Stock Market (US Companies)
KBW NASDAQ Bank Stocks
Source: S&P Global Market Intelligence
Period Ending
12/31/2017
12/31/2018
12/31/2019
12/31/2020
12/31/2021
12/31/2022
100.00
100.00
100.00
66.31
97.16
82.29
90.22
132.81
112.01
82.73
192.47
100.46
109.23
235.15
138.97
105.04
158.65
109.23
Pursuant to the regulations of the SEC, this performance graph is not “soliciting material,” is not deemed filed with the SEC
and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act.
ITEM 6. [Reserved]
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
During 2022, the Company reported net income of $346.5 million, or $4.99 per diluted share, compared with $376.9 million, or
$5.40 per diluted share, in 2021. The Company’s net income as a percentage of average assets for 2022 and 2021 was 1.47%
and 1.73%, respectively, while the Company’s net income as a percentage of average shareholders’ equity was 11.24% and
13.33%, respectively. Reported net income for the year ended December 31, 2022 includes $71.7 million in provision for credit
losses, primarily related to organic loan growth, updated economic forecast and related impacts to unfunded commitments,
compared with a provision release of $35.4 million in 2021 resulting from improvement in forecast economic conditions
compared with 2020.
Highlights of the Company’s performance in 2022 include the following:
•
•
•
•
•
•
•
•
•
Growth in net interest income of $145.7 million, representing a 22.2% increase over 2021
Organic growth in loans of $3.51 billion, or 22.1%
Growth in tangible book value per share1 of 13.9%, from $26.26 at the end of 2021 to $29.92 at the end of 2022
Net interest margin of 3.76% during 2022, up 44 basis points from 2021
Adjusted efficiency ratio1 of 52.48%, compared with 55.00% in 2021
Adjusted return on average assets1 of 1.39%, compared with 1.69% in 2021
Adjusted return on average tangible common equity1 of 16.92%, compared with 20.19% in 2021
Improvement in deposit mix with noninterest bearing deposits representing 40.74% of total deposits at the end of 2022
Annualized net charge-offs of 0.08% of average total loans
______________________________________________________________________________________________________
1 A reconciliation of non-GAAP financial measures can be found in the following tables.
28
Adjusted Net Income Reconciliation
(dollars in thousands except per share data)
Net income available to common shareholders
Adjustment items:
Merger and conversion charges
Gain on sale of mortgage servicing rights
Servicing right impairment
Natural disaster expenses
Gain on BOLI proceeds
(Gain) loss on sale of premises
Tax effect of adjustment items (Note 1)
After-tax adjustment items
Adjusted net income
Average assets
Reported return on average assets
Adjusted return on average assets
Average common equity
Average tangible common equity
Reported return on average common equity
Adjusted return on average tangible common equity
Total shareholders' equity
Less:
Goodwill
Other intangibles, net
Total tangible shareholders' equity
Period end number of shares
Book value per share
Tangible book value per share
Year Ended
December 31,
2022
$ 346,540
2021
$ 376,913
1,212
(1,356)
(21,824)
151
(55)
(45)
4,792
(17,125)
4,206
—
(14,530)
—
(603)
510
2,203
(8,214)
$ 329,415
$ 368,699
$ 23,644,754 $ 21,847,731
1.73 %
1.69 %
1.47 %
1.39 %
$ 3,083,081
$ 1,947,222
$ 2,827,669
$ 1,826,433
11.24 %
16.92 %
13.33 %
20.19 %
$ 3,197,400
$ 2,966,451
1,015,646
106,194
$ 2,075,560
1,012,620
125,938
$ 1,827,893
69,369,050
46.09
$
29.92
$
69,609,228
42.62
$
26.26
$
Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion
of the merger and conversion charges for both periods are nondeductible for tax purposes.
29
Adjusted Efficiency Ratio Reconciliation
(dollars in thousands except per share data)
Adjusted Noninterest Expense
Total noninterest expense
Adjustment items:
Merger and conversion charges
Natural disaster expenses
Gain (loss) on sale of premises
Adjusted noninterest expense
Total Revenue
Net interest income
Noninterest income
Total revenue
Adjusted Total Revenue
Net interest income (TE)
Noninterest income
Total revenue (TE)
Adjustment items:
Gain on securities
Gain on sale of mortgage servicing rights
Gain on BOLI proceeds
Servicing right impairment
Adjusted total revenue (TE)
Efficiency ratio
Adjusted efficiency ratio (TE)
Year Ended
December 31,
2022
2021
$ 560,655
$ 560,124
(1,212)
(151)
45
$ 559,337
(4,206)
—
(510)
$ 555,408
$ 801,026
284,424
$ 1,085,450
$ 655,327
365,544
$ 1,020,871
$ 804,895
284,424
1,089,319
$ 659,903
365,544
1,025,447
(203)
(1,356)
(55)
(21,824)
$ 1,065,881
(515)
—
(603)
(14,530)
$ 1,009,799
51.65 %
52.48 %
54.87 %
55.00 %
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Ameris has established certain accounting and financial reporting policies to govern the application of accounting principles
generally accepted in the United States of America (“GAAP”) in the preparation of its financial statements. Our significant
accounting policies are described in Note 1 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 our operations. We believe the following accounting policies applied by Ameris represent critical
accounting policies.
Allowance for Credit Losses
We believe the allowance for credit losses ("ACL") is a critical accounting policy that requires significant judgments and
estimates used in the preparation of our consolidated financial statements. The ACL is a valuation allowance estimated at each
balance sheet date in accordance with GAAP that is deducted from financial assets measured at amortized cost to present the
net amount expected to be collected on those assets. Management uses a systematic methodology to determine its ACL for
loans and certain off-balance-sheet credit exposures. Management considers relevant information including past events, current
conditions, and reasonable and supportable forecasts on the collectability of the loan portfolio. The Company’s estimate of its
ACL involves a high degree of judgment; therefore, management’s process for determining expected credit losses may result in
a range of expected credit losses. It is possible that others, given the same information, may at any point in time reach a
different reasonable conclusion.
Loans which share common risk characteristics are pooled for the purposes of determining the ACL. Management uses the
discounted cash flow method or the PD×LGD method, which may be adjusted for qualitative factors, in measuring the ACL for
30
pooled loans. Loans which do not share common risk characteristics are evaluated on an individual basis. When repayment is
expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized
cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The expected credit
losses may also be calculated, in the alternative, as the amount by which the amortized cost basis of the loan exceeds the
estimated fair value of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses
are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral
less estimated cost to sell.
Management believes that the ACL is adequate. While management uses available information to recognize expected losses on
loans, future additions to the ACL 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 ACL. Such agencies may
require the Company to recognize additions to the ACL based on their judgments about information available to them at the
time of their examination.
As discussed in Note 4 to the consolidated financial statements, Management determined the ACL on loans at December 31,
2022 utilizing the Moody's baseline economic forecast. If Management utilized the downside 96th percentile S-4 scenario from
Moody's, the quantitative portion of the ACL on loans would have increased approximately $120.1 million.
Income Taxes
As required by GAAP, 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, “Income Taxes,” in 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 the provision for credit losses and gains on FDIC-
assisted transactions, 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.
NET INCOME AND EARNINGS PER SHARE
The Company’s net income during 2022 was $346.5 million, or $4.99 per diluted share, compared with $376.9 million, or $5.40
per diluted share, in 2021, and $262.0 million, or $3.77 per diluted share, in 2020.
For the fourth quarter of 2022, the Company recorded net income of $82.2 million, or $1.18 per diluted share, compared with
$81.9 million, or $1.18 per diluted share, for the quarter ended December 31, 2021, and $94.3 million, or $1.36 per diluted
share, for the quarter ended December 31, 2020.
EARNING ASSETS AND LIABILITIES
Average earning assets were approximately $21.41 billion in 2022, compared with approximately $19.89 billion in 2021. The
earning asset and interest-bearing liability mix is regularly monitored to maximize the net interest margin and, therefore,
increase return on assets and shareholders’ equity.
The following statistical information should be read in conjunction with the remainder of “Management’s Discussion and
Analysis of Financial Condition and Results of Operation” and the consolidated financial statements and related notes included
elsewhere in this Annual Report and in the documents incorporated herein by reference.
31
The following tables set forth the amount of average balance, interest income or interest expense, and average interest rate for
each category of interest-earning assets and interest-bearing liabilities, net interest spread and net interest margin on average
interest-earning assets. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.
Year Ended December 31,
2022
Average
Balance
Interest
Income/
Expense
Average
Yield/
Rate Paid
Average
Balance
2021
Interest
Income/
Expense
Average
Yield/
Rate Paid
Average
Balance
2020
Interest
Income/
Expense
Average
Yield/
Rate Paid
$ 2,004,508 $ 23,085
1.15 % $ 2,877,263 $ 3,924
0.14 % $ 564,921 $ 1,886
0.33 %
(dollars in thousands)
Assets
Interest-earning assets:
Federal funds sold, interest-
bearing deposits in banks and
time deposits in other banks
Investment securities
1,163,460
36,145
Loans held for sale
Loans
718,599
29,699
17,521,461
808,826
Total interest-earning assets
21,408,028
897,755
3.11
4.13
4.62
4.19
842,201
23,252
1,463,614
42,651
14,703,956
637,861
19,887,034
707,688
2.76
2.91
4.34
3.56
1,289,800
33,875
1,497,051
47,760
14,018,582
648,137
17,370,354
731,658
2.63
3.19
4.62
4.21
Noninterest-earning assets
Total assets
2,236,726
$ 23,644,754
1,960,697
$ 21,847,731
1,870,139
$ 19,240,493
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Savings and interest-
bearing demand deposits
Time deposits
Federal funds purchased and
securities sold under agreements
to repurchase
FHLB advances
Other borrowings
Subordinated deferrable interest
debentures
0.34 %
1.40
0.68
0.91
5.11
5.38
0.79
$ 9,809,835 $ 48,797
0.50 % $ 9,238,812 $ 11,764
0.13 % $ 7,584,732 $ 25,744
1,604,978
7,308
0.46
1,954,552
10,593
0.54
2,385,296
33,323
1,477
4
279,409
9,710
393,393
19,209
127,316
7,832
0.27
3.48
4.88
6.15
0.76
6,700
48,888
20
775
399,485
19,278
125,324
5,355
11,773,761
47,785
0.30
1.59
4.83
4.27
0.41
12,115
82
849,546
7,701
297,023
15,191
124,632
6,709
11,253,344
88,750
7,017,614
228,687
2,827,669
$ 21,847,731
5,227,399
228,331
2,531,419
$ 19,240,493
Total interest-bearing liabilities
12,216,408
92,860
Noninterest-bearing demand
deposits
Other liabilities
Shareholders' equity
8,005,201
340,064
3,083,081
Total liabilities and shareholders’
equity
$ 23,644,754
Interest rate spread
Net interest income
Net interest margin
$ 804,895
3.43 %
3.76 %
$ 659,903
3.15 %
3.32 %
$ 642,908
3.42 %
3.70 %
32
RESULTS OF OPERATIONS
Net Interest Income
Net interest income represents the amount by which interest income on interest-earning 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, other investments, interest-bearing deposits in banks, federal funds sold and time
deposits in other banks. Our interest-bearing liabilities include deposits, securities sold under agreements to repurchase, other
borrowings and subordinated deferrable interest debentures.
2022 compared with 2021. For the year ended December 31, 2022, interest income was $893.9 million, an increase of $190.8
million, or 27.1%, compared with the same period in 2021. Average earning assets increased $1.52 billion, or 7.6%, to $21.41
billion for the year ended December 31, 2022, compared with $19.89 billion for 2021. Yield on average earning assets on a
taxable equivalent basis increased during 2022 to 4.19%, compared with 3.56% for the year ended December 31, 2021.
Average yields on all interest-earning asset categories increased from 2021 to 2022 as market interest rates increased.
Interest expense on deposits and other borrowings for the year ended December 31, 2022 was $92.9 million, an increase of
$45.1 million, or 94.3%, compared with $47.8 million for the year ended December 31, 2021. During 2022 average interest-
bearing liabilities were $12.22 billion as compared with $11.77 billion for 2021, an increase of $442.6 million, or 3.8%. During
2022, average noninterest-bearing deposit accounts were $8.01 billion and comprised 41.2% of average total deposits,
compared with $7.02 billion, or 38.5% of average total deposits, during 2021. Average balances of time deposits amounted to
$1.60 billion and comprised 8.3% of average total deposits during 2022, compared with $1.95 billion, or 10.7% of average total
deposits, during 2021.
On a taxable-equivalent basis, net interest income for 2022 was $804.9 million, compared with $659.9 million in 2021, an
increase of $145.0 million, or 22.0%. The Company’s net interest margin, on a tax equivalent basis, increased 44 basis points to
3.76% for the year ended December 31, 2022, compared with 3.32% for the year ended December 31, 2021. Accretion expense
for 2022 was $285,000, compared with accretion income of $16.3 million for 2021.
2021 compared with 2020. For the year ended December 31, 2021, interest income was $703.1 million, a decrease of $23.4
million, or 3.2%, compared with the same period in 2020. Average earning assets increased $2.52 billion, or 14.5%, to $19.89
billion for the year ended December 31, 2021, compared with $17.37 billion for 2020. Yield on average earning assets on a
taxable equivalent basis decreased during 2021 to 3.56%, compared with 4.21% for the year ended December 31, 2020.
Average yields on all interest-earning asset categories except investment securities decreased from 2020 to 2021 as market
interest rates declined.
Interest expense on deposits and other borrowings for the year ended December 31, 2021 was $47.8 million, a decrease of $41.0
million, or 46.2%, compared with $88.8 million for the year ended December 31, 2020. During 2021 average interest-bearing
liabilities were $11.77 billion as compared with $11.25 billion for 2020, an increase of $520.4 million, or 4.6%. During 2021,
average noninterest-bearing deposit accounts were $7.02 billion and comprised 38.5% of average total deposits, compared with
$5.23 billion, or 34.4% of average total deposits, during 2020. Average balances of time deposits amounted to $1.95 billion and
comprised 10.7% of average total deposits during 2021, compared with $2.39 billion, or 15.7% of average total deposits, during
2020.
On a taxable-equivalent basis, net interest income for 2021 was $659.9 million, compared with $642.9 million in 2020, an
increase of $17.0 million, or 2.6%. The Company’s net interest margin, on a tax equivalent basis, decreased 38 basis points to
3.32% for the year ended December 31, 2021, compared with 3.70% for the year ended December 31, 2020. Accretion income
for 2021 decreased to $16.3 million, compared with $27.4 million for 2020.
33
The summary of changes in interest income and interest expense on a fully taxable equivalent basis resulting from changes in
volume and changes in rates for each category of earning assets and interest-bearing liabilities for the years ended
December 31, 2022 and 2021 are shown in the following table:
(dollars in thousands)
Increase (decrease) in:
Income from earning assets:
2022 vs. 2021
2021 vs. 2020
Increase
(Decrease)
Changes Due To
Increase
Changes Due To
Rate
Volume
(Decrease)
Rate
Volume
Interest on federal funds sold, interest-bearing
deposits in banks and time deposits in other banks
$
19,161 $
20,351 $
(1,190) $
2,038 $
(5,682) $
7,720
Interest on investment securities
Interest on loans held for sale
Interest and fees on loans
Total interest income
Expense from interest-bearing liabilities:
Interest on savings and interest-bearing demand
deposits
Interest on time deposits
Interest on federal funds purchased and securities
sold under agreements to repurchase
Interest on FHLB advances
Interest on other borrowings
Interest on trust preferred securities
Total interest expense
Net interest income
Provision for Credit Losses
12,893
(12,952)
170,965
190,067
37,033
(3,285)
(16)
8,935
(69)
2,477
45,075
4,023
8,758
48,741
81,873
36,306
(1,390)
—
5,281
225
2,392
42,814
8,870
(21,710)
122,224
108,194
727
(1,895)
(16)
3,654
(294)
85
2,261
(10,623)
(5,109)
(10,276)
(23,970)
(13,980)
(22,730)
(62)
(6,926)
4,087
(1,354)
(40,965)
1,133
(4,042)
(41,964)
(50,555)
(19,594)
(16,712)
(25)
332
(1,153)
(1,391)
(38,543)
(11,756)
(1,067)
31,688
26,585
5,614
(6,018)
(37)
(7,258)
5,240
37
(2,422)
$
144,992 $
39,059 $
105,933 $
16,995 $
(12,012) $
29,007
The Company's provision for credit losses on loans during 2022 amounted to $52.6 million, compared with a release of $35.1
million for 2021 and a provision of $125.5 million for 2020. The increased provision for 2022 was primarily attributable to
loan growth and the updated economic forecast. Net charge-offs in 2022 were 0.08% of average loans, compared with 0.04%
in 2021 and 0.31% in 2020. The Company sold selected hotel loans during the fourth quarter of 2020 totaling $87.5 million
which resulted in charge-offs of $17.2 million. Excluding the impact of the hotel sale, net charge-offs for 2020 would have
been 0.18% of average loans.
At December 31, 2022, non-performing assets amounted to $153.5 million, or 0.61% of total assets, compared with $101.8
million, or 0.43% of total assets, at December 31, 2021. Included in non-performing assets were serviced GNMA-guaranteed
residential mortgage loans totaling $69.6 million and $30.4 million at December 31, 2022 and 2021, respectively. Non-
performing assets, excluding GNMA-guaranteed loans, represented 0.34% of total assets at December 31, 2022, compared with
0.30% of total assets at December 31, 2021. Other real estate was approximately $843,000 as of December 31, 2022, reflecting
a 77.9% decrease from the $3.8 million reported at December 31, 2021.
The Company’s allowance for credit losses on loans at December 31, 2022 was $205.7 million, or 1.04% of loans compared
with $167.6 million, or 1.06%, and $199.4 million, or 1.38%, at December 31, 2021 and 2020, respectively. The decrease in the
allowance for credit losses on loans as a percentage of loans compared with December 31, 2021 was primarily attributable to
improvements in forecast economic conditions in the Company's CECL model.
The Company's provision for unfunded commitments during 2022 amounted to $19.2 million, compared with $332,000 for
2021 and $19.1 million for 2020. The allowance for unfunded commitments on off-balance sheet credit exposures is estimated
by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as
portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The
Company recorded a release of provision for other credit losses during 2022 totaling $139,000, compared with a release of
$616,000 for 2021 and a provision of $830,000 for 2020.
34
Noninterest Income
Following is a comparison of noninterest income for 2022, 2021 and 2020.
(dollars in thousands)
Service charges on deposit accounts
Mortgage banking activity
Other service charges, commissions and fees
Net gain (loss) on securities
Gain on sale of SBA loans
Other noninterest income
Years Ended December 31,
2021
2022
2020
$
44,499 $
45,106 $
184,904
285,900
3,875
203
5,552
45,391
4,188
515
6,623
23,212
44,145
374,077
3,914
5
7,226
17,133
$
284,424 $
365,544 $
446,500
2022 compared with 2021. Total noninterest income in 2022 was $284.4 million, compared with $365.5 million in 2021,
reflecting a decrease of 22.2%, or $81.1 million.
Service charges on deposit accounts decreased $607,000, or 1.3%, to $44.5 million during 2022 compared with 2021. This
decrease was primarily attributable to the elimination of certain overdraft fees on consumer accounts and a reduction in debit
card interchange income, partially offset by an increase in corporate services charges compared with 2021.
Income from mortgage banking activities decreased $101.0 million, or 35.3%, to $184.9 million during 2022 compared with
2021. This decrease was a result of a decline in production and tightening of gain on sale spreads compared with 2021. Total
production in the retail mortgage division decreased to $5.5 billion for 2022, compared with $8.9 billion for 2021, while gain on
sale spreads decreased in 2022 to 2.27% from 3.31% in 2021. The decrease in gain on sale spread is primarily related to
normalization of pricing in the industry after experiencing record production levels in 2020. Noninterest income from the
Company's warehouse lending division was $4.5 million for 2022 compared with $4.6 million for 2021.
Other service charges, commission and fees decreased by $313,000 to $3.9 million during 2022, a decrease of 7.5% compared
with 2021 due primarily to a decrease in ATM fees.
Gain on sale of SBA loans decreased by $1.1 million, or 16.2%, to $5.6 million during 2022 compared with 2021, while loans
sold decreased $26.6 million, or 34.8%, to $50.0 million during 2022 compared with 2021.
Other noninterest income increased by $22.2 million, or 95.5%, to $45.4 million during 2022 compared with 2021. This
increase was primarily due to increases in noninterest income in our equipment finance division, BOLI income, merchant fee
income and gain on sale of mortgage servicing rights of $18.1 million, $1.9 million, $2.0 million and $1.4 million, respectively.
These increases were partially offset by reduction in recovery of prior SBA servicing right impairment of $906,000 compared
with 2021.
2021 compared with 2020. Total noninterest income in 2021 was $365.5 million, compared with $446.5 million in 2020,
reflecting a decrease of 18.1%, or $81.0 million.
Service charges on deposit accounts increased $961,000, or 2.2%, to $45.1 million during 2021 compared with 2020. This
increase was primarily attributable to increases in debit card interchange income and corporate services charges, partially offset
by a decline in volume of NSF income which declined $1.8 million compared with 2020.
Other service charges, commission and fees increased by $274,000 to $4.2 million during 2021, an increase of 7.0% compared
with 2020 due primarily to an increase in ATM fees.
Income from mortgage banking activities decreased $88.2 million, or 23.6%, to $285.9 million during 2021 compared with
2020. This decrease was a result of a decline in production and tightening of gain on sale spreads compared with 2020. Total
production in the retail mortgage division decreased to $8.9 billion for 2021, compared with $9.8 billion for 2020, while gain on
sale spreads decreased in 2021 to 3.31% from 3.79% in 2020. The decrease in gain on sale spread is primarily related to
normalization of pricing in the industry after experiencing record production levels in 2020. Noninterest income from the
Company's warehouse lending division increased $739,000 to $4.6 million for 2021 compared with $3.9 million for 2020.
35
Gain on sale of SBA loans decreased by $603,000, or 8.3%, to $6.6 million during 2021 compared with 2020, while loans sold
decreased $12.5 million, or 14.0%, to $76.6 million during 2021 compared with 2020.
Other noninterest income increased by $6.1 million, or 35.5%, to $23.2 million during 2021 compared with 2020. This increase
was primarily due to increases in BOLI income, trust services income and merchant fee income of $1.8 million, $1.8 million
and $1.3 million, respectively. Non-mortgage loan servicing income decreased $249,000 in 2021 primarily due to increased
amortization related to declines in serviced portfolio balances, partially offset by a $906,000 recovery of prior SBA servicing
right impairment.
Noninterest Expense
Following is a comparison of noninterest expense for 2022, 2021 and 2020.
(dollars in thousands)
Salaries and employee benefits
Occupancy and equipment
Advertising and marketing
Amortization of intangible assets
Data processing and communications expenses
Legal and other professional fees
Credit resolution-related expenses
Merger and conversion charges
FDIC insurance
Loan servicing expenses
Other noninterest expenses
Years Ended December 31,
2021
2022
2020
$
319,719 $
337,776 $
360,278
51,361
12,481
19,744
49,228
16,439
29
1,212
8,063
36,835
45,544
48,066
8,434
14,965
45,976
11,920
3,538
4,206
5,614
26,481
53,148
52,349
8,046
19,612
46,017
15,972
5,106
1,391
14,078
20,910
54,870
$
560,655 $
560,124 $
598,629
2022 compared with 2021. Total noninterest expense increased slightly to $560.7 million in 2022, compared with $560.1
million in 2021. Total noninterest expense for 2022 includes approximately $1.2 million in merger-related charges, $151,000
in natural disaster expense and $45,000 in gains on sale of bank premises. Total noninterest expense for 2021 includes
approximately $4.2 million in merger-related charges and $510,000 in losses on sale of bank premises. Excluding these
amounts, expenses in 2022 increased by $3.9 million, or 0.7%, compared with 2021 levels.
Salaries and benefits decreased $18.1 million, or 5.3%, from $337.8 million in 2021 to $319.7 million in 2022. This decrease
was primarily attributable to a decrease in variable pay resulting from decreased production levels in our retail mortgage
division. Salaries and benefits in our mortgage division decreased $60.0 million, or 35.7%, to $107.8 million in 2022. This
decrease was partially offset by additional salaries and benefits in our equipment finance division resulting from the acquisition
of Balboa in December 2021. Full time equivalent employees decreased from 2,865 at December 31, 2021 to 2,847 at
December 31, 2022.
Occupancy costs increased $3.3 million, or 6.9%, from $48.1 million in 2021 to $51.4 million in 2022 due primarily to
additional amortization resulting from technology projects placed in service in late 2021 and throughout 2022.
Amortization of intangible assets increased $4.8 million, or 31.9%, to $19.7 million for 2022 compared with $15.0 million for
2021. This increase was attributable to our acquisition of Balboa.
Legal and other professional fees increased $4.5 million, or 37.9%, from $11.9 million in 2021 to $16.4 million in 2022,
primarily due to additional collection related expenses in our equipment finance division.
Merger and conversion charges were $1.2 million in 2022, a decrease of $3.0 million, or 71.2%, compared with $4.2 million
recorded for 2021. Merger and conversion charges for both periods were primarily related to the acquisition of Balboa.
Other noninterest expense decreased $7.6 million, or 14.3%, to $45.5 million in 2022 from $53.1 million in 2021, resulting
primarily from an increase in deferred costs related to our equipment finance division production and net gains on sale of other
real estate owned and a decrease in other real estate owned expenses. These items were partially offset by increases in fraud
36
and forgery losses, armored car expense, ATM expense, tax and license expense and payment processing expenses related to
our equipment finance division. Also contributing to the decrease was a decrease in variable expenses related to our mortgage
production.
2021 compared with 2020. Total noninterest expense decreased $38.5 million, or 6.4%, in 2021 to $560.1 million from $598.6
million in 2020. Total noninterest expense for 2021 include approximately $4.2 million in merger-related charges and
$510,000 in losses on sale of bank premises. Total noninterest expense for 2020 include approximately $1.4 million in merger-
related charges, $624,000 in losses on sale of bank premises, $1.5 million in restructuring charges, $3.3 million in natural
disaster and pandemic expenses charges, and $3.1 million in expenses related to the previously announced SEC and DOJ
investigation. Excluding these amounts, expenses in 2021 decreased by $33.3 million, or 5.7%, compared with 2020 levels.
Salaries and benefits decreased $22.5 million, or 6.2%, from $360.3 million in 2020 to $337.8 million in 2021. This decrease
was primarily attributable to a decrease in variable pay resulting from decreased production levels in our retail mortgage
division. Salaries and benefits in our mortgage division decreased $17.0 million, or 9.2%, to $167.8 million in 2021. Also
contributing to the decrease in salaries and benefits expense was a reduction in incentives tied to PPP loan production. Full
time equivalent employees increased from 2,671 at December 31, 2020 to 2,865 at December 31, 2021, primarily as a result of
the Balboa acquisition in December 2021.
Occupancy costs decreased $4.3 million, or 8.2%, from $52.3 million in 2020 to $48.1 million in 2021 due primarily to a
reduction in leased locations related to previously announced branch consolidations and efficiency initiatives.
Amortization of intangible assets decreased $4.6 million, or 23.7%, to $15.0 million for 2021 compared with $19.6 million for
2020. Core deposit intangibles are being amortized over an accelerated basis; therefore, the expense recorded will decline over
the life of the asset.
Legal and other professional fees decreased $4.1 million, or 25.4%, from $16.0 million in 2020 to $11.9 million in 2021,
primarily due to a decrease of $3.1 million related to the previously announced SEC and DOJ investigation.
Merger and conversion charges were $4.2 million in 2021, an increase of $2.8 million, or 202.4%, compared with $1.4 million
recorded for 2020. Merger and conversion charges for 2021 were primarily related to the acquisition of Balboa while expenses
for 2020 were primarily related to the acquisition of Fidelity.
Other noninterest expense decreased $1.7 million, or 3.1%, to $53.1 million in 2021 from $54.9 million in 2020, resulting
primarily from decreases in natural disaster and pandemic charges, credit investigations and loan related expenses for loans
previously covered under loss-sharing agreements with the FDIC, partially offset by increases in other losses and tax and
license expense. Also contributing to the decrease was a decrease in variable expenses related to our elevated mortgage
production.
Income Taxes
Income tax expense is influenced by statutory federal and state tax rates, the amount of taxable income, the amount of tax-
exempt income and the amount of non-deductible expenses. For the year ended December 31, 2022, the Company recorded
income tax expense of approximately $106.6 million, compared with $119.2 million recorded in 2021 and $78.3 million
recorded in 2020. The Company’s effective tax rate was 23.5%, 24.0% and 23.0% for the years ended December 31, 2022,
2021 and 2020, respectively.
BALANCE SHEET COMPARISON
LOANS
Management believes that our loan portfolio is adequately diversified. The loan portfolio contains no foreign loans or
significant concentrations in any one industry. As of December 31, 2022, approximately 71.1% of our loan portfolio was
secured by real estate, compared with 71.7% at December 31, 2021.
37
The amount of loans outstanding at the indicated dates is shown in the following table according to type of loans.
(dollars in thousands)
Commercial, financial and agricultural
Consumer
Indirect automobile
Mortgage warehouse
Municipal
Premium finance
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
Loans, net of unearned income
December 31,
2022
2021
$ 2,679,403 $ 1,875,993
384,037
108,648
1,038,924
509,151
1,023,479
191,298
265,779
787,837
572,701
798,409
2,086,438
1,452,339
7,604,867
6,834,917
4,420,306
3,094,985
$ 19,855,253 $ 15,874,258
The Company seeks to diversify its loan portfolio across its geographic footprint and in various loan types. Also, the
Company’s in-house lending limit for a single loan is $40.0 million for construction loans and $50.0 million for term loans with
stabilized cash flows, which would normally prevent a concentration with a single loan project. Certain lending relationships
may contain more than one loan and, consequently, exceed the in-house lending limit. The Company regularly monitors its
largest loan relationships to avoid a concentration with a single borrower. The largest 25 loan relationships as of December 31,
2022 based on committed amount are summarized below by type.
Committed
Amount
Average
Rate
Average
Maturity
(months)
(dollars in thousands)
Commercial, financial and agricultural
$
Mortgage warehouse
Real estate - construction and development
Real estate - commercial and farmland
332,779
582,500
948,399
687,370
Total
$
2,551,048
7.32 %
5.33 %
6.20 %
5.30 %
5.90 %
12
3
42
40
29
%
Unsecured
39.02 %
—
—
—
5.09 %
% in
Nonaccrual
Status
— %
— %
— %
— %
— %
Total loans as of December 31, 2022, are shown in the following table according to their contractual maturity.
(dollars in thousands)
Contractual Maturity in:
One Year
or Less
Over
One Year
through
Five Years
Over
Five Years
through
Fifteen Years
Over
Fifteen Years
Total
Commercial, financial and agricultural
$
505,061 $
1,520,026 $
638,731 $
15,585 $
2,679,403
Consumer
Indirect automobile
Mortgage warehouse
Municipal
Premium finance
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
43,355
16,576
1,038,924
4,475
1,003,342
849,755
585,370
69,581
114,388
92,072
—
43,742
20,137
990,999
3,994,440
161,227
225,746
—
—
399,686
—
216,269
2,830,384
548
—
—
61,248
—
29,415
194,673
424,186
3,765,312
384,037
108,648
1,038,924
509,151
1,023,479
2,086,438
7,604,867
4,420,306
$
4,116,439 $
6,937,031 $
4,735,002 $
4,066,781 $ 19,855,253
38
Total loans which have maturity dates after one year are summarized below by those loans that have predetermined interest
rates and those loans that have floating or adjustable interest rates.
(dollars in thousands)
Predetermined interest rates
Commercial, financial and agricultural
Consumer
Indirect automobile
Municipal
Premium finance
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
Floating or adjustable interest rates
Commercial, financial and agricultural
Consumer
Municipal
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
December 31,
2022
$
1,505,537
134,682
92,072
504,305
20,137
397,605
5,632,119
2,814,812
$
11,101,269
$
668,805
206,000
371
839,078
1,387,378
1,535,913
$
4,637,545
ALLOWANCE AND PROVISION FOR CREDIT LOSSES
The allowance for credit losses ("ACL") represents an allowance for expected losses over the remaining contractual life of the
assets adjusted for prepayments. The contractual term does not consider extensions, renewals or modifications unless the
Company reasonably expects to execute a troubled debt restructuring with a borrower. The Company segregates the loan
portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.
The Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which
the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, and
net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the
Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy
election to exclude accrued interest from the measurement of ACL.
Expected credit losses are reflected in the ACL through a charge to credit loss expense. When the Company deems all or a
portion of a financial asset to be uncollectible the appropriate amount is written off and the ACL is reduced by the same
amount. The Company applies judgment to determine when a financial asset is deemed uncollectible; however, generally
speaking, an asset will be considered uncollectible no later than when all efforts at collection have been exhausted. Subsequent
recoveries, if any, are credited to the ACL when received.
The Company measures expected credit losses of financial assets on a collective (pool) basis, when the financial assets share
similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the
Company uses the DCF method or the PD×LGD method which may be adjusted for qualitative factors.
The Company’s methodologies for estimating the ACL consider available relevant information about the collectability of cash
flows, including information about past events, current conditions, and reasonable and supportable forecasts. The
methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the
measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the
financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for
which the historical loss experience was observed. The Company’s methodologies revert back to historical loss information on
a straight-line basis over four quarters when it can no longer develop reasonable and supportable forecasts.
39
The following table sets forth the breakdown of the allowance for credit losses on loans 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.
(dollars in thousands)
Commercial, financial and agricultural
Consumer
Indirect automobile
Mortgage warehouse
Municipal
Premium finance
Real estate – construction and development
Real estate – commercial and farmland
Real estate - residential
Total
2022
December 31,
2021
2020
% of
Loans to
Total
Loans
Amount
% of
Loans to
Total
Loans
Amount
% of
Loans to
Total
Loans
13 % $ 26,829
12 % $ 7,359
11 %
2
1
5
3
5
11
38
22
6,097
476
3,231
401
2,729
22,045
77,831
27,943
1
2
5
4
5
9
43
19
4,076
1,929
3,666
791
3,879
45,304
88,894
43,524
2
4
6
5
5
11
37
19
Amount
$ 39,455
5,413
174
2,118
357
1,025
32,659
67,433
57,043
$ 205,677
100 % $ 167,582
100 % $ 199,422
100 %
The following table provides an analysis of the net charge-offs (recoveries) by loan category for the years ended December 31,
2022, 2021 and 2020.
2022
2021
2020
Net charge-
offs
(recoveries)
Average
Balance
Rate
Net charge-
offs
(recoveries)
Average
balance
Rate
Net charge-
offs
(recoveries)
Average
balance
Rate
$
8,681 $ 2,116,723
0.41 % $
2,033 $ 1,526,100
0.13 % $
8,758 $ 1,400,398
0.63 %
4,044
(780)
—
—
387
214,162
1.89
178,305
(0.44)
891,285
531,324
922,551
—
—
0.04
5,309
(491)
—
—
235,056
2.26
404,461
(0.12)
827,159
623,839
—
—
3,889
1,945
—
—
(1,202)
752,094
(0.16)
2,944
472,253
803,212
749,671
688,585
683,630
0.82
0.24
—
—
0.43
(865)
1,761,853
(0.05)
(273)
1,493,855
(0.02)
(734)
1,616,655
(0.05)
3,349
7,155,542
0.05
1,279
5,958,257
0.02
26,055
4,835,463
0.54
(301)
3,749,716
(0.01)
(464)
2,883,135
(0.02)
59
2,768,715
—
$
14,515 $ 17,521,461
0.08 % $
6,191 $ 14,703,956
0.04 % $
42,916 $ 14,018,582
0.31 %
Commercial, financial
and agricultural
Consumer
Indirect automobile
Mortgage warehouse
Municipal
Premium finance
Real estate -
construction and
development
Real estate -
commercial and
farmland
Real estate -
residential
The following table provides an analysis of the allowance for credit losses on loans held for investment.
(dollars in thousands)
Allowance for credit losses on loans at end of period
Loan balances:
End of period
Allowance for credit losses on loans as a percentage of end of period loans
Nonaccrual loans as a percentage of end of period loans
Allowance for credit losses to nonaccrual loans at end of period
December 31,
2022
2021
2020
$ 205,677
$
167,582
$ 199,422
19,855,253
15,874,258
14,480,925
1.04 %
0.68 %
1.06 %
0.54 %
1.38 %
0.53 %
152.57 %
196.54 %
260.83 %
At December 31, 2022, the allowance for credit losses on loans totaled $205.7 million, or 1.04% of loans, compared with
$167.6 million, or 1.06% of loans, at December 31, 2021. The decrease in the allowance for credit losses on loans as a
40
percentage of loans compared with December 31, 2021 was primarily attributable to improvements in forecast economic
conditions during 2022. For the year ended December 31, 2022, our net charge off ratio as a percentage of average loans
increased to 0.08%, compared with 0.04% for the year ended December 31, 2021. This increase was primarily a result of the
expansion of our equipment finance division at the end of 2021 which resulted in increased net charge-offs in our commercial,
financial and agricultural loan segment.
The provision for credit losses on loans for the year ended December 31, 2022 was a provision of $52.6 million, compared with
a release of $35.1 million for the year ended December 31, 2021. This increase primarily resulted from organic loan growth
during 2022 and the updated economic forecast. While overall forecast economic conditions improved compared with those at
December 31, 2021, the rate of improvement in the economic variables slowed. As of December 31, 2022 our ratio of
nonperforming assets to total assets had increased to 0.61% from 0.43% at December 31, 2021. Included in non-performing
assets were serviced GNMA-guaranteed residential mortgage loans totaling $69.6 million and $30.4 million at December 31,
2022 and 2021, respectively. Non-performing assets, excluding GNMA-guaranteed loans, represented 0.34% of total assets at
December 31, 2022, compared with 0.30% of total assets at December 31, 2021.
NONPERFORMING LOANS
A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful.
Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is reversed against
interest income. Interest on loans that are classified as nonaccrual is recognized when received. Past due loans are placed on
nonaccrual status when principal or interest is past due 90 days or more unless the loan is well secured and in the process of
collection. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms
significantly different from the original contractual terms. The following table presents an analysis of loans accounted for on a
nonaccrual basis and loans contractually past due 90 days or more as to interest or principal payments and still accruing.
(dollars in thousands)
Nonaccrual loans
December 31,
2022
2021
Commercial, financial and agricultural
$
11,094 $
14,214
Consumer
Indirect automobile
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
Total
Loans contractually past due 90 days or more as to interest or principal payments and still accruing
Troubled Debt Restructurings
420
346
523
13,203
109,222
$
$
134,808 $
17,865 $
476
947
492
15,365
53,772
85,266
12,648
The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial
difficulties and (ii) the Company has granted a concession.
As of December 31, 2022 and 2021, the Company had a balance of $40.2 million and $76.6 million, respectively, in troubled
debt restructurings. These totals do not include COVID-19 loan modifications accounted for under Section 4013 of the CARES
Act. The following table presents the amount of troubled debt restructurings by loan class classified separately as accrual and
non-accrual at December 31, 2022 and 2021.
41
As of December 31, 2022
Loan class
Commercial, financial and agricultural
Consumer
Indirect automobile
Premium finance
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
Total
As of December 31, 2021
Loan class
Commercial, financial and agricultural
Consumer
Indirect automobile
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
Total
Accruing Loans
Non-Accruing Loans
#
Balance
(in thousands)
#
Balance
(in thousands)
7 $
3
151
4
2
16
205
388 $
835
3
533
171
693
7,995
24,166
34,396
3 $
8
16
—
1
5
30
63 $
743
11
55
—
17
767
4,181
5,774
Accruing Loans
Non-Accruing Loans
#
Balance
(in thousands)
#
Balance
(in thousands)
12 $
7
233
4
25
213
494 $
1,286
16
1,037
789
35,575
26,879
65,582
6 $
17
52
1
5
39
120 $
83
35
273
13
5,924
4,678
11,006
The following table presents the amount of troubled debt restructurings by loan class classified separately as those currently
paying under restructured terms and those that have defaulted (defined as 30 days past due) under restructured terms at
December 31, 2022 and 2021.
As of December 31, 2022
Loan class
Commercial, financial and agricultural
Consumer
Indirect automobile
Premium finance
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
Total
As of December 31, 2021
Loan class
Commercial, financial and agricultural
Consumer
Indirect automobile
Real estate - construction and development
Real estate - commercial and farmland
Real estate - residential
Total
Loans Currently
Paying Under
Restructured Terms
Loans that have
Defaulted Under
Restructured Terms
#
8
4
133
4
3
19
179
350
Balance
(in thousands)
$
$
837
3
428
171
710
8,714
20,356
31,219
#
2
7
34
—
—
2
56
101
$
Balance
(in thousands)
$
741
11
160
—
—
48
7,991
8,951
Loans Currently
Paying Under
Restructured Terms
Loans that have
Defaulted Under
Restructured Terms
#
11
10
233
4
29
215
502
Balance
(in thousands)
$
$
1,269
17
1,052
789
41,452
26,956
71,535
#
7
14
52
1
1
37
112
Balance
(in thousands)
$
$
100
34
258
13
47
4,601
5,053
42
The following table presents the amount of troubled debt restructurings by types of concessions made, classified separately as
accrual and non-accrual at December 31, 2022 and 2021.
As of December 31, 2022
Type of Concession
Forgiveness of interest
Forbearance of interest
Forbearance of principal
Forbearance of principal and interest
Rate reduction only
Rate reduction, forbearance of interest
Rate reduction, forbearance of principal
Rate reduction, forgiveness of interest
Total
As of December 31, 2021
Type of Concession
Forgiveness of interest
Forbearance of interest
Forbearance of principal
Rate reduction only
Rate reduction, maturity extension
Rate reduction, forbearance of interest
Rate reduction, forbearance of principal
Rate reduction, forgiveness of interest
Total
Accruing Loans
Non-Accruing Loans
#
3
12
246
—
51
30
14
32
Balance
(in thousands)
$
279
974
21,514
—
4,494
2,330
2,499
2,306
388
$
34,396
#
1
1
32
1
3
1
19
5
63
Balance
(in thousands)
$
54
41
3,728
402
252
2
961
334
$
5,774
Accruing Loans
Non-Accruing Loans
#
3
16
332
55
—
33
18
37
Balance
(in thousands)
$
287
1,218
49,778
6,321
—
2,296
2,694
2,988
494
$
65,582
#
—
1
73
4
1
6
29
6
120
Balance
(in thousands)
$
—
15
9,783
200
1
319
363
325
$
11,006
43
The following table presents the amount of troubled debt restructurings by collateral types, classified separately as accrual and
non-accrual at December 31, 2022 and 2021.
As of December 31, 2022
Accruing Loans
Non-Accruing Loans
Collateral Type
Warehouse
Raw land
Hotel and motel
Office
Retail, including strip centers
1-4 family residential
Church
Automobile/equipment/CD
Unsecured
Total
#
2
3
1
3
7
205
2
161
4
388
Balance
(in thousands)
$
37
1,686
127
509
3,942
24,166
2,387
1,372
170
$
34,396
#
1
3
—
2
1
29
—
27
—
63
Balance
(in thousands)
$
7
64
—
703
16
4,175
—
809
—
$
5,774
As of December 31, 2021
Accruing Loans
Non-Accruing Loans
Collateral Type
Warehouse
Raw land
Hotel and motel
Office
Retail, including strip centers
1-4 family residential
Church
Automobile/equipment/CD
Total
#
3
6
4
5
8
215
2
251
494
Balance
(in thousands)
$
61
3,776
22,069
710
7,118
27,129
2,393
2,326
#
2
1
1
1
1
39
—
75
Balance
(in thousands)
$
272
13
4,798
485
370
4,678
—
390
$
65,582
120
$
11,006
LIQUIDITY AND INTEREST 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, including the FHLB and the Federal Reserve Bank of Atlanta, which could provide funds on short notice,
if needed.
A principal objective of our asset/liability management strategy is to minimize our 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.
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.
44
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.
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 balance sheet due to the rate variability and short-term maturities of its earning assets. In particular, approximately
48.1% of earning assets mature or reprice within one year or less. Mortgage loans, generally our loan category with the longest
maturity, are usually made with fifteen to thirty year maturities, but a portion is at a variable interest rate with an adjustment
between origination date and maturity date.
45
The following table sets forth the distribution of the repricing of our interest-earning assets and interest-bearing liabilities as of
December 31, 2022, the interest rate sensitivity gap (i.e., interest rate sensitive assets minus interest rate sensitive liabilities), the
cumulative interest rate sensitivity gap, the interest rate sensitivity gap ratio (i.e., interest rate sensitive assets divided by interest
rate sensitive liabilities) and the cumulative interest rate 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.
(dollars in thousands)
Interest-earning assets:
Federal funds sold and interest-bearing deposits
in banks
Investment securities
Loans held for sale
Loans
Interest-bearing liabilities:
Interest-bearing demand deposits
Money market deposit accounts
Savings
Time deposits
FHLB advances
Other borrowings
Trust preferred securities
December 31, 2022
Maturing or Repricing Within
Zero to
Three
Months
Three
Months to
One Year
One to
Five
Years
Over
Five
Years
Total
$
833,565 $
— $
— $
— $
833,565
8,759
392,078
5,316,775
6,551,177
90,449
—
4,294,667
4,385,116
993,185
542,531
1,634,924
—
6,859,658
7,852,843
—
392,078
3,384,153
19,855,253
3,926,684
22,715,820
3,871,784
5,198,165
993,743
300,405
1,450,000
74,449
128,322
—
—
—
932,618
—
—
—
—
—
—
235,583
30,000
302,662
—
—
—
—
861
18,625
—
—
3,871,784
5,198,165
993,743
1,469,467
1,498,625
377,111
128,322
12,016,868
932,618
568,245
19,486
13,537,217
Interest rate sensitivity gap
$
(5,465,691) $
3,452,498 $
7,284,598 $
3,907,198 $
9,178,603
Cumulative interest rate sensitivity gap
$
(5,465,691) $
(2,013,193) $
5,271,405 $
9,178,603
Interest rate sensitivity gap ratio
Cumulative interest rate sensitivity gap ratio
0.55
0.55
4.70
13.82
203.39
0.84
1.39
1.68
46
INVESTMENT PORTFOLIO
Following is a summary of the carrying value of debt securities available-for-sale as of the end of each reported period:
(dollars in thousands)
U.S. Treasuries
U.S. government-sponsored agencies
State, county and municipal securities
Corporate debt securities
SBA pool securities
Mortgage-backed securities
Total debt securities available-for-sale
December 31,
2022
2021
$
759,534 $
979
34,195
15,926
27,398
662,028
$
1,500,060 $
—
7,172
47,812
28,496
45,201
463,940
592,621
Following is a summary of the carrying value of debt securities held-to-maturity as of the end of each reported period:
(dollars in thousands)
State, county and municipal securities
Mortgage-backed securities
Total debt securities held-to-maturity
December 31,
2022
2021
$
$
31,905 $
102,959
134,864 $
8,905
70,945
79,850
47
The amounts of securities available-for-sale and held-to in each category as of December 31, 2022 are shown in the following
table according to contractual maturity classifications: (i) one year or less, (ii) after one year through five years, (iii) after five
years through ten years and (iv) after ten years.
Securities available-for-sale (1)
U.S. Treasuries
U.S. Government-
sponsored Agencies
State, County and
Municipal Securities
(dollars in thousands)
One year or less
After one year through five years
After five years through ten years
After ten years
Securities available-for-sale (1)
One year or less
After one year through five years
After five years through ten years
After ten years
Amount
Yield
(2)
Amount
Yield
(2)
Amount
$
47,938
4.66 % $
711,596
3.13 %
—
—
— %
— %
$ 759,534
3.22 % $
—
979
—
—
979
— % $
2,464
2.16 %
18,521
— %
— %
7,071
6,139
2.16 % $
34,195
Yield
(2)(3)
3.55 %
3.93 %
4.35 %
3.63 %
3.94 %
Corporate Debt
Securities
Amount
Yield
(2)
SBA Pool Securities
Amount
Yield
(2)
Mortgage-backed
Securities
Amount
$
500
3.88 % $
1,496
3.04 %
12,395
4.87 %
147
6,922
5,213
2.71 % $
20,756
2.09 %
182,602
2.56 %
193,944
1,535
6.75 %
15,116
2.95 %
264,726
$
15,926
4.89 % $
27,398
2.66 % $ 662,028
Yield
(2)
2.80 %
3.15 %
3.13 %
3.20 %
3.15 %
Securities held-to-maturity (1)
State, County and
Municipal Securities
Mortgage-backed
Securities
One year or less
After one year through five years
After five years through ten years
After ten years
Amount
$
—
—
—
Yield
(2)(3)
Amount
— % $
—
— %
— %
10,956
38,700
53,303
31,905
3.93 %
$
31,905
3.93 % $ 102,959
Yield
(2)
— %
1.01 %
2.66 %
2.21 %
2.26 %
(1) The amortized cost and fair value of debt securities are presented based on contractual maturities. Actual cash flows may
differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment
penalties.
(2) Yields were computed using coupon interest, adding discount accretion or subtracting premium amortization, as
appropriate, on a ratable basis over the life of each security. The weighted average yield for each maturity range was
computed using the amortized cost of each security in that range.
(3) Yields on securities of state and political subdivisions are stated on a taxable-equivalent basis, using a tax rate of 21%.
The investment portfolio includes securities which 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. Securities classified as held-to-maturity are recorded at amortized cost.
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 trade date.
Management and the ALCO Committee evaluates available-for-sale securities in an unrealized loss position on at least a
quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related
impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an
impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is
recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is
not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. The
Company does not intend to sell these investment securities at an unrealized loss position at December 31, 2022, and it is more
48
likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results
of management's review, at December 31, 2022, management determined $75,000 was attributable to credit impairment and
increased the allowance for credit losses accordingly. The remaining $59.1 million in unrealized loss was determined to be from
factors other than credit. The Company's held-to-maturity securities have no expected credit losses and no related allowance
for credit losses has been established.
DEPOSITS
Average amount of various deposit classes and the average rates paid thereon are presented below.
(dollars in thousands)
Noninterest-bearing demand
NOW
Money market
Savings
Time
Total deposits
Year Ended December 31,
2022
2021
Amount
Rate
Amount
Rate
$
8,005,201
— % $
7,017,614
— %
3,675,586
5,128,497
1,005,752
1,604,978
0.39
0.65
0.13
0.46
3,400,441
4,953,748
884,623
1,954,552
0.10
0.16
0.06
0.54
$ 19,420,014
0.29 % $ 18,210,978
0.12 %
We have a large, stable base of time deposits with little or no dependence on what we consider volatile deposits. Volatile
deposits, in management’s opinion, are those deposit accounts that are overly rate sensitive and apt to move if our rate offerings
are not at or near the top of the market. Generally speaking, these are brokered deposits or time deposits in amount greater than
$250,000.
At December 31, 2022, the Company had brokered deposits of $280.5 million. The amounts of time certificates of deposit
issued in amounts of more than $250,000 as of December 31, 2022, are shown below by category, which is based on time
remaining until maturity of (i) three months or less, (ii) over three through twelve months and (iii) greater than one year.
(dollars in thousands)
Three months or less
Over three months through six months
Over six months through one year
Over one year
Total
December 31,
2022
$
$
68,318
47,294
191,774
49,459
356,845
As of December 31, 2022 and 2021, the Company had estimated uninsured deposits of $9.15 billion and $9.11 billion,
respectively. These estimates were derived using the same methodologies and assumptions used for the Bank's regulatory
reporting.
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 or for
construction period financing and have been approved within the Bank’s credit guidelines. Our Bank has also granted
commitments to approved customers for financial 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.
49
The following table summarizes commitments outstanding at December 31, 2022 and 2021.
(dollars in thousands)
Commitments to extend credit
Unused lines of credit
Financial standby letters of credit
Mortgage interest rate lock commitments
Mortgage forward contracts with positive fair value - notional amount
Mortgage forward contracts with negative fair value - notional amount
December 31,
2022
2021
$
6,318,039 $
4,328,749
345,001
33,557
148,148
689,500
272,029
36,184
417,126
—
—
1,935,237
$
7,534,245 $
6,989,325
The following table summarizes short-term borrowings for the periods indicated.
(dollars in thousands)
Federal funds purchased and securities sold under
agreement to repurchase
(dollars in thousands)
Total maximum short-term borrowings outstanding
at any month-end during the year
2022
Year Ended December 31,
2021
2020
Average
Balance
Average
Rate
Average
Balance
Average
Rate
Average
Balance
Average
Rate
$ 1,477
0.27 % $ 6,700
0.30 % $ 12,115
0.68 %
2022
Total
Balance
Year Ended December 31,
2021
Total
Balance
2020
Total
Balance
$ 6,924
$ 9,320
$ 15,998
As of December 31, 2022, letters of credit issued by the Federal Home Loan Bank totaling $400.0 million were used to
guarantee the Bank’s performance related to a portion of its public fund deposit balances.
The following table sets forth certain information about contractual cash obligations as of December 31, 2022.
(dollars in thousands)
Total
Payments Due After December 31, 2022
1-3
Years
1 Year
or Less
4-5
Years
Deposits without a stated maturity
$ 17,993,271 $ 17,993,271 $
— $
— $
Time certificates of deposit
Other borrowings
1,469,467
1,233,023
1,878,469
1,525,000
Subordinated deferrable interest debentures
154,390
—
199,564
15,000
—
36,019
15,000
—
>5
Years
—
861
323,469
154,390
Operating lease obligations
Total contractual cash obligations
68,524
11,327
$ 21,564,121 $ 20,762,621 $ 232,230 $
17,666
13,797
25,734
64,816 $ 504,454
At December 31, 2022, estimated costs to complete construction projects in progress and other binding commitments for capital
expenditures were not a material amount.
50
CAPITAL ADEQUACY
Capital Regulations
The capital resources of the Company are monitored on a periodic basis by state and federal regulatory authorities. During
2022, the Company’s capital increased $230.9 million, primarily due to net income of $346.5 million, which was partially
offset by the cash dividends declared on common shares of $41.7 million and the impact to other comprehensive income of
$62.1 million resulting from rising rates on our investment portfolio. During 2021, the Company’s capital increased $319.4
million, primarily due to net income of $376.9 million, which was partially offset by the cash dividends declared on common
shares of $42.0 million. For both 2022 and 2021, other capital related transactions, such as share-based compensation, common
stock issuances through the exercise of stock options, and issuances of shares of restricted stock accounted for only a small
change in the capital of the Company.
Under the regulatory capital frameworks adopted by the Federal Reserve and the FDIC, Ameris and the Bank must each
maintain a common equity Tier 1 capital to total risk-weighted assets ratio of at least 4.5%, a Tier 1 capital to total risk-
weighted assets ratio of at least 6%, a total capital to total risk-weighted assets ratio of at least 8% and a leverage ratio of Tier 1
capital to average total consolidated assets of at least 4%. Ameris and the Bank are also required to maintain a capital
conservation buffer of common equity Tier 1 capital of at least 2.5% of risk-weighted assets in addition to the minimum risk-
based capital ratios in order to avoid certain restrictions on capital distributions and discretionary bonus payments.
In March 2020, the Office of the Comptroller of the Currency, the Federal Reserve and the FDIC issued an interim final rule
that delays the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule
provides banking organizations that implement CECL in 2020 the option to delay for two years an estimate of CECL’s effect on
regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition
period. As a result, the Company and Bank elected the five-year transition relief allowed under the interim final rule effective
March 31, 2020.
The following table summarizes the regulatory capital levels of Ameris at December 31, 2022.
(dollars in thousands)
Tier 1 Leverage Ratio (tier 1 capital to average
assets)
Actual
Required
Excess
Amount
Percent
Amount
Percent
Amount
Percent
Consolidated
Ameris Bank
$ 2,185,694
9.36 % $ 933,928
4.00 % $ 1,251,766
$ 2,464,589
10.56 % $ 933,284
4.00 % $ 1,531,305
CET1 Ratio (common equity tier 1 capital to
risk weighted assets)
Consolidated
Ameris Bank
$ 2,185,694
9.86 % $ 1,551,305
7.00 % $ 634,389
$ 2,464,589
11.12 % $ 1,551,185
7.00 % $ 913,404
5.36 %
6.56 %
2.86 %
4.12 %
Tier 1 Capital Ratio (tier 1 capital to risk
weighted assets)
Consolidated
Ameris Bank
$ 2,185,694
$ 2,464,589
9.86 % $ 1,883,727
11.12 % $ 1,883,581
8.50 % $ 301,967
8.50 % $ 581,008
1.36 %
2.62 %
Total Capital Ratio (total capital to risk
weighted assets)
Consolidated
Ameris Bank
$ 2,859,680
12.90 % $ 2,326,957
10.50 % $ 532,723
$ 2,720,253
12.28 % $ 2,326,777
10.50 % $ 393,476
2.40 %
1.78 %
The required CET1 Ratio, Tier 1 Capital Ratio, and the Total Capital Ratio reflected in the table above include a capital
conservation buffer of 2.50%.
51
INFLATION
The consolidated financial statements and related consolidated financial data presented herein have been prepared in accordance
with GAAP 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
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.
(dollars in thousands, except per share data)
Selected Income Statement Data:
Interest income
Interest expense
Net interest income
Provision for credit losses
Net interest income after provision for credit losses
Noninterest income
Noninterest expense excluding merger and conversion
charges
Merger and conversion charges
Income before income taxes
Income tax
Net income
Per Share Data:
Three Months Ended
December 31,
2022
September 30,
2022
June 30, 2022 March 31, 2022
$
273,642 $
49,505
234,302 $
21,321
202,568 $
11,204
224,137
32,890
191,247
48,348
212,981
17,652
195,329
65,324
191,364
14,924
176,440
83,841
183,374
10,830
172,544
6,231
166,313
86,911
134,826
139,578
142,196
142,843
235
104,534
22,313
—
121,075
28,520
—
118,085
28,019
$
82,221 $
92,555 $
90,066 $
977
109,404
27,706
81,698
1.18
1.17
0.15
Basic earnings per common share
Diluted earnings per common share
Common dividends - cash
$
1.19 $
1.34 $
1.30 $
1.18
0.15
1.34
0.15
1.30
0.15
52
(dollars in thousands)
Selected Income Statement Data:
Interest income
Interest expense
Net interest income
Provision for credit losses
Net interest income after provision for credit losses
Noninterest income
Noninterest expense excluding merger and conversion
charges
Merger and conversion charges
Income before income taxes
Income tax
Net income
Per Share Data:
Three Months Ended
December 31,
2021
September
30, 2021
June 30, 2021
March 31,
2021
$
178,365 $
173,046 $
173,751 $
177,950
11,528
166,837
2,759
164,078
81,769
134,346
4,023
107,478
25,534
11,385
161,661
(9,675)
171,336
76,562
11,899
161,852
142
161,710
89,240
12,973
164,977
(28,591)
193,568
117,973
137,013
135,761
148,798
183
110,702
29,022
—
115,189
26,862
—
162,743
37,781
$
81,944 $
81,680 $
88,327 $
124,962
Basic earnings per common share
Diluted earnings per common share
Common dividends - cash
$
1.18 $
1.18 $
1.27 $
1.18
0.15
1.17
0.15
1.27
0.15
1.80
1.79
0.15
53
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 trading. Finally, we have no exposure to foreign currency exchange rate risk, commodity price risk or 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.
Interest Rate Risk Management
As indicated by the table below, we are asset sensitive in relation to changes in market interest rates in the one-year and two-
year time horizons. 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 an instantaneous 100 basis point increase or 100 basis point decrease in market rates on net interest income and is monitored
on a quarterly basis. Our most recent model projects net interest income would increase if rates rise 100 basis points over the
next year.
The following table presents the earnings simulation model’s projected impact of a change in interest rates on the projected
baseline net interest income for the 12- and 24-month periods commencing January 1, 2023. This change in interest rates
assumes parallel shifts in the yield curve and does not take into account changes in the slope of the yield curve.
Earnings Simulation Model Results
Change in
Interest Rates
(in bps)
% Change in Projected Baseline
Net Interest Income
12 Months
24 Months
400
300
200
100
(100)
(200)
3.7%
4.3%
3.5%
1.8%
(2.1)%
(5.4)%
14.9%
12.1%
8.4%
4.3%
(4.8)%
(10.9)%
In the event of a shift in interest rates, we may take certain actions intended to mitigate the negative impact to net interest
income or to maximize the positive impact to net interest income. These actions may include, but are not limited to,
restructuring of interest-earning assets and interest-bearing liabilities, seeking alternative funding sources or investment
opportunities and modifying the pricing or terms of loans, leases and deposits.
Impact of Inflation and Changing Prices
The consolidated financial statements and related notes presented elsewhere in this report have been prepared in accordance
with GAAP. This requires 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, the vast majority of our assets and liabilities are monetary in nature. As a result, interest rates have a greater impact
on our performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction
or to the same extent as the prices of goods and services.
54
LIBOR Transition
In 2017, the U.K. Financial Conduct Authority announced that it would no longer compel banks to submit rates for the
calculation of LIBOR after 2021. The administrator of LIBOR extended publication of the most commonly used U.S. dollar
LIBOR settings to June 30, 2023 and ceased publishing other LIBOR settings on December 31, 2021. On March 15, 2022,
President Biden signed into law the “Adjustable Interest Rate (LIBOR) Act,” as part of the Consolidated Appropriations Act,
2022, which provides for a statutory transition to a replacement rate selected by the Federal Reserve based on the SOFR for
contracts referencing LIBOR that contain no fallback provisions or ineffective fallback provisions, unless a replacement rate is
selected by a determining person as outlined in the statute. On December 16, 2022, the Federal Reserve adopted a final rule
implementing the Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on SOFR that will replace
LIBOR in certain financial contracts after June 30, 2023. The U.S. federal banking agencies issued guidance strongly
encouraging banking organizations to cease using U.S. dollar LIBOR as a reference rate in new contracts as soon as practicable
and in any event by December 31, 2021. We have significant but declining exposure to financial instruments with attributes
that are either directly or indirectly dependent on LIBOR to establish their interest rate and/or value, some of which mature after
June 30, 2023.
We have established a working group, consisting of key stakeholders from throughout the Company, to monitor developments
relating to LIBOR changes and to guide the Bank’s response. This team is continuing to work to ensure that technology
systems are prepared for the transition, loan documents that reference LIBOR-based rates have been appropriately amended to
reference other methods of interest rate determinations and internal and external stakeholders are apprised of the transition.
Over the next several months, we will continue to transition all remaining LIBOR-based products to an alternative benchmark.
We will also continue to evaluate the transition process and align the Company’s trajectory with regulatory guidelines regarding
the cessation of LIBOR, including monitoring new developments for transitioning to alternative reference rates.
55
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets – December 31, 2022 and 2021
Consolidated Statements of Income – Years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Comprehensive Income – Years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Shareholders' Equity – Years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Cash Flows – Years ended December 31, 2022, 2021 and 2020
Notes to Consolidated Financial Statements
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
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 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 were effective.
Management’s Report on Internal Control Over Financial Reporting
Management’s Report on Internal Control Over Financial Reporting is set forth on page F-2 of this Annual Report.
Changes in Internal Control Over Financial Reporting
During the quarter ended December 31, 2022, there was no 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.
ITEM 9B. OTHER INFORMATION
Amendment and Restatement of the Bylaws of Ameris Bancorp
Effective February 23, 2023, the Company’s Board of Directors approved and adopted an amendment and restatement of the
Bylaws of Ameris Bancorp (as so amended and restated, the “Bylaws”).
The Company’s Board of Directors approved the Bylaws as part of its periodic review of the Company’s corporate governance
documents. Among other matters, the Bylaws:
•
• make certain updates in connection with the SEC’s new rules relating to universal proxy cards (the “Universal Proxy
Rules”), including requiring shareholders to represent that they intend to solicit the requisite holders required by the
Universal Proxy Rules and provide reasonable evidence that they have complied with the Universal Proxy Rules no
later than five business days prior to the date of the applicable meeting of the Company’s shareholders, and reserving
white proxy cards for the exclusive use of the Company’s Board of Directors;
expand the shareholder advance notice provisions that are applicable to director nominations to other business
proposed to be brought before a meeting by a shareholder, and require certain information regarding any such
proposed business, including a description of such business, the reasons for conducting such business and any material
interest in such business, and certain additional information, including information regarding ownership by the
proposing shareholder of derivative or hedging arrangements and an undertaking to deliver a director questionnaire
and other information reasonably requested by the Company with respect to any director nominee, to be included in
shareholder notices for business or director nominations; and
56
•
provide for mandatory indemnification and expense reimbursement (to the maximum extent permitted by the Georgia
Business Corporation Code) for directors and officers of the Company, or any other corporation of which they served
as such at the request of the Company, in certain threatened, pending or completed actions.
The amendments also include certain other technical and conforming revisions and clarifications.
The foregoing summary is qualified in its entirety by reference to the Bylaws, a copy of which (marked to show changes from
the prior version) is attached hereto as Exhibit 3.2 and is incorporated by reference in this Item 9B.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
57
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information set forth under the captions “Matters To Be Voted On - Proposal 1 - Election of Directors,” “Governance -
Director Independence,” “Environmental, Social and Governance Matters,” “Board of Directors - Board Members,” “Board of
Directors - Board Committees,” “Board of Directors - Director Compensation,” “Information About Our Executive Officers,”
“Executive Compensation - Employment Agreements,” “Audit Matters - Audit Committee Report” and “Stock Ownership -
Delinquent Section 16(a) Reports” in the Proxy Statement to be used in connection with the solicitation of proxies for the
Company’s 2023 Annual Meeting of Shareholders, to be filed with the SEC, is incorporated herein by reference.
For information regarding amendments to the Company’s Bylaws impacting the procedures by which shareholders may
recommend nominees for election as directors of the Company, see the discussion of the amendment and restatement of the
Company’s Bylaws under Item 9B.
Code of Business Conduct and Ethics
Ameris has adopted a code of business conduct and ethics that is applicable to all employees, including its principal executive
officer, principal financial officer, principal accounting officer and controller. The code of business conduct and ethics is
available on our website at www.amerisbank.com.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth under the captions “Board of Directors - Board Committees - Compensation Committee,” “Board of
Directors - Director Compensation” and “Executive Compensation” in the Proxy Statement to be used in connection with the
solicitation of proxies for the Company’s 2023 Annual Meeting of Shareholders, to be filed with the SEC, 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 caption “Stock Ownership - Security Ownership of Certain Beneficial Owners and
Management” in the Proxy Statement to be used in connection with the solicitation of proxies for the Company’s 2023 Annual
Meeting of Shareholders, to be filed with the SEC, is incorporated herein by reference.
Equity Compensation Plans
The following table sets forth certain information with respect to securities to be issued under our equity compensation plans as
of December 31, 2022.
Plan Category
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights (1)
Weighted
average exercise
price of
outstanding
options, warrants
and rights (1)
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (2)
(a)
(b)
(c)
Equity compensation plans approved by security holders
126,254 $
29.69
2,619,730
(1) Represents shares issuable upon the exercise of stock options outstanding under the Fidelity Southern Corporation Equity
Incentive Plan and the Fidelity Southern Corporation 2018 Omnibus Incentive Plan, each as amended, which options
converted into options to acquire shares of common stock, par value $1.00 per share, of the Company on July 1, 2019,
pursuant to the Agreement and Plan of Merger, dated as of December 17, 2018, by and between the Company and Fidelity
Southern Corporation, and performance stock units ("PSUs") granted under the 2014 Omnibus Equity Compensation Plan
and 2021 Omnibus Equity Compensation Plan at target. PSUs are not taken into account in column (b).
58
(2) Consists of our 2021 Omnibus Equity Compensation Plan, which provides for the granting to directors, officers and
certain other employees of qualified or nonqualified stock options, stock units, stock awards, stock appreciation rights,
dividend equivalents and other stock-based awards.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information set forth under the captions “Governance - Director Independence,” “Board of Directors - Board Committees”
and “Related Party Transactions” in the Proxy Statement to be used in connection with the solicitation of proxies for the
Company’s 2023 Annual Meeting of Shareholders, to be filed with the SEC, is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information set forth under the caption “Matters To Be Voted On - Proposal 2 - Ratification of Appointment of Our
Registered Independent Public Accounting Firm,” “Board of Directors - Board Committees - Audit Committee” and “Audit
Matters - Fees and Services” in the Proxy Statement to be used in connection with the solicitation of proxies for the Company’s
2023 Annual Meeting of Shareholders, to be filed with the SEC, is incorporated herein by reference.
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
1.
Financial statements:
(a) Ameris Bancorp and Subsidiaries:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Consolidated Balance Sheets – December 31, 2022 and 2021;
Consolidated Statements of Income – Years ended December 31, 2022, 2021 and 2020;
Consolidated Statements of Comprehensive Income – Years ended December 31, 2022, 2021 and 2020;
Consolidated Statements of Shareholders' Equity – Years ended December 31, 2022, 2021 and 2020;
Consolidated Statements of Cash Flows – Years ended December 31, 2022, 2021 and 2020; and
Notes to Consolidated Financial Statements.
(b) Ameris Bancorp (parent company only):
Parent company only financial information has been included in Note 22 of the 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 Annual Report is shown on
the “Exhibit Index” filed herewith.
ITEM 16. FORM 10-K SUMMARY.
None.
59
Exhibit
No.
EXHIBIT INDEX
Description
2.1
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
Agreement and Plan of Merger dated as of December 17, 2018 by and between Ameris Bancorp and Fidelity
Southern Corporation (incorporated by reference to Exhibit 2.1 to Ameris Bancorp’s Current Report on Form
8-K filed with the SEC on December 17, 2018).
Restated Articles of Incorporation of Ameris Bancorp.
Bylaws of Ameris Bancorp, as amended and restated through February 23, 2023.
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 SEC on October 27, 2006).
Floating Rate Junior Subordinated Deferrable Interest Debenture dated September 20, 2006 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 SEC on October 27, 2006).
Indenture between Ameris Bancorp (as successor to The Prosperity Banking Company) and U.S. Bank
National Association dated as of March 26, 2003 (incorporated by reference to Exhibit 4.3 to Ameris
Bancorp’s Annual Report on Form 10-K filed with the SEC on March 14, 2014).
First Supplemental Indenture dated as of December 23, 2013 by and among Ameris Bancorp, The Prosperity
Banking Company and U.S. Bank National Association (incorporated by reference to Exhibit 4.4 to Ameris
Bancorp’s Annual Report on Form 10-K filed with the SEC on March 14, 2014).
Form of Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2033 (included as Exhibit A to
the Indenture filed as Exhibit 4.3 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on
March 14, 2014).
Indenture between Ameris Bancorp (as successor to The Prosperity Banking Company) and Deutsche Bank
Trust Company Americas dated as of June 24, 2004 (incorporated by reference to Exhibit 4.6 to Ameris
Bancorp’s Annual Report on Form 10-K filed with the SEC on March 14, 2014).
First Supplemental Indenture dated as of December 23, 2013 by and among Ameris Bancorp, The Prosperity
Banking Company and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.7 to
Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on March 14, 2014).
Form of Floating Rate Junior Subordinated Deferrable Interest Note Due 2034 (incorporated by reference to
Exhibit 4.8 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on March 14, 2014).
Indenture between Ameris Bancorp (as successor to The Prosperity Banking Company) and Wilmington Trust
Company dated as of January 31, 2006 (incorporated by reference to Exhibit 4.9 to Ameris Bancorp’s Annual
Report on Form 10-K filed with the SEC on March 14, 2014).
First Supplemental Indenture dated as of December 23, 2013 by and among Ameris Bancorp, The Prosperity
Banking Company and Wilmington Trust Company (pertaining to Indenture dated as of January 31, 2006)
(incorporated by reference to Exhibit 4.10 to Ameris Bancorp’s Annual Report on Form 10-K filed with the
SEC on March 14, 2014).
Form of Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2036 (included as Exhibit A to
the Indenture filed as Exhibit 4.9 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on
March 14, 2014).
Indenture between Ameris Bancorp (as successor to The Prosperity Banking Company) and Wilmington Trust
Company dated as of September 20, 2007 (incorporated by reference to Exhibit 4.18 to Ameris Bancorp’s
Annual Report on Form 10-K filed with the SEC on March 14, 2014).
60
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.26
4.27
First Supplemental Indenture dated as of December 23, 2013 by and among Ameris Bancorp, The Prosperity
Banking Company and Wilmington Trust Company (pertaining to Indenture dated as of September 20, 2007)
(incorporated by reference to Exhibit 4.19 to Ameris Bancorp’s Annual Report on Form 10-K filed with the
SEC on March 14, 2014).
Form of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2037 (included as
Exhibit A to the Indenture filed as Exhibit 4.18 to Ameris Bancorp’s Annual Report on Form 10-K filed with
the SEC on March 14, 2014).
Indenture between Ameris Bancorp (as successor to Coastal Bankshares, Inc.) and Wells Fargo Bank,
National Association dated as of August 27, 2003 (incorporated by reference to Exhibit 4.1 to Ameris
Bancorp’s Current Report on Form 8-K filed with the SEC on July 1, 2014).
First Supplemental Indenture dated as of June 30, 2014 by and among Ameris Bancorp and Wells Fargo
Bank, National Association (pertaining to Indenture dated as of August 27, 2003) (incorporated by reference
to Exhibit 4.2 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on July 1, 2014).
Form of Junior Subordinated Debt Security Due 2033 (included as Exhibit A to the Indenture filed as Exhibit
4.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on July 1, 2014).
Indenture between Ameris Bancorp (as successor to Coastal Bankshares, Inc.) and U.S. Bank National
Association dated as of December 14, 2005 (incorporated by reference to Exhibit 4.4 to Ameris Bancorp’s
Current Report on Form 8-K filed with the SEC on July 1, 2014).
First Supplemental Indenture dated as of June 30, 2014 by and among Ameris Bancorp, Coastal Bankshares,
Inc. and U.S. Bank National Association (pertaining to Indenture dated as of December 14, 2005)
(incorporated by reference to Exhibit 4.5 to Ameris Bancorp’s Current Report on Form 8-K filed with the
SEC on July 1, 2014).
Form of Junior Subordinated Debt Security Due 2035 (included as Exhibit A to the Indenture filed as Exhibit
4.4 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on July 1, 2014).
Indenture between Ameris Bancorp (as successor to Merchants & Southern Banks of Florida, Incorporated)
and Wilmington Trust Company dated as of March 17, 2005 (incorporated by reference to Exhibit 4.1 to
Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on May 27, 2015).
First Supplemental Indenture dated as of May 22, 2015 by and among Ameris Bancorp, Merchants &
Southern Banks of Florida, Incorporated and Wilmington Trust Company (pertaining to Indenture dated as of
March 17, 2005) (incorporated by reference to Exhibit 4.2 to Ameris Bancorp’s Current Report on Form 8-K
filed with the SEC on May 27, 2015).
Form of Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2035 (included as Exhibit A to
the Indenture filed as Exhibit 4.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on
May 27, 2015).
Indenture between Ameris Bancorp (as successor to Merchants & Southern Banks of Florida, Incorporated)
and Wilmington Trust Company dated as of March 30, 2006 (incorporated by reference to Exhibit 4.4 to
Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on May 27, 2015).
First Supplemental Indenture dated as of May 22, 2015 by and among Ameris Bancorp, Merchants &
Southern Banks of Florida, Incorporated and Wilmington Trust Company (pertaining to Indenture dated as of
March 30, 2006) (incorporated by reference to Exhibit 4.5 to Ameris Bancorp’s Current Report on Form 8-K
filed with the SEC on May 27, 2015).
Form of Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2036 (included as Exhibit A to
the Indenture filed as Exhibit 4.4 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on
May 27, 2015).
Indenture between Ameris Bancorp (as successor to Jacksonville Bancorp, Inc.) and Wilmington Trust
Company dated as of June 17, 2004 (incorporated by reference to Exhibit 4.1 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on March 14, 2016).
61
4.28
4.29
4.30
4.31
4.32
4.33
4.34
4.35
4.36
4.37
4.38
4.39
4.40
4.41
4.42
First Supplemental Indenture dated as of March 11, 2016 by and among Ameris Bancorp, Jacksonville
Bancorp, Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 4.2 to Ameris Bancorp’s
Current Report on Form 8-K filed with the SEC on March 14, 2016).
Form of Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2034 (included as Exhibit A to
the Indenture filed as Exhibit 4.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on
March 14, 2016).
Indenture between Ameris Bancorp (as successor to Jacksonville Bancorp, Inc.) and Wilmington Trust
Company dated as of September 15, 2005 (incorporated by reference to Exhibit 4.4 to Ameris Bancorp’s
Current Report on Form 8-K filed with the SEC on March 14, 2016).
Second Supplemental Indenture dated as of March 11, 2016 by and among Ameris Bancorp, Jacksonville
Bancorp, Inc. and Wilmington Trust (incorporated by reference to Exhibit 4.5 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on March 14, 2016).
Form of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2035 (included as
Exhibit A to the Indenture filed as Exhibit 4.4 to Ameris Bancorp’s Current Report on Form 8-K filed with
the SEC on March 14, 2016).
Indenture between Ameris Bancorp (as successor to Jacksonville Bancorp, Inc.) and Wilmington Trust
Company dated as of December 14, 2006 (incorporated by reference to Exhibit 4.7 to Ameris Bancorp’s
Current Report on Form 8-K filed with the SEC on March 14, 2016).
First Supplemental Indenture dated as of March 11, 2016 by and among Ameris Bancorp, Jacksonville
Bancorp, Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 4.8 to Ameris Bancorp’s
Current Report on Form 8-K filed with the SEC on March 14, 2016).
Form of Floating Rate Junior Subordinated Deferrable Interest Debenture Due 2036 (included as Exhibit A to
the Indenture filed as Exhibit 4.7 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on
March 14, 2016).
Indenture between Ameris Bancorp (as successor to Jacksonville Bancorp, Inc.) and Wells Fargo Bank,
National Association dated as of June 20, 2008 (incorporated by reference to Exhibit 4.10 to Ameris
Bancorp’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
First Supplemental Indenture dated as of March 11, 2016 by and between Ameris Bancorp and Wells Fargo
Bank, National Association (incorporated by reference to Exhibit 4.11 to Ameris Bancorp’s Current Report
on Form 8-K filed with the SEC on March 14, 2016).
Form of Junior Subordinated Debt Security Due 2038 (included as Exhibit A to the Indenture filed as Exhibit
4.10 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
Subordinated Debt Indenture dated as of March 13, 2017 by and between Ameris Bancorp and Wilmington
Trust, National Association (incorporated by reference to Exhibit 4.1 to Ameris Bancorp’s Current Report on
Form 8-K filed with the SEC on March 13, 2017).
First Supplemental Indenture, dated as of March 13, 2017, by and between Ameris Bancorp and Wilmington
Trust, National Association (incorporated by reference to Exhibit 4.2 to Ameris Bancorp’s Current Report on
Form 8-K filed with the SEC on March 13, 2017).
Form of 5.75% Fixed-to-Floating Rate Subordinated Note due 2027 (included as Exhibit A to the First
Supplemental Indenture filed as Exhibit 4.2 to Ameris Bancorp’s Current Report on Form 8-K filed with the
SEC on March 13, 2017).
Indenture dated as of November 10, 2005 by and between Ameris Bancorp (as successor to Hamilton State
Bancshares, Inc.) and Wilmington Trust Company (incorporated by reference to Exhibit 4.1 to Ameris
Bancorp’s Current Report on Form 8-K filed with the SEC on July 2, 2018).
62
4.43
4.44
4.45
4.46
4.47
4.48
4.49
4.50
4.51
4.52
4.53
4.54
4.55
4.56
4.57
Second Supplemental Indenture dated as of June 29, 2018 by and among Ameris Bancorp, Hamilton State
Bancshares, Inc. and Wilmington Trust Company (incorporated by reference to Exhibit 4.2 to Ameris
Bancorp’s Current Report on Form 8-K filed with the SEC on July 2, 2018).
Form of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debenture (included as Exhibit A to the
Indenture filed as Exhibit 4.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on July 2,
2018).
Indenture between Ameris Bancorp (as successor to Fidelity Southern Corporation) and U.S. Bank National
Association, dated as of June 26, 2003 (incorporated by reference to Exhibit 4.1 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on July 1, 2019).
First Supplemental Indenture, among Ameris Bancorp, Fidelity Southern Corporation and U.S. Bank National
Association, dated as of July 1, 2019 (incorporated by reference to Exhibit 4.2 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on July 1, 2019).
Form of Floating Rate Junior Subordinated Deferrable Interest Debentures due 2033 (incorporated by
reference to Exhibit 4.3 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on July 1,
2019).
Indenture between Ameris Bancorp (as successor to Fidelity Southern Corporation) and Wilmington Trust
Company, dated as of March 17, 2005 (incorporated by reference to Exhibit 4.4 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on July 1, 2019).
First Supplemental Indenture, among Ameris Bancorp, Fidelity Southern Corporation and Wilmington Trust
Company, dated as of July 1, 2019 (incorporated by reference to Exhibit 4.5 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on July 1, 2019).
Form of Floating Rate Junior Subordinated Deferrable Interest Debentures due 2035 (incorporated by
reference to Exhibit 4.6 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on July 1,
2019).
Indenture between Ameris Bancorp (as successor to Fidelity Southern Corporation) and Wilmington Trust
Company, dated as of August 20, 2007 (incorporated by reference to Exhibit 4.7 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on July 1, 2019).
First Supplemental Indenture, among Ameris Bancorp, Fidelity Southern Corporation and Wilmington Trust
Company, dated as of July 1, 2019 (incorporated by reference to Exhibit 4.8 to Ameris Bancorp’s Current
Report on Form 8-K filed with the SEC on July 1, 2019).
Form of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures due 2037 (incorporated by
reference to Exhibit 4.9 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on July 1,
2019).
Second Supplemental Indenture, dated as of December 6, 2019, by and between Ameris Bancorp and
Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.2 to Ameris
Bancorp's Current Report on Form 8-K filed with the SEC on December 6, 2019).
Form of 4.25% Fixed-to-Floating Subordinated Notes due 2029 (incorporated by reference to Exhibit 4.3 to
Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on December 6, 2019).
Form of Global Note representing Fixed/Floating Rate Subordinated Notes due 2030 (incorporated by
reference to Exhibit 4.56 to Ameris Bancorp's Annual Report on Form 10-K filed with the SEC on March 9,
2020).
Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of
1934
63
4.58
4.59
10.1*
10.2*
10.3*
10.4*
10.5*
10.6*
10.7*
10.8*
10.9*
10.10*
10.11*
10.12*
10.13*
10.14*
10.15*
Third Supplemental Indenture, dated as of September 28, 2020, by and between Ameris Bancorp and
Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.2 to Ameris
Bancorp's Current Report on Form 8-K filed with the SEC on September 28, 2020).
Form of 3.875% Fixed-to-Floating Subordinated Notes due 2030 (incorporated by reference to Exhibit 4.3 to
Ameris Bancorp's Current Report on Form 8-K filed with the SEC on September 28, 2020).
Supplemental Executive Retirement Agreement with Jon S. Edwards, dated as of November 7, 2012
(incorporated by reference to Exhibit 10.3 to Ameris Bancorp’s Form 10-Q filed with the SEC on
November 9, 2012).
Supplemental Executive Retirement Agreement with Nicole S. Stokes, dated as of November 7, 2012
(incorporated by reference to Exhibit 10.13 to Ameris Bancorp’s Annual Report on Form 10-K filed with the
SEC on March 1, 2018).
Ameris Bancorp 2014 Omnibus Equity Compensation Plan (incorporated by reference to Appendix A to
Ameris Bancorp’s Definitive Proxy Statement filed with the SEC on April 17, 2014).
Form of Restricted Stock Grant Agreement (incorporated by reference to Exhibit 99.4 to Ameris Bancorp’s
Registration Statement on Form S-8 filed with the SEC on November 26, 2014).
Form of Severance Protection and Restrictive Covenants Agreement for executive officers (incorporated by
reference to Exhibit 10.1 to Ameris Bancorp's Form 10-Q filed with the SEC on May 10, 2019).
Employment Agreement by and among Ameris Bancorp, Ameris Bank and James B. Miller, Jr. dated as of
December 17, 2018 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp's Form 10-Q filed with the
SEC on August 9, 2019).
Employment Agreement by and among Ameris Bancorp, Ameris Bank and H. Palmer Proctor, Jr. dated as of
December 17, 2018 (incorporated by reference to Exhibit 10.2 to Ameris Bancorp's Form 10-Q filed with the
SEC on August 9, 2019).
Amendment to Employment Agreement by and among Ameris Bancorp, Ameris Bank and H. Palmer Proctor,
Jr. dated as of June 30, 2019 (incorporated by reference to Exhibit 10.3 to Ameris Bancorp's Form 10-Q filed
with the SEC on August 9, 2019).
Supplemental Executive Retirement Agreement with Lawton E. Bassett, III, dated as of November 7, 2012
(incorporated by reference to Exhibit 10.16 to Ameris Bancorp's Form 10-K filed with the SEC on March 9,
2020).
Form of Performance Stock Unit Grant Agreement (incorporated by reference to Exhibit 10.17 to Ameris
Bancorp's Form 10-K filed with the SEC on March 9, 2020).
Supplemental Executive Retirement Agreement with James A. LaHaise, dated as of November 10, 2015
(incorporated by reference to Exhibit 10.15 to Ameris Bancorp's Form 10-K filed with the SEC on February
26, 2021).
Ameris Bancorp 2021 Omnibus Equity Incentive Plan, as amended and restated through July 26, 2022
(incorporated by reference to Exhibit 10.1 to Ameris Bancorp’s Form 10-Q filed with the SEC on August 5,
2022).
Form of Restricted Share Award Agreement under the 2021 Omnibus Equity Incentive Plan (incorporated by
reference to Exhibit 10.2 to Ameris Bancorp's Form 10-Q filed with the SEC on August 9, 2021).
Form of Restricted Share Unit Award Agreement under the 2021 Omnibus Equity Incentive Plan
(incorporated by reference to Exhibit 10.3 to Ameris Bancorp's Form 10-Q filed with the SEC on August 9,
2021).
Form of Performance Unit Award Agreement under the 2021 Omnibus Equity Incentive Plan (incorporated
by reference to Exhibit 10.4 to Ameris Bancorp's Form 10-Q filed with the SEC on August 9, 2021).
64
10.16*
Summary of Director Compensation (incorporated by reference to Exhibit 10.2 to Ameris Bancorp's Form 10-
Q filed with the SEC on August 5, 2022).
21.1
23.1
23.2
31.1
31.2
32.1
32.2
Schedule of Subsidiaries of Ameris Bancorp.
Consent of KPMG LLP.
Consent of Crowe LLP.
Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer.
Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer.
Section 1350 Certification by Chief Executive Officer.
Section 1350 Certification by Chief Financial Officer.
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data
File because its XBRL tags are embedded within the Inline XBRL document.
* Management contract or a compensatory plan or arrangement.
65
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Management’s Report on Internal Control Over Financial Reporting
Reports of Independent Registered Public Accounting Firm (KPMG LLP, Atlanta, GA, Auditor Firm ID: 185)
Report of Independent Registered Public Accounting Firm (Crowe LLP, Atlanta, GA, Auditor Firm ID: 173)
Consolidated Balance Sheets – December 31, 2022 and 2021
Consolidated Statements of Income – Years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Comprehensive Income – Years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Shareholders’ Equity – Years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Cash Flows – Years ended December 31, 2022, 2021 and 2020
Notes to Consolidated Financial Statements
Page
F-2
F-3
F-6
F-7
F-8
F-9
F-10
F-12
F-14
F-1
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Ameris Bancorp and subsidiaries (the “Company”) 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 Exchange Act. 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, 2022. In
making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control-Integrated Framework (2013). Based on this assessment and those criteria, management
believes that the Company maintained effective internal control over financial reporting as of December 31, 2022.
KPMG LLP, the Company’s independent registered public accounting firm, has issued a report on the effectiveness of the
Company’s internal control over financial reporting. That report is included in this Annual Report on page F-5.
/s/ H. Palmer Proctor, Jr.
H. Palmer Proctor, Jr.
Chief Executive Officer
(principal executive officer)
/s/ Nicole S. Stokes
Nicole S. Stokes
Corporate EVP and Chief Financial Officer
(principal accounting and financial officer)
F-2
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Ameris Bancorp:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Ameris Bancorp and subsidiaries (the Company) as of December 31, 2022
and 2021, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the years then
ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and
its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28,
2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or
fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to
the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a
critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to
which it relates.
Quantitative component of the allowance for credit losses on loans evaluated on a collective basis
As discussed in Notes 1 and 4 to the consolidated financial statements, the Company’s total allowance for credit losses on loans as
of December 31, 2022 was $205.7 million, a portion of which related to the quantitative component of the allowance for credit
losses on loans evaluated on a collective (pool) basis for the commercial, financial and agricultural, consumer installment, real
estate - construction and development, real estate - commercial and farmland and real estate - residential loan segments (the
quantitative collective ACL). The Company estimated the quantitative collective ACL utilizing a discounted cash flow (DCF)
methodology applied to their loan pools segregated by similar risk characteristics. The Company’s DCF methodology generates
cash flow projections at the loan level wherein payment expectations are adjusted for estimated prepayment speeds, curtailments,
time to recovery, probability of default (PD), and loss given default (LGD). The modeling of expected prepayment speeds and
curtailment rates are based on historical internal data, and consider current conditions and reasonable and supportable forecasts of
future economic conditions. The Company uses regression analysis of historical internal and peer loss data to determine suitable
macroeconomic variables to utilize when modeling lifetime PD and LGD. This analysis also determines how expected PD and LGD
will react to forecasted levels of the macroeconomic variables over a reasonable and supportable forecast period. At the end of the
four-quarter reasonable and supportable forecast period, the Company reverts to a historical loss rate on a straight-line basis over
four quarters. Management leverages economic projections comprising multiple weighted scenarios from an independent third
party to inform its macroeconomic variable forecasts over the reasonable and supportable forecast period. A portion of the
allowance for credit losses is comprised of qualitative factors for model limitations and risk uncertainty as well as for loan segment
specific risks that cannot be addressed in the quantitative methods.
F-3
We identified the assessment of the quantitative collective ACL as a critical audit matter. A high degree of audit effort, including
specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the quantitative
collective ACL due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the
methodology, including the models used to estimate the PDs and LGDs as well as the selection and weighting of the economic
projections and selection of macroeconomic variables. The assessment also included an evaluation of the conceptual soundness and
performance of the PD and LGD models.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the
operating effectiveness of certain internal controls related to the Company’s measurement of the quantitative collective ACL
estimate, including controls over the:
•
•
•
•
•
development of the quantitative collective ACL methodology
continued use and appropriateness of changes to the PD and LGD models
selection and weighting of the economic projections and selection of macroeconomic variables
conceptual soundness and performance of PD and LGD models and
analysis of the allowance for credit losses results, trends, and ratios.
We evaluated the Company’s process to develop the quantitative collective ACL estimate by testing certain sources of data, factors,
and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In
addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:
•
•
•
evaluating the Company’s quantitative collective ACL methodology for compliance with U.S. generally accepted accounting
principles
evaluating the selection of the economic projections, including weighting of the economic projections, and selection of
macroeconomic variables used in the PD and LGD models by comparing them to relevant Company-specific metrics and
trends and relevant industry practices and
assessing the conceptual soundness and performance of the PD and LGD models by inspecting model documentation to
determine whether the models are suitable for their intended use.
/s/ KPMG LLP
We have served as the Company’s auditor since 2021.
Atlanta, Georgia
February 28, 2023
F-4
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Ameris Bancorp:
Opinion on Internal Control Over Financial Reporting
We have audited Ameris Bancorp and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2022, based
on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as
of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of income,
comprehensive income, shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated
financial statements), and our report dated February 28, 2023 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’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, included in the accompanying Management's Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of
internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
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.
/s/ KPMG LLP
Atlanta, Georgia
February 28, 2023
F-5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Crowe LLP
Independent Member Crowe Global
Board of Directors and Stockholders
Ameris Bancorp
Atlanta, Georgia
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows of
Ameris Bancorp and Subsidiaries (the "Company") for the year ended December 31, 2020, and the related notes (collectively referred to as
the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the results of its operations and its
cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of
America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit
included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis
for our opinion.
/s/ Crowe LLP
We served as the Company's auditor from 2014 through 2021.
Atlanta, Georgia
February 26, 2021
F-6
AMERIS BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2022 and 2021
(dollars in thousands, except per share data)
Assets
Cash and due from banks
Interest-bearing deposits in banks
Federal funds sold
Cash and cash equivalents
2022
2021
$
284,567 $
833,565
—
1,118,132
307,813
3,736,844
20,000
4,064,657
Debt securities available-for-sale, at fair value, net of allowance for credit losses of $75 and $—
1,500,060
592,621
Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair
value of $114,538 and $78,206)
Other investments
Loans held for sale, at fair value
134,864
110,992
392,078
79,850
47,552
1,254,632
Loans, net of unearned income
Allowance for credit losses
Loans, net
Other real estate owned, net
Premises and equipment, net
Goodwill
Other intangible assets, net
Cash value of bank owned life insurance
Other assets
Total assets
Liabilities
Deposits
Noninterest-bearing
Interest-bearing
Total deposits
Securities sold under agreements to repurchase
Other borrowings
Subordinated deferrable interest debentures, net
Other liabilities
Total liabilities
Commitments and Contingencies (Note 19)
19,855,253
(205,677)
19,649,576
15,874,258
(167,582)
15,706,676
843
220,283
1,015,646
106,194
388,405
416,213
3,810
225,400
1,012,620
125,938
331,146
413,419
$ 25,053,286 $ 23,858,321
$ 7,929,579 $ 7,774,823
11,890,730
11,533,159
19,665,553
19,462,738
5,845
—
739,879
1,875,736
126,328
128,322
354,265
389,090
20,891,870
21,855,886
Shareholders’ Equity
Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding
Common stock, par value $1; 200,000,000 shares authorized; 72,263,727 and 72,017,126 shares issued
Capital surplus
Retained earnings
Accumulated other comprehensive income (loss), net of tax
Treasury stock, at cost, 2,894,677 and 2,407,898 shares
Total shareholders’ equity
Total liabilities and shareholders’ equity
—
—
72,264
1,935,211
1,311,258
(46,507)
(74,826)
3,197,400
72,017
1,924,813
1,006,436
15,590
(52,405)
2,966,451
$ 25,053,286 $ 23,858,321
See notes to consolidated financial statements.
F-7
AMERIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands, except per share data)
2022
2021
2020
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
Total interest income
Interest expense
Interest on deposits
Interest on other borrowings
Total interest expense
Net interest income
Provision for loan losses
Provision for unfunded commitments
Provision for other credit losses
Provision for credit losses
Net interest income after provision for credit losses
Noninterest income
Service charges on deposit accounts
Mortgage banking activity
Other service charges, commissions and fees
Net gain on securities
Gain on sale of SBA loans
Other noninterest income
Total noninterest income
Noninterest expense
Salaries and employee benefits
Occupancy and equipment
Advertising and marketing
Amortization of intangible assets
Data processing and communications expenses
Legal and other professional fees
Credit resolution-related expenses
Merger and conversion charges
FDIC insurance
Loan servicing expenses
Other noninterest expenses
Total noninterest expense
Income before income tax expense
Income tax expense
Net income
Basic earnings per common share
Diluted earnings per common share
Weighted average common shares outstanding
Basic
Diluted
$
834,969 $
34,656
1,176
23,008
77
893,886
676,089 $
22,524
575
3,882
42
703,112
56,105
36,755
92,860
801,026
52,610
19,226
(139)
71,697
729,329
44,499
184,904
3,875
203
5,552
45,391
284,424
319,719
51,361
12,481
19,744
49,228
16,439
29
1,212
8,063
36,835
45,544
560,655
453,098
106,558
22,357
25,428
47,785
655,327
(35,081)
332
(616)
(35,365)
690,692
45,106
285,900
4,188
515
6,623
23,212
365,544
337,776
48,066
8,434
14,965
45,976
11,920
3,538
4,206
5,614
26,481
53,148
560,124
496,112
119,199
$
$
$
346,540 $
376,913 $
5.01 $
4.99 $
5.43 $
5.40 $
69,194
69,420
69,432
69,761
690,909
33,086
623
1,739
146
726,503
59,067
29,683
88,750
637,753
125,488
19,062
830
145,380
492,373
44,145
374,077
3,914
5
7,226
17,133
446,500
360,278
52,349
8,046
19,612
46,017
15,972
5,106
1,391
14,078
20,910
54,870
598,629
340,244
78,256
261,988
3.78
3.77
69,256
69,426
See notes to consolidated financial statements.
F-8
AMERIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands)
Net income
2022
2021
2020
$
346,540 $
376,913 $
261,988
Other comprehensive income (loss)
Net unrealized holding gains (losses) arising during period on investment
securities available-for-sale, net of tax expense (benefit) of ($16,507), ($4,762)
and $4,084
Net unrealized gains (losses) on cash flow hedge during the period, net of tax
expense (benefit) of $—, $— and $39
Total other comprehensive income (loss)
(62,097)
(17,915)
15,363
—
(62,097)
—
(17,915)
147
15,510
Comprehensive income
$
284,443 $
358,998 $
277,498
See notes to consolidated financial statements.
F-9
Balance at beginning of
period
Issuance of restricted
shares
Forfeitures of restricted
shares
Exercise of stock
options
Share-based
compensation
Purchase of treasury
shares
Net income
Dividends on common
shares ($0.60 per share)
Cumulative effect of
change in accounting
for credit losses
Other comprehensive
income (loss) during
the period
Balance at December 31,
2020
Issuance of restricted
shares
Forfeitures of restricted
shares
Exercise of stock
options
Share-based
compensation
Purchase of treasury
shares
Net income
Dividends on common
shares ($0.60 per share)
Other comprehensive
income (loss) during
the period
Balance at December 31,
2021
AMERIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands, except per share data)
Common Stock
Shares
Amount
Capital
Surplus
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss),
Net of Tax
Treasury Stock
Shares
Amount
Total
Shareholders'
Equity
71,499,829 $ 71,500 $ 1,907,108 $ 507,950 $
17,995
1,995,996 $ (34,971) $
2,469,582
164,476
164
125
(12,250)
(12)
(209)
101,650
102
2,160
—
—
—
—
—
261,988
(41,724)
4,101
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(56,704)
—
—
15,510
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
289
(221)
2,262
4,101
216,228
(7,995)
(7,995)
—
—
—
—
—
—
—
—
261,988
(41,724)
(56,704)
15,510
71,753,705 $ 71,754 $ 1,913,285 $ 671,510 $
33,505
2,212,224 $ (42,966) $
2,647,088
99,308
99
500
(2,695)
(3)
(50)
166,808
167
4,365
—
—
—
—
—
—
—
—
—
6,713
—
—
—
—
—
—
—
—
—
376,913
(41,987)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
599
(53)
4,532
6,713
195,674
(9,439)
(9,439)
—
—
—
—
—
376,913
(41,987)
(17,915)
—
(17,915)
—
72,017,126 $ 72,017 $ 1,924,813 $ 1,006,436 $
15,590
2,407,898 $ (52,405) $
2,966,451
F-10
Balance at January 1,
2022
Issuance of restricted
shares
Forfeitures of restricted
shares
Exercise of stock
options
Share-based
compensation
Purchase of treasury
shares
Net income
Dividends on common
shares ($0.60 per share)
Other comprehensive
income (loss) during
the period
Balance at December 31,
2022
AMERIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity (Continued)
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands, except per share data)
Common Stock
Shares
Amount
Capital
Surplus
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss),
Net of Tax
Treasury Stock
Shares
Amount
Total
Shareholders'
Equity
72,017,126 $ 72,017 $ 1,924,813 $ 1,006,436 $
15,590
2,407,898 $ (52,405) $
2,966,451
165,687
166
1,175
(14,889)
(15)
(128)
95,803
—
—
—
—
—
96
—
—
—
—
—
2,703
6,648
—
—
—
—
—
—
—
—
—
346,540
(41,718)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,341
(143)
2,799
6,648
486,779
(22,421)
(22,421)
—
—
—
—
—
346,540
(41,718)
(62,097)
—
(62,097)
—
72,263,727 $ 72,264 $ 1,935,211 $ 1,311,258 $
(46,507) 2,894,677 $ (74,826) $
3,197,400
See notes to consolidated financial statements.
F-11
AMERIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands)
Operating Activities
Net income
Adjustments to reconcile net income to net cash used in operating activities:
$
346,540 $
376,913 $
261,988
2022
2021
2020
Depreciation
Net losses on sale or disposal of premises and equipment
Net write-downs on other assets
Provision for credit losses
Net write-downs and (gains) losses on sale of other real estate owned
Share-based compensation expense
Amortization of intangible assets
Amortization of operating lease right of use assets
Provision for deferred taxes
Net amortization of debt securities available-for-sale
Net amortization of debt securities held-to-maturity
Net amortization of other investments
Net gain on securities
Accretion of discount on purchased loans, net
Net amortization on other borrowings
Amortization of subordinated deferrable interest debentures
Loan servicing asset impairment (recovery)
Originations of mortgage loans held for sale
Payments received on mortgage loans held for sale
Proceeds from sales of mortgage loans held for sale
Net (gains) losses on mortgage loans held for sale
Originations of SBA loans
Proceeds from sales of SBA loans
Net gains on sales of SBA loans
Increase in cash surrender value of bank owned life insurance
Gain on bank owned life insurance proceeds
Gains on sale of other loans held for sale
Loss on sale of loans
Gain on sale of mortgage servicing rights
Changes in FDIC loss-share receivable/payable, net of cash payments received
(Increase) decrease in interest receivable
Increase (decrease) in interest payable
Increase (decrease) in taxes payable
Change attributable to other operating activities
Net cash provided by operating activities
18,416
156
—
71,697
(1,773)
6,706
19,744
12,639
(35,677)
(644)
37
722
(203)
285
433
1,994
(21,824)
(3,949,676)
23,324
4,493,742
93,133
(46,479)
57,171
(5,552)
(7,305)
(55)
—
—
(1,356)
—
(20,125)
6,217
5,177
(4,991)
1,062,473
17,225
2,882
260
(35,365)
538
7,948
14,965
15,739
38,411
2,786
40
62
(515)
(16,349)
438
1,983
(14,530)
(7,780,436)
53,313
7,459,163
(152,422)
(67,865)
71,610
(6,623)
(5,385)
(603)
(457)
—
—
—
19,337
(1,175)
7,005
247
9,140
15,759
777
1,715
145,380
1,049
3,810
19,612
19,740
(7,929)
6,153
—
—
(5)
(27,351)
256
1,940
40,067
(9,067,706)
43,663
9,864,464
(387,124)
(97,017)
109,296
(7,226)
(3,630)
(948)
—
386
—
997
(23,892)
(6,036)
(12,062)
(97,730)
798,396
F-12
AMERIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands)
2022
2021
2020
Investing Activities, net of effects of business combinations
Proceeds from maturities of time deposits in other banks
Purchases of securities available-for-sale
Purchases of securities held-to-maturity
Proceeds from prepayments and maturities of securities available-for-sale
Proceeds from prepayments and maturities of securities held-to-maturity
Net (increase) decrease in other investments
Net increase in loans
Payments received on other loans held for sale
Purchase of loan pool
Proceeds from sale of mortgage servicing rights
Purchases of premises and equipment
Proceeds from sale of premises and equipment
Proceeds from sales of other real estate owned
Purchase of bank owned life insurance
Payments paid to FDIC under loss-sharing agreements
Proceeds from bank owned life insurance
Proceeds from sales of other loans held for sale
Proceeds from sales of loans
Net cash proceeds received from (paid in) acquisitions
Net cash used in investing activities
Financing Activities, net of effects of business combinations
Net increase (decrease) in deposits
Net decrease in securities sold under agreements to repurchase
Proceeds from other borrowings
Repayment of other borrowings
Repayment of subordinated deferrable interest debentures
Proceeds from exercise of stock options
Dividends paid - common stock
Purchase of treasury shares
Net cash provided by financing activities
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period
Cash, cash equivalents and restricted cash at end of period
Supplemental Disclosures of Cash Flow Information
Cash paid during the year for:
Interest
Income taxes
Loans transferred to other real estate owned
Loans transferred from loans held for sale to loans held for investment
Loans transferred from loans held for investment to loans held for sale
Loans provided for the sales of other real estate owned
Right-of-use assets obtained in exchange for new operating lease liabilities
Assets acquired in business combination
Liabilities assumed in business combination
Change in unrealized gain (loss) on securities available-for-sale, net of tax
Change in unrealized gain on cash flow hedge, net of tax
$
— $
(1,172,323)
(57,408)
186,849
2,357
(63,959)
(3,345,287)
—
(472,266)
119,845
(13,568)
46
5,086
(50,000)
—
101
—
—
(14,003)
(4,874,530)
249 $
—
(80,355)
364,907
465
(18,897)
(566,237)
9,136
—
—
(25,448)
1,958
11,790
(150,000)
—
1,309
156,803
—
(126,664)
(420,984)
(202,815) $
(5,845)
3,950,000
(2,814,576)
—
2,799
(41,610)
(22,421)
865,532
2,708,021 $
(5,796)
—
(296,325)
—
4,532
(41,798)
(9,439)
2,359,195
—
—
—
435,204
—
37,222
(1,733,057)
12,954
—
—
(18,116)
718
14,059
—
(20,639)
3,381
—
69,965
(2,417)
(1,200,726)
2,932,864
(8,994)
7,202,981
(8,176,491)
(5,155)
2,262
(41,685)
(7,995)
1,897,787
(2,946,525)
4,064,657
1,118,132 $
1,947,351
2,117,306
4,064,657 $
1,495,457
621,849
2,117,306
86,643 $
133,894 $
346 $
196,891 $
— $
2,288 $
7,226 $
3,216 $
(10,787) $
(62,097) $
— $
48,960 $
71,807 $
4,258 $
170,435 $
— $
1,052 $
12,792 $
886,553 $
690,116 $
(17,915) $
— $
94,786
98,609
7,398
196,804
179,407
767
54,107
—
—
15,363
147
$
$
$
$
$
$
$
$
$
$
$
$
$
See notes to consolidated financial statements
F-13
AMERIS BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Ameris Bancorp and subsidiaries (the “Company” or “Ameris”) is a financial holding company headquartered in Atlanta,
Georgia, and whose primary business is presently conducted by Ameris Bank, its wholly owned banking subsidiary (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 concentrated in select markets in Georgia, Alabama, Florida, North Carolina and
South Carolina. The Bank also engages in mortgage banking activities, and, as such, originates, acquires, sells and services one-
to-four family residential mortgage loans in the Southeast. The Bank also originates, administers and services commercial
insurance premium loans and SBA loans made to borrowers throughout the United States. The Company and the Bank are
subject to the regulations of certain federal and state agencies and are periodically examined by those regulatory agencies.
Basis of Presentation and Accounting Estimates
The consolidated financial statements include the accounts of the Company and its subsidiaries. Variable Interest Entities for
which the Company or its subsidiaries have been determined to be the primary beneficiary are also consolidated. 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 sheets and the reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
Acquisition Accounting
In accounting for business combinations, the Company uses the acquisition method of accounting in accordance with ASC 805,
Business Combinations. Under the acquisition method of accounting, assets acquired, liabilities assumed and consideration
exchanged are recorded at their respective acquisition date fair values. Any identifiable intangible assets that are acquired in a
business combination are recognized at fair value on the acquisition date. Identifiable intangible assets are recognized
separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred,
licensed, rented or exchanged separately from the entity). If the consideration given exceeds the fair value of the net assets
received, goodwill is recognized. Determining the fair value of assets and liabilities is a complicated process involving
significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are subject to
refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair
values becomes available. In addition, management will assess and record the deferred tax assets and deferred tax liabilities
resulting from differences in the carrying value of acquired assets and assumed liabilities for financial reporting purposes and
their basis for income tax purposes, including acquired net operating loss carryforwards and other acquired assets with built-in
losses that are expected to be settled or otherwise recovered in future periods where the realization of such benefits would be
subject to applicable limitations under Section 382 of the Internal Revenue Code of 1986, as amended.
Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date. Loans which
have experienced more-than-insignificant deterioration in credit quality since origination, as determined by the Company's
assessment, are considered purchased credit deteriorated ("PCD") loans. At acquisition, expected credit losses for purchased
loans with credit deterioration are initially recognized as an allowance for credit losses and are added to the purchase price to
determine the amortized cost basis of the loans. Any non-credit discount or premium resulting from acquiring such loans is
recognized as an adjustment to interest income over the remaining lives of the loans. Subsequent to the acquisition date, the
change in the allowance for credit losses on PCD loans is recognized through provision for credit losses. The non-credit
discount or premium is accreted or amortized, respectively, into interest income over the remaining life of the PCD loan on a
level-yield basis. Purchased loans which do not meet the criteria to be classified as PCD loans are recorded at fair value as of
the acquisition date and no allowance for credit losses is carried over from the seller. The resulting purchase discount or
premium is accreted or amortized, respectively, into interest income over the remaining life of the non-PCD loan on a level-
yield basis.
F-14
Transfer of financial assets
Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over
transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the
right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and
the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before
their maturity.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, cash items in process of collection,
amounts due from banks, interest-bearing deposits in banks, federal funds sold and restricted cash. Restricted cash held for
securitization investors, which are reported on the Company's consolidated balance sheets in cash and due from banks, was $0
and $43.0 million at December 31, 2022 and 2021, respectively.
Investment Securities
The Company classifies its debt securities in one of three categories: (i) trading, (ii) held-to-maturity or (iii) available-for-sale.
Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities
are those securities for which the Company has the ability and intent to hold until maturity. All other debt securities are
classified as available-for-sale.
Available-for-sale securities are carried at fair value. Unrealized holding gains and losses, net of the related deferred tax effect,
on available-for-sale securities are excluded from earnings and are reported in other comprehensive income as a separate
component of shareholders’ equity until realized. Held-to-maturity securities are carried at amortized cost.
The amortization of premiums and accretion of discounts are recognized in interest income using methods approximating the
interest method over the expected life of the securities. Realized gains and losses, determined on the basis of the cost of specific
securities sold, are included in earnings on the trade date. The Company has made a policy election to exclude accrued interest
from the amortized cost basis of debt securities and report accrued interest in other assets in the consolidated balance sheets. A
debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent
or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on nonaccrual is reversed
against interest income. There was no accrued interest related to debt securities reversed against interest income for the years
ended December 31, 2022, 2021 and 2020. Accrued interest receivable on debt securities totaled $7.7 million and $2.4 million
as of December 31, 2022 and 2021, respectively.
The Company evaluates available-for-sale securities in an unrealized loss position to determine if credit-related impairment
exists. The Company first evaluates whether it intends to sell or more likely than not will be required to sell an impaired
security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in
earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, the
Company evaluates whether the decline in fair value is attributable to credit or resulted from other factors. If credit-related
impairment exists, the Company recognizes an allowance for credit losses ("ACL"), limited to the amount by which the fair
value is less than the amortized cost basis. Refer to Note 3 for additional information related to the ACL for available-for-sale
securities. Any impairment not recognized through an ACL is recognized in other comprehensive income, net of tax, as a non
credit-related impairment.
The Company uses a systematic methodology to determine its ACL for debt securities held-to-maturity considering the effects
of past events, current conditions, and reasonable and supportable forecasts on the collectability of the portfolio. The ACL is a
valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held-
to-maturity portfolio. The Company monitors the held-to-maturity portfolio on a quarterly basis to determine whether a
valuation account would need to be recorded. As of December 31, 2022 and 2021, the Company had $134.9 million and $79.9
million held-to-maturity securities, respectively, and no related valuation account.
Other Investments
Other investments include Federal Home Loan Bank (“FHLB”) stock. These investments do not have readily determinable fair
values due to restrictions placed on transferability and therefore are carried at cost. These investments are periodically evaluated
for impairment based on ultimate recovery of par value or cost basis. Both cash and stock dividends are reported as income.
F-15
Also included in other investments are 57,611 Visa Class B restricted shares owned by the Bank with a carrying value of
approximately $242,000 as of December 31, 2022. These shares are transferable only under limited circumstances until they
can be converted into the publicly traded Visa Class A common shares. This conversion will not occur until the settlement of
certain litigation which will be indemnified by Visa members, including the Bank. Visa funded an escrow account from its
initial public offering to settle these litigation claims. Should this escrow account be insufficient to cover these litigation claims,
Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Visa Class B conversion
ratio to unrestricted Visa Class A shares. As of December 31, 2022, the conversion ratio was 1.5991.
Loans Held for Sale
Mortgage and SBA loans held for sale are carried at the estimated fair value, as determined by outstanding commitments from
third party investors in the secondary market. Adjustments to reflect unrealized gains and losses resulting from changes in fair
value of mortgage loans held for sale and realized gains and losses upon ultimate sale of the mortgage loans held for sale are
classified as mortgage banking activity in the consolidated statements of income. Adjustments to reflect unrealized gains and
losses resulting from changes in fair value of SBA loans held for sale and realized gains and losses upon ultimate sale of the
SBA loans held for sale are classified as gain on sale of SBA loans in the consolidated statements of income. Other loans held
for sale are carried at the lower of amortized cost or fair value.
Servicing Rights
When mortgage and SBA loans are sold with servicing retained, servicing rights are initially recorded at fair value with the
income statement effect recorded in mortgage banking activity or gain on sale of SBA loans accordingly. Fair value is based on
market prices for comparable servicing contracts, when available or alternatively, is based on a valuation model that calculates
the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the
amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the
period of, the estimated future net servicing income of the underlying loans. The Company assumed the servicing of certain
indirect automobile loans in an acquisition. The servicing asset was recorded at fair value on the date of acquisition and follows
the amortization method.
Servicing fee income, which is reported on the income statement in mortgage banking activity for serviced mortgage loans and
other noninterest income for all other serviced loans, is recorded for fees earned for servicing loans. The fees are based on a
contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. The
amortization of servicing rights is netted against loan servicing fee income.
Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount.
Impairment is determined by stratifying rights into strata based on predominant risk characteristics, such as interest rate, loan
type and investor type. Impairment is recognized for a particular stratum through a valuation allowance, to the extent that fair
value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists
for a particular stratum, a reduction of the valuation allowance may be recorded as an increase to income. Changes in valuation
allowances related to servicing rights are reported in mortgage banking activity and other noninterest income on the income
statement. Refer to Note 23 for additional information related to the valuation allowance on servicing rights. The fair values of
servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and
default rates and losses.
Loans
Loans are reported at their outstanding principal balances less unearned income, net of deferred fees, origination costs and
unaccreted or unamortized non-credit purchase discounts or premiums, respectively. Interest income is accrued on the
outstanding principal balance. For all classes of loans, the accrual of interest on loans is discontinued when, in management’s
opinion, the borrower may be unable to make payments as they become due, unless the loan is well secured and in the process
of collection. Interest income on mortgage and commercial loans is discontinued and placed on nonaccrual status at the time the
loan is 90 days delinquent unless the loan is well secured and in process of collection. Mortgage loans and commercial loans are
charged off to the extent principal or interest is deemed uncollectible. Consumer loans continue to accrue interest until they are
charged off, generally between 90 and 120 days past due, unless the loan is in the process of collection. All interest accrued,
but not collected for loans that are placed on nonaccrual or charged off, is reversed against interest income. Interest received on
nonaccrual loans is applied against principal 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.
F-16
Allowance for Credit Losses - Loans
Under the current expected credit loss model, the allowance for credit losses (“ACL”) on loans is a valuation allowance
estimated at each balance sheet date in accordance with GAAP that is deducted from the loans’ amortized cost basis to present
the net amount expected to be collected on the loans.
The Company estimates the ACL on loans based on the underlying loans’ amortized cost basis, which is the amount at which
the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, and
net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the
Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy
election to exclude accrued interest from the measurement of ACL. Accrued interest receivable on loans is reported in other
assets on the consolidated balance sheets and totaled $69.3 million and $54.8 million at December 31, 2022 and 2021,
respectively. As of December 31, 2022 and 2021, the Company carried an ACL of $0 and $214,000, respectively, related to
deferred interest on loans modified under its Disaster Relief Program.
Expected credit losses are reflected in the allowance for credit losses through a charge to provision for credit losses. The
Company measures expected credit losses of loans on a collective (pool) basis, when the loans share similar risk characteristics.
Depending on the nature of the pool of loans with similar risk characteristics, the Company estimates a quantitative component
which currently uses the discounted cash flow (“DCF”) method or the PD×LGD method which may be adjusted for qualitative
factors as discussed further below.
The Company’s methodologies for estimating the ACL consider available relevant information about the collectability of cash
flows, including information about past events, current conditions, and reasonable and supportable forecasts. The
methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the
measurement date, and forecasts about future economic conditions over a period that has been determined to be reasonable and
supportable, to the identified pools of loans with similar risk characteristics for which the historical loss experience was
observed. The Company’s methodologies revert back to historical loss information on a straight-line basis over four quarters
when it can no longer develop reasonable and supportable forecasts.
The Company has identified the following pools of loans with similar risk characteristics for measuring expected credit losses:
Commercial, financial, and agricultural - These loans and leases include both secured and unsecured borrowings for working
capital, expansion, crop production, equipment finance and other business purposes. Commercial, financial and agricultural
loans also include certain U.S. Small Business Administration (“SBA”) loans, including loans outstanding under the SBA's
Paycheck Protection Program ("PPP"). Short-term working capital loans are secured by non-real estate collateral such as
accounts receivable, crops, inventory and equipment. The Bank evaluates the financial strength, cash flow, management, credit
history of the borrower and the quality of the collateral securing the loan. The Bank often requires personal guarantees and
secondary sources of repayment on commercial, financial and agricultural loans.
Consumer - These loans include home improvement loans, direct automobile loans, boat and recreational vehicle financing,
personal lines of credit, and both secured and unsecured personal loans. Consumer loans carry greater risks than other loans, as
the collateral can consist of rapidly depreciating assets such as automobiles and equipment that may not provide an adequate
source of repayment of the loan in the case of default.
Indirect automobile - Indirect automobile loans are secured by automobile collateral, generally new and used cars and trucks
from auto dealers that operate within selected states. Repayment of these loans depends largely on the personal income of the
borrowers which can be affected by changes in economic conditions such as unemployment levels. Collateral consists of
rapidly depreciating assets that may not provide an adequate source of repayment of the loan in the event of default.
Mortgage warehouse - Mortgage Warehouse facilities are provided to unaffiliated mortgage origination companies and are
collateralized by one-to-four family residential loans or mortgage servicing rights. The originator closes new mortgage loans
with the intent to sell these loans to third party investors for a profit. The Bank provides funding to the mortgage companies for
the period between the origination and their sale of the loan. The Bank has a policy that requires that it separately validate that
each residential mortgage loan was underwritten consistent with the underwriting requirements of the final investor or market
standards prior to advancing funds. The Bank is repaid with the proceeds received from sale of the mortgage loan to the final
investor.
F-17
Municipal - Municipal loans consists of loans made to counties, municipalities and political subdivisions. The source of
repayment for these loans is either general revenue of the municipality or revenues of the project being financed by the loan.
These loans may be secured by real estate, machinery, equipment or assignment of certain revenues.
Premium Finance - Premium finance provides loans for the acquisition of certain commercial insurance policies. Repayment of
these loans is dependent on the cash flow of the insured which can be affected by changes in economic conditions. The Bank
has procedures in place to cancel the insurance policy after default by the borrower to minimize the risk of loss.
Real Estate - Construction and Development - Construction and development loans include loans for the development of
residential neighborhoods, one-to-four family home residential construction loans to builders and consumers, and commercial
real estate construction loans, primarily for owner-occupied and investment properties. The Company limits its construction
lending risk through adherence to established underwriting procedures.
Real Estate - Commercial and Farmland - Commercial real estate loans include loans secured by owner-occupied commercial
buildings for office, storage, retail, farmland and warehouse space. They also include non-owner occupied commercial
buildings such as leased retail and office space. Lodging (hotel / motel) loans are a subsegment of commercial real estate loans.
Commercial real estate loans may be larger in size and may involve a greater degree of risk than one-to-four family residential
mortgage loans. Payments on such loans are often dependent on successful operation or management of the properties.
Real Estate - Residential - The Company's residential loans include permanent mortgage financing and home equity lines of
credit secured by residential properties located within the Bank's market areas. Residential real estate loans also include
purchased loan pools secured by residential properties located outside the Bank's market area.
Discounted Cash Flow Method
The Company uses the discounted cash flow method to estimate expected credit losses for the commercial, financial and
agricultural, consumer, real estate - construction and development, real estate - commercial and farmland and real estate -
residential loan segments. For each of these loan segments, the Company generates cash flow projections at the loan level
wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of
default, and loss given default. The modeling of expected prepayment speeds and curtailment rates are based on historical
internal data. The prepayment speeds additionally utilize a forward-looking third-party prepayment model, which considers
current conditions and reasonable and supportable forecasts of future economic conditions.
The Company uses regression analysis of historical internal and peer loss data to determine suitable macroeconomic variables
to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected
probability of default and loss given default will react to forecasted levels of the macroeconomic variables over a reasonable
and supportable forecast period. For all loan pools utilizing the DCF method, the Company uses a combination of national and
regional data including gross domestic product, commercial real estate price indices, home price indices, unemployment rates,
retail sales, and rental vacancy rates depending on the nature of the underlying loan pool and how well that macroeconomic
variable correlates to expected future losses.
For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and
reverts back to a historical loss rate over four quarters on a straight-line basis. Management leverages economic projections
comprising multiple weighted scenarios from a reputable and independent third party to inform its macroeconomic variable
forecasts over the four-quarter forecast period.
The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment,
and time to recovery) produces an expected cash flow stream at the loan level. Loan effective yield is calculated, net of the
impacts of prepayment assumptions, and the loan expected cash flows are then discounted at that effective yield to produce a
loan-level net present value of expected cash flows (“NPV”). An ACL is established for the difference between the loan’s NPV
and amortized cost basis.
PD×LGD Method
The Company uses the PD×LGD method to estimate expected credit losses (“EL”) for the indirect automobile, municipal and
premium finance loan segments. Under the PD×LGD method, the loss rate is a function of two components: (1) the lifetime
default rate (“PD”); and (2) the loss given default (“LGD”). For the indirect automobile and premium finance loan segments,
calculations of lifetime default rates and corresponding loss given default rates of static pools are performed. The PD×LGD
method uses the default rates and loss given default rates of different static pools to quantify the relationship between those
F-18
rates and the credit mix of the pools and applies that relationship on a going forward basis. The Company has not incurred any
historical defaults or charge offs in its municipal portfolio. Therefore, in lieu of historical loss rates, the Company applies
historical benchmarking PD and LGD ratios provided by a reputable and independent third party to the current municipal loan
balance.
Qualitative Factors
The Company uses qualitative factors for model limitations and risk uncertainty as well as for loan segment specific risks that
cannot be addressed in the quantitative methods. Any additional qualitative factor reserves needed will be approved by the
Allowance Committee quarterly. Sources for quantitative metrics for qualitative factor adjustments include, but are not limited
to, third-party economic and forecast analysis, default rate & loss studies, academic studies, historical loss rate benchmarking
(internal & external) and statistical modeling and adjustments.
Vintage Method
Prior to the second quarter of 2021, the Company used a vintage method to estimate expected credit losses for the indirect
automobile loans segment. The Company’s vintage analysis was based on loss rates by origination date and included data on
loan amounts, loan charge-offs and recoveries by date. Using this information, vintage tables were created to evaluate loss rate
patterns and develop estimated losses by vintage year. Once the tables were calculated, reserves were estimated by multiplying
the balance of a given origination year by the remaining loss to be experienced by that vintage.
Individually Evaluated Assets
Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent loans where the
Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial
difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the
collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of
the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit
losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash
flows from the operation of the collateral. The Company may, in the alternative, measure the expected credit loss as the amount
by which the amortized cost basis of the loan exceeds the estimated fair value of the collateral. When repayment is expected to
be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the
loan exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the
collateral at the measurement date exceeds the amortized cost basis of the loan.
The Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the loans. The contractual
term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt
restructuring.
A loan that has been modified or renewed is considered a troubled debt restructuring (“TDR”) when two conditions are met: (1)
the borrower is experiencing financial difficulty; and (2) concessions are made for the borrower's benefit that would not
otherwise be considered for a borrower or transaction with similar credit risk characteristics. The Company’s ACL reflects all
effects of a TDR when an individual asset is specifically identified as a reasonably expected TDR. The Company has
determined that a TDR is reasonably expected no later than the point when the lender concludes that modification is the best
course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession from the
lender to avoid a default. Reasonably expected TDRs and executed non-performing TDRs are evaluated individually to
determine the required ACL. TDRs performing in accordance with their modified contractual terms for a reasonable period of
time may be included in the Company’s existing pools based on the underlying risk characteristics of the loan to measure the
ACL.
F-19
Guidance on Non-TDR Loan Modifications due to COVID-19
In April 2020, various regulatory agencies, including the Federal Reserve and the FDIC, issued a revised interagency statement
encouraging financial institutions to work with customers affected by COVID-19 and providing additional information
regarding loan modifications. The revised interagency statement clarifies the interaction between the interagency statement
issued on March 22, 2020 and the temporary relief provided by Section 4013 of the Coronavirus Aid, Relief, and Economic
Security Act (the “CARES Act”). Section 4013 of the CARES Act allows financial institutions to suspend the requirements to
classify certain loan modifications as TDRs. The revised statement also provides supervisory interpretations on past due and
nonaccrual regulatory reporting of loan modification programs and regulatory capital. In December 2020, the 2021
Consolidated Appropriations Act was signed into law and extended the provisions of Section 4013 through the earlier of 60
days after the national emergency termination date or January 1, 2022 and, accordingly, these provisions expired on January 1,
2022.
Charge-offs and Recoveries
Loan losses are charged against the allowance when management believes the collection of a loan’s principal is
unlikely. Subsequent recoveries are credited to the allowance. Consumer loans are charged-off in accordance with the Federal
Financial Institutions Examination Council’s (“FFIEC”) Uniform Retail Credit Classification and Account Management Policy.
Commercial loans are charged-off when they are deemed uncollectible, which usually involves a triggering event within the
collection effort. If the loan is collateral dependent, the loss is more easily identified and is charged-off when it is identified,
usually based upon receipt of an appraisal. However, when a loan has guarantor support, and the guarantor demonstrates
willingness and capacity to support the debt, the Company may carry the estimated loss as a reserve against the loan while
collection efforts with the guarantor are pursued. If, after collection efforts with the guarantor are complete, the deficiency is
still considered uncollectible, the loss is charged-off and any further collections are treated as recoveries. In all situations, when
a loan is downgraded to a loan risk rating of 9 (Loss per the regulatory guidance), the uncollectible portion is charged-off.
Loan Commitments and Financial Instruments
Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters
of credit issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of
those instruments. Such financial instruments are recorded when they are funded.
The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend
credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company’s consolidated
statements of income. The ACL on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date
under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the
likelihood that funding will occur as well as any third-party guarantees and is included in other liabilities on the Company’s
consolidated balance sheets.
Premises and Equipment
Land is carried at cost. Other 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 three to 20 years and the lives of software and computer related equipment
range from three to five 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.
Leases
The Company has entered into various operating leases for certain branch locations, ATM locations, loan production offices,
and corporate support services locations. Generally, these leases have initial lease terms of 13 years or less. Many of the leases
have one or more lease renewal options. The exercise of lease renewal options is at our sole discretion. The Company does not
consider exercise of any lease renewal options reasonably certain. Certain of our lease agreements contain early termination
options. No renewal options or early termination options have been included in the calculation of the operating right-of-use
assets or operating lease liabilities. Certain of our lease agreements provide for periodic adjustments to rental payments for
F-20
inflation. At the commencement date of the lease, the Company recognizes a lease liability at the present value of the lease
payments not yet paid, discounted using the discount rate for the lease or the Company’s incremental borrowing rate. As the
majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate at the
commencement date in determining the present value of lease payments. The incremental borrowing rate is based on the term
of the lease. Incremental borrowing rates on January 1, 2019 were used for operating leases that commenced prior to that date.
At the commencement date, the company also recognizes a right-of-use asset measured at (i) the initial measurement of the
lease liability; (ii) any lease payments made to the lessor at or before the commencement date less any lease incentives
received; and (iii) any initial direct costs incurred by the lessee. Leases with an initial term of 12 months or less are not recorded
on the balance sheet. For these short-term leases, lease expense is recognized on a straight-line basis over the lease term. At
December 31, 2022, the Company had no leases classified as finance leases.
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 performs its annual impairment testing of goodwill in the fourth quarter of each year.
Intangible assets include core deposit premiums from various past bank acquisitions as well as intangible assets recorded in
connection with certain non-bank acquisitions for referral relationships, trade names, non-compete agreements and patent
assets. Intangible assets are initially recognized based on a valuation performed as of the acquisition date.
Core deposit premiums acquired in various past bank acquisitions are based on the established value of acquired customer
deposits. The core deposit premium is amortized over an estimated useful life of seven to ten years.
The referral relationship intangibles are amortized over an estimated useful life of eight to ten years. Trade name intangible
assets are being amortized over an estimated useful life of five to seven years. Non-compete agreement and patent intangible
assets are being amortized over estimated useful lives of three years and ten years, respectively.
Amortization periods for intangible assets are reviewed annually in connection with the annual impairment testing of goodwill.
Cash Value of Bank Owned Life Insurance
The Company has purchased life insurance policies on certain officers. The life insurance is recorded at the amount that can be
realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or
other amounts due that are probable at settlement.
Other Real Estate Owned
Foreclosed assets acquired through or in lieu of loan foreclosure are held for sale and are initially recorded at fair value less
estimated cost to sell. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the allowance for
credit 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 up to the fair value of the
property, whereas costs relating to holding foreclosed assets and subsequent adjustments to the value are charged to operations
in credit resolution-related expenses in the consolidated statements of income.
Income Taxes
Deferred income tax assets and liabilities are the expected future tax amounts for temporary differences between carrying
amounts and tax bases of assets and liabilities, computed using enacted tax rates.
In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the assets and
liabilities results in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by
such assets is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than
not that some portion or all of the deferred tax asset will not be realized. In assessing the realizability of the deferred tax assets,
management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning
strategies.
F-21
The Company evaluates income tax positions using the recognition and cumulative-probability measurement thresholds. The
Company includes the current and deferred tax effects of its tax positions in the financial statements only when it is more likely
than not that the position would be sustained based on their technical merits. For positions that meet that recognition threshold,
the company utilizes the cumulative probability measurement and records the largest amount, considering possible settlement
outcomes, that is greater than 50% likely of realization upon settlement with the taxing authorities. In determining whether it is
more likely than not that a tax position will be sustained based on its technical merits as of the reporting date, the Company
assumes the taxing authority will examine the position and have full knowledge of all relevant information.
The Company recognizes interest and penalties related to income tax matters in other noninterest expenses.
Loss Contingencies
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities
when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.
Share-Based Compensation
The Company accounts for its stock compensation plans using a fair value based method whereby compensation cost is
measured at the grant date based on the value of the award and is recognized over the service period, which is usually the
vesting period. The Company recorded approximately $6.7 million, $7.9 million, and $3.9 million of share-based compensation
cost for the years ended December 31, 2022, 2021 and 2020, respectively. The Company recognizes forfeitures as they occur.
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
shareholders' equity.
Earnings Per Share
Basic earnings per share are computed by dividing net income by the weighted-average number of shares of common stock
outstanding during the period. Diluted earnings per common share are computed by dividing net income by the sum of the
weighted-average number of shares of common stock outstanding and the effect of the issuance of potential common shares that
are dilutive. Potential common shares consist of stock options and restricted shares for the years ended December 31, 2022,
2021 and 2020, and are determined using the treasury stock method. The Company has determined that certain of its
outstanding non-vested stock awards are participating securities, since all dividends on these awards are paid similar to other
dividends. The difference between earnings per share calculated under the treasury method versus under the two class method
which is required when participating securities exist is immaterial.
Presented below is a summary of the components used to calculate basic and diluted earnings per share.
(dollars and shares in thousands)
Net income available to common shareholders
Weighted average number of common shares outstanding
Effect of dilutive stock options
Effect of dilutive restricted stock awards
Effect of performance stock units
Weighted average number of common shares outstanding used to calculate diluted
earnings per share
Years Ended December 31,
2021
2020
2022
$
346,540 $
376,913 $
261,988
69,194
17
80
129
69,420
69,432
61
143
125
69,761
69,256
23
129
18
69,426
For the years ended December 31, 2022 and 2021, there were no outstanding options exerciseable for common shares with
strike prices that would cause the underlying shares to be anti-dilutive. For the year ended December 31, 2020, there were
197,765 options exerciseable for common shares with strike prices that would cause the underlying shares to be anti-dilutive.
Therefore, such option shares have been excluded.
F-22
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 required to recognize certain contracts and commitments as derivatives when the characteristics of those contracts
and commitments meet the definition of a derivative. All derivative instruments are required to be carried at fair value on the
balance sheet.
Mortgage Banking Derivatives
The Company maintains a risk management program to manage interest rate risk and pricing risk associated with its mortgage
lending activities. Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward
commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. The fair value of the
interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected
exercise of the commitment before the loan is funded. In order to hedge the change in interest rates resulting from its
commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when
interest rate locks are entered into. Fair values of these mortgage derivatives are estimated based on changes in mortgage
interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in
mortgage banking activity in the Company's consolidated statement of income.
Customer Derivatives
The Company also enters into interest rate derivative agreements to facilitate the risk management strategies of certain clients.
The Company mitigates this risk by entering into equal and offsetting interest rate swap agreements with highly rated third-
party financial institutions. The interest rate derivative agreements are free-standing derivatives and are recorded at fair value
with any unrealized gain or loss recorded in other noninterest income in the Company's consolidated statements of income.
These instruments, and their offsetting positions, are recorded in other assets and other liabilities on the consolidated balance
sheets.
Revenue Recognition
With the exception of gains/losses on the sale of OREO discussed below, revenue from contracts with customers ("ASC 606
Revenue") is recorded in the service charges on deposit accounts category, the other service charges, commissions and fees
category and the other noninterest income category in the Company's consolidated statement of income as part of noninterest
income. Substantially all ASC 606 Revenue is recorded in the Banking Division.
Debit Card Interchange Fees - The Company earns debit card interchange fees from debit cardholder transactions conducted
through various payment networks. Interchange fees from debit cardholders transactions represent a percentage of the
underlying transaction amount and are recognized daily, concurrently with the transaction processing services provided to the
debit cardholder.
Overdraft Fees - Overdraft fees are recognized at the point in time that the overdraft occurs.
Other Service Charges on Deposit Accounts - Other service charges on deposit accounts include both transaction-based fees
and account maintenance fees. Transaction based fees, which include wire transfer fees, stop payment charges, statement
rendering, and automated clearing house ("ACH") fees, are recognized at the time the transaction is executed as that is the
point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly
maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance
obligation.
ATM Fees - Transaction-based ATM usage fees are recognized at the time the transaction is executed as that is the point at
which the Company satisfies the performance obligation.
Gains on the Sale of OREO - The net gains and losses on sales of OREO are recorded in credit resolution related expenses in
the Company's consolidated statement of income. The Company records a gain or loss from the sale of OREO when control of
the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the
sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the
contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is
F-23
derecognized and the gain on sale is recorded upon the transfer of control of the property to the buyer. The Company does not
provide financing for the sale of OREO unless these criteria are met and the OREO can be derecognized.
Trust and Wealth Management - Trust and wealth management income is primarily comprised of fees earned from personal
trust administration, estate settlement, investment management, employee benefit plan administration, custody, United States
tax code sections 1031/1033 exchanges ("Sections 1031/1033 exchanges") and escrow accounts. Personal trust administration,
investment management, employee benefit plan administration and custody fees are generally earned/accrued monthly with
billings typically done monthly, and are based on the assets/trust under management or administration and services with certain
annual minimum fees provided as outlined in the applicable fee schedule. Sections 1031/1033 exchanges and escrow accounts
fees are based on a contractual agreement. The Company’s fiduciary obligations are generally satisfied over time and the
resulting fees are recognized monthly, based upon the monthly average market value of the assets under management and the
applicable fee rate. Payment is typically received in the following month. The Company does not earn performance-based
incentives.
Comprehensive Income
The Company’s comprehensive income consists of net income, changes in the net unrealized holding gains and losses of
securities available-for-sale and unrealized gain or loss on the effective portion of cash flow hedges. These amounts are carried
in accumulated other comprehensive income (loss) on the consolidated statements of comprehensive income and are presented
net of taxes.
Fair Value Measures
Fair values of assets and liabilities are estimated using relevant market information and other assumptions, as more fully
disclosed in Note 17. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates,
credit risk, prepayments, and other factors, especially in the absence of broad markets for particular assets and liabilities.
Changes in assumptions or in market conditions could significantly affect these estimates.
Operating Segments
The Company has five reportable segments, the Banking Division, the Retail Mortgage Division, the Warehouse Lending
Division, the SBA Division and the Premium Finance Division. The Banking Division derives its revenues from the delivery of
full service financial services to include commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division
derives its revenues from the origination, sales and servicing of one-to-four family residential mortgage loans. The Warehouse
Lending Division derives its revenues from the origination and servicing of warehouse lines to other businesses that are secured
by underlying one-to-four family residential mortgage loans and residential mortgage servicing rights. The SBA Division
derives its revenues from the origination, sales and servicing of SBA loans. The Premium Finance Division derives its revenues
from the origination and servicing of commercial insurance premium finance loans.
The Banking, Retail Mortgage, Warehouse Lending, SBA and Premium Finance Divisions are managed as separate business
units because of the different products and services they provide. The Company evaluates performance and allocates resources
based on profit or loss from operations. There are no material intersegment sales or transfers.
Variable Interest Entities
The Company has assumed certain securitization transactions which involve the use of variable interest entities ("VIE"). A VIE
is consolidated when it is determined to be the primary beneficiary. When a company has a variable interest in a VIE, it
qualitatively assesses whether it has a controlling financial interest in the entity and, if so, whether it is the primary beneficiary.
In applying the qualitative assessment to identify the primary beneficiary of a VIE, the company is determined to have a
controlling financial interest if it has (i) the power to direct the activities that most significantly impact the economic
performance of the VIE, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be
significant to the VIE. The Company considers the VIE's purpose and design, including the risks that the entity was designed to
create and pass through to its variable interest holders.
Economic interest in the securitized and sold assets are generally retained in the form of senior or subordinated interest, cash
reserve accounts, residual interest and servicing rights. The Company was determined to be the primary beneficiary of the VIE
and the VIEs are consolidated in the Company's financial statements. The securitizations are accounted for as secured
borrowings. Each of the securitization facilities were fully redeemed in January 2022. Refer to Note 8 for additional
information.
F-24
The investors in the securitizations generally have no recourse to the Company's other assets outside the customary market
representation and warranty provisions.
Accounting Standards Pending Adoption
ASU No. 2022-06 - Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU No. 2022-06 extends
the temporary relief in Topic 848 from December 31, 2022 to December 31, 2024. Topic 848 provides optional guidance to
ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The
objective of this guidance is to provide temporary relief during the transition period away from LIBOR toward new interest rate
benchmarks. This update is effective upon issuance. The Company is currently evaluating the impact of adopting the relief in
Topic 848 on the consolidated financial statements.
ASU No. 2022-02 – Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures
("ASU 2022-02"). ASU 2022-02 eliminates the troubled debt restructuring ("TDR") measurement and recognition guidance and
requires that entities evaluate whether the modification represents a new loan or a continuation of an existing loan consistent
with the accounting for other loan modifications. Additional disclosures relating to modifications to borrowers experiencing
financial difficulty are required under ASU 2022-02. ASU 2022-02 also requires disclosure of current-period gross write-offs
by year of origination. ASU 2022-02 is effective for annual periods beginning after December 15, 2022, including interim
periods within those fiscal years. The amendments of ASU 2022-02 should be adopted prospectively except for the
amendments related to the recognition and measurement of TDRs where a modified retrospective transition method is optional.
Early adoption is permitted. The Company adopted these amendments prospectively, except for the recognition and
measurement of TDRs which the Company elected the optional modified retrospective transition method, effective January 1,
2023 and the impact of adoption was not material to the consolidated financial statements.
Reclassifications
Certain reclassifications of prior year amounts have been made to conform with the current year presentations.
NOTE 2. BUSINESS COMBINATIONS
Balboa Capital Corporation
On December 13, 2021, the Company announced the acquisition of Balboa Capital Corporation ("Balboa"), a point of sale and
direct online provider of lending solutions to small and mid-sized businesses nationwide. The acquisition was not material to
the financial results of the Company. Goodwill of $87.6 million and other intangibles of $68.9 million were recorded in the
acquisition. None of the goodwill is expected to be deductible for tax purposes.
F-25
NOTE 3. INVESTMENT SECURITIES
The amortized cost and estimated fair value of securities available-for-sale along with allowance for credit losses, gross
unrealized gains and losses are summarized as follows:
(dollars in thousands)
Securities available-for-sale
December 31, 2022
U.S. Treasuries
U.S. government-sponsored agencies
State, county and municipal securities
Corporate debt securities
SBA pool securities
Mortgage-backed securities
Total debt securities available-for-sale
December 31, 2021
U.S. government-sponsored agencies
State, county and municipal securities
Corporate debt securities
SBA pool securities
Mortgage-backed securities
Total debt securities available-for-sale
Amortized
Cost
Allowance for
Credit Losses
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
$
$
$
$
775,784 $
1,036
35,358
16,397
29,422
701,008
1,559,005 $
7,084 $
45,470
27,897
44,312
448,124
572,887 $
— $
—
—
(75)
—
—
(75) $
— $
—
—
—
—
— $
131 $
—
17
—
3
113
264 $
(16,381) $
(57)
(1,180)
(396)
(2,027)
(39,093)
(59,134) $
759,534
979
34,195
15,926
27,398
662,028
1,500,060
88 $
2,342
719
958
15,822
19,929 $
— $
—
(120)
(69)
(6)
(195) $
7,172
47,812
28,496
45,201
463,940
592,621
The amortized cost and estimated fair value of securities held-to-maturity along with gross unrealized gains and losses are
summarized as follows:
(dollars in thousands)
Securities held-to-maturity
December 31, 2022
State, county and municipal securities
Mortgage-backed securities
Total debt securities held-to-maturity
December 31, 2021
State, county and municipal securities
Mortgage-backed securities
Total debt securities held-to-maturity
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
$
$
$
$
31,905 $
102,959
134,864 $
— $
—
— $
(5,380) $
(14,946)
(20,326) $
26,525
88,013
114,538
8,905 $
70,945
79,850 $
4 $
—
4 $
(198) $
(1,450)
(1,648) $
8,711
69,495
78,206
The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity as of December 31, 2022,
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.
(dollars in thousands)
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
Available-for-Sale
Held-to-Maturity
Amortized
Cost
Estimated
Fair
Value
Amortized
Cost
Estimated
Fair
Value
$
51,085 $
51,049 $
— $
756,739
25,450
24,723
701,008
739,514
24,679
22,790
662,028
—
—
31,905
102,959
—
—
—
26,525
88,013
$
1,559,005 $
1,500,060 $
134,864 $
114,538
F-26
Securities with a carrying value of approximately $861.6 million and $366.7 million at December 31, 2022 and 2021,
respectively, serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other purposes
required or permitted by law.
The following table shows the gross unrealized losses and estimated fair value of available-for-sale securities aggregated by
category and length of time that securities have been in a continuous unrealized loss position at December 31, 2022 and 2021.
(dollars in thousands)
Securities available-for-sale
December 31, 2022
U.S. Treasuries
U.S. government-sponsored agencies
State, county and municipal securities
Corporate debt securities
SBA pool securities
Mortgage-backed securities
Less Than 12 Months
12 Months or More
Total
Estimated
Fair
Value
Unrealized
Losses
Estimated
Fair
Value
Unrealized
Losses
Estimated
Fair
Value
Unrealized
Losses
$ 725,250 $
979
27,438
13,271
17,806
620,544
(16,381) $
(57)
(1,180)
(126)
(1,298)
(37,774)
— $
—
—
1,155
9,329
16,847
— $ 725,250 $
—
—
(270)
(729)
(1,319)
979
27,438
14,426
27,135
637,391
(16,381)
(57)
(1,180)
(396)
(2,027)
(39,093)
Total debt securities
$ 1,405,288 $
(56,816) $
27,331 $
(2,318) $ 1,432,619 $
(59,134)
December 31, 2021
Corporate debt securities
SBA pool securities
Mortgage-backed securities
Total debt securities
$
— $
1,312
5,514
— $
(6)
(6)
1,380 $
2,572
1
(120) $
(63)
—
1,380 $
3,884
5,515
$
6,826 $
(12) $
3,953 $
(183) $
10,779 $
(120)
(69)
(6)
(195)
As of December 31, 2022, the Company’s available-for-sale security portfolio consisted of 447 securities, 433 of which were in
an unrealized loss position. At December 31, 2022, the Company held 337 mortgage-backed securities that were in an
unrealized loss position. At December 31, 2022, the Company also held 33 SBA pool securities, 29 state, county and municipal
securities, six corporate securities, 27 U.S. treasury securities and one U.S. government-sponsored agency security that were in
an unrealized loss position.
The following table shows the gross unrealized losses and estimated fair value of held-to-maturity securities aggregated by
category and length of time that securities have been in a continuous unrealized loss position at September 30, 2021:
Less Than 12 Months
12 Months or More
Total
Estimated
Fair
Value
Unrealized
Losses
Estimated
Fair
Value
Unrealized
Losses
Estimated
Fair
Value
Unrealized
Losses
16,512 $
32,471
48,983 $
(1,488) $
(1,925)
(3,413) $
10,013 $
55,542
65,555 $
(3,892) $
(13,021)
(16,913) $ 114,538 $
26,525 $
88,013
(5,380)
(14,946)
(20,326)
(dollars in thousands)
Securities held-to-maturity
December 31, 2022
State, county and municipal securities
Mortgage-backed securities
Total debt securities held-to-maturity
December 31, 2021
State, county and municipal securities
Mortgage-backed securities
$
$
$
Total debt securities held-to-maturity
$
73,202 $
(1,648) $
3,707 $
69,495
(198) $
(1,450)
— $
—
— $
— $
—
3,707 $
69,495
(198)
(1,450)
— $
73,202 $
(1,648)
As of December 31, 2022, the Company’s held-to-maturity security portfolio consisted of 25 securities, all of which were in an
unrealized loss position. At December 31, 2022, the Company held 19 mortgage-backed securities and six state, county and
municipal securities that were in an unrealized loss position.
At December 31, 2022 and 2021, all of the Company's mortgage-backed securities were obligations of government-sponsored
agencies.
F-27
Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluates available-for-sale
securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns
warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell
or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria
is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's
amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is
attributable to credit or resulted from other factors. The Company does not intend to sell these investment securities at an
unrealized loss position at December 31, 2022, and it is more likely than not that the Company will not be required to sell these
securities prior to recovery or maturity. Based on the results of management's review, at December 31, 2022, management
determined $75,000 was attributable to credit impairment and increased the allowance for credit losses accordingly. The
remaining $59.1 million in unrealized loss was determined to be from factors other than credit, primarily changes in market
interest rates.
(dollars in thousands)
Allowance for credit losses
Beginning balance
Current-period provision for expected credit losses
Ending balance
For the Years Ended December 31,
2022
2021
2020
$
$
— $
75
75 $
112 $
(112)
— $
—
112
112
The Company's held-to-maturity securities have no expected credit losses and no related allowance for credit losses has been
established.
Net gain on securities reported on the consolidated statements of income is comprised of the following:
(dollars in thousands)
Unrealized holding gains (losses) on equity securities
Net realized gains on sales of other investments
Net gain on securities
NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES
Loans
For the Years Ended December 31,
2022
2021
2020
$
$
(67) $
270
203 $
(17) $
532
515 $
5
—
5
Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table.
(dollars in thousands)
Commercial, financial and agricultural
Consumer
Indirect automobile
Mortgage warehouse
Municipal
Premium finance
Real estate – construction and development
Real estate – commercial and farmland
Real estate – residential
Nonaccrual and Past Due Loans
December 31,
2022
2021
$
2,679,403 $
1,875,993
384,037
108,648
1,038,924
509,151
1,023,479
2,086,438
7,604,867
4,420,306
$
19,855,253 $
191,298
265,779
787,837
572,701
798,409
1,452,339
6,834,917
3,094,985
15,874,258
A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful.
Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged against
interest income. Interest received on loans that are classified as nonaccrual is subsequently applied to principal until the loans
F-28
are returned to accrual status. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when
(i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual
principal and interest, or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on
any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the
prospects for full repayment, approved by the Company’s Chief Credit Officer. Past due loans are loans whose principal or
interest is past due 30 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.
The following table presents an analysis of loans accounted for on a nonaccrual basis:
(dollars in thousands)
Commercial, financial and agricultural
Consumer
Indirect automobile
Real estate – construction and development
Real estate – commercial and farmland
Real estate – residential (1)
December 31,
2022
2021
$
11,094 $
14,214
420
346
523
13,203
109,222
$
134,808 $
476
947
492
15,365
53,772
85,266
(1) Included in real estate - residential were $69.6 million and $30.4 million of serviced GNMA-guaranteed nonaccrual loans at
December 31, 2022 and 2021, respectively.
There was no interest income recognized on nonaccrual loans during the years ended December 31, 2022 and 2021.
The following table presents an analysis of nonaccrual loans with no related allowance for credit losses:
(dollars in thousands)
Commercial, financial and agricultural
Real estate – construction and development
Real estate – commercial and farmland
Real estate – residential
December 31,
2022
December 31,
2021
$
33 $
—
1,464
58,734
$
60,231 $
262
209
2,015
29,556
32,042
F-29
The following tables present an analysis of past-due loans as of December 31, 2022 and 2021:
(dollars in thousands)
December 31, 2022
Commercial, financial and
agricultural
Consumer
Indirect automobile
Mortgage warehouse
Municipal
Premium finance
Real estate – construction and
development
Real estate – commercial and
farmland
Real estate – residential
Loans
30-59
Days Past
Due
Loans
60-89
Days
Past Due
Loans 90
or More
Days Past
Due
Total
Loans
Past Due
Current
Loans
Total
Loans
Loans 90
Days or
More Past
Due and
Still
Accruing
$
16,219 $
5,451 $
11,632 $
33,302 $ 2,646,101 $ 2,679,403 $
3,267
2,539
466
—
—
3,163
77
—
—
741
267
—
—
6,443
810
—
—
377,594
107,838
384,037
108,648
1,038,924
1,038,924
509,151
509,151
472
—
—
—
13,859
10,620
13,626
38,105
985,374
1,023,479
13,626
25,367
3,829
966
30,162
2,056,276
2,086,438
1,738
35,015
168
10,223
12,129
7,592,738
7,604,867
11,329
106,170
152,514
4,267,792
4,420,306
500
—
—
Total
$
95,203 $
34,637 $ 143,625 $ 273,465 $ 19,581,788 $ 19,855,253 $
17,865
(dollars in thousands)
December 31, 2021
Commercial, financial and
agricultural
Consumer
Indirect automobile
Mortgage warehouse
Municipal
Premium finance
Real estate – construction and
development
Real estate – commercial and
farmland
Real estate – residential
Loans
30-59
Days Past
Due
Loans
60-89
Days
Past Due
Loans 90
or More
Days Past
Due
Total
Loans
Past Due
Current
Loans
Total
Loans
Loans 90
Days or
More Past
Due and
Still
Accruing
$
3,431 $
2,005 $
12,017 $
17,453 $ 1,858,540 $ 1,875,993 $
1,165
1,786
772
—
—
871
185
—
—
891
473
—
—
3,548
1,430
—
—
6,992
4,340
9,134
20,466
187,750
264,349
787,837
572,701
777,943
191,298
265,779
787,837
572,701
798,409
584
—
—
—
9,134
16,601
1,398
2,190
20,189
1,432,150
1,452,339
1,758
6,713
17,729
1,150
4,266
5,924
49,839
13,787
6,821,130
6,834,917
71,834
3,023,151
3,094,985
7
—
Total
$
54,024 $
14,215 $
80,468 $ 148,707 $ 15,725,551 $ 15,874,258 $
12,648
Collateral-Dependent Loans
Collateral-dependent loans are loans where repayment is expected to be provided substantially through the operation or sale of
the collateral when the borrower is experiencing financial difficulty. If the Company determines that foreclosure is probable,
these loans are written down to the lower of cost or collateral value less estimated costs to sell. When repayment is expected to
be from the operation of the collateral, the allowance for credit losses is calculated as the amount by which the amortized cost
basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. The Company
may, in the alternative, measure the allowance for credit loss as the amount by which the amortized cost basis of the financial
asset exceeded the estimated fair value of the collateral. As of December 31, 2022 and 2021, there were $41.8 million and
$52.1 million, respectively, of collateral-dependent loans which are primarily secured by real estate, equipment and receivables.
F-30
The following table presents an analysis of collateral-dependent financial assets and related allowance for credit losses:
(dollars in thousands)
December 31, 2022
December 31, 2021
Allowance
for Credit
Losses
Balance
Allowance
for Credit
Losses
Balance
Commercial, financial and agricultural
$
7,128 $
6,294 $
2,613 $
Premium finance
Real estate – construction and development
Real estate – commercial and farmland
Real estate – residential
Credit Quality Indicators
3,233
780
15,168
15,464
—
13
1,428
2,066
2,989
1,432
33,332
11,712
723
30
45
6,646
453
$
41,773 $
9,801 $
52,078 $
7,897
The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. The following is a
description of the general characteristics of the grades:
Pass (Grades 1 - 5) – These grades represent acceptable credit risk to the Company based on factors including creditworthiness
of the borrower, current performance and nature of the collateral.
Other Assets Especially Mentioned (Grade 6) – This grade includes loans that exhibit potential weaknesses that deserve
management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for
the asset or in the Company’s credit position at some future date.
Substandard (Grade 7) – This grade represents loans which are inadequately protected by the current credit worthiness and
paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are
characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These
weaknesses may be characterized by past due performance, operating losses or questionable collateral values.
Doubtful (Grade 8) – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added
provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and
values, highly questionable or improbable.
Loss (Grade 9) – This grade is assigned to loans which are considered uncollectible and of such little value that their
continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no
recovery or salvage value, but rather it is not practical or desirable to defer writing it off.
The following table presents the loan portfolio's amortized cost by class of financing receivable, risk grade and year of
origination (in thousands). Generally, current period renewals of credit are underwritten again at the point of renewal and
considered current period originations for purposes of the table below. The Company had an immaterial amount of revolving
loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year.
There were no loans risk graded 8 or 9 at December 31, 2022 and 2021.
F-31
As of December 31,
2022
2022
2021
2020
2019
2018
Prior
Commercial, Financial and Agricultural
Term Loans by Origination Year
Revolving
Loans
Amortized
Cost Basis
Total
Risk Grade:
Pass
6
7
Total commercial,
financial and
agricultural
Consumer
Risk Grade:
Pass
6
7
$ 1,127,120 $ 526,043 $ 174,120 $ 109,091 $
56,657 $
41,612 $ 621,784 $ 2,656,427
—
8,565
13
1,214
94
1,182
183
3,314
895
545
1,774
2,759
317
2,121
3,276
19,700
$ 1,135,685 $ 527,270 $ 175,396 $ 112,588 $
58,097 $
46,145 $ 624,222 $ 2,679,403
$
41,487 $
12,692 $
37,906 $
23,454 $
17,144 $
13,825 $ 236,113 $ 382,621
38
68
—
62
—
216
—
106
—
118
98
431
196
83
332
1,084
Total consumer
$
41,593 $
12,754 $
38,122 $
23,560 $
17,262 $
14,354 $ 236,392 $ 384,037
Indirect Automobile
Risk Grade:
Pass
6
7
Total indirect
automobile
Mortgage Warehouse
Risk Grade:
Pass
6
7
Total mortgage
warehouse
Municipal
Risk Grade:
Pass
Total municipal
Premium Finance
Risk Grade:
Pass
7
Total premium
finance
$
— $
— $
— $
11,900 $
50,749 $
45,120 $
— $ 107,769
—
—
—
—
—
—
—
41
—
149
11
678
—
—
11
868
$
$
$
$
$
— $
— $
— $
11,941 $
50,898 $
45,809 $
— $ 108,648
— $
— $
— $
— $
— $
— $ 990,106 $ 990,106
—
—
—
—
—
—
—
—
—
—
—
—
22,831
25,987
22,831
25,987
— $
— $
— $
— $
— $
— $ 1,038,924 $ 1,038,924
18,074 $
46,809 $ 188,507 $
9,752 $
4,358 $ 241,651 $
— $ 509,151
18,074 $
46,809 $ 188,507 $
9,752 $
4,358 $ 241,651 $
— $ 509,151
$ 1,000,214 $
9,667 $
12 $
— $
13,051
535
—
—
—
—
$
— $ 1,009,893
—
—
13,586
$ 1,013,265 $
10,202 $
12 $
— $
— $
— $
— $ 1,023,479
Real Estate – Construction and Development
Risk Grade:
Pass
6
7
Total real estate –
construction and
development
$ 834,831 $ 793,723 $ 306,084 $
69,596 $
7,934 $
31,490 $
27,474 $ 2,071,132
277
—
—
783
—
164
—
5
173
13,159
165
580
—
—
615
14,691
$ 835,108 $ 794,506 $ 306,248 $
69,601 $
21,266 $
32,235 $
27,474 $ 2,086,438
F-32
As of December 31,
2022
2022
2021
2020
2019
2018
Prior
Real Estate – Commercial and Farmland
Term Loans by Origination Year
Revolving
Loans
Amortized
Cost Basis
Total
Risk Grade:
Pass
6
7
Total real estate –
commercial and
farmland
$ 1,739,021 $ 1,975,003 $ 1,085,086 $ 869,116 $ 447,311 $ 1,259,763 $ 110,848 $ 7,486,148
607
387
17,974
2,810
—
3,078
30,841
12,007
4,801
6,527
18,289
21,398
—
—
72,512
46,207
$ 1,740,015 $ 1,995,787 $ 1,088,164 $ 911,964 $ 458,639 $ 1,299,450 $ 110,848 $ 7,604,867
Real Estate - Residential
Risk Grade:
Pass
6
7
Total real estate -
residential
Total Loans
Risk Grade:
Pass
6
7
$ 1,524,021 $ 1,214,724 $ 548,968 $ 268,821 $ 115,693 $ 393,570 $ 234,684 $ 4,300,481
236
6,735
145
94
688
364
21,283
25,860
27,173
14,396
2,910
17,665
600
1,676
5,037
114,788
$ 1,530,992 $ 1,236,152 $ 574,922 $ 296,682 $ 130,453 $ 414,145 $ 236,960 $ 4,420,306
$ 6,284,768 $ 4,578,661 $ 2,340,683 $ 1,361,730 $ 699,846 $ 2,027,031 $ 2,221,009 $ 19,513,728
1,158
28,806
18,132
26,687
188
30,500
31,712
42,646
6,233
34,894
23,247
43,511
23,944
29,867
104,614
236,911
Total loans
$ 6,314,732 $ 4,623,480 $ 2,371,371 $ 1,436,088 $ 740,973 $ 2,093,789 $ 2,274,820 $ 19,855,253
As of December 31,
2021
2021
2020
2019
2018
2017
Prior
Commercial, Financial and Agricultural
Term Loans by Origination Year
Revolving
Loans
Amortized
Cost Basis
Total
Risk Grade:
Pass
6
7
Total commercial,
financial and
agricultural
Consumer
Risk Grade:
Pass
6
7
$ 903,630 $ 279,037 $ 188,810 $ 118,613 $
50,737 $
40,376 $ 262,951 $ 1,844,154
190
9,216
—
1,268
393
4,098
427
1,472
368
2,566
1,832
6,019
1,961
2,029
5,171
26,668
$ 913,036 $ 280,305 $ 193,301 $ 120,512 $
53,671 $
48,227 $ 266,941 $ 1,875,993
$
35,781 $
59,221 $
37,195 $
27,266 $
9,787 $
11,021 $
9,437 $ 189,708
—
59
—
283
—
290
—
216
—
103
135
405
5
94
140
1,450
Total consumer
$
35,840 $
59,504 $
37,485 $
27,482 $
9,890 $
11,561 $
9,536 $ 191,298
Indirect Automobile
Risk Grade:
Pass
6
7
Total indirect
automobile
$
— $
— $
20,276 $ 101,969 $
90,294 $
51,468 $
— $ 264,007
—
—
—
—
—
55
24
234
10
384
19
1,046
—
—
53
1,719
$
— $
— $
20,331 $ 102,227 $
90,688 $
52,533 $
— $ 265,779
F-33
As of December 31,
2021
Mortgage Warehouse
Risk Grade:
Pass
Total mortgage
warehouse
Municipal
Risk Grade:
Pass
Total municipal
Premium Finance
Risk Grade:
Pass
7
Total premium
finance
Term Loans by Origination Year
2021
2020
2019
2018
2017
Prior
Revolving
Loans
Amortized
Cost Basis
Total
$
$
$
$
— $
— $
— $
— $
— $
— $ 787,837 $ 787,837
— $
— $
— $
— $
— $
— $ 787,837 $ 787,837
44,727 $ 219,385 $
14,831 $
5,494 $ 109,040 $ 179,224 $
— $ 572,701
44,727 $ 219,385 $
14,831 $
5,494 $ 109,040 $ 179,224 $
— $ 572,701
$ 787,884 $
1,059 $
26 $
— $
302 $
4 $
— $ 789,275
9,039
95
—
—
—
—
—
9,134
$ 796,923 $
1,154 $
26 $
— $
302 $
4 $
— $ 798,409
Real Estate – Construction and Development
Risk Grade:
Pass
6
7
Total real estate –
construction and
development
$ 826,094 $ 290,814 $ 176,476 $
35,773 $
24,533 $
44,514 $
21,267 $ 1,419,471
6,527
1,143
549
678
—
7
15,260
2,476
—
57
2,101
1,011
—
3,059
24,437
8,431
$ 833,764 $ 292,041 $ 176,483 $
53,509 $
24,590 $
47,626 $
24,326 $ 1,452,339
Real Estate – Commercial and Farmland
Risk Grade:
Pass
6
7
Total real estate –
commercial and
farmland
$ 2,186,291 $ 1,205,578 $ 1,119,239 $ 542,295 $ 486,477 $ 1,103,675 $
80,379 $ 6,723,934
416
4,709
—
2,682
1,036
11,109
14,760
9,076
5,334
4,861
21,665
35,315
—
20
43,211
67,772
$ 2,191,416 $ 1,208,260 $ 1,131,384 $ 566,131 $ 496,672 $ 1,160,655 $
80,399 $ 6,834,917
Real Estate - Residential
Risk Grade:
Pass
6
7
Total real estate -
residential
Total Loans
Risk Grade:
Pass
6
7
$ 1,171,008 $ 638,232 $ 329,247 $ 149,990 $ 108,538 $ 408,240 $ 217,982 $ 3,023,237
145
2,405
66
10,167
1,106
21,239
505
11,376
356
4,597
3,717
13,970
49
2,050
5,944
65,804
$ 1,173,558 $ 648,465 $ 351,592 $ 161,871 $ 113,491 $ 425,927 $ 220,081 $ 3,094,985
$ 5,955,415 $ 2,693,326 $ 1,886,100 $ 981,400 $ 879,708 $ 1,838,522 $ 1,379,853 $ 15,614,324
7,278
26,571
615
15,173
2,535
36,798
30,976
24,850
6,068
12,568
29,469
57,766
2,015
7,252
78,956
180,978
Total loans
$ 5,989,264 $ 2,709,114 $ 1,925,433 $ 1,037,226 $ 898,344 $ 1,925,757 $ 1,389,120 $ 15,874,258
F-34
Troubled Debt Restructurings
The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial
difficulties and (ii) the Company has granted a concession. Concessions may include interest rate reductions to below market
interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential
losses. The Company has exhibited the greatest success for rehabilitation of the loan by a reduction in the rate alone
(maintaining the amortization of the debt) or a combination of a rate reduction and the forbearance of previously past due
interest or principal. This has most typically been evidenced in certain commercial real estate loans whereby a disruption in the
borrower’s cash flow resulted in an extended past due status, of which the borrower was unable to catch up completely as the
cash flow of the property ultimately stabilized at a level lower than its original level. A reduction in rate, coupled with a
forbearance of unpaid principal and/or interest, allowed the net cash flows to service the debt under the modified terms.
The Company’s policy requires a restructure request to be supported by a current, well-documented credit evaluation of the
borrower’s financial condition and a collateral evaluation that is no older than six months from the date of the restructure. Key
factors of that evaluation include the documentation of current, recurring cash flows, support provided by the guarantor(s) and
the current valuation of the collateral. If the appraisal in file is older than six months, an evaluation must be made as to the
continued reasonableness of the valuation. For certain income-producing properties, current rent rolls and/or other income
information can be utilized to support the appraisal valuation, when coupled with documented cap rates within our markets and
a physical inspection of the collateral to validate the current condition.
The Company’s policy states in the event a loan has been identified as a troubled debt restructuring, it should be assigned a
grade of substandard until such time that the borrower has demonstrated the ability to service the loan payments based on the
restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan
terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and
are not considered toward the six month required term of satisfactory payment history.
In the normal course of business, the Company renews loans with a modification of the interest rate or terms that are not
deemed as troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified
loans in 2022 and 2021 totaling $350.7 million and $408.9 million, respectively, under such parameters. These totals do not
include modifications under our disaster relief program.
As of December 31, 2022 and 2021, the Company had a balance of $40.2 million and $76.6 million, respectively, in troubled
debt restructurings. The Company has recorded $646,000 and $654,000 in previous charge-offs on such loans at December 31,
2022 and 2021, respectively. The Company’s balance in the allowance for credit losses allocated to such troubled debt
restructurings was $2.6 million and $10.5 million at December 31, 2022 and 2021, respectively. At December 31, 2022, the
Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled
restructurings.
During the year ending December 31, 2022 and 2021, the Company modified loans as troubled debt restructurings, with
principal balances of $4.6 million and $19.7 million, respectively, and these modifications did not have a material impact on the
Company's allowance for credit losses. These modifications do not include modifications for which the Company applied the
temporary relief under Section 4013 of the CARES Act.
The following table presents the loans by class modified as troubled debt restructurings, which occurred during the year ending
December 31, 2022 and 2021.
Loan Class
Commercial, financial and agricultural
Consumer
Premium finance
Real estate – construction and development
Real estate – commercial and farmland
Real estate – residential
Total
December 31, 2022
December 31, 2021
#
3
—
4
1
4
12
24
Balance
(in thousands)
$
$
833
—
171
17
800
2,801
4,622
#
4
2
—
—
5
23
34
Balance
(in thousands)
$
$
401
7
—
—
16,197
3,056
19,661
F-35
Troubled debt restructurings with an outstanding balance of $4.1 million and $2.3 million defaulted during the year ended
December 31, 2022 and 2021, respectively, and these defaults did not have a material impact on the Company’s allowance for
credit losses.
The following table presents the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the
year ending December 31, 2022 and 2021.
Loan Class
Commercial, financial and agricultural
Consumer
Indirect automobile
Real estate – commercial and farmland
Real estate – residential
Total
December 31, 2022
December 31, 2021
#
—
2
6
1
30
39
Balance
(in thousands)
$
$
—
2
16
7
4,103
4,128
#
4
2
19
—
21
46
Balance
(in thousands)
$
$
35
5
75
—
2,177
2,292
The following tables present the amount of troubled debt restructurings by loan class classified separately as accrual and non-
accrual at December 31, 2022 and 2021.
As of December 31, 2022
Accruing Loans
Non-Accruing Loans
Loan Class
Commercial, financial and agricultural
Consumer
Indirect automobile
Premium finance
Real estate – construction and development
Real estate – commercial and farmland
Real estate – residential
Total
#
7
3
151
4
2
16
205
388
Balance
(in thousands)
$
$
835
3
533
171
693
7,995
24,166
34,396
#
3
8
16
—
1
5
30
63
Balance
(in thousands)
$
$
743
11
55
—
17
767
4,181
5,774
As of December 31, 2021
Accruing Loans
Non-Accruing Loans
Loan Class
Commercial, financial and agricultural
Consumer
Indirect automobile
Real estate – construction and development
Real estate – commercial and farmland
Real estate – residential
Total
Related Party Loans
#
12
7
233
4
25
213
494
Balance
(in thousands)
$
$
1,286
16
1,037
789
35,575
26,879
65,582
#
6
17
52
1
5
39
120
Balance
(in thousands)
$
$
83
35
273
13
5,924
4,678
11,006
In the ordinary course of business, the Company has granted loans to certain executive officers, directors and their affiliates.
These loans are made on substantially the same terms as those prevailing at the time for comparable transaction and do not
involve more than normal credit risk. Changes in related party loans are summarized as follows:
(dollars in thousands)
Balance, January 1
Advances
Repayments
Ending balance
December 31,
2022
2021
$
$
59,214 $
36,234
(14,702)
80,746 $
69,395
15,212
(25,393)
59,214
F-36
Allowance for Credit Losses
The allowance for credit losses represents an allowance for expected losses over the remaining contractual life of the assets
adjusted for prepayments. The contractual term does not consider extensions, renewals or modifications unless the Company
reasonably expects to execute a troubled debt restructuring with a borrower. The Company segregates the loan portfolio by type
of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.
The allowance for credit losses was determined at December 31, 2022 using the Moody's baseline scenario economic forecast
representing management's best estimate over the reasonable and supportable forecast period. The allowance for credit losses
was determined at December 31, 2021 using a weighting of five economic forecasts from Moody's in order to align with
management's best estimate over the reasonable and supportable forecast period. The Moody's baseline scenario was weighted
at 10%, the downside 75th percentile S-2 scenario was weighted at 10%, the downside 90th percentile S-3 scenario was
weighted at 50%, the slower trend growth scenario was weighted at 20% and the stagflation scenario was weighted at 10%.
During the year ended December 31, 2022, the allowance for credit losses increased primarily due to loan growth during the
period and the updated economic forecast. The current forecast reflects, among other things, improvements in forecast levels of
home prices, commercial real estate prices and gross domestic product compared with the forecast at December 31, 2021.
However, the rate of improvement in forecast economic variables slowed compared with the forecast at December 31, 2021.
During the year ended December 31, 2022, the Company purchased a pool of lines of credit secured by cash value life
insurance totaling $472.3 million. This purchase resulted in additions to the allowance for credit losses of approximately
$1.8 million between the commercial, financial and agricultural and consumer loan segments. During the year ended
December 31, 2020, the Company sold $87.5 million of selected hotel loans from its commercial real estate portfolio. This sale
resulted in charge offs of $17.2 million and a loss on sale of loans of $386,000. The Company designated a portfolio of
consumer installment loans, totaling $165.9 million at December 31, 2020, as held for sale during the third and fourth quarters
of 2020. The transfer to held for sale resulted in $1.6 million in charge offs and a provision release of approximately
$6.7 million.
The following table details activity in the allowance for credit losses by portfolio segment for the periods indicated. Allocation
of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
(dollars in thousands)
Balance, December 31, 2021
Provision for loan losses
Loans charged off
Recoveries of loans previously charged off
Commercial,
Financial and
Agricultural
Consumer
Indirect
Automobile
Mortgage
Warehouse
Municipal
Premium
Finance
$
26,829 $
6,097 $
476 $
3,231 $
401 $
2,729
21,307
(18,635)
9,954
3,360
(4,926)
882
(1,082)
(265)
1,045
(1,113)
—
—
(44)
—
—
(1,317)
(5,452)
5,065
1,025
Balance, December 31, 2022
$
39,455 $
5,413 $
174 $
2,118 $
357 $
Real Estate –
Construction
and
Development
Real Estate –
Commercial
and
Farmland
Real Estate –
Residential
Total
Balance, December 31, 2021
$
22,045 $
77,831 $
27,943 $
167,582
Provision for loan losses
Loans charged off
Recoveries of loans previously charged off
9,749
(27)
892
(7,049)
(3,574)
225
28,799
(196)
497
52,610
(33,075)
18,560
Balance, December 31, 2022
$
32,659 $
67,433 $
57,043 $
205,677
F-37
(dollars in thousands)
Year ended December 31, 2021
Balance, January 1, 2021
Initial allowance for PCD assets
Provision for loan losses
Loans charged off
Recoveries of loans previously charged off
Commercial,
Financial and
Agricultural
Consumer
Indirect
Automobile
Mortgage
Warehouse
Municipal
Premium
Finance
$
7,359 $
4,076 $
1,929 $
3,666 $
791 $
3,879
9,432
12,071
(7,760)
5,727
—
7,330
(6,248)
939
—
(1,944)
(1,188)
1,679
—
(435)
—
—
—
(390)
—
—
—
(2,352)
(3,668)
4,870
2,729
Balance, December 31, 2021
$
26,829 $
6,097 $
476 $
3,231 $
401 $
Year ended December 31, 2021
Balance, January 1, 2021
Initial allowance for PCD assets
Provision for loan losses
Loans charged off
Recoveries of loans previously charged off
Real Estate –
Construction
and
Development
Real Estate –
Commercial a
nd
Farmland
Real Estate –
Residential
Total
$
45,304 $
88,894 $
43,524 $
199,422
—
(23,532)
(233)
506
—
(9,784)
(1,852)
573
—
(16,045)
(667)
1,131
9,432
(35,081)
(21,616)
15,425
Balance, December 31, 2021
$
22,045 $
77,831 $
27,943 $
167,582
Commercial,
Financial and
Agricultural
Consumer
Indirect
Automobile
Mortgage
Warehouse
Municipal
Premium
Finance
(dollars in thousands)
Year ended December 31, 2020
Balance, January 1, 2020
$
4,567 $
3,784 $
— $
640 $
484 $
Adjustment to allowance for adoption of ASU 2016-13
Provision for loan losses
Loans charged off
Recoveries of loans previously charged off
2,587
8,963
(10,647)
1,889
8,012
(3,831)
(5,642)
1,753
4,109
(235)
(3,602)
1,657
463
2,563
—
—
(92)
399
—
—
Balance, December 31, 2020
$
7,359 $
4,076 $
1,929 $
3,666 $
791 $
Real Estate –
Construction
and
Development
Real Estate –
Commercial a
nd
Farmland
Real Estate –
Residential
Total
Year ended December 31, 2020
Balance, January 1, 2020
$
5,995 $
9,666 $
10,503 $
Adjustment to allowance for adoption of ASU 2016-13
Provision for loan losses
Loans charged off
Recoveries of loans previously charged off
12,248
26,327
(83)
817
27,073
78,210
(27,504)
1,449
19,790
13,290
(853)
794
38,189
78,661
125,488
(54,464)
11,548
Balance, December 31, 2020
$
45,304 $
88,894 $
43,524 $
199,422
F-38
2,550
4,471
(198)
(6,133)
3,189
3,879
Purchased Credit Deteriorated Loans
The Company acquired $952,000 in PCD loans from Balboa during the year ended December 31, 2021. A reconciliation of the
purchase price to the par value, or unpaid principal balance ("UPB"), of the assets is below.
(dollars in thousands)
Par value (UPB)
Allowance for Credit Losses
Discount
Purchase Price
NOTE 5. PREMISES AND EQUIPMENT
Premises and equipment are summarized as follows:
(dollars in thousands)
Land
Buildings and leasehold improvements
Furniture and equipment
Construction in progress
Premises and equipment, gross
Accumulated depreciation
Premises and equipment, net
Commercial, Financial
and Agricultural
$
$
10,505
(9,432)
(121)
952
December 31,
2022
2021
$
69,387 $
176,153
85,217
2,343
333,100
(112,817)
220,283 $
$
69,038
173,456
82,268
995
325,757
(100,357)
225,400
Depreciation expense was approximately $18.4 million, $17.2 million and $15.8 million for the years ended December 31,
2022, 2021 and 2020, respectively.
At December 31, 2022, estimated costs to complete construction projects in progress and other binding commitments for capital
expenditures were not a material amount.
NOTE 6. GOODWILL AND INTANGIBLE ASSETS
The change in the carrying value of goodwill for the years ended December 31, 2022 and 2021 is summarized below for both
the total Company and by the Company's reporting units.
(dollars in thousands)
Consolidated
Carrying amount of goodwill at beginning of year
Additions related to acquisitions in current year
Fair value adjustments related to acquisitions in prior year
Carrying amount of goodwill at end of year
Banking
Carrying amount of goodwill at beginning of year
Additions related to acquisitions in current year
Fair value adjustments related to acquisitions in prior year
Carrying amount of goodwill at end of year
Premium Finance Division
Carrying amount of goodwill at beginning of year
Carrying amount of goodwill at end of year
F-39
December 31,
2022
2021
$
1,012,620 $
—
3,026
1,015,646 $
$
928,005
84,615
—
1,012,620
$
948,122 $
—
3,026
863,507
84,615
—
$
951,148 $
948,122
$
$
64,498 $
64,498 $
64,498
64,498
During 2022, the Company recorded subsequent goodwill fair value adjustments of $3.0 million related to the Balboa
acquisition. During 2021, the Company recorded additions to goodwill of $84.6 million related to the Balboa acquisition.
The Company performs its annual impairment test at December 31 of each year and more frequently if a triggering event
occurs. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2022, the
Company performed its annual qualitative assessment and determined that it was more likely than not that the reporting units
fair values exceeded their carrying values.
The carrying value of intangible assets as of December 31, 2022 and 2021 was $106.2 million and $125.9 million, respectively.
Intangible assets are comprised of core deposit intangibles, referral relationships intangibles, trade name intangibles and non-
compete agreement intangibles. During 2021, the Company recorded intangible assets of $68.9 million associated with the
Balboa acquisition.
The following is a summary of information related to acquired intangible assets:
(dollars in thousands)
Amortized intangible assets:
Core deposit premiums
Referral relationships
Trade names
Patent
Non-compete agreements
As of December 31, 2022
As of December 31, 2021
Gross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
$
$
99,032 $
88,651
2,734
420
732
191,569 $
63,518 $
20,367
1,096
42
352
85,375 $
103,574 $
88,651
2,734
420
732
196,111 $
58,456
10,943
612
—
162
70,173
The aggregate amortization expense for intangible assets was approximately $19.7 million, $15.0 million and $19.6 million for
the years ended December 31, 2022, 2021 and 2020, respectively.
The estimated amortization expense for each of the next five years and thereafter is as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
NOTE 7. DEPOSITS
$
$
18,244
17,189
15,937
12,394
11,126
31,304
106,194
The scheduled maturities of time deposits at December 31, 2022 for each of the next five years and thereafter are as follows:
(dollars in thousands)
2023
2024
2025
2026
2027
Thereafter
$
$
1,233,023
145,162
54,402
17,892
18,127
861
1,469,467
The aggregate amount of time deposits in denominations of $250,000 or more at December 31, 2022 and 2021 was $381.1
million and $512.1 million, respectively.
As of December 31, 2022, the Company had brokered deposits of $280.5 million. As of December 31, 2021, the Company had
brokered deposits of $326.0 million.
F-40
Deposits from principal officers, directors, and their affiliates at December 31, 2022 and 2021 were $33.5 million and $21.7
million, respectively.
NOTE 8. OTHER BORROWINGS
Other borrowings consist of the following:
(dollars in thousands)
FHLB borrowings:
Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.150%
Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.110%
Fixed Rate Advance due January 12, 2023; fixed interest rate of 4.140%
Fixed Rate Advance due January 13, 2023; fixed interest rate of 4.150%
Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.170%
Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.250%
Fixed Rate Advance due January 18, 2023; fixed interest rate of 4.260%
Fixed Rate Advance due January 19, 2023; fixed interest rate of 4.230%
Fixed Rate Advance due January 20, 2023; fixed interest rate of 4.220%
Fixed Rate Advance due January 27, 2023; fixed interest rate of 4.230%
Fixed Rate Advance due March 3, 2025; fixed interest rate of 1.208%
Fixed Rate Advance due March 2, 2027; fixed interest rate of 1.445%
Fixed Rate Advance due March 4, 2030; fixed interest rate of 1.606%
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%
Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%
Subordinated notes payable:
Subordinated notes payable due June 1, 2026, net of unaccreted purchase accounting fair value
adjustment of $— and $500, respectively; fixed interest rate of 5.50% (Balboa Note)
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $551 and
$681, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate
thereafter at three-month LIBOR plus 3.616% (2027 subordinated notes)
Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,680
and $1,923, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest
rate thereafter at three-month SOFR plus 2.94% (2029 subordinated notes)
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value
adjustment of $906 and $1,028, respectively; fixed interest rate of 5.875% through May 31, 2025;
variable interest rate thereafter at three-month LIBOR plus 3.63% (Bank subordinated notes)
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,564 and
$1,766, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate
thereafter at three-month SOFR plus 3.753% (2030 subordinated notes)
Securitization facilities:
$
December 31,
2022
2021
300,000 $
50,000
50,000
50,000
350,000
150,000
200,000
50,000
150,000
100,000
15,000
15,000
15,000
1,389
961
1,275
—
—
—
—
—
—
—
—
—
—
15,000
15,000
15,000
1,400
969
1,421
—
50,500
74,449
74,319
118,320
118,077
75,906
76,028
108,436
108,234
Equipment contract backed notes, Series 2018-1 (BCC XIV) due on various dates through 2025 and
bear a weighted-average interest rate of 5.11%
Equipment contract backed notes, Series 2019-1 (BCC XVI) due on various dates through 2027 and
bear a weighted-average interest rate of 2.84%
Equipment contract backed notes, Series 2020-1 (BCC XVII) due on various dates through 2027 and
bear a weighted-average interest rate of 1.48%
—
—
—
$
1,875,736 $
19,199
139,329
105,403
739,879
The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in
addition to FHLB stock. At December 31, 2022, $2.93 billion was available for additional borrowing on lines with the FHLB.
As of December 31, 2022, the Bank maintained credit arrangements with various financial institutions to purchase federal funds
up to $127.0 million.
The Bank also participates in the Federal Reserve discount window borrowings program. At December 31, 2022, the Company
had $3.22 billion of loans pledged at the Federal Reserve discount window and had $2.38 billion available for borrowing.
F-41
Subordinated Notes Payable
On March 13, 2017, the Company completed the public offering and sale of $75.0 million in aggregate principal amount of its
5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 (the “2027 subordinated notes”). The 2027 subordinated notes
were sold to the public at par pursuant to an underwriting agreement and were issued pursuant to an indenture and a
supplemental indenture. The 2027 subordinated notes will mature on March 15, 2027 and through March 14, 2022 will bear a
fixed rate of interest of 5.75% per annum, payable semi-annually in arrears on September 15 and March 15 of each year.
Beginning March 15, 2022, the interest rate on the 2027 subordinated notes resets quarterly to a floating rate per annum equal
to the then-current three-month LIBOR plus 3.616%, payable quarterly in arrears on June 15, September 15, December 15 and
March 15 of each year to the maturity date or earlier redemption. On any scheduled interest payment date beginning March 15,
2022, the Company may, at its option, redeem the 2027 subordinated notes, in whole or in part, at a redemption price equal to
100% of the principal amount plus accrued and unpaid interest.
On December 6, 2019, the Company completed the public offering and sale of $120.0 million in aggregate principal amount of
its 4.25% Fixed-To-Floating Rate Subordinated Notes due 2029 (the “2029 subordinated notes”). The 2029 subordinated notes
were sold to the public at par pursuant to an underwriting agreement and were issued pursuant to an indenture and a
supplemental indenture. The 2029 subordinated notes will mature on December 15, 2029 and through December 14, 2024 will
bear a fixed rate of interest of 4.25% per annum, payable semi-annually in arrears on June 15 and December 15 of each year.
Beginning December 15, 2024, the interest rate on the 2029 subordinated notes resets quarterly to a floating rate per annum
equal to the then-current three-month SOFR plus 2.94%, payable quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year to the maturity date or earlier redemption. On any scheduled interest payment date beginning
December 15, 2024, the Company may, at its option, redeem the 2029 subordinated notes, in whole or in part, at a redemption
price equal to 100% of the principal amount plus accrued and unpaid interest.
On September 28, 2020, the Company completed the public offering and sale of $110.0 million in aggregate principal amount
of its 3.875% Fixed-To-Floating Rate Subordinated Notes due 2030 (the “2030 subordinated notes”). The 2030 subordinated
notes were sold to the public at par pursuant to an underwriting agreement and were issued pursuant to an indenture and a
supplemental indenture. The 2030 subordinated notes will mature on October 1, 2030 and through September 30, 2025 will
bear a fixed rate of interest of 3.875% per annum, payable semi-annually in arrears on April 1 and October 1 of each year.
Beginning October 1, 2025, the interest rate on the 2030 subordinated notes resets quarterly to a floating rate per annum equal
to the then-current three-month SOFR plus 3.753%, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of
each year to the maturity date or earlier redemption. On any scheduled interest payment date beginning October 1, 2025, the
Company may, at its option, redeem the 2030 subordinated notes, in whole or in part, at a redemption price equal to 100% of
the principal amount plus accrued and unpaid interest.
The 2027, 2029 and 2030 subordinated notes are unsecured and rank equally with all other unsecured subordinated
indebtedness of the Company, including any subordinated indebtedness issued in the future under the indenture governing the
2027, 2029 and 2030 subordinated notes. The 2027, 2029 and 2030 subordinated notes are subordinated in right of payment to
all senior indebtedness of the Company. The 2027, 2029 and 2030 subordinated notes are obligations of the Company only and
are not guaranteed by any subsidiaries, including the Bank. Additionally, the 2027, 2029 and 2030 subordinated notes are
structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries, meaning
that creditors of the Company’s subsidiaries (including, in the case of the Bank, its depositors) generally will be paid from those
subsidiaries’ assets before holders of the 2027, 2029 and 2030 subordinated notes have any claim to those assets.
As a result of the Fidelity acquisition on July 1, 2019, the Bank assumed $75.0 million in aggregate principal amount of
5.875% Fixed-To-Floating Rate Subordinated Notes due 2030 (the "Bank subordinated notes"). The Bank subordinated notes
were acquired inclusive of an unaccreted purchase accounting fair value adjustment of $1.3 million. The Bank subordinated
notes will mature on May 31, 2030, and through May 31, 2025 will bear a fixed rate of interest of 5.875% per annum, payable
semi-annually in arrears on December 1 and June 1 of each year. Beginning on June 1, 2025, the interest rate on the Bank
subordinated notes resets quarterly to a floating rate per annum equal to the then-current three-month LIBOR plus 3.63%,
payable quarterly in arrears on September 1, December 1, March 1 and June 1 of each year to the maturity date or earlier
redemption. On any scheduled interest payment date beginning June 1, 2025, the Bank may, at its option, redeem the Bank
subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid
interest. The Bank subordinated notes of the Bank are unsecured and structurally rank senior to all other unsecured
subordinated indebtedness of the Company. The Bank subordinated notes are subordinated in right of payment to all senior
indebtedness of the Bank.
For regulatory capital adequacy purposes, the Bank subordinated notes qualify as Tier 2 capital for the Bank and the 2027,
2029, 2030 and Bank subordinated notes (collectively "subordinated notes") qualify as Tier 2 capital for the Company. If in the
F-42
future the subordinated notes no longer qualify as Tier 2 capital, the subordinated notes may be redeemed by the Bank or
Company at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, subject to prior
approval by the Board of Governors of the Federal Reserve System.
As a result of the Balboa acquisition in December 2021, the Bank assumed Balboa's $50.0 million principal amount 5.50%
Fixed Rate Subordinated Note due June 1, 2026 (the "Balboa Note"). The Balboa Note was assumed inclusive of an unaccreted
purchase accounting fair value adjustment of $500,000. In January 2022, the Bank fully redeemed the Balboa Note, which was
redeemable in whole or in part prior to maturity upon a qualifying change of control or at any time on or after the third
anniversary of the issue date.
Securitization Facilities
As a result of the Balboa acquisition in December 2021, the Bank acquired three subsidiaries established by Balboa to facilitate
asset-backed securitization transactions. Each of the securitization facilities issued notes secured by equipment loans and
leases. Loans and leases totaling $265.1 million and restricted cash balances held with the trustees of $43.0 million secured
these facilities at December 31, 2021 which were due through 2027 and were redeemable on any payment date where either (1)
the aggregate outstanding note balance, after giving effect to the payments made on such payment date, was less than or equal
to 10% of the aggregate initial note balance under the indentures or (2) a change of control occurred and at least 12 months had
elapsed since the Closing Date. The Bank fully redeemed each of the securitization facilities in January 2022.
NOTE 9. SUBORDINATED DEFERRABLE INTEREST DEBENTURES
Through formation and various acquisitions, the Company has assumed subordinated deferrable interest debenture obligations
related to trusts that issued trust preferred securities. 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 deferrable interest debentures issued by the Company and purchased by the trusts remain on the
consolidated balance sheets. The Company's investment in the common stock of the trusts is included in other assets and totaled
$4.7 million at December 31, 2022 and 2021. In addition, the related interest expense continues to be included in the
consolidated statements of income. For regulatory capital purposes, the trust preferred securities qualify as a component of Tier
2 Capital. At any interest payment date, the Company may redeem the debentures at par and thereby cause a redemption of the
trust preferred securities in whole or in part.
The following table summarizes the terms of the Company's outstanding subordinated deferrable interest debentures as of
December 31, 2022:
December 31, 2022
(dollars in thousands)
Name of Trust
Issuance Date
Rate
Rate at
December 31,
2022
Maturity Date
Issuance
Amount
Unaccreted
Purchase
Discount
Carrying
Value
Prosperity Bank Statutory Trust II
March 2003
3-month LIBOR plus 3.15%
Fidelity Southern Statutory Trust I
June 2003
3-month LIBOR plus 3.10%
Coastal Bankshares Statutory Trust I
August 2003
3-month LIBOR plus 3.15%
Jacksonville Statutory Trust I
Prosperity Banking Capital Trust I
June 2004
June 2004
3-month LIBOR plus 2.63%
3-month LIBOR plus 2.57%
Merchants & Southern Statutory Trust I
March 2005
3-month LIBOR plus 1.90%
Fidelity Southern Statutory Trust II
March 2005
3-month LIBOR plus 1.89%
Atlantic BancGroup, Inc. Statutory Trust I
September 2005
3-month LIBOR plus 1.50%
Coastal Bankshares Statutory Trust II
December 2005
3-month LIBOR plus 1.60%
Cherokee Statutory Trust I
November 2005
3-month LIBOR plus 1.50%
Prosperity Bank Statutory Trust III
January 2006
3-month LIBOR plus 1.60%
Merchants & Southern Statutory Trust II
March 2006
3-month LIBOR plus 1.50%
Jacksonville Statutory Trust II
December 2006
3-month LIBOR plus 1.73%
Ameris Statutory Trust I
December 2006
3-month LIBOR plus 1.63%
Fidelity Southern Statutory Trust III
August 2007
3-month LIBOR plus 1.40%
Prosperity Bank Statutory Trust IV
September 2007
3-month LIBOR plus 1.54%
Jacksonville Bancorp, Inc. Statutory Trust III
June 2008
3-month LIBOR plus 3.75%
7.87%
7.82%
7.23%
7.37%
6.24%
6.64%
6.63%
6.27%
6.37%
6.27%
6.37%
6.27%
6.50%
6.40%
6.17%
6.31%
8.52%
March 26, 2033
$
4,640 $
811 $
3,829
June 26, 2033
15,464
1,031
14,433
October 7, 2033
June 17, 2034
June 30, 2034
March 17, 2035
March 17, 2035
September 15, 2035
December 15, 2035
December 15, 2035
March 15, 2036
June 15, 2036
December 15, 2036
December 15, 2036
September 15, 2037
December 15, 2037
September 15, 2038
5,155
4,124
5,155
3,093
10,310
3,093
10,310
3,093
10,310
3,093
3,093
37,114
20,619
7,940
7,784
832
691
1,177
773
1,759
983
2,969
594
3,310
909
817
—
4,880
3,650
882
4,323
3,433
3,978
2,320
8,551
2,110
7,341
2,499
7,000
2,184
2,276
37,114
15,739
4,290
6,902
Total
$ 154,390 $
26,068 $ 128,322
F-43
NOTE 10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income (loss) for the Company consists of changes in net unrealized gains and losses on
debt securities available-for-sale and interest rate swap derivatives. The following tables present a summary of the accumulated
other comprehensive income (loss) balances, net of tax, as of December 31, 2022, 2021 and 2020.
(dollars in thousands)
Balance, December 31, 2021
Current year changes, net of tax
Balance, December 31, 2022
(dollars in thousands)
Balance, December 31, 2020
Current year changes, net of tax
Balance, December 31, 2021
(dollars in thousands)
Balance, December 31, 2019
Current year changes, net of tax
Balance, December 31, 2020
Unrealized
Gain (Loss)
on Derivatives
Unrealized
Gain (Loss)
on Securities
Accumulated
Other
Comprehensive
Income (Loss)
$
$
— $
—
15,590 $
(62,097)
— $
(46,507) $
15,590
(62,097)
(46,507)
Unrealized
Gain (Loss)
on Derivatives
Unrealized
Gain (Loss)
on Securities
Accumulated
Other
Comprehensive
Income (Loss)
$
$
— $
—
— $
33,505 $
(17,915)
15,590 $
33,505
(17,915)
15,590
Unrealized
Gain (Loss)
on Derivatives
Unrealized
Gain (Loss)
on Securities
Accumulated
Other
Comprehensive
Income (Loss)
$
$
(147) $
18,142 $
147
15,363
— $
33,505 $
17,995
15,510
33,505
NOTE 11. – REVENUE FROM CONTRACTS WITH CUSTOMERS
The following provides information on noninterest income categories that contain ASC 606 Revenue for the periods indicated.
(dollars in thousands)
Service charges on deposit accounts
ASC 606 revenue items
Debit card interchange fees
Overdraft fees
Other service charges on deposit accounts
Total ASC 606 revenue included in service charges on deposits accounts
For the Years Ended December 31,
2022
2021
2020
$
15,884 $
16,798 $
15,813
12,802
44,499
16,113
12,195
45,106
Total service charges on deposit accounts
$
44,499 $
45,106 $
Other service charges, commissions and fees
ASC 606 revenue items
ATM fees
Total ASC 606 revenue included in other service charges, commission and fees
Other
Total other service charges, commission and fees
$
$
3,508 $
3,751 $
3,508
367
3,751
437
3,875 $
4,188 $
F-44
15,988
17,903
10,254
44,145
44,145
3,633
3,633
281
3,914
(dollars in thousands)
Other noninterest income
ASC 606 revenue items
Trust and wealth management
Total ASC 606 revenue included in other noninterest income
Other
Total other noninterest income
For the Years Ended December 31,
2022
2021
2020
$
$
4,554 $
4,985 $
4,554
40,837
4,985
18,227
45,391 $
23,212 $
3,142
3,142
13,991
17,133
The following provides information on net gains recognized on the sale of OREO for the periods indicated.
(dollars in thousands)
Net gains recognized on sale of OREO
NOTE 12. INCOME TAXES
For the Years Ended December 31,
2022
2021
2020
$
2,130 $
131 $
365
The income tax expense in the consolidated statements of income consists of the following:
(dollars in thousands)
Current - federal
Current - state
Deferred - federal
Deferred - state
For the Years Ended December 31,
2021
2020
2022
$
$
114,346 $
27,889
(27,408)
(8,269)
106,558 $
67,076 $
13,712
30,321
8,090
119,199 $
73,705
12,479
(7,881)
(47)
78,256
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:
(dollars in thousands)
Federal income statutory rate
Tax at federal income tax rate
Change resulting from:
State income tax, net of federal benefit
Tax-exempt interest
Increase in cash value of bank owned life insurance
Excess tax (benefit) deficiency from stock compensation
Nondeductible merger expenses
Other
For the Years Ended December 31,
2021
2020
2022
21 %
21 %
21 %
$
95,151
$
104,166
$
71,460
13,763
(2,775)
(1,399)
(510)
167
2,161
18,923
(3,479)
(997)
(277)
142
721
9,812
(3,726)
(594)
371
2
2,827
(1,896)
78,256
Benefit related to carryback claims resulting from the CARES Act
Provision for income taxes
—
106,558
$
—
119,199
$
$
F-45
The components of deferred income taxes are as follows:
(dollars in thousands)
Deferred tax assets
Allowance for credit losses
Deferred compensation
Deferred loan fees
Purchase accounting adjustments
Other real estate owned
Net operating loss tax carryforward
Tax credit carryforwards
Unrealized loss on securities available for sale
Capitalized costs, accrued expenses and other
Lease liability
Deferred tax liabilities
Premises and equipment
Mortgage servicing rights
Subordinated debentures
Lease financing
Goodwill and intangible assets
Unrealized gain on securities available-for-sale
Origination costs
Right of use lease asset
$
December 31,
2022
2021
64,742 $
13,287
668
5,153
201
14,070
149
14,635
3,432
16,505
132,842
12,680
30,903
6,551
9,442
24,946
—
6,239
14,280
105,041
50,132
7,816
1,593
14,008
334
35,082
315
—
2,208
16,186
127,674
13,130
52,076
6,818
42,865
29,393
4,498
—
14,001
162,781
Net deferred tax asset (liability)
$
27,801 $
(35,107)
At December 31, 2022, the Company had federal net operating loss carryforwards of approximately $57.8 million which expire
at various dates from 2028 to 2036. At December 31, 2022, the Company had state net operating loss carryforwards of
approximately $53.8 million which expire at various dates from 2028 to 2036. The federal net operating loss carryforwards are
subject to limitations pursuant to Section 382 of the Internal Revenue Code and are expected to be recovered over the next 13
years. The state net operating loss carryforwards are subject to similar limitations and are expected to be recovered over the
next 13 years. Deferred tax assets are recognized for net operating losses because the benefit is more likely than not to be
realized.
Section 2303(b) of the CARES Act allows for certain net operating losses generated after December 31, 2017, but before
December 31, 2021, to be carried back to the five tax years preceding the loss. The Company carried back approximately
$13.2 million of eligible net operating losses to preceding tax years. The Company recorded a benefit of $1.9 million due to the
carryback of these net operating losses for the tax year ended December 31, 2020.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion
or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during periods in which those temporary differences become deductible. Management
considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in
making this assessment. Based on the level of historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will
realize the benefits of these deferred tax assets at December 31, 2022.
As described in Note 2 to the consolidated financial statements, in December 2021 Ameris Bank acquired Balboa Capital
Corporation. The Company completed its analysis of the tax effects of this transaction during 2022. The consolidated balance
sheet reflects this final analysis.
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the various states. The
Company is no longer subject to examination by federal taxing authorities for years before 2019 and state taxing authorities for
years before 2018.
F-46
Although Ameris is unable to determine the ultimate outcome of current and future events, Ameris believes that the liability
recorded for uncertain tax positions is adequate. A reconciliation of the beginning and ending amount of unrecognized income
tax benefits is as follows.
(dollars in thousands)
Beginning Balance
Current Activity:
Additions for tax positions of prior years
Additions from acquisitions
Settlements
Ending Balance
For the Years Ended December 31,
2022
2021
$
$
1,903 $
2,319
1,001
(4,222)
1,001 $
—
1,903
—
—
1,903
Accrued interest and penalties related to unrecognized income tax benefits are included as a component of income tax expense.
Accrued interest and penalties on unrecognized income tax benefits totaled $11,000 and $331,000 as of December 31, 2022 and
2021, respectively. Unrecognized income tax benefits as of December 31, 2022 and 2021, that, if recognized, would affect the
effective income tax rate totaled $919,000 and $1.8 million (net of the federal benefit on state income tax issues), respectively.
Accruals of penalties and interest resulted in a expense of $153,000 and $248,000 in 2022 and 2021, respectively. Ameris
expects that all uncertain income tax positions will be either settled or resolved during the next twelve months.
The Company did not record any interest and penalties related to income taxes for the year ended December 31, 2020.
NOTE 13. 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 their compensation and provides that the Company will match a portion of the deferred
compensation. The Plan also provides for non-elective and discretionary contributions. All full-time and part-time employees
are eligible to participate in the Plan provided they have met the eligibility requirements. An employee is eligible to participate
in the Plan after 30 days of employment and having attained an age of 18 years.
The aggregate expense under the Plan charged to operations during 2022, 2021 and 2020 amounted to $6.3 million, $5.4
million and $5.9 million, respectively.
NOTE 14. DEFERRED COMPENSATION PLANS
The Company and the Bank have entered into separate deferred compensation arrangements and supplemental executive
retirement plans 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 the Bank have purchased life insurance policies which they intend to use to fund these liabilities. The cash
surrender value of the life insurance was $388.4 million and $331.1 million at December 31, 2022 and 2021, respectively. The
Company and the Bank assumed certain split dollar agreements in the acquisition of Fidelity which provide for death benefits to
designated beneficiaries of the executive or director. Accrued deferred compensation of $277,000 and $298,000 at
December 31, 2022 and 2021, respectively, is included in other liabilities. Accrued supplemental executive retirement plan and
split dollar agreement liabilities of $11.3 million and $11.0 million at December 31, 2022 and 2021, respectively, is also
included in other liabilities. Aggregate compensation expense under the plans was $776,000, $877,000 and $830,000 per year
for 2022, 2021 and 2020, respectively, which is included in salaries and employee benefits.
NOTE 15. SHARE-BASED COMPENSATION
The Company awards its employees and directors various forms of share-based incentives under certain plans approved by its
shareholders. Awards granted under the 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 plans. The plans provide that the aggregate number of shares of the
Company’s common stock which may be subject to award may not exceed 2,820,312 subject to adjustment in certain
circumstances to prevent dilution. At December 31, 2022, there were 2,619,730 shares available to be issued under the plans.
F-47
All stock options have an exercise price that is equal to the closing fair market value of the Company’s stock on the date the
options were granted. Options granted under the plans generally vest over a five-year period and have a 10-year maximum
term. Most options granted since 2005 contain performance-based vesting conditions.
The Company did not grant any options during 2022, 2021 or 2020. As of December 31, 2022, there was no unrecognized
compensation cost related to nonvested share-based compensation arrangements granted related to performance or non-
performance-based options.
As of December 31, 2022, the Company has 222,280 outstanding restricted shares granted under the plans as compensation to
certain employees and directors. These shares carry dividend and voting rights. Sales of these shares are restricted prior to the
date of vesting, which is one 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. The compensation expense is recognized on a straight-line basis over the related vesting
period. In 2022, 2021 and 2020, compensation expense related to these grants was approximately $4.4 million, $5.3 million,
and $3.3 million, respectively. The total income tax (deficiency) benefit related to these grants was approximately $293,000,
$338,000 and $(161,000) in 2022, 2021 and 2020, respectively.
It is the Company’s policy to issue new shares for stock option exercises and restricted stock rather than issue treasury
shares. The Company recognizes share-based compensation expense on a straight-line basis over the options’ related vesting
term. The Company did not record any share-based compensation expense related to stock options during 2022, 2021 and 2020.
The total income tax benefit related to stock options was approximately $339,000, $631,000 and $93,000 in 2022, 2021 and
2020, respectively.
A summary of the activity of non-performance-based options as of and for the years ended December 31, 2022, and 2021 is
presented below.
2022
2021
Weighted
Average
Exercise
Price
Weighted
Average
Contractual
Term
Aggregate
Intrinsic
Value
$ (000)
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Contractual
Term
Aggregate
Intrinsic
Value
$ (000)
Shares
Under option, beginning of
year
Exercised
Forfeited
Under option, end of year
Exercisable at end of year
117,135 $
(97,135)
(4,000)
16,000 $
16,000 $
28.79
29.22
29.31
29.69
29.69
$
1,936
0.05
0.05
$
$
279
279
279,695 $
(160,960)
(1,600)
117,135 $
117,135 $
28.13
27.35
22.34
28.79
28.79
$
3,406
0.66
0.66
$
$
2,389
2,389
A summary of the status of the Company’s restricted stock awards as of and for the years ended December 31, 2022, and 2021
is presented below.
Nonvested shares at beginning of year
Granted
Vested
Forfeited
Nonvested shares at end of year
2022
2021
Weighted
Average
Grant Date
Fair Value
Shares
Weighted
Average
Grant Date
Fair Value
Shares
225,869 $
165,686
(154,386)
(14,889)
222,280
38.06
47.67
40.72
38.92
43.31
258,753 $
99,308
(129,497)
(2,695)
225,869
33.21
47.35
35.85
37.32
38.06
The balance of unearned compensation related to restricted stock grants as of December 31, 2022, 2021 and 2020 was
approximately $5.6 million, $3.8 million, and $3.9 million, respectively. At December 31, 2022, the cost is expected to be
recognized over a weighted-average period of 1.8 years.
During 2022 and 2021, the Company issued 35,108 and 24,294 performance stock units ("PSUs") with a weighted average
grant date fair value of $47.71 and $46.32, respectively, subject to a performance condition tied to tangible book value growth
over a three-year period. The Company also granted 35,108 and 24,286 PSUs in 2022 and 2021, respectively, subject to a
three-year performance metric of return on tangible common equity relative to a market index with a potential modifier subject
to a total shareholder return ("TSR") performance metric with a weighted average grant date fair value of $48.53 and $48.75,
F-48
respectively. The fair value of the PSUs subject to TSR at the grant date was determined using a Monte Carlo simulation
method. The Company communicates threshold, target and maximum performance PSUs and performance targets to the
applicable employees at the beginning of the performance periods. Dividends are not paid in respect of the awards during the
performance period, although dividend equivalents do accrue over the life of the award and will vest, if at all, at the same time
as the PSUs to which they relate. The number of PSUs that ultimately vest at the end of the three-year performance period, if
any, will be based on the Company's performance relative to the applicable performance metrics. In 2022, 2021 and 2020, the
Company recognized compensation cost related to these grants of approximately $2.3 million, $2.6 million and $630,000,
respectively. The balance of unearned compensation related to PSU grants as of December 31, 2022, 2021 and 2020 was
approximately $3.1 million, $3.2 million and $1.3 million, respectively.
A summary of the Company's nonvested PSUs for the years ended December 31, 2022, and 2021 is presented below:
Nonvested units at beginning of year
Granted
Vested
Forfeited
Nonvested units at end of year
2022
2021
Weighted
Average
Grant Date
Fair Value
Shares
Weighted
Average
Grant Date
Fair Value
Shares
121,270 $
70,216
(68,955)
(12,277)
110,254
32.71
48.12
24.88
35.19
47.15
76,792 $
48,580
—
(4,102)
121,270
25.19
47.53
—
35.80
32.71
NOTE 16. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Cash Flow Hedge
During 2010, the Company entered into an interest rate swap to lock in a fixed rate as opposed to the contractual variable
interest rate on certain junior subordinated debentures. The interest rate swap contract had a notional amount of $37.1 million
and was hedging the variable rate on certain junior subordinated debentures described in Note 9 of the consolidated financial
statements. The Company received a variable rate of the 90-day LIBOR rate plus 1.63% and paid a fixed rate of 4.11%. The
swap matured in September 2020.
This contract was classified as a cash flow hedge of an exposure to changes in the cash flow of a recognized liability. 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. Interest expense recorded on this swap transaction
totaled $420,000 during 2020 and is reported as a component of interest expense on other borrowings.
Mortgage Banking Derivatives
The Company maintains a risk management program to manage interest rate risk and pricing risk associated with its mortgage
lending activities. This program includes the use of forward contracts and other derivatives that are used to offset changes in
value of the mortgage inventory due to changes in market interest rates. Forward contracts to sell primarily fixed-rate mortgage
loans are entered into to reduce the exposure to market risk arising from potential changes in interest rates, which could affect
the fair value of mortgage loans held for sale and outstanding interest rate lock commitments, which guarantee a certain interest
rate if the loan is ultimately funded or granted by the Company as a mortgage loan held for sale. The commitments to sell
mortgage loans are at fixed prices and are scheduled to settle at specified dates.
The Company enters into interest rate lock commitments for residential mortgage loans which commits it to lend funds to a
potential borrower at a specific interest rate and within a specified period of time. Interest rate lock commitments that relate to
the origination of mortgage loans that, if originated, will be held for sale, are considered derivative financial instruments under
applicable accounting guidance. Outstanding interest rate lock commitments expose the Company to the risk that the price of
the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the
rate lock to the funding of the loan and the eventual commitment for sale into the secondary market.
These mortgage banking derivatives are carried at fair value and are not designated in hedge relationships. Fair values are
estimated based on changes in mortgage interest rates from the date of the commitments. Changes in the fair values of these
F-49
mortgage banking derivatives are included as a component of mortgage banking activity in the consolidated statements of
income.
Customer Related Derivative Positions
The Company enters into interest rate derivative contracts to facilitate the risk management strategies of certain clients. The
Company mitigates this risk largely by entering into equal and offsetting interest rate swap agreements with highly rated
counterparties. The interest rate contracts are free-standing derivatives and are recorded at fair value on the Company's
consolidated balance sheets. The credit risk to these clients is evaluated and included in the calculation of fair value. Fair value
changes including credit-related adjustments are recorded as a component of other noninterest income.
The following table reflects the notional amount and fair value of derivative instruments not designated as hedging instruments
included in the consolidated balance sheets as of December 31, 2022 and 2021.
December 31, 2022
December 31, 2021
Fair Value
Fair Value
(dollars in thousands)
Interest rate contracts(3)
Mortgage derivatives - interest rate lock
commitments
Notional
Amount
Derivative
Assets(1)
Derivative
Liabilities(2)
Notional
Amount
Derivative
Assets(1)
$
244,422 $
4,580 $
4,574 $
— $
— $
Derivative
Liabilities(2)
—
148,148
1,434
—
—
417,126
11,940
1,935,237
—
—
710
Mortgage derivatives - forward contracts
related to mortgage loans held for sale
(1)Derivative assets are included in other assets on the consolidated balance sheets.
(2)Derivative liabilities are included in other liabilities on the consolidated balance sheets.
(3)Includes interest rate contracts for client swaps and offsetting positions.
689,500
2,499
The net gains (losses) relating to changes in fair value from derivative instruments not designated as hedging instruments are
summarized below for the years ended December 31, 2022, 2021 and 2020.
(dollars in thousands)
Interest rate contracts(1)
Interest rate lock commitments
Location
2022
2021
2020
Other noninterest income
$
6 $
— $
—
Year Ended December 31,
Mortgage banking activity
(10,506)
(39,816)
43,942
(11,944)
Forward contracts related to mortgage loans held for sale
(1)Gain (loss) represents net fair value adjustments (including credit related adjustments) for client swaps and offsetting positions.
Mortgage banking activity
15,705
3,209
NOTE 17. FAIR VALUE MEASURES
The fair value of an asset or liability 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 assets and liabilities. 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 asset or liability. The accounting standard for disclosures about the fair value
measures 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 Company's loans held for sale under the fair value option are comprised of the following:
(dollars in thousands)
Mortgage loans held for sale
SBA loans held for sale
Total loans held for sale
December 31,
2022
2021
$
$
390,583 $
1,247,997
1,495
6,635
392,078 $
1,254,632
The Company has elected to record mortgage loans held for sale at fair value in order to eliminate the complexities and inherent
difficulties of achieving hedge accounting and to better align reported results with the underlying economic changes in value of
F-50
the loans and related hedge instruments. This election impacts the timing and recognition of origination fees and costs, as well
as servicing value, which are now recognized in earnings at the time of origination. Interest income on mortgage loans held for
sale is recorded on an accrual basis in the consolidated statement of income under the heading interest income – interest and
fees on loans. The servicing value is included in the fair value of the IRLCs with borrowers. The mark to market adjustments
related to mortgage loans held for sale and the associated economic hedges are captured in mortgage banking activities. Net
losses of $35.4 million and $14.2 million and a net gain of $747,000 resulting from fair value changes of these mortgage loans
were recorded in income during the years ended December 31, 2022, 2021 and 2020, respectively. These amounts do not reflect
changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these
mortgage loans. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however,
given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit
risk is nominal. Net losses of $7.3 million and $24.1 million and a net gain of $32.0 million resulting from changes in the fair
value of the related derivative financial instruments used to hedge exposure to the market-related risks associated with these
mortgage loans were recorded in income during the years ended December 31, 2022, 2021 and 2020, respectively.
The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale
measured at fair value as of December 31, 2022 and 2021.
(dollars in thousands)
Aggregate fair value of mortgage loans held for sale
Aggregate unpaid principal balance of mortgage loans held for sale
Past due loans of 90 days or more
Nonaccrual loans
Unpaid principal balance of nonaccrual loans
December 31,
2022
2021
$
390,583 $
1,247,997
389,610
1,211,646
—
—
—
746
746
718
The following table summarizes the difference between the fair value and the principal balance for SBA loans held for sale
measured at fair value as of December 31, 2022 and 2021.
(dollars in thousands)
Aggregate fair value of SBA loans held for sale
Aggregate unpaid principal balance of SBA loans held for sale
Past due loans of 90 days or more
Nonaccrual loans
December 31,
2022
2021
$
1,495 $
1,350
—
—
6,635
5,825
—
—
The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine
fair value disclosures. Securities available-for-sale, loans held for sale and derivative financial instruments are recorded at fair
value on a recurring basis. From time to time, the Company may be required to record at fair value other assets on a
nonrecurring basis, such as collateral-dependent loans, loan servicing rights and OREO. Additionally, the Company is required
to disclose, but not record, the fair value of other financial instruments.
Fair Value Hierarchy
The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities
are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the
assets or liabilities.
The following methods and assumptions were used by the Company in estimating the fair value of its assets and liabilities
recorded at fair value and for estimating the fair value of its financial instruments:
F-51
Cash and Due From Banks, Federal Funds Sold and Interest-Bearing Deposits in Banks, and Time Deposits in Other
Banks: Cash and due from banks, federal funds sold and interest-bearing deposits in banks, and time deposits in other banks are
repriced on a short-term basis; as such, the carrying value approximates fair value approximates fair value.
Debt Securities: The fair value of debt securities is determined by various valuation methodologies. Where quoted market
prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market
prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar
characteristics, or discounted cash flows, and are classified within Level 2 of the valuation hierarchy and includes certain U.S.
agency bonds, mortgage-backed securities, collateralized mortgage and debt obligations, and municipal securities. The Level 2
fair value pricing is provided by an independent third party and is based upon similar securities in an active market. In certain
cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and may include
certain residual municipal securities and other less liquid securities.
Loans Held for Sale: The Company records mortgage and SBA loans held for sale at fair value under the fair value option.
The fair value of loans held for sale is determined on outstanding commitments from third party investors in the secondary
markets and is classified within Level 2 of the valuation hierarchy. Other loans held for sale are carried at the lower of cost or
fair value.
Loans: The fair value for loans held for investment is estimated using an exit price methodology. An exit price methodology
considers expected cash flows that take into account contractual loan terms, as applicable, prepayment expectations, probability
of default, loss severity in the event of default, recovery lag and, in the case of variable rate loans, expectations for future
interest rate movements. These cash flows are present valued at a risk adjusted discount rate, which considers the cost of
funding, liquidity, servicing costs, and other factors. Because observable quoted prices seldom exist for identical or similar
assets carried in loans held for investment, Level 3 inputs are primarily used to determine fair value exit pricing. The fair value
of collateral-dependent loans is estimated based on discounted cash flows or underlying collateral values, where applicable.
When foreclosure is probable, the fair value of collateral-dependent loans is determined based on collateral values less
estimated costs to sell. The fair value of collateral dependent-loans for which foreclosure is not probable is measured either
using discounted cash flows or estimated collateral value. Management has determined that the majority of collateral-
dependent loans are Level 3 assets due to the extensive use of market appraisals.
Other Real Estate Owned: The fair value of OREO is determined using certified appraisals and internal evaluations that value
the property at its highest and best use by applying traditional valuation methods common to the industry. The Company does
not hold any OREO for profit purposes and all other real estate is actively marketed for sale. In most cases, management has
determined that additional write-downs are required beyond what is calculable from the appraisal to carry the property at levels
that would attract buyers. Because this additional write-down is not based on observable inputs, management has determined
that OREO should be classified as Level 3.
Accrued Interest Receivable/Payable: The carrying amount of accrued interest receivable and accrued interest payable
approximates fair value.
Deposits: The carrying amount of demand deposits, savings deposits and variable-rate certificates of deposit approximates fair
value due to those products having no stated maturity. 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.
Securities Sold under Agreements to Repurchase and Other Borrowings: The carrying amount of securities sold under
agreements to repurchase approximates fair value and is classified as Level 1. The carrying amount of variable rate other
borrowings approximates fair value and is classified as Level 1. The fair value of fixed rate other borrowings is estimated based
on discounted contractual cash flows using the current incremental borrowing rates for similar borrowing arrangements and is
classified as Level 2.
Subordinated Deferrable Interest Debentures: The fair value of the Company’s trust preferred securities is based on
discounted cash flows using rates for securities with similar terms and remaining maturities and are classified as Level 2.
Off-Balance-Sheet Instruments: Because commitments to extend credit and standby letters of credit are typically made using
variable rates and have short maturities, the carrying value and fair value are immaterial for disclosure.
Derivatives: The Company has entered into derivative financial instruments to manage interest rate risk. The valuation of these
instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected
cash flows of the derivatives. This analysis reflects the contractual terms of the derivative, including the period to maturity, and
F-52
uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the derivatives is
determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted
expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward
curves derived from observable market interest rate curves).
The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the
respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative
contracts for the effect of nonperformance risk, the Company has considered the impact of netting any applicable credit
enhancements such as collateral postings, thresholds, mutual puts and guarantees.
Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair
value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of
current credit spreads to evaluate the likelihood of default by itself or the counterparty. However, as of December 31, 2022, the
Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its
derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation of its
derivatives. As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the
fair value hierarchy.
The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and
the level within the fair value hierarchy in which the fair value measurements fall as of December 31, 2022 and 2021.
(dollars in thousands)
Financial assets:
U.S. Treasuries
U.S. government-sponsored agencies
State, county and municipal securities
Corporate debt securities
SBA pool securities
Mortgage-backed securities
Loans held for sale
Derivative financial instruments
Mortgage banking derivative instruments
Total recurring assets at fair value
Financial liabilities:
Derivative financial instruments
Total recurring liabilities at fair value
Recurring Basis
Fair Value Measurements
December 31, 2022
Fair Value
Level 1
Level 2
Level 3
$
759,534 $
759,534 $
— $
979
34,195
15,926
27,398
662,028
392,078
4,580
3,933
—
—
—
—
—
—
—
—
979
34,195
14,771
27,398
662,028
392,078
4,580
3,933
—
—
—
1,155
—
—
—
—
—
$
$
$
1,900,651 $
759,534 $
1,139,962 $
1,155
4,574 $
4,574 $
— $
— $
4,574 $
4,574 $
—
—
F-53
(dollars in thousands)
Financial assets:
U.S. government-sponsored agencies
State, county and municipal securities
Corporate debt securities
SBA pool securities
Mortgage-backed securities
Loans held for sale
Mortgage banking derivative instruments
Total recurring assets at fair value
Financial liabilities:
Mortgage banking derivative instruments
Total recurring liabilities at fair value
Recurring Basis
Fair Value Measurements
December 31, 2021
Fair Value
Level 1
Level 2
Level 3
$
7,172 $
— $
7,172 $
47,812
28,496
45,201
463,940
1,254,632
11,940
—
—
—
—
—
—
47,812
27,116
45,201
463,940
1,254,632
11,940
—
—
1,380
—
—
—
—
$
$
$
1,859,193 $
— $
1,857,813 $
1,380
710 $
710 $
— $
— $
710 $
710 $
—
—
The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as
the general classification of such instruments pursuant to the valuation hierarchy as of December 31, 2022 and 2021.
(dollars in thousands)
December 31, 2022
Collateral-dependent loans
Total nonrecurring assets at fair value
December 31, 2021
Collateral-dependent loans
Mortgage servicing rights
Total nonrecurring assets at fair value
Nonrecurring Basis
Fair Value Measurements
Fair Value
Level 1
Level 2
Level 3
$
$
$
$
31,972 $
31,972 $
44,181 $
206,944
251,125 $
— $
— $
— $
—
— $
— $
— $
31,972
31,972
— $
—
— $
44,181
206,944
251,125
The inputs used to determine estimated fair value of collateral-dependent loans include market conditions, loan term,
underlying collateral characteristics and discount rates. The inputs used to determine fair value of mortgage servicing rights
include discount rates and prepayment speeds.
For the years ended December 31, 2022 and 2021, there was not a change in the methods and significant assumptions used to
estimate fair value.
F-54
The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets.
(dollars in thousands)
As of December 31, 2022
Recurring:
Fair
Value
Valuation
Technique
Unobservable
Inputs
Range of
Discounts
Weighted
Average
Discount
Debt securities available-for-sale
$
1,155 Discounted cash flows
Probability of
Default
Loss Given
Default
12.1%
12.1%
41%
41%
Nonrecurring:
Collateral-dependent loans
$ 31,972
Third-party appraisals
and discounted cash
flows
Collateral
discounts and
discount rates
0% - 48%
27%
As of December 31, 2021
Recurring:
Debt securities available-for-sale
$
1,380 Discounted par values
Discount rate
8%
8%
Nonrecurring:
Collateral-dependent loans
$ 44,181
Third-party appraisals
and discounted cash
flows
Mortgage servicing rights
$ 206,944 Discounted cash flows
Collateral
discounts and
discount rates
Discount rate
0% - 50%
9% - 10%
Prepayment speed
10% - 40%
39%
9%
13%
F-55
The carrying amount and estimated fair value of the Company’s financial instruments, not shown elsewhere in these financial
statements, were as follows.
(dollars in thousands)
Financial assets:
Cash and due from banks
Federal funds sold and interest-bearing accounts
Debt securities held-to-maturity
Loans, net
Accrued interest receivable
Financial liabilities:
Deposits
Other borrowings
Subordinated deferrable interest debentures
Accrued interest payable
(dollars in thousands)
Financial assets:
Cash and due from banks
Federal funds sold and interest-bearing accounts
Time deposits in other banks
Loans, net
Accrued interest receivable
Financial liabilities:
Deposits
Securities sold under agreements to repurchase
Other borrowings
Subordinated deferrable interest debentures
Accrued interest payable
NOTE 18. LEASES
833,565
134,864
19,617,604
77,042
19,462,738
1,875,736
128,322
10,530
Carrying
Amount
Fair Value Measurements
December 31, 2022
Carrying
Amount
Level 1
Level 2
Level 3
Total
$ 284,567 $ 284,567 $
833,565
—
—
—
— $
—
114,538
—
7,694
— $ 284,567
833,565
—
114,538
19,067,612
77,042
19,067,612
69,348
—
—
—
—
19,455,187
1,861,850
125,988
10,530
—
—
—
—
19,455,187
1,861,850
125,988
10,530
Fair Value Measurements
December 31, 2021
Level 1
Level 2
Level 3
Total
$ 307,813 $ 307,813 $
3,756,844
—
15,662,495
56,917
3,756,844
—
—
—
— $
—
—
—
2,373
— $ 307,813
3,756,844
—
—
—
15,509,410
15,509,410
56,917
54,544
19,665,553
5,845
739,879
126,328
4,313
—
5,845
—
—
—
19,667,612
—
760,829
117,764
4,313
—
—
—
—
—
19,667,612
5,845
760,829
117,764
4,313
Operating lease cost was $11.6 million, $12.3 million and $16.1 million for the years ended December 31, 2022, 2021 and
2020, respectively. For the years ended December 31, 2022, 2021 and 2020, sublease income offsetting operating lease cost
was not material. Variable rent expense and short-term lease expense were not material for the years ended December 31, 2022
and 2021.
The following table presents the impact of leases on the Company's consolidated balance sheets at December 31, 2022 and
2021:
(dollars in thousands)
Operating lease right-of-use assets
Operating lease liabilities
December 31,
Location
2022
2021
Other assets
$
56,333 $
Other liabilities
65,088
56,070
64,823
F-56
Future maturities of the Company's operating lease liabilities are summarized as follows:
(dollars in thousands)
Year Ended December 31,
2023
2024
2025
2026
2027
Thereafter
Total lease payments
Less: Interest
Present value of lease liabilities
(dollars in thousands)
Supplemental lease information
Weighted-average remaining lease term (years)
Weighted-average discount rate
Lease Liability
$
11,327
9,674
7,992
7,500
6,297
25,734
68,524
(3,436)
65,088
$
$
December 31,
2022
2021
2020
8.1
1.46 %
8.3
1.36 %
9.2
1.85 %
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (cash payments)
Operating cash flows from operating leases (lease liability reduction)
Operating lease right-of-use assets obtained in exchange for leases entered into
during the year, net of business combinations
$
$
$
12,013
12,064
7,226
$
$
$
12,334
12,563
10,426
$
$
$
15,976
14,056
54,107
NOTE 19. 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
consolidated 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:
(dollars in thousands)
Commitments to extend credit
Unused home equity lines of credit
Financial standby letters of credit
Mortgage interest rate lock commitments
$
December 31,
2022
6,318,039 $
345,001
33,557
148,148
2021
4,328,749
272,029
36,184
417,126
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. These commitments, predominantly at variable interest rates, 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.
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. The Company has not been required to perform on any material
F-57
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, 2022 and 2021.
The Company maintains an allowance for credit losses on unfunded commitments which is recorded in other liabilities on the
consolidated balance sheet. The following table presents activity in the allowance for unfunded commitments for the periods
presented.
(dollars in thousands)
Balance at beginning of period
Adjustment to reflect adoption of ASU 2016-13
Provision for unfunded commitments
Balance at end of period
Other Commitments
Years Ended December 31,
2021
2020
2022
$
$
33,185 $
32,853 $
—
19,226
—
332
52,411 $
33,185 $
1,077
12,714
19,062
32,853
As of December 31, 2022, letters of credit issued by the FHLB totaling $400.0 million were used to guarantee the Bank’s
performance related to a portion of its public fund deposit balances.
Litigation and Regulatory Contingencies
The Company is, and has been, involved in various legal proceedings with William J. Villari, who formerly owned US
Premium Finance Holding Company (“USPF”), a provider of commercial insurance premium finance loans that the Company
acquired in January 2018. First, on December 13, 2018, Mr. Villari filed a demand for arbitration, claiming that the Bank’s
termination of his employment for “cause” was improper and that he was entitled to additional compensation from the
Company and the Bank under his employment agreement. Second, on December 28, 2018, Mr. Villari and his wholly owned
company, P1 Finance Holdings LLC (“P1”), filed a lawsuit against the Bank in Broward County, Florida, seeking additional
compensation for his service while an employee, as well as other relief. Third, on May 30, 2019, CEBV LLC (“CEBV”),
which also is wholly owned by Mr. Villari, filed a lawsuit against the Bank in Duval County, Florida, arising out of a loan
purchase agreement with the Bank dated May 8, 2018. CEBV’s complaint in that lawsuit, which also names as a defendant the
Company’s former Chief Executive Officer, Dennis J. Zember Jr., seeks unspecified damages and other relief related to asserted
claims for fraudulent inducement and breach of contract based on the Bank’s alleged failure to provide sufficient assistance to
CEBV in collecting on loans purchased by CEBV from the Bank. In addition, on January 30, 2019, the Company and the Bank
filed a lawsuit against Mr. Villari in Dekalb County, Georgia, asserting claims for unspecified damages arising from Mr.
Villari’s alleged failure to disclose material information in connection with the sale of USPF to the Company and the Bank.
In the first of these proceedings to be adjudicated, the Company and the Bank received on November 20, 2019, an Order and
Award from the American Arbitration Association in which the arbitrator ruled that the Company and the Bank had cause to
terminate Mr. Villari and had properly exercised that right and that, as a result, Mr. Villari is not entitled to any additional
payments under his employment agreement or a separate management and licensing agreement with the Bank. We believe the
remaining allegations of Mr. Villari, P1 and CEBV in their complaints are without merit, and we are vigorously defending the
cases. The amount of any ultimate liability in connection with these matters cannot be determined but we believe any such
amount, either individually or in the aggregate, will not have a material adverse effect on the consolidated results of operations
or financial condition of the Company.
Furthermore, from time to time, the Company and the Bank are subject to various legal proceedings, claims and disputes that
arise in the ordinary course of business. The Company and the Bank are also subject to regulatory examinations, information
gathering requests, inquiries and investigations in the ordinary course of business. Based on the Company’s current knowledge
and advice of counsel, management presently does not believe that the liabilities arising from these legal matters will have a
material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. However, it is
possible that the ultimate resolution of these legal matters could have a material adverse effect on the Company’s results of
operations and financial condition for any particular period.
The Company’s management and its legal counsel periodically assess contingent liabilities, which may result in a loss to the
Company but which will only be resolved when one or more future events occur or fail to occur, and such assessment
inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending
against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of
any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be
F-58
sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the
amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If
the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable
but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if
determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the nature of the guarantee would be disclosed.
NOTE 20. 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, 2022, $186.5 million 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.
Under the regulatory capital frameworks adopted by the Federal Reserve and the FDIC, Ameris and the Bank must each
maintain a common equity Tier 1 capital to total risk-weighted assets ratio of at least 4.5%, a Tier 1 capital to total risk-
weighted assets ratio of at least 6%, a total capital to total risk-weighted assets ratio of at least 8% and a leverage ratio of Tier 1
capital to average total consolidated assets of at least 4%. Ameris and the Bank are also required to maintain a capital
conservation buffer of common equity Tier 1 capital of at least 2.5% of risk-weighted assets in addition to the minimum risk-
based capital ratios in order to avoid certain restrictions on capital distributions and discretionary bonus payments.
In March 2020, the Office of the Comptroller of the Currency, the Federal Reserve and the FDIC issued an interim final rule
that delays the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule
provides banking organizations that implement CECL in 2020 the option to delay for two years an estimate of CECL’s effect on
regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition
period. As a result, the Company and Bank elected the five-year transition relief allowed under the interim final rule effective
March 31, 2020.
As of December 31, 2022 and 2021, 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 1 risk-based, Common Equity Tier 1 risk-based and Tier 1 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.
F-59
The Company’s and Bank’s actual capital amounts and ratios are presented in the following table.
Actual
For Capital Adequacy
Purposes
To Be Well Capitalized
Under Prompt
Corrective Action
Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
(dollars in thousands)
As of December 31, 2022
Tier 1 Leverage Ratio (tier 1 capital to average
assets):
Company
Bank
$ 2,185,694
$ 2,464,589
9.36 % $ 933,928
10.56 % $ 933,284
4.00 %
4.00 % $ 1,166,605
—N/A—
5.00 %
CET1 Ratio (common equity tier 1 capital to risk
weighted assets):
Company
Bank
$ 2,185,694
$ 2,464,589
9.86 % $ 1,551,305
11.12 % $ 1,551,185
7.00 %
7.00 % $ 1,440,386
—N/A—
6.50 %
Tier 1 Capital Ratio (tier 1 capital to risk weighted
assets):
Company
Bank
$ 2,185,694
$ 2,464,589
9.86 % $ 1,883,727
11.12 % $ 1,883,581
8.50 %
8.50 % $ 1,772,782
—N/A—
8.00 %
Total Capital Ratio (total capital to risk weighted
assets):
Company
Bank
$ 2,859,680
$ 2,720,253
12.90 % $ 2,326,957
12.28 % $ 2,326,777
10.50 %
10.50 % $ 2,215,978
—N/A—
10.00 %
As of December 31, 2021
Tier 1 Leverage Ratio (tier 1 capital to average
assets):
Company
Bank
$ 1,897,725
$ 2,084,465
8.63 % $ 879,079
9.50 % $ 877,891
4.00 %
4.00 % $ 1,097,364
—N/A—
5.00 %
CET1 Ratio (common equity tier 1 capital to risk
weighted assets):
Company
Bank
$ 1,897,725
$ 2,084,465
10.46 % $ 1,270,535
11.50 % $ 1,268,622
7.00 %
7.00 % $ 1,178,007
—N/A—
6.50 %
Tier 1 Capital Ratio (tier 1 capital to risk weighted
assets):
Company
Bank
$ 1,897,725
$ 2,084,465
10.46 % $ 1,542,792
11.50 % $ 1,540,470
8.50 %
8.50 % $ 1,449,854
—N/A—
8.00 %
Total Capital Ratio (total capital to risk weighted
assets):
Company
Bank
$ 2,500,287
$ 2,255,699
13.78 % $ 1,905,802
12.45 % $ 1,902,934
10.50 %
10.50 % $ 1,812,318
—N/A—
10.00 %
The CET1 Ratios, the Tier 1 Capital Ratios, and the Total Capital Ratios displayed in the above table under the heading “For
Capital Adequacy Purposes” includes the capital conservation buffer of 2.50% for December 31, 2022 and December 31, 2021.
F-60
NOTE 21. SEGMENT REPORTING
The following table presents selected financial information with respect to the Company’s reportable business segments for the
years ended December 31, 2022, 2021 and 2020.
(dollars in thousands)
Interest income
Interest expense
Net interest income
Provision for credit losses
Noninterest income
Noninterest expense
Salaries and employee benefits
Occupancy and equipment expenses
Data processing and communications expenses
Other expenses
Total noninterest expense
Income before income tax expense
Income tax expense
Net income
Total assets
Goodwill
Other intangible assets, net
(dollars in thousands)
Interest income
Interest expense
Net interest income
Provision for credit losses
Noninterest income
Noninterest expense
Salaries and employee benefits
Occupancy and equipment expenses
Data processing and communications expenses
Other expenses
Total noninterest expense
Income before income tax expense
Income tax expense
Net income
Total assets
Goodwill
Other intangible assets, net
Year Ended
December 31, 2022
Banking
Division
Retail
Mortgage
Division
Warehouse
Lending
Division
SBA
Division
Premium
Finance
Division
$
628,459 $ 155,533 $
(17,824)
646,283
61,898
91,550
76,339
79,194
12,351
182,039
196,823
45,081
43,957
85,953
371,814
304,121
75,367
228,754 $
107,810
5,579
4,580
48,224
166,193
82,689
17,364
65,325 $
$
43,521 $
16,794
26,727
(1,074)
4,537
1,973
4
187
830
2,994
29,344
6,162
23,182 $
19,850 $
5,126
14,724
(349)
6,265
46,523 $
12,425
34,098
(1,129)
33
5,305
360
116
1,387
7,168
14,170
2,976
11,194 $
7,808
337
388
3,953
12,486
22,774
4,689
18,085 $
Total
893,886
92,860
801,026
71,697
284,424
319,719
51,361
49,228
140,347
560,655
453,098
106,558
346,540
$ 17,848,972 $ 4,739,612 $ 1,016,192 $ 256,077 $ 1,192,433 $ 25,053,286
64,498 $ 1,015,646
— $
$
106,194
8,940 $
— $
$
951,148 $
97,254 $
— $
— $
— $
— $
Year Ended
December 31, 2021
Banking
Division
Retail
Mortgage
Division
Warehouse
Lending
Division
SBA
Division
Premium
Finance
Division
36,784 $
1,383
35,401
(514)
4,603
1,130
3
232
490
1,855
38,663
8,120
30,543 $
56,597 $
5,062
51,535
(2,921)
9,360
29,636 $
1,545
28,091
(2,011)
17
Total
703,112
47,785
655,327
(35,365)
365,544
4,856
475
47
1,594
6,972
56,844
11,937
44,907 $
6,915
317
344
3,683
11,259
18,860
4,493
14,367 $
337,776
48,066
45,976
128,306
560,124
496,112
119,199
376,913
760,546 $ 419,040 $ 909,747 $ 23,858,321
64,498 $ 1,012,620
125,938
11,890 $
— $
— $
— $
— $
$
449,955 $ 130,140 $
(7,627)
457,582
(32,866)
69,664
47,422
82,718
2,947
281,900
157,079
41,065
39,802
84,244
322,190
237,922
64,446
173,476 $ 113,620 $
167,796
6,206
5,551
38,295
217,848
143,823
30,203
$
$ 17,537,221 $ 4,231,767 $
— $
$
— $
$
948,122 $
114,048 $
F-61
(dollars in thousands)
Interest income
Interest expense
Net interest income
Provision for credit losses
Noninterest income
Noninterest expense
Salaries and employee benefits
Occupancy and equipment expenses
Data processing and communications expenses
Other expenses
Total noninterest expense
Income before income tax expense
Income tax expense
Net income
Total assets
Goodwill
Other intangible assets, net
Year Ended
December 31, 2020
Banking
Division
Retail
Mortgage
Division
Warehouse
Lending
Division
SBA
Division
Premium
Finance
Division
26,522 $
2,631
23,891
2,562
3,864
981
4
270
176
1,431
23,762
5,004
18,758 $
40,334 $
7,244
33,090
2,719
9,200
30,665 $
3,483
27,182
(887)
15
6,893
391
33
1,832
9,149
30,422
6,389
24,033 $
7,209
305
399
3,857
11,770
16,314
3,439
12,875 $
Total
726,503
88,750
637,753
145,380
446,500
360,278
52,349
46,017
139,985
598,629
340,244
78,256
261,988
922,071 $ 1,088,611 $ 781,365 $ 20,438,638
928,005
71,974
64,498 $
14,845 $
— $
— $
— $
— $
$
499,031 $ 129,951 $
27,800
471,231
125,136
63,165
47,592
82,359
15,850
370,256
160,430
44,939
39,040
105,965
350,374
58,886
19,138
39,748 $ 166,574 $
184,765
6,710
6,275
28,155
225,905
210,860
44,286
$
$ 14,250,780 $ 3,395,811 $
— $
$
— $
$
863,507 $
57,129 $
F-62
NOTE 22. CONDENSED FINANCIAL INFORMATION OF AMERIS BANCORP (PARENT COMPANY ONLY)
Condensed Balance Sheets
December 31, 2022 and 2021
(dollars in thousands)
Assets
Cash and due from banks
Investment in subsidiaries
Other assets
Total assets
Liabilities
Other liabilities
Other borrowings
Subordinated deferrable interest debentures
Total liabilities
Shareholders' equity
Total liabilities and shareholders' equity
2022
2021
153,099 $
3,477,917
19,896
3,650,912 $
239,822
3,154,148
27,340
3,421,310
23,985 $
301,205
128,322
453,512
3,197,400
3,650,912 $
27,901
300,630
126,328
454,859
2,966,451
3,421,310
$
$
$
$
Condensed Statements of Income
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands)
Income
Dividends from subsidiaries
Other income
Securities gains
Total income
Expense
Interest expense
Other expense
Total expense
Income before taxes and equity in undistributed income of subsidiaries
Income tax benefit
Income before equity in undistributed income of subsidiaries
Equity in undistributed income of subsidiaries
Net income
2022
2021
2020
$
$
50,000 $
175
270
50,445
142,000 $
101
—
142,101
22,170
11,154
33,324
19,610
13,031
32,641
17,121
8,553
25,674
320,866
346,540 $
109,460
6,878
116,338
260,575
376,913 $
93,000
910
—
93,910
17,616
8,300
25,916
67,994
5,225
73,219
188,769
261,988
F-63
Condensed Statements of Cash Flows
Years Ended December 31, 2022, 2021 and 2020
(dollars in thousands)
OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
$
346,540 $
376,913 $
261,988
2022
2021
2020
Share-based compensation expense
Undistributed earnings of subsidiaries
(Decrease) increase in interest payable
(Increase) decrease in tax receivable
Provision for deferred taxes
Gain on sale of other investments
Change attributable to other operating activities
Total adjustments
Net cash provided by operating activities
INVESTING ACTIVITIES
Net (increase) decrease in other investments
Investment in subsidiary
Proceeds from bank owned life insurance
Net cash (used in) provided by investing activities
FINANCING ACTIVITIES
Purchase of treasury shares
Dividends paid - common stock
Proceeds from other borrowings
Repayment of other borrowings
Proceeds from exercise of stock options
Net cash (used in) provided by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest
Cash received during the year for income taxes
NOTE 23. LOAN SERVICING RIGHTS
6,706
(320,866)
(961)
8,596
(649)
(270)
200
(307,244)
39,296
213
(65,000)
—
(64,787)
(22,421)
(41,610)
—
—
2,799
(61,232)
7,948
(260,575)
(36)
(6,238)
1,694
—
3,678
(253,529)
123,384
(4,500)
—
—
(4,500)
(9,439)
(41,798)
—
—
4,532
(46,705)
(86,723)
239,822
153,099 $
72,179
167,643
239,822 $
3,810
(188,769)
847
6,001
(1,225)
—
7,652
(171,684)
90,304
(8,012)
(75,000)
2,383
(80,629)
(7,995)
(41,685)
108,149
(5,155)
2,262
55,576
65,251
102,392
167,643
23,131 $
(16,499) $
19,646 $
(2,367) $
16,769
(10,000)
$
$
$
The Company sells certain residential mortgage loans and SBA loans to third parties. All such transfers are accounted for as
sales and the continuing involvement in the loans sold is limited to certain servicing responsibilities. The Company has also
acquired portfolios of residential mortgage, SBA and indirect automobile loans serviced for others. Loan servicing rights are
initially recorded at fair value and subsequently recorded at the lower of cost or fair value and are amortized over the remaining
service life of the loans, with consideration given to prepayment assumptions. Loan servicing rights are recorded in other assets
on the consolidated balance sheets.
The carrying value of the loan servicing rights assets is shown in the table below:
(dollars in thousands)
Loan Servicing Rights
Residential mortgage
SBA
Total loan servicing rights
December 31, 2022 December 31, 2021
$
$
147,014 $
3,443
150,457 $
206,944
5,556
212,500
F-64
Residential Mortgage Loans
The Company sells certain first-lien residential mortgage loans to third party investors, primarily Federal National Mortgage
Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage
Corporation (“FHLMC”). The Company retains the related mortgage servicing rights (“MSRs”) and receives servicing fees on
certain of these loans. The net gain on loan sales, MSRs amortization and recoveries/impairment, and ongoing servicing fees
on the portfolio of loans serviced for others are recorded in the consolidated statements of income as part of mortgage banking
activity.
During the years ended December 31, 2022, 2021 and 2020, the Company recorded servicing fee income of $69.1 million,
$51.4 million and $31.1 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned
for each period.
The table below is an analysis of the activity in the Company’s MSRs and impairment:
(dollars in thousands)
Residential mortgage servicing rights
Beginning carrying value, net
Additions
Amortization
(Impairment)/recoveries
Disposals
Ending carrying value, net
(dollars in thousands)
Residential mortgage servicing impairment
Beginning balance
Additions
Recoveries
Reduction due to disposal
Ending balance
Years Ended December 31,
2022
2021
2020
$
206,944 $
130,630 $
64,020
(24,995)
21,824
(120,779)
93,229
(30,540)
13,625
—
94,902
98,182
(23,151)
(39,303)
—
$
147,014 $
206,944 $
130,630
Years Ended December 31,
2022
2021
2020
$
25,782 $
39,407 $
—
(21,824)
(3,958)
1,398
(15,023)
—
104
39,303
—
—
$
— $
25,782 $
39,407
F-65
The key metrics and the sensitivity of the residential mortgage servicing rights fair value to adverse changes in model inputs
and/or assumptions are summarized below:
(dollars in thousands)
Residential mortgage servicing rights
Unpaid principal balance of loans serviced for others
Composition of residential loans serviced for others:
FHLMC
FNMA
GNMA
Total
Weighted average term (months)
Weighted average age (months)
Modeled prepayment speed
Decline in fair value due to a 10% adverse change
Decline in fair value due to a 20% adverse change
Weighted average discount rate
Decline in fair value due to a 10% adverse change
Decline in fair value due to a 20% adverse change
SBA Loans
December 31, 2022 December 31, 2021
$
10,046,052
$
16,786,442
16.80 %
50.09 %
33.11 %
100.00 %
353
22
8.22 %
(5,800)
(11,184)
10.00 %
(6,413)
(12,330)
21.88 %
60.26 %
17.86 %
100.00 %
341
20
12.96 %
(8,368)
(16,157)
8.77 %
(6,984)
(13,504)
All sales of SBA loans, consisting of the guaranteed portion, are executed on a servicing retained basis. These loans, which are
partially guaranteed by the SBA, are generally secured by business property such as real estate, inventory, equipment and
accounts receivable. The net gain on SBA loan sales, amortization and impairment/recoveries of servicing rights, and ongoing
servicing fees are recorded in the consolidated statements of income as part of other noninterest income.
During the years ended December 31, 2022, 2021 and 2020, the Company recorded servicing fee income of $3.6 million,
$4.0 million and $4.4 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for
each period.
The table below is an analysis of the activity in the Company’s SBA loan servicing rights and impairment:
(dollars in thousands)
SBA servicing rights
Beginning carrying value, net
Additions
Purchase accounting adjustment
Amortization
(Impairment)/recovery
Ending carrying value, net
(dollars in thousands)
SBA servicing impairment
Beginning balance
Additions
Recoveries
Ending balance
Years Ended December 31,
2022
2021
2020
$
5,556 $
5,839 $
889
—
(3,002)
—
954
—
(2,142)
905
$
3,443 $
5,556 $
7,886
1,571
(1,214)
(1,640)
(764)
5,839
Years Ended December 31,
2022
2021
2020
$
$
— $
—
—
— $
905 $
—
(905)
— $
141
1,645
(881)
905
F-66
The key metrics and the sensitivity of the SBA servicing rights fair value to adverse changes in model inputs and/or
assumptions are summarized below:
(dollars in thousands)
SBA servicing rights
December 31, 2022 December 31, 2021
Unpaid principal balance of loans serviced for others
$
326,418
$
410,167
Weighted average life (in years)
Modeled prepayment speed
Decline in fair value due to a 10% adverse change
Decline in fair value due to a 20% adverse change
Weighted average discount rate
Decline in fair value due to a 100 basis point adverse change
Decline in fair value due to a 200 basis point adverse change
Indirect Automobile Loans
3.69
18.24 %
(177)
(340)
19.57 %
(83)
(163)
3.65
17.68 %
(291)
(557)
11.92 %
(144)
(282)
The Company acquired a portfolio of indirect automobile loans serviced for others. These loans, or portions of loans, were sold
on a servicing retained basis. Amortization and impairment/recoveries of servicing rights, and ongoing servicing fees are
recorded in the consolidated statements of income as part of other noninterest income. The Company is not actively originating
or selling indirect automobile loans. The table below is an analysis of the activity in the Company’s indirect automobile
servicing rights:
(dollars in thousands)
Indirect automobile servicing rights
Beginning carrying value, net
Addition due to acquisition
Amortization
Impairment
Ending carrying value, net
Years Ended December 31,
2022
2021
2020
$
$
— $
—
—
—
— $
73 $
—
(73)
—
— $
247
—
(174)
—
73
During the years ended December 31, 2022, 2021 and 2020, the Company recorded servicing fee income of $243,000,
$616,000 and $1.7 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for
each period.
Note 24. Subsequent Event
In February 2023, the Company notified holders of its 5.75% Fixed-to-Floating Rate Subordinated Notes due 2027 that it had
elected to redeem all the outstanding notes totaling $75.0 million in aggregate principal amount, plus accrued and unpaid
interest totaling $1.6 million, on March 15, 2023
F-67
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, hereunto duly authorized.
AMERIS BANCORP
Date: February 28, 2023
By:
/s/ H. Palmer Proctor, Jr.
H. Palmer Proctor, Jr.,
Chief Executive Officer
(principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in their capacities indicated on February 28, 2023.
/s/ H. Palmer Proctor, Jr.
H. Palmer Proctor, Jr., Chief Executive Officer
(principal executive officer)
/s/ Nicole S. Stokes
Nicole S. Stokes, Corporate EVP and Chief Financial
Officer
(principal accounting and financial officer)
/s/ William I. Bowen, Jr.
William I. Bowen, Jr., Director
/s/ Rodney D. Bullard
Rodney D. Bullard, Director
/s/ Wm. Millard Choate
Wm. Millard Choate, Director
/s/ R. Dale Ezzell
R. Dale Ezzell, Director
/s/ Leo J. Hill
Leo J. Hill, Director
/s/ Daniel B. Jeter
Daniel B. Jeter, Director
/s/ Robert P. Lynch
Robert P. Lynch, Director
/s/ Elizabeth A. McCague
Elizabeth A. McCague, Director
(Continued)
F-68
/s/ James B. Miller, Jr.
James B. Miller, Jr., Chairman
/s/ Gloria A. O'Neal
/ Gloria A. O'Neal, Director
/s/ William H. Stern
William H. Stern, Director
/s/ Jimmy D. Veal
Jimmy D. Veal, Director
(Concluded)
F-69
Common Stock and Dividend Information
Ameris Bancorp Common Stock is listed on the Nasdaq Global Select Market under the symbol “ABCB.”
The following table sets forth the dividends declared and the low and high sales prices for the common stock as
quoted on Nasdaq during 2022.
CALENDAR PERIOD
____________________________________________________________________________________
2022
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
SALES PRICE
Low
High
$43.56 $55.62
$39.37 $46.28
$38.22 $50.94
$44.61 $54.24
$0.15
$0.15
$0.15
$0.15
DIVIDENDS
Shareholder Services
Computershare is Ameris Bancorp’s stock transfer agent and administers all matters related to our stock.
You may contact them via:
First Class, Registered or Certified Mail:
Overnight Delivery:
Computershare Investor Services
P.O. Box 505000
Louisville, KY 40233-5005
Computershare Investor Services
462 South 4th Street, Suite 1600
Louisville, KY 40202
Shareholder Services Number: (800) 568-3476
Investor Centre™ portal: www.computershare.com/investor
If your shares are held in a brokerage account, please contact your broker or financial advisor.
Availability 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 2022.
Please direct requests to:
Ameris Bancorp
Investor Relations
P.O. Box 105075
Atlanta, GA 30348
investor.relations@amerisbank.com
Annual Meeting of Shareholders
The Annual Meeting of Shareholders of Ameris Bancorp is scheduled for Monday, June 5, 2023, at 9:30 a.m. (ET).
Further details regarding the Annual Meeting will be included in the related proxy materials which will be available
at ir.amerisbank.com.
Mixed Sources: Produced
using sustainable methods with
materials from well-managed
forests, controlled sources or
recycled wood or fi ber.