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Ameris Bancorp (ABCB)·Q2 2025 Earnings Summary

Executive Summary

  • EPS significantly beat Wall Street consensus; diluted EPS was $1.60 vs S&P Global consensus of ~$1.33, while revenue was roughly in line/slightly below consensus, with margin expansion and stronger fee income driving operating leverage *.
  • Net interest margin expanded 4 bps to 3.77%; efficiency ratio improved to 51.63%, with total revenue up $14.9M quarter-over-quarter and asset quality metrics better across the board .
  • Loan growth was 6.5% annualized, noninterest-bearing deposits rose to 31.0% of total, and CET1 reached ~13% (estimated), leaving room for organic growth, buybacks, and a planned redemption of $74M subordinated notes at 8.22% on Sept 1, 2025 .
  • Management guided long-term NIM normalization toward 3.60–3.65% on expected deposit cost pressure, Q3 noninterest expense of ~$156–158M, and mortgage production modestly down 5–10% sequentially, framing a steady back-half setup with disciplined deposit-led growth .

What Went Well and What Went Wrong

What Went Well

  • Positive operating leverage: total revenue rose $14.9M QoQ (to $300.7M), outpacing a $4.2M increase in expenses; efficiency ratio improved to 51.63% .
  • Margin and deposits: NIM expanded to 3.77% and noninterest-bearing deposits advanced to 31.0% of total; CEO: “We delivered above-peer profitability... [and] tangible book value... surpassed $41” .
  • Asset quality and capital: NPAs/Assets fell to 0.36% (0.32% ex-GNMA), NCO ratio improved to 0.14%, TCE/TA reached 11.09%, and management repurchased ~212K shares; CEO highlighted “strong capital and liquidity” .

What Went Wrong

  • Noninterest expense increased $4.3M QoQ (to $155.3M), driven by mortgage-related incentive compensation and targeted marketing; management expects Q3 OpEx ~$156–158M .
  • Guidance implies NIM drift lower over time (3.60–3.65%) due to competitive deposit pricing as loan growth accelerates; CFO: “We’re going to get squeezed a little bit...” .
  • Mortgage banking gains solid, but Q3 production outlook calls for 5–10% decline; pipeline was $719.1M at Q2-end vs $771.6M in Q1, signaling near-term seasonal/modest headwinds .

Financial Results

Core P&L and Profitability vs prior year and prior quarter

MetricQ2 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$300.632 $285.862 $300.724
Net Interest Income ($USD Millions)$211.921 $221.839 $231.813
Noninterest Income ($USD Millions)$88.711 $64.023 $68.911
Diluted EPS ($USD)$1.32 $1.27 $1.60
ROA (%)1.41% 1.36% 1.65%
Net Interest Margin (TE, %)3.58% 3.73% 3.77%
Efficiency Ratio (%)51.68% 52.83% 51.63%

Noninterest Income detail

Component ($USD Millions)Q2 2024Q1 2025Q2 2025
Service charges on deposit accounts$12.672 $13.133 $13.493
Mortgage banking activity$46.399 $35.254 $39.221
Equipment finance activity$4.983 $6.698 $6.572
Other noninterest income$11.111 $7.789 $8.467
Total Noninterest Income$88.711 $64.023 $68.911

Segment net income

Segment ($USD Millions)Q1 2025Q2 2025
Banking Division$65.767 $82.581
Retail Mortgage Division$12.875 $15.556
Warehouse Lending Division$4.554 $6.189
Premium Finance Division$4.739 $5.508
Total Consolidated$87.935 $109.834

KPIs and balance sheet

KPIQ2 2024Q1 2025Q2 2025
NIB Deposits (% of total)29.9% 30.8% 31.0%
Total Deposits ($USD Billions)$21.44 $21.91 $21.93
Total Assets ($USD Billions)$26.52 $26.51 $26.68
Loans, net of unearned income ($USD Billions)$20.99 $20.71 $21.04
TCE / TA (%)9.72% 10.78% 11.09%
CET1 Ratio (est.) (%)——~13.0%
NPA / Total Assets (%)0.74% 0.44% 0.36%
NCO Ratio (Annualized, %)0.18% 0.18% 0.14%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Margin (TE)Long-term (~18 months)Not quantified previously; margin expanding Normalize to ~3.60–3.65% on deposit cost pressure New quantified long-term guide (lower vs current)
Noninterest ExpenseQ3 2025Not quantified~$156–$158M New (up slightly QoQ)
Mortgage ProductionQ3 2025Seasonal variations; gain-on-sale 2.17% in Q1 Down ~5–10% vs Q2; gain-on-sale ~2.15–2.25% Lower volumes; margins stable
Loan/Deposit Growth2H 2025Mid-single-digit directionally Mid-single-digit maintained; deposit-led, willing to pay up if needed Maintained
Subordinated DebtSep 1, 2025—Redeem $74M 2030 notes at par (8.22% coupon) New (reduces interest expense)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 & Q1’25)Current Period (Q2’25)Trend
Margin trajectoryMargin expanded: 3.64% in Q4; 3.73% in Q1, driven by lower deposit costs 3.77% in Q2; long-term normalization to 3.60–3.65% on deposit competition Improving near-term; moderate pressure medium-term
Deposit competition/mixNIB % rose to 30.8% in Q1; brokered CDs tactically managed NIB 31.0%; CFO sees rising deposit costs with growth; brokered CDs ~5% Competitive intensity rising
Loan growth & pipelinesLoans flat to down slightly Q1; warehouse seasonal Loans +$335M; strongest production since 2022; C&I/warehouse/premium finance leading Accelerating
Mortgage bankingGain-on-sale 2.17% in Q1; pipeline $771.6M Gain-on-sale 2.22%; pipeline $719.1M; Q3 production down 5–10% Margins stable; volumes modestly down
Asset quality & reservesACL 1.67% in Q1; NPAs 0.44% ACL on loans 1.62%; NPAs 0.36%; office sector reserve ~3.8% Broadly improving; focused office reserve
Capital actionsTBV growth; dividend increase in Q4 CET1 ~13%; TCE 11.1%; buybacks $12.8M; redeem $74M sub debt Strengthening

Management Commentary

  • CEO opening: “Our margin continued to expand... our 3.77% NIM remains well above most peer levels... Capital ratios grew again... We grew tangible book value... over $41 per share... I’m extremely optimistic for the remainder of 2025 and into 2026.” .
  • CFO on margin and funding: “This margin is a core margin. We have zero accretion... modest margin expansion came mostly from the asset side... total cost of funds remaining flat during the quarter.” .
  • CFO on medium-term NIM guide: “That 360–365 guide is over the longer term... we’re going to get squeezed a little bit... willing to give up a little bit for the growth.” .
  • CEO on strategy: “Our first and foremost is growing organically... stock buybacks aren’t off the table... It’d have to be something very, very special [to do M&A] because right now we’re firing on all cylinders.” .

Q&A Highlights

  • Deposit costs and NIM cadence: CFO expects rising deposit costs as loan growth picks up; long-term NIM normalization (3.60–3.65%), with possible near-term margin bump if Fed cuts (faster deposit repricing) .
  • Loan growth/vintages and competition: Activity improving across middle-market; competition extending beyond price into structure, but Ameris leads with deposits and treasury to gain share .
  • Bond portfolio optionality: ~$71M maturing at ~3.50% vs new purchases near 4.75–5.00%; added ~$200M at 4.88% in Q2 .
  • Expense outlook: Q3 noninterest expense expected ~$156–$158M, consistent with Q2 plus merit increases and mortgage production-related variable comp .
  • Office credit reserve: Acute factors added; investor office reserve ~3.8%; overall criticized/classified levels are low with flexibility to “grow into the reserve” .

Estimates Context

  • EPS vs consensus: Ameris reported EPS above consensus; S&P Global “Primary EPS Consensus Mean” was ~$1.33 vs S&P “actual” of ~$1.59 for Q2 2025, reflecting a large beat*.
  • Revenue vs consensus: S&P Global “Revenue Consensus Mean” was ~$298.85M vs S&P “actual” of ~$297.95M, a slight miss*.
  • Implications: Consensus likely needs to revise higher on core profitability and margin durability; near-term deposit cost pressure and mortgage seasonality temper the magnitude of upward revisions *.
MetricQ2 2025 ConsensusQ2 2025 Actual (S&P)Surprise
Primary EPS ($USD)1.33333*1.59*+0.26*
Revenue ($USD)298,848,500*297,952,000*-896,500*

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Stronger-for-longer profitability: NIM at 3.77%, ROA 1.65%, and improved efficiency underpin superior operating leverage into 2H25 .
  • Balance sheet strength: CET1 ~13% (est.), TCE 11.1%, and low NPAs position Ameris to continue buybacks and redeem high-cost sub debt, lowering interest expense .
  • Deposit-led growth strategy: Noninterest-bearing deposits at 31.0% support margin resilience as loan pipelines (C&I/warehouse/premium finance) accelerate .
  • Near-term watch items: Deposit pricing pressure and Q3 noninterest expense (~$156–$158M) could modestly compress NIM toward the longer-term guide (3.60–3.65%) .
  • Mortgage dynamics: Gain-on-sale margins stable (~2.22%), but expect 5–10% Q3 production step-down; refi capacity exists if rates fall .
  • Credit quality benign: NPAs/Assets 0.36% (0.32% ex-GNMA), NCOs 0.14%; investor office reserve at ~3.8% reflects proactive stance .
  • Trading lens: The narrative is margin durability, capital deployment (buybacks, sub debt redemption), and accelerating loan production—offset by deposit competition; EPS upgrades likely, revenue tweaks modest*.

Appendix: Prior Quarter References

  • Q1 2025: NIM 3.73%, EPS $1.27, NIB 30.8%, noninterest income $64.0M, NPAs 0.44% .
  • Q4 2024: NIM 3.64%, EPS $1.37, total revenue $290.8M, TBVPS $38.59, dividend to $0.20 .