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Ameris Bancorp (ABCB)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid profitability: diluted EPS $1.37, adjusted EPS $1.38; ROA 1.42% and adjusted ROA 1.43% . Net interest margin (TE) expanded 13 bps sequentially to 3.64% on lower deposit costs; management flagged ~10 bps of temporary factors likely to reverse in Q1 2025 .
  • Total revenue was $290.8M GAAP ($291.7M TE), with positive operating leverage as the adjusted efficiency ratio improved to 51.82% from 54.25% in Q3 .
  • Balance sheet quality remained strong: ACL 1.63% of loans; NPAs at 0.47% of assets; net charge‑offs 0.17% annualized; TCE ratio 10.59%; TBVPS rose to $38.59 (up $1.08 in the quarter) .
  • Dividend increased 33% to $0.20 per share in December, providing a tangible capital return catalyst alongside robust organic capital generation .
  • S&P Global consensus estimates were unavailable due to system limits; estimate comparisons are therefore not provided (values would normally be retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expansion and NII growth: NIM (TE) 3.64% (+13 bps q/q) driven by deposit cost declines; NII (TE) up $7.7M q/q to $222.8M .
    Quote: “Our fourth quarter margin was 3.64% with our net interest income continuing to increase…deposit costs more than the decline in our loan yields” .
  • Positive operating leverage and efficiency: Adjusted efficiency ratio improved to 51.82% from 54.25% in Q3; adjusted total revenue grew ~9.8% annualized while adjusted expenses fell ~1.9% .
  • Capital and TBV growth: TBVPS increased $1.08 in the quarter to $38.59; TCE ratio 10.59%, CET1 referenced at ~12.6% providing strategic optionality .

What Went Wrong

  • Margin uplift partly temporary: management quantified ~10 bps of Q4 NIM uplift tied to seasonal public funds and repricing lags, guiding back toward ~3.50–3.55% thereafter .
  • Mortgage pipeline moderated: retail mortgage open pipeline fell to $638.5M from $813.7M in Q3, consistent with seasonal Q4 slowdown; mortgage banking revenue dipped modestly q/q .
  • Provision and NPLs edged higher q/q: provision for credit losses rose to $12.8M (from $6.1M) and nonaccrual portfolio loans increased to $90.2M (from $87.3M), though overall NPAs and charge‑offs remained low .

Financial Results

MetricQ1 2024Q2 2024Q3 2024Q4 2024
Total Revenue ($USD Millions, GAAP)$267.3 $300.6 $283.8 $290.8
Net Interest Income (TE) ($USD Millions)$202.3 $212.9 $215.0 $222.8
Diluted EPS ($USD)$1.08 $1.32 $1.44 $1.37
Net Interest Margin (TE) (%)3.51% 3.58% 3.51% 3.64%
Efficiency Ratio (%)55.64% 51.68% 53.49% 52.26%
ROA (%)1.18% 1.41% 1.49% 1.42%

Segment contribution (Q4 2024):

SegmentNet Interest Income ($MM)Noninterest Income ($MM)Provision ($MM)Noninterest Expense ($MM)Net Income ($MM)
Banking Division$181.1 $31.6 $14.9 $110.6 $63.8
Retail Mortgage$23.7 $36.6 $(2.5) $37.2 $20.3
Warehouse Lending$6.6 $0.7 $(0.1) $0.9 $5.1
Premium Finance$10.4 $0.01 $0.5 $3.4 $5.2
Total$221.8 $69.0 $12.8 $151.9 $94.4

Key KPIs (quarterly trajectory):

KPIQ2 2024Q3 2024Q4 2024
Total Cost of Funds (%)2.48% 2.50% 2.22%
Deposit Costs (%)2.32% 2.39% 2.12%
Noninterest‑bearing Deposits (% of total)31.0% 30.5% 29.9%
ACL (% of Loans)1.60% 1.60% 1.63%
Net Charge‑offs (% Avg Loans, annualized)0.18% 0.15% 0.17%
NPAs (% Assets)0.74% 0.44% 0.47%
TBVPS ($)$35.79 $37.51 $38.59
TCE Ratio (%)9.72% 10.24% 10.59%

YoY compares (Q4 2024 vs Q4 2023):

  • Revenue: $290.8M vs $262.3M (+10.9%) .
  • Diluted EPS: $1.37 vs $0.96 (+42.7%) .
  • NIM (TE): 3.64% vs 3.54% (+10 bps) .
  • Efficiency ratio: 52.26% vs 56.80% (better by 454 bps) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest Margin (TE)FY 2025 run‑rate~3.50–3.55% (Q3 guide) ~3.50–3.55% (Q4 reiteration; Q4 level 3.64% includes ~10 bps temporary uplift) Maintained
Mortgage Gain‑on‑Sale Margin1H 20252.50–2.75% high‑end discussed (Q3) 2.25–2.40% expected near‑term Lowered
Expenses (YoY growth)FY 2025n/a~4.5–5.0% YoY; Q1 heavier due to payroll resets New detail
Loan & Deposit GrowthFY 2025Mid‑single digits Mid‑single digits; deposits to govern loans Maintained
Capital DeploymentFY 2025Organic priority; selective M&A; buybacks optional Organic first; selective M&A; buybacks secondary Maintained
DividendQ1 2025$0.15 $0.20 (33% increase) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Margin trajectory & betasModeled slightly asset‑sensitive; NIM ~3.52–3.55% H2’24; deposit production ~2.2% NIM “around 3.50%” with small quarterly swings; deposit betas ~55 downcycle Q4 NIM 3.64% with ~10 bps temporary; guide back to ~3.50–3.55% Stable (temporary uplift)
Deposit strategy & mixCore growth; brokered modest; NIB ~31% Continued core growth; NIB ~30.5% Grew core deposits; reduced brokered by ~$832M; NIB ~30% Positive mix, seasonal swing
Mortgage bankingSeasonal strength Q2; gain‑on‑sale 2.45% Gain‑on‑sale dipped to 2.17%; expected rebound Gain‑on‑sale improved to 2.40%; pipeline moderated Improving margins; seasonal volumes
Credit/CECLACL at 1.60%; low charge‑offs ACL 1.60%; NPA down on GNMA MSR sale ACL 1.63%; NPAs 0.47%; charge‑offs 0.17% Stable/strong
Capital & buybacksComfort building capital; optionality for 2025 Capital optionality; organic priority CET1 ~12.6%; buybacks behind organic growth Consistent stance

Management Commentary

  • CEO: “Our fourth quarter performance reflects a strong finish… robust balance sheet, focus on revenue growth, healthy net interest margin and commitment to efficiency… position us for continued success” .
  • CFO: “Adjusted efficiency ratio improved to 51.82%… adjusted total revenue increased 9.8% annualized, while expenses shrank 1.9%” .
  • CFO: “We redeemed $105.8M of sub debt… saving about 1–2 bps of margin in 2025 versus if kept” .
  • CEO (strategy): “Organic growth will come first… selective M&A… buybacks take a backseat” .

Q&A Highlights

  • Margin guide: ~10 bps of Q4 NIM uplift from seasonal public funds (7 bps) and repricing lags (3 bps); run‑rate back to ~3.54% baseline within 3.50–3.55% range .
  • Fee outlook: Core fees excluding mortgage expected to grow ~5–7%; Q4 SBA gains were elevated and a reasonable starting run‑rate .
  • Mortgage gain‑on‑sale: guided 2.25–2.40% near‑term given market conditions .
  • Deposit costs: December spot costs near ~2% skewed by public funds; q/q average decreased ~30 bps to ~2.40% .
  • Production yields and accretion: New loan production ~7% blended; interest‑bearing deposit production ~3.25% vs book ~3.00% → accretive spread ~3.75% .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue could not be retrieved due to exceeded daily request limits; estimate comparisons are therefore omitted. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

  • NIM expansion was real but partly seasonal; model back to ~3.50–3.55% near‑term while recognizing structural tailwinds from deposit cost reductions and accretive new production spreads .
  • Operating leverage improving: adjusted efficiency down to ~52% amid revenue growth and disciplined expense control—supportive for EPS durability .
  • Credit stable with conservative reserving: ACL 1.63%, NPAs 0.47%, NCOs 0.17%—low loss content supports capital flexibility and valuation .
  • Capital deployment remains conservative: organic growth first; buybacks secondary; dividend raised to $0.20 reflects confidence without compromising optionality .
  • Mortgage division a swing factor: gain‑on‑sale improved to 2.40%; near‑term guide 2.25–2.40%; seasonal pipeline moderation should ease with rate backdrop—monitor volumes and spreads .
  • Watch Q1 seasonality and funding mix: expected runoff of ~$500–$600M public funds and re‑addition of short‑dated brokered CDs; deposit costs should reprice down, muting margin headwinds .
  • 2025 setup: mid‑single‑digit loan/deposit growth, ~5% expense growth with Q1 heavier—model steady EPS with potential upside from mortgage and treasury wins .