Key Highlights

  • ABCB is trading down 0.25% at $80.48 on October 21, with a market capitalization of about $5.40 billion.
  • The company reports third-quarter results on Thursday, October 22.
  • Second-quarter adjusted EPS was $1.60, against $1.66 expected, and GAAP EPS was $0.77.
  • The second-quarter net interest margin was 3.88% and loans grew at a 6.4% annualized pace.
  • Trailing EPS is $5.53, the P/E is 14.56 and the dividend yield is 0.99%.

Can Ameris Bancorp Recover From a Second-Quarter Miss When It Reports Thursday?

Ameris Bancorp (NYSE:ABCB) is trading down 0.25% at $80.48 on October 21, and no company announcement was identified for the move. The company confirmed that it will report third-quarter results on Thursday, October 22.

Ameris is the holding company for Ameris Bank, which serves the Southeast and runs retail mortgage, warehouse lending and premium finance businesses alongside traditional banking.

What investors may be overlooking is the setup. Second-quarter adjusted EPS of $1.60 fell short of the $1.66 expected, so Thursday is the first chance to show whether that was a one-off. The market is waiting for net interest margin, mortgage banking revenue and credit quality.

What Did the Second-Quarter Report Set Up?

GAAP net income was $51.4 million, or $0.77 per share, against adjusted net income of $107.3 million, or $1.60 per share. The gap came mainly from an $82.5 million litigation accrual tied to a jury verdict in a California employment case, partly offset by a $7.4 million securities gain. The net after-tax effect of the one-time items was $55.9 million.

Net interest margin was 3.88% on a tax-equivalent basis, flat from the first quarter and up 11 basis points from a year earlier, and net interest income rose $8.1 million to $253.4 million. Loans grew $349.9 million to $22.18 billion, a 6.4% annualized pace, while deposits slipped $49.2 million to $22.59 billion.

Credit was steady, with a provision of $17.3 million, net charge-offs of 0.20% annualized against 0.21%, an allowance of 1.62% of loans and nonperforming assets at 0.47% of total assets. Adjusted expenses rose 2.0% to $160.2 million, for an adjusted efficiency ratio of 50.42%. The release gave no explicit guidance, and it named expansion in Nashville as a growth initiative.

Mortgage banking was the soft spot. Income fell 12.1% to $32.5 million, although retail production rose 6.0% to $1.15 billion and the open pipeline eased to $609.3 million from $632.7 million.

What Would a Good or Bad Third Quarter Look Like for Ameris?

A positive reading would be adjusted EPS above $1.60, a net interest margin holding near 3.88%, loan growth near the second-quarter pace and a rebound in mortgage banking. Steady credit costs and tight adjusted expenses would also be encouraging.

A negative reading would be a second consecutive shortfall, higher provisions, a margin that slips below the second-quarter level or a further decline in mortgage revenue. A new one-time charge would also complicate the picture.

Trailing EPS is $5.53, a decline of 2.55%, and the P/E is 14.56. Because the litigation accrual depressed second-quarter GAAP earnings, these figures are affected by one-time items and are not clean valuation guides. The quarterly dividend is $0.20, the yield is 0.99% and the consensus analyst rating is Buy.

What Does Ameris's Capital Position Add to Thursday's Setup?

Tangible book value was $45.10 per share, up $0.31 in the quarter, and the tangible common equity ratio was 11.04%. The bank repurchased $19.0 million of stock, or 226,600 shares, in the second quarter. Investors will watch whether adjusted EPS recovers, how mortgage banking and the margin hold up, and whether buybacks continue.