Ameris Bancorp (ABCB) Q4 2025 Earnings Transcript

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DATE

Friday, January 30, 2026 at 9 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Palmer Proctor
• Chief Financial Officer — Nicole S. Stokes
• Operator

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TAKEAWAYS

• Full-Year Net Income -- $412.2 million, with diluted EPS at $6, representing a 15% increase.
• Fourth-Quarter Net Income -- $108.4 million, or $1.59 per diluted share.
• Net Interest Margin -- Expanded five basis points sequentially to 3.85% for the fourth quarter, primarily driven by a 10 basis point positive impact on funding and partially offset by a five basis point decline on the asset side.
• Net Interest Income Growth -- Increased $7.3 million in the quarter (12.2% annualized), with a full-year increase of $87.7 million, or 10.3%.
• Efficiency Ratio -- Improved to 46.6% in the fourth quarter and was 50% for the year, down from 53.2% last year.
• Tangible Book Value Per Share -- Increased by $1.28 in the fourth quarter to $44.18; full-year growth was $5.59 per share, or 14.5%.
• Return on Assets (ROA) -- 1.57% for the quarter and 1.54% for the year, up from 1.38% last year.
• Pre-Provision Net Revenue (PPNR) ROA -- 2.38% for the quarter; full-year was 2.25%, up from 2.05% last year.
• Return on Tangible Common Equity (ROTCE) -- 14.5% for the quarter and 14.51% for the year, up from 14.41% last year.
• Loan Growth -- Loans increased almost 5% in the fourth quarter, even as commercial real estate (CRE) payoffs exceeded $500 million.
• Loan Production -- $2.4 billion in the quarter, a 16% increase over the third quarter and the highest since 2022.
• Total Asset Growth -- 4.8% for the year, with earning asset growth at 5.5%.
• Non-Interest-Bearing Deposit Ratio (NIB) -- 28.7% at year-end.
• Common Equity Tier 1 Ratio -- Ended the year at 13.2%.
• Tangible Common Equity Ratio -- Ended the year at 11.4%.
• Share Repurchases -- $40.8 million repurchased in the fourth quarter (564,000 shares at $72.3 average price); $77 million repurchased for the year (2% of common stock) at an average price under $67.
• Allowance for Loan Losses -- Remains at 1.62% of loans; $23 million provision expense reported for the quarter, including $6.3 million related to reserves for unfunded commitments.
• Net Charge-Offs -- Annualized at 26 basis points for the quarter; 18 basis points for the full year, improved from 19 last year; guidance for 2026 is 20-25 basis points.
• Adjusted Non-Interest Income -- Decreased $10.5 million in the quarter, driven by seasonal mortgage activity, but increased $1.4 million for the year.
• Total Non-Interest Expense -- Decreased $11.5 million in the quarter and $3.8 million for the year, or nearly 1%, primarily due to lower costs in the mortgage division.
• Brokered Deposits -- Remained stable at 5% of total deposits at year-end.
• Share Repurchase Authorization Remaining -- $159.2 million at year-end.
• CRE and Construction Loan Concentrations -- CRE at $2.62 and construction at $43 (units referenced in transcript not specified).
• Deposit Growth -- $148 million increase in the quarter, driven by public funds inflows, offset by seasonal escrow outflows.
• Guidance on Loan and Deposit Growth -- Expected to be in the mid-single-digit range.
• Deposit Costs and Margin Guidance -- Nicole S. Stokes said, "I feel like five to 10 basis points over the next few quarters."
• Expense Guidance Q1 2026 -- Guidance anticipates an increase of approximately $7.5 million due to payroll taxes and lower Q4 incentive accruals, projecting non-interest expense in the $150 million to $151 million range for Q1.
• Hiring Activity -- Net increase of three lenders during the year; 21 new lenders hired, with continual talent upgrading but no aggressive headcount expansion.

SUMMARY

Ameris Bancorp (NYSE:ABCB) delivered record full-year profitability and shareholder returns, highlighted by double-digit EPS growth and margin expansion. Management attributed tangible book value and capital ratio improvements to disciplined expense management, positive operating leverage, and organic growth. Guidance points to continued moderate loan and deposit growth, with some margin compression expected due to rising deposit costs. Strategic focus remains on asset quality, selective hiring, and share repurchases to support future earnings.

• Stokes noted, "For the first time this year, we saw improvements on both components of spread revenue. Not only did our interest income grow by $3 million, but our interest expense also improved by $4.3 million."
• Mortgage and premium finance segments experienced seasonal declines in spread revenue, although core banking spread revenue increased.
• CRE portfolio payoffs exceeded $500 million, impacting net loan growth but reflecting healthy economic conditions, with management anticipating payoff levels to moderate.
• Asset quality metrics, including non-performing assets and criticized loans, remained low; the reserve for loans stayed flat sequentially despite significant production.
• Balance sheet growth was partially attributed to increased public fund deposits, with seasonal mortgage-related escrow deposit outflows expected to reverse over the coming year.
• Operator facilitated Q&A without substantive remarks beyond standard moderation.

INDUSTRY GLOSSARY

• PPNR (Pre-Provision Net Revenue): Earnings before provisions for credit losses and taxes, a core profitability measure for banks.
• NIM (Net Interest Margin): A metric representing the difference between interest income generated and interest paid out, as a percentage of average earning assets.
• ROTCE (Return on Tangible Common Equity): Net income return expressed as a percentage of tangible common equity, excluding intangible assets and preferred equity.
• NIB (Non-Interest-Bearing Deposits): Deposits on which the bank pays no interest, an indicator of low-cost funding.
• CRE (Commercial Real Estate): Loans secured by commercial property, a key asset class in regional banking.

Full Conference Call Transcript

Palmer Proctor: Thank you, Nicole. Good morning, I appreciate you taking time to join our call this morning. I am proud of our fourth quarter performance and our record-setting results for the full year of 2025. We continue to operate at a high level of consistent core profitability while remaining focused on capital returns and accretive growth to enhance our shareholder value. We are positioned extremely well going into 2026, both from a growth and profitability level. Not only are we in the best Southeastern markets that are growing faster than the national average, but we also have the best bankers who are focused on servicing our customers and running our franchise organically.

Nicole is going to talk about the details of our financials in just a minute, but I did want to give you just a few top-level comments about our core profitability. We reported record earnings for 2025 at over $412 million for the year, with our diluted EPS hitting $6 per share for the first time in our history. That is a 15% increase in EPS year over year, and we did it organically. Our PPNR ROA was consistently above 2% this year. Our margin expanded every quarter, and our efficiency ratio improved throughout the year. We remain focused on generating revenue growth and positive operating leverage.

We reported a 6% growth in revenue for the year while our expenses declined by 1%. Combined, this positive operating leverage pushed our efficiency ratio to 50% for the year. This core profitability led to tangible book value growth of over 14% for this year. We remain diligent with our capital planning and are focused on generating shareholder returns. We paid off all of our sub-debt during 2025 and, as a result, have a very simple common stock capital structure going forward. During the fourth quarter, we announced an increased share repurchase program. We were active in the fourth quarter, buying back almost 1% of our stock at an average price of $72.

For the year, we repurchased $77 million or 2% of the company at an average price under $67. Capital ratios remained strong, ending the year with common equity Tier one at 13.2% and tangible common equity ratio growing to 11.4%. Capital at this level positions us well for future growth expectations. On the growth front, we were very pleased with our asset generation during the fourth quarter, growing earning assets by almost 6%. We experienced unusually high payoffs in the CRE portfolio this quarter, which is indicative of a healthy economy but does affect our net loan growth. Notwithstanding, we grew loans almost 5% in the fourth quarter, even with the elevated CRE payoffs of over $500 million.

Under normal CRE payoffs, our loan growth would have approached double digits. Our pipelines remain strong, and we saw the highest level of loan production since 2022, coming in at $2.4 billion for the quarter, which was a 16% increase above third-quarter levels. Asset quality for the year remained strong, with net charge-offs and NPAs improving from the prior year. Our allowance remains healthy at $1.62 of loans. CRE and construction concentrations were consistent at $2.62 and $43, respectively. On the funding side, we remain focused on core deposits and relationship banking. Our non-interest-bearing deposits represent a strong 29% of total deposits.

Even with the typical seasonality of the fourth quarter, we are well-positioned for future growth, both from the strength of our balance sheet and our fundamental operating model. We have strong momentum into 2026 with our organic growth strategies, which will be complemented by the disruption with our growing Southeastern markets. We have strong core profitability with diversified and durable revenue streams. These will continue to grow tangible book value, franchise value, and shareholder value in 2026 and beyond. I will stop there and turn it over to Nicole to discuss our financial results in more detail.

Nicole S. Stokes: Thank you, Palmer. We reported net income of $108.4 million or $1.59 per diluted share in the fourth quarter. Our return on assets was 1.57, our PPNR ROA was 2.38, and our return on tangible common equity was 14.5% for the quarter. For the full year 2025, we reported record net income of $412.2 million or $6 per diluted share. That brings our full-year ROA to 1.54 compared to 1.38 last year. Our year-to-date PPNR ROA was 2.25 compared to 2.05 in 2024, and our full-year ROTCE improved to 14.51 from 14.41 last year. Tangible book value increased by $1.28 during the fourth quarter to end at $44.18.

For the full year, we grew tangible book value by $5.59 per share or 14.5%. As Palmer mentioned, our capital levels remain strong. We were active in our buyback, buying back $40.8 million of common stock or about 564,000 shares at an average price of $72.3 during the quarter. Our remaining share repurchase authorization was $159.2 million at the end of the year. On the revenue side, our net interest income increased $7.3 million in the quarter or 12.2% annualized. The core bank grew by about $8.7 million, while mortgage and premium finance both saw some seasonal finance declines in spread revenue. For the first time this year, we saw improvements on both components of spread revenue.

Not only did our interest income grow by $3 million, but our interest expense also improved by $4.3 million. Our net interest margin expanded five basis points to a robust 3.85 for the fourth quarter, and that expansion came from a 10 basis point positive impact on the funding side, more than offsetting the five basis point decline on the asset side. For the full year, net interest income increased $87.7 million or 10.3% from 2024, and our margin expanded from 3.30% last year to 3.79% for the full year 2025.

Although we have positioned ourselves to be mostly neutral from an asset liability sensitivity perspective, we anticipate we could see some slight margin compression over the next few quarters due to the pressure on deposit costs. As we see loan growth increasing, we believe there will be additional deposit pressure as we fund that growth in 2026. During the fourth quarter, we reported $23 million of provision expense, with $6.3 million of that relating to reserves for unfunded commitments. That is a real positive signal for future loan growth. And our reserve remains strong at 1.62 of total loans, which was the same as last quarter. Annualized net charge-offs this quarter normalized to 26 basis points.

For the full year, net charge-offs improved from 19 basis points down to 18 basis points. We anticipate net charge-offs in the 20 to 25 basis point range in 2026. Overall asset quality trends remain good, with non-performing assets, net charge-offs, and those classified and criticized remaining low for the quarter. Moving on to non-interest income, adjusted non-interest income decreased $10.5 million this quarter, mostly from seasonal declines in mortgage. For the full year 2025, adjusted non-interest income actually increased $1.4 million year over year. Total non-interest expense decreased $11.5 million in the quarter, mostly driven by lower compensation costs and also some lower marketing and advertising costs.

For the full year 2025, our total non-interest expense declined $3.8 million or almost 1% year over year. The majority of this decline is from the mortgage division as variable costs with the decreased production due to the current interest rate environment. For the fourth quarter, our efficiency ratio improved to 46.6%, and for the full year 2025, our efficiency ratio was 50%, an improvement from the 53.2% reported last year. I do anticipate the efficiency ratio to return above 50% in the first quarter, especially when you consider our seasonally heavy first-quarter payroll taxes and 401 contributions.

Looking at our balance sheet, we ended the quarter with $27.5 billion of total assets compared to $27.1 billion last quarter and $26.3 billion at the end of 2024. For the year, that reflects a 4.8% balance sheet growth, and we had a 5.5% earning asset growth. Profitability, looking at NII and EPS, they grew over 10% during that same time, really reinforcing our focus on profitable growth and positive operating leverage. Deposits increased $148 million with strong seasonal growth in our public funds, partially offset by some usual seasonal outflows of mortgage-related escrow deposits that will fund back over the year. Because of this seasonality of deposits, our NIB to total deposit ratio is usually lowest at year-end.

And this year, it remains at a strong 28.7%. And then broker deposits were stable in the quarter, representing only 5% of total deposits at the end of the year. We continue to anticipate loan and deposit growth going forward in that mid-single-digit range and expect that longer-term deposit growth will be the governor of loan growth. And with that, I am going to wrap it up and turn the call back over to Megan for any questions from the group. Megan, go ahead, please.

Operator: We will now begin the question and answer session. The first question comes from Stephen Scouten with Piper Sandler. Please go ahead.

Stephen Scouten: Great quarter on loan production, obviously, and Palmer, you noted if payoffs have been more normal, you think loan growth could have been in the double-digit range. Can you talk about what sort of visibility you have into future payoffs and maybe how those were surprisingly high this quarter and kind of what you are seeing as loans maybe mature and renew? Are those maturing and renewing at the same pace? Or kind of what caused some of the elevated paydowns and how we can think about the progression of that into the new year?

Palmer Proctor: Yes. Two things there. Good morning, Stephen. We are encouraged by the pipeline. We continue to see building. And then more importantly too, when you look at the payoffs, the fourth quarter is typically for us one of the busier quarters in terms of payoffs. I think that is reflected in a lot of banks that have reported. So we see that moderating as we move into the first quarter and second quarter of the year. That is encouraging. I will tell you activity continues to improve, and we like what we are seeing throughout the entire bank, not just in certain pipelines, but all the pipelines across the board.

Now mortgage, we will see what happens there at the ten-year. That could be a real tailwind for us depending on what transpires. But all in all, we feel pretty bullish.

Stephen Scouten: Okay. And with rates kind of well, we will see. If they continue to trend down, I guess, would you think that would accelerate paydowns even further, or would you be more excited about a further pickup in production and activity kind of to offset that potential phenomenon?

Palmer Proctor: Yes. I think for us, where we are in the business development stage, I do not think the increase or decrease in rates would actually accelerate our opportunity. And in terms of payoffs, I do not see that causing any migration out to refinance elsewhere because most people are either depending on the conditions of the loan, the terms of loans are locked in. And like a lot of banks, we have got prepayment penalties, refinance penalties, and so forth. So I do not see that being a big contributor to outward movement.

Stephen Scouten: Got it. Makes sense. That is great. And then I guess in terms of thoughts around new hiring activity, I mean, this has come up on every earnings call. I think I have been on in the Southeast this quarter. And people are calling it somewhat of a generational opportunity. I think your approach to it maybe has sounded different in terms of just improving your talent throughout the spectrum of your bank, but maybe not adding just pure headcount quite as aggressively? Can you talk a little further about that if I am hearing you right when I summarize that and kind of how you are thinking about it in the New Year with the opportunity set?

Palmer Proctor: Yeah. I think ours is very different. And like we have said for several years, when I look at the budget and our expectations, we do not have the compulsion or the need to have to go out and hire massive amounts of people to accomplish what we want to do here. We have been very fortunate with the level of talent that we have. We have been very fortunate with retention, and we stay focused on that. But to put it in perspective, I mean, we hired 21 lenders this year, but net-net, we were up three. So what we do a constant view of is looking at the talent, how it is progressing or not.

And so what we have been able to do is upgrade talent on a consistent basis, thereby eliminating a lot of churn and the constant need to have to add additional bankers. We have got great bankers; they can help us deliver on what we need to deliver on. Now that being said, we obviously will remain selective, and if there are opportunities out there, but in terms of having a need to drive up non-interest expense and add on a bunch of bankers each quarter, we are in a very fortunate position where we do not have to do that.

Stephen Scouten: Fantastic. I will go ahead and step back. Thanks for all the information.

Palmer Proctor: You bet.

Operator: The next question comes from Catherine Mealor with KBW. Please go ahead.

Catherine Mealor: I wanted to ask about the margin. Nicole, I appreciate your caution on just thinking that the margin will come down next year just as deposit costs accelerate, but we are coming from such a higher level than maybe historically. I think you have kind of talked about a margin, like, the 3.60 or 3.65 range, but we are a lot higher than that today. So just kind of curious if you could put a range on your margin expectations for the year. Thanks.

Nicole S. Stokes: Yes, absolutely. And I know this is yet another quarter of saying that it is going to go down, and then it went up. Real quickly on that five basis points of expansion, two basis points of that expansion really came from our sub-debt payoff. So really, we only had kind of three basis points from both the loan and deposit side. So when I look out over the next few quarters, so much of our guidance is dependent on those deposit costs and the deposit pressure that we see as we see growth accelerating. So I feel like five to 10 basis points over the next few quarters.

And then longer term, it is really going to depend kind of on growth and interest rate environment and where we are after that kind of one-year horizon.

Catherine Mealor: Okay. And that is five to 10 basis points from today's level or the full year '25?

Nicole S. Stokes: That would be kind of where we are today.

Catherine Mealor: Got it. Okay. Okay, great.

Nicole S. Stokes: Now, can you help us get a range as for where it could starting point is for 1Q just given the increase in payroll taxes and things like that?

Nicole S. Stokes: Absolutely. So when you look at the fourth quarter and the first quarter, so that is about a $5 million swing that we expect to come back in, in the first quarter. And then we also had some less incentive accrual in the fourth quarter based on truing up all those accruals based on end-of-year numbers. So that is about another $2.5 million. So I know that the fourth quarter, we were at $143 million. If you add back in that $7.5 million, you kind of get us back in that $150 million to $151 million range. And then, I think, kind of a guide is probably for the year. I think consensus is really good.

But I feel like maybe the first quarter might be a little bit heavy. So maybe the year-to-date consensus number is good, but it might be a little bit heavy in the first quarter. Some of those expenses may come in later in the year as we see growth accelerate throughout the year.

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