EX-99.1 2 pressrelease.htm PRESS RELEASE pressrelease.htm


 
 

 News Release
 

 
For more information contact:
Dennis J. Zember Jr.
Executive Vice President & CFO
(229) 890-1111


AMERIS BANCORP REPORTS RESULTS
FOR 2008


January 29, 2009

AMERIS BANCORP (NASDAQ-GS: ABCB), Moultrie, Georgia, today reported a net loss of $4.2 million, or $0.31 per diluted share, for the year ended December 31, 2008, compared to net income of $15.2 million, or $1.11 per diluted share, for 2007.  For the fourth quarter of 2008, the Company reported a net loss of $10.7 million, or $0.79 per diluted share, compared to net income of $1.2 million, or $0.09 per diluted share, during the fourth quarter of 2007.  The Company’s net loss for the year and the fourth quarter resulted primarily from increased provisions for loan losses which were associated with continued declines in credit quality.  In addition, deposit funding costs remained extraordinarily high as financial institutions placed a premium on liquidity.

Strong Capital and Liquidity Positions
During the fourth quarter, the Company took several steps to further improve its already strong capital and liquidity positions.  In November 2008, the Company sold preferred stock and a common stock purchase warrant to the U.S. Treasury for $52 million as part of the Treasury’s Capital Purchase Program.  The Company’s total capital to risk-based assets at December 31, 2008 increased to approximately 13.25% compared to 11.6% at December 31, 2007.

To further strengthen its liquidity position, the Company implemented several deposit campaigns focused on attracting less volatile, local-market deposits.  These sales efforts were successful in raising significant amounts of new funding and when combined with approximately $600 million of available lines of credit at December 31, 2008 provide Ameris Bank with very strong liquidity ratios.

Provision for Loan Losses and Credit Quality
Non-performing assets continued to increase during the fourth quarter, ending 2008 at $70.2 million, or 4.13% of total loans, an increase from the $43.2 million, or 2.52% of total loans reported at the end of the third quarter of 2008.  Net charge-offs in 2008 were $23.0 million, or 1.36% of total loans compared to $8.5 million, or 0.53% of total loans in 2007.

 
-1-

 


This increase in non-performing assets and the accelerating level of net charge-offs led to a provision for loan losses of $19.9 million for the fourth quarter of 2008 compared to $6.9 million in the same quarter in 2007.  For the year, provision for loan losses amounted to $35.0 million compared to $11.3 million during 2007.  Included in the current quarter’s provision for loan losses was a $5.0 million charge to establish a reserve component reflecting economic uncertainties that management believes is prudent and timely given the economic outlook. Management anticipates a quarterly evaluation of economic trends and may increase or decrease this portion of the reserve in future periods.

“Although our credit quality metrics are disappointing, our Company continues to benefit from a conservative lending philosophy and several important decisions that we made before the current economic crisis began,” said Edwin W. Hortman, Jr., President and Chief Executive Officer.  “Most importantly, our lending philosophy focuses on relationship banking, forcing us to know and bank the customer rather than simply understanding a loan transaction.  Second, we originate our loans in local markets instead of relying on loan participations or deals outside the areas that we know best.  Lastly, we have resisted the trend to loan larger sums to individual borrowers for the sake of growth.  Our average loan size is only $88,500 and our largest loan is $9.8 million compared to our legal lending limit of $30 million.  We still face issues, despite these advantages, but we remain committed to working through the current credit crisis in a timely and prudent fashion,” finished Hortman.

Trends in Net Interest Income and Net Interest Margin
The Company’s net interest margin fell during the fourth quarter of 2008 to 2.92% compared to 3.92% during the same quarter in 2007.  For the year to date period, the Company’s net interest margin was 3.65% compared to 4.02% in 2007.  Reversals of interest on new non-accrual loans, increased levels of non-earning assets and relatively expensive funding costs combined to produce the lower margins in the current quarter and year-to-date periods.

Yields on earning assets fell to 5.58% during the current quarter, compared to 7.66% in the fourth quarter of 2007.  For the year, yields on earning assets fell to 6.43% from 7.79% in 2007.  The Company’s mix of earning assets played a significant role in producing lower yields on earning assets as did short-term rates and lending benchmark rates at historically low levels.  During the quarter, as the Company added to its liquidity position, short-term assets and investment securities with final maturities of less than 12 months increased to 10.8% of total earning assets compared to 0.8% at December 31, 2007.  The Company’s efforts during 2007 and 2008 to establish floors on variable rate loans cushioned the impact of sharp declines in indexes on which the Company normally loans money.  Still, approximately 16.6% of the Company’s total loan portfolio at December 31, 2008 were variable rate loans with no established floor and, as a result, produced only marginally profitable yields.

Deposit costs increased during the quarter as a result of several campaigns designed to bolster the Company’s liquidity using local-market deposits instead of brokered deposits or wholesale borrowings.  During the quarter, the Company saw total customer deposits increase by $198.6 million to $1.82 billion, an increase of 12.3% over the most recent linked quarter.  At December 31, 2008, the Company had $195.3 million in brokered deposits, which represents 9.06% of total funding and an increase of $67.3 million from the end of 2007.  The reduced level of volatility in local-market deposits versus the increasingly unfavorable opinions of brokered deposits by regulatory agencies have caused a significant rise in the cost of customer deposits relative to market yields on assets.  Profitability levels on deposit funding began to improve late in the fourth quarter, and if these trends continue, the Company expects wider spreads and margins to follow.

 
-2-

 

Commenting on pricing challenges, Mr. Hortman said, “Significant disruption in our industry in the fourth quarter of 2008 created unique opportunities for new deposit accounts.  Our bankers responded with exceptionally strong sales in our local market, opening over 6,500 new accounts.  In 2009, our challenge will be to systematically reduce deposit pricing while we improve our deposit mix to be concentrated more heavily in low-cost, transaction-oriented business.  Success in this initiative will combine with greatly improved loan pricing and allow the Company to quickly return to acceptable net interest margins.”

Non-Interest Income
Total non-interest income for 2008 increased 8.3% to $19.1 million.  Service charges on deposit accounts increased 11.7% to $13.9 million.  This increase in service charges came as a result of significantly more transaction accounts as well as slight increases in related fee schedules.  Mortgage income increased slightly in 2008 to $3.2 million from $3.1 million in 2007.  As mortgage rates continue to fall to historically low levels, activity in the Company’s mortgage division has increased and higher levels of loan closings and revenue are anticipated.

Non-Interest Expense
Total operating expenses for 2008 increased 6.4% to $62.7 million.  Salaries and benefits during 2008 were $31.7 million, an increase of 6.2% when compared to $29.8 million in 2007.  These increases are mostly the result of expansion efforts in larger metro markets where the Company opened nine offices during 2008.  To help offset this expense, Ameris Bank announced seven branch office closings during 2008, including two in the fourth quarter of 2008.  Speaking on management’s efforts to balance the Company’s short-term and long-term decision making, Mr. Hortman said, “In 2009, we will focus more aggressively on reaching important levels of profitability in the offices we have opened since the beginning of 2007 and pause with additional de-novo branch projects.  We expect all markets in which we have expanded to be profitable in 2009 despite the challenges with credit and revenue growth.”

Occupancy and equipment expense increased during 2008 to $8.1 million, an increase of 7.0% when compared to 2007.  This increase also relates to expansion efforts in metro markets, the costs of which were offset to some degree by savings from branch closings during 2008.  Other operating expenses increased $1.3 million during 2008 to $17.1 million.  These increases were primarily the result of additional legal and collection expenses associated with non-performing assets as well as increases in advertising and marketing expense aimed at attracting new deposit accounts.

 
Ameris Bancorp is headquartered in Moultrie, Georgia, and at the end of the most recent quarter, had 50 locations in Georgia, Alabama, northern Florida and South Carolina.
 

 
Ameris Bancorp Common Stock is quoted on the NASDAQ Global Select Market under the symbol “ABCB”. The preceding release 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. The Company 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.


 
-3-

 


AMERIS BANCORP
FINANCIAL HIGHLIGHTS
(unaudited)
(dollars in thousands except per share data and FTE headcount)
                                           
                                           
   
Three Months Ended
                     
Twelve Months Ended
 
   
Dec.
   
Sept
   
June
   
Mar.
   
Dec.
   
Dec.
   
Dec.
 
   
2008
   
2008
   
2008
   
2008
   
2007
   
2008
   
2007
 
                                           
                                           
EARNINGS
                                         
Net Income/(Loss) Available to Common Shareholders
  $ (10,724 )   $ 366     $ 3,149     $ 2,966     $ 1,197     $ (4,243 )   $ 15,153  
                                                         
PER COMMON SHARE DATA
                                                       
Earnings per share:
                                                       
Basic
    (0.79 )     0.03       0.23       0.22       0.09       (0.31 )     1.12  
Diluted
    (0.79 )     0.03       0.23       0.22       0.09       (0.31 )     1.11  
Cash Dividends per share
    0.05       0.05       0.14       0.14       0.14       0.38       0.56  
Book value per share (period end)
    14.06       14.25       14.20       14.48       14.12       14.06       14.06  
Tangible book value per share (period end)
    9.74       9.92       9.84       10.11       9.72       9.74       9.67  
Weighted average number of shares:
                                                       
Basic
    13,532,521       13,515,767       13,510,907       13,497,344       13,485,765       13,514,135       13,479,240  
Diluted
    13,562,286       13,543,612       13,563,032       13,559,761       13,573,626       13,562,690       13,631,069  
Period-end number of shares
    13,534,601       13,564,032       13,564,032       13,556,770       13,539,985       13,534,601       13,539,985  
Market data:
                                                       
High closing price
    14.21       15.07       16.48       16.55       18.81       16.55       28.48  
Low closing price
    7.19       7.82       8.70       12.60       13.83       7.19       13.83  
Period end closing price
    11.85       14.85       8.70       16.06       16.85       11.85       16.85  
Average daily volume
    31,527       43,464       62,739       61,780       51,604       49,736       45,615  
                                                         
PERFORMANCE RATIOS
                                                       
Return on average assets
    (1.81 %)     0.07 %     0.59 %     0.56 %     0.23 %     (0.19 %)     0.74 %
Return on average common equity
    (22.16 %)     0.78 %     6.58 %     6.15 %     2.49 %     (2.22 %)     8.14 %
Earning asset yield (TE)
    5.58 %     6.38 %     6.64 %     7.17 %     7.66 %     6.43 %     7.79 %
Total cost of funds
    2.72 %     2.54 %     2.74 %     3.30 %     3.79 %     2.82 %     3.83 %
Net interest margin (TE)
    2.92 %     3.87 %     3.96 %     3.91 %     3.92 %     3.65 %     4.02 %
Non-interest income excluding securities transactions,
                                                       
as a percent of total revenue (TE)
    11.64 %     12.49 %     14.00 %     12.22 %     10.81 %     12.60 %     10.94 %
Efficiency ratio
    80.66 %     61.97 %     65.52 %     67.05 %     67.31 %     68.34 %     63.58 %
                                                         
CAPITAL ADEQUACY
                                                       
Common equity to assets
    7.91 %     8.56 %     8.78 %     9.27 %     9.06 %     7.91 %     9.06 %
Tangible common equity to tangible assets
    5.62 %     6.12 %     6.26 %     6.66 %     6.41 %     5.62 %     6.41 %
                                                         
OTHER PERIOD-END DATA
                                                       
FTE Headcount
    595       601       651       634       620       595       620  
Assets per FTE
  $ 4,046     $ 3,756     $ 3,369     $ 3,341     $ 3,407     $ 4,046     $ 3,407  
Branch locations
    50       50       48       45       46       50       46  
Deposits per branch location
  $ 40,271     $ 36,127     $ 36,893     $ 39,651     $ 38,201     $ 40,271     $ 38,201  

 
-4-

 

   
Three Months Ended
   
Twelve Months Ended
 
   
Dec.
   
Sept
   
June
   
Mar.
   
Dec.
   
Dec.
   
Dec.
 
   
2008
   
2008
   
2008
   
2008
   
2007
   
2008
   
2007
 
                                           
                                           
INCOME STATEMENT
                                         
                                           
Interest income
                                         
Interest and fees on loans
   $ 26,582      $ 28,280      $ 28,339      $ 30,134      $ 32,999     $ 113,335     $ 128,869  
Interest on taxable securities
    3,677       3,563       3,646       3,583       3,576       14,469       14,171  
Interest on nontaxable securities
    171       169       173       172       158       685       688  
Interest on deposits in other banks
    123       100       91       200       259       514       2,306  
Interest on federal funds sold
    5       -       -       -       (20 )     5       43  
Total interest income
    30,558       32,112       32,249       34,089       36,972       129,008       146,077  
                                                         
Interest expense
                                                       
Interest on deposits
    13,769       11,717       12,314       14,142       15,620       51,942       62,380  
Interest on other borrowings
    817       1,218       879       1,487       2,367       4,401       8,619  
Total interest expense
    14,586       12,935       13,193       15,629       17,987       56,343       70,999  
                                                         
Net interest income
    15,972       19,177       19,056       18,460       18,985       72,665       75,078  
                                                         
Provision for loan losses
    19,890       8,220       3,720       3,200       6,914       35,030       11,321  
                                                         
Net interest income/(loss) after provision for loan losses
    (3,918 )     10,957       15,336       15,260       12,071       37,635       63,757  
                                                         
Noninterest income
                                                       
Service charges on deposit accounts
    3,279       3,657       3,664       3,316       3,310       13,916       12,455  
Mortgage banking activity
    711       745       855       869       827       3,180       3,093  
Other service charges, commissions and fees
    90       120       220       278       233       708       1,268  
Gain(loss) on sale of securities
    316       -       -       -       (236 )     316       (297 )
Other non-interest income
    (12 )     113       586       333       104       1,020       1,147  
Total noninterest income
    4,384       4,635       5,325       4,796       4,238       19,140       17,666  
                                                         
Noninterest expense
                                                       
Salaries and employee benefits
    7,309       7,113       8,660       8,618       7,122       31,700       29,844  
Equipment and occupancy expense
    2,070       1,904       2,103       1,992       2,118       8,069       7,540  
Amortization of intangible assets
    291       293       293       293       324       1,170       1,297  
Data processing fees
    1,169       1,238       1,226       1,093       1,096       4,726       4,532  
Other operating expenses
    5,580       4,209       3,692       3,598       4,972       17,079       15,757  
Total noninterest expense
    16,419       14,757       15,974       15,594       15,632       62,744       58,970  
                                                         
Operating profit/(loss)
    (15,953 )     835       4,687       4,462       677       (5,969 )     22,453  
                                                         
Income tax (benefit)/expense
    (5,556 )     469       1,538       1,496       (520 )     (2,053 )     7,300  
                                                         
Net income/(loss)
  $ (10,397 )   $ 366     $ 3,149     $ 2,966     $ 1,197     $ (3,916 )   $ 15,153  
                                                         
Preferred stock dividends
    327       -       -       -       -       327       -  
                                                         
Net income/(loss) available
                                                       
     to common shareholders
  $ (10,724 )   $ 366     $ 3,149     $ 2,966     $ 1,197     $ (4,243 )   $ 15,153  
                                                         
Diluted earnings available to common shareholders
  $ (0.79 )   $ 0.03     $ 0.23     $ 0.22     $ 0.09     $ (0.31 )   $ 1.11  

 
-5-

 


   
Three Months Ended
 
   
Dec.
   
Sept.
   
June
   
Mar.
   
Dec.
 
   
2008
   
2008
   
2008
   
2008
   
2007
 
                               
PERIOD-END BALANCE SHEET
                             
                               
Assets
                             
Cash and due from banks
  $ 66,787     $ 43,549     $ 47,720     $ 63,401     $ 59,804  
Federal funds sold and interest bearing balances
    144,383       75,458       38,125       4,389       12,022  
Securities available for sale, at fair value
    369,682       287,790       293,601       297,589       291,170  
Restricted equity securities, at cost
    6,839       9,836       9,651       6,996       7,559  
                                         
Loans, net of unearned income
    1,695,777       1,710,109       1,678,147       1,622,437       1,614,048  
Less allowance for loan losses
    39,652       30,144       28,660       28,094       27,640  
Loans, net
    1,656,125       1,679,965       1,649,487       1,594,343       1,586,408  
                                         
Premises and equipment, net
    66,107       65,868       63,291       60,053       59,132  
Intangible assets, net
    3,631       3,924       4,217       4,509       4,802  
Goodwill
    54,813       54,813       54,813       54,675       54,813  
Other assets
    38,723       36,440       32,116       32,288       36,353  
Total Assets
  $ 2,407,090     $ 2,257,643     $ 2,193,021     $ 2,118,243     $ 2,112,063  
                                         
Liabilities
                                       
Deposits:
                                       
Noninterest-bearing
  $ 208,532     $ 198,900     $ 200,936     $ 199,692     $ 197,345  
Interest-bearing
    1,804,993       1,607,439       1,569,925       1,584,599       1,559,920  
Total deposits
    2,013,525       1,806,339       1,770,861       1,784,291       1,757,265  
Federal funds purchased & securities sold under
                                       
agreements to repurchase
    27,416       63,973       39,795       4,987       14,705  
Other borrowings
    72,000       138,600       133,000       74,500       90,500  
Other liabilities
    12,521       13,118       14,541       15,888       16,075  
Subordinated deferrable interest debentures
    42,269       42,269       42,269       42,269       42,269  
Total liabilities
    2,167,731       2,064,299       2,000,466       1,921,935       1,920,814  
                                         
                                         
Stockholders' equity
                                       
  Preferred Stock
  $ 49,028     $ -     $ -     $ -     $ -  
  Common stock
    14,866       14,895       14,895       14,887       14,870  
  Capital surplus
    86,038       83,453       83,308       82,920       82,750  
  Retained earnings
    93,696       105,117       105,430       104,182       103,095  
  Accumulated other comprehensive loss
    6,518       666       (291 )     5,093       1,303  
  Less treasury stock
    (10,787 )     (10,787 )     (10,787 )     (10,774 )     (10,769 )
Total stockholders' equity
    239,359       193,344       192,555       196,308       191,249  
Total liabilities and stockholders' equity
  $ 2,407,090     $ 2,257,643     $ 2,193,021     $ 2,118,243     $ 2,112,063  
                                         
                                         
Other Data
                                       
Earning Assets
   $ 2,216,681     $ 2,083,193     $ 2,019,525     $ 1,931,411     $ 1,924,799  
Intangible Assets
    58,444       58,737       59,030       59,184       59,615  
Interest Bearing Liabilities
    1,946,678       1,852,281       1,784,989       1,706,355       1,707,394  
Average Assets
    2,354,142       2,192,501       2,141,940       2,115,561       2,102,579  
Average Common Stockholders' Equity
   $ 192,479     $ 186,541     $ 192,605     $ 193,971     $ 191,124  

 
-6-

 


   
Three Months Ended
   
Twelve Months Ended
 
   
Dec.
   
Sept
   
June
   
Mar.
   
Dec.
   
Dec.
   
Dec.
 
   
2008
   
2008
   
2008
   
2008
   
2007
   
2008
   
2007
 
                                           
ASSET QUALITY INFORMATION
                                         
                                           
Allowance for loan losses
                                         
Balance at beginning of period
  $ 30,144     $ 28,660     $ 28,094     $ 27,640     $ 26,434     $ 27,640     $ 24,863  
Provision for loan loss
    19,890       8,220       3,720       3,200       6,914       35,030       11,321  
                                                         
Charge-offs
    10,648       6,946       3,801       2,945       6,465       24,340       10,386  
Recoveries
    266       210       647       199       757       1,322       1,842  
Net charge-offs (recoveries)
    10,382       6,736       3,154       2,746       5,708       23,018       8,544  
                                                         
Ending balance
  $ 39,652     $ 30,144     $ 28,660     $ 28,094     $ 27,640     $ 39,652     $ 27,640  
                                                         
As a percentage of loans
    2.34 %     1.76 %     1.71 %     1.73 %     1.71 %     2.34 %     1.71 %
As a percentage of nonperforming loans
    60.62 %     76.46 %     89.27 %     104.78 %     149.66 %     60.62 %     149.66 %
As a percentage of nonperforming assets
    56.52 %     69.84 %     81.56 %     86.34 %     108.56 %     56.52 %     108.56 %
                                                         
                                                         
Net Charge-off information
                                                       
Charge-offs
                                                       
Commercial, Financial & Agricultural
  $ 1,090     $ 963     $ 282     $ 390     $ 421     $ 2,725     $ 1,177  
Real Estate - Residential
    1,951       989       902       672       1,262       4,514       2,269  
Real Estate - Commercial & Farmland
    1,288       628       49       299       621       2,264       1,244  
Real Estate - Construction & Development
    5,932       4,165       2,320       1,305       3,899       13,722       5,013  
Consumer Installment
    387       201       248       279       262       1,115       683  
Other
    -       -       -       -       -       -       -  
Total charge-offs
    10,648       6,946       3,801       2,945       6,465       24,340       10,386  
                                                         
Recoveries
                                                       
Commercial, Financial & Agricultural
    11       71       102       18     $ 95     $ 202     $ 583  
Real Estate - Residential
    30       54       90       25       14       199       130  
Real Estate - Commercial & Farmland
    10       10       68       31       159       119       339  
Real Estate - Construction & Development
    27       26       323       34       401       410       415  
Consumer Installment
    187       49       64       90       88       390       369  
Other
    1       -       -       1       -       2       6  
Total recoveries
    266       210       647       199       757       1,322       1,842  
                                                         
Net charge-offs (recoveries)
  $ 10,382     $ 6,736     $ 3,154     $ 2,746     $ 5,708     $ 23,018     $ 8,544  
                                                         
                                                         
                                                         
Non-accrual loans
  65,414     $ 39,427     $ 32,106     $ 26,812     $ 18,468      $ 65,414      $ 18,468  
Foreclosed assets
    4,742       3,734       3,032       5,727       6,993       4,742       6,993  
Total non-performing assets
  $ 70,156     $ 43,161     $ 35,138     $ 32,539     $ 25,461      $ 70,156      $ 25,461  
Non-performing assets as a percent of loans
                                                       
and foreclosed assets
    4.13 %     2.52 %     2.09 %     2.00 %     1.57 %     4.13 %     1.57 %
Net charge offs as a percent of loans (Annualized)
    2.45 %     1.58 %     0.75 %     0.68 %     1.41 %     1.36 %     0.53 %

 
-7-

 


   
 
                               
   
 Three Months Ended
   
Twelve Months Ended
 
   
Dec.
   
Sept
   
June
   
Mar.
   
Dec.
   
Dec.
   
Dec.
 
   
2008
   
2008
   
2008
   
2008
   
2007
   
2008
   
2007