Detailed Narrative
Core Fundamentals & Profitability
Ameris Bancorp demonstrated strong core fundamentals in Q2 FY26, achieving an adjusted ROA of 1.53%, adjusted PPNR ROA of 2.24%, and adjusted return on tangible common equity exceeding 14%. The bank maintained an adjusted efficiency ratio of 50.4%, reflecting positive operating leverage with adjusted revenue growing 6% year-over-year against 3% adjusted expense growth. This performance highlights the company's ability to generate organic profitable growth.
Balance Sheet Strength & Capital
The balance sheet remains robust, characterized by nearly 50% checking accounts and a tangible common equity ratio above 11%. CET1 stood at almost 13%. These strong capital levels position the bank well for future growth in its attractive southeastern markets. The company also continued its capital return program, repurchasing $19 million of common stock in the quarter, bringing year-to-date buybacks to $94 million.
Loan & Deposit Growth Dynamics
The bank experienced profitable growth, with average earning assets increasing 8.5% annualized and loans growing over 6% annualized. Loan production reached $2.4 billion, a 24% increase year-over-year, supported by a robust pipeline of $2.7 billion. Average deposits grew 4.4% annualized, with noninterest-bearing deposits remaining strong at 30% of total deposits. The bank projects mid-single-digit loan and deposit growth for the full year, with deposit growth governing loan expansion.
Credit Quality & Reserves
Credit quality remained stable and clean, with the reserve unchanged at $162 million. Net charge-offs and nonperforming assets were stable at very low levels, with annualized net charge-offs decreasing to 20 basis points. Management anticipates net charge-offs to remain in the 20 to 25 basis point range for the remainder of 2026. The allowance for credit losses, including unfunded commitments, provides approximately 9 years of coverage on net charge-offs.
Strategic Expansion & Market Opportunity
Ameris Bancorp is strategically expanding its footprint into the Nashville, Tennessee market, driven by the recruitment of a strong local banking team. This move is expected to be additive to longer-term organic growth, leveraging the high-growth market and the bank's existing presence and brand awareness in its broader Southeastern footprint. The company prioritizes organic growth and remains selective in talent acquisition.
Expense Management & Litigation
Reported expenses were significantly impacted by an $82.5 million litigation accrual related to an employment case verdict. Despite this, the bank achieved positive earnings and grew tangible book value per share due to strong core profitability. Adjusted noninterest expense increased by $3.1 million, primarily due to higher legal costs and charitable donations, while the adjusted efficiency ratio improved.