Ameris Profit Falls as Litigation Charge Masks Revenue Growth
Revenue rose 8.4% from a year earlier to $326.0 million.
Ameris Bancorp (ABCB), the Southeast bank, reported a 53% drop in second-quarter net income after an $82.5 million litigation accrual weighed on results. Net income fell to $51.4 million, or $0.77 a diluted share, from $109.8 million, or $1.60 a share, a year earlier.
The employment-case charge drove the gap between reported and underlying performance. Adjusted net income declined 2.0% from a year earlier to $107.3 million, while adjusted diluted earnings edged up to $1.60 a share from $1.59. For the first half, adjusted net income increased 10.3% and adjusted diluted earnings rose to $3.23 a share from $2.87.
Revenue growth was supported by lending and net interest income. Total revenue increased from $314.4 million in the first quarter, while revenue excluding gains and other adjustments rose more modestly to $317.8 million from $314.4 million. Tax-equivalent net interest income climbed 8.9% from a year earlier to $253.4 million as average earning assets expanded.
Net interest margin held at 3.88% from the first quarter, extending a rise from 3.77% a year earlier. Funding costs interrupted their recent decline, with the total cost of funds increasing three basis points sequentially to 1.91%, though it remained 15 basis points below the year-earlier level.
Fee businesses produced mixed results. Mortgage banking revenue fell 12.1% from the first quarter to $32.5 million even as retail mortgage production increased 6.0% to $1.15 billion, reflecting a smaller open pipeline and a narrower gain-on-sale spread. Noninterest income rose 5.2% sequentially to $73.5 million, aided by a $7.4 million securities gain primarily tied to Visa share adjustments.
Period-end loans increased $349.9 million to $22.18 billion, a 6.4% annualized growth rate, helping average earning assets grow at an 8.5% annualized pace. Credit measures shifted modestly: nonperforming assets rose two basis points sequentially to 0.47% of assets, while the annualized net charge-off ratio declined one basis point to 0.20%.
Ameris repurchased 226,600 shares for $19.0 million during the quarter, and tangible book value increased $0.31 to $45.10 a share. The company also announced an expansion into Nashville, extending its Southeast banking footprint as underlying earnings remained comparatively steady beneath the litigation charge.