Ameris Bancorp (ABCB) Q3 2025: Tangible Book Value Surges 15% Amid Southeast Disruption Tailwind
Ameris Bancorp delivered a standout quarter, with tangible book value per share up over 15% annualized and efficiency ratio dipping below 50% as Southeast market disruption fueled organic growth opportunities. Leadership signaled confidence in sustaining above-peer returns, supported by robust non-interest-bearing deposit growth, margin strength, and disciplined credit execution. Looking ahead, management is prioritizing organic expansion over M&A, leveraging competitive disruption and a strong capital position to extend share gains into 2026.
Summary
- Deposit Franchise Leverage: Core deposit growth and non-interest-bearing mix remain central to margin outperformance.
- Organic Growth Focus: Bank is prioritizing internal expansion over M&A amid Southeast disruption.
- Margin and Fee Income Watch: Margin compression risk and fee normalization are key for forward NII and revenue trajectory.
Performance Analysis
Ameris Bancorp’s third quarter results reflected broad-based strength, with top-tier profitability metrics and tangible book value growth outpacing peers. The company reported net income of $106 million, with return on assets and return on tangible common equity well ahead of industry averages, underscoring the effectiveness of its core deposit and margin management strategies. Efficiency ratio improved to 49.2%, driven not by cost cuts but by 18% annualized revenue growth, as both net interest and fee income expanded.
Loan growth tracked at a 4% annualized pace, in line with guidance and fueled by a balanced mix of commercial and CRE lending. Deposit growth matched at 5% annualized, with non-interest-bearing deposits holding above 30%, supporting a robust 3.80% net interest margin. Asset quality remained stable, with low net charge-offs and non-performing assets. Capital ratios strengthened further, with CET1 at 13.2% and tangible common equity at 11.3%, positioning the bank for future growth and opportunistic capital deployment, including a new $200 million buyback authorization.
- Revenue-Driven Efficiency: Efficiency gains stemmed from revenue expansion, not expense contraction, highlighting positive operating leverage.
- Fee Income Upside: Equipment finance delivered a nonrecurring boost, with recurring fee levels expected to normalize at 75% of Q3’s peak.
- Mortgage and Securities: Mortgage production exceeded $1.1 billion, and the investment portfolio grew to 9.3% of assets, adding optionality for future balance sheet management.
Despite expectations for modest margin compression ahead, Ameris’s ability to grow non-interest-bearing deposits and sustain strong loan demand provides a buffer against near-term headwinds.
Executive Commentary
"We remain focused on generating revenue growth and positive operating leverage. This is evidenced by our 18% annualized revenue growth in the quarter. And when coupled with a modest decline in expenses and slight increase in margin, pushed our efficiency ratio below 50%."
Palmer Proctor, Chief Executive Officer
"Our strong revenue growth was driven by increases in both net interest income and fee income. Our spread income grew by $6 million in the quarter, or 10.5% annualized. That growth came from interest income growth of $7 million, which outpaced our interest expense growth of only $1 million."
Nicole Stokes, Chief Financial Officer
Strategic Positioning
1. Core Deposit Strength as Margin Anchor
Ameris’s deposit franchise, with over 30% non-interest-bearing deposits, continues to underpin its outsized net interest margin. Leadership emphasized that future margin resilience is tightly linked to sustaining this core deposit mix, as increasing competition for funding is beginning to pressure CD pricing and deposit costs. The bank’s ability to grow non-interest-bearing balances is now the key swing factor for NIM and net interest income (NII) trajectory.
2. Organic Growth Priority over M&A
Management is doubling down on organic growth, capitalizing on Southeast market dislocation rather than pursuing acquisitions. The franchise’s established presence in high-growth markets and a focus on relationship-driven expansion positions Ameris to benefit as competitors retrench or consolidate. Selective hiring continues, but the bank is not dependent on large-scale team lift-outs to drive growth.
3. Fee Income Normalization and Securitization Optionality
Equipment finance delivered a notable nonrecurring fee boost in Q3, but management expects approximately 75% of this to recur going forward. The business is preparing to securitize loans, which could add new recurring fee streams and servicing income, providing further diversification beyond spread income. Mortgage banking remains a lever, with applications up and potential for a tailwind if rates decline.
4. Capital Flexibility and Shareholder Returns
Capital ratios reached multi-year highs, enabling Ameris to authorize a $200 million buyback—double its prior program. This capital flexibility provides dry powder for both organic expansion and opportunistic capital return as market conditions evolve.
5. Asset Quality and Conservative Credit Box
Credit quality remains stable, with net charge-offs and non-performing assets at low levels. The equipment finance credit box was retooled in late 2023, yielding charge-offs within target ranges and supporting disciplined growth. Provisioning for unfunded commitments signals confidence in the loan pipeline and future production.
Key Considerations
This quarter’s performance underscores Ameris’s ability to leverage its Southeast footprint and granular deposit base for both margin and growth outperformance, while maintaining disciplined credit and expense management.
Key Considerations:
- Deposit Beta Pressure Rising: CD repricing is catching up to production rates, removing a prior tailwind and introducing potential headwinds for cost of funds.
- Margin Compression Watch: Management continues to guide for modest NIM compression as deposit costs rise and loan yields lag in repricing.
- Organic Expansion Priority: Focus remains on internal growth, with M&A deprioritized to avoid distraction from near-term market opportunities.
- Equipment Finance Securitization: Potential to unlock new recurring fee streams and balance sheet flexibility as loan volumes ramp.
- Mortgage Efficiency Leverage: Mortgage segment poised for improved efficiency if volumes recover on lower rates, with variable comp structure providing cost flexibility.
Risks
Key risks include intensifying deposit competition, which could accelerate margin compression if non-interest-bearing growth falters. Fee normalization in equipment finance may reduce non-interest income momentum, while mortgage activity remains rate-sensitive. Asset quality remains stable, but any Southeast economic slowdown or CRE stress could challenge credit performance. Forward-looking statements remain subject to macro and competitive uncertainties, as highlighted by management.
Forward Outlook
For Q4 2025, Ameris guided to:
- Efficiency ratio returning above 50% as revenue tailwinds moderate
- Mid-single-digit loan and deposit growth, with deposit growth governing loan expansion pace
For full-year 2026, management maintained guidance:
- Mid-single-digit loan and deposit growth
- Continued focus on margin management and NII growth, despite anticipated modest NIM compression
Management highlighted several factors that will shape results:
- Ability to sustain non-interest-bearing deposit growth will be pivotal for margin and NII
- Organic opportunity set in the Southeast remains robust amid ongoing disruption
Takeaways
Ameris Bancorp’s franchise model—rooted in core deposit strength and Southeast market focus—continues to drive above-peer returns and capital generation, even as industry competition for funding intensifies.
- Margin and Deposit Leadership: Non-interest-bearing deposit growth and core franchise strength are central to Ameris’s sustained margin advantage, but rising deposit beta could test this edge in coming quarters.
- Organic Growth Engine: Leadership is fully committed to internal expansion, leveraging market disruption and established talent rather than pursuing M&A.
- Fee and Mortgage Watch: Normalization in equipment finance fees and mortgage efficiency gains are key swing factors for recurring revenue and operating leverage in 2026.
Conclusion
Ameris Bancorp enters year-end with momentum in tangible book value, margin, and capital, positioning itself as a Southeast market consolidator amid disruption. Execution on deposit and loan growth, alongside careful margin and expense management, will determine if outperformance can be sustained into 2026.
Industry Read-Through
Ameris’s results reinforce the growing importance of core deposit franchises as a differentiator among regional banks, especially as funding competition heats up and CD repricing removes prior cost-of-funds tailwinds. Organic growth opportunities are expanding for well-capitalized banks in the Southeast, as disruption and retrenchment create share-gain windows. The normalization of fee income in equipment finance and the renewed focus on mortgage efficiency signal broader industry trends of shifting revenue mix and cost discipline. Banks unable to grow non-interest-bearing deposits or lacking capital flexibility may face outsized margin pressure and strategic constraint as the cycle matures.