2 Reasons to Like ABCB and 1 to Stay Skeptical

Ameris Bancorp has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 7.6% to $67.45 per share while the index has gained 7.1%.

Is ABCB a buy right now? Find out in our full research report, it’s free.

Why Does ABCB Stock Spark Debate?

Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE:ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.

Two Things to Like:

1. Long-Term Revenue Growth Shows Strong Momentum

In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.

Over the last five years, Ameris Bancorp grew its revenue at a solid 8.4% compounded annual growth rate. Its growth beat the average bank company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Ameris Bancorp’s astounding 10.1% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

One Reason to be Careful:

Net Interest Income Points to Soft Demand

Our experience and research show the market cares primarily about a bank’s net interest income growth as non-interest income is considered a lower-quality and non-recurring revenue source.

Ameris Bancorp’s net interest income has grown at a 7.4% annualized rate over the last four years, slightly worse than the broader bank industry.

Final Judgment

Ameris Bancorp’s merits more than compensate for its flaws, but at $67.45 per share (or 1.1× forward P/B), is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

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