ABCB Q2 Deep Dive: Loan Growth, Deposit Stability, and Margin Expansion Support Results

Regional banking company Ameris Bancorp (NYSE:ABCB) beat Wall Street’s revenue expectations in Q2 CY2025, but sales were flat year on year at $300.7 million. Its non-GAAP profit of $1.59 per share was 19.3% above analysts’ consensus estimates.

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StockStory’s Take

Ameris Bancorp’s second quarter delivered flat revenue year over year but exceeded Wall Street’s expectations, with the market responding positively. Management attributed the strong performance to disciplined loan growth, a healthy noninterest-bearing deposit mix, and ongoing efficiency improvements. CEO Palmer Proctor cited a 6.5% annualized increase in loans, margin expansion, and a focus on positive operating leverage as central to the bank’s results. He also highlighted Ameris Bancorp’s ability to maintain a robust capital position and asset quality, supporting consistent tangible book value growth. Proctor stated, "Our strong second quarter earnings and capital generation increased our common equity Tier 1 to 13% and TCE to over 11%."

Looking ahead, Ameris Bancorp’s management is optimistic about sustaining mid-single-digit loan and deposit growth, while maintaining a disciplined approach to margin and expense management. CFO Nicole Stokes noted that while loan growth is expected to drive competition for deposits and exert some pressure on funding costs, Ameris Bancorp’s deposit base and treasury management efforts should help offset these headwinds. Stokes emphasized, “If the Fed were to cut, I think we could maybe see a little bit of bump in the margin just from getting ahead of the curve there on the deposit side.” The company is prepared to capitalize on market opportunities, particularly in its southeastern markets, and remains focused on organic growth over acquisitions.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to strong C&I loan growth, stable deposit funding, and higher net interest margin, supported by careful capital allocation and operational discipline.

• C&I Loan Growth: The majority of loan growth in the quarter came from commercial and industrial (C&I) lending, with management noting a resurgence in activity and increased loan production, particularly from mortgage warehouse and premium finance segments.
• Deposit Mix Stability: The bank maintained a strong mix of noninterest-bearing deposits, which comprised 31% of total deposits, supporting margin expansion and reducing reliance on higher-cost funding sources.
• Margin Expansion: Ameris Bancorp expanded net interest margin to 3.77%, aided by higher yields on new loans and securities, even as funding costs began to stabilize. Management expects margin normalization above the 3.60%-3.65% range in coming quarters.
• Operational Efficiency: The efficiency ratio improved to 51.63%, reflecting revenue growth outpacing expenses. Management credited both increased banker productivity and continued cost discipline for these results.
• Asset Quality and Capital Strength: Asset quality trends remained favorable, with lower net charge-offs and improved credit metrics, while capital ratios further strengthened, providing flexibility for future growth.

Drivers of Future Performance

Ameris Bancorp expects ongoing loan growth, competitive deposit markets, and prudent expense management to shape results for the rest of the year.

• Loan and Deposit Growth Focus: Management is targeting consistent mid-single-digit growth in both loans and deposits, emphasizing organic expansion within southeastern markets. The company’s ability to attract and retain new banking talent is considered a key enabler for this strategy.
• Margin Management Amid Competition: As loan demand increases, Ameris Bancorp anticipates greater competition for deposits, which could pressure funding costs and net interest margin. However, management believes its core deposit franchise and treasury management focus will help mitigate these effects. Potential Federal Reserve rate cuts could provide an upside to margins if deposit costs are adjusted swiftly.
• Expense and Efficiency Discipline: Maintaining an improved efficiency ratio is a core priority. Management plans to keep expense growth in check even as loan production increases, with merit increases and mortgage-related costs expected to remain manageable.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be watching (1) whether Ameris Bancorp sustains mid-single-digit loan and deposit growth amid intensifying competition; (2) if the net interest margin remains above peer levels as deposit costs rise; and (3) how the efficiency ratio and asset quality metrics hold up as production scales. The ability to capitalize on Southeast market disruptions will also be a key signpost.

Ameris Bancorp currently trades at $70.04, up from $66.38 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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