ABCB Q3 Deep Dive: Growth in Core Deposits and Loan Demand Shapes Outlook

Regional banking company Ameris Bancorp (NYSE:ABCB) reported revenue ahead of Wall Street’s expectations in Q3 CY2025, with sales up 10.7% year on year to $314.2 million. Its non-GAAP profit of $1.53 per share was 4.1% above analysts’ consensus estimates.

Is now the time to buy ABCB? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Ameris Bancorp delivered third-quarter results that surpassed Wall Street’s revenue and earnings expectations, with management pointing to a combination of core deposit growth, higher noninterest income, and disciplined expense management as key contributors. CEO Palmer Proctor emphasized strong performance in return on assets and tangible book value per share, while highlighting that 4% annualized loan growth and a favorable net interest margin were achieved despite a challenging competitive environment. Management noted that efficiency gains stemmed from revenue expansion rather than cost-cutting, and that asset quality measures remained stable.

Looking forward, Ameris Bancorp’s guidance is shaped by expectations for continued mid-single-digit loan and deposit growth, alongside the ongoing impact of competitive pressures on deposit pricing. CFO Nicole Stokes cautioned that net interest margin may face some compression due to rising deposit costs, but emphasized that expanding the base of noninterest-bearing deposits could offset this effect. Management also anticipates that disruption in the Southeastern banking landscape will continue to create organic growth opportunities, with Proctor stating, “We remain very optimistic and confident about our franchise as we near the end of 2025 and look forward to 2026 and beyond.”

Key Insights from Management’s Remarks

Management attributed Ameris Bancorp’s quarterly growth to robust core deposit inflows, rising noninterest income, and prudent balance sheet management, while noting that competition remains intense, particularly in pricing for new loans and deposits.

• Core deposit base expansion: The company recorded strong 5% annualized growth in core deposits, which helped maintain over 30% noninterest-bearing deposits and supported a stable funding mix.
• Loan growth momentum: Loan balances grew at a 4% annualized rate, largely driven by commercial and industrial (C&I) and commercial real estate (CRE) segments, reflecting healthy demand across key Southeastern markets.
• Margin expansion and fee income: Net interest margin increased to 3.80%, aided by higher spread income and a favorable deposit mix, while noninterest income was boosted by strong equipment finance fees and a one-time securities gain.
• Expense discipline and efficiency: The efficiency ratio improved below 50% due to revenue growth rather than expense reductions, with management expecting this ratio to normalize above 50% next quarter as expenses trend higher in line with industry standards.
• Asset quality and capital strength: Asset quality remained stable, with low net charge-offs and nonperforming assets; capital ratios such as common equity Tier 1 and tangible common equity increased, positioning the bank for future growth opportunities.

Drivers of Future Performance

Ameris Bancorp’s future performance outlook centers on sustaining loan and deposit growth, managing margin pressures, and leveraging market disruptions in its core regions.

• Organic growth in Southeastern markets: Management expects ongoing disruption among regional banks to provide avenues for organic expansion, particularly as Ameris leverages its established presence and experienced banking teams in high-growth areas.
• Deposit cost and margin dynamics: Rising competition for deposits may pressure net interest margin, but the bank aims to mitigate this by increasing noninterest-bearing deposits, which carry lower funding costs. Stokes noted that if growth shifts toward interest-bearing products, margin compression is likely.
• Expense growth and mortgage trends: Noninterest expenses are projected to rise modestly, mainly due to higher salaries, benefits, and potential increases in mortgage-related costs if production accelerates. Management models a return to efficiency ratios above 50% and sees mortgage activity as a potential tailwind if market rates decline.

Catalysts in Upcoming Quarters

Looking ahead, our team will be monitoring (1) whether Ameris Bancorp can sustain core deposit and loan growth rates amid rising competition, (2) the trajectory of net interest margin as funding costs evolve, and (3) the impact of potential changes in mortgage rates on both revenue and operating efficiency. Execution in leveraging market disruption and managing expense growth will also be key signposts.

Ameris Bancorp currently trades at $72.64, down from $74.45 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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