Ameris Bancorp today reported operating net income of $16.5 million, or $0.50 per diluted share, for the quarter ended March 31, 2016, compared with $9.8 million, or $0.32 per diluted share, for the quarter ended March 31, 2015.  Commenting on the Company's quarterly results, Edwin W. Hortman, Jr., the Company's President and Chief Executive Officer, said, "We are very pleased with our operating results and performance ratios that our outstanding bankers produced in the first quarter.  Even more encouraging is the positive momentum we see going into the second quarter of 2016 and the rest of the year.  Against the linked quarter, we saw growth in spread income and non-interest income and made progress on our efficiency initiatives.  Lastly, we completed our acquisition of Jacksonville Bancorp, Inc. late in the first quarter which pushed our total assets to approximately $6.1 billion."

Operating results for the first quarter exclude acquisition costs totaling $4.2 million after tax associated with the acquisition of Jacksonville Bancorp, Inc. ("JAXB").  Including these expenses, the Company reported net income of $12.3 million, or $0.37 per diluted share, for the first quarter of 2016.

Highlights of the Company's performance and results for the first quarter of 2016 include the following:

• Operating return on average assets of 1.18% and operating return on average tangible equity of 15.42% 
• Completion of the acquisition of JAXB, adding $561.4 million in total assets with virtually no dilution to tangible book value 
• Increase in tangible book value per share to $13.13, compared with $12.65 per share at December 31, 2015 
• Organic loan growth of $78.4 million, reflecting an annualized growth rate of 9.9% 
• Organic growth in non-interest bearing demand deposits of $70.9 million, reflecting an annualized growth rate of 21.4% 
• 5.0% increase in total recurring revenue to $78.8 million in the first quarter of 2016, compared with $75.0 million in the fourth quarter of 2015 
• $18.9 million, or 31.5%, increase in year-over-year revenue, compared to year-over-year growth in operating expenses (excluding merger costs) of $8.4 million, or 20.7% 
• Improvement in net interest margin to 4.03% from 3.98% in the fourth quarter of 2015 
• Decline in the Company's net overhead ratio, on an operating basis, from 2.12% in the fourth quarter of 2015 to 1.78% in the first quarter of 2016

Acquisition of JAXB
The Company successfully completed the acquisition of JAXB on March 11, 2016.  Highlights of the merger are as follows:

• Added $561.4 million in total assets and eight retail offices within the Jacksonville, Florida market 
• Added $401.1 million in loans and $401.4 million in total deposits 
• Issuance of a total of 2,549,469 shares of the Company's common stock at a fair value on the closing date of $72.5 million 
• $31.4 million in additional goodwill and $5.9 million in core deposit intangibles associated with the merger recorded by the Company 
• Including all merger costs, the addition of $0.02 per share to the Company's consolidated tangible book value 

The conversion of JAXB's systems to the Company's is scheduled to be completed during the second quarter of 2016, after which time management expects to realize most of the operating efficiencies from the acquisition.

Operating Results
Net income available to common shareholders in the first quarter of 2016 totaled $16.5 million, an increase of 68.3% over the same quarter in 2015.  Revenue during the first quarter totaled $78.8 million, an increase of 31.5% over the first quarter of 2015.  Increases in revenue resulted from the growth in earning assets over the prior year, as well as increased revenue from the Company's mortgage and SBA lines of business.  Returns on average assets and average tangible common equity, on an operating basis, were 1.18% and 15.33%, respectively, for the first quarter of 2016, compared with 0.97% and 10.40%, respectively, for the same quarter of 2015.  Operating results improved over the same period in 2015 due to consistently lower credit costs and the full deployment of excess liquidity in the last half of 2015. 

Net Interest Income and Net Interest Margin
Net interest income for the first quarter of 2016 totaled $50.4 million, an increase of $11.6 million, or 29.9%, compared with $38.8 million for the first quarter of 2015.  The Company's net interest margin increased during the quarter to 4.03%, compared with 3.98% during the fourth quarter of 2015, but declined from 4.39% for the first quarter of 2015.  Accretion income for the first quarter of 2016 remained unchanged from the fourth quarter of 2015 at $2.9 million, compared with $3.1 million reported for the first quarter of 2015.  Excluding the effect of accretion on purchased assets, the Company's net interest margin was 3.80% in the first quarter of 2016, compared with 3.74% in the fourth quarter of 2015 and 4.05% in the first quarter of 2015.  Declines in the margin relative to the same quarter in 2015 stem from the Company's investment of excess liquidity, primarily in government-backed bonds and whole-loan mortgage pools with combined average yields of 2.89%.

Yields on earning assets in the first quarter of 2016 were 4.36%, compared with 4.79% in the first quarter of 2015, reflecting the investment in whole-loan mortgage pools and additional investment securities.  Interest income on loans on a tax-equivalent basis increased during the first quarter of 2016 to $49.8 million, compared with $48.0 million in the fourth quarter of 2015 and $38.9 million in the first quarter of 2015.  Excluding accretion income, yields on all loans were 4.59% in the first quarter of 2016, reflecting a decline of 0.42% from the first quarter of 2015.  Excluding the effect of the purchased mortgage pools, the Company's loan yields declined by only 0.13% from the first quarter of 2015, reflecting success in the Company's pricing efforts on new and renewed credits in the current rate environment. 

Total interest expense for the first quarter of 2016 was $4.1 million, compared with $3.5 million for the same quarter of 2015.  Increases in total interest expense were driven primarily by increases in total deposits and other borrowings resulting from both acquisition activity and organic growth.  Deposit costs remained stable during the quarter, ending at 0.23%, which was consistent with levels reported in the fourth quarter of 2015, but lower than the 0.27% reported in the first quarter of 2015.  Continued improvement in the Company's mix of deposits, primarily toward non-interest bearing deposits, has allowed for more aggressive retention efforts on MMDA and CDs without negatively impacting overall deposit costs.  Non-interest bearing deposits were 27.9% of the total average deposits during the first quarter of 2016, compared with 26.2% for the first quarter of 2015.  Management does not expect deposit costs or overall funding costs to decrease materially in the coming quarters despite tightening liquidity ratios and stronger forecasts for asset growth.

Non-interest Income
Non-interest income in the first quarter of 2016 was $24.3 million, an increase of $6.7 million, or 38.2%, compared with the same quarter in 2015.  As a percentage of average assets, non-interest income increased from 1.72% in the first quarter of 2015 to 1.73% in the first quarter of 2016.

Service charges in the first quarter of 2016 were $9.9 million, an increase of $3.5 million, or 54.2%, compared with the same quarter in 2015.  Stronger growth in commercial and treasury management accounts contributed to the growth in income, as did growth in balances that resulted from the Company's acquisitions during the second quarter of 2015.  During the first quarter of 2016, the Company implemented several changes in service charge routines, mostly related to statement costs, which are expected to positively impact revenues in the second half of 2016 by approximately $2 million.

The Company's mortgage operations continued to make improvements in revenues and net income.  Revenue in the mortgage group totaled $14.0 million in the first quarter of 2016, an increase 36.4% compared with the same quarter in 2015.  Net income for the Company's retail mortgage division increased 54.7% during the first quarter of 2016 to $3.0 million, compared with $1.9 million in the first quarter of 2015.  Net income for the Company's warehouse lending division increased 22.8% during the quarter, from $592,000 in the first quarter of 2015 to $727,000 in the first quarter of 2016.  Total production in the first quarter of 2016 amounted to $268.6 million (85% retail and 15% wholesale), compared with $188.3 million in the same quarter of 2015 (83% retail and 17% wholesale).  Open pipelines finished the first quarter of 2016 at $161.5 million, compared with $94.5 million at the beginning of the first quarter of 2016 and $110.9 million at the end of the first quarter of 2015.  

Revenues from the Company's SBA division increased 43.6% during the first quarter of 2016 to $2.2 million, compared with $1.5 million during the first quarter of 2015.  Net income for the division increased 56.3%, from $533,000 for the first quarter of 2015 to $833,000 for the first quarter of 2016.  SBA pipelines totaled $49.4 million at the end of the first quarter, up $1.5 million compared with the same time in 2015.

Non-interest Expense
During the first quarter of 2016, the Company incurred merger and conversion charges of $6.4 million, before tax, compared with only de minimis amounts in the first quarter of 2015.  Excluding these charges, operating expenses decreased approximately $2.0 million, to $49.2 million, from $51.2 million in the fourth quarter of 2015.  

Operating expenses, excluding merger charges, as a percentage of average assets declined from 1.00% in the first quarter of 2015 to 0.88% in the first quarter of 2016.  The Company's net overhead ratio declined materially to 1.78% in the first quarter of 2016 from 2.12% in the first quarter of 2015.  Growth in non-interest income covered 79.6% of the incremental growth in operating expenses, which have been positively affected by the previously announced branch closings and the full integration of the Company's two most recent acquisitions. 

Salaries and benefits increased by $0.2 million to $26.2 million in the current quarter of 2016, compared with $26.0 million in the fourth quarter of 2015.  Growth in salaries and benefits over the same quarter of 2015 totaled $5.6 million, or 27%, and was driven by a 38% increase in average assets over the same period.

Occupancy and equipment expenses decreased $217,000, from $5.9 million in the fourth quarter of 2015 to $5.7 million in the first quarter of 2016, due principally to lower levels of repairs and maintenance, as well as lower levels of depreciation expense. 

Total credit costs (provision and non-provision credit resolution-related costs) totaled $2.5 million in the first quarter of 2016, compared with $4.2 million in the same quarter in 2015 and $2.8 million in the fourth quarter of 2015. 

Data processing and telecommunications costs increased to $6.1 million in the first quarter of 2016, an increase of 43.5%, or $1.9 million, compared with the first quarter of 2015.  Account acquisition, both organic and through acquisition activity, has increased substantially in the last twelve months.

Balance Sheet Trends
Total assets at March 31, 2016 were $6.10 billion, compared with $5.59 billion at December 31, 2015.  The growth in total assets was driven by the acquisition of JAXB during the quarter.  

Loans, including loans held for sale, totaled $4.54 billion at March 31, 2016, compared with $4.02 billion at December 31, 2015.  During the quarter, growth in legacy loans (total loans less mortgage loans held for sale, purchased non-covered loans, purchased non-covered loan pools and covered loans) amounted to $121.1 million, or 20.1% on an annualized basis.  Loans held for sale decreased 12.4% from December 31, 2015 to $97.4 million.  Purchased, non-covered loans increased $358.4 million, or 46.4% during the quarter, primarily due to the JAXB acquisition.  Purchased non-covered loan pools were $656.7 million at March 31, 2016, compared with $593.3 million at December 31, 2015.  Covered loans declined $7.3 million, or 5.33%, during the first quarter, to $130.3 million at March 31, 2016, representing the slowing of payoffs in that portfolio.

Investment securities at the end of the first quarter of 2016 were $837.1 million, or 15.3% of earning assets, compared with $783.2 million, or 15.4% of earning assets, at December 31, 2015.  

Deposits increased $351.5 million during the first quarter of 2016 to end the quarter at $5.23 billion.  At March 31, 2016, non-interest bearing deposit accounts were $1.53 billion, or 29.2% of total deposits, compared with $1.33 billion and 27.3%, respectively, at December 31, 2015.  Non-rate sensitive deposits (including NIB, NOW and savings) totaled $2.81 billion at March 31, 2016, compared with $2.71 billion at the end of 2015.  These funds represented 53.5% of the Company's total deposits at March 31, 2016, compared with 55.6% at the end of 2015.

Stockholders' equity at March 31, 2016 totaled $600.8 million, compared with $514.8 million at December 31, 2015.  The increase in stockholders' equity was the result of the issuance of shares of common stock in the JAXB acquisition, plus earnings of $12.3 million during the quarter.  Tangible book value per share at March 31, 2016 was $13.13 per share, up 3.8% from $12.65 per share at the end of 2015.  Tangible common equity as a percentage of tangible assets increased to 7.68% at the end of the first quarter of 2016, compared with 7.44% at the end of 2015.