Ameris Bancorp 10Q 2024 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM			10-Q

(Mark One)


			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number:			001-13901


AMERIS BANCORP
(Exact name of registrant as specified in its charter)


Georgia			58-1456434
(State of incorporation)			(IRS Employer ID No.)


3490 Piedmont Rd N.E., Suite 1550
Atlanta	Georgia	30305
(Address of principal executive offices)


(404)			639-6500
(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1 per share	ABCB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	ý	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

There were 69,066,730 shares of Common Stock outstanding as of November 4, 2024.

AMERIS BANCORP

TABLE OF CONTENTS


		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	1

	Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended Se ptember 30, 2024 and 2023 (unaudited)	2

	Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	3

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (unaudited)	5

	Notes to Unaudited Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	38

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	59

Item 4.	Controls and Procedures.	60

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	61

Item 1A.	Risk Factors.	61

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	61

Item 3.	Defaults Upon Senior Securities.	61

Item 4.	Mine Safety Disclosures.	61

Item 5.	Other Information.	62

Item 6.	Exhibits.	63

Signatures		64

Item 1. Financial Statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets

(dollars in thousands, except per share data)


	September 30, 2024 (unaudited)		December 31, 2023
Assets
Cash and due from banks	$	231,515	$	230,470
Interest-bearing deposits in banks	1,127,641		936,834
Cash and cash equivalents	1,359,156		1,167,304


Debt securities available-for-sale, at fair value, net of allowance for credit losses of $66 and $69	1,441,552		1,402,944
Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $145,714 and $122,731)	161,220		141,512
Other investments	63,899		71,794
Loans held for sale, at fair value	553,379		281,332

Loans, net of unearned income	20,964,981		20,269,303
Allowance for credit losses	(334,457)		(307,100)
Loans, net	20,630,524		19,962,203

Other real estate owned, net	9,482		6,199
Premises and equipment, net	210,931		216,435
Goodwill	1,015,646		1,015,646
Other intangible assets, net	74,941		87,949
Cash value of bank owned life insurance	460,699		395,778

Other assets	418,353		454,603
Total assets	$	26,399,782	$	25,203,699

Liabilities
Deposits:
Noninterest-bearing	$	6,670,320	$	6,491,639
Interest-bearing	15,208,945		14,216,870
Total deposits	21,879,265		20,708,509

Other borrowings	346,446		509,586
Subordinated deferrable interest debentures	131,811		130,315
Other liabilities	360,892		428,542
Total liabilities	22,718,414		21,776,952

Commitments and Contingencies (Note 8)

Shareholders’ Equity
Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, par value $1; 200,000,000 shares authorized; 72,697,655 and 72,516,079 shares issued, respectively	72,698		72,516
Capital surplus	1,954,532		1,945,385
Retained earnings	1,772,989		1,539,957
Accumulated other comprehensive loss, net of tax	(15,724)		(35,939)
Treasury stock, at cost, 3,630,636 and 3,462,738 shares, respectively	(103,127)		(95,172)
Total shareholders’ equity	3,681,368		3,426,747
Total liabilities and shareholders’ equity	$	26,399,782	$	25,203,699

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income (unaudited)

(dollars in thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Interest income
Interest and fees on loans	$	325,622	$	304,699	$	946,679	$	868,675
Interest on taxable securities	15,555		14,754		45,595		44,969
Interest on nontaxable securities	336		331		1,001		1,009
Interest on deposits in other banks and federal funds sold	13,633		10,769		38,646		33,568
Total interest income	355,146		330,553		1,031,921		948,221

Interest expense
Interest on deposits	129,698		102,999		369,117		244,268
Interest on other borrowings	11,388		19,803		35,435		75,010
Total interest expense	141,086		122,802		404,552		319,278

Net interest income	214,060		207,751		627,369		628,943
Provision for loan losses	6,313		30,095		57,184		123,114
Provision for unfunded commitments	(204)		(5,634)		(11,196)		(3,415)
Provision for other credit losses	(2)		(2)		(3)		5
Provision for credit losses	6,107		24,459		45,985		119,704
Net interest income after provision for credit losses	207,953		183,292		581,384		509,239

Noninterest income
Service charges on deposit accounts	12,918		12,092		37,349		34,323
Mortgage banking activity	37,947		36,290		123,776		108,424
Other service charges, commissions and fees	1,163		1,221		3,576		3,167
Net gain (loss) on securities	(8)		(16)		12,320		(16)
Other noninterest income	17,689		13,594		47,277		40,682
Total noninterest income	69,709		63,181		224,298		186,580

Noninterest expense
Salaries and employee benefits	88,700		81,898		259,831		244,144
Occupancy and equipment	11,716		12,745		37,160		38,253
Data processing and communications expenses	15,221		12,973		45,068		39,458
Credit resolution-related expenses	(110)		(1,360)		1,216		(77)
Advertising and marketing	4,089		2,723		10,205		8,882
Amortization of intangible assets	4,180		4,425		13,009		13,819

Loan servicing expense	8,626		9,290		27,857		26,392
Other noninterest expenses	19,355		18,752		61,499		58,399
Total noninterest expense	151,777		141,446		455,845		429,270

Income before income tax expense	125,885		105,027		349,837		266,549
Income tax expense	26,673		24,912		85,528		63,378
Net income	99,212		80,115		264,309		203,171

Other comprehensive income (loss)
Net unrealized holding gains (losses) arising during period on debt securities available-for-sale, net of tax expense (benefit) of $7,427, $(3,472), $6,710 and $(4,871)	22,296		(10,200)		20,215		(14,311)



Total other comprehensive income (loss)	22,296		(10,200)		20,215		(14,311)
Comprehensive income	$	121,508	$	69,915	$	284,524	$	188,860

Basic earnings per common share	$	1.44	$	1.16	$	3.84	$	2.94
Diluted earnings per common share	$	1.44	$	1.16	$	3.83	$	2.94
Weighted average common shares outstanding
Basic	68,798,093		68,879,352		68,811,727		69,023,201
Diluted	69,066,298		68,994,247		69,031,666		69,129,921

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity (unaudited)

(dollars in thousands)


	Three Months Ended September 30, 2024

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, June 30, 2024	72,697,209	$	72,697	$	1,950,846	$	1,684,218	$	(38,020)	3,630,636	$	(103,127)	$	3,566,614

Issuance of restricted shares	2,559	3		(3)		—		—		—	—		—
Forfeitures of restricted shares	(2,113)	(2)		(41)		—		—		—	—		(43)


Share-based compensation	—	—		3,730		—		—		—	—		3,730
Purchase of treasury shares	—	—		—		—		—		—	—		—
Net income	—	—		—		99,212		—		—	—		99,212
Dividends on common shares ($0.15 per share)	—	—		—		(10,441)		—		—	—		(10,441)


Other comprehensive income during the period	—	—		—		—		22,296		—	—		22,296
Balance, September 30, 2024	72,697,655	$	72,698	$	1,954,532	$	1,772,989	$	(15,724)	3,630,636	$	(103,127)	$	3,681,368


	Nine Months Ended September 30, 2024

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, December 31, 2023	72,516,079	$	72,516	$	1,945,385	$	1,539,957	$	(35,939)	3,462,738	$	(95,172)	$	3,426,747

Issuance of restricted shares	128,391	129		(129)		—		—		—	—		—
Issuance of common shares pursuant to PSU agreements	63,301	63		(63)		—		—		—	—		—
Forfeitures of restricted shares	(10,116)	(10)		(214)		—		—		—	—		(224)

Share-based compensation	—	—		9,553		—		—		—	—		9,553
Purchase of treasury shares	—	—		—		—		—		167,898	(7,955)		(7,955)
Net income	—	—		—		264,309		—		—	—		264,309
Dividends on common shares ($0.45 per share)	—	—		—		(31,277)		—		—	—		(31,277)

Other comprehensive income during the period	—	—		—		—		20,215		—	—		20,215
Balance, September 30, 2024	72,697,655	$	72,698	$	1,954,532	$	1,772,989	$	(15,724)	3,630,636	$	(103,127)	$	3,681,368


	Three Months Ended September 30, 2023

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, June 30, 2023	72,514,630	$	72,515	$	1,939,865	$	1,414,742	$	(50,618)	3,374,847	$	(91,874)	$	3,284,630


Issuance of restricted shares	1,500	2		(2)		—		—		—	—		—
Forfeitures of restricted shares	(2,083)	(3)		(30)		—		—		—	—		(33)

Share-based compensation	—	—		3,019		—		—		—	—		3,019
Purchase of treasury shares	—	—		—		—		—		739	(29)		(29)
Net income	—	—		—		80,115		—		—	—		80,115
Dividends on common shares ($0.15 per share)	—	—		—		(10,433)		—		—	—		(10,433)

Other comprehensive loss during the period	—	—		—		—		(10,200)		—	—		(10,200)
Balance, September 30, 2023	72,514,047	$	72,514	$	1,942,852	$	1,484,424	$	(60,818)	3,375,586	$	(91,903)	$	3,347,069


	Nine Months Ended September 30, 2023

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, December 31, 2022	72,263,727	$	72,264	$	1,935,211	$	1,311,258	$	(46,507)	2,894,677	$	(74,826)	$	3,197,400

Issuance of restricted shares	133,430	134		(134)		—		—		—	—		—
Issuance of common shares pursuant to PSU agreements	102,973	103		(103)		—		—		—	—		—
Forfeitures of restricted shares	(2,083)	(3)		(30)		—		—		—	—		(33)
Proceeds from exercise of stock options	16,000	16		460		—		—		—	—		476
Share-based compensation	—	—		7,448		—		—		—	—		7,448
Purchase of treasury shares	—	—		—		—		—		480,909	(17,077)		(17,077)
Net income	—	—		—		203,171		—		—	—		203,171
Dividends on common shares ($0.45 per share)	—	—		—		(31,282)		—		—	—		(31,282)
Cumulative effect of change in accounting for credit losses	—	—		—		1,277		—		—	—		1,277
Other comprehensive loss during the period	—	—		—		—		(14,311)		—	—		(14,311)
Balance, September 30, 2023	72,514,047	$	72,514	$	1,942,852	$	1,484,424	$	(60,818)	3,375,586	$	(91,903)	$	3,347,069

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


	Nine Months Ended September 30,
	2024		2023
Operating Activities
Net income	$	264,309	$	203,171
Adjustments reconciling net income to net cash (used in) provided by operating activities:
Depreciation	14,343		14,260
Net losses on sale or disposal of premises and equipment	31		97

Provision for credit losses	45,985		119,704
Net write-downs and (gains) losses on sale of other real estate owned	(20)		(1,597)
Share-based compensation expense	9,329		7,415
Amortization of intangible assets	13,009		13,819
Amortization of operating lease right of use assets	7,588		8,440
Provision for deferred taxes	(23,459)		(13,382)
Net accretion of debt securities available-for-sale	(3,126)		(4,316)
Net accretion of debt securities held-to-maturity	(130)		(136)
Net amortization of other investments	825		1,108
Net (gain) loss on securities	(12,320)		16
Net amortization (accretion) of fair value marks on purchased loans	1,063		(1,361)
Net amortization on other borrowings	206		774
Amortization of subordinated deferrable interest debentures	1,496		1,495

Originations of mortgage loans held for sale	(3,237,612)		(2,818,898)
Payments received on mortgage loans held for sale	12,720		11,806
Proceeds from sales of mortgage loans held for sale	2,980,551		2,802,956
Net (gains) losses on mortgage loans held for sale	(43,062)		4,447
Originations of SBA loans	(5,823)		(24,252)
Proceeds from sales of SBA loans	5,690		27,129
Net gains on sale of SBA loans	(468)		(1,382)
Increase in cash surrender value of bank owned life insurance	(8,516)		(6,768)
Gain on bank owned life insurance proceeds	(1,464)		(486)


Gain on sale of mortgage servicing rights	(9,958)		—
Gain on debt redemption	(169)		(1,148)
Change attributable to other operating activities	12,672		13,157
Net cash provided by operating activities	23,690		356,068

Investing Activities

Purchases of debt securities available-for-sale	(423,932)		(500)
Purchases of debt securities held-to-maturity	(22,206)		(8,543)
Proceeds from maturities and paydowns of debt securities available-for-sale	413,553		61,394
Proceeds from sales of debt securities available-for-sale	—		216
Proceeds from maturities and paydowns of debt securities held-to-maturity	2,628		1,684
Net decrease in other investments	19,390		4,911
Net increase in loans	(815,879)		(400,486)
Purchases of premises and equipment	(9,120)		(11,680)
Proceeds from sale of premises and equipment	250		42
Proceeds from sales of other real estate owned	7,503		8,756
Proceeds from sale of mortgage servicing rights	82,328		—
Purchases of bank owned life insurance	(110,000)		—
Proceeds from bank owned life insurance	55,059		1,890



Net cash used in investing activities	(800,426)		(342,316)

			(Continued)

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


	Nine Months Ended September 30,
	2024		2023
Financing Activities
Net increase in deposits	$	1,170,756	$	1,127,607

Proceeds from other borrowings	4,443,000		13,837,000
Repayment of other borrowings	(4,606,177)		(14,502,809)


Proceeds from exercise of stock options	—		476
Dividends paid - common stock	(31,140)		(31,308)
Purchase of treasury shares	(7,851)		(17,077)
Net cash provided by financing activities	968,588		413,889

Net increase in cash and cash equivalents	191,852		427,641
Cash and cash equivalents at beginning of period	1,167,304		1,118,132
Cash and cash equivalents at end of period	$	1,359,156	$	1,545,773

Supplemental Disclosures of Cash Flow Information
Cash paid (received) during the period for:
Interest	$	408,323	$	290,972
Income taxes	97,574		88,353
Loans transferred to other real estate owned	10,766		9,713
Loans transferred from loans held for sale to loans held for investment	15,957		8,806




Right-of-use assets obtained in exchange for new operating lease liabilities	2,470		2,678




Change in unrealized loss on securities available-for-sale, net of tax	20,215		(14,311)



			(Concluded)

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

September 30, 2024

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Nature of Business

Ameris Bancorp (the “Company” or “Ameris”) is a financial holding company headquartered in Atlanta, Georgia. Ameris conducts substantially all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At September 30, 2024, the Bank operated 164 branches in select markets in Georgia, Alabama, Florida, North Carolina and South Carolina. Our business model capitalizes on the efficiencies of a large financial services company, while still providing the community with the personalized banking service expected by our customers. We manage our Bank through a balance of decentralized management responsibilities and efficient centralized operating systems, products and loan underwriting standards. The Company’s Board of Directors and senior managers establish corporate policy, strategy and administrative policies. Within our established guidelines and policies, the banker closest to the customer responds to the differing needs and demands of his or her unique market.

Basis of Presentation

The accompanying unaudited consolidated financial statements for Ameris have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statement presentation. The interim consolidated financial statements included herein are unaudited but reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

In preparing the consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits in banks and federal funds sold.

Reclassifications

Certain reclassifications of prior year amounts have been made to conform with the current year presentations. The reclassifications had no effect on net income or shareholders' equity as previously reported.

Accounting Standards Adopted in 2024

ASU 2023-02 - Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method ("ASU 2023-02"). ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credit. Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures. The Company adopted ASU 2023-02 on January 1, 2024 and adoption did not have a significant impact on the Company's financial position or results of operations.

ASU No. 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 enhances segment disclosures by requiring inclusion of significant segment expenses, disclosure of the amount and composition of other segment items, previous annual disclosures in interim periods and identification of the position and title of the chief operating decision maker. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this standard effective January 1, 2024 and adoption did not have a significant impact on the Company's financial position or results of operations. The adoption will enhance disclosures of reporting segments beginning with the Company's Annual Report on Form 10-K and will be applied on a retrospective basis.

Accounting Standards Pending Adoption

ASU No. 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU No. 2023-09 provides for enhanced income tax disclosures by, among other things, requiring specific breakout of certain categories in the reconciliation of statutory income tax rate to effective rate, establishing a quantitative threshold for further breakout of reconciling items exceeding the threshold and not already required to be separately disclosed, requiring a qualitative description of the state and local jurisdictions making up the majority (greater than 50%) of the effect of state and local income taxes category, and provide further disaggregation of income taxes paid (net of refunds received) by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the guidance and it is not expected to have a significant impact on the Company's financial position or results of operations but will increase disclosures of income taxes.

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and estimated fair value of securities available-for-sale along with gross unrealized gains and losses are summarized as follows:


(dollars in thousands) Securities available-for-sale	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
September 30, 2024
U.S. Treasuries	$	631,992	$	—	$	2,746	$	(4,067)	$	630,671
U.S. government-sponsored agencies	1,013		—		—		(18)		995
State, county and municipal securities	26,652		—		23		(746)		25,929
Corporate debt securities	10,946		(66)		10		(664)		10,226
SBA pool securities	75,276		—		2		(1,086)		74,192
Mortgage-backed securities	713,439		—		3,948		(17,848)		699,539
Total debt securities available-for-sale	$	1,459,318	$	(66)	$	6,729	$	(24,429)	$	1,441,552

December 31, 2023
U.S. Treasuries	$	732,636	$	—	$	34	$	(11,793)	$	720,877
U.S. government-sponsored agencies	1,023		—		—		(38)		985
State, county and municipal securities	28,986		—		9		(944)		28,051
Corporate debt securities	10,946		(69)		—		(850)		10,027
SBA pool securities	53,033		—		2		(1,519)		51,516
Mortgage-backed securities	621,013		—		67		(29,592)		591,488
Total debt securities available-for-sale	$	1,447,637	$	(69)	$	112	$	(44,736)	$	1,402,944

The amortized cost and estimated fair value of securities held-to-maturity along with gross unrealized gains and losses are summarized as follows:


(dollars in thousands) Securities held-to-maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
September 30, 2024


State, county and municipal securities	$	33,648	$	—	$	(4,907)	$	28,741


Mortgage-backed securities	127,572		384		(10,983)		116,973
Total debt securities held-to-maturity	$	161,220	$	384	$	(15,890)	$	145,714



December 31, 2023


State, county and municipal securities	$	31,905	$	—	$	(5,051)	$	26,854


Mortgage-backed securities	109,607		—		(13,730)		95,877
Total debt securities held-to-maturity	$	141,512	$	—	$	(18,781)	$	122,731

The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity as of September 30, 2024, by contractual maturity are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying these securities may be called or repaid without penalty. Therefore, these securities are not included in the maturity categories in the following maturity summary:


	Available-for-Sale				Held-to-Maturity
(dollars in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	282,084	$	279,670	$	—	$	—
Due from one year to five years	382,895		383,492		—		—
Due from five to ten years	69,328		68,345		—		—
Due after ten years	11,572		10,506		33,648		28,741
Mortgage-backed securities	713,439		699,539		127,572		116,973
	$	1,459,318	$	1,441,552	$	161,220	$	145,714

Securities with a carrying value of approximately $459.1 million and $532.6 million at September 30, 2024 and December 31, 2023, respectively, serve as collateral to secure public deposits and for other purposes required or permitted by law.

The following table shows the gross unrealized losses and estimated fair value of available-for-sale securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at September 30, 2024 and December 31, 2023:


	Less Than 12 Months				12 Months or More				Total
(dollars in thousands) Securities available-for-sale	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
September 30, 2024
U.S. Treasuries	$	—	$	—	$	352,918	$	(4,067)	$	352,918	$	(4,067)
U.S. government-sponsored agencies	—		—		995		(18)		995		(18)
State, county and municipal securities	—		—		17,090		(746)		17,090		(746)
Corporate debt securities	—		—		8,320		(664)		8,320		(664)
SBA pool securities	55,570		(117)		18,478		(969)		74,048		(1,086)
Mortgage-backed securities	22,153		(50)		505,263		(17,798)		527,416		(17,848)
Total debt securities available-for-sale	$	77,723	$	(167)	$	903,064	$	(24,262)	$	980,787	$	(24,429)

December 31, 2023
U.S. Treasuries	$	159,667	$	(827)	$	537,313	$	(10,966)	$	696,980	$	(11,793)
U.S. government sponsored agencies	—		—		985		(38)		985		(38)
State, county and municipal securities	1,923		—		19,754		(944)		21,677		(944)
Corporate debt securities	500		—		8,527		(850)		9,027		(850)
SBA pool securities	42		—		21,267		(1,519)		21,309		(1,519)
Mortgage-backed securities	126		—		566,707		(29,592)		566,833		(29,592)
Total debt securities available-for-sale	$	162,258	$	(827)	$	1,154,553	$	(43,909)	$	1,316,811	$	(44,736)

As of September 30, 2024, the Company’s available-for-sale security portfolio consisted of 404 securities, 360 of which were in an unrealized loss position. At September 30, 2024, the Company held 293 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. At September 30, 2024, the Company held 33 U.S. Small Business Administration (“SBA”) pool securities, 16 state, county and municipal securities, five corporate securities, one U.S. government-sponsored agency security, and 12 U.S. Treasury securities that were in an unrealized loss position.

The following table shows the gross unrealized losses and estimated fair value of held-to-maturity securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at September 30, 2024 and December 31, 2023:


	Less Than 12 Months				12 Months or More				Total
(dollars in thousands) Securities held-to-maturity	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
September 30, 2024

State, county and municipal securities	$	1,753	$	(2)	$	26,988	$	(4,905)	$	28,741	$	(4,907)


Mortgage-backed securities	3,315		(57)		82,422		(10,926)		85,737		(10,983)
Total debt securities held-to-maturity	$	5,068	$	(59)	$	109,410	$	(15,831)	$	114,478	$	(15,890)

December 31, 2023

State, county and municipal securities	$	—	$	—	$	26,854	$	(5,051)	$	26,854	$	(5,051)


Mortgage-backed securities	13,612		(227)		82,265		(13,503)		95,877		(13,730)
Total debt securities held-to-maturity	$	13,612	$	(227)	$	109,119	$	(18,554)	$	122,731	$	(18,781)

As of September 30, 2024, the Company’s held-to-maturity security portfolio consisted of 35 securities, 28 of which were in an unrealized loss position. At September 30, 2024, the Company held 20 mortgage-backed securities and eight state, county and municipal securities that were in an unrealized loss position.

At September 30, 2024 and December 31, 2023, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.

Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. The Company does not intend to sell these available-for-sale investment securities at an unrealized loss position at September 30, 2024, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at September 30, 2024, management determined that $66,000 was attributable to credit impairment and an allowance for credit losses was recorded. The remaining $24.4 million in unrealized loss was determined to be from factors other than credit.


(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Allowance for credit losses	2024		2023		2024		2023
Beginning balance	$	68	$	82	$	69	$	75
Provision for other credit losses	(2)		(2)		(3)		5
Ending balance	$	66	$	80	$	66	$	80

The Company's held-to-maturity securities have no expected credit losses, and no related allowance for credit losses has been established.

The following table is a summary of sales activities in the Company's debt securities available for sale for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2024		2023		2024		2023
Gross gains on sales of securities	$	—	$	—	$	—	$	—
Gross losses on sales of securities	—		—		—		—
Net realized gains (losses) on sales of debt securities available for sale	$	—	$	—	$	—	$	—

Sales proceeds	$	—	$	216	$	—	$	216

Total net gain (loss) on securities reported on the consolidated statements of income and comprehensive income is comprised of the following for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2024		2023		2024		2023

Unrealized holding gains (losses) on equity securities	$	(3,945)	$	(16)	$	6	$	(16)
Net realized gains on sales of other investments	3,937		—		12,314		—
Net gain (loss) on securities	$	(8)	$	(16)	$	12,320	$	(16)

NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table:


(dollars in thousands)	September 30, 2024		December 31, 2023
Commercial, financial and agricultural	$	2,949,957	$	2,688,929
Consumer	210,310		241,552
Indirect automobile	10,891		34,257
Mortgage warehouse	985,910		818,728
Municipal	449,561		492,668
Premium finance	1,246,452		946,562
Real estate – construction and development	2,232,114		2,129,187
Real estate – commercial and farmland	8,249,981		8,059,754
Real estate – residential	4,629,805		4,857,666
	$	20,964,981	$	20,269,303

Accrued interest receivable on loans is reported in other assets on the consolidated balance sheets totaling $78.2 million and $79.2 million and at September 30, 2024 and December 31, 2023, respectively. The Company had no recorded allowance for credit losses related to accrued interest on loans at both September 30, 2024 and December 31, 2023.

Nonaccrual and Past-Due Loans

A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest, or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment, approved by the Company’s Chief Credit Officer. Past-due loans are loans whose principal or interest is past due 30 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

The following table presents an analysis of loans accounted for on a nonaccrual basis:


(dollars in thousands)	September 30, 2024		December 31, 2023
Commercial, financial and agricultural	$	13,869	$	8,059
Consumer	743		1,153
Indirect automobile	186		299



Real estate – construction and development	3,908		282
Real estate – commercial and farmland	13,020		11,295
Real estate – residential(1)	63,781		130,029
	$	95,507	$	151,117

(1) Included in real estate - residential were $8.2 million and $90.2 million of serviced GNMA-guaranteed nonaccrual loans at September 30, 2024 and December 31, 2023, respectively.

Interest income recognized on nonaccrual loans during the nine months ended September 30, 2024 and 2023 was not material.

The following table presents an analysis of nonaccrual loans with no related allowance for credit losses:


(dollars in thousands)	September 30, 2024		December 31, 2023
Commercial, financial and agricultural	$	3,660	$	2,049





Real estate – construction and development	2,945		—
Real estate – commercial and farmland	9,836		9,109
Real estate – residential	30,277		75,419
	$	46,718	$	86,577

The following table presents an analysis of past-due loans as of September 30, 2024 and December 31, 2023:


(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Loans Past Due		Current Loans		Total Loans		Loans 90 Days or More Past Due and Still Accruing
September 30, 2024
Commercial, financial and agricultural	$	20,313	$	6,299	$	8,907	$	35,519	$	2,914,438	$	2,949,957	$	4,732
Consumer	1,911		512		366		2,789		207,521		210,310		—
Indirect automobile	51		24		51		126		10,765		10,891		—
Mortgage warehouse	—		—		—		—		985,910		985,910		—
Municipal	—		—		—		—		449,561		449,561		—
Premium finance	13,246		5,880		7,502		26,628		1,219,824		1,246,452		7,502
Real estate – construction and development	10,411		3,687		584		14,682		2,217,432		2,232,114		—
Real estate – commercial and farmland	4,514		3,133		7,562		15,209		8,234,772		8,249,981		—
Real estate – residential	46,039		14,823		60,788		121,650		4,508,155		4,629,805		—
Total	$	96,485	$	34,358	$	85,760	$	216,603	$	20,748,378	$	20,964,981	$	12,234

December 31, 2023
Commercial, financial and agricultural	$	11,023	$	5,439	$	9,733	$	26,195	$	2,662,734	$	2,688,929	$	5,310
Consumer	2,155		1,037		498		3,690		237,862		241,552		—
Indirect automobile	153		17		78		248		34,009		34,257		—
Mortgage warehouse	—		—		—		—		818,728		818,728		—
Municipal	—		—		—		—		492,668		492,668		—
Premium finance	12,379		6,832		11,678		30,889		915,673		946,562		11,678
Real estate – construction and development	2,094		—		282		2,376		2,126,811		2,129,187		—
Real estate – commercial and farmland	5,070		1,656		6,352		13,078		8,046,676		8,059,754		—
Real estate – residential	49,976		19,300		127,087		196,363		4,661,303		4,857,666		—
Total	$	82,850	$	34,281	$	155,708	$	272,839	$	19,996,464	$	20,269,303	$	16,988

Collateral-Dependent Loans

Collateral-dependent loans are loans where repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. If the Company determines that foreclosure is probable, these loans are written down to the lower of cost or fair value of the collateral less estimated costs to sell. When repayment is expected to be from the operation of the collateral, the allowance for credit losses is calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the allowance for credit loss as the amount by which the amortized cost basis of the financial asset exceeds the estimated fair value of the collateral.

The following table presents an analysis of individually evaluated collateral-dependent financial assets and related allowance for credit losses:


	September 30, 2024				December 31, 2023
(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses
Commercial, financial and agricultural	$	19,940	$	3,130	$	5,889	$	567




Premium finance	—		—		1,990		45
Real estate – construction and development	—		—		280		23
Real estate – commercial and farmland	14,665		218		11,114		108
Real estate – residential	16,283		2,008		21,102		2,654
	$	50,888	$	5,356	$	40,375	$	3,397

Credit Quality Indicators

The Company uses a five category risk grading system to assign a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades:

Pass – These loans range from minimal to acceptable credit risk to the Company based on factors including creditworthiness of the borrower, current performance and nature of the collateral.

Other Assets Especially Mentioned ("Special Mention") – This grade includes loans that exhibit potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

Substandard – This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

Doubtful – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

Loss – This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

The following tables present the loan portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands) as of September 30, 2024 and December 31, 2023. Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the tables below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded doubtful or loss at September 30, 2024 or December 31, 2023.


As of September 30, 2024	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2024		2023		2022		2021		2020		Prior				Total

Commercial, Financial and Agricultural
Risk Grade:
Pass	$	771,180	$	653,260	$	599,054	$	284,292	$	85,784	$	56,473	$	460,002		$	2,910,045
Special mention	5		127		1,825		1,315		725		3,241		2,784			10,022
Substandard	231		2,302		3,600		8,907		824		5,337		8,689			29,890


Total commercial, financial and agricultural	$	771,416	$	655,689	$	604,479	$	294,514	$	87,333	$	65,051	$	471,475		$	2,949,957

Current-period gross charge offs	286		15,849		15,380		6,699		1,178		758		—			40,150
Consumer
Risk Grade:
Pass	$	44,222	$	21,803	$	10,610	$	3,046	$	19,194	$	27,710	$	82,381		$	208,966
Special mention	5		—		15		—		—		39		—			59
Substandard	137		253		105		34		190		439		127			1,285


Total consumer	$	44,364	$	22,056	$	10,730	$	3,080	$	19,384	$	28,188	$	82,508		$	210,310

Current-period gross charge offs	113		514		210		38		682		1,081		198			2,836
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	10,625	$	—		$	10,625
Special mention	—		—		—		—		—		26		—			26
Substandard	—		—		—		—		—		240		—			240


Total indirect automobile	$	—	$	—	$	—	$	—	$	—	$	10,891	$	—		$	10,891

Current-period gross charge offs	—		—		—		—		—		138		—			138
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	976,092		$	976,092
Special mention	—		—		—		—		—		—		9,818			9,818



Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	985,910		$	985,910

Current-period gross charge offs	—		—		—		—		—		—		—			—
Municipal
Risk Grade:
Pass	$	20,566	$	9,227	$	44,890	$	36,746	$	140,694	$	196,616	$	822		$	449,561




Total municipal	$	20,566	$	9,227	$	44,890	$	36,746	$	140,694	$	196,616	$	822		$	449,561

Current-period gross charge offs	—		—		—		—		—		—		—			—
Premium Finance
Risk Grade:
Pass	$	1,217,918	$	20,616	$	213	$	203	$	—	$	—	$	—		$	1,238,950

Substandard	5,245		2,257		—		—		—		—		—			7,502


Total premium finance	$	1,223,163	$	22,873	$	213	$	203	$	—	$	—	$	—		$	1,246,452

Current-period gross charge offs	742		5,923		245		—		—		—		—			6,910


As of September 30, 2024	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2024		2023		2022		2021		2020		Prior				Total

Real Estate – Construction and Development
Risk Grade:
Pass	$	413,449	$	289,316	$	1,025,891	$	323,413	$	4,550	$	91,834	$	74,078		$	2,222,531
Special mention	3,159		1,643		—		66		—		317		—			5,185
Substandard	50		79		3,374		367		—		528		—			4,398


Total real estate – construction and development	$	416,658	$	291,038	$	1,029,265	$	323,846	$	4,550	$	92,679	$	74,078		$	2,232,114

Current-period gross charge offs	—		—		—		—		—		—		—			—
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	166,867	$	457,998	$	2,191,571	$	2,197,460	$	1,062,050	$	1,935,670	$	94,477		$	8,106,093
Special mention	—		1,360		35		756		15,471		76,613		—			94,235
Substandard	—		1,122		17,322		13,878		3,402		13,929		—			49,653


Total real estate – commercial and farmland	$	166,867	$	460,480	$	2,208,928	$	2,212,094	$	1,080,923	$	2,026,212	$	94,477		$	8,249,981

Current-period gross charge offs	—		513		—		—		—		58		—			571
Real Estate - Residential
Risk Grade:
Pass	$	164,123	$	649,299	$	1,320,707	$	1,071,834	$	473,748	$	587,155	$	286,613		$	4,553,479
Special mention	—		11		53		763		596		1,962		1,749			5,134
Substandard	1,299		5,576		13,312		11,056		9,110		23,432		7,407			71,192


Total real estate - residential	$	165,422	$	654,886	$	1,334,072	$	1,083,653	$	483,454	$	612,549	$	295,769		$	4,629,805

Current-period gross charge offs	—		24		20		—		—		5		—			49
Total Loans
Risk Grade:
Pass	$	2,798,325	$	2,101,519	$	5,192,936	$	3,916,994	$	1,786,020	$	2,906,083	$	1,974,465		$	20,676,342
Special mention	3,169		3,141		1,928		2,900		16,792		82,198		14,351			124,479
Substandard	6,962		11,589		37,713		34,242		13,526		43,905		16,223			164,160


Total loans	$	2,808,456	$	2,116,249	$	5,232,577	$	3,954,136	$	1,816,338	$	3,032,186	$	2,005,039		$	20,964,981
Total current-period gross charge offs	1,141		22,823		15,855		6,737		1,860		2,040		198			50,654


As of December 31, 2023	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2023		2022		2021		2020		2019		Prior				Total

Commercial, Financial and Agricultural
Risk Grade:
Pass	$	892,951	$	758,471	$	384,830	$	95,055	$	56,447	$	41,095	$	432,472		$	2,661,321
Special mention	—		335		5,722		92		109		451		803			7,512
Substandard	1,512		3,595		3,222		1,140		3,533		5,748		1,346			20,096


Total commercial, financial and agricultural	$	894,463	$	762,401	$	393,774	$	96,287	$	60,089	$	47,294	$	434,621		$	2,688,929

Consumer
Risk Grade:
Pass	$	44,736	$	17,661	$	5,878	$	25,654	$	15,838	$	20,937	$	109,214		$	239,918
Special mention	—		5		—		—		—		26		—			31
Substandard	154		181		41		334		197		531		165			1,603


Total consumer	$	44,890	$	17,847	$	5,919	$	25,988	$	16,035	$	21,494	$	109,379		$	241,552

Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	6,086	$	27,646	$	—		$	33,732

Substandard	—		—		—		—		55		470		—			525


Total indirect automobile	$	—	$	—	$	—	$	—	$	6,141	$	28,116	$	—		$	34,257

Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	772,366		$	772,366
Special mention	—		—		—		—		—		—		46,362			46,362



Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	818,728		$	818,728

Municipal
Risk Grade:
Pass	$	14,216	$	27,346	$	48,941	$	177,156	$	14,655	$	208,236	$	2,118		$	492,668




Total municipal	$	14,216	$	27,346	$	48,941	$	177,156	$	14,655	$	208,236	$	2,118		$	492,668

Premium Finance
Risk Grade:
Pass	$	928,930	$	4,038	$	1,916	$	—	$	—	$	—	$	—		$	934,884

Substandard	10,777		901		—		—		—		—		—			11,678


Total premium finance	$	939,707	$	4,939	$	1,916	$	—	$	—	$	—	$	—		$	946,562


As of December 31, 2023	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2023		2022		2021		2020		2019		Prior				Total

Real Estate – Construction and Development
Risk Grade:
Pass	$	457,077	$	938,909	$	505,254	$	58,840	$	54,646	$	30,042	$	81,662		$	2,126,430
Special mention	—		—		—		—		—		479		—			479
Substandard	—		266		1,512		—		—		500		—			2,278


Total real estate – construction and development	$	457,077	$	939,175	$	506,766	$	58,840	$	54,646	$	31,021	$	81,662		$	2,129,187

Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	450,315	$	1,890,498	$	2,133,833	$	1,090,735	$	765,640	$	1,437,323	$	100,206		$	7,868,550
Special mention	—		17,131		53,329		—		30,200		46,370		—			147,030
Substandard	428		418		15,578		2,660		6,106		18,984		—			44,174


Total real estate – commercial and farmland	$	450,743	$	1,908,047	$	2,202,740	$	1,093,395	$	801,946	$	1,502,677	$	100,206		$	8,059,754

Real Estate - Residential
Risk Grade:
Pass	$	714,684	$	1,425,186	$	1,148,092	$	506,137	$	236,147	$	423,648	$	262,968		$	4,716,862
Special mention	13		—		72		201		234		1,411		380			2,311
Substandard	5,057		26,171		28,459		30,566		19,357		25,263		3,620			138,493


Total real estate - residential	$	719,754	$	1,451,357	$	1,176,623	$	536,904	$	255,738	$	450,322	$	266,968		$	4,857,666

Total Loans
Risk Grade:
Pass	$	3,502,909	$	5,062,109	$	4,228,744	$	1,953,577	$	1,149,459	$	2,188,927	$	1,761,006		$	19,846,731
Special mention	13		17,471		59,123		293		30,543		48,737		47,545			203,725
Substandard	17,928		31,532		48,812		34,700		29,248		51,496		5,131			218,847


Total loans	$	3,520,850	$	5,111,112	$	4,336,679	$	1,988,570	$	1,209,250	$	2,289,160	$	1,813,682		$	20,269,303

Allowance for Credit Losses on Loans

The allowance for credit losses represents an allowance for expected losses over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.

Loan losses are charged against the allowance when management believes the collection of a loan’s principal is unlikely. Subsequent recoveries are credited to the allowance. Consumer loans are charged off in accordance with the Federal Financial Institutions Examination Council’s (the “FFIEC”) Uniform Retail Credit Classification and Account Management Policy. Commercial loans are charged off when they are deemed uncollectible, which usually involves a triggering event within the collection effort. If the loan is collateral dependent, the loss is more easily identified and is charged off when it is identified, usually based upon receipt of an appraisal. However, when a loan has guarantor support, the Company may carry the estimated loss as a reserve against the loan while collection efforts with the guarantor are pursued. If, after collection efforts with the guarantor are complete, the deficiency is still considered uncollectible, the loss is charged off and any further collections are treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of Loss, the uncollectible portion is charged off.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of loans with similar risk characteristics for which

the historical loss experience was observed. The Company utilizes a one year reasonable and supportable forecast period. The Company’s methodologies revert back to historical loss information on a straight-line basis over four quarters after the reasonable and supportable forecast period.

During the nine months ended September 30, 2024, the allowance for credit losses increased due to the current economic forecast and organic loan growth during the period. The allowance for credit losses was determined at September 30, 2024 using a weighting of two economic forecasts from Moody's in order to align with management's best estimate over the reasonable and supportable forecast period. The Moody's baseline scenario was weighted at 65% and the downside 75th percentile S-2 scenario was weighted at 35%. The allowance for credit losses was determined at December 31, 2023 solely using the Moody's baseline scenario economic forecast. The current forecast reflects, among other things, an increase in forecast levels of multifamily rental vacancies and unemployment, partially offset by a decrease in the severity of commercial real estate price index decline compared with the forecast at December 31, 2023.

The following tables detail activity and end of period balances in the allowance for credit losses by portfolio segment for the periods indicated. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.


Three Months Ended September 30, 2024

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, June 30, 2024	$	66,542	$	3,451	$	28	$	2,142	$	60	$	702


Provision for loan losses	8,463		1,287		(65)		30		137		180
Loans charged off	(12,316)		(819)		(34)		—		—		(2,102)
Recoveries of loans previously charged off	4,979		208		101		—		—		1,860
Balance, September 30, 2024	$	67,668	$	4,127	$	30	$	2,172	$	197	$	640

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, June 30, 2024	$	77,482	$	121,963	$	63,848	$	336,218


Provision for loan losses	(2,506)		(1,885)		672		6,313
Loans charged off	—		(58)		(23)		(15,352)
Recoveries of loans previously charged off	6		61		63		7,278
Balance, September 30, 2024	$	74,982	$	120,081	$	64,560	$	334,457

Nine Months Ended September 30, 2024

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2023	$	64,053	$	3,902	$	50	$	1,678	$	345	$	602


Provision for loan losses	31,479		2,450		(348)		494		(148)		343
Loans charged off	(40,150)		(2,836)		(138)		—		—		(6,910)
Recoveries of loans previously charged off	12,286		611		466		—		—		6,605
Balance, September 30, 2024	$	67,668	$	4,127	$	30	$	2,172	$	197	$	640

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2023	$	61,017	$	110,097	$	65,356	$	307,100


Provision for loan losses	13,911		9,900		(897)		57,184
Loans charged off	—		(571)		(49)		(50,654)
Recoveries of loans previously charged off	54		655		150		20,827
Balance, September 30, 2024	$	74,982	$	120,081	$	64,560	$	334,457


Three Months Ended September 30, 2023

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, June 30, 2023	$	50,789	$	4,548	$	98	$	2,335	$	357	$	776


Provision for loan losses	14,650		310		(149)		(589)		(9)		183
Loans charged off	(16,519)		(948)		(36)		—		—		(1,951)
Recoveries of loans previously charged off	4,745		203		158		—		—		1,639
Balance, September 30, 2023	$	53,665	$	4,113	$	71	$	1,746	$	348	$	647

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, June 30, 2023	$	54,589	$	96,140	$	62,439	$	272,071


Provision for loan losses	8,525		5,453		1,721		30,095
Loans charged off	—		—		(34)		(19,488)
Recoveries of loans previously charged off	74		371		236		7,426
Balance, September 30, 2023	$	63,188	$	101,964	$	64,362	$	290,104

Nine Months Ended September 30, 2023

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2022	$	39,455	$	5,413	$	174	$	2,118	$	357	$	1,025
Adjustment to allowance for adoption of ASU 2022-02	(105)		—		—		—		—		—

Provision for loan losses	46,050		2,146		(567)		(372)		(9)		141
Loans charged off	(42,068)		(4,140)		(135)		—		—		(5,220)
Recoveries of loans previously charged off	10,333		694		599		—		—		4,701
Balance, September 30, 2023	$	53,665	$	4,113	$	71	$	1,746	$	348	$	647

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2022	$	32,659	$	67,433	$	57,043	$	205,677
Adjustment to allowance for adoption of ASU 2022-02	(37)		(722)		(847)		(1,711)

Provision for loan losses	29,920		38,097		7,708		123,114
Loans charged off	—		(3,320)		(231)		(55,114)
Recoveries of loans previously charged off	646		476		689		18,138
Balance, September 30, 2023	$	63,188	$	101,964	$	64,362	$	290,104

Modifications to Borrowers Experiencing Financial Difficulty

The Company periodically provides modifications to borrowers experiencing financial difficulty. These modifications include either payment deferrals, term extensions, interest rate reductions, principal forgiveness or combinations of modification types. The determination of whether the borrower is experiencing financial difficulty is made on the date of the modification. When principal forgiveness is provided, the amount of principal forgiveness is charged off against the allowance for credit losses with a corresponding reduction in the amortized cost basis of the loan.

The following table shows the amortized cost basis of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted during the three and nine months ended September 30, 2024, and 2023:


Three Months Ended September 30, 2024
(dollars in thousands)	Payment Deferral		Term Extension		Interest Rate Reduction		Combination of Term Extension and Rate Reduction		Total		Percentage of Total Class of Financial Receivable








Real estate – residential	$	—	$	3,185	$	835	$	2,833	$	6,853	0.1	%
Total	$	—	$	3,185	$	835	$	2,833	$	6,853	—	%


Nine Months Ended September 30, 2024
(dollars in thousands)	Payment Deferral		Term Extension		Interest Rate Reduction		Combination of Term Extension and Rate Reduction		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	605	$	—	$	—	$	—	$	605	—	%







Real estate – residential	—		8,671		1,336		4,170		14,177		0.3	%
Total	$	605	$	8,671	$	1,336	$	4,170	$	14,782	0.1	%


Three Months Ended September 30, 2023
(dollars in thousands)	Payment Deferral		Term Extension		Interest Rate Reduction		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	—	$	520	$	—	$	520	—	%






Real estate – commercial and farmland	—		697		832		1,529		—	%
Real estate – residential	839		1,683		—		2,522		0.1	%
Total	$	839	$	2,900	$	832	$	4,571	—	%


Nine Months Ended September 30, 2023
(dollars in thousands)	Payment Deferral		Term Extension		Interest Rate Reduction		Combination of Term Extension and Rate Reduction		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	1,180	$	2,502	$	—	$	—	$	3,682	0.1	%





Real estate – construction and development	—		278		—		—		278		—	%
Real estate – commercial and farmland	—		1,197		832		—		2,029		—	%
Real estate – residential	1,033		3,165		—		348		4,546		0.1	%
Total	$	2,213	$	7,142	$	832	$	348	$	10,535	0.1	%

The Company had unfunded commitments to borrowers experiencing financial difficulty for which the Company has modified their loans of $1.4 million at September 30, 2024 and $1.5 million at December 31, 2023, respectively.

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024, and 2023, respectively:


Three Months Ended September 30, 2024


Term Extension
Loan Type						Financial Effect
Real estate - residential						Maturity dates were extended for a weighted average of 94 months.


Interest Rate Reduction
Loan Type						Financial Effect
Real estate - residential						Rate was reduced by 3.63%


Combination of Term Extension and Rate Reduction
Loan Type						Financial Effect
Real estate - residential						Maturity date was extended for a weighted average 101 months and rate was reduced by a weighted average 2.35%


Nine Months Ended September 30, 2024


Payment Deferral
Loan Type						Financial Effect
Commercial, financial and agricultural						Payments were deferred for 16 months.


Term Extension
Loan Type						Financial Effect



Real estate - residential						Maturity dates were extended for a weighted average of 89 months


Interest Rate Reduction
Loan Type						Financial Effect
Real estate - residential						Rate was reduced by a weighted average 2.88%


Combination of Term Extension and Rate Reduction
Loan Type						Financial Effect
Real estate - residential						Maturity date was extended for a weighted average 104 months and rate was reduced by a weighted average 2.51%


Three Months Ended September 30, 2023
Payment Deferral
Loan Type						Financial Effect







Real estate – residential						Payments were deferred for four months


Term Extension
Loan Type						Financial Effect
Commercial, financial and agricultural						Maturity date was extended nine months
Real estate – commercial and farmland						Maturity date was extended 12 months.
Real estate - residential						Maturity dates were extended for a weighted average of 116 months.


Interest Rate Reduction
Loan Type						Financial Effect
Real estate – commercial and farmland						Interest rate was reduced by 4.75%.


Nine Months Ended September 30, 2023
Payment Deferral
Loan Type						Financial Effect
Commercial, financial and agricultural						Payments were reduced approximately 32% for three months before returning to a fully amortizing payment structure thereafter.
Commercial, financial and agricultural						Payments were reduced approximately 73% for four months before requiring full repayment.







Real estate – residential						Payments were deferred for a weighted average of four months


Term Extension
Loan Type						Financial Effect
Commercial, financial and agricultural						Maturity dates were extended for a weighted average of ten months.
Real estate – construction and development						Maturity date was extended for 11 months.
Real estate – commercial and farmland						Maturity dates were extended for a weighted average of 12 months.
Real estate - residential						Maturity dates were extended for a weighted average of 92 months


Interest Rate Reduction
Loan Type						Financial Effect
Real estate – commercial and farmland						Interest rate was reduced by 4.75%


Combination of Term Extension and Rate Reduction
Loan Type						Financial Effect
Real estate - residential						Maturity date was extended 58 months and rate was reduced by 1.375%

The Company monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:


As of September 30, 2024
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total
Commercial, financial and agricultural	$	2,343	$	959	$	—	$	—	$	3,302






Real estate – commercial and farmland	2,544		—		—		—		2,544
Real estate – residential	11,189		2,872		615		2,572		17,248
Total	$	16,076	$	3,831	$	615	$	2,572	$	23,094


As of December 31, 2023
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total
Commercial, financial and agricultural	$	4,018	$	355	$	—	$	799	$	5,172






Real estate – commercial and farmland	6,692		1,129		—		—		7,821
Real estate – residential	5,113		711		442		1,106		7,372
Total	$	15,823	$	2,195	$	442	$	1,905	$	20,365

The following table provides the amortized cost basis of financing receivables that had a payment default during the three months ended September 30, 2024 and were modified in the 12 months before default to borrowers experiencing financial difficulty.


(dollars in thousands)	Interest Rate Reduction		Term Extension		Payment Deferral		Combination of Term Extension and Rate Reduction		Total
Commercial, financial and agricultural	$	—	$	—	$	959	$	—	$	959






Real estate – commercial and farmland	815		—		—		—		815
Real estate – residential	—		5,793		—		2,233		8,026
Total	$	815	$	5,793	$	959	$	2,233	$	9,800

The following table provides the amortized cost basis of financing receivables that had a payment default during the nine months ended September 30, 2024 and were modified in the 12 months before default to borrowers experiencing financial difficulty.


(dollars in thousands)	Interest Rate Reduction		Term Extension		Payment Deferral		Combination of Term Extension and Rate Reduction		Total
Commercial, financial and agricultural	$	—	$	—	$	1,056	$	—	$	1,056






Real estate – commercial and farmland	815		—		—		—		815
Real estate – residential	—		6,400		—		2,233		8,633
Total	$	815	$	6,400	$	1,056	$	2,233	$	10,504

The following table provides the amortized cost basis of financing receivables that had a payment default during both the three and nine months ended September 30, 2023 and were modified in the 12 months before default to borrowers experiencing financial difficulty.


(dollars in thousands)	Term Extension		Payment Deferral		Total
Commercial, financial and agricultural	$	482	$	815	$	1,297





Real estate – construction and development	278		—		278
Real estate – commercial and farmland	500		—		500
Real estate – residential	1,090		194		1,284
Total	$	2,350	$	1,009	$	3,359

NOTE 4 – OTHER BORROWINGS

Other borrowings consist of the following:


(dollars in thousands)	September 30, 2024		December 31, 2023
FHLB borrowings:
Fixed Rate Advance due January 10, 2024; fixed interest rate of 5.450%	$	—	$	50,000
Fixed Rate Advance due January 17, 2024; fixed interest rate of 5.460%	—		100,000






Fixed Rate Advance due March 3, 2025; fixed interest rate of 1.208%	15,000		15,000
Fixed Rate Advance due March 2, 2027; fixed interest rate of 1.445%	15,000		15,000
Fixed Rate Advance due March 4, 2030; fixed interest rate of 1.606%	15,000		15,000
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.550%	1,369		1,378
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.550%	948		954
Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	1,020		1,128

Subordinated notes payable:


Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,113 and $1,296, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%	104,637		106,704
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $683 and $784, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month SOFR plus 3.63%	74,683		75,784
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,211 and $1,362, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%	108,789		108,638





Other Debt:
Advance from correspondent bank due November 28, 2024; secured by a loan receivable; variable interest rate at one-month SOFR plus 2.50%	—		10,000
Advance from correspondent bank due December 1, 2025; secured by a loan receivable; variable interest rate at one-month SOFR plus 2.65%	10,000		10,000
	$	346,446	$	509,586

The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in addition to FHLB stock. At September 30, 2024, $3.94 billion was available for borrowing on lines with the FHLB.

As of September 30, 2024, the Bank maintained credit arrangements with various financial institutions to purchase federal funds up to $92.0 million.

The Bank also participates in the Federal Reserve discount window borrowings program. At September 30, 2024, the Bank had $3.20 billion of loans pledged at the Federal Reserve discount window and had $2.49 billion available for borrowing.

NOTE 5 – ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income (loss) for the Company consists of changes in net unrealized gains and losses on debt securities available-for-sale. The reclassification for gains (losses) on sale of securities included in net income is recorded in net gain (loss) on securities in the consolidated statement of income and comprehensive income.

The following table presents a summary of the accumulated other comprehensive income (loss) balances, net of tax, for the periods indicated:


(dollars in thousands)	Accumulated Other Comprehensive Income (Loss)
Three Months Ended September 30, 2024
Balance, June 30, 2024	$	(38,020)

Unrealized gain on debt securities available-for-sale, net of tax	22,296
Balance, September 30, 2024	$	(15,724)

Three Months Ended September 30, 2023
Balance, June 30, 2023	$	(50,618)

Unrealized loss on debt securities available-for-sale, net of tax	(10,200)
Balance, September 30, 2023	$	(60,818)

Nine Months Ended September 30, 2024
Balance, December 31, 2023	$	(35,939)

Unrealized gain on debt securities available-for-sale, net of tax	20,215
Balance, September 30, 2024	$	(15,724)

Nine Months Ended September 30, 2023
Balance, December 31, 2022	$	(46,507)

Unrealized loss on debt securities available-for-sale, net of tax	(14,311)
Balance, September 30, 2023	$	(60,818)

NOTE 6 – WEIGHTED AVERAGE SHARES OUTSTANDING

Earnings per share have been computed based on the following weighted average number of common shares outstanding:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Average common shares outstanding	68,798,093	68,879,352	68,811,727	69,023,201
Common share equivalents:
Stock options	—	—	—	57
Nonvested restricted share grants	127,894	46,489	112,042	51,170
Performance stock units	140,311	68,406	107,897	55,493
Average common shares outstanding, assuming dilution	69,066,298	68,994,247	69,031,666	69,129,921

There were no anti-dilutive securities excluded from the computation of earnings per share for the three months ended September 30, 2024 and 2023, respectively. For the nine months ended September 30, 2024 and 2023 there were 2,559 and 84,487 anti-dilutive securities excluded from the computation of earnings per share, respectively.

NOTE 7 – FAIR VALUE MEASURES

The fair value of an asset or liability is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair value is based on discounted cash flows or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability. The accounting standard for disclosures about the fair value

measures excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The Company's loans held for sale under the fair value option are comprised of the following:


(dollars in thousands)	September 30, 2024		December 31, 2023
Mortgage loans held for sale	$	552,778	$	281,332
SBA loans held for sale	601		—
Total loans held for sale	$	553,379	$	281,332

The Company has elected to record mortgage loans held for sale at fair value in order to eliminate the complexities and inherent difficulties of achieving hedge accounting and to better align reported results with the underlying economic changes in value of the loans and related hedge instruments. This election impacts the timing and recognition of origination fees and costs, as well as servicing value, which are now recognized in earnings at the time of origination. Interest income on mortgage loans held for sale is recorded on an accrual basis in the consolidated statements of income and comprehensive income under the heading interest income – interest and fees on loans. The servicing value is included in the fair value of the interest rate lock commitments (“IRLCs”) with borrowers. The mark to market adjustments related to mortgage loans held for sale and the associated economic hedges are captured in mortgage banking activities.

Net gains of $1.9 million and $4.4 million resulting from changes in fair value of these mortgage loans were recorded in income during the three and nine months ended September 30, 2024, respectively. Net losses of $3.2 million and $857,000 resulting from changes in fair value of these mortgage loans were recorded in income during the three and nine months ended September 30, 2023, respectively. A net loss of $2.2 million and a net gain of $5.2 million resulting from changes in the fair value of the related derivative financial instruments used to hedge exposure to the market-related risks associated with these mortgage loans were recorded in income during the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2023, a net loss of $207,000 and a net gain of $4.9 million, respectively, resulting from changes in the fair value of the related derivative financial instruments were recorded in income. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal.

The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of September 30, 2024 and December 31, 2023:


(dollars in thousands)	September 30, 2024		December 31, 2023
Aggregate fair value of mortgage loans held for sale	$	552,778	$	281,332
Aggregate unpaid principal balance of mortgage loans held for sale	540,985		273,915
Past-due loans of 90 days or more	—		781
Nonaccrual loans	—		781
Unpaid principal balance of nonaccrual loans	—		774

The following table summarizes the difference between the fair value and the principal balance for SBA loans held for sale measured at fair value as of September 30, 2024 and December 31, 2023:


(dollars in thousands)	September 30, 2024		December 31, 2023
Aggregate fair value of SBA loans held for sale	$	601	$	—
Aggregate unpaid principal balance of SBA loans held for sale	561		—

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale, loans held for sale under the fair value option and derivative financial instruments are recorded at fair value on a recurring basis. From time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as collateral-dependent loans, loan servicing rights and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of September 30, 2024 and December 31, 2023:


	Recurring Basis Fair Value Measurements
	September 30, 2024
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
Debt securities available-for-sale:
U.S. Treasuries	$	630,671	$	630,671	$	—	$	—
U.S. government sponsored agencies	995		—		995		—
State, county and municipal securities	25,929		—		25,929		—
Corporate debt securities	10,226		—		9,251		975
SBA pool securities	74,192		—		74,192		—
Mortgage-backed securities	699,539		—		699,539		—
Loans held for sale	553,379		—		553,379		—
Derivative financial instruments	6,590		—		6,590
Mortgage banking derivative instruments	5,061		—		5,061		—
Total recurring assets at fair value	$	2,006,582	$	630,671	$	1,374,936	$	975
Financial liabilities:
Derivative financial instruments	$	7,007	$	—	$	7,007	$	—
Risk participation agreement	48		—		48		—
Mortgage banking derivative instruments	1,982		—		1,982		—
Total recurring liabilities at fair value	$	9,037	$	—	$	9,037	$	—


	Recurring Basis Fair Value Measurements
	December 31, 2023
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
Debt securities available-for-sale:
U.S. Treasuries	$	720,877	$	720,877	$	—	$	—
U.S. government sponsored agencies	985		—		985		—
State, county and municipal securities	28,051		—		28,051		—
Corporate debt securities	10,027		—		9,037		990
SBA pool securities	51,516		—		51,516		—
Mortgage-backed securities	591,488		—		591,488		—
Loans held for sale	281,332		—		281,332		—
Derivative financial instruments	5,937		—		5,937		—
Mortgage banking derivative instruments	3,636		—		3,636		—
Total recurring assets at fair value	$	1,693,849	$	720,877	$	971,982	$	990
Financial liabilities:
Derivative financial instruments	$	6,203	$	—	$	6,203	$	—
Mortgage banking derivative instruments	5,790		—		5,790		—
Total recurring liabilities at fair value	$	11,993	$	—	$	11,993	$	—

The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of September 30, 2024 and December 31, 2023:


	Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
September 30, 2024
Collateral-dependent loans	$	45,532	$	—	$	—	$	45,532
Other real estate owned	7,537		—		—		7,537


Total nonrecurring assets at fair value	$	53,069	$	—	$	—	$	53,069

December 31, 2023
Collateral-dependent loans	$	36,978	$	—	$	—	$	36,978
Other real estate owned	5,324		—		—		5,324


Total nonrecurring assets at fair value	$	42,302	$	—	$	—	$	42,302

The inputs used to determine estimated fair value of collateral-dependent loans include market conditions, loan term, underlying collateral characteristics and discount rates. The inputs used to determine fair value of OREO include market conditions, estimated marketing period or holding period, underlying collateral characteristics and discount rates.

For the nine months ended September 30, 2024 and the year ended December 31, 2023, there were no changes in the methods and significant assumptions used to estimate fair value.

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets:


(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
September 30, 2024
Recurring:
Debt securities available-for-sale	$	975	Discounted cash flows	Probability of Default	10%	10%
				Loss Given Default	43%	43%
Nonrecurring:
Collateral-dependent loans	$	45,532	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	15% - 66%	33%
Other real estate owned	$	7,537	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 66%	33%



December 31, 2023
Recurring:
Debt securities available-for-sale	$	990	Discounted cash flows	Probability of Default	11%	11%
				Loss Given Default	42%	42%
Nonrecurring:
Collateral-dependent loans	$	36,978	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	11% - 60%	28%
Other real estate owned	$	5,324	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 33%	22%

The carrying amount and estimated fair value of the Company’s financial instruments, not shown elsewhere in these financial statements, were as follows:


			Fair Value Measurements
			September 30, 2024
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	231,515	$	231,515	$	—	$	—	$	231,515
Interest-bearing deposits in banks	1,127,641		1,127,641		—		—		1,127,641

Debt securities held-to-maturity	161,220		—		145,714		—		145,714

Loans, net	20,584,992		—		—		20,091,402		20,091,402

Financial liabilities:
Deposits	21,879,265		—		21,876,260		—		21,876,260

Other borrowings	346,446		—		339,973		—		339,973
Subordinated deferrable interest debentures	131,811		—		144,819		—		144,819


			Fair Value Measurements
			December 31, 2023
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	230,470	$	230,470	$	—	$	—	$	230,470
Interest-bearing deposits in banks	936,834		936,834		—		—		936,834

Debt securities held-to-maturity	141,512		—		122,731		—		122,731
Loans, net	19,925,225		—		—		19,332,899		19,332,899

Financial liabilities:
Deposits	20,708,509		—		20,707,463		—		20,707,463

Other borrowings	509,586		—		501,723		—		501,723
Subordinated deferrable interest debentures	130,315		—		141,407		—		141,407

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Loan Commitments

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the Company’s balance sheets.

The Company’s exposure to credit loss is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. A summary of the Company’s commitments is as follows:


(dollars in thousands)	September 30, 2024		December 31, 2023
Commitments to extend credit	$	3,484,890	$	4,412,818
Unused home equity lines of credit	438,080		386,574
Financial standby letters of credit	41,926		37,546
Mortgage interest rate lock commitments	379,396		171,750

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. These commitments, predominantly at variable interest rates, generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk

involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral is required in instances which the Company deems necessary. The Company has not been required to perform on any material financial standby letters of credit and the Company has not incurred any losses on financial standby letters of credit for the nine months ended September 30, 2024 and the year ended December 31, 2023.

The Company maintains an allowance for credit losses on unfunded commitments which is recorded in other liabilities on the consolidated balance sheets. The following table presents activity in the allowance for unfunded commitments for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2024		2023		2024		2023
Balance at beginning of period	$	30,566	$	54,630	$	41,558	$	52,411


Provision for unfunded commitments	(204)		(5,634)		(11,196)		(3,415)
Balance at end of period	$	30,362	$	48,996	$	30,362	$	48,996

Other Commitments

As of September 30, 2024, letters of credit issued by the FHLB totaling $1.0 billion were used to guarantee the Bank’s performance related to a portion of its public fund deposit balances.

Litigation and Regulatory Contingencies

From time to time, the Company and the Bank are subject to various legal proceedings, claims and disputes that arise in the ordinary course of business. The Company and the Bank are also subject to regulatory examinations, information gathering requests, inquiries and investigations in the ordinary course of business. Based on the Company’s current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal and regulatory matters will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal and regulatory matters could have a material adverse effect on the Company’s results of operations and financial condition for any particular period.

The Company’s management and its legal counsel periodically assess contingent liabilities, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

NOTE 9 – SEGMENT REPORTING

The Company has the following four reportable segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division and Premium Finance Division. The Banking Division derives its revenues from the delivery of full-service financial services, including commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division derives its revenues from the origination, sales and servicing of one-to-four family residential mortgage loans. The Warehouse Lending Division derives its revenues from the origination and servicing of warehouse lines to other businesses that are secured by underlying one-to-four family residential mortgage loans. The Premium Finance Division derives its revenues from the origination and servicing of commercial insurance premium finance loans.

The Banking, Retail Mortgage, Warehouse Lending and Premium Finance Divisions are managed as separate business units because of the different products and services they provide. The Company evaluates performance and allocates resources based on profit or loss from operations. There are no material intersegment sales or transfers. During the first quarter of 2024, the Company consolidated its former SBA Division into the Banking Division based on the similarity of products and services

offered, customers served and materiality of its operating profit. Prior period segment information for the Banking Division was restated to reflect this consolidation.

The following tables present selected financial information with respect to the Company’s reportable business segments for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30, 2024
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	255,241	$	60,789	$	10,400	$	28,716	$	355,146
Interest expense	78,447		37,236		6,747		18,656		141,086
Net interest income	176,794		23,553		3,653		10,060		214,060
Provision for credit losses	5,566		254		(170)		457		6,107
Noninterest income	27,800		41,498		400		11		69,709
Noninterest expense
Salaries and employee benefits	62,634		23,233		621		2,212		88,700
Occupancy and equipment	10,725		957		6		28		11,716
Data processing and communications expenses	13,922		1,184		32		83		15,221
Other expenses	22,619		12,164		217		1,140		36,140
Total noninterest expense	109,900		37,538		876		3,463		151,777
Income before income tax expense	89,128		27,259		3,347		6,151		125,885
Income tax expense	18,992		5,724		703		1,254		26,673
Net income	$	70,136	$	21,535	$	2,644	$	4,897	$	99,212

Total assets	$	19,387,331	$	4,899,282	$	597,670	$	1,515,499	$	26,399,782
Goodwill	951,148		—		—		64,498		1,015,646
Other intangible assets, net	71,164		—		—		3,777		74,941


	Three Months Ended September 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	233,214	$	54,532	$	19,357	$	23,450	$	330,553
Interest expense	63,657		31,727		13,349		14,069		122,802
Net interest income	169,557		22,805		6,008		9,381		207,751
Provision for credit losses	22,510		2,399		(589)		139		24,459
Noninterest income	26,824		35,691		662		4		63,181
Noninterest expense
Salaries and employee benefits	57,435		21,231		924		2,308		81,898
Occupancy and equipment	11,473		1,182		1		89		12,745
Data processing and communications expenses	11,818		1,052		30		73		12,973
Other expenses	20,431		12,153		219		1,027		33,830
Total noninterest expense	101,157		35,618		1,174		3,497		141,446
Income before income tax expense	72,714		20,479		6,085		5,749		105,027
Income tax expense	18,163		4,301		1,278		1,170		24,912
Net income	$	54,551	$	16,178	$	4,807	$	4,579	$	80,115

Total assets	$	18,634,055	$	4,980,246	$	859,517	$	1,224,012	$	25,697,830
Goodwill	951,148		—		—		64,498		1,015,646
Other intangible assets, net	85,648		—		—		6,727		92,375


	Nine Months Ended September 30, 2024
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	734,220	$	174,889	$	46,263	$	76,549	$	1,031,921
Interest expense	219,421		104,307		30,290		50,534		404,552
Net interest income	514,799		70,582		15,973		26,015		627,369
Provision for credit losses	45,581		(296)		334		366		45,985
Noninterest income	91,690		130,408		2,168		32		224,298
Noninterest expense
Salaries and employee benefits	181,473		69,560		2,633		6,165		259,831
Occupancy and equipment	33,952		3,014		20		174		37,160
Data processing and communications expenses	40,862		3,826		116		264		45,068
Other expenses	71,680		38,091		752		3,263		113,786
Total noninterest expense	327,967		114,491		3,521		9,866		455,845
Income before income tax expense	232,941		86,795		14,286		15,815		349,837
Income tax expense	61,110		18,227		3,000		3,191		85,528
Net income	$	171,831	$	68,568	$	11,286	$	12,624	$	264,309


	Nine Months Ended September 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	676,003	$	155,988	$	54,931	$	61,299	$	948,221
Interest expense	155,389		91,739		37,057		35,093		319,278
Net interest income	520,614		64,249		17,874		26,206		628,943
Provision for credit losses	110,801		8,530		(372)		745		119,704
Noninterest income	77,455		106,557		2,546		22		186,580
Noninterest expense
Salaries and employee benefits	171,698		63,321		2,498		6,627		244,144
Occupancy and equipment	34,331		3,689		2		231		38,253
Data processing and communications expenses	35,596		3,518		120		224		39,458
Other expenses	67,852		35,759		644		3,160		107,415
Total noninterest expense	309,477		106,287		3,264		10,242		429,270
Income before income tax expense	177,791		55,989		17,528		15,241		266,549
Income tax expense	44,850		11,758		3,681		3,089		63,378
Net income	$	132,941	$	44,231	$	13,847	$	12,152	$	203,171

NOTE 10 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Mortgage Banking Derivatives

The Company maintains a risk management program to manage interest rate risk and pricing risk associated with its mortgage lending activities. This program includes the use of forward contracts and other derivatives that are used to offset changes in value of the mortgage inventory due to changes in market interest rates. Forward contracts to sell primarily fixed-rate mortgage loans are entered into to reduce the exposure to market risk arising from potential changes in interest rates, which could affect the fair value of mortgage loans held for sale and outstanding interest rate lock commitments, which guarantee a certain interest rate if the loan is ultimately funded or granted by the Company as a mortgage loan held for sale. The commitments to sell mortgage loans are at fixed prices and are scheduled to settle at specified dates.

The Company enters into interest rate lock commitments for residential mortgage loans which commits it to lend funds to a potential borrower at a specific interest rate and within a specified period of time. Interest rate lock commitments that relate to the origination of mortgage loans that, if originated, will be held for sale, are considered derivative financial instruments under applicable accounting guidance. Outstanding interest rate lock commitments expose the Company to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan and the eventual commitment for sale into the secondary market.

These mortgage banking derivatives are carried at fair value and are not designated in hedge relationships. Fair values are estimated based on changes in mortgage interest rates from the date of the commitments. Changes in the fair values of these mortgage banking derivatives are included as a component of mortgage banking activity in the consolidated statements of income.

Customer Related Derivative Positions

The Company enters into interest rate derivative contracts to facilitate the risk management strategies of certain clients. The Company mitigates this risk largely by entering into equal and offsetting interest rate derivative agreements with highly rated counterparties. The interest rate contracts are free-standing derivatives and are recorded at fair value on the Company's consolidated balance sheets. The credit risk to these clients is evaluated and included in the calculation of fair value. Fair value changes including credit-related adjustments are recorded as a component of other noninterest income.

Risk Participation Agreement

The Company has entered into a risk participation agreement swap, that is associated with a loan participation, where the Company is not the counterparty to the interest rate swap that is associated with the risk participation sold. The interest rate swap mark to market only impacts the Company if the swap is in a liability position to the counterparty and the customer defaults on payments to the counterparty.

The following table reflects the notional amount and fair value of derivative instruments not designated as hedging instruments included in the consolidated balance sheets as of September 30, 2024 and December 31, 2023.


	September 30, 2024						December 31, 2023
			Fair Value						Fair Value
(dollars in thousands)	Notional Amount		Derivative Assets(1)		Derivative Liabilities(2)		Notional Amount		Derivative Assets(1)		Derivative Liabilities(2)
Interest rate contracts(3)	$	820,295	$	6,590	$	7,007	$	736,188	$	5,937	$	6,203
Risk participation agreement	26,163		—		48		26,163		—		65
Mortgage derivatives - interest rate lock commitments	379,396		5,061		—		171,750		3,636		—
Mortgage derivatives - forward contracts related to mortgage loans held for sale	925,200		—		1,982		663,015		—		5,790

(1)Derivative assets are included in other assets on the consolidated balance sheets.

(2)Derivative liabilities are included in other liabilities on the consolidated balance sheets.

(3)Includes interest rate contracts for client swaps and offsetting positions.

The net gains (losses) relating to changes in fair value from derivative instruments not designated as hedging instruments are summarized below for the three and nine months ended September 30, 2024 and 2023.


		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	Location	2024		2023		2024		2023
Interest rate contracts(1)	Other noninterest income	$	(337)	$	426	$	(150)	$	205
Risk participation agreement	Other noninterest income	(24)		—		17		—
Interest rate lock commitments	Mortgage banking activity	257		(1,423)		1,425		617
Forward contracts related to mortgage loans held for sale	Mortgage banking activity	(2,434)		1,216		3,808		4,259

(1)Gain (loss) represents net fair value adjustments (including credit related adjustments) for client swaps and offsetting positions.

NOTE 11 – LOAN SERVICING RIGHTS

The Company sells certain residential mortgage loans and SBA loans to third parties. All such transfers are accounted for as sales and the continuing involvement in the loans sold is limited to certain servicing responsibilities. The Company has also acquired servicing portfolios of residential mortgage and SBA loans. Loan servicing rights are initially recorded at fair value and subsequently recorded at the lower of cost or fair value, and are amortized over the remaining service life of the loans, with consideration given to prepayment assumptions. Loan servicing rights are recorded in other assets on the consolidated balance sheets.

The carrying value of the loan servicing rights assets is shown in the table below:


(dollars in thousands)	September 30, 2024		December 31, 2023
Loan Servicing Rights
Residential mortgage	$	101,855	$	171,915
SBA	1,927		2,737

Total loan servicing rights	$	103,782	$	174,652

Residential Mortgage Loans

The Company sells certain first-lien residential mortgage loans to third party investors, primarily the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). For a portion of these loans, the Company retains the related mortgage servicing rights (“MSRs”) and receives servicing fees. The net gain on loan sales, MSRs amortization and recoveries/impairment, and ongoing servicing fees on the portfolio of loans serviced for others are recorded in the consolidated statements of income and comprehensive income as part of mortgage banking activity.

During the three and nine month periods ended September 30, 2024, the Company recorded servicing fee income of $14.0 million and $48.7 million, respectively. During the three and nine month periods ended September 30, 2023, the Company recorded servicing fee income of $15.8 million and $45.0 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

The table below is an analysis of the activity in the Company’s MSRs and valuation allowance:


(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Residential mortgage servicing rights	2024		2023		2024		2023
Beginning carrying value, net	$	145,306	$	160,021	$	171,915	$	147,014
Additions	8,748		13,265		21,625		35,726

Amortization	(3,926)		(4,907)		(14,593)		(14,361)

Disposals	(48,273)		—		(77,092)		—
Ending carrying value, net	$	101,855	$	168,379	$	101,855	$	168,379

The key metrics and the sensitivity of the fair value to adverse changes in model inputs and/or assumptions are summarized below:


(dollars in thousands)	September 30, 2024			December 31, 2023
Residential mortgage servicing rights
Unpaid principal balance of loans serviced for others	$	8,173,212		$	12,454,454
Composition of residential loans serviced for others:
FHLMC	24.01		%	17.54		%
FNMA	70.27		%	50.51		%
GNMA	5.72		%	31.95		%
Total	100.00		%	100.00		%
Weighted average term (months)	353			355
Weighted average age (months)	34			27
Modeled prepayment speed	8.59		%	8.56		%
Decline in fair value due to a 10% adverse change	$	(3,220)		$	(4,492)
Decline in fair value due to a 20% adverse change	$	(6,509)		$	(9,444)
Weighted average discount rate	10.26		%	10.98		%
Decline in fair value due to a 10% adverse change	$	(3,662)		$	(5,110)
Decline in fair value due to a 20% adverse change	$	(7,646)		$	(11,181)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in model inputs and/or assumptions generally cannot be extrapolated because the relationship of a change in input or assumption to the change in fair value may not be linear. In addition, the effect of an adverse variation in a particular input or assumption on the value of the residential mortgage servicing rights is calculated without changing any other input or assumption. In reality, a change in another factor may magnify or counteract the effect of the change in the first.

SBA Loans

All sales of SBA loans, consisting of the guaranteed portion, are executed on a servicing retained basis. These loans, which are partially guaranteed by the SBA, are generally secured by business property such as real estate, inventory, equipment and accounts receivable. The net gain on SBA loan sales, amortization and impairment/recoveries of servicing rights, and ongoing servicing fees are recorded in the consolidated statements of income and comprehensive income as part of other noninterest income.

During the three and nine month periods ended September 30, 2024, the Company recorded servicing fee income of $538,000 and $1.7 million, respectively. During the three and nine month periods ended September 30, 2023, the Company recorded servicing fee income of $734,000 and $2.2 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

The table below is an analysis of the activity in the Company’s SBA loan servicing rights and valuation allowance:


(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
SBA servicing rights	2024		2023		2024		2023
Beginning carrying value, net	$	2,156	$	3,097	$	2,737	$	3,443
Additions	16		33		92		348


Amortization	(245)		(308)		(902)		(969)

Ending carrying value, net	$	1,927	$	2,822	$	1,927	$	2,822


(dollars in thousands)	September 30, 2024			December 31, 2023
SBA servicing rights
Unpaid principal balance of loans serviced for others	$	226,762		$	271,164
Weighted average life (in years)	3.05			3.31
Modeled prepayment speed	22.61		%	20.83		%
Decline in fair value due to a 10% adverse change	(161)			(171)
Decline in fair value due to a 20% adverse change	(307)			(327)
Weighted average discount rate	11.13		%	14.70		%
Decline in fair value due to a 100 basis point adverse change	(58)			(69)
Decline in fair value due to a 200 basis point adverse change	(113)			(135)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes in model inputs and/or assumptions generally cannot be extrapolated because the relationship of a change in input or assumption to the change in fair value may not be linear. In addition, the effect of an adverse variation in a particular input or assumption on the value of the SBA servicing rights is calculated without changing any other input or assumption. In reality, a change in another factor may magnify or counteract the effect of the change in the first.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Note Regarding Forward-Looking Statements

Certain of the statements made in this report are “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control and which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation, the following: general competitive, economic, unemployment, political and market conditions and fluctuations, including real estate market conditions, and the effects of such conditions and fluctuations on the creditworthiness of borrowers, collateral values, asset recovery values and the value of investment securities; movements in interest rates and their impacts on net interest margin; expectations on credit quality and performance; competitive pressures on product pricing and services; legislative and regulatory changes; changes in U.S. government monetary and fiscal policy; investment security valuation and other performance measures; additional competition in our markets; changes in state and federal banking laws and regulations to which we are subject; financial market conditions and the results of financing efforts; the success and timing of other business strategies; our outlook and long-term goals for future growth; weather events, natural disasters, geopolitical events, acts of war or terrorism or other hostilities, public health crises and other catastrophic events beyond our control; and other factors discussed in our filings with the Securities and Exchange Commission (the “SEC”) under the Exchange Act.

All written or oral forward-looking statements that are made by or are attributable to us are expressly qualified in their entirety by this cautionary notice. Our forward-looking statements apply only as of the date of this report or the respective date of the document from which they are incorporated herein by reference. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date of this report, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events or otherwise.

Overview

The following is management’s discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of September 30, 2024, as compared with December 31, 2023, and operating results for the three and nine month periods ended September 30, 2024 and 2023. These comments should be read in conjunction with the Company’s unaudited consolidated financial statements and accompanying notes appearing elsewhere herein.

This discussion contains certain performance measures determined by methods other than in accordance with GAAP. Management of the Company uses these non-GAAP measures in its analysis of the Company’s performance. These measures are useful when evaluating the underlying performance and efficiency of the Company’s operations and balance sheet. The Company’s management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant gains and charges in the current period. The Company’s management believes that investors may use these non-GAAP financial measures to evaluate the Company’s financial performance without the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Non-GAAP measures include adjusted net income and adjusted net income per diluted share. The Company calculates the regulatory capital ratios using current regulatory report instructions. The Company’s management uses these measures to assess the quality of capital and believes that investors may find them useful in their evaluation of the Company. These capital measures may or may not be necessarily comparable to similar capital measures that may be presented by other companies.

Critical Accounting Policies

There have been no significant changes to our critical accounting policies from those disclosed in our 2023 Annual Report on Form 10-K. The reader should refer to the notes to our consolidated financial statements in our 2023 Annual Report on Form 10-K for a full disclosure of all critical accounting policies.

Results of Operations for the Three Months Ended September 30, 2024 and 2023

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of $99.2 million, or $1.44 per diluted share, for the quarter ended September 30, 2024, compared with $80.1 million, or $1.16 per diluted share, for the same period in 2023. The Company’s return on average assets and average shareholders’ equity were 1.49% and 10.91%, respectively, in the third quarter of 2024, compared with 1.25% and 9.56%, respectively, in the third quarter of 2023. During the third quarter of 2024, the Company a recorded pre-tax gain on sale of mortgage servicing rights of $5.2 million and an expense related to natural disasters of $150,000. Excluding these adjustment items, the Company’s net income would have been $95.2 million, or $1.38 per diluted share, for the third quarter of 2024 and $80.1 million, or $1.16 per diluted share, for the third quarter of 2023.

Below is a reconciliation of adjusted net income to net income, as discussed above:


	Three Months Ended September 30,
(in thousands, except share and per share data)	2024		2023
Net income	$	99,212	$	80,115
Adjustment items:
Gain on sale of MSR	(5,245)		—



Natural disaster expense	150		—



Tax effect of adjustment items (Note 1)	1,070		—
After tax adjustment items	(4,025)		—

Adjusted net income	$	95,187	$	80,115

Weighted average common shares outstanding - diluted	69,066,298		68,994,247
Net income per diluted share	$	1.44	$	1.16
Adjusted net income per diluted share	$	1.38	$	1.16

Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments.

Below is additional information regarding the retail banking activities, mortgage banking activities, warehouse lending activities and premium finance activities of the Company during the third quarter of 2024 and 2023, respectively:


	Three Months Ended September 30, 2024
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	255,241	$	60,789	$	10,400	$	28,716	$	355,146
Interest expense	78,447		37,236		6,747		18,656		141,086
Net interest income	176,794		23,553		3,653		10,060		214,060
Provision for credit losses	5,566		254		(170)		457		6,107
Noninterest income	27,800		41,498		400		11		69,709
Noninterest expense
Salaries and employee benefits	62,634		23,233		621		2,212		88,700
Occupancy and equipment	10,725		957		6		28		11,716
Data processing and communications expenses	13,922		1,184		32		83		15,221
Other expenses	22,619		12,164		217		1,140		36,140
Total noninterest expense	109,900		37,538		876		3,463		151,777
Income before income tax expense	89,128		27,259		3,347		6,151		125,885
Income tax expense	18,992		5,724		703		1,254		26,673
Net income	$	70,136	$	21,535	$	2,644	$	4,897	$	99,212


	Three Months Ended September 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	233,214	$	54,532	$	19,357	$	23,450	$	330,553
Interest expense	63,657		31,727		13,349		14,069		122,802
Net interest income	169,557		22,805		6,008		9,381		207,751
Provision for credit losses	22,510		2,399		(589)		139		24,459
Noninterest income	26,824		35,691		662		4		63,181
Noninterest expense
Salaries and employee benefits	57,435		21,231		924		2,308		81,898
Occupancy and equipment	11,473		1,182		1		89		12,745
Data processing and communications expenses	11,818		1,052		30		73		12,973
Other expenses	20,431		12,153		219		1,027		33,830
Total noninterest expense	101,157		35,618		1,174		3,497		141,446
Income before income tax expense	72,714		20,479		6,085		5,749		105,027
Income tax expense	18,163		4,301		1,278		1,170		24,912
Net income	$	54,551	$	16,178	$	4,807	$	4,579	$	80,115

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average interest rate for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the three months ended September 30, 2024 and 2023. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.


	Quarter Ended September 30,
	2024					2023
(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid
Assets
Interest-earning assets:
Interest-bearing deposits in banks	$	997,308	$	13,633	5.44%	$	864,028	$	10,769	4.94%


Investment securities - taxable	1,733,418		15,555		3.57%	1,650,164		14,754		3.55%
Investment securities - nontaxable	41,496		426		4.08%	40,896		418		4.06%
Loans held for sale	575,461		9,142		6.32%	464,452		7,460		6.37%
Loans	21,023,629		317,358		6.01%	20,371,689		298,102		5.81%
Total interest-earning assets	24,371,312		356,114		5.81%	23,391,229		331,503		5.62%
Noninterest-earning assets	2,071,672					2,134,684
Total assets	$	26,442,984				$	25,525,913

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts	$	3,753,528	$	20,535	2.18%	$	3,661,701	$	17,255	1.87%
MMDA	6,508,770		61,620		3.77%	5,527,731		45,683		3.28%
Savings accounts	765,909		960		0.50%	915,678		1,791		0.78%
Retail CDs	2,478,875		26,775		4.30%	2,200,413		19,013		3.43%
Brokered CDs	1,493,352		19,808		5.28%	1,441,854		19,257		5.30%
Total interest-bearing deposits	15,000,434		129,698		3.44%	13,747,377		102,999		2.97%
Non-deposit funding

FHLB advances	358,332		4,443		4.93%	943,855		12,543		5.27%
Other borrowings	298,073		3,514		4.69%	312,572		3,821		4.85%
Subordinated deferrable interest debentures	131,547		3,431		10.38%	129,554		3,439		10.53%
Total non-deposit funding	787,952		11,388		5.75%	1,385,981		19,803		5.67%
Total interest-bearing liabilities	15,788,386		141,086		3.55%	15,133,358		122,802		3.22%
Demand deposits	6,622,952					6,655,191
Other liabilities	413,594					412,404
Shareholders’ equity	3,618,052					3,324,960
Total liabilities and shareholders’ equity	$	26,442,984				$	25,525,913
Interest rate spread					2.26%					2.40%
Net interest income			$	215,028				$	208,701
Net interest margin					3.51%					3.54%

On a tax-equivalent basis, net interest income for the third quarter of 2024 was $215.0 million, an increase of $6.3 million, or 3.03%, compared with $208.7 million reported in the same quarter in 2023. The increase in net interest income is primarily a result of increased yield on loans and interest-bearing deposits in other banks in addition to growth in average earning assets, partially offset by increased cost of funds as market interest rates have risen. Average interest-earning assets increased $980.1 million, or 4.19%, from $23.39 billion in the third quarter of 2023 to $24.37 billion for the third quarter of 2024. This growth in interest-earning assets resulted primarily from organic loan growth. The Company’s net interest margin during the third quarter of 2024 was 3.51%, down three basis points from 3.54% reported in the third quarter of 2023. Loan production amounted to $5.1 billion during the third quarter of 2024, with weighted average yields of 7.52%, compared with $4.8 billion and 7.56%, respectively, during the third quarter of 2023.

Total interest income, on a tax-equivalent basis, increased to $356.1 million during the third quarter of 2024, compared with $331.5 million in the same quarter of 2023. Yields on earning assets increased to 5.81% during the third quarter of 2024, compared with 5.62% reported in the third quarter of 2023. During the third quarter of 2024, loans comprised 88.6% of

average earning assets, compared with 89.1% in the same quarter of 2023. Yields on loans increased to 6.01% in the third quarter of 2024, compared with 5.81% in the same period of 2023.

The yield on interest-bearing deposits increased from 2.97% in the third quarter of 2023 to 3.44% in the third quarter of 2024. The yield on total interest-bearing liabilities increased from 3.22% in the third quarter of 2023 to 3.55% in the third quarter of 2024. Total funding costs, inclusive of noninterest-bearing demand deposits, increased to 2.50% in the third quarter of 2024, compared with 2.24% during the third quarter of 2023. Deposit costs increased from 2.00% in the third quarter of 2023 to 2.39% in the third quarter of 2024. Non-deposit funding costs increased from 5.67% in the third quarter of 2023 to 5.75% in the third quarter of 2024.

Provision for Credit Losses

The Company’s provision for credit losses during the third quarter of 2024 amounted to $6.1 million, compared with $24.5 million in the third quarter of 2023. This decrease was attributable to the updated economic forecast, partially offset by loan mix changes. The provision for credit losses for the third quarter of 2024 was comprised of $6.3 million related to loans, negative $204,000 related to unfunded commitments and negative $2,000 related to other credit losses, compared with $30.1 million related to loans, negative $5.6 million related to unfunded commitments and negative $2,000 provision related to other credit losses for the third quarter of 2023. Non-performing assets as a percentage of total assets decreased 25 basis points to 0.44% at September 30, 2024, compared with 0.69% at December 31, 2023. The decrease in non-performing assets is primarily attributable to decreases in nonaccrual loans of $55.6 million and accruing loans delinquent 90 days or more of $4.8 million, partially offset by an increase in other real estate owned of $3.3 million. The decrease in nonaccrual loans primarily resulted from a sale of MSRs which reduced exposure to GNMA nonaccrual loans from $90.2 million at December 31, 2023 to $8.2 million at September 30, 2024, partially offset by portfolio loans moved to nonaccrual during the year-to-date period. The Company recognized net charge-offs on loans during the third quarter of 2024 of approximately $8.1 million, or 0.15% of average loans on an annualized basis, compared with net charge-offs of approximately $12.1 million, or 0.23%, in the third quarter of 2023. The Company’s total allowance for credit losses on loans at September 30, 2024 was $334.5 million, or 1.60% of total loans, compared with $307.1 million, or 1.52% of total loans, at December 31, 2023. This increase is primarily attributable to organic growth in loans and the updated economic forecast.

Noninterest Income

Total noninterest income for the third quarter of 2024 was $69.7 million, an increase of $6.5 million, or 10.3%, from the $63.2 million reported in the third quarter of 2023. Income from mortgage banking activities was $37.9 million in the third quarter of 2024, an increase of $1.7 million, or 4.6%, from $36.3 million in the third quarter of 2023. Total production in the third quarter of 2024 amounted to $1.16 billion, compared with $1.18 billion in the same quarter of 2023, while gain on sale spread increased to 2.17% in the current quarter, compared with 2.15% in the same quarter of 2023. The retail mortgage open pipeline finished the third quarter of 2024 at $813.7 million, compared with $802.2 million at June 30, 2024 and $623.9 million at the end of the third quarter of 2023.

Service charges on deposit accounts increased $826,000, or 6.8%, to $12.9 million in the third quarter of 2024, compared with $12.1 million in the third quarter of 2023. Net loss on securities improved to $8,000 in the third quarter of 2024, compared with $16,000 in the third quarter of 2023. Other noninterest income increased $4.1 million, or 30.1%, to $17.7 million for the third quarter of 2024, compared with $13.6 million during the third quarter of 2023. The increase in other noninterest income was primarily attributable to a gain on sale of mortgage servicing rights of $5.2 million and an increase in BOLI income of $1.5 million, partially offset by a decline in fee income in our equipment finance division and derivative income of $1.6 million and $718,000, respectively.

Noninterest Expense

Total noninterest expense for the third quarter of 2024 increased $10.3 million, or 7.3%, to $151.8 million, compared with $141.4 million in the same quarter 2023. Salaries and employee benefits increased $6.8 million, or 8.3%, from $81.9 million in the third quarter of 2023 to $88.7 million in the third quarter of 2024, due primarily to increases in health insurance cost, annual merit increases and variable compensation related to mortgage production. Data processing and communications expenses increased $2.2 million, or 17.3%, to $15.2 million in the third quarter of 2024, compared with $13.0 million in the third quarter of 2023. Advertising and marketing expense was $4.1 million in the third quarter of 2024, compared with $2.7 million in the third quarter of 2023, with the increase primarily due to a new deposit marketing campaign initiated in the second quarter of 2024. Amortization of intangible assets decreased $245,000, or 5.5%, from $4.4 million in the third quarter of 2023 to $4.2 million in the third quarter of 2024. This decrease was primarily related to a reduction in core deposit intangible amortization. Loan servicing expenses decreased $664,000, or 7.1%, from $9.3 million in the third quarter of 2023 to $8.6 million in the third

quarter of 2024, primarily attributable to the sale of mortgage servicing rights in the second and third quarters of 2024 partially offset by additional mortgage loans serviced added from mortgage production over the previous year. Other noninterest expenses increased $603,000, or 3.2%, from $18.8 million in the third quarter of 2023 to $19.4 million in the third quarter of 2024, due primarily to an increase in legal and other professional fees of $601,000.

Income Taxes

Income tax expense is influenced by the statutory rate, the amount of taxable income, the amount of tax-exempt income and the amount of nondeductible expenses. For the third quarter of 2024, the Company reported income tax expense of $26.7 million, compared with $24.9 million in the same period of 2023. The Company’s effective tax rate for the three months ended September 30, 2024 and 2023 was 21.2% and 23.7%, respectively. The decrease in the effective rate for the three months ended September 30, 2024 is primarily related to a favorable return-to-provision adjustment resulting from reduced state apportionment.

Results of Operations for the Nine Months Ended September 30, 2024 and 2023

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of $264.3 million, or $3.83 per diluted share, for the nine months ended September 30, 2024, compared with $203.2 million, or $2.94 per diluted share, for the same period in 2023. The Company’s return on average assets and average shareholders’ equity were 1.36% and 9.98%, respectively, in the nine months ended September 30, 2024, compared with 1.07% and 8.26%, respectively, in the same period in 2023. During the first nine months of 2024, the Company recorded a pre-tax gain on conversion of its Visa Class B-1 stock of $12.6 million, a pre-tax gain on sale of mortgage servicing rights of $10.0 million, a pre-tax FDIC special assessment of $2.0 million, a pre-tax gain on BOLI proceeds of $1.5 million, a pre-tax natural disaster expense of $150,000 and a $4.8 million expense related to the termination of certain BOLI policies during the quarter, the proceeds of which the Company will reinvest in higher yielding policies. During the first nine months of 2023, the Company recorded pre-tax gain on BOLI proceeds of $486,000. Excluding these adjustment items, the Company’s net income would have been $251.6 million, or $3.64 per diluted share, for the nine months ended September 30, 2024 and $202.7 million, or $2.93 per diluted share, for the same period in 2023.

Below is a reconciliation of adjusted net income to net income, as discussed above.


	Nine Months Ended September 30,
(in thousands, except share and per share data)	2024		2023
Net income available to common shareholders	$	264,309	$	203,171
Adjustment items:

Gain on sale of MSR	(9,958)		—
Gain on conversion of Visa Class B-1 stock	(12,554)		—
Natural disaster expense	150		—
Gain on BOLI proceeds	(1,464)		(486)
FDIC special assessment	2,014		—

Tax effect of adjustment items (Note 1)	4,273		—
After tax adjustment items	(17,539)		(486)
Tax expense attributable to BOLI restructuring	4,792		—
Adjusted net income	$	251,562	$	202,685

Weighted average common shares outstanding - diluted	69,031,666		69,129,921
Net income per diluted share	$	3.83	$	2.94
Adjusted net income per diluted share	$	3.64	$	2.93

Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included.


	Nine Months Ended September 30, 2024
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	734,220	$	174,889	$	46,263	$	76,549	$	1,031,921
Interest expense	219,421		104,307		30,290		50,534		404,552
Net interest income	514,799		70,582		15,973		26,015		627,369
Provision for loan losses	45,581		(296)		334		366		45,985
Noninterest income	91,690		130,408		2,168		32		224,298
Noninterest expense
Salaries and employee benefits	181,473		69,560		2,633		6,165		259,831
Occupancy and equipment	33,952		3,014		20		174		37,160
Data processing and communications expenses	40,862		3,826		116		264		45,068
Other expenses	71,680		38,091		752		3,263		113,786
Total noninterest expense	327,967		114,491		3,521		9,866		455,845
Income before income tax expense	232,941		86,795		14,286		15,815		349,837
Income tax expense	61,110		18,227		3,000		3,191		85,528
Net income	$	171,831	$	68,568	$	11,286	$	12,624	$	264,309


	Nine Months Ended September 30, 2023
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		Premium Finance Division		Total
Interest income	$	676,003	$	155,988	$	54,931	$	61,299	$	948,221
Interest expense	155,389		91,739		37,057		35,093		319,278
Net interest income	520,614		64,249		17,874		26,206		628,943
Provision for loan losses	110,801		8,530		(372)		745		119,704
Noninterest income	77,455		106,557		2,546		22		186,580
Noninterest expense
Salaries and employee benefits	171,698		63,321		2,498		6,627		244,144
Occupancy and equipment	34,331		3,689		2		231		38,253
Data processing and communications expenses	35,596		3,518		120		224		39,458
Other expenses	67,852		35,759		644		3,160		107,415
Total noninterest expense	309,477		106,287		3,264		10,242		429,270
Income before income tax expense	177,791		55,989		17,528		15,241		266,549
Income tax expense	44,850		11,758		3,681		3,089		63,378
Net income	$	132,941	$	44,231	$	13,847	$	12,152	$	203,171

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average yield/rate paid for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the nine months ended September 30, 2024 and 2023. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.


	Nine Months Ended September 30,
	2024					2023
(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid
Assets
Interest-earning assets:
Interest-bearing deposits in banks	$	940,548	$	38,646	5.49%	$	907,433	$	33,568	4.95%
Investment securities - taxable	1,665,902		45,595		3.66%	1,688,656		44,969		3.56%
Investment securities - nontaxable	41,393		1,267		4.09%	42,168		1,277		4.05%
Loans held for sale	463,680		22,679		6.53%	510,690		22,865		5.99%
Loans	20,722,659		926,612		5.97%	20,121,143		848,375		5.64%
Total interest-earning assets	23,834,182		1,034,799		5.80%	23,270,090		951,054		5.46%
Noninterest-earning assets	2,065,435					2,155,974
Total assets	$	25,899,617				$	25,426,064

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits
NOW accounts	$	3,802,501	$	62,129	2.18%	$	3,917,476	$	50,291	1.72%
MMDA	6,238,615		173,905		3.72%	5,176,794		108,716		2.81%
Savings accounts	781,072		2,930		0.50%	976,684		5,375		0.74%
Retail CDs	2,429,505		77,062		4.24%	1,947,739		41,393		2.84%
Brokered CDs	1,347,836		53,091		5.26%	991,554		38,493		5.19%
Total interest-bearing deposits	14,599,529		369,117		3.38%	13,010,247		244,268		2.51%
Non-deposit funding

FHLB advances	375,328		14,188		5.05%	1,436,753		52,213		4.86%
Other borrowings	304,554		10,967		4.81%	330,035		13,072		5.30%
Subordinated deferrable interest debentures	131,052		10,280		10.48%	129,059		9,725		10.07%
Total non-deposit funding	810,934		35,435		5.84%	1,895,847		75,010		5.29%
Total interest-bearing liabilities	15,410,463		404,552		3.51%	14,906,094		319,278		2.86%
Demand deposits	6,528,572					6,838,618
Other liabilities	423,023					391,646
Shareholders’ equity	3,537,559					3,289,706
Total liabilities and shareholders’ equity	$	25,899,617				$	25,426,064
Interest rate spread					2.29%					2.60%
Net interest income			$	630,247				$	631,776
Net interest margin					3.53%					3.63%

On a tax-equivalent basis, net interest income for the nine months ended September 30, 2024 was $630.2 million, a decrease of $1.5 million, or 0.24%, compared with $631.8 million reported in the same period of 2023. The lower net interest income is a result of increased yield on interest-bearing deposits and a shift in deposit mix as interest rates have risen, partially offset by growth in average earning assets and increased associated market rates. Average interest earning assets increased $564.1 million, or 2.42%, from $23.27 billion in the first nine months of 2023 to $23.83 billion for the first nine months of 2024. This growth in interest earning assets resulted primarily from organic growth in average loans, partially offset by paydowns on the securities portfolio and average loans held for sale. The Company’s net interest margin during the first nine months of 2024 was 3.53%, down 10 basis points from 3.63% reported for the first nine months of 2023. Loan production amounted to $14.1 billion during the first nine months of 2024, with weighted average yields of 7.54%, compared with $14.0 billion and 7.19%, respectively, during the first nine months of 2023.

Total interest income, on a tax-equivalent basis, increased to $1.03 billion during the nine months ended September 30, 2024, compared with $951.1 million in the same period of 2023. Yields on earning assets increased to 5.80% during the first nine

months of 2024, compared with 5.46% reported in the same period of 2023. During the first nine months of 2024, loans comprised 88.9% of average earning assets, compared with 88.7% in the same period of 2023. Yields on loans increased to 5.97% during the nine months ended September 30, 2024, compared with 5.64% in the same period of 2023.

The yield on total interest-bearing liabilities increased from 2.86% during the nine months ended September 30, 2023 to 3.51% in the same period of 2024. Total funding costs, inclusive of noninterest-bearing demand deposits, increased to 2.46% in the first nine months of 2024, compared with 1.96% during the same period of 2023. Deposit costs increased from 1.65% in the first nine months of 2023 to 2.33% in the same period of 2024. Non-deposit funding costs increased from 5.29% in the first nine months of 2023 to 5.84% in the same period of 2024.

Provision for Credit Losses

The Company’s provision for credit losses during the nine months ended September 30, 2024 amounted to $46.0 million, compared with $119.7 million in the nine months ended September 30, 2023. This decrease was primarily attributable to the updated economic forecast during the first nine months of 2024, partially offset by organic loan growth. The provision for credit losses for the first nine months of 2024 was comprised of $57.2 million related to loans, negative $11.2 million related to unfunded commitments and negative $3,000 related to other credit losses, compared with $123.1 million related to loans, negative $3.4 million related to unfunded commitments and $5,000 related to other credit losses for the same period in 2023. Non-performing assets as a percentage of total assets decreased from 0.69% at December 31, 2023 to 0.44% at September 30, 2024. The decrease in non-performing assets is primarily attributable to a decrease in nonaccrual loans of $55.6 million and a decrease in accruing loans delinquent 90 days or more of $4.8 million, partially offset by an increase in other real estate owned of $3.3 million. The decrease in nonaccrual loans primarily resulted from a sale of MSRs which reduced exposure to GNMA nonaccrual loans from $90.2 million at December 31, 2023 to $8.2 million at September 30, 2024, partially offset by portfolio loans moved to nonaccrual during the year-to-date period. Net charge-offs on loans during the first nine months of 2024 were $29.8 million, or 0.19% of average loans on an annualized basis, compared with approximately $37.0 million, or 0.25%, in the first nine months of 2023. The Company’s total allowance for credit losses on loans at September 30, 2024 was $334.5 million, or 1.60% of total loans, compared with $307.1 million, or 1.52% of total loans, at December 31, 2023. This increase is primarily attributable to organic growth in loans and the updated economic forecast.

Noninterest Income

Total noninterest income for the nine months ended September 30, 2024 was $224.3 million, an increase of $37.7 million, or 20.2%, from the $186.6 million reported for the nine months ended September 30, 2023. Income from mortgage banking activities increased $15.4 million, or 14.2%, from $108.4 million in the first nine months of 2023 to $123.8 million in the same period of 2024. Total production in the first nine months of 2024 amounted to $3.39 billion, compared with $3.45 billion in the same period of 2023, while gain on sale spread increased to 2.37% during the nine months ended September 30, 2024, compared with 2.11% in the same period of 2023. The retail mortgage open pipeline was $813.7 million at September 30, 2024, compared with $400.1 million at December 31, 2023 and $623.9 million at September 30, 2023.

Net gain on securities increased to $12.3 million for the nine months ended September 30, 2024, compared with a loss of $16,000 for the nine months ended September 30, 2023. This increase was primarily due to the conversion of Visa Class B-1 stock resulting in a gain of $12.6 million and related realized gain (loss) on subsequent sales and mark-to-market adjustments post-conversion. Other noninterest income increased $6.6 million, or 16.2%, to $47.3 million for the first nine months of 2024, compared with $40.7 million during the same period of 2023. The increase in other noninterest income was primarily attributable to a gain on sale of mortgage servicing rights of $10.0 million and an increase in BOLI income of $1.7 million, partially offset by declines in derivative fee income, fee income in our equipment finance division and gain on sale of SBA loans of $2.4 million, $1.9 million and $914,000, respectively.

Noninterest Expense

Total noninterest expenses for the nine months ended September 30, 2024 increased $26.6 million, or 6.2%, to $455.8 million, compared with $429.3 million in the same period of 2023. Salaries and employee benefits increased $15.7 million, or 6.4%, from $244.1 million in the first nine months of 2023 to $259.8 million in the same period of 2024, due primarily to increases in health insurance costs, variable compensation related to mortgage production, and stock-based compensation related to performance awards, in addition to a reduction in deferred origination costs. Data processing and communications expenses increased $5.6 million, or 14.2%, to $45.1 million in the first nine months of 2024, from $39.5 million reported in the same period of 2023. Amortization of intangible assets decreased $810,000, or 5.9%, from $13.8 million in the first nine months of 2023 to $13.0 million in the first nine months of 2024. This decrease was primarily related to a reduction in core deposit intangible amortization. Loan servicing expenses increased $1.5 million, or 5.6%, from $26.4 million in the first nine months

of 2023 to $27.9 million in the same period of 2024, primarily attributable to additional mortgage loans serviced added from mortgage production over the previous year, partially offset by reductions from sales of MSRs. Other noninterest expenses increased $3.1 million, or 5.3%, from $58.4 million in the first nine months of 2023 to $61.5 million in the same period of 2024, due primarily to $2.0 million in FDIC special assessment expenses as well as a $4.1 million increase in business license expense. These increases in other noninterest expenses were partially offset by decreases from the first nine months of 2023 in fraud/forgery and other losses of $4.6 million and legal and other professional fees of $792,000.

Income Taxes

Income tax expense is influenced by the statutory rate, the amount of taxable income, the amount of tax-exempt income and the amount of nondeductible expenses. For the nine months ended September 30, 2024, the Company reported income tax expense of $85.5 million, compared with $63.4 million in the same period of 2023. The Company’s effective tax rate for the nine months ended September 30, 2024 and 2023 was 24.4% and 23.8%, respectively. The increase in the effective tax rate is primarily a result of a $4.8 million tax expense related to BOLI surrender during the period, partially offset by a favorable return-to-provision adjustment resulting from reduced state apportionment.

Financial Condition as of September 30, 2024

Securities

Debt securities classified as available-for-sale are recorded at fair value with unrealized holding gains and losses excluded from earnings and reported in accumulated other comprehensive income, net of the related deferred tax effect. Securities available-for-sale may be bought and sold in response to changes in market conditions, including, but not limited to, fluctuations in interest rates, changes in securities' prepayment risk, increases in loan demand, general liquidity needs and positioning the portfolio to take advantage of market conditions that create more economically attractive returns. Debt securities which are classified as held-to-maturity are done so based on management's positive intent and ability to hold such securities to maturity and are carried at amortized cost. Restricted equity securities are classified as other investment securities and are carried at cost and are periodically evaluated for impairment based on the ultimate recovery of par value or cost basis.

The amortization of premiums and accretion of discounts are recognized in interest income using methods approximating the interest method over the expected life of the securities. Realized gains and losses, determined on the basis of the cost of specific securities sold, are included in earnings on the trade date.

Management and the Company’s ALCO Committee evaluate available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If neither of the above criteria is met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. If credit-related impairment exists, the Company recognizes an allowance for credit losses, limited to the amount by which the fair value is less than the amortized cost basis of the security. Any impairment not recognized through an allowance for credit losses is recognized in other comprehensive income, net of tax, as a non credit-related impairment. The Company does not intend to sell these available-for-sale investment securities at an unrealized loss position at September 30, 2024, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at September 30, 2024, management determined that $66,000 was attributable to credit impairment and, accordingly, an allowance for credit losses was established. The remaining $24.4 million in unrealized loss was determined to be from factors other than credit.

The Company's held-to-maturity securities have no expected credit losses, and no related allowance for credit losses has been established.

The following table is a summary of our investment portfolio at the dates indicated:


	September 30, 2024				December 31, 2023
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available-for-sale
U.S. Treasuries	$	631,992	$	630,671	$	732,636	$	720,877
U.S. government-sponsored agencies	1,013		995		1,023		985
State, county and municipal securities	26,652		25,929		28,986		28,051
Corporate debt securities	10,946		10,226		10,946		10,027
SBA pool securities	75,276		74,192		53,033		51,516
Mortgage-backed securities	713,439		699,539		621,013		591,488
Total debt securities available-for-sale	$	1,459,318	$	1,441,552	$	1,447,637	$	1,402,944

Securities held-to-maturity

State, county and municipal securities	$	33,648	$	28,741	$	31,905	$	26,854


Mortgage-backed securities	127,572		116,973		109,607		95,877
Total debt securities held-to-maturity	$	161,220	$	145,714	$	141,512	$	122,731

The amounts of securities available-for-sale and held-to-maturity in each category as of September 30, 2024 are shown in the following table according to contractual maturity classifications: (i) one year or less; (ii) after one year through five years; (iii) after five years through ten years; and (iv) after ten years:


	U.S. Treasuries				U.S. Government-Sponsored Agencies				State, County and Municipal Securities
(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount		Yield (2)(3)
One year or less	$	272,516	2.83	%	$	995	2.16	%	$	3,978	3.95	%
After one year through five years	358,155		3.46		—		—		14,498		3.95
After five years through ten years	—		—		—		—		7,453		3.94
After ten years	—		—		—		—		—		—
	$	630,671	3.19	%	$	995	2.16	%	$	25,929	3.95	%

	Corporate Debt Securities				SBA Pool Securities				Mortgage-Backed Securities
(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount		Yield (2)
One year or less	$	—	—	%	$	2,182	2.46	%	$	11,134	2.47	%
After one year through five years	8,846		6.80		1,993		2.32		290,465		3.11
After five years through ten years	—		—		60,891		5.66		38,849		2.95
After ten years	1,380		8.27		9,126		3.25		359,091		4.02
	$	10,226	7.05	%	$	74,192	5.16	%	$	699,539	3.56	%

	State, County and Municipal Securities				Mortgage-Backed Securities
(dollars in thousands) Securities held-to-maturity (1)	Amount		Yield (2)(3)		Amount		Yield (2)
One year or less	$	—	—	%	$	—	—	%
After one year through five years	—		—		25,293		2.88
After five years through ten years	—		—		59,117		2.52
After ten years	33,648		3.94		43,162		3.45
	$	33,648	3.94	%	$	127,572	2.91	%

(1)The amortized cost of securities held-to-maturity and fair value of securities available-for-sale are presented based on contractual maturities. Actual cash flows may differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties.

(2)Yields were computed using coupon interest, adding discount accretion or subtracting premium amortization, as appropriate, on a ratable basis over the life of each security. The weighted average yield for each maturity range was computed using the amortized cost of each security in that range.

(3)Yields on securities of state and political subdivisions are stated on a taxable-equivalent basis, using a tax rate of 21%.

Loans and Allowance for Credit Losses

At September 30, 2024, gross loans outstanding (including loans and loans held for sale) were $21.52 billion, up $967.7 million from $20.55 billion reported at December 31, 2023. Loans increased $695.7 million, or 3.4%, from $20.27 billion at December 31, 2023 to $20.96 billion at September 30, 2024, driven by organic growth. Loans held for sale increased from $281.3 million at December 31, 2023 to $553.4 million at September 30, 2024 primarily in our mortgage division.

The Company regularly monitors the composition of the loan portfolio to evaluate the adequacy of the allowance for credit losses ("ACL") on loans in light of the impact that changes in the economic environment may have on the loan portfolio. The Company focuses on the following loan categories: (1) commercial, financial and agricultural; (2) consumer; (3) indirect automobile; (4) mortgage warehouse; (5) municipal; (6) premium finance; (7) construction and development related real estate; (8) commercial and farmland real estate; and (9) residential real estate. The Company’s management has strategically located its branches in select markets in Georgia, Alabama, Florida, North Carolina and South Carolina to take advantage of the growth in these areas.

The Company’s risk management processes include a loan review program designed to evaluate the credit risk in the loan portfolio and ensure credit grade accuracy. Through the loan review process, the Company conducts (1) a loan portfolio summary analysis, (2) charge-off and recovery analysis, (3) trends in accruing problem loan analysis, and (4) problem and past-due loan analysis. This analysis process serves as a tool to assist management in assessing the overall quality of the loan portfolio and the adequacy of the ACL. Loans classified as “substandard” are loans which are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses and/or questionable collateral values. Loans classified as “doubtful” are those loans that have characteristics similar to substandard loans but have an increased risk of loss. Loans classified as “loss” are those loans which are considered uncollectible and are in the process of being charged off.

The Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, and net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL.

Expected credit losses are reflected in the ACL through a charge to credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible the appropriate amount is written off and the ACL is reduced by the same amount. The Company applies judgment to determine when a financial asset is deemed uncollectible; however, generally speaking, an asset will be considered uncollectible no later than when all efforts at collection have been exhausted. Subsequent recoveries, if any, are credited to the ACL when received.

The Company measures expected credit losses of financial assets on a collective (pool) basis, when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company currently uses the DCF method or the PD×LGD method which may be adjusted for qualitative factors.

The Company’s methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. The Company’s methodologies revert back to historical loss information on a straight-line basis over four quarters when the Company can no longer develop reasonable and supportable forecasts.

At the end of the third quarter of 2024, the ACL on loans totaled $334.5 million, or 1.60% of loans, compared with $307.1 million, or 1.52% of loans, at December 31, 2023. Our nonaccrual loans decreased from $151.1 million at December 31, 2023 to $95.5 million at September 30, 2024. For the first nine months of 2024, our net charge off ratio as a percentage of average loans decreased to 0.19%, compared with 0.25% for the first nine months of 2023. The total provision for credit losses for the first nine months of 2024 was $46.0 million, decreasing from a provision of $119.7 million recorded for the first nine months of 2023. Our ratio of total nonperforming assets to total assets was down 25 basis points from 0.69% at December 31, 2023 to 0.44% at September 30, 2024.

The following table presents an analysis of the allowance for credit losses on loans, provision for credit losses on loans and net charge-offs as of and for the nine months ended September 30, 2024 and 2023:


	Nine Months Ended September 30,
(dollars in thousands)	2024		2023
Balance of allowance for credit losses on loans at beginning of period	$	307,100	$	205,677
Adjustment to allowance for adoption of ASU 2022-02	—		(1,711)
Provision charged to operating expense	57,184		123,114
Charge-offs:
Commercial, financial and agricultural	40,150		42,068
Consumer	2,836		4,140
Indirect automobile	138		135


Premium finance	6,910		5,220

Real estate – commercial and farmland	571		3,320
Real estate – residential	49		231
Total charge-offs	50,654		55,114

Recoveries:
Commercial, financial and agricultural	12,286		10,333
Consumer	611		694
Indirect automobile	466		599


Premium finance	6,605		4,701
Real estate – construction and development	54		646
Real estate – commercial and farmland	655		476
Real estate – residential	150		689
Total recoveries	20,827		18,138
Net charge-offs	29,827		36,976
Balance of allowance for credit losses on loans at end of period	$	334,457	$	290,104

The following table presents an analysis of the allowance for credit losses on loans and net charge-offs for loans held for investment:


	As of and for the Nine Months Ended
(dollars in thousands)	September 30, 2024			September 30, 2023
Allowance for credit losses on loans at end of period	$	334,457		$	290,104
Net charge-offs for the period	29,827			36,976
Loan balances:
End of period	20,964,981			20,201,079
Average for the period	20,722,659			20,121,143
Net charge-offs as a percentage of average loans (annualized)	0.19		%	0.25		%
Allowance for credit losses on loans as a percentage of end of period loans	1.60		%	1.44		%

Loans

Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table:


(dollars in thousands)	September 30, 2024		December 31, 2023
Commercial, financial and agricultural	$	2,949,957	$	2,688,929
Consumer	210,310		241,552
Indirect automobile	10,891		34,257
Mortgage warehouse	985,910		818,728
Municipal	449,561		492,668
Premium finance	1,246,452		946,562
Real estate – construction and development	2,232,114		2,129,187
Real estate – commercial and farmland	8,249,981		8,059,754
Real estate – residential	4,629,805		4,857,666
	$	20,964,981	$	20,269,303

Commercial real estate (“CRE”) represents the Company's largest loan category. The Company regularly monitors its CRE portfolio against regulatory concentration limits. Additionally, the Company manages its risk in the CRE portfolio through, among other things, established policy limits on loan-to-value or loan-to-cost at or below applicable regulatory guidance, use of internal lending limits on single loans to minimize exposure to a given project, annual reviews of borrowers and guarantors above certain total credit exposure thresholds, minimum required debt service coverage ratios and borrower equity levels. Exceptions to policy must be approved by an individual or committee with appropriate approval authority.

A summary of the Company's CRE portfolio by loan type and credit quality indicator as of September 30, 2024 and December 31, 2023 is below:


September 30, 2024 (dollars in thousands)	Pass		Other Assets Especially Mentioned		Substandard		Total
Farmland	$	136,305	$	2,169	$	678	$	139,152
Multifamily residential	1,295,806		110		—		1,295,916
Owner occupied CRE	1,851,161		7,126		39,362		1,897,649
Non-owner occupied CRE	4,822,821		84,830		9,613		4,917,264
Total real estate - commercial and farmland	$	8,106,093	$	94,235	$	49,653	$	8,249,981


December 31, 2023 (dollars in thousands)	Pass		Other Assets Especially Mentioned		Substandard		Total
Farmland	$	158,456	$	—	$	635	$	159,091
Multifamily residential	877,970		50,000		—		927,970
Owner occupied CRE	1,858,658		29,668		27,114		1,915,440
Non-owner occupied CRE	4,973,466		67,362		16,425		5,057,253
Total real estate - commercial and farmland	$	7,868,550	$	147,030	$	44,174	$	8,059,754

The Company's non-owner occupied portfolio is well diversified. Below is a summary of the non-owner occupied CRE portfolio by property type as of September 30, 2024 and December 31, 2023:


(dollars in thousands)	September 30, 2024		December 31, 2023
Anchored Retail	$	1,092,365	$	1,143,155
Office	948,783		1,017,627
Warehouse / industrial	711,876		679,877
Strip center, non-anchored	557,401		582,921
Hotel	432,559		460,060
Retail	369,011		373,507
Mini storage warehouse	338,983		337,660
Medical office building	238,825		219,318
Assisted living facilities	115,047		132,900
Miscellaneous	112,414		110,228
Total non-owner occupied CRE	$	4,917,264	$	5,057,253

Non-Performing Assets

Non-performing assets include nonaccrual loans, accruing loans contractually past due 90 days or more, repossessed personal property, and OREO. Loans are placed on nonaccrual status when management has concerns relating to the ability to collect the principal and interest and generally when such loans are 90 days or more past due. Management performs a detailed review and valuation assessment of non-performing loans over $250,000 on a quarterly basis. When a loan is placed on nonaccrual status, any interest previously accrued but not collected is reversed against current income.

Nonaccrual loans totaled $95.5 million at September 30, 2024, a decrease of $55.6 million, or 36.8%, from $151.1 million at December 31, 2023. Accruing loans delinquent 90 days or more totaled $12.2 million at September 30, 2024, a decrease of $4.8 million, or 28.0%, compared with $17.0 million at December 31, 2023. At September 30, 2024, OREO totaled $9.5 million, an increase of $3.3 million, or 53.0%, compared with $6.2 million at December 31, 2023. Management regularly assesses the valuation of OREO through periodic reappraisal and through inquiries received in the marketing process. At the end of the third quarter of 2024, total non-performing assets as a percent of total assets was down 25.00 basis points from 0.69% at December 31, 2023 to 0.44% at September 30, 2024.

Non-performing assets at September 30, 2024 and December 31, 2023 were as follows:


(dollars in thousands)	September 30, 2024		December 31, 2023
Nonaccrual loans(1)	$	95,507	$	151,117
Accruing loans delinquent 90 days or more	12,234		16,988
Repossessed assets	19		17
Other real estate owned	9,482		6,199
Total non-performing assets	$	117,242	$	174,321

(1) Included in nonaccrual loans were $8.2 million and $90.2 million of serviced GNMA-guaranteed nonaccrual loans at September 30, 2024 and December 31, 2023, respectively.

Commercial Lending Practices

The federal bank regulatory agencies previously issued interagency guidance on commercial real estate lending and prudent risk management practices. This guidance defines CRE loans as loans secured by raw land, land development and construction (including one-to-four family residential construction), multi-family property and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property, excluding owner-occupied properties (loans for which 50% or more of the source of repayment is derived from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property) or the proceeds of the sale, refinancing or permanent financing of the property. Loans for owner-occupied CRE are generally excluded from the CRE guidance.

The CRE guidance is applicable when either:

(1)total loans for construction, land development, and other land, net of owner-occupied loans, represent 100% or more of a tier I capital plus allowance for credit losses on loans and leases; or

(2)total loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land, net of owner-occupied loans, represent 300% or more of a bank’s tier I capital plus allowance for credit losses on loans and leases.

Banks that are subject to the CRE guidance criteria are required to implement enhanced strategic planning, CRE underwriting policies, risk management and internal controls, portfolio stress testing, risk exposure limits, and other policies, including management compensation and incentives, to address the CRE risks. Higher allowances for loan losses and capital levels may also be appropriate.

As of September 30, 2024, the Company exhibited a concentration in the CRE loan category based on Federal Reserve Call codes. The primary risks of CRE lending are:

(1)within CRE loans, construction and development loans are somewhat dependent upon continued strength in demand for residential real estate, which is reliant on favorable real estate mortgage rates and changing population demographics;

(2)on average, CRE loan sizes are generally larger than non-CRE loan types; and

(3)certain construction and development loans may be less predictable and more difficult to evaluate and monitor.

The following table outlines CRE loan categories and CRE loans as a percentage of total loans as of September 30, 2024 and December 31, 2023. The loan categories and concentrations below are based on Federal Reserve Call codes:


	September 30, 2024			December 31, 2023
(dollars in thousands)	Balance		% of Total Loans	Balance		% of Total Loans
Construction and development loans	$	2,232,115	11%	$	2,129,187	11%
Multi-family loans	1,295,916		6%	927,970		5%
Nonfarm non-residential loans (excluding owner-occupied)	4,917,264		23%	5,057,253		25%
Total CRE Loans (excluding owner-occupied)	8,445,295		40%	8,114,410		40%
All other loan types	12,519,686		60%	12,154,893		60%
Total Loans	$	20,964,981	100%	$	20,269,303	100%

The following table outlines the percentage of construction and development loans and total CRE loans, net of owner-occupied loans, to the Bank’s tier I capital plus allowance for credit losses on loans and leases, and the Company’s internal concentration limits as of September 30, 2024 and December 31, 2023:


	Internal Limit	Actual
		September 30, 2024	December 31, 2023
Construction and development loans	100%	71%	74%
Total CRE loans (excluding owner-occupied)	300%	270%	282%

Derivative Instruments and Hedging Activities

The Company has forward contracts and IRLCs to economically hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of IRLC instruments amounted to an asset of $5.1 million and $3.6 million at September 30, 2024 and December 31, 2023, respectively. At September 30, 2024 and December 31, 2023 forward contracts were recorded with a liability balance of $2.0 million and $5.8 million, respectively. The Company also enters into interest rate derivative agreements to facilitate the risk management strategies of certain clients. The Company mitigates this risk by entering into equal and offsetting interest rate derivative agreements with highly rated third-party financial institutions. The fair value of these instruments amounted to an asset of $6.6 million and $5.9 million at September 30, 2024 and December 31, 2023, respectively, and a liability of $7.0 million and $6.2 million at September 30, 2024 and December 31, 2023, respectively.

Deposits

Total deposits at the Company increased $1.17 billion, or 5.7%, to $21.88 billion at September 30, 2024, compared with $20.71 billion at December 31, 2023. Noninterest-bearing deposits increased $178.7 million, or 2.8%, and interest-bearing deposits increased $992.1 million, or 7.0%, during the first nine months of 2024. At September 30, 2024, the Company had approximately $1.64 billion in short-term brokered CDs, compared with $1.14 billion at December 31, 2023. As of September 30, 2024 and December 31, 2023, the Company had estimated uninsured deposits of $9.47 billion and $9.13 billion, respectively. These estimates were derived using the same methodologies and assumptions used for the Bank's regulatory reporting. Approximately $2.64 billion, or 27.9%, of the uninsured deposits at September 30, 2024 were for municipalities which are collateralized with investment securities or letters of credit.

Capital

Common Stock Repurchase Program

On September 19, 2019, the Company announced that its Board of Directors authorized the Company to repurchase up to $100.0 million of its outstanding common stock through October 31, 2020. The Board has subsequently extended the share repurchase program each year since that original authorization, with the most recent extension, which also included the replenishment of the program to $100.0 million, being announced on October 24, 2024. As a result, the Company is currently authorized to engage in additional share repurchases up to $100.0 million through October 31, 2025. Repurchases of shares must be made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases will be based on a variety of factors, including share acquisition price, regulatory limitations and other market and economic factors. The program does not require the Company to repurchase any specific number of shares. As of September 30, 2024, an aggregate of $8.3 million, or 194,274 shares of the Company's common stock, had been repurchased under the program's October 26, 2023 renewal, which also included the replenishment of the program to $100.0 million.

Capital Management

Capital management consists of providing equity to support both current and anticipated future operations. The capital resources of the Company are monitored on a periodic basis by state and federal regulatory authorities.

Under the regulatory capital frameworks adopted by the Federal Reserve Board (the "FRB") and the Federal Deposit Insurance Corporation (the "FDIC"), the Company and the Bank must each maintain a common equity Tier 1 capital to total risk-weighted assets ratio of at least 4.5%, a Tier 1 capital to total risk-weighted assets ratio of at least 6%, a total capital to total risk-weighted assets ratio of at least 8% and a leverage ratio of Tier 1 capital to average total consolidated assets of at least 4%. The Company and the Bank are also required to maintain a capital conservation buffer of common equity Tier 1 capital of at least 2.5% of risk-weighted assets in addition to the minimum risk-based capital ratios in order to avoid certain restrictions on capital distributions and discretionary bonus payments.

In March 2020, the Office of the Comptroller of the Currency, the FRB and the FDIC issued an interim final rule that delays the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule provides banking organizations that implement CECL in 2020 the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. As a result, the Company and Bank elected the five-year transition relief allowed under the interim final rule effective March 31, 2020.

As of September 30, 2024, under the regulatory capital standards, the Bank was considered “well capitalized” under all capital measurements. The following table sets forth the regulatory capital ratios of for the Company and the Bank at September 30, 2024 and December 31, 2023:


	September 30, 2024	December 31, 2023
Tier 1 Leverage Ratio (tier 1 capital to average assets)
Consolidated	10.40%	9.93%
Ameris Bank	11.14%	10.69%
CET1 Ratio (common equity tier 1 capital to risk weighted assets)
Consolidated	12.16%	11.23%
Ameris Bank	13.02%	12.09%
Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)
Consolidated	12.16%	11.23%
Ameris Bank	13.02%	12.09%
Total Capital Ratio (total capital to risk weighted assets)
Consolidated	15.35%	14.45%
Ameris Bank	14.61%	13.69%

Interest Rate Sensitivity and Liquidity

The Company’s primary market risk exposures are credit risk, interest rate risk, and liquidity risk. The Bank operates under an Asset Liability Management Policy approved by the Company’s Board of Directors and the ALCO Committee. The policy outlines limits on interest rate risk in terms of changes in net interest income and changes in the net market values of assets and liabilities over certain changes in interest rate environments. These measurements are made through a simulation model which projects the impact of changes in interest rates on the Bank’s assets and liabilities. The policy also outlines responsibility for monitoring interest rate risk, and the process for the approval, implementation and monitoring of interest rate risk strategies to achieve the Bank’s interest rate risk objectives.

The ALCO Committee is comprised of senior officers of Ameris. The ALCO Committee makes all strategic decisions with respect to the sources and uses of funds that may affect net interest income, including net interest spread and net interest margin. The objective of the ALCO Committee is to identify the interest rate, liquidity and market value risks of the Company’s balance sheet and use reasonable methods approved by the Company’s Board of Directors and executive management to minimize those identified risks.

The normal course of business activity exposes the Company to interest rate risk. Interest rate risk is managed within an overall asset and liability framework for the Company. The principal objectives of asset and liability management are to predict the sensitivity of net interest spreads to potential changes in interest rates, control risk and enhance profitability. Funding positions are kept within predetermined limits designed to properly manage risk and liquidity. The Company employs sensitivity analysis in the form of a net interest income simulation to help characterize the market risk arising from changes in interest rates. In addition, fluctuations in interest rates usually result in changes in the fair market value of the Company’s financial instruments, cash flows and net interest income. The Company’s interest rate risk position is managed by the ALCO Committee.

The Company uses a simulation modeling process to measure interest rate risk and evaluate potential strategies. Interest rate scenario models are prepared using software created and licensed from an outside vendor. The Company’s simulation includes all financial assets and liabilities. Simulation results quantify interest rate risk under various interest rate scenarios. Management then develops and implements appropriate strategies. The ALCO Committee has determined that an acceptable level of interest rate risk would be for net interest income to increase/decrease no more than 20% given a change in selected interest rates of 200 basis points over any 24-month period.

Liquidity management involves the matching of the cash flow requirements of customers, who may be either depositors desiring to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs, and the ability of Ameris to manage those requirements. The Company strives to maintain an adequate liquidity position by managing the balances and maturities of interest-earning assets and interest-bearing liabilities so that the balance it has in short-term assets at any given time will adequately cover any reasonably anticipated immediate need for funds. Additionally, the Bank maintains relationships with correspondent banks, which could provide funds on short notice, if needed. The Company has invested in FHLB stock for the purpose of establishing credit lines with the FHLB. The credit availability to the Bank is equal to 30% of the Bank’s total assets as reported on the most recent quarterly financial information submitted to the regulators subject to the pledging of sufficient collateral. At September 30, 2024 and December 31, 2023, the net carrying value of the

Company’s other borrowings was $346.4 million and $509.6 million, respectively. At September 30, 2024, the Company had availability with the FHLB and FRB Discount Window of $3.94 billion and $2.49 billion, respectively.

The following liquidity ratios compare certain assets and liabilities to total deposits or total assets:


	September 30, 2024	June 30, 2024	March 31, 2024	December 31, 2023	September 30, 2023
Investment securities available-for-sale to total deposits	6.59%	7.14%	6.74%	6.77%	6.92%
Loans (net of unearned income) to total deposits	95.82%	97.89%	98.11%	97.88%	98.11%
Interest-earning assets to total assets	92.09%	92.17%	91.91%	91.67%	91.67%
Interest-bearing deposits to total deposits	69.51%	68.99%	68.86%	68.65%	68.00%

The liquidity resources of the Company are monitored continually by the ALCO Committee and on a periodic basis by state and federal regulatory authorities. As determined under guidelines established by these regulatory authorities, the Company’s and the Bank’s liquidity ratios at September 30, 2024 were considered satisfactory. The Company is aware of no events or trends likely to result in a material change in liquidity.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company is exposed only to U.S. dollar interest rate changes, and, accordingly, the Company manages exposure by considering the possible changes in the net interest margin. The Company does not have any trading instruments nor does it classify any portion of the investment portfolio as held for trading.

The Company also has forward contracts and IRLCs to economically hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of these instruments amounted to an asset of approximately $5.1 million and $3.6 million at September 30, 2024 and December 31, 2023, respectively, and a liability of $2.0 million and $5.8 million at September 30, 2024 and December 31, 2023, respectively. The Company also enters into interest rate derivative agreements to facilitate the risk management strategies of certain clients. The Company mitigates this risk by entering into equal and offsetting interest rate derivative agreements with highly rated third-party financial institutions. The fair value of these instruments amounted to an asset of $6.6 million and $5.9 million at September 30, 2024 and December 31, 2023, respectively, and a liability of $7.0 million and $6.2 million at September 30, 2024 and December 31, 2023, respectively.

The Company has no exposure to foreign currency exchange rate risk, commodity price risk and other market risks.

Interest rates play a major part in the net interest income of a financial institution. The sensitivity to rate changes is known as “interest rate risk.” The repricing of interest-earning assets and interest-bearing liabilities can influence the changes in net interest income. As part of the Company’s asset/liability management program, the timing of repriced assets and liabilities is referred to as “gap management.”

The Company uses simulation analysis to monitor changes in net interest income due to changes in market interest rates. The simulation of rising, declining and flat interest rate scenarios allows management to monitor and adjust interest rate sensitivity to minimize the impact of market interest rate swings. The analysis of the impact on net interest income over a 12-month and 24-month period is subjected to gradual and parallel shocks of 100, 200, 300 and 400 basis point increases and decreases in market rates and is monitored on a quarterly basis.

The following table presents the earnings simulation model’s projected impact of a change in interest rates on the projected baseline net interest income for the 12- and 24-month periods commencing October 1, 2024. This change in interest rates assumes parallel shifts in the yield curve and does not take into account changes in the slope of the yield curve.


Earnings Simulation Model Results
Change in	% Change in Projected Baseline
Interest Rates	Net Interest Income
(in bps)	12 Months	24 Months
400	(5.3)%	8.1%
300	(0.8)%	8.3%
200	1.1%	6.5%
100	0.8%	3.8%
(100)	(0.8)%	(3.9)%
(200)	(1.6)%	(8.3)%
(300)	(2.2)%	(12.7)%
(400)	(2.0)%	(15.2)%

Additional information required by Item 305 of Regulation S-K is set forth under Part I, Item 2 of this report.

Item 4. Controls and Procedures.

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this report, as required by paragraph (b) of Rules 13a-15 or 15d-15 of the Exchange Act. Based on such evaluation, such officers have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

During the quarter ended September 30, 2024, there was no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Disclosure concerning legal proceedings can be found in Part I - "Financial Information, Item 1. Financial Statements, Notes to Unaudited Consolidated Financial Statements, Note 8 – Commitments and Contingencies" under the caption, "Litigation and Regulatory Contingencies," which is incorporated herein by reference.

Item 1A. Risk Factors.

There have not been any material changes to the risk factors disclosed in Item 1A. of Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, previously filed with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

c) Issuer Purchases of Equity Securities.

The table below sets forth information regarding the Company’s repurchase of shares of its outstanding common stock during the three month period ended September 30, 2024.


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs(1)
July 1, 2024 through July 31, 2024	—	$	—	—	$	91,704,867
August 1, 2024 through August 31, 2024	—	$	—	—	$	91,704,867
September 1, 2024 through September 30, 2024	—	$	—	—	$	91,704,867
Total	—	$	—	—	$	91,704,867

(1)On September 19, 2019, the Company announced that its board of directors authorized the Company to repurchase up to $100.0 million of its outstanding common stock through October 31, 2020. The Board has subsequently extended the share repurchase program each year since the original authorization, with the most recent extension, which also included the replenishment of the program to $100.0 million, being announced on October 24, 2024. As a result, the Company is currently authorized to engage in additional share repurchases totaling up to $100.0 million through October 31, 2025. Repurchases of shares must be made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases will be based on a variety of factors, including share acquisition price, regulatory limitations and other market and economic factors. The program does not require the Company to repurchase any specific number of shares. As of September 30, 2024, an aggregate of $8.3 million, or 194,274 shares of the Company's common stock, had been repurchased under the program's October 26, 2023 renewal, which also included the replenishment of the program to $100.0 million.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the quarter ended September 30, 2024, no director or Section 16 officer of the Company adopted or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K).

On November 6, 2024, the Company and the Bank, together with H. Palmer Proctor, Jr., the Chief Executive Officer of the Company and the Bank, entered into a Second Amendment (the “Amendment”) to Mr. Proctor’s Employment Agreement dated as of December 17, 2018 (as previously amended, the “Employment Agreement”). The Amendment, which will become effective on July 2, 2027 in the event the term of the Employment Agreement is again renewed at such time for an additional three-year period, conforms certain of the provisions in the Employment Agreement, relating to the definition of “Change of Control” and the form of payment of severance to be made in the event Mr. Proctor has a termination of employment on or within one year following a Change of Control, to the terms of the Severance Protection and Restrictive Covenants Agreements previously entered into by the Company, the Bank and other executive officers.

Item 6. Exhibits.


Exhibit Number						Description

3.1						Restated Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on February 28, 2023).

3.2						Bylaws of Ameris Bancorp, as amended and restated through February 23, 2023 (incorporated by reference to Exhibit 3.2 to Ameris Bancorp's Quarterly Report on Form 10-Q filed with the SEC on May 8, 2023).

10.1*						Second Amendment to Employment Agreement by and among Ameris Bancorp, Ameris Bank and H. Palmer Proctor, Jr. dated as of November 6, 2024.

31.1						Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Executive Officer.

31.2						Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Financial Officer.

32.1						Section 1350 Certification by the Company’s Chief Executive Officer.

32.2						Section 1350 Certification by the Company’s Chief Financial Officer.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

* Management contract or a compensatory plan or arrangement.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: November 8, 2024			AMERIS BANCORP

			/s/ Nicole S. Stokes
			Nicole S. Stokes
			Chief Financial Officer (duly authorized signatory and principal accounting and financial officer)

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Ameris Bancorp (ABCB) 10-Q2024 Q3 Quarterly report

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