Third Quarter Conference Call - AMERIS BANCORP

Explicit Guidance:

• Efficiency Ratio: Full-year adjusted efficiency ratio expected to finish near 49.84%, with Q4 guidance targeting ~50%.
• Net Interest Income (NII): Anticipated growth driven by earning asset expansion, though potential margin compression expected in coming quarters due to deposit cost increases.
• Net Charge-Offs (NCO): Near-term guidance reiterated at 20 to 25 basis points (annualized); Q3 actuals improved to 19 basis points.
• Loan Growth: Near-term growth guidance in the mid-single-digit range; long-term deposit growth identified as the primary governor for loan growth.
• Operating Expenses (Non-Mortgage): Annualized run rate anticipated between $165 million and $169 million per quarter for the year, with consensus potentially overstating growth.
• Tangible Book Value (TBV): Projected to grow 5% on an annualized basis excluding AOCI; excluding AOCI impact, growth exceeded 14% in the quarter.

Business-Segment Outlook:

• Loan Mix: Full-year growth expected to mirror Q3 diversification (C&I, residential mortgage, construction); CRE payoffs anticipated to slow, potentially allowing incremental CRE growth if production offsets.
• Mortgage Business: Production expected to decline seasonally in Q4 and Q1 of next year; purchase volume expected to benefit from potential pullback in 10-year yields as borrowers seek to refinance later.
• Equipment Finance: Performing within expectations following a credit box retooling; criticized/classified ratios trending toward normalization without systemic issues.
• Nashville Expansion: Small team expected to focus on relationship building and deposit funding through year-end; success metrics tied to deposit mix and loan funding support rather than immediate volume.

Market and Competitive Outlook:

• Pricing Discipline: Management intends to avoid "irrational pricing" or "chasing deals" despite competitive pressure; focus remains on profitable growth rather than volume expansion alone.
• Loan Demand & Pipeline: Loan pipelines remain full with no observed fallout; however, emerging "cautious optimism" expected regarding new project initiation in Q4/Q1, potentially influenced by election-cycle timing.
• Deposit Competition: Faced with competitive pressure driving up deposit pricing; migration from non-interest-bearing to interest-bearing deposits anticipated to increase overall deposit costs.
• Asset Sensitivity: Slightly asset-sensitive; model suggests 1bps margin benefit per 25bps rate hike, though competitive deposit pricing may offset this.

Macro / Industry Outlook:

• Interest Rate Environment: Management views gradual rate hikes (25-50bps) as absorbable by customers; warns that erratic jumps (75-100bps) could create shock effects.
• Customer Capacity: Strong customer equity and debt service coverage ratios cited as enabling capacity to absorb higher borrowing costs compared to prior recessionary cycles.
• Economic Outlook: Macro conditions expected to drive caution in new initiatives in the coming months; industry-wide assumption of stable loan rates and rising deposit costs deemed "short-lived" as lenders pass costs through.

Strategic Initiatives:

• Share Buybacks: Board authorized new $200 million repurchase program; buybacks to be executed opportunistically given strong profitability and capital accretion.
• Capital Deployment Priority: Hierarchy established as: 1) Organic profitable growth, 2) Opportunistic share buybacks, 3) Modest dividend maintenance, 4) Selective M&A (requires unique cultural/financial fit).
• Hiring Strategy: Net-zero hiring expected to maintain current growth targets; reliance on upskilling existing workforce rather than expensive new hires.
• Balance Sheet Management: Excess liquidity available to be deployed into bond portfolio if deposit growth outpaces loan growth; bond book currently represents ~10% of earning assets.

Risks and Headwinds to Outlook:

• Margin Compression: Potential downside risk to Net Interest Margin (NIM) over next few quarters due to rising funding costs and competitive deposit pricing, offsetting loan yield improvements.
• Deposit Beta: Deposit betas in this cycle expected to align with prior cycles, potentially increasing in Q4 as late Q3 rate hikes fully flow through; risk of deposit migration to interest-bearing products.
• Pipeline Volatility: Potential for reduced new loan demand in Q4/Q1 driven by macroeconomic caution and election-cycle uncertainty.
• Expense Volatility: Mortgage-related expenses could rise if revenue environment improves unexpectedly, though base case assumes consistency or slight decline.

Management Tone on the Future:

• Confidence Level: High confidence in "profitable growth" strategy, citing strong capital positions (CET1 >13%), fortress balance sheet, and credit quality well above peers.
• Discipline: Repeated emphasis on avoiding "foolish" competition and maintaining measured growth; belief that existing team is sufficient for mid-single-digit growth targets without significant hiring.
• Guidance Stance: Forward-looking statements are hedged with standard risks; management notes that consensus may be too optimistic regarding expense growth and mortgage revenue.

Miscellaneous:

• Reserve Coverage: Strong reserve coverage maintained at 162% of total loans (315% of portfolio NPAs).
• Capital Ratios: Tangible Common Equity (TCE) ratio at 11.14%; Total Risk-Based Capital ratio at 15%.