AMERIS BANCORP, today reported net income available to common shareholders of $6.2 million, or $0.26 per diluted share, for the quarter ended June 30, 2013, compared to $1.7 million, or $0.07 per diluted share, for the quarter ended June 30, 2012.  For the year to date period ending June 30, 2013, the Company reported net income available to common shareholders of $11.1 million, or $0.46 per diluted share, compared to$6.2 million, or $0.26 per diluted share, for the same period in 2012.  Commenting on the Company's quarterly results, Edwin W. Hortman, Jr., the Company's President and Chief Executive Officer, said, "The positive trends on loan and revenue growth continue to ramp.  These trends coupled with improved operating expense control and lower levels of credit costs resulted in a much improved return on average assets of 0.95% in the second quarter of 2013 compared to 0.34% for the second quarter of 2012."

Highlights of the results for the second quarter of 2013 include the following:

• Net income available to common shareholders increased 28.7% compared to the first quarter of 2013.
• Return on average assets and return on average tangible equity increased to 0.95% and 10.66%, respectively.
• Total revenue increased to $43.3 million in the second quarter of 2013 compared to $41.9 million in the second quarter in 2012.
• The Company's net interest margin was 4.96% in the second quarter of 2013, compared to 4.66% in the second quarter of 2012 and 4.79% in the first quarter of 2013.
• Non-covered loans increased by $63.1 million during the quarter.
• Tangible common equity to tangible assets increased to 9.15% at June 30, 2013, compared to 8.83% at March 31, 2013.
• Total non-covered classified assets decreased 8.8% compared to March 31, 2013.
• Noninterest income was $11.4 million, compared to $8.9 million in the second quarter of 2012.

Operating Results 
Net income in the second quarter of 2013 totaled $6.7 million before preferred dividends, an increase of 167.7% compared to the same quarter in 2012.  For the year to date period, the Company's earnings before preferred dividends were $12.0 million, compared to $7.9 million in the year to date period in 2012.  Return on average assets and average tangible common equity increased to 0.95% and 10.66%, respectively, in the second quarter of 2013 compared to 0.34% and 4.12%, respectively, in the same quarter of 2012.

Net Interest Income and Net Interest Margin 
Net interest income for the second quarter of 2013 totaled $29.5 million, an increase of $595,000, or 2.1%, compared to the $28.9 million reported for the second quarter of 2012.  The Company's net interest margin increased during the quarter to 4.96%, compared to 4.66% during the second quarter of 2012. 

Yields on earning assets in the second quarter of 2013 were 5.38%, compared to 5.21% in the first quarter of 2013 and compared to 5.33% in the second quarter in 2012.  An improving mix of earning assets, more heavily concentrated in loans, helped offset declining yields on the Company's loan portfolio.  Average loans comprised 84.1% of average earning assets in the second quarter of 2013, compared to 79.0% in the second quarter of 2012.

Yields on legacy loans for the second quarter of 2013 were 5.42%, compared to 5.75% in the same quarter in 2012.  Production yields in the most recent quarter were 5.01%, compared to 5.43% in the second quarter of 2012.   While yields on production of new and renewed loans are below current portfolio yields, management anticipates the revenue impact to be muted as they expect continued growth in total loans and less interest rate pressure due to a recent increase in interest rates. 

Declines in legacy loan yields were partially offset by increases in yields on covered loans.  Covered loan yields increased to 8.18% in the second quarter of 2013, compared to 7.22% in the same quarter of 2012.  Continued resolution of problem credits and shorter amortization periods led to higher than expected accretion on covered assets. 

The Company continued to experience savings on deposit costs, albeit at a slower pace than what had been experienced in the recent past.  Total costs of deposits fell to 0.34%, compared to 0.36% in the first quarter of 2013 and 0.56% in the second quarter of 2012.  Savings on time deposits were most significant, with CD costs falling from 1.12% in the second quarter of 2012 to 0.74% in the second quarter of 2013.  Additional savings have been achieved from improvement in the deposit mix, with time deposits representing only 27.5% of total deposits in the current quarter in 2013, compared to 32.4% in the second quarter of 2012.

Non-interest Income 
Non-interest income in the second quarter of 2013 improved to $11.4 million, compared to $8.9 millionin the same quarter of 2012.  The Company's mortgage operations continued to grow during the second quarter of 2013, as mortgage revenues increased to $5.0 million for the quarter, compared to$3.0 million for the same quarter of 2012.  Purchase mortgage originations accounted for 70% of the Company's total mortgage business in the second quarter of 2013, compared to 61% in the first quarter of 2013 and 64% in the second quarter of 2012.  Commenting on mortgage activity, Mr. Hortman added, "Mortgage revenues have been growing consistently as we build our ranks of producers, focusing mostly on those with good realtor or builder relationships.  While we are cautious about the impact of higher rates, we believe our emphasis on purchase transactions will help sustain our revenues in the higher rate environment."  The Company reported that the average number of daily applications taken thus far in the third quarter of 2013 has been only 4% lower than the average during the second quarter of 2013.

Non-interest Expense 
Total operating expenses for the second quarter of 2013 were mostly unchanged at $26.7 million, compared to $26.6 million for the same quarter of 2012.  Salaries and benefits increased to $13.4 million in the current quarter of 2013, compared to $12.1 million in the same quarter in 2012, as commissions and support costs in the Company's mortgage operations increased commensurate with the increase in revenues.  Excluding compensation costs in the Company's mortgage operations, salaries and benefits declined to $10.5 million in the second quarter of 2013, compared to $11.0 million in the first quarter of 2013 and $10.7 million in the second quarter of 2012.

Increases in compensation costs were offset by declines in non-provision credit-related costs, which fell from $3.4 million in the second quarter of 2012 to $2.3 million in the second quarter of 2013.  Occupancy and equipment costs, as well as data processing and telecommunications expense, were steady compared to prior year levels.  Other operating expenses for the current quarter of 2013 were$4.5 million.  These expenses benefitted from a net gain on the sale of fixed assets totaling $227,000, declines in FDIC insurance expense of $590,000 and savings realized in delivery costs of $112,000. 

Savings from the Company's restructuring efforts are evident in the Company's operating expenses (exclusive of variable mortgage expenses and non-provision credit costs).  As shown below, the Company's core operating expenses have fallen 11.4% on a quarterly basis since the third quarter of 2012 when the Company's restructuring plan was first announced.  Additional savings expected in future quarters hinge on successful implementation of certain technology and continued improvements in credit quality, both of which are proceeding according to plan. 

Balance Sheet Trends 
Total assets at June 30, 2013 were $2.81 billion, a decrease of $210.4 million when compared to $3.02 billion reported at December 31, 2012.  Declines in total asset levels were expected and are associated mostly with the Company's restructuring efforts, which resulted in the closing of thirteen existing retail facilities since the third quarter of 2012.  Similarly, earning assets declined as well, although the mix of earning assets has improved.  Earning assets fell from $2.55 billion at December 31, 2012 to $2.42 billion at June 30, 2013.  Total loans increased during that period from $2.01 billionat the end of 2012 to $2.06 billion at the end of the second quarter and now represent 85.1% of total earning assets, compared to 78.8% at the end of the year. 

Total non-covered loans increased $105.2 million during the first six months of 2013 to end at $1.56 billion at June 30, 2013, compared to $1.45 billion at December 31, 2012.  Seasonal borrowings from agricultural customers as well as successful sales efforts contributed to the 14.6% annualized increase in loans.  Additionally, covered loans fell by only $17.2 million during the second quarter of 2013 to $443.5 million compared to balances reported at March 31, 2013.  Management, noting that this is a much slower pace of quarterly run-off than has been experienced in several years, is optimistic that the trends in non-covered loan growth and covered loan run-off will continue.

Total deposits decreased $181.6 million to $2.44 billion during the first six months of 2013, compared to $2.62 billion at December 31, 2012.  Year-end deposit levels contain unusually high liquidity levels from local municipalities and agricultural customers, and decreases from this level are not indicative of current trends.  Decreases in deposit accounts associated with the closed branches have been unexpectedly low, totaling only $32.8 million at June 30, 2013.  Additional declines in future quarters may occur as there are $48.7 million of time deposits in the affected branches that have not yet matured.  Management originally estimated a potential for a decline of 5% in the Company's deposits associated with the consolidation effort, but management now believes the run-off will be much less.

Indemnification Asset 
At June 30, 2013, the Company's FDIC loss-sharing receivable totaled $105.5 million, which is comprised of $75.7 million in indemnification asset (for reimbursements associated with anticipated losses in future quarters) and $29.8 million in current charge-offs and expenses already incurred but not yet submitted for reimbursement.  This is a significant decrease from the $161.0 million FDIC loss-sharing receivable recorded at March 31, 2013, which was comprised of $99.9 million in indemnification asset and $61.1 million in current charge-offs and expenses.  The decline in the receivable during the current quarter is due to $39.3 million received from the FDIC and a $16.2 millionreduction due to changes in the estimates of cash flows on the covered assets.

Credit Expenses and Asset Quality 
Non-performing assets declined to $71.7 million, a decrease of $7.0 million, from $78.7 millionreported at December 31, 2012.  Nonaccrual loans declined $7.1 million to $31.8 million at June 30, 2013, compared to $38.9 million at December 31, 2012.  The Company's balances in non-covered OREO (other real estate owned) remained stable at $39.9 million at June 30, 2013.  Classified assets to total regulatory capital declined to 28.7% at the end of the second quarter of 2013, compared to 33.8% at the same time in 2012.

The Company's quarterly provision for loan losses was $4.2 million in the second quarter of 2013, compared to $7.2 million in the same quarter in 2012.  Net charge-offs on loans during the second quarter of 2013 were $2.9 million, compared to $2.8 million during the first quarter of 2013 and $8.6 million during the second quarter of 2012.  As a percentage of loans, net charge-offs were 0.74% of average loans on an annualized basis for the second quarter of 2013, compared to 0.76% during the first quarter of 2013 and 2.52% during the second quarter of 2012. 

Ameris Bancorp is headquartered in Moultrie, Georgia, and at the end of the most recent quarter had 57 locations in Georgia, Alabama, northern Florida and South Carolina.