UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

~~FORM 10-Q~~

~~(Mark One)~~



FORM			ý10-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, 2017~~March 31, 2021



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



Commission File Number:			001-13901

~~AMERIS BANCORP~~


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



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

~~310 FIRST STREET, S.E., MOULTRIE, GA 31768~~

~~(Address of principal executive offices)~~

~~(229) 890-1111~~

~~(Registrant’s telephone number)~~



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	Nasdaq Global Select Market

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 ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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		¨ ~~(Do not check if a smaller reporting company)~~☐		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 ~~37,231,049~~69,731,426 shares of Common Stock outstanding as of ~~November 3, 2017.~~

April 30, 2021.

AMERIS BANCORP

TABLE OF CONTENTS



		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Balance Sheets as of ~~September 30, 2017~~March 3 1 , 202 1 and December 31, ~~2016~~2020	1

	Consolidated Statements of Income and Comprehensive Income for the Three Month s E nded March 3 1 , 202 1 and ~~Nine-Month Periods Ended September 30, 2017 and 2016~~20 20	2

	Consolidated Statements of Shareholders’ Equity for the ~~Nine Months~~ Three Month s Ended ~~September 30, 2017~~March 3 1 , 202 1 and ~~2016~~20 20	3

	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31 , 202 1 and ~~2016~~20 20	4

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4131

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	6447

Item 4.	Controls and Procedures.	6547

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	6548

Item 1A.	Risk Factors.	6548

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	6548

Item 3.	Defaults Upon Senior Securities.	6548

Item 4.	Mine Safety Disclosures.	6548

Item 5.	Other Information.	6548

Item 6.	Exhibits.	6649

Signatures		6750

Item 1. Financial Statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets ~~(unaudited)~~

(dollars in thousands, except per share data)


	March 31, 2021 (unaudited)		December 31, 2020
Assets
Cash and due from banks	$	224,159	$	203,349
Federal funds sold and interest-bearing deposits in banks	2,534,969		1,913,957
Cash and cash equivalents	2,759,128		2,117,306

Time deposits in other banks	249		249
Investment securities available for sale, at fair value, net of allowance for credit losses at $101 and $112	859,652		982,879
Other investments	27,620		28,202
Loans held for sale (includes loan at fair value of $1,509,528 and $1,001,807)	1,509,528		1,167,659

Loans, net of unearned income	14,599,805		14,480,925
Allowance for credit losses	(178,570)		(199,422)
Loans, net	14,421,235		14,281,503

Other real estate owned, net	8,841		11,880
Premises and equipment, net	231,550		222,890
Goodwill	928,005		928,005
Other intangible assets, net	67,848		71,974
Cash value of bank owned life insurance	176,575		176,467
Deferred income taxes, net	22,367		33,314
Other assets	414,529		416,310
Total assets	$	21,427,127	$	20,438,638

Liabilities
Deposits:
Noninterest-bearing	$	6,804,776	$	6,151,070
Interest-bearing	11,071,097		10,806,753
Total deposits	17,875,873		16,957,823
Securities sold under agreements to repurchase	9,320		11,641
Other borrowings	425,231		425,155
Subordinated deferrable interest debentures	124,833		124,345
Other liabilities	234,274		272,586
Total liabilities	18,669,531		17,791,550

Commitments and Contingencies (Note 9)	0		0

Shareholders’ Equity
Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding	0		0
Common stock, par value $1; 200,000,000 shares authorized; 71,954,088 and 71,753,705 shares issued	71,954		71,754
Capital surplus	1,917,990		1,913,285
Retained earnings	785,984		671,510
Accumulated other comprehensive income, net of tax	26,090		33,505
Treasury stock, at cost, 2,240,662 and 2,212,224 shares	(44,422)		(42,966)
Total shareholders’ equity	2,757,596		2,647,088
Total liabilities and shareholders’ equity	$	21,427,127	$	20,438,638

September 30,
2017 December 31,
2016
Assets

Cash and due from banks $ 131,071
$ 127,164
Federal funds sold and interest-bearing deposits in banks 112,844
71,221
Investment securities available for sale, at fair value 819,593
822,735
Other investments 47,977
29,464
Loans held for sale, at fair value 137,392
105,924

Loans 4,574,678
3,626,821
Purchased loans 917,126
1,069,191
Purchased loan pools 465,218
568,314
Loans, net of unearned income 5,957,022
5,264,326
Allowance for loan losses (25,966 ) (23,920 )
Loans, net 5,931,056
5,240,406

Other real estate owned, net 9,391
10,874
Purchased other real estate owned, net 9,946
12,540
Total other real estate owned, net 19,337
23,414

Premises and equipment, net 119,458
121,217
Goodwill 125,532
125,532
Other intangible assets, net 14,437
17,428
Deferred income taxes, net 39,365
40,776
Cash value of bank owned life insurance 79,241
78,053
Other assets 72,517
88,697
Total assets $ 7,649,820
$ 6,892,031

Liabilities

Deposits:

Noninterest-bearing $ 1,718,022
$ 1,573,389
Interest-bearing 4,177,482
4,001,774
Total deposits 5,895,504
5,575,163
Securities sold under agreements to repurchase 14,156
53,505
Other borrowings 808,572
492,321
Subordinated deferrable interest debentures 85,220
84,228
Other liabilities 44,447
40,377
Total liabilities 6,847,899
6,245,594

Commitments and Contingencies (Note 9)

Shareholders’ Equity

Preferred stock, stated value $1,000 (5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2017 and December 31, 2016) —
—
Common stock, par value $1 (100,000,000 shares authorized; 38,705,910 and 36,377,807 shares issued at September 30, 2017 and December 31, 2016, respectively) 38,706
36,378
Capital surplus 506,779
410,276
Retained earnings 267,694
214,454
Accumulated other comprehensive income (loss), net of tax 3,241
(1,058 )
Treasury stock, at cost (1,474,861 shares and 1,456,333 shares at September 30, 2017 and December 31, 2016, respectively) (14,499 ) (13,613 )
Total shareholders’ equity 801,921
646,437
Total liabilities and shareholders’ equity $ 7,649,820
$ 6,892,031

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income (unaudited)

(dollars and shares in thousands, except per share data)


	Three Months Ended September 30,					Nine Months Ended September 30,							Three Months Ended March 31,
	2017		2016			2017			2016				2021		2020
Interest income												Interest income
Interest and fees on loans	$	70,462	$	57,322		$	197,447		$	160,677		Interest and fees on loans	$	171,157	$	171,242
Interest on taxable securities	5,062		4,336			15,057			13,476			Interest on taxable securities	6,118		10,082
Interest on nontaxable securities	392		397			1,209			1,297			Interest on nontaxable securities	141		157
Interest on deposits in other banks and federal funds sold	406		155			1,070			659			Interest on deposits in other banks and federal funds sold	534		1,287
Total interest income	76,322		62,210			214,783			176,109			Total interest income	177,950		182,768

Interest expense												Interest expense
Interest on deposits	5,136		3,074			13,479			8,730			Interest on deposits	6,798		24,102
Interest on other borrowings	4,331		2,069			10,702			5,287			Interest on other borrowings	6,175		10,721
Total interest expense	9,467		5,143			24,181			14,017			Total interest expense	12,973		34,823

Net interest income	66,855		57,067			190,602			162,092			Net interest income	164,977		147,945
Provision for loan losses	1,787		811			5,828			2,381			Provision for loan losses	(16,579)		37,047
Net interest income after provision for loan losses	65,068		56,256			184,774			159,711
Provision for unfunded commitments												Provision for unfunded commitments	(11,839)		4,000
Provision for other credit losses												Provision for other credit losses	(173)		0
Provision for credit losses												Provision for credit losses	(28,591)		41,047
Net interest income after provision for credit losses												Net interest income after provision for credit losses	193,568		106,898

Noninterest income												Noninterest income
Service charges on deposit accounts	10,535		11,358			31,714			31,709			Service charges on deposit accounts	10,829		11,844
Mortgage banking activity	13,340		14,067			38,498			38,420			Mortgage banking activity	98,486		35,333
Other service charges, commissions and fees	699		791			2,137			2,869			Other service charges, commissions and fees	1,016		961
Gain on sale of securities	—		—			37			94
Net loss on securities												Net loss on securities	(12)		(9)
Other noninterest income	2,425		2,648			8,508			8,437			Other noninterest income	7,654		6,250
Total noninterest income	26,999		28,864			80,894			81,529			Total noninterest income	117,973		54,379

Noninterest expense												Noninterest expense
Salaries and employee benefits	32,583		27,982			89,509			81,700			Salaries and employee benefits	95,985		75,946
Occupancy and equipment expense	6,036		5,989			18,059			18,060
Data processing and communications costs	7,050		6,185			20,650			18,347
Occupancy and equipment												Occupancy and equipment	11,781		12,028
Data processing and communications expenses												Data processing and communications expenses	11,884		11,954
Credit resolution-related expenses	1,347		1,526			2,879			5,089			Credit resolution-related expenses	547		2,198
Advertising and marketing expense	1,247		1,249			3,612			2,908
Advertising and marketing												Advertising and marketing	1,431		2,358
Amortization of intangible assets	941		993			2,990			3,332			Amortization of intangible assets	4,126		5,631
Merger and conversion charges	92		—			494			6,359			Merger and conversion charges	0		540
Other noninterest expenses	14,471		9,275			34,406			25,363			Other noninterest expenses	23,044		27,398
Total noninterest expense	63,767		53,199			172,599			161,158			Total noninterest expense	148,798		138,053

Income before income tax expense	28,300		31,921			93,069			80,082			Income before income tax expense	162,743		23,224
Income tax expense	8,142		10,364			28,671			26,159			Income tax expense	37,781		3,902
Net income	20,158		21,557			64,398			53,923			Net income	124,962		19,322

Other comprehensive income
Net unrealized holding gains (losses) arising during period on investment securities available for sale, net of tax expense (benefit) of $966, ($1,481), $2,348 and $4,160	1,795		(2,752		)	4,361			7,724
Reclassification adjustment for gains on investment securities included in earnings, net of tax of $0, $0, $13 and $33	—		—			(24		)	(61		)
Unrealized gains (losses) on cash flow hedges arising during period, net of tax expense (benefit) of $14, $130, ($21) and ($306)	25		241			(38		)	(567		)
Other comprehensive income	1,820		(2,511		)	4,299			7,096
Total comprehensive income	$	21,978	$	19,046		$	68,697		$	61,019
Other comprehensive income (loss)												Other comprehensive income (loss)
Net unrealized holding gains (losses) arising during period on investment securities available for sale, net of tax expense (benefit) of $(1,972) and $5,756												Net unrealized holding gains (losses) arising during period on investment securities available for sale, net of tax expense (benefit) of $(1,972) and $5,756	(7,415)		21,653

Net unrealized losses on cash flow hedge during the period, net of tax benefit of $0 and $(26)												Net unrealized losses on cash flow hedge during the period, net of tax benefit of $0 and $(26)	0		(97)
Total other comprehensive income (loss)												Total other comprehensive income (loss)	(7,415)		21,556
Comprehensive income												Comprehensive income	$	117,547	$	40,878

Basic earnings per common share	$	0.54	$	0.62		$	1.76		$	1.58		Basic earnings per common share	$	1.80	$	0.28
Diluted earnings per common share	$	0.54	$	0.61		$	1.74		$	1.56		Diluted earnings per common share	$	1.79	$	0.28
Dividends declared per common share	$	0.10	$	0.10		$	0.30		$	0.20
Weighted average common shares outstanding (in thousands)
Weighted average common shares outstanding												Weighted average common shares outstanding
Basic	37,225		34,870			36,690			34,156			Basic	69,392		69,248
Diluted	37,553		35,195			37,017			34,470			Diluted	69,741		69,502

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity (unaudited)

(dollars in thousands)

Nine Months Ended
September 30, 2017 Nine Months Ended
September 30, 2016
Shares Amount Shares Amount
Common Stock

Balance at beginning of period 36,377,807
$ 36,378
33,625,162
$ 33,625
Issuance of common stock 2,141,072
2,141
2,549,469
2,549
Issuance of restricted shares 84,147
84
125,581
126
Cancellation of restricted shares (472 ) —
(7,085 ) (7 )
Proceeds from exercise of stock options 103,356
103
54,510
55
Issued at end of period 38,705,910
$ 38,706
36,347,637
$ 36,348

Capital Surplus

Balance at beginning of period
$ 410,276

$ 337,349
Share-based compensation
2,419

1,586
Issuance of common shares, net of issuance costs of $4,925 and $0
92,359

69,906
Issuance of restricted shares
(84 )
(126 )
Cancellation of restricted shares
—

7
Proceeds from exercise of stock options
1,809

908
Balance at end of period
$ 506,779

$ 409,630

Retained Earnings

Balance at beginning of period
$ 214,454

$ 152,820
Net income
64,398

53,923
Dividends on common shares
(11,158 )
(6,974 )
Balance at end of period
$ 267,694

$ 199,769

Accumulated Other Comprehensive Income, Net of Tax

Unrealized gains (losses) on securities and derivatives:

Balance at beginning of period
$ (1,058 )
$ 3,353
Other comprehensive income during the period
4,299

7,096
Balance at end of period
$ 3,241

$ 10,449

Treasury Stock

Balance at beginning of period 1,456,333
$ (13,613 ) 1,413,777
$ (12,388 )
Purchase of treasury shares 18,528
(886 ) 42,556
(1,225 )
Balance at end of period 1,474,861
$ (14,499 ) 1,456,333
$ (13,613 )

Total Shareholders’ Equity
$ 801,921

$ 642,583


	Three Months Ended March 31, 2021

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, December 31, 2020	71,753,705	$	71,754	$	1,913,285	$	671,510	$	33,505	2,212,224	$	(42,966)	$	2,647,088

Issuance of restricted shares	86,075	86		513		—		—		—	—		599

Proceeds from exercise of stock options	114,308	114		2,888		—		—		—	—		3,002
Share-based compensation	—	—		1,304		—		—		—	—		1,304
Purchase of treasury shares	—	—		—		—		—		28,438	(1,456)		(1,456)
Net income	—	—		—		124,962		—		—	—		124,962
Dividends on common shares ($0.15 per share)	—	—		—		(10,488)		—		—	—		(10,488)

Other comprehensive income (loss) during the period	—	—		—		—		(7,415)		—	—		(7,415)
Balance, March 31, 2021	71,954,088	$	71,954	$	1,917,990	$	785,984	$	26,090	2,240,662	$	(44,422)	$	2,757,596


	Three Months Ended March 31, 2020

	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount								Shares	Amount
Balance, December 31, 2019	71,499,829	$	71,500	$	1,907,108	$	507,950	$	17,995	1,995,996	$	(34,971)	$	2,469,582

Issuance of restricted shares	118,625	119		171		—		—		—	—		290

Proceeds from exercise of stock options	33,532	33		668		—		—		—	—		701
Share-based compensation	—	—		774		—		—		—	—		774
Purchase of treasury shares	—	—		—		—		—		214,716	(7,956)		(7,956)
Net income	—	—		—		19,322		—		—	—		19,322
Dividends on common shares ($0.15 per share)	—	—		—		(10,415)		—		—	—		(10,415)

Cumulative effect of change in accounting for credit losses	—	—		—		(56,704)		—		—	—		(56,704)
Other comprehensive income (loss) during the period	—	—		—		—		21,556		—	—		21,556
Balance, March 31, 2020	71,651,986	$	71,652	$	1,908,721	$	460,153	$	39,551	2,210,712	$	(42,927)	$	2,437,150

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


	Three Months Ended March 31,
	2021		2020
Operating Activities
Net income	$	124,962	$	19,322
Adjustments reconciling net income to net cash provided by (used in) operating activities:
Depreciation	4,080		3,916
Net losses on sale or disposal of premises and equipment	139		125
Net write-downs on other assets	122		417
Provision for credit losses	(28,591)		41,047
Net write-downs and (gains) losses on sale of other real estate owned	(560)		885
Share-based compensation expense	1,753		559
Amortization of intangible assets	4,126		5,631
Amortization of operating lease right of use assets	2,979		3,400
Provision for deferred taxes	12,919		(7,333)
Net amortization of investment securities available for sale	1,121		1,385
Net loss on securities	12		9
Accretion of discount on purchased loans, net	(6,127)		(6,320)
Net amortization on other borrowings	112		46
Amortization of subordinated deferrable interest debentures	488		485
Loan servicing asset impairment (recovery)	(10,639)		22,165
Originations of mortgage loans held for sale	(2,340,847)		(1,252,379)
Payments received on mortgage loans held for sale	10,680		14,957
Proceeds from sales of mortgage loans held for sale	1,816,503		1,530,122
Net gains on mortgage loans held for sale	(41,720)		(40,809)
Originations of SBA loans	(11,976)		(11,647)
Proceeds from sales of SBA loans	12,518		20,062
Net gains on sale of SBA loans	(1,192)		(1,824)
Increase in cash surrender value of bank owned life insurance	(814)		(969)
Gain on bank owned life insurance proceeds	(603)		0
Net gains on other loans held for sale	(457)		0

Changes in FDIC loss-share payable, net of cash payments	0		(1,506)
Change attributable to other operating activities	(13,597)		(40,757)
Net cash provided by (used in) operating activities	(464,609)		300,989

Investing Activities, net of effects of business combinations


Proceeds from prepayments and maturities of securities available for sale	112,730		76,386

Net (increase) decrease in other investments	570		(14,844)
Net increase in loans	(72,093)		(264,063)
Purchases of premises and equipment	(13,809)		(3,572)
Proceeds from sale of premises and equipment	930		0
Proceeds from sales of other real estate owned	4,048		1,284
Payments paid to FDIC under loss-share agreements	0		(25)
Proceeds from bank owned life insurance	1,309		0
Payments received on other loans held for sale	9,136		0
Proceeds from sales of other loans held for sale	156,803		0
Net cash and cash equivalents received from acquisitions	0		2
Net cash provided by (used in) investing activities	199,624		(204,832)

			(Continued)

Nine Months Ended
September 30,
2017 2016
Operating Activities

Net income $ 64,398
$ 53,923
Adjustments reconciling net income to net cash provided by operating activities:

Depreciation 6,918
7,041
Net losses on sale or disposal of premises and equipment 956
112
Provision for loan losses 5,828
2,381
Net losses on sale of other real estate owned including write-downs 501
1,844
Share-based compensation expense 2,419
1,586
Amortization of intangible assets 2,990
3,332
Provision for deferred taxes (962 ) (6,369 )
Net amortization of investment securities available for sale 4,815
5,086
Net gains on securities available for sale (37 ) (94 )
Accretion of discount on purchased loans (9,023 ) (12,926 )
Amortization of premium on purchased loan pools 2,943
4,149
Net accretion (amortization) on other borrowings 62
(57 )
Amortization of subordinated deferrable interest debentures 992
1,123
Originations of mortgage loans held for sale (1,113,188 ) (1,051,812 )
Payments received on mortgage loans held for sale 799
1,167
Proceeds from sales of mortgage loans held for sale 961,831
982,898
Net gains on sale of mortgage loans held for sale (36,451 ) (41,935 )
Originations of SBA loans (25,720 ) (57,462 )
Proceeds from sales of SBA loans 23,952
21,656
Net gains on sale of SBA loans (3,423 ) (3,054 )
Increase in cash surrender value of BOLI (1,188 ) (1,318 )
Changes in FDIC loss-share receivable/payable, net of cash payments received 1,974
10,277
Change attributable to other operating activities 12,931
16,202
Net cash used in operating activities (95,683 ) (62,250 )

Investing Activities, net of effects of business combinations

Purchase of securities available for sale (83,090 ) (134,786 )
Proceeds from prepayments and maturities of securities available for sale 85,036
93,513
Proceeds from sales of securities available for sale 3,090
53,026
Net increase in other investments (12,669 ) (13,050 )
Net increase in loans, excluding purchased loans (786,548 ) (556,182 )
Payments received on purchased loans 155,033
186,319
Purchases of loan pools —
(151,481 )
Payments received on purchased loan pools 95,533
115,409
Purchases of premises and equipment (3,016 ) (8,250 )
Proceeds from sales of premises and equipment 16
207
Proceeds from sales of other real estate owned 11,989
18,329
Payments received from (payments to) FDIC under loss-share agreements (97 ) 4,770
Net cash proceeds paid in acquisitions —
(7,205 )
Net cash used in investing activities (534,723 ) (399,381 )

(Continued)

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


								Three Months Ended March 31,
								2021		2020
Financing Activities, net of effects of business combinations							Financing Activities, net of effects of business combinations
Net increase (decrease) in deposits							Net increase (decrease) in deposits	$	918,050	$	(182,455)
Net decrease in securities sold under agreements to repurchase							Net decrease in securities sold under agreements to repurchase	(2,321)		(5,475)
Proceeds from other borrowings							Proceeds from other borrowings	0		2,770,000
Repayment of other borrowings							Repayment of other borrowings	(36)		(2,625,084)
Repayment of subordinated deferrable interest debentures							Repayment of subordinated deferrable interest debentures	0		(5,155)

Proceeds from exercise of stock options							Proceeds from exercise of stock options	3,002		701
Dividends paid - common stock							Dividends paid - common stock	(10,432)		(10,426)
Purchase of treasury shares							Purchase of treasury shares	(1,456)		(7,956)
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	906,807		(65,850)

Net increase in cash and cash equivalents							Net increase in cash and cash equivalents	641,822		30,307
Cash and cash equivalents at beginning of period							Cash and cash equivalents at beginning of period	2,117,306		621,849
Cash and cash equivalents at end of period							Cash and cash equivalents at end of period	$	2,759,128	$	652,156

Supplemental Disclosures of Cash Flow Information							Supplemental Disclosures of Cash Flow Information
Cash paid (received) during the period for:							Cash paid (received) during the period for:
Interest							Interest	$	11,335	$	35,234
Income taxes							Income taxes	(1)		(77)
Loans transferred to other real estate owned							Loans transferred to other real estate owned	449		3,674
Loans transferred from loans held for sale to loans held for investment							Loans transferred from loans held for sale to loans held for investment	48,313		0

Loans provided for the sales of other real estate owned							Loans provided for the sales of other real estate owned	0		299

Right-of-use assets obtained in exchange for new operating lease liabilities							Right-of-use assets obtained in exchange for new operating lease liabilities	0		2,889

	Nine Months Ended September 30,
	2017			2016
Financing Activities, net of effects of business combinations
Net increase in deposits	$	320,341		$	25,448
Net decrease in securities sold under agreements to repurchase	(39,349		)	(20,938		)
Proceeds from other borrowings	1,687,692			339,500
Repayment of other borrowings	(1,371,503		)	(53,513		)
Issuance of common stock	88,656			—
Proceeds from exercise of stock options	1,912			963
Dividends paid - common stock	(10,927		)	(5,096		)
Purchase of treasury shares	(886		)	(1,225		)
Net cash provided by financing activities	675,936			285,139

Net increase (decrease) in cash and cash equivalents	45,530			(176,492		)
Cash and cash equivalents at beginning of period	198,385			390,563
Cash and cash equivalents at end of period	$	243,915		$	214,071

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	23,369		$	13,791
Income taxes	28,212			30,969
Loans (excluding purchased loans) transferred to other real estate owned	4,043			2,101
Purchased loans transferred to other real estate owned	4,294			6,262
Loans transferred from loans held for sale to loans held for investment	165,352			94,601
Loans provided for the sales of other real estate owned	1,334			1,471
Assets acquired in business acquisitions	—			561,440
Liabilities assumed in business acquisitions	—			465,048
Issuance of common stock in acquisitions	—			72,455
Issuance of common stock in exchange for equity investment in US Premium Finance Holding Company	5,844			—
Change in unrealized gain (loss) on securities available for sale, net of tax	4,337			7,724			Change in unrealized gain (loss) on securities available for sale, net of tax	(7,415)		21,653
Change in unrealized gain (loss) on cash flow hedge, net of tax	(38		)	(567		)	Change in unrealized gain (loss) on cash flow hedge, net of tax	0		(97)

				(Concluded)						(Concluded)

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

~~September 30, 2017~~March 31, 2021

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Nature of Business

Ameris Bancorp (the “Company” or “Ameris”) is a financial holding company headquartered in ~~Moultrie,~~Atlanta, Georgia. Ameris conducts substantially all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At ~~September 30, 2017,~~March 31, 2021, the Bank operated 97165 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~~consisting of normal recurring ~~accruals)~~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 period ended ~~September 30, 2017~~March 31, 2021 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 and the report of our registered independent public accounting firm included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020, as amended.

~~Accounting Policy Update~~Cash and Cash Equivalents

~~Other Investments~~ – ~~Other investments~~For purposes of reporting cash flows, cash and cash equivalents include ~~Federal Home Loan~~cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits in banks and federal funds sold. The Bank ~~(“FHLB”) stock,~~is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank ~~stock~~of Atlanta. The required reserve rate was set to 0% effective March 26, 2020 and, ~~a minority equity investment in US Premium Finance Holding Company, a Florida corporation (“USPF”). These investments do not have readily determinable fair values~~accordingly, the Bank had 0 reserve requirement at March 31, 2021 and are carried at cost. They are periodically reviewed for impairment based on ultimate recovery of par value or cost basis. Both stock and cash dividends are reported as income. For additional information regarding the Company’s minority equity investment in USPF, see Note 2.December 31, 2020.

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 ~~2017~~2021

ASU ~~2016-09~~2019-12 – ~~Improvements to Employee Share-Based Payment~~Income Taxes (Topic 740): Simplifying the Accounting (“ for Income Taxes ("ASU ~~2016-09”~~2019-12"). ASU 2016-09 simplifies various aspects of how share-based payments are accounted for and presented in the financial statements. Under ASU 2016-09, companies will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital. The standard eliminates the requirement that excess tax benefits be realized before companies can recognize them. The excess tax benefits will be reported as an operating activity on the statement of cash flows, and the cash paid to a tax authority when shares are withheld to satisfy a company’s statutory income tax withholding obligation will be reported as a financing activity on its statement of cash. In addition, the standard increases the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. ASU 2016-09 permits companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as required today, or recognized when they occur. The Company has elected to recognize forfeitures as they occur. ASU 2016-09 became effective on January 1, 2017 and did not have a material impact on the consolidated financial statements.

~~Accounting Standards Pending Adoption~~

~~ASU 2017-12 –~~ ~~"Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~ ("ASU 2017-12"). The purposes of ASU 2017-12 are to (1) improve the transparency and understandability of information conveyed in financial statements about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with the economic objectives of those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. ASU 2017-12 is effective for interim and annual reporting periods beginning after December 15, 2018 with early adoption in an interim period permitted. ASU 2017-12 requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the beginning of the fiscal year of adoption. The Company is currently evaluating the provisions of ASU 2017-12 to determine the potential impact the new standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2017-09 –~~ ~~“Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting~~ (“ASU 2017-09”). ASU 2017-09 clarifies when changes to the terms of a share-based award must be accounted for as a modification. Companies must apply the modification accounting guidance if any of the following change: the shard-based award’s fair value, vesting provisions or classification as an equity instrument or a liability instrument. The new guidance should reduce diversity in practice and result in fewer changes to the terms of share-based awards being accounted for as modifications, as the guidance will allow companies to make certain non-substantive changes to share-based awards without accounting for them as modifications. ASU 2017-09 is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. ASU 2017-09 is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.

~~ASU 2017-08 –~~ ~~“Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities~~ (“ASU 2017-08”). ASU 2017-08 shortens the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. Under the current guidance, entities generally amortize the premium on a callable debt security as an adjustment of yield over the contractual life (to maturity date) of the instrument. This ASU does not require any accounting change in the accounting for debt securities held at a discount; the discount continues to be amortized as an adjustment of yield over the contractual life (to maturity) of the instrument. ASU 2017-08 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Upon adoption, ASU 2017-08 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The Company is currently evaluating the provisions of ASU 2017-08 to determine the potential impact the new standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2017-04 –~~ ~~Intangibles: Goodwill and Other: Simplifying the Test for Goodwill Impairment~~ (“ASU 2017-04”). ASU 2017-04 eliminates Step 2 from the goodwill impairment test to simplify the subsequent measurement of goodwill. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, the income tax effects of tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the qualitative impairment test is necessary. The standard must be adopted using a prospective basis and the nature and reason for the change in accounting principle should be disclosed upon transition. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in reporting periods beginning after December 15, 2019. Early adoption is permitted on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2017-01 –~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~ (“ASU 2017-01”). ASU 2017-01 provides a framework to use in determining when a set of assets and activities is a business. The standard provides more consistency in applying the business combination guidance, reduces the costs of application, and makes the definition of a business more operable. ASU 2017-01 is effective for interim and annual periods within those annual periods beginning after December 15, 2017. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position and disclosures, but it is not expected to have a material impact.

~~ASU 2016-13~~ ~~- Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ (“ASU 2016-13”). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace the current incurred loss approach with an expected loss model, referred to as the current expected credit loss (“CECL”) model. The new standard will apply to

financial assets subject to credit losses and measured at amortized cost and certain off-balance-sheet credit exposures, which include, but are not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. ASU 2016-132019-12 simplifies the accounting for ~~purchased credit-impaired debt securities~~income taxes by removing certain technical exceptions. ASU 2019-12 also clarifies and ~~loans and expands~~amends the ~~disclosure requirements regarding an entity’s assumptions, models and methods~~accounting for ~~estimating~~income taxes in certain areas including, among others: (i) franchise taxes that are partially based on income; (ii) whether step ups in the ~~allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class~~tax basis of financial asset by credit quality indicator, disaggregated by the year of origination. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a cumulative-effect adjustment to equity asgoodwill should be considered part of the ~~beginning~~acquisition to which it related or recognized as a separate transaction; and (iii) requiring the effect of an enacted change in tax laws or rates to be reflected in the annual effective tax rate computation in the interim period ~~in which~~that includes the ~~guidance is effective. While~~enactment date. During the first quarter of 2021, the Company is currently evaluating the impact this standard will have on the results of operations, financial position and disclosures, the Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective. The Company has established a steering committee which includes the appropriate members of management to evaluate the impactadopted this ASU ~~will have on Company’s financial position, results of operations~~ and ~~financial statement disclosures and determine the most appropriate method of implementing~~applied the amendments in this ASU as well as any resources needed to implement the amendments. This committee has identified the software vendor of choice for implementation, established an implementation timeline and continues to stay currentupdate on ~~implementation issues and concerns.~~

~~ASU 2016-02 –~~ ~~Leases (Topic 842)~~ (“ASU 2016-02”). ASU 2016-02 amends the existing standards for lease accounting effectively requiring most leases be carried on the balance sheets of the related lessees by requiring them to recognize a right-of-use asset and a corresponding lease liability. ASU 2016-02 includes qualitative and quantitative disclosure requirements intended to provide greater insight into the nature of an entity’s leasing activities. The standard must be adopted using a modified retrospective ~~transition with a cumulative-effect adjustment~~basis for the provision related to ~~equity as of the beginning of the period in which it is adopted. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018,~~franchise taxes and interim periods within those annual periods with early adoption permitted. The Company has several leased facilities, which are currently treated as operating leases, and are not currently shown on the Company’s consolidated balance sheet. After ASU 2016-02 is implemented, the Company expects to begin reporting these lease agreements on the balance sheet as a right-of-use asset and a corresponding liability. The Company is currently evaluating the impact this standard will have on the Company’s consolidated statement of income and comprehensive income, consolidated statement of stockholders’ equity and consolidated statement of cash flows, but it is not expected to have a material impact.

~~ASU 2014-09 –~~ ~~Revenue from Contracts with Customers~~ (“ASU 2014-09”). ASU 2014-09 provides guidance that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective prospectively for annual and interim periods, beginning after December 15, 2017. Management has substantially completed its evaluation of the impact ASU 2014-09 will have on the Company’s consolidated financial statements. Based on this evaluation to date, management has determined that for the revenue streams of the Company within the scope of ASU 2014-09, the new accounting guidance will not change the timing or amount of revenue recognized.all other amendments. The adoption ~~of ASU 2014-09 is~~did not ~~expected to~~ have a material impact on the Company's consolidated financial statements.

~~NOTE 2~~Accounting Standards Pending Adoption

ASU No. 2021-01 – ~~INVESTMENT IN US PREMIUM FINANCE HOLDING COMPANY~~

~~On December 15, 2016,~~ Reference Rate Reform (Topic 848): Scope ("ASU 2021-01"). ASU 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the ~~Bank entered into a Management~~discounting transition. ASU 2021-01 also amends the expedients and ~~License Agreement with William J. Villari and USPF pursuant~~exceptions in ASC 848 to ~~which Mr. Villari will manage a division~~capture the incremental consequences of the ~~Bank~~scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. Because the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in effect for a limited time, from March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adopting ASU 2021-01 on the consolidated financial statements.

ASU No. 2020-04 – Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments, which are elective, provide expedients and exceptions for applying GAAP to contract modifications and hedging relationships affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is expected to be ~~operated under~~discontinued due to reference rate reform. The optional expedients for contract modifications apply consistently for all contracts or transactions within the ~~name “US Premium Finance” and which is~~relevant Codification Topic, Subtopic, or Industry Subtopic that contains the guidance that otherwise would be required to be ~~engaged~~applied, while those for hedging relationships can be elected on an individual hedging relationship basis. Because the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in effect for a limited time, from March 12, 2020 through December 31, 2022. The Company has established a working committee with representatives from relevant functional areas to inventory the ~~business~~contracts and accounts that are tied to LIBOR and develop a transition plan for the affected items. The Company is currently evaluating the impact of ~~soliciting, originating, servicing, administering and collecting loans made for purposes of funding insurance premiums and other loans made to persons engaged in~~adopting ASU 2020-04 on the ~~insurance business.~~consolidated financial statements.

Also on December 15, 2016, the Company entered into a Stock Purchase Agreement with Mr. Villari pursuant to which the Company agreed to purchase from Mr. Villari 4.99% of the outstanding shares of common stock of USPF. As consideration for such shares, the Company agreed to issue to Mr. Villari 128,572 unregistered shares of its common stock in a private placement transaction pursuant to the exemptions from registration provided in Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. Those transactions closed on January 18, 2017, and a registration statement was filed with the Securities and Exchange Commission on February 13, 2017 to register the resale or other disposition of the shares of common stock that were issued to Mr. Villari.

The Company’s 4.99% investment in USPF was valued at $5.8 million, based upon the closing price of the Company’s common stock immediately prior to the parties’ execution of the Stock Purchase Agreement, as follows:

(dollars in thousands, except per share amount)
Ameris common shares issued 128,572
Price per share of the Company's common stock $ 45.45
Fair value of consideration transferred $ 5,844

Because USPF does not have a readily determinable fair value and Ameris does not exercise significant influence over USPF, the investment is carried at cost and is included in other investments in the Company’s consolidated balance sheet. The net carrying value of the Company’s investment in USPF was $5.8 million as of September 30, 2017.

NOTE 32 – INVESTMENT SECURITIES

The Company’s investment policy blends the Company’s liquidity needs and interest rate risk management with its desire to increase income and provide funds for expected growth in loans. The investment securities portfolio consists primarily of U.S. government-sponsored mortgage-backed securities and state, county and municipal securities. The Company’s portfolio and investing philosophy concentrate activities in obligations where the credit risk is limited. For the small portion of the Company’s portfolio found to present credit risk, the Company has reviewed the investments and financial performance of the obligors and believes the credit risk to be acceptable.

The amortized cost and estimated fair value of ~~investment~~ securities available for sale along with allowance for credit losses, gross unrealized gains and losses are summarized as follows:


(dollars in thousands)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
March 31, 2021
U.S. government sponsored agencies	$	12,138	$	0	$	256	$	0	$	12,394
State, county and municipal securities	60,140		0		2,845		0		62,985
Corporate debt securities	46,131		(101)		946		(229)		46,747
SBA pool securities	54,305		0		1,488		(102)		55,691
Mortgage-backed securities	654,015		0		27,851		(31)		681,835
Total debt securities	$	826,729	$	(101)	$	33,386	$	(362)	$	859,652

December 31, 2020
U.S. government sponsored agencies	$	17,161	$	0	$	343	$	0	$	17,504
State, county and municipal securities	63,286		0		3,492		0		66,778
Corporate debt securities	51,639		(112)		602		(233)		51,896
SBA pool securities	59,973		0		2,620		(96)		62,497
Mortgage-backed securities	748,521		0		35,797		(114)		784,204
Total debt securities	$	940,580	$	(112)	$	42,854	$	(443)	$	982,879

(dollars in thousands)
Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair
Value
September 30, 2017
U.S. government sponsored agencies $ 1,000
$ 4
$ —
$ 1,004
State, county and municipal securities 140,190
3,271
(74 ) 143,387
Corporate debt securities 46,704
661
(116 ) 47,249
Mortgage-backed securities 626,927
3,774
(2,748 ) 627,953
Total debt securities $ 814,821
$ 7,710
$ (2,938 ) $ 819,593

December 31, 2016
U.S. government sponsored agencies $ 999
$ 21
$ —
$ 1,020
State, county and municipal securities 149,899
2,605
(469 ) 152,035
Corporate debt securities 32,375
167
(370 ) 32,172
Mortgage-backed securities 641,362
2,700
(6,554 ) 637,508
Total debt securities $ 824,635
$ 5,493
$ (7,393 ) $ 822,735

The amortized cost and estimated fair value of ~~available-for-sale~~debt securities ~~at September 30, 2017~~available for sale securities as of March 31, 2021, by contractual maturity are ~~summarized in the table~~shown below. ~~Expected maturities for mortgage-backed securities~~Maturities may differ from contractual maturities in mortgage-backed securities because ~~in certain cases borrowers can prepay obligations~~the

mortgages underlying these securities may be called or repaid without ~~prepayment penalties.~~penalty. Therefore, these securities are not included in the maturity categories in the following maturity ~~summary.~~summary:


(dollars in thousands)	Amortized Cost		Estimated Fair Value		(dollars in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	$	14,094	$	14,205	Due in one year or less	$	20,247	$	20,462
Due from one year to five years	57,385		58,204		Due from one year to five years	48,460		50,244
Due from five to ten years	77,194		79,093		Due from five to ten years	59,558		61,722
Due after ten years	39,221		40,138		Due after ten years	44,449		45,389
Mortgage-backed securities	626,927		627,953		Mortgage-backed securities	654,015		681,835
	$	814,821	$	819,593		$	826,729	$	859,652

Securities with a carrying value of approximately ~~$238.6~~$372.8 million and $438.7 million at March 31, 2021 and December 31, 2020, respectively, serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other purposes required or permitted by ~~law at September 30, 2017, compared with $618.2 million at December 31, 2016.~~law.

The following table ~~details~~shows the gross unrealized losses and estimated fair value of securities aggregated by category and ~~duration~~length of time that securities have been in a continuous unrealized loss position at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020:


	Less Than 12 Months				12 Months or More				Total
(dollars in thousands)	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
March 31, 2021


Corporate debt securities	$	2,920	$	(229)	$	0	$	0	$	2,920	$	(229)
SBA pool securities	1,755		(13)		3,798		(89)		5,553		(102)
Mortgage-backed securities	10,102		(28)		374		(3)		10,476		(31)
Total debt securities	$	14,777	$	(270)	$	4,172	$	(92)	$	18,949	$	(362)

December 31, 2020


Corporate debt securities	$	10,159	$	(233)	$	0	$	0	$	10,159	$	(233)
SBA pool securities	0		0		3,948		(96)		3,948		(96)
Mortgage-backed securities	24,120		(114)		2		0		24,122		(114)
Total debt securities	$	34,279	$	(347)	$	3,950	$	(96)	$	38,229	$	(443)

Less Than 12 Months 12 Months or More Total
(dollars in thousands)
Estimated
Fair
Value

Unrealized
Losses

Estimated
Fair
Value

Unrealized
Losses

Estimated
Fair
Value

Unrealized
Losses
September 30, 2017

U.S. government sponsored agencies $ —
$ —
$ —
$ —
$ —
$ —
State, county and municipal securities 11,333
(18 ) 4,240
(56 ) 15,573
(74 )
Corporate debt securities 8,131
(35 ) 10,854
(81 ) 18,985
(116 )
Mortgage-backed securities 225,258
(1,685 ) 54,465
(1,063 ) 279,723
(2,748 )
Total debt securities $ 244,722
$ (1,738 ) $ 69,559
$ (1,200 ) $ 314,281
$ (2,938 )

December 31, 2016

U.S. government sponsored agencies $ —
$ —
$ —
$ —
$ —
$ —
State, county and municipal securities 47,647
(469 ) —
—
47,647
(469 )
Corporate debt securities 18,377
(363 ) 493
(7 ) 18,870
(370 )
Mortgage-backed securities 414,300
(6,177 ) 11,791
(377 ) 426,091
(6,554 )
Total debt securities $ 480,324
$ (7,009 ) $ 12,284
$ (384 ) $ 492,608
$ (7,393 )

As of ~~September 30, 2017,~~March 31, 2021, the Company’s ~~securities~~security portfolio consisted of ~~421~~488 securities, ~~119~~33 of which were in an unrealized loss position. ~~The majority of unrealized losses are related to the Company’s mortgage-backed securities, as discussed below.~~

At ~~September 30, 2017,~~March 31, 2021, the Company held ~~101~~21 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2017.

At ~~September 30, 2017,~~March 31, 2021, the Company held ~~nine state, county and municipal~~9 U.S. Small Business Administration (“SBA”) pool securities and ~~nine~~3 corporate ~~debt~~ securities that were in an unrealized loss position. ~~Because the decline in fair value is attributable to changes in interest rates~~

During 2021 and ~~illiquidity, and not credit quality, and because~~2020, the Company ~~does not have the intent to sell these securities~~received timely and ~~it is likely that it will not be required to sell~~current interest and principal payments on all of the securities ~~before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2017.~~

classified as corporate debt securities. The Company’s investments in ~~corporate~~subordinated debt include investments in regional and super-regional banks on which the Company prepares regular analysis through review of financial information and credit ratings. Investments in preferred securities are also concentrated in the preferred obligations of regional and super-regional banks through non-pooled investment structures. The Company did not have investments in “pooled” trust preferred securities at ~~September 30, 2017~~March 31, 2021 or December 31, ~~2016.~~2020.

Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate securities ~~for other-than-temporary impairment~~in an unrealized loss position on at least on a quarterly basis, and more frequently when economic or market ~~conditions~~concerns warrant such ~~evaluation. While~~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 ~~majority~~entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the ~~unrealized losses on debt securities relate~~above criteria is not met, management evaluates whether the decline in fair value is attributable to changes in interest rates, corporate debt securities have also been affected by reduced levels of liquidity and higher risk premiums. Occasionally, management engages independent third parties to evaluate the Company’s position in certain corporate debt securities to aid management and the ALCO Committee in its determination regarding the status of impairment.credit or resulted from other factors. The ~~Company believes that each investment poses minimal credit risk and further, that the~~ Company does not intend to sell these investment securities at an unrealized loss position at ~~September 30, 2017,~~March 31, 2021, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. ~~Therefore,~~Based on the results of management's review, at ~~September 30, 2017, these investments are not considered impaired on an other-than-temporary basis.~~March 31, 2021, management determined $101,000 was attributable to credit impairment and established the allowance for credit losses accordingly. The remaining $362,000 in unrealized loss was determined to be from factors other than credit.


(dollars in thousands) Allowance for credit losses	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
Beginning balance	$	112	$	0
Provision for expected credit losses	(11)		0



Ending balance	$	101	$	0

At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.

~~The~~Total loss on securities reported on the consolidated statements of income and comprehensive income is comprised of the following ~~table is a summary of sales activities in the Company’s investment securities available for sale~~ for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016:~~2020:


(dollars in thousands)	March 31, 2021		March 31, 2020

Unrealized holding losses on equity securities	$	(12)	$	(9)

Total loss on securities	$	(12)	$	(9)

(dollars in thousands) September 30,
2017 September 30,
2016
Gross gains on sales of securities $ 38
$ 312
Gross losses on sales of securities (1 ) (218 )
Net realized gains on sales of securities available for sale $ 37
$ 94

Sales proceeds $ 3,090
$ 53,026

NOTE 43 – LOANS

The Bank engages in a full complement of lending activities, including real estate-related loans, agriculture-related loans, commercial and financial loans and consumer installment loans within select markets in Georgia, Alabama, Florida and South Carolina. The Bank purchased residential mortgage loan pools during 2015 and 2016 collateralized by properties located outside our Southeast markets, specifically in California, Washington and Illinois. During the third quarter of 2016, the Bank began purchasing from an unrelated third party consumer installment home improvement loans made to borrowers throughout the United States. As of September 30, 2017 and December 31, 2016, the net carrying value of these consumer installment home improvement loans was approximately $148.0 million and $60.8 million, respectively. During the fourth quarter of 2016, the Bank purchased a pool of commercial insurance premium finance loans made to borrowers throughout the United States and began to originate, administer and service these types of loans. As of September 30, 2017 and December 31, 2016, the net carrying value of commercial insurance premium loans was approximately $487.9 million and $353.9 million, respectively, and such loans are reported in the commercial, financial and agricultural loan category.

The Bank concentrates the majority of its lending activities in real estate loans. While risk of loss in the Company’s portfolio is primarily tied to the credit quality of the various borrowers, risk of loss may increase due to factors beyond the Company’s control, such as local, regional and/or national economic downturns. General conditions in the real estate market may also impact the relative risk in the real estate portfolio. A substantial portion of the Bank’s loans are secured by real estate in the Bank’s primary market area. In addition, a substantial portion of the OREO is located in those same markets. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio and the recovery of a substantial portion of the carrying amount of OREO are susceptible to changes in real estate conditions in the Bank’s primary market area.

Commercial, financial and agricultural loans include both secured and unsecured loans for working capital, expansion, crop production, commercial insurance premium finance, and other business purposes. Commercial, financial and agricultural loans also include SBA loans and municipal loans. Short-term working capital loans are secured by non-real estate collateral such as accounts receivable, crops, inventory and equipment. The Bank evaluates the financial strength, cash flow, management, credit history of the borrower and the quality of the collateral securing the loan. The Bank often requires personal guarantees and secondary sources of repayment on commercial, financial and agricultural loans.

Real estate loans include construction and development loans, commercial and farmland loans and residential loans. Construction and development loans include loans for the development of residential neighborhoods, one-to-four family home residential construction loans to builders and consumers, and commercial real estate construction loans, primarily for owner-occupied properties. The Company limits its construction lending risk through adherence to established underwriting procedures. Commercial real estate loans include loans secured by owner-occupied commercial buildings for office, storage, retail, farmland and warehouse space. They also include non-owner occupied commercial buildings such as leased retail and office space. Commercial real estate loans may be larger in size and may involve a greater degree of risk than one-to-four family residential mortgage loans. Payments on such loans are often dependent on successful operation or management of the properties. The Company’s residential loans represent permanent mortgage financing and are secured by residential properties located within the Bank's market areas, along with warehouse lines of credit secured by residential mortgages.

Consumer installment loans and other loans include home improvement loans, automobile loans, boat and recreational vehicle financing, and secured and unsecured personal loans. Consumer loans carry greater risks than other loans, as the collateral can consist of rapidly depreciating assets such as automobiles and equipment that may not provide an adequate source of repayment of the loan in the case of default.

Loans are stated at ~~unpaid balances, net of unearned income and deferred loan fees.~~amortized cost. Balances within the major loans receivable categories are presented in the following ~~table, excluding purchased loans:~~table:


(dollars in thousands)	March 31, 2021		December 31, 2020
Commercial, financial and agricultural	$	1,611,029	$	1,627,477
Consumer installment	257,097		306,995
Indirect automobile	482,637		580,083
Mortgage warehouse	880,216		916,353
Municipal	659,228		659,403
Premium finance	706,379		687,841
Real estate – construction and development	1,533,234		1,606,710
Real estate – commercial and farmland	5,616,826		5,300,006
Real estate – residential	2,853,159		2,796,057
	$	14,599,805	$	14,480,925

(dollars in thousands) September 30,
2017 December 31,
2016
Commercial, financial and agricultural $ 1,307,209
$ 967,138
Real estate – construction and development 550,189
363,045
Real estate – commercial and farmland 1,558,882
1,406,219
Real estate – residential 969,289
781,018
Consumer installment 183,314
96,915
Other 5,795
12,486
$ 4,574,678
$ 3,626,821

~~Purchased~~Included in commercial, financial and agricultural loans are defined as loans that were acquired in bank acquisitions including those that are covered by a loss-sharing agreement with the Federal Deposit Insurance Corporation (the “FDIC”). Purchased loans totaling $917.1 million and $1.07 billion at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016, respectively,~~2020 above are ~~not included in the above schedule.~~

~~Purchased loans are shown below according to major loan type as of the end of the periods shown:~~

(dollars in thousands) September 30,
2017 December 31,
2016
Commercial, financial and agricultural $ 80,895
$ 96,537
Real estate – construction and development 68,583
81,368
Real estate – commercial and farmland 500,169
576,355
Real estate – residential 264,312
310,277
Consumer installment 3,167
4,654
$ 917,126
$ 1,069,191

~~A rollforward of purchased loans for the nine months ended September 30, 2017 and 2016 is shown below:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Balance, January 1 $ 1,069,191
$ 909,083
Charge-offs, net of recoveries (1,761 ) (3,122 )
Additions due to acquisitions —
402,942
Accretion 9,023
12,926
Transfers to purchased other real estate owned (4,294 ) (6,262 )
Payments received (155,033 ) (186,276 )
Other —
90
Ending balance $ 917,126
$ 1,129,381

~~The following is a summary of changes in the accretable discounts of purchased loans during the nine months ended September 30, 2017 and 2016:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Balance, January 1 $ 30,624
$ 33,848
Additions due to acquisitions —
9,991
Accretion (9,023 ) (12,926 )
Accretable discounts removed due to charge-offs (15 ) (161 )
Transfers between non-accretable and accretable discounts, net 923
2,544
Ending balance $ 22,509
$ 33,296

Purchased loan pools are defined as groups of residential mortgage loans that were not acquired in bank acquisitions or FDIC-assisted transactions. As of September 30, 2017, purchased loan pools totaled $465.2$792.0 million and ~~consisted of whole-loan, adjustable rate residential mortgages~~$827.4 million, respectively, related to the SBA's Paycheck Protection Program (“PPP”). Accrued interest receivable on ~~properties outside~~loans is reported in other assets on the ~~Company’s markets, with principal balances~~consolidated balance sheets totaling ~~$459.1~~$67.8 million and ~~$6.1~~$73.4 million ~~of remaining purchase premium paid~~ at ~~acquisition. As of December~~March 31, ~~2016, purchased loan pools totaled $568.3 million with principal balances totaling $559.4 million and $8.9 million of remaining purchase premium paid at acquisition. At September 30, 2017~~2021 and December 31, ~~2016, one loan in the purchased loan pools with a principal balance~~2020, respectively. The Company recorded an allowance for credit losses of ~~$915,000~~$556,000 and ~~$925,000, respectively, was classified as a troubled debt restructuring and risk-rated grade 40, while all other~~$718,000 related to deferred interest on loans ~~included in the purchased loan pools were performing current loans risk-rated grade 20. During the second quarter of 2017, this troubled debt restructuring defaulted on~~modified under its ~~restructured terms and was placed on nonaccrual status. At September 30, 2017~~Disaster Relief Program at March 31, 2021 and December 31, 2016, the Company had allocated $1.5 million and $1.8 million, respectively, of allowance for loan losses for the purchased loan pools. As part of the due diligence process prior to purchasing an individual mortgage pool, a complete re-underwrite of the individual loan files was conducted. The underwriting process included a review of all income, asset, credit and property related documentation that was used to originate the loan. Underwriters utilized the originating lender’s program guidelines, as well as general prudent mortgage lending standards, to assess each individual loan file. Additional research was conducted to assess the real estate market conditions and market expectations in the geographic areas where a collateral concentration existed. As part of this review, an automated valuation model was employed to provide current collateral valuations and to support individual loan-to-value ratios. Additionally, a sample of site inspections was completed to provide further assurance. The results of the due diligence review were evaluated by officers of the Company in order to determine overall conformance to the Bank’s credit and lending policies.2020, respectively.

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 ~~against~~to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. ~~Loans are~~The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when ~~all the~~(i) none of its principal and interest ~~amounts contractually~~is due ~~are brought current~~ and ~~future payments are reasonably assured.~~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, excluding purchased loans:~~basis:


(dollars in thousands)	March 31, 2021		December 31, 2020
Commercial, financial and agricultural	$	9,686	$	9,836
Consumer installment	646		709
Indirect automobile	1,530		2,831



Real estate – construction and development	5,421		5,407
Real estate – commercial and farmland	14,046		18,517
Real estate – residential	39,860		39,157
	$	71,189	$	76,457

(dollars in thousands) September 30,
2017 December 31,
2016
Commercial, financial and agricultural $ 2,409
$ 1,814
Real estate – construction and development 735
547
Real estate – commercial and farmland 5,705
8,757
Real estate – residential 5,984
6,401
Consumer installment 492
595
$ 15,325
$ 18,114

There was 0 interest income recognized on nonaccrual loans during the three months ended March 31, 2021 and 2020.

The following table presents an analysis of ~~purchased~~nonaccrual loans ~~accounted~~with no related allowance for ~~on a nonaccrual basis:~~credit losses:


(dollars in thousands)	March 31, 2021		December 31, 2020
Commercial, financial and agricultural	$	966	$	764





Real estate – construction and development	66		416
Real estate – commercial and farmland	3,621		7,015
Real estate – residential	6,842		5,299
	$	11,495	$	13,494

(dollars in thousands) September 30,
2017 December 31,
2016
Commercial, financial and agricultural $ 2,086
$ 692
Real estate – construction and development 3,255
2,611
Real estate – commercial and farmland 6,974
10,174
Real estate – residential 6,646
9,476
Consumer installment 88
13
$ 19,049
$ 22,966

The following table presents an analysis of past-due loans ~~excluding purchased past-due loans~~ as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~ 2020:


(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
March 31, 2021
Commercial, financial and agricultural	$	5,729	$	1,094	$	4,922	$	11,745	$	1,599,284	$	1,611,029	$	0
Consumer installment	1,774		1,017		1,128		3,919		253,178		257,097		749
Indirect automobile	1,036		318		971		2,325		480,312		482,637		0
Mortgage warehouse	0		0		0		0		880,216		880,216		0
Municipal	0		0		0		0		659,228		659,228		0
Premium finance	4,693		2,833		4,057		11,583		694,796		706,379		4,057
Real estate – construction and development	28,769		1,898		2,621		33,288		1,499,946		1,533,234		291
Real estate – commercial and farmland	9,796		527		8,114		18,437		5,598,389		5,616,826		0
Real estate – residential	13,307		4,199		35,904		53,410		2,799,749		2,853,159		0
Total	$	65,104	$	11,886	$	57,717	$	134,707	$	14,465,098	$	14,599,805	$	5,097


(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		(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, 2017
December 31, 2020															December 31, 2020
Commercial, financial and agricultural	$	5,388	$	2,488	$	5,025	$	12,901	$	1,294,308	$	1,307,209	$	2,941	Commercial, financial and agricultural	$	4,576	$	2,018	$	5,652	$	12,246	$	1,615,231	$	1,627,477	$	0
Consumer installment															Consumer installment	2,189		1,114		2,318		5,621		301,374		306,995		1,755
Indirect automobile															Indirect automobile	3,293		1,006		2,171		6,470		573,613		580,083		0
Mortgage warehouse															Mortgage warehouse	0		0		0		0		916,353		916,353		0
Municipal															Municipal	0		0		0		0		659,403		659,403		0
Premium finance															Premium finance	7,188		3,895		6,571		17,654		670,187		687,841		6,571
Real estate – construction and development	341		52		517		910		549,279		550,189		—		Real estate – construction and development	13,348		723		5,150		19,221		1,587,489		1,606,710		0
Real estate – commercial and farmland	2,369		1,097		5,203		8,669		1,550,213		1,558,882		—		Real estate – commercial and farmland	5,370		1,701		8,651		15,722		5,284,284		5,300,006		0
Real estate – residential	3,293		1,938		4,165		9,396		959,893		969,289		—		Real estate – residential	20,519		3,125		34,081		57,725		2,738,332		2,796,057		0
Consumer installment loans	1,034		408		338		1,780		181,534		183,314		—
Other	—		—		—		—		5,795		5,795		—
Total	$	12,425	$	5,983	$	15,248	$	33,656	$	4,541,022	$	4,574,678	$	2,941	Total	$	56,483	$	13,582	$	64,594	$	134,659	$	14,346,266	$	14,480,925	$	8,326

December 31, 2016
Commercial, financial and agricultural	$	565	$	82	$	1,293	$	1,940	$	965,198	$	967,138	$	—
Real estate – construction and development	908		446		439		1,793		361,252		363,045		—
Real estate – commercial and farmland	6,329		1,711		6,945		14,985		1,391,234		1,406,219		—
Real estate – residential	6,354		1,282		5,302		12,938		768,080		781,018		—
Consumer installment loans	624		263		350		1,237		95,678		96,915		—
Other	—		—		—		—		12,486		12,486		—
Total	$	14,780	$	3,784	$	14,329	$	32,893	$	3,593,928	$	3,626,821	$	—

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 collateral value 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 exceeded the estimated fair value of the collateral.

The following table presents an analysis of ~~purchased past-due loans as of September 30, 2017~~collateral-dependent financial assets and ~~December 31, 2016:~~ related allowance for credit losses:


	March 31, 2021				December 31, 2020
(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses
Commercial, financial and agricultural	$	5,375	$	1,777	$	5,490	$	2,252




Premium finance	1,577		11		3,523		0
Real estate – construction and development	4,109		619		4,173		512
Real estate – commercial and farmland	93,689		20,378		100,180		21,001
Real estate – residential	12,672		1,579		9,716		891
	$	117,422	$	24,364	$	123,082	$	24,656

(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, 2017

Commercial, financial and agricultural $ 2,674
$ 2
$ 288
$ 2,964
$ 77,931
$ 80,895
$ —
Real estate – construction and development 1,221
935
1,713
3,869
64,714
68,583
—
Real estate – commercial and farmland 2,842
1,318
1,823
5,983
494,186
500,169
—
Real estate – residential 3,308
440
3,435
7,183
257,129
264,312
—
Consumer installment loans 1
4
43
48
3,119
3,167
—
Total $ 10,046
$ 2,699
$ 7,302
$ 20,047
$ 897,079
$ 917,126
$ —

December 31, 2016

Commercial, financial and agricultural $ 113
$ 18
$ 593
$ 724
$ 95,813
$ 96,537
$ —
Real estate – construction and development 161
11
2,518
2,690
78,678
81,368
—
Real estate – commercial and farmland 2,034
326
7,152
9,512
566,843
576,355
—
Real estate – residential 4,566
698
6,835
12,099
298,178
310,277
—
Consumer installment loans 22
—
13
35
4,619
4,654
—
Total $ 6,896
$ 1,053
$ 17,111
$ 25,060
$ 1,044,131
$ 1,069,191
$ —

~~Impaired Loans~~

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include loans on nonaccrual status and accruing troubled debt restructurings. When determining if the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considers the borrower’s capacity to pay, which includes such factors as the borrower’s current financial statements, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as guarantor support and collateral value. The Company individually assesses for impairment all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000 (including all troubled debt restructurings, whether or not currently classified as such). The tables below include all loans deemed impaired, whether or not individually assessed for impairment. If a loan is deemed impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis.

~~The following is a summary of information pertaining to impaired loans, excluding purchased loans:~~

As of and for the Period Ended
(dollars in thousands) September 30,
2017 December 31,
2016 September 30,
2016
Nonaccrual loans $ 15,325
$ 18,114
$ 16,570
Troubled debt restructurings not included above 12,452
14,209
14,013
Total impaired loans $ 27,777
$ 32,323
$ 30,583

Quarter-to-date interest income recognized on impaired loans $ 297
$ 225
$ 252
Year-to-date interest income recognized on impaired loans $ 857
$ 1,033
$ 808
Quarter-to-date foregone interest income on impaired loans $ 233
$ 267
$ 239
Year-to-date foregone interest income on impaired loans $ 753
$ 977
$ 710

~~The following table presents an analysis of information pertaining to impaired loans, excluding purchased loans as of September 30, 2017, December 31, 2016 and September 30, 2016:~~

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2017

Commercial, financial and agricultural $ 2,924
$ 1,121
$ 1,331
$ 2,452
$ 379
$ 2,478
$ 2,380
Real estate – construction and development 1,655
532
627
1,159
81
1,179
1,160
Real estate – commercial and farmland 11,451
536
9,938
10,474
806
10,669
11,416
Real estate – residential 15,211
4,558
8,636
13,194
1,058
13,683
14,814
Consumer installment loans 538
498
—
498
—
507
554
Total $ 31,779
$ 7,245
$ 20,532
$ 27,777
$ 2,324
$ 28,516
$ 30,324

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment

Twelve
Month
Average
Recorded
Investment
December 31, 2016

Commercial, financial and agricultural $ 3,068
$ 204
$ 1,656
$ 1,860
$ 134
$ 1,613
$ 1,684
Real estate – construction and development 2,047
—
1,233
1,233
273
1,590
2,018
Real estate – commercial and farmland 13,906
6,811
6,065
12,876
1,503
12,948
12,845
Real estate – residential 15,482
2,238
13,503
15,741
3,080
15,525
14,453
Consumer installment loans 671
—
613
613
5
576
506
Total $ 35,174
$ 9,253
$ 23,070
$ 32,323
$ 4,995
$ 32,252
$ 31,506

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2016

Commercial, financial and agricultural $ 2,568
$ 252
$ 1,114
$ 1,366
$ 118
$ 1,736
$ 1,640
Real estate – construction and development 2,972
—
1,946
1,946
537
2,001
2,214
Real estate – commercial and farmland 14,015
5,499
7,520
13,019
873
12,776
12,837
Real estate – residential 14,350
2,046
11,667
13,713
2,648
13,686
13,516
Consumer installment loans 586
—
539
539
6
492
479
Total $ 34,491
$ 7,797
$ 22,786
$ 30,583
$ 4,182
$ 30,691
$ 30,686

~~The following is a summary of information pertaining to purchased impaired loans:~~

As of and for the Period Ended
(dollars in thousands) September 30,
2017 December 31,
2016 September 30,
2016
Nonaccrual loans $ 19,049
$ 22,966
$ 23,827
Troubled debt restructurings not included above 20,205
23,543
21,117
Total impaired loans $ 39,254
$ 46,509
$ 44,944

Quarter-to-date interest income recognized on impaired loans $ 493
$ 377
$ 1,493
Year-to-date interest income recognized on impaired loans $ 1,246
$ 2,755
$ 2,378
Quarter-to-date foregone interest income on impaired loans $ 356
$ 354
$ 346
Year-to-date foregone interest income on impaired loans $ 958
$ 1,637
$ 1,283

~~The following table presents an analysis of information pertaining to purchased impaired loans as of September 30, 2017, December 31, 2016 and September 30, 2016:~~

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2017

Commercial, financial and agricultural $ 5,333
$ 345
$ 1,741
$ 2,086
$ 800
$ 1,128
$ 831
Real estate – construction and development 9,268
1,189
3,088
4,277
537
3,885
3,807
Real estate – commercial and farmland 16,492
1,516
11,766
13,282
1,140
13,658
16,063
Real estate – residential 22,462
7,224
12,297
19,521
762
20,088
21,308
Consumer installment loans 97
88
—
88
—
58
40
Total $ 53,652
$ 10,362
$ 28,892
$ 39,254
$ 3,239
$ 38,817
$ 42,049

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment

Twelve
Month
Average
Recorded
Investment
December 31, 2016

Commercial, financial and agricultural $ 5,031
$ 370
$ 322
$ 692
$ —
$ 783
$ 2,206
Real estate – construction and development 24,566
493
3,477
3,970
153
3,888
4,279
Real estate – commercial and farmland 36,174
3,598
15,036
18,634
385
17,806
19,872
Real estate – residential 27,022
7,883
15,306
23,189
1,088
23,201
23,163
Consumer installment loans 37
24
—
24
—
51
96
Total $ 92,830
$ 12,368
$ 34,141
$ 46,509
$ 1,626
$ 45,729
$ 49,616

(dollars in thousands)
Unpaid
Contractual
Principal
Balance

Recorded
Investment
With No
Allowance

Recorded
Investment
With
Allowance

Total
Recorded
Investment

Related
Allowance

Three
Month
Average
Recorded
Investment
Nine
Month
Average
Recorded
Investment
September 30, 2016

Commercial, financial and agricultural $ 5,097
$ 648
$ 225
$ 873
$ —
$ 838
$ 2,251
Real estate – construction and development 24,253
296
3,509
3,805
184
3,946
4,075
Real estate – commercial and farmland 41,098
1,861
15,116
16,977
402
18,196
19,569
Real estate – residential 26,908
7,473
15,740
23,213
935
23,103
22,893
Consumer installment loans 98
76
—
76
—
80
105
Total $ 97,454
$ 10,354
$ 34,590
$ 44,944
$ 1,521
$ 46,163
$ 48,893

Credit Quality Indicators

The Company uses a nine 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:

Grade 101 – Prime Credit – This grade represents loans to the Company’s most creditworthy borrowers or loans that are secured by cash or cash equivalents.

Grade 152 – ~~Good~~Strong Credit – This grade includes loans that exhibit one or more characteristics better than that of a ~~Satisfactory~~Good Credit. Generally, the debt service coverage and borrower’s liquidity is materially better than required by the Company’s loan policy.

Grade 203 – ~~Satisfactory~~Good Credit – This grade is assigned to loans to borrowers who exhibit satisfactory credit histories, contain acceptable loan structures and demonstrate ability to repay.

Grade 234 – ~~Performing, Under-Collateralized~~Satisfactory Credit – This grade is assigned to loans that are currently performing and supported by adequate financial information that reflects repayment capacity but exhibits a loan-to-value ratio greater than 110%, based on a documented collateral valuation.

~~Grade 25 – Minimum Acceptable Credit~~ – This grade includes loans which exhibit all the characteristics of a ~~Satisfactory~~Good Credit, but warrant more than normal level of banker supervision due to (i) circumstances which elevate the risks of performance (such as start-up operations, untested management, heavy leverage and interim losses); (ii) adverse, extraordinary events that have affected, or could affect, the borrower’s cash flow, financial condition, ability to continue operating profitability or refinancing (such as death of principal, fire and divorce); (iii) loans that require more than the normal servicing requirements (such as any type of construction financing, acquisition and development loans, accounts receivable or inventory loans and floor plan loans); (iv) existing technical exceptions which raise some doubts about the Bank’s perfection in its collateral position or the continued financial capacity of the borrower; or (v) improvements in formerly criticized borrowers, which may warrant banker supervision.

Grade 305 – Fair Credit – This grade is assigned to loans that are currently performing and supported by adequate financial information that reflects repayment capacity but exhibits a loan-to-value ratio greater than 110%, based on a documented collateral valuation.

Grade 6 – Other ~~Asset~~Assets Especially Mentioned – 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.

Grade 407 – 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.

Grade 508 – 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.

Grade 609 – 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 ~~table presents~~tables present the loan ~~portfolio, excluding purchased loans,~~portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands) as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016 (in thousands):~~

Risk
Grade Commercial,
Financial and
Agricultural Real Estate -
Construction and
Development Real Estate -
Commercial and
Farmland Real Estate -
Residential Consumer
Installment
Loans Other Total
September 30, 2017
10 $ 495,116
$ —
$ 6,029
$ 49
$ 9,068
$ —
$ 510,262
15 559,781
959
75,462
55,759
256
—
692,217
20 117,904
48,640
1,005,945
800,557
24,332
5,795
2,003,173
23 343
4,403
4,242
5,986
3
—
14,977
25 121,558
488,956
431,862
86,702
148,891
—
1,277,969
30 8,350
4,458
17,568
5,674
93
—
36,143
40 4,150
2,773
17,774
14,562
671
—
39,930
50 7
—
—
—
—
—
7
60 —
—
—
—
—
—
—
Total $ 1,307,209
$ 550,189
$ 1,558,882
$ 969,289
$ 183,314
$ 5,795
$ 4,574,678

December 31, 2016
10 $ 397,093
$ —
$ 8,814
$ 125
$ 8,532
$ —
$ 414,564
15 376,323
5,390
102,893
54,136
405
—
539,147
20 97,057
36,307
889,539
609,583
25,026
12,486
1,669,998
23 366
6,803
8,533
7,470
14
—
23,186
25 92,066
307,903
357,151
88,370
62,098
—
907,588
30 144
719
22,986
5,197
126
—
29,172
40 4,089
5,923
16,303
16,038
714
—
43,067
50 —
—
—
99
—
—
99
60 —
—
—
—
—
—
—
Total $ 967,138
$ 363,045
$ 1,406,219
$ 781,018
$ 96,915
$ 12,486
$ 3,626,821

2020. 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 ~~following table presents~~Company had an immaterial amount of revolving loans which converted to term loans and the ~~purchased loan portfolio by~~amortized cost basis of those loans is included in the applicable origination year. There were 0 loans risk ~~grade as of September 30, 2017 and~~graded 9 at December 31, ~~2016 (in thousands):~~ 2020.


As of March 31, 2021	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2021		2020		2019		2018		2017		Prior				Total
Commercial, Financial and Agricultural
Risk Grade:
1	$	329,750	$	483,062	$	2,631	$	983	$	295	$	5,290	$	63,365		$	885,376
2	7,799		449		8,991		638		810		976		10,771			30,434
3	30,638		69,131		43,563		14,490		17,168		9,080		61,094			245,164
4	38,031		74,263		59,189		77,684		30,449		35,375		75,733			390,724
5	76		4,191		4,543		4,374		6,345		4,493		6,431			30,453
6	3		12		1,673		470		576		3,847		397			6,978
7	343		3,080		3,790		2,686		4,072		6,361		1,568			21,900


Total commercial, financial and agricultural	$	406,640	$	634,188	$	124,380	$	101,325	$	59,715	$	65,422	$	219,359		$	1,611,029

Risk
Grade

Commercial,
Financial and
Agricultural

Real Estate -
Construction and
Development

Real Estate -
Commercial and
Farmland

Real Estate -
Residential

Consumer
Installment
Loans
Other Total
September 30, 2017
10 $ 3,377
$ —
$ —
$ —
$ 662
$ —
$ 4,039
15 4,969
—
5,327
96,570
231
—
107,097
20 9,497
13,548
198,960
52,646
1,204
—
275,855
23 —
2,302
6,936
10,621
—
—
19,859
25 47,822
40,500
243,216
79,374
864
—
411,776
30 12,817
7,617
22,829
7,378
55
—
50,696
40 2,413
4,616
22,901
17,723
151
—
47,804
50 —
—
—
—
—
—
—
60 —
—
—
—
—
—
—
Total $ 80,895
$ 68,583
$ 500,169
$ 264,312
$ 3,167
$ —
$ 917,126

December 31, 2016
10 $ 5,722
$ —
$ —
$ —
$ 814
$ —
$ 6,536
15 1,266
—
7,619
31,331
570
—
40,786
20 16,204
10,686
194,168
111,712
1,583
—
334,353
23 22
3,643
9,019
14,791
—
—
27,475
25 67,123
56,006
323,242
121,379
1,276
—
569,026
30 5,072
7,271
15,039
7,605
45
—
35,032
40 1,128
3,762
27,268
23,459
366
—
55,983
50 —
—
—
—
—
—
—
60 —
—
—
—
—
—
—
Total $ 96,537
$ 81,368
$ 576,355
$ 310,277
$ 4,654
$ —
$ 1,069,191


As of March 31, 2021	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2021		2020		2019		2018		2017		Prior				Total
Consumer Installment
Risk Grade:
1	$	1,597	$	5,577	$	2,625	$	1,308	$	510	$	33	$	155		$	11,805
2	0		0		0		33		1		58		41			133
3	5,983		11,263		5,382		2,045		647		1,921		4,991			32,232
4	11,275		87,762		46,500		35,996		14,116		11,715		3,308			210,672
5	0		46		86		12		25		163		0			332
6	0		0		0		9		0		143		6			158
7	0		287		525		188		94		581		86			1,761

9	0		0		2		0		0		0		2			4
Total consumer installment	$	18,855	$	104,935	$	55,120	$	39,591	$	15,393	$	14,614	$	8,589		$	257,097
Indirect Automobile
Risk Grade:

2	$	0	$	0	$	0	$	75	$	29	$	6,512	$	0		$	6,616
3	0		0		31,573		162,594		159,571		119,905		0			473,643


6	0		0		0		30		33		101		0			164
7	0		0		38		288		354		1,534		0			2,214


Total indirect automobile	$	0	$	0	$	31,611	$	162,987	$	159,987	$	128,052	$	0		$	482,637
Mortgage Warehouse
Risk Grade:


3	$	0	$	0	$	0	$	0	$	0	$	0	$	880,216		$	880,216






Total mortgage warehouse	$	0	$	0	$	0	$	0	$	0	$	0	$	880,216		$	880,216
Municipal
Risk Grade:
1	$	25,045	$	91,812	$	11,565	$	8,540	$	141,216	$	205,673	$	0		$	483,851
2	0		72,903		0		0		0		13,012		0			85,915
3	0		61,551		682		0		5,452		12,648		0			80,333
4	0		6,285		0		0		0		2,844		0			9,129





Total municipal	$	25,045	$	232,551	$	12,247	$	8,540	$	146,668	$	234,177	$	0		$	659,228
Premium Finance
Risk Grade:

2	$	351,490	$	340,097	$	9,738	$	257	$	638	$	100	$	0		$	702,320




7	0		3,980		79		0		0		0		0			4,059


Total premium finance	$	351,490	$	344,077	$	9,817	$	257	$	638	$	100	$	0		$	706,379


As of March 31, 2021	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2021		2020		2019		2018		2017		Prior				Total
Real Estate – Construction and Development
Risk Grade:

2	$	0	$	62	$	0	$	0	$	0	$	0	$	0		$	62
3	14,018		42,007		6,565		4,269		3,444		11,263		873			82,439
4	168,849		545,742		362,783		132,341		49,482		35,491		37,990			1,332,678
5	387		2,136		17,825		38,407		13,755		29,389		106			102,005
6	0		120		892		5,991		598		1,194		0			8,795
7	0		143		3,019		482		629		2,982		0			7,255


Total real estate – construction and development	$	183,254	$	590,210	$	391,084	$	181,490	$	67,908	$	80,319	$	38,969		$	1,533,234
Real Estate – Commercial and Farmland
Risk Grade:
1	$	0	$	0	$	0	$	156	$	0	$	0	$	0		$	156
2	0		7,352		380		448		2,094		13,262		17			23,553
3	186,578		928,268		414,458		181,807		248,378		515,131		52,651			2,527,271
4	87,859		366,846		563,285		396,659		255,335		671,363		43,474			2,384,821
5	1,323		17,020		96,085		71,810		63,286		142,589		4,223			396,336
6	0		0		10,313		15,984		47,716		38,807		3			112,823
7	0		7,714		55,005		18,532		13,038		76,935		642			171,866


Total real estate – commercial and farmland	$	275,760	$	1,327,200	$	1,139,526	$	685,396	$	629,847	$	1,458,087	$	101,010		$	5,616,826
Real Estate - Residential
Risk Grade:
1	$	0	$	0	$	0	$	0	$	0	$	17	$	0		$	17
2	0		36		388		11		99		42,503		1,313			44,350
3	296,261		731,149		434,948		202,552		154,099		467,379		197,899			2,484,287
4	5,768		29,740		17,636		14,464		10,104		61,238		40,174			179,124
5	481		8,581		28,055		9,476		9,202		28,452		3,523			87,770
6	49		418		951		881		367		3,520		107			6,293
7	789		3,385		10,435		13,031		4,406		16,630		2,642			51,318


Total real estate - residential	$	303,348	$	773,309	$	492,413	$	240,415	$	178,277	$	619,739	$	245,658		$	2,853,159


As of December 31, 2020	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2020		2019		2018		2017		2016		Prior				Total
Commercial, Financial and Agricultural
Risk Grade:
1	$	829,710	$	2,912	$	1,055	$	387	$	490	$	4,961	$	36,373		$	875,888
2	1,213		1,512		668		996		172		967		14,317			19,845
3	109,352		54,266		16,932		17,968		7,027		3,905		68,806			278,256
4	86,837		71,645		74,388		37,779		15,359		23,069		85,366			394,443
5	4,061		4,269		4,772		7,443		804		5,842		4,352			31,543
6	21		72		506		193		3,509		1,232		632			6,165
7	3,312		3,460		2,579		3,573		1,294		5,214		1,886			21,318
8	0		0		0		0		0		0		19			19

Total commercial, financial and agricultural	$	1,034,506	$	138,136	$	100,900	$	68,339	$	28,655	$	45,190	$	211,751		$	1,627,477
Consumer Installment
Risk Grade:
1	$	6,782	$	3,001	$	1,550	$	583	$	95	$	1	$	667		$	12,679
2	0		0		46		2		0		63		42			153
3	15,172		6,960		2,838		887		1,455		601		4,389			32,302
4	120,800		53,593		53,182		16,329		3,121		9,437		3,556			260,018
5	49		127		28		30		3		242		8			487
6	0		2		9		0		0		145		0			156
7	30		209		72		105		134		553		97			1,200


Total consumer installment	$	142,833	$	63,892	$	57,725	$	17,936	$	4,808	$	11,042	$	8,759		$	306,995
Indirect Automobile
Risk Grade:

2	$	0	$	0	$	81	$	31	$	5,356	$	3,054	$	0		$	8,522
3	0		35,432		187,656		188,302		103,570		52,781		0			567,741


6	0		0		57		70		62		85		0			274
7	0		163		519		561		1,078		1,225		0			3,546


Total indirect automobile	$	0	$	35,595	$	188,313	$	188,964	$	110,066	$	57,145	$	0		$	580,083
Mortgage Warehouse
Risk Grade:


3	$	0	$	0	$	0	$	0	$	0	$	0	$	916,353		$	916,353






Total mortgage warehouse	$	0	$	0	$	0	$	0	$	0	$	0	$	916,353		$	916,353
Municipal
Risk Grade:
1	$	91,692	$	12,685	$	8,944	$	143,741	$	124,929	$	97,923	$	0		$	479,914
2	73,000		0		0		0		9,410		0		0			82,410
3	39,990		713		0		5,453		7,204		5,489		0			58,849
4	31,394		0		0		0		0		6,836		0			38,230





Total municipal	$	236,076	$	13,398	$	8,944	$	149,194	$	141,543	$	110,248	$	0		$	659,403


As of December 31, 2020	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2020		2019		2018		2017		2016		Prior				Total
Premium Finance
Risk Grade:

2	$	661,614	$	18,236	$	515	$	746	$	121	$	38	$	0		$	681,270




7	5,811		760		0		0		0		0		0			6,571


Total premium finance	$	667,425	$	18,996	$	515	$	746	$	121	$	38	$	0		$	687,841
Real Estate – Construction and Development
Risk Grade:


3	$	59,325	$	7,035	$	6,870	$	8,046	$	3,415	$	6,916	$	1,293		$	92,900
4	605,254		445,496		205,444		50,181		14,672		26,915		68,574			1,416,536
5	1,614		26,720		9,612		13,261		17,712		10,127		107			79,153
6	685		1,036		3,646		1,302		0		4,564		0			11,233
7	15		2,858		566		271		42		3,136		0			6,888


Total real estate – construction and development	$	666,893	$	483,145	$	226,138	$	73,061	$	35,841	$	51,658	$	69,974		$	1,606,710
Real Estate – Commercial and Farmland
Risk Grade:
1	$	0	$	0	$	161	$	0	$	0	$	0	$	0		$	161
2	7,482		540		521		2,131		4,375		10,663		1,138			26,850
3	918,939		370,703		143,591		197,942		224,712		274,665		67,067			2,197,619
4	344,777		584,814		423,241		331,024		242,573		545,745		34,326			2,506,500
5	4,027		39,216		69,173		80,726		25,561		94,461		1,274			314,438
6	0		10,680		4,895		28,139		7,670		31,224		0			82,608
7	250		54,439		18,574		15,489		27,044		55,763		271			171,830


Total real estate – commercial and farmland	$	1,275,475	$	1,060,392	$	660,156	$	655,451	$	531,935	$	1,012,521	$	104,076		$	5,300,006
Real Estate - Residential
Risk Grade:
1	$	0	$	0	$	0	$	0	$	0	$	19	$	0		$	19
2	37		398		12		121		1,275		47,286		1,402			50,531
3	763,101		529,268		254,632		186,531		154,285		388,825		203,491			2,480,133
4	19,296		19,874		15,784		11,607		14,240		53,869		44,276			178,946
5	400		1,768		3,489		3,479		1,151		12,824		3,618			26,729
6	527		1,843		1,030		334		724		3,391		255			8,104
7	3,442		9,387		12,339		4,667		2,157		16,659		2,944			51,595


Total real estate - residential	$	786,803	$	562,538	$	287,286	$	206,739	$	173,832	$	522,873	$	255,986		$	2,796,057

Troubled Debt Restructurings

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession. Concessions may include interest rate reductions to below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. The Company has exhibited the greatest success for rehabilitation of the loan by a reduction in the rate alone (maintaining the amortization of the debt) or a combination of a rate reduction and the forbearance of previously past due interest or principal. This has most typically been evidenced in certain commercial real estate loans whereby a disruption in the borrower’s cash flow resulted in an extended past due status, of which the borrower was unable to catch up completely as the cash flow of the property ultimately stabilized at a level lower than its original level. A reduction in rate, coupled with a forbearance of unpaid principal and/or interest, allowed the net cash flows to service the debt under the modified terms.

The Company’s policy requires a restructure request to be supported by a current, well-documented credit evaluation of the borrower’s financial condition and a collateral evaluation that is no older than six months from the date of the restructure. Key factors of that evaluation include the documentation of current, recurring cash flows, support provided by the guarantor(s) and the current valuation of the collateral. If the appraisal in the file is older than six months, an evaluation must be made as to the continued reasonableness of the valuation. For certain income-producing properties, current rent rolls and/or other income information can be utilized to support the appraisal valuation, when coupled with documented cap rates within our markets and a physical inspection of the collateral to validate the current condition.

The Company’s policy states that in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard ~~and placed on nonaccrual status~~ until such time the borrower has demonstrated the ability to service the loan payments based on the restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered toward the six month required term of satisfactory payment history. 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 and approved by the Company’s Chief Credit Officer.

In the normal course of business, the Company renews loans with a modification of the interest rate or terms that are not deemed asto be troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified loans in the first ~~nine~~three months of ~~2017~~2021 and ~~2016~~2020 totaling ~~$36.6~~$118.0 million and ~~$58.2~~$71.3 million, respectively, under such parameters.

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the Company had a balance of ~~$14.2~~$87.1 million and ~~$18.2~~$85.0 million, respectively, in troubled debt ~~restructurings, excluding purchased loans.~~restructurings. The Company has recorded ~~$2.8~~$1.2 million and $1.2 million in previous charge-offs on such loans at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. The Company’s balance in the allowance for ~~loan~~credit losses allocated to such troubled debt restructurings was ~~$1.2~~$14.2 million and ~~$3.1~~$13.0 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. At ~~September 30, 2017,~~March 31, 2021, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, the Company modified loans as troubled debt restructurings ~~excluding purchased loans,~~ with principal balances of ~~$783,000~~$8.7 million and ~~$2.9~~$1.0 million, respectively, and these modifications did not have a material impact on the Company’s allowance for ~~loan loss.~~credit losses. The following table presents the loans by class modified as troubled debt restructurings ~~excluding purchased loans,~~ which occurred during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016:~~2020:


	September 30, 2017			September 30, 2016				March 31, 2021			March 31, 2020
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	1	$	4	5	$	59	Commercial, financial and agricultural	4	$	463	0	$	0
Real estate – construction and development	—	—		2	251
Consumer installment							Consumer installment	0	0		1	9

Real estate – commercial and farmland	2	226		4	1,658		Real estate – commercial and farmland	2	7,658		1	64
Real estate – residential	10	526		7	887		Real estate – residential	5	572		8	903
Consumer installment	6	27		9	44
Total	19	$	783	27	$	2,899	Total	11	$	8,693	10	$	976

Troubled debt restructurings ~~excluding purchased loans,~~ with an outstanding balance of ~~$1.2~~$6.2 million and ~~$793,000~~$3.0 million defaulted during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively, and these defaults did not have a material impact on the Company’s allowance for ~~loan loss.~~credit losses. The following table presents for ~~loans, excluding purchased~~ loans the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016:~~2020:


	September 30, 2017			September 30, 2016				March 31, 2021			March 31, 2020
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	58	5	$	51	Commercial, financial and agricultural	3	$	56	1	$	200
Consumer installment							Consumer installment	5	6		0	0
Indirect automobile							Indirect automobile	16	94		0	0

Real estate – construction and development	1	25		—	—		Real estate – construction and development	1	1		2	287
Real estate – commercial and farmland	4	200		5	517		Real estate – commercial and farmland	2	5,193		2	681
Real estate – residential	12	878		3	219		Real estate – residential	11	809		19	1,800
Consumer installment	7	25		2	6
Total	28	$	1,186	15	$	793	Total	38	$	6,159	24	$	2,968

The following table presents the amount of troubled debt restructurings by loan class ~~excluding purchased loans,~~ classified separately as accrual and nonaccrual at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~2020:


March 31, 2021							March 31, 2021	Accruing Loans			Non-Accruing Loans
Loan Class							Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural							Commercial, financial and agricultural	10	$	930	12	$	854
Consumer installment							Consumer installment	8	27		22	53
Indirect automobile							Indirect automobile	385	1,931		47	321

September 30, 2017	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	44	13	$	129

Real estate – construction and development	7	424		2	34		Real estate – construction and development	4	501		5	706
Real estate – commercial and farmland	16	4,769		5	210		Real estate – commercial and farmland	27	43,398		10	2,233
Real estate – residential	78	7,209		16	1,212		Real estate – residential	248	33,324		36	2,818
Consumer installment	4	6		36	130
Total	109	$	12,452	72	$	1,715	Total	682	$	80,111	132	$	6,985


December 31, 2020							December 31, 2020	Accruing Loans			Non-Accruing Loans
Loan Class							Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural							Commercial, financial and agricultural	9	$	521	11	$	849
Consumer installment							Consumer installment	10	32		20	56
Indirect automobile							Indirect automobile	437	2,277		51	461

December 31, 2016	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	47	15	$	114

Real estate – construction and development	8	686		2	34		Real estate – construction and development	4	506		5	707
Real estate – commercial and farmland	16	4,119		5	2,970		Real estate – commercial and farmland	28	36,707		7	1,401
Real estate – residential	82	9,340		15	739		Real estate – residential	264	38,800		34	2,671
Consumer installment	7	17		32	130
Total	117	$	14,209	69	$	3,987	Total	752	$	78,843	128	$	6,145

~~As of September 30, 2017 and December 31, 2016,~~COVID-19 Deferrals

In response to the COVID-19 pandemic, the Company ~~had a balance~~offered affected borrowers payment relief under its Disaster Relief Program. These modifications primarily consisted of ~~$26.0 million and $28.1 million, respectively, in troubled debt restructurings included in purchased loans.~~short-term payment deferrals or interest-only periods to assist customers. The Company has ~~recorded $1.5~~also provided payment modifications to certain borrowers in economically sensitive industries of various terms up to nine months. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not deemed to be troubled debt restructurings. As of March 31, 2021, $235.4 million in ~~previous charge-offs on such~~ loans remained in payment deferral related to COVID-19 pandemic Disaster Relief Program compared with $332.8 million at ~~both September 30, 2017 and~~ December 31, ~~2016. At September 30, 2017, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.~~2020.

During the nine months ended September 30, 2017 and 2016, the Company modified purchased loans as troubled debt restructurings, with principal balances of $1.0 million and $1.9 million, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the purchased loans by class modified as troubled debt restructurings, which occurred during the nine months ended September 30, 2017 and 2016:

September 30, 2017 September 30, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural — $ —
1 $ 76
Real estate – construction and development — —
— —
Real estate – commercial and farmland — —
3 708
Real estate – residential 8 1,005
8 1,130
Consumer installment — —
— —
Total 8 $ 1,005
12 $ 1,914

Troubled debt restructurings included in purchased loans with an outstanding balance of $2.3 million and $733,000 defaulted during the nine months ended September 30, 2017 and 2016, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss.

The ~~following~~ table below presents ~~purchased loan troubled debt restructurings by class~~short-term deferrals related to the COVID-19 pandemic that ~~defaulted (defined as 30 days past due) during the nine months ended September 30, 2017 and 2016:~~were not considered TDRs.


	March 31, 2021				December 31, 2020
(dollars in thousands)	COVID-19 Deferrals		Deferrals as a % of total loans		COVID-19 Deferrals		Deferrals as a % of total loans
Commercial, financial and agricultural	$	4,460	0.3	%	$	12,471	0.8	%
Consumer installment	569		0.2	%	1,418		0.5	%
Indirect automobile	3,536		0.7	%	8,936		1.5	%



Real estate – construction and development	418		0	%	11,049		0.7	%
Real estate – commercial and farmland	152,337		2.7	%	179,183		3.4	%
Real estate – residential	74,101		2.6	%	119,722		4.3	%
	$	235,421	1.6	%	$	332,779	2.3	%

September 30, 2017 September 30, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 1 $ 5
2 $ 76
Real estate – construction and development — —
1 10
Real estate – commercial and farmland 5 1,945
1 207
Real estate – residential 7 333
11 440
Consumer installment 1 3
— —
Total 14 $ 2,286
15 $ 733

~~The following table presents the amount of troubled debt restructurings by loan class of purchased loans, classified separately as accrual and nonaccrual at September 30, 2017 and December 31, 2016.~~

September 30, 2017 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural — $ —
3 $ 18
Real estate – construction and development 3 1,022
6 349
Real estate – commercial and farmland 15 6,308
11 3,834
Real estate – residential 119 12,875
25 1,627
Consumer installment — —
2 6
Total 137 $ 20,205
47 $ 5,834

December 31, 2016 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 1 $ 1
4 $ 91
Real estate – construction and development 6 1,358
3 30
Real estate – commercial and farmland 20 8,460
5 2,402
Real estate – residential 123 13,713
33 2,077
Consumer installment 3 11
1 —
Total 153 $ 23,543
46 $ 4,600

Allowance for ~~Loan~~Credit Losses

The allowance for ~~loan~~credit losses represents an allowance for ~~probable incurred~~expected losses inover the ~~loan portfolio. The adequacy~~remaining contractual life of the ~~allowance for loan losses is evaluated periodically based on~~assets. The contractual term does not consider extensions, renewals or modifications unless the Company reasonably expects to execute a ~~review of all significant loans,~~troubled debt restructuring with a ~~particular emphasis on non-accruing, past-due and other loans that management believes might be potentially impaired or warrant additional attention.~~borrower. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio. In addition, based on internal reviews and external reviews performed by regulatory authorities, the Company further segregates the loan portfolio by loan grades based on an assessment of risk for a particular loan or group of loans. Certain reviewed loans are assigned specific allowances when a review of relevant data determines that a general allocation is not sufficient or when the review affords management the opportunity to adjust the amount of exposure in a given credit. In establishing allowances, management considers historical loan loss experience but adjusts this data with a significant emphasis on current loan quality trends, current economic conditions and other factors in the markets where the Company operates. Factors considered include, among others, current valuations of real estate in the Company’s markets, unemployment rates, the effect of weather conditions on agricultural related entities and other significant local economic events, such as major plant closings.

The Company has developed a methodology for determining the adequacy of the allowance for loan losses which is monitored by the Company’s Chief Credit Officer. Procedures provide for the assignment of a risk rating for every loan included in the total loan portfolio. Mortgage warehouse lines of credit, overdraft protection loans, commercial insurance premium finance loans, and certain consumer and mortgage loans serviced by outside processors are treated as pools for risk rating purposes. The risk rating schedule provides nine ratings of which five ratings are classified as pass ratings and four ratings are classified as criticized ratings. Each risk rating is assigned a percentage factor to be applied to the loan balance to determine the adequate amount of reserve. The Bank’s independent internal loan review department reviews on an annual basis a sample of relationships in excess of $500,000. Sampling is based on a number of factors unique to the Bank’s portfolio risks, including, but not limited to, lending divisions, industry, risk grades, and new originations. As a result of these loan reviews, certain loans may be identified as having deteriorating

credit quality. Other loans that surface as problem loans may also be assigned specific reserves. Past-due loans are assigned risk ratings based on the number of days past due. The calculation of the allowance for loan losses, including underlying data and assumptions, is reviewed regularly by the Company’s Chief Financial Officer and the independent internal loan review department.

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~~charged off in accordance with the Federal Financial Institutions Examination Council’s (“FFIEC”) Uniform Retail Credit Classification and Account Management Policy.

Commercial loans are ~~charged-off~~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~~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~~charged off and any further collections are treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of 609 (Loss per the regulatory guidance), the uncollectible portion is ~~charged-off.~~charged off.

During the three months ended March 31, 2021, the allowance for credit losses decreased primarily due to improvement in forecasted macroeconomic factors. The allowance for credit losses was determined at March 31, 2021 using the Moody's baseline economic forecast, which Moody's defines as having a 50% probability the economy will perform better than the baseline projection and the same probability it will perform worse. The current forecast reflects, among other things, improvements in forecast levels of unemployment, home prices and commercial real estate prices compared with the forecast at December 31, 2020.

The following tables detail activity and end of period balances in the allowance for ~~loan~~credit losses by portfolio segment for the ~~three and nine-month~~ periods ~~ended September 30, 2017, the year ended December 31, 2016 and the three and nine-month periods ended September 30, 2016.~~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 March 31, 2021

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2020	$	7,359	$	4,076	$	1,929	$	3,666	$	791	$	3,879

Provision for loan losses	2,575		5,806		(528)		(145)		(1)		442
Loans charged off	(2,370)		(1,448)		(829)		0		0		(1,343)
Recoveries of loans previously charged off	727		356		700		0		0		1,122
Balance, March 31, 2021	$	8,291	$	8,790	$	1,272	$	3,521	$	790	$	4,100

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2020	$	45,304	$	88,894	$	43,524	$	199,422

Provision for loan losses	(22,587)		3,671		(5,812)		(16,579)
Loans charged off	(26)		(1,395)		(163)		(7,574)
Recoveries of loans previously charged off	167		41		188		3,301
Balance, March 31, 2021	$	22,858	$	91,211	$	37,737	$	178,570


Three Months Ended March 31, 2020
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2019	$	4,567	$	3,784	$	0	$	640	$	484	$	2,550
Adjustment to allowance for adoption of ASU 2016-13	2,587		8,012		4,109		463		(92)		4,471

Provision for loan losses	3,080		4,149		564		(1)		130		4,634
Loans charged off	(2,486)		(1,142)		(1,231)		0		0		(831)
Recoveries of loans previously charged off	362		321		344		0		0		684
Balance, March 31, 2020	$	8,110	$	15,124	$	3,786	$	1,102	$	522	$	11,508

	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2019	$	5,995	$	9,666	$	10,503	$	38,189
Adjustment to allowance for adoption of ASU 2016-13	12,248		27,073		19,790		78,661

Provision for loan losses	6,734		15,858		1,899		37,047
Loans charged off	0		(928)		(100)		(6,718)
Recoveries of loans previously charged off	342		85		207		2,345
Balance, March 31, 2020	$	25,319	$	51,754	$	32,299	$	149,524

(dollars in thousands)
Commercial,
Financial and
Agricultural

Real Estate –
Construction and
Development

Real Estate –
Commercial and
Farmland

Real Estate –
Residential

Consumer
Installment
Loans and
Other

Purchased
Loans

Purchased
Loan
Pools
Total
Three Months Ended
September 30, 2017

Balance, June 30, 2017 $ 3,302
$ 3,756
$ 7,869
$ 5,605
$ 1,155
$ 1,791
$ 1,623
$ 25,101
Provision for loan losses 910
(587 ) 68
127
670
745
(146 ) 1,787
Loans charged off (1,091 ) (1 ) (18 ) (852 ) (320 ) (161 ) —
(2,443 )
Recoveries of loans previously charged off 409
126
26
56
17
887
—
1,521
Balance, September 30, 2017 $ 3,530
$ 3,294
$ 7,945
$ 4,936
$ 1,522
$ 3,262
$ 1,477
$ 25,966

Nine Months Ended
September 30, 2017:

Balance, December 31, 2016 $ 2,192
$ 2,990
$ 7,662
$ 6,786
$ 827
$ 1,626
$ 1,837
$ 23,920
Provision for loan losses 2,535
155
540
(9 ) 1,539
1,428
(360 ) 5,828
Loans charged off (1,896 ) (95 ) (413 ) (2,031 ) (922 ) (1,472 ) —
(6,829 )
Recoveries of loans previously charged off 699
244
156
190
78
1,680
—
3,047
Balance, September 30, 2017 $ 3,530
$ 3,294
$ 7,945
$ 4,936
$ 1,522
$ 3,262
$ 1,477
$ 25,966

Period-end allocation:

Loans individually evaluated for impairment ⁽¹⁾
$ 509
$ 81
$ 1,380
$ 1,058
$ —
$ 3,262
$ 105
$ 6,395
Loans collectively evaluated for impairment 3,021
3,213
6,565
3,878
1,522
—
1,372
19,571
Ending balance $ 3,530
$ 3,294
$ 7,945
$ 4,936
$ 1,522
$ 3,262
$ 1,477
$ 25,966

Loans:

Individually evaluated for impairment⁽¹⁾
$ 3,204
$ 627
$ 10,512
$ 8,636
$ —
$ 32,032
$ 915
$ 55,926
Collectively evaluated for impairment 1,304,005
549,562
1,548,370
960,653
189,109
763,271
464,303
5,779,273
Acquired with deteriorated credit quality —
—
—
—
—
121,823
—
121,823
Ending balance $ 1,307,209
$ 550,189
$ 1,558,882
$ 969,289
$ 189,109
$ 917,126
$ 465,218
$ 5,957,022

(1) At September 30, 2017, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

(dollars in thousands) Commercial,
Financial and
Agricultural Real Estate –
Construction and
Development Real Estate –
Commercial and
Farmland Real Estate –
Residential Consumer
Installment
Loans and
Other Purchased
Loans Purchased
Loan
Pools Total
Twelve Months Ended
December 31, 2016

Balance, January 1, 2016 $ 1,144
$ 5,009
$ 7,994
$ 4,760
$ 1,574
$ —
$ 581
$ 21,062
Provision for loan losses 2,647
(1,921 ) 107
2,757
(523 ) (232 ) 1,256
4,091
Loans charged off (1,999 ) (588 ) (708 ) (1,122 ) (351 ) (1,559 ) —
(6,327 )
Recoveries of loans previously charged off 400
490
269
391
127
3,417
—
5,094
Balance, December 31, 2016 $ 2,192
$ 2,990
$ 7,662
$ 6,786
$ 827
$ 1,626
$ 1,837
$ 23,920

Period-end allocation:

Loans individually evaluated for impairment⁽¹⁾
$ 120
$ 266
$ 1,502
$ 2,893
$ —
$ 1,626
$ —
$ 6,407
Loans collectively evaluated for impairment 2,072
2,724
6,160
3,893
827
—
1,837
17,513
Ending balance $ 2,192
$ 2,990
$ 7,662
$ 6,786
$ 827
$ 1,626
$ 1,837
$ 23,920

Loans:

Individually evaluated for impairment ⁽¹⁾
$ 501
$ 659
$ 12,423
$ 12,697
$ —
$ 34,141
$ —
$ 60,421
Collectively evaluated for impairment 966,637
362,386
1,393,796
768,321
109,401
886,516
568,314
5,055,371
Acquired with deteriorated credit quality —
—
�� —
—
—
148,534
—
148,534
Ending balance $ 967,138
$ 363,045
$ 1,406,219
$ 781,018
$ 109,401
$ 1,069,191
$ 568,314
$ 5,264,326

(1) At December 31, 2016, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

(dollars in thousands) Commercial,
Financial and
Agricultural Real Estate –
Construction and
Development Real Estate –
Commercial and
Farmland Real Estate –
Residential Consumer
Installment
Loans and
Other Purchased
Loans Purchased
Loan
Pools Total
Three Months Ended
September 30, 2016

Balance, June 30, 2016 $ 1,667
$ 3,599
$ 7,459
$ 4,263
$ 2,160
$ 1,387
$ 1,199
$ 21,734
Provision for loan losses 677
(521 ) (554 ) 2,649
(1,595 ) (654 ) 809
811
Loans charged off (326 ) (60 ) —
(292 ) (74 ) (699 ) —
(1,451 )
Recoveries of loans previously charged off 119
131
13
40
78
1,488
—
1,869
Balance, September 30, 2016 $ 2,137
$ 3,149
$ 6,918
$ 6,660
$ 569
$ 1,522
$ 2,008
$ 22,963

Nine Months Ended
September 30, 2016:

Balance, December 31, 2015 $ 1,144
$ 5,009
$ 7,994
$ 4,760
$ 1,574
$ —
$ 581
$ 21,062
Provision for loan losses 1,987
(2,010 ) (559 ) 2,415
(932 ) 53
1,427
2,381
Loans charged off (1,273 ) (324 ) (708 ) (883 ) (192 ) (1,261 ) —
(4,641 )
Recoveries of loans previously charged off 279
474
191
368
119
2,730
—
4,161
Balance, September 30, 2016 $ 2,137
$ 3,149
$ 6,918
$ 6,660
$ 569
$ 1,522
$ 2,008
$ 22,963

Period-end allocation:

Loans individually evaluated for impairment⁽¹⁾
$ 107
$ 529
$ 883
$ 2,629
$ —
$ 1,522
$ —
$ 5,670
Loans collectively evaluated for impairment 2,030
2,620
6,035
4,031
569
—
2,008
17,293
Ending balance $ 2,137
$ 3,149
$ 6,918
$ 6,660
$ 569
$ 1,522
$ 2,008
$ 22,963

Loans:

Individually evaluated for impairment ⁽¹⁾
$ 424
$ 1,154
$ 11,699
$ 11,571
$ —
$ 34,991
$ —
$ 59,839
Collectively evaluated for impairment 625,523
327,154
1,285,883
755,362
72,269
939,243
624,886
4,630,320
Acquired with deteriorated credit quality —
—
—
—
—
155,147
—
155,147
Ending balance $ 625,947
$ 328,308
$ 1,297,582
$ 766,933
$ 72,269
$ 1,129,381
$ 624,886
$ 4,845,306

(1) At September 30, 2016, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

~~NOTE 5 – ASSETS ACQUIRED IN FDIC-ASSISTED ACQUISITIONS~~

From October 2009 through July 2012, the Company participated in ten FDIC-assisted acquisitions whereby the Company purchased certain failed institutions out of the FDIC’s receivership. These institutions include the following:



~~Bank Acquired~~	~~Location~~	~~Branches~~	~~Date Acquired~~
~~American United Bank (“AUB”)~~	~~Lawrenceville, Ga.~~	1	~~October 23, 2009~~
~~United Security Bank (“USB”)~~	~~Sparta, Ga.~~	2	~~November 6, 2009~~
~~Satilla Community Bank (“SCB”)~~	~~St. Marys, Ga.~~	1	~~May 14, 2010~~
~~First Bank of Jacksonville (“FBJ”)~~	~~Jacksonville, Fl.~~	2	~~October 22, 2010~~
~~Tifton Banking Company (“TBC”)~~	~~Tifton, Ga.~~	1	~~November 12, 2010~~
~~Darby Bank & Trust (“DBT”)~~	~~Vidalia, Ga.~~	7	~~November 12, 2010~~
~~High Trust Bank (“HTB”)~~	~~Stockbridge, Ga.~~	2	~~July 15, 2011~~
~~One Georgia Bank (“OGB”)~~	~~Midtown Atlanta, Ga.~~	1	~~July 15, 2011~~
~~Central Bank of Georgia (“CBG”)~~	~~Ellaville, Ga.~~	5	~~February 24, 2012~~
~~Montgomery Bank & Trust (“MBT”)~~	~~Ailey, Ga.~~	2	~~July 6, 2012~~

The determination of the initial fair values of loans at the acquisition date and the initial fair values of the related FDIC indemnification assets involves a high degree of judgment and complexity. The carrying values of the acquired loans and the FDIC indemnification assets reflect management’s best estimate of the fair value of each of these assets as of the date of acquisition.

However, the amount that the Company realizes on these assets could differ materially from the carrying values reflected in the financial statements included in this report, based upon the timing and amount of collections on the acquired loans in future periods. Because of the loss-sharing agreements with the FDIC on these assets, the Company does not expect to incur any significant losses. To the extent the actual values realized for the acquired loans are different from the estimates, the indemnification assets will generally be affected in an offsetting manner due to the loss-sharing support from the FDIC.

~~FASB ASC 310-30,~~ ~~Loans and Debt Securities Acquired with Deteriorated Credit Quality~~ (“ASC 310-30”), applies to a loan with evidence of deterioration of credit quality since origination, acquired by completion of a transfer for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. ASC 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition for loans which fall under the scope of this statement. At the acquisition dates, a majority of these loans were valued based on the liquidation value of the underlying collateral because the future cash flows are primarily based on the liquidation of underlying collateral. There was no allowance for credit losses established related to these ASC 310-30 loans at the acquisition dates, based on the provisions of this statement. Over the life of the acquired loans, the Company continues to estimate cash flows expected to be collected. If the expected cash flows expected to be collected increases, then the Company adjusts the amount of accretable discount recognized on a prospective basis over the loan’s remaining life. If the expected cash flows expected to be collected decreases, then the Company records a provision for loan loss in its consolidated statements of income and comprehensive income.

Each acquisition with loss-sharing agreements has separate agreements for the single family residential assets (“SFR”) and the non-single family assets (“NSF”). The SFR agreements cover losses and recoveries for ten years. The NSF agreements are for eight years. During the first five years, losses and recoveries are covered. During the final three years, only recoveries, net of expenses, are covered. The AUB SFR agreement was terminated during 2012 and Ameris received a payment of $87,000. The AUB and USB NSF agreements passed their five-year anniversaries during the fourth quarter of 2014, the SCB NSF agreement passed its five-year anniversary during the second quarter of 2015, the FBJ, TBC and DBT NSF agreements passed their five-year anniversaries during the fourth quarter of 2015, the HTB and OGB NSF agreements passed their five-year anniversaries during the third quarter of 2016, and the CBG NSF passed its five-year anniversary during the first quarter of 2017. Losses will no longer be reimbursed on these agreements. MBT did not have a loss-sharing agreement.

At September 30, 2017, the Company’s FDIC loss-sharing payable totaled $8.2 million, which is comprised of an accrued clawback liability of $9.6 million, less $419,000 in current activity incurred but not yet received from the FDIC (net charge-offs offset by reimbursable expenses) and remaining indemnification of $1.0 million (for reimbursements associated with anticipated losses in future quarters).

~~The following table summarizes components of all covered assets at September 30, 2017 and December 31, 2016 and their origin:~~

(dollars in thousands)
Covered
Loans

Less: Fair
Value
Adjustments

Total
Covered
Loans
OREO
Less: Fair
Value
Adjustments

Total
Covered
OREO

Total
Covered
Assets

FDIC Loss-
Share
Receivable
(Payable)
September 30, 2017

AUB $ —
$ —
$ —
$ —
$ —
$ —
$ —
$ —
USB 2,763
12
2,751
—
—
—
2,751
(1,752 )
SCB 2,541
27
2,514
—
—
—
2,514
(169 )
FBJ 3,647
394
3,253
—
—
—
3,253
(312 )
DBT 9,663
356
9,307
81
—
81
9,388
(4,442 )
TBC 1,667
—
1,667
—
—
—
1,667
(8 )
HTB 1,856
28
1,828
—
—
—
1,828
27
OGB 930
31
899
—
—
—
899
(1,032 )
CBG 10,329
678
9,651
161
—
161
9,812
(502 )
Total $ 33,396
$ 1,526
$ 31,870
$ 242
$ —
$ 242
$ 32,112
$ (8,190 )

December 31, 2016

AUB $ —
$ —
$ —
$ —
$ —
$ —
$ —
$ (27 )
USB 3,199
13
3,186
51
—
51
3,237
(1,642 )
SCB 4,019
51
3,968
—
—
—
3,968
(32 )
FBJ 3,767
452
3,315
—
—
—
3,315
(234 )
DBT 12,166
565
11,601
—
—
—
11,601
(4,591 )
TBC 1,679
—
1,679
—
—
—
1,679
(33 )
HTB 1,913
33
1,880
—
—
—
1,880
734
OGB 1,077
32
1,045
—
—
—
1,045
(993 )
CBG 33,449
1,963
31,486
1,161
4
1,157
32,643
505
Total $ 61,269
$ 3,109
$ 58,160
$ 1,212
$ 4
$ 1,208
$ 59,368
$ (6,313 )

The shared-loss agreements are subject to the servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the shared-loss agreements were recorded as an indemnification asset at their estimated fair values on the acquisition dates. As of September 30, 2017 and December 31, 2016, the Company has recorded a clawback liability of $9.6 million and $9.3 million, respectively, which represents the obligation of the Company to reimburse the FDIC should actual losses be less than certain thresholds established in each loss-share agreement.

~~Changes in the FDIC shared-loss payable for the nine months ended September 30, 2017 and 2016 are as follows:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Beginning balance, January 1 $ (6,313 ) $ 6,301
Payments to (received from) FDIC 97
(4,770 )
Amortization (747 ) (3,351 )
Changes in clawback liability (326 ) (682 )
Increase in receivable due to:

Net recoveries on covered loans (1,097 ) (4,118 )
Loss (gain) on covered other real estate owned (76 ) 203
Reimbursable expenses on covered assets 401
604
Other activity, net (129 ) (1,962 )
Ending balance $ (8,190 ) $ (7,775 )

~~The FDIC loss-sharing payable is included in other liabilities in the consolidated balance sheets. The FDIC loss-sharing receivable is included in other assets in the consolidated balance sheets.~~

~~NOTE 6 – OTHER REAL ESTATE OWNED~~

~~The following is a summary of the activity in other real estate owned during the nine months ended September 30, 2017 and 2016:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Beginning balance, January 1 $ 10,874
$ 16,147
Loans transferred to other real estate owned 4,043
2,101
Net gains (losses) on sale and write-downs recorded in statement of income (766 ) (1,276 )
Sales proceeds (4,760 ) (6,580 )
Ending balance $ 9,391
$ 10,392

~~The following is a summary of the activity in purchased other real estate owned during the nine months ended September 30, 2017 and 2016:~~

(dollars in thousands) September 30,
2017 September 30,
2016
Beginning balance, January 1 $ 12,540
$ 19,344
Loans transferred to other real estate owned 4,294
6,262
Acquired in acquisitions —
1,838
Portion of gains (losses) on sale and write-downs payable to (receivable from) the FDIC under loss-sharing agreements 76
—
Net gains (losses) on sale and write-downs recorded in statement of income 265
(568 )
Sales proceeds (7,229 ) (11,750 )
Ending balance $ 9,946
$ 15,126

NOTE 74 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The Company classifies the sales of securities under agreements to repurchase as short-term borrowings. The amounts received under these agreements are reflected as a liability in the Company’s consolidated balance sheets and the securities underlying these agreements are included in investment securities in the Company’s consolidated balance sheets. At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, all securities sold under agreements to repurchase mature on a daily basis. The market value of the securities fluctuate on a daily basis due to market conditions. The Company monitors the market value of the securities underlying these agreements on a daily basis and is required to transfer additional securities if the market value of the securities fall below the repurchase agreement price. The Company maintains an unpledged securities portfolio that it believes is sufficient to protect against a decline in the market value of the securities sold under agreements to repurchase.

The following is a summary of the Company’s securities sold under agreements to repurchase at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~

2020:


(dollars in thousands)	September 30, 2017		December 31, 2016		(dollars in thousands)	March 31, 2021		December 31, 2020
Securities sold under agreements to repurchase	$	14,156	$	53,505	Securities sold under agreements to repurchase	$	9,320	$	11,641

At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020 the investment securities underlying these agreements were comprised of state, county and municipal securities and mortgage-backed securities.

NOTE 85 – OTHER BORROWINGS

The Company has, from time to time, utilized certain borrowing arrangements to fund growth in earning assets or provide additional liquidity when appropriate spreads can be realized. At September 30, 2017 and December 31, 2016, there were $808.6 million and $492.3 million, respectively, in outstanding other borrowings.

Other borrowings consist of the following:


(dollars in thousands)	March 31, 2021		December 31, 2020
FHLB borrowings:
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 4.55%	1,408		1,411
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	975		977
Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	1,531		1,567

Subordinated notes payable:
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $780 and $812, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%	74,220		74,188
Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $2,105 and $2,165, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%	117,895		117,835
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $1,119 and $1,150, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month LIBOR plus 3.63%	76,119		76,150
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,917 and $1,973, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%	108,083		108,027
	$	425,231	$	425,155

(dollars in thousands) September 30,
2017 December 31,
2016
FHLB borrowings:

Daily Rate Credit from FHLB with a variable interest rate (1.32% at September 30, 2017 and 0.80% at December 31, 2016) $ 168,000
$ 150,000
Advance from FHLB due October 6, 2017; fixed interest rate of 1.16% 565,000
—
Advance from FHLB due January 6, 2017; fixed interest rate of 0.56% —
292,500
Advance from FHLB due January 9, 2017; fixed interest rate of 1.40% —
4,002
Advance from FHLB due May 30, 2017; fixed interest rate of 1.23% —
5,006
Subordinated notes payable:

Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $1,238; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616% 73,762
—
Other debt:

Advance from correspondent bank due October 5, 2019; secured by a loan receivable; fixed interest rate of 4.25% 56
77
Advance from correspondent bank due September 5, 2026; secured by a loan receivable; fixed interest rate of 2.09% 1,754
1,886
Advances under revolving credit agreement with a regional bank due September 26, 2020; secured by subsidiary bank stock; variable interest rate at 90-day LIBOR plus 3.50% (4.43% at December 31, 2016) —
38,000
Advances under revolving credit agreement with a regional bank due January 7, 2017; fixed interest rate of 8.00% —
850
Total $ 808,572
$ 492,321

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, 2017, $347.4 million~~March 31, 2021, $3.55 billion was available for borrowing on lines with the FHLB.

~~At September 30, 2017, $30.0 million was available for borrowing under the revolving credit agreement with a regional bank, secured by subsidiary bank stock.~~

As of ~~September 30, 2017,~~March 31, 2021, the ~~Company~~Bank maintained credit arrangements with various financial institutions to purchase federal funds up to ~~$82.0~~$127.0 million.

The ~~Company~~Bank also participates in the Federal Reserve discount window borrowings program. At ~~September 30, 2017,~~March 31, 2021, the Company had ~~$1.04~~$3.04 billion of loans pledged at the Federal Reserve discount window and had ~~$678.1 million~~$2.05 billion available for borrowing.

~~Subordinated Notes Payable~~

~~On March 13, 2017,~~NOTE 6 – ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income for the Company ~~completed the public offering~~consists of changes in net unrealized gains and sale of $75.0 million in aggregate principal amount of its 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 (the “subordinated notes”). The subordinated notes were sold to the public at par pursuant to an underwriting agreement and were issued pursuant to an indenture and a supplemental indenture. The subordinated notes will maturelosses on ~~March 15, 2027 and through March 14, 2022 will bear a fixed rate of interest of 5.75% per annum, payable semi-annually in arrears on September 15 and March 15 of each year. Beginning~~ March 15, 2022, the interest rate on the subordinated notes resets quarterly to a floating rate per annum equal to the then-current three-month LIBOR plus 3.616%, payable quarterly in arrears on June 15, September 15, December 15, and March 15 of each year to the maturity date or earlier redemption.

On any scheduled interest payment date beginning March 15, 2022, the Company may, at its option, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.

The subordinated notes are unsecured and rank equally with all other unsecured subordinated indebtedness of the Company, including any subordinated indebtedness issued in the future under the indenture governing the subordinated notes. The subordinated notes are subordinated in right of payment to all senior indebtedness of the Company. The subordinated notes are obligations of the Company only and are not guaranteed by any subsidiaries, including the Bank. Additionally, the subordinated notes are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries, meaning that creditors of the Company’s subsidiaries (including, in the case of the Bank, its depositors) generally will be paid from those subsidiaries’ assets before holders of the subordinated notes have any claim to those assets.

~~For regulatory capital adequacy purposes, the subordinated notes qualify as Tier 2 capital~~investment securities available for the Company. If in the future the subordinated notes no longer qualify as Tier 2 capital, the subordinated notes may be redeemed by the Company at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest, subject to prior approval by the Board of Governors of the Federal Reserve System.

~~NOTE 9 – 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 risksale and interest rate ~~risk~~swap derivatives. The reclassification for gains included in ~~excess of the amount recognized~~net income is recorded in net gain (loss) on securities in the ~~Company’s balance sheets.~~

consolidated statement of income and comprehensive income. 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.

Afollowing tables present a summary of the ~~Company’s commitments is~~accumulated other comprehensive income balances, net of tax, as ~~follows:~~of March 31, 2021 and 2020:


(dollars in thousands)	Unrealized Gain (Loss) on Derivatives		Unrealized Gain (Loss) on Securities		Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2021	$	0	$	33,505	$	33,505


Reclassification for gains included in net income, net of tax	0		0		0
Current year changes, net of tax	0		(7,415)		(7,415)
Balance, March 31, 2021	$	0	$	26,090	$	26,090

(dollars in thousands) September 30,
2017 December 31,
2016
Commitments to extend credit $ 1,096,702
$ 1,101,257
Unused home equity lines of credit 63,951
62,586
Financial standby letters of credit 13,192
14,257
Mortgage interest rate lock commitments 113,056
91,426
Mortgage forward contracts with positive fair value —
150,000


(dollars in thousands)	Unrealized Gain (Loss) on Derivatives		Unrealized Gain (Loss) on Securities		Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2020	$	(147)	$	18,142	$	17,995


Reclassification for gains included in net income, net of tax	0		0		0
Current year changes, net of tax	(97)		21,653		21,556
Balance, March 31, 2020	$	(244)	$	39,795	$	39,551

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 of one year or less 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.

~~Other Commitments~~

~~As of September 30, 2017, a $75.0 million letter of credit issued by the FHLB was used to guarantee the Bank’s performance related to public fund deposit balances.~~

~~Contingencies~~

Certain conditions may exist as of the date the financial statements are issued, 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. The Company’s management and its legal counsel assess such contingent liabilities, 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’s legal counsel 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.~~

A former borrower of the Company has filed a claim related to a loan previously made by the Company asserting lender liability. The case was tried without a jury and a judgment was issued by the court against the Company awarding the borrower approximately $2.9 million on August 8, 2013. The judgment was appealed to the South Carolina Court of Appeals. On May 24, 2017, the Court of Appeals filed its decision and unanimously found in favor of the Company and reversed the trial court judgment. The plaintiff has a filed a petition for rehearing with the Court of Appeals, which has been denied. The plaintiff has filed a writ of certiorari asking the Supreme Court of South Carolina to hear the case. The Company believes the likelihood the Supreme Court will hear the case is not probable, and, accordingly the Company does not expect to incur any loss as a result of this case. Accordingly, the Company has not established any reserves related to this legal matter. In the event that the Company's assumptions used to evaluate this matter as neither probable nor estimable change in future periods, it may be required to record a liability for an adverse outcome.

~~NOTE 10 – SHAREHOLDERS’ EQUITY~~

On January 18, 2017, the Company issued 128,572 unregistered shares of its common stock to William J. Villari in exchange for 4.99% of the outstanding shares of common stock of USPF. A registration statement was filed with the Securities and Exchange Commission on February 13, 2017 to register the resale or other disposition of these shares. The issuance of the 128,572 common shares was valued at $45.45 per share, resulting in an increase in shareholders’ equity of $5.8 million. For additional information regarding the investment in USPF, see Note 2.

On March 6, 2017, the Company completed an underwritten public offering of 2,012,500 shares of the Company’s common stock at a price to the public of $46.50 per share. The Company received net proceeds from the issuance of approximately $88.7 million, after deducting $4.9 million in underwriting discounts and commissions and other issuance costs.

In March 2017, the Company made a capital contribution to the Bank in the amount of $110.0 million, using the net proceeds of the March 6, 2017 issuance of common stock as well as a portion of the net proceeds of the March 13, 2017 issuance of the Company’s 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 discussed in Note 8.

NOTE ~~11 – ACCUMULATED OTHER COMPREHENSIVE INCOME~~

Accumulated other comprehensive income for the Company consists of changes in net unrealized gains and losses on investment securities available for sale and an interest rate swap derivative designated as a cash flow hedge. The following tables present a summary of the accumulated other comprehensive income balances, net of tax, as of September 30, 2017 and 2016:

(dollars in thousands)
Unrealized
Gain (Loss)
on Derivatives

Unrealized
Gain (Loss)
on Securities

Accumulated
Other Comprehensive
Income (Loss)
Balance, January 1, 2017 $ 176
$ (1,234 ) $ (1,058 )
Reclassification for gains included in net income, net of tax —
(24 ) (24 )
Current year changes, net of tax (38 ) 4,361
4,323
Balance, September 30, 2017 $ 138
$ 3,103
$ 3,241

(dollars in thousands)

Unrealized
Gain (Loss)
on Derivatives

Unrealized
Gain (Loss)
on Securities

Accumulated
Other Comprehensive
Income (Loss)
Balance, January 1, 2016 $ 152
$ 3,201
$ 3,353
Reclassification for gains included in net income, net of tax —
(61 ) (61 )
Current year changes, net of tax (567 ) 7,724
7,157
Balance, September 30, 2016 $ (415 ) $ 10,864
$ 10,449

~~NOTE 12~~7 – 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,			Three Months Ended March 31,
(share data in thousands)	2017	2016	2017	2016	(share data in thousands)	2021	2020
Average common shares outstanding	37,225	34,870	36,690	34,156	Average common shares outstanding	69,392	69,248
Common share equivalents:					Common share equivalents:
Stock options	70	108	70	100	Stock options	81	93
Nonvested restricted share grants	258	217	257	214	Nonvested restricted share grants	172	161
Performance stock units					Performance stock units	96	0
Average common shares outstanding, assuming dilution	37,553	35,195	37,017	34,470	Average common shares outstanding, assuming dilution	69,741	69,502

For the ~~three and nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, there were ~~no potential~~0 outstanding options exerciseable for common shares with strike prices that would cause ~~them~~the underlying shares to be anti-dilutive.

NOTE 8 – 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)	March 31, 2021		December 31, 2020
Mortgage loans held for sale	$	1,505,121	$	998,050
SBA loans held for sale	4,407		3,757
Total loans held for sale	$	1,509,528	$	1,001,807

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.

A net loss of $25.1 million and a net gain of $15.1 million resulting from fair value changes of these mortgage loans were recorded in income during the three months ended March 31, 2021 and 2020, respectively. A net gain of $27.5 million and net loss of $2.6 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 months ended March 31, 2021 and 2020, respectively. The change in fair value of both mortgage loans held for sale and the related derivative financial instruments are recorded in mortgage banking activity in the consolidated statements of income and comprehensive 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 March 31, 2021 and December 31, 2020:


(dollars in thousands)	March 31, 2021		December 31, 2020
Aggregate fair value of mortgage loans held for sale	$	1,505,121	$	998,050
Aggregate unpaid principal balance of mortgage loans held for sale	1,479,606		947,460
Past-due loans of 90 days or more	0		0
Nonaccrual loans	0		0
Unpaid principal balance of nonaccrual loans	0		0

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 March 31, 2021 and December 31, 2020:


(dollars in thousands)	March 31, 2021		December 31, 2020
Aggregate fair value of SBA loans held for sale	$	4,407	$	3,757
Aggregate unpaid principal balance of SBA loans held for sale	3,849		3,393
Past-due loans of 90 days or more	0		0
Nonaccrual loans	0		0

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 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 March 31, 2021 and December 31, 2020:


	Recurring Basis Fair Value Measurements
	March 31, 2021
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
U.S. government sponsored agencies	$	12,394	$	0	$	12,394	$	0
State, county and municipal securities	62,985		0		62,985		0
Corporate debt securities	46,747		0		45,577		1,170
SBA pool securities	55,691		0		55,691		0
Mortgage-backed securities	681,835		0		681,835		0
Loans held for sale	1,509,528		0		1,509,528		0

Mortgage banking derivative instruments	62,870		0		62,870		0
Total recurring assets at fair value	$	2,432,050	$	0	$	2,430,880	$	1,170


	Recurring Basis Fair Value Measurements
	December 31, 2020
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
U.S. government sponsored agencies	$	17,504	$	0	$	17,504	$	0
State, county and municipal securities	66,778		0		66,778		0
Corporate debt securities	51,896		0		50,726		1,170
SBA pool securities	62,497		0		62,497		0
Mortgage-backed securities	784,204		0		784,204		0
Loans held for sale	1,001,807		0		1,001,807		0

Mortgage banking derivative instruments	51,756		0		51,756		0
Total recurring assets at fair value	$	2,036,442	$	0	$	2,035,272	$	1,170
Financial liabilities:

Mortgage banking derivative instruments	$	16,415	$	0	$	16,415	$	0
Total recurring liabilities at fair value	$	16,415	$	0	$	16,415	$	0

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 March 31, 2021 and December 31, 2020:


	Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
March 31, 2021
Collateral-dependent loans	$	93,058	$	0	$	0	$	93,058
Other real estate owned	299		0		0		299
Mortgage servicing rights	154,746		0		0		154,746

Total nonrecurring assets at fair value	$	248,103	$	0	$	0	$	248,103

December 31, 2020
Collateral-dependent loans	$	98,426	$	0	$	0	$	98,426
Other real estate owned	4,964		0		0		4,964
Mortgage servicing rights	130,630		0		0		130,630
SBA servicing rights	5,839		0		5,839		0
Total nonrecurring assets at fair value	$	239,859	$	0	$	5,839	$	234,020

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 three months ended March 31, 2021 and the year ended December 31, 2020, there was not a change 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
March 31, 2021
Recurring:
Investment securities available for sale	$	1,170	Discounted par values	Probability of default	17.1%	17.1%
				Loss given default	39%	39%
Nonrecurring:
Collateral-dependent loans	$	93,058	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	20% - 57%	44%
Other real estate owned	$	299	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 36%	27%
Mortgage servicing rights	$	154,746	Discounted cash flows	Discount rate	9% - 10%	9%
				Prepayment speed	11% - 38%	13%

December 31, 2020
Recurring:
Investment securities available for sale	$	1,170	Discounted par values	Probability of default	18.8%	18.8%
				Loss given default	40%	40%
Nonrecurring:
Collateral-dependent loans	$	98,426	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	20% - 90%	44%
Other real estate owned	$	4,964	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 59%	28%
Mortgage servicing rights	$	130,630	Discounted cash flows	Discount rate	9% - 12%	10%
				Prepayment speed	14% - 37%	19%

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
			March 31, 2021
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	224,159	$	224,159	$	0	$	0	$	224,159
Federal funds sold and interest-bearing accounts	2,534,969		2,534,969		0		0		2,534,969
Time deposits in other banks	249		0		249		0		249

Loans, net	14,328,177		0		0		14,339,254		14,339,254
Accrued interest receivable	70,697		0		3,469		67,228		70,697
Financial liabilities:
Deposits	17,875,873		0		17,870,613		0		17,870,613
Securities sold under agreements to repurchase	9,320		9,320		0		0		9,320
Other borrowings	425,231		0		429,650		0		429,650
Subordinated deferrable interest debentures	124,833		0		117,285		0		117,285
Accrued interest payable	7,126		0		7,126		0		7,126


			Fair Value Measurements
			December 31, 2020
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	203,349	$	203,349	$	0	$	0	$	203,349
Federal funds sold and interest-bearing accounts	1,913,957		1,913,957		0		0		1,913,957
Time deposits in other banks	249		0		249		0		249
Loans, net	14,183,077		0		0		14,096,711		14,096,711
Accrued interest receivable	76,254		0		3,567		72,687		76,254
Financial liabilities:
Deposits	16,957,823		0		16,968,606		0		16,968,606
Securities sold under agreements to repurchase	11,641		11,641		0		0		11,641
Other borrowings	425,155		0		431,783		0		431,783
Subordinated deferrable interest debentures	124,345		0		116,280		0		116,280
Accrued interest payable	5,487		0		5,487		0		5,487

NOTE 139 – ~~FAIR VALUE MEASURES~~COMMITMENTS AND CONTINGENCIES

~~The Company’s loans held for sale are carried at fair value and are comprised of the following:~~

(dollars in thousands) September 30,
2017 December 31,
2016
Mortgage loans held for sale $ 132,201
$ 105,924
SBA loans held for sale 5,191
—
Total loans held for sale $ 137,392
$ 105,924

The Company ~~has elected~~is a party 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~~financial instruments 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 basisoff-balance-sheet risk in the ~~consolidated statements~~normal course of ~~income and comprehensive income under~~business to meet 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 $5.7 million and $4.9 million resulting from fair value changes of these mortgage loans were recorded in income during the nine months ended September 30, 2017 and 2016, respectively. The amount does not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in mortgage banking activity in the consolidated statements of income and comprehensive 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, 2017 and December 31, 2016:~~

(dollars in thousands)
September 30,
2017 December 31,
2016
Aggregate fair value of mortgage loans held for sale $ 132,201
$ 105,924
Aggregate unpaid principal balance 126,503
103,691
Past-due loans of 90 days or more —
—
Nonaccrual loans —
—

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, mortgage loans held for sale and derivatives 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 impaired loans and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

~~Fair Value Hierarchy~~

The Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

~~Level 1~~– ~~Quoted prices in active markets for identical assets or liabilities.~~

~~Level 2~~– Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

~~Level 3~~– ~~Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.~~

~~The following methods and assumptions were used by the Company in estimating the fair value~~financing needs of its ~~assets and liabilities recorded at fair value and for estimating the fair value of its~~customers. These financial ~~instruments:~~

~~Cash, Due From Banks, Federal Funds Sold and Interest-Bearing Accounts:~~ ~~The carrying amount of cash, due from banks, federal funds sold and interest-bearing deposits in banks approximates fair value.~~

~~Investment Securities Available for Sale:~~ The fair value of securities available for sale is determined by various valuation methodologies. Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 securitiesinstruments include certain U.S. agency bonds, mortgage-backed securities, collateralized mortgage and debt obligations, and municipal securities. The Level 2 fair value pricing is provided by an independent third party and is based upon similar securities in an active market. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and include certain residual municipal securities and other less liquid securities.

~~Other Investments:~~ FHLB stock, Federal Reserve Bank stock and the Company’s minority equity investment in USPF are included in other investment securities at original cost basis. These investments do not have readily determinable fair values and are carried at original cost basis. It is not practical to determine the fair value of these investments due to restrictions placed on transferability. These investments are periodically evaluated for impairment based on ultimate recovery of par value or cost basis. Cost basis approximates fair value for these investments.

~~Loans Held for Sale:~~ The Company records loans held for sale at fair value. The fair value of loans held for sale is determined on outstanding commitments from third party investors in the secondary markets and is classified within Level 2 of the valuation hierarchy.

~~Loans:~~ The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair value of fixed-rate loans is estimated based on discounted contractual cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. The fair value of impaired loans is estimated based on discounted contractual cash flows or underlying collateral values, where applicable. A loan is determined to be impaired if the Company believes it is probable that all principal and interest amounts due according to the terms of the note will not be collected as scheduled. The fair value of impaired loans is determined in accordance with ASC 310-10, ~~Accounting by Creditors for Impairment of a Loan~~, and generally results in a specific reserve established through a charge to the provision for loan losses. Losses on impaired loans are charged to the allowance when management believes the uncollectability of a loan is confirmed. Management has determined that the majority of impaired loans are Level 3 assets due to the extensive use of market appraisals.

~~Other Real Estate Owned:~~ The fair value of other real estate owned (“OREO”) is determined using certified appraisals and internal evaluations that value the property at its highest and best uses by applying traditional valuation methods common to the industry. The Company does not hold any OREO for profit purposes and all other real estate is actively marketed for sale. In most

cases, management has determined that additional write-downs are required beyond what is calculable from the appraisal to carry the property at levels that would attract buyers. Because this additional write-down is not based on observable inputs, management has determined that other real estate owned should be classified as Level 3.

~~Intangible Assets:~~ Intangible assets consist of core deposit premiums acquired in connection with business combinations and are based on the established value of acquired customer deposits. The core deposit premium is initially recognized based on a valuation performed as of the consummation date and is amortized over an estimated useful life of seven to ten years.

~~FDIC Loss-Share Receivable/Payable:~~ Because the FDIC will reimburse the Company for certain acquired loans should the Company experience a loss, an indemnification asset is recorded at fair value at the acquisition date. The indemnification asset is recognized at the same time as the indemnified loans, and measured on the same basis, subject to collectability or contractual limitations. The shared loss agreements on the acquisition date reflect the reimbursements expected to be received from the FDIC, using an appropriate discount rate, which reflects counterparty credit risk and other uncertainties. The shared loss agreements continue to be measured on the same basis as the related indemnified loans, and the loss-share receivable/payable is impacted by changes in estimated cash flows associated with these loans.

~~Accrued Interest Receivable/Payable:~~ ~~The carrying amount of accrued interest receivable and accrued interest payable approximates fair value.~~

~~Cash Value of Bank Owned Life Insurance:~~ ~~The carrying value of cash value of bank owned life insurance approximates fair value.~~

~~Deposits:~~ The carrying amount of demand deposits, savings deposits and variable-rate certificates of deposit approximates fair value. The fair value of fixed-rate certificates of deposit is estimated based on discounted contractual cash flows using interest rates currently being offered for certificates of similar maturities.

~~Securities Sold under Agreements to Repurchase and Other Borrowings:~~ The carrying amount of variable rate borrowings and securities sold under repurchase agreements approximates fair value and are classified as Level 1. The fair value of fixed rate other borrowings is estimated based on discounted contractual cash flows using the current incremental borrowing rates for similar borrowing arrangements and are classified as Level 2.

~~Subordinated Deferrable Interest Debentures:~~ The fair value of the Company’s trust preferred securities is based primarily upon discounted cash flows using rates for securities with similar terms and remaining maturities and are classified as Level 2.

~~Off-Balance-Sheet Instruments:~~ ~~Because~~ 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)	March 31, 2021		December 31, 2020
Commitments to extend credit	$	3,193,867	$	2,826,719
Unused home equity lines of credit	257,967		259,015
Financial standby letters of credit	31,359		33,613
Mortgage interest rate lock commitments	1,033,336		1,199,939

Commitments to extend credit are ~~typically made using~~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 ~~have short maturities,~~may require payment of a fee. Since many of the ~~carrying value~~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.

~~Derivatives:~~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 ~~entered into derivative~~not been required to perform on any material financial ~~instruments to manage interest rate risk. The valuation~~standby letters of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivative, including the period to maturity,credit and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the derivatives is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves derived from observable market interest rate curves).

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has ~~considered~~not incurred any losses on financial standby letters of credit for the ~~impact of netting any applicable credit enhancements such as collateral postings, thresholds, mutual puts and guarantees.~~

Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself or the counterparty. However, as of September 30, 2017 and December 31, 2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the fair value hierarchy.

Recurring Basis
Fair Value Measurements
September 30, 2017
(dollars in thousands)
Fair Value Level 1 Level 2 Level 3
Financial assets:

U.S. government sponsored agencies $ 1,004
$ —
$ 1,004
$ —
State, county and municipal securities 143,387
—
143,387
—
Corporate debt securities 47,249
—
45,749
1,500
Mortgage-backed securities 627,953
—
627,953
—
Loans held for sale 137,392
—
137,392
—
Mortgage banking derivative instruments 3,836
—
3,836
—
Total recurring assets at fair value $ 960,821
$ —
$ 959,321
$ 1,500
Financial liabilities:

Derivative financial instruments $ 723
$ —
$ 723
$ —
Mortgage banking derivative instruments 237
—
237
—
Total recurring liabilities at fair value $ 960
$ —
$ 960
$ —

Recurring Basis
Fair Value Measurements
December 31, 2016
(dollars in thousands) Fair Value Level 1 Level 2 Level 3
Financial assets:

U.S. government sponsored agencies $ 1,020
$ —
$ 1,020
$ —
State, county and municipal securities 152,035
—
152,035
—
Corporate debt securities 32,172
—
30,672
1,500
Mortgage-backed securities 637,508
—
637,508
—
Loans held for sale 105,924
—
105,924
—
Mortgage banking derivative instruments 4,314
—
4,314
—
Total recurring assets at fair value $ 932,973
$ —
$ 931,473
$ 1,500
Financial liabilities:

Derivative financial instruments $ 978
$ —
$ 978
$ —
Total recurring liabilities at fair value $ 978
$ —
$ 978
$ —

Nonrecurring Basis
Fair Value Measurements
(dollars in thousands) Fair Value Level 1 Level 2 Level 3
September 30, 2017

Impaired loans carried at fair value $ 28,790
$ —
$ —
$ 28,790
Other real estate owned 435
—
—
435
Purchased other real estate owned 9,946
—
—
9,946
Total nonrecurring assets at fair value $ 39,171
$ —
$ —
$ 39,171

December 31, 2016

Impaired loans carried at fair value $ 28,253
$ —
$ —
$ 28,253
Other real estate owned 1,172
—
—
1,172
Purchased other real estate owned 12,540
—
—
12,540
Total nonrecurring assets at fair value $ 41,965
$ —
$ —
$ 41,965

The inputs used to determine estimated fair value of impaired loans include market conditions, loan terms, underlying collateral characteristics and discount rates. The inputs used to determine fair value of other real estate owned include market conditions, estimated marketing period or holding period, underlying collateral characteristics and discount rates.

~~For the nine~~three months ended ~~September 30, 2017~~March 31, 2021 and the year ended December 31, ~~2016, there was not a change~~2020.

The Company maintains an allowance for credit losses on unfunded commitments which is recorded in other liabilities on the ~~methods and significant assumptions used to estimate fair value.~~

consolidated balance sheets. The following table ~~shows significant unobservable inputs used~~presents activity in the ~~fair value measurement~~allowance for unfunded commitments for the periods presented:


	Three Months Ended March 31,
(dollars in thousands)	2021		2020
Balance at beginning of period	$	32,854	$	1,077
Adjustment to reflect adoption of ASU 2016-13	0		12,714

Provision for unfunded commitments	(11,839)		4,000
Balance at end of period	$	21,015	$	17,791

Other Commitments

As of ~~Level 3 assets~~March 31, 2021, letters of credit issued by the FHLB totaling $490.0 million were used to guarantee the Bank’s performance related to a portion of its public fund deposit balances.

Litigation and ~~liabilities:~~Regulatory Contingencies

(dollars in thousands) Fair Value
Valuation
Technique
Unobservable Inputs
Range of
Discounts

Weighted
Average
Discount
September 30, 2017

Recurring:

Investment securities available for sale $ 1,500
Discounted par values Credit quality of underlying issuer 0% 0%
Nonrecurring:

Impaired loans $ 28,790
Third-party appraisals and discounted cash flows Collateral discounts and
discount rates 10% - 100% 25%
Other real estate owned $ 435
Third-party appraisals and sales contracts Collateral discounts and estimated
costs to sell 15% - 20% 13%
Purchased other real estate owned $ 9,946
Third-party appraisals Collateral discounts and estimated
costs to sell 10% - 74% 16%

December 31, 2016

Recurring:

Investment securities available for sale $ 1,500
Discounted par values Credit quality of underlying issuer 0% 0%
Nonrecurring:

Impaired loans $ 28,253
Third-party appraisals and discounted cash flows Collateral discounts and
discount rates 15% - 100% 28%
Other real estate owned $ 1,172
Third-party appraisals and sales contracts Collateral discounts and estimated
costs to sell 15% - 74% 22%
Purchased other real estate owned $ 12,540
Third-party appraisals Collateral discounts and estimated
costs to sell 10% - 74% 15%
On November 19, 2019, the Company received a subpoena from the Atlanta Regional Office of the Securities and Exchange Commission (the “SEC”), and the Bank received a grand jury subpoena from the United States Attorney’s Office for the Northern District of Georgia, each requesting that the Company and the Bank produce documents and other materials relating to the Company’s acquisition of US Premium Finance Holding Company, the Bank’s sale of certain loans to CEBV LLC and related disclosures. The Company has cooperated fully with the investigation and produced all requested documents responsive to the subpoenas. While the Company remains unable to make any assurances regarding the outcome of the investigation by the United States Attorney's Office, or the impact, if any, that such investigation may have on the Company's business, consolidated financial condition, results of operations or cash flows, the Company received a letter from the SEC staff, dated March 29, 2021, stating that the SEC has concluded its investigation as to the Company and does not intend to recommend any enforcement action against the Company.

Additionally, 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 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 matters could have a material adverse effect on the Company’s results of operations and financial condition for any particular period.

The ~~carrying~~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, ~~fair value of~~then the estimated liability would be accrued in the Company’s financial ~~instruments,~~statements. If the assessment indicates that a potentially material loss contingency is not ~~shown elsewhere~~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 ~~these~~which case the nature of the guarantee would be disclosed.

COVID-19

The COVID-19 pandemic has caused significant economic dislocation in the United States and an unprecedented slowdown in economic activity, as many state and local governments have intermittently ordered non-essential businesses to close and residents to shelter in place at home. As a result of the pandemic, commercial customers are experiencing varying levels of disruptions or restrictions on their business activity, and consumers are experiencing interrupted income or unemployment. We have outstanding loans to borrowers in certain industries that have been particularly susceptible to the effects of the pandemic, such as hotels, restaurants and other retail businesses. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 pandemic on our business. The United States government has taken steps to attempt

to mitigate some of the more severe anticipated economic effects of the coronavirus, including the passage of the CARES Act and subsequent legislation, but there can be no assurance that such steps will be effective or achieve their desired results in a timely fashion. The extent of such impact from the COVID-19 pandemic and related mitigation efforts will depend on future developments, which are highly uncertain, including, but not limited to, the duration of the pandemic and spread of the coronavirus, including a resurgence or additional waves of the virus, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume, especially as a vaccine becomes widely available. This could cause a material, adverse effect on the Company’s business, financial ~~statements, were as follows:~~condition and results of operations, including increases in loan delinquencies, problem assets and foreclosures; decreases in the value of collateral securing our loans; increases in our allowance for credit losses; and decreases in the value of our intangible assets.

Fair Value Measurements
September 30, 2017
(dollars in thousands)
Carrying
Amount
Level 1 Level 2 Level 3 Total
Financial assets:

Cash and due from banks $ 131,071
$ 131,071
$ —
$ —
$ 131,071
Federal funds sold and interest-bearing accounts 112,844
112,844
—
—
112,844
Loans, net 5,902,267
—
—
5,871,518
5,871,518
Accrued interest receivable 25,068
25,068
—
—
25,068
Financial liabilities:

Deposits $ 5,895,504
$ —
$ 5,896,989
$ —
$ 5,896,989
Securities sold under agreements to repurchase 14,156
14,156
—
—
14,156
Other borrowings 808,572
—
809,810
—
809,810
Subordinated deferrable interest debentures 85,220
—
70,984
—
70,984
FDIC loss-share payable 8,190
—
—
9,077
9,077
Accrued interest payable 2,313
2,313
—
—
2,313

Fair Value Measurements
December 31, 2016
(dollars in thousands)
Carrying
Amount
Level 1 Level 2 Level 3 Total
Financial assets:

Cash and due from banks $ 127,164
$ 127,164
$ —
$ —
$ 127,164
Federal funds sold and interest-bearing accounts 71,221
71,221
—
—
71,221
Loans, net 5,212,153
—
—
5,236,034
5,236,034
Accrued interest receivable 22,278
22,278
—
—
22,278
Financial liabilities:

Deposits $ 5,575,163
$ —
$ 5,575,288
$ —
$ 5,575,288
Securities sold under agreements to repurchase 53,505
53,505
—
—
53,505
Other borrowings 492,321
—
492,321
—
492,321
Subordinated deferrable interest debentures 84,228
—
67,321
—
67,321
FDIC loss-share payable 6,313
—
—
8,243
8,243
Accrued interest payable 1,501
1,501
—
—
1,501

NOTE 1410 – SEGMENT REPORTING

The Company has the following ~~five~~5 reportable segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division, SBA 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 SBA Division derives its revenues from the origination, sales and servicing of SBA 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, SBA 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.

The following tables present selected financial information with respect to the Company’s reportable business segments for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016:~~2020:


	Three Months Ended March 31, 2021
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	112,379	$	30,199	$	10,327	$	18,034	$	7,011	$	177,950
Interest expense	(437)		11,215		421		1,399		375		12,973
Net interest income	112,816		18,984		9,906		16,635		6,636		164,977
Provision for credit losses	(23,904)		(4,553)		(145)		(547)		558		(28,591)
Noninterest income	16,738		97,640		980		2,611		4		117,973
Noninterest expense
Salaries and employee benefits	42,723		49,838		330		1,382		1,712		95,985
Equipment and occupancy expenses	10,120		1,476		1		106		78		11,781
Data processing and telecommunications expenses	10,201		1,546		49		1		87		11,884
Other expenses	19,710		8,189		33		295		921		29,148
Total noninterest expense	82,754		61,049		413		1,784		2,798		148,798
Income before income tax expense	70,704		60,128		10,618		18,009		3,284		162,743
Income tax expense	18,456		12,627		2,230		3,782		686		37,781
Net income	$	52,248	$	47,501	$	8,388	$	14,227	$	2,598	$	124,962

Total assets	$	14,591,933	$	4,086,210	$	886,004	$	1,055,068	$	807,912	$	21,427,127
Goodwill	863,507		0		0		0		64,498		928,005
Other intangible assets, net	53,745		0		0		0		14,103		67,848

Three Months Ended
September 30, 2017
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 59,130
$ 5,862
$ 2,022
$ 1,413
$ 7,895
$ 76,322
Interest expense 5,530
1,597
487
432
1,421
9,467
Net interest income 53,600
4,265
1,535
981
6,474
66,855
Provision for loan losses 1,037
262
215
(1 ) 274
1,787
Noninterest income 13,007
12,257
583
1,130
22
26,999
Noninterest expense

Salaries and employee benefits 20,554
9,792
129
858
1,250
32,583
Equipment and occupancy expenses 5,384
555
1
54
42
6,036
Data processing and telecommunications expenses 6,357
425
28
9
231
7,050
Other expenses 14,905
1,001
51
63
2,078
18,098
Total noninterest expense 47,200
11,773
209
984
3,601
63,767
Income before income tax expense 18,370
4,487
1,694
1,128
2,621
28,300
Income tax expense 4,850
1,475
580
394
843
8,142
Net income $ 13,520
$ 3,012
$ 1,114
$ 734
$ 1,778
$ 20,158

Total assets $ 6,296,159
$ 531,897
$ 236,024
$ 94,531
$ 491,209
$ 7,649,820
Goodwill 125,532
—
—
—
—
125,532
Other intangible assets, net 14,437
—
—
—
—
14,437

Three Months Ended
September 30, 2016
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 55,369
$ 3,679
$ 2,073
$ 1,089
$ —
$ 62,210
Interest expense 3,716
1,054
225
148
—
5,143
Net interest income 51,653
2,625
1,848
941
—
57,067
Provision for loan losses 57
447
94
213
—
811
Noninterest income 13,949
13,198
555
1,162
—
28,864
Noninterest expense

Salaries and employee benefits 18,323
8,940
103
616
—
27,982
Equipment and occupancy expenses 5,490
433
1
65
—
5,989
Data processing and telecommunications expenses 5,794
364
26
1
—
6,185
Other expenses 11,533
1,303
26
181
—
13,043
Total noninterest expense 41,140
11,040
156
863
—
53,199
Income before income tax expense 24,405
4,336
2,153
1,027
—
31,921
Income tax expense 7,733
1,518
754
359
—
10,364
Net income $ 16,672
$ 2,818
$ 1,399
$ 668
$ —
$ 21,557

Total assets $ 5,841,207
$ 356,755
$ 203,334
$ 92,199
$ —
$ 6,493,495
Goodwill 122,545
—
—
—
—
122,545
Other intangible assets, net 18,472
—
—
—
—
18,472


	Three Months Ended March 31, 2020
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	132,301	$	33,411	$	4,850	$	3,728	$	8,478	$	182,768
Interest expense	13,926		15,655		1,548		1,547		2,147		34,823
Net interest income	118,375		17,756		3,302		2,181		6,331		147,945
Provision for credit losses	35,997		1,997		(9)		(903)		3,965		41,047
Noninterest income	17,773		34,369		960		1,277		0		54,379
Noninterest expense
Salaries and employee benefits	41,621		31,097		210		1,476		1,542		75,946
Equipment and occupancy expenses	10,347		1,504		1		97		79		12,028
Data processing and telecommunications expenses	10,797		986		41		13		117		11,954
Other expenses	30,645		5,875		34		515		1,056		38,125
Total noninterest expense	93,410		39,462		286		2,101		2,794		138,053
Income (loss) before income tax expense	6,741		10,666		3,985		2,260		(428)		23,224
Income tax expense (benefit)	275		2,408		837		475		(93)		3,902
Net income (loss)	$	6,466	$	8,258	$	3,148	$	1,785	$	(335)	$	19,322

Total assets	$	13,201,373	$	3,466,766	$	548,837	$	252,668	$	754,904	$	18,224,548
Goodwill	867,449		0		0		0		64,498		931,947
Other intangible assets, net	68,857		0		0		0		17,098		85,955

NOTE 11 – LOAN SERVICING RIGHTS

The ~~following tables present selected financial information~~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 portfolios of residential mortgage, SBA and indirect automobile loans serviced for others. 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 ~~respect~~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)	March 31, 2021		December 31, 2020
Loan Servicing Rights
Residential mortgage	$	154,746	$	130,630
SBA	6,445		5,839
Indirect automobile	29		73
Total loan servicing rights	$	161,220	$	136,542

Residential Mortgage Loans

The Company sells certain first-lien residential mortgage loans to third party investors, primarily Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”). The Company retains the related mortgage servicing rights (“MSRs”) and receives servicing fees on certain of these loans. 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-months ended March 31, 2021, the Company recorded servicing fee income of $10.1 million. During the three-months ended March 31, 2020, the Company recorded servicing fee income of $6.2 million. 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 ~~reportable business segments for the nine months ended September 30, 2017~~MSRs and ~~2016:~~impairment:

Nine Months Ended
September 30, 2017
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 170,036
$ 14,890
$ 4,968
$ 3,884
$ 21,005
$ 214,783
Interest expense 14,510
4,179
1,074
1,111
3,307
24,181
Net interest income 155,526
10,711
3,894
2,773
17,698
190,602
Provision for loan losses 4,510
617
159
98
444
5,828
Noninterest income 38,974
35,823
1,340
4,663
94
80,894
Noninterest expense

Salaries and employee benefits 58,757
24,771
403
2,339
3,239
89,509
Equipment and occupancy expenses 16,068
1,684
3
159
145
18,059
Data processing and telecommunications expenses 18,778
1,182
80
12
598
20,650
Other expenses 34,355
3,030
137
533
6,326
44,381
Total noninterest expense 127,958
30,667
623
3,043
10,308
172,599
Income before income tax expense 62,032
15,250
4,452
4,295
7,040
93,069
Income tax expense 17,801
5,337
1,559
1,503
2,471
28,671
Net income $ 44,231
$ 9,913
$ 2,893
$ 2,792
$ 4,569
$ 64,398


(dollars in thousands)	Three Months Ended March 31,
Residential mortgage servicing rights	2021		2020
Beginning carrying value, net	$	130,630	$	94,902
Additions	21,867		16,061

Amortization	(7,484)		(4,166)
Recoveries/(impairment)	9,733		(20,875)
Ending carrying value, net	$	154,746	$	85,922

Nine Months Ended
September 30, 2016
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 158,682
$ 9,992
$ 4,714
$ 2,721
$ —
$ 176,109
Interest expense 10,726
2,383
458
450
—
14,017
Net interest income 147,956
7,609
4,256
2,271
—
162,092
Provision for loan losses 1,471
540
94
276
—
2,381
Noninterest income 39,702
36,126
1,328
4,373
—
81,529
Noninterest expense

Salaries and employee benefits 55,740
23,591
399
1,970
—
81,700
Equipment and occupancy expenses 16,541
1,326
3
190
—
18,060
Data processing and telecommunications expenses 17,299
974
71
3
—
18,347
Other expenses 39,040
3,392
77
542
—
43,051
Total noninterest expense 128,620
29,283
550
2,705
—
161,158
Income before income tax expense 57,567
13,912
4,940
3,663
—
80,082
Income tax expense 18,278
4,870
1,729
1,282
—
26,159
Net income $ 39,289
$ 9,042
$ 3,211
$ 2,381
$ —
$ 53,923


(dollars in thousands)	Three Months Ended March 31,
Residential mortgage servicing valuation allowance	2021		2020
Beginning balance	$	39,407	$	104
Additions	0		20,875
Recoveries	(9,733)		0
Ending balance	$	29,674	$	20,979

~~NOTE 15 – REGULATORY MATTERS~~

~~On December 16, 2016, the Bank entered into a Stipulation to the Issuance of a Consent Order with its bank regulatory agencies, the FDIC~~The key metrics and the Georgia Department of Banking and Finance (the “GDBF”), consenting to the issuance of a consent order (the “Order”) relating to the Bank’s Bank Secrecy Act (together with its implementing regulations, the “BSA”) compliance program. In consenting to the issuancesensitivity of the ~~Order, the Bank did not admit~~ fair value to adverse changes in model inputs and/or ~~deny any charges~~assumptions are summarized below:


(dollars in thousands)	March 31, 2021			December 31, 2020
Residential mortgage servicing rights

Unpaid principal balance of loans serviced for others	$	14,171,621		$	13,764,529
Composition of residential loans serviced for others:
FHLMC	21.05		%	21.55		%
FNMA	61.40		%	61.75		%
GNMA	17.55		%	16.70		%
Total	100.00		%	100.00		%
Weighted average term (months)	340			340
Weighted average age (months)	20			20
Modeled prepayment speed	13.37		%	18.82		%
Decline in fair value due to a 10% adverse change	(6,886)			(7,154)
Decline in fair value due to a 20% adverse change	(13,262)			(13,664)
Weighted average discount rate	8.76		%	9.50		%
Decline in fair value due to a 10% adverse change	(5,522)			(4,304)
Decline in fair value due to a 20% adverse change	(10,671)			(8,321)

SBA Loans

All sales of ~~unsafe or unsound banking practices related to its BSA compliance program.~~

~~Under the terms~~SBA loans, consisting of the ~~Order, the Bank or its board of directors is required to take certain affirmative actions to comply with the Bank’s obligations under the BSA.~~guaranteed portion, are executed on a servicing retained basis. These ~~include, but~~loans, which are not limited to, the following: strengthening the board of directors’ oversight of BSA activities; enhancing and adopting a revised BSA compliance program; completing a BSA risk assessment; developing a revised system of internal controls designed to ensure full compliance with the BSA; reviewing and revising customer due diligence and risk assessment processes, policies and procedures; developing, adopting and implementing effective BSA training programs; assessing BSA staffing needs and resources and appointing a qualified BSA officer; establishing an independent BSA testing program; ensuring that all reports requiredpartially guaranteed by the ~~BSA~~SBA, are ~~accurately~~generally secured by business property such as real estate, inventory, equipment and ~~properly filed;~~accounts receivable. The net gain on SBA loan sales, amortization and ~~engaging~~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-months ended March 31, 2021, the Company recorded servicing fee income of $1.0 million. During the three-months ended March 31, 2020, the Company recorded servicing fee income of $1.1 million. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

The table below is an ~~independent firm to review past account activity to determine whether suspicious activity was properly identified and reported.~~

~~Prior to implementation, certain~~analysis of the actions required by the Order were subject to review by, and approval or non-objection from, the FDIC and the GDBF. The Order will remain in effect and be enforceable until it is modified, terminated, suspended or

~~set aside by the FDIC and the GDBF. The Bank expects that it will continue to meet the required actions within the time periods specified~~activity in the ~~Order based upon~~Company’s SBA loan servicing rights and impairment:


(dollars in thousands)	Three Months Ended March 31,
SBA servicing rights	2021		2020
Beginning carrying value, net	$	5,839	$	7,886
Additions	230		375

Purchase accounting adjustment	0		(1,214)
Amortization	(529)		(363)
Recoveries/(impairment)	905		(1,290)
Ending carrying value, net	$	6,445	$	5,394


(dollars in thousands)	Three Months Ended March 31,
SBA servicing valuation allowance	2021		2020
Beginning balance	$	905	$	141
Additions	0		1,290
Recoveries	(905)		0
Ending balance	$	0	$	1,431


(dollars in thousands)	March 31, 2021			December 31, 2020
SBA servicing rights
Unpaid principal balance of loans serviced for others	$	437,989		$	351,325
Weighted average life (in years)	3.49			3.46
Modeled prepayment speed	19.05		%	19.14		%
Decline in fair value due to a 10% adverse change	(412)			(335)
Decline in fair value due to a 20% adverse change	(783)			(636)
Weighted average discount rate	7.09		%	9.55		%
Decline in fair value due to a 100 basis point adverse change	(188)			(151)
Decline in fair value due to a 200 basis point adverse change	(367)			(295)

Indirect Automobile Loans

The Company acquired a portfolio of indirect automobile loans serviced for others. These loans, or portions of loans, were sold on a servicing retained basis. Amortization and impairment/recoveries of servicing rights, and ongoing ~~communications with its regulators.~~servicing fees are recorded in the consolidated statements of income and comprehensive income as part of other noninterest income. The Company is not actively originating or selling indirect automobile loans.


(dollars in thousands)	Three Months Ended March 31,
Indirect automobile servicing rights	2021		2020
Beginning carrying value, net	$	73	$	247

Amortization	(44)		(43)

Ending carrying value, net	$	29	$	204

During the three-months ended March 31, 2021, the Company recorded servicing fee income of $206,000. During the three-months ended March 31, 2020, the Company recorded servicing fee income of $710,000. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

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 ~~initiatives;~~changes; changes in U.S. government monetary and fiscal policy; the impact of the COVID-19 pandemic on the general economy, our customers and the allowance for loan losses; the benefits that may be realized by our customers from government assistance programs and regulatory actions related to the COVID-19 pandemic; the potential impact of the phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; additional competition in our markets; ~~potential business strategies, including acquisitions or dispositions of assets or internal restructuring, that may be pursued by us;~~changes in state and federal banking ~~regulations; changes in or application of environmental and other~~ laws and regulations to which we are subject; ~~political, legal and economic conditions and developments;~~ financial market conditions and the results of financing efforts; changes in commodity prices and interest rates; the cost savings and any revenue synergies expected to result from acquisition transactions, which may not be fully realized within the expected timeframes if at all; 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;~~events beyond our control; and other factors discussed in our filings with the ~~Securities and Exchange Commission~~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, 2017,~~March 31, 2021, as compared with December 31, ~~2016,~~2020, and operating results for the ~~three- and nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~2020. 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 ~~accounting principles generally accepted in the United States of America (“GAAP”).~~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 tangible common equity, tangible book value per common share, adjusted ~~operating~~ net income, and adjusted ~~operating~~ 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 2020 Annual Report on Form 10-K. The ~~following table sets forth unaudited selected financial data for~~reader should refer to the ~~previous five quarters. This data should be read in conjunction with the unaudited~~notes to our consolidated financial statements ~~and the notes thereto and the information contained~~ in ~~this Item 2.~~our 2020 Annual Report on Form 10-K for a full disclosure of all critical accounting policies.

Nine Months Ended
(in thousands, except share and per share data) Third
Quarter
2017 Second
Quarter
2017 First
Quarter
2017 Fourth
Quarter
2016 Third
Quarter
2016 September 30,
2017 September 30,
2016
Results of Operations:
Net interest income $ 66,855
$ 63,157
$ 60,590
$ 57,279
$ 57,067
$ 190,602
$ 162,092
Net interest income (tax equivalent) 68,668
64,773
62,108
58,897
58,024
195,549
164,726
Provision for loan losses 1,787
2,205
1,836
1,710
811
5,828
2,381
Non-interest income 26,999
28,189
25,706
24,272
28,864
80,894
81,529
Non-interest expense 63,767
55,739
53,093
54,677
53,199
172,599
161,158
Income tax expense 8,142
10,315
10,214
6,987
10,364
28,671
26,159
Net income available to common shareholders 20,158
23,087
21,153
18,177
21,557
64,398
53,923
Selected Average Balances:

Investment securities $ 864,456
$ 866,960
$ 862,616
$ 856,671
$ 857,433
$ 864,684
$ 840,688
Loans held for sale 126,798
110,933
77,617
102,926
105,859
105,296
96,340
Loans 4,379,082
3,994,213
3,678,149
3,145,714
2,897,771
4,018,597
2,642,498
Purchased loans 937,595
973,521
1,034,983
1,101,907
1,199,175
982,033
1,147,821
Purchased loan pools 475,742
516,949
547,057
590,617
629,666
513,750
629,118
Earning assets 6,892,939
6,584,386
6,347,807
5,925,634
5,780,455
6,610,374
5,490,525
Assets 7,461,367
7,152,024
6,915,965
6,573,344
6,330,350
7,180,330
6,030,181
Deposits 5,837,154
5,671,394
5,491,324
5,490,657
5,221,219
5,667,891
5,102,729
Shareholders’ equity 796,856
774,664
695,830
653,991
640,382
756,153
599,817
Period-End Balances:

Investment securities $ 867,570
$ 861,188
$ 866,715
$ 852,199
$ 862,702
$ 867,570
$ 862,702
Loans held for sale 137,392
146,766
105,637
105,924
126,263
137,392
126,263
Loans 4,574,678
4,230,228
3,785,480
3,626,821
3,091,039
4,574,678
3,091,039
Purchased loans 917,126
950,499
1,006,935
1,069,191
1,129,381
917,126
1,129,381
Purchased loan pools 465,218
490,114
529,099
568,314
624,886
465,218
624,886
Earning assets 7,074,828
6,816,606
6,525,911
6,293,670
5,925,072
7,074,828
5,925,072
Total assets 7,649,820
7,397,858
7,094,856
6,892,031
6,493,495
7,649,820
6,493,495
Deposits 5,895,504
5,793,397
5,642,369
5,575,163
5,306,098
5,895,504
5,306,098
Shareholders’ equity 801,921
782,682
758,216
646,437
642,583
801,921
642,583
Per Common Share Data:

Earnings per share - basic $ 0.54
0.62
0.59
0.52
0.62
1.76
1.58
Earnings per share - diluted $ 0.54
0.62
0.59
0.52
0.61
1.74
1.56
Book value per common share $ 21.54
$ 21.03
$ 20.42
$ 18.51
$ 18.42
$ 21.54
$ 18.42
Tangible book value per common share $ 17.78
$ 17.24
$ 16.60
$ 14.42
$ 14.38
$ 17.78
$ 14.38
End of period shares outstanding 37,231,049
37,222,904
37,128,714
34,921,474
34,891,304
37,231,049
34,891,304

Nine Months Ended
(in thousands, except share and per share data) Third
Quarter
2017 Second
Quarter
2017 First
Quarter
2017 Fourth
Quarter
2016 Third
Quarter
2016 September 30,
2017 September 30,
2016
Weighted Average Shares Outstanding:

Basic 37,225,418
37,162,810
35,664,420
34,915,459
34,869,747
36,689,934
34,155,556
Diluted 37,552,667
37,489,348
36,040,240
35,293,035
35,194,739
37,017,486
34,470,101
Market Price:

High intraday price $ 51.28
$ 49.80
$ 49.50
$ 47.70
$ 36.20
$ 51.28
$ 36.20
Low intraday price $ 41.05
$ 42.60
$ 41.60
$ 34.61
$ 28.90
$ 41.05
$ 24.96
Closing price for quarter $ 48.00
$ 48.20
$ 46.10
$ 43.60
$ 34.95
$ 48.00
$ 34.95
Average daily trading volume 168,911
169,617
242,982
191,894
166,841
193,555
211,351
Cash dividends declared per share $ 0.10
$ 0.10
$ 0.10
$ 0.10
$ 0.10
$ 0.30
$ 0.20
Closing price to book value 2.23
2.29
2.26
2.36
1.90
2.23
1.90
Performance Ratios:

Return on average assets 1.07 % 1.29 % 1.24 % 1.10 % 1.35 % 1.20 % 1.19 %
Return on average common equity 10.04 % 11.95 % 12.33 % 11.06 % 13.39 % 11.39 % 12.01 %
Average loans to average deposits 101.41 % 98.66 % 97.20 % 89.99 % 92.55 % 99.15 % 88.50 %
Average equity to average assets 10.68 % 10.83 % 10.06 % 9.95 % 10.12 % 10.53 % 9.95 %
Net interest margin (tax equivalent) 3.95 % 3.95 % 3.97 % 3.95 % 3.99 % 3.96 % 4.01 %
Efficiency ratio 67.94 % 61.02 % 61.52 % 67.05 % 61.91 % 63.57 % 66.15 %

Non-GAAP Measures Reconciliation -

Tangible book value per common share:

Total shareholders’ equity $ 801,921
$ 782,682
$ 758,216
$ 646,437
$ 642,583
$ 801,921
$ 642,583
Less:

Goodwill 125,532
125,532
125,532
125,532
122,545
125,532
122,545
Other intangible assets, net 14,437
15,378
16,391
17,428
18,472
14,437
18,472
Tangible common equity $ 661,952
$ 641,772
$ 616,293
$ 503,477
$ 501,566
$ 661,952
$ 501,566
End of period shares outstanding 37,231,049
37,222,904
37,128,714
34,921,474
34,891,304
37,231,049
34,891,304
Book value per common share $ 21.54
$ 21.03
$ 20.42
$ 18.51
$ 18.42
$ 21.54
$ 18.42
Tangible book value per common share 17.78
17.24
16.60
14.42
14.38
17.78
14.38

Results of Operations for the Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of ~~$20.2~~$125.0 million, or ~~$0.54~~$1.79 per diluted share, for the quarter ended ~~September 30, 2017,~~March 31, 2021, compared with ~~$21.6~~$19.3 million, or ~~$0.61~~$0.28 per diluted share, for the same period in ~~2016.~~2020. The Company’s return on average assets and average shareholders’ equity were ~~1.07%~~2.44% and ~~10.04%~~18.80%, respectively, in the ~~third~~first quarter of ~~2017,~~2021, compared with ~~1.35%~~0.43% and ~~13.39%~~3.16%, respectively, in the ~~third~~first quarter of ~~2016.~~2020. During the ~~third~~first quarter of ~~2017~~2021, the Company recorded pre-tax servicing right recovery of $10.6 million, pre-tax gain on bank owned life insurance ("BOLI") proceeds of $603,000 and pre-tax gains on the sale of premises of $264,000. During the first quarter of 2020, the Company incurred pre-tax merger and conversion charges of ~~$92,000,~~$540,000, pre-tax ~~BSA compliance resolution expenses~~servicing right impairment of ~~$4.7~~$22.2 million, pre-tax ~~Hurricane Irma~~ expenses related to SEC and DOJ investigation of ~~$410,000,~~$1.4 million, pre-tax expenses related to the COVID-19 pandemic of $548,000 and pre-tax losses on the sale of premises of ~~$91,000. During the third quarter of 2016, the Company incurred pre-tax losses on the sale of premises of $238,000.~~$470,000. Excluding these ~~merger and conversion charges, compliance resolution expenses, Hurricane Irma expenses, and losses on the sale of premises,~~adjustment items, the Company’s net income would have been ~~$23.6~~$115.7 million, or ~~$0.63~~$1.66 per diluted share, for the ~~third~~first quarter of ~~2017~~2021 and ~~$21.7~~$39.2 million, or ~~$0.62~~$0.56 per diluted share, for the ~~third~~first quarter of ~~2016.~~2020.

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


	Three Months Ended March 31,
(in thousands, except share and per share data)	2021		2020
Net income	$	124,962	$	19,322
Adjustment items:
Merger and conversion charges	—		540


Servicing right impairment (recovery)	(10,639)		22,165
Gain on BOLI proceeds	(603)		—
Expenses related to SEC and DOJ investigation	—		1,443
Natural disaster and pandemic expenses	—		548
(Gain) loss on the sale of premises	(264)		470
Tax effect of adjustment items (Note 1)	2,290		(5,283)
After tax adjustment items	(9,216)		19,883
Adjusted net income	$	115,746	$	39,205

Weighted average common shares outstanding - diluted	69,740,860		69,502,022
Net income per diluted share	$	1.79	$	0.28
Adjusted net income per diluted share	$	1.66	$	0.56

Note 1: A portion of the merger and conversion charges for the three months ended March 31, 2020 are nondeductible for tax purposes.

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except share and per share data) 2017 2016 2017 2016
Net income available to common shareholders $ 20,158
$ 21,557
$ 64,398
$ 53,923
Adjustment items:

Merger and conversion charges 92
—
494
6,359
Certain compliance resolution expenses 4,729
—
4,729
—
Financial impact of Hurricane Irma 410
—
410
—
Losses on the sale of premises 91
238
956
562
Tax effect of management adjusted charges (1,863 ) (83 ) (2,306 ) (2,422 )
After tax management-adjusted charges 3,459
155
4,283
4,499
Adjusted operating net income $ 23,617
$ 21,712
$ 68,681
$ 58,422

Weighted average common shares outstanding - diluted 37,552,667
35,194,739
37,017,486
34,470,101
Earnings per diluted share $ 0.54
$ 0.61
$ 1.74
$ 1.56
Adjusted operating net income per diluted share $ 0.63
$ 0.62
$ 1.86
$ 1.69

Below is additional information regarding the retail banking activities, mortgage banking activities, warehouse lending activities, SBA activities and premium finance activities of the Company during the third quarter of 2017 and 2016, respectively:

Three Months Ended
September 30, 2017
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 59,130
$ 5,862
$ 2,022
$ 1,413
$ 7,895
$ 76,322
Interest expense 5,530
1,597
487
432
1,421
9,467
Net interest income 53,600
4,265
1,535
981
6,474
66,855
Provision for loan losses 1,037
262
215
(1 ) 274
1,787
Noninterest income 13,007
12,257
583
1,130
22
26,999
Noninterest expense

Salaries and employee benefits 20,554
9,792
129
858
1,250
32,583
Equipment and occupancy expenses 5,384
555
1
54
42
6,036
Data processing and telecommunications expenses 6,357
425
28
9
231
7,050
Other expenses 14,905
1,001
51
63
2,078
18,098
Total noninterest expense 47,200
11,773
209
984
3,601
63,767
Income before income tax expense 18,370
4,487
1,694
1,128
2,621
28,300
Income tax expense 4,850
1,475
580
394
843
8,142
Net income $ 13,520
$ 3,012
$ 1,114
$ 734
$ 1,778
$ 20,158

~~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 three months ended September 30, 2017 and 2016. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 35% federal tax rate.

Quarter Ended
September 30,
2017 2016
(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:

Federal funds sold and interest-bearing deposits in banks $ 109,266
$ 406
1.47% $ 90,551
$ 155
0.68%
Investment securities 864,456
5,665
2.60% 857,433
4,872
2.26%
Loans held for sale 126,798
1,131
3.54% 105,859
826
3.10%
Loans 4,379,082
53,394
4.84% 2,897,771
33,672
4.62%
Purchased loans 937,595
14,048
5.94% 1,199,175
19,296
6.40%
Purchased loan pools 475,742
3,491
2.91% 629,666
4,346
2.75%
Total interest-earning assets 6,892,939
78,135
4.50% 5,780,455
63,167
4.35%
Noninterest-earning assets 568,428

549,895

Total assets $ 7,461,367

$ 6,330,350

Liabilities and Shareholders’ Equity

Interest-bearing liabilities:

Savings and interest-bearing demand deposits $ 3,162,448
$ 2,963
0.37% $ 2,787,323
$ 1,719
0.25%
Time deposits 1,020,239
2,173
0.85% 887,685
1,355
0.61%
Federal funds purchased and securities sold under agreements to repurchase 19,414
11
0.22% 37,305
18
0.19%
FHLB advances 608,413
1,849
1.21% 265,202
393
0.59%
Other borrowings 75,590
1,183
6.21% 49,345
479
3.86%
Subordinated deferrable interest debentures 85,040
1,288
6.01% 83,719
1,179
5.60%
Total interest-bearing liabilities 4,971,144
9,467
0.76% 4,110,579
5,143
0.50%
Demand deposits 1,654,467

1,546,211

Other liabilities 38,900

33,178

Shareholders’ equity 796,856

640,382

Total liabilities and shareholders’ equity $ 7,461,367

$ 6,330,350

Interest rate spread

3.74%

3.85%
Net interest income
$ 68,668

$ 58,024

Net interest margin

3.95%

3.99%

On a tax-equivalent basis, net interest income for the third quarter of 2017 was $68.7 million, an increase of $10.6 million, or 18.3%, compared with $58.0 million reported in the same quarter in 2016. The higher net interest income is a result of growth in average interest earning assets which increased $1.11 billion, or 19.2%, from $5.78 billion in the third quarter of 2016 to $6.89 billion for the third quarter of 2017. The Company’s net interest margin decreased during the third quarter of 2017 to 3.95%, compared with 3.99% reported in the third quarter of 2016 but remained stable compared with 3.95% reported in the second quarter of 2017.

Total interest income, on a tax-equivalent basis, increased to $78.1 million during the third quarter of 2017, compared with $63.2 million in the same quarter of 2016. Yields on earning assets increased to 4.50% during the third quarter of 2017, compared with 4.35% reported in the third quarter of 2016. During the third quarter of 2017, loans comprised 85.9% of earning assets, compared with 83.6% in the same quarter of 2016. This increase is a result of growth in average legacy loans which increased $1.48 billion, or 51.1%, to $4.38 billion in the third quarter 2017 from $2.90 billion in the same period of 2016. Yields on legacy loans increased to 4.84% in the third quarter of 2017, compared with 4.62% in the same period of 2016. The yield on purchased loans decreased from 6.40% in the third quarter of 2016 to 5.94% during the third quarter of 2017. Accretion income for the third quarter of 2017 was $2.7 million, compared with $3.6 million in the third quarter of 2016. Excluding the effect of accretion on purchased loans, the yield on purchased loans was 5.21% for the third quarter of 2016, compared with 4.79% in the same period of 2017. Yields on purchased loan pools increased from 2.75% in the third quarter of 2016 to 2.91% in the same period in 2017. Management anticipates improving economic conditions and increased loan demand will provide consistent interest income.

The yield on total interest-bearing liabilities increased from 0.50% in the third quarter of 2016 to 0.76% in the third quarter of 2017. Total funding costs, inclusive of noninterest bearing demand deposits, increased to 0.57% in the third quarter of 2017, compared with 0.36% during the third quarter of 2016. Deposit costs increased from 0.23% in the third quarter of 2016 to 0.35% in the third quarter of 2017. Non-deposit funding costs increased from 1.89% in the third quarter of 2016 to 2.18% in the third quarter of 2017. The increase in non-deposit funding costs was driven primarily by an increased utilization of short-term FHLB advances coupled with an increase in the average rate paid on other borrowings related to the March 2017 issuance of $75.0 million of 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027. Ongoing efforts to maintain the percentage of funding from transaction deposits have succeeded such that non-CD deposits averaged 82.5% of total deposits in the third quarter of 2017, compared with 83.0% during the third quarter of 2016. Average balances of interest bearing deposits and their respective costs for the third quarter of 2017 and 2016 are shown below:

Three Months Ended
September 30, 2017 Three Months Ended
September 30, 2016
(dollars in thousands)
Average
Balance

Average
Cost

Average
Balance

Average
Cost
NOW $ 1,201,151
0.20% $ 1,085,828
0.16%
MMDA 1,682,306
0.55% 1,435,151
0.34%
Savings 278,991
0.07% 266,344
0.07%
Retail CDs < $100,000 437,641
0.62% 431,570
0.45%
Retail CDs > $100,000 582,598
1.01% 451,115
0.75%
Brokered CDs —
—% 5,000
0.64%
Interest-bearing deposits $ 4,182,687
0.49% $ 3,675,008
0.33%

~~Provision for Loan Losses~~

The Company’s provision for loan losses during the third quarter of 2017 amounted to $1.8 million, compared with $2.2 million in the second quarter of 2017 and $811,000 in the third quarter of 2016. At September 30, 2017, classified loans still accruing totaled $45.8 million, compared with $43.3 million at December 31, 2016. Non-performing assets as a percentage of total assets decreased from 0.94% at December 31, 2016 to 0.75% at September 30, 2017. Net charge-offs on legacy loans during the third quarter of 2017 were approximately $1.6 million, or 0.15% of average legacy loans on an annualized basis, compared with approximately $371,000, or 0.05%, in the third quarter of 2016. The Company’s allowance for loan losses allocated to legacy loans at September 30, 2017 was $21.2 million, or 0.46% of legacy loans, compared with $20.5 million, or 0.56% of legacy loans, at December 31, 2016. The Company’s total allowance for loan losses at September 30, 2017 was $26.0 million, or 0.44% of total loans, increasing from $23.9 million, or 0.45% of total loans, at December 31, 2016.

~~Noninterest Income~~

Total non-interest income for the third quarter of 2017 was $27.0 million, a decrease of $1.9 million, or 6.5%, from the $28.9 million reported in the third quarter of 2016. Service charges on deposit accounts in the third quarter of 2017 decreased $823,000, or 7.2%, to $10.5 million, compared with $11.4 million in the third quarter of 2016. This decrease in service charge revenue was primarily attributable to lower overdraft fee income. Income from mortgage-related activities decreased $727,000, or 5.2%, from $14.1 million in the third quarter of 2016 to $13.3 million in the third quarter of 2017. Total production in the third quarter of 2017 amounted to $401.7 million, compared with $410.8 million in the same quarter of 2016, while spread (gain on sale) decreased to 3.30% in the current quarter compared with 3.69% in the same quarter of 2016. The retail mortgage open pipeline finished the third quarter of 2017 at $158.4 million, compared with $174.3 million at the beginning of the third quarter of 2017 and $145.4 million at the end of the third quarter of 2016. Other service charges, commissions and fees decreased $92,000, or 11.6%, to $699,000 during the third quarter of 2017, compared with $791,000 during the third quarter of 2016. The decrease in other service charges, commissions and fees was primarily attributable to lower ATM fees, reflecting the Company's decision to waive ATM fees for customers during Hurricane Irma. Other non-interest income decreased $223,000, or 8.4%, to $2.4 million for the third quarter of 2017, compared with $2.6 million during the third quarter of 2016. The decrease in other non-interest income was primarily attributable to lower bank owned life insurance income and lower check order fee income.

~~Noninterest Expense~~

Total non-interest expenses for the third quarter of 2017 increased $10.6 million, or 19.9%, to $63.8 million, compared with $53.2 million in the same quarter 2016. Salaries and employee benefits increased $4.6 million, or 16.4%, from $28.0 million in the third quarter of 2016 to $32.6 million in the third quarter of 2017 due to staff additions for the premium finance division, increased staffing related to the Company’s ongoing BSA compliance efforts, higher incentive accruals for production staff, increased commissions in the mortgage and SBA divisions, and staff additions for the equipment finance line of business. Occupancy and

equipment expenses remained stable at $6.0 million for both the third quarter of 2017 and the third quarter of 2016. Tighter controls on expenses held increases in these costs to a minimum. Data processing and telecommunications expense increased $865,000, or 14.0%, to $7.1 million in the third quarter of 2017, compared with $6.2 million in the third quarter of 2016, due to an increase in the number of accounts being processed by our core banking system and additional software fees incurred related to the buildout of our BSA compliance program which we expect to stabilize. Credit resolution-related expenses decreased from $1.5 million in the third quarter of 2016 to $1.3 million in the third quarter of 2017. Other noninterest expenses increased $5.2 million from $9.3 million in the third quarter of 2016 to $14.5 million in the third quarter of 2017 due primarily to consulting fees related to BSA compliance resolution, management and licensing fees associated with the premium finance division and loan servicing fees associated with consumer installment home improvement loans serviced by an unrelated third party.

~~Income Taxes~~

Income tax expense is influenced by the amount of taxable income, the amount of tax-exempt income and the amount of non-deductible expenses. For the third quarter of 2017, the Company reported income tax expense of $8.1 million, compared with $10.4 million in the same period of 2016. This decrease in income tax expense is directly correlated to the decrease in pre-tax income for the periods. The Company’s effective tax rate for the three months ending September 30, 2017 and 2016 was 28.8% and 32.5%, respectively.

~~Results of Operations for the Nine Months Ended September 30, 2017 and 2016~~

~~Consolidated Earnings and Profitability~~

Ameris reported net income available to common shareholders of $64.4 million, or $1.74 per diluted share, for the nine months ended September 30, 2017, compared with $53.9 million, or $1.56 per diluted share, for the same period in 2016. The Company’s return on average assets and average shareholders’ equity were 1.20% and 11.39%, respectively, for the nine months ended September 30, 2017, compared with 1.19% and 12.01%, respectively, for the nine months ended September 30, 2016. During the nine months ended September 30, 2017, the Company incurred pre-tax merger and conversion charges of $494,000, pre-tax BSA compliance resolution expenses of $4.7 million, pre-tax Hurricane Irma expenses of $410,000, and pre-tax losses on the sale of premises of $956,000. During the nine months ended September 30, 2016, the Company incurred pre-tax merger and conversion charges of $6.4 million and pre-tax losses on the sale of premises of $562,000. Excluding these merger and conversion charges, compliance resolution expenses, Hurricane Irma expenses, and losses on the sale of premises, the Company’s net income would have been $68.7 million, or $1.86 per diluted share, and $58.4 million, or $1.69 per diluted share, for the first nine months of 2017 and 2016, respectively.

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


	Three Months Ended March 31, 2021
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	112,379	$	30,199	$	10,327	$	18,034	$	7,011	$	177,950
Interest expense	(437)		11,215		421		1,399		375		12,973
Net interest income	112,816		18,984		9,906		16,635		6,636		164,977
Provision for credit losses	(23,904)		(4,553)		(145)		(547)		558		(28,591)
Noninterest income	16,738		97,640		980		2,611		4		117,973
Noninterest expense
Salaries and employee benefits	42,723		49,838		330		1,382		1,712		95,985
Equipment and occupancy expenses	10,120		1,476		1		106		78		11,781
Data processing and telecommunications expenses	10,201		1,546		49		1		87		11,884
Other expenses	19,710		8,189		33		295		921		29,148
Total noninterest expense	82,754		61,049		413		1,784		2,798		148,798
Income before income tax expense	70,704		60,128		10,618		18,009		3,284		162,743
Income tax expense	18,456		12,627		2,230		3,782		686		37,781
Net income	$	52,248	$	47,501	$	8,388	$	14,227	$	2,598	$	124,962


	Nine Months Ended September 30, 2016													Three Months Ended March 31, 2020
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total		(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	158,682	$	9,992	$	4,714	$	2,721	$	—	$	176,109	Interest income	$	132,301	$	33,411	$	4,850	$	3,728	$	8,478	$	182,768
Interest expense	10,726		2,383		458		450		—		14,017		Interest expense	13,926		15,655		1,548		1,547		2,147		34,823
Net interest income	147,956		7,609		4,256		2,271		—		162,092		Net interest income	118,375		17,756		3,302		2,181		6,331		147,945
Provision for loan losses	1,471		540		94		276		—		2,381
Provision for credit losses													Provision for credit losses	35,997		1,997		(9)		(903)		3,965		41,047
Noninterest income	39,702		36,126		1,328		4,373		—		81,529		Noninterest income	17,773		34,369		960		1,277		—		54,379
Noninterest expense													Noninterest expense
Salaries and employee benefits	55,740		23,591		399		1,970		—		81,700		Salaries and employee benefits	41,621		31,097		210		1,476		1,542		75,946
Equipment and occupancy expenses	16,541		1,326		3		190		—		18,060		Equipment and occupancy expenses	10,347		1,504		1		97		79		12,028
Data processing and telecommunications expenses	17,299		974		71		3		—		18,347		Data processing and telecommunications expenses	10,797		986		41		13		117		11,954
Other expenses	39,040		3,392		77		542		—		43,051		Other expenses	30,645		5,875		34		515		1,056		38,125
Total noninterest expense	128,620		29,283		550		2,705		—		161,158		Total noninterest expense	93,410		39,462		286		2,101		2,794		138,053
Income before income tax expense	57,567		13,912		4,940		3,663		—		80,082		Income before income tax expense	6,741		10,666		3,985		2,260		(428)		23,224
Income tax expense	18,278		4,870		1,729		1,282		—		26,159		Income tax expense	275		2,408		837		475		(93)		3,902
Net income	$	39,289	$	9,042	$	3,211	$	2,381	$	—	$	53,923	Net income	$	6,466	$	8,258	$	3,148	$	1,785	$	(335)	$	19,322

~~Interest Income~~

Interest income, on a tax-equivalent basis, for the nine months ended September 30, 2017 was $219.7 million, an increase of $41.0 million, or 22.9%, as compared with $178.7 million for the same period in 2016. Average earning assets for the nine-month period increased $1.12 billion, or 20.4%, to $6.61 billion as of September 30, 2017, compared with $5.49 billion as of September 30, 2016. The increase in average earning assets is due to organic growth in the loan portfolio coupled with acquisition activity during the first quarter of 2016. Yield on average earning assets increased to 4.44% for the nine months ended September 30, 2017, compared with 4.35% in the first nine months of 2016. The increase in the yield on average earning assets was primarily attributable to the growth in legacy loans.

~~Interest Expense~~

Total interest expense for the nine months ended September 30, 2017 amounted to $24.2 million, reflecting a $10.2 million increase from the $14.0 million expense recorded in the same period of 2016. During the nine-month period ended September 30, 2017, the Company’s funding costs increased to 0.51% from 0.35% reported in 2016. Deposit costs increased to 0.32% during the nine-month period ended September 30, 2017, compared with 0.23% during the same period in 2016. Total non-deposit funding costs decreased to 1.99% during the nine-month period ended September 30, 2017, compared with 2.36% during the first nine months of 2016. The decrease in non-deposit funding costs was driven primarily by an increased utilization of lower rate short-term FHLB advances.

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average ~~yield/~~interest 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~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~2020. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a ~~35%~~21% federal tax rate.


	Nine Months Ended September 30,											Quarter Ended March 31,
	2017					2016						2021					2020
(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid
Assets											Assets
Interest-earning assets:											Interest-earning assets:
Federal funds sold and interest-bearing deposits in banks	$	126,014	$	1,070	1.14%	$	134,060	$	659	0.66%
Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks											Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks	$	2,165,652	$	534	0.10%	$	446,889	$	1,287	1.16%
Investment securities	864,684		16,917		2.62%	840,688		15,227		2.42%	Investment securities	957,575		6,296		2.67%	1,456,462		10,281		2.84%
Loans held for sale	105,296		2,842		3.61%	96,340		2,402		3.33%	Loans held for sale	1,284,821		10,827		3.42%	1,587,131		13,637		3.46%
Loans	4,018,597		143,806		4.78%	2,642,498		93,887		4.75%	Loans	14,453,975		161,473		4.53%	12,712,997		158,636		5.02%
Purchased loans	982,033		43,986		5.99%	1,147,821		53,348		6.21%
Purchased loan pools	513,750		11,109		2.89%	629,118		13,220		2.81%
Total interest-earning assets	6,610,374		219,730		4.44%	5,490,525		178,743		4.35%	Total interest-earning assets	18,862,023		179,130		3.85%	16,203,479		183,841		4.56%
Noninterest-earning assets	569,956					539,656					Noninterest-earning assets	1,872,392					1,852,966
Total assets	$	7,180,330				$	6,030,181				Total assets	$	20,734,415				$	18,056,445

Liabilities and Shareholders’ Equity											Liabilities and Shareholders’ Equity
Interest-bearing liabilities:											Interest-bearing liabilities:
Savings and interest-bearing demand deposits	$	3,048,284	$	7,614	0.33%	$	2,740,368	$	4,922	0.24%	Savings and interest-bearing demand deposits	$	8,766,563	$	3,048	0.14%	$	6,936,013	$	12,732	0.74%
Time deposits	994,770		5,865		0.79%	872,209		3,808		0.58%	Time deposits	2,067,410		3,750		0.74%	2,685,399		11,370		1.70%
Federal funds purchased and securities sold under agreements to repurchase	29,612		44		0.20%	44,433		77		0.23%	Federal funds purchased and securities sold under agreements to repurchase	9,284		7		0.31%	15,637		40		1.03%
FHLB advances	539,496		3,994		0.99%	126,855		571		0.60%	FHLB advances	48,951		192		1.59%	1,267,303		5,109		1.62%
Other borrowings	66,420		2,900		5.84%	47,809		1,333		3.72%	Other borrowings	376,260		4,638		5.00%	269,454		3,511		5.24%
Subordinated deferrable interest debentures	84,712		3,764		5.94%	79,912		3,306		5.53%	Subordinated deferrable interest debentures	124,574		1,338		4.36%	127,731		2,061		6.49%
Total interest-bearing liabilities	4,763,294		24,181		0.68%	3,911,586		14,017		0.48%	Total interest-bearing liabilities	11,393,042		12,973		0.46%	11,301,537		34,823		1.24%
Demand deposits	1,624,837					1,490,152					Demand deposits	6,412,268					4,080,920
Other liabilities	36,046					28,626					Other liabilities	234,100					217,371
Shareholders’ equity	756,153					599,817					Shareholders’ equity	2,695,005					2,456,617
Total liabilities and shareholders’ equity	$	7,180,330				$	6,030,181				Total liabilities and shareholders’ equity	$	20,734,415				$	18,056,445
Interest rate spread					3.76%					3.87%	Interest rate spread					3.39%					3.32%
Net interest income			$	195,549				$	164,726		Net interest income			$	166,157				$	149,018
Net interest margin					3.96%					4.01%	Net interest margin					3.57%					3.70%

~~For~~On a tax-equivalent basis, net interest income for the ~~year-to-date period ending September 30, 2017,~~first quarter of 2021 was $166.2 million, an increase of $17.1 million, or 11.5%, compared with $149.0 million reported in the ~~Company~~same quarter in 2020. The higher net interest income is a result of disciplined deposit pricing and a reduction in borrowing costs, partially offset by a decline in the yield on earning assets. Average interest earning assets increased $2.66 billion, or 16.4%, from $16.20 billion in the first quarter of 2020 to $18.86 billion for the first quarter of 2021. This growth in interest earning assets resulted primarily from organic growth in average loans, including PPP loans, and excess liquidity from deposit growth. The Company’s net interest margin during the first quarter of 2021 was 3.57%, down 13 basis points from 3.70% reported ~~$195.5~~in the first quarter of 2020. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to $7.5 billion during the first quarter of 2021, with weighted average yields of 3.15%, compared with $3.9 billion and 4.15%, respectively, during the first quarter of 2020. Loan production yields in the lines of business were negatively impacted 11 basis points during the first quarter of 2021 by originations of PPP loans in our SBA division. Loan production in the banking division amounted to $600.6 million during the first quarter of ~~net~~2021 with weighted average yields of 3.80%, compared with $918.4 million and 4.55%, respectively, during the first quarter of 2020.

Total interest income, on a tax-equivalent basis, ~~an increase of $30.8~~decreased to $179.1 million or 18.7%, compared with $164.7 million of net interest income for the same period in 2016. The average balance of earning assets increased $1.12 billion, or 20.4%, from $5.49 billion during the first nine months of 2016 to $6.61 billion during the first nine months of 2017. The increase in average earning assets is due to organic growth in the loan portfolio coupled with acquisition activity during the first quarter of ~~2016. The Company’s net interest margin~~2021, compared with $183.8 million in the same quarter of 2020. Yields on earning assets decreased to ~~3.96%~~3.85% during the first quarter of 2021, compared with 4.56% reported in the ~~nine-month period ending September 30, 2017,~~first quarter of 2020. During the first quarter of 2021, loans comprised 83.4% of average earning assets, compared with ~~4.01%~~88.3% in the same quarter of 2020. Yields on loans decreased to 4.53% in the first quarter of

2021, compared with 5.02% in the same period ~~in 2016. The decrease~~of 2020. Accretion income for the first quarter of 2021 was $6.1 million, compared with $6.6 million in the ~~net~~first quarter of 2020.

The yield on total interest-bearing liabilities decreased from 1.24% in the first quarter of 2020 to 0.46% in the first quarter of 2021. Total funding costs, inclusive of noninterest-bearing demand deposits, decreased to 0.30% in the first quarter of 2021, compared with 0.91% during the first quarter of 2020. Deposit costs decreased from 0.71% in the first quarter of 2020 to 0.16% in the first quarter of 2021. Non-deposit funding costs increased from 2.57% in the first quarter of 2020 to 4.48% in the first quarter of 2021. The increase in non-deposit funding costs was driven primarily by a shift in mix from short-term FHLB advances as excess liquidity reduced outstanding FHLB advances. Average balances of interest ~~margin~~bearing deposits and their respective costs for the first quarter of 2021 and 2020 are shown below:


	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost
NOW	$	3,182,245	0.12%	$	2,287,947	0.49%
MMDA	4,761,279		0.17%	4,004,644		0.98%
Savings	823,039		0.06%	643,422		0.13%
Retail CDs	2,066,410		0.73%	2,624,209		1.70%
Brokered CDs	1,000		2.43%	61,190		2.01%
Interest-bearing deposits	$	10,833,973	0.25%	$	9,621,412	1.01%

Provision for Credit Losses

The Company’s provision for credit losses during the first quarter of 2021 amounted to a negative $28.6 million, compared with $41.0 million in the first quarter of 2020. This decrease was primarily attributable to an improved economic forecast in our CECL model, particularly levels of unemployment, home prices and commercial real estate prices. The construction and development segment was the ~~increase~~largest contributor to the decrease in ~~yield on interest-bearing liabilities.~~

~~Provision for Loan Losses~~

provision as a result of both a decline in funded balances and an improvement in qualitative factors compared with December 31, 2020. The improvement in qualitative factors is attributable to uncertainty in the forecast and loss drivers used in the December 31, 2020 provision estimate which Management determined were both properly addressed in the first quarter 2021 estimate. The provision for ~~loan~~credit losses for the first quarter of 2021 was comprised of negative $16.6 million related to loans, negative $11.8 million related to unfunded commitments and negative $173,000 related to other credit losses compared with $37.0 million related to loans and $4.0 million related to unfunded commitments for the first quarter of 2020. Non-performing assets as a percentage of total assets decreased from 0.48% at December 31, 2020 to 0.40% at March 31, 2021. The decrease in non-performing assets is primarily attributable to a decrease in nonaccruing loans as a result of collection activities and upgrades. Net charge-offs on loans during the first quarter of 2021 were approximately $4.3 million, or 0.12% of average loans on an annualized basis, compared with approximately $4.4 million, or 0.14%, in the first quarter of 2020. The Company’s total allowance for credit losses on loans at March 31, 2021 was $178.6 million, or 1.22% of total loans, compared with $199.4 million, or 1.38% of total loans, at December 31, 2020. This decrease is primarily attributable to the provision release noted above.

Noninterest Income

Total noninterest income for the first quarter of 2021 was $118.0 million, an increase of $63.6 million, or 116.9%, from the $54.4 million reported in the first quarter of 2020. Income from mortgage-related activities was $98.5 million in the first quarter of 2021, an increase of $63.2 million, or 178.7%, from $35.3 million in the first quarter of 2020. Total production in the first quarter of 2021 amounted to $2.63 billion, compared with $1.36 billion in the same quarter of 2020, while spread (gain on sale) increased to ~~$5.8~~3.95% in the current quarter, compared with 2.88% in the same quarter of 2020. The retail mortgage open pipeline finished the first quarter of 2021 at $2.33 billion, compared with $2.00 billion at December 31, 2020 and $2.43 billion at the end of the first quarter of 2020. Service charges on deposit accounts decreased $1.0 million, or 8.6%, to $10.8 million in the first quarter of 2021, compared with $11.8 million in the first quarter of 2020. This decrease in service charges on deposit accounts is due primarily to a decrease in NSF income resulting from a decline in volume.

Other noninterest income increased $1.4 million, or 22.5%, to $7.7 million for the ~~nine months ended September 30, 2017,~~first quarter of 2021, compared with $6.3 million during the first quarter of 2020. The increase in other noninterest income was primarily attributable to an increase in gain on BOLI proceeds of $603,000 and a decrease in SBA servicing asset impairment of $2.2 million, partially offset by a decrease of $632,000 in gain on sales of SBA loans.

Noninterest Expense

Total noninterest expenses for the first quarter of 2021 increased $10.7 million, or 7.8%, to $148.8 million, compared with $138.1 million in the same quarter 2020. Salaries and employee benefits increased $20.0 million, or 26.4%, from $75.9 million in the first quarter of 2020 to $96.0 million in the first quarter of 2021, due primarily to an increase in variable compensation tied to increased mortgage production of $16.8 million. Occupancy and equipment expenses decreased $247,000, or 2.1%, to $11.8 million for the first quarter of 2021, compared with $12.0 million in the first quarter of 2020, due primarily to a reduction in leased locations related to previously announced efficiency initiatives. Data processing and telecommunications expense decreased $70,000, or 0.6%, to $11.9 million in the first quarter of 2021, compared with $12.0 million in the first quarter of 2020. Advertising and marketing expense was $1.4 million in the first quarter of 2021, compared with $2.4 million in the ~~same period in 2016. For the nine-month period ended September 30, 2016, the Company had legacy net charge-offs totaling $3.9~~first quarter of 2020. Amortization of intangible assets decreased $1.5 million, compared with $1.9 million for the same period in 2016. Annualized legacy net charge-offs as a percentage of average legacy loans increased to 0.13% during the first nine months of 2017, compared with 0.10% during the first nine months of 2016. For the nine-month period ended September 30, 2017, the Company had total loan net charge-offs totaling $3.8 million, compared with $480,000 for the same period in 2016. Annualized total loan net charge-offs as a percentage of average total loans increased to 0.09% during the first nine months of 2017, compared with 0.01% during the first nine months of 2016. Non-performing assets declined to $57.6 million at September 30, 2017, compared with $66.6 million at September 30, 2016.

~~Noninterest Income~~

~~Non-interest income for the first nine months of 2017 decreased $635,000,~~ or ~~0.8%~~26.7%, to $80.9 million, compared with $81.5 million in the same period in 2016. Service charges on deposit accounts remained stable at $31.7 million for both the first nine months of 2017 and the first nine months of 2016. However, service charge revenues on both commercial and consumer accounts increased, while overdraft fee income declined. Income from ~~mortgage banking activity increased slightly from $38.4~~$5.6 million in the first ~~nine months~~quarter of ~~2016~~2020 to ~~$38.5~~$4.1 million in the first ~~nine months~~quarter of ~~2017, due to higher levels~~2021. Core deposit intangibles are being amortized over an accelerated basis; therefore, the expense recorded will decline over the life of ~~production.~~the asset. There were no merger and conversion charges in the first quarter of 2021, compared with $540,000 of such charges in the same quarter of 2020. Other ~~service charges, commissions and fees~~noninterest expenses decreased ~~$732,000,~~$4.4 million, or ~~25.5%~~15.9%, ~~to $2.1~~from $27.4 million in the first ~~nine months~~quarter of ~~2017, compared with $2.9~~2020 to $23.0 million in the first nine months of 2016. The decrease in other service charges, commissions and fees was primarily attributable to lower ATM fees and lower brokerage income. Other non-interest income increased slightly from $8.4 million during the first nine months of 2016 to $8.5 million during the first nine months of 2017.

~~Noninterest Expense~~

Total operating expenses for the first nine months of 2017 increased $11.4 million, or 7.1%, to $172.6 million, compared with $161.2 million in the same period in 2016. Salaries and benefits for the first nine months of 2017 increased $7.8 million as compared with the first nine months of 2016 due to staff additions for the premium finance division, increased staffing related to the Company’s ongoing BSA compliance efforts, staff additions for the equipment finance line of business, and the acquisition of Jacksonville Bancorp, Inc. (“JAXB”) during the first quarter of 2016. Occupancy and equipment expenses remained stable at $18.1 million for both the first nine months of 2017 and the first nine months of 2016. Data processing and telecommunications expenses increased from $18.3 million in the first nine months of 2016 to $20.7 million in the first nine months of 2017. Credit resolution-related expenses, including problem loan and OREO expense and OREO write-downs and losses, decreased to $2.9 million for the first nine months of 2017, compared with $5.1 million in the first nine months of 2016. Advertising and marketing expenses increased from $2.9 million for the first nine months of 2016 to $3.6 million for the first nine months of 2017. Amortization of intangible assets for the first nine months of 2017 decreased $342,000 as compared with the first nine months of 2016. Merger and conversion charges were $494,000 and $6.4 million for the nine months ended September 30, 2017 and 2016, respectively, reflecting the first quarter 2016 acquisition of JAXB. Other noninterest expense increased $9.0 million for the first nine months of 2017 as compared with the first nine months of 20162021, due primarily to ~~consulting fees related to BSA compliance resolution, management~~a decrease of $2.2 million in FDIC insurance, a decrease of $1.7 million in problem loan expenses, and ~~licensing fees associated with the premium finance division,~~a decrease of $2.3 million in legal and professional fees. These decreases in other noninterest expenses were partially offset by increases in loan servicing ~~fees associated with consumer installment home improvement loans serviced by an unrelated third party.~~expenses of $2.0 million and variable expenses tied to production in our lines of business.

Income Taxes

InIncome 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 first ~~nine months~~quarter of ~~2017,~~2021, the Company ~~recorded~~reported income tax expense of ~~$28.7~~$37.8 million, compared with ~~$26.2~~$3.9 million in the same period of ~~2016. This increase in income tax expense is directly correlated to the increase in pre-tax income for the periods.~~2020. The Company’s effective tax rate for the ~~nine~~three months ~~ended September 30, 2017~~ending March 31, 2021 and ~~2016~~2020 was ~~30.8%~~23.2% and ~~32.7%~~16.8%, respectively. The increase in the effective tax rate is primarily a result of the benefit recorded in the first quarter of 2020 for loss carrybacks allowed as a result of the CARES Act.

Financial Condition as of ~~September 30, 2017~~March 31, 2021

Securities

Debt securities with readily determinable fair values are classified as available for sale and 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. ~~Equity securities, including restricted~~Restricted equity securities are classified as other investment securities and are ~~recorded~~carried at cost and are periodically evaluated for impairment based on the ~~lower~~ultimate recovery of par value or cost ~~or market value.~~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. ~~Declines in the fair value of securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses.~~

~~In determining whether other-than-temporary impairment losses exist, management considers (1) the length of time~~Management and the ~~extent to which the fair value has been less than cost, (2) the financial condition~~Company’s Asset and ~~near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment~~Liability Committee (the “ALCO Committee”) evaluate securities in ~~the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.~~

~~Management evaluates securities for other-than-temporary impairment~~an unrealized loss position on at least on a quarterly basis, and more frequently when economic or market concerns warrant such ~~evaluation. Substantially all~~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 ~~unrealized~~above criteria is not 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, ~~on debt securities are related~~limited to

~~changes~~ the amount by which the fair value is less than the amortized cost basis. Any impairment not recognized through an allowance for credit losses is recognized in ~~interest rates and do not affect the expected cash flows~~other comprehensive income, net of ~~the issuer or underlying collateral. All unrealized losses are considered temporary because each security carries an acceptable investment grade and the~~tax, as a non credit-related impairment. The Company does not intend to sell these investment securities at an unrealized loss position at ~~September 30, 2017,~~March 31, 2021, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. ~~Therefore,~~Based on the results of management's review, at ~~September 30, 2017, these investments are not considered impaired on an other-than temporary basis.~~March 31, 2021, management determined that $101,000 was attributable to credit impairment and established the allowance for credit losses accordingly. The remaining $362,000 in unrealized loss was determined to be from factors other than credit.

The following table ~~illustrates certain information regarding the Company’s~~is a summary of our investment portfolio ~~with respect~~at the dates indicated:


	March 31, 2021				December 31, 2020
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. government sponsored agencies	$	12,138	$	12,394	$	17,161	$	17,504
State, county and municipal securities	60,140		62,985		63,286		66,778
Corporate debt securities	46,131		46,747		51,639		51,896
SBA pool securities	54,305		55,691		59,973		62,497
Mortgage-backed securities	654,015		681,835		748,521		784,204
Total debt securities	$	826,729	$	859,652	$	940,580	$	982,879

The amounts of securities available for sale in each category as of March 31, 2021 are shown in the following table according to ~~yields, sensitivities~~contractual maturity classifications: (i) one year or less; (ii) after one year through five years; (iii) after five years through ten years; and ~~expected cash flows~~(iv) after ten years:


	U.S. Government Sponsored Agencies				State, County and Municipal Securities				Corporate Debt Securities
(dollars in thousands)	Amount		Yield (1)		Amount		Yield (1)(2)		Amount		Yield (1)
One year or less	$	5,065	1.95	%	$	12,394	3.49	%	$	3,003	2.37	%
After one year through five years	7,329		1.93		19,045		3.77		10,799		4.41
After five years through ten years	—		—		20,325		3.84		31,263		5.31
After ten years	—		—		11,221		3.88		1,682		4.35
	$	12,394	1.94	%	$	62,985	3.76	%	$	46,747	4.87	%

	SBA Pool Securities				Mortgage-Backed Securities
(dollars in thousands)	Amount		Yield (1)		Amount		Yield (1)
One year or less	$	—	—	%	$	938	2.90	%
After one year through five years	13,071		2.23		99,423		2.74
After five years through ten years	10,134		2.28		184,302		2.71
After ten years	32,486		2.48		397,172		2.32
	$	55,691	2.38	%	$	681,835	2.48	%

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

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

(dollars in thousands) Amortized Cost
Fair
Value

Book
Yield

Modified
Duration

Estimated
Cash
Flows
12 Months
September 30, 2017
U.S. government sponsored agencies $ 1,000
$ 1,004
3.20% 0.19 $ 1,000
State, county and municipal securities 140,190
143,387
4.06% 4.82 14,048
Corporate debt securities 46,704
47,249
4.00% 5.34 3,000
Mortgage-backed securities 626,927
627,953
2.34% 3.91 102,846
Total debt securities $ 814,821
$ 819,593
2.73% 4.14 $ 120,894

December 31, 2016

U.S. government sponsored agencies $ 999
$ 1,020
3.20% 0.92 $ 1,000
State, county and municipal securities 149,899
152,035
3.73% 5.34 7,884
Corporate debt securities 32,375
32,172
2.94% 4.87 2,000
Mortgage-backed securities 641,362
637,508
2.38% 4.33 94,081
Total debt securities $ 824,635
$ 822,735
2.65% 4.53 $ 104,965

Loans and Allowance for ~~Loan~~Credit Losses

At ~~September 30, 2017,~~March 31, 2021, gross loans outstanding (including ~~purchased~~ loans ~~purchased loan pools,~~ and loans held for sale) were ~~$6.09~~$16.11 billion, ~~an increase~~up $460.7 million from ~~$5.37~~$15.65 billion reported at December 31, ~~2016.~~2020. Loans held for sale increased from ~~$105.9 million at December 31, 2016 to $137.4 million at September 30, 2017. Legacy loans (excluding purchased loans and purchased loan pools) increased $947.9 million, from $3.63~~$1.17 billion at December 31, ~~2016~~2020 to ~~$4.57~~$1.51 billion at ~~September 30, 2017, driven~~March 31, 2021 primarily bydue to strategic slowdown in mortgage deliveries in our mortgage division. Loans increased ~~growth in commercial, financial and agricultural, construction and development, residential real estate, and commercial real estate loan categories. Purchased loans decreased $152.1~~$118.9 million, or 0.82%, from ~~$1.07~~$14.48 billion at December 31, ~~2016~~2020 to ~~$917.1 million~~$14.60 billion at ~~September 30, 2017, due to paydowns~~March 31, 2021, driven primarily by organic growth net of ~~$155.0 million, transfers to other real estate owned of $4.3 million and charge-offs of $1.8 million, partially offset by accretion of $9.0 million. Purchased~~PPP loan pools decreased $103.1 million, from $568.3 million at December 31, 2016 to $465.2 million at September 30, 2017 due to payments on the portfolio of $95.5 million and premium amortization of $2.9 million during the first nine months of 2017.runoff.

The Company regularly monitors the composition of the loan portfolio to evaluate the adequacy of the allowance for ~~loan~~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 installment; (3) indirect automobile; (4) mortgage warehouse; (5) municipal; (6) premium finance; (7) construction and development related real estate; ~~(3)~~(8) commercial and farmland real estate; ~~(4)~~and (9) residential real ~~estate; and (5) consumer.~~estate. The Company’s management has strategically located its branches in select markets in ~~South~~Georgia, Alabama, Florida, North Carolina and ~~Southeast Georgia, North Florida, Southeast Alabama and throughout~~ 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 ~~allowance for loan losses.~~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.~~charged off.

The ~~allowance~~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 ~~loan~~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 ~~is a reserve established through charges to earnings~~are reflected in the ~~form of~~ACL through a ~~provision for loan losses. The provision for loan losses is based on management’s evaluation of~~charge to credit loss expense. When the ~~size and composition of the loan portfolio, the level of non-performing and past-due loans, historical trends of charged-off loans and recoveries, prevailing economic conditions and other~~

~~factors management~~Company deems appropriate. The Company’s management has established an allowance for loan losses which it believes is adequate for the probable incurred losses in the loan portfolio. Based on a credit evaluation of the loan portfolio, management presents a monthly review of the allowance for loan losses to the Company’s Board of Directors, which primarily focuses on risk by evaluating individual loans in certain risk categories. These categories have also been established by management and take the form of loan grades. By grading the loan portfolio in this manner the Company’s management is able to effectively evaluate the portfolio by risk, which management believes is the most effective way to analyze the loan portfolio and thus analyze the adequacy of the allowance for loan losses.

The allowance for loan losses is established by examining (1) the large classified loans, nonaccrual loans and loans considered impaired and evaluating them individually to determine the specific reserve allocation and (2) the remainder of the loan portfolio to allocateall or a portion of a financial asset to be uncollectible the ~~allowance based~~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 uses the DCF method, the vintage method, the PD×LGD method or a qualitative approach.

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 it can no longer develop reasonable and the economic conditions for the particular loan category. The Company also considers other factors such as changes in lending policies and procedures; changes in national, regional and/or local economic and business conditions; changes in the nature and volume of the loan portfolio; changes in the experience, ability and depth of either the market president or lending staff; changes in the volume and severity of past-due and classified loans; changes in the quality of the Company’s corporate loan review system; and other factors management deems appropriate.supportable forecasts.

At the end of the ~~third~~first quarter of ~~2017,~~2021, the ~~allowance for loan losses allocated to legacy~~ACL on loans totaled ~~$21.2~~$178.6 million, or ~~0.46%~~1.22% of ~~legacy~~ loans, compared with ~~$20.5~~$199.4 million, or ~~0.56%~~1.38% of ~~legacy~~ loans, at December 31, 2016. The decrease in the allowance for loan losses as a percentage of legacy loans reflects improvement in the credit risk of our portfolio, both from the mix of loan and collateral types and the credit quality of the loan portfolio.2020. Our ~~legacy~~ nonaccrual loans decreased from ~~$18.1~~$76.5 million at December 31, ~~2016~~2020 to ~~$15.3~~$71.2 million at ~~September 30, 2017.~~March 31, 2021. The decrease in nonaccrual loans is primarily attributable to collection activities and upgrades. For the first ~~nine~~three months of ~~2017,~~2021, our ~~legacy~~ net charge off ratio as a percentage of average ~~legacy~~ loans ~~increased~~decreased to ~~0.13%~~0.12%, compared with ~~0.10%~~0.14% for the first ~~nine~~three months of ~~2016.~~2020. The total provision for ~~loan~~credit losses for the first ~~nine~~three months of ~~2017 increased to $5.8~~2021 was negative $28.6 million, ~~compared with $2.4~~decreasing from $41.0 million recorded for the first ~~nine~~three months of ~~2016.~~2020. Our ratio of total nonperforming assets to total assets decreased from ~~0.94%~~0.48% at December 31, ~~2016~~2020 to ~~0.75%~~0.40% at ~~September 30, 2017.~~March 31, 2021.

The balance of the allowance for loan losses allocated to loans collectively evaluated for impairment increased 11.8%, or $2.1 million, during the first nine months of 2017, while the balance of loans collectively evaluated for impairment increased 14.3%, or $723.9 million, during the same period. A significant portion of the loan growth was concentrated in lower risk categories such as commercial premium finance loans and municipal loans which did not require as large of an allowance for loan losses as other categories of loans. In addition to the change of type of loan growth, we also experienced a decline in our historical loss rates across nearly all loan portfolios. We consider a four year loss rate on all loan categories and our charge off ratios have been declining over that period. We have adjusted the qualitative factors to account for the inherent risks in the portfolio that are not captured in the historical loss rates, such as weak commodity prices for agriculture products, growth rates of certain loan types and other factors management deems appropriate. As a percentage of all loans collectively evaluated for impairment, the allowance allocated to those loans declined 1 basis point from 0.35% at December 31, 2016 to 0.34% at September 30, 2017. The largest decrease was in the legacy construction and development real estate category, which decreased from 0.75% at December 31, 2016 to 0.58% at September 30, 2017. The reason for this decline is the positive trend in net losses within that category.

The balance of the allowance for loan losses allocated to loans individually evaluated for impairment decreased slightly by 0.2%, or $12,000, during the first nine months of 2017, while the balance of loans individually evaluated for impairment decreased 7.4%, or $4.5 million, during the same period. Although the total allowance for loan losses allocated to loans individually evaluated for impairment changed by only $12,000 from December 31, 2016 to September 30, 2017, the amount allocated for the legacy residential real estate category declined by $1.8 million, while the amount allocated for purchased loans increased by $1.6 million.

The following ~~tables present~~table presents an analysis of the allowance for ~~loan~~credit losses on loans, provision for credit losses on loans and net charge-offs as of and for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016:~~2020:


	Three Months Ended March 31,
(dollars in thousands)	2021		2020
Balance of allowance for credit losses on loans at beginning of period	$	199,422	$	38,189
Adjustment to allowance for adoption of ASU 2016-13	—		78,661
Provision charged to operating expense	(16,579)		37,047
Charge-offs:
Commercial, financial and agricultural	2,370		2,486
Consumer installment	1,448		1,142
Indirect automobile	829		1,231


Premium finance	1,343		831
Real estate – construction and development	26		—
Real estate – commercial and farmland	1,395		928
Real estate – residential	163		100
Total charge-offs	7,574		6,718

Recoveries:
Commercial, financial and agricultural	727		362
Consumer installment	356		321
Indirect automobile	700		344


Premium finance	1,122		684
Real estate – construction and development	167		342
Real estate – commercial and farmland	41		85
Real estate – residential	188		207
Total recoveries	3,301		2,345
Net charge-offs	4,273		4,373
Balance of allowance for credit losses on loans at end of period	$	178,570	$	149,524

Nine Months Ended
September 30,
(dollars in thousands) 2017 2016
Balance of allowance for loan losses at beginning of period $ 23,920
$ 21,062
Provision charged to operating expense 5,828
2,381
Charge-offs:

Commercial, financial and agricultural 1,896
1,273
Real estate – construction and development 95
324
Real estate – commercial and farmland 413
708
Real estate – residential 2,031
883
Consumer installment and Other 922
192
Purchased loans 1,472
1,261
Purchased loan pools —
—
Total charge-offs 6,829
4,641
Recoveries:

Commercial, financial and agricultural 699
279
Real estate – construction and development 244
474
Real estate – commercial and farmland 156
191
Real estate – residential 190
368
Consumer installment and Other 78
119
Purchased loans 1,680
2,730
Purchased loan pools —
—
Total recoveries 3,047
4,161
Net charge-offs 3,782
480
Balance of allowance for loan losses at end of period $ 25,966
$ 22,963

As of and for the
Nine Months Ended
September 30, 2017
(dollars in thousands)
Legacy
Loans

Purchased
Loans

Purchased
Loan
Pools
Total
Allowance for loan losses at end of period $ 21,227
$ 3,262
$ 1,477
$ 25,966
Net charge-offs (recoveries) for the period 3,990
(208 ) —
3,782
Loan balances:

End of period 4,574,678
917,126
465,218
5,957,022
Average for the period 4,018,597
982,033
513,750
5,514,380
Net charge-offs as a percentage of average loans 0.13 % (0.03 )% 0.00 % 0.09 %
Allowance for loan losses as a percentage of end of period loans 0.46 % 0.36 % 0.32 % 0.44 %

As of and for the
Nine Months Ended
September 30, 2016
(dollars in thousands)
Legacy
Loans

Purchased
Loans

Purchased
Loan
Pools
Total
Allowance for loan losses at end of period $ 19,433
$ 1,522
$ 2,008
$ 22,963
Net charge-offs (recoveries) for the period 1,949
(1,469 ) —
480
Loan balances:

End of period 3,091,039
1,129,381
624,886
4,845,306
Average for the period 2,642,498
1,147,821
629,118
4,419,437
Net charge-offs as a percentage of average loans 0.10 % (0.17 )% 0.00 % 0.01 %
Allowance for loan losses as a percentage of end of period loans 0.63 % 0.13 % 0.32 % 0.47 %

~~Purchased Assets~~

Loans that were acquired in transactions, including those that are covered by the loss-sharing agreements with the FDIC (“purchased loans”), totaled $917.1 million and $1.07 billion at September 30, 2017 and December 31, 2016, respectively. OREO that was acquired in transactions, including OREO that is covered by the loss-sharing agreements with the FDIC, totaled $9.9 million and $12.5 million, at September 30, 2017 and December 31, 2016, respectively.

The Bank initially recorded purchased loans at their fair values, taking into consideration certain credit quality, risk and liquidity marks. The Company believes its estimation of credit risk and its adjustments to the carrying balances of the acquired loans are adequate. If the Company determines that a loan or group of loans has deteriorated from its initial assessment of fair value, a reserve for loan losses will be established to account for that difference. If the Company determines that a loan or group of loans has improved from its initial assessment of fair value, then the increase in cash flows over those expected at the acquisition date is recognized as interest income prospectively. During the nine months ended September 30, 2017, the Company recorded for purchased loans a provision for loan loss of $745,000. During the nine months ended September 30, 2016, the Company recorded for purchased loans a reduction in provision for loan loss of $654,000 due to recoveries exceeding charge-offs for purchased loans.

~~Purchased loans are shown below according to loan type as of the end of the periods shown:~~

(dollars in thousands) September 30,
2017 December 31, 2016
Commercial, financial and agricultural $ 80,895
$ 96,537
Real estate – construction and development 68,583
81,368
Real estate – commercial and farmland 500,169
576,355
Real estate – residential 264,312
310,277
Consumer installment 3,167
4,654
$ 917,126
$ 1,069,191

~~Purchased Loan Pools~~


	As of and for the Three Months Ended
(dollars in thousands)	March 31, 2021			March 31, 2020
Allowance for credit losses on loans at end of period	$	178,570		$	149,524
Net charge-offs for the period	4,273			4,373
Loan balances:
End of period	14,599,805			13,094,106
Average for the period	14,453,975			12,712,997
Net charge-offs as a percentage of average loans (annualized)	0.12		%	0.14		%
Allowance for credit losses on loans as a percentage of end of period loans	1.22		%	1.14		%

Loans

Loans are stated at amortized cost. Balances within the ~~purchased loan pools at September 30, 2017 and December 31, 2016, respectively.~~major loans receivable categories are presented in the following table:


(dollars in thousands)	March 31, 2021		December 31, 2020
Commercial, financial and agricultural	$	1,611,029	$	1,627,477
Consumer installment	257,097		306,995
Indirect automobile	482,637		580,083
Mortgage warehouse	880,216		916,353
Municipal	659,228		659,403
Premium finance	706,379		687,841
Real estate – construction and development	1,533,234		1,606,710
Real estate – commercial and farmland	5,616,826		5,300,006
Real estate – residential	2,853,159		2,796,057
	$	14,599,805	$	14,480,925

Non-Performing Assets

Non-performing assets include nonaccrual loans, accruing loans contractually past due 90 days or more, repossessed personal property, and ~~other real estate owned.~~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 ~~impaired~~non-performing loans over $250,000 on a quarterly basis and recognizes losses when impairment is identified. A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract.basis. When a loan is placed on nonaccrual status, any interest previously accrued but not collected is reversed against current income.

Nonaccrual loans ~~excluding purchased loans,~~ totaled ~~$15.3~~$71.2 million at ~~September 30, 2017,~~March 31, 2021, a decrease of ~~15.4%~~$5.3 million, or 6.9%, from ~~$18.1 million reported at December 31, 2016. Nonaccrual purchased loans totaled $19.0 million at September 30, 2017, a decrease of 17.1%, compared with $23.0~~$76.5 million at December 31, ~~2016. At September 30, 2017, OREO, excluding purchased OREO,~~2020. Accruing loans delinquent 90 days or more totaled ~~$9.4~~$5.1 million at March 31, 2021, a decrease of $3.2 million, or 38.8%, compared with ~~$10.9~~$8.3 million at December 31, ~~2016. Purchased~~2020. At March 31, 2021, OREO totaled ~~$9.9~~$8.8 million, ~~at September 30, 2017,~~a decrease of $3.0 million, or 25.6%, compared with ~~$12.5~~$11.9 million at December 31, ~~2016.~~2020. Management regularly assesses the valuation of OREO through periodic reappraisal and through inquiries received in the marketing process. At the end of the ~~third~~first quarter of ~~2017,~~2021, total non-performing assets ~~decreased to 0.75%~~as a percent of total assets decreased to 0.40% compared with ~~0.94%~~0.48% at December 31, ~~2016.~~2020.

Non-performing assets at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 were as follows:


(dollars in thousands)	March 31, 2021		December 31, 2020
Nonaccrual loans	$	71,189	$	76,457
Accruing loans delinquent 90 days or more	5,097		8,326
Repossessed assets	840		544
Other real estate owned	8,841		11,880
Total non-performing assets	$	85,967	$	97,207

(dollars in thousands) September 30,
2017 December 31, 2016
Nonaccrual loans, excluding purchased loans $ 15,325
$ 18,114
Nonaccrual purchased loans 19,049
22,966
Nonaccrual purchased loan pools 915
—
Accruing loans delinquent 90 days or more, excluding purchased loans 2,941
—
Accruing purchased loans delinquent 90 days or more —
—
Foreclosed assets, excluding purchased assets 9,391
10,874
Purchased other real estate owned 9,946
12,540
Total non-performing assets $ 57,567
$ 64,494

Troubled Debt Restructurings

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession.

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the Company had a balance of ~~$14.2~~$87.1 million and ~~$18.2~~$85.0 million, respectively, in troubled debt ~~restructurings, excluding purchased loans.~~restructurings. These totals do not include COVID-19 loan modifications accounted for under Section 4013 of the CARES Act. Further information on these loans is set forth under the heading "COVID-19 Deferrals" below. The following table presents the amount of troubled debt restructurings by loan class ~~excluding purchased loans,~~ classified separately as accrual and nonaccrual at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~ 2020:


March 31, 2021	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	10	$	930	12	$	854
Consumer installment	8	27		22	53
Indirect automobile	385	1,931		47	321



Real estate – construction and development	4	501		5	706
Real estate – commercial and farmland	27	43,398		10	2,233
Real estate – residential	248	33,324		36	2,818
Total	682	$	80,111	132	$	6,985

September 30, 2017 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 4 $ 44
13 $ 129
Real estate – construction and development 7 424
2 34
Real estate – commercial and farmland 16 4,769
5 210
Real estate – residential 78 7,209
16 1,212
Consumer installment 4 6
36 130
Total 109 $ 12,452
72 $ 1,715


December 31, 2020	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	9	$	521	11	$	849
Consumer installment	10	32		20	56
Indirect automobile	437	2,277		51	461



Real estate – construction and development	4	506		5	707
Real estate – commercial and farmland	28	36,707		7	1,401
Real estate – residential	264	38,800		34	2,671
Total	752	$	78,843	128	$	6,145

December 31, 2016 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 4 $ 47
15 $ 114
Real estate – construction and development 8 686
2 34
Real estate – commercial and farmland 16 4,119
5 2,970
Real estate – residential 82 9,340
15 739
Consumer installment 7 17
32 130
Total 117 $ 14,209
69 $ 3,987

The following table presents the amount of troubled debt restructurings by loan class ~~excluding purchased loans,~~ classified separately as those currently paying under restructured terms and those that have defaulted (defined as 30 days past due) under restructured terms at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~2020:


March 31, 2021	Loans Currently Paying Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	13	$	1,604	9	$	179
Consumer installment	8	24		22	56
Indirect automobile	361	1,809		71	443



Real estate – construction and development	4	501		5	706
Real estate – commercial and farmland	30	39,051		7	6,580
Real estate – residential	246	31,225		38	4,918
Total	662	$	74,214	152	$	12,882


December 31, 2020	Loans Currently Paying Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	11	$	532	9	$	839
Consumer installment	12	33		18	55
Indirect automobile	411	2,138		77	600



Real estate – construction and development	5	507		4	706
Real estate – commercial and farmland	29	36,512		6	1,595
Real estate – residential	249	35,348		49	6,123
Total	717	$	75,070	163	$	9,918

September 30, 2017
Loans Currently Paying
Under Restructured Terms
Loans that have Defaulted Under Restructured Terms
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 8 $ 56
9 $ 117
Real estate – construction and development 6 399
3 59
Real estate – commercial and farmland 17 4,778
4 201
Real estate – residential 80 7,425
14 996
Consumer installment 25 74
15 62
Total 136 $ 12,732
45 $ 1,435

December 31, 2016 Loans Currently Paying
Under Restructured Terms Loans that have Defaulted Under Restructured Terms
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 12 $ 82
7 $ 79
Real estate – construction and development 8 686
2 34
Real estate – commercial and farmland 16 4,119
5 2,970
Real estate – residential 84 9,248
13 831
Consumer installment 25 76
14 71
Total 145 $ 14,211
41 $ 3,985

The following table presents the amount of troubled debt restructurings ~~excluding purchased loans,~~ by types of concessions made, classified separately as accrual and nonaccrual at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~ 2020:


March 31, 2021	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forgiveness of interest	1	$	72	—	$	—
Forbearance of interest	15	1,162		12	2,042

Forbearance of principal	503	60,940		66	3,095
Forbearance of principal, extended amortization	—	—		1	188
Rate reduction only	62	8,670		6	653
Rate reduction, maturity extension	—	—		1	4
Rate reduction, forbearance of interest	40	3,150		8	386
Rate reduction, forbearance of principal	19	2,579		30	215
Rate reduction, forgiveness of interest	42	3,538		8	402

Total	682	$	80,111	132	$	6,985

September 30, 2017 Accruing Loans Non-Accruing Loans
Type of Concession #
Balance
(in thousands)
#
Balance
(in thousands)
Forbearance of interest 12 $ 2,622
4 $ 172
Forgiveness of principal 3 1,256
— —
Forbearance of principal 5 75
5 644
Rate reduction only 13 1,580
1 29
Rate reduction, forbearance of interest 33 2,431
20 491
Rate reduction, forbearance of principal 7 1,465
35 249
Rate reduction, forgiveness of interest 36 3,023
3 119
Rate reduction, forgiveness of principal — —
4 11
Total 109 $ 12,452
72 $ 1,715


December 31, 2020	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forgiveness of interest	1	$	73	—	$	—
Forbearance of interest	19	2,255		7	1,044

Forbearance of principal	563	58,131		72	3,372
Forbearance of principal, extended amortization	—	—		1	204
Rate reduction only	66	8,893		4	525
Rate reduction, maturity extension	—	—		1	5
Rate reduction, forbearance of interest	41	3,472		9	389
Rate reduction, forbearance of principal	21	2,609		25	193
Rate reduction, forgiveness of interest	41	3,410		8	412
Rate reduction, forgiveness of principal	—	—		1	1
Total	752	$	78,843	128	$	6,145

December 31, 2016 Accruing Loans Non-Accruing Loans
Type of Concession #
Balance
(in thousands)
#
Balance
(in thousands)
Forbearance of interest 11 $ 1,685
5 $ 146
Forgiveness of principal 3 1,303
— —
Forbearance of principal 8 2,210
9 315
Rate reduction only 12 1,573
1 29
Rate reduction, forbearance of interest 38 2,618
21 1,647
Rate reduction, forbearance of principal 8 1,734
29 1,506
Rate reduction, forgiveness of interest 37 3,086
3 341
Rate reduction, forgiveness of principal — —
1 3
Total 117 $ 14,209
69 $ 3,987

The following table presents the amount of troubled debt restructurings, excluding purchased loans, by collateral types, classified separately as accrual and nonaccrual at September 30, 2017 and December 31, 2016:

September 30, 2017 Accruing Loans Non-Accruing Loans
Collateral Type #
Balance
(in thousands)
#
Balance
(in thousands)
Warehouse 3 $ 445
1 $ 80
Raw land 9 723
2 34
Hotel and motel 3 1,411
— —
Office 4 667
— —
Retail, including strip centers 5 2,189
3 85
1-4 family residential 78 7,002
18 1,259
Automobile/equipment/CD 6 13
47 255
Unsecured 1 2
1 2
Total 109 $ 12,452
72 $ 1,715

December 31, 2016 Accruing Loans Non-Accruing Loans
Collateral Type #
Balance
(in thousands)
#
Balance
(in thousands)
Warehouse 5 $ 763
— $ —
Raw land 9 742
2 34
Apartments — —
3 1,505
Hotel and motel 3 1,525
— —
Office 3 477
— —
Retail, including strip centers 4 1,298
— —
1-4 family residential 82 9,340
17 746
Church — —
2 1,465
Automobile/equipment/CD 10 61
44 233
Unsecured 1 3
1 4
Total 117 $ 14,209
69 $ 3,987

As of September 30, 2017 and December 31, 2016, the Company had a balance of $26.0 million and $28.1 million, respectively, in troubled debt restructurings included in purchased loans. The following table presents the amount of troubled debt restructurings by loan class of purchased loans, classified separately as accrual and nonaccrual at September 30, 2017 and December 31, 2016:

The following table presents the amount of troubled debt restructurings by loan class of purchased loans, classified separately as those currently paying under restructured terms and those that have defaulted (defined as 30 days past due) under restructured terms at September 30, 2017 and December 31, 2016:

September 30, 2017
Loans Currently Paying
Under Restructured Terms
Loans that have Defaulted Under Restructured Terms
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 1 $ 12
2 $ 6
Real estate – construction and development 8 1,365
1 6
Real estate – commercial and farmland 21 8,197
5 1,945
Real estate – residential 127 13,340
17 1,162
Consumer installment 1 3
1 3
Total 158 $ 22,917
26 $ 3,122

December 31, 2016 Loans Currently Paying
Under Restructured Terms Loans that have Defaulted Under Restructured Terms
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 3 $ 16
2 $ 76
Real estate – construction and development 8 1,378
1 9
Real estate – commercial and farmland 25 10,862
— —
Real estate – residential 126 13,484
30 2,306
Consumer installment 4 11
— —
Total 166 $ 25,751
33 $ 2,391

The following table presents the amount of troubled debt restructurings included in purchased loans, by types of concessions made, classified separately as accrual and nonaccrual at September 30, 2017 and December 31, 2016:

September 30, 2017 Accruing Loans Non-Accruing Loans
Type of Concession #
Balance
(in thousands)
#
Balance
(in thousands)
Forbearance of interest 4 $ 189
9 $ 1,772
Forgiveness of principal — —
1 63
Forbearance of principal 6 1,934
5 1,588
Forbearance of principal, extended amortization 2 375
1 298
Rate reduction only 72 11,607
16 1,465
Rate reduction, forbearance of interest 19 1,913
10 454
Rate reduction, forbearance of principal 10 2,211
5 194
Rate reduction, forgiveness of interest 24 1,976
— —
Total 137 $ 20,205
47 $ 5,834

December 31, 2016 Accruing Loans Non-Accruing Loans
Type of Concession #
Balance
(in thousands)
#
Balance
(in thousands)
Forbearance of interest 12 $ 3,553
4 $ 207
Forbearance of principal 7 2,003
5 1,528
Forbearance of principal, extended amortization 1 78
1 323
Rate reduction only 78 12,710
13 1,385
Rate reduction, forbearance of interest 20 1,387
19 632
Rate reduction, forbearance of principal 11 1,617
3 231
Rate reduction, forgiveness of interest 24 2,195
1 294
Total 153 $ 23,543
46 $ 4,600

~~The following table presents the amount of troubled debt restructurings included in purchased loans, by~~ collateral types, classified separately as accrual and nonaccrual at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~ 2020:


March 31, 2021	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	4	$	242	2	$	304
Raw land	5	4,591		7	1,131
Hotel and motel	5	27,851		—	—
Office	6	1,261		—	—
Retail, including strip centers	9	7,681		3	857
1-4 family residential	251	33,454		37	3,304
Church	1	2,180		1	161

Automobile/equipment/CD	401	2,851		82	1,228


Total	682	$	80,111	132	$	6,985


December 31, 2020	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	4	$	248	2	$	305
Raw land	5	4,611		7	1,135

Hotel and motel	4	22,372		—	—
Office	6	1,281		—	—
Retail, including strip centers	13	8,627		—	—
1-4 family residential	266	38,913		35	3,170
Church	—	—		1	166
Automobile/equipment/CD	454	2,791		82	1,368

Unsecured	—	—		1	1
Total	752	$	78,843	128	$	6,145

September 30, 2017 Accruing Loans Non-Accruing Loans
Collateral Type #
Balance
(in thousands)
#
Balance
(in thousands)
Warehouse 2 $ 369
— $ —
Raw land 3 1,045
7 846
Hotel and motel 1 151
1 497
Office 2 470
2 505
Retail, including strip centers 8 5,074
1 169
1-4 family residential 121 13,096
28 2,356
Church — —
2 1,390
Automobile/equipment/CD — —
6 71
Total 137 $ 20,205
47 $ 5,834

December 31, 2016 Accruing Loans Non-Accruing Loans
Collateral Type #
Balance
(in thousands)
#
Balance
(in thousands)
Warehouse 4 $ 1,532
— $ —
Raw land 7 1,919
4 86
Hotel and motel 1 154
1 558
Office 3 967
— —
Retail, including strip centers 7 4,489
1 197
1-4 family residential 127 14,470
33 2,318
Church — —
1 1,298
Automobile/equipment/CD 4 12
6 143
Total 153 $ 23,543
46 $ 4,600
COVID-19 Deferrals

In response to the COVID-19 pandemic, the Company offered affected borrowers payment relief under its Disaster Relief Program. These modifications primarily consisted of short-term payment deferrals or interest-only periods to assist customers. The Company has begun providing payment modifications to certain borrowers in economically sensitive industries of various terms up to nine months. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not deemed to be troubled debt restructurings. As of March 31, 2021, $235.4 million in loans remained in payment deferral under the COVID-19 pandemic Disaster Relief Program compared with $332.8 million at December 31, 2020.

The table below presents short-term deferrals related to the COVID-19 pandemic that were not considered TDRs as of March 31, 2021 and December 31, 2020.


	March 31, 2021				December 31, 2020
(dollars in thousands	COVID-19 Deferrals		Deferrals as a % of total loans		COVID-19 Deferrals		Deferrals as a % of total loans
Commercial, financial and agricultural	$	4,460	0.3	%	$	12,471	0.8	%
Consumer installment	569		0.2	%	1,418		0.5	%
Indirect automobile	3,536		0.7	%	8,936		1.5	%



Real estate – construction and development	418		—	%	11,049		0.7	%
Real estate – commercial and farmland	152,337		2.7	%	179,183		3.4	%
Real estate – residential	74,101		2.6	%	119,722		4.3	%
	$	235,421	1.6	%	$	332,779	2.3	%

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 commercial real estate (“CRE”) loans as loans secured by raw land, land development and construction (including ~~1-4~~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~~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~~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 bank’s total risk-based capital; 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 total risk-based capital.

(1)total loans for construction, land development, and other land, net of owner-occupied loans, represent 100% or more of a bank’s total risk-based capital; 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 total risk-based capital.

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, 2017,~~March 31, 2021, 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.~~

(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, 2017~~March 31, 2021 and December 31, ~~2016.~~2020. The loan categories and concentrations below are based on Federal Reserve Call ~~codes and include purchased loans:~~ codes:


	March 31, 2021			December 31, 2020
(dollars in thousands)	Balance		% of Total Loans	Balance		% of Total Loans
Construction and development loans	$	1,533,235	11%	$	1,606,710	11%
Multi-family loans	467,621		3%	347,951		2%
Nonfarm non-residential loans (excluding owner-occupied)	3,449,882		24%	3,260,389		23%
Total CRE Loans (excluding owner-occupied)	5,450,738		37%	5,215,050		36%
All other loan types	9,149,067		63%	9,265,875		64%
Total Loans	$	14,599,805	100%	$	14,480,925	100%

September 30,
2017 December 31,
2016
(dollars in thousands) Balance
% of Total
Loans
Balance
% of Total
Loans
Construction and development loans $ 618,772
10% $ 444,412
8%
Multi-family loans 160,577
3% 130,723
3%
Nonfarm non-residential loans (excluding owner occupied) 1,012,661
17% 985,496
19%
Total CRE Loans (excluding owner occupied)
1,792,010
30% 1,560,631
30%
All other loan types 4,165,012
70% 3,703,695
70%
Total Loans $ 5,957,022
100% $ 5,264,326
100%

The following table outlines the percentage of construction and development loans and total CRE loans, net of ~~owner occupied~~owner-occupied loans, to the Bank’s total risk-based capital, and the Company’s internal concentration limits as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016:~~ 2020:


	Internal Limit	Actual
		March 31, 2021	December 31, 2020
Construction and development loans	100%	68%	74%
Total CRE loans (excluding owner-occupied)	300%	240%	241%

Internal
Limit
Actual
September 30,
2017 December 31,
2016
Construction and development 100% 76% 72%
Commercial real estate 300% 220% 253%

Short-Term Investments

The Company’s short-term investments are comprised of federal funds sold and interest-bearing deposits in banks. At ~~September 30, 2017,~~March 31, 2021, the Company’s short-term investments were ~~$112.8 million,~~$2.53 billion, compared with ~~$71.2 million~~$1.91 billion at December 31, ~~2016.~~2020. At ~~September 30, 2017,~~March 31, 2021, the Company ~~did not have any~~had $20.0 million in federal funds sold and ~~all $112.8 million~~$2.51 billion was in interest-bearing deposit balances at correspondent banks and the Federal Reserve Bank of Atlanta.

Derivative Instruments and Hedging Activities

The Company has a cash flow hedge that matures September 15, 2020 with a notional amount of $37.1 million at September 30, 2017 and December 31, 2016 for the purpose of converting the variable rate on certain junior subordinated debentures to a fixed rate of 4.11%. The fair value of this instrument was a liability of approximately $723,000 and $978,000 at September 30, 2017 and December 31, 2016, respectively.

The Company has fair value hedges with a combined notional amount of $22.7 million at September 30, 2017 for the purpose of hedging the change in fair value of certain fixed rate loans. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $204,000 and a liability of approximately $96,000 at September 30, 2017. At December 31, 2016, the Company had fair value hedges with a combined notional amount of $20.2 million. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $229,000 and a liability of approximately $96,000 at December 31, 2016.

~~The Company also~~ has forward contracts and IRLCs to 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 $3.8~~$62.9 million and ~~$4.3~~$51.8 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively, and a liability of ~~approximately $237,000~~$0 and $0$16.4 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively.

No material hedge ineffectiveness from cash flow or fair value hedges was recognized in the statement of operations. All components of each derivative’s gain or loss are included in the assessment of hedge effectiveness.

Capital

Common Stock Repurchase Program

On ~~January 18, 2017,~~September 19, 2019, the Company ~~issued 128,572 unregistered shares~~announced that its Board of Directors authorized the Company to repurchase up to $100.0 million of its outstanding common stock ~~to William J. Villari in exchange for 4.99%~~through October 31, 2020. On October 22, 2020, the Company announced that its Board of Directors approved the extension of the ~~outstanding~~share repurchase program through October 31, 2021. 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 ~~common stock~~repurchases will be based on a variety of ~~USPF. A registration statement was filed with the Securities~~factors, including share acquisition price, regulatory limitations and ~~Exchange Commission on February 13, 2017 to register the resale or~~ other ~~disposition of these shares.~~market and economic factors. The ~~issuance of the 128,572 common shares was valued at $45.45 per share, resulting in an increase in shareholders’ equity of $5.8 million.~~

~~On March 6, 2017,~~program does not require the Company ~~completed an underwritten public offering~~to repurchase any specific number of ~~2,012,500~~shares. As of March 31, 2021, $14.3 million, or 358,664 shares of the ~~Company’s~~Company's common stock, ~~at a price to~~had been repurchased under the public of $46.50 per share. The Company received net proceeds from the issuance of approximately $88.7 million, after deducting $4.9 million in underwriting discounts and commissions and other issuance costs.program.

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

Under the regulatory capital ~~adequacy requirements imposed~~frameworks adopted by the Federal Reserve ~~Board (the “FRB”)~~ and the ~~GDBF,~~FDIC, the Company and the Bank ~~is subject to capital adequacy requirements imposed by the FDIC and the GDBF.~~

The FRB, the FDIC and the GDBF have adopted risk-based capital requirements for assessing bank holding company and bank capital adequacy. These standards define and establish minimum capital requirements in relation to assets and off-balance sheet exposure, adjusted for credit risk. The risk-based capital standards currently in effect are designed to make regulatory capital requirements more sensitive to differences in risk profiles among bank holding companies and banks and to account for off-balance sheet exposure.

~~In July 2013, the Federal Reserve published final rules for the adoption of the Basel III regulatory capital framework (the "Basel III Capital Rules"). The Basel III Capital Rules defined~~must each maintain a ~~new capital measure called "Common Equity Tier 1" ("CET1"), established that~~common equity Tier 1 capital ~~consist~~to total risk-weighted assets ratio of ~~Common Equity~~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 ~~"Additional Tier 1 Capital" instruments meeting specified requirements, defined Common Equity Tier 1, established~~ a ~~capital conservation buffer and expanded the scope~~leverage ratio of the adjustments as compared with existing regulations. The capital conservation buffer is being increased by 0.625% per year until reaching 2.50% by 2019. The capital conservation buffer is being phased in from 0.0% for 2015 to, 0.625% for 2016, 1.25% for 2017, 1.875% for 2018, and 2.50% for 2019. The Basel III Capital Rules became effective for us on January 1, 2015 with certain transition provisions fully phased in on January 1, 2019.

~~The regulatory capital standards are defined by the following key measurements:~~

~~a) The “Tier 1 Leverage Ratio” is defined as~~ Tier 1 capital to average ~~assets. To be considered “adequately capitalized” under this measurement, a bank must~~total consolidated assets of at least 4%. The Company and the Bank are also required to maintain a ~~Tier 1 leverage ratio greater than or equal to 4.00%. For a bank to be considered “well capitalized,” it must maintain a Tier 1 leverage ratio greater than or equal to 5.00%.~~capital

b) The “CET1 Ratio” is defined as Common equity tier 1 capital to total risk weighted assets. To be considered “adequately capitalized” under this measurement, a bank must maintain a CET1 ratio greater than or equal to 4.50% (5.75% including the 1.25% capital conservation buffer ~~for 2017; 5.125% including the 0.625% capital conservation buffer for 2016). For a bank to be considered “well capitalized,” it must maintain a CET1 ratio greater than or equal to 6.50%.~~

~~c) The “Tier 1 Capital Ratio” is defined as~~of common equity Tier 1 capital of at least 2.5% of risk-weighted assets in addition to ~~total risk weighted assets. To be considered “adequately capitalized”~~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 ~~this measurement, a bank must maintain a Tier 1 capital ratio greater than or equal to 6.00% (7.25% including~~ the 1.25% capital conservation buffer for 2017; 6.625% including the 0.625% capital conservation buffer for 2016). For a bank to be considered “well capitalized,” it must maintain a Tier 1 capital ratio greater than or equal to 8.00%.interim final rule effective March 31, 2020.

d) The “Total Capital Ratio” is defined as total capital to total risk weighted assets. To be considered “adequately capitalized” under this measurement, a bank must maintain a total capital ratio greater than or equal to 8.00% (9.25% including the 1.25% capital conservation buffer for 2017; 8.625% including the 0.625% capital conservation buffer for 2016). For a bank to be considered “well capitalized,” it must maintain a total capital ratio greater than or equal to 10.00%.

As of ~~September 30, 2017,~~March 31, 2021, 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, 2017~~March 31, 2021 and December 31, ~~2016.~~ 2020:


	March 31, 2021	December 31, 2020
Tier 1 Leverage Ratio (tier 1 capital to average assets)
Consolidated	9.18%	8.99%
Ameris Bank	10.58%	10.39%
CET1 Ratio (common equity tier 1 capital to risk weighted assets)
Consolidated	11.45%	11.14%
Ameris Bank	13.20%	12.87%
Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)
Consolidated	11.45%	11.14%
Ameris Bank	13.20%	12.87%
Total Capital Ratio (total capital to risk weighted assets)
Consolidated	15.27%	15.27%
Ameris Bank	14.31%	14.19%

September 30,
2017 December 31, 2016
Tier 1 Leverage Ratio (tier 1 capital to average assets)

Consolidated 9.94% 8.68%
Ameris Bank 10.83% 9.27%
CET1 Ratio (common equity tier 1 capital to risk weighted assets)

Consolidated 10.35% 8.32%
Ameris Bank 12.69% 10.35%
Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)

Consolidated 11.65% 9.69%
Ameris Bank 12.69% 10.35%
Total Capital Ratio (total capital to risk weighted assets)

Consolidated 13.25% 10.11%
Ameris Bank 13.10% 10.77%

Interest Rate Sensitivity and Liquidity

The Company’s primary market risk exposures are credit risk, interest rate risk, and to a lesser degree, liquidity risk. The Bank operates under an Asset Liability Management Policy approved by the Company’s Board of Directors and the ~~Asset and Liability Committee (the “ALCO Committee”).~~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 and two outside members of the Company’s Board of Directors.~~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 analysisin 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, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the net carrying value of the Company’s other borrowings was ~~$808.6~~$425.2 million and ~~$492.3~~$425.2 million, respectively. ~~On March 13, 2017, the Company completed the public offering and sale of $75.0 million~~

in aggregate principal amount of its 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027. These subordinated notes are included in other borrowings at September 30, 2017 at a net carrying value of $73.8 million. See Note 8 for additional details on the subordinated notes.

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


	March 31, 2021	December 31, 2020	September 30, 2020	June 30, 2020	March 31, 2020
Investment securities available for sale to total deposits	4.81%	5.80%	6.96%	7.95%	9.77%
Loans (net of unearned income) to total deposits	81.67%	85.39%	93.03%	93.03%	94.58%
Interest-earning assets to total assets	91.15%	90.88%	90.66%	90.51%	89.57%
Interest-bearing deposits to total deposits	61.93%	63.73%	63.21%	64.11%	69.47%

September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016
Investment securities available for sale to total deposits 13.90% 14.13% 14.72% 14.76% 15.80%
Loans (net of unearned income) to total deposits 101.04% 97.88% 94.31% 94.42% 91.32%
Interest-earning assets to total assets 92.48% 92.14% 91.98% 91.32% 91.25%
Interest-bearing deposits to total deposits 70.86% 71.12% 70.67% 71.78% 70.54%

The liquidity resources of the Company are monitored continuously 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, 2017~~March 31, 2021 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’s hedging activities are limited to cash flow hedges and ~~fair value hedges and~~ are part of the Company’s program to manage interest rate sensitivity.

At September 30, 2017, the Company had one cash flow hedge with a notional amount of $37.1 million for the purpose of converting the variable rate on certain junior subordinated debentures to a fixed rate. The LIBOR rate swap exchanges fixed rate payments of 4.11% for floating rate payments based on the three-month LIBOR rate and matures September 2020. The fair value of this instrument was a liability of approximately $723,000 and $978,000 at September 30, 2017 and December 31, 2016, respectively.

At September 30, 2017, the Company had fair value hedges with a combined notional amount of $22.7 million for the purpose of hedging the change in fair value of certain fixed rate loans. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $204,000 and a liability of approximately $96,000 at September 30, 2017. At December 31, 2016, the Company had fair value hedges with a combined notional amount of $20.2 million. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $229,000 and a liability of approximately $96,000 at December 31, 2016.

The Company also had forward contracts and IRLCs to 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 ~~$3.8~~$62.9 million and ~~$4.3~~$51.8 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively, and a liability of ~~$237,000~~$0 and $0$16.4 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, 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~~basis.

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 ~~are~~were effective.

During the quarter ended ~~September 30, 2017,~~March 31, 2021, 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.

From time to time, as a normal incident of the nature and kind of business in which the Company is engaged, various claims or charges are asserted against the Company or the Bank. In the ordinary course of business, the Company and the Bank are also subject to regulatory examinations, information gathering requests, inquiries and investigations. Other than ordinary routine litigation incidental to the Company’s business, management believes based on its current knowledge and after consultation with legal counsel that there are no pending or threatenedDisclosure concerning legal proceedings ~~that will, individually or~~can be found in Part I - "Financial Information, Item 1. Financial Statements, Notes to Unaudited Consolidated Financial Statements, Note 9 – Commitments and Contingencies" under the ~~aggregate, have a material adverse effect on the consolidated results of operations or financial condition of the Company.~~caption, "Litigation and Regulatory Contingencies," which is incorporated herein by reference.

Item 1A. Risk Factors.

There have been no material changes to the risk factors disclosed in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.

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

~~None.~~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 March 31, 2021.


Period	Total Number of Shares Purchased(2)	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)
January 1, 2021 through January 31, 2021	317	$	38.07	—	$	85,723,412
February 1, 2021 through February 28, 2021	10,971	$	46.88	—	$	85,723,412
March 1, 2021 through March 31, 2021	17,150	$	54.18	—	$	85,723,412
Total	28,438	$	51.19	—	$	85,723,412

(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. On October 22, 2020, the Company announced that its Board of Directors approved the extension of the share repurchase program through October 31, 2021. 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 March 31, 2021, $14.3 million, or 358,664 shares of the Company's common stock, had been repurchased under the new program.

(2)The shares purchased from January 1, 2021 through March 31, 2021 consist of shares of common stock surrendered to the Company in payment of the income tax withholding obligations relating to the vesting of shares of restricted stock.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.



Exhibit Number		Description

3.1		Articles of Incorporation of Ameris Bancorp, as amended (incorporated by reference to Exhibit 2.1 to Ameris Bancorp’s Regulation A Offering Statement on Form 1-A filed with the SEC on August 14, 1987).

3.2		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.7 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on March 26, 1999).

3.3		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.9 to Ameris Bancorp’s Annual Report on Form 10-K filed with the SEC on March 31, 2003).

3.4		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on December 1, 2005).

3.5		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on November 21, 2008).

3.6		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on June 1, 2011).

3.7		Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.7 to Ameris Bancorp's Quarterly Report on Form 10-Q filed with the SEC on August 10, 2020).

3.8		Bylaws of Ameris Bancorp, as amended and restated ~~effective July 18, 2017~~through June 11, 2020 (incorporated by reference to Exhibit ~~3.1~~3.8 to Ameris ~~Bancorp’s Current~~Bancorp's Quarterly Report on Form ~~8-K~~10-Q filed with the SEC on ~~July 21, 2017)~~August 10, 2020).

10.1*31.1		Severance Protection and Restrictive Covenants Agreement by and among Ameris Bancorp, Ameris Bank and William D. McKendry dated as of October 3, 2017 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp's Current Report on Form 8-K filed with the SEC on October 6, 2017).

~~10.2~~	Third Amendment to Loan Agreement dated October 20, 2017 by and between Ameris Bancorp and NexBank SSB (incorporated by reference to Exhibit 10.1 to Ameris Bancorp's Current Report on Form 8-K filed with the SEC on October 23, 2017).

~~10.3~~	Third Amended and Restated Revolving Promissory Note dated as of September 26, 2017 issued by Ameris Bancorp to NexBank SSB (incorporated by reference to Exhibit 10.2 to Ameris Bancorp's Current Report on Form 8-K filed with the SEC on October 23, 2017). .

~~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~~101.INS		~~The following financial statements from Ameris Bancorp’s Form 10-Q for~~XBRL Instance Document - the ~~quarter ended September 30, 2017, formatted as~~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 ~~files~~file does not appear in the Interactive Data File because its XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income and Comprehensive Income; (iii) Consolidated Statements of Shareholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements.

* Management contract or a compensatory plan or arrangement.tags are embedded within the Inline XBRL document.

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 9, 2017~~May 7, 2021			AMERIS BANCORP

			/s/ ~~Dennis J. Zember Jr.~~Nicole S. Stokes
			~~Dennis J. Zember Jr.,~~Nicole S. Stokes
			~~Executive Vice President,~~ Chief Financial Officer ~~and Chief Operating Officer~~ (duly authorized signatory and principal accounting and financial officer)



	September 30, 2017			December 31, 2016
Assets
Cash and due from banks	$	131,071		$	127,164
Federal funds sold and interest-bearing deposits in banks	112,844			71,221
Investment securities available for sale, at fair value	819,593			822,735
Other investments	47,977			29,464
Loans held for sale, at fair value	137,392			105,924

Loans	4,574,678			3,626,821
Purchased loans	917,126			1,069,191
Purchased loan pools	465,218			568,314
Loans, net of unearned income	5,957,022			5,264,326
Allowance for loan losses	(25,966		)	(23,920		)
Loans, net	5,931,056			5,240,406

Other real estate owned, net	9,391			10,874
Purchased other real estate owned, net	9,946			12,540
Total other real estate owned, net	19,337			23,414

Premises and equipment, net	119,458			121,217
Goodwill	125,532			125,532
Other intangible assets, net	14,437			17,428
Deferred income taxes, net	39,365			40,776
Cash value of bank owned life insurance	79,241			78,053
Other assets	72,517			88,697
Total assets	$	7,649,820		$	6,892,031

Liabilities
Deposits:
Noninterest-bearing	$	1,718,022		$	1,573,389
Interest-bearing	4,177,482			4,001,774
Total deposits	5,895,504			5,575,163
Securities sold under agreements to repurchase	14,156			53,505
Other borrowings	808,572			492,321
Subordinated deferrable interest debentures	85,220			84,228
Other liabilities	44,447			40,377
Total liabilities	6,847,899			6,245,594

Commitments and Contingencies (Note 9)

Shareholders’ Equity
Preferred stock, stated value $1,000 (5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2017 and December 31, 2016)	—			—
Common stock, par value $1 (100,000,000 shares authorized; 38,705,910 and 36,377,807 shares issued at September 30, 2017 and December 31, 2016, respectively)	38,706			36,378
Capital surplus	506,779			410,276
Retained earnings	267,694			214,454
Accumulated other comprehensive income (loss), net of tax	3,241			(1,058		)
Treasury stock, at cost (1,474,861 shares and 1,456,333 shares at September 30, 2017 and December 31, 2016, respectively)	(14,499		)	(13,613		)
Total shareholders’ equity	801,921			646,437
Total liabilities and shareholders’ equity	$	7,649,820		$	6,892,031



	Nine Months Ended September 30, 2017					Nine Months Ended September 30, 2016
	Shares		Amount			Shares		Amount
Common Stock
Balance at beginning of period	36,377,807		$	36,378		33,625,162		$	33,625
Issuance of common stock	2,141,072		2,141			2,549,469		2,549
Issuance of restricted shares	84,147		84			125,581		126
Cancellation of restricted shares	(472	)	—			(7,085	)	(7		)
Proceeds from exercise of stock options	103,356		103			54,510		55
Issued at end of period	38,705,910		$	38,706		36,347,637		$	36,348

Capital Surplus
Balance at beginning of period			$	410,276				$	337,349
Share-based compensation			2,419					1,586
Issuance of common shares, net of issuance costs of $4,925 and $0			92,359					69,906
Issuance of restricted shares			(84		)			(126		)
Cancellation of restricted shares			—					7
Proceeds from exercise of stock options			1,809					908
Balance at end of period			$	506,779				$	409,630

Retained Earnings
Balance at beginning of period			$	214,454				$	152,820
Net income			64,398					53,923
Dividends on common shares			(11,158		)			(6,974		)
Balance at end of period			$	267,694				$	199,769

Accumulated Other Comprehensive Income, Net of Tax
Unrealized gains (losses) on securities and derivatives:
Balance at beginning of period			$	(1,058	)			$	3,353
Other comprehensive income during the period			4,299					7,096
Balance at end of period			$	3,241				$	10,449

Treasury Stock
Balance at beginning of period	1,456,333		$	(13,613	)	1,413,777		$	(12,388	)
Purchase of treasury shares	18,528		(886		)	42,556		(1,225		)
Balance at end of period	1,474,861		$	(14,499	)	1,456,333		$	(13,613	)

Total Shareholders’ Equity			$	801,921				$	642,583



(dollars in thousands, except per share amount)
Ameris common shares issued	128,572
Price per share of the Company's common stock	$	45.45
Fair value of consideration transferred	$	5,844



(dollars in thousands)	September 30, 2017			September 30, 2016
Gross gains on sales of securities	$	38		$	312
Gross losses on sales of securities	(1		)	(218		)
Net realized gains on sales of securities available for sale	$	37		$	94

Sales proceeds	$	3,090		$	53,026



	As of and for the Period Ended
(dollars in thousands)	September 30, 2017		December 31, 2016		September 30, 2016
Nonaccrual loans	$	15,325	$	18,114	$	16,570
Troubled debt restructurings not included above	12,452		14,209		14,013
Total impaired loans	$	27,777	$	32,323	$	30,583

Quarter-to-date interest income recognized on impaired loans	$	297	$	225	$	252
Year-to-date interest income recognized on impaired loans	$	857	$	1,033	$	808
Quarter-to-date foregone interest income on impaired loans	$	233	$	267	$	239
Year-to-date foregone interest income on impaired loans	$	753	$	977	$	710



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment		Nine Month Average Recorded Investment
September 30, 2017
Commercial, financial and agricultural	$	2,924	$	1,121	$	1,331	$	2,452	$	379	$	2,478	$	2,380
Real estate – construction and development	1,655		532		627		1,159		81		1,179		1,160
Real estate – commercial and farmland	11,451		536		9,938		10,474		806		10,669		11,416
Real estate – residential	15,211		4,558		8,636		13,194		1,058		13,683		14,814
Consumer installment loans	538		498		—		498		—		507		554
Total	$	31,779	$	7,245	$	20,532	$	27,777	$	2,324	$	28,516	$	30,324



Risk Grade	Commercial, Financial and Agricultural		Real Estate - Construction and Development		Real Estate - Commercial and Farmland		Real Estate - Residential		Consumer Installment Loans		Other		Total
September 30, 2017
10	$	495,116	$	—	$	6,029	$	49	$	9,068	$	—	$	510,262
15	559,781		959		75,462		55,759		256		—		692,217
20	117,904		48,640		1,005,945		800,557		24,332		5,795		2,003,173
23	343		4,403		4,242		5,986		3		—		14,977
25	121,558		488,956		431,862		86,702		148,891		—		1,277,969
30	8,350		4,458		17,568		5,674		93		—		36,143
40	4,150		2,773		17,774		14,562		671		—		39,930
50	7		—		—		—		—		—		7
60	—		—		—		—		—		—		—
Total	$	1,307,209	$	550,189	$	1,558,882	$	969,289	$	183,314	$	5,795	$	4,574,678

December 31, 2016
10	$	397,093	$	—	$	8,814	$	125	$	8,532	$	—	$	414,564
15	376,323		5,390		102,893		54,136		405		—		539,147
20	97,057		36,307		889,539		609,583		25,026		12,486		1,669,998
23	366		6,803		8,533		7,470		14		—		23,186
25	92,066		307,903		357,151		88,370		62,098		—		907,588
30	144		719		22,986		5,197		126		—		29,172
40	4,089		5,923		16,303		16,038		714		—		43,067
50	—		—		—		99		—		—		99
60	—		—		—		—		—		—		—
Total	$	967,138	$	363,045	$	1,406,219	$	781,018	$	96,915	$	12,486	$	3,626,821



(dollars in thousands)	Commercial, Financial and Agricultural			Real Estate – Construction and Development			Real Estate – Commercial and Farmland			Real Estate – Residential			Consumer Installment Loans and Other			Purchased Loans			Purchased Loan Pools			Total
Three Months Ended September 30, 2017
Balance, June 30, 2017	$	3,302		$	3,756		$	7,869		$	5,605		$	1,155		$	1,791		$	1,623		$	25,101
Provision for loan losses	910			(587		)	68			127			670			745			(146		)	1,787
Loans charged off	(1,091		)	(1		)	(18		)	(852		)	(320		)	(161		)	—			(2,443		)
Recoveries of loans previously charged off	409			126			26			56			17			887			—			1,521
Balance, September 30, 2017	$	3,530		$	3,294		$	7,945		$	4,936		$	1,522		$	3,262		$	1,477		$	25,966

Nine Months Ended September 30, 2017:
Balance, December 31, 2016	$	2,192		$	2,990		$	7,662		$	6,786		$	827		$	1,626		$	1,837		$	23,920
Provision for loan losses	2,535			155			540			(9		)	1,539			1,428			(360		)	5,828
Loans charged off	(1,896		)	(95		)	(413		)	(2,031		)	(922		)	(1,472		)	—			(6,829		)
Recoveries of loans previously charged off	699			244			156			190			78			1,680			—			3,047
Balance, September 30, 2017	$	3,530		$	3,294		$	7,945		$	4,936		$	1,522		$	3,262		$	1,477		$	25,966

Period-end allocation:
Loans individually evaluated for impairment ⁽¹⁾	$	509		$	81		$	1,380		$	1,058		$	—		$	3,262		$	105		$	6,395
Loans collectively evaluated for impairment	3,021			3,213			6,565			3,878			1,522			—			1,372			19,571
Ending balance	$	3,530		$	3,294		$	7,945		$	4,936		$	1,522		$	3,262		$	1,477		$	25,966

Loans:
Individually evaluated for impairment⁽¹⁾	$	3,204		$	627		$	10,512		$	8,636		$	—		$	32,032		$	915		$	55,926
Collectively evaluated for impairment	1,304,005			549,562			1,548,370			960,653			189,109			763,271			464,303			5,779,273
Acquired with deteriorated credit quality	—			—			—			—			—			121,823			—			121,823
Ending balance	$	1,307,209		$	550,189		$	1,558,882		$	969,289		$	189,109		$	917,126		$	465,218		$	5,957,022



(dollars in thousands)	Covered Loans		Less: Fair Value Adjustments		Total Covered Loans		OREO		Less: Fair Value Adjustments		Total Covered OREO		Total Covered Assets		FDIC Loss- Share Receivable (Payable)
September 30, 2017
AUB	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
USB	2,763		12		2,751		—		—		—		2,751		(1,752		)
SCB	2,541		27		2,514		—		—		—		2,514		(169		)
FBJ	3,647		394		3,253		—		—		—		3,253		(312		)
DBT	9,663		356		9,307		81		—		81		9,388		(4,442		)
TBC	1,667		—		1,667		—		—		—		1,667		(8		)
HTB	1,856		28		1,828		—		—		—		1,828		27
OGB	930		31		899		—		—		—		899		(1,032		)
CBG	10,329		678		9,651		161		—		161		9,812		(502		)
Total	$	33,396	$	1,526	$	31,870	$	242	$	—	$	242	$	32,112	$	(8,190	)

December 31, 2016
AUB	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	(27	)
USB	3,199		13		3,186		51		—		51		3,237		(1,642		)
SCB	4,019		51		3,968		—		—		—		3,968		(32		)
FBJ	3,767		452		3,315		—		—		—		3,315		(234		)
DBT	12,166		565		11,601		—		—		—		11,601		(4,591		)
TBC	1,679		—		1,679		—		—		—		1,679		(33		)
HTB	1,913		33		1,880		—		—		—		1,880		734
OGB	1,077		32		1,045		—		—		—		1,045		(993		)
CBG	33,449		1,963		31,486		1,161		4		1,157		32,643		505
Total	$	61,269	$	3,109	$	58,160	$	1,212	$	4	$	1,208	$	59,368	$	(6,313	)



	Three Months Ended September 30, 2016
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	55,369	$	3,679	$	2,073	$	1,089	$	—	$	62,210
Interest expense	3,716		1,054		225		148		—		5,143
Net interest income	51,653		2,625		1,848		941		—		57,067
Provision for loan losses	57		447		94		213		—		811
Noninterest income	13,949		13,198		555		1,162		—		28,864
Noninterest expense
Salaries and employee benefits	18,323		8,940		103		616		—		27,982
Equipment and occupancy expenses	5,490		433		1		65		—		5,989
Data processing and telecommunications expenses	5,794		364		26		1		—		6,185
Other expenses	11,533		1,303		26		181		—		13,043
Total noninterest expense	41,140		11,040		156		863		—		53,199
Income before income tax expense	24,405		4,336		2,153		1,027		—		31,921
Income tax expense	7,733		1,518		754		359		—		10,364
Net income	$	16,672	$	2,818	$	1,399	$	668	$	—	$	21,557

Total assets	$	5,841,207	$	356,755	$	203,334	$	92,199	$	—	$	6,493,495
Goodwill	122,545		—		—		—		—		122,545
Other intangible assets, net	18,472		—		—		—		—		18,472



											Nine Months Ended
(in thousands, except share and per share data)	Third Quarter 2017		Second Quarter 2017		First Quarter 2017		Fourth Quarter 2016		Third Quarter 2016		September 30, 2017		September 30, 2016
Results of Operations:
Net interest income	$	66,855	$	63,157	$	60,590	$	57,279	$	57,067	$	190,602	$	162,092
Net interest income (tax equivalent)	68,668		64,773		62,108		58,897		58,024		195,549		164,726
Provision for loan losses	1,787		2,205		1,836		1,710		811		5,828		2,381
Non-interest income	26,999		28,189		25,706		24,272		28,864		80,894		81,529
Non-interest expense	63,767		55,739		53,093		54,677		53,199		172,599		161,158
Income tax expense	8,142		10,315		10,214		6,987		10,364		28,671		26,159
Net income available to common shareholders	20,158		23,087		21,153		18,177		21,557		64,398		53,923
Selected Average Balances:
Investment securities	$	864,456	$	866,960	$	862,616	$	856,671	$	857,433	$	864,684	$	840,688
Loans held for sale	126,798		110,933		77,617		102,926		105,859		105,296		96,340
Loans	4,379,082		3,994,213		3,678,149		3,145,714		2,897,771		4,018,597		2,642,498
Purchased loans	937,595		973,521		1,034,983		1,101,907		1,199,175		982,033		1,147,821
Purchased loan pools	475,742		516,949		547,057		590,617		629,666		513,750		629,118
Earning assets	6,892,939		6,584,386		6,347,807		5,925,634		5,780,455		6,610,374		5,490,525
Assets	7,461,367		7,152,024		6,915,965		6,573,344		6,330,350		7,180,330		6,030,181
Deposits	5,837,154		5,671,394		5,491,324		5,490,657		5,221,219		5,667,891		5,102,729
Shareholders’ equity	796,856		774,664		695,830		653,991		640,382		756,153		599,817
Period-End Balances:
Investment securities	$	867,570	$	861,188	$	866,715	$	852,199	$	862,702	$	867,570	$	862,702
Loans held for sale	137,392		146,766		105,637		105,924		126,263		137,392		126,263
Loans	4,574,678		4,230,228		3,785,480		3,626,821		3,091,039		4,574,678		3,091,039
Purchased loans	917,126		950,499		1,006,935		1,069,191		1,129,381		917,126		1,129,381
Purchased loan pools	465,218		490,114		529,099		568,314		624,886		465,218		624,886
Earning assets	7,074,828		6,816,606		6,525,911		6,293,670		5,925,072		7,074,828		5,925,072
Total assets	7,649,820		7,397,858		7,094,856		6,892,031		6,493,495		7,649,820		6,493,495
Deposits	5,895,504		5,793,397		5,642,369		5,575,163		5,306,098		5,895,504		5,306,098
Shareholders’ equity	801,921		782,682		758,216		646,437		642,583		801,921		642,583
Per Common Share Data:
Earnings per share - basic	$	0.54	0.62		0.59		0.52		0.62		1.76		1.58
Earnings per share - diluted	$	0.54	0.62		0.59		0.52		0.61		1.74		1.56
Book value per common share	$	21.54	$	21.03	$	20.42	$	18.51	$	18.42	$	21.54	$	18.42
Tangible book value per common share	$	17.78	$	17.24	$	16.60	$	14.42	$	14.38	$	17.78	$	14.38
End of period shares outstanding	37,231,049		37,222,904		37,128,714		34,921,474		34,891,304		37,231,049		34,891,304



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share data)	2017			2016			2017			2016
Net income available to common shareholders	$	20,158		$	21,557		$	64,398		$	53,923
Adjustment items:
Merger and conversion charges	92			—			494			6,359
Certain compliance resolution expenses	4,729			—			4,729			—
Financial impact of Hurricane Irma	410			—			410			—
Losses on the sale of premises	91			238			956			562
Tax effect of management adjusted charges	(1,863		)	(83		)	(2,306		)	(2,422		)
After tax management-adjusted charges	3,459			155			4,283			4,499
Adjusted operating net income	$	23,617		$	21,712		$	68,681		$	58,422

Weighted average common shares outstanding - diluted	37,552,667			35,194,739			37,017,486			34,470,101
Earnings per diluted share	$	0.54		$	0.61		$	1.74		$	1.56
Adjusted operating net income per diluted share	$	0.63		$	0.62		$	1.86		$	1.69



	Quarter Ended September 30,
	2017					2016
(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:
Federal funds sold and interest-bearing deposits in banks	$	109,266	$	406	1.47%	$	90,551	$	155	0.68%
Investment securities	864,456		5,665		2.60%	857,433		4,872		2.26%
Loans held for sale	126,798		1,131		3.54%	105,859		826		3.10%
Loans	4,379,082		53,394		4.84%	2,897,771		33,672		4.62%
Purchased loans	937,595		14,048		5.94%	1,199,175		19,296		6.40%
Purchased loan pools	475,742		3,491		2.91%	629,666		4,346		2.75%
Total interest-earning assets	6,892,939		78,135		4.50%	5,780,455		63,167		4.35%
Noninterest-earning assets	568,428					549,895
Total assets	$	7,461,367				$	6,330,350

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits	$	3,162,448	$	2,963	0.37%	$	2,787,323	$	1,719	0.25%
Time deposits	1,020,239		2,173		0.85%	887,685		1,355		0.61%
Federal funds purchased and securities sold under agreements to repurchase	19,414		11		0.22%	37,305		18		0.19%
FHLB advances	608,413		1,849		1.21%	265,202		393		0.59%
Other borrowings	75,590		1,183		6.21%	49,345		479		3.86%
Subordinated deferrable interest debentures	85,040		1,288		6.01%	83,719		1,179		5.60%
Total interest-bearing liabilities	4,971,144		9,467		0.76%	4,110,579		5,143		0.50%
Demand deposits	1,654,467					1,546,211
Other liabilities	38,900					33,178
Shareholders’ equity	796,856					640,382
Total liabilities and shareholders’ equity	$	7,461,367				$	6,330,350
Interest rate spread					3.74%					3.85%
Net interest income			$	68,668				$	58,024
Net interest margin					3.95%					3.99%



	As of and for the Nine Months Ended September 30, 2017
(dollars in thousands)	Legacy Loans			Purchased Loans			Purchased Loan Pools			Total
Allowance for loan losses at end of period	$	21,227		$	3,262		$	1,477		$	25,966
Net charge-offs (recoveries) for the period	3,990			(208		)	—			3,782
Loan balances:
End of period	4,574,678			917,126			465,218			5,957,022
Average for the period	4,018,597			982,033			513,750			5,514,380
Net charge-offs as a percentage of average loans	0.13		%	(0.03		)%	0.00		%	0.09		%
Allowance for loan losses as a percentage of end of period loans	0.46		%	0.36		%	0.32		%	0.44		%



	September 30, 2017	June 30, 2017	March 31, 2017	December 31, 2016	September 30, 2016
Investment securities available for sale to total deposits	13.90%	14.13%	14.72%	14.76%	15.80%
Loans (net of unearned income) to total deposits	101.04%	97.88%	94.31%	94.42%	91.32%
Interest-earning assets to total assets	92.48%	92.14%	91.98%	91.32%	91.25%
Interest-bearing deposits to total deposits	70.86%	71.12%	70.67%	71.78%	70.54%