UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM			10-Q

(Mark One)


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

For the quarterly period ended ~~June~~September 30, 2022


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


Commission File Number:			001-13901


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


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


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


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

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1 per share	ABCB	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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

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


Large accelerated filer	ý	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

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

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

There were ~~69,360,054~~69,351,709 shares of Common Stock outstanding as of ~~July~~October 31, 2022.

AMERIS BANCORP

TABLE OF CONTENTS


		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Balance Sheets as of ~~June~~September 3 0 ,30, 2022 (unaudited) and December 31, 2021	1

	Consolidated Statements of Income and Comprehensive Income for the Three and ~~and Six~~Nine Months Ended ~~June~~September 30,, 2022 and 2021 (unaudited)	2

	Consolidated Statements of Shareholders’ Equity for the Three and ~~and Six~~ Nine Months Ended ~~June~~September 3 0 ,30, 2022 and 2021 (unaudited)	3

	Consolidated Statements of Cash Flows for the SNixine Months Ended ~~June~~September 3 0 ,30, 2022 and 2021 (unaudited)	5

	Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	57

Item 4.	Controls and Procedures.	58

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	59

Item 1A.	Risk Factors.	59

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	59

Item 3.	Defaults Upon Senior Securities.	59

Item 4.	Mine Safety Disclosures.	59

Item 5.	Other Information.	59

Item 6.	Exhibits.	60

Signatures		61

Item 1. Financial Statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets

(dollars in thousands, except per share data)


		June 30, 2022 (unaudited)		December 31, 2021			September 30, 2022 (unaudited)		December 31, 2021
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	345,627	$	307,813	Cash and due from banks	$	269,193	$	307,813
Federal funds sold and interest-bearing deposits in banks	Federal funds sold and interest-bearing deposits in banks	1,961,209		3,756,844		Federal funds sold and interest-bearing deposits in banks	1,061,975		3,756,844
Cash and cash equivalents	Cash and cash equivalents	2,306,836		4,064,657		Cash and cash equivalents	1,331,168		4,064,657

Debt securities available-for-sale, at fair value, net of allowance for credit losses of $88 and $—		1,052,268		592,621
Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $97,144 and $78,206)		111,654		79,850
Debt securities available-for-sale, at fair value, net of allowance for credit losses of $79 and $—						Debt securities available-for-sale, at fair value, net of allowance for credit losses of $79 and $—	1,255,149		592,621
Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $107,814 and $78,206)						Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $107,814 and $78,206)	130,214		79,850
Other investments	Other investments	49,500		47,552		Other investments	60,560		47,552
Loans held for sale, at fair value	Loans held for sale, at fair value	555,665		1,254,632		Loans held for sale, at fair value	297,987		1,254,632

Loans, net of unearned income	Loans, net of unearned income	17,561,022		15,874,258		Loans, net of unearned income	18,806,856		15,874,258
Allowance for credit losses	Allowance for credit losses	(172,642)		(167,582)		Allowance for credit losses	(184,891)		(167,582)
Loans, net	Loans, net	17,388,380		15,706,676		Loans, net	18,621,965		15,706,676

Other real estate owned, net	Other real estate owned, net	835		3,810		Other real estate owned, net	843		3,810
Premises and equipment, net	Premises and equipment, net	224,249		225,400		Premises and equipment, net	222,694		225,400
Goodwill	Goodwill	1,023,056		1,012,620		Goodwill	1,023,071		1,012,620
Other intangible assets, net	Other intangible assets, net	115,613		125,938		Other intangible assets, net	110,903		125,938
Cash value of bank owned life insurance	Cash value of bank owned life insurance	384,862		331,146		Cash value of bank owned life insurance	386,533		331,146

Other assets	Other assets	474,552		413,419		Other assets	372,570		413,419
Total assets	Total assets	$	23,687,470	$	23,858,321	Total assets	$	23,813,657	$	23,858,321

Liabilities	Liabilities					Liabilities
Deposits:	Deposits:					Deposits:
Noninterest-bearing	Noninterest-bearing	$	8,262,929	$	7,774,823	Noninterest-bearing	$	8,343,200	$	7,774,823
Interest-bearing	Interest-bearing	11,422,053		11,890,730		Interest-bearing	11,123,719		11,890,730
Total deposits	Total deposits	19,684,982		19,665,553		Total deposits	19,466,919		19,665,553
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	953		5,845		Securities sold under agreements to repurchase	—		5,845
Other borrowings	Other borrowings	425,592		739,879		Other borrowings	725,664		739,879
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	127,325		126,328		Subordinated deferrable interest debentures	127,823		126,328
Other liabilities	Other liabilities	375,242		354,265		Other liabilities	374,181		354,265
Total liabilities	Total liabilities	20,614,094		20,891,870		Total liabilities	20,694,587		20,891,870

Commitments and Contingencies (Note 9)		0		0
Commitments and Contingencies (Note 8)						Commitments and Contingencies (Note 8)

Shareholders’ Equity	Shareholders’ Equity					Shareholders’ Equity
Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding	Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding	—		—		Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, par value $1; 200,000,000 shares authorized; 72,251,856 and 72,017,126 shares issued		72,251		72,017
Common stock, par value $1; 200,000,000 shares authorized; 72,247,386 and 72,017,126 shares issued						Common stock, par value $1; 200,000,000 shares authorized; 72,247,386 and 72,017,126 shares issued	72,247		72,017
Capital surplus	Capital surplus	1,931,088		1,924,813		Capital surplus	1,932,906		1,924,813
Retained earnings	Retained earnings	1,157,359		1,006,436		Retained earnings	1,239,477		1,006,436
Accumulated other comprehensive income, net of tax	Accumulated other comprehensive income, net of tax	(12,635)		15,590		Accumulated other comprehensive income, net of tax	(50,734)		15,590
Treasury stock, at cost, 2,891,395 and 2,407,898 shares		(74,687)		(52,405)
Treasury stock, at cost, 2,894,677 and 2,407,898 shares						Treasury stock, at cost, 2,894,677 and 2,407,898 shares	(74,826)		(52,405)
Total shareholders’ equity	Total shareholders’ equity	3,073,376		2,966,451		Total shareholders’ equity	3,119,070		2,966,451
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	23,687,470	$	23,858,321	Total liabilities and shareholders’ equity	$	23,813,657	$	23,858,321

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 June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Interest income	Interest income									Interest income
Interest and fees on loans	Interest and fees on loans	$	190,740	$	167,761	$	368,306	$	338,918	Interest and fees on loans	$	216,400	$	166,358	$	584,706	$	505,276
Interest on taxable securities	Interest on taxable securities	7,064		5,244		11,303		11,362		Interest on taxable securities	10,324		5,296		21,627		16,658
Interest on nontaxable securities	Interest on nontaxable securities	269		139		455		280		Interest on nontaxable securities	363		139		818		419
Interest on deposits in other banks and federal funds sold	Interest on deposits in other banks and federal funds sold	4,495		607		5,878		1,141		Interest on deposits in other banks and federal funds sold	7,215		1,253		13,093		2,394
Total interest income	Total interest income	202,568		173,751		385,942		351,701		Total interest income	234,302		173,046		620,244		524,747

Interest expense	Interest expense									Interest expense
Interest on deposits	Interest on deposits	4,908		5,775		9,000		12,573		Interest on deposits	14,034		5,106		23,034		17,679
Interest on other borrowings	Interest on other borrowings	6,296		6,124		13,034		12,299		Interest on other borrowings	7,287		6,279		20,321		18,578
Total interest expense	Total interest expense	11,204		11,899		22,034		24,872		Total interest expense	21,321		11,385		43,355		36,257

Net interest income	Net interest income	191,364		161,852		363,908		326,829		Net interest income	212,981		161,661		576,889		488,490
Provision for loan losses	Provision for loan losses	13,227		(899)		10,493		(17,478)		Provision for loan losses	17,469		(3,984)		27,962		(21,462)
Provision for unfunded commitments	Provision for unfunded commitments	1,779		1,299		10,788		(10,540)		Provision for unfunded commitments	192		(5,516)		10,980		(16,056)
Provision for other credit losses	Provision for other credit losses	(82)		(258)		(126)		(431)		Provision for other credit losses	(9)		(175)		(135)		(606)
Provision for credit losses	Provision for credit losses	14,924		142		21,155		(28,449)		Provision for credit losses	17,652		(9,675)		38,807		(38,124)
Net interest income after provision for credit losses	Net interest income after provision for credit losses	176,440		161,710		342,753		355,278		Net interest income after provision for credit losses	195,329		171,336		538,082		526,614

Noninterest income	Noninterest income									Noninterest income
Service charges on deposit accounts	Service charges on deposit accounts	11,148		11,007		22,206		21,836		Service charges on deposit accounts	11,168		11,486		33,374		33,322
Mortgage banking activity	Mortgage banking activity	58,761		70,231		121,699		168,717		Mortgage banking activity	40,350		56,460		162,049		225,177
Other service charges, commissions and fees	Other service charges, commissions and fees	998		1,056		1,937		2,072		Other service charges, commissions and fees	970		1,154		2,907		3,226
Net loss on securities		248		1		221		(11)
Net gain (loss) on securities										Net gain (loss) on securities	(21)		530		200		519
Other noninterest income	Other noninterest income	12,686		6,945		24,689		14,599		Other noninterest income	12,857		6,932		37,546		21,531
Total noninterest income	Total noninterest income	83,841		89,240		170,752		207,213		Total noninterest income	65,324		76,562		236,076		283,775

Noninterest expense	Noninterest expense									Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	81,545		85,505		165,826		181,490		Salaries and employee benefits	78,697		79,671		244,523		261,161
Occupancy and equipment	Occupancy and equipment	12,746		10,812		25,473		22,593		Occupancy and equipment	12,983		11,979		38,456		34,572
Data processing and communications expenses	Data processing and communications expenses	12,155		11,877		24,727		23,761		Data processing and communications expenses	12,015		10,681		36,742		34,442
Credit resolution-related expenses	Credit resolution-related expenses	496		622		(469)		1,169		Credit resolution-related expenses	126		377		(343)		1,546
Advertising and marketing	Advertising and marketing	3,122		1,946		5,110		3,377		Advertising and marketing	3,553		2,676		8,663		6,053
Amortization of intangible assets	Amortization of intangible assets	5,144		4,065		10,325		8,191		Amortization of intangible assets	4,710		3,387		15,035		11,578
Merger and conversion charges	Merger and conversion charges	—		—		977		—		Merger and conversion charges	—		183		977		183
Loan servicing expense	Loan servicing expense	9,920		4,914		18,839		10,814		Loan servicing expense	9,613		7,400		28,452		18,214
Other noninterest expenses	Other noninterest expenses	17,068		16,020		35,208		33,164		Other noninterest expenses	17,881		20,842		53,089		54,006
Total noninterest expense	Total noninterest expense	142,196		135,761		286,016		284,559		Total noninterest expense	139,578		137,196		425,594		421,755

Income before income tax expense	Income before income tax expense	118,085		115,189		227,489		277,932		Income before income tax expense	121,075		110,702		348,564		388,634
Income tax expense	Income tax expense	28,019		26,862		55,725		64,643		Income tax expense	28,520		29,022		84,245		93,665
Net income	Net income	90,066		88,327		171,764		213,289		Net income	92,555		81,680		264,319		294,969

Other comprehensive loss	Other comprehensive loss									Other comprehensive loss
Net unrealized holding losses arising during period on investment securities available-for-sale, net of tax benefit of $(2,870), $(283), $(7,503) and $(2,255)		(10,794)		(1,066)		(28,225)		(8,481)
Net unrealized holding losses arising during period on investment securities available-for-sale, net of tax benefit of $(10,128), $(834), $(17,631) and $(3,089)										Net unrealized holding losses arising during period on investment securities available-for-sale, net of tax benefit of $(10,128), $(834), $(17,631) and $(3,089)	(38,099)		(3,139)		(66,324)		(11,620)

Total other comprehensive loss	Total other comprehensive loss	(10,794)		(1,066)		(28,225)		(8,481)		Total other comprehensive loss	(38,099)		(3,139)		(66,324)		(11,620)
Comprehensive income	Comprehensive income	$	79,272	$	87,261	$	143,539	$	204,808	Comprehensive income	$	54,456	$	78,541	$	197,995	$	283,349

Basic earnings per common share	Basic earnings per common share	$	1.30	$	1.27	$	2.48	$	3.07	Basic earnings per common share	$	1.34	$	1.18	$	3.82	$	4.25
Diluted earnings per common share	Diluted earnings per common share	$	1.30	$	1.27	$	2.47	$	3.06	Diluted earnings per common share	$	1.34	$	1.17	$	3.81	$	4.23
Weighted average common shares outstanding	Weighted average common shares outstanding									Weighted average common shares outstanding
Basic	Basic	69,136		69,497		69,246		69,448		Basic	69,125		69,440		69,213		69,445
Diluted	Diluted	69,316		69,792		69,485		69,765		Diluted	69,327		69,756		69,428		69,772

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity (unaudited)

(dollars in thousands)


		Three Months Ended June 30, 2022																					Three Months Ended September 30, 2022

		Common Stock			Capital Surplus				Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock					Total Shareholders' Equity				Common Stock						Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Income (Loss), Net of Tax				Treasury Stock							Total Shareholders' Equity
		Shares	Amount								Shares			Amount				Shares				Amount										Shares								Amount
Balance, March 31, 2022		72,212,322	$	72,212			$	1,928,702				$	1,077,725	$	(1,841)	2,773,238					$	(69,639)		$	3,007,159
Balance, June 30, 2022																						Balance, June 30, 2022	72,251,856			$	72,251			$	1,931,088			$	1,157,359			$	(12,635)			2,891,395				$	(74,687)		$	3,073,376

Issuance of restricted shares		18,953	19		(19)				—			—		—		—			—

Forfeitures of restricted shares	Forfeitures of restricted shares	(10,751)	(11)		(81)				—			—		—		—			(92)			Forfeitures of restricted shares	(4,470)			(4)			(38)				—				—				—				—			(42)
Proceeds from exercise of stock options		31,332	31		849				—			—		—		—			880

Share-based compensation	Share-based compensation	—	—		1,637				—			—		—		—			1,637			Share-based compensation	—			—			1,856				—				—				—				—			1,856
Purchase of treasury shares	Purchase of treasury shares	—	—		—				—			—		118,157		(5,048)			(5,048)			Purchase of treasury shares	—			—			—				—				—				3,282				(139)			(139)
Net income	Net income	—	—		—				90,066			—		—		—			90,066			Net income	—			—			—				92,555				—				—				—			92,555
Dividends on common shares ($0.15 per share)	Dividends on common shares ($0.15 per share)	—	—		—				(10,432)			—		—		—			(10,432)			Dividends on common shares ($0.15 per share)	—			—			—				(10,437)				—				—				—			(10,437)

Other comprehensive loss during the period	Other comprehensive loss during the period	—	—		—				—			(10,794)		—		—			(10,794)			Other comprehensive loss during the period	—			—			—				—				(38,099)				—				—			(38,099)
Balance, June 30, 2022		72,251,856	$	72,251	$	1,931,088			$	1,157,359		$	(12,635)	2,891,395		$	(74,687)		$	3,073,376
Balance, September 30, 2022																						Balance, September 30, 2022	72,247,386			$	72,247		$	1,932,906			$	1,239,477			$	(50,734)			2,894,677				$	(74,826)		$	3,119,070

		Six Months Ended June 30, 2022																					Nine Months Ended September 30, 2022

		Common Stock			Capital Surplus				Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock					Total Shareholders' Equity				Common Stock						Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Income (Loss), Net of Tax				Treasury Stock							Total Shareholders' Equity
		Shares	Amount								Shares			Amount				Shares				Amount										Shares								Amount
Balance, December 31, 2021	Balance, December 31, 2021	72,017,126	$	72,017			$	1,924,813				$	1,006,436	$	15,590	2,407,898					$	(52,405)		$	2,966,451	Balance, December 31, 2021		72,017,126			$	72,017			$	1,924,813			$	1,006,436			$	15,590			2,407,898			$	(52,405)	$	2,966,451

Issuance of restricted shares	Issuance of restricted shares	164,346	164		1,177				—			—		—		—			1,341			Issuance of restricted shares	164,346			164				1,177				—				—				—				—			1,341
Forfeitures of restricted shares	Forfeitures of restricted shares	(10,751)	(10)		(81)				—			—		—		—			(91)			Forfeitures of restricted shares	(13,889)			(14)			(119)				—				—				—				—			(133)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	81,135	80		2,244				—			—		—		—			2,324			Proceeds from exercise of stock options	79,803			80			2,244				—				—				—				—			2,324
Share-based compensation	Share-based compensation	—	—		2,935				—			—		—		—			2,935			Share-based compensation	—			—			4,791				—				—				—				—			4,791
Purchase of treasury shares	Purchase of treasury shares	—	—		—				—			—		483,497		(22,282)			(22,282)			Purchase of treasury shares	—			—			—				—				—				486,779				(22,421)			(22,421)
Net income	Net income	—	—		—				171,764			—		—		—			171,764			Net income	—			—			—				264,319				—				—				—			264,319
Dividends on common shares ($0.30 per share)		—	—		—				(20,841)			—		—		—			(20,841)
Dividends on common shares ($0.45 per share)																						Dividends on common shares ($0.45 per share)	—			—			—				(31,278)				—				—				—			(31,278)

Other comprehensive loss during the period	Other comprehensive loss during the period	—	—		—				—			(28,225)		—		—			(28,225)			Other comprehensive loss during the period	—			—			—				—				(66,324)				—				—			(66,324)
Balance, June 30, 2022		72,251,856	$	72,251	$	1,931,088			$	1,157,359		$	(12,635)	2,891,395		$	(74,687)		$	3,073,376
Balance, September 30, 2022																						Balance, September 30, 2022	72,247,386			$	72,247		$	1,932,906			$	1,239,477			$	(50,734)			2,894,677				$	(74,826)		$	3,119,070


		Three Months Ended June 30, 2021																					Three Months Ended September 30, 2021

		Common Stock			Capital Surplus				Retained Earnings			Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock					Total Shareholders' Equity				Common Stock						Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Income, Net of Tax				Treasury Stock							Total Shareholders' Equity
		Shares	Amount								Shares			Amount				Shares				Amount										Shares								Amount
Balance, March 31, 2021		71,954,088	$	71,954			$	1,917,990				$	785,984	$	26,090	2,240,662					$	(44,422)		$	2,757,596
Balance, June 30, 2021																						Balance, June 30, 2021	72,007,871			$	72,008			$	1,920,566			$	863,828			$	25,024			2,240,662				$	(44,422)		$	2,837,004

Issuance of restricted shares		13,233	13		(13)				—			—		—		—			—

Forfeitures of restricted shares	Forfeitures of restricted shares	(750)	(1)		(19)				—			—		—		—			(20)			Forfeitures of restricted shares	(1,945)			(2)			(31)				—				—				—				—			(33)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	41,300	42		1,167				—			—		—		—			1,209			Proceeds from exercise of stock options	10,000			10			278				—				—				—				—			288
Share-based compensation	Share-based compensation	—	—		1,441				—			—		—		—			1,441			Share-based compensation	—			—			2,151				—				—				—				—			2,151
Purchase of treasury shares	Purchase of treasury shares	—	—		—				—			—		—		—			—			Purchase of treasury shares	—			—			—				—				—				139,829				(6,652)			(6,652)
Net income	Net income	—	—		—				88,327			—		—		—			88,327			Net income	—			—			—				81,680				—				—				—			81,680
Dividends on common shares ($0.15 per share)	Dividends on common shares ($0.15 per share)	—	—		—				(10,483)			—		—		—			(10,483)			Dividends on common shares ($0.15 per share)	—			—			—				(10,529)				—				—				—			(10,529)

Other comprehensive loss during the period	Other comprehensive loss during the period	—	—		—				—			(1,066)		—		—			(1,066)			Other comprehensive loss during the period	—			—			—				—				(3,139)				—				—			(3,139)
Balance, June 30, 2021		72,007,871	$	72,008	$	1,920,566			$	863,828		$	25,024	2,240,662		$	(44,422)		$	2,837,004
Balance, September 30, 2021																						Balance, September 30, 2021	72,015,926			$	72,016		$	1,922,964			$	934,979			$	21,885			2,380,491				$	(51,074)		$	2,900,770

		Six Months Ended June 30, 2021																					Nine Months Ended September 30, 2021

		Common Stock			Capital Surplus				Retained Earnings			Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock					Total Shareholders' Equity				Common Stock						Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Income, Net of Tax				Treasury Stock							Total Shareholders' Equity
		Shares	Amount								Shares			Amount				Shares				Amount										Shares								Amount
Balance, December 31, 2020	Balance, December 31, 2020	71,753,705	$	71,754			$	1,913,285				$	671,510	$	33,505	2,212,224					$	(42,966)		$	2,647,088	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	Issuance of restricted shares	99,308	99		500				—			—		—		—			599			Issuance of restricted shares	99,308			99				500				—				—				—				—			599
Forfeitures of restricted shares	Forfeitures of restricted shares	(750)	(1)		(19)				—			—		—		—			(20)			Forfeitures of restricted shares	(2,695)			(3)			(50)				—				—				—				—			(53)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	155,608	156		4,055				—			—		—		—			4,211			Proceeds from exercise of stock options	165,608			166			4,333				—				—				—				—			4,499
Share-based compensation	Share-based compensation	—	—		2,745				—			—		—		—			2,745			Share-based compensation	—			—			4,896				—				—				—				—			4,896
Purchase of treasury shares	Purchase of treasury shares	—	—		—				—			—		28,438		(1,456)			(1,456)			Purchase of treasury shares	—			—			—				—				—				168,267				(8,108)			(8,108)
Net income	Net income	—	—		—				213,289			—		—		—			213,289			Net income	—			—			—				294,969				—				—				—			294,969
Dividends on common shares ($0.30 per share)		—	—		—				(20,971)			—		—		—			(20,971)
Dividends on common shares ($0.45 per share)																						Dividends on common shares ($0.45 per share)	—			—			—				(31,500)				—				—				—			(31,500)

Other comprehensive loss during the period	Other comprehensive loss during the period	—	—		—				—			(8,481)		—		—			(8,481)			Other comprehensive loss during the period	—			—			—				—				(11,620)				—				—			(11,620)
Balance, June 30, 2021		72,007,871	$	72,008	$	1,920,566			$	863,828		$	25,024	2,240,662		$	(44,422)		$	2,837,004
Balance, September 30, 2021																						Balance, September 30, 2021	72,015,926			$	72,016		$	1,922,964			$	934,979			$	21,885			2,380,491				$	(51,074)		$	2,900,770

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	171,764	$	213,289	Net income	$	264,319	$	294,969
Adjustments reconciling net income to net cash provided by (used in) operating activities:	Adjustments reconciling net income to net cash provided by (used in) operating activities:					Adjustments reconciling net income to net cash provided by (used in) operating activities:
Depreciation	Depreciation	9,191		8,226		Depreciation	13,808		12,864
Net losses on sale or disposal of premises and equipment	Net losses on sale or disposal of premises and equipment	39		920		Net losses on sale or disposal of premises and equipment	92		3,200
Net write-downs on other assets	Net write-downs on other assets	—		149		Net write-downs on other assets	—		260
Provision for credit losses	Provision for credit losses	21,155		(28,449)		Provision for credit losses	38,807		(38,124)
Net write-downs and (gains) losses on sale of other real estate owned	Net write-downs and (gains) losses on sale of other real estate owned	(1,758)		(558)		Net write-downs and (gains) losses on sale of other real estate owned	(1,773)		(581)
Share-based compensation expense	Share-based compensation expense	3,045		3,454		Share-based compensation expense	4,859		5,884
Amortization of intangible assets	Amortization of intangible assets	10,325		8,191		Amortization of intangible assets	15,035		11,578
Amortization of operating lease right of use assets	Amortization of operating lease right of use assets	5,750		5,866		Amortization of operating lease right of use assets	8,783		12,389
Provision for deferred taxes	Provision for deferred taxes	10,505		26,488		Provision for deferred taxes	(21,699)		32,074
Net amortization of investment securities available-for-sale	Net amortization of investment securities available-for-sale	588		1,985		Net amortization of investment securities available-for-sale	407		2,534
Net amortization of investment securities held-to-maturity	Net amortization of investment securities held-to-maturity	51		1		Net amortization of investment securities held-to-maturity	71		14
Net amortization of other investments	Net amortization of other investments	396		—		Net amortization of other investments	556		—
Net (gain) loss on securities		(221)		11
Net gain on securities						Net gain on securities	(200)		(519)
Accretion of discount on purchased loans, net	Accretion of discount on purchased loans, net	(627)		(10,589)		Accretion of discount on purchased loans, net	(30)		(13,537)
Net amortization on other borrowings	Net amortization on other borrowings	216		222		Net amortization on other borrowings	324		330
Amortization of subordinated deferrable interest debentures	Amortization of subordinated deferrable interest debentures	997		986		Amortization of subordinated deferrable interest debentures	1,495		1,485
Loan servicing asset recovery	Loan servicing asset recovery	(20,492)		(11,388)		Loan servicing asset recovery	(21,824)		(9,990)
Originations of mortgage loans held for sale	Originations of mortgage loans held for sale	(2,406,310)		(4,425,420)		Originations of mortgage loans held for sale	(3,265,190)		(6,231,286)
Payments received on mortgage loans held for sale	Payments received on mortgage loans held for sale	19,746		24,477		Payments received on mortgage loans held for sale	21,657		38,178
Proceeds from sales of mortgage loans held for sale	Proceeds from sales of mortgage loans held for sale	2,833,622		4,198,098		Proceeds from sales of mortgage loans held for sale	3,919,672		5,752,055
Net (gains) losses on sale of mortgage loans held for sale	Net (gains) losses on sale of mortgage loans held for sale	78,173		(84,992)		Net (gains) losses on sale of mortgage loans held for sale	83,975		(126,533)
Originations of SBA loans	Originations of SBA loans	(30,793)		(44,257)		Originations of SBA loans	(44,664)		(51,155)
Proceeds from sales of SBA loans	Proceeds from sales of SBA loans	40,286		41,017		Proceeds from sales of SBA loans	53,961		54,861
Net gains on sale of SBA loans	Net gains on sale of SBA loans	(3,484)		(3,453)		Net gains on sale of SBA loans	(5,191)		(5,059)
Increase in cash surrender value of bank owned life insurance	Increase in cash surrender value of bank owned life insurance	(3,716)		(2,078)		Increase in cash surrender value of bank owned life insurance	(5,433)		(3,628)
Gain on bank owned life insurance proceeds	Gain on bank owned life insurance proceeds	—		(603)		Gain on bank owned life insurance proceeds	(55)		(603)
Net gains on other loans held for sale	Net gains on other loans held for sale	—		(457)		Net gains on other loans held for sale	—		(457)

Loss on sale of mortgage servicing rights						Loss on sale of mortgage servicing rights	316		—
Change attributable to other operating activities	Change attributable to other operating activities	(24,580)		(13,363)		Change attributable to other operating activities	711		1,244
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	713,868		(92,227)		Net cash provided by (used in) operating activities	1,062,789		(257,553)

Investing Activities, net of effects of business combinations	Investing Activities, net of effects of business combinations					Investing Activities, net of effects of business combinations
Proceeds from maturities of time deposits in other banks	Proceeds from maturities of time deposits in other banks	—		249		Proceeds from maturities of time deposits in other banks	—		249
Purchases of securities available-for-sale	Purchases of securities available-for-sale	(613,715)		—		Purchases of securities available-for-sale	(894,260)		—
Purchases of investment securities held-to-maturity	Purchases of investment securities held-to-maturity	(33,217)		(29,056)		Purchases of investment securities held-to-maturity	(52,111)		(64,517)
Proceeds from maturities and paydowns of securities available-for-sale	Proceeds from maturities and paydowns of securities available-for-sale	117,664		192,022		Proceeds from maturities and paydowns of securities available-for-sale	147,291		281,244

Proceeds from maturities and paydowns of securities held-to-maturity	Proceeds from maturities and paydowns of securities held-to-maturity	1,362		—		Proceeds from maturities and paydowns of securities held-to-maturity	1,676		52
Net (increase) decrease in other investments	Net (increase) decrease in other investments	(2,123)		570		Net (increase) decrease in other investments	(13,364)		1,102
Net increase in loans	Net increase in loans	(1,533,706)		(219,110)		Net increase in loans	(2,764,936)		(215,289)
Purchases of premises and equipment	Purchases of premises and equipment	(8,192)		(17,196)		Purchases of premises and equipment	(11,307)		(21,990)
Proceeds from sale of premises and equipment	Proceeds from sale of premises and equipment	46		946		Proceeds from sale of premises and equipment	46		993
Proceeds from sales of other real estate owned	Proceeds from sales of other real estate owned	4,962		7,902		Proceeds from sales of other real estate owned	5,086		10,141

Proceeds from sale of mortgage servicing rights						Proceeds from sale of mortgage servicing rights	119,845		—
Purchases of bank owned life insurance	Purchases of bank owned life insurance	(50,000)		(100,000)		Purchases of bank owned life insurance	(50,000)		(100,000)
Proceeds from bank owned life insurance	Proceeds from bank owned life insurance	—		1,309		Proceeds from bank owned life insurance	101		1,309
Payments received on other loans held for sale	Payments received on other loans held for sale	—		9,136		Payments received on other loans held for sale	—		9,136
Proceeds from sales of other loans held for sale	Proceeds from sales of other loans held for sale	—		156,803		Proceeds from sales of other loans held for sale	—		156,803
Net cash and cash equivalents paid in acquisitions	Net cash and cash equivalents paid in acquisitions	(14,003)		—		Net cash and cash equivalents paid in acquisitions	(14,003)		—
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(2,130,922)		3,575		Net cash provided by (used in) investing activities	(3,525,936)		59,233

				(Continued)					(Continued)

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Financing Activities, net of effects of business combinations	Financing Activities, net of effects of business combinations					Financing Activities, net of effects of business combinations
Net increase in deposits		$	19,429	$	1,300,174
Net increase (decrease) in deposits						Net increase (decrease) in deposits	$	(198,634)	$	1,875,666
Net decrease in securities sold under agreements to repurchase	Net decrease in securities sold under agreements to repurchase	(4,892)		(6,097)		Net decrease in securities sold under agreements to repurchase	(5,845)		(7,139)

Proceeds from other borrowings						Proceeds from other borrowings	350,000		—
Repayment of other borrowings	Repayment of other borrowings	(314,503)		(74)		Repayment of other borrowings	(364,539)		(110)

Proceeds from exercise of stock options	Proceeds from exercise of stock options	2,324		4,211		Proceeds from exercise of stock options	2,324		4,499
Dividends paid - common stock	Dividends paid - common stock	(20,843)		(20,888)		Dividends paid - common stock	(31,227)		(31,354)
Purchase of treasury shares	Purchase of treasury shares	(22,282)		(1,456)		Purchase of treasury shares	(22,421)		(8,108)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(340,767)		1,275,870		Net cash provided by (used in) financing activities	(270,342)		1,833,454

Net increase (decrease) in cash, cash equivalents and restricted cash	Net increase (decrease) in cash, cash equivalents and restricted cash	(1,757,821)		1,187,218		Net increase (decrease) in cash, cash equivalents and restricted cash	(2,733,489)		1,635,134
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	4,064,657		2,117,306		Cash, cash equivalents and restricted cash at beginning of period	4,064,657		2,117,306
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	2,306,836	$	3,304,524	Cash, cash equivalents and restricted cash at end of period	$	1,331,168	$	3,752,440

Supplemental Disclosures of Cash Flow Information	Supplemental Disclosures of Cash Flow Information					Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest	Interest	$	23,472	$	25,985	Interest	$	42,040	$	35,389
Income taxes	Income taxes	51,851		30,924		Income taxes	82,551		55,651
Loans transferred to other real estate owned	Loans transferred to other real estate owned	229		1,239		Loans transferred to other real estate owned	346		2,274
Loans transferred from loans held for sale to loans held for investment	Loans transferred from loans held for sale to loans held for investment	167,727		85,748		Loans transferred from loans held for sale to loans held for investment	192,425		134,941

Loans provided for the sales of other real estate owned	Loans provided for the sales of other real estate owned	2,288		1,052		Loans provided for the sales of other real estate owned	2,288		1,052

Right-of-use assets obtained in exchange for new operating lease liabilities	Right-of-use assets obtained in exchange for new operating lease liabilities	1,537		2,932		Right-of-use assets obtained in exchange for new operating lease liabilities	1,537		10,270
Assets acquired in business acquisitions	Assets acquired in business acquisitions	10,734		—		Assets acquired in business acquisitions	10,641		—
Liabilities assumed in business acquisitions	Liabilities assumed in business acquisitions	(3,269)		—		Liabilities assumed in business acquisitions	(3,362)		—

Change in unrealized gain (loss) on securities available-for-sale, net of tax		(28,225)		(8,481)
Change in unrealized loss on securities available-for-sale, net of tax						Change in unrealized loss on securities available-for-sale, net of tax	(66,324)		(11,620)

				(Concluded)					(Concluded)

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

~~June~~September 30, 2022

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Nature of Business

Ameris Bancorp (the “Company” or “Ameris”) is a financial holding company headquartered in Atlanta, Georgia. Ameris conducts substantially all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At ~~June~~September 30, 2022, the Bank operated 164 branches in select markets in Georgia, Alabama, Florida, North Carolina and South Carolina. Our business model capitalizes on the efficiencies of a large financial services company, while still providing the community with the personalized banking service expected by our customers. We manage our Bank through a balance of decentralized management responsibilities and efficient centralized operating systems, products and loan underwriting standards. The Company’s Board of Directors and senior managers establish corporate policy, strategy and administrative policies. Within our established guidelines and policies, the banker closest to the customer responds to the differing needs and demands of his or her unique market.

Basis of Presentation

The accompanying unaudited consolidated financial statements for Ameris have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statement presentation. The interim consolidated financial statements included herein are unaudited but reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and ~~six~~nine month periods ended ~~June~~September 30, 2022 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits in banks, federal funds sold and restricted cash. Restricted cash held for securitization investors, which are reported on the Company's consolidated balance sheets in cash and due from banks, was $0 and $43.0 million at ~~June~~September 30, 2022 and December 31, 2021, respectively.

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 Pending Adoption

ASU No. 2022-02 – Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). ASU 2022-02 eliminates the troubled debt restructuring ("TDR") measurement and recognition guidance and requires that entities evaluate whether the modification represents a new loan or a continuation of an existing loan consistent with the accounting for other loan modifications. Additional disclosures relating to modifications to borrowers experiencing financial difficulty are required under ASU 2022-02. ASU 2022-02 also requires disclosure of current-period gross write-offs by year of origination. ASU 2022-02 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The amendments of ASU 2022-02 should be adopted prospectively. The amendments related to the recognition and measurement of TDRs may optionally be adopted using a modified retrospective transition method.

Early adoption is permitted. The Company is currently evaluating the impact on the consolidated financial statements of adopting ASU 2022-02.

ASU No. 2021-01 – 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 discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the 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 on the consolidated financial statements of adopting ASU 2021-01.

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 discontinued due to reference rate reform. The optional expedients for contract modifications apply consistently for all contracts or transactions within the relevant Codification Topic, Subtopic, or Industry Subtopic that contains the guidance that otherwise would be required to be 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 contracts and accounts that are tied to LIBOR and develop a transition plan for the affected items. The Company is currently evaluating the impact on the consolidated financial statements of adopting ASU 2020-04.

NOTE 2 – INVESTMENT SECURITIES

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


(dollars in thousands) Securities available-for-sale	(dollars in thousands) Securities available-for-sale	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		(dollars in thousands) Securities available-for-sale	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2022
September 30, 2022												September 30, 2022
U.S. Treasuries	U.S. Treasuries	$	314,613	$	—	$	—	$	(1,724)	$	312,889	U.S. Treasuries	$	520,085	$	—	$	—	$	(16,275)	$	503,810
U.S. government-sponsored agencies	U.S. government-sponsored agencies	2,050		—		—		(29)		2,021		U.S. government-sponsored agencies	1,039		—		—		(62)		977
State, county and municipal securities	State, county and municipal securities	41,428		—		261		(726)		40,963		State, county and municipal securities	40,842		—		10		(1,584)		39,268
Corporate debt securities	Corporate debt securities	15,897		(88)		2		(348)		15,463		Corporate debt securities	15,897		(79)		—		(522)		15,296
SBA pool securities	SBA pool securities	35,854		—		6		(1,429)		34,431		SBA pool securities	31,063		—		4		(2,216)		28,851
Mortgage-backed securities	Mortgage-backed securities	658,508		—		420		(12,427)		646,501		Mortgage-backed securities	710,523		—		12		(43,588)		666,947
Total debt securities available-for-sale	Total debt securities available-for-sale	$	1,068,350	$	(88)	$	689	$	(16,683)	$	1,052,268	Total debt securities available-for-sale	$	1,319,449	$	(79)	$	26	$	(64,247)	$	1,255,149

December 31, 2021	December 31, 2021											December 31, 2021

U.S. government-sponsored agencies	U.S. government-sponsored agencies	$	7,084	$	—	$	88	$	—	$	7,172	U.S. government-sponsored agencies	$	7,084	$	—	$	88	$	—	$	7,172
State, county and municipal securities	State, county and municipal securities	45,470		—		2,342		—		47,812		State, county and municipal securities	45,470		—		2,342		—		47,812
Corporate debt securities	Corporate debt securities	27,897		—		719		(120)		28,496		Corporate debt securities	27,897		—		719		(120)		28,496
SBA pool securities	SBA pool securities	44,312		—		958		(69)		45,201		SBA pool securities	44,312		—		958		(69)		45,201
Mortgage-backed securities	Mortgage-backed securities	448,124		—		15,822		(6)		463,940		Mortgage-backed securities	448,124		—		15,822		(6)		463,940
Total debt securities available-for-sale	Total debt securities available-for-sale	$	572,887	$	—	$	19,929	$	(195)	$	592,621	Total debt securities available-for-sale	$	572,887	$	—	$	19,929	$	(195)	$	592,621

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


(dollars in thousands) Securities held-to-maturity	(dollars in thousands) Securities held-to-maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		(dollars in thousands) Securities held-to-maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
June 30, 2022
September 30, 2022										September 30, 2022

State, county and municipal securities	State, county and municipal securities	$	31,905	$	—	$	(4,279)	$	27,626	State, county and municipal securities	$	31,905	$	—	$	(6,832)	$	25,073

Mortgage-backed securities	Mortgage-backed securities	79,749		—		(10,231)		69,518		Mortgage-backed securities	98,309		—		(15,568)		82,741
Total debt securities held-to-maturity	Total debt securities held-to-maturity	$	111,654	$	—	$	(14,510)	$	97,144	Total debt securities held-to-maturity	$	130,214	$	—	$	(22,400)	$	107,814

December 31, 2021	December 31, 2021									December 31, 2021

State, county and municipal securities	State, county and municipal securities	$	8,905	$	4	$	(198)	$	8,711	State, county and municipal securities	$	8,905	$	4	$	(198)	$	8,711

Mortgage-backed securities	Mortgage-backed securities	70,945		—		(1,450)		69,495		Mortgage-backed securities	70,945		—		(1,450)		69,495
Total debt securities held-to-maturity	Total debt securities held-to-maturity	$	79,850	$	4	$	(1,648)	$	78,206	Total debt securities held-to-maturity	$	79,850	$	4	$	(1,648)	$	78,206

The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity as of ~~June~~September 30, 2022, by contractual maturity are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying these securities may be called or repaid without penalty. Therefore, these securities are not included in the maturity categories in the following maturity summary:


		Available-for-Sale				Held-to-Maturity					Available-for-Sale				Held-to-Maturity
(dollars in thousands)	(dollars in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value		(dollars in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	Due in one year or less	$	6,745	$	6,754	$	—	$	—	Due in one year or less	$	5,874	$	5,861	$	—	$	—
Due from one year to five years	Due from one year to five years	339,429		337,279		—		—		Due from one year to five years	548,134		530,891		—		—
Due from five to ten years	Due from five to ten years	31,462		31,085		—		—		Due from five to ten years	25,568		24,709		—		—
Due after ten years	Due after ten years	32,206		30,649		31,905		27,626		Due after ten years	29,350		26,741		31,905		25,073
Mortgage-backed securities	Mortgage-backed securities	658,508		646,501		79,749		69,518		Mortgage-backed securities	710,523		666,947		98,309		82,741
		$	1,068,350	$	1,052,268	$	111,654	$	97,144		$	1,319,449	$	1,255,149	$	130,214	$	107,814

Securities with a carrying value of approximately ~~$298.2~~$663.6 million and $366.7 million at ~~June~~September 30, 2022 and December 31, 2021, respectively, serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other purposes required or permitted by law.

The following table shows the gross unrealized losses and estimated fair value of available-for-sale securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at ~~June~~September 30, 2022 and December 31, 2021:


		Less Than 12 Months				12 Months or More				Total					Less Than 12 Months				12 Months or More				Total
(dollars in thousands) Securities available-for-sale	(dollars in thousands) Securities available-for-sale	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		(dollars in thousands) Securities available-for-sale	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
June 30, 2022
September 30, 2022														September 30, 2022
U.S. Treasuries	U.S. Treasuries	$	312,889	$	(1,724)	$	—	$	—	$	312,889	$	(1,724)	U.S. Treasuries	$	503,810	$	(16,275)	$	—	$	—	$	503,810	$	(16,275)
U.S. government-sponsored agencies	U.S. government-sponsored agencies	2,021		(29)		—		—		2,021		(29)		U.S. government-sponsored agencies	977		(62)		—		—		977		(62)
State, county and municipal securities	State, county and municipal securities	15,199		(726)		—		—		15,199		(726)		State, county and municipal securities	30,049		(1,584)		—		—		30,049		(1,584)
Corporate debt securities	Corporate debt securities	12,244		(256)		1,320		(92)		13,564		(348)		Corporate debt securities	12,596		(301)		1,200		(221)		13,796		(522)
SBA pool securities	SBA pool securities	31,755		(1,379)		2,310		(50)		34,065		(1,429)		SBA pool securities	26,326		(2,170)		2,191		(46)		28,517		(2,216)
Mortgage-backed securities	Mortgage-backed securities	569,386		(12,427)		1		—		569,387		(12,427)		Mortgage-backed securities	664,877		(43,588)		1		—		664,878		(43,588)
Total debt securities available-for-sale	Total debt securities available-for-sale	$	943,494	$	(16,541)	$	3,631	$	(142)	$	947,125	$	(16,683)	Total debt securities available-for-sale	$	1,238,635	$	(63,980)	$	3,392	$	(267)	$	1,242,027	$	(64,247)

December 31, 2021	December 31, 2021													December 31, 2021

Corporate debt securities	Corporate debt securities	$	—	$	—	$	1,380	$	(120)	$	1,380	$	(120)	Corporate debt securities	$	—	$	—	$	1,380	$	(120)	$	1,380	$	(120)
SBA pool securities	SBA pool securities	1,312		(6)		2,572		(63)		3,884		(69)		SBA pool securities	1,312		(6)		2,572		(63)		3,884		(69)
Mortgage-backed securities	Mortgage-backed securities	5,514		(6)		1		—		5,515		(6)		Mortgage-backed securities	5,514		(6)		1		—		5,515		(6)
Total debt securities available-for-sale	Total debt securities available-for-sale	$	6,826	$	(12)	$	3,953	$	(183)	$	10,779	$	(195)	Total debt securities available-for-sale	$	6,826	$	(12)	$	3,953	$	(183)	$	10,779	$	(195)

As of ~~June~~September 30, 2022, the Company’s available-for-sale security portfolio consisted of ~~433~~441 securities, ~~331~~425 of which were in an unrealized loss position. At ~~June~~September 30, 2022, the Company held ~~270~~338 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. At ~~June~~September 30, 2022, the Company held 33 U.S. Small Business Administration (“SBA”) pool securities, 1230 state, county and municipal securities, 4five corporate securities, 2one U.S. government-sponsored agency ~~securities,~~security, and ~~10 US~~18 U.S. Treasury securities that were in an unrealized loss position.

The following table shows the gross unrealized losses and estimated fair value of held-to-maturity securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at ~~June~~September 30, ~~2022:~~2022 and December 31, 2021:


		Less Than 12 Months				12 Months or More				Total					Less Than 12 Months				12 Months or More				Total
(dollars in thousands) Securities held-to-maturity	(dollars in thousands) Securities held-to-maturity	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		(dollars in thousands) Securities held-to-maturity	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
June 30, 2022
September 30, 2022														September 30, 2022

State, county and municipal securities	State, county and municipal securities	$	27,626	$	(4,279)	$	—	$	—	$	27,626	$	(4,279)	State, county and municipal securities	$	24,323	$	(6,382)	$	750	$	(450)	$	25,073	$	(6,832)

Mortgage-backed securities	Mortgage-backed securities	69,518		(10,231)		—		—		69,518		(10,231)		Mortgage-backed securities	36,036		(3,065)		46,705		(12,503)		82,741		(15,568)
Total debt securities held-to-maturity	Total debt securities held-to-maturity	$	97,144	$	(14,510)	$	—	$	—	$	97,144	$	(14,510)	Total debt securities held-to-maturity	$	60,359	$	(9,447)	$	47,455	$	(12,953)	$	107,814	$	(22,400)

December 31, 2021	December 31, 2021													December 31, 2021

State, county and municipal securities	State, county and municipal securities	$	3,707	$	(198)	$	—	$	—	$	3,707	$	(198)	State, county and municipal securities	$	3,707	$	(198)	$	—	$	—	$	3,707	$	(198)

Mortgage-backed securities	Mortgage-backed securities	69,495		(1,450)		—		—		69,495		(1,450)		Mortgage-backed securities	69,495		(1,450)		—		—		69,495		(1,450)
Total debt securities held-to-maturity	Total debt securities held-to-maturity	$	73,202	$	(1,648)	$	—	$	—	$	73,202	$	(1,648)	Total debt securities held-to-maturity	$	73,202	$	(1,648)	$	—	$	—	$	73,202	$	(1,648)

As of ~~June~~September 30, 2022, the Company’s held-to-maturity security portfolio consisted of 1924 securities, 19all of which were in an unrealized loss position. At ~~June~~September 30, 2022, the Company held 1318 mortgage-backed securities and 6six state, county and municipal securities that were in an unrealized loss position.

During 2022 and 2021, the Company received timely and current interest and principal payments on all of the securities classified as corporate debt securities. The Company’s investments in 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 ~~June~~September 30, 2022 or December 31, 2021.

At ~~June~~September 30, 2022 and December 31, 2021, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.

Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. The Company does not intend to sell these available-for-sale investment securities at an unrealized loss position at ~~June~~September 30, 2022, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at ~~June~~September 30, 2022, management determined that ~~$88,000~~$79,000 was attributable to credit impairment and an allowance for credit losses was recorded. The remaining ~~$16.7~~$64.2 million in unrealized loss was determined to be from factors other than credit.


(dollars in thousands)	(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,				(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Allowance for credit losses	Allowance for credit losses	2022		2021		2022		2021		Allowance for credit losses	2022		2021		2022		2021
Beginning balance	Beginning balance	$	—	$	101	$	—	$	112	Beginning balance	$	88	$	81	$	—	$	112
Provision for expected credit losses	Provision for expected credit losses	88		(20)		88		(31)		Provision for expected credit losses	(9)		(81)		79		(112)
Ending balance	Ending balance	$	88	$	81	$	88	$	81	Ending balance	$	79	$	—	$	79	$	—

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

Total net gain (loss) on securities reported on the consolidated statements of income and comprehensive income is comprised of the following for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2022		2021		2022		2021		(dollars in thousands)	2022		2021		2022		2021

Unrealized holding gains (losses) on equity securities	Unrealized holding gains (losses) on equity securities	$	(22)	$	1	$	(49)	$	(11)	Unrealized holding gains (losses) on equity securities	$	(21)	$	(2)	$	(70)	$	(13)
Net realized gains on sales of other investments	Net realized gains on sales of other investments	270		—		270		—		Net realized gains on sales of other investments	—		532		270		532
Net gain (loss) on securities	Net gain (loss) on securities	$	248	$	1	$	221	$	(11)	Net gain (loss) on securities	$	(21)	$	530	$	200	$	519

NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Commercial, financial and agricultural	Commercial, financial and agricultural	$	2,022,845	$	1,875,993	Commercial, financial and agricultural	$	2,245,287	$	1,875,993
Consumer installment	Consumer installment	167,237		191,298		Consumer installment	162,345		191,298
Indirect automobile	Indirect automobile	172,245		265,779		Indirect automobile	137,183		265,779
Mortgage warehouse	Mortgage warehouse	949,191		787,837		Mortgage warehouse	980,342		787,837
Municipal	Municipal	529,268		572,701		Municipal	516,797		572,701
Premium finance	Premium finance	942,357		798,409		Premium finance	1,062,724		798,409
Real estate – construction and development	Real estate – construction and development	1,747,284		1,452,339		Real estate – construction and development	2,009,726		1,452,339
Real estate – commercial and farmland	Real estate – commercial and farmland	7,156,017		6,834,917		Real estate – commercial and farmland	7,516,309		6,834,917
Real estate – residential	Real estate – residential	3,874,578		3,094,985		Real estate – residential	4,176,143		3,094,985
		$	17,561,022	$	15,874,258		$	18,806,856	$	15,874,258

Accrued interest receivable on loans is reported in other assets on the consolidated balance sheets totaling ~~$53.1~~$55.4 million and $54.8 million at ~~June~~September 30, 2022 and December 31, 2021, respectively. The Company recorded an allowance for credit losses of $0 and $214,000 related to deferred interest on loans modified under its Disaster Relief Program at ~~June~~September 30, 2022 and December 31, 2021, 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 to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest, or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment, approved by the Company’s Chief Credit Officer. Past-due loans are loans whose principal or interest is past due 30 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Commercial, financial and agricultural	Commercial, financial and agricultural	$	11,742	$	14,214	Commercial, financial and agricultural	$	10,344	$	14,214
Consumer installment	Consumer installment	473		476		Consumer installment	412		476
Indirect automobile	Indirect automobile	465		947		Indirect automobile	393		947

Real estate – construction and development	Real estate – construction and development	178		492		Real estate – construction and development	168		492
Real estate – commercial and farmland	Real estate – commercial and farmland	21,158		15,365		Real estate – commercial and farmland	14,172		15,365
Real estate – residential	Real estate – residential	88,896		53,772		Real estate – residential	93,187		53,772
		$	122,912	$	85,266		$	118,676	$	85,266

There was no interest income recognized on nonaccrual loans during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Commercial, financial and agricultural	Commercial, financial and agricultural	$	—	$	164	Commercial, financial and agricultural	$	—	$	164

Real estate – construction and development	Real estate – construction and development	—		209		Real estate – construction and development	—		209
Real estate – commercial and farmland	Real estate – commercial and farmland	2,448		2,061		Real estate – commercial and farmland	2,715		2,061
Real estate – residential	Real estate – residential	5,071		7,942		Real estate – residential	4,142		7,942
		$	7,519	$	10,376		$	6,857	$	10,376

The following table presents an analysis of past-due loans as of ~~June~~September 30, 2022 and December 31, 2021:


(dollars in thousands)	(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
June 30, 2022
September 30, 2022																September 30, 2022
Commercial, financial and agricultural	Commercial, financial and agricultural	$	3,822	$	3,725	$	11,063	$	18,610	$	2,004,235	$	2,022,845	$	1,697	Commercial, financial and agricultural	$	7,515	$	2,494	$	10,382	$	20,391	$	2,224,896	$	2,245,287	$	2,075
Consumer installment	Consumer installment	1,132		739		699		2,570		164,667		167,237		466		Consumer installment	1,379		763		706		2,848		159,497		162,345		519
Indirect automobile	Indirect automobile	394		137		296		827		171,418		172,245		—		Indirect automobile	422		169		230		821		136,362		137,183
Mortgage warehouse	Mortgage warehouse	—		—		—		—		949,191		949,191		—		Mortgage warehouse	—		—		—		—		980,342		980,342		—
Municipal	Municipal	—		—		—		—		529,268		529,268		—		Municipal	—		—		—		—		516,797		516,797		—
Premium finance	Premium finance	7,462		6,398		5,795		19,655		922,702		942,357		5,795		Premium finance	12,432		7,499		9,340		29,271		1,033,453		1,062,724		9,340
Real estate – construction and development	Real estate – construction and development	18,050		5,677		633		24,360		1,722,924		1,747,284		584		Real estate – construction and development	20,430		2,003		492		22,925		1,986,801		2,009,726		444
Real estate – commercial and farmland	Real estate – commercial and farmland	2,706		11,334		3,666		17,705		7,138,312		7,156,017		—		Real estate – commercial and farmland	2,465		372		11,441		14,278		7,502,031		7,516,309		—
Real estate – residential	Real estate – residential	27,385		8,877		86,400		122,662		3,751,916		3,874,578		—		Real estate – residential	26,599		8,256		90,488		125,343		4,050,800		4,176,143		—
Total	Total	$	60,951	$	36,887	$	108,552	$	206,389	$	17,354,633	$	17,561,022	$	8,542	Total	$	71,242	$	21,556	$	123,079	$	215,877	$	18,590,979	$	18,806,856	$	12,378

December 31, 2021	December 31, 2021															December 31, 2021
Commercial, financial and agricultural	Commercial, financial and agricultural	$	3,431	$	2,005	$	12,017	$	17,453	$	1,858,540	$	1,875,993	$	1,165	Commercial, financial and agricultural	$	3,431	$	2,005	$	12,017	$	17,453	$	1,858,540	$	1,875,993	$	1,165
Consumer installment	Consumer installment	1,786		871		891		3,548		187,750		191,298		584		Consumer installment	1,786		871		891		3,548		187,750		191,298		584
Indirect automobile	Indirect automobile	772		185		473		1,430		264,349		265,779		—		Indirect automobile	772		185		473		1,430		264,349		265,779		—
Mortgage warehouse	Mortgage warehouse	—		—		—		—		787,837		787,837		—		Mortgage warehouse	—		—		—		—		787,837		787,837		—
Municipal	Municipal	—		—		—		—		572,701		572,701		—		Municipal	—		—		—		—		572,701		572,701		—
Premium finance	Premium finance	6,992		4,340		9,134		20,466		777,943		798,409		9,134		Premium finance	6,992		4,340		9,134		20,466		777,943		798,409		9,134
Real estate – construction and development	Real estate – construction and development	16,601		1,398		2,190		20,189		1,432,150		1,452,339		1,758		Real estate – construction and development	16,601		1,398		2,190		20,189		1,432,150		1,452,339		1,758
Real estate – commercial and farmland	Real estate – commercial and farmland	6,713		1,150		5,924		13,787		6,821,130		6,834,917		7		Real estate – commercial and farmland	6,713		1,150		5,924		13,787		6,821,130		6,834,917		7
Real estate – residential	Real estate – residential	17,729		4,266		49,839		71,834		3,023,151		3,094,985		—		Real estate – residential	17,729		4,266		49,839		71,834		3,023,151		3,094,985		—
Total	Total	$	54,024	$	14,215	$	80,468	$	148,707	$	15,725,551	$	15,874,258	$	12,648	Total	$	54,024	$	14,215	$	80,468	$	148,707	$	15,725,551	$	15,874,258	$	12,648

Collateral-Dependent Loans

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

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


		June 30, 2022				December 31, 2021					September 30, 2022				December 31, 2021
(dollars in thousands)	(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses		(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses
Commercial, financial and agricultural	Commercial, financial and agricultural	$	1,695	$	168	$	2,613	$	723	Commercial, financial and agricultural	$	7,365	$	6,646	$	2,613	$	723

Premium finance	Premium finance	1,136		91		2,989		30		Premium finance	—		—		2,989		30
Real estate – construction and development	Real estate – construction and development	—		—		1,432		45		Real estate – construction and development	280		—		1,432		45
Real estate – commercial and farmland	Real estate – commercial and farmland	22,820		2,096		33,332		6,646		Real estate – commercial and farmland	16,186		1,207		33,332		6,646
Real estate – residential	Real estate – residential	14,317		1,580		11,712		453		Real estate – residential	16,146		2,110		11,712		453
		$	39,968	$	3,935	$	52,078	$	7,897		$	39,977	$	9,963	$	52,078	$	7,897

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:

Pass (Grades 1 - 5) – These grades represent acceptable credit risk to the Company based on factors including creditworthiness of the borrower, current performance and nature of the collateral.

Other Assets Especially Mentioned (Grade 6) – This grade includes loans that exhibit potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

Substandard (Grade 7) – This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

Doubtful (Grade 8) – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

Loss (Grade 9) – This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

The following tables present the loan portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands) as of ~~June~~September 30, 2022 and December 31, 2021. Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the tables below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded 8 or 9 at ~~June~~September 30, 2022 or December 31, 2021.


As of June 30, 2022		Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
		2022		2021		2020		2019		2018		Prior				Total
As of September 30, 2022																			As of September 30, 2022	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
																				2022		2021		2020		2019		2018		Prior				Total

Commercial, Financial and Agricultural	Commercial, Financial and Agricultural															Commercial, Financial and Agricultural
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	527,870	$	637,107	$	214,934	$	143,779	$	85,058	$	59,648	$	331,032		$	1,999,428	Pass	$	818,365	$	585,385	$	193,526	$	122,965	$	69,367	$	50,153	$	382,953		$	2,222,714
6	6	—		151		92		274		160		2,881		794			4,352		6	—		—		105		576		55		2,895		760			4,391
7	7	6,618		1,160		445		3,122		1,400		4,151		2,169			19,065		7	6,407		1,026		714		3,480		1,308		3,079		2,168			18,182

Total commercial, financial and agricultural	Total commercial, financial and agricultural	$	534,488	$	638,418	$	215,471	$	147,175	$	86,618	$	66,680	$	333,995		$	2,022,845	Total commercial, financial and agricultural	$	824,772	$	586,411	$	194,345	$	127,021	$	70,730	$	56,127	$	385,881		$	2,245,287
Consumer Installment	Consumer Installment															Consumer Installment
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	25,920	$	18,153	$	46,134	$	28,754	$	21,530	$	16,607	$	8,804		$	165,902	Pass	$	34,089	$	15,217	$	41,532	$	25,909	$	19,219	$	15,083	$	9,875		$	160,924
6	6	—		—		—		—		—		130		5			135		6	38		—		—		—		—		128		5			171
7	7	24		81		321		169		89		430		86			1,200		7	72		148		290		114		189		399		38			1,250

Total consumer installment	Total consumer installment	$	25,944	$	18,234	$	46,455	$	28,923	$	21,619	$	17,167	$	8,895		$	167,237	Total consumer installment	$	34,199	$	15,365	$	41,822	$	26,023	$	19,408	$	15,610	$	9,918		$	162,345
Indirect Automobile	Indirect Automobile															Indirect Automobile
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	—	$	—	$	—	$	15,350	$	72,999	$	82,645	$	—		$	170,994	Pass	$	—	$	—	$	—	$	13,565	$	60,812	$	61,749	$	—		$	136,126
6	6	—		—		—		—		—		20		—			20		6	—		—		—		—		—		15		—			15
7	7	—		—		—		50		224		957		—			1,231		7	—		—		—		43		194		805		—			1,042

Total indirect automobile	Total indirect automobile	$	—	$	—	$	—	$	15,400	$	73,223	$	83,622	$	—		$	172,245	Total indirect automobile	$	—	$	—	$	—	$	13,608	$	61,006	$	62,569	$	—		$	137,183
Mortgage Warehouse	Mortgage Warehouse															Mortgage Warehouse
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	949,191		$	949,191	Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	942,279		$	942,279

6																			6	—		—		—		—		—		—		18,895			18,895
7																			7	—		—		—		—		—		—		19,168			19,168

Total mortgage warehouse	Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	949,191		$	949,191	Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	980,342		$	980,342
Municipal	Municipal															Municipal
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	10,775	$	43,922	$	194,357	$	13,779	$	4,853	$	261,582	$	—		$	529,268	Pass	$	17,385	$	46,009	$	188,438	$	9,820	$	4,605	$	250,540	$	—		$	516,797

Total municipal	Total municipal	$	10,775	$	43,922	$	194,357	$	13,779	$	4,853	$	261,582	$	—		$	529,268	Total municipal	$	17,385	$	46,009	$	188,438	$	9,820	$	4,605	$	250,540	$	—		$	516,797
Premium Finance	Premium Finance															Premium Finance
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	790,855	$	146,821	$	110	$	—	$	—	$	75	$	—		$	937,861	Pass	$	1,028,078	$	25,252	$	54	$	—	$	—	$	—	$	—		$	1,053,384

7	7	1,766		2,729		1		—		—		—		—			4,496		7	7,692		1,647		1		—		—		—		—			9,340

Total premium finance	Total premium finance	$	792,621	$	149,550	$	111	$	—	$	—	$	75	$	—		$	942,357	Total premium finance	$	1,035,770	$	26,899	$	55	$	—	$	—	$	—	$	—		$	1,062,724
Real Estate – Construction and Development	Real Estate – Construction and Development															Real Estate – Construction and Development
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	380,485	$	844,549	$	299,850	$	128,437	$	12,891	$	30,227	$	26,205		$	1,722,644	Pass	$	666,198	$	798,554	$	307,586	$	128,258	$	8,973	$	26,111	$	30,577		$	1,966,257
6	6	4,330		5,241		432		—		48		580		—			10,631		6	8,341		19,987		432		—		174		189		—			29,123
7	7	216		218		211		26		13,079		259		—			14,009		7	20		286		164		5		13,236		635		—			14,346

Total real estate – construction and development	Total real estate – construction and development	$	385,031	$	850,008	$	300,493	$	128,463	$	26,018	$	31,066	$	26,205		$	1,747,284	Total real estate – construction and development	$	674,559	$	818,827	$	308,182	$	128,263	$	22,383	$	26,935	$	30,577		$	2,009,726


As of June 30, 2022		Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
		2022		2021		2020		2019		2018		Prior				Total
As of September 30, 2022																			As of September 30, 2022	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
																				2022		2021		2020		2019		2018		Prior				Total

Real Estate – Commercial and Farmland	Real Estate – Commercial and Farmland															Real Estate – Commercial and Farmland
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	993,793	$	2,069,024	$	1,150,513	$	891,580	$	496,721	$	1,373,284	$	72,965		$	7,047,880	Pass	$	1,535,883	$	2,039,201	$	1,091,901	$	868,208	$	469,560	$	1,312,867	$	96,329		$	7,413,949
6	6	607		—		—		29,343		1,163		18,007		—			49,120		6	607		119		—		31,118		1,125		19,252		—			52,221
7	7	—		3,259		2,588		13,777		6,967		32,408		18			59,017		7	361		5,235		2,905		11,859		6,734		23,028		17			50,139

Total real estate – commercial and farmland	Total real estate – commercial and farmland	$	994,400	$	2,072,283	$	1,153,101	$	934,700	$	504,851	$	1,423,699	$	72,983		$	7,156,017	Total real estate – commercial and farmland	$	1,536,851	$	2,044,555	$	1,094,806	$	911,185	$	477,419	$	1,355,147	$	96,346		$	7,516,309
Real Estate - Residential	Real Estate - Residential															Real Estate - Residential
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	880,233	$	1,243,230	$	582,823	$	290,790	$	123,347	$	438,034	$	214,894		$	3,773,351	Pass	$	1,249,401	$	1,226,383	$	559,613	$	277,910	$	120,863	$	407,922	$	228,525		$	4,070,617
6	6	64		218		47		608		508		2,680		61			4,186		6	447		147		94		693		369		3,419		422			5,591
7	7	268		9,398		18,956		29,041		14,331		23,395		1,652			97,041		7	1,824		15,915		20,652		26,903		11,772		20,911		1,958			99,935

Total real estate - residential	Total real estate - residential	$	880,565	$	1,252,846	$	601,826	$	320,439	$	138,186	$	464,109	$	216,607		$	3,874,578	Total real estate - residential	$	1,251,672	$	1,242,445	$	580,359	$	305,506	$	133,004	$	432,252	$	230,905		$	4,176,143
Total Loans	Total Loans															Total Loans
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	3,609,931	$	5,002,806	$	2,488,721	$	1,512,469	$	817,399	$	2,262,102	$	1,603,091		$	17,296,519	Pass	$	5,349,399	$	4,736,001	$	2,382,650	$	1,446,635	$	753,399	$	2,124,425	$	1,690,538		$	18,483,047
6	6	5,001		5,610		571		30,225		1,879		24,298		860			68,444		6	9,433		20,253		631		32,387		1,723		25,898		20,082			110,407
7	7	8,892		16,845		22,522		46,185		36,090		61,600		3,925			196,059		7	16,376		24,257		24,726		42,404		33,433		48,857		23,349			213,402

Total loans	Total loans	$	3,623,824	$	5,025,261	$	2,511,814	$	1,588,879	$	855,368	$	2,348,000	$	1,607,876		$	17,561,022	Total loans	$	5,375,208	$	4,780,511	$	2,408,007	$	1,521,426	$	788,555	$	2,199,180	$	1,733,969		$	18,806,856


As of December 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:
Pass	$	903,630	$	279,037	$	188,810	$	118,613	$	50,737	$	40,376	$	262,951		$	1,844,154
6	190		—		393		427		368		1,832		1,961			5,171
7	9,216		1,268		4,098		1,472		2,566		6,019		2,029			26,668


Total commercial, financial and agricultural	$	913,036	$	280,305	$	193,301	$	120,512	$	53,671	$	48,227	$	266,941		$	1,875,993
Consumer Installment
Risk Grade:
Pass	$	35,781	$	59,221	$	37,195	$	27,266	$	9,787	$	11,021	$	9,437		$	189,708
6	—		—		—		—		—		135		5			140
7	59		283		290		216		103		405		94			1,450


Total consumer installment	$	35,840	$	59,504	$	37,485	$	27,482	$	9,890	$	11,561	$	9,536		$	191,298
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	20,276	$	101,969	$	90,294	$	51,468	$	—		$	264,007
6	—		—		—		24		10		19		—			53
7	—		—		55		234		384		1,046		—			1,719


Total indirect automobile	$	—	$	—	$	20,331	$	102,227	$	90,688	$	52,533	$	—		$	265,779


As of December 31, 2021	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2021		2020		2019		2018		2017		Prior				Total

Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	787,837		$	787,837




Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	787,837		$	787,837
Municipal
Risk Grade:
Pass	$	44,727	$	219,385	$	14,831	$	5,494	$	109,040	$	179,224	$	—		$	572,701




Total municipal	$	44,727	$	219,385	$	14,831	$	5,494	$	109,040	$	179,224	$	—		$	572,701
Premium Finance
Risk Grade:
Pass	$	787,884	$	1,059	$	26	$	—	$	302	$	4	$	—		$	789,275

7	9,039		95		—		—		—		—		—			9,134


Total premium finance	$	796,923	$	1,154	$	26	$	—	$	302	$	4	$	—		$	798,409
Real Estate – Construction and Development
Risk Grade:
Pass	$	826,094	$	290,814	$	176,476	$	35,773	$	24,533	$	44,514	$	21,267		$	1,419,471
6	6,527		549		—		15,260		—		2,101		—			24,437
7	1,143		678		7		2,476		57		1,011		3,059			8,431


Total real estate – construction and development	$	833,764	$	292,041	$	176,483	$	53,509	$	24,590	$	47,626	$	24,326		$	1,452,339
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	2,186,291	$	1,205,578	$	1,119,239	$	542,295	$	486,477	$	1,103,675	$	80,379		$	6,723,934
6	416		—		1,036		14,760		5,334		21,665		—			43,211
7	4,709		2,682		11,109		9,076		4,861		35,315		20			67,772


Total real estate – commercial and farmland	$	2,191,416	$	1,208,260	$	1,131,384	$	566,131	$	496,672	$	1,160,655	$	80,399		$	6,834,917
Real Estate - Residential
Risk Grade:
Pass	$	1,171,008	$	638,232	$	329,247	$	149,990	$	108,538	$	408,240	$	217,982		$	3,023,237
6	145		66		1,106		505		356		3,717		49			5,944
7	2,405		10,167		21,239		11,376		4,597		13,970		2,050			65,804


Total real estate - residential	$	1,173,558	$	648,465	$	351,592	$	161,871	$	113,491	$	425,927	$	220,081		$	3,094,985
Total Loans
Risk Grade:
Pass	$	5,955,415	$	2,693,326	$	1,886,100	$	981,400	$	879,708	$	1,838,522	$	1,379,853		$	15,614,324
6	7,278		615		2,535		30,976		6,068		29,469		2,015			78,956
7	26,571		15,173		36,798		24,850		12,568		57,766		7,252			180,978


Total loans	$	5,989,264	$	2,709,114	$	1,925,433	$	1,037,226	$	898,344	$	1,925,757	$	1,389,120		$	15,874,258

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’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 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.

In the normal course of business, the Company modifies loans with a modification of the interest rate or terms that are not deemed to be troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified loans in the first ~~six~~nine months of 2022 and 2021 totaling ~~$214.8~~$296.4 million and ~~$220.8~~$322.8 million, respectively, under such parameters.

As of ~~June~~September 30, 2022 and December 31, 2021, the Company had a balance of ~~$41.8~~$39.8 million and $76.6 million, respectively, in troubled debt restructurings. The Company has recorded ~~$698,000~~$649,000 and $654,000 in previous charge-offs on such loans at ~~June~~September 30, 2022 and December 31, 2021, respectively. The Company’s balance in the allowance for credit losses allocated to such troubled debt restructurings was ~~$2.5~~$2.6 million and $10.5 million at ~~June~~September 30, 2022 and December 31, 2021, respectively. At ~~June~~September 30, 2022, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

The following table presents the loans by class modified as troubled debt restructurings which occurred during the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. These modifications did not have a material impact on the Company’s allowance for credit losses.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021				2022			2021			2022			2021
Loan Class	Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)		Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	Commercial, financial and agricultural	2	$	502	2	$	165	2	$	502	6	$	591	Commercial, financial and agricultural	1	$	450	—	$	—	3	$	916	6	$	532
Consumer installment	Consumer installment	—	—		2	8		—	—		2	8		Consumer installment	—	—		—	—		—	—		2	7

Premium finance	Premium finance	2	756		—	—		6	993		—	—		Premium finance	—	—		—	—		5	456		—	—

Real estate – construction and development														Real estate – construction and development	1	24		—	—		1	24		—	—
Real estate – commercial and farmland	Real estate – commercial and farmland	2	578		3	8,653		2	578		5	16,312		Real estate – commercial and farmland	1	17		—	—		2	99		5	16,257
Real estate – residential	Real estate – residential	2	462		2	472		5	1,437		12	1,457		Real estate – residential	2	268		9	1,818		6	1,335		21	3,270
Total	Total	8	$	2,298	9	$	9,298	15	$	3,510	25	$	18,368	Total	5	$	759	9	$	1,818	17	$	2,830	34	$	20,066

The following table presents the outstanding balance of troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. These defaults did not have a material impact on the Company's allowance for credit losses.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021				2022			2021			2022			2021
Loan Class	Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)		Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	Commercial, financial and agricultural	—	$	—	—	$	—	1	$	357	3	$	49	Commercial, financial and agricultural	—	$	—	1	$	1	1	$	348	1	$	1
Consumer installment	Consumer installment	—	—		—	—		2	3		4	5		Consumer installment	—	—		1	1		2	2		1	1
Indirect automobile	Indirect automobile	3	2		7	27		12	22		22	112		Indirect automobile	3	20		4	23		9	27		16	76

Real estate – construction and development	Real estate – construction and development	—	—		—	—		—	—		1	1		Real estate – construction and development	1	24		—	—		1	24		—	—
Real estate – commercial and farmland	Real estate – commercial and farmland	—	—		1	202		1	8		3	5,382		Real estate – commercial and farmland	—	—		—	—		1	8		—	—
Real estate – residential	Real estate – residential	11	1,071		17	940		21	2,791		27	1,646		Real estate – residential	14	1,398		4	489		23	2,801		15	1,111
Total	Total	14	$	1,073	25	$	1,169	37	$	3,181	60	$	7,195	Total	18	$	1,442	10	$	514	37	$	3,210	33	$	1,189

The following table presents the amount of troubled debt restructurings by loan class classified separately as accrual and nonaccrual at ~~June~~September 30, 2022 and December 31, 2021:


June 30, 2022		Accruing Loans			Non-Accruing Loans
September 30, 2022								September 30, 2022	Accruing Loans			Non-Accruing Loans
Loan Class	Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	Commercial, financial and agricultural	9	$	964	3	$	364	Commercial, financial and agricultural	8	$	1,342	3	$	353
Consumer installment	Consumer installment	4	9		10	14		Consumer installment	4	6		10	12
Indirect automobile	Indirect automobile	196	759		30	122		Indirect automobile	170	595		25	101

Premium finance	Premium finance	6	993		—	—		Premium finance	5	456		—	—
Real estate – construction and development	Real estate – construction and development	2	706		—	—		Real estate – construction and development	2	698		1	24
Real estate – commercial and farmland	Real estate – commercial and farmland	18	8,213		4	788		Real estate – commercial and farmland	17	8,091		3	66
Real estate – residential	Real estate – residential	210	24,456		31	4,369		Real estate – residential	206	24,515		29	3,494
Total	Total	445	$	36,100	78	$	5,657	Total	412	$	35,703	71	$	4,050


December 31, 2021	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	12	$	1,286	6	$	83
Consumer installment	7	16		17	35
Indirect automobile	233	1,037		52	273



Real estate – construction and development	4	789		1	13
Real estate – commercial and farmland	25	35,575		5	5,924
Real estate – residential	213	26,879		39	4,678
Total	494	$	65,582	120	$	11,006

Allowance for Credit Losses on Loans

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

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

treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of 9 (Loss per the regulatory guidance), the uncollectible portion is charged off.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of loans with similar risk characteristics for which the historical loss experience was observed. The Company utilizes a one year reasonable and supportable forecast period. The Company’s methodologies revert back to historical loss information on a straight-line basis over four quarters after the reasonable and supportable forecast period.

During the ~~six~~nine months ended ~~June~~September 30, 2022, the allowance for credit losses increased due to organic loan growth, partially offset by improvement in forecasted macroeconomic factors. The allowance for credit losses was determined at ~~June~~September 30, 2022 using ~~a weighting of four~~the Moody's baseline economic forecasts from Moody's. The Moody's Consensus scenario was weighted at 20%, the downside 75th percentile S-2 scenario was weighted at 30%, the downside 90th percentile S-3 scenario was weighted at 20%, and the stagflation scenario was weighted at 30%.forecast. The allowance for credit losses was determined at December 31, 2021 using a weighting of five economic forecasts from Moody's. The Moody's baseline scenario was weighted at 10%, the downside 75th percentile S-2 scenario was weighted at 10%, the downside 90th percentile S-3 scenario was weighted at 50%, the slower trend growth scenario was weighted at 20% and the stagflation scenario was weighted at 10%. The current forecast reflects, among other things, improvements in forecast levels of home prices, commercial real estate prices and unemployment compared with the forecast at December 31, 2021.

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


Three Months Ended June 30, 2022
Three Months Ended September 30, 2022														Three Months Ended September 30, 2022

(dollars in thousands)	(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance		(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2022		$	25,526	$	5,619	$	373	$	3,010	$	384	$	2,515
Balance, June 30, 2022														Balance, June 30, 2022	$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762

Provision for loan losses	Provision for loan losses	1,738		557		(306)		875		(13)		200		Provision for loan losses	9,568		(244)		(288)		(1,884)		(9)		(638)
Loans charged off	Loans charged off	(4,391)		(1,137)		(41)		—		—		(1,066)		Loans charged off	(4,722)		(1,228)		(50)		—		—		(1,205)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	2,785		230		265		—		—		1,113		Recoveries of loans previously charged off	2,201		277		276		—		—		1,023
Balance, June 30, 2022		$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762
Balance, September 30, 2022														Balance, September 30, 2022	$	32,705	$	4,074	$	229	$	2,001	$	362	$	1,942

		Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total							Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, March 31, 2022		$	26,831	$	67,033	$	29,960	$	161,251
Balance, June 30, 2022														Balance, June 30, 2022	$	23,232	$	59,349	$	51,825	$	172,642

Provision for loan losses	Provision for loan losses	(3,954)		(7,647)		21,777		13,227						Provision for loan losses	3,227		(1,200)		8,937		17,469
Loans charged off	Loans charged off	—		(81)		(137)		(6,853)						Loans charged off	—		(2,014)		(53)		(9,272)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	355		44		225		5,017						Recoveries of loans previously charged off	96		96		83		4,052
Balance, June 30, 2022		$	23,232	$	59,349	$	51,825	$	172,642
Balance, September 30, 2022														Balance, September 30, 2022	$	26,555	$	56,231	$	60,792	$	184,891

Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022														Nine Months Ended September 30, 2022

(dollars in thousands)	(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance		(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2021	Balance, December 31, 2021	$	26,829	$	6,097	$	476	$	3,231	$	401	$	2,729	Balance, December 31, 2021	$	26,829	$	6,097	$	476	$	3,231	$	401	$	2,729

Provision for loan losses	Provision for loan losses	1,953		1,346		(596)		654		(30)		108		Provision for loan losses	11,521		1,102		(884)		(1,230)		(39)		(530)
Loans charged off	Loans charged off	(8,805)		(2,562)		(129)		—		—		(2,435)		Loans charged off	(13,527)		(3,790)		(179)		—		—		(3,640)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	5,681		388		540		—		—		2,360		Recoveries of loans previously charged off	7,882		665		816		—		—		3,383
Balance, June 30, 2022		$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762
Balance, September 30, 2022														Balance, September 30, 2022	$	32,705	$	4,074	$	229	$	2,001	$	362	$	1,942

		Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total							Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2021	Balance, December 31, 2021	$	22,045	$	77,831	$	27,943	$	167,582					Balance, December 31, 2021	$	22,045	$	77,831	$	27,943	$	167,582

Provision for loan losses	Provision for loan losses	614		(17,199)		23,643		10,493						Provision for loan losses	3,841		(18,399)		32,580		27,962
Loans charged off	Loans charged off	—		(1,364)		(137)		(15,432)						Loans charged off	—		(3,378)		(190)		(24,704)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	573		81		376		9,999						Recoveries of loans previously charged off	669		177		459		14,051
Balance, June 30, 2022		$	23,232	$	59,349	$	51,825	$	172,642
Balance, September 30, 2022														Balance, September 30, 2022	$	26,555	$	56,231	$	60,792	$	184,891

Three Months Ended June 30, 2021
(dollars in thousands) Commercial,
Financial and
Agricultural Consumer
Installment Indirect Automobile Mortgage Warehouse Municipal Premium Finance
Balance, March 31, 2021 $ 8,291 $ 8,790 $ 1,272 $ 3,521 $ 790 $ 4,100
Provision for loan losses 1,502 491 (423) (156) (13) (833)
Loans charged off (3,529) (1,669) (141) — — (1,194)
Recoveries of loans previously charged off 625 212 372 — — 2,466
Balance, June 30, 2021 $ 6,889 $ 7,824 $ 1,080 $ 3,365 $ 777 $ 4,539
Real Estate – Construction and Development Real Estate –
Commercial and
Farmland Real Estate –
Residential Total
Balance, March 31, 2021 $ 22,858 $ 91,211 $ 37,737 $ 178,570
Provision for loan losses (3,757) (3,031) 5,321 (899)
Loans charged off (186) (27) (392) (7,138)
Recoveries of loans previously charged off 84 185 593 4,537
Balance, June 30, 2021 $ 18,999 $ 88,338 $ 43,259 $ 175,070
Six Months Ended June 30, 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 4,077 6,297 (951) (301) (14) (391)
Loans charged off (5,899) (3,117) (970) — — (2,537)
Recoveries of loans previously charged off 1,352 568 1,072 — — 3,588
Balance, June 30, 2021 $ 6,889 $ 7,824 $ 1,080 $ 3,365 $ 777 $ 4,539
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 (26,344) 640 (491) (17,478)
Loans charged off (212) (1,422) (555) (14,712)
Recoveries of loans previously charged off 251 226 781 7,838
Balance, June 30, 2021 $ 18,999 $ 88,338 $ 43,259 $ 175,070

~~NOTE 4 – 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 June 30, 2022 and December 31, 2021, all securities sold under agreements to repurchase mature on a daily basis. The market value of the securities fluctuates 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 falls 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 June 30, 2022 and December 31, 2021:~~


Three Months Ended September 30, 2021						Three Months Ended September 30, 2021

(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Securities sold under agreements to repurchase		$	953	$	5,845
Balance, June 30, 2021						Balance, June 30, 2021	$	6,889	$	7,824	$	1,080	$	3,365	$	777	$	4,539

Provision for loan losses						Provision for loan losses	(1,471)		3,063		(268)		(287)		(27)		(456)
Loans charged off						Loans charged off	(858)		(1,647)		(178)		—		—		(605)
Recoveries of loans previously charged off						Recoveries of loans previously charged off	1,986		199		278		—		—		649
Balance, September 30, 2021						Balance, September 30, 2021	$	6,546	$	9,439	$	912	$	3,078	$	750	$	4,127

							Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, June 30, 2021						Balance, June 30, 2021	$	18,999	$	88,338	$	43,259	$	175,070

Provision for loan losses						Provision for loan losses	(6,423)		87		1,798		(3,984)
Loans charged off						Loans charged off	—		(210)		(39)		(3,537)
Recoveries of loans previously charged off						Recoveries of loans previously charged off	45		266		241		3,664
Balance, September 30, 2021						Balance, September 30, 2021	$	12,621	$	88,481	$	45,259	$	171,213

Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2021

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

Provision for loan losses						Provision for loan losses	2,606		9,360		(1,219)		(588)		(41)		(847)
Loans charged off						Loans charged off	(6,757)		(4,764)		(1,148)		—		—		(3,142)
Recoveries of loans previously charged off						Recoveries of loans previously charged off	3,338		767		1,350		—		—		4,237
Balance, September 30, 2021						Balance, September 30, 2021	$	6,546	$	9,439	$	912	$	3,078	$	750	$	4,127

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

Provision for loan losses						Provision for loan losses	(32,767)		727		1,307		(21,462)
Loans charged off						Loans charged off	(212)		(1,632)		(594)		(18,249)
Recoveries of loans previously charged off						Recoveries of loans previously charged off	296		492		1,022		11,502
Balance, September 30, 2021						Balance, September 30, 2021	$	12,621	$	88,481	$	45,259	$	171,213

~~At June 30, 2022 and December 31, 2021 the investment securities underlying these agreements included state, county and municipal securities and mortgage-backed securities.~~

NOTE 54 – OTHER BORROWINGS

Other borrowings consist of the following:


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
FHLB borrowings:	FHLB borrowings:					FHLB borrowings:
Fixed Rate Advance due October 20, 2022; fixed interest rate of 3.15%						Fixed Rate Advance due October 20, 2022; fixed interest rate of 3.15%	$	100,000	$	—
Fixed Rate Advance due October 24, 2022; fixed interest rate of 3.10%						Fixed Rate Advance due October 24, 2022; fixed interest rate of 3.10%	100,000		—
Fixed Rate Advance due October 24, 2022; fixed interest rate of 3.10%						Fixed Rate Advance due October 24, 2022; fixed interest rate of 3.10%	100,000		—
Fixed Rate Advance due March 3, 2025; fixed interest rate of 1.208%	Fixed Rate Advance due March 3, 2025; fixed interest rate of 1.208%	$	15,000	$	15,000	Fixed Rate Advance due March 3, 2025; fixed interest rate of 1.208%	15,000		15,000
Fixed Rate Advance due March 2, 2027; fixed interest rate of 1.445%	Fixed Rate Advance due March 2, 2027; fixed interest rate of 1.445%	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%	Fixed Rate Advance due March 4, 2030; fixed interest rate of 1.606%	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%	Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	1,394		1,400		Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	1,391		1,400
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	965		969		Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	963		969
Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	1,348		1,421		Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	1,312		1,421

Subordinated notes payable:	Subordinated notes payable:					Subordinated notes payable:
Subordinated notes payable due June 1, 2026, net of unaccreted purchase accounting fair value adjustment of $— and $500, respectively; fixed interest rate of 5.50%	Subordinated notes payable due June 1, 2026, net of unaccreted purchase accounting fair value adjustment of $— and $500, respectively; fixed interest rate of 5.50%	—		50,500		Subordinated notes payable due June 1, 2026, net of unaccreted purchase accounting fair value adjustment of $— and $500, respectively; fixed interest rate of 5.50%	—		50,500
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $616 and $681, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%		74,384		74,319
Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,801 and $1,923, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%		118,199		118,077
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $967 and $1,028, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month LIBOR plus 3.63%		75,967		76,028
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,665 and $1,766, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%		108,335		108,234
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $583 and $681, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%						Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $583 and $681, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%	74,417		74,319
Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,740 and $1,923, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%						Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,740 and $1,923, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%	118,260		118,077
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $936 and $1,028, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month LIBOR plus 3.63%						Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $936 and $1,028, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month LIBOR plus 3.63%	75,936		76,028
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,615 and $1,766, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%						Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,615 and $1,766, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%	108,385		108,234
Securitization Facilities:	Securitization Facilities:					Securitization Facilities:
Equipment contract backed notes, Series 2018-1 (BCC XIV) due on various dates through 2025 and bear a weighted-average interest rate of 5.11%	Equipment contract backed notes, Series 2018-1 (BCC XIV) due on various dates through 2025 and bear a weighted-average interest rate of 5.11%	—		19,199		Equipment contract backed notes, Series 2018-1 (BCC XIV) due on various dates through 2025 and bear a weighted-average interest rate of 5.11%	—		19,199
Equipment contract backed notes, Series 2019-1 (BCC XVI) due on various dates through 2027 and bear a weighted-average interest rate of 2.84%	Equipment contract backed notes, Series 2019-1 (BCC XVI) due on various dates through 2027 and bear a weighted-average interest rate of 2.84%	—		139,329		Equipment contract backed notes, Series 2019-1 (BCC XVI) due on various dates through 2027 and bear a weighted-average interest rate of 2.84%	—		139,329
Equipment contract backed notes, Series 2020-1 (BCC XVII) due on various dates through 2027 and bear a weighted-average interest rate of 1.48%	Equipment contract backed notes, Series 2020-1 (BCC XVII) due on various dates through 2027 and bear a weighted-average interest rate of 1.48%	—		105,403		Equipment contract backed notes, Series 2020-1 (BCC XVII) due on various dates through 2027 and bear a weighted-average interest rate of 1.48%	—		105,403
		$	425,592	$	739,879		$	725,664	$	739,879

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 ~~June~~September 30, 2022, ~~$4.19~~$4.00 billion was available for borrowing on lines with the FHLB.

As of ~~June~~September 30, 2022, the Bank maintained credit arrangements with various financial institutions to purchase federal funds up to $127.0 million.

The Bank also participates in the Federal Reserve discount window borrowings program. At ~~June~~September 30, 2022, the Bank had ~~$2.91~~$3.15 billion of loans pledged at the Federal Reserve discount window and had ~~$2.21~~$2.36 billion available for borrowing.

NOTE 65 – 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. The reclassification for gains included in net income is recorded in net gain (loss) on securities in the consolidated statement of income and comprehensive income.

The following table presents a summary of the accumulated other comprehensive income balances as well as changes in each of the respective components, net of tax, for the periods indicated:


(dollars in thousands)	(dollars in thousands)	Unrealized Gain (Loss) on Securities		Accumulated Other Comprehensive Income (Loss)		(dollars in thousands)	Unrealized Gain (Loss) on Securities		Accumulated Other Comprehensive Income (Loss)
Three Months Ended June 30, 2022
Balance, March 31, 2022		$	(1,841)	$	(1,841)
Three Months Ended September 30, 2022						Three Months Ended September 30, 2022
Balance, June 30, 2022						Balance, June 30, 2022	$	(12,635)	$	(12,635)
Reclassification for gains included in net income, net of tax	Reclassification for gains included in net income, net of tax	—		—		Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	Current year changes, net of tax	(10,794)		(10,794)		Current year changes, net of tax	(38,099)		(38,099)
Balance, June 30, 2022		$	(12,635)	$	(12,635)
Balance, September 30, 2022						Balance, September 30, 2022	$	(50,734)	$	(50,734)

Three Months Ended June 30, 2021
Balance, March 31, 2021		$	26,090	$	26,090
Three Months Ended September 30, 2021						Three Months Ended September 30, 2021
Balance, June 30, 2021						Balance, June 30, 2021	$	25,024	$	25,024
Reclassification for gains included in net income, net of tax	Reclassification for gains included in net income, net of tax	—		—		Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	Current year changes, net of tax	(1,066)		(1,066)		Current year changes, net of tax	(3,139)		(3,139)
Balance, June 30, 2021		$	25,024	$	25,024
Balance, September 30, 2021						Balance, September 30, 2021	$	21,885	$	21,885

Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2022
Balance, December 31, 2021	Balance, December 31, 2021	$	15,590	$	15,590	Balance, December 31, 2021	$	15,590	$	15,590
Reclassification for gains included in net income, net of tax	Reclassification for gains included in net income, net of tax	—		—		Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	Current year changes, net of tax	(28,225)		(28,225)		Current year changes, net of tax	(66,324)		(66,324)
Balance, June 30, 2022		$	(12,635)	$	(12,635)
Balance, September 30, 2022						Balance, September 30, 2022	$	(50,734)	$	(50,734)

Six Months Ended June 30, 2021
Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2021
Balance, December 31, 2020	Balance, December 31, 2020	$	33,505	$	33,505	Balance, December 31, 2020	$	33,505	$	33,505
Reclassification for gains included in net income, net of tax	Reclassification for gains included in net income, net of tax	—		—		Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	Current year changes, net of tax	(8,481)		(8,481)		Current year changes, net of tax	(11,620)		(11,620)
Balance, June 30, 2021		$	25,024	$	25,024
Balance, September 30, 2021						Balance, September 30, 2021	$	21,885	$	21,885

NOTE 76 – WEIGHTED AVERAGE SHARES OUTSTANDING

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


		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended September 30,		Nine Months Ended September 30,
(share data in thousands)	(share data in thousands)	2022	2021	2022	2021	(share data in thousands)	2022	2021	2022	2021
Average common shares outstanding	Average common shares outstanding	69,136	69,497	69,246	69,448	Average common shares outstanding	69,125	69,440	69,213	69,445
Common share equivalents:	Common share equivalents:					Common share equivalents:
Stock options	Stock options	16	64	24	74	Stock options	11	49	20	65
Nonvested restricted share grants	Nonvested restricted share grants	46	151	97	153	Nonvested restricted share grants	59	142	73	143
Performance stock units	Performance stock units	118	80	118	90	Performance stock units	132	125	122	119
Average common shares outstanding, assuming dilution	Average common shares outstanding, assuming dilution	69,316	69,792	69,485	69,765	Average common shares outstanding, assuming dilution	69,327	69,756	69,428	69,772

For the three ~~months~~and nine-month periods ended ~~June~~September 30, 2022 and 2021, there ~~were 33,536 anti-dilutive performance stock units excluded from the computation of earnings per share. There~~ were no anti-dilutive securities excluded from the computation of earnings per ~~share for the six months ended June 30, 2022 or for the three- and six-months ended June 30, 2021.~~share.

NOTE 87 – 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)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Mortgage loans held for sale	Mortgage loans held for sale	$	555,039	$	1,247,997	Mortgage loans held for sale	$	295,458	$	1,247,997
SBA loans held for sale	SBA loans held for sale	626		6,635		SBA loans held for sale	2,529		6,635
Total loans held for sale	Total loans held for sale	$	555,665	$	1,254,632	Total loans held for sale	$	297,987	$	1,254,632

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 gain~~Net losses of ~~$11.2~~$11.9 million and ~~a net loss of $32.7~~$44.7 million resulting from changes in fair value of these mortgage loans ~~was~~were recorded in income during the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, a net gain of ~~$10.0~~$5.8 million and a net loss of ~~$15.1~~$9.3 million, respectively, resulting from changes in fair value of these mortgage loans ~~was~~were recorded in income. ~~A net losses~~Net gains of ~~$27.1~~$11.7 million and ~~$1.2~~$10.5 million, respectively, 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 ~~was~~were recorded in income during the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, a net ~~losses~~gain of ~~$45.1~~$7.3 million and ~~$17.6~~a net loss of $10.3 million, respectively, resulting from changes in the fair value of the related derivative financial instruments ~~was~~were recorded in income. The changes 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 ~~June~~September 30, 2022 and December 31, 2021:


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Aggregate fair value of mortgage loans held for sale	Aggregate fair value of mortgage loans held for sale	$	555,039	$	1,247,997	Aggregate fair value of mortgage loans held for sale	$	295,458	$	1,247,997
Aggregate unpaid principal balance of mortgage loans held for sale	Aggregate unpaid principal balance of mortgage loans held for sale	551,420		1,211,646		Aggregate unpaid principal balance of mortgage loans held for sale	303,786		1,211,646
Past-due loans of 90 days or more	Past-due loans of 90 days or more	694		746		Past-due loans of 90 days or more	464		746
Nonaccrual loans	Nonaccrual loans	694		746		Nonaccrual loans	464		746
Unpaid principal balance of nonaccrual loans	Unpaid principal balance of nonaccrual loans	712		718		Unpaid principal balance of nonaccrual loans	464		718

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 ~~June~~September 30, 2022 and December 31, 2021:


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Aggregate fair value of SBA loans held for sale	Aggregate fair value of SBA loans held for sale	$	626	$	6,635	Aggregate fair value of SBA loans held for sale	$	2,529	$	6,635
Aggregate unpaid principal balance of SBA loans held for sale	Aggregate unpaid principal balance of SBA loans held for sale	565		5,825		Aggregate unpaid principal balance of SBA loans held for sale	2,177		5,825
Past-due loans of 90 days or more	Past-due loans of 90 days or more	—		—		Past-due loans of 90 days or more	—		—
Nonaccrual loans	Nonaccrual loans	—		—		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, loans held for sale under the fair value option and derivative financial instruments are recorded at fair value on a recurring basis. From time to time, the Company may be required to record at fair

value other assets on a nonrecurring basis, such as collateral-dependent loans, loan servicing rights and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of ~~June~~September 30, 2022 and December 31, 2021:


		Recurring Basis Fair Value Measurements									Recurring Basis Fair Value Measurements
		June 30, 2022									September 30, 2022
(dollars in thousands)	(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3		(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:	Financial assets:									Financial assets:
Investment securities available-for-sale:	Investment securities available-for-sale:									Investment securities available-for-sale:
U.S. Treasuries	U.S. Treasuries	$	312,889	$	312,889	$	—	$	—	U.S. Treasuries	$	503,810	$	503,810	$	—	$	—
U.S. government sponsored agencies	U.S. government sponsored agencies	2,021		—		2,021		—		U.S. government sponsored agencies	977		—		977		—
State, county and municipal securities	State, county and municipal securities	40,963		—		40,963		—		State, county and municipal securities	39,268		—		39,268		—
Corporate debt securities	Corporate debt securities	15,463		—		14,143		1,320		Corporate debt securities	15,296		—		14,096		1,200
SBA pool securities	SBA pool securities	34,431		—		34,431		—		SBA pool securities	28,851		—		28,851		—
Mortgage-backed securities	Mortgage-backed securities	646,501		—		646,501		—		Mortgage-backed securities	666,947		—		666,947		—
Loans held for sale	Loans held for sale	555,665		—		555,665		—		Loans held for sale	297,987		—		297,987		—
Mortgage banking derivative instruments	Mortgage banking derivative instruments	10,079		—		10,079		—		Mortgage banking derivative instruments	23,446		—		23,446		—
Total recurring assets at fair value	Total recurring assets at fair value	$	1,618,012	$	312,889	$	1,303,803	$	1,320	Total recurring assets at fair value	$	1,576,582	$	503,810	$	1,071,572	$	1,200

Financial liabilities:										Financial liabilities:
Mortgage banking derivative instruments										Mortgage banking derivative instruments	$	1,681	$	—	$	1,681	$	—
Total recurring liabilities at fair value										Total recurring liabilities at fair value	$	1,681	$	—	$	1,681	$	—


	Recurring Basis Fair Value Measurements
	December 31, 2021
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
Investment securities available-for-sale:
U.S. government sponsored agencies	$	7,172	$	—	$	7,172	$	—
State, county and municipal securities	47,812		—		47,812		—
Corporate debt securities	28,496		—		27,116		1,380
SBA pool securities	45,201		—		45,201		—
Mortgage-backed securities	463,940		—		463,940		—
Loans held for sale	1,254,632		—		1,254,632		—
Mortgage banking derivative instruments	11,940		—		11,940		—
Total recurring assets at fair value	$	1,859,193	$	—	$	1,857,813	$	1,380
Financial liabilities:
Mortgage banking derivative instruments	$	710	$	—	$	710	$	—
Total recurring liabilities at fair value	$	710	$	—	$	710	$	—

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 ~~June~~September 30, 2022 and December 31, 2021:


		Nonrecurring Basis Fair Value Measurements									Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3		(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
June 30, 2022
September 30, 2022										September 30, 2022
Collateral-dependent loans	Collateral-dependent loans	$	36,033	$	—	$	—	$	36,033	Collateral-dependent loans	$	30,014	$	—	$	—	$	30,014
Other real estate owned	Other real estate owned	702		—		—		702		Other real estate owned	92		—		—		92
Mortgage servicing rights		257,112		—		—		257,112

Total nonrecurring assets at fair value	Total nonrecurring assets at fair value	$	293,847	$	—	$	—	$	293,847	Total nonrecurring assets at fair value	$	30,106	$	—	$	—	$	30,106

December 31, 2021	December 31, 2021									December 31, 2021
Collateral-dependent loans	Collateral-dependent loans	$	44,181	$	—	$	—	$	44,181	Collateral-dependent loans	$	44,181	$	—	$	—	$	44,181

Mortgage servicing rights	Mortgage servicing rights	206,944		—		—		206,944		Mortgage servicing rights	206,944		—		—		206,944

Total nonrecurring assets at fair value	Total nonrecurring assets at fair value	$	251,125	$	—	$	—	$	251,125	Total nonrecurring assets at fair value	$	251,125	$	—	$	—	$	251,125

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 ~~six~~nine months ended ~~June~~September 30, 2022 and the year ended December 31, 2021, 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)	(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount	(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
June 30, 2022
September 30, 2022								September 30, 2022
Recurring:	Recurring:							Recurring:
Debt securities available-for-sale	Debt securities available-for-sale	$	1,320	Discounted par values	Probability of Default	13%	13%	Debt securities available-for-sale	$	1,200	Discounted par values	Probability of Default	12%	12%
					Loss Given Default	44%	44%					Loss Given Default	43%	43%
Nonrecurring:	Nonrecurring:							Nonrecurring:
Collateral-dependent loans	Collateral-dependent loans	$	36,033	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	0% - 40%	31%	Collateral-dependent loans	$	30,014	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	0% - 50%	31%
Other real estate owned	Other real estate owned	$	702	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 55%	37%	Other real estate owned	$	92	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	24%	24%
Mortgage servicing rights		$	257,112	Discounted cash flows	Discount rate	10% - 11%	10%
					Prepayment speed	4% - 22%	8%

December 31, 2021	December 31, 2021							December 31, 2021
Recurring:	Recurring:							Recurring:
Debt securities available-for-sale	Debt securities available-for-sale	$	1,380	Discounted par values	Discount Rate	8%	8%	Debt securities available-for-sale	$	1,380	Discounted par values	Discount Rate	8%	8%
Nonrecurring:	Nonrecurring:							Nonrecurring:
Collateral-dependent loans	Collateral-dependent loans	$	44,181	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	0% - 50%	39%	Collateral-dependent loans	$	44,181	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	0% - 50%	39%

Mortgage servicing rights	Mortgage servicing rights	$	206,944	Discounted cash flows	Discount rate	9% - 10%	9%	Mortgage servicing rights	$	206,944	Discounted cash flows	Discount rate	9% - 10%	9%
					Prepayment speed	10% - 40%	13%					Prepayment speed	10% - 40%	13%

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											Fair Value Measurements
				June 30, 2022											September 30, 2022
(dollars in thousands)	(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total		(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:	Financial assets:											Financial assets:
Cash and due from banks	Cash and due from banks	$	345,627	$	345,627	$	—	$	—	$	345,627	Cash and due from banks	$	269,193	$	269,193	$	—	$	—	$	269,193
Federal funds sold and interest-bearing accounts	Federal funds sold and interest-bearing accounts	1,961,209		1,961,209		—		—		1,961,209		Federal funds sold and interest-bearing accounts	1,061,975		1,061,975		—		—		1,061,975

Debt securities held-to-maturity	Debt securities held-to-maturity	111,654		—		97,144		—		97,144		Debt securities held-to-maturity	130,214		—		107,814		—		107,814

Loans, net	Loans, net	17,352,347		—		—		17,056,635		17,056,635		Loans, net	18,591,951		—		—		18,289,190		18,289,190
Accrued interest receivable	Accrued interest receivable	56,995		—		3,867		53,128		56,995		Accrued interest receivable	61,828		—		6,436		55,392		61,828
Financial liabilities:	Financial liabilities:											Financial liabilities:
Deposits	Deposits	19,684,982		—		19,682,653		—		19,682,653		Deposits	19,466,919		—		19,463,748		—		19,463,748
Securities sold under agreements to repurchase		953		953		—		—		953

Other borrowings	Other borrowings	425,592		—		418,722		—		418,722		Other borrowings	725,664		—		712,395		—		712,395
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	127,325		—		117,240		—		117,240		Subordinated deferrable interest debentures	127,823		—		120,121		—		120,121
Accrued interest payable	Accrued interest payable	2,875		—		2,875		—		2,875		Accrued interest payable	5,628		—		5,628		—		5,628


			Fair Value Measurements
			December 31, 2021
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	307,813	$	307,813	$	—	$	—	$	307,813
Federal funds sold and interest-bearing accounts	3,756,844		3,756,844		—		—		3,756,844

Debt securities held-to-maturity	79,850		—		78,206		—		78,206
Loans, net	15,662,495		—		—		15,509,410		15,509,410
Accrued interest receivable	56,917		—		2,373		54,544		56,917
Financial liabilities:
Deposits	19,665,553		—		19,667,612		—		19,667,612
Securities sold under agreements to repurchase	5,845		5,845		—		—		5,845
Other borrowings	739,879		—		760,829		—		760,829
Subordinated deferrable interest debentures	126,328		—		117,764		—		117,764
Accrued interest payable	4,313		—		4,313		—		4,313

NOTE 98 – COMMITMENTS AND CONTINGENCIES

Loan Commitments

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

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Commitments to extend credit	Commitments to extend credit	$	5,420,227	$	4,328,749	Commitments to extend credit	$	5,861,437	$	4,328,749
Unused home equity lines of credit	Unused home equity lines of credit	303,428		272,029		Unused home equity lines of credit	327,974		272,029
Financial standby letters of credit	Financial standby letters of credit	30,272		36,184		Financial standby letters of credit	30,236		36,184
Mortgage interest rate lock commitments	Mortgage interest rate lock commitments	320,320		417,126		Mortgage interest rate lock commitments	245,168		417,126

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. These commitments, predominantly at variable interest rates, generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being

drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral

obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral is required in instances which the Company deems necessary. The Company has not been required to perform on any material financial standby letters of credit and the Company has not incurred any losses on financial standby letters of credit for the ~~six~~nine months ended ~~June~~September 30, 2022 and the year ended December 31, 2021.

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2022		2021		2022		2021		(dollars in thousands)	2022		2021		2022		2021
Balance at beginning of period	Balance at beginning of period	$	42,194	$	21,015	$	33,185	$	32,854	Balance at beginning of period	$	43,973	$	22,314	$	33,185	$	32,854

Provision for unfunded commitments	Provision for unfunded commitments	1,779		1,299		10,788		(10,540)		Provision for unfunded commitments	192		(5,516)		10,980		(16,056)
Balance at end of period	Balance at end of period	$	43,973	$	22,314	$	43,973	$	22,314	Balance at end of period	$	44,165	$	16,798	$	44,165	$	16,798

Other Commitments

As of ~~June~~September 30, 2022, letters of credit issued by the FHLB totaling $400.0 million were used to guarantee the Bank’s performance related to a portion of its public fund deposit balances.

Litigation and Regulatory Contingencies

From time to time, the Company and the Bank are subject to various legal proceedings, claims and disputes that arise in the ordinary course of business. The Company and the Bank are also subject to regulatory examinations, information gathering requests, inquiries and investigations in the ordinary course of business. Based on the Company’s current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal 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 Company’s management and its legal counsel periodically assess contingent liabilities, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

~~COVID-19~~

The COVID-19 pandemic has caused significant and unprecedented economic dislocation in the United States. As a result of the pandemic, many commercial customers experienced varying levels of disruptions or restrictions on their business activities, and many consumers experienced 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 remains 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 pandemic, including the passage of the CARES Act and subsequent legislation, but

there can be no assurance that such steps will be sufficiently effective or achieve their desired results on a long-term basis. The extent of such impact from the COVID-19 pandemic and related mitigation efforts will depend on future developments, which remain uncertain, including, but not limited to, the potential for a resurgence or additional waves or variants of the coronavirus, actions to contain or treat the virus and how quickly normal economic and operating conditions resume in a sustainable manner. This could cause a material, adverse effect on the Company’s business, financial 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.

NOTE 109 – SEGMENT REPORTING

The Company has the following 5five 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 and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		Three Months Ended June 30, 2022													Three Months Ended September 30, 2022
(dollars in thousands)	(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	Interest income	$	141,844	$	38,055	$	8,476	$	4,757	$	9,436	$	202,568	Interest income	$	164,095	$	40,389	$	12,490	$	3,919	$	13,409	$	234,302
Interest expense	Interest expense	(10,278)		17,276		1,776		959		1,471		11,204		Interest expense	(10,412)		21,106		5,511		1,495		3,621		21,321
Net interest income	Net interest income	152,122		20,779		6,700		3,798		7,965		191,364		Net interest income	174,507		19,283		6,979		2,424		9,788		212,981
Provision for credit losses	Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924		Provision for credit losses	10,551		9,043		(1,836)		52		(158)		17,652
Noninterest income	Noninterest income	23,469		57,795		1,041		1,526		10		83,841		Noninterest income	23,269		38,584		1,516		1,946		9		65,324
Noninterest expense	Noninterest expense													Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	46,733		31,219		208		1,316		2,069		81,545		Salaries and employee benefits	48,599		25,813		1,055		1,412		1,818		78,697
Occupancy and equipment	Occupancy and equipment	11,168		1,406		1		81		90		12,746		Occupancy and equipment	11,357		1,460		1		82		83		12,983
Data processing and communications expenses	Data processing and communications expenses	10,863		1,123		48		29		92		12,155		Data processing and communications expenses	10,779		1,082		43		29		82		12,015
Other expenses	Other expenses	21,123		12,812		212		539		1,064		35,750		Other expenses	22,974		11,641		209		100		959		35,883
Total noninterest expense	Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196		Total noninterest expense	93,709		39,996		1,308		1,623		2,942		139,578
Income before income tax expense	Income before income tax expense	75,529		27,515		6,405		3,882		4,754		118,085		Income before income tax expense	93,516		8,828		9,023		2,695		7,013		121,075
Income tax expense	Income tax expense	19,120		5,779		1,346		815		959		28,019		Income tax expense	22,706		1,854		1,895		566		1,499		28,520
Net income	Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066	Net income	$	70,810	$	6,974	$	7,128	$	2,129	$	5,514	$	92,555

Total assets	Total assets	$	17,009,855	$	4,418,211	$	923,829	$	264,227	$	1,071,348	$	23,687,470	Total assets	$	16,980,520	$	4,402,221	$	955,711	$	259,427	$	1,215,778	$	23,813,657
Goodwill	Goodwill	958,558		—		—		—		64,498		1,023,056		Goodwill	958,573		—		—		—		64,498		1,023,071
Other intangible assets, net	Other intangible assets, net	105,198		—		—		—		10,415		115,613		Other intangible assets, net	101,225		—		—		—		9,678		110,903


	Three Months Ended September 30, 2021
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	110,708	$	33,390	$	9,093	$	11,986	$	7,869	$	173,046
Interest expense	(2,816)		12,101		381		1,287		432		11,385
Net interest income	113,524		21,289		8,712		10,699		7,437		161,661
Provision for credit losses	(9,578)		1,678		(291)		(1,104)		(380)		(9,675)
Noninterest income	17,896		55,555		1,037		2,070		4		76,562
Noninterest expense
Salaries and employee benefits	40,020		36,373		264		1,320		1,694		79,671
Occupancy and equipment	10,196		1,590		—		116		77		11,979
Data processing and communications expenses	9,159		1,357		59		18		88		10,681
Other expenses	21,723		11,675		200		370		897		34,865
Total noninterest expense	81,098		50,995		523		1,824		2,756		137,196
Income before income tax expense	59,900		24,171		9,517		12,049		5,065		110,702
Income tax expense	17,784		5,076		1,999		2,530		1,633		29,022
Net income	$	42,116	$	19,095	$	7,518	$	9,519	$	3,432	$	81,680

Total assets	$	16,070,583	$	4,247,967	$	740,809	$	529,044	$	944,738	$	22,533,141
Goodwill	863,507		—		—		—		64,498		928,005
Other intangible assets, net	47,768		—		—		—		12,628		60,396


		Three Months Ended June 30, 2021													Nine Months Ended September 30, 2022
(dollars in thousands)	(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	Interest income	$	109,260	$	34,085	$	8,988	$	14,050	$	7,368	$	173,751	Interest income	$	435,229	$	111,276	$	27,779	$	15,456	$	30,504	$	620,244
Interest expense	Interest expense	(1,410)		11,552		268		1,168		321		11,899		Interest expense	(25,145)		51,919		7,653		3,223		5,705		43,355
Net interest income	Net interest income	110,670		22,533		8,720		12,882		7,047		161,852		Net interest income	460,374		59,357		20,126		12,233		24,799		576,889
Provision for credit losses	Provision for credit losses	(3,949)		5,647		(155)		(607)		(794)		142		Provision for credit losses	25,952		15,129		(1,191)		(614)		(469)		38,807
Noninterest income	Noninterest income	16,171		69,055		1,333		2,677		4		89,240		Noninterest income	68,102		158,028		3,958		5,963		25		236,076
Noninterest expense	Noninterest expense													Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	37,814		44,798		278		937		1,678		85,505		Salaries and employee benefits	144,527		88,646		1,546		3,999		5,805		244,523
Occupancy and equipment	Occupancy and equipment	9,050		1,553		1		132		76		10,812		Occupancy and equipment	33,599		4,337		3		262		255		38,456
Data processing and communications expenses	Data processing and communications expenses	10,280		1,435		68		—		94		11,877		Data processing and communications expenses	32,872		3,377		138		86		269		36,742
Other expenses	Other expenses	18,763		7,638		30		284		852		27,567		Other expenses	64,142		37,098		639		1,019		2,975		105,873
Total noninterest expense	Total noninterest expense	75,907		55,424		377		1,353		2,700		135,761		Total noninterest expense	275,140		133,458		2,326		5,366		9,304		425,594
Income before income tax expense	Income before income tax expense	54,883		30,517		9,831		14,813		5,145		115,189		Income before income tax expense	227,384		68,798		22,949		13,444		15,989		348,564
Income tax expense	Income tax expense	14,196		6,408		2,064		3,111		1,083		26,862		Income tax expense	58,822		14,448		4,820		2,823		3,332		84,245
Net income	Net income	$	40,687	$	24,109	$	7,767	$	11,702	$	4,062	$	88,327	Net income	$	168,562	$	54,350	$	18,129	$	10,621	$	12,657	$	264,319

Total assets		$	15,561,628	$	3,917,275	$	779,234	$	748,234	$	880,560	$	21,886,931
Goodwill		863,507		—		—		—		64,498		928,005
Other intangible assets, net		50,418		—		—		—		13,365		63,783

Six Months Ended
June 30, 2022
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 271,134 $ 70,887 $ 15,289 $ 11,537 $ 17,095 $ 385,942
Interest expense (14,733) 30,813 2,142 1,728 2,084 22,034
Net interest income 285,867 40,074 13,147 9,809 15,011 363,908
Provision for credit losses 15,401 6,086 645 (666) (311) 21,155
Noninterest income 44,833 119,444 2,442 4,017 16 170,752
Noninterest expense
Salaries and employee benefits 95,928 62,833 491 2,587 3,987 165,826
Occupancy and equipment 22,242 2,877 2 180 172 25,473
Data processing and communications expenses 22,093 2,295 95 57 187 24,727
Other expenses 41,168 25,457 430 919 2,016 69,990
Total noninterest expense 181,431 93,462 1,018 3,743 6,362 286,016
Income before income tax expense 133,868 59,970 13,926 10,749 8,976 227,489
Income tax expense 36,116 12,594 2,925 2,257 1,833 55,725
Net income $ 97,752 $ 47,376 $ 11,001 $ 8,492 $ 7,143 $ 171,764


		Six Months Ended June 30, 2021													Nine Months Ended September 30, 2021
(dollars in thousands)	(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	Interest income	$	221,639	$	64,284	$	19,315	$	32,084	$	14,379	$	351,701	Interest income	$	332,347	$	97,674	$	28,408	$	44,070	$	22,248	$	524,747
Interest expense	Interest expense	(1,847)		22,767		689		2,567		696		24,872		Interest expense	(4,663)		34,868		1,070		3,854		1,128		36,257
Net interest income	Net interest income	223,486		41,517		18,626		29,517		13,683		326,829		Net interest income	337,010		62,806		27,338		40,216		21,120		488,490
Provision for credit losses	Provision for credit losses	(27,853)		1,094		(300)		(1,154)		(236)		(28,449)		Provision for credit losses	(37,431)		2,772		(591)		(2,258)		(616)		(38,124)
Noninterest income	Noninterest income	32,909		166,695		2,313		5,288		8		207,213		Noninterest income	50,805		222,250		3,350		7,358		12		283,775
Noninterest expense	Noninterest expense													Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	80,537		94,636		608		2,319		3,390		181,490		Salaries and employee benefits	120,557		131,009		872		3,639		5,084		261,161
Occupancy and equipment	Occupancy and equipment	19,170		3,029		2		238		154		22,593		Occupancy and equipment	29,366		4,619		2		354		231		34,572
Data processing and communications expenses	Data processing and communications expenses	20,481		2,981		117		1		181		23,761		Data processing and communications expenses	29,640		4,338		176		19		269		34,442
Other expenses	Other expenses	38,473		15,827		63		579		1,773		56,715		Other expenses	60,196		27,502		263		949		2,670		91,580
Total noninterest expense	Total noninterest expense	158,661		116,473		790		3,137		5,498		284,559		Total noninterest expense	239,759		167,468		1,313		4,961		8,254		421,755
Income before income tax expense	Income before income tax expense	125,587		90,645		20,449		32,822		8,429		277,932		Income before income tax expense	185,487		114,816		29,966		44,871		13,494		388,634
Income tax expense	Income tax expense	32,652		19,035		4,294		6,893		1,769		64,643		Income tax expense	50,436		24,111		6,293		9,423		3,402		93,665
Net income	Net income	$	92,935	$	71,610	$	16,155	$	25,929	$	6,660	$	213,289	Net income	$	135,051	$	90,705	$	23,673	$	35,448	$	10,092	$	294,969

NOTE 1110 – LOAN SERVICING RIGHTS

The Company sells certain residential mortgage loans and SBA loans to third parties. All such transfers are accounted for as sales and the continuing involvement in the loans sold is limited to certain servicing responsibilities. The Company has also acquired 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 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)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Loan Servicing Rights	Loan Servicing Rights					Loan Servicing Rights
Residential mortgage	Residential mortgage	$	257,112	$	206,944	Residential mortgage	$	144,764	$	206,944
SBA	SBA	4,954		5,556		SBA	4,318		5,556

Total loan servicing rights	Total loan servicing rights	$	262,066	$	212,500	Total loan servicing rights	$	149,082	$	212,500

Residential Mortgage Loans

The Company sells certain first-lien residential mortgage loans to third party investors, primarily the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). 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- and ~~six-months~~nine-months ended ~~June~~September 30, 2022, the Company recorded servicing fee income of ~~$18.7~~$18.2 million and ~~$35.8~~$54.0 million, respectively. During the three- and ~~six-months~~nine-months ended ~~June~~September 30, 2021, the Company recorded servicing fee income of ~~$11.3~~$13.8 million and ~~$21.5~~$35.3 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

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


(dollars in thousands)	(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,				(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Residential mortgage servicing rights	Residential mortgage servicing rights	2022		2021		2022		2021		Residential mortgage servicing rights	2022		2021		2022		2021
Beginning carrying value, net	Beginning carrying value, net	$	232,236	$	154,746	$	206,944	$	130,630	Beginning carrying value, net	$	257,112	$	191,675	$	206,944	$	130,630
Additions	Additions	21,551		43,377		43,252		65,244		Additions	14,893		6,195		58,145		71,439

Amortization	Amortization	(7,514)		(7,197)		(13,576)		(14,681)		Amortization	(6,939)		(7,967)		(20,515)		(22,648)
Recoveries	Recoveries	10,839		749		20,492		10,482		Recoveries	1,332		(1,397)		21,824		9,085
Disposals										Disposals	(121,634)		—		(121,634)		—
Ending carrying value, net	Ending carrying value, net	$	257,112	$	191,675	$	257,112	$	191,675	Ending carrying value, net	$	144,764	$	188,506	$	144,764	$	188,506


(dollars in thousands)	(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,				(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Residential mortgage servicing valuation allowance	Residential mortgage servicing valuation allowance	2022		2021		2022		2021		Residential mortgage servicing valuation allowance	2022		2021		2022		2021
Beginning balance	Beginning balance	$	16,129	$	29,674	$	25,782	$	39,407	Beginning balance	$	5,290	$	28,925	$	25,782	$	39,407

Additions										Additions	—		1,397		—		1,397
Recoveries	Recoveries	(10,839)		(749)		(20,492)		(10,482)		Recoveries	(1,332)		—		(21,824)		(10,482)
Reduction due to disposal										Reduction due to disposal	(3,958)		—		(3,958)		—
Ending balance	Ending balance	$	5,290	$	28,925	$	5,290	$	28,925	Ending balance	$	—	$	30,322	$	—	$	30,322

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022			December 31, 2021			(dollars in thousands)	September 30, 2022			December 31, 2021
Residential mortgage servicing rights	Residential mortgage servicing rights							Residential mortgage servicing rights
Unpaid principal balance of loans serviced for others	Unpaid principal balance of loans serviced for others	$	18,304,805		$	16,786,442		Unpaid principal balance of loans serviced for others	$	9,708,757		$	16,786,442
Composition of residential loans serviced for others:	Composition of residential loans serviced for others:							Composition of residential loans serviced for others:
FHLMC	FHLMC	21.78		%	21.88		%	FHLMC	16.55		%	21.88		%
FNMA	FNMA	60.49		%	60.26		%	FNMA	48.85		%	60.26		%
GNMA	GNMA	17.73		%	17.86		%	GNMA	34.60		%	17.86		%
Total	Total	100.00		%	100.00		%	Total	100.00		%	100.00		%
Weighted average term (months)	Weighted average term (months)	342			341			Weighted average term (months)	353			341
Weighted average age (months)	Weighted average age (months)	22			20			Weighted average age (months)	21			20
Modeled prepayment speed	Modeled prepayment speed	8.11		%	12.96		%	Modeled prepayment speed	7.20		%	12.96		%
Decline in fair value due to a 10% adverse change	Decline in fair value due to a 10% adverse change	(9,451)			(8,368)			Decline in fair value due to a 10% adverse change	(5,103)			(8,368)
Decline in fair value due to a 20% adverse change	Decline in fair value due to a 20% adverse change	(17,679)			(16,157)			Decline in fair value due to a 20% adverse change	(10,248)			(16,157)
Weighted average discount rate	Weighted average discount rate	9.77		%	8.77		%	Weighted average discount rate	10.02		%	8.77		%
Decline in fair value due to a 10% adverse change	Decline in fair value due to a 10% adverse change	(11,577)			(6,984)			Decline in fair value due to a 10% adverse change	(6,316)			(6,984)
Decline in fair value due to a 20% adverse change	Decline in fair value due to a 20% adverse change	(21,616)			(13,504)			Decline in fair value due to a 20% adverse change	(12,501)			(13,504)

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

During the third quarter of 2022, the Company sold servicing rights on residential mortgage loans with an unpaid principal balance of approximately $9 billion, subject to certain post-closing adjustments, to an unrelated financial institution resulting in a reduction of the mortgage servicing right carrying value of $121.6 million.

SBA Loans

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

During the three- and ~~six-months~~nine-months ended ~~June~~September 30, 2022, the Company recorded servicing fee income of ~~$1.0 million~~$907,000 and ~~$1.9~~$2.8 million, respectively. During the three- and ~~six-months~~nine-months ended ~~June~~September 30, 2021, the Company recorded servicing fee income of $1.0 million and ~~$2.0~~$3.0 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

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


(dollars in thousands)	(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,				(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
SBA servicing rights	SBA servicing rights	2022		2021		2022		2021		SBA servicing rights	2022		2021		2022		2021
Beginning carrying value, net	Beginning carrying value, net	$	5,384	$	6,445	$	5,556	$	5,839	Beginning carrying value, net	$	4,954	$	6,123	$	5,556	$	5,839
Additions	Additions	236		241		774		471		Additions	99		265		873		736

Amortization	Amortization	(666)		(563)		(1,376)		(1,092)		Amortization	(735)		(555)		(2,111)		(1,647)
Recoveries	Recoveries	—		—		—		905		Recoveries	—		—		—		905
Ending carrying value, net	Ending carrying value, net	$	4,954	$	6,123	$	4,954	$	6,123	Ending carrying value, net	$	4,318	$	5,833	$	4,318	$	5,833


(dollars in thousands)	(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,				(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
SBA servicing valuation allowance	SBA servicing valuation allowance	2022		2021		2022		2021		SBA servicing valuation allowance	2022		2021		2022		2021
Beginning balance	Beginning balance	$	—	$	—	$	—	$	905	Beginning balance	$	—	$	—	$	—	$	905

Recoveries	Recoveries	—		—		—		(905)		Recoveries	—		—		—		(905)
Ending balance	Ending balance	$	—	$	—	$	—	$	—	Ending balance	$	—	$	—	$	—	$	—


(dollars in thousands)	(dollars in thousands)	June 30, 2022			December 31, 2021			(dollars in thousands)	September 30, 2022			December 31, 2021
SBA servicing rights	SBA servicing rights							SBA servicing rights
Unpaid principal balance of loans serviced for others	Unpaid principal balance of loans serviced for others	$	387,101		$	410,167		Unpaid principal balance of loans serviced for others	$	364,548		$	410,167
Weighted average life (in years)	Weighted average life (in years)	3.64			3.65			Weighted average life (in years)	3.66			3.65
Modeled prepayment speed	Modeled prepayment speed	17.81		%	17.68		%	Modeled prepayment speed	18.12		%	17.68		%
Decline in fair value due to a 10% adverse change	Decline in fair value due to a 10% adverse change	(218)			(291)			Decline in fair value due to a 10% adverse change	(233)			(291)
Decline in fair value due to a 20% adverse change	Decline in fair value due to a 20% adverse change	(419)			(557)			Decline in fair value due to a 20% adverse change	(446)			(557)
Weighted average discount rate	Weighted average discount rate	16.55		%	11.92		%	Weighted average discount rate	14.62		%	11.92		%
Decline in fair value due to a 100 basis point adverse change	Decline in fair value due to a 100 basis point adverse change	(108)			(144)			Decline in fair value due to a 100 basis point adverse change	(112)			(144)
Decline in fair value due to a 200 basis point adverse change	Decline in fair value due to a 200 basis point adverse change	(212)			(282)			Decline in fair value due to a 200 basis point adverse change	(220)			(282)

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

Indirect Automobile Loans

The Company previously 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 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)	(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,				(dollars in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Indirect automobile servicing rights	Indirect automobile servicing rights	2022		2021		2022		2021		Indirect automobile servicing rights	2022		2021		2022		2021
Beginning carrying value, net	Beginning carrying value, net	$	—	$	29	$	—	$	73	Beginning carrying value, net	$	—	$	—	$	—	$	73

Amortization	Amortization	—		(29)		—		(73)		Amortization	—		—		—		(73)

Ending carrying value, net	Ending carrying value, net	$	—	$	—	$	—	$	—	Ending carrying value, net	$	—	$	—	$	—	$	—

During the three- and ~~six-months~~nine-months ended ~~June~~September 30, 2022, the Company recorded servicing fee income of ~~$65,000~~$56,000 and ~~$148,000,~~$204,000, respectively. During the three- and ~~six-months~~nine-months ended ~~June~~September 30, 2021, the Company recorded servicing fee

income of ~~$170,000~~$135,000 and ~~$376,000,~~$510,000, respectively. 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 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; changes in state and federal banking laws and regulations to which we are subject; financial market conditions and the results of financing efforts; 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 beyond our control; and other factors discussed in our filings with the Securities and Exchange Commission (the “SEC”) under the Exchange Act.

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

Overview

The following is management’s discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of ~~June~~September 30, 2022, as compared with December 31, 2021, and operating results for the three- and ~~six-month~~nine-month periods ended ~~June~~September 30, 2022 and 2021. These comments should be read in conjunction with the Company’s unaudited consolidated financial statements and accompanying notes appearing elsewhere herein.

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

Critical Accounting Policies

There have been no significant changes to our critical accounting policies from those disclosed in our 2021 Annual Report on Form 10-K. The reader should refer to the notes to our consolidated financial statements in our 2021 Annual Report on Form 10-K for a full disclosure of all critical accounting policies.

Results of Operations for the Three Months Ended ~~June~~September 30, 2022 and 2021

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of ~~$90.1~~$92.6 million, or ~~$1.30~~$1.34 per diluted share, for the quarter ended ~~June~~September 30, 2022, compared with ~~$88.3~~$81.7 million, or ~~$1.27~~$1.17 per diluted share, for the same period in 2021. The Company’s return on average assets and average shareholders’ equity were ~~1.54%~~1.56% and ~~11.87%~~11.76%, respectively, in the ~~second~~third quarter of 2022, compared with ~~1.64%~~1.47% and ~~12.66%~~11.27%, respectively, in the ~~second~~third quarter of 2021. During the ~~second~~third quarter of 2022, the Company recorded pre-tax loss on sale of mortgage servicing rights of $316,000, pre-tax servicing right impairment recovery of ~~$10.8~~$1.3 million, pre-tax gain on bank owned life insurance (BOLI) proceeds of $55,000 and pre-tax ~~gains on bank premises~~natural disaster and pandemic charges of ~~$39,000.~~$151,000. During the ~~second~~third quarter of 2021, the Company recorded pre-tax merger and conversion charges of $183,000, pre-tax servicing right impairment ~~recovery~~ of ~~$749,000~~$1.4 million and pre-tax ~~gains~~loss on bank premises of ~~$236,000.~~$1.1 million. Excluding these adjustment items, the Company’s net income would have been ~~$81.5~~$91.8 million, or ~~$1.18~~$1.32 per diluted share, for the ~~second~~third quarter of 2022 and ~~$87.5~~$83.9 million, or ~~$1.25~~$1.20 per diluted share, for the ~~second~~third quarter of 2021.

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


		Three Months Ended June 30,					Three Months Ended September 30,
(in thousands, except share and per share data)	(in thousands, except share and per share data)	2022		2021		(in thousands, except share and per share data)	2022		2021
Net income	Net income	$	90,066	$	88,327	Net income	$	92,555	$	81,680
Adjustment items:	Adjustment items:					Adjustment items:
Merger and conversion charges						Merger and conversion charges	—		183
Loss on sale of mortgage servicing rights						Loss on sale of mortgage servicing rights	316		—

Servicing right impairment (recovery)						Servicing right impairment (recovery)	(1,332)		1,398
Gain on BOLI proceeds						Gain on BOLI proceeds	(55)		—

Servicing right recovery		(10,838)		(749)

Gain on bank premises		(39)		(236)
Natural disaster and pandemic expenses						Natural disaster and pandemic expenses	151		—
Loss on bank premises						Loss on bank premises	—		1,136
Tax effect of adjustment items (Note 1)	Tax effect of adjustment items (Note 1)	2,284		206		Tax effect of adjustment items (Note 1)	182		(536)
After tax adjustment items	After tax adjustment items	(8,593)		(779)		After tax adjustment items	(738)		2,181
Adjusted net income	Adjusted net income	$	81,473	$	87,548	Adjusted net income	$	91,817	$	83,861

Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted	69,316,258		69,791,670		Weighted average common shares outstanding - diluted	69,327,414		69,756,135
Net income per diluted share	Net income per diluted share	$	1.30	$	1.27	Net income per diluted share	$	1.34	$	1.17
Adjusted net income per diluted share	Adjusted net income per diluted share	$	1.18	$	1.25	Adjusted net income per diluted share	$	1.32	$	1.20

Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments.
Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion of the merger and conversion charges for the three months ended September 30, 2021 is nondeductible for tax purposes.						Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion of the merger and conversion charges for the three months ended September 30, 2021 is nondeductible for tax purposes.

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 ~~second~~third quarter of 2022 and 2021, respectively:


		Three Months Ended June 30, 2022													Three Months Ended September 30, 2022
(dollars in thousands)	(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	Interest income	$	141,844	$	38,055	$	8,476	$	4,757	$	9,436	$	202,568	Interest income	$	164,095	$	40,389	$	12,490	$	3,919	$	13,409	$	234,302
Interest expense	Interest expense	(10,278)		17,276		1,776		959		1,471		11,204		Interest expense	(10,412)		21,106		5,511		1,495		3,621		21,321
Net interest income	Net interest income	152,122		20,779		6,700		3,798		7,965		191,364		Net interest income	174,507		19,283		6,979		2,424		9,788		212,981
Provision for credit losses	Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924		Provision for credit losses	10,551		9,043		(1,836)		52		(158)		17,652
Noninterest income	Noninterest income	23,469		57,795		1,041		1,526		10		83,841		Noninterest income	23,269		38,584		1,516		1,946		9		65,324
Noninterest expense	Noninterest expense													Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	46,733		31,219		208		1,316		2,069		81,545		Salaries and employee benefits	48,599		25,813		1,055		1,412		1,818		78,697
Occupancy and equipment	Occupancy and equipment	11,168		1,406		1		81		90		12,746		Occupancy and equipment	11,357		1,460		1		82		83		12,983
Data processing and communications expenses	Data processing and communications expenses	10,863		1,123		48		29		92		12,155		Data processing and communications expenses	10,779		1,082		43		29		82		12,015
Other expenses	Other expenses	21,123		12,812		212		539		1,064		35,750		Other expenses	22,974		11,641		209		100		959		35,883
Total noninterest expense	Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196		Total noninterest expense	93,709		39,996		1,308		1,623		2,942		139,578
Income before income tax expense	Income before income tax expense	75,529		27,515		6,405		3,882		4,754		118,085		Income before income tax expense	93,516		8,828		9,023		2,695		7,013		121,075
Income tax expense	Income tax expense	19,120		5,779		1,346		815		959		28,019		Income tax expense	22,706		1,854		1,895		566		1,499		28,520
Net income	Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066	Net income	$	70,810	$	6,974	$	7,128	$	2,129	$	5,514	$	92,555


		Three Months Ended June 30, 2021													Three Months Ended September 30, 2021
(dollars in thousands)	(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	Interest income	$	109,260	$	34,085	$	8,988	$	14,050	$	7,368	$	173,751	Interest income	$	110,708	$	33,390	$	9,093	$	11,986	$	7,869	$	173,046
Interest expense	Interest expense	(1,410)		11,552		268		1,168		321		11,899		Interest expense	(2,816)		12,101		381		1,287		432		11,385
Net interest income	Net interest income	110,670		22,533		8,720		12,882		7,047		161,852		Net interest income	113,524		21,289		8,712		10,699		7,437		161,661
Provision for credit losses	Provision for credit losses	(3,949)		5,647		(155)		(607)		(794)		142		Provision for credit losses	(9,578)		1,678		(291)		(1,104)		(380)		(9,675)
Noninterest income	Noninterest income	16,171		69,055		1,333		2,677		4		89,240		Noninterest income	17,896		55,555		1,037		2,070		4		76,562
Noninterest expense	Noninterest expense													Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	37,814		44,798		278		937		1,678		85,505		Salaries and employee benefits	40,020		36,373		264		1,320		1,694		79,671
Occupancy and equipment	Occupancy and equipment	9,050		1,553		1		132		76		10,812		Occupancy and equipment	10,196		1,590		—		116		77		11,979
Data processing and communications expenses	Data processing and communications expenses	10,280		1,435		68		—		94		11,877		Data processing and communications expenses	9,159		1,357		59		18		88		10,681
Other expenses	Other expenses	18,763		7,638		30		284		852		27,567		Other expenses	21,723		11,675		200		370		897		34,865
Total noninterest expense	Total noninterest expense	75,907		55,424		377		1,353		2,700		135,761		Total noninterest expense	81,098		50,995		523		1,824		2,756		137,196
Income before income tax expense	Income before income tax expense	54,883		30,517		9,831		14,813		5,145		115,189		Income before income tax expense	59,900		24,171		9,517		12,049		5,065		110,702
Income tax expense	Income tax expense	14,196		6,408		2,064		3,111		1,083		26,862		Income tax expense	17,784		5,076		1,999		2,530		1,633		29,022
Net income	Net income	$	40,687	$	24,109	$	7,767	$	11,702	$	4,062	$	88,327	Net income	$	42,116	$	19,095	$	7,518	$	9,519	$	3,432	$	81,680

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average interest rate for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the three months ended ~~June~~September 30, 2022 and 2021. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.


		Quarter Ended June 30,											Quarter Ended September 30,
		2022					2021						2022					2021
(dollars in thousands)	(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											Assets
Interest-earning assets:	Interest-earning assets:											Interest-earning assets:
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	$	2,227,453	$	4,495	0.81%	$	2,481,336	$	607	0.10%	Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks	$	1,399,529	$	7,215	2.05%	$	3,102,413	$	1,253	0.16%
Investment securities	Investment securities	1,021,610		7,405		2.91%	857,079		5,420		2.54%	Investment securities	1,339,750		10,783		3.19%	803,953		5,472		2.70%
Loans held for sale	Loans held for sale	944,964		10,036		4.26%	1,705,167		11,773		2.77%	Loans held for sale	471,070		6,012		5.06%	1,497,320		10,618		2.81%
Loans	Loans	16,861,674		181,602		4.32%	14,549,104		157,112		4.33%	Loans	18,146,083		211,223		4.62%	14,685,878		156,861		4.24%
Total interest-earning assets	Total interest-earning assets	21,055,701		203,538		3.88%	19,592,686		174,912		3.58%	Total interest-earning assets	21,356,432		235,233		4.37%	20,089,564		174,204		3.44%
Noninterest-earning assets	Noninterest-earning assets	2,349,500					1,946,208					Noninterest-earning assets	2,242,033					1,998,078
Total assets	Total assets	$	23,405,201				$	21,538,894				Total assets	$	23,598,465				$	22,087,642

Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity											Liabilities and Shareholders’ Equity
Interest-bearing liabilities:	Interest-bearing liabilities:											Interest-bearing liabilities:
Savings and interest-bearing demand deposits	Savings and interest-bearing demand deposits	$	9,790,029	$	3,590	0.15%	$	9,063,721	$	2,846	0.13%	Savings and interest-bearing demand deposits	$	9,758,158	$	12,706	0.52%	$	9,322,590	$	2,907	0.12%
Time deposits	Time deposits	1,693,740		1,318		0.31%	2,006,265		2,929		0.59%	Time deposits	1,506,761		1,328		0.35%	1,919,695		2,199		0.45%
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	1,854		1		0.22%	6,883		5		0.29%	Securities sold under agreements to repurchase	92		—		—%	5,133		4		0.31%
FHLB advances	FHLB advances	48,746		192		1.58%	48,910		193		1.58%	FHLB advances	94,357		527		2.22%	48,866		195		1.58%
Other borrowings	Other borrowings	376,829		4,437		4.72%	376,376		4,683		4.99%	Other borrowings	376,942		4,655		4.90%	376,489		4,640		4.89%
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	127,063		1,666		5.26%	125,068		1,243		3.99%	Subordinated deferrable interest debentures	127,560		2,105		6.55%	125,567		1,440		4.55%
Total interest-bearing liabilities	Total interest-bearing liabilities	12,038,261		11,204		0.37%	11,627,223		11,899		0.41%	Total interest-bearing liabilities	11,863,870		21,321		0.71%	11,798,340		11,385		0.38%
Demand deposits	Demand deposits	7,955,765					6,874,471					Demand deposits	8,259,625					7,168,717
Other liabilities	Other liabilities	367,895					238,931					Other liabilities	351,252					245,894
Shareholders’ equity	Shareholders’ equity	3,043,280					2,798,269					Shareholders’ equity	3,123,718					2,874,691
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	23,405,201				$	21,538,894				Total liabilities and shareholders’ equity	$	23,598,465				$	22,087,642
Interest rate spread	Interest rate spread					3.51%					3.17%	Interest rate spread					3.66%					3.06%
Net interest income	Net interest income			$	192,334				$	163,013		Net interest income			$	213,912				$	162,819
Net interest margin	Net interest margin					3.66%					3.34%	Net interest margin					3.97%					3.22%

On a tax-equivalent basis, net interest income for the ~~second~~third quarter of 2022 was ~~$192.3~~$213.9 million, an increase of ~~$29.3~~$51.1 million, or ~~18.0%~~31.4%, compared with ~~$163.0~~$162.8 million reported in the same quarter in 2021. The higher net interest income is primarily a result of growth in investment securities and loans complemented by disciplined deposit repricing. Average interest earning assets increased ~~$1.46~~$1.27 billion, or ~~7.5%~~6.3%, from ~~$19.59~~$20.09 billion in the ~~second~~third quarter of 2021 to ~~$21.06~~$21.36 billion for the ~~second~~third quarter of 2022. This growth in interest earning assets resulted primarily from organic loan growth, loans acquired from Balboa Capital and excess liquidity from deposit growth. The Company’s net interest margin during the ~~second~~third quarter of 2022 was ~~3.66%~~3.97%, up 3275 basis points from ~~3.34%~~3.22% reported in the ~~second~~third quarter of 2021. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to ~~$5.3~~$4.6 billion during the ~~second~~third quarter of 2022, with weighted average yields of ~~4.29%~~5.29%, compared with ~~$6.4~~$5.8 billion and ~~3.36%~~3.37%, respectively, during the ~~second~~third quarter of 2021. Loan production in the banking division amounted to $1.1 billion during the ~~second~~third quarter of 2022, with weighted average yields of ~~5.24%~~6.26%, compared with ~~$911.3~~$913.3 million and ~~3.75%~~3.56%, respectively, during the ~~second~~third quarter of 2021.

Total interest income, on a tax-equivalent basis, increased to ~~$203.5~~$235.2 million during the ~~second~~third quarter of 2022, compared with ~~$174.9~~$174.2 million in the same quarter of 2021. Yields on earning assets increased to ~~3.88%~~4.37% during the ~~second~~third quarter of 2022, compared with ~~3.58%~~3.44% reported in the ~~second~~third quarter of 2021. During the ~~second~~third quarter of 2022, loans comprised ~~84.6%~~87.2% of average earning assets, compared with ~~83.0%~~80.6% in the same quarter of 2021. Yields on loans ~~decreased~~increased to ~~4.32%~~4.62% in the ~~second~~third quarter of 2022, compared with ~~4.33%~~4.24% in the same period of 2021. Accretion income for the ~~second~~third quarter of 2022 was negative ~~$379,000,~~$597,000, compared with ~~$4.5~~$2.9 million in the ~~second~~third quarter of 2021.

The yield on total interest-bearing liabilities ~~decreased~~increased from ~~0.41%~~0.38% in the ~~second~~third quarter of 2021 to ~~0.37%~~0.71% in the ~~second~~third quarter of 2022. Total funding costs, inclusive of noninterest-bearing demand deposits, ~~decreased~~increased to ~~0.22%~~0.42% in the ~~second~~third quarter of 2022, compared with ~~0.26%~~0.24% during the ~~second~~third quarter of 2021. Deposit costs ~~decreased~~increased from ~~0.13%~~0.11% in the ~~second~~third quarter of 2021 to ~~0.10%~~0.29% in the ~~second~~third quarter of 2022. Non-deposit funding costs increased from ~~4.41%~~4.48% in the ~~second~~third quarter of 2021 to ~~4.55%~~4.83% in the ~~second~~third quarter of 2022. Average balances of interest bearing deposits and their respective costs for the ~~second~~third quarter of 2022 and 2021 are shown below:


		Three Months Ended June 30, 2022			Three Months Ended June 30, 2021				Three Months Ended September 30, 2022			Three Months Ended September 30, 2021
(dollars in thousands)	(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost	(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost
NOW	NOW	$	3,695,490	0.14%	$	3,314,334	0.10%	NOW	$	3,701,045	0.40%	$	3,447,909	0.09%
MMDA	MMDA	5,087,199		0.17%	4,872,500		0.16%	MMDA	5,026,815		0.68%	4,966,492		0.16%
Savings	Savings	1,007,340		0.06%	876,887		0.06%	Savings	1,030,298		0.14%	908,189		0.06%
Retail CDs	Retail CDs	1,693,740		0.31%	2,005,265		0.58%	Retail CDs	1,506,761		0.35%	1,919,184		0.45%
Brokered CDs	Brokered CDs	—		—%	1,000		3.21%	Brokered CDs	—		—%	511		3.11%
Interest-bearing deposits	Interest-bearing deposits	$	11,483,769	0.17%	$	11,069,986	0.21%	Interest-bearing deposits	$	11,264,919	0.49%	$	11,242,285	0.18%

Provision for Credit Losses

The Company’s provision for credit losses during the ~~second~~third quarter of 2022 amounted to ~~$14.9~~$17.7 million, compared with a ~~provision~~reversal of ~~$142,000~~$9.7 million in the ~~second~~third quarter of 2021. This increase was attributable to organic growth in loans during the quarter. The provision for credit losses for the ~~second~~third quarter of 2022 was comprised of ~~$13.2~~$17.5 million related to loans, ~~$1.8 million~~$192,000 related to unfunded commitments and negative ~~$82,000~~$9,000 related to other credit losses, compared with negative ~~$899,000~~$4.0 million related to loans, ~~$1.3~~negative $5.5 million related to unfunded commitments and negative ~~$258,000~~$175,000 related to other credit losses for the ~~second~~third quarter of 2021. Non-performing assets as a percentage of total assets increased from 0.43% at December 31, 2021 to ~~0.56%~~0.55% at ~~June~~September 30, 2022. The increase in non-performing assets is primarily attributable to an increase in nonaccruing loans as a result of rebooked GNMA loans, which the Company has the right, but not the obligation, to repurchase, and one commercial real estate loan totaling ~~$10.4~~$8.5 million. The Company recognized net charge-offs on loans during the ~~second~~third quarter of 2022 of approximately ~~$1.8~~$5.2 million, or ~~0.04%~~0.11% of average loans on an annualized basis, compared with net ~~charge-offs~~recoveries of approximately ~~$2.6 million,~~$127,000, or ~~0.07%~~0.00%, in the ~~second~~third quarter of 2021. The Company’s total allowance for credit losses on loans at ~~June~~September 30, 2022 was ~~$172.6~~$184.9 million, or 0.98% of total loans, compared with $167.6 million, or 1.06% of total loans, at December 31, 2021. This increase is primarily attributable to organic growth in loans, partially offset by improvement in forecast economic conditions.

Noninterest Income

Total noninterest income for the ~~second~~third quarter of 2022 was ~~$83.8~~$65.3 million, a decrease of ~~$5.4~~$11.2 million, or ~~6.0%~~14.7%, from the ~~$89.2~~$76.6 million reported in the ~~second~~third quarter of 2021. Income from mortgage banking activities was ~~$58.8~~$40.4 million in the ~~second~~third quarter of 2022, a decrease of ~~$11.5~~$16.1 million, or ~~16.3%~~28.5%, from ~~$70.2~~$56.5 million in the ~~second~~third quarter of 2021. Total production in the ~~second~~third quarter of 2022 amounted to ~~$1.73~~$1.26 billion, compared with ~~$2.39~~$2.06 billion in the same quarter of 2021, while spread (gain on sale) decreased to ~~2.36%~~2.10% in the current quarter, compared with ~~2.77%~~3.17% in the same quarter of 2021. The retail mortgage open pipeline finished the ~~second~~third quarter of 2022 at ~~$832.3~~$520.0 million, compared with ~~$1.41 billion~~$832.3 million at ~~March 31,~~June 30, 2022 and ~~$1.75~~$1.93 billion at the end of the ~~second~~third quarter of 2021. Service charges on deposit accounts ~~increased $141,000,~~decreased $318,000, or ~~1.3%~~2.8%, to ~~$11.1~~$11.2 million in the ~~second~~third quarter of 2022, compared with ~~$11.0~~$11.5 million in the ~~second~~third quarter of 2021. ~~This increase in service charges on deposit accounts is due primarily to an increase in volume, particularly in business accounts.~~

Other noninterest income increased ~~$5.7~~$5.9 million, or ~~82.7%~~85.5%, to ~~$12.7~~$12.9 million for the ~~second~~third quarter of 2022, compared with $6.9 million during the ~~second~~third quarter of 2021. The increase in other noninterest income was primarily attributable to fee income from Balboa of ~~$5.3~~$4.9 million and an increase in ~~BOLI~~derivative fee income ~~of $614,000, partially offset by a decrease in gains on sales of SBA loans~~ of $1.1 million.

Noninterest Expense

Total noninterest expense for the ~~second~~third quarter of 2022 increased ~~$6.4~~$2.4 million, or ~~4.7%~~1.7%, to ~~$142.2~~$139.6 million, compared with ~~$135.8~~$137.2 million in the same quarter 2021. Salaries and employee benefits decreased ~~$4.0~~$1.0 million, or ~~4.6%~~1.2%, from ~~$85.5~~$79.7 million in the ~~second~~third quarter of 2021 to ~~$81.5~~$78.7 million in the ~~second~~third quarter of 2022, due primarily to decreases in variable compensation and overtime tied to mortgage production of ~~$11.4~~$8.9 million and $504,000, respectively, and stock based compensation of $615,000, partially offset by salaries and employee benefits related to Balboa of ~~$10.9~~$10.2 million. Occupancy and equipment expenses increased ~~$1.9~~$1.0 million, or ~~17.9%~~8.4%, to ~~$12.7~~$13.0 million for the ~~second~~third quarter of 2022,

compared with ~~$10.8~~$12.0 million in the ~~second~~third quarter of 2021, due primarily to additional expenses related to Balboa and an increase in real estate taxes. Data processing and

communications expenses increased ~~$278,000,~~$1.3 million, or ~~2.3%~~12.5%, to ~~$12.2~~$12.0 million in the ~~second~~third quarter of 2022, compared with ~~$11.9~~$10.7 million in the ~~second~~third quarter of 2021. Advertising and marketing expense was ~~$3.1~~$3.6 million in the ~~second~~third quarter of 2022, compared with ~~$1.9~~$2.7 million in the ~~second~~third quarter of 2021. This increase was primarily related to a new marketing campaign. Amortization of intangible assets increased ~~$1.1~~$1.3 million, or ~~26.5%~~39.1%, from ~~$4.1~~$3.4 million in the ~~second~~third quarter of 2021 to ~~$5.1~~$4.7 million in the ~~second~~third quarter of 2022. This increase was primarily related to intangibles from the acquisition of Balboa Capital Corporation in December 2021, partially offset by a reduction in core deposit intangible amortization. Loan servicing expenses increased ~~$5.0~~$2.2 million, or ~~101.9%~~29.9%, from ~~$4.9~~$7.4 million in the ~~second~~third quarter of 2021 to ~~$9.9~~$9.6 million in the ~~second~~third quarter of 2022, primarily attributable to additional mortgage loans serviced resulting from strong mortgage production over the previous year. Other noninterest expenses ~~increased $1.0~~decreased $3.0 million, or ~~6.5%~~14.2%, from ~~$16.0~~$20.8 million in the ~~second~~third quarter of 2021 to ~~$17.1~~$17.9 million in the ~~second~~third quarter of 2022, due primarily to ~~an increase~~decreases of ~~$1.2~~$1.6 million in ~~legal fees~~other losses, $2.0 million in loss on sale of bank premises and ~~an increase~~$548,000 in ~~insurance expense to the Federal Deposit Insurance Corporation (the "FDIC") of $385,000.~~check card losses. These ~~increases~~decreases in other noninterest expenses were partially offset by ~~a decrease in problem loan expenses of $125,000 resulting from~~ an increase in ~~net gains on OREO.~~forgery losses of $1.9 million.

Income Taxes

Income tax expense is influenced by the statutory rate, the amount of taxable income, the amount of tax-exempt income and the amount of nondeductible expenses. For the ~~second~~third quarter of 2022, the Company reported income tax expense of ~~$28.0~~$28.5 million, compared with ~~$26.9~~$29.0 million in the same period of 2021. The Company’s effective tax rate for the three months ending ~~June~~September 30, 2022 and 2021 was ~~23.7%~~23.6% and ~~23.3%~~26.2%, respectively. The ~~increase~~decrease in the effective tax rate is primarily a result of ~~increased~~a state ~~taxes~~tax liability adjustment in the ~~second~~third quarter of ~~2022 resulting from shifts in apportionment related to the Balboa Capital acquisition.~~2021.

Results of Operations for the ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of ~~$171.8~~$264.3 million, or ~~$2.47~~$3.81 per diluted share, for the ~~six~~nine months ended ~~June~~September 30, 2022, compared with ~~$213.3~~$295.0 million, or ~~$3.06~~$4.23 per diluted share, for the same period in 2021. The Company’s return on average assets and average shareholders’ equity were ~~1.48%~~1.51% and ~~11.47%~~11.57%, respectively, in the ~~six~~nine months ended ~~June~~September 30, 2022, compared with ~~2.03%~~1.84% and ~~15.66%~~14.14%, respectively, in the same period in 2021. During the first ~~six~~nine months of 2022, the Company recorded pre-tax merger and conversion charges of $977,000, pre-tax loss on sale of mortgage servicing rights of $316,000, pre-tax servicing right recovery of ~~$20.5~~$21.8 million, pre-tax gain on BOLI proceeds of $55,000, pre-tax natural disaster and pandemic charges of $151,000 and pre-tax gain on bank premises of $45,000. During the first ~~six~~nine months of 2021, the Company recorded pre-tax merger and conversion charges of $183,000, pre-tax servicing right recovery of ~~$11.4~~$10.0 million, pre-tax gain on BOLI proceeds of $603,000 and pre-tax ~~gain~~loss on bank premises of ~~$500,000.~~$636,000. Excluding these adjustment items, the Company’s net income would have been ~~$156.5~~$248.3 million, or ~~$2.25~~$3.58 per diluted share, for the ~~six~~nine months ended ~~June~~September 30, 2022 and ~~$203.3~~$287.2 million, or ~~$2.91~~$4.12 per diluted share, for the same period in 2021.

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


		Six Months Ended June 30,					Nine Months Ended September 30,
(in thousands, except share and per share data)	(in thousands, except share and per share data)	2022		2021		(in thousands, except share and per share data)	2022		2021
Net income available to common shareholders	Net income available to common shareholders	$	171,764	$	213,289	Net income available to common shareholders	$	264,319	$	294,969
Adjustment items:	Adjustment items:					Adjustment items:
Merger and conversion charges	Merger and conversion charges	977		—		Merger and conversion charges	977		183

Loss on sale of mortgage servicing rights						Loss on sale of mortgage servicing rights	316		—

Servicing right recovery	Servicing right recovery	(20,492)		(11,388)		Servicing right recovery	(21,824)		(9,990)
Gain on BOLI proceeds	Gain on BOLI proceeds	—		(603)		Gain on BOLI proceeds	(55)		(603)

Gain on bank premises		(45)		(500)
Natural disaster and pandemic charges						Natural disaster and pandemic charges	151		—
(Gain) loss on bank premises						(Gain) loss on bank premises	(45)		636
Tax effect of adjustment items (Note 1)	Tax effect of adjustment items (Note 1)	4,308		2,496		Tax effect of adjustment items (Note 1)	4,490		1,960
After tax adjustment items	After tax adjustment items	(15,252)		(9,995)		After tax adjustment items	(15,990)		(7,814)
Adjusted net income	Adjusted net income	$	156,512	$	203,294	Adjusted net income	$	248,329	$	287,155

Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted	69,484,508		69,764,923		Weighted average common shares outstanding - diluted	69,427,522		69,772,084
Net income per diluted share	Net income per diluted share	$	2.47	$	3.06	Net income per diluted share	$	3.81	$	4.23
Adjusted net income per diluted share	Adjusted net income per diluted share	$	2.25	$	2.91	Adjusted net income per diluted share	$	3.58	$	4.12

Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion of the merger and conversion charges for the six months ended June 30, 2022 is nondeductible for tax purposes.
Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion of the merger and conversion charges for the nine months ended September 30, 2022 and 2021 is nondeductible for tax purposes.						Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion of the merger and conversion charges for the nine months ended September 30, 2022 and 2021 is nondeductible for tax purposes.

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 ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively:


		Six Months Ended June 30, 2022													Nine Months Ended September 30, 2022
(dollars in thousands)	(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	Interest income	$	271,134	$	70,887	$	15,289	$	11,537	$	17,095	$	385,942	Interest income	$	435,229	$	111,276	$	27,779	$	15,456	$	30,504	$	620,244
Interest expense	Interest expense	(14,733)		30,813		2,142		1,728		2,084		22,034		Interest expense	(25,145)		51,919		7,653		3,223		5,705		43,355
Net interest income	Net interest income	285,867		40,074		13,147		9,809		15,011		363,908		Net interest income	460,374		59,357		20,126		12,233		24,799		576,889
Provision for loan losses	Provision for loan losses	15,401		6,086		645		(666)		(311)		21,155		Provision for loan losses	25,952		15,129		(1,191)		(614)		(469)		38,807
Noninterest income	Noninterest income	44,833		119,444		2,442		4,017		16		170,752		Noninterest income	68,102		158,028		3,958		5,963		25		236,076
Noninterest expense	Noninterest expense													Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	95,928		62,833		491		2,587		3,987		165,826		Salaries and employee benefits	144,527		88,646		1,546		3,999		5,805		244,523
Occupancy and equipment	Occupancy and equipment	22,242		2,877		2		180		172		25,473		Occupancy and equipment	33,599		4,337		3		262		255		38,456
Data processing and communications expenses	Data processing and communications expenses	22,093		2,295		95		57		187		24,727		Data processing and communications expenses	32,872		3,377		138		86		269		36,742
Other expenses	Other expenses	41,168		25,457		430		919		2,016		69,990		Other expenses	64,142		37,098		639		1,019		2,975		105,873
Total noninterest expense	Total noninterest expense	181,431		93,462		1,018		3,743		6,362		286,016		Total noninterest expense	275,140		133,458		2,326		5,366		9,304		425,594
Income before income tax expense	Income before income tax expense	133,868		59,970		13,926		10,749		8,976		227,489		Income before income tax expense	227,384		68,798		22,949		13,444		15,989		348,564
Income tax expense	Income tax expense	36,116		12,594		2,925		2,257		1,833		55,725		Income tax expense	58,822		14,448		4,820		2,823		3,332		84,245
Net income	Net income	$	97,752	$	47,376	$	11,001	$	8,492	$	7,143	$	171,764	Net income	$	168,562	$	54,350	$	18,129	$	10,621	$	12,657	$	264,319


		Six Months Ended June 30, 2021													Nine Months Ended September 30, 2021
(dollars in thousands)	(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	Interest income	$	221,639	$	64,284	$	19,315	$	32,084	$	14,379	$	351,701	Interest income	$	332,347	$	97,674	$	28,408	$	44,070	$	22,248	$	524,747
Interest expense	Interest expense	(1,847)		22,767		689		2,567		696		24,872		Interest expense	(4,663)		34,868		1,070		3,854		1,128		36,257
Net interest income	Net interest income	223,486		41,517		18,626		29,517		13,683		326,829		Net interest income	337,010		62,806		27,338		40,216		21,120		488,490
Provision for loan losses	Provision for loan losses	(27,853)		1,094		(300)		(1,154)		(236)		(28,449)		Provision for loan losses	(37,431)		2,772		(591)		(2,258)		(616)		(38,124)
Noninterest income	Noninterest income	32,909		166,695		2,313		5,288		8		207,213		Noninterest income	50,805		222,250		3,350		7,358		12		283,775
Noninterest expense	Noninterest expense													Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	80,537		94,636		608		2,319		3,390		181,490		Salaries and employee benefits	120,557		131,009		872		3,639		5,084		261,161
Occupancy and equipment	Occupancy and equipment	19,170		3,029		2		238		154		22,593		Occupancy and equipment	29,366		4,619		2		354		231		34,572
Data processing and communications expenses	Data processing and communications expenses	20,481		2,981		117		1		181		23,761		Data processing and communications expenses	29,640		4,338		176		19		269		34,442
Other expenses	Other expenses	38,473		15,827		63		579		1,773		56,715		Other expenses	60,196		27,502		263		949		2,670		91,580
Total noninterest expense	Total noninterest expense	158,661		116,473		790		3,137		5,498		284,559		Total noninterest expense	239,759		167,468		1,313		4,961		8,254		421,755
Income before income tax expense	Income before income tax expense	125,587		90,645		20,449		32,822		8,429		277,932		Income before income tax expense	185,487		114,816		29,966		44,871		13,494		388,634
Income tax expense	Income tax expense	32,652		19,035		4,294		6,893		1,769		64,643		Income tax expense	50,436		24,111		6,293		9,423		3,402		93,665
Net income	Net income	$	92,935	$	71,610	$	16,155	$	25,929	$	6,660	$	213,289	Net income	$	135,051	$	90,705	$	23,673	$	35,448	$	10,092	$	294,969

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 ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.


		Six Months Ended June 30,											Nine Months Ended September 30,
		2022					2021						2022					2021
(dollars in thousands)	(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											Assets
Interest-earning assets:	Interest-earning assets:											Interest-earning assets:
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	$	2,817,071	$	5,878	0.42%	$	2,324,365	$	1,141	0.10%	Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks	$	2,339,364	$	13,093	0.75%	$	2,586,564	$	2,394	0.12%
Investment securities	Investment securities	862,178		11,879		2.78%	907,049		11,716		2.60%	Investment securities	1,023,118		22,662		2.96%	872,306		17,188		2.63%
Loans held for sale	Loans held for sale	1,020,611		18,168		3.59%	1,496,155		22,600		3.05%	Loans held for sale	835,418		24,180		3.87%	1,496,548		33,218		2.97%
Loans	Loans	16,344,409		352,000		4.34%	14,501,802		318,585		4.43%	Loans	16,951,566		563,223		4.44%	14,563,835		475,446		4.36%
Total interest-earning assets	Total interest-earning assets	21,044,269		387,925		3.72%	19,229,371		354,042		3.71%	Total interest-earning assets	21,149,466		623,158		3.94%	19,519,253		528,246		3.62%
Noninterest-earning assets	Noninterest-earning assets	2,296,516					1,915,380					Noninterest-earning assets	2,255,945					1,943,248
Total assets	Total assets	$	23,340,785				$	21,144,751				Total assets	$	23,405,411				$	21,462,501

Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity											Liabilities and Shareholders’ Equity
Interest-bearing liabilities:	Interest-bearing liabilities:											Interest-bearing liabilities:
Savings and interest-bearing demand deposits	Savings and interest-bearing demand deposits	$	9,844,422	$	6,190	0.13%	$	8,915,964	$	5,894	0.13%	Savings and interest-bearing demand deposits	$	9,815,352	$	18,896	0.26%	$	9,052,996	$	8,801	0.13%
Time deposits	Time deposits	1,733,656		2,810		0.33%	2,036,668		6,679		0.66%	Time deposits	1,657,193		4,138		0.33%	1,997,248		8,878		0.59%
Federal funds purchased and securities sold under agreements to repurchase	Federal funds purchased and securities sold under agreements to repurchase	2,931		4		0.28%	8,077		12		0.30%	Federal funds purchased and securities sold under agreements to repurchase	1,974		4		0.27%	7,085		16		0.30%
FHLB advances	FHLB advances	48,766		382		1.58%	48,931		385		1.59%	FHLB advances	64,130		909		1.90%	48,909		580		1.59%
Other borrowings	Other borrowings	410,058		9,601		4.72%	376,318		9,321		4.99%	Other borrowings	398,898		14,256		4.78%	376,376		13,961		4.96%
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	126,814		3,047		4.85%	124,823		2,581		4.17%	Subordinated deferrable interest debentures	127,066		5,152		5.42%	125,073		4,021		4.30%
Total interest-bearing liabilities	Total interest-bearing liabilities	12,166,647		22,034		0.37%	11,510,781		24,872		0.44%	Total interest-bearing liabilities	12,064,613		43,355		0.48%	11,607,687		36,257		0.42%
Demand deposits	Demand deposits	7,807,929					6,644,646					Demand deposits	7,960,149					6,821,256
Other liabilities	Other liabilities	347,109					242,402					Other liabilities	326,293					243,579
Shareholders’ equity	Shareholders’ equity	3,019,100					2,746,922					Shareholders’ equity	3,054,356					2,789,979
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	23,340,785				$	21,144,751				Total liabilities and shareholders’ equity	$	23,405,411				$	21,462,501
Interest rate spread	Interest rate spread					3.35%					3.27%	Interest rate spread					3.46%					3.20%
Net interest income	Net interest income			$	365,891				$	329,170		Net interest income			$	579,803				$	491,989
Net interest margin	Net interest margin					3.51%					3.45%	Net interest margin					3.67%					3.37%

On a tax-equivalent basis, net interest income for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$365.9~~$579.8 million, an increase of ~~$36.7~~$87.8 million, or ~~11.2%~~17.8%, compared with ~~$329.2~~$492.0 million reported in the same period of 2021. The higher net interest income is a result of growth in average earning assets and disciplined deposit pricing. Average interest earning assets increased ~~$1.81~~$1.63 billion, or ~~9.4%~~8.4%, from ~~$19.23~~$19.52 billion in the first ~~six~~nine months of 2021 to ~~$21.04~~$21.15 billion for the first ~~six~~nine months of 2022. This growth in interest earning assets resulted primarily from organic growth in average loans and loans acquired from Balboa Capital. The Company’s net interest margin during the first ~~six~~nine months of 2022 was ~~3.51%~~3.67%, up ~~six~~30 basis points from ~~3.45%~~3.37% reported for the first ~~six~~nine months of 2021. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to ~~$10.0~~$14.5 billion during the first ~~six~~nine months of 2022, with weighted average yields of ~~3.98%~~4.39%, compared with ~~$13.9~~$19.7 billion and ~~3.25%~~3.29%, respectively, during the first ~~six~~nine months of 2021. Loan production yields in the lines of business were negatively impacted ~~seven~~five basis points during the first ~~six~~nine months of 2021 by originations of Paycheck Protection Program loans in our SBA division. Loan production in the banking division amounted to ~~$1.9~~$3.0 billion during the first ~~six~~nine months of 2022 with weighted average yields of ~~5.21%~~5.60%, compared with ~~$1.5~~$2.4 billion and ~~3.77%~~3.69%, respectively, during the first ~~six~~nine months of 2021.

Total interest income, on a tax-equivalent basis, increased to ~~$387.9~~$623.2 million during the ~~six~~nine months ended ~~June~~September 30, 2022, compared with ~~$354.0~~$528.2 million in the same period of 2021. Yields on earning assets increased to ~~3.72%~~3.94% during the first ~~six~~nine months of 2022, compared with ~~3.71%~~3.62% reported in the same period of 2021. During the first ~~six~~nine months of 2022, loans comprised ~~82.5%~~84.1% of average earning assets, compared with ~~83.2%~~82.3% in the same period of 2021. Yields on loans ~~decreased~~increased to

~~4.34%~~4.44% during the ~~six~~nine months ended ~~June~~September 30, 2022, compared with ~~4.43%~~4.36% in the same period of 2021. Accretion income for the first ~~six~~nine months of 2022 was ~~$627,000,~~$30,000, compared with ~~$10.6~~$13.5 million in the first ~~six~~nine months of 2021.

The yield on total interest-bearing liabilities ~~decreased~~increased from ~~0.44%~~0.42% during the ~~six~~nine months ended ~~June~~September 30, 2021 to ~~0.37%~~0.48% in the same period of 2022. Total funding costs, inclusive of noninterest-bearing demand deposits, ~~decreased~~increased to ~~0.22%~~0.29% in the first ~~six~~nine months of 2022, compared with ~~0.28%~~0.26% during the same period of 2021. Deposit costs ~~decreased~~increased from ~~0.14%~~0.13% in the first ~~six~~nine months of 2021 to ~~0.09%~~0.16% in the same period of 2022. Non-deposit funding costs increased from ~~4.44%~~4.46% in the first ~~six~~nine months of 2021 to ~~4.47%~~4.59% in the same period of 2022. The increase in non-deposit funding costs was driven primarily by an increase in index rates. Average balances of interest bearing deposits and their respective costs for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 are shown below:


		Six Months Ended June 30, 2022			Six Months Ended June 30, 2021				Nine Months Ended September 30, 2022			Nine Months Ended September 30, 2021
(dollars in thousands)	(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost	(dollars in thousands)	Average Balance		Average Cost	Average Balance		Average Cost
NOW	NOW	$	3,690,161	0.11%	$	3,248,655	0.11%	NOW	$	3,693,829	0.21%	$	3,315,803	0.10%
MMDA	MMDA	5,163,636		0.15%	4,817,197		0.16%	MMDA	5,117,528		0.33%	4,867,509		0.16%
Savings	Savings	990,625		0.06%	850,112		0.06%	Savings	1,003,995		0.08%	869,684		0.06%
Retail CDs	Retail CDs	1,733,656		0.33%	2,035,668		0.66%	Retail CDs	1,657,193		0.33%	1,996,413		0.59%
Brokered CDs	Brokered CDs	—		—%	1,000		2.82%	Brokered CDs	—		—%	835		2.88%
Interest-bearing deposits	Interest-bearing deposits	$	11,578,078	0.16%	$	10,952,632	0.23%	Interest-bearing deposits	$	11,472,545	0.27%	$	11,050,244	0.21%

Provision for Credit Losses

The Company’s provision for credit losses during the ~~six~~nine months ended ~~June~~September 30, 2022 amounted to ~~$21.2~~$38.8 million, compared with negative ~~$28.4~~$38.1 million in the ~~six~~nine months ended ~~June~~September 30, 2021. This increase was primarily attributable to organic growth in loans during the first ~~six~~nine months of 2022 and a release of reserves in the ~~six~~nine months ended ~~June~~September 30, 2021 which resulted from an improved economic forecast, particularly levels of unemployment, home prices and gross domestic product. The provision for credit losses for the first ~~six~~nine months of 2022 was comprised of ~~$10.5~~$28.0 million related to loans, ~~$10.8~~$11.0 million related to unfunded commitments and negative ~~$126,000~~$135,000 related to other credit losses compared with negative ~~$17.5~~$21.5 million related to loans, negative ~~$10.5~~$16.1 million related to unfunded commitments and negative ~~$431,000~~$606,000 related to other credit losses for the same period in 2021. Non-performing assets as a percentage of total assets increased from 0.43% at December 31, 2021 to ~~0.56%~~0.55% at ~~June~~September 30, 2022. The increase in non-performing assets is primarily attributable to an increase in nonaccruing loans as a result of rebooked GNMA loans, which the Company has the right, but not the obligation, to repurchase, and one commercial real estate loan totaling ~~$10.4~~$8.5 million. Net charge-offs on loans during the first ~~six~~nine months of 2022 were ~~$5.4~~$10.7 million, or ~~0.07%~~0.08% of average loans on an annualized basis, compared with approximately ~~$6.9~~$6.7 million, or ~~0.10%~~0.06%, in the first ~~six~~nine months of 2021. The Company’s total allowance for credit losses on loans at ~~June~~September 30, 2022 was ~~$172.6~~$184.9 million, or 0.98% of total loans, compared with $167.6 million, or 1.06% of total loans, at December 31, 2021. This increase is primarily attributable to organic growth in loans, partially offset by improvement in forecast economic conditions.

Noninterest Income

Total noninterest income for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$170.8~~$236.1 million, a decrease of ~~$36.5~~$47.7 million, or ~~17.6%~~16.8%, from the ~~$207.2~~$283.8 million reported for the ~~six~~nine months ended ~~June~~September 30, 2021. Income from mortgage banking activities decreased ~~$47.0~~$63.1 million, or ~~27.9%~~28.0%, from ~~$168.7~~$225.2 million in the first ~~six~~nine months of 2021 to ~~$121.7~~$162.0 million in the same period of 2022. Total production in the first ~~six~~nine months of 2022 amounted to ~~$3.26~~$4.52 billion, compared with ~~$5.03~~$7.09 billion in the same period of 2021, while spread (gain on sale) decreased to ~~2.63%~~2.48% during the ~~six~~nine months ended ~~June~~September 30, 2022, compared with ~~3.39%~~3.33% in the same period of 2021. The retail mortgage open pipeline was ~~$832.3~~$520.0 million at ~~June~~September 30, 2022, compared with $1.62 billion at December 31, 2021 and ~~$1.75~~$1.93 billion at ~~June~~September 30, 2021. Mortgage-related activities was positively impacted during the first ~~six~~nine months of 2022 by a recovery of previous mortgage servicing right impairment of ~~$20.5~~$21.8 million, compared with a recovery of ~~$11.4~~$9.1 million for the same period in 2021.

Other noninterest income increased ~~$10.1~~$16.0 million, or ~~69.1%~~74.4%, to ~~$24.7~~$37.5 million for the first ~~six~~nine months of 2022, compared with ~~$14.6~~$21.5 million during the same period of 2021. The increase in other noninterest income was primarily attributable to an increase in fee income from Balboa Capital of ~~$9.0~~$13.8 million and an increase in BOLI income of ~~$1.6~~$1.7 million, ~~and an increase in trust income of $473,000,~~ partially offset by a decrease of ~~$603,000~~$547,000 in gain on BOLI proceeds.

Noninterest Expense

Total noninterest expenses for the ~~six~~nine months ended ~~June~~September 30, 2022 increased ~~$1.5~~$3.8 million, or ~~0.5%~~0.9%, to ~~$286.0~~$425.6 million, compared with ~~$284.6~~$421.8 million in the same period of 2021. Salaries and employee benefits decreased ~~$15.7~~$16.6 million, or ~~8.6%~~6.4%, from ~~$181.5~~$261.2 million in the first ~~six~~nine months of 2021 to ~~$165.8~~$244.5 million in the same period of 2022 due primarily to decreases in variable compensation tied to mortgage production and overtime in our mortgage division of ~~$27.7~~$36.6 million and ~~$1.5~~$2.0 million, respectively, partially offset by an increase in salaries and employee benefits related to Balboa Capital of ~~$17.6~~$27.8 million. Occupancy and equipment expenses increased ~~$2.9~~$3.9 million, or ~~12.7%~~11.2%, to ~~$25.5~~$38.5 million for the first ~~six~~nine months of 2022, compared with ~~$22.6~~$34.6 million in the same period of 2021, due primarily to the addition of Balboa Capital, ~~and~~ an increase in real estate ~~taxes.~~taxes and a decrease in gain on lease termination. Data processing and communications expenses increased ~~$966,000,~~$2.3 million, or ~~4.1%~~6.7%, to ~~$24.7~~$36.7 million in the first ~~six~~nine months of 2022, from ~~$23.8~~$34.4 million reported in the same period of 2021. Credit resolution-related expenses decreased ~~$1.6~~$1.9 million, or ~~140.1%~~122.2%, from ~~$1.2~~$1.5 million in the first ~~six~~nine months of 2021 to negative ~~$469,000~~$343,000 in the same period of 2022. This decrease in credit resolution-related expenses primarily resulted from an increase in gain on sale of OREO properties of ~~$1.2~~$2.0 million. Advertising and marketing expense was ~~$5.1~~$8.7 million in the first ~~six~~nine months of 2022, compared with ~~$3.4~~$6.1 million in the first ~~six~~nine months of 2021. Amortization of intangible assets increased ~~$2.1~~$3.5 million, or ~~26.1%~~29.9%, from ~~$8.2~~$11.6 million in the first ~~six~~nine months of 2021 to ~~$10.3~~$15.0 million in the first ~~six~~nine months of 2022. This increase was primarily related to amortization of intangibles from the acquisition of Balboa Capital Corporation in December 2021, partially offset by a reduction in core deposit intangible amortization. There were $977,000 in merger and conversion charges in the first ~~six~~nine months of 2022, compared with ~~none~~$183,000 in the same period in 2021. Loan servicing expenses increased ~~$8.0~~$10.2 million, or ~~74.2%~~56.2%, from ~~$10.8~~$18.2 million in the first ~~six~~nine months of 2021 to ~~$18.8~~$28.5 million in the same period of 2022, primarily attributable to additional mortgage loans serviced resulting from strong mortgage production over the previous year. Other noninterest expenses ~~increased $2.0 million,~~decreased $917,000, or ~~6.2%~~1.7%, from ~~$33.2~~$54.0 million in the first ~~six~~nine months of 2021 to ~~$35.2~~$53.1 million in the same period of 2022, due primarily to ~~an increase~~decreases of ~~$2.9~~$2.1 million ~~in legal fees and an increase of $1.3 million in FDIC insurance expense. These increases in other noninterest expenses were partially offset by decreases~~ in other losses, $1.5 million in loss on sale of ~~$569,000~~bank premises and variable expenses tied to production in our mortgage division. These decreases in other noninterest expenses were partially offset by an increase in forgery losses of $3.9 million.

Income Taxes

Income tax expense is influenced by the statutory rate, the amount of taxable income, the amount of tax-exempt income and the amount of nondeductible expenses. For the ~~six~~nine months ended ~~June~~September 30, 2022, the Company reported income tax expense of ~~$55.7~~$84.2 million, compared with ~~$64.6~~$93.7 million in the same period of 2021. The Company’s effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 was ~~24.5%~~24.2% and ~~23.3%~~24.1%, respectively. The increase in the effective tax rate is primarily a result of a discrete charge to the Company's state tax liability and nondeductible merger and conversion charges incurred during the first six months of 2022.

Financial Condition as of ~~June~~September 30, 2022

Securities

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

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

Management and the Company’s ALCO Committee evaluate available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. If credit-related impairment exists, the Company recognizes an allowance for credit losses, limited to the amount by which the fair value is less than the amortized cost basis. Any impairment not recognized through an allowance for credit losses is recognized in other comprehensive income, net of tax, as a non credit-related impairment. The Company does not intend to sell these available-for-sale investment securities at an unrealized loss position at ~~June~~September 30, 2022, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at ~~June~~September 30, 2022, management determined that ~~$88,000~~$79,000 was attributable to credit impairment and, accordingly, an allowance for credit losses was established. The remaining ~~$16.7~~$64.2 million in unrealized loss was determined to be from factors other than credit.

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

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


		June 30, 2022				December 31, 2021					September 30, 2022				December 31, 2021
(dollars in thousands)	(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities available-for-sale	Securities available-for-sale									Securities available-for-sale
U.S. Treasuries	U.S. Treasuries	$	314,613	$	312,889	$	—	$	—	U.S. Treasuries	$	520,085	$	503,810	$	—	$	—
U.S. government-sponsored agencies	U.S. government-sponsored agencies	2,050		2,021		7,084		7,172		U.S. government-sponsored agencies	1,039		977		7,084		7,172
State, county and municipal securities	State, county and municipal securities	41,428		40,963		45,470		47,812		State, county and municipal securities	40,842		39,268		45,470		47,812
Corporate debt securities	Corporate debt securities	15,897		15,463		27,897		28,496		Corporate debt securities	15,897		15,296		27,897		28,496
SBA pool securities	SBA pool securities	35,854		34,431		44,312		45,201		SBA pool securities	31,063		28,851		44,312		45,201
Mortgage-backed securities	Mortgage-backed securities	658,508		646,501		448,124		463,940		Mortgage-backed securities	710,523		666,947		448,124		463,940
Total debt securities available-for-sale	Total debt securities available-for-sale	$	1,068,350	$	1,052,268	$	572,887	$	592,621	Total debt securities available-for-sale	$	1,319,449	$	1,255,149	$	572,887	$	592,621

Securities held-to-maturity	Securities held-to-maturity									Securities held-to-maturity

State, county and municipal securities	State, county and municipal securities	$	31,905	$	27,626	$	8,905	$	8,711	State, county and municipal securities	$	31,905	$	25,073	$	8,905	$	8,711

Mortgage-backed securities	Mortgage-backed securities	79,749		69,518		70,945		69,495		Mortgage-backed securities	98,309		82,741		70,945		69,495
Total debt securities held-to-maturity	Total debt securities held-to-maturity	$	111,654	$	97,144	$	79,850	$	78,206	Total debt securities held-to-maturity	$	130,214	$	107,814	$	79,850	$	78,206

The amounts of securities available-for-sale and held-to-maturity in each category as of ~~June~~September 30, 2022 are shown in the following table according to contractual maturity classifications: (i) one year or less; (ii) after one year through five years; (iii) after five years through ten years; and (iv) after ten years:


		U.S. Treasuries				U.S. Government-Sponsored Agencies				State, County and Municipal Securities						U.S. Treasuries				U.S. Government-Sponsored Agencies				State, County and Municipal Securities
(dollars in thousands) Securities available-for-sale (1)	(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount			Yield (2)(3)		(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount		Yield (2)(3)
One year or less	One year or less	$	—	—	%	$	1,008	1.92	%	$	4,769		3.05	%	One year or less	$	—	—	%	$	—	—	%	$	5,195	3.21	%
After one year through five years	After one year through five years	312,889		2.53		1,013		2.16		13,715			4.07		After one year through five years	503,810		2.77		977		2.16		18,187		3.96
After five years through ten years	After five years through ten years	—		—		—		—		15,252		4	4.01		After five years through ten years	—		—		—		—		8,997		4.20
After ten years	After ten years	—		—		—		—		7,227			3.70		After ten years	—		—		—		—		6,889		3.70
		$	312,889	2.53	%	$	2,021	2.04	%	$	40,963		3.86	%		$	503,810	2.77	%	$	977	2.16	%	$	39,268	3.87	%

		Corporate Debt Securities				SBA Pool Securities				Mortgage-Backed Securities						Corporate Debt Securities				SBA Pool Securities				Mortgage-Backed Securities
(dollars in thousands) Securities available-for-sale (1)	(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount			Yield (2)		(dollars in thousands) Securities available-for-sale (1)	Amount		Yield (2)		Amount		Yield (2)		Amount		Yield (2)
One year or less	One year or less	$	500	3.88	%	$	477	2.10	%	$	21		2.40	%	One year or less	$	500	3.88	%	$	166	2.56	%	$	7,527	3.07	%
After one year through five years	After one year through five years	—		—		9,663		2.07		113,977			2.99		After one year through five years	1,000		2.40		6,916		2.11		172,943		3.15
After five years through ten years	After five years through ten years	13,244		4.71		2,589		3.04		225,714			2.94		After five years through ten years	12,233		4.90		3,479		2.67		209,568		2.95
After ten years	After ten years	1,719		5.59		21,702		2.50		306,789			3.03		After ten years	1,563		6.75		18,290		2.70		276,909		3.14
		$	15,463	4.79	%	$	34,431	2.42	%	$	646,501		2.99	%		$	15,296	4.93	%	$	28,851	2.56	%	$	666,947	3.08	%

		State, County and Municipal Securities				Mortgage-Backed Securities										State, County and Municipal Securities				Mortgage-Backed Securities
(dollars in thousands) Securities held-to-maturity (1)	(dollars in thousands) Securities held-to-maturity (1)	Amount		Yield (2)(3)		Amount		Yield (2)							(dollars in thousands) Securities held-to-maturity (1)	Amount		Yield (2)(3)		Amount		Yield (2)
One year or less	One year or less	$	—	—	%	$	—	—	%						One year or less	$	—	—	%	$	—	—	%
After one year through five years	After one year through five years	—		—		11,044		1.01							After one year through five years	—		—		11,009		1.01
After five years through ten years	After five years through ten years	—		—		26,103		2.03							After five years through ten years	—		—		38,753		2.67
After ten years	After ten years	31,905		3.93		42,602		1.68							After ten years	31,905		3.93		48,547		2.03
		$	31,905	3.93	%	$	79,749	1.70	%							$	31,905	3.93	%	$	98,309	2.17	%

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

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

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

Loans and Allowance for Credit Losses

At ~~June~~September 30, 2022, gross loans outstanding (including loans and loans held for sale) were ~~$18.12~~$19.10 billion, up ~~$987.8 million~~$1.98 billion from $17.13 billion reported at December 31, 2021. Loans increased ~~$1.69~~$2.93 billion, or ~~10.6%~~18.5%, from $15.87 billion at December 31, 2021 to ~~$17.56~~$18.81 billion at ~~June~~September 30, 2022, driven primarily by organic growth. Loans held for sale decreased from $1.25 billion at December 31, 2021 to ~~$555.7~~$298.0 million at ~~June~~September 30, 2022 primarily in our mortgage division.

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

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

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

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

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

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

At the end of the ~~second~~third quarter of 2022, the ACL on loans totaled ~~$172.6~~$184.9 million, or 0.98% of loans, compared with $167.6 million, or 1.06% of loans, at December 31, 2021. Our nonaccrual loans increased from $85.3 million at December 31, 2021 to ~~$122.9~~$118.7 million at ~~June~~September 30, 2022. The increase in nonaccrual loans is attributable to rebooked GNMA loans, which the Company has the right, but not the obligation, to repurchase, and one commercial real estate loan totaling ~~$10.4~~$8.5 million. For the first ~~six~~nine months of 2022, our net charge off ratio as a percentage of average loans ~~decreased~~increased to ~~0.07%~~0.08%, compared with ~~0.10%~~0.06% for the first ~~six~~nine months of 2021. The total provision for credit losses for the first ~~six~~nine months of 2022 was ~~$21.2~~$38.8 million, increasing from a provision release of ~~$28.4~~$38.1 million recorded for the first ~~six~~nine months of 2021. Our ratio of total nonperforming assets to total assets increased from 0.43% at December 31, 2021 to ~~0.56%~~0.55% at ~~June~~September 30, 2022.

The following table presents an analysis of the allowance for credit losses on loans, provision for credit losses on loans and net charge-offs as of and for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		Six Months Ended June 30,					Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2022		2021		(dollars in thousands)	2022		2021
Balance of allowance for credit losses on loans at beginning of period	Balance of allowance for credit losses on loans at beginning of period	$	167,582	$	199,422	Balance of allowance for credit losses on loans at beginning of period	$	167,582	$	199,422

Provision charged to operating expense	Provision charged to operating expense	10,493		(17,478)		Provision charged to operating expense	27,962		(21,462)
Charge-offs:	Charge-offs:					Charge-offs:
Commercial, financial and agricultural	Commercial, financial and agricultural	8,805		5,899		Commercial, financial and agricultural	13,527		6,757
Consumer installment	Consumer installment	2,562		3,117		Consumer installment	3,790		4,764
Indirect automobile	Indirect automobile	129		970		Indirect automobile	179		1,148

Premium finance	Premium finance	2,435		2,537		Premium finance	3,640		3,142
Real estate – construction and development	Real estate – construction and development	—		212		Real estate – construction and development	—		212
Real estate – commercial and farmland	Real estate – commercial and farmland	1,364		1,422		Real estate – commercial and farmland	3,378		1,632
Real estate – residential	Real estate – residential	137		555		Real estate – residential	190		594
Total charge-offs	Total charge-offs	15,432		14,712		Total charge-offs	24,704		18,249

Recoveries:	Recoveries:					Recoveries:
Commercial, financial and agricultural	Commercial, financial and agricultural	5,681		1,352		Commercial, financial and agricultural	7,882		3,338
Consumer installment	Consumer installment	388		568		Consumer installment	665		767
Indirect automobile	Indirect automobile	540		1,072		Indirect automobile	816		1,350

Premium finance	Premium finance	2,360		3,588		Premium finance	3,383		4,237
Real estate – construction and development	Real estate – construction and development	573		251		Real estate – construction and development	669		296
Real estate – commercial and farmland	Real estate – commercial and farmland	81		226		Real estate – commercial and farmland	177		492
Real estate – residential	Real estate – residential	376		781		Real estate – residential	459		1,022
Total recoveries	Total recoveries	9,999		7,838		Total recoveries	14,051		11,502
Net charge-offs	Net charge-offs	5,433		6,874		Net charge-offs	10,653		6,747
Balance of allowance for credit losses on loans at end of period	Balance of allowance for credit losses on loans at end of period	$	172,642	$	175,070	Balance of allowance for credit losses on loans at end of period	$	184,891	$	171,213

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


		As of and for the Six Months Ended							As of and for the Nine Months Ended
(dollars in thousands)	(dollars in thousands)	June 30, 2022			June 30, 2021			(dollars in thousands)	September 30, 2022			September 30, 2021
Allowance for credit losses on loans at end of period	Allowance for credit losses on loans at end of period	$	172,642		$	175,070		Allowance for credit losses on loans at end of period	$	184,891		$	171,213
Net charge-offs for the period	Net charge-offs for the period	5,433			6,874			Net charge-offs for the period	10,653			6,747
Loan balances:	Loan balances:							Loan balances:
End of period	End of period	17,561,022			14,780,791			End of period	18,806,856			14,824,539
Average for the period	Average for the period	16,344,409			14,501,802			Average for the period	16,951,566			14,563,835
Net charge-offs as a percentage of average loans (annualized)	Net charge-offs as a percentage of average loans (annualized)	0.07		%	0.10		%	Net charge-offs as a percentage of average loans (annualized)	0.08		%	0.06		%
Allowance for credit losses on loans as a percentage of end of period loans	Allowance for credit losses on loans as a percentage of end of period loans	0.98		%	1.18		%	Allowance for credit losses on loans as a percentage of end of period loans	0.98		%	1.15		%

Loans

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Commercial, financial and agricultural	Commercial, financial and agricultural	$	2,022,845	$	1,875,993	Commercial, financial and agricultural	$	2,245,287	$	1,875,993
Consumer installment	Consumer installment	167,237		191,298		Consumer installment	162,345		191,298
Indirect automobile	Indirect automobile	172,245		265,779		Indirect automobile	137,183		265,779
Mortgage warehouse	Mortgage warehouse	949,191		787,837		Mortgage warehouse	980,342		787,837
Municipal	Municipal	529,268		572,701		Municipal	516,797		572,701
Premium finance	Premium finance	942,357		798,409		Premium finance	1,062,724		798,409
Real estate – construction and development	Real estate – construction and development	1,747,284		1,452,339		Real estate – construction and development	2,009,726		1,452,339
Real estate – commercial and farmland	Real estate – commercial and farmland	7,156,017		6,834,917		Real estate – commercial and farmland	7,516,309		6,834,917
Real estate – residential	Real estate – residential	3,874,578		3,094,985		Real estate – residential	4,176,143		3,094,985
		$	17,561,022	$	15,874,258		$	18,806,856	$	15,874,258

Non-Performing Assets

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

Nonaccrual loans totaled ~~$122.9~~$118.7 million at ~~June~~September 30, 2022, an increase of ~~$37.6~~$33.4 million, or ~~44.2%~~39.2%, from $85.3 million at December 31, 2021. Accruing loans delinquent 90 days or more totaled ~~$8.5~~$12.4 million at ~~June~~September 30, 2022, a decrease of ~~$4.1 million,~~$270,000, or ~~32.5%~~2.1%, compared with $12.6 million at December 31, 2021. At ~~June~~September 30, 2022, OREO totaled ~~$835,000,~~$843,000, a decrease of $3.0 million, or ~~78.1%~~77.9%, compared with $3.8 million at December 31, 2021. Management regularly assesses the valuation of OREO through periodic reappraisal and through inquiries received in the marketing process. At the end of the ~~second~~third quarter of 2022, total non-performing assets as a percent of total assets increased to ~~0.56%~~0.55% compared with 0.43% at December 31, 2021.

Non-performing assets at ~~June~~September 30, 2022 and December 31, 2021 were as follows:


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	September 30, 2022		December 31, 2021
Nonaccrual loans	Nonaccrual loans	$	122,912	$	85,266	Nonaccrual loans	$	118,676	$	85,266
Accruing loans delinquent 90 days or more	Accruing loans delinquent 90 days or more	8,542		12,648		Accruing loans delinquent 90 days or more	12,378		12,648
Repossessed assets	Repossessed assets	122		84		Repossessed assets	60		84
Other real estate owned	Other real estate owned	835		3,810		Other real estate owned	843		3,810
Total non-performing assets	Total non-performing assets	$	132,411	$	101,808	Total non-performing assets	$	131,957	$	101,808

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 ~~June~~September 30, 2022 and December 31, 2021, the Company had a balance of ~~$41.8~~$39.8 million and $76.6 million, respectively, in troubled debt restructurings. These totals do not include COVID-19 loan modifications accounted for under Section 4013 of the CARES Act. The following table presents the amount of troubled debt restructurings by loan class classified separately as accrual and nonaccrual at ~~June~~September 30, 2022 and December 31, 2021:


June 30, 2022		Accruing Loans			Non-Accruing Loans
September 30, 2022								September 30, 2022	Accruing Loans			Non-Accruing Loans
Loan Class	Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	Commercial, financial and agricultural	9	$	964	3	$	364	Commercial, financial and agricultural	8	$	1,342	3	$	353
Consumer installment	Consumer installment	4	9		10	14		Consumer installment	4	6		10	12
Indirect automobile	Indirect automobile	196	759		30	122		Indirect automobile	170	595		25	101

Premium finance	Premium finance	6	993		—	—		Premium finance	5	456		—	—
Real estate – construction and development	Real estate – construction and development	2	706		—	—		Real estate – construction and development	2	698		1	24
Real estate – commercial and farmland	Real estate – commercial and farmland	18	8,213		4	788		Real estate – commercial and farmland	17	8,091		3	66
Real estate – residential	Real estate – residential	210	24,456		31	4,369		Real estate – residential	206	24,515		29	3,494
Total	Total	445	$	36,100	78	$	5,657	Total	412	$	35,703	71	$	4,050


December 31, 2021	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	12	$	1,286	6	$	83
Consumer installment	7	16		17	35
Indirect automobile	233	1,037		52	273



Real estate – construction and development	4	789		1	13
Real estate – commercial and farmland	25	35,575		5	5,924
Real estate – residential	213	26,879		39	4,678
Total	494	$	65,582	120	$	11,006

The following table presents the amount of troubled debt restructurings by loan class classified separately as those currently paying under restructured terms and those that have defaulted (defined as 30 days past due) under restructured terms at ~~June~~September 30, 2022 and December 31, 2021:


June 30, 2022		Loans Currently Paying Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
September 30, 2022								September 30, 2022	Loans Currently Paying Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
Loan Class	Loan Class	#	Balance (in thousands)		#	Balance (in thousands)		Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	Commercial, financial and agricultural	11	$	971	1	$	357	Commercial, financial and agricultural	10	$	1,347	1	$	348
Consumer installment	Consumer installment	8	13		6	10		Consumer installment	7	6		7	12
Indirect automobile	Indirect automobile	182	697		44	184		Indirect automobile	156	519		39	177

Premium finance	Premium finance	6	993		—	—		Premium finance	5	456		—	—
Real estate – construction and development	Real estate – construction and development	2	706		—	—		Real estate – construction and development	2	698		1	24
Real estate – commercial and farmland	Real estate – commercial and farmland	21	8,993		1	8		Real estate – commercial and farmland	19	8,149		1	8
Real estate – residential	Real estate – residential	198	23,052		43	5,773		Real estate – residential	188	22,017		47	5,992
Total	Total	428	$	35,425	95	$	6,332	Total	387	$	33,192	96	$	6,561


December 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	11	$	1,269	7	$	100
Consumer installment	10	17		14	34
Indirect automobile	233	1,052		52	258



Real estate – construction and development	4	789		1	13
Real estate – commercial and farmland	29	41,452		1	47
Real estate – residential	215	26,956		37	4,601
Total	502	$	71,535	112	$	5,053

The following table presents the amount of troubled debt restructurings by types of concessions made, classified separately as accrual and nonaccrual at ~~June~~September 30, 2022 and December 31, 2021:


June 30, 2022		Accruing Loans			Non-Accruing Loans
September 30, 2022								September 30, 2022	Accruing Loans			Non-Accruing Loans
Type of Concession	Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)		Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forgiveness of interest	Forgiveness of interest	3	$	283	—	$	—	Forgiveness of interest	3	$	280	1	$	55
Forbearance of interest	Forbearance of interest	15	1,070		1	41		Forbearance of interest	13	1,017		1	42

Forbearance of principal	Forbearance of principal	288	21,748		49	4,725		Forbearance of principal	264	21,855		41	3,261

Rate reduction only	Rate reduction only	54	5,311		2	160		Rate reduction only	52	5,038		3	257

Rate reduction, forbearance of interest	Rate reduction, forbearance of interest	32	2,385		2	25		Rate reduction, forbearance of interest	31	2,345		1	2
Rate reduction, forbearance of principal	Rate reduction, forbearance of principal	17	2,336		21	573		Rate reduction, forbearance of principal	14	2,530		21	302
Rate reduction, forgiveness of interest	Rate reduction, forgiveness of interest	36	2,967		3	133		Rate reduction, forgiveness of interest	35	2,638		3	131

Total	Total	445	$	36,100	78	$	5,657	Total	412	$	35,703	71	$	4,050


December 31, 2021	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forgiveness of interest	3	$	287	—	$	—
Forbearance of interest	16	1,218		1	15

Forbearance of principal	332	49,778		73	9,783

Rate reduction only	55	6,321		4	200
Rate reduction, maturity extension	—	—		1	1
Rate reduction, forbearance of interest	33	2,296		6	319
Rate reduction, forbearance of principal	18	2,694		29	363
Rate reduction, forgiveness of interest	37	2,988		6	325

Total	494	$	65,582	120	$	11,006

The following table presents the amount of troubled debt restructurings by collateral types, classified separately as accrual and nonaccrual at ~~June~~September 30, 2022 and December 31, 2021:


June 30, 2022		Accruing Loans			Non-Accruing Loans
September 30, 2022								September 30, 2022	Accruing Loans			Non-Accruing Loans
Collateral Type	Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)		Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	Warehouse	3	$	57	2	$	251	Warehouse	3	$	55	1	$	8
Raw land	Raw land	3	1,751		2	51		Raw land	3	1,717		3	73
Hotel and motel	Hotel and motel	1	130		—	—		Hotel and motel	1	129		—	—
Office	Office	4	613		—	—		Office	3	521		—	—
Retail, including strip centers	Retail, including strip centers	7	3,978		1	496		Retail, including strip centers	7	3,980		1	17
1-4 family residential	1-4 family residential	210	24,456		30	4,359		1-4 family residential	206	24,515		28	3,486
Church	Church	2	2,390		—	—		Church	2	2,388		—	—

Automobile/equipment/CD	Automobile/equipment/CD	209	1,732		43	500		Automobile/equipment/CD	182	1,942		38	466

Unsecured	Unsecured	6	993		—	—		Unsecured	5	456		—	—
Total	Total	445	$	36,100	78	$	5,657	Total	412	$	35,703	71	$	4,050


December 31, 2021	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	3	$	61	2	$	272
Raw land	6	3,776		1	13

Hotel and motel	4	22,069		1	4,798
Office	5	710		1	485
Retail, including strip centers	8	7,118		1	370
1-4 family residential	215	27,129		39	4,678
Church	2	2,393		—	—
Automobile/equipment/CD	251	2,326		75	390


Total	494	$	65,582	120	$	11,006

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 one-to-four family residential construction), multi-family property and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property, excluding owner-occupied properties (loans for which 50% or more of the source of repayment is derived from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property) or the proceeds of the sale, refinancing or permanent financing of the property. Loans for owner-occupied CRE are generally excluded from the CRE guidance.

The CRE guidance is applicable when either:

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

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

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

As of ~~June~~September 30, 2022, the Company exhibited a concentration in the CRE loan category based on Federal Reserve Call codes. The primary risks of CRE lending are:

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

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

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

The following table outlines CRE loan categories and CRE loans as a percentage of total loans as of ~~June~~September 30, 2022 and December 31, 2021. The loan categories and concentrations below are based on Federal Reserve Call codes:


		June 30, 2022			December 31, 2021				September 30, 2022			December 31, 2021
(dollars in thousands)	(dollars in thousands)	Balance		% of Total Loans	Balance		% of Total Loans	(dollars in thousands)	Balance		% of Total Loans	Balance		% of Total Loans
Construction and development loans	Construction and development loans	$	1,747,284	10%	$	1,452,339	9%	Construction and development loans	$	2,009,726	11%	$	1,452,339	9%
Multi-family loans	Multi-family loans	693,382		4%	596,000		4%	Multi-family loans	714,833		4%	596,000		4%
Nonfarm non-residential loans (excluding owner-occupied)	Nonfarm non-residential loans (excluding owner-occupied)	4,539,983		26%	4,341,436		27%	Nonfarm non-residential loans (excluding owner-occupied)	4,815,415		26%	4,341,436		27%
Total CRE Loans (excluding owner-occupied)	Total CRE Loans (excluding owner-occupied)	6,980,649		40%	6,389,775		40%	Total CRE Loans (excluding owner-occupied)	7,539,974		40%	6,389,775		40%
All other loan types	All other loan types	10,580,373		60%	9,484,483		60%	All other loan types	11,266,882		60%	9,484,483		60%
Total Loans	Total Loans	$	17,561,022	100%	$	15,874,258	100%	Total Loans	$	18,806,856	100%	$	15,874,258	100%

The following table outlines the percentage of construction and development loans and total CRE loans, net of owner-occupied loans, to the Bank’s tier I capital plus allowance for credit losses on loans and leases, and the Company’s internal concentration limits as of ~~June~~September 30, 2022 and December 31, 2021:


		Internal Limit		Actual				Internal Limit			Actual
			June 30, 2022		December 31, 2021					September 30, 2022		December 31, 2021
Construction and development loans	Construction and development loans		100%		72%		66%		Construction and development loans	100%		79%		66%
Total CRE loans (excluding owner-occupied)	Total CRE loans (excluding owner-occupied)	300%		288%		291%	Total CRE loans (excluding owner-occupied)	300%			295%		291%

Short-Term Investments

The Company’s short-term investments are comprised of federal funds sold and interest-bearing deposits in banks. At ~~June~~September 30, 2022, the Company’s short-term investments were ~~$1.96~~$1.06 billion, compared with $3.76 billion at December 31, 2021. At ~~June~~September 30, 2022, the Company had $5.0 million in federal funds sold and ~~$1.96~~$1.06 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 forward contracts and IRLCs to economically hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of these instruments amounted to an asset of ~~$10.1~~$23.4 million and $11.9 million at ~~June~~September 30, 2022 and December 31, 2021, respectively, and a liability of $0$1.7 million and $710,000 at ~~June~~September 30, 2022 and December 31, 2021, respectively.

Capital

Common Stock Repurchase Program

On September 19, 2019, the Company announced that its Board of Directors authorized the Company to repurchase up to $100.0 million of its outstanding common stock through October 31, 2020. ~~On October 22, 2020 and again on October 28, 2021, the Company announced that its~~The Company's Board of Directors ~~had approved the extension of~~has subsequently extended the share repurchase program ~~for an additional~~each year ~~in each instance.~~since the original authorization, with the most recent extension, which also included the replenishment of the program to $100.0 million, being announced on October 27, 2022. As a result, the Company is currently authorized to engage in additional share repurchases up to $100.0 million through October 31, ~~2022.~~2023. 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 ~~June~~September 30, 2022, an aggregate of $41.7 million, or 952,910 shares of the Company's common stock, had been repurchased under the program.

Capital Management

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

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

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

As of ~~June~~September 30, 2022, 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 ~~June~~September 30, 2022 and December 31, 2021:


		June 30, 2022	December 31, 2021		September 30, 2022	December 31, 2021
Tier 1 Leverage Ratio (tier 1 capital to average assets)	Tier 1 Leverage Ratio (tier 1 capital to average assets)			Tier 1 Leverage Ratio (tier 1 capital to average assets)
Consolidated	Consolidated	9.01%	8.63%	Consolidated	9.32%	8.63%
Ameris Bank	Ameris Bank	10.30%	9.50%	Ameris Bank	10.70%	9.50%
CET1 Ratio (common equity tier 1 capital to risk weighted assets)	CET1 Ratio (common equity tier 1 capital to risk weighted assets)			CET1 Ratio (common equity tier 1 capital to risk weighted assets)
Consolidated	Consolidated	10.11%	10.46%	Consolidated	10.06%	10.46%
Ameris Bank	Ameris Bank	11.54%	11.50%	Ameris Bank	11.56%	11.50%
Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)	Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)			Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)
Consolidated	Consolidated	10.11%	10.46%	Consolidated	10.06%	10.46%
Ameris Bank	Ameris Bank	11.54%	11.50%	Ameris Bank	11.56%	11.50%
Total Capital Ratio (total capital to risk weighted assets)	Total Capital Ratio (total capital to risk weighted assets)			Total Capital Ratio (total capital to risk weighted assets)
Consolidated	Consolidated	13.27%	13.78%	Consolidated	13.15%	13.78%
Ameris Bank	Ameris Bank	12.61%	12.45%	Ameris Bank	12.64%	12.45%

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 ALCO Committee. The policy outlines limits on interest rate risk in terms of changes in net interest income and changes in the net market values of assets and liabilities over certain changes in interest rate environments. These measurements are made through a simulation model which projects the impact of changes in interest rates on the Bank’s assets and liabilities. The policy also outlines responsibility for monitoring interest rate risk, and the process for the approval, implementation and monitoring of interest rate risk strategies to achieve the Bank’s interest rate risk objectives.

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

The normal course of business activity exposes the Company to interest rate risk. Interest rate risk is managed within an overall asset and liability framework for the Company. The principal objectives of asset and liability management are to predict the sensitivity of net interest spreads to potential changes in interest rates, control risk and enhance profitability. Funding positions are kept within predetermined limits designed to properly manage risk and liquidity. The Company employs sensitivity analysis

in the form of a net interest income simulation to help characterize the market risk arising from changes in interest rates. In addition, fluctuations in interest rates usually result in changes in the fair market value of the Company’s financial instruments, cash flows and net interest income. The Company’s interest rate risk position is managed by the ALCO Committee.

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

Liquidity management involves the matching of the cash flow requirements of customers, who may be either depositors desiring to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs, and the ability of Ameris to manage those requirements. The Company strives to maintain an adequate liquidity position by managing the balances and maturities of interest-earning assets and interest-bearing liabilities so that the balance it has in short-term assets at any given time will adequately cover any reasonably anticipated immediate need for funds. Additionally, the Bank maintains relationships with correspondent banks, which could provide funds on short notice, if needed. The Company has invested in FHLB stock for the purpose of establishing credit lines with the FHLB. The credit availability to the Bank is equal to 30% of the Bank’s total assets as reported on the most recent quarterly financial information submitted to the regulators subject to the pledging of sufficient collateral. At ~~June~~September 30, 2022 and December 31, 2021, the net carrying value of the Company’s other borrowings was ~~$425.6~~$725.7 million and $739.9 million, respectively.

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


		June 30, 2022	March 31, 2022	December 31, 2021	September 30, 2021	June 30, 2021		September 30, 2022	June 30, 2022	March 31, 2022	December 31, 2021	September 30, 2021
Investment securities available-for-sale to total deposits	Investment securities available-for-sale to total deposits	5.35%	2.96%	3.01%	3.63%	4.26%	Investment securities available-for-sale to total deposits	6.45%	5.35%	2.96%	3.01%	3.63%
Loans (net of unearned income) to total deposits	Loans (net of unearned income) to total deposits	89.21%	82.41%	80.72%	78.71%	80.96%	Loans (net of unearned income) to total deposits	96.61%	89.21%	82.41%	80.72%	78.71%
Interest-earning assets to total assets	Interest-earning assets to total assets	89.88%	90.43%	90.56%	91.20%	90.79%	Interest-earning assets to total assets	90.76%	89.88%	90.43%	90.56%	91.20%
Interest-bearing deposits to total deposits	Interest-bearing deposits to total deposits	58.02%	59.82%	60.46%	59.56%	61.75%	Interest-bearing deposits to total deposits	57.14%	58.02%	59.82%	60.46%	59.56%

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 ~~June~~September 30, 2022 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 are part of the Company’s program to manage interest rate sensitivity.

The Company also had forward contracts and IRLCs to economically hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of these instruments amounted to an asset of approximately ~~$10.1~~$23.4 million and $11.9 million at ~~June~~September 30, 2022 and December 31, 2021, respectively, and a liability of $0$1.7 million and $710,000 at ~~June~~September 30, 2022 and December 31, 2021, 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.

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

Item 4. Controls and Procedures.

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

During the quarter ended ~~June~~September 30, 2022, there was no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Disclosure concerning legal proceedings can be found in Part I - "Financial Information, Item 1. Financial Statements, Notes to Unaudited Consolidated Financial Statements, Note 98 – Commitments and Contingencies" under the 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, 2021.

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

c) Issuer Purchases of Equity Securities.

The table below sets forth information regarding the Company’s repurchase of shares of its outstanding common stock during the three-month period ended ~~June~~September 30, 2022.

Period
Total
Number of
Shares
Purchased
Average Price
Paid Per Share Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
Approximate
Dollar Value of
Shares That
May Yet be
Purchased
Under the Plans
or Programs(1)
April 1, 2022 through April 30, 2022 — $ — — $ 63,310,664
May 1, 2022 through May 31, 2022 118,157 $ 42.72 118,157 $ 58,262,530
June 1, 2022 through June 30, 2022 — $ — — $ 58,262,530
Total 118,157 $ — 118,157 $ 58,262,530


Period	Total Number of Shares Purchased(1)	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(2)
July 1, 2022 through July 31, 2022	3,038	$	42.07	—	$	58,262,530
August 1, 2022 through August 31, 2022	244	$	48.06	—	$	58,262,530
September 1, 2022 through September 30, 2022	—	$	—	—	$	58,262,530
Total	3,282	$	42.52	—	$	58,262,530

(1)The shares purchased from July 1, 2022 through September 30, 2022 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.

(2)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 and again on October 28, 2021, the Company announced that its~~The Company’s Board of Directors ~~had approved the extension of~~has subsequently extended the share repurchase program ~~for an additional~~each year ~~in each instance.~~since the original authorization, with the most recent extension, which also included the replenishment of the program to $100.0 million, being announced on October 27, 2022. As a result, the Company is currently authorized to engage in additional share repurchases totaling up to $100.0 million through October 31, ~~2022.~~2023. 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 ~~June~~September 30, 2022, an aggregate of $41.7 million, or 952,910 shares of the Company's common stock, had been repurchased under the program.

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 through June 11, 2020 (incorporated by reference to Exhibit 3.8 to Ameris Bancorp's Quarterly Report on Form 10-Q filed with the SEC on August 10, 2020).

10.1*						Ameris Bancorp 2021 Omnibus Equity Incentive Plan, as amended and restated through July 26, ~~2022.~~

10.2*						~~Summary of Director Compensation.~~2022 (incorporated by reference to Exhibit 10.1 to Ameris Bancorp's Quarterly Report on Form 10-Q filed with the SEC on August 5, 2022).

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

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

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

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

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

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

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

* Management contract or a compensatory plan or arrangement.

SIGNATURE

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


Dated: ~~August 5,~~November 7, 2022			AMERIS BANCORP

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


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs(1)
April 1, 2022 through April 30, 2022	—	$	—	—	$	63,310,664
May 1, 2022 through May 31, 2022	118,157	$	42.72	118,157	$	58,262,530
June 1, 2022 through June 30, 2022	—	$	—	—	$	58,262,530
Total	118,157	$	—	118,157	$	58,262,530