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 30, 2022~~March 31, 2023


			☐			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~~69,373,863 shares of Common Stock outstanding as of ~~July 31, 2022.~~May 3, 2023.

AMERIS BANCORP

TABLE OF CONTENTS


		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Balance Sheets as of ~~June~~March 31, 202 3 3 0 ~~, 2022~~ (unaudited) and December 31, 202122	1

	Consolidated Statements of Income and Comprehensive Income for the Three ~~and Six~~Months Ended ~~June~~ 30March 31 , ~~2022~~202 3 and ~~2021~~202 2 (unaudited)	2

	Consolidated Statements of Shareholders’ Equity for the Three ~~and Six~~ Months Ended ~~June~~Marc 3 0h 31 , ~~2022~~202 3 and ~~2021~~202 2 (unaudited)	3

	Consolidated Statements of Cash Flows for the STixhree Months Ended ~~June~~ 3 0March 31 , ~~2022~~202 3 and ~~2021~~202 2 (unaudited)	54

	Notes to Consolidated Financial Statements	76

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3630

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	5744

Item 4.	Controls and Procedures.	5845

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	5946

Item 1A.	Risk Factors.	5946

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	5946

Item 3.	Defaults Upon Senior Securities.	5947

Item 4.	Mine Safety Disclosures.	5947

Item 5.	Other Information.	5947

Item 6.	Exhibits.	6048

Signatures		6149

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			March 31, 2023 (unaudited)		December 31, 2022
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	345,627	$	307,813	Cash and due from banks	$	266,400	$	284,567
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	1,754,453		833,565
Cash and cash equivalents	Cash and cash equivalents	2,306,836		4,064,657		Cash and cash equivalents	2,020,853		1,118,132

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 $82 and $75						Debt securities available-for-sale, at fair value, net of allowance for credit losses of $82 and $75	1,496,836		1,500,060
Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $116,093 and $114,538)						Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $116,093 and $114,538)	134,175		134,864
Other investments	Other investments	49,500		47,552		Other investments	146,715		110,992
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	395,096		392,078

Loans, net of unearned income	Loans, net of unearned income	17,561,022		15,874,258		Loans, net of unearned income	19,997,871		19,855,253
Allowance for credit losses	Allowance for credit losses	(172,642)		(167,582)		Allowance for credit losses	(242,658)		(205,677)
Loans, net	Loans, net	17,388,380		15,706,676		Loans, net	19,755,213		19,649,576

Other real estate owned, net	Other real estate owned, net	835		3,810		Other real estate owned, net	1,502		843
Premises and equipment, net	Premises and equipment, net	224,249		225,400		Premises and equipment, net	218,878		220,283
Goodwill	Goodwill	1,023,056		1,012,620		Goodwill	1,015,646		1,015,646
Other intangible assets, net	Other intangible assets, net	115,613		125,938		Other intangible assets, net	101,488		106,194
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	389,201		388,405

Other assets	Other assets	474,552		413,419		Other assets	412,781		416,213
Total assets	Total assets	$	23,687,470	$	23,858,321	Total assets	$	26,088,384	$	25,053,286

Liabilities	Liabilities					Liabilities
Deposits:	Deposits:					Deposits:
Noninterest-bearing	Noninterest-bearing	$	8,262,929	$	7,774,823	Noninterest-bearing	$	7,297,893	$	7,929,579
Interest-bearing	Interest-bearing	11,422,053		11,890,730		Interest-bearing	12,599,562		11,533,159
Total deposits	Total deposits	19,684,982		19,665,553		Total deposits	19,897,455		19,462,738
Securities sold under agreements to repurchase		953		5,845

Other borrowings	Other borrowings	425,592		739,879		Other borrowings	2,401,327		1,875,736
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	127,325		126,328		Subordinated deferrable interest debentures	128,820		128,322
Other liabilities	Other liabilities	375,242		354,265		Other liabilities	407,587		389,090
Total liabilities	Total liabilities	20,614,094		20,891,870		Total liabilities	22,835,189		21,855,886

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; 72,484,210 and 72,263,727 shares issued						Common stock, par value $1; 200,000,000 shares authorized; 72,484,210 and 72,263,727 shares issued	72,484		72,264
Capital surplus	Capital surplus	1,931,088		1,924,813		Capital surplus	1,937,664		1,935,211
Retained earnings	Retained earnings	1,157,359		1,006,436		Retained earnings	1,362,512		1,311,258
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	(35,581)		(46,507)
Treasury stock, at cost, 2,891,395 and 2,407,898 shares		(74,687)		(52,405)
Treasury stock, at cost, 3,110,347 and 2,894,677 shares						Treasury stock, at cost, 3,110,347 and 2,894,677 shares	(83,884)		(74,826)
Total shareholders’ equity	Total shareholders’ equity	3,073,376		2,966,451		Total shareholders’ equity	3,253,195		3,197,400
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	23,687,470	$	23,858,321	Total liabilities and shareholders’ equity	$	26,088,384	$	25,053,286

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 March 31,
		2022		2021		2022		2021			2023		2022
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	$	271,964	$	177,566
Interest on taxable securities	Interest on taxable securities	7,064		5,244		11,303		11,362		Interest on taxable securities	14,300		4,239
Interest on nontaxable securities	Interest on nontaxable securities	269		139		455		280		Interest on nontaxable securities	339		186
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	9,113		1,383
Total interest income	Total interest income	202,568		173,751		385,942		351,701		Total interest income	295,716		183,374

Interest expense	Interest expense									Interest expense
Interest on deposits	Interest on deposits	4,908		5,775		9,000		12,573		Interest on deposits	53,182		4,092
Interest on other borrowings	Interest on other borrowings	6,296		6,124		13,034		12,299		Interest on other borrowings	30,882		6,738
Total interest expense	Total interest expense	11,204		11,899		22,034		24,872		Total interest expense	84,064		10,830

Net interest income	Net interest income	191,364		161,852		363,908		326,829		Net interest income	211,652		172,544
Provision for loan losses	Provision for loan losses	13,227		(899)		10,493		(17,478)		Provision for loan losses	49,376		(2,734)
Provision for unfunded commitments	Provision for unfunded commitments	1,779		1,299		10,788		(10,540)		Provision for unfunded commitments	346		9,009
Provision for other credit losses	Provision for other credit losses	(82)		(258)		(126)		(431)		Provision for other credit losses	7		(44)
Provision for credit losses	Provision for credit losses	14,924		142		21,155		(28,449)		Provision for credit losses	49,729		6,231
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	161,923		166,313

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	10,936		11,058
Mortgage banking activity	Mortgage banking activity	58,761		70,231		121,699		168,717		Mortgage banking activity	31,392		62,938
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	971		939
Net loss on securities		248		1		221		(11)
Net gain (loss) on securities										Net gain (loss) on securities	6		(27)
Other noninterest income	Other noninterest income	12,686		6,945		24,689		14,599		Other noninterest income	12,745		12,003
Total noninterest income	Total noninterest income	83,841		89,240		170,752		207,213		Total noninterest income	56,050		86,911

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	80,910		84,281
Occupancy and equipment	Occupancy and equipment	12,746		10,812		25,473		22,593		Occupancy and equipment	12,986		12,727
Data processing and communications expenses	Data processing and communications expenses	12,155		11,877		24,727		23,761		Data processing and communications expenses	13,034		12,572
Credit resolution-related expenses	Credit resolution-related expenses	496		622		(469)		1,169		Credit resolution-related expenses	435		(965)
Advertising and marketing	Advertising and marketing	3,122		1,946		5,110		3,377		Advertising and marketing	3,532		1,988
Amortization of intangible assets	Amortization of intangible assets	5,144		4,065		10,325		8,191		Amortization of intangible assets	4,706		5,181
Merger and conversion charges	Merger and conversion charges	—		—		977		—		Merger and conversion charges	—		977
Loan servicing expense	Loan servicing expense	9,920		4,914		18,839		10,814		Loan servicing expense	8,331		8,919
Other noninterest expenses	Other noninterest expenses	17,068		16,020		35,208		33,164		Other noninterest expenses	15,487		18,140
Total noninterest expense	Total noninterest expense	142,196		135,761		286,016		284,559		Total noninterest expense	139,421		143,820

Income before income tax expense	Income before income tax expense	118,085		115,189		227,489		277,932		Income before income tax expense	78,552		109,404
Income tax expense	Income tax expense	28,019		26,862		55,725		64,643		Income tax expense	18,131		27,706
Net income	Net income	90,066		88,327		171,764		213,289		Net income	60,421		81,698

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 gains (losses) arising during period on debt securities available-for-sale, net of tax expense (benefit) of $3,719 and $(4,633)										Net unrealized holding gains (losses) arising during period on debt securities available-for-sale, net of tax expense (benefit) of $3,719 and $(4,633)	10,926		(17,431)

Total other comprehensive loss	Total other comprehensive loss	(10,794)		(1,066)		(28,225)		(8,481)		Total other comprehensive loss	10,926		(17,431)
Comprehensive income	Comprehensive income	$	79,272	$	87,261	$	143,539	$	204,808	Comprehensive income	$	71,347	$	64,267

Basic earnings per common share	Basic earnings per common share	$	1.30	$	1.27	$	2.48	$	3.07	Basic earnings per common share	$	0.87	$	1.18
Diluted earnings per common share	Diluted earnings per common share	$	1.30	$	1.27	$	2.47	$	3.06	Diluted earnings per common share	$	0.87	$	1.17
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	69,172		69,346
Diluted	Diluted	69,316		69,792		69,485		69,765		Diluted	69,323		69,661

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 March 31, 2023

		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, December 31, 2022																						Balance, December 31, 2022		72,263,727				$	72,264		$	1,935,211			$	1,311,258		$	(46,507)			2,894,677		$	(74,826)		$	3,197,400

Issuance of restricted shares	Issuance of restricted shares	18,953	19		(19)				—			—		—		—			—			Issuance of restricted shares		101,510				101		(101)				—			—				—		—			—
Forfeitures of restricted shares		(10,751)	(11)		(81)				—			—		—		—			(92)

Issuance of common shares pursuant to PSU agreements																						Issuance of common shares pursuant to PSU agreements		102,973				103		(103)				—			—				—		—			—
Proceeds from exercise of stock options	Proceeds from exercise of stock options	31,332	31		849				—			—		—		—			880			Proceeds from exercise of stock options		16,000				16		460				—			—				—		—			476
Share-based compensation	Share-based compensation	—	—		1,637				—			—		—		—			1,637			Share-based compensation		—				—		2,197				—			—				—		—			2,197
Purchase of treasury shares	Purchase of treasury shares	—	—		—				—			—		118,157		(5,048)			(5,048)			Purchase of treasury shares		—				—		—				—			—				215,670		(9,058)			(9,058)
Net income	Net income	—	—		—				90,066			—		—		—			90,066			Net income		—				—		—				60,421			—				—		—			60,421
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)		—				—		—				(10,444)			—				—		—			(10,444)

Other comprehensive loss during the period		—	—		—				—			(10,794)		—		—			(10,794)
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
Cumulative effect of change in accounting principle for ASU 2022-02																						Cumulative effect of change in accounting principle for ASU 2022-02		—				—		—				1,277			—				—		—			1,277
Other comprehensive income during the period																						Other comprehensive income during the period		—				—		—				—			10,926				—		—			10,926
Balance, March 31, 2023																						Balance, March 31, 2023		72,484,210				$	72,484	$	1,937,664			$	1,362,512		$	(35,581)			3,110,347		$	(83,884)		$	3,253,195

		Six Months Ended June 30, 2022

		Common Stock			Capital Surplus				Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock					Total Shareholders' Equity
		Shares	Amount								Shares			Amount
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		164,346	164		1,177				—			—		—		—			1,341
Forfeitures of restricted shares		(10,751)	(10)		(81)				—			—		—		—			(91)
Proceeds from exercise of stock options		81,135	80		2,244				—			—		—		—			2,324
Share-based compensation		—	—		2,935				—			—		—		—			2,935
Purchase of treasury shares		—	—		—				—			—		483,497		(22,282)			(22,282)
Net income		—	—		—				171,764			—		—		—			171,764
Dividends on common shares ($0.30 per share)		—	—		—				(20,841)			—		—		—			(20,841)

Other comprehensive loss during the period		—	—		—				—			(28,225)		—		—			(28,225)
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


		Three Months Ended June 30, 2021

		Common Stock			Capital Surplus				Retained Earnings			Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock				Total Shareholders' Equity
		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

																						Three Months Ended March 31, 2022

																						Common Stock					Capital Surplus				Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock				Total Shareholders' Equity
																						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

Issuance of restricted shares	Issuance of restricted shares	13,233	13		(13)				—			—		—		—		—		Issuance of restricted shares		145,393			145		1,196				—			—		—		—		1,341
Forfeitures of restricted shares		(750)	(1)		(19)				—			—		—		—		(20)

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		49,803			50		1,395				—			—		—		—		1,445
Share-based compensation	Share-based compensation	—	—		1,441				—			—		—		—		1,441		Share-based compensation		—			—		1,298				—			—		—		—		1,298
Purchase of treasury shares	Purchase of treasury shares	—	—		—				—			—		—		—		—		Purchase of treasury shares		—			—		—				—			—		365,340		(17,234)		(17,234)
Net income	Net income	—	—		—				88,327			—		—		—		88,327		Net income		—			—		—				81,698			—		—		—		81,698
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)		—			—		—				(10,409)			—		—		—		(10,409)

Other comprehensive loss during the period	Other comprehensive loss during the period	—	—		—				—			(1,066)		—		—		(1,066)		Other comprehensive loss during the period		—			—		—				—			(17,431)		—		—		(17,431)
Balance, June 30, 2021		72,007,871	$	72,008	$	1,920,566			$	863,828		$	25,024	2,240,662		$	(44,422)	$	2,837,004

		Six Months Ended June 30, 2021

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

Issuance of restricted shares		99,308	99		500				—			—		—		—		599
Forfeitures of restricted shares		(750)	(1)		(19)				—			—		—		—		(20)
Proceeds from exercise of stock options		155,608	156		4,055				—			—		—		—		4,211
Share-based compensation		—	—		2,745				—			—		—		—		2,745
Purchase of treasury shares		—	—		—				—			—		28,438		(1,456)		(1,456)
Net income		—	—		—				213,289			—		—		—		213,289
Dividends on common shares ($0.30 per share)		—	—		—				(20,971)			—		—		—		(20,971)

Other comprehensive loss during the period		—	—		—				—			(8,481)		—		—		(8,481)
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, March 31, 2022																				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

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,					Three Months Ended March 31,
		2022		2021			2023		2022
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	171,764	$	213,289	Net income	$	60,421	$	81,698
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	4,648		4,553
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	15		37
Net write-downs on other assets		—		149

Provision for credit losses	Provision for credit losses	21,155		(28,449)		Provision for credit losses	49,729		6,231
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	(49)		(1,459)
Share-based compensation expense	Share-based compensation expense	3,045		3,454		Share-based compensation expense	2,197		1,499
Amortization of intangible assets	Amortization of intangible assets	10,325		8,191		Amortization of intangible assets	4,706		5,181
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	2,872		2,904
Provision for deferred taxes	Provision for deferred taxes	10,505		26,488		Provision for deferred taxes	(2,807)		6,435
Net amortization of investment securities available-for-sale		588		1,985
Net amortization of investment securities held-to-maturity		51		1
Net (accretion) amortization of investment securities available-for-sale						Net (accretion) amortization of investment securities available-for-sale	(1,417)		392
Net (accretion) amortization of investment securities held-to-maturity						Net (accretion) amortization of investment securities held-to-maturity	(39)		26
Net amortization of other investments	Net amortization of other investments	396		—		Net amortization of other investments	388		252
Net (gain) loss on securities	Net (gain) loss on securities	(221)		11		Net (gain) loss on securities	(6)		27
Accretion of discount on purchased loans, net	Accretion of discount on purchased loans, net	(627)		(10,589)		Accretion of discount on purchased loans, net	(420)		(1,006)
Net amortization on other borrowings	Net amortization on other borrowings	216		222		Net amortization on other borrowings	627		108
Amortization of subordinated deferrable interest debentures	Amortization of subordinated deferrable interest debentures	997		986		Amortization of subordinated deferrable interest debentures	498		499
Loan servicing asset recovery	Loan servicing asset recovery	(20,492)		(11,388)		Loan servicing asset recovery	—		(9,654)
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	(754,727)		(1,220,771)
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	3,661		10,505
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	748,633		1,464,735
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	(2,919)		22,792
Originations of SBA loans	Originations of SBA loans	(30,793)		(44,257)		Originations of SBA loans	(8,873)		(14,042)
Proceeds from sales of SBA loans	Proceeds from sales of SBA loans	40,286		41,017		Proceeds from sales of SBA loans	5,648		20,461
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	(175)		(2,325)
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	(2,200)		(1,768)
Gain on bank owned life insurance proceeds	Gain on bank owned life insurance proceeds	—		(603)		Gain on bank owned life insurance proceeds	(486)		—
Net gains on other loans held for sale		—		(457)

Change attributable to other operating activities	Change attributable to other operating activities	(24,580)		(13,363)		Change attributable to other operating activities	21,776		(16,887)
Net cash provided by (used in) operating activities		713,868		(92,227)
Net cash provided by operating activities						Net cash provided by operating activities	131,701		360,423

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		—		249

Purchases of securities available-for-sale	Purchases of securities available-for-sale	(613,715)		—		Purchases of securities available-for-sale	—		(15,667)
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	—		(12,036)
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	19,280		42,844

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	728		406
Net (increase) decrease in other investments		(2,123)		570
Net increase in other investments						Net increase in other investments	(36,105)		(2,122)
Net increase in loans	Net increase in loans	(1,533,706)		(219,110)		Net increase in loans	(153,072)		(205,189)
Purchases of premises and equipment	Purchases of premises and equipment	(8,192)		(17,196)		Purchases of premises and equipment	(3,258)		(3,550)
Proceeds from sale of premises and equipment		46		946

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	1,042		3,524

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	1,890		—
Payments received on other loans held for sale		—		9,136
Proceeds from sales of other loans held for sale		—		156,803
Net cash and cash equivalents paid in acquisitions		(14,003)		—
Net cash provided by (used in) investing activities		(2,130,922)		3,575

				(Continued)
Net cash and cash equivalents paid in acquisitions						Net cash and cash equivalents paid in acquisitions	—		(13,237)
Net cash used in investing activities						Net cash used in investing activities	(169,495)		(205,027)

									(Continued)

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
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	$	434,717	$	(77,112)
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	—		(3,780)

Proceeds from other borrowings						Proceeds from other borrowings	6,655,000		—
Repayment of other borrowings	Repayment of other borrowings	(314,503)		(74)		Repayment of other borrowings	(6,130,036)		(314,467)

Proceeds from exercise of stock options	Proceeds from exercise of stock options	2,324		4,211		Proceeds from exercise of stock options	476		1,445
Dividends paid - common stock	Dividends paid - common stock	(20,843)		(20,888)		Dividends paid - common stock	(10,584)		(10,445)
Purchase of treasury shares	Purchase of treasury shares	(22,282)		(1,456)		Purchase of treasury shares	(9,058)		(17,234)
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	940,515		(421,593)

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	902,721		(266,197)
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	1,118,132		4,064,657
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	$	2,020,853	$	3,798,460

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 (received) during the period for:						Cash paid (received) during the period for:
Interest	Interest	$	23,472	$	25,985	Interest	$	76,589	$	9,022
Income taxes	Income taxes	51,851		30,924		Income taxes	(1)		204
Loans transferred to other real estate owned	Loans transferred to other real estate owned	229		1,239		Loans transferred to other real estate owned	1,652		165
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	5,734		71,727

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	1,942		1,537
Assets acquired in business acquisitions	Assets acquired in business acquisitions	10,734		—		Assets acquired in business acquisitions	—		10,023
Liabilities assumed in business acquisitions	Liabilities assumed in business acquisitions	(3,269)		—		Liabilities assumed in business acquisitions	—		(3,214)

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	10,926		(17,431)

Security purchases settled in a subsequent period						Security purchases settled in a subsequent period	—		(36,216)

									(Concluded)

				(Concluded)

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

~~June 30, 2022~~March 31, 2023

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 30, 2022,~~March 31, 2023, 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 month periods~~months ended ~~June 30, 2022~~March 31, 2023 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.~~2022.

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~~There was no 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 30, 2022~~both March 31, 2023 and December 31, ~~2021, respectively.~~2022.

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~~Adopted in 2023

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. The Company adopted this ASU ~~2022-02 is~~ effective January 1, 2022 on a prospective basis, except 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~~the amendments related to ~~the~~ recognition and measurement of TDRs, ~~may optionally be~~which were adopted using athe modified retrospective ~~transition~~ method. The adoption was not material and resulted in a reduction to the allowance for credit losses of $1.7 million and an increase to retained earnings of $1.3 million.

~~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 –~~2022-06 - 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 consequencesDeferral of the ~~scope clarification and to tailor~~Sunset Date of Topic 848. ASU No. 2022-06 extends 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 istemporary relief in ~~effect for a limited time,~~Topic 848 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~~2022 to December 31, 2024. Topic 848 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,~~objective of this guidance is to provide ~~expedients and exceptions for applying GAAP to contract modifications and hedging relationships affected by reference~~temporary relief during the transition period away from LIBOR toward new interest rate ~~reform if certain criteria are met.~~benchmarks. This update was effective upon issuance. 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 containsCompany adopted 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~~in Topic 848 effective January 1, 2023 and 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 onadoption was not material the consolidated financial ~~statements of adopting ASU 2020-04.~~statements.

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
March 31, 2023												March 31, 2023
U.S. Treasuries	U.S. Treasuries	$	314,613	$	—	$	—	$	(1,724)	$	312,889	U.S. Treasuries	$	776,583	$	—	$	911	$	(11,365)	$	766,129
U.S. government-sponsored agencies	U.S. government-sponsored agencies	2,050		—		—		(29)		2,021		U.S. government-sponsored agencies	1,032		—		—		(45)		987
State, county and municipal securities	State, county and municipal securities	41,428		—		261		(726)		40,963		State, county and municipal securities	33,965		—		21		(773)		33,213
Corporate debt securities	Corporate debt securities	15,897		(88)		2		(348)		15,463		Corporate debt securities	16,397		(82)		—		(705)		15,610
SBA pool securities	SBA pool securities	35,854		—		6		(1,429)		34,431		SBA pool securities	26,942		—		3		(1,603)		25,342
Mortgage-backed securities	Mortgage-backed securities	658,508		—		420		(12,427)		646,501		Mortgage-backed securities	686,223		—		317		(30,985)		655,555
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	$	1,541,142	$	(82)	$	1,252	$	(45,476)	$	1,496,836

December 31, 2021

December 31, 2022												December 31, 2022
U.S. Treasuries												U.S. Treasuries	$	775,784	$	—	$	131	$	(16,381)	$	759,534
U.S. government-sponsored agencies	U.S. government-sponsored agencies	$	7,084	$	—	$	88	$	—	$	7,172	U.S. government-sponsored agencies	1,036		—		—		(57)		979
State, county and municipal securities	State, county and municipal securities	45,470		—		2,342		—		47,812		State, county and municipal securities	35,358		—		17		(1,180)		34,195
Corporate debt securities	Corporate debt securities	27,897		—		719		(120)		28,496		Corporate debt securities	16,397		(75)		—		(396)		15,926
SBA pool securities	SBA pool securities	44,312		—		958		(69)		45,201		SBA pool securities	29,422		—		3		(2,027)		27,398
Mortgage-backed securities	Mortgage-backed securities	448,124		—		15,822		(6)		463,940		Mortgage-backed securities	701,008		—		113		(39,093)		662,028
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	$	1,559,005	$	(75)	$	264	$	(59,134)	$	1,500,060

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
March 31, 2023										March 31, 2023

State, county and municipal securities	State, county and municipal securities	$	31,905	$	—	$	(4,279)	$	27,626	State, county and municipal securities	$	31,905	$	—	$	(4,575)	$	27,330

Mortgage-backed securities	Mortgage-backed securities	79,749		—		(10,231)		69,518		Mortgage-backed securities	102,270		—		(13,507)		88,763
Total debt securities held-to-maturity	Total debt securities held-to-maturity	$	111,654	$	—	$	(14,510)	$	97,144	Total debt securities held-to-maturity	$	134,175	$	—	$	(18,082)	$	116,093

December 31, 2021
December 31, 2022										December 31, 2022

State, county and municipal securities	State, county and municipal securities	$	8,905	$	4	$	(198)	$	8,711	State, county and municipal securities	$	31,905	$	—	$	(5,380)	$	26,525

Mortgage-backed securities	Mortgage-backed securities	70,945		—		(1,450)		69,495		Mortgage-backed securities	102,959		—		(14,946)		88,013
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	$	134,864	$	—	$	(20,326)	$	114,538

The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity as of ~~June 30, 2022,~~March 31, 2023, 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	$	76,191	$	75,649	$	—	$	—
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	732,862		722,272		—		—
Due from five to ten years	Due from five to ten years	31,462		31,085		—		—		Due from five to ten years	23,108		22,363		—		—
Due after ten years	Due after ten years	32,206		30,649		31,905		27,626		Due after ten years	22,758		20,997		31,905		27,330
Mortgage-backed securities	Mortgage-backed securities	658,508		646,501		79,749		69,518		Mortgage-backed securities	686,223		655,555		102,270		88,763
		$	1,068,350	$	1,052,268	$	111,654	$	97,144		$	1,541,142	$	1,496,836	$	134,175	$	116,093

Securities with a carrying value of approximately ~~$298.2~~$927.7 million and ~~$366.7~~$861.6 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		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
March 31, 2023														March 31, 2023
U.S. Treasuries	U.S. Treasuries	$	312,889	$	(1,724)	$	—	$	—	$	312,889	$	(1,724)	U.S. Treasuries	$	509,696	$	(9,501)	$	73,070	$	(1,864)	$	582,766	$	(11,365)
U.S. government-sponsored agencies	U.S. government-sponsored agencies	2,021		(29)		—		—		2,021		(29)		U.S. government-sponsored agencies	—		—		987		(45)		987		(45)
State, county and municipal securities	State, county and municipal securities	15,199		(726)		—		—		15,199		(726)		State, county and municipal securities	11,374		(174)		12,223		(599)		23,597		(773)
Corporate debt securities	Corporate debt securities	12,244		(256)		1,320		(92)		13,564		(348)		Corporate debt securities	888		(10)		13,223		(695)		14,111		(705)
SBA pool securities	SBA pool securities	31,755		(1,379)		2,310		(50)		34,065		(1,429)		SBA pool securities	472		(20)		24,660		(1,583)		25,132		(1,603)
Mortgage-backed securities	Mortgage-backed securities	569,386		(12,427)		1		—		569,387		(12,427)		Mortgage-backed securities	369,445		(14,305)		261,152		(16,680)		630,597		(30,985)
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	$	891,875	$	(24,010)	$	385,315	$	(21,466)	$	1,277,190	$	(45,476)

December 31, 2021

December 31, 2022														December 31, 2022
U.S. Treasuries														U.S. Treasuries	$	725,250	$	(16,381)	$	—	$	—	$	725,250	$	(16,381)
U.S. government sponsored agencies														U.S. government sponsored agencies	979		(57)		—		—		979		(57)
State, county and municipal securities														State, county and municipal securities	27,438		(1,180)		—		—		27,438		(1,180)
Corporate debt securities	Corporate debt securities	$	—	$	—	$	1,380	$	(120)	$	1,380	$	(120)	Corporate debt securities	13,271		(126)		1,155		(270)		14,426		(396)
SBA pool securities	SBA pool securities	1,312		(6)		2,572		(63)		3,884		(69)		SBA pool securities	17,806		(1,298)		9,329		(729)		27,135		(2,027)
Mortgage-backed securities	Mortgage-backed securities	5,514		(6)		1		—		5,515		(6)		Mortgage-backed securities	620,544		(37,774)		16,847		(1,319)		637,391		(39,093)
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	$	1,405,288	$	(56,816)	$	27,331	$	(2,318)	$	1,432,619	$	(59,134)

As of ~~June 30, 2022,~~March 31, 2023, the Company’s available-for-sale security portfolio consisted of ~~433~~438 securities, ~~331~~410 of which were in an unrealized loss position. At ~~June 30, 2022,~~March 31, 2023, the Company held ~~270~~329 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 30, 2022,~~March 31, 2023, the Company held 3330 U.S. Small Business Administration (“SBA”) pool securities, 1224 state, county and municipal securities, 4six corporate securities, 2one U.S. government-sponsored agency ~~securities,~~security, and ~~10 US~~20 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 30,~~March 31, 2023 and December 31, 2022:


		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
March 31, 2023														March 31, 2023

State, county and municipal securities	State, county and municipal securities	$	27,626	$	(4,279)	$	—	$	—	$	27,626	$	(4,279)	State, county and municipal securities	$	7,746	$	(254)	$	19,584	$	(4,321)	$	27,330	$	(4,575)

Mortgage-backed securities	Mortgage-backed securities	69,518		(10,231)		—		—		69,518		(10,231)		Mortgage-backed securities	32,750		(1,650)		56,013		(11,857)		88,763		(13,507)
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	$	40,496	$	(1,904)	$	75,597	$	(16,178)	$	116,093	$	(18,082)

December 31, 2021
December 31, 2022														December 31, 2022

State, county and municipal securities	State, county and municipal securities	$	3,707	$	(198)	$	—	$	—	$	3,707	$	(198)	State, county and municipal securities	$	16,512	$	(1,488)	$	10,013	$	(3,892)	$	26,525	$	(5,380)

Mortgage-backed securities	Mortgage-backed securities	69,495		(1,450)		—		—		69,495		(1,450)		Mortgage-backed securities	32,471		(1,925)		55,542		(13,021)		88,013		(14,946)
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	$	48,983	$	(3,413)	$	65,555	$	(16,913)	$	114,538	$	(20,326)

As of ~~June 30, 2022,~~March 31, 2023, the Company’s held-to-maturity security portfolio consisted of 1925 securities, 19all of which were in an unrealized loss position. At ~~June 30, 2022,~~March 31, 2023, the Company held 1319 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 30, 2022 or DecemberAt March 31, ~~2021.~~

~~At June 30, 2022~~2023 and December 31, ~~2021,~~2022, 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 30, 2022,~~March 31, 2023, 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 30, 2022,~~March 31, 2023, management determined that ~~$88,000~~$82,000 was attributable to credit impairment and an allowance for credit losses was recorded. The remaining ~~$16.7~~$45.5 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 March 31,
Allowance for credit losses	Allowance for credit losses	2022		2021		2022		2021		Allowance for credit losses	2023		2022
Beginning balance	Beginning balance	$	—	$	101	$	—	$	112	Beginning balance	$	75	$	—
Provision for expected credit losses		88		(20)		88		(31)
Provision for other credit losses										Provision for other credit losses	7		—
Ending balance	Ending balance	$	88	$	81	$	88	$	81	Ending balance	$	82	$	—

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~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		2022		2021		(dollars in thousands)	2023		2022

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	$	6	$	(27)
Net realized gains on sales of other investments		270		—		270		—

Net gain (loss) on securities	Net gain (loss) on securities	$	248	$	1	$	221	$	(11)	Net gain (loss) on securities	$	6	$	(27)

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)	March 31, 2023		December 31, 2022
Commercial, financial and agricultural	Commercial, financial and agricultural	$	2,022,845	$	1,875,993	Commercial, financial and agricultural	$	2,722,180	$	2,679,403
Consumer installment		167,237		191,298
Consumer						Consumer	349,775		384,037
Indirect automobile	Indirect automobile	172,245		265,779		Indirect automobile	83,466		108,648
Mortgage warehouse	Mortgage warehouse	949,191		787,837		Mortgage warehouse	958,418		1,038,924
Municipal	Municipal	529,268		572,701		Municipal	505,515		509,151
Premium finance	Premium finance	942,357		798,409		Premium finance	947,257		1,023,479
Real estate – construction and development	Real estate – construction and development	1,747,284		1,452,339		Real estate – construction and development	2,144,605		2,086,438
Real estate – commercial and farmland	Real estate – commercial and farmland	7,156,017		6,834,917		Real estate – commercial and farmland	7,721,732		7,604,867
Real estate – residential	Real estate – residential	3,874,578		3,094,985		Real estate – residential	4,564,923		4,420,306
		$	17,561,022	$	15,874,258		$	19,997,871	$	19,855,253

Accrued interest receivable on loans is reported in other assets on the consolidated balance sheets totaling ~~$53.1~~$68.0 million and ~~$54.8~~$69.3 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The Company had no recorded an allowance for credit ~~losses of $0 and $214,000~~ related to ~~deferred~~accrued interest on loans ~~modified under its Disaster Relief Program~~ at ~~June 30, 2022~~both March 31, 2023 and December 31, ~~2021, respectively.~~2022.

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)	March 31, 2023		December 31, 2022
Commercial, financial and agricultural	Commercial, financial and agricultural	$	11,742	$	14,214	Commercial, financial and agricultural	$	11,583	$	11,094
Consumer installment		473		476
Consumer						Consumer	400		420
Indirect automobile	Indirect automobile	465		947		Indirect automobile	285		346

Real estate – construction and development	Real estate – construction and development	178		492		Real estate – construction and development	548		523
Real estate – commercial and farmland	Real estate – commercial and farmland	21,158		15,365		Real estate – commercial and farmland	14,416		13,203
Real estate – residential(1)	Real estate – residential(1)	88,896		53,772		Real estate – residential(1)	115,795		109,222
		$	122,912	$	85,266		$	143,027	$	134,808

(1) Included in real estate - residential were $75.0 million and $69.6 million of serviced GNMA-guaranteed nonaccrual loans at March 31, 2023 and December 31, 2022, respectively.

There was no interest income recognized on nonaccrual loans during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022.

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)	March 31, 2023		December 31, 2022
Commercial, financial and agricultural	Commercial, financial and agricultural	$	—	$	164	Commercial, financial and agricultural	$	1,452	$	33

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	2,510		1,464
Real estate – residential	Real estate – residential	5,071		7,942		Real estate – residential	67,535		58,734
		$	7,519	$	10,376		$	71,497	$	60,231

The following table presents an analysis of past-due loans as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


(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
March 31, 2023																March 31, 2023
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	$	12,302	$	5,307	$	13,381	$	30,990	$	2,691,190	$	2,722,180	$	3,969
Consumer installment		1,132		739		699		2,570		164,667		167,237		466
Consumer																Consumer	5,314		2,835		632		8,781		340,994		349,775		409
Indirect automobile	Indirect automobile	394		137		296		827		171,418		172,245		—		Indirect automobile	190		122		157		469		82,997		83,466
Mortgage warehouse	Mortgage warehouse	—		—		—		—		949,191		949,191		—		Mortgage warehouse	—		—		—		—		958,418		958,418		—
Municipal	Municipal	—		—		—		—		529,268		529,268		—		Municipal	—		—		—		—		505,515		505,515		—
Premium finance	Premium finance	7,462		6,398		5,795		19,655		922,702		942,357		5,795		Premium finance	9,922		6,102		11,414		27,438		919,819		947,257		11,414
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	1,727		—		463		2,190		2,142,415		2,144,605		—
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	6,723		5,801		10,887		23,411		7,698,321		7,721,732		—
Real estate – residential	Real estate – residential	27,385		8,877		86,400		122,662		3,751,916		3,874,578		—		Real estate – residential	33,775		9,199		111,706		154,680		4,410,243		4,564,923		—
Total	Total	$	60,951	$	36,887	$	108,552	$	206,389	$	17,354,633	$	17,561,022	$	8,542	Total	$	69,953	$	29,366	$	148,640	$	247,959	$	19,749,912	$	19,997,871	$	15,792

December 31, 2021
December 31, 2022																December 31, 2022
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	$	16,219	$	5,451	$	11,632	$	33,302	$	2,646,101	$	2,679,403	$	3,267
Consumer installment		1,786		871		891		3,548		187,750		191,298		584
Consumer																Consumer	2,539		3,163		741		6,443		377,594		384,037		472
Indirect automobile	Indirect automobile	772		185		473		1,430		264,349		265,779		—		Indirect automobile	466		77		267		810		107,838		108,648		—
Mortgage warehouse	Mortgage warehouse	—		—		—		—		787,837		787,837		—		Mortgage warehouse	—		—		—		—		1,038,924		1,038,924		—
Municipal	Municipal	—		—		—		—		572,701		572,701		—		Municipal	—		—		—		—		509,151		509,151		—
Premium finance	Premium finance	6,992		4,340		9,134		20,466		777,943		798,409		9,134		Premium finance	13,859		10,620		13,626		38,105		985,374		1,023,479		13,626
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	25,367		3,829		966		30,162		2,056,276		2,086,438		500
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	1,738		168		10,223		12,129		7,592,738		7,604,867		—
Real estate – residential	Real estate – residential	17,729		4,266		49,839		71,834		3,023,151		3,094,985		—		Real estate – residential	35,015		11,329		106,170		152,514		4,267,792		4,420,306		—
Total	Total	$	54,024	$	14,215	$	80,468	$	148,707	$	15,725,551	$	15,874,258	$	12,648	Total	$	95,203	$	34,637	$	143,625	$	273,465	$	19,581,788	$	19,855,253	$	17,865

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.

1311

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					March 31, 2023				December 31, 2022
(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	$	8,451	$	5,740	$	7,128	$	6,294

Mortgage warehouse										Mortgage warehouse	16,500		—		—		—

Premium finance	Premium finance	1,136		91		2,989		30		Premium finance	694		—		3,233		—
Real estate – construction and development	Real estate – construction and development	—		—		1,432		45		Real estate – construction and development	280		23		780		13
Real estate – commercial and farmland	Real estate – commercial and farmland	22,820		2,096		33,332		6,646		Real estate – commercial and farmland	12,554		1,104		15,168		1,428
Real estate – residential	Real estate – residential	14,317		1,580		11,712		453		Real estate – residential	18,683		2,093		15,464		2,066
		$	39,968	$	3,935	$	52,078	$	7,897		$	57,162	$	8,960	$	41,773	$	9,801

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 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. 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 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022.


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

Commercial, Financial and Agricultural
Risk Grade:
Pass	$	334,129	$	988,365	$	485,629	$	154,912	$	95,530	$	84,470	$	556,049		$	2,699,084
6	—		89		67		194		173		2,145		363			3,031
7	5,683		1,736		2,806		1,196		3,576		2,973		2,095			20,065


Total commercial, financial and agricultural	$	339,812	$	990,190	$	488,502	$	156,302	$	99,279	$	89,588	$	558,507		$	2,722,180

Current-period gross charge offs	150		7,226		3,457		597		368		410		25			12,233
Consumer
Risk Grade:
Pass	$	23,767	$	27,439	$	10,479	$	34,256	$	21,350	$	28,171	$	202,965		$	348,427
6	—		25		—		2		—		95		197			319
7	—		83		30		203		152		439		122			1,029


Total consumer	$	23,767	$	27,547	$	10,509	$	34,461	$	21,502	$	28,705	$	203,284		$	349,775

Current-period gross charge offs	—		71		44		416		147		405		57			1,140
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	10,128	$	72,628	$	—		$	82,756
6	—		—		—		—		—		8		—			8
7	—		—		—		—		38		664		—			702


Total indirect automobile	$	—	$	—	$	—	$	—	$	10,166	$	73,300	$	—		$	83,466

Current-period gross charge offs	—		—		—		—		—		34		—			34
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	882,183		$	882,183
6	—		—		—		—		—		—		57,578			57,578
7	—		—		—		—		—		—		18,657			18,657


Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	958,418		$	958,418

Current-period gross charge offs	—		—		—		—		—		—		—			—
Municipal
Risk Grade:
Pass	$	2,544	$	18,003	$	53,717	$	186,274	$	8,749	$	236,228	$	—		$	505,515




Total municipal	$	2,544	$	18,003	$	53,717	$	186,274	$	8,749	$	236,228	$	—		$	505,515

Current-period gross charge offs	—		—		—		—		—		—		—			—
Premium Finance
Risk Grade:
Pass	$	423,901	$	505,791	$	6,145	$	6	$	—	$	—	$	—		$	935,843

7	20		11,336		58		—		—		��		—			11,414


Total premium finance	$	423,921	$	517,127	$	6,203	$	6	$	—	$	—	$	—		$	947,257

Current-period gross charge offs	—		1,154		267		—		—		—		—			1,421


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

Real Estate – Construction and Development
Risk Grade:
Pass	$	81,481	$	900,977	$	757,046	$	263,122	$	67,158	$	37,665	$	24,214		$	2,131,663
6	—		—		—		—		—		632		—			632
7	—		274		285		164		5		11,582		—			12,310


Total real estate – construction and development	$	81,481	$	901,251	$	757,331	$	263,286	$	67,163	$	49,879	$	24,214		$	2,144,605

Current-period gross charge offs	—		—		—		—		—		—		—			—
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	172,639	$	1,812,054	$	1,967,480	$	1,073,741	$	858,980	$	1,649,014	$	95,182		$	7,629,090
6	—		—		—		—		30,335		20,073		—			50,408
7	—		423		2,423		3,056		11,758		24,574		—			42,234


Total real estate – commercial and farmland	$	172,639	$	1,812,477	$	1,969,903	$	1,076,797	$	901,073	$	1,693,661	$	95,182		$	7,721,732

Current-period gross charge offs	—		—		—		—		—		—		—			—
Real Estate - Residential
Risk Grade:
Pass	$	208,784	$	1,498,532	$	1,198,924	$	539,228	$	262,709	$	491,267	$	240,227		$	4,439,671
6	—		235		144		268		745		2,597		378			4,367
7	109		10,186		24,809		28,094		26,597		29,405		1,685			120,885


Total real estate - residential	$	208,893	$	1,508,953	$	1,223,877	$	567,590	$	290,051	$	523,269	$	242,290		$	4,564,923

Current-period gross charge offs	24		—		—		—		—		100		4			128
Total Loans
Risk Grade:
Pass	$	1,247,245	$	5,751,161	$	4,479,420	$	2,251,539	$	1,324,604	$	2,599,443	$	2,000,820		$	19,654,232
6	—		349		211		464		31,253		25,550		58,516			116,343
7	5,812		24,038		30,411		32,713		42,126		69,637		22,559			227,296


Total loans	$	1,253,057	$	5,775,548	$	4,510,042	$	2,284,716	$	1,397,983	$	2,694,630	$	2,081,895		$	19,997,871
Total current-period gross charge offs	174		8,451		3,768		1,013		515		949		86			14,956


As of June 30, 2022		Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
		2022		2021		2020		2019		2018		Prior				Total
As of December 31, 2022																			As of December 31, 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	$	1,127,120	$	526,043	$	174,120	$	109,091	$	56,657	$	41,612	$	621,784		$	2,656,427
6	6	—		151		92		274		160		2,881		794			4,352		6	—		13		94		183		895		1,774		317			3,276
7	7	6,618		1,160		445		3,122		1,400		4,151		2,169			19,065		7	8,565		1,214		1,182		3,314		545		2,759		2,121			19,700

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	$	1,135,685	$	527,270	$	175,396	$	112,588	$	58,097	$	46,145	$	624,222		$	2,679,403
Consumer Installment
Consumer																			Consumer
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	$	41,487	$	12,692	$	37,906	$	23,454	$	17,144	$	13,825	$	236,113		$	382,621
6	6	—		—		—		—		—		130		5			135		6	38		—		—		—		—		98		196			332
7	7	24		81		321		169		89		430		86			1,200		7	68		62		216		106		118		431		83			1,084

Total consumer installment		$	25,944	$	18,234	$	46,455	$	28,923	$	21,619	$	17,167	$	8,895		$	167,237
Total consumer																			Total consumer	$	41,593	$	12,754	$	38,122	$	23,560	$	17,262	$	14,354	$	236,392		$	384,037
Indirect Automobile	Indirect Automobile															Indirect Automobile
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	—	$	—	$	—	$	15,350	$	72,999	$	82,645	$	—		$	170,994	Pass	$	—	$	—	$	—	$	11,900	$	50,749	$	45,120	$	—		$	107,769
6	6	—		—		—		—		—		20		—			20		6	—		—		—		—		—		11		—			11
7	7	—		—		—		50		224		957		—			1,231		7	—		—		—		41		149		678		—			868

Total indirect automobile	Total indirect automobile	$	—	$	—	$	—	$	15,400	$	73,223	$	83,622	$	—		$	172,245	Total indirect automobile	$	—	$	—	$	—	$	11,941	$	50,898	$	45,809	$	—		$	108,648
Mortgage Warehouse	Mortgage Warehouse															Mortgage Warehouse
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	949,191		$	949,191	Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	990,106		$	990,106

6																			6	—		—		—		—		—		—		22,831			22,831
7																			7	—		—		—		—		—		—		25,987			25,987

Total mortgage warehouse	Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	949,191		$	949,191	Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	1,038,924		$	1,038,924
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	$	18,074	$	46,809	$	188,507	$	9,752	$	4,358	$	241,651	$	—		$	509,151

Total municipal	Total municipal	$	10,775	$	43,922	$	194,357	$	13,779	$	4,853	$	261,582	$	—		$	529,268	Total municipal	$	18,074	$	46,809	$	188,507	$	9,752	$	4,358	$	241,651	$	—		$	509,151
Premium Finance	Premium Finance															Premium Finance
Risk Grade:	Risk Grade:																		Risk Grade:
Pass	Pass	$	790,855	$	146,821	$	110	$	—	$	—	$	75	$	—		$	937,861	Pass	$	1,000,214	$	9,667	$	12	$	—	$	—	$	—	$	—		$	1,009,893

7	7	1,766		2,729		1		—		—		—		—			4,496		7	13,051		535		—		—		—		—		—			13,586

Total premium finance	Total premium finance	$	792,621	$	149,550	$	111	$	—	$	—	$	75	$	—		$	942,357	Total premium finance	$	1,013,265	$	10,202	$	12	$	—	$	—	$	—	$	—		$	1,023,479
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	$	834,831	$	793,723	$	306,084	$	69,596	$	7,934	$	31,490	$	27,474		$	2,071,132
6	6	4,330		5,241		432		—		48		580		—			10,631		6	277		—		—		—		173		165		—			615
7	7	216		218		211		26		13,079		259		—			14,009		7	—		783		164		5		13,159		580		—			14,691

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	$	835,108	$	794,506	$	306,248	$	69,601	$	21,266	$	32,235	$	27,474		$	2,086,438

As of June 30, 2022 Term Loans by Origination Year Revolving Loans Amortized Cost Basis
2022 2021 2020 2019 2018 Prior Total
Real Estate – Commercial and Farmland
Risk Grade:
Pass $ 993,793 $ 2,069,024 $ 1,150,513 $ 891,580 $ 496,721 $ 1,373,284 $ 72,965 $ 7,047,880
6 607 — — 29,343 1,163 18,007 — 49,120
7 — 3,259 2,588 13,777 6,967 32,408 18 59,017
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
Real Estate - Residential
Risk Grade:
Pass $ 880,233 $ 1,243,230 $ 582,823 $ 290,790 $ 123,347 $ 438,034 $ 214,894 $ 3,773,351
6 64 218 47 608 508 2,680 61 4,186
7 268 9,398 18,956 29,041 14,331 23,395 1,652 97,041
Total real estate - residential $ 880,565 $ 1,252,846 $ 601,826 $ 320,439 $ 138,186 $ 464,109 $ 216,607 $ 3,874,578
Total Loans
Risk Grade:
Pass $ 3,609,931 $ 5,002,806 $ 2,488,721 $ 1,512,469 $ 817,399 $ 2,262,102 $ 1,603,091 $ 17,296,519
6 5,001 5,610 571 30,225 1,879 24,298 860 68,444
7 8,892 16,845 22,522 46,185 36,090 61,600 3,925 196,059
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

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 months of 2022 and 2021 totaling $214.8 million and $220.8 million, respectively, under such parameters.

As of June 30, 2022 and December 31, 2021, the Company had a balance of $41.8 million and $76.6 million, respectively, in troubled debt restructurings. The Company has recorded $698,000 and $654,000 in previous charge-offs on such loans at June 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 million and $10.5 million at June 30, 2022 and December 31, 2021, respectively. At June 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 months ended June 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,
2022 2021 2022 2021
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
#
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 2 $ 502 2 $ 165 2 $ 502 6 $ 591
Consumer installment — — 2 8 — — 2 8
Premium finance 2 756 — — 6 993 — —
Real estate – commercial and farmland 2 578 3 8,653 2 578 5 16,312
Real estate – residential 2 462 2 472 5 1,437 12 1,457
Total 8 $ 2,298 9 $ 9,298 15 $ 3,510 25 $ 18,368

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 months ended June 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,
2022 2021 2022 2021
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
#
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural — $ — — $ — 1 $ 357 3 $ 49
Consumer installment — — — — 2 3 4 5
Indirect automobile 3 2 7 27 12 22 22 112
Real estate – construction and development — — — — — — 1 1
Real estate – commercial and farmland — — 1 202 1 8 3 5,382
Real estate – residential 11 1,071 17 940 21 2,791 27 1,646
Total 14 $ 1,073 25 $ 1,169 37 $ 3,181 60 $ 7,195

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

June 30, 2022 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)
Commercial, financial and agricultural 9 $ 964 3 $ 364
Consumer installment 4 9 10 14
Indirect automobile 196 759 30 122
Premium finance 6 993 — —
Real estate – construction and development 2 706 — —
Real estate – commercial and farmland 18 8,213 4 788
Real estate – residential 210 24,456 31 4,369
Total 445 $ 36,100 78 $ 5,657

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


As of December 31, 2022	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2022		2021		2020		2019		2018		Prior				Total

Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	1,739,021	$	1,975,003	$	1,085,086	$	869,116	$	447,311	$	1,259,763	$	110,848		$	7,486,148
6	607		17,974		—		30,841		4,801		18,289		—			72,512
7	387		2,810		3,078		12,007		6,527		21,398		—			46,207


Total real estate – commercial and farmland	$	1,740,015	$	1,995,787	$	1,088,164	$	911,964	$	458,639	$	1,299,450	$	110,848		$	7,604,867
Real Estate - Residential
Risk Grade:
Pass	$	1,524,021	$	1,214,724	$	548,968	$	268,821	$	115,693	$	393,570	$	234,684		$	4,300,481
6	236		145		94		688		364		2,910		600			5,037
7	6,735		21,283		25,860		27,173		14,396		17,665		1,676			114,788


Total real estate - residential	$	1,530,992	$	1,236,152	$	574,922	$	296,682	$	130,453	$	414,145	$	236,960		$	4,420,306
Total Loans
Risk Grade:
Pass	$	6,284,768	$	4,578,661	$	2,340,683	$	1,361,730	$	699,846	$	2,027,031	$	2,221,009		$	19,513,728
6	1,158		18,132		188		31,712		6,233		23,247		23,944			104,614
7	28,806		26,687		30,500		42,646		34,894		43,511		29,867			236,911


Total loans	$	6,314,732	$	4,623,480	$	2,371,371	$	1,436,088	$	740,973	$	2,093,789	$	2,274,820		$	19,855,253

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.~~modifications. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.

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

treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of 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~~three months ended ~~June 30, 2022,~~March 31, 2023, the allowance for credit losses increased due to a decline in forecasted macroeconomic factors, particularly residential and commercial real estate price indices and organic loan growth ~~partially offset by improvement in forecasted macroeconomic factors.~~during the period. The allowance for credit losses was determined at ~~June 30, 2022~~March 31, 2023 using a weighting of ~~four~~two economic forecasts from ~~Moody's.~~Moody's in order to align with management's best estimate over the reasonable and supportable forecast period. The Moody's ~~Consensus~~baseline scenario was weighted at ~~20%,~~75% and the ~~downside 75th~~upside 10th percentile ~~S-2~~S-1 scenario was weighted at ~~30%, the downside 90th percentile S-3 scenario was weighted at 20%, and the stagflation scenario was weighted at 30%~~25%. The allowance for

credit losses was determined at December 31, ~~2021~~2022 solely using ~~a weighting of five economic forecasts from Moody's. The~~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%.economic forecast. The current forecast reflects, among other things, ~~improvements~~declines in forecast levels of home prices and commercial real estate prices ~~and unemployment~~ compared with the forecast at December 31, ~~2021.~~2022.

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 March 31, 2023														Three Months Ended March 31, 2023

(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		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2022		$	25,526	$	5,619	$	373	$	3,010	$	384	$	2,515
Balance, December 31, 2022														Balance, December 31, 2022	$	39,455	$	5,413	$	174	$	2,118	$	357	$	1,025
Adjustment to allowance for adoption of ASU 2022-02														Adjustment to allowance for adoption of ASU 2022-02	(105)		—		—		—		—		—

Provision for loan losses	Provision for loan losses	1,738		557		(306)		875		(13)		200		Provision for loan losses	16,078		323		(219)		(194)		(3)		(93)
Loans charged off	Loans charged off	(4,391)		(1,137)		(41)		—		—		(1,066)		Loans charged off	(12,233)		(1,140)		(34)		—		—		(1,421)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	2,785		230		265		—		—		1,113		Recoveries of loans previously charged off	2,043		297		216		—		—		1,382
Balance, June 30, 2022		$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762
Balance, March 31, 2023														Balance, March 31, 2023	$	45,238	$	4,893	$	137	$	1,924	$	354	$	893

		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, December 31, 2022														Balance, December 31, 2022	$	32,659	$	67,433	$	57,043	$	205,677
Adjustment to allowance for adoption of ASU 2022-02														Adjustment to allowance for adoption of ASU 2022-02	(37)		(722)		(847)		(1,711)

Provision for loan losses	Provision for loan losses	(3,954)		(7,647)		21,777		13,227						Provision for loan losses	10,119		20,369		2,996		49,376
Loans charged off	Loans charged off	—		(81)		(137)		(6,853)						Loans charged off	—		—		(128)		(14,956)
Recoveries of loans previously charged off	Recoveries of loans previously charged off	355		44		225		5,017						Recoveries of loans previously charged off	100		44		190		4,272
Balance, June 30, 2022		$	23,232	$	59,349	$	51,825	$	172,642

Six Months Ended June 30, 2022

(dollars in thousands)		Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2021		$	26,829	$	6,097	$	476	$	3,231	$	401	$	2,729
Balance, March 31, 2023														Balance, March 31, 2023	$	42,841	$	87,124	$	59,254	$	242,658

Provision for loan losses		1,953		1,346		(596)		654		(30)		108
Loans charged off		(8,805)		(2,562)		(129)		—		—		(2,435)
Recoveries of loans previously charged off		5,681		388		540		—		—		2,360
Balance, June 30, 2022		$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762

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

Provision for loan losses		614		(17,199)		23,643		10,493
Loans charged off		—		(1,364)		(137)		(15,432)
Recoveries of loans previously charged off		573		81		376		9,999
Balance, June 30, 2022		$	23,232	$	59,349	$	51,825	$	172,642


Three Months Ended March 31, 2022

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


Provision for loan losses	215		789		(290)		(221)		(17)		(92)
Loans charged off	(4,414)		(1,425)		(88)		—		—		(1,369)
Recoveries of loans previously charged off	2,896		158		275		—		—		1,247
Balance, March 31, 2022	$	25,526	$	5,619	$	373	$	3,010	$	384	$	2,515

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


Provision for loan losses	4,568		(9,552)		1,866		(2,734)
Loans charged off	—		(1,283)		—		(8,579)
Recoveries of loans previously charged off	218		37		151		4,982
Balance, March 31, 2022	$	26,831	$	67,033	$	29,960	$	161,251

Modifications to Borrowers Experiencing Financial Difficulty

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

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
The following table shows the amortized cost basis of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:


(dollars in thousands)	Payment Deferral		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	843	$	843	—	%








Total	$	843	$	843	—	%

~~NOTE 4 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE~~

The Company does not have any commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company has modified their loans.

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:


Payment Deferral
Loan Type						Financial Effect
Commercial, financial and agricultural						Payments were reduced approximately 32% for three months before returning to a fully amortizing payment structure thereafter.

The Company ~~classifies~~monitors the ~~sales~~performance of ~~securities under agreements~~the loans that are modified to ~~repurchase as short-term borrowings.~~borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The ~~amounts received under these agreements are reflected as a liability~~following table depicts the performance of loans that have been modified 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.last 12 months:

~~The following is a summary of the Company’s securities sold under agreements to repurchase at June 30, 2022 and December 31, 2021:~~

(dollars in thousands) June 30, 2022 December 31, 2021
Securities sold under agreements to repurchase $ 953 $ 5,845


(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due
Commercial, financial and agricultural	$	843	$	—	$	—	$	—








Total	$	843	$	—	$	—	$	—

2218

~~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)	March 31, 2023		December 31, 2022
FHLB borrowings:	FHLB borrowings:					FHLB borrowings:
Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.150%						Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.150%	$	—	$	300,000
Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.110%						Fixed Rate Advance due January 9, 2023; fixed interest rate of 4.110%	—		50,000
Fixed Rate Advance due January 12, 2023; fixed interest rate of 4.140%						Fixed Rate Advance due January 12, 2023; fixed interest rate of 4.140%	—		50,000
Fixed Rate Advance due January 13, 2023; fixed interest rate of 4.150%						Fixed Rate Advance due January 13, 2023; fixed interest rate of 4.150%	—		50,000
Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.170%						Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.170%	—		350,000
Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.250%						Fixed Rate Advance due January 17, 2023; fixed interest rate of 4.250%	—		150,000
Fixed Rate Advance due January 18, 2023; fixed interest rate of 4.260%						Fixed Rate Advance due January 18, 2023; fixed interest rate of 4.260%	—		200,000
Fixed Rate Advance due January 19, 2023; fixed interest rate of 4.230%						Fixed Rate Advance due January 19, 2023; fixed interest rate of 4.230%	—		50,000
Fixed Rate Advance due January 20, 2023; fixed interest rate of 4.220%						Fixed Rate Advance due January 20, 2023; fixed interest rate of 4.220%	—		150,000
Fixed Rate Advance due January 27, 2023; fixed interest rate of 4.230%						Fixed Rate Advance due January 27, 2023; fixed interest rate of 4.230%	—		100,000
Fixed Rate Advance due April 5, 2023; fixed interest rate of 4.790%						Fixed Rate Advance due April 5, 2023; fixed interest rate of 4.790%	350,000		—
Fixed Rate Advance due April 10, 2023; fixed interest rate of 4.780%						Fixed Rate Advance due April 10, 2023; fixed interest rate of 4.780%	50,000		—
Fixed Rate Advance due April 12, 2023; fixed interest rate of 4.880%						Fixed Rate Advance due April 12, 2023; fixed interest rate of 4.880%	375,000		—
Fixed Rate Advance due April 12, 2023; fixed interest rate of 4.880%						Fixed Rate Advance due April 12, 2023; fixed interest rate of 4.880%	75,000		—
Fixed Rate Advance due April 13, 2023; fixed interest rate of 4.930%						Fixed Rate Advance due April 13, 2023; fixed interest rate of 4.930%	100,000		—
Fixed Rate Advance due April 14, 2023; fixed interest rate of 4.960%						Fixed Rate Advance due April 14, 2023; fixed interest rate of 4.960%	50,000		—
Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.960%						Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.960%	25,000		—
Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.960%						Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.960%	125,000		—
Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.960%						Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.960%	100,000		—
Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.930%						Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.930%	100,000		—
Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.930%						Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.930%	100,000		—
Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.930%						Fixed Rate Advance due April 17, 2023; fixed interest rate of 4.930%	50,000		—
Fixed Rate Advance due April 19, 2023; fixed interest rate of 4.880%						Fixed Rate Advance due April 19, 2023; fixed interest rate of 4.880%	300,000		—
Fixed Rate Advance due April 19, 2023; fixed interest rate of 4.880%						Fixed Rate Advance due April 19, 2023; fixed interest rate of 4.880%	50,000		—
Fixed Rate Advance due April 20, 2023; fixed interest rate of 4.860%						Fixed Rate Advance due April 20, 2023; fixed interest rate of 4.860%	200,000		—
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%	1,386		1,389
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%	959		961
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%	1,239		1,275

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%		—		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
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%		—		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%		—		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%		—		105,403
		$	425,592	$	739,879
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $0 and $551, 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 $0 and $551, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%	—		74,449
Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,618 and $1,680, 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 $1,618 and $1,680, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%	118,382		118,320
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $875 and $906, 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 $875 and $906, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month LIBOR plus 3.63%	75,875		75,906
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,514 and $1,564, 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 $1,514 and $1,564, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%	108,486		108,436

							$	2,401,327	$	1,875,736

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 30, 2022, $4.19~~March 31, 2023, $2.38 billion was available for borrowing on lines with the FHLB.

As of ~~June 30, 2022,~~March 31, 2023, 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 30, 2022,~~March 31, 2023, the Bank had ~~$2.91~~$3.62 billion of loans pledged at the Federal Reserve discount window and had ~~$2.21~~$2.72 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 March 31, 2023						Three Months Ended March 31, 2023
Balance, December 31, 2022						Balance, December 31, 2022	$	(46,507)	$	(46,507)
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	10,926		10,926
Balance, June 30, 2022		$	(12,635)	$	(12,635)
Balance, March 31, 2023						Balance, March 31, 2023	$	(35,581)	$	(35,581)

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

Six Months Ended June 30, 2022
Three Months Ended March 31, 2022						Three Months Ended March 31, 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	(17,431)		(17,431)
Balance, June 30, 2022		$	(12,635)	$	(12,635)
Balance, March 31, 2022						Balance, March 31, 2022	$	(1,841)	$	(1,841)

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

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 March 31,
(share data in thousands)	(share data in thousands)	2022	2021	2022	2021	(share data in thousands)	2023	2022
Average common shares outstanding	Average common shares outstanding	69,136	69,497	69,246	69,448	Average common shares outstanding	69,172	69,346
Common share equivalents:	Common share equivalents:					Common share equivalents:
Stock options	Stock options	16	64	24	74	Stock options	—	31
Nonvested restricted share grants	Nonvested restricted share grants	46	151	97	153	Nonvested restricted share grants	98	167
Performance stock units	Performance stock units	118	80	118	90	Performance stock units	53	117
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	69,323	69,661

For the three months ended ~~June 30, 2022,~~March 31, 2023, there were ~~33,536~~84,487 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~~three months ended ~~June 30, 2022 or for the three- and six-months ended June 30, 2021.~~March 31, 2022.

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)	March 31, 2023		December 31, 2022
Mortgage loans held for sale	Mortgage loans held for sale	$	555,039	$	1,247,997	Mortgage loans held for sale	$	390,201	$	390,583
SBA loans held for sale	SBA loans held for sale	626		6,635		SBA loans held for sale	4,895		1,495
Total loans held for sale	Total loans held for sale	$	555,665	$	1,254,632	Total loans held for sale	$	395,096	$	392,078

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 of ~~$11.2 million and a net loss of $32.7~~$5.6 million resulting from changes in fair value of these mortgage loans was recorded in income during the three ~~and six~~ months ended ~~June 30, 2022, respectively.~~March 31, 2023. For the three ~~and six~~ months ended ~~June 30, 2021, a net gain of $10.0 million and~~March 31, 2022, a net loss of ~~$15.1~~$43.9 million ~~respectively,~~ resulting from changes in fair value of these mortgage loans ~~was~~were recorded in income. A net ~~losses~~loss of ~~$27.1~~$2.9 million ~~and $1.2 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~~ months ended ~~June 30, 2022, respectively.~~March 31, 2023. For the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, a net ~~losses~~gain of ~~$45.1~~$26.0 million ~~and $17.6 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 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	March 31, 2023		December 31, 2022
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	$	390,201	$	390,583
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	383,629		389,610
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	624		—
Nonaccrual loans	Nonaccrual loans	694		746		Nonaccrual loans	624		—
Unpaid principal balance of nonaccrual loans	Unpaid principal balance of nonaccrual loans	712		718		Unpaid principal balance of nonaccrual loans	608		—

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 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	March 31, 2023		December 31, 2022
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	$	4,895	$	1,495
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	4,779		1,350
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 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		Recurring Basis Fair Value Measurements									Recurring Basis Fair Value Measurements
		June 30, 2022									March 31, 2023
(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	$	766,129	$	766,129	$	—	$	—
U.S. government sponsored agencies	U.S. government sponsored agencies	2,021		—		2,021		—		U.S. government sponsored agencies	987		—		987		—
State, county and municipal securities	State, county and municipal securities	40,963		—		40,963		—		State, county and municipal securities	33,213		—		33,213		—
Corporate debt securities	Corporate debt securities	15,463		—		14,143		1,320		Corporate debt securities	15,610		—		14,710		900
SBA pool securities	SBA pool securities	34,431		—		34,431		—		SBA pool securities	25,342		—		25,342		—
Mortgage-backed securities	Mortgage-backed securities	646,501		—		646,501		—		Mortgage-backed securities	655,555		—		655,555		—
Loans held for sale	Loans held for sale	555,665		—		555,665		—		Loans held for sale	395,096		—		395,096		—
Derivative financial instruments										Derivative financial instruments	4,109		—		4,109		—
Mortgage banking derivative instruments	Mortgage banking derivative instruments	10,079		—		10,079		—		Mortgage banking derivative instruments	6,447		—		6,447		—
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	$	1,902,488	$	766,129	$	1,135,459	$	900

Financial liabilities:										Financial liabilities:
Derivative financial instruments										Derivative financial instruments	$	4,429	$	—	$	4,429	$	—
Mortgage banking derivative instruments										Mortgage banking derivative instruments	5,377		—		5,377		—
Total recurring liabilities at fair value										Total recurring liabilities at fair value	$	9,806	$	—	$	9,806	$	—


		Recurring Basis Fair Value Measurements									Recurring Basis Fair Value Measurements
		December 31, 2021									December 31, 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	$	759,534	$	759,534	$	—	$	—
U.S. government sponsored agencies	U.S. government sponsored agencies	$	7,172	$	—	$	7,172	$	—	U.S. government sponsored agencies	979		—		979		—
State, county and municipal securities	State, county and municipal securities	47,812		—		47,812		—		State, county and municipal securities	34,195		—		34,195		—
Corporate debt securities	Corporate debt securities	28,496		—		27,116		1,380		Corporate debt securities	15,926		—		14,771		1,155
SBA pool securities	SBA pool securities	45,201		—		45,201		—		SBA pool securities	27,398		—		27,398		—
Mortgage-backed securities	Mortgage-backed securities	463,940		—		463,940		—		Mortgage-backed securities	662,028		—		662,028		—
Loans held for sale	Loans held for sale	1,254,632		—		1,254,632		—		Loans held for sale	392,078		—		392,078		—
Derivative financial instruments										Derivative financial instruments	4,580		—		4,580		—
Mortgage banking derivative instruments	Mortgage banking derivative instruments	11,940		—		11,940		—		Mortgage banking derivative instruments	3,933		—		3,933		—
Total recurring assets at fair value	Total recurring assets at fair value	$	1,859,193	$	—	$	1,857,813	$	1,380	Total recurring assets at fair value	$	1,900,651	$	759,534	$	1,139,962	$	1,155
Financial liabilities:	Financial liabilities:									Financial liabilities:
Mortgage banking derivative instruments		$	710	$	—	$	710	$	—
Derivative financial instruments										Derivative financial instruments	$	4,574	$	—	$	4,574	$	—

Total recurring liabilities at fair value	Total recurring liabilities at fair value	$	710	$	—	$	710	$	—	Total recurring liabilities at fair value	$	4,574	$	—	$	4,574	$	—

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 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		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
March 31, 2023										March 31, 2023
Collateral-dependent loans	Collateral-dependent loans	$	36,033	$	—	$	—	$	36,033	Collateral-dependent loans	$	48,202	$	—	$	—	$	48,202
Other real estate owned	Other real estate owned	702		—		—		702		Other real estate owned	755		—		—		755
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	$	48,957	$	—	$	—	$	48,957

December 31, 2021
December 31, 2022										December 31, 2022
Collateral-dependent loans	Collateral-dependent loans	$	44,181	$	—	$	—	$	44,181	Collateral-dependent loans	$	31,972	$	—	$	—	$	31,972

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	$	31,972	$	—	$	—	$	31,972

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~~three months ended ~~June 30, 2022~~March 31, 2023 and the year ended December 31, ~~2021,~~2022, 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
March 31, 2023								March 31, 2023
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	$	900	Discounted cash flows		Probability of Default		12.8%		12.8%
					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	$	48,202	Third-party appraisals and discounted cash flows		Collateral discounts and discount rates		0% - 50%		21%
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	$	755	Third-party appraisals and sales contracts		Collateral discounts and estimated costs to sell		25% - 40%		29%
Mortgage servicing rights		$	257,112	Discounted cash flows	Discount rate	10% - 11%	10%
					Prepayment speed	4% - 22%	8%

December 31, 2021

December 31, 2022								December 31, 2022
Recurring:	Recurring:							Recurring:
Debt securities available-for-sale								Debt securities available-for-sale	$	1,155	Discounted cash flows		Probability of Default		12.1%		12.1%
	Debt securities available-for-sale	$	1,380	Discounted par values	Discount Rate	8%	8%					Loss Given Default		41%		41%
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	$	31,972	Third-party appraisals and discounted cash flows		Collateral discounts and discount rates		0% - 48%		27%

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

2723

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											March 31, 2023
(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	$	266,400	$	266,400	$	—	$	—	$	266,400
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	1,754,453		1,754,453		—		—		1,754,453

Debt securities held-to-maturity	Debt securities held-to-maturity	111,654		—		97,144		—		97,144		Debt securities held-to-maturity	134,175		—		116,093		—		116,093

Loans, net	Loans, net	17,352,347		—		—		17,056,635		17,056,635		Loans, net	19,707,011		—		—		19,076,408		19,076,408
Accrued interest receivable	Accrued interest receivable	56,995		—		3,867		53,128		56,995		Accrued interest receivable	74,698		—		6,736		67,962		74,698
Financial liabilities:	Financial liabilities:											Financial liabilities:
Deposits	Deposits	19,684,982		—		19,682,653		—		19,682,653		Deposits	19,897,455		—		19,855,914		—		19,855,914
Securities sold under agreements to repurchase		953		953		—		—		953

Other borrowings	Other borrowings	425,592		—		418,722		—		418,722		Other borrowings	2,401,327		—		2,371,530		—		2,371,530
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	127,325		—		117,240		—		117,240		Subordinated deferrable interest debentures	128,820		—		124,309		—		124,309
Accrued interest payable	Accrued interest payable	2,875		—		2,875		—		2,875		Accrued interest payable	18,005		—		18,005		—		18,005


				Fair Value Measurements											Fair Value Measurements
				December 31, 2021											December 31, 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	$	307,813	$	307,813	$	—	$	—	$	307,813	Cash and due from banks	$	284,567	$	284,567	$	—	$	—	$	284,567
Federal funds sold and interest-bearing accounts	Federal funds sold and interest-bearing accounts	3,756,844		3,756,844		—		—		3,756,844		Federal funds sold and interest-bearing accounts	833,565		833,565		—		—		833,565

Debt securities held-to-maturity	Debt securities held-to-maturity	79,850		—		78,206		—		78,206		Debt securities held-to-maturity	134,864		—		114,538				114,538
Loans, net	Loans, net	15,662,495		—		—		15,509,410		15,509,410		Loans, net	19,617,604		—		—		19,067,612		19,067,612
Accrued interest receivable	Accrued interest receivable	56,917		—		2,373		54,544		56,917		Accrued interest receivable	77,042		—		7,694		69,348		77,042
Financial liabilities:	Financial liabilities:											Financial liabilities:
Deposits	Deposits	19,665,553		—		19,667,612		—		19,667,612		Deposits	19,462,738		—		19,455,187		—		19,455,187
Securities sold under agreements to repurchase		5,845		5,845		—		—		5,845

Other borrowings	Other borrowings	739,879		—		760,829		—		760,829		Other borrowings	1,875,736		—		1,861,850		—		1,861,850
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	126,328		—		117,764		—		117,764		Subordinated deferrable interest debentures	128,322		—		125,988		—		125,988
Accrued interest payable	Accrued interest payable	4,313		—		4,313		—		4,313		Accrued interest payable	10,530		—		10,530		—		10,530

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)	March 31, 2023		December 31, 2022
Commitments to extend credit	Commitments to extend credit	$	5,420,227	$	4,328,749	Commitments to extend credit	$	5,915,387	$	6,318,039
Unused home equity lines of credit	Unused home equity lines of credit	303,428		272,029		Unused home equity lines of credit	364,479		345,001
Financial standby letters of credit	Financial standby letters of credit	30,272		36,184		Financial standby letters of credit	30,926		33,557
Mortgage interest rate lock commitments	Mortgage interest rate lock commitments	320,320		417,126		Mortgage interest rate lock commitments	357,980		148,148

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~~three months ended ~~June 30, 2022~~March 31, 2023 and the year ended December 31, ~~2021.~~2022.

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 March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		2022		2021		(dollars in thousands)	2023		2022
Balance at beginning of period	Balance at beginning of period	$	42,194	$	21,015	$	33,185	$	32,854	Balance at beginning of period	$	52,411	$	33,185

Provision for unfunded commitments	Provision for unfunded commitments	1,779		1,299		10,788		(10,540)		Provision for unfunded commitments	346		9,009
Balance at end of period	Balance at end of period	$	43,973	$	22,314	$	43,973	$	22,314	Balance at end of period	$	52,757	$	42,194

Other Commitments

As of ~~June 30, 2022,~~March 31, 2023, 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~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:


		Three Months Ended June 30, 2022													Three Months Ended March 31, 2023
(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	$	208,215	$	48,589	$	16,614	$	4,375	$	17,923	$	295,716
Interest expense	Interest expense	(10,278)		17,276		1,776		959		1,471		11,204		Interest expense	32,887		28,562		10,914		2,418		9,283		84,064
Net interest income	Net interest income	152,122		20,779		6,700		3,798		7,965		191,364		Net interest income	175,328		20,027		5,700		1,957		8,640		211,652
Provision for credit losses	Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924		Provision for credit losses	47,140		2,853		(194)		(104)		34		49,729
Noninterest income	Noninterest income	23,469		57,795		1,041		1,526		10		83,841		Noninterest income	23,898		31,058		480		605		9		56,050
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	56,442		20,160		802		1,309		2,197		80,910
Occupancy and equipment	Occupancy and equipment	11,168		1,406		1		81		90		12,746		Occupancy and equipment	11,606		1,283		1		37		59		12,986
Data processing and communications expenses	Data processing and communications expenses	10,863		1,123		48		29		92		12,155		Data processing and communications expenses	11,797		1,069		46		37		85		13,034
Other expenses	Other expenses	21,123		12,812		212		539		1,064		35,750		Other expenses	19,023		11,747		202		422		1,097		32,491
Total noninterest expense	Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196		Total noninterest expense	98,868		34,259		1,051		1,805		3,438		139,421
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	53,218		13,973		5,323		861		5,177		78,552
Income tax expense	Income tax expense	19,120		5,779		1,346		815		959		28,019		Income tax expense	12,848		2,934		1,118		181		1,050		18,131
Net income	Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066	Net income	$	40,370	$	11,039	$	4,205	$	680	$	4,127	$	60,421

Total assets	Total assets	$	17,009,855	$	4,418,211	$	923,829	$	264,227	$	1,071,348	$	23,687,470	Total assets	$	18,870,145	$	4,879,135	$	936,169	$	272,844	$	1,130,091	$	26,088,384
Goodwill	Goodwill	958,558		—		—		—		64,498		1,023,056		Goodwill	951,148		—		—		—		64,498		1,015,646
Other intangible assets, net	Other intangible assets, net	105,198		—		—		—		10,415		115,613		Other intangible assets, net	93,285		—		—		—		8,203		101,488


	Three Months Ended March 31, 2022
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	129,290	$	32,832	$	6,813	$	6,780	$	7,659	$	183,374
Interest expense	(4,455)		13,537		366		769		613		10,830
Net interest income	133,745		19,295		6,447		6,011		7,046		172,544
Provision for credit losses	5,226		1,587		(222)		(143)		(217)		6,231
Noninterest income	21,364		61,649		1,401		2,491		6		86,911
Noninterest expense
Salaries and employee benefits	49,195		31,614		283		1,271		1,918		84,281
Occupancy and equipment	11,074		1,471		1		99		82		12,727
Data processing and communications expenses	11,230		1,172		47		28		95		12,572
Other expenses	20,045		12,645		218		380		952		34,240
Total noninterest expense	91,544		46,902		549		1,778		3,047		143,820
Income before income tax expense	58,339		32,455		7,521		6,867		4,222		109,404
Income tax expense	16,996		6,815		1,579		1,442		874		27,706
Net income	$	41,343	$	25,640	$	5,942	$	5,425	$	3,348	$	81,698

Total assets	$	17,409,973	$	4,197,613	$	703,558	$	313,219	$	935,929	$	23,560,292
Goodwill	957,847		—		—		—		64,498		1,022,345
Other intangible assets, net	109,604		—		—		—		11,153		120,757

3026

Three Months Ended
June 30, 2021
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 109,260 $ 34,085 $ 8,988 $ 14,050 $ 7,368 $ 173,751
Interest expense (1,410) 11,552 268 1,168 321 11,899
Net interest income 110,670 22,533 8,720 12,882 7,047 161,852
Provision for credit losses (3,949) 5,647 (155) (607) (794) 142
Noninterest income 16,171 69,055 1,333 2,677 4 89,240
Noninterest expense
Salaries and employee benefits 37,814 44,798 278 937 1,678 85,505
Occupancy and equipment 9,050 1,553 1 132 76 10,812
Data processing and communications expenses 10,280 1,435 68 — 94 11,877
Other expenses 18,763 7,638 30 284 852 27,567
Total noninterest expense 75,907 55,424 377 1,353 2,700 135,761
Income before income tax expense 54,883 30,517 9,831 14,813 5,145 115,189
Income tax expense 14,196 6,408 2,064 3,111 1,083 26,862
Net income $ 40,687 $ 24,109 $ 7,767 $ 11,702 $ 4,062 $ 88,327
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
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 221,639 $ 64,284 $ 19,315 $ 32,084 $ 14,379 $ 351,701
Interest expense (1,847) 22,767 689 2,567 696 24,872
Net interest income 223,486 41,517 18,626 29,517 13,683 326,829
Provision for credit losses (27,853) 1,094 (300) (1,154) (236) (28,449)
Noninterest income 32,909 166,695 2,313 5,288 8 207,213
Noninterest expense
Salaries and employee benefits 80,537 94,636 608 2,319 3,390 181,490
Occupancy and equipment 19,170 3,029 2 238 154 22,593
Data processing and communications expenses 20,481 2,981 117 1 181 23,761
Other expenses 38,473 15,827 63 579 1,773 56,715
Total noninterest expense 158,661 116,473 790 3,137 5,498 284,559
Income before income tax expense 125,587 90,645 20,449 32,822 8,429 277,932
Income tax expense 32,652 19,035 4,294 6,893 1,769 64,643
Net income $ 92,935 $ 71,610 $ 16,155 $ 25,929 $ 6,660 $ 213,289

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 servicing portfolios of residential mortgage and SBA ~~and indirect automobile loans serviced for others.~~loans. Loan servicing rights are initially recorded at fair value and subsequently recorded at the lower of cost or fair value and are amortized over the remaining service life of the loans, with consideration given to prepayment assumptions. Loan servicing rights are recorded in other assets on the consolidated balance sheets.

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	March 31, 2023		December 31, 2022
Loan Servicing Rights	Loan Servicing Rights					Loan Servicing Rights
Residential mortgage	Residential mortgage	$	257,112	$	206,944	Residential mortgage	$	149,986	$	147,014
SBA	SBA	4,954		5,556		SBA	3,166		3,443

Total loan servicing rights	Total loan servicing rights	$	262,066	$	212,500	Total loan servicing rights	$	153,152	$	150,457

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~~three-months ended ~~June 30,~~March 31, 2023, the Company recorded servicing fee income of $14.0 million. During the three-months ended March 31, 2022, the Company recorded servicing fee income of ~~$18.7 million and $35.8 million, respectively. During the three- and six-months ended June 30, 2021, the Company recorded servicing fee income of $11.3 million and $21.5 million, respectively.~~$17.1 million. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

The table below is an analysis of the activity in the Company’s 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 March 31,
Residential mortgage servicing rights	Residential mortgage servicing rights	2022		2021		2022		2021		Residential mortgage servicing rights	2023		2022
Beginning carrying value, net	Beginning carrying value, net	$	232,236	$	154,746	$	206,944	$	130,630	Beginning carrying value, net	$	147,014	$	206,944
Additions	Additions	21,551		43,377		43,252		65,244		Additions	7,730		21,701

Amortization	Amortization	(7,514)		(7,197)		(13,576)		(14,681)		Amortization	(4,758)		(6,062)
Recoveries	Recoveries	10,839		749		20,492		10,482		Recoveries	—		9,653

Ending carrying value, net	Ending carrying value, net	$	257,112	$	191,675	$	257,112	$	191,675	Ending carrying value, net	$	149,986	$	232,236


(dollars in thousands)	(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,				(dollars in thousands)	Three Months Ended March 31,
Residential mortgage servicing valuation allowance	Residential mortgage servicing valuation allowance	2022		2021		2022		2021		Residential mortgage servicing valuation allowance	2023		2022
Beginning balance	Beginning balance	$	16,129	$	29,674	$	25,782	$	39,407	Beginning balance	$	—	$	25,782

Recoveries	Recoveries	(10,839)		(749)		(20,492)		(10,482)		Recoveries	—		(9,653)

Ending balance	Ending balance	$	5,290	$	28,925	$	5,290	$	28,925	Ending balance	$	—	$	16,129

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)	March 31, 2023			December 31, 2022
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	$	10,581,669		$	10,046,052
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	16.82		%	16.80		%
FNMA	FNMA	60.49		%	60.26		%	FNMA	50.19		%	50.09		%
GNMA	GNMA	17.73		%	17.86		%	GNMA	32.99		%	33.11		%
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)	354			353
Weighted average age (months)	Weighted average age (months)	22			20			Weighted average age (months)	24			22
Modeled prepayment speed	Modeled prepayment speed	8.11		%	12.96		%	Modeled prepayment speed	8.55		%	8.22		%
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	(3,940)			(5,800)
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	(8,283)			(11,184)
Weighted average discount rate	Weighted average discount rate	9.77		%	8.77		%	Weighted average discount rate	10.73		%	10.00		%
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	(4,840)			(6,413)
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	(10,361)			(12,330)

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

SBA Loans

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

During the ~~three- and six-months~~three-months ended ~~June 30,~~March 31, 2023, the Company recorded servicing fee income of $752,000. During the three-months ended March 31, 2022, the Company recorded servicing fee income of ~~$1.0 million and $1.9 million, respectively. During the three- and six-months ended June 30, 2021, the Company recorded servicing fee income of $1.0 million and $2.0 million, respectively.~~$876,000. 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 March 31,
SBA servicing rights	SBA servicing rights	2022		2021		2022		2021		SBA servicing rights	2023		2022
Beginning carrying value, net	Beginning carrying value, net	$	5,384	$	6,445	$	5,556	$	5,839	Beginning carrying value, net	$	3,443	$	5,556
Additions	Additions	236		241		774		471		Additions	44		538

Amortization	Amortization	(666)		(563)		(1,376)		(1,092)		Amortization	(321)		(710)
Recoveries		—		—		—		905

Ending carrying value, net	Ending carrying value, net	$	4,954	$	6,123	$	4,954	$	6,123	Ending carrying value, net	$	3,166	$	5,384

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


(dollars in thousands)	(dollars in thousands)	June 30, 2022			December 31, 2021			(dollars in thousands)	March 31, 2023			December 31, 2022
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	$	311,532		$	326,418
Weighted average life (in years)	Weighted average life (in years)	3.64			3.65			Weighted average life (in years)	3.69			3.69
Modeled prepayment speed	Modeled prepayment speed	17.81		%	17.68		%	Modeled prepayment speed	18.37		%	18.24		%
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	(187)			(177)
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	(359)			(340)
Weighted average discount rate	Weighted average discount rate	16.55		%	11.92		%	Weighted average discount rate	15.98		%	19.57		%
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	(88)			(83)
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	(173)			(163)

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) Three Months Ended June 30, Six Months Ended June 30,
Indirect automobile servicing rights 2022 2021 2022 2021
Beginning carrying value, net $ — $ 29 $ — $ 73
Amortization — (29) — (73)
Ending carrying value, net $ — $ — $ — $ —

During the three- and six-months ended June 30, 2022, the Company recorded servicing fee income of $65,000 and $148,000, respectively. During the three- and six-months ended June 30, 2021, the Company recorded servicing fee income of $170,000 and $376,000, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

3529

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~~investment security valuation 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;~~other performance measures; 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 30, 2022,~~March 31, 2023, as compared with December 31, ~~2021,~~2022, and operating results for the ~~three- and six-month~~three-month periods ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022. 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.

3630

Critical Accounting Policies

There have been no significant changes to our critical accounting policies from those disclosed in our ~~2021~~2022 Annual Report on Form 10-K. The reader should refer to the notes to our consolidated financial statements in our ~~2021~~2022 Annual Report on Form 10-K for a full disclosure of all critical accounting policies.

Results of Operations for the Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of ~~$90.1~~$60.4 million, or ~~$1.30~~$0.87 per diluted share, for the quarter ended ~~June 30, 2022,~~March 31, 2023, compared with ~~$88.3~~$81.7 million, or ~~$1.27~~$1.17 per diluted share, for the same period in ~~2021.~~2022. The Company’s return on average assets and average shareholders’ equity were ~~1.54%~~0.98% and ~~11.87%~~7.54%, respectively, in the ~~second~~first quarter of ~~2022,~~2023, compared with ~~1.64%~~1.42% and ~~12.66%~~11.06%, respectively, in the ~~second~~first quarter of ~~2021.~~2022. During the ~~second~~first quarter of 2023, the Company recorded pre-tax gain on bank owned life insurance (BOLI) proceeds of $486,000. During the first quarter of 2022, the Company recorded pre-tax ~~servicing right impairment recovery~~merger and conversion charges of ~~$10.8 million and pre-tax gains on bank premises of $39,000. During the second quarter of 2021, the Company recorded~~$977,000, pre-tax servicing right impairment recovery of ~~$749,000~~$9.7 million and pre-tax ~~gains~~gain on bank premises of ~~$236,000.~~$6,000. Excluding these adjustment items, the Company’s net income would have been ~~$81.5~~$59.9 million, or ~~$1.18~~$0.86 per diluted share, for the ~~second~~first quarter of ~~2022~~2023 and ~~$87.5~~$75.0 million, or ~~$1.25~~$1.08 per diluted share, for the ~~second~~first quarter of ~~2021.~~2022.

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


		Three Months Ended June 30,					Three Months Ended March 31,
(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)	2023		2022
Net income	Net income	$	90,066	$	88,327	Net income	$	60,421	$	81,698
Adjustment items:	Adjustment items:					Adjustment items:
Merger and conversion charges						Merger and conversion charges	—		977

Servicing right recovery		(10,838)		(749)

Servicing right impairment (recovery)						Servicing right impairment (recovery)	—		(9,654)
Gain on BOLI proceeds						Gain on BOLI proceeds	(486)		—

Gain on bank premises	Gain on bank premises	(39)		(236)		Gain on bank premises	—		(6)
Tax effect of adjustment items (Note 1)	Tax effect of adjustment items (Note 1)	2,284		206		Tax effect of adjustment items (Note 1)	—		2,024
After tax adjustment items	After tax adjustment items	(8,593)		(779)		After tax adjustment items	(486)		(6,659)
Adjusted net income	Adjusted net income	$	81,473	$	87,548	Adjusted net income	$	59,935	$	75,039

Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted	69,316,258		69,791,670		Weighted average common shares outstanding - diluted	69,322,664		69,660,990
Net income per diluted share	Net income per diluted share	$	1.30	$	1.27	Net income per diluted share	$	0.87	$	1.17
Adjusted net income per diluted share	Adjusted net income per diluted share	$	1.18	$	1.25	Adjusted net income per diluted share	$	0.86	$	1.08

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 March 31, 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 three months ended March 31, 2022 is nondeductible for tax purposes.

3731

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~~first quarter of ~~2022~~2023 and ~~2021,~~2022, respectively:


		Three Months Ended June 30, 2022													Three Months Ended March 31, 2023
(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	$	208,215	$	48,589	$	16,614	$	4,375	$	17,923	$	295,716
Interest expense	Interest expense	(10,278)		17,276		1,776		959		1,471		11,204		Interest expense	32,887		28,562		10,914		2,418		9,283		84,064
Net interest income	Net interest income	152,122		20,779		6,700		3,798		7,965		191,364		Net interest income	175,328		20,027		5,700		1,957		8,640		211,652
Provision for credit losses	Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924		Provision for credit losses	47,140		2,853		(194)		(104)		34		49,729
Noninterest income	Noninterest income	23,469		57,795		1,041		1,526		10		83,841		Noninterest income	23,898		31,058		480		605		9		56,050
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	56,442		20,160		802		1,309		2,197		80,910
Occupancy and equipment	Occupancy and equipment	11,168		1,406		1		81		90		12,746		Occupancy and equipment	11,606		1,283		1		37		59		12,986
Data processing and communications expenses	Data processing and communications expenses	10,863		1,123		48		29		92		12,155		Data processing and communications expenses	11,797		1,069		46		37		85		13,034
Other expenses	Other expenses	21,123		12,812		212		539		1,064		35,750		Other expenses	19,023		11,747		202		422		1,097		32,491
Total noninterest expense	Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196		Total noninterest expense	98,868		34,259		1,051		1,805		3,438		139,421
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	53,218		13,973		5,323		861		5,177		78,552
Income tax expense	Income tax expense	19,120		5,779		1,346		815		959		28,019		Income tax expense	12,848		2,934		1,118		181		1,050		18,131
Net income	Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066	Net income	$	40,370	$	11,039	$	4,205	$	680	$	4,127	$	60,421


		Three Months Ended June 30, 2021													Three Months Ended March 31, 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	$	129,290	$	32,832	$	6,813	$	6,780	$	7,659	$	183,374
Interest expense	Interest expense	(1,410)		11,552		268		1,168		321		11,899		Interest expense	(4,455)		13,537		366		769		613		10,830
Net interest income	Net interest income	110,670		22,533		8,720		12,882		7,047		161,852		Net interest income	133,745		19,295		6,447		6,011		7,046		172,544
Provision for credit losses	Provision for credit losses	(3,949)		5,647		(155)		(607)		(794)		142		Provision for credit losses	5,226		1,587		(222)		(143)		(217)		6,231
Noninterest income	Noninterest income	16,171		69,055		1,333		2,677		4		89,240		Noninterest income	21,364		61,649		1,401		2,491		6		86,911
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	49,195		31,614		283		1,271		1,918		84,281
Occupancy and equipment	Occupancy and equipment	9,050		1,553		1		132		76		10,812		Occupancy and equipment	11,074		1,471		1		99		82		12,727
Data processing and communications expenses	Data processing and communications expenses	10,280		1,435		68		—		94		11,877		Data processing and communications expenses	11,230		1,172		47		28		95		12,572
Other expenses	Other expenses	18,763		7,638		30		284		852		27,567		Other expenses	20,045		12,645		218		380		952		34,240
Total noninterest expense	Total noninterest expense	75,907		55,424		377		1,353		2,700		135,761		Total noninterest expense	91,544		46,902		549		1,778		3,047		143,820
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	58,339		32,455		7,521		6,867		4,222		109,404
Income tax expense	Income tax expense	14,196		6,408		2,064		3,111		1,083		26,862		Income tax expense	16,996		6,815		1,579		1,442		874		27,706
Net income	Net income	$	40,687	$	24,109	$	7,767	$	11,702	$	4,062	$	88,327	Net income	$	41,343	$	25,640	$	5,942	$	5,425	$	3,348	$	81,698

3832

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 30, 2022~~March 31, 2023 and ~~2021.~~2022. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.


		Quarter Ended June 30,											Quarter Ended March 31,
		2022					2021						2023					2022
(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	$	859,614	$	9,113	4.30%	$	3,413,238	$	1,383	0.16%
Investment securities	Investment securities	1,021,610		7,405		2.91%	857,079		5,420		2.54%	Investment securities	1,760,500		14,729		3.39%	700,975		4,474		2.59%
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	490,295		7,007		5.80%	1,097,098		8,132		3.01%
Loans	Loans	16,861,674		181,602		4.32%	14,549,104		157,112		4.33%	Loans	19,820,749		265,802		5.44%	15,821,397		170,398		4.37%
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	22,931,158		296,651		5.25%	21,032,708		184,387		3.56%
Noninterest-earning assets	Noninterest-earning assets	2,349,500					1,946,208					Noninterest-earning assets	2,184,769					2,242,946
Total assets	Total assets	$	23,405,201				$	21,538,894				Total assets	$	25,115,927				$	23,275,654

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	$	10,145,800	$	44,130	1.76%	$	9,899,418	$	2,600	0.11%
Time deposits	Time deposits	1,693,740		1,318		0.31%	2,006,265		2,929		0.59%	Time deposits	1,737,458		9,052		2.11%	1,774,016		1,492		0.34%
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	—		—		—%	4,020		3		0.30%
FHLB advances	FHLB advances	48,746		192		1.58%	48,910		193		1.58%	FHLB advances	1,968,811		22,448		4.62%	48,786		190		1.58%
Other borrowings	Other borrowings	376,829		4,437		4.72%	376,376		4,683		4.99%	Other borrowings	361,445		5,349		6.00%	443,657		5,164		4.72%
Subordinated deferrable interest debentures	Subordinated deferrable interest debentures	127,063		1,666		5.26%	125,068		1,243		3.99%	Subordinated deferrable interest debentures	128,557		3,085		9.73%	126,563		1,381		4.43%
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	14,342,071		84,064		2.38%	12,296,460		10,830		0.36%
Demand deposits	Demand deposits	7,955,765					6,874,471					Demand deposits	7,136,373					7,658,451
Other liabilities	Other liabilities	367,895					238,931					Other liabilities	387,194					326,091
Shareholders’ equity	Shareholders’ equity	3,043,280					2,798,269					Shareholders’ equity	3,250,289					2,994,652
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	23,405,201				$	21,538,894				Total liabilities and shareholders’ equity	$	25,115,927				$	23,275,654
Interest rate spread	Interest rate spread					3.51%					3.17%	Interest rate spread					2.87%					3.20%
Net interest income	Net interest income			$	192,334				$	163,013		Net interest income			$	212,587				$	173,557
Net interest margin	Net interest margin					3.66%					3.34%	Net interest margin					3.76%					3.35%

On a tax-equivalent basis, net interest income for the ~~second~~first quarter of ~~2022~~2023 was ~~$192.3~~$212.6 million, an increase of ~~$29.3~~$39.0 million, or ~~18.0%~~22.5%, compared with ~~$163.0~~$173.6 million reported in the same quarter in ~~2021.~~2022. The higher net interest income is primarily a result of growth in investment securities and loans, ~~complemented~~partially offset by ~~disciplined deposit repricing.~~increased cost of funds as market interest rates have risen. Average interest earning assets increased ~~$1.46~~$1.90 billion, or ~~7.5%~~9.0%, from ~~$19.59~~$21.03 billion in the ~~second~~first quarter of ~~2021~~2022 to ~~$21.06~~$22.93 billion for the ~~second~~first quarter of ~~2022.~~2023. This growth in ~~interest earning~~interest-earning assets resulted primarily from organic loan growth ~~loans acquired from Balboa Capital~~ and securities purchases, partially offset by a decline in excess liquidity ~~from deposit growth.~~as average deposits declined approximately 1.6%. The Company’s net interest margin during the ~~second~~first quarter of ~~2022~~2023 was ~~3.66%~~3.76%, up 3241 basis points from ~~3.34%~~3.35% reported in the ~~second~~first quarter of ~~2021.~~2022. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to ~~$5.3~~$3.4 billion during the ~~second~~first quarter of ~~2022,~~2023, with weighted average yields of ~~4.29%~~6.57%, compared with ~~$6.4~~$4.7 billion and ~~3.36%~~3.63%, respectively, during the ~~second~~first quarter of ~~2021.~~2022. Loan production in the banking division amounted to ~~$1.1 billion~~$563.0 million during the ~~second~~first quarter of ~~2022,~~2023, with weighted average yields of ~~5.24%~~8.72%, compared with ~~$911.3~~$805.5 million and ~~3.75%~~5.17%, respectively, during the ~~second~~first quarter of ~~2021.~~2022.

Total interest income, on a tax-equivalent basis, increased to ~~$203.5~~$296.7 million during the ~~second~~first quarter of ~~2022,~~2023, compared with ~~$174.9~~$184.4 million in the same quarter of ~~2021.~~2022. Yields on earning assets increased to ~~3.88%~~5.25% during the ~~second~~first quarter of ~~2022,~~2023, compared with ~~3.58%~~3.56% reported in the ~~second~~first quarter of ~~2021.~~2022. During the ~~second~~first quarter of ~~2022,~~2023, loans comprised ~~84.6%~~88.6% of average earning assets, compared with ~~83.0%~~80.4% in the same quarter of ~~2021.~~2022. Yields on loans ~~decreased~~increased to ~~4.32%~~5.44% in the ~~second~~first quarter of ~~2022,~~2023, compared with ~~4.33%~~4.37% in the same period of ~~2021.~~2022. Accretion income for the ~~second~~first quarter of ~~2022~~2023 was ~~negative $379,000,~~$420,000, compared with ~~$4.5~~$1.0 million in the ~~second~~first quarter of ~~2021.~~

2022.

3933

The yield on total interest-bearing liabilities ~~decreased~~increased from ~~0.41%~~0.36% in the ~~second~~first quarter of ~~2021~~2022 to ~~0.37%~~2.38% in the ~~second~~first quarter of ~~2022.~~2023. Total funding costs, inclusive of noninterest-bearing demand deposits, ~~decreased~~increased to ~~0.22%~~1.59% in the ~~second~~first quarter of 2023, compared with 0.22% during the first quarter of 2022. Deposit costs increased from 0.09% in the first quarter of 2022 ~~compared with 0.26% during~~to 1.13% in the ~~second~~first quarter of ~~2021. Deposit costs decreased from 0.13% in the second quarter of 2021 to 0.10% in the second quarter of 2022.~~2023. Non-deposit funding costs increased from ~~4.41%~~4.39% in the ~~second~~first quarter of ~~2021~~2022 to ~~4.55%~~5.09% in the ~~second~~first quarter of ~~2022.~~2023. Average balances of ~~interest bearing~~interest-bearing deposits and their respective costs for the ~~second~~first quarter of ~~2022~~2023 and ~~2021~~2022 are shown below:


		Three Months Ended June 30, 2022			Three Months Ended June 30, 2021				Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
(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	$	4,145,991	1.47%	$	3,684,772	0.09%
MMDA	MMDA	5,087,199		0.17%	4,872,500		0.16%	MMDA	4,994,195		2.26%	5,240,922		0.13%
Savings	Savings	1,007,340		0.06%	876,887		0.06%	Savings	1,005,614		0.52%	973,724		0.06%
Retail CDs	Retail CDs	1,693,740		0.31%	2,005,265		0.58%	Retail CDs	1,612,325		1.92%	1,774,016		0.34%
Brokered CDs	Brokered CDs	—		—%	1,000		3.21%	Brokered CDs	125,133		4.61%	—		—%
Interest-bearing deposits	Interest-bearing deposits	$	11,483,769	0.17%	$	11,069,986	0.21%	Interest-bearing deposits	$	11,883,258	1.82%	$	11,673,434	0.14%

Provision for Credit Losses

The Company’s provision for credit losses during the ~~second~~first quarter of ~~2022~~2023 amounted to ~~$14.9~~$49.7 million, compared with ~~a provision of $142,000~~$6.2 million in the ~~second~~first quarter of ~~2021.~~2022. This increase was attributable to the updated economic forecast and organic growth in loans during the quarter. The provision for credit losses for the ~~second~~first quarter of ~~2022~~2023 was comprised of ~~$13.2~~$49.4 million related to loans, ~~$1.8 million~~$346,000 related to unfunded commitments and ~~negative $82,000~~$7,000 related to other credit losses, compared with negative ~~$899,000~~$2.7 million related to loans, ~~$1.3~~$9.0 million related to unfunded commitments and negative ~~$258,000~~$44,000 related to other credit losses for the ~~second~~first quarter of ~~2021.~~2022. Non-performing assets as a percentage of total assets ~~increased from 0.43%~~was stable at 0.61% at December 31, ~~2021 to 0.56% at June 30, 2022.~~2022 and March 31, 2023. 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 million.~~repurchase. The Company recognized net charge-offs on loans during the ~~second~~first quarter of ~~2022~~2023 of approximately ~~$1.8~~$10.7 million, or ~~0.04%~~0.22% of average loans on an annualized basis, compared with net charge-offs of approximately ~~$2.6~~$3.6 million, or ~~0.07%~~0.09%, in the ~~second~~first quarter of ~~2021.~~2022. The Company’s total allowance for credit losses on loans at ~~June 30, 2022~~March 31, 2023 was ~~$172.6~~$242.7 million, or ~~0.98%~~1.21% of total loans, compared with ~~$167.6~~$205.7 million, or ~~1.06%~~1.04% of total loans, at December 31, ~~2021.~~2022. This increase is primarily attributable to ~~organic growth in loans, partially offset by improvement in~~updated forecast economic conditions.

Noninterest Income

Total noninterest income for the ~~second~~first quarter of ~~2022~~2023 was ~~$83.8~~$56.1 million, a decrease of ~~$5.4~~$30.9 million, or ~~6.0%~~35.5%, from the ~~$89.2~~$86.9 million reported in the ~~second~~first quarter of ~~2021.~~2022. Income from mortgage banking activities was ~~$58.8~~$31.4 million in the ~~second~~first quarter of ~~2022,~~2023, a decrease of ~~$11.5~~$31.5 million, or ~~16.3%~~50.1%, from ~~$70.2~~$62.9 million in the ~~second~~first quarter of ~~2021.~~2022. Total production in the ~~second~~first quarter of ~~2022~~2023 amounted to ~~$1.73 billion,~~$946.4 million, compared with ~~$2.39~~$1.53 billion in the same quarter of ~~2021,~~2022, while spread (gain on sale) decreased to ~~2.36%~~1.96% in the current quarter, compared with ~~2.77%~~2.94% in the same quarter of ~~2021.~~2022. The retail mortgage open pipeline finished the ~~second~~first quarter of ~~2022~~2023 at ~~$832.3~~$725.9 million, compared with ~~$1.41 billion~~$507.1 million at ~~March~~December 31, 2022 and ~~$1.75~~$1.41 billion at the end of the ~~second~~first quarter of ~~2021.~~2022. Service charges on deposit accounts ~~increased $141,000,~~decreased $122,000, or ~~1.3%~~1.1%, to $10.9 million in the first quarter of 2023, compared with $11.1 million in the ~~second~~first quarter of ~~2022, compared with $11.0 million in the second quarter of 2021. This increase in service charges on deposit accounts is due primarily to an increase in volume, particularly in business accounts.~~2022.

Other noninterest income increased ~~$5.7 million,~~$742,000, or ~~82.7%~~6.2%, to $12.7 million for the ~~second~~first quarter of ~~2022,~~2023, compared with ~~$6.9~~$12.0 million during the ~~second~~first quarter of ~~2021.~~2022. The increase in other noninterest income was primarily attributable to increased fee income from ~~Balboa of $5.3 million~~equipment finance, derivative fee income and ~~an increase in~~ BOLI income of ~~$614,000,~~$1.5 million, $1.2 million and $918,000, respectively, partially offset by a ~~decrease~~decline in ~~gains~~gain on ~~sales~~sale of SBA loans of ~~$1.1~~$2.1 million.

Noninterest Expense

Total noninterest expense for the ~~second~~first quarter of ~~2022 increased $6.4~~2023 decreased $4.4 million, or ~~4.7%~~3.1%, to ~~$142.2~~$139.4 million, compared with ~~$135.8~~$143.8 million in the same quarter ~~2021.~~2022. Salaries and employee benefits decreased ~~$4.0~~$3.4 million, or ~~4.6%~~4.0%, from ~~$85.5~~$84.3 million in the ~~second~~first quarter of ~~2021~~2022 to ~~$81.5~~$80.9 million in the ~~second~~first quarter of ~~2022,~~2023, due primarily to decreases in variable compensation tied to mortgage production of ~~$11.4~~$7.5 million, and stock based compensation of $698,000, partially offset by ~~salaries and employee benefits related to Balboa~~a decline in deferred origination costs of ~~$10.9~~$3.9 million. Occupancy and equipment expenses increased ~~$1.9 million,~~$259,000, or ~~17.9%~~2.0%, to ~~$12.7~~$13.0 million for the ~~second~~first quarter of ~~2022,~~2023, compared with $12.7 million in the first quarter of 2022. Data processing and communications expenses increased $462,000, or 3.7%, to $13.0 million in the first quarter of 2023, compared with $12.6 million in the first quarter of

4034

compared with $10.8 million in the second 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, or 2.3%, to $12.2 million in the second quarter of 2022, compared with $11.9 million in the second quarter of 2021.2022. Advertising and marketing expense was ~~$3.1~~$3.5 million in the ~~second~~first quarter of ~~2022,~~2023, compared with ~~$1.9~~$2.0 million in the second quarter of 2021. This increase was primarily related to a new marketing campaign. Amortization of intangible assets increased $1.1 million, or 26.5%, from $4.1 million in the second quarter of 2021 to $5.1 million in the secondfirst quarter of 2022. This increase was primarily related to ~~intangibles~~a marketing campaign begun in the second quarter of 2022. Amortization of intangible assets decreased $475,000, or 9.2%, from $5.2 million in the ~~acquisition~~first quarter of ~~Balboa Capital Corporation~~2022 to $4.7 million in ~~December 2021, partially offset by~~the first quarter of 2023. This decrease was primarily related to a reduction in core deposit intangible amortization. Loan servicing expenses ~~increased $5.0 million,~~decreased $588,000, or ~~101.9%~~6.6%, from ~~$4.9~~$8.9 million in the ~~second~~first quarter of ~~2021~~2022 to ~~$9.9~~$8.3 million in the ~~second~~first quarter of 2023, primarily attributable to the sale of a portion of our mortgage servicing portfolio during the third quarter of 2022, ~~primarily attributable to~~partially offset by additional mortgage loans serviced ~~resulting~~added from ~~strong~~ mortgage production over the previous year. Other noninterest expenses ~~increased $1.0~~decreased $2.7 million, or ~~6.5%~~14.6%, from ~~$16.0~~$18.1 million in the ~~second~~first quarter of ~~2021~~2022 to ~~$17.1~~$15.5 million in the ~~second~~first quarter of ~~2022,~~2023, due primarily to ~~an increase~~decreases of ~~$1.2~~$795,000 in fraud and forgery losses, $561,000 in other losses and $2.2 million in ~~legal fees~~tax and ~~an increase in insurance expense to the Federal Deposit Insurance Corporation (the "FDIC") of $385,000.~~license expenses. 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.~~legal and professional fees of $1.1 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~~first quarter of ~~2022,~~2023, the Company reported income tax expense of ~~$28.0~~$18.1 million, compared with ~~$26.9~~$27.7 million in the same period of ~~2021.~~2022. The Company’s effective tax rate for the three months ending ~~June 30,~~March 31, 2023 and 2022 was 23.1% and ~~2021 was 23.7% and 23.3%~~25.3%, respectively. The ~~increase in the effective tax rate is primarily a result of increased state taxes in the second quarter of 2022 resulting from shifts in apportionment related to the Balboa Capital acquisition.~~

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

~~Consolidated Earnings and Profitability~~

Ameris reported net income available to common shareholders of $171.8 million, or $2.47 per diluted share, for the six months ended June 30, 2022, compared with $213.3 million, or $3.06 per diluted share, for the same period in 2021. The Company’s return on average assets and average shareholders’ equity were 1.48% and 11.47%, respectively, in the six months ended June 30, 2022, compared with 2.03% and 15.66%, respectively, in the same period in 2021. During the first six months of 2022, the Company recorded pre-tax merger and conversion charges of $977,000, pre-tax servicing right recovery of $20.5 million and pre-tax gain on bank premises of $45,000. During the first six months of 2021, the Company recorded pre-tax servicing right recovery of $11.4 million, pre-tax gain on BOLI proceeds of $603,000 and pre-tax gain on bank premises of $500,000. Excluding these adjustment items, the Company’s net income would have been $156.5 million, or $2.25 per diluted share, for the six months ended June 30, 2022 and $203.3 million, or $2.91 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,
(in thousands, except share and per share data) 2022 2021
Net income available to common shareholders $ 171,764 $ 213,289
Adjustment items:
Merger and conversion charges 977 —
Servicing right recovery (20,492) (11,388)
Gain on BOLI proceeds — (603)
Gain on bank premises (45) (500)
Tax effect of adjustment items (Note 1)
4,308 2,496
After tax adjustment items (15,252) (9,995)
Adjusted net income $ 156,512 $ 203,294
Weighted average common shares outstanding - diluted 69,484,508 69,764,923
Net income per diluted share $ 2.47 $ 3.06
Adjusted net income per diluted share $ 2.25 $ 2.91
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.

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 months ended June 30, 2022 and 2021, respectively:

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 loan 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
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 221,639 $ 64,284 $ 19,315 $ 32,084 $ 14,379 $ 351,701
Interest expense (1,847) 22,767 689 2,567 696 24,872
Net interest income 223,486 41,517 18,626 29,517 13,683 326,829
Provision for loan losses (27,853) 1,094 (300) (1,154) (236) (28,449)
Noninterest income 32,909 166,695 2,313 5,288 8 207,213
Noninterest expense
Salaries and employee benefits 80,537 94,636 608 2,319 3,390 181,490
Occupancy and equipment 19,170 3,029 2 238 154 22,593
Data processing and communications expenses 20,481 2,981 117 1 181 23,761
Other expenses 38,473 15,827 63 579 1,773 56,715
Total noninterest expense 158,661 116,473 790 3,137 5,498 284,559
Income before income tax expense 125,587 90,645 20,449 32,822 8,429 277,932
Income tax expense 32,652 19,035 4,294 6,893 1,769 64,643
Net income $ 92,935 $ 71,610 $ 16,155 $ 25,929 $ 6,660 $ 213,289

~~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 months ended June 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,
2022 2021
(dollars in thousands) Average
Balance Interest
Income/
Expense Average
Yield/
Rate Paid Average
Balance Interest
Income/
Expense Average
Yield/
Rate Paid
Assets
Interest-earning assets:
Federal funds sold, 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%
Investment securities 862,178 11,879 2.78% 907,049 11,716 2.60%
Loans held for sale 1,020,611 18,168 3.59% 1,496,155 22,600 3.05%
Loans 16,344,409 352,000 4.34% 14,501,802 318,585 4.43%
Total interest-earning assets 21,044,269 387,925 3.72% 19,229,371 354,042 3.71%
Noninterest-earning assets 2,296,516 1,915,380
Total assets $ 23,340,785 $ 21,144,751
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits $ 9,844,422 $ 6,190 0.13% $ 8,915,964 $ 5,894 0.13%
Time deposits 1,733,656 2,810 0.33% 2,036,668 6,679 0.66%
Federal funds purchased and securities sold under agreements to repurchase 2,931 4 0.28% 8,077 12 0.30%
FHLB advances 48,766 382 1.58% 48,931 385 1.59%
Other borrowings 410,058 9,601 4.72% 376,318 9,321 4.99%
Subordinated deferrable interest debentures 126,814 3,047 4.85% 124,823 2,581 4.17%
Total interest-bearing liabilities 12,166,647 22,034 0.37% 11,510,781 24,872 0.44%
Demand deposits 7,807,929 6,644,646
Other liabilities 347,109 242,402
Shareholders’ equity 3,019,100 2,746,922
Total liabilities and shareholders’ equity $ 23,340,785 $ 21,144,751
Interest rate spread 3.35% 3.27%
Net interest income $ 365,891 $ 329,170
Net interest margin 3.51% 3.45%

On a tax-equivalent basis, net interest income for the six months ended June 30, 2022 was $365.9 million, an increase of $36.7 million, or 11.2%, compared with $329.2 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 billion, or 9.4%, from $19.23 billion in the first six months of 2021 to $21.04 billion for the first six 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 months of 2022 was 3.51%, up six basis points from 3.45% reported for the first six months of 2021. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to $10.0 billion during the first six months of 2022, with weighted average yields of 3.98%, compared with $13.9 billion and 3.25%, respectively, during the first six months of 2021. Loan production yields in the lines of business were negatively impacted seven basis points during the first six months of 2021 by originations of Paycheck Protection Program loans in our SBA division. Loan production in the banking division amounted to $1.9 billion during the first six months of 2022 with weighted average yields of 5.21%, compared with $1.5 billion and 3.77%, respectively, during the first six months of 2021.

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

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

The yield on total interest-bearing liabilities decreased from 0.44% during the six months ended June 30, 2021 to 0.37% in the same period of 2022. Total funding costs, inclusive of noninterest-bearing demand deposits, decreased to 0.22% in the first six months of 2022, compared with 0.28% during the same period of 2021. Deposit costs decreased from 0.14% in the first six months of 2021 to 0.09% in the same period of 2022. Non-deposit funding costs increased from 4.44% in the first six months of 2021 to 4.47% 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 months ended June 30, 2022 and 2021 are shown below:

Six Months Ended
June 30, 2022 Six Months Ended
June 30, 2021
(dollars in thousands) Average
Balance Average
Cost Average
Balance Average
Cost
NOW $ 3,690,161 0.11% $ 3,248,655 0.11%
MMDA 5,163,636 0.15% 4,817,197 0.16%
Savings 990,625 0.06% 850,112 0.06%
Retail CDs 1,733,656 0.33% 2,035,668 0.66%
Brokered CDs — —% 1,000 2.82%
Interest-bearing deposits $ 11,578,078 0.16% $ 10,952,632 0.23%

~~Provision for Credit Losses~~

The Company’s provision for credit losses during the six months ended June 30, 2022 amounted to $21.2 million, compared with negative $28.4 million in the six months ended June 30, 2021. This increase was primarily attributable to organic growth in loans during the first six months of 2022 and a release of reserves in the six months ended June 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 months of 2022 was comprised of $10.5 million related to loans, $10.8 million related to unfunded commitments and negative $126,000 related to other credit losses compared with negative $17.5 million related to loans, negative $10.5 million related to unfunded commitments and negative $431,000 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% at June 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 million. Net charge-offs on loans during the first six months of 2022 were $5.4 million, or 0.07% of average loans on an annualized basis, compared with approximately $6.9 million, or 0.10%, in the first six months of 2021. The Company’s total allowance for credit losses on loans at June 30, 2022 was $172.6 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 months ended June 30, 2022 was $170.8 million, a~~ decrease ~~of $36.5 million, or 17.6%, from the $207.2 million reported for the six months ended June 30, 2021.Income from mortgage banking activities decreased $47.0 million, or 27.9%, from $168.7 million in the first six months of 2021 to $121.7 million in the same period of 2022.~~Total production in the first six months of 2022 amounted to $3.26 billion, compared with $5.03 billion in the same period of 2021, while spread (gain on sale) decreased to 2.63% during the six months ended June 30, 2022, compared with 3.39% in the same period of 2021. The retail mortgage open pipeline was $832.3 million at June 30, 2022, compared with $1.62 billion at December 31, 2021 and $1.75 billion at June 30, 2021. Mortgage-related activities was positively impacted during the first six months of 2022 by a recovery of previous mortgage servicing right impairment of $20.5 million, compared with a recovery of $11.4 million for the same period in 2021.

Other noninterest income increased $10.1 million, or 69.1%, to $24.7 million for the first six months of 2022, compared with $14.6 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 million, an increase in BOLI income of $1.6 million and an increase in trust income of $473,000, partially offset by a decrease of $603,000 in gain on BOLI proceeds.

~~Noninterest Expense~~

Total noninterest expenses for the six months ended June 30, 2022 increased $1.5 million, or 0.5%, to $286.0 million, compared with $284.6 million in the same period of 2021. Salaries and employee benefits decreased $15.7 million, or 8.6%, from $181.5 million in the first six months of 2021 to $165.8 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 million and $1.5 million, respectively, partially offset by an increase in salaries and employee benefits related to Balboa Capital of $17.6 million. Occupancy and equipment expenses increased $2.9 million, or 12.7%, to $25.5 million for the first six months of 2022, compared with $22.6 million in the same period of 2021, due primarily to the addition of Balboa Capital and an increase in real estate taxes. Data processing and communications expenses increased $966,000, or 4.1%, to $24.7 million in the first six months of 2022, from $23.8 million reported in the same period of 2021. Credit resolution-related expenses decreased $1.6 million, or 140.1%, from $1.2 million in the first six months of 2021 to negative $469,000 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 million. Advertising and marketing expense was $5.1 million in the first six months of 2022, compared with $3.4 million in the first six months of 2021. Amortization of intangible assets increased $2.1 million, or 26.1%, from $8.2 million in the first six months of 2021 to $10.3 million in the first six 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 months of 2022, compared with none in the same period in 2021. Loan servicing expenses increased $8.0 million, or 74.2%, from $10.8 million in the first six months of 2021 to $18.8 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, or 6.2%, from $33.2 million in the first six months of 2021 to $35.2 million in the same period of 2022, due primarily to an increase of $2.9 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 of $569,000 and variable expenses tied to production in our mortgage division.

~~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 months ended June 30, 2022, the Company reported income tax expense of $55.7 million, compared with $64.6 million in the same period of 2021. The Company’s effective tax rate for the six months ended June 30, 2022 and 2021 was 24.5% and 23.3%, respectively. The increase in the effective tax rate is primarily a result of a discrete charge to the Company's state tax liability and an increase in nondeductible merger ~~and conversion charges incurred during~~expenses in the first ~~six months~~quarter of 2022.

4635

Financial Condition as of ~~June 30, 2022~~March 31, 2023

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 30, 2022,~~March 31, 2023, 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 30, 2022,~~March 31, 2023, management determined that ~~$88,000~~$82,000 was attributable to credit impairment and, accordingly, an allowance for credit losses was established. The remaining ~~$16.7~~$45.5 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					March 31, 2023				December 31, 2022
(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	$	776,583	$	766,129	$	775,784	$	759,534
U.S. government-sponsored agencies	U.S. government-sponsored agencies	2,050		2,021		7,084		7,172		U.S. government-sponsored agencies	1,032		987		1,036		979
State, county and municipal securities	State, county and municipal securities	41,428		40,963		45,470		47,812		State, county and municipal securities	33,965		33,213		35,358		34,195
Corporate debt securities	Corporate debt securities	15,897		15,463		27,897		28,496		Corporate debt securities	16,397		15,610		16,397		15,926
SBA pool securities	SBA pool securities	35,854		34,431		44,312		45,201		SBA pool securities	26,942		25,342		29,422		27,398
Mortgage-backed securities	Mortgage-backed securities	658,508		646,501		448,124		463,940		Mortgage-backed securities	686,223		655,555		701,008		662,028
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	$	1,541,142	$	1,496,836	$	1,559,005	$	1,500,060

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	$	27,330	$	31,905	$	26,525

Mortgage-backed securities	Mortgage-backed securities	79,749		69,518		70,945		69,495		Mortgage-backed securities	102,270		88,763		102,959		88,013
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	$	134,175	$	116,093	$	134,864	$	114,538

4736

The amounts of securities available-for-sale and held-to-maturity in each category as of ~~June 30, 2022~~March 31, 2023 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	$	72,894	3.93	%	$	—	—	%	$	2,243	3.93	%
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	693,235		3.15		987		2.16		18,054		3.89
After five years through ten years	After five years through ten years	—		—		—		—		15,252		4	4.01		After five years through ten years	—		—		—		—		6,631		4.44
After ten years	After ten years	—		—		—		—		7,227			3.70		After ten years	—		—		—		—		6,285		3.63
		$	312,889	2.53	%	$	2,021	2.04	%	$	40,963		3.86	%		$	766,129	3.23	%	$	987	2.16	%	$	33,213	3.95	%

		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	%	$	11	6.62	%	$	20,578	2.67	%
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	3,994		5.47		6,004		2.11		233,349		3.13
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	9,825		5.00		5,907		2.58		150,168		3.12
After ten years	After ten years	1,719		5.59		21,702		2.50		306,789			3.03		After ten years	1,291		8.00		13,420		3.13		251,460		3.24
		$	15,463	4.79	%	$	34,431	2.42	%	$	646,501		2.99	%		$	15,610	5.43	%	$	25,342	2.76	%	$	655,555	3.15	%

		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	—		—		10,901		1.01
After five years through ten years	After five years through ten years	—		—		26,103		2.03							After five years through ten years	—		—		38,669		2.66
After ten years	After ten years	31,905		3.93		42,602		1.68							After ten years	31,905		3.93		52,700		2.22
		$	31,905	3.93	%	$	79,749	1.70	%							$	31,905	3.93	%	$	102,270	2.26	%

(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 30, 2022,~~March 31, 2023, gross loans outstanding (including loans and loans held for sale) were ~~$18.12~~$20.39 billion, up ~~$987.8~~$145.6 million from ~~$17.13~~$20.25 billion reported at December 31, ~~2021.~~2022. Loans increased ~~$1.69 billion,~~$142.6 million, or ~~10.6%~~0.7%, from ~~$15.87~~$19.86 billion at December 31, ~~2021~~2022 to ~~$17.56~~$20.00 billion at ~~June 30, 2022,~~March 31, 2023, driven primarily by organic growth. Loans held for sale ~~decreased~~increased from ~~$1.25 billion~~$392.1 million at December 31, ~~2021~~2022 to ~~$555.7~~$395.1 million at ~~June 30, 2022~~March 31, 2023 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.

4837

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.~~ACL.

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

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

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

At the end of the ~~second~~first quarter of ~~2022,~~2023, the ACL on loans totaled ~~$172.6~~$242.7 million, or ~~0.98%~~1.21% of loans, compared with ~~$167.6~~$205.7 million, or ~~1.06%~~1.04% of loans, at December 31, ~~2021.~~2022. Our nonaccrual loans increased from ~~$85.3~~$134.8 million at December 31, ~~2021~~2022 to ~~$122.9~~$143.0 million at ~~June 30, 2022.~~March 31, 2023. The increase in nonaccrual loans is primarily 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 million.~~repurchase. For the first ~~six~~three months of ~~2022,~~2023, our net charge off ratio as a percentage of average loans ~~decreased~~increased to ~~0.07%~~0.22%, compared with ~~0.10%~~0.09% for the first ~~six~~three months of ~~2021.~~2022. The total provision for credit losses for the first ~~six~~three months of ~~2022~~2023 was ~~$21.2~~$49.7 million, increasing from a provision ~~release~~ of ~~$28.4~~$6.2 million recorded for the first ~~six~~three months of ~~2021.~~2022. Our ratio of total nonperforming assets to total assets ~~increased from 0.43%~~was stable at 0.61% at both December 31, ~~2021 to 0.56% at June 30, 2022.~~2022 and March 31, 2023.

4938

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~~three months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:


		Six Months Ended June 30,					Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		(dollars in thousands)	2023		2022
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	$	205,677	$	167,582

Adjustment to allowance for adoption of ASU 2022-02						Adjustment to allowance for adoption of ASU 2022-02	(1,711)		—
Provision charged to operating expense	Provision charged to operating expense	10,493		(17,478)		Provision charged to operating expense	49,376		(2,734)
Charge-offs:	Charge-offs:					Charge-offs:
Commercial, financial and agricultural	Commercial, financial and agricultural	8,805		5,899		Commercial, financial and agricultural	12,233		4,414
Consumer installment		2,562		3,117
Consumer						Consumer	1,140		1,425
Indirect automobile	Indirect automobile	129		970		Indirect automobile	34		88

Premium finance	Premium finance	2,435		2,537		Premium finance	1,421		1,369
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	—		1,283
Real estate – residential	Real estate – residential	137		555		Real estate – residential	128		—
Total charge-offs	Total charge-offs	15,432		14,712		Total charge-offs	14,956		8,579

Recoveries:	Recoveries:					Recoveries:
Commercial, financial and agricultural	Commercial, financial and agricultural	5,681		1,352		Commercial, financial and agricultural	2,043		2,896
Consumer installment		388		568
Consumer						Consumer	297		158
Indirect automobile	Indirect automobile	540		1,072		Indirect automobile	216		275

Premium finance	Premium finance	2,360		3,588		Premium finance	1,382		1,247
Real estate – construction and development	Real estate – construction and development	573		251		Real estate – construction and development	100		218
Real estate – commercial and farmland	Real estate – commercial and farmland	81		226		Real estate – commercial and farmland	44		37
Real estate – residential	Real estate – residential	376		781		Real estate – residential	190		151
Total recoveries	Total recoveries	9,999		7,838		Total recoveries	4,272		4,982
Net charge-offs	Net charge-offs	5,433		6,874		Net charge-offs	10,684		3,597
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	$	242,658	$	161,251

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 Three Months Ended
(dollars in thousands)	(dollars in thousands)	June 30, 2022			June 30, 2021			(dollars in thousands)	March 31, 2023			March 31, 2022
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	$	242,658		$	161,251
Net charge-offs for the period	Net charge-offs for the period	5,433			6,874			Net charge-offs for the period	10,684			3,597
Loan balances:	Loan balances:							Loan balances:
End of period	End of period	17,561,022			14,780,791			End of period	19,997,871			16,143,801
Average for the period	Average for the period	16,344,409			14,501,802			Average for the period	19,820,749			15,821,397
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)	0.22		%	0.09		%
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	1.21		%	1.00		%

5039

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)	March 31, 2023		December 31, 2022
Commercial, financial and agricultural	Commercial, financial and agricultural	$	2,022,845	$	1,875,993	Commercial, financial and agricultural	$	2,722,180	$	2,679,403
Consumer installment		167,237		191,298
Consumer						Consumer	349,775		384,037
Indirect automobile	Indirect automobile	172,245		265,779		Indirect automobile	83,466		108,648
Mortgage warehouse	Mortgage warehouse	949,191		787,837		Mortgage warehouse	958,418		1,038,924
Municipal	Municipal	529,268		572,701		Municipal	505,515		509,151
Premium finance	Premium finance	942,357		798,409		Premium finance	947,257		1,023,479
Real estate – construction and development	Real estate – construction and development	1,747,284		1,452,339		Real estate – construction and development	2,144,605		2,086,438
Real estate – commercial and farmland	Real estate – commercial and farmland	7,156,017		6,834,917		Real estate – commercial and farmland	7,721,732		7,604,867
Real estate – residential	Real estate – residential	3,874,578		3,094,985		Real estate – residential	4,564,923		4,420,306
		$	17,561,022	$	15,874,258		$	19,997,871	$	19,855,253

Non-Performing Assets

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

Nonaccrual loans totaled ~~$122.9~~$143.0 million at ~~June 30, 2022,~~March 31, 2023, an increase of ~~$37.6~~$8.2 million, or ~~44.2%~~6.1%, from ~~$85.3~~$134.8 million at December 31, ~~2021.~~2022. Accruing loans delinquent 90 days or more totaled ~~$8.5~~$15.8 million at ~~June 30, 2022,~~March 31, 2023, a decrease of ~~$4.1~~$2.1 million, or ~~32.5%~~11.6%, compared with ~~$12.6~~$17.9 million at December 31, ~~2021.~~2022. At ~~June 30, 2022,~~March 31, 2023, OREO totaled ~~$835,000, a decrease~~$1.5 million, an increase of ~~$3.0 million,~~$659,000, or ~~78.1%~~78.2%, compared with ~~$3.8 million~~$843,000 at December 31, ~~2021.~~2022. Management regularly assesses the valuation of OREO through periodic reappraisal and through inquiries received in the marketing process. At the end of the ~~second~~first quarter of ~~2022,~~2023, total non-performing assets as a percent of total assets ~~increased to 0.56%~~were stable at 0.61% compared with ~~0.43% at~~ December 31, ~~2021.~~2022.

Non-performing assets at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 were as follows:


(dollars in thousands)	(dollars in thousands)	June 30, 2022		December 31, 2021		(dollars in thousands)	March 31, 2023		December 31, 2022
Nonaccrual loans(1)	Nonaccrual loans(1)	$	122,912	$	85,266	Nonaccrual loans(1)	$	143,027	$	134,808
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	15,792		17,865
Repossessed assets	Repossessed assets	122		84		Repossessed assets	25		28
Other real estate owned	Other real estate owned	835		3,810		Other real estate owned	1,502		843
Total non-performing assets	Total non-performing assets	$	132,411	$	101,808	Total non-performing assets	$	160,346	$	153,544

(1) Included in nonaccrual loans were $75.0 million and $69.6 million of serviced GNMA-guaranteed nonaccrual loans at March 31, 2023 and December 31, 2022, respectively.

~~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 30, 2022 and December 31, 2021, the Company had a balance of $41.8 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 30, 2022 and December 31, 2021:

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 30, 2022 and December 31, 2021:

June 30, 2022 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 $ 971 1 $ 357
Consumer installment 8 13 6 10
Indirect automobile 182 697 44 184
Premium finance 6 993 — —
Real estate – construction and development 2 706 — —
Real estate – commercial and farmland 21 8,993 1 8
Real estate – residential 198 23,052 43 5,773
Total 428 $ 35,425 95 $ 6,332

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 30, 2022 and December 31, 2021:~~

June 30, 2022 Accruing Loans Non-Accruing Loans
Type of Concession #
Balance
(in thousands)
#
Balance
(in thousands)
Forgiveness of interest 3 $ 283 — $ —
Forbearance of interest 15 1,070 1 41
Forbearance of principal 288 21,748 49 4,725
Rate reduction only 54 5,311 2 160
Rate reduction, forbearance of interest 32 2,385 2 25
Rate reduction, forbearance of principal 17 2,336 21 573
Rate reduction, forgiveness of interest 36 2,967 3 133
Total 445 $ 36,100 78 $ 5,657

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 30, 2022 and December 31, 2021:~~

June 30, 2022 Accruing Loans Non-Accruing Loans
Collateral Type #
Balance
(in thousands)
#
Balance
(in thousands)
Warehouse 3 $ 57 2 $ 251
Raw land 3 1,751 2 51
Hotel and motel 1 130 — —
Office 4 613 — —
Retail, including strip centers 7 3,978 1 496
1-4 family residential 210 24,456 30 4,359
Church 2 2,390 — —
Automobile/equipment/CD 209 1,732 43 500
Unsecured 6 993 — —
Total 445 $ 36,100 78 $ 5,657

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 30, 2022,~~March 31, 2023, 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 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. The loan categories and concentrations below are based on Federal Reserve Call codes:


		June 30, 2022			December 31, 2021				March 31, 2023			December 31, 2022
(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	$	2,144,605	11%	$	2,086,438	11%
Multi-family loans	Multi-family loans	693,382		4%	596,000		4%	Multi-family loans	787,701		4%	779,027		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)	4,737,191		24%	4,796,358		24%
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)	7,669,497		38%	7,661,823		39%
All other loan types	All other loan types	10,580,373		60%	9,484,483		60%	All other loan types	12,328,374		62%	12,193,430		61%
Total Loans	Total Loans	$	17,561,022	100%	$	15,874,258	100%	Total Loans	$	19,997,871	100%	$	19,855,253	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 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		Internal Limit		Actual				Internal Limit			Actual
			June 30, 2022		December 31, 2021					March 31, 2023		December 31, 2022
Construction and development loans	Construction and development loans		100%		72%		66%		Construction and development loans	100%		80%		79%
Total CRE loans (excluding owner-occupied)	Total CRE loans (excluding owner-occupied)	300%		288%		291%	Total CRE loans (excluding owner-occupied)	300%			287%		292%

Short-Term Investments

The Company’s short-term investments are comprised of federal funds sold and interest-bearing deposits in banks. At ~~June 30, 2022,~~March 31, 2023, the Company’s short-term investments were ~~$1.96~~$1.75 billion, compared with ~~$3.76 billion~~$833.6 million at December 31, ~~2021. At June 30,~~ 2022, ~~the Company had $5.0 million in federal funds sold and $1.96 billion~~all of which 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~~$6.4 million and ~~$11.9~~$3.9 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, and a liability of $5.3 million and $0 ~~and $710,000~~ at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The Company also enters into interest rate derivative agreements to facilitate the risk management strategies of certain clients. The Company mitigates this risk by entering into equal and offsetting interest rate swap agreements with highly rated third-party financial institutions. The fair value of these instruments amounted to an asset of $4.1 million and $4.6 million at March 31, 2023 and December 31, 2022, respectively, and a liability of $4.4 million and $4.6 million at March 31, 2023 and December 31, 2022, respectively.

Deposits

Total deposits at the Company increased $434.7 million, or 2.2%, to $19.90 billion at March 31, 2023, compared with $19.46 billion at December 31, 2022. Noninterest-bearing deposits decreased $631.7 million, or 8.0%, while interest-bearing deposits increased $1.07 billion, or 9.2%, during the first quarter of 2023. The decrease in noninterest-bearing deposits was attributable to the cyclicality of certain customers' industries, particularly agriculture, and a shift in consumer behavior to interest-bearing accounts as interest rates have risen. During the first quarter of 2023, the Company proactively issued approximately $1.11 billion in short-term brokered CDs. As of March 31, 2023 and December 31, 2022, the Company had estimated uninsured deposits of $8.34 billion and $9.15 billion, respectively. These estimates were derived using the same methodologies and assumptions used for the Bank's regulatory reporting. Approximately $2.43 billion, or 29.2%, of the uninsured deposits were for municipalities which are collateralized with investment securities or letters of credit. The decrease in uninsured deposits is primarily related to the cyclical deposit flows in the first quarter.

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 30, 2022, $41.7~~March 31, 2023, an aggregate of $5.5 million, or ~~952,910~~140,733 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 30, 2022,~~March 31, 2023, 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 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		June 30, 2022	December 31, 2021		March 31, 2023	December 31, 2022
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	9.26%	9.36%
Ameris Bank	Ameris Bank	10.30%	9.50%	Ameris Bank	10.21%	10.56%
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	10.10%	9.86%
Ameris Bank	Ameris Bank	11.54%	11.50%	Ameris Bank	11.14%	11.12%
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	10.10%	9.86%
Ameris Bank	Ameris Bank	11.54%	11.50%	Ameris Bank	11.14%	11.12%
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	13.16%	12.90%
Ameris Bank	Ameris Bank	12.61%	12.45%	Ameris Bank	12.57%	12.28%

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 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the net carrying value of the Company’s other borrowings was ~~$425.6 million~~$2.40 billion and ~~$739.9 million,~~$1.88 billion, respectively. At March 31, 2023, the Company had availability with the FHLB and FRB Discount Window of $2.38 billion and $2.72 billion, 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		March 31, 2023	December 31, 2022	September 30, 2022	June 30, 2022	March 31, 2022
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	7.52%	7.71%	6.45%	5.35%	2.96%
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	100.50%	102.02%	96.61%	89.21%	82.41%
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	91.71%	91.11%	90.76%	89.88%	90.43%
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	61.60%	59.26%	57.14%	58.02%	59.82%

The liquidity resources of the Company are monitored ~~continuously~~continually by the ALCO Committee and on a periodic basis by state and federal regulatory authorities. As determined under guidelines established by these regulatory authorities, the Company’s and the Bank’s liquidity ratios at ~~June 30, 2022~~March 31, 2023 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~~$6.4 million and ~~$11.9~~$3.9 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, and a liability of $5.3 million and $0 ~~and $710,000~~ at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The Company also enters into interest rate derivative agreements to facilitate the risk management strategies of certain clients. The Company mitigates this risk by entering into equal and offsetting interest rate swap agreements with highly rated third-party financial institutions. The fair value of these instruments amounted to an asset of $4.1 million and $4.6 million at March 31, 2023 and December 31, 2022, respectively, and a liability of $4.4 million and $4.6 million at March 31, 2023 and December 31, 2022, respectively.

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

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

The Company uses simulation analysis to monitor changes in net interest income due to changes in market interest rates. The simulation of rising, declining and flat interest rate scenarios allows management to monitor and adjust interest rate sensitivity to minimize the impact of market interest rate swings. The analysis of the impact on net interest income over a 12-month and

24-month period is subjected to gradual and parallel shocks of 100, 200, 300 and 400 basis point increases and decreases in market rates and is monitored on a quarterly basis.

The following table presents the earnings simulation model’s projected impact of a change in interest rates on the projected baseline net interest income for the 12- and 24-month periods commencing April 1, 2023. This change in interest rates assumes parallel shifts in the yield curve and does not take into account changes in the slope of the yield curve.


Earnings Simulation Model Results
Change in	% Change in Projected Baseline
Interest Rates	Net Interest Income
(in bps)	12 Months	24 Months
400	0.7%	11.0%
300	2.5%	9.5%
200	2.6%	6.8%
100	1.5%	3.6%
(100)	(1.8)%	(4.2)%
(200)	(3.8)%	(8.8)%
(300)	(6.1)%	(14.3)%
(400)	(8.3)%	(18.8)%

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 30, 2022,~~March 31, 2023, 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~~Except as noted below, there have not been noany material changes to the risk factors disclosed in Item 1A. of Part I of ~~our~~the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022, previously filed with the SEC.

A failure, or the perceived risk of a failure, to raise the statutory debt limit of the United States could have an adverse effect on our business, financial condition and results of operations.

The inability of U.S. lawmakers to pass legislation to raise the U.S. government’s debt limit of $31.4 trillion has increased the possibility of a default by the U.S. government on its debt obligations, which could have an adverse impact on financial markets, interest rates and economic conditions in the United States and worldwide. The U.S. government reached its debt limit of $31.4 trillion in January 2023. Since then, the U.S. Department of Treasury has implemented extraordinary measures to prevent default.

It is unclear if Congress and the President will reach an agreement to increase the U.S. government’s debt limit in a timely manner. The political stalemate over legislation to fund U.S. government operations and raise the U.S. government’s debt limit may increase the possibility of a default by the U.S. government on its debt obligations and related credit-rating downgrades. This creates uncertainty in the U.S. financial markets and domestic political conditions, which could have an adverse impact on our business, financial condition and results of operations. If the United States is unable to increase the U.S. government’s debt limit in a timely manner, the U.S. federal government could shut down for a period of time and the United States could default on, or delay on payment of, its obligations or both, which could have an adverse impact on financial markets and economic conditions in the United States and worldwide and an adverse effect on our business, financial condition and results of operations.

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 30, 2022.~~March 31, 2023.

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)
January 1, 2023 through January 31, 2023	—	$	—	—	$	100,000,000
February 1, 2023 through February 28, 2023	60,652	$	48.29	—	$	100,000,000
March 1, 2023 through March 31, 2023	155,018	$	39.51	140,733	$	94,479,288
Total	215,670	$	41.98	140,733	$	94,479,288

(1)The shares purchased in February 2023 and March 2023 include 60,652 and 14,285 shares, respectively, 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 30, 2022, $41.7~~March 31, 2023, an aggregate of $5.5 million, or ~~952,910~~140,733 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.

5947

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~~3.1						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~~Restated Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s ~~Current~~Annual Report on Form ~~8-K~~10-K filed with the SEC on ~~December 1, 2005)~~February 28, 2023).

~~3.5~~3.						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~~2						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).~~February 23, 2023.

10.1*						Split Dollar Termination Agreement by and among Ameris Bancorp, ~~2021 Omnibus Equity Incentive Plan, as amended~~Ameris Bank and ~~restated through July 26, 2022.~~

10.2*						~~Summary of Director Compensation.~~James Bennett Miller, Jr.

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.

6048

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, 2022~~May 8, 2023			AMERIS BANCORP

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

6149


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


June 30, 2022	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	9	$	964	3	$	364
Consumer installment	4	9		10	14
Indirect automobile	196	759		30	122


Premium finance	6	993		—	—
Real estate – construction and development	2	706		—	—
Real estate – commercial and farmland	18	8,213		4	788
Real estate – residential	210	24,456		31	4,369
Total	445	$	36,100	78	$	5,657


	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
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	221,639	$	64,284	$	19,315	$	32,084	$	14,379	$	351,701
Interest expense	(1,847)		22,767		689		2,567		696		24,872
Net interest income	223,486		41,517		18,626		29,517		13,683		326,829
Provision for credit losses	(27,853)		1,094		(300)		(1,154)		(236)		(28,449)
Noninterest income	32,909		166,695		2,313		5,288		8		207,213
Noninterest expense
Salaries and employee benefits	80,537		94,636		608		2,319		3,390		181,490
Occupancy and equipment	19,170		3,029		2		238		154		22,593
Data processing and communications expenses	20,481		2,981		117		1		181		23,761
Other expenses	38,473		15,827		63		579		1,773		56,715
Total noninterest expense	158,661		116,473		790		3,137		5,498		284,559
Income before income tax expense	125,587		90,645		20,449		32,822		8,429		277,932
Income tax expense	32,652		19,035		4,294		6,893		1,769		64,643
Net income	$	92,935	$	71,610	$	16,155	$	25,929	$	6,660	$	213,289


June 30, 2022	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	$	971	1	$	357
Consumer installment	8	13		6	10
Indirect automobile	182	697		44	184


Premium finance	6	993		—	—
Real estate – construction and development	2	706		—	—
Real estate – commercial and farmland	21	8,993		1	8
Real estate – residential	198	23,052		43	5,773
Total	428	$	35,425	95	$	6,332


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