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PART I – FINANCIAL INFORMATION

Item 1.	Financial ~~Statements~~Statements.	1

	Consolidated Balance Sheets as of March 31, ~~2017~~2018 and December 31, ~~2016~~2017	1

	Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, ~~2017~~2018 and ~~2016~~2017	2

	Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, ~~2017~~2018 and ~~2016~~2017	3

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2017~~2018 and ~~2016~~2017	4

	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operations.	40 41

Item 3.	Quantitative and Qualitative Disclosures About Market ~~Risk~~Risk.	58 61

Item 4.	Controls and ~~Procedures~~Procedures.	58 62

PART II – OTHER INFORMATION

Item 1.	Legal ~~Proceedings~~Proceedings.	59 62

Item 1A.	Risk ~~Factors~~Factors.	59 62

Item 2.	Unregistered Sales of Equity Securities and Use of ~~Proceeds~~Proceeds.	59 62

Item 3.	Defaults Upon Senior ~~Securities~~Securities.	59 62

Item 4.	Mine Safety ~~Disclosures~~Disclosures.	59 62

Item 5.	Other ~~Information~~Information.	59 62

Item 6.	~~Exhibits~~Exhibits.	59 63

Signatures		60 64

Item 1. Financial Statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets (unaudited)

(dollars in thousands, except per share data)

March 31,
2017

December 31,
2016

Assets
Cash and due from banks $ 127,164 $ 127,164
Federal funds sold and interest-bearing deposits in banks 232,045 71,221
Investment securities available for sale, at fair value 830,765 822,735
Other investments 35,950 29,464
Loans held for sale, at fair value 105,637 105,924

Loans 3,785,480 3,626,821
Purchased loans 1,006,935 1,069,191
Purchased loan pools 529,099 568,314
Loans, net of unearned income 5,321,514 5,264,326
Allowance for loan losses (25,250 ) (23,920 )
Loans, net 5,296,264 5,240,406

Other real estate owned, net 10,466 10,874
Purchased other real estate owned, net 11,668 12,540
Total other real estate owned, net 22,134 23,414

Premises and equipment, net 121,610 121,217
Goodwill 125,532 125,532
Other intangible assets, net 16,391 17,428
Deferred income taxes, net 41,505 40,776
Cash value of bank owned life insurance 78,442 78,053
Other assets 61,417 88,697
Total assets $ 7,094,856 $ 6,892,031

Liabilities
Deposits:
Noninterest-bearing $ 1,654,723 $ 1,573,389
Interest-bearing 3,987,646 4,001,774
Total deposits 5,642,369 5,575,163
Securities sold under agreements to repurchase 40,415 53,505
Other borrowings 525,669 492,321
Subordinated deferrable interest debentures 84,559 84,228
Other liabilities 43,628 40,377
Total liabilities 6,336,640 6,245,594

Commitments and Contingencies (Note 10)
Shareholders’ Equity
Preferred stock, stated value $1,000 (5,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2017 and December 31, 2016) - -
Common stock, par value $1 (100,000,000 shares authorized; 38,602,949 and 36,377,807 shares issued at March 31, 2017 and December 31, 2016, respectively) 38,603 36,378
Capital surplus 503,543 410,276
Retained earnings 231,894 214,454
Accumulated other comprehensive income (loss), net of tax (1,209 ) (1,058 )
Treasury stock, at cost (1,474,235 shares and 1,456,333 shares at March 31, 2017 and December 31, 2016, respectively) (14,615 ) (13,613 )

Total shareholders’ equity 758,216 646,437

Total liabilities and shareholders’ equity $ 7,094,856 $ 6,892,031



	March 31, 2018			December 31, 2017
Assets
Cash and due from banks	$	123,945		$	139,313
Federal funds sold and interest-bearing deposits in banks	210,930			191,345
Cash and cash equivalents	334,875			330,658

Investment securities available for sale, at fair value	848,585			810,873
Other investments	32,227			42,270
Loans held for sale, at fair value	111,135			197,442

Loans	5,051,986			4,856,514
Purchased loans	818,587			861,595
Purchased loan pools	319,598			328,246
Loans, net of unearned income	6,190,171			6,046,355
Allowance for loan losses	(26,200		)	(25,791		)
Loans, net	6,163,971			6,020,564

Other real estate owned, net	9,171			8,464
Purchased other real estate owned, net	6,723			9,011
Total other real estate owned, net	15,894			17,475

Premises and equipment, net	116,381			117,738
Goodwill	208,513			125,532
Other intangible assets, net	12,562			13,496
Cash value of bank owned life insurance	80,007			79,641
Deferred income taxes, net	28,677			28,320
Other assets	70,001			72,194
Total assets	$	8,022,828		$	7,856,203

Liabilities
Deposits:
Noninterest-bearing	$	1,867,900		$	1,777,141
Interest-bearing	4,578,265			4,848,704
Total deposits	6,446,165			6,625,845
Securities sold under agreements to repurchase	23,270			30,638
Other borrowings	555,535			250,554
Subordinated deferrable interest debentures	85,881			85,550
Other liabilities	43,033			59,137
Total liabilities	7,153,884			7,051,724

Commitments and Contingencies (Note 9)

Shareholders’ Equity
Preferred stock, stated value $1,000 (5,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2018 and December 31, 2017)	—			—
Common stock, par value $1 (100,000,000 shares authorized; 39,819,918 and 38,734,873 shares issued at March 31, 2018 and December 31, 2017, respectively)	39,820			38,735
Capital surplus	559,040			508,404
Retained earnings	296,366			273,119
Accumulated other comprehensive income (loss), net of tax	(10,823		)	(1,280		)
Treasury stock, at cost (1,492,837 shares and 1,474,861 shares at March 31, 2018 and December 31, 2017, respectively)	(15,459		)	(14,499		)
Total shareholders’ equity	868,944			804,479
Total liabilities and shareholders’ equity	$	8,022,828		$	7,856,203

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income (unaudited)

(dollars in thousands, except per share data)

Three Months Ended
March 31,

2017

2016

Interest income
Interest and fees on loans $ 61,521 $ 49,191
Interest on taxable securities 4,800 4,586
Interest on nontaxable securities 416 446
Interest on deposits in other banks and federal funds sold 313 336
Total interest income 67,050 54,559

Interest expense
Interest on deposits 3,763 2,741
Interest on other borrowings 2,697 1,382
Total interest expense 6,460 4,123

Net interest income 60,590 50,436
Provision for loan losses 1,836 681
Net interest income after provision for loan losses 58,754 49,755

Noninterest income
Service charges on deposit accounts 10,563 9,915
Mortgage banking activity 11,215 10,211
Other service charges, commissions and fees 709 1,111
Gain on sale of securities - 94
Other noninterest income 3,219 2,955
Total noninterest income 25,706 24,286
Noninterest expense
Salaries and employee benefits 27,794 26,187
Occupancy and equipment expense 5,877 5,700
Data processing and communications costs 6,572 6,113
Credit resolution-related expenses 933 1,799
Advertising and marketing expense 1,106 805
Amortization of intangible assets 1,036 1,020
Merger and conversion charges 402 6,359
Other noninterest expenses 9,373 7,617
Total noninterest expense 53,093 55,600
Income before income tax expense 31,367 18,441
Income tax expense 10,214 6,124
Net income 21,153 12,317

Other comprehensive income (loss)
Net unrealized holding gains (losses) arising during period on investment securities available for sale, net of tax expense (benefit) of ($105) and $2,011 (194 ) 3,734
Reclassification adjustment for gains on investment securities included in earnings, net of tax of $0 and $33 - (61 )
Unrealized gains (losses) on cash flow hedges arising during period, net of tax expense (benefit) of $23 and ($331) 43 (615 )
Other comprehensive income (loss) (151 ) 3,058
Total comprehensive income $ 21,002 $ 15,375
Basic earnings per common share $ 0.59 $ 0.38
Diluted earnings per common share $ 0.59 $ 0.37
Dividends declared per common share $ 0.10 $ 0.05
Weighted average common shares outstanding(in thousands)
Basic 35,664 32,752
Diluted 36,040 33,054



	Three Months Ended March 31,
	2018			2017
Interest income
Interest and fees on loans	$	73,267		$	61,521
Interest on taxable securities	5,207			4,800
Interest on nontaxable securities	322			416
Interest on deposits in other banks and federal funds sold	716			313
Total interest income	79,512			67,050

Interest expense
Interest on deposits	6,772			3,763
Interest on other borrowings	3,939			2,697
Total interest expense	10,711			6,460

Net interest income	68,801			60,590
Provision for loan losses	1,801			1,836
Net interest income after provision for loan losses	67,000			58,754

Noninterest income
Service charges on deposit accounts	10,228			10,563
Mortgage banking activity	11,900			11,215
Other service charges, commissions and fees	719			709
Gain on sale of securities	37			—
Other noninterest income	3,580			3,219
Total noninterest income	26,464			25,706

Noninterest expense
Salaries and employee benefits	32,089			27,794
Occupancy and equipment expense	6,198			5,877
Data processing and communications costs	7,135			6,572
Credit resolution-related expenses	549			933
Advertising and marketing expense	1,229			1,106
Amortization of intangible assets	934			1,036
Merger and conversion charges	835			402
Other noninterest expenses	10,129			9,373
Total noninterest expense	59,098			53,093

Income before income tax expense	34,366			31,367
Income tax expense	7,706			10,214
Net income	26,660			21,153

Other comprehensive income
Net unrealized holding losses arising during period on investment securities available for sale, net of tax benefit of $2,500 and $105	(9,403		)	(194		)
Reclassification adjustment for gains on investment securities included in earnings, net of tax of ($8) and $0	(29		)	—
Unrealized gains on cash flow hedges arising during period, net of tax expense of $75 and $23	281			43
Other comprehensive income (loss)	(9,151		)	(151		)
Total comprehensive income	$	17,509		$	21,002

Basic earnings per common share	$	0.70		$	0.59
Diluted earnings per common share	$	0.70		$	0.59
Dividends declared per common share	$	0.10		$	0.10
Weighted average common shares outstanding (in thousands)
Basic	37,967			35,664
Diluted	38,250			36,040

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity (unaudited)

(dollars in ~~thousands, except per share data)~~

Three Months Ended
March 31, 2017 Three Months Ended
March 31, 2016

Shares

Amount

Shares

Amount

Common Stock
Balance at beginning of period 36,377,807 $ 36,378 33,625,162 $ 33,625
Issuance of common stock 2,141,072 2,141 2,549,469 2,549
Issuance of restricted shares 67,721 68 96,749 97
Cancellation of restricted shares - - (3,000 ) (3 )
Proceeds from exercise of stock options 16,349 16 3,805 4
Issued at end of period 38,602,949 $ 38,603 36,272,185 $ 36,272

Capital Surplus
Balance at beginning of period $ 410,276 $ 337,349
Share-based compensation 673 492
Issuance of common shares, net of issuance costs of $4,925 and $0 92,359 69,906
Issuance of restricted shares (68 ) (97 )
Cancellation of restricted shares - 3
Proceeds from exercise of stock options 303 73
Balance at end of period $ 503,543 $ 407,726

Retained Earnings
Balance at beginning of period $ 214,454 $ 152,820
Net income 21,153 12,317
Dividends on common shares (3,713 ) (1,742 )
Balance at end of period $ 231,894 $ 163,395

Accumulated Other Comprehensive Income (Loss),
Net of Tax
Unrealized gains on securities and derivatives:
Balance at beginning of period $ (1,058 ) $ 3,353
Other comprehensive income (loss) during the period (151 ) 3,058
Balance at end of period $ (1,209 ) $ 6,411

Treasury Stock
Balance at beginning of period 1,456,333 $ (13,613 ) 1,413,777 $ (12,388 )
Purchase of treasury shares 17,902 (1,002 ) 20,954 (588 )
Balance at end of period 1,474,235 $ (14,615 ) 1,434,731 $ (12,976 )

Total Shareholders’ Equity $ 758,216 $ 600,828

thousands)



	Three Months Ended March 31, 2018				Three Months Ended March 31, 2017
	Shares	Amount			Shares	Amount
Common Stock
Balance at beginning of period	38,734,873	$	38,735		36,377,807	$	36,378
Issuance of common stock	944,586	944			2,141,072	2,141
Issuance of restricted shares	77,755	78			67,721	68
Proceeds from exercise of stock options	62,704	63			16,349	16
Issued at end of period	39,819,918	$	39,820		38,602,949	$	38,603

Capital Surplus
Balance at beginning of period		$	508,404			$	410,276
Share-based compensation		897				673
Issuance of common shares, net of issuance costs of $0 and $4,925		49,067				92,359
Issuance of restricted shares		(78		)		(68		)
Proceeds from exercise of stock options		750				303
Balance at end of period		$	559,040			$	503,543

Retained Earnings
Balance at beginning of period		$	273,119			$	214,454
Cumulative effect of change in accounting for derivatives		28				—
Reclassification of stranded income tax effects from accumulated other comprehensive income		392				—
Adjusted balance at beginning of period		273,539				214,454
Net income		26,660				21,153
Dividends on common shares		(3,833		)		(3,713		)
Balance at end of period		$	296,366			$	231,894

Accumulated Other Comprehensive Income (Loss), Net of Tax
Unrealized gains (losses) on securities and derivatives:
Balance at beginning of period		$	(1,280	)		$	(1,058	)
Reclassification of stranded income tax effects to retained earnings		(392		)		—
Adjusted balance at beginning of period		(1,672		)		(1,058		)
Other comprehensive income during the period		(9,151		)		(151		)
Balance at end of period		$	(10,823	)		$	(1,209	)

Treasury Stock
Balance at beginning of period	1,474,861	$	(14,499	)	1,456,333	$	(13,613	)
Purchase of treasury shares	17,976	(960		)	17,902	(1,002		)
Balance at end of period	1,492,837	$	(15,459	)	1,474,235	$	(14,615	)

Total Shareholders’ Equity		$	868,944			$	758,216

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

Three Months Ended
March 31,
2017 2016
Operating Activities
Net income $ 21,153 $ 12,317
Adjustments reconciling net income to net cash provided by operating activities:
Depreciation 2,341 2,261
Net losses (gains) on sale or disposal of premises and equipment 295 (77 )
Provision for loan losses 1,836 681
Net losses (gains) on sale of other real estate owned including write-downs (127 ) 1,498
Share-based compensation expense 673 492
Amortization of intangible assets 1,036 1,020
Provision for deferred taxes (580 ) (1,665 )
Net amortization of investment securities available for sale 1,697 1,441
Net gains on securities available for sale - (94 )
Accretion of discount on purchased loans (3,097 ) (4,134 )
Amortization of premium on purchased loan pools 1,148 771
Net accretion of other borrowings (57 ) -
Amortization of subordinated deferrable interest debentures 331 462
Originations of mortgage loans held for sale (311,813 ) (266,587 )
Payments received on mortgage loans held for sale 430 270
Proceeds from sales of mortgage loans held for sale 294,045 279,752
Net gains on sale of mortgage loans held for sale (9,200 ) (11,405 )
Originations of SBA loans (19,003 ) (17,134 )
Proceeds from sales of SBA loans 4,600 13,300
Net gains on sale of SBA loans (1,407 ) (1,086 )
Increase in cash surrender value of BOLI (389 ) (357 )
Changes in FDIC loss-share receivable/payable, net of cash payments received 735 1,805
Change attributable to other operating activities 28,606 719
Net cash provided by (used in) operating activities 13,253 14,250

Investing Activities, net of effects of business combinations
Purchase of securities available for sale (40,145 ) (56,168 )
Proceeds from maturities of securities available for sale 30,119 24,666
Proceeds from sales of securities available for sale - 41,564
Net increase in other investments (642 ) (1,274 )
Net increase in loans, excluding purchased loans (117,681 ) (94,916 )
Payments received on purchased loans 63,061 52,025
Purchases of loan pools - (90,369 )
Payments received on purchased loan pools 38,067 25,827
Purchases of premises and equipment (1,219 ) (3,694 )
Proceeds from sales of premises and equipment - 131
Proceeds from sales of other real estate owned 4,568 4,497
Payments received from (paid to) FDIC under loss-share agreements (559 ) 3,299
Net cash proceeds received (paid) from acquisitions - (7,205 )
Net cash used in investing activities (24,431 ) (101,617 )
(Continued)



	Three Months Ended March 31,
	2018			2017
Operating Activities
Net income	$	26,660		$	21,153
Adjustments reconciling net income to net cash provided by operating activities:
Depreciation	2,274			2,341
Net losses on sale or disposal of premises and equipment including write-downs	583			295
Provision for loan losses	1,801			1,836
Net losses (gains) on sale of other real estate owned including write-downs	33			(127		)
Share-based compensation expense	1,441			673
Amortization of intangible assets	934			1,036
Provision for deferred taxes	2,432			(580		)
Net amortization of investment securities available for sale	1,595			1,697
Net gains on securities available for sale	(37		)	—
Accretion of discount on purchased loans	(1,571		)	(3,097		)
Amortization of premium on purchased loan pools	511			1,148
Net accretion (amortization) on other borrowings	33			(57		)
Amortization of subordinated deferrable interest debentures	331			331
Originations of mortgage loans held for sale	(358,038		)	(311,813		)
Payments received on mortgage loans held for sale	367			430
Proceeds from sales of mortgage loans held for sale	377,748			294,045
Net gains on sale of mortgage loans held for sale	(6,759		)	(9,200		)
Originations of SBA loans	(7,168		)	(19,003		)
Proceeds from sales of SBA loans	10,497			4,600
Net gains on sale of SBA loans	(918		)	(1,407		)
Increase in cash surrender value of bank owned life insurance	(366		)	(389		)
Changes in FDIC loss-share payable, net of cash payments received	785			735
Change attributable to other operating activities	(4,671		)	28,606
Net cash provided by operating activities	48,497			13,253

Investing Activities
Purchases of securities available for sale	(121,865		)	(40,145		)
Proceeds from prepayments and maturities of securities available for sale	33,970			30,119
Proceeds from sales of securities available for sale	36,685			—
Net increase in other investments	(13,809		)	(642		)
Net increase in loans, excluding purchased loans	(134,063		)	(117,681		)
Payments received on purchased loans	43,971			63,061
Payments received on purchased loan pools	16,158			38,067
Purchases of premises and equipment	(1,133		)	(1,219		)
Proceeds from sales of premises and equipment	427			—
Proceeds from sales of other real estate owned	3,106			4,568
Payments paid to FDIC under loss-share agreements	(333		)	(559		)
Net cash proceeds paid in acquisitions	(21,421		)	—
Net cash used in investing activities	(158,307		)	(24,431		)

				(Continued)

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

Three Months Ended
March 31,

2017

2016

Financing Activities, net of effects of business combinations
Net increase (decrease) in deposits $ 67,206 $ (49,863 )
Net decrease in securities sold under agreements to repurchase (13,090 ) (19,844 )
Proceeds from other borrowings 518,755 23,000
Repayment of other borrowings (485,350 ) -
Issuance of common stock 88,656 -
Proceeds from exercise of stock options 319 77
Dividends paid - common stock (3,492 ) (1,742 )
Purchase of treasury shares (1,002 ) (588 )
Net cash provided by (used in) financing activities 172,002 (48,960 )
Net increase (decrease) in cash and cash equivalents 160,824 (136,327 )
Cash and cash equivalents at beginning of period 198,385 390,563
Cash and cash equivalents at end of period $ 359,209 $ 254,236

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest $ 6,348 $ 4,059
Income taxes 18 804
Loans (excluding purchased loans) transferred to other real estate owned 1,657 1,044
Purchased loans transferred to other real estate owned 1,489 1,401
Loans transferred from loans held for sale to loans 45,828 23,118
Loans provided for the sales of other real estate owned 264 585
Assets acquired in business acquisitions - 561,440
Liabilities assumed in business acquisitions - 465,048
Issuance of common stock in acquisitions - 72,455
Issuance of common stock in exchange for equity investment in US Premium Finance Holding Company 5,844 -
Change in unrealized gain (loss) on securities available for sale, net of tax (194 ) 3,673
Change in unrealized gain (loss) on cash flow hedge (interest rate swap), net of tax 43 (615 )
(Concluded)



	Three Months Ended March 31,
	2018			2017
Financing Activities, net of effects of business combinations
Net increase (decrease) in deposits	$	(179,680	)	$	67,206
Net decrease in securities sold under agreements to repurchase	(7,368		)	(13,090		)
Proceeds from other borrowings	455,000			518,755
Repayment of other borrowings	(150,052		)	(485,350		)
Issuance of common stock	—			88,656
Proceeds from exercise of stock options	813			319
Dividends paid - common stock	(3,726		)	(3,492		)
Purchase of treasury shares	(960		)	(1,002		)
Net cash provided by financing activities	114,027			172,002

Net increase in cash and cash equivalents	4,217			160,824
Cash and cash equivalents at beginning of period	330,658			198,385
Cash and cash equivalents at end of period	$	334,875		$	359,209

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	11,602		$	6,348
Income taxes	2			18
Loans (excluding purchased loans) transferred to other real estate owned	1,176			1,657
Purchased loans transferred to other real estate owned	457			1,489
Loans transferred from loans held for sale to loans held for investment	73,374			45,828
Loans transferred from loans held for investment to loans held for sale	2,796			—
Loans provided for the sales of other real estate owned	—			264
Assets acquired in business acquisitions	82,981			—
Liabilities assumed in business acquisitions	5,705			—
Issuance of common stock in acquisitions	50,011			—
Issuance of common stock in exchange for equity investment in US Premium Finance Holding Company	—			5,844
Change in unrealized gain (loss) on securities available for sale, net of tax	(9,432		)	(194		)
Change in unrealized gain (loss) on cash flow hedge, net of tax	281			43

				(Concluded)

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

March 31, ~~2017~~

2018

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Nature of Business

Ameris Bancorp (the “Company” or “Ameris”) is a financial holding company headquartered in Moultrie, Georgia. Ameris conducts substantially all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At March 31, ~~2017,~~2018, the Bank operated 97 branches in select markets in Georgia, Alabama, Florida 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 for complete financial statement presentation. The interim consolidated financial statements included herein are unaudited but reflect all adjustments (consisting of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the period ended March 31, ~~2017~~2018 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto and the report of our registered independent public accounting firm included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

~~Accounting Policy Update~~

~~Other Investments~~ –~~Other investments~~2017.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include ~~Federal Home Loan~~cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits in banks and federal funds sold. The Bank ~~(“FHLB”) stock,~~is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank ~~stock~~of Atlanta. The reserve requirement as of March 31, 2018 and ~~a minority equity investment~~December 31, 2017 was $46.0 million and $44.1 million, respectively, and was met by cash on hand which is reported on the Company's consolidated balance sheet in ~~US Premium Finance Holding Company, a Florida corporation (“USPF”). These investments do not have readily determinable fair values~~cash and are carried at cost. They are periodically reviewed for impairment based on ultimate recovery of par value or cost basis. Both stock and cash dividends are reported as income. For additional information regarding the Company’s minority equity investment in USPF, see Note 3.

due from banks.

Reclassifications

Certain reclassifications of prior year amounts have been made to conform with the current year presentations.

Accounting Standards Adopted in ~~2017~~

2018

ASU ~~2016-09 –~~~~Improvements~~2018-02 - Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"). Issued in February 2018, ASU 2018-02 seeks to ~~Employee Share-Based Payment Accounting (“~~help entities reclassify certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 (the "Tax Reform Act"), enacted on December 22, 2017. ASU ~~2016-09”)~~2018-02 was issued in response to concerns regarding current accounting guidance that requires deferred tax assets and deferred tax liabilities to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date, even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income, rather than net income, and as a result the stranded tax effects would not reflect the appropriate tax rate. The amendments of ASU 2018-02 allow an entity to make a reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects, which is the difference between the historical corporate income tax rate of 35.0% and the newly enacted corporate income tax rate of 21.0%. ASU ~~2016-09 simplifies various aspects~~2018-02 is effective for fiscal years, and interim periods within those years, beginning after December 31, 2018; however, public business entities are allowed to early adopt the amendments of ~~how share-based payments are accounted~~ASU 2018-02 in any interim period for ~~and presented in~~which the financial ~~statements. Under~~statements have not yet been issued. The amendments of ASU ~~2016-09, companies will record all excess tax benefits and tax deficiencies as income tax expense or benefit in~~2018-02 may be applied either at the income statement and will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital. The standard eliminates the requirement that excess tax benefits be realized before companies can recognize them. The excess tax benefits will be reported as an operating activity on the statement of cash flows, and the cash paid to a tax authority when shares are withheld to satisfy a company’s statutory income tax withholding obligation will be reported as a financing activity on its statement of cash. In addition, the standard increases the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. ASU 2016-09 permits companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as required today, or recognized when they occur. The Company has elected to recognize forfeitures as they occur. ASU 2016-09 became effective on January 1, 2017 and did not have a material impact on the consolidated financial statements.

~~Accounting Standards Pending Adoption~~

~~ASU 2017-08 –~~~~“Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities~~ (“ASU 2017-08”). ASU 2017-08 shortens the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. Under the current guidance, entities generally amortize the premium on a callable debt security as an adjustment of yield over the contractual life (to maturity date)beginning of the ~~instrument.~~period (annual or interim) of adoption or retrospectively~~This ASU does not require any accounting~~

to each of the period(s) in which the effect of the change in the ~~accounting for debt securities held at~~U.S. federal corporate tax rate in the Tax Reform Act is recognized. As a ~~discount; the discount continues to be amortized as an adjustment of yield over the contractual life (to maturity)~~result of the ~~instrument.~~remeasurement of the Company's deferred tax assets and deferred tax liabilities following the enactment of the Tax Reform Act, accumulated other comprehensive loss included $392,000 of stranded tax effects at December 31, 2017. The Company early adopted ASU ~~2017-08~~2018-02 during the first quarter of 2018 and made an election to reclassify the stranded tax effects from accumulated other comprehensive loss to retaining earnings at the beginning of the period of adoption. The reclassification of the stranded tax effects resulted in an increase of $392,000 in accumulated other comprehensive loss and a corresponding increase of $392,000 in retained earnings.

ASU 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"). The purposes of ASU 2017-12 are to (1) improve the transparency and understandability of information conveyed in financial statements about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with the economic objectives of those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers. ASU 2017-12 is effective for interim and annual reporting periods beginning after December 15, ~~2018. Early~~2018 with early adoption isin an interim period permitted. ~~Upon adoption,~~ ASU ~~2017-08 provides for~~2017-12 requires a modified retrospective transition ~~by means~~method in which the Company will recognize the cumulative effect of ~~a cumulative-effect adjustment to~~the change on the opening balance of each affected component of equity in the statement of financial position as of the beginning of the ~~period in which~~fiscal year of adoption. During the ~~guidance is adopted. The~~first quarter of 2018, the Company ~~is currently evaluating~~early adopted the provisions of ASU ~~2017-08 to determine~~2017-12, and the ~~potential~~adoption did not have a material impact ~~the new standard will have~~ on the ~~Company’s~~Company's consolidated financial statements.

~~results~~ASU 2017-09 – Compensation – Stock Compensation (Topic 718): Scope of ~~operations,~~Modification Accounting (“ASU 2017-09”). ASU 2017-09 clarifies when changes to the terms of a share-based award must be accounted for as a modification. Companies must apply the modification accounting guidance if any of the following change: the share-based award’s fair value, vesting provisions or classification as an equity instrument or a liability instrument. The new guidance should reduce diversity in practice and result in fewer changes to the terms of share-based awards being accounted for as modifications, as the guidance will allow companies to make certain non-substantive changes to share-based awards without accounting for them as modifications. ASU 2017-09 is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. During the first quarter of 2018, the Company adopted the provisions of ASU 2017-09, and the adoption did not have a material impact on the Company's consolidated financial ~~position~~statements.

ASU 2017-01 – Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 provides a framework to use in determining when a set of assets and ~~disclosures.~~activities is a business. The standard provides more consistency in applying the business combination guidance, reduces the costs of application, and makes the definition of a business more operable. ASU 2017-01 is effective for interim and annual periods within those annual periods beginning after December 15, 2017. During the first quarter of 2018, the Company adopted the provisions of ASU 2017-01, and the adoption did not have a material impact on the Company's consolidated financial statements.

ASU 2016-01 –

Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"). ASU 2016-01 (1) requires equity investments that do not result in consolidation and are not accounted for under the equity method to be measured at fair value with changes recognized through net income; (2) simplifies the impairment assessment of equity investments without readily determinable fair values by allowing a qualitative assessment similar to those performed on long-lived assets, goodwill or intangibles to be utilized at each reporting period; (3) eliminates the use of the entry price method requiring all preparers to utilize the exit price notion consistent with Topic 820, Fair Value Measurement in disclosing the fair value of financial instruments measured at amortized cost; (4) requires separate disclosure within other comprehensive income of changes in the fair value of liabilities due to instrument-specific credit risk when the fair value option has been elected; and (5) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. ASU 2016-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods. During the first quarter of 2018, the Company adopted ASU 2016-01. Other than changing from the entry price method to an exit price notion in disclosing fair value of financial instruments at amortized cost, the adoption did not have a material impact on the Company's consolidated financial statements.

ASU 2014-09 – Revenue from Contracts with Customers (“ASU 2014-09”). On January 1, 2018, the Company adopted ASU 2014-09 and all subsequent amendments to the ASU (collectively "ASC 606") which (1) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (2) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as other real estate owned ("OREO"). The majority of the Company's revenues come from interest income and other sources, including loans, leases, investment securities and derivative financial instruments, that are outside the scope of ASC 606. With the exception of gains/losses on the sale of OREO, the Company's services that fall within the scope of ASC 606 are presented within noninterest income and are recognized as revenue as the Company satisfies its obligations to the customer. Services within the scope of ASC 606 reported in noninterest income include service charges on deposit accounts, debit card interchange fees, and ATM fees. The net of gains and losses on the sale of OREO are recorded in credit resolution

related expenses in the Company's consolidated statement of income and comprehensive income. The adoption of ASC 606 did not change the timing or amount of revenue recognized for in-scope revenue streams. Accordingly, no cumulative effect adjustment was recorded under the modified retrospective transition method. See Note 15 for further discussion on the Company's accounting policies for revenue sources with the scope of ASC 606.

Accounting Standards Pending Adoption

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

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

ASU 2016-13- – Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace the current incurred loss approach with an expected loss model, referred to as the current expected credit loss (“CECL”) model. The new standard will apply to financial assets subject to credit losses and measured at amortized cost and certain off-balance-sheet credit exposures, which include, but are not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. ASU 2016-13 simplifies the accounting for purchased credit-impaired debt securities and loans and expands the disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Upon adoption, ASU 2016-13 provides for a modified retrospective transition by means of a ~~cumulative-effect~~cumulative effect adjustment to equity as of the beginning of the period in which the guidance is effective. While the Company is currently evaluating the impact this standard will have on the results of operations, financial position and disclosures, the Company expects to recognize a one-time cumulative effect adjustment to equity and the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective. The Company has established a steering committee which includes the appropriate members of management to evaluate the impact this ASU will have on Company’s financial position, results of operations and financial statement disclosures and determine the most appropriate method of implementing the amendments in this ASU as well as any resources needed to implement the amendments.

This committee has identified the software vendor of choice for implementation, established an implementation timeline and continues to stay current on implementation issues and concerns.

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

~~ASU~~ ~~2014-09 –~~~~Revenue from Contracts with Customers~~

NOTE 2. PENDING ACQUISITIONS

Hamilton State Bancshares, Inc.

On January 25, 2018, the Company and Hamilton State Bancshares, Inc., a Georgia corporation (“~~ASU 2014-09”~~Hamilton”)~~. ASU 2014-09 provides guidance that~~, entered into an ~~entity should recognize revenue to depict the transfer~~Agreement and Plan of ~~promised goods or services to customers in an amount that reflects the consideration~~Merger (the "Hamilton Merger Agreement") pursuant to which Hamilton will merge into Ameris, with Ameris as the surviving entity ~~expects to~~and immediately thereafter, Hamilton State Bank, a Georgia bank wholly owned by Hamilton, will be ~~entitled~~merged into Ameris Bank, with Ameris Bank as the surviving entity. Hamilton State Bank operates 28 full-service banking locations, 24 of which are located in ~~exchange~~the Atlanta, Georgia MSA, two of which are located in the Gainesville, Georgia MSA, and two of which are located just outside the Atlanta, Georgia MSA. Under the terms of the Hamilton Merger Agreement, Hamilton's shareholders will receive $0.93 in cash and 0.16 shares of Ameris common stock for ~~those goods or services. ASU 2014-09~~each share of Hamilton common stock they hold. The estimated purchase price is ~~effective prospectively, for annual and interim periods, beginning after December 15, 2017. The Company is currently evaluating~~$405.7 million in the ~~impact this standard will have on~~aggregate based upon the $53.45 per share closing price of the Company’s ~~results~~common stock as of ~~operations, financial position~~January 25, 2018. The merger is subject to customary closing conditions, including the receipt of regulatory approvals and ~~disclosures, but it~~the approval of Hamilton's shareholders. The transaction is ~~not~~ expected to close during the third quarter of 2018. As of December 31, 2017, Hamilton reported assets of $1.79 billion, gross loans of $1.30 billion and deposits of $1.55 billion. The purchase price will be allocated among the net assets of Hamilton acquired as appropriate, with the remaining balance being reported as goodwill.

Atlantic Coast Financial Corporation

On November 16, 2017, the Company and Atlantic Coast Financial Corporation, a Maryland corporation (“Atlantic”), entered into an Agreement and Plan of Merger (the "Atlantic Merger Agreement") pursuant to which Atlantic will merge into Ameris, with Ameris as the surviving entity and immediately thereafter, Atlantic Coast Bank, a Florida bank wholly owned by Atlantic, will be merged into Ameris Bank, with Ameris Bank as the surviving entity. Atlantic Coast Bank operates 12 full-service banking locations, eight of which are located in the Jacksonville, Florida MSA, three of which are located in the Waycross, Georgia MSA, and one of which is located in the Douglas, Georgia MSA. Under the terms of the Atlantic Merger Agreement, Atlantic's stockholders will receive $1.39 in cash and 0.17 shares of Ameris common stock for each share of Atlantic common stock they hold. The estimated purchase price is $145.0 million in the aggregate based upon the $47.30 per share closing price of the Company’s common stock as of November 16, 2017. All regulatory and stockholder approvals required for the merger have ~~a material impact.~~

been received, and the transaction is expected to close in May 2018. As of December 31, 2017, Atlantic reported assets of $983.3 million, gross loans of $851.4 million and deposits of $675.8 million. The purchase price will be allocated among the net assets of Atlantic acquired as appropriate, with the remaining balance being reported as goodwill.

NOTE 23 – BUSINESS ~~COMBINATIONS~~

~~Jacksonville Bancorp, Inc.~~

COMBINATION

US Premium Finance Holding Company

On ~~March 11, 2016,~~January 31, 2018, the Company ~~completed~~closed on the purchase of the final 70% of the outstanding shares of common stock of US Premium Finance Holding Company, a Florida corporation ("USPF"), completing its acquisition of ~~Jacksonville Bancorp, Inc. (“JAXB”),~~USPF and making USPF a ~~bank holding company headquartered in Jacksonville, Florida. Upon consummation~~wholly owned subsidiary of the Company. Through a series of three acquisition ~~JAXB was merged with~~transactions that closed on January 18, 2017, January 3, 2018 and ~~into~~January 31, 2018, the Company with Ameris as the surviving entity in the merger. At that time, JAXB’s wholly owned banking subsidiary, The Jacksonville Bank (“Jacksonville Bank”), was also merged with and into the Bank. The acquisition expanded the Company’s existing market presence, as Jacksonville Bank hadissued a total of ~~eight full-service branches located in Jacksonville and Jacksonville Beach, Duval County, Florida. Under the terms of the merger, JAXB’s common shareholders received 0.5861~~1,073,158 shares of ~~Ameris~~its common stock ~~or $16.50 in cash for each share of JAXB common stock or nonvoting common stock they previously held, subject to the total consideration being allocated 75% stock and 25% cash. As a result, the Company issued 2,549,469 common shares~~ at a fair value of ~~$72.5~~$55.9 million and paid ~~$23.9~~$21.4 million in cash to the former shareholders of ~~JAXB.~~

USPF. Pursuant to the terms of the Stock Purchase Agreement dated January 25, 2018 under which Company purchased the final 70% of the outstanding shares of common stock of USPF, the selling shareholders of USPF may receive additional cash payments aggregating up to $5.8 million based on the achievement by the Company's premium finance division of certain income targets between January 1, 2018 and June 30, 2019. The present value of the contingent earn-out consideration expected to be paid is $5.7 million. Including the fair value of the Company's common stock issued, cash paid and the present value of the contingent earn-out consideration expected to be paid, the aggregate purchase price of USPF amounted to $83.0 million.

The acquisition of ~~JAXB was~~USPF will be accounted for using the acquisition method of accounting in accordance with ~~FASB~~ ASC 805,Business Combinations. ~~Assets~~Under the acquisition method of accounting, assets acquired, liabilities assumed and consideration exchanged ~~were~~are recorded at their respective acquisition date fair values. Any identifiable intangible assets that are acquired in a business combination are recognized at fair value on the acquisition date. Identifiable intangible assets are recognized separately if they arise from contractual or other legal rights or if they are separable (i.e., capable of being sold, transferred, licensed, rented or exchanged separately from the entity). If the consideration given exceeds the fair value of the net assets received, goodwill is recognized. Determining the fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are ~~preliminary and~~ subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available. During the third and fourth quarters of 2016, management revised its initial estimates regarding the valuation of loans, other real estate owned, premises and equipment, core deposit intangible and other assets acquired. In addition, management ~~assessed~~

will assess and ~~recorded~~record the deferred tax assets and deferred tax liabilities resulting from differences in the carrying ~~values~~value of acquired assets and assumed liabilities for financial reporting purposes and their basis for income tax purposes. ~~This estimate also reflects acquired net operating loss carryforwards and other acquired assets with built-in losses that are expected~~

Prior to ~~be settled or otherwise recovered in future periods where~~ the ~~realization of such benefits would be subject to applicable limitations under Section 382~~January 31, 2018 completion of the ~~Internal Revenue Code~~acquisition, the Company's 30% investment in USPF was carried at its $23.9 million original cost basis. Once the acquisition was completed, the $83.0 million aggregate purchase price equaled the fair value of ~~1986,~~USPF which was determined utilizing the incremental projected earnings. Accordingly, no gain or loss was recorded by the Company in the consolidated statement of income and comprehensive income as ~~amended.~~

a result of remeasuring to fair value the prior minority equity investment in USPF held by the Company immediately before the business combination was completed.

~~The following table presents~~

Prior to January 31, 2018, USPF was a private entity and the information necessary to complete the initial accounting for the business combination is incomplete at this time. Management has not yet finalized its determination of the fair value of the assets acquired and liabilities assumed ~~of JAXB~~in the USPF acquisition. Accordingly, as of March ~~11, 2016 and their fair value estimates.~~

(dollars in thousands) As Recorded
by
JAXB Initial Fair
Value
Adjustments Subsequent Fair
Value
Adjustments As Recorded
by Ameris
Assets
Cash and cash equivalents $ 9,704 $ - $ - $ 9,704
Federal funds sold and interest-bearing balances 7,027 - - 7,027
Investment securities 60,836 (942 )(a) - 59,894
Other investments 2,458 - - 2,458
Loans 416,831 (15,746 )(b) 553 (j) 401,638
Allowance for loan losses (12,613 ) 12,613 (c) - -
Loans, net 404,218 (3,133 ) 553 401,638
Other real estate owned 2,873 (1,035 )(d) 88 (k) 1,926
Premises and equipment 4,798 - (119 )(l) 4,679
Intangible assets 288 5,566 (e) (1,108 )(m) 4,746
Other assets 14,141 23,266 (f) (3,524 )(n) 33,883
Total assets $ 506,343 $ 23,722 $ (4,110 ) $ 525,955
Liabilities
Deposits:
Noninterest-bearing $ 123,399 $ - $ - $ 123,399
Interest-bearing 277,539 421 (g) - 277,960
Total deposits 400,938 421 - 401,359
Other borrowings 48,350 84 (h) - 48,434
Subordinated deferrable interest debentures 16,294 (3,393 )(i) - 12,901
Other liabilities 2,354 - - 2,354
Total liabilities 467,936 (2,888 ) - 465,048
Net identifiable assets acquired over (under) liabilities assumed 38,407 26,610 (4,110 ) 60,907
Goodwill - 31,375 4,110 35,485
Net assets acquired over (under) liabilities assumed $ 38,407 $ 57,985 $ - $ 96,392
Consideration:
Ameris common shares issued 2,549,469
Price per share of the Company’s common stock $ 28.42
Company common stock issued $ 72,455
Cash exchanged for shares $ 23,937
Fair value of total consideration transferred $ 96,392

~~Explanation of fair value adjustments~~

~~(a)~~

~~Adjustment reflects the fair value adjustments of the portfolio of securities available for sale as of the acquisition date.~~

~~(b)~~

Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired loan portfolio, net of the reversal of JAXB remaining fair value adjustments from their prior acquisitions.

~~(c)~~

~~Adjustment reflects the elimination of JAXB’s allowance for loan losses.~~

~~(d)~~

~~Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired OREO portfolio, which is based largely on contracted sale prices.~~

~~(e)~~

~~Adjustment reflects the recording of core deposit intangible on the acquired core deposit accounts.~~

~~(f)~~

Adjustment reflects the deferred taxes on the difference in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes and the reversal of JAXB valuation allowance established on their deferred tax assets.

~~(g)~~

~~Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired deposits.~~

~~(h)~~

~~Adjustment reflects the fair value adjustments based on the Company’s evaluation of the liability for other borrowings.~~

~~(i)~~

Adjustment reflects the fair value adjustment to the subordinated deferrable interest debentures at the acquisition date, net of the reversal of JAXB remaining fair value adjustments from their prior acquisitions.

~~(j)~~

~~Adjustment reflects additional recording of fair value adjustment of the acquired loan portfolio.~~

~~(k)~~

~~Adjustment reflects additional recording of fair value adjustment of other real estate owned.~~

~~(l)~~

~~Adjustment reflects recording of fair value adjustment of the premises and equipment.~~

~~(m)~~

~~Adjustment reflects adjustment to the core deposit intangible on the acquired core deposit accounts.~~

~~(n)~~

Adjustment reflects additional recording of deferred taxes on the difference in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes.

~~Goodwill of $35.5~~31, 2018, the entire $83.0 million ~~which is the excess of the~~ purchase price ~~over~~is reflected as goodwill in the Company's consolidated balance sheet, pending finalization of the fair value of ~~net~~the assets acquired ~~was recorded~~and liabilities assumed. The assets acquired are expected to include identifiable intangible assets related to insurance agent relationships that refer insurance premium finance loans to USPF, customer relationships that result in repeat premium finance loans for insurance policy renewals, the ~~JAXB acquisition~~US Premium Finance trade name and ~~is the result of expected operational synergies and other factors. This~~a non-compete agreement with a former USPF shareholder. The goodwill is not expected to be deductible for tax purposes.

In the acquisition, the Company purchased $401.6 million of loans at fair value, net of $15.2 million, or 3.64%, estimated discount to the outstanding principal balance. Of the total loans acquired, management identified $27.0 million that were considered to be credit impaired and are accounted for under ASC Topic 310-30. The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and fair value of the loans as of acquisition date for~~purchased credit impaired loans. Contractually required principal and interest payments have been adjusted for estimatedprepayments.~~

(dollars in thousands)
Contractually required principal and interest $ 42,314
Non-accretable difference (9,181 )
Cash flows expected to be collected 33,133
Accretable yield (6,182 )
Total purchased credit-impaired loans acquired $ 26,951

~~The following table presents the acquired loan data for the JAXB acquisition.~~

(dollars in thousands) Fair Value of
Acquired Loans at
Acquisition Date Gross
Contractual
Amounts
Receivable at
Acquisition
Date Best Estimate
at Acquisition
Date of
Contractual
Cash Flows
Not Expected
to be Collected
Acquired receivables subject to ASC 310-30 $ 26,951 $ 42,314 $ 9,181
Acquired receivables not subject to ASC 310-30 $ 374,687 $ 488,346 $ -

The results of operations of ~~JAXB~~USPF subsequent to its acquisition date are included in the Company’s consolidated statements of income and comprehensive income. The following unaudited pro forma information reflects the Company’s estimated consolidated results of operations as if the ~~acquisition~~acquisitions had occurred on January 1, ~~2016,~~2017, unadjusted for potential cost savings. ~~Since the JAXB acquisition was completed March 11, 2016, the 2017 information was not impacted by any pro forma adjustments.~~

Three Months Ended
March 31,
(dollars in thousands, except per share data)
2017

2016

Net interest income and noninterest income $ 86,296 $ 78,798
Net income $ 21,153 $ 13,052
Net income available to common shareholders $ 21,153 $ 13,052
Income per common share available to common shareholders – basic $ 0.59 $ 0.38
Income per common share available to common shareholders – diluted $ 0.59 $ 0.37
Average number of shares outstanding, basic 35,664 34,741
Average number of shares outstanding, diluted 36,040 35,043

~~A rollforward of all purchased loans, including loans purchased as part of the JAXB acquisition, for the three months ended March 31, 2017 and 2016 is shown below:~~

(dollars in thousands) March 31,
2017 March 31,
2016
Balance, January 1 $ 1,069,191 $ 909,083
Charge-offs, net of recoveries (803 ) (678 )
Additions due to acquisitions - 401,085
Accretion 3,097 4,134
Transfers to purchased other real estate owned (1,489 ) (1,401 )
Payments received (63,061 ) (52,025 )
Ending balance $ 1,006,935 $ 1,260,198

The following is a summary of changes in the accretable discounts of all purchased loans, including loans purchased as part of the JAXB acquisition, during the three months ended March 31, 2017 and 2016:

(dollars in thousands)
March 31,
2017

March 31,
2016

Balance, January 1 $ 30,624 $ 33,848
Additions due to acquisitions - 9,991
Accretion (3,097 ) (4,134 )
Accretable discounts removed due to charge-offs (13 ) 355
Transfers between non-accretable and accretable discounts, net (659 ) 353
Ending balance $ 26,855 $ 40,413

~~NOTE 3 – INVESTMENT IN US PREMIUM FINANCE HOLDING COMPANY~~

On December 15, 2016, the Bank entered into a Management and License Agreement with William J. Villari and USPF pursuant to which Mr. Villari will manage a division of the Bank to be operated under the name “US Premium Finance” and which is to be engaged in the business of soliciting, originating, servicing, administering and collecting loans made for purposes of funding insurance premiums and other loans made to persons engaged in the insurance business.

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

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

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

Because USPF does not have a readily determinable fair value and Ameris does not exercise significant influence over USPF, the investment is carried at cost and is included in other investments in the Company’s consolidated balance sheet. The net carrying value of the Company’s investment in USPF was $5.8 million as of March 31, 2017.



	Three Months Ended March 31,
(dollars in thousands, except per share data; shares in thousands)	2018		2017
Net interest income and noninterest income	$	95,265	$	86,296
Net income	$	26,876	$	22,174
Net income available to common shareholders	$	26,876	$	22,174
Income per common share available to common shareholders – basic	$	0.70	$	0.61
Income per common share available to common shareholders – diluted	$	0.70	$	0.60
Average number of shares outstanding, basic	38,246		36,633
Average number of shares outstanding, diluted	38,529		37,009

NOTE 4 – INVESTMENT SECURITIES

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

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

(dollars in thousands) Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair
Value

March 31, 2017
U.S. government sponsored agencies $ 999 $ 16 $ - $ 1,015
State, county and municipal securities 147,109 2,762 (315 ) 149,556
Corporate debt securities 44,801 372 (271 ) 44,902
Mortgage-backed securities 640,055 2,094 (6,857 ) 635,292
Total debt securities $ 832,964 $ 5,244 $ (7,443 ) $ 830,765

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



(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
March 31, 2018
State, county and municipal securities	105,821		987		(534		)	106,274
Corporate debt securities	57,134		598		(635		)	57,097
Mortgage-backed securities	699,990		456		(15,232		)	685,214
Total debt securities	$	862,945	$	2,041	$	(16,401	)	$	848,585

December 31, 2017
State, county and municipal securities	135,968		1,989		(163		)	137,794
Corporate debt securities	46,659		721		(237		)	47,143
Mortgage-backed securities	630,666		1,762		(6,492		)	625,936
Total debt securities	$	813,293	$	4,472	$	(6,892	)	$	810,873

The amortized cost and estimated fair value of ~~available-for-sale~~available for sale securities at March 31, ~~2017~~2018 by contractual maturity are summarized in the table below. Expected maturities for mortgage-backed securities may differ from contractual maturities because in certain cases borrowers can prepay obligations without prepayment penalties. Therefore, these securities are not included in the following maturity summary.

(dollars in thousands) Amortized
Cost Estimated
Fair
Value
Due in one year or less $ 9,947 $ 10,075
Due from one year to five years 63,050 63,720
Due from five to ten years 65,834 67,069
Due after ten years 54,078 54,609
Mortgage-backed securities 640,055 635,292
$ 832,964 $ 830,765



(dollars in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	$	11,606	$	11,643
Due from one year to five years	46,869		46,432
Due from five to ten years	64,190		64,842
Due after ten years	40,290		40,454
Mortgage-backed securities	699,990		685,214
	$	862,945	$	848,585

Securities with a carrying value of approximately ~~$495.5~~$368.3 million serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other purposes required or permitted by law at March 31, ~~2017,~~2018, compared with ~~$618.2~~$403.3 million at December 31, ~~2016.~~

2017.

The following table details the gross unrealized losses and estimated fair value of securities aggregated by category and duration of continuous unrealized loss position at March 31, ~~2017~~2018 and December 31, ~~2016.~~

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

March 31, 2017
U.S. government sponsored agencies $ - $ - $ - $ - $ - $ -
State, county and municipal securities 38,520 (315 ) - - 38,520 (315 )
Corporate debt securities 18,430 (263 ) 492 (8 ) 18,922 (271 )
Mortgage-backed securities 435,815 (6,503 ) 11,138 (354 ) 446,953 (6,857 )
Total debt securities $ 492,765 $ (7,081 ) $ 11,630 $ (362 ) $ 504,395 $ (7,443 )

December 31, 2016
U.S. government sponsored agencies $ - $ - $ - $ - $ - $ -
State, county and municipal securities 47,647 (469 ) - - 47,647 (469 )
Corporate debt securities 18,377 (363 ) 493 (7 ) 18,870 (370 )
Mortgage-backed securities 414,300 (6,177 ) 11,791 (377 ) 426,091 (6,554 )
Total debt securities $ 480,324 $ (7,009 ) $ 12,284 $ (384 ) $ 492,608 $ (7,393 )

2017.



	Less Than 12 Months					12 Months or More					Total
(dollars in thousands)	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
March 31, 2018
State, county and municipal securities	54,182		(448		)	4,662		(86		)	58,844		(534		)
Corporate debt securities	492		(126		)	18,501		(509		)	18,993		(635		)
Mortgage-backed securities	422,035		(8,322		)	172,548		(6,910		)	594,583		(15,232		)
Total debt securities	$	476,709	$	(8,896	)	$	195,711	$	(7,505	)	$	672,420	$	(16,401	)

December 31, 2017
State, county and municipal securities	33,976		(115		)	4,725		(48		)	38,701		(163		)
Corporate debt securities	3,465		(35		)	18,853		(202		)	22,318		(237		)
Mortgage-backed securities	262,353		(2,401		)	190,368		(4,091		)	452,721		(6,492		)
Total debt securities	$	299,794	$	(2,551	)	$	213,946	$	(4,341	)	$	513,740	$	(6,892	)

As of March 31, ~~2017,~~2018, the Company’s securities portfolio consisted of ~~423~~390 securities, ~~192~~277 of which were in an unrealized loss position. The majority of unrealized losses are related to the Company’s mortgage-backed securities, as discussed below.

At March 31, ~~2017,~~2018, the Company held ~~161~~226 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed

securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at March 31, ~~2017.~~

2018.

At March 31, ~~2017,~~2018, the Company held 2241 state, county and municipal securities and ~~nine~~10 corporate debt securities that were in an unrealized loss position. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at March 31, ~~2017.~~

2018.

The Company’s investments in ~~subordinated~~corporate 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 March 31, ~~2017~~2018 or December 31, ~~2016.~~

2017.

Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. While the majority of the unrealized losses on debt securities relate to changes in interest rates, corporate debt securities have also been affected by reduced levels of liquidity and higher risk premiums. Occasionally, management engages independent third parties to evaluate the Company’s position in certain corporate debt securities to aid management and the ALCO Committee in its determination regarding the status of impairment. The Company believes that each investment poses minimal credit risk and further, that the Company does not intend to sell these investment securities at an unrealized loss position at March 31, ~~2017,~~2018, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Therefore, at March 31, ~~2017,~~2018, these investments are not considered impaired on an other-than-temporary basis.

At March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.

The following table is a summary of sales activities in the Company’s investment securities available for sale for the three months ended March 31, ~~2017~~2018 and ~~2016:~~

(dollars in thousands)
March 31,
2017

March 31,
2016

Gross gains on sales of securities $ - $ 312
Gross losses on sales of securities - (218 )
Net realized gains on sales of securities available for sale $ - $ 94
Sales proceeds $ - $ 41,564

2017:



(dollars in thousands)	March 31, 2018			March 31, 2017
Gross gains on sales of securities	$	332		$	—
Gross losses on sales of securities	(295		)	—
Net realized gains on sales of securities available for sale	$	37		$	—

Sales proceeds	$	36,685		$	—

NOTE 5 – LOANS

The Bank engages in a full complement of lending activities, including real estate-related loans, agriculture-related loans, commercial and financial loans and consumer installment loans within select markets in Georgia, Alabama, Florida and South Carolina. The Bank purchased residential mortgage loan pools during 2015 and 2016 collateralized by properties located outside our Southeast markets, specifically in California, Washington and Illinois. During the third quarter of 2016, the Bank began purchasing from an unrelated third ~~party~~parties consumer installment home improvement loans made to borrowers throughout the United States. As of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the net carrying value of these consumer installment home improvement loans was approximately ~~$80.0~~$280.3 million and ~~$60.8~~$273.7 million, ~~respectively.~~respectively, and such loans are reported in the consumer installment loan category. During the fourth quarter of 2016, the Bank purchased a pool of commercial insurance premium finance loans made to borrowers throughout the United States and began to originate, administer and service these types of loans. As of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the net carrying value of commercial insurance premium loans was approximately ~~$425.9~~$501.9 million and ~~$353.9~~$482.5 million, respectively, and such loans are reported in the commercial, financial and agricultural loan category.

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

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

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

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

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

(dollars in thousands) March 31,
2017 December 31,
2016
Commercial, financial and agricultural $ 1,061,599 $ 967,138
Real estate – construction and development 415,029 363,045
Real estate – commercial and farmland 1,458,110 1,406,219
Real estate – residential 726,795 781,018
Consumer installment 115,919 96,915
Other 8,028 12,486
$ 3,785,480 $ 3,626,821



(dollars in thousands)	March 31, 2018		December 31, 2017
Commercial, financial and agricultural	$	1,387,437	$	1,362,508
Real estate – construction and development	631,504		624,595
Real estate – commercial and farmland	1,636,654		1,535,439
Real estate – residential	1,080,028		1,009,461
Consumer installment	316,363		324,511
	$	5,051,986	$	4,856,514

Purchased loans are defined as loans that were acquired in bank acquisitions including those that are covered by a loss-sharing agreement with the Federal Deposit Insurance Corporation (the “FDIC”). Purchased loans totaling ~~$1.01 billion~~$818.6 million and ~~$1.07 billion~~$861.6 million at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, are not included in the above schedule.

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

(dollars in thousands) March 31,
2017 December 31,
2016
Commercial, financial and agricultural $ 89,897 $ 96,537
Real estate – construction and development 82,378 81,368
Real estate – commercial and farmland 538,046 576,355
Real estate – residential 292,911 310,277
Consumer installment 3,703 4,654
$ 1,006,935 $ 1,069,191



(dollars in thousands)	March 31, 2018		December 31, 2017
Commercial, financial and agricultural	$	64,612	$	74,378
Real estate – construction and development	48,940		65,513
Real estate – commercial and farmland	465,870		468,246
Real estate – residential	236,453		250,539
Consumer installment	2,712		2,919
	$	818,587	$	861,595

A rollforward of purchased loans for the three months ended March 31, 2018 and 2017 is shown below:



(dollars in thousands)	March 31, 2018			March 31, 2017
Balance, January 1	$	861,595		$	1,069,191
Charge-offs, net of recoveries	(151		)	(803		)
Accretion	1,571			3,097
Transfers to purchased other real estate owned	(457		)	(1,489		)
Payments received	(43,971		)	(63,061		)
Ending balance	$	818,587		$	1,006,935

The following is a summary of changes in the accretable discounts of purchased loans during the three months ended March 31, 2018 and 2017:



(dollars in thousands)	March 31, 2018			March 31, 2017
Balance, January 1	$	20,192		$	30,624
Accretion	(1,571		)	(3,097		)
Accretable discounts removed due to charge-offs	—			(13		)
Transfers between non-accretable and accretable discounts, net	146			(659		)
Ending balance	$	18,767		$	26,855

Purchased loan pools are defined as groups of residential mortgage loans that were not acquired in bank acquisitions or FDIC-assisted transactions. As of March 31, ~~2017,~~2018, purchased loan pools totaled ~~$529.1~~$319.6 million and consisted of whole-loan ~~adjustable rate~~ residential mortgages on properties outside the Company’s markets, with principal balances totaling ~~$521.3~~$316.2 million and ~~$7.8~~$3.4 million of remaining purchase premium paid at acquisition. As of December 31, ~~2016,~~2017, purchased loan pools totaled ~~$568.3~~$328.2 million ~~and consisted of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets,~~ with principal balances totaling ~~$559.4~~$324.4 million and ~~$8.9~~$3.8 million of remaining purchase premium paid at acquisition. At March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, one loan in the purchased loan pools with a principal balance of ~~$918,000~~$902,000 and ~~$925,000,~~$904,000, respectively, was classified as a troubled debt restructuring and risk-rated grade ~~40,~~7, while all other loans included in the purchased loan pools were performing current loans risk-rated grade ~~20.~~3. During the second quarter of 2017, this troubled debt restructuring defaulted on its restructured terms and was placed on nonaccrual status. During the fourth quarter of 2017, this troubled debt restructuring was returned to accrual status. At March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company had allocated ~~$2.1~~$1.0 million and ~~$1.8~~$1.1 million, respectively, of allowance for loan losses for the purchased loan pools. As part of the due diligence process prior to purchasing an individual mortgage pool, a complete re-underwrite of the individual loan files was conducted. The underwriting process included a review of all income, asset, credit and property related documentation that was used to originate the loan. Underwriters utilized the originating lender’s program guidelines, as well as general prudent mortgage lending standards, to assess each individual loan file. Additional research was conducted to assess the real estate market conditions and market expectations in the geographic areas where a collateral concentration existed. As part of this review, an automated valuation model was employed to provide current collateral valuations and to support individual loan-to-value ratios. Additionally, a sample of site inspections was completed to provide further assurance. The results of the due diligence review were evaluated by officers of the Company in order to determine overall conformance to the Bank’s credit and lending policies.

Nonaccrual and Past-Due Loans

A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged against interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Past-due loans are loans whose principal or interest is past due 30 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

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

(dollars in thousands) March 31,
2017 December 31,
2016
Commercial, financial and agricultural $ 2,663 $ 1,814
Real estate – construction and development 613 547
Real estate – commercial and farmland 7,506 8,757
Real estate – residential 6,929 6,401
Consumer installment 570 595
$ 18,281 $ 18,114



(dollars in thousands)	March 31, 2018		December 31, 2017
Commercial, financial and agricultural	$	1,548	$	1,306
Real estate – construction and development	518		554
Real estate – commercial and farmland	3,555		2,665
Real estate – residential	8,311		9,194
Consumer installment	488		483
	$	14,420	$	14,202

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

(dollars in thousands) March 31,
2017 December 31,
2016
Commercial, financial and agricultural $ 376 $ 692
Real estate – construction and development 2,469 2,611
Real estate – commercial and farmland 11,465 10,174
Real estate – residential 9,276 9,476
Consumer installment 20 13
$ 23,606 $ 22,966



(dollars in thousands)	March 31, 2018		December 31, 2017
Commercial, financial and agricultural	$	796	$	813
Real estate – construction and development	3,112		3,139
Real estate – commercial and farmland	4,347		5,685
Real estate – residential	7,648		5,743
Consumer installment	37		48
	$	15,940	$	15,428

The following table presents an analysis of past-due loans, excluding purchased past-due loans as of March 31, ~~2017~~2018 and December 31, ~~2016:~~

(dollars in thousands) Loans
30-59
Days Past
Due Loans
60-89
Days
Past Due Loans 90
or More
Days Past
Due Total
Loans
Past Due Current
Loans Total
Loans Loans 90
Days or
More Past
Due and
Still
Accruing

March 31, 2017
Commercial, financial & agricultural $ 4,641 $ 3,756 $ 2,381 $ 10,778 $ 1,050,821 $ 1,061,599 $ 933
Real estate – construction & development 799 133 577 1,509 413,520 415,029 -
Real estate – commercial & farmland 2,558 1,526 6,986 11,070 1,447,040 1,458,110 -
Real estate – residential 5,088 1,011 5,945 12,044 714,751 726,795 -
Consumer installment loans 571 252 364 1,187 114,732 115,919 -
Other - - - - 8,028 8,028 -
Total $ 13,657 $ 6,678 $ 16,253 $ 36,588 $ 3,748,892 $ 3,785,480 $ 933

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

2017:



(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Loans Past Due		Current Loans		Total Loans		Loans 90 Days or More Past Due and Still Accruing
March 31, 2018
Commercial, financial and agricultural	$	10,081	$	5,750	$	3,430	$	19,261	$	1,368,176	$	1,387,437	$	2,383
Real estate – construction and development	1,202		168		166		1,536		629,968		631,504		—
Real estate – commercial and farmland	4,189		590		1,288		6,067		1,630,587		1,636,654		—
Real estate – residential	11,907		3,058		7,207		22,172		1,057,856		1,080,028		—
Consumer installment	1,033		639		413		2,085		314,278		316,363		114
Total	$	28,412	$	10,205	$	12,504	$	51,121	$	5,000,865	$	5,051,986	$	2,497

December 31, 2017
Commercial, financial and agricultural	$	8,124	$	3,285	$	6,978	$	18,387	$	1,344,121	$	1,362,508	$	5,991
Real estate – construction and development	810		23		288		1,121		623,474		624,595		—
Real estate – commercial and farmland	869		787		1,940		3,596		1,531,843		1,535,439		—
Real estate – residential	8,772		2,941		7,041		18,754		990,707		1,009,461		—
Consumer installment	1,556		472		329		2,357		322,154		324,511		—
Total	$	20,131	$	7,508	$	16,576	$	44,215	$	4,812,299	$	4,856,514	$	5,991

The following table presents an analysis of purchased past-due loans as of March 31, ~~2017~~2018 and December 31, ~~2016:~~

(dollars in thousands)
Loans
30-59
Days Past
Due Loans
60-89
Days
Past Due Loans 90
or More
Days Past
Due Total
Loans
Past Due Current
Loans Total
Loans Loans 90
Days or
More Past
Due and
Still
Accruing

March 31, 2017
Commercial, financial & agricultural $ 92 $ 6 $ 349 $ 447 $ 89,450 $ 89,897 $ -
Real estate – construction & development 517 154 1,812 2,483 79,895 82,378 -
Real estate – commercial & farmland 4,220 209 6,938 11,367 526,679 538,046 -
Real estate – residential 6,629 1,315 5,751 13,695 279,216 292,911 -
Consumer installment loans 24 13 12 49 3,654 3,703 -
Total $ 11,482 $ 1,697 $ 14,862 $ 28,041 $ 978,894 $ 1,006,935 $ -

December 31, 2016
Commercial, financial & agricultural $ 113 $ 18 $ 593 $ 724 $ 95,813 $ 96,537 $ -
Real estate – construction & development 161 11 2,518 2,690 78,678 81,368 -
Real estate – commercial & farmland 2,034 326 7,152 9,512 566,843 576,355 -
Real estate – residential 4,566 698 6,835 12,099 298,178 310,277 -
Consumer installment loans 22 - 13 35 4,619 4,654 -
Total $ 6,896 $ 1,053 $ 17,111 $ 25,060 $ 1,044,131 $ 1,069,191 $ -

2017:



(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Loans Past Due		Current Loans		Total Loans		Loans 90 Days or More Past Due and Still Accruing
March 31, 2018
Commercial, financial and agricultural	$	103	$	—	$	778	$	881	$	63,731	$	64,612	$	—
Real estate – construction and development	473		31		2,561		3,065		45,875		48,940		—
Real estate – commercial and farmland	1,589		1,022		1,515		4,126		461,744		465,870		—
Real estate – residential	4,228		591		5,594		10,413		226,040		236,453		—
Consumer installment	20		—		33		53		2,659		2,712		—
Total	$	6,413	$	1,644	$	10,481	$	18,538	$	800,049	$	818,587	$	—

December 31, 2017
Commercial, financial and agricultural	$	—	$	33	$	760	$	793	$	73,585	$	74,378	$	—
Real estate – construction and development	87		31		2,517		2,635		62,878		65,513		—
Real estate – commercial and farmland	1,190		701		2,724		4,615		463,631		468,246		—
Real estate – residential	2,722		1,585		2,320		6,627		243,912		250,539		—
Consumer installment	57		4		43		104		2,815		2,919		—
Total	$	4,056	$	2,354	$	8,364	$	14,774	$	846,821	$	861,595	$	—

Impaired Loans

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

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

As of and for the
Three Months Ended
(dollars in thousands) March 31,
2017 December 31,
2016 March 31,
2016

Nonaccrual loans $ 18,281 $ 18,114 $ 15,700
Troubled debt restructurings not included above 13,659 14,209 14,385
Total impaired loans $ 31,940 $ 32,323 $ 30,085
Interest income recognized on impaired loans $ 240 $ 225 $ 318
Foregone interest income on impaired loans $ 274 $ 267 $ 242



	As of and for the Period Ended
(dollars in thousands)	March 31, 2018		December 31, 2017		March 31, 2017
Nonaccrual loans	$	14,420	$	14,202	$	18,281
Troubled debt restructurings not included above	11,375		13,599		13,659
Total impaired loans	$	25,795	$	27,801	$	31,940

Interest income recognized on impaired loans	$	239	$	1,010	$	240
Foregone interest income on impaired loans	$	190	$	197	$	274

The following table presents an analysis of information pertaining to impaired loans, excluding purchased loans as of March 31, ~~2017,~~2018, December 31, ~~2016~~2017 and March 31, ~~2016:~~

(dollars in thousands)
Unpaid
Contractual
Principal
Balance Recorded
Investment
With No
Allowance Recorded
Investment
With
Allowance Total
Recorded
Investment Related
Allowance
Three
Month
Average
Recorded
Investment

March 31, 2017
Commercial, financial & agricultural $ 3,891 $ 202 $ 2,503 $ 2,705 $ 637 $ 2,283
Real estate – construction & development 1,875 - 1,048 1,048 356 1,140
Real estate – commercial & farmland 12,450 5,655 5,795 11,450 1,572 12,163
Real estate – residential 14,344 2,422 13,727 16,149 2,645 16,866
Consumer installment loans 666 - 588 588 6 601
Total $ 33,226 $ 8,279 $ 23,661 $ 31,940 $ 5,216 $ 33,053

(dollars in thousands) Unpaid
Contractual
Principal
Balance Recorded
Investment
With No
Allowance Recorded
Investment
With
Allowance Total
Recorded
Investment Related
Allowance Three
Month
Average
Recorded
Investment
December 31, 2016
Commercial, financial & agricultural $ 3,068 $ 204 $ 1,656 $ 1,860 $ 134 $ 1,613
Real estate – construction & development 2,047 - 1,233 1,233 273 1,590
Real estate – commercial & farmland 13,906 6,811 6,065 12,876 1,503 12,948
Real estate – residential 15,482 2,238 13,503 15,741 3,080 15,525
Consumer installment loans 671 - 613 613 5 576
Total $ 35,174 $ 9,253 $ 23,070 $ 32,323 $ 4,995 $ 32,252

(dollars in thousands) Unpaid
Contractual
Principal
Balance Recorded
Investment
With No
Allowance Recorded
Investment
With
Allowance Total
Recorded
Investment Related
Allowance Three
Month
Average
Recorded
Investment
March 31, 2016
Commercial, financial & agricultural $ 3,150 $ 339 $ 1,206 $ 1,545 $ 408 $ 1,544
Real estate – construction & development 3,278 230 2,022 2,252 742 2,428
Real estate – commercial & farmland 14,530 5,142 7,870 13,012 874 12,898
Real estate – residential 13,976 1,662 11,177 12,839 2,223 13,345
Consumer installment loans 519 - 437 437 7 466
Total $ 35,453 $ 7,373 $ 22,712 $ 30,085 $ 4,254 $ 30,681

2017:



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment
March 31, 2018
Commercial, financial and agricultural	$	1,874	$	985	$	602	$	1,587	$	136	$	1,467
Real estate – construction and development	746		567		127		694		1		833
Real estate – commercial and farmland	9,515		522		7,639		8,161		1,216		7,753
Real estate – residential	14,908		4,912		9,946		14,858		980		14,891
Consumer installment	526		495		—		495		—		492
Total	$	27,569	$	7,481	$	18,314	$	25,795	$	2,333	$	25,436



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment
December 31, 2017
Commercial, financial and agricultural	$	1,453	$	734	$	613	$	1,347	$	145	$	1,900
Real estate – construction and development	1,467		471		500		971		48		1,065
Real estate – commercial and farmland	10,646		729		8,873		9,602		1,047		8,910
Real estate – residential	17,416		4,828		10,565		15,393		1,005		14,294
Consumer installment	523		488		—		488		—		493
Total	$	31,505	$	7,250	$	20,551	$	27,801	$	2,245	$	26,662



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment
March 31, 2017
Commercial, financial and agricultural	$	3,891	$	202	$	2,503	$	2,705	$	637	$	2,283
Real estate – construction and development	1,875		—		1,048		1,048		356		1,140
Real estate – commercial and farmland	12,450		5,655		5,795		11,450		1,572		12,163
Real estate – residential	14,344		2,422		13,727		16,149		2,645		16,866
Consumer installment	666		—		588		588		6		601
Total	$	33,226	$	8,279	$	23,661	$	31,940	$	5,216	$	33,053

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

As of and for the
Three Months Ended
(dollars in thousands) March 31,
2017 December 31,
2016 March 31,
2016
Nonaccrual loans $ 23,606 $ 22,966 $ 32,518
Troubled debt restructurings not included above 20,448 23,543 21,501
Total impaired loans $ 44,054 $ 46,509 $ 54,019

Interest income recognized on impaired loans $ 379 $ 377 $ 542
Foregone interest income on impaired loans $ 337 $ 354 $ 526



	As of and for the Period Ended
(dollars in thousands)	March 31, 2018		December 31, 2017		March 31, 2017
Nonaccrual loans	$	15,940	$	15,428	$	23,606
Troubled debt restructurings not included above	20,649		20,472		20,448
Total impaired loans	$	36,589	$	35,900	$	44,054

Interest income recognized on impaired loans	$	696	$	379	$	379
Foregone interest income on impaired loans	$	245	$	281	$	337

The following table presents an analysis of information pertaining to purchased impaired loans as of March 31, ~~2017,~~2018, December 31, ~~2016~~2017 and March 31, ~~2016:~~

(dollars in thousands) Unpaid
Contractual
Principal
Balance Recorded
Investment
With No
Allowance Recorded
Investment
With
Allowance Total
Recorded
Investment Related
Allowance Three
Month
Average
Recorded
Investment
March 31, 2017
Commercial, financial & agricultural $ 2,806 $ 151 $ 225 $ 376 $ - $ 534
Real estate – construction & development 25,748 287 3,203 3,490 250 3,730
Real estate – commercial & farmland 30,419 768 17,532 18,300 855 18,467
Real estate – residential 25,855 7,155 14,713 21,868 1,091 22,529
Consumer installment loans 34 20 - 20 - 22
Total $ 84,862 $ 8,381 $ 35,673 $ 44,054 $ 2,196 $ 45,282

(dollars in thousands) Unpaid
Contractual
Principal
Balance Recorded
Investment
With No
Allowance Recorded
Investment
With
Allowance Total
Recorded
Investment Related
Allowance Three Month
Average
Recorded
Investment
December 31, 2016
Commercial, financial & agricultural $ 5,031 $ 370 $ 322 $ 692 $ - $ 783
Real estate – construction & development 24,566 493 3,477 3,970 153 3,888
Real estate – commercial & farmland 36,174 3,598 15,036 18,634 385 17,806
Real estate – residential 27,022 7,883 15,306 23,189 1,088 23,201
Consumer installment loans 37 24 - 24 - 51
Total $ 92,830 $ 12,368 $ 34,141 $ 46,509 $ 1,626 $ 45,729

(dollars in thousands) Unpaid
Contractual
Principal
Balance Recorded
Investment
With No
Allowance Recorded
Investment
With
Allowance Total
Recorded
Investment Related
Allowance Three
Month
Average
Recorded
Investment
March 31, 2016
Commercial, financial & agricultural $ 7,474 $ 236 $ 3,533 $ 3,769 $ 111 $ 3,665
Real estate – construction & development 11,946 892 3,591 4,483 86 4,202
Real estate – commercial & farmland 25,622 8,480 15,406 23,886 350 20,943
Real estate – residential 25,231 5,815 15,931 21,746 436 22,682
Consumer installment loans 138 135 - 135 - 130
Total $ 70,411 $ 15,558 $ 38,461 $ 54,019 $ 983 $ 51,622

2017:



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment
March 31, 2018
Commercial, financial and agricultural	$	4,050	$	52	$	744	$	796	$	396	$	805
Real estate – construction and development	9,012		426		3,720		4,146		913		4,152
Real estate – commercial and farmland	12,590		861		10,230		11,091		767		11,744
Real estate – residential	22,820		8,426		12,093		20,519		745		19,502
Consumer installment	46		37		—		37		—		43
Total	$	48,518	$	9,802	$	26,787	$	36,589	$	2,821	$	36,246



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment
December 31, 2017
Commercial, financial and agricultural	$	4,170	$	70	$	744	$	814	$	400	$	1,450
Real estate – construction and development	9,060		282		3,875		4,157		1,114		4,218
Real estate – commercial and farmland	14,596		1,224		11,173		12,397		906		12,840
Real estate – residential	20,867		6,574		11,910		18,484		821		19,002
Consumer installment	57		48		—		48		—		68
Total	$	48,750	$	8,198	$	27,702	$	35,900	$	3,241	$	37,578



(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment
March 31, 2017
Commercial, financial and agricultural	$	2,806	$	151	$	225	$	376	$	—	$	534
Real estate – construction and development	25,748		287		3,203		3,490		250		3,730
Real estate – commercial and farmland	30,419		768		17,532		18,300		855		18,467
Real estate – residential	25,855		7,155		14,713		21,868		1,091		22,529
Consumer installment	34		20		—		20		—		22
Total	$	84,862	$	8,381	$	35,673	$	44,054	$	2,196	$	45,282

Credit Quality Indicators

The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades:

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

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

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

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

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

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

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

Grade 407 – Substandard –This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

Grade 508 – Doubtful –This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

Grade 609 – Loss –This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

The following table presents the loan portfolio, excluding purchased loans, by risk grade as of March 31, ~~2017~~2018 and December 31, ~~2016~~2017 (in thousands):

Risk
Grade
Commercial,
Financial &
Agricultural Real Estate -
Construction &
Development Real Estate -
Commercial &
Farmland Real Estate -
Residential Consumer
Installment
Loans Other Total
March 31, 2017
10 $ 404,968 $ - $ 6,617 $ 53 $ 9,176 $ - $ 420,814
15 446,942 5,846 83,239 50,805 348 - 587,180
20 101,370 38,618 982,901 563,555 24,277 8,028 1,718,749
23 350 6,673 7,981 5,880 5 - 20,889
25 99,989 360,390 333,232 83,750 81,262 - 958,623
30 3,631 1,829 26,574 5,142 122 - 37,298
40 4,342 1,673 17,566 17,511 729 - 41,821
50 7 - - 99 - - 106
60 - - - - - - -
Total $ 1,061,599 $ 415,029 $ 1,458,110 $ 726,795 $ 115,919 $ 8,028 $ 3,785,480

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



Risk Grade	Commercial, Financial and Agricultural		Real Estate - Construction and Development		Real Estate - Commercial and Farmland		Real Estate - Residential		Consumer Installment		Total
March 31, 2018
1	$	542,520	$	—	$	5,234	$	47	$	9,824	$	557,625
2	568,129		969		55,823		48,554		116		673,591
3	133,302		57,386		917,751		918,086		24,192		2,050,717
4	132,154		561,624		614,291		86,689		281,550		1,676,308
5	333		4,490		6,494		6,180		2		17,499
6	5,728		4,435		24,099		5,385		148		39,795
7	5,264		2,600		12,962		15,087		531		36,444
8	7		—		—		—		—		7
9	—		—		—		—		—		—
Total	$	1,387,437	$	631,504	$	1,636,654	$	1,080,028	$	316,363	$	5,051,986

December 31, 2017
1	$	539,899	$	—	$	5,790	$	47	$	9,243	$	554,979
2	568,557		1,005		68,507		49,742		670		688,481
3	125,740		59,318		966,391		843,178		39,352		2,033,979
4	117,358		552,918		454,506		88,537		274,462		1,487,781
5	330		4,474		6,408		5,781		3		16,996
6	5,236		4,207		15,108		5,339		185		30,075
7	5,381		2,673		18,729		16,837		596		44,216
8	7		—		—		—		—		7
9	—		—		—		—		—		—
Total	$	1,362,508	$	624,595	$	1,535,439	$	1,009,461	$	324,511	$	4,856,514

The following table presents the purchased loan portfolio by risk grade as of March 31, ~~2017~~2018 and December 31, ~~2016~~2017 (in thousands):

Risk
Grade Commercial,
Financial &
Agricultural Real Estate -
Construction &
Development Real Estate -
Commercial &
Farmland Real Estate -
Residential Consumer
Installment Loans Other Total
March 31, 2017
10 $ 5,320 $ - $ - $ - $ 697 $ - $ 6,017
15 1,314 - 7,403 29,088 374 - 38,179
20 19,926 10,746 216,663 116,681 1,418 - 365,434
23 22 3,493 5,731 12,835 - - 22,081
25 49,514 56,263 264,504 105,579 1,094 - 476,954
30 11,275 8,457 16,073 7,600 45 - 43,450
40 2,526 3,419 27,672 21,128 75 - 54,820
50 - - - - - - -
60 - - - - - - -
Total $ 89,897 $ 82,378 $ 538,046 $ 292,911 $ 3,703 $ - $ 1,006,935

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



Risk Grade	Commercial, Financial and Agricultural		Real Estate - Construction and Development		Real Estate - Commercial and Farmland		Real Estate - Residential		Consumer Installment		Total
March 31, 2018
1	$	3,191	$	—	$	—	$	—	$	617	$	3,808
2	4,301		—		4,855		88,081		211		97,448
3	8,018		5,579		181,551		47,508		1,074		243,730
4	38,530		32,528		232,240		64,055		644		367,997
5	—		1,941		6,027		12,044		—		20,012
6	9,439		4,112		14,481		5,623		50		33,705
7	1,133		4,780		26,716		19,142		116		51,887
8	—		—		—		—		—		—
9	—		—		—		—		—		—
Total	$	64,612	$	48,940	$	465,870	$	236,453	$	2,712	$	818,587

December 31, 2017
1	$	3,358	$	—	$	—	$	—	$	606	$	3,964
2	4,541		—		5,047		91,270		240		101,098
3	8,517		13,014		186,187		50,988		1,166		259,872
4	43,085		39,877		230,570		70,837		711		385,080
5	—		2,306		6,081		11,349		—		19,736
6	13,718		4,076		13,637		5,637		53		37,121
7	1,159		6,240		26,724		20,458		143		54,724
8	—		—		—		—		—		—
9	—		—		—		—		—		—
Total	$	74,378	$	65,513	$	468,246	$	250,539	$	2,919	$	861,595

Troubled Debt Restructurings

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

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

The Company’s policy states that in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard and placed on nonaccrual status until such time the borrower has demonstrated the ability to service the loan payments based on the restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered toward the six month required term of satisfactory payment history. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment and approved by the Company’s Chief Credit Officer.

In the normal course of business, the Company renews loans with a modification of the interest rate or terms that are not deemed as troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified loans in the first three months of 2018 and 2017 ~~and 2016~~ totaling ~~$16.2~~$28.6 million and ~~$36.8~~$16.2 million, respectively, under such parameters.

As of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company had a balance of ~~$16.6~~$14.7 million and ~~$18.2~~$15.6 million, respectively, in troubled debt restructurings, excluding purchased loans. The Company has recorded ~~$1.2~~$1.1 million and $2.8 million in previous charge-offs on such loans at ~~both~~ March 31, ~~2017~~2018 and December 31, ~~2016.~~2017, respectively. The Company’s balance in the allowance for loan losses allocated to such troubled debt restructurings was ~~$2.9~~$1.5 million and ~~$3.1~~$1.4 million at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively. At March 31, ~~2017,~~2018, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

During the three months ~~ending~~ended March 31, ~~2017~~2018 and ~~2016,~~2017, the Company modified loans as troubled debt restructurings, excluding purchased loans, with principal balances of ~~$93,000~~$1.2 million and ~~$1.7 million,~~$93,000, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the loans by class modified as troubled debt restructurings, excluding purchased loans, which occurred during the three months ~~ending~~ended March 31, ~~2017~~2018 and ~~2016:~~

March 31, 2017 March 31, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural - $ - 1 $ 12
Real estate – construction & development - - - -
Real estate – commercial & farmland - - 2 1,605
Real estate – residential 1 77 1 60
Consumer installment 4 16 - -
Total 5 $ 93 4 $ 1,676

2017:



	March 31, 2018			March 31, 2017
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	2	$	125	—	$	—
Real estate – construction and development	1	4		—	—
Real estate – commercial and farmland	1	303		—	—
Real estate – residential	2	710		1	77
Consumer installment	2	13		4	16
Total	8	$	1,155	5	$	93

Troubled debt restructurings, excluding purchased loans, with an outstanding balance of ~~$1.6~~$3.0 million and ~~$793,000~~$1.6 million defaulted during the three months ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss. The following table presents for loans, excluding purchased loans, the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three months ~~ending~~ended March 31, ~~2017~~2018 and ~~2016:~~

March 31, 2017 March 31, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural 3 $ 55 2 $ 7
Real estate – construction & development 1 26 1 18
Real estate – commercial & farmland 3 150 1 194
Real estate – residential 18 1,380 9 563
Consumer installment 8 21 1 11
Total 33 $ 1,632 14 $ 793

2017:



	March 31, 2018			March 31, 2017
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	—	$	—	3	$	55
Real estate – construction and development	—	—		1	26
Real estate – commercial and farmland	2	1,971		3	150
Real estate – residential	17	1,047		18	1,380
Consumer installment	—	—		8	21
Total	19	$	3,018	33	$	1,632

The following table presents the amount of troubled debt restructurings by loan class, excluding purchased loans, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural 3 $ 43 15 $ 142
Real estate – construction & development 7 435 2 34
Real estate – commercial & farmland 14 3,944 5 1,617
Real estate – residential 78 9,220 20 998
Consumer installment 8 18 33 129
Total 110 $ 13,660 75 $ 2,920

December 31, 2016 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural 4 $ 47 15 $ 114
Real estate – construction & development 8 686 2 34
Real estate – commercial & farmland 16 4,119 5 2,970
Real estate – residential 82 9,340 15 739
Consumer installment 7 17 32 130
Total 117 $ 14,209 69 $ 3,987

2017:



March 31, 2018	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	39	13	$	224
Real estate – construction and development	5	176		2	8
Real estate – commercial and farmland	16	4,606		6	2,127
Real estate – residential	72	6,547		19	838
Consumer installment	3	7		32	93
Total	100	$	11,375	72	$	3,290



December 31, 2017	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	41	12	$	120
Real estate – construction and development	6	417		2	34
Real estate – commercial and farmland	17	6,937		5	204
Real estate – residential	74	6,199		18	1,508
Consumer installment	4	5		33	98
Total	105	$	13,599	70	$	1,964

As of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company had a balance of ~~$27.4~~$24.5 million and ~~$28.1~~$24.9 million, respectively, in troubled debt restructurings included in purchased loans. The Company has recorded ~~$1.5~~$1.7 million and $1.2 million in previous charge-offs on such loans at ~~both~~ March 31, ~~2017~~2018 and December 31, ~~2016.~~2017, respectively. At March 31, ~~2017,~~2018, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

During the three months ~~ending~~ended March 31, ~~2017~~2018 and ~~2016,~~2017, the Company modified purchased loans as troubled debt restructurings, with principal balances of ~~$355,000~~$186,000 and ~~$1.1 million,~~$355,000, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the purchased loans by class modified as troubled debt restructurings, which occurred during the three months ~~ending~~ended March 31, ~~2017~~2018 and ~~2016:~~

March 31, 2017 March 31, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural - $ - 1 $ 76
Real estate – construction & development - - - -
Real estate – commercial & farmland 1 231 2 504
Real estate – residential 1 124 2 488
Consumer installment - - - -
Total 2 $ 355 5 $ 1,068

2017:



	March 31, 2018			March 31, 2017
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	1	$	7	—	$	—
Real estate – construction and development	—	—		—	—
Real estate – commercial and farmland	—	—		1	231
Real estate – residential	2	179		1	124
Consumer installment	—	—		—	—
Total	3	$	186	2	$	355

Troubled debt restructurings included in purchased loans with an outstanding balance of ~~$2.1 million~~$906,000 and ~~$1.1~~$2.1 million defaulted during the three months ended March 31, ~~2017~~2018 and ~~2016,~~2017, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss.

The following table presents purchased loan troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three months ~~ending~~ended March 31, ~~2017~~2018 and ~~2016:~~

March 31, 2017 March 31, 2016
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural - $ - - $ -
Real estate – construction & development 2 336 1 12
Real estate – commercial & farmland 3 1,149 1 613
Real estate – residential 8 565 7 489
Consumer installment - - - -
Total 13 $ 2,050 9 $ 1,114

2017:



	March 31, 2018			March 31, 2017
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	—	$	—	—	$	—
Real estate – construction and development	—	—		2	336
Real estate – commercial and farmland	1	351		3	1,149
Real estate – residential	8	555		8	565
Consumer installment	—	—		—	—
Total	9	$	906	13	$	2,050

The following table presents the amount of troubled debt restructurings by loan class of purchased loans, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016.~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural 1 $ 1 3 $ 16
Real estate – construction & development 3 1,020 7 421
Real estate – commercial & farmland 16 6,835 10 3,996
Real estate – residential 120 12,592 34 2,528
Consumer installment - - 2 8
Total 140 $ 20,448 56 $ 6,969

December 31, 2016 Accruing Loans Non-Accruing Loans
Loan Class #
Balance
(in thousands)
#
Balance
(in thousands)

Commercial, financial & agricultural 1 $ 1 4 $ 91
Real estate – construction & development 6 1,358 3 30
Real estate – commercial & farmland 20 8,460 5 2,402
Real estate – residential 123 13,713 33 2,077
Consumer installment 3 11 1 -
Total 153 $ 23,543 46 $ 4,600

2017.



March 31, 2018	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	—	$	—	4	$	23
Real estate – construction and development	4	1,034		6	316
Real estate – commercial and farmland	14	6,745		8	2,234
Real estate – residential	120	12,871		21	1,281
Consumer installment	—	—		2	4
Total	138	$	20,650	41	$	3,858



December 31, 2017	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	—	$	—	3	$	16
Real estate – construction and development	3	1,018		6	340
Real estate – commercial and farmland	14	6,713		10	2,582
Real estate – residential	117	12,741		25	1,462
Consumer installment	—	—		2	5
Total	134	$	20,472	46	$	4,405

Allowance for Loan Losses

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

The Company has developed a methodology for determining the adequacy of the allowance for loan losses which is monitored by the Company’s Chief Credit Officer. Procedures provide for the assignment of a risk rating for every loan included in the total loan portfolio. ~~Mortgage warehouse lines of credit, overdraft protection loans, commercial~~Commercial insurance premium finance loans, overdraft protection loans, and certain ~~consumer~~residential mortgage loans and ~~mortgage~~consumer loans serviced by outside processors are treated as pools for risk rating purposes. The risk rating schedule provides nine ratings of which five ratings are classified as pass ratings and four ratings are classified as criticized ratings. Each risk rating is assigned a percentage factor to be applied to the loan balance to determine the adequate amount of reserve. ~~All relationships greater than $1.0 million and a sample of relationships greater than $250,000 are reviewed annually by the~~The Bank’s independent internal loan review ~~department.~~department reviews on an annual basis a sample of relationships in excess of $1,000,000, as well as selective sampling of loans below this threshold. Sampling is based on a number of factors unique to the Bank’s portfolio risks, including, but not limited to, lending divisions, industry, risk grades, and new originations. As a result of these loan reviews, certain loans

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

Loan losses are charged against the allowance when management believes the collection of a loan’s principal is unlikely. Subsequent recoveries are credited to the allowance. Consumer loans are charged-off in accordance with the Federal Financial Institutions Examination Council’s (“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 609 (Loss per the regulatory guidance), the uncollectible portion is charged-off.

The following tables detail activity in the allowance for loan losses by portfolio segment for the ~~three months~~three-month period ended March 31, ~~2017,~~2018, the year ended December 31, ~~2016~~2017 and the ~~three months~~three-month period ended March 31, ~~2016.~~2017. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

(dollars in thousands)

Commercial,
Financial &
Agricultural

Real Estate –
Construction &
Development

Real Estate –
Commercial &
Farmland

Real Estate –
Residential

Consumer
Installment
Loans and
Other

Purchased
Loans

Purchased
Loan
Pools

Total

Three months ended March 31, 2017:
Balance, December 31, 2016 $ 2,192 $ 2,990 $ 7,662 $ 6,786 $ 827 $ 1,626 $ 1,837 $ 23,920
Provision for loan losses 641 640 217 (791 ) 174 706 249 1,836
Loans charged off (104 ) (53 ) (9 ) (216 ) (164 ) (556 ) - (1,102 )
Recoveries of loans previously charged off 69 20 9 61 17 420 - 596
Balance, March 31, 2017 $ 2,798 $ 3,597 $ 7,879 $ 5,840 $ 854 $ 2,196 $ 2,086 $ 25,250

Period-end allocation:
Loans individually evaluated for impairment⁽¹⁾ $ 626 $ 354 $ 1,574 $ 2,538 $ - $ 2,196 $ 376 $ 7,664
Loans collectively evaluated for impairment 2,172 3,243 6,305 3,302 854 - 1,710 17,586
Ending balance $ 2,798 $ 3,597 $ 7,879 $ 5,840 $ 854 $ 2,196 $ 2,086 $ 25,250

Loans:
Individually evaluated for impairment⁽¹⁾ $ 1,937 $ 843 $ 11,260 $ 9,630 $ - $ 35,673 $ 3,446 $ 62,789
Collectively evaluated for impairment 1,059,662 414,186 1,446,850 717,165 123,947 836,146 525,653 5,123,609
Acquired with deteriorated credit quality - - - - - 135,116 - 135,116
Ending balance $ 1,061,599 $ 415,029 $ 1,458,110 $ 726,795 $ 123,947 $ 1,006,935 $ 529,099 $ 5,321,514

~~(1)~~

At March 31, 2017, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

(dollars in thousands) Commercial,
Financial &
Agricultural Real Estate –
Construction &
Development Real Estate –
Commercial &
Farmland Real Estate -
Residential Consumer
Installment
Loans and
Other Purchased
Loans Purchased
Loan
Pools Total
Twelve months ended December 31, 2016:
Balance, January 1, 2016 $ 1,144 $ 5,009 $ 7,994 $ 4,760 $ 1,574 $ - $ 581 $ 21,062
Provision for loan losses 2,647 (1,921 ) 107 2,757 (523 ) (232 ) 1,256 4,091
Loans charged off (1,999 ) (588 ) (708 ) (1,122 ) (351 ) (1,559 ) - (6,327 )
Recoveries of loans previously charged off 400 490 269 391 127 3,417 - 5,094
Balance, December 31, 2016 $ 2,192 $ 2,990 $ 7,662 $ 6,786 $ 827 $ 1,626 $ 1,837 $ 23,920

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

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

~~(1)~~

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

(dollars in thousands)
Commercial,
Financial &
Agricultural Real Estate –
Construction &
Development Real Estate –
Commercial
& Farmland Real Estate -
Residential Consumer
Installment
Loans and
Other Purchased
Loans Purchased
Loan
Pools Total
Three months ended March 31, 2016:
Balance, December 31, 2015 $ 1,144 $ 5,009 $ 7,994 $ 4,760 $ 1,574 $ - $ 581 $ 21,062
Provision for loan losses 788 (1,051 ) (669 ) 25 399 464 725 681
Loans charged off (406 ) (155 ) (347 ) (468 ) (59 ) (379 ) - (1,814 )
Recoveries of loans previously charged off 73 122 121 314 25 898 - 1,553
Balance, March 31, 2016 $ 1,599 $ 3,925 $ 7,099 $ 4,631 $ 1,939 $ 983 $ 1,306 $ 21,482

Period-end allocation:
Loans individually evaluated for impairment⁽¹⁾ $ 400 $ 733 $ 873 $ 2,153 $ - $ 983 $ - $ 5,142
Loans collectively evaluated for impairment 1,199 3,192 6,226 2,478 1,939 - 1,306 16,340
Ending balance $ 1,599 $ 3,925 $ 7,099 $ 4,631 $ 1,939 $ 983 $ 1,306 $ 21,482

Loans:
Individually evaluated for impairment⁽¹⁾ $ 799 $ 1,604 $ 12,050 $ 9,540 $ - $ 38,461 $ - $ 62,454
Collectively evaluated for impairment 433,274 263,216 1,142,837 619,598 45,089 1,007,754 656,734 4,168,502
Acquired with deteriorated credit quality - - - - - 213,983 - 213,983
Ending balance $ 434,073 $ 264,820 $ 1,154,887 $ 629,138 $ 45,089 $ 1,260,198 $ 656,734 $ 4,444,939

~~(1)~~

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

~~NOTE 6 – ASSETS ACQUIRED IN FDIC-ASSISTED ACQUISITIONS~~

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

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

~~The determination of the initial fair values of~~



(dollars in thousands)	Commercial, Financial and Agricultural			Real Estate – Construction and Development			Real Estate – Commercial and Farmland			Real Estate – Residential			Consumer Installment			Purchased Loans			Purchased Loan Pools			Total
Three Months Ended March 31, 2018
Balance, December 31, 2017	$	3,631		$	3,629		$	7,501		$	4,786		$	1,916		$	3,253		$	1,075		$	25,791
Provision for loan losses	783			(171		)	689			177			1,151			(747		)	(81		)	1,801
Loans charged off	(1,449		)	—			(142		)	(198		)	(962		)	(121		)	—			(2,872		)
Recoveries of loans previously charged off	656			114			24			182			67			437			—			1,480
Balance, March 31, 2018	$	3,621		$	3,572		$	8,072		$	4,947		$	2,172		$	2,822		$	994		$	26,200

Period-end allocation:
Loans individually evaluated for impairment ⁽¹⁾	$	533		$	1		$	1,216		$	980		$	—		$	2,822		$	176		$	5,728
Loans collectively evaluated for impairment	3,088			3,571			6,856			3,967			2,172			—			818			20,472
Ending balance	$	3,621		$	3,572		$	8,072		$	4,947		$	2,172		$	2,822		$	994		$	26,200

Loans:
Individually evaluated for impairment⁽¹⁾	$	2,147		$	126		$	7,639		$	9,946		$	—		$	28,167		$	902		$	48,927
Collectively evaluated for impairment	1,385,290			631,378			1,629,015			1,070,082			316,363			683,784			318,696			6,034,608
Acquired with deteriorated credit quality	—			—			—			—			—			106,636			—			106,636
Ending balance	$	1,387,437		$	631,504		$	1,636,654		$	1,080,028		$	316,363		$	818,587		$	319,598		$	6,190,171

(1) At March 31, 2018, loans ~~at the acquisition date~~individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and ~~the initial fair values of the related FDIC indemnification assets involves a high degree of judgment~~all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and ~~complexity. The carrying values of the acquired~~not only those currently classified as troubled debt restructurings.



(dollars in thousands)	Commercial, Financial and Agricultural			Real Estate – Construction and Development			Real Estate – Commercial and Farmland			Real Estate – Residential			Consumer Installment			Purchased Loans			Purchased Loan Pools			Total
Twelve Months Ended December 31, 2017
Balance, January 1, 2017	$	2,192		$	2,990		$	7,662		$	6,786		$	827		$	1,626		$	1,837		$	23,920
Provision for loan losses	3,019			488			508			(86		)	2,591			2,606			(762		)	8,364
Loans charged off	(2,850		)	(95		)	(853		)	(2,151		)	(1,618		)	(2,900		)	—			(10,467		)
Recoveries of loans previously charged off	1,270			246			184			237			116			1,921			—			3,974
Balance, December 31, 2017	$	3,631		$	3,629		$	7,501		$	4,786		$	1,916		$	3,253		$	1,075		$	25,791

Period-end allocation:
Loans individually evaluated for impairment⁽¹⁾	$	465		$	48		$	1,047		$	1,028		$	—		$	3,253		$	177		$	6,018
Loans collectively evaluated for impairment	3,166			3,581			6,454			3,758			1,916			—			898			19,773
Ending balance	$	3,631		$	3,629		$	7,501		$	4,786		$	1,916		$	3,253		$	1,075		$	25,791

Loans:
Individually evaluated for impairment ⁽¹⁾	$	2,971		$	500		$	8,873		$	10,818		$	—		$	28,165		$	904		$	52,231
Collectively evaluated for impairment	1,359,537			624,095			1,526,566			998,643			324,511			718,447			327,342			5,879,141
Acquired with deteriorated credit quality	—			—			—			—			—			114,983			—			114,983
Ending balance	$	1,362,508		$	624,595		$	1,535,439		$	1,009,461		$	324,511		$	861,595		$	328,246		$	6,046,355

(1) At December 31, 2017, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and ~~the FDIC indemnification assets reflect management’s best estimate of the fair value of each of these assets~~all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as of the date of acquisition. However, the amount that the Company realizes on these assets could differ materially from the carrying values reflected in the financial statements included in this report, based upon the timing and amount of collections on the acquired loans in future periods. Because of the loss-sharing agreements with the FDIC on these assets, the Company does not expect to incur any significant losses. To the extent the actual values realized for the acquired loans are different from the estimates, the indemnification assets will generally be affected in an offsetting manner due to the loss-sharing support from the FDIC.

troubled debt restructurings.

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

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



(dollars in thousands)	Commercial, Financial and Agricultural			Real Estate – Construction and Development			Real Estate – Commercial and Farmland			Real Estate – Residential			Consumer Installment			Purchased Loans			Purchased Loan Pools		Total
Three Months Ended March 31, 2017
Balance, December 31, 2016	$	2,192		$	2,990		$	7,662		$	6,786		$	827		$	1,626		$	1,837	$	23,920
Provision for loan losses	641			640			217			(791		)	174			706			249		1,836
Loans charged off	(104		)	(53		)	(9		)	(216		)	(164		)	(556		)	—		(1,102		)
Recoveries of loans previously charged off	69			20			9			61			17			420			—		596
Balance, March 31, 2017	$	2,798		$	3,597		$	7,879		$	5,840		$	854		$	2,196		$	2,086	$	25,250

Period-end allocation:
Loans individually evaluated for impairment⁽¹⁾	$	626		$	354		$	1,574		$	2,538		$	—		$	2,196		$	376	$	7,664
Loans collectively evaluated for impairment	2,172			3,243			6,305			3,302			854			—			1,710		17,586
Ending balance	$	2,798		$	3,597		$	7,879		$	5,840		$	854		$	2,196		$	2,086	$	25,250

Loans:
Individually evaluated for impairment ⁽¹⁾	$	1,937		$	843		$	11,260		$	9,630		$	—		$	35,673		$	3,446	$	62,789
Collectively evaluated for impairment	1,059,662			414,186			1,446,850			717,165			123,947			836,146			525,653		5,123,609
Acquired with deteriorated credit quality	—			—			—			—			—			135,116			—		135,116
Ending balance	$	1,061,599		$	415,029		$	1,458,110		$	726,795		$	123,947		$	1,006,935		$	529,099	$	5,321,514

(1) At March 31, 2017, ~~the Company’s FDIC loss-sharing payable totaled $6.5 million, which is comprised of an accrued clawback liability of $9.4 million, less $1.5 million in current activity incurred but~~loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not ~~yet remitted to the FDIC (net charge-offs offset by reimbursable expenses) and remaining indemnification of $1.4 million (for reimbursements associated with anticipated losses in future quarters).~~

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

(dollars in thousands)
Covered
Loans Less: Fair
Value
Adjustments Total
Covered
Loans OREO Less: Fair
Value
Adjustments Total
Covered
OREO Total
Covered
Assets FDIC Loss-
Share
Receivable
(Payable)
March 31, 2017
AUB $ - $ - $ - $ - $ - $ - $ - $ (34 )
USB 3,118 12 3,106 - - - 3,106 (1,655 )
SCB 3,989 36 3,953 - - - 3,953 (19 )
FBJ 3,714 433 3,281 - - - 3,281 (255 )
DBT 11,655 486 11,169 - - - 11,169 (4,229 )
TBC 1,737 - 1,737 - - - 1,737 (48 )
HTB 1,899 30 1,869 - - - 1,869 708
OGB 1,068 32 1,036 - - - 1,036 (1,040 )
CBG 11,454 881 10,573 215 - 215 10,788 83
Total $ 38,634 $ 1,910 $ 36,724 $ 215 $ - $ 215 $ 36,939 $ (6,489 )

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

~~The shared-loss agreements are subject to the servicing procedures~~only those currently classified as specified in the agreement with the FDIC. The expected reimbursements under the shared-loss agreements were recorded as an indemnification asset at their estimated fair values on the acquisition dates. As of March 31, 2017 and December 31, 2016, the Company has recorded a clawback liability of $9.4 million and $9.3 million, respectively, which represents the obligation of the Company to reimburse the FDIC should actual losses be less than certain thresholds established in each loss-share agreement.

troubled debt restructurings.

~~Changes in the FDIC shared-loss receivable (payable) for the three months ended March 31, 2017 and 2016 are as follows:~~

(dollars in thousands) March 31,
2017 March 31,
2016
Beginning balance, January 1 $ (6,313 ) $ 6,301
Payments paid to (received from) FDIC 559 (3,299 )
Amortization (415 ) (1,545 )
Changes in clawback liability (101 ) (91 )
Increase in receivable due to:
Net charge-offs (recoveries) on covered loans (224 ) (673 )
Loss (gain) on covered other real estate owned (15 ) 581
Reimbursable expenses on covered assets 171 244
Other activity, net (151 ) (321 )
Ending balance $ (6,489 ) $ 1,197

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

NOTE 76 – OTHER REAL ESTATE OWNED

The following is a summary of the activity in ~~other real estate owned~~OREO during the three months ended March 31, ~~2017~~2018 and ~~2016:~~

(dollars in thousands) March 31,
2017 March 31,
2016
Beginning balance, January 1 $ 10,874 $ 16,147
Loans transferred to other real estate owned 1,657 1,044
Net gains (losses) on sale and write-downs recorded in statement of income (322 ) (736 )
Sales proceeds (1,743 ) (1,488 )
Ending balance $ 10,466 $ 14,967

2017:



(dollars in thousands)	March 31, 2018			March 31, 2017
Beginning balance, January 1	$	8,464		$	10,874
Loans transferred to other real estate owned	1,176			1,657
Net gains (losses) on sale and write-downs recorded in statement of income	101			(322		)
Sales proceeds	(495		)	(1,743		)
Other	(75		)	—
Ending balance	$	9,171		$	10,466

The following is a summary of the activity in purchased ~~other real estate owned~~OREO during the three months ended March 31, ~~2017~~2018 and ~~2016:~~

(dollars in thousands) March 31,
2017 March 31,
2016
Beginning balance, January 1 $ 12,540 $ 19,344
Loans transferred to other real estate owned 1,489 1,401
Acquired in acquisitions - 1,838
Portion of gains (losses) on sale and write-downs payable (receivable from) the FDIC under loss-sharing agreements 15 -
Net gains (losses) on sale and write-downs recorded in statement of income 449 (763 )
Sales proceeds (2,825 ) (3,008 )
Ending balance $ 11,668 $ 18,812
2017:



(dollars in thousands)	March 31, 2018			March 31, 2017
Beginning balance, January 1	$	9,011		$	12,540
Loans transferred to other real estate owned	457			1,489
Portion of gains (losses) on sale and write-downs payable to (receivable from) the FDIC under loss-sharing agreements	—			15
Net gains (losses) on sale and write-downs recorded in statement of income	(134		)	449
Sales proceeds	(2,611		)	(2,825		)
Ending balance	$	6,723		$	11,668

NOTE 87 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The Company classifies the sales of securities under agreements to repurchase as short-term borrowings. The amounts received under these agreements are reflected as a liability in the Company’s consolidated balance sheets and the securities underlying these agreements are included in investment securities in the Company’s consolidated balance sheets. At March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, all securities sold under agreements to repurchase mature on a daily basis. The market value of the securities fluctuate on a daily basis due to market conditions. The Company monitors the market value of the securities underlying these agreements on a daily basis and is required to transfer additional securities if the market value of the securities fall below the repurchase agreement price. The Company maintains an unpledged securities portfolio that it believes is sufficient to protect against a decline in the market value of the securities sold under agreements to repurchase.

The following is a summary of the Company’s securities sold under agreements to repurchase at March 31, ~~2017~~2018 and December 31, ~~2016:~~

(dollars in thousands) March 31,
2017 December 31,
2016
Securities sold under agreements to repurchase $ 40,415 $ 53,505

2017.



(dollars in thousands)	March 31, 2018		December 31, 2017
Securities sold under agreements to repurchase	$	23,270	$	30,638

At March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the investment securities underlying these agreements were comprised of state, county and municipal securities and mortgage-backed securities.

NOTE 98 – OTHER BORROWINGS

The Company has, from time to time, utilized certain borrowing arrangements to fund growth in earning assets or provide additional liquidity when appropriate spreads can be realized. At March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, there were ~~$525.7~~$555.5 million and ~~$492.3~~$250.6 million, respectively, in outstanding other borrowings.

Other borrowings consist of the following:

(dollars in thousands) March 31,
2017 December 31,
2016
FHLB borrowings:
Advance from FHLB due April 6, 2017; fixed interest rate of 0.71% $ 445,000 $ -
Advance from FHLB due May 30, 2017; fixed interest rate of 1.23% 5,002 5,006
Daily Rate Credit from FHLB with a variable interest rate (0.80% at December 31, 2016) - 150,000
Advance from FHLB due January 6, 2017; fixed interest rate of 0.56% - 292,500
Advance from FHLB due January 9, 2017; fixed interest rate of 1.40% - 4,002
Subordinated notes payable:
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $1,245; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616% 73,755 -
Other debt:
Advance from correspondent bank due October 5, 2019; secured by a loan receivable; fixed interest rate of 4.25% 70 77
Advance from correspondent bank due September 5, 2026; secured by a loan receivable; fixed interest rate of 2.09% 1,842 1,886
Advances under revolving credit agreement with a regional bank due September 26, 2017; secured by subsidiary bank stock; variable interest rate at 90-day LIBOR plus 3.50% (4.43% at December 31, 2016) - 38,000
Advances under revolving credit agreement with a regional bank due January 7, 2017; fixed interest rate of 8.00% - 850
Total $ 525,669 $ 492,321



(dollars in thousands)	March 31, 2018		December 31, 2017
FHLB borrowings:
Daily Rate Credit from FHLB with a variable interest rate (1.92% at March 31, 2018 and 1.59% at December 31, 2017)	$	80,000	$	25,000
Advance from FHLB due April 9, 2018; fixed interest rate of 1.70%	100,000		—
Advance from FHLB due April 20, 2018; fixed interest rate of 1.88%	150,000		—
Advance from FHLB due April 23, 2018; fixed interest rate of 1.85%	150,000		—
Advance from FHLB due January 8, 2018; fixed interest rate of 1.39%	—		150,000
Subordinated notes payable:
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $1,172 and $1,205, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%	73,828		73,795
Other debt:
Advance from correspondent bank due October 5, 2019; secured by a loan receivable; fixed interest rate of 4.25%	42		49
Advance from correspondent bank due September 5, 2026; secured by a loan receivable; fixed interest rate of 2.09%	1,665		1,710
Total	$	555,535	$	250,554

The advances from the FHLB are collateralized by a blanket lien on all first mortgage loans and other specific loans in addition to FHLB stock. At March 31, ~~2017, $766.4~~2018, $665.0 million was available for borrowing on lines with the FHLB.

At March 31, ~~2017, $60.0~~2018, the Company had a revolving credit arrangement with a regional bank with a maximum line amount of $30.0 million. This line of credit is secured by subsidiary bank stock, expires on September 26, 2020, and bears a variable interest rate of 90-day LIBOR plus 3.50%. At March 31, 2018, there was no principal amount outstanding on this line of credit, resulting in $30.0 million ~~was~~ available for borrowing under the revolving credit ~~agreement with a regional bank, secured by subsidiary bank stock.~~

arrangement.

As of March 31, ~~2017,~~2018, the ~~Company~~Bank maintained credit arrangements with various financial institutions to purchase federal funds up to $82.0 million.

The ~~Company~~Bank also participates in the Federal Reserve discount window borrowings program. At March 31, ~~2017,~~2018, the Company had ~~$907.8 million~~$1.14 billion of loans pledged at the Federal Reserve discount window and had ~~$594.7~~$732.7 million available for borrowing.

Subordinated Notes Payable

On March 13, 2017, the Companycompleted the public offering and sale of $75.0 million in aggregate principal amount of its 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 (the “subordinated notes”). The subordinated notes were sold to the public at par pursuant to an underwriting agreement and were issued pursuant to an indenture and a supplemental indenture. The subordinated notes will mature on March 15, 2027 and through March 14, 2022 will bear a fixed rate of interest of 5.75% per annum, payable semi-annually in arrears on September 15 and March 15 of each year. BeginningMarch 15, 2022, the interest rate on the subordinated notes resets quarterly to a floating rate per annum equal to the then-current three-month LIBOR plus 3.616%, payable quarterly in arrears on June 15, September 15, December 15, and March 15 of each year to the maturity date or earlier redemption.

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

The subordinated notes are unsecured and rank equally with all other unsecured subordinated indebtedness of the Company, including any subordinated indebtedness issued in the future under the indenture governing the subordinated notes. The subordinated notes are subordinated in right of payment to all senior indebtedness of the Company. The subordinated notes are obligations of the Company only and are not guaranteed by any subsidiaries, including the Bank. Additionally, the subordinated

notes are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries, meaning that creditors of the Company’s subsidiaries (including, in the case of the Bank, its depositors) generally will be paid from those subsidiaries’ assets before holders of the subordinated notes have any claim to those assets.

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

NOTE 109 – 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) March 31,
2017 December 31,
2016
Commitments to extend credit $ 1,167,344 $ 1,101,257
Unused home equity lines of credit 62,927 62,586
Financial standby letters of credit 15,810 14,257
Mortgage interest rate lock commitments 124,565 91,426
Mortgage forward contracts with positive fair value - 150,000



(dollars in thousands)	March 31, 2018		December 31, 2017
Commitments to extend credit	$	1,102,240	$	1,109,806
Unused home equity lines of credit	71,138		69,788
Financial standby letters of credit	11,960		11,389
Mortgage interest rate lock commitments	153,809		86,149
Mortgage forward contracts with positive fair value	97,032		31,500

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. These commitments, predominantly at variable interest rates, generally have fixed expiration dates of one year or less or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral is required in instances which the Company deems necessary.

Other Commitments

As of March 31, ~~2017,~~2018, a $75.0 million letter of credit issued by the FHLB was used to guarantee the Bank’s performance related to public fund deposit balances.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates

that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

A former borrower of the Company has filed a claim related to a loan previously made by the Company asserting lender liability. The case was tried without a jury and an order was issued by the court against the Company awarding the borrower approximately $2.9 million on August 8, 2013. The order is currently on appeal to the South Carolina Court of Appeals and the Company is asserting it had no fiduciary responsibility to the borrower. As of March 31, 2017, the Company believes that it has valid bases in law and fact to overturn on appeal the verdict. As a result, the Company believes that the likelihood that the amount of the judgment will be affirmed is not probable, and, accordingly, that the amount of any loss cannot be reasonably estimated at this time. Because the Company believes that this potential loss is not probable or estimable, it has not recorded any reserves or contingencies related to this legal matter. In the event that the Company’s assumptions used to evaluate this matter as neither probable nor estimable change in future periods, it may be required to record a liability for an adverse outcome.

NOTE 1110 – SHAREHOLDERS’ EQUITY

USPF Acquisition

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

On January 3, 2018, in exchange for 25.01% of the outstanding shares of common stock of USPF, the Company issued 114,285 unregistered shares of its common stock to a selling shareholder of USPF. The issuance of the 114,285 common shares was valued at $48.55 per share, resulting in an increase in shareholders’ equity of $5.5 million.

On January 31, 2018, in exchange for the final 70% of the outstanding shares of common stock of USPF, the Company issued 830,301 unregistered shares of its common stock to the selling shareholders of USPF. The issuance of the 830,301 common shares was valued at $53.55 per share, resulting in an increase in shareholders’ equity of $44.5 million.

On February 16, 2018, a registration statement was filed with the Securities and Exchange Commission to register the resale or other disposition of the combined 944,586 shares issued on January 3, 2018 and January 31, 2018.

For additional information regarding the ~~investment in~~ USPF acquisition, see Note 3.

2017 Public Offering

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

In March 2017, the Company made a capital contribution to the Bank in the amount of $110.0 million, using the net proceeds of the March 6, 2017 issuance of common stock as well as a portion of the net proceeds of the March 13, 2017 issuance of the Company’s 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027 discussed in Note 9.

NOTE 1211 – ACCUMULATED OTHER COMPREHENSIVE INCOME

(LOSS)

Accumulated other comprehensive income (loss) for the Company consists of changes in net unrealized gains and losses on investment securities available for sale and an interest rate swap derivative designated as a cash flow hedge. The following tables present a summary of the accumulated other comprehensive income (loss) balances, net of tax, as of March 31, ~~2017~~2018 and ~~2016:~~

(dollars in thousands) Unrealized
Gain (Loss)
on Derivatives Unrealized
Gain (Loss)
on Securities
Accumulated
Other
Comprehensive
Income (Loss)

Balance, January 1, 2017 $ 176 $ (1,234 ) $ (1,058 )
Current year changes, net of tax 43 (194 ) (151 )
Balance, March 31, 2017 $ 219 $ (1,428 ) $ (1,209 )

(dollars in thousands) Unrealized
Gain (Loss)
on Derivatives Unrealized
Gain (Loss)
on Securities
Accumulated
Other
Comprehensive
Income (Loss)

Balance, January 1, 2016 $ 152 $ 3,201 $ 3,353
Reclassification for gains included in net income, net of tax - (61 ) (61 )
Current year changes, net of tax (615 ) 3,734 3,119
Balance, March 31, 2016 $ (463 ) $ 6,874 $ 6,411

2017:



(dollars in thousands)	Unrealized Gain (Loss) on Derivatives			Unrealized Gain (Loss) on Securities			Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2018	$	292		$	(1,572	)	$	(1,280	)
Reclassification to retained earnings due to change in federal corporate tax rate	(53		)	(339		)	(392		)
Adjusted balance, January 1, 2018	239			(1,911		)	(1,672		)
Reclassification for gains included in net income, net of tax	—			(29		)	(29		)
Current year changes, net of tax	281			(9,403		)	(9,122		)
Balance, March 31, 2018	$	520		$	(11,343	)	$	(10,823	)



(dollars in thousands)	Unrealized Gain (Loss) on Derivatives		Unrealized Gain (Loss) on Securities			Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2017	$	176	$	(1,234	)	$	(1,058	)
Current year changes, net of tax	43		(194		)	(151		)
Balance, March 31, 2017	$	219	$	(1,428	)	$	(1,209	)

NOTE 1312 – WEIGHTED AVERAGE SHARES OUTSTANDING

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

For the Three Months
Ended March 31,
(share data in thousands) 2017 2016
Average common shares outstanding 35,664 32,752
Common share equivalents:
Stock options 120 114
Nonvested restricted share grants 256 188
Average common shares outstanding, assuming dilution 36,040 33,054



	Three Months Ended March 31,
(share data in thousands)	2018	2017
Average common shares outstanding	37,967	35,664
Common share equivalents:
Stock options	18	120
Nonvested restricted share grants	265	256
Average common shares outstanding, assuming dilution	38,250	36,040

For the three-month periods ended March 31, ~~2017~~2018 and ~~2016,~~2017, there were no potential common shares with strike prices that would cause them to be anti-dilutive.

NOTE 1413 – 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 are carried at fair value and are comprised of the following:

(dollars in thousands) March 31,
2017 December 31,
2016
Mortgage loans held for sale $ 86,635 $ 105,924
SBA loans held for sale 19,002 -
Total loans held for sale $ 105,637 $ 105,924



(dollars in thousands)	March 31, 2018		December 31, 2017
Mortgage loans held for sale	$	106,549	$	190,445
SBA loans held for sale	4,586		6,997
Total loans held for sale	$	111,135	$	197,442

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. Net gains of ~~$3.0~~$3.1 million and $3.0 million resulting from fair value changes of these mortgage loans were recorded in income during the three months ended March 31, 2018 and 2017, respectively. A net gain of $2.4 million and ~~2016, respectively. The amount does not reflect~~a net loss of $622,000 resulting from changes in the fair ~~values~~value of the related derivative financial instruments used to hedge exposure to the market-related risks associated with these mortgage ~~loans.~~loans were recorded in income during the three months ended March 31, 2018 and 2017, respectively. The change in fair value of both mortgage loans held for sale and the related derivative financial instruments are recorded in mortgage banking activity in the consolidated statements of income and comprehensive income. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal.

The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale ~~measured~~carried at fair value as of March 31, ~~2017~~2018 and December 31, ~~2016:~~

(dollars in thousands)
March 31,
2017 December 31,
2016
Aggregate fair value of mortgage loans held for sale $ 86,635 $ 105,924
Aggregate unpaid principal balance 83,649 103,691
Past-due loans of 90 days or more - -
Nonaccrual loans - -

2017:



(dollars in thousands)	March 31, 2018		December 31, 2017
Aggregate fair value of mortgage loans held for sale	$	106,549	$	190,445
Aggregate unpaid principal balance	103,485		185,814
Past-due loans of 90 days or more	—		—
Nonaccrual loans	—		—

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available for sale, mortgage loans held for sale and derivatives are recorded at fair value on a recurring basis. From time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

Fair Value Hierarchy

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

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

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

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

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

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

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

Other Investments:FHLB stock and Federal Reserve Bank stock ~~and~~are included in other investment securities. Prior to the ~~Company’s~~Company's completion of its acquisition of USPF on January 31, 2018, the minority equity investment in USPF ~~are~~was also included in other ~~investment securities at original cost basis.~~investments. These investments do not have readily determinable fair values and are carried at original cost basis. It is not practical to determine the fair value of these investments due to restrictions placed on transferability. These investments are periodically evaluated for impairment based on ultimate recovery of par value or cost basis. Cost basis approximates fair value for these investments.

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

Loans:~~The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value.~~ The fair value ~~of fixed-rate~~for loans held for investment is estimated ~~based on discounted contractual~~using an exit price methodology. An exit price methodology considers expected cash flows ~~using~~that take into account contractual loan terms, as applicable, prepayment expectations, probability of default, loss severity in the event of default, recovery lag and, in the case of variable rate loans, expectations for future interest ~~rates currently being offered~~rate movements. These cash flows are present valued at a risk adjusted discount rate, which considers the cost of funding, liquidity, servicing costs, and other factors. Because observable quoted prices seldom exist for identical or similar assets carried in loans ~~with similar terms~~held for investment, Level 3 inputs are primarily used to ~~borrowers with similar credit quality.~~determine fair value exit pricing. The fair value of impaired loans is estimated based on discounted contractual cash flows or underlying collateral values, where applicable. A loan is determined to be impaired if the Company believes it is probable that all principal and interest amounts due according to the terms of the note will not be collected as scheduled. The fair value of impaired loans is determined in accordance with ASC 310-10,Accounting by Creditors for Impairment of a Loan, and generally results in a specific reserve established through a charge to the provision for loan losses. Losses on impaired loans are charged to the allowance when management believes the uncollectability of a loan is confirmed. Management has determined that the majority of impaired loans are Level 3 assets due to the extensive use of market appraisals.

Other Real Estate Owned:The fair value of ~~other real estate owned (“OREO”)~~OREO is determined using certified appraisals and internal evaluations ~~and broker price opinions~~ that value the property at its highest and best uses by applying traditional valuation methods common to the industry. The Company does not hold any OREO for profit purposes and all other real estate is actively marketed for sale. In most cases, management has determined that additional write-downs are required beyond what is calculable from the appraisal to carry the property at levels that would attract buyers. Because this additional write-down is not based on observable inputs, management has determined that ~~other real estate owned~~OREO should be classified as Level 3.

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

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

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

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

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

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

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

~~Accrued Interest Receivable/Payable:~~

Pursuant to the clawback provisions of the loss-sharing agreements for the Company’s FDIC-assisted acquisitions, the Company may be required to reimburse the FDIC should actual losses be less than certain thresholds established in each loss-sharing agreement. The ~~carrying~~ amount of ~~accrued interest receivable~~the clawback provision for each acquisition is measured and ~~accrued interest~~recorded at fair value. The clawback amount, which is payable ~~approximates fair value.~~

~~Cash Value~~to the FDIC upon termination of ~~Bank Owned Life Insurance:~~the applicable loss-sharing agreement, is discounted using an appropriate discount rate.

Liability for USPF Acquisition Contingent Consideration: As discussed in Note 3, the selling shareholders of USPF may receive additional future cash payments based on the achievement by the Company's premium finance division of certain income targets between January 1, 2018 and June 30, 2019. The carrying value ~~of cash value of bank owned life insurance approximates fair value.~~

~~Deposits:~~~~The carrying amount of demand deposits, savings deposits and variable-rate certificates of deposit approximates fair value. The~~is used as the Level 3 fair value ~~of fixed-rate certificates of deposit is estimated based on discounted contractual cash flows using interest rates currently being offered~~estimate for ~~certificates of similar maturities.~~

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

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

this liability.

Off-Balance-Sheet Instruments: Because commitments to extend credit and standby letters of credit are typically made using variable rates and have short maturities, the carrying value and fair value are immaterial for disclosure.

Derivatives:The Company has entered into derivative financial instruments to manage interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the derivatives is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves derived from observable market interest rate curves).

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting any applicable credit enhancements such as collateral postings, thresholds, mutual puts and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself or the counterparty. However, as of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation of its

derivatives. As a result, the Company has determined that its derivative valuation in its entirety is classified in Level 2 of the fair value hierarchy.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of March 31, ~~2017~~2018 and December 31, ~~2016:~~

Fair Value Measurements on a Recurring Basis
As of March 31, 2017
(dollars in thousands) Fair Value Level 1 Level 2 Level 3
Financial assets:
U.S. government sponsored agencies $ 1,015 $ - $ 1,015 $ -
State, county and municipal securities 149,556 - 149,556 -
Corporate debt securities 44,902 - 43,402 1,500
Mortgage-backed securities 635,292 - 635,292 -
Loans held for sale 105,637 - 105,637 -
Mortgage banking derivative instruments 4,704 - 4,704 -
Total recurring assets at fair value $ 941,106 $ - $ 939,606 $ 1,500

Financial liabilities:
Derivative financial instruments $ 806 $ - $ 806 $ -
Mortgage banking derivative instruments 572 - 572 -
Total recurring liabilities at fair value $ 1,378 $ - $ 1,378 $ -

Fair Value Measurements on a Recurring Basis
As of December 31, 2016
(dollars in thousands) Fair Value Level 1 Level 2 Level 3
Financial assets:
U.S. government sponsored agencies $ 1,020 $ - $ 1,020 $ -
State, county and municipal securities 152,035 - 152,035 -
Corporate debt securities 32,172 - 30,672 1,500
Mortgage-backed securities 637,508 - 637,508 -
Loans held for sale 105,924 - 105,924 -
Mortgage banking derivative instruments 4,314 - 4,314 -
Total recurring assets at fair value $ 932,973 $ - $ 931,473 $ 1,500

Financial liabilities:
Derivative financial instruments $ 978 $ - $ 978 $ -
Total recurring liabilities at fair value $ 978 $ - $ 978 $ -

2017:



	Recurring Basis Fair Value Measurements
	March 31, 2018
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
State, county and municipal securities	$	106,274	$	—	$	106,274	$	—
Corporate debt securities	57,097		—		55,597		1,500
Mortgage-backed securities	685,214		—		685,214		—
Loans held for sale	111,135		—		111,135		—
Derivative financial instruments	61		—		61		—
Mortgage banking derivative instruments	4,905		—		4,905		—
Total recurring assets at fair value	$	964,686	$	—	$	963,186	$	1,500
Financial liabilities:
Mortgage banking derivative instruments	$	505	$	—	$	505	$	—
Total recurring liabilities at fair value	$	505	$	—	$	505	$	—



	Recurring Basis Fair Value Measurements
	December 31, 2017
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
State, county and municipal securities	$	137,794	$	—	$	137,794	$	—
Corporate debt securities	47,143		—		45,643		1,500
Mortgage-backed securities	625,936		—		625,936		—
Loans held for sale	197,442		—		197,442		—
Mortgage banking derivative instruments	2,888		—		2,888		—
Total recurring assets at fair value	$	1,011,203	$	—	$	1,009,703	$	1,500
Financial liabilities:
Derivative financial instruments	$	381	$	—	$	381	$	—
Mortgage banking derivative instruments	67		—		67		—
Total recurring liabilities at fair value	$	448	$	—	$	448	$	—

The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of March 31, ~~2017~~2018 and December 31, ~~2016:~~

Fair Value Measurements on a Nonrecurring Basis
(dollars in thousands) Fair Value Level 1 Level 2 Level 3
March 31, 2017
Impaired loans carried at fair value $ 27,643 $ - $ - $ 27,643
Other real estate owned 2,841 - - 2,841
Purchased other real estate owned 11,668 - - 11,668
Total nonrecurring assets at fair value $ 42,152 $ - $ - $ 42,152
December 31, 2016
Impaired loans carried at fair value $ 28,253 $ - $ - $ 28,253
Other real estate owned 1,172 - - 1,172
Purchased other real estate owned 12,540 - - 12,540
Total nonrecurring assets at fair value $ 41,965 $ - $ - $ 41,965

2017:



	Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
March 31, 2018
Impaired loans carried at fair value	$	26,133	$	—	$	—	$	26,133
Other real estate owned	708		—		—		708
Purchased other real estate owned	6,723		—		—		6,723
Total nonrecurring assets at fair value	$	33,564	$	—	$	—	$	33,564

December 31, 2017
Impaired loans carried at fair value	$	27,684	$	—	$	—	$	27,684
Other real estate owned	323		—		—		323
Purchased other real estate owned	9,011		—		—		9,011
Total nonrecurring assets at fair value	$	37,018	$	—	$	—	$	37,018

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

For the three months ended March 31, ~~2017~~2018 and the year ended December 31, ~~2016,~~2017, there was not a change in the methods and significant assumptions used to estimate fair value for assets and liabilities carried at fair value.

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities:

(dollars in thousands) Fair Value Valuation Technique Unobservable Inputs Range of
Discounts Weighted
Average
Discount
March 31, 2017
Recurring:
Investment securities available for sale $ 1,500 Discounted par values Credit quality of underlying issuer 0% 0 %
Nonrecurring:
Impaired loans $ 27,643 Third-party appraisals and discounted cash flows Collateral discounts and discount rates 15% - 99% 28 %
Other real estate owned $ 2,841 Third-party appraisals, sales contracts, broker price opinions Collateral discounts and estimated costs to sell 15% - 83% 21 %
Purchased other real estate owned $ 11,668 Third-party appraisals Collateral discounts and estimated costs to sell 10% - 74% 14 %

December 31, 2016
Recurring:
Investment securities available for sale $ 1,500 Discounted par values Credit quality of underlying issuer 0% 0 %
Nonrecurring:
Impaired loans $ 28,253 Third-party appraisals and discounted cash flows Collateral discounts and discount rates 15% - 100% 28 %
Other real estate owned $ 1,172 Third-party appraisals, sales contracts, broker price opinions Collateral discounts and estimated costs to sell 15% - 74% 22 %
Purchased other real estate owned $ 12,540 Third-party appraisals Collateral discounts and estimated costs to sell 10% - 74% 15 %



(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
March 31, 2018
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	26,133	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	15% - 90%	27%
Other real estate owned	$	708	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 32%	17%
Purchased other real estate owned	$	6,723	Third-party appraisals	Collateral discounts and estimated costs to sell	10% - 74%	17%

December 31, 2017
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	27,684	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	20% - 90%	24%
Other real estate owned	$	323	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 15%	15%
Purchased other real estate owned	$	9,011	Third-party appraisals	Collateral discounts and estimated costs to sell	10% - 74%	26%

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 at March 31, 2017 Using:
(dollars in thousands) Carrying
Amount Level 1 Level 2 Level 3 Total
Financial assets:
Cash and due from banks $ 127,164 $ 127,164 $ - $ - $ 127,164
Federal funds sold and interest-bearing accounts 232,045 232,045 - - 232,045
Loans, net 5,268,621 - - 5,289,414 5,289,414
Accrued interest receivable 20,412 20,412 - - 20,412
Financial liabilities:
Deposits $ 5,642,369 $ - $ 5,642,757 $ - $ 5,642,757
Securities sold under agreements to repurchase 40,415 40,415 - - 40,415
Other borrowings 525,669 - 526,914 - 526,914
Subordinated deferrable interest debentures 84,559 - 68,507 - 68,507
FDIC loss-share payable 6,489 - - 8,002 8,002
Accrued interest payable 1,614 1,614 - - 1,614

follows. The methods used to estimate the fair value of financial instruments at December 31, 2017 approximated an entry price. In accordance with the adoption of ASU 2016-01, the methods utilized to estimate the fair value of financial instruments at March 31, 2018 represent an approximation of exit price; however, an actual price derived in an active market may differ.

Fair Value Measurements at December 31, 2016 Using:
(dollars in thousands) Carrying
Amount Level 1 Level 2 Level 3 Total
Financial assets:
Cash and due from banks $ 127,164 $ 127,164 $ - $ - $ 127,164
Federal funds sold and interest-bearing accounts 71,221 71,221 - - 71,221
Loans, net 5,212,153 - - 5,236,034 5,236,034
Accrued interest receivable 22,278 22,278 - - 22,278
Financial liabilities:
Deposits 5,575,163 - 5,575,288 - 5,575,288
Securities sold under agreements to repurchase 53,505 53,505 - - 53,505
Other borrowings 492,321 - 492,321 - 492,321
Subordinated deferrable interest debentures 84,228 - 67,321 - 67,321
FDIC loss-share payable 6,313 - - 8,243 8,243
Accrued interest payable 1,501 1,501 - - 1,501



			Fair Value Measurements
			March 31, 2018
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	123,945	$	123,945	$	—	$	—	$	123,945
Federal funds sold and interest-bearing accounts	210,930		210,930		—		—		210,930
Loans, net	6,137,838		—		—		6,127,411		6,127,411
Accrued interest receivable	24,818		24,818		—		—		24,818
Financial liabilities:
Deposits	$	6,446,165	$	—	$	6,447,150	$	—	$	6,447,150
Securities sold under agreements to repurchase	23,270		23,270		—		—		23,270
Other borrowings	555,535		—		556,707		—		556,707
Subordinated deferrable interest debentures	85,881		—		80,266		—		80,266
FDIC loss-share payable	9,255		—		—		9,880		9,880
Liability for USPF acquisition contingent consideration	5,719		—		—		5,719		5,719
Accrued interest payable	2,367		2,367		—		—		2,367



			Fair Value Measurements
			December 31, 2017
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	139,313	$	139,313	$	—	$	—	$	139,313
Federal funds sold and interest-bearing accounts	191,345		191,345		—		—		191,345
Loans, net	5,992,880		—		—		5,960,963		5,960,963
Accrued interest receivable	26,005		26,005		—		—		26,005
Financial liabilities:
Deposits	$	6,625,845	$	—	$	6,627,773	$	—	$	6,627,773
Securities sold under agreements to repurchase	30,638		30,638		—		—		30,638
Other borrowings	250,554		—		271,759		—		251,759
Subordinated deferrable interest debentures	85,550		—		74,243		—		74,243
FDIC loss-share payable	8,803		—		—		9,548		9,548
Accrued interest payable	3,258		3,258		—		—		3,258

NOTE 1514 – SEGMENT REPORTING

The Company has the following five reportable segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division, SBA Division and Premium Finance Division. The Banking Division derives its revenues from the delivery of full-service financial services, including commercial loans, consumer loans and deposit accounts. The Retail Mortgage Division derives its revenues from the origination, sales and servicing of one-to-four family residential mortgage loans. The Warehouse Lending Division derives its revenues from the origination and servicing of warehouse lines to other businesses that are secured by underlying one-to-four family residential mortgage loans. The SBA Division derives its revenues from the origination, sales and servicing of SBA loans. The Premium Finance Division derives its revenues from the origination and servicing of commercial insurance premium finance loans.

The Banking, Retail Mortgage, Warehouse Lending, SBA and Premium Finance Divisions are managed as separate business units because of the different products and services they provide. The Company evaluates performance and allocates resources based on profit or loss from operations. There are no material intersegment sales or transfers.

The following tables present selected financial information with respect to the Company’s reportable business segments for the three months ended March 31, 2018 and 2017:



	Three Months Ended March 31, 2018
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division		SBA Division		Premium Finance Division		Total
Interest income	$	60,896	$	6,822	$	2,752	$	1,431	$	7,611	$	79,512
Interest expense	5,537		1,825		897		507		1,945		10,711
Net interest income	55,359		4,997		1,855		924		5,666		68,801
Provision for loan losses	888		217		—		537		159		1,801
Noninterest income	13,099		11,585		397		1,370		13		26,464
Noninterest expense
Salaries and employee benefits	22,068		7,742		138		740		1,401		32,089
Equipment and occupancy expenses	5,477		593		—		58		70		6,198
Data processing and telecommunications expenses	6,304		389		33		9		400		7,135
Other expenses	11,080		1,731		52		236		577		13,676
Total noninterest expense	44,929		10,455		223		1,043		2,448		59,098
Income before income tax expense	22,641		5,910		2,029		714		3,072		34,366
Income tax expense	5,242		1,244		426		150		644		7,706
Net income	$	17,399	$	4,666	$	1,603	$	564	$	2,428	$	26,660

Total assets	$	6,464,130	$	613,706	$	247,257	$	109,011	$	588,724	$	8,022,828
Goodwill	125,532		—		—		—		82,981		208,513
Other intangible assets, net	12,562		—		—		—		—		12,562



	Three Months Ended March 31, 2017
(dollars in thousands)	Banking Division		Retail Mortgage Division		Warehouse Lending Division			SBA Division		Premium Finance Division		Total
Interest income	$	54,212	$	4,054	$	1,333		$	1,213	$	6,238	$	67,050
Interest expense	4,086		1,078		228			306		762		6,460
Net interest income	50,126		2,976		1,105			907		5,476		60,590
Provision for loan losses	1,982		8		(232		)	48		30		1,836
Noninterest income	13,013		10,513		319			1,815		46		25,706
Noninterest expense
Salaries and employee benefits	18,844		7,216		147			591		996		27,794
Equipment and occupancy expenses	5,257		519		1			51		49		5,877
Data processing and telecommunications expenses	6,043		317		27			1		184		6,572
Other expenses	9,241		1,141		32			211		2,225		12,850
Total noninterest expense	39,385		9,193		207			854		3,454		53,093
Income before income tax expense	21,772		4,288		1,449			1,820		2,038		31,367
Income tax expense	6,856		1,501		507			637		713		10,214
Net income	$	14,916	$	2,787	$	942		$	1,183	$	1,325	$	21,153

Total assets	$	6,100,876	$	378,897	$	107,937		$	76,405	$	430,741	$	7,094,856
Goodwill	125,532		—		—			—		—		125,532
Other intangible assets, net	16,391		—		—			—		—		16,391

NOTE 15 – REVENUE FROM CONTRACTS WITH CUSTOMERS

With the exception of gains/losses on the sale of OREO discussed below, revenue from contracts with customers ("ASC 606 Revenue") is recorded in the service charges on deposit accounts category and the other service charges, commissions and fees category in the Company's consolidated statement of income and comprehensive income as part of noninterest income. Substantially all ASC 606 Revenue is recorded in the Banking Division. The following provides information on these noninterest income categories that contain ASC 606 Revenue for the periods indicated.



	Three Months Ended
(dollars in thousands)	March 31, 2018		March 31, 2017
Service charges on deposit accounts
ASC 606 revenue items
Debit card interchange fees	$	4,210	$	4,046
Overdraft fees	4,108		4,444
Other service charges on deposit accounts	1,910		2,073
Total ASC 606 revenue included in service charges on deposits accounts	10,228		10,563
Total service charges on deposit accounts	$	10,228	$	10,563

Other service charges, commissions and fees
ASC 606 revenue items
ATM fees	$	661	$	674
Total ASC 606 revenue included in other service charges, commission and fees	661		674
Other	58		35
Total other service charges, commission and fees	$	719	$	709

Debit Card Interchange Fees - The Company earns debit card interchange fees from debit cardholder transactions conducted through various payment networks. Interchange fees from debit cardholders transactions represent a percentage of the underlying transaction amount and are recognized daily, concurrently with the transaction processing services provided to the debit cardholder.

Overdraft Fees - Overdraft fees are recognized at the point in time that the overdraft occurs.

Other Service Charges on Deposit Accounts - Other service charges on deposit accounts include both transaction-based fees and account maintenance fees. Transaction based fees, which include wire transfer fees, stop payment charges, statement rendering, and automated clearing house ("ACH") fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation.

ATM Fees - Transaction-based ATM usage fees are recognized at the time the transaction is executed as that is the point at which the Company satisfies the performance obligation.

Gains/Losses on the Sale of OREO - The net gains and losses on sales of OREO are recorded in credit resolution related expenses in the Company's consolidated statement of income and comprehensive income. The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. For the three months ended March 31, 2018, net losses of $9,000 were recognized on the sale of OREO. For the three months ended March 31, 2017, ~~and 2016:~~

Three Months Ended
March 31, 2017
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 54,212 $ 4,054 $ 1,333 $ 1,213 $ 6,238 $ 67,050
Interest expense 4,086 1,078 228 306 762 6,460
Net interest income 50,126 2,976 1,105 907 5,476 60,590
Provision for loan losses 1,982 8 (232 ) 48 30 1,836
Noninterest income 13,013 10,513 319 1,815 46 25,706
Noninterest expense
Salaries and employee benefits 18,844 7,216 147 591 996 27,794
Equipment and occupancy expenses 5,257 519 1 51 49 5,877
Data processing and telecommunications expenses 6,043 317 27 1 184 6,572
Other expenses 9,241 1,141 32 211 2,225 12,850
Total noninterest expense 39,385 9,193 207 854 3,454 53,093
Income before income tax expense 21,772 4,288 1,449 1,820 2,038 31,367
Income tax expense 6,856 1,501 507 637 713 10,214
Net income $ 14,916 $ 2,787 $ 942 $ 1,183 $ 1,325 $ 21,153
Total assets $ 6,100,876 $ 378,897 $ 107,937 $ 76,405 $ 430,741 $ 7,094,856
Goodwill 125,532 - - - - 125,532
Other intangible assets, net 16,391 - - - - 16,391

net gains of $424,000 were recognized on the sale of OREO.

Three Months Ended
March 31, 2016
(dollars in thousands) Banking
Division Retail
Mortgage
Division Warehouse
Lending
Division SBA
Division Premium
Finance
Division Total
Interest income $ 49,779 $ 3,020 $ 1,019 $ 741 $ - $ 54,559
Interest expense 3,296 590 92 145 - 4,123
Net interest income 46,483 2,430 927 596 - 50,436
Provision for loan losses 681 - - - - 681
Noninterest income 12,735 9,624 333 1,594 - 24,286
Noninterest expense
Salaries and employee benefits 18,989 6,347 188 663 - 26,187
Equipment and occupancy expenses 5,150 488 1 61 - 5,700
Data processing and telecommunications expenses 5,820 272 20 1 - 6,113
Other expenses 16,436 956 25 183 - 17,600
Total noninterest expense 46,395 8,063 234 908 - 55,600
Income before income tax expense 12,142 3,991 1,026 1,282 - 18,441
Income tax expense 3,919 1,397 359 449 - 6,124
Net income $ 8,223 $ 2,594 $ 667 $ 833 $ - $ 12,317
Total assets $ 5,634,850 $ 260,038 $ 137,461 $ 65,422 $ - $ 6,097,771
Goodwill 121,512 - - - - 121,512
Other intangible assets, net 21,892 - - - - 21,892

NOTE 16 – ~~REGULATORY MATTERS~~

SUBSEQUENT EVENTS

As discussed in Note 8, at March 31, 2018, the Company had a revolving credit arrangement with a regional bank with a maximum line amount of $30.0 million. This line of credit is secured by subsidiary bank stock, expires on September 26, 2020, and bears a variable interest rate of 90-day LIBOR plus 3.50%. At March 31, 2018, there was no principal amount outstanding on this line of credit, resulting in $30.0 million available for borrowing under the revolving credit arrangement. On ~~December 16, 2016,~~April 25, 2018, the ~~Bank entered into a Stipulation~~maximum line amount under the revolving credit arrangement was increased to ~~the Issuance of a Consent Order~~$100.0 million with its bank regulatory agencies, the FDIC and the Georgia Department of Banking and Finance (the “GDBF”), consenting to the issuance of a consent order (the “Order”) relating to the Bank’s Bank Secrecy Act (together with its implementing regulations, the “BSA”) compliance program. In consenting to the issuance of the Order, the Bank did not admit or deny any charges of unsafe or unsound banking practices related to its BSA compliance program.

~~Under the~~all other terms of the ~~Order,~~credit arrangement remaining unchanged.

On May 8, 2018, the Bank sold $15.1 million of performing loans that were not classified as available for sale as of March 31, 2018. The loans were sold at par and no gain or ~~its board of directors is required to take certain affirmative actions to comply with~~loss was recorded on the Bank’s obligations under the BSA. These include, but are not limited to, the following: strengthening the board of directors’ oversight of BSA activities; enhancing and adopting a revised BSA compliance program; completing a BSA risk assessment; developing a revised system of internal controls designed to ensure full compliance with the BSA; reviewing and revising customer due diligence and risk assessment processes, policies and procedures; developing, adopting and implementing effective BSA training programs; assessing BSA staffing needs and resources and appointing a qualified BSA officer; establishing an independent BSA testing program; ensuring that all reports required by the BSA are accurately and properly filed; and engaging an independent firm to review past account activity to determine whether suspicious activity was properly identified and reported.

Prior to implementation, certain of the actions required by the Order were subject to review by, and approval or non-objection from, the FDIC and the GDBF. The Order will remain in effect and be enforceable until it is modified, terminated, suspended or set aside by the FDIC and the GDBF. The Bank expects that it will continue to meet the required actions within the time periods specified in the Order based upon ongoing communications with its regulators.

sale.

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: legislative and regulatory initiatives; additional competition in our markets; potential business strategies, including acquisitions or dispositions of assets or internal restructuring, that may be pursued by us; state and federal banking regulations; changes in or application of environmental and other laws and regulations to which we are subject; political, legal and economic conditions and developments; financial market conditions and the results of financing efforts; changes in commodity prices and interest rates; weather, natural disasters and other catastrophic events; and other factors discussed in our filings with the Securities and Exchange Commission 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 March 31, ~~2017,~~2018, as compared with December 31, ~~2016,~~2017, and operating results for the three-month periods ended March 31, ~~2017~~2018 and ~~2016.~~2017. These comments should be read in conjunction with the Company’s unaudited consolidated financial statements and accompanying notes appearing elsewhere herein.

This discussion contains certain performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management of the Company uses these non-GAAP measures in its analysis of the Company’s performance. These measures are useful when evaluating the underlying performance and efficiency of the Company’s operations and balance sheet. The Company’s management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant gains and charges in the current period. The Company’s management believes that investors may use these non-GAAP financial measures to evaluate the Company’s financial performance without the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Non-GAAP measures include tangible common equity, tangible book value per common share, adjusted 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.

The following table sets forth unaudited selected financial data for the previous five quarters. This data should be read in conjunction with the unaudited consolidated financial statements and the notes thereto and the information contained in this Item 2.

(in thousands, except share data) First
Quarter
2017 Fourth
Quarter
2016 Third
Quarter
2016 Second
Quarter
2016 First
Quarter
2016

Results of Operations:
Net interest income $ 60,590 $ 57,279 $ 57,067 $ 54,589 $ 50,436
Net interest income (tax equivalent) 62,108 58,897 58,024 55,525 51,177
Provision for loan losses 1,836 1,710 811 889 681
Non-interest income 25,706 24,272 28,864 28,379 24,286
Non-interest expense 53,093 54,677 53,199 52,359 55,600
Income tax expense 10,214 6,987 10,364 9,671 6,124
Net income available to common shareholders 21,153 18,177 21,557 20,049 12,317
Selected Average Balances:
Investment securities $ 862,616 $ 856,671 $ 857,433 $ 850,435 $ 806,699
Loans held for sale 77,617 102,926 105,859 96,998 82,803
Loans 3,678,149 3,145,714 2,897,771 2,653,171 2,410,747
Purchased loans 1,034,983 1,101,907 1,199,175 1,239,409 970,570
Purchased loan pools 547,057 590,617 629,666 630,503 627,178
Earning assets 6,347,807 5,925,634 5,780,455 5,574,608 5,106,011
Assets 6,915,965 6,573,344 6,330,350 6,138,757 5,618,397
Deposits 5,491,324 5,490,657 5,221,219 5,211,355 4,874,310
Shareholders’ equity 695,830 653,991 640,382 616,361 542,264
Period-End Balances:
Investment securities $ 866,715 $ 852,199 $ 862,702 $ 862,771 $ 849,905
Loans held for sale 105,637 105,924 126,263 102,757 97,439
Loans 3,785,480 3,626,821 3,091,039 2,819,071 2,528,007
Purchased loans 1,006,935 1,069,191 1,129,381 1,193,635 1,260,198
Purchased loan pools 529,099 568,314 624,886 610,425 656,734
Earning assets 6,525,911 6,293,670 5,925,072 5,656,932 5,499,656
Total assets 7,094,856 6,892,031 6,493,495 6,221,294 6,097,771
Deposits 5,642,369 5,575,163 5,306,098 5,179,532 5,230,787
Shareholders’ equity 758,216 646,437 642,583 625,915 600,828
Per Common Share Data:
Earnings per share - basic $ 0.59 $ 0.52 $ 0.62 $ 0.58 $ 0.38
Earnings per share - diluted $ 0.59 $ 0.52 $ 0.61 $ 0.57 $ 0.37
Book value per common share $ 20.42 $ 18.51 $ 18.42 $ 17.96 $ 17.25
Tangible book value per common share $ 16.60 $ 14.42 $ 14.38 $ 13.89 $ 13.13
End of period shares outstanding 37,128,714 34,921,474 34,891,304 34,847,311 34,837,454
Weighted Average Shares Outstanding:
Basic 35,664,420 34,915,459 34,869,747 34,832,621 32,752,063
Diluted 36,040,240 35,293,035 35,194,739 35,153,311 33,053,554
Market Price:
High intraday price $ 49.50 $ 47.70 $ 36.20 $ 32.76 $ 33.81
Low intraday price $ 41.60 $ 34.61 $ 28.90 $ 27.73 $ 24.96
Closing price for quarter $ 46.10 $ 43.60 $ 34.95 $ 29.70 $ 29.58
Average daily trading volume 242,982 191,894 166,841 215,409 253,779
Cash dividends declared per share $ 0.10 $ 0.10 $ 0.10 $ 0.05 $ 0.05
Closing price to book value 2.26 2.36 1.90 1.65 1.71
Performance Ratios:
Return on average assets 1.24 % 1.10 % 1.35 % 1.31 % 0.88 %
Return on average common equity 12.33 % 11.06 % 13.39 % 13.08 % 9.14 %
Average loans to average deposits 97.20 % 89.99 % 92.55 % 88.65 % 83.94 %
Average equity to average assets 10.06 % 9.95 % 10.12 % 10.04 % 9.65 %
Net interest margin (tax equivalent) 3.97 % 3.95 % 3.99 % 4.01 % 4.03 %
Efficiency ratio 61.52 % 67.05 % 61.91 % 63.11 % 74.41 %




(in thousands, except share and per share data)	First Quarter 2018		Fourth Quarter 2017		Third Quarter 2017		Second Quarter 2017		First Quarter 2017
Results of Operations:
Net interest income	$	68,801	$	69,523	$	66,855	$	63,157	$	60,590
Net interest income (tax equivalent)	69,787		71,537		68,668		64,773		62,108
Provision for loan losses	1,801		2,536		1,787		2,205		1,836
Non-interest income	26,464		23,563		26,999		28,189		25,706
Non-interest expense	59,098		59,337		63,767		55,739		53,093
Income tax expense	7,706		22,063		8,142		10,315		10,214
Net income available to common shareholders	26,660		9,150		20,158		23,087		21,153
Selected Average Balances:
Investment securities	$	860,419	$	850,817	$	864,456	$	866,960	$	862,616
Loans held for sale	138,129		138,468		126,798		110,933		77,617
Loans	4,902,082		4,692,997		4,379,082		3,994,213		3,678,149
Purchased loans	842,509		888,854		937,595		973,521		1,034,983
Purchased loan pools	325,113		446,677		475,742		516,949		547,057
Earning assets	7,215,742		7,202,103		6,892,939		6,584,386		6,347,807
Assets	7,823,451		7,777,996		7,461,367		7,152,024		6,915,965
Deposits	6,383,513		6,372,259		5,837,154		5,671,394		5,491,324
Shareholders’ equity	849,346		812,264		796,856		774,664		695,830
Period-End Balances:
Investment securities	$	880,812	$	853,143	$	867,570	$	861,188	$	866,715
Loans held for sale	111,135		197,442		137,392		146,766		105,637
Loans	5,051,986		4,856,514		4,574,678		4,230,228		3,785,480
Purchased loans	818,587		861,595		917,126		950,499		1,006,935
Purchased loan pools	319,598		328,246		465,218		490,114		529,099
Earning assets	7,393,048		7,288,285		7,074,828		6,816,606		6,525,911
Total assets	8,022,828		7,856,203		7,649,820		7,397,858		7,094,856
Deposits	6,446,165		6,625,845		5,895,504		5,793,397		5,642,369
Shareholders’ equity	868,944		804,479		801,921		782,682		758,216
Per Common Share Data:
Earnings per share - basic	$	0.70	0.25		0.54		0.62		0.59
Earnings per share - diluted	$	0.70	0.24		0.54		0.62		0.59
Book value per common share	$	22.67	$	21.59	$	21.54	$	21.03	$	20.42
Tangible book value per common share	$	16.90	$	17.86	$	17.78	$	17.24	$	16.60
End of period shares outstanding	38,327,081		37,260,012		37,231,049		37,222,904		37,128,714



(in thousands, except share and per share data)	First Quarter 2018			Fourth Quarter 2017			Third Quarter 2017			Second Quarter 2017			First Quarter 2017
Weighted Average Shares Outstanding:
Basic	37,966,781			37,238,564			37,225,418			37,162,810			35,664,420
Diluted	38,250,122			37,556,335			37,552,667			37,489,348			36,040,240
Market Price:
High intraday price	$	59.05		$	51.30		$	51.28		$	49.80		$	49.50
Low intraday price	$	47.90		$	44.75		$	41.05		$	42.60		$	41.60
Closing price for quarter	$	52.90		$	48.20		$	48.00		$	48.20		$	46.10
Average daily trading volume	235,964			206,178			168,911			169,617			242,982
Cash dividends declared per share	$	0.10		$	0.10		$	0.10		$	0.10		$	0.10
Closing price to book value	2.33			2.23			2.23			2.29			2.26
Performance Ratios:
Return on average assets	1.38		%	0.47		%	1.07		%	1.29		%	1.24		%
Return on average common equity	12.73		%	4.47		%	10.04		%	11.95		%	12.33		%
Average loans to average deposits	97.25		%	96.78		%	101.41		%	98.66		%	97.20		%
Average equity to average assets	10.86		%	10.44		%	10.68		%	10.83		%	10.06		%
Net interest margin (tax equivalent)	3.92		%	3.94		%	3.95		%	3.95		%	3.97		%
Efficiency ratio	62.04		%	63.74		%	67.94		%	61.02		%	61.52		%

Non-GAAP Measures Reconciliation -
Tangible book value per common share:
Total shareholders’ equity	$	868,944		$	804,479		$	801,921		$	782,682		$	758,216
Less:
Goodwill	208,513			125,532			125,532			125,532			125,532
Other intangible assets, net	12,562			13,496			14,437			15,378			16,391
Tangible common equity	$	647,869		$	665,451		$	661,952		$	641,772		$	616,293
End of period shares outstanding	38,327,081			37,260,012			37,231,049			37,222,904			37,128,714
Book value per common share	$	22.67		$	21.59		$	21.54		$	21.03		$	20.42
Tangible book value per common share	16.90			17.86			17.78			17.24			16.60

Results of Operations for the Three Months Ended March 31, ~~2017~~2018 and ~~2016~~

2017

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of $26.7 million, or $0.70 per diluted share, for the quarter ended March 31, 2018, compared with $21.2 million, or $0.59 per diluted share, for the ~~quarter ended March 31, 2017, compared with $12.3 million, or $0.37 per diluted share, for the~~ same period in ~~2016.~~2017. The Company’s return on average assets and average shareholders’ equity were 1.38% and 12.73%, respectively, in the first quarter of 2018, compared with 1.24% and 12.33%, respectively, in the first quarter of ~~2017, compared with 0.88% and 9.14%, respectively, in the first quarter of 2016.~~2017. During the first quarter of ~~2017~~2018, the Company incurred pre-tax merger and ~~2016,~~conversion charges of $835,000 and pre-tax losses on the sale of premises of $583,000. During the first quarter of 2017, the Company incurred pre-tax merger and conversion charges of $402,000 and ~~$6.4 million, respectively, as well as~~ pre-tax losses on the sale of premises ~~totaling $295,000 in 2017 and pre-tax gains on the sale~~ of ~~premises of $77,000 in 2016.~~$295,000. Excluding these merger and conversion charges and losses ~~and gains~~ on the sale of premises, the Company’s net income would have been $27.8 million, or $0.73 per diluted share, for the first quarter of 2018 and $21.6 million, or $0.60 per diluted share, for the first quarter of ~~2017 and $16.4 million, or $0.50 per diluted share, for the first quarter of 2016.~~

2017.

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

For the Three Months
Ended March 31,
(dollars in thousands) 2017 2016
Net income available to common shareholders $ 21,153 $ 12,317
Adjustment items:
Merger and conversion charges 402 6,359
Losses (gains) on sale of premises 295 (77 )
Tax effect of management adjusted charges (244 ) (2,199 )

After tax management-adjusted charges 453 4,083

Adjusted operating net income $ 21,606 $ 16,400



	Three Months Ended March 31,
(in thousands, except share and per share data)	2018			2017
Net income available to common shareholders	$	26,660		$	21,153
Adjustment items:
Merger and conversion charges	835			402
Losses on the sale of premises	583			295
Tax effect of adjustment items	(298		)	(244		)
After tax adjustment items	1,120			453
Adjusted net income	$	27,780		$	21,606

Weighted average common shares outstanding - diluted	38,250,122			36,040,240
Net income per diluted share	$	0.70		$	0.59
Adjusted net income per diluted share	$	0.73		$	0.60

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 first quarter of 2018 and 2017, ~~and 2016,~~ respectively:

Three Months Ended
March 31, 2018
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 60,896
$ 6,822
$ 2,752
$ 1,431
$ 7,611
$ 79,512
Interest expense 5,537
1,825
897
507
1,945
10,711
Net interest income 55,359
4,997
1,855
924
5,666
68,801
Provision for loan losses 888
217
—
537
159
1,801
Noninterest income 13,099
11,585
397
1,370
13
26,464
Noninterest expense

Salaries and employee benefits 22,068
7,742
138
740
1,401
32,089
Equipment and occupancy expenses 5,477
593
—
58
70
6,198
Data processing and telecommunications expenses 6,304
389
33
9
400
7,135
Other expenses 11,080
1,731
52
236
577
13,676
Total noninterest expense 44,929
10,455
223
1,043
2,448
59,098
Income before income tax expense 22,641
5,910
2,029
714
3,072
34,366
Income tax expense 5,242
1,244
426
150
644
7,706
Net income $ 17,399
$ 4,666
$ 1,603
$ 564
$ 2,428
$ 26,660

Three Months Ended
March 31, 2017
(dollars in thousands)
Banking
Division

Retail
Mortgage
Division

Warehouse
Lending
Division

SBA
Division

Premium
Finance
Division
Total
Interest income $ 54,212
$ 4,054
$ 1,333
$ 1,213
$ 6,238
$ 67,050
Interest expense 4,086
1,078
228
306
762
6,460
Net interest income 50,126
2,976
1,105
907
5,476
60,590
Provision for loan losses 1,982
8
(232 ) 48
30
1,836
Noninterest income 13,013
10,513
319
1,815
46
25,706
Noninterest expense

Salaries and employee benefits 18,844
7,216
147
591
996
27,794
Equipment and occupancy expenses 5,257
519
1
51
49
5,877
Data processing and telecommunications expenses 6,043
317
27
1
184
6,572
Other expenses 9,241
1,141
32
211
2,225
12,850
Total noninterest expense 39,385
9,193
207
854
3,454
53,093
Income before income tax expense 21,772
4,288
1,449
1,820
2,038
31,367
Income tax expense 6,856
1,501
507
637
713
10,214
Net income $ 14,916
$ 2,787
$ 942
$ 1,183
$ 1,325
$ 21,153

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average yield/rate paid for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the three months ended March 31, ~~2017~~2018 and ~~2016.~~2017. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate for 2018 and a 35% federal tax ~~rate.~~

Quarter Ended
March 31,
2017 2016
(dollars in thousands)
Average
Balance Interest
Income/
Expense Average
Yield/
Rate Paid Average
Balance Interest
Income/
Expense Average
Yield/
Rate Paid
Assets
Interest-earning assets:
Federal funds sold and interest-bearing deposits in banks $ 147,385 $ 313 0.86 % $ 208,014 $ 336 0.65 %
Investment securities 862,616 5,440 2.56 806,699 5,188 2.59
Loans held for sale 77,617 653 3.41 82,803 755 3.67
Loans 3,678,149 43,157 4.76 2,410,747 28,684 4.79
Purchased loans 1,034,983 15,173 5.95 970,570 15,193 6.30
Purchased loan pools 547,057 3,832 2.84 627,178 5,144 3.30
Total interest-earning assets 6,347,807 68,568 4.38 5,106,011 55,300 4.36
Noninterest-earning assets 568,158 512,386
Total assets $ 6,915,965 $ 5,618,397

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits $ 2,925,280 $ 2,078 0.29 % $ 2,666,383 $ 1,551 0.23 %
Time deposits 961,549 1,685 0.71 845,920 1,190 0.57
Federal funds purchased and securities sold under agreements to repurchase 42,589 20 0.19 52,787 35 0.27
FHLB advances 525,583 907 0.70 9,648 23 0.96
Other borrowings 47,738 559 4.75 42,096 370 3.54
Subordinated deferrable interest debentures 84,379 1,211 5.82 72,589 954 5.29
Total interest-bearing liabilities 4,587,118 6,460 0.57 3,689,423 4,123 0.45
Demand deposits 1,604,495 1,362,007
Other liabilities 28,522 24,703
Shareholders’ equity 695,830 542,264
Total liabilities and shareholders’ equity $ 6,915,965 $ 5,618,397
Interest rate spread 3.81 % 3.91 %
Net interest income $ 62,108 $ 51,177
Net interest margin 3.97 % 4.03 %

rate for 2017.



	Quarter Ended March 31,
	2018					2017
(dollars in thousands)	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid	Average Balance		Interest Income/ Expense		Average Yield/ Rate Paid
Assets
Interest-earning assets:
Federal funds sold and interest-bearing deposits in banks	$	147,490	$	716	1.97%	$	147,385	$	313	0.86%
Investment securities	860,419		5,615		2.65%	862,616		5,440		2.56%
Loans held for sale	138,129		1,210		3.55%	77,617		653		3.41%
Loans	4,902,082		58,771		4.86%	3,678,149		43,157		4.76%
Purchased loans	842,509		11,762		5.66%	1,034,983		15,173		5.95%
Purchased loan pools	325,113		2,424		3.02%	547,057		3,832		2.84%
Total interest-earning assets	7,215,742		80,498		4.52%	6,347,807		68,568		4.38%
Noninterest-earning assets	607,709					568,158
Total assets	$	7,823,451				$	6,915,965

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits	$	3,586,369	$	4,526	0.51%	$	2,925,280	$	2,078	0.29%
Time deposits	1,016,406		2,246		0.90%	961,549		1,685		0.71%
Federal funds purchased and securities sold under agreements to repurchase	20,909		9		0.17%	42,589		20		0.19%
FHLB advances	371,556		1,457		1.59%	525,583		907		0.70%
Other borrowings	75,553		1,134		6.09%	47,738		559		4.75%
Subordinated deferrable interest debentures	85,701		1,339		6.34%	84,379		1,211		5.82%
Total interest-bearing liabilities	5,156,494		10,711		0.84%	4,587,118		6,460		0.57%
Demand deposits	1,780,738					1,604,495
Other liabilities	36,873					28,522
Shareholders’ equity	849,346					695,830
Total liabilities and shareholders’ equity	$	7,823,451				$	6,915,965
Interest rate spread					3.68%					3.81%
Net interest income			$	69,787				$	62,108
Net interest margin					3.92%					3.97%

On a tax-equivalent basis, net interest income for the first quarter of ~~2017~~2018 was ~~$62.1~~$69.8 million, an increase of ~~$10.9~~$7.7 million, or ~~21.4%~~12.3%, compared with ~~$51.2~~$62.1 million reported in the same quarter in ~~2016.~~2017. The higher net interest income is a result of growth in average interest earning assets which increased ~~$1.2 billion,~~$867.9 million, or ~~24.3%~~13.7%, from ~~$5.1~~$6.35 billion in the first quarter of ~~2016~~2017 to ~~$6.3~~$7.22 billion for the first quarter of ~~2017.~~2018. The Company’s net interest margin ~~increased~~decreased during the first quarter of ~~2017~~2018 to ~~3.97%~~3.92%, compared with ~~3.95% during the fourth quarter of 2016, but decreased compared with 4.03%~~3.97% reported in the first quarter of ~~2016.~~

2017 and 3.94% reported in the fourth quarter of 2017.

Total interest income, on a tax-equivalent basis, increased to $80.5 million during the first quarter of ~~2017 was $68.6 million,~~2018, compared with ~~$55.3~~$68.6 million in the same quarter of ~~2016.~~2017. Yields on earning assets increased to ~~4.38%,~~4.52% during the first quarter of 2018, compared with ~~4.36%~~4.38% reported in the first quarter of ~~2016.~~2017. During the first quarter of ~~2017,~~2018, loans comprised ~~84.1%~~86.0% of earning assets, compared with ~~80.1%~~84.1% in the same quarter of ~~2016.~~2017. This increase is a result of growth in average legacy loans which increased ~~$1.3~~$1.22 billion, or ~~52.6%~~33.3%, to ~~$3.7~~$4.90 billion in the first quarter ~~2017~~2018 from ~~$2.4~~$3.68 billion in the same period of ~~2016.~~2017. Yields on legacy loans ~~decreased~~increased to ~~4.76%~~4.86% in the first quarter of ~~2017,~~2018, compared with ~~4.79%~~4.76% in the same period of ~~2016.~~2017. The yield on purchased loans decreased from ~~6.30%~~5.95% in the first quarter of ~~2016~~2017 to ~~5.95%~~5.66% during the first quarter of ~~2017.~~2018. Accretion income for the first quarter of ~~2017~~2018 was ~~$2.8~~$1.4 million, compared with ~~$2.9~~$2.2 million in the fourth quarter of 2017 and $2.8 million in the first quarter of ~~2016.~~2017. Excluding the effect of accretion on purchased loans, the yield on purchased loans was ~~5.08%~~4.84% for the first ~~three months 2016,~~quarter of 2017, compared with ~~4.84%~~4.97% in the same period of ~~2017.~~2018. Yields on ~~purchase~~purchased loan pools ~~declined~~increased from ~~3.30%~~2.84% in the first quarter of ~~2016~~2017 to ~~2.84%~~3.02% in the same period in ~~2017 due to higher purchase premium amortization reflecting accelerated prepayments.~~2018. Management anticipates improving economic conditions and increased loan demand will provide consistent interest income.

The yield on total interest-bearing liabilities increased from ~~0.45% in the first quarter of 2016 to~~ 0.57% in the first quarter of ~~2017.~~2017 to 0.84% in the first quarter of 2018. Total funding costs, inclusive of noninterest bearing demand deposits, increased to 0.63% in the first quarter of 2018, compared with 0.42% during the first quarter of 2017. Deposit costs increased from 0.28% in the first quarter of 2017 ~~compared with 0.33% during the first quarter of 2016. Deposit costs increased from 0.23%~~to 0.43% in the first quarter of ~~2016 to 0.28% in the first quarter of 2017.~~2018. Non-deposit funding costs ~~decreased~~increased from ~~3.14% in the first quarter of 2016 to~~ 1.56% in the first quarter of ~~2017.~~2017 to 2.89% in the first quarter of 2018. The ~~decrease~~increase in non-deposit funding costs was driven primarily by ~~an increased utilization of low rate~~higher market rates being paid on short-term FHLB ~~advances.~~advances coupled with an increase in the average rate paid on other borrowings related to the March 2017 issuance of $75.0 million of 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027. Ongoing efforts to maintain the percentage of funding from transaction deposits have succeeded such that non-CD deposits averaged ~~82.5%~~84.1% of total deposits in the first quarter of ~~2017,~~2018, compared with ~~82.6%~~82.5% during the first quarter of ~~2016.~~2017. Average balances of interest bearing deposits and their respective costs for the first quarter of ~~2017~~2018 and ~~2016~~2017 are shown below:

Three Months Ended
March 31, 2017 Three Months Ended
March 31, 2016
(dollars in thousands) Average
Balance Average
Cost Average
Balance Average
Cost
NOW $ 1,169,567 0.17 % $ 1,137,076 0.17 %
MMDA 1,486,972 0.42 % 1,278,199 0.33 %
Savings 268,741 0.06 % 251,108 0.07 %
Retail CDs < $100,000 444,195 0.51 % 438,122 0.47 %
Retail CDs > $100,000 517,354 0.88 % 406,699 0.67 %
Brokered CDs - - % 1,099 0.73 %
Interest-bearing deposits $ 3,886,829 0.39 % $ 3,512,303 0.31 %

Three Months Ended
March 31, 2018 Three Months Ended
March 31, 2017
(dollars in thousands)
Average
Balance

Average
Cost

Average
Balance

Average
Cost
NOW $ 1,337,718
0.29% $ 1,169,567
0.17%
MMDA 1,970,571
0.73% 1,486,972
0.42%
Savings 278,080
0.07% 268,741
0.06%
Retail CDs < $100,000 422,771
0.64% 444,195
0.51%
Retail CDs > $100,000 593,635
1.08% 517,354
0.88%
Brokered CDs —
—% —
—%
Interest-bearing deposits $ 4,602,775
0.60% $ 3,886,829
0.39%

Provision for Loan Losses

The Company’s provision for loan losses during the first quarter of ~~2017~~2018 amounted to $1.8 million, compared with ~~$1.7~~$2.5 million in the fourth quarter of ~~2016~~2017 and ~~$681,000~~$1.8 million in the first quarter of ~~2016.~~2017. At March 31, ~~2017,~~2018, classified loans still accruing ~~totaled $47.2~~declined to $45.8 million, compared with ~~$43.3~~$57.8 million at December 31, ~~2016.~~2017. Non-performing assets as a percentage of total assets decreased from ~~0.94%~~0.68% at December 31, ~~2016~~2017 to ~~0.92%~~0.61% at March 31, ~~2017.~~2018. Net charge-offs on legacy loans during the first quarter of ~~2017~~2018 were approximately ~~$370,000,~~$1.7 million, or ~~0.04%~~0.14% of average legacy loans on an annualized basis, compared with approximately ~~$780,000,~~$370,000, or ~~0.13%~~0.04%, in the first quarter of ~~2016.~~2017. The Company’s allowance for loan losses allocated to legacy loans at March 31, ~~2017~~2018 was ~~$21.0~~$22.4 million, or ~~0.55%~~0.44% of legacy loans, compared with ~~$20.5~~$21.5 million, or ~~0.56%~~0.44% of legacy loans, at December 31, ~~2016.~~2017. The Company’s total allowance for loan losses at March 31, ~~2017~~2018 was ~~$25.3~~$26.2 million, or ~~0.47%~~0.42% of total loans, increasing from ~~$23.9~~$25.8 million, or ~~0.45%~~0.43% of total loans, at December 31, ~~2016.~~

2017.

Noninterest Income

Total non-interest income for the first quarter of ~~2017~~2018 was $26.5 million, an increase of $758,000, or 2.9%, from the $25.7 million ~~compared with $24.3 million~~reported in the first quarter of ~~2016.~~2017. Service charges on deposit accounts in the first quarter of ~~2017 increased~~2018 decreased $335,000, or 3.2%, to ~~$10.6~~$10.2 million, compared with ~~$9.9~~$10.6 million in the first quarter of ~~2016. Stronger growth~~2017. This decrease in ~~commercial and treasury management accounts contributed~~service charge revenue was primarily attributable to ~~the growth in income, as did growth in core deposit accounts that resulted from the Company’s acquisition of JAXB in March 2016.~~lower overdraft fee income. Income from mortgage-related activities ~~continued to increase,~~increased $685,000, or 6.1%, from ~~$10.2 million in the first quarter of 2016, to~~ $11.2 million in the first quarter of 2017 ~~as a result~~to $11.9 million in the first quarter of ~~the Company’s higher levels of production.~~2018. Total production in the first quarter of ~~2017~~2018 amounted to ~~$311.8~~$356.1 million, compared with ~~$268.6~~$311.8 million in the same quarter of ~~2016,~~2017, while ~~spreads~~spread (gain on sale) decreased to ~~3.45%~~2.62% in the current quarter compared with ~~4.10%~~3.45% in the same quarter of ~~2016.~~2017. The retail mortgage open pipeline finished the first quarter of ~~2017~~2018 at ~~$146.3~~$153.3 million, compared with ~~$111.6~~$119.6 million at the beginning of the first quarter of ~~2017~~2018 and ~~$161.5~~$146.3 million at the end of the first quarter of ~~2016.~~2017. Other service charges, commissions and fees decreased $10,000, or 1.4%, to $719,000 during the first quarter of 2018, compared with $709,000 during the first quarter of ~~2017,~~2017. Other non-interest income increased $361,000, or 11.2%, to $3.6 million for the first quarter of 2018, compared with ~~$1.1~~$3.2 million during the first quarter of ~~2016. Other~~2017. The increase in other non-interest income ~~increased~~was attributable to ~~$3.2 million for the first quarter~~higher loan servicing income, merchant fee income and check order fee income, partially offset by lower gains from sale of ~~2017, compared with $3.0 million during the first quarter of 2016.~~

SBA loans.

Noninterest Expense

Total non-interest expenses for the first quarter of ~~2017 decreased $2.5~~2018 increased $6.0 million, or ~~4.5%~~11.3%, to ~~$53.1~~$59.1 million, compared with ~~$55.6~~$53.1 million in the same quarter ~~2016.~~2017. Salaries and employee benefits increased ~~from $26.2~~$4.3 million, ~~in the first quarter of 2016 to~~or 15.5%, from $27.8 million in the first quarter of 2017 ~~as a result~~to $32.1 million in the first quarter of ~~staff additions~~2018 due to higher incentive pay, new positions added for the premium finance division and equipment finance line of business and an increased ~~staffing related to~~investment in the ~~Company’s ongoing BSA compliance efforts.~~Company's Bank Secrecy Act ("BSA") function. Occupancy and equipment ~~expense~~expenses increased $321,000, or 5.5%, to $6.2 million for the first quarter of 2018, compared with $5.9 million in the first quarter of ~~2017, compared with $5.7~~2017. Data processing and telecommunications expense increased $563,000, or 8.6%, to $7.1 million in the first quarter of ~~2016. Data processing and telecommunications expense increased to~~2018, compared with $6.6 million in the first quarter of 2017, ~~compared with $6.1 million~~due to an increase in the ~~first quarter~~ number

of ~~2016.~~accounts being processed by our core banking system and additional software fees incurred related to the buildout of our BSA compliance program. Credit resolution-related expenses decreased $384,000, or 41.2%, from ~~$1.8 million in the first quarter of 2016 to~~ $933,000 in the first quarter of ~~2017. During the first quarter of~~ 2017 the Company incurred merger and conversion charges of $402,000, compared with $6.4 million, for the first quarter of 2016. The large amount of merger and conversion charges in the prior year was related to ~~acquisition of JAXB in March 2016. Other noninterest expenses increased from $7.6 million~~$549,000 in the first quarter of ~~2016~~2018. Merger and conversion charges increased $433,000 to $835,000 in the first quarter of 2018, compared with $402,000 in the same quarter of 2017, reflecting increased merger and acquisition activity. Other noninterest expenses increased $756,000, or 8.1%, from $9.4 million in the first quarter of ~~2017.~~

2017 to $10.1 million in the first quarter of 2018 due primarily to higher loan servicing fees associated with consumer installment home improvement loans serviced by unrelated third parties and higher FDIC deposit insurance accruals, partially offset by a decrease in the premium finance division's management and licensing fees as a result of termination of the management and licensing agreement for USPF with the completion of the USPF acquisition on January 31, 2018.

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 non-deductible expenses. For the first quarter of ~~2017,~~2018, the Company reported income tax expense of ~~$10.2~~$7.7 million, compared with ~~$6.1~~$10.2 million in the same period of ~~2016. This increase in income tax expense is directly correlated to the increase in pre-tax income for the periods.~~2017. The Company’s effective tax rate for the three months ending March 31, 2018 and 2017 was 22.4% and ~~2016 was~~ 32.6% ~~and 33.2%~~, respectively.

These decreases in both income tax expense and the effective tax rate are due to enactment of the Tax Reform Act.

Financial Condition as of March 31, ~~2017~~

2018

Securities

Debt securities with readily determinable fair values are classified as available for sale and recorded at fair value with unrealized gains and losses excluded from earnings and reported in accumulated other comprehensive income, net of the related deferred tax effect. ~~Equity securities, including restricted~~Restricted equity securities, are classified as other investment securities and are ~~recorded~~carried at ~~the lower~~cost and are periodically evaluated for impairment based on ultimate recovery of par value or cost ~~or market value.~~

basis.

The amortization of premiums and accretion of discounts are recognized in interest income using methods approximating the interest method over the life of the securities. Realized gains and losses, determined on the basis of the cost of specific securities sold, are included in earnings on the trade date. Declines in the fair value of securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses.

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

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Substantially all of the unrealized losses on debt securities are related to changes in interest rates and do not affect the expected cash flows of the issuer or underlying collateral. All unrealized losses are considered temporary because each security carries an acceptable investment grade and the Company does not intend to sell these investment securities at an unrealized loss position at March 31, ~~2017,~~2018, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Therefore, at March 31, ~~2017,~~2018, these investments are not considered impaired on an other-than temporary basis.

The following table illustrates certain information regarding the Company’s investment portfolio with respect to yields, sensitivities and expected cash flows over the next twelve months assuming constant prepayments and ~~maturities:~~

(dollars in thousands) Amortized
Cost Fair Value Book
Yield Modified
Duration Estimated
Cash
Flows
12 months

March 31, 2017
U.S. government sponsored agencies $ 999 $ 1,015 3.20 % 0.68 $ 1,000
State, county and municipal securities 147,109 149,556 3.74 % 5.23 8,368
Corporate debt securities 44,801 44,902 3.72 % 5.86 3,000
Mortgage-backed securities 640,055 635,292 2.39 % 4.25 94,604
Total debt securities $ 832,964 $ 830,765 2.70 % 4.51 $ 106,972

maturities.

(dollars in thousands) Amortized
Cost Fair Value Book
Yield Modified
Duration Estimated
Cash
Flows
12 months
December 31, 2016
U.S. government sponsored agencies $ 999 $ 1,020 3.20 % 0.92 $ 1,000
State, county and municipal securities 149,899 152,035 3.73 % 5.34 7,884
Corporate debt securities 32,375 32,172 2.94 % 4.87 2,000
Mortgage-backed securities 641,362 637,508 2.38 % 4.33 94,081
Total debt securities $ 824,635 $ 822,735 2.65 % 4.53 $ 104,965



(dollars in thousands)	Amortized Cost		Fair Value		Book Yield	Modified Duration	Estimated Cash Flows 12 Months
March 31, 2018
State, county and municipal securities	105,821		106,274		3.85%	4.82	12,872
Corporate debt securities	57,134		57,097		4.38%	5.64	2,000
Mortgage-backed securities	699,990		685,214		2.57%	4.21	96,942
Total debt securities	$	862,945	$	848,585	2.84%	4.38	$	111,814

December 31, 2017
State, county and municipal securities	135,968		137,794		3.78%	4.61	11,370
Corporate debt securities	46,659		47,143		4.12%	5.17	3,000
Mortgage-backed securities	630,666		625,936		2.37%	3.91	100,603
Total debt securities	$	813,293	$	810,873	2.71%	4.10	$	114,973

Loans and Allowance for Loan Losses

At March 31, ~~2017,~~2018, gross loans outstanding (including purchased loans, purchased loan pools, and loans held for sale) were ~~$5.43~~$6.30 billion, an increase from ~~$5.37~~$6.24 billion reported at December 31, ~~2016.~~2017. Loans held for sale ~~remained stable~~decreased from ~~$105.9~~$197.4 million at December 31, ~~2016~~2017 to ~~$105.6~~$111.1 million at March 31, ~~2017.~~2018. Legacy loans (excluding purchased loans and purchased loan pools) increased ~~$158.7~~$195.5 million, from ~~$3.63~~$4.86 billion at December 31, ~~2016~~2017 to ~~$3.79~~$5.05 billion at March 31, ~~2017,~~2018, driven primarily by increased growth in the commercial ~~financial~~real estate and ~~agricultural, construction and development, and commercial~~residential real estate loan categories. Purchased loans decreased ~~$62.3~~$43.0 million, from ~~$1.07 billion~~$861.6 million at December 31, ~~2016~~2017 to ~~$1.01 billion~~$818.6 million at March 31, ~~2017,~~2018, due to paydowns of ~~$63.1~~$44.0 million, transfers to ~~other real estate owned~~OREO of ~~$1.5 million~~$457,000 and charge-offs of ~~$803,000,~~$151,000, partially offset by accretion of ~~$3.1~~$1.6 million. Purchased loan pools decreased ~~$39.2~~$8.7 million, from ~~$568.3~~$328.2 million at December 31, ~~2016~~2017 to ~~$529.1~~$319.6 million at March 31, ~~2017~~2018 due to payments on the portfolio of ~~$38.1~~$16.2 million and premium amortization of ~~$1.1 million~~$511,000 during the first three months of ~~2017.~~

2018.

The Company regularly monitors the composition of the loan portfolio to evaluate the adequacy of the allowance for loan losses 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) ~~residential~~construction and development related real estate; (3) commercial and farmland real estate; (4) ~~construction and development related~~residential real estate; and (5) consumer. The Company’s management has strategically located its branches in select markets in South and Southeast Georgia, North Florida, Southeast Alabama and throughout South Carolina to take advantage of the growth in these areas.

The Company’s risk management processes include a loan review program designed to evaluate the credit risk in the loan portfolio and ensure credit grade accuracy. Through the loan review process, the Company conducts (1) a loan portfolio summary analysis, (2) charge-off and recovery analysis, (3) trends in accruing problem loan analysis, and (4) problem and past-due loan analysis. This analysis process serves as a tool to assist management in assessing the overall quality of the loan portfolio and the adequacy of the allowance for loan losses. 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 allowance for loan losses is a reserve established through charges to earnings in the form of a provision for loan losses. The provision for loan losses is based on management’s evaluation of the size and composition of the loan portfolio, the level of non-performing and past-due loans, historical trends of charged-off loans and recoveries, prevailing economic conditions and other factors management deems appropriate. The Company’s management has established an allowance for loan losses which it believes is adequate for the probable incurred losses in the loan portfolio. Based on a credit evaluation of the loan portfolio, management presents a monthly review of the allowance for loan losses to the Company’s Board of Directors, which primarily focuses on risk by evaluating individual loans in certain risk categories. These categories have also been established by management and take the form of loan grades. By grading the loan portfolio in this manner the Company’s management is able to effectively evaluate the portfolio by risk, which management believes is the most effective way to analyze the loan portfolio and thus analyze the adequacy of the allowance for loan losses.

The allowance for loan losses is established by examining (1) the large classified loans, nonaccrual loans and loans considered impaired and evaluating them individually to determine the specific reserve allocation and (2) the remainder of the loan portfolio to allocate a portion of the allowance based on past loss experience and the economic conditions for the particular loan category. The Company also considers other factors such as changes in lending policies and procedures; changes in national, regional and/or local economic and business conditions; changes in the nature and volume of the loan portfolio; changes in the experience, ability and depth of either the market president or lending staff; changes in the volume and severity of past-due and classified loans; changes in the quality of the Company’s corporate loan review system; and other factors management deems appropriate.

At the end of the first quarter of ~~2017,~~2018, the allowance for loan losses allocated to legacy loans totaled ~~$21.0~~$22.4 million, or ~~0.55%~~0.44% of legacy loans, compared with ~~$20.5~~$21.5 million, or ~~0.56%~~0.44% of legacy loans, at December 31, ~~2016.~~2017. The ~~similarity in the~~ allowance for loan losses as a percentage of legacy loans ~~reflects the stability~~remained unchanged from December 31, 2017 and March 31, 2018 due to consistency in ~~the credit risk of our portfolio, both from~~ the mix of loan and collateral types and the overall credit quality of the loan portfolio. Our legacy nonaccrual loans increased slightly from ~~$18.1~~$14.2 million at December 31, ~~2016~~2017 to ~~$18.3~~$14.4 million at March 31, ~~2017.~~2018. For the first three months of ~~2017,~~2018, our legacy net charge off ratio as a percentage of average legacy loans ~~decreased~~increased to ~~0.04%~~0.14%, compared with ~~0.14% and 0.13%~~0.04% for the ~~three-month periods ended December 31, 2016 and March 31, 2016, respectively.~~first three months of 2017. The total provision for loan losses for the first three months ~~ended March 31, 2017 increased to~~of 2018 was $1.8 million, ~~compared with $1.7~~remaining unchanged from $1.8 million ~~and $681,000 during~~recorded for the ~~three-month periods ended December 31, 2016 and March 31, 2016, respectively.~~first three months of 2017. Our ratio of total nonperforming assets to total assets decreased from ~~0.94%~~0.68% at December 31, ~~2016~~2017 to ~~0.92%~~0.61% at March 31, ~~2017.~~

2018.

The balance of the allowance for loan losses allocated to loans collectively evaluated for impairment increased ~~0.4%~~3.5%, or ~~$73,000,~~$699,000, during the first three months of ~~2017,~~2018, while the balance of loans collectively evaluated for impairment increased ~~1.3%~~2.6%, or ~~$68.2~~$155.5 million, during the same period. ~~A significant portion~~As a percentage of all loans collectively evaluated for impairment, the allowance allocated to those loans remained constant at 0.34% for both December 31, 2017 and March 31, 2018. For the allowance allocated to loans collectively evaluated expressed as a percentage of loans evaluated collectively for impairment, the largest change for the first three months of 2018 was noted in the legacy consumer installment loan ~~growth was concentrated~~category, which increased from 0.59% at December 31, 2017 to 0.69% at March 31, 2018 due to increased net charge-offs for the category. Additionally, larger dollar amount increases in ~~lower risk categories such as commercial premium finance loans and did not require as large of an~~the allowance for loan losses ~~as other~~allocated to loans collectively evaluated for the first three months of 2018 were noted for both the legacy commercial and farmland real estate and the legacy residential real estate loan categories, which experienced most of ~~loans. In addition to~~ the ~~change of type of~~growth in loan ~~growth, we also experienced a decline in our historical loss rates on all loan portfolios.~~balances collectively evaluated for impairment. We consider a four year loss rate on all loan ~~categories and our charge off ratio has been steadily declining over that period.~~categories. We ~~have adjusted~~adjust the qualitative factors to account for the inherent risks in the portfolio that are not captured in the historical loss rates, such as ~~weak~~volatile commodity prices for agriculture products, weather-related risks (droughts and hurricanes), growth rates of certain loan types and other factors management deems appropriate. As a percentage of all loans collectively evaluated for impairment, the allowance allocated to those loans decreased one basis point, from 0.35% at December 31, 2016 to 0.34% at March 31, 2017. The largest decrease was in the legacy residential real estate category, which decreased from 0.51% at December 31, 2016 to 0.46% at March 31, 2017. The reason for this decline is the positive trend in net losses within that category.

The balance of the allowance for loan losses allocated to loans individually evaluated for impairment ~~increased 19.6%~~decreased by 4.8%, or ~~$1.3 million,~~$290,000, during the first three months of ~~2017,~~2018, while the balance of loans individually evaluated for impairment ~~increased 3.9%~~decreased 6.3%, or ~~$2.4~~$3.3 million, during the same period. Loan balances individually evaluated for impairment declined across all legacy loan categories and were flat for both purchased loans and purchased loan pools. The ~~majority of this increase~~largest changes in the allowance for loan losses allocated to loans individually evaluated for impairment ~~is attributable~~from December 31, 2017 to ~~the~~March 31, 2018 were a $431,000 decrease for purchased loans and an increase of $169,000 for legacy commercial ~~financial~~ and ~~agricultural loan category and purchased~~farmland real estate loans.

The following tables present an analysis of the allowance for loan losses as of and for the three months ended March 31, ~~2017~~2018 and ~~2016:~~

Three Months Ended
March 31,
(dollars in thousands) 2017 2016
Balance of allowance for loan losses at beginning of period $ 23,920 $ 21,062
Provision charged to operating expense 1,836 681
Charge-offs:
Commercial, financial and agricultural 104 406
Real estate – residential 216 468
Real estate – commercial and farmland 9 347
Real estate – construction and development 53 155
Consumer installment and Other 164 59
Purchased loans 556 379
Purchased loan pools - -
Total charge-offs 1,102 1,814
Recoveries:
Commercial, financial and agricultural 69 73
Real estate – residential 61 314
Real estate – commercial and farmland 9 121
Real estate – construction and development 20 122
Consumer installment and Other 17 25
Purchased loans 420 898
Purchased loan pools - -
Total recoveries 596 1,553
Net charge-offs 506 261
Balance of allowance for loan losses at end of period $ 25,250 $ 21,482

2017:

As of and for the
Three Months Ended
March 31, 2017
(dollars in thousands) Legacy
Loans Purchased
Loans Purchased
Loan
Pools Total
Allowance for loan losses at end of period $ 20,968 $ 2,196 $ 2,086 $ 25,250
Net charge-offs (recoveries) for the period 370 136 - 506
Loan balances:
End of period 3,785,480 1,006,935 529,099 5,321,514
Average for the period 3,678,149 1,034,983 547,057 5,260,189
Net charge-offs as a percentage of average loans 0.04 % 0.05 % 0.00 % 0.04 %
Allowance for loan losses as a percentage of end of period loans 0.55 % 0.22 % 0.39 % 0.47 %

As of and for the
Three Months Ended
March 31, 2016
(dollars in thousands) Legacy
Loans Purchased
Loans Purchased
Loan
Pools Total
Allowance for loan losses at end of period $ 19,193 $ 983 $ 1,306 $ 21,482
Net charge-offs (recoveries) for the period 780 (519 ) - 261
Loan balances:
End of period 2,528,007 1,260,198 656,734 4,444,939
Average for the period 2,410,747 970,570 627,178 4,008,495
Net charge-offs as a percentage of average loans 0.13 % (0.22 %) 0.00 % 0.03 %
Allowance for loan losses as a percentage of end of period loans 0.76 % 0.08 % 0.20 % 0.48 %



	Three Months Ended March 31,
(dollars in thousands)	2018		2017
Balance of allowance for loan losses at beginning of period	$	25,791	$	23,920
Provision charged to operating expense	1,801		1,836
Charge-offs:
Commercial, financial and agricultural	1,449		104
Real estate – construction and development	—		53
Real estate – commercial and farmland	142		9
Real estate – residential	198		216
Consumer installment	962		164
Purchased loans	121		556
Purchased loan pools	—		—
Total charge-offs	2,872		1,102
Recoveries:
Commercial, financial and agricultural	656		69
Real estate – construction and development	114		20
Real estate – commercial and farmland	24		9
Real estate – residential	182		61
Consumer installment	67		17
Purchased loans	437		420
Purchased loan pools	—		—
Total recoveries	1,480		596
Net charge-offs	1,392		506
Balance of allowance for loan losses at end of period	$	26,200	$	25,250



	As of and for the Three Months Ended March 31, 2018
(dollars in thousands)	Legacy Loans			Purchased Loans			Purchased Loan Pools			Total
Allowance for loan losses at end of period	$	22,384		$	2,822		$	994		$	26,200
Net charge-offs (recoveries) for the period	1,708			(316		)	—			1,392
Loan balances:
End of period	5,051,986			818,587			319,598			6,190,171
Average for the period	4,902,082			842,509			325,113			6,069,704
Net charge-offs as a percentage of average loans	0.14		%	(0.15		)%	0.00		%	0.09		%
Allowance for loan losses as a percentage of end of period loans	0.44		%	0.34		%	0.31		%	0.42		%



	As of and for the Three Months Ended March 31, 2017
(dollars in thousands)	Legacy Loans			Purchased Loans			Purchased Loan Pools			Total
Allowance for loan losses at end of period	$	20,968		$	2,196		$	2,086		$	25,250
Net charge-offs (recoveries) for the period	370			136			—			506
Loan balances:
End of period	3,785,480			1,006,935			529,099			5,321,514
Average for the period	3,678,149			1,034,983			547,057			5,260,189
Net charge-offs as a percentage of average loans	0.04		%	0.05		%	0.00		%	0.04		%
Allowance for loan losses as a percentage of end of period loans	0.55		%	0.22		%	0.39		%	0.47		%

Loans Excluding Purchased Loans



(dollars in thousands)	March 31, 2018		December 31, 2017
Commercial, financial and agricultural	$	1,387,437	$	1,362,508
Real estate – construction and development	631,504		624,595
Real estate – commercial and farmland	1,636,654		1,535,439
Real estate – residential	1,080,028		1,009,461
Consumer installment	316,363		324,511
	$	5,051,986	$	4,856,514

The following table summarizes the various loan types comprising the "Commercial, financial and agricultural" loan category displayed in the preceding table.



(dollars in thousands)	March 31, 2018		December 31, 2017
Municipal loans	$	526,609	$	522,880
Premium finance loans	501,841		482,536
Other commercial, financial and agricultural loans	358,987		357,092
	$	1,387,437	$	1,362,508

Purchased Assets

Loans that were acquired in transactions, including those that are covered by the loss-sharing agreements with the FDIC (“purchased loans”), totaled ~~$1.01 billion~~$818.6 million and ~~$1.07 billion~~$861.6 million at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively. OREO that was acquired in transactions, including OREO that is covered by the loss-sharing agreements with the FDIC, totaled ~~$11.7~~$6.7 million and ~~$12.5~~$9.0 million, at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

The Bank initially recorded ~~the~~purchased loans at ~~their~~ fair ~~values,~~value, taking into consideration certain credit quality risk and ~~liquidity marks.~~interest rate risk. The Company believes its estimation of credit risk and its adjustments to the carrying balances of the acquired loans are adequate. If the Company determines that a loan or group of loans has deteriorated from its initial assessment of fair value, ~~a reserve for loan losses will be established to account for that difference. During the three months ended March 31, 2017 and 2016, the Company recorded for purchased loans a net~~additional provision for loan loss ~~of $706,000 and $464,000, respectively.~~expense will be recorded for the impairment in value. If the Company determines that a loan or group of loans has improved from its initial assessment of fair value, then the increase in cash flows over those expected at the acquisition date iswill result in the reversal of provision for loan loss expense to the extent of prior provisions or will be recognized as interest income ~~prospectively.~~

prospectively if no provisions have been made or have been fully reversed.

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



(dollars in thousands)	March 31, 2018		December 31, 2017
Commercial, financial and agricultural	$	64,612	$	74,378
Real estate – construction and development	48,940		65,513
Real estate – commercial and farmland	465,870		468,246
Real estate – residential	236,453		250,539
Consumer installment	2,712		2,919
	$	818,587	$	861,595

Purchased Loan Pools

Purchased loan pools are defined as groups of residential mortgage loans that were not acquired in bank acquisitions or FDIC-assisted transactions. As of March 31, 2018, purchased loan pools totaled $319.6 million and consisted of whole-loan residential mortgages on properties outside the Company’s markets, with principal balances totaling $316.2 million and $3.4 million of remaining purchase premium paid at acquisition. As of December 31, 2017, purchased loan pools totaled ~~$529.1~~$328.2 million and consisted of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets, with principal balances totaling ~~$521.3~~$324.4 million and $7.8 million of remaining purchase premium paid at acquisition. As of December 31, 2016, purchased loan pools totaled $568.3 million and consisted of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets, with principal balances totaling $559.4 million and $8.9$3.8 million of remaining purchase premium paid at acquisition. The Company has allocated approximately ~~$2.1~~$1.0 million and ~~$1.8~~$1.1 million of the allowance for loan losses to the purchased loan pools at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

Non-Performing Assets

Non-performing assets include nonaccrual loans, accruing loans contractually past due 90 days or more, repossessed personal property, and ~~other real estate owned.~~OREO. Loans are placed on nonaccrual status when management has concerns relating to the ability to collect the principal and interest and generally when such loans are 90 days or more past due. Management performs a detailed review and valuation assessment of impaired loans on a quarterly basis and recognizes losses when impairment is identified. A loan is considered impaired when it is probable that not all principal and interest amounts will be collected according to the loan contract. When a loan is placed on nonaccrual status, any interest previously accrued but not collected is reversed against current income.

Nonaccrual loans, excluding purchased loans, totaled ~~$18.3~~$14.4 million at March 31, ~~2017, a slight~~2018, an increase of ~~0.9%~~$218,000, or 1.5%, from ~~$18.1~~$14.2 million reported at December 31, ~~2016.~~2017. Nonaccrual purchased loans totaled ~~$23.6~~$15.9 million at March 31, ~~2017,~~2018, a increase of $512,000, or 3.3%, compared with ~~$23.0~~$15.4 million at December 31, ~~2016.~~2017. At March 31, ~~2017,~~2018, OREO, excluding purchased OREO, totaled ~~$10.4~~$9.2 million, an increase of $707,000 compared with ~~$10.9~~$8.5 million at December 31, ~~2016.~~2017. Purchased OREO totaled ~~$11.7~~$6.7 million at March 31, ~~2017,~~2018, a decrease of $2.3 million compared with ~~$12.5~~$9.0 million at December 31, ~~2016.~~2017. Management regularly assesses the valuation of OREO through periodic reappraisal and through inquiries received in the marketing process. At the end of the first quarter of ~~2017,~~2018, total non-performing assets decreased to ~~0.92%~~0.68% of total assets, compared with ~~0.94%~~0.61% at December 31, ~~2016.~~

2017.

Non-performing assets at March 31, ~~2017~~2018 and December 31, ~~2016~~2017 were as follows:

(dollars in thousands) March 31,
2017 December 31,
2016
Nonaccrual loans, excluding purchased loans $ 18,281 $ 18,114
Nonaccrual purchased loans 23,606 22,966
Nonaccrual purchased loan pools - -
Accruing loans delinquent 90 days or more 933 -
Foreclosed assets, excluding purchased assets 10,466 10,874
Purchased other real estate owned 11,668 12,540
Total non-performing assets $ 64,954 $ 64,494



(dollars in thousands)	March 31, 2018		December 31, 2017
Nonaccrual loans, excluding purchased loans	$	14,420	$	14,202
Nonaccrual purchased loans	15,940		15,428
Nonaccrual purchased loan pools	—		—
Accruing loans delinquent 90 days or more, excluding purchased loans	2,497		5,991
Accruing purchased loans delinquent 90 days or more	—		—
Foreclosed assets, excluding purchased assets	9,171		8,464
Purchased other real estate owned	6,723		9,011
Total non-performing assets	$	48,751	$	53,096

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 March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company had a balance of ~~$16.6~~$14.7 million and ~~$18.2~~$15.6 million, respectively, in troubled debt restructurings, excluding purchased loans. The following table presents the amount of troubled debt restructurings by loan class, excluding purchased loans, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Loan Class # Balance
(in thousands) # Balance
(in thousands)
Commercial, financial & agricultural 3 $ 43 15 $ 142
Real estate – construction & development 7 435 2 34
Real estate – commercial & farmland 14 3,944 5 1,617
Real estate – residential 78 9,220 20 998
Consumer installment 8 18 33 129
Total 110 $ 13,660 75 $ 2,920

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

2017:



March 31, 2018	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	39	13	$	224
Real estate – construction and development	5	176		2	8
Real estate – commercial and farmland	16	4,606		6	2,127
Real estate – residential	72	6,547		19	838
Consumer installment	3	7		32	93
Total	100	$	11,375	72	$	3,290



December 31, 2017	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	4	$	41	12	$	120
Real estate – construction and development	6	417		2	34
Real estate – commercial and farmland	17	6,937		5	204
Real estate – residential	74	6,199		18	1,508
Consumer installment	4	5		33	98
Total	105	$	13,599	70	$	1,964

The following table presents the amount of troubled debt restructurings by loan class, excluding purchased loans, classified separately as those currently paying under restructured terms and those that have defaulted (defined as 30 days past due) under restructured terms at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017
Loans Currently
Paying Under
Restructured Terms

Loans that have
Defaulted Under
Restructured Terms

Loan Class # Balance
(in thousands) # Balance
(in thousands)
Commercial, financial & agricultural 10 $ 65 8 $ 119
Real estate – construction & development 6 409 3 60
Real estate – commercial & farmland 13 3,910 6 1,652
Real estate – residential 69 8,136 29 2,081
Consumer installment 22 71 19 76
Total 120 $ 12,591 65 $ 3,988

December 31, 2016
Loans Currently
Paying Under
Restructured Terms

Loans that have
Defaulted Under
Restructured Terms

Loan Class # Balance
(in thousands) # Balance
(in thousands)
Commercial, financial & agricultural 12 $ 82 7 $ 79
Real estate – construction & development 8 686 2 34
Real estate – commercial & farmland 16 4,119 5 2,970
Real estate – residential 84 9,248 13 831
Consumer installment 25 76 14 71
Total 145 $ 14,211 41 $ 3,985

2017:



March 31, 2018	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	$	176	6	$	88
Real estate – construction and development	5	156		2	27
Real estate – commercial and farmland	17	4,629		5	2,105
Real estate – residential	63	5,669		28	1,715
Consumer installment	27	73		8	27
Total	123	$	10,703	49	$	3,962



December 31, 2017	Loans Currently Paying Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	9	$	55	7	$	106
Real estate – construction and development	4	156		4	295
Real estate – commercial and farmland	18	6,722		4	419
Real estate – residential	78	6,753		14	954
Consumer installment	24	59		13	44
Total	133	$	13,745	42	$	1,818

The following table presents the amount of troubled debt restructurings, excluding purchased loans, by types of concessions made, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Type of Concession # Balance
(in thousands) # Balance
(in thousands)
Forbearance of interest 8 $ 1,479 7 $ 320
Forgiveness of principal 2 1,173 1 119
Forbearance of principal 7 2,153 10 356
Rate reduction only 12 1,556 1 29
Rate reduction, forbearance of interest 33 2,273 23 481
Rate reduction, forbearance of principal 8 1,714 27 1,489
Rate reduction, forgiveness of interest 39 3,307 2 111
Rate reduction, forgiveness of principal 1 5 4 15
Total 110 $ 13,660 75 $ 2,920

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

2017:



March 31, 2018	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forbearance of interest	12	$	2,512	4	$	153
Forgiveness of principal	3	1,220		—	—
Forbearance of principal	6	813		7	2,037
Rate reduction only	11	1,289		1	60
Rate reduction, forbearance of interest	27	1,705		19	523
Rate reduction, forbearance of principal	7	1,180		35	318
Rate reduction, forgiveness of interest	34	2,656		4	194
Rate reduction, forgiveness of principal	—	—		2	5
Total	100	$	11,375	72	$	3,290



December 31, 2017	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forbearance of interest	12	$	2,567	4	$	163
Forgiveness of principal	3	1,238		—	—
Forbearance of principal	5	2,299		6	657
Rate reduction only	12	1,366		1	29
Rate reduction, forbearance of interest	32	2,224		19	484
Rate reduction, forbearance of principal	6	1,192		33	216
Rate reduction, forgiveness of interest	35	2,713		4	408
Rate reduction, forgiveness of principal	—	—		3	7
Total	105	$	13,599	70	$	1,964

The following table presents the amount of troubled debt restructurings, excluding purchased loans, by collateral types, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Collateral Type # Balance
(in thousands) # Balance
(in thousands)
Warehouse 4 $ 673 1 $ 81
Raw land 9 736 2 34
Apartments - - 3 1,501
Hotel and motel 3 1,492 - -
Office 3 472 - -
Retail, including strip centers 3 1,251 1 35
1-4 family residential 78 9,013 22 1,004
Automobile/equipment/CD 9 21 45 263
Unsecured 1 2 1 2
Total 110 $ 13,660 75 $ 2,920

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

2017:



March 31, 2018	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	3	$	432	4	$	2,132
Raw land	7	471		2	8
Hotel and motel	3	1,329		—	—
Office	3	360		—	—
Retail, including strip centers	6	2,431		3	77
1-4 family residential	72	6,340		20	880
Automobile/equipment/CD	5	11		42	191
Unsecured	1	1		1	2
Total	100	$	11,375	72	$	3,290



December 31, 2017	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	4	$	2,697	1	$	79
Raw land	8	713		2	34
Hotel and motel	3	1,370		—	—
Office	4	656		—	—
Retail, including strip centers	5	2,159		3	80
1-4 family residential	74	5,992		20	1,553
Automobile/equipment/CD	6	11		43	216
Unsecured	1	1		1	2
Total	105	$	13,599	70	$	1,964

As of March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the Company had a balance of ~~$27.4~~$24.5 million and ~~$28.1~~$24.9 million, respectively, in troubled debt restructurings included in purchased loans. The following table presents the amount of troubled debt restructurings by loan class of purchased loans, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Loan Class # Balance
(in thousands) # Balance
(in thousands)
Commercial, financial & agricultural 1 $ 1 3 $ 16
Real estate – construction & development 3 1,020 7 421
Real estate – commercial & farmland 16 6,835 10 3,996
Real estate – residential 120 12,592 34 2,528
Consumer installment - - 2 8
Total 140 $ 20,448 56 $ 6,969

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

2017:



March 31, 2018	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	—	$	—	4	$	23
Real estate – construction and development	4	1,034		6	316
Real estate – commercial and farmland	14	6,745		8	2,234
Real estate – residential	120	12,871		21	1,281
Consumer installment	—	—		2	4
Total	138	$	20,650	41	$	3,858



December 31, 2017	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	—	$	—	3	$	16
Real estate – construction and development	3	1,018		6	340
Real estate – commercial and farmland	14	6,713		10	2,582
Real estate – residential	117	12,741		25	1,462
Consumer installment	—	—		2	5
Total	134	$	20,472	46	$	4,405

The following table presents the amount of troubled debt restructurings by loan class of purchased loans, classified separately as those currently paying under restructured terms and those that have defaulted (defined as 30 days past due) under restructured terms at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017
Loans Currently
Paying Under
Restructured Terms

Loans that have
Defaulted Under
Restructured Terms

Loan Class # Balance
(in thousands) # Balance
(in thousands)
Commercial, financial & agricultural 1 $ 1 3 $ 16
Real estate – construction & development 6 1,041 4 400
Real estate – commercial & farmland 23 9,682 3 1,148
Real estate – residential 124 13,006 30 2,114
Consumer installment 2 8 - -
Total 156 $ 23,738 40 $ 3,678

December 31, 2016
Loans Currently
Paying Under
Restructured Terms

Loans that have
Defaulted Under
Restructured Terms

Loan Class # Balance
(in thousands) # Balance
(in thousands)
Commercial, financial & agricultural 3 $ 16 2 $ 76
Real estate – construction & development 8 1,378 1 9
Real estate – commercial & farmland 25 10,862 - -
Real estate – residential 126 13,484 30 2,306
Consumer installment 4 11 - -
Total 166 $ 25,751 33 $ 2,391

2017:



March 31, 2018	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	2	$	18	2	$	5
Real estate – construction and development	9	1,346		1	5
Real estate – commercial and farmland	20	8,413		2	565
Real estate – residential	120	12,769		21	1,383
Consumer installment	1	1		1	3
Total	152	$	22,547	27	$	1,961



December 31, 2017	Loans Currently Paying Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	1	$	11	2	$	5
Real estate – construction and development	8	1,352		1	6
Real estate – commercial and farmland	22	9,014		2	281
Real estate – residential	124	13,151		18	1,052
Consumer installment	1	2		1	3
Total	156	$	23,530	24	$	1,347

The following table presents the amount of troubled debt restructurings included in purchased loans, by types of concessions made, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Type of Concession # Balance
(in thousands) # Balance
(in thousands)
Forbearance of interest 6 $ 1,259 9 $ 1,844
Forbearance of principal 7 1,986 6 1,675
Forbearance of principal, extended amortization 1 76 1 315
Rate reduction only 77 12,467 13 1,375
Rate reduction, forbearance of interest 15 1,046 21 946
Rate reduction, forbearance of principal 10 1,629 4 200
Rate reduction, forgiveness of interest 24 1,985 2 614
Total 140 $ 20,448 56 $ 6,969

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

2017:



March 31, 2018	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forbearance of interest	4	$	176	9	$	1,640
Forbearance of principal	6	2,482		3	247
Forbearance of principal, extended amortization	1	299		1	282
Rate reduction only	74	11,590		12	1,222
Rate reduction, forbearance of interest	23	2,282		9	229
Rate reduction, forbearance of principal	10	2,178		5	182
Rate reduction, forgiveness of interest	20	1,643		2	56
Total	138	$	20,650	41	$	3,858



December 31, 2017	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance (in thousands)		#	Balance (in thousands)
Forbearance of interest	4	$	182	9	$	1,740
Forgiveness of principal	—	—		1	63
Forbearance of principal	5	2,363		4	406
Forbearance of principal, extended amortization	2	371		1	290
Rate reduction only	70	11,450		15	1,361
Rate reduction, forbearance of interest	22	2,211		9	257
Rate reduction, forbearance of principal	10	2,195		5	187
Rate reduction, forgiveness of interest	21	1,700		2	101
Total	134	$	20,472	46	$	4,405

The following table presents the amount of troubled debt restructurings included in purchased loans, by collateral types, classified separately as accrual and nonaccrual at March 31, ~~2017~~2018 and December 31, ~~2016:~~

March 31, 2017 Accruing Loans Non-Accruing Loans
Collateral Type # Balance
(in thousands) # Balance
(in thousands)
Warehouse 4 $ 1,476 - $ -
Raw land 3 1,042 8 937
Hotel and motel 1 152 1 538
Office 2 490 1 463
Retail, including strip centers 7 4,467 1 188
1-4 family residential 122 12,820 37 3,314
Church - - 2 1,455
Automobile/equipment/CD 1 1 6 74
Total 140 $ 20,448 56 $ 6,969

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

2017:



March 31, 2018	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	2	$	365	—	$	—
Raw land	2	888		7	768
Hotel and motel	1	148		1	456
Office	2	450		1	419
Retail, including strip centers	8	4,530		—	—
1-4 family residential	122	13,039		24	1,930
Church	1	1,230		1	214
Automobile/equipment/CD	—	—		7	71
Total	138	$	20,650	41	$	3,858



December 31, 2017	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance (in thousands)		#	Balance (in thousands)
Warehouse	2	$	368	—	$	—
Raw land	2	893		7	829
Hotel and motel	1	149		1	476
Office	2	460		2	494
Retail, including strip centers	7	4,407		1	160
1-4 family residential	119	12,958		28	2,161
Church	1	1,237		1	218
Automobile/equipment/CD	—	—		6	67
Total	134	$	20,472	46	$	4,405

Commercial Lending Practices

The federal bank regulatory agencies previously issued interagency guidance on commercial real estate lending and prudent risk management practices. This guidance defines commercial real estate (“CRE”) loans as loans secured by raw land, land development and construction (including 1-4 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 bank’s total risk-based capital; or


(2)	total loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land, net of owner occupied loans, represent 300% or more of a bank’s total risk-based capital.

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

As of March 31, ~~2017,~~2018, 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 March 31, ~~2017~~2018 and December 31, ~~2016.~~2017. The loan categories and concentrations below are based on Federal Reserve Call codes and include purchased loans:

March 31, 2017 December 31, 2016
(dollars in thousands) Balance % of Total
Loans Balance % of Total
Loans
Construction and development loans $ 497,407 9 % $ 444,412 8 %
Multi-family loans 138,069 3 % 130,723 3 %
Nonfarm non-residential loans (excluding owner occupied) 1,016,635 19 % 985,496 19 %
Total CRE Loans(excluding owner occupied) 1,652,111 31 % 1,560,631 30 %
All other loan types 3,669,403 69 % 3,703,695 70 %

Total Loans $ 5,321,514 100 % $ 5,264,326 100 %



	March 31, 2018			December 31, 2017
(dollars in thousands)	Balance		% of Total Loans	Balance		% of Total Loans
Construction and development loans	$	680,443	11%	$	690,108	11%
Multi-family loans	158,133		3%	148,663		3%
Nonfarm non-residential loans (excluding owner occupied)	1,083,783		17%	979,205		16%
Total CRE Loans (excluding owner occupied)	1,922,359		31%	1,817,976		30%
All other loan types	4,267,812		69%	4,228,379		70%
Total Loans	$	6,190,171	100%	$	6,046,355	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 total risk-based capital, and the Company’s internal concentration limits as of March 31, ~~2017~~2018 and December 31, ~~2016:~~

Internal
Limit
March 31,
2017
Actual

December 31,
2016
Actual

Construction and development 100 % 66 % 72 %
Commercial real estate 300 % 220 % 253 %

2017:



	Internal Limit	Actual
	Internal Limit	March 31, 2018	December 31, 2017
Construction and development loans	100%	81%	83%
Total CRE loans (excluding owner occupied)	300%	230%	219%

Short-Term Investments

The Company’s short-term investments are comprised of federal funds sold and interest-bearing deposits in banks. At March 31, ~~2017,~~2018, the Company’s short-term investments were ~~$232.0~~$210.9 million, compared with ~~$71.2~~$191.3 million at December 31, ~~2016.~~2017. At March 31, ~~2017,~~2018, the Company ~~did not have any~~had $9,000 in federal funds sold and ~~all $232.0~~$210.9 million was in interest-bearing deposit balances at correspondent banks and the Federal Reserve Bank of Atlanta.

Derivative Instruments and Hedging Activities

The Company has a cash flow hedge that matures September 15, 2020 with a notional amount of $37.1 million at March 31, ~~2017~~2018 and December 31, ~~2016~~2017 for the purpose of converting the variable rate on certain junior subordinated debentures to a fixed rate of 4.11%. The fair value of this instrument was ~~a liability~~an asset of ~~approximately $806,000 and $978,000~~$61,000 at March 31, ~~2017 and December 31, 2016, respectively.~~

The Company has fair value hedges with a combined notional amount of $20.0 million at March 31, 2017 for the purpose of hedging the change in fair value of certain fixed rate loans. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $258,0002018 and a liability of approximately $49,000 at March 31, 2017. At December 31, 2016, the Company had fair value hedges with a combined notional amount of $20.2 million. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $229,000 and a liability of approximately $96,000$381,000 at December 31, ~~2016.~~

2017.

The Company also has forward contracts and IRLCs to hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of these instruments amounted to an asset of ~~approximately $4.7~~$4.9 million and ~~$4.3~~$2.9 million at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, and a liability of ~~approximately $572,000~~$505,000 and $0$67,000 at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively.

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

Capital

USPF Acquisition

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

For additional information regarding the USPF acquisition, see Note 3.

2017 Public Offering

Capital Management

Capital management consists of providing equity to support both current and anticipated future operations. The Company is subject to capital adequacy requirements imposed by the Federal Reserve Board (the “FRB”) and the ~~GDBF,~~Georgia Department of Banking and Finance (the "GDBF"), and the Bank is subject to capital adequacy requirements imposed by the FDIC and the GDBF.

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

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

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

a) The “Tier 1 Leverage Ratio” is defined as Tier 1 capital to average assets. To be considered “adequately capitalized” under this measurement, a bank must maintain a Tier 1 leverage ratio greater than or equal to 4.00%. For a bank to be considered “well capitalized,” it must maintain a Tier 1 leverage ratio greater than or equal to 5.00%.

b) The “CET1 Ratio” is defined as Common equity tier 1 capital to total risk weighted assets. To be considered “adequately capitalized” under this measurement, a bank must maintain a CET1 ratio greater than or equal to 4.50% ~~(5.75%~~(6.375% including the 1.875% capital conservation buffer for 2018; 5.75% including the 1.25% capital conservation buffer for ~~2017; 5.125% including the 0.625% capital conservation buffer for 2016)~~2017). For a bank to be considered “well capitalized,” it must maintain a CET1 ratio greater than or equal to 6.50%.

c) The “Tier 1 Capital Ratio” is defined as Tier 1 capital to total risk weighted assets. To be considered “adequately capitalized” under this measurement, a bank must maintain a Tier 1 capital ratio greater than or equal to 6.00% ~~(7.25%~~(7.875% including the 1.875% capital conservation buffer for 2018; 7.25% including the 1.25% capital conservation buffer for ~~2017; 6.625% including the 0.625% capital conservation buffer for 2016)~~2017). For a bank to be considered “well capitalized,” it must maintain a Tier 1 capital ratio greater than or equal to 8.00%.

d) The “Total Capital Ratio” is defined as total capital to total risk weighted assets. To be considered “adequately capitalized” under this measurement, a bank must maintain a total capital ratio greater than or equal to 8.00% ~~(9.25%~~(9.875% including the 1.875%

capital conservation buffer for 2018; 9.25% including the 1.25% capital conservation buffer for ~~2017; 8.625% including the 0.625% capital conservation buffer for 2016)~~2017). For a bank to be considered “well capitalized,” it must maintain a total capital ratio greater than or equal to 10.00%.

As of March 31, ~~2017,~~2018, 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 March 31, ~~2017~~2018 and December 31, ~~2016.~~

March 31,
2017 December 31,
2016
Tier 1 Leverage Ratio(tier 1 capital to average assets)
Consolidated 9.92 % 8.68 %
Ameris Bank 10.79 % 9.27
CET1 Ratio(common equity tier 1 capital to risk weighted assets)
Consolidated 10.40 8.32
Ameris Bank 12.87 10.35
Tier 1 Capital Ratio(tier 1 capital to risk weighted assets)
Consolidated 11.84 9.69
Ameris Bank 12.87 10.35
Total Capital Ratio(total capital to risk weighted assets)
Consolidated 13.59 10.11
Ameris Bank 13.31 10.77

2017.



	March 31, 2018	December 31, 2017
Tier 1 Leverage Ratio (tier 1 capital to average assets)
Consolidated	9.65%	9.71%
Ameris Bank	10.57%	10.56%
CET1 Ratio (common equity tier 1 capital to risk weighted assets)
Consolidated	9.96%	10.29%
Ameris Bank	12.48%	12.64%
Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)
Consolidated	11.28%	11.58%
Ameris Bank	12.48%	12.64%
Total Capital Ratio (total capital to risk weighted assets)
Consolidated	12.82%	13.14%
Ameris Bank	12.89%	13.05%

Interest Rate Sensitivity and Liquidity

The Company’s primary market risk exposures are credit risk, interest rate risk, and to a lesser degree, liquidity risk. The Bank operates under an Asset Liability Management Policy approved by the Company’s Board of Directors and the Asset and Liability Committee (the “ALCO Committee”). The policy outlines limits on interest rate risk in terms of changes in net interest income and changes in the net market values of assets and liabilities over certain changes in interest rate environments. These measurements are made through a simulation model which projects the impact of changes in interest rates on the Bank’s assets and liabilities. The policy also outlines responsibility for monitoring interest rate risk, and the process for the approval, implementation and monitoring of interest rate risk strategies to achieve the Bank’s interest rate risk objectives.

The ALCO Committee is comprised of senior officers of Ameris and two outside members of the Company’s Board of Directors. 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 March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, the net carrying value of the Company’s other borrowings was ~~$525.7~~$555.5 million and ~~$492.3~~$250.6 million, respectively. On March 13, 2017, the Company completed the public offering and sale of $75.0 million in aggregate principal amount of its 5.75% Fixed-To-Floating Rate Subordinated Notes due 2027. These subordinated notes are included in other borrowings at March 31, ~~2017~~2018 at a net carrying value of $73.8 million. See Note 98 for additional details on the subordinated notes.

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

March 31, December 31, September 30, June 30, March 31,
2017 2016 2016 2016 2016
Investment securities available for sale to total deposits 14.72 % 14.76 % 15.80 % 16.29 % 16.00 %
Loans (net of unearned income) to total deposits 94.31 % 94.42 % 91.32 % 89.26 % 84.98 %
Interest-earning assets to total assets 91.98 % 91.32 % 91.25 % 90.62 % 89.98 %
Interest-bearing deposits to total deposits 70.67 % 71.78 % 70.54 % 70.00 % 70.77 %



	March 31, 2018	December 31, 2017	September 30, 2017	June 30, 2017	March 31, 2017
Investment securities available for sale to total deposits	13.16%	12.24%	13.90%	14.13%	14.72%
Loans (net of unearned income) to total deposits	96.03%	91.25%	101.04%	97.88%	94.31%
Interest-earning assets to total assets	92.15%	92.77%	92.48%	92.14%	91.98%
Interest-bearing deposits to total deposits	71.02%	73.18%	70.86%	71.12%	70.67%

The liquidity resources of the Company are monitored continuously by the ALCO Committee and on a periodic basis by state and federal regulatory authorities. As determined under guidelines established by these regulatory authorities, the Company’s and the Bank’s liquidity ratios at March 31, ~~2017~~2018 were considered satisfactory. The Company is aware of no events or trends likely to result in a material change in liquidity.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company is exposed only to U.S. dollar interest rate changes, and, accordingly, the Company manages exposure by considering the possible changes in the net interest margin. The Company does not have any trading instruments nor does it classify any portion of the investment portfolio as held for trading. The Company’s hedging activities are limited to cash flow hedges and ~~fair value hedges and~~ are part of the Company’s program to manage interest rate sensitivity.

At March 31, ~~2017,~~2018, the Company had one cash flow hedge with a notional amount of $37.1 million for the purpose of converting the variable rate on certain junior subordinated debentures to a fixed rate. The LIBOR rate swap exchanges fixed rate payments of 4.11% for floating rate payments based on the three-month LIBOR rate and matures September 2020. The fair value of this instrument was ~~a liability~~an asset of ~~approximately $806,000 and $978,000~~$61,000 at March 31, ~~2017 and December 31, 2016, respectively.~~

At March 31, 2017, the Company had fair value hedges with a combined notional amount of $20.0 million for the purpose of hedging the change in fair value of certain fixed rate loans. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $258,0002018 and a liability of approximately $49,000 at March 31, 2017. At December 31, 2016, the Company had fair value hedges with a combined notional amount of $20.2 million. These instruments have maturity dates that range from January 2023 to October 2031 and are indexed to the one-month LIBOR rate. The fair value of these instruments amounted to an asset of approximately $229,000 and a liability of approximately $96,000$381,000 at December 31, ~~2016.~~

2017.

The Company also had forward contracts and IRLCs to hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of these instruments amounted to an asset of approximately ~~$4.7~~$4.9 million and ~~$4.3~~$2.9 million at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, respectively, and a liability of ~~$572,000~~$505,000 and $0$67,000 at March 31, ~~2017~~2018 and December 31, ~~2016,~~2017, 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 a gradual and ~~shock~~parallel shocks of 100, 200, 300 and 400 basis point ~~increase or decrease~~increases and decreases in market rates ~~on net interest income~~ and is monitored on a quarterly basis.

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

Item 4. Controls and Procedures.

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

During the quarter ended March 31, ~~2017,~~2018, there was no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, as a normal incident of the nature and kind of business in which the Company is engaged, various claims or charges are asserted against the Company or the Bank. In the ordinary course of business, the Company and the Bank are also subject to regulatory examinations, information gathering requests, inquiries and investigations. Other than ordinary routine litigation incidental to the Company’s business, management believes based on its current knowledge and after consultation with legal counsel that there are no pending or threatened legal proceedings that will, individually or in the aggregate, have a material adverse effect on the consolidated results of operations or financial condition of the Company.

Item 1A. Risk Factors.

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

2017.

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

~~(c)~~

c) Issuer Purchases of Equity Securities.

The table below sets forth information regarding the Company’s repurchase of shares of its outstanding common stock during the three-month period ended March 31, ~~2017.~~

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
January 1, 2017 through January 31, 2017 - $ - - $ -
February 1, 2017 through February 28, 2017 - $ - - $ -
March 1, 2017 through March 31, 2017 17,902 $ 47.90 - $ -
Total 17,902 $ 47.90 - $ -

2018.



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
January 1, 2018 through January 31, 2018	1,092	$	48.20	—	$	—
February 1, 2018 through February 28, 2018	16,884	$	53.75	—	$	—
March 1, 2018 through March 31, 2018	—	$	—	—	$	—
Total	17,976	$	53.41	—	$	—


(1)	The shares purchased from January 1, ~~2017~~2018 through March 31, ~~2017~~2018 consist of shares of common stock surrendered to the Company in payment of the income tax withholding obligations relating to the vesting of shares of restricted stock.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

~~The exhibits required to be furnished with this report are listed on the exhibit index attached hereto.~~


	59
Exhibit Number

~~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: May 10, 2017~~	~~AMERIS BANCORP~~Description

2.1		~~/s/ Dennis J. Zember Jr.~~
	~~Dennis J. Zember Jr.,~~
	~~Executive Vice President, Chief Financial Officer~~Agreement and ~~Chief Operating Officer~~Plan of Merger dated as of January 25, 2018 by and between Ameris Bancorp and Hamilton State Bancshares, Inc. (incorporated by reference to Exhibit 2.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on January 26, 2018).
	~~(duly authorized signatory~~
2.2		Voting and ~~principal accounting~~Support Agreement, dated January 25, 2018, by and ~~financial officer)~~among Ameris Bancorp, Hamilton State Bancshares, Inc. and the Hamilton State Bancshares, Inc. shareholders party thereto (incorporated by reference to Exhibit 2.2 to Ameris Bancorp’s Registration Statement on Form S-4 (File No. 333-224162) filed with the SEC on April 25, 2018).

~~EXHIBIT INDEX~~

~~Exhibit~~ ~~Number~~ 2.3		~~Description~~Stock Purchase Agreement dated as of January 25, 2018 by and among Ameris Bancorp, Ameris Bank, William J. Villari and The Villari Family Gift Trust (incorporated by reference to Exhibit 2.2 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on January 26, 2018).

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

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

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

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

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

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

3.7		~~Amended and Restated~~ Bylaws of Ameris Bancorp, as amended and restated effective January 16, 2018 (incorporated by reference to Exhibit 3.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on ~~March 14, 2005)~~January 19, 2018).

4.1		Registration Rights Agreement dated as of January ~~18, 2017~~3, 2018 by and between Ameris Bancorp and William J. Villari (incorporated by reference to Exhibit 4.9 to Ameris Bancorp’s Registration Statement on Form S-3 (File No. 333-223080) filed with the SEC on February 16, 2018).

4.2		Registration Rights Agreement dated as of January 31, 2018 by and among Ameris Bancorp, William J. Villari and The Villari Family Gift Trust (incorporated by reference to Exhibit 4.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on ~~January 23, 2017)~~February 6, 2018).

~~4.2~~ 10.1		~~Subordinated Debt Indenture,~~Fourth Amendment to Loan Agreement dated ~~as of March 13, 2017,~~April 25, 2018 by and between Ameris Bancorp and ~~Wilmington Trust, National Association, as Trustee~~NexBank SSB (incorporated by reference to Exhibit ~~4.1~~10.1 to Ameris ~~Bancorp’s~~Bancorp's Current Report on Form 8-K filed with the SEC on ~~March 13, 2017)~~April 25, 2018).

~~4.3~~ 10.2		~~First Supplemental Indenture,~~Fourth Amended and Restated Revolving Promissory Note dated ~~as of March 13, 2017,~~April 25, 2018 issued by ~~and between~~ Ameris Bancorp ~~and Wilmington Trust, National Association, as Trustee~~to NexBank SSB (incorporated by reference to Exhibit ~~4.2~~10.2 to Ameris ~~Bancorp’s~~Bancorp's Current Report on Form 8-K filed with the SEC on ~~March 13, 2017)~~April 25, 2018).

~~4.4~~		~~Form of 5.75% Fixed-to-Floating Rate Subordinated Note due 2027 (incorporated by reference to Exhibit 4.3 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on March 13, 2017).~~

~~10.1~~		Shareholders Agreement dated as of January 18, 2017 by and among US Premium Finance Holding Company, Ameris Bancorp and the Other Shareholders of US Premium Finance Holding Company Named Therein (incorporated by reference to Exhibit 10.1 to Ameris Bancorp’s Current Report on Form 8-K filed with the SEC on January 23, 2017).

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

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

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

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



Exhibit Number			Description

101			The following financial statements from Ameris Bancorp’s Form 10-Q for the quarter ended March 31, ~~2017,~~2018, formatted as interactive data files in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income and Comprehensive Income; (iii) Consolidated Statements of Shareholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements.

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: May 10, 2018	AMERIS BANCORP
	61
	/s/ Nicole S. Stokes
	Nicole S. Stokes
	Executive Vice President and Chief Financial Officer (duly authorized signatory and principal accounting and financial officer)



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




Large accelerated filer	xý	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

		Emerging growth company	¨


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



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

	March 31, 2017			December 31, 2016
Assets
Cash and due from banks	$	127,164		$	127,164
Federal funds sold and interest-bearing deposits in banks		232,045			71,221
Investment securities available for sale, at fair value		830,765			822,735
Other investments		35,950			29,464
Loans held for sale, at fair value		105,637			105,924

Loans		3,785,480			3,626,821
Purchased loans		1,006,935			1,069,191
Purchased loan pools		529,099			568,314
Loans, net of unearned income		5,321,514			5,264,326
Allowance for loan losses		(25,250	)		(23,920	)
Loans, net		5,296,264			5,240,406

Other real estate owned, net		10,466			10,874
Purchased other real estate owned, net		11,668			12,540
Total other real estate owned, net		22,134			23,414

Premises and equipment, net		121,610			121,217
Goodwill		125,532			125,532
Other intangible assets, net		16,391			17,428
Deferred income taxes, net		41,505			40,776
Cash value of bank owned life insurance		78,442			78,053
Other assets		61,417			88,697
Total assets	$	7,094,856		$	6,892,031

Liabilities
Deposits:
Noninterest-bearing	$	1,654,723		$	1,573,389
Interest-bearing		3,987,646			4,001,774
Total deposits		5,642,369			5,575,163
Securities sold under agreements to repurchase		40,415			53,505
Other borrowings		525,669			492,321
Subordinated deferrable interest debentures		84,559			84,228
Other liabilities		43,628			40,377
Total liabilities		6,336,640			6,245,594

Commitments and Contingencies (Note 10)
Shareholders’ Equity
Preferred stock, stated value $1,000 (5,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2017 and December 31, 2016)		-			-
Common stock, par value $1 (100,000,000 shares authorized; 38,602,949 and 36,377,807 shares issued at March 31, 2017 and December 31, 2016, respectively)		38,603			36,378
Capital surplus		503,543			410,276
Retained earnings		231,894			214,454
Accumulated other comprehensive income (loss), net of tax		(1,209	)		(1,058	)
Treasury stock, at cost (1,474,235 shares and 1,456,333 shares at March 31, 2017 and December 31, 2016, respectively)		(14,615	)		(13,613	)

Total shareholders’ equity		758,216			646,437

Total liabilities and shareholders’ equity	$	7,094,856		$	6,892,031

	Three Months Ended March 31,
	2017			2016
Interest income
Interest and fees on loans	$	61,521		$	49,191
Interest on taxable securities		4,800			4,586
Interest on nontaxable securities		416			446
Interest on deposits in other banks and federal funds sold		313			336
Total interest income		67,050			54,559

Interest expense
Interest on deposits		3,763			2,741
Interest on other borrowings		2,697			1,382
Total interest expense		6,460			4,123

Net interest income		60,590			50,436
Provision for loan losses		1,836			681
Net interest income after provision for loan losses		58,754			49,755

Noninterest income
Service charges on deposit accounts		10,563			9,915
Mortgage banking activity		11,215			10,211
Other service charges, commissions and fees		709			1,111
Gain on sale of securities		-			94
Other noninterest income		3,219			2,955
Total noninterest income		25,706			24,286
Noninterest expense
Salaries and employee benefits		27,794			26,187
Occupancy and equipment expense		5,877			5,700
Data processing and communications costs		6,572			6,113
Credit resolution-related expenses		933			1,799
Advertising and marketing expense		1,106			805
Amortization of intangible assets		1,036			1,020
Merger and conversion charges		402			6,359
Other noninterest expenses		9,373			7,617
Total noninterest expense		53,093			55,600
Income before income tax expense		31,367			18,441
Income tax expense		10,214			6,124
Net income		21,153			12,317

Other comprehensive income (loss)
Net unrealized holding gains (losses) arising during period on investment securities available for sale, net of tax expense (benefit) of ($105) and $2,011		(194	)		3,734
Reclassification adjustment for gains on investment securities included in earnings, net of tax of $0 and $33		-			(61	)
Unrealized gains (losses) on cash flow hedges arising during period, net of tax expense (benefit) of $23 and ($331)		43			(615	)
Other comprehensive income (loss)		(151	)		3,058
Total comprehensive income	$	21,002		$	15,375
Basic earnings per common share	$	0.59		$	0.38
Diluted earnings per common share	$	0.59		$	0.37
Dividends declared per common share	$	0.10		$	0.05
Weighted average common shares outstanding(in thousands)
Basic		35,664			32,752
Diluted		36,040			33,054

	Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
	Shares		Amount			Shares			Amount
Common Stock
Balance at beginning of period		36,377,807	$	36,378			33,625,162		$	33,625
Issuance of common stock		2,141,072		2,141			2,549,469			2,549
Issuance of restricted shares		67,721		68			96,749			97
Cancellation of restricted shares		-		-			(3,000	)		(3	)
Proceeds from exercise of stock options		16,349		16			3,805			4
Issued at end of period		38,602,949	$	38,603			36,272,185		$	36,272

Capital Surplus
Balance at beginning of period			$	410,276					$	337,349
Share-based compensation				673						492
Issuance of common shares, net of issuance costs of $4,925 and $0				92,359						69,906
Issuance of restricted shares				(68	)					(97	)
Cancellation of restricted shares				-						3
Proceeds from exercise of stock options				303						73
Balance at end of period			$	503,543					$	407,726

Retained Earnings
Balance at beginning of period			$	214,454					$	152,820
Net income				21,153						12,317
Dividends on common shares				(3,713	)					(1,742	)
Balance at end of period			$	231,894					$	163,395

Accumulated Other Comprehensive Income (Loss),
Net of Tax
Unrealized gains on securities and derivatives:
Balance at beginning of period			$	(1,058	)				$	3,353
Other comprehensive income (loss) during the period				(151	)					3,058
Balance at end of period			$	(1,209	)				$	6,411

Treasury Stock
Balance at beginning of period		1,456,333	$	(13,613	)		1,413,777		$	(12,388	)
Purchase of treasury shares		17,902		(1,002	)		20,954			(588	)
Balance at end of period		1,474,235	$	(14,615	)		1,434,731		$	(12,976	)

Total Shareholders’ Equity			$	758,216					$	600,828

(dollars in thousands)	As Recorded by JAXB			Initial Fair Value Adjustments			Subsequent Fair Value Adjustments			As Recorded by Ameris
Assets
Cash and cash equivalents	$	9,704		$	-		$	-		$	9,704
Federal funds sold and interest-bearing balances		7,027			-			-			7,027
Investment securities		60,836			(942	)(a)		-			59,894
Other investments		2,458			-			-			2,458
Loans		416,831			(15,746	)(b)		553	(j)		401,638
Allowance for loan losses		(12,613	)		12,613	(c)		-			-
Loans, net		404,218			(3,133	)		553			401,638
Other real estate owned		2,873			(1,035	)(d)		88	(k)		1,926
Premises and equipment		4,798			-			(119	)(l)		4,679
Intangible assets		288			5,566	(e)		(1,108	)(m)		4,746
Other assets		14,141			23,266	(f)		(3,524	)(n)		33,883
Total assets	$	506,343		$	23,722		$	(4,110	)	$	525,955
Liabilities
Deposits:
Noninterest-bearing	$	123,399		$	-		$	-		$	123,399
Interest-bearing		277,539			421	(g)		-			277,960
Total deposits		400,938			421			-			401,359
Other borrowings		48,350			84	(h)		-			48,434
Subordinated deferrable interest debentures		16,294			(3,393	)(i)		-			12,901
Other liabilities		2,354			-			-			2,354
Total liabilities		467,936			(2,888	)		-			465,048
Net identifiable assets acquired over (under) liabilities assumed		38,407			26,610			(4,110	)		60,907
Goodwill		-			31,375			4,110			35,485
Net assets acquired over (under) liabilities assumed	$	38,407		$	57,985		$	-		$	96,392
Consideration:
Ameris common shares issued		2,549,469
Price per share of the Company’s common stock	$	28.42
Company common stock issued	$	72,455
Cash exchanged for shares	$	23,937
Fair value of total consideration transferred	$	96,392

(dollars in thousands)
Contractually required principal and interest	$	42,314
Non-accretable difference		(9,181	)
Cash flows expected to be collected		33,133
Accretable yield		(6,182	)
Total purchased credit-impaired loans acquired	$	26,951

(dollars in thousands)	Fair Value of Acquired Loans at Acquisition Date		Gross Contractual Amounts Receivable at Acquisition Date		Best Estimate at Acquisition Date of Contractual Cash Flows Not Expected to be Collected
Acquired receivables subject to ASC 310-30	$	26,951	$	42,314	$	9,181
Acquired receivables not subject to ASC 310-30	$	374,687	$	488,346	$	-

(dollars in thousands)	March 31, 2017			March 31, 2016
Balance, January 1	$	1,069,191		$	909,083
Charge-offs, net of recoveries		(803	)		(678	)
Additions due to acquisitions		-			401,085
Accretion		3,097			4,134
Transfers to purchased other real estate owned		(1,489	)		(1,401	)
Payments received		(63,061	)		(52,025	)
Ending balance	$	1,006,935		$	1,260,198

(dollars in thousands)	March 31, 2017			March 31, 2016
Balance, January 1	$	30,624		$	33,848
Additions due to acquisitions		-			9,991
Accretion		(3,097	)		(4,134	)
Accretable discounts removed due to charge-offs		(13	)		355
Transfers between non-accretable and accretable discounts, net		(659	)		353
Ending balance	$	26,855		$	40,413

~~GEORGIA~~	~~58-1456434~~

Commission File Number: 001-13901

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

(dollars in thousands)	Amortized Cost		Estimated Fair Value
Due in one year or less	$	9,947	$	10,075
Due from one year to five years		63,050		63,720
Due from five to ten years		65,834		67,069
Due after ten years		54,078		54,609
Mortgage-backed securities		640,055		635,292
	$	832,964	$	830,765

	As of and for the Three Months Ended
(dollars in thousands)	March 31, 2017		December 31, 2016		March 31, 2016

Nonaccrual loans	$	18,281	$	18,114	$	15,700
Troubled debt restructurings not included above		13,659		14,209		14,385
Total impaired loans	$	31,940	$	32,323	$	30,085
Interest income recognized on impaired loans	$	240	$	225	$	318
Foregone interest income on impaired loans	$	274	$	267	$	242

Risk Grade	Commercial, Financial & Agricultural		Real Estate - Construction & Development		Real Estate - Commercial & Farmland		Real Estate - Residential		Consumer Installment Loans		Other		Total
March 31, 2017
10	$	404,968	$	-	$	6,617	$	53	$	9,176	$	-	$	420,814
15		446,942		5,846		83,239		50,805		348		-		587,180
20		101,370		38,618		982,901		563,555		24,277		8,028		1,718,749
23		350		6,673		7,981		5,880		5		-		20,889
25		99,989		360,390		333,232		83,750		81,262		-		958,623
30		3,631		1,829		26,574		5,142		122		-		37,298
40		4,342		1,673		17,566		17,511		729		-		41,821
50		7		-		-		99		-		-		106
60		-		-		-		-		-		-		-
Total	$	1,061,599	$	415,029	$	1,458,110	$	726,795	$	115,919	$	8,028	$	3,785,480

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

	March 31, 2017				March 31, 2016
Loan Class	#		Balance *(in thousands*)		#		Balance *(in thousands)*
Commercial, financial & agricultural		-	$	-		1	$	12
Real estate – construction & development		-		-		-		-
Real estate – commercial & farmland		-		-		2		1,605
Real estate – residential		1		77		1		60
Consumer installment		4		16		-		-
Total		5	$	93		4	$	1,676

(dollars in thousands)	Commercial, Financial & Agricultural			Real Estate – Construction & Development			Real Estate – Commercial & Farmland			Real Estate – Residential			Consumer Installment Loans and Other			Purchased Loans			Purchased Loan Pools		Total
Three months ended March 31, 2017:
Balance, December 31, 2016	$	2,192		$	2,990		$	7,662		$	6,786		$	827		$	1,626		$	1,837	$	23,920
Provision for loan losses		641			640			217			(791	)		174			706			249		1,836
Loans charged off		(104	)		(53	)		(9	)		(216	)		(164	)		(556	)		-		(1,102	)
Recoveries of loans previously charged off		69			20			9			61			17			420			-		596
Balance, March 31, 2017	$	2,798		$	3,597		$	7,879		$	5,840		$	854		$	2,196		$	2,086	$	25,250

Period-end allocation:
Loans individually evaluated for impairment⁽¹⁾	$	626		$	354		$	1,574		$	2,538		$	-		$	2,196		$	376	$	7,664
Loans collectively evaluated for impairment		2,172			3,243			6,305			3,302			854			-			1,710		17,586
Ending balance	$	2,798		$	3,597		$	7,879		$	5,840		$	854		$	2,196		$	2,086	$	25,250

Loans:
Individually evaluated for impairment⁽¹⁾	$	1,937		$	843		$	11,260		$	9,630		$	-		$	35,673		$	3,446	$	62,789
Collectively evaluated for impairment		1,059,662			414,186			1,446,850			717,165			123,947			836,146			525,653		5,123,609
Acquired with deteriorated credit quality		-			-			-			-			-			135,116			-		135,116
Ending balance	$	1,061,599		$	415,029		$	1,458,110		$	726,795		$	123,947		$	1,006,935		$	529,099	$	5,321,514

(dollars in thousands)	Commercial, Financial & Agricultural			Real Estate – Construction & Development			Real Estate – Commercial & Farmland			Real Estate - Residential			Consumer Installment Loans and Other			Purchased Loans			Purchased Loan Pools		Total
Twelve months ended December 31, 2016:
Balance, January 1, 2016	$	1,144		$	5,009		$	7,994		$	4,760		$	1,574		$	-		$	581	$	21,062
Provision for loan losses		2,647			(1,921	)		107			2,757			(523	)		(232	)		1,256		4,091
Loans charged off		(1,999	)		(588	)		(708	)		(1,122	)		(351	)		(1,559	)		-		(6,327	)
Recoveries of loans previously charged off		400			490			269			391			127			3,417			-		5,094
Balance, December 31, 2016	$	2,192		$	2,990		$	7,662		$	6,786		$	827		$	1,626		$	1,837	$	23,920

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

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

(dollars in thousands)	Covered Loans		Less: Fair Value Adjustments		Total Covered Loans		OREO		Less: Fair Value Adjustments		Total Covered OREO		Total Covered Assets		FDIC Loss- Share Receivable (Payable)
March 31, 2017
AUB	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	(34	)
USB		3,118		12		3,106		-		-		-		3,106		(1,655	)
SCB		3,989		36		3,953		-		-		-		3,953		(19	)
FBJ		3,714		433		3,281		-		-		-		3,281		(255	)
DBT		11,655		486		11,169		-		-		-		11,169		(4,229	)
TBC		1,737		-		1,737		-		-		-		1,737		(48	)
HTB		1,899		30		1,869		-		-		-		1,869		708
OGB		1,068		32		1,036		-		-		-		1,036		(1,040	)
CBG		11,454		881		10,573		215		-		215		10,788		83
Total	$	38,634	$	1,910	$	36,724	$	215	$	-	$	215	$	36,939	$	(6,489	)

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

	For the Three Months Ended March 31,
(share data in thousands)	2017		2016
Average common shares outstanding		35,664		32,752
Common share equivalents:
Stock options		120		114
Nonvested restricted share grants		256		188
Average common shares outstanding, assuming dilution		36,040		33,054

(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
March 31, 2017 Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%		0	%
Nonrecurring:
Impaired loans	$	27,643	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	15% - 99%		28	%
Other real estate owned	$	2,841	Third-party appraisals, sales contracts, broker price opinions	Collateral discounts and estimated costs to sell	15% - 83%		21	%
Purchased other real estate owned	$	11,668	Third-party appraisals	Collateral discounts and estimated costs to sell	10% - 74%		14	%

December 31, 2016 Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%		0	%
Nonrecurring:
Impaired loans	$	28,253	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	15% - 100%		28	%
Other real estate owned	$	1,172	Third-party appraisals, sales contracts, broker price opinions	Collateral discounts and estimated costs to sell	15% - 74%		22	%
Purchased other real estate owned	$	12,540	Third-party appraisals	Collateral discounts and estimated costs to sell	10% - 74%		15	%

(in thousands, except share data)	First Quarter 2017			Fourth Quarter 2016			Third Quarter 2016			Second Quarter 2016			First Quarter 2016

Results of Operations:
Net interest income	$	60,590		$	57,279		$	57,067		$	54,589		$	50,436
Net interest income (tax equivalent)		62,108			58,897			58,024			55,525			51,177
Provision for loan losses		1,836			1,710			811			889			681
Non-interest income		25,706			24,272			28,864			28,379			24,286
Non-interest expense		53,093			54,677			53,199			52,359			55,600
Income tax expense		10,214			6,987			10,364			9,671			6,124
Net income available to common shareholders		21,153			18,177			21,557			20,049			12,317
Selected Average Balances:
Investment securities	$	862,616		$	856,671		$	857,433		$	850,435		$	806,699
Loans held for sale		77,617			102,926			105,859			96,998			82,803
Loans		3,678,149			3,145,714			2,897,771			2,653,171			2,410,747
Purchased loans		1,034,983			1,101,907			1,199,175			1,239,409			970,570
Purchased loan pools		547,057			590,617			629,666			630,503			627,178
Earning assets		6,347,807			5,925,634			5,780,455			5,574,608			5,106,011
Assets		6,915,965			6,573,344			6,330,350			6,138,757			5,618,397
Deposits		5,491,324			5,490,657			5,221,219			5,211,355			4,874,310
Shareholders’ equity		695,830			653,991			640,382			616,361			542,264
Period-End Balances:
Investment securities	$	866,715		$	852,199		$	862,702		$	862,771		$	849,905
Loans held for sale		105,637			105,924			126,263			102,757			97,439
Loans		3,785,480			3,626,821			3,091,039			2,819,071			2,528,007
Purchased loans		1,006,935			1,069,191			1,129,381			1,193,635			1,260,198
Purchased loan pools		529,099			568,314			624,886			610,425			656,734
Earning assets		6,525,911			6,293,670			5,925,072			5,656,932			5,499,656
Total assets		7,094,856			6,892,031			6,493,495			6,221,294			6,097,771
Deposits		5,642,369			5,575,163			5,306,098			5,179,532			5,230,787
Shareholders’ equity		758,216			646,437			642,583			625,915			600,828
Per Common Share Data:
Earnings per share - basic	$	0.59		$	0.52		$	0.62		$	0.58		$	0.38
Earnings per share - diluted	$	0.59		$	0.52		$	0.61		$	0.57		$	0.37
Book value per common share	$	20.42		$	18.51		$	18.42		$	17.96		$	17.25
Tangible book value per common share	$	16.60		$	14.42		$	14.38		$	13.89		$	13.13
End of period shares outstanding		37,128,714			34,921,474			34,891,304			34,847,311			34,837,454
Weighted Average Shares Outstanding:
Basic		35,664,420			34,915,459			34,869,747			34,832,621			32,752,063
Diluted		36,040,240			35,293,035			35,194,739			35,153,311			33,053,554
Market Price:
High intraday price	$	49.50		$	47.70		$	36.20		$	32.76		$	33.81
Low intraday price	$	41.60		$	34.61		$	28.90		$	27.73		$	24.96
Closing price for quarter	$	46.10		$	43.60		$	34.95		$	29.70		$	29.58
Average daily trading volume		242,982			191,894			166,841			215,409			253,779
Cash dividends declared per share	$	0.10		$	0.10		$	0.10		$	0.05		$	0.05
Closing price to book value		2.26			2.36			1.90			1.65			1.71
Performance Ratios:
Return on average assets		1.24	%		1.10	%		1.35	%		1.31	%		0.88	%
Return on average common equity		12.33	%		11.06	%		13.39	%		13.08	%		9.14	%
Average loans to average deposits		97.20	%		89.99	%		92.55	%		88.65	%		83.94	%
Average equity to average assets		10.06	%		9.95	%		10.12	%		10.04	%		9.65	%
Net interest margin (tax equivalent)		3.97	%		3.95	%		3.99	%		4.01	%		4.03	%
Efficiency ratio		61.52	%		67.05	%		61.91	%		63.11	%		74.41	%

March 31, 2017	Loans Currently Paying Under Restructured Terms				Loans that have Defaulted Under Restructured Terms
Loan Class	#		Balance *(in thousands)*		#		Balance *(in thousands)*
Commercial, financial & agricultural		10	$	65		8	$	119
Real estate – construction & development		6		409		3		60
Real estate – commercial & farmland		13		3,910		6		1,652
Real estate – residential		69		8,136		29		2,081
Consumer installment		22		71		19		76
Total		120	$	12,591		65	$	3,988

	March 31, 2017			December 31, 2016
Tier 1 Leverage Ratio(tier 1 capital to average assets)
Consolidated		9.92	%		8.68	%
Ameris Bank		10.79	%		9.27
CET1 Ratio(common equity tier 1 capital to risk weighted assets)
Consolidated		10.40			8.32
Ameris Bank		12.87			10.35
Tier 1 Capital Ratio(tier 1 capital to risk weighted assets)
Consolidated		11.84			9.69
Ameris Bank		12.87			10.35
Total Capital Ratio(total capital to risk weighted assets)
Consolidated		13.59			10.11
Ameris Bank		13.31			10.77

	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
Investment securities available for sale to total deposits		14.72	%		14.76	%		15.80	%		16.29	%		16.00	%
Loans (net of unearned income) to total deposits		94.31	%		94.42	%		91.32	%		89.26	%		84.98	%
Interest-earning assets to total assets		91.98	%		91.32	%		91.25	%		90.62	%		89.98	%
Interest-bearing deposits to total deposits		70.67	%		71.78	%		70.54	%		70.00	%		70.77	%

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
January 1, 2017 through January 31, 2017		-	$	-		-	$	-
February 1, 2017 through February 28, 2017		-	$	-		-	$	-
March 1, 2017 through March 31, 2017		17,902	$	47.90		-	$	-
Total		17,902	$	47.90		-	$	-