Ameris Bancorp
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 28, 2025
ABCB$81.79+0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-28.
0000351569-24-000006
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0000351569-25-000006
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 138 previous paragraphs and 135 current paragraphs.
85 unchanged; 38 reworded; 8 added; 13 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 30 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
•Total non-performing assets as a percentage of total assets declined to 0.47% at December 31, 2024, compared with 0.69% at December 31, 2023
Current report
Gain on securities during 2024 was $12.3 million compared with a loss of $304,000 during 2023. The gain in 2024 was primarily due to a gain on conversion of Visa Class B stock of $12.6 million during the year.
Current report
Income from equipment finance activity decreased $1.7 million to $21.7 million during 2024, a decrease of 7.2% compared with 2023. This decrease largely being due to a $900,000 insurance settlement received in 2023.
Current report
Other noninterest income increased by $14.2 million, or 49.2%, to $43.2 million during 2024 compared with 2023. This is mostly due to a gain on sale of MSR of$10.5 million during 2024, compared with no such gain in 2023. Additionally, income on bank owned life insurance increased $3.5 million in 2024 due to the restructure of those policies during 2024 and the gain on sale of SBA loans increased by $2.6 million during 2024.
Current report
Income from equipment finance activity increased $4.2 million to $23.3 million during 2023, an increase of 21.7% compared with 2022. This increase largely being due to an increase of $3.0 million in gain on sale of lease equipment during 2023, as well as a $900,000 insurance settlement received during 2023.
Current report
Other noninterest expense increased $7.7 million, or 17.7%, to $51.0 million in 2024 from $43.3 million in 2023. This increase is primarily attributable to a reduction in deferred loan origination costs and an increase in tax and license expenses. These items were partially offset by decreases infraud and forgery losses, credit reporting expenses related to our equipment finance division, ATM expense and brokerage commissions.
Current report
Investor CRE, which includes multifamily residential and non-owner occupied CRE loans, has several dynamics which individually, or in combination, pose potential challenges to the portfolio. These include levels of interest rates above those at origination for loan renewals and changes to occupancy rates as firms reevaluate space needs as hybrid or remote work has expanded. The primary repayment source for these loans is cash flows from the securing property. The Company in normal course performs periodic evaluations of its portfolio for continued soundness and appropriate risk ratings. These reviews include evaluation of current financials, stressed cash flows at increased interest rates and evaluation of property values at various occupancy levels and cap rates. The Company's CRE portfolio continues to perform favorably with modest levels of past-due loans, such that past-due loans represented approximately 18 basis points of CRE loans at December 31, 2024.
Current report
The Company's multifamily residential portfolio is diversified geographically with the majority residing within our five-state footprint. Below is a summary of the multifamily residential portfolio by significant MSAs or state as of December 31, 2024:
Removed paragraphs (13)
Previous report
•Adjusted efficiency ratio 1 of 52.58%, compared with 52.48% in 2022
Previous report
•Nonperforming portfolio assets, excluding government-guaranteed loans, as a percentage of total assets improved to 0.33% at December 31, 2023, compared with 0.34% at December 31, 2022
Previous report
Goodwill
Previous report
Goodwill represents the excess of cost over the fair value of the net assets purchased in business combinations. Goodwill is required to be tested annually for impairment or whenever events occur that may indicate that the recoverability of the carrying amount is not probable. In the event of an impairment, the amount by which the carrying amount exceeds the fair value is charged to earnings. The Company performs its annual impairment testing of goodwill at December 31 of each year and more frequently if a triggering event occurs.
Previous report
During the second quarter of 2023, the Company assessed the indicators of goodwill impairment and determined a triggering event had occurred due to the sustained decline in the Company's stock price. The Company performed a quantitative analysis of goodwill at the divisions as of June 30, 2023. The Premium Finance Division was measured utilizing a discounted cash flow approach. The Banking Division was measured using multiple approaches. The primary approach for the Banking Division was the discounted cash flow approach, and the Company also used a market approach comparing to similar public companies' multiples and control premiums from transactions during prior distressed periods. The results from each of the primary approaches showed valuation of the reporting unit in excess of carrying value at June 30, 2023. The discounted cash flow approach for the Premium Finance Division resulted in a fair value approximately 8% higher than its carrying value. The discounted cash flow approach for the Banking Division indicated a fair value approximately 20% higher than its carrying value, and the market approach indicated a fair value approximately 9% higher than its carrying value. As a result, management determined no impairment existed at June 30, 2023. Holding all other variables constant, an increase of 1% in the discount rate would reduce the calculated fair value of the Premium Finance Division and Banking Division by approximately 8.8% and 6.9%, respectively.
Previous report
At December 31, 2023, the Company performed its annual qualitative assessment and determined that it was more likely than not that the reporting units fair values exceeded their carrying values.
Previous report
Gain on sale of SBA loans decreased by $4.0 million, or 72.0%, to $1.6 million during 2023 compared with 2022, while loans sold decreased $26.2 million, or 52.5%, to $23.7 million during 2023 compared with 2022.
Previous report
Gain on sale of SBA loans decreased by $1.1 million, or 16.2%, to $5.6 million during 2022 compared with 2021, while loans sold decreased $26.6 million, or 34.8%, to $50.0 million during 2022 compared with 2021.
Previous report
Other noninterest income increased by $22.2 million, or 95.5%, to $45.4 million during 2022 compared with 2021. This increase was primarily due to increases in noninterest income in our equipment finance division, BOLI income, merchant fee income and gain on sale of mortgage servicing rights of $18.1 million, $1.9 million, $2.0 million and $1.4 million, respectively. These increases were partially offset by reduction in recovery of prior SBA servicing right impairment of $906,000 compared with 2021.
Previous report
Occupancy costs increased $3.3 million, or 6.9%, from $48.1 million in 2021 to $51.4 million in 2022 due primarily to additional amortization resulting from technology projects placed in service in late 2021 and throughout 2022.
Previous report
Amortization of intangible assets increased $4.8 million, or 31.9%, to $19.7 million for 2022 compared with $15.0 million for 2021. This increase was attributable to our acquisition of Balboa.
Previous report
Legal and other professional fees increased $4.5 million, or 37.9%, from $11.9 million in 2021 to $16.4 million in 2022, primarily due to additional collection related expenses in our equipment finance division.
Previous report
Other noninterest expense decreased $7.6 million, or 14.3%, to $45.5 million in 2022 from $53.1 million in 2021, resulting primarily from a decrease in fraud and forgery losses and an increase in net gain on sale of bank premises. Also contributing to the decrease was a decrease in variable expenses related to our mortgage production
Reworded paragraphs (38)
Previous wording
During 2023, the Company reported net income of $269.1 million, or $3.89 per diluted share, compared with $346.5 million, or $4.99 per diluted share, in 2022. The Company’s net income as a percentage of average assets for 2023 and 2022 was 1.06% and 1.47%, respectively, while the Company’s net income as a percentage of average shareholders’ equity was 8.12% and 11.24%, respectively. Reported net income for the year ended December 31, 2023 includes $142.7 million in provision for credit losses, primarily related to updated economic forecasts and organic growth, partially offset by a reduction in unfunded commitments and the related allowance, compared with a provision of $71.7 million in 2022 resulting from organic growth in loans and the updated economic forecast. Results for the year ended December 31, 2023 also includes $11.6 million related to the FDIC special assessment.
Current wording
During 2024, the Company reported net income of $358.7 million, or $5.19 per diluted share, compared with $269.1 million, or $3.89 per diluted share, in 2023. The Company’s net income as a percentage of average assets for 2024 and 2023 was 1.38% and 1.06%, respectively, while the Company’s net income as a percentage of average shareholders’ equity was 10.01% and 8.12%, respectively. Reported net income for the year ended December 31, 2024 includes $58.8 million in provision for credit losses, primarily related to updated economic forecasts and organic growth, partially offset by a reduction in unfunded commitments and the related allowance, compared with a provision of $142.7 million in 2023 resulting from organic growth in loans and the updated economic forecast. Results for the year ended December 31, 2023 also includes $11.6 million related to the FDIC special assessment.
Previous wording
•Growth in tangible book value per share 1 of 12.4%, from $29.92 at the end of 2022 to $33.64 at the end of 2023
Current wording
•Growth in tangible book value per share 1 of 14.7%, from $33.64 at the end of 2023 to $38.59 at the end of 2024
Previous wording
•Organic growth in loans of $414.1 million, or 2.1%
Current wording
•Organic growth in loans of $470.6 million, or 2.32%
Previous wording
•Growth in total deposits of $1.25 billion, or 6.4%
Current wording
•Growth in total deposits of $1.01 billion, or 4.90%
Previous wording
•Increase in the allowance for credit losses to 1.52% of loans, from 1.04% at December 31, 2022, due to forecasted economic conditions, particularly related to commercial real estate price levels
Current wording
•Increase in the allowance for credit losses to 1.63% of loans, from 1.52% at December 31, 2023, due to forecasted economic conditions and organic loan growth
Previous wording
As discussed in Note 4 to the consolidated financial statements, Management determined the ACL on loans at December 31, 2023 utilizing the Moody's baseline economic forecast. Results by scenario can vary significantly from period to period as both the scenario assumptions and the portfolio composition are changing. If Management utilized the downside 96th percentile S-4 scenario from Moody's holding all other assumptions constant, the quantitative portion of the ACL on loans would have increased approximately $132.3 million. The S-4 scenario is a downside scenario such that there is a 96% probability that the economy will perform better than the forecast and a 4% probability that the economy will perform worse.
Current wording
As discussed in Note 3 to the consolidated financial statements, Management determined the ACL on loans at December 31, 2024 utilizing a weighting of two economic forecasts from Moody's. The Moody's baseline scenario was weighted at 75% and the downside 75th percentile S-2 scenario was weighted at 25%. Results by scenario can vary significantly from period to period as both the scenario assumptions and the portfolio composition are changing. If Management utilized the downside 96th percentile S-4 scenario from Moody's holding all other assumptions constant, the quantitative portion of the ACL on loans would have increased approximately $111.7 million. The S-4 scenario is a downside scenario such that there is a 96% probability that the economy will perform better than the forecast and a 4% probability that the economy will perform worse.
Previous wording
The Company’s net income during 2023 was $269.1 million, or $3.89 per diluted share, compared with $346.5 million, or $4.99 per diluted share, in 2022, and $376.9 million, or $5.40 per diluted share, in 2021.
Current wording
The Company’s net income during 2024 was $358.7 million, or $5.19 per diluted share, compared with $269.1 million, or $3.89 per diluted share, in 2023, and $346.5 million, or $4.99 per diluted share, in 2022.
Previous wording
For the fourth quarter of 2023, the Company recorded net income of $65.9 million, or $0.96 per diluted share, compared with $82.2 million, or $1.18 per diluted share, for the quarter ended December 31, 2022, and $81.9 million, or $1.18 per diluted share, for the quarter ended December 31, 2021.
Current wording
For the fourth quarter of 2024, the Company recorded net income of $94.4 million, or $1.37 per diluted share, compared with $65.9 million, or $0.96 per diluted share, for the quarter ended December 31, 2023, and $82.2 million, or $1.18 per diluted share, for the quarter ended December 31, 2022.
Previous wording
Average earning assets were approximately $23.26 billion in 2023, compared with approximately $21.41 billion in 2022. The earning asset and interest-bearing liability mix is regularly monitored to maximize the net interest margin and, therefore, increase return on assets and shareholders’ equity.
Current wording
Average earning assets were approximately $23.97 billion in 2024, compared with approximately $23.26 billion in 2023. The earning asset and interest-bearing liability mix is regularly monitored to maximize the net interest margin and, therefore, increase return on assets and shareholders’ equity.
Previous wording
Net interest income represents the amount by which interest income on interest-earning assets exceeds interest expense incurred on interest-bearing liabilities. Net interest income is the largest component of our income and is affected by the interest rate environment and the volume and composition of interest-earning assets and interest-bearing liabilities. Our interest-earning assets include loans, investment securities, other investments, interest-bearing deposits in banks, federal funds sold and time deposits in other banks. Our interest-bearing liabilities include deposits, securities sold under agreements to repurchase, other borrowings and subordinated deferrable interest debentures.
Current wording
Net interest income represents the amount by which interest income on interest-earning assets exceeds interest expense incurred on interest-bearing liabilities. Net interest income is the largest component of our income and is affected by the interest rate environment and the volume and composition of interest-earning assets and interest-bearing liabilities. Our interest-earning assets include loans, investment securities, other investments, interest-bearing deposits in banks and federal funds sold. Our interest-bearing liabilities include deposits, securities sold under agreements to repurchase, other borrowings and subordinated deferrable interest debentures.
Previous wording
2022 compared with 2021. For the year ended December 31, 2022, interest income was $893.9 million, an increase of $190.8 million, or 27.1%, compared with the same period in 2021. Average earning assets increased $1.52 billion, or 7.6%, to $21.41 billion for the year ended December 31, 2022, compared with $19.89 billion for 2021. Yield on average earning assets on a taxable equivalent basis increased during 2022 to 4.19%, compared with 3.56% for the year ended December 31, 2021. Average yields on all interest-earning asset categories increased from 2021 to 2022 as market interest rates increased.
Current wording
2024 compared with 2023. For the year ended December 31, 2024, interest income was $1.38 billion, an increase of $97.8 million, or 7.6%, compared with the same period in 2023. Average earning assets increased $709.0 million, or 3.0%, to $23.97 billion for the year ended December 31, 2024, compared with $23.26 billion for 2023. Yield on average earning assets on a taxable-equivalent basis increased during 2024 to 5.77%, compared with 5.52% for the year ended December 31, 2023. Average yields on all interest-earning asset categories increased from 2023 to 2024 as market interest rates increased.
Previous wording
Interest expense for the year ended December 31, 2022 was $92.9 million, an increase of $45.1 million, or 94.3%, compared with $47.8 million for the year ended December 31, 2021. During 2022 average interest-bearing liabilities were $12.22 billion as compared with $11.77 billion for 2021, an increase of $442.6 million, or 3.8%. During 2022, average noninterest-bearing deposit accounts were $8.01 billion and comprised 41.2% of average total deposits, compared with $7.02 billion, or 38.5% of average total deposits, during 2021. Average balances of time deposits amounted to $1.60 billion and comprised 8.3% of average total deposits during 2022, compared with $1.95 billion, or 10.7% of average total deposits, during 2021.
Current wording
Interest expense for the year ended December 31, 2024 was $529.1 million, an increase of $83.7 million, or 18.8%, compared with $445.4 million for the year ended December 31, 2023. During 2024 average interest-bearing liabilities were $15.48 billion as compared with $14.92 billion for 2023, an increase of $558.2 million, or 3.7%. During 2024, average noninterest-bearing deposit accounts were $6.57 billion and comprised 30.9% of average total deposits, compared with $6.77 billion, or 33.8% of average total deposits, during 2023. Costs of interest-bearing deposits increased during 2024 to 3.29%, compared with 2.69% for 2023. This increase reflects a shift in mix of deposits based on customer behavior and increased competition in the market for deposits. The cost of non-deposit funding increased to 5.81% in 2024, compared with 5.37% resulting from an increase in market interest rates.
Previous wording
On a taxable-equivalent basis, net interest income for 2022 was $804.9 million, compared with $659.9 million in 2021, an increase of $145.0 million, or 22.0%. The Company’s net interest margin, on a tax equivalent basis, increased 44 basis points to 3.76% for the year ended December 31, 2022, compared with 3.32% for the year ended December 31, 2021. Accretion expense for 2022 was $285,000, compared with accretion income of $16.3 million for 2021.
Current wording
On a taxable-equivalent basis, net interest income for 2024 was $853.0 million, compared with $838.8 million in 2023, an increase of $14.2 million, or 1.7%. The Company’s net interest margin, on a tax equivalent basis, decreased five basis points to 3.56% for the year ended December 31, 2024, compared with 3.61% for the year ended December 31, 2023.
Previous wording
The Company's provision for credit losses on loans during 2023 amounted to $153.5 million, compared with $52.6 million for 2022 and a release of $35.1 million for 2021. The increased provision for 2023 was primarily attributable to the updated economic forecast, particularly levels of commercial real estate prices. Net charge-offs in 2023 were 0.25% of average loans, compared with 0.08% in 2022 and 0.04% in 2021. Included in charge-offs for 2023 were $5.6 million in charge-offs on acquired loans which were fully reserved at acquisition. Excluding those charge-offs, the net charge-off rate for 2023 would have been 0.22%.
Current wording
The Company's provision for credit losses on loans during 2024 amounted to $69.8 million, compared with $153.5 million for 2023 and $52.6 million for 2022. The decreased provision for 2024 was primarily attributable to the updated economic forecast. Net charge-offs in 2024 were 0.19% of average loans, compared with 0.25% in 2023 and 0.08% in 2022. Included in charge-offs for 2023 were $5.6 million in charge-offs on acquired loans which were fully reserved at acquisition. Excluding those charge-offs, the net charge-off rate for 2023 would have been 0.22%.
Previous wording
At December 31, 2023, non-performing assets amounted to $174.3 million, or 0.69% of total assets, compared with $153.5 million, or 0.61% of total assets, at December 31, 2022. Included in non-performing assets were serviced GNMA-guaranteed residential mortgage loans totaling $90.2 million and $69.6 million at December 31, 2023 and 2022, respectively. Non-performing assets, excluding GNMA-guaranteed loans, represented 0.33% of total assets at December 31, 2023, compared with 0.34% of total assets at December 31, 2022. Other real estate was approximately $6.2 million as of December 31, 2023, compared with $843,000 at December 31, 2022.
Current wording
At December 31, 2024, non-performing assets amounted to $122.4 million, or 0.47% of total assets, compared with $174.3 million, or 0.69% of total assets, at December 31, 2023. Included in non-performing assets were serviced GNMA-guaranteed residential mortgage loans totaling $12.0 million and $90.2 million at December 31, 2024 and 2023, respectively. Non-performing assets, excluding GNMA-guaranteed loans, represented 0.42% of total assets at December 31, 2024, compared with 0.33% of total assets at December 31, 2023. Other real estate was approximately $2.4 million as of December 31, 2024, compared with $6.2 million at December 31, 2023.
Previous wording
The Company’s allowance for credit losses on loans at December 31, 2023 was $307.1 million, or 1.52% of loans compared with $205.7 million, or 1.04%, and $167.6 million, or 1.06%, at December 31, 2022 and 2021, respectively. The increase in the allowance for credit losses on loans as a percentage of loans compared with December 31, 2022 was primarily attributable to a decline in forecast economic conditions, particularly commercial real estate price levels, in the Company's CECL model.
Current wording
The Company’s allowance for credit losses on loans at December 31, 2024 was $338.1 million, or 1.63% of loans compared with $307.1 million, or 1.52%, and $205.7 million, or 1.04%, at December 31, 2023 and 2022, respectively. The increase in the allowance for credit losses on loans as a percentage of loans compared with December 31, 2023 was primarily attributable to among other things, a negative trend in forecast levels of commercial real estate prices and increased unemployment, partially offset by improvements in forecast levels of home prices and gross domestic product compared with the forecast at December 31, 2023.
Previous wording
The Company's provision for unfunded commitments during 2023 amounted to a release of $10.9 million, compared with a provision of $19.2 million for 2022 and $332,000 for 2021. The allowance for unfunded commitments on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The decrease in the provision for unfunded commitments was primarily due to a reduction in unfunded commitments during 2023 resulting from a decrease in loan production and funding or completion of existing commitments. The Company recorded a release of provision for other credit losses during 2023 totaling $6,000, compared with releases of $139,000 for 2022 and $616,000 for 2021.
Current wording
The Company's provision for unfunded commitments during 2024 amounted to a release of $11.0 million, compared with a release of $10.9 million for 2023 and a provision of $19.2 million for 2022. The allowance for unfunded commitments on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees. The decrease in the provision for unfunded commitments was primarily due to a reduction in unfunded commitments during 2024 resulting from completion of existing commitments. The Company recorded no provision for other credit losses during 2024, compared with releases of $6,000 for 2023 and $139,000 for 2022.
Previous wording
2022 compared with 2021. Total noninterest income in 2022 was $284.4 million, compared with $365.5 million in 2021, reflecting a decrease of 22.2%, or $81.1 million.
Current wording
2024 compared with 2023. Total noninterest income in 2024 was $293.3 million, compared with $242.8 million in 2023, reflecting an increase of 20.8%, or $50.4 million.
Previous wording
Service charges on deposit accounts decreased $607,000, or 1.3%, to $44.5 million during 2022 compared with 2021. This decrease was primarily attributable to the elimination of certain overdraft fees on consumer accounts and a reduction in debit card interchange income, partially offset by an increase in corporate services charges compared with 2021.
Current wording
Service charges on deposit accounts increased $4.3 million, or 9.3%, to $50.9 million during 2024 compared with 2023. This increase was primarily attributable to an increase in corporate services charges compared with 2023.
Previous wording
Income from mortgage banking activities decreased $101.0 million, or 35.3%, to $184.9 million during 2022 compared with 2021. This decrease was a result of a decline in production and tightening of gain on sale spreads compared with 2021. Total production in the retail mortgage division decreased to $5.5 billion for 2022, compared with $8.9 billion for 2021, while gain on sale spreads decreased in 2022 to 2.27% from 3.31% in 2021. The decrease in gain on sale spread is primarily related to normalization of pricing in the industry after experiencing record production levels in 2020. Noninterest income from the Company's warehouse lending division was $4.5 million for 2022 compared with $4.6 million for 2021.
Current wording
Income from mortgage banking activities increased $20.6 million, or 14.7%, to $160.5 million during 2024 compared with 2023. This increase was a result of increases in production and gain on sale spreads compared with 2023. Total production in the retail mortgage division increased to $4.6 billion for 2024, compared with $4.3 billion for 2023, while gain on sale spreads increased in 2024 to 2.37% from 2.07% in 2023. Noninterest income from the Company's warehouse lending division was$4.2 million for 2024 compared with $3.5 million for 2023.
Previous wording
Other service charges, commission and fees decreased by $313,000 to $3.9 million during 2022, a decrease of 7.5% compared with 2021 due primarily to a decrease in ATM fees.
Current wording
Other service charges, commission and fees increased by $357,000 to $4.8 million during 2024, an increase of 8.1% compared with 2023 due primarily to an increase in check cashing fees.
Previous wording
Other noninterest income increased by $5.3 million, or 11.7%, to $50.7 million during 2023 compared with 2022. This increase was primarily due to increases in noninterest income in our equipment finance division, BOLI income, SBA servicing income, merchant fee income and credit card interchange income of $4.2 million, $1.9 million, $1.1 million, $771,000 and $760,000, respectively. These increases were partially offset by a reduction in trust income of $4.4 million in 2023 after exiting this business at the end of 2022.
Current wording
Other noninterest income decreased by $2.8 million, or 9.0%, to $28.9 million during 2023 compared with 2022. This decrease was primarily due to a reduction in trust income of $4.4 million in 2023 after exiting this business at the end of 2022. Additionally, gains on sale of SBA loans decreased $4.0 million in 2023 compared to 2022. These decreases were partially offset by increases in BOLI income, SBA servicing income, merchant fee income and credit card interchange income of $1.9 million, $1.1 million, $771,000 and $760,000, respectively.
Previous wording
2022 compared with 2021. Total noninterest expense increased slightly to $560.7 million in 2022, compared with $560.1 million in 2021. Total noninterest expense for 2022 includes approximately $1.2 million in merger-related charges, $151,000 in natural disaster expense and $45,000 in gains on sale of bank premises. Total noninterest expense for 2021 includes approximately $4.2 million in merger-related charges and $510,000 in losses on sale of bank premises. Excluding these amounts, expenses in 2022 increased by $3.9 million, or 0.7%, compared with 2021 levels.
Current wording
2024 compared with 2023. Total noninterest expense increased to $607.8 million in 2024, compared with $578.3 million in 2023. Total noninterest expense for 2024 includes approximately $1.5 million in FDIC special assessment, $1.5 million in losses on disposition of bank premises and $550,000 in natural disaster expenses. Total noninterest expense for 2023 includes approximately $11.6 million in FDIC special assessment and $1.9 million in gains on disposition of bank premises. Excluding these amounts, expenses in 2024 increased by $36.0 million, or 6.33%, compared with 2023 levels.
Previous wording
Salaries and benefits decreased $18.1 million, or 5.3%, from $337.8 million in 2021 to $319.7 million in 2022. This decrease was primarily attributable to a decrease in variable pay resulting from decreased production levels in our retail mortgage division. Salaries and benefits in our mortgage division decreased $60.0 million, or 35.7%, to $107.8 million in 2022. This decrease was partially offset by additional salaries and benefits in our equipment finance division resulting from the acquisition of Balboa in December 2021. Full time equivalent employees decreased from 2,865 at December 31, 2021 to 2,847 at December 31, 2022.
Current wording
Salaries and benefits increased from $320.1 million in 2023 to $347.6 million in 2024. This increase was attributable to an increase in variable pay resulting from increased production levels in our retail mortgage division along with an increase in health insurance costs in 2024. Salaries and benefits in our mortgage division increased $12.1 million, or 15.1%, to $92.4 million in 2024. Full time equivalent employees decreased from 2,765 at December 31, 2023 to 2,691 at December 31, 2024.
Previous wording
Merger and conversion charges were $1.2 million in 2022, compared with no such charges recorded for 2023. Merger and conversion charges for 2022 were primarily related to the acquisition of Balboa.
Current wording
Merger and conversion charges were $1.2 million in 2022, compared with no such charges recorded for 2023. Merger and conversion charges for 2022 were primarily related to the acquisition of Balboa Capital Corporation in December 2021.
Previous wording
Other noninterest expense decreased $2.4 million, or 5.4%, to $43.1 million in 2023 from $45.5 million in 2022, resulting primarily from an increase in deferred costs related to our equipment finance division production and net gains on sale of bank premises. These items were partially offset by increases in fraud and forgery losses, armored car expense, ATM expense, tax and license expense and payment processing expenses related to our equipment finance division. Also contributing to the decrease was a decrease in variable expenses related to our mortgage production.
Current wording
Other noninterest expense decreased $2.7 million, or 5.8%, to $43.3 million in 2023 from $46.0 million in 2022, resulting primarily from an increase in deferred costs related to our equipment finance division production and net gains on sale of bank premises and a decrease in tax and license expense. These items were partially offset by increases in mortgage indemnification expense and credit reporting expenses related to our equipment finance division.
Previous wording
Income tax expense is influenced by statutory federal and state tax rates, the amount of taxable income, the amount of tax-exempt income and the amount of non-deductible expenses. For the year ended December 31, 2023, the Company recorded income tax expense of approximately $87.8 million, compared with $106.6 million recorded in 2022 and $119.2 million recorded in 2021. The Company’s effective tax rate was 24.6%, 23.5% and 24.0% for the years ended December 31, 2023, 2022 and 2021, respectively.
Current wording
Income tax expense is influenced by statutory federal and state tax rates, the amount of taxable income, the amount of tax-exempt income and the amount of non-deductible expenses. For the year ended December 31, 2024, the Company recorded income tax expense of approximately $117.2 million, compared with $87.8 million recorded in 2023 and $106.6 million recorded in 2022. The Company’s effective tax rate was 24.6%, 24.6% and 23.5% for the years ended December 31, 2024, 2023 and 2022, respectively.
Previous wording
Management believes that our loan portfolio is adequately diversified. The loan portfolio contains no foreign loans or significant concentrations in any one industry. As of December 31, 2023, approximately 74.2% of our loan portfolio was secured by real estate, compared with 71.1% at December 31, 2022.
Current wording
Management believes that our loan portfolio is adequately diversified. The loan portfolio contains no foreign loans or significant concentrations in any one industry. As of December 31, 2024, approximately 72.3% of our loan portfolio was secured by real estate, compared with 74.2% at December 31, 2023.
Previous wording
The Company's non-owner occupied portfolio is well diversified. Below is a summary of the non-owner occupied CRE portfolio by property type as of December 31, 2023:
Current wording
The Company's non-owner occupied portfolio is well diversified. Below is a summary of the non-owner occupied CRE portfolio by property type and significant MSAs or state as of December 31, 2024:
Previous wording
At December 31, 2023, the allowance for credit losses on loans totaled $307.1 million, or 1.52% of loans, compared with $205.7 million, or 1.04% of loans, at December 31, 2022. The increase in the allowance for credit losses on loans as a percentage of loans compared with December 31, 2022 was primarily attributable to declines in forecast economic conditions, particularly levels of commercial real estate prices, compared with 2022. For the year ended December 31, 2023, our net charge off ratio as a percentage of average loans increased to 0.25%, compared with 0.08% for the year ended December 31, 2022. This increase was primarily a result of increased charge-offs in our equipment finance division, which we expanded at the end of 2021, resulting in increased net charge-offs in our commercial, financial and agricultural loan segment. Included in net charge-offs for the year ended December 31, 2023 was $5.6 million in charge-offs on loans which were fully reserved upon acquisition. Excluding those charge-offs, net charge-offs for 2023 would have been 0.22%.
Current wording
At December 31, 2024, the allowance for credit losses on loans totaled $338.1 million, or 1.63% of loans, compared with $307.1 million, or 1.52% of loans, at December 31, 2023. The increase in the allowance for credit losses on loans as a percentage of loans compared with December 31, 2023 was primarily attributable to declines in forecast economic conditions, particularly levels of commercial real estate prices, compared with 2023. For the year ended December 31, 2024, our net charge off ratio as a percentage of average loans decreased to 0.19%, compared with 0.25% for the year ended December 31, 2023. This decrease was primarily a result of decreased charge-offs in our commercial and industrial portfolio. Included in net charge-offs for the year ended December 31, 2023 was $5.6 million in charge-offs on loans which were fully reserved upon acquisition. Excluding those charge-offs, net charge-offs for 2023 would have been 0.22%.
Previous wording
The provision for credit losses on loans for the year ended December 31, 2023 was $153.5 million, compared with $52.6 million for the year ended December 31, 2022. This increase primarily resulted from the updated economic forecast and organic loan growth during 2023. While the forecast level of certain economic variables used in our CECL model improved year over year, the forecast commercial real estate price index declined compared with the forecast used at December 31, 2022. As of December 31, 2023 our ratio of nonperforming assets to total assets had increased to 0.69% from 0.61% at December 31, 2022. Included in non-performing assets were serviced GNMA-guaranteed residential mortgage loans totaling $90.2 million and $69.6 million at December 31, 2023 and 2022, respectively. Non-performing assets, excluding GNMA-guaranteed loans, represented 0.33% of total assets at December 31, 2023, compared with 0.34% of total assets at December 31, 2022.
Current wording
The provision for credit losses on loans for the year ended December 31, 2024 was $69.8 million, compared with $153.5 million for the year ended December 31, 2023. This decrease primarily resulted from the updated economic forecast during 2024, partially offset by organic loan growth during the year. As of December 31, 2024 our ratio of nonperforming assets to total assets had decreased to 0.47% from 0.69% at December 31, 2023. Included in non-performing assets were serviced GNMA-guaranteed residential mortgage loans totaling $12.0 million and $90.2 million at December 31, 2024 and 2023, respectively. Non-performing assets, excluding GNMA-guaranteed loans, represented 0.42% of total assets at December 31, 2024, compared with 0.33% of total assets at December 31, 2023.
Previous wording
We manage the mix of asset and liability maturities in an effort to control the effects of changes in the general level of interest rates on net interest income. Except for its effect on the general level of interest rates, inflation does not have a material impact on the balance sheet due to the rate variability and short-term maturities of its earning assets. In particular, approximately 38.4% of earning assets mature or reprice within one year or less. Mortgage loans, generally our loan category with the longest maturity, are usually made with fifteen to thirty year maturities, but a portion is at a variable interest rate with an adjustment between origination date and maturity date.
Current wording
We manage the mix of asset and liability maturities in an effort to control the effects of changes in the general level of interest rates on net interest income. Except for its effect on the general level of interest rates, inflation does not have a material impact on the balance sheet due to the rate variability and short-term maturities of its earning assets. In particular, approximately
Previous wording
Management and the ALCO Committee evaluates available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. The Company does not intend to sell these investment securities at an unrealized loss position at December 31, 2023, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at December 31, 2023, management determined $69,000 was attributable to credit impairment and decreased the allowance for credit losses accordingly. The remaining $44.7 million in unrealized loss was determined to be from factors other than credit. The Company's held-to-maturity securities have no expected credit losses and no related allowance for credit losses has been established.
Current wording
Management and the ALCO Committee evaluates available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. The Company does not intend to sell these investment securities at an unrealized loss position at December 31, 2024, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at December 31, 2024, management determined $69,000 was attributable to credit impairment and maintained the allowance for credit losses accordingly. The remaining $39.0 million in unrealized loss was determined to be from factors other than credit. The Company's held-to-maturity securities have no expected credit losses and no related allowance for credit losses has been established.
Previous wording
During 2023, total deposits increased $1.25 billion, or 6.4%, to $20.71 billion at December 31, 2023, compared with $19.46 billion at December 31, 2022. This growth was primarily attributable to $1.14 billion in brokered time deposits, partially offset by a decrease in non-time brokered deposits of $280.5 million. Non-interest bearing deposits decreased $1.44 billion, or 18.1%, to $6.49 billion at December 31, 2023 driven by a shift in customer behavior from rising interest rates which increased competition and alternatives for deposits. Interest-bearing deposits increased $2.68 billion, or 23.3%, to $14.22 billion at December 31, 2023.
Current wording
During 2024, total deposits increased $1.01 billion, or 4.9%, to $21.72 billion at December 31, 2024, compared with $20.71 billion at December 31, 2023. This growth was primarily attributable to an increase of $1.18 billion in money market accounts, partially offset by a decrease in brokered time deposits of $339.7 million. Non-interest bearing deposits increased $6.7 million, or 0.1%, to $6.50 billion at December 31, 2024. Interest-bearing deposits increased $1.01 billion, or 7.1%, to $15.22 billion at December 31, 2024.
Previous wording
At December 31, 2023, the Company had brokered deposits of $1.14 billion. The amounts of time certificates of deposit issued in amounts of more than $250,000 as of December 31, 2023, are shown below by category, which is based on time remaining until maturity of (i) three months or less, (ii) over three through six months, (iii) over six months through one year and (iv) over one year.
Current wording
At December 31, 2024, the Company had brokered deposits of $810.1 million. The amounts of time certificates of deposit issued in amounts of more than $250,000 as of December 31, 2024, are shown below by category, which is based on time remaining until maturity of (i) three months or less, (ii) over three through six months, (iii) over six months through one year and (iv) over one year.
Previous wording
As of December 31, 2023 and 2022, the Company had estimated uninsured deposits of $9.13 billion and $9.30 billion, respectively. These estimates were derived using the same methodologies and assumptions used for the Bank's regulatory reporting. Approximately $2.64 billion, or 29.0%, of the uninsured deposits at December 31, 2023 were for municipalities which are collateralized with investment securities or letters of credit.
Current wording
As of December 31, 2024 and 2023, the Company had estimated uninsured deposits of $10.24 billion and $9.13 billion, respectively. These estimates were derived using the same methodologies and assumptions used for the Bank's regulatory reporting. Approximately $3.49 billion, or 34.0%, of the uninsured deposits at December 31, 2024 were for municipalities which are collateralized with investment securities or letters of credit.
Previous wording
As of December 31, 2023, letters of credit issued by the Federal Home Loan Bank totaling $950.0 million were used to guarantee the Bank’s performance related to a portion of its public fund deposit balances.
Current wording
As of December 31, 2024, letters of credit issued by the Federal Home Loan Bank totaling $1.33 billion were used to guarantee the Bank’s performance related to a portion of its public fund deposit balances.
Previous wording
The capital resources of the Company are monitored on a periodic basis by state and federal regulatory authorities. During 2023, the Company’s capital increased $229.3 million, primarily due to net income of $269.1 million, which was partially offset by the cash dividends declared on common shares of $41.7 million and share repurchases of $20.3 million. During 2022, the Company’s capital increased $230.9 million, primarily due to net income of $346.5 million, which was partially offset by the cash dividends declared on common shares of $41.7 million and the impact to other comprehensive income of $62.1 million resulting from rising rates on our investment portfolio. For both 2023 and 2022, other capital related transactions, such as share-based compensation, common stock issuances through the exercise of stock options, and issuances of shares of restricted stock accounted for only a small change in the capital of the Company.
Current wording
The capital resources of the Company are monitored on a periodic basis by state and federal regulatory authorities. During 2024, the Company’s capital increased $324.8 million, primarily due to net income of $358.7 million, which was partially offset by the cash dividends declared on common shares of $45.2 million and share repurchases of $8.0 million. During 2023, the Company’s capital increased $229.3 million, primarily due to net income of $269.1 million, which was partially offset by the cash dividends declared on common shares of $41.7 million and share repurchases of $20.3 million. For both 2024 and 2023, other capital related transactions, such as share-based compensation, common stock issuances through the exercise of stock options, and issuances of shares of restricted stock accounted for only a small change in the capital of the Company.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Amortization of intangible assets decreased $1.1 million, or 5.8%, to $17.2 million for 2024 compared with $18.2 million for 2023. This reduction was attributable to a reduction in core deposit intangible amortization.
Current report — wording carried from elsewhere
Data processing and communication expenses increased $6.2 million, or 11.6%, to $59.7 million in 2024, compared with $53.5 million for 2023. This increase is primarily related to technology enhancements implemented utilizing cost saves identified from other areas of the Company.
Current report — wording carried from elsewhere
FDIC insurance decreased $11.4 million, or 42.5%, to $15.5 million in 2024, compared with $26.9 million in 2023. Included in FDIC insurance for 2023 was $11.6 million related to the FDIC special assessment pursuant to the systemic risk determination following the closures of Silicon Valley Bank and Signature Bank in March 2023, compared with $1.5 million in 2024.
Current report — wording carried from elsewhere
43.0% of earning assets mature or reprice within one year or less. Mortgage loans, generally our loan category with the longest maturity, are usually made with fifteen to thirty year maturities, but a portion is at a variable interest rate with an adjustment between origination date and maturity date.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
See Note 6, “Goodwill and Intangible Assets,” in the notes to consolidated financial statements for additional details.
Previous report — wording carried elsewhere
Merger and conversion charges were $1.2 million in 2022, a decrease of $3.0 million, or 71.2%, compared with $4.2 million recorded for 2021. Merger and conversion charges for both periods were primarily related to the acquisition of Balboa.