On Monday, Stephens, a financial services firm, increased its price target on shares of Ameris Bancorp (NASDAQ:NYSE:ABCB) to $64.00, up from the previous $52.00, while maintaining an Equal Weight rating on the stock.
The revision follows Ameris Bancorp's reported operating earnings per share (EPS) of $1.17, which surpassed the anticipated $1.15 consensus. This beat was attributed to a lower provision that added $0.03 to the EPS, as well as non-performing loans (NCOs) that came in below expectations and demonstrated stable asset quality trends.
Ameris Bancorp's core pre-provision net revenue (PPNR) of $127.8 million exceeded the consensus estimate by 2%, or roughly $0.02, driven by stronger net interest income (NII) that added $0.08 and fees that contributed an additional $0.03. These gains were partially offset by higher expenses, which detracted $0.08 from the PPNR, aligning with Stephens' projections.
The company's loan growth was reported at 7.6% on a last quarter annualized (LQA) basis, or 4.3% excluding mortgage warehouse, slightly above the consensus and Stephens' estimate of 6.7%. This growth was supported by mortgage warehouse activities, with a mid-single-digit guidance reaffirmed, and deposits growth outpacing peers at 8.5% LQA, with non-interest bearing deposits growing by 6.8%.
The net interest margin (NIM) expanded by 7 basis points to 3.58%, beating the consensus expectation of 3.49%, and included a one-time benefit of 4 basis points. Despite this increase, Stephens anticipates that Ameris Bancorp can maintain a flat core NIM quarter over quarter.
Based on these results, Stephens has raised its 2024 and 2025 PPNR estimates by 1% and adjusted the related operating EPS to $4.85 and $4.95, respectively. The firm reiterated its Equal Weight rating on Ameris Bancorp's stock while lifting the price target to reflect the updated estimates.
In other recent news, Ameris Bancorp demonstrated robust financial results in the second quarter, reporting a net income of over $90 million or $1.32 per diluted share. The company experienced substantial growth in deposits, earning assets, and loans, with the diversified loan portfolio increasing by over $392 million. The firm maintains a strong balance sheet supported by a healthy allowance for credit losses and solid capitalization.
Ameris Bancorp is optimistic about its growth prospects, particularly in the Southeastern markets, projecting mid-single digit growth in loans and deposits for 2024. However, the company does not anticipate a surge in mortgage production for the remainder of the year.
The firm's executives expressed confidence in the company's capital position and credit quality, highlighting the importance of net interest income growth for driving earnings and efficiency.
In a strategic move to boost market visibility, Ameris Bancorp has transitioned its stock listing to the New York Stock Exchange. These are the recent developments for Ameris Bancorp, reflecting its strong financial position and strategic approach to growth and profitability.
InvestingPro Insights
As Ameris Bancorp continues to make headlines with its financial performance, data and insights from InvestingPro provide a deeper understanding of the company's current market position. With a robust market capitalization of $4.25 billion and a P/E ratio of 13.53, Ameris Bancorp trades at a valuation that reflects its recent success. The company's revenue growth over the last twelve months as of Q2 2024 stands at a healthy 7.12%, with an impressive quarterly growth rate of 21.82%, signaling strong operational performance.
InvestingPro Tips highlight Ameris Bancorp's high shareholder yield and consistent dividend payments for 11 consecutive years, which may appeal to income-focused investors. In contrast, analysts have recently revised their earnings downwards for the upcoming period, and the stock is currently trading near its 52-week high, suggesting that potential investors should be cautious of the stock's overbought condition. For those looking for more comprehensive analysis, additional InvestingPro Tips can be found at https://www.investing.com/pro/ABCB, which include 10 more tips that could guide investment decisions.
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