$60.56
$144.07
bear $60.56
base $101.74
bull $144.07
margin of safety $34.00
market price* $79.72
Ameris Bancorp is a $28.5 billion Southeastern bank holding company (Georgia, Florida, Alabama, the Carolinas, now expanding into Nashville). It holds $22.2 billion of loans and $22.6 billion of deposits, 30% of them non-interest-bearing. Its loan book is 43% commercial real estate, 20% residential, about 7% construction and development, with the rest commercial, consumer and equipment finance. Two units behave less like a normal bank: a national mortgage-banking operation and the Balboa equipment-finance lender. For a bank we count earnings after interest, because deposits are its raw material, and we subtract no borrowings. What moved since our last review. Excluding the verdict charge described below, per-share profit has run about $1.55-1.65 a quarter for the last four quarters (roughly $6.30 a year), against $6.00 for 2025 and $5.19 for 2024. Credit stays clean: net charge-offs 0.20%, problem assets 0.47% of assets, tangible book value $45.10 a share, tangible equity 11.0% of tangible assets. The new negative is a June 2026 California jury verdict in an employment case brought by a former executive (Byrne v. Ameris Bank): $16.5 million of compensatory damages plus about $62.9 million of punitive damages. Ameris booked an $82.5 million pre-tax charge (about $0.83 a share after tax), cutting second-quarter profit to $0.77 a share, and says it intends to appeal. No insurance recovery is disclosed, and the 2025 annual report predates it, so the outcome is uncertain. Earlier figures were built on a different basis and are not comparable. Earnings level. Per-share profit was $2.08 in 2016 and $6.00 in 2025, but much of that growth came from acquisitions that doubled the share count, so we do not extrapolate it. The 2020-21 mortgage-refinancing boom, which inflated profit well beyond what the mortgage unit earns in normal years, is excluded as non-repeatable. We anchor on the median of 2022-2025 ($4.99, $3.89, $5.19, $6.00), or $5.09 a share. That window starts after the Atlantic Capital deal and includes the 2023 rate-squeeze trough. The last four quarters ran above it, but they also had unusually low credit losses, so we keep the anchor and show the higher run-rate only in the bull case. Last year's profit growth was 15.6%; our base case assumes 4% in year one, below that. Growth we credit. Ameris retains most of its profit and has lent it out at a steady pace (loans grew at a 6.4% annualized pace in the latest quarter), so we credit 4% a year for three years, 3% for three, then 2%, below the demonstrated pace, and tapering. We give no credit for acquisitions, share gains, Nashville, mortgage recovery or margin expansion; none is secured or a proven repeatable process. We also give no credit for the several hundred million dollars of capital above comfortable levels, which buybacks may eventually return. After year ten we assume no further growth, only that the franchise keeps earning at 95% of the year-ten level: a long-established deposit franchise that has earned $3.89 or more a share in every year since 2022 is a structural feature, but cycles will keep taking a bite. Base case: $101.74 a share. The stream is $5.29 a share in year one rising to about $6.77 in year ten, with a mild credit downturn in years five and six costing about $1.15 a share each year. The legal verdict is deducted in full ($0.83). The bank has no borrowings that need to be subtracted, so the business is worth about $102.57 and owes about $0.83 of litigation, a difference of $101.74. Bear case: $60.56 a share. We repeat a full Southeastern credit cycle like 2008-2011, when Ameris's own net charge-offs ran at an annualized 3.1% in early 2010 and problem assets reached about 5%. Applied to today's loan book, we assume 7% cumulative losses over four years (about $1.5 billion; construction about 20%, commercial real estate 7%, residential and commercial 5%) plus 15% lower pre-provision income. Per-share profit goes $5.09, $1.29, $(0.89), $(0.43), $2.21, then settles at 92% of the anchor, $4.68, and the franchise afterwards earns 93% of that to allow for a later cycle. Capital stays above regulatory minimums, because tangible equity starts at 11%, so we assume no dilution. We also assume the full $82.5 million verdict is paid with no tax benefit ($1.23). The business is worth about $61.79, owes $1.23 of litigation and nothing else, a difference of $60.56. This exceeds tangible book (close to $45 at the end of our downturn) because after the cycle the bank would still earn about $4.70 a share on that book, a return of roughly 10-11%, as it has in every year since 2022. Bull case: $144.07 a share. Per-share profit starts at the recent $6.30 run-rate, grows 5% for five years (loan growth of 6.4% annualized, funded from retained profit), 4% for three, 3% for two, with one mild credit year (-$0.80), and holds at 97% of the year-ten level afterwards. The business is worth about $144.90, owes $0.83 of litigation, a difference of $144.07. We do not assume the punitive damages are reduced on appeal, since nothing in the record supports it. What could make this wrong. (1) A credit cycle worse than 2008-2011 in commercial real estate, now 43% of loans, or at Balboa. (2) More mortgage weakness than 2023. (3) The verdict is upheld with fees or turns up related claims. (4) Another acquisition would again dilute per-share results; we count none. About a quarter of stated book value is goodwill from past deals, which is accounting value rather than cash. Margin-of-safety price: $34. We are fairly sure of an earnings level near $5, since each of the last four years reached at least $3.89 and the last four quarters ran at about $6.30. The worst plausible outcome is a Georgia/Florida credit cycle, the one outcome Ameris has already lived through; in our bear case the bank loses money for two years but keeps its capital, so the structure survives, and tangible book stays close to $45. If we are wrong on credit and the downturn is worse than modeled, or the verdict stands plus extra costs, the shares could be worth well under tangible book for years. The price assumes a five-year holding period; during that period the bank pays about $0.80 a share in dividends and uses surplus capital to repurchase shares. At $34 the shares are priced at under 7 times the anchor earnings and about three-quarters of tangible book, which leaves room for a 20% annual return if earnings simply stay near the anchor, and a cushion against a bad cycle. At materially higher prices a credit downturn would imply a return well below that.