10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM	10-Q

(Mark One)

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

For the quarterly period ended June 30, 2022

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number:	001-13901
---	---

AMERIS BANCORP
(Exact name of registrant as specified in its charter)		Georgia	58-1456434
---	---
(State of incorporation)	(IRS Employer ID No.)		3490 Piedmont Rd N.E., Suite 1550
---	---	---
Atlanta	Georgia	30305
(Address of principal executive offices)				(404)	639-6500
---	---
(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1 per share	ABCB	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No   ¨

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐   No  ý

There were 69,360,054 shares of Common Stock outstanding as of July 31, 2022.

AMERIS BANCORP

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Consolidated Balance Sheets as ofJune30, 2022 (unaudited) and December 31, 2021	1
	Consolidated Statements of Income and Comprehensive Income for the Threeand SixMonths EndedJune30, 2022 and 2021 (unaudited)	2
	Consolidated Statements of Shareholders’ Equity for the Threeand SixMonths EndedJune30, 2022 and 2021 (unaudited)	3
	Consolidated Statements of Cash Flows for theSix MonthsEndedJune30, 2022 and 2021 (unaudited)	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	57
Item 4.	Controls and Procedures.	58
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	59
Item 1A.	Risk Factors.	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	59
Item 3.	Defaults Upon Senior Securities.	59
Item 4.	Mine Safety Disclosures.	59
Item 5.	Other Information.	59
Item 6.	Exhibits.	60
Signatures		61

Item 1. Financial Statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets

(dollars in thousands, except per share data)

	June 30, 2022 (unaudited)		December 31, 2021
Assets
Cash and due from banks	$	345,627	$	307,813
Federal funds sold and interest-bearing deposits in banks	1,961,209		3,756,844
Cash and cash equivalents	2,306,836		4,064,657
Debt securities available-for-sale, at fair value, net of allowance for credit losses of $88 and $—	1,052,268		592,621
Debt securities held-to-maturity, at amortized cost, net of allowance for credit losses of $— and $— (fair value of $97,144 and $78,206)	111,654		79,850
Other investments	49,500		47,552
Loans held for sale, at fair value	555,665		1,254,632
Loans, net of unearned income	17,561,022		15,874,258
Allowance for credit losses	(172,642)		(167,582)
Loans, net	17,388,380		15,706,676
Other real estate owned, net	835		3,810
Premises and equipment, net	224,249		225,400
Goodwill	1,023,056		1,012,620
Other intangible assets, net	115,613		125,938
Cash value of bank owned life insurance	384,862		331,146
Other assets	474,552		413,419
Total assets	$	23,687,470	$	23,858,321
Liabilities
Deposits:
Noninterest-bearing	$	8,262,929	$	7,774,823
Interest-bearing	11,422,053		11,890,730
Total deposits	19,684,982		19,665,553
Securities sold under agreements to repurchase	953		5,845
Other borrowings	425,592		739,879
Subordinated deferrable interest debentures	127,325		126,328
Other liabilities	375,242		354,265
Total liabilities	20,614,094		20,891,870
Commitments and Contingencies (Note 9)
Shareholders’ Equity
Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, par value $1; 200,000,000 shares authorized; 72,251,856 and 72,017,126 shares issued	72,251		72,017
Capital surplus	1,931,088		1,924,813
Retained earnings	1,157,359		1,006,436
Accumulated other comprehensive income, net of tax	(12,635)		15,590
Treasury stock, at cost, 2,891,395 and 2,407,898 shares	(74,687)		(52,405)
Total shareholders’ equity	3,073,376		2,966,451
Total liabilities and shareholders’ equity	$	23,687,470	$	23,858,321

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income (unaudited)

(dollars and shares in thousands, except per share data)

	Three Months Ended<br>June 30,				Six Months Ended<br>June 30,
	2022		2021		2022		2021
Interest income
Interest and fees on loans	$	190,740	$	167,761	$	368,306	$	338,918
Interest on taxable securities	7,064		5,244		11,303		11,362
Interest on nontaxable securities	269		139		455		280
Interest on deposits in other banks and federal funds sold	4,495		607		5,878		1,141
Total interest income	202,568		173,751		385,942		351,701
Interest expense
Interest on deposits	4,908		5,775		9,000		12,573
Interest on other borrowings	6,296		6,124		13,034		12,299
Total interest expense	11,204		11,899		22,034		24,872
Net interest income	191,364		161,852		363,908		326,829
Provision for loan losses	13,227		(899)		10,493		(17,478)
Provision for unfunded commitments	1,779		1,299		10,788		(10,540)
Provision for other credit losses	(82)		(258)		(126)		(431)
Provision for credit losses	14,924		142		21,155		(28,449)
Net interest income after provision for credit losses	176,440		161,710		342,753		355,278
Noninterest income
Service charges on deposit accounts	11,148		11,007		22,206		21,836
Mortgage banking activity	58,761		70,231		121,699		168,717
Other service charges, commissions and fees	998		1,056		1,937		2,072
Net loss on securities	248		1		221		(11)
Other noninterest income	12,686		6,945		24,689		14,599
Total noninterest income	83,841		89,240		170,752		207,213
Noninterest expense
Salaries and employee benefits	81,545		85,505		165,826		181,490
Occupancy and equipment	12,746		10,812		25,473		22,593
Data processing and communications expenses	12,155		11,877		24,727		23,761
Credit resolution-related expenses	496		622		(469)		1,169
Advertising and marketing	3,122		1,946		5,110		3,377
Amortization of intangible assets	5,144		4,065		10,325		8,191
Merger and conversion charges	—		—		977		—
Loan servicing expense	9,920		4,914		18,839		10,814
Other noninterest expenses	17,068		16,020		35,208		33,164
Total noninterest expense	142,196		135,761		286,016		284,559
Income before income tax expense	118,085		115,189		227,489		277,932
Income tax expense	28,019		26,862		55,725		64,643
Net income	90,066		88,327		171,764		213,289
Other comprehensive loss
Net unrealized holding losses arising during period on investment securities available-for-sale, net of tax benefit of $(2,870), $(283), $(7,503) and $(2,255)	(10,794)		(1,066)		(28,225)		(8,481)
Total other comprehensive loss	(10,794)		(1,066)		(28,225)		(8,481)
Comprehensive income	$	79,272	$	87,261	$	143,539	$	204,808
Basic earnings per common share	$	1.30	$	1.27	$	2.48	$	3.07
Diluted earnings per common share	$	1.30	$	1.27	$	2.47	$	3.06
Weighted average common shares outstanding
Basic	69,136		69,497		69,246		69,448
Diluted	69,316		69,792		69,485		69,765

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity (unaudited)

(dollars in thousands)

	Three Months Ended June 30, 2022
	Common Stock			Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount						Shares			Amount
Balance, March 31, 2022	72,212,322	$	72,212	$	1,928,702	$	1,077,725		$	(1,841)	2,773,238	$	(69,639)	$	3,007,159
Issuance of restricted shares	18,953	19		(19)		—			—		—	—		—
Forfeitures of restricted shares	(10,751)	(11)		(81)		—			—		—	—		(92)
Proceeds from exercise of stock options	31,332	31		849		—			—		—	—		880
Share-based compensation	—	—		1,637		—			—		—	—		1,637
Purchase of treasury shares	—	—		—		—			—		118,157	(5,048)		(5,048)
Net income	—	—		—		90,066			—		—	—		90,066
Dividends on common shares ($0.15 per share)	—	—		—		(10,432)			—		—	—		(10,432)
Other comprehensive loss during the period	—	—		—		—			(10,794)		—	—		(10,794)
Balance, June 30, 2022	72,251,856	$	72,251	$	1,931,088	$	1,157,359		$	(12,635)	2,891,395	$	(74,687)	$	3,073,376
	Six Months Ended June 30, 2022
	Common Stock			Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount						Shares			Amount
Balance, December 31, 2021	72,017,126	$	72,017	$	1,924,813	$	1,006,436		$	15,590	2,407,898	$	(52,405)	$	2,966,451
Issuance of restricted shares	164,346	164		1,177		—			—		—	—		1,341
Forfeitures of restricted shares	(10,751)	(10)		(81)		—			—		—	—		(91)
Proceeds from exercise of stock options	81,135	80		2,244		—			—		—	—		2,324
Share-based compensation	—	—		2,935		—			—		—	—		2,935
Purchase of treasury shares	—	—		—		—			—		483,497	(22,282)		(22,282)
Net income	—	—		—		171,764			—		—	—		171,764
Dividends on common shares ($0.30 per share)	—	—		—		(20,841)			—		—	—		(20,841)
Other comprehensive loss during the period	—	—		—		—			(28,225)		—	—		(28,225)
Balance, June 30, 2022	72,251,856	$	72,251	$	1,931,088	$	1,157,359		$	(12,635)	2,891,395	$	(74,687)	$	3,073,376
	Three Months Ended June 30, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Common Stock			Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount						Shares			Amount
Balance, March 31, 2021	71,954,088	$	71,954	$	1,917,990	$	785,984		$	26,090	2,240,662	$	(44,422)	$	2,757,596
Issuance of restricted shares	13,233	13		(13)		—			—		—	—		—
Forfeitures of restricted shares	(750)	(1)		(19)		—			—		—	—		(20)
Proceeds from exercise of stock options	41,300	42		1,167		—			—		—	—		1,209
Share-based compensation	—	—		1,441		—			—		—	—		1,441
Purchase of treasury shares	—	—		—		—			—		—	—		—
Net income	—	—		—		88,327			—		—	—		88,327
Dividends on common shares ($0.15 per share)	—	—		—		(10,483)			—		—	—		(10,483)
Other comprehensive loss during the period	—	—		—		—			(1,066)		—	—		(1,066)
Balance, June 30, 2021	72,007,871	$	72,008	$	1,920,566	$	863,828		$	25,024	2,240,662	$	(44,422)	$	2,837,004
	Six Months Ended June 30, 2021
	Common Stock			Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income, Net of Tax		Treasury Stock			Total Shareholders' Equity
	Shares	Amount						Shares			Amount
Balance, December 31, 2020	71,753,705	$	71,754	$	1,913,285	$	671,510		$	33,505	2,212,224	$	(42,966)	$	2,647,088
Issuance of restricted shares	99,308	99		500		—			—		—	—		599
Forfeitures of restricted shares	(750)	(1)		(19)		—			—		—	—		(20)
Proceeds from exercise of stock options	155,608	156		4,055		—			—		—	—		4,211
Share-based compensation	—	—		2,745		—			—		—	—		2,745
Purchase of treasury shares	—	—		—		—			—		28,438	(1,456)		(1,456)
Net income	—	—		—		213,289			—		—	—		213,289
Dividends on common shares ($0.30 per share)	—	—		—		(20,971)			—		—	—		(20,971)
Other comprehensive loss during the period	—	—		—		—			(8,481)		—	—		(8,481)
Balance, June 30, 2021	72,007,871	$	72,008	$	1,920,566	$	863,828		$	25,024	2,240,662	$	(44,422)	$	2,837,004

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

	Six Months Ended<br>June 30,
	2022		2021
Operating Activities
Net income	$	171,764	$	213,289
Adjustments reconciling net income to net cash provided by (used in) operating activities:
Depreciation	9,191		8,226
Net losses on sale or disposal of premises and equipment	39		920
Net write-downs on other assets	—		149
Provision for credit losses	21,155		(28,449)
Net write-downs and (gains) losses on sale of other real estate owned	(1,758)		(558)
Share-based compensation expense	3,045		3,454
Amortization of intangible assets	10,325		8,191
Amortization of operating lease right of use assets	5,750		5,866
Provision for deferred taxes	10,505		26,488
Net amortization of investment securities available-for-sale	588		1,985
Net amortization of investment securities held-to-maturity	51		1
Net amortization of other investments	396		—
Net (gain) loss on securities	(221)		11
Accretion of discount on purchased loans, net	(627)		(10,589)
Net amortization on other borrowings	216		222
Amortization of subordinated deferrable interest debentures	997		986
Loan servicing asset recovery	(20,492)		(11,388)
Originations of mortgage loans held for sale	(2,406,310)		(4,425,420)
Payments received on mortgage loans held for sale	19,746		24,477
Proceeds from sales of mortgage loans held for sale	2,833,622		4,198,098
Net (gains) losses on sale of mortgage loans held for sale	78,173		(84,992)
Originations of SBA loans	(30,793)		(44,257)
Proceeds from sales of SBA loans	40,286		41,017
Net gains on sale of SBA loans	(3,484)		(3,453)
Increase in cash surrender value of bank owned life insurance	(3,716)		(2,078)
Gain on bank owned life insurance proceeds	—		(603)
Net gains on other loans held for sale	—		(457)
Change attributable to other operating activities	(24,580)		(13,363)
Net cash provided by (used in) operating activities	713,868		(92,227)
Investing Activities, net of effects of business combinations
Proceeds from maturities of time deposits in other banks	—		249
Purchases of securities available-for-sale	(613,715)		—
Purchases of investment securities held-to-maturity	(33,217)		(29,056)
Proceeds from maturities and paydowns of securities available-for-sale	117,664		192,022
Proceeds from maturities and paydowns of securities held-to-maturity	1,362		—
Net (increase) decrease in other investments	(2,123)		570
Net increase in loans	(1,533,706)		(219,110)
Purchases of premises and equipment	(8,192)		(17,196)
Proceeds from sale of premises and equipment	46		946
Proceeds from sales of other real estate owned	4,962		7,902
Purchases of bank owned life insurance	(50,000)		(100,000)
Proceeds from bank owned life insurance	—		1,309
Payments received on other loans held for sale	—		9,136
Proceeds from sales of other loans held for sale	—		156,803
Net cash and cash equivalents paid in acquisitions	(14,003)		—
Net cash provided by (used in) investing activities	(2,130,922)		3,575
			(Continued)

AMERIS BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

	Six Months Ended<br>June 30,
	2022		2021
Financing Activities, net of effects of business combinations
Net increase in deposits	$	19,429	$	1,300,174
Net decrease in securities sold under agreements to repurchase	(4,892)		(6,097)
Repayment of other borrowings	(314,503)		(74)
Proceeds from exercise of stock options	2,324		4,211
Dividends paid - common stock	(20,843)		(20,888)
Purchase of treasury shares	(22,282)		(1,456)
Net cash provided by (used in) financing activities	(340,767)		1,275,870
Net increase (decrease) in cash, cash equivalents and restricted cash	(1,757,821)		1,187,218
Cash, cash equivalents and restricted cash at beginning of period	4,064,657		2,117,306
Cash, cash equivalents and restricted cash at end of period	$	2,306,836	$	3,304,524
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	23,472	$	25,985
Income taxes	51,851		30,924
Loans transferred to other real estate owned	229		1,239
Loans transferred from loans held for sale to loans held for investment	167,727		85,748
Loans provided for the sales of other real estate owned	2,288		1,052
Right-of-use assets obtained in exchange for new operating lease liabilities	1,537		2,932
Assets acquired in business acquisitions	10,734		—
Liabilities assumed in business acquisitions	(3,269)		—
Change in unrealized gain (loss) on securities available-for-sale, net of tax	(28,225)		(8,481)
			(Concluded)

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

June 30, 2022

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Nature of Business

Ameris Bancorp (the “Company” or “Ameris”) is a financial holding company headquartered in Atlanta, Georgia. Ameris conducts substantially all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At June 30, 2022, the Bank operated 164 branches in select markets in Georgia, Alabama, Florida, North Carolina and South Carolina. Our business model capitalizes on the efficiencies of a large financial services company, while still providing the community with the personalized banking service expected by our customers. We manage our Bank through a balance of decentralized management responsibilities and efficient centralized operating systems, products and loan underwriting standards. The Company’s Board of Directors and senior managers establish corporate policy, strategy and administrative policies. Within our established guidelines and policies, the banker closest to the customer responds to the differing needs and demands of his or her unique market.

Basis of Presentation

The accompanying unaudited consolidated financial statements for Ameris have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statement presentation. The interim consolidated financial statements included herein are unaudited but reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six month periods ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

In preparing the consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits in banks, federal funds sold and restricted cash. Restricted cash held for securitization investors, which are reported on the Company's consolidated balance sheets in cash and due from banks, was $0 and $43.0 million at June 30, 2022 and December 31, 2021, respectively.

Reclassifications

Certain reclassifications of prior year amounts have been made to conform with the current year presentations. The reclassifications had no effect on net income or shareholders' equity as previously reported.

Accounting Standards Pending Adoption

ASU No. 2022-02 – Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). ASU 2022-02 eliminates the troubled debt restructuring ("TDR") measurement and recognition guidance and requires that entities evaluate whether the modification represents a new loan or a continuation of an existing loan consistent with the accounting for other loan modifications. Additional disclosures relating to modifications to borrowers experiencing financial difficulty are required under ASU 2022-02. ASU 2022-02 also requires disclosure of current-period gross write-offs by year of origination. ASU 2022-02 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The amendments of ASU 2022-02 should be adopted prospectively. The amendments related to the recognition and measurement of TDRs may optionally be adopted using a modified retrospective transition method.

Early adoption is permitted. The Company is currently evaluating the impact on the consolidated financial statements of adopting ASU 2022-02.

ASU No. 2021-01 – Reference Rate Reform (Topic 848): Scope ("ASU 2021-01"). ASU 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. Because the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in effect for a limited time, from March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact on the consolidated financial statements of adopting ASU 2021-01.

ASU No. 2020-04 – Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The amendments, which are elective, provide expedients and exceptions for applying GAAP to contract modifications and hedging relationships affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate that is expected to be discontinued due to reference rate reform. The optional expedients for contract modifications apply consistently for all contracts or transactions within the relevant Codification Topic, Subtopic, or Industry Subtopic that contains the guidance that otherwise would be required to be applied, while those for hedging relationships can be elected on an individual hedging relationship basis. Because the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in effect for a limited time, from March 12, 2020 through December 31, 2022. The Company has established a working committee with representatives from relevant functional areas to inventory the contracts and accounts that are tied to LIBOR and develop a transition plan for the affected items. The Company is currently evaluating the impact on the consolidated financial statements of adopting ASU 2020-04.

NOTE 2 – INVESTMENT SECURITIES

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

(dollars in thousands)<br><br>Securities available-for-sale	Amortized<br>Cost		Allowance for Credit Losses		Gross<br>Unrealized<br>Gains		Gross<br>Unrealized<br>Losses		Estimated<br>Fair<br>Value
June 30, 2022
U.S. Treasuries	$	314,613	$	—	$	—	$	(1,724)	$	312,889
U.S. government-sponsored agencies	2,050		—		—		(29)		2,021
State, county and municipal securities	41,428		—		261		(726)		40,963
Corporate debt securities	15,897		(88)		2		(348)		15,463
SBA pool securities	35,854		—		6		(1,429)		34,431
Mortgage-backed securities	658,508		—		420		(12,427)		646,501
Total debt securities available-for-sale	$	1,068,350	$	(88)	$	689	$	(16,683)	$	1,052,268
December 31, 2021
U.S. government-sponsored agencies	$	7,084	$	—	$	88	$	—	$	7,172
State, county and municipal securities	45,470		—		2,342		—		47,812
Corporate debt securities	27,897		—		719		(120)		28,496
SBA pool securities	44,312		—		958		(69)		45,201
Mortgage-backed securities	448,124		—		15,822		(6)		463,940
Total debt securities available-for-sale	$	572,887	$	—	$	19,929	$	(195)	$	592,621

The amortized cost and estimated fair value of securities held-to-maturity along with gross unrealized gains and losses are summarized as follows:

(dollars in thousands)<br><br>Securities held-to-maturity	Amortized<br>Cost		Gross<br>Unrealized<br>Gains		Gross<br>Unrealized<br>Losses		Estimated<br>Fair<br>Value
June 30, 2022
State, county and municipal securities	$	31,905	$	—	$	(4,279)	$	27,626
Mortgage-backed securities	79,749		—		(10,231)		69,518
Total debt securities held-to-maturity	$	111,654	$	—	$	(14,510)	$	97,144
December 31, 2021
State, county and municipal securities	$	8,905	$	4	$	(198)	$	8,711
Mortgage-backed securities	70,945		—		(1,450)		69,495
Total debt securities held-to-maturity	$	79,850	$	4	$	(1,648)	$	78,206

The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity as of June 30, 2022, by contractual maturity are shown below. Maturities may differ from contractual maturities in mortgage-backed securities because the mortgages underlying these securities may be called or repaid without penalty. Therefore, these securities are not included in the maturity categories in the following maturity summary:

	Available-for-Sale				Held-to-Maturity
(dollars in thousands)	Amortized<br>Cost		Estimated Fair Value		Amortized<br>Cost		Estimated Fair Value
Due in one year or less	$	6,745	$	6,754	$	—	$	—
Due from one year to five years	339,429		337,279		—		—
Due from five to ten years	31,462		31,085		—		—
Due after ten years	32,206		30,649		31,905		27,626
Mortgage-backed securities	658,508		646,501		79,749		69,518
	$	1,068,350	$	1,052,268	$	111,654	$	97,144

Securities with a carrying value of approximately $298.2 million and $366.7 million at June 30, 2022 and December 31, 2021, respectively, serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other purposes required or permitted by law.

The following table shows the gross unrealized losses and estimated fair value of available-for-sale securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at June 30, 2022 and December 31, 2021:

	Less Than 12 Months				12 Months or More				Total
(dollars in thousands)<br><br>Securities available-for-sale	Estimated<br>Fair<br>Value		Unrealized<br>Losses		Estimated<br>Fair<br>Value		Unrealized<br>Losses		Estimated<br>Fair<br>Value		Unrealized<br>Losses
June 30, 2022
U.S. Treasuries	$	312,889	$	(1,724)	$	—	$	—	$	312,889	$	(1,724)
U.S. government-sponsored agencies	2,021		(29)		—		—		2,021		(29)
State, county and municipal securities	15,199		(726)		—		—		15,199		(726)
Corporate debt securities	12,244		(256)		1,320		(92)		13,564		(348)
SBA pool securities	31,755		(1,379)		2,310		(50)		34,065		(1,429)
Mortgage-backed securities	569,386		(12,427)		1		—		569,387		(12,427)
Total debt securities available-for-sale	$	943,494	$	(16,541)	$	3,631	$	(142)	$	947,125	$	(16,683)
December 31, 2021
Corporate debt securities	$	—	$	—	$	1,380	$	(120)	$	1,380	$	(120)
SBA pool securities	1,312		(6)		2,572		(63)		3,884		(69)
Mortgage-backed securities	5,514		(6)		1		—		5,515		(6)
Total debt securities available-for-sale	$	6,826	$	(12)	$	3,953	$	(183)	$	10,779	$	(195)

As of June 30, 2022, the Company’s available-for-sale security portfolio consisted of 433 securities, 331 of which were in an unrealized loss position. At June 30, 2022, the Company held 270 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. At June 30, 2022, the Company held 33 U.S. Small Business Administration (“SBA”) pool securities, 12 state, county and municipal securities, four corporate securities two U.S. government-sponsored agency securities, and ten US Treasury securities that were in an unrealized loss position.

The following table shows the gross unrealized losses and estimated fair value of held-to-maturity securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at June 30, 2022:

	Less Than 12 Months				12 Months or More				Total
(dollars in thousands)<br><br>Securities held-to-maturity	Estimated<br>Fair<br>Value		Unrealized<br>Losses		Estimated<br>Fair<br>Value		Unrealized<br>Losses		Estimated<br>Fair<br>Value		Unrealized<br>Losses
June 30, 2022
State, county and municipal securities	$	27,626	$	(4,279)	$	—	$	—	$	27,626	$	(4,279)
Mortgage-backed securities	69,518		(10,231)		—		—		69,518		(10,231)
Total debt securities held-to-maturity	$	97,144	$	(14,510)	$	—	$	—	$	97,144	$	(14,510)
December 31, 2021
State, county and municipal securities	$	3,707	$	(198)	$	—	$	—	$	3,707	$	(198)
Mortgage-backed securities	69,495		(1,450)		—		—		69,495		(1,450)
Total debt securities held-to-maturity	$	73,202	$	(1,648)	$	—	$	—	$	73,202	$	(1,648)

As of June 30, 2022, the Company’s held-to-maturity security portfolio consisted of 19 securities, 19 of which were in an unrealized loss position. At June 30, 2022, the Company held 13 mortgage-backed securities and six state, county and municipal securities that were in an unrealized loss position.

During 2022 and 2021, the Company received timely and current interest and principal payments on all of the securities classified as corporate debt securities. The Company’s investments in subordinated debt include investments in regional and super-regional banks on which the Company prepares regular analysis through review of financial information and credit ratings. Investments in preferred securities are also concentrated in the preferred obligations of regional and super-regional banks through non-pooled investment structures. The Company did not have investments in “pooled” trust preferred securities at June 30, 2022 or December 31, 2021.

At June 30, 2022 and December 31, 2021, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.

Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. The Company does not intend to sell these available-for-sale investment securities at an unrealized loss position at June 30, 2022, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at June 30, 2022, management determined that $88,000 was attributable to credit impairment and an allowance for credit losses was recorded. The remaining $16.7 million in unrealized loss was determined to be from factors other than credit.

(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Allowance for credit losses	2022		2021		2022		2021
Beginning balance	$	—	$	101	$	—	$	112
Provision for expected credit losses	88		(20)		88		(31)
Ending balance	$	88	$	81	$	88	$	81

The Company's held-to-maturity securities have no expected credit losses, and no related allowance for credit losses has been established.

Total net gain (loss) on securities reported on the consolidated statements of income and comprehensive income is comprised of the following for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2022		2021		2022		2021
Unrealized holding gains (losses) on equity securities	$	(22)	$	1	$	(49)	$	(11)
Net realized gains on sales of other investments	270		—		270		—
Net gain (loss) on securities	$	248	$	1	$	221	$	(11)

NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table:

(dollars in thousands)	June 30, 2022		December 31, 2021
Commercial, financial and agricultural	$	2,022,845	$	1,875,993
Consumer installment	167,237		191,298
Indirect automobile	172,245		265,779
Mortgage warehouse	949,191		787,837
Municipal	529,268		572,701
Premium finance	942,357		798,409
Real estate – construction and development	1,747,284		1,452,339
Real estate – commercial and farmland	7,156,017		6,834,917
Real estate – residential	3,874,578		3,094,985
	$	17,561,022	$	15,874,258

Accrued interest receivable on loans is reported in other assets on the consolidated balance sheets totaling $53.1 million and $54.8 million at June 30, 2022 and December 31, 2021, respectively. The Company recorded an allowance for credit losses of $0 and $214,000 related to deferred interest on loans modified under its Disaster Relief Program at June 30, 2022 and December 31, 2021, respectively.

Nonaccrual and Past-Due Loans

A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest, or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment, approved by the Company’s Chief Credit Officer. Past-due loans are loans whose principal or interest is past due 30 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

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

(dollars in thousands)	June 30, 2022		December 31, 2021
Commercial, financial and agricultural	$	11,742	$	14,214
Consumer installment	473		476
Indirect automobile	465		947
Real estate – construction and development	178		492
Real estate – commercial and farmland	21,158		15,365
Real estate – residential	88,896		53,772
	$	122,912	$	85,266

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

The following table presents an analysis of nonaccrual loans with no related allowance for credit losses:

(dollars in thousands)	June 30, 2022		December 31, 2021
Commercial, financial and agricultural	$	—	$	164
Real estate – construction and development	—		209
Real estate – commercial and farmland	2,448		2,061
Real estate – residential	5,071		7,942
	$	7,519	$	10,376

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

(dollars in thousands)	Loans<br>30-59<br>Days Past<br>Due		Loans<br>60-89<br>Days<br>Past Due		Loans 90<br>or More<br>Days Past<br>Due		Total<br>Loans<br>Past Due		Current<br>Loans		Total<br>Loans		Loans 90<br>Days or<br>More Past<br>Due and<br>Still<br>Accruing
June 30, 2022
Commercial, financial and agricultural	$	3,822	$	3,725	$	11,063	$	18,610	$	2,004,235	$	2,022,845	$	1,697
Consumer installment	1,132		739		699		2,570		164,667		167,237		466
Indirect automobile	394		137		296		827		171,418		172,245		—
Mortgage warehouse	—		—		—		—		949,191		949,191		—
Municipal	—		—		—		—		529,268		529,268		—
Premium finance	7,462		6,398		5,795		19,655		922,702		942,357		5,795
Real estate – construction and development	18,050		5,677		633		24,360		1,722,924		1,747,284		584
Real estate – commercial and farmland	2,706		11,334		3,666		17,705		7,138,312		7,156,017		—
Real estate – residential	27,385		8,877		86,400		122,662		3,751,916		3,874,578		—
Total	$	60,951	$	36,887	$	108,552	$	206,389	$	17,354,633	$	17,561,022	$	8,542
December 31, 2021
Commercial, financial and agricultural	$	3,431	$	2,005	$	12,017	$	17,453	$	1,858,540	$	1,875,993	$	1,165
Consumer installment	1,786		871		891		3,548		187,750		191,298		584
Indirect automobile	772		185		473		1,430		264,349		265,779		—
Mortgage warehouse	—		—		—		—		787,837		787,837		—
Municipal	—		—		—		—		572,701		572,701		—
Premium finance	6,992		4,340		9,134		20,466		777,943		798,409		9,134
Real estate – construction and development	16,601		1,398		2,190		20,189		1,432,150		1,452,339		1,758
Real estate – commercial and farmland	6,713		1,150		5,924		13,787		6,821,130		6,834,917		7
Real estate – residential	17,729		4,266		49,839		71,834		3,023,151		3,094,985		—
Total	$	54,024	$	14,215	$	80,468	$	148,707	$	15,725,551	$	15,874,258	$	12,648

Collateral-Dependent Loans

Collateral-dependent loans are loans where repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. If the Company determines that foreclosure is probable, these loans are written down to the lower of cost or fair value of the collateral less estimated costs to sell. When repayment is expected to be from the operation of the collateral, the allowance for credit losses is calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the allowance for credit loss as the amount by which the amortized cost basis of the financial asset exceeds the estimated fair value of the collateral.

The following table presents an analysis of individually evaluated collateral-dependent financial assets and related allowance for credit losses:

	June 30, 2022				December 31, 2021
(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses
Commercial, financial and agricultural	$	1,695	$	168	$	2,613	$	723
Premium finance	1,136		91		2,989		30
Real estate – construction and development	—		—		1,432		45
Real estate – commercial and farmland	22,820		2,096		33,332		6,646
Real estate – residential	14,317		1,580		11,712		453
	$	39,968	$	3,935	$	52,078	$	7,897

Credit Quality Indicators

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

Pass (Grades 1 - 5) – These grades represent acceptable credit risk to the Company based on factors including creditworthiness of the borrower, current performance and nature of the collateral.

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

Substandard (Grade 7) – This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

Doubtful (Grade 8) – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

Loss (Grade 9) – This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

The following tables present the loan portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands) as of June 30, 2022 and December 31, 2021. Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the tables below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded 9 at June 30, 2022 or December 31, 2021.

As of June 30, 2022		Term Loans by Origination Year																	Revolving Loans Amortized Cost Basis
	2022			2021			2020			2019			2018			Prior					Total
Commercial, Financial and Agricultural
Risk Grade:
Pass		$	527,870		$	637,107		$	214,934		$	143,779		$	85,058		$	59,648	$	331,032		$	1,999,428
6		—			151			92			274			160			2,881		794			4,352
7		6,618			1,160			445			3,122			1,400			4,151		2,169			19,065
Total commercial, financial and agricultural		$	534,488		$	638,418		$	215,471		$	147,175		$	86,618		$	66,680	$	333,995		$	2,022,845
Consumer Installment
Risk Grade:
Pass		$	25,920		$	18,153		$	46,134		$	28,754		$	21,530		$	16,607	$	8,804		$	165,902
6		—			—			—			—			—			130		5			135
7		24			81			321			169			89			430		86			1,200
Total consumer installment		$	25,944		$	18,234		$	46,455		$	28,923		$	21,619		$	17,167	$	8,895		$	167,237
Indirect Automobile
Risk Grade:
Pass		$	—		$	—		$	—		$	15,350		$	72,999		$	82,645	$	—		$	170,994
6		—			—			—			—			—			20		—			20
7		—			—			—			50			224			957		—			1,231
Total indirect automobile		$	—		$	—		$	—		$	15,400		$	73,223		$	83,622	$	—		$	172,245
Mortgage Warehouse
Risk Grade:
Pass		$	—		$	—		$	—		$	—		$	—		$	—	$	949,191		$	949,191
Total mortgage warehouse		$	—		$	—		$	—		$	—		$	—		$	—	$	949,191		$	949,191
Municipal
Risk Grade:
Pass		$	10,775		$	43,922		$	194,357		$	13,779		$	4,853		$	261,582	$	—		$	529,268
Total municipal		$	10,775		$	43,922		$	194,357		$	13,779		$	4,853		$	261,582	$	—		$	529,268
Premium Finance
Risk Grade:
Pass		$	790,855		$	146,821		$	110		$	—		$	—		$	75	$	—		$	937,861
7		1,766			2,729			1			—			—			—		—			4,496
Total premium finance		$	792,621		$	149,550		$	111		$	—		$	—		$	75	$	—		$	942,357
Real Estate – Construction and Development
Risk Grade:
Pass		$	380,485		$	844,549		$	299,850		$	128,437		$	12,891		$	30,227	$	26,205		$	1,722,644
6		4,330			5,241			432			—			48			580		—			10,631
7		216			218			211			26			13,079			259		—			14,009
Total real estate – construction and development		$	385,031		$	850,008		$	300,493		$	128,463		$	26,018		$	31,066	$	26,205		$	1,747,284
As of June 30, 2022		Term Loans by Origination Year																	Revolving Loans Amortized Cost Basis
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2022			2021			2020			2019			2018			Prior					Total
Real Estate – Commercial and Farmland
Risk Grade:
Pass		$	993,793		$	2,069,024		$	1,150,513		$	891,580		$	496,721		$	1,373,284	$	72,965		$	7,047,880
6		607			—			—			29,343			1,163			18,007		—			49,120
7		—			3,259			2,588			13,777			6,967			32,408		18			59,017
Total real estate – commercial and farmland		$	994,400		$	2,072,283		$	1,153,101		$	934,700		$	504,851		$	1,423,699	$	72,983		$	7,156,017
Real Estate - Residential
Risk Grade:
Pass		$	880,233		$	1,243,230		$	582,823		$	290,790		$	123,347		$	438,034	$	214,894		$	3,773,351
6		64			218			47			608			508			2,680		61			4,186
7		268			9,398			18,956			29,041			14,331			23,395		1,652			97,041
Total real estate - residential		$	880,565		$	1,252,846		$	601,826		$	320,439		$	138,186		$	464,109	$	216,607		$	3,874,578
Total Loans
Risk Grade:
Pass		$	3,609,931		$	5,002,806		$	2,488,721		$	1,512,469		$	817,399		$	2,262,102	$	1,603,091		$	17,296,519
6		5,001			5,610			571			30,225			1,879			24,298		860			68,444
7		8,892			16,845			22,522			46,185			36,090			61,600		3,925			196,059
Total loans		$	3,623,824		$	5,025,261		$	2,511,814		$	1,588,879		$	855,368		$	2,348,000	$	1,607,876		$	17,561,022
As of December 31, 2021		Term Loans by Origination Year																	Revolving Loans Amortized Cost Basis
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2021			2020			2019			2018			2017			Prior					Total
Commercial, Financial and Agricultural
Risk Grade:
Pass		$	903,630		$	279,037		$	188,810		$	118,613		$	50,737		$	40,376	$	262,951		$	1,844,154
6		190			—			393			427			368			1,832		1,961			5,171
7		9,216			1,268			4,098			1,472			2,566			6,019		2,029			26,668
Total commercial, financial and agricultural		$	913,036		$	280,305		$	193,301		$	120,512		$	53,671		$	48,227	$	266,941		$	1,875,993
Consumer Installment
Risk Grade:
Pass		$	35,781		$	59,221		$	37,195		$	27,266		$	9,787		$	11,021	$	9,437		$	189,708
6		—			—			—			—			—			135		5			140
7		59			283			290			216			103			405		94			1,450
Total consumer installment		$	35,840		$	59,504		$	37,485		$	27,482		$	9,890		$	11,561	$	9,536		$	191,298
Indirect Automobile
Risk Grade:
Pass		$	—		$	—		$	20,276		$	101,969		$	90,294		$	51,468	$	—		$	264,007
6		—			—			—			24			10			19		—			53
7		—			—			55			234			384			1,046		—			1,719
Total indirect automobile		$	—		$	—		$	20,331		$	102,227		$	90,688		$	52,533	$	—		$	265,779
As of December 31, 2021		Term Loans by Origination Year																	Revolving Loans Amortized Cost Basis
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	2021			2020			2019			2018			2017			Prior					Total
Mortgage Warehouse
Risk Grade:
Pass		$	—		$	—		$	—		$	—		$	—		$	—	$	787,837		$	787,837
Total mortgage warehouse		$	—		$	—		$	—		$	—		$	—		$	—	$	787,837		$	787,837
Municipal
Risk Grade:
Pass		$	44,727		$	219,385		$	14,831		$	5,494		$	109,040		$	179,224	$	—		$	572,701
Total municipal		$	44,727		$	219,385		$	14,831		$	5,494		$	109,040		$	179,224	$	—		$	572,701
Premium Finance
Risk Grade:
Pass		$	787,884		$	1,059		$	26		$	—		$	302		$	4	$	—		$	789,275
7		9,039			95			—			—			—			—		—			9,134
Total premium finance		$	796,923		$	1,154		$	26		$	—		$	302		$	4	$	—		$	798,409
Real Estate – Construction and Development
Risk Grade:
Pass		$	826,094		$	290,814		$	176,476		$	35,773		$	24,533		$	44,514	$	21,267		$	1,419,471
6		6,527			549			—			15,260			—			2,101		—			24,437
7		1,143			678			7			2,476			57			1,011		3,059			8,431
Total real estate – construction and development		$	833,764		$	292,041		$	176,483		$	53,509		$	24,590		$	47,626	$	24,326		$	1,452,339
Real Estate – Commercial and Farmland
Risk Grade:
Pass		$	2,186,291		$	1,205,578		$	1,119,239		$	542,295		$	486,477		$	1,103,675	$	80,379		$	6,723,934
6		416			—			1,036			14,760			5,334			21,665		—			43,211
7		4,709			2,682			11,109			9,076			4,861			35,315		20			67,772
Total real estate – commercial and farmland		$	2,191,416		$	1,208,260		$	1,131,384		$	566,131		$	496,672		$	1,160,655	$	80,399		$	6,834,917
Real Estate - Residential
Risk Grade:
Pass		$	1,171,008		$	638,232		$	329,247		$	149,990		$	108,538		$	408,240	$	217,982		$	3,023,237
6		145			66			1,106			505			356			3,717		49			5,944
7		2,405			10,167			21,239			11,376			4,597			13,970		2,050			65,804
Total real estate - residential		$	1,173,558		$	648,465		$	351,592		$	161,871		$	113,491		$	425,927	$	220,081		$	3,094,985
Total Loans
Risk Grade:
Pass		$	5,955,415		$	2,693,326		$	1,886,100		$	981,400		$	879,708		$	1,838,522	$	1,379,853		$	15,614,324
6		7,278			615			2,535			30,976			6,068			29,469		2,015			78,956
7		26,571			15,173			36,798			24,850			12,568			57,766		7,252			180,978
Total loans		$	5,989,264		$	2,709,114		$	1,925,433		$	1,037,226		$	898,344		$	1,925,757	$	1,389,120		$	15,874,258

Troubled Debt Restructurings

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession. Concessions may include interest rate reductions to below market

interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses.

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

The Company’s policy states that in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard until such time the borrower has demonstrated the ability to service the loan payments based on the restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered toward the six month required term of satisfactory payment history.

In the normal course of business, the Company modifies loans with a modification of the interest rate or terms that are not deemed to be troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified loans in the first six months of 2022 and 2021 totaling $214.8 million and $220.8 million, respectively, under such parameters.

As of June 30, 2022 and December 31, 2021, the Company had a balance of $41.8 million and $76.6 million, respectively, in troubled debt restructurings. The Company has recorded $698,000 and $654,000 in previous charge-offs on such loans at June 30, 2022 and December 31, 2021, respectively. The Company’s balance in the allowance for credit losses allocated to such troubled debt restructurings was $2.5 million and $10.5 million at June 30, 2022 and December 31, 2021, respectively. At June 30, 2022, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

The following table presents the loans by class modified as troubled debt restructurings which occurred during the three and six months ended June 30, 2022 and 2021. These modifications did not have a material impact on the Company’s allowance for credit losses.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	2	$	502	2	$	165	2	$	502	6	$	591
Consumer installment	—	—		2	8		—	—		2	8
Premium finance	2	756		—	—		6	993		—	—
Real estate – commercial and farmland	2	578		3	8,653		2	578		5	16,312
Real estate – residential	2	462		2	472		5	1,437		12	1,457
Total	8	$	2,298	9	$	9,298	15	$	3,510	25	$	18,368

The following table presents the outstanding balance of troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three and six months ended June 30, 2022 and 2021. These defaults did not have a material impact on the Company's allowance for credit losses.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	—	$	—	—	$	—	1	$	357	3	$	49
Consumer installment	—	—		—	—		2	3		4	5
Indirect automobile	3	2		7	27		12	22		22	112
Real estate – construction and development	—	—		—	—		—	—		1	1
Real estate – commercial and farmland	—	—		1	202		1	8		3	5,382
Real estate – residential	11	1,071		17	940		21	2,791		27	1,646
Total	14	$	1,073	25	$	1,169	37	$	3,181	60	$	7,195

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

June 30, 2022	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	9	$	964	3	$	364
Consumer installment	4	9		10	14
Indirect automobile	196	759		30	122
Premium finance	6	993		—	—
Real estate – construction and development	2	706		—	—
Real estate – commercial and farmland	18	8,213		4	788
Real estate – residential	210	24,456		31	4,369
Total	445	$	36,100	78	$	5,657
December 31, 2021	Accruing Loans			Non-Accruing Loans
---	---	---	---	---	---	---
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	12	$	1,286	6	$	83
Consumer installment	7	16		17	35
Indirect automobile	233	1,037		52	273
Real estate – construction and development	4	789		1	13
Real estate – commercial and farmland	25	35,575		5	5,924
Real estate – residential	213	26,879		39	4,678
Total	494	$	65,582	120	$	11,006

Allowance for Credit Losses on Loans

The allowance for credit losses represents an allowance for expected losses over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company reasonably expects to execute a troubled debt restructuring with a borrower. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.

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

treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of 9 (Loss per the regulatory guidance), the uncollectible portion is charged off.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of loans with similar risk characteristics for which the historical loss experience was observed. The Company utilizes a one year reasonable and supportable forecast period. The Company’s methodologies revert back to historical loss information on a straight-line basis over four quarters after the reasonable and supportable forecast period.

During the six months ended June 30, 2022, the allowance for credit losses increased due to organic loan growth, partially offset by improvement in forecasted macroeconomic factors. The allowance for credit losses was determined at June 30, 2022 using a weighting of four economic forecasts from Moody's. The Moody's Consensus scenario was weighted at 20%, the downside 75th percentile S-2 scenario was weighted at 30%, the downside 90th percentile S-3 scenario was weighted at 20%, and the stagflation scenario was weighted at 30%. The allowance for credit losses was determined at December 31, 2021 using a weighting of five economic forecasts from Moody's. The Moody's baseline scenario was weighted at 10%, the downside 75th percentile S-2 scenario was weighted at 10%, the downside 90th percentile S-3 scenario was weighted at 50%, the slower trend growth scenario was weighted at 20% and the stagflation scenario was weighted at 10%. The current forecast reflects, among other things, improvements in forecast levels of home prices, commercial real estate prices and unemployment compared with the forecast at December 31, 2021.

The following tables detail activity and end of period balances in the allowance for credit losses by portfolio segment for the periods indicated. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three Months Ended June 30, 2022
(dollars in thousands)	Commercial,<br>Financial and<br>Agricultural		Consumer<br>Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2022	$	25,526	$	5,619	$	373	$	3,010	$	384	$	2,515
Provision for loan losses	1,738		557		(306)		875		(13)		200
Loans charged off	(4,391)		(1,137)		(41)		—		—		(1,066)
Recoveries of loans previously charged off	2,785		230		265		—		—		1,113
Balance, June 30, 2022	$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762
	Real Estate – Construction and Development		Real Estate –<br>Commercial and<br>Farmland		Real Estate –<br>Residential		Total
Balance, March 31, 2022	$	26,831	$	67,033	$	29,960	$	161,251
Provision for loan losses	(3,954)		(7,647)		21,777		13,227
Loans charged off	—		(81)		(137)		(6,853)
Recoveries of loans previously charged off	355		44		225		5,017
Balance, June 30, 2022	$	23,232	$	59,349	$	51,825	$	172,642
Six Months Ended June 30, 2022
(dollars in thousands)	Commercial,<br>Financial and<br>Agricultural		Consumer<br>Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2021	$	26,829	$	6,097	$	476	$	3,231	$	401	$	2,729
Provision for loan losses	1,953		1,346		(596)		654		(30)		108
Loans charged off	(8,805)		(2,562)		(129)		—		—		(2,435)
Recoveries of loans previously charged off	5,681		388		540		—		—		2,360
Balance, June 30, 2022	$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762
	Real Estate – Construction and Development		Real Estate –<br>Commercial and<br>Farmland		Real Estate –<br>Residential		Total
Balance, December 31, 2021	$	22,045	$	77,831	$	27,943	$	167,582
Provision for loan losses	614		(17,199)		23,643		10,493
Loans charged off	—		(1,364)		(137)		(15,432)
Recoveries of loans previously charged off	573		81		376		9,999
Balance, June 30, 2022	$	23,232	$	59,349	$	51,825	$	172,642
Three Months Ended June 30, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---
(dollars in thousands)	Commercial,<br>Financial and<br>Agricultural		Consumer<br>Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2021	$	8,291	$	8,790	$	1,272	$	3,521	$	790	$	4,100
Provision for loan losses	1,502		491		(423)		(156)		(13)		(833)
Loans charged off	(3,529)		(1,669)		(141)		—		—		(1,194)
Recoveries of loans previously charged off	625		212		372		—		—		2,466
Balance, June 30, 2021	$	6,889	$	7,824	$	1,080	$	3,365	$	777	$	4,539
	Real Estate – Construction and Development		Real Estate –<br>Commercial and<br>Farmland		Real Estate –<br>Residential		Total
Balance, March 31, 2021	$	22,858	$	91,211	$	37,737	$	178,570
Provision for loan losses	(3,757)		(3,031)		5,321		(899)
Loans charged off	(186)		(27)		(392)		(7,138)
Recoveries of loans previously charged off	84		185		593		4,537
Balance, June 30, 2021	$	18,999	$	88,338	$	43,259	$	175,070
Six Months Ended June 30, 2021
(dollars in thousands)	Commercial,<br>Financial and<br>Agricultural		Consumer<br>Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2020	$	7,359	$	4,076	$	1,929	$	3,666	$	791	$	3,879
Provision for loan losses	4,077		6,297		(951)		(301)		(14)		(391)
Loans charged off	(5,899)		(3,117)		(970)		—		—		(2,537)
Recoveries of loans previously charged off	1,352		568		1,072		—		—		3,588
Balance, June 30, 2021	$	6,889	$	7,824	$	1,080	$	3,365	$	777	$	4,539
	Real Estate – Construction and Development		Real Estate –<br>Commercial and<br>Farmland		Real Estate –<br>Residential		Total
Balance, December 31, 2020	$	45,304	$	88,894	$	43,524	$	199,422
Provision for loan losses	(26,344)		640		(491)		(17,478)
Loans charged off	(212)		(1,422)		(555)		(14,712)
Recoveries of loans previously charged off	251		226		781		7,838
Balance, June 30, 2021	$	18,999	$	88,338	$	43,259	$	175,070

NOTE 4 – 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 June 30, 2022 and December 31, 2021, all securities sold under agreements to repurchase mature on a daily basis. The market value of the securities fluctuates on a daily basis due to market conditions. The Company monitors the market value of the securities underlying these agreements on a daily basis and is required to transfer additional securities if the market value falls below the repurchase agreement price. The Company maintains an unpledged securities portfolio that it believes is sufficient to protect against a decline in the market value of the securities sold under agreements to repurchase.

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

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

At June 30, 2022 and December 31, 2021 the investment securities underlying these agreements included state, county and municipal securities and mortgage-backed securities.

NOTE 5 – OTHER BORROWINGS

Other borrowings consist of the following:

(dollars in thousands)	June 30, 2022		December 31, 2021
FHLB borrowings:
Fixed Rate Advance due March 3, 2025; fixed interest rate of 1.208%	$	15,000	$	15,000
Fixed Rate Advance due March 2, 2027; fixed interest rate of 1.445%	15,000		15,000
Fixed Rate Advance due March 4, 2030; fixed interest rate of 1.606%	15,000		15,000
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	1,394		1,400
Fixed Rate Advance due December 9, 2030; fixed interest rate of 4.55%	965		969
Principal Reducing Advance due September 29, 2031; fixed interest rate of 3.095%	1,348		1,421
Subordinated notes payable:
Subordinated notes payable due June 1, 2026, net of unaccreted purchase accounting fair value adjustment of $— and $500, respectively; fixed interest rate of 5.50%	—		50,500
Subordinated notes payable due March 15, 2027 net of unamortized debt issuance cost of $616 and $681, respectively; fixed interest rate of 5.75% through March 14, 2022; variable interest rate thereafter at three-month LIBOR plus 3.616%	74,384		74,319
Subordinated notes payable due December 15, 2029 net of unamortized debt issuance cost of $1,801 and $1,923, respectively; fixed interest rate of 4.25% through December 14, 2024; variable interest rate thereafter at three-month SOFR plus 2.94%	118,199		118,077
Subordinated notes payable due May 31, 2030 net of unaccreted purchase accounting fair value adjustment of $967 and $1,028, respectively; fixed interest rate of 5.875% through May 31, 2025; variable interest rate thereafter at three-month LIBOR plus 3.63%	75,967		76,028
Subordinated notes payable due October 1, 2030 net of unamortized debt issuance cost of $1,665 and $1,766, respectively; fixed interest rate of 3.875% through September 30, 2025; variable interest rate thereafter at three-month SOFR plus 3.753%	108,335		108,234
Securitization Facilities:
Equipment contract backed notes, Series 2018-1 (BCC XIV) due on various dates through 2025 and bear a weighted-average interest rate of 5.11%	—		19,199
Equipment contract backed notes, Series 2019-1 (BCC XVI) due on various dates through 2027 and bear a weighted-average interest rate of 2.84%	—		139,329
Equipment contract backed notes, Series 2020-1 (BCC XVII) due on various dates through 2027 and bear a weighted-average interest rate of 1.48%	—		105,403
	$	425,592	$	739,879

The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in addition to FHLB stock. At June 30, 2022, $4.19 billion was available for borrowing on lines with the FHLB.

As of June 30, 2022, the Bank maintained credit arrangements with various financial institutions to purchase federal funds up to $127.0 million.

The Bank also participates in the Federal Reserve discount window borrowings program. At June 30, 2022, the Bank had $2.91 billion of loans pledged at the Federal Reserve discount window and had $2.21 billion available for borrowing.

NOTE 6 – ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income for the Company consists of changes in net unrealized gains and losses on investment securities available-for-sale. The reclassification for gains included in net income is recorded in net gain (loss) on securities in the consolidated statement of income and comprehensive income.

The following table presents a summary of the accumulated other comprehensive income balances as well as changes in each of the respective components, net of tax, for the periods indicated:

(dollars in thousands)	Unrealized<br>Gain (Loss)<br>on Securities		Accumulated<br>Other Comprehensive<br><br>Income (Loss)
Three Months Ended June 30, 2022
Balance, March 31, 2022	$	(1,841)	$	(1,841)
Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	(10,794)		(10,794)
Balance, June 30, 2022	$	(12,635)	$	(12,635)
Three Months Ended June 30, 2021
Balance, March 31, 2021	$	26,090	$	26,090
Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	(1,066)		(1,066)
Balance, June 30, 2021	$	25,024	$	25,024
Six Months Ended June 30, 2022
Balance, December 31, 2021	$	15,590	$	15,590
Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	(28,225)		(28,225)
Balance, June 30, 2022	$	(12,635)	$	(12,635)
Six Months Ended June 30, 2021
Balance, December 31, 2020	$	33,505	$	33,505
Reclassification for gains included in net income, net of tax	—		—
Current year changes, net of tax	(8,481)		(8,481)
Balance, June 30, 2021	$	25,024	$	25,024

NOTE 7 – WEIGHTED AVERAGE SHARES OUTSTANDING

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

	Three Months Ended<br>June 30,		Six Months Ended<br>June 30,
(share data in thousands)	2022	2021	2022	2021
Average common shares outstanding	69,136	69,497	69,246	69,448
Common share equivalents:
Stock options	16	64	24	74
Nonvested restricted share grants	46	151	97	153
Performance stock units	118	80	118	90
Average common shares outstanding, assuming dilution	69,316	69,792	69,485	69,765

For the three months ended June 30, 2022, there were 33,536 anti-dilutive performance stock units excluded from the computation of earnings per share. There were no anti-dilutive securities excluded from the computation of earnings per share for the six months ended June 30, 2022 or for the three- and six-months ended June 30, 2021.

NOTE 8 – FAIR VALUE MEASURES

The fair value of an asset or liability is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair value is based on discounted cash flows or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not

be realized in an immediate settlement of the asset or liability. The accounting standard for disclosures about the fair value measures excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The Company's loans held for sale under the fair value option are comprised of the following:

(dollars in thousands)	June 30, 2022		December 31, 2021
Mortgage loans held for sale	$	555,039	$	1,247,997
SBA loans held for sale	626		6,635
Total loans held for sale	$	555,665	$	1,254,632

The Company has elected to record mortgage loans held for sale at fair value in order to eliminate the complexities and inherent difficulties of achieving hedge accounting and to better align reported results with the underlying economic changes in value of the loans and related hedge instruments. This election impacts the timing and recognition of origination fees and costs, as well as servicing value, which are now recognized in earnings at the time of origination. Interest income on mortgage loans held for sale is recorded on an accrual basis in the consolidated statements of income and comprehensive income under the heading interest income – interest and fees on loans. The servicing value is included in the fair value of the interest rate lock commitments (“IRLCs”) with borrowers. The mark to market adjustments related to mortgage loans held for sale and the associated economic hedges are captured in mortgage banking activities.

A net gain of $11.2 million and a net loss of $32.7 million resulting from changes in fair value of these mortgage loans was recorded in income during the three and six months ended June 30, 2022, respectively. For the three and six months ended June 30, 2021, a net gain of $10.0 million and a net loss of $15.1 million, respectively, resulting from changes in fair value of these mortgage loans was recorded in income. A net losses of $27.1 million and $1.2 million, respectively, resulting from changes in the fair value of the related derivative financial instruments used to hedge exposure to the market-related risks associated with these mortgage loans was recorded in income during the three and six months ended June 30, 2022, respectively. For the three and six months ended June 30, 2021, net losses of $45.1 million and $17.6 million, respectively, resulting from changes in the fair value of the related derivative financial instruments was recorded in income. The changes in fair value of both mortgage loans held for sale and the related derivative financial instruments are recorded in mortgage banking activity in the consolidated statements of income and comprehensive income. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal.

The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of June 30, 2022 and December 31, 2021:

(dollars in thousands)	June 30, 2022		December 31, 2021
Aggregate fair value of mortgage loans held for sale	$	555,039	$	1,247,997
Aggregate unpaid principal balance of mortgage loans held for sale	551,420		1,211,646
Past-due loans of 90 days or more	694		746
Nonaccrual loans	694		746
Unpaid principal balance of nonaccrual loans	712		718

The following table summarizes the difference between the fair value and the principal balance for SBA loans held for sale measured at fair value as of June 30, 2022 and December 31, 2021:

(dollars in thousands)	June 30, 2022		December 31, 2021
Aggregate fair value of SBA loans held for sale	$	626	$	6,635
Aggregate unpaid principal balance of SBA loans held for sale	565		5,825
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, loans held for sale under the fair value option and derivative financial instruments are recorded at fair value on a recurring basis. From time to time, the Company may be required to record at fair

value other assets on a nonrecurring basis, such as collateral-dependent loans, loan servicing rights and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of June 30, 2022 and December 31, 2021:

	Recurring Basis<br>Fair Value Measurements
	June 30, 2022
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
Investment securities available-for-sale:
U.S. Treasuries	$	312,889	$	312,889	$	—	$	—
U.S. government sponsored agencies	2,021		—		2,021		—
State, county and municipal securities	40,963		—		40,963		—
Corporate debt securities	15,463		—		14,143		1,320
SBA pool securities	34,431		—		34,431		—
Mortgage-backed securities	646,501		—		646,501		—
Loans held for sale	555,665		—		555,665		—
Mortgage banking derivative instruments	10,079		—		10,079		—
Total recurring assets at fair value	$	1,618,012	$	312,889	$	1,303,803	$	1,320
	Recurring Basis<br>Fair Value Measurements
---	---	---	---	---	---	---	---	---
	December 31, 2021
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
Investment securities available-for-sale:
U.S. government sponsored agencies	$	7,172	$	—	$	7,172	$	—
State, county and municipal securities	47,812		—		47,812		—
Corporate debt securities	28,496		—		27,116		1,380
SBA pool securities	45,201		—		45,201		—
Mortgage-backed securities	463,940		—		463,940		—
Loans held for sale	1,254,632		—		1,254,632		—
Mortgage banking derivative instruments	11,940		—		11,940		—
Total recurring assets at fair value	$	1,859,193	$	—	$	1,857,813	$	1,380
Financial liabilities:
Mortgage banking derivative instruments	$	710	$	—	$	710	$	—
Total recurring liabilities at fair value	$	710	$	—	$	710	$	—

The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of June 30, 2022 and December 31, 2021:

	Nonrecurring Basis<br>Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
June 30, 2022
Collateral-dependent loans	$	36,033	$	—	$	—	$	36,033
Other real estate owned	702		—		—		702
Mortgage servicing rights	257,112		—		—		257,112
Total nonrecurring assets at fair value	$	293,847	$	—	$	—	$	293,847
December 31, 2021
Collateral-dependent loans	$	44,181	$	—	$	—	$	44,181
Mortgage servicing rights	206,944		—		—		206,944
Total nonrecurring assets at fair value	$	251,125	$	—	$	—	$	251,125

The inputs used to determine estimated fair value of collateral-dependent loans include market conditions, loan term, underlying collateral characteristics and discount rates. The inputs used to determine fair value of OREO include market conditions, estimated marketing period or holding period, underlying collateral characteristics and discount rates.

For the six months ended June 30, 2022 and the year ended December 31, 2021, there was not a change in the methods and significant assumptions used to estimate fair value.

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

(dollars in thousands)			Fair Value		Valuation<br>Technique		Unobservable Inputs		Range of<br>Discounts	Weighted<br>Average<br>Discount
June 30, 2022
Recurring:
Debt securities available-for-sale			$	1,320	Discounted par values		Probability of Default		13%	13%
	Loss Given Default					44%		44%
Nonrecurring:
Collateral-dependent loans			$	36,033	Third-party appraisals and discounted cash flows		Collateral discounts and <br>discount rates		0% - 40%	31%
Other real estate owned			$	702	Third-party appraisals and sales contracts		Collateral discounts and estimated <br>costs to sell		15% - 55%	37%
Mortgage servicing rights			$	257,112	Discounted cash flows		Discount rate		10% - 11%	10%
	Prepayment speed	4% - 22%				8%
December 31, 2021
Recurring:
Debt securities available-for-sale			$	1,380	Discounted par values		Discount Rate		8%	8%
Nonrecurring:
Collateral-dependent loans			$	44,181	Third-party appraisals and discounted cash flows		Collateral discounts and <br>discount rates		0% - 50%	39%
Mortgage servicing rights			$	206,944	Discounted cash flows		Discount rate		9% - 10%	9%
	Prepayment speed	10% - 40%				13%

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
			June 30, 2022
(dollars in thousands)	Carrying<br>Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	345,627	$	345,627	$	—	$	—	$	345,627
Federal funds sold and interest-bearing accounts	1,961,209		1,961,209		—		—		1,961,209
Debt securities held-to-maturity	111,654		—		97,144		—		97,144
Loans, net	17,352,347		—		—		17,056,635		17,056,635
Accrued interest receivable	56,995		—		3,867		53,128		56,995
Financial liabilities:
Deposits	19,684,982		—		19,682,653		—		19,682,653
Securities sold under agreements to repurchase	953		953		—		—		953
Other borrowings	425,592		—		418,722		—		418,722
Subordinated deferrable interest debentures	127,325		—		117,240		—		117,240
Accrued interest payable	2,875		—		2,875		—		2,875
			Fair Value Measurements
---	---	---	---	---	---	---	---	---	---	---
			December 31, 2021
(dollars in thousands)	Carrying<br>Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	307,813	$	307,813	$	—	$	—	$	307,813
Federal funds sold and interest-bearing accounts	3,756,844		3,756,844		—		—		3,756,844
Debt securities held-to-maturity	79,850		—		78,206		—		78,206
Loans, net	15,662,495		—		—		15,509,410		15,509,410
Accrued interest receivable	56,917		—		2,373		54,544		56,917
Financial liabilities:
Deposits	19,665,553		—		19,667,612		—		19,667,612
Securities sold under agreements to repurchase	5,845		5,845		—		—		5,845
Other borrowings	739,879		—		760,829		—		760,829
Subordinated deferrable interest debentures	126,328		—		117,764		—		117,764
Accrued interest payable	4,313		—		4,313		—		4,313

NOTE 9 – 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)	June 30, 2022		December 31, 2021
Commitments to extend credit	$	5,420,227	$	4,328,749
Unused home equity lines of credit	303,428		272,029
Financial standby letters of credit	30,272		36,184
Mortgage interest rate lock commitments	320,320		417,126

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. These commitments, predominantly at variable interest rates, generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being

drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral is required in instances which the Company deems necessary. The Company has not been required to perform on any material financial standby letters of credit and the Company has not incurred any losses on financial standby letters of credit for the six months ended June 30, 2022 and the year ended December 31, 2021.

The Company maintains an allowance for credit losses on unfunded commitments which is recorded in other liabilities on the consolidated balance sheets. The following table presents activity in the allowance for unfunded commitments for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2022		2021		2022		2021
Balance at beginning of period	$	42,194	$	21,015	$	33,185	$	32,854
Provision for unfunded commitments	1,779		1,299		10,788		(10,540)
Balance at end of period	$	43,973	$	22,314	$	43,973	$	22,314

Other Commitments

As of June 30, 2022, letters of credit issued by the FHLB totaling $400.0 million were used to guarantee the Bank’s performance related to a portion of its public fund deposit balances.

Litigation and Regulatory Contingencies

From time to time, the Company and the Bank are subject to various legal proceedings, claims and disputes that arise in the ordinary course of business. The Company and the Bank are also subject to regulatory examinations, information gathering requests, inquiries and investigations in the ordinary course of business. Based on the Company’s current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal matters will have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. However, it is possible that the ultimate resolution of these legal matters could have a material adverse effect on the Company’s results of operations and financial condition for any particular period.

The Company’s management and its legal counsel periodically assess contingent liabilities, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

COVID-19

The COVID-19 pandemic has caused significant and unprecedented economic dislocation in the United States. As a result of the pandemic, many commercial customers experienced varying levels of disruptions or restrictions on their business activities, and many consumers experienced interrupted income or unemployment. We have outstanding loans to borrowers in certain industries that have been particularly susceptible to the effects of the pandemic, such as hotels, restaurants and other retail businesses. Given the ongoing and dynamic nature of the circumstances, it remains difficult to predict the full impact of the COVID-19 pandemic on our business. The United States government has taken steps to attempt to mitigate some of the more severe anticipated economic effects of the pandemic, including the passage of the CARES Act and subsequent legislation, but

there can be no assurance that such steps will be sufficiently effective or achieve their desired results on a long-term basis. The extent of such impact from the COVID-19 pandemic and related mitigation efforts will depend on future developments, which remain uncertain, including, but not limited to, the potential for a resurgence or additional waves or variants of the coronavirus, actions to contain or treat the virus and how quickly normal economic and operating conditions resume in a sustainable manner. This could cause a material, adverse effect on the Company’s business, financial condition and results of operations, including increases in loan delinquencies, problem assets and foreclosures; decreases in the value of collateral securing our loans; increases in our allowance for credit losses; and decreases in the value of our intangible assets.

NOTE 10 – 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 and six months ended June 30, 2022 and 2021:

	Three Months Ended<br>June 30, 2022
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br> Finance<br> Division		Total
Interest income	$	141,844	$	38,055	$	8,476	$	4,757	$	9,436	$	202,568
Interest expense	(10,278)		17,276		1,776		959		1,471		11,204
Net interest income	152,122		20,779		6,700		3,798		7,965		191,364
Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924
Noninterest income	23,469		57,795		1,041		1,526		10		83,841
Noninterest expense
Salaries and employee benefits	46,733		31,219		208		1,316		2,069		81,545
Occupancy and equipment	11,168		1,406		1		81		90		12,746
Data processing and communications expenses	10,863		1,123		48		29		92		12,155
Other expenses	21,123		12,812		212		539		1,064		35,750
Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196
Income before income tax expense	75,529		27,515		6,405		3,882		4,754		118,085
Income tax expense	19,120		5,779		1,346		815		959		28,019
Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066
Total assets	$	17,009,855	$	4,418,211	$	923,829	$	264,227	$	1,071,348	$	23,687,470
Goodwill	958,558		—		—		—		64,498		1,023,056
Other intangible assets, net	105,198		—		—		—		10,415		115,613
	Three Months Ended<br>June 30, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br> Finance<br> Division		Total
Interest income	$	109,260	$	34,085	$	8,988	$	14,050	$	7,368	$	173,751
Interest expense	(1,410)		11,552		268		1,168		321		11,899
Net interest income	110,670		22,533		8,720		12,882		7,047		161,852
Provision for credit losses	(3,949)		5,647		(155)		(607)		(794)		142
Noninterest income	16,171		69,055		1,333		2,677		4		89,240
Noninterest expense
Salaries and employee benefits	37,814		44,798		278		937		1,678		85,505
Occupancy and equipment	9,050		1,553		1		132		76		10,812
Data processing and communications expenses	10,280		1,435		68		—		94		11,877
Other expenses	18,763		7,638		30		284		852		27,567
Total noninterest expense	75,907		55,424		377		1,353		2,700		135,761
Income before income tax expense	54,883		30,517		9,831		14,813		5,145		115,189
Income tax expense	14,196		6,408		2,064		3,111		1,083		26,862
Net income	$	40,687	$	24,109	$	7,767	$	11,702	$	4,062	$	88,327
Total assets	$	15,561,628	$	3,917,275	$	779,234	$	748,234	$	880,560	$	21,886,931
Goodwill	863,507		—		—		—		64,498		928,005
Other intangible assets, net	50,418		—		—		—		13,365		63,783				Six Months Ended<br>June 30, 2022
---	---	---	---	---	---	---	---	---	---	---	---	---
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br> Finance<br> Division		Total
Interest income	$	271,134	$	70,887	$	15,289	$	11,537	$	17,095	$	385,942
Interest expense	(14,733)		30,813		2,142		1,728		2,084		22,034
Net interest income	285,867		40,074		13,147		9,809		15,011		363,908
Provision for credit losses	15,401		6,086		645		(666)		(311)		21,155
Noninterest income	44,833		119,444		2,442		4,017		16		170,752
Noninterest expense
Salaries and employee benefits	95,928		62,833		491		2,587		3,987		165,826
Occupancy and equipment	22,242		2,877		2		180		172		25,473
Data processing and communications expenses	22,093		2,295		95		57		187		24,727
Other expenses	41,168		25,457		430		919		2,016		69,990
Total noninterest expense	181,431		93,462		1,018		3,743		6,362		286,016
Income before income tax expense	133,868		59,970		13,926		10,749		8,976		227,489
Income tax expense	36,116		12,594		2,925		2,257		1,833		55,725
Net income	$	97,752	$	47,376	$	11,001	$	8,492	$	7,143	$	171,764
	Six Months Ended<br>June 30, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br> Finance<br> Division		Total
Interest income	$	221,639	$	64,284	$	19,315	$	32,084	$	14,379	$	351,701
Interest expense	(1,847)		22,767		689		2,567		696		24,872
Net interest income	223,486		41,517		18,626		29,517		13,683		326,829
Provision for credit losses	(27,853)		1,094		(300)		(1,154)		(236)		(28,449)
Noninterest income	32,909		166,695		2,313		5,288		8		207,213
Noninterest expense
Salaries and employee benefits	80,537		94,636		608		2,319		3,390		181,490
Occupancy and equipment	19,170		3,029		2		238		154		22,593
Data processing and communications expenses	20,481		2,981		117		1		181		23,761
Other expenses	38,473		15,827		63		579		1,773		56,715
Total noninterest expense	158,661		116,473		790		3,137		5,498		284,559
Income before income tax expense	125,587		90,645		20,449		32,822		8,429		277,932
Income tax expense	32,652		19,035		4,294		6,893		1,769		64,643
Net income	$	92,935	$	71,610	$	16,155	$	25,929	$	6,660	$	213,289

NOTE 11 – LOAN SERVICING RIGHTS

The Company sells certain residential mortgage loans and SBA loans to third parties. All such transfers are accounted for as sales and the continuing involvement in the loans sold is limited to certain servicing responsibilities. The Company has also acquired portfolios of residential mortgage, SBA and indirect automobile loans serviced for others. Loan servicing rights are initially recorded at fair value and subsequently recorded at the lower of cost or fair value and are amortized over the remaining service life of the loans, with consideration given to prepayment assumptions. Loan servicing rights are recorded in other assets on the consolidated balance sheets.

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

(dollars in thousands)	June 30, 2022		December 31, 2021
Loan Servicing Rights
Residential mortgage	$	257,112	$	206,944
SBA	4,954		5,556
Total loan servicing rights	$	262,066	$	212,500

Residential Mortgage Loans

The Company sells certain first-lien residential mortgage loans to third party investors, primarily the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). The Company retains the related mortgage servicing rights (“MSRs”) and receives servicing fees on certain of these loans. The net gain on loan sales, MSRs amortization and recoveries/impairment, and ongoing servicing fees on the portfolio of loans serviced for others are recorded in the consolidated statements of income and comprehensive income as part of mortgage banking activity.

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

The table below is an analysis of the activity in the Company’s MSRs and valuation allowance:

(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
Residential mortgage servicing rights	2022		2021		2022		2021
Beginning carrying value, net	$	232,236	$	154,746	$	206,944	$	130,630
Additions	21,551		43,377		43,252		65,244
Amortization	(7,514)		(7,197)		(13,576)		(14,681)
Recoveries	10,839		749		20,492		10,482
Ending carrying value, net	$	257,112	$	191,675	$	257,112	$	191,675
(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
---	---	---	---	---	---	---	---	---
Residential mortgage servicing valuation allowance	2022		2021		2022		2021
Beginning balance	$	16,129	$	29,674	$	25,782	$	39,407
Recoveries	(10,839)		(749)		(20,492)		(10,482)
Ending balance	$	5,290	$	28,925	$	5,290	$	28,925

The key metrics and the sensitivity of the fair value to adverse changes in model inputs and/or assumptions are summarized below:

(dollars in thousands)	June 30, 2022			December 31, 2021
Residential mortgage servicing rights
Unpaid principal balance of loans serviced for others	$	18,304,805		$	16,786,442
Composition of residential loans serviced for others:
FHLMC	21.78		%	21.88		%
FNMA	60.49		%	60.26		%
GNMA	17.73		%	17.86		%
Total	100.00		%	100.00		%
Weighted average term (months)	342			341
Weighted average age (months)	22			20
Modeled prepayment speed	8.11		%	12.96		%
Decline in fair value due to a 10% adverse change	(9,451)			(8,368)
Decline in fair value due to a 20% adverse change	(17,679)			(16,157)
Weighted average discount rate	9.77		%	8.77		%
Decline in fair value due to a 10% adverse change	(11,577)			(6,984)
Decline in fair value due to a 20% adverse change	(21,616)			(13,504)

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

SBA Loans

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

During the three- and six-months ended June 30, 2022, the Company recorded servicing fee income of $1.0 million and $1.9 million, respectively. During the three- and six-months ended June 30, 2021, the Company recorded servicing fee income of $1.0 million and $2.0 million, respectively. Servicing fee income includes servicing fees, late fees and ancillary fees earned for each period.

The table below is an analysis of the activity in the Company’s SBA loan servicing rights and valuation allowance:

(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
SBA servicing rights	2022		2021		2022		2021
Beginning carrying value, net	$	5,384	$	6,445	$	5,556	$	5,839
Additions	236		241		774		471
Amortization	(666)		(563)		(1,376)		(1,092)
Recoveries	—		—		—		905
Ending carrying value, net	$	4,954	$	6,123	$	4,954	$	6,123
(dollars in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
---	---	---	---	---	---	---	---	---
SBA servicing valuation allowance	2022		2021		2022		2021
Beginning balance	$	—	$	—	$	—	$	905
Recoveries	—		—		—		(905)
Ending balance	$	—	$	—	$	—	$	—
(dollars in thousands)	June 30, 2022			December 31, 2021
---	---	---	---	---	---	---
SBA servicing rights
Unpaid principal balance of loans serviced for others	$	387,101		$	410,167
Weighted average life (in years)	3.64			3.65
Modeled prepayment speed	17.81		%	17.68		%
Decline in fair value due to a 10% adverse change	(218)			(291)
Decline in fair value due to a 20% adverse change	(419)			(557)
Weighted average discount rate	16.55		%	11.92		%
Decline in fair value due to a 100 basis point adverse change	(108)			(144)
Decline in fair value due to a 200 basis point adverse change	(212)			(282)

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

Indirect Automobile Loans

The Company previously acquired a portfolio of indirect automobile loans serviced for others. These loans, or portions of loans, were sold on a servicing retained basis. Amortization and impairment/recoveries of servicing rights, and ongoing servicing fees are recorded in the consolidated statements of income and comprehensive income as part of other noninterest income. The Company is not actively originating or selling indirect automobile loans.

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

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

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

Cautionary Note Regarding Forward-Looking Statements

Certain of the statements made in this report are “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control and which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation, the following: general competitive, economic, unemployment, political and market conditions and fluctuations, including real estate market conditions, and the effects of such conditions and fluctuations on the creditworthiness of borrowers, collateral values, asset recovery values and the value of investment securities; movements in interest rates and their impacts on net interest margin; expectations on credit quality and performance; competitive pressures on product pricing and services; legislative and regulatory changes; changes in U.S. government monetary and fiscal policy; the impact of the COVID-19 pandemic on the general economy, our customers and the allowance for loan losses; the benefits that may be realized by our customers from government assistance programs and regulatory actions related to the COVID-19 pandemic; the potential impact of the phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; additional competition in our markets; changes in state and federal banking laws and regulations to which we are subject; financial market conditions and the results of financing efforts; the cost savings and any revenue synergies expected to result from acquisition transactions, which may not be fully realized within the expected timeframes if at all; the success and timing of other business strategies; our outlook and long-term goals for future growth; weather events, natural disasters, geopolitical events, acts of war or terrorism or other hostilities, public health crises and other catastrophic events beyond our control; and other factors discussed in our filings with the Securities and Exchange Commission (the “SEC”) under the Exchange Act.

All written or oral forward-looking statements that are made by or are attributable to us are expressly qualified in their entirety by this cautionary notice. Our forward-looking statements apply only as of the date of this report or the respective date of the document from which they are incorporated herein by reference. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date of this report, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events or otherwise.

Overview

The following is management’s discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of June 30, 2022, as compared with December 31, 2021, and operating results for the three- and six-month periods ended June 30, 2022 and 2021. These comments should be read in conjunction with the Company’s unaudited consolidated financial statements and accompanying notes appearing elsewhere herein.

This discussion contains certain performance measures determined by methods other than in accordance with GAAP. Management of the Company uses these non-GAAP measures in its analysis of the Company’s performance. These measures are useful when evaluating the underlying performance and efficiency of the Company’s operations and balance sheet. The Company’s management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant gains and charges in the current period. The Company’s management believes that investors may use these non-GAAP financial measures to evaluate the Company’s financial performance without the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Non-GAAP measures include adjusted net income and adjusted net income per diluted share. The Company calculates the regulatory capital ratios using current regulatory report instructions. The Company’s management uses these measures to assess the quality of capital and believes that investors may find them useful in their evaluation of the Company. These capital measures may or may not be necessarily comparable to similar capital measures that may be presented by other companies.

Critical Accounting Policies

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

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

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of $90.1 million, or $1.30 per diluted share, for the quarter ended June 30, 2022, compared with $88.3 million, or $1.27 per diluted share, for the same period in 2021. The Company’s return on average assets and average shareholders’ equity were 1.54% and 11.87%, respectively, in the second quarter of 2022, compared with 1.64% and 12.66%, respectively, in the second quarter of 2021. During the second quarter of 2022, the Company recorded pre-tax servicing right impairment recovery of $10.8 million and pre-tax gains on bank premises of $39,000. During the second quarter of 2021, the Company recorded pre-tax servicing right impairment recovery of $749,000 and pre-tax gains on bank premises of $236,000. Excluding these adjustment items, the Company’s net income would have been $81.5 million, or $1.18 per diluted share, for the second quarter of 2022 and $87.5 million, or $1.25 per diluted share, for the second quarter of 2021.

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

	Three Months Ended June 30,
(in thousands, except share and per share data)	2022		2021
Net income	$	90,066	$	88,327
Adjustment items:
Servicing right recovery	(10,838)		(749)
Gain on bank premises	(39)		(236)
Tax effect of adjustment items (Note 1)	2,284		206
After tax adjustment items	(8,593)		(779)
Adjusted net income	$	81,473	$	87,548
Weighted average common shares outstanding - diluted	69,316,258		69,791,670
Net income per diluted share	$	1.30	$	1.27
Adjusted net income per diluted share	$	1.18	$	1.25
Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments.

Below is additional information regarding the retail banking activities, mortgage banking activities, warehouse lending activities, SBA activities and premium finance activities of the Company during the second quarter of 2022 and 2021, respectively:

	Three Months Ended<br>June 30, 2022
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br> Finance<br> Division		Total
Interest income	$	141,844	$	38,055	$	8,476	$	4,757	$	9,436	$	202,568
Interest expense	(10,278)		17,276		1,776		959		1,471		11,204
Net interest income	152,122		20,779		6,700		3,798		7,965		191,364
Provision for credit losses	10,175		4,499		867		(523)		(94)		14,924
Noninterest income	23,469		57,795		1,041		1,526		10		83,841
Noninterest expense
Salaries and employee benefits	46,733		31,219		208		1,316		2,069		81,545
Occupancy and equipment	11,168		1,406		1		81		90		12,746
Data processing and communications expenses	10,863		1,123		48		29		92		12,155
Other expenses	21,123		12,812		212		539		1,064		35,750
Total noninterest expense	89,887		46,560		469		1,965		3,315		142,196
Income before income tax expense	75,529		27,515		6,405		3,882		4,754		118,085
Income tax expense	19,120		5,779		1,346		815		959		28,019
Net income	$	56,409	$	21,736	$	5,059	$	3,067	$	3,795	$	90,066
	Three Months Ended<br>June 30, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br>Finance<br>Division		Total
Interest income	$	109,260	$	34,085	$	8,988	$	14,050	$	7,368	$	173,751
Interest expense	(1,410)		11,552		268		1,168		321		11,899
Net interest income	110,670		22,533		8,720		12,882		7,047		161,852
Provision for credit losses	(3,949)		5,647		(155)		(607)		(794)		142
Noninterest income	16,171		69,055		1,333		2,677		4		89,240
Noninterest expense
Salaries and employee benefits	37,814		44,798		278		937		1,678		85,505
Occupancy and equipment	9,050		1,553		1		132		76		10,812
Data processing and communications expenses	10,280		1,435		68		—		94		11,877
Other expenses	18,763		7,638		30		284		852		27,567
Total noninterest expense	75,907		55,424		377		1,353		2,700		135,761
Income before income tax expense	54,883		30,517		9,831		14,813		5,145		115,189
Income tax expense	14,196		6,408		2,064		3,111		1,083		26,862
Net income	$	40,687	$	24,109	$	7,767	$	11,702	$	4,062	$	88,327

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average interest rate for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the three months ended June 30, 2022 and 2021. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.

	Quarter Ended June 30,
	2022					2021
(dollars in thousands)	Average<br>Balance		Interest<br>Income/<br>Expense		Average<br>Yield/<br>Rate Paid	Average<br>Balance		Interest<br>Income/<br>Expense		Average<br>Yield/<br>Rate Paid
Assets
Interest-earning assets:
Federal funds sold, interest-bearing deposits in banks, and time deposits in other banks	$	2,227,453	$	4,495	0.81%	$	2,481,336	$	607	0.10%
Investment securities	1,021,610		7,405		2.91%	857,079		5,420		2.54%
Loans held for sale	944,964		10,036		4.26%	1,705,167		11,773		2.77%
Loans	16,861,674		181,602		4.32%	14,549,104		157,112		4.33%
Total interest-earning assets	21,055,701		203,538		3.88%	19,592,686		174,912		3.58%
Noninterest-earning assets	2,349,500					1,946,208
Total assets	$	23,405,201				$	21,538,894
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits	$	9,790,029	$	3,590	0.15%	$	9,063,721	$	2,846	0.13%
Time deposits	1,693,740		1,318		0.31%	2,006,265		2,929		0.59%
Securities sold under agreements to repurchase	1,854		1		0.22%	6,883		5		0.29%
FHLB advances	48,746		192		1.58%	48,910		193		1.58%
Other borrowings	376,829		4,437		4.72%	376,376		4,683		4.99%
Subordinated deferrable interest debentures	127,063		1,666		5.26%	125,068		1,243		3.99%
Total interest-bearing liabilities	12,038,261		11,204		0.37%	11,627,223		11,899		0.41%
Demand deposits	7,955,765					6,874,471
Other liabilities	367,895					238,931
Shareholders’ equity	3,043,280					2,798,269
Total liabilities and shareholders’ equity	$	23,405,201				$	21,538,894
Interest rate spread					3.51%					3.17%
Net interest income			$	192,334				$	163,013
Net interest margin					3.66%					3.34%

On a tax-equivalent basis, net interest income for the second quarter of 2022 was $192.3 million, an increase of $29.3 million, or 18.0%, compared with $163.0 million reported in the same quarter in 2021. The higher net interest income is primarily a result of growth in investment securities and loans complemented by disciplined deposit repricing. Average interest earning assets increased $1.46 billion, or 7.5%, from $19.59 billion in the second quarter of 2021 to $21.06 billion for the second quarter of 2022. This growth in interest earning assets resulted primarily from organic loan growth, loans acquired from Balboa Capital and excess liquidity from deposit growth. The Company’s net interest margin during the second quarter of 2022 was 3.66%, up 32 basis points from 3.34% reported in the second quarter of 2021. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to $5.3 billion during the second quarter of 2022, with weighted average yields of 4.29%, compared with $6.4 billion and 3.36%, respectively, during the second quarter of 2021. Loan production in the banking division amounted to $1.1 billion during the second quarter of 2022, with weighted average yields of 5.24%, compared with $911.3 million and 3.75%, respectively, during the second quarter of 2021.

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

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

	Three Months Ended<br>June 30, 2022			Three Months Ended<br>June 30, 2021
(dollars in thousands)	Average<br>Balance		Average<br>Cost	Average<br>Balance		Average<br>Cost
NOW	$	3,695,490	0.14%	$	3,314,334	0.10%
MMDA	5,087,199		0.17%	4,872,500		0.16%
Savings	1,007,340		0.06%	876,887		0.06%
Retail CDs	1,693,740		0.31%	2,005,265		0.58%
Brokered CDs	—		—%	1,000		3.21%
Interest-bearing deposits	$	11,483,769	0.17%	$	11,069,986	0.21%

Provision for Credit Losses

The Company’s provision for credit losses during the second quarter of 2022 amounted to $14.9 million, compared with a provision of $142,000 in the second quarter of 2021. This increase was attributable to organic growth in loans during the quarter. The provision for credit losses for the second quarter of 2022 was comprised of $13.2 million related to loans, $1.8 million related to unfunded commitments and negative $82,000 related to other credit losses, compared with negative $899,000 related to loans, $1.3 million related to unfunded commitments and negative $258,000 related to other credit losses for the second quarter of 2021. Non-performing assets as a percentage of total assets increased from 0.43% at December 31, 2021 to 0.56% at June 30, 2022. The increase in non-performing assets is primarily attributable to an increase in nonaccruing loans as a result of rebooked GNMA loans, which the Company has the right, but not the obligation, to repurchase, and one commercial real estate loan totaling $10.4 million. The Company recognized net charge-offs on loans during the second quarter of 2022 of approximately $1.8 million, or 0.04% of average loans on an annualized basis, compared with net charge-offs of approximately $2.6 million, or 0.07%, in the second quarter of 2021. The Company’s total allowance for credit losses on loans at June 30, 2022 was $172.6 million, or 0.98% of total loans, compared with $167.6 million, or 1.06% of total loans, at December 31, 2021. This increase is primarily attributable to organic growth in loans, partially offset by improvement in forecast economic conditions.

Noninterest Income

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

Other noninterest income increased $5.7 million, or 82.7%, to $12.7 million for the second quarter of 2022, compared with $6.9 million during the second quarter of 2021. The increase in other noninterest income was primarily attributable to fee income from Balboa of $5.3 million and an increase in BOLI income of $614,000, partially offset by a decrease in gains on sales of SBA loans of $1.1 million.

Noninterest Expense

Total noninterest expense for the second quarter of 2022 increased $6.4 million, or 4.7%, to $142.2 million, compared with $135.8 million in the same quarter 2021. Salaries and employee benefits decreased $4.0 million, or 4.6%, from $85.5 million in the second quarter of 2021 to $81.5 million in the second quarter of 2022, due primarily to decreases in variable compensation tied to mortgage production of $11.4 million, partially offset by salaries and employee benefits related to Balboa of $10.9 million. Occupancy and equipment expenses increased $1.9 million, or 17.9%, to $12.7 million for the second quarter of 2022,

compared with $10.8 million in the second quarter of 2021, due primarily to additional expenses related to Balboa and an increase in real estate taxes. Data processing and communications expenses increased $278,000, or 2.3%, to $12.2 million in the second quarter of 2022, compared with $11.9 million in the second quarter of 2021. Advertising and marketing expense was $3.1 million in the second quarter of 2022, compared with $1.9 million in the second quarter of 2021. This increase was primarily related to a new marketing campaign. Amortization of intangible assets increased $1.1 million, or 26.5%, from $4.1 million in the second quarter of 2021 to $5.1 million in the second quarter of 2022. This increase was primarily related to intangibles from the acquisition of Balboa Capital Corporation in December 2021, partially offset by a reduction in core deposit intangible amortization. Loan servicing expenses increased $5.0 million, or 101.9%, from $4.9 million in the second quarter of 2021 to $9.9 million in the second quarter of 2022, primarily attributable to additional mortgage loans serviced resulting from strong mortgage production over the previous year. Other noninterest expenses increased $1.0 million, or 6.5%, from $16.0 million in the second quarter of 2021 to $17.1 million in the second quarter of 2022, due primarily to an increase of $1.2 million in legal fees and an increase in insurance expense to the Federal Deposit Insurance Corporation (the "FDIC") of $385,000. These increases in other noninterest expenses were partially offset by a decrease in problem loan expenses of $125,000 resulting from an increase in net gains on OREO.

Income Taxes

Income tax expense is influenced by the statutory rate, the amount of taxable income, the amount of tax-exempt income and the amount of nondeductible expenses.  For the second quarter of 2022, the Company reported income tax expense of $28.0 million, compared with $26.9 million in the same period of 2021. The Company’s effective tax rate for the three months ending June 30, 2022 and 2021 was 23.7% and 23.3%, respectively. The increase in the effective tax rate is primarily a result of increased state taxes in the second quarter of 2022 resulting from shifts in apportionment related to the Balboa Capital acquisition.

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

Consolidated Earnings and Profitability

Ameris reported net income available to common shareholders of $171.8 million, or $2.47 per diluted share, for the six months ended June 30, 2022, compared with $213.3 million, or $3.06 per diluted share, for the same period in 2021. The Company’s return on average assets and average shareholders’ equity were 1.48% and 11.47%, respectively, in the six months ended June 30, 2022, compared with 2.03% and 15.66%, respectively, in the same period in 2021. During the first six months of 2022, the Company recorded pre-tax merger and conversion charges of $977,000, pre-tax servicing right recovery of $20.5 million and pre-tax gain on bank premises of $45,000. During the first six months of 2021, the Company recorded pre-tax servicing right recovery of $11.4 million, pre-tax gain on BOLI proceeds of $603,000 and pre-tax gain on bank premises of $500,000. Excluding these adjustment items, the Company’s net income would have been $156.5 million, or $2.25 per diluted share, for the six months ended June 30, 2022 and $203.3 million, or $2.91 per diluted share, for the same period in 2021.

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

	Six Months Ended<br>June 30,
(in thousands, except share and per share data)	2022		2021
Net income available to common shareholders	$	171,764	$	213,289
Adjustment items:
Merger and conversion charges	977		—
Servicing right recovery	(20,492)		(11,388)
Gain on BOLI proceeds	—		(603)
Gain on bank premises	(45)		(500)
Tax effect of adjustment items (Note 1)	4,308		2,496
After tax adjustment items	(15,252)		(9,995)
Adjusted net income	$	156,512	$	203,294
Weighted average common shares outstanding - diluted	69,484,508		69,764,923
Net income per diluted share	$	2.47	$	3.06
Adjusted net income per diluted share	$	2.25	$	2.91
Note 1: Tax effect is calculated utilizing a 21% rate for taxable adjustments. Gain on BOLI proceeds is non-taxable and no tax effect is included. A portion of the merger and conversion charges for the six months ended June 30, 2022 is nondeductible for tax purposes.

Below is additional information regarding the retail banking activities, mortgage banking activities, warehouse lending activities, SBA activities and premium finance activities of the Company during the six months ended June 30, 2022 and 2021, respectively:

	Six Months Ended<br>June 30, 2022
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br> Finance<br> Division		Total
Interest income	$	271,134	$	70,887	$	15,289	$	11,537	$	17,095	$	385,942
Interest expense	(14,733)		30,813		2,142		1,728		2,084		22,034
Net interest income	285,867		40,074		13,147		9,809		15,011		363,908
Provision for loan losses	15,401		6,086		645		(666)		(311)		21,155
Noninterest income	44,833		119,444		2,442		4,017		16		170,752
Noninterest expense
Salaries and employee benefits	95,928		62,833		491		2,587		3,987		165,826
Occupancy and equipment	22,242		2,877		2		180		172		25,473
Data processing and communications expenses	22,093		2,295		95		57		187		24,727
Other expenses	41,168		25,457		430		919		2,016		69,990
Total noninterest expense	181,431		93,462		1,018		3,743		6,362		286,016
Income before income tax expense	133,868		59,970		13,926		10,749		8,976		227,489
Income tax expense	36,116		12,594		2,925		2,257		1,833		55,725
Net income	$	97,752	$	47,376	$	11,001	$	8,492	$	7,143	$	171,764
	Six Months Ended<br>June 30, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---
(dollars in thousands)	Banking<br>Division		Retail<br>Mortgage<br>Division		Warehouse<br>Lending<br>Division		SBA<br>Division		Premium<br>Finance<br>Division		Total
Interest income	$	221,639	$	64,284	$	19,315	$	32,084	$	14,379	$	351,701
Interest expense	(1,847)		22,767		689		2,567		696		24,872
Net interest income	223,486		41,517		18,626		29,517		13,683		326,829
Provision for loan losses	(27,853)		1,094		(300)		(1,154)		(236)		(28,449)
Noninterest income	32,909		166,695		2,313		5,288		8		207,213
Noninterest expense
Salaries and employee benefits	80,537		94,636		608		2,319		3,390		181,490
Occupancy and equipment	19,170		3,029		2		238		154		22,593
Data processing and communications expenses	20,481		2,981		117		1		181		23,761
Other expenses	38,473		15,827		63		579		1,773		56,715
Total noninterest expense	158,661		116,473		790		3,137		5,498		284,559
Income before income tax expense	125,587		90,645		20,449		32,822		8,429		277,932
Income tax expense	32,652		19,035		4,294		6,893		1,769		64,643
Net income	$	92,935	$	71,610	$	16,155	$	25,929	$	6,660	$	213,289

Net Interest Income and Margins

The following table sets forth the average balance, interest income or interest expense, and average yield/rate paid for each category of interest-earning assets and interest-bearing liabilities, net interest spread, and net interest margin on average interest-earning assets for the six months ended June 30, 2022 and 2021. Federally tax-exempt income is presented on a taxable-equivalent basis assuming a 21% federal tax rate.

	Six Months Ended<br>June 30,
	2022					2021
(dollars in thousands)	Average<br>Balance		Interest<br>Income/<br>Expense		Average<br>Yield/<br>Rate Paid	Average<br>Balance		Interest<br>Income/<br>Expense		Average<br>Yield/<br>Rate Paid
Assets
Interest-earning assets:
Federal funds sold, interest-bearing deposits  in banks, and time deposits in other banks	$	2,817,071	$	5,878	0.42%	$	2,324,365	$	1,141	0.10%
Investment securities	862,178		11,879		2.78%	907,049		11,716		2.60%
Loans held for sale	1,020,611		18,168		3.59%	1,496,155		22,600		3.05%
Loans	16,344,409		352,000		4.34%	14,501,802		318,585		4.43%
Total interest-earning assets	21,044,269		387,925		3.72%	19,229,371		354,042		3.71%
Noninterest-earning assets	2,296,516					1,915,380
Total assets	$	23,340,785				$	21,144,751
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Savings and interest-bearing demand deposits	$	9,844,422	$	6,190	0.13%	$	8,915,964	$	5,894	0.13%
Time deposits	1,733,656		2,810		0.33%	2,036,668		6,679		0.66%
Federal funds purchased and securities sold under agreements to repurchase	2,931		4		0.28%	8,077		12		0.30%
FHLB advances	48,766		382		1.58%	48,931		385		1.59%
Other borrowings	410,058		9,601		4.72%	376,318		9,321		4.99%
Subordinated deferrable interest debentures	126,814		3,047		4.85%	124,823		2,581		4.17%
Total interest-bearing liabilities	12,166,647		22,034		0.37%	11,510,781		24,872		0.44%
Demand deposits	7,807,929					6,644,646
Other liabilities	347,109					242,402
Shareholders’ equity	3,019,100					2,746,922
Total liabilities and shareholders’ equity	$	23,340,785				$	21,144,751
Interest rate spread					3.35%					3.27%
Net interest income			$	365,891				$	329,170
Net interest margin					3.51%					3.45%

On a tax-equivalent basis, net interest income for the six months ended June 30, 2022 was $365.9 million, an increase of $36.7 million, or 11.2%, compared with $329.2 million reported in the same period of 2021. The higher net interest income is a result of growth in average earning assets and disciplined deposit pricing. Average interest earning assets increased $1.81 billion, or 9.4%, from $19.23 billion in the first six months of 2021 to $21.04 billion for the first six months of 2022. This growth in interest earning assets resulted primarily from organic growth in average loans and loans acquired from Balboa Capital. The Company’s net interest margin during the first six months of 2022 was 3.51%, up six basis points from 3.45% reported for the first six months of 2021. Loan production in the lines of business (including retail mortgage, warehouse lending, SBA and premium finance) amounted to $10.0 billion during the first six months of 2022, with weighted average yields of 3.98%, compared with $13.9 billion and 3.25%, respectively, during the first six months of 2021. Loan production yields in the lines of business were negatively impacted seven basis points during the first six months of 2021 by originations of Paycheck Protection Program loans in our SBA division. Loan production in the banking division amounted to $1.9 billion during the first six months of 2022 with weighted average yields of 5.21%, compared with $1.5 billion and 3.77%, respectively, during the first six months of 2021.

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

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

The yield on total interest-bearing liabilities decreased from 0.44% during the six months ended June 30, 2021 to 0.37% in the same period of 2022. Total funding costs, inclusive of noninterest-bearing demand deposits, decreased to 0.22% in the first six months of 2022, compared with 0.28% during the same period of 2021. Deposit costs decreased from 0.14% in the first six months of 2021 to 0.09% in the same period of 2022. Non-deposit funding costs increased from 4.44% in the first six months of 2021 to 4.47% in the same period of 2022. The increase in non-deposit funding costs was driven primarily by an increase in index rates. Average balances of interest bearing deposits and their respective costs for the six months ended June 30, 2022 and 2021 are shown below:

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

Provision for Credit Losses

The Company’s provision for credit losses during the six months ended June 30, 2022 amounted to $21.2 million, compared with negative $28.4 million in the six months ended June 30, 2021. This increase was primarily attributable to organic growth in loans during the first six months of 2022 and a release of reserves in the six months ended June 30, 2021 which resulted from an improved economic forecast, particularly levels of unemployment, home prices and gross domestic product. The provision for credit losses for the first six months of 2022 was comprised of $10.5 million related to loans, $10.8 million related to unfunded commitments and negative $126,000 related to other credit losses compared with negative $17.5 million related to loans, negative $10.5 million related to unfunded commitments and negative $431,000 related to other credit losses for the same period in 2021. Non-performing assets as a percentage of total assets increased from 0.43% at December 31, 2021 to 0.56% at June 30, 2022. The increase in non-performing assets is primarily attributable to an increase in nonaccruing loans as a result of rebooked GNMA loans, which the Company has the right, but not the obligation, to repurchase, and one commercial real estate loan totaling $10.4 million. Net charge-offs on loans during the first six months of 2022 were $5.4 million, or 0.07% of average loans on an annualized basis, compared with approximately $6.9 million, or 0.10%, in the first six months of 2021. The Company’s total allowance for credit losses on loans at June 30, 2022 was $172.6 million, or 0.98% of total loans, compared with $167.6 million, or 1.06% of total loans, at December 31, 2021. This increase is primarily attributable to organic growth in loans, partially offset by improvement in forecast economic conditions.

Noninterest Income

Total noninterest income for the six months ended June 30, 2022 was $170.8 million, a decrease of $36.5 million, or 17.6%, from the $207.2 million reported for the six months ended June 30, 2021.  Income from mortgage banking activities decreased $47.0 million, or 27.9%, from $168.7 million in the first six months of 2021 to $121.7 million in the same period of 2022. Total production in the first six months of 2022 amounted to $3.26 billion, compared with $5.03 billion in the same period of 2021, while spread (gain on sale) decreased to 2.63% during the six months ended June 30, 2022, compared with 3.39% in the same period of 2021. The retail mortgage open pipeline was $832.3 million at June 30, 2022, compared with $1.62 billion at December 31, 2021 and $1.75 billion at June 30, 2021. Mortgage-related activities was positively impacted during the first six months of 2022 by a recovery of previous mortgage servicing right impairment of $20.5 million, compared with a recovery of $11.4 million for the same period in 2021.

Other noninterest income increased $10.1 million, or 69.1%, to $24.7 million for the first six months of 2022, compared with $14.6 million during the same period of 2021. The increase in other noninterest income was primarily attributable to an increase in fee income from Balboa Capital of $9.0 million, an increase in BOLI income of $1.6 million and an increase in trust income of $473,000, partially offset by a decrease of $603,000 in gain on BOLI proceeds.

Noninterest Expense

Total noninterest expenses for the six months ended June 30, 2022 increased $1.5 million, or 0.5%, to $286.0 million, compared with $284.6 million in the same period of 2021. Salaries and employee benefits decreased $15.7 million, or 8.6%, from $181.5 million in the first six months of 2021 to $165.8 million in the same period of 2022 due primarily to decreases in variable compensation tied to mortgage production and overtime in our mortgage division of $27.7 million and $1.5 million, respectively, partially offset by an increase in salaries and employee benefits related to Balboa Capital of $17.6 million. Occupancy and equipment expenses increased $2.9 million, or 12.7%, to $25.5 million for the first six months of 2022, compared with $22.6 million in the same period of 2021, due primarily to the addition of Balboa Capital and an increase in real estate taxes. Data processing and communications expenses increased $966,000, or 4.1%, to $24.7 million in the first six months of 2022, from $23.8 million reported in the same period of 2021. Credit resolution-related expenses decreased $1.6 million, or 140.1%, from $1.2 million in the first six months of 2021 to negative $469,000 in the same period of 2022. This decrease in credit resolution-related expenses primarily resulted from an increase in gain on sale of OREO properties of $1.2 million. Advertising and marketing expense was $5.1 million in the first six months of 2022, compared with $3.4 million in the first six months of 2021. Amortization of intangible assets increased $2.1 million, or 26.1%, from $8.2 million in the first six months of 2021 to $10.3 million in the first six months of 2022. This increase was primarily related to amortization of intangibles from the acquisition of Balboa Capital Corporation in December 2021, partially offset by a reduction in core deposit intangible amortization. There were $977,000 in merger and conversion charges in the first six months of 2022, compared with none in the same period in 2021. Loan servicing expenses increased $8.0 million, or 74.2%, from $10.8 million in the first six months of 2021 to $18.8 million in the same period of 2022, primarily attributable to additional mortgage loans serviced resulting from strong mortgage production over the previous year. Other noninterest expenses increased $2.0 million, or 6.2%, from $33.2 million in the first six months of 2021 to $35.2 million in the same period of 2022, due primarily to an increase of $2.9 million in legal fees and an increase of $1.3 million in FDIC insurance expense. These increases in other noninterest expenses were partially offset by decreases in other losses of $569,000 and variable expenses tied to production in our mortgage division.

Income Taxes

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

Financial Condition as of June 30, 2022

Securities

Debt securities classified as available-for-sale are recorded at fair value with unrealized holding gains and losses excluded from earnings and reported in accumulated other comprehensive income, net of the related deferred tax effect. Securities available-for-sale may be bought and sold in response to changes in market conditions, including, but not limited to, fluctuations in interest rates, changes in securities' prepayment risk, increases in loan demand, general liquidity needs and positioning the portfolio to take advantage of market conditions that create more economically attractive returns. Debt securities are classified as held-to-maturity based on management's positive intent and ability to hold such securities to maturity and are carried at amortized cost. Restricted equity securities are classified as other investment securities and are carried at cost and are periodically evaluated for impairment based on the ultimate recovery of par value or cost basis.

The amortization of premiums and accretion of discounts are recognized in interest income using methods approximating the interest method over the expected life of the securities. Realized gains and losses, determined on the basis of the cost of specific securities sold, are included in earnings on the trade date.

Management and the Company’s ALCO Committee evaluate available-for-sale securities in an unrealized loss position on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation, to determine if credit-related impairment exists. Management first evaluates whether they intend to sell or more likely than not will be required to sell an impaired security before recovering its amortized cost basis. If either criteria is met, the entire amount of unrealized loss is recognized in earnings with a corresponding adjustment to the security's amortized cost basis. If either of the above criteria is not met, management evaluates whether the decline in fair value is attributable to credit or resulted from other factors. If credit-related impairment exists, the Company recognizes an allowance for credit losses, limited to the amount by which the fair value is less than the amortized cost basis. Any impairment not recognized through an allowance for credit losses is recognized in other comprehensive income, net of tax, as a non credit-related impairment. The Company does not intend to sell these available-for-sale investment securities at an unrealized loss position at June 30, 2022, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Based on the results of management's review, at June 30, 2022, management determined that $88,000 was attributable to credit impairment and, accordingly, an allowance for credit losses was established. The remaining $16.7 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.

The following table is a summary of our investment portfolio at the dates indicated:

	June 30, 2022				December 31, 2021
(dollars in thousands)	Amortized Cost		Fair<br>Value		Amortized Cost		Fair<br>Value
Securities available-for-sale
U.S. Treasuries	$	314,613	$	312,889	$	—	$	—
U.S. government-sponsored agencies	2,050		2,021		7,084		7,172
State, county and municipal securities	41,428		40,963		45,470		47,812
Corporate debt securities	15,897		15,463		27,897		28,496
SBA pool securities	35,854		34,431		44,312		45,201
Mortgage-backed securities	658,508		646,501		448,124		463,940
Total debt securities available-for-sale	$	1,068,350	$	1,052,268	$	572,887	$	592,621
Securities held-to-maturity
State, county and municipal securities	$	31,905	$	27,626	$	8,905	$	8,711
Mortgage-backed securities	79,749		69,518		70,945		69,495
Total debt securities held-to-maturity	$	111,654	$	97,144	$	79,850	$	78,206

The amounts of securities available-for-sale and held-to-maturity in each category as of June 30, 2022 are shown in the following table according to contractual maturity classifications: (i) one year or less; (ii) after one year through five years; (iii) after five years through ten years; and (iv) after ten years:

	U.S. Treasuries				U.S. Government-Sponsored Agencies				State, County and<br>Municipal Securities
(dollars in thousands)<br><br>Securities available-for-sale (1)	Amount		Yield<br> (2)		Amount		Yield<br> (2)		Amount			Yield<br>(2)(3)
One year or less	$	—	—	%	$	1,008	1.92	%	$	4,769		3.05	%
After one year through five years	312,889		2.53		1,013		2.16		13,715			4.07
After five years through ten years	—		—		—		—		15,252		4	4.01
After ten years	—		—		—		—		7,227			3.70
	$	312,889	2.53	%	$	2,021	2.04	%	$	40,963		3.86	%
	Corporate Debt Securities				SBA Pool Securities				Mortgage-Backed Securities
(dollars in thousands)<br><br>Securities available-for-sale (1)	Amount		Yield<br> (2)		Amount		Yield<br> (2)		Amount			Yield<br> (2)
One year or less	$	500	3.88	%	$	477	2.10	%	$	21		2.40	%
After one year through five years	—		—		9,663		2.07		113,977			2.99
After five years through ten years	13,244		4.71		2,589		3.04		225,714			2.94
After ten years	1,719		5.59		21,702		2.50		306,789			3.03
	$	15,463	4.79	%	$	34,431	2.42	%	$	646,501		2.99	%
	State, County and<br>Municipal Securities				Mortgage-Backed Securities
(dollars in thousands)<br><br>Securities held-to-maturity (1)	Amount		Yield<br>(2)(3)		Amount		Yield<br> (2)
One year or less	$	—	—	%	$	—	—	%
After one year through five years	—		—		11,044		1.01
After five years through ten years	—		—		26,103		2.03
After ten years	31,905		3.93		42,602		1.68
	$	31,905	3.93	%	$	79,749	1.70	%

(1)The amortized cost of securities held-to-maturity and fair value of securities available-for-sale are presented based on contractual maturities. Actual cash flows may differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties.

(2)Yields were computed using coupon interest, adding discount accretion or subtracting premium amortization, as appropriate, on a ratable basis over the life of each security. The weighted average yield for each maturity range was computed using the amortized cost of each security in that range.

(3)Yields on securities of state and political subdivisions are stated on a taxable-equivalent basis, using a tax rate of 21%.

Loans and Allowance for Credit Losses

At June 30, 2022, gross loans outstanding (including loans and loans held for sale) were $18.12 billion, up $987.8 million from $17.13 billion reported at December 31, 2021. Loans increased $1.69 billion, or 10.6%, from $15.87 billion at December 31, 2021 to $17.56 billion at June 30, 2022, driven primarily by organic growth. Loans held for sale decreased from $1.25 billion at December 31, 2021 to $555.7 million at June 30, 2022 primarily in our mortgage division.

The Company regularly monitors the composition of the loan portfolio to evaluate the adequacy of the allowance for credit losses ("ACL") on loans in light of the impact that changes in the economic environment may have on the loan portfolio. The Company focuses on the following loan categories: (1) commercial, financial and agricultural; (2) consumer installment; (3) indirect automobile; (4) mortgage warehouse; (5) municipal; (6) premium finance; (7) construction and development related real estate; (8) commercial and farmland real estate; and (9) residential real estate. The Company’s management has strategically located its branches in select markets in Georgia, Alabama, Florida, North Carolina and South Carolina to take advantage of the growth in these areas.

The Company’s risk management processes include a loan review program designed to evaluate the credit risk in the loan portfolio and ensure credit grade accuracy. Through the loan review process, the Company conducts (1) a loan portfolio summary analysis, (2) charge-off and recovery analysis, (3) trends in accruing problem loan analysis, and (4) problem and past-due loan analysis. This analysis process serves as a tool to assist management in assessing the overall quality of the loan portfolio and the adequacy of the ACL. Loans classified as “substandard” are loans which are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses and/or questionable collateral values. Loans classified as “doubtful” are those loans that have characteristics similar to substandard loans but have an increased risk of loss. Loans classified as “loss” are those loans which are considered uncollectible and are in the process of being charged off.

The Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, and net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL, except for loans modified under the Disaster Relief Program.

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

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

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

At the end of the second quarter of 2022, the ACL on loans totaled $172.6 million, or 0.98% of loans, compared with $167.6 million, or 1.06% of loans, at December 31, 2021. Our nonaccrual loans increased from $85.3 million at December 31, 2021 to $122.9 million at June 30, 2022. The increase in nonaccrual loans is attributable to rebooked GNMA loans, which the Company has the right, but not the obligation, to repurchase, and one commercial real estate loan totaling $10.4 million. For the first six months of 2022, our net charge off ratio as a percentage of average loans decreased to 0.07%, compared with 0.10% for the first six months of 2021. The total provision for credit losses for the first six months of 2022 was $21.2 million, increasing from a provision release of $28.4 million recorded for the first six months of 2021. Our ratio of total nonperforming assets to total assets increased from 0.43% at December 31, 2021 to 0.56% at June 30, 2022.

The following table presents an analysis of the allowance for credit losses on loans, provision for credit losses on loans and net charge-offs as of and for the six months ended June 30, 2022 and 2021:

	Six Months Ended<br>June 30,
(dollars in thousands)	2022		2021
Balance of allowance for credit losses on loans at beginning of period	$	167,582	$	199,422
Provision charged to operating expense	10,493		(17,478)
Charge-offs:
Commercial, financial and agricultural	8,805		5,899
Consumer installment	2,562		3,117
Indirect automobile	129		970
Premium finance	2,435		2,537
Real estate – construction and development	—		212
Real estate – commercial and farmland	1,364		1,422
Real estate – residential	137		555
Total charge-offs	15,432		14,712
Recoveries:
Commercial, financial and agricultural	5,681		1,352
Consumer installment	388		568
Indirect automobile	540		1,072
Premium finance	2,360		3,588
Real estate – construction and development	573		251
Real estate – commercial and farmland	81		226
Real estate – residential	376		781
Total recoveries	9,999		7,838
Net charge-offs	5,433		6,874
Balance of allowance for credit losses on loans at end of period	$	172,642	$	175,070

The following table presents an analysis of the allowance for credit losses on loans and net charge-offs for loans held for investment:

	As of and for the Six Months Ended
(dollars in thousands)	June 30, 2022			June 30, 2021
Allowance for credit losses on loans at end of period	$	172,642		$	175,070
Net charge-offs for the period	5,433			6,874
Loan balances:
End of period	17,561,022			14,780,791
Average for the period	16,344,409			14,501,802
Net charge-offs as a percentage of average loans (annualized)	0.07		%	0.10		%
Allowance for credit losses on loans as a percentage of end of period loans	0.98		%	1.18		%

Loans

Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table:

(dollars in thousands)	June 30, 2022		December 31, 2021
Commercial, financial and agricultural	$	2,022,845	$	1,875,993
Consumer installment	167,237		191,298
Indirect automobile	172,245		265,779
Mortgage warehouse	949,191		787,837
Municipal	529,268		572,701
Premium finance	942,357		798,409
Real estate – construction and development	1,747,284		1,452,339
Real estate – commercial and farmland	7,156,017		6,834,917
Real estate – residential	3,874,578		3,094,985
	$	17,561,022	$	15,874,258

Non-Performing Assets

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

Nonaccrual loans totaled $122.9 million at June 30, 2022, an increase of $37.6 million, or 44.2%, from $85.3 million at December 31, 2021. Accruing loans delinquent 90 days or more totaled $8.5 million at June 30, 2022, a decrease of $4.1 million, or 32.5%, compared with $12.6 million at December 31, 2021. At June 30, 2022, OREO totaled $835,000, a decrease of $3.0 million, or 78.1%, compared with $3.8 million at December 31, 2021. Management regularly assesses the valuation of OREO through periodic reappraisal and through inquiries received in the marketing process.  At the end of the second quarter of 2022, total non-performing assets as a percent of total assets increased to 0.56% compared with 0.43% at December 31, 2021.

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

(dollars in thousands)	June 30, 2022		December 31, 2021
Nonaccrual loans	$	122,912	$	85,266
Accruing loans delinquent 90 days or more	8,542		12,648
Repossessed assets	122		84
Other real estate owned	835		3,810
Total non-performing assets	$	132,411	$	101,808

Troubled Debt Restructurings

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession.

As of June 30, 2022 and December 31, 2021, the Company had a balance of $41.8 million and $76.6 million, respectively, in troubled debt restructurings. These totals do not include COVID-19 loan modifications accounted for under Section 4013 of the CARES Act. The following table presents the amount of troubled debt restructurings by loan class classified separately as accrual and nonaccrual at June 30, 2022 and December 31, 2021:

June 30, 2022	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	9	$	964	3	$	364
Consumer installment	4	9		10	14
Indirect automobile	196	759		30	122
Premium finance	6	993		—	—
Real estate – construction and development	2	706		—	—
Real estate – commercial and farmland	18	8,213		4	788
Real estate – residential	210	24,456		31	4,369
Total	445	$	36,100	78	$	5,657
December 31, 2021	Accruing Loans			Non-Accruing Loans
---	---	---	---	---	---	---
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	12	$	1,286	6	$	83
Consumer installment	7	16		17	35
Indirect automobile	233	1,037		52	273
Real estate – construction and development	4	789		1	13
Real estate – commercial and farmland	25	35,575		5	5,924
Real estate – residential	213	26,879		39	4,678
Total	494	$	65,582	120	$	11,006

The following table presents the amount of troubled debt restructurings by loan class classified separately as those currently paying under restructured terms and those that have defaulted (defined as 30 days past due) under restructured terms at June 30, 2022 and December 31, 2021:

June 30, 2022	Loans Currently Paying<br>Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	11	$	971	1	$	357
Consumer installment	8	13		6	10
Indirect automobile	182	697		44	184
Premium finance	6	993		—	—
Real estate – construction and development	2	706		—	—
Real estate – commercial and farmland	21	8,993		1	8
Real estate – residential	198	23,052		43	5,773
Total	428	$	35,425	95	$	6,332
December 31, 2021	Loans Currently Paying<br>Under Restructured Terms			Loans that have Defaulted Under Restructured Terms
---	---	---	---	---	---	---
Loan Class	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Commercial, financial and agricultural	11	$	1,269	7	$	100
Consumer installment	10	17		14	34
Indirect automobile	233	1,052		52	258
Real estate – construction and development	4	789		1	13
Real estate – commercial and farmland	29	41,452		1	47
Real estate – residential	215	26,956		37	4,601
Total	502	$	71,535	112	$	5,053

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

June 30, 2022	Accruing Loans			Non-Accruing Loans
Type of Concession	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Forgiveness of interest	3	$	283	—	$	—
Forbearance of interest	15	1,070		1	41
Forbearance of principal	288	21,748		49	4,725
Rate reduction only	54	5,311		2	160
Rate reduction, forbearance of interest	32	2,385		2	25
Rate reduction, forbearance of principal	17	2,336		21	573
Rate reduction, forgiveness of interest	36	2,967		3	133
Total	445	$	36,100	78	$	5,657
December 31, 2021	Accruing Loans			Non-Accruing Loans
---	---	---	---	---	---	---
Type of Concession	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Forgiveness of interest	3	$	287	—	$	—
Forbearance of interest	16	1,218		1	15
Forbearance of principal	332	49,778		73	9,783
Rate reduction only	55	6,321		4	200
Rate reduction, maturity extension	—	—		1	1
Rate reduction, forbearance of interest	33	2,296		6	319
Rate reduction, forbearance of principal	18	2,694		29	363
Rate reduction, forgiveness of interest	37	2,988		6	325
Total	494	$	65,582	120	$	11,006

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

June 30, 2022	Accruing Loans			Non-Accruing Loans
Collateral Type	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Warehouse	3	$	57	2	$	251
Raw land	3	1,751		2	51
Hotel and motel	1	130		—	—
Office	4	613		—	—
Retail, including strip centers	7	3,978		1	496
1-4 family residential	210	24,456		30	4,359
Church	2	2,390		—	—
Automobile/equipment/CD	209	1,732		43	500
Unsecured	6	993		—	—
Total	445	$	36,100	78	$	5,657
December 31, 2021	Accruing Loans			Non-Accruing Loans
---	---	---	---	---	---	---
Collateral Type	#	Balance<br><br>(in thousands)		#	Balance<br><br>(in thousands)
Warehouse	3	$	61	2	$	272
Raw land	6	3,776		1	13
Hotel and motel	4	22,069		1	4,798
Office	5	710		1	485
Retail, including strip centers	8	7,118		1	370
1-4 family residential	215	27,129		39	4,678
Church	2	2,393		—	—
Automobile/equipment/CD	251	2,326		75	390
Total	494	$	65,582	120	$	11,006

Commercial Lending Practices

The federal bank regulatory agencies previously issued interagency guidance on commercial real estate lending and prudent risk management practices. This guidance defines commercial real estate (“CRE”) loans as loans secured by raw land, land development and construction (including one-to-four family residential construction), multi-family property and non-farm nonresidential property where the primary or a significant source of repayment is derived from rental income associated with the property, excluding owner-occupied properties (loans for which 50% or more of the source of repayment is derived from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property) or the proceeds of the sale, refinancing or permanent financing of the property. Loans for owner-occupied CRE are generally excluded from the CRE guidance.

The CRE guidance is applicable when either:

(1)total loans for construction, land development, and other land, net of owner-occupied loans, represent 100% or more of a tier I capital plus allowance for credit losses on loans and leases; or

(2)total loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land, net of owner-occupied loans, represent 300% or more of a bank’s tier I capital plus allowance for credit losses on loans and leases.

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

As of June 30, 2022, the Company exhibited a concentration in the CRE loan category based on Federal Reserve Call codes. The primary risks of CRE lending are:

(1)within CRE loans, construction and development loans are somewhat dependent upon continued strength in demand for residential real estate, which is reliant on favorable real estate mortgage rates and changing population demographics;

(2)on average, CRE loan sizes are generally larger than non-CRE loan types; and

(3)certain construction and development loans may be less predictable and more difficult to evaluate and monitor.

The following table outlines CRE loan categories and CRE loans as a percentage of total loans as of June 30, 2022 and December 31, 2021. The loan categories and concentrations below are based on Federal Reserve Call codes:

	June 30, 2022			December 31, 2021
(dollars in thousands)	Balance		% of Total<br>Loans	Balance		% of Total<br>Loans
Construction and development loans	$	1,747,284	10%	$	1,452,339	9%
Multi-family loans	693,382		4%	596,000		4%
Nonfarm non-residential loans (excluding owner-occupied)	4,539,983		26%	4,341,436		27%
Total CRE Loans (excluding owner-occupied)	6,980,649		40%	6,389,775		40%
All other loan types	10,580,373		60%	9,484,483		60%
Total Loans	$	17,561,022	100%	$	15,874,258	100%

The following table outlines the percentage of construction and development loans and total CRE loans, net of owner-occupied loans, to the Bank’s tier I capital plus allowance for credit losses on loans and leases, and the Company’s internal concentration limits as of June 30, 2022 and December 31, 2021:

	Internal<br>Limit		Actual
		June 30, 2022		December 31, 2021
Construction and development loans	100%		72%		66%
Total CRE loans (excluding owner-occupied)	300%		288%		291%

Short-Term Investments

The Company’s short-term investments are comprised of federal funds sold and interest-bearing deposits in banks. At June 30, 2022, the Company’s short-term investments were $1.96 billion, compared with $3.76 billion at December 31, 2021. At June 30, 2022, the Company had $5.0 million in federal funds sold and $1.96 billion was in interest-bearing deposit balances at correspondent banks and the Federal Reserve Bank of Atlanta.

Derivative Instruments and Hedging Activities

The Company has forward contracts and IRLCs to economically hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of these instruments amounted to an asset of $10.1 million and $11.9 million at June 30, 2022 and December 31, 2021, respectively, and a liability of $0 and $710,000 at June 30, 2022 and December 31, 2021, respectively.

Capital

Common Stock Repurchase Program

On September 19, 2019, the Company announced that its Board of Directors authorized the Company to repurchase up to $100.0 million of its outstanding common stock through October 31, 2020. On October 22, 2020 and again on October 28, 2021, the Company announced that its Board of Directors had approved the extension of the share repurchase program for an additional year in each instance. As a result, the Company is currently authorized to engage in repurchases through October 31, 2022.  Repurchases of shares must be made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases will be based on a variety of factors, including share acquisition price, regulatory limitations and other market and economic factors. The program does not require the Company to repurchase any specific number of shares. As of June 30, 2022, $41.7 million, or 952,910 shares of the Company's common stock, had been repurchased under the program.

Capital Management

Capital management consists of providing equity to support both current and anticipated future operations. The capital resources of the Company are monitored on a periodic basis by state and federal regulatory authorities.

Under the regulatory capital frameworks adopted by the Federal Reserve Board (the "FRB") and the FDIC, the Company and the Bank must each maintain a common equity Tier 1 capital to total risk-weighted assets ratio of at least 4.5%, a Tier 1 capital to total risk-weighted assets ratio of at least 6%, a total capital to total risk-weighted assets ratio of at least 8% and a leverage ratio of Tier 1 capital to average total consolidated assets of at least 4%. The Company and the Bank are also required to maintain a capital conservation buffer of common equity Tier 1 capital of at least 2.5% of risk-weighted assets in addition to the minimum risk-based capital ratios in order to avoid certain restrictions on capital distributions and discretionary bonus payments.

In March 2020, the Office of the Comptroller of the Currency, the FRB and the FDIC issued an interim final rule that delays the estimated impact on regulatory capital stemming from the implementation of CECL. The interim final rule provides banking organizations that implement CECL in 2020 the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period. As a result, the Company and Bank elected the five-year transition relief allowed under the interim final rule effective March 31, 2020.

As of June 30, 2022, under the regulatory capital standards, the Bank was considered “well capitalized” under all capital measurements. The following table sets forth the regulatory capital ratios of for the Company and the Bank at June 30, 2022 and December 31, 2021:

	June 30, 2022	December 31, 2021
Tier 1 Leverage Ratio (tier 1 capital to average assets)
Consolidated	9.01%	8.63%
Ameris Bank	10.30%	9.50%
CET1 Ratio (common equity tier 1 capital to risk weighted assets)
Consolidated	10.11%	10.46%
Ameris Bank	11.54%	11.50%
Tier 1 Capital Ratio (tier 1 capital to risk weighted assets)
Consolidated	10.11%	10.46%
Ameris Bank	11.54%	11.50%
Total Capital Ratio (total capital to risk weighted assets)
Consolidated	13.27%	13.78%
Ameris Bank	12.61%	12.45%

Interest Rate Sensitivity and Liquidity

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

The ALCO Committee is comprised of senior officers of Ameris. The ALCO Committee makes all strategic decisions with respect to the sources and uses of funds that may affect net interest income, including net interest spread and net interest margin. The objective of the ALCO Committee is to identify the interest rate, liquidity and market value risks of the Company’s balance sheet and use reasonable methods approved by the Company’s Board of Directors and executive management to minimize those identified risks.

The normal course of business activity exposes the Company to interest rate risk. Interest rate risk is managed within an overall asset and liability framework for the Company. The principal objectives of asset and liability management are to predict the sensitivity of net interest spreads to potential changes in interest rates, control risk and enhance profitability. Funding positions are kept within predetermined limits designed to properly manage risk and liquidity. The Company employs sensitivity analysis

in the form of a net interest income simulation to help characterize the market risk arising from changes in interest rates. In addition, fluctuations in interest rates usually result in changes in the fair market value of the Company’s financial instruments, cash flows and net interest income. The Company’s interest rate risk position is managed by the ALCO Committee.

The Company uses a simulation modeling process to measure interest rate risk and evaluate potential strategies. Interest rate scenario models are prepared using software created and licensed from an outside vendor. The Company’s simulation includes all financial assets and liabilities. Simulation results quantify interest rate risk under various interest rate scenarios. Management then develops and implements appropriate strategies. The ALCO Committee has determined that an acceptable level of interest rate risk would be for net interest income to increase/decrease no more than 20% given a change in selected interest rates of 200 basis points over any 24-month period.

Liquidity management involves the matching of the cash flow requirements of customers, who may be either depositors desiring to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs, and the ability of Ameris to manage those requirements. The Company strives to maintain an adequate liquidity position by managing the balances and maturities of interest-earning assets and interest-bearing liabilities so that the balance it has in short-term assets at any given time will adequately cover any reasonably anticipated immediate need for funds. Additionally, the Bank maintains relationships with correspondent banks, which could provide funds on short notice, if needed. The Company has invested in FHLB stock for the purpose of establishing credit lines with the FHLB. The credit availability to the Bank is equal to 30% of the Bank’s total assets as reported on the most recent quarterly financial information submitted to the regulators subject to the pledging of sufficient collateral. At June 30, 2022 and December 31, 2021, the net carrying value of the Company’s other borrowings was $425.6 million and $739.9 million, respectively.

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

	June 30,<br>2022	March 31,<br>2022	December 31,<br>2021	September 30,<br>2021	June 30,<br>2021
Investment securities available-for-sale to total deposits	5.35%	2.96%	3.01%	3.63%	4.26%
Loans (net of unearned income) to total deposits	89.21%	82.41%	80.72%	78.71%	80.96%
Interest-earning assets to total assets	89.88%	90.43%	90.56%	91.20%	90.79%
Interest-bearing deposits to total deposits	58.02%	59.82%	60.46%	59.56%	61.75%

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 June 30, 2022 were considered satisfactory. The Company is aware of no events or trends likely to result in a material change in liquidity.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

The Company also had forward contracts and IRLCs to economically hedge changes in the value of the mortgage inventory due to changes in market interest rates. The fair value of these instruments amounted to an asset of approximately $10.1 million and $11.9 million at June 30, 2022 and December 31, 2021, respectively, and a liability of $0 and $710,000 at June 30, 2022 and December 31, 2021, respectively.

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

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

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

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

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

Item 4. Controls and Procedures.

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

During the quarter ended June 30, 2022, 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.

Item 1. Legal Proceedings.

Disclosure concerning legal proceedings can be found in Part I - "Financial Information, Item 1. Financial Statements, Notes to Unaudited Consolidated Financial Statements, Note 9 – Commitments and Contingencies" under the caption, "Litigation and Regulatory Contingencies," which is incorporated herein by reference.

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, 2021.

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

c) Issuer Purchases of Equity Securities.

The table below sets forth information regarding the Company’s repurchase of shares of its outstanding common stock during the three-month period ended June 30, 2022.

Period	Total<br><br>Number of<br><br>Shares<br><br>Purchased	Average Price<br>Paid Per Share		Total Number<br>of Shares<br>Purchased as<br>Part of Publicly<br>Announced<br>Plans or<br>Programs	Approximate<br><br>Dollar Value of<br><br>Shares That<br><br>May Yet be<br><br>Purchased<br><br>Under the Plans<br><br>or Programs(1)
April 1, 2022 through April 30, 2022	—	$	—	—	$	63,310,664
May 1, 2022 through May 31, 2022	118,157	$	42.72	118,157	$	58,262,530
June 1, 2022 through June 30, 2022	—	$	—	—	$	58,262,530
Total	118,157	$	—	118,157	$	58,262,530

(1)On September 19, 2019, the Company announced that its Board of Directors authorized the Company to repurchase up to $100.0 million of its outstanding common stock through October 31, 2020.  On October 22, 2020 and again on October 28, 2021, the Company announced that its Board of Directors had approved the extension of the share repurchase program for an additional year in each instance. As a result, the Company is currently authorized to engage in repurchases through October 31, 2022. Repurchases of shares must be made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases will be based on a variety of factors, including share acquisition price, regulatory limitations and other market and economic factors. The program does not require the Company to repurchase any specific number of shares. As of June 30, 2022, $41.7 million, or 952,910 shares of the Company's common stock, had been repurchased under the program.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit<br>Number	Description
3.1	Articles of Incorporation of Ameris Bancorp, as amended (incorporated by reference to Exhibit 2.1 to Ameris Bancorp’s Regulation A Offering Statement on Form 1-A filed with the SEC on August 14, 1987).
3.2	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	Articles of Amendment to the Articles of Incorporation of Ameris Bancorp (incorporated by reference to Exhibit 3.7 to Ameris Bancorp's Quarterly Report on Form 10-Q filed with the SEC on August 10, 2020).
3.8	Bylaws of Ameris Bancorp, as amended and restated through June 11, 2020 (incorporated by reference to Exhibit 3.8 to Ameris Bancorp's Quarterly Report on Form 10-Q filed with the SEC on August 10, 2020).
10.1*	Ameris Bancorp 2021 Omnibus Equity Incentive Plan, as amended and restated through July 26, 2022.
10.2*	Summary of Director Compensation.
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Financial Officer.
32.1	Section 1350 Certification by the Company’s Chief Executive Officer.
32.2	Section 1350 Certification by the Company’s Chief Financial Officer.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

* Management contract or a compensatory plan or arrangement.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: August 5, 2022	AMERIS BANCORP
	/s/ Nicole S. Stokes
	Nicole S. Stokes
	Chief Financial Officer<br>(duly authorized signatory and principal accounting and financial officer)

61

Document

Exhibit 10.1

AMERIS BANCORP

2021 OMNIBUS EQUITY INCENTIVE PLAN

(As Amended and Restated Through July 26, 2022)

SECTION 1.    PURPOSE

The purpose of the Ameris Bancorp 2021 Omnibus Equity Incentive Plan (this “Plan”) is to promote the interests of Ameris Bancorp, a Georgia corporation (the “Company”), and its shareholders by providing Employees and Non-Employee Directors with the opportunity to receive grants of Options, Stock Appreciation Rights, Restricted Shares, Restricted Share Units, Performance Shares, Performance Units, Performance Awards and Other Stock-Based Awards under this Plan. The Company believes that this Plan will encourage Participants to contribute materially to the long-term growth and financial success of the Company, thereby benefiting the Company’s shareholders, and will align the economic interests of Participants with those of the Company’s shareholders.

SECTION 2.     DEFINITIONS

As used in this Plan, the following terms have the meanings set forth below:

(a)“Affiliate” means: (i) any entity that, directly or indirectly, is controlled by the Company; (ii) any entity in which the Company has a significant equity interest; (iii) any affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act; and (iv) any entity in which the Company or its Subsidiaries own at least twenty percent (20%) of the combined voting power of the entity’s outstanding voting securities, in each case as designated by the Committee as being a participating employer in this Plan.

(b)“Award” means any grant under this Plan of an Option, Stock Appreciation Right, Restricted Share, Restricted Share Unit, Performance Share, Performance Unit, Performance Award or Other Stock-Based Award, whether singly, in combination or in tandem, to a Participant by the Committee (or the Board) pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee (or the Board) may establish.

(c)“Award Agreement” means any agreement, contract or other instrument or document evidencing any Award, which may be in writing or via an electronic mail or web-based transmission or portal, and which may, but need not, be executed or acknowledged by the applicable Participant.

(d)“Board” means the board of directors of the Company.

(e)“Change in Control” means any one of the following events which may occur after the date the Award is granted:

(i)the acquisition by any person or persons acting in concert of the then outstanding voting securities of the Company, if, after the transaction, the acquiring person (or persons) owns, controls or holds with power to vote thirty percent (30%) or more of any class of voting securities of the Company;

(ii)within any twelve-month period the persons who were directors of the Company immediately before the beginning of such twelve-month period (the “Incumbent Directors”) shall cease to constitute at least a majority of such board of directors; provided, however, that any director who was not a director as of the beginning of such twelve-month period shall be deemed to be an Incumbent Director if that director was elected to such board of directors by, or on the recommendation of or with the approval of, at least two-thirds of the

directors who then qualified as Incumbent Directors; and provided, further, that no director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors shall be deemed to be an Incumbent Director;

(iii)a reorganization, merger or consolidation, with respect to which (A) persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting power entitled to vote in the election of directors of the reorganized, merged or consolidated company’s then outstanding voting securities; or (B) persons who were directors of the Company at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger or consolidation constitute less than a majority of the members of the board of directors (or equivalent governing body) of the reorganized, merged or consolidated company resulting from such reorganization, merger or consolidation;

(iv)the sale, transfer or assignment of all or substantially all of the assets of the Company and its Subsidiaries to any third party; or

(v)approval by the Company’s shareholders of a complete liquidation or dissolution of the Company.

Notwithstanding the foregoing, (i) unless otherwise provided in an applicable Award Agreement, solely for purposes of determining the timing of any payment pursuant to any Award constituting a “deferral of compensation” subject to Section 409A of the Code, a Change in Control shall mean a “change in the ownership of the Company,” a “change in the effective control of the Company,” or a “change in the ownership of a substantial portion of the assets of the Company” as such terms are defined in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations; and (ii) no Award Agreement shall define a Change in Control in such a manner that a Change in Control would be deemed to occur prior to the actual consummation of the event or transaction said to result in a change of control of the Company (e.g., upon the announcement, commencement or shareholder approval of any event or transaction that, if completed, would result in a change of control of the Company).

(f)“Code” means the Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulation thereunder and any successor or similar provision.

(g)“Committee” means the Compensation Committee of the Board or a subcommittee thereof, or any other committee, in each case, as designated by the Board to administer this Plan. The Committee shall be composed of no fewer than two Non-Employee Directors, each of whom shall be a “Non-Employee Director” for purposes of Section 16 of the Exchange Act and Rule 16b-3 thereunder. The members of the Committee shall be appointed from time to time and shall serve at the discretion of the Board. If the Committee does not exist or cannot function for any reason, the Board may take any action under this Plan that would otherwise be the responsibility of the Committee.

(h)“Company” has the meaning given thereto in Section 1 of this Plan.

(i)“Director” means a member of the Board.

(j)“Disability,” with respect to any Participant, has the same meaning as provided in the long-term disability plan or policy maintained or, if applicable, most recently maintained, by the Company or any Subsidiary or Affiliate for the Participant. If no long-term disability plan or policy was ever maintained on behalf of the Participant, then Disability shall mean that condition described in Section 22(e)(3) of the Code, as amended from time to time. In the event of a

dispute, the determination of Disability shall be made by the Board and shall be supported by advice of a physician competent in the area to which such Disability relates.

(k)“Effective Date” has the meaning given thereto in Section 16.1 of this Plan.

(l)“Employee” means any individual designated as an employee of the Employer (including an officer or director who is designated as an employee). An Employee shall not include any individual during any period such individual is classified or treated by the Company or any Subsidiary or Affiliate as an independent contractor, a consultant or an employee of an employment, consulting or temporary agency or any other entity other than the Company or any Subsidiary or Affiliate, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as, by the Internal Revenue Service or any government agency or court, a common-law employee of the Company or any Subsidiary or Affiliate during such period.

(m)“Employer” means the Company or any Subsidiary or Affiliate.

(n)“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.

(o)“Fair Market Value” with respect to the Shares, means, for purposes of a grant of an Award as of any date: (i) the closing sales price of the Shares on the Nasdaq Global Select Market, or any other such securities exchange on which the Shares are traded, on such date, or in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported; or (ii) in the event there is no public market for the Shares on such date, the fair market value as determined, in good faith, by the Committee in its sole discretion; and for purposes of a sale of a Share as of any date, the actual sales price on that date. Notwithstanding the foregoing, if the Committee determines in its discretion that an alternative definition of Fair Market Value should be used in connection with the grant, exercise, vesting, settlement or payout of any Award, then the Committee may specify such alternative definition in the Award Agreement applicable to the Award. Such alternative definition may include a price that is based on the opening, actual, high, low or average selling prices of a Share on the Nasdaq Global Select Market or other securities exchange on a given date, the trading date preceding a given date, the trading date next succeeding a given date or an average of trading days.

(p)“Full-Value Award” means an Award, other than an Option or SAR, and which is to be settled by the issuance of Shares.

(q)“Grant Price” has the meaning given thereto in Section 6.1 of this Plan.

(r)“Incentive Stock Option” means an option to purchase Shares from the Company that is granted under Section 6 of this Plan and that is intended to meet the requirements of Section 422 of the Code.

(s)“Non-Employee Director” means a member of the Board who is not an Employee.

(t)“Non-Qualified Stock Option” means an option to purchase Shares from the Company that is granted under Sections 6 or 10 of this Plan and is not intended to be an Incentive Stock Option.

(u)“Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

(v)“Option Price” means the purchase price payable to purchase one Share upon the exercise of an Option.

(w)“Other Stock-Based Award” means any Award granted under Sections 9 or 10 of this Plan.

(x)“Participant” means any eligible individual as set forth in Section 5 of this Plan to whom an Award is granted.

(y)“Performance Award” means any Award granted under Sections 8 or 10 of this Plan.

(z)“Performance Goals” means the performance goals established by the Committee in connection with the grant of Awards, which may be based on the attainment of specified levels of one or more of the following measures or any such other measures as the Committee determines: earnings, earnings growth, earnings per share, stock price (including growth measures and total shareholder return), internal rate of return, market share, cash flow, net income, adjusted net income, operating income, operating margin, net profit after tax, EBIT, EBITDA, gross profit, operating profit, revenues, asset quality, return on equity, return on tangible common equity, return on assets, return on operating assets, cost saving levels, efficiency ratio, adjusted efficiency ratio, return on capital or shareholder return. Performance Goals may be particular to a Participant or the department, branch, Subsidiary, Affiliate or division in which the Participant works, or may be based on the performance of the Company and/or one or more Subsidiaries and Affiliates of the Company, or a particular line of business, and may, but need not be, based upon a change or an increase or positive result, and shall cover such period as the Committee may specify, subject to Section 5.3 of this Plan. Performance Goals may include or exclude extraordinary items of income, gain or loss, extraordinary charges or expenses, losses from discontinued operations, restatements and accounting changes, changes in tax laws, and other unplanned special charges such as restructuring expenses, acquisitions, acquisition expenses, including expenses related to goodwill and other intangible assets, stock offerings, stock repurchases and loan loss provisions, or any other items that the Committee deems appropriate.

(aa)“Performance Share” means any Share granted under Sections 8 or 10 of this Plan.

(bb)    “Performance Unit” means a right granted under Section 8 or 10 of this Plan to receive a designated dollar value or number of Shares which is contingent on the achievement of certain Performance Goals during a specified performance period each as set forth in an Award Agreement.

(cc)    “Person” means any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.

(dd)    “Plan” means this Ameris Bancorp 2021 Omnibus Equity Incentive Plan, as amended from time to time.

(ee)    “Prior Plan” means the Ameris Bancorp 2014 Omnibus Equity Compensation Plan.

(ff)    “Restricted Share” means any Share granted under Sections 7 or 10 of this Plan.

(gg)    “Restricted Share Unit” means any unit granted under Sections 7 or 10 of this Plan.

(hh)    “Retirement” means, unless otherwise defined in the applicable Award Agreement, retirement of a Participant from the employ or service of the Company or any

Subsidiary or Affiliate in accordance with the terms of the applicable Company retirement plan or, if a Participant is not covered by any such plan, retirement on or after such Participant’s 65th birthday.

(ii)    “SEC” means the Securities and Exchange Commission or any successor thereto.

(jj)    “Section 16” means Section 16 of the Exchange Act and the rules promulgated thereunder.

(kk)    “Share Authorization” means the maximum number of Shares available for issuance to Participants under this Plan as set forth in Section 4.1 of this Plan.

(ll)    “Shares” means shares of the common stock, $1.00 par value, of the Company.

(mm)    “Stock Appreciation Right” or “SAR” means a stock appreciation right granted under Sections 6 or 10 of this Plan that entitles the holder to receive, with respect to each Share encompassed by the exercise of such SAR, the amount, in cash or Shares (or a combination thereof), determined by the Committee and specified in an Award Agreement. In the absence of such a determination, the holder shall be entitled to receive, with respect to each Share encompassed by the exercise of such SAR, the excess of the Fair Market Value of a Share on the date of exercise over the Fair Market Value of a Share on the date of grant.

(nn)    “Subsidiary” means any Person (other than the Company) of which a majority of its voting power or its equity securities or equity interest is owned directly or indirectly by the Company.

(oo)    “Substitute Awards” means Awards granted solely in assumption of, or in substitution for, outstanding awards previously granted by a Person acquired (directly or indirectly) by the Company or with which the Company or any Subsidiary of the Company combines, or any Subsidiary of such Person or of the Company, as the case may be.

(pp)    “Tandem SAR” means a Stock Appreciation Right that is granted under Sections 6 or 10 of this Plan in relation to a particular Option and that can be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to which the SAR relates.

(qq)    “Termination of Service” means the termination of the service relationship, whether employment or otherwise, between a Participant and the Company or any Subsidiary or Affiliate, regardless of the fact that severance or similar payments are made to the Participant for any reason, including, but not limited to, a termination by resignation, discharge, death, Disability or Retirement. The Committee shall, in its absolute discretion, determine the effect of all matters and questions relating to a Termination of Service, including, but not limited to, the question of whether a leave of absence constitutes a Termination of Service, or whether a Termination of Service is for cause. Unless otherwise provided in an applicable Award Agreement, with respect to Awards constituting a “deferral of compensation” subject to Section 409A of the Code, a “Termination of Service” shall have occurred only if the event constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the U.S. Treasury Regulations.

(rr)    “2021 Non-Employee Director Awards” has the meaning given thereto in Section 4.1(c) of this Plan.

SECTION 3.     ADMINISTRATION

(a)Authority of Committee.

(a)This Plan shall be administered by the Committee.

(b)Subject to the terms of this Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by this Plan, the Committee shall have full power and authority in its discretion to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with Awards; (iv) determine the timing, terms and conditions of any Award; (v) establish any objectives and conditions for earning Awards, including, but not limited to, any Performance Goals; (vi) accelerate the time at which all or any part of an Award may vest or may be settled or exercised; (vii) determine whether, to what extent and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; (viii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (ix) interpret and administer this Plan and any instrument or agreement relating to this Plan or an Award; (x) except to the extent prohibited by Section 14.2, amend or modify the terms of any Award at or after grant with the consent of the holder of the Award; (xi) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of this Plan; and (xii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of this Plan, subject to the exclusive authority of the Board under Section 14 hereof to amend or terminate this Plan. Notwithstanding the provisions of this Section 3.1(b), and except as permitted by the provisions of Section 4.4 hereof or in connection with a Change in Control event, the Committee shall not have the power to, without the prior approval of the Company’s shareholders: (i) amend the terms of previously granted Options or SARs to reduce the Option Price or Grant Price, as applicable, of such Options or SARs; or (ii) cancel such Options or SARs in exchange for (a) cash if on the date of such cancellation the Fair Market Value of one Share is less than the Option Price or Grant Price, as applicable, of the cancelled Options or SARs, or (b) other Awards, Options or SARs with a lower Option Price or Grant Price, as applicable, than the cancelled Options or SARs.

3.2Committee Discretion Binding. Unless otherwise expressly provided in this Plan, all designations, determinations, interpretations and other decisions under or with respect to this Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon all Persons, including the Company, any Subsidiary or Affiliate, any Participant and any holder or beneficiary of any Award.

3.3Action by the Committee. The Committee shall select one of its members as its Chairperson (unless it otherwise has a Chairperson pursuant to a committee charter or otherwise) and shall hold its meetings at such times and places and in such manner as it may determine. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by not less than a majority of its members. Any decision or determination reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may make such rules and regulations for the conduct of its business as it shall deem advisable.

3.4Delegation. Subject to the terms of this Plan and applicable law, the Committee may delegate to one or more officers of the Company or of any Subsidiary or Affiliate, or to a committee of such officers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify or waive rights with respect to, or to alter, discontinue, suspend or terminate Awards held by, Participants who are not officers or Directors of the Company for purposes of Section 16 or who are otherwise not subject to such section.

3.5Indemnification. No member of the Board or the Committee shall be liable for any action taken or determination made in good faith with respect to this Plan or any Award granted hereunder. Subject to requirements of Georgia law, each individual who is or shall have been a member of the Board, or a committee appointed by the Board, or an officer to whom authority was delegated in accordance with Section 3.4 of this Plan, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by the Participant in connection with or resulting from any claim, action, suit or proceeding to which the Participant may be a party or in which the Participant may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by the Participant in settlement thereof, with the Company’s approval, or paid by the Participant in satisfaction of any judgment in any such action, suit or proceeding against the Participant, provided the Participant shall give the Company an opportunity, at its own expense, to handle and defend the same before the Participant undertakes to handle and defend it on the Participant’s own behalf, unless such loss, cost, liability or expense is a result of the Participant’s own willful misconduct or except as expressly provided by statute. This right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s articles of incorporation or bylaws, as a matter of law or otherwise, or any power that the Company or any Subsidiary or Affiliate may have to indemnify them or hold them harmless.

SECTION 4.     SHARES AVAILABLE FOR AWARDS

4.1Shares Available.

(a)Subject to the remaining provisions of this Section 4, the stock to be subject to Awards under this Plan shall be Shares and the maximum number of Shares with respect to which Awards may be granted under this Plan (the “Share Authorization”) shall be: (i) 2,500,000 Shares, plus (ii) the number of Shares remaining available for grant under the Prior Plan as of the Effective Date (less the number of Shares subject to the 2021 Non-Employee Director Awards), plus (iii) the number of Shares subject to outstanding awards under the Prior Plan as of the Effective Date, that, after the Effective Date, cease to be outstanding other than by reason of their having been exercised for, or settled in, vested and nonforfeitable Shares.

(b)The maximum number of Shares of the Share Authorization that may be issued pursuant to Incentive Stock Options shall be 2,500,000.

(c)After the Effective Date, no new awards may be granted under the Prior Plan, except for awards of restricted Shares having an aggregate grant date value of approximately $715,000, to be granted no later than June 30, 2021 to the Non-Employee Directors elected at the Company’s 2021 Annual Meeting of Shareholders as the annual equity retainer for their service (the “2021 Non-Employee Director Awards”). Awards outstanding under the Prior Plan as of the Effective Date shall remain in full force and effect under the Prior Plan according to their respective terms, including, but not limited to, any such terms which may provide for, or result in, the issuance of additional Shares after the Effective Date.

4.2Substitute Awards. Substitute Awards shall not reduce the Shares authorized for grant under this Plan, nor shall Shares subject to a Substitute Award again be available for Awards under this Plan to the extent of any termination of the Substitute Award by expiration, forfeiture, cancellation, cash settlement or otherwise without the issuance of such Shares. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under this Plan and shall not reduce the Shares authorized for grant under this Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Participants prior to such acquisition or combination.

4.3Share Usage. Shares covered by a Full-Value Award shall only be counted as used for purposes of this Plan to the extent they are actually issued. Any Shares related to Full-Value Awards which terminate by expiration, forfeiture, cancellation or otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for Awards not involving Shares, shall be available again for grant under this Plan and shall not count against the Share Authorization. The full number of Options and SARs granted that are to be settled by the issuance of Shares shall be counted against the Share Authorization, regardless of the number of Shares actually issued upon exercise or settlement of such Options or SARs. Further, (i) any Shares withheld to satisfy tax withholding obligations on Full-Value Awards shall be available again for grant under this Plan and shall not count against the Share Authorization, but (ii) any Shares withheld to satisfy tax withholding obligations on Options or SARs, Shares tendered to pay the Option Price of Options and Shares repurchased on the open market with the proceeds of an Option exercise will no longer be eligible to be returned as available Shares under this Plan.

4.4Adjustments. In the event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares, then the Committee shall in an equitable and proportionate manner (and, as applicable, in such manner as is consistent with Sections 409A and 422 of the Code and the regulations thereunder): (i) adjust (a) the aggregate number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under this Plan, (b) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards under this Plan, (c) the grant or exercise price with respect to any Award under this Plan, provided that the number of shares subject to any Award shall always be a whole number, and (d) the terms and conditions of any outstanding Awards (including, without limitation, any applicable Performance Goals with respect thereto); (ii) provide for an equivalent award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a similar effect; or (iii) make provision for a cash payment to the holder of an outstanding Award.

4.5Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or treasury Shares.

SECTION 5.     ELIGIBILITY

5.1    Eligibility. Individuals eligible to participate in this Plan include all Employees and Non-Employee Directors.

5.2    Actual Participation. Subject to the provisions of this Plan, the Committee may, from time to time in its sole discretion, select from the individuals eligible to participate, those to whom Awards shall be granted.

5.3    Minimum Vesting Requirements. Notwithstanding any other provision of this Plan to the contrary, Awards (other than cash-based Awards) shall vest no earlier than the first anniversary of the date on which the Award is granted; provided, that the following Awards shall not be subject to the foregoing minimum vesting requirement: (i) any Substitute Awards; (ii) Shares delivered in lieu of fully vested cash obligations; (iii) Awards to Non-Employee Directors that vest on the earlier of the one-year anniversary of the date of grant and the next annual meeting of shareholders which is at least eleven (11) months after the immediately preceding year’s annual meeting of shareholders; and (iv) any additional Awards the Committee may grant, up to a maximum of five percent (5%) of the Share Authorization (subject to adjustment under Section 4.4 hereof); and, provided, further, that the foregoing restriction does not apply to the Committee’s discretion to provide for accelerated exercisability or vesting of any Award, including in cases of Retirement, death, Disability or a Change in Control, in the terms of the Award Agreement or otherwise.

SECTION 6.     OPTIONS AND STOCK APPRECIATION RIGHTS

6.1Grant. Subject to the provisions of this Plan, the Committee shall have sole and complete authority to determine the Participants to whom Options and SARs shall be granted, the number of Shares, if any, subject to each Award, the Option Price of an Option or the price at which a Stock Appreciation Right shall be granted (the “Grant Price”) and the conditions and limitations applicable to the exercise of each Option and SAR. An Option may be granted with or without a Tandem SAR, and a Stock Appreciation Right may be granted with or without a related Option. The Committee shall have the authority to grant Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant both types of Options. In the case of Incentive Stock Options or Tandem SARs related to such Options, the terms and conditions of such grants shall be subject to and comply with such rules as may be prescribed by Section 422 of the Code. A Participant who has been granted an Option or SAR may be granted additional Options or SARs if the Committee shall so determine; provided, however, that to the extent the aggregate Fair Market Value (determined at the time the Incentive Stock Option or Tandem SAR related thereto is granted) of the Shares with respect to which all Incentive Stock Options or Tandem SARs related to such Option are exercisable for the first time by an Employee during any calendar year (under all plans of the Company described in subsection (d) of Section 422 of the Code) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options.

6.2Price.

(a)The Committee in its sole discretion shall establish the Option Price at the time each Option is granted, which price shall be set forth in an Award Agreement. Except in the case of Substitute Awards, the Option Price of an Option may not be less than one hundred percent (100%) of the Fair Market Value of the Shares with respect to which the Option is granted on the date of grant of such Option.

(b)The Committee in its sole discretion shall establish the Grant Price at the time each SAR is granted, which price shall be set forth in an Award Agreement. Except in the case of Substitute Awards (and subject to Section 6.5 hereof in the case of the grant of an Incentive

Stock Option under certain circumstances), the Grant Price of a Stock Appreciation Right may not be less than one hundred percent (100%) of the Fair Market Value of the Shares with respect to which the SAR is granted on the date of grant of such SAR.

6.3Term. Subject to the Committee’s authority under Section 3.1 hereof and the provisions of Section 6.5 hereof, each Option and SAR and all rights and obligations thereunder shall expire on the date determined by the Committee and specified in the Award Agreement. The Committee shall be under no duty to provide terms of like duration for Options or SARs granted under this Plan. Subject to the following sentence, no Option or SAR shall be exercisable after the expiration of ten (10) years from the date such Option or SAR was granted. An Award Agreement may provide, or be amended to provide, that the period of time over which an Option or SAR, other than an Incentive Stock Option, may be exercised shall be automatically extended if: (i) on the last day of the term of such Option or SAR the Fair Market Value of one Share exceeds the Option Price or Grant Price, as applicable, of such Option or SAR, and (ii) the Participant’s exercise of such Award would violate applicable securities law; provided, that during the extended exercise period, such Option or SAR may be exercised only to the extent such Award was exercisable in accordance with its terms immediately prior to such scheduled expiration date, and such extended exercise period shall end not later than thirty (30) days after the exercise of such Option or SAR first would no longer violate such laws.

6.4Exercise.

(a)Each Option and SAR shall be exercisable at such times and subject to such terms and conditions as the Committee may, in its sole discretion, specify in the applicable Award Agreement or thereafter. The Committee shall have full and complete authority to determine, subject to Section 6.5 hereof, whether an Option or SAR will be exercisable in full at any time or from time to time during the term of the Option or SAR, or to provide for the exercise thereof in such installments, upon the occurrence of such events and at such times during the term of the Option or SAR as the Committee may determine.

(b)The Committee may impose such conditions with respect to the exercise of Options or SARs, including, but not limited to, any relating to the application of federal, state or foreign securities laws or the Code, as it may deem necessary or advisable. The exercise of any Option granted hereunder shall be effective only at such time as the purchase of Shares pursuant to such exercise will not violate any state or federal securities or other laws.

(c)An Option, or SAR exercisable for Shares, may be exercised in whole or in part at any time, with respect to whole Shares only, within the period permitted thereunder for the exercise thereof, and shall be exercised by written notice of intent to exercise the Option or SAR, delivered to the Company at its principal office, and payment in full to the Company at the direction of the Committee of the amount of the Option Price, in the case of an Option, for the number of Shares with respect to which the Option is then being exercised. A Tandem SAR may be exercised only to the extent that the related Option is exercisable and only when the Fair Market Value exceeds the Option Price of the related Option. The exercise of either an Option or Tandem SAR shall result in the termination of the other to the extent of the number of Shares with respect to which either the Option or Tandem SAR is exercised.

(d)Payment of the Option Price shall be made in cash or cash equivalents, or, at the discretion of the Committee, (i) in whole Shares valued at the Fair Market Value of such Shares on the date of exercise (or next succeeding trading date, if the date of exercise is not a trading date), together with any applicable withholding taxes, or (ii) by a combination of such cash (or cash equivalents) and such Shares. Subject to applicable securities laws and at the sole discretion of the Committee (which may be granted or retracted at any time), an Option may also be exercised (i) by delivering a notice of exercise of the Option and simultaneously selling the

Shares thereby acquired, pursuant to a brokerage or similar agreement approved in advance by proper officers of the Company, using the proceeds of such sale as payment of the Option Price, together with the amount of any applicable withholding taxes, or (ii) by the Company withholding from the Participant sufficient Shares having an aggregate Fair Market Value at the time of exercise equal to the total Option Price of such underlying Award and the amount of any applicable withholding taxes. Until the Participant has been issued the Shares subject to such exercise, the Participant shall possess no rights as a shareholder with respect to such Shares.

(e)A SAR may be exercised in whole or in part at any time after such SAR has become exercisable in accordance with the terms of the applicable Award Agreement; provided, however, that no partial exercise of a SAR exercisable for cash shall result in the cash payment to the Participant of less than $250. The partial exercise of a SAR shall not cause the expiration, termination or cancellation of the remaining portion thereof. Upon the partial exercise of a SAR, the Award Agreement evidencing such SAR, marked with such notations as the Committee may deem appropriate to evidence such partial exercise, shall be returned to the Participant exercising such SAR, together with the payment described in Sections 6.4(c) or 6.4(f) hereof, as the case may be.

(f)The exercise of a SAR exercisable for cash shall entitle a Participant to a cash payment, for each such SAR exercised, equal to an amount determined by the Committee and as set forth in an Award Agreement. Unless otherwise determined by the Committee and set forth in an Award Agreement, the exercise of a SAR exercisable for cash shall entitle a Participant to a cash payment, for each such SAR exercised, equal in amount to the excess of (i) the Fair Market Value of a Share on the exercise date, over (ii) the Grant Price of the SAR as reflected in the applicable Award Agreement. All payments under this Section 6.4(f) shall be made as soon as practicable, but in no event later than ten (10) business days, after the effective date of the exercise of the SAR.

(g)Notwithstanding the foregoing, an Award Agreement may provide, or be amended to provide, that if on the last day of the term of an Option or SAR the Fair Market Value of one Share exceeds the Option Price (or Grant Price, if applicable) per Share, the Participant has not exercised the Award and the Award has not expired, the Award shall be deemed to have been exercised by the Participant on such day with any Option payment made by withholding Shares otherwise issuable in connection with the exercise of the Option. In such event, the Company shall deliver to the Participant the number of Shares for which the Option or SAR was deemed exercised, less the number of Shares required to be withheld for the payment of the total Option Price and required withholding taxes. Notwithstanding the foregoing, no such Share withholding shall be made if and to the extent the Participant makes a cash payment to the Company in respect of all or a portion of the total Option Price or required withholding taxes.

6.5Ten Percent (10%) Stock Rule. Notwithstanding any other provisions in this Plan, if at the time an Option or SAR is otherwise to be granted pursuant to this Plan the Participant owns directly or indirectly (within the meaning of Section 424(d) of the Code) Shares of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its parent or any Subsidiary or Affiliate (within the meaning of Section 422(b)(6) of the Code), then any Incentive Stock Option or Tandem SAR to be granted to such Participant pursuant to this Plan shall satisfy the requirement of Section 422(c)(5) of the Code, and the Option Price shall be not less than one hundred ten percent (110%) of the Fair Market Value of the Shares of the Company, and such Option by its terms shall not be exercisable after the expiration of five (5) years from the date such Option is granted.

SECTION 7.     RESTRICTED SHARES AND RESTRICTED SHARE UNITS

7.1Grant.

(a)Subject to the provisions of this Plan, the Committee shall have sole and complete authority to determine the Participants to whom Restricted Shares and Restricted Share Units shall be granted, the number of Restricted Shares and/or the number of Restricted Share Units to be granted to each Participant, the duration of the period during which, and the conditions under which, the Restricted Shares and Restricted Share Units may be forfeited to the Company, and the other terms and conditions of such Awards. Awards of Restricted Shares and Restricted Share Units shall be evidenced by Award Agreements in such form as the Committee shall from time to time approve, which agreements shall comply with and be subject to the terms and conditions provided hereunder and any additional terms and conditions established by the Committee that are consistent with the terms of this Plan.

(b)Each Award of Restricted Shares or Restricted Share Units shall be for such number of Shares as shall be determined by the Committee and set forth in the Award Agreement containing the terms of such Award. Such Award Agreement shall set forth a period of time during which the grantee must remain in continuous employment with, or service to, the Company or a Subsidiary or Affiliate in order for the forfeiture and transfer restrictions to lapse. If the Committee so determines, then the restrictions may lapse during such restricted period in installments with respect to specified portions of the Shares covered by the Award. The Award Agreement may also, in the discretion of the Committee, set forth performance or other conditions that will subject the Shares to forfeiture and transfer restrictions. The Committee may, at its discretion, waive all or any part of the restrictions applicable to any or all outstanding Awards of Restricted Shares and Restricted Share Units.

7.2Delivery of Shares and Transfer Restrictions. Each Award of Restricted Shares may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company or any custodian appointed by the Company for the account of the grantee subject to the terms and conditions of this Plan. Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring to the restrictions applicable to such Restricted Shares. The grantee shall have such rights with respect to the Restricted Shares as the Committee may determine in its discretion, subject to the following restrictions: (i) the grantee shall not be entitled to delivery of the stock certificate until the expiration of the restricted period and the fulfillment of any other restrictive conditions set forth in the Award Agreement with respect to such Shares; (ii) none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during such restricted period or until after the fulfillment of any such other restrictive conditions; (iii) the Committee shall determine whether and under what conditions during the restricted period the grantee shall have the right to vote such shares or, subject to Section 15.2 hereof, to receive dividends or whether such dividends on Restricted Shares shall be held in escrow; and (iv) except as determined by the Committee at or after grant, all of the Shares (and any escrowed dividends) shall be forfeited and all rights of the grantee to such shares (and any escrowed dividends) shall terminate, without further obligation on the part of the Company, upon a Termination of Service and unless any other restrictive conditions relating to such Award are met. Any Share, any other securities of the Company and any other property distributed with respect to the Shares subject to such Award shall be subject to the same restrictions, terms and conditions as such Restricted Shares.

7.3Termination of Restrictions. At the end of the restricted period and provided that any other restrictive conditions of the Award are met, or at such earlier time as otherwise determined by the Committee, all restrictions set forth in the Award Agreement relating to an

Award of Restricted Shares or in this Plan shall lapse as to the Restricted Shares subject thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and restricted stock legend, shall be delivered to the Participant or the Participant’s beneficiary or estate, as the case may be, or the appropriate book-entry registration shall be made. Except as otherwise determined by the Committee at or after grant: (i) Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of; and (ii) all Restricted Shares and all rights of the grantee to such Restricted Shares shall terminate, without further obligation on the part of the Company, upon a Termination of Service and unless any other restrictive conditions relating to such Award are met.

7.4Payment of Restricted Share Units. Each Restricted Share Unit shall have a value equal to the Fair Market Value of a Share. Restricted Share Units shall be paid in cash, Shares, other securities or other property, as determined in the sole discretion of the Committee, upon the lapse of the restrictions applicable thereto, or otherwise in accordance with the applicable Award Agreement. Except as otherwise determined by the Committee at or after grant: (i) Restricted Share Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of; and (ii) all Restricted Share Units and all rights of the grantee to such Restricted Share Units shall terminate, without further obligation on the part of the Company, upon a Termination of Service and unless any other restrictive conditions relating to the Restricted Share Unit Award are met.

SECTION 8.     PERFORMANCE AWARDS

8.1Grant. The Committee shall have sole and complete authority to determine the Participants who shall receive a Performance Award, which shall consist of a right that is (i) denominated in cash or Shares, (ii) valued, as determined by the Committee, in accordance with the achievement of such Performance Goals during such performance periods as the Committee shall establish and (iii) payable at such time and in such form as the Committee shall determine. Performance Awards shall include, but are not limited to, Awards of Performance Shares and Performance Units.

8.2Terms and Conditions. Subject to the terms of this Plan and any applicable Award Agreement, the Committee shall determine the Performance Goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award and the amount and kind of any payment or transfer to be made pursuant to any Performance Award, and may amend specific provisions of any Performance Award; provided, however, that such amendment may not materially and adversely affect existing Performance Awards made within a performance period commencing prior to implementation of the amendment.

8.3Payment of Performance Awards. Performance Awards may be paid in a lump sum or in installments following the close of the performance period or, in accordance with the procedures established by the Committee, on a deferred basis. A Participant’s rights to any Performance Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of in any manner, except by will or the laws of descent and distribution, and/or except as the Committee may determine at or after grant.

8.4Performance Shares. Subject to the provisions of this Plan, the Committee shall have sole and complete authority to determine the Participants to whom Awards of Performance Shares shall be granted, the number of Performance Shares to be granted to each Participant, the performance targets and goals to be satisfied, the duration of the period during which, and the conditions under which, the Performance Shares may be forfeited to the Company, and the other terms and conditions of such Awards. Awards of Performance Shares shall be evidenced by Award Agreements in such form as the Committee shall from time to time approve, which

Award Agreements shall comply with and be subject to the terms and conditions provided hereunder and any additional terms and conditions established by the Committee that are consistent with the terms of this Plan.

8.5Performance Units. Subject to the provisions of this Plan, the Committee shall have sole and complete authority to determine the Participants to whom Awards of Performance Units shall be granted, the amount of Performance Units to be granted to each Participant, the Performance Goals to be achieved during any performance period, the length of any performance period, the amount and kind of any payment or transfer to be made pursuant to such Awards, and the other terms and conditions of such Awards. Performance Units shall consist of a right that is (i) denominated in cash or shares, (ii) valued, as determined by the Committee, in accordance with the achievement of such Performance Goals during such performance periods as the Committee shall establish and (iii) payable at such time and in such form as the Committee shall determine. Awards of Performance Units shall be evidenced by Award Agreements in such form as the Committee shall from time to time approve, which Award Agreements shall comply with and be subject to the terms and conditions provided hereunder and any additional terms and conditions established by the Committee that are consistent with the terms of this Plan.

SECTION 9.     OTHER STOCK-BASED AWARDS

The Committee shall have the authority to determine the Participants who shall receive an Other Stock-Based Award, which shall consist of any right that is (i) not an Award described in Sections 6, 7 or 8 hereof and (ii) an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, but not limited to, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of this Plan. Subject to the terms of this Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such Other Stock-Based Award.

SECTION 10. NON-EMPLOYEE DIRECTOR AWARDS

10.1Non-Employee Director Compensation. The Committee may provide that all or a portion of a Non-Employee Director’s annual retainer, meeting fees and/or other awards or compensation as determined by the Board, be payable (either automatically or at the election of a Non-Employee Director) in the form of Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Shares, Restricted Share Units, Performance Shares, Performance Units and/or Other Stock-Based Awards. The Committee shall determine the terms and conditions of any such Awards, including the terms and conditions which shall apply upon a termination of the Non-Employee Director’s service as a member of the Board, and shall have full power and authority in its discretion to administer such Awards, subject to the terms of this Plan and applicable law.

10.2Maximum Non-Employee Director Awards. Notwithstanding anything in this Plan to the contrary, the maximum number of Shares subject to Awards granted during a single calendar year to any Non-Employee Director, taken together with any cash fees paid to such Non-Employee Director during such calendar year in respect of the Non-Employee Director’s service as a member of the Board during such calendar year, shall not exceed $500,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes and excluding, for this purpose, the value of any dividends or dividend equivalents paid in accordance with Section 15.2 hereof on certain Awards).

SECTION 11. TRANSFERABILITY OF AWARDS

11.1     Transferability. Except as provided in Section 11.2, (i) during a Participant’s lifetime, his or her Awards shall be exercisable only by the Participant, (ii) Awards shall not be transferable other than by will or the laws of descent and distribution and (iii) no Award shall be subject, in whole or in part, to attachment, execution or levy of any kind. Any purported transfer in violation of the provisions hereof shall be null and void. The Committee may establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable or Shares deliverable in the event of, or following, the Participant’s death may be provided.

11.2    Committee Action. The Committee may, in its discretion, determine that notwithstanding Section 11.1, any or all Awards (other than ISOs) shall be transferable to and exercisable by such transferees, and subject to such terms and conditions, as the Committee may deem appropriate; provided, however, that no Award may be transferred for value (as defined in the General Instructions to Form S-8).

SECTION 12. TERMINATION OF SERVICE

The Committee shall have the full power and authority to determine the terms and conditions that shall apply to any Award upon a Termination of Service, and may provide such terms and conditions in the Award Agreement or in such rules and regulations as it may prescribe at or after grant.

SECTION 13. CHANGE IN CONTROL

Notwithstanding any other provision of this Plan to the contrary, unless otherwise provided in the applicable Award Agreement, in the event of a Change in Control in which the surviving entity does not assume or otherwise equitably convert or substitute Awards in a manner approved by the Committee or the Board:

(a)any Options and SARs which are outstanding immediately prior to the effective date of such Change in Control, and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant; provided, however, that if the Fair Market Value of one Share on the effective date of the Change in Control is less than the Option Price or Grant Price, as applicable, of such Options or SARs, then such Options or SARs can be cancelled on such effective date without payment;

(b)the restrictions and deferral limitations applicable to any Restricted Shares shall lapse, and such Restricted Shares shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant;

(c)the restrictions and deferral limitations and other conditions applicable to any other Awards shall lapse, and such Awards shall become free of all restrictions, limitations and conditions and become fully vested and transferable to the full extent of the original grant; and

(d)any Performance Shares, Performance Units and Performance Awards that were outstanding immediately prior to effective date of the Change in Control shall be determined and deemed to have been earned as of the effective date of the Change in Control based upon: (i) an assumed achievement of all relevant Performance Goals at the “target” level, if the Change in Control occurs during the first half of the applicable performance period; or (ii) the actual level of achievement of all relevant Performance Goals against target (or target level of achievement if actual performance is not reasonably determinable), if the Change in Control occurs during the second half of the applicable performance period.

Notwithstanding the foregoing provisions of this Section 13, with respect to Awards that are assumed by the surviving entity in a Change in Control transaction, or are equitably converted or substituted in connection with a Change in Control, in either case in a manner approved by the Committee or the Board, unless otherwise provided in the applicable Award Agreement, the vesting of (or the lapse of restrictions applicable to) such Awards shall not be accelerated unless the Participant’s employment is terminated within two years following the effective date of such Change in Control either (i) by the surviving entity without cause or (ii) by the Participant for good reason. For purposes of this Section 13 and with regard to each such Award, a Participant shall not be considered to have been terminated without cause or to have resigned for good reason unless either (i) the Award Agreement includes such provision or (ii) the Participant is party to an employment, severance or similar agreement with the Company, any Subsidiary or Affiliate, or the surviving entity, as applicable, that includes provisions regarding termination without cause or resignation for good reason.

SECTION 14. AMENDMENT, MODIFICATION, SUSPENSION AND TERMINATION

14.1Amendment, Modification, Suspension and Termination. The Board may amend, alter, suspend, discontinue or terminate this Plan or any portion thereof at any time; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without approval of the Company’s shareholders if such approval is necessary to comply with any tax or regulatory requirement for which or with which the Board deems it necessary or desirable to comply.

14.2Awards Previously Granted. Subject to Sections 3.1 and 6.2 hereof, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted, prospectively or retroactively; provided, however, that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant or any holder of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant.

14.3Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, but not limited to, the events described in Section 4.4 hereof) affecting the Company, any Subsidiary or Affiliate, or the financial statements of the Company or any Subsidiary or Affiliate, or of changes in applicable laws, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan.

SECTION 15. GENERAL PROVISIONS

15.1Forfeiture Events.

(a)Awards under this Plan shall be subject to any compensation recoupment policy that the Company may adopt from time to time that is applicable by its terms to the Participant. In addition, the Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, termination of the Participant’s provision of services to the Company or any Subsidiary or Affiliate (including, but not limited to, termination for cause), violation of material policies of the Company or any Subsidiary or Affiliate, breach of confidentiality, noncompetition or other restrictive covenants that may apply to the Participant, or other conduct

by the Participant that may be deemed detrimental to the business or reputation of the Company or any Subsidiary or Affiliate.

(b)Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation or securities exchange listing requirement will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or securities exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or securities exchange listing requirement), and the Committee, in its sole and exclusive discretion, may require that any Participant reimburse the Company all or part of the amount of any payment in settlement of any Award granted hereunder.

15.2Dividends and Dividend Equivalents.

(a)Any Participant selected by the Committee may be granted dividends or dividend equivalents based on the dividends declared on Shares that are subject to any Full-Value Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Committee. The dividends or dividend equivalents with respect to such Awards shall be subject to such terms, conditions, limitations and/or restrictions as determined by the Committee, and shall in all cases be paid as and when determined by the Committee and in a manner that complies with the restrictions under Section 409A of the Code. Such dividend equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such limitations as may be determined by the Committee.

(b)Any dividend or dividend equivalents that are not paid currently shall be credited by the Company to an account for the Participant for purposes of this Plan and, as determined by the Committee, may be accrued as a cash obligation or may be converted to additional Shares for the Participant, and may accrue interest. The Committee may provide that dividend or dividend equivalents shall be payable based on the achievement of certain Performance Goals.

(c)No dividends or dividend equivalents shall be paid or accrued with respect to Options or SARs, except in connection with an adjustment pursuant to Section 4.4 hereof.

15.3No Rights to Awards. No Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards need not be the same with respect to each Participant.

15.4Share Certificates. All certificates for Shares or other securities of the Company or any Subsidiary or Affiliate delivered under this Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under this Plan or the rules, regulations and other requirements of the SEC or any state securities commission or regulatory authority, any securities exchange or other market upon which such Shares or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

15.5Withholding. A Participant may be required to pay to the Company or any Subsidiary or Affiliate, and the Company or any Subsidiary or Affiliate shall have the right and is hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under this Plan, or from any compensation or other amount owing to a Participant the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding or other taxes in respect of an Award, its exercise or any payment or transfer under

an Award or under this Plan, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. Any Shares used for such purposes shall be valued at the Fair Market Value of such Shares on the date the tax is to be determined. Taxes, if withheld, will be withheld at no more than the maximum statutory rate or such other rate as would be required to avoid adverse accounting treatment to the Company.

15.6Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement that shall be delivered to the Participant and may specify the terms and conditions of the Award and any rules applicable thereto. In the event of a conflict between the terms of this Plan and any Award Agreement, the terms of this Plan shall prevail.

15.7No Limit on Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of Options, SARs, Restricted Shares, Restricted Share Units, Performance Shares, Performance Units, Performance Awards or Other Stock-Based Awards.

15.8No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ or service of the Company or any Subsidiary or Affiliate. Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under this Plan, unless otherwise expressly provided in an Award Agreement.

15.9Compliance with Section 409A of the Code. Notwithstanding any other provisions of this Plan or any Award Agreement, it is intended that the provisions of this Plan and each Award Agreement comply with Section 409A of the Code, and that no Award shall be granted, deferred, accelerated, extended, paid out or modified under this Plan, or any Award Agreement interpreted, in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon a Participant. Any provision of this Plan that would cause the grant of an Award or the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, to the extent permitted by and in accordance with regulations and other guidance issued under Section 409A of the Code. To the extent that a payment under an Award constitutes a “deferral of compensation” payable to a “specified employee” on account of “separation from service,” as such terms are defined under Section 409A of the Code, such payment shall not be made earlier than six months following the date of the Participant’s Termination of Service (or if earlier, the Participant’s death). Payment of any Award intended to qualify as a “short term deferral” within the meaning of Section 1.409A-1(b)(4)(i) of the U.S. Treasury Regulations shall be made between the date on which the Award is no longer subject to a “substantial risk of forfeiture” and the last day of the “applicable 2 ½ month period,” as such terms are defined in such regulation. Notwithstanding the foregoing, each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed upon him or her, or in respect of any payment or benefit delivered in connection with this Plan (including any taxes and penalties under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold any Participant harmless from any or all such taxes or penalties.

15.10No Rights as Shareholder. Subject to the provisions of this Plan and the applicable Award Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a shareholder with respect to any Shares to be distributed under this Plan until such person has become a holder of such Shares. Notwithstanding the foregoing, in connection with each grant of Restricted Shares hereunder, the applicable Award Agreement shall specify if and to what extent the Participant shall not be entitled to the rights of a shareholder in respect of such Restricted Shares.

15.11Governing Law. The validity, construction and effect of this Plan and any rules and regulations relating to this Plan and any Award Agreement shall be determined in accordance with the laws of the State of Georgia without giving effect to conflicts of laws principles.

15.12Severability. If any provision of this Plan or any Award is, or becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify this Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of this Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of this Plan and any such Award shall remain in full force and effect.

15.13Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation (including applicable non-U.S. laws or regulations) or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.

15.14No Trust or Fund Created. Neither this Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary or Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary or Affiliate.

15.15No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

15.16Headings. Headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.

SECTION 16. TERM OF THIS PLAN

16.1Effective Date. This Plan shall be effective as of June 10, 2021, provided it has been approved by the Board and by the Company’s shareholders.

16.2Expiration Date. No new Awards shall be granted under this Plan after June 10, 2031. Unless otherwise expressly provided in this Plan or in an applicable Award Agreement, any Award granted hereunder may, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any conditions or rights under any such Award shall, continue after June 10, 2031.

19

Document

Exhibit 10.2

Summary of Director Compensation

of

Ameris Bancorp

Effective April 14, 2022

Directors who are employees of Ameris Bancorp (the “Company”) do not receive additional compensation for serving as directors of the Company. Compensation for the Company’s non-employee directors is comprised of the following components:

•Annual Cash Retainer — each non-employee director receives an annual cash retainer at a rate of $60,000 per year

•Annual Equity Retainer — each non-employee director receives an annual award of time-based restricted stock with a value of approximately $75,000, vesting on the earlier of (i) the one-year anniversary of the date of grant and (ii) the date of the Company’s next annual shareholders’ meeting

•Non-executive Chairman — receives an additional cash retainer of $80,000

•Lead Independent Director — receives an additional annual cash retainer of $45,000

•Committee Chair Retainer — the chair of each committee, if not an employee of the Company, receives an additional annual cash retainer at the rate set forth below:

◦Audit — $30,000 per year.

◦Compensation — $20,000 per year.

◦Corporate Governance and Nominating — $20,000 per year.

◦Enterprise Risk — $30,000 per year.

◦Executive — $10,000 per year.

◦Trust — $10,000 per year.

Community Boards — each non-employee director with membership on one of Ameris Bank’s community boards receives an additional monthly fee of $400, or $600 if serving as chair.

Cash retainers payable to non-employee directors are prorated in any year in which the board or committee chair appointment is not effective for the entirety of such year.

Document

Exhibit 31.1

CERTIFICATION

I, H. Palmer Proctor, Jr., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2022, of Ameris Bancorp;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---		3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
---	---		4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
---	---

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 5, 2022	/s/ H. Palmer Proctor, Jr.
	H. Palmer Proctor, Jr.
	Chief Executive Officer
	(principal executive officer)

Document

Exhibit 31.2

CERTIFICATION

I, Nicole S. Stokes, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2022, of Ameris Bancorp;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---		3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
---	---		4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
---	---

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 5, 2022	/s/ Nicole S. Stokes
	Nicole S. Stokes,<br>Chief Financial Officer
	(principal accounting and financial officer)

Document

Exhibit 32.1

SECTION 1350 CERTIFICATION

I, H. Palmer Proctor, Jr., Chief Executive Officer of Ameris Bancorp (the “Company”), do hereby certify, in accordance with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.	The Quarterly Report on Form 10-Q of the Company for the period ending June 30, 2022 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
---	---
Dated: August 5, 2022	/s/ H. Palmer Proctor, Jr.
---	---
	H. Palmer Proctor, Jr.,<br>Chief Executive Officer
	(principal executive officer)

Document

Exhibit 32.2

SECTION 1350 CERTIFICATION

I, Nicole S. Stokes, Executive Vice President and Chief Financial Officer of Ameris Bancorp (the “Company”), do hereby certify, in accordance with 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.	The Quarterly Report on Form 10-Q of the Company for the period ending June 30, 2022 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
---	---
Dated: August 5, 2022	/s/ Nicole S. Stokes
---	---
	Nicole S. Stokes,
	Chief Financial Officer
	(principal accounting and financial officer)