New Ameris chief puts M&A on hold to focus on Atlanta growth

Ameris Bancorp will likely avoid bank M&A as its new CEO integrates the Moultrie, Ga., company's last acquisition.

Palmer Proctor, who became Ameris' leader as part of its July purchase of Fidelity Southern, believes there will be ample chances to grow from the the $16.4 billion-asset company's newfound heft around Atlanta. Proctor, who largely shied away from M&A when he was Fidelity's CEO, said Ameris will put off acquisitions for at least the next four to six quarters.

"We've finally gotten the company to the scale and size where organic growth comes a little bit easier," Palmer, who succeeded Dennis Zember Jr. at Ameris, said in an interview. "We've got a lot of opportunity in our own backyard, and we don't need the distraction of M&A."

The $750 million acquisition — the largest deal in Ameris' history — created a company with 72 branches and nearly $5 billion in deposits around Atlanta. Ameris, which also bought the $1.8 billion-asset Hamilton State Bancshares in July 2018, is the seventh-biggest bank in the Atlanta area, based on deposit market share data from the Federal Deposit Insurance Corp.

The added scale, "plus building out their campus in Buckhead and bringing on more than 300 new employees, puts them in a good position to compete for both talent and business relationships," said Joe Brannen, president and CEO of the Georgia Bankers Association.

While it can be difficult to gain traction in Atlanta, Proctor noted that 100,000 people move to the city each year. The area has also developed a diverse group of industries.

The market has "a lot of health care, a lot of technology and we've gotten big in the entertainment and film industry," Proctor said.

There has also been a lot of disruption tied to M&A. Several banks with significant Atlanta operations, including Brand Group Holdings, State Bank Financial and Charter Financial, have been sold in recent years. Other bankers sense an opportunity from the merger of BB&T and SunTrust Banks.

"When people feel unsettled they have a tendency to entertain change," Palmer said.

At the same time, smaller financial institutions want to take business away from Ameris.

Though Fidelity did a good job engaging the community, Matt Selke, CEO of the $75 million-asset Pinnacle Credit Union in Atlanta, said he has gained new members due to changes in some underwriting and deposit account standards since the deal closed. He said Pinnacle has also gained some new customers as a result of the BB&T-SunTrust deal.

Proctor, who became Fidelity's president in 2006 and CEO in 2017, provides some continuity for his bank's customers. At the same time, he is Ameris' third CEO in less than a year.

Proctor called the transition a nonissue for Ameris, given the stability with the rest of the executive team. He and Zember, who cited family and personal matters for his resignation, had already discussed what to do if something happened to either of them.

Proctor's appointment, though unexpected, was a "positive change that investors should embrace," Chris Marinac. an analyst at Janney Montgomery Scott, wrote in a July 1 note to clients. "Moreover, the Fidelity team contributes superb low-cost deposits that materially change the investment thesis for Ameris long into the future."

That future could eventually include operations in other attractive Southeast cities, including the mid-Atlantic, though Proctor said Ameris has so much opportunity in existing markets that it has no immediate need to stretch further.

"Our main focus is operating within the footprint we currently have, which is pretty powerful," he said.