Ameris Bank is one of the few homegrown banks in Georgia to have bid successfully on multiple failed banks.
That's especially notable given that Ameris, which on Friday made its fourth failed-bank purchase in the past year, has had eight consecutive quarters of net losses largely owing to credit deterioration in real estate-related loans.
Yet analysts say the income of the institution doesn't matter as much to regulators as having solid capital and capability. And they say the small-town bank in Moultrie has become a serial acquirer by proving it can handle these takeovers in the recession-battered Southeast.
The Federal Deposit Insurance Corp. "does not want to take a chance on something unproven," said Walter Moeling 4th, a partner at the Atlanta law firm Bryan Cave who has worked with Ameris. "They've done a lot of deals and they will do more."
On Friday, Ameris Bank acquired its first out-of-state failed bank, the $81 million-asset First Bank of Jacksonville in Florida. The parent company, Ameris Bancorp, raised $84.9 million in capital earlier this year after Ameris Bank acquired two small failures in late 2009. Some of that capital was used to acquire the failed Satilla Community Bank in St. Mary's in May, and then the Florida bank.
Though the company's nonperforming assets reached 5.67% of total assets and it reported a third-quarter net loss of $1.7 million, credit deterioration has not heavily infringed on its capital. Also, these problems have not diminished the company's hunger for failed banks in its region.
"We're a public company and we can't be satisfied," Edwin Hortman, president and chief executive of the $2.4 billion-asset Ameris Bancorp, said in an interview.
Beneath the writedowns and the provision for loan losses, Ameris Bancorp's core earnings and asset yields remain strong. The company posted a nearly 42% increase in core earnings, to $34.3 million, this year through Sept. 30 compared with the same period in 2009. Last year's failed-bank acquisitions have provided some large bargain-purchase gains.
Analysts said Ameris' tight grip on its problem loans and its strategy of using its capital sparingly on smaller failed-bank deals have allowed it to become a successful bidder. All four of its purchases have been of failed banks with assets of less than $160 million.
"They've been extremely conservative and very low key and that's been the secret to their success," said Mark Kanaly, a partner and banking attorney at Alston & Bird LLP in Atlanta. "And they managed to raise money at the right time."
Analysts said Ameris' track record of snapping up small failures is even more impressive when measured against the competitive environment for such acquisitions. This is especially true of a company without the backing of a private investor group.
The company was able to become an acquirer, analysts said, because it did not dive into real estate as deeply as others had in Georgia.
Moeling said Ameris compares favorably with another low-key acquirer of failed banks in Georgia, the $941.8 million-asset United Bank in Zebulon, which on Friday acquired the $131 million-asset First National Bank of Barnesville from the FDIC. It was United's third failed-bank acquisition in Georgia.
"These are very quiet, unassuming folks," Moeling said of Ameris and United. "And they've done a very good job in building a solid footprint in their market area."
While Hortman did not say whether Ameris might shift its strategy and go after bigger acquisitions, analysts said they wouldn't be surprised if the company sought larger-asset banks in the future.
There are three Georgia banks with assets of about $1 billion "that I believe Ameris is looking at," said Brady Gailey, an analyst at Keefe, Bruyette & Woods in Atlanta. He did not identify them.
Of course, the larger the failed target, the more competition Ameris will face, because regional banks and well-capitalized investor groups are also eager to make bigger acquisitions.
For example, the largest bank of the seven that failed Friday was the $1.7 billion-asset Hillcrest Bank of Overland Park, Kan. It was acquired by NBH Holdings Corp. of Boston, a private investment-backed bank holding company. This was the group's first FDIC-assisted deal since raising $1 billion last year, and it is targeting more failed-bank purchases in the Southeast and Midwest.
Bidding on a larger failed bank "would be much more competitive, but I think Ameris would bid a lot more competitively," Gailey said. He expects Ameris to grow to about $5 billion to $8 billion in assets over the next 12 to 18 months through FDIC-assisted deals. "The reason they've been going after these smaller deals is because they are saving their dry powder for these three companies," he said.