Ameris Bancorp in Moultrie, Ga., has a big financial incentive to buy Atlantic Coast Financial in Jacksonville, Fla., before June 30.

The $7.6 billion-asset Ameris must increase the price of the $145 million acquisition if it fails to close by mid-2018, according to a regulatory filing tied to the deal. The higher consideration would be equal to the $922 million-asset Atlantic’s net earnings for the first half of this year.

The clause was a proactive way to address Atlantic’s concerns about securing regulatory approval. When the companies were negotiating a deal, Ameris was operating under a consent order tied to compliance with anti-money-laundering rules and the Bank Secrecy Act. (The deal was announced in mid-November; Ameris was freed from the December 2016 order a month later.)

“We knew what the results of our exam were and how well it had gone," Dennis Zember, Ameris’ chief financial officer and chief operating officer, said in an interview.

Though Ameris relayed that information to Atlantic's board members, "they didn’t get to sit in with our examiners,” Zember said, adding that the deal is on schedule to close by March 31. “I calmed them down by telling them we’d increase the consideration. I would have never agreed to a consideration increase if I didn’t have confidence it would close” on time.

The filing strongly indicates that Atlantic, before it began talking to Ameris, considered making a play for BankMobile, the digital-only bank that Customers Bancorp in Wyomissing, Pa., is spinning off as part of a complex transaction with Flagship Community Bank in Clearwater, Fla.

Atlantic in late March mulled a “possible strategic alignment with a potential spinoff of a deposit gathering” unit of Customers, the filing said; it did not name the unit. Jay Sidhu, Customers’ chairman and CEO and Atlantic’s vice chairman, and James Dolan, Atlantic's chairman, recused themselves from those discussions.

Zember declined to comment on Atlantic’s apparent interest in BankMobile. A call to Atlantic wasn’t immediately returned.

The flirtation with the Customers unit lasted from April to June, the filing said. Customers disclosed in March that it had received two all-cash proposals for BankMobile that could “be considered superior” to Flagship’s proposal.

Atlantic eventually decided against pursuing a transaction because the Customers unit “was still under contract to another financial institution” and its board determined that the regulatory, operational and economic risks were too great.

The discussions with Customers highlight Atlantic’s extensive pursuit of M&A. As far back as October 2016, Atlantic CEO John Stephens Jr. sought a merger of equals, only to find that no other institution was willing to consider it.

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Stephens’ initial contact with Ameris came last June during a meeting held during a Florida Bankers Association conference, the filing said. By July 13, the companies had entered into a nondisclosure agreement that allowed Ameris to perform due diligence.

Ameris proposed on Aug. 4 to buy Atlantic for $10 a share in stock. Atlantic countered with a request for $10.50 a share, with 15% of the consideration involving cash. While Ameris wouldn’t budge on price, it agreed to the request for cash.

After conducting due diligence, Ameris lowered its offer on Sept. 15 to $9.27 a share, with the cash portion fixed at $1.37 a share. The price eventually increased to $9.43 a share, including a cash payment of $1.39 a share.

Atlantic was concerned that Ameris’ consent order would make it “very unlikely” to get regulatory approval for a deal, the filing said. Stephens, after a discussion with a representative of the Federal Deposit Insurance Corp., told Atlantic’s board on Nov. 7 that he “felt relatively confident” that order would be lifted “in the near term.”

Still, the board asked Sidhu to reach out to Ameris to angle for a price adjustment if the deal wasn’t completed by June 30. Ameris agreed to the request, and Atlantic’s board unanimously approved the sale on Nov. 16.

The deal, which is expected to close in the second quarter, priced Atlantic at 160% of its tangible book value. Ameris, which expects to incur roughly $12 million in merger-related charges, plans to cut 55% of Atlantic's annual noninterest expenses.

"We view this transaction as an extension of our plan to build scale in northeast Florida,” Edwin Hortman Jr., Ameris’ president and CEO, said in a press release announcing the deal. “We are excited to grow our franchise with an outstanding team and high quality customer base.”

Stephens will be paid about $1.2 million as part of a change-in-control agreement. He will also receive $605,000 for signing a six-month noncompete agreement. He is also restricted from soliciting business from Atlantic customers for 18 months.

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