Ameris Bancorp: Steady Dividends and Strategic Growth in the Southeast

Ameris Bancorp (NYSE: ABCB) continues to position itself as a reliable income generator and a regional banking powerhouse. With a robust dividend policy, a strong Southeastern footprint, and a focus on organic growth, the bank offers investors a compelling mix of stability and opportunity. Let's dissect its financial health, dividend sustainability, and growth potential ahead of its upcoming July 7 dividend payout.

Dividend Sustainability: A Track Record of Reliability

Ameris has maintained a consistent dividend policy, increasing its quarterly payout from $0.15 per share in 2023 to $0.20 in 2025—a 33% growth rate over two years. While the dividend yield stands at 1.4% (as of June 2025), this reflects its conservative payout ratio of 13.4% of earnings, ensuring long-term sustainability. Unlike peers pressured to cut dividends during economic fluctuations, Ameris has prioritized stability, with no dividend reductions since its IPO in 2014.

The upcoming dividend, payable on July 7 to shareholders of record as of June 30, underscores this reliability. Investors acquiring shares before the ex-dividend date (June 30) will benefit from this consistent income stream, which aligns with the bank's capital management strategy of balancing dividends with strategic reinvestment.

Regional Dominance: 164 Branches in Growing Markets

Ameris' $26.5 billion in assets and 164 branches across the Southeast give it a structural advantage in a region primed for growth. The bank focuses on underserved markets, where its community banking model—combining traditional banking with digital services—drives customer loyalty and cross-selling opportunities. Key strengths include:
- Geographic Focus: High concentration in states like Georgia, Florida, and Alabama, where population growth and commercial activity are strong.
- Diversified Services: Commercial lending, wealth management, and small business support, reducing reliance on cyclical sectors.

This localized approach has insulated Ameris from broader banking sector headwinds, such as rising interest rates, which have pressured profitability at larger banks.

Financial Health: Strong Metrics Amid Volatility

Ameris' Q1 2025 results highlight its resilience:
- Net Income: $87.9 million, up 12% year-over-year.
- Net Interest Margin: Expanded to 4.2%, reflecting disciplined pricing and cost controls.
- Capital Ratios: Above regulatory minimums, with a Common Equity Tier 1 (CET1) ratio of 1.3.5%, signaling ample capacity to weather shocks.

These metrics, combined with a low loan loss provision (0.21% of loans), suggest strong credit quality. The bank's conservative risk management contrasts with peers facing elevated defaults in sectors like real estate.

Investment Case: A Low-Risk Entry Ahead of the Payout

The June 30 record date presents an optimal entry point for income-focused investors:
1. Dividend Certainty: The $0.20 payout is already declared, offering downside protection.
2. Valuation: At a price-to-book ratio of 1.2x, Ameris trades at a discount to its peers (e.g., Regions Financial at 1.4x), suggesting undervaluation.
3. Growth Catalysts: Expansion in commercial lending and wealth management, paired with Southeast population growth, could lift earnings.

Historically, this strategy of buying ABCB on the ex-dividend date and holding for 20 trading days has delivered an average return of 4.97% with a CAGR of 7.6% since 2020. Over this period, the strategy showed a maximum drawdown of -17.11%, reflecting moderate volatility, while generating an excess return of 4.05% over the benchmark. These results suggest that investors who followed this approach historically benefited from both dividend income and capital appreciation, though they should be aware of the potential for short-term price fluctuations.

Risks to Consider

• Interest Rate Cycles: Prolonged high rates could compress margins if loan growth slows.
• Regulatory Changes: Stricter capital rules could limit dividend flexibility.

Final Recommendation

Ameris Bancorp offers a low-risk, high-reward profile for income investors. Its dividend policy, regional dominance, and fortress balance sheet make it a standout in a volatile banking sector. Investors acquiring shares before the June 30 record date can secure the July 7 payout while positioning themselves to benefit from organic Southeast growth. With a dividend yield of 1.4% and a compelling valuation, ABCB is a buy for portfolios seeking steady returns and capital appreciation.

Next steps for investors: Monitor Q2 2025 earnings for updated growth metrics and track Southeast economic indicators like housing starts and small business formation.