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Banking & Finance

Jan. 11 – Ameris Bank enters a Consent Order with the FDIC, including requirement to improve board oversight

Category: Banking & Finance

Savannah Business Journal Staff Report

January 11, 2017 – Ameris Bank has announced that, on December 16, 2016, Ameris Bank entered into a Stipulation to the Issuance of a Consent Order with its bank regulatory agencies, the Federal Deposit Insurance Corporation and the Georgia Department of Banking and Finance, in which Ameris Bank has consented to the issuance of a consent order relating to weaknesses in its Bank Secrecy Act compliance program.

In consenting to the issuance of the consent order, Ameris Bank did not admit or deny any charges of unsafe or unsound banking practices related to its BSA compliance program.

Commenting on the consent order, Edwin Hortman, President and CEO of Ameris Bank’s holding company, and CEO of Ameris Bank, said, "I am determined to remedy the matters that the FDIC has taken issue with concerning our BSA compliance program, and to do so quickly. Fortunately, we have organic and non-acquisition strategies that will still deliver top quartile growth in earnings per share and operating returns while we direct our energies toward resolving this issue, which is the principal hurdle that prevents us from implementing an acquisition strategy that would see the Company reach $10 billion in assets.

“The pause in our M&A activity in 2016 has been good for our Company in that we have built stronger support systems and better production capabilities, while at the same time moving our operating results to reliably strong levels. We will meet all of the FDIC's timelines and will quickly succeed on this initiative,” he added.

The consent order, which remains in effect and is enforceable until it is modified or terminated by the bank regulatory agencies, will require Ameris Bank to take certain affirmative actions to comply with its BSA obligations, including, among other things, strengthening oversight of BSA activities by Ameris Bank's board of directors, enhancing and adopting a revised BSA compliance program, completing a BSA risk assessment, implementing effective BSA training and testing programs and appointing a qualified BSA officer.

Ameris Bank began taking corrective actions in August 2016 after communicating with its regulators and expects that it will be able to undertake and implement all required actions within the time periods specified in the consent order.

Ameris Bank will incur additional non-interest expenses associated with the implementation of corrective actions; however, these expenses are not expected to have a material impact on the results of operations or financial position of Ameris Bank or the Company, according to the bank’s press release on the issue.

The Company expects to incur a charge for a one-time expense of approximately $0.10 per share in the fourth quarter of 2016, and minimal impact to operating results is expected for 2017.

In December, Ameris Bank hired experienced bank president Jenny Gentry to oversee market operations for the Savannah metro area.  Ms. Gentry recently retired from Wells Fargo as Savannah Market President, after 30-years in banking with a number of major national banking institutions.

Edwin W. Hortman Jr., Ameris Bancorp President and CEO and Ameris Bank Chief Executive Officer, has served as a Director of Ameris Bancorp since November 2003 and as a Director of Ameris Bank since February 2006. Mr. Hortman has also served as President and Chief Executive Officer of the Company since January 2005.  In his career, he also served as a Director of Central Bank & Trust, Southland Bank, First National Bank of South Georgia and Merchants & Farmers Bank, formerly wholly-owned subsidiaries of the Company, from 2002 to 2004. 

Reuters is reporting that the banking company expects earnings accretion next year of approximately 7%-8%. 

 

 

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