Ameris Bancorp (ABCB): what the price requires

At today's price, Ameris Bancorp (ABCB) is priced for 14.2% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-13 · Source: https://boothcheck.com/report/ABCB

Headline

FieldValue
TickerABCB
CompanyAmeris Bancorp
Current price$89.81/sh
CompositionBanking Division 75% / Retail Mortgage Division 19% / Warehouse Lending Division 3% / Premium Finance Division 4%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Elite ROE must persist for35.7y before normalizing (held at the 12.4% elite tier)
Perpetuity-equivalent ROE14.2%
Return on equity now10.1%
ROE gap+4.1pp
Price-to-book1.48x

Solve inputs: computed at a 10.9% cost of equity; ROE searched up to the 12.4% ROE ceiling.

Reconcile: at the x-ray's 9.3% required return this reads ~11.8%; the models below use their own rates.

How unusual the bet is: elevated

ReferenceValue
vs own history+2.20σ
cohort percentile (of 119 peers)61
sustained it ~10 years at this level63%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.21x3expensive
Earnings0.87x2justifies
Relative0.76x3justifies
Growth1.15x1expensive

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.5%); the inversion above states its own rate.

Per-Model Detail (n=9)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$58.371.54xyesTBVPS $45.25 × 1.29x (ROE (TTM) 10.6% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.65% allowance/loans → ×0.97, NPL 0.54% → ×1.00)
Relative ValuationRelative$70.801.27xyesP/E 10x (sector median), scenarios: 8.3x / 10.0x / 11.7x (bear / base = sector held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$69.351.30xyesBV/sh $60.24, ROE (TTM) 10.6%, ke 9.3%
Two-Stage Excess ReturnAsset$74.231.21xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$77.781.15xyesRev $1.0B, growth 10% (input: historical growth; tapered), Terminal P/S: 5.3x / 6.3x / 7.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$118.110.76xyesEPS $6.36, growth 19% (input: historical EPS growth), PEG=0.75 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$92.840.97xyes√(22.5 × EPS $6.36 × BVPS $60.24) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$205.220.44xyesEPS $6.36 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative$177.160.51xyesEPS $6.36 × (PEG 1.5 × growth 18.6% (input: historical EPS growth)) → PE 27.9x
Earnings YieldEarnings$68.761.31xyesEPS $6.36 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (buyback)-0.7%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

Bull Case

For a bank, the single metric that determines whether the stock is worth a premium to book is the return it earns on that book, and Ameris is earning a return that justifies one. First-quarter 2026 return on average tangible common equity was 14.75% and return on average assets was 1.62%, both well into the tier that separates a good regional bank from an average one. A bank that consistently earns mid-teens returns on tangible equity deserves to trade above book value, because each dollar of retained earnings compounds at a rate the market cannot easily replicate. That is the entire bull case in one number, and the number is strong.

What makes the return durable is the quality of the funding and the discipline on costs. Ameris grew deposits by $260.7 million in the quarter with noninterest-bearing deposits improving to 29.8% of total, and that low-cost deposit base is what let net interest margin expand to 3.88% even as funding pressures persisted across the industry. The FY2025 10-K shows the same trajectory at the annual level, with net interest margin rising to 3.79% from 3.56% and net interest income growing to $940.7 million (FY2025 10-K, accession 0000351569-26-000050). A bank that funds itself cheaply and keeps its efficiency ratio under 50%, as Ameris did at 49.97%, converts more of every dollar of revenue into profit than its peers, and that operating leverage is what sustains the elite return.

The credit picture supports holding the premium rather than fearing it. Net charge-offs ran at just 0.21% annualized and nonperforming assets at 0.45% of total assets, both low, while the allowance for credit losses rose modestly on organic loan growth and a more conservative economic weighting. A bank earning a mid-teens return while keeping credit clean and growing loans and deposits is doing exactly what a high-quality franchise should. The diversified business mix, a banking division alongside retail mortgage, warehouse lending, and premium finance, adds fee income and cycle balance. The bull case is straightforward: a Southeast regional bank earning elite returns on a cheap deposit base, with clean credit and tight costs, which is precisely the profile that earns and keeps a premium to book.

Bear Case

The uncomfortable observation is that the market is paying for the best version of Ameris to become the permanent version. The bank is excellent right now, but banking is a cyclical, capital-intensive, commodity business where today's elite return reflects a favorable rate environment, benign credit, and strong deposit conditions, none of which last forever. The qualitative truth the numbers point to is that you are buying a regional bank at a peak-return moment and paying a premium to book for it, which is how investors have repeatedly overpaid for banks just before the cycle turned.

The price-to-book math makes the disconnect concrete. At about 1.4 times book the price assumes Ameris keeps earning a return near the top of its panel for decades before normalizing, equivalent to holding a return in the mid-teens essentially in perpetuity. But the bank has been earning closer to 10% on average through the cycle, not the elite tier the price requires, so the assumption runs well above its own demonstrated average. The bank-specific fair-value method, the one purpose-built for financials, values the stock near $58 using tangible book value of about $45 per share and a modest premium for its return profile. That is meaningfully below the $88 price (June 27, 2026). When the method designed for the asset class says one thing and the price says another, the burden of proof sits on the optimistic reading.

The structural risks are the ones every regional bank carries and the price discounts. A meaningful retail-mortgage and warehouse-lending exposure ties a fifth of the business to mortgage volumes, which swing hard with rates. The deposit advantage that drives the margin can erode if competition for funding intensifies or if noninterest-bearing balances migrate to higher-yielding alternatives. And credit, pristine today, is the variable that turns fastest and hardest in a downturn, with the allowance build and the heavier downside-scenario weighting in the quarter hinting that management itself is watching for it. The bear case is not that Ameris is a weak bank. It is that it is a strong bank priced as though strong is permanent, when the bank-appropriate valuation says the premium already assumes returns above what it has historically sustained.

Valuation

A bank is worth the return it earns on its capital, so the price is read off price-to-book rather than an operating multiple. At today's price the market is paying about 1.4 times book and, inverting that, assuming Ameris keeps earning a return on equity near 12.5%, the top of its panel, for roughly 35 years before it normalizes, which is equivalent to holding about a 14% return in perpetuity. Treat those figures as approximate. For reference the bank has recently been earning around 10% on average, so the assumed return runs above what it has actually delivered through the cycle, the multiple sits in the upper half of the peer group's price-to-book, and on the historical base rate only about 63% of firms earning this return sustained it for a decade. The read comes out elevated, above what the fundamentals comfortably support.

The valuation X-ray is mixed rather than uniformly cautious, and the spread is the information. The bank-specific price-to-tangible-book model, the right tool for a financial, lands near $58, below the price, applying a 1.29 times multiple to tangible book of about $45 per share given the return profile and credit. The excess-return methods land in the high $60s to mid $70s, the relative valuation near $71. But the earnings-based methods that use the recent strong EPS, Peter Lynch near $118 and the Graham formula higher still, land above the price because they extrapolate the current elevated earnings. So the question the X-ray poses is whether to value Ameris on its book and through-cycle return, which says the price is full, or on its current peak earnings, which says it is cheap.

The reconciliation favors the book-based view for a bank, because earnings-based methods flatter a financial at the top of its return cycle. Note that the standard leverage and coverage lenses do not apply to a bank the way they do to an operating company; the relevant capital question is the regulatory capital and the allowance, both of which look healthy here. The valuation conclusion is that Ameris is a genuinely strong bank trading at a premium that already prices in the continuation of its current elite returns. The price is reasonable only if you believe the mid-teens return on tangible equity is the durable level rather than a favorable point in the cycle.

Catalysts

The first-quarter 2026 report, released in late April, was strong across every line that matters for a bank. Net income was $110.5 million, or $1.63 per diluted share, up from $87.9 million and $1.27 a year earlier. Return on average assets reached 1.62% and return on average tangible common equity 14.75%. Net interest margin expanded to 3.88% on lower funding costs and strong noninterest-bearing deposit growth, deposits rose $260.7 million with noninterest-bearing balances improving to 29.8% of total, and the efficiency ratio improved to 49.97% from 52.83%. Credit held firm, with annualized net charge-offs of 0.21% and nonperforming assets at 0.45% of total assets.

The forward catalysts are the standard regional-bank swing factors. The items to watch are the trajectory of net interest margin as the rate environment shifts, the durability of the low-cost deposit base and the noninterest-bearing mix, loan growth and any change in credit trends given the allowance build and the more conservative economic weighting, and mortgage-banking volumes that move with rates. The next quarterly print, due in late July, will show whether the margin expansion and the elite returns are sustaining or beginning to normalize. Continued mid-teens returns on tangible equity with clean credit would support the premium valuation; any margin compression or credit deterioration would strengthen the case that the current returns are a cyclical peak.

Sources: Ameris Bancorp Q1 2026 results (stocktitan.net); ABCB Q1 2026 earnings call highlights (gurufocus.com); ABCB Q1 2026 summary (quartr.com).

Peer Cohorts (Per Segment, With Filing Citations)

Banking Division (reported)

Retail Mortgage Division (reported)

Warehouse Lending Division / Premium Finance Division (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive ABCB report on boothcheck