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As filed with the Securities and Exchange Commission on August 30, 2013

Registration No. 333-189886

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Pre-Effective

Amendment No. 1

to

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

AMERIS BANCORP

(Exact name of registrant as specified in its charter)

 

 

 

Georgia		6022		58-1456434
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Ameris Bancorp 310 First St., S.E. Moultrie, Georgia 31768 (229) 890-1111				Mr. Edwin W. Hortman, Jr. Chief Executive Officer Ameris Bancorp 310 First St., S.E. Moultrie, Georgia 31768 (229) 890-1111
(Address, including ZIP code, and telephone                     number, including area code, of registrant’s                     principal executive offices)				(Name, address, including ZIP code, and telephone number, including area code, of agent for service)

 

 

COPIES TO:

 

Jody L. Spencer, Esq. Lori A. Gelchion, Esq. Rogers & Hardin LLP 2700 International Tower 229 Peachtree Street, NE Atlanta, Georgia 30303 (404) 522-4700 (404) 525-2224 (facsimile)		John P. Greeley, Esq. Smith Mackinnon, PA 255 South Orange Avenue Suite 800 Orlando, Florida 32801 (407) 843-7300 (407) 843-2448 (facsimile)

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable following the effectiveness of this Registration Statement and upon completion of the merger described herein.

If the securities being registered on this Form are being offered in connection with formation of a holding company and there is compliance with General Instruction G, check the following box.    ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer		¨		Accelerated Filer		x
Non-accelerated filer		¨  (Do not check if a smaller reporting company)		Smaller reporting company		¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)    ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer    ¨

 

 

Calculation of Registration Fee

 

Title of each class of securities to be registered		Amount to be registered(1)		Proposed maximum offering price per share		Proposed maximum aggregate offering price(2)		Amount of registration fee(3)
Common Stock, $1.00 par value		1,181,125		N/A		$16,906,105		$2,306

(1)

Represents the maximum number of shares of common stock of Ameris Bancorp estimated to be issuable upon completion of the merger described herein in exchange for shares of the common stock of The Prosperity Banking Company that are currently outstanding. Pursuant to Rule 416, this registration statement also covers additional securities that may be issued as a result of stock splits, stock dividends or similar transactions.

(2)

Based on the aggregate book value of the Prosperity common stock to be canceled upon completion of the merger described herein, as of March 31, 2013, the latest practicable date prior to the date of filing this registration statement, in accordance with Rule 457(f)(2). Prosperity is a privately held company, and no market exists for its common stock.

(3)	Paid with the original filing of this registration statement.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

 

 

 

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Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold prior to the time the registration statement becomes effective. This document shall not constitute an offer to sell nor shall there be any sale of these securities in any jurisdiction in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

PRELIMINARY—SUBJECT TO COMPLETION DATED AUGUST 30, 2013

 

Proxy Statement of The Prosperity Banking Company/Prospectus of Ameris Bancorp

Up to 1,185,125 Shares of Ameris Bancorp Common Stock

PROPOSED MERGER – YOUR VOTE IS VERY IMPORTANT

 

 

To the Shareholders of The Prosperity Banking Company:

Ameris Bancorp (“Ameris”) and The Prosperity Banking Company (“Prosperity”) have entered into a definitive merger agreement that provides for the combination of the two companies. Under the merger agreement, Prosperity will merge with and into Ameris, with Ameris as the surviving company in the merger. Before the merger can be completed, Prosperity shareholders must approve the merger agreement pursuant to Florida law. Prosperity shareholders will vote to approve the merger agreement at a special meeting of shareholders to be held on             , 2013. No vote of Ameris shareholders is required to complete the merger. This document, which serves as Prosperity’s proxy statement for the special meeting of its shareholders and as a prospectus for the shares of Ameris common stock to be issued in the merger to Prosperity shareholders, gives you detailed information about the special meeting and the merger.

Under the terms of the merger agreement, Prosperity shareholders will be entitled to receive, at their election, for each share of Prosperity voting common stock they hold, 3.125 shares of Ameris common stock or $41.50 in cash, subject to the requirement that no more than 50% of the shares of Prosperity voting common stock may receive cash in the merger (with Prosperity shareholder elections subject to customary proration and allocation procedures applicable to oversubscription for cash consideration). In addition, if the average closing sale price of the Ameris common stock during a specified time period prior to the completion of the merger is less than $11.10 per share and, based on such average closing sale price, the Ameris common stock underperforms the Keefe Bruyette & Woods Regional Banking Index by more than 20% from the date of the merger agreement through a specified time period prior to the completion of the merger, then Prosperity may terminate the merger agreement unless Ameris contributes additional cash consideration for payment to Prosperity shareholders electing to receive Ameris common stock in the merger equal to the difference between such average closing sale price and $11.10 per share.

The value of the shares of Ameris common stock to be issued in the merger will fluctuate between now and the closing date of the merger. You should obtain current sale prices for the Ameris common stock. The Ameris common stock is traded on the Nasdaq Global Select Market under the symbol “ABCB.” The Prosperity common stock is not listed or traded on any established securities exchange or quotation system.

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The Prosperity board of directors has determined that the merger is fair to, and in the best interests of, Prosperity and its shareholders and unanimously recommends that Prosperity shareholders vote “FOR” approval of the merger agreement and “FOR” the approval of the other proposals described in this proxy statement/prospectus.

You should read this entire proxy statement/prospectus, including the appendices and the documents incorporated herein by reference, carefully because it contains important information about the special meeting and the merger. In particular, you should read carefully the information set forth under “Risk Factors ” beginning on page 18.

On behalf of the Prosperity board of directors, thank you for your prompt attention to this important matter.

 

The shares of Ameris common stock to be issued in the merger are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of Ameris or Prosperity, and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the securities to be issued in the merger or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated             , 2013, and is being first mailed to Prosperity shareholders on or about             , 2013.

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THE PROSPERITY BANKING COMPANY

100 Southpark Boulevard

St. Augustine, Florida 32086

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON             , 2013

Dear Shareholder of The Prosperity Banking Company:

The Prosperity Banking Company (“Prosperity”) will hold a special meeting of shareholders at its corporate headquarters, located at 100 Southpark Boulevard, St. Augustine, Florida, at      a.m., local time, on             , 2013, to consider and vote on:

 

1.

a proposal to approve the Agreement and Plan of Merger, dated as of May 1, 2013, by and between Ameris Bancorp (“Ameris”) and Prosperity, as it may be amended from time to time, pursuant to which Prosperity will merge with and into Ameris, with Ameris as the surviving company in the merger (referred to as the “merger agreement”);

 

2.	any proposal of the Prosperity board of directors to adjourn or postpone the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement; and

 

3.	such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.

The Prosperity board of directors has determined that the merger is fair to, and in the best interests of, Prosperity and its shareholders. The Prosperity board of directors unanimously recommends that Prosperity shareholders vote “FOR” approval of the merger agreement and “FOR” approval of any proposal of the Prosperity board of directors to adjourn or postpone the special meeting, if necessary.

            , 2013 has been fixed as the record date for the determination of Prosperity shareholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Only holders of record of shares of Prosperity voting common stock (referred to as “Prosperity common stock”) at the close of business on the record date are entitled to notice of, and to vote at, the special meeting.

You are cordially invited to attend the special meeting in person. Please vote, sign, date and return the enclosed proxy card in the enclosed, self-addressed envelope as promptly as possible, even if you plan to attend the special meeting. No additional postage is required if mailed in the United States. If you choose to attend the special meeting, then you may vote your shares in person, even if you have previously signed and returned your proxy card. If you hold your Prosperity shares through a bank, broker or other nominee (commonly referred to as held in “street name”), then you must direct your bank, broker or other nominee to vote in accordance with the instructions you have received from them. You may revoke your proxy at any time prior to the special meeting as specified in the accompanying proxy statement/prospectus.

In connection with the merger, Prosperity shareholders will have the opportunity to exercise appraisal rights in accordance with the procedures specified in Sections 607.1301 through 607.1333 of the Florida Business Corporation Act (the “FBCA”), which sections are included in the accompanying proxy statement/prospectus as Appendix C. A dissenting Prosperity shareholder who follows the required appraisal procedures may receive cash in an amount equal to the fair value of his or her shares of Prosperity common stock instead of receiving the merger consideration. A Prosperity shareholder who

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chooses to assert appraisal rights pursuant to Section 607.1302 of the FBCA may provide the required notice specified in Section 607.1321 of the FBCA to Prosperity’s principal executive offices at 100 Southpark Boulevard, St. Augustine, Florida 32086, Attention: Eddie Creamer. For additional details about appraisal rights, see “The Merger — Appraisal Rights for Prosperity Shareholders” and Appendix C to the accompanying proxy statement/prospectus.

 

St. Augustine, Florida

            , 2013

YOUR VOTE IS VERY IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

Ameris files annual, quarterly and special reports, proxy statements and other business and financial information with the Securities and Exchange Commission (“SEC”). You may read and copy any materials that Ameris files with the SEC at its Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the SEC at (800) SEC-0330 ((800) 732-0330) for further information on the public reference room. In addition, Ameris files reports and other business and financial information with the SEC electronically, and the SEC maintains a website located at http://www.sec.gov containing this information. You will also be able to obtain these documents, free of charge, from Ameris by accessing Ameris’s website at www.amerisbank.com under the heading “Investor Relations.” Copies can also be obtained, free of charge, by directing a written or oral request to:

Ameris Bancorp

310 First St., S.E.

Moultrie, Georgia 31768

Telephone: (229) 890-1111

Attn: Corporate Secretary, Ameris Bancorp

Ameris has filed a Registration Statement on Form S-4 to register with the SEC up to 1,181,125 shares of the Ameris common stock to be issued in the merger. This proxy statement/prospectus is a part of that Registration Statement on Form S-4. As permitted by SEC rules, this proxy statement/prospectus does not contain all of the information included in the Registration Statement on Form S-4 or in the exhibits or schedules to the Registration Statement on Form S-4. You may read and copy the Registration Statement on Form S-4, including any amendments, schedules and exhibits, at the SEC’s Public Reference Room at the address set forth above. The Registration Statement on Form S-4, including any amendments, schedules and exhibits, is also available, free of charge, by accessing the websites of the SEC and Ameris or upon written or oral request to Ameris at the address and telephone number set forth above.

Statements contained in this proxy statement/prospectus as to the contents of any contract or other documents referred to in this proxy statement/prospectus are not necessarily complete. In each case, you should refer to the copy of the applicable contract or other document filed as an exhibit to the Registration Statement on Form S-4. This proxy statement/prospectus incorporates important business and financial information about Ameris that is not included in or delivered with this document, including incorporating by reference documents that Ameris has previously filed with the SEC. These documents contain important information about Ameris and its financial condition. See “Documents Incorporated by Reference.” These documents are available free of charge upon written or oral request to Ameris at the address and telephone number listed above.

To obtain timely delivery of these documents, you must request them no later than             , 2013 in order to receive them before the special meeting of shareholders.

Ameris supplied all information contained in, or incorporated by reference into, this proxy statement/prospectus relating to Ameris, and Prosperity supplied all information contained in this proxy statement/prospectus relating to Prosperity.

You should rely only on the information contained in, or incorporated by reference into, this proxy statement/prospectus. No one has been authorized to provide you with information that is different from what is contained in this proxy statement/prospectus. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than the date of this proxy statement/prospectus, and neither the mailing of this proxy statement/prospectus to Prosperity shareholders nor the issuance of Ameris common stock or the payment of cash by Ameris in the merger shall create any implication to the contrary.

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TABLE OF CONTENTS

 

		Page
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
SUMMARY			6
The Companies			6
The Merger			7
Closing and Effective Time of the Merger			7
Merger Consideration			7
Equivalent Prosperity Per Share Value			8
Surrender of Stock Certificates			9
Material U.S. Federal Income Tax Consequences of the Merger			9
Appraisal Rights			9
Opinion of Allen C. Ewing & Co.			9
Recommendation of the Prosperity Board of Directors			10
Interests of Prosperity Directors and Executive Officers in the Merger			10
Treatment of Prosperity Stock Options			11
Regulatory Approvals			11
Conditions to Completion of the Merger			12
Third Party Proposals			13
Termination			13
Termination Fees			14
Comparison of Share Rights			15
Nasdaq Listing			16
Accounting Treatment			16
Prosperity Special Meeting			16
Market Prices and Dividend Information			16
RISK FACTORS			18
FORWARD-LOOKING STATEMENTS			21
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF AMERIS			23
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF PROSPERITY			25
SELECTED UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL DATA			27
UNAUDITED COMPARATIVE PER SHARE DATA			28
MARKET PRICES AND DIVIDEND INFORMATION			29
Ameris Dividend Restrictions			29
Prosperity Dividend Restrictions			30
INFORMATION ABOUT THE SPECIAL MEETING			31
Time, Date, and Place			31
Matters to be Considered at the Meeting			31
Recommendation of the Prosperity Board of Directors			31
Record Date and Quorum			31
Required Vote			32

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		Page
How to Vote - Shareholders of Record			32
How to Vote - Shares Held in “Street Name”			32
Revocation of Proxies			33
Shares Subject to Voting Agreements; Shares Held by Directors and Executive Officers			33
Solicitation of Proxies			34
Attending the Meeting			34
Adjournments and Postponements			34
Questions and Additional Information			35
THE MERGER			36
Background of the Merger			36
Prosperity’s Reasons for the Merger; Recommendation of the Prosperity Board of Directors			39
Ameris’s Reasons for the Merger			40
Opinion of Allen C. Ewing & Co.			41
Material U.S. Federal Income Tax Consequences of the Merger			46
Accounting Treatment			51
Regulatory Approvals			52
Appraisal Rights for Prosperity Shareholders			52
Board of Directors and Management of Ameris Following the Merger			55
Interests of Prosperity Executive Officers and Directors in the Merger			56
THE MERGER AGREEMENT			59
The Merger			59
Closing and the Effective Time of the Merger			59
Merger Consideration			60
Elections			61
Proration and Adjustment Procedures			62
Election Statements; Exchange of Stock Certificates			62
Stock Options			65
Conduct of Business Pending the Merger			65
Regulatory Matters			67
Nasdaq Listing			68
Employee Matters			68
Indemnification and Directors’ and Officers’ Insurance			69
Third Party Proposals			70
Representations and Warranties			71
Conditions to Completion of the Merger			73
Termination			74
Termination Fees			76
Effects of Termination			77
Waiver; Amendment			77
Expenses			77
THE COMPANIES			78
Ameris			78
Prosperity			78
Prosperity’s Management’s Discussion and Analysis of Financial Condition and Results of Operations			82
Security Ownership of Certain Beneficial Owners and Management of Prosperity			98

 

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		Page
DESCRIPTION OF AMERIS’S CAPITAL STOCK			100
General			100
Common Stock			100
Preferred Stock			100
Preferred Stock – Fixed Rate Cumulative Perpetual Preferred Stock, Series A			100
Certain Provisions of Articles of Incorporation and Bylaws of Ameris and the GBCC			101
Transfer Agent and Registrar			103
COMPARISON OF SHAREHOLDER RIGHTS			104
LEGAL MATTERS			116
EXPERTS			116
DOCUMENTS INCORPORATED BY REFERENCE			116
UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION			118
INDEX TO PROSPERITY’S CONSOLIDATED FINANCIAL STATEMENTS			F-1
APPENDICES
A      Agreement and Plan of Merger, dated as of May 1, 2013, by and between Ameris Bancorp and The Prosperity Banking Company
B      Opinion of Allen C. Ewing & Co.
C      Florida Appraisal Rights Statutes

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

 

Q:	Why do Ameris and Prosperity want to merge?

 

A:

We believe the combination of Ameris and Prosperity will create a leading community banking franchise in the Jacksonville, Palm Coast, Daytona Beach, Ormond Beach and Panama City, Florida metropolitan areas, while further expanding Ameris’s existing Southeastern footprint in several attractive Florida markets. The Prosperity board of directors has determined that the merger is fair to, and in the best interests of, Prosperity and its shareholders, and unanimously recommends that Prosperity shareholders vote for approval of the merger agreement. You should review the reasons for the merger described in greater detail under “The Merger — Prosperity’s Reasons for the Merger; Recommendation of the Prosperity Board of Directors” and “The Merger — Ameris’s Reasons for the Merger.”

 

Q:	What will I receive in the merger for my shares of Prosperity common stock?

 

A:

Under the terms of the merger agreement, Prosperity shareholders will be entitled to receive, at their election, for each share of Prosperity common stock they hold, 3.125 shares of Ameris common stock or $41.50 in cash, subject to the requirement that no more than 50% of the shares of Prosperity common stock may receive cash in the merger (with Prosperity shareholder elections subject to customary proration and allocation procedures applicable to oversubscription for cash consideration). Due to these limitations, Prosperity shareholders who elect to receive cash for their shares of Prosperity common stock may not receive cash consideration for all such shares and, instead, may receive shares of Ameris common stock.

In addition, if the average closing sale price of the Ameris common stock during a specified time period prior to the completion of the merger is less than $11.10 per share and, based on such average closing sale price, the Ameris common stock underperforms the Keefe Bruyette & Woods Regional Banking Index by more than 20% from the date of the merger agreement through a specified time period prior to the completion of the merger, then Prosperity may terminate the merger agreement unless Ameris contributes additional cash consideration for payment to Prosperity shareholders electing to receive Ameris common stock in the merger equal to the difference between such average closing sale price and $11.10 per share. See “The Merger Agreement — Merger Consideration” and “The Merger Agreement — Termination.”

The value of the shares of Ameris common stock to be issued to Prosperity shareholders in the merger will fluctuate between now and the closing date of the merger. We make no assurances as to whether or when this merger will be completed. You are advised to obtain current sale prices for the Ameris common stock, which is traded on the Nasdaq Global Select Market under the symbol “ABCB.”

 

Q:	How and when does a Prosperity shareholder elect the form of consideration he or she prefers to receive?

 

A:

An election statement with instructions for making the election as to the form of consideration preferred is being mailed to Prosperity shareholders simultaneously with this proxy statement/prospectus. To make an election, a Prosperity shareholder must submit an election statement, to Ameris’s exchange agent under the merger agreement (referred to as the “exchange agent”) by 5:00 p.m., Eastern Time, on the date prior to the fifth (5th) business day immediately preceding the closing date of the merger (or such other time and date as Ameris and Prosperity may mutually agree). This date is referred to as the “election deadline.” Election choices and election procedures are described under “The Merger Agreement — Elections” and “The Merger Agreement — Election Statements; Exchange of Stock Certificates.”

 

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NOTE: The actual election deadline is not currently known. Ameris and Prosperity anticipate issuing a press release to announce the date of the election deadline at least five (5) business days before that deadline. Additionally, Ameris and Prosperity also anticipate posting the date of the election deadline on their respective web sites at least five (5) business days before that deadline.

 

Q:	May a Prosperity shareholder change his or her election once it has been submitted?

 

A:

Yes. An election may be revoked or changed but only by written notice by the person submitting such election received by the exchange agent prior to the election deadline. If an election is revoked, and unless a subsequent properly executed election statement is actually received by the exchange agent by the election deadline, then the holder having revoked the election will be deemed to have made no election with respect to his or her shares of Prosperity common stock. See “The Merger Agreement — Election Statements; Exchange of Certificates.”

 

Q:	How are outstanding Prosperity stock options addressed in the merger agreement?

 

A:

The merger agreement requires Prosperity to cause all outstanding and unexercised options to purchase shares of Prosperity common stock awarded under the Prosperity 2005 Stock Option and Incentive Plan and the Prosperity 2010 Officers’ and Employees’ Stock Option Plan to be canceled prior to the effective time of the merger (collectively referred to as the “Prosperity stock plans”). The termination of the Prosperity stock options (by their own terms or otherwise) is a condition to Ameris’s obligation to complete the merger. Ameris will not assume any outstanding Prosperity stock option or any Prosperity stock plan, and none of the outstanding Prosperity stock options will be converted to, or represent rights to acquire, Ameris common stock. See “The Merger Agreement — Stock Options” and “The Merger Agreement — Conditions to Completion of the Merger.”

No payment will be made to any holder of Prosperity stock options with respect to their cancellation, except that certain executive officers of Prosperity will receive, at the closing of the merger, shares of restricted Ameris common stock (not to exceed 25,000 shares in the aggregate) in respect of the cancellation of certain of their Prosperity stock options. See “The Merger — Interests of Prosperity Executive Officers and Directors in the Merger — Prosperity Stock Options.”

 

Q:	What happens if an election is not made prior to the election deadline?

 

A:

If a Prosperity shareholder fails to submit an election statement to the exchange agent by the election deadline, then that holder will be deemed to have made no election and will be issued shares of Ameris common stock in exchange for all shares of Prosperity common stock held by such Prosperity shareholder. See “The Merger Agreement — Elections” and “The Merger Agreement — Election Statements; Exchange of Stock Certificates.”

 

Q:	When and where is the special meeting?

 

A:	The special meeting is scheduled to take place on             , 2013, at      a.m., local time, at its corporate headquarters, located at 100 Southpark Boulevard, St. Augustine, Florida.

 

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Q:	What will be voted on at the special meeting?

 

A:

At the special meeting, the holders of Prosperity common stock will be asked to approve the merger agreement, as well as any proposal of the Prosperity board of directors to adjourn or postpone the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement.

 

Q:	What should I do now?

 

A:

After you have carefully read this proxy statement/prospectus, please vote your shares promptly. If you hold shares of Prosperity common stock in your own name as a shareholder of record, you should complete, sign, date, and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. Please vote by proxy even if you plan to attend the special meeting. If you hold your shares of Prosperity common stock through a bank, broker or other nominee (commonly referred to as held in “street name”), you must direct your bank, broker or other nominee to vote in accordance with the instructions you have received from them.

If you choose to attend the special meeting, then you may vote your shares in person, even if you have previously returned your proxy. Please note that if you hold your shares in street name, you must obtain a legal proxy from your bank, broker or other nominee in order to vote your shares in person at the special meeting.

 

Q:	Why is my vote important?

 

A:

We cannot complete the merger unless Prosperity shareholders approve the merger agreement. Approval of the merger agreement requires the affirmative vote of the holders of at least a majority of the outstanding shares of Prosperity common stock. Accordingly, if you do not vote or if you abstain from voting, it will have the same effect as voting against approval of the merger agreement.

 

Q:	If my shares are held in street name with a bank, broker or other nominee, will my bank, broker or other nominee vote my shares for me?

 

A:	No. Without instructions from you, your bank, broker or other nominee will not be able to vote your shares. This will have the same effect as voting against approval of the merger agreement.

 

Q:	Can I change my vote before the special meeting?

 

A:	Yes. If you are the record holder of your shares, there are three ways you can change your vote after you have submitted your proxy:

 

•

First, you may send a written notice to the Corporate Secretary of Prosperity stating that you would like to revoke your proxy.

 

•

Second, you may complete and submit a new proxy card bearing a later date. Your proxy card bearing the latest date (and received before the special meeting) will be counted, and any earlier proxy will be revoked.

 

•

Third, you may attend the special meeting in person and vote in person. Any earlier proxy will thereby be revoked. However, simply attending the meeting without voting will not revoke an earlier proxy you may have given.

 

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If you hold your shares of Prosperity common stock in street name with a bank, broker or other nominee, then you must follow the directions you receive from your bank, broker or other nominee to change your vote. Your last vote will be the vote that is counted.

 

Q:	What if I want to exercise appraisal rights?

 

A:

If you want to exercise appraisal rights and receive the fair value of your shares of Prosperity common stock in cash instead of the merger consideration, then you must file a written objection with Prosperity prior to the special meeting stating, among other things, that you will exercise your right to dissent if the merger is completed. Also, you may not vote in favor of the merger agreement and must follow other procedures, both before and after the special meeting, as described in Appendix C to this proxy statement/prospectus. Note that if you return a signed proxy card without voting instructions or with instructions to vote “FOR” the merger agreement, then your shares will be automatically voted in favor of the merger agreement and you will lose all appraisal rights available under Florida law. See “The Merger — Appraisal Rights for Prosperity Shareholders.”

 

Q:	What are the U.S. federal income tax consequences of the merger to Prosperity shareholders?

 

A:

Although it is expected that the merger will qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), it is currently unclear, and will remain unclear until the closing date of the merger, whether the merger will so qualify. Therefore, it is possible that Prosperity shareholders will be required to recognize gain or loss for U.S. federal income tax purposes taking into account the amount realized (as defined herein on page 49). Prosperity shareholders should vote to adopt the merger agreement only if they are willing to approve a taxable transaction in which they fully recognize gain or loss.

 

Q:	When do you currently expect to complete the merger?

 

A:

We expect to complete the merger in the third quarter of 2013. However, we make no assurances as to whether or if the merger will be completed. We must first obtain the approval of Prosperity shareholders at the special meeting and the necessary regulatory approvals, and the other conditions to completing the merger must be satisfied or waived. See “The Merger Agreement — Conditions to Completion of the Merger.”

 

Q:	Should I send in my Prosperity stock certificates now?

 

A:

No. Please do not send your stock certificates with your proxy card. Promptly after the effective time of the merger, the exchange agent will mail Prosperity shareholders a letter of transmittal and instructions for the surrender of stock certificates for the merger consideration. See “The Merger Agreement — Election Statements; Exchange of Stock Certificates.”

 

Q:	Whom should I call with questions?

 

A:	If you have any questions about the merger or any of the proposals to be considered at the special meeting, need assistance in submitting your proxy or voting your shares or need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact Prosperity at:

 

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The Prosperity Banking Company

100 Southpark Boulevard

St. Augustine, Florida 32086

Telephone: (904) 824-9111

Attn: Eddie Creamer

 

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RISK FACTORS

In addition to the other information contained in, or incorporated by reference into, this proxy statement/prospectus, including Ameris’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and the matters addressed under “Forward-Looking Statements,” Prosperity shareholders should consider the matters described below carefully in determining whether to vote to approve the merger agreement.

Because the sale price of the Ameris common stock may fluctuate, you cannot be sure of the value of the merger consideration that you will receive in the merger if you elect to receive the per share stock consideration.

Under the terms of the merger agreement, each share of Prosperity common stock outstanding immediately prior to the effective time of the merger (excluding dissenting shares) will be converted into the right to receive, at the election of the holder, either 3.125 shares of Ameris common stock or $41.50 in cash, subject to the requirement that the number of shares of Prosperity common stock receiving the per share cash consideration in the merger may not exceed the maximum cash shares (with Prosperity shareholder elections subject to customary proration and allocation procedures applicable to oversubscription for cash consideration). The value of the shares of Ameris common stock to be issued to Prosperity shareholders in the merger will fluctuate between now and the closing date of the merger due to a variety of factors, including general market and economic conditions, changes in the parties’ respective businesses, operations and prospects, and regulatory considerations, among other things. Many of these factors are beyond the control of Ameris and Prosperity. We make no assurances as to whether or when the merger will be completed. Prosperity shareholders should obtain current sale prices for shares of Ameris common stock before voting their shares of Prosperity common stock at the special meeting and before submitting an election statement indicating the type of merger consideration they wish to receive.

Prosperity shareholders may receive a form of merger consideration different from what they elect.

Although each Prosperity shareholder may make a cash or stock election with respect to the type of merger consideration they wish to receive in the merger for their shares of Prosperity common stock, the number of shares of Prosperity common stock receiving the per share cash consideration in the merger may not exceed the maximum cash shares (with Prosperity shareholder elections subject to customary proration and allocation procedures applicable to oversubscription for cash consideration). As a result, if the cash consideration is oversubscribed, then a Prosperity shareholder who makes a cash election for such holder’s shares of Prosperity common stock may nevertheless receive some stock consideration in respect of such shares. See “The Merger Agreement — Elections” and “The Merger Agreement — Proration and Adjustment Procedures.”

Ameris may fail to realize all of the anticipated benefits of the merger.

The success of the merger will depend on, among other things, Ameris’s ability to realize anticipated cost savings and to combine the businesses of Ameris and Prosperity in a manner that does not materially disrupt the existing customer relationships of either Ameris or Prosperity or result in decreased revenues from customers of either of them. If Ameris is not able to successfully achieve these objectives, then the anticipated benefits of the merger may not be realized fully, if at all, or may take longer to realize than expected.

Ameris and Prosperity have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of either Ameris’s or Prosperity’s ongoing businesses or inconsistencies in standards,

 

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controls, procedures and policies that adversely affect the ability of Ameris or Prosperity to maintain relationships with their respective clients, customers, depositors and employees or to achieve the anticipated benefits of the merger. Integration efforts by Ameris and Prosperity will also divert management attention and resources. These integration matters could have an adverse effect on each of Ameris and Prosperity during the transition period and on the combined company following completion of the merger.

The termination fees and the restrictions on third party proposals set forth in the merger agreement may discourage others from trying to acquire Prosperity.

Until the completion of the merger, with some exceptions, Prosperity is prohibited from soliciting, initiating, encouraging or participating in any discussion of or otherwise considering any inquiries or proposals that may lead to a proposal to acquire Prosperity, such as a merger or other business combination transaction, with any person other than Ameris. In addition, Prosperity has agreed to pay to Ameris in certain circumstances a termination fee equal to $2.25 million. These provisions could discourage other companies from trying to acquire Prosperity even though those other companies might be willing to offer greater value to Prosperity shareholders than Ameris has offered in the merger. The payment of any termination fee could also have a material adverse effect on Prosperity’s financial condition. See “The Merger Agreement — Third Party Proposals,” “The Merger Agreement — Termination” and “The Merger Agreement — Termination Fees.”

The opinion that Prosperity has obtained from Ewing has not been, and is not expected to be, updated to reflect any changes in circumstances that may have occurred since the signing of the merger agreement.

The opinion issued to the Prosperity board of directors by Ewing, financial advisor to Prosperity, with respect to the fairness of the merger consideration to be received by Prosperity shareholders, from a financial point of view, speaks only as of April 26, 2013. Changes in the operations and prospects of Ameris or Prosperity, general market and economic conditions and other factors which may be beyond the control of Ameris and Prosperity, and on which the opinion was based, may have altered the value of Ameris or Prosperity or the sale prices of shares of Ameris common stock as of the date of this proxy statement/prospectus, or may alter such values and sale prices by the time the merger is completed. Ewing does not have any obligation to update, revise or reaffirm its opinion to reflect subsequent developments and has not done so. Because Prosperity does not currently anticipate asking Ewing to update its opinion, the opinion will not address the fairness of the merger consideration from a financial point of view at the time the merger is completed. The Prosperity board of directors’ recommendation that Prosperity shareholders vote “FOR” approval of the merger agreement, however, is made as of the date of this proxy statement/prospectus. See “The Merger — Opinion of Ewing” and Appendix B to this proxy statement/prospectus.

The merger and the bank merger are subject to the receipt of consents and approvals from regulatory authorities that may impose conditions that could have an adverse effect on Ameris.

Before the merger and the bank merger can be completed, various approvals or consents must be obtained from bank regulatory authorities. These authorities may impose conditions on the completion of the merger or the bank merger or require changes to their terms. While Ameris and Prosperity do not currently expect that any such conditions or changes will be imposed, there is no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger or the bank merger, or imposing additional costs on or limiting the revenues of Ameris following the merger, any of which might have a material adverse effect on Ameris following the merger. Neither party is obligated to complete the merger if the regulatory approvals received in connection with the completion

 

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of the merger impose any condition applicable to Prosperity or Prosperity Bank that would increase any of the minimum regulatory capital requirements of Ameris following the merger or of Ameris Bank following the bank merger. See “The Merger Agreement — Conditions to Completion of the Merger.”

The merger may not qualify as a tax-free “reorganization” within the meaning of the Code.

Although it is expected that the merger will qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code, it is currently unclear, and will remain unclear until the closing date of the merger, whether the merger will qualify as a tax-free “reorganization” within the meaning of the Code. If the merger does not qualify as a tax-free reorganization, then the holders of shares of Prosperity common stock would recognize any gain with respect to the entire consideration received in the merger, including the per share stock consideration received.

Tax matters are very complicated and the consequences of the merger to any particular Prosperity shareholder will depend on that shareholder’s particular facts and circumstances. You should consult your own tax advisor to determine the particular tax consequences of the merger to you.

The combined company expects to incur substantial expenses related to the merger.

The combined company expects to incur substantial expenses in connection with completing the merger and combining the business, operations, networks, systems, technologies, policies and procedures of Ameris and Prosperity. Although Ameris and Prosperity have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and combination expenses associated with the merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the completion of the merger.

Shares of Ameris common stock to be received by Prosperity shareholders as a result of the merger will have rights different from the shares of Prosperity common stock.

Upon completion of the merger, the rights of former Prosperity shareholders who receive Ameris common stock in the merger, and thereby become Ameris shareholders, will be governed by the articles of incorporation and bylaws of Ameris. The rights associated with Prosperity common stock are different from the rights associated with Ameris common stock. In addition, the rights of shareholders under Georgia law, where Ameris is incorporated, may differ from the rights of shareholders under Florida law, where Prosperity is incorporated. See “Comparison of Shareholder Rights.”

Ameris has various provisions in its articles of incorporation that could impede a takeover of Ameris.

The articles of incorporation of Ameris contain provisions providing for, among other things, a classified board of directors and the ability to issue preferred stock without shareholder approval. Although these provisions were not adopted for the express purpose of preventing or impeding the takeover of Ameris without the approval of the Ameris board of directors, such provisions may have that effect. Such provisions may prevent former Prosperity shareholders who receive shares of Ameris common stock in the merger from taking part in a transaction in which Ameris shareholders could realize a premium over the current market price of Ameris common stock. See “Comparison of Shareholders Rights.”

Prosperity’s executive officers and directors have financial interests in the merger that are different from, or in addition to, the interests of Prosperity shareholders.

Executive officers of Prosperity negotiated the terms of the merger agreement with Ameris, and the Prosperity board of directors unanimously approved and recommended that Prosperity shareholders vote to approve the merger agreement. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that certain Prosperity executive officers and directors have financial interests in the merger that are different from, or in addition to, the interests of Prosperity shareholders generally. See “The Merger — Interests of Prosperity Executive Officers and Directors in the Merger” for information about these financial interests.

 

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FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus, including information included in, or incorporated by reference into, this proxy statement/prospectus, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to: (i) statements about the benefits of the merger, including future financial and operating results and cost savings that may be realized from the merger; (ii) statements about our respective plans, objectives, expectations and intentions and other statements that are not historical facts; and (iii) other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements are based on current beliefs and expectations of Ameris’s and Prosperity’s managements, and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond Ameris’s and Prosperity’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under “Risk Factors” and those discussed in the filings of Ameris with the SEC that are incorporated by reference into this proxy statement/prospectus, as well as the following:

 

•

the merger may not be completed when expected because the requisite regulatory approvals for the merger, and/or the approval of the merger agreement by Prosperity shareholders, might not be obtained or other conditions to the completion of the merger set forth in the merger agreement might not be satisfied or waived;

 

•

the sale price for the Ameris common stock could decline, before the completion of the merger, including as a result of the financial performance of Prosperity, or more generally due to broader stock market movements and the performance of financial companies and peer group companies;

 

•

the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all as a result of, among other things, changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the markets in which Ameris and Prosperity operate;

 

•

Prosperity’s business may not be integrated into Ameris’s business successfully, or such integration may take longer to accomplish than expected;

 

•

operating costs, customer losses and business disruption following the merger, including adverse developments in relationships with employees, may be greater than expected; and

 

•

management time and effort may be diverted to the resolution of merger-related issues.

Because these forward-looking statements are subject to assumptions and uncertainties, Ameris’s and Prosperity’s actual results may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this proxy statement/prospectus or the date of any document incorporated by reference into this proxy statement/prospectus.

 

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All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this proxy statement/prospectus, and attributable to Ameris or Prosperity or any person acting on their behalf, are expressly qualified in their entirety by the cautionary statements contained or referred to in this “Forward-Looking Statements.” Ameris and Prosperity undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF AMERIS

The following selected historical consolidated financial data as of and for the twelve months ended December 31, 2012, 2011, 2010, 2009 and 2008 is derived from the audited consolidated financial statements of Ameris. The following selected historical consolidated financial data as of and for the six months ended June 30, 2013 and 2012, is derived from the unaudited consolidated financial statements of Ameris and has been prepared on the same basis as the selected historical consolidated financial data derived from the audited consolidated financial statements and, in the opinion of Ameris’s management, reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data for those dates.

The results of operations as of and for the six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2013. You should read the following selected historical consolidated financial data in conjunction with: (i) the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Ameris’s audited consolidated financial statements and accompanying notes included in Ameris’s Annual Report on Form 10-K for the twelve months ended December 31, 2012; and (ii) the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Ameris’s unaudited consolidated financial statements and accompanying notes included in Ameris’s Quarterly Report on Form 10-Q for the six months ended June 30, 2013, both of which are incorporated by reference into this proxy statement/prospectus. See “Documents Incorporated by Reference.”

 

		Six Months Ended June 30,								Years Ended December 31,
		2013				2012				2012				2011				2010				2009				2008
		(In thousands, except per share data and ratios)
Selected Balance Sheet Data:
Total assets			$2,808,675				$2,920,311				$3,019,052				$2,994,307				$2,972,168				$2,423,970				$2,407,090
Total legacy loans, gross			1,555,827				1,365,489				1,450,635				1,332,086				1,374,757				1,584,359				1,695,777
Covered assets (loans and OREO)			505,695				685,204				595,985				650,106				609,922				146,585				—
Total deposits			2,443,103				2,544,672				2,624,663				2,591,566				2,535,426				2,123,116				2,013,525
Investment securities			316,168				366,980				346,909				339,967				322,581				245,556				367,894
Stockholders’ equity			287,777				300,939				279,017				293,770				273,407				194,964				239,359
Selected Income Statement Data:
Interest income			62,824				65,289				129,479				141,071				119,071				114,573				129,008
Interest expense			5,010				8,681				15,074				27,547				29,794				40,550				56,343
Net interest income			57,814				56,608				114,405				113,524				89,277				74,023				72,665
Provision for loan losses			7,088				20,107				31,089				32,729				50,521				42,068				35,030
Other income			22,744				36,139				57,874				52,807				35,248				58,353				19,149
Other expenses			55,572				60,869				119,470				101,953				81,188				124,800				62,753
Income (loss) before tax			17,898				11,771				21,720				31,649				(7,184	)			(34,492	)			(5,969	)
Income tax expense (benefit)			5,935				3,911				7,285				10,556				(3,195	)			7,297				(2,053	)
Net income (loss)			11,963				7,860				14,435				21,093				(3,989	)			(41,789	)			(3,916	)
Preferred stock dividends			883				1,632				3,577				3,241				3,213				3,161				328
Net income (loss) available to common stockholders			11,080				6,228				10,858				17,852				(7,202	)			(44,950	)			(4,244	)

 

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Per Share Data:
Earnings (loss) per share available to common shareholders:
Basic		$	0.46			$	0.26			$	0.46			$	0.76				$(0.35	)			$ (3.27	)		$	(0.31	)
Diluted		$	0.46			$	0.26			$	0.46			$	0.76				$(0.35	)			$ (3.27	)		$	(0.31	)
Common book value per share (period end)		$	10.88			$	10.49			$	10.56			$	10.23				$ 9.44				$10.52			$	14.06
Tangible book value per share (period end)		$	10.74			$	10.29			$	10.39			$	10.06				$ 9.22				$10.17			$	9.74
Cash dividends per share		$	—			$	—			$	—			$	—				$  —				$  0.10			$	0.38
Stock dividend			—				—				—				—				3 for 157				2 for 130				—
Profitability Ratios:
Net income (loss) to average total assets			0.85	%			0.53	%			0.49	%			0.60	%			(0.37	%)			(0.52	%)			(0.19	%)
Net income (loss) to average stockholders’ equity			9.60	%			6.49	%			5.99	%			7.21	%			(4.44	%)			(6.25	%)			(2.22	%)
Net interest margin (TE)			4.88	%			4.56	%			4.60	%			4.57	%			4.11	%			3.52	%			3.65	%
Efficiency ratio			68.98	%			65.63	%			69.35	%			61.30	%			65.20	%			74.61	%			68.35	%
Asset Quality Ratios:
Net charge-offs to average total loans*			0.74	%			4.07	%			2.76	%			2.23	%			3.33	%			2.77	%			1.36	%
Non-performing assets to total assets			2.55	%			2.77	%			2.61	%			4.05	%			4.62	%			4.85	%			2.91	%
Non-performing assets to total loans and OREO*			4.49	%			5.77	%			5.28	%			8.76	%			8.38	%			6.87	%			4.13	%
Allowance for loan losses to total loans*			1.56	%			1.92	%			1.63	%			2.64	%			2.52	%			2.26	%			2.33	%
Allowance for loan losses to nonperforming loans*			76.13	%			58.98	%			60.67	%			49.64	%			43.61	%			37.20	%			60.62	%
Liquidity Ratios:
Loans to total deposits*			63.68	%			53.66	%			55.27	%			51.40	%			54.22	%			74.62	%			84.22	%
Loans to average earning assets			82.85	%			78.61	%			77.83	%			76.72	%			76.50	%			79.26	%			82.32	%
Noninterest-bearing deposits to total deposits			19.46	%			16.86	%			19.46	%			15.26	%			11.91	%			11.16	%			10.36	%
Capital Adequacy Ratios:
Common stockholders’ equity to total assets			10.25	%			10.31	%			9.24	%			9.81	%			9.20	%			8.04	%			7.91	%
Tangible common equity to tangible assets			9.15	%			8.41	%			8.20	%			7.99	%			7.35	%			5.86	%			5.74	%

 

*	Excludes covered assets.

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF PROSPERITY

The following selected historical consolidated financial data as of and for the twelve months ended December 31, 2012, 2011, 2010, 2009 and 2008 is derived from the audited consolidated financial statements of Prosperity. The following selected historical consolidated financial data as of and for the six months ended June 30, 2013, and 2012 is derived from the unaudited consolidated financial statements of Prosperity and has been prepared on the same basis as the selected historical consolidated financial data derived from the audited consolidated financial statements and, in the opinion of Prosperity’s management, reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data for those dates.

The results of operations as of and for the six months ended June 30, 2013, are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2013. You should read the following selected historical consolidated financial data in conjunction with Prosperity’s Management’s Discussion and Analysis of Financial Condition and Results of Operations, audited consolidated financial statements and accompanying notes for the twelve months ended December 31, 2012, and unaudited consolidated financial statements and accompanying notes for the six months ended June 30, 2013, each of which are included elsewhere in this proxy statement/prospectus. See “The Companies — Prosperity’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Index to Prosperity’s Consolidated Financial Statements.”

 

		Six Months Ended June 30,								Years Ended December 31,
		2013				2012				2012				2011				2010				2009				2008
		(In thousands, except per share data and ratios)
Selected Balance Sheet Data:
Total assets			$753,943				$791,006				$ 741,708				$ 783,742				$ 844,423				$ 935,234				$ 1,108,117
Total loans, gross			484,660				479,685				463,683				481,403				551,908				621,721				719,799
Total deposits			492,685				534,554				477,369				532,149				588,794				673,379				822,233
Investment securities			167,921				198,663				169,462				176,558				134,147				137,150				203,218
Stockholders’ equity			14,558				18,974				17,965				16,751				17,910				26,346				26,199
Selected Income Statement Data:
Interest income			13,840				15,792				31,007				34,974				40,183				49,762				60,077
Interest expense			3,862				4,666				9,010				10,401				14,208				23,381				31,089
Net interest income			9,978				11,126				21,997				24,573				25,975				26,381				28,988
Provision for loan losses			1,684				379				3,583				5,261				13,825				15,256				25,082
Other income			1,406				1,532				4,813				(90	)			4,800				2,440				10,723
Other expenses			10,436				11,590				22,791				24,853				28,154				29,891				33,335
Income (loss) before tax			(736	)			689				436				(5,631	)			(11,204	)			(16,326	)			(18,706	)
Income tax expense (benefit)			(288	)			(627	)			(732	)			(799	)			(4,296	)			(7,115	)			(5,744	)
Net income (loss) available to common stockholders			(448	)			1,316				1,168				(4,832	)			(6,908	)			(9,211	)			(12,962	)

 

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Per Share Data:
Earnings (loss) per share available to common shareholders:
Basic		$	(1.18	)		$	3.48			$	3.09			$	(12.78	)		$	(18.28	)		$	(34.86	)		$	(69.57	)
Diluted		$	(1.18	)		$	3.48			$	3.09			$	(12.78	)		$	(18.28	)		$	(34.86	)		$	(69.57	)
Common book value per share (period end)		$	38.52			$	50.20			$	47.53			$	44.32			$	47.39			$	69.71			$	137.05
Tangible book value per share (period end)		$	37.97			$	49.49			$	46.90			$	43.53			$	46.42			$	68.58			$	128.85
Cash dividends per share		$	—			$	—			$	—			$	—			$	—			$	—			$	9.63
Profitability Ratios:
Net income (loss) to average total assets			(0.12	%)			0.33	%			0.15	%			(0.59	%)			(0.77	%)			(0.90	%)			(1.23	%)
Net income (loss) to average stockholders’ equity			(5.39	%)			14.85	%			6.46	%			(25.04	%)			(30.55	%)			(36.73	%)			(40.34	%)
Net interest margin (TE)			2.96	%			3.15	%			3.17	%			3.43	%			3.34	%			2.90	%			3.03	%
Efficiency ratio			91.67	%			91.56	%			86.95	%			102.71	%			99.23	%			100.48	%			81.09	%
Asset Quality Ratios:
Net charge-offs to average total loans*			1.19	%			1.15	%			1.33	%			1.92	%			2.07	%			2.60	%			2.33	%
Non-performing assets to total assets			2.07	%			2.80	%			3.04	%			3.75	%			5.44	%			4.67	%			4.34	%
Non-performing assets to total loans and OREO*			3.17	%			4.49	%			4.76	%			5.90	%			8.18	%			6.89	%			6.59	%
Allowance for loan losses to total loans*			1.47	%			1.78	%			1.77	%			2.28	%			2.82	%			2.25	%			2.26	%
Allowance for loan losses to nonperforming loans*			91.13	%			91.55	%			71.07	%			103.57	%			76.10	%			52.92	%			46.49	%
Liquidity Ratios:
Loans to total deposits*			98.37	%			89.74	%			97.13	%			90.46	%			93.74	%			92.33	%			87.54	%
Average loans to average earning assets			72.05	%			68.47	%			66.83	%			66.80	%			69.51	%			66.63	%			73.62	%
Noninterest-bearing deposits to total deposits			31.22	%			27.06	%			27.85	%			24.36	%			21.40	%			16.02	%			12.83	%
Capital Adequacy Ratios:
Common stockholders’ equity to total assets			1.93	%			2.40	%			2.42	%			2.14	%			2.12	%			2.82	%			2.36	%
Tangible common equity to tangible assets			1.90	%			2.36	%			2.39	%			2.10	%			2.08	%			2.77	%			2.23	%

 

*	Excludes covered assets.

 

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SELECTED UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL DATA

The following table presents selected unaudited pro forma combined consolidated financial data about the financial condition and results of operations of Ameris giving effect to the merger. See “The Merger — Accounting Treatment.”

The following table presents the information as if the merger had become effective on June 30, 2013, with respect to financial condition data, and on January 1, 2012, with respect to the results of operations data. The selected unaudited pro forma combined consolidated financial data have been derived from, and should be read in conjunction with, the historical financial information that Ameris and Prosperity have incorporated by reference into, or included, in this proxy statement/prospectus as of and for the indicated periods. See “Unaudited Pro Forma Combined Consolidated Financial Information,” “Documents Incorporated by Reference” and “Index to Prosperity’s Consolidated Financial Statements.”

The selected unaudited pro forma combined consolidated financial data are presented for illustrative purposes only and does not necessarily indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented. The selected unaudited pro forma combined consolidated financial information also does not consider any potential impacts of current market conditions on revenues, potential revenue enhancements, anticipated cost savings and expense efficiencies, or asset dispositions, among other factors.

 

		Six Months Ended June 30, 2013				Year Ended December 31, 2012
		(In thousands, except per share data)
Pro Forma Condensed Consolidated Income Statement Data:
Net interest income			$     67,792				$136,402
Provision for loan losses			8,772				34,672
Income before tax			16,654				21,140
Net income			11,185				14,943
Preferred stock dividends			883				3,577
Net income available to common stockholders			10,302				11,366
Per Share Data:
Earnings (loss) per share available to common shareholders:
Basic			$         0.41				$      0.45
Diluted			$         0.40				$      0.45
Cash dividends per share			$          —				$       —
Pro Forma Condensed Consolidated Balance Sheet Data:
Total loans, net			$2,422,125
Total assets			3,549,450
Total deposits			2,935,788
Borrowings			184,442
Stockholders’ equity			307,679

 

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UNAUDITED COMPARATIVE PER SHARE DATA

Presented below for Ameris and Prosperity is historical, unaudited pro forma combined and pro forma equivalent per share financial data as of and for the twelve months ended December 31, 2012 and as of and for the six months ended June 30, 2013. The information presented below should be read together with: (i) Ameris’s audited consolidated financial statements and accompanying notes included in Ameris’s Annual Report on Form 10-K for the twelve months ended December 31, 2012, and Ameris’s unaudited consolidated financial statements and accompanying notes included in Ameris’s Quarterly Report on Form 10-Q for the six months ended June 30, 2013, both of which are incorporated by reference into this proxy statement/prospectus; and (ii) Prosperity’s audited consolidated financial statements and accompany notes for the twelve months ended December 31, 2012, and unaudited consolidated financial statements and accompanying notes for the six months ended June 30, 2013, both of which are included elsewhere in this proxy statement/prospectus. See “Index to Prosperity’s Consolidated Financial Statements” and “Documents Incorporated by Reference.”

The unaudited pro forma combined and pro forma per equivalent share information gives effect to the merger as if the merger had been effective on December 31, 2012, or June 30, 2013, in the case of the book value data, and as if the merger had been effective as of January 1, 2012, in the case of the earnings per share and the cash dividends data. The unaudited pro forma data combines the historical results of Prosperity into Ameris’s consolidated statement of income. While certain adjustments were made for the estimated impact of fair value adjustments and other acquisition-related activity, they are not indicative of what could have occurred had the acquisition taken place on January 1, 2012.

The unaudited pro forma adjustments are based upon available information and certain assumptions that Ameris management believes are reasonable. The unaudited pro forma data, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, do not reflect the impact of factors that may result as a consequence of the merger or consider any potential impacts of current market conditions of the merger on revenues, expense efficiencies, asset dispositions, among other factors. As a result, unaudited pro forma data are presented for illustrative purposes only and do not represent an attempt to predict or suggest future results. Upon completion of the merger, the operating results of Prosperity will be reflected in the consolidated financial statements of Ameris on a prospective basis.

 

		(In thousands, except per share data)
		As of and for the Six Months Ended June 30,  2013																As of and for the Twelve Months Ended December 31,  2012
		Ameris Historical				Prosperity Historical				Pro forma Combined				Per Equivalent Prosperity Share (1)				Ameris Historical				Prosperity Historical				Pro forma Combined				Per Equivalent Prosperity Share (1)
Net Income (Loss) Per Common Share - Basic			$  0.46				$(1.18	)			$  0.41				$(0.38	)			$  0.46				$  3.09				$  0.48				$  0.99
Net Income (Loss) Per Common Share - Diluted			0.46				(1.18	)			0.40				(0.38	)			0.46				3.09				0.48				0.99
Cash Dividends Per Common Share			—				—				—				—				—				—				—				—
Book Value Per Common Share			10.88				38.52				11.16				12.33				10.56				47.53				10.84				15.21

 

(1)	The equivalent share information in the above table is computed using 1,181,125 additional shares of Ameris common stock issued to Prosperity shareholders at a price of $16.50 per share at an exchange rate of 3.125 shares of Ameris common stock for each share of Prosperity common stock.

 

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MARKET PRICES AND DIVIDEND INFORMATION

The Ameris common stock is traded on the Nasdaq Global Select Market under the symbol “ABCB.” The Prosperity common stock is not listed or traded on any established securities exchange or quotation system. Accordingly, there is no established public trading market for the Prosperity common stock. As of                 , 2013, the outstanding shares of Ameris common stock were owned by approximately                  holders of record and the outstanding shares of Prosperity common stock were owned by approximately                  holders of record.

The following table sets forth the reported high and low sales prices of shares of Ameris common stock, as adjusted for stock dividends, in each case for the periods indicated. The high and low sales prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions. Neither Ameris nor Prosperity has paid cash dividends on their respective common stock during the periods indicated below.

 

		Ameris Common Stock
		High				Low				Dividends
2013
First Quarter		$	14.51			$	12.79				—
Second Quarter			16.94				13.16				—
Third Quarter (through August 29, 2013)			19.81				16.77				—
2012
First Quarter		$	13.32			$	10.34				—
Second Quarter			13.40				10.88				—
Third Quarter			12.88				11.27				—
Fourth Quarter			12.71				10.50				—
2011
First Quarter		$	11.20			$	9.15				—
Second Quarter			10.25				8.49				—
Third Quarter			10.36				8.31				—
Fourth Quarter			10.98				8.51				—

Ameris Dividend Restrictions

The holders of Ameris common stock receive dividends if and when declared by the Ameris board of directors out of funds legally available, subject to certain restrictions imposed by state and federal laws and the preferential dividend rights of the preferred stock. The prior approval of applicable regulatory authorities is required if the total amount of all dividends declared by Ameris Bank in any calendar year exceeds 50% of Ameris Bank’s net profits for the previous year. The relevant federal and state regulatory agencies also have authority to prohibit a state member bank or bank holding company, which would include Ameris and Ameris Bank, from engaging in what, in the opinion of such regulatory body, constitutes an unsafe or unsound practice in conducting its business. The payment of dividends could, depending upon the financial condition of the subsidiary, be deemed to constitute an unsafe or unsound banking practice in conducting its business.

Under Georgia law, the prior approval of the GDBF is required before any cash dividends may be paid by a state bank if: (i) total classified assets at the most recent examination of such bank exceed 80% of the equity capital (as defined, which includes the reserve for loan losses) of such bank; (ii) the aggregate amount of dividends declared or anticipated to be declared in the calendar year exceeds 50% of the net profits (as defined) for the previous calendar year; or (iii) the ratio of equity capital to adjusted total assets is less than 6%. There were no amounts of retained earnings of Ameris Bank available for payment of cash dividends under applicable regulations without obtaining regulatory approval as of December 31, 2012.

 

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In addition, Ameris Bank is subject to limitations under Section 23A of the Federal Reserve Act with respect to extensions of credit to, investments in and certain other transactions with Ameris. Furthermore, loans and extensions of credit are also subject to various collateral requirements.

The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve’s view that a bank holding company should pay cash dividends only to the extent that the holding company’s net income for the past year is sufficient to cover both the cash dividends and a rate of earning retention that is consistent with the holding company’s capital needs, asset quality and overall financial condition. The Federal Reserve also indicated that it would be inappropriate for a holding company experiencing serious financial problems to borrow funds to pay dividends. Furthermore, under the prompt corrective action regulations adopted by the Federal Reserve, the Federal Reserve may prohibit a bank holding company from paying any dividends if one or more of the holding company’s bank subsidiaries are classified as undercapitalized.

A bank holding company is required to give the Federal Reserve prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of its consolidated net worth. The Federal Reserve may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe or unsound practice or would violate any law, regulation, Federal Reserve order or any condition imposed by, or written agreement with, the Federal Reserve.

Furthermore, under rules and regulations of the Economic Stabilization Act of 2008 to which Ameris is subject, no dividends may be declared or paid on Ameris common stock unless the dividends due with respect to Ameris preferred stock have been paid in full.

Prosperity Dividend Restrictions

Prosperity has not paid any cash dividends on the Prosperity common stock. Prosperity has agreed that it will not pay any cash dividends without prior approval of the Federal Reserve. The ability of Prosperity to pay dividends on the shares of Prosperity common stock also is subject to statutory restrictions on cash dividends applicable to Florida corporations and on Prosperity Bank’s right to pay such dividends, since Prosperity’s primary source of funds is the dividends it receives from Prosperity Bank.

 

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INFORMATION ABOUT THE SPECIAL MEETING

This section contains information about the special meeting that Prosperity has called to allow Prosperity shareholders to vote on the approval of the merger agreement. The Prosperity board of directors is mailing this proxy statement/prospectus to you, as a Prosperity shareholder, on or about             , 2013. Together with this proxy statement/prospectus, the Prosperity board of directors is also sending to you a notice of the special meeting of Prosperity shareholders and a form of proxy that the Prosperity board of directors is soliciting for use at the special meeting and at any adjournments or postponements of the special meeting.

Time, Date, and Place

The special meeting is scheduled to be held on             , 2013 at     a.m., local time, at its corporate headquarters, located at 100 Southpark Boulevard, St. Augustine, Florida.

Matters to be Considered at the Meeting

At the special meeting, Prosperity shareholders will be asked to consider and vote on:

 

•

a proposal to approve the merger agreement;

 

•

any proposal of the Prosperity board of directors to adjourn or postpone the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement; and

 

•

any other matters as may properly be brought before the special meeting or any adjournment or postponement of the special meeting.

At this time, the Prosperity board of directors is unaware of any other matters that may be presented for action at the special meeting. If any other matters are properly presented, however, and you have completed, signed and submitted your proxy, the person(s) named as proxy will have the authority to vote your shares in accordance with his or her judgment with respect to such matters. A copy of the merger agreement is included in this proxy statement/prospectus as Appendix A, and we encourage you to read it carefully in its entirety.

Recommendation of the Prosperity Board of Directors

The Prosperity board of directors unanimously recommends that Prosperity shareholders vote “FOR” approval of the merger agreement and “FOR” approval of any proposal of the Prosperity board of directors to adjourn or postpone the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement. See “The Merger — Prosperity’s Reasons for the Merger; Recommendation of the Prosperity Board of Directors.”

Record Date and Quorum

            , 2013 has been fixed as the record date for the determination of Prosperity shareholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. At the close of business on the record date, there were     shares of Prosperity common stock outstanding and entitled to vote at the special meeting, held by     holders of record.

 

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A quorum is necessary to transact business at the special meeting. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Prosperity common stock entitled to vote at the special meeting is necessary to constitute a quorum. Shares of Prosperity common stock represented at the special meeting but not voted, including shares that a shareholder abstains from voting and shares held in “street name” with a bank, broker or other nominee for which a shareholder does not provide voting instructions, will be counted for purposes of establishing a quorum. Once a share of Prosperity common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum not only at the special meeting but also at any adjournment or postponement of the special meeting. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or postponed.

Required Vote

The affirmative vote of the holders of at least a majority of the outstanding shares of Prosperity common stock entitled to vote at the special meeting is necessary to approve the merger agreement. With respect to the proposal to approve the merger agreement, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you vote to abstain or if you fail to vote, this will have the same effect as voting against approval of the merger agreement.

A proposal of the Prosperity board of directors to adjourn or postpone the special meeting, if necessary, to solicit additional proxies requires the affirmative vote of the holders of a majority of the shares of Prosperity common stock represented in person or by proxy at the special meeting. Abstentions on this proposal will have the same effect as voting against the proposal. A failure to vote on this proposal will have no effect on the outcome of the vote on this proposal.

Each share of Prosperity common stock you own as of the record date for the special meeting entitles you to one vote at the special meeting on all matters properly presented at the meeting.

How to Vote - Shareholders of Record

Voting in Person. If you are a shareholder of record, you can vote in person by submitting a ballot at the special meeting. Nevertheless, we recommend that you vote by proxy as promptly as possible, even if you plan to attend the special meeting. This will ensure that your vote is received. If you attend the special meeting, you may vote by ballot, thereby canceling any proxy previously submitted.

Voting by Proxy. Your proxy card includes instructions on how to vote by mailing in the proxy card. If you choose to vote by proxy, please mark each proxy card you receive, sign and date it, and promptly return it in the envelope enclosed with the proxy card. If you sign and return your proxy without instruction on how to vote your shares, your shares will be voted “FOR” approval of the merger agreement and “FOR” approval of any proposal to adjourn or postpone the special meeting, if necessary. Please do not send in your Prosperity stock certificates with your proxy card. If the merger is completed, then you will receive a separate letter of transmittal and instructions on how to surrender your Prosperity stock certificates for the merger consideration.

How to Vote - Shares Held in “Street Name”

If your shares of Prosperity common stock are held through a bank, broker or other nominee, you are considered the beneficial owner of such shares held in “street name.” In such case, this proxy statement/prospectus has been forwarded to you by your bank, broker or other nominee, who is considered, with respect to such shares, the shareholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote the shares by following the voting

 

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instructions that they have sent, or will send, to you. Without specific instructions from you, your bank, broker or other nominee is not empowered to vote your shares on the proposal to approve the merger agreement or any proposal of the Prosperity board of directors to adjourn or postpone the special meeting, if necessary. Not voting these shares will have the effect of voting against these proposals. Alternatively, if you are a beneficial owner and wish to vote in person at the special meeting, you must provide a proxy executed in your favor by your bank, broker or other nominee.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. SHAREHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES BY VOTING IN PERSON.

Revocation of Proxies

You can revoke your proxy at any time before your shares are voted. If you are a shareholder of record, then you can revoke your proxy by:

 

•

submitting another valid proxy card bearing a later date;

 

•

attending the special meeting and voting your shares in person; or

 

•

delivering prior to the special meeting a written notice of revocation to Prosperity’s Corporate Secretary.

Attendance at the special meeting will not, in and of itself, constitute revocation of a proxy.

If you hold your shares in street name with a bank, broker or other nominee, you must follow the directions you receive from your bank, broker or other nominee to change your vote. Your last vote will be the vote that is counted.

Shares Subject to Voting Agreements; Shares Held by Directors and Executive Officers

A total of 85,291 shares of Prosperity common stock, representing approximately 22.57% of the outstanding shares of Prosperity common stock entitled to vote at the special meeting, are subject to shareholder voting agreements between Ameris and each of Prosperity’s directors. Pursuant to his or her respective shareholder voting agreement, each director has agreed to, at any meeting of Prosperity shareholders, however called, or any adjournment thereof:

 

•

appear at such meeting or otherwise cause the shares of Prosperity common stock held by such director to be counted as present for purposes of calculating a quorum; and

 

•

vote all shares of Prosperity common stock beneficially owned by such director (i) in favor of the approval of the merger agreement, (ii) against action or agreement that would result in a breach of any covenant, representation or warranty or other obligation of Prosperity in the merger agreement and (iii) against any acquisition proposal (as defined in “The Merger Agreement — Third Party Proposals”) or any other action, agreement or transaction that is intended or could reasonably be expected to impede, delay, discourage or materially and adversely affect the consummation of the transactions contemplated by the merger agreement.

 

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Pursuant to the shareholder voting agreement, each director has further agreed not to sell or otherwise dispose of any shares of Prosperity common stock; provided, however, that transfers by will or operation of law, transfers subject to a pledge agreement and transfers in connection with estate and tax planning purposes are permitted, subject to the transferee being bound by the terms of the shareholder voting agreement.

As of the record date, Prosperity’s directors and executive officers and their affiliates beneficially owned and were entitled to vote, in the aggregate, a total of      shares of Prosperity common stock (excluding shares issuable upon the exercise of outstanding options), representing approximately     % of the outstanding shares of Prosperity common stock entitled to vote at the special meeting. For more information about the beneficial ownership of the Prosperity common stock by each greater than 5% beneficial owner of Prosperity common stock, each director and executive officer of Prosperity and all Prosperity directors and executive officers as a group, see “The Companies — Security Ownership of Certain Beneficial Owners and Management of Prosperity.”

Solicitation of Proxies

The proxy for the special meeting is being solicited on behalf of the Prosperity board of directors. Prosperity will bear the entire cost of soliciting proxies from you. All other costs and expenses incurred in connection with the merger agreement and the transactions contemplated thereby are to be paid by the party incurring such expenses. See “The Merger Agreement — Expenses.” Proxies will be solicited principally by mail, but may also be solicited by the directors, officers, and other employees of Prosperity in person or by telephone, facsimile or other means of electronic communication. Directors, officers and employees will receive no compensation for these activities in addition to their regular compensation, but may be reimbursed for out-of-pocket expenses in connection with such solicitation.

Attending the Meeting

All holders of Prosperity common stock, including shareholders of record and shareholders who hold their shares in street name through banks, brokers or other nominees, are cordially invited to attend the special meeting. Shareholders of record can vote in person at the special meeting. If you are not a shareholder of record and would like to vote in person at the special meeting, you must produce a proxy executed in your favor by the record holder of your shares. In addition, you must bring a form of personal photo identification with you in order to be admitted at the special meeting. We reserve the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the special meeting is prohibited without Prosperity’s express written consent.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed, including for the purpose of soliciting additional proxies, if there are insufficient votes at the time of the special meeting to approve the proposal to approve the merger agreement or if a quorum is not present at the special meeting. Other than an announcement to be made at the special meeting of the time, date and place of an adjourned meeting, an adjournment generally may be made without notice. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow the shareholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

 

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Questions and Additional Information

If you have more questions about the merger or how to submit your proxy or vote, or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card or voting instructions, please contact Prosperity at:

The Prosperity Banking Company

100 Southpark Boulevard

St. Augustine, Florida 32086

Telephone: (904) 824-9111

Attn: Eddie Creamer

 

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THE MERGER

Background of the Merger

From time to time, the boards of directors of Ameris and Prosperity have each engaged in reviews and discussions of their long-term strategies and objectives, considering ways that they might enhance shareholder value and their respective company’s performance and prospects in light of competitive and other relevant factors. Generally, these reviews have centered on strategies to improve the respective company’s existing operations or to pursue opportunities in new markets or lines of business. Often these assessments included discussions and analysis of potential merger transactions as a means to enhance or improve shareholder value.

In early 2010, executive officers of Ameris and Prosperity began meeting from time to time to discuss general banking conditions, regulatory developments and relevant economic trends, as well as the resultant impact of the foregoing on credit quality, revenue and expense trends and other operational matters. While these conversations were general in nature, certain important synergies were identified between the companies that led to broad-based conversations regarding the potential advantages and disadvantages of a merger transaction between them. However, the discussions remained informal and preliminary in nature until the fourth quarter of 2012. During that time, Edwin W. Hortman, Jr., Ameris’s President and Chief Executive Officer, reported on the details of these discussions in his regular monthly reports to the board of directors of Ameris.

On October 31, 2012, Eddie Creamer, Prosperity’s President and Chief Operating Officer, met with Mr. Hortman and Dennis J. Zember Jr., Ameris’s Executive Vice President and Chief Financial Officer, in Moultrie, Georgia for general discussions. During these discussions, Mr. Creamer indicated that Prosperity was actively seeking investors and making presentations for the purpose of recapitalizing Prosperity. Mr. Creamer did not disclose the names of any interested or proposed investors, the price at which shares might be offered or the amount of capital Prosperity was seeking to raise. Messrs. Hortman and Zember conveyed to Mr. Creamer that Ameris would be interested in exploring a potential merger transaction with Prosperity. Additionally, they assured Mr. Creamer that a rather firm offer could be provided quickly to the board of directors of Prosperity, given the depth of past conversations and the familiarity that the companies had with one another.

After the meeting concluded and Mr. Creamer departed, Messrs. Hortman and Zember discussed at length a potential transaction with Prosperity and, using general assumptions, determined a range of possible prices Ameris might be in position to pay for Prosperity. On the evening of October 31, 2012, Mr. Zember contacted Mr. Creamer and stated that, subject to a satisfactory due diligence examination of Prosperity and Prosperity Bank, Ameris would be willing to offer between $30 and $35 per share for the outstanding shares of Prosperity common stock if Prosperity’s contemplated capital raise proved to be unsuccessful. Mr. Creamer discussed the meeting and the follow-up call on November 1, 2012 with Messrs. Mark Bailey and Tracy Upchurch, Prosperity’s Chairman and Vice Chairman, respectively.

On November 2, 2012, Ameris and Prosperity entered into a mutual confidentiality agreement for the purposes of sharing certain information between the two parties. Mr. Hortman indicated that it was Ameris’s desire to offer a letter of intent in the coming month to Prosperity with terms that Mr. Hortman was confident could be acceptable to both parties and ultimately memorialized in a final merger agreement. To this end, Ameris began to review certain high level information regarding Prosperity and Prosperity Bank designed to help determine the fair value of loans, FHLB advances and other balance sheet items. This review continued until December 14, 2012.

 

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On January 11, 2013, Messrs. Hortman and Creamer met in St. Augustine Florida at Prosperity’s corporate offices. Mr. Creamer updated Mr. Hortman on continuing efforts to recapitalize Prosperity and progress in the current private placement of Prosperity shares. Mr. Creamer did not disclose interested investors, pricing or size of the offering. Messrs. Hortman and Creamer again discussed the synergies between the two companies and a possible merger.

Mr. Hortman updated the board of directors of Ameris on January 15, 2013 regarding discussions with Prosperity. At that time, he reviewed with the board the terms of a letter of intent proposed to be provided to Prosperity, including a purchase price of up to $35 for each share of Prosperity common stock.

On January 29, 2013, Messrs. Hortman and Zember met with Mr. Creamer in St. Augustine, Florida at Prosperity’s corporate offices. At the meeting, Mr. Hortman outlined the content of a letter of intent from Ameris, with the anticipated offer being $35 per share for all of the outstanding shares of Prosperity common stock. Mr. Hortman left the letter of intent, as executed by Ameris, for Mr. Creamer to review and discuss with Prosperity’s legal counsel and representatives of Prosperity’s board of directors. Mr. Creamer provided a signed copy of the accepted letter of intent, executed by Prosperity, to Mr. Zember later that afternoon. Mr. Hortman subsequently notified the board of directors of Ameris that the letter of intent executed by Prosperity had been received.

On January 30, 2013 and continuing from time to time until March 12, 2013, Mr. Hortman and other executive officers and representatives of Ameris and Mr. Creamer and other executives officers and representatives of Prosperity continued to hold periodic conversations about the potential merger transaction. Concurrent with the conversations, each party conducted high level due diligence examinations, designed to identify the general advantages and disadvantages of proceeding with a merger transaction.

On March 13, 2013, Messrs. Hortman and Creamer discussed by phone the potential merger transaction, as well as the identified advantages and disadvantages of a transaction. Mr. Hortman confirmed that, after review of the information provided to date by Prosperity, a price of $35 per share was realistic. Messrs. Hortman and Creamer agreed to move forward with complete due diligence reviews with the goal of reaching a definitive agreement on the merger.

On March 19, 2013, Mr. Hortman discussed with Ameris’s board of directors the preliminary results of the due diligence examination and indicated that he believed that a definitive offer of $35 per share of Prosperity common stock would be appropriate. Mr. Zember reviewed with the board preliminary financial implications of a merger at this price. After extensive discussions, Ameris’s board of directors authorized Mr. Hortman to proceed with the negotiation of a merger agreement with terms similar to those discussed.

On April 8, 2013, Mr. Zember circulated for review a draft merger agreement prepared by Ameris’s counsel, Rogers & Hardin LLP, to Mr. Creamer and Prosperity’s counsel, Smith Mackinnon, PA. Key terms of the merger agreement included fixed consideration per share, with payment to be made solely in the form of Ameris common stock. Mr. Creamer provided the merger agreement to Prosperity’s board of directors and informed them of the key terms.

On April 10, 2013, Messrs. Hortman and Zember attended the lunch session of a meeting of the board of directors of Prosperity, presenting their rationale for proceeding with a proposed merger transaction and the terms offered. Mr. Hortman responded to questions from the directors regarding, among other topics, the strategic plan and the vision of Ameris, current operating trends, analyst opinions of Ameris, future expansion plans and Ameris’s plans for Prosperity’s customers and employees. At the conclusion of the meeting, Messrs. Hortman and Zember discussed with Messrs. Alan Rogers and Errol Parsons of Ewing their desire to introduce a fixed exchange ratio rather than fixed consideration, as originally presented in the draft merger agreement.

 

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Smith Mackinnon, PA provided comments to various provisions of the initial draft, other than those pertaining to the specific terms of the merger consideration, to Rogers & Hardin LLP on April 12, 2013. As Ameris and Prosperity subsequently continued to discuss the merger consideration both internally and with one another, their counsel worked concurrently to refine other provisions of the draft merger agreement.

On April 15, 2013, Mr. Creamer and other executive officers of Prosperity, together with representatives of Ewing, met with certain executive officers of Ameris in Moultrie, Georgia at Ameris’s corporate offices. At the conclusion of the meeting, Mr. Creamer and Mr. Zember discussed the consideration included in the draft merger agreement in conjunction with the trading price for Ameris common stock, which had declined more than 7% since the parties’ execution of a letter of intent.

On April 16, 2013, Mr. Hortman presented a report to the board of directors of Ameris, summarizing the recent due diligence of Prosperity and Prosperity Bank. Mr. Zember discussed the financial implications of the merger and detailed the major assumptions involved. Further discussion was had regarding the terms of a proposed transaction, advantages of and alternatives to a merger with Prosperity and the impact of variability in key assumptions. Mr. Hortman indicated to the board that the recent decline in the price of the Ameris common stock could present a challenge to negotiating a merger agreement with the desired language concerning a fixed exchange ratio, and if that were to occur, some flexibility would be required. The board approved general terms of the transaction as presented.

After the board meeting concluded on April 16, 2013 and continuing from time to time until the evening of April 18, 2013, Mr. Zember and Mr. Creamer discussed various alternatives to the proposed consideration. On the evening of April 18, 2013, after discussing the issue with representatives of Prosperity’s board of directors, Mr. Creamer contacted Mr. Zember and suggested adjusting the fixed exchange ratio from 2.875, as the parties had discussed to that point, to 3.125 shares of Ameris common stock for each share of Prosperity common stock and offering a cash option of $41.50 per share of Prosperity common stock for up to 50% of the total merger consideration. Based upon the closing price of the Ameris common stock on the day prior to such discussions, the new exchange ratio resulted in a value of $41.53 for each share of the Prosperity common stock outstanding (for those shareholders of Prosperity who would elect to receive Ameris common stock in the merger). After discussing the counteroffer with Mr. Hortman, Mr. Zember indicated to Mr. Creamer that the counteroffer was acceptable to Ameris.

On April 19, 2013, a draft of the merger agreement was circulated with the new terms of the proposed transaction. Additional conversations were had between Messrs. Hortman and Zember and Mr. Creamer regarding other incidental terms of the merger agreement until May 1, 2013. From April 24, 2013 through April 30, 2013, Rogers & Hardin LLP and Smith Mackinnon, PA continued to exchange drafts of the merger agreement and revise certain terms thereof, including the circumstances under which the merger agreement might be terminated and fees that may be payable in connection with a termination.

On April 26, 2013, the board of directors of Prosperity held a special meeting at Prosperity’s corporate offices in St. Augustine, Florida. Also present at the meeting were representatives of Ewing. At the meeting, the board reviewed a substantially final version of the merger agreement, as well as information and materials prepared by Ewing to assist Prosperity’s board of directors in evaluating the proposed merger. During the meeting, Ewing made a detailed presentation regarding its analysis of the financial terms of the proposed merger and delivered its oral opinion, later confirmed in writing, that as of the date of the opinion, the merger consideration to be received by the shareholders of Prosperity pursuant to the merger agreement is fair from a financial point of view. The board then voted unanimously to: (i) determine that the merger agreement and the merger are fair and in the best interest of Prosperity and its shareholders; (ii) approve the merger agreement and the merger; and (iii) recommend that the shareholders of Prosperity approve the merger agreement.

 

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On April 30, 2013, Daniel B. Jeter, Chairman of the board of directors of Ameris, called to order a special meeting of the board for the purpose of approving the final merger agreement. Mr. Hortman presented the final agreement and highlighted changes that had been made since April 16, 2013. After discussion, the board unanimously approved the merger agreement.

On the evening of May 1, 2013, both Ameris and Prosperity executed the merger agreement. Additionally, concurrent with the execution of the merger agreement, Ameris and each director of Prosperity executed a shareholder voting agreement. On May 2, 2013, Ameris issued a press release publicly announcing the merger.

Prosperity’s Reasons for the Merger; Recommendation of the Prosperity Board of Directors

In reaching its decision to approve the merger agreement and recommend that Prosperity shareholders approve the merger agreement, the Prosperity board of directors consulted with Prosperity’s management, as well as its financial and legal advisors, and considered a number of factors, including:

 

•

its knowledge of the businesses, operations, financial condition, earnings and prospects of each of Prosperity and Ameris;

 

•

its views on the valuation of, and strategic opportunities for, Prosperity on a stand-alone basis as compared to the prospects of enhanced value of the combined entity in the future;

 

•

its knowledge of the current environment in the financial services industry in the Jacksonville, Palm Coast, Daytona Beach, Ormond Beach and Panama City, Florida metropolitan areas, including general economic conditions, the interest rate environment and continued industry consolidation;

 

•

the impact of certain regulatory matters currently affecting Prosperity, including a Consent Order, dated June 28, 2010, issued to Prosperity Bank by the FDIC and the Florida Office of Financial Regulation (the “FOFR”) and a Written Agreement, dated July 26, 2010, by and between Prosperity and the Federal Reserve Bank of Atlanta (the “FRBA”);

 

•

the complementary strengths of the Ameris and Prosperity, and its belief that Ameris’s brand, broad product offerings and larger market presence could facilitate accelerated growth in Prosperity’s businesses;

 

•

its belief that Ameris’s financial strength would result in a combined company that would be well positioned to serve Prosperity’s customers and communities and allow the combined company to grow on a larger geographical platform;

 

•

the risks and challenges inherent in pursuing a growth strategy for Prosperity in the absence of a transaction like the merger, and the opportunity to achieve a scale of operations that might not be achievable by Prosperity for several years in the absence of the merger, if ever;

 

•

the financial analysis reviewed and discussed with the Prosperity board of directors by Ewing on April 26, 2013, and Ewing’s oral opinion rendered to the Prosperity board of directors on that date (which was subsequently confirmed in writing by delivery of a written opinion dated April 26, 2013) with respect to the fairness of the merger consideration to be received by Prosperity shareholders from a financial point of view;

 

•

the financial terms of the merger;

 

•

the ability for Prosperity shareholders to acquire Ameris common stock as merger consideration, which is more liquid than Prosperity common stock;

 

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•

the interests of Prosperity’s directors and executive officers in the merger, in addition to their interests generally as shareholders, as described under “— Interests of Prosperity Executive Officers and Directors in the Merger”;

 

•

its assessment of the likelihood that the merger would be completed in a timely manner and that management would be able to successfully integrate and operate the businesses of the combined company after the transaction;

 

•

the regulatory and other approvals required in connection with the transaction and the likelihood such approvals would be received in a timely manner and without unacceptable conditions;

 

•

its inability to accurately predict the future operating results and earnings potential of Ameris;

 

•

the potential displacement of Prosperity’s employees and the adverse anticipated effect on those employees;

 

•

the concern over Prosperity eliminating its independence through the merger at a time when the market was evidencing some improvement; and

 

•

while the merger is pending, the diversion of employee efforts to focus on the merger completion, as well as negative employee morale during this time.

The foregoing discussion of the factors considered by the Prosperity board of directors is not intended to be exhaustive, but, rather, includes the material factors considered by the Prosperity board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Prosperity board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The Prosperity board of directors considered all these factors as a whole, including discussions with, and questioning of, Prosperity management and Prosperity’s financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination.

For the reasons set forth above, the Prosperity board of directors determined that the merger is fair to, and in the best interests of, Prosperity and its shareholders, and approved the merger agreement. The Prosperity board of directors unanimously recommends that the Prosperity shareholders vote “FOR” the approval of the merger agreement.

Ameris’s Reasons for the Merger

In reaching its decision to approve the merger agreement, the Ameris board of directors consulted with Ameris’s management, as well as its financial and legal advisors, and considered a number of factors, including:

 

•

its knowledge of Ameris’s business, operations, financial condition, earnings and prospects and of Prosperity’s business, operations, financial condition, earnings and prospects, taking into account the results of Ameris’s due diligence review of Prosperity;

 

•

its belief that Prosperity and Ameris share a compatible community banking model;

 

•

the fact that Prosperity would enable Ameris to expand its existing presence in the Jacksonville, Florida metropolitan area and to enter the market in the Panama City, Florida metropolitan area;

 

•

the belief that, on a pro forma basis giving effect to the merger, the combined entity would be the second largest community bank (based on deposits) in the Jacksonville, Florida metropolitan area;

 

•

the fact that Prosperity shareholders would own no more than             % of the outstanding shares of common stock of the combined company immediately following the merger (assuming 1,181,125 shares of Ameris common stock are issued in the margin and based upon              shares of Ameris common stock outstanding as of             , 2013);

 

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•

the financial and other terms and conditions of the merger agreement, including the fact that no more than 50% of the overall consideration may be in the form of cash, provisions designed to limit the ability of the Prosperity board of directors to entertain third party proposals to acquire Prosperity and provisions providing for payment by Prosperity to Ameris of a termination fee if the merger agreement is terminated under certain circumstances;

 

•

the regulatory and other approvals required in connection with the transaction and the likelihood such approvals would be received in a timely manner and without unacceptable conditions;

 

•

the possibility that other merger and acquisition opportunities would be foregone while finalizing the merger with Prosperity;

 

•

execution risk of data system conversion and possible negative affect on customer relationships; and

 

•

the risk of diverting employee and officer’s attention from the routine business of Ameris towards the completion of the merger and integration of operations.

The foregoing discussion of the factors considered by the Ameris board of directors is not intended to be exhaustive, but rather includes the material factors considered by the Ameris board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Ameris board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The Ameris board of directors considered all these factors as a whole, including discussions with, and questioning of, Ameris management and Ameris’s financial and legal advisors, and overall considered the factors to be favorable to, and to support, its determination.

Opinion of Allen C. Ewing & Co.

Ewing is a nationally recognized investment banking firm with a significant focus on financial institutions headquartered in the southeastern United States. In the ordinary course of its investment banking activities, Ewing is regularly engaged in the valuation of financial institutions and their securities in connection with mergers, acquisitions and divestitures and with other corporate finance transactions. By letter dated April 2, 2013, Prosperity retained Ewing to act as its financial advisor in connection with a possible sale or merger transaction involving Prosperity.

At the April 26, 2013 meeting of the Prosperity board of directors, Ewing presented its financial analysis of the proposed merger and verbally opined that, as of that date, the merger consideration was fair, from a financial point of view, to Prosperity shareholders. Following this meeting, Ewing prepared and delivered its written opinion, also dated April 26, 2013, affirming that the merger consideration was fair, from a financial point of view, to Prosperity shareholders.

The full text of Ewing’s April 26, 2013 opinion is included as Appendix B to this proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Ewing in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the opinion. We urge Prosperity shareholders to read the entire opinion carefully in connection with their consideration of the merger agreement.

Ewing’s opinion is directed to the Prosperity board of directors and relates only to the fairness of the merger consideration to be received by Prosperity shareholders, from a financial point of view. Ewing’s opinion does not address any other aspect of the merger and is not a recommendation to any Prosperity shareholder as to how such shareholder should vote at the special meeting of shareholders.

 

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Information and Material Considered with Respect to the Merger. In arriving at its April 26, 2013 opinion, Ewing, among other things:

 

•

reviewed a draft of the merger agreement;

 

•

held discussions with members of senior management of Prosperity regarding the current business, financial condition, results of operations and business outlook of Prosperity;

 

•

reviewed current and historical consolidated financial statements and other historical financial and operating information of Prosperity that Ewing deemed relevant;

 

•

reviewed and discussed with Prosperity’s senior management the internally prepared financial projections of Prosperity for the year ending December 31, 2013;

 

•

reviewed and analyzed financial and market information relating to publicly traded commercial banking companies considered by Ewing to be reasonably similar to Prosperity;

 

•

considered certain regulatory matters affecting Prosperity, including the review of a Consent Order, dated June 28, 2010, issued to Prosperity Bank by the FDIC and the FOFR and a Written Agreement, dated July 26, 2010, by and between Prosperity and the FRBA;

 

•

reviewed and analyzed the pricing ratios and other financial terms of recent business combinations in the commercial banking industry considered by Ewing to be reasonably similar to those contemplated by the merger;

 

•

held discussions with members of senior management of Ameris regarding Ameris’s current business, its business outlook and the expected benefits to be derived from the merger;

 

•

reviewed current and historical consolidated financial statements of Ameris and reviewed and analyzed other financial information relating to Ameris that Ewing deemed relevant;

 

•

reviewed recently published equity research reports relating to Ameris;

 

•

reviewed publicly available information with respect to current and historical market prices and trading activity of the Ameris common stock;

 

•

reviewed pro forma financial information showing the effect of the merger;

 

•

made an assessment of the current financial market environment in general and the commercial banking sector environment in particular; and

 

•

conducted other due diligence, financial and market studies, analyses and inquiries, and considered other information that Ewing deemed relevant.

In performing its reviews and analyses and in rendering its opinion, Ewing assumed and relied upon, without independent verification, the accuracy and completeness of all financial and other information that was publicly available or otherwise furnished to, reviewed by or discussed with Ewing, and further relied on the assurances of members of senior management of both Prosperity and Ameris that they were not aware of any facts or circumstances that would make such information inaccurate or misleading.

 

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With respect to the financial projections of Prosperity provided to or discussed with it, Ewing has assumed, without independent verification or investigation, that such projections were reasonably prepared on a basis reflecting the best currently available information, estimates and judgments of Prosperity’s senior management as to the future financial performance of Prosperity.

In arriving at its opinion, Ewing did not conduct a physical inspection of the properties and facilities of Prosperity and did not make nor obtain any evaluations or appraisals of the assets or liabilities (including, without limitation, any potential environmental liabilities), contingent or otherwise, of Prosperity, nor did it examine any individual credit files.

The Ewing opinion is necessarily based upon market, economic and other conditions as they existed and could be evaluated, and the information made available to Ewing, as of the date of its opinion. The financial markets in general and the market for the common stock of Ameris, in particular, are subject to volatility, and Ewing’s opinion did not address potential developments in the financial markets or the market for the common stock of Ameris after the date of its opinion. Ewing’s opinion did not address the relative merits of the merger as compared to any alternative business strategies that might exist for Prosperity, nor did it address the effect of any other business combination in which Prosperity might engage. For purposes of its opinion, Ewing assumed that the merger would be consummated substantially in accordance with the terms of the merger agreement.

Subsequent developments may affect Ewing’s opinion although Ewing does not have any obligation to update, revise or reaffirm its opinion after the date of the opinion.

In preparing its opinion, Ewing performed a variety of financial and comparative analyses, a summary of which are described below. The summary is not a complete description of the analyses underlying Ewing’s opinion. The preparation of a fairness opinion is a complex analytic process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, is not readily susceptible to summary description. Accordingly, Ewing believes that its analyses must be considered as an integrated whole and that selecting portions of its analyses and factors, without considering all analyses and factors, could create a misleading or incomplete view of the processes underlying such analyses and Ewing’s opinion.

In performing its analyses, Ewing made numerous assumptions with respect to Prosperity, Ameris, industry performance and general business, economic, market and financial conditions, many of which are beyond the control of Prosperity and Ameris. The estimates contained in these analyses and the valuation ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by such analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty.

Ewing’s opinion was only one of many factors considered by the Prosperity board of directors in its evaluation of the merger, and should not be viewed as determinative of the views of the Prosperity board of directors with respect to the merger or the merger consideration to be received by Prosperity shareholders. The merger consideration was determined on the basis of negotiations between Prosperity and Ameris. Prosperity’s decision to enter into the merger was made solely by the Prosperity board of directors.

The following is a summary of the material financial and comparative analyses presented to the Prosperity board of directors by Ewing on April 26, 2013, in connection with its opinion.

 

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Summary of Proposal. Ewing reviewed the financial terms of the merger which provides that each share of Prosperity common stock shall be converted into the right to receive either 3.125 shares of Ameris common stock or $41.50, subject to the requirement that no more than 50% of the overall merger consideration may be in the form of cash.

For purposes of its presentation to Prosperity’s board of directors on April 26, 2013, Ewing used the midpoint between the high and low closing per share prices of Ameris common stock from January 2, 2013 through April 25, 2013. Such midpoint price was $13.65 per share which, when multiplied by 1,181,125 shares (i.e., Prosperity’s 377,960 outstanding shares of common stock times 3.125), produced merger consideration of $16,122,356. Based upon financial information for Prosperity as of and for the year ended December 31, 2012, Ewing calculated the following transaction ratios:

 

Transaction Ratios
Transaction value/Earnings			13.80x
Transaction value/Book value			89.74%
Transaction value/Tangible book value			90.94%

Analysis of Selected Publicly Traded Comparable Companies. Ewing identified certain publicly traded financial institutions which it determined to be generally similar to Prosperity (the “Prosperity Peer Group”). The Prosperity Peer Group consisted of the following 34 publicly traded banks and bank holding companies headquartered in the southeastern United States with total assets between $500 million and $1 billion and with NPAs/Assets not exceeding 6.5% as of December 31, 2012:

 

Prosperity Peer Group
1st Financial Services Corporation		Georgia-Carolina Bancshares, Inc.
Access National Corporation		High Point Bank Corporation
ASB Bancorp, Inc.		Jacksonville Bancorp, Inc.
Auburn National Bancorporation, Inc.		Jefferson Bancshares, Inc.
C&F Financial Corporation		MVB Financial Corp.
Carolina Bank Holdings, Inc.		New Century Bancorp, Inc.
Chesapeake Financial Shares, Inc.		North State Bancorp
Citizens Holding Company		Old Point Financial Corporation
Eagle Financial Services, Inc.		Security Federal Corporation
F&M Bank Corp.		SouthCrest Financial Group, Inc.
Fauquier Bankshares, Inc.		Southern First Bancshares, Inc.
First Bancshares, Inc.		Southern National Bancorp
First Capital Bancorp, Inc.		Stonegate Bank
First Community Corporation		Valley Financial Corporation
First National Bank of Shelby		Virginia Heritage Bank
First National Corporation		Virginia National Bank
First South Bancorp, Inc.		Xenith Bankshares, Inc.

Ewing reviewed selected financial data as of December 31, 2012, of each institution within the Prosperity Peer Group, calculated the average and median amounts of such data and compared the averages and medians to the corresponding data of Prosperity as set forth in the table below.

 

Prosperity Peer Group Analysis
		Prosperity as of 12/31/2012				Peer Group Average				Peer Group Median
Total assets (in thousands)		$	741,708			$	703,921			$	711,920

 

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Prosperity Peer Group Analysis
		Prosperity as of 12/31/2012				Peer Group Average				Peer Group Median
Net loans (in thousands)			$455,479			$	459,837			$	428,314
Total deposits (in thousands)			$477,369			$	568,304			$	577,299
Return on average assets			0.15	%			0.32	%			0.71	%
Return on average equity			6.46	%			5.84	%			7.49	%
Net interest margin			3.28	%			3.82	%			3.69	%
Equity/Assets			2.42	%			9.90	%			9.29	%
Efficiency ratio			86.95	%			69.54	%			67.70	%
Nonperforming assets/Total assets (including restructured loans)			4.51	%			3.01	%			2.77	%
Loan loss reserve/Gross loans			1.77	%			1.96	%			1.68	%
Price/LTM earnings			Not publicly traded				12.45x				10.26x
Price/Book value			Not publicly traded				88.65	%			89.73	%
Price/Tangible book value			Not publicly traded				92.93	%			93.67	%

Source: SNL Financial

Ewing applied the average and median price multiples (using pricing data as of March 25, 2013) from the table above to Prosperity’s earnings, book value and tangible book value as of and for the year ended December 31, 2012. This analysis produced implied values of Prosperity common stock ranging from $11,984,000 to $16,607,000. Ewing noted that the merger consideration of $16,122,356 (used for purposes of its presentation to the Prosperity board of directors) fell within the upper end of this range.

In view of Prosperity’s level of nonperforming assets which, as of December 31, 2012, equaled 4.51% of total assets, Ewing identified ten institutions within the Prosperity Peer Group with NPAs/Assets ratios in excess of 4%. Ewing calculated the average and median price multiples of the earnings, book value and tangible book value of such institutions which, when applied to the corresponding data of Prosperity, produced implied values of Prosperity common stock ranging from $10,746,000 to $14,618,000. Ewing noted that the merger consideration of $16,122,356 (used for purposes of its presentation to the Prosperity board of directors) exceeded this range.

Ewing recognized that not any of the companies in the Prosperity Peer Group were identical to Prosperity. Consequently, the analysis necessarily involves complex considerations and judgments concerning differences in financial and operating characteristics of the peer group companies and other factors that would affect their market values.

Analysis of Selected Merger and Acquisition Transactions. Ewing reviewed and analyzed the financial terms, to the extent publicly available, of the 11 merger and acquisition transactions involving the following banks and bank holding companies headquartered in the southeastern United States with total assets of $400 million to $1 billion and announced between April 1, 2011 and March 31, 2013:

 

Buyer Name		Target Name
SCBT Financial Corp.		Peoples Bancorporation, Inc.
WashingtonFirst Bankshares, Inc.		Alliance Bankshares Corp.
Park Sterling Corporation		Citizens South Banking Corp.
BNC Bancorp		First Trust Bank
Customers Bancorp, Inc.		Acacia FSB

 

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Buyer Name		Target Name
City Holding Co.		Community Financial Corp.
SCBT Financial Corp.		Savannah Bancorp, Inc.
Crescent Financial Bancshares		ECB Bancorp, Inc.
Old Florida Bancshares, Inc.		New Traditions National Bank
Bank of the Ozarks, Inc.		First National Bank of Shelby
Bond Street Holdings, Inc.		Atlantic Coast Financial Corp.

For the selected transactions, Ewing analyzed, among other things, the transaction price as a multiple of earnings and as a percentage of book value and tangible book value. All multiples and percentages for the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. Ewing observed that the majority of the above target institutions either did not have earnings or had insignificant earnings such that meaningful average and median earnings multiples were impossible to calculate. The following table sets forth the average and median multiples and percentages indicated by this analysis:

 

Comparable Transactions Analysis
		Average Multiple/%		Median Multiple/%
Transaction price/Earnings		Not Meaningful		Not Meaningful
Transaction price/Book value		73.47%		75.86%
Transaction price/Tangible book value		73.97%		75.86%

Source: SNL Financial

Ewing applied the average and median multiples and percentages resulting from the analysis above to Prosperity’s book value and tangible book value, as of December 31, 2012. This analysis produced implied values of Prosperity’s common stock ranging from $13,114,000 to $13,629,000. Ewing noted that the merger consideration of $16,122,356 (used for purposes of its presentation to the Prosperity board of directors) exceeded this range.

Ewing recognized that no transaction considered in the analysis of selected merger and acquisition transactions is identical to the proposed merger. All multiples and percentages for the selected transactions were based on public information available at the time of announcement of such transaction, without taking into account differing market and other conditions during the periods in which the selected transactions occurred.

Prosperity has paid Ewing a fee of $25,000 for Ewing’s advisory services and its preparation and delivery of the opinion. Prosperity has also reimbursed certain of Ewing’s reasonable out-of-pocket expenses incurred in connection with its engagement and to indemnify Ewing and its officers, directors, employees, affiliates, agents, counsel and other advisors against certain expenses and liabilities, including liabilities under securities laws. Except for the $25,000 payment to Ewing discussed above, Prosperity has made no other payments to Ewing during the last two years.

Material U.S. Federal Income Tax Consequences of the Merger

The following discussion sets forth the opinion of Rogers & Hardin LLP, counsel to Ameris, as to the material U.S. federal income tax consequences of the merger to holders of Prosperity common stock. This discussion is based on currently existing provisions of the Code, existing regulations thereunder (including final, temporary or proposed) and current administrative rulings and court decisions, all of which are subject to change. Any such change, which may or may not be retroactive, could alter the tax consequences described herein and thus affect the continuing validity of the opinion and this discussion. The following discussion is intended only as a general summary of the material federal income tax consequences of the merger and is neither tax or legal advice nor a complete analysis or listing of all potential tax effects relevant to a decision on whether to vote in favor of approval of the merger agreement.

 

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This discussion applies only to “U.S. holders” (as defined below) of Prosperity common stock who hold their shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, the discussion does not address all aspects of federal income taxation that may be relevant to Prosperity shareholders in light of their particular circumstances or that may be applicable to them if they are subject to special treatment under the Code, including, without limitation, shareholders who are:

 

•

foreign persons or U.S. persons whose “functional currency” (as defined in the Code) is not the U.S. dollar;

 

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financial institutions, mutual funds or insurance companies;

 

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dealers in securities or foreign currencies or traders in securities who elect to apply a mark-to-market method of accounting;

 

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tax-exempt organizations;

 

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S corporations, partnerships or other pass-through entities;

 

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Prosperity shareholders whose shares are qualified small business stock for purposes of Section 1202 of the Code or who may otherwise be subject to the alternative minimum tax provisions of the Code;

 

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Prosperity shareholders who received their Prosperity common stock through the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan; or

 

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Prosperity shareholders who hold their Prosperity common stock as part of a “hedge,” “straddle,” “constructive sale,” or “conversion” transaction.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Prosperity common stock that is for U.S. federal income tax purposes: (i) an individual citizen or resident of the United States (including certain former citizens and former long-term residents); (ii) a corporation, or entity treated as a corporation for U.S. federal income tax purposes, or created or organized in or under the laws of the United States or any state thereof or the District of Columbia; (iii) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons as defined in Section 7701(a)(30) of the Code have the authority to control all substantial decisions of the trust or (b) such trust has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes; or (iv) an estate, the income of which is subject to U.S. federal income tax, regardless of its source.

The U.S. federal income tax consequences to a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds Prosperity common stock generally will depend on the status of the partner and the activities of the partnership. Partners in a partnership holding Prosperity common stock should consult their own tax advisors.

 

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This discussion does not address the tax consequences of the merger under state, local or foreign tax laws. This discussion also does not address the tax consequences of any transaction other than the merger.

None of the matters described herein will be binding on the Internal Revenue Service (the “IRS”). Neither Ameris nor Prosperity intends to request any ruling from the IRS as to the U.S. federal income tax consequences of the merger. Consequently, no assurance can be given that the IRS will not assert, or that a court would not sustain, a position contrary to any of the tax consequences set forth below.

PROSPERITY SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE MERGER IN THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICABILITY AND EFFECTS OF U.S. FEDERAL (INCLUDING THE ALTERNATIVE MINIMUM TAX), STATE, LOCAL OR FOREIGN AND OTHER TAX LAWS AND OF CHANGES IN THOSE LAWS, AS WELL AS OF THE OWNERSHIP AND DISPOSITION OF THE SHARES OF AMERIS COMMON STOCK RECEIVED IN THE MERGER.

Tax Classification of the Merger. The merger is expected to qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code. However, as discussed further below, due to the continuity of interest requirement described in Treasury Regulations Section 1.368-1(e), it is not clear as of the date hereof nor will it be clear prior to the special meeting (or otherwise prior to the closing date of the merger) whether the merger will so qualify. Qualification as a reorganization is not a condition to consummation of the merger.

Very generally, for the merger to qualify as a tax-free reorganization, numerous requirements, including the “continuity of interest” requirement as described in Treasury Regulations Section 1.368-1(e), must be satisfied. Under the applicable Treasury Regulations, the “continuity of interest” requirement is satisfied if a proprietary interest in Prosperity is preserved, which, under regulatory guidance will be the case, if Ameris common stock constitutes at least 40% of the value of the aggregate consideration Prosperity shareholders receive in the merger. In determining whether this requirement is satisfied, the aggregate per share cash consideration, cash paid in lieu of issuing fractional shares of Ameris common stock, cash paid to dissenters and cash equal to the Pricing Differential, if applicable (see below), are all considered consideration other than Ameris common stock that is received by Prosperity shareholders in the merger.

In a transaction in which the “signing date rule” applies, the continuity of interest requirement would be tested on the last business day before the execution of the merger agreement. The signing date rule generally applies when the consideration to be received in the merger is “fixed” at the time of signing. As discussed in “The Merger Agreement — Merger Consideration,” if the Average Ameris Stock Price is less than $11.10 per share and, based on the Average Ameris Stock Price, the Ameris common stock underperforms the Keefe Bruyette & Woods Regional Banking Index by more than 20%, considering the performance of such Index during the same period used to calculate the Average Ameris Stock Price as compared to the closing price of such Index on the day immediately prior to the date of the merger agreement, then Prosperity may terminate the merger agreement unless Ameris contributes additional cash consideration equal to the Pricing Differential for payment to Prosperity shareholders electing to receive the per share stock consideration in the merger. As a result, Prosperity and Ameris have assumed, and the disclosure reflects the assumption, that the IRS would not regard the consideration to be received by the Prosperity shareholders in the merger as being “fixed” for this purpose and, therefore, that the continuity of interest requirement must be tested as of the closing date rather than the signing date.

 

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Because the continuity of interest requirement will be tested as of the closing date, the value of the Ameris common shares must be determined as of that date. As a result, because the value of the shares of Ameris common stock received by holders of Prosperity common stock may fluctuate until the closing of the merger, it is unclear as of the date of this proxy statement/prospectus, and it will be unclear at the time of the special meeting, whether the “continuity of interest” requirement will be satisfied and therefore whether the merger will be able to qualify as a tax-free reorganization, assuming all other requirements are met.

Tax Consequences to Prosperity Shareholders Who Exchange Their Shares of Prosperity Common Stock if the Merger Qualifies as a Tax-Free Reorganization. If the merger qualifies as a tax-free reorganization, then the U.S. federal income tax consequences to U.S. holders who exchange their shares of Prosperity common stock in the merger will be as follows:

 

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Gain will be recognized by a U.S. holder equal to the lesser of (i) the sum of the total per share cash consideration, cash in lieu of fractional shares and any cash in payment of the Pricing Differential received by the Prosperity shareholder (such sum being referred to throughout this “Material U.S. Federal Income Tax Consequences of the Merger” discussion as the “total cash consideration”) and (ii) the difference between (a) the sum of the total cash consideration received plus the total per share consideration received (i.e., the “amount realized” under the Code) and (b) the Prosperity shareholder’s basis in its shares of Prosperity common stock.

 

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No loss will be recognized by a U.S. holder other than losses, if any, realized in connection with the receipt of cash in lieu of a fractional share interest, as described below.

 

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A U.S. holder’s initial tax basis in the Ameris common stock received will equal the Prosperity shareholder’s aggregate adjusted basis in the shares of Prosperity common stock surrendered in the merger plus the amount of gain recognized (as provided above, but excluding any gain attributable to cash received in lieu of fractional shares) minus the total cash consideration received (excluding cash received in lieu of fractional shares).

 

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A U.S. holder’s holding period of the Ameris common stock will include the holding period for the Prosperity common stock surrendered in exchange therefor.

 

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A U.S. holder receiving cash in lieu of a fractional share interest will be treated as having received a fractional share of Ameris common stock in the merger and as having that fractional share subsequently redeemed by Ameris.

Any gain that holders of Prosperity common stock recognize in connection with the merger generally will constitute capital gain and will constitute long-term capital gain if such holders have held (or are treated as having held) their Prosperity common stock for more than one (1) year as of the date of the merger. Long-term capital gain of non-corporate holders of Prosperity common stock is generally taxed at preferential rates. (Such gain may also be subject to an additional 3.8% Medicare Tax, as discussed below.) In some cases, particularly if a holder actually or constructively owns Ameris stock other than Ameris stock received pursuant to the merger, the recognized gain could be treated as having the effect of a distribution of a dividend under the tests set forth in Section 302 of the Code, in which case such gain could be treated as dividend income. Because the possibility of dividend treatment depends primarily upon each holder’s particular circumstance, including the application of the constructive ownership rules, holders of Prosperity common stock should consult their tax advisors regarding the application of the foregoing rules to their particular circumstances.

 

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The amount of gain or loss must be determined separately for each block of Prosperity common stock (i.e., shares acquired at the same cost in a single transaction) exchanged as part of the merger. The deductibility of capital losses is subject to limitations under the Code.

U.S. holders who exchange their shares of Prosperity common stock in the merger will be required to retain records pertaining to the merger. U.S. holders who owned at least 1% (by vote or value) of the total outstanding Prosperity common stock before the completion of the merger or whose tax basis in the Prosperity common stock surrendered in the merger equals or exceeds $1 million are subject to certain reporting requirements with respect to the merger.

Tax Consequences to Prosperity Shareholders Who Exchange Their Shares of Prosperity Common Stock if the Merger Fails to Qualify as a Tax-Free Reorganization. If the merger fails to qualify as a tax-free reorganization, then the exchange by a U.S. holder of shares of Prosperity common stock pursuant to the merger will be a fully taxable transaction for U.S. federal income tax purposes (and may also be a taxable transaction under applicable state, local, and foreign income or other tax laws). For U.S. federal income tax purposes, a U.S. holder generally will recognize gain or loss at the time of the merger equal to the difference, if any, between:

 

•

the sum of (i) the total cash consideration and (ii) the total per share stock consideration received by the U.S. Holder in exchange for such Prosperity common stock (again, the “amount realized” under the Code); and

 

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the U.S. holder’s adjusted tax basis in such Prosperity common stock.

Any gain that holders of Prosperity common stock recognize in connection with the merger generally will constitute capital gain and will constitute long-term capital gain if such holders have held (or are treated as having held) their Prosperity common stock for more than one year as of the date of the merger. Long-term capital gain of non-corporate holders of Prosperity common stock is generally taxed at preferential rates. (Such gain may also be subject to an additional 3.8% Medicare Tax, as discussed below.) In some cases, particularly if a holder actually or constructively owns Ameris stock other than Ameris stock received pursuant to the merger, the recognized gain could be treated as having the effect of a distribution of a dividend under the tests set forth in Section 302 of the Code, in which case such gain could be treated as dividend income. Because the possibility of dividend treatment depends primarily upon each holder’s particular circumstance, including the application of the constructive ownership rules, holders of Prosperity common stock should consult their tax advisors regarding the application of the foregoing rules to their particular circumstances.

The amount of gain or loss must be determined separately for each block of Prosperity common stock (i.e., shares acquired at the same cost in a single transaction) exchanged as part of the merger. The deductibility of capital losses is subject to limitations under the Code.

A U.S. holder’s initial tax basis in the Ameris common stock received in the merger will equal the fair market value of such stock upon receipt, and the holding period for such stock will begin on the day following the date of the merger.

Treatment of Dissenting Prosperity Shareholders Who Exercise Statutory Appraisal Rights. The discussion above does not apply to Prosperity shareholders who dissent to the merger by properly perfecting statutory appraisal rights with respect to such shareholder’s shares of Prosperity capital stock. See “The Merger — Appraisal Rights for Prosperity Shareholders.”

 

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Holders of shares of Prosperity common stock who dissent with respect to the merger and who receive cash in respect of their shares of Prosperity common stock will be treated as if the Ameris common stock had been received and then redeemed for cash by Ameris. A holder will generally recognize capital gain or loss equal to the difference between the amount of cash received and the holder’s aggregate tax basis in the Prosperity shares unless the payment under the holder’s particular facts and circumstances is deemed to have the effect of a dividend distribution (as discussed above) and not a redemption treated as an exchange under the principles of Section 302 of the Code. Any Prosperity shareholder that plans to exercise appraisal rights in connection with the merger is urged to consult its own tax advisor to determine the relevant tax consequences.

3.8% Medicare Tax On “Net Investment Income.” Beginning in 2013, U.S. holders that are individuals, estates, and certain trusts are now subject to an additional 3.8% tax on all or a portion of their “net investment income,” which may include any gain realized or amounts received with respect to their shares of Prosperity common stock, to the extent of their net investment income that, when added to their other modified adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married taxpayer filing a joint return (or a surviving spouse), or $125,000 for a married individual filing a separate return. Prosperity shareholders should consult their own tax advisors with respect to the applicability of this additional 3.8% tax on any payments received by such shareholder.

Information Reporting and Backup Withholding. Generally, non-corporate Prosperity shareholders may be subject to information reporting and backup withholding (currently at a rate of 28%) with respect to any cash received, in the event the merger qualifies as a tax-free reorganization, or with respect to the entire consideration received, in the event the merger does not qualify as a tax-free reorganization. However, backup withholding will not apply to a Prosperity shareholder who furnishes a valid taxpayer identification number and complies with certain certification procedures or otherwise establishes an exemption from backup withholding. Amounts withheld, if any, are generally not an additional tax and may be refunded or credited against the Prosperity shareholder’s U.S. federal income tax liability, provided that the Prosperity shareholder timely furnishes the required information to the IRS.

TAX MATTERS CAN BE QUITE COMPLICATED. THE FOREGOING SUMMARY OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER. IN ADDITION, THE SUMMARY DOES NOT ADDRESS TAX CONSEQUENCES THAT MAY VARY WITH, OR ARE CONTINGENT ON, INDIVIDUAL CIRCUMSTANCES. MOREOVER, THE SUMMARY DOES NOT ADDRESS ANY U.S. FEDERAL NON-INCOME TAX OR ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE MERGER, NOR ANY TAX CONSEQUENCES OF ANY TRANSACTION OTHER THAN THE MERGER. ACCORDINGLY, EACH PROSPERITY SHAREHOLDER IS STRONGLY URGED TO CONSULT HIS, HER, OR ITS OWN TAX ADVISOR TO DETERMINE THE PARTICULAR FEDERAL, STATE, LOCAL, OR FOREIGN INCOME OR OTHER TAX CONSEQUENCES OF THE MERGER TO SUCH PROSPERITY SHAREHOLDER.

Accounting Treatment

The merger will be accounted for using the acquisition method of accounting with Ameris treated as the acquiror. Under this method of accounting, Prosperity’s assets and liabilities will be recorded by Ameris at their respective fair values as of the date of completion of the merger. Financial statements of Ameris issued after the merger will reflect these values and will not be restated retroactively to reflect the historical financial position or results of operations of Prosperity.

 

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Regulatory Approvals

Under federal law, the merger must be approved by the Federal Reserve and the bank merger must be approved by the FDIC. The U.S. Department of Justice may review the impact of the merger and the bank merger on competition. The GDBF has provided its approval of both the merger and the bank merger.

Once the Federal Reserve approves the merger, we must wait for up to thirty (30) days before we can complete the merger. If, however, there are no adverse comments from the U.S. Department of Justice and we receive permission from the Federal Reserve to do so, the merger may be completed on or after the fifteenth (15^th) day after approval from the Federal Reserve. Similarly, after we receive approval of the bank merger from the FDIC, we must wait for up to thirty (30) days before we can complete the bank merger. If, however, there are no adverse comments from the U.S. Department of Justice and we receive permission from the FDIC to do so, the bank merger may be completed on or after the fifteenth (15^th) day after approval from the FDIC.

As of the date of this proxy statement/prospectus, all of the required regulatory applications have been filed. There is no assurance as to whether all regulatory approvals will be obtained or as to the dates of the approvals. There also can be no assurance that the regulatory approvals, if received, will not contain any condition, or carryover of any condition applicable to Prosperity or Prosperity Bank, that would increase any of the minimum regulatory capital requirements of Ameris following the merger or of Ameris Bank following the bank merger. See “The Merger Agreement — Conditions to Completion of the Merger.”

Appraisal Rights for Prosperity Shareholders

Holders of Prosperity common stock as of the record date are entitled to appraisal rights under the FBCA. Pursuant to Section 607.1302 of the FBCA, a Prosperity shareholder who does not wish to accept the consideration to be received pursuant to the terms of the merger agreement may dissent from the merger and elect to receive the fair value of his or her shares of Prosperity common stock immediately prior to the date of the special meeting to vote on the proposal to approve the merger agreement, excluding any appreciation or depreciation in anticipation of the merger unless exclusion would be inequitable. You should note that if 10% or more of the outstanding shares of Prosperity common stock validly exercise, or remain entitled to exercise, their appraisal rights, then Ameris will have the right to terminate the merger agreement.

In order to exercise appraisal rights, a dissenting Prosperity shareholder must strictly comply with the statutory procedures of Sections 607.1301 through 607.1333 of the FBCA, which are summarized below. A copy of the full text of those Sections is included as Appendix C to this proxy statement/prospectus. Prosperity shareholders are urged to read Appendix C in its entirety and to consult with their legal advisors. Each Prosperity shareholder who desires to assert his or her appraisal rights is cautioned that failure on his or her part to adhere strictly to the requirements of Florida law in any regard will cause a forfeiture of any appraisal rights.

Procedures for Exercising Dissenters’ Rights of Appraisal. The following summary of Florida law is qualified in its entirety by reference to the full text of the applicable provisions of the FBCA, a copy of which are included as Appendix C to this proxy statement/prospectus.

 

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A dissenting shareholder, who desires to exercise his or her appraisal rights, must file with Prosperity, prior to the taking of the vote on the merger, a written notice of intent to demand payment for his or her shares if the merger is effectuated. A vote against the merger agreement will not alone be deemed to be the written notice of intent to demand payment and will not be deemed to satisfy the notice requirements under the FBCA. A dissenting shareholder need not vote against the merger agreement, but cannot vote, or allow any nominee who holds such shares for the dissenting shareholder to vote, any of his or her shares of Prosperity common stock in favor of the merger agreement. A vote in favor of the merger agreement will constitute a waiver of the shareholder’s appraisal rights. Such written notification should be delivered either in person or by mail (certified mail, return receipt requested, being the recommended form of transmittal) to:

The Prosperity Banking Company

100 Southpark Boulevard

St. Augustine, Florida 32086

Attn: Eddie Creamer

All such notices must be signed in the same manner as the shares are registered on the books of Prosperity. If a Prosperity shareholder has not provided written notice of intent to demand fair value before the vote on the proposal to approve the merger agreement is taken at the special meeting, then the Prosperity shareholder will be deemed to have waived his or her appraisal rights.

Within ten (10) days after the completion of the merger, Ameris must provide to each Prosperity shareholder who filed a notice of intent to demand payment for his or her shares a written appraisal notice and an appraisal election form that specifies, among other things:

 

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the date of the completion of the merger;

 

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Ameris’s estimate of the fair value of the shares of Prosperity common stock;

 

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where to return the completed appraisal election form and the shareholder’s stock certificates and the date by which they must be received by Ameris or its agent, which date may not be fewer than forty (40), nor more than sixty (60), days after the date Ameris sent the appraisal notice and appraisal election form to the shareholder; and

 

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the date by which a notice from the Prosperity shareholder of his or her desire to withdraw his or her appraisal election must be received by Ameris, which date must be within twenty (20) days after the date set for receipt by Ameris of the appraisal election form from the Prosperity shareholder.

The form must also contain Ameris’s offer to pay to the Prosperity shareholder the amount that it has estimated as the fair value of the shares of Prosperity common stock, and request certain information from the Prosperity shareholder, including:

 

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the shareholder’s name and address;

 

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the number of shares as to which the shareholder is asserting appraisal rights;

 

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whether the shareholder voted for the merger;

 

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whether the shareholder accepts the offer of Ameris to pay its estimate of the fair value of the shares of Prosperity common stock to the shareholder; and

 

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if the shareholder does not accept the offer of Ameris, the shareholder’s estimated fair value of the shares of Prosperity common stock and a demand for payment of the shareholder’s estimated value plus interest.

 

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A dissenting shareholder must submit the certificate(s) representing his or her shares with the appraisal election form. Any dissenting shareholder failing to return a properly completed appraisal election form and his or her stock certificates within the period stated in the form will lose his or her appraisal rights and be bound by the terms of the merger agreement.

Upon returning the appraisal election form, a dissenting shareholder will be entitled only to payment pursuant to the procedure set forth in the applicable sections of the FBCA and will not be entitled to vote or to exercise any other rights of a shareholder, unless the dissenting shareholder withdraws his or her demand for appraisal within the time period specified in the appraisal election form.

A dissenting shareholder who has delivered the appraisal election form and his or her Prosperity common stock certificates may decline to exercise appraisal rights and withdraw from the appraisal process by giving written notice to Ameris within the time period specified in the appraisal election form. Thereafter, a dissenting shareholder may not withdraw from the appraisal process without the written consent of Ameris. Upon such withdrawal, the right of the dissenting shareholder to be paid the fair value of his or her shares will cease, and he or she will be reinstated as a shareholder and will be entitled to receive the merger consideration.

If the dissenting shareholder accepts the offer of Ameris in the appraisal election form to pay Ameris’s estimate of the fair value of the shares of Prosperity common stock, payment for the shares of the dissenting shareholder is to be made within ninety (90) days after the receipt of the appraisal election form by Ameris or its agent. Upon payment of the agreed value, the dissenting shareholder will cease to have any interest in such shares.

A shareholder must demand appraisal rights with respect to all of the shares registered in his or her name, except that a record shareholder may assert appraisal rights as to fewer than all of the shares registered in the record shareholder’s name but which are owned by a beneficial shareholder, if the record shareholder objects with respect to all shares owned by the beneficial shareholder. A record shareholder must notify Prosperity in writing of the name and address of each beneficial shareholder on whose behalf appraisal rights are being asserted. A beneficial shareholder may assert appraisal rights as to any shares held on behalf of the beneficial shareholder only if the beneficial shareholder submits to Prosperity the record shareholder’s written consent to the assertion of such rights before the date specified in the appraisal notice, and does so with respect to all shares that are beneficially owned by the beneficial shareholder.

Section 607.1330 of the FBCA addresses what should occur if a dissenting shareholder fails to accept the offer of Ameris to pay the value of the shares as estimated by Ameris, and Ameris fails to comply with the demand of the dissenting shareholder to pay the value of the shares as estimated by the dissenting shareholder, plus interest.

If a dissenting shareholder refuses to accept the offer of Ameris to pay the value of the shares as estimated by Ameris, and Ameris fails to comply with the demand of the dissenting shareholder to pay the value of the shares as estimated by the dissenting shareholder, plus interest, then within sixty (60) days after receipt of a written demand from any dissenting shareholder given within sixty (60) days after the date on which the merger was effected, Ameris shall, or at its election at any time within such period of sixty (60) days may, file an action in any court of competent jurisdiction in the county in Florida where the registered office of Ameris, maintained pursuant to Florida law, is located requesting that the fair value of such shares be determined by the court.

 

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If Ameris fails to institute a proceeding within the above-prescribed period, any dissenting shareholder may do so in the name of Ameris. A copy of the initial pleading will be served on each dissenting shareholder. Ameris is required to pay each dissenting shareholder the amount found to be due within ten (10) days after final determination of the proceedings, which amount may, in the discretion of the court, include a fair rate of interest, which will also be determined by the court. Upon payment of the judgment, the dissenting shareholder ceases to have any interest in such shares.

Section 607.1331 of the FBCA, provides that the costs of a court appraisal proceeding, including reasonable compensation for, and expenses of, appraisers appointed by the court, will be determined by the court and assessed against Ameris, except that the court may assess costs against all or some of the dissenting shareholders, in amounts determined by the court, to the extent that the court finds such shareholders acted arbitrarily, vexatiously or not in good faith with respect to their appraisal rights. The court also may assess the fees and expenses of counsel and experts for the respective parties, in amounts determined by the court, against: (i) Ameris and in favor of any or all dissenting shareholders if the court finds Ameris did not substantially comply with the notification provisions set forth in Sections 607.1320 and 607.1322 of the FBCA; or (ii) either Ameris or a dissenting shareholder, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the appraisal rights. If the court in an appraisal proceeding finds that the services of counsel for any dissenting shareholder were of substantial benefit to other dissenting shareholders, and that the fees for those services should not be assessed against Ameris, the court may award to such counsel reasonable fees to be paid out of the amounts awarded the dissenting shareholders who were benefited. To the extent that Ameris fails to make a required payment when a dissenting shareholder accepts Ameris’s offer to pay the value of the shares as estimated by Ameris, the dissenting shareholder may sue directly for the amount owed and, to the extent successful, shall be entitled to recover from Ameris all costs and expenses of the suit, including counsel fees.

For a discussion of tax consequences with respect to dissenting shares, see “The Merger — Material U.S. Federal Income Tax Consequences of the Merger.”

BECAUSE OF THE COMPLEXITY OF THE PROVISIONS OF FLORIDA LAW RELATING TO DISSENTERS’ APPRAISAL RIGHTS, SHAREHOLDERS WHO ARE CONSIDERING DISSENTING FROM THE MERGER ARE URGED TO CONSULT THEIR OWN LEGAL ADVISORS.

Board of Directors and Management of Ameris Following the Merger

The directors and officers of Ameris immediately prior to the effective time of the merger will be the directors of the surviving company and will hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. Information regarding the executive officers and directors of Ameris is contained in documents filed by Ameris with the SEC and incorporated by reference into this proxy statement/prospectus, including Ameris’s Annual Report on Form 10-K for the year ended December 31, 2012 and its Definitive Proxy Statement on Schedule 14A for its 2013 annual meeting, filed with the SEC on April 5, 2013. See “Documents Incorporated By Reference.”

 

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Interests of Prosperity Executive Officers and Directors in the Merger

In the merger, the directors and executive officers of Prosperity and Prosperity Bank will receive the same merger consideration for their Prosperity shares as the other Prosperity shareholders. In considering the recommendation of the Prosperity board of directors that you vote to approve the merger agreement, you should be aware that some of the executive officers and directors of Prosperity and Prosperity Bank may have interests in the merger and may have arrangements, as described below, that may be considered to be different from, or in addition to, those of Prosperity shareholders generally. The Prosperity board of directors was aware of these interests and considered them, among other matters, in reaching its decisions to approve the merger agreement and to recommend that you vote in favor of approving the merger agreement. See “— Prosperity’s Reasons for the Merger; Recommendation of the Prosperity Board of Directors.”

Prosperity Stock Options. The merger agreement requires Prosperity to cause all outstanding and unexercised options to purchase shares of Prosperity common stock awarded under the Prosperity stock plans be canceled prior to the effective time of the merger. The termination of the Prosperity stock options (by their own terms or otherwise) is a condition to Ameris’s obligation to complete the merger. See “The Merger Agreement — Conditions to Completion of the Merger.”

No payment will be made to any holder of Prosperity stock options with respect to their cancellation of Prosperity stock options, except that certain executive officers of Prosperity or Prosperity Bank will receive, at the closing of the merger, shares of restricted Ameris common stock (not to exceed 25,000 shares in the aggregate) in respect of the cancellation of certain of their Prosperity stock options. Specifically, each of Eddie Creamer (President and Chief Operating Officer of Prosperity and President and Chief Executive Officer of Prosperity Bank) and Christopher J. Kamienski, Shirley P. Fiano and Kevin Haynie (each an executive officer of Prosperity Bank) will receive, at the closing of the merger, 16,277, 3,701, 2,511 and 2,511 shares of restricted Ameris common stock, respectively. The shares of restricted Ameris common stock will vest ninety (90) days after the closing date of the merger.

Employment Agreement with Eddie Creamer. As a condition of Ameris’s obligation to complete the merger, Mr. Creamer will enter into an employment agreement with Ameris in a form mutually satisfactory to Mr. Creamer and Ameris. Ameris anticipates that the employment agreement with Mr. Creamer will provide that Mr. Creamer serve as an officer of Ameris Bank for a three-year period, unless the agreement is terminated before such time for specific causes to be described in the employment agreement. Ameris anticipates that pursuant to the employment agreement:

 

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Mr. Creamer will receive an annual base salary of $250,000, with the potential of cash bonuses pursuant to any incentive compensation plans adopted by Ameris, with such bonuses to be determined by Ameris’s board of directors in its sole discretion;

 

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Mr. Creamer will be entitled to: (i) participate in any present and future employee benefit, retirement and compensation plans (including Ameris’s 401(k) Profit Sharing Plan); (ii) participate in Ameris’s hospitalization, major medical, disability and group life insurance plans; (iii) four (4) weeks paid vacation during each calendar year of his employment; (iv) reimbursement by Ameris for all reasonable business expenses incurred in the course of his employment; (v) an automobile provided by Ameris for use in the performance of his duties; (vi) reimbursement for all mileage driven by Mr. Creamer in his personal automobile in connection with the performance of his duties; and (vii) a country club membership for business and personal use;

 

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if the employment agreement is terminated by Ameris without cause or by Mr. Creamer for good reason, then Mr. Creamer will be entitled to receive severance benefits consisting of a continuation of compensation payments under the employment agreement for the lesser of twelve (12) months from the date of termination and the remainder of the term of the employment agreement; and

 

•

if the employment agreement is terminated by Mr. Creamer upon a change of control of Ameris, or if the employment agreement is terminated by Ameris or Mr. Creamer without cause or reason during the initial seven (7) months of the term of the employment agreement, then Mr. Creamer will be entitled to receive severance benefits consisting of a continuation of compensation payments under the employment agreement for twelve (12) months from the date of termination of the employment agreement.

The form of employment agreement which Ameris anticipates entering into with Mr. Creamer in connection with the merger is filed as an exhibit to the Registration Statement of which this proxy statement/prospectus forms a part.

Employment Agreements with Christopher J. Kamienski, Shirley P. Fiano and Kevin Haynie. As a condition of Ameris’s obligation to complete the merger, each of Mr. Kamienski, Ms. Fiano and Mr. Haynie will enter into employment agreements with Ameris in a form mutually satisfactory to Ameris and such person party to the agreement. Ameris anticipates that the employment agreements with Mr. Kamienski, Ms. Fiano and Mr. Haynie will provide that they each serve as an officer of Ameris Bank for a two-year period, unless the agreements are terminated before such time for specific causes to be described in each employment agreement. Ameris anticipates that, pursuant to the employment agreements:

 

•

Mr. Kamienski, Ms. Fiano and Mr. Haynie will receive an annual base salary of $171,000, $171,000 and $143,500, respectively, with the potential of cash bonuses of up to 30% of their annual base salaries pursuant to any incentive

 

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compensation plans adopted by Ameris, with such bonuses to be determined by Ameris’s board of directors in its sole discretion;

 

•

Mr. Kamienski, Ms. Fiano and Mr. Haynie will each be entitled to: (i) participate in any present and future employee benefit, retirement and compensation plans (including Ameris’s 401(k) Profit Sharing Plan); (ii) participate in Ameris’s hospitalization, major medical, disability and group life insurance plans; (iii) four (4) weeks paid vacation during each calendar year of his or her employment; (iv) reimbursement by Ameris for all reasonable business expenses incurred in the course of his or her employment; (v) reimbursement for all mileage driven by such employees in their personal automobiles in connection with the performance of their duties; and (vi) a country club membership for business and personal use;

 

•

if the employment agreement is terminated by Ameris without cause or by the person party to such agreement for good reason, then that person will be entitled to receive severance benefits consisting of a continuation of compensation payments under the employment agreement for the lesser of twelve (12) months from the date of termination and the remainder of the term of the employment agreement; and

 

•

if the employment agreement is terminated by the person party to such agreement upon a change of control of Ameris, then that person will be entitled to receive severance benefits consisting of a continuation of compensation payments under the employment agreement for twelve (12) months from the date of termination of the employment agreement.

The forms of employment agreements which Ameris anticipates entering into with Mr. Kamienski, Ms. Fiano and Mr. Haynie in connection with the merger are filed as exhibits to the Registration Statement of which this proxy statement/prospectus forms a part.

Non-Competition and Non-Disclosure Agreements. As a condition of Ameris’s obligation to complete the merger:

 

•

each of Messrs. Creamer, Kamienski and Haynie and Ms. Fiano will enter into non-competition and non-disclosure agreements with Ameris in forms mutually satisfactory to such person and Ameris;

 

•

each of Randall D. Peterson, Heather B. Hunter and Jason Raymond (each an executive officer of Prosperity Bank) will enter into non-competition and non-disclosure agreements with Ameris in forms mutually satisfactory to such person and Ameris; and

 

•

each non-employee member of the Prosperity board of directors will enter into a non-competition and non-disclosure agreement with Ameris in the form attached as Exhibit C to the merger agreement.

Ameris anticipates that the non-competition and non-disclosure agreements will provide: (i) for Mr. Creamer, a three-year term with an annual cash payment of $350,000.00; (ii) with respect to each of Messrs. Kamienski and Haynie and Ms. Fiano, a two-year term with a one-time payment of $171,000.00, $143,500 and $171,000.00, respectively; and (iii) with respect to each of Messrs. Peterson and Raymond and Ms. Hunter, a one-year term and a one-time cash payment of $206,227.00, $203,602.00 and $196,416.00, respectively. The non-competition and non-disclosure agreements for the non-employee members of Prosperity board of directors will have a one-year term and will provide for a one-time cash payment of $30,000.00.

Ameris anticipates that the non-competition and non-disclosure agreements will also provide that each person party to the agreement will not: (i) disclose or use any confidential information or trade secrets of Prosperity and its subsidiaries; (ii) solicit or attempt to solicit, for the specified period, any customers or actively sought prospective customers of Ameris, Ameris Bank, Prosperity or Prosperity Bank for the purpose of providing competitive services or products; or (iii) solicit or recruit or attempt to solicit or recruit, for a specified period, any employee of Ameris, Ameris Bank, Prosperity or Prosperity Bank, whether or not such employee is full-time or temporary or is employed pursuant to a written agreement or is an at-will employee. Furthermore, in the case of Messrs. Creamer, Kamienski and Haynie and Ms. Fiano or those persons who were non-employee directors of Prosperity, Ameris anticipates that such persons will also agree not to perform duties and responsibilities that are the same or similar to those they may have previously performed for Prosperity, for the specified period and within fifty (50) miles of Prosperity’s offices in St. Augustine, Florida, for any business which conducts any business similar to that of Ameris, Ameris Bank, Prosperity or Prosperity Bank.

The forms of non-competition and non-disclosure agreements which Ameris anticipates entering into with Messrs. Creamer, Kamienski, Haynie, Peterson and Raymond and Ms. Fiano and Ms. Hunter in connection with the merger are filed as exhibits to the Registration Statement of which this proxy statement/prospectus forms a part.

Indemnification and Insurance. As described under “The Merger Agreement — Indemnification and Directors’ and Officers’ Insurance,” for a period of six (6) years after the effective time of the merger, Ameris will indemnify and defend the present and former directors, officers and employees of Prosperity and its subsidiaries against claims pertaining to matters occurring at or prior to the effective time of the merger. Ameris also has agreed, for a period of six (6) years after the effective time of the merger, to use its commercially reasonable efforts to provide directors’ and officers’ liability insurance to reimburse present and former officers and directors of Prosperity with respect to claims arising from facts or events occurring prior to the effective time of the merger. This insurance will contain at least the same coverage and amounts, and contain terms no less advantageous than the coverage currently provided by Prosperity; provided, however, that: (i) if Ameris is unable to maintain or obtain the directors’ and officers’ liability insurance, then Ameris will provide as much comparable insurance as is reasonably available; (ii) officers and directors of Prosperity or its subsidiaries may be required to make application and provide customary representations and warranties to the carrier of the insurance; and (iii) in satisfaction of its obligations to provide the liability insurance, Ameris may require Prosperity to purchase, prior

 

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to but effective as of the effective time of the merger, tail insurance providing such coverage prior to the closing of the merger. In no event shall Prosperity expend, or Ameris be required to expend, for the tail insurance a premium amount in excess of 150% of the annual premiums paid by Prosperity for its directors’ and officers’ liability insurance in effect as of the date of the merger agreement. If the cost of the tail insurance exceeds such maximum premium for the tail insurance, then Prosperity or Ameris, as applicable, will obtain tail insurance or a separate tail insurance policy with the greatest coverage available for a cost not exceeding such maximum premium.

 

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THE MERGER AGREEMENT

The following is a summary of the material provisions of the merger agreement. This summary is qualified in its entirety by reference to the merger agreement, a copy of which is included as Appendix A to this proxy statement/prospectus and is incorporated herein by reference. You should read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.

The Merger

The boards of directors of Prosperity and Ameris have each unanimously approved the merger agreement, which provides for the merger of Prosperity with and into Ameris, with Ameris as the surviving company in the merger. Each share of Ameris common stock outstanding immediately prior to the effective time of the merger will remain outstanding as one share of Ameris common stock. Each share of Prosperity common stock outstanding immediately prior to the effective time of the merger (excluding dissenting shares) will be converted into the right to receive, at the election of the holder, either 3.125 shares of Ameris common stock or $41.50 in cash, subject to the requirement that no more than 50% of the overall consideration may be in the form of cash (with Prosperity shareholder elections subject to customary proration and adjustment procedures applicable to oversubscription for cash consideration). See “— Merger Consideration.”

The merger agreement also provides that, after the effective time of the merger and at or after the close of business on the closing date of the merger, Prosperity Bank, a Florida state-chartered bank and wholly owned first-tier subsidiary of Prosperity, will merge with and into Ameris Bank, a Georgia state-chartered bank and wholly owned first-tier subsidiary of Ameris, with Ameris Bank as the surviving bank of such merger. The terms and conditions of the merger of Ameris Bank and Prosperity Bank will be set forth in a separate merger agreement (referred to as the “bank merger agreement”), the form of which is attached as an exhibit to the merger agreement. As provided in the bank merger agreement, the merger of Ameris Bank and Prosperity Bank may be abandoned at the election of Ameris Bank at any time, whether before or after filings are made for regulatory approval of such merger. We refer to the merger of Ameris Bank and Prosperity Bank as the “bank merger.”

Closing and Effective Time of the Merger

Unless both Ameris and Prosperity agree to a later date, the closing of the merger will take place on a date no later than three (3) business days after all of the conditions to the completion of the merger have been satisfied or waived, other than those that by their nature are to be satisfied or waived at the closing of the merger. Simultaneously with the closing of the merger, Ameris will file articles of merger with the Secretary of State of the State of Georgia and the Department of State of the State of Florida. The merger will become effective at such time as the last articles of merger are filed or such other time as may be specified in the articles of merger.

We currently expect that the merger will be completed in the third quarter of 2013, subject to the approval of the merger agreement by Prosperity shareholders, the receipt of all necessary regulatory approvals and the expiration of all regulatory waiting periods. However, completion of the merger could be delayed if there is a delay in obtaining the required regulatory approvals or in satisfying any other conditions to the merger. No assurance is made as to whether, or when, Ameris and Prosperity will obtain the required approvals or complete the merger. See “— Conditions to Completion of the Merger.”

 

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Merger Consideration

Under the terms of the merger agreement, each share of Prosperity common stock outstanding immediately prior to the effective time of the merger (excluding dissenting shares) will be converted into the right to receive, at the election of the holder, either:

 

•

3.125 shares of Ameris common stock; or

 

•

$41.50 in cash.

The foregoing is subject to the requirement that the number of shares of Prosperity common stock receiving the per share cash consideration in the merger may not exceed the maximum cash shares (which is 50% of the aggregate number of outstanding shares of Prosperity common stock convertible in the merger plus the number of dissenting shares). Prosperity shareholder elections are subject to customary proration and adjustment procedures if the per share cash consideration is oversubscribed. See “— Elections” and “— Proration and Adjustment Procedures.”

No fractional shares of Ameris common stock will be issued in connection with the merger. Instead, Ameris will make to each Prosperity shareholder who would otherwise receive a fractional share of Ameris common stock a cash payment (rounded to the nearest whole cent) equal to: (i) the fractional share amount multiplied by (ii) the Average Ameris Stock Price (which is the average closing sale price of Ameris common stock on the Nasdaq Global Select Market for the twenty (20) consecutive trading days prior to and ending on the fifth (5^th) business day immediately preceding the closing date of the merger, rounded to the nearest whole cent). We refer to the per share stock consideration, the per share cash consideration and cash in lieu of any fractional shares, collectively, as the “merger consideration.”

In addition, if the Average Ameris Stock Price is less than $11.10 per share and, based on the Average Ameris Stock Price, the Ameris common stock underperforms the Keefe Bruyette & Woods Regional Banking Index by more than 20%, considering the performance of such Index during the same period used to calculate the Average Ameris Stock Price as compared to the closing price of such Index on the day immediately prior to the date of the merger agreement, then Prosperity may terminate the merger agreement unless Ameris contributes additional cash consideration equal to the Pricing Differential for payment to Prosperity shareholders electing to receive the per share stock consideration in the merger. See “— Termination.”

A Prosperity shareholder also has the right to obtain the fair value of his or her shares of Prosperity common stock in lieu of receiving the merger consideration by strictly following the appraisal procedures under the FBCA. Shares of Prosperity common stock outstanding immediately prior to the effective time of the merger and which are held by a shareholder who does not vote to approve the merger agreement and who properly demands the fair value of such shares pursuant to, and who complies with, the appraisal procedures under the FBCA are referred to as “dissenting shares.” See “The Merger — Appraisal Rights for Prosperity Shareholders.”

Based upon 377,960 shares of Prosperity common stock outstanding as of             , 2013 and the closing sale price of the Ameris common stock on the Nasdaq Global Select Market of $             on such date:

 

•

if Prosperity shareholders elect to receive in the merger per share stock consideration for all of their shares of Prosperity common stock outstanding immediately prior to the effective time of the merger, then the merger consideration would be valued at approximately $             (excluding cash paid in lieu of any fractional shares);

 

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•

if, however, Prosperity shareholders elect to receive in the merger per share cash consideration for a number of their shares of Prosperity common stock outstanding immediately prior to the effective time of the merger equal to the maximum cash shares, then the merger consideration would be valued at $            , consisting of $             in cash and              in shares of Ameris common stock (excluding cash paid in lieu of any fractional shares).

If Ameris changes the number of shares of Ameris common stock outstanding prior to the effective time of the merger as a result of a stock split, stock combination, stock dividend or similar recapitalization with respect to the Ameris common stock and the record date for such corporate action is prior to the effective time of the merger, then the per share stock consideration shall be proportionately adjusted as necessary to preserve the relative economic benefit to Ameris and Prosperity.

The value of the shares of Ameris common stock to be issued to Prosperity shareholders in the merger will fluctuate between now and the closing date of the merger. We make no assurances as to whether or when the merger will be completed, and you are advised to obtain current sale prices for the Ameris common stock. See “Risk Factors — Because the sale price of the Ameris common stock may fluctuate, you cannot be sure of the value of the merger consideration that you will receive in the merger if you elect to receive the per share stock consideration.”

Elections

Cash Election. The merger agreement provides that each Prosperity shareholder who makes a valid cash election will have the right to receive, in exchange for each share of Prosperity common stock outstanding immediately prior to the effective time of the merger (excluding dissenting shares), subject to proration and adjustment, an amount in cash equal to $41.50. The aggregate cash amount (excluding cash in lieu of any fractional shares and cash equal to the Pricing Differential, if any) that Ameris has agreed to pay in the merger is limited to the aggregate per share cash consideration for the maximum cash shares. As a result, even if a Prosperity shareholder makes a cash election, that holder may nevertheless receive some per share stock consideration. If a Prosperity shareholder makes a valid cash election, then such holder’s shares subject to such cash election are referred to as “cash election shares.”

Stock Election. The merger agreement provides that each Prosperity shareholder who makes a valid stock election will have the right to receive, in exchange for each share of Prosperity common stock outstanding immediately prior to the effective time of the merger (excluding dissenting shares), 3.125 shares of Ameris common stock. No fractional shares of Ameris common stock will be issued in the merger, and a holder of Prosperity common stock who would otherwise be entitled to a fractional share of Ameris common stock will receive cash in lieu thereof. If a Prosperity shareholder makes a valid stock election, then such holder’s shares subject to such stock election are referred to as “stock election shares.”

No Election. Prosperity shareholders who make no election to receive cash or shares of Ameris common stock in the merger, whose elections are not received by the exchange agent by the election deadline or whose forms of election are improperly completed and/or are not signed will be deemed not to have made an election. Prosperity shareholders not making an election will be paid in Ameris common stock. Shares of Prosperity common stock with respect to which no election is deemed to have been made are referred to as “no election shares.”

 

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Proration and Adjustment Procedures

Cash elections made by Prosperity shareholders are subject to adjustment to ensure that the aggregate cash amount (excluding cash in lieu of any fractional shares and cash equal to the Pricing Differential, if any) that would be paid in the merger does not exceed the aggregate per share cash consideration for the maximum cash shares. As a result, even if a Prosperity shareholder makes a cash election, such Prosperity shareholder may nevertheless receive some per share stock consideration.

Proration Adjustment if Cash Consideration is Oversubscribed. Shares of Ameris common stock may be issued to Prosperity shareholders who make cash elections if the aggregate number of cash election shares plus dissenting shares exceeds the maximum cash shares. In this case:

 

•

all stock election shares and no election shares will be converted into the right to receive the per share stock consideration;

 

•

all dissenting shares will be deemed, for the purposes of adjustment and proration, to be converted into the right to receive the per share cash consideration; and

 

•

the exchange agent will select from among the cash election shares, by a pro rata selection process, a sufficient number of shares such that the aggregate number of cash election shares and dissenting shares equals as closely as practicable the maximum cash shares, and all shares so selected will be converted into the right to receive the per share stock consideration (such shares are referred to as “stock designated shares”).

If the total cash consideration is oversubscribed, then a Prosperity shareholder making a cash election will receive the per share stock consideration for such holder’s shares that are stock designated shares and the per share cash consideration for such holder’s remaining cash election shares, if any.

No Adjustment if Cash Consideration is Undersubscribed. If the total cash consideration is undersubscribed, meaning that the aggregate number of cash election shares plus dissenting shares is less than or equal to the maximum cash shares, then:

 

•

all cash election shares will be converted into the right to receive the per share cash consideration; and

 

•

all stock election shares and no election shares will be converted into the right to receive the per share stock consideration.

Election Statements; Exchange of Stock Certificates

Election Statement. An election statement with instructions for making the election as to the form of merger consideration preferred is being mailed to Prosperity shareholders simultaneously with this proxy statement/prospectus. The election statement will allow Prosperity shareholders to make a cash or stock election with respect to the type of merger consideration they wish to receive.

Holders of Prosperity common stock who wish to elect the type of merger consideration they will receive in the merger should carefully review and follow the instructions set forth in the election statement. Prosperity shareholders who hold their shares in “street name” should follow their broker’s instructions for making an election with respect to such shares. All election statements must be received by the exchange agent by 5:00 p.m., Eastern Time, on the election deadline, which is the date prior to the fifth (5^th) business day immediately preceding the closing date of the merger (or such other time and date as Ameris and Prosperity may mutually agree). Shares of Prosperity common stock as to which the holder has not made a valid election prior to the election deadline will be treated as no election shares.

 

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NOTE: The actual election deadline is not currently known. Ameris and Prosperity anticipate issuing a press release to announce the date of the election deadline at least five (5) business days before that deadline. Additionally, Ameris and Prosperity also anticipate posting the date of the election deadline on their respective web sites at least five (5) business days before that deadline.

To make an election, a holder of Prosperity common stock must submit a properly completed election statement so that it is actually received by the exchange agent by the election deadline in accordance with the instructions on the election statement, and such election must not be revoked or changed prior to the election deadline. Neither Ameris nor Prosperity is under any obligation to notify any holder of defects in such holder’s election statement.

An election may be revoked or changed but only by written notice by the person submitting such election received by the exchange agent prior to the election deadline. If an election is revoked, and unless a subsequent properly executed election statement is actually received by the exchange agent by the election deadline, then the holder having revoked the election will be deemed to have made no election with respect to his or her shares of Prosperity common stock. Holders will not be entitled to revoke or change their elections after the election deadline.

Subject to the terms of the merger agreement and the election statement, the exchange agent shall have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in the election statement, and any good faith decisions by the exchange agent or Ameris regarding such matters shall be binding and conclusive. To the extent the holder of dissenting shares submits an election statement, such holder’s election statement will have no effect and the exchange agent will disregard such election notice.

Shares of Prosperity common stock as to which the holder has not made a valid election prior to the election deadline, including as a result of revocation, will be deemed to have made no election. If it is determined that any purported cash election or stock election was not properly made, then the purported election will be deemed to be of no force or effect, and the holder making the purported election will be deemed not to have made an election for these purposes, unless a proper election is subsequently made on a timely basis.

Exchange of Stock Certificates. Prior to the effective time of the merger, Ameris will appoint as the exchange agent under the merger agreement either its transfer agent, Computershare Investor Services, or an unrelated bank or trust company reasonably acceptable to Prosperity. Ameris will also deposit with the exchange agent stock certificates representing the number of shares of Ameris common stock sufficient to deliver the per share stock consideration to be issued pursuant to the merger agreement, cash equal to the aggregate per share cash consideration to be paid pursuant to the merger agreement and, to the extent then determinable, any cash in lieu of fractional shares to be paid pursuant to the merger agreement (collectively referred to as the “exchange fund”).

Promptly after the effective time of the merger, the exchange agent will mail to each holder of record of Prosperity common stock (other than a holder of dissenting shares) a letter of transmittal and instructions for the surrender of the holder’s Prosperity stock certificate(s) for the merger consideration (including cash in lieu of any fractional Ameris shares) and any dividends or distributions to which such holder is entitled pursuant to the merger agreement. Prosperity shareholders should not send in their stock certificates until they receive the letter of transmittal and instructions.

 

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Upon surrender to the exchange agent of the certificate(s) representing his or her shares of Prosperity common stock, accompanied by a properly completed letter of transmittal, a Prosperity shareholder will be entitled to promptly receive after the effective time of the merger the merger consideration (including any cash in lieu of fractional shares). Until surrendered, each such certificate will represent after the effective time of the merger, for all purposes, only the right to receive, without interest, the merger consideration (including any cash in lieu of fractional shares) and any dividends or distributions to which such holder is entitled pursuant to the merger agreement.

No dividends or other distributions with respect to Ameris common stock after completion of the merger will be paid to the holder of any unsurrendered Prosperity stock certificates with respect to the shares of Ameris common stock represented by those certificates until those certificates have been properly surrendered. Subject to applicable abandoned property, escheat or similar laws, following the proper surrender of any such previously unsurrendered Prosperity stock certificate, the holder of the certificate will be entitled to receive, without interest: (i) the amount of unpaid dividends or other distributions with a record date after the effective time of the merger payable with respect to the whole shares of Ameris common stock represented by that certificate; and/or (ii) at the appropriate payment date, the amount of dividends or other distributions payable with respect to shares of Ameris common stock represented by that certificate with a record date after the effective time of the merger (but before the date on which the certificate is surrendered) and with a payment date subsequent to the issuance of the shares of Ameris common stock issuable in exchange for that certificate.

Shares of Ameris common stock and cash in lieu of any fractional shares may be issued or paid in a name other than the name in which the surrendered Prosperity stock certificate is registered if: (i) the certificate surrendered is properly endorsed or otherwise in a proper form for transfer; and (ii) the person requesting the payment or issuance pays any transfer or other similar taxes due or establishes to the satisfaction of Ameris that such taxes have been paid or are not applicable.

After the effective time of the merger, there will be no transfers on the stock transfer books of Prosperity other than to settle transfers of shares of Prosperity common stock that occurred prior to the effective time. If, after the effective time of the merger, certificates for Prosperity common stock are presented for transfer to the exchange agent, the certificates will be cancelled and exchanged for the merger consideration (including cash in lieu of any fractional Ameris shares).

Any portion of the exchange fund that remains unclaimed by Prosperity shareholders at the expiration of six (6) months after the effective time of the merger may be paid to Ameris. In that case, any former Prosperity shareholders who have not yet surrendered their Prosperity stock certificates may after that point look only to Ameris with respect to the merger consideration (including cash in lieu of any fractional shares) and any unpaid dividends and distributions on the shares of Ameris common stock to which they are entitled, in each case, without interest. None of Ameris, the exchange agent or any other person will be liable to any former Prosperity shareholder for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws.

In the event any Prosperity stock certificate is lost, stolen or destroyed, in order to receive the merger consideration (including cash in lieu of any fractional shares), the holder of that certificate must provide an affidavit of that fact and, if reasonably required by Ameris or the exchange agent, post a bond in such amount as Ameris determines is reasonably necessary to indemnify it against any claim that may be made against it with respect to that certificate.

 

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Stock Options

The merger agreement requires Prosperity to cause all outstanding and unexercised options to purchase shares of Prosperity common stock awarded under the Prosperity stock plans to be canceled prior to the effective time of the merger. The termination of the Prosperity stock options (by their own terms or otherwise) is a condition to Ameris’s obligation to complete the merger. See “— Conditions to Completion of the Merger.” Ameris will not assume any outstanding Prosperity stock option or Prosperity stock plan, and none of the outstanding Prosperity stock options will be converted to, or represent rights to acquire, Ameris common stock. No payment will be made to any holder of Prosperity stock options with respect to their cancellation, except that certain executive officers of Prosperity will receive at the closing of the merger shares of restricted Ameris common stock (not to exceed 25,000 shares in the aggregate) in respect of the cancellation of certain of their Prosperity stock options. See “The Merger — Interests of Prosperity Executive Officers and Directors in the Merger — Prosperity Stock Options.”

In the merger agreement, Prosperity has represented to Ameris that, except for the Prosperity stock options granted under the Prosperity stock plans, Prosperity does not have any outstanding options, warrants, rights or other agreements calling for the issuance of Prosperity common stock or other securities of Prosperity.

Conduct of Business Pending the Merger

Pursuant to the merger agreement, Prosperity and Ameris have agreed to certain restrictions on their activities until the effective time of the merger. In general, each party has agreed that, except as otherwise permitted by the merger agreement, or as required by applicable law or a governmental entity, or with the prior written consent of the other party, it will:

 

•

use commercially reasonable best efforts to maintain and preserve intact its business organization and advantageous business relationships;

 

•

not take any action that is intended to or that would reasonably be expected to adversely affect or materially delay the ability of either party or its subsidiaries to obtain any necessary regulatory approvals or to complete the merger; and

 

•

not take any action that is likely to materially impair the party’s ability to perform any of its obligations under the merger agreement or its subsidiary bank to perform any of its obligations under the bank merger agreement.

Ameris has also agreed that it will not, and will not permit any of its subsidiaries to, without the prior written consent of Prosperity, amend its organizational documents (or the organizational documents of any of its significant subsidiaries) in a manner that would adversely affect Prosperity or any of its subsidiaries.

Prosperity has also agreed that it will, and will cause each of its subsidiaries to, conduct its business in the ordinary course consistent with past practice. Prosperity has further agreed that it will not, and will not permit any of its subsidiaries, to do any of the following without the prior written consent of Ameris:

 

•

issue or sell, or authorize the creation of, any additional shares of its capital stock, other ownership interests or any rights to acquire stock or voting debt securities, except pursuant to Prosperity stock options issued under the Prosperity stock plans and outstanding on the date of the merger agreement;

 

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•

issue any other capital securities, including trust preferred or other similar securities, voting debt securities or other securities, debentures or subordinated notes;

 

•

make, declare, pay or set aside for payment any dividend or other distribution on its capital stock or other ownership interests (other than dividends from wholly owned subsidiaries to Prosperity or to another wholly owned subsidiary of Prosperity);

 

•

(i) enter into, amend, renew or terminate any employment, consulting, severance, change in control or similar agreement or arrangement with any director, officer or employee, or grant any salary or wage increase or increase any employee benefit (including incentive or bonus payments) other than (a) at will agreements, (b) normal increases in salary to rank and file employees and (c) severance in accordance with past practice, (ii) hire any new officers, or (iii) promote any employee to a rank of vice president or a more senior position;

 

•

establish, amend, renew or terminate any employee benefit plan or accelerate the vesting of benefits under any employee benefit plan;

 

•

sell, transfer or encumber any of its assets, except in the ordinary course of business consistent with past practice, and in the case of a sale or transfer, at fair value, or sell or transfer any of its deposit liabilities;

 

•

enter into, amend or renew any data processing contract, service provider agreement or any lease, license or maintenance agreement relating to real or personal property or intellectual property, other than any annual renewal of an agreement that is necessary to operate its business in the ordinary course consistent with past practice, or to permit to lapse its rights in any material intellectual property;

 

•

acquire the assets, business or properties of any person (other than pursuant to foreclosures or acquisitions of control, in a fiduciary capacity or in satisfaction of debts contracted prior to the date of the merger agreement, in each case in the ordinary course of business consistent with past practice);

 

•

sell or acquire any loans (excluding originations) or loan participations, except in the ordinary course of business consistent with past practice (but, in the case of a sale, after giving Ameris or Ameris Bank a first right of refusal to acquire such loan or participation), or sell or acquire any servicing rights;

 

•

amend its organizational documents or similar governing documents;

 

•

materially change its accounting principles, practices or methods, except as may be required by accounting principles generally accepted in the United States or any governmental entity;

 

•

enter into or terminate any material contract, or amend or modify in any material respect or renew any existing material contract;

 

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•

settle any claim, action or proceeding outside the ordinary course of business consistent with past practice and involving an amount in excess of $25,000, excluding amounts paid or reimbursed under any insurance policy;

 

•

in the case of Prosperity Bank (i) voluntarily make a material change in its deposit mix, (ii) increase or decrease the interest rate paid on its time deposits or certificates of deposit, except in a manner consistent with past practice and competitive factors in the marketplace, (iii) incur any liability or obligation relating to retail banking and branch merchandising, marketing and advertising activities and initiatives except in the ordinary course of business consistent with past practice, (iv) open any new branch or deposit taking facility, or (v) close or relocate any existing branch or other facility;

 

•

acquire any investment securities outside of the limits specified in the merger agreement;

 

•

purchase any fixed assets where the amount paid or committed is in excess of $25,000 individually or $50,000 in the aggregate, except for emergency repairs or replacements;

 

•

materially change its loan underwriting policies or which classes of persons may approve loans or fail to comply with such policies as previously disclosed to Ameris as provided in the merger agreement, or make loans on extensions of credit except in the ordinary course of business consistent with past practice and otherwise within the limits specified in the merger agreement;

 

•

materially change its interest rate and other risk management policies, procedures and practices, fail to follow its existing policies or practices with respect to managing its exposure to interest rate and other risk, or fail to use commercially reasonable means to avoid any material incurrence in its aggregate exposure to interest rate risk;

 

•

incur any debt for borrowed money other than in the ordinary course of business consistent with past practice with a term not in excess of one year, or incur, assume or become subject to any obligations or liabilities of any other person, other than the issuance of letters of credit in the ordinary course of business and in accordance with the restrictions specified in the merger agreement;

 

•

develop market or implement any new lines of business; or

 

•

make, change or revoke any material tax election (other than in a manner consistent with prior elections), materially amend any tax return, enter into any material tax closing agreement, or settle or compromise any material liability with respect to disputed taxes.

Regulatory Matters

This proxy statement/prospectus forms part of a Registration Statement on Form S-4 which Ameris has filed with the SEC. Each of Ameris and Prosperity have agreed to use its commercially reasonable best efforts to have the Registration Statement on Form S-4 declared effective under the Securities Act as promptly as practicable after its filing and to maintain such effectiveness for as long as necessary to complete the merger and the other transactions contemplated by the merger agreement. Upon the Registration Statement on Form S-4 being declared effective, Prosperity will mail or deliver this proxy statement/prospectus to the Prosperity shareholders.

 

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Ameris has agreed to use its commercially reasonable best efforts to obtain all necessary state securities law or “blue sky” permits and approvals required to carry out the transactions contemplated by the merger agreement, and Prosperity has agreed to furnish all information concerning Prosperity and the holders of Prosperity common stock as may be reasonably requested in connection with any such action.

Ameris and Prosperity have agreed to cooperate with each other and use their respective reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits, consents, approvals and authorizations of all third parties and regulatory and governmental entities that are necessary or advisable to consummate the transactions contemplated by the merger agreement (including the merger and the bank merger) and to comply with the terms and conditions of all such permits, consents, approvals and authorizations.

Prosperity and Ameris have the right to review in advance and, to the extent practicable, each will consult the other on, in each case subject to applicable laws, all the information relating to Prosperity or Ameris, as the case may be, and any of their respective subsidiaries, that appear in any filing made with, or written materials submitted to, any third party or any governmental entity in connection with the transactions contemplated by the merger agreement. In addition, Ameris and Prosperity will consult with each other with respect to the obtaining of all permits, consents, approvals and authorizations of all third parties and governmental entities necessary or advisable to consummate the transactions contemplated by the merger agreement, and each party will keep the other apprised of the status of matters relating to the completion of the merger. Ameris and Prosperity shall promptly deliver to each other copies of all filings, orders and material correspondence to and from all governmental entities in connection with the transactions contemplated by the merger agreement.

Additionally, each of Ameris and Prosperity has agreed to furnish to the other, upon request, all information concerning itself, its subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with this proxy statement/prospectus, the Registration Statement on Form S-4 or any other statement, filing, notice or application made by or on behalf of Ameris, Prosperity or any of their respective subsidiaries to any regulatory or governmental entity in connection with the merger, the bank merger of any or the other transactions contemplated by the merger agreement.

Each of Ameris and Prosperity will promptly advise the other upon receiving any communication from any regulatory or governmental entity the consent or approval of which is required for completion of the merger that causes such party to believe that there is a reasonable likelihood that any requisite regulatory approval will not be obtained or that the receipt of any such approval may be materially delayed.

Nasdaq Listing

Ameris shall use its commercially reasonable best efforts to cause the shares of Ameris common stock to be issued to the holders of Prosperity common stock in the merger to be authorized for listing on the Nasdaq Global Select Market, subject to official notice of issuance, prior to the effective time of the merger.

Employee Matters

Following the effective time of the merger, Ameris must maintain employee benefit plans and compensation opportunities for those persons (as a group) who are full-time, active employees of Prosperity and its subsidiaries on the closing date of the merger (referred to below as “covered

 

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employees”) that provide employee benefits and compensation opportunities which, in the aggregate, are substantially comparable to the employee benefits and compensation opportunities that are available on a uniform and non-discriminatory basis to similarly situated employees of Ameris or its subsidiaries (except that no covered employee may participate in any closed or frozen plan of Ameris or its subsidiaries). Ameris shall give the covered employees full credit for their prior service with Prosperity and its subsidiaries for purposes of eligibility and vesting under any qualified or non-qualified employee benefit plan maintained by Ameris in which covered employees may be eligible to participate and for all purposes under any welfare benefit plans, vacation plans and similar arrangements maintained by Ameris.

With respect to any Ameris health, dental, vision or other welfare plan in which any covered employee is eligible to participate, for the first plan year in which the covered employee is eligible to participate, Ameris or its applicable subsidiary must use its commercially reasonable best efforts to: (i) cause any pre-existing condition limitations or eligibility waiting periods under such plan to be waived with respect to the covered employee to the extent the condition was, or would have been, covered under the Prosperity benefit plan in which the covered employee participated immediately prior to the effective time of the merger; and (ii) recognize any health, dental, vision or other welfare expenses incurred by the covered employee in the year that includes the closing date of the merger (or, if later, the year in which the covered employee is first eligible to participate) for purposes of any applicable deductible and annual out-of-pocket expense requirements.

If, within twelve (12) months after the effective time of the merger, any covered employee is terminated by Ameris or its subsidiaries other than “for cause” or as a result of unsatisfactory job performance, then Ameris will pay severance to the covered employee in an amount equivalent to the severance to which the employee would have been entitled in connection with the termination had it occurred under Prosperity’s severance policy in effect as of the date of the merger agreement and as previously disclosed by Prosperity to Ameris as provided in the merger agreement. Any severance to which a covered employee may be entitled in connection with a termination occurring more than twelve (12) months after the effective time of the merger will be as set forth in the severance policies of Ameris and its subsidiaries as then in effect.

Indemnification and Directors’ and Officers’ Insurance

For a period of six (6) years after the effective time of the merger, Ameris must indemnify and defend the present and former directors, officers and employees of Prosperity and its subsidiaries against all costs or expenses, damages or other liabilities incurred in connection with any claim, action, suit, proceeding or investigation arising out of actions or omissions of such persons in the course of performing their duties for Prosperity occurring at or before the effective time of the merger (including the transactions contemplated by the merger agreement), to the greatest extent as such persons are indemnified or have the right to advancement of expenses pursuant to the organizational documents of Prosperity or its subsidiaries, as applicable, and the FBCA.

For a period of six (6) years after the effective time of the merger, Ameris will use its commercially reasonable efforts to provide director’s and officer’s liability insurance that serves to reimburse the present and former officers and directors of Prosperity or its subsidiaries with respect to claims against them arising from facts or events occurring before the effective time of the merger (including the transactions contemplated by the merger agreement). The directors’ and officers’ liability insurance will contain at least the same coverage and amounts, and contain terms and conditions no less advantageous to the indemnified person as the coverage currently provided by Prosperity; provided, however, that: (i) if Ameris is unable to maintain or obtain the directors’ and officers’ liability insurance, then Ameris will provide as much comparable insurance as is reasonably available; (ii) officers and directors of Prosperity or its subsidiaries may be required to make application and provide customary

 

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representations and warranties to the carrier of the insurance; and (iii) in satisfaction of its obligations to provide the liability insurance, Ameris may require Prosperity to purchase, prior to but effective as of the effective time of the merger, tail insurance providing such coverage prior to the closing of the merger. In no event shall Prosperity expend, or Ameris be required to expend, for the tail insurance a premium amount in excess of 150% of the annual premiums paid by Prosperity for its directors’ and officers’ liability insurance in effect as of the date of the merger agreement. If the cost of the tail insurance exceeds such maximum premium for the tail insurance, then Prosperity or Ameris, as applicable, will obtain tail insurance or a separate tail insurance policy with the greatest coverage available for a cost not exceeding such maximum premium.

Third Party Proposals

Prosperity has agreed that, from the date of the merger agreement until the effective time of the merger or, if earlier, the termination of the merger agreement, it will not, and will cause its subsidiaries not to: (i) initiate, solicit, encourage or knowingly facilitate inquiries or proposals with respect to, or engage in any discussions or negotiations concerning, or provide to any person any confidential or nonpublic information concerning, its and its subsidiaries’ business, properties or assets (referred to as “Prosperity confidential information”); or (ii) have any discussions with any person relating to any tender or exchange offer, proposal for a merger or consolidation or other business combination involving Prosperity or any of its significant subsidiaries, or any proposal to acquire more than 20% of the voting power in, or more than 20% of the fair market value of the business, assets or deposits of, Prosperity or any of its significant subsidiaries (referred to as an “acquisition proposal”).

Notwithstanding this agreement, at any time prior to the approval of the merger agreement by the Prosperity shareholders, if Prosperity receives an unsolicited acquisition proposal that the Prosperity board of directors determines in good faith is reasonably likely to constitute or result in a superior proposal (as defined below), then Prosperity may: (i) negotiate and enter into a confidentiality agreement with the third party making the acquisition proposal with terms and conditions no less favorable to Prosperity than the confidentiality agreement entered into by Prosperity and Ameris prior to the execution of the merger agreement; (ii) furnish Prosperity confidential information to the third party making the acquisition proposal pursuant to such confidentiality agreement; and (iii) negotiate with the third party making the acquisition proposal regarding such proposal, if the Prosperity board of directors determines in good faith (following consultation with counsel) that failure to take such actions would, or would be reasonably likely to result in, a violation of its fiduciary duties under applicable law. Prosperity must advise Ameris in writing within twenty-four (24) hours following receipt of any acquisition proposal and the substance thereof and must keep Ameris apprised of any related developments, discussions and negotiations on a current basis.

A “superior proposal” means a written acquisition proposal that the Prosperity board of directors concludes in good faith is more favorable from a financial point of view to the Prosperity shareholders than the merger (after receiving the advice of its financial advisors, taking into account the likelihood of consummation of such transaction on the terms set forth in such proposal and taking into account all legal, financial, regulatory and other aspects of such proposal and any other relevant factors permitted under applicable law). Furthermore, in order to constitute a “superior proposal”, an acquisition proposal must be for a tender or exchange offer, proposal for a merger or consolidation or other business combination involving Prosperity or any of its significant subsidiaries or any proposal to acquire more than 50% of the voting power in, or more than 50% of the fair market value of the business, assets or deposits of, Prosperity or any of its significant subsidiaries.

 

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The merger agreement generally prohibits the Prosperity board of directors making a change in recommendation (i.e., from withdrawing or modifying in a manner adverse to Ameris the recommendation of the Prosperity board of directors’ set forth in this proxy statement/prospectus that the Prosperity shareholders vote to approve the merger agreement, or from making or causing to be made any third party or public communication proposing or announcing an intention to withdraw or modify in a manner adverse to Ameris such recommendation). At any time prior to the approval of the merger agreement by the Prosperity shareholders, however, the Prosperity board of directors may effect a change in recommendation in response to a bona fide written unsolicited acquisition proposal that the Prosperity board of directors determines in good faith (after consultation with counsel and taking into account all adjustments to the terms of the merger agreement offered by Ameris) constitutes a superior proposal if the Prosperity board of directors determines in good faith (after consultation with counsel and taking into account all adjustments to the terms of the merger agreement offered by Ameris) that the failure to make a change in recommendation would constitute, or be reasonably likely to constitute, a violation of its fiduciary duties. The Prosperity board of directors may not make a change in recommendation, or terminate the merger agreement to pursue a superior proposal, unless: (i) Prosperity has not breached any of the provisions of the merger agreement relating to third party proposals; and (ii) the Prosperity board of directors determines in good faith (after consultation with counsel) that such superior proposal continues to be a superior proposal (after taking into account all adjustments to the terms of the merger agreement offered by Ameris), Prosperity has given Ameris at least three (3) days’ prior written notice of its intention to take such action and before making such change in recommendation, Prosperity has negotiated in good faith with Ameris during the notice period (to the extent Ameris wishes to negotiate) to enable Ameris to adjust the terms of the merger agreement so that such superior proposal no longer constitutes a superior proposal.

If the Prosperity board of directors makes a change in recommendation, or if Prosperity pursues a superior proposal, Prosperity could be required to pay Ameris a termination fee of $2.25 million in cash. See “— Termination,” and “— Termination Fees.”

Representations and Warranties

The merger agreement contains generally customary representations and warranties of Ameris and Prosperity relating to their respective businesses that are made as of the date of the merger agreement and as of the closing date of the merger. The representations and warranties of each of Ameris and Prosperity have been made solely for the benefit of the other party, and these representations and warranties should not be relied on by any other person. In addition, these representations and warranties:

 

•

have been qualified by information set forth in confidential disclosure schedules in connection with signing the merger agreement—the information contained in these schedules modifies, qualifies and creates exceptions to the representations and warranties in the merger agreement;

 

•

will not survive consummation of the merger;

 

•

may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to the merger agreement if those statements turn out to be inaccurate;

 

•

are in some cases subject to a materiality standard described in the merger agreement which may differ from what may be viewed as material by you; and

 

•

were made only as of the date of the merger agreement or such other date as is specified in the merger agreement.

 

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The representations and warranties made by Ameris and Prosperity to each other primarily relate to:

 

•

corporate organization, existence, power and authority;

 

•

capitalization;

 

•

ownership of subsidiaries;

 

•

corporate authorization to enter into the merger agreement and to consummate the merger;

 

•

absence of any breach of organizational documents, violation of law or breach of agreements as a result of the merger;

 

•

regulatory approvals required in connection with the merger;

 

•

reports filed with governmental entities, including, in the case of Ameris, the SEC;

 

•

financial statements;

 

•

absence of material adverse effect on each party since December 31, 2011;

 

•

compliance with laws and the absence of regulatory agreements;

 

•

litigation;

 

•

transactions with affiliates;

 

•

accuracy of the information supplied by each party for inclusion or incorporation by reference in this proxy statement/prospectus; and

 

•

fees paid to financial advisors.

Prosperity has also made representations and warranties to Ameris with respect to:

 

•

material contracts;

 

•

the inapplicability to the merger of state takeover laws;

 

•

employee benefit plans and labor matters;

 

•

the opinion from Ewing;

 

•

environmental matters;

 

•

loan matters;

 

•

intellectual property;

 

•

derivative instruments and transactions;

 

•

administration of fiduciary accounts;

 

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•

tax matters;

 

•

Community Reinvestment Act compliance;

 

•

maintenance of insurance policies;

 

•

ownership and other property rights;

 

•

liquidity of investment portfolio;

 

•

accuracy of books and records; and

 

•

absence of actions or omissions by present or former directors, advisory directors, officers, employees or agents that would give rise to a material claim for indemnification.

Conditions to Completion of the Merger

Mutual Closing Conditions. The obligations of Ameris and Prosperity to complete the merger are subject to the satisfaction of the following conditions:

 

•

the approval of the merger agreement by Prosperity shareholders;

 

•

the authorization for listing on the Nasdaq Global Select Market of the shares of Ameris common stock to be issued in the merger;

 

•

the effectiveness of the Registration Statement on Form S-4, of which this proxy statement/ prospectus is a part, under the Securities Act, and the absence of a stop order suspending the effectiveness of the Registration Statement on Form S-4 or any proceeding initiated or threatened by the SEC for that purpose;

 

•

the absence of any order, injunction or decree issued by any court or agency of competent jurisdiction or other law preventing or making illegal the consummation of the merger, the bank merger or the other transactions contemplated by the merger agreement; and

 

•

the receipt of all regulatory approvals required to consummate the transactions contemplated by the merger agreement, without any condition, or carryover of any condition applicable to Prosperity or Prosperity Bank, that would increase any of the minimum regulatory capital requirements of Ameris following the merger or of Ameris Bank following the bank merger, and the expiration of all statutory waiting periods.

Additional Closing Conditions for the Benefit of Ameris. In addition to the mutual closing conditions, Ameris’s obligation to complete the merger is subject to the satisfaction or waiver of the following conditions:

 

•

the accuracy, as of the date of the merger agreement and as of the effective time of the merger (or such other date specified in the merger agreement), of the representations and warranties made by Prosperity to the extent specified in the merger agreement, and the receipt by Ameris of a certificate signed by the Chief Executive Officer or Chief Financial Officer of Prosperity to that effect;

 

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•

the performance in all material respects by Prosperity of all obligations required to be performed by it under the merger agreement at or prior to the effective time of the merger, and the receipt by Ameris of a certificate signed by the Chief Executive Officer or the Chief Financial Officer of Prosperity to that effect;

 

•

the termination of all outstanding Prosperity stock options issued under Prosperity stock plans (by their terms or otherwise) as of the effective time of the merger;

 

•

the dissenting shares constituting less than 10% of the outstanding shares of Prosperity common stock;

 

•

each of Eddie Creamer (President and Chief Operating Officer of Prosperity and President and Chief Executive Officer of Prosperity Bank) and Christopher J. Kamienski, Shirley P. Fiano and Kevin Haynie (each an executive officer of Prosperity Bank) entering into employment agreements and non-competition and non-disclosure agreements with Ameris in forms mutually satisfactory to such person and Ameris;

 

•

each of Randall D. Peterson, Heather B. Hunter and Jason Raymond (each an executive officer of Prosperity Bank) entering into non-competition and non-disclosure agreements with Ameris; and

 

•

each non-employee member of the Prosperity board of directors entering into a non-competition and non-disclosure agreement with Ameris in the form attached as Exhibit C to the merger agreement.

Additional Closing Conditions for the Benefit of Prosperity. In addition to the mutual closing conditions, Prosperity’s obligation to complete the merger is subject to the satisfaction or waiver of the following conditions:

 

•

accuracy, as of the date of the merger agreement and as of the effective time of the merger (or such other date specified in the merger agreement), of the representations and warranties made by Ameris to the extent specified in the merger agreement, and the receipt by Prosperity of a certificate signed by the Chief Executive Officer or Chief Financial Officer of Ameris to that effect;

 

•

performance in all material respects by Ameris of all obligations required to be performed by it under the merger agreement at or prior to the effective time of the merger, and the receipt by Prosperity of a certificate signed by the Chief Executive Officer or Chief Financial Officer of Ameris to that effect; and

 

•

execution and delivery by Ameris of the employee agreements and the non-competition and non-disclosure agreements discussed above.

Termination

The merger agreement may be terminated at any time prior to the effective time of the merger, whether before or after the approval of the merger agreement by Prosperity shareholders, as follows:

 

•

by mutual written consent of Ameris and Prosperity;

 

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•

by either Ameris or Prosperity, if (i) a regulatory or other governmental authority that must grant a requisite regulatory approval has denied approval of the merger or the bank merger and such denial has become final and non-appealable (provided that the denial is not attributable to the failure of the party seeking to terminate the merger agreement to perform any covenant in the merger agreement required to be performed prior to the effective time of the merger) or (ii) a regulatory or other governmental authority has issued a final, non-appealable order, injunction or decree permanently enjoining or otherwise prohibiting or making illegal the completion of the merger or the bank merger;

 

•

by either Ameris or Prosperity, if the merger has not been completed by December 31, 2013, unless the failure to complete the merger by such date is due to the failure of the party seeking to terminate the merger agreement to perform or observe the covenants and agreements of such party set forth in the merger agreement;

 

•

by either Ameris or Prosperity, if there is a breach by the other party of any representation, warranty, covenant or other agreement set forth in the merger agreement, that would, individually or in the aggregate, result in the failure to satisfy the closing conditions of the party seeking termination and such breach is not cured within twenty (20) days following written notice to the breaching party or by its nature or timing cannot be cured within that time period (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement);

 

•

by Ameris, if the Prosperity board of directors fails to recommend that the Prosperity shareholders approve the merger agreement or makes a change in recommendation, or if Prosperity materially breaches any of the provisions of the merger agreement relating to third party proposals, as described under “— Third Party Proposals”;

 

•

by Prosperity, prior to obtaining the approval of the merger agreement by the Prosperity shareholders, in order to enter into an agreement relating to a superior proposal in accordance with the provisions of the merger agreement relating to third party proposals, as described under “— Third Party Proposal” (provided that Prosperity has not materially breached any such provisions and pays Ameris the termination fee described under “— Termination Fees”);

 

•

by either Ameris or Prosperity, if the Prosperity shareholders fail to approve the merger agreement at a duly held meeting of Prosperity shareholders or any adjournment or postponement thereof (provided that the Prosperity board of directors has recommended that the Prosperity shareholders approve the merger agreement and has not made a change in recommendation); and

 

•

by Prosperity, in the event that both: (i) the Average Ameris Stock price is less than $11.10 (meaning that the average closing sale price of the Ameris common stock during the applicable period declined by more than 20% from the closing sale price of the Ameris common stock on the day immediately prior to the date of the merger agreement); and (ii) the number obtained by dividing the Average Ameris Stock Price by $13.87 is less than the number obtained by (a) dividing the Final Index Price by the Initial Index Price (each as defined below) and then (b) multiplying the quotient so obtained by 0.80 (meaning that the Ameris common stock has underperformed the Keefe Bruyette & Woods Regional Banking Index by more than 20% considering the performance of such Index during the same period used to calculate the Average Ameris Stock Price as

 

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compared to the closing price of such Index on the day immediately prior to the date of the merger agreement). However, if Prosperity elects to terminate the merger agreement on this basis, it must provide notice to Ameris, and Ameris may then elect within two (2) business days after receipt of the notice to adjust the merger consideration by paying to holders of stock election shares and no election shares, pro rata and in addition to their receipt of the per share stock consideration otherwise issuable in respect of such shares, cash equal to the Pricing Differential. For purposes of the merger agreement: (i) “Final Index Price” means the average closing price of the KBW Regional Banking Index for the trading days included in the period beginning on the day that is twenty (20) consecutive trading days prior to the fifth (5th) business day immediately preceding the closing date of the merger and ending on such fifth (5th) day; and (ii) “Initial Index Price” means $59.91, which is the closing price of the KBW Regional Banking Index on the trading day immediately prior to the date of the merger agreement. The “Pricing Differential” is the amount of the difference between (i) the aggregate number of stock election shares and no election shares, multiplied by $11.10, and (ii) the aggregate number of stock election shares and no election shares, multiplied by the Average Ameris Stock Price.

Termination Fees

Prosperity must pay Ameris a termination fee of $2.25 million:

 

•

if the merger agreement is terminated by Ameris because the Prosperity board of directors did not recommend that the Prosperity shareholders approve the merger agreement or made a change in recommendation, or because Prosperity materially breached any of the provisions of the merger agreement relating to third party proposals, as describe under “— Third Party Proposals”;

 

•

if the merger agreement is terminated by Prosperity, prior to obtaining approval of the merger agreement by the Prosperity shareholders, in order to enter into an agreement relating to a superior proposal in accordance with the provisions of the merger agreement relating to third party proposals, as described under “— Third Party Proposals”; and

 

•

if the merger agreement is terminated by Ameris or Prosperity because the Prosperity shareholders fail to approve the merger agreement and, if prior to such termination, there is a publicly announced acquisition proposal and, within six (6) months of such termination, Prosperity or any of its significant subsidiaries enters into a definitive agreement with respect to such acquisition proposal or completes such acquisition proposal. For purposes of this termination right, the references to 20% in the definition of “acquisition proposal” are deemed to be references to 50%.

Ameris must pay Prosperity a termination fee:

 

•

equal to $3.20 million, if the merger agreement is terminated by Prosperity as a result of a willful and material breach by Ameris of any of its covenants or agreements set forth in the merger agreement; and

 

•

equal to $1.25 million, if the merger agreement is terminated by Ameris because a regulatory or other governmental authority that must grant a requisite regulatory approval has denied approval of the merger or the bank merger and (i) the regulatory or governmental entity conditioned its provision of such approval solely on an increase in

 

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any minimum regulatory capital requirements of Ameris (as the surviving corporation in the merger) or Ameris Bank (as the resulting institution in the bank merger) or (ii) Ameris withdrew any application seeking such approval because such approval would have included a condition increasing any such minimum regulatory capital requirements.

Effect of Termination

If the merger agreement is validly terminated, the merger agreement will become void and have no effect, and none of Prosperity, Ameris, any of their respective subsidiaries or any of the officers or directors of any of them will have any liability under the merger agreement, or in connection with the transactions contemplated by the merger agreement, except that:

 

•

the provisions of the merger agreement relating to confidentiality obligations of the parties, the payment of expenses, the termination fees, publicity and certain other technical provisions will continue in effect notwithstanding termination of the merger agreement; and

 

•

termination will not relieve a breaching party from liability for any willful and material breach of any provision of the merger agreement.

Waiver; Amendment

The merger agreement may be amended by the parties, by action taken or authorized by their respective boards of directors, at any time before or after approval of the matters presented in connection with the merger by the Prosperity shareholders, in writing signed on behalf of each of the parties, provided that after any approval of the transactions contemplated by the merger agreement by the Prosperity shareholders, there may not be, without further approval of the Prosperity shareholders, any amendment of the merger agreement that requires further approval under applicable law.

At any time prior to the effective time of the merger, the parties, by action taken or authorized by their respective boards of directors, may, to the extent legally allowed: (i) extend the time for the performance of any of the obligations or other acts of the other party; (ii) waive any inaccuracies in the representations and warranties contained in the merger agreement; or (iii) waive compliance with any of the agreements or conditions contained in the merger agreement. Any agreement on the part of a party to any extension or waiver must be in writing signed on behalf of such party. Any such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition will not operate as a waiver of any subsequent or other failure.

Expenses

Regardless of whether the merger is completed, all expenses incurred in connection with the merger, the bank merger, the merger agreement and other transactions contemplated thereby will be paid by the party incurring the expenses, except that Prosperity will bear the costs and expenses of printing and mailing this proxy statement/prospectus and Ameris has paid the filing fee for the Registration Statement on Form S-4 of which this proxy statement/prospectus is a part.

 

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THE COMPANIES

Ameris

Ameris Bancorp, a Georgia corporation, is a bank holding company whose business is conducted primarily through Ameris Bank, a Georgia state-chartered bank and a wholly owned subsidiary of Ameris. As a bank holding company, Ameris performs certain shareholder and investor relations functions and seeks to provide financial support, if necessary, to Ameris Bank.

Ameris is headquartered in Moultrie, Georgia, and provides a full range of banking services to its retail and commercial customers through branches primarily concentrated in select markets in Georgia, Alabama, Florida and South Carolina. These branches serve distinct communities in Ameris’s business areas with autonomy but do so as one bank, leveraging Ameris’s favorable geographic footprint in an effort to acquire more customers.

Ameris was incorporated on December 18, 1980 as a Georgia corporation. Ameris operates 57 domestic banking offices with no foreign activities. At December 31, 2012, Ameris had approximately $3.00 billion in total assets, $1.96 billion in total loans, $2.62 billion in total deposits and stockholders’ equity of $279.0 million. Deposits with Ameris Bank are insured, up to applicable limits, by the FDIC.

The Ameris common stock is traded on the Nasdaq Global Select Market under the symbol “ABCB.”

Ameris’s executive offices are located at 310 First St., S.E., Moultrie, Georgia 31768. Ameris’s telephone number is (229) 890-1111 and website is www.amerisbank.com.

The information on Ameris’s website is not a part of this proxy statement/prospectus, and the reference to Ameris’s website address does not constitute incorporation by reference of any information on that website into this proxy statement/prospectus.

Additional information about Ameris is included in documents incorporated by reference into this proxy statement/prospectus. See “Documents Incorporated By Reference.”

Prosperity

General. The Prosperity Banking Company is a bank holding company under the Bank Holding Company Act of 1956, as amended. It is the holding company for Prosperity Bank, a Florida state-chartered commercial bank. Prosperity Bank commenced operations in 1983 at its principal office located in St. Augustine, Florida. Prosperity also owns all of the outstanding membership interests of Prosperity Land Holdings, LLC, which facilitates certain land acquisition transaction on behalf of Prosperity. Prosperity Bank is a full service commercial bank, providing a wide range of business and consumer financial services in its target marketplace, which is comprised primarily of St. Johns, Duval, Flagler, Bay, Putnam and Volusia Counties in Florida. Prosperity Bank operates 11 branch offices in addition to its main office.

Prosperity Bank’s deposits are insured by the Deposit Insurance Fund of the FDIC up to applicable limits. The operations of Prosperity Bank are subject to the supervision and regulation of the FDIC and the FOFR.

Prosperity Bank provides a range of consumer and commercial banking services to individuals, businesses and industries. The basic services offered by Prosperity Bank include demand noninterest bearing accounts, money market deposit accounts, NOW accounts, time deposits, safe deposit services, credit cards, debit cards, direct deposits, notary services, money orders, night depository, cashier’s checks, domestic collections, bank drafts, automated teller services, drive-in tellers, banking by mail, online banking, remote deposit capture and a full range of consumer loans, both collateralized and uncollateralized. In addition, Prosperity Bank makes secured and unsecured commercial and real estate loans and issues stand-by letters of credit. Prosperity Bank provides automated teller machine (“ATM”) cards and is a member of the Star and Cirrus networks, thereby permitting customers to utilize the convenience of Prosperity Bank’s ATM network and Star and Cirrus member machines both nationwide and internationally. Prosperity Bank does not have trust powers and, accordingly, no trust services are provided.

The revenues of Prosperity Bank are primarily derived from interest on, and fees received in connection with, real estate and other loans, from interest and dividends from investment securities, service charge income generated from demand accounts and residential loan fees, ATM fees and other services. The principal sources of funds for Prosperity Bank’s lending activities are its deposits (primarily consumer deposits), loan repayments and proceeds from investment securities. The principal expenses of Prosperity Bank are operating and general administrative expenses and the interest paid on deposits.

As is the case with banking institutions generally, Prosperity Bank’s operations are materially and significantly influenced by general economic conditions and by related monetary and fiscal policies of financial institution regulatory agencies, including the Federal Reserve and the FDIC. Deposit flows and costs of funds are influenced by interest rates on competing investments and general market rates of interest. Lending activities are affected by the demand for financing of real estate and other types of loans, which in turn is affected by the interest rates at which such financing may be offered and other factors affecting local demand and availability of funds.

Competition. Prosperity Bank encounters strong competition both in making loans and in attracting deposits (the primary source of lendable funds). The deregulation of the banking industry and the widespread enactment of state laws that permit multi-bank holding companies, as well as an increasing level of interstate banking, have combined to create a highly competitive environment for commercial banking. In one or more aspects of its business, Prosperity Bank competes with other commercial banks, savings and loan associations, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking companies and other financial intermediaries. Most of these competitors, some of which are affiliated with bank holding companies, have substantially greater resources and lending limits, and may offer certain services that Prosperity Bank does not currently provide. In addition, many of

 

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Prosperity Bank’s non-bank competitors are not subject to the same extensive federal regulations that govern bank holding companies and federally insured banks. Recent federal and state legislation has heightened the competitive environment in which financial institutions must conduct their business, and the potential for competition among financial institutions of all types has increased significantly. No assurance is given that increased competition from other financial institutions will not have an adverse effect on Prosperity Bank’s operations.

Strategy. Prosperity Bank’s business strategy is to operate as a diversified financial services company providing a variety of banking and other financial services, with an emphasis on commercial business loans to small and medium-sized businesses and consumer and residential mortgage lending. Prosperity Bank emphasizes comprehensive retail and business products and responsive, decentralized decision-making which reflects Prosperity Bank’s knowledge of its local markets and customers. Prosperity Bank offers a wide range of commercial and retail banking and financial services to businesses and individuals.

Prosperity Bank’s marketing strategy is targeted to:

 

•

capitalize on its personal relationship approach that it believes differentiates it from its larger competitors;

 

•

provide customers with access to local executives who make key credit and other decisions;

 

•

pursue commercial lending opportunities with small to mid-sized businesses that are underserved by its larger competitors; and

 

•

cross-sell its products and services to its existing customers to leverage its relationships and enhance profitability.

Commercial Banking. Prosperity Bank focuses its commercial loan originations on small and mid-sized businesses (generally up to $10 million in annual sales) and such loans are usually accompanied by significant related deposits. Commercial underwriting is driven by cash flow analysis supported by collateral analysis and review. Commercial loan products include commercial real estate construction and term loans; working capital loans and lines of credit; demand, term and time loans; and equipment, inventory and accounts receivable financing. Prosperity Bank offers a range of cash management services and deposit products to commercial customers. Internet banking and remote deposit capture are currently available to commercial customers.

Retail Banking. Prosperity Bank’s retail banking activities emphasize consumer deposit and checking accounts. An extensive range of these services is offered by Prosperity Bank to meet the varied needs of its customers from young persons to senior citizens. In addition to traditional products and services, Prosperity Bank offers contemporary products and services, such as debit cards, Internet banking and electronic bill payment services. Consumer loan products offered by Prosperity Bank include home equity lines of credit, second mortgages, new and used auto loans, new and used boat loans, overdraft protection and unsecured personal credit lines.

Mortgage Banking. Prosperity Bank’s mortgage banking business is structured to provide a source of fee income from the process of originating product for sale on the secondary market, as well as the origination of loans to be held in Prosperity Bank’s loan portfolio. Mortgage banking capabilities include conventional and nonconforming mortgage underwriting and construction and permanent financing.

Credit Administration. Prosperity Bank’s lending activities are subject to written policies approved by its board of directors to ensure proper management of credit risk. Loans are subject to a

 

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defined credit process that includes credit evaluation of borrowers, risk-rating of credits, establishment of lending limits and application of lending procedures, including the holding of adequate collateral and the maintenance of compensating balances, as well as procedures for ongoing identification and management of credit deterioration. Regular portfolio reviews are performed to identify potential underperforming credits, estimate loss exposure and ascertain compliance with applicable policies. Management review consists of evaluation of the financial strengths of the borrower and the guarantor, the related collateral and the effects of economic conditions.

Prosperity Bank generally does not make commercial or consumer loans outside its market area unless the borrower has an established relationship with Prosperity Bank and conducts its principal business operations within Prosperity Bank’s market area. Consequently, Prosperity Bank and its borrowers are affected by the economic conditions prevailing in its market area.

Liquidity. Liquidity management involves the ability to meet the cash flow requirements of customers who may be either depositors wanting to withdraw their funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. In the ordinary course of business, Prosperity Bank’s cash flows are generated from interest and fee income, as well as from loan repayments, the sale or maturity of investments available-for-sale. In addition to cash and due from banks, Prosperity Bank considers all securities available-for-sale as a primary source of asset liquidity. Many factors affect the ability to accomplish these liquidity objectives successfully, including the economic environment, the asset/liability mix within the balance sheet and Prosperity Bank’s reputation in the community. Prosperity Bank’s principal sources of funds are net increases in deposits, principal and interest payments on loans and proceeds from sales and maturities of investments. Prosperity Bank uses its capital resources primarily to fund existing and continuing loan commitments and to purchase investment securities.

Employees. As of June 30, 2013, Prosperity Bank employed 163 persons. The employees are not represented by any collective bargaining group. Prosperity Bank considers its relations with its employees to be good.

Properties. The main office of Prosperity Bank is located at 100 Southpark Boulevard, St. Augustine, Florida. Prosperity Bank also operates 11 additional banking offices.

Legal Proceedings. Prosperity Bank is periodically a party to or otherwise involved in legal proceedings arising in the normal course of business, such as claims to enforce liens, claims involving the making and servicing of real property loans and other issues incident to its business. Prosperity’s management does not believe that there is any pending or threatened proceeding against Prosperity Bank that, if determined adversely, would have a material adverse effect on Prosperity’s or Prosperity Bank’s financial position, liquidity or results of operations.

Regulatory Agreements. Prosperity Bank is subject to a Consent Order dated June 28, 2010, issued to Prosperity Bank by the FDIC and FOFR. Among other things, the Consent Order requires the board of directors to continue their participation in the affairs of Prosperity Bank and cause Prosperity Bank to: (i) maintain qualified management; (ii) maintain a Tier 1 leverage capital ratio of at least 8% and a total risk-based capital ratio of at least 12%; (iii) review its assets/liability management policy; (iv) reduce classified assets; (v) submit a written plan for expenses and profitability; (vi) continue to review and determine the adequacy of its allowance for loan and lease losses; and (vii) not declare or pay any dividends, bonuses or interest and principal on subordinated debentures without written approval of the FDIC and the FOFR.

Also, in 2010, Prosperity entered into a written agreement with the FRBA. Among other things, this agreement requires the board of directors to cause Prosperity to: (i) utilize Prosperity’s financial and managerial resources to serve as a source of strength to Prosperity Bank; (ii) not declare or pay any dividends or interest and principal on subordinated debentures without the prior written approval of the

 

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FRBA; (iii) not incur, increase or guarantee any debt without the prior written approval of the FRBA; (iv) submit a written plan to maintain sufficient capital on a consolidated basis; (v) submit a written statement of Prosperity’s planned sources and uses of cash for operating expenses and other purposes; and (vi) not purchase or redeem any shares of its stock without the prior written approval of the FRBA.

Prosperity’s management believes that Prosperity and Prosperity Bank are in substantial compliance with their respective agreements, with the exception of the maintenance of the minimum capital levels.

Provisions of the Consent Order, dated June 28, 2010 issued to Prosperity Bank by the FDIC and the FOFR prevent Prosperity Bank and Prosperity from making distributions of interest without written approval. As such, Prosperity Bank has not made its quarterly interest payments on its subordinated dentures since 2010. Prosperity has not made its quarterly interest payments on its subordinated debentures since 2010.

 

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Prosperity’s Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of Prosperity as of June 30, 2013 and 2012 and for the years ended December 31, 2012 and 2011 is intended to review the significant factors affecting the financial condition and results of operations of The Prosperity Banking Company for such periods and should be read in conjunction with the consolidated financial statements of Prosperity, notes to consolidated financial statements and financial data presented elsewhere in this proxy statement/prospectus.

Critical Accounting Policies. The preparation of financial statements and the related disclosures in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Prosperity believes that its determination of the allowance for loan losses and the fair value of assets affect Prosperity’s most significant judgments and estimates used in the preparation of Prosperity’s consolidated financial statements. Prosperity’s accounting policies are described in detail in Note 1 of its Consolidated Financial Statements for the years ended December 31, 2012, 2011 and 2010. The following is a brief description of Prosperity’s critical accounting policies involving significant management valuation judgment. Management has discussed these critical accounting policies with Prosperity’s audit committee.

Allowance for Loan Losses

The allowance for loan losses represents management’s estimate of losses inherent in the existing loan portfolio. The allowance for loan losses is increased by the provision for loan losses charged to expense and reduced by loans charged off, net of recoveries. The allowance for loan losses is determined based on management’s assessment of several factors including, but not limited to, reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on segments of the loan portfolio, historical loan loss experiences and the level of classified and nonperforming loans.

Loans are considered impaired if, based on current information and events, it is probable that Prosperity Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans is based on either the fair value of the underlying collateral, the present value of the future cash flows discounted at the historical effective interest rate stipulated in the loan agreement, or the estimated market value of the loan. In measuring the fair value of the collateral, management uses assumptions (e.g., discount rate) and methodologies (e.g., comparison to the recent selling price of similar assets) consistent with those that would be utilized by unrelated third parties.

Management’s assessment is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Changes in various internal and external environmental factors, including, but not limited to, the financial condition of individual borrowers, economic conditions, historical loss experience, or the condition of the various markets in which collateral may be sold may affect the required level of the allowance for loan losses and the associated provision for loan losses. Should these environmental factors change, a different amount may be reported for the allowance for loan losses and the associated provision for loan losses.

Estimates of Fair Value

The estimation of fair value is significant to a number of Prosperity’s assets, including, but not limited to, investment securities, goodwill, other real estate owned, and other repossessed assets. These are all recorded at either fair value or at the lower of cost or fair value. Fair values are volatile and may be influenced by a number of factors. Circumstances that could cause estimates of the fair value of certain assets and liabilities to change include a change in prepayment speeds, discount rates, or market interest rates. Prosperity’s estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Fair values for most investment securities are based on quoted market prices. If quoted market prices are not available, fair values are based on the quoted prices of similar instruments. The fair values of other real estate owned are typically determined based on appraisals by third parties, less estimated costs to sell.

Results of Operations. The net (loss) income for the six months ended June 30, 2013 and 2012 was ($448,000) and $1,316,000, respectively. Net income (loss) for the years ended December 31, 2012 and 2011 was $1.2 million and ($4.8 million), respectively. Net (loss) income per share (basic) for June 30, 2013 and 2012 was ($1.18) and $3.48 respectively. Net income (loss) per share (basic) for December 31, 2012 and 2011 was $3.09 and ($12.78), respectively. The decrease in net income from June 30, 2012 to June 30, 2013 was due primarily to a decrease in net interest income and an increase in provision for loan losses. The increase in net income from December 31, 2011 to December 31, 2012 was primarily related to a decrease in provision for loan losses and write-downs of other real estate owned, a reduction in noninterest expense and a one-time federal tax adjustment. Net income for each of the periods as a percent of average assets and average equity was as follows:

Return on Average Assets

 

Six Months Ended June 30,								Year Ended December 31,
2013				2012				2012				2011
	(0.12	)%			0.33	%			0.15	%			(0.59	%)

Return on Average Equity

 

Six Months Ended June 30,								Year Ended December 31,
2013				2012				2012				2011
	(5.39	)%			14.85	%			6.46	%			(25.04	%)

Net Interest Income. Net interest income is the principal source of Prosperity’s net income and represents the difference between interest income (interest and fees earned on earning assets, primarily loans and investment securities) and interest expense (interest paid on deposits and borrowed funds). Net interest income is affected by the interest rate earned and paid and by volume changes, principally in loans, investment securities, deposits and borrowed funds. The following schedules provide a summary concerning net interest income, average balances and the related interest earned and paid on each major type of asset and liability accounts for the interim periods ended June 30, 2013 and 2012, and the years ended December 31, 2012 and 2011. The average yield on all earning assets and the average cost of all interest-bearing liabilities during each such period are also summarized.

Nonaccruing loans are included in interest-earning assets; however, interest income on such loans is recorded when actually received. Interest-earning assets include tax-exempt loans, and the related income is presented on an actual income basis because tax equivalent basis is not materially different. Prosperity held $8.6 million and $4.7 million in tax-exempt loans as of June 30, 2013 and 2012, respectively. Prosperity held $4.4 million and $4.8 million in tax-exempt loans as of December 31, 2012 and 2011, respectively.

 

 

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		For the Six Months Ended June 30, 2013
		Average Balance				Interest Income/Expense				Average Yield/Rate
		(Dollars in thousands)
Interest-earning assets:
Loans		$	478,549			$	12,207				5.10%
Taxable investment securities			175,704				1,614				1.84%
Other			18,866				19				0.20%
Total interest-earning assets			673,119				13,840				4.11%
Noninterest-earning assets:
Cash and due from banks			8,459
Premises and equipment			37,325
Other assets			39,210
Allowance for loan losses			(7,832	)
Total assets		$	750,281
Interest-bearing liabilities:
Savings deposits			34,893				3				0.02%
Other Time deposits			137,880				437				0.63%
FHLB advances			165,000				2,667				3.23%
Subordinated debts			20,000				213				2.13%
Junior subordinated debts			29,500				406				2.75%
Repurchase agreements			19,273				13				0.13%
NOW and money market deposits			169,919				123				0.14%
Total Interest-bearing liabilities			576,465				3,862				1.34%
Noninterest-bearing liabilities:
Demand deposits			144,993
Other liabilities			7,691
Total Liabilities			729,149
Shareholders’ equity			21,132
Total liabilities and shareholders’ equity		$	750,281
Net interest income						$	9,978
Net interest margin											2.96%

 

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		For the Six Months Ended June 30, 2012
		Average Balance				Interest Income/Expense				Average Yield/Rate
		(Dollars in thousands)
Interest-earning assets:
Loans		$	481,466			$	13,558				5.63%
Taxable investment securities			199,329				2,204				2.21%
Other			26,139				30				0.23%
Total interest-earning assets			706,934				15,792				4.47%
Noninterest-earning assets:
Cash and due from banks			10,678
Premises and equipment			41,229
Other assets			48,147
Allowance for loan losses			(10,025	)
Total assets		$	796,963
Interest-bearing liabilities:
Savings deposits			33,010				2				0.01%
Other Time deposits			167,873				670				0.80%
FHLB advances			165,000				2,719				3.30%
Subordinated debts			20,000				235				2.35%
Junior subordinated debts			29,500				700				4.75%
Repurchase agreements			13,418				12				0.18%
NOW and money market deposits			200,740				328				0.33%
Total Interest-bearing liabilities			629,541				4,666				1.48%
Noninterest-bearing liabilities:
Demand deposits			136,693
Other liabilities			6,526
Total Liabilities			772,760
Shareholders’ equity			24,203
Total liabilities and shareholders’ equity		$	796,963
Net interest income						$	11,126
Net interest margin											3.15%

 

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		For the Year Ended December 31, 2012
		Average Balance				Interest Income/Expense				Average Yield/Rate
		(Dollars in thousands)
Interest-earning assets:
Loans		$	476,845				$26,731				5.61%
Taxable investment securities			188,835				4,222				2.24%
Other			27,425				54				0.20%
Total interest-earning assets		$	693,105				31,007				4.47%
Noninterest-earning assets:
Cash and due from banks			6,998
Premises and equipment			40,729
Other assets			44,990
Allowance for loan losses			(9,243	)
Total assets		$	776,579
Interest-bearing liabilities:
Savings deposits			33,445				5				0.01%
Other Time deposits			155,598				1,154				0.74%
FHLB advances			165,000				5,450				3.30%
Subordinated debts			20,000				467				2.34%
Junior subordinated debts			29,500				1,408				4.77%
Repurchase agreements			14,368				24				0.17%
NOW and money market deposits			193,768				502				0.26%
Total Interest-bearing liabilities		$	611,679				9,010				1.47%